1
EXHIBIT 10.1
[EXECUTION]
===============================================================================
US CREDIT AGREEMENT
-------------------------------------------------------
DEVON ENERGY CORPORATION
as US Borrower
NATIONSBANK, N.A.
as Administrative Agent
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES, L.L.C.
as Arranger
FIRST CHICAGO CAPITAL MARKETS, INC.
as Syndication Agent
BANK OF MONTREAL
as Documentation Agent
FIRST UNION
as Co-Documentation Agent
and CERTAIN FINANCIAL INSTITUTIONS
as Lenders
-------------------------------------------------------
US $205,000,000
December 11, 1998
==============================================================================
2
TABLE OF CONTENTS
Page
CREDIT AGREEMENT..................................................................................................1
ARTICLE I - The US Loans..........................................................................................1
Section 1.1. Commitments to Lend; US Notes..........................................................1
Section 1.2. Requests for New US Loans..............................................................4
Section 1.3. Continuations and Conversions of Existing US Loans.....................................5
Section 1.4. Use of Proceeds........................................................................6
Section 1.5. Interest Rates and Fees................................................................6
Section 1.6. Prepayments............................................................................8
Section 1.7. Competitive Bid Loans..................................................................8
ARTICLE II - Letters of Credit...................................................................................11
Section 2.1. Letters of Credit.....................................................................11
Section 2.2. Requesting Letters of Credit..........................................................12
Section 2.3. Reimbursement and Participations......................................................12
Section 2.4. Letter of Credit Fees.................................................................13
Section 2.5. No Duty to Inquire....................................................................13
Section 2.6. LC Collateral.........................................................................14
ARTICLE III - Payments to Lenders................................................................................15
Section 3.1. General Procedures....................................................................15
Section 3.2. Increased Cost and Reduced Return.....................................................16
Section 3.3. Limitation on Types of US Loans.......................................................18
Section 3.4. Illegality............................................................................18
Section 3.5. Treatment of Affected US Loans........................................................19
Section 3.6. Compensation..........................................................................19
Section 3.7. Change of Applicable Lending Office...................................................20
Section 3.8. Replacement of Lenders................................................................20
Section 3.9. Taxes.................................................................................20
Section 3.10. Currency Conversion and Currency Indemnity............................................22
ARTICLE IV - Conditions Precedent to Lending.....................................................................23
Section 4.1. Documents to be Delivered.............................................................23
Section 4.2. Additional Conditions Precedent to First US Loan or First Letter of
Credit................................................................................24
Section 4.3. Additional Conditions Precedent to all US Loan and Letters of Credit..................25
ARTICLE V - Representations and Warranties.......................................................................25
Section 5.1. No Default............................................................................25
Section 5.2. Organization and Good Standing........................................................25
Section 5.3. Authorization.........................................................................26
Section 5.4. No Conflicts or Consents..............................................................26
i
3
Section 5.5. Enforceable Obligations...............................................................26
Section 5.6. Full Disclosure.......................................................................26
Section 5.7. Litigation............................................................................27
Section 5.8. ERISA Plans and Liabilities...........................................................27
Section 5.9. Environmental and Other Laws..........................................................27
Section 5.10. Names and Places of Business..........................................................27
Section 5.11. US Borrower's Subsidiaries............................................................28
Section 5.12. Title to Properties; Licenses.........................................................28
Section 5.13. Government Regulation.................................................................28
Section 5.14. Insider...............................................................................28
Section 5.15. Solvency..............................................................................28
Section 5.16. Year 2000 Compliance..................................................................29
ARTICLE VI - Affirmative Covenants of US Borrower................................................................29
Section 6.1. Payment and Performance...............................................................29
Section 6.2. Books, Financial Statements and Reports...............................................29
Section 6.3. Other Information and Inspections.....................................................30
Section 6.4. Notice of Material Events and Change of Address.......................................31
Section 6.5. Maintenance of Properties.............................................................31
Section 6.6. Maintenance of Existence and Qualifications...........................................31
Section 6.7. Payment of Trade Liabilities, Taxes, etc..............................................31
Section 6.8. Insurance.............................................................................32
Section 6.9. Performance on US Borrower's Behalf...................................................32
Section 6.10. Interest..............................................................................32
Section 6.11. Compliance with Law...................................................................32
Section 6.12. Environmental Matters.................................................................32
Section 6.13. Bank Accounts; Offset.................................................................33
Section 6.14. Year 2000 Compliance..................................................................33
ARTICLE VII - Negative Covenants of US Borrower..................................................................33
Section 7.1. Indebtedness..........................................................................33
Section 7.2. Limitation on Liens...................................................................35
Section 7.3. Limitation on Mergers.................................................................35
Section 7.4. Limitation on Issuance of Securities by Subsidiaries of US Borrower...................35
Section 7.5. Limitation on Restricted Payments.....................................................36
Section 7.6. Transactions with Affiliates..........................................................36
Section 7.7. Prohibited Contracts; ERISA...........................................................36
Section 7.8. Funded Debt to Total Capitalization...................................................36
Section 7.9. Funded Debt to EBITDA.................................................................36
Section 7.10. Devon Trust; Devon Trust Securities...................................................36
ARTICLE VIII - Events of Default and Remedies....................................................................38
Section 8.1. Events of Default.....................................................................38
Section 8.2. Remedies..............................................................................40
ii
4
ARTICLE IX - US Agent............................................................................................40
Section 9.1. Appointment, Powers, and Immunities...................................................40
Section 9.2. Reliance by US Agent..................................................................41
Section 9.3. Defaults..............................................................................41
Section 9.4. Rights as Lender......................................................................41
Section 9.5. Indemnification.......................................................................42
Section 9.6. Non-Reliance on US Agent and Other Lenders............................................42
Section 9.7. Rights as Lender......................................................................42
Section 9.8. Sharing of Set-Offs and Other Payments................................................43
Section 9.9. Investments...........................................................................43
Section 9.10. Benefit of Article IX.................................................................43
Section 9.11. Resignation...........................................................................43
Section 9.12. Lenders to Remain Pro Rata............................................................44
ARTICLE X - Miscellaneous........................................................................................44
Section 10.1. Waivers and Amendments; Acknowledgments...............................................44
Section 10.2. Survival of Agreements; Cumulative Nature.............................................46
Section 10.3. Notices...............................................................................46
Section 10.4. Payment of Expenses; Indemnity........................................................47
Section 10.5. Parties in Interest...................................................................48
Section 10.6. Assignments and Participations........................................................48
Section 10.7. Confidentiality.......................................................................50
Section 10.8. Governing Law; Submission to Process..................................................50
Section 10.9. Limitation on Interest................................................................50
Section 10.10. Termination; Limited Survival.........................................................51
Section 10.11. Severability..........................................................................52
Section 10.12. Counterparts; Fax.....................................................................52
Section 10.13. Waiver of Jury Trial, Punitive Damages, etc...........................................52
Section 10.14. Defined Terms.........................................................................52
Section 10.15. Annex I, Exhibits and Schedules; Additional Definitions...............................52
Section 10.16. Amendment of Defined Instruments......................................................52
Section 10.17. References and Titles.................................................................53
Section 10.18. Calculations and Determinations.......................................................53
Section 10.19. Construction of Indemnities and Releases..............................................53
Section 10.20. Termination of Existing Agreement.....................................................53
iii
5
Schedules and Exhibits:
-----------------------
Annex I - Defined Terms
Annex II - Lenders Schedule
Schedule 1 - Disclosure Schedule
Exhibit A-1 - Tranche A Promissory Note
Exhibit A-2 - Tranche B Promissory Note
Exhibit B - Borrowing Notice
Exhibit C - Continuation/Conversion Notice
Exhibit D - Certificate Accompanying Financial Statements
Exhibit E - Opinion of Counsel for Restricted Persons
Exhibit F - Assignment and Acceptance Agreement
Exhibit G - Letter of Credit Application and Agreement
Exhibit H - Competitive Bid Request
Exhibit I - Invitation to Bid
Exhibit J - Competitive Bid
Exhibit K - Competitive Bid Accept/Reject Letter
Exhibit L - Competitive Bid Note
iv
6
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made as of December 11, 1998, by and among
Devon Energy Corporation, an Oklahoma corporation (herein called "US Borrower"),
NationsBank, N.A., individually and as administrative agent (herein called "US
Agent") and the undersigned Lenders. In consideration of the mutual covenants
and agreements contained herein the parties hereto agree as follows:
ARTICLE I - The US Loans
Section 1.1. Commitments to Lend; US Notes.
(a) Tranche A. Subject to the terms and conditions hereof, each Lender
agrees to make loans to US Borrower (herein called such Lender's "Tranche A
Loans") upon US Borrower's request from time to time during the US Facility
Commitment Period, provided that (i) subject to Sections 3.3, 3.4 and 3.5, all
Lenders are requested to make Tranche A Loans of the same Type in accordance
with their respective Percentage Shares and as part of the same Borrowing, (ii)
such Lender's Percentage Share of the US Facility Usage shall never exceed such
Lender's Percentage Share of the US Maximum Credit Amount, and (iii) such
Lender's Percentage Share of the Tranche A Facility Usage shall never exceed
such Lender's Percentage Share of the Tranche A Maximum Credit Amount. The
aggregate amount of all Tranche A Loans in any Borrowing must be an integral
multiple of US $100,000 which equals or exceeds US $200,000 or must equal the
unadvanced portion of the US Maximum Credit Amount. The obligation of US
Borrower to repay to each Lender the aggregate amount of all Tranche A Loans
made by such Lender, together with interest accruing in connection therewith,
shall be evidenced by a single promissory note (herein called such Lender's
"Tranche A Note") made by US Borrower payable to the order of such Lender in the
form of Exhibit A-1 with appropriate insertions. The amount of principal owing
on any Lender's Tranche A Note at any given time shall be the aggregate amount
of all Tranche A Loans theretofore made by such Lender minus all payments of
principal theretofore received by such Lender on such Tranche A Note. Interest
on each Tranche A Note shall accrue and be due and payable as provided herein
and therein. Each Tranche A Note shall be due and payable as provided herein and
therein, and shall be due and payable in full on the US Facility Maturity Date.
Subject to the terms and conditions hereof, US Borrower may borrow, repay, and
reborrow Tranche A Loans under the US Agreement during the US Facility
Commitment Period. US Borrower may have no more than ten Borrowings of US Dollar
Eurodollar Loans (including Tranche A Loans and Tranche B Loans) outstanding at
any time.
(b) Tranche B. Subject to the terms and conditions hereof, each Lender
agrees to make loans to US Borrower (herein called such Lender's "Tranche B
Loans") upon US Borrower's request from time to time during the Tranche B
Revolving Period, provided that (i) subject to Sections 3.3, 3.4 and 3.5, all
Lenders are requested to make Tranche B Loans of the same Type in accordance
with their respective Percentage Shares and as part of the same Borrowing, (ii)
such Lender's Percentage Share of the US Facility Usage shall never exceed such
1
7
Lender's Percentage Share of the US Maximum Credit Amount, and (iii) such
Lender's Percentage Share of the Tranche B Facility Usage shall never exceed
such Lender's Percentage Share of the Tranche B Maximum Credit Amount. The
aggregate amount of all Tranche B Loans in any Borrowing must be an integral
multiple of US $100,000 which equals or exceeds US $200,000 or must equal the
unadvanced portion of the US Maximum Credit Amount. The obligation of US
Borrower to repay to each Lender the aggregate amount of all Tranche B Loans
made by such Lender, together with interest accruing in connection therewith,
shall be evidenced by a single promissory note (herein called such Lender's
"Tranche B Note") made by US Borrower payable to the order of such Lender in the
form of Exhibit A-2 with appropriate insertions. The amount of principal owing
on any Lender's Tranche B Note at any given time shall be the aggregate amount
of all Tranche B Loans theretofore made by such Lender minus all payments of
principal theretofore received by such Lender on such Tranche B Note. Interest
on each Tranche B Note shall accrue and be due and payable as provided herein
and therein. Each Tranche B Note shall be due and payable as provided herein and
therein, and shall be due and payable in full on the Tranche B Maturity Date.
Subject to the terms and conditions hereof, US Borrower may borrow, repay, and
reborrow Tranche B Loans under the US Agreement during the Tranche B Revolving
Period. US Borrower may have no more than ten Borrowings of US Dollar Eurodollar
Loans (including Tranche A Loans and Tranche B Loans) outstanding at any time.
(c) Extension of Conversion Date.
(i) US Borrower may, at its option and from time to time
during the Tranche B Revolving Period, request an offer to extend the
Tranche B Revolving Period by delivering to US Agent a Request for an
Offer of Extension not more than sixty days prior to the then current
Tranche B Conversion Date. US Agent shall forthwith provide a copy of
the Request for an Offer of Extension to each of the Lenders. Upon
receipt by US Agent from US Borrower of an executed Request for an
Offer of Extension, each Lender shall, within thirty days after the
date US Agent receives such request from US Borrower, either:
(1) notify US Agent of its acceptance of the Request
for an Offer of Extension, and the terms and conditions, if
any, upon which such Lender is prepared to extend the Tranche
B Conversion Date; or
(2) notify US Agent that the Request for an Offer of
Extension has been denied, such notice to forthwith be
forwarded by US Agent to US Borrower to allow US Borrower to
seek a replacement lender pursuant to Section 1.1(e) (any
Lender giving notice of such denial is herein called a
"Non-Accepting Lender"). The failure of a Lender to so notify
US Agent within such thirty day period shall be deemed to be
notification by such Lender to US Agent that such Lender has
denied US Borrower's Request for an Offer of Extension.
(ii) Provided that all Lenders provide notice to US Agent
under Section 1.1(c)(i) that they accept the Request for an Offer of
Extension, or if there are Non- Accepting Lenders, such Lenders shall
have been repaid pursuant to Section 1.1(e) or
2
8
replacement lenders shall have become parties hereto pursuant to
Section 1.1(e) and shall have accepted the Request for an Offer of
Extension, such acceptance having common terms and conditions, US Agent
shall deliver to US Borrower an Offer of Extension incorporating the
said terms and conditions. Such offer shall be open for acceptance by
US Borrower until the fifth Business Day immediately preceding the then
current Tranche B Conversion Date. Upon written notice by US Borrower
to US Agent accepting an outstanding Offer of Extension and agreeing to
the terms and conditions, if any, specified therein (the date of such
notice of acceptance in this Section 1.1 being called the "Extension
Date"), the Tranche B Conversion Date shall be extended to the date 364
days from the Extension Date and the terms and conditions specified in
such Offer of Extension shall be immediately effective.
(iii) US Borrower understands that the consideration of any
Request for an Offer of Extension constitutes an independent credit
decision which each Lender retains the absolute and unfettered
discretion to make and that no commitment in this regard is hereby
given by a Lender and that any offer to extend the Tranche B Conversion
Date may be on such terms and conditions in addition to those set out
herein as the extending Lenders stipulate.
(d) Conversion to Tranche B Term Loan. Effective at 11:59 p.m. Dallas,
Texas time on the day immediately preceding the Tranche B Conversion Date, (i)
each Lender's obligation to make new Tranche B Loans shall be canceled
automatically, and (ii) each Lender's Tranche B Loans shall become term loans
maturing on the Tranche B Maturity Date.
(e) Non-Accepting Lender. Provided that Lenders whose Percentage Shares
represent more than 50% but less than 100% of the US Maximum Credit Amount
provide notice to US Agent under Section 1.1(c)(i) that they accept the Request
for an Offer of Extension, on notice of US Borrower to US Agent, US Borrower
shall be entitled to choose any of the following in respect of each
Non-Accepting Lender prior to the expiration of the Tranche B Revolving Period,
provided that if US Borrower does not make an election prior to the expiration
of the Tranche B Revolving Period, US Borrower shall be deemed to have
irrevocably elected to exercise the provisions of Section 1.1(e)(i):
(i) the Non-Accepting Lender's obligations to make US Loans
shall be canceled as of the Extension Date, the US Maximum Credit
Amount shall be reduced by the amount so canceled, and on or prior to
the Extension Date the US Borrower shall repay in full all Obligations
then outstanding to the Non-Accepting Lender (as defined in Section
1.1(c)(i)(2)), or
(ii) replace the Non-Accepting Lender by reaching satisfactory
arrangements with one or more existing Lenders or new Lenders, for the
purchase, assignment and assumption of all Canadian Obligations and US
Obligations of the Non-Accepting Lender, provided that any new Lender,
with, if necessary, any Affiliate, shall take a pro rata assignment of
both Canadian Obligations and US Obligations, and such Non-
3
9
Accepting Lender shall be obligated to sell such Obligations in
accordance with such satisfactory arrangements.
In connection with any such replacement of a Lender Party pursuant to this
Section 1.1(e), US Borrower shall pay all costs that would have been due to such
Lender Party pursuant to Section 3.6 if such Lender Party's US Loans had been
prepaid at the time of such replacement.
Section 1.2. Requests for New US Loans. US Borrower must give to US
Agent written notice (or telephonic notice promptly confirmed in writing) of any
requested Borrowing of new US Loans to be advanced by Lenders. Each such notice
constitutes a "Borrowing Notice" hereunder and must:
(a) specify the aggregate amount of any such Borrowing of new US Base
Rate Loans and the date on which such US Base Rate Loans are to be advanced, or
the aggregate amount of any such Borrowing of new US Dollar Eurodollar Loans,
the date on which such US Dollar Eurodollar Loans are to be advanced (which
shall be the first day of the Eurodollar Interest Period which is to apply
thereto), and the length of the applicable Eurodollar Interest Period; and
(b) be received by US Agent not later than 11:00 a.m., Dallas, Texas
time, on the day on which any such US Base Rate Loans are to be made, or the
second Business Day preceding the day on which any such US Dollar Eurodollar
Loans are to be made.
Each such written request or confirmation must be made in the form and substance
of the "Borrowing Notice" attached hereto as Exhibit B, duly completed. Each
such telephonic request shall be deemed a representation, warranty,
acknowledgment and agreement by US Borrower as to the matters which are required
to be set out in such written confirmation. Upon receipt of any such Borrowing
Notice, US Agent shall give each Lender notice of the terms thereof not later
than 2:00 p.m., Dallas, Texas time on the day it receives such Borrowing Notice
from US Borrower if it receives such Borrowing Notice by 11:00 a.m., Dallas,
Texas time, otherwise on the next Business Day. If all conditions precedent to
such new US Loans have been met, each Lender will on the date requested promptly
remit to US Agent at US Agent's office in Dallas, Texas the amount of such
Lender's new US Loan in immediately available funds, and upon receipt of such
funds, unless to its actual knowledge any conditions precedent to such US Loans
have been neither met nor waived as provided herein, US Agent shall promptly
make such US Loans available to US Borrower. Unless US Agent shall have received
prompt notice from a Lender that such Lender will not make available to US Agent
such Lender's new US Loan, US Agent may in its discretion assume that such
Lender has made such US Loan available to US Agent in accordance with this
section and US Agent may if it chooses, in reliance upon such assumption, make
such US Loan available to US Borrower. If and to the extent such Lender shall
not so make its new US Loan available to US Agent, such Lender and US Borrower
severally agree to pay or repay to US Agent within three days after demand the
amount of such US Loan together with interest thereon, for each day from the
date such amount was made available to US Borrower until the date such amount is
paid or repaid to US Agent, with interest at (1) the Federal Funds Rate, if such
Lender is making such payment; provided that US Agent gave notice of the terms
of the Borrowing Notice to such Lender in accordance with the terms of
4
10
this Section 1.2, and (2) the interest rate applicable at the time to the other
new US Loans made on such date, if US Borrower is making such repayment. If
neither such Lender nor US Borrower pays or repays to US Agent such amount
within such three-day period, US Agent shall in addition to such amount be
entitled to recover from such Lender and from US Borrower, on demand, interest
thereon at the Default Rate for US Base Rate Loans, calculated from the date
such amount was made available to US Borrower. The failure of any Lender to make
any new US Loan to be made by it hereunder shall not relieve any other Lender of
its obligation hereunder, if any, to make its new US Loan, but no Lender shall
be responsible for the failure of any other Lender to make any new US Loan to be
made by such other Lender.
Section 1.3. Continuations and Conversions of Existing US Loans. US
Borrower may make the following elections with respect to US Loans already
outstanding under this Agreement: to convert US Base Rate Loans to US Dollar
Eurodollar Loans, to convert US Dollar Eurodollar Loans to US Base Rate Loans on
the last day of the Eurodollar Interest Period applicable thereto, and to
continue US Dollar Eurodollar Loans beyond the expiration of such Eurodollar
Interest Period by designating a new Eurodollar Interest Period to take effect
at the time of such expiration. In making such elections, US Borrower may
combine existing Tranche A Loans made pursuant to separate Borrowings into one
new Borrowing or divide existing Tranche A Loans made pursuant to one Borrowing
into separate new Borrowings, or combine existing Tranche B Loans made pursuant
to separate Borrowings into one new Borrowing or divide existing Tranche B Loans
made pursuant to one Borrowing into separate new Borrowings, provided that US
Borrower may have no more than ten Borrowings of US Dollar Eurodollar Loans
outstanding at any time. To make any such election, US Borrower must give to US
Agent written notice (or telephonic notice promptly confirmed in writing) of any
such Conversion or Continuation of existing US Loans, with a separate notice
given for each new Borrowing. Each such notice constitutes a
"Continuation/Conversion Notice" hereunder and must:
(a) specify the existing US Loans made under this Agreement which are
to be continued or converted and whether such US Loans are Tranche A Loans or
Tranche B Loans;
(b) specify the aggregate amount of any Borrowing of US Base Rate Loans
into which such existing US Loans are to be continued or converted and the date
on which such Continuation or Conversion is to occur, or the aggregate amount of
any Borrowing of US Dollar Eurodollar Loans into which such existing US Dollar
Eurodollar Loans are to be continued or converted, the date on which such
Continuation or Conversion is to occur (which shall be the first day of the
Eurodollar Interest Period which is to apply to such US Dollar Eurodollar
Loans), and the length of the applicable Eurodollar Interest Period; and
(c) be received by US Agent not later than 10:00 a.m., Dallas, Texas
time, on the day on which any such Continuation or Conversion to US Base Rate
Loans is to occur, or the second Business Day preceding the day on which any
such Continuation or Conversion to US Dollar Eurodollar Loans is to occur.
Each such written request or confirmation must be made in the form and substance
of the "Continuation/Conversion Notice" attached hereto as Exhibit C, duly
completed. Each such
5
11
telephonic request shall be deemed a representation, warranty, acknowledgment
and agreement by US Borrower as to the matters which are required to be set out
in such written confirmation. Upon receipt of any such Continuation/Conversion
Notice, US Agent shall give each Lender prompt notice of the terms thereof. Each
Continuation/Conversion Notice shall be irrevocable and binding on US Borrower.
During the continuance of any Default, US Borrower may not make any election to
convert existing US Loans made under this Agreement into US Dollar Eurodollar
Loans or continue existing US Loans made under this Agreement as US Dollar
Eurodollar Loans. If (due to the existence of a Default or for any other reason)
US Borrower fails to timely and properly give any Continuation/Conversion Notice
with respect to a Borrowing of existing US Dollar Eurodollar Loans at least two
Business Days prior to the end of the Eurodollar Interest Period applicable
thereto, such US Dollar Eurodollar Loans shall automatically be converted into
US Base Rate Loans at the end of such Eurodollar Interest Period. No new funds
shall be repaid by US Borrower or advanced by any Lender in connection with any
Continuation or Conversion of existing US Loans pursuant to this section, and no
such Continuation or Conversion shall be deemed to be a new advance of funds for
any purpose; such Continuations and Conversions merely constitute a change in
the interest rate applicable to already outstanding US Loans.
Section 1.4. Use of Proceeds. US Borrower shall use all US Loans made
under this Agreement to pay in full on the Closing Date all indebtedness
outstanding under the Existing Agreement and thereafter to refinance existing
indebtedness (including any commercial paper issued by or for the account of US
Borrower), to finance capital expenditures, to refinance Matured US LC
Obligations outstanding under this Agreement, and provide working capital for
its operations and for other general business purposes. US Borrower shall use
all Letters of Credit for its general corporate purposes. In no event shall the
funds from any US Loan or any Letter of Credit be used directly or indirectly by
any Person for personal, family, household or agricultural purposes or for the
purpose, whether immediate, incidental or ultimate, of purchasing, acquiring or
carrying any "margin stock" (as such term is defined in Regulation U promulgated
by the Board of Governors of the Federal Reserve System) or to extend credit to
others directly or indirectly for the purpose of purchasing or carrying any such
margin stock. US Borrower represents and warrants that US Borrower is not
engaged principally, or as one of US Borrower's important activities, in the
business of extending credit to others for the purpose of purchasing or carrying
such margin stock.
Section 1.5. Interest Rates and Fees.
(a) Tranche A Loans. The following interest and fees shall be payable
with respect to Tranche A Loans:
(i) Interest. Each Tranche A Loan that is a US Base Rate Loan
shall bear interest on each day outstanding at the US Base Rate in
effect on such day. Each Tranche A Loan that is a US Dollar Eurodollar
Loan shall bear interest on each day during the related Eurodollar
Interest Period at the related Adjusted US Dollar Eurodollar Rate in
effect on such day.
6
12
(ii) Facility Fees. In consideration of each Lender's
commitment to make Tranche A Loans under this Agreement, US Borrower
will pay to US Agent for the account of each Lender a facility fee
determined on a daily basis by applying the Facility Fee Rate to such
Lender's Percentage Share of the Tranche A Maximum Credit Amount on
each day during the US Facility Commitment Period. This facility fee
shall be due and payable in arrears on the last day of each Fiscal
Quarter and at the end of the US Facility Commitment Period.
(b) Tranche B Loans. The following interest and fees shall be payable
with respect to Tranche B Loans:
(i) Interest. Each Tranche B Loan that is a US Base Rate Loan
shall bear interest on each day outstanding at the US Base Rate in
effect on such day. Each Tranche B Loan that is a US Dollar Eurodollar
Loan shall bear interest on each day during the related Eurodollar
Interest Period at the related Adjusted US Dollar Eurodollar Rate in
effect on such day.
(ii) Facility Fees. In consideration of each Lender's
commitment to make Tranche B Loans under this Agreement, US Borrower
will pay to US Agent for the account of each Lender a facility fee
determined on a daily basis by applying the Tranche B Facility Fee Rate
to such Lender's Percentage Share of the Tranche B Maximum Credit
Amount on each day during the period from the date hereof until the
Tranche B Maturity Date. This facility fee shall be due and payable in
arrears on the last day of each Fiscal Quarter and on the Tranche B
Maturity Date.
(c) Utilization Fees. In consideration of each Lender's commitment to
make US Loans under this Agreement, US Borrower will pay to US Agent for the
account of each Lender a utilization fee for each day during the US Facility
Commitment Period that the US Facility Usage exceeds fifty percent (50%) of the
US Maximum Credit Amount. The amount of the utilization fee shall be determined
on a daily basis by applying a rate of 15 Basis Points per annum to such
Lender's Percentage Share of the US Facility Usage on each such day. This
utilization fee shall be due and payable in arrears on each Interest Payment
Date for US Base Rate Loans and at the end of the US Facility Commitment Period.
(d) Competitive Bid Loans. Each Competitive Bid Loan shall bear
interest on each day outstanding at the Competitive Bid Rate for such
Competitive Bid Loan.
(e) All US Loans. Notwithstanding the foregoing, if an Event of Default
has occurred and is continuing, all US Loans shall bear interest on each day
outstanding at the applicable Default Rate. Past due payments of principal and
interest shall bear interest at the rates and in the manner set forth in the US
Notes.
(f) US Agent's Fees. In addition to all other amounts due to US Agent
under the US Loan Documents, US Borrower will pay fees to US Agent as described
in a letter agreement dated September 30, 1998 between US Agent and US Borrower.
7
13
Section 1.6. Prepayments.
(a) Optional Prepayments. US Borrower may, upon giving notice to US
Agent by 11:00 a.m., Dallas, Texas time on the Business Day of prepayment, from
time to time and without premium or penalty prepay the US Notes, including
Competitive Bid Notes, in whole or in part, so long as all partial prepayments
of principal concurrently paid on the US Notes are in increments of US $100,000
and in an aggregate amount greater than or equal to US $200,000, and so long as
US Borrower pays all amounts owing in connection with the prepayment of any US
Dollar Eurodollar Loan owing under Section 3.6. US Agent shall give each Lender
notice thereof by 2:00 p.m. Dallas, Texas time on the date such notice is
received from US Borrower. Each prepayment of principal under this section shall
be accompanied by all interest then accrued and unpaid on the principal so
prepaid. Any principal or interest prepaid pursuant to this section shall be in
addition to, and not in lieu of, all payments otherwise required to be paid
under the US Loan Documents at the time of such prepayment. Unless otherwise
designated by US Borrower, any prepayment of Competitive Bid Loans shall be
applied to the outstanding Competitive Bid Loans in order of shortest maturity.
(b) Mandatory Prepayments of Tranche A Loans. If the Tranche A Facility
Usage exceeds the Tranche A Maximum Credit Amount, US Borrower shall immediately
prepay the principal of the Tranche A Loans in an amount at least equal to such
excess.
(c) Mandatory Prepayments of Tranche B Loans. If the aggregate amount
of the outstanding Tranche B Loans ever exceeds the Tranche B Maximum Credit
Amount, US Borrower shall immediately prepay the principal of the Tranche B
Loans in an amount at least equal to such excess.
(d) Procedures. Each prepayment of principal under this section shall
be accompanied by all interest then accrued and unpaid on the principal so
prepaid. Any principal or interest prepaid pursuant to this section shall be in
addition to, and not in lieu of, all payments otherwise required to be paid
under the US Loan Documents at the time of such prepayment.
Section 1.7. Competitive Bid Loans.
(a) US Borrower may request that each Lender submit Competitive Bids
(on a several basis) to US Borrower on any Business Day during the US Facility
Commitment Period, provided that all Lenders are requested to make a Competitive
Bid on the same basis at the same time. In order to request Competitive Bids, US
Borrower shall deliver by hand or facsimile to US Agent a Competitive Bid
Request, to be received by US Agent not later than 9:00 a.m., Dallas, Texas time
one Business Day before the date specified for a proposed Competitive Bid Loan.
A Competitive Bid Request that does not conform substantially to the format of
Exhibit H may be rejected in US Agent's sole discretion, and US Agent shall
promptly notify US Borrower of such rejection by facsimile. After receiving an
acceptable Competitive Bid Request, US Agent shall no later than 12:00 noon,
Dallas, Texas time on the date such Competitive Bid
8
14
Request is received by US Agent, by facsimile deliver to Lenders an Invitation
to Bid substantially in the form of Exhibit I with respect thereto.
(b) Each Lender may, in its sole discretion, make one or more
Competitive Bids to US Agent responsive to each Competitive Bid Request given by
US Borrower. Each Competitive Bid by a Lender must be received by US Agent by
facsimile not later than 9:00 a.m., Dallas, Texas time on the date specified for
a proposed Competitive Bid Loan. Multiple bids may be accepted by US Agent.
Competitive Bids that do not conform substantially to the format of Exhibit J
may be rejected by US Agent after conferring with, and upon the instruction of,
US Borrower, and US Agent shall notify the bidding Lender of such rejection as
soon as practicable. If any Lender shall elect not to make a Competitive Bid,
such Lender shall so notify US Agent by facsimile not later than 9:00 a.m.,
Dallas, Texas time, on the date specified for a Competitive Bid Loan; provided,
however, that failure by any Lender to give such notice shall not cause such
Lender to be obligated to make any Competitive Bid Loan and by such failure such
Lender shall be deemed to have rejected such Competitive Bid. A Competitive Bid
submitted by a Lender shall be irrevocable.
(c) Promptly, and in no event later than 9:30 a.m., Dallas, Texas time,
on the date specified for a proposed Competitive Bid Loan, US Agent shall notify
US Borrower by facsimile of all the Competitive Bids made, the Competitive Bid
Rate and the principal amount of each Competitive Bid Loan in respect of which a
Competitive Bid was made, and the identity of each Lender that made each
Competitive Bid. US Agent shall send a copy of all Competitive Bids to US
Borrower for its records as soon as practicable after completion of the bidding
process.
(d) US Borrower may, subject only to the provisions hereof, accept or
reject any Competitive Bid. US Borrower shall notify US Agent by facsimile
pursuant to a Competitive Bid Accept/Reject Letter whether and to what extent US
Borrower has decided to accept or reject any or all of the Competitive Bids, not
later than 10:00 a.m., Dallas, Texas time, on the date specified for a proposed
Competitive Bid Loan; provided, however, that:
(i) the failure by US Borrower to accept or reject any
Competitive Bid within the time period specified herein shall be deemed
to be a rejection of such Competitive Bid,
(ii) the aggregate amount of the Competitive Bids accepted by
US Borrower shall not exceed the principal amount specified in the
Competitive Bid Request,
(iii) the aggregate amount of all outstanding US Loans and US
LC Obligations shall never exceed the US Maximum Credit Amount,
(iv) if US Borrower shall accept a Competitive Bid or
Competitive Bids made at a particular Competitive Bid Rate, but the
amount of such Competitive Bid or Competitive Bids shall cause the
total amount of Competitive Bids to be accepted by US Borrower to
exceed the amount specified in the Competitive Bid Request, then US
Borrower shall accept a portion of such Competitive Bid or Competitive
Bids in an
9
15
amount equal to the amount specified in the Competitive Bid Request
less the amount of all other Competitive Bids accepted with respect to
such Competitive Bid Request, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made pro rata
in accordance with the amount of each such Competitive Bid at such
Competitive Bid Rate, and
(v) no Competitive Bid shall be accepted for a Competitive Bid
Loan unless such Competitive Bid Loan is in a minimum principal amount
of US $5,000,000 or a higher integral multiple thereof; provided,
however, that if a Competitive Bid Loan must be in an amount less than
US $5,000,000 because of the provisions of clause (iv) above, such
Competitive Bid Loan may be for a minimum of US $1,000,000 or any
higher integral multiple thereof, and in calculating the pro rata
allocation of acceptances or portions of multiple bids at a particular
Competitive Bid Rate pursuant to clause (iv), the amounts shall be
rounded to integral multiples of US $1,000,000 in a manner which shall
be in the sole and absolute discretion of US Borrower.
(e) Promptly on each date US Borrower accepts a Competitive Bid, US
Agent shall notify each Lender whether or not its Competitive Bid has been
accepted (and if so, in what amount and at what Competitive Bid Rate) by
facsimile transmission sent by US Agent, and each successful bidder will
thereupon become bound, subject to the other applicable conditions hereof, to
make the Competitive Bid Loan in respect of which its Competitive Bid has been
accepted. After completing the notifications referred to in the immediately
preceding sentence, US Agent shall notify each Lender of the aggregate principal
amount of all Competitive Bids accepted. Each Lender which is to make a
Competitive Bid Loan shall, before 11:00 a.m., Dallas, Texas time, on the
borrowing date specified in the Competitive Bid Request applicable thereto, make
available to US Agent in immediately available funds the amount of each
Competitive Bid Loan to be made by such Lender, and US Agent shall promptly
deposit such funds to an account designated by US Borrower. As soon as
practicable thereafter, US Agent shall notify each Lender of the aggregate
amount of Competitive Bid Loans advanced, the respective Competitive Bid
Interest Periods thereof and Competitive Bid Rate applicable thereto.
(f) The obligation of US Borrower to repay to each Lender the aggregate
amount of all Competitive Bid Loans made by such Lender, together with interest
accruing in connection therewith, shall be evidenced by promissory notes
(respectively, such Lender's "Competitive Bid Note") made by US Borrower payable
to the order of such Lender in the form of Exhibit L, with appropriate
insertions. The amount of principal owing on any Lender's Competitive Bid Note
at any given time shall be the aggregate amount of all Competitive Bid Loans
theretofore made by such Lender thereunder minus all payments of principal
theretofore received by such Lender thereon. Interest on each Competitive Bid
Note shall accrue and be due and payable as provided herein and therein. US
Borrower shall repay on the final day of the Competitive Bid Interest Period of
each Competitive Bid Loan (such date being that specified by US Borrower for
repayment of such Competitive Bid Loan in the related Competitive Bid Request
and such date being no later than six months after the date of the Competitive
Bid Loan) the then unpaid principal amount of such Competitive Bid Loan. Subject
to Section 1.6 and the payment of
10
16
amounts described in Section 3.6, US Borrower shall have the right to prepay any
principal amount of any Competitive Bid Loan.
(g) No Competitive Bid Loan shall be made within five Business Days
after the date of any other Competitive Bid Loan, unless US Borrower and US
Agent shall mutually agree otherwise. If US Agent shall at any time elect to
submit a Competitive Bid in its capacity as a Lender, it shall submit such bid
directly to US Borrower requesting such Competitive Bid one quarter of an hour
earlier than the latest time at which the other Lenders are required to submit
their bids to US Agent.
ARTICLE II - Letters of Credit
Section 2.1. Letters of Credit. Subject to the terms and conditions
hereof, US Borrower may during the US Facility Commitment Period request US LC
Issuer to issue one or more Letters of Credit, provided that, after taking such
Letter of Credit into account:
(a) the Tranche A Facility Usage does not exceed the Tranche A Maximum
Credit Amount at such time;
(b) the aggregate amount of US LC Obligations arising from Letters of
Credit issued under this Agreement at such time does not exceed the US LC
Sublimit;
(c) the expiration date of such Letter of Credit is prior to the end of
the US Facility Commitment Period;
(d) such Letter of Credit is to be used for general corporate purposes
of US Borrower;
(e) such Letter of Credit is not directly or indirectly used to assure
payment of or otherwise support any Indebtedness of any Person other than
Indebtedness of any Restricted Person permitted by this Agreement;
(f) the issuance of such Letter of Credit will be in compliance with
all applicable governmental restrictions, policies, and guidelines and will not
subject US LC Issuer to any cost which is not reimbursable under Article III;
(g) the form and terms of such Letter of Credit are acceptable to US LC
Issuer in its reasonable discretion; and
(h) all other conditions in this Agreement to the issuance of such
Letter of Credit have been satisfied.
US LC Issuer will honor any such request if the foregoing conditions (a) through
(h) (in the following Section 2.2 called the "LC Conditions") have been met as
of the date of issuance of such Letter of Credit. US LC Issuer may choose to
honor any such request for any other Letter of
11
17
Credit but has no obligation to do so and may refuse to issue any other
requested Letter of Credit for any reason which US LC Issuer in its sole
discretion deems relevant. Upon the execution and delivery of this Agreement by
each of the parties hereto, any letters of credit issued under the Existing
Agreement and outstanding as of the date hereof shall be deemed Letters of
Credit issued hereunder as of the date hereof and shall be subject to the terms
and conditions hereof, including without limitation US Borrower's reimbursement
obligations under Section 2.3 and Lenders' participation obligations under
Section 2.3.
Section 2.2. Requesting Letters of Credit. US Borrower must make
written application for any Letter of Credit at least three Business Days before
the date on which US Borrower desires for US LC Issuer to issue such Letter of
Credit. By making any such written application US Borrower shall be deemed to
have represented and warranted that the LC Conditions described in Section 2.1
will be met as of the date of issuance of such Letter of Credit. Each such
written application for a Letter of Credit must be made in writing in the form
and substance of Exhibit G, the terms and provisions of which are hereby
incorporated herein by reference (or in such other form as may mutually be
agreed upon by US LC Issuer and US Borrower). Two Business Days after the LC
Conditions for a Letter of Credit have been met as described in Section 2.1 (or
if US LC Issuer otherwise desires to issue such Letter of Credit), US LC Issuer
will issue such Letter of Credit at US LC Issuer's office in Dallas, Texas. If
any provisions of any LC Application conflict with any provisions of this
Agreement, the provisions of this Agreement shall govern and control.
Section 2.3. Reimbursement and Participations.
(a) Reimbursement by US Borrower. If the beneficiary of any Letter of
Credit issued hereunder makes a draft or other demand for payment thereunder
then Tranche A Loans that are US Base Rate Loans shall be made by Lenders to US
Borrower in the amount of such draft or demand notwithstanding the fact that one
or more conditions precedent to the making of such US Base Rate Loans may not
have been satisfied. Such US Base Rate Loans shall be made concurrently with US
LC Issuer's payment of such draft or demand without any request therefor by US
Borrower and shall be immediately used by US LC Issuer to repay the amount of
the resulting Matured US LC Obligation.
(b) Participation by Lenders. US LC Issuer irrevocably agrees to grant
and hereby grants to each Lender, and to induce US LC Issuer to issue Letters of
Credit hereunder, each Lender irrevocably agrees to accept and purchase and
hereby accepts and purchases from US LC Issuer, on the terms and conditions
hereinafter stated and for such Lender's own account and risk, an undivided
interest equal to such Lender's Percentage Share of US LC Issuer's obligations
and rights under each Letter of Credit issued hereunder and the amount of each
Matured US LC Obligation paid by US LC Issuer thereunder. Each Lender
unconditionally and irrevocably agrees with US LC Issuer that, if a Matured US
LC Obligation is paid under any Letter of Credit issued hereunder for which US
LC Issuer is not reimbursed in full, whether pursuant to Section 2.3(a) above or
otherwise, such Lender shall (in all circumstances and without set-off or
counterclaim) pay to US LC Issuer on demand, in immediately available funds at
US LC Issuer's address for notices hereunder, such Lender's Percentage Share of
such Matured US LC
12
18
Obligation (or any portion thereof which has not been reimbursed by US
Borrower). Each Lender's obligation to pay US LC Issuer pursuant to the terms of
this subsection is irrevocable and unconditional. If any amount required to be
paid by any Lender to US LC Issuer pursuant to this subsection is paid by such
Lender to US LC Issuer within three Business Days after the date such payment is
due, US LC Issuer shall in addition to such amount be entitled to recover from
such Lender, on demand, interest thereon calculated from such due date at the
Federal Funds Rate. If any amount required to be paid by any Lender to US LC
Issuer pursuant to this subsection is not paid by such Lender to US LC Issuer
within three Business Days after the date such payment is due, US LC Issuer
shall in addition to such amount be entitled to recover from such Lender, on
demand, interest thereon calculated from such due date at the Default Rate.
(c) Distributions to Participants. Whenever US LC Issuer has in
accordance with this section received from any Lender payment of such Lender's
Percentage Share of any Matured US LC Obligation, if US LC Issuer thereafter
receives any payment of such Matured US LC Obligation or any payment of interest
thereon (whether directly from US Borrower or by application of LC Collateral or
otherwise, and excluding only interest for any period prior to US LC Issuer's
demand that such Lender make such payment of its Percentage Share), US LC Issuer
will distribute to such Lender its Percentage Share of the amounts so received
by US LC Issuer; provided, however, that if any such payment received by US LC
Issuer must thereafter be returned by US LC Issuer, such Lender shall return to
US LC Issuer the portion thereof which US LC Issuer has previously distributed
to it.
(d) Calculations. A written advice setting forth in reasonable detail
the amounts owing under this section, submitted by US LC Issuer to US Borrower
or any Lender from time to time, shall be conclusive, absent manifest error, as
to the amounts thereof.
Section 2.4. Letter of Credit Fees. In consideration of US LC Issuer's
issuance of any Letter of Credit, US Borrower agrees to pay (a) to US LC Issuer
for its own account, a letter of credit fronting fee at a rate equal to 12.5
Basis Points multiplied by the face amount of such Letter of Credit, payable on
the date of issuance, and (b) to US Agent, for the account of all Lenders in
accordance with their respective Percentage Shares, a letter of credit issuance
fee calculated by applying the Applicable Margin to the face amount of all
Letters of Credit outstanding on each day, payable in arrears on the last day of
each Fiscal Quarter.
Section 2.5. No Duty to Inquire.
(a) Drafts and Demands. US LC Issuer is authorized and instructed to
accept and pay drafts and demands for payment under any Letter of Credit without
requiring, and without responsibility for, any determination as to the existence
of any event giving rise to said draft, either at the time of acceptance or
payment or thereafter. US LC Issuer is under no duty to determine the proper
identity of anyone presenting such a draft or making such a demand (whether by
tested telex or otherwise) as the officer, representative or agent of any
beneficiary under any Letter of Credit, and payment by US LC Issuer to any such
beneficiary when requested by any such purported officer, representative or
agent is hereby authorized and approved. US BORROWER RELEASES EACH LENDER PARTY
FROM, AND AGREES TO HOLD EACH LENDER PARTY HARMLESS
13
19
AND INDEMNIFIED AGAINST, ANY LIABILITY OR CLAIM IN CONNECTION WITH OR ARISING
OUT OF THE SUBJECT MATTER OF THIS SECTIOn, WHICH INDEMNITY SHALL APPLY WHETHER
OR NOT ANY SUCH LIABILITY OR CLAIM IS IN ANY WAY OR TO ANY EXTENT CAUSED, IN
WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY ANY LENDER
PARTY, provided only that no Lender Party shall be entitled to indemnification
for that portion, if any, of any liability or claim which is proximately caused
by its own individual gross negligence or willful misconduct, as determined in a
final judgment.
(b) Extension of Maturity. If the maturity of any Letter of Credit is
extended by its terms or by Law or governmental action, if any extension of the
maturity or time for presentation of drafts or any other modification of the
terms of any Letter of Credit is made at the request of any Restricted Person,
or if the amount of any Letter of Credit is increased at the request of any
Restricted Person, this Agreement shall be binding upon all Restricted Persons
with respect to such Letter of Credit as so extended, increased or otherwise
modified, with respect to drafts and property covered thereby, and with respect
to any action taken by US LC Issuer, US LC Issuer's correspondents, or any
Lender Party in accordance with such extension, increase or other modification.
(c) Transferees of Letters of Credit. If any Letter of Credit provides
that it is transferable, US LC Issuer shall have no duty to determine the proper
identity of anyone appearing as transferee of such Letter of Credit, nor shall
US LC Issuer be charged with responsibility of any nature or character for the
validity or correctness of any transfer or successive transfers, and payment by
US LC Issuer to any purported transferee or transferees as determined by US LC
Issuer is hereby authorized and approved, and US BORROWER RELEASES EACH LENDER
PARTY FROM, AND AGREES TO HOLD EACH LENDER PARTY HARMLESS AND INDEMNIFIED
AGAINST, ANY LIABILITY OR CLAIM IN CONNECTION WITH OR ARISING OUT OF THE
FOREGOING, WHICH INDEMNITY SHALL APPLY WHETHER OR NOT ANY SUCH LIABILITY OR
CLAIM IS IN ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY ANY LENDER PARTY, provided only that no
Lender Party shall be entitled to indemnification for that portion, if any, of
any liability or claim which is proximately caused by its own individual gross
negligence or willful misconduct, as determined in a final judgment.
Section 2.6. LC Collateral.
(a) US LC Obligations in Excess of US Maximum Credit Amount. If, after
the making of all mandatory prepayments required under Section 1.6(b), the US LC
Obligations outstanding under the US Agreement will exceed the Tranche A Maximum
Credit Amount, then in addition to prepayment of the entire principal balance of
the US Loans US Borrower will immediately pay to US LC Issuer an amount equal to
such excess. US LC Issuer will hold such amount as security for the remaining US
LC Obligations outstanding under the US Agreement (all such amounts held as
security for US LC Obligations being herein collectively called "LC Collateral")
and the other US Obligations, and such collateral may be applied from time to
time
14
20
to any Matured US LC Obligations or other US Obligations which are due and
payable. Neither this subsection nor the following subsection shall, however,
limit or impair any rights which US LC Issuer may have under any other document
or agreement relating to any Letter of Credit, LC Collateral or US LC
Obligation, including any LC Application, or any rights which any Lender Party
may have to otherwise apply any payments by US Borrower and any LC Collateral
under Section 3.1.
(b) Acceleration of US LC Obligations. If the US Obligations or any
part thereof become immediately due and payable pursuant to Section 8.1 then,
unless Required Lenders otherwise specifically elect to the contrary (which
election may thereafter be retracted by Required Lenders at any time), all US LC
Obligations shall become immediately due and payable without regard to whether
or not actual drawings or payments on the Letters of Credit have occurred, and
US Borrower shall be obligated to pay to US LC Issuer immediately an amount
equal to the aggregate US LC Obligations which are then outstanding.
(c) Investment of LC Collateral. Pending application thereof, all LC
Collateral shall be invested by US LC Issuer in such Investments as US LC Issuer
may choose in its sole discretion. All interest on (and other proceeds of) such
Investments shall be reinvested or applied to Matured US LC Obligations or other
US Obligations which are due and payable. When all US Obligations have been
satisfied in full, including all US LC Obligations, all Letters of Credit have
expired or been terminated, and all of US Borrower's reimbursement obligations
in connection therewith have been satisfied in full, US LC Issuer shall release
any remaining LC Collateral. US Borrower hereby assigns and grants to US LC
Issuer a continuing security interest in all LC Collateral paid by it to US LC
Issuer, all Investments purchased with such LC Collateral, and all proceeds
thereof to secure its Matured US LC Obligations and the other US Obligations
hereunder, each US Note, and the other US Loan Documents. US Borrower further
agrees that US LC Issuer shall have all of the rights and remedies of a secured
party under the Uniform Commercial Code as adopted in the State of Texas with
respect to such security interest and that an Event of Default under this
Agreement shall constitute a default for purposes of such security interest.
When US Borrower is required to provide LC Collateral for any reason and fails
to do so on the day when required, US LC Issuer may without notice to US
Borrower or any other Restricted Person provide such LC Collateral (whether by
transfers from other accounts maintained with US LC Issuer, or otherwise) using
any available funds of US Borrower or any other Person also liable to make such
payments.
ARTICLE III - Payments to Lenders
Section 3.1. General Procedures. US Borrower will make each payment
which it owes under the US Loan Documents to US Agent for the account of the
Lender Party to whom such payment is owed, in lawful money of the United States
of America, without set-off, deduction or counterclaim, and in immediately
available funds. Each such payment must be received by US Agent not later than
11:00 a.m., Dallas, Texas time, on the date such payment becomes due and
payable. Any payment received by US Agent after such time will be deemed to have
been made on the next following Business Day. Should any such payment become due
and payable on a day
15
21
other than a Business Day, the maturity of such payment shall be extended to the
next succeeding Business Day, and, in the case of a payment of principal or past
due interest, interest shall accrue and be payable thereon for the period of
such extension as provided in the US Loan Document under which such payment is
due. Each payment under a US Loan Document shall be due and payable at the place
provided therein and, if no specific place of payment is provided, shall be due
and payable at the place of payment of US Agent's US Note. When US Agent
collects or receives money on account of the US Obligations, US Agent shall
distribute all money so collected or received by 2:00 p.m. Dallas, Texas time on
the Business Day received, if received by 11:00 a.m. Dallas, Texas time,
otherwise on the day of deemed receipt, and each Lender Party shall apply all
such money so distributed, as follows:
(a) first, for the payment of all US Obligations which are then due
(and if such money is insufficient to pay all such US Obligations, first to any
reimbursements due US Agent under Section 6.9 or 10.4, then to any reimbursement
due any other Lender Party under Section 10.4, and then to the partial payment
of all other US Obligations then due in proportion to the amounts thereof, or as
Lender Parties shall otherwise agree);
(b) then for the prepayment of amounts owing under the US Loan
Documents (other than principal on the US Notes) if so specified by US Borrower;
(c) then for the prepayment of principal on the US Notes, together with
accrued and unpaid interest on the principal so prepaid; and
(d) last, for the payment or prepayment of any other US Obligations.
All payments applied to principal or interest on any US Note shall be applied
first to any interest then due and payable, then to principal then due and
payable, and last to any prepayment of principal and interest in compliance with
Sections 1.6 and 2.1. All distributions of amounts described in any of
subsections (b), (c) or (d) above shall be made by US Agent pro rata to each
Lender Party then owed US Obligations described in such subsection in proportion
to all amounts owed to all Lender Parties which are described in such
subsection; provided that if any Lender then owes payments to US LC Issuer for
the purchase of a participation under Section 2.3(b) or to US Agent under
Section 9.9, any amounts otherwise distributable under this section to such
Lender shall be deemed to belong to US LC Issuer, or US Agent, respectively, to
the extent of such unpaid payments, and US Agent shall apply such amounts to
make such unpaid payments rather than distribute such amounts to such Lender.
Section 3.2. Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of any applicable Law,
rule, or regulation, or any change in any applicable Law, rule, or regulation,
or any change in the interpretation or administration thereof by any
Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender Party (or
its Applicable Lending Office) with any request or directive (whether or not
having the force of Law) of any such Governmental Authority, central bank, or
comparable agency:
16
22
(i) shall subject such Lender Party (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any US Dollar
Eurodollar Loans or Competitive Bid Loans, or its obligation to make US
Dollar Eurodollar Loans, or change the basis of taxation of any amounts
payable to such Lender Party (or its Applicable Lending Office) under
this Agreement or its Note in respect of any US Dollar Eurodollar Loans
or Competitive Bid Loans (other than taxes (including franchise taxes)
imposed on the overall net income of such Lender Party by the
jurisdiction in which such Lender Party has its principal office or
such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted US
Dollar Eurodollar Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities or commitments of,
such Lender Party (or its Applicable Lending Office), including the
commitment of such Lender Party hereunder; or
(iii) shall impose on such Lender Party (or its Applicable
Lending Office) or the London interbank market any other condition
affecting this Agreement or its US Notes or any of such extensions of
credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
Party (or its Applicable Lending Office) of making, converting into, continuing,
or maintaining any US Dollar Eurodollar Loans or Competitive Bid Loans or to
reduce any sum received or receivable by such Lender Party (or its Applicable
Lending Office) under this Agreement or its US Notes with respect to any US
Dollar Eurodollar Loans or Competitive Bid Loans, then US Borrower shall pay to
such Lender Party on demand such amount or amounts as will compensate such
Lender Party for such increased cost or reduction. If any Lender Party requests
compensation by US Borrower under this Section 3.2(a), US Borrower may, by
notice to such Lender Party (with a copy to US Agent), suspend the obligation of
such Lender Party to make or continue US Loans of the Type with respect to which
such compensation is requested, or to convert US Loans of any other Type into US
Loans of such Type, until the event or condition giving rise to such request
ceases to be in effect (in which case the provisions of Section 3.5 shall be
applicable); provided that such suspension shall not affect the right of such
Lender Party to receive the compensation so requested.
(b) If, after the date hereof, any Lender Party shall have determined
that the adoption of any applicable Law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any Governmental Authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of Law) of
any such Governmental Authority, central bank, or comparable agency, has or
would have the effect of reducing the rate of return on the capital of such
Lender Party or any corporation controlling such Lender Party as a consequence
the obligations of such Lender Party hereunder to a level below that which such
Lender Party or such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its policies with
respect to capital
17
23
adequacy), then from time to time upon demand US Borrower shall pay such Lender
Party such additional amount or amounts as will compensate such Lender Party for
such reduction, but only to the extent that such Lender Party has not been
compensated therefor by any increase in the Adjusted US Dollar Eurodollar Rate;
provided that if such Lender Party fails to give notice to US Borrower of any
additional costs within ninety (90) days after it has actual knowledge thereof,
such Lender Party shall not be entitled to compensation for such additional
costs incurred more than ninety (90) days prior to the date on which notice is
given by such Lender Party.
(c) US LC Issuer and each Lender Party shall promptly notify US
Borrower and US Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle US LC Issuer or such Lender Party to
compensation pursuant to this Section and will designate a different Applicable
Lending Office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such Lender Party, be
otherwise disadvantageous to it. US LC Issuer or any Lender Party claiming
compensation under this Section shall furnish to US Borrower and US Agent a
statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, US LC Issuer or such Lender Party shall act in good
faith and may use any reasonable averaging and attribution methods.
Section 3.3. Limitation on Types of US Loans. If on or prior to the
first day of any Eurodollar Interest Period for any US Dollar Eurodollar Loan:
(a) US Agent determines (which determination shall be conclusive) that
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the US Dollar Eurodollar Rate for
such Eurodollar Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify US Agent that the Adjusted US Dollar Eurodollar Rate will
not adequately and fairly reflect the cost to the Lenders of funding US Dollar
Eurodollar Loans or for such Eurodollar Interest Period;
then US Agent shall give US Borrower prompt notice thereof specifying the
relevant amounts or periods, and so long as such condition remains in effect,
the Lender Parties shall be under no obligation to make additional US Dollar
Eurodollar Loans, continue US Dollar Eurodollar Loans or convert US Base Rate
Loans into US Dollar Eurodollar Loans, and US Borrower shall, on the last day(s)
of the then current Eurodollar Interest Period(s) for the outstanding US Dollar
Eurodollar Loans, either prepay such US Loans or convert such US Loans into US
Base Rate Loans in accordance with the terms of this Agreement.
Section 3.4. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender Party or its
Applicable Lending Office to make, maintain, or fund US Dollar Eurodollar Loans
hereunder, then such Lender Party shall promptly notify US Borrower thereof and
such Lender Party's obligation to make or continue US Dollar Eurodollar Loans
and to convert US Base Rate Loans into US Dollar Eurodollar Loans shall be
18
24
suspended until such time as such Lender Party may again make, maintain, and
fund US Dollar Eurodollar Loans (in which case the provisions of Section 3.5
shall be applicable).
Section 3.5. Treatment of Affected US Loans. If the obligation of any
Lender Party to make a particular Type of Loan or to continue, or to convert US
Loans of any other Type into, US Loans of a particular Type shall be suspended
pursuant to Sections 3.2, 3.3 or 3.4 hereof (US Loans of such Type being herein
called "Affected Loans" and such Type being herein called the "Affected Type"),
such Lender Party's Affected Loans shall be automatically converted into US Base
Rate Loans on the last day(s) of the then current Interest Period(s) for
Affected Loans (or, in the case of a Conversion required by Section 3.4 hereof,
on such earlier date as such Lender Party may specify to US Borrower with a copy
to US Agent) and, unless and until such Lender Party gives notice as provided
below that the circumstances specified in Sections 3.2, 3.3 or 3.4 hereof that
gave rise to such Conversion no longer exist:
(a) to the extent that such Lender Party's Affected Loans have been so
converted, all payments and prepayments of principal that would otherwise be
applied to such Lender Party's Affected Loans shall be applied instead to its US
Base Rate Loans; and
(b) all US Loans that would otherwise be made or continued by such
Lender Party as US Loans of the Affected Type shall be made or continued instead
as US Base Rate Loans, and all US Loans of such Lender Party that would
otherwise be converted into US Loans of the Affected Type shall be converted
instead into (or shall remain as) US Base Rate Loans.
If such Lender Party gives notice to US Borrower (with a copy to US Agent) that
the circumstances specified in Section 3.2, 3.3 or 3.4 hereof that gave rise to
the Conversion of such Lender Party's Affected Loans pursuant to this Section no
longer exist (which such Lender Party agrees to do promptly upon such
circumstances ceasing to exist) at a time when US Loans of the Affected Type
made by other Lender Parties are outstanding, such Lender Party's US Base Rate
Loans shall be automatically converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding US Loans of the Affected
Type, to the extent necessary so that, after giving effect thereto, all US Loans
held by the Lender Parties holding US Loans of the Affected Type and by such
Lender Party are held pro rata (as to principal amounts, Types, and Interest
Periods) in accordance with their Percentage Shares of the US Maximum Credit
Amount.
Section 3.6. Compensation. Upon the request of any Lender Party, US
Borrower shall pay to such Lender Party such amount or amounts as shall be
sufficient (in the reasonable opinion of such Lender Party) to compensate it for
any loss, cost, or expense (including loss of anticipated profits) incurred by
it as a result of:
(a) any payment, prepayment, or Conversion of a US Dollar Eurodollar
Loan for any reason (including, without limitation, the acceleration of the US
Loans pursuant to Section 8.1) on a date other than the last day of the Interest
Period for such US Loan; or
(b) any failure by US Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Article IV to be
satisfied) to borrow, convert,
19
25
continue, or prepay a US Dollar Eurodollar Loan on the date for such borrowing,
Conversion, Continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, Continuation, or Conversion under this Agreement.
Section 3.7. Change of Applicable Lending Office. Each Lender Party
agrees that, upon the occurrence of any event giving rise to the operation of
Sections 3.2 through 3.5 with respect to such Lender Party, it will, if
requested by US Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender Party) to designate another Applicable Lending
Office, provided that such designation is made on such terms that such Lender
Party and its Applicable Lending Office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of any such section. Nothing in this section shall affect
or postpone any of the obligations of US Borrower or the rights of any Lender
Party provided in Sections 3.2 through 3.5.
Section 3.8. Replacement of Lenders. If any Lender Party seeks
reimbursement for increased costs under Sections 3.2 through 3.5, or if a US
Borrower is required to increase any such payment under Section 3.9, then within
ninety days thereafter -- provided no Event of Default then exists -- US
Borrower shall have the right (unless such Lender Party withdraws its request
for additional compensation) to replace such Lender Party by requiring such
Lender Party to assign its US Loans, US Notes, US LC Obligations, Canadian
Advances, Canadian Notes, Canadian LC Obligations and its commitments hereunder
and under the Canadian Agreement to an Eligible Transferee reasonably acceptable
to all Borrowers, provided that: (a) all Obligations of Borrowers owing to such
Lender Party being replaced (including such increased costs, but excluding
principal and accrued interest on the US Notes and the Canadian Notes being
assigned) shall be paid in full to such Lender Party concurrently with such
assignment, and (b) the replacement Eligible Transferee shall purchase the
foregoing by paying to such Lender Party a price equal to the principal amount
thereof plus accrued and unpaid interest thereon. In connection with any such
assignment US Borrower, US Agent, such Lender Party and the replacement Eligible
Transferee shall otherwise comply with Section 10.5. Notwithstanding the
foregoing rights of US Borrower under this section, however, US Borrower may not
replace any Lender Party which seeks reimbursement for increased costs under
Section 3.2 through 3.5 unless US Borrower is at the same time replacing all
Lender Parties which are then seeking such compensation. In connection with any
such replacement of a Lender Party, US Borrower shall pay all costs that would
have been due to such Lender Party pursuant to Section 3.6 if such Lender
Party's US Loans had been prepaid at the time of such replacement.
Section 3.9. Taxes. (a) Any and all payments by US Borrower to or for
the account of any Lender Party, US Agent or US LC Issuer hereunder or under any
other US Loan Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender Party, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the Laws of which such Lender Party (or
its Applicable Lending Office) is organized or is a resident for tax purposes or
any political subdivision thereof (all such NON-EXCLUDED taxes, duties, levies,
imposts, deductions, charges, withholdings, and liabilities being hereinafter in
this section 3.9 referred to as "Taxes"). If US
20
26
Borrower shall be required by Law to deduct any Taxes from or in respect of any
sum payable under this Agreement or any other US Loan Document to any Lender
Party, (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this section) such Lender Party receives an amount equal to the
sum it would have received had no such deductions been made, (ii) US Borrower
shall make such deductions, and (iii) US Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable Law.
(b) In addition, US Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this Agreement
or any other US Loan Document or from the execution or delivery of, or otherwise
with respect to, this Agreement or any other US Loan Document (hereinafter in
this Section 3.9 referred to as "Other Taxes").
(c) US Borrower agrees to indemnify each Lender Party, US Agent and US
LC Issuer for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this section) paid by such Lender Party or US Agent (as
the case may be) and any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto.
(d) Each Lender Party organized under the Laws of a jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this Agreement in the case of each Lender Party listed on the signature pages
hereof and on or prior to the date on which it becomes a Lender Party in the
case of each other Lender Party, and from time to time thereafter if requested
in writing by US Borrower or US Agent (but only so long as such Lender Party
remains lawfully able to do so), shall provide US Borrower and US Agent with a
properly executed (i) Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Lender Party is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States, (ii) Internal Revenue Service Form W-8 or W-9,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, and (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and 881(c) of
the Internal Revenue Code), certifying that such Lender Party is entitled to an
exemption from or a reduced rate of tax on payments pursuant to this Agreement
or any of the other US Loan Documents.
(e) For any period with respect to which a Lender Party has failed to
provide US Borrower and US Agent with the appropriate form pursuant to Section
3.9(d) (unless such failure is due to a change in treaty, Law, or regulation
occurring subsequent to the date on which a form originally was required to be
provided), such Lender Party shall not be entitled to indemnification under
Sections 3.9(a), 3.9(b) or 3.9(c) with respect to Taxes imposed by the United
States; provided, however, that should a Lender Party, which is otherwise exempt
from or subject to a reduced rate of withholding tax, become subject to Taxes
because of its failure to deliver a form required hereunder, US Borrower shall
take such steps as such Lender Party shall reasonably
21
27
request to assist such Lender Party to recover such Taxes. Further, US Borrower
shall not be required to indemnify such Lender Party for any withholding taxes
which US Borrower is required to withhold and remit in respect of any principal,
interest or other amount paid or payable by US Borrower to or for account of any
Lender Party hereunder or under any other US Loan Document.
(f) If US Borrower is required to pay additional amounts to or for the
account of any Lender Party pursuant to this Section, then such Lender Party
will agree to use reasonable efforts to change the jurisdiction of its
Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of such
Lender Party, is not otherwise disadvantageous to such Lender Party and in the
event Lender Party is reimbursed for an amount paid by US Borrower pursuant to
this Section, it shall promptly return such amount to US Borrower.
(g) Within thirty (30) days after the date of any payment of Taxes, US
Borrower shall furnish to US Agent the original or a certified copy of a receipt
evidencing such payment.
(h) Without prejudice to the survival of any other agreement of US
Borrower hereunder, the agreements and obligations of US Borrower contained in
this section shall survive the termination of the US Facility Commitment Period
and the payment in full of the US Notes.
Section 3.10. Currency Conversion and Currency Indemnity.
(a) Restricted Persons shall make payment relative to any US Obligation
in the currency (the "Agreed Currency") in which the US Obligation was incurred.
If any payment is received on account of any US Obligation in any currency (the
"Other Currency") other than the Agreed Currency (whether voluntarily or
pursuant to an order or judgment or the enforcement thereof or the realization
of any security or the liquidation of such Restricted Person or otherwise
howsoever), such payment shall constitute a discharge of the liability of a
Restricted Person hereunder and under the other US Loan Documents in respect of
such US Obligation only to the extent of the amount of the Agreed Currency which
the relevant Lender Parties are able to purchase with the amount of the Other
Currency received by it on the Business Day next following such receipt in
accordance with its normal procedures and after deducting any premium and costs
of exchange.
(b) If, for the purpose of obtaining or enforcing judgment in any court
in any jurisdiction, it becomes necessary to convert into a particular currency
(the"Judgment Currency") any amount due in the Agreed Currency then the
conversion shall be made on the basis of the rate of exchange prevailing on the
next Business Day following the date such judgment is given and in any event
each Restricted Person shall be obligated to pay the Lender Parties any
deficiency in accordance with Section 3.10(c). For the foregoing purposes "rate
of exchange" means the rate at which the relevant Lender Parties, as applicable,
in accordance with their normal banking procedures are able on the relevant date
to purchase the Agreed Currency with the Judgment Currency after deducting any
premium and costs of exchange.
22
28
(c) If (i) any Lender Party receives any payment or payments on account
of the liability of a Restricted Person hereunder pursuant to any judgment or
order in any Other Currency, and (ii) the amount of the Agreed Currency which
the relevant Lender Party is able to purchase on the Business Day next following
such receipt with the proceeds of such payment or payments in accordance with
its normal procedures and after deducting any premiums and costs of exchange is
less than the amount of the Agreed Currency due in respect of such US
Obligations immediately prior to such judgment or order, then US Borrower on
demand shall, and US Borrower hereby agrees to, indemnify and save such Lender
Party harmless from and against any loss, cost or expense arising out of or in
connection with such deficiency. The agreement of indemnity provided for in this
Section 3.10(c) shall constitute an obligation separate and independent from all
other obligations contained in this Agreement, shall give rise to a separate and
independent cause of action, shall apply irrespective of any indulgence granted
by the Lender Parties or any of them from time to time, and shall continue in
full force and effect notwithstanding any judgment or order for a liquidated sum
in respect of an amount due hereunder or under any judgment or order.
ARTICLE IV - Conditions Precedent to Lending
Section 4.1. Documents to be Delivered. No Lender has any obligation to
make its first US Loan, and US LC Issuer has no obligation to issue the first
Letter of Credit, unless US Agent shall have received all of the following, at
US Agent's office in Dallas, Texas, duly executed and delivered and in form,
substance and date satisfactory to US Agent:
(a) This Agreement and any other documents that Lenders are to execute
in connection herewith.
(b) Each US Note.
(c) Certain certificates of US Borrower including:
(i) An "Omnibus Certificate" of the Secretary or Assistant
Secretary and of the Chairman of the Board, President, or Vice
President - Finance of US Borrower, which shall contain the names and
signatures of the officers of US Borrower authorized to execute US Loan
Documents and which shall certify to the truth, correctness and
completeness of the following exhibits attached thereto: (1) a copy of
resolutions duly adopted by the Board of Directors of US Borrower and
in full force and effect at the time this Agreement is entered into,
authorizing the execution of this Agreement and the other US Loan
Documents delivered or to be delivered in connection herewith and the
consummation of the transactions contemplated herein and therein, (2) a
copy of the charter documents of US Borrower and all amendments
thereto, certified by the appropriate official of the State of
Oklahoma, and (3) a copy of any bylaws of US Borrower; and
23
29
(ii) A "Compliance Certificate" of the Chairman of the Board
or President and of the Vice President - Finance of US Borrower, of
even date with such US Loan or such Letter of Credit, in which such
officers certify to the satisfaction of the conditions set out in
subsections (a), (b), and (c) of Section 4.3.
(d) certificate (or certificates) of the due formation, valid existence
and good standing of US Borrower in the State of Oklahoma, issued by the
appropriate official of such State.
(e) A favorable opinion of McAfee & ▇▇▇▇, a professional corporation,
counsel for Restricted Persons, substantially in the form set forth in Exhibit E
and a favorable opinion of ▇▇▇▇▇▇▇▇ & Knight, P.C. covering the matters
requested by US Agent.
(f) The Initial Financial Statements.
(g) A copy of each Acquisition Document.
Section 4.2. Additional Conditions Precedent to First US Loan or First
Letter of Credit. No Lender has any obligation to make its first US Loan, and US
LC Issuer has no obligation to issue the first Letter of Credit, unless on the
date thereof:
(a) US Borrower shall have consummated the transactions contemplated
under the Acquisition Documents, and acquired, directly or indirectly, one
hundred percent (100%) of the
outstanding common shares of Northstar Energy.
(b) All approvals, if any, required under the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇
Antitrust Improvement Act of 1976, as amended, in connection with the
transactions contemplated by the Acquisition Documents, shall have been
obtained.
(c) All commitment, facility, agency, legal and other fees required to
be paid or reimbursed to any Lender pursuant to any US Loan Documents or any
commitment agreement
heretofore entered into shall have been paid.
(d) No event which would reasonably be expected to have a Material
Adverse Effect shall have occurred since September 30, 1998.
(e) US Borrower shall have certified to US Agent and Lenders that the
Initial Financial Statements fairly present US Borrower's Consolidated financial
position at the respective dates thereof and the Consolidated results of US
Borrower's operations and US Borrower's Consolidated cash flows for the
respective periods thereof.
(f) US Borrower shall have certified to US Agent and Lenders that no
Restricted Person has any outstanding Liabilities of any kind (including
contingent obligations, tax assessments, and unusual forward or long-term
commitments) which are, in the aggregate, material to US Borrower or material
with respect to US Borrower's Consolidated financial
24
30
condition and not shown in the Initial Financial Statements or disclosed in the
Disclosure Schedule.
(g) All legal matters relating to the US Loan Documents and the
consummation of the transactions contemplated thereby shall be satisfactory to
▇▇▇▇▇▇▇▇ & Knight, a Professional Corporation, counsel to US Agent.
Section 4.3. Additional Conditions Precedent to all US Loan and Letters
of Credit. No Lender has any obligation to make any US Loan (including its
first), and US LC Issuer has no obligation to issue any Letter of Credit
(including its first), unless the following conditions precedent have been
satisfied:
(a) All representations and warranties made by any Restricted Person in
any US Loan Document shall be true on and as of the date of such US Loan or the
date of issuance of such Letter of Credit (except to the extent that the facts
upon which such representations are based have been changed by the extension of
credit hereunder) as if such representations and warranties had been made as of
the date of such US Loan or the date of issuance of such Letter of Credit.
(b) No Default shall exist at the date of such US Loan or the date of
issuance of such Letter of Credit.
(c) The making of such US Loan or the issuance of such Letter of Credit
shall not be prohibited by any Law and shall not subject any Lender or any US LC
Issuer to any material penalty under or pursuant to any such Law.
ARTICLE V - Representations and Warranties
To confirm each Lender's understanding concerning Restricted Persons
and Restricted Persons' businesses, properties and obligations and to induce
each Lender to enter into this Agreement and to extend credit hereunder, US
Borrower represents and warrants to each Lender that:
Section 5.1. No Default. No event has occurred and is continuing
which constitutes a Default.
Section 5.2. Organization and Good Standing. Each Restricted Person is
duly organized, validly existing and in good standing under the Laws of its
jurisdiction of organization, having all powers required to carry on its
business and enter into and carry out the transactions contemplated hereby. Each
Restricted Person is duly qualified, in good standing, and authorized to do
business in all other jurisdictions within the United States wherein the
character of the properties owned or held by it or the nature of the business
transacted by it makes such qualification necessary except where failure to so
qualify would not have a Material Adverse Effect. Each Restricted Person has
taken all actions and procedures customarily taken in order to enter, for the
purpose of conducting business or owning property, each jurisdiction
25
31
outside the United States wherein the character of the properties owned or held
by it or the nature of the business transacted by it makes such actions and
procedures desirable except where failure to so qualify would not have a
Material Adverse Effect.
Section 5.3. Authorization. US Borrower and Canadian Borrowers have
duly taken all action necessary to authorize the execution and delivery by it of
the Loan Documents to which it is a party and to authorize the consummation of
the transactions contemplated thereby and the performance of its obligations
thereunder. US Borrower is duly authorized to borrow funds hereunder.
Section 5.4. No Conflicts or Consents. The execution and delivery by
the various Restricted Persons of the Loan Documents to which each is a party,
the performance by each of its obligations under such Loan Documents, and the
consummation of the transactions contemplated by the various Loan Documents, do
not and will not (i) conflict with any provision of (A) any Law, (B) the
organizational documents of any Restricted Person, or (C) any agreement,
judgment, license, order or permit applicable to or binding upon any Restricted
Person unless such conflict would not reasonably be expected to have a Material
Adverse Effect, or (ii)
result in the acceleration of any Indebtedness owed by any Restricted Person
which would reasonably be expected to have a Material Adverse Effect, or (iii)
result in or require the creation of any Lien upon any assets or properties of
any Restricted Person which would reasonably be expected to have a Material
Adverse Effect, except as expressly contemplated or permitted in the Loan
Documents. Except as expressly contemplated in the Loan Documents no consent,
approval, authorization or order of, and no notice to or filing with, any
Tribunal or third party is required in connection with the execution, delivery
or performance by any Restricted Person of any Loan Document or to consummate
any transactions contemplated by the Loan Documents, unless failure to obtain
such consent would not reasonably be expected to have a Material Adverse Effect.
Section 5.5. Enforceable Obligations. This Agreement is, and the other
Loan Documents when duly executed and delivered will be, legal, valid and
binding obligations of each Restricted Person which is a party hereto or
thereto, enforceable in accordance with their terms except as such enforcement
may be limited by bankruptcy, insolvency or similar Laws of general application
relating to the enforcement of creditors' rights.
Section 5.6. Full Disclosure. No certificate, statement or other
information delivered herewith or heretofore by any Restricted Person to any
Lender in connection with the negotiation of this Agreement or in connection
with any transaction contemplated hereby contains any untrue statement of a
material fact or omits to state any material fact known to any Restricted Person
(other than industry-wide risks normally associated with the types of businesses
conducted by Restricted Persons) necessary to make the statements contained
herein or therein not misleading as of the date made or deemed made. There is no
fact known to any Restricted Person (other than industry-wide risks normally
associated with the types of businesses conducted by Restricted Persons) that
has not been disclosed to each Lender in writing which would reasonably be
expected to have a Material Adverse Effect.
26
32
Section 5.7. Litigation. Except as disclosed in the Initial Financial
Statements or in the Disclosure Schedule: (a) there are no actions, suits or
legal, equitable, arbitrative or administrative proceedings pending, or to the
knowledge of any Restricted Person threatened, against any Restricted Person
before any Tribunal which would reasonably be expected to have a Material
Adverse Effect, and (b) there are no outstanding judgments, injunctions, writs,
rulings or orders by any such Tribunal against any Restricted Person which would
reasonably be expected to have a Material Adverse Effect.
Section 5.8. ERISA Plans and Liabilities. All currently existing ERISA
Plans are listed in the Disclosure Schedule. Except as disclosed in the Initial
Financial Statements or in the Disclosure Schedule, no Termination Event has
occurred with respect to any ERISA Plan and all ERISA Affiliates are in
compliance with ERISA in all material respects. No ERISA Affiliate is required
to contribute to, or has any other absolute or contingent liability in respect
of, any "multiemployer plan" as defined in Section 4001 of ERISA. Except as set
forth in the Disclosure Schedule: (a) no "accumulated funding deficiency" (as
defined in Section 412(a) of the Internal Revenue Code) exists with respect to
any ERISA Plan, whether or not waived by the Secretary of the Treasury or his
delegate, and (b) the current value of each ERISA Plan's benefits does not
exceed the current value of such ERISA Plan's assets available for the payment
of such benefits by more than US $25,000,000.
Section 5.9. Environmental and Other Laws. Except as disclosed in the
Disclosure Schedule: (a) Restricted Persons are conducting their businesses in
material compliance with all applicable Laws, including Environmental Laws, and
have and are in compliance with all licenses and permits required under any such
Laws, unless failure to so comply would not reasonably be expected to have a
Material Adverse Effect; (b) none of the operations or properties of any
Restricted Person is the subject of federal, state or local investigation
evaluating whether any material remedial action is needed to respond to a
release of any Hazardous Materials into the environment or to the improper
storage or disposal (including storage or disposal at offsite locations) of any
Hazardous Materials, unless such remedial action would not reasonably be
expected to have a Material Adverse Effect; and (c) no Restricted Person (and to
the best knowledge of US Borrower, no other Person) has filed any notice under
any Law indicating that any Restricted Person is responsible for the improper
release into the environment, or the improper storage or disposal, of any
material amount of any Hazardous Materials or that any Hazardous Materials have
been improperly released, or are improperly stored or disposed of, upon any
property of any Restricted Person, unless such failure to so comply would not
reasonably be expected to have a Material Adverse Effect.
Section 5.10. Names and Places of Business. No Restricted Person has,
during the preceding five years, had, been known by, or used any other trade or
fictitious name, except as disclosed in the Disclosure Schedule. Except as
otherwise indicated in the Disclosure Schedule, the chief executive office and
principal place of business of each Restricted Person are (and for the preceding
five years have been) located at the address of US Borrower set out on the
signature pages hereto. Except as indicated in the Disclosure Schedule, no
Restricted Person has any other office or place of business.
27
33
Section 5.11. US Borrower's Subsidiaries. US Borrower does not
presently have any Subsidiary or own any stock in any other corporation or
association except those listed in the Disclosure Schedule. Neither US Borrower
nor any Restricted Person is a member of any general or limited partnership,
limited liability company, joint venture formed under the laws of the United
States or any State thereof or association of any type whatsoever except those
listed in the Disclosure Schedule and associations, joint ventures or other
relationships (a) which are established pursuant to a standard form operating
agreement or similar agreement or which are partnerships for purposes of federal
income taxation only, (b) which are not corporations or partnerships (or subject
to the Uniform Partnership Act) under applicable state Law, and (c) whose
businesses are limited to the exploration, development and operation of oil, gas
or mineral properties, pipelines or gathering systems and interests owned
directly by the parties in such associations, joint ventures or relationships.
US Borrower owns, directly or indirectly, the equity interest in each of its
Subsidiaries which is indicated in the Disclosure Schedule.
Section 5.12. Title to Properties; Licenses. Each Restricted Person has
good and defensible title to all of its material properties and assets, free and
clear of all Liens other than Permitted Liens and of all impediments to the use
of such properties and assets in such Restricted Person's business except to the
extent failure to have such title would not have a Material Adverse Effect. Each
Restricted Person possesses all licenses, permits, franchises, patents,
copyrights, trademarks and trade names, and other intellectual property (or
otherwise possesses the right to use such intellectual property without
violation of the rights of any other Person) which are necessary to carry out
its business as presently conducted and as presently proposed to be conducted
hereafter, and no Restricted Person is in violation in any material respect of
the terms under which it possesses such intellectual property or the right to
use such intellectual property except to the extent failure to possess such
licenses, permits, franchises, and intellectual property would not have a
Material Adverse Effect.
Section 5.13. Government Regulation. Neither US Borrower nor any other
Restricted Person owing Obligations is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Investment
Company Act of 1940 (as any of the preceding acts have been amended) or any
other Law which regulates the incurring by such Person of Indebtedness,
including Laws relating to common contract carriers or the sale of electricity,
gas, steam, water or other public utility services.
Section 5.14. Insider. Except as disclosed on the Disclosure Schedule,
no Restricted Person, nor any Person having "control" (as that term is defined
in 12 U.S.C. ss. 375b(9) or in regulations promulgated pursuant thereto) of any
Restricted Person, is a "director" or an "executive officer" or "principal
shareholder" (as those terms are defined in 12 U.S.C. ss. 375b(8) or (9) or in
regulations promulgated pursuant thereto) of any Lender, of a bank holding
company of which any Lender is a Subsidiary or of any Subsidiary of a bank
holding company of which any Lender is a Subsidiary.
Section 5.15. Solvency. Upon giving effect to the issuance of the US
Notes, the execution of the US Loan Documents by US Borrower and the
consummation of the transactions
28
34
contemplated hereby, US Borrower will be solvent (as such term is used in
applicable bankruptcy, liquidation, receivership, insolvency or similar Laws).
Section 5.16. Year 2000 Compliance. US Borrower has (a) initiated a
review and assessment of all areas within its and each of its Subsidiaries'
business and operations (including those affected by suppliers and vendors) that
could be adversely affected by the "Year 2000 Problem" (that is, the risk that
computer applications used by US Borrower and its Subsidiaries may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999), (b)developed a plan and timeline
for addressing the Year 2000 Problem on a timely basis, and (c) to date,
implemented that plan in accordance with that timetable. US Borrower reasonably
believes that all computer applications (including those of its suppliers and
vendors) that are material to its or any of its Subsidiaries' business and
operations will on a timely basis be able to perform properly date-sensitive
functions for all dates before and after January 1, 2000 (that is, be "Year 2000
compliant"), except to the extent that a failure to do so would not reasonably
be expected to have a Material Adverse Effect.
ARTICLE VI - Affirmative Covenants of US Borrower
To conform with the terms and conditions under which each Lender is
willing to have credit outstanding to US Borrower, and to induce each Lender to
enter into this Agreement and extend credit hereunder, US Borrower warrants,
covenants and agrees that until the full and final payment of the Obligations
and the termination of this Agreement, unless Required Lenders have previously
agreed otherwise:
Section 6.1. Payment and Performance. US Borrower will pay all amounts
due under the US Loan Documents in accordance with the terms thereof and will
observe, perform and comply with every covenant, term and condition expressed or
implied in the US Loan Documents. US Borrower will cause each other Restricted
Person to observe, perform and comply with every such term, covenant and
condition in any Loan Document.
Section 6.2. Books, Financial Statements and Reports. Each Restricted
Person will at all times maintain full and accurate books of account and
records. US Borrower will maintain and will cause its Subsidiaries to maintain a
standard system of accounting, will maintain its Fiscal Year, and will furnish
the following statements and reports to each Lender Party at US Borrower's
expense:
(a) As soon as available, and in any event within ninety (90) days
after the end of each Fiscal Year, complete Consolidated financial statements of
US Borrower together with all notes thereto, prepared in reasonable detail in
accordance with US GAAP, together with an unqualified opinion, based on an audit
using generally accepted auditing standards, by KPMG Peat Marwick L.L.P., or
other independent certified public accountants selected by US Borrower and
acceptable to US Agent, stating that such Consolidated financial statements have
been so prepared. These financial statements shall contain a Consolidated
balance sheet as of the end of such Fiscal Year and Consolidated statements of
earnings, of cash flows, and of changes in
29
35
owners' equity for such Fiscal Year, each setting forth in comparative form the
corresponding figures for the preceding Fiscal Year. In addition, within ninety
(90) days after the end of each Fiscal Year US Borrower will furnish to US Agent
and each Lender a certificate in the form of Exhibit D signed by the President,
Vice President - Finance or Controller of US Borrower, stating that such
financial statements are accurate and complete, stating that such Person has
reviewed the US Loan Documents, containing all calculations required to be made
to show compliance or non-compliance with the provisions of Sections 7.8 and
7.9, and further stating that there is no condition or event at the end of such
Fiscal Year or at the time of such certificate which constitutes a Default and
specifying the nature and period of existence of any such condition or event.
(b) As soon as available, and in any event within forty-five (45) days
after the end of each Fiscal Quarter, US Borrower's Consolidated and
consolidating balance sheet and income statement as of the end of such Fiscal
Quarter and a Consolidated statement of cash flows for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal Quarter, all
in reasonable detail and prepared in accordance with US GAAP, subject to changes
resulting from normal year-end adjustments. In addition US Borrower will,
together with each such set of financial statements, furnish a certificate in
the form of Exhibit D signed by the President, Vice President - Finance or
Controller of US Borrower stating that such financial statements are accurate
and complete (subject to normal year-end adjustments), stating that such Person
has reviewed the US Loan Documents, containing all calculations required to be
made by US Borrower to show compliance or non-compliance with the provisions of
Sections 7.8 and 7.9 and further stating that there is no condition or event at
the end of such Fiscal Quarter or at the time of such certificate which
constitutes a Default and specifying the nature and period of existence of any
such condition or event.
(c) Promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent by any Restricted Person
to its stockholders and all registration statements, periodic reports and other
statements and schedules filed by any Restricted Person with any securities
exchange, the Securities and Exchange Commission or any similar Governmental
Authority, including any information or estimates with respect to US Borrower's
oil and gas business (including its exploration, development and production
activities) which are required to be furnished in US Borrower's annual report
pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934, as
amended.
Section 6.3. Other Information and Inspections. Each Restricted Person
will furnish to each Lender any information which US Agent may from time to time
reasonably request concerning any covenant, provision or condition of the Loan
Documents or any matter in connection with Restricted Persons' businesses and
operations. Each Restricted Person will permit representatives appointed by US
Agent (including independent accountants, auditors, agents, attorneys,
appraisers and any other Persons) to visit and inspect upon prior written notice
during normal business hours any of such Restricted Person's property, including
its books of account, other books and records, and any facilities or other
business assets, and to make extra copies therefrom and photocopies and
photographs thereof, and to write down and record any information such
representatives obtain, and each Restricted Person shall permit US Agent or its
30
36
representatives to investigate and verify the accuracy of the information
furnished to US Agent or any Lender in connection with the Loan Documents and to
discuss all such matters with its officers, employees and representatives.
Section 6.4. Notice of Material Events and Change of Address. US
Borrower will promptly notify each Lender in writing, stating that such notice
is being given pursuant to this Agreement, of:
(a) the occurrence of any event which would have a Material Adverse
Effect,
(b) the occurrence of any Default,
(c) the acceleration of the maturity of any Indebtedness owed by any
Restricted Person having a principal balance of more than US $25,000,000, or of
any default by any Restricted Person under any indenture, mortgage, agreement,
contract or other instrument to which any of them is a party or by which any of
them or any of their properties is bound, if such default would have a Material
Adverse Effect,
(d) the occurrence of any Termination Event,
(e) any claim of US $25,000,000 or more, any notice of potential
liability under any Environmental Laws which might exceed such amount, or any
other material adverse claim asserted against any Restricted Person or with
respect to any Restricted Person's properties, and
(f) the filing of any suit or proceeding against any Restricted Person
in which an adverse decision would have a Material Adverse Effect.
US Borrower will also notify US Agent and US Agent's counsel in writing promptly
in the event that any Restricted Person changes its name or the location of its
chief executive office.
Section 6.5. Maintenance of Properties. Each Restricted Person will
maintain, preserve, protect, and keep all property used or useful in the conduct
of its business in good condition, and will from time to time make all repairs,
renewals and replacements needed to enable the business and operations carried
on in connection therewith to be promptly and advantageously conducted at all
times.
Section 6.6. Maintenance of Existence and Qualifications. Each
Restricted Person will maintain and preserve its existence and its rights and
franchises in full force and effect and will qualify to do business in all
states or jurisdictions where required by applicable Law, except where the
failure so to qualify will not have a Material Adverse Effect.
Section 6.7. Payment of Trade Liabilities, Taxes, etc. Each Restricted
Person will (a) timely file all required tax returns; (b) timely pay all taxes,
assessments, and other governmental charges or levies imposed upon it or upon
its income, profits or property; and (c) maintain appropriate accruals and
reserves for all of the foregoing in accordance with US
31
37
GAAP. Each Restricted Person may, however, delay paying or discharging any of
the foregoing so long as it is in good faith contesting the validity thereof by
appropriate proceedings and has set aside on its books adequate reserves
therefor.
Section 6.8. Insurance. Each Restricted Person will keep or cause to be
kept insured in accordance with industry standards by financially sound and
reputable insurers, its surface equipment and other property of a character
usually insured by similar Persons engaged in the same or similar businesses.
Section 6.9. Performance on US Borrower's Behalf. If any Restricted
Person fails to pay any taxes, insurance premiums, expenses, attorneys' fees or
other amounts it is required to pay under any US Loan Document, US Agent may pay
the same, and shall use its best efforts to give at least five (5) Business Days
notice to US Borrower prior to making any such payment; provided, however, that
any failure by US Agent to so notify US Borrower shall not limit or otherwise
impair US Agent's ability to make any such payment. US Borrower shall
immediately reimburse US Agent for any such payments and each amount paid by US
Agent shall constitute an US Obligation owed hereunder which is due and payable
on the date such amount is paid by US Agent.
Section 6.10. Interest. US Borrower hereby promises to each Lender
Party to pay interest at the Default Rate applicable to Base Rate Loans on all
US Obligations (including US Obligations to pay fees or to reimburse or
indemnify any Lender) which US Borrower has in this Agreement promised to pay to
such Lender Party and which are not paid when due. Such interest shall accrue
from the date such US Obligations become due until they are paid.
Section 6.11. Compliance with Law. Each Restricted Person will conduct
its business and affairs in compliance with all Laws applicable thereto except
to the extent failure to do so would not reasonably be expected to have a
Material Adverse Effect.
Section 6.12. Environmental Matters.
(a) Each Restricted Person will comply in all material respects with
all Environmental Laws now or hereafter applicable to such Restricted Person, as
well as all contractual obligations and agreements with respect to environmental
remediation or other environmental matters, and shall obtain, at or prior to the
time required by applicable Environmental Laws, all environmental, health and
safety permits, licenses and other authorizations necessary for its operations
and will maintain such authorizations in full force and effect, unless such
failure to so comply would not reasonably be expected to have a Material Adverse
Effect.
(b) will promptly furnish to US Agent all written notices of violation,
orders, claims, citations, complaints, penalty assessments, suits or other
proceedings received by US Borrower, or of which it has notice, pending or
threatened against US Borrower, by any Governmental Authority with respect to
any alleged violation of or non-compliance with any Environmental Laws or any
permits, licenses or authorizations in connection with its ownership or use of
its
32
38
properties or the operation of its business which involve a potential liability
or claim in excess of US $25,000,000.
Section 6.13. Bank Accounts; Offset. To secure the repayment of the
Obligations US Borrower hereby grants to each Lender a right of offset, each of
which shall be in addition to all other interests, liens, and rights of any
Lender at common Law, under the Loan Documents, or otherwise, and each of which
shall be upon and against (a) any and all moneys, securities or other property
(and the proceeds therefrom) of US Borrower now or hereafter held or received by
or in transit to any Lender from or for the account of US Borrower, whether for
safekeeping, custody, pledge, transmission, collection or otherwise, (b) any and
all deposits (general or special, time or demand, provisional or final) of US
Borrower with any Lender, and (c) any other credits and claims of US Borrower at
any time existing against any Lender, including claims under certificates of
deposit. At any time and from time to time after the occurrence of any Default,
each Lender is hereby authorized to offset against the Obligations then due and
payable (in either case without notice to US Borrower), any and all items
hereinabove referred to. To the extent that US Borrower has accounts designated
as royalty or joint interest owner accounts, the foregoing right of offset shall
not extend to funds in such accounts which belong to, or otherwise arise from
payments to US Borrower for the account of, third party royalty or joint
interest owners.
Section 6.14. Year 2000 Compliance. US Borrower will promptly notify US
Agent in the event US Borrower discovers or determines that any computer
application (including those of its suppliers and vendors) that is material to
its or any of its Subsidiaries' business and operations that will not be Year
2000 compliant on a timely basis, except to the extent that such failure would
not reasonably be expected to have a Material Adverse Effect.
ARTICLE VII - Negative Covenants of US Borrower
To conform with the terms and conditions under which each Lender is
willing to have credit outstanding to US Borrower, and to induce each Lender to
enter into this Agreement and make the US Loans, US Borrower warrants, covenants
and agrees that until the full and final payment of the Obligations and the
termination of this Agreement, unless Required Lenders have previously agreed
otherwise:
Section 7.1. Indebtedness. No Restricted Person (other than US
Borrower) will in any manner owe or be liable for Indebtedness except:
(a) the US Obligations and the Canadian Obligations.
(b) capital lease obligations (excluding oil, gas or mineral leases)
entered into in the ordinary course of such Restricted Person's business in
arm's length transactions at competitive market rates under competitive terms
and conditions in all respects, provided that the obligations required to be
paid in any Fiscal Year under any such capital leases do not in the aggregate
exceed US $25,000,000 for all Restricted Persons.
33
39
(c) unsecured Liabilities owed among Restricted Persons.
(d) guaranties by one Restricted Person of Liabilities owed by another
Restricted Person, if such Liabilities either (i) are not Indebtedness, or (ii)
are allowed under subsections (a), (b) or (c) of this Section 7.1.
(e) Indebtedness of the Restricted Persons for plugging and abandonment
bonds or for letters of credit issued by any Lender in place thereof which are
required by regulatory authorities in the area of operations, and Indebtedness
of the Restricted Persons for other bonds or letters of credit issued by any
Lender which are required by such regulatory authorities with respect to other
normal oil and gas operations.
(f) obligations under the Subordinated US Borrower Indenture, the
Subordinated US Borrower Debentures and the Subordinated US Borrower Guarantee;
(g) non-recourse Indebtedness as to which no Restricted Person (i)
provides any guaranty or credit support of any kind (including any undertaking,
guarantee, indemnity, agreement or instrument that would constitute
Indebtedness) or (ii) is directly or indirectly liable (as a guarantor or
otherwise); provided, that after giving effect to such Indebtedness outstanding
from time to time, US Borrower is not in violation of Sections 7.8 and 7.9.
(h) the following long-term institutional Indebtedness of Northstar
Energy:
(i) US $150,000,000 indebtedness to The Prudential Insurance
Company of America pursuant to a Note Agreement dated as of March 2,
1998 including the following guarantees of such indebtedness: (1)
guarantees both dated March 2, 1998 made by Northstar Energy
Partnership and ▇▇▇▇▇ Limited Partnership; (2) guarantee dated as of
July 31, 1998 made by 728098 Alberta Ltd.; and (3) any other guarantees
of Subsidiaries of Northstar Energy executed after the date hereof
pursuant to the terms of such Note Agreement.
(ii) US $75,000,000 indebtedness to certain institutional
investors pursuant to a Note Agreement dated as of July 19, 1995, as
amended from time to time, including the following guarantees of such
indebtedness: (1) guarantee dated as of July 31, 1998 made by Northstar
Energy Partnership; (2) guarantee dated as of July 31, 1998 made by
728098 Alberta Ltd.; and (3) any other guarantee of Subsidiaries of
Northstar Energy executed after the date hereof pursuant to the terms
of such Note Agreement.
including any refinancing of the above institutional indebtedness on
similar terms taking into account current market conditions.
(i) Indebtedness that is subordinated to the US Obligations and the
Canadian Obligations on terms acceptable to Required Lenders.
34
40
(j) Indebtedness in the amount of C $36,323,766 owing to The
Toronto-Dominion Bank due January 1, 1999 relating to the West Windsor
Cogeneration Plant sale.
(k) Indebtedness in the approximate amount of C $6,000,000 owed to
Indeck Gas Supply Corporation by Northstar Energy pursuant to a Gas Sales and
Purchase Agreement dated as of March 9, 1989, as heretofore or hereafter amended
from time to time.
(l) Acquired Debt.
(m) Indebtedness under Hedging Contracts permitted under Section 7.11.
(n) Indebtedness in the amount of US $15,000,000 to Bank of America
Canada payable on demand by Northstar Energy and guaranteed by Canadian
Guarantor.
(o) miscellaneous items of Indebtedness of all Restricted Persons
(other than US Borrower) not described in subsections (a) through (n) which do
not in the aggregate exceed US $50,000,000 (with Canadian Borrowers and their
Subsidiaries which are Restricted Persons having no more than US $20,000,000) in
principal amount at any one time outstanding.
Section 7.2. Limitation on Liens. Except for Permitted Liens, no
Restricted Person will create, assume or permit to exist any Lien upon any of
the properties or assets which it now owns or hereafter acquires. No Restricted
Person will allow the filing or continued existence of any financing statement
describing as collateral any assets or property of such Restricted Person, other
than financing statements which describe only collateral subject to a Lien
permitted under this section and which name as secured party or lessor only the
holder of such Lien.
Section 7.3. Limitation on Mergers. No Restricted Person will merge or
consolidate with or into any other Person except that any Subsidiary of US
Borrower may be merged into or consolidated with (a) another Subsidiary of US
Borrower, or (b) US Borrower, so long as US Borrower is the surviving business
entity.
Section 7.4. Limitation on Issuance of Securities by Subsidiaries of
US Borrower.
(a) No Restricted Subsidiary of US Borrower (other than Devon Trust)
will issue any additional shares of its capital stock, additional partnership
interests or other securities or any options, warrants or other rights to
acquire such additional shares, partnership interests or other securities except
to another Restricted Person of which such issuer is already directly or
indirectly a Subsidiary of US Borrower unless such securities are being issued
to acquire a business, directly or indirectly through the use of the proceeds of
such issuance, and such securities are convertible into the common or similar
securities of US Borrower, including the issuance of the exchangeable shares of
Northstar Energy issued pursuant to the Acquisition Documents. Northstar Energy
may also issue stock options to its employees from time to time in the form of
exchangeable shares of Northstar Energy, provided that such shares are
convertible into common shares or similar securities of US Borrower and provided
further that such options are granted under a stock option plan of Northstar
Energy and/or US Borrower.
35
41
(b) Devon Trust will not issue any securities except common securities
to US Borrower and the Devon Trust Securities. Devon Nevada will at all times
remain a wholly-owned direct or indirect Subsidiary of US Borrower, US Borrower
will at all times own all of the outstanding common securities of Devon Trust.
Section 7.5. Limitation on Restricted Payments. Except as permitted
below in this section, no Restricted Person shall directly or indirectly (i)
make any Restricted Distribution, or (ii) any Restricted Investment (the above
being herein collectively referred to as "Restricted Payments"), unless the
aggregate amount of Restricted Payments made during any Fiscal Year never
exceeds ten percent (10%) of the book value of the Consolidated Assets of US
Borrower.
Section 7.6. Transactions with Affiliates. No Restricted Person will
engage in any material transaction with any of its Affiliates on terms which are
less favorable in any material respect to it than those which would have been
obtainable at the time in arm's-length dealing with Persons other than such
Affiliates, provided that such restriction shall not apply to transactions among
US Borrower and the other Restricted Persons that are wholly-owned, directly or
indirectly, by US Borrower.
Section 7.7. Prohibited Contracts; ERISA. Except as expressly provided
for in the US Loan Documents and in the Support Agreement dated December 10,
1998 between the US Borrower and Northstar Energy, no Restricted Person will,
directly or indirectly, enter into, create, or otherwise allow to exist any
contract or other consensual restriction on the ability of any Restricted Person
that is a Subsidiary of US Borrower: (a) to pay dividends or make other
distributions to US Borrower, (b) to redeem equity interests held in it by US
Borrower, (c) to repay loans and other indebtedness owing by it to US Borrower,
or (d) to transfer any of its assets to US Borrower. No ERISA Affiliate will
incur any obligation to contribute to any "multiemployer plan" as defined in
Section 4001 of ERISA.
Section 7.8. Funded Debt to Total Capitalization. At the end of each
Fiscal Quarter, the ratio of US Borrower's Consolidated Total Funded Debt to US
Borrower's Total Capitalization will never exceed sixty percent (60%).
Section 7.9. Funded Debt to EBITDA. At the end of each Fiscal Quarter,
the ratio of US Borrower's Consolidated Total Funded Debt to EBITDA, calculated
for the four consecutive Fiscal Quarters then ended, will never exceed 3.75 to
1.
Section 7.10. Devon Trust; Devon Trust Securities. Devon Trust shall
exist for the exclusive purposes of (a) issuing the Devon Trust Securities, (b)
investing the gross proceeds of the Devon Trust Securities in the Subordinated
US Borrower Debentures and (c) engaging in only those other activities necessary
or incidental thereto. US Borrower shall exercise its option to defer interest
payments on the Subordinated US Borrower Debentures rather than default on such
interest payments. Devon Trust shall not be dissolved without prior written
notice by US Borrower to Required Lenders. Devon Trust shall not redeem the
Devon Trust Securities prior to their stated maturity, and US Borrower shall not
prepay or redeem the Subordinated US Borrower Debentures prior to their stated
maturity, unless both immediately before and
36
42
immediately after any such proposed prepayment or redemption, US Borrower is in
compliance with Sections 7.8 and 7.9 and no Default under Section 8.1(a), 8.1(f)
or 8.1(h) is continuing.
Section 7.11. Hedging Contracts. No Restricted Person will be a party
to or in any manner be liable on any Hedging Contract, unless such contracts
qualify under US GAAP as a hedge of oil and gas production, floating rate
Indebtedness or foreign currency needs (and not as a speculative investment),
such contracts are entered into in the ordinary course of the Restricted
Persons' businesses, and
(i) if such contracts are entered into with the purpose and
effect of fixing prices on oil or gas expected to be produced by
Restricted Persons:
(A) such contracts for any single month (determined,
in the case of contracts that are not settled on a monthly
basis, by a monthly proration acceptable to US Agent) do not,
in the aggregate, cover amounts greater than seventy-five
percent (75%) of the Restricted Persons' aggregate Projected
Oil and Gas Production anticipated to be sold in the ordinary
course of the Restricted Persons' businesses for such month;
(B) such contracts do not require any Restricted
Person to provide any Lien to secure US Borrower's obligations
thereunder, other than Liens on cash or cash equivalents in an
aggregate amount not more than US $50,000,000; and
(C) each such contract is with a counterparty or has
a guarantor of the obligation of the counterparty who (unless
such counterparty is US Agent, any Lender or any of their
Affiliates) at the time the contract is made has long-term
obligations rated AA or better by S&P, Aa2 or better by
▇▇▇▇▇'▇, A+ or better by CBRS, or AA or better by DBRS or is
an investment grade-rated industry participant.
As used in this subsection (i), the term "Projected Oil and Gas
Production" means the projected production of oil or gas (measured by
volume unit or BTU equivalent, not sales price) for the term of the
contracts or a particular month, as applicable, from properties and
interests owned by any Restricted Person which have attributable to
them proved oil or gas reserves.
(ii) if such contracts are entered into with the purpose and
effect of fixing interest rates on a principal amount of indebtedness
of such Restricted Person that is accruing interest at a variable rate,
the aggregate notional amount of such contracts never exceeds the
anticipated outstanding principal balance of the indebtedness to be
hedged by such contracts or an average of such principal balances
calculated using a generally accepted method of matching interest swap
contracts to declining principal balances, and the floating rate index
of each such contract generally matches the index used to determine the
floating rates of interest on the corresponding indebtedness to be
hedged by such contract.
37
43
ARTICLE VIII - Events of Default and Remedies
Section 8.1. Events of Default. Each of the following events
constitutes an Event of Default under this Agreement:
(a) Any Restricted Person fails to pay any principal component of any
US Obligation when due and payable or fails to pay any other US Obligation
within three (3) days after the date when due and payable, whether at a date for
the payment of a fixed installment or as a contingent or other payment becomes
due and payable or as a result of acceleration or otherwise;
(b) Any "default" or "event of default" occurs under any US Loan
Document which defines either such term, and the same is not remedied within the
applicable period of grace (if any) provided in such Loan Document;
(c) Any Restricted Person fails (other than as referred to in
subsections (a) or (b) above) to duly observe, perform or comply with any
covenant, agreement, condition or provision of any US Loan Document, and such
failure remains unremedied for a period of thirty (30) days after notice of such
failure is given by US Agent to US Borrower;
(d) Any representation or warranty previously, presently or hereafter
made in writing by or on behalf of any Restricted Person in connection with any
US Loan Document shall prove to have been false or incorrect in any material
respect on any date on or as of which made provided that if such falsity or lack
of correctness is capable of being remedied or cured within a 30-day period, US
Borrower shall (subject to the other provisions of this Section 8.1) have a
period of 30 days after written notice thereof has been given to US Borrower by
US Agent within which to remedy or cure such lack of correctness, or this
Agreement or any US Note is asserted to be or at any time ceases to be valid,
binding and enforceable in any material respect as warranted in Section 5.5 for
any reason other than its release or subordination by US Agent;
(e) Any Restricted Person (i) fails to duly pay any Indebtedness in
excess of US $25,000,000 constituting principal or interest owed by it with
respect to borrowed money or money otherwise owed under any note, bond, or
similar instrument, including without limitation the Subordinated US Borrower
Debentures, the Subordinated US Borrower Indenture, the Subordinated US Borrower
Guarantee and the Devon Trust Securities, or (ii) breaches or defaults in the
performance of any agreement or instrument by which any such Indebtedness is
issued, evidenced, governed, or secured, other than a breach or default
described in clause (i) above, and any such failure, breach or default results
in the acceleration of such Indebtedness;
(f) Either (i) any "accumulated funding deficiency" (as defined in
Section 412(a) of the Internal Revenue Code of 1986, as amended) in excess of US
$25,000,000 exists with respect to any ERISA Plan, whether or not waived by the
Secretary of the Treasury or his delegate, or (ii) any Termination Event occurs
with respect to any ERISA Plan and the then current value of such ERISA Plan's
benefit liabilities exceeds the then current value of such ERISA Plan's assets
available for the payment of such benefit liabilities by more than US
$25,000,000 (or in the case
38
44
of a Termination Event involving the withdrawal of a substantial employer, the
withdrawing employer's proportionate share of such excess exceeds such amount);
(g) Any Change in Control occurs;
(h) US Borrower or any other Restricted Person having assets with a
book value of at least US $25,000,000:
(i) suffers the entry against it of a judgment, decree or
order for relief by a Tribunal of competent jurisdiction in an
involuntary proceeding commenced under any applicable bankruptcy,
insolvency or other similar Law of any jurisdiction now or hereafter in
effect, including the federal Bankruptcy Code, as from time to time
amended, or has any such proceeding commenced against it which remains
undismissed for a period of thirty days; or
(ii) commences a voluntary case under any applicable
bankruptcy, insolvency or similar Law now or hereafter in effect,
including the federal Bankruptcy Code, as from time to time amended; or
applies for or consents to the entry of an order for relief in an
involuntary case under any such Law; or makes a general assignment for
the benefit of creditors; or fails generally to pay (or admits in
writing its inability to pay) its debts as such debts become due; or
takes corporate or other action to authorize any of the foregoing; or
(iii) suffers the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of all or a substantial part of its property in a
proceeding brought against or initiated by it, and such appointment or
taking possession is neither made ineffective nor discharged within
thirty days after the making thereof, or such appointment or taking
possession is at any time consented to, requested by, or acquiesced to
by it; or
(iv) suffers the entry against it of a final judgment for the
payment of money in an amount that exceeds (x) the valid and
collectible insurance in respect thereof or (y) the amount of an
indemnity with respect thereto reasonably acceptable to the Required
Lenders by US $25,000,000 or more, unless the same is discharged within
thirty days after the date of entry thereof or an appeal or appropriate
proceeding for review thereof is taken within such period and a stay of
execution pending such appeal is obtained; or
(v) suffers a writ or warrant of attachment or similar process
to be issued by any Tribunal against all or any part of its property
having a book value of at least US $25,000,000, and such writ or
warrant of attachment or any similar process is not stayed or released
within thirty days after the entry or levy thereof or after any stay is
vacated or set aside; and
(i) Any "Event of Default" occurs under the Canadian Agreement.
39
45
Upon the occurrence of an Event of Default described in subsection (h)(i),
(h)(ii) or (h)(iii) of this section with respect to US Borrower, all of the US
Obligations shall thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by US Borrower and each Restricted Person who at any
time ratifies or approves this Agreement. Upon any such acceleration, any
obligation of any Lender and any obligation of US LC Issuer to issue Letters of
Credit hereunder to make any further US Loans shall be permanently terminated.
During the continuance of any other Event of Default, US Agent at any time and
from time to time may (and upon written instructions from Required Lenders, US
Agent shall), without notice to US Borrower or any other Restricted Person, do
either or both of the following: (1) terminate any obligation of Lenders to make
US Loans hereunder, and any obligation of US LC Issuer to issue Letters of
Credit hereunder, and (2) declare any or all of the US Obligations immediately
due and payable, and all such US Obligations shall thereupon be immediately due
and payable, without demand, presentment, notice of demand or of dishonor and
nonpayment, protest, notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or declaration of any
kind, all of which are hereby expressly waived by US Borrower and each
Restricted Person who at any time ratifies or approves this Agreement.
Section 8.2. Remedies. If any Default shall occur and be continuing,
each Lender Party may protect and enforce its rights under the US Loan Documents
by any appropriate proceedings, including proceedings for specific performance
of any covenant or agreement contained in any Loan Document, and each Lender
Party may enforce the payment of any US Obligations due it or enforce any other
legal or equitable right which it may have. All rights, remedies and powers
conferred upon Lender Parties under the US Loan Documents shall be deemed
cumulative and not exclusive of any other rights, remedies or powers available
under the US Loan Documents or at Law or in equity.
ARTICLE IX - US Agent
Section 9.1. Appointment, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes US Agent to act as its agent under this
Agreement and the other US Loan Documents with such powers and discretion as are
specifically delegated to US Agent by the terms of this Agreement and the other
US Loan Documents, together with such other powers as are reasonably incidental
thereto. US Agent (which term as used in this sentence and in Section 9.5 and
the first sentence of Section 9.6 hereof shall include its Affiliates and its
own and its Affiliates' officers, directors, employees, and agents): (a) shall
not have any duties or responsibilities except those expressly set forth in this
Agreement and shall not be a trustee or fiduciary for any Lender; (b) shall not
be responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Loan
Document or any certificate or other document referred to or provided for in, or
received by any of them under, any Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Loan Document,
or any other document referred to or
40
46
provided for therein or for any failure by any Restricted Person or any other
Person to perform any of its obligations thereunder; (c) shall not be
responsible for or have any duty to ascertain, inquire into, or verify the
performance or observance of any covenants or agreements by any Restricted
Person or the satisfaction of any condition or to inspect the property
(including the books and records) of any Restricted Person or any of its
Subsidiaries or Affiliates; (d) shall not be required to initiate or conduct any
litigation or collection proceedings under any Loan Document; and (e) shall not
be responsible for any action taken or omitted to be taken by it under or in
connection with any Loan Document, except for its own gross negligence or
willful misconduct. US Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
Section 9.2. Reliance by US Agent. US Agent shall be entitled to rely
upon any certification, notice, instrument, writing, or other communication
(including, without limitation, any thereof by telephone or telecopy) believed
by it to be genuine and correct and to have been signed, sent or made by or on
behalf of the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any Restricted Person), independent accountants,
and other experts selected by US Agent. US Agent may deem and treat the payee of
any Note as the holder thereof for all purposes hereof unless and until US Agent
receives and accepts an Assignment and Acceptance executed in accordance with
Section 10.6 hereof. As to any matters not expressly provided for by this
Agreement, US 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 Lenders, and such instructions shall be binding on all of the
Lenders; provided, however, that US Agent shall not be required to take any
action that exposes US Agent to personal liability or that is contrary to any
Loan Document or applicable Law or unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking any such action.
Section 9.3. Defaults. US Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default or Event of Default unless US Agent has
received written notice from a Lender or US Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that US Agent receives such a notice of the occurrence of a Default or
Event of Default, US Agent shall give prompt notice thereof to the Lenders. US
Agent shall (subject to Section 9.1 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the Required
Lenders. Notwithstanding the foregoing, unless and until US Agent shall have
received such directions, US Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the Lenders.
Section 9.4. Rights as Lender. With respect to its Percentage Share of
the US Maximum Credit Amount and the US Loans made by it, US Agent (and any
successor acting as US Agent) in its capacity as a Lender hereunder shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not acting as US Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include US Agent in its
41
47
individual capacity. US Agent (and any successor acting as US Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make Investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any
Restricted Person or any of its Subsidiaries or Affiliates as if it were not
acting as US Agent, and US Agent (and any successor acting as US Agent) and its
Affiliates may accept fees and other consideration from any Restricted Person or
any of its Subsidiaries or Affiliates for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
SECTION 9.5. INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY US AGENT
(TO THE EXTENT NOT REIMBURSED UNDER SECTION 10.4 HEREOF, BUT WITHOUT LIMITING
THE OBLIGATIONS OF US BORROWER UNDER SUCH SECTION) RATABLY IN ACCORDANCE WITH
THEIR RESPECTIVE PERCENTAGE SHARES, FOR ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES
(INCLUDING ATTORNEYS' FEES), OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER
THAT MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST US AGENT (INCLUDING BY
ANY LENDER) IN ANY WAY RELATING TO OR ARISING OUT OF ANY LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED THEREBY OR ANY ACTION TAKEN OR OMITTED BY US AGENT
UNDER ANY LOAN DOCUMENT (INCLUDING ANY OF THE FOREGOING ARISING FROM THE
NEGLIGENCE OF US AGENT); provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the foregoing,
each Lender agrees to reimburse US Agent promptly upon demand for its ratable
share of any costs or expenses payable by US Borrower under Section 10.4, to the
extent that US Agent is not promptly reimbursed for such costs and expenses by
US Borrower. The agreements contained in this section shall survive payment in
full of the US Loans and all other amounts payable under this Agreement.
Section 9.6. Non-Reliance on US Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on US Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the US Borrower and its
Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon US Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under the US Loan Documents. Except for notices, reports, and other documents
and information expressly required to be furnished to the Lenders by US Agent
hereunder, US Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition, or business of any Restricted Person or any of its Subsidiaries or
Affiliates that may come into the possession of US Agent or any of its
Affiliates.
Section 9.7. Rights as Lender. In its capacity as a Lender, US Agent
shall have the same rights and obligations as any Lender and may exercise such
rights as though it were not US Agent. US Agent may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with any Restricted Person or their Affiliates, all as if it were
not US Agent hereunder and without any duty to account therefor to any other
Lender.
42
48
Section 9.8. Sharing of Set-Offs and Other Payments. Each Lender Party
agrees that if it shall, whether through the exercise of rights under US Loan
Documents or rights of banker's lien, set off, or counterclaim against US
Borrower or otherwise, obtain payment of a portion of the aggregate Obligations
owed to it which, taking into account all distributions made by US Agent under
Section 3.1, causes such Lender Party to have received more than it would have
received had such payment been received by US Agent and distributed pursuant to
Section 3.1, then (a) it shall be deemed to have simultaneously purchased and
shall be obligated to purchase interests in the Obligations as necessary to
cause all Lender Parties to share all payments as provided for in Section 3.1,
and (b) such other adjustments shall be made from time to time as shall be
equitable to ensure that US Agent and all Lender Parties share all payments of
Obligations as provided in Section 3.1; provided, however, that nothing herein
contained shall in any way affect the right of any Lender Party to obtain
payment (whether by exercise of rights of banker's lien, set-off or counterclaim
or otherwise) of indebtedness other than the Obligations. US Borrower expressly
consents to the foregoing arrangements and agrees that any holder of any such
interest or other participation in the Obligations, whether or not acquired
pursuant to the foregoing arrangements, may to the fullest extent permitted by
Law exercise any and all rights of banker's lien, set-off, or counterclaim as
fully as if such holder were a holder of the Obligations in the amount of such
interest or other participation. If all or any part of any funds transferred
pursuant to this section is thereafter recovered from the seller under this
section which received the same, the purchase provided for in this section shall
be deemed to have been rescinded to the extent of such recovery, together with
interest, if any, if interest is required pursuant to the order of a Tribunal
order to be paid on account of the possession of such funds prior to such
recovery.
Section 9.9. Investments. Whenever US Agent in good faith determines
that it is uncertain about how to distribute to Lender Parties any funds which
it has received, or whenever US Agent in good faith determines that there is any
dispute among Lender Parties about how such funds should be distributed, US
Agent may choose to defer distribution of the funds which are the subject of
such uncertainty or dispute. If US Agent in good faith believes that the
uncertainty or dispute will not be promptly resolved, or if US Agent is
otherwise required to invest funds pending distribution to Lender Parties, US
Agent shall invest such funds pending distribution; all interest on any such
Investment shall be distributed upon the distribution of such Investment and in
the same proportion and to the same Persons as such Investment. All moneys
received by US Agent for distribution to Lender Parties (other than to the
Person who is US Agent in its separate capacity as a Lender Party) shall be held
by US Agent pending such distribution solely as US Agent for such Lender
Parties, and US Agent shall have no equitable title to any portion thereof.
Section 9.10. Benefit of Article IX. The provisions of this Article
(other than the following Section 9.11) are intended solely for the benefit of
Lender Parties, and no Restricted Person shall be entitled to rely on any such
provision or assert any such provision in a claim or defense against any Lender.
Lender Parties may waive or amend such provisions as they desire without any
notice to or consent of US Borrower or any Restricted Person.
Section 9.11. Resignation. US Agent may resign at any time by giving
written notice thereof to Lenders and US Borrower. Each such notice shall set
forth the date of such
43
49
resignation. Upon any such resignation, Required Lenders shall have the right to
appoint a successor US Agent. A successor must be appointed for any retiring US
Agent, and such US Agent's resignation shall become effective when such
successor accepts such appointment. If, within thirty days after the date of the
retiring US Agent's resignation, no successor US Agent has been appointed and
has accepted such appointment, then the retiring US Agent may appoint a
successor US Agent, which shall be a commercial bank organized or licensed to
conduct a banking or trust business under the Laws of the United States of
America or of any state thereof and if no Default or Event of Default has
occurred and is continuing, retiring US Agent shall obtain the consent of US
Borrower. Upon the acceptance of any appointment as US Agent hereunder by a
successor US Agent, the retiring US Agent shall be discharged from its duties
and obligations under this Agreement and the other US Loan Documents. After any
retiring US Agent's resignation hereunder the provisions of this Article IX
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it while it was US Agent under the US Loan Documents.
Section 9.12. Lenders to Remain Pro Rata. It is the intent of all
parties hereto that, except for Competitive Bid Loans and matters related
thereto, the pro rata share of each Lender in the US Obligations and in the
Canadian Obligations shall be substantially the same at all times during the
term of this Agreement. Accordingly, the initial Percentage Share of each Lender
in the US Maximum Credit Amount will be the same as the initial Percentage Share
of such Lender in the Canadian Maximum Credit Amount. All subsequent assignments
and adjustments of the interests of the Lenders in the US Obligations and the
Canadian Obligations will be made so as to maintain such a pro rata arrangement;
provided that for the purposes of determining these pro rata shares, any
Percentage Share held by any Lender's Affiliates shall be included in
determining the interests of such Lender.
ARTICLE X - Miscellaneous
Section 10.1. Waivers and Amendments; Acknowledgments.
(a) Waivers and Amendments. No failure or delay (whether by course of
conduct or otherwise) by any Lender Party in exercising any right, power or
remedy which such Lender Party may have under any of the US Loan Documents shall
operate as a waiver thereof or of any other right, power or remedy, nor shall
any single or partial exercise by any Lender Party of any such right, power or
remedy preclude any other or further exercise thereof or of any other right,
power or remedy. No waiver of any provision of any US Loan Document and no
consent to any departure therefrom shall ever be effective unless it is in
writing and signed as provided below in this section, and then such waiver or
consent shall be effective only in the specific instances and for the purposes
for which given and to the extent specified in such writing. No notice to or
demand on any Restricted Person shall in any case of itself entitle any
Restricted Person to any other or further notice or demand in similar or other
circumstances. This Agreement and the other US Loan Documents set forth the
entire understanding between the parties hereto with respect to the transactions
contemplated herein and therein and supersede all prior discussions and
understandings with respect to the subject matter hereof and thereof, and no
waiver, consent,
44
50
release, modification or amendment of or supplement to this Agreement or the
other US Loan Documents shall be valid or effective against any party hereto
unless the same is in writing and signed by (i) if such party is US Borrower, by
US Borrower, (ii) if such party is US Agent or US LC Issuer, by such party, and
(iii) if such party is a Lender, by such Lender or by US Agent on behalf of
Lenders with the written consent of Required Lenders (which consent has already
been given as to the termination of the US Loan Documents as provided in Section
10.10). Notwithstanding the foregoing or anything to the contrary herein, US
Agent shall not, without the prior consent of Majority Lenders, execute and
deliver on behalf of such Lender any waiver or amendment which would increase
the US Maximum Credit Amount hereunder. Notwithstanding the foregoing or
anything to the contrary herein, US Agent shall not, without the prior consent
of each individual Lender, execute and deliver on behalf of such Lender any
waiver or amendment which would: (1) waive any of the conditions specified in
Article IV, (2) increase the maximum amount which such Lender is committed
hereunder to lend, (3) reduce any fees payable to such Lender hereunder, or the
principal of, or interest on, such Lender's Note, (4) postpone any date fixed
for any payment of any such fees, principal or interest, (5) amend the
definition herein of "Required Lenders", "Majority Lenders", or otherwise change
the aggregate amount of Percentage Shares which is required for US Agent,
Lenders or any of them to take any particular action under the US Loan
Documents, (6) release US Borrower from its obligation to pay such Lender's
Note, or (7) amend this Section 10.1(a).
(b) Acknowledgments and Admissions. US Borrower hereby represents,
warrants, acknowledges and admits that (i) it has been advised by counsel in the
negotiation, execution and delivery of the US Loan Documents to which it is a
party, (ii) it has made an independent decision to enter into this Agreement and
the other US Loan Documents to which it is a party, without reliance on any
representation, warranty, covenant or undertaking by US Agent or any Lender,
whether written, oral or implicit, other than as expressly set out in this
Agreement or in another Loan Document delivered on or after the date hereof,
(iii) there are no representations, warranties, covenants, undertakings or
agreements by any Lender as to the US Loan Documents except as expressly set out
in this Agreement or in another Loan Document delivered on or after the date
hereof, (iv) no Lender has any fiduciary obligation toward US Borrower with
respect to any Loan Document or the transactions contemplated thereby, (v) the
relationship pursuant to the US Loan Documents between US Borrower and the other
Restricted Persons, on one hand, and each Lender, on the other hand, is and
shall be solely that of debtor and creditor, respectively, (vi) no partnership
or joint venture exists with respect to the US Loan Documents between any
Restricted Person and any Lender, (vii) US Agent is not US Borrower's US Agent,
but US Agent for Lenders, (viii) without limiting any of the foregoing, US
Borrower is not relying upon any representation or covenant by any Lender, or
any representative thereof, and no such representation or covenant has been
made, that any Lender will, at the time of an Event of Default or Default, or at
any other time, waive, negotiate, discuss, or take or refrain from taking any
action permitted under the US Loan Documents with respect to any such Event of
Default or Default or any other provision of the US Loan Documents, and (ix) all
Lender Parties have relied upon the truthfulness of the acknowledgments in this
section in deciding to execute and deliver this Agreement and to become
obligated hereunder.
45
51
(c) Joint Acknowledgment. THIS WRITTEN AGREEMENT AND THE OTHER US LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 10.2. Survival of Agreements; Cumulative Nature. All of
Restricted Persons' various representations, warranties, covenants and
agreements in the US Loan Documents shall survive the execution and delivery of
this Agreement and the other US Loan Documents and the performance hereof and
thereof, including the making or granting of the US Loans and the delivery of
the US Notes and the other US Loan Documents, and shall further survive until
all of the US Obligations are paid in full to each Lender Party and all of
Lender Parties' obligations to US Borrower are terminated. All statements and
agreements contained in any certificate or other instrument delivered by any
Restricted Person to any Lender Party under any Loan Document shall be deemed
representations and warranties by US Borrower or agreements and covenants of US
Borrower under this Agreement. The representations, warranties, indemnities, and
covenants made by Restricted Persons in the US Loan Documents, and the rights,
powers, and privileges granted to Lender Parties in the US Loan Documents, are
cumulative, and, except for expressly specified waivers and consents, no Loan
Document shall be construed in the context of another to diminish, nullify, or
otherwise reduce the benefit to any Lender Party of any such representation,
warranty, indemnity, covenant, right, power or privilege. In particular and
without limitation, no exception set out in this Agreement to any
representation, warranty, indemnity, or covenant herein contained shall apply to
any similar representation, warranty, indemnity, or covenant contained in any
other Loan Document, and each such similar representation, warranty, indemnity,
or covenant shall be subject only to those exceptions which are expressly made
applicable to it by the terms of the various US Loan Documents.
Section 10.3. Notices. All notices, requests, consents, demands and
other communications required or permitted under any Loan Document shall be in
writing, unless otherwise specifically provided in such Loan Document (provided
that US Agent may give telephonic notices to the other Lender Parties), and
shall be deemed sufficiently given or furnished if delivered by personal
delivery, by facsimile or other electronic transmission, by delivery service
with proof of delivery, or by registered or certified United States mail,
postage prepaid, to US Borrower and Restricted Persons at the address of US
Borrower specified on the signature pages hereto and to each Lender Party at its
address specified on Annex II hereto (unless changed by similar notice in
writing given by the particular Person whose address is to be changed). Any such
notice or communication shall be deemed to have been given (a) in the case of
personal delivery or delivery service, as of the date of first attempted
delivery during normal business hours at the address provided herein, (b) in the
case of facsimile or other electronic transmission, upon receipt, or (c) in the
case of registered or certified United States mail, three
46
52
days after deposit in the mail; provided, however, that no Borrowing Notice
shall become effective until actually received by US Agent.
Section 10.4. Payment of Expenses; Indemnity.
(a) Payment of Expenses. Whether or not the transactions contemplated
by this Agreement are consummated, US Borrower will promptly (and in any event,
within 30 days after any invoice or other statement or notice) pay: (i) all
reasonable costs and expenses incurred by or on behalf of US Agent (including
without limitation, attorneys' fees) in connection with (1) the negotiation,
preparation, execution and delivery of the US Loan Documents, and any and all
consents, waivers or other documents or instruments relating thereto, (2) the
filing, recording, refiling and re-recording of any US Loan Documents and any
other documents or instruments or further assurances required to be filed or
recorded or refiled or re-recorded by the terms of any Loan Document, (3) the
borrowings hereunder and other action reasonably required in the course of
administration hereof, (4) monitoring or confirming (or preparation or
negotiation of any document related to) US Borrower's compliance with any
covenants or conditions contained in this Agreement or in any Loan Document, and
(ii) all reasonable costs and expenses incurred by or on behalf of any Lender
Party (including without limitation, attorneys' fees, consultants' fees and
accounting fees) in connection with the defense or enforcement of any of the US
Loan Documents (including this section) or the defense of any Lender Party's
exercise of its rights thereunder.
(B) INDEMNITY. US BORROWER AGREES TO INDEMNIFY EACH LENDER PARTY , UPON
DEMAND, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, CLAIMS, LOSSES,
DAMAGES, PENALTIES, FINES, ACTIONS, JUDGMENTS, SUITS, SETTLEMENTS, COSTS,
EXPENSES OR DISBURSEMENTS (INCLUDING REASONABLE FEES OF ATTORNEYS, ACCOUNTANTS,
EXPERTS AND ADVISORS) OF ANY KIND OR NATURE WHATSOEVER (IN THIS SECTION
COLLECTIVELY CALLED "LIABILITIES AND COSTS") WHICH TO ANY EXTENT (IN WHOLE OR IN
PART) MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST SUCH LENDER PARTY
GROWING OUT OF, RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED WITH THE US LOAN
DOCUMENTS AND THE TRANSACTIONS AND EVENTS (INCLUDING THE ENFORCEMENT OR DEFENSE
THEREOF) AT ANY TIME ASSOCIATED THEREWITH OR CONTEMPLATED THEREIN (WHETHER
ARISING IN CONTRACT OR IN TORT OR OTHERWISE AND INCLUDING ANY VIOLATION OR
NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAWS BY ANY LENDER PARTY OR ANY OTHER
PERSON OR ANY LIABILITIES OR DUTIES OF ANY LENDER PARTY OR ANY OTHER PERSON WITH
RESPECT TO HAZARDOUS MATERIALS FOUND IN OR RELEASED INTO THE ENVIRONMENT). THE
FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND COSTS
ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR
THEORY OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN PART BY ANY NEGLIGENT ACT
OR OMISSION OF ANY KIND BY ANY LENDER PARTY,
provided only that no Lender Party shall be entitled under this section to
receive indemnification for that portion, if any, of any liabilities and costs
which is proximately caused by its own individual gross negligence or willful
misconduct, as determined in a final judgment. If any
47
53
Person (including US Borrower or any of its Affiliates) ever alleges such gross
negligence or willful misconduct by any Lender Party, the indemnification
provided for in this section shall nonetheless be paid upon demand, subject to
later adjustment or reimbursement, until such time as a court of competent
jurisdiction enters a final judgment as to the extent and effect of the alleged
gross negligence or willful misconduct. As used in this section the term "Lender
Party" shall refer not only to each Person designated as such in Section 1.1 but
also to each director, officer, agent, attorney, employee, representative and
Affiliate of such Person.
Section 10.5. Parties in Interest. All grants, covenants and agreements
contained in the US Loan Documents shall bind and inure to the benefit of the
parties thereto and their respective successors and assigns; provided, however,
that no Restricted Person may assign or transfer any of its rights or delegate
any of its duties or obligations under any Loan Document without the prior
consent of Required Lenders. Neither US Borrower nor any Affiliates of US
Borrower shall directly or indirectly purchase or otherwise retire any
Obligations owed to any Lender nor will any Lender accept any offer to do so,
unless each Lender shall have received substantially the same offer with respect
to the same Percentage Share of the Obligations owed to it. If US Borrower or
any Affiliate of US Borrower at any time purchases some but less than all of the
Obligations owed to all Lender Parties, such purchaser shall not be entitled to
any rights of any Lender under the US Loan Documents unless and until US
Borrower or its Affiliates have purchased all of the Obligations.
Section 10.6. Assignments and Participations.
(a) Each Lender may assign to one or more Eligible Transferees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its US Loans, its Note, and its Percentage Share
of the US Maximum Credit Amount); provided, however, that
(i) each such assignment shall be to an Eligible Transferee;
(ii) together with each such assignment of its rights and
obligations under this Agreement, such Lender shall assign the same
Percentage Share of its rights and obligations under the Canadian
Agreement to the same Eligible Transferee or an Affiliate of such
Eligible Transferee.
(iii) except in the case of such an assignment to another
Lender or an assignment of all of a Lender's rights and obligations
under this Agreement, any partial assignment of such Lender's rights
and obligations under this Agreement and under the Canadian Agreement
shall be in a collective amount at least equal to US $20,000,000 or an
integral multiple of US $5,000,000 in excess thereof;
(iv) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
the US Loan Documents;
48
54
(v) the parties to such assignment shall execute and deliver
to US Agent for its acceptance an Assignment and Acceptance in the form
of Exhibit F hereto, together with any Note subject to such assignment
and a processing fee of US $3,500; and
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this section, the assignor, US Agent
and US Borrower shall make appropriate arrangements so that, if required, new US
Notes are issued to the assignor and the assignee. If the assignee is not
incorporated under the Laws of the United States of America or a state thereof,
it shall deliver to US Borrower and US Agent certification as to exemption from
deduction or withholding of Taxes in accordance with Section 3.10.
(b) US Agent shall maintain at its address referred to in Section 10.3
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 Lenders and their
Percentage Share of the US Maximum Credit Amount of, and principal amount of the
US Loans owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and US Borrower, US Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by US Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, US Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit F hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons that are
Eligible Transferees in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its US Maximum Credit Amount and
its US Loans); provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participant shall be entitled to the benefit of the yield protection
provisions contained in Article III and the right of offset contained in Section
6.14, and (iv) US Borrower shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of US Borrower relating to its US Loans and its Note and to approve
any amendment, modification, or waiver of any provision of this Agreement (other
than amendments, modifications, or waivers decreasing the amount of principal of
or the rate at which interest is payable on such US Loans or Note, extending any
scheduled principal payment date or date fixed for the payment of interest on
such US Loans or Note, or extending its US Maximum Credit Amount).
49
55
(e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its US Loans
and its Note to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve Bank. No
such assignment shall release the assigning Lender from its obligations
hereunder.
(f) Any Lender may furnish any information concerning US Borrower or
any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 10.7 hereof.
Section 10.7. Confidentiality. US Agent and each Lender (each, a
"Lending Party") agrees to keep confidential any information furnished or made
available to it by US Borrower pursuant to this Agreement that is marked
confidential; provided that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or any Affiliate of
any Lending Party, or any officer, director, employee, US Agent, or advisor of
any Lending Party or Affiliate of any Lending Party, (b) to any other Person if
reasonably incidental to the administration of the credit facility provided
herein, (c) as required by any Law, rule, or regulation, (d) upon the order of
any court or administrative agency, (e) upon the request or demand of any
regulatory agency or authority, (f) that is or becomes available to the public
or that is or becomes available to any Lending Party other than as a result of a
disclosure by any Lending Party prohibited by this Agreement, (g) in connection
with any litigation to which such Lending Party or any of its Affiliates may be
a party, (h) to the extent necessary in connection with the exercise of any
remedy under this Agreement or any other Loan Document, and (i) subject to
provisions substantially similar to those contained in this section, to any
actual or proposed participant or assignee.
Section 10.8. Governing Law; Submission to Process. EXCEPT TO THE
EXTENT THAT THE LAW OF ANOTHER JURISDICTION IS EXPRESSLY ELECTED IN A LOAN
DOCUMENT, THE US LOAN DOCUMENTS SHALL BE DEEMED CONTRACTS AND INSTRUMENTS MADE
UNDER THE LAWS OF THE STATE OF TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF
THE UNITED STATES OF AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
CHAPTER 346 OF THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT
LOAN ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) DOES NOT APPLY TO THIS AGREEMENT
OR TO THE US NOTES. US BORROWER HEREBY IRREVOCABLY SUBMITS ITSELF AND EACH OTHER
RESTRICTED PERSON TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS SITTING IN THE STATE OF TEXAS AND AGREES AND CONSENTS THAT SERVICE OF
PROCESS MAY BE MADE UPON IT OR ANY RESTRICTED PERSON IN ANY LEGAL PROCEEDING
RELATING TO THE US LOAN DOCUMENTS OR THE OBLIGATIONS BY ANY MEANS ALLOWED UNDER
TEXAS OR FEDERAL LAW.
Section 10.9. Limitation on Interest. Lender Parties, Restricted
Persons and any other parties to the US Loan Documents intend to contract in
strict compliance with applicable usury Law from time to time in effect. In
furtherance thereof such Persons stipulate and agree that none of the terms and
provisions contained in the US Loan Documents shall ever be construed to create
a contract to pay, for the use, forbearance or detention of money, interest in
excess of the
50
56
maximum amount of interest permitted to be charged by applicable Law from time
to time in effect. Neither any Restricted Person nor any present or future
guarantors, endorsers, or other Persons hereafter becoming liable for payment of
any Obligation shall ever be liable for unearned interest thereon or shall ever
be required to pay interest thereon in excess of the maximum amount that may be
lawfully charged under applicable Law from time to time in effect, and the
provisions of this section shall control over all other provisions of the US
Loan Documents which may be in conflict or apparent conflict herewith. Lender
Parties expressly disavow any intention to charge or collect excessive unearned
interest or finance charges in the event the maturity of any Obligation is
accelerated. If (a) the maturity of any Obligation is accelerated for any
reason, (b) any Obligation is prepaid and as a result any amounts held to
constitute interest are determined to be in excess of the legal maximum, or (c)
any Lender or any other holder of any or all of the Obligations shall otherwise
collect moneys which are determined to constitute interest which would otherwise
increase the interest on any or all of the Obligations to an amount in excess of
that permitted to be charged by applicable Law then in effect, then all sums
determined to constitute interest in excess of such legal limit shall, without
penalty, be promptly applied to reduce the then outstanding principal of the
related Obligations or, at such Lender's or holder's option, promptly returned
to US Borrower or the other payor thereof upon such determination. In
determining whether or not the interest paid or payable, under any specific
circumstance, exceeds the maximum amount permitted under applicable Law, Lender
Parties and Restricted Persons (and any other payors thereof) shall to the
greatest extent permitted under applicable Law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as interest,
(ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize,
prorate, allocate, and spread the total amount of interest throughout the entire
contemplated term of the instruments evidencing the Obligations in accordance
with the amounts outstanding from time to time thereunder and the maximum legal
rate of interest from time to time in effect under applicable Law in order to
lawfully charge the maximum amount of interest permitted under applicable Law.
In the event applicable Law provides for an interest ceiling under Chapter 303
of the Texas Finance Code (the "Texas Finance Code") as amended, for that day,
the ceiling shall be the "weekly ceiling" as defined in the Texas Finance Code;
provided that if any applicable Law permits greater interest, the Law permitting
the greatest interest shall apply. As used in this section the term "applicable
Law" means the Laws of the State of Texas or the Laws of the United States of
America, whichever Laws allow the greater interest, as such Laws now exist or
may be changed or amended or come into effect in the future.
Section 10.10. Termination; Limited Survival. In its sole and absolute
discretion US Borrower may at any time that no Obligations are owing elect in a
written notice delivered to US Agent to terminate this Agreement. Upon receipt
by US Agent of such a notice, if no Obligations are then owing this Agreement
and all other US Loan Documents shall thereupon be terminated and the parties
thereto released from all prospective obligations thereunder. Notwithstanding
the foregoing or anything herein to the contrary, any waivers or admissions made
by any Restricted Person in any Loan Document, any Obligations under Sections
3.2 through 3.6, and any obligations which any Person may have to indemnify or
compensate any Lender Party shall survive any termination of this Agreement or
any other Loan Document. At the request and expense of US Borrower, US Agent
shall prepare and execute all necessary instruments to reflect and effect such
termination of the US Loan Documents. US Agent is
51
57
hereby authorized to execute all such instruments on behalf of all Lenders,
without the joinder of or further action by any Lender.
Section 10.11. Severability. If any term or provision of any Loan
Document shall be determined to be illegal or unenforceable all other terms and
provisions of the US Loan Documents shall nevertheless remain effective and
shall be enforced to the fullest extent permitted by applicable Law.
Section 10.12. Counterparts; Fax. This Agreement may be separately
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to
constitute one and the same Agreement. This Agreement and the US Loan Documents
may be validly executed and delivered by facsimile or other electronic
transmission.
Section 10.13. Waiver of Jury Trial, Punitive Damages, etc. US BORROWER
AND EACH LENDER PARTY HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND
IRREVOCABLY (A) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH
THE US LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED
THEREWITH, BEFORE OR AFTER MATURITY; (B) WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY "SPECIAL DAMAGES", AS DEFINED BELOW, (C) CERTIFIES THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (D)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER US
LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
AS USED IN THIS SECTION, "SPECIAL DAMAGES" INCLUDES ALL SPECIAL, CONSEQUENTIAL,
EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES NOT INCLUDE
ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS EXPRESSLY PROMISED TO PAY OR
DELIVER TO ANY OTHER PARTY HERETO.
Section 10.14. Defined Terms. Capitalized terms and phrases used and
not otherwise defined herein shall for all purposes of this Agreement have the
meaning given to such terms and phrases in Annex I hereto.
Section 10.15. Annex I, Exhibits and Schedules; Additional Definitions.
Annex I and all Exhibits and Schedules attached to this Agreement are a part
hereof for all purposes.
Section 10.16. Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein the terms defined in this
Agreement which refer to a particular agreement, instrument or document also
refer to and include all renewals, extensions, modifications, amendments and
restatements of such agreement, instrument or document, provided that nothing
contained in this section shall be construed to authorize any such renewal,
extension, modification, amendment or restatement.
52
58
Section 10.17. References and Titles. All references in this Agreement
to Exhibits, Schedules, articles, sections, subsections and other subdivisions
refer to the Exhibits, Schedules, articles, sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any subdivisions are for convenience only and do
not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this
Agreement", "this instrument", "herein", "hereof", "hereby", "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. The phrases "this section"
and "this subsection" and similar phrases refer only to the sections or
subsections hereof in which such phrases occur. The word "or" is not exclusive,
and the word "including" (in its various forms) means "including without
limitation". Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.
Section 10.18. Calculations and Determinations. All calculations under
the US Loan Documents of interest chargeable with respect to Eurodollar Loans
and of fees shall be made on the basis of actual days elapsed (including the
first day but excluding the last) and a year of 360 days. All other calculations
of interest made under the US Loan Documents shall be made on the basis of
actual days elapsed (including the first day but excluding the last) and a year
of 365 or 366 days, as appropriate. Each determination by a Lender Party of
amounts to be paid under Article III or any other matters which are to be
determined hereunder by a Lender Party (such as any US Dollar Eurodollar Rate,
Adjusted US Dollar Eurodollar Rate, Business Day, Interest Period, or Reserve
Requirement) shall, in the absence of manifest error, be conclusive and binding.
Unless otherwise expressly provided herein or unless Required Lenders otherwise
consent all financial statements and reports furnished to any Lender Party
hereunder shall be prepared and all financial computations and determinations
pursuant hereto shall be made in accordance with US GAAP.
Section 10.19. Construction of Indemnities and Releases. All
indemnification and release provisions of this Agreement shall be construed
broadly (and not narrowly) in favor of the Persons receiving indemnification
from or being released.
Section 10.20. Termination of Existing Agreement. Upon the payment in
full of all outstanding indebtedness owing under the Existing Agreement, the
Existing Agreement and the other loan documents executed pursuant thereto shall
be terminated and the parties thereto shall have no further obligations or
liabilities, covenants, or representations thereunder; provided, however, the
indemnification obligations provided in the Existing Agreement shall not be
terminated and shall survive the termination of the Existing Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
59
IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
DEVON ENERGY CORPORATION
US Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President - Finance
Address:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
60
NATIONSBANK, N.A.,
Administrative Agent, US LC Issuer
and Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
61
BANK OF MONTREAL
Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director, U.S.
Corporate Banking
62
THE FIRST NATIONAL BANK OF
CHICAGO
Lender
By: /s/ ▇▇▇▇▇▇ ▇. DIESKER
------------------------------------
Name: ▇▇▇▇▇▇ ▇. Diesker
Title: Vice President
63
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
Lender
By: /s/ ▇▇▇▇▇ ▇. GERMAN
------------------------------------
Name: ▇▇▇▇▇ ▇. German
Title: Managing Director
64
UMB OKLAHOMA BANK
Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
65
FIRST UNION NATIONAL BANK
Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice ▇▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ (▇▇▇▇▇), INC.
Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
67
BANK OF OKLAHOMA, N.A.
Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
68
WESTDEUTSCHE LANDESBANK
GIROZENTRALE
Lender
By: /s/ KHEIL ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: Kheil ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Associate
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
70
ROYAL BANK OF CANADA
Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Manager
71
SUNTRUST BANK, ATLANTA
Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
By: /s/ ▇▇▇▇▇ ▇. EDGE
-----------------------------------
Name: ▇▇▇▇▇ ▇. Edge
Title: Vice President
72
[EXECUTION]
ANNEX I
DEFINED TERMS
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any assets acquired by such specified Person, and any refinancing of
the foregoing indebtedness on similar terms, taking into account current market
conditions.
"Acquisition Documents" means (a) the Amended and Restated Combination
Agreement dated as of June 29, 1998 and all schedules and exhibits thereto
pursuant to which US Borrower is acquiring all of the outstanding common shares
of Northstar Energy and (b) all other material agreements or instruments
delivered in connection therewith to consummate the acquisition contemplated
thereby.
"Adjusted Canadian Dollar Eurodollar Rate" means, for any Canadian
Dollar Eurodollar Loan for any Eurodollar Interest Period therefor, the per
annum rate equal to the sum of (a) the Applicable Margin plus (b) the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by
Canadian Agent to be equal to the quotient obtained by dividing (i) the Canadian
Dollar Eurodollar Rate for such Canadian Dollar Eurodollar Loan for such
Eurodollar Interest Period by (ii) 1 minus the Reserve Requirement for such
Canadian Dollar Eurodollar Loan for such Interest Period. The Adjusted Canadian
Dollar Eurodollar Rate for any Canadian Dollar Eurodollar Loan shall change
whenever the Applicable Margin or the Reserve Requirement changes. No Adjusted
Canadian Dollar Eurodollar Rate charged by any Person shall ever exceed the
Highest Lawful Rate.
"Adjusted US Dollar Eurodollar Rate" means, for any US Dollar
Eurodollar Loan for any Eurodollar Interest Period therefor, the per annum rate
equal to the sum of (a) the Applicable Margin plus (b) the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by Agent
to be equal to the quotient obtained by dividing (i) the US Dollar Eurodollar
Rate for such US Dollar Eurodollar Loan for such Eurodollar Interest Period by
(ii) 1 minus the Reserve Requirement for such US Dollar Eurodollar Loan for such
Interest Period. The Adjusted US Dollar Eurodollar Rate for any US Dollar
Eurodollar Loan shall change whenever the Applicable Margin or the Reserve
Requirement changes. No Adjusted US Dollar Eurodollar Rate charged by any Person
shall ever exceed the Highest Lawful Rate.
"Affiliate" means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control
73
with, such Person. A Person shall be deemed to be "controlled by" any other
Person if such other Person possesses, directly or indirectly, power
(a) to vote 20% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing general
partners; or
(b) to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"Applicable Currency" means (i) when used with respect to any US Loan
or US LC Obligations, US Dollars, and (ii) when used with respect to any
Canadian Prime Rate Loan, any Canadian Dollar Eurodollar Loan or any Bankers'
Acceptance, Canadian Dollars, and (iii) when used with respect to any Canadian
Base Rate Loan or an US Dollar Eurodollar Loan made under the Canadian
Agreement, US Dollars.
"Applicable Lending Office" means, for each Lender and for each Type of
Loan, the "Lending Office" of such Lender (or of an Affiliate of such Lender)
designated for such Type of Loan on the signature pages hereof or such other
office of such Lender (or an Affiliate of such Lender) as such Lender may from
time to time specify to US Agent, Canadian Agent, and Borrowers by written
notice in accordance with the terms hereof as the office by which its Loans of
such Type are to be made and maintained.
"Applicable Margin" means
(a) except with respect to any Tranche B Loan, when used in the
Canadian Agreement and when used in the US Agreement on any
date, the number of Basis Points per annum set forth below
based on the Applicable Rating Level on such date:
======================================
Applicable Applicable
Rating Level Margin
======================================
Level I 27.0
--------------------------------------
Level II 30.0
--------------------------------------
Level III 40.0
--------------------------------------
Level IV 42.5
--------------------------------------
Level V 60.0
======================================
2
74
(b) when used with respect to any Tranche B Loan on any date, the
number of Basis Points per annum set forth below based on the
Applicable Rating Level on such date:
======================================
Applicable Applicable
Rating Level Margin
======================================
Level I 28.0
--------------------------------------
Level II 31.0
--------------------------------------
Level III 42.5
--------------------------------------
Level IV 45.0
--------------------------------------
Level V 62.5
======================================
Changes in the Applicable Margin will occur automatically without prior notice
as changes in the Applicable Rating Level occur. US Agent will give notice
promptly to Borrowers and the Lenders of changes in the Applicable Margin.
"Applicable Rating Level" means for any day, the highest Rating Level
(as such term is defined below in this paragraph) issued by S&P, Duff & ▇▇▇▇▇▇,
or ▇▇▇▇▇'▇, if ▇▇▇▇▇'▇ shall have issued such a rating with respect to US
Borrower (collectively, in this definition called the "Designated Rating
Agencies"); provided that if at any time three Designated Rating Agencies have
ratings in effect with respect to US Borrower's Long-Term Debt and the Rating
Levels (as such terms are defined below in this paragraph) of at least two of
the three Designated Rating Agencies are not the same, "Applicable Rating Level"
shall mean the higher of the two lowest Rating Levels of the Designated Rating
Agencies. As used in this definition, (i) the term "Rating Level" means for any
day with respect to any of the Designated Rating Agencies, the rating level
described below (or its then equivalent) applicable on such day, issued by such
Designated Rating Agency, from time to time, with respect to US Borrower's
Long-Term Debt or if such rating is unavailable, equivalents thereof, including
counterparty ratings, implied ratings and corporate ratings; (ii) "US Borrower's
Long-Term Debt" means senior, unsecured, non-credit enhanced long-term
indebtedness for borrowed money of US Borrower, and (iii) ">" means a rating
equal to or more favorable than and "<" means a rating less favorable than.
3
75
======================================================================
Duff &
Rating Level S&P ▇▇▇▇▇▇ ▇▇▇▇▇'▇*
----------------------------------------------------------------------
Level I >=A- >=A- >=A3
----------------------------------------------------------------------
Level II BBB+ BBB+ Baa1
----------------------------------------------------------------------
Level III BBB BBB Baa2
----------------------------------------------------------------------
Level IV BBB- BBB- Baa3
----------------------------------------------------------------------
Level V