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$82,500,000
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of November 29, 1994
Among
MESA INC.
and
MESA OPERATING CO.
and
THE BANKS NAMED IN THIS CREDIT AGREEMENT
and
SOCIETE GENERALE, SOUTHWEST AGENCY
as Agent
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TABLE OF CONTENTS
Page
ARTICLE I ----
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms............................... 3
Section 1.02. Computation of Time Periods......................... 23
Section 1.03. Accounting Terms; Changes in GAAP................... 23
Section 1.04. Miscellaneous....................................... 23
ARTICLE II
THE ADVANCES AND THE LETTERS OF CREDIT
Section 2.01. The Advances........................................ 24
Section 2.02. Method of Borrowing................................. 24
Section 2.03. Fees................................................ 27
Section 2.04. Reduction of Commitments............................ 27
Section 2.05. Repayment of Advances; Reborrowings................. 28
Section 2.06. Interest on Advances................................ 29
Section 2.07. Prepayments......................................... 31
Section 2.08. Compensation........................................ 32
Section 2.09. Increased Costs..................................... 33
Section 2.10. Payments and Computations........................... 34
Section 2.11. Taxes............................................... 35
Section 2.12. Sharing of Payments, Etc. .......................... 37
Section 2.13. Letters of Credit................................... 38
Section 2.14. The Obligors Jointly and Severally Liable........... 41
Section 2.15. Use of Proceeds..................................... 41
Section 2.16. Interest on Overdue Amounts......................... 41
ARTICLE III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to the Effectiveness of this
Agreement......................................... 42
Section 3.02. Conditions Precedent to Each Borrowing.............. 42
Section 3.03. Conditions Precedent to Certain Borrowings.......... 43
Section 3.04. Conditions Precedent to Letters of Credit........... 44
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Organization, etc. ................................. 45
Section 4.02. Authorization; No Conflict.......................... 45
Section 4.03. Validity and Binding Nature......................... 46
Section 4.04. Financial Statements................................ 46
Section 4.05. Status of Title to Properties....................... 46
Section 4.06. Governmental Approvals.............................. 47
Section 4.07. Pending or Threatened Litigation.................... 47
Section 4.08. Pension Plans....................................... 47
Section 4.09. Investment Company Act.............................. 48
Section 4.10. Public Utility Holding Company Act.................. 48
Section 4.11. True and Complete Disclosure........................ 48
Section 4.12. Defaults............................................ 49
Section 4.13. Investments and Guaranties.......................... 49
Section 4.14. Liabilities......................................... 49
Section 4.15. Permits, Licenses, etc. ............................ 50
Section 4.16. Taxes............................................... 50
Section 4.17. Issuance of Notes................................... 50
Section 4.18. Condition of Property; Casualties................... 51
Section 4.19. Insurance........................................... 51
Section 4.20. Principal Place of Business......................... 51
Section 4.21. Documents........................................... 51
Section 4.22. The Security Documents.............................. 52
Section 4.23. Federal Regulations................................. 52
Section 4.24. Environmental Condition............................. 52
Section 4.25. Senior Debt......................................... 53
Section 4.26. Ownership of HCLP Limited Partnership Interests..... 54
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.01. Financial Statements and Other Information.......... 54
Section 5.02. Compliance with Laws, Etc. ......................... 58
Section 5.03. Maintenance of Insurance............................ 59
Section 5.04. Preservation of Existence, Etc. .................... 59
Section 5.05. Payment of Taxes, Etc. ............................. 59
Section 5.06. Visitation and Discussion........................... 60
Section 5.07. Maintenance of Property............................. 60
Section 5.08. Collateral.......................................... 60
Section 5.09. Title Assurances.................................... 60
Section 5.10. Tangible Equity..................................... 60
Section 5.11. Lock Box Account.................................... 60
Section 5.12. Further Assurances.................................. 60
Section 5.13. HCLP Related Collateral............................. 61
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01. Limitation on Sale or Transfer of Property.......... 61
Section 6.02. Restrictions on Dividends, Distributions
and Redemptions................................... 62
Section 6.03. Restrictions on Investments, Loans or Advances by MI or
Guaranteeing Affiliates........................... 6
Section 6.04. Restrictions on Investments, Loans or Advances by the
Borrower and its Subsidiaries..................... 63
Section 6.05. Limitation on Accommodation Obligations............. 64
Section 6.06. Limitation on Merger and Consolidation.............. 65
Section 6.07. Limitation on Liens................................. 65
Section 6.08. Prohibition Upon Payments on the Subordinated Notes. 67
Section 6.09. Operating Losses.................................... 67
Section 6.10. Limitation on Indebtedness.......................... 68
Section 6.11. Amendments.......................................... 68
Section 6.12. Compliance with ERISA............................... 68
Section 6.13. Other Agreements.................................... 68
Section 6.14. Available Cash...................................... 68
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default................................... 69
Section 7.02. Optional Acceleration............................... 72
Section 7.03. Automatic Acceleration.............................. 72
Section 7.04. Cash Collateral..................................... 73
Section 7.05. Non-exclusivity of Remedies......................... 73
ARTICLE VIII
THE AGENT
Section 8.01. Authorization and Action............................ 74
Section 8.02. Agent's Reliance, Etc. ............................. 74
Section 8.03. Societe Generale and Its Affiliates................. 75
Section 8.04. Bank Credit Decision................................ 75
Section 8.05. Indemnification..................................... 75
Section 8.06. Successor Agent..................................... 76
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Etc. ................................... 76
Section 9.02. Notices, Etc. ...................................... 77
Section 9.03. No Waiver; Remedies................................. 77
Section 9.04. Costs and Expenses.................................. 78
Section 9.05. Right of Set-off.................................... 78
Section 9.06. Binding Effect...................................... 78
Section 9.07. Bank Assignments and Participations................. 79
Section 9.08. Indemnification..................................... 81
Section 9.09. Liability of the Agent as Issuing Bank.............. 83
Section 9.10. Survival of Certain Provisions...................... 84
Section 9.11. Execution in Counterparts........................... 84
Section 9.12. Survival of Representations, etc. .................. 84
Section 9.13. Severability........................................ 84
Section 9.14. Release of Guarantors............................... 84
Section 9.15. Joinder by MI....................................... 85
Section 9.16. Disclosures......................................... 85
Section 9.17. Business Loans...................................... 85
Section 9.18. Usury Not Intended.................................. 85
Section 9.19. Governing Law....................................... 86
Section 9.20. Waivers............................................. 87
EXHIBITS:
Exhibit A - Commitments
Exhibit B - Address Information
Exhibit C - Form of Promissory Note
Exhibit D - Form of Notice of Borrowing
Exhibit E - Form of Request for Letter of Credit
Exhibit F - Form of Guaranty
Exhibit G - [INTENTIONALLY LEFT BLANK]
Exhibit H - [INTENTIONALLY LEFT BLANK]
Exhibit I - [INTENTIONALLY LEFT BLANK]
Exhibit J - Form of Assignment and Acceptance
Exhibit K-1 - Certificate of the Borrower
Exhibit K-2 - Certificate of MI
Exhibit L - [INTENTIONALLY LEFT BLANK]
Exhibit M - Form of Borrower's Counsel Opinion
Exhibit N - Form of Agent's Counsel Opinion
Exhibit O - Subordination Provisions
Exhibit P - Form of Deposit Account Agreement
Exhibit Q - Assignment and Assumption Agreement
Exhibit R - Form of Lockbox Report
Exhibit S - Form of HCLP Partners Agreement
SCHEDULES:
Schedule 1.01(a) - "B" Contract and Related Documents
Schedule 1.01(b) - Existing Letters of Credit
Schedule 1.01(c) - Existing Litigation
Schedule 1.01(d) - Existing West Panhandle Mortgages
Schedule 1.01(e) - Existing Indebtedness
Schedule 1.01(f) - Supply Contract and Related Documents
Schedule 4.01 - Subsidiaries of the Borrower and of MI
Schedule 4.22(a) - Filing Locations for MI Pledge Agreement
Schedule 4.22(b) - Filing Locations for Mortgage
Schedule 4.24(a) - Existing Environmental Concerns
Schedule 4.24(b) - Designated Environmental Sites
Schedule 6.04 - Existing Loans and Advances
Schedule 6.05 - Existing Accommodation Obligations
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This Third Amended and Restated Credit Agreement dated as of November
29, 1994 is among Mesa Inc., a Texas corporation ("MI"), and Mesa Operating
Co., a Delaware corporation ("MOC" being herein sometimes called the
"Borrower" and collectively with MI sometimes called the "Obligors"), the
Banks (as herein defined), and Societe Generale, Southwest Agency, as Agent
for the Banks.
PRELIMINARY STATEMENTS
1. MI is a corporation formed in 1991 which, by transfer and
assignment, owns substantially all of the assets of and assumed
substantially all of the liabilities of Mesa Limited Partnership,
previously a Delaware limited partnership ("MLP"), of which ▇▇▇▇▇▇▇
Operating Company, a Texas corporation ("POC") and ▇▇▇▇▇ ▇▇▇▇▇▇▇
were the sole general partners.
2. MOC is a corporation formed in 1994 which, by merger in accordance
with the Agreement of Merger dated as of January 5, 1994 among MI,
MOLP, and certain other affiliates of MI, owns all of the assets of
and assumed all of the liabilities of Mesa Operating Limited
Partnership, a Delaware limited partnership ("MOLP") of which ▇▇▇▇▇
▇▇▇▇▇▇▇ and POC were the sole general partners.
3. MLP, MOLP, the Banks and the Agent previously entered into a Credit
Agreement dated as of June 3, 1991 ("Original Credit Agreement")
pursuant to which the Banks committed to make Advances to MOLP on
the terms and conditions set forth therein. The initial Borrowing
under the Original Credit Agreement was in the amount of
$100,000,000 and was utilized to repay a portion of the
indebtedness then outstanding under the Former Credit Agreement (as
defined hereafter).
4. The Banks and the Agent previously consented, to the transfer by
MLP of substantially all of its assets and liabilities to MI, and
to MLP's subsequent dissolution (together with related
transactions), all as more fully described in MLP's and MI's Proxy
Statement/Prospectus dated October 11, 1991, as the same was
supplemented by Supplement dated November 8, 1991, on the condition
that (a) MI assumed all of the obligations of MLP under the
Original Credit Agreement and (b) the parties entered into an
agreement to effect certain amendments to the Original Credit
Agreement.
5. In November, 1991, MI became a party to the Original Credit
Agreement in lieu of MLP and the parties amended and restated the
Original Credit Agreement in the form of the Amended and Restated
Credit Agreement dated as of November 15, 1991 among MI, MOLP, the
Banks and the Agent, as subsequently amended by Amendment No. 1
dated as of June 16, 1992 executed by MI, MOLP, the Required Banks
and the Agent (as so amended, the "First Amended and Restated
Credit Agreement").
6. As of May 1, 1993, the parties amended and restated the Amended and
Restated Credit Agreement in the form of the Second Amended and
Restated Credit Agreement dated as of May 1, 1993 among MI, MOLP,
the Banks, and the Agent, as subsequently amended by the First
Amendment Agreement dated as of March 31, 1994 executed by MI, the
Borrower (as successor to MOLP), the Agent and the Banks (as so
amended, the "Second Amended and Restated Credit Agreement").
7. The Banks and the Agent previously consented to the transfer by
MOLP of all of its assets and liabilities to MOC and to MOLP's
subsequent dissolution all as more fully described in the
Assignment and Assumption Agreement (as defined hereafter), on the
condition that MOC assumed all of the obligations of MOLP under the
Second Amended and Restated Credit Agreement.
8. MI and the Borrower have requested that the Banks (i) increase the
aggregate Commitments to $82,500,000 and (ii) make certain other
amendments to the Second Amended and Restated Credit Agreement.
9. In order to effect such further amendments, the parties have agreed
to restate the Second Amended and Restated Credit Agreement in its
entirety, and this Third Amended and Restated Credit Agreement
constitutes for all purposes an amendment to the Original Credit
Agreement, as amended by the Amended and Restated Credit Agreement
and the Second Amended and Restated Credit Agreement, and not a new
or substitute agreement and each reference to an "Advance" herein
shall include each Advance made heretofore under the Original
Credit Agreement, as amended by the Amended and Restated Credit
Agreement and the Second Amended and Restated Credit Agreement, as
well as each Advance made hereafter under this Third Amended and
Restated Credit Agreement.
In consideration of these premises and the mutual covenants and
agreements contained herein, the Obligors, the Banks, and the Agent agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings (unless otherwise
indicated, such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Acceptable Security Interest" in any Property means a Lien (a) which
exists in favor of the Agent for the benefit of the Banks, (b) which is
superior to all other Liens other than Permitted Liens, (c) which secures
the Advances, all other amounts owed by the Obligors under this Agreement
and the other Credit Documents, and all costs, expenses and amounts provided
for in the Security Documents, and (d) which is filed of record or
perfected.
"Accommodation Obligation" means, as to any Person, any obligation,
contingent or otherwise, of such Person entered into for the purpose of
guaranteeing or assuring, or in effect guaranteeing or assuring, any owner
or holder of any Indebtedness of any other Person (the "primary obligor") of
the payment of such Indebtedness or to protect such owner or holder against
loss in respect thereof, whether directly or indirectly, and including,
without duplication and without limiting the generality of the foregoing,
any obligation of such Person, direct or indirect, contingent or otherwise,
for the benefit of any owner or holder of Indebtedness of a primary obligor,
(i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or to purchase (or to advance or supply funds
for the purchase of) any direct or indirect security therefor, (ii) to
purchase property, securities or services for the purpose of assuring any
owner or holder of such Indebtedness of the payment of such Indebtedness, or
(iii) to maintain working capital, equity capital or other financial
statement condition of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or otherwise to protect the owner or holder
thereof against loss in respect thereof; provided that the term
Accommodation Obligation shall not include endorsements for collection or
deposit, in either case, in the ordinary course of business.
"Adjusted Prime Rate" means, for any day, the fluctuating rate per
annum of interest equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Rate plus one half of one percent (1/2%)
in effect on such day.
"Advance" means an advance by a Bank to the Borrower pursuant to
Article II, and refers to a Prime Rate Advance or a Eurodollar Rate Advance.
"Affiliate" of any Person means any trade or business (whether or not
incorporated) which is a member of a group of which such Person is a member
and which is under common control within the meaning of the regulations
under Section 414 of the Code.
"Agent" means Societe Generale, Southwest Agency in its capacity as an
agent pursuant to Article VIII and any successor agent pursuant to Section
8.06.
"Agreement" means this Third Amended and Restated Credit Agreement
dated as of November 29, 1994 among MI, the Borrower, the Banks, and the
Agent, as it may be amended or supplemented from time to time.
"Applicable Lending Office" means, with respect to each Bank, such
Bank's Domestic Lending Office in the case of a Prime Rate Advance, and such
Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means (i) with respect to any Eurodollar Rate
Advance two and one-half percent (2-1/2%) and (ii) with respect to any Prime
Rate Advance, one half of one percent (1/2%).
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Bank and an Eligible Assignee, and accepted by the Agent, in
substantially the form of the attached Exhibit J.
"Assignment and Assumption Agreement" means the Assignment and
Assumption Agreement dated as of January 5, 1994 among MOLP, MOC, MI, and
the Agent and the Banks in the form of Exhibit Q attached hereto.
"Authorized Officer" means (i) with respect to MI, the Chairman, the
President, any Vice President, the Treasurer or the Controller of MI, and
(ii) with respect to the Borrower, the Chairman, the President, any Vice
President, the Treasurer or the Controller of the Borrower.
"Available Cash" means, at any date, the sum of (i) the amount of all
cash, cash equivalents and Permitted Investments of MI and its Subsidiaries
other than HCLP at such date and (ii) Unrestricted Cash of HCLP at such
date.
""B" Contract" means that certain Agreement, dated January 3, 1928,
between Canadian River Gas Company, as Seller, and Amarillo Oil Company, as
Buyer, as heretofore supplemented and amended by the instruments listed in
Schedule 1.01(a) hereto, applicable to said parties' interests in (including
but not limited to, the sale and purchase of) natural gas produced from
certain acreage in the West Panhandle Field of Texas that is required to
supply customers located in the City of Amarillo or its environs in the
State of Texas.
"Banks" means each bank listed on the signature pages of this Agreement
and each Eligible Assignee that shall become a party to this Agreement
pursuant to Section 9.07.
"Borrower" has the meaning set forth in the Preliminary Statements to
this Agreement.
"Borrower Pledge Agreement" means the Amended and Restated Pledge
Agreement dated as of March 2, 1994, executed by the Borrower and the Agent,
as the same may be modified, amended or supplemented from time to time.
"Borrowing" means a borrowing consisting of Advances of the same Type
made by the Banks on the same day ratably according to their respective
Commitments (subject to the last sentence of Section 2.02(d)).
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and Dallas, Texas and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on by banks in the London interbank market.
"Calendar Quarter" means a three-month period ending on the last day
of any March, June, September or December.
"Capital Lease" means, as to any Person, a lease of any property by
that Person as lessee that is, or should be, in accordance with GAAP
(including Financial Accounting Standards Board Statement No. 13, as amended
or superseded from time to time), recorded as a "capital lease" on the
balance sheet of that Person prepared in accordance with GAAP consistently
applied.
"Cash Collateral Account" means a special noninterest bearing cash
collateral account maintained at the Agent's office pursuant to Section
7.04.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, state and local analogs, and all
rules, regulations, and requirements thereunder in each case as now or
hereafter in effect.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Collateral" means the Collateral (as such term is defined in the MI
Pledge Agreement and the Borrower Pledge Agreement, respectively), and the
Mortgaged Property (as defined in the Mortgage).
"Commitment" means, for any Bank at the time any determination thereof
is to be made, the amount of such Bank's commitment hereunder to extend
credit to the Borrower by means of Advances and Letters of Credit, which,
subject to the provisions hereof, shall be the amount set forth opposite the
name of such Bank under the heading "Amount of Commitment" on Exhibit "A"
attached hereto (or, if such Bank has entered into one or more Assignments
and Acceptances, set forth for such Bank in the Register), as such amount is
reduced or terminated pursuant to Section 2.04 or Article VII, and
"Commitments" means the sum of the Commitments for each Bank.
"Consolidated MI" means MI and its Subsidiaries, taken as a whole.
"Control Percentage" means, with respect to any Person, the percentage
of the outstanding capital stock (or other equivalent interests) of such
Person having ordinary voting power which gives the direct or indirect
holder of such stock (or equivalent interests) the power to elect a majority
of the Board of Directors or other Persons performing similar functions (or,
if there are no such directors or Persons, having general voting power) of
such Person.
"Controlled Group" means any entity which, together with the Borrower,
is considered under common control under Sections 414(b), (c), or (m) of the
Code.
"Credit Documents" means this Agreement, the Notes, the Security
Documents, the Guaranties, the Letter of Credit Documents, the Letters of
Credit, and each other agreement, instrument or document executed by MI or
the Borrower or any Guaranteeing Affiliate at any time in connection with
this Agreement.
"Default" means (a) an Event of Default or (b) any event or condition
which with notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
"Default Rate" means for any amount of the Obligations which is not
paid when due, to the fullest extent permitted by law, a rate per annum
equal at all times to the lesser of (a) the Maximum Rate or (b) in the case
"Deposit Account Agreement" means any agreement executed by an Obligor
in the form of Exhibit P attached hereto.
"Dollar Equivalent" means for all purposes of this Agreement, the
equivalent in another currency of an amount in Dollars to be determined by
reference to the rate of exchange quoted by Societe Generale, New York
Branch, in New York City, at 9:00 a.m. (New York City time) on the date of
determination, to prime banks in New York City for the spot purchase in the
New York foreign exchange market of such amount of Dollars with such other
currency.
"Dollars" and "$" means lawful money of the United States of America.
"Domestic Lending Office" means, with respect to any Bank, the office
of such Bank specified as its "Domestic Lending Office" under its name on
Exhibit B or such other office of such Bank as such Bank may from
time-to-time specify to the Obligors and the Agent.
"Effective Date" means the date all of the conditions precedent to
effectiveness of this Agreement set forth in Section 3.01 have been
satisfied, and the Agent shall have confirmed the same in writing to the
Obligors and the Banks.
"Eligible Assignee" means (a) a commercial bank organized under the
laws of the United States, or any State thereof, and having capital and
surplus of not less than $500,000,000 and approved by the Agent, which
approval will not be unreasonably withheld, (b) a commercial bank organized
under the laws of any other country which is a member of the Organization
for Economic Cooperation and Development and having capital and surplus (or
its equivalent) of not less than $500,000,000 (or its Dollar Equivalent) and
approved by the Agent, which approval will not be unreasonably withheld, and
(c) a finance company, insurance company, other financial institution or
fund which is regularly engaged in making or purchasing loans and which
finance company, insurance company, or fund is approved (i) by the Agent,
which approval will not be unreasonably withheld and (ii) by the Borrower,
which approval will not be unreasonably withheld, until the occurrence of an
Event of Default pursuant to either Section 7.01(e) or (i), in which case no
approval by the Borrower shall be required.
"Environment" or "Environmental" shall have the meanings set forth in
any applicable Environmental Law.
"Environmental Claim" means any third party (including without
limitation employees and Governmental Authorities) action, lawsuit, claim,
demand, regulatory action or proceeding, order, decree, consent agreement or
notice of potential or actual responsibility or violation (including claims
or proceedings under the Occupational or Mine Safety and Health Acts or
similar laws or requirements relating to health or safety of employees)
which may result in the imposition of liability under any Environmental Law.
"Environmental Law" means all Legal Requirements, arising from,
relating to, or in connection with the Environment, including without
limitation CERCLA, RCRA, OPA and SDWA, and others relating to (a) pollution,
contamination, injury, destruction, loss, protection, cleanup, reclamation
or restoration of the air, surface water, groundwater, land surface or
subsurface strata, or other natural resources; (b) solid, gaseous or liquid
waste generation, treatment, processing, recycling, reclamation, cleanup,
storage, disposal or transportation; (c) exposure to pollutants,
contaminants, hazardous or toxic substances, materials or wastes; (d) the
manufacture, processing, handling, transportation, distribution in commerce,
use, storage or disposal of hazardous or toxic substances, materials or
wastes; or (e) environmental requirements associated with the exploration,
development or production of crude oil, natural gas, coal or other
Hydrocarbons or minerals.
"Environmental Permit" means any permit, license, order, approval or
other authorization under Environmental Law, including without limitation
schedules of compliance and plans for operating, monitoring, assessment,
closure, corrective action, reclamation, plugging and abandonment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board (or any successor), as in effect
from time to time.
"Eurodollar Lending Office" means, with respect to any Bank, the office
of such Bank specified as its "Eurodollar Lending Office" under its name on
Exhibit B (or, if no such office is specified, its Domestic Lending Office)
or such other office of such Bank as such Bank may from time to time specify
to the Obligors and the Agent.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing, an interest rate per
annum determined by the Agent equal to (rounded upward to the nearest whole
multiple of 1/16 of 1% per annum) the rate per annum at which deposits in
Dollars are offered by Societe Generale's London Branch in London, England
to prime banks in the London interbank market at 11:00 a.m. (London time)
two (2) Business Days before the first day of such Interest Period in an
amount substantially equal to the Eurodollar Rate Advance of Societe
Generale, Southwest Agency comprising part of such Borrowing and for a
period equal to such Interest Period.
"Eurodollar Rate Advance" means an Advance which bears interest as
provided in Section 2.06(b).
"Eurodollar Rate Reserve Percentage" of any Bank for the Interest
Period for any Eurodollar Rate Advance means the reserve percentage
applicable during such Interest Period (or if more than one such percentage
shall be so applicable, the daily average of such percentages for those days
in such Interest Period during which any such percentage shall be so
applicable) under regulations issued from time to time by the Federal
Reserve Board for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for such Bank with respect to liabilities or assets consisting
of or including Eurocurrency Liabilities having a term equal to such
Interest Period.
"Events of Default" has the meaning specified in Section 7.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
and from time to time in effect.
"Existing West Panhandle Mortgages" means the mortgages executed by the
Borrower and described and filed as set forth on Schedule 1.01(d).
"Expiration Date" means, with respect to any Letter of Credit, the date
on which such Letter of Credit will expire or terminate in accordance with
its terms.
"Exploration Costs" means the costs of unsuccessful exploratory ▇▇▇▇▇
(dry hole costs), periodic lease impairment and all other exploratory costs
including geological and geophysical costs and delay rentals which are
expenses in accordance with GAAP under the successful efforts method of
accounting.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average of the
quotations for any such day on such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any of its successors.
"Financial Statements" means the consolidated balance sheet of MI and
its Subsidiaries and the related consolidated statements of income,
reinvested earnings and changes in financial position dated December 31,
1993 referred to in Section 4.04, copies of which have been delivered to the
Agent and the Banks.
"First Amended and Restated Credit Agreement" shall have the meaning
set forth in the Preliminary Statements to this Agreement.
"Former Credit Agreement" means the Revolving Credit Agreement dated as
of July 28, 1988, as amended, among MLP, MOLP, the Lenders (as defined in
such Revolving Credit Agreement), TCB, as Agent and TCB, as Collateral
Agent, which agreement terminated on June 12, 1991.
"Fund," "Trust Fund," or "Superfund" means the Hazardous Substance
Response Trust Fund, established pursuant to 42 U.S.C. Sec. 9631 (1982) and
the Post-closure Liability Trust Fund, established pursuant to 42 U.S.C.
Sec.9641 (1982), which statutory provisions have been amended or repealed by
▇▇▇▇, and the "Fund," "Trust Fund," or "Superfund" are now maintained
pursuant to Sec. 9507 of the Code.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time, applied on a basis consistent with the
requirements of Section 1.03.
"Governmental Authority" means any foreign governmental authority, the
United States of America, any state of the United States of America and any
subdivision of any of the foregoing, and any agency, department, commission,
board, authority or instrumentality, bureau or court having jurisdiction
over any Bank, the Borrower, MI, or any of their respective Subsidiaries,
assets or properties.
"Governmental Proceedings" means any action or proceedings by or
before any Governmental Authority, including, without limitation, the
promulgation, enactment or entry of any Legal Requirement.
"Guaranteeing Affiliate" means any Wholly-Owned Subsidiary of MI which
is required to execute and deliver a Guaranty pursuant to Section 6.03.
"Guaranty" means any guarantee, and collectively all guarantees,
substantially in the form of Exhibit F hereto, of the indebtedness of the
Borrower and MI under this Agreement required of any Guaranteeing Affiliate
pursuant to Section 6.03.
"Gulf Coast Production Payment" means any dollar denominated production
payment obligations recorded as liabilities in accordance with GAAP and any
volumetric production payment obligations recorded as deferred revenue in
accordance with GAAP, in each case together with all undertakings and
obligations in connection therewith not to exceed in the aggregate the sum
of $25,000,000, provided that such production payment obligations relate to
Oil and Gas Properties of MI, the Borrower or any of its Subsidiaries
located on the offshore and coastal onshore regions of the Gulf of Mexico.
"Hazardous Substance" means the substances identified as such pursuant
to CERCLA, and those regulated under any other Environmental Law, including
without limitation hazardous waste, pollutants, contaminants, petroleum,
petroleum products, radionuclides, radioactive materials (naturally
occurring or otherwise), brine and brine solutions, and wastes from the
exploration, development or production of crude oil, natural gas, coal or
other Hydrocarbons or minerals.
"HCLP" means Hugoton Capital Limited Partnership, a Delaware limited
partnership of which MOC and Mesa Holding are the limited partners and
Hugoton Management Company, a Texas corporation owned by MI, is the general
partner.
"HCLP Partners Agreement" means that certain agreement among the
partners of HCLP dated as of the date hereof and in the form of Exhibit S
attached hereto.
"HCLP Partnership Interests" means limited partnership interests in
HCLP which are owned by the Borrower or any other Subsidiary of MI.
"HCLP Secured Notes" means notes of HCLP in an aggregate principal
amount equal to $520,180,000 outstanding as of September 30, 1994.
"Honor Date" has the meaning given to such term in Section 2.13(c)
hereof.
"Hugoton Properties" means all of the natural gas interests and
reserves owned by HCLP in what is known as the Hugoton Field in southwest
Kansas, including without limitation any gathering and compression systems
and gas processing plants and associated operating agreements and sales
contracts.
"Hydrocarbons" means oil, gas, and other liquid or gaseous
hydrocarbons.
"Indebtedness" means, as to any Person, (a) all indebtedness of such
Person for borrowed money, (b) that portion of the obligations of such
Person under Capital Leases which is properly recorded as a liability on a
balance sheet of that Person prepared in accordance with GAAP, (c) any
obligation of such Person that is evidenced by a promissory note, bond,
debenture or other instrument representing an extension of credit to such
Person, whether or not for borrowed money, (d) any obligation of such Person
for the deferred purchase price of Property or services, (e) all
indebtedness of such Person that is secured by a Lien on assets of such
Person, whether or not that Person has assumed such obligation or whether or
not such obligation is nonrecourse to the credit of such Person, but only to
the extent of the lesser of (i) the fair market value of the assets so
subject to the Lien and (ii) the amount of the secured indebtedness, (f)
obligations of such Person arising under acceptance facilities or under
facilities for the sale of accounts receivable at a discount of such Person,
(g) obligations of such Person for unreimbursed draws or payment obligations
under letters of credit, guarantees or surety bonds, but only to the extent
of such unreimbursed draws or payment obligations issued for the account of
such Person, and (h) liabilities in respect of unfunded vested benefits
under Plans to the extent shown as a liability on a balance sheet of such
Person which has been prepared in accordance with GAAP.
"Indentures" means, collectively, the Unsecured Indenture, the Secured
Indenture and the 13-1/2% Indenture.
"13-1/2% Indenture" means the Indenture dated as of May 1, 1989 among
MI (as successor to MLP), the Borrower (as successor to MOLP), Mesa Capital
and the 13-1/2% Indenture Trustee relating to the 13-1/2% Notes, as amended
and supplemented by a First Supplemental Indenture dated as of December 31,
1991, and a Second Supplemental Indenture dated as of April 30, 1992, a
Third Supplemental Indenture dated as of January 5, 1994 as further amended
or supplemented from time to time in accordance with its terms.
"13-1/2% Indenture Trustee" means TCB, as Trustee under the 13-1/2%
Indenture, or any successor thereto in such capacity.
"Initial Reserve Report" means the Reserve Report dated December 31,
1993 prepared by ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇ and previously delivered to the
Banks.
"Intercreditor Agreement" means the Intercreditor Agreement dated as of
May 1, 1993 among the Agent, the Secured Trustee and the Unsecured Indenture
Trustee, as it may be amended from time to time in accordance with its
terms.
"Interest Period" means, for each Advance comprising part of the same
Borrowing, the period commencing on the date of such Advance and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be (a) in
the case of a Prime Rate Advance, a period of time commencing on the date
such Prime Rate Advance is made and ending on the last day of each March,
June, September or December, whichever occurs first; and (b) in the case of
a Eurodollar Rate Advance, a period of time commencing on the date such
Eurodollar Rate Advance is made and ending on the day which is one (1), two
(2), three (3), six (6) months, or, subject to availability as determined by
the Agent, twelve (12) months thereafter, in each case as the Borrower may
select, upon notice received by the Agent not later than 10:00 a.m. (Dallas,
Texas time) on the Business Day prior to the first day of such Interest
Period, in the case of any Prime Rate Advance, and on the third Business Day
prior to the first day of such Interest Period, in the case of any
Eurodollar Rate Advance, provided, however, that:
(i) Interest Periods commencing on the same date for Advances
comprising part of the same Borrowing shall be of the same duration;
provided, however, that there may be more than one Borrowing on the
same day;
(ii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
except that in the case of any Interest Period for a Eurodollar Rate
Advance, if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding Business Day;
(iii) in the case of any Eurodollar Rate Advance, any Interest
Period which begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the
last Business Day of the calendar month in which it would have ended if
there were a numerically corresponding day in such calendar month; and
(iv) any Interest Period that would otherwise end after the
Maturity Date shall end on the Maturity Date.
"LC Obligation" has the meaning given to such term in Section 2.13(c)
hereof.
"Legal Requirement" means any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or official interpretation
of any of the foregoing) of, and the terms of any license or permit issued
by, any Governmental Authority, including, but not limited to, Regulation U
and Regulation X.
"Letter of Credit" means, individually, any letter of credit issued by
the Agent which is subject to this Agreement, and "Letters of Credit" means
all such letters of credit collectively.
"Letter of Credit Documents" means, with respect to any Letter of
Credit, such Letter of Credit and any applications, agreements, documents,
and instruments entered into in connection with or relating to such Letter
of Credit.
"Letter of Credit Exposure" means, at any time, the sum of (a) the
aggregate undrawn maximum face amount of each Letter of Credit at such time
and (b) the aggregate unpaid amount of all LC Obligations at such time.
"Lien" means any mortgage, lien, pledge, charge, deed of trust,
security interest, encumbrance or other type of arrangement to secure or
provide for the payment of any obligation of any Person, whether arising by
contract, operation of law or otherwise (including, without limitation, the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement).
"Majority Banks" means, at any time, Banks (which must include the
Agent) holding at least 51% of the then aggregate unpaid principal amount of
the Notes held by the Banks at such time, or, if no such principal amount is
then outstanding, Banks (which must include the Agent) having at least 51%
of the aggregate amount of the Commitments at such time.
"Margin Debt" means Indebtedness secured by Margin Stock to the extent
permissible under the regulations of the Federal Reserve Board.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U.
"Material Adverse Change" shall mean (a) a material adverse change in
the business, financial condition, or results of operations of either MI or
the Borrower, or of the Borrower and its Subsidiaries taken as a whole, or
of MI and its Subsidiaries taken as a whole, in each case since the date of
the Financial Statements, or (b) the occurrence of any event or circumstance
which could reasonably be expected to have a material adverse effect on
either Obligor's ability to perform its obligations under this Agreement,
any Note or any other Credit Document; provided that no decrease in Tangible
Adjusted Equity or Available Cash of the Obligors shall constitute a
Material Adverse Change if such decrease does not result in a default under
Section 5.10 or 6.14, respectively, hereof, and no such increase in
Indebtedness shall constitute a Material Adverse Change if such increase
does not result in a default under Section 6.10 hereof.
"Maturity Date" means the earlier of (a) June 23, 1997 or (b) the
termination in whole of the Commitments pursuant to Section 2.04 or Article
VII.
"Maximum Rate" means the maximum nonusurious interest rate under
applicable law.
"Mesa Capital" means Mesa Capital Corporation, a Delaware corporation
and a Wholly-Owned Subsidiary of the Borrower.
"Mesa Holding" means Mesa Holding Co., a Delaware corporation
(successor by merger of Mesa Holding Limited Partnership and Mesa
Midcontinent Limited Partnership, each formerly a Delaware limited
partnership), and a Wholly-Owned Subsidiary of MI.
"MI Pledge Agreement" means the Third Amended and Restated Pledge
Agreement dated as of November 29, 1994, as same may be modified, amended or
supplemented from time to time, executed by MI and the Agent.
"MLP" means Mesa Limited Partnership, formerly a Delaware limited
partnership.
"Mortgage" means the Deed of Trust, Assignment of Production, and
Financing Statement dated as of June 3, 1991 executed by MOLP for the
benefit of the Agent, as amended by the First Amendment to Deed of Trust,
Assignment of Production, Security Agreement and Financing Statement dated
as of December 31, 1991 and the Second Amendment to Deed of Trust,
Assignment of Production, Security Agreement and Financing Statement dated
as of May 1, 1993, as the same may be further amended or modified from time
to time and in effect.
"Mortgaged Property" means all of the properties, rights and interests
described in II of the Mortgage, together with any additions thereto
which may be subjected to the Lien of the Mortgage.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA.
"Note" means a promissory note of the Obligors payable to the order of
any Bank, in substantially the form of the attached Exhibit C, evidencing
the aggregate indebtedness of the Obligors to such Bank resulting from the
Advances made by such Bank to the Borrower.
"13-1/2% Notes" means the 13-1/2% subordinated notes in the aggregate
principal amount of up to $300,000,000 due May 1, 1999 and issued by MOLP,
MI (as successor to MLP) and Mesa Capital pursuant to the 13-1/2% Indenture
together with any replacement notes therefor issued pursuant to the 13-1/2%
Indenture.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Obligations" means all Advances, all LC Obligations and all other
amounts payable by either or both of the Obligors to the Banks or the Agent
hereunder and under the other Credit Documents.
"Oil and Gas Properties" means with respect to any Person all oil, gas
and mineral leasehold and fee interests, all overriding royalty interests,
mineral interests, royalty interests, net profits interests, oil payments,
production payments, carried interests and any and all other interests in
Hydrocarbons, as well as the "B" Contract and the Supply Contract, whether
any of the same be real or personal property, now owned or hereafter
acquired by such Person directly or indirectly.
"OPA" means the Oil Pollution Act of 1990, as amended, state and local
analogs, and all rules, regulations and requirements thereunder, in each
case as now or hereafter in effect.
"Participant" has the meaning set forth in Section 9.07(e).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Indebtedness" means (i) presently existing Indebtedness as
set forth in Schedule 1.01(e) hereto, (ii) Indebtedness (including
reimbursement obligations arising under the Letter of Credit Documents)
arising under this Agreement, (iii) Indebtedness evidenced by the
Subordinated Notes, (iv) intercompany Indebtedness not prohibited by
Sections 6.03 and 6.04, (v) current accounts payable and expense accruals
arising in the ordinary course of business provided such accounts payable
have not remained unpaid for a period of one hundred twenty (120) days after
the same became due unless currently being contested in good faith by
appropriate proceedings; (vi) Margin Debt of MI or any Subsidiary of MI not
to exceed $20,000,000 in aggregate principal amount at any one time
outstanding; and (vii) renewals, extensions and refinancings of the
foregoing Permitted Indebtedness on terms that taken as a whole are
substantially similar to, or more favorable from the standpoint of MI, than
the terms taken as a whole of the Indebtedness refinanced, provided that the
principal amount or accreted value at the time of issuance of such
Indebtedness is not increased, and provided further that with respect to any
refinancing of any Subordinated Notes, the subordination terms are the same
as those of the Subordinated Notes refinanced or otherwise acceptable to the
Majority Banks.
"Permitted Investments" means (a) direct obligations of, or obligations
the principal of and interest on which are unconditionally guaranteed by,
the United States; (b) (i) negotiable or non-negotiable certificates of
deposit, time deposits, or other similar banking arrangements maturing
within 180 days from the date of acquisition thereof ("bank debt
securities"), issued by (A) any Bank or Subsidiary thereof or (B) any other
bank or trust company or Subsidiary thereof, which has a combined capital,
surplus and undivided profit of not less than $500,000,000 or the foreign
currency equivalent thereof, if at the time of deposit or purchase, such
bank debt securities are rated not less than "A" (or the then equivalent) by
the rating service of Standard & Poor's Ratings Group or of ▇▇▇▇▇'▇
Investors Service, and (ii) commercial paper issued by (A) any Bank or
Subsidiary thereof or (B) any other Person if at the time of purchase such
commercial paper is rated not less than "A-2" (or the then equivalent) by
the rating service of Standard & Poor's Ratings Group or not less than "P-2"
(or the then equivalent) by the rating service of ▇▇▇▇▇'▇ Investors Service,
or upon the discontinuance of both of such services, such other nationally
recognized rating service or services, as the case may be, as shall be
selected by the Borrower with the consent of the Required Banks; (c)
repurchase agreements relating to investments described in clauses (a) and
(b) above with a market value at least equal to the consideration paid in
connection therewith, with any Person who regularly engages in the business
of entering into repurchase agreements and has a combined capital, surplus
and undivided profit of not less than $500,000,000 or the foreign currency
equivalent thereof, if at the time of entering into such agreement the debt
securities of such Person are rated not less than "A" (or the then
equivalent) by the rating service of Standard & Poor's Ratings Group or of
▇▇▇▇▇'▇ Investors Service; (d) participations (purchased from any Bank
without recourse to the selling Bank as a part of an established investment
program of such Bank pursuant to which it regularly sells participations to
other Persons for short term investment) in unsecured debt (not to include
debt of any Person in excess of $10,000,000) of major corporate customers
(whose debt instruments are, without support from the joint or guaranty
liability of any other Person, rated "investment grade") of such Bank,
bearing interest at or below the prime rate or similar rate of such Bank and
having a maturity not later than ninety (90) days from the date of purchase
thereof; (e) Securities listed on any national securities exchange or quoted
by NASDAQ provided that such Securities shall constitute less than 5% of any
class or series of Securities issued by any one issuer; (f) such other
investments of similar quality as clauses (a) through (d) above as shall be
approved by the Agent in writing with notice to the Banks; and (g) amounts
on deposit in margin accounts relating to futures contracts not to exceed
the amount permitted pursuant to Section 4.19 of the Secured Indenture in
effect as of the date hereof.
"Permitted Liens" means the Liens permitted to exist pursuant to
Section 6.07.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture or other entity, or a Governmental Authority or any trustee,
receiver, custodian or similar official.
"Plan" means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Borrower or MLP or any member of the
Controlled Group and covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code.
"POC" has the meaning set forth in the introduction to this Agreement.
"Prime Rate" means a fluctuating interest rate per annum as shall be in
effect from time-to-time equal to the rate of interest publicly announced by
Societe Generale, New York Branch as its prime rate, whether or not the
Borrower or MI has notice thereof.
"Prime Rate Advance" means an Advance which bears interest as provided
in Section 2.06(a).
"Property," of any Person, means any property or assets (whether real,
personal, or mixed, tangible or intangible) of such Person.
"Proved Reserves" shall mean those Hydrocarbon reserves that have been
proved to a high degree of certainty by analysis of the producing history of
a reservoir and/or by volumetric analysis of adequate geologic and
engineering data where commercial productivity has been established by
actual production, by successful testing, or in certain cases by favorable
core analyses and electric log interpretations when the producing
characteristics of the formation are known from nearby fields and where,
volumetrically, the structure, areal extent, volume and characteristics of
the reservoir are well defined by a reasonable interpretation of adequate
subsurface well control and by known continuity of hydrocarbon-saturated
material above known fluid contacts, if any, or about the lowest known
structural occurrence of Hydrocarbons.
"Pro Rata Share" means, with respect to any Bank, either (a) the ratio
(expressed as a percentage) of such Bank's Commitment at such time to the
aggregate Commitments at such time, or (b) if the Commitments have been
terminated, the ratio (expressed as a percentage) of such Bank's aggregate
outstanding Advances and ratable share of Letter of Credit Exposure at such
time to the aggregate outstanding Advances and Letter of Credit Exposure of
all the Banks at such time.
"RCRA" means the Resource Conservation and Recovery Act of 1976, as
amended, state and local analogs, and all rules, regulations, and
requirements thereunder, in each case as now or hereafter in effect.
"Register" has the meaning set forth in paragraph (c) of Section 9.07.
"Regulation U" means Regulation U of the Federal Reserve Board, as the
same is from time-to-time in effect, and all official rulings and
interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Federal Reserve Board, as the
same is from time-to-time in effect, and all official rulings and
interpretations thereunder or thereof.
"Release" shall have the meaning set forth in CERCLA or under any other
Environmental Law.
"Reportable Event" means any of the events set forth in Section 4043(b)
of ERISA, for which reporting has not been waived by applicable rule or
regulation.
"Request for Letter of Credit" has the meaning specified in Section
2.13(a).
"Required Banks" means, at any time, Banks holding at least 66-2/3% of
the then aggregate unpaid principal amount of the Notes held by the Banks at
such time, or, if no such principal amount is then outstanding, Banks having
at least 66-2/3% of the aggregate amount of the Commitments at such time.
"Reserve Report" has the meaning given in Section 5.01(i) hereof.
"Response" shall have the meaning set forth in CERCLA or under any
other Environmental Law.
"SDWA" means the Safe Drinking Water Act, as amended, state and local
analogs, and all rules, regulations and requirements thereunder, in each
case as now or hereafter in effect.
"Second Amended and Restated Credit Agreement" shall have the meaning
set forth in the Preliminary Statements to this Agreement.
"Secured Indenture" means the Indenture dated as of May 1, 1993 among
MI, MOLP and Mesa Capital, as issuers, and the Secured Trustee, as amended
by the First Supplemental Indenture dated as of January 5, 1994 among MI,
MOC (as successor to MOLP), Mesa Capital and the Secured Trustee, and
relating to the Secured Notes, as further amended and supplemented from time
to time in accordance with its terms.
"Secured Notes" means the 12-3/4% Secured Discount Notes due June 30,
1998 issued pursuant to the Secured Indenture, together with any replacement
notes therefor issued pursuant to the Secured Indenture.
"Secured Trustee" means ▇▇▇▇▇▇ Trust and Savings Bank, an Illinois
banking corporation, in its capacity as trustee under the Secured Indenture,
or any successor thereto in such capacity.
"Securities" has the meaning ascribed to the term "Security" in the
Exchange Act.
"Security Documents" means (a) the Deposit Account Agreement, the
Mortgage, the MI Pledge Agreement and the Borrower Pledge Agreement; (b)
each other agreement, instrument, or document executed at any time in
connection with the Deposit Account Agreement, the Mortgage, the MI Pledge
Agreement and the Borrower Pledge Agreement; (c) the HCLP Partners
Agreement; and (d) each other agreement, instrument or document executed at
any time in connection with securing the Obligations.
"Significant Guaranteeing Affiliate" means any Guaranteeing Affiliate
with an obligation under its Guaranty in an amount exceeding $5,000,000.
"Special Reserve Value Computation" means, at any date, the present
value of the estimated future net cash flows from production of Proved
Reserves, before income taxes, discounted at 10% and determined as of the
most recently available December 31 Reserve Report in accordance with
guidelines in effect as of the date of this Agreement promulgated by the
Securities and Exchange Commission, except that the initial hydrocarbon
sales prices to be used at such December 31 shall be the average actual
prices realized during the year ended on such December 31, and such initial
prices shall be escalated thereafter at (i) in the case of the December 31,
1994 Reserve Report, 4% per year and (ii) in the case of the Reserve Report
at December 31, 1995 and 1996, an amount to be selected by the Agent in its
reasonable discretion which shall not be less than 0% nor more than 10% per
year, in each case compounded annually.
"Subordinated Notes" means collectively the Secured Notes, the
Unsecured Notes, and the 13-1/2% Notes.
"Subsidiary" of a Person means any corporation, association,
partnership or other business entity of which more than 50% of the
outstanding shares of capital stock (or other equivalent interests) having
by the terms thereof ordinary voting power under ordinary circumstances to
elect a majority of the board of directors or Persons performing similar
functions (or, if there are no such directors or Persons, having general
voting power) of such entity (irrespective of whether at the time capital
stock (or other equivalent interests) of any other class or classes of such
entity shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned or controlled by
such Person, by such Person and one or more Subsidiaries of such Person or
by one or more Subsidiaries of such Person.
"Supply Contract" means collectively, those instruments identified on
Schedule 1.01(f) hereto, as heretofore supplemented and amended by the
instruments listed in Schedule 1.01(f).
"Tangible Adjusted Equity" means, as of any date, the excess, if any,
of the assets of MI and its Subsidiaries on a consolidated basis over the
liabilities of MI and its Subsidiaries on a consolidated basis, each to be
determined in accordance with GAAP consistently applied; provided, however,
that for purposes of any such Tangible Adjusted Equity, (i) such Tangible
Adjusted Equity shall be adjusted as required by valuing the oil and gas
reserves owned by MI and its Subsidiaries at the greater of (a) book value
(determined in accordance with GAAP consistently applied) and (b) the
Special Reserve Value Computation, and (ii) "assets" shall not include
goodwill, patents, patent applications, trademarks, trade names, copyrights,
franchises, licenses and rights in any thereof, and other similar assets
which would be classified as intangible assets under GAAP consistently
applied.
"Taxes" has the meaning set forth in Section 2.11(a) hereof.
"TCB" means Texas Commerce Bank National Association, a national
banking association.
"Termination Event" shall mean (i) a Reportable Event with respect to a
Plan, or (ii) any prohibited transaction, as that term is defined in Section
4975 of the Code, or (iii) the withdrawal of the Borrower or MI or any
member of the Controlled Group from a Plan during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(iv) the filing of a notice of intent to terminate a Plan or the treatment
of a Plan amendment as a termination under Section 4041 of ERISA, or (v) the
institution of proceedings to terminate a Plan by the PBGC, or (vi) 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 Plan.
"Type" means, with respect to an Advance, a Prime Rate Advance or a
Eurodollar Advance.
"Unrestricted Cash of HCLP" means, at the end of any period, the amount
of cash at HCLP that is permitted by the terms of the mortgage securing the
HCLP Secured Notes to be distributed by HCLP free of the lien of such
mortgage.
"Unsecured Indenture" means the Indenture dated as of May 1, 1993 among
MI, MOLP and Mesa Capital, as issuers, and the Unsecured Indenture Trustee
as amended by the First Supplemental Indenture dated as of January 5, 1994
among MI, MOC (as successor to MOLP), Mesa Capital and the Unsecured
Indenture Trustee and relating to the Unsecured Notes, as amended and
supplemented from time to time in accordance with its terms.
"Unsecured Indenture Trustee" means American Stock Transfer & Trust
Company, as Trustee under the Unsecured Indenture, or any successor thereto
in such capacity.
"Unsecured Notes" means the 12-3/4% Discount Notes due June 30, 1996
issued pursuant to the Unsecured Indenture together with any replacement
notes therefor issued pursuant to the Unsecured Indenture.
"Wholly-Owned Subsidiary" means, with respect to any Person, (a) each
corporation all of the issued and outstanding capital stock (other than
director's qualifying shares, or shares otherwise held by directors of such
corporation in nominal amounts to comply with applicable local laws, or
shares which are held by officers, directors or employees issued pursuant to
stock option plans adopted by such corporation) of which is owned, directly
or indirectly, by such Person; (b) each non-corporate entity (other than a
limited partnership) all of the equity interest of which is owned directly
or indirectly by such Person; and (c) each limited partnership at least 90%
of the interest in total equity and income of which is allocated to limited
partners' units and owned directly or indirectly by such Person as a limited
partner and each general partner of which is an entity controlled or owned
by MI.
Section 1.02. Computation of Time Periods. In this Agreement, in
the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding".
Section 1.03. Accounting Terms; Changes in GAAP. All accounting
terms not specifically defined in this Agreement shall be construed in
accordance with GAAP applied on a consistent basis with those applied in the
preparation of the Financial Statements.
Section 1.04. Miscellaneous.
(a) Article, Section, Schedule and Exhibit references are to Articles
and Sections of and Schedules and Exhibits to this Agreement, unless
otherwise specified.
(b) Unless otherwise defined in this Agreement, each of the terms
defined in the first sentence of this Agreement shall have the meanings
assigned to those terms in the first sentence of this Agreement.
ARTICLE II
THE ADVANCES AND THE LETTERS OF CREDIT
Section 2.01. The Advances. Each Bank severally agrees, subject
to the terms and conditions set forth in this Agreement, to make Advances to
the Borrower from time-to-time on any Business Day during the period from
the date of this Agreement until the Maturity Date in an aggregate amount
not to exceed at any time outstanding such Bank's Commitment less such
Bank's Pro Rata Share of the Letter of Credit Exposure. Each Borrowing
shall consist of Advances of the same Type; provided, however that no
Eurodollar Rate Advances will be made at any time a Default has occurred and
is continuing. Each Borrowing shall be in an aggregate amount of not less
than $10,000,000, or an integral multiple of $10,000,000. Within the
foregoing limits, the Borrower may borrow, repay pursuant to Section 2.05 or
prepay pursuant to Section 2.08 and reborrow under this Section 2.01.
Section 2.02. Method of Borrowing.
(a) Notice. Each Borrowing shall be made on notice, given not
later than 1:00 p.m. (Dallas, Texas time) (i) on the third Business Day
before the date of the proposed Borrowing, in the case of a Eurodollar Rate
Advance, or (ii) on the Business Day before the date of the proposed
Borrowing, in the case of a Prime Rate Advance, by the Borrower to the
Agent, which shall give to each Bank prompt notice of such notice by
telecopier or telex. Each notice of a Borrowing (a "Notice of Borrowing")
shall be by telecopier or telex, confirmed immediately in writing, in
substantially the form of the attached Exhibit D, specifying the requested
(i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing,
(iii) aggregate amount of such Borrowing, and (iv) Interest Period for each
such Advance. In the case of a proposed Borrowing comprised of Eurodollar
Rate Advances, the Agent shall promptly notify the Borrower and each Bank of
the applicable interest rate under Section 2.06(b). Each Bank shall, before
10:00 a.m. (Dallas, Texas time) on the date of such Borrowing, make
available for the account of its Applicable Lending Office to the Agent at
its address referred to in Section 10.02, or such other location as the
Agent may specify by notice to the Banks, in same day funds, such Bank's Pro
Rata Share of such Borrowing. After the Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Agent will make such funds available to the Borrower as the Borrower shall
direct to the Agent from time to time.
(b) Certain Limitations. Anything in paragraph (a) above to the
contrary notwithstanding:
(i) at no time shall there be more than four (4) Interest
Periods applicable to outstanding Eurodollar Rate
Advances and more than one Interest Period applicable to
outstanding Prime Rate Advances;
(ii) if any Bank shall, at least one Business Day before the
date of any requested Borrowing, notify the Agent that
the introduction of or any change in or in the
interpretation of any law or regulation makes it
unlawful, or that any central bank or other governmental
authority asserts that it is unlawful, for such Bank or
its Eurodollar Lending Office to perform its obligations
under this Agreement to make Eurodollar Rate Advances or
to fund or maintain Eurodollar Rate Advances, the right
of the Borrower to select Eurodollar Rate Advances for
such Borrowing or for any subsequent Borrowing shall be
suspended until such Bank shall notify the Agent that
the circumstances causing such suspension no longer
exist, and each Advance comprising such Borrowing shall
be a Prime Rate Advance;
(iii) if the Agent is unable to determine the Eurodollar Rate
for Eurodollar Rate Advances comprising any requested
Borrowing, the right of the Borrower to select
Eurodollar Rate Advances for such Borrowing or for any
subsequent Borrowing shall be suspended until the Agent
shall notify the Borrower and the Banks that the
circumstances causing such suspension no longer exist,
and each Advance comprising such Borrowing shall be a
Prime Rate Advance;
(iv) if the Required Banks shall, at least one Business Day
before the date of any requested Borrowing, notify the
Agent that the Eurodollar Rate for Eurodollar Rate
Advances comprising such Borrowing will not adequately
reflect the cost to such Banks of making or funding
their respective Eurodollar Rate Advances, as the case
may be, for such Borrowing, the right of the Borrower to
select Eurodollar Rate Advances for such Borrowing or
for any subsequent Borrowing shall be suspended until
the Agent shall notify the Borrower and the Banks that
the circumstances causing such suspension no longer
exist, and each Advance comprising such Borrowing shall
be a Prime Rate Advance;
(v) if the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances
comprising any requested Borrowing, the Agent will
forthwith so notify the Borrower and the Banks and such
Advances will be made available to the Borrower on the
date of such Borrowing as Prime Rate Advances; and
(vi) at any time a Default exists, no Borrowings comprised of
Eurodollar Rate Advances shall be requested by or
available to the Borrower.
(c) Notices of Borrowing Irrevocable. Each Notice of Borrowing shall
be irrevocable and binding on the Borrower. In the case of any Borrowing
which the related Notice of Borrowing specifies is to be comprised of
Eurodollar Rate Advances, the Borrower shall indemnify each Bank against any
loss, out-of-pocket cost or expense incurred by such Bank as a result of any
failure to fulfill on or before the date specified in such Notice of
Borrowing for such Borrowing the applicable conditions set forth in Article
III, including, without limitation, any loss (including any loss of
anticipated profits), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Bank to fund the
Advance to be made by such Bank as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.
(b) Agent Reliance. Unless the Agent shall have received notice from
a Bank before the date of any Borrowing that such Bank will not make
available to the Agent such Bank's Pro Rata Share of such Borrowing, the
Agent may assume that such Bank has made its Pro Rata Share of such
Borrowing available to the Agent on the date of such Borrowing in accordance
with paragraph (a) of this Section 2.02 and the Agent may, in reliance upon
such assumption, make available to the Borrower on such date a corresponding
amount. If and to the extent that such Bank shall not have so made its Pro
Rata Share of such Borrowing available to the Agent, such Bank and the
Borrower severally agree to immediately repay to the Agent on demand such
corresponding amount, together with interest on such amount, for each day
from the date such amount is made available to the Borrower until the date
such amount is repaid to the Agent, at (i) in the case of the Borrower, the
interest rate applicable on such day to Advances comprising such Borrowing
and (ii) in the case of such Bank, the Federal Funds Rate for such day. If
such Bank shall repay to the Agent such corresponding amount and interest as
provided above, such corresponding amount so repaid shall constitute such
Bank's Advance as part of such Borrowing for purposes of this Agreement even
though not made on the same day as the other Advances comprising such
Borrowing.
(e) Bank Obligations Several. The failure of any Bank to make the
Advance to be made by it as part of any Borrowing shall not relieve any
other Bank of its obligation, if any, to make its Advance on the date of
such Borrowing. No Bank shall be responsible for the failure of any other
Bank to make the Advance to be made by such other Bank on the date of any
Borrowing.
Section 2.03. Fees.
(a) Commitment Fees. The Obligors jointly and severally agree
to pay to the Agent for the account of each Bank a commitment fee on the
average daily amount by which such Bank's Commitment exceeds the sum of (A)
the aggregate amount of outstanding Advances made by such Bank to the
Borrower and (B) such Bank's Pro Rata Share of the Letter of Credit
Exposure, from the date of this Agreement until the Maturity Date at the
rate of 1/4 of 1% per annum. Such commitment fees are payable quarterly in
arrears on the last day of each Calendar Quarter, commencing December 31,
1994 and ending on the Maturity Date.
(b) Agent's Fee. The Obligors jointly and severally agree to pay
to the Agent for its own account the annual agent's fee agreed to in the
letter dated as of October 31, 1994 between the Agent and the Obligors as
provided for therein.
(c) Letter of Credit Fees. The Obligors jointly and severally
agree to pay (i) to the Agent for the pro rata benefit of the Banks, a
letter of credit fee equal to one and one-half percent (1 1/2%) per annum
and (ii) to the Agent for its account as issuer, a letter of credit fee
equal to one quarter of one percent (1/4%) per annum, in each case
calculated on the aggregate face amount of all Letters of Credit outstanding
during the period from the date hereof to and including the date on which
the last outstanding Letter of Credit expires, payable on the last day of
each Calendar Quarter and on the date on which the last outstanding Letter
of Credit expires.
Section 2.04. Reduction of Commitments.
(a) The Borrower shall have the right, upon at least three
Business Days' irrevocable notice to the Agent, to terminate in whole or
reduce ratably in part the unused portions of the Commitments; provided that
each partial reduction shall be in an integral multiple of $10,000,000, any
reduction or termination of the Commitments pursuant to this Section 2.04
shall be permanent, with no obligation of the Banks to reinstate such
Commitments, and the commitment fees provided for in Section 2.03(a) shall
thereafter be computed on the basis of the Commitments, as so reduced.
(b) On each date (a "Reduction Date") set forth below, the aggregate
Commitments shall be automatically and permanently reduced by an amount
equal to (i) the amount set forth below ("Scheduled Reduction Amount") next
to such Scheduled Reduction Date less (ii) the amount of any mandatory
Commitment reduction pursuant to subsections (c) or (d) of this Section 2.04
which has occurred prior to such Scheduled Reduction Date and has not been
previously used to reduce any prior Scheduled Reduction Amount:
Reduction Date Reduction Amount
-------------- ----------------
December 22, 1995 $10,000,000
March 31, 1996 $10,000,000
June 21, 1996 $12,500,000
(c) On each date which is 10 days after the date on which assets
(other than (i) Permitted Investments, (ii) production of natural gas, oil
and other hydrocarbons, (iii) assets constituting Collateral or HCLP
Partnership Interests not constituting Collateral, and (iv) the Gulf Coast
Production Payment) are sold by MI, the Borrower or any Subsidiary of MI
(other than HCLP), the aggregate Commitments shall be automatically and
permanently reduced by an amount equal to fifty percent (50%) of the
aggregate net proceeds of such sale; provided that this subsection (c) shall
not apply to any assets sold prior to June 30, 1993.
(d) [intentionally left blank].
(e) On June 23, 1997, the aggregate Commitments shall reduce to zero.
(f) On each date Collateral is sold, unless otherwise agreed by the
Majority Banks, the aggregate Commitments shall be automatically and
permanently reduced by an amount equal to one hundred percent (100%) of the
aggregate net proceeds of such sale.
Section 2.05. Repayment of Advances; Reborrowings.
(a) The Obligors shall repay the principal amount of each Advance
on the last day of the Interest Period for such Advance.
(b) Unless the Agent shall have received notice to the contrary prior
to 1:00 p.m. Dallas, Texas time three (3) Business Days before the last day
of any Interest Period for any Eurodollar Rate Advances, or one (1) Business
Day before the last day of any Interest Period for any Prime Rate Advances,
the Borrower shall be deemed to have requested a Borrowing consisting of the
same Type of Advances and in an amount equal to the Advances required to be
repaid on such day (and with an Interest Period of the same duration as the
Interest Period then ending, in the case of Eurodollar Rate Advances). Each
such Borrowing shall be subject to the conditions precedent set forth in
Section 3.02 hereof, and if any such condition precedent is not fully
satisfied (or otherwise waived by the Required Banks), then the Advances
maturing on the last day of the Interest Period then ending shall be repaid
in full by the Obligors on such day.
Section 2.06. Interest on Advances. The Obligors shall pay
interest on the unpaid principal amount of each Advance from the date of
such Advance until such principal amount shall be paid in full, at the
following rates per annum:
(a) Prime Rate Advances. If such Advance is a Prime Rate Advance,
a rate per annum equal at all times to the lesser of (i) the Adjusted Prime
Rate plus the Applicable Margin and (ii) the Maximum Rate, payable on the
last day of each Interest Period for all Prime Rate Advances.
(b) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate
Advance, a rate per annum equal at all times during the Interest Period for
such Advance to the lesser of (i) the Eurodollar Rate for such Interest
Period plus the Applicable Margin and (ii) the Maximum Rate, payable on the
last day of such Interest Period, and, in the case of each six-month or
twelve-month Interest Period, on the date which is three (3) months after
the first day of such Interest Period.
(c) Additional Interest on Eurodollar Rate Advances.
(i) The Obligors shall pay to each Bank, so long as any such
Bank shall be required under regulations of the Federal
Reserve Board to maintain reserves with respect to
liabilities or assets consisting of or including
Eurocurrency Liabilities, additional interest on the unpaid
principal amount of each Eurodollar Rate Advance of such
Bank, from the effective date of such Advance until such
principal amount is paid in full, at an interest rate per
annum equal at all times to the remainder obtained by
subtracting (x) the Eurodollar Rate for the Interest Period
for such Advance from (y) the rate obtained by dividing
such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Bank for
such Interest Period, payable on each date on which
interest is payable on such Advance. Such additional
interest payable to any Bank shall be determined by such
Bank and notified to the Obligors through the Agent (such
notice to include the calculation of such additional
interest, which calculation shall be conclusive in the
absence of manifest error).
(ii) If the Eurodollar Rate Reserve Percentage of any Bank for
any Interest Period for any Eurodollar Rate Advance shall
exceed the reserve percentage applicable during such
Interest Period (or, if more than one such percentage shall
be so applicable, the daily average of such percentages for
those days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued
from time to time by the Federal Reserve Board for
determining the actual reserve requirement for such Bank
with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities having a term equal to
such Interest Period, then, promptly upon the determination
of such excess, such Bank shall reimburse to the Obligors
an amount equal to such excess. Each Bank, at the request
of the Obligors, shall notify the Obligors from time to
time of all payments on the part of such Bank required to
be made pursuant to the preceding sentence (such notice to
include the calculation of such payments, which calculation
shall be conclusive in the absence of manifest error).
(d) Usury Recapture. In the event the rate of interest chargeable
under this Agreement or the Notes at any time is greater than the Maximum
Rate, the unpaid principal amount of the Notes shall bear interest at the
Maximum Rate until the total amount of interest paid or accrued on the Notes
equals the amount of interest which would have been paid or accrued on the
Notes if the stated rates of interest set forth in this Agreement had at all
times been in effect. In the event, upon payment in full of the Notes, the
total amount of interest paid or accrued under the terms of this Agreement
and the Notes is less than the total amount of interest which would have
been paid or accrued if the rates of interest set forth in this Agreement
had, at all times, been in effect, then the Obligors shall, to the extent
permitted by applicable law, pay the Agent for the account of the Banks an
amount equal to the difference between (i) the lesser of (A) the amount of
interest which would have been charged on the Notes if the Maximum Rate had,
at all times, been in effect and (B) the amount of interest which would have
accrued on the Notes if the stated rates of interest set forth in this
Agreement had at all times been in effect and (ii) the amount of interest
actually paid or accrued under this Agreement on the Notes. In the event
the Banks ever receive, collect or apply as interest any sum in excess of
the Maximum Rate, such excess amount shall, to the extent permitted by law,
be applied to the reduction of the principal balance of the Notes, and if no
such principal is then outstanding, such excess or part thereof remaining
shall be paid to the Obligors.
Section 2.07. Prepayments.
(a) Right to Prepay. The Obligors shall have no right to prepay
any principal amount of any Advances except as provided in this Section
2.07.
(b) Optional. The Obligors may elect to prepay any Advances upon
notice to the Agent, given by 10:00 a.m. Dallas, Texas time at least two (2)
Business Days' or, in case of Prime Rate Advances, one (1) Business Day's
before the proposed date of prepayment, stating the proposed date and
aggregate principal amount of such prepayment, and if any such notice is
given, the Obligors shall prepay Advances comprising part of the same
Borrowing in whole or ratably in part in an aggregate principal amount equal
to the amount specified in such notice, together with accrued interest to
the date of such prepayment on the principal amount prepaid and amounts, if
any, required to be paid pursuant to Section 2.08 as a result of such
prepayment being made on such date; provided, however, that each partial
prepayment pursuant to this paragraph (b) shall be in an integral multiple
of $10,000,000.
(c) Mandatory. The Obligors shall prepay Advances (and, if necessary
thereafter, cash collateralize the LC Obligations) on any date the
Commitments are reduced (i) pursuant to Section 2.04(a) or 2.04(b), in an
amount equal to the amount by which (x) the sum of the outstanding principal
amount of Advances plus the Letter of Credit Exposure exceeds (y) the
aggregate Commitments after giving effect to such reduction, and (ii)
pursuant to Section 2.04(c), 2.04(e) or 2.04(f) in an amount equal to the
amount of such reduction of the Commitments.
(d) Prepayment of Unlawful Eurodollar Rate Advances. If any Bank
shall notify the Agent and the Obligors that the introduction of or any
change in or in the interpretation of any law or regulation makes it
unlawful, or that any central bank or other governmental authority asserts
that it is unlawful for such Bank or its Eurodollar Lending Office to
perform its obligations under this Agreement to maintain any Eurodollar Rate
Advances of such Bank then outstanding hereunder, (i) the Obligors shall, no
later than 10:00 a.m. (Dallas, Texas time) (A) on the second Business Day
following receipt of such notice, or (B) if not prohibited by law, on the
last day of the Interest Period for each outstanding Eurodollar Rate Advance
prepay all of the Eurodollar Rate Advances of all of the Banks then
outstanding, together with accrued interest on the principal amount prepaid
to the date of such prepayment and amounts, if any, required to be paid
pursuant to Section 2.08 as a result of such prepayment being made on such
date, (ii) each of the Banks shall thereupon make a Prime Rate Advance to
the Borrower on such date in an amount equal to the aggregate principal
amount of the Eurodollar Rate Advances prepaid to each such Bank, and (iii)
the right of the Borrower to select Eurodollar Rate Advances for any
subsequent Borrowing shall be suspended until the Bank which gave notice
referred to above shall notify the Agent that the circumstances causing such
suspension no longer exist.
(e) Application of Prepayments; Notices. Each payment of any
Advance pursuant to this Section 2.07 or any other provision of this
Agreement shall be made in a manner such that all Advances comprising part
of the same Borrowing are paid in whole or ratably in part. All notices
given pursuant to this Section 2.07 shall be irrevocable and binding upon
the Obligors.
Section 2.08. Compensation. If (a) any payment or prepayment of
any Eurodollar Rate Advance is made other than on the last day of the
Interest Period for such Advance, as a result of any payment pursuant to
Section 2.07 or the acceleration of the maturity of the Notes pursuant to
Article VII or for any other reason whatsoever, or (b) any Eurodollar Rate
Advance is not made on any day proposed for such Advance in the relevant
Notice of Borrowing due to any condition precedent to such Advance having
not been satisfied as of such day or due to the Borrower's failure to borrow
such Advance for any reason, or (c) the Obligors fail to make a principal or
interest payment with respect to any Eurodollar Rate Advance on the date
such payment is due and payable, then, in such event the Obligors shall,
within ten (10) days of any written demand sent by any Bank to the Obligors
through the Agent, pay to the Agent for the account of such Bank any amounts
required to compensate such Bank for any losses, out-of-pocket costs or
expenses which it may reasonably incur as a result of such payment or
failure to make a proposed Eurodollar Rate Advance, including, without
limitation, any loss or expense sustained or incurred in liquidating or
employing deposits from third parties acquired to effect or maintain such
Advance or any part thereof as a Eurodollar Rate Advance, except the extent
such loss or expense was caused by the gross negligence or willful
misconduct of the Agent or any Bank. Such loss or expense shall be an
amount equal to the excess, if any, as reasonably determined by each Bank of
(i) its cost of obtaining the funds for the Advance being paid, prepaid or
converted or not borrowed (based on the Eurodollar Rate applicable thereto)
for the period from the date of such payment, prepayment or conversion or
failure to borrow to the last day of the Interest Period for such Advance
(or, in the case of a failure to borrow, the Interest Period for the Advance
which would have commenced on the date of such failure to borrow) over (ii)
the amount of interest (as reasonably determined by such Bank) that would be
realized by such Bank in reemploying the funds so paid, prepaid or converted
or not borrowed for such period or Interest Period, as the case may be,
provided that each Bank will use reasonable efforts to reemploy funds in
investments of similar quality. A certificate, supported where applicable
by documentary evidence, from any Bank as to the amount of any such loss or
expense to such Bank, specifying the basis upon which such loss or expense
is computed, shall be conclusive and binding on all parties absent manifest
error.
Section 2.09. Increased Costs.
(a) Change of Law. If, due to either (i) the introduction of or
any change (other than any change by way of imposition or increase of
reserve requirements included in the Eurodollar Rate Reserve Percentage) in
or in the interpretation of any law or regulation or (ii) the compliance
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any
increase in the cost to any Bank of agreeing to make or making, funding or
maintaining Eurodollar Rate Advances, or continuing to advance, fund, make
or maintain any Eurodollar Rate Advances, Letter of Credit, or risk
participation in such Letter of Credit, or to reduce the amount received or
receivable by the Agent or such Bank in connection with this Agreement, then
the Obligors shall, within ten (10) days of any written demand sent by such
Bank (with a copy of such demand to the Agent), immediately pay to the Agent
for the account of such Bank additional amounts sufficient to compensate
such Bank for such increased cost or reduction; provided, however, that,
before making any such demand, each Bank agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions)
to designate a different Applicable Lending Office if the making of such a
designation would avoid the need for, or reduce the amount of, such
increased cost and would not, in the reasonable judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate as to the amount of
such increased cost or reduction submitted to the Obligors and the Agent by
such Bank shall be conclusive and binding for all purposes, absent manifest
error.
(b) Capital Adequacy. If any Bank determines that compliance with
any law or regulation or any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law)
affects or would affect the amount of capital required or expected to be
maintained by any Bank or any corporation controlling any Bank and that the
amount of such capital is increased by or the rate of return on such Bank's
capital is reduced by an amount deemed in good faith by such Bank to be
material, based upon the existence of such Bank's commitment to lend or the
Agent's commitment to issue the Letters of Credit and other commitments
hereunder as a consequence of its obligations hereunder (taking into account
such Bank's policies with respect to capital adequacy), then, the Obligors
shall, within ten (10) days of any written demand sent by such Bank (with a
copy of such demand to the Agent) or the Agent, immediately pay to the Agent
for the account of such Bank or the Agent as the case may be, from time to
time as specified by such Bank or the Agent, additional amounts sufficient
to compensate such Bank or the Agent, in light of such circumstances, (i)
with respect to each Bank, to the extent that such Bank reasonably
determines such increase in capital to be allocable to the existence of such
Bank's commitment to lend under this Agreement or its commitment to
participate in Letters of Credit issued pursuant to this Agreement, and (ii)
with respect to the Agent, to the extent that the Agent reasonably
determines such increase in capital to be allocable to the issuance or
maintenance of the Letters of Credit. A certificate as to such amounts
submitted to the Obligors by such Bank or the Agent shall be conclusive and
binding for all purposes, absent manifest error.
Section 2.10. Payments and Computations.
(a) Payment Procedures. The Obligors shall make each payment under
this Agreement and under the Notes not later than 10:00 a.m. (Dallas, Texas
time) on the day when due in Dollars to the Agent at the location referred
to in the Notes (or such other location as the Agent shall designate in
writing to the Obligors) in same day funds. The Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal, interest or fees ratably (other than amounts payable solely to
the Agent or a specific Bank pursuant to Section 2.03(b), 2.08, 2.09,
2.11(c), or 9.08, but after taking into account payments effected pursuant
to Section 9.05) to the Banks for the account of their respective Applicable
Lending Offices, and like funds relating to the payment of any other amount
payable to any Bank or for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement.
(b) Authority to Charge Accounts. Each Obligor hereby authorizes
each Bank, if and to the extent payment owed to such Bank is not made when
due, to charge from time to time against any or all of such Obligor's
accounts with such Bank any amount so due.
(c) Computations. All computations of interest based on the Prime
Rate (other than as provided in the definition of "Default Rate") shall be
made by the Agent on the basis of a year of 365 or 366 days, as the case may
be, and all computations of interest based on the Eurodollar Rate or the
Federal Funds Rate, and of fees shall be made by the Agent on the basis of a
year of 360 days, in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or fees are payable. Each determination by the Agent of an
interest rate shall be conclusive and binding for all purposes, absent
manifest error.
(d) Non-Business Day Payments. Whenever any payment shall be
stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of payment of interest or fees,
as the case may be; provided, however, that if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances to be made
in the next following calendar month, such payment shall be made on the next
preceding Business Day.
(e) Agent Reliance. Unless the Agent shall have received written
notice from either Obligor prior to the date on which any payment is due to
the Banks that the Obligors will not make such payment in full, the Agent
may assume that the Obligors have made such payment in full to the Agent on
such date and the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such date an amount equal to the amount then due
such Bank. If and to the extent the Obligors shall not have so made such
payment in full to the Agent, each Bank shall repay to the Agent forthwith
on demand such amount distributed to such Bank, together with interest, for
each day from the date such amount is distributed to such Bank until the
date such Bank repays such amount to the Agent, at the Federal Funds Rate
for such day.
Section 2.11. Taxes.
(a) No Deduction for Certain Taxes. Any and all payments by the
Obligors shall be made, in accordance with Section 2.10, free and clear of
and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Bank and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Bank or the Agent (as the case may
be) is organized or any political subdivision of the jurisdiction and, in
the case of each Bank and the Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction of such Bank's Applicable
Lending Office or any political subdivision of the jurisdiction (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If either Obligor
shall be required by law to deduct any Taxes from or in respect of any sum
payable to any Bank or the Agent, (i) the sum payable shall be increased as
may be necessary so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.11),
such Bank or the Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made; provided,
however, that if either Obligor's obligation to deduct or withhold Taxes is
caused solely by such Bank's or the Agent's failure to provide the forms
described in Subsection (e) of this Section 2.11 and such Bank or the Agent
could have provided such forms, no such increase shall be required; (ii) the
Borrower shall make such deductions; and (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.
(b) Other Taxes. In addition, the Obligors agree to pay any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made or from
the execution, delivery or registration of, or otherwise with respect to,
this Agreement, the Notes, or the other Credit Documents (hereinafter
referred to as "Other Taxes").
(c) Indemnification. The Obligors will jointly and severally
indemnify each Bank and the Agent for the full amount of Taxes or Other
Taxes (including, without limitation, any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 2.11) paid by such
Bank or the Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Each payment required to be made by the Obligors in respect of this
indemnification shall be made to the Agent for the benefit of any party
claiming such indemnification within thirty (30) days from the date the
Obligors receive written demand therefor from the Agent on behalf of itself
as Agent or any such Bank.
(d) Evidence of Tax Payments. The Obligors will pay when due all
Taxes payable in respect of any payment. Within thirty (30) days after the
date of any payment of Taxes, the Borrower will furnish to the Agent, at its
address referred to in Section 9.02, the original or a certified copy of a
receipt evidencing payment of such Taxes.
(e) Foreign Bank Withholding Exemption. Each Bank that is not
incorporated under the laws of the United States of America or a state
thereof agrees that it will deliver to the Obligors and the Agent (i) two
duly completed copies of United States Internal Revenue Service Form 1001 or
4224 or successor applicable form, as the case may be, certifying in each
case that such Bank is entitled to receive payments under this Agreement and
the Notes payable to it, without deduction or withholding of any United
States federal income taxes, (ii) if applicable, an Internal Revenue Service
Form W-8 or W-9 or successor applicable form, as the case may be, to
establish an exemption from United States backup withholding tax, and (iii)
any other governmental forms which are necessary or required under an
applicable tax treaty or otherwise by law to reduce or eliminate any
withholding tax, which have been reasonably requested by the Obligors. Each
Bank which delivers to the Obligors and the Agent a Form 1001 or 4224 and
Form W-8 or W-9 pursuant to the next preceding sentence further undertakes
to deliver to the Obligors and the Agent two further copies of the said
letter and Form 1001 or 4224 and Form W-8 or W-9, or successor applicable
forms, or other manner of certification, as the case may be, on or before
the date that any such letter or form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent letter and
form previously delivered by it to the Obligors and the Agent, and such
extensions or renewals thereof as may reasonably be requested by the
Partnerships and the Agent certifying in the case of a Form 1001 or 4224
that such Bank is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes. If an
event (including without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any delivery required by the
preceding sentence would otherwise be required which renders all such forms
inapplicable or which would prevent any Bank from duly completing and
delivering any such letter or form with respect to it and such Bank advises
the Obligors and the Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax,
and in the case of a Form W-8 or W-9, establishing an exemption from United
States backup withholding tax, such Bank shall not be required to deliver
such letter or forms. The Obligors shall withhold tax at the rate and in
the manner required by the laws of the United States with respect to
payments made to a Bank failing to timely provide the requisite Internal
Revenue Service forms.
Section 2.12. Sharing of Payments, Etc. If any Bank shall obtain
any payment (whether voluntary, involuntary, through the exercise of any
right of set-off or otherwise) on account of the Advances made by it in
excess of its Pro Rata Share of payments on account of the Advances obtained
by all the Banks, such Bank shall notify the Agent and forthwith purchase
from the other Banks such participations in the Advances made by them as
shall be necessary to cause such purchasing Bank to share the excess payment
ratably with each of them; provided, however, that if all or any portion of
such excess payment is thereafter recovered from such purchasing Bank, such
purchase from each Bank shall be rescinded and such Bank shall repay to the
purchasing Bank the purchase price to the extent of such Bank's ratable
share (according to the proportion of (a) the amount of the participation
sold by such Bank to the purchasing Bank as a result of such excess payment
to (b) the total amount of such excess payment) of such recovery, together
with an amount equal to such Bank's ratable share (according to the
proportion of (a) the amount of such Bank's required repayment to the
purchasing Bank to (b) the total amount of all such required repayments to
the purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Obligors
agree that any Bank so purchasing a participation from another Bank pursuant
to this Section 2.12 may, to the fullest extent permitted by law, exercise
all its rights of payment (including the right of set-off) with respect to
such participation as fully as if such Bank were the direct creditor of the
Partnerships in the amount of such participation.
Section 2.13. Letters of Credit.
(a) Issuance, Increase, Extension. At the request of the Borrower,
from time to time from the date of this Agreement until three (3) months
beforethe Maturity Date, on any Business Day on the terms and conditions
hereinafter set forth, the Agent shall issue, increase the stated amount, or
extend the Expiration Date of Letters of Credit for the account of the
Borrower, as specified in a duly executed request for Letter of Credit (a
"Request for Letter of Credit") in substantially the form of Exhibit E
delivered to the Agent not later than 12:00 noon (Dallas, Texas time) on a
date at least two (2) Business Days prior to the date the proposed action is
to be effected. Each such request for Letter of Credit shall specify the
Business Day on which such Letter of Credit is to be issued, such stated
amount is to be increased, or such Expiration Date is to be extended, and
shall have attached thereto a completed letter of credit agreement and
application for standby letter of credit in form and substance satisfactory
to the Agent and executed by an Authorized Officer on behalf of the
Borrower. No Letter of Credit will be issued, no stated amount of an
outstanding Letter of Credit will be increased, and no Expiration Date of an
outstanding Letter of Credit will be extended (i) if such action would cause
the Letter of Credit Exposure to exceed the lesser of (1) $15,000,000 and(2)
the aggregate Commitments less the aggregate outstanding principal amount of
all Advances; (ii) unless such Letter of Credit has an Expiration Date not
later than the earlier of one year after the date of issuance thereof and
the Maturity Date; and (iii) unless such Letter of Credit is in form and
substance acceptable to the Agent in its sole discretion. The Agent will
promptly advise each Bank upon receipt of a Request for Letter of Credit.
(b) Participations. On the date of issuance, increase of the
stated amount of or extension of the Expiration Date of a Letter of Credit,
the Agent shall be deemed, without further action by any party hereto, to
have sold to each other Bank and each other Bank shall have been deemed,
without further action by any party hereto, to have purchased from the Agent
a participation in such Letter of Credit and the related Letter of Credit
Exposure equal to such Bank's Pro Rata Share at such date and such sale and
purchase shall otherwise be in accordance with the terms of this Agreement.
The Agent shall promptly notify each such participant Bank by telex,
telephone, or telecopy of each Letter of Credit issued and any amendment
increasing the stated amount or extending the Expiration Date of each
outstanding Letter of Credit, and the actual dollar amount of such Bank's
participation in such Letter of Credit and related Letter of Credit
Exposure.
(c) Payment of Drafts. Upon presentment of any draft for honor
under any Letter of Credit by, or on behalf of, the beneficiary thereof, the
Agent shall promptly notify the Obligors and the Banks as to the amount to
be paid as a result of such demand or drawing (a "LC Obligation") and the
intended date of honor of such draft (an "Honor Date"). The Obligors
jointly and severally hereby promise and agree to provide to the Agent not
later than 9:00 a.m. (Dallas, Texas time) on any such Honor Date, at its
office at 4800 ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
immediately available funds covering any such LC Obligation.
(d) Funding by Banks. If the Agent has not received immediately
available funds covering any such LC Obligation by 9:00 a.m. (Dallas, Texas
time) on the applicable Honor Date, the Agent shall advise each Bank thereof
not later than 10:00 a.m. (Dallas, Texas time). Not later than 12:00 noon
(Dallas, Texas time) on any such Honor Date each Bank shall, notwithstanding
any other provision of this Agreement (including the occurrence and
continuance of a Default) provide to the Agent at its office at 4800
▇▇▇▇▇▇▇▇ ▇▇▇▇ Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, immediately
available funds covering its Pro Rata Share of such LC Obligation. The
Obligors jointly and severally promise and agree to reimburse the Agent on
demand by paying to the Agent an amount equal to any such LC Obligation
honored by the Agent on any such Honor Date, together with interest from any
such Honor Date until such reimbursement is made at a fluctuating rate per
annum equal to the Default Rate and as further set forth in the applicable
Letter of Credit Document. The Obligors jointly and severally irrevocably
agree that their joint and several obligations under this Section 2.13 and
under the applicable Letter of Credit Documents to reimburse the Agent for
the payment of any LC Obligation, together with accrued interest thereon as
set forth herein, shall not be discharged in any way except by the payment
in full of such obligation, whether for principal or interest. Any amount
received by the Agent under this Section 2.13 or under the applicable Letter
of Credit Document from the Obligors in respect of any such LC Obligation
honored by the Agent after the Banks have made funds available for the
payment of their respective Pro Rata Share of such LC Obligation pursuant to
this Section 2.13 shall be paid over by the Agent to the Banks, pro rata
according to the amounts so made available by the Banks, promptly upon the
Agent's receipt thereof. Nothing in this Agreement shall diminish the
Obligors' obligation to provide the funds for the payment of, or demand to
reimburse the Agent for payment of, any LC Obligation.
(e) Obligations Unconditional. The obligations of the Obligors
under this Agreement in respect of each Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement under all circumstances, including, without
limitation, the following circumstances:
(i) any lack of validity or enforceability of any Letter
of Credit Documents;
(ii) any amendment or waiver of or any consent to departure
from any Letter of Credit Documents;
(iii) the existence of any claim, set-off, defense or other
right which either Obligor may have at any time
against any beneficiary or transferee of such Letter
of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the
Agent or any other person or entity, whether in
connection with this Agreement, the transactions
contemplated in this Agreement or in any Letter of
Credit Documents or any unrelated transaction;
(iv) any statement or any other document presented under
such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in
any respect;
(v) payment by the Agent under such Letter of Credit
against presentation of a draft or certificate which
does not comply with the terms of such Letter of
Credit; or
(vi) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing;
provided, however, that nothing contained in this subsection (e) shall be
deemed to constitute a waiver of any remedies of either Obligor in
connection with the Letters of Credit.
(f) Use of Commitment. On each day during the period commencing
with the issuance by the Agent of any Letter of Credit and until such Letter
of Credit shall have expired or been terminated, the Commitment of each Bank
shall be deemed to be utilized for all purposes hereof in an amount equal to
such Bank's Pro Rata Share of the Letter of Credit Exposure in connection
with such Letter of Credit.
(g) UCP. In the event that any provision of a Letter of Credit
Document is inconsistent with any provision of this Agreement, including
provisions for the rate of interest applicable to drawings thereunder or
under each related Letter of Credit, any representations or warranties,
covenants or any events of default, the provisions of this Agreement shall
govern, provided, however, all Letter of Credit Documents shall be subject
to the Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500, and any subsequent
revisions thereof approved by a Congress of the International Chamber of
Commerce and adhered to by the Agent (the "UCP") and, as to matters not
governed by the UCP, the laws of the State of Texas.
Section 2.14. The Obligors Jointly and Severally Liable. The
Obligors shall be jointly and severally liable to the Banks for the
principal amount of all Advances, all LC Obligations, interest due thereon,
commitment fees, facility fees, letter of credit fees, and all other amounts
due to the Agent or any Bank hereunder or under any of the other Credit
Documents or under any other agreement or security document executed in
connection herewith, and shall make prompt and punctual payment when due of
such amounts.
Section 2.15. Use of Proceeds. The proceeds of all Borrowings may
be used for any lawful purpose; provided, however, that in no event shall
the Borrower use proceeds of Borrowings hereunder for any purchase of
Securities other than (i) Securities which constitute a Permitted Investment
and (ii) Unsecured Notes.
Section 2.16. Interest on Overdue Amounts. Any amount payable by
the Obligors hereunder or under any other Credit Document shall, if not paid
when due (whether at stated maturity, by acceleration or otherwise), bear
interest at the Default Rate from the date such amount became due until paid
in full, such interest due and payable on demand.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to the Effectiveness of this
Agreement. Notwithstanding anything herein to the contrary, this Agreement
shall not become effective until the Agent shall have received in form and
substance satisfactory to the Agent and its counsel:
(a) This Agreement together with all attached Exhibits and Schedules,
the Security Documents (including all necessary amendments to previously
executed Security Documents to reflect the terms of this Agreement), and the
Notes payable to the order of each of the Banks, respectively, duly executed
by an Authorized Officer on behalf of each of the Obligors;
(b) Certificates dated as of the date hereof and substantially in the
form of Exhibits K-1 and K-2 attached hereto, duly and validly issued,
executed and delivered by an Authorized Officer of MI and the Borrower,
respectively;
(c) An opinion of ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., counsel to the Obligors,
substantially in the form of the attached Exhibit M dated as of the date
hereof;
(d) An opinion of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P., special counsel to
the Agent and the Banks, substantially in the form of the attached Exhibit
N;
(e) Evidence that amendments to the Mortgage and financing statements
related thereto have been filed; and
(f) The HCLP Partners Agreement executed by the parties thereto.
Section 3.02. Conditions Precedent to Each Borrowing. The
obligation of each Bank to make an Advance on the occasion of each Borrowing
shall be subject to the further conditions precedent that on the date of
such Borrowing the following statements shall be true (and each of the
giving of the applicable Notice of Borrowing and any deemed notice of
requested Borrowing pursuant to Section 2.05, and the acceptance by the
Borrower of the proceeds of such Borrowing shall constitute a representation
and warranty by the Borrower that on the date of such Borrowing such
statements are true):
(a) all representations and warranties contained in this Agreement and
the other Credit Documents (excluding those contained in Sections 4.02(b)
and 4.04 (only as to the last sentence of each of Sections 4.02(b) and 4.04)
and Sections 4.07, 4.12, 4.14, and 4.18 of this Agreement), are correct in
all material respects on and as of the date of such Borrowing, before and
after giving effect to such Borrowing and to the application of the proceeds
from such Borrowing, as though made on and as of such date except to the
extent such representations and warranties relate solely to an earlier date;
(b) no Event of Default has occurred and is continuing, or would
result from such Borrowing or from the application of the proceeds
therefrom.
Section 3.03. Conditions Precedent to Certain Borrowings. The
obligation of each Bank to make that portion of an Advance on the occasion
of any Borrowing which would increase the aggregate outstanding amount of
Advances owing to such Bank over the amount of Advances owing to such Bank
outstanding immediately prior to the making of such Advance shall be subject
to the further conditions precedent that on the date of such Borrowing the
following statements shall be true (and each of the giving of the applicable
Notice of Borrowing and the acceptance by the Borrower of the proceeds of
such Borrowing shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing such statements are true):
(a) all representations and warranties contained in this Agreement and
in the other Credit Documents are correct on and as of the date of such
Borrowing, before and after giving effect to such Borrowing and to the
application of the proceeds therefrom, as though made on and as of such date
except to the extent such representations and warranties relate solely to an
earlier date;
(b) no Default has occurred and is continuing, or would result from
such Borrowing or from the application of the proceeds therefrom;
(c) the Agent shall have received a certificate from MI and the
Borrower duly executed, in form satisfactory to the Agent and in such number
of copies as the Agent may reasonably require, to the effect that no
litigation (other than Existing Litigation) is pending or threatened against
either Obligor, any Subsidiary of the Borrower, or any Guaranteeing
Affiliate, and no material development shall have occurred in any pending
litigation, which litigation (including Existing Litigation, if, but only
if, there has been a material adverse development therein), if adversely
determined, could reasonably be expected to cause a Material Adverse Change,
except such litigation (including Existing Litigation only as aforesaid) as
to which, in the view of counsel for the Borrower or MI, as the case may be,
expressed in an opinion letter addressed to the Banks (which letter shall
include a description of the nature and scope of the examination or
investigation is adequate and sufficient to enable such counsel to express
such views), an adverse determination is not probable.
Section 3.04. Conditions Precedent to Letters of Credit. The
obligation of the Agent to issue, increase the stated amount of, or extend
the Expiration Date of any Letter of Credit (including the initial Letters
of Credit) shall be subject to the further conditions precedent that on the
date of such requested action the following statements shall be true (and
the applicable Request for Letter of Credit delivered by the Borrower to the
Agent shall constitute a representation and warranty by the Borrower on such
date that such statements are true):
(a) the representations and warranties contained in this Agreement and
in the other Credit Documents are correct on and as of the date of the
issuance, increase of the stated amount of, or extension of the Expiration
Date of such Letter of Credit as though made on and as of such date except
to the extent such representations and warranties relate solely to an
earlier date;
(b) no Default has occurred and is continuing, or would result from
the issuance, increase of the stated amount of or extension of the
Expiration Date of such Letter of Credit; and
(c) the Agent shall have received a certificate from MI and the
Borrower duly executed, in form satisfactory to the Agent and in such number
of copies as the Agent may reasonably require, to the effect that no
litigation (other than Existing Litigation) is pending or threatened against
either Obligor, any Subsidiary of the Borrower, or any Guaranteeing
Affiliate, and no material development shall have occurred in any which
pending litigation, which litigation (including Existing Litigation, if, but
only if, there has been a material adverse development therein), if
adversely determined, could reasonably be expected to cause a Material
Adverse Change, except such litigation (including Existing Litigation only
as aforesaid) as to which, in the view of counsel for the Borrower or MI, as
the case may be, expressed in an opinion letter addressed to the Banks
(which letter shall include a description of the nature and scope of the
examination or investigation is adequate and sufficient to enable such
counsel to express such views), an adverse determination is not probable.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Banks to extend their Commitments hereunder and to make
the Advances hereunder and to induce the Agent to issue, and the Banks to
participate in, the Letters of Credit hereunder, the Borrower and (with
respect to those matters respecting MI) MI represent and warrant to the
Agent and the Banks that:
Section 4.01. Organization, etc.
(a) The Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. MI is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Texas. Each of the Borrower and MI is, and at all
times will be, duly licensed, organized or qualified and in good standing
under the laws of each jurisdiction where, because of the nature of its
activities or properties, such licensing, organization or qualification is
required and where a failure so to be licensed, organized or qualified could
reasonably be expected to cause a Material Adverse Change.
(b) Each Subsidiary of the Borrower and each Guaranteeing Affiliate
is, and at all times will be, (i) a corporation or partnership, as the case
may be, duly organized, validly existing and in good standing under the laws
of its respective state of incorporation or organization, and (ii) duly
licensed or qualified and in good standing under the laws of each
jurisdiction where, because of the nature of its activities or properties,
such licensing or qualification is required and where a failure so to be
licensed or to qualify could reasonably be expected to cause a Material
Adverse Change. Set forth on Schedule 4.01 hereto is a complete and
accurate list of all of the Subsidiaries of the Borrower and of MI as of the
date hereof showing the jurisdiction of incorporation or organization of
each such Subsidiary and the percentage of the outstanding shares of each
class of capital stock (or other equivalent interests) owned or to be owned
(directly or indirectly) by the Borrower or MI, as the case may be. As of
the date hereof, there are no Guaranteeing Affiliates.
Section 4.02. Authorization; No Conflict.
(a) The execution, delivery and performance of this Agreement and
the other Credit Documents by the Borrower and MI and each Guaranteeing
Affiliate (in each case if named therein as a party) are within its
corporate or partnership powers, as the case may be, and have been or will
be, when such instrument is executed and delivered by the Borrower, MI
and/or a Guaranteeing Affiliate, duly authorized by all necessary
partnership or corporate action on its part. Each of MI and the Borrower
has duly and validly executed and delivered this Agreement, the Notes and
each Security Document executed by it.
(b) The execution, delivery and performance of this Agreement do
not and will not, and the execution, delivery and performance of the other
Credit Documents will not, involve any Bank in a violation of Regulation U
or Regulation X or contravene or conflict with the certificate of
organization or incorporation or the bylaws of the Borrower, MI, or any
Subsidiary of the Borrower or of any Guaranteeing Affiliate, or, if such
Subsidiary or Guaranteeing Affiliate is a partnership, its partnership
agreement or certificate of partnership, or any other provision of law, rule
or regulation or any agreement, instrument, decree, order or judgment
binding upon MI, the Borrower, any Subsidiary of the Borrower or any
Guaranteeing Affiliate.
Section 4.03. Validity and Binding Nature. This Agreement is, and
the other Credit Documents when duly executed and delivered will be, legal,
valid and binding obligations of the Borrower, MI and each Guaranteeing
Affiliate (in each case if named therein as a party), enforceable in
accordance with their respective terms, except as enforceability thereof may
be limited by bankruptcy, insolvency, reorganization or moratorium or other
similar laws relating to creditors' rights and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law), and except as rights to indemnity hereunder
or thereunder may be limited by applicable law.
Section 4.04. Financial Statements. The audited consolidated
balance sheet of MI and the Borrower as of December 31, 1993, and the
related audited consolidated statements of operations, reinvested earnings
and changes in financial position for the year then ended, copies of all of
which have been heretofore delivered to the Banks, fairly present the
financial condition of MI and its consolidated Subsidiaries at such date and
the results of their operations for such period in accordance with GAAP. No
Material Adverse Change has occurred since December 31, 1993, other than any
industry wide decrease in the price of natural gas since such date.
Section 4.05. Status of Title to Properties. The Borrower has
valid and marketable title to, or valid and marketable interest in, all of
the Mortgaged Properties (other than the "B" Contract and the Supply
Contract) and in the respective net revenue interest set forth in the
Initial Reserve Report, except for (i) such imperfections of title to such
properties and assets as do not in the aggregate materially detract from the
value thereof to, or the use thereof in, the business of the Obligors, (ii)
Mortgaged Properties disposed of since the date of the Initial Reserve
Report in the ordinary course of business, (iii) Mortgaged Properties
disposed of since the date of the Initial Reserve Report as permitted by
Section 6.01 hereof, and (iv) Liens reflected on the Financial Statements or
permitted by Section 6.07 hereof. Schedule 1.01(a) contains a complete
listing of all instruments supplementing or amending the Agreement dated
January 3, 1928, between Canadian River Gas Company, as Seller, and Amarillo
Oil Company, as Buyer, applicable to the Borrower's interests in (including
but not limited to, the sale and purchase of) natural gas produced from the
West Panhandle Field of Texas. Schedule 1.01(f) contains a complete listing
of all contracts for the sale by the Borrower of Hydrocarbons produced from
the West Panhandle Field of Texas to which the Borrower is entitled under
the "B" Contract. The Borrower owns its interest in the "B" Contract and
the Supply Contract free from all claims, liens, charges or encumbrances of
any nature or kind except Liens permitted by Section 6.07 hereof. The
Borrower has not disposed of any of the Mortgaged Properties between the
date of the Initial Reserve Report and the date hereof except as set forth
on Schedule 4.05 hereto.
Section 4.06. Governmental Approvals. All approvals of all
Governmental Authorities and all registrations, filings, notices and
consents necessary to permit the Borrower, MI and each Guaranteeing
Affiliate to execute and deliver this Agreement and the other Credit
Documents (other than the Guaranties), to borrow hereunder (in the case of
the Borrower) and perform all of their respective obligations hereunder or
thereunder, as the case may be, and to own, maintain and operate the
Mortgaged Properties have been made, given or obtained and are in full force
and effect. All approvals of all Governmental Authorities and all
registrations, filings, notices and consents necessary to permit each
Guaranteeing Affiliate to execute and deliver its Guaranty and to perform
all of its obligations thereunder shall have been made, given or obtained
and shall be in full force and effect as of the date of the execution and
delivery thereof.
Section 4.07. Pending or Threatened Litigation. Except for
Existing Litigation, there are as of the date hereof no actions, suits, or
proceedings pending or, to the knowledge of the Borrower or MI, threatened
against or affecting either Obligor, any Subsidiary of the Borrower, or any
Significant Guaranteeing Affiliate in any court or by or before any
Governmental Authority, in which there is a reasonable possibility of an
adverse decision which could reasonably be expected to cause a Material
Adverse Change.
Section 4.08. Pension Plans. All Plans are in compliance in all
material respects with all applicable provisions of ERISA. No Termination
Event has occurred with respect to any Plan, and each Plan has complied with
and been administered in all material respects with applicable provisions of
ERISA and the Code. No "accumulated funding deficiency" (as defined in
Section 302 of ERISA) has occurred and there has been no excise tax imposed
under Section 4971 of the Code. To the best knowledge of the Borrower or
MI, no Reportable Event has occurred with respect to any Multiemployer Plan,
and each Multiemployer Plan has complied with and been administered in all
material respects with applicable provisions of ERISA and the Code. The
present value of all benefits vested under each Plan (based on the
assumptions used to fund such Plan) did not, as of the last annual valuation
date applicable thereto, exceed the value of the assets of such Plan
allocable to such vested benefits by more than $5,000,000. Neither the
Borrower nor MI nor any member of the Controlled Group has had a complete or
partial withdrawal from any Multiemployer Plan for which there is any
withdrawal liability in an amount that could reasonably be expected to cause
a Material Adverse Change. As of the most recent valuation dated applicable
thereto, neither the Borrower nor MI nor any member of the Controlled Group
would become subject to any liability under ERISA in an amount that could
reasonably be expected to cause a Material Adverse Change if the Borrower or
MI or any member of the Controlled Group has received notice that any
Multiemployer Plan is insolvent or in reorganization. Based upon GAAP
existing as of the date of this Agreement and current factual circumstances,
the Obligors have no reason to believe that the annual cash cost during the
term of this Agreement to the Borrower or MI or any member of the Controlled
Group for post-retirement benefits to be provided to the current and former
employees of the Borrower or MI or any member of the Controlled Group under
Plans that are welfare benefit plans (as defined in Section 3(a) of ERISA
could, in the aggregate, reasonably be expected to cause a Material Adverse
Change.
Section 4.09. Investment Company Act. Neither Obligor nor any
Subsidiary of the Borrower nor any Guaranteeing Affiliate is an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act").
Section 4.10. Public Utility Holding Company Act. Neither Obligor
nor any Subsidiary of the Borrower nor any Guaranteeing Affiliate is a
"holding company", or a "Subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "Subsidiary company" of a
"holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
Section 4.11. True and Complete Disclosure. All factual
information (excluding estimates), including without limitation factual
information contained in any Reserve Report (taken as a whole), heretofore
or contemporaneously furnished by or on behalf of MI, the Borrower or any of
their respective Subsidiaries in writing to any Bank or the Agent for
purposes of or in connection with this Agreement, any other Credit Document
or any transaction contemplated hereby or thereby is, and all other such
factual information (excluding estimates), including without limitation
factual information contained in any Reserve Report (taken as a whole)
hereafter furnished by or on behalf of the Borrower, MI or any of their
respective Subsidiaries in writing to any Bank or the Agent will be, true
and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information (taken as a whole) not
misleading at such time. All estimates furnished by the Borrower were
prepared on the basis of assumptions, data, information, tests or conditions
believed to be valid or accurate or to exist at the time such estimates were
furnished.
Section 4.12. Defaults. Neither Obligor nor any Subsidiary of the
Borrower nor any Significant Guaranteeing Affiliate is in default under (and
no event has occurred which with the lapse of time or action by a third
party could result in a default under) any instrument evidencing any
indebtedness for borrowed monies in excess of $10,000,000 or under any
agreement relating thereto or any indenture, mortgage, deed of trust,
security agreement, lease, franchise or other agreement or other instrument
to which such Person is a party or by which such Person is bound in respect
of which such Person's liability for such default or event of default could
exceed $10,000,000. Neither Obligor nor any Subsidiary of the Borrower nor
any Significant Guaranteeing Affiliate is a guarantor or surety or otherwise
responsible in any manner with respect to any debt or undertaking other than
as expressly permitted or required in this Agreement.
Section 4.13. Investments and Guaranties. Neither Obligor nor any
Subsidiary of the Borrower nor any Guaranteeing Affiliate has made any
investment in, advance to, or guaranty of, the obligations of any Person
except (i) as reflected in the Financial Statements, (ii) as heretofore
disclosed in writing to the Agent and each Bank in connection with this
Agreement, or (iii) as otherwise not prohibited hereby.
Section 4.14. Liabilities. Except as heretofore disclosed in
writing to the Agent and each Bank in connection with this Agreement, (i)
all contingent liabilities, direct liabilities and unrealized or anticipated
losses of MI and of any of its Subsidiaries existing on the date hereof
which in the aggregate are material to MI and its Subsidiaries, taken as a
whole, to the extent required by GAAP are set forth in the Financial
Statements, (ii) all contingent liabilities and direct liabilities of MI and
its Subsidiaries, and all unrealized or anticipated losses of MI and its
Subsidiaries, which in the aggregate are material to MI and its
Subsidiaries, taken as a whole, to the extent required by GAAP will be set
forth in the financial statements next delivered pursuant to Section 5.01
hereof after any of such are incurred or anticipated, as applicable, (iii)
all unrealized or anticipated losses of the Borrower and its Subsidiaries
which in the aggregate are material to the Borrower and its Subsidiaries
taken as a whole, to the extent required by GAAP are set forth in the
financial statements last delivered pursuant to Section 5.01 hereof, and
(iv) neither Obligor nor any Significant Guaranteeing Affiliate is, or will
be, a party to, or bound by, any contract or agreement, or subject to any
charter, partnership agreement or other corporate or partnership restriction
that materially and adversely affects the business, financial condition or
results of operations of Consolidated MI.
Section 4.15. Permits, Licenses, etc. Each Obligor, and each
Subsidiary of the Borrower and each Significant Guaranteeing Affiliate
possesses all permits, licenses, patents, patent rights or licenses,
trademarks, trademark rights, trade names rights and copyrights which are
material to the conduct of its respective business. Without limitation of
the foregoing, the Borrower possesses all material consents, licenses,
approvals or authorizations, and has made all material filings and
registrations, required in connection with the performance and enforcement
by the Borrower of the "B" Contract and the Supply Contract. Each Obligor,
each Subsidiary of the Borrower and each Guaranteeing Affiliate manages and
operates, and same will continue to manage and operate, its respective
business in accordance with all applicable Legal Requirements and good
industry practices.
Section 4.16. Taxes. Each Obligor, each Subsidiary of the Borrower
and each Guaranteeing Affiliate has filed all federal and state tax returns
which are material and are required to be filed by them and has paid or
caused to be paid all material taxes shown on said returns and all material
assessments, fees and other governmental charges levied upon them or upon
any property or income of any of them which are due and payable except such
taxes, if any, as are being diligently contested in good faith and by
appropriate proceedings diligently conducted and with respect to which there
have been established adequate reserves on the books of the Obligors in
accordance with GAAP. The Partnerships know of no proposed material tax
assessment against either Obligor, any Subsidiary of the Borrower, or any
Guaranteeing Affiliate, or of any basis for any such assessment, except as
heretofore disclosed to each Bank in writing and those with respect to which
there have been heretofore established adequate reserves on the books of the
Obligors in accordance with GAAP.
Section 4.17. Issuance of Notes. Neither Obligor nor any agent
acting for either Obligor has taken or will take any action which would
subject the issuance of the Notes to the provisions of Section 5 of the
Securities Act of 1933, as amended, or any applicable state securities law.
Section 4.18. Condition of Property; Casualties. The material
properties used or to be used in the continuing operations of each Obligor,
each Subsidiary of the Borrower and each Guaranteeing Affiliate are, and
will continue to be, in all material respects in good repair, working order
and condition. Since December 31, 1993, neither the business nor the
material properties of the Obligors and the Subsidiaries of the Borrower,
taken as a whole, has been materially and adversely affected as a result of
any fire, explosion, earthquake, flood, drought, windstorm, accident, strike
or other labor disturbance, embargo, requisition or taking of property or
cancellation of contracts, permits or concessions by any Governmental
Authority, riot, activities of armed forces or acts of God or of any public
enemy.
Section 4.19. Insurance. Each Obligor, each Subsidiary of the
Borrower and each Guaranteeing Affiliate carry, and will continue to carry,
insurance with reputable insurers (except as to self-insurance) in respect
of such of their respective properties, in such amounts and against such
risks as is customarily maintained by other Persons of similar size engaged
in similar businesses (which may include self-insurance in the same form and
up to the same limits as is customarily maintained by companies similarly
situated or as has been maintained in the past by the Obligors and each
Subsidiary of the Borrower).
Section 4.20. Principal Place of Business. As of the date hereof,
the chief executive office and the principal place of business of the
Borrower and of MI is 2600 ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇.
Section 4.21. Documents. True and complete copies of the Financial
Statements, the "B" Contract and the Supply Contract (including, in each
case, all amendments and all material waivers and interpretive letters from
one party to the other relating thereto) have heretofore been furnished to
the Banks. The "B" Contract and the Supply Contract are each valid and
enforceable in accordance with their respective terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or moratorium or other similar laws relating to creditors'
rights and by general equitable principles which may limit the right to
obtain equitable remedies (regardless of whether such enforceability is
considered in the proceeding at equity or at law), and except as rights to
indemnity thereunder may be limited by applicable law) and is in full force
and effect, and no default on the part of any party thereto exists
thereunder.
Section 4.22. The Security Documents.
(a) The provisions of the MI Pledge Agreement are effective to
create in favor of the Agent for the ratable benefit of the Banks a legal,
valid and enforceable security interest in all right, title and interest of
MI in the collateral described therein; and so long as the Agent retains all
certificates evidencing the shares of MOC previously delivered to the Agent,
the MI Pledge Agreement constitutes a fully perfected first security
interest in all right, title and interest of MI in the collateral described
therein, subject to the encumbrances and exceptions to title set forth
therein, if any.
(b) The provisions of the Borrower Pledge Agreement are effective to
create in favor of the Agent for the ratable benefit of the Banks a legal,
valid, and enforceable security interest in all right, title, and interest
of the Borrower in the collateral described therein. The Borrower Pledge
Agreement constitutes, and so long as any required UCC continuation
statements are filed in accordance with applicable law, the Borrower Pledge
Agreement will constitute a fully perfected first security interest in all
right, title, and interest of the Borrower in the collateral described
therein, subject to the encumbrances and exceptions to title set forth
therein, if any.
(c) The provisions of the Mortgage are effective to grant to the
Trustee, as defined therein, for the benefit of the Agent a legal, valid and
enforceable mortgage lien on, and security interest in, all of the
Borrower's right, title and interest in the Mortgaged Property. The
Mortgage constitutes a fully perfected first lien on, and security interest
in, such Mortgaged Property, subject only to the encumbrances and exceptions
to title set forth therein.
Section 4.23. Federal Regulations. No part of the proceeds of any
Advances were used, and no part of the proceeds of any Advances hereunder
will be used for any purpose which violates, or which would be inconsistent
with, the provisions of the Regulations of the Federal Reserve Board as now
or from time to time hereafter in effect.
Section 4.24. Environmental Condition.
(a) Status. Except as set forth on Schedule 4.24(a), each
Obligor, each of Subsidiary of the Borrower and each Significant
Guaranteeing Affiliate (i) has obtained all Environmental Permits necessary
for the ownership and operation of its properties and the conduct of its
business; (ii) has been and is in compliance in all material respects with
all terms and conditions of such Environmental Permits and with all other
requirements of Environmental Laws; (iii) has not received notice of any
violation or alleged violation of any Environmental Law or Environmental
Permit; and (iv) no Environmental Claim is currently pending.
(b) Certain Liabilities. Except as set forth on Schedule 4.24(b),
none of the present or previously owned or operated property of either
Obligor, MLP, MOLP, or any present or former Subsidiary of the Borrower, or
of any Significant Guaranteeing Affiliate, wherever located, and with
respect to clause (iii) below, any third party site otherwise used by any of
the foregoing Persons, (i) has been placed on or proposed to be placed on
the National Priorities List, the Comprehensive Environmental Response
Compensation Liability Information System list, or their state or local
analogs, or have been otherwise investigated, designated, listed, or
identified by a Governmental Authority as a potential site for removal,
remediation, cleanup, closure, restoration, reclamation, or other response
activity under any Environmental Laws; (ii) is subject to a Lien, arising
under or in connection with any Environmental Laws, that attaches to any
revenues or to any real or personal property owned or operated by the
Obligors or any of their Subsidiaries, wherever located; or (iii) has been
the site of any Release of Hazardous Substances from present or past
operations which has caused at the site or at any third-party site any
condition that has resulted in or could reasonably be expected to result in
the need for Response or similar action that could reasonably be expected to
cause a Material Adverse Change.
(c) Certain Actions. Without limiting the foregoing, (i) to the
extent required by applicable law, each Obligor, each Subsidiary of the
Borrower and each Significant Guaranteeing Affiliate, has established an
accrual for obligations under Environmental Laws that is adequate for the
satisfactory fulfillment of such obligations; and (ii) all necessary notices
have been properly filed, and no further action is appropriate or required
under current Environmental Law as to each Release, and as to each Response,
Reclamation, or other restoration or remedial project taken by either
Obligor, any present or former Subsidiary of the Borrower, or any
Significant Guaranteeing Affiliate, on any of their presently or formerly
owned or operated property; and (iii) the liability, if any, of the
Obligors, the Subsidiaries of the Borrower and the Significant Guaranteeing
Affiliates which could reasonably be expected to arise in connection with
requirements under Environmental Laws could not reasonably be expected to
cause a Material Adverse Change.
Section 4.25. Senior Debt. The Obligations constitute, and shall
at all times continue to constitute "Senior Debt" of the Obligors under and
pursuant to the terms of each of the Indentures.
Section 4.26. Ownership of HCLP Limited Partnership Interests. At
the date hereof, the Borrower owns a 98.6% HCLP Partnership Interest.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Obligations shall remain unpaid, any Letter of Credit
shall remain outstanding, or any Bank shall have any Commitment hereunder,
the Obligors jointly and severally agree, unless the Required Banks shall
otherwise consent in writing, to comply with the following covenants.
Section 5.01. Financial Statements and Other Information. MI or
the Borrower, as the case may be, will deliver to each Bank:
(a) Annual Financial Reports of MI. Within one hundred-five (105)
days after the end of each of its fiscal years, an audited consolidated or
combined balance sheet of MI and its Subsidiaries as at the end of, and the
related audited consolidated or combined statements of operations,
reinvested earnings and changes in financial position for, such year, in
accordance with GAAP, accompanied by a report of independent public
accountants of nationally recognized standing as to such balance sheet and
such statements, which report will contain no exceptions or qualifications
that relate to a limitation on the scope of examination of matters relevant
to such financial statements.
(b) Quarterly Financial Reports of MI. Within sixty (60) days
after the end of each of the first three (3) quarters of each of its fiscal
years, a consolidated or combined balance sheet of MI and its Subsidiaries
as at the end of such quarter, and the related consolidated or combined
statements of operations, reinvested earnings and changes in financial
position for the period from the end of the prior fiscal year to the end of
such quarter, accompanied by a certificate dated the date of delivery
thereof of an Authorized Officer to the effect that such financial
statements (subject to normal year-end audit adjustments not material in
scope or nature) (i) fairly present the consolidated or combined financial
position and the results of operations of MI and its Subsidiaries for the
period from the end of the prior fiscal year to the end of such quarter in
accordance with GAAP consistently applied throughout the period covered
thereby, and (ii) have been prepared on a basis consistent with the
financial statements for the same period furnished under Section 5.01(a)
hereof, except for changes in GAAP.
(c) Annual Financial Reports of the Borrower. Within one hundred-five
(105) days after the end of each of its fiscal years, unaudited
consolidated or combined balance sheet of the Borrower and its Subsidiaries
as at the end of, and the related unaudited consolidated or combined
statements of operations, reinvested earnings and changes in financial
position for, such year, in accordance with GAAP. All of the financial
statements provided under this Section 5.01(c) shall be consolidated or
combined with the Subsidiaries of the Borrower and shall be accompanied by a
certificate dated the date of delivery thereof of an Authorized Officer to
the effect that such financial statements have been prepared on a basis
consistent with the financial statements for the same period furnished under
Section 5.01(a) hereof.
(d) Quarterly Financial Reports of the Borrower. Within sixty (60)
days after the end of each of the first three (3) quarters of each of its
fiscal years, a consolidated or combined balance sheet of Borrower and its
Subsidiaries as at the end of such quarter, and the related consolidated or
combined statements of operations, reinvested earnings and changes in
financial position for the period from the end of the prior fiscal year to
the end of such quarter, accompanied by a certificate dated the date of
delivery thereof of an Authorized Officer to the effect that such financial
statements (subject to normal year-end audit adjustments not material in
scope or nature) (i) fairly present the consolidated financial position and
the results of operations of the Borrower and its Subsidiaries for the
period from the end of the prior fiscal year to the end of such quarter in
accordance with GAAP consistently applied throughout the period covered
thereby, and (ii) have been prepared on a basis consistent with the
financial statements for the same period furnished under Section 5.01(b)
hereof, except for changes in GAAP.
(e) Certificate of Accountants and Officers. Together with each
set of financial statements delivered pursuant to the provisions of Section
5.01(a) hereof, a certificate signed by the aforementioned independent
public accountants, in each case dated the date of the auditors' opinion on
such financial statements and stating, and together with each set of
financial statements delivered pursuant to the provisions of Section
5.01(b), 5.01(c), and 5.01(d) hereof, a certificate signed by an Authorized
Officer, in each case dated the date of such Authorized Officer's
certificate so required and stating, (i) the audit, review or examination
conducted in connection with the furnishing of such financial statements
included a review of the terms of this Agreement, and (ii) in making such
audit, review or examination, such certifying Person did not obtain
knowledge of any Default which had occurred during the period covered by
such financial statements, or if such certifying Person did obtain such
knowledge, a description of said Default. Together with each set of
financial statements delivered pursuant to Section 5.01(b), a certificate
signed by an Authorized Officer, setting forth the information and
calculations necessary to determine Tangible Adjusted Equity and compliance
of MI with the covenant set forth in Section 5.10 hereof as of the date of
such financial statements. Together with each set of financial statements
delivered pursuant to Sections 5.01(c) and 5.01(d), a certificate signed by
an Authorized Officer, setting forth the information and calculations
necessary to determine Available Cash, hereof as of the date of such
financial statements.
(f) Reports to SEC, Unitholders, Partners and Governmental
Authorities, HCLP Lenders. Promptly after the same are available, copies of
(a) all amendments to the certificate of incorporation of the Borrower and
of MI, (b) all regular and periodic reports filed by or on behalf of the
Borrower or by MI (excluding exhibits thereto) with the Securities and
Exchange Commission, (c) all proxy statements any regular or periodic
reports sent by MI to its stockholders in the form in which sent, (d) if
requested by any Bank, any regular or periodic financial reports which the
Borrower or MI may be required to file with any Governmental Authority
(other than (i) tax returns or reports, (ii) any reports the Borrower or MI
may be required to file with the Department of Energy, the Federal Energy
Regulatory Commission, or state oil and gas regulatory authorities and (iii)
such reports as may be classified as confidential by any Governmental
Authority pursuant to applicable law), and (e) any reports or notices
delivered by either Obligor or HCLP to the holders of any secured
Indebtedness of HCLP.
(g) Notices. As soon as possible, and in any event within five (5)
days after the Borrower and/or MI shall have become aware of the occurrence
thereof, written notice of, and the steps being taken by the Borrower and/or
MI with respect to the following:
(i) a Default,
(ii) the institution of any action, suit or proceeding at
law or in equity (or any material development in any
Existing Litigation) by or before any Governmental
Authority which, if adversely determined, could
reasonably be expected to cause a Material Adverse
Change,
(iii) the appointment of a trustee, receiver or other
custodian for MI or the Borrower, or a substantial
part of the property of MI or the Borrower, or the
commencement of any bankruptcy, reorganization, debt
arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or
liquidation proceeding in respect of MI or the
Borrower, and
(iv) any Termination Event with respect to any Plan, or the
institution of proceedings or the taking or expected
taking of any other action by the Borrower or any
member of the Controlled Group to terminate, withdraw
or partially withdraw from any Plan (in each case
notice of the foregoing to be delivered together with
whichever of the following may be applicable: (A) a
certificate of an Authorized Officer of the Borrower
setting forth details as to such Reportable Event and
the action that the Borrower proposes to take with
respect thereto, together with a copy of any notice of
such Reportable Event that may be required to be filed
with the PBGC or (B) any notice delivered by the PBGC
evidencing its intent to institute such proceedings or
any notice to the PBGC that such Plan is to be
terminated, as the case may be (the Borrower being
deemed to have all knowledge or knowledge of all facts
attributable to the administrator of any Plan)).
(h) Environmental Notices or Citations. Promptly upon the receipt
thereof by the Borrower, MI, any Guaranteeing Affiliate or any of their
respective Subsidiaries, a copy of any form of notice, summons, citation or
other written or oral communication received from the EPA, or any other
Governmental Authority, concerning (i) material violations or alleged
material violations of Environmental Laws, which seeks to impose material
liability therefor, (ii) any action or omission on the part of the Borrower,
MI, MLP, MOLP, any Guaranteeing Affiliate or any of their respective present
or former Subsidiaries in connection with Hazardous Substances which could
reasonably be expected to result in the imposition of liability therefor,
which liability, if imposed, could reasonably be expected to cause a
Material Adverse Change, including without limitation any notice of
potential responsibility under CERCLA, or (iii) a Lien upon any Mortgaged
Property, or a Lien arising under any Environmental Law against or in
connection with the Borrower, MI, any Guaranteeing Affiliate or their
respective present or former Subsidiaries, or any of their leased or owned
Property, wherever located, if the effect of such Lien could reasonably be
expected to cause a Material Adverse Change.
(i) Reserve Reports. (a) Prior to March 1 of each year, commencing
March 1, 1995, the Borrower shall furnish to each Bank a report (herein
called a "Reserve Report") in form consistent with reserve reports
previously furnished to the Agent, which Reserve Report shall be dated as of
the next preceding December 31, and shall set forth the material Oil and Gas
Properties then owned by the Borrower (and showing any additions to or
deletions from such Oil and Gas Properties made by the Borrower since the
date of the previous Reserve Report), the Proved Reserves attributable to
such Oil and Gas Properties and a projection of the rate of production and
net income with respect to the Proved Reserves as of the date of such
Reserve Report, all in accordance with the guidelines published by the
Securities and Exchange Commission, except as otherwise provided in the
definition of Special Reserve Value Computation. Each Reserve Report shall
include (a) a reserve report prepared by ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇ or such
other independent engineering consulting firm satisfactory to the Required
Banks covering at least seventy-five percent (75%) of the net present value
(determined in accordance with the guidelines published by the Securities
and Exchange Commission, except as otherwise provided in the definition of
Special Reserve Value Computation) of the Borrower's material Oil and Gas
Properties and (b) a reserve report prepared by the Borrower covering the
remaining percentage of such material Oil and Gas Properties of the
Borrower, provided, however, that the Agent shall have the right to approve
of the composition of the material Oil and Gas Properties covered in that
portion of the Reserve Report to be prepared by ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇ or
such other independent engineering consulting firm satisfactory to the
Required Banks.
(j) Other Information. Within a reasonable time after a request
therefor, and from time to time, such additional information regarding the
financial condition or business prospects of the Borrower, MI, or any
Guaranteeing Affiliate as any Bank may reasonably request through the Agent.
(k) Notice of Address and Change of Address. As soon as possible
and in any event within thirty (30) days after the Borrower or MI shall
change its address or its principal place of business, notice of the new
address or principal place of business.
Section 5.02. Compliance with Laws, Etc. Each Obligor will use its
best efforts to comply, and to cause each Subsidiary of the Borrower and
each Guaranteeing Affiliate to comply, in all material respects with all
applicable Legal Requirements. Without limiting the generality and coverage
of the foregoing, each Obligor shall comply, and shall cause each Subsidiary
of the Borrower and each Guaranteeing Affiliate to comply, in all material
respects with all Environmental Laws, and all laws, regulations, or
directives with respect to equal employment opportunity and employee health
and safety in all jurisdictions in which the Obligors or any of their
Subsidiaries do business; provided, however, that this Section 5.02 shall
not prevent the Obligors, any Subsidiary of the Borrower or any
Guaranteeing Affiliate from, in good faith and with reasonable diligence,
contesting the validity or application of any such laws or regulations by
appropriate legal proceedings. The Borrower shall promptly take all
appropriate Responses, remedial, corrective, cleanup, or restoration action
concerning the Release, discharge, or disposal of any Hazardous Substance.
Section 5.03. Maintenance of Insurance. Each Obligor will
maintain, and cause each Subsidiary of the Borrower and each Significant
Guaranteeing Affiliate to maintain, insurance with responsible and reputable
insurance companies or associations (except as to self-insurance which may
be included in the same form and up to the same limits as is customarily
maintained by companies similarly situated or as has been maintained in the
past by the Obligors and each Subsidiary of the Borrower) in such amounts
and covering such risks as are usually carried by companies engaged in
similar businesses and owning similar properties in the same general areas
in which the Obligors, or such Subsidiary of the Borrower or such
Significant Guaranteeing Affiliate operates, and, upon written request of
any Bank, will furnish to the Agent certificates or other writings setting
forth in reasonable detail the types and amounts of coverage, and the
insurer, with respect to each of its material insurance policies.
Section 5.04. Preservation of Existence, Etc. Each Obligor will
preserve and maintain, and cause each Subsidiary of the Borrower and each
Significant Guaranteeing Affiliate and to preserve and maintain, its
partnership or corporate existence, rights, franchises, and qualify and
remain qualified, and cause each such Subsidiary of the Borrower or
Significant Guaranteeing Affiliate to qualify and remain qualified, as a
foreign business entity in each jurisdiction in which qualification is
necessary or desirable in view of its business and operations or the
ownership of its properties and where failure to qualify could reasonably be
expected to cause a Material Adverse Change; provided, however, that nothing
herein contained shall prevent any transaction permitted by Section 6.06.
Section 5.05. Payment of Taxes, Etc. Each Obligor will pay and
discharge and cause each Subsidiary of the Borrower and each Guaranteeing
Affiliate and with which it files consolidated, combined or unitary returns
to pay and discharge, before the same shall become delinquent, (a) all
taxes, assessments and governmental charges or levies imposed upon it or
upon its income or profits or property that are material in amount, prior to
the date on which penalties attach thereto and (b) all lawful claims that
are material in amount which, if unpaid, might by law become a Lien upon its
property; provided, however, that neither of the Obligors nor any such
Subsidiary of the Borrower nor any Guaranteeing Affiliate shall be required
to pay or discharge any such tax, assessment, charge, levy, or claim which
is being contested in good faith and by appropriate proceedings, and with
respect to which reserves in conformity with GAAP have been provided.
Section 5.06. Visitation and Discussion. At any reasonable time
and from time to time, upon reasonable notice, each Obligor will, and will
cause each Subsidiary of the Borrower and each Guaranteeing Affiliate to,
permit the Agent or any of its agents or representatives thereof, to examine
and make copies of and abstracts from the records and books of account of,
and visit and inspect at its reasonable discretion the properties of, such
Obligor, and any such Subsidiary of the Borrower or Guaranteeing Affiliate
to discuss the affairs, finances and accounts of the Obligors and any such
Subsidiary of the Borrower or Guaranteeing Affiliate with any of their (or,
in the case of the Borrower, its general partners) respective officers or
directors, independent public accountants and independent petroleum
engineers of the Obligors all at such reasonable times and as often as may
reasonably be requested by the Agent or any Bank; provided, however, that a
representative of the Obligors shall be permitted to be present during any
such discussions with any such independent public accountants or, any such
independent petroleum engineers.
Section 5.07. Maintenance of Property. The Obligors, each
Subsidiary of the Borrower and each Guaranteeing Affiliate, will maintain
their owned or operated property, equipment, buildings and fixtures in good
condition and repair.
Section 5.08. Collateral. The Obligors will, at all times prior to
the termination of this Agreement and repayment of the Obligations in full,
cause the Obligations to be secured by Acceptable Security Interests in the
Collateral, subject only to Permitted Liens.
Section 5.09. Title Assurances. The Borrower will furnish or cause
to be furnished to the Agent such information in its possession or
reasonably available to it with respect to title to the Mortgaged Properties
as the Agent may reasonably request and shall cooperate with the Agent and
its counsel in analyzing and, where appropriate in the reasonable opinion
of the Agent, correcting (at the Borrower's expense) defects in such title.
Section 5.10. Tangible Equity. MI will at all times have Tangible
Adjusted Equity of at least $50,000,000.
Section 5.11. Lock Box Account. On the 15th day of each month, the
Borrower shall deliver to the Agent a statement in the form of Exhibit R
detailing the funds deposited in the Lock Box Account during the previous
month.
Section 5.12. Further Assurances. The Borrower, at its own
expense, shall (i) promptly give all notices, obtain all consents and
waivers and take all such other actions as may be required in order to
legally and effectively create, establish, perfect or continue the Liens
under the Security Documents, and (ii) promptly do, or cause to be done, all
such other acts and things as the Agent or the Required Banks may request in
order to legally and effectively create, establish, perfect or continue the
Liens intended under the Security Documents.
Section 5.13. HCLP Related Collateral. In the event any money or
property is to be received by or for the benefit of the Borrower which
constitutes Collateral under the Borrower Pledge Agreement when a Default
has occurred and is continuing, the Borrower shall cause HCLP to deliver
such Collateral which is in the form of cash directly to the Agent to be
held as collateral security for the benefit of the Banks in a separate
collateral account to be established by the Agent for such purpose, and the
Borrower shall execute and deliver to the Agent any additional collateral
documentation which may reasonably be required by the Agent to continue
perfection of the Lien of the Agent on any such money or property
constituting such Collateral for the benefit of the Banks in accordance with
applicable law.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Obligations shall remain unpaid, any Letter of Credit
shall remain outstanding, or any Bank shall have any Commitment hereunder,
the Obligors jointly and severally agree, unless the Required Banks shall
otherwise consent in writing, to comply with the following covenants.
Section 6.01. Limitation on Sale or Transfer of Property.
(a) The Borrower will not sell, assign, lease, transfer, convey or
otherwise dispose of any of the Mortgaged Properties; provided, however,
that if no Default has occurred and is continuing or would result from such
sale or transfer, this covenant shall not apply to farm-outs or other
similar transactions, including any assignments made pursuant thereto,
entered into in the ordinary course of business, which lead to or encourage
the exploration or development of the Mortgaged Properties, or other sales
or transfers in the ordinary course of business, provided that such
transactions do not, individually or in the aggregate, (i) reduce the
Borrower's working interests or net revenue interests, or increase the
Borrower's working interests without a comparable increase in the Borrower's
net revenue interests, in its Proved Reserves as indicated in the most
recent Reserve Report in any significant respect, or (ii) materially and
adversely affect the collateral value of the Mortgaged Properties to the
Banks.
(b) The Borrower will not sell, lease, transfer, convey, or otherwise
dispose of (i) any Collateral (as defined in the Borrower Pledge Agreement),
or (ii) any HCLP Partnership Interest owned by the Borrower. In addition,
the Borrower will not give its consent, as limited partner of HCLP, to the
sale or other disposition by HCLP of all or substantially all of the
Property of HCLP outside the ordinary course of business of HCLP.
(c) MI will not sell, lease, transfer, convey, or otherwise dispose of
any Collateral (as defined in the MI Pledge Agreement).
Section 6.02. Restrictions on Dividends, Distributions and
Redemptions. Neither MI nor the Borrower shall declare or pay any dividends
or other distributions, directly or indirectly, in respect of any class of
capital stock of MI or the Borrower now or hereafter outstanding, other than
(i) dividends or other distributions payable solely in additional shares of
a class of capital stock of MI to the holders of that class of stock, (ii)
dividends or other distributions payable solely in Common Stock of MI to
holders of any class of capital stock of MI, and (iii) dividends or other
distributions of rights or warrants to acquire shares of any class of
capital stock of MI. Neither MI nor any of its Subsidiaries will redeem,
retire, purchase or otherwise acquire, directly or indirectly, any capital
stock of MI or any options or warrants to purchase same.
Section 6.03. Restrictions on Investments, Loans or Advances by MI
or Guaranteeing Affiliates. After the date of this Agreement, MI will not
invest in, or contribute, loan, or advance to, any Person any assets or
funds, and MI will not permit any Guaranteeing Affiliate to invest in, or
contribute, loan or advance any assets or funds to any Person unless:
(a) (i) such Person is MI or a Wholly-Owned Subsidiary of MI (other
than Mesa Capital) and (ii) any such Wholly-Owned Subsidiary of MI (other
than HCLP or the Borrower), at the time of receipt of such investment,
contribution, loan or advance from MI or such Guaranteeing Affiliate,
delivers to the Agent an executed Guaranty pursuant to which such
Wholly-Owned Subsidiary guarantees the Obligations to the extent, but only
to the extent, of the aggregate amount of all such investments in or
contribution, loan or advances to such Wholly-Owned Subsidiary by or from MI
or such Guaranteeing Affiliate made after the date of this Agreement; or
(b) such Person is a key employee or officer of MI, the Borrower,
or any Wholly-Owned Subsidiary of the Borrower, provided, however, that the
sum of (i) all such loans outstanding under this Section 6.03(b), (ii) all
loans outstanding under Section 6.04(f) hereof, and (iii) all Indebtedness
guaranteed under Accommodation Obligations permitted by Section 6.05(g)
hereof, shall not exceed an aggregate principal amount at any time of
$5,000,000; or
(c) such Person is HCLP, and the aggregate amount of all such
investments in, and contributions, loans or advances to HCLP, when
aggregated with the sum of all investments in, contributions, loans or
advances made to HCLP by the Borrower after the date of this Agreement does
not exceed $10,000,000;
provided that prior to the making of any such contribution, loan, advance or
investment and after giving pro forma effect to such contribution, loan,
advance or investment, no Default has occurred and is continuing.
Section 6.04. Restrictions on Investments, Loans or Advances by the
Borrower and its Subsidiaries. After the date of this Agreement, the
Borrower will not, nor will the Borrower permit any of its Subsidiaries to,
make or permit to exist any loans, advances or capital contributions to, or
make any investment in, or purchase or commit to purchase any stock or other
securities or evidences of indebtedness of or interests in any Person,
except the following:
(a) as shown on Schedule 6.04 attached hereto;
(b) Permitted Investments;
(c) contributions, advances or loans made to MI;
(d) current trade and customer accounts receivable which are for
goods furnished or services rendered in the ordinary course of business and
are payable in accordance with customary trade terms;
(e) any loan evidenced by a note received by the Borrower in
connection with the credit sale of assets owned by the Borrower;
(f) provided that no Default has occurred and is continuing, loans
to key employees or officers of MI, the Borrower, or any Wholly-Owned
Subsidiary of the Borrower, provided, however, that the sum of (i) all such
loans outstanding under this Section 6.04(f), (ii) all loans outstanding
under Section 6.03(c) hereof, and (iii) all Indebtedness guaranteed under
Accommodation Obligations permitted by Section 6.05(g) hereof, shall not
exceed an aggregate principal amount at any one time of $5,000,000; and
(g) provided that no Default has occurred and is continuing,
investments in, and contributions, loans or advances to HCLP, provided that
the aggregate amount of all investments in and contributions, loans or
advances to HCLP from the Obligors after the date of this Agreement does not
exceed $10,000,000;
provided that prior to the making of any such contribution, loan, advance or
investment and after giving pro forma effect to such contribution, loan,
advance or investment, no Default has occurred and is continuing.
Section 6.05. Limitation on Accommodation Obligations. Neither
Obligor will, nor will it permit any of its respective Subsidiaries to,
create, incur, assume or otherwise become liable for, any Accommodation
Obligations other than as a result of a partner's legal liability for
partnership obligations with respect to HCLP, except the following:
(a) as shown in Schedule 6.05 attached hereto,
(b) the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection,
(c) Accommodation Obligations in respect of the obligations of the
Borrower or any Subsidiary of the Borrower,
(d) Accommodation Obligations in respect of Indebtedness under this
Agreement,
(e) repurchase agreements relating to investments described in
clauses (a) and (b) in the definition of "Permitted Investments",
(f) [Intentionally left blank]
(g) Accommodation Obligations in respect of loans to key employees
or officers of MI, the Borrower, or any Wholly-Owned Subsidiary of the
Borrower, provided, however, that the sum of (i) the aggregate amount of
Indebtedness guaranteed under Accommodation Obligations permitted by this
Section 6.05(g), (ii) all loans outstanding under Section 6.03(b) hereof,
and (iii) all loans under Section 6.04(f) hereof, shall not exceed an
aggregate principal amount at any time of $5,000,000,
(h) Accommodation Obligations of MI or a Guaranteeing Affiliate or
Mesa Holding in respect of any obligations of MI or a Guaranteeing
Affiliate, other than Indebtedness prohibited by Section 6.10; provided,
however, that any such Accommodation Obligations of MI or a Guaranteeing
Affiliate in respect of Margin Debt permitted by Section 6.10 shall be
expressly subordinated in right of payment to payment in full of all
obligations of MI or such Guaranteeing Affiliate under this Agreement, the
Notes and the Guaranties, all pursuant to the subordination provisions set
forth in Exhibit O attached hereto,
(i) Accommodation Obligations of MI or a Guaranteeing Affiliate in
respect of any obligations of Mesa Holding, other than Indebtedness
prohibited by Section 6.10, provided, that any such Accommodation
Obligations are expressly subordinated in right of payment to payment in
full of all obligations of MI or such Guaranteeing Affiliate under this
Agreement, the Notes and the Guaranties, all pursuant to the subordination
provisions set forth in Exhibit O attached hereto, and
(j) Accommodation Obligations in respect of surety bonds, letters
of credit or guarantees posted to local, state and/or federal agencies in
conjunction with the oil and gas operations of a Subsidiary of MI.
No Accommodation Obligation permitted under subclauses (c), (e), (g), (h) or
(i) above shall be entered into unless prior to the making of any such
Accommodation Obligation and after giving pro forma effect to the issuance
of such Accommodation Obligation, no Default has or will have occurred and
be continuing.
Section 6.06. Limitation on Merger and Consolidation. Neither MI
nor the Borrower will, nor will the Borrower permit any of its Subsidiaries
to, directly or indirectly, be a party to any transaction in the nature of a
merger or consolidation, other than (i) the merger of any Subsidiary of MI
or the Borrower into the Borrower, MI or any other Subsidiary of MI or the
Borrower or (ii) the merger of the Borrower into a Wholly-Owned Subsidiary
of the Borrower if the sole purpose of the merger is to change the state of
formation of the Borrower; provided, in the case of any such transaction
involving the Borrower in which the Borrower is not the surviving entity,
that documentation reasonably acceptable to the Required Banks is entered
into providing that any and all of the Borrower's obligations hereunder are
assumed by its successor.
Section 6.07. Limitation on Liens. Except for the Liens required
by this Agreement, neither Obligor will, nor
will it permit any of its Subsidiaries to, create, incur, assume or suffer
to exist, directly or indirectly, any Lien on any of its or their respective
Properties, except:
(i) Liens specifically permitted under the Mortgage or
incurred in the ordinary course of business imposed by
applicable law including, but not limited to, Liens
securing taxes, assessments or other governmental
charges or levies or the claims of materialmen,
mechanics, carriers, warehousemen, landlords and other
similar Persons but only to the extent that payment
thereof is paid currently in the normal course of
business or is being contested in good faith by
appropriate proceedings diligently conducted and with
respect to which appropriate reserves have been
established;
(ii) imperfections of title to such properties and assets
as do not in the aggregate (including all other
Permitted Liens) materially detract from the value
thereof in the business of such Obligor or such
Subsidiary, as the case may be;
(iii) Liens arising under operating, pooling or unitization
agreements of a scope and nature customary in the oil
and gas industry;
(iv) pledges or deposits, including bonds, to secure public
or statutory obligations, to secure performance in
connection with bids or contracts or to secure surety,
stay, appeal or customer's bonds to the extent that
payment of the underlying obligations shall not at the
time be due or is being contested in good faith by
appropriate proceedings diligently conducted and with
respect to which appropriate reserves have
been established;
(v) Liens (other than material Environmental Liens)
existing with respect to property acquired by such
Obligor or Subsidiary after the date of this Agreement
through purchase, merger, consolidation or otherwise;
(vi) Liens created by HCLP covering the Hugoton Properties;
(vii) Liens on Margin Stock to secure Permitted
Indebtedness;
(viii) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in
part, but without any increase in the amount secured,
of any Lien referred to in clauses (i) through (v)
above;
(ix) Liens on Property constituting Collateral under the
Borrower Pledge Agreement and Liens on the Mortgaged
Property, provided that all such Liens are (x) granted
solely in favor of the Secured Trustee for the benefit
of the Secured Notes, (y) second in priority and
expressly subordinate to the Liens on such Collateral
and Mortgaged Property granted to the Agent for the
benefit of the Banks, and (z) subject to the
restrictions set forth in the Intercreditor Agreement;
(x) Liens on the HCLP Partnership Interests not
constituting part of the Collateral as of the
Effective Date provided that (x) such Liens secure
only the Obligations and the Secured Notes, (y) such
Liens are second in priority to first Liens granted to
the Agent on such HCLP Partnership Interests as
security for the Obligations simultaneously with the
granting of such second Liens to secure such Secured
Notes, and (z) such Liens are subject to the terms of
the Intercreditor Agreement; and
(xi) Liens resulting from the creation, incurrence,
issuance, assumption or guaranty of any Gulf Coast
Production Payment;
Section 6.08. Prohibition Upon Payments on the Subordinated Notes.
Except as contemplated by Section 2.15, neither the Borrower nor MI will,
and the Borrower will not permit Mesa Capital to, (i) exercise any right
under the Indentures to optionally redeem or to defease the Subordinated
Notes issued pursuant thereto, (ii) otherwise prepay any amount evidenced by
the Subordinated Notes prior to the stated maturity of such amount, (iii)
purchase any of the Subordinated Notes prior to their stated maturity, or
(iv) make any offer to purchase or send any notice of redemption or
defeasance in connection with the Subordinated Notes; provided, however,
that, notwithstanding the foregoing, if no Default has occurred and is
continuing immediately prior thereto and after giving effect thereto, the
Obligors may redeem, defease, prepay or purchase Subordinated Notes (and
take any related action referenced in clause (iv) above) through the
application of the net proceeds from the issuance or sale of Indebtedness
incurred pursuant to clause (vii) of the definition of "Permitted
Indebtedness" or of equity securities of MI.
Section 6.09. Operating Losses. The Obligors shall not suffer any
loss from operations in respect of any Calendar Quarter, excluding for
purposes of this Section 6.09 expenses attributable to Exploration Costs and
depreciation, depletion and amortization (including write-downs of Oil and
Gas Properties in accordance with GAAP).
Section 6.10. Limitation on Indebtedness. The Borrower shall not,
and shall not permit any of its Subsidiaries to create, incur, assume or
suffer to exist or otherwise become or remain liable with respect to, any
Indebtedness except Permitted Indebtedness. MI shall not, and shall not
permit any of its Subsidiaries to create, incur, assume or suffer to exist
or otherwise become or remain liable with respect to, any Indebtedness
except Permitted Indebtedness. Notwithstanding the foregoing, no
Indebtedness permitted under subclauses (iv), and (vi) of the definition of
"Permitted Indebtedness" shall be incurred, created or assumed unless
immediately prior to the incurrence, creation or assumption of such
Indebtedness, after giving pro forma effect thereto, no Default has or will
have occurred and be continuing.
Section 6.11. Amendments. (a) The Obligors shall not, and shall
not permit Mesa Capital to, amend,
waive or terminate any provision in any agreement governing the Subordinated
Notes.
(b) The Obligors shall not amend, modify, supplement, waive or
terminate the B Contract.
(c) The Borrower shall not agree to any amendment of the First Amended
and Restated Agreement of Limited Partnership of HCLP which could materially
and adversely affect the lien of the Banks on the Collateral (as defined in
the Borrower Pledge Agreement), or the value of such Collateral or the
interests of the Banks under the Credit Documents.
Section 6.12. Compliance with ERISA. Neither Obligor will, or will
permit any Subsidiary of the Borrower or any Guaranteeing Affiliate to, (a)
terminate, or permit any Affiliate to terminate, any Plan so as to result in
any liability of either Obligor, any Subsidiary of the Borrower, any
Guaranteeing Affiliate, or any Affiliate of the foregoing to the PBGC, which
liability could reasonably be expected to cause a Material Adverse Change,
or (b) permit the occurrence of any Termination Event, or any other event or
condition, which presents a material (in the opinion of the Required Banks)
risk of such a termination by the PBGC of any Plan.
Section 6.13. Other Agreements. Neither the Borrower nor MI will,
or will permit any Subsidiary of the Borrower or any Guaranteeing Affiliate
to, enter into any agreement or instrument containing any provision which
would be violated or breached by the performance by the Borrower or MI or
any Guaranteeing Affiliate of its obligations hereunder or under any other
Credit Document.
Section 6.14. Available Cash. The Obligors will not permit
Available Cash to be less than $32,500,000 at any time.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default. The occurrence of any of the
following events shall constitute an "Event of Default" under any Credit
Document:
(a) Nonpayment. The Obligors shall fail to pay when due and
payable any principal on any Note or any LC Obligation, when the same
becomes due and payable, or any interest or any such Note or LC Obligation
or any fee or other amount payable hereunder, and such failure to pay
continues for five (5) calendar days after any such payment became due and
payable;
(b) Representation and Warranties Untrue. Any representation or
warranty (i) made or deemed to be made by either Obligor or by any
Guaranteeing Affiliate in this Agreement or any other Credit Document or in
connection with this Agreement or any other Credit Document, or (ii) made or
deemed to be made as a consequence of the giving of any Notice of Borrowing
or Request for Letter of Credit, or the acceptance of the proceeds of any
Borrowing or the issuance of any Letter of Credit, shall prove to have been
incorrect in any material respect when made or deemed to be made;
(c) Covenant Breaches. Either Obligor shall (i) fail to perform or
observe any term, covenant or agreement contained in Sections 5.01(g),
5.01(h) or 5.10, or Article VI of this Agreement on its part to be performed
or observed or (ii) fail to perform or observe any other term or covenant or
agreement set forth in this Agreement or in any other Credit Document on its
part to be performed or observed which is not covered by clause (i) above or
any other provision of this Section 7.01 if such failure shall remain
unremedied for thirty (30) calendar days after the earlier of (A) written
notice of such default given to such Person by the Agent or any Bank or (B)
such Person's actual knowledge of such default; provided, however, that a
failure by MI to comply with the covenant contained in Section 5.10 hereof
due to an increase in Indebtedness shall constitute an Event of Default if
such failure shall continue for a period of five (5) calendar days;
(d) Cross-Defaults. (i) Either Obligor, any Subsidiary of the
Borrower, any Guaranteeing Affiliate or HCLP shall fail to pay any principal
of or premium or interest on its Indebtedness which is outstanding in a
principal amount of at least $10,000,000 individually or when aggregated
with all such Indebtedness of the Obligors, the Subsidiaries of the
Borrower, the Guaranteeing Affiliates and HCLP so in default (but excluding
Indebtedness hereunder) when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise),
and such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Indebtedness; (ii)
any other event shall occur or condition shall exist under any agreement or
instrument relating to such Indebtedness so in default, and shall be
continuing after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such
Indebtedness; or (iii) any such Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof;
(e) Insolvency. Either Obligor, any Subsidiary of the Borrower, or
any Guaranteeing Affiliate shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors;
or any proceeding shall be instituted by or against either Obligor, any
Subsidiary of the Borrower or any Guaranteeing Affiliate, seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official
for it or for any substantial part of its property and, in the case of any
such proceeding instituted against either Obligor, any such Subsidiary of
the Borrower, or any such Guaranteeing Affiliate, either such proceeding is
consented to or acquiesced in by such Person or shall remain undismissed for
a period of 45 days or any of the actions sought in such proceeding shall
occur; or either Obligor, any such Subsidiary of the Borrower, or any such
Guaranteeing Affiliate, shall take any corporate action to authorize any of
the actions set forth above in this subsection (e);
(f) Judgments. Any judgment or order for the payment of money in
excess of $10,000,000 shall be rendered against either Obligor, any
Subsidiary of the Borrower or any Guaranteeing Affiliate, and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) such judgment or order shall at any time
thereafter remain undischarged for a period of more than thirty (30) days
(or such longer period, if applicable, before execution on such judgment may
be lawfully made) during which the execution thereon is not being
effectively stayed, released, bonded or vacated;
(g) Non-Compliance with ERISA. (i) Any Person shall engage in any
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975
of the Code) involving any Plan and such prohibited transaction shall
continue uncorrected for 10 days after notice of the existence of such
prohibited transaction has been given to either of the Obligors by the
Department of Labor, the Internal Revenue Service or any other Person, (ii)
any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan, (iii) a
Reportable Event shall occur with respect to, or proceedings by the PBGC
shall commence to have a trustee appointed, or a trustee shall be appointed,
to administer or to terminate any Plan, which Reportable Event or
institution of proceedings is, in the reasonable opinion of the Required
Banks, likely to result in the termination of such Plan for purposes of
Title IV of ERISA, and, in the case of a Reportable Event, the continuance
of such Reportable Event unremedied for ten days after notice of such
Reportable Event pursuant to Section 4043(a), (c) or (d) of ERISA is given
or the continuance of such proceedings for ten days after commencement
thereof, as the case may be, (iv) any Plan shall terminate for purposes of
Title IV of ERISA, or (v) any other event or condition shall occur or exist
with respect to a Plan and in each case in clauses (i) through (v) above,
such event or condition, together with all other such events or conditions,
if any, could subject the Borrower or any of its Subsidiaries) or MI to any
tax, penalty or other liabilities which in the aggregate would be material
in relation to the business, operations, property or financial or other
condition of the Borrower and its Subsidiaries taken as a whole or MI and
its Subsidiaries taken as a whole.
(h) Invalidity of Security Documents or Guaranties. Any Security
Document shall for any reason, except to the extent permitted by the terms
thereof, cease to create a valid and perfected first priority security
interest in any of the Collateral purported to be covered thereby or any
provision of any Guaranty shall for any reason cease to be valid and binding
on the appropriate Guarantor or the applicable Guaranteeing Affiliate shall
so state in writing;
(i) Change of Control. A Change of Control (as defined in Section
4.16 of the Secured Indenture) shall occur;
(j) Default under Agreements. An "Event of Default" (as therein
defined) shall occur with respect to (i) the performance or observance by
the Borrower or MI or any Subsidiary of the Borrower of any of its or their
obligations under any of the Credit Documents to which any of them is a
party or (ii) the performance or observance by any Guaranteeing Affiliate of
any of its or their obligations under a Guaranty; or
(k) Sale or Disposition of HCLP Assets. HCLP shall sell, assign or
otherwise dispose of all or substantially all of its Property in a single
transaction or series of related transactions.
Section 7.02. Optional Acceleration. If any Event of Default
(other than an Event of Default pursuant to paragraph (e) of Section 7.01)
shall have occurred and be continuing, then, and in any such event,
(a) the Agent (i) shall at the request, or may with the consent, of
the Required Banks, by notice to the Obligors, declare the obligation of
each Bank to make Advances and the obligation of the Agent to issue Letters
of Credit to be terminated, whereupon the same shall forthwith terminate,
and (ii) shall at the request, or may with the consent, of the Required
Banks, by notice to the Obligors, declare the Notes, the LC Obligations, all
interest thereon and all other amounts payable under this Agreement and the
other Credit Documents (including, without limitation, contingent
obligations under outstanding Letters of Credit) to be forthwith due and
payable, whereupon the Notes, the LC Obligation, all such interest and all
such other amounts shall become and be forthwith due and payable in full,
without presentment, demand, protest or further notice of any kind to either
Obligor, any Guaranteeing Affiliate or any other Person (including, without
limitation, any notice of intent to accelerate), all of which are hereby
expressly waived by each of the Obligors;
(b) the Obligors shall, on demand of the Agent deposit with the
Agent into the Cash Collateral Account an amount of cash equal to the Letter
of Credit Exposure as security for all obligations in connection with
Letters of Credit under this Agreement and each Letter of Credit Document,
to the extent such obligations are not otherwise paid at such time; and
(c) the Agent shall at the request, or may with the consent, of the
Required Banks proceed to enforce its rights under the Security Documents
for the ratable benefit of the Banks by appropriate proceedings.
Section 7.03. Automatic Acceleration. If any Event of Default
pursuant to paragraph (e) of Section 7.01 shall occur,
(a) the obligation of each Bank to make Advances and the obligation
of the Agent to issue Letters of Credit shall immediately and automatically
be terminated and the Notes, the LC Obligations, all interest thereon and
all other amounts payable under this Agreement and the other Credit
Documents shall immediately and automatically become and be due and payable
in full (including, without limitation, contingent obligations under
outstanding Letters of Credit), without presentment, demand, protest or any
notice of any kind to either Obligor, any Guaranteeing Affiliate, or any
other Person (including, without limitation, any notice of intent to
accelerate or notice of acceleration), all of which are hereby expressly
waived by each of the Obligors;
(b) the Obligors shall deposit with the Agent into the Cash
Collateral Account an amount of cash equal to the outstanding Letter of
Credit Exposure as security for all obligations in connection with Letters
of Credit under this Agreement and each Letter of Credit Document, to the
extent such obligations are not otherwise paid at such time; and
(c) the Agent shall at the request, or may with the consent, of the
Required Banks proceed to enforce its rights under the Security Documents
for the ratable benefit of the Banks by appropriate proceedings.
Section 7.04. Cash Collateral.
(a) Pledge. Each of the Obligors hereby pledges, and grants to the
Agent for the ratable benefit of the Banks a security interest in all funds
held in the Cash Collateral Account from time to time and all proceeds
thereof, as security for the payment of the Obligations, including without
limitation all LC Obligations. Neither Obligor nor any Person claiming on
behalf of or through such Obligor shall have any right to withdraw any of
the funds held in the Cash Collateral Account, except as otherwise provided
in this Section 7.04.
(b) Application against LC Obligations. The Agent may, at any time
or from time to time, apply funds then held in the Cash Collateral Account
to the payment of any LC Obligations owing to the Agent, in such order as
the Agent may elect, as shall have become or shall become due and payable by
the Obligors to the Agent under this Agreement in connection with the
Letters of Credit.
(c) Duty of Care. The Agent shall exercise reasonable care in the
custody and preservation of any funds held in the Cash Collateral Account
and shall be deemed to have exercised such care if such funds are accorded
treatment substantially equivalent to that which the Agent accords its own
property, it being understood that the Agent shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any such funds.
Section 7.05. Non-exclusivity of Remedies. No remedy conferred
upon the Agent is intended to be exclusive of any other remedy, and each
remedy shall be cumulative of all other remedies existing by contract, at
law, in equity, by statute or otherwise. Notwithstanding the foregoing, the
effect as an Event of Default of any event described in Section 7.01(a) or
Section 7.01(e) hereof may be waived only in writing by all of the Banks
upon the exercise of their independent judgment, but in connection with any
Event of Default described in Section 7.01(a) and Section 7.01(e) that
requires action on the part of the Agent, the Agent shall act or not act
under Section 7.02 or 7.03 as instructed by the Required Banks.
ARTICLE VIII
THE AGENT
Section 8.01. Authorization and Action. Each Bank hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof and of the other Credit Documents, together with such
powers as are reasonably incidental thereto. As to any matters not
expressly provided for by this Agreement or any other Credit Document
(including, without limitation, enforcement or collection of the Notes), the
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 Required Banks, and such instructions shall be binding upon all Banks
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement, any other Credit Document, or
applicable law.
Section 8.02. Agent's Reliance, Etc. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken (including the Agent's own negligence) by it or
them under or in connection with this Agreement or the other Credit
Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Agent: (a) may treat the payee of any Note as the holder thereof until the
Agent receives written notice of the assignment or transfer thereof signed
by such payee and in form satisfactory to the Agent; (b) may consult with
legal counsel (including counsel for the Obligors or any Guaranteeing
Affiliate), 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 Bank and shall not
be responsible to any Bank for any statements, warranties or representations
made in or in connection with this Agreement or the other Credit 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 this Agreement
or any other Credit Document on the part of the Obligors or any Guaranteeing
Affiliate or to inspect the property (including the books and records) of
the Obligors or any Guaranteeing Affiliate; (e) shall not be responsible to
any Bank for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Credit
Document; and (f) shall incur no liability under or in respect of this
Agreement or any other Credit Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties.
Section 8.03. Societe Generale and Its Affiliates. With respect to
its Commitment, its Pro Rata Share of the Letter of Credit Exposure, the
Advances made by it and the Note issued to it, Societe Generale, Southwest
Agency shall have the same rights and powers under this Agreement as any
other Bank and may exercise the same as though it were not the Agent. The
term "Bank" or "Banks" shall, unless otherwise expressly indicated, include
Societe Generale, Southwest Agency in its individual capacity. Societe
Generale, Southwest Agency and its affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any
kind of business with, the Obligors, any Guaranteeing Affiliate, any
Subsidiaries of the Borrower or MI, and any Person who may do business with
or own securities of the Obligors, any Guaranteeing Affiliate, or any such
Subsidiary, all as if Societe Generale, Southwest Agency were not the Agent
hereunder and without any duty to account therefor to the Banks.
Section 8.04. Bank Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank and
based on the Financial Statements and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other Bank and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under this Agreement.
Section 8.05. Indemnification. The Banks severally agree to
indemnify the Agent (to the extent not reimbursed by the Obligors),
according to their respective Pro Rata Shares from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against the Agent in any
way relating to or arising out of this Agreement or any action taken or
omitted by the Agent under this Agreement or any other Credit Document
(including the Agent's own negligence), provided that no Bank shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank agrees to reimburse the Agent
promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement or any other Credit Document, to the extent that the Agent are not
reimbursed for such expenses by the Obligors.
Section 8.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Obligors and may be
removed at any time with or without cause by the Required Banks upon receipt
of written notice from the Required Banks to such effect. Upon any such
resignation or removal, the Required Banks shall have the right to appoint a
successor Agent with the consent of the Obligors, which consent shall not be
unreasonably withheld. If no successor Agent shall have been so appointed by
the Required Banks with the consent of the Obligors, and shall have accepted
such appointment, within thirty (30) days after the retiring Agent's giving
of notice of resignation or the Required Banks' removal of the retiring
Agent, then the retiring Agent may, on behalf of the Banks and the Obligors,
appoint a successor Agent, which shall be a commercial bank organized under
the laws of the United States of America or of any State thereof and having
a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement and
the other Credit Documents, except that the retiring Agent shall remain the
issuer with respect to any Letters of Credit outstanding on the effective
date of its resignation or removal and the provisions affecting the Agent
with respect to such Letters of Credit shall inure to the benefit of the
retiring Agent until the termination of all such Letters of Credit. After
any retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Article IX shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement
and the other Credit Documents.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, the Notes, or any other Credit Document, nor
consent to any departure by the Obligors or the Guaranteeing Affiliates
therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Banks, and then such waiver or consent
shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or
consent shall, unless in writing and signed by all the Banks, do any of the
following: (a) waive any of the conditions specified in Section 3.01, 3.02
(if and to the extent that the Borrowing which is the subject of such waiver
would involve an increase in the aggregate outstanding amount of Advances
over the aggregate amount of Advances outstanding immediately prior to such
Borrowing), 3.03, or 3.04 (b) increase the aggregate Commitments of the
Banks or subject the Banks to any additional obligations, (c) reduce the
principal of, or interest on, the Notes, the LC Obligations, or any fees or
other amounts payable hereunder or under any other Credit Document, (d)
postpone any date fixed for any payment of principal of, or interest on, the
Notes, the LC Obligations, or any fees or other amounts payable hereunder,
(e) change the definition of "Required Banks", or the number of Banks which
shall be required for the Banks or any of them to take any action hereunder
or under any other Credit Document, (f) amend Section 2.12 or this Section
9.01, (g) waive an Event of Default described in Section 7.01(a) or 7.01(e)
hereof, or (h) release any Collateral from the Lien of the Security
Documents except pursuant to the terms of this Agreement and the Security
Documents; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition to the Banks
required above to take such action, affect the rights or duties of the Agent
under this Agreement or any other Credit Document.
Section 9.02. Notices, Etc. All notices and other communications
shall be in writing (including telecopy communication) shall be personally
delivered or sent by registered or certified mail (postage prepaid, return
receipt requested), or by telecopy, or by prepaid courier service to any
party at its address or teletransmission number specified under its name on
Exhibit B attached hereto or at such other address or teletransmission
number as shall be designated by such party in a written notice each of to
the other parties. All such notices and communications shall (i) when
mailed, be effective on the third Business Day after deposit in the mails,
(ii) when personally delivered or sent by courier, be effective when
received by the recipient thereof, or (iii) when telecopied, be effective
when telecopy transmission is completed and receipt is confirmed, except
that notices and communications to the Agent pursuant to Article II or VIII
shall not be effective until received by the Agent.
Section 9.03. No Waiver; Remedies. No failure on the part of any
Bank or the Agent to exercise, and no delay in exercising, any right
hereunder or under any Note or any other Credit Document shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 9.04. Costs and Expenses. The Obligors jointly and
severally agree to pay on demand all out-of-pocket costs and expenses in
connection with the preparation, execution, delivery, administration,
modification and amendment of this Agreement, the Notes and the other Credit
Documents including, without limitation, the reasonable fees and
out-of-pocket expenses of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P., counsel for the
Agent with respect thereto and with respect to advising the Agent as to its
rights and responsibilities under this Agreement, and all reasonable
out-of-pocket costs and expenses, if any, of Agent and of each Bank
(including, without limitation, reasonable counsel fees and expenses of the
Agent and each Bank) in connection with the enforcement of this Agreement,
the Notes and the other Credit Documents (whether through negotiations,
legal proceedings or otherwise).
Section 9.05. Right of Set-off. Upon the occurrence and during the
continuance of any Default, each Bank is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Bank to or for the credit or the account of either Obligor against any and
all of the Obligations. Each Bank agrees promptly to notify the Obligors
after any such set-off and application made by such Bank, provided that the
failure to give such notice shall not affect the validity of such set-off
and application. The rights of each Bank under this Section are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) which such Bank may have. This provision shall not imply any
obligation of the Borrower or MI to maintain any balance or deposit with any
Bank.
Section 9.06. Binding Effect. Subject to Section 3.01, this
Agreement shall become effective when it shall have been executed by the
Obligors and the Agent, and when the Agent shall have, as to each Bank,
either received a counterpart hereof executed by such Bank or been notified
by such Bank that such Bank has executed it. This Agreement and the other
Credit Documents shall be binding upon the Obligors, the Guaranteeing
Affiliates, the Banks, the Agent and their respective successors and
assigns, and shall inure to the benefit of the Obligors, the Guaranteeing
Affiliates, the Banks, the Agent and their respective successors and
assigns, provided that the Obligors may not assign the undertaking of the
Banks to make Advances to the Borrower nor the undertaking of the Agent to
issue Letters of Credit for the account of the Obligors nor any of the
obligations of the Obligors hereunder or under any other Credit Agreement.
Section 9.07. Bank Assignments and Participations.
(a) Assignments. With the consent of the Agent, which consent shall
not be unreasonably withheld, any Bank may assign to one or more banks or
other entities all or any portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it, the Note held by it, and its Pro Rata
Share of the Letter of Credit Exposure; provided, however, that (i) each
such assignment shall be of a constant, and not a varying, percentage of all
of such Bank's rights and obligations under this Agreement, (ii) the amount
of the Commitment of such Bank being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000 and
the amount of the Commitment retained by such assigning Bank shall in no
event be less than $10,000,000, (iii) each such assignment shall be to an
Eligible Assignee, and (iv) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes
subject to such assignment. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least three (3) Business
Days after the execution thereof, (A) the assignee thereunder shall be a
party hereto for all purposes and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder and (B) the
assignor Bank thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of such Bank's rights and obligations under
this Agreement, such Bank shall cease to be a party hereto).
(b) Term of Assignments. By executing and delivering an Assignment
and Acceptance, the Bank thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i)
other than as provided in such Assignment and Acceptance, such Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency of value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such Bank makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Obligors or the Guaranteeing Affiliates, or any other
Person, or the performance or observance by the Obligors or the Guaranteeing
Affiliates of any of their obligations under this Agreement or any other
Credit Document; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the Financial Statements and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the Agent,
the assignor Bank or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;
(v) such assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Bank.
(c) The Register. The Agent shall maintain at its address referred
to in Section 9.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses
of the Banks and the Commitment of, and principal amount of the Advances
owing to, each Bank from time-to-time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Obligors, the Agent, and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all purposes
of this Agreement. The Register shall be available for inspection by either
Obligor or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(d) Procedures. Upon its receipt of an Assignment and Acceptance
executed by a Bank and an Eligible Assignee, together with any Note or Notes
subject to such assignment, the Agent shall, if such Assignment and
Acceptance has been completed, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give
prompt notice thereof to the Obligors. Within five Business Days after its
receipt of such notice, the Obligors, at their own expense, shall execute
and deliver to the Agent in exchange for the surrendered Note or Notes a new
Note to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and, if
such Bank has retained a Commitment hereunder, a new Note to the order of
such Bank in an amount equal to the Commitments retained by it hereunder.
Such new Note or Notes shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Note or Notes, shall be
dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit A attached hereto.
(e) Participations. Each Bank may sell participations to one or
more banks or other entities (each, a "Participant") in or to all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing
to it, its Pro Rata Share of the Letter of Credit Exposure, and the Note or
Notes held by it); provided, however, that (i) such Bank's obligations under
this Agreement (including, without limitation, its Commitment to the
Borrower hereunder) shall remain unchanged, (ii) such Bank shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Bank shall remain the holder of any such Note for
all purposes of this Agreement, and (iv) the Obligors, the Agent, and the
other Banks shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement.
The Obligors hereby agree that Participants shall have the same rights
under Sections 2.08, 2.09, 2.11(c), and 9.08 hereof as a Bank to the extent
of their respective participations.
(f) Confidentiality. Each Bank may furnish any information
concerning the Obligors, any Guaranteeing Affiliate, and other Subsidiaries
of the Borrower and MI in the possession of such Bank from time to time to
assignees and participants (including prospective assignees and
participants); provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree in writing to
preserve the confidentiality of any confidential information relating to the
Obligors, the Guaranteeing Affiliates, and Subsidiaries of the Borrower and
MI received by it from such Bank.
Section 9.08. Indemnification.
(a) The Obligors shall jointly and severally indemnify the Agent,
the Banks, and each affiliate thereof and their respective directors,
officers, employees, agents and counsel ("Indemnified Persons") from, and
discharge, release, and hold each of them harmless against, any and all
losses, liabilities, claims or damages to which any of them may become
subject, that arise out of, result from, or relate to (i) any actual or
proposed use by the Obligors or any Affiliate of the Obligors of the
proceeds of any Advance, (ii) any breach by the Obligors or any Guaranteeing
Affiliate of any representation, warranty, covenant, or other provision of
this Agreement or any other Credit Document, (iii) any Environmental Claim,
Environmental Permit, requirement of Environmental Laws, or any Release or
threatened Release of Hazardous Substances, concerning or relating to the
present or previously-owned or operated properties, operations, or business
of either Obligor, any Guaranteeing Affiliate, or any Subsidiary of the
Borrower or Subsidiary of MI, including without limitation those matters set
forth in Schedules 4.24(a) and 4.24(b), or (iv) any investigation,
litigation or other proceeding (including any threatened investigation or
proceeding) relating to the foregoing, and the Obligors shall reimburse each
Indemnified Person upon demand for any reasonable out-of-pocket expenses
(including legal fees) incurred in connection with any such investigation,
litigation or other proceeding; and expressly including any such losses,
liabilities, claims, damages, or expense incurred by reason of the
Indemnified Person's own negligence, but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified.
(b) Promptly after receipt by an Indemnified Person of notice of
any claim or the commencement of any action, such Indemnified Person shall,
if any claim in respect thereof is to be made against the Obligors under
this Section 9.08, notify the Obligors in writing of the claim or the
commencement of that action. If any such claim or action shall be brought
against an Indemnified Person and such Indemnified Person shall notify the
Obligors thereof, the Obligors shall be entitled to assume the defense or
settlement of any third-party claim, demand, investigation, action, suit or
other legal proceeding in respect of which they are obligated to provide
indemnity hereunder; provided, however, that the Obligors shall not settle
or compromise any such claim, demand, investigation, action, suit or other
legal proceeding without the Indemnified Person's prior written consent
thereto, unless the terms of such settlement or compromise discharge and
release the Indemnified Person from any and all liabilities and obligations
thereunder. Notwithstanding the foregoing, (1) the Indemnified Person at
all times shall have the right, at its option and expense, to participate
fully in the defense or settlement of such claim, demand, investigation,
action, suit or other legal proceeding; and (2) if the Obligors do not
acknowledge that they have assumed responsibility for the defense or
settlement of such claim, demand, investigation, action, suit or other legal
proceeding within 30 days after their receipt of notice of the assertion or
commencement thereof, then (a) the Indemnified Person shall have the right,
but not the obligation, to undertake the defense or settlement of such
claim, demand, investigation, action, suit or other legal proceeding for the
account and at the risk of the Obligors, and (b) the Obligors shall be bound
by any defense or settlement that the Indemnified Person may make as to such
claim, demand, investigation, action, suit or other legal proceeding.
Except as expressly provided above, the Obligors shall not be liable for any
amount paid by any Indemnified Person in settlement of any claim, demand,
investigation, action, suit or other legal proceeding without the written
consent of the Obligors.
This Section 9.08 shall not apply to losses, liabilities, claims,
damages, deficiencies, interest, judgments or expenses arising solely from
actions of the Indemnified Persons with respect to Mortgaged Properties
after such Indemnified Persons have either (i) foreclosed their Lien and/or
security interest in same pursuant to the terms of the Security Documents or
other instruments executed as security for the Obligations or (ii) entered
upon and taken possession of the Mortgaged Property (as defined in the
Mortgage), excluded the Borrower and MI and their agents or servants wholly
therefrom and begun operating the same pursuant to Section 7.12 of the
Mortgage.
(c) If this Section 9.08 or any portion thereof shall be
invalidated on any grounds by any court of competent jurisdiction, the
Obligors shall nevertheless indemnify any Indemnified Person entitled to
indemnification hereunder as to any expenses and liabilities paid or
incurred by such Person in connection with any actual or threatened action
to the fullest extent permitted by any applicable portion of this Section
9.08 that shall not have been invalidated, to the fullest extent permitted
by applicable law.
Section 9.09. Liability of the Agent as Issuing Bank. The Obligors
assume all risks of the acts or omissions of any beneficiary or transferee
of any Letter of Credit with respect to its use of such Letter of Credit.
Neither the Agent nor any of its officers or directors shall be liable or
responsible for: (a) the use which may be made of any Letter of Credit or
any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of
any endorsement thereon, even if such documents should prove to be in any or
all respects invalid, insufficient, fraudulent or forged; (c) payment by the
Agent against presentation of documents which do not comply with the terms
of a Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the relevant Letter of Credit; or (d) any
other circumstances whatsoever in making or failing to make payment under
any Letter of Credit (including the Agent's own negligence), except that the
Obligors shall have a claim against the Agent, and the Agent shall be liable
to the Obligors, to the extent of any direct, as opposed to consequential,
damages suffered by either of the Obligors which either of the Obligors
prove were caused by (i) the Agent's willful misconduct or gross negligence
in determining whether documents presented under a Letter of Credit comply
with the terms of such Letter of Credit or (ii) the Agent's failure to make
lawful payment under any Letter of Credit after the presentation to it of a
draft and certificate strictly complying with the terms and conditions of
such Letter of Credit. In furtherance and not in limitation of the
foregoing, the Agent may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary.
Section 9.10. Survival of Certain Provisions. All obligations of
the Obligors provided for in Sections 2.08, 2.09, 2.11(c), and 9.08 shall
survive any termination of this Agreement and any termination of the
Commitments.
Section 9.11. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the
same agreement.
Section 9.12. Survival of Representations, etc. Except as provided
in Article IV hereof, all representations, warranties and covenants
contained herein or made in writing by or on behalf of the Borrower, MI, or
any Guaranteeing Affiliate in connection herewith shall survive the
execution and delivery of this Agreement and the Credit Documents, the
making of the Advances, the issuing of the Letters of Credit and any
investigation made by or on behalf of the Banks, none of which shall
diminish any Bank's right to rely on any thereof.
Section 9.13. Severability. In case one or more provisions of this
Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions contained herein or
therein shall not be affected or impaired thereby.
Section 9.14. Release of Guarantors. The Banks hereby agree that
(i) they shall release a Guaranteeing Affiliate from its guaranty
obligations under its Guaranty upon the sale, transfer, dissolution or
liquidation of such Guaranteeing Affiliate provided no Default then exists
hereunder but, if the immediate parent of such Guaranteeing Affiliate is not
MI, and if such parent is not then obligated to the Banks under a Guaranty
in respect of all investments, loans or advances for which such Guaranteeing
Affiliate is liable under the Guaranty to be released, such obligation to
release shall be expressly conditioned upon the execution and delivery by
such parent of a Guaranty (or replacement Guaranty) obligating such parent
(without duplication) for the payment of sums for which it is then liable
under its existing Guaranty (if any) and of sums for which such Guaranteeing
Affiliate is liable under the Guaranty to be released. Each of the Banks
hereby consents to the execution of any such release by the Agent acting on
behalf of the Banks and (ii) all sums repaid or distributed in respect of
equity from such Guaranteeing Affiliate to the Person whose funds gave rise
to the Guaranty obligation shall be credited toward the release of such
Guaranteeing Affiliate's Guaranty. Guaranties shall be released in
chronological order upon written request of the Guaranteeing Affiliate at
the time such sums repaid or distributed in respect of equity and not
previously utilized hereunder equal the amount of the oldest Guaranty then
outstanding.
Section 9.15. Joinder by MI. MI joins in the execution hereof to
evidence its approval of the terms and conditions herein set forth and its
agreement to be bound by such terms and conditions and to perform the
obligations of MI set forth herein and in the other Credit Documents and any
other document executed by the Borrower and/or MI as security for the
Obligations. In respect of each such obligation which is also an obligation
of the Borrower, MI and the Borrower shall be jointly and severally
obligated thereon.
Section 9.16. Disclosures. Every reference in this Agreement or
any other Credit Document to disclosures of either Obligor in writing
(except the Financial Statements), to the extent that such references refer
or are intended to refer to disclosures at or prior to the execution of this
Agreement, shall be deemed strictly to refer only to written disclosures
delivered concurrently with the execution hereof. It is the intention of
the parties that such disclosures are to be limited to those presented in an
orderly manner at the time of entering into this Agreement and are not to be
deemed to include expressly or impliedly any disclosures which may have been
previously delivered from time to time, except to the extent that such
disclosures are again presented concurrently with the execution hereof.
Section 9.17. Business Loans. The Borrower warrants and represents
that the Advances evidenced, respectively, by the Notes are and shall be for
business, commercial, investment or other similar purposes and not primarily
for personal, family, household or agricultural use, as such terms are used
in Chapter One ("Chapter One") of the Texas Credit Code. At all such times,
if any, as Chapter One shall establish the Maximum Rate shall be the
"indicated rate ceiling" (as such term is defined in Chapter One) from time
to time in effect.
Section 9.18. Usury Not Intended. It is the intent of each Obligor
and each Bank in the execution and performance of this Agreement and the
other Credit Documents to contract in strict compliance with applicable
usury laws, including conflicts of law concepts, governing the Advances of
each Bank and each Bank's Pro Rata Share of the LC Obligations including
such applicable laws of the State of Texas and the United States of America
from time to time in effect. In furtherance thereof, the Banks and the
Obligors stipulate and agree that none of the terms and provisions contained
in this Agreement or the other Credit Documents shall ever be construed to
create a contract to pay, as consideration for the use, forbearance or
detention of money, interest at a rate in excess of the Maximum Rate and
that for purposes hereof "interest" shall include the aggregate of all
charges which constitute interest under such laws that are contracted for,
charged or received under this Agreement; and in the event that,
notwithstanding the foregoing, under any circumstances the aggregate amounts
taken, reserved, charged, received or paid on the Advances or the LC
Obligations, include amounts which by applicable law are deemed interest
which would exceed the maximum amount of nonusurious interest permitted by
applicable law, then such excess shall be deemed to be a mistake and each
Bank receiving same shall credit the same on the principal of its Note or
its Pro Rata Share of the LC Obligations (or if such Note or LC Obligations
shall have been paid in full, refund said excess to the payor thereof). In
the event that the maturity of the Notes, or the LC Obligations, or any of
them, are accelerated by reason of any election of the holder thereof
resulting from any Event of Default under this Agreement or otherwise, or in
the event of any required or permitted prepayment, then such consideration
that constitutes interest may never include more than the maximum
nonusurious amount permitted by applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be cancelled automatically
as of the date of such acceleration or prepayment and, if theretofore paid,
shall be credited on the applicable Notes or LC Obligations (or, if the
applicable Notes or LC Obligations shall have been paid in full, refunded to
the payor of such interest), The provisions of this paragraph shall control
over all other provisions of this Agreement or the other Credit Documents
which may be in apparent conflict herewith.
Section 9.19. Governing Law. THIS AGREEMENT, THE NOTES AND THE
OTHER CREDIT DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS. PURSUANT TO ARTICLE
15.10(b) of CHAPTER 15 ("CHAPTER 15") OF THE TEXAS CREDIT CODE, THE PARTIES
HERETO EXPRESSLY AGREE THAT CHAPTER 15 SHALL NOT APPLY TO THIS AGREEMENT OR
TO ANY LOAN, NOR SHALL THIS AGREEMENT OR ANY LOAN BE GOVERNED BY OR BE
SUBJECT TO THE PROVISIONS OF CHAPTER 15 IN ANY MANNER WHATSOEVER.
PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, A
LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED IN THE LOAN AGREEMENT EXCEEDS
$50,000 IN VALUE IS NOT ENFORCEABLE UNLESS THE LOAN AGREEMENT IS IN WRITING
AND SIGNED BY THE PARTY TO BE BOUND OR THAT PARTY'S AUTHORIZED
REPRESENTATIVE.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO AN AGREEMENT SUBJECT TO
THE PRECEDING PARAGRAPH SHALL BE DETERMINED SOLELY FROM THE WRITTEN LOAN
AGREEMENT, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED
BY AND MERGED INTO THE LOAN AGREEMENT. THIS WRITTEN AGREEMENT AND THE
CREDIT DOCUMENTS, AS DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 9.20. Waivers. Each of the parties hereto recognizes that
in matters related to this Agreement, it may be entitled to a trial in which
matters of fact are determined by a jury (as opposed to a trial in which
such matters are determined by a federal or state judge). Each of the
undersigned also recognizes that one of the remedies available to it in any
trial may, under certain circumstances, be the right to receive damages in
excess of those actually sustained by it. In the past, in some instances,
such damages have equaled or exceeded the amount of actual damages.
(a) TO THE MAXIMUM EXTENT NOW PERMITTED BY LAW, EACH OF THE PARTIES
HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY EXEMPLARY OR PUNITIVE
DAMAGES, OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.
(b) EACH OF THE UNDERSIGNED HEREBY CERTIFIES THAT NO REPRESENTATIVE
OR AGENT OF THE AGENT OR ANY BANK OR THE AGENT'S OR ANY BANK'S COUNSEL, HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT THE AGENT OR SUCH BANK
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS. EACH OF THE UNDERSIGNED ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO OR BECOME A PARTY WITH RESPECT TO THIS TRANSACTION BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS HEREIN.
EXECUTED as of the 29th day of November, 1994.
OBLIGORS:
MESA INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name:
Title:
MESA OPERATING CO.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name:
Title:
AGENT:
SOCIETE GENERALE,
SOUTHWEST AGENCY
By:/s/ (?)
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
First Vice President
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Laville, III
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, III
Vice President
BANKS:
SOCIETE GENERALE,
SOUTHWEST AGENCY
By:/s/ (?)
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
First Vice President
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, III
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Laville, III
Vice President