EXHIBIT 10.40
[EXECUTION]
________________________________________________________________________________
LOAN AGREEMENT
______________________________
WESTERN GAS RESOURCES, INC.
and
NATIONSBANK OF TEXAS, N.A.
as Agent
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
as Co-Agent
and certain banks
as Lenders
______________________________
$300,000,000
May 30, 1997
________________________________________________________________________________
TABLE OF CONTENTS
Page
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ARTICLE I. - Definitions and References..................................... 1
Section 1.1. Defined Terms............................................ 1
Section 1.2. Exhibits and Schedules; Additional Definitions........... 16
Section 1.3. Amendment of Defined Instruments......................... 16
Section 1.4. References and Titles.................................... 17
Section 1.5. Calculations and Determinations.......................... 17
ARTICLE II. - The Loans..................................................... 17
Section 2.1. Committed Loans.......................................... 17
Section 2.2. Requests for New Loans................................... 18
Section 2.3. Continuations and Conversions of Existing Loans.......... 19
Section 2.4. Competitive Bid Loans.................................... 20
Section 2.5. Use of Proceeds.......................................... 23
Section 2.6. Optional Prepayments..................................... 23
Section 2.7. Mandatory Prepayments.................................... 24
Section 2.8. Payments to Lenders...................................... 24
Section 2.9. Facility Fees............................................ 25
Section 2.10. Increased Cost and Reduced Return........................ 25
Section 2.11. Limitation on Types of Loans............................. 27
Section 2.12. Illegality............................................... 27
Section 2.13. Treatment of Affected Loans.............................. 27
Section 2.14. Compensation............................................. 28
Section 2.15. Taxes.................................................... 28
Section 2.16. Compensation Procedure................................... 30
Section 2.17. Interest Rate Changes.................................... 30
ARTICLE III. - Letters of Credit............................................ 31
Section 3.1. LCs...................................................... 31
Section 3.2. Reimbursement of LCs..................................... 31
Section 3.3. Transferees of LCs....................................... 33
Section 3.4. Extension of Maturity of LCs............................. 33
Section 3.5. Restriction on Liability................................. 33
Section 3.6. No Duty to Inquire....................................... 34
ARTICLE IV. - Conditions Precedent to Lending............................... 34
Section 4.1. Documents to be Delivered................................ 34
Section 4.2. Additional Conditions Precedent.......................... 35
ARTICLE V. - Representations and Warranties................................. 36
Section 5.1. Borrower's Representations and Warranties................ 36
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Section 5.2. Representation by Lenders................................. 41
ARTICLE VI. - Covenants of Borrower.......................................... 41
Section 6.1. Affirmative Covenants..................................... 41
Section 6.2. Negative Covenants........................................ 47
ARTICLE VII. - Security...................................................... 53
Section 7.1. The Security.............................................. 53
Section 7.2. Offset.................................................... 53
Section 7.3. Guaranties of Borrower's Subsidiaries..................... 53
Section 7.4. Deposits.................................................. 54
ARTICLE VIII. - Events of Default and Remedies............................... 55
Section 8.1. Events of Default......................................... 55
Section 8.2. Remedies.................................................. 58
Section 8.3. Indemnity................................................. 58
ARTICLE IX. - Agent.......................................................... 58
Section 9.1. Appointment, Powers, and Immunities....................... 59
Section 9.2. Reliance by Agent......................................... 59
Section 9.3. Defaults.................................................. 59
Section 9.4. Rights as Lender.......................................... 60
Section 9.5. Indemnification........................................... 60
Section 9.6. Non-Reliance on Agent and Other Lenders................... 60
Section 9.7. Resignation of Agent...................................... 61
Section 9.8. Appointment and Authority................................. 61
Section 9.9. Exculpation, Agent's Reliance, Etc........................ 61
Section 9.10. Lenders' Credit Decisions................................. 62
Section 9.11. Expenses; Indemnification................................. 62
Section 9.12. Rights as Lender.......................................... 63
Section 9.13. Adjustments............................................... 63
Section 9.14. Benefit of Article IX..................................... 64
Section 9.15. Agency/Administrative Fee................................. 64
Section 9.16. Co-Agent.................................................. 64
ARTICLE X. - Miscellaneous................................................... 64
Section 10.1. Waivers and Amendments; Acknowledgements.................. 64
Section 10.2. Survival of Agreements; Cumulative Nature................. 66
Section 10.3. Notices................................................... 66
Section 10.4. Joint and Several Liability; Parties in Interest.......... 67
Section 10.5. Assignments and Participations............................ 67
Section 10.6. Governing Law; Submission to Process...................... 69
Section 10.7. Limitation on Interest.................................... 69
Section 10.8. Termination; Limited Survival............................. 70
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Section 10.9. Severability............................................ 71
Section 10.10. Confidentiality......................................... 71
Section 10.11. Counterparts............................................ 71
SECTION 10.12. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. ........... 71
Section 10.13. Restatement............................................. 72
SCHEDULE 1 - Disclosure Schedule
SCHEDULE 2 - Security Schedule
SCHEDULE 3 - Lenders
SCHEDULE 4 - Joint Ventures
EXHIBIT A - Committed Note
EXHIBIT B - Borrowing Notice
EXHIBIT C - Letter of Credit Application
EXHIBIT D - Continuation/Conversion Notice
EXHIBIT E - Officer's Certificate
EXHIBIT F - Assignment and Acceptance
EXHIBIT G - Form of Opinion of Borrower's General Counsel
EXHIBIT H - Form of Cash Flow Projections
EXHIBIT I - Competitive Bid Request
EXHIBIT J - Invitation to Bid
EXHIBIT K - Competitive Bid
EXHIBIT L - Competitive Bid Accept/Reject Letter
EXHIBIT M - Competitive Bid Note
EXHIBIT N - Notice of Final Agreement
EXHIBIT O - Risk Management Policy
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LOAN AGREEMENT
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THIS LOAN AGREEMENT is made as of May 30, 1997, and shall be effective for
all purposes as of the Effective Date, by and among Western Gas Resources, Inc.,
a Delaware corporation (herein called "Borrower"), NationsBank of Texas, N.A., a
national banking association (herein called "Agent"), Bank of America National
Trust and Savings Association, as Co-Agent, and Lenders referred to below. In
consideration of the mutual covenants and agreements contained herein the
parties hereto agree as follows:
ARTICLE I. - Definitions and References
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Section 1.1. Defined Terms. As used in this Agreement, each of the
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following terms has the meaning given it in this Section 1.1 or in the sections
and subsections referred to below:
"Affiliate" means, as to any Person, each other Person that directly or
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indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person. A Person shall be
deemed to be "controlled by" any other Person if such other Person possesses,
directly or indirectly, power
(a) to vote 15% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing
general partners; or
(b) to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"Agent" means NationsBank, as Agent hereunder, and its successors in such
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capacity.
"Agreement" means this Loan Agreement.
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"Applicable Lending Office" means, for each Lender and for each Type of
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Committed Loan, the "Lending Office" of such Lender (or of an affiliate of such
Lender) designated for such Type of Loan on Schedule 3 or such other office of
such Lender (or an affiliate of such Lender) as such Lender may from time to
time specify to Agent and Borrower by written notice in accordance with the
terms hereof as the office by which its Committed Loans of such Type are to be
made and maintained.
"At Risk Position" has the meaning given it in Section 6.2(k).
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"Authorized Officer" means, with respect to any act to be performed or duty
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to be discharged by or on behalf of any Person who is not an individual, any
officer, agent or representative thereof who is at the time in question
authorized to perform such act or discharge such duty on behalf of such Person.
"Base Rate" means the per annum rate of interest equal to the greater of
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(i) the Prime Rate from time to time in effect or (ii) the Federal Funds Rate
from time to time in effect, plus one-half of one percent (.50%). If the Prime
Rate or the Federal Funds Rate, as the case may be, changes after the date
hereof the Base Rate shall be automatically increased or decreased, as the case
may be, without notice to Borrower from time to time as of the effective time of
each such change. The Base Rate shall in no event, however, exceed the Highest
Lawful Rate.
"Base Rate Loans" means Loans bearing interest at the Base Rate.
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"Base Rate Payment Date" means (i) the first day of each January, April,
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July and October beginning on and including July 1, 1997, and (ii) any day on
which past due interest or principal is owed hereunder and is unpaid. If the
terms hereof provide that payments of interest or principal hereon shall be
deferred from one Base Rate Payment Date to another day, such other day shall
also be a Base Rate Payment Date.
"Borrower" means Western Gas Resources, Inc., a Delaware corporation.
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"Borrowing" means any of the following: (i) a borrowing of new Committed
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Loans of a single Type pursuant to Section 2.2; (ii) a continuation or
conversion of existing Committed Loans into a single Type (and, in the case of
Committed Eurodollar Loans, with the same Interest Period) pursuant to Section
2.3; and (iii) a combination of new Committed Loans and a continuation or
conversion of existing Committed Loans in a single Type (and, in the case of
Committed Eurodollar Loans, with the same Interest Period).
"Borrowing Notice" means a request for a Borrowing made by Borrower either
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(i) in writing in the form and substance of the "Borrowing Notice" attached
hereto as Exhibit B, duly completed, or (ii) by telephone providing the same
information to Agent.
"Business Day" means a day, other than a Saturday or Sunday, on which
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commercial banks are open for business with the public in Dallas, Texas and New
York City, New York. Any Business Day in any way relating to Committed
Eurodollar Loans (such as the day on which an Interest Period begins or ends)
must also be a day on which, in the judgment of Agent, significant transactions
in dollars are carried out in the interbank eurocurrency market.
"Change in Control" means any of the following:
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(a) any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of more than 25% of the
total Voting Shares of Borrower after the date hereof; or
(b) Borrower is merged with or into or consolidated with another Person and
immediately after giving effect to the merger or consolidation, (i) less than
50% of the total voting power of the outstanding Voting Shares of the surviving
or resulting Person is then
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"beneficially owned" (within the meaning of Rule 13d-3 under the Exchange Act)
in the aggregate by the stockholders of Borrower immediately prior to such
merger or consolidation, and (ii) any "person" or "group" (as defined in Section
13(d)(3) or 14(d)(2) of the Exchange Act) has become the direct or indirect
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more
than 50% of the total voting power of the Voting Shares of the surviving or
resulting Person; or
(c) Borrower, either individually or in conjunction with one or more
Subsidiaries, sells, assigns, conveys, transfers, leases or otherwise disposes
of, or the Subsidiaries sell, assign, convey, transfer, lease or otherwise
dispose of, all or substantially all of the properties of Borrower and the
Subsidiaries, taken as a whole (either in one transaction or a series of related
transactions) including capital stock of the Subsidiaries, to any Person (other
than Borrower or a wholly owned Subsidiary); or
(d) during any consecutive two-year period, individuals who at the
beginning of such period constituted the board of directors of Borrower
(together with any new directors whose election by such board of directors or
whose nomination for election by the stockholders of Borrower was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the board of directors of Borrower then in office; or
(e) the liquidation or dissolution of Borrower.
"CIGNA Group" means, collectively, Connecticut General Life Insurance
-----------
Company, CIGNA Property and Casualty Insurance Company, Insurance Company of
North America, Life Insurance Company of North America, The Canada Life
Assurance Company, Canada Life Insurance Company of America, Canada Life
Insurance Company of New York, The Franklin Life Insurance Company and Royal
MacCabees Life Insurance Company.
"Closing Date" means the date on which this Agreement becomes effective.
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"Commitment" means $300,000,000.
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"Commitment Period" means the period from and including the Closing Date
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until and including the earlier of March 31, 2002 or the day on which the Notes
become due and payable in full.
"Committed Base Loan" means a Committed Loan which does not bear interest
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at the Fixed Rate.
"Committed Eurodollar Loan" means a Committed Loan which is properly
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designated to bear interest at the Fixed Rate pursuant to Section 2.2 or 2.3.
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"Committed Loan" has the meaning given it in Section 2.1.
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"Committed Note" has the meaning given it in Section 2.1.
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"Competitive Bid" means a response from any Lender to an Invitation to Bid,
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substantially in the form of Exhibit K.
"Competitive Bid Accept/Reject Letter" means a notice sent by Borrower to
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Agent, substantially in the form of Exhibit L, indicating its acceptance or
rejection of Competitive Bids from various Lenders.
"Competitive Bid Interest Period" means, with respect to a Competitive Bid
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Loan, a period from one day to fifty-nine days as specified in the Competitive
Bid applicable thereto.
"Competitive Bid Loan" means a loan from a Lender to Borrower pursuant to
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the bidding procedure described in Section 2.4.
"Competitive Bid Note" has the meaning given it in Section 2.4(f).
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"Competitive Bid Rate" means, for any Competitive Bid Loan, the fixed rate
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at which such Lender is willing to make such Competitive Bid Loan indicated in
its Competitive Bid. The Competitive Bid Rate shall in no event, however,
exceed the Highest Lawful Rate.
"Competitive Bid Request" means a request by Borrower in the form of
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Exhibit I for Lenders to submit Competitive Bids.
"Consolidated" refers to the consolidation of any Person, in accordance
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with GAAP, with its properly consolidated subsidiaries. References herein to a
Person's Consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the consolidated financial statements,
financial position, financial condition, liabilities, etc. of such Person and
its properly consolidated subsidiaries.
"Continuation/Conversion Notice" means a request for a continuation or
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conversion of existing Committed Loans made by Borrower pursuant to Section 2.3
either (i) in writing in the form and substance of the "Continuation/Conversion
Notice" attached hereto as Exhibit D, duly completed, or (ii) by telephone
providing the same information to Agent.
"Continue", "Continuation", and "Continued" shall refer to the continuation
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pursuant to Section 2.3 of a Committed Eurodollar Loan of one Type as a
Committed Eurodollar Loan of the same Type from one Interest Period to the next
Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a conversion
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pursuant to Section 2.3 of one Type of Loan into another Type of Loan.
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"Debt" of any Person means the sum of the following indebtedness,
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liabilities and obligations of such Person (WITHOUT DUPLICATION), whether
matured or unmatured, liquidated or unliquidated, primary or secondary:
(a) obligations for borrowed money,
(b) obligations to pay the deferred purchase price of property or
services,
(c) obligations evidenced by a bond, debenture, note or similar
financial instrument,
(d) obligations which (i) would under GAAP be shown on such Person's
balance sheet as a liability, and (ii) are payable more than one year from
the date of creation thereof (other than reserves for taxes and reserves
for contingent obligations),
(e) obligations arising under Hedging Contracts to which such Person
is a party,
(f) obligations arising under leases, whether or not the payments
thereunder are capitalized in accordance with GAAP,
(g) obligations arising under conditional sales or other title
retention agreements,
(h) obligations owing under direct or indirect guaranties of Debt of
any other Person or constituting obligations to purchase or acquire or to
otherwise protect or insure a creditor against loss in respect of Debt of
any other Person (such as obligations under working capital maintenance
agreements, agreements to keep-well, or agreements to purchase Debt,
assets, goods, securities or services),
(i) obligations (for example, repurchase agreements) to purchase
securities or other property, if such obligations arise out of or in
connection with the sale of the same or similar securities or property,
(j) obligations with respect to letters of credit or reimbursement
agreements therefor,
(k) obligations with respect to payments received in consideration of
oil, gas, or other minerals yet to be acquired or produced at the time of
payment (including obligations under "take-or-pay" contracts to deliver gas
in return for payments already received and the undischarged balance of any
production payment created by such Person or for the creation of which such
Person directly or indirectly received payment), or
--
(l) obligations to deliver goods or services in consideration of
advance payments therefor;
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provided, however, that the "Debt" of any Person shall not include Debt that was
incurred by such Person on ordinary trade terms to vendors, suppliers, or other
Persons providing goods and services for use by such Person in the ordinary
course of its business, unless and until such Debt is outstanding more than
ninety (90) days past the original invoice or billing date therefor.
"Debt to Capitalization Ratio" means, at the time of determination, the
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ratio of (a) Funded Debt to (b) the sum of the Funded Debt plus Shareholders'
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Equity. (Determination will be made in connection with the delivery of the
officer's certificate pursuant to Section 6.1(b)(iii) and may be made pursuant
to Section 2.17 from time to time.)
"Debt Securities" means collectively, (i) those senior notes dated October
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27, 1992, September 22, 1993, December 27, 1993, October 27, 1994 and July 28,
1995 issued by Borrower pursuant to that certain Master Shelf Agreement dated as
of December 19, 1991 between Borrower and the Prudential Insurance Company of
America (as amended and restated from time to time, the "Shelf Agreement") and
any additional notes issued pursuant to the Shelf Agreement (ii) the 7.65%
senior notes due April 30, 2003 in the aggregate principal amount of $50,000,000
issued by Borrower pursuant to various note purchase agreements among Borrower,
MIGC, MGTC, WGRS, WGRT and each member of the CIGNA Group, as amended and
restated from time to time, and (iii) the 8.02% senior notes due December 1,
2005 in the aggregate principal amount of $42,000,000 issued by Borrower
pursuant to a note purchase agreement among Borrower and the members of the 1995
Note Purchasers Group (as amended and restated from time to time, the "1995 Note
Purchase Agreement").
"Default" means any Event of Default and any default, event or condition
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which would, with the giving of any requisite notices and the passage of any
requisite periods of time, constitute an Event of Default.
"Disclosure Report" means either a notice given by Borrower under Section
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6.1(d) or a certificate given by Borrower's chief financial officer, treasurer,
executive vice president or president under Section 6.1(b)(iii).
"Disclosure Schedule" means Schedule 1 hereto.
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"EBITDA" means with respect to any Person, for any period, the sum
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(determined without duplication on a Consolidated basis and in accordance with
GAAP) of (a) such Person's net income (or net loss), and (b) such Person's
Consolidated taxes, interest, depreciation, amortization and depletion expenses
taken into account in determining such net income (or net loss) for such period.
"Effective Date" means the date of the first Borrowing hereunder.
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"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender; and
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(iii) any other Person approved by Agent and, unless an Event of Default has
occurred and is continuing at the time any assignment is effected in accordance
with Section 10.5; Borrower, such approval not to
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be unreasonably withheld or delayed by Borrower and such approval to be deemed
given by Borrower if no objection is received by the assigning Lender and Agent
from Borrower within two Business Days after notice of such proposed assignment
has been provided by the assigning Lender to Borrower; provided, however, that
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any such Eligible Assignee shall have capital and surplus in excess of
$1,000,000,000 and, in Agent's reasonable opinion, has experience in lending to
companies in the oil and gas business and provided further that neither Borrower
nor an Affiliate of Borrower (excluding the members of the Board of Directors of
Borrower and their Affiliates) shall qualify as an Eligible Assignee.
"Environmental Laws" means any and all federal, state, local and foreign
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statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution use, treatment,
storage, disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time, together with all rules and regulations promulgated
with respect thereto.
"ERISA Plan" means any employee pension benefit plan subject to Title IV of
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ERISA maintained by any Related Person or any Affiliate thereof with respect to
which any Related Person has a fixed or contingent liability.
"Eurodollar Rate" means, for any Committed Eurodollar Loan for any Interest
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Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor 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. If for any reason such
rate is not available, the term "Eurodollar Rate" shall mean, for any Committed
Eurodollar Loan 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,
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however, if more than one rate is specified on Reuters Screen LIBO Page, the
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applicable rate shall be the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%).
"Eurodollar Spread" means, with respect to each Committed Eurodollar Loan:
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(a) for each period in which the Debt to Capitalization Ratio in effect
pursuant to Section 2.17 is less than .35 to 1.0, .275%;
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(b) for each period in which the Debt to Capitalization Ratio in effect
pursuant to Section 2.17 is equal to or greater than .35 to 1.0 but less than
.45 to 1.0, .325%;
(c) for each period in which the Debt to Capitalization Ratio in effect
pursuant to Section 2.17 is equal to or greater than .45 to 1.0 but less than
.50 to 1.0, .35%; and
(d) for each period in which the Debt to Capitalization Ratio in effect
pursuant to Section 2.17 is equal to or greater than .50 to 1.0, .425%.
"Event of Default" has the meaning given it in Section 8.1.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Existing Agreement" means that certain First Restated Loan Agreement
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(Revolver) dated as of September 2, 1994, among Borrower, Agent and Lenders
named therein.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
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upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
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for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to Agent (in its
individual capacity) on such day on such transactions as determined by Agent.
"Final Maturity Date" means March 31, 2002.
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"Fiscal Quarter" means a three-month period ending on March 31, June 30,
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September 30 or December 31 of any year.
"Fiscal Year" means a twelve-month period ending on December 31 of any
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year.
"Fixed Rate" means, with respect to each particular Committed Eurodollar
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Loan and the associated Eurodollar Rate and Reserve Requirement, the rate per
annum calculated by Agent (rounded upwards, if necessary, to the nearest 1/100
of 1%) determined on a daily basis pursuant to the following formula:
Fixed Rate =
Eurodollar Rate + Eurodollar Spread
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100.0% - Reserve Requirement
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The Fixed Rate for any Committed Eurodollar Loan shall change whenever the
Eurodollar Spread changes and whenever the Reserve Requirement changes. The
Fixed Rate shall in no event, however, exceed the Highest Lawful Rate.
"Fixed Rate Payment Date" means, with respect to any Committed Eurodollar
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Loan: (i) the day on which the related Interest Period ends and (ii) any day on
which past due interest or past due principal is owed hereunder with respect to
such Committed Eurodollar Loan and is unpaid. If the terms hereof provide that
payments of interest or principal with respect to such Committed Eurodollar Loan
shall be deferred from one Fixed Rate Payment Date to another day, such other
day shall also be a Fixed Rate Payment Date.
"Funded Debt" means the aggregate of the following Debt of Borrower and its
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Subsidiaries, after elimination of intercompany items and other Consolidation in
accordance with GAAP: (a) Debt (including the Obligations) for borrowed money,
regardless of maturity, (b) Debt constituting an obligation to pay the deferred
purchase price of property, (c) Debt evidenced by a bond, debenture, note or
similar instrument, (d) Debt which is due and payable at the time in question,
with respect to letters of credit or reimbursement agreements therefor, and (e)
Debt arising under or with respect to any Permitted Receivables Facility.
"GAAP" means those generally accepted accounting principles and practices
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which are recognized as such by the Financial Accounting Standards Board (or any
generally recognized successor) and which, in the case of Borrower and its
Consolidated subsidiaries, are applied for all periods after the date hereof in
a manner consistent with the manner in which such principles and practices were
applied to the audited Initial Financial Statements. If any change in any
accounting principle or practice is required by the Financial Accounting
Standards Board (or any such successor) in order for such principle or practice
to continue as a generally accepted accounting principle or practice, all
reports and financial statements required hereunder with respect to Borrower or
with respect to Borrower and its Consolidated subsidiaries may be prepared in
accordance with such change but, if such change is material, all calculations
and determinations to be made hereunder may be made in accordance with such
change only after notice of such change is given to each Lender and Majority
Lenders agree to such change insofar as it affects the accounting of Borrower or
of Borrower and its Consolidated subsidiaries.
"Guarantor" means MIGC, MGR, MGTC, PGT, WPS, WGRC, WGRS, WGRO and WGRT and
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any other Person who has guaranteed some or all of the Obligations pursuant to a
guaranty listed on the Security Schedule or any other Person who has guaranteed
some or all of the Obligations and who has been accepted by Agent as a Guarantor
or any Subsidiary of Borrower which now or hereafter executes and delivers a
guaranty to Agent pursuant to Section 7.3.
"Hazardous Materials" means any substances regulated under any
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Environmental Law, whether as pollutants, contaminants, or chemicals, or as
industrial, toxic or hazardous substances or wastes, or otherwise.
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"Hedging Contracts" means futures contracts, forward contracts, swap, cap
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or collar contracts, option contracts, hedging contracts, other derivative
contracts, or similar agreements.
"Highest Lawful Rate" means, with respect to each Lender, the maximum
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nonusurious rate of interest that such Lender is permitted under applicable law
to contract for, take, charge, or receive with respect to its Loan. All
determinations herein of the Highest Lawful Rate, or of any interest rate
determined by reference to the Highest Lawful Rate, shall be made separately for
each Lender as appropriate to assure that the Loan Documents are not construed
to obligate any Person to pay interest to any Lender at a rate in excess of the
Highest Lawful Rate applicable to such Lender.
"Initial Financial Statements" means the audited annual Consolidated
----------------------------
financial statements of Borrower dated as of December 31, 1996 and the unaudited
quarterly Consolidated financial statements of Borrower dated as of March 31,
1997.
"Interest Period" means, with respect to each particular Committed
---------------
Eurodollar Loan, a period of 1, 2, 3 or 6 months, as specified in the Borrowing
Notice or Continuation/Conversion Notice applicable thereto, beginning on and
including the date specified in such Borrowing Notice or Continuation/Conversion
Notice (which must be a Business Day), and ending on but not including the same
day of the month as the day on which it began (e.g., a period beginning on the
third day of one month shall end on but not include the third day of another
month), provided that each Interest Period which would otherwise end on a day
which is not a Business Day shall end on the next succeeding Business Day
(unless such next succeeding Business Day is the first Business Day of a
calendar month, in which case such Interest Period shall end on the immediately
preceding Business Day). No Interest Period may be elected, which would extend
past the date on which the associated Note is due and payable in full.
"Invitation to Bid" means an invitation by Agent to Lender, substantially
-----------------
in the form of Exhibit J, inviting each Lender to submit Competitive Bids in
response to a Competitive Bid Request.
"Issuing Bank" shall mean NationsBank of Texas, N.A., in its capacity as
------------
the issuer of LCs hereunder, and its successors in such capacity.
"Late Payment Rate" means, at the time in question, four percent (4.0%) per
-----------------
annum plus the Base Rate then in effect; provided that, with respect to any
Committed Eurodollar Loan with an Interest Period extending beyond the date such
Committed Eurodollar Loan becomes due and payable, "Late Payment Rate" shall
mean four percent (4.0%) per annum plus the related Fixed Rate; provided further
that, with respect to any Competitive Bid Loan, "Late Payment Rate" shall mean
four percent (4.0%) per annum plus the applicable Competitive Bid Rate, unless
otherwise agreed to by Borrower and the applicable Lender. The Late Payment
Rate shall in no event, however, exceed the Highest Lawful Rate.
"LC" has the meaning given it in Section 3.1.
--
-10-
"LC Obligations" means, at the time in question, the sum of all Matured LC
--------------
Debt plus the maximum amounts which Issuing Bank might then or thereafter be
called upon to advance under all LCs then outstanding.
"Lenders" means each signatory hereto (other than Borrower), including
-------
NationsBank of Texas, N.A. in its capacity as a lender hereunder rather than as
Agent, and the successors of each as holder of a Note.
"Lien" means, with respect to any property or assets, any right or interest
----
therein of a creditor to secure Debt owed to him or any other arrangement with
such creditor which provides for the payment of such Debt out of such property
or assets or which allows him to have such Debt satisfied out of such property
or assets prior to the general creditors of any owner thereof, including any
lien, mortgage, security interest, pledge, deposit, production payment, rights
of a vendor under any title retention or conditional sale agreement or lease
substantially equivalent thereto, tax lien, mechanic's or materialman's lien, or
any other charge or encumbrance for security purposes, whether arising by law or
agreement or otherwise, but excluding any right of offset which arises without
agreement in the ordinary course of business. "Lien" also means any filed
financing statement, any registration of a pledge (such as with an issuer of
uncertificated securities), or any other arrangement or action which would serve
to perfect a Lien described in the preceding sentence, regardless of whether
such financing statement is filed, such registration is made, or such
arrangement or action is undertaken before or after such Lien exists.
"Loan" means a Committed Loan or a Competitive Bid Loan, as applicable.
----
"Loans" means all Committed Loans and Competitive Bid Loans.
------
"Loan Documents" means this Agreement, the Notes, the LCs, the Security
--------------
Documents and all other agreements, certificates, documents, instruments and
writings at any time delivered in connection herewith or therewith (excluding
term sheets, commitment letters, correspondence and similar documents used in
the negotiation hereof, except to the extent the same contain information about
Borrower or its Affiliates, properties, business or prospects, and further
excluding all offering memorandums prepared by NationsBank Capital Markets,
Inc., for use in connection with the Loans).
"Majority Lenders" shall mean at the time in question two or more Lenders
----------------
collectively having at least a 66-2/3% Percentage Share; provided, however, that
in the event the obligation of Lenders to make Committed Loans hereunder has
been terminated or the Obligations have been accelerated at the time in
question, "Majority Lenders" shall mean two or more Lenders whose aggregate
ratable share of the sum of the aggregate unpaid principal balance of all Loans
at the time in question and the aggregate unpaid Matured LC Debt at such time is
at least 66 2/3%.
"Material Adverse Effect" shall mean a material, adverse effect on the
-----------------------
businesses, properties, prospects, operations, or financial condition of
Borrower on a Consolidated basis or
-11-
on the right or ability of any Related Person to consummate the transactions
contemplated by the Loan Documents or to perform its obligations thereunder.
"Matured LC Debt" has the meaning given it in Section 3.2.
---------------
"Maximum Loan Amount" means the amount of $300,000,000.
-------------------
"MGR" means Mountain Gas Resources, Inc., a Delaware corporation.
---
"MGTC" means MGTC, Inc., a Wyoming corporation.
----
"MIGC" means MIGC, Inc., a Delaware corporation.
----
"NationsBank" means NationsBank of Texas, N.A., in its individual capacity.
-----------
"1995 Note Purchasers Group" means, collectively, The Variable Annuity Life
--------------------------
Insurance Company, American General Life Insurance Company, Gulf Life Insurance
Company, First Allmerica Financial Life Insurance Company, Allmerica Financial
Life Insurance and Annuity Company, and The Mutual Life Insurance Company of New
York.
"Note" means a Committed Note or a Competitive Bid Note, as appropriate.
----
"Obligations" means all Debt from time to time owing by any of the Related
-----------
Persons to Agent or any Lender under or pursuant to any of the Loan Documents.
"Obligation" means any part of the Obligations.
----------
"Percentage Share" means, with respect to any Lender (a) when used in
----------------
Sections 2.1 or 2.9, in any Notice of Borrowing or when no Committed Loans are
outstanding hereunder, the percentage set forth opposite such Lender's name on
the Schedule 3 attached hereto, and (b) when used otherwise, the percentage
equal to the percentage obtained by dividing (i) the sum of the unpaid principal
balance of such Lender's Committed Loans at the time in question plus the
Matured LC Debt which such Lender has funded pursuant to Section 3.2(b) plus
that portion of the amount which Lenders might be called upon to advance under
all LCs then outstanding that such Lender would be obligated to fund under
Section 3.2(b), by (ii) the aggregate unpaid principal balance of all Committed
Loans at such time plus the aggregate amount of LC Obligations outstanding at
such time.
"Permitted Receivables Purchase Facility" means the sale by Borrower or any
---------------------------------------
of its Subsidiaries of any of their receivables pursuant to a receivables
purchase facility (in this definition "Western Receivables"), including but not
limited to a receivables purchase facility with Bank of America National Trust
and Savings Association, as agent, whereby (i) the aggregate amount of all
purchasers' investments in any and all pools of Western Receivables shall not
exceed seventy-five million dollars ($75,000,000) in the aggregate at any time
outstanding, (ii) any reserves required to be maintained with respect to the
Western Receivables
-12-
in any such pool that constitute eligible receivables after taking into account
concentration limits shall not exceed ten percent (10%) of the aggregate amount
of such purchasers' investments, (iii) recourse is provided for losses based on
historical losses and other bad debt experience and for indemnities and fees,
(iv) the Western Receivables and other rights to payment associated with the
Western Receivables and the proceeds thereof (including, without limitation,
deposit accounts established in connection with the Western Receivables and
agreements, merchandise, books, records, security interests, liens, guarantees
and other collateral support relating to the Western Receivables) shall secure
the obligations of Borrower and its Subsidiaries arising under such receivables
purchase facility and (v) such receivables purchase facility shall be terminable
at the sole discretion of Borrower.
"Person" means an individual, corporation, partnership, limited liability
------
company, association, joint stock company, trust or trustee thereof, estate or
executor thereof, unincorporated organization or joint venture, court or
governmental unit or any agency or subdivision thereof, or any other legally
recognizable entity.
"PGT" means Pinnacle Gas Treating, Inc., a Texas corporation and wholly-
---
owned subsidiary of Borrower.
"Preferred Stock" means all issued and outstanding preferred stock of
----------------
Borrower, as the same may change from time to time, including but not limited to
(i) the 1,400,000 shares of $2.28 Cumulative Preferred Stock of Borrower and
(ii) the 2,760,000 shares of $2.625 Cumulative Convertible Preferred Stock of
Borrower.
"Prime Rate" means the per annum rate of interest established from time to
----------
time by NationsBank as its prime rate, which rate may not be the lowest rate of
interest charged by NationsBank to its customers.
"Prohibited Lien" means any Lien not expressly allowed under Section
---------------
6.2(b).
"▇▇▇▇▇▇ Smackover" means ▇▇▇▇▇▇ Smackover Joint Venture.
----------------
"Regulation D" means Regulation D of the Board of Governors of the Federal
------------
Reserve System as from time to time in effect.
"Related Person" means any of Borrower, each Guarantor, and each other
--------------
Subsidiary of Borrower, with the exception of Williston Gas Company, Westana,
Sandia and ▇▇▇▇▇▇ Smackover.
"Reserve Requirement" means, on any day with respect to each particular
-------------------
Committed Eurodollar Loan, the maximum rate at which reserves (including,
without limitation, any marginal, special, supplemental, or emergency reserves)
are required to be maintained under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency
-13-
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks with respect to (i) any category
of liabilities which includes deposits by reference to which the Fixed Rate is
to be determined, or (ii) any category of extensions of credit or other assets
which include Eurodollar Loans. The Fixed Rate shall be adjusted automatically
on and as of the effective date of any change in the Reserve Requirement.
"Right" has the meaning given it in the definition of "Shareholder Rights
-----
Plan" set forth in Section 1.1.
"Rights Plan Preferred Stock" shall mean preferred stock of Borrower issued
---------------------------
in connection with the exercise of a Right that: (a) is economically comparable
to Borrower's common stock (including dividend rights), (b) contains no
financial or operating covenants; (c) does not require Borrower to make any
sinking fund or similar mandatory prepayments and is not otherwise subject to
redemption at the option of the holder thereof; and (d) is not convertible or
exchangeable into Debt of Borrower.
"Risk Management Policy" means that certain WGR Commodity Price Risk
----------------------
Management Policy of Borrower effective as of January 24, 1997, a true and
correct copy of which is attached hereto as Exhibit O.
"Sandia" means Sandia Energy Resources Joint Venture.
------
"Security Documents" means the instruments listed in the Security Schedule
------------------
and all other security agreements, deeds of trust, mortgages, chattel mortgages,
pledges, guaranties, financing statements, continuation statements, extension
agreements and other agreements or instruments now, heretofore, or hereafter
delivered by any Related Person to Agent in connection with this Agreement or
any transaction contemplated hereby to secure or guarantee the payment of any
part of the Obligations or the performance of any Related Person's other duties
and obligations under the Loan Documents.
"Security Schedule" means Schedule 2 hereto.
-----------------
"Shareholder Rights Plan" means a plan containing terms that are usual and
-----------------------
customary pursuant to which: (i) holders of Borrower's common stock at the time
of adoption of the plan (and any common stock of Borrower issued thereafter)
receive by way of a dividend a right (a "Right") to purchase shares of either
common stock or Rights Plan Preferred Stock of Borrower or shares of common
stock of an acquiring Person, which Rights are not exercisable until a
Triggering Event (as hereinafter defined) occurs: (ii) prior to a Triggering
Event, the Rights may be transferred only as a right attaching to Borrower's
common stock; (iii) the Rights to purchase shares are not exercisable until a
Triggering Event occurs; (iv) the Person or group of Persons that cause the
Triggering Event shall not be permitted to exercise any Rights; and (v) Borrower
may redeem the Rights for nominal consideration under certain conditions which
shall not exceed an aggregate amount of $1,000,000. For purposes of this
definition, the term "Triggering
-14-
Event" means the acquisition by a Person or group of Persons of a certain
percentage (as set forth in the respective Shareholder Rights Plan) of the
shares of common stock of Borrower or the announcement by a Person or group of
Persons of a tender offer or exchange offer for such percentage of the common
stock of Borrower.
"Shareholders' Equity" means the remainder of (i) Borrower's Consolidated
--------------------
assets minus (ii) the sum of (x) Borrower's Consolidated liabilities plus (y)
-----
all treasury stock of Borrower and its Subsidiaries plus (z) all intangible
assets of Borrower and its Subsidiaries (including without limitation all
patents, copyrights, licenses, franchises, goodwill, trade names and trade
secrets); provided that the term "Shareholder's Equity" shall include the book
value of long-term gas contracts with producers that Borrower assumes in
connection with acquisitions that are reflected on the books of Borrower as
assets.
"Stock Option Agreements" means, collectively, those certain Agreements to
-----------------------
Provide Loan(s) to enable certain employees to exercise stock options by and
among Borrower and certain of its key employees.
"Subsidiary" means, with respect to any Person, any corporation,
----------
association, partnership, joint venture, or other business or corporate entity,
enterprise or organization which is directly or effectively through one or more
intermediaries, controlled by or owned fifty-one percent or more by such Person,
provided that associations, joint ventures or other relationships (a) which are
established pursuant to a standard form operating agreement or similar agreement
or which are partnerships for purposes of federal income taxation only, (b)
which are not corporations or partnerships (or subject to the Uniform
Partnership Act) under applicable state law, and (c) whose businesses are
limited to the exploration, development and operation of oil, gas, mineral, gas
gathering or gas processing properties and interests owned directly by the
parties in such associations, joint ventures or relationships, shall not be
deemed to be "Subsidiaries" of such Person.
"Term Loan Agreement" means that certain Third Restated Loan Agreement
-------------------
(Term) dated as of August 31, 1993, among Borrower, Agent and the lenders party
thereto, as supplemented, amended or restated from time to time.
"Termination Event" means (a) the occurrence with respect to any ERISA Plan
-----------------
of (i) a reportable event described in Sections 4043(b)(5) or (6) of ERISA or
(ii) any other reportable event described in Section 4043(b) of ERISA other than
a reportable event not subject to the provision for 30-day notice to the Pension
Benefit Guaranty Corporation pursuant to a waiver by such corporation under
Section 4043(a) of ERISA, or (b) the withdrawal of any Related Person or of any
Affiliate of any Related Person from an ERISA Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(c) the filing of a notice of intent to terminate any ERISA Plan or the
treatment of any ERISA Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate any ERISA Plan by the
Pension Benefit Guaranty Corporation under Section 4042 of ERISA, or
-15-
(e) any other event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any ERISA Plan.
"Type" means, with respect to any Committed Loan, the characterization of
----
such Committed Loan as either a Committed Base Rate Loan or Committed Eurodollar
Loan.
"Voting Shares" means at the time in question, the sum of (a) all
-------------
outstanding shares of common stock of Borrower, (b) all other securities issued
by Borrower which entitle the holder thereof to voting rights with respect to
Borrower at such time (as used in this definition, the shares described in the
immediately preceding clauses (a) and (b) are collectively called ("Shares")),
and (c) the amount of additional Shares (not including any share or security
included in the preceding clauses (a) and (b)) which may be obtained by
converting outstanding shares of capital stock of Borrower or rights under other
outstanding instruments into Shares.
"Westana" means the general partnership formed between WGRO and Panhandle
-------
Gathering Company, a wholly-owned subsidiary of PanEnergy Corp.
"WGRC" means WGR Canada, Inc., a New Brunswick corporation and wholly-owned
----
subsidiary of Borrower.
"WGRO" means Western Gas Resources - Oklahoma, Inc., a Delaware corporation
----
and wholly-owned subsidiary of Borrower.
"WGRS" means Western Gas Resources Storage, Inc., a Texas corporation and
----
wholly-owned subsidiary of Borrower.
"WGRT" means Western Gas Resources Texas, Inc., a Texas corporation and
----
wholly-owned subsidiary of Borrower.
"WPS" means Western Power Services, Inc., a Delaware corporation and
---
wholly-owned subsidiary of Borrower.
"Williston Gas Company" means the joint venture formed pursuant to that
---------------------
certain Amended and Restated Joint Venture Agreement dated August 1, 1990
between Borrower (as successor in interest) and Enron Gas Processing, as amended
to the date hereof.
Section 1.2. Exhibits and Schedules; Additional Definitions. All Exhibits
----------------------------------------------
and Schedules attached to this Agreement are a part hereof for all purposes.
Reference is hereby made to the Security Schedule for the meaning of certain
terms defined therein and used but not defined herein, which definitions are
incorporated herein by reference.
Section 1.3. Amendment of Defined Instruments. Unless the context
--------------------------------
otherwise requires or unless otherwise provided herein the terms defined in this
Agreement which refer to a particular agreement, instrument or document also
refer to and include all renewals, extensions,
-16-
modifications, amendments and restatements of such agreement, instrument or
document, provided that nothing contained in this section shall be construed to
authorize any such renewal, extension, modification, amendment or restatement.
Section 1.4. References and Titles. All references in this Agreement to
---------------------
Exhibits, Schedules, articles, sections, subsections and other subdivisions
refer to the Exhibits, Schedules, articles, sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any subdivisions are for convenience only and do
not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this
Agreement", "this instrument", "herein", "hereof", "hereby", "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. The phrases "this section"
and "this subsection" and similar phrases refer only to the sections or
subsections hereof in which such phrases occur. The word "or" is not exclusive,
and the word "including" (in its various forms) means "including without
limitation". Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.
Section 1.5. Calculations and Determinations. All calculations under the
-------------------------------
Loan Documents with respect to the Federal Funds Rate, Fixed Rate Portions or
the interest chargeable with respect thereto shall be made on the basis of
actual days elapsed (including the first day but excluding the last) and a year
of 360 days. All calculations under the Loan Documents which are unrelated to
the Federal Funds Rate, Committed Eurodollar Loans and the interest chargeable
with respect thereto shall be made on the basis of actual days elapsed
(including the first day but excluding the last) and a year of 365 or 366 days,
as appropriate. Each determination by Agent or a Lender as to any Eurodollar
Rate, Fixed Rate, Business Day, Interest Period, Reserve Requirement or similar
matters shall be conclusive and binding for all purposes, provided that such
determinations and allocations are made on a reasonable basis. Unless otherwise
expressly provided herein or unless Majority Lenders otherwise consent all
financial statements and reports furnished to Agent or any Lender hereunder
shall be prepared and all financial computations and determinations pursuant
hereto shall be made in accordance with GAAP (except for financial projections).
ARTICLE II. - The Loans
---------
Section 2.1. Committed Loans. Subject to the terms and conditions hereof,
---------------
Lenders agree to make loans to Borrower (herein called such Lender's "Committed
Loans") from time to time during the Commitment Period so long as (i) all
Lenders are requested to make Committed Loans of the same Type in accordance
with their respective Percentage Shares and as part of the same Borrowing, and
(ii) the sum of (a) the aggregate amount of all Loans outstanding plus (b) the
LC Obligations outstanding does not exceed the Commitment at any time. The
aggregate amount of all Committed Loans in any Borrowing must be greater than or
equal to $250,000 and must be an integral multiple of $250,000 for requests of
$1,000,000 or less and an integral
-17-
multiple of $100,000 for requests over $1,000,000 or must equal the unadvanced
portion of the Commitment. In addition to the foregoing, upon the making of each
payment by the Issuing Bank pursuant to any LC, Borrower shall be deemed to have
requested each Lender to, and such Lender shall, make a Committed Loan in the
amount of such Lender's Percentage Share of Borrower's consequent reimbursement
obligation and apply the proceeds thereof to the payment of such reimbursement
obligation. When any Matured LC Debt is repaid with proceeds of a Borrowing,
such Matured LC Debt so repaid shall be extinguished and such Borrowing shall be
governed by the terms of this Agreement applicable to all other Borrowings. Any
such Borrowings are Borrowings of Committed Base Loans unless otherwise
designated by Borrower in compliance with the notice requirements set forth in
Section 2.2. The obligation of Borrower to repay to each Lender the aggregate
amount of all Committed Loans made by such Lender, together with interest
accruing in connection therewith, shall be evidenced by a single promissory note
made by Borrower payable to the order of such Lender (herein called such
Lender's "Committed Note") in the form of Exhibit A with appropriate insertions.
The amount of principal owing on any Lender's Committed Note at any given time
shall be the aggregate amount of all Committed Loans theretofore by such Lender
made minus all payments of principal theretofore received by such Lender on its
Committed Note. Principal paid or prepaid on the Committed Notes may, subject to
the terms and conditions hereof, be reborrowed during the Commitment Period.
Interest on each Committed Note shall accrue and be payable as provided herein
and therein.
Section 2.2. Requests for New Loans. Borrower must give to Agent a
----------------------
Borrowing Notice for any requested Borrowing of new Committed Loans to be
advanced by Lenders (i) by telephone (which telephonic notice shall be confirmed
in writing by Agent) or (ii) if Agent so requests, in writing. Each Borrowing
Notice must:
(a) specify (i) the aggregate amount of any such Borrowing of new
Committed Base Rate Loans and the date on which such Committed Base Rate
Loans are to be advanced, or (ii) the aggregate amount of any such
Borrowing of new Committed Eurodollar Loans, the date on which such
Committed Eurodollar Loans are to be advanced (which shall be the first day
of the Interest Period which is to apply thereto), and the length of the
applicable Interest Period, or (iii) if such new Committed Eurodollar Loans
are to be combined with existing Committed Loans in a new Borrowing, the
foregoing information with respect to such combined Borrowing; and
(b) be received by Agent not later than 10:00 a.m., Dallas, Texas
time, on (i) the day on which any such Committed Base Rate Loans are to be
made, or (ii) if Committed Eurodollar Loans are to be made, the third
Business Day preceding the day on which such Committed Eurodollar Loans are
to be made.
Each telephonic Borrowing Notice shall be deemed a representation, warranty,
acknowledgment and agreement by Borrower as to the matters which are required to
be set out in a written Borrowing Notice. Upon receipt of any Borrowing Notice,
Agent shall give each Lender prompt notice of the terms thereof. If all
conditions precedent to such new Committed Loans have been
-18-
met, each Lender will on the date requested promptly remit to Agent at Agent's
office in Dallas, Texas the amount of such Lender's new Committed Loan in
immediately available funds, and upon receipt of such funds, unless to its
actual knowledge any conditions precedent to such Committed Loans have been
neither met nor waived as provided herein, Agent shall promptly make such
Committed Loans available to Borrower. Unless Agent shall have received prompt
notice from a Lender that such Lender will not make available to Agent such
Lender's new Committed Loan, Agent may in its discretion assume that such Lender
has made such Committed Loan available to Agent in accordance with this section
and Agent may if it chooses, in reliance upon such assumption, make such
Committed Loan available to Borrower. If and to the extent such Lender shall not
so make its new Committed Loan available to Agent, such Lender and Borrower
severally agree to pay or repay to Agent within three days after demand the
amount of such Loan together with interest thereon, for each day from the date
such amount was made available to Borrower until the date such amount is paid or
repaid to Agent, with interest at (i) the Federal Funds Rate, if such Lender is
making such payment and (ii) the interest rate applicable at the time to the
other new Loans made on such date, if Borrower is making such repayment. If
neither such Lender nor Borrower pay or repay to Agent such amount within such
three-day period, Agent shall in addition to such amount be entitled to recover
from such Lender and from Borrower, on demand, interest thereon at the Late
Payment Rate, calculated from the date such amount was made available to
Borrower. The failure of any Lender to make any new Committed Loan to be made by
it hereunder shall not relieve any other Lender of its obligation hereunder, if
any, to make its new Committed Loan, but no Lender shall be responsible for the
failure of any other Lender to make any new Committed Loan to be made by such
other Lender.
Section 2.3. Continuations and Conversions of Existing Loans. Borrower
-----------------------------------------------
may make the following elections with respect to Committed Loans already
outstanding: to Convert Committed Base Rate Loans to Committed Eurodollar Loans,
to Convert Committed Eurodollar Loans to Committed Base Rate Loans on the last
day of the Interest Period applicable thereto, to continue Committed Eurodollar
Loans beyond the expiration of such Interest Period by designating a new
Interest Period to take effect at the time of such expiration. In making such
elections, Borrower may combine existing Committed Loans made pursuant to
separate Borrowings into one new Borrowing or divide existing Committed Loans
made pursuant to one Borrowing into separate new Borrowings or combine existing
Committed Loans with new Committed Loans. To make any such election, Borrower
must give to Agent a Continuation/Conversion Notice for any such conversion or
continuation of existing Committed Loans, with a separate notice given for each
new Borrowing (i) by telephone (which telephonic notice shall be confirmed in
writing by Agent) or (ii) if Agent so requests, in writing. Each such
Continuation/Conversion Notice must:
(a) specify the existing Committed Loans which are to be Continued or
Converted, and if such existing Committed Loans are to be combined with new
Committed Loans, specify such new Committed Loans;
(b) specify (i) the aggregate amount of any Borrowing of Committed
Base Rate Loans into which such existing Committed Loans are to be
continued or converted and the date on which such Continuation or
Conversion is to occur, or (ii) the aggregate
-19-
amount of any Borrowing of Committed Eurodollar Loans into which such
existing Committed Loans are to be continued, converted or combined, the
date on which such Continuation, Conversion or combination is to occur
(which shall be the first day of the Interest Period which is to apply to
such Committed Eurodollar Loans), and the length of the applicable Interest
Period; and
(c) be received by Agent not later than 10:00 a.m., Dallas, Texas
time, on (i) the day on which any such continuation or conversion to
Committed Base Rate Loans is to occur, or (ii) the third Business Day
preceding the day on which any such Continuation or Conversion to Committed
Eurodollar Loans is to occur.
Each telephonic Continuation/Conversion Notice shall be deemed a representation,
warranty, acknowledgment and agreement by Borrower as to the matters which are
required to be set out in the written Continuation/Conversion Notice. Upon
receipt of any Continuation/Conversion Notice, Agent shall give each Lender
prompt notice of the terms thereof. Each Continuation/Conversion Notice shall
be irrevocable and binding on Borrower. During the continuance of any Default,
Borrower may not make any election to convert existing Committed Loans into
Committed Eurodollar Loans or continue existing Committed Loans as Committed
Eurodollar Loans. If (due to the existence of a Default or for any other
reason) Borrower fails to timely and properly give any notice of continuation or
conversion with respect to a Borrowing of existing Committed Eurodollar Loans at
least three days prior to the end of the Interest Period applicable thereto,
such Committed Eurodollar Loans shall automatically be converted into Committed
Base Rate Loans at the end of such Interest Period. No new funds shall be
repaid by Borrower or advanced by any Lender in connection with any continuation
or conversion of existing Loans pursuant to this section, and no such
continuation or conversion shall be deemed to be a new advance of funds for any
purpose; such continuations and conversions merely constitute a change in the
interest rate applicable to already outstanding Committed Loans.
Section 2.4. Competitive Bid Loans. (a) Borrower may request that each
---------------------
Lender submit Competitive Bids (on a several basis) to Borrower on any Business
Day during the Commitment Period, provided that all Lenders are requested to
make a Competitive Bid on the same basis at the same time. In order to request
Competitive Bids, Borrower shall deliver by hand or telecopy to Agent a
Competitive Bid Request, to be received by Agent not later than 9:00 a.m.,
Dallas time one Business Day before the date specified for a proposed
Competitive Bid Loan. A Competitive Bid Request that does not conform
substantially to the format of Exhibit I may be rejected in Agent's sole
discretion, and Agent shall promptly notify Borrower of such rejection by
telecopier. After receiving an acceptable Competitive Bid Request, Agent shall
no later than 12:00 noon, Dallas time on the date such Competitive Bid Request
is received by Agent, by telecopier deliver to Lenders an Invitation to Bid
substantially in the form of Exhibit J with respect thereto.
(b) Each Lender may, in its sole discretion, make one or more Competitive
Bids to Agent responsive to each Competitive Bid Request given by Borrower.
Each Competitive Bid by a Lender must be received by Agent by telecopier not
later than 9:00 a.m., Dallas time on the
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date specified for a proposed Competitive Bid Loan. Multiple bids may be
accepted by Agent. Competitive Bids that do not conform substantially to the
format of Exhibit K may be rejected by Agent after conferring with, and upon the
instruction of, Borrower, and Agent shall notify the bidding Lender of such
rejection as soon as practicable. If any Lender shall elect not to make a
Competitive Bid, such Lender shall so notify Agent by telecopier not later than
9:00 a.m., Dallas time, on the date specified for a Competitive Bid Loan;
provided, however, that failure by any Lender to give such notice shall not
cause such Lender to be obligated to make any Competitive Bid Loan. A
Competitive Bid submitted by a Lender shall be irrevocable.
(c) Promptly, and in no event later than 9:30 a.m., Dallas time, on the
date specified for a proposed Competitive Bid Loan, Agent shall notify Borrower
by telecopier of all the Competitive Bids made, the Competitive Bid Rate and the
principal amount of each Competitive Bid Loan in respect of which a Competitive
Bid was made, and the identity of each Lender that made each Competitive Bid.
Agent shall send a copy of all Competitive Bids to Borrower for its records as
soon as practicable after completion of the bidding process.
(d) Borrower may, subject only to the provisions hereof, accept or reject
any Competitive Bid. Borrower shall notify Agent by telecopier pursuant to a
Competitive Bid Accept/Reject Letter whether and to what extent Borrower has
decided to accept or reject any or all of the Competitive Bids, not later than
10:30 a.m., Dallas time, on the date specified for a proposed Competitive Bid
Loan; provided, however, that:
(i) the failure by Borrower to accept or reject any Competitive Bid
within the time period specified herein shall be deemed to be a rejection
of such Competitive Bid,
(ii) the aggregate amount of the Competitive Bids accepted by
Borrower shall not exceed the principal amount specified in the Competitive
Bid Request,
(iii) the aggregate amount of all Lenders' Competitive Bid Loans
outstanding at any time shall not exceed $100,000,000 and the aggregate
amount of all Loans outstanding shall not exceed the Commitment,
(iv) if Borrower shall accept a Competitive Bid or Competitive Bids
made at a particular Competitive Bid Rate, but the amount of such
Competitive Bid or Competitive Bids shall cause the total amount of
Competitive Bids to be accepted by Borrower to exceed the amount specified
in the Competitive Bid Request, then Borrower shall accept a portion of
such Competitive Bid or Competitive Bids in an amount equal to the amount
specified in the Competitive Bid Request less the amount of all other
Competitive Bids accepted with respect to such Competitive Bid Request,
which acceptance, in the case of multiple Competitive Bids at such
Competitive Bid Rate, shall be made pro rata in accordance with the amount
of each such Competitive Bid at such Competitive Bid Rate, and
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(v) no Competitive Bid shall be accepted for a Competitive Bid Loan
unless such Competitive Bid Loan is in a minimum principal amount of
$1,000,000 and an integral multiple of $500,000 and is part of a
Competitive Bid Loan in a minimum principal amount of $5,000,000; provided
further, however, that if a Competitive Bid Loan must be in an amount less
than $1,000,000 because of the provisions of clause (v) above, such
Competitive Bid Loan may be for a minimum of $500,000 or any integral
multiple thereof, and in calculating the pro rata allocation of acceptances
or portions of multiple bids at a particular Competitive Bid Rate pursuant
to clause (v), the amounts shall be rounded to integral multiples of
$500,000 in a manner which shall be in the sole and absolute discretion of
Borrower.
(e) Promptly on each date Borrower accepts a Competitive Bid, Agent shall
notify each Lender whether or not its Competitive Bid has been accepted (and if
so, in what amount and at what Competitive Bid Rate) by telecopier transmission
sent by Agent, and each successful bidder will thereupon become bound, subject
to the other applicable conditions hereof, to make the Competitive Bid Loan in
respect of which its Competitive Bid has been accepted. After completing the
notifications referred to in the immediately preceding sentence, Agent shall
notify each Lender of the aggregate principal amount of all Competitive Bids
accepted. Each Lender which is to make a Competitive Bid Loan shall, before
11:00 a.m., Dallas time, on the borrowing date specified in the Competitive Bid
Request applicable thereto, make available to Agent in immediately available
funds the amount of each Competitive Bid Loan to be made by such Lender, and
Agent shall promptly deposit such funds to an account designated by Borrower.
As soon as practicable thereafter, Agent shall notify each Lender of the
aggregate amount of Competitive Bid Loans advanced, the respective Competitive
Bid Interest Periods thereof and Competitive Bid Rate applicable thereto.
(f) The obligation of Borrower to repay to each Lender the aggregate amount
of all Competitive Bid Loans made by such Lender, together with interest
accruing in connection therewith, shall be evidenced by promissory notes
(respectively, such Lender's "Competitive Bid Note") made by Borrower payable to
--------------------
the order of such Lender in the form of Exhibit M, with appropriate insertions.
The amount of principal owing on any Lender's Competitive Bid Note at any given
time shall be the aggregate amount of all Competitive Bid Loans theretofore made
by such Lender thereunder minus all payments of principal theretofore received
by such Lender thereon. Interest on each Competitive Bid Note shall accrue and
be due and payable as provided herein and therein. Borrower shall repay on the
final day of the Competitive Bid Interest Period of each Competitive Bid Loan
(such date being that specified by Borrower for repayment of such Competitive
Bid Loan in the related Competitive Bid Request and such date being no later
than six months after the date of the Competitive Bid Loan) the then unpaid
principal amount of such Competitive Bid Loan. Subject to Section 2.6 and the
payment of amounts described in Section 2.14, Borrower shall have the right to
prepay any principal amount of any Competitive Bid Loan.
(g) No Competitive Bid Loan shall be made within five Business Days after
the date of any other Competitive Bid Loan, unless Borrower and Agent shall
mutually agree otherwise. If Agent shall at any time elect to submit a
Competitive Bid in its capacity as a Lender, it shall
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submit such bid directly to Borrower requesting such Competitive Bid one quarter
of an hour earlier than the latest time at which the other Lenders are required
to submit their bids to Agent.
Section 2.5. Use of Proceeds. Borrower shall use all funds from the
---------------
initial Borrowings under the Loans to repay in full all existing outstanding
indebtedness owing under the Existing Agreement. Borrower shall use all funds
from subsequent Borrowings to make capital expenditures and provide working
capital for its operations, to meet its reimbursement obligations under LCs, and
for other general business purposes. In no event shall any LC or any Borrowing
be used directly or indirectly for the purpose, whether immediate, incidental or
ultimate, of purchasing, acquiring or carrying any "margin stock" or any "margin
securities" (as such terms are defined respectively in Regulation U and
Regulation G promulgated by the Board of Governors of the Federal Reserve
System) or to extend credit to others directly or indirectly for the purpose of
purchasing or carrying any such margin stock or margin securities. Borrower
represents and warrants to Lenders that it is not engaged principally, or as one
of its important activities, in the business of extending credit to others for
the purpose of purchasing or carrying such margin stock or margin securities.
Section 2.6. Optional Prepayments.
--------------------
(a) Subject to the provisions of this Section 2.6, Borrower may from time
to time prepay the Notes, including Competitive Bid Notes, in whole or in part,
so long as (A) Borrower so notifies Agent by 10:00 a.m. Dallas, Texas time on
the date such prepayment is to be made, which date must be a Business Day, and
(B) the aggregate amount of all partial prepayments of principal concurrently
paid on any category of Notes is greater than or equal to $250,000 and is an
integral multiple of $250,000 for prepayments of $1,000,000 or less and an
integral multiple of $100,000 for prepayments over $1,000,000, provided that any
prepayment of any Committed Eurodollar Loan or Competitive Bid Loan shall be
accompanied by all reimbursement amounts payable pursuant to Section 2.14.
Unless otherwise designated by Borrower, any prepayment of Competitive Bid Loans
shall be applied to the outstanding Competitive Bid Loans in order of shortest
maturity. Agent shall give each Lender prompt notice of any notice of
prepayment it receives from Borrower.
(b) Each prepayment of principal under this Section 2.6, shall be
accompanied by all interest accrued at the interest rate applicable to the
principal amount being prepaid through the date of such prepayment and unpaid on
such Notes. Each principal payment of a Committed Loan made under this Section
2.6 shall be apportioned and applied to each Lender's Committed Note in
accordance with such Lender's Percentage Share of such payment. Any principal
or interest prepaid pursuant to this Section 2.6 shall be in addition to, and
not in lieu of, all payments otherwise required to be paid under the Loan
Documents at the time of such prepayment.
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Section 2.7. Mandatory Prepayments.
---------------------
(a) Loans. If the sum of (i) the aggregate unpaid principal balance of the
-----
Loans, and (ii) the LC Obligations outstanding ever exceeds the Commitment,
Borrower shall, within ten Business Days after Agent on behalf of Majority
Lenders gives written notice of such fact to Borrower, make a prepayment to
Agent for distribution to Lenders in the amount of such excess. Any such payment
under this Section 2.7(a) shall be applied pro rata in accordance with each
Lender's Percentage Share to the unpaid principal balances of its Committed
Loan.
(b) Prepayments. Each prepayment of principal on a Note made under this
-----------
Section 2.7 shall be accompanied by all interest then accrued at the interest
rate applicable to the principal amount being prepaid and unpaid on such Note;
provided that any prepayment under a Note must be accompanied by any amounts due
under Section 2.14 as a result of such prepayments.
Section 2.8. Payments to Lenders. Borrower will make each payment which
-------------------
it owes under the Loan Documents (whether under any of Sections 2.6, 2.7, 3.2,
or otherwise) to Agent for the account of Lender to whom such payment is owed
not later than noon, Dallas time, in lawful money of the United States of
America and in immediately available funds. Any payment received by Agent after
such time will be deemed to have been made on the next following Business Day.
Should any such payment become due and payable on a day other than a Business
Day, the maturity of such payment shall be extended to the next succeeding
Business Day, and, in the case of a payment of principal or past due interest,
interest shall accrue and be payable thereon for the period of such extension as
provided in the Loan Document under which such payment is due. Each payment
under a Loan Document shall be payable at the place provided therein and, if no
specific place of payment is provided, shall be payable at the place of payment
of the Notes. When Agent collects or receives money on account of the
Obligations, Agent shall distribute all money so collected or received, and
Agent and Lenders shall apply all such money so distributed, as follows:
(a) first, for the payment of all Obligations other than Swap
Obligations (as defined below) which are then due, and if such money is
insufficient to pay all such Obligations, first to any reimbursements due
Agent or any Lender under Section 6.1(i) or 9.11 and then to the partial
payment of all other Obligations then due in proportion to the amounts
thereof, or as Lenders shall otherwise agree;
(b) then for the prepayment of amounts owing under the Loan Documents
(other than Swap Obligations and principal on the Notes) if so specified by
Borrower;
(c) then for the prepayment of principal on the Notes, together with
accrued and unpaid interest on the principal so prepaid; and
(d) last, for the payment or prepayment of any other Obligations.
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All payments applied to principal or interest on any Note shall be applied first
to any interest then due and payable, then to principal then due and payable,
and last to any prepayment of principal and interest in compliance with Sections
2.6 and 2.7. All distributions of amounts described in any of subsections (b),
(c) or (d) above shall be made by Agent pro rata to Agent and each Lender then
owed Obligations described in such subsection in proportion to all amounts owed
to all Lenders which are described in such subsection. As used in this Section
2.8, the term "Swap Obligations" means the Obligations described in clause (ii)
of Section 2(a) of each Guaranty described in the Security Schedule.
Section 2.9. Facility Fees. In consideration of Lenders' commitment to
-------------
enter into this Agreement and to advance funds to Borrower hereunder, Borrower
will pay to Agent, for pro rata distribution to each Lender in accordance with
its Percentage Share, a facility fee determined on a daily basis by multiplying
the amount of $300,000,000 by a rate of
(a) for each day on which the Debt to Capitalization Ratio in effect
pursuant to Section 2.17 is less than 0.35 to 1.0, .125% per annum,
(b) for each day on which the Debt to Capitalization Ratio in effect
pursuant to Section 2.17 is equal to or greater than 0.35 to 1.0 but less than
.45 to 1.0, .15% per annum
(c) for each day on which the Debt to Capitalization Ratio in effect
pursuant to Section 2.17 is equal to or greater than .45 to 1.0, but is less
than or equal to .50 to 1.0, .175% per annum, or
(d) for each day on which the Debt to Capitalization Ratio in effect
pursuant to Section 2.17 is greater than .50 to 1.0, .25% per annum.
Promptly at the end of each Fiscal Quarter Agent shall calculate the facility
fee then due and shall notify Borrower thereof. Borrower shall pay such
facility fee to Agent within five Business Days after receiving such notice.
Section 2.10. Increased Cost and Reduced Return.
---------------------------------
(a) If, after the date hereof, the adoption of any applicable law, rule,
or regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such governmental authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office) to
any tax, duty, or other charge with respect to any Committed Eurodollar
Loans or Competitive Bid Loans, its Notes, or its obligation to make
Committed Eurodollar Loans, or change the basis of taxation of any amounts
payable to such Lender (or its Applicable Lending
-25-
Office) under this Agreement or its Notes in respect of any Committed
Eurodollar Loans or Competitive Bid Loans (other than taxes imposed on the
overall net income of such Lender by the jurisdiction in which such Lender
has its principal office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the Reserve
Requirement utilized in the determination of the Fixed Rate) relating to
any extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Lender (or its Applicable Lending
Office), including the Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending Office)
or the London interbank market any other condition affecting this Agreement
or its Notes or any of such extensions of credit or liabilities or
commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Committed Eurodollar Loans or Competitive Bid Loans or to reduce
any sum received or receivable by such Lender (or its Applicable Lending Office)
under this Agreement or its Notes with respect to any Committed Eurodollar Loans
or Competitive Bid Loans, then Borrower shall pay to such Lender on demand such
amount or amounts as will compensate such Lender for such increased cost or
reduction. If any Lender requests compensation by Borrower under this Section
2.10(a), Borrower may, by notice to such Lender (with a copy to Agent), suspend
the obligation of such Lender to make or Continue Loans of the Type with respect
to which such compensation is requested, or to Convert Loans of any other Type
into Loans of such Type, until the event or condition giving rise to such
request ceases to be in effect (in which case the provisions of Section 2.13
shall be applicable); provided that such suspension shall not affect the right
--------
of such Lender to receive the compensation so requested.
(b) If, after the date hereof, any Lender shall have determined that the
adoption of any applicable law, rule, or regulation regarding capital adequacy
or any change therein or in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank, or comparable agency, has or would have
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.
(c) Each Lender shall promptly notify Borrower and Agent of any event of
which it has knowledge, occurring after the date hereof, which will entitle such
Lender to compensation
-26-
pursuant to this Section and will designate a different Applicable Lending
Office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to it. Any Lender claiming compensation under this Section shall
furnish to Borrower and Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
Section 2.11. Limitation on Types of Loans. If on or prior to the first
----------------------------
day of any Interest Period for any Committed Eurodollar Loan:
(a) Agent determines (which determination shall be conclusive) that by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such Interest
Period; or
(b) the Majority Lenders determine (which determination shall be
conclusive) and notify Agent that the Fixed Rate will not adequately and fairly
reflect the cost to Lenders of funding Committed Eurodollar Loans for such
Interest Period;
then Agent shall give Borrower prompt notice thereof specifying the relevant
Type of Loans and the relevant amounts or periods, and so long as such condition
remains in effect, Lenders shall be under no obligation to make additional Loans
of such Type, Continue Loans of such Type, or to Convert Loans of any other Type
into Loans of such Type and Borrower shall, on the last day(s) of the then
current Interest Period(s) for the outstanding Loans of the affected Type,
either prepay such Loans or Convert such Loans into another Type of Loan in
accordance with the terms of this Agreement.
Section 2.12. Illegality. Notwithstanding any other provision of this
----------
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Committed Eurodollar Loans
hereunder, then such Lender shall promptly notify Borrower thereof and such
Lender's obligation to make or Continue Eurodollar Loans and to Convert other
Types of Loans into Eurodollar Loans shall be suspended until such time as such
Lender may again make, maintain, and fund Eurodollar Loans (in which case the
provisions of Section 2.13 shall be applicable).
Section 2.13. Treatment of Affected Loans. If the obligation of any
---------------------------
Lender to make a particular Type of Committed Eurodollar Loan or to Continue, or
to Convert Loans of any other Type into, Loans of a particular Type shall be
suspended pursuant to Section 2.10 or 2.12 hereof (Loans of such Type being
herein called "Affected Loans" and such Type being herein called the "Affected
-------------- --------
Type"), such Lender's Affected Loans shall be automatically Converted into Base
----
Rate Loans on the last day(s) of the then current Interest Period(s) for
Affected Loans (or, in the case of a Conversion required by Section 2.12 hereof,
on such earlier date as such Lender may specify to Borrower with a copy to
Agent) and, unless and until such Lender gives notice as provided
-27-
below that the circumstances specified in Section 2.10 or 2.12 hereof that gave
rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been so
Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender's Affected Loans shall be applied instead to its Base
Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such Lender as
Loans of the Affected Type shall be made or Continued instead as Base Rate
Loans, and all Loans of such Lender that would otherwise be Converted into Loans
of the Affected Type shall be Converted instead into (or shall remain as) Base
Rate Loans.
If such Lender gives notice to Borrower (with a copy to Agent) that the
circumstances specified in Section 2.10 or 2.12 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 2.13 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Commitments.
Section 2.14. Compensation. Upon the request of any Lender, Borrower
------------
shall pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Committed Eurodollar Loan
for any reason (including, without limitation, the acceleration of the Loans
pursuant to Section 8.1) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by Borrower for any reason (including, without limitation,
the failure of any condition precedent specified in Article IV to be satisfied)
to borrow, Convert, Continue, or prepay a Committed Eurodollar Loan on the date
for such borrowing, Conversion, Continuation, or prepayment specified in the
relevant notice of borrowing, prepayment, Continuation, or Conversion under this
Agreement.
Section 2.15. Taxes. (a) Any and all payments by Borrower to or for the
-----
account of any Lender or Agent hereunder or under any other Loan Document shall
be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each Lender and
---------
Agent, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Lender (or its Applicable Lending
Office) or Agent (as the case may be) is organized or any political subdivision
thereof (all such non-excluded taxes,
-28-
duties, levies, imposts, deductions, charges, withholdings, and liabilities
being hereinafter referred to as "Taxes"). If Borrower shall be required by law
-----
to deduct any Taxes from or in respect of any sum payable under this Agreement
or any other Loan Document to any Lender or Agent, (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.15) such
Lender or Agent receives an amount equal to the sum it would have received had
no such deductions been made, (ii) Borrower shall make such deductions, and
(iii) Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, Borrower agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under this Agreement or any
other Loan Document or from the execution or delivery of, or otherwise with
respect to, this Agreement or any other Loan Document (hereinafter referred to
as "Other Taxes").
-----------
(c) Borrower agrees to indemnify each Lender and Agent for the full amount
of Taxes and Other Taxes (including, without limitation, any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this
Section 2.15) paid by such Lender or Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by Borrower or
Agent (but only so long as such Lender remains lawfully able to do so), shall
provide Borrower and Agent with (i) Internal Revenue Service Form 1001 or 4224,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States, (ii) Internal Revenue Service Form W-8 or W-9,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, and (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and 881(c) of
the Internal Revenue Code), certifying that such Lender is entitled to an
exemption from or a reduced rate of tax on payments pursuant to this Agreement
or any of the other Loan Documents.
(e) For any period with respect to which a Lender has failed to provide
Borrower and Agent with the appropriate form pursuant to Section 2.15(d) (unless
such failure is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 2.15(a) or
2.15(b) with respect to Taxes imposed by the United States; provided, however,
-------- -------
that
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should a Lender, which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Taxes because of its failure to deliver a
form required hereunder, Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes.
(f) If Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 2.15, then such Lender will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender and in the event Lender is reimbursed
for an amount paid by Borrower pursuant to this Section 2.15, it shall promptly
return such amount to Borrower.
(g) Within thirty (30) days after the date of any payment of Taxes,
Borrower shall furnish to Agent the original or a certified copy of a receipt
evidencing such payment.
(h) Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements and obligations of Borrower contained in this Section
2.15 shall survive the termination of the Commitments and the payment in full of
the Notes.
Section 2.16. Compensation Procedure. Any Lender or Issuing Bank
----------------------
notifying Borrower of the incurrence of additional costs under Sections 2.10
through 2.15 shall in such notice to Borrower and Agent set forth in reasonable
detail the basis and amount of its request for compensation; provided that if
such Lender or Issuing Bank fails to give notice to Borrower of any additional
costs within ninety (90) days after it has actual knowledge thereof, neither
such Lender nor Issuing Bank shall be entitled to compensation for such
additional costs incurred more than ninety (90) days prior to the date on which
notice is given by such Lender or Issuing Bank. Determinations and allocations
by each Lender or Issuing Bank for purposes of Sections 2.10 through 2.15 of the
effect of any change in applicable laws, treaties, rules or regulations or in
the interpretation or administration thereof, any losses or expenses incurred by
reason of the liquidation or reemployment of deposits or other funds, any taxes,
levies, costs and charges imposed, or the effect of capital maintained on its
costs or rate of return of maintaining Loans or its obligation to make Loans or
issue LCs, or on amounts receivable by it in respect of Loans or LCs, and of the
amounts required to compensate such Lender under Sections 2.10 through 2.15,
shall be conclusive and binding for all purposes, provided that such
determinations and allocations are made on a reasonable basis and there shall be
no demand for duplicate payments of the same additional cost. Any request for
compensation under this Section 2.16 shall be paid by Borrower within thirty
(30) Business Days of the receipt by Borrower of the notice described in this
Section 2.16.
Section 2.17. Interest Rate Changes.
---------------------
(a) Initial Debt to Capitalization Ratio. The Debt to Capitalization
------------------------------------
Ratio in effect from the date hereof until changed as herein provided is 0.46
to 1.0.
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(b) Decreases In Rates. Any reduction in the Base Rate, the Fixed Rate or
------------------
the rate being used to determine facility fees pursuant to Section 2.9 (in this
section collectively called the "Rates") as a result of a change in the Debt to
Capitalization Ratio shall be requested by Borrower in a certificate delivered
to Agent in which Borrower certifies as to the Debt to Capitalization Ratio in
effect on the date thereof. Together with any such certificate, Borrower shall
deliver to Agent true and correct financial statements of Borrower, in form and
substance satisfactory to Agent, supporting Borrower's calculation of such Debt
to Capitalization Ratio. If Agent determines Borrower's calculation is correct,
the reduction in the Rates shall become effective on the fifth Business Day
following the date on which such notice is given to Agent or Lenders otherwise
become aware of such a change in the Debt to Capitalization Ratio; provided that
with respect to Committed Eurodollar Loans, such decrease shall apply only to
Committed Eurodollar Loans continued or converted after such effective date.
(c) Increases In Rates. With respect to any increase in the Rates,
------------------
Borrower must notify Agent of any change in the Rates as a result of a change in
the Debt to Capitalization Ratio. Any such increase in the Rates shall become
effective on the fifth Business Day following the date on which such notice is
given to Agent or Lenders otherwise become aware of such a change in the Debt to
Capitalization Ratio; provided that with respect to Committed Eurodollar Loans,
such increase shall apply only to Committed Eurodollar Loans made, continued or
converted after such effective date.
ARTICLE III. - Letters of Credit
-----------------
Section 3.1. LCs. From time to time during the Commitment Period,
---
Borrower may request Issuing Bank to issue, in reliance on the agreements of
Lenders set forth in Section 3.2(b), letters of credit (each herein called an
"LC") by means of an application in the form of Exhibit C, appropriately
completed and with a proposed form of LC attached. Issuing Bank shall have no
obligation whatsoever to issue any such requested LC, but any such LC which
Issuing Bank does issue shall be subject to all terms and provisions hereof
relating to LCs, and shall be subject to the following restrictions: (a) no LC
issued hereunder shall have an expiration date later than the earlier of two
years after the date of issuance thereof or the end of the Commitment Period,
without the prior written consent of Majority Lenders; (b) no LC issued
hereunder shall be issued in an amount greater than $10,000,000 without the
prior written consent of Majority Lenders; (c) the LC Obligations outstanding
shall at no time exceed $25,000,000; and (d) the sum of (i) the LC Obligations
outstanding and (ii) the aggregate amount of all Loans does not exceed
$300,000,000.
Section 3.2. Reimbursement of LCs.
--------------------
(a) Reimbursement by Borrower. Each payment by Issuing Bank pursuant to
-------------------------
any LC (whether in response to a draft, a demand for payment, or otherwise),
shall constitute a loan to and an obligation of Borrower. Borrower hereby
promises to pay to Issuing Bank, or to Issuing Bank's order, at Issuing Bank's
office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, on demand, any and all
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amounts paid by Issuing Bank pursuant to any and all LCs (such amounts being
herein called the "Matured LC Debt"). Section 2.1 describes certain situations
in which such payments may be made with funds advanced by Lenders under the
Committed Notes, but Borrower's obligations to pay the Matured LC Debt as
provided in this section are absolute and not contingent upon the conditions for
such Borrowings being met. Borrower hereby promises to pay to Issuing Bank, or
to Issuing Bank's order, at Issuing Bank's office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇, on demand, interest at the Late Payment Rate on (a) any outstanding
Matured LC Debt and (b) any fees or other amounts due with respect to LCs (to
the extent the same can legally bear interest). Borrower hereby promises to pay,
when due, all present and future taxes, levies, costs and charges whatsoever
imposed, assessed, levied or collected on, under or in respect of this Agreement
or any LC and any payments of principal, interest or other amounts made on or in
respect of any thereof (excluding, however, any such taxes, levies, costs and
charges imposed on or measured by the overall net income of Issuing Bank).
Borrower promises to indemnify Issuing Bank against, and to reimburse Issuing
Bank on demand for, any of the foregoing taxes, levies, costs or charges paid by
Issuing Bank and any loss, liability, claim or expense, including interest,
penalties and legal fees, that Issuing Bank may incur because of or in
connection with the failure of Borrower to make any such payment of taxes,
levies, costs or charges when due or any payment of Matured LC Debt when due. In
addition, and without limiting the generality of the foregoing, if any law,
regulation or the interpretation thereof by any court or administrative or
governmental authority shall either impose, modify or deem applicable any
capital, reserve, insurance premium or similar requirement against letters of
credit issued by Issuing Bank and the result thereof shall be to increase the
cost to Issuing Bank of issuing or maintaining any letter of credit; then, on
demand by Issuing Bank, Borrower further promises to pay to Issuing Bank, from
time to time, additional amounts which shall be sufficient to compensate Issuing
Bank for the portion of such increased costs allocable to the LCs. A written
advice(s) setting forth in reasonable detail such costs incurred by Issuing
Bank, submitted by Issuing Bank to Borrower from time to time, shall be
conclusive, absent manifest error, as to the amount thereof.
(b) Reimbursement by Lenders. Issuing Bank irrevocably agrees to grant and
------------------------
hereby grants to each Lender, and, to induce Issuing Bank to issue LCs
hereunder, each Lender irrevocably agrees to accept and purchase and hereby
accepts and purchases from Issuing Bank, on the terms and conditions hereinafter
stated, for such Lender's own account and risk an undivided interest equal to
such Lender's Percentage Share of Issuing Bank's obligations and rights under
each LC issued hereunder and the amount of each draft paid by Issuing Bank
thereunder. In the event that Borrower should fail to pay Issuing Bank on
demand the amount of any draft or other request for payment drawn under or
purporting to be drawn under a LC as provided in subsection (a) above, each
Lender shall, before 2:00 p.m. (Dallas Time) on the Business Day Issuing Bank
shall have given notice to Lenders of Borrower's failure to so pay Issuing Bank,
if such notice is given by 10:00 am., Dallas Time (or on the Business Day
immediately succeeding the day such notice is given after 10:00 am. Dallas
Time), pay to Issuing Bank at Issuing Bank's offices in Dallas, Texas, in legal
tender of the United States of America, in same day funds, such Lender's
Percentage Share of the amount of such draft or other request for payment from
Borrower plus interest on such amount from the date Issuing Bank shall have paid
such draft or request for payment to the date of such payment by such Lender at
the Late
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Payment Rate. Each Lender's obligation to make payment to Issuing Bank
pursuant to the terms of this Section 3.2(b) is irrevocable and unconditional.
If any such amount required to be paid by any Lender pursuant to this Section
3.2(b) is not in fact made available by such Lender to Issuing Bank within three
Business Days after the date such payment is due, Issuing Bank shall be entitled
to recover from such Lender, on demand, such amount with interest thereon
calculated from such due date at the Late Payment Rate. A written advice(s)
setting forth in reasonable detail the amounts owing under this Section 3.2,
submitted by Issuing Bank to Borrower from time to time, shall be conclusive,
absent manifest error, as to the amounts thereof. Whenever, at any time after
Issuing Bank has made payment under any LC, and has received from any Lender its
Percentage Share of such payment in accordance with this Section 3.2(b), Issuing
Bank receives any payment related to such LC (whether directly from Borrower or
otherwise, including proceeds of collateral applied thereto by Issuing Bank), or
any payment of interest on account thereof, Issuing Bank will distribute to such
Lender its Percentage Share thereof; provided, however, that in the event that
-------- -------
any such payment received by Issuing Bank shall be required to be returned by
Issuing Bank, such Lender shall return to Issuing Bank the portion thereof
previously distributed by Issuing Bank to it.
Section 3.3. Transferees of LCs. Borrower agrees that if any LC provides
------------------
that it is transferable, Issuing Bank is under no duty to determine the proper
identity of anyone appearing as transferee of such LC, nor shall Issuing Bank be
charged with responsibility of any nature or character for the validity or
correctness of any transfer or successive transfers. Payment by Issuing Bank to
any purported transferee or transferees as determined by Issuing Bank is hereby
authorized and approved, and Borrower further agrees to hold Issuing Bank and
each Lender harmless and indemnified against any liability or claim in
connection with or arising out of the foregoing or the circumstances described
in Section 3.6.
Section 3.4. Extension of Maturity of LCs. Borrower agrees that in the
----------------------------
event of any extension of the maturity or time for presentation of drafts or
demands for payment or any other modification of the terms of any LC at the
request of Borrower or by order of any court or tribunal, with or without
notification to others, or in the event of any increase in the amount of any LC
at the request of Borrower or by order of any court or tribunal, this Agreement
shall be binding upon Borrower with respect to the LC so increased or otherwise
modified, with respect to drafts and demands for payment thereunder, and with
respect to any action taken in accordance with such extension, increase or other
modification by Issuing Bank or by any bank which is a confirming bank or an
advising bank with respect to any LC.
Section 3.5. Restriction on Liability. Neither Issuing Bank nor any bank
------------------------
which is a confirming bank or an advising bank with respect to an LC (in this
section called a "correspondent") shall be responsible for (a) the use which may
be made of any LC or for any acts or omissions of the users of any LC; (b) the
existence or nonexistence of a default under any instrument secured or supported
by any LC or any other event which gives rise to a right to call upon any LC;
(c) the validity, sufficiency or genuineness of any document delivered in
connection with any LC, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged; (d) except as specifically
required by an LC, failure of any
-33-
instrument to bear any reference or adequate reference to any LC, or failure of
documents to accompany any draft at negotiation or failure of any person to note
the amount of any draft on the reverse of any LC or surrender or take up any LC;
or (e) errors, omissions, interruptions or delays in transmission or delivery of
any messages by mail, cable, telegraph, wireless or otherwise. Issuing Bank
shall not be responsible for any act, error, neglect or default, omission,
insolvency or failure in the business of any of the correspondents or any
refusal by Issuing Bank or any of the correspondents to pay or honor drafts
drawn under any LC because of any applicable law, decree or edict, legal or
illegal, of any governmental agency now or hereafter enforced or for any matter
beyond the control of Issuing Bank. The happening of any one or more of the
contingencies referred to in the preceding clauses of this paragraph shall not
affect, impair or prevent the vesting of any of the rights or powers of Issuing
Bank and Lenders under this Agreement, or the obligation of Borrower to make
reimbursement. In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth Borrower agrees that any action taken
or omitted to be taken by Issuing Bank or any Lender or by any correspondent
under or in connection with any LC shall be binding on Borrower and shall not
put Issuing Bank or any Lender or any correspondent under any resulting
liability to Borrower unless grossly negligent or in breach of good faith.
Section 3.6. No Duty to Inquire. Borrower agrees that Issuing Bank is
------------------
authorized and instructed to accept and pay drafts and demands for payment under
the LCs without requiring, and without responsibility for, either at the time of
acceptance or payment or thereafter, the determination as to the existence of
any event giving rise thereto or the proper identity or authority of anyone
appearing on behalf of the beneficiary of any LC.
Section 3.7. LC Fees. In consideration of any issuance by Issuing Bank of
-------
LCs hereunder and of Lender's incurrence of a reimbursement obligation with
respect to such LCs, Borrower agrees to pay (a) to Agent for pro rata
distribution to each Lender in accordance with its Percentage Share, a letter of
credit fee at a rate equal to the Eurodollar Spread then in effect, and (b) to
such Issuing Bank for its own account, a letter of credit fronting fee at a rate
equal to one-eighth of one percent per annum. Each such fee will be calculated
on the term and face amount of such LC and the above applicable rate and will be
payable upon the issuance of such LC.
ARTICLE IV. - Conditions Precedent to Lending
-------------------------------
Section 4.1. Documents to be Delivered. No Lender has any obligation to
-------------------------
make its first Committed Loan and Issuing Bank has no obligation to issue the
first LC (whether or not otherwise agreed to by Issuing Bank) unless Agent shall
have received all of the following, at Agent's office in Dallas, Texas, duly
executed and delivered and in form, substance and date satisfactory to Agent:
(a) This Agreement and any other documents that Lenders are to
execute in connection herewith.
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(b) Each Note.
(c) Certain certificates of Borrower including:
(i) An "Omnibus Certificate" of the Vice President Finance and
the Secretary or an Assistant Secretary of Borrower, which shall
contain the names and signatures of the officers of Borrower
authorized to execute Loan Documents and which shall certify to the
truth, correctness and completeness of the following exhibits attached
thereto: (1) a copy of resolutions duly adopted by the Board of
Directors of Borrower and in full force and effect at the time this
Agreement is entered into, authorizing the execution of this Agreement
and the other Loan Documents delivered or to be delivered in
connection herewith and the consummation of the transactions
contemplated herein and therein, (2) a copy of the charter documents
of Borrower and all amendments thereto, certified by the appropriate
official of Borrower's state of organization, and (3) a copy of any
bylaws of Borrower; and
(ii) A "Compliance Certificate" of the Chairman of the Board or
President and of the chief financial officer of Borrower, of even date
with such Loan, in which such officers certify to the satisfaction of
the conditions set out in subsections (a), (b), (c) and (d) of Section
4.2.
(d) A certificate (or certificates) of the due formation, valid
existence and good standing of Borrower in its state of organization,
issued by the appropriate authorities of such jurisdiction.
(e) A favorable opinion of ▇▇▇▇ ▇▇▇▇▇▇, Esq., counsel for Borrower,
substantially in the form set forth in Exhibit G, together with the
certificate provided for in such Exhibit.
(f) Each Security Document listed in the Security Schedule.
(g) Documents similar to those specified in subsections (c)(i) and
(d) of this section with respect to each Guarantor and the execution by it
of its guaranty of Borrower's Obligations.
(h) A Notice of Final Agreement in the form of the attached
Exhibit N.
Section 4.2. Additional Conditions Precedent. No Lender has any
-------------------------------
obligation to make any Committed Loan (including its first) and Issuing Bank has
no obligation to issue any LC (including its first, whether or not otherwise
agreed to by Issuing Bank), unless the following conditions precedent have been
satisfied:
-35-
(a) All representations and warranties made by any Related Person in
any Loan Document shall be true on and as of the date of such Committed
Loan or issuance of such LC (except to the extent that the facts upon which
such representations and warranties are based have been changed by the
extension of credit hereunder) as if such representations and warranties
had been made as of the date of such Committed Loan or the issuance of such
LC; provided, however, that Borrower's only representations and warranties
regarding any financial projections delivered by Borrower shall be that at
the time such projections were made, Borrower made such projections in good
faith, using assumptions that Borrower believed were reasonable at the time
made.
(b) No Default shall exist at the date of such Committed Loan or
issuance of such LC.
(c) No material adverse change shall have occurred to Borrower's
Consolidated financial condition or businesses since the date of this
Agreement.
(d) Each Related Person shall have performed and complied with all
agreements and conditions required in the Loan Documents to be performed or
complied with by it on or prior to the date of such Committed Loan or
issuance of such LC.
(e) The making of such Committed Loan or issuance of such LC shall not
be prohibited by any law or any regulation or order of any court or
governmental agency or authority and shall not subject any Lender to any
penalty or other onerous condition under or pursuant to any such law,
regulation or order.
(f) Agent shall have received all documents and instruments which
Agent has then requested, in addition to those described in Section 4.1
(including opinions of legal counsel for the Related Persons and Agent;
corporate documents and records; documents evidencing governmental
authorizations, consents, approvals, licenses and exemptions; and
certificates of public officials and of officers and representatives of
Borrower and other Persons), as to (i) the accuracy and validity of or
compliance with all representations, warranties and covenants made by any
of the Related Persons in this Agreement and the other Loan Documents, (ii
the satisfaction of all conditions contained herein or therein, and (ii all
other matters pertaining hereto and thereto. All such additional documents
and instruments shall be satisfactory to Agent in form, substance and date.
ARTICLE V. - Representations and Warranties
------------------------------
Section 5.1. Borrower's Representations and Warranties. To confirm each
-----------------------------------------
Lender's understanding concerning Borrower and Borrower's business, properties
and obligations and to induce Agent and each Lender to enter into this Agreement
and to make the Committed Loans
-36-
and to induce the Issuing Bank to issue LCs, Borrower represents and warrants to
Agent, Issuing Bank, and each Lender that:
(a) No Default. Borrower is not in default in the performance of any
----------
of the covenants and agreements contained herein. No event has occurred
and is continuing which constitutes a Default.
(b) Organization and Good Standing. Each Related Person which is a
------------------------------
corporation or partnership is duly organized, validly existing and in good
standing under the laws of its state of organization, having all corporate
or partnership powers required to carry on its business and enter into and
carry out the transactions contemplated hereby. Each such Related Person is
duly qualified, in good standing, and authorized to do business in all
other jurisdictions within the United States wherein the character of the
properties owned or held by it or the nature of the business transacted by
it makes such qualification necessary, except for jurisdictions in which
the failure to qualify or maintain such qualification would not have a
Material Adverse Effect. Each such Related Person has taken all actions
and procedures customarily taken in order to enter, for the purpose of
conducting business or owning property, each jurisdiction outside the
United States wherein the character of the properties owned or held by it
or the nature of the business transacted by it makes such actions and
procedures desirable.
(c) Authorization. Each Related Person which is a corporation or
-------------
partnership has duly taken all corporate or partnership action necessary to
authorize the execution and delivery by it of the Loan Documents to which
it is a party and to authorize the consummation of the transactions
contemplated thereby and the performance of its obligations thereunder.
Borrower is duly authorized to borrow funds hereunder, and Borrower is duly
authorized to apply for the issuance of any LC requested hereunder.
(d) No Conflicts or Consents. The execution and delivery by the
------------------------
various Related Persons of the Loan Documents to which each is a party, the
performance by each of its obligations under such Loan Documents, and the
consummation of the transactions contemplated by the various Loan
Documents, do not and will not, to the best of our knowledge, (i) conflict
with any provision of (1) any domestic or foreign law, statute, rule or
regulation as in effect on the date such representation and warranty is
made, (2) the articles or certificate of incorporation, bylaws, charter, or
partnership agreement or certificate of any Related Person, or (3) any
agreement, judgment, license, order or permit applicable to or binding upon
any Related Person, (ii) result in the acceleration of any Debt owed by any
Related Person, or (iii) result in or require the creation of any Lien upon
any assets or properties of any Related Person except as expressly
contemplated in the Loan Documents. No consent, approval, authorization or
order of, and no notice to or filing with, any court or governmental
authority or third party is required in connection with the execution,
delivery or performance by any Related Person of any Loan Document or to
consummate any transactions contemplated by the Loan Documents.
-37-
(e) Enforceable Obligations. This Agreement is, and the other Loan
-----------------------
Documents when duly executed and delivered will be, legal, valid and
binding obligations of each Related Person which is a party hereto or
thereto, enforceable in accordance with their terms except as such
enforcement may be limited by bankruptcy, insolvency or similar laws of
general application relating to the enforcement of creditors' rights and as
limited by general equitable principles.
(f) Initial Financial Statements. The Initial Financial Statements
----------------------------
fairly present Borrower's Consolidated financial position at the date
thereof and the Consolidated results of Borrower's operations and
Borrower's Consolidated cash flows for the period thereof. Since the date
of the audited annual Initial Financial Statements no material adverse
change has occurred in Borrower's financial condition or businesses or in
Borrower's Consolidated financial condition or businesses, except as
reflected in the Disclosure Schedule. All Initial Financial Statements
were prepared in accordance with GAAP.
(g) Other Obligations and Restrictions. No Related Person has any
----------------------------------
outstanding Debt of any kind (including contingent obligations, tax
assessments, and unusual forward or long-term commitments) which is, in the
aggregate, material to Borrower or material with respect to Borrower's
Consolidated financial condition and not shown in the Initial Financial
Statements or disclosed in the Disclosure Schedule or a Disclosure Report.
Except as shown in the Initial Financial Statements or disclosed in the
Disclosure Schedule or a Disclosure Report, no Related Person is subject to
or restricted by any franchise, contract, deed, charter restriction, or
other instrument or restriction which can reasonably be expected to have a
Material Adverse Effect.
(h) Full Disclosure. No certificate, statement or other information
---------------
delivered herewith or heretofore by any Related Person to Agent or any
Lender in connection with the negotiation of this Agreement or in
connection with any transaction contemplated hereby contains any untrue
statement of a material fact or omits to state any material fact known to
any Related Person (other than industry-wide risks normally associated with
the types of businesses conducted by the Related Persons) necessary to make
the statements contained herein or therein not misleading as of the date
made or deemed made. There is no fact known to any Related Person (other
than industry-wide risks normally associated with the types of businesses
conducted by the Related Persons) that has not been disclosed to Agent and
each Lender in writing which can reasonably be expected to have a Material
Adverse Effect. Borrower has heretofore delivered to Agent and each Lender
true, correct and complete copies of the Initial Financial Statements.
(i) Litigation. Except as disclosed in the Initial Financial
----------
Statements or in the Disclosure Schedule or a Disclosure Report: (i) there
are no actions, suits or legal, equitable, arbitrative or administrative
proceedings pending, or to the knowledge of any Related Person threatened,
against any Related Person before any federal, state, municipal or other
court, department, commission, body, board, bureau, agency, or
-38-
instrumentality, domestic or foreign, which do or can reasonably be
expected to have a Material Adverse Effect, and (ii) there are no
outstanding judgments, injunctions, writs, rulings or orders by any such
governmental entity against any Related Person or, to the best of
Borrower's knowledge, against any Related Person's stockholders, partners,
directors or officers which have or may reasonably be expected to have a
Material Adverse Effect.
(j) Labor Disputes and Acts of God. Except as disclosed in the
------------------------------
Disclosure Schedule or a Disclosure Report, neither the business nor the
properties of any Related Person has been affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance), which do or may reasonably be
expected to have a Material Adverse Effect.
(k) ERISA Liabilities. All currently existing ERISA Plans are listed
-----------------
in the Disclosure Schedule or a Disclosure Report. Except as disclosed in
the Initial Financial Statements or in the Disclosure Schedule or a
Disclosure Report, no Termination Event has occurred with respect to any
ERISA Plan and the Related Persons are in compliance with ERISA in all
material respects. No Related Person is required to contribute to, or has
any other absolute or contingent liability in respect of, any
"multiemployer plan" as defined in Section 4001 of ERISA. Except as set
forth in the Disclosure Schedule or a Disclosure Report: (i) no
"accumulated funding deficiency" (as defined in Section 412(a) of the
Internal Revenue Code of 1986, as amended) exists with respect to any ERISA
Plan, whether or not waived by the Secretary of the Treasury or his
delegate, and (ii) the current value of each ERISA Plan's benefits does not
exceed the current value of such ERISA Plan's assets available for the
payment of such benefits by more than $2,500,000.
(l) Environmental and Other Laws. Except as disclosed in the
----------------------------
Disclosure Schedule or a Disclosure Report: (i) the Related Persons are
conducting their businesses in material compliance with all applicable
federal, state or local laws, including Environmental Laws, and have and
are in compliance with all licenses and permits required under any such
laws, in all material respects; (ii) none of the operations or properties
of any Related Person is the subject of federal, state or local
investigation evaluating whether any material remedial action is needed to
respond to a release of any Hazardous Materials into the environment or to
the improper storage or disposal (including storage or disposal at offsite
locations) of any Hazardous Materials; (iii) no Related Person (and to the
best knowledge of Borrower, no other Person) has filed any notice under any
federal, state or local law indicating that any Related Person is
responsible for the improper release into the environment, or the improper
storage or disposal, of any material amount of any Hazardous Materials or
that any Hazardous Materials have been improperly released, or are
improperly stored or disposed of, upon any property of any Related Person;
(iv) no Related Person has transported or arranged for the transportation
of any Hazardous Material to any location which is (1) listed on the
National Priorities List under the Comprehensive Environmental Response,
-39-
Compensation and Liability Act of 1980, as amended, listed for possible
inclusion on such National Priorities List by the Environmental Protection
Agency in its Comprehensive Environmental Response, Compensation and
Liability Information System List, or listed on any similar state list or
(2) to the best of our knowledge, the subject of federal, state or local
enforcement actions or other investigations which may lead to claims
against any Related Person for clean-up costs, remedial work, damages to
natural resources or for personal injury claims (whether under
Environmental Laws or otherwise); and (v) no Related Person otherwise has
any known material contingent liability under any Environmental Laws or in
connection with the release into the environment, or the storage or
disposal, of any Hazardous Materials, except to the extent the matters
described in the foregoing clauses (i) through (v) would not have a
Material Adverse Effect.
(m) Names and Places of Business. No Related Person has, during the
----------------------------
preceding five years, had, been known by, or used any other corporate,
trade, or fictitious name, except as disclosed in the Disclosure Schedule.
Except as otherwise indicated in the Disclosure Schedule or a Disclosure
Report, the chief executive office and principal place of business of the
Related Persons are (and for the preceding five years have been) located at
the address of Borrower set out in Section 10.3 or (if different) the
address of each such Related Person set out in the Disclosure Schedule.
Except as indicated in the Disclosure Schedule or a Disclosure Report, no
Related Person has any other principal place of business.
(n) Borrower's Subsidiaries. None of Borrower and its Subsidiaries
-----------------------
presently has any Subsidiary or owns any stock in any other corporation or
association except those listed in the Disclosure Schedule or a Disclosure
Report.
(o) Title to Properties; Licenses. Except as disclosed in the
-----------------------------
Disclosure Schedule, each Related Person has good and defensible title to
all of its material properties and assets, free and clear of all Prohibited
Liens and of all impediments to the use of such properties and assets in
such Related Person's business, except that (i) with regard to easements
and rights-of-way relating to any Related Person's gathering systems, to
the best of such Related Person's knowledge, there exist no Liens that a
reasonable and prudent operator in the gas processing business would
consider to be a material impairment of title and such Related Person has
such title as is reasonably necessary to permit the use and enjoyment of
such gathering systems, and (ii) no representation or warranty is made with
respect to any oil, gas or mineral property or interest to which no proved
oil or gas reserves are properly attributed. Each Related Person possesses
all licenses, permits, franchises, patents, copyrights, trademarks and
trade names, and other intellectual property (or otherwise possesses the
right to use such intellectual property without violation of the rights of
any other Person) which are necessary to carry out its business as
presently conducted and as presently proposed to be conducted hereafter,
and no Related Person is in violation in any material respect of the terms
under which it possesses such intellectual property or the right to use
such intellectual property.
-40-
(p) Government Regulation. Neither Borrower nor any other Related
---------------------
Person owing Obligations except WPS is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940 (as any of the preceding acts have been
amended) or, to the best of our knowledge, any other statute, law,
regulation or decree which regulates the incurring by such Person of Debt,
including statutes, laws, regulations or decrees relating to common
contract carriers or the sale of electricity, gas, steam, water or other
public utility services.
(q) Insider. Neither Borrower, nor any other Related Person, nor, to
-------
the best of our knowledge, any Person having "control" (as that term is
defined in 12 U.S.C. (S) 375b(9) or in regulations promulgated pursuant
thereto) of Borrower, is a "director" or an "executive officer" or
"principal shareholder" (as those terms are defined in 12 U.S.C. (S)
375b(8) or (9) or in regulations promulgated pursuant thereto) of Lender,
of a bank holding company of which Lender is a Subsidiary or of any
Subsidiary of a bank holding company of which Lender is a Subsidiary.
(r) Officers and Directors. The officers and directors of Borrower
----------------------
are those persons disclosed in the definitive proxy statement prepared by
Borrower and filed with the Securities and Exchange Commission in
connection with Borrower's most recent annual meeting, copies of which
proxy statement have been previously furnished in connection with the
negotiation hereof, except as set forth on the Disclosure Schedule or a
Disclosure Report.
Section 5.2. Representation by Lenders. Each Lender hereby represents
-------------------------
that it will acquire its Note for its own account in the ordinary course of its
lending business; however, the disposition of such Lender's property shall at
all times be and remain within its control and, in particular and without
limitation, such Lender may sell or otherwise transfer its Note, any
participation interest or other interest in its Note, or any of its other rights
and obligations under the Loan Documents; provided that such sale or transfer is
made in substantial compliance with applicable law.
ARTICLE VI. - Covenants of Borrower
---------------------
Section 6.1. Affirmative Covenants. Borrower warrants, covenants and
---------------------
agrees that until the full and final payment of the Obligations and the
termination of this Agreement, unless Majority Lenders have previously agreed
otherwise in writing:
(a) Payment and Performance. Borrower will pay all amounts owed
-----------------------
by it under the Loan Documents to which it is a party in accordance with
the terms thereof and will observe, perform and comply with every covenant,
term and condition expressed or implied in the Loan Documents. Borrower
will use its best efforts to cause each other Related Person to observe,
perform and comply with every term, covenant and condition of the Loan
Documents applicable to it.
-41-
(b) Books, Financial Statements and Reports. Each Related Person will
---------------------------------------
at all times maintain full and accurate books of account and records.
Borrower will maintain and will cause its Subsidiaries to maintain a
standard system of accounting and will furnish the following statements and
reports to Agent and each Lender at Borrower's expense:
(i) As soon as available, and in any event within 90 days after
the end of each Fiscal Year, complete Consolidated financial
statements of Borrower together with all notes thereto, prepared in
reasonable detail in accordance with GAAP, together with opinions,
based on audits using generally accepted auditing standards, by Price
Waterhouse, or other independent certified public accountants selected
by Borrower and acceptable to Majority Lenders, stating that such
Consolidated financial statements have been so prepared. Such
Consolidated financial statements shall contain a balance sheet as of
the end of such Fiscal Year and statements of operations, of cash
flows, and of changes in stockholders' equity for such Fiscal Year,
each setting forth in comparative form the corresponding figures for
the preceding Fiscal Year. In addition, within 90 days after the end
of each Fiscal Year Borrower will furnish to Agent and each Lender (A)
a certificate in the form of Exhibit E signed by the chief financial
officer, treasurer or controller of Borrower confirming compliance (or
failure to comply) with the requirements of Sections 6.2(a), (b), (d),
(e), (f), (k), (l), and (m) and setting out in reasonable detail
calculations showing such compliance, if applicable, and (B) a report
signed by such accountants stating that they have reviewed such
certificate and this Agreement and further stating that, in making
such review and the examination and report on the Consolidated
financial statements described above, they did not obtain any
knowledge that there existed any condition or event related to the
financial covenants set forth in such sections relating to Borrower at
the end of such Fiscal Year or at the time of their report which
constituted an Event of Default or a Default, or, if they did obtain
any such knowledge, specifying the nature and period of existence of
any such condition or event.
(ii) For each Guarantor which has EBITDA in any Fiscal Quarter
which constitutes ten percent (10%) or more of Borrower's Consolidated
EBITDA for such Fiscal Quarter or which has assets at any time with a
book value equal to or exceeding ten percent (10%) of the book value
of Borrower's Consolidated assets at such time, as soon as available,
and in any event within 90 days after the end of each fiscal year of
such Guarantor, complete Consolidated financial statements of such
Guarantor, together with all notes thereto, prepared in reasonable
detail in accordance with all regulations applicable to such Guarantor
or in accordance with accounting methods acceptable to Agent. Such
Consolidated financial statements shall contain a balance sheet as of
the end of such fiscal year and a statement of operations for such
fiscal year, each setting forth in comparative form the corresponding
figures for the preceding fiscal year.
-42-
(iii) As soon as available, and in any event within 45 days after
the end of each Fiscal Quarter, (A) Borrower's Consolidated balance
sheet as of the end of such Fiscal Quarter and statements of
operations for the period from the beginning of the then current
Fiscal Year to the end of such Fiscal Quarter, all in reasonable
detail in accordance with GAAP, subject to changes resulting from
normal year-end adjustments, (B) for each Guarantor which has EBITDA
in any Fiscal Quarter which constitutes ten percent (10%) or more of
Borrower's Consolidated EBITDA for such Fiscal Quarter or which has
assets at any time with a book value equal to or exceeding ten percent
(10%) of the book value of Borrower's Consolidated assets at such
time, such Guarantor's consolidated balance sheet as of the end of
each fiscal quarter of such Guarantor and statements of operations
from the beginning of its then current fiscal year to the end of such
fiscal quarter, prepared in reasonable detail in accordance with all
regulations applicable to such Guarantor or in accordance with
accounting methods acceptable to Agent, subject to changes resulting
from normal year end adjustments, and (C) a certificate in the form of
Exhibit E signed by the chief financial officer, treasurer or
controller of Borrower, confirming compliance (or failure to comply)
with the requirements of Sections 6.2(a), (b), (d), (e), (f), (k), (l)
and (m) and setting out in reasonable detail calculation showing such
compliance, if applicable, stating that such financial statements are
materially complete, stating that he has reviewed the Loan Documents
and carried out or caused to be carried out such further review as is
necessary to enable him to express an informed opinion as to
compliance with the Loan Documents, and further stating that to the
best of his knowledge there is no condition or event at the end of
such Fiscal Quarter or at the time of such certificate which
constitutes an Event of Default or a Default or specifying the nature
and period of existence of any such condition or event.
(iv) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent by
Borrower to its shareholders and all registration statements, periodic
reports and other statements and schedules filed by any Related Person
with any securities exchange or any governmental authority responsible
for compliance with securities laws.
(v) By April 30 of each year, a projection of Borrower's cash
flows for such year in form and scope substantially similar to Exhibit
H hereto.
(vi) As soon as delivered to holders of the Debt Securities,
copies of all reports, statements and notices delivered generally to
holders of Debt Securities (excluding data which Borrower deems
duplicative, immaterial or inapplicable for delivery to Agent and
Lenders).
(c) Other Information and Inspections. Each Related Person will
---------------------------------
furnish to Agent and each Lender any information which Agent may from time
to time request on behalf of itself or any Lender concerning any covenant,
provision or condition of the
-43-
Loan Documents or any matter in connection with the Related Persons'
businesses and operations. Each Related Person will permit representatives
appointed by Agent on behalf of Lenders, including independent accountants,
agents, attorneys, appraisers and any other persons, to visit and inspect
any of such Related Person's property, including its books of account,
other books and records, and any facilities or other business assets, and
to make extra copies therefrom and photocopies and photographs thereof, and
to write down and record any information such representatives obtain, and
each Related Person shall permit Agent or its representatives, on behalf of
Lenders, to investigate and verify the accuracy of the information
furnished to Agent or any Lender in connection with the Loan Documents and
to discuss all such matters with its officers, employees and
representatives. Each of Agent and Lenders agrees that, until the
occurrence of a Default, it will take all reasonable steps to keep
confidential any proprietary information regarding lists of customers of
Borrower and its Subsidiaries and the terms of contracts of Borrower and
its Subsidiaries with purchasers and producers; provided, however, that
this restriction shall not apply to information which (i) has at the time
in question entered the public domain, (ii) is required to be disclosed by
law or by any order, rule or regulation (whether valid or invalid) of any
court or governmental agency, or (iii) is furnished to purchasers or
prospective purchasers of participations or interests in the Loans or the
Notes so long as such purchasers and prospective purchasers have agreed to
be subject to restrictions identical to those imposed upon Agent and each
Lender under this sentence.
(d) Notice of Material Events. Borrower will promptly notify Agent
-------------------------
and each Lender (i) of any material adverse change in Borrower's financial
condition or Borrower's Consolidated financial condition, (ii) of the
occurrence of a Default or Event of Default, (iii) of the acceleration of
the maturity of any indebtedness owed by any Related Person or of any
default by any Related Person under any indenture, mortgage, agreement,
contract or other instrument to which any of them is a party or by which
any of them or any of their properties is bound, if such acceleration or
default can reasonably be expected to have a Material Adverse Effect, (iv)
of any material adverse claim (or any claim of $10,000,000 or more)
asserted against any Related Person or with respect to any Related Person's
properties pursuant to which an adverse decision can reasonably be expected
to have a Material Adverse Effect, (v) of the occurrence of any Termination
Event or of any event or condition known to Borrower which can reasonably
be expected to have a Material Adverse Effect, and (vi) of the filing of
any suit or proceeding against any Related Person in which an adverse
decision can reasonably be expected to have a Material Adverse Effect.
Upon the occurrence of any of the foregoing the Related Persons will take
all necessary or appropriate steps to remedy promptly any such material
adverse change, Default, Event of Default or default, to protect against
any such adverse claim, to defend any such suit or proceeding, to remedy
any such Termination Event or event affecting enforceability, and to
resolve all controversies on account of any of the foregoing. Borrower
will also notify Agent and Agent's counsel in writing at least twenty
Business Days prior to the date that any Related Person changes its name or
the location of its chief executive office or principal place of business,
furnishing with such notice any necessary financing statement amendments or
requesting Agent and its counsel to prepare
-44-
the same. Borrower hereby represents that the address of the chief
executive office and principal place of business of each Related Person is
the address of Borrower set out in Section 10.3 hereof or (if different)
the address of each Related Person set out in the Disclosure Schedule.
(e) Maintenance of Properties. Each Related Person will maintain,
-------------------------
preserve, protect, and keep all property used or useful in the conduct of
its business in good condition and in compliance with all applicable laws,
rules and regulations, and will from time to time make all repairs,
renewals and replacements needed to enable the business and operations
carried on in connection therewith to be promptly and advantageously
conducted at all times, except to the extent that failure to do so would
not have a Material Adverse Effect.
(f) Maintenance of Existence and Qualifications. Each Related Person
-------------------------------------------
which is a corporation or partnership will maintain and preserve its
corporate or partnership existence and its rights and franchises in full
force and effect and will qualify to do business as a foreign corporation
or partnership in all states or jurisdictions where required by applicable
law, except where the failure so to qualify will not have any material
adverse effect on such Related Person.
(g) Payment of Trade Debt, Taxes, etc. Each Related Person (i) will
---------------------------------
timely file all required tax returns; (ii) will timely pay all taxes,
assessments and other governmental charges or levies imposed upon it or
upon its income, profits or property; (iii) will within 90 days after the
same becomes due pay all Debt owed by it on ordinary trade terms to
vendors, suppliers, and other Persons providing goods and services used by
it in the ordinary course of its business; (iv) will pay and discharge when
due all other Debt now or hereafter owed by it; and (v) will maintain
appropriate accruals and allowance accounts for all such liabilities in a
timely fashion in accordance with GAAP. Each Related Person may, however,
delay paying or discharging any such taxes, charges, claims or liabilities
so long as the validity thereof is contested in good faith by appropriate
proceedings and it has set aside on its books adequate allowance accounts
therefor in accordance with GAAP.
(h) Insurance. Borrower and the Related Persons will keep or cause to
---------
be kept adequately insured by financially sound and reputable insurers all
property of a character usually insured by corporations or partnerships
engaged in the same or similar businesses. Borrower and the Related Persons
shall maintain business interruption insurance in an amount providing not
less than $10,000,000 coverage for the covered persons, taken as a whole.
At all times adequate insurance against liability on account of damages to
Persons or property and workmen's compensation insurance shall be
maintained covering Borrower and the Related Persons, which insurance shall
be by financially sound and reputable insurers.
-45-
(i) Payment of Expenses. Whether or not the transactions contemplated
-------------------
by this Agreement are consummated, Borrower will promptly (and in any
event, within 30 days after any invoice or other statement or notice) pay
all reasonable costs and expenses incurred by or on behalf of NationsBanc
Capital Markets, Inc. (including attorneys' fees) in connection with the
syndication of the Loans and by or on behalf of Agent (including attorneys'
fees) in connection with (i) the preparation, execution and delivery of the
Loan Documents, and any and all consents, waivers or other documents or
instruments relating thereto, (ii) the filing, recording, refiling and re-
recording of any Loan Documents and any other documents or instruments or
further assurances required to be filed or recorded or refiled or re-
recorded by the terms of any Loan Document, (iii) the borrowings hereunder
and other action reasonably required in the course of administration
hereof, and (iv) the enforcement, after the occurrence of a Default, of the
Loan Documents. In addition to the foregoing, Borrower will pay the
expenses of each Lender in connection with the events described in clause
(iv) above. In no event shall Borrower pay any expenses incurred by Agent
or any Lender in connection with the loss of any Note.
(j) Performance on Borrower's Behalf. If any Related Person fails to
--------------------------------
pay any taxes, insurance premiums, costs, expenses, or other amounts it is
required to pay under any Loan Document (including without limitation any
amounts required to be paid under Sections 6.1(i) and 8.3 of this
Agreement), Agent may pay the same on behalf of Lenders. Borrower shall
immediately reimburse Agent for any such payments and each amount paid
shall constitute a part of the Obligations, shall be secured by the
Security Documents and shall bear interest at the Late Payment Rate from
the date such amount is paid by Agent until the date such amount is repaid
to Agent).
(k) Compliance with Agreements and Law. Each Related Person will
----------------------------------
perform all obligations which are material to Borrower's Consolidated
financial condition which such Related Person is required to perform under
the terms of each indenture, mortgage, deed of trust, security agreement,
lease, franchise, agreement, contract or other instrument or obligation to
which it is a party or by which it or any of its properties is bound
(subject to their rights to delay payment in the circumstances described in
Section 6.1(g)). Each Related Person will conduct its business and affairs
in material compliance with all laws, regulations, and orders applicable
thereto (including those relating to pollution and other environmental
matters) except where such failure would not have a Material Adverse
Effect.
(l) Evidence of Compliance. Each Related Person will furnish to each
----------------------
Lender at such Related Person's or Borrower's expense all evidence which
Agent from time to time reasonably requests on behalf of Lenders, including
but not limited to the forms of evidence and assurance described in Section
4.2(f) as to the accuracy and validity of or compliance with all
representations, warranties and covenants made by any Related Person in the
Loan Documents, the satisfaction of all conditions contained therein, and
all other matters pertaining thereto.
-46-
(m) Shareholder Rights Plan. Notwithstanding anything else contained
-----------------------
in this Agreement, Borrower may dividend, issue, redeem or otherwise sell
or acquire any Rights pursuant to a Shareholder Rights Plan.
Section 6.2. Negative Covenants. To conform with the terms and conditions
------------------
under which each Lender is willing to have credit outstanding to Borrower, and
to induce Agent and each Lender to enter into this Agreement and make the Loans,
Borrower warrants, covenants and agrees that until the full and final payment of
the Obligations and the termination of this Agreement, unless Majority Lenders
have previously agreed otherwise in writing:
(a) Debt. No Related Person, Williston Gas Company, Westana, Sandia
----
or ▇▇▇▇▇▇ Smackover will in any manner owe or be liable for Debt except:
(i) the Obligations.
(ii) unsecured Debt among Borrower and any Guarantor.
(ii) Obligations under leases, whether capital leases or
operating leases, entered into in the ordinary course of business in
arm's-length transactions at competitive market rates under
competitive terms and conditions considering all aspects thereof,
provided that the obligations payable over the lives of any such
leases do not in the aggregate exceed $20,000,000, and in addition,
obligations under oil and gas leases, real estate leases for office
space used by Borrower, and leases for vehicles, office equipment and
data processing equipment.
(iv) Debt under the Term Loan Agreement and the Debt Securities.
(v) unsecured Debt of Borrower not described in subsections (i)
through (iv) above which meets the following requirements: (A) the
documentation evidencing such Debt shall contain no terms, conditions
or defaults (other than pricing) which are more favorable to the third
party creditor than those contained in this Agreement are to Lenders,
as determined by Majority Lenders in their discretion (provided that
Majority Lenders shall make any such determination considering any
amendments or modifications to this Agreement existing at the time of
the incurrence of such Debt) and shall not contain any provision which
attempts to modify, amend or restrict any of the rights or remedies of
Agent or Lenders hereunder or under any of the other Loan Documents,
(B) such Debt shall have no scheduled principal payments due prior to
the final maturity of the Obligations, (C) at the time Borrower incurs
such Debt, no Default or Event of Default shall have occurred and be
continuing hereunder and (D) if such Debt is to be guaranteed by any
Affiliate of Borrower, then such third party lender(s) must enter into
an inter-creditor agreement with Lenders, in form, scope and substance
which is acceptable to Majority Lenders, as evidenced by their written
consent.
-47-
(vi) Debt arising in connection with a Permitted Receivables
Purchase Facility an aggregate outstanding amount not to exceed
seventy-five million dollars ($75,000,000) plus associated fees and
expenses.
(vii) Debt arising under Hedging Contracts permitted under
Section 6.2(k).
(viii) Debt outstanding under the instruments or agreements
described on the Disclosure Schedule, excluding any renewals or
extensions of such Debt.
(ix) miscellaneous items of Debt not described in subsections
(i) through (viii) of this subsection (a) which do not in the
aggregate (taking into account all such Debt of all Related Persons)
exceed $5,000,000 at any one time outstanding.
(b) Limitation on Liens. No Related Person will create, assume or
-------------------
permit to exist any Lien upon any of the properties or assets which it now
owns or hereafter acquires, except, to the extent not otherwise forbidden
by the Security Documents:
(i) Liens and security interests at any time existing in favor
of Lenders to secure the Obligations.
(ii) statutory Liens for taxes and other sums which are not
delinquent or which are being contested as provided in Section 6.1(g).
(iii) mechanics' and materialmen's and similar statutory Liens
with respect to obligations which are not delinquent or which are
being contested as provided in Section 6.1(g).
(iv) minor defects and irregularities in title to any property
which do not materially impair the value of such property or the use
thereof for the purposes for which it is held.
(v) Liens listed on the Disclosure Schedule.
(vi) Liens on margin accounts established in connection with
Hedging Contracts securing Debt permitted under Section 6.2(a)(vii).
(vii) Liens securing capital leases permitted under Section
6.2(a)(iii).
(viii) Liens securing purchase money indebtedness in an aggregate
amount not to exceed $1,000,000 encumbering only the assets financed
thereby.
-48-
(ix) Liens on receivables transferred pursuant to a Permitted
Receivables Purchase Facility, to secure Borrower's obligations under
such Permitted Receivables Purchase Facility.
(c) Limitation on Mergers, Issuances of Securities. Except as
----------------------------------------------
expressly provided in this subsection no Related Person will merge or
consolidate with or into any other business entity. Borrower may, however,
merge or consolidate with or into any other business entity if such
Borrower is the surviving business entity; any Subsidiary of Borrower which
is a Guarantor may merge or consolidate with another Subsidiary of Borrower
so long as a Guarantor is the surviving business entity; and any Subsidiary
of Borrower which is not a Guarantor may merge or consolidate with another
Subsidiary of Borrower which is not a Guarantor; provided that the
surviving entity immediately becomes a Guarantor if required to do so
pursuant to the terms of Section 7.3 hereof. No Related Person will issue
partnership interests, stock, or other securities (other than shares of its
common stock or warrants to purchase its common stock), nor will any
Subsidiary of Borrower allow any diminution of Borrower's interest (direct
or indirect) therein.
(d) Limitation on Sales of Property. No Related Person will sell,
-------------------------------
transfer, lease, exchange, alienate or dispose of any of its material
assets or properties or any material interest therein except:
(i) equipment which is worthless or obsolete or which is
replaced by equipment of equal suitability and value;
(ii) inventory which is sold in the ordinary course of business;
(iii) so long as no Default or Event of Default has occurred,
assets or property which are sold in arm's length transactions to
third parties that are not Affiliates of Borrower and are sold for
fair consideration not in the aggregate in excess of $20,000,000
during any Fiscal Year; provided that the sales of receivables
pursuant to a Permitted Receivables Purchase Facility in an amount not
to exceed $75,000,000 shall not be included in the calculation of this
clause (iii); and
(iv) sales of receivables pursuant to a Permitted Receivables
Purchase Facility.
Neither Borrower nor any of Borrower's Subsidiaries will sell, transfer or
otherwise dispose of capital stock of any of Borrower's Subsidiaries except
that any Subsidiary of Borrower may sell or issue its own capital stock to
the extent not otherwise prohibited hereunder. No Related Person will
discount, sell, pledge or assign any notes payable to it, accounts
receivable or future income except to the extent expressly permitted under
the Loan Documents.
-49-
(e) Limitation on Dividends, Redemptions and Prepayments on Senior
--------------------------------------------------------------
Unsecured Notes. No Related Person will:
---------------
(i) declare or pay any dividends on, or make any other
distribution in respect of any interest in it, other than dividends
and distributions by Borrower's Subsidiaries to Borrower;
(ii) directly or indirectly make any capital contribution to or
purchase, redeem, acquire or retire any securities in any Related
Person (whether such interests are now or hereafter issued,
outstanding or created) other than contributions, purchases,
redemptions, acquisitions, retirements made by any Subsidiary with
respect to any shares of its capital stock owned by Borrower;
(iii) purchase, repurchase, defease or make any prepayments on
the Debt Securities.
Notwithstanding clauses (i), (ii) and (iii) of this Section 6.2(e), any
such dividend, distribution, contribution, purchase, redemption,
acquisition, retirement, purchase, repurchase, defeasance or prepayment may
be made if no Default has occurred and is continuing, or will occur as a
result thereof.
(f) Limitation on Investments and New Businesses. No Related Person
--------------------------------------------
will:
(i) make any expenditure or commitment or incur any obligation
or enter into or engage in any transaction except in the ordinary
course of business, which shall be deemed to include expenditures,
commitments, obligations and transactions permitted by clause (iii) or
(iv) of this Section 6.2(f);
(ii) engage directly or indirectly in any business or conduct
any operations except in connection with or incidental to its present
businesses and operations, which shall be deemed to include
expenditures, commitments, obligations and transactions permitted by
clause (iii) or (iv) of this Section 6.2(f);
(iii) make any acquisitions of or capital contributions to or
other investments except (A) capital contributions to and investments
in Williston Gas Company and Subsidiaries already wholly owned by such
Related Person and the joint ventures described on Schedule 4 hereto,
(B) deposits with any Lender, investments in obligations of any Lender
or any of such Lender's Affiliates, time deposits in other banking
institutions which, at the time such deposit is made, are rated "C" by
Thomson BankWatch, Inc. and investments maturing within one year from
the date of acquisition in direct obligations of or obligations
supported by, the full faith and credit of, the United States of
America and (C) purchases of open market commercial paper, maturing
within 270 days after acquisition thereof, with the highest or second
highest credit rating given by either Standard
-50-
& Poor's Rating Group (a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.) or ▇▇▇▇▇'▇
Investors Services, Inc. and investments in money market mutual funds
with equivalent ratings; or
(iv) make any significant acquisitions or investments in any
properties other than gas processing, treating, fractionation,
transmission, gathering and storage facilities, power generation
facilities, and domestic oil and gas properties and an office building
located in the State of Colorado and primarily used by the Related
Persons.
(g) Limitation on Credit Extensions. Except for investments permitted
-------------------------------
under Section 6.2(f), no Related Person will extend credit, make advances
or make loans other than (i) normal and prudent extensions of credit to
customers buying goods and services in the ordinary course of business,
which extensions shall not be for longer periods than those extended by
similar businesses operated in a normal and prudent manner, and (ii) loans
to Borrower or to any Guarantor made in the ordinary course of business and
(iii) loans made by Borrower to its employees pursuant to the Stock Option
Agreements; provided that the aggregate outstanding amount of all such
loans so made shall not exceed $10,000,000, and (iv) to finance the
purchase by Borrower's employees of certain real property, provided that
the aggregate outstanding amount of such loans shall not exceed $500,000.
(h) Transactions with Affiliates. Neither Borrower nor any of its
----------------------------
Subsidiaries will engage in any material transaction with any of its
Affiliates on terms which are less favorable to it than those which would
have been obtainable at the time in arm's-length dealing with Persons other
than such Affiliates, provided that such restriction shall not apply to
transactions among Borrower and its wholly owned Subsidiaries.
(i) Certain Contracts; Amendments; Multiemployer ERISA Plans. Except
--------------------------------------------------------
as expressly provided for in the Loan Documents, no Related Person will,
directly or indirectly, enter into, create, or otherwise allow to exist any
contract or other consensual restriction on the ability of any Subsidiary
of Borrower to: (i) pay dividends or make other distributions to Borrower,
(ii) to redeem equity interests held in it by Borrower, (iii) to repay
loans and other indebtedness owing by it to Borrower, or (iv) to transfer
any of its assets to Borrower, provided that nothing contained in this
sentence is intended to prohibit Borrower's execution and delivery of the
Debt Securities, as is in existence on the date hereof, and the documents
and instruments executed in connection therewith. No Related Person will
enter into, or amend or permit any amendment to, any contract which
releases, qualifies, limits, makes contingent or otherwise detrimentally
affects the rights of any Related Person in any joint venture or
partnership if such contract or amendment would have a Material Adverse
Effect. No Related Person will enter into, or amend or permit any
amendment to, any contract which releases, qualifies, limits, makes
contingent or otherwise detrimentally affects Agent or any Lender or the
rights and benefits of Agent or any Lender under or acquired pursuant to
any Loan Documents.
-51-
(j) Fiscal Year. No Related Person will change its fiscal year.
-----------
(k) Limitation for Net Products Exposure. No Related Person will
------------------------------------
enter into, or otherwise be a party to) any Hedging Contract that does not
comply with the Risk Management Policy. Furthermore, the aggregate Net
Product Exposure at any time shall not exceed $10,000,000. "Net Products
------------
Exposure" means at the close of any Business Day the sum of the following:
--------
(i) the Related Persons' ▇▇▇▇-to-market exposure of At Risk
Positions under the "Strategic Marketing Initiative" section of the
Risk Management Policy.
(ii) the Related Persons' ▇▇▇▇-to-market exposure of At Risk
Positions under the "Risk Management Trading Program" section of the
Risk Management Policy.
(iii) the Related Persons' ▇▇▇▇-to-market exposure of At Risk
Positions specifically approved by Borrower's Board of Directors which
are not covered by the Risk Management Policy.
(iv) the Related Persons' ▇▇▇▇-to-market net exposure under
fixed price sales contracts with terms in excess of 30 days and fixed
price purchase contracts with terms in excess of 30 days.
As used in this section, "At Risk Position" means net long or short
position for contracts purchased or sold in financial markets or over the
counter.
(l) Debt to Capitalization Ratio. Borrower's Debt to Capitalization
----------------------------
Ratio will never be greater than 0.60 to 1.0 as of the end of any Fiscal
Quarter.
(m) Fixed Charge Coverage Ratio. As of the end of each Fiscal
---------------------------
Quarter, Borrower's Fixed Charge Coverage Ratio for the four immediately
preceding consecutive Fiscal Quarters shall never be less than (i) 2.75 to
1.0 during the period from the Closing Date until and including December
31, 1998, (ii) 3.0 to 1.0 during the period from January 1, 1999 until and
including December 31, 1999, and (iii) 3.25 at any time thereafter. For
purposes of this subsection, the term "Borrower's Fixed Charge Coverage
Ratio" means for any period, the ratio of (I) the sum of (1) Borrower's
Consolidated earnings (or loss) for such period, after deduction of all
expenses and other charges other than interest and income tax plus (2)
amounts deducted in the computation of such Consolidated earnings (or loss)
for depreciation, amortization and other non-cash items to (II) the sum of
(1) the aggregate amount of interest for such period treated as an expense
or capitalized on Borrower's consolidated financial statements plus (2) the
aggregate amount of dividends paid or declared by Borrower for such period
in respect of the Preferred Stock, not to exceed four regularly scheduled
dividends and all special dividends.
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ARTICLE VII - Security
--------
Section 7.1. The Security. The Obligations will be secured by the
------------
Security Documents listed in the Security Schedule and any additional Security
Documents hereafter delivered by any Related Person and accepted by Agent.
Section 7.2. Offset. Borrower hereby grants to Agent and each Lender a
------
right of offset to secure the repayment of the Obligations, which right of
offset shall be upon and against (a) any and all moneys, securities or other
property (and the proceeds therefrom) of Borrower now or hereafter held or
received by or in transit to Agent or any Lender from or for the account of
Borrower, whether for safekeeping, custody, pledge, transmission, collection or
otherwise, (b) any and all deposits (general or special, time or demand,
provisional or final) of Borrower with Agent or any Lender, and (c) any other
credits and claims of Borrower at any time existing against Agent or any Lender,
including claims under certificates of deposit. Upon the occurrence of any
Default, each of Agent and Lenders is hereby authorized to offset appropriate,
and apply, at any time and from time to time, without notice to Borrower, any
and all items hereinabove referred to against the Obligations.
Section 7.3. Guaranties of Borrower's Subsidiaries. Borrower shall
-------------------------------------
require each of the following Subsidiaries to immediately execute and deliver to
Agent an absolute and unconditional guaranty of the timely repayment of the
Obligations and the due and punctual performance of the obligations of Borrower
hereunder, which guaranty shall be satisfactory to Agent in form and substance:
(a) Each Subsidiary of Borrower which has EBITDA in any Fiscal Quarter
which constitutes ten percent (10%) or more of Borrower's Consolidated EBITDA
for such Fiscal Quarter or which has assets at any time with a book value equal
to or exceeding ten percent (10%) of the book value of Borrower's Consolidated
assets at such time;
(b) If the aggregate amount of Borrower's unconsolidated EBITDA for any
Fiscal Quarter plus the aggregate EBITDA of Guarantors during such Fiscal
Quarter does not constitute eighty- five percent (85%) or more of Borrower's
Consolidated EBITDA for such Fiscal Quarter or if the book value of Borrower's
individual assets at any time plus the aggregate book value of the assets of
Guarantors at such time does not exceed eight-five percent (85%) of the book
value of Borrower's Consolidated assets at such time, then Subsidiaries of
Borrower with aggregate assets and/or EBITDA necessary to comply with the
eighty-five percent (85%) tests contained in this subsection; and
(c) Upon request by Agent on behalf of Majority Lenders, any other
Subsidiary of Borrower.
Borrower will cause each of its Subsidiaries to deliver to Agent, simultaneously
with its delivery of such a guaranty, written evidence satisfactory to Agent and
its counsel that such Subsidiary
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has taken all corporate or partnership action necessary to duly approve and
authorize its execution, delivery and performance of such guaranty and any other
documents which it is required to execute.
Section 7.4. Deposits.
--------
(a) During the continuance of any Event of Default, Agent may, on behalf
of Majority Lenders, require Borrower to deposit funds with Agent under this
section in an amount up to the aggregate amount which Lenders might then or
thereafter be called upon to advance under all LCs then outstanding. Any funds
deposited under this section shall be held by Agent for the benefit of Lenders
as collateral, and Borrower will in connection therewith execute and deliver
such Security Documents as Majority Lenders may in their discretion require. As
drafts or demands for payment are presented under any LCs, Agent shall apply
such funds to satisfy Borrower's reimbursement obligations with respect thereto.
Pending such application Agent shall invest such funds as mutually agreed upon
by Majority Lenders and Borrower and, if no such agreement is made, in overnight
eurodollar deposits or time deposits with or certificates of deposit issued by
Agent, with maturities from one to sixty days as chosen by Agent and upon such
other terms and conditions as Agent chooses. All interest on such investments
shall be reinvested or applied to LC reimbursement obligations in the same
manner as funds originally deposited by Borrower or, if Borrower requests,
released to Borrower so long as no Default or Event of Default exists. When all
LCs have expired and Borrower's reimbursement obligations in connection
therewith have been satisfied, Agent shall, provided no Default or Event of
Default then exists, release to Borrower any remaining funds and interest
deposited under this section. Borrower shall in no event be obligated to make
deposits under this Section 7.4 whenever the funds and interest already
deposited equal or exceed the aggregate amount which Lenders might then or
thereafter be called upon to advance under all LCs then outstanding.
(b) Whenever Borrower is required to make deposits under this section and
fails to do so on the day such deposit is due, Agent and Lenders may without
notice to Borrower make such deposit (whether by transfers from other accounts
maintained with Lenders, or otherwise) using any funds then available to Agent
or any Lender of Borrower, any Guarantor, or any other person liable for all or
any part of Borrower's obligations hereunder or with respect to the LCs. Any
amounts which are required hereunder to be deposited pursuant to this section
and which are not deposited on the date due shall, for the purposes of each
Security Document, be considered past due debts owing hereunder, and Agent is
hereby authorized to exercise its rights under each Security Document to obtain
funds for deposit as contemplated in this section.
ARTICLE VIII. - Events of Default and Remedies
------------------------------
Section 8.1. Events of Default. Each of the following events constitutes
-----------------
an Event of Default under this Agreement:
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(a) (i) Any Related Person fails to pay any principal when due and
payable, whether at a date for the payment of a fixed installment or
contingent or other payment to Agent, Issuing Bank or any Lender or as a
result of acceleration or otherwise, or (ii any Related Person fails to pay
any interest or other Obligation other than principal when due and payable,
whether at a date for the payment of a fixed installment or contingent or
other payment to Agent, Issuing Bank or any Lender or as a result of
acceleration or otherwise, and such failure continues for ten (10) Business
Days after such payment is due; or
(b) Any default occurs under any Loan Document, any document governing
or evidencing the Debt Securities, or any document governing a Permitted
Receivables Purchase Facility or evidencing any interest therein, or any
event of default or termination event occurs under any Hedging Contract to
which a Lender is a party, and such default, event of default or
termination event is not remedied within the applicable period of grace (if
any) provided for in such document, or any Event of Default occurs under
the Term Loan Agreement; or
(c) Any Related Person fails to duly observe, perform or comply with
any provision of Section 6.2, provided that no grace period shall be
applicable to such failure, or any Related Person fails to duly observe,
perform or comply with any other covenant, agreement, condition or
provision (except those referred to above in this subsection and in
subsections (a) and (b) above) of any Loan Document in any material
respect, and such failure is not remedied within thirty (30) days; or
(d) Any representation or warranty previously, presently or hereafter
made in writing by or on behalf of any Related Person in connection with
any Loan Document shall prove to have been false or incorrect in any
material respect on any date on or as of which made, and such
representation or warranty does not become true and correct within thirty
days; or
(e) Any Related Person fails to duly observe, perform or comply with
any agreement with any Person or any term or condition of any instrument,
if such agreement or instrument is materially significant to Borrower and
its Subsidiaries on a Consolidated basis, and such failure is not remedied
within the applicable period of grace (if any) provided in such agreement
or instrument; or
(f) Any Related Person (i) fails to duly pay any Debt constituting
principal or interest owed by it to any Person other than Agent, Issuing
Bank or any Lender with respect to borrowed money or money otherwise owed
under any note, bond, or similar instrument (including, but not limited to,
the Debt under the Debt Securities) unless such Related Person is
contesting the validity of such Debt by appropriate proceedings and has set
aside on its books adequate allowance accounts therefor in accordance with
GAAP or (ii breaches or defaults in the performance of any agreement or
instrument by which any Debt described in the preceding clause (i) is
issued, evidenced, governed, or secured, and
-55-
any such failure, breach or default continues beyond any applicable period
of grace provided therefor; or
(g) Either (i) any "accumulated funding deficiency" (as defined in
Section 412(a) of the Internal Revenue Code of 1986, as amended) in excess
of $10,000,000 exists with respect to any ERISA Plan, whether or not waived
by the Secretary of the Treasury or his delegate, or (ii any Termination
Event occurs with respect to any ERISA Plan and the then current value of
such ERISA Plan's benefits guaranteed under Title IV of ERISA exceeds the
then current value of such ERISA Plan's assets available for the payment of
such benefits by more than $1,000,000 (or in the case of a Termination
Event involving the withdrawal of a substantial employer, the withdrawing
employer's proportionate share of such excess exceeds such amount); or
(h) Any Related Person:
(i) suffers the entry against it of a judgment, decree or order
for relief by a court of competent jurisdiction in an involuntary
proceeding commenced under any applicable bankruptcy, insolvency or
other similar law of any jurisdiction now or hereafter in effect,
including the federal Bankruptcy Code, as from time to time amended,
or has any such proceeding commenced against it which remains
undismissed for a period of sixty days; or
(ii) commences a voluntary case under any applicable bankruptcy,
insolvency or similar law now or hereafter in effect, including the
federal Bankruptcy Code, as from time to time amended; or applies for
or consents to the entry of an order for relief in an involuntary case
under any such law; or makes a general assignment for the benefit of
creditors; or fails generally to pay (or admits in writing its
inability to pay) its debts as such debts become due; or takes
corporate or other action to authorize any of the foregoing; or
(iii) suffers the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of all or a substantial part of its assets in a
proceeding brought against or initiated by it, and such appointment or
taking possession is neither made ineffective nor discharged within
thirty days after the making thereof, or such appointment or taking
possession is at any time consented to, requested by, or acquiesced to
by it; or
(iv) suffers the entry against it of a final judgment for the
payment of money in excess of $ 5,000,000 (not covered by effective
insurance), unless the same is discharged within sixty days after the
date of entry thereof or an appeal or appropriate proceeding for
review thereof is taken within such period and a stay of execution
pending such appeal is obtained; or
-56-
(v) suffers a writ or warrant of attachment or any similar
process to be issued by any court against all or any substantial part
of its assets or any part of the collateral subject to a Security
Document, and such writ or warrant of attachment or any similar
process is not stayed or released within thirty days after the entry
or levy thereof or after any stay is vacated or set aside; or
(i) Without the express prior written consent of all Lenders,
Borrower amends or modifies the terms of any of the documents or
instruments governing, or otherwise executed in connection with, any of the
Debt Securities to (a) shorten the maturity of such Debt Securities, (b)
increase the interest rate or fees payable under such Debt Securities or
with respect to such Debt Securities, or (c) increase the maximum principal
amount of such Debt Securities, or without the express prior written
consent of Majority Lenders, Borrower amends or modifies any terms of any
of the documents or instruments governing, or otherwise executed in
connection with, any of the Debt Securities other than as set forth in the
foregoing clauses (a), (b) and (c) of this subsection (i); or
(j) Without the express prior written consent of all Lenders,
Borrower amends or modifies any term of the Preferred Stock; or
(k) A Change in Control occurs.
Upon the occurrence of an Event of Default described in subsection (h)(i),
(h)(ii) or (h)(iii) of this section with respect to Borrower, all of the
Obligations shall thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by Borrower and each Related Person who at any time
ratifies or approves this Agreement. Upon any such acceleration, any obligation
of any Lender to make any further Committed Loan or of Issuing Bank to issue LCs
shall be permanently terminated. During the continuance of any other Event of
Default, Agent at any time and from time to time may (and upon written
instructions from Majority Lenders, Agent shall), without notice to Borrower or
any other Related Person, do either or both of the following: (1) terminate any
obligation of Lenders to make the Committed Loans hereunder, (2) terminate any
obligation of Issuing Bank to issue LCs, and (3) declare any or all of the
Obligations immediately due and payable, and all such Obligations shall
thereupon be immediately due and payable, without demand, presentment, notice of
demand or of dishonor and nonpayment, protest, notice of protest, notice of
intention to accelerate, declaration or notice of acceleration, or any other
notice or declaration of any kind, all of which are hereby expressly waived by
Borrower and each Related Person who at any time ratifies or approves this
Agreement.
Section 8.2. Remedies. If any Default shall occur and be continuing, each
--------
Lender may protect and enforce its rights under the Loan Documents by any
appropriate proceedings, including proceedings for specific performance of any
covenant or agreement contained in any Loan Document, and each Lender may
enforce the payment of any Obligations due it or enforce
-57-
any other legal or equitable right which it may have. All rights, remedies and
powers conferred upon Agent and Lenders under the Loan Documents shall be deemed
cumulative and not exclusive of any other rights, remedies or powers available
under the Loan Documents or at law or in equity.
Section 8.3. Indemnity. Borrower agrees to indemnify Agent, Issuing Bank
---------
and each Lender, upon demand, from and against any and all liabilities,
obligations, claims, losses, damages, penalties, fines, actions, judgments,
suits, settlements, costs, expenses or disbursements (including reasonable fees
of attorneys, accountants, experts and advisors) of any kind or nature
whatsoever (in this section collectively called "liabilities and costs") which
to any extent (in whole or in part) may be imposed on, incurred by, or asserted
against Agent, Issuing Bank or such Lender growing out of, resulting from or in
any other way associated with the Loan Documents, any LC issued by Issuing Bank
and the transactions and events (including the enforcement or defense thereof)
at any time associated therewith or contemplated therein (including any
violation or noncompliance with any Environmental Laws by any Related Person or
any liabilities or duties of any Related Person, Agent, Issuing Bank or any
Lender with respect to Hazardous Materials found in or released into the
environment).
THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY AGENT, ISSUING BANK OR ANY LENDER.
NOTWITHSTANDING ANYTHING ELSE CONTAINED IN THIS AGREEMENT, NEITHER AGENT,
ISSUING BANK NOR ANY LENDER SHALL BE ENTITLED UNDER THIS SECTION TO RECEIVE
INDEMNIFICATION FOR THAT PORTION, IF ANY, OF ANY LIABILITIES AND COSTS WHICH IS
PROXIMATELY CAUSED BY ITS OWN INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT,
AS DETERMINED IN A FINAL JUDGMENT. If any Person (including Borrower or any of
its Affiliates) ever alleges such gross negligence or willful misconduct by
Agent, Issuing Bank or any Lender, the indemnification provided for in this
section shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent jurisdiction enters a
final judgment as to the extent and effect of the alleged gross negligence or
willful misconduct. As used in this section the terms "Agent," "Issuing Bank"
and "Lender" shall refer not only to the Persons designated as such in Section
1.1 but also to each director, officer, agent, attorney, employee,
representative and Affiliate of such Person.
ARTICLE IX. - Agent
-----
Section 9.1. Appointment, Powers, and Immunities. Each Lender hereby
-----------------------------------
irrevocably appoints and authorizes Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are
-58-
reasonably incidental thereto. Agent (which term as used in this sentence and in
Section 9.5 and the first sentence of Section 9.6 hereof shall include its
affiliates and its own and its affiliates' officers, directors, employees, and
agents): (a) shall not have any duties or responsibilities except those
expressly set forth in this Agreement and shall not be a trustee or fiduciary
for any Lender; (b) shall not be responsible to Lenders for any recital,
statement, representation, or warranty (whether written or oral) made in or in
connection with any Loan Document or any certificate or other document referred
to or provided for in, or received by any of them under, any Loan Document, or
for the value, validity, effectiveness, genuineness, enforceability, or
sufficiency of any Loan Document, or any other document referred to or provided
for therein or for any failure by any Related Person or any other Person to
perform any of its obligations thereunder; (c) shall not be responsible for or
have any duty to ascertain, inquire into, or verify the performance or
observance of any covenants or agreements by any Related Person or the
satisfaction of any condition or to inspect the property (including the books
and records) of any Related Person or any of its Subsidiaries or affiliates; (d)
shall not be required to initiate or conduct any litigation or collection
proceedings under any Loan Document; and (e) shall not be responsible for any
action taken or omitted to be taken by it under or in connection with any Loan
Document, except for its own gross negligence or willful misconduct. Agent may
employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.
Section 9.2. Reliance by Agent. Agent shall be entitled to rely upon any
-----------------
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or telecopy) believed by it to be
genuine and correct and to have been signed, sent or made by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel for any Related Person), independent accountants, and other
experts selected by Agent. Agent may deem and treat the payee of any Note as
the holder thereof for all purposes hereof unless and until Agent receives and
accepts an Assignment and Acceptance executed in accordance with Section 10.5
hereof. As to any matters not expressly provided for by this Agreement, Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority Lenders,
and such instructions shall be binding on all of Lenders; provided, however,
-------- -------
that Agent shall not be required to take any action that exposes Agent to
personal liability or that is contrary to any Loan Document or applicable law or
unless it shall first be indemnified to its satisfaction by Lenders against any
and all liability and expense which may be incurred by it by reason of taking
any such action.
Section 9.3. Defaults. Agent shall not be deemed to have knowledge or
--------
notice of the occurrence of a Default or Event of Default unless Agent has
received written notice from a Lender or Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that Agent receives such a notice of the occurrence of a Default or Event
of Default, Agent shall give prompt notice thereof to Lenders. Agent shall
(subject to Section 9.2 hereof) take such action with respect to such Default or
Event of Default as shall reasonably be directed by the Majority Lenders,
provided that, unless and until Agent shall have received such directions, Agent
-------- ----
may (but shall not be obligated to) take such action, or refrain
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from taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interest of Lenders.
Section 9.4. Rights as Lender. With respect to its Commitment and the
----------------
Loans made by it, NationsBank (and any successor acting as Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include Agent in its individual capacity. NationsBank (and any
successor acting as Agent) and its affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to, make investments
in, provide services to, and generally engage in any kind of lending, trust, or
other business with any Related Person or any of its Subsidiaries or affiliates
as if it were not acting as Agent, and NationsBank (and any successor acting as
Agent) and its affiliates may accept fees and other consideration from any
Related Person or any of its Subsidiaries or affiliates for services in
connection with this Agreement or otherwise without having to account for the
same to Lenders.
Section 9.5. Indemnification. Lenders agree to indemnify Agent (to the
---------------
extent not reimbursed under Section 8.3 hereof, but without limiting the
obligations of Borrower under such Section) ratably in accordance with their
respective Commitments, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
attorneys' fees), or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against Agent (including by any Lender) in
any way relating to or arising out of any Loan Document or the transactions
contemplated thereby or any action taken or omitted by Agent under any Loan
Document (INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF AGENT);
provided that no Lender shall be liable for any of the foregoing to the extent
--------
they arise from the gross negligence or willful misconduct of the Person to be
indemnified. Without limitation of the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any costs or
expenses payable by Borrower under Section 8.3, to the extent that Agent is not
promptly reimbursed for such costs and expenses by Borrower. The agreements
contained in this Section shall survive payment in full of the Loans and all
other amounts payable under this Agreement.
Section 9.6. Non-Reliance on Agent and Other Lenders. Each Lender agrees
---------------------------------------
that it has, independently and without reliance on Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Related Persons and their Subsidiaries and
decision to enter into this Agreement and that it will, independently and
without reliance upon Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Loan Documents.
Except for notices, reports, and other documents and information expressly
required to be furnished to Lenders by Agent hereunder, Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any
Related Person or any of its Subsidiaries or affiliates that may come into the
possession of Agent or any of its affiliates.
-60-
Section 9.7. Resignation of Agent. Agent may resign at any time by giving
--------------------
notice thereof to Lenders and Borrower. Upon any such resignation, the Majority
Lenders shall have the right to appoint a successor Agent with the consent of
Borrower, which consent shall not be unreasonably withheld. If no successor
Agent shall have been so appointed by the Majority Lenders and shall have
accepted such appointment within thirty (30) days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on behalf of
Lenders, appoint a successor Agent which shall be a commercial bank organized
under the laws of the United States of America having combined capital and
surplus of at least $1,000,000,000 and which shall have experience lending to
oil and gas companies. Upon the acceptance of any appointment as Agent
hereunder by a successor, such successor shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges, and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article IX shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
Section 9.8. Appointment and Authority. Each Lender hereby irrevocably
-------------------------
authorizes Agent, and Agent hereby undertakes, to receive payments of principal,
interest and other amounts due hereunder as specified herein and to take all
other actions and to exercise such powers under the Loan Documents as are
specifically delegated to Agent by the terms hereof or thereof, together with
all other powers reasonably incidental thereto. The relationship of Agent to
Lenders is only that of one commercial bank acting as administrative agent for
others, and nothing in the Loan Documents shall be construed to constitute Agent
a trustee or other fiduciary for any holder of any of the Notes or of any
participation therein nor to impose on Agent duties and obligations other than
those expressly provided for in the Loan Documents. With respect to any matters
not expressly provided for in the Loan Documents and any matters which the Loan
Documents place within the discretion of Agent, Agent shall not be required to
exercise any discretion or take any action, and it may request instructions from
Lenders with respect to any such matter, in which case it shall be required to
act or to refrain from acting (and shall be fully protected and free from
liability to all Lenders in so acting or refraining from acting) upon the
instructions of Majority Lenders (including itself), provided, however, that
Agent shall not be required to take any action which exposes it to a risk of
personal liability that it considers unreasonable or which is contrary to the
Loan Documents or to applicable law. Upon receipt by Agent from Borrower of any
communication calling for action on the part of Lenders or upon notice from any
Lender to Agent of any Default or Event of Default, Agent shall promptly notify
each Lender thereof.
Section 9.9. Exculpation, Agent's Reliance, Etc. NEITHER AGENT NOR ANY OF
----------------------------------
ITS DIRECTORS, OFFICERS, AGENTS, ATTORNEYS, OR EMPLOYEES SHALL BE LIABLE FOR ANY
ACTION TAKEN OR OMITTED TO BE TAKEN BY ANY OF THEM UNDER OR IN CONNECTION WITH
THE LOAN DOCUMENTS, INCLUDING THEIR NEGLIGENCE OF ANY KIND, EXCEPT THAT EACH
SHALL BE LIABLE FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. Without
limiting the generality of the foregoing, Agent (a) may treat the payee of any
Note as the holder thereof until Agent receives written notice of the assignment
or transfer thereof in accordance with this Agreement, signed by
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such payee and in form satisfactory to Agent; (b) may consult with legal counsel
(including counsel for Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations made in or in connection with the Loan Documents; (d) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of the Loan Documents on the part of
any Related Person or to inspect the property (including the books and records)
of any Related Person; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any instrument or document furnished in connection
therewith; (f) may rely upon the representations and warranties of the Related
Persons and Lenders in exercising its powers hereunder; and (g) shall incur no
liability under or in respect of the Loan Documents by acting upon any notice,
consent, certificate or other instrument or writing (including any telecopy,
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper Person or Persons.
Section 9.10. Lenders' Credit Decisions. Each Lender acknowledges that it
-------------------------
has, independently and without reliance upon Agent or any other Lender, made its
own analysis of Borrower and the transactions contemplated hereby and its own
independent decision to enter into this Agreement and the other Loan Documents.
Each Lender also acknowledges that it will, independently and without reliance
upon Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents.
Section 9.11. Expenses; Indemnification.
-------------------------
(a) Borrower agrees to pay on demand all reasonable costs and expenses of
Agent in connection with the syndication, preparation, execution, delivery,
administration, modification, and amendment of this Agreement, the other Loan
Documents, and the other documents to be delivered hereunder, including, without
limitation, the reasonable fees and expenses of counsel for Agent (including the
cost of internal counsel) with respect thereto and with respect to advising
Agent as to its rights and responsibilities under the Loan Documents. Borrower
further agrees to pay on demand all costs and expenses of Agent and Lenders, if
any (including, without limitation, reasonable attorneys' fees and expenses and
the cost of internal counsel), in connection with the enforcement (whether
through negotiations, legal proceedings, or otherwise) of the Loan Documents and
the other documents to be delivered hereunder.
(b) Borrower agrees to indemnify and hold harmless Agent and each Lender
and each of their affiliates and their respective officers, directors,
employees, agents, and advisors (each, an "Indemnified Party") from and against
-----------------
any and all claims, damages, losses, liabilities, costs, and expenses
(including, without limitation, reasonable attorneys' fees) that may be incurred
by or asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including, without limitation, in
connection with any investigation,
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litigation, or proceeding or preparation of defense in connection therewith) the
Loan Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loans (INCLUDING ANY OF THE FOREGOING
ARISING FROM THE NEGLIGENCE OF THE INDEMNIFIED PARTY), except to the extent such
-------------------------
claim, damage, loss, liability, cost, or expense is found in a final, non-
--------------------------------------------------------------------------
appealable judgment by a court of competent jurisdiction to have resulted from
------------------------------------------------------------------------------
such Indemnified Party's gross negligence or willful misconduct and except to
---------------------------------------------------------------
the extent that such claim, damage, loss, liability, cost, or expense arises in
a suit by one Lender against another Lender in each case solely in its capacity
as a "Lender" hereunder and not in its capacity as Agent or Issuing Bank. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this Section 9.11 applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by Borrower, its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated.
(c) Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements and obligations of Borrower contained in this Section
9.11 shall survive the payment in full of the Loans and all other amounts
payable under this Agreement.
Section 9.12. Rights as Lender. In its capacity as a Lender, Agent shall
----------------
have the same rights and obligations as any Lender and may exercise such rights
as though it were not Agent. Agent may accept deposits from, lend money to, act
as Trustee under indentures of, and generally engage in any kind of business
with any of the Related Persons or their Affiliates, all as if it were not Agent
hereunder and without any duty to account therefor to any other Lender.
Section 9.13. Adjustments.
-----------
(a) If any Lender (a "benefitted Lender") shall at any time receive any
-----------------
payment of all or part of the Loans owing to it, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by set-
off, or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Loans owing to it, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loans owing to it, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such benefitted Lender to share the excess
payment or benefits of such collateral or proceeds ratably with each of Lenders;
provided, however, that if all or any portion of such excess payment or benefits
-------- -------
is thereafter recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrower agrees that any Lender so
purchasing a participation from a Lender pursuant to this Section 9.13 may, to
the fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Person were the direct creditor of the Borrower in the amount of such
participation.
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Section 9.14. Benefit of Article IX. The provisions of this Article (other
---------------------
than Section 9.7) are intended solely for the benefit of Agent and Lenders, and
no Related Person shall be entitled to rely on any such provision or assert any
such provision in a claim or defense against Agent or any Lender. Agent and
Lenders may waive or amend such provisions as they desire without any notice to
or consent of Borrower or any Related Person.
Section 9.15. Agency/Administrative Fee. To compensate Agent for
-------------------------
performing its duties under the Loan Documents and for expenses incurred by
Agent in connection with such performance, Borrower shall pay to Agent an agency
and administrative fee in an amount mutually agreed upon by Borrower and Agent.
Section 9.16. Co-Agent. The Lender identified on the facing page or
--------
signature pages of this Agreement as a "Co-Agent" has no right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, the
Lender so identified as a "co-agent" shall not have and shall not be deemed to
have any fiduciary relationship with any Lender. Each Lender acknowledges that
it has not relied, and will not rely, on the Lender so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.
ARTICLE X. - Miscellaneous
-------------
Section 10.1. Waivers and Amendments; Acknowledgements.
----------------------------------------
(a) Waivers and Amendments. No failure or delay (whether by course of
----------------------
conduct or otherwise) by Agent, Issuing Bank or any Lender in exercising any
right, power or remedy which Agent, Issuing Bank or such Lender may have under
any of the Loan Documents shall operate as a waiver thereof or of any other
right, power or remedy, nor shall any single or partial exercise by Agent,
Issuing Bank or such Lender of any such right, power or remedy preclude any
other or further exercise thereof or of any other right, power or remedy. No
failure or delay (whether by course of conduct or otherwise) by Borrower in
exercising any right, power or remedy which Borrower may have under any of the
Loan Documents shall operate as a waiver thereof or of any other right, power or
remedy, nor shall any single or partial exercise by Borrower of any such right,
power or remedy preclude any other or further exercise thereof or of any other
right, power or remedy. No waiver of any provision of any Loan Document and no
consent to any departure therefrom shall ever be effective unless it is in
writing and signed as provided below in this section, and then such waiver or
consent shall be effective only in the specific instances and for the purposes
for which given and to the extent specified in such writing. No notice to or
demand on any Related Person shall in any case of itself entitle any Related
Person to any other or further notice or demand in similar or other
circumstances.
(b) No waiver or supplement to this Agreement or the other Loan Documents
shall be valid or effective against any party hereto unless the same is in
writing and signed by (i) if such party is Borrower, by Borrower, (ii) if such
party is Agent, by Agent, (iii) if such party is Issuing
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Bank, by Issuing Bank, and (iv) if such party is a Lender, by Majority Lenders
or by Agent on behalf of Lenders with the written consent of Majority Lenders
(which consent has already been given as to the termination of the Loan
Documents as provided in Section 10.8). Notwithstanding the foregoing or
anything to the contrary herein, no such amendment or waiver shall, unless
signed by all Lenders or by Agent on behalf of all Lenders with the prior
consent of each individual Lender, (1) waive any of the conditions specified in
Article IV (provided that Agent may in its discretion withdraw any request it
has made under Section 4.2(f)), (2) increase the Percentage Share or Commitment
of such Lender or subject such Lender to any additional obligations, (3) reduce
any fees hereunder, or the principal of, or interest on, such Lender's Note, (4)
postpone any date fixed for any payment of any fees hereunder, or principal of,
or interest on, such Lender's Note, (5) amend the definition herein of "Majority
Lenders" or otherwise change the aggregate amount of Percentage Shares which is
required for Agent, Lenders or any of them to take any particular action under
the Loan Documents, or (6) release Borrower from its obligation to pay such
Lender's Note or any Guarantor from its guaranty of such payment.
(c) Acknowledgements and Admissions. Borrower hereby represents, warrants,
-------------------------------
acknowledges and admits that (i) it has been advised by counsel in the
negotiation, execution and delivery of the Loan Documents to which it is a
party, (ii it has made an independent decision to enter into this Agreement and
the other Loan Documents to which it is a party, without reliance on any
representation, warranty, covenant or undertaking by Agent, Issuing Bank or any
Lender, whether written, oral or implicit, other than as expressly set out in
this Agreement or in another Loan Document delivered on or after the date
hereof, (ii there are no representations, warranties, covenants, undertakings or
agreements by Agent, Issuing Bank or any Lender as to the Loan Documents except
as expressly set out in this Agreement or in another Loan Document delivered on
or after the date hereof, (iv neither Agent, Issuing Bank nor any Lender has any
fiduciary obligation toward Borrower with respect to any Loan Document or the
transactions contemplated thereby, (v) the relationship pursuant to the Loan
Documents between Borrower, on one hand, and Agent, Issuing Bank and each
Lender, on the other hand, is and shall be solely that of debtor and creditor,
respectively, (vi no partnership or joint venture exists with respect to the
Loan Documents between any of Borrower, Agent, Issuing Bank and Lenders, (vi
Agent is not Borrower's Agent, but Agent for Lenders, (vi should an Event of
Default or Default occur or exist Agent and each Lender will determine in its
sole discretion and for its own reasons what remedies and actions it will or
will not exercise or take at that time, (ix without limiting any of the
foregoing, Borrower is not relying upon any representation or covenant by Agent
or any Lender, or any representative thereof, and no such representation or
covenant has been made, that Agent or any Lender will, at the time of an Event
of Default or Default, or at any other time, waive, negotiate, discuss, or take
or refrain from taking any action permitted under the Loan Documents with
respect to any such Event of Default or Default or any other provision of the
Loan Documents, and (x) Agent and all Lenders have relied upon the truthfulness
of the acknowledgements in this section in deciding to execute and deliver this
Agreement and to make their Loans.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT
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BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 10.2. Survival of Agreements; Cumulative Nature. All of the
-----------------------------------------
Related Persons' various representations, warranties, covenants and agreements
in the Loan Documents shall survive the execution and delivery of this Agreement
and the other Loan Documents and the performance hereof and thereof, including
the making or granting of the Loans and the delivery of the Notes and the
other Loan Documents, and shall further survive until all of the Obligations are
paid in full and all of Agent's, Issuing Bank's and Lenders' obligations to
Borrower are terminated. All statements and agreements contained in any
certificate or other instrument delivered by any Related Person to Agent,
Issuing Bank or any Lender under any Loan Document shall be deemed
representations and warranties by Borrower or agreements and covenants of
Borrower under this Agreement. The representations, warranties, indemnities,
and covenants made by the Related Persons in the Loan Documents, and the rights,
powers, and privileges granted to Agent, Issuing Bank and Lenders in the Loan
Documents, are cumulative, and, except for expressly specified waivers and
consents, no Loan Document shall be construed in the context of another to
diminish, nullify, or otherwise reduce the benefit to Agent, Issuing Bank or any
Lender of any such representation, warranty, indemnity, covenant, right, power
or privilege. In particular and without limitation, no exception set out in
this Agreement to any representation, warranty, indemnity, or covenant herein
contained shall apply to any similar representation, warranty, indemnity, or
covenant contained in any other Loan Document, and each such similar
representation, warranty, indemnity, or covenant shall be subject only to those
exceptions which are expressly made applicable to it by the terms of the various
Loan Documents.
Section 10.3. Notices. All notices, requests, consents, demands and other
-------
communications required or permitted under any Loan Document shall be in
writing, unless otherwise specifically provided in such Loan Document (provided
that Agent may give telephonic notices to Lenders), and shall be deemed
sufficiently given or furnished if delivered by personal delivery, by telecopy
or telex, by delivery service with proof of delivery, or by registered or
certified United States mail, postage prepaid, to Borrower and the Related
Persons at the address of Borrower specified on the signature pages hereto and
to Agent, Issuing Bank and the other Lenders at their addresses specified on the
signature pages hereto (unless changed by similar notice in writing given by the
particular Person whose address is to be changed). Any such notice or
communication shall be deemed to have been given (a) in the case of personal
delivery or delivery service, as of the date of first attempted delivery at the
address provided herein, (b) in the case of telecopy or telex, upon receipt, or
(c) in the case of registered or certified United States mail, three days after
deposit in the mail; provided, however, that no Borrowing Notice shall become
effective until actually received by Agent.
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Section 10.4. Joint and Several Liability; Parties in Interest;
-------------------------------------------------
Assignments. This Agreement shall become effective once the conditions
-----------
precedent set forth in Article IV have been met and this Agreement has been
executed by Borrower, Agent and each Lender listed on Schedule 3 hereto by such
date (each such Lender hereinafter referred to in this Section 10.4 as an
"Original Lender"). All Obligations which are incurred by two or more Related
Persons shall be their joint and several obligations and liabilities. All
grants, covenants and agreements contained in the Loan Documents shall bind and
inure to the benefit of the parties thereto and their respective successors and
assigns; provided, however, that no Related Person may assign or transfer any of
its rights or delegate any of its duties or obligations under any Loan Document
without the prior consent of Majority Lenders. Neither Borrower nor any
Affiliates of Borrower shall directly or indirectly purchase or otherwise retire
any Obligations owed to any Lender nor will any Lender accept any offer to do
so, unless each Lender shall have received substantially the same offer with
respect to the same Percentage Share of the Obligations owed to it. If Borrower
or any Affiliate (excluding members of Borrower's Board of Directors or
---------
Affiliates of such members) of Borrower at any time purchases some but less than
all of the Obligations owed to Agent, Issuing Bank and all Lenders, such
purchaser shall not be entitled to any rights under the Loan Documents unless
and until Borrower or its Affiliates have purchased all of the Obligations.
Section 10.5. Assignments and Participations.
------------------------------
(a) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Loans, its Note, and its Commitment);
provided, however, that
-------- -------
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this
Agreement, any such partial assignment shall be in an amount at least equal
to $10,000,000 or an integral multiple of $5,000,000 in excess thereof;
(iii) each Lender's Percentage Share of the Commitments shall not be
less than the lesser of $10,000,000 or 5% of the aggregate amount of such
Commitments then outstanding;
(iv) each such assignment by a Lender shall be of a constant, and not
varying, percentage of all of its rights and obligations under this
Agreement and the Note; and
(v) the parties to such assignment shall execute and deliver to
Agent for its acceptance (A) an Assignment and Acceptance in the form of
Exhibit F hereto, together with any Note subject to such assignment and a
processing fee of $3,500 and (B) each such assignee shall agree in writing
to be bound to the terms and conditions of that certain Third Amended and
Restated Intercreditor Agreement dated as of September 2,
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1994 by and among Agent, Lenders, CIGNA Group, The Prudential Insurance
Company of America, and other Persons that are or become parties thereto
from time to time as the same may be supplemented, amended or restated from
time to time.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, Agent and
Borrower shall make appropriate arrangements so that, if required, new Notes are
issued to the assignor and the assignee. If the assignee is not incorporated
under the laws of the United States of America or a state thereof, it shall
deliver to Borrower and Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 2.15(d).
(b) Agent shall maintain at its address set forth on its signature page
hereto a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender from time
to time (the "Register"). The entries in the Register shall be conclusive and
--------
binding for all purposes, absent manifest error, and Borrower, Agent and Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit F hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and its Loans); provided, however, that (i) such
-------- -------
participant shall be an Eligible Assignee, (ii) such Lender's obligations under
this Agreement shall remain unchanged, (iii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iv) the participant shall be entitled to the benefit of the yield protection
provisions contained in Article II and the right of set-off contained in Section
7.2, and (v) Borrower shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of Borrower relating to its Loans and its Note and to approve any
amendment, modification, or waiver of any provision of this Agreement (other
than amendments, modifications, or waivers decreasing the amount of principal of
or the rate at which interest is payable on such Loans or Note, extending any
scheduled principal payment date or date fixed for the payment of interest on
such Loans or Note, or extending its Commitment).
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(e) Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time assign and pledge all or any portion of its Loans and its
Note to any Federal Reserve Bank as collateral security pursuant to Regulation A
and any Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Lender from its obligations hereunder.
(f) Any Lender may furnish any information concerning Borrower or any of
its Subsidiaries in the possession of such Lender from time to time to assignees
and participants (including prospective assignees and participants), subject,
however, to the provisions of Section 6.1(c) hereof.
(g) No Lender will request that a rating agency prepare a credit rating for
Borrower without giving prior notice to Borrower.
Section 10.6. Governing Law; Submission to Process. Except to the extent
------------------------------------
that the law of another jurisdiction is expressly elected in a Loan Document,
the Loan Documents shall be deemed contracts and instruments made under the laws
of the State of Texas and shall be construed and enforced in accordance with and
governed by the laws of the State of Texas and the laws of the United States of
America, without regard to principles of conflicts of law. Chapter 15 of Texas
Revised Civil Statutes Annotated Article 5069 (which regulates certain revolving
credit loan accounts and revolving tri-party accounts) does not apply to this
Agreement or to the Notes. Borrower hereby irrevocably submits itself and each
other Related Person to the non-exclusive jurisdiction of the state and federal
courts sitting in the State of Texas and agrees and consents that service of
process may be made upon it or any of the Related Persons in any legal
proceeding relating to the Loan Documents or the Obligations by any means
allowed under Texas or federal law.
Section 10.7. Limitation on Interest. Agent, Issuing Bank, Lenders, the
----------------------
Related Persons and any other parties to the Loan Documents intend to contract
in strict compliance with applicable usury law from time to time in effect. In
furtherance thereof such Persons stipulate and agree that none of the terms and
provisions contained in the Loan Documents shall ever be construed to create a
contract to pay, for the use, forbearance or detention of money, interest in
excess of the maximum amount of interest permitted to be charged by applicable
law from time to time in effect. Neither any Related Person nor any present or
future guarantors, endorsers, or other Persons hereafter becoming liable for
payment of any Obligation shall ever be liable for unearned interest thereon or
shall ever be required to pay interest thereon in excess of the maximum amount
that may be lawfully charged under applicable law from time to time in effect,
and the provisions of this section shall control over all other provisions of
the Loan Documents which may be in conflict or apparent conflict herewith.
Agent, Issuing Bank and Lenders expressly disavow any intention to charge or
collect excessive unearned interest or finance charges in the event the maturity
of any Obligation is accelerated. If (a) the maturity of any Obligation is
accelerated for any reason, (b) any Obligation is prepaid and as a result any
amounts held to constitute interest are determined to be in excess of the legal
maximum, or (c) Agent, Issuing Bank or any Lender or any other holder of any or
all of the Obligations shall
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otherwise collect moneys which are determined to constitute interest which would
otherwise increase the interest on any or all of the Obligations to an amount in
excess of that permitted to be charged by applicable law then in effect, then
all sums determined to constitute interest in excess of such legal limit shall,
without penalty, be promptly applied to reduce the then outstanding principal of
the related Obligations or, at Agent's, Issuing Bank's or such Lender's or
holder's option, promptly returned to Borrower or the other payor thereof upon
such determination. In determining whether or not the interest paid or payable,
under any specific circumstance, exceeds the maximum amount permitted under
applicable law, Agent, Issuing Bank, Lenders and the Related Persons (and any
other payors thereof) shall to the greatest extent permitted under applicable
law, (i) characterize any non-principal payment as an expense, fee or premium
rather than as interest, (ii) exclude voluntary prepayments and the effects
thereof, and (iii) amortize, prorate, allocate, and spread the total amount of
interest throughout the entire contemplated term of the instruments evidencing
the Obligations in accordance with the amounts outstanding from time to time
thereunder and the maximum legal rate of interest from time to time in effect
under applicable law in order to lawfully charge the maximum amount of interest
permitted under applicable law. In the event applicable law provides for an
interest ceiling under Texas Revised Civil Statutes Annotated article 5069-1.04,
that ceiling shall be the indicated rate ceiling and shall be used when
appropriate in determining the Highest Lawful Rate. As used in this section the
term "applicable law" means the laws of the State of Texas or the laws of the
United States of America, whichever laws allow the greater interest, as such
laws now exist or may be changed or amended or come into effect in the future.
Section 10.8. Termination; Limited Survival. In its sole and absolute
-----------------------------
discretion Borrower may at any time that no Obligations are owing elect in a
written notice delivered to Agent to terminate this Agreement. Upon receipt by
Agent of such a notice, if no Obligations are then owing this Agreement and all
other Loan Documents shall thereupon be terminated and the parties thereto
released from all prospective obligations thereunder. Notwithstanding the
foregoing or anything herein to the contrary, any waivers or admissions made by
any Related Person in any Loan Document, any Obligations under Sections 2.10
through 2.14, and any obligations which any Person may have to indemnify or
compensate Agent, Issuing Bank or any Lender shall survive any termination of
this Agreement or any other Loan Document. At the request and expense of
Borrower, Agent shall prepare and execute all necessary instruments to reflect
and effect such termination of the Loan Documents. Agent is hereby authorized
to execute all such instruments on behalf of all Lenders, without the joinder of
or further action by any Lender.
Section 10.9. Severability. If any term or provision of any Loan Document
------------
shall be determined to be illegal or unenforceable all other terms and
provisions of the Loan Documents shall nevertheless remain effective and shall
be enforced to the fullest extent permitted by applicable law.
Section 10.10. Confidentiality. Agent and each Lender (each, a "Lending
--------------- -------
Party") agree to keep confidential any information furnished or made available
-----
to it by Borrower pursuant to this Agreement that is marked confidential;
provided that nothing herein shall prevent any
--------
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Lending Party from disclosing such information (a) to any other Lending Party or
any affiliate of any Lending Party, or any officer, director, employee, agent,
or advisor of any Lending Party or affiliate of any Lending Party, (b) to any
other Person if reasonably incidental to the administration of the credit
facility provided herein, (c) as required by any law, rule, or regulation, (d)
upon the order of any court or administrative agency, (e) upon the request or
demand of any regulatory agency or authority, (f) that is or becomes available
to the public or that is or becomes available to any Lending Party other than as
a result of a disclosure by any Lending Party prohibited by this Agreement, (g)
in connection with any litigation to which such Lending Party or any of its
affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Agreement or any other Loan Document, and (i)
subject to provisions substantially similar to those contained in this Section,
to any actual or proposed participant or assignee.
With respect to clause (a) and (b) of this Section 10.10, the Lending Party
disclosing such confidential information shall advise the Person to whom the
information is disclosed of the confidential nature of such information and that
the Lending Party making such disclosure shall be responsible for any violation
of this Section 10.10 by any such Person, and with respect to clauses (c), (d),
(e) and (g) of this Section 10.10, prior to any such disclosure, the Lending
Party shall (unless such Lending Party is unable because of requirements of law
or the exigency of the request for such disclosure): (i) promptly notify
Borrower thereof; (ii) consult with Borrower on the advisability of taking steps
to resist or narrow such request; and (iii) cooperate with Borrower in any
attempt it may make to obtain a protective order or other appropriate remedy to
assure that confidential treatment will be afforded such confidential
information. In the event such protective order or other appropriate remedy is
not obtained, the Lending Party agrees to furnish only that portion of such
confidential information which the Lending Party is advised by its counsel is
legally required to be disclosed.
Section 10.11. Counterparts. This Agreement may be separately executed in
------------
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same Agreement.
SECTION 10.12. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. EACH OF
--------------------------------------------
BORROWER, ISSUING BANK, AGENT AND LENDERS HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY (A) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED
BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR
ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY; (B) WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (C) CERTIFIES THAT NO
PARTY HERETO NOR ANY
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REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (D) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
Section 10.13. Restatement. This Agreement restates and amends the Existing
-----------
Agreement in its entirety, and all of the terms and provisions hereof shall
supersede the terms and provisions thereof.
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IN WITNESS WHEREOF, this Agreement is executed as of the date first written
above.
WESTERN GAS RESOURCES, INC.
Borrower
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President-Finance
Address:
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Vice President
------------------------
Telephone: 303/▇▇▇-▇▇▇▇
Telecopy: 303/252-3362
NATIONSBANK OF TEXAS, N.A., as
Agent, Issuing Bank and Lender
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
Address:
NationsBank Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ (75202)
Post Office ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇
Attention: Energy Finance Division
-----------------------
Telephone: 214/▇▇▇-▇▇▇▇
Telecopy: 214/508-2881
-▇▇-
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Co-Agent and Lender
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
BANK OF MONTREAL
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director, U.S. Corporate Banking
BOSTON BANK, N.A.
By: /S/ J.R. ▇▇▇▇▇▇, Jr.
----------------------------------------
Name: J.R. ▇▇▇▇▇▇, Jr.
Title: Director
Enerty & Utilities
CREDIT LYONNAIS NEW YORK BRANCH
By: /S/ Pascal Poupelle
---------------------------------------
Name: Pascal Poupelle
Title: Executive Vice President
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CIBC INC.
By: /S/ ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authroized Signatory
COLORADO NATIONAL BANK
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ABN AMRO BANK N.V.
By: /S/ ▇▇▇▇▇ R, ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Group Vice
President and Team Leader
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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