EXHIBIT 10.11
CREDIT AGREEMENT
AMONG
ENSERCH EXPLORATION, INC.
AS BORROWER,
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT,
THE CHASE MANHATTAN BANK, N.A.,
AS SYNDICATION AGENT
CHEMICAL BANK,
AS AUCTION AGENT
AND
THE LENDERS NOW OR HEREAFTER PARTIES HERETO
DATED AS OF MAY 1, 1995
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Terms Defined Above....................... 1
Section 1.02 Certain Defined Terms..................... 1
Section 1.03 Accounting Terms and Determinations....... 14
ARTICLE II
BORROWINGS
Section 2.01 Committed Loans........................... 14
Section 2.02 Borrowings, Continuations and
Conversions of Committed Loans......................... 15
Section 2.03 Changes of Commitments.................... 17
Section 2.04 Fees...................................... 17
Section 2.05 Several Obligations....................... 17
Section 2.06 Notes..................................... 17
Section 2.07 Prepayments............................... 18
Section 2.08 Lending Offices........................... 19
Section 2.09 Competitive Loans......................... 19
Section 2.10 Designated Subsidiaries................... 23
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 Repayment of Loans........................ 23
Section 3.02 Interest.................................. 24
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 Payments.................................. 25
Section 4.02 Pro Rata Treatment........................ 25
Section 4.03 Computations.............................. 26
Section 4.04 Non-receipt of Funds by the
Administrative Agent................................... 26
Section 4.05 Sharing of Payments, Etc.................. 26
Section 4.06 Taxes..................................... 27
ARTICLE V
CAPITAL ADEQUACY, ADDITIONAL COSTS, ETC.
Section 5.01 Additional Costs.......................... 30
Section 5.02 Limitation on Eurodollar Loans............ 31
Section 5.03 Illegality................................ 31
Section 5.04 Base Rate Loans Pursuant to Sections
5.02 and 5.03 ......................................... 31
Section 5.05 Compensation.............................. 32
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Initial Funding........................... 32
Section 6.02 Initial and Subsequent Loans.............. 33
Section 6.03 Loans to Designated Subsidiaries.......... 33
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.01 Corporate Existence....................... 34
Section 7.02 Financial Condition....................... 35
Section 7.03 Litigation................................ 35
Section 7.04 No Breach................................. 35
Section 7.05 Authority................................. 35
Section 7.06 Approvals................................. 36
Section 7.07 Use of Loans.............................. 36
Section 7.08 ERISA..................................... 36
Section 7.09 Taxes..................................... 37
Section 7.10 Titles, etc............................... 37
Section 7.11 No Material Misstatements................. 38
Section 7.12 Investment Company Act.................... 38
Section 7.13 Public Utility Holding Company Act........ 38
Section 7.14 Subsidiaries and Partnerships............. 38
Section 7.15 Location of Business and Offices.......... 38
Section 7.16 Defaults.................................. 38
Section 7.17 Environmental Matters..................... 39
Section 7.18 Compliance with Laws...................... 40
Section 7.19 Pari Passu................................ 40
ARTICLE VIII
AFFIRMATIVE COVENANTS
Section 8.01 Financial Statements...................... 40
Section 8.02 Litigation................................ 42
Section 8.03 Maintenance, Etc.......................... 42
Section 8.04 Environmental Matters..................... 43
Section 8.05 Further Assurances........................ 43
Section 8.06 ERISA Information and Compliance.......... 43
Section 8.07 Lease Payments............................ 44
Section 8.08 Subsidiary Guaranty Agreements............ 44
ARTICLE IX
NEGATIVE COVENANTS
Section 9.01 Debt to Capital Ratio..................... 45
Section 9.02 Liens..................................... 45
Section 9.03 Investments, Loans and Advances........... 47
Section 9.04 Dividends, Distributions and
Redemptions............................................ 47
Section 9.05 Nature of Business........................ 47
Section 9.06 Mergers, Etc.............................. 47
Section 9.07 Proceeds of Notes......................... 48
Section 9.08 ERISA Compliance.......................... 48
Section 9.09 Environmental Matters..................... 49
Section 9.10 Transactions with Affiliates.............. 49
Section 9.11 Restrictive Dividend Agreements........... 49
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default........................ 49
Section 10.02 Remedies................................. 51
ARTICLE XI
THE ADMINISTRATIVE AGENT
Section 11.01 Appointment, Powers and Immunities....... 52
Section 11.02 Reliance by Agent........................ 53
Section 11.03 Defaults................................. 53
Section 11.04 Rights as a Lender....................... 53
Section 11.05 INDEMNIFICATION.......................... 53
Section 11.06 Non-Reliance on the Agents and other.....
Lenders.................................. 54
Section 11.07 Action by Agent.......................... 54
Section 11.08 Resignation or Removal of the Agen....... 55
ARTICLE XII
MISCELLANEOUS
Section 12.01 Waiver................................... 5
Section 12.02 Notices.................................. 6
Section 12.03 Payment of Expenses, Indemnities, etc.... 6
Section 12.04 Amendments, Etc.......................... 58
Section 12.05 Successors and Assigns................... 59
Section 12.06 Assignments and Participations........... 59
Section 12.07 Invalidity............................... 60
Section 12.08 Counterparts............................. 60
Section 12.09 References............................... 60
Section 12.10 Survival................................. 61
Section 12.11 Captions................................. 61
Section 12.12 NO ORAL AGREEMENTS....................... 61
Section 12.13 GOVERNING LAW; SUBMISSION TO
JURISDICTION............................. 61
Section 12.14 Interest................................. 62
Section 12.15 Confidentiality.......................... 63
Section 12.16 Effectiveness............................ 64
Section 12.17 EXCULPATION PROVISIONS................... 64
Annex 1 - List of Commitments
Exhibit A - Form of Committed Note
Exhibit B - Form of Competitive Note
Exhibit C - Form of Competitive Bid Request
Exhibit D - Form of Notice to Lenders of Competitive Bid
Request
Exhibit E - Form of Competitive Bid
Exhibit F - Form of Competitive Bid Administration
Questionnaire
Exhibit G - Form of Borrowing, Continuation and Conversion
Request
Exhibit H - Form of Compliance Certificate
Exhibit I - Form of Legal Opinion of Counsel for the Company
Exhibit J - Form of Legal Opinion of Counsel for the
Designated Subsidiary
Exhibit K - Form of Assignment Agreement
Exhibit L - Form of Notice of Designation of Designated
Subsidiaries
Exhibit M - Form of Permitted Subordinated Debt Subordination
Provisions
Exhibit N - Form of Legal Opinion of Counsel for the Subsidiary
Guarantor
Schedule 1.02 - Capital and Operating Lease Obligations
Schedule 7.02 - Liabilities
Schedule 7.03 - Litigation
Schedule 7.09 - Taxes
Schedule 7.10 - Titles, etc.
Schedule 7.14 - Subsidiaries and Partnerships
Schedule 7.17 - Environmental Matters
THIS CREDIT AGREEMENT dated as of May 1, 1995 is among: ENSERCH EXPLORATION,
INC., a corporation formed under the laws of the State of Texas (the "Company");
each of the lenders that is a signatory hereto or which becomes a signatory
hereto as provided in Section 12.06 (individually, together with its successors
and assigns, a "Lender" and, collectively, the "Lenders"); TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, a national banking association (in its individual
capacity, "TCB"), as administrative agent for the Lenders (in such capacity,
together with its successors in such capacity, the "Administrative Agent");
CHEMICAL BANK, a New York banking corporation (in its individual capacity,
"Chemical"), as auction agent for the Lenders (in such capacity, together with
its successors in such capacity, the "Auction Agent"); and THE CHASE MANHATTAN
BANK, N.A., a national association (in its individual capacity, "Chase"), as
syndication agent for the Lenders (in such capacity, together with its
successors in such capacity, the "Syndication Agent").
R E C I T A L S
A. The Company has requested that the Lenders provide certain loans to the
Company and to certain of its subsidiaries; and
B. The Lenders have agreed to make such loans subject to the terms and
conditions of this Agreement.
C. In consideration of the mutual covenants and agreements herein contained
and of the loans and commitments hereinafter referred to, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Terms Defined Above. As used in this Agreement, the terms
"Administrative Agent," "Auction Agent," "Company," "Chase," "Chemical,"
"Lender," "Lenders," "Syndication Agent," and "TCB" shall have the meanings
indicated above.
Section 1.02 Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Article I or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
"Additional Costs" shall have the meaning assigned such term in Section
5.01(a).
"Affected Loans" shall have the meaning assigned such term in Section 5.04.
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"Affiliate" shall mean with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person. For purposes of
the foregoing definition, "control" means the direct or indirect ownership of
more than 50% of the outstanding capital stock or other equity interests having
ordinary voting power.
"Agents" shall mean the Administrative Agent, the Syndication Agent and/or
the Auction Agent.
"Agreement" shall mean this Credit Agreement, as the same may from time to
time be amended or supplemented.
"Aggregate Commitments" at any time shall equal the sum of the Commitments of
the Lenders ($350,000,000), as the same may be reduced pursuant to Section
2.03(a).
"Applicable Lending Office" shall mean, for each Lender, the lending office
of such Lender (or an Affiliate of such Lender) designated for each Type of Loan
on the signature pages hereof or such other offices of such Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify to the
Administrative Agent and the Company as the office by which its Loans of such
Type are to be made and maintained.
"Applicable Margin" shall mean the following rates per annum as are
applicable based upon the Debt to Capital Ratio calculated as of the last day of
a fiscal quarter of the Company to be effective for any Committed Loan
outstanding or for the facility fee during the period from the Financial
Statement Delivery Date following such fiscal quarter to but not including the
next succeeding Financial Statement Delivery Date:
DEBT TO CAPITAL RATIO
---------------------------------
40% 45% 50%
BUT BUT BUT
40% 45% 50% 55% 55%
---- ---- ---- ---- ----
Facility Fee .150% .175% .200% .225% .250%
Eurodollar Loans .350% .425% .500% .575% .750%
Base Rate Loans 0% 0% 0% 0% 0%
"Assignment" shall have the meaning assigned such term in Section 12.06(b).
"Base Rate" shall mean, with respect to any Base Rate Loan, for any day, the
higher of (i) the Federal Funds Rate for any such day plus 1/2 of 1%
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or (ii) the Prime Rate for such day. Each change in any interest rate provided
for herein based upon the Base Rate resulting from a change in the Base Rate
shall take effect at the time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest at rates based upon the
Base Rate.
"Benefit Plan" shall mean any employee pension benefit plan, as defined in
section 3(2) of ERISA (other than a Multiemployer Plan), which (a) is currently
or hereafter sponsored, maintained or contributed to by the Company, a
Subsidiary or an ERISA Affiliate or (b) was at any time during the six preceding
years, sponsored, maintained or contributed to by the Company, a Subsidiary or
an ERISA Affiliate.
"Borrowing" shall mean a borrowing pursuant to a Borrowing Request or a
Competitive Bid Request or a continuation or a conversion pursuant to Section
2.02 consisting, in each case, of the same Type of Loans having, in the case of
Eurodollar Loans and Fixed Rate Loans, the same Interest Period.
"Borrowing Request" shall mean a request for a Borrowing of Committed Loans
pursuant to Section 2.02, substantially in the form attached as Exhibit G.
"Business Day" shall mean any day other than a day on which commercial banks
are authorized or required to close in New York, New York, Dallas, Texas, or at
the location of the Principal Office and, where such term is used in the
definition of "Quarterly Date" or if such day relates to a Borrowing or
continuation of, a payment or prepayment of principal of or interest on, or a
conversion of or into, or the Interest Period for, a Eurodollar Loan or a notice
by the Company with respect to any such Borrowing or continuation, payment,
prepayment, conversion or Interest Period, any day which is also a day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Capital Lease Obligations" shall mean, as to the Company or any Subsidiary,
the obligations of such person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property which
obligations are required to be classified and accounted for as a liability for a
capital lease on a balance sheet of such Person in accordance with GAAP and, for
purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof.
"Closing Date" shall mean the as of date of this Agreement set forth in the
first paragraph hereof.
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"Code" shall mean the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Commitment" shall mean, for any Lender, its obligation to make Committed
Loans up to the amount set forth opposite such Lender's name on Annex 1 under
the caption "Commitments" (as the same may be reduced pursuant to Section
2.03(a) pro rata to each Lender based on its Percentage Share) as modified from
time to time to reflect any assignments permitted by Section 12.06(b).
"Committed Loan" shall mean a Loan made pursuant to Section 2.01.
"Committed Note" shall mean for each Obligor a promissory note of such
Obligor described in Section 2.06(a) payable to any Lender and being
substantially in the form of Exhibit A, evidencing the aggregate Indebtedness of
such Obligor to such Lender resulting from Committed Loans made by such Lender,
together with all renewals, extensions, modifications and replacements thereof
and substitutions therefor.
"Competitive Bid" shall mean an offer by a Lender to make a Competitive Loan
pursuant to Section 2.09.
"Competitive Bid Administrative Questionnaire" shall mean a questionnaire in
the form of Exhibit F.
"Competitive Bid Rate" shall mean, as to any Competitive Bid made by a Lender
pursuant to Section 2.09, (a) in the case of a Eurodollar Loan, the Margin
(which will be added to or subtracted from the Eurodollar Rate) and (b) in the
case of a Fixed Rate Loan, the fixed rate of interest, in each case, offered by
the Lender making such Competitive Bid.
"Competitive Bid Request" shall have the meaning assigned such term in
Section 2.09.
"Competitive Loans" shall mean the loans provided for in Section 2.09.
"Competitive Note" shall mean for each Obligor a promissory note of such
Obligor described in Section 2.06(b) payable to any Lender and being
substantially in the form of Exhibit B, evidencing the aggregate Indebtedness of
such Obligor to such Lender resulting from Competitive Loans made by such
Lender, together with all renewals, extensions, modifications and replacements
thereof and substitutions therefor.
"Consolidated Subsidiaries" shall mean each Subsidiary (whether now existing
or hereafter created or acquired) the financial statements of which
4
shall be (or should have been) consolidated with the financial statements of the
Company in accordance with GAAP.
"Debt" shall mean, for the Company or any Subsidiary the sum of the following
(without duplication): (i) all obligations for borrowed money or evidenced by
bonds, debentures, mandatorily redeemable preferred stock with maturities before
the Revolving Credit Termination Date, notes or other similar instruments
(excluding interest, fees and charges); (ii) all obligations in respect of
bankers' acceptances, unreimbursed drawings on letters of credit, surety or
other bonds; (iii) all Capital Lease Obligations, but excluding such Capital
Lease Obligations in existence as of the Closing Date and set forth on Schedule
1.02 and any renewals and rearrangements, but not increases in the amount
thereof; (iv) all Operating Lease Obligations, but excluding such Operating
Lease Obligations in existence as of the Closing Date and set forth on Schedule
1.02 and any renewals and rearrangements and increases up to an additional 15%
in the amount thereof; (v) all financial guaranties in respect of Debt of
unconsolidated Affiliates and unrelated Persons; (vi) all obligations secured by
a Lien on any asset, whether or not such Debt is assumed, but excluding
obligations secured by Liens permitted by Sections 9.02(c), (e), (f), (h), (i),
(j), (k) and (l); (vii) all production payments in connection with oil and gas
properties; and (viii) all Debt of Special Entities to the extent the Company or
any Subsidiary is liable for such Debt under GAAP or such Debt is reflected on
the consolidated balance sheet of the Company or any Subsidiary. "Debt" shall
not include Permitted Subordinated Debt.
"Debt to Capital Ratio" shall have the meaning assigned such term in Section
9.01.
"Default" shall mean an Event of Default or an event which with notice or
lapse of time or both would become an Event of Default.
"Designated Subsidiary" shall mean a Subsidiary during the period that it has
been designated by the Company pursuant to Section 2.10 to have the right to
borrow hereunder.
"Dollars" and "$" shall mean lawful money of the United States of America.
"Effective Date" shall mean the date on which (i) each of the conditions
precedent set forth in Article VI has been satisfied or waived by each of the
Lenders and (ii) the conditions to effectiveness set forth in Section 12.16 have
been satisfied. Subject to Section 6.01, the Effective Date and Closing Date
may be the same date.
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"Environmental Laws" shall mean any and all Governmental Requirements
pertaining to health or the environment in effect in any and all jurisdictions
in which the Company or any Subsidiary is conducting or at any time has
conducted business, or where any Property of the Company or any Subsidiary is
located, including without limitation, the Oil Pollution Act of 1990, as
amended, ("OPA"), the Clean Air Act, as amended, the Comprehensive
Environmental, Response, Compensation, and Liability Act of 1980, as amended,
("CERCLA"), the Federal Water Pollution Control Act, as amended, the
Occupational Safety and Health Act of 1970, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, ("RCRA"), the Safe Drinking
Water Act, as amended, the Toxic Substances Control Act, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous
Materials Transportation Act, as amended, and other environmental conservation
or protection laws. The term "oil" shall have the meaning specified in OPA, the
terms "hazardous substance" and "release" (or "threatened release") shall have
the meanings specified in CERCLA, and the terms "solid waste" and "disposal" (or
"disposed") shall have the meanings specified in RCRA; provided, however, that
(i) in the event either OPA, CERCLA or RCRA is amended so as to broaden the
meaning of any term defined thereby, such broader meaning shall apply subsequent
to the effective date of such amendment and (ii) to the extent the laws of the
state in which any Property of the Company or any Subsidiary is located
establish a meaning for "oil," "hazardous substance," "release," "solid waste"
or "disposal" which is broader than that specified in either OPA, CERCLA or
RCRA, such broader meaning shall apply.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute.
"ERISA Affiliate" shall mean each trade or business (whether or not
incorporated) which together with the Company or a Subsidiary would be deemed to
be a "single employer" within the meaning of section 4001(b)(1) of ERISA or
subsections (b), (c), (m) or (o) of section 414 of the Code.
"ERISA Event" shall mean (i) a "Reportable Event" described in section 4043
of ERISA and the regulations issued thereunder (other than a "Reportable Event"
not subject to the provision for 30-day notice to the PBGC), (ii) the withdrawal
of the Company, a Subsidiary or any ERISA Affiliate from a Plan during a plan
year in which it was a "substantial employer" as defined in section 4001(a)(2)
of ERISA, (iii) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under section 4041 of ERISA, (iv)
the institution of proceedings to terminate a Plan by the PBGC, (v) any other
event or condition which might constitute grounds under section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan
6
or (vi) the partial or complete withdrawal of the Company, a Subsidiary or any
ERISA Affiliate from a Multiemployer Plan.
"Eurodollar Loans" shall mean Loans the interest rates on which are
determined on the basis of rates referred to in the definition of "Eurodollar
Rate".
"Eurodollar Rate" shall mean, with respect to any Eurodollar Loan, the rate
per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) quoted by
the Administrative Agent at approximately 11:00 a.m. London time (or as soon
thereafter as practicable) two (2) Business Days prior to the first day of the
Interest Period for such Loan for the offering by the Administrative Agent to
leading banks in the London interbank market of Dollar deposits having a term
comparable to such Interest Period and in an amount comparable to the principal
amount of the Eurodollar Loan, if a Committed Loan, to be made by the
Administrative Agent for such Interest Period, or, if a Competitive Loan,
requested for such Interest Period.
"Event of Default" shall have the meaning assigned such term in Section
10.01.
"Federal Funds Rate" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight federal funds transactions with a member of the
Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if the date for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to the Administrative Agent on such day on such transactions as
determined by the Administrative Agent.
"Fee Letter" shall mean collectively that certain letter agreement from the
Company to the Administrative Agent and the Syndication Agent dated April 4,
1995 and that certain letter agreement from the Company to the Auction Agent,
both letters concerning certain fees in connection with this Agreement and any
agreements or instruments executed in connection therewith, as the same may be
amended or replaced from time to time.
"Financial Statement Delivery Date" means the date on which the quarterly or
annual financial statements of the Company are delivered pursuant to Section
8.01(a) or (b), as the case may be.
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"Financial Statements" shall mean the financial statement or statements of
the Company and its Consolidated Subsidiaries described or referred to in
Section 7.02.
"Fixed Rate Loan" shall mean any Competitive Loan made by a Lender pursuant
to Section 2.09 bearing interest based upon an actual percentage rate per annum
offered by such Lender (as opposed to a Margin over the Eurodollar Rate) and
accepted by the Company.
"GAAP" shall mean generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof and any Person exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Governmental Requirement" shall mean any law, statute, code, ordinance,
order, determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement
(whether or not having the force of law), including, without limitation,
Environmental Laws, energy regulations and occupational, safety and health
standards or controls, of any Governmental Authority.
"Guarantors" shall mean the Company and the Subsidiary Guarantors.
"Guaranty Agreements" shall mean the Parent Guaranty Agreement and the
Subsidiary Guaranty Agreements.
"Highest Lawful Rate" shall mean, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Notes or on other
Indebtedness under laws applicable to such Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"Indebtedness" shall mean any and all amounts owing or to be owing by the
Obligors to the Administrative Agent and/or Lenders in connection with the Loan
Documents and all renewals, extensions and/or rearrangements of any of the
above.
"Indemnified Parties" shall have the meaning assigned such term in Section
12.03(b).
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"Indemnity Matters" shall mean any and all actions, suits, proceedings
(including any investigations, litigation or inquiries), claims, demands and
causes of action made or threatened against a Person and, in connection
therewith, all losses, liabilities, damages (including, without limitation,
punitive damages except those arising from the gross negligence or wilful
misconduct of such Indemnified Party) or reasonable costs and expenses of any
kind or nature whatsoever incurred by such Person whether caused by the
negligent acts or omissions of such Person seeking indemnification.
"Initial Funding" shall mean the funding of the initial Loans pursuant to
Section 6.01.
"Interest Period" shall mean, (a) with respect to any Eurodollar Loan, the
period commencing on the date such Eurodollar Loan is made and ending on the
numerically corresponding day in the first, second, third or sixth calendar
month thereafter, as the Company may select as provided in Section 2.02 (or such
longer period as may be requested by the Company and agreed to by the Majority
Lenders), except that each Interest Period which commences on the last Business
Day of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Business Day of the appropriate subsequent calendar month; and (b) with
respect to any Fixed Rate Loan, the period commencing on the date such Fixed
Rate Loan is made and ending on the date set forth in the Competitive Bid in
which the offer to make such Fixed Rate Loan was extended.
Notwithstanding the foregoing: (i) no Interest Period may commence before
and end after the Revolving Credit Termination Date; (ii) each Interest Period
which would otherwise end on a day which is not a Business Day shall end on the
next succeeding Business Day (or, for Eurodollar Loans, if such next succeeding
Business Day falls in the next succeeding calendar month, on the next preceding
Business Day); (iii) no Interest Period for Eurodollar Loans shall have a
duration of less than one month and, if the Interest Period for any Eurodollar
Loans would otherwise be for a shorter period, such Loans shall not be available
hereunder; and (iv) no Interest Period for Fixed Rate Loans shall have a
duration of less than one (1) day nor more than 365 days.
"Lien" shall mean any interest in Property securing an obligation owed to, or
a claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to (i) the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes or (ii) production payments
9
and the like payable out of Properties. For the purposes of this Agreement, the
Company or any Subsidiary shall be deemed to be the owner of any Property which
it has acquired or holds subject to a conditional sale agreement, or leases
under a financing lease or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person in a transaction
intended to create a financing.
"Loan Documents" shall mean this Agreement, the Notes, the Borrowing
Requests, the Competitive Bid Requests, the Fee Letter, the Guaranty Agreements
and the Notices of Designation of Designated Subsidiaries.
"Loans" shall mean Committed Loans or Competitive Loans.
"Majority Lenders" shall mean, at any time while no Committed Loans are
outstanding, Lenders having at least fifty-one percent (51%) of the Aggregate
Commitments and, at any time while Committed Loans are outstanding, Lenders
holding at least fifty-one percent (51%) of the outstanding aggregate principal
amount of the Committed Loans (without regard to any sale by a Lender of a
participation in any Loan under Section 12.06(c)).
"Margin" shall mean, as to any Competitive Bid relating to a Eurodollar Loan,
the margin (expressed as a percentage rate per annum) to be added to or
subtracted from the Eurodollar Rate in order to determine the interest rate
payable to such Lender with respect to such Eurodollar Loan.
"Material Adverse Effect" shall mean any material and adverse change in the
financial condition, business or results of operations of the Company and its
Subsidiaries taken as a whole which makes them unable to perform their
obligations under the Loan Documents.
"Multiemployer Plan" shall mean a multiemployer plan as defined in section
3(37) or 4001(a)(3) of ERISA which is, or within the six preceding years was,
contributed to by the Company, a Subsidiary or an ERISA Affiliate.
"Net Worth" shall mean, as at any date, the sum of the following for the
Company and its Consolidated Subsidiaries determined (without duplication) in
accordance with GAAP:
(i) the amount of preferred stock (excluding mandatorily redeemable
preferred stock) and common stock at par plus the amount of paid in capital
of the Company, plus
10
(ii) the amount of retained earnings (or, in the case of a retained earnings
deficit, minus the amount of such deficit), minus
(iii) the cost of treasury shares, minus
(iv) unamortized restricted stock compensation, plus
(v) foreign currency translation adjustment gains (or minus losses), plus
(vi) any other additions (or minus any other deductions) to the net worth of
the Company required by GAAP.
"Notes" shall mean the Committed Notes and the Competitive Notes.
"Notice of Designation of Designated Subsidiaries" shall be substantially in
the form of Exhibit L and delivered pursuant to Section 6.03.
"Obligor" shall mean either the Company or any Designated Subsidiary.
"Operating Lease Obligations" shall mean, as to the Company or any
Subsidiary, the obligations of such person to pay rent or other amounts under a
lease of (or other agreement conveying the right to use) real and/or personal
property which obligations are not required to be classified and accounted for
as a liability for a capital lease on a balance sheet of such Person and, for
purposes of this Agreement, the amount of such obligations shall be the
discounted present value of the lease payments, discounted in the same manner a
capital lease would be discounted according to GAAP.
"Other Taxes" shall have the meaning assigned such term in Section 4.06(b).
"Parent Guaranty Agreement" shall mean the Guaranty Agreement of even date
with this Agreement executed by the Company guaranteeing the Indebtedness of the
Designated Subsidiaries as such agreement may be amended, supplemented or
restated from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Percentage Share" shall mean the percentage of the Aggregate Commitments to
be provided by a Lender under this Agreement as indicated on Annex 1 hereto, as
modified from time to time to reflect any assignments permitted by Section
12.06(b).
11
"Permitted Subordinated Debt" shall mean Debt of the Company or a Subsidiary
owing to the Company, ENSERCH Corporation or another Subsidiary subordinated to
the Indebtedness on terms substantially similar to the terms set forth in
Exhibit M or on terms and pursuant to documentation acceptable to the
Administrative Agent and the Syndication Agent.
"Person" shall mean any individual, corporation, company, limited liability
company, voluntary association, partnership, joint venture, trust,
unincorporated organization or government or any agency, instrumentality or
political subdivision thereof, or any other form of entity.
"Plan" shall mean each Benefit Plan and Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any principal of any Loan which
is not paid when due (whether at stated maturity, by acceleration or otherwise),
a rate per annum during the period commencing on the due date until such amount
is paid in full or the default is cured or waived equal to 2% per annum plus the
Base Rate as in effect from time to time plus the Applicable Margin (if any),
but in no event to exceed the Highest Lawful Rate provided that, if such amount
in default is principal of a Eurodollar Loan or a Fixed Rate Loan, the "Post-
Default Rate" for such principal shall be, for the period commencing on the due
date and ending on the last day of the Interest Period therefor, 2% per annum
plus the applicable interest rate for such Loan as provided in Section 3.02(b),
(c) or (d), but in no event to exceed the Highest Lawful Rate.
"Prime Rate" shall mean the rate of interest from time to time announced
publicly by the Administrative Agent at the Principal Office as its prime rate.
Such rate is set by the Administrative Agent as a general reference rate of
interest, taking into account such factors as the Administrative Agent may deem
appropriate, it being understood that many of the Administrative Agent's
commercial or other loans are priced in relation to such rate, that it is not
necessarily the lowest or best rate actually charged to any customer and that
the Administrative Agent may make various commercial or other loans at rates of
interest having no relationship to such rate.
"Principal Office" shall mean the principal office of the Administrative
Agent, presently located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention:
Energy Group.
"Property" shall mean any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
12
"Quarterly Dates" shall mean the last day of each March, June, September, and
December, in each year, the first of which shall be June 30, 1995; provided,
however, that if any such day is not a Business Day, such Quarterly Date shall
be the next succeeding Business Day.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be amended or
supplemented from time to time.
"Regulatory Change" shall mean, with respect to any Lender, any change after
the Closing Date in any Governmental Requirement (including Regulation D) or the
adoption or making after such date of any interpretations, directives or
requests applying to a class of lenders (including such Lender or its Applicable
Lending Office) of or under any Governmental Requirement (whether or not having
the force of law) by any Governmental Authority charged with the interpretation
or administration thereof.
"Required Payment" shall have the meaning assigned such term in Section 4.04.
"Responsible Officer" shall mean, as to the Company or any Subsidiary, the
Chief Executive Officer, the President or any Vice President of such Person and,
with respect to financial matters, the term "Responsible Officer" shall include
the Chief Financial Officer, Controller, Treasurer or Treasury Officer of such
Person. Unless otherwise specified, all references to a Responsible Officer
herein shall mean a Responsible Officer of the Company.
"Revolving Credit Termination Date" shall mean, unless the Commitments are
sooner terminated pursuant to Sections 2.03(a) or 10.02, May 1, 1999.
"SEC" shall mean the Securities and Exchange Commission or any successor
Governmental Authority.
"Special Entity" shall mean any joint venture, limited liability company,
general or limited partnership or any other type of partnership or company in
which the Company or one or more of its other Subsidiaries is a member, owner,
partner or joint venturer and owns at least a majority of the equity of such
entity.
"Subsidiary" shall mean any corporation of which at least a majority of the
outstanding shares of stock having by the terms thereof ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes
13
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned or
controlled by the Company or one or more of its Subsidiaries or by the Company
and one or more of its Subsidiaries.
"Subsidiary Guarantor" shall mean any Subsidiary or Special Entity that has
executed a Subsidiary Guaranty Agreement.
"Subsidiary Guaranty Agreement" shall mean any Guaranty Agreement executed by
a Subsidiary or a Special Entity as required by Section 8.08 as such agreement
may be amended, supplemented or restated from time to time.
"Taxes" shall have the meaning assigned such term in Section 4.06(a).
"Type" shall mean, with respect to any Loan, a Base Rate Loan, Eurodollar
Loan or Fixed Rate Loan.
"Withdrawal Liability" shall have the meaning given such term under Part I of
Subtitle E of Title IV of ERISA.
Section 1.03 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Administrative Agent or the Lenders hereunder
shall be prepared, in accordance with GAAP, applied on a basis consistent with
the audited financial statements of the Company referred to in Section 7.02
(except for changes concurred with by the Company's independent public
accountants).
ARTICLE II
BORROWINGS
Section 2.01 Committed Loans.
(a) Loans. Each Lender severally agrees, on the terms of this Agreement, to
make Committed Loans to any Obligor during the period from and including (i) the
Effective Date or (ii) such later date that such Lender becomes a party to this
Agreement as provided in Section 12.06(b), to and up to, but excluding, the
Revolving Credit Termination Date in an aggregate principal amount at any one
time outstanding and owing by all Obligors up to but not exceeding the amount of
such Lender's Commitment as then in effect; provided, however, that the
aggregate principal amount of all Committed Loans and Competitive Loans by all
Lenders to any or all Obligors at any one time outstanding shall not exceed the
Aggregate
14
Commitments. Subject to the terms of this Agreement, during the period from the
Effective Date to and up to, but excluding, the Revolving Credit Termination
Date, any Obligor may borrow, repay and reborrow the amount described in this
Section 2.01.
(b) Limitation on Types of Loans. Subject to the other terms and provisions
of this Agreement, at the option of the Company, the Committed Loans may be Base
Rate Loans or Eurodollar Loans; provided that, without the prior written consent
of the Majority Lenders, no more than seven (7) Eurodollar Loans which are
Committed Loans to any or all Obligors by any Lender may be outstanding at any
time.
Section 2.02 Borrowings, Continuations and Conversions of Committed Loans.
(a) Borrowings. An Obligor shall cause the Company to give the
Administrative Agent (which shall promptly notify the Lenders) advance notice as
hereinafter provided of each Borrowing of a Committed Loan hereunder, which
shall specify the name of the Obligor making such Borrowing; the aggregate
amount of such Borrowing, the Type and the date (which shall be a Business Day)
of the Committed Loans to be borrowed and (in the case of Eurodollar Loans) the
duration of the Interest Period therefor.
(b) Minimum Amounts. All Borrowings of Base Rate Loans shall be in amounts
of at least $10,000,000 or the remaining balance of the Aggregate Commitments,
if less, or any whole multiple of $1,000,000 in excess thereof, and all
Borrowings in the form of Eurodollar Loans shall be in amounts of at least
$10,000,000 or any whole multiple of $1,000,000 in excess thereof.
(c) Notices. All Borrowings, continuations and conversions of Committed
Loans shall require advance written notice to the Administrative Agent (which
shall promptly notify the Lenders) in the form of Exhibit G (or telephonic
notice promptly confirmed by such a written notice), which in each case shall be
irrevocable, from the Company on behalf of an Obligor to be received by the
Administrative Agent not later than 10:00 a.m. Central time on the Business Day
of each Base Rate Loan borrowing and three Business Days prior to the date of
each Eurodollar Loan borrowing, continuation or conversion. Without in any way
limiting the Company's obligation to confirm in writing any telephonic notice,
the Administrative Agent may act without liability upon the basis of telephonic
notice believed by the Administrative Agent in good faith to be from the Company
prior to receipt of written confirmation. In each such case, each Obligor
hereby waives the right to dispute the Administrative Agent's record of the
terms of such telephonic notice except in the case of gross negligence or
willful misconduct by the Administrative Agent.
15
(d) Continuation Options. With respect to Committed Loans and subject to the
provisions made in this Section 2.02(d), the Company on behalf of an Obligor may
elect to continue all or any part of any Borrowing of Eurodollar Loans beyond
the expiration of the then current Interest Period relating thereto by giving
advance notice as provided in Section 2.02(c) to the Administrative Agent (which
shall promptly notify the Lenders) of such election, specifying the amount of
such Loan to be continued and the Interest Period therefor. In the absence of
such a timely and proper election, the Company on behalf of an Obligor shall be
deemed to have elected to convert such Eurodollar Loan to a Base Rate Loan
pursuant to Section 2.02(e). All or any part of any Eurodollar Loan may be
continued as provided herein, provided that (i) any continuation of any such
Loan shall be (as to each Borrowing as continued for an applicable Interest
Period) in amounts of at least $10,000,000 or any whole multiple of $1,000,000
in excess thereof and (ii) no Default shall have occurred and be continuing. If
a Default shall have occurred and be continuing, each Eurodollar Loan shall be
converted to a Base Rate Loan on the last day of the Interest Period applicable
thereto.
(e) Conversion Options. With respect to Committed Loans, the Company on
behalf of an Obligor may elect to convert all or any part of any Eurodollar Loan
on the last day of the then current Interest Period relating thereto to a Base
Rate Loan by giving notice as provided in Section 2.02(c) to the Administrative
Agent (which shall promptly notify the Lenders) of such election. Subject to
the provisions made in this Section 2.02(e), the Company on behalf of an Obligor
may elect to convert all or any part of any Base Rate Loan at any time and from
time to time to a Eurodollar Loan by giving advance notice as provided in
Section 2.02(c) to the Administrative Agent (which shall promptly notify the
Lenders) of such election. All or any part of any outstanding Base Rate Loan
may be converted as provided herein, provided that (i) any conversion of any
Base Rate Loan into a Eurodollar Loan shall be (as to each such Borrowing into
which there is a conversion for an applicable Interest Period) in amounts of at
least $10,000,000 or any whole multiple of $1,000,000 in excess thereof and (ii)
no Default shall have occurred and be continuing. If a Default shall have
occurred and be continuing, no Base Rate Loan may be converted into a Eurodollar
Loan.
(f) Advances. Not later than 1:00 p.m. (Central time) on the date
specified for each Borrowing hereunder, each Lender shall make available the
amount of the Committed Loan to be made by it on such date to the Administrative
Agent, to an account which the Administrative Agent shall specify, in
immediately available funds, for the account of the Company. The amounts so
received by the Administrative Agent shall, subject to the terms and conditions
of this Agreement, be made available to the Company on behalf of an Obligor by
depositing the same, in immediately available funds, in an account of the
Company, designated by the Company on behalf of an Obligor and maintained at the
Principal Office, or to be deposited at the direction of the Company on behalf
of an Obligor.
16
Section 2.03 Changes of Commitments.
(a) The Company on behalf of an Obligor shall have the right to terminate or
to reduce the amount of the Aggregate Commitments at any time or from time to
time upon not less than two (2) Business Days' prior notice to the
Administrative Agent (which shall promptly notify the Lenders) of each such
termination or reduction, which notice shall specify the effective date thereof
and the amount of any such reduction (which shall not be less than $10,000,000
or any whole multiple of $1,000,000 in excess thereof) and shall be irrevocable
and effective only upon receipt by the Administrative Agent.
(b) The Aggregate Commitments once terminated or reduced may not be
reinstated.
Section 2.04 Fees.
(a) The Company shall pay to the Administrative Agent for the account of each
Lender a facility fee on the daily average amount of the Aggregate Commitments
(regardless of usage) for the period from and including the Closing Date up to
but excluding the earlier of the date the Aggregate Commitments are terminated
or the Revolving Credit Termination Date at a rate per annum equal to the amount
set forth in the definition of Applicable Margin for the period designated
therein. Accrued facility fees shall be payable quarterly in arrears on each
Quarterly Date and on the earlier of the date the Aggregate Commitments are
terminated or the Revolving Credit Termination Date.
(b) The Company shall pay to the Administrative Agent for its own account an
administration fee of $25,000.00 per annum payable on the Closing Date and each
anniversary of the Closing Date during the term of this Agreement.
Section 2.05 Several Obligations. The failure of any Lender to make any
Loan to be made by it on the date specified therefor shall not relieve any other
Lender of its obligation to make its Loan on such date, but no Lender shall be
responsible for the failure of any other Lender to make a Loan to be made by
such other Lender.
Section 2.06 Notes.
(a) The Committed Loans made by each Lender to an Obligor shall be evidenced
by a single promissory note of such Obligor in substantially the form of Exhibit
A, dated (i) the Closing Date or (ii) the effective date of an Assignment
pursuant to Section 12.06(b) or (iii) the date that the Company designates a
Designated Subsidiary pursuant to Section 2.10, payable to the order of such
Lender in a principal amount equal to its Commitment and otherwise duly
completed. The date, amount, Type, interest rate and Interest Period, if any,
of each Committed Loan made by each Lender, and all payments made on account of
the principal
17
thereof, shall be recorded by such Lender on its books for its Committed Note,
and, prior to any transfer, endorsed by such Lender on the schedule attached to
such Committed Note or any continuation thereof. Failure to make any such
notation shall not affect the Obligor's obligations in respect of such Loans, or
affect the validity of such transfer by any Lender of such Note.
(b) The Competitive Loans made by each Lender to an Obligor shall be
evidenced by a single promissory note of such Obligor in substantially the form
of Exhibit B, dated (i) the Closing Date or (ii) the effective date of an
Assignment pursuant to Section 12.06(b) or (iii) the date that the Company
designates a Designated Subsidiary pursuant to Section 2.10, payable to the
order of such Lender in a principal amount equal to the Aggregate Commitments
and otherwise duly completed. The date, amount, Type, interest rate and
Interest Period of each Competitive Loan made by each Lender, and all payments
made on account of the principal thereof, shall be recorded by such Lender on
its books for its Competitive Note, and, prior to any transfer, endorsed by such
Lender on the schedule attached to such Competitive Note or any continuation
thereof. Failure to make any such notation shall not affect the Obligor's
obligations in respect of such Loans, or affect the validity of such transfer by
any Lender of such Note.
Section 2.07 Prepayments.
(a) Any Obligor may prepay its Base Rate Loans upon prior notice to the
Administrative Agent (which shall promptly notify the Lenders), which notice
shall specify the prepayment date (which shall be a Business Day) and the amount
of the prepayment (which shall be at least $5,000,000 or any whole multiple of
$1,000,000 in excess thereof or the remaining aggregate principal balance
outstanding on the Notes) and shall be irrevocable and effective only upon
receipt by the Administrative Agent, provided that interest on the principal
prepaid, accrued to the prepayment date, shall be paid on the prepayment date.
Any Obligor may prepay its Eurodollar Loans and Fixed Rate Loans on the same
condition as for Base Rate Loans and in addition such prepayments of Eurodollar
Loans and Fixed Rate Loans shall be subject to the terms of Section 5.05 and
shall be in an amount equal to all of the Eurodollar Loans and Fixed Rate Loans
for such Obligor for the Interest Period prepaid.
(b) If, after giving effect to any termination or reduction of the Aggregate
Commitments pursuant to Section 2.03, the outstanding aggregate principal amount
of the Loans exceeds the Aggregate Commitments, the Obligors shall prepay the
Loans on the date of such termination or reduction in an aggregate principal
amount equal to the excess, together with interest on the principal amount paid
accrued to the date of such prepayment.
18
(c) Prepayments permitted or required under this Section 2.07 shall be
without premium or penalty, except as required under Section 5.05 for prepayment
of Eurodollar Loans or Fixed Rate Loans.
Section 2.08 Lending Offices. The Loans of each Type made by each Lender
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.
Section 2.09 Competitive Loans.
(a) In accordance with the terms, conditions and procedures set forth in this
Section 2.09, the Company on behalf of any Obligor may on any Business Day prior
to the Revolving Credit Termination Date request Competitive Bids.
(i) Provided, however, no Lender shall be obligated to make Competitive Loans
to an Obligor unless such Lender has irrevocably offered to make such a
Competitive Loan pursuant to Section 2.09(c); and, provided, further, the
aggregate principal amount of all Competitive Loans to any or all Obligors at
any one time outstanding shall not, at any date, exceed an amount equal to (A)
the Aggregate Commitments as of such date, less (B) the aggregate principal
amount of the Committed Loans to any or all Obligors outstanding as of such
date. For purposes of determining the amount to be calculated pursuant to the
foregoing sentence, any Committed Loans that the Company on behalf of an Obligor
has requested be made, which have not yet been made, shall be given effect as if
made in the full requested amount with respect thereto.
(ii) Notwithstanding the limitations on the aggregate amount of Competitive
Loans that the Obligors may borrow under this Agreement set forth in clause (i)
of this Section 2.09(a), the making of any Competitive Loan to an Obligor by any
Lender shall not be deemed to be a utilization of such Lender's Commitment
(although it shall be deemed to be a utilization of the Aggregate Commitments
for all purposes of this Agreement).
(b) In order to request Competitive Bids, the Company on behalf of an Obligor
shall hand deliver, telex or telecopy to the Administrative Agent and the
Auction Agent a duly completed request substantially in the form of Exhibit C,
with the blanks appropriately completed (a "Competitive Bid Request"), to be
received by such Agents (i) in the case of Eurodollar Loans, not later than 9:00
a.m. (Central time) four (4) Business Days before the date specified for a
proposed Competitive Loan, and (ii) in the case of Fixed Rate Loans, not later
than 9:00 a.m. (Central time) one (1) Business Day before the date specified for
a proposed Competitive Loan. No Base Rate Loan shall be requested in, or made
pursuant to, a Competitive Bid Request. A Competitive Bid Request that does not
conform substantially to the format of Exhibit C may be rejected at the Auction
Agent's sole
19
discretion, and the Auction Agent shall promptly notify the Company of such
rejection by telex or telecopier. Each Competitive Bid Request shall in each
case refer to this Agreement and specify (A) whether the Competitive Loans then
being requested are to be Eurodollar Loans or Fixed Rate Loans, (B) the date of
such Competitive Loans (which shall be a Business Day), (C) the aggregate
principal amount thereof (which shall not be less than $10,000,000 and shall be
an integral multiple of $1,000,000), and (D) the Interest Period with respect
thereto. Promptly after its receipt of a Competitive Bid Request that is not
rejected as aforesaid, the Auction Agent shall invite by telex or telecopier (in
substantially the form set forth in Exhibit D) the Lenders to bid, on the terms
and conditions of this Agreement, to make Competitive Loans pursuant to such
Competitive Bid Request. Notwithstanding the foregoing, the Auction Agent shall
have no obligation to invite any Lender to make a Competitive Bid pursuant to
this Section 2.09(b) until such Lender has delivered a properly completed
Competitive Bid Administrative Questionnaire to the Auction Agent.
(c) Each Lender may, in its sole discretion, make one or more Competitive
Bids to an Obligor responsive to each Competitive Bid Request. Each Competitive
Bid by a Lender must be received by the Auction Agent via telex or telecopier,
in the form of Exhibit E, (i) in the case of Eurodollar Loans, not later than
8:30 a.m. (Central time) three (3) Business Days before the date specified for a
proposed Competitive Loan and (ii) in the case of Fixed Rate Loans, not later
than 8:30 a.m. (Central time) on the date specified for a proposed Competitive
Loan. Competitive Bids that do not conform substantially to the format of
Exhibit E may be rejected by the Auction Agent after conferring with, and upon
the instruction of, the Company on behalf of an Obligor, and the Auction Agent
shall notify the applicable Lender of such rejection as soon as practicable.
Each Competitive Bid shall refer to this Agreement and (A) specify the principal
amount (which shall be in a minimum principal amount of $10,000,000 and in an
integral multiple of $1,000,000 and which may equal the entire aggregate
principal amount of the Competitive Loan requested by the Company on behalf of
an Obligor) of the Competitive Loan that the applicable Lender is willing to
make to such Obligor, (B) specify the Competitive Bid Rate at which such Lender
is prepared to make such Competitive Loan and (C) confirm the Interest Period
with respect thereto specified by the Company on behalf of an Obligor in its
Competitive Bid Request. If any Lender shall elect not to make a Competitive
Bid, such Lender shall so notify the Auction Agent via telex or telecopier in
the case of Fixed Rate Loans, not later than 8:30 a.m. (Central time) on the
date of the proposed Competitive Loan and in the case of Eurodollar Loans, not
later than 8:30 a.m. (Central time) three (3) Business Days before the date
specified for a proposed Competitive Loan; provided, however, that failure by
any Lender to give such notice shall not cause such Lender to be obligated to
make any Competitive Loan. A Competitive Bid submitted by a Lender pursuant to
this Subsection 2.09(c) shall be irrevocable.
20
(d) The Auction Agent shall promptly notify the Company by telex or
telecopier of all the Competitive Bids made, the Competitive Bid Rate and the
maximum principal amount of each Competitive Loan in respect of which a
Competitive Bid was made and the identity of the Lender that made each
Competitive Bid. The Auction Agent shall send a copy of all Competitive Bids to
the Company for its records as soon as practicable after completion of the
bidding process set forth in this Section 2.09.
(e) The Company on behalf of an Obligor may in the sole and absolute
discretion of the applicable Obligor, subject only to the provisions of this
Section 2.09(e), accept or reject any Competitive Bid referred to in Section
2.09(d); provided, however, that the aggregate amount of the Competitive Bids so
accepted by the Company on behalf of an Obligor may not exceed the principal
amount of the Competitive Loan requested by the Company on behalf of an Obligor.
The Company on behalf of an Obligor shall notify the Auction Agent by telex or
telecopier whether and to what extent the Obligor has decided to accept or
reject any or all of the Competitive Bids referred to in Section 2.09(d), (i) in
the case of Eurodollar Loans, not later than 9:30 a.m. (Central time) three (3)
Business Days before the date specified for a proposed Competitive Loan, and
(ii) in the case of Fixed Rate Loans, not later than 9:30 a.m. (Central time) on
the date specified for a proposed Competitive Loan; provided, however, that (A)
the failure by the Company on behalf of an Obligor to give such notice shall be
deemed to be a rejection of all the Competitive Bids referred to in Section
2.03(c), (B) the Company on behalf of an Obligor shall not accept a Competitive
Bid made at a particular Competitive Bid Rate if the Company on behalf of an
Obligor has decided to reject a Competitive Bid made at a lower Competitive Bid
Rate, (C) if the Company on behalf of an Obligor shall accept Competitive Bids
made at a particular Competitive Bid Rate but shall be restricted by other
conditions hereof from borrowing the maximum principal amount of Competitive
Loans in respect of which Competitive Bids at such Competitive Bid Rate have
been made, then the Company on behalf of an Obligor shall accept a pro rata
portion of each Competitive Bid made at such Competitive Bid Rate based as
nearly as possible on the respective maximum principal amounts of Competitive
Loans for which such Competitive Bids were made and (D) no Competitive Bid shall
be accepted for a Competitive Loan unless such Competitive Loan is in a minimum
principal amount of $10,000,000 and an integral multiple of $1,000,000.
Notwithstanding the foregoing, if it is necessary for the Company on behalf of
an Obligor to accept a pro rata allocation of the Competitive Bids made in
response to a Competitive Bid Request (whether pursuant to the events specified
in clause (C) above or otherwise) and the available principal amount of
Competitive Loans to be allocated among the Lenders is not sufficient to enable
Competitive Loans to be allocated to each Lender in a minimum principal amount
of $10,000,000 and in integral multiples of $1,000,000, then the Company on
behalf of an Obligor shall select the Lenders to be allocated such Competitive
Loans and shall round allocations up or down to the next higher or lower
multiple of $1,000,000 as it shall deem appropriate. In addition, the Company
on behalf of an Obligor shall
21
be permitted under the foregoing procedures to accept a Competitive Bid or
Competitive Bids in a principal amount of less than $10,000,000 (i) in order to
enable the Company on behalf of an Obligor to accept Competitive Bids equal to
(but not in excess of) the principal amount of the Competitive Loan requested by
the Company on behalf of an Obligor or (ii) in order to enable the Company on
behalf of an Obligor to accept all remaining Competitive Bids, or all remaining
Competitive Bids at a particular Competitive Bid Rate. A notice given by the
Company on behalf of an Obligor pursuant to this Subsection (e) shall be
irrevocable.
(f) The Auction Agent shall promptly notify each bidding Lender by telex or
telecopy whether or not its Competitive Bid has been accepted (and if so, in
what amount and at what Competitive Bid Rate). Each successful bidder will
thereupon become bound, subject to the other applicable conditions hereof, to
make the Competitive Loan in respect of which its Competitive Bid has been
accepted. After completing the notifications referred to in the immediately
preceding sentence, the Auction Agent shall notify each Lender and the
Administrative Agent of the aggregate principal amount of all Competitive Bids
accepted.
(g) Upon receipt from the Administrative Agent of the notice of Eurodollar
Rate applicable to any Eurodollar Loan to be made by any Lender pursuant to a
Competitive Bid that has been accepted by the Company on behalf of an Obligor
pursuant to Section 2.03(e), the Auction Agent shall notify such Lender of (i)
the applicable Eurodollar Rate and (ii) the sum of the applicable Eurodollar
Rate plus the Margin bid by such Lender.
(h) No Competitive Loan shall be made within five (5) Business Days of the
date of any other Competitive Loan, unless the Company and the Auction Agent
shall mutually agree otherwise.
(i) If the Auction Agent shall at any time have a Commitment hereunder and
shall elect to submit a Competitive Bid in its capacity as a Lender, it shall
submit such Competitive Bid directly to the Company on behalf of an Obligor one
quarter of an hour earlier than the time at which the other Lenders are required
to submit their Competitive Bids to the Auction Agent pursuant to Section
2.09(c).
(j) All notices required by this Section 2.09 shall be made in accordance
with Section 12.02 and the Competitive Bid Administrative Questionnaire most
recently placed on file by each Lender with the Auction Agent.
(k) No Competitive Loan may be continued or converted, except to the extent
converted to a Base Rate Loan pursuant to Section 5.04; provided, however, a
Competitive Loan may be repaid with the proceeds of a Borrowing of Competitive
Loans or Committed Loans made pursuant to the terms of this Agreement, and the
Administrative Agent is authorized to net the Borrowing and repayments for
convenience.
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(l) Not later than 12:00 noon (Central time) on the date specified for each
Borrowing hereunder, each Lender that is a successful bidder shall make
available the amount of the Competitive Loan to be made by it on such date to
the Administrative Agent, to an account which the Administrative Agent shall
specify, in immediately available funds, for the account of the Company on
behalf of an Obligor. The amounts so received by the Administrative Agent
shall, subject to the terms and conditions of this Agreement, be made available
to the Company on behalf of an Obligor by depositing the same, in immediately
available funds, in an account of the Company on behalf of an Obligor,
designated by the Company on behalf of an Obligor and maintained at the
Principal Office.
Section 2.10 Designated Subsidiaries. The Company may from time to time
designate one or more of its Subsidiaries to have the right to borrow both
Committed Loans and Competitive Loans by sending to the Administrative Agent a
Notice of Designation of a Designated Subsidiary and otherwise complying with
Section 6.03. Each Designated Subsidiary shall be liable for (i) the principal
and interest on Loans made to it as requested in any Borrowing Request or
Competitive Bid Requests signed by it or the Company on its behalf, (ii) all
fees, indemnities and reimbursement obligations as set forth in this Agreement
and (iii) to the extent the Designated Subsidiary is a Guarantor pursuant to
Section 8.08, the obligations set forth in its Subsidiary Guaranty Agreement. No
Designated Subsidiary shall be liable for any principal or interest on any Loan
to another Obligor except to the extent that such Designated Subsidiary is a
Guarantor pursuant to Section 8.08. The Company shall be liable for all
Indebtedness of all Obligors as set forth either in this Agreement or the Parent
Guaranty Agreement. As agreed to in each Notice of Designation of Designated
Subsidiary executed and delivered by the Company and each Designated Subsidiary,
each Designated Subsidiary appoints the Company as its agent to execute all
Borrowing Requests and Competitive Bid Requests, give and receive all notices on
its behalf and take whatever other action is required of it under the Loan
Documents, and the Agents and Lenders are entitled to fully rely on all action
taken and notices given by the Company on behalf of any Designated Subsidiary.
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 Repayment of Loans. Each Obligor will pay to the
Administrative Agent, for the account of each applicable Lender, the principal
payments required by this Section 3.01. On the last day of the Interest Period
for each Competitive Loan to an Obligor, such Obligor shall repay the
outstanding aggregate principal and accrued and unpaid interest on such Loan. On
the Revolving Credit Termination Date each Obligor shall repay the outstanding
aggregate principal and accrued and unpaid interest under its Notes.
23
Section 3.02 Interest. Each Obligor will pay to the Administrative Agent,
for the account of each Lender, interest on the unpaid principal amount of each
Loan made by such Lender to such Obligor for the period commencing on the date
such Loan is made to but excluding the date such Loan shall be paid in full, at
the following rates per annum:
(a) if such Loan is a Committed Loan and a Base Rate Loan, the Base Rate (as
in effect from time to time), but in no event to exceed the Highest Lawful Rate;
(b) if such Loan is a Committed Loan and a Eurodollar Loan, for each Interest
Period relating thereto, the Eurodollar Rate for such Loan plus the Applicable
Margin, but in no event to exceed the Highest Lawful Rate;
(c) if such Loan is a Competitive Loan and a Eurodollar Loan, for each
Interest Period relating thereto, the Eurodollar Rate for such Loan plus or
minus the Margin as accepted by the Company on behalf of an Obligor, but in no
event to exceed the Highest Lawful Rate; and
(d) if such Loan is a Competitive Loan and a Fixed Rate Loan, for each
Interest Period relating thereto, the fixed rate per annum offered by the
respective Lender in its Competitive Bid and accepted by the Company on behalf
of an Obligor pursuant to Section 2.09, but in no event to exceed the Highest
Lawful Rate.
Notwithstanding the foregoing, each Obligor will pay to the Administrative
Agent, for the account of each applicable Lender interest at the applicable
Post-Default Rate on any principal of any Loan made by such Lender to such
Obligor, which shall not be paid in full when due (whether at stated maturity,
by acceleration or otherwise), for the period commencing on the due date thereof
until the same is paid in full. To the fullest extent permitted by law, each
Obligor will pay to the Administrative Agent for the account of each applicable
Lender interest at the Base Rate on interest and any other amount payable by
such Obligor hereunder other than principal on the Loans, under any other Loan
Document or under any Note held by such Lender to or for the account of such
Lender, which shall not be paid in full when due (whether at stated maturity, by
acceleration or otherwise), for the period commencing on the due date thereof
until the same is paid in full.
Accrued interest on Base Rate Loans shall be payable on each Quarterly Date
commencing on June 30, 1995, and accrued interest on each Eurodollar Loan and
Fixed Rate Loan shall be payable on the last day of the Interest Period therefor
and, if such Interest Period is longer than three months at three-month
intervals following the first day of such Interest Period, except that interest
payable at the Post-Default Rate or otherwise accruing on past due amounts shall
be payable from time to time on demand and interest on any Eurodollar Loan or
Fixed Rate Loan that is converted into a Base Rate Loan (pursuant to Section
5.04) shall be payable on the date of conversion (but only to the extent so
converted).
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Promptly after the determination of any interest rate provided for herein or
any change therein, the Administrative Agent or the Auction Agent shall notify
the Lenders to which such interest is payable and the Company thereof. Each
determination by the Administrative Agent or the Auction Agent of an interest
rate or fee hereunder shall, except in cases of manifest error, be final,
conclusive and binding on the parties.
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 Payments. Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by each Obligor
under this Agreement and the Notes shall be made in Dollars, in immediately
available funds, to the Administrative Agent at such account as the
Administrative Agent shall specify by notice to the Company on behalf of each
Obligor from time to time, not later than 1:00 p.m. (Central time) on the date
on which such payments shall become due (each such payment made after such time
on such due date to be deemed to have been made on the next succeeding Business
Day). Such payments shall be made without (to the fullest extent permitted by
applicable law) defense, set-off or counterclaim. Each payment received by the
Administrative Agent under this Agreement or any Note for the account of a
Lender shall be paid promptly to such Lender in immediately available funds. If
the due date of any payment under this Agreement or any Note would otherwise
fall on a day which is not a Business Day such date shall be extended to the
next succeeding Business Day and interest shall be payable for any principal so
extended for the period of such extension. At the time of each payment to the
Administrative Agent of any principal of or interest on any Borrowing, the
Company on behalf of the Obligors shall notify the Administrative Agent of the
Loans to which such payment shall apply. In the absence of such notice the
Administrative Agent may specify the Loans to which such payment shall apply,
but to the extent possible such payment or prepayment will be applied first to
the Loans comprised of Base Rate Loans.
Section 4.02 Pro Rata Treatment. Except to the extent otherwise provided
herein each Lender agrees that: (i) each Borrowing from the Lenders under
Section 2.01 shall be made from the Lenders pro rata in accordance with their
Percentage Share, each payment of facility fees under Section 2.04(a) shall be
made for the account of the Lenders pro rata in accordance with their Percentage
Share, and each termination or reduction of the amount of the Aggregate
Commitments under Section 2.03(a) shall be applied to the Commitment of each
Lender, pro rata according to the amounts of its respective Commitment; (ii)
each payment of principal of Loans by the Company on behalf of an Obligor shall
be made for the account of the Lenders pro rata in accordance with the
respective unpaid principal amount of the Loans held by the Lenders due or past
due on such date or intended to be prepaid by the Company on behalf of such
Obligor; and (iii) each payment of interest on Loans by the Company on behalf
of an Obligor shall be
25
made for the account of the Lenders pro rata in accordance with the amounts of
interest due and payable to the respective Lenders.
Section 4.03 Computations. Interest on Eurodollar Loans and Fixed Rate
Loans shall be computed on the basis of a year of 360 days and actual days
elapsed (including the first day but excluding the last day) occurring in the
period for which such interest is payable, unless such calculation would exceed
the Highest Lawful Rate, in which case interest shall be calculated on the per
annum basis of a year of 365 or 366 days, as the case may be. Interest on Base
Rate Loans and fees shall be computed on the basis of a year of 365 or 366 days,
as the case may be, and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which such interest or fee
is payable.
Section 4.04 Non-receipt of Funds by the Administrative Agent. Unless the
Administrative Agent shall have been notified by a Lender or the Company on
behalf of an Obligor prior to the date on which such notifying party is
scheduled to make payment to the Administrative Agent (in the case of a Lender)
of the proceeds of a Loan to be made by it hereunder or (in the case of an
Obligor) a payment to the Administrative Agent for the account of one or more of
the Lenders hereunder (such payment being herein called the "Required Payment"),
which notice shall be effective upon receipt, that it does not intend to make
the Required Payment to the Administrative Agent, the Administrative Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient(s) on such date and, if such Lender or the Company on
behalf of an Obligor (as the case may be) has not in fact made the Required
Payment to the Administrative Agent, the recipient(s) of such payment shall, on
demand, repay to the Administrative Agent the amount so made available together
with interest thereon in respect of each day during the period commencing on the
date such amount was so made available by the Administrative Agent until but
excluding the date the Administrative Agent recovers such amount at a rate per
annum which, for any Lender as recipient, will be equal to the Federal Funds
Rate, and for an Obligor as recipient, will be equal to the Post-Default Rate.
Section 4.05 Sharing of Payments, Etc. If after an Event of Default and
during its continuance any Lender shall obtain payment of any principal of or
interest on any Loan made by it to an Obligor under this Agreement through
whatever means other than an assignment pursuant to Section 12.06(b), and, as a
result of such payment, such Lender shall have received a greater percentage of
the principal or interest then due hereunder by such Obligor to such Lender than
the percentage received by any other Lenders, it shall promptly (i) notify the
Administrative Agent and each other Lender thereof and (ii) purchase from such
other Lenders participations in (or, if and to the extent specified by such
Lender, direct interests in) the Loans made by such other Lenders (or in
interest due thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all the
Lenders shall share the benefit of such excess payment (net of any expenses
which may be incurred by such Lender in obtaining or preserving such excess
payment) pro rata in accordance with
26
the unpaid principal and/or interest on the Loans to such Obligor held by each
of the Lenders. To such end all the Lenders shall make appropriate adjustments
among themselves (by the resale of participations sold or otherwise) if such
payment is rescinded or must otherwise be restored.
Section 4.06 Taxes.
(a) Payments Free and Clear. Any and all payments by an Obligor hereunder
shall be made, in accordance with Section 4.01, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender and the Administrative Agent, taxes imposed on its
income, and franchise or similar taxes imposed on it, by (i) any jurisdiction
(or political subdivision thereof) of which the Administrative Agent or such
Lender, as the case may be, is a citizen or resident or in which such Lender has
an Applicable Lending Office, (ii) the jurisdiction (or any political
subdivision thereof) in which the Administrative Agent or such Lender is
organized, or (iii) any jurisdiction (or political subdivision thereof) in which
such Lender or the Administrative Agent is presently doing business which taxes
are imposed solely as a result of doing business in such jurisdiction (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If an Obligor shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to the Lenders or the Administrative Agent (i) the sum payable shall
be increased by the amount necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 4.06) such Lender or the Administrative Agent (as the case may be)
shall receive an amount equal to the sum it would have received had no such
deductions been made, (ii) such Obligor shall make such deductions and (iii)
such Obligor shall pay the full amount deducted to the relevant taxing authority
or other Governmental Authority in accordance with applicable law.
(b) Other Taxes. In addition, to the fullest extent permitted by applicable
law, each Obligor agrees to pay any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies that arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement, any Assignment or any other Loan
Document (hereinafter referred to as "Other Taxes").
(c) INDEMNIFICATION. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH
OBLIGOR WILL INDEMNIFY EACH LENDER AND THE AGENTS FOR THE FULL AMOUNT OF TAXES
AND OTHER TAXES (INCLUDING, BUT NOT LIMITED TO, ANY TAXES OR OTHER TAXES IMPOSED
BY ANY GOVERNMENTAL AUTHORITY ON AMOUNTS PAYABLE UNDER THIS SECTION 4.06) PAID
BY SUCH LENDER OR ANY AGENT (ON THEIR BEHALF OR ON BEHALF OF ANY LENDER), AS THE
CASE MAY BE, AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND EXPENSES)
ARISING THEREFROM OR WITH RESPECT
27
THERETO, WHETHER OR NOT SUCH TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY
ASSERTED UNLESS THE PAYMENT OF SUCH TAXES WAS NOT CORRECTLY OR LEGALLY ASSERTED
AND SUCH LENDER'S PAYMENT OF SUCH TAXES OR OTHER TAXES WAS THE RESULT OF ITS
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. ANY PAYMENT PURSUANT TO SUCH
INDEMNIFICATION SHALL BE MADE WITHIN THIRTY (30) DAYS AFTER THE DATE ANY LENDER
OR ANY AGENT, AS THE CASE MAY BE, MAKES WRITTEN DEMAND THEREFOR. IF ANY LENDER
OR ANY AGENT RECEIVES A REFUND OR CREDIT IN RESPECT OF ANY TAXES OR OTHER TAXES
FOR WHICH SUCH LENDER OR SUCH AGENT HAS RECEIVED PAYMENT FROM AN OBLIGOR IT
SHALL PROMPTLY NOTIFY THE COMPANY ON BEHALF OF SUCH OBLIGOR OF SUCH REFUND OR
CREDIT AND SHALL, IF NO DEFAULT HAS OCCURRED AND IS CONTINUING, WITHIN THIRTY
(30) DAYS AFTER RECEIPT OF A REQUEST BY THE COMPANY ON BEHALF OF SUCH OBLIGOR
(OR PROMPTLY UPON RECEIPT, IF THE COMPANY ON BEHALF OF SUCH OBLIGOR HAS
REQUESTED APPLICATION FOR SUCH REFUND OR CREDIT PURSUANT HERETO), PAY AN AMOUNT
EQUAL TO SUCH REFUND OR CREDIT TO THE COMPANY ON BEHALF OF SUCH OBLIGOR WITHOUT
INTEREST (BUT WITH ANY INTEREST SO REFUNDED OR CREDITED), PROVIDED THAT SUCH
OBLIGOR, UPON THE REQUEST OF SUCH LENDER OR SUCH AGENT, AGREES TO RETURN SUCH
REFUND OR CREDIT (PLUS PENALTIES, INTEREST OR OTHER CHARGES) TO SUCH LENDER OR
SUCH AGENT IN THE EVENT SUCH LENDER OR SUCH AGENT IS REQUIRED TO REPAY SUCH
REFUND OR CREDIT.
(d) Lender Representations.
(i) Each Lender represents that it is either (i) a corporation organized under
the laws of the United States of America or any state thereof or (ii) it is
entitled to complete exemption from United States withholding tax imposed on or
with respect to any payments, including fees, to be made to it pursuant to this
Agreement (A) under an applicable provision of a tax convention to which the
United States of America is a party or (B) because it is acting through a
branch, agency or office in the United States of America and any payment to be
received by it hereunder is effectively connected with a trade or business in
the United States of America. Each Lender that is not a corporation organized
under the laws of the United States of America or any state thereof agrees to
provide to the Company and the Administrative Agent on the Closing Date, or on
the date of its delivery of the Assignment pursuant to which it becomes a
Lender, and at such other times as required by United States law or as the
Company or the Administrative Agent shall reasonably request, two accurate and
complete original signed copies of either (A) Internal Revenue Service Form 4224
(or successor form) certifying that all payments to be made to it hereunder will
be effectively connected to a United States trade or business (the "Form 4224
Certification") or (B) Internal Revenue Service Form 1001 (or successor form)
certifying that it is entitled to the benefit of a provision of a tax convention
to which the United States of America is a party which completely exempts from
United States withholding tax all payments to be made to it hereunder (the "Form
1001
28
Certification"). In addition, each Lender agrees that if it previously filed
a Form 4224 Certification, it will deliver to the Company and the Administrative
Agent a new Form 4224 Certification prior to the first payment date occurring in
each of its subsequent taxable years; and if it previously filed a Form 1001
Certification, it will deliver to the Company and the Administrative Agent a new
certification prior to the first payment date falling in the third year
following the previous filing of such certification. Each Lender also agrees to
deliver to the Company and the Administrative Agent such other or supplemental
forms as may at any time be required as a result of changes in applicable law or
regulation in order to confirm or maintain in effect its entitlement to
exemption from United States withholding tax on any payments hereunder, provided
that the circumstances of such Lender at the relevant time and applicable laws
permit it to do so. If a Lender determines, as a result of any change in either
(i) a Governmental Requirement or (ii) its circumstances, that it is unable to
submit any form or certificate that it is obligated to submit pursuant to this
Section 4.06, or that it is required to withdraw or cancel any such form or
certificate previously submitted, it shall promptly notify the Company and the
Administrative Agent of such fact. If a Lender is organized under the laws of a
jurisdiction outside the United States of America, unless the Company and the
Administrative Agent have received a Form 1001 Certification or Form 4224
Certification satisfactory to them indicating that all payments to be made to
such Lender hereunder are not subject to United States withholding tax, the
Company on behalf of each Obligor shall withhold taxes from such payments at the
applicable statutory rate. Each Lender agrees to indemnify and hold harmless
from any United States taxes, penalties, interest and other expenses, costs and
losses incurred or payable by (i) the Administrative Agent as a result of such
Lender's failure to submit any form or certificate that it is required to
provide pursuant to this Section 4.06 or (ii) the Company or the Administrative
Agent as a result of their reliance on any such form or certificate which such
Lender has provided to them pursuant to this Section 4.06.
(ii) For any period with respect to which a Lender required to do so has
failed to provide the Company with the form required pursuant to this Section
4.06, if any (other than if such failure is due to a change in a Governmental
Requirement occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to indemnification
under Section 4.06 with respect to taxes imposed by the United States which
taxes would not have been imposed but for such failure to provide such forms;
provided, however, that should a Lender, which is otherwise exempt from or
subject to a reduced rate of withholding tax, becomes subject to taxes because
of its failure to deliver a form required hereunder, the Company on behalf of
each Obligor shall take such steps as such Lender shall reasonably request to
assist such Lender to recover such taxes.
29
(iii) Any Lender claiming any additional amounts payable pursuant to this
Section 4.06 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document requested by the Company or
the Administrative Agent or to change the jurisdiction of its Applicable Lending
Office or to contest any tax imposed if the making of such a filing or change or
contesting such tax would avoid the need for or reduce the amount of any such
additional amounts that may thereafter accrue and would not, in the sole
determination of such Lender, be otherwise disadvantageous to such Lender.
ARTICLE V
CAPITAL ADEQUACY, ADDITIONAL COSTS, ETC.
Section 5.01 Additional Costs.
(a) Regulatory Changes. In the event of any introduction of and/or any
change in any applicable law, rule, regulation (including Regulation D),
official interpretation thereof or official directive after the date of this
Agreement (whether or not having the force of law) which will result in an
increase in the cost to any Lender of making or maintaining the Loans by reason
of reserve or similar requirements, or which will result in a reduction of
amounts otherwise receivable by any Lender from any Obligor of principal,
interest or other fees and charges thereunder by reason of a tax, levy, impost,
fee, charge, withholding or similar requirements of any kind, or modifies any
capital adequacy or similar requirement (including, without limitation, a
requirement which affects any Lender's or its parent's or its holding company's
allocation of capital resources to its obligations or commitments) and, as a
result, the cost to such Lender or its parent or holding company of making or
maintaining amounts available under this Agreement is increased or the Lender's
or its parent's or holding company's return under this Agreement or on all or
any of its capital is reduced, the Obligors will pay to the Administrative Agent
for such Lender upon notice as provided in Section 5.01(b) an amount equal to
such actual increased cost or reduction of yield allocable to this facility.
(b) Compensation Procedure. Any Lender notifying the Company of the
incurrence of additional costs under this Section 5.01 shall in such notice to
the Company and the Administrative Agent set forth in reasonable detail the
basis and amount of its request for compensation. Determinations and
allocations by each Lender for purposes of this Section 5.01 of the effect of
any Regulatory Change pursuant to Section 5.01(a) on its costs or rate of return
of maintaining Loans or its obligation to make Loans, or on amounts receivable
by it in respect of Loans, and of the amounts required to compensate such Lender
under this Section 5.01, shall be conclusive and binding for all purposes,
provided that such determinations and
30
allocations are made on a reasonable basis. Any request for additional
compensation under this Section 5.01 shall be paid by each Obligor to the
Administrative Agent for the applicable Lender within thirty (30) days of the
receipt by the Company of the notice described in this Section 5.01(b).
Section 5.02 Limitation on Eurodollar Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any Eurodollar
Rate for any Interest Period:
(i) the Administrative Agent determines (which determination shall be
conclusive, absent manifest error) that quotations of interest rates for the
relevant deposits referred to in the definition of "Eurodollar Rate" in Section
1.02 are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for Eurodollar Loans as
provided herein; or
(ii) the Administrative Agent determines (which determination shall be
conclusive, absent manifest error) that the relevant rates of interest referred
to in the definition of "Eurodollar Rate" in Section 1.02 upon the basis of
which the rate of interest for Eurodollar Loans for such Interest Period is to
be determined are not sufficient to adequately cover the cost to the Lenders of
making or maintaining Eurodollar Loans;
then the Administrative Agent shall give the Company prompt notice thereof, and
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans or continue or convert into
Eurodollar Loans.
Section 5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful or legally restricted for any
Lender or its Applicable Lending Office to honor its obligation to make or
maintain, continue or convert into Eurodollar Loans or Fixed Rate Loans
hereunder, then such Lender shall promptly notify the Company thereof and such
Lender's obligation to make, continue or convert into Eurodollar Loans or Fixed
Rate Loans shall be suspended until such time as such Lender may again make and
maintain, continue or convert into Eurodollar Loans or Fixed Rate Loans (in
which case the provisions of Section 5.04 shall be applicable).
Section 5.04 Base Rate Loans Pursuant to Sections 5.02 and 5.03. If the
obligation of any Lender to make, continue or convert into Eurodollar Loans or
Fixed Rate Loans shall be suspended pursuant to Sections 5.02 or 5.03 ("Affected
Loans"), all Affected Loans which would otherwise be made by such Lender shall
be made instead as Base Rate Loans (and, if an event referred to in Section 5.03
has occurred and such Lender so requests by notice to the Administrative Agent
and the Company, all Affected Loans of such Lender then outstanding shall be
automatically converted into Base Rate Loans on the date specified by such
Lender in such notice) and, to the extent that Affected Loans are so made as (or
converted into) Base Rate Loans, all payments of principal which would
31
otherwise be applied to such Lender's Affected Loans shall be applied instead to
its Base Rate Loans.
Section 5.05 Compensation. Each Obligor shall pay to the Administrative
Agent for each Lender within thirty (30) days of receipt of written request of
such Lender to the Administrative Agent and the Company (which request shall set
forth, in reasonable detail, the basis for requesting such amounts and which
shall be conclusive and binding for all purposes provided that such
determinations are made on a reasonable basis), such amount or amounts as shall
compensate it for any loss, cost, expense or liability which such Lender
determines are attributable to:
(i) any payment, prepayment or conversion of a Eurodollar Loan or Fixed Rate
Loan properly made by such Lender or such Obligor for any reason (including,
without limitation, the acceleration of the Loans pursuant to Section 10.01) on
a date other than the last day of the Interest Period for such Loan; or
(ii) any failure by such Obligor for any reason (including but not limited
to, the failure of any of the conditions precedent specified in Article VI to be
satisfied) to borrow, continue or convert into a Eurodollar Loan that is a
Committed Loan or to borrow a Competitive Loan from such Lender on the date for
such Borrowing, continuation or conversion specified in the relevant notice
given pursuant to Section 2.02 or Section 2.09.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Initial Funding.
The obligation of the Lenders to make the Initial Funding is subject to the
receipt by the Administrative Agent and the Lenders of all fees payable pursuant
to Section 2.04 on or before the Closing Date and the receipt by the
Administrative Agent of the following documents and satisfaction of the other
conditions provided in this Section 6.01:
(a) A certificate of the Secretary or an Assistant Secretary of the Company
setting forth (i) resolutions of its board of directors with respect to the
authorization of the Company to execute and deliver the Loan Documents to which
it is a party and to enter into the transactions contemplated in those
documents, (ii) the officers of the Company (y) who are authorized to sign the
Loan Documents to which the Company is a party and (z) who will, until replaced
by another officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of
32
the authorized officers, and (iv) the articles or certificate of incorporation
and bylaws of the Company, certified as being true and complete. The
Administrative Agent and the Lenders may conclusively rely on such certificate
until the Administrative Agent receives notice in writing from the Company to
the contrary.
(b) Certificates of the appropriate state agencies with respect to the
existence, qualification and good standing of the Company in the State of Texas.
(c) A compliance certificate which shall be substantially in the form of
Exhibit H, duly and properly executed by a Responsible Officer and dated as of
the date of the Initial Funding.
(d) The Notes of the Company, duly completed and executed.
(e) The Parent Guaranty Agreement, duly completed and executed.
(f) An opinion of ▇. ▇. ▇▇▇▇▇▇▇▇▇▇▇, counsel to the Company, substantially in
the form of Exhibit I hereto.
(g) A certificate of insurance for the Company and its Subsidiaries.
Section 6.02 Initial and Subsequent Loans. The obligation of the Lenders to
make Loans to any Obligor upon the occasion of each Borrowing hereunder
(including the Initial Funding) is subject to the further conditions precedent
that, as of the date of such Borrowing and after giving effect thereto: (i) no
Default shall have occurred and be continuing and (ii) the representations and
warranties made by the Company in Article VII and by each Designated Subsidiary
in its respective Notice of Designation of a Designated Subsidiary shall be true
on and as of the date of the making of such Borrowing with the same force and
effect as if made on and as of such date and following such new Borrowing,
except to the extent such representations and warranties are expressly limited
to an earlier date or the Majority Lenders have expressly consented in writing
to the contrary. Each request for a borrowing by the Company hereunder shall
constitute a certification by the Company to the effect set forth in the
preceding sentence (both as of the date of such notice and, unless the Company
otherwise notifies the Administrative Agent prior to the date of and immediately
following such Borrowing as of the date thereof).
Section 6.03 Loans to Designated Subsidiaries. The obligation of the
Lenders to make Loans to a Designated Subsidiary is subject to receipt by the
Administrative Agent of the following documents and satisfaction of the
conditions set forth in this Section 6.03 as well as the conditions set forth in
Sections 6.01 and 6.02, each of which shall be satisfactory to the
Administrative Agent in form and substance:
(a) A Notice of Designation of Designated Subsidiary executed by the Company
and such Designated Subsidiary.
33
(b) A certificate of the Secretary or an Assistant Secretary of such
Designated Subsidiary setting forth (i) resolutions of its board of directors
with respect to the authorization of such Subsidiary to execute and deliver the
Loan Documents to which it is a party and to enter into the transactions
contemplated in those documents, (ii) the officers of such Subsidiary (y) who
are authorized to sign the Loan Documents to which such Subsidiary is a party
and (z) who will, until replaced by another officer or officers duly authorized
for that purpose, act as its representative for the purposes of signing
documents and giving notices and other communications in connection with this
Agreement and the transactions contemplated hereby, (iii) specimen signatures of
the authorized officers, and (iv) the articles or certificate of incorporation
and bylaws of such Subsidiary, certified as being true and complete. The Agents
and the Lenders may conclusively rely on such certificate until the
Administrative Agent receives notice in writing from the Company to the
contrary.
(c) The Notes of such Designated Subsidiary, duly completed and executed.
(d) An opinion of counsel to such Designated Subsidiary, substantially in the
form of Exhibit J.
(e) Such Designated Subsidiary shall be a Subsidiary.
(f) The most recent unaudited balance sheet of such Designated Subsidiary
certified by a Responsible Officer.
(g) Such other documents as the Administrative Agent may reasonably request.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Administrative Agent and the
Lenders that (each representation and warranty herein is given as of the Closing
Date and shall be deemed repeated and reaffirmed on the dates of each Borrowing
as provided in Section 6.02):
Section 7.01 Corporate Existence. Each of the Company and each Designated
Subsidiary and each Subsidiary Guarantor: (i) is a corporation duly organized,
legally existing and in good standing under the laws of the jurisdiction of its
incorporation; (ii) has all requisite corporate power, and has all material
governmental licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed to be
conducted; and (iii) is qualified to do business in all
34
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify would have a Material
Adverse Effect.
Section 7.02 Financial Condition. The audited balance sheet of the Company
as at December 31, 1994 and the related statements of operations, cash flows and
changes in partners' capital and common shareholders' equity of the Company and
its predecessor for each of the three years in the period ended on said date,
with the opinion thereon of Deloitte & Touche LLP heretofore furnished to each
of the Lenders, are complete and correct and fairly present the financial
condition of the Company as at said date and the results of operations and cash
flows of the Company and its predecessor for the stated periods then ended, all
in accordance with GAAP. Neither the Company nor any Subsidiary has on the
Closing Date any material Debt, contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments, except as referred to or reflected or provided
for in the Financial Statements or in Schedule 7.02. Since December 31, 1994 to
the Closing Date, there has been no change or event having a Material Adverse
Effect. Since the date of the Financial Statements to the Closing Date, neither
the business nor the Properties of the Company or any Subsidiary have been
materially and adversely affected as a result of any fire, explosion,
earthquake, flood, drought, windstorm, accident, strike or other labor
disturbance, embargo, requisition or taking of Property or cancellation of
contracts, permits or concessions by any Governmental Authority, riot,
activities of armed forces or acts of God or of any public enemy.
Section 7.03 Litigation. As of the Closing Date, except as disclosed to the
Lenders in Schedule 7.03, there is no litigation, legal, administrative or
arbitral proceeding, investigation or other action of any nature pending or, to
the knowledge of the Company threatened against or affecting the Company or any
Subsidiary which involves the possibility of any judgment or liability against
the Company or any Subsidiary not fully covered by insurance (except for normal
deductibles), and which would have a Material Adverse Effect.
Section 7.04 No Breach. Neither the execution and delivery of the Loan
Documents, nor compliance with the terms and provisions hereof will conflict
with or result in a breach of, or require any consent which has not been
obtained as of the Closing Date under, the respective charter or by-laws of the
Company or any Subsidiary, or any Governmental Requirement or any agreement or
instrument for borrowed money to which the Company or any Subsidiary is a party
or by which it is bound or to which it or its Properties are subject, or
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien upon any of the revenues or assets of the
Company or any Subsidiary pursuant to the terms of any such agreement or
instrument other than the Liens created by the Loan Documents.
Section 7.05 Authority. The Company and each Subsidiary have all necessary
corporate power and authority to execute, deliver and perform its obligations
under the Loan Documents to which it is a party; and the execution, delivery and
performance by the
35
Company and each Subsidiary of the Loan Documents to which it is a party, have
been duly authorized by all necessary corporate action on its part; and the Loan
Documents constitute the legal, valid and binding obligations of the Company and
each Subsidiary, enforceable in accordance with their terms, except to the
extent that enforcement may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditor's rights generally.
Section 7.06 Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any Governmental Authority are necessary for the
execution, delivery or performance by the Company or any Subsidiary of the Loan
Documents or for the validity or enforceability thereof.
Section 7.07 Use of Loans. The proceeds of the Loans shall be used for
acquisition funding, working capital or general corporate purposes of the
Company. Neither the Company nor any Designated Subsidiary is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of buying or
carrying margin stock (within the meaning of Regulation G, U or X of the Board
of Governors of the Federal Reserve System). Following application of the
proceeds of each Borrowing, not more than 25 percent of the value of the assets
(either of each Obligor only or of the Company and its Subsidiaries on a
consolidated basis), which are subject to any arrangement with the
Administrative Agent or any Lender (herein or otherwise) whereby the Company's
or any Subsidiary's right or ability to sell, pledge or otherwise dispose of
assets is in any way restricted, will be margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System).
Section 7.08 ERISA. As of the Closing Date, except as would not have a
Material Adverse Effect:
(a) The Company, the Subsidiaries and each ERISA Affiliate have complied in
all material respects with ERISA and, where applicable, the Code regarding each
Plan.
(b) No act, omission or transaction has occurred which could result in
imposition on the Company, any Subsidiary or any ERISA Affiliate (whether
directly or indirectly) of (i) either a material civil penalty assessed pursuant
to subsections (c), (i) or (l) of section 502 of ERISA or a tax imposed pursuant
to Chapter 43 of Subtitle D of the Code or (ii) breach of fiduciary duty
liability damages under section 409 of ERISA.
(c) No liability to the PBGC (other than for the payment of current premiums
which are not past due) by the Company, any Subsidiary or any ERISA Affiliate
has been or is expected by the Company, any Subsidiary or any ERISA Affiliate to
be incurred with respect to any Plan. No ERISA Event with respect to any Plan
has occurred which could result in a liability of the Company, any Subsidiary or
any ERISA Affiliate.
36
(d) Full payment when due has been made of all amounts which the Company, the
Subsidiaries or any ERISA Affiliate is required under the terms of each Plan or
applicable law to have paid as contributions to such Plan as of the date hereof,
and no accumulated funding deficiency (as defined in section 302 of ERISA and
section 412 of the Code), whether or not waived, exists with respect to any
Benefit Plan.
(e) The actuarial present value of the benefit liabilities under each Benefit
Plan which is subject to Title IV of ERISA does not, as of the end of the
Company's most recently ended fiscal year, exceed the current value of the
assets (computed on a plan termination basis in accordance with Title IV of
ERISA) of such Benefit Plan allocable to such benefit liabilities. The term
"actuarial present value of the benefit liabilities" shall have the meaning
specified in section 4041 of ERISA.
(f) Neither the Company, the Subsidiaries nor any ERISA Affiliate has
received any notification (or has knowledge of any reason to expect) that any
Multiemployer Plan is in reorganization, is insolvent or has been terminated,
within the meaning of Title IV of ERISA.
(g) Neither the Company, the Subsidiaries nor any ERISA Affiliate is required
to provide security under section 401(a)(29) of the Code due to a Plan amendment
that results in an increase in current liability for the Plan.
Section 7.09 Taxes. Except as set out in Schedule 7.09, each of the Company
and its Subsidiaries has filed all United States Federal income tax returns and
all other tax returns which are required to be filed by them and has paid all
material taxes due pursuant to such returns or pursuant to any assessment
received by the Company or any Subsidiary except for any such tax, assessment,
charge or levy the payment of which is being contested in good faith and by
proper proceedings and against which adequate reserves are being maintained.
The charges, accruals and reserves on the books of the Company and its
Subsidiaries in respect of taxes and other governmental charges are, in the
opinion of the Company, adequate. No tax lien has been filed and, to the
knowledge of the Company, no claim is being asserted with respect to any such
tax, fee or other charge.
Section 7.10 Titles, etc. To the best of the Company's knowledge:
(a) Except as set out in Schedule 7.10, each of the Company and the
Designated Subsidiaries and Subsidiary Guarantors has good and defensible title
to its material (individually or in the aggregate) Properties in all material
respects, free and clear of all Liens except Liens permitted by Section 9.02.
(b) All leases and agreements necessary for the conduct of the business of
the Company and the Designated Subsidiaries and Subsidiary Guarantors are valid
and subsisting, in full force and effect and there exists no default or event or
circumstance which with the giving of notice or the passage of time or both
would
37
give rise to a default under any such lease or leases, which would affect in any
material respect the conduct of the business of the Company and the Designated
Subsidiaries and Subsidiary Guarantors.
(c) The rights, properties and other assets presently owned, leased or
licensed by the Company and the Designated Subsidiaries and Subsidiary
Guarantors including, without limitation, all easements and rights of way,
include all rights, Properties and other assets necessary to permit the Company
and the Designated Subsidiaries and Subsidiary Guarantors to conduct their
business in all material respects in the same manner as its business has been
conducted prior to the Closing Date.
Section 7.11 No Material Misstatements. No information, exhibit or report
furnished to the Agents or the Lenders by or on behalf of the Company or any
Subsidiary in connection with the negotiation and administration of this
Agreement contains any material misstatement of fact or omits to state a
material fact necessary in order to make the statements contained therein not
misleading.
Section 7.12 Investment Company Act. Neither the Company nor any Subsidiary
is an "investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
Section 7.13 Public Utility Holding Company Act. Neither the Company nor
any Subsidiary is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 7.14 Subsidiaries and Partnerships. On the Closing Date, except as
set forth on Schedule 7.14, the Company has no Subsidiaries and neither the
Company nor any Subsidiary has any interest in any general or limited
partnerships, but excluding solely tax partnerships and oil and gas joint
ventures under joint operating agreements.
Section 7.15 Location of Business and Offices. On the Closing Date, the
Company's chief executive offices are located at the address stated on the
signature page of this Agreement. On the Closing Date, the chief executive
office of each Subsidiary is located at the addresses stated on Schedule 7.14.
Section 7.16 Defaults.
(a) As of the Closing Date, neither the Company nor any Subsidiary is in
default nor has any event or circumstance occurred which, but for the expiration
of any applicable grace period or the giving of notice, or both, would
constitute a default under any agreement or instrument for borrowed money to
which the
38
Company or any Subsidiary is a party or by which the Company or any Subsidiary
is bound.
(b) No Default has occurred and is continuing.
Section 7.17 Environmental Matters. As of the Closing Date except (i) as
provided in Schedule 7.17 or (ii) as would not have a Material Adverse Effect
(or with respect to (c), (d) and (e) below, where the failure to take such
actions would not have a Material Adverse Effect):
(a) Neither any Property of the Company or any Subsidiary nor the operations
conducted thereon violate any order or requirement of any court or Governmental
Authority or any Environmental Laws;
(b) Without limitation of clause (a) above, no Property of the Company or any
Subsidiary nor the operations currently conducted thereon or, to the best
knowledge of the Company, by any prior owner or operator of such Property or
operation, are in violation of or subject to any existing, pending or threatened
action, suit, investigation, inquiry or proceeding by or before any court or
Governmental Authority or to any remedial obligations under Environmental Laws;
(c) All notices, permits, licenses or similar authorizations, if any,
required to be obtained or filed in connection with the operation or use of any
and all Property of the Company and each Subsidiary, including without
limitation past or present treatment, storage, disposal or release of a
hazardous substance or solid waste into the environment, have been duly obtained
or filed, and the Company and each Subsidiary are in compliance with the terms
and conditions of all such notices, permits, licenses and similar
authorizations;
(d) All hazardous substances, solid waste, and oil and gas exploration and
production wastes, if any, generated at any and all Property of the Company or
any Subsidiary have in the past been transported, treated and disposed of in
accordance with Environmental Laws and so as not to pose an imminent and
substantial endangerment to public health or welfare or the environment, and, to
the best knowledge of the Company, all such transport carriers and treatment and
disposal facilities have been and are operating in compliance with Environmental
Laws and so as not to pose an imminent and substantial endangerment to public
health or welfare or the environment, and are not the subject of any existing,
pending or threatened action, investigation or inquiry by any Governmental
Authority in connection with any Environmental Laws;
(e) The Company has taken all steps reasonably necessary to determine and has
determined that no hazardous substances, solid waste, or oil and gas exploration
and production wastes, have been disposed of or otherwise released and there has
been no threatened release of any hazardous substances on or to any
39
Property of the Company or any Subsidiary except in compliance with
Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment;
(f) To the extent applicable, all Property of the Company and each Subsidiary
currently satisfies all design, operation, and equipment requirements imposed by
the OPA or scheduled as of the Closing Date to be imposed by OPA during the term
of this Agreement, and the Company does not have any reason to believe that such
Property, to the extent subject to OPA, will not be able to maintain compliance
with the OPA requirements during the term of this Agreement; and
(g) Neither the Company nor any Subsidiary has any known contingent liability
in connection with any release or threatened release of any oil, hazardous
substance or solid waste into the environment.
Section 7.18 Compliance with Laws. As of the Closing Date, neither the
Company nor any Subsidiary has violated any Governmental Requirement or failed
to obtain any license, permit, franchise or other governmental authorization
necessary for the ownership of any of its Properties or the conduct of its
business, which violation or failure would have (in the event such violation or
failure were asserted by any Person through appropriate action) a Material
Adverse Effect.
Section 7.19 Pari Passu. The Indebtedness ranks and will rank at least pari
passu in priority with all other senior debt of each Obligor, except for secured
debt permitted by Section 9.02.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any of the Commitments are in
effect and until payment in full of all Loans hereunder, all interest thereon
and all other amounts payable by the Obligors hereunder:
Section 8.01 Financial Statements. The Company shall deliver, or shall
cause to be delivered, to the Administrative Agent with sufficient copies of
each for the Lenders:
(a) As soon as available and in any event within one hundred twenty (120)
days after the end of each fiscal year of the Company, (i) the Company's Form
10-K filed with the SEC or (ii) the audited consolidated statements of income,
shareholders' equity, and cash flows of the Company and its Consolidated
Subsidiaries for such fiscal year, and the related consolidated balance sheet of
the Company and its Consolidated Subsidiaries as at the end of such fiscal year,
and setting forth in each case in comparative form the corresponding figures as
of the
40
end of and for the preceding fiscal year, and accompanied by the related opinion
of independent public accountants of recognized national standing acceptable to
the Administrative Agent which opinion shall state that said financial
statements fairly present the consolidated financial condition, results of
operations and cash flows of the Company and its Consolidated Subsidiaries as at
the end of, and for, such fiscal year and that such financial statements have
been prepared in accordance with GAAP except for such changes in such principles
with which the independent public accountants shall have concurred and such
opinion shall not contain a "going concern" or like qualification or exception,
and a certificate of such accountants stating that, in making the examination
necessary for their opinion, they obtained no knowledge, except as specifically
stated, of any Default.
(b) As soon as available and in any event within sixty (60) days after the
end of each of the first three fiscal quarterly periods of each fiscal year of
the Company, (i) the Company's Form 10-Q filed with the SEC or (ii) unaudited
consolidated statements of income, shareholders' equity, and cash flows of the
Company and its Consolidated Subsidiaries for such period and for the period
from the beginning of the respective fiscal year to the end of such period, and
the related consolidated balance sheets as at the end of such period, and
setting forth in each case in comparative form the corresponding figures as of
the end of and for the corresponding period in the preceding fiscal year,
accompanied by the certificate of a Responsible Officer, which certificate shall
state that said financial statements fairly present the consolidated financial
condition, results of operations and cash flows of the Company and its
Consolidated Subsidiaries in accordance with GAAP, as at the end of, and for,
such period (subject to normal year-end adjustments).
(c) Promptly after a Responsible Officer of the Company knows that any
Default has occurred, a notice of such Default, describing the same in
reasonable detail and the action the Company proposes to take with respect
thereto.
(d) Promptly upon its becoming available, each financial statement, report,
notice or proxy statement sent by the Company to stockholders generally and each
regular or periodic report and any registration statement or prospectus in
respect thereof filed by the Company with or received by the Company in
connection therewith from any securities exchange or the SEC or any successor
agency, including without limitation, Form 10-K's and Form 10-Q's.
(e) As soon as available and in any event within one hundred twenty (120)
days after the end of the fiscal year of the Company, the unaudited balance
sheet of each Designated Subsidiary as at the end of the Company's fiscal year,
certified by a Responsible Officer, which certificate shall state that said
balance sheet fairly presents the financial condition of the respective
Designated Subsidiary.
The Company will furnish to the Administrative Agent, with sufficient copies for
the Lenders, at the time it furnishes each set of financial statements pursuant
to paragraph (a)
41
or (b) above, a certificate substantially in the form of Exhibit H executed by a
Responsible Officer (i) certifying as to the matters set forth therein and
stating that no Default has occurred and is continuing (or, if any Default has
occurred and is continuing, describing the same in reasonable detail), (ii)
setting forth in reasonable detail the computations necessary to determine
whether the Company is in compliance with Section 9.01 as of the end of the
respective fiscal quarter or fiscal year and (iii) certifying that the Company
is in compliance with Section 8.08 or will be in compliance within the next 30
days and listing the Subsidiaries and Special Entities, if any, that will be
executing Guaranty Agreements.
Section 8.02 Litigation. The Company shall promptly give to the
Administrative Agent, with sufficient copies for the Lenders, notice of all
legal or arbitral proceedings, and of all proceedings before any Governmental
Authority affecting the Company or any Subsidiary, except proceedings which, if
adversely determined, would not have a Material Adverse Effect.
Section 8.03 Maintenance, Etc.
(a) The Company shall and shall cause each Subsidiary Guarantor and
Designated Subsidiary to: preserve and maintain the Company's corporate
existence and all of its material rights, privileges and franchises; keep books
of record and account in which full, true and correct entries will be made of
all dealings or transactions in relation to its business and activities; comply
with all Governmental Requirements if failure to comply with such requirements
will have a Material Adverse Effect; pay and discharge all taxes, assessments
and governmental charges or levies imposed on it or on its income or profits or
on any of its Property prior to the date on which penalties attach thereto,
except for any such tax, assessment, charge or levy the payment of which is
being contested in good faith and by proper proceedings and against which
adequate reserves are being maintained; during the continuance of an Event of
Default and upon reasonable notice, permit representatives of the Administrative
Agent, during normal business hours, to examine its books and records, to
inspect its Properties, and to discuss its business and affairs with its
financial officers, all to the extent reasonably requested by the Administrative
Agent and to the extent requested by the President of the Administrative Agent,
copy and make extracts of its books and records; and keep, or cause to be kept,
insured by financially sound and reputable insurers all Property of a character
usually insured by Persons engaged in the same or similar business similarly
situated against loss or damage of the kinds and in the amounts customarily
insured against by such Persons and carry such other insurance as is usually
carried by such Persons including, without limitation, pollution liability
insurance to the extent reasonably available.
(b) Contemporaneously with the delivery of the financial statements required
by Section 8.01(a) to be delivered for each year, the Company will furnish or
cause to be furnished to the Administrative Agent a certificate of insurance
coverage from the insurer in substantially the form provided at the closing of
this
42
Agreement and, if requested, will furnish the Administrative Agent copies of the
applicable policies.
Section 8.04 Environmental Matters.
(a) The Company will and will cause each Subsidiary to establish and
implement such procedures as may be reasonably necessary to continuously
determine and assure that any failure of the following does not have a Material
Adverse Effect: (i) all Property of the Company and its Subsidiaries and the
operations conducted thereon and other activities of the Company and its
Subsidiaries are in compliance with and do not violate the requirements of any
Environmental Laws, (ii) no oil, hazardous substances or solid wastes are
disposed of or otherwise released on or to any Property owned by any such party
except in compliance with Environmental Laws, (iii) no hazardous substance will
be released on or to any such Property in a quantity equal to or exceeding that
quantity which requires reporting pursuant to Section 103 of CERCLA, and (iv) no
oil, oil and gas exploration and production wastes or hazardous substance is
released on or to any such Property so as to pose an imminent and substantial
endangerment to public health or welfare or the environment.
(b) The Company will promptly notify the Administrative Agent and the
Lenders in writing of any threatened action, investigation or inquiry by any
Governmental Authority of which the Company has knowledge in connection with any
Environmental Laws which may have a Material Adverse Effect.
Section 8.05 Further Assurances. The Company will and will cause each
Subsidiary to cure promptly any defects in the creation and issuance of the
Notes and the execution and delivery of the other Loan Documents and this
Agreement. The Company at its expense will and will cause each Subsidiary to
promptly execute and deliver to the Administrative Agent upon request all such
other documents, agreements and instruments to comply with or accomplish the
covenants and agreements of the Company or any Subsidiary, as the case may be,
in the other Loan Documents and this Agreement, or to further evidence and more
fully describe the collateral intended as security for the Notes, or to correct
any omissions in the other Loan Documents, or to perfect, protect or preserve
any Liens created pursuant to any of the other Loan Documents, or to make any
recordings, to file any notices or obtain any consents, all as may be necessary
or appropriate in connection therewith.
Section 8.06 ERISA Information and Compliance. The Company will promptly
furnish and will cause the Subsidiaries and any ERISA Affiliate to promptly
furnish to the Administrative Agent (i) immediately upon becoming aware of the
occurrence of any ERISA Event which could result in a liability of the Company,
any Subsidiary or any ERISA Affiliate having a Material Adverse Effect
(individually or in the aggregate with respect to all ERISA Events), a written
notice signed by the President or the principal financial officer of the
Company, the Subsidiary or the ERISA Affiliate, as the case may be,
43
specifying the nature thereof, what action the Company, the Subsidiary or the
ERISA Affiliate is taking or proposes to take with respect thereto, and, when
known, any action taken or proposed by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto, (ii) promptly after
request by the Administrative Agent, a true and correct copy of each actuarial
report for any Plan and each annual report for any Multiemployer Plan, (iii)
immediately upon receipt of a notice from a Multiemployer Plan regarding the
imposition of Withdrawal Liability having a Material Adverse Effect, a true and
complete copy of such notice, (iv) immediately upon becoming aware that a
Multiemployer Plan has been terminated, that the administrator or plan sponsor
of a Multiemployer Plan intends to terminate a Multiemployer Plan, or that the
PBGC has instituted or intends to institute proceedings under section 4042 of
ERISA to terminate a Multiemployer Plan which occurrence would have a Material
Adverse Effect, a written notice signed by the President or the principal
financial officer of the Company, the Subsidiary or the ERISA Affiliate, as the
case may be, specifying the nature of such occurrence and any other information
relating thereto requested by the Administrative Agent, and (v) immediately upon
receipt thereof, copies of any notice of the PBGC's intention to terminate or to
have a trustee appointed to administer any Benefit Plan which occurrence would
have a Material Adverse Effect.
Section 8.07 Lease Payments. The Company will cause its obligations to
Enserch Exploration Holdings, Inc. to be subordinated to the Indebtedness on
terms substantially similar to the terms set forth on Exhibit M or on terms and
subject to documentation satisfactory to the Administrative Agent.
Section 8.08 Subsidiary Guaranty Agreements. The Company will cause each of
its Subsidiaries and Special Entities to execute a Subsidiary Guaranty
Agreement, except for such Subsidiaries and Special Entities that in the
aggregate do not have assets at book value in excess of 15% of the total
consolidated assets at book value of the Company. The Company shall have 30
days from the date of delivery of each Compliance Certificate to comply with
this covenant. At the time that a Subsidiary or Special Entity executes and
delivers a Subsidiary Guaranty Agreement to the Administrative Agent it shall
also deliver to the Administrative Agent the following in form and substance
acceptable to the Administrative Agent:
(a) A certificate of the Secretary or an Assistant Secretary of each
Subsidiary Guarantor setting forth (i) resolutions of its board of directors or
appropriate Persons with respect to the authorization of such Subsidiary
Guarantor to execute and deliver the Loan Documents to which it is a party and
to enter into the transactions contemplated in those documents, (ii) the
officers of such Subsidiary Guarantor (y) who are authorized to sign the Loan
Documents to which such Subsidiary Guarantor is a party and (z) who will, until
replaced by another officer or officers duly authorized for that purpose, act as
its representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of the authorized officers, and
(iv) the articles or certificate of
44
incorporation and bylaws or appropriate document of governance of such
Subsidiary Guarantor, certified as being true and complete. The Agents and the
Lenders may conclusively rely on such certificate until they receive notice in
writing from the Company to the contrary.
(b) An opinion of counsel to the Subsidiary Guarantor, substantially in the
form of Exhibit N.
ARTICLE IX
NEGATIVE COVENANTS
The Company covenants and agrees that, so long as any of the Commitments are
in effect and until payment in full of Loans hereunder and all interest thereon
without the prior written consent of the Majority Lenders:
Section 9.01 Debt to Capital Ratio. The Company will not permit its ratio
("Debt to Capital Ratio") expressed as a percentage of (i) Debt of the Company
and its Consolidated Subsidiaries on a consolidated basis ("Consolidated Debt")
to (ii) the sum of Consolidated Debt plus Net Worth to exceed 60% at any time;
provided that in no event will Consolidated Debt ever exceed $750,000,000.
Section 9.02 Liens. Except as expressly permitted in this Section 9.02, the
Company will not at any time, directly or indirectly, create, assume or suffer
to exist, and will not cause, suffer or permit any Designated Subsidiary or
Subsidiary Guarantor as long as it remains a Designated Subsidiary or Subsidiary
Guarantor, directly or indirectly, to create, assume or suffer to exist, except
in favor of the Company, any Lien upon any of its Properties (now owned or
hereafter acquired), without making effective provision (and the Company
covenants that in any such case it will make or cause to be made effective
provision) whereby the Indebtedness and any other Debt of the Company or any
Designated Subsidiary or Subsidiary Guarantor then entitled thereto shall be
secured by such Lien equally and ratably with any and all other obligations and
indebtedness thereby secured, so long as any such other obligations or
indebtedness shall be so secured. Nothing in this Agreement shall be construed
to prevent the Company or any Designated Subsidiary or Subsidiary Guarantor
without so securing the amounts outstanding hereunder, from creating, assuming
or suffering to exist the following Liens, to which the provisions of this
paragraph shall not be applicable:
(a) Liens upon any Property presently owned or hereafter acquired, created at
the time of acquisition to secure a portion of the purchase price thereof, or
existing thereon at the date of acquisition, whether or not assumed by the
Company or one of its Designated Subsidiaries or Subsidiary Guarantors, provided
that every such Lien shall apply only to the Property so acquired and fixed
improvements thereon;
45
(b) any extension, renewal, or refunding of any Lien permitted by Section
9.02(a), if limited to the same Property subject to, and securing not more than
the amount secured by, the Lien extended, renewed or refunded;
(c) the pledge of current assets in the ordinary course of business, to
secure current liabilities;
(d) Liens upon (i) Property, to secure obligations to pay all or a part of
the purchase price of such Property only out of or measured by the production,
or the proceeds of such production, from such Property of oil or gas or products
or by-products thereof, or (ii) the production from Property of oil or gas or
products or by-products thereof, or the proceeds of such production, to secure
obligations to pay all or a part of the expenses of exploration, drilling or
development of such Property only out of such production or the proceeds of such
production;
(e) mechanics' or materialmen's liens, good faith deposits in connection with
tenders, leases of real estate, bids or contracts (other than contracts for the
payment of money), deposits to secure public or statutory obligations, deposits
to secure, or in lieu of, surety, stay or appeal bonds, and deposits as security
for the payment of taxes or assessments or similar charges, Liens given in
connection with bid or completion bonds; provided that such obligations secured
are not yet due or are being contested in good faith by appropriate action and
against which an adequate reserve has been established;
(f) any Lien arising by reason of deposits with, or the giving of any form of
security to, any governmental agency or any body created or approved by law or
governmental regulation for any purposes at any time as required by law or
governmental regulation as a condition to the transaction of any business or the
exercise of any privilege or license, or to enable the Company or a Subsidiary
to maintain self-insurance or to participate in any funds established to cover
any insurance risks or in connection with workmen's compensation, unemployment
insurance, old age pensions or other social security, or to share in the
privileges or benefits required for companies participating in such
arrangements; provided that such obligations secured are not yet due or are
being contested in good faith by appropriate action and against which an
adequate reserve has been established;
(g) the pledge or assignment of accounts receivable, including customers'
installment paper, to banks or others made in the ordinary course of business
(including to or by a Subsidiary which is principally engaged in the business of
financing the business of the Company and its Subsidiaries);
(h) the Liens of taxes or assessments for the then current year or not at the
time due, or the Liens of taxes or assessments already due but the validity of
which is being contested in good faith by appropriate action and against which
an adequate reserve has been established;
46
(i) any judgment or Lien against the Company or a Designated Subsidiary or
Subsidiary Guarantor, so long as the finality of such judgment is being
contested in good faith by appropriate action and the execution thereon is
stayed;
(j) assessments or similar encumbrances, the existence of which does not
impair the value or the use of the Property subject thereto for the purposes for
which it was acquired;
(k) landlords' liens on fixtures and movable Property located on premises
leased by the Company or a Designated Subsidiary or Subsidiary Guarantor in the
ordinary course of business so long as the rent secured thereby is not in
default;
(l) Liens on the assets of any limited liability company organized under a
limited liability company act of any state in which a limited liability company
is treated as a partnership for federal income tax purposes; provided that
neither the Company nor any Designated Subsidiary or Subsidiary Guarantor is
liable for the Debt of such limited liability company; and
(m) other Liens on any Properties of the Company or any Subsidiary with an
aggregate value not exceeding 1% of the book value of the total assets of the
Company on a consolidated basis.
Section 9.03 Investments, Loans and Advances. So long as any Loans are
outstanding, neither the Company nor any Subsidiary will make any loans or
advances to ENSERCH Corporation or any of its subsidiaries (but excluding the
Company and its Subsidiaries) after the occurrence and during the continuance of
an Event of Default or in excess of $50,000,000 in the aggregate outstanding at
any one time for greater than a 90 day period.
Section 9.04 Dividends, Distributions and Redemptions. The Company will not
declare or pay any dividend, purchase, redeem or otherwise acquire for value any
of its stock now or hereafter outstanding, return any capital to its
stockholders or make any distribution of its assets to its stockholders after
the occurrence and during the continuance of an Event of Default.
Section 9.05 Nature of Business. The Company will not allow any material
change to be made in the character of its business as an independent oil and gas
exploration and production company.
Section 9.06 Mergers, Etc. Neither the Company nor any Subsidiary will
merge into or with or consolidate with any other Person, or sell, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its Property or assets to any other Person
("Disposition") unless (i) no Default exists or would result from such merger or
Disposition and (ii) for any merger the Company is the survivor, or for any
merger or Disposition, if the surviving Person or acquiring Person is not the
Company, such surviving Person or acquiring Person assumes the Indebtedness and
all other
47
obligations of the Company under the Loan Documents and is approved by the
Majority Lenders.
Section 9.07 Proceeds of Notes. The Company will not permit the proceeds of
the Notes to be used for any purpose other than those permitted by Section 7.07.
Neither the Company nor any Person acting on behalf of the Company has taken or
will take any action which might cause any of the Loan Documents to violate
Regulation G, U or X or any other regulation of the Board of Governors of the
Federal Reserve System or to violate Section 7 of the Securities Exchange Act of
1934, as amended, or any rule or regulation thereunder, in each case as now in
effect or as the same may hereafter be in effect.
Section 9.08 ERISA Compliance. The Company and the Subsidiaries will not at
any time:
(a) Engage in, or permit any ERISA Affiliate to engage in, any transaction in
connection with which the Company, a Subsidiary or any ERISA Affiliate could be
subjected to either a civil penalty assessed pursuant to subsections (c), (i) or
(l) of section 502 of ERISA or a tax imposed by Chapter 43 of Subtitle D of the
Code;
(b) Terminate, or permit any ERISA Affiliate to terminate, any Benefit Plan
in a manner, or take any other action with respect to any Benefit Plan, which
could result in any liability of the Company, a Subsidiary or any ERISA
Affiliate to the PBGC;
(c) Fail to make, or permit any ERISA Affiliate to fail to make, full payment
when due of all amounts which, under the provisions of any Plan, agreement
relating thereto or applicable law, the Company, a Subsidiary or any ERISA
Affiliate is required to pay as contributions thereto;
(d) Permit to exist, or allow any ERISA Affiliate to permit to exist, any
accumulated funding deficiency within the meaning of section 302 of ERISA or
section 412 of the Code, whether or not waived, with respect to any Benefit
Plan;
(e) Permit, or allow any ERISA Affiliate to permit, the actuarial present
value of the benefit liabilities under any Benefit Plan maintained by the
Company, a Subsidiary or any ERISA Affiliate which is regulated under Title IV
of ERISA to exceed the current value of the assets (computed on a plan
termination basis in accordance with Title IV of ERISA) of such Benefit Plan
allocable to such benefit liabilities. The term "actuarial present value of the
benefit liabilities" shall have the meaning specified in section 4041 of ERISA;
(f) Incur, or permit any ERISA Affiliate to incur, a liability to or on
account of a Plan under sections 4062, 4063, or 4064 of ERISA;
48
(g) Amend, or permit any ERISA Affiliate to amend, a Plan resulting in an
increase in current liability such that the Company, a Subsidiary or any ERISA
Affiliate is required to provide security to such Plan under section 401(a)(29)
of the Code; or
(h) Incur or permit Withdrawal Liability and liability in connection with a
reorganization or termination of a Multiemployer Plan of the Company, the
Subsidiaries and the ERISA Affiliates;
provided, however, that the transactions, events and occurrences described in
this Section 9.08 shall be permitted so long as such transactions, events and
occurrences (individually and in the aggregate) will not result in a Material
Adverse Effect.
Section 9.09 Environmental Matters. Neither the Company nor any Subsidiary
will cause or permit any of its Property to be in violation of, or do anything
or permit anything to be done which will subject any such Property to any
remedial obligations under, any Environmental Laws, assuming disclosure to the
applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to such Property where such violations or
remedial obligations would have a Material Adverse Effect.
Section 9.10 Transactions with Affiliates. Neither the Company nor any
Designated Subsidiary nor any Subsidiary Guarantor will enter into any material
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property including the purchase or sale of oil and gas properties
and hydrocarbons or the rendering of any service, with any Affiliate unless such
transactions are in the ordinary course of its business and are upon fair and
reasonable terms no less favorable to it than it would obtain in a comparable
arm's length transaction with a Person not an Affiliate.
Section 9.11 Restrictive Dividend Agreements. Neither the Company nor any
Designated Subsidiary nor any Subsidiary Guarantor will create, incur, assume or
suffer to exist any financing agreement (other than this Agreement and the other
Loan Documents) which in any way restricts any Designated Subsidiary or
Subsidiary Guarantor from paying dividends to the Company.
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default. One or more of the following events shall
constitute an "Event of Default":
(a) (i) any Obligor shall default in the payment or prepayment of any
principal on any Loan when due or (ii) any Obligor shall default in the payment
of any interest on any Loan or any facility fees payable by it hereunder and
such default, other than a default of a payment or prepayment of principal,
shall continue
49
unremedied for a period of five (5) days or (iii) any Obligor shall default in
the payment of any other amount payable by it hereunder or under any other Loan
Document and such default shall continue unremedied for a period of thirty (30)
days after notice of such default by the Administrative Agent to the Company; or
(b) the Company or any Subsidiary shall default in the payment when due of
any principal of or interest on any of its other Debt of $25,000,000 or more, or
any event specified in any note, agreement, indenture or other document
evidencing or relating to any Debt of $25,000,000 or more shall occur if the
effect of such event causes, or after the giving of any notice or the lapse of
time or both, if applicable, permits the holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders) to cause, such Debt to
become due prior to its stated maturity; or
(c) any representation, warranty or certification made or deemed made herein
or in any other Loan Documents by the Company, any Designated Subsidiary or any
Subsidiary Guarantor, or any certificate furnished to any Lender or the
Administrative Agent pursuant to the provisions hereof or any other Loan
Documents, shall prove to have been false or misleading as of the time made,
deemed made or furnished in any material adverse respect; or
(d) the Company shall default in the performance of any of its obligations
under Article IX; or
(e) the Company shall default in the performance of any of its obligations
under Article VIII or any other Loan Document or any other Article of this
Agreement other than under Article IX (other than the payment of amounts due
which shall be governed by Section 10.01(a)) and such default shall continue
unremedied for a period of thirty (30) days after the earlier to occur of (i)
notice thereof to the Company by the Administrative Agent or any Lender (through
the Administrative Agent), or (ii) a Responsible Officer of the Company
otherwise becoming aware of such default; or
(f) the Company, any Designated Subsidiary or any Subsidiary Guarantor shall
admit in writing its inability to, or be generally unable to, pay its debts as
such debts become due; or
(g) the Company, any Designated Subsidiary or any Subsidiary Guarantor shall
(i) apply for or consent to the appointment of, or the taking of possession by,
a receiver, custodian, trustee or liquidator of itself or of all or a
substantial part of its Property, (ii) make a general assignment for the benefit
of its creditors, (iii) commence a voluntary case under the Federal Bankruptcy
Code (as now or hereafter in effect), (iv) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or readjustment of debts, (v) fail to controvert in a
timely and appropriate manner, or
50
acquiesce in writing to, any petition filed against it in an involuntary case
under the Federal Bankruptcy Code, or (vi) take any corporate or partnership
action for the purpose of effecting any of the foregoing; or
(h) a proceeding or case shall be commenced, without the application or
consent of the Company, any Designated Subsidiary or any Subsidiary Guarantor,
in any court of competent jurisdiction, seeking (i) its liquidation,
reorganization, dissolution or winding-up, or the composition or readjustment of
its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like of the Company, any Designated Subsidiary or any Subsidiary Guarantor
of all or any substantial part of its Property, or (iii) similar relief in
respect of the Company, any Designated Subsidiary or any Subsidiary Guarantor
under any law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect, for a period of
90 days; or (iv) an order for relief against the Company, any Designated
Subsidiary or any Subsidiary Guarantor shall be entered in an involuntary case
under the Federal Bankruptcy Code; or
(i) a judgment or judgments for the payment of money in excess of $25,000,000
in the aggregate shall be rendered by a court against the Company or any
Subsidiary Guarantor or Designated Subsidiaries and the same shall not be
discharged (or provision shall not be made for such discharge), or a stay of
execution thereof shall not be procured, within thirty (30) days from the date
of entry thereof and the Company or such Subsidiary shall not, within said
period of 30 days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal; or
(j) the Guaranty Agreements after delivery thereof shall for any reason,
except to the extent permitted by the terms thereof, cease to be in full force
and effect and valid, binding and enforceable in accordance with their terms,
except to the extent permitted by the terms of this Agreement, or the Company or
any Subsidiary Guarantor shall so state in writing; or
(k) ENSERCH Corporation shall cease to own, directly or indirectly, at least
50% of the outstanding voting stock of the Company.
Section 10.02 Remedies.
(a) In the case of an Event of Default other than one referred to in clauses
(f), (g), or (h) of Section 10.01, the Administrative Agent may and, upon
request of the Majority Lenders, shall, by notice to the Company, cancel the
Commitments and/or declare the principal amount then outstanding of, and the
accrued interest on, the Loans and all other amounts payable by the Company
hereunder and under the Notes to be forthwith due and payable, whereupon such
amounts shall be
51
immediately due and payable without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other formalities of any kind,
all of which are hereby expressly waived by the Company.
(b) In the case of the occurrence of an Event of Default referred to in
clauses (f), (g), or (h) of Section 10.01, the Commitments shall be
automatically cancelled and the principal amount then outstanding of, and the
accrued interest on, the Loans and all other amounts payable by the Company
hereunder and under the Notes shall become automatically immediately due and
payable without presentment, demand, protest, notice of intent to accelerate,
notice of acceleration or other formalities of any kind, all of which are hereby
expressly waived by the Company.
(c) All proceeds received after maturity of the Notes, whether by
acceleration or otherwise shall be applied first to reimbursement of expenses
and indemnities provided for in this Agreement and the other Loan Documents;
second to accrued interest on the Notes; third to fees; fourth pro rata to
principal outstanding on the Notes and other Indebtedness; and any excess shall
be paid to the Company or as otherwise required by any Governmental Requirement.
ARTICLE XI
THE ADMINISTRATIVE AGENT
Section 11.01 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes Texas Commerce Bank National Association, as
the Administrative Agent, and Chemical Bank, as the Auction Agent, each to act
as its agent hereunder and under the other Loan Documents with such powers as
are specifically delegated to the Administrative Agent and Auction Agent
respectively by the terms of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto. The
Syndication Agent, in such capacity, shall have no duties or responsibilities
and shall incur no liabilities under the Loan Documents. Each Agent (which term
as used in this sentence and in Section 11.05 and the first sentence of Section
11.06 shall include reference to its Affiliates and its and its Affiliates'
officers, directors, employees, attorneys, accountants, experts and agents): (i)
shall have no duties or responsibilities except those expressly set forth in
this Agreement, and shall not by reason of this Agreement be a trustee or
fiduciary for any Lender; (ii) makes no representation or warranty to any Lender
and shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by any of them
under, this Agreement, or for the value, validity, effectiveness, genuineness,
execution, effectiveness, legality, enforceability or sufficiency of this
Agreement, any Note or any other document referred to or provided for herein or
for any failure by the Company or any other Person (other than such Agent) to
perform any of its obligations hereunder or thereunder or for the existence,
value, perfection or priority of any collateral security or the financial or
other
52
condition of the Company, its Subsidiaries or any other obligor or guarantor;
(iii) except pursuant to Section 11.07 shall not be required to initiate or
conduct any litigation or collection proceedings hereunder; and (iv) shall not
be responsible for any action taken or omitted to be taken by it hereunder or
under any other document or instrument referred to or provided for herein or in
connection herewith including its own ordinary negligence, except for its own
gross negligence or willful misconduct. The Administrative Agent may employ
agents, accountants, attorneys and experts and shall not be responsible for the
negligence or misconduct of any such agents, accountants, attorneys or experts
selected by it in good faith or any action taken or omitted to be taken in good
faith by it in accordance with the advice of such agents, accountants, attorneys
or experts. Each Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof permitted hereunder shall have been filed with
the Administrative Agent.
Section 11.02 Reliance by Agent. Each Agent shall be entitled to rely upon
any certification, notice or other communication (including any thereof by
telephone, telex, telecopier, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by such Agent.
Section 11.03 Defaults. No Agent shall be deemed to have knowledge of the
occurrence of a Default (other than the Administrative Agent's notice of the
non-payment of principal of or interest on Loans or of fees). In the event that
the Administrative Agent receives a notice of the occurrence of a Default
specifying such Default and stating that such notice is a "Notice of Default",
the Administrative Agent shall give prompt notice thereof to the Lenders. In
the event of a payment Default, the Administrative Agent shall give each Lender
prompt notice of each such payment Default.
Section 11.04 Rights as a Lender. With respect to its Commitments and the
Loans made by it, each Agent (and any successor acting as an 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 an
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include each Agent in its individual capacity. Each Agent (and any
successor acting as an Agent) and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to and generally engage
in any kind of banking, trust or other business with the Company (any and of its
Affiliates) as if it were not acting as an Agent, and each Agent and its
Affiliates may accept fees and other consideration from the Company for services
in connection with this Agreement or otherwise without having to account for the
same to the Lenders.
Section 11.05 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY EACH AGENT
RATABLY IN ACCORDANCE WITH ITS PERCENTAGE SHARES FOR THE INDEMNITY MATTERS AS
DESCRIBED IN SECTION 12.03 TO THE EXTENT NOT INDEMNIFIED OR REIMBURSED
53
BY THE COMPANY UNDER SECTION 12.03, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE
COMPANY UNDER SAID SECTION 12.03 AND FOR ANY AND ALL OTHER LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER WHICH MAY BE IMPOSED
ON, INCURRED BY OR ASSERTED AGAINST SUCH AGENT IN ANY WAY RELATING TO OR ARISING
OUT OF: (I) THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OTHER DOCUMENTS
CONTEMPLATED BY OR REFERRED TO HEREIN OR THE TRANSACTIONS CONTEMPLATED HEREBY,
BUT EXCLUDING, UNLESS A DEFAULT HAS OCCURRED AND IS CONTINUING, NORMAL
ADMINISTRATIVE COSTS AND EXPENSES INCIDENT TO THE PERFORMANCE OF ITS AGENCY
DUTIES HEREUNDER OR (II) THE ENFORCEMENT OF ANY OF THE TERMS OF THIS AGREEMENT,
OTHER LOAN DOCUMENTS OR OF ANY SUCH OTHER DOCUMENTS; WHETHER OR NOT ANY OF THE
FOREGOING SPECIFIED IN THIS SECTION 11.05 ARISES FROM THE SOLE OR CONCURRENT
NEGLIGENCE OF SUCH 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 SUCH AGENT.
Section 11.06 Non-Reliance on the Agents and other Lenders. Each Lender
acknowledges and agrees that it has, independently and without reliance on any
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Company and its decision
to enter into this Agreement, and that it will, independently and without
reliance upon any 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 this Agreement. The
Agents shall not be required to keep themselves informed as to the performance
or observance by the Company of this Agreement, the Notes, the other Loan
Documents or any other document referred to or provided for herein or to inspect
the properties or books of the Company. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent or Auction Agent hereunder, the Agents 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 the
Company (or any of its Affiliates) which may come into the possession of any
Agent, or any of its Affiliates.
Section 11.07 Action by Agent. Except for action or other matters expressly
required of the Administrative Agent or Auction Agent hereunder, the
Administrative Agent or Auction Agent shall in all cases be fully justified in
failing or refusing to act hereunder unless it shall (i) receive written
instructions from the Majority Lenders (or if this Agreement requires, all of
the Lenders) specifying the action to be taken, and (ii) be indemnified to its
satisfaction by the Lenders against any and all liability and expenses which may
be incurred by it by reason of taking or continuing to take any such action
except for gross negligence or wilful misconduct. The instructions of the
Majority Lenders (or if this Agreement requires, all of the Lenders) and any
action taken or failure to act pursuant thereto by the Administrative Agent or
Auction Agent shall be binding on all of the Lenders. If a Default has occurred
and is continuing, the Administrative Agent or Auction Agent shall take such
action with respect to such Default as shall be directed by the
54
Majority Lenders (or if this Agreement requires, all of the Lenders) in the
written instructions (with indemnities) described in this Section 11.07,
provided that, unless and until the Administrative Agent or Auction Agent shall
have received such directions, the Administrative Agent or Auction Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default as it shall deem advisable in the best
interests of the Lenders. In no event, however, shall any Agent be required to
take any action which exposes such Agent to personal liability or which is
contrary to this Agreement and the other Loan Documents or applicable law.
Section 11.08 Resignation or Removal of the Agents. Subject to the
appointment and acceptance of a successor as provided below, the Administrative
Agent or Auction Agent may resign at any time by giving notice thereof to the
Lenders and the Company, and the Administrative Agent or Auction Agent may be
removed at any time with or without cause by the Majority Lenders. Upon any
such resignation or removal, the Majority Lenders shall have the right to
appoint a successor Administrative Agent or Auction Agent as the case may be. If
no successor Administrative Agent or Auction Agent shall have been so appointed
by the Majority Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Administrative Agent's or Auction Agent's giving of
notice of resignation or the Majority Lenders' removal of the retiring
Administrative Agent or Auction Agent, then the retiring Administrative Agent or
Auction Agent, as the case may be, may, on behalf of the Lenders, appoint a
respective successor Administrative Agent or Auction Agent. Upon the acceptance
of such appointment hereunder by a successor Administrative Agent or Auction
Agent, such successor Administrative Agent or Auction Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent or Auction Agent, as the case may be, and
the retiring Administrative Agent or Auction Agent shall be discharged from its
duties and obligations hereunder. After any retiring Administrative Agent's or
Auction Agent's resignation or removal hereunder as Administrative Agent or
Auction Agent, the provisions of this Article XI and Section 12.03 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Administrative Agent or Auction Agent.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Waiver. No failure on the part of any Agent or any Lender to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under any of the Loan Documents shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege under any of the Loan Documents preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies
provided herein are cumulative and not exclusive of any remedies provided by
law.
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Section 12.02 Notices. All notices and other communications provided for
herein and in the other Loan Documents (including, without limitation, any
modifications of, or waivers or consents under, this Agreement or the other Loan
Documents) shall be given or made by telex, telecopy, telegraph, cable, courier
or U.S. Mail or in writing and telexed, telecopied, telegraphed, cabled, mailed
or delivered to the intended recipient at the "Address for Notices" specified
below its name on the signature pages hereof or in the other Loan Documents or,
as to any party, at such other address as shall be designated by such party in a
notice to each other party. Except as otherwise provided in this Agreement or
in the other Loan Documents, all such communications shall be deemed to have
been duly given when transmitted by telex or telecopier, delivered to the
telegraph or cable office or personally delivered or, in the case of a mailed
notice, three (3) Business Days after the date deposited in the mails, postage
prepaid, in each case given or addressed as aforesaid. The Company shall be the
agent of each Designated Subsidiary for the receiving and giving of any notices
or other communications under the Loan Documents.
Section 12.03 Payment of Expenses, Indemnities, etc. Each Obligor agrees:
(a) whether or not the transactions hereby contemplated are consummated, to
pay all reasonable expenses of the Agents in the administration (both before and
after the execution hereof and including advice of counsel as to the rights and
duties of the Agents and the Lenders with respect thereto) of, and in connection
with the negotiation, syndication, investigation, preparation, execution and
delivery of, recording or filing of, preservation of rights under, enforcement
of, and refinancing, renegotiation or restructuring of, the Loan Documents and
any amendment, waiver or consent relating thereto (including, without
limitation, travel, photocopy, mailing, courier, telephone and other similar
expenses of the Agents, the cost of environmental audits, surveys and appraisals
at reasonable intervals, the reasonable fees and disbursements of counsel for
the Agents and in the case of enforcement for any of the Lenders); and promptly
reimburse the Agents for the account of the Agents and the Lenders for all
amounts expended, advanced or incurred by the Agents or the Lenders to satisfy
any obligation of the Company under this Agreement or any other Loan Document;
(b) TO INDEMNIFY EACH AGENT AND EACH LENDER AND EACH OF THEIR AFFILIATES AND
EACH OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS,
ATTORNEYS, ACCOUNTANTS AND EXPERTS ("INDEMNIFIED PARTIES") FROM, HOLD EACH OF
THEM HARMLESS AGAINST AND PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM
FOR, THE INDEMNITY MATTERS WHICH MAY BE INCURRED BY OR ASSERTED AGAINST OR
INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY THERETO)
AS A RESULT OF, ARISING OUT OF OR IN ANY WAY RELATED TO (I) ANY ACTUAL OR
PROPOSED USE BY ANY OBLIGOR OF THE PROCEEDS OF ANY OF THE LOANS, (II) THE
EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS, (III) THE OPERATIONS
OF THE BUSINESS OF THE COMPANY AND ITS SUBSIDIARIES, (IV) THE FAILURE OF THE
COMPANY OR ANY SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT, OR WITH
ANY GOVERNMENTAL
56
REQUIREMENT, (V) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY
WARRANTY OF THE COMPANY SET FORTH IN ANY OF THE LOAN DOCUMENTS, (VI) ANY
ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED
PURSUANT TO THE LOAN DOCUMENTS OR (VII) ANY OTHER ASPECT OF THE LOAN DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL
AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH INVESTIGATING, DEFENDING OR
PREPARING TO DEFEND ANY SUCH ACTION, SUIT, PROCEEDING (INCLUDING ANY
INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM AND INCLUDING ALL INDEMNITY
MATTERS ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF ANY INDEMNIFIED PARTY,
BUT EXCLUDING ALL INDEMNITY MATTERS ARISING SOLELY BY REASON OF CLAIMS BETWEEN
THE LENDERS OR ANY LENDER AND ANY AGENT OR A LENDER'S SHAREHOLDERS AGAINST ANY
AGENT OR LENDER OR BY REASON OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON
THE PART OF SUCH INDEMNIFIED PARTY; AND
(c) TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME EACH INDEMNIFIED PARTY
FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES TO WHICH ANY SUCH
PERSON MAY BECOME SUBJECT (I) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO THE
COMPANY OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES, INCLUDING WITHOUT
LIMITATION THE TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF THEIR
PROPERTIES AND RESULTING FROM THE FACT THAT THE AGENTS OR LENDERS ARE A PARTY TO
ANY LOAN DOCUMENT, (II) AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY THE
COMPANY OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE COMPANY
OR ANY SUBSIDIARY, (III) DUE TO PAST OWNERSHIP BY THE COMPANY OR ANY SUBSIDIARY
OF ANY OF THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH,
THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT
LIABILITY, (IV) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF
HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE
COMPANY OR ANY SUBSIDIARY, OR (V) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY
CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, PROVIDED, HOWEVER, NO INDEMNITY
SHALL BE AFFORDED UNDER THIS SECTION 12.03(C) IN RESPECT OF ANY PROPERTY FOR ANY
OCCURRENCE ARISING FROM THE ACTS OR OMISSIONS OF ANY AGENT OR ANY LENDER DURING
THE PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE
OBTAINED POSSESSION OF SUCH PROPERTY (WHETHER BY FORECLOSURE OR DEED IN LIEU OF
FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR OTHERWISE).
(d) No Indemnified Party may settle any claim to be indemnified without the
consent of the indemnitor, such consent not to be unreasonably withheld;
provided, that the indemnitor may not reasonably withhold consent to any
settlement that an Indemnified Party proposes, if the indemnitor does not have
the financial ability to pay all its obligations outstanding and asserted
against the indemnitor at
57
that time, including the maximum potential claims against the Indemnified Party
to be indemnified pursuant to this Section 12.03.
(e) In the case of any indemnification hereunder, the Administrative Agent
or a Lender, as appropriate shall give notice to the Company of any such claim
or demand being made against such Indemnified Party and the Company shall have
the non-exclusive right to join in the defense against any such claim or demand
provided that if the Company provides a defense, such Indemnified Party shall
bear its own cost of defense unless there is a conflict between the Company and
such Indemnified Party.
(f) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES
NOTWITHSTANDING THE NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER
ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT
LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT
(SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNIFIED PARTIES OR BY REASON OF
STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNIFIED
PARTIES. TO THE EXTENT THAT AN INDEMNIFIED PARTY IS FOUND TO HAVE COMMITTED AN
ACT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, THIS CONTRACTUAL OBLIGATION OF
INDEMNIFICATION SHALL CONTINUE BUT SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM
THAT IS DEEMED TO HAVE OCCURRED BY REASON OF EVENTS OTHER THAN THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE INDEMNIFIED PARTY.
(g) Each Obligor's obligation under this Section 12.03 shall survive any
termination of this Agreement and the payment of the Notes and shall continue
thereafter in full force and effect.
(h) The Obligors shall pay any amounts due under this Section 12.03 within
thirty (30) days of the receipt by the Company of notice of the amount due.
Section 12.04 Amendments, Etc. Any provision of this Agreement or any other
Loan Document may be amended, modified or waived with the Company's and the
Majority Lenders' prior written consent; provided that (i) no amendment,
modification or waiver which extends the maturity of the Loans, or the interest
or fee payment dates, increases the Aggregate Commitments, forgives the
principal amount of any Indebtedness outstanding under this Agreement, reduces
the interest rate applicable to the Loans or the fees payable to the Lenders
generally, affects this Section 12.04 or Section 12.06(a) or modifies the
definition of "Majority Lenders" or any provision which by its terms requires
the consent or approval of all of the Lenders shall be effective without consent
of all Lenders; (ii) no amendment, modification or waiver which increases or
extends the Commitment of any Lender shall be effective without the consent of
such Lender; and (iii) no amendment, modification or waiver which modifies the
rights, duties or obligations of the Administrative Agent, Auction Agent or the
Syndication Agent shall be effective without the consent of such Agent.
58
Section 12.05 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
Section 12.06 Assignments and Participations.
(a) No Obligor may assign its rights or obligations hereunder or under the
Notes without the prior consent of all of the Lenders and the Agents.
(b) Any Lender may, upon the written consent of the Company (which consent
shall not be unreasonably withheld) assign to one or more assignees all or a
portion of its rights and obligations under this Agreement and the other Loan
Documents pursuant to an Assignment Agreement substantially in the form of
Exhibit K (an "Assignment") provided, however, that (i) any such assignment
shall be in the amount of at least $10,000,000 or such lesser amount to which
the Company has consented and (ii) the assignor or assignee shall pay to the
Administrative Agent a processing and recordation fee of $2500 for each
assignment. Any such assignment will become effective upon the execution and
delivery to the Administrative Agent of the Assignment and the written consent
of the Company. Promptly after receipt of an executed Assignment, the
Administrative Agent shall send to the Company a copy of such executed
Assignment. Upon receipt of such executed Assignment, the Company, will, at its
own expense, execute and deliver new Notes to the assignor and/or assignee, as
appropriate, in accordance with their respective interests as they appear. Upon
the effectiveness of any assignment pursuant to this Section 12.06(b), the
assignee will become a "Lender," if not already a "Lender," for all purposes of
this Agreement and the other Loan Documents. The assignor shall be relieved of
its obligations hereunder to the extent of such assignment (and if the assigning
Lender no longer holds any rights or obligations under this Agreement, such
assigning Lender shall cease to be a "Lender" hereunder except that its rights
under Sections 4.06, 5.01, 5.05 and 12.03 shall not be affected). The
Administrative Agent will prepare on the last Business Day of each month during
which an assignment has become effective pursuant to this Section 12.06(b), a
new Annex 1 giving effect to all such assignments effected during such month,
and will promptly provide the same to the Company and each of the Lenders.
(c) Each Lender may transfer, grant or assign participations in all or any
part of such Lender's interests, rights and obligations hereunder pursuant to
this Section 12.06(c) to any Person, provided that: (i) such Lender shall remain
a "Lender" for all purposes of this Agreement and the transferee of such
participation shall not constitute a "Lender" hereunder; and (ii) no participant
under any such participation shall have rights to approve any amendment to or
waiver of any of the Loan Documents except to the extent such amendment or
waiver would (x) extend the Revolving Credit Termination Date, (y) reduce the
interest rate (other than as a result of waiving the applicability of any post-
default increases in interest rates) or fees applicable to any of the
Commitments or Loans in which such participant is
59
participating, or postpone the payment of any thereof, or (z) release all or
substantially all of the collateral (except as expressly provided in the other
Loan Documents) supporting any of the Commitments or Loans in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Loan Documents (the participant's rights against the granting Lender in respect
of such participation to be those set forth in the agreement with such Lender
creating such participation), and all amounts payable by the Company hereunder
shall be determined as if such Lender had not sold such participation, provided
that such participant shall be entitled to receive additional amounts under
Article V on the same basis as if it were a Lender and be indemnified under
Section 12.03 as if it were a Lender. In addition, each agreement creating any
participation must include an agreement by the participant to be bound by the
provisions of Section 12.15.
(d) The Lenders may furnish any information concerning the Company in the
possession of the Lenders from time to time to assignees and participants
(including prospective assignees and participants); provided such Persons agree
in writing to be bound by the provisions of Section 12.15.
(e) Notwithstanding anything in this Section 12.06 to the contrary, any
Lender may assign and pledge its Note to any Federal Reserve Bank or the United
States Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve System and/or such Federal Reserve Bank. No such
assignment and/or pledge shall release the assigning and/or pledging Lender from
its obligations hereunder.
(f) Notwithstanding any other provisions of this Section 12.06, no transfer
or assignment of the interests or obligations of any Lender or any grant of
participations therein shall be permitted if such transfer, assignment or grant
would require the Company to file a registration statement with the SEC or to
qualify the Loans under the "Blue Sky" laws of any state.
Section 12.07 Invalidity. In the event that any one or more of the
provisions contained in any of the Loan Documents shall, for any reason, be held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of the Notes, this
Agreement or any other Loan Document.
Section 12.08 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 12.09 References. The words "herein," "hereof," "hereunder" and
other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or subsection.
Any reference herein to a
60
Section shall be deemed to refer to the applicable Section of this Agreement
unless otherwise stated herein. Any reference herein to an exhibit or schedule
shall be deemed to refer to the applicable exhibit or schedule attached hereto
unless otherwise stated herein.
Section 12.10 Survival. The obligations of the parties under Section 4.06,
Article V, and Sections 11.05 and 12.03 shall survive the repayment of the Loans
and the termination of the Commitments. To the extent that any payments on the
Indebtedness or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Indebtedness so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Administrative Agent's and the Lenders' Liens, security
interests, rights, powers and remedies under this Agreement and each other Loan
Document shall continue in full force and effect. In such event, each Loan
Document shall be automatically reinstated and the Company shall take such
action as may be reasonably requested by the Administrative Agent and the
Lenders to effect such reinstatement.
Section 12.11 Captions. Captions and section headings appearing herein and
the table of contents hereto are included solely for convenience of reference
and are not intended to affect the interpretation of any provision of this
Agreement.
Section 12.12 NO ORAL AGREEMENTS. THE LOAN DOCUMENTS EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE ALL OTHER
AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF. THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(A) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THAT UNITED
STATES FEDERAL LAW PERMITS ANY LENDER TO CHARGE INTEREST AT THE RATE ALLOWED BY
THE LAWS OF THE STATE WHERE SUCH LENDER IS LOCATED. TEX. REV. CIV. STAT. ▇▇▇.
ART. ▇▇▇▇, ▇▇. 15 (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND
REVOLVING TRI-PARTY ACCOUNTS) SHALL NOT APPLY TO THIS AGREEMENT OR THE NOTES.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE COMPANY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY
LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS.
61
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO
JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE THE ADMINISTRATIVE AGENT OR
ANY LENDER FROM OBTAINING JURISDICTION OVER THE COMPANY IN ANY COURT OTHERWISE
HAVING JURISDICTION.
(C) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY
LENDER OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW
OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY
OTHER JURISDICTION.
(D) EACH OF THE COMPANY AND EACH LENDER HEREBY (I) IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III)
CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF 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 (IV) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS SECTION 12.13.
Section 12.14 Interest. It is the intention of the parties hereto that each
Lender shall conform strictly to usury laws applicable to it. Accordingly, if
the transactions contemplated hereby would be usurious as to any Lender under
laws applicable to it (including the laws of the United States of America and
the State of Texas or any other jurisdiction whose laws may be mandatorily
applicable to such Lender notwithstanding the other provisions of this
Agreement), then, in that event, notwithstanding anything to the contrary in any
of the Loan Documents or any agreement entered into in connection with or as
security for the Notes, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under law applicable to any Lender that
is contracted for, taken, reserved, charged or received by such Lender under any
of the Loan Documents or agreements or otherwise in connection with the Notes
shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be cancelled automatically and if
theretofore paid shall be credited by such Lender on the principal amount of the
Indebtedness (or, to the extent that the principal amount of the Indebtedness
shall have been or would thereby be paid in full, refunded by such Lender to the
Company);
62
and (ii) in the event that the maturity of the Notes is accelerated by reason of
an election of the holder thereof resulting from any Event of Default or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall be
cancelled automatically by such Lender as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Lender on the
principal amount of the Indebtedness (or, to the extent that the principal
amount of the Indebtedness shall have been or would thereby be paid in full,
refunded by such Lender to the Company). All sums paid or agreed to be paid to
any Lender for the use, forbearance or detention of sums due hereunder shall, to
the extent permitted by law applicable to such Lender, be amortized, prorated,
allocated and spread throughout the full term of the Loans evidenced by the
Notes until payment in full so that the rate or amount of interest on account of
any Loans hereunder does not exceed the maximum amount allowed by such
applicable law. If at any time and from time to time (i) the amount of interest
payable to any Lender on any date shall be computed at the Highest Lawful Rate
applicable to such Lender pursuant to this Section 12.14 and (ii) in respect of
any subsequent interest computation period the amount of interest otherwise
payable to such Lender would be less than the amount of interest payable to such
Lender computed at the Highest Lawful Rate applicable to such Lender, then the
amount of interest payable to such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Lender until the total amount of interest payable to such
Lender shall equal the total amount of interest which would have been payable to
such Lender if the total amount of interest had been computed without giving
effect to this Section 12.14. To the extent that Article 5069-1.04 of the Texas
Revised Civil Statutes is relevant for the purpose of determining the Highest
Lawful Rate, such Lender elects to determine the applicable rate ceiling under
such Article by the indicated weekly rate ceiling from time to time in effect.
Section 12.15 Confidentiality. In the event that the Company provides to
the Agents or the Lenders written confidential information belonging to the
Company, if the Company shall denominate such information in writing as
"confidential", the Agents and the Lenders shall thereafter maintain such
information in confidence in accordance with the standards of care and diligence
that each utilizes in maintaining its own confidential information. This
obligation of confidence shall not apply to such portions of the information
which (i) are in the public domain, (ii) hereafter become part of the public
domain without the Agents or the Lenders breaching their obligation of
confidence to the Company, (iii) are previously known by the Agents or the
Lenders from some source other than the Company, (iv) are hereafter developed by
the Agents or the Lenders without using the Company's information, (v) are
hereafter obtained by or available to the Agents or the Lenders from a third
party who owes no obligation of confidence to the Company with respect to such
information or through any other means other than through disclosure by the
Company, (vi) are disclosed with the Company's consent, (vii) must be disclosed
either pursuant to any Governmental Requirement or to Persons regulating the
activities of the Agents or the Lenders, or (viii) as may be required by law or
regulation or order of any
63
Governmental Authority in any judicial, arbitration or governmental proceeding.
Further, an Agent or a Lender may disclose any such information to any other
Lender, any Affiliate of such Agent or Lender, any independent petroleum
engineers or consultants, any independent certified public accountants, any
legal counsel employed by such Person in connection with this Agreement or any
other Loan Document, including without limitation, the enforcement or exercise
of all rights and remedies thereunder, or any assignee or participant (including
prospective assignees and participants) in the Loans; provided, however, that
such Agent or Lender imposes on the Person to whom such information is disclosed
the same obligation to maintain the confidentiality of such information as is
imposed upon it hereunder. Notwithstanding anything to the contrary provided
herein, this obligation of confidence shall cease three (3) years from the date
the information was furnished, unless the Company requests in writing at least
thirty (30) days prior to the expiration of such three year period, to maintain
the confidentiality of such information for an additional three year period. The
Company waives any and all other rights it may have to confidentiality as
against the Agents and the Lenders arising by contract, agreement, statute or
law except as expressly stated in this Section 12.15.
Section 12.16 Effectiveness. This Agreement shall not be effective until
executed by all parties hereto and delivered to and accepted by the
Administrative Agent, and the other conditions listed in the definition of
"Effective Date" have occurred.
Section 12.17 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND IS FULLY INFORMED AND HAS FULL NOTICE
AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT
HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY
ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING
THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO
AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF
ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE
BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT SUCH
PROVISION IS NOT "CONSPICUOUS."
The parties hereto have caused this Agreement to be duly executed as of the
day and year first above written.
64
ENSERCH EXPLORATION, INC.
ATTEST:
/s/ By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
------------------------------ ------------------------------------------
Assistant Corporate Secretary Name: ▇. ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
LENDER AND TEXAS COMMERCE BANK NATIONAL
ADMINISTRATIVE AGENT: ASSOCIATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
Lending Office for Base Rate Loans:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Address for Notices:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
SYNDICATION AGENT
AND LENDER: THE CHASE MANHATTAN BANK, N.A.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇.▇▇▇▇▇▇
Title: Vice President
Lending Office for Base Rate Loans:
The Chase Manhattan Bank, N.A.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
The Chase Manhattan Bank, N.A.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Address for Notices:
The Chase Manhattan Bank, N.A.
2 Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
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Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
[With copy to:]
Chase National Corporate Services, Inc.
One Houston Center
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Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
LENDER: CITIBANK, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇. ▇. ▇▇▇▇▇
Title: Vice President
Lending Office for Base Rate Loans:
Citibank, N.A.
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
Same as above
Address for Notices:
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Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
LENDER: THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Joint General Manager
Lending Office for Base Rate Loans:
The Long-Term Credit Bank of Japan,
Ltd.
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
The Long-Term Credit Bank of Japan,
Ltd.
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Addresses for Notices:
The Long-Term Credit Bank of Japan,
Ltd.
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
[With copy to:]
LENDER: BANKERS TRUST COMPANY
By: /s/ ▇▇▇▇ ▇▇ ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇▇ ▇▇▇▇▇
Title: Assistant Vice President
Lending Office for Base Rate Loans:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Addresses for Notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Loan Division, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
[With copy to:]
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Bankers Trust Company
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▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
LENDER: THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. ▇▇▇▇▇
-------------------------------------------
Name: F.C.H. ▇▇▇▇▇
Title: SENIOR MANAGER LOAN
OPERATIONS
Lending Office for Base Rate Loans:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Addresses for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
[With copy to:] (DOCUMENTS)
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ATTN: D. ▇▇▇▇ ▇▇▇▇▇▇
LENDER: CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: AUTHORIZED SIGNATORY
Lending Office for Base Rate Loans:
TWO PACES WEST
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
TWO PACES WEST
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Addresses for Notices:
TWO PACES WEST
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[With copy to:]
National Westminster Bank Plc
New York Branch
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
National Westminster Bank Plc
Nassau Branch
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Lending Office for Base Rate Loans:
National Westminister Bank Plc
New York Branch
Lending Office for Eurodollar Loans:
National Westminster Bank Plc
Nassau Branch
Addresses for Notices:
National Westminster Bank Plc
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
LENDER: The First National Bank of Chicago
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Lending Office for Base Rate Loans:
The First National Bank of Chicago
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
The First National Bank of Chicago
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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Addresses for Notices:
The First National Bank of Chicago
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
[With copy to:]
LENDER: THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Lending Office for Base Rate Loans:
The Bank of New York
One Wall Street, 19th Fl.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
The Bank of New York
One Wall Street, 19th Fl.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Addresses for Notices:
The Bank of New York
One Wall Street, 19th Fl.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
[With copy to:]
LENDER: NationsBank of Texas, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
Lending Office for Base Rate Loans:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Addresses for Notices:
Corporate Credit Services
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: 214/508-1215
Telephone No.: 214/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
[With copy to:]
LENDER: THE BANK OF TOKYO, LTD.
DALLAS AGENCY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Lending Office for Base Rate Loans:
The Bank of Tokyo, Ltd.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
The Bank of Tokyo, Ltd.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Addresses for Notices:
The Bank of Tokyo, Ltd.
909 ▇▇▇▇▇▇, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
LENDER: The Fuji Bank, Ltd.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President and Senior
Manager
Lending Office for Base Rate Loans:
The Fuji Bank, Ltd.
Houston Agency
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
The Fuji Bank, Ltd.
Houston Agency
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Addresses for Notices:
The Fuji Bank, Ltd.
Houston Agency
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
LENDER: Union Bank of Switzerland
Houston Agency
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
Lending Office for Base Rate Loans:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Addresses for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Managing
Director
With copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
LENDER: Dresdner Bank AG New York
and Grand Cayman Branches
By: /s/ ▇. ▇▇▇▇▇▇ Beaudouin
-------------------------------------------
Name: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Lending Office for Base Rate Loans:
Dresdner Bank AG, Grand Cayman Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Lending Office for Eurodollar Loans:
Dresdner Bank AG, Grand Cayman Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Addresses for Notices:
Dresdner Bank AG, Grand Cayman Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
With copy to:
Credit Department
Dresdner Bank AG, New York
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By: /s/ Xavier Ratouis
-------------------------------------------
Name: Xavier Ratouis
Title: Authorized Signature
Lending Office for Base Rate Loans:
Credit Lyonnais Cayman Island Branch
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Loan Servicing
Lending Office for Eurodollar Loans:
Credit Lyonnais Cayman Island Branch
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Loan Servicing
Addresses for Notices:
c/o Credit Lyonnais Representative
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Mr. A. ▇▇▇▇▇ ▇▇▇▇
LENDER: The Industrial Bank of Japan Trust
Company
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
Lending Office for Base Rate Loans:
The Industrial Bank of Japan Trust
Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
The Industrial Bank of Japan Trust
Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Addresses for Notices:
The Industrial Bank of Japan Trust
Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Credit Administration
[With copy to:]
LENDER: Royal Bank of Canada
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Manager
Lending Office for Base Rate Loans:
Royal Bank of Canada
1 Financial Square, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Lending Office for Eurodollar Loans:
Royal Bank of Canada
1 Financial Square, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Addresses for Notices:
Royal Bank of Canada
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇
[With copy to:]
LENDER: Westdeutsche Landesbank Girozentrale
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Lending Office for Base Rate Loans:
Westdeutsche Landesbank Girozentrale
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
Westdeutsche Landesbank Girozentrale
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Addresses for Notices:
Westdeutsche Landesbank Girozentrale
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
LENDER: Caisse Nationale de Credit Agricole
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: First Vice President and
Head of Corporate Banking
-- Chicago
Lending Office for Base Rate Loans:
Caisse Nationale de Credit Agricole ▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Lending Office for Eurodollar Loans:
Caisse Nationale de Credit Agricole ▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Addresses for Notices:
Caisse Nationale de Credit Agricole ▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: 312/372-3724
Telephone No.: 312/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
[With copy to:]
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: 312/▇▇▇-▇▇▇▇
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is among:
ENSERCH EXPLORATION, INC., a corporation formed under the laws of the State of
Texas (the "Company"); each of the Lenders (as defined in the Credit Agreement
as hereafter defined) that is a signatory hereto; THE CHASE MANHATTAN BANK, a
New York banking corporation (in its individual capacity, "Chase"), as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the "Administrative Agent"); as auction agent for
the Lenders (in such capacity, together with its successors in such capacity,
the "Auction Agent"); and as syndication agent for the Lenders (in such
capacity, together with its successors in such capacity, the "Syndication
Agent") and Citibank, N.A. a national banking association (in its individual
capacity, "Citibank") and as documentation agent for the Lenders (in such
capacity, together with its successors in such capacity, the "Documentation
Agent").
R E C I T A L S
A. The Company, the Agents, and the Lenders have entered into that
certain Credit Agreement dated as of May 1, 1995 (the "Credit Agree ment"),
pursuant to which the Lenders have agreed to make certain loans and extensions
of credit to the Company upon the terms and conditions as provided therein; and
B. The Company, the Agents, and the Lenders now desire to make
certain amendments to the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration and the mutual benefits, covenants and agreements herein
expressed, the parties hereto now agree as follows:
1. All capitalized terms used in this Amendment and not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement.
2. As used in the Agreement, the terms "Administrative Agent,"
"Auction Agent," "Citibank," "Documentation Agent" and Syndication Agent" shall
have the meaning indicated above.
3. The definitions of "Agents", "Debt" and "Principal Office" in
Section 1.02 of the Credit Agreement are hereby amended to read as follows:
"Agents" shall mean the Administrative Agent, the
Auction Agent, the Documentation Agent and the
Syndication Agent.
"Debt" shall mean, for the Company or any
Subsidiary the sum of the following (without
duplication): (i) all obligations for borrowed
money or evidenced by bonds, debentures,
mandatorily redeemable preferred stock (including
such stock of Affiliates) with maturities before
the Revolving Credit Termination Date, notes or
other similar instruments (excluding interest, fees
and charges); (ii) all obligations in respect of
bankers' acceptances, unreimbursed drawings on
letters of credit, surety or other bonds; (iii) all
Capital Lease Obligations; (iv) all Operating Lease
Obligations; (v) all financial guaranties in
respect of Debt of unconsolidated Affiliates and
unrelated Persons; (vi) all obligations secured
by a Lien on any asset, whether or not such Debt is
assumed, but excluding obligations secured by Liens
permitted by Sections 9.02(c), (e), (f), (h), (i),
(j), (k) and (l); (vii) all production payments in
connection with oil and gas properties; and (viii)
all Debt of Special Entities to the extent the
Company or any Subsidiary is liable for such Debt
under GAAP or such Debt is reflected on the
consolidated balance sheet of the Company or any
Subsidiary. "Debt" shall not include Permitted
Subordinated Debt."
"Principal Office" shall mean ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
4. The definition "Revolving Credit Termination Date" in Section 1.02
of the Credit Agreement is hereby amended to read as follows:
"Revolving Credit Termination Date" shall mean, unless the
Commitments are sooner terminated pursuant to Sections 2.03(a) or 10.02,
August 1, 2001".
5. Section 1.02 of the Credit Agreement is hereby supplemented, where
alphabetically appropriate, with the addition of the following definition:
"First Amendment" shall mean that certain First Amendment
to Credit Agreement dated as of September 16, 1996, among the
Company, the Lenders and the Agents."
6. Section 8.07 of the Credit Agreement is hereby amended to read as
follows:
"Section 8.07 Lease Payments. The Company, at its
option, may cause its obligations to Enserch Exploration
Holdings, Inc. to be subordinated to the Indebtedness on terms
substantially similar to the terms set forth on Exhibit M or on
terms and subject to documentation satisfactory to the
Administrative Agent.
7. Section 9.01 of the Credit Agreement is hereby amended to read as
follows:
"Section 9.01 Debt to Capital Ratio. The Company will
not permit its ratio ("Debt to Capital Ratio") expressed as a
percentage of (i) Debt of the Company and its Consolidated
Subsidiaries on a consolidated basis ("Consolidated Debt") to
(ii) the sum of Consolidated Debt plus Net Worth to exceed 60%
at any time; provided that in no event will Consolidated Debt
ever exceed $900,000,000."
8. Section 9.03 of the Credit Agreement is hereby amended by adding
the following sentence at the end of such Section:
"From and after the date that the Company ceases to be an
Affiliate of ENSERCH Corporation, neither the Company nor any
Subsidiary may make loans or advances to ENSERCH Corporation or
any of its subsidiaries, and any outstanding loans and advances
to ENSERCH Corporation and its subsidiaries from the Company
and its Subsidiaries on such date of disaffiliation shall be
immediately repaid."
9. Section 10.01(k) of the Credit Agreement is hereby amended to read
as follows:
"(k) any Change of Control shall occur. For purposes of
this Section 10.01(k), "Change of Control" shall mean other
than Enserch Corporation's ownership, the acquisition by any
Person, or two or more Persons acting in concert, of beneficial
ownership (within the meaning of the Securities Exchange Act
of 1934) of 35% or more of the outstanding share of voting
stock of the Company."
10. The first two sentences of Section 11.01 of the Credit Agreement
are hereby amended to read as follows:
"Each Lender hereby irrevocably appoints and authorizes Chase
as the Administrative Agent and the Auction Agent to act as its
agents hereunder and under the other Loan Documents with such
powers as are specifically delegated to the Administrative
Agent and the Auction Agent respectively by the terms of this
Agreement and the other Loan Documents, together with such
powers as reasonably incidental thereto. The Syndication Agent
and Documentation Agent, in such capacities, shall have no
duties or responsibilities and shall incur no liabilities under
the Loan Documents."
11. Attached to this Amendment is a new Annex 1 to the Credit
Agreement.
12. This Amendment shall become binding on the Lenders when, and only
when, the Administrative Agent shall have received each of the following in form
and substance satisfactory to the Administrative Agent or its counsel:
(a) counterparts of this Amendment executed by the Company, the
Agents and the Lenders;
(b) prepayment by the Company of all outstanding Loans, accrued
interest, accrued fees and other expenses due under the Credit Agreement
to September 16, 1996, including without limitation, payment of breakage
costs under Section 5.05 of the Credit Agreement in connection with this
prepayment of the Loans within 10 days of presentation of a ▇▇▇▇ by each
Lender;
(c) refunding of the Loans prepaid in clause (b) above by the
Lenders set forth on Annex 1 attached hereto in proportion to their
respective Percentage Shares, with the Administrative Agent netting such
prepayments and fundings to the extent administratively convenient;
(d) issuance of new Notes to the Lenders on Annex 1 attached
hereto, duly completed and executed;
(e) a certificate of the Secretary or an Assistant Secretary of the
Company setting forth resolutions of its board of directors with respect
to the authorization of the Company to execute, deliver and perform this
Amendment; and
(f) such other documents as it or its counsel may reasonably
request.
13. The parties hereto hereby acknowledge and agree that, except as
specifically supplemented and amended, changed or modified hereby, the Credit
Agreement shall remain in full force and effect in accordance with its terms.
14. The Company hereby reaffirms that as of the date of this Amendment,
the representations and warranties contained in Article VII of the Credit
Agreement are true and correct on the date hereof as though made on and as of
the date of this Amendment, except as such representations and warranties are
expressly limited to an earlier date.
15. THIS AMENDMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND
ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF TEXAS, OTHER THAN THE CONFLICT OF LAWS RULES THEREOF.
16. This Amendment may be executed in two or more counterparts, and it
shall not be necessary that the signatures of all parties hereto be contained on
any one counterpart hereof; each counterpart shall be deemed an original, but
all of which together shall constitute one and the same instrument.
17. The Lenders listed on Annex 1 attached hereto are for all purposes
Lenders under the Loan Documents.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of September 16, 1996.
COMPANY: ENSERCH EXPLORATION, INC.
By: /s/ ▇. ▇. ▇▇▇▇▇
Name: ▇. ▇. ▇▇▇▇▇
Title: Vice President, Finance,
and Treasurer
LENDER AND ADMINISTRATIVE AGENT, THE CHASE MANHATTAN BANK
SYNDICATION AGENT AND
AUCTION AGENT:
By: /s/ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Title: Vice President
LENDER AND DOCUMENTATION CITIBANK, N.A.
AGENT:
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
LENDERS: THE BANK OF NOVA SCOTIA
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
Name: ▇. ▇. ▇▇▇▇▇▇▇
Title: Senior Manager,
Finance & Administration
NATIONSBANK OF TEXAS, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ROYAL BANK OF CANADA
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇. ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Manager
BANKERS TRUST COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Manager
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Corporate Banking Officer
THE BANK OF NEW YORK
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Joint General Manager
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Pascal Poupelle
Name: Pascal Poupelle
Title: Senior Vice President
THE INDUSTRIAL BANK OF JAPAN TRUST
COMPANY
By: /s/ Akijiro Yoshino
Name: Akijiro Yoshino
Title: Executive Vice President
THE SANWA BANK, LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CAISSE NATIONALE DE CREDIT AGRICOLE
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Head of Corporate Banking,
Chicago
THE FUJI BANK, LTD.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President & Manager
TORONTO DOMINION (TEXAS), INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
UNION BANK OF SWITZERLAND
HOUSTON AGENCY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
DRESDNER BANK AG NEW YORK
AND GRAND CAYMAN BRANCHES
By: /s/ B. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: B. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Treasurer
BANKS THAT WILL NO LONGER BE LENDERS AS OF SEPTEMBER 16, 1996.
NATIONAL WESTMINSTER BANK PLC
NEW YORK BRANCH
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager & Vice President
NATIONAL WESTMINSTER BANK PLC
NASSAU BRANCH
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager & Vice President
WESTDEUTSCHE LANDESBANK GIROZENTRALE
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇. ▇▇▇▇▇▇
Name: ▇. ▇▇▇▇▇▇
Title: Vice President
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
ANNEX 1
LIST OF COMMITMENTS
Name of Lender Percentage Share Commitment
-------------- ---------------- ----------
1. The Chase Manhattan Bank 7.714285714% $27,000,000
2. Citibank, N.A. 7.714285714% $27,000,000
3. Bankers Trust Company 6.000000000% $21,000,000
4. The Bank of Nova Scotia 6.▇▇▇▇▇▇▇▇▇% $21,000,000
5. Canadian Imperial Bank of Commerce 6.▇▇▇▇▇▇▇▇▇% $21,000,000
6. The First National Bank of Chicago 6.000000000% $21,000,000
7. The Bank of New York 6.000000000% $21,000,000
8. NationsBank of Texas, N.A. 6.000000000% $21,000,000
9. Royal Bank of Canada 6.▇▇▇▇▇▇▇▇▇% $21,000,000
10. The Long-Term Credit Bank of
Japan, Ltd. 4.857142857% $17,000,000
11. The Bank of Tokyo-Mitsubishi, Ltd. 4.857142857% $17,000,000
12. Credit Lyonnais New York Branch 4.857142857% $17,000,000
13. The Fuji Bank, Ltd. 4.000000000% $14,000,000
14. Union Bank of Switzerland 4.000000000% $14,000,000
15. Dresdner Bank AG 4.000000000% $14,000,000
16. The Industrial Bank of Japan, 4.000000000%
Ltd., New York Branch 4.000000000% $14,000,000
17. Caisse Nationale de Credit Agricole 4.000000000% $14,000,000
18. The Sanwa Bank, Limited 4.000000000% $14,000,000
19. Toronto Dominion (Texas), Inc. 4.000000000% $14,000,000
----------- -----------
Total 100.000000000% $350,000,000