EXHIBIT 10.12
U.S. $500,000,000
AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of December 8, 1997
among
VINTAGE PETROLEUM, INC.,
as the Borrower,
and
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
and
BANK OF MONTREAL,
acting through certain U.S. branches or agencies,
as the Agent for the Lenders.
TABLE OF CONTENTS
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PAGE
I DEFINITIONS AND ACCOUNTING TERMS...................... 2
1.1. Defined Terms................................ 2
1.2. Use of Defined Terms......................... 17
1.3. Cross-References............................. 17
1.4. Accounting and Financial Determinations...... 17
II COMMITMENTS, BORROWING PROCEDURES AND NOTES............ 18
2.1. Commitments................................... 18
2.1.1. Revolving Loan Commitment..................... 18
2.1.2. Term Loan Commitment.......................... 18
2.1.3. Commitment to Issue Letters of Credit......... 18
2.1.4. Lenders Not Permitted or Required To Make
Loans or Issue or Participate in Letters
of Credit Under Certain Circumstances......... 19
2.2. Termination and Reduction of Commitment
Amounts....................................... 19
2.2.1. Optional...................................... 19
2.2.2. Mandatory as to Revolving Loans............... 19
2.2.3. Mandatory as to Term Loans.................... 20
2.3. Borrowing Procedure........................... 20
2.4. Continuation and Conversion Elections......... 20
2.5. Funding....................................... 21
2.6. Notes......................................... 21
2.7. Determination of the Borrowing Base........... 21
2.7.1. Annual Scheduled Determinations of the
Borrowing Base................................ 21
2.7.2. Semi-Annual Scheduled Determination of the
Borrowing Base................................ 22
2.7.3. Discretionary Determination of the
Borrowing Base................................ 23
2.7.4. Reduction of the Borrowing Base Upon Sales
of Oil and Gas Properties..................... 23
2.8. Letters of Credit............................. 23
2.8.1. Issuance Requests............................. 23
2.8.2. Issuances..................................... 23
2.8.3. Aggregate Amount Available Under Letters
of Credit..................................... 23
2.8.4. Other Lenders' Participation.................. 24
2.8.5. Disbursements................................. 25
2.8.6. Reimbursement................................. 25
2.8.7. Deemed Disbursements.......................... 26
2.8.8. Nature of Reimbursement Obligations........... 27
2.8.9. Increased Costs; Indemnity.................... 27
2.8.10. Letter of Credit Collateral Account........... 28
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES............. 29
3.1. Repayments and Prepayments.................... 29
3.1.1. Repayments.................................... 29
3.1.2. Mandatory Prepayments on Loans................ 29
3.1.3. Repayment Upon Acceleration................... 30
3.1.4. Voluntary Repayments.......................... 30
3.2. Interest Provisions........................... 31
3.2.1. Rates......................................... 31
3.2.2. Post-Maturity Rates........................... 32
3.2.3. Payment Dates................................. 32
3.3. Fees.......................................... 32
3.3.1. Commitment Fee................................ 32
3.3.2. Agent's Fee................................... 33
3.3.3. Letter of Credit Face Amount Fee.............. 33
IV CERTAIN LIBO RATE AND OTHER PROVISIONS................. 33
4.1. If LIBO Rate Lending Unlawful................. 33
4.2. If Deposits Unavailable....................... 33
4.3. Increased LIBO Rate Loan Costs, etc........... 34
4.4. Funding Losses................................ 34
4.5. Increased Capital Costs....................... 34
4.6. Taxes......................................... 35
4.7. Payments, Computations, etc................... 36
4.8. Sharing of Payments........................... 36
4.9. Setoff........................................ 37
4.10. Use of Proceeds............................... 37
V CONDITIONS TO BORROWING................................ 37
5.1. Continuation of Original Loans;
Initial Borrowing............................. 37
5.1.1. Resolutions, etc.............................. 38
5.1.2. Delivery of Notes............................. 38
5.1.3. [Reserved].................................... 38
5.1.4. Compliance with Representations and
Warranties.................................... 38
5.1.5. Opinions of Counsel........................... 38
5.1.6. Closing Fees, Expenses, etc................... 38
5.2. Conditions Precedent to Revolving Loans....... 38
5.2.1. Compliance with Warranties, No Default, etc... 38
5.2.2. Borrowing Request............................. 39
5.2.3. Satisfactory Legal Form....................... 39
5.3. Conditions Precedent to the Making of the
Term Loans.................................... 39
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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VI REPRESENTATIONS AND WARRANTIES......................... 40
6.1. Organization, etc............................. 40
6.2. Due Authorization, Non-Contravention, etc..... 40
6.3. Government Approval, Regulation, etc.......... 40
6.4. Validity, etc................................. 41
6.5. Financial Information......................... 41
6.6. No Material Adverse Change.................... 41
6.7. Litigation, Labor Controversies, etc.......... 41
6.8. Subsidiaries.................................. 41
6.9. Ownership of Properties....................... 41
6.10. Taxes......................................... 42
6.11. Pension and Welfare Plans..................... 42
6.12. Environmental Warranties...................... 42
6.13. Regulations G, U and X........................ 43
6.14. Accuracy of Information....................... 43
6.15. No Default.................................... 44
6.16. No Violation of Applicable Law................ 44
6.17. Permits ...................................... 44
VII COVENANTS.............................................. 45
7.1. Affirmative Covenants......................... 45
7.1.1. Financial Information, Reports,
Notices, etc.................................. 45
7.1.2. Compliance with Laws, etc..................... 46
7.1.3. Maintenance of Properties..................... 46
7.1.4. Insurance..................................... 47
7.1.5. Books and Records............................. 47
7.1.6. Environmental Covenant........................ 47
7.1.7. Employee Benefit Plans........................ 47
7.1.8. Designated Senior Indebtedness................ 48
7.2. Negative Covenants............................ 48
7.2.1. Business Activities........................... 48
7.2.2. Indebtedness.................................. 48
7.2.3. Liens......................................... 49
7.2.4. Financial Condition........................... 50
7.2.5. Take or Pay Contracts......................... 50
7.2.6. Consolidation, Merger, etc.................... 50
7.2.7. Asset Dispositions, etc....................... 51
7.2.8. Guaranties, Loans or Advances................. 51
7.2.9. Other Agreements.............................. 52
7.2.10. Transactions with Affiliates.................. 52
7.2.11. Negative Pledges, Restrictive Agreements,
etc........................................... 52
7.2.12. Investment in Subsidiaries.................... 53
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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VIII EVENTS OF DEFAULT...................................... 53
8.1. Listing of Events of Default.................. 53
8.1.1. Non-Payment of Obligations.................... 53
8.1.2. Breach of Warranty............................ 53
8.1.3. Non-Performance of Certain Covenants
and Obligations............................... 54
8.1.4. Non-Performance of Other Covenants and
Obligations................................... 54
8.1.5. Default on Other Indebtedness................. 54
8.1.6. Other Material Obligations.................... 54
8.1.7. Judgments..................................... 54
8.1.8. Pension Plans................................. 54
8.1.9. Bankruptcy, Insolvency, etc................... 55
8.1.10. Change of Control............................. 55
8.2. Action if Bankruptcy.......................... 55
8.3. Action if Other Event of Default.............. 56
IX THE AGENT.............................................. 56
9.1. Actions....................................... 56
9.2. Funding Reliance, etc......................... 57
9.3. Exculpation................................... 57
9.4. Successor..................................... 57
9.5. Loans by Bank of Montreal..................... 58
9.6. Credit Decisions.............................. 58
9.7. Copies, etc. ................................. 58
X MISCELLANEOUS PROVISIONS............................... 59
10.1. Waivers, Amendments, etc...................... 59
10.2. Notices....................................... 59
10.3. Payment of Costs and Expenses................. 60
10.4. Indemnification............................... 60
10.5. Survival...................................... 61
10.6. Severability.................................. 61
10.7. Headings...................................... 61
10.8. Execution in Counterparts, Effectiveness,
etc........................................... 61
10.9. Governing Law; Entire Agreement............... 61
10.10. Successors and Assigns........................ 62
10.11. Sale and Transfer of Loans and Notes;
Participations in Loans and Notes............. 62
10.11.1. Assignments................................... 62
10.11.2. Participations................................ 63
10.12. Other Transactions............................ 64
10.13. Sale and Purchase of Loans.................... 64
10.14. Forum Selection and Consent to Jurisdiction... 65
10.15. Waiver of Jury Trial.......................... 66
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SCHEDULE I - Disclosure Schedule*
EXHIBIT A - Form of Note
EXHIBIT B - Form of Borrowing Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Lender Assignment Agreement
EXHIBIT E-1 - Form of Opinion of Counsel to the Borrower*
EXHIBIT E-2 - Form of Opinion of Counsel to the Borrower*
EXHIBIT F-1 - Commitments*
EXHIBIT F-2 - Schedule of Outstandings and Commitments*
EXHIBIT G - Form of Issuance Request
EXHIBIT H - Exxon Properties*
---------------------
* Omitted. The Registrant agrees to furnish supplementally a copy of any
such omitted schedules or exhibits to the Securities and Exchange
Commission upon its request.
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THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 8,
1997, among VINTAGE PETROLEUM, INC., a Delaware corporation (the "Borrower"),
the various financial institutions as are or may become parties hereto
(collectively, the "Lenders"), and BANK OF MONTREAL, acting through certain of
its U.S. branches or agencies ("Bank of Montreal"), as agent (the "Agent") for
the Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower is engaged directly and through its various
Subsidiaries in the businesses of exploration for and production of oil and gas,
oil and gas gathering and marketing, and related activities; and
WHEREAS, the Borrower, various financial institutions (the "Original
Lenders") and Bank of Montreal in its capacity as Agent, heretofore entered into
a Credit Agreement dated as of August 29, 1996 (such agreement, as previously
amended, the "Original Credit Agreement") pursuant to which the lenders party to
the Original Credit Agreement agreed to make loans (therein referred to as the
"Original Loans") to the Borrower; and
WHEREAS, the Borrower would like to obtain Commitments from the Lenders
pursuant to which Revolving Loans and Term Loans, in a maximum aggregate
principal amount at any one time outstanding not to exceed the amounts
hereinafter provided, will be made to the Borrower from time to time prior to
the applicable Commitment Termination Dates for such Commitments; and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to extend such
Commitments and make such Loans to the Borrower; and
WHEREAS, the proceeds of such Loans will be used (a) for acquisitions
of oil and gas properties, gathering systems and related assets; and (b) for
general corporate purposes and working capital purposes of the Borrower and its
Subsidiaries; and
WHEREAS, certain financial institutions not previously a party to the
Original Credit Agreement intend to become a party to the credit facilities
extended to the Borrower as more fully described in the next succeeding
paragraph; and
WHEREAS, the Borrower has requested that the Lenders, and the Lenders
have agreed to, restructure, rearrange, renew, extend and refinance all
indebtedness evidenced by and outstanding under the Original Credit Agreement as
of the Effective Date (the "Prior Indebtedness") into obligations and
commitments hereunder; and
WHEREAS, as part of the restructuring and rearranging of the Prior
Indebtedness, the Lenders shall modify their respective commitments under the
Original Credit Agreement such that on the
Effective Date each Lender shall be obligated hereunder, subject to the terms
hereof, to the Commitment stated on Schedule F-1 for such Lender; and
WHEREAS, any loans outstanding under the Original Credit Agreement on
the Effective Date bearing interest at a LIBO Rate (as defined therein) shall be
deemed continued as Loans under this Agreement at such LIBO Rate and for the
Interest Period with respect thereto under the Original Credit Agreement; and
WHEREAS, the Borrower, the Lenders, and the Agent intend to amend and
restate the Original Credit Agreement in its entirety as hereinafter set forth;
and
WHEREAS, the parties hereto intend that upon the effectiveness hereof
pursuant to Article V, the Commitments, outstanding Notes, and Loans under the
Original Credit Agreement shall become Commitments, Notes, and Loans,
respectively, hereunder and interest accrued on the Loans and Commitment fees
accrued under the Original Credit Agreement through the effective date hereof
shall be deemed due and payable hereunder.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Acquisition" means any transaction, or any series of related
transactions, consummated after the date of this Agreement, by which the
Borrower or any of the Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets or otherwise or (ii) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series of
transactions) at least a controlling interest of the ownership of a Person.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power (a)
to vote 10% or more of the securities (on a fully diluted basis)
2
having ordinary voting power for the election of directors or managing general
partners; or (b) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"Agent" is defined in the preamble and includes each other Person as
shall have subsequently been appointed as the successor Agent pursuant to
Section 9.4.
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
"Alternate Base Rate" means, on any date and with respect to all Base
Rate Loans, a fluctuating rate of interest per annum equal to the higher of (a)
the rate of interest most recently announced by Bank of Montreal at its Domestic
Office as its base rate for Dollar loans made in the United States; and (b) the
Federal Funds Rate most recently determined by the Agent plus 1/2%. The
Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by Bank of Montreal in connection with extensions of credit.
Changes in the rate of interest on that portion of any Loans maintained as Base
Rate Loans will take effect simultaneously with each change in the Alternate
Base Rate. The Agent will give notice promptly to the Borrower and the Lenders
of changes in the Alternate Base Rate.
"Applicable Lenders" means, for any determination of the Borrowing
Base, Lenders (including the Agent) with an aggregate Percentage of at least
75%.
"Assignee Lender" is defined in Section 10.11.1.
"Authorized Officer" means, relative to the Borrower, those of its
officers whose signatures and incumbency shall have been certified to the Agent
and the Lenders pursuant to Section 5.1.1.
"Bank of Montreal" is defined in the preamble.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"Base Rate Applicable Margin" means (a) on any date for which it is
determined and on which the outstanding principal balance of Senior Debt,
including any Term Loans, shall be less than or equal to the Borrowing Base then
in effect, zero percent (0%); and (b) on any date on which the outstanding
principal balance of Senior Debt, including all Loans, exceeds the Borrowing
Base then in effect, one-half of one percent (.5%).
"Borrower" is defined in the preamble.
3
"Borrowing" means (i) the Loans of the same type and, in the case of
LIBO Rate Loans, having the same Interest Period made by all Lenders on the same
Business Day and pursuant to the same Borrowing Request in accordance with
Section 2.1 and (ii) Letters of Credit issued pursuant to Section 2.1.3.
"Borrowing Base" is defined in Section 2.7.1.
"Borrowing Request" means a loan request and certificate duly executed
by an Authorized Officer of the Borrower, substantially in the form of Exhibit B
hereto.
"Business Day" means (a) any day which is neither a Saturday or Sunday
nor a legal holiday on which banks are authorized or required to be closed in
Chicago, Illinois; and (b) relative to the making, continuing, prepaying or
repaying of any LIBO Rate Loans, any day described in clause (a) which is also a
day on which dealings in Dollars are carried on in the London interbank market.
"Cadipsa" means Cadipsa S.A., a Republic of Argentina corporation.
"Capital Stock" in any Person means, for purposes of the definitions of
"Voting Stock" and "Change of Control," any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than debt securities convertible into an
equity interest), warrants or options to subscribe for or to acquire an equity
interest in such Person; provided that Capital Stock of such Person shall not
include any equity security of such Person that by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable) or
otherwise (including upon the happening of any event), is or could become
required to be redeemed for cash or other property or is or could become
redeemable for cash or other property at the option of the holder thereof, in
whole or in part, or is or could become exchangeable at the option of the holder
thereof for Indebtedness at any time, in whole or in part, in each case on or
prior to the first anniversary of the Stated Maturity (as defined in the
Indenture) for the payment of principal of the Subordinated Debt permitted by
clause (p) of Section 7.2.2, but "Capital Stock" shall not exclude any equity
security by virtue of the fact that it may be converted or exchanged at the
option of the holder for Capital Stock of the Borrower having no preference as
to dividends or liquidation over any other Capital Stock of the Borrower.
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrower or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such
4
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change of Control" means the occurrence of any of the following
events: (i) any "person" or "group" (within the meaning of Sections 13(d)(3) and
14(d)(2) of the Exchange Act or any successor provision to either of the
foregoing, including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act), other than any one or more of the Permitted Holders, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of 50% or
more of the total voting power of all classes of the Voting Stock of the
Borrower and/or warrants or options to acquire such Voting Stock, calculated on
a fully diluted basis, (ii) the sale, lease, conveyance or transfer of all or
substantially all of the assets of the Borrower (other than to any Restricted
Subsidiary which is wholly-owned by the Borrower or another wholly-owned
Restricted Subsidiary) shall have occurred, (iii) the stockholders of the
Borrower shall have approved any plan of liquidation or dissolution of the
Borrower, (iv) the Borrower consolidates with or merges into another Person or
any Person consolidates with or merges into the Borrower in any such event
pursuant to a transaction in which the outstanding Voting Stock of the Borrower
is reclassified into or exchanged for cash, securities or other property, other
than any such transaction where (A) the outstanding Voting Stock of the Borrower
is reclassified into or exchanged for Voting Stock of the surviving corporation
that is Capital Stock and (B) the holders of the Voting Stock of the Borrower
immediately prior to such transaction own, directly or indirectly, not less than
a majority of the Voting Stock of the surviving corporation immediately after
such transaction in substantially the same proportion as before the transaction,
or (v) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Borrower's Board of Directors (together
with any new directors whose election or appointment by such board or whose
nomination for election by the stockholders of the Borrower was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Borrower's Board of Directors then in office. For purposes of
this definition, a wholly-owned Subsidiary means any Subsidiary all of the
Voting Stock of which (except for director's qualifying shares) is owned
directly or indirectly by the Borrower and its other wholly-owned Subsidiaries.
Nothing set forth in this definition shall be construed to permit any
transaction which is prohibited by this Agreement, including any transaction not
permitted by Section 7.2.6.
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"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, as the context may require, a Lender's Revolving
Loan Commitment or Term Loan Commitment.
"Commitment Amount" means, as the context may require, either the
Revolving Period Commitment Amount or the Term Period Commitment Amount.
"Commitment Termination Date" means, as the context may require, either
the Revolving Period Commitment Termination Date or the Term Period Commitment
Termination Date.
"Commitment Termination Event" means (a) the occurrence of any Default
described in clauses (a) through (d) of Section 8.1.9 with respect to the
Borrower or any of its Subsidiaries; or (b) the occurrence and continuance of
any other Event of Default and either (i) the declaration of the Loans to be due
and payable pursuant to Section 8.3 or the demand by an Issuer that the Borrower
deliver cash collateral pursuant to Section 2.8.7, or (ii) in the absence of
such declaration or demand, the giving of notice by the Agent, acting at the
direction of the Required Lenders, to the Borrower that the Commitments have
been terminated.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount (or maximum principal amount, if larger) of the debt,
obligation or other liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continua tion or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"Current Ratio" means the ratio of (a) consolidated current assets of
the Borrower and its Subsidiaries to (b) consolidated
6
current liabilities (excluding the current portion of Senior Debt) of the
Borrower and its Subsidiaries. For purposes of the definition of "Current
Ratio", any unused portion of the Revolving Period Commitment Amount is deemed
to be a current asset of the Borrower.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Disbursement" is defined in Section 2.8.5.
"Disbursement Date" is defined in Section 2.8.5.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Agent and the Required
Lenders.
"Documentary Letter of Credit" means a letter of credit which is a
short term, self-liquidating trade-related contingency.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means, relative to any Lender, the office of such
Lender designated as such below its signature hereto or designated in the Lender
Assignment Agreement, or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by notice from such Lender, as the case may be, to each other Person
party hereto.
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 10.8.
"Environmental Laws" means all applicable Argentina, U.S. federal, or
state or local statutes, laws, ordinances, codes, rules and regulations
(including consent decrees and administrative orders) relating to public health
and safety and protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"Event of Default" is defined in Section 8.1.
"Exchange Act" means the United States Securities Exchange Act of 1934
and any successor statute thereto, in each case as amended from time to time.
7
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to (a) the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York; or (b) if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by Bank of Montreal from three federal funds brokers
of recognized standing selected by it.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on December 31st; references to a Fiscal Year with a number corresponding
to any calendar year (e.g., the "1996 Fiscal Year") refer to the Fiscal Year
ending on December 31st, occurring during such calendar year.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in Section 1.4.
"Hazardous Material" means (a) any "hazardous substance", as defined by
CERCLA; (b) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act, as amended; (c) any petroleum product; or (d) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material or substance
within the meaning of any other applicable Argentina, U.S. federal, or state or
local law, regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or material, all
as amended or hereafter amended.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest rate
cap agreements and interest rate collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates, currency exchange rates or commodity prices.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of the Borrower, any qualification or exception to such opinion or certification
(a) which is of a "going concern"
8
or similar nature; (b) which relates to the limited scope of examination of
matters relevant to such financial statement; or (c) which relates to the
treatment or classification of any item in such financial statement and which,
as a condition to its removal, would require an adjustment to such item the
effect of which would be to cause the Borrower to be in default of any of its
obligations under Section 7.2.4.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication: (a) all
obligations of such Person for borrowed money and all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (b) all
obligations, contingent or otherwise, relative to the face amount of all letters
of credit, whether or not drawn, and banker's acceptances issued for the account
of such Person; (c) all obligations of such Person as lessee under leases which
have been or should be, in accordance with GAAP, recorded as Capitalized Lease
Liabilities; (d) all other items which, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of such
Person as of the date at which Indebtedness is to be determined; (e) net
liabilities of such Person under all Hedging Obligations; (f) whether or not so
included as liabilities in accordance with GAAP, all obligations of such Person
to pay the deferred purchase price of property or services, and indebtedness
(excluding prepaid interest thereon) secured by a Lien on property owned or
being purchased by such Person (including indebtedness arising under conditional
sales or other title retention agreements), whether or not such indebtedness
shall have been assumed by such Person or is limited in recourse; and (g) all
Contingent Liabilities of such Person in respect of any of the foregoing. For
all purposes of this Agreement, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer.
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Indenture" means that certain Indenture of the Borrower to Chemical
Bank as Trustee entered into with respect to the Subordinated Debt permitted by
clause (p) of Section 7.2.2, as such Indenture may from time to time be amended,
supplemented or otherwise modified.
"Interest Period" means, relative to any LIBO Rate Loans, the period
beginning on (and including) the date on which such LIBO
9
Rate Loan is made or continued as, or converted into, a LIBO Rate Loan pursuant
to Section 2.3 or 2.4 and shall end on (but exclude) the day which numerically
corresponds to such date one, two, three or six months thereafter (or, if such
month has no numerically corresponding day, on the last Business Day of such
month), in either case as the Borrower may select in its relevant notice
pursuant to Section 2.3 or 2.4; provided, however, that (a) the Borrower shall
not be permitted to select Interest Periods to be in effect at any one time
which have expiration dates occurring on more than five different dates; (b)
Interest Periods commencing on the same date for Loans comprising part of the
same Borrowing shall be of the same duration; (c) if such Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
end on the next following Business Day (unless such next following Business Day
is the first Business Day of a calendar month, in which case such Interest
Period shall end on the Business Day next preceding such numerically
corresponding day); and (d) no Interest Period for a Revolving Loan may end
later than the date six months after the Revolving Period Commitment Termination
Date, and no Interest Period for a Term Loan may end after the Stated Maturity
Date for Term Loans.
"Interests" is defined in Section 10.13.
"Issuance Request" means a request and certificate duly executed by the
chief executive, accounting, or financial Authorized Officer of the Borrower,
substantially in the form of Exhibit G attached hereto (with such changes
thereto as may be agreed from time to time by the Agent and the Borrower).
"Issuer" means any affiliate, unit or agency of Bank of Montreal or any
other Lender which has agreed to issue one or more Letters of Credit at the
request of the Borrower.
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit D hereto.
"Lenders" is defined in the preamble.
"Letter of Credit" is defined in Section 2.8.1.
"Letter of Credit Applicable Margin" means (a) on any date for which it
is determined prior to the Revolving Period Commitment Termination Date and on
which the ratio (expressed as a percentage) of the outstanding principal of
Senior Debt, including any Revolving Loans outstanding, to the Borrowing Base
then in effect shall equal those ratios set forth below, the percentage set
forth opposite such ratio:
10
Ratio of Senior Debt Letter of Credit
to Borrowing Base Applicable Margin
-------------------- -----------------
Greater than 75% 1.00%
Greater than 60% and less than or
equal to 75% .750%
Greater than 40% and less than or
equal to 60% .625%
Less than or equal to 40% .550%
(b) on any date for which it is determined on or after the Revolving Period
Commitment Termination Date and on which the outstanding principal balance of
Senior Debt, including any Term Loans, shall be less than or equal to the
Borrowing Base then in effect, one percent (1%); and (c) on any date on which
the aggregate outstanding principal balance of Senior Debt, including all Loans,
exceeds the Borrowing Base then in effect, one and one-half percent (1.5%).
Changes in the Letter of Credit Applicable Margin shall occur automatically with
a change in such ratio of the Senior Debt to the Borrowing Base.
"Letter of Credit Collateral Account" is defined in Section 2.8.10.
"Letter of Credit Commitment" means, relative to any Lender, such
Lender's obligation to issue (in the case of an Issuer) or participate in (in
the case of all Lenders) Letters of Credit pursuant to Section 2.1.3.
"Letter of Credit Outstandings" means, at any time, an amount equal to
the sum of (a) the aggregate face amount at such time of all Letters of Credit
then outstanding and undrawn (as such aggregate face amount shall be adjusted,
from time to time, as a result of drawings, the issuance of Letters of Credit,
or otherwise), plus (b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"Letter of Credit Sublimit" is defined in Section 2.8.3.
"LIBO Rate" is defined in Section 3.2.1.
"LIBO Rate Applicable Margin" means (a) on any date for which it is
determined prior to the Revolving Period Commitment Termination Date and on
which the ratio (expressed as a percentage) of the outstanding principal of
Senior Debt, including any Revolving Loans outstanding, to the Borrowing Base
then in effect shall equal those ratios set forth below, the percentage set
forth opposite such ratio:
Ratio of Senior Debt LIBO Rate
to Borrowing Base Applicable Margin
-------------------- -----------------
11
Greater than 75% 1.00%
Greater than 60% and less than or
equal to 75% .750%
Greater than 40% and less than or
equal to 60% .625%
Less than or equal to 40% .550%
(b) on any date for which it is determined on or after the Revolving Period
Commitment Termination Date and on which the outstanding principal balance of
Senior Debt, including any Term Loans, shall be less than or equal to the
Borrowing Base then in effect, one percent (1%); and (c) on any date on which
the aggregate outstanding principal balance of Senior Debt, including all Loans,
exceeds the Borrowing Base then in effect, one and one-half percent (1.5%).
Changes in the LIBO Rate Applicable Margin shall occur automatically with a
change in such ratio of the Senior Debt to the Borrowing Base.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" is defined in Section 3.2.1.
"LIBOR Office" means, relative to any Lender, the office of such Lender
designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender as designated from time to
time by notice from such Lender to the Borrower and the Agent, whether or not
outside the United States, which shall be making or maintaining LIBO Rate Loans
of such Lender hereunder.
"LIBOR Reserve Percentage" is defined in Section 3.2.1.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Loan" means, as the context may require, either a Revolving Loan or a
Term Loan of either type.
"Loan Document" means this Agreement, the Notes, each Issuance Request
and each other document or instrument executed and delivered in connection with
this Agreement, the Notes and the Letters of Credit.
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"Maximum Commitment Amount" means an amount equal to $500,000,000.
"Non-Recourse Indebtedness" shall mean any Indebtedness of the Borrower
and its Subsidiaries with respect to which the holder thereof agrees that (i)
the Borrower and its Subsidiaries are not personally liable and (ii) such holder
may require payment only to the extent specifically identified properties of the
Borrower and its Subsidiaries are available to provide therefor, such matters to
be set forth in an agreement or other instrument in form and substance
reasonably satisfactory to the Required Lenders, and shall include such
Indebtedness of partnerships and joint ventures with respect to which the
Borrower or any of its Subsidiaries is a partner or joint venturer which is
identified in Item 7.2.2(c) ("Ongoing Indebtedness") of the Disclosure Schedule.
"Note" means a promissory note of the Borrower payable to any Lender,
in the form of Exhibit A hereto (as such promissory note may be amended,
endorsed or otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from outstanding Loans,
and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"Obligations" means all obligations (monetary or otherwise) of the
Borrower arising under or in connection with this Agreement, the Notes, the
Letters of Credit and each other Loan Document.
"Oil and Gas Properties" means oil, gas and other liquid or gaseous
hydrocarbon properties and interests of the Borrower and its Subsidiaries,
whether now owned or hereafter acquired, located in the United States or
Argentina.
"Organic Document" means, relative to the Borrower, its certificate of
incorporation, its by-laws and all shareholder agreements, voting trusts and
similar arrangements applicable to any of its authorized shares of capital
stock.
"Original Credit Agreement" is defined in the second recital.
"Original Lenders" is defined in the second recital.
"Original Loans" is defined in the second recital.
"Other Letter of Credit" means a Documentary Letter of Credit or a
Standby Letter of Credit or similar instrument for which the Borrower or one or
more of its Subsidiaries is liable and which is not issued pursuant to this
Agreement.
"Participant" is defined in Section 10.11.2.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
13
"Pension Plan" means a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which the
Borrower or any corporation, trade or business that is, along with the Borrower,
a member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under section 4069 of ERISA.
"Percentage" means, relative to any Lender, the percentage set forth
opposite the name of such Lender in Exhibit F-1 to this Agreement as such
percentage may be adjusted from time to time pursuant to Lender Assignment
Agreements executed by a Lender and its Assignee Lenders and delivered pursuant
to Section 10.11.
"Permitted Designee" means (i) a spouse or a child of a Permitted
Holder, (ii) trusts for the benefit of a Permitted Holder or a spouse or child
of a Permitted Holder, (iii) in the event of the death or incompetence of a
Permitted Holder, his estate, heirs, executor, administrator, committee or other
personal representative, or (iv) any Person so long as a Permitted Holder owns
at least 51% of the voting power of all classes of the Voting Stock of such
Person.
"Permitted Holders" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇., Jo ▇▇▇
▇▇▇▇▇, S. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and their Permitted
Designees.
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity, whether
acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Quarterly Payment Date" means the first day of each March, June,
September and December or, if any such day is not a Business Day, the next
succeeding Business Day.
"Reimbursement Obligations" is defined in Section 2.8.6.
"Release" means a "release", as such term is defined in CERCLA.
"Required Lenders" means, at any time, Lenders (including the Agent)
holding at least 66-2/3% of the then aggregate outstanding principal amount of
the Notes then held by the Lenders, or, if no such principal amount is then
outstanding, Lenders (including the Agent) having at least 66-2/3% of the
Commitments.
14
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as in effect
from time to time.
"Restricted Subsidiary" means any Subsidiary of the Borrower that has
not been designated an "Unrestricted Subsidiary" pursuant to the Indenture.
"Revolving Loan" is defined in Section 2.1.1.
"Revolving Loan Commitment" is defined in Section 2.1.1.
"Revolving Period Commitment Amount" means, on any date, the lowest of
(i) the Borrowing Base then in effect, (ii) the Maximum Commitment Amount, as
such amount may be reduced from time to time pursuant to Section 2.2 and (iii)
the amount (not less than the then outstanding principal amount of the Loans)
from time to time designated by the Borrower in writing to the Agent provided
that the Borrower will not designate an amount pursuant to this clause (iii)
which is an increase over the then Revolving Period Commitment Amount without
the consent of Lenders with an aggregate Percentage of at least 75%.
"Revolving Period Commitment Termination Date" means the earliest of
(a) December 1, 2000; (b) the date on which the Revolving Period Commitment
Amount is terminated in full or reduced to zero pursuant to Section 2.2; and (c)
the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (b) or (c), the Revolving
Loan Commitments shall terminate automatically and without any further action.
"Senior Debt" means all Indebtedness for borrowed money (including the
Loans under this Agreement) and all obligations, contingent or otherwise,
relative to the face amount of all Letters of Credit and Other Letters of
Credit, whether or not drawn, of the Borrower and its Subsidiaries other than
Subordinated Debt, Non-Recourse Indebtedness, Indebtedness of any Subject
Subsidiary and any Contingent Liability of the Borrower permitted by clause (n)
of Section 7.2.2.
"Standby Letter of Credit" means a letter of credit (other than a
Documentary Letter of Credit).
"Stated Amount" of each Letter of Credit and each Other Letter of
Credit means, on any date for which it is determined, the face amount of such
Letter of Credit or Other Letter of Credit as is in effect on such date.
"Stated Expiry Date" is defined in Section 2.8.1.
15
"Stated Maturity Date" means (a) in the case of any Revolving Loan,
December 1, 2000; and (b) in the case of any Term Loan, December 1, 2003.
"Subject Subsidiary" means Cadipsa, or any Subsidiary designated by the
Borrower and approved by the Applicable Lenders; such Subsidiaries are sometimes
collectively called herein the "Subject Subsidiaries."
"Subordinated Debt" means all unsecured Indebtedness of the Borrower
for money borrowed which is subordinated, upon terms satisfactory to the Agent
and the Required Lenders, in right of payment to the payment in full in cash of
all Obligations, and includes Borrower's $150,000,000 Senior Subordinated Notes
Due 2005 and Borrower's $100,000,000 Senior Subordinated Notes Due 2009.
"Subsidiary" means, with respect to any Person, any corporation of
which more than 50% of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person, by such
Person and one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person provided that, notwithstanding the foregoing,
Subsidiaries of the Borrower shall not include, for the purposes of Article VI
(except Sections 6.7 and 6.8), Section 7.1 (except for the purposes of
consolidated financial statements delivered pursuant to Section 7.1.1) and
Article VIII and the definitions referred to therein, the Subject Subsidiaries.
"Tangible Net Worth" means the consolidated net worth of the Borrower
and its Subsidiaries after subtracting therefrom the aggregate amount of any
intangible assets of the Borrower and its Subsidiaries, including goodwill,
franchises, licenses, patents, trademarks, trade names, copyrights, service
marks and brand names.
"Taxes" is defined in Section 4.6.
"Term Loan" is defined in Section 2.1.2.
"Term Loan Commitment" is defined in Section 2.1.2.
"Term Period Commitment Amount" means the least of (i) the aggregate
principal amount of all Revolving Loans outstanding to all Lenders plus all
Letter of Credit Outstandings as of the Revolving Period Commitment Termination
Date, (ii) the Commitment Amount in effect with respect to Revolving Loans plus
all Letter of Credit Outstandings as of the Revolving Period Commitment
Termination Date, or (iii) the Borrowing Base in effect as of the Revolving
Period Commitment Termination Date minus the outstanding principal amount of all
Senior Debt other than the Loans and all Letter of Credit Outstandings.
16
"Term Period Commitment Termination Date" means the earlier of (a) the
Business Day after the Stated Maturity Date of the Revolving Loans; and (b) the
date on which any Commitment Termination Event occurs. Upon the occurrence of
any event described in clause (b), the Term Loan Commitments shall terminate
automatically and without any further action.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"United States" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Welfare Plan" means a "welfare plan", as such term is defined in
section 3(1) of ERISA.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each Note, Issuance Request, Borrowing Request, Continuation/Conversion Notice,
Loan Document, notice and other communication delivered from time to time in
connection with this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references
in this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under Section 7.2.4) shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be prepared,
in accordance with those generally accepted accounting principles ("GAAP")
applied in the preparation of the financial statements referred to in Section
6.5.
17
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1. Commitments. On the terms and subject to the conditions of
this Agreement (including Article V), each Lender severally agrees to make Loans
and issue or participate in Letters of Credit pursuant to the Commitments
described in this Section 2.1.
SECTION 2.1.1. Revolving Loan Commitment. From time to time on any
Business Day occurring prior to the Revolving Period Commitment Termination
Date, each Lender will make Loans (relative to such Lender, its "Revolving
Loans") to the Borrower equal to such Lender's Percentage of the aggregate
amount of the Borrowing of Revolving Loans requested by the Borrower to be made
on such day. The Commitment of each Lender described in this Section 2.1.1 is
herein referred to as its "Revolving Loan Commitment". On the terms and subject
to the conditions hereof, the Borrower may from time to time borrow, prepay and
reborrow Revolving Loans.
SECTION 2.1.2. Term Loan Commitment. On the Revolving Period Commitment
Termination Date (unless such date shall occur as a result of clause (c) of the
definition thereof), each Lender will make one term loan (relative to such
Lender, its "Term Loan") to the Borrower equal to the lesser of its Revolving
Loan and its Percentage of the Term Period Commitment Amount. The Commitment of
each Lender described in this Section 2.1.2 is herein referred to as its "Term
Loan Commitment". No amounts paid or prepaid with respect to the Term Loans may
be reborrowed. LIBO Rate Loans for which the Interest Period shall not have
terminated as of the Revolving Period Commitment Termination Date shall be
continued as LIBO Rate Loans for the applicable Interest Period and Base Rate
Loans shall be continued as Base Rate Loans after the Revolving Period
Commitment Termination Date, unless the Borrower shall have elected otherwise by
delivery of a Continuation/Conversion Notice pursuant to Section 2.4; provided
that such LIBO Rate Loans which shall have converted to Term Loans shall be in a
minimum amount of $5,000,000 and an integral multiple of $1,000,000. Any
principal repayments received on the Revolving Period Commitment Termination
Date for Revolving Loans not converted into Term Loans shall be applied first to
Base Rate Loans and, after Base Rate Loans have been paid in full, to LIBO Rate
Loans, unless the Borrower shall have otherwise instructed the Agent in writing.
Upon a Lender making such Term Loan, its Term Loan Commitment shall terminate
and it shall have no further Commitment to make Loans.
SECTION 2.1.3. Commitment to Issue Letters of Credit. From time to time
on any Business Day prior to the Revolving Period Commitment Termination Date,
each Issuer will issue, and each Lender will participate in, to the extent of
each Lender's Percentage, the Letters of Credit, in accordance with the terms of
Section 2.8.
18
SECTION 2.1.4. Lenders Not Permitted or Required To Make Loans or Issue
or Participate in Letters of Credit Under Certain Circumstances. No Lender shall
be permitted or required to (A) continue any Original Loan as a Loan hereunder
or to make any Revolving Loan if, after giving effect thereto (i) (a) the
aggregate outstanding principal amount of all Revolving Loans of all Lenders,
plus all Letter of Credit Outstandings would exceed the Revolving Period
Commitment Amount or (b) the Senior Debt would exceed the Borrowing Base then in
effect or (ii) the aggregate outstanding principal amount of all Loans of such
Lender, together with its Percentage of all Letter of Credit Outstandings, would
exceed such Lender's Percentage of the Revolving Period Commitment Amount; (B)
issue (in the case of any Issuer) or participate in (in the case of each Lender)
any Letter of Credit if, after giving effect thereto (i) (a) all Letter of
Credit Outstandings plus the aggregate outstanding principal amount of all Loans
of all Lenders would exceed the Revolving Period Commitment Amount, (b) the
Senior Debt would exceed the Borrowing Base then in effect, or (c) all Letter of
Credit Outstandings plus the aggregate Stated Amount of all Other Letters of
Credit would exceed the Letter of Credit Sublimit or (ii) such Lender's
Percentage of all Letter of Credit Outstandings together with the aggregate
outstanding principal amount of all Loans of such Lender would exceed such
Lender's Percentage of the Revolving Period Commitment Amount; or (d) make any
Term Loan if, after giving effect thereto (i) the aggregate original principal
amount of all Term Loans would exceed the Term Period Commitment Amount or (ii)
the Term Loans of such Lender would exceed such Lender's Percentage of the Term
Period Commitment Amount.
SECTION 2.2. Termination and Reduction of Commitment Amounts. Each of
the Commitment Amounts is subject to reduction from time to time pursuant to
this Section 2.2.
SECTION 2.2.1. Optional. The Borrower may, from time to time on any
Business Day occurring after the time of the initial Borrowing hereunder,
voluntarily reduce the amount of either Commitment Amount; provided, however,
that all such reductions shall require at least three Business Days' prior
notice to the Agent and be permanent, and any partial reduction of any
Commitment Amount shall be in a minimum amount of $1,000,000 and in an integral
multiple of $1,000,000.
SECTION 2.2.2. Mandatory as to Revolving Loans. The Revolving Period
Commitment Amount shall be reduced or terminated as described below:
(a) Each Lender's Revolving Loan Commitment shall be
automatically terminated on the Revolving Period Commitment Termination
Date.
(b) Each reduction in the Revolving Period Commitment Amount
shall be made ratably among the Lenders in accordance with their
respective Percentages. The Borrower shall pay to
19
the Agent for the account of the Lenders, on the date of each
termination or voluntary reduction, the Commitment Fees accrued
pursuant to Section 3.3.1 on the amount of Commitments so terminated or
reduced through the date of such termination or reduction.
SECTION 2.2.3. Mandatory as to Term Loans. The Term Period Commitment
Amount shall be reduced or terminated as described below:
(a) Each Lender's Term Loan Commitment shall be automatically
terminated on the Term Period Commitment Termination Date.
(b) Each reduction in the Term Period Commitment Amount
hereunder shall be made ratably among the Lenders in accordance with
their respective Percentages.
SECTION 2.3. Borrowing Procedure. The Borrower may from time to time
irrevocably request that a Borrowing be made in (a) for Base Rate Loans, a
minimum amount of $300,000 and integral multiple of $100,000, (b) for LIBO Rate
Loans a minimum amount of $5,000,000 and an integral multiple of $1,000,000, or
(c) in the case of Revolving Loans, in the unused amount of the Revolving Period
Commitment Amount. Such request shall be made by delivering a Borrowing Request
to the Agent on or before 11:00 a.m. U.S. Central time, (x) on the Business Day
of such Borrowing in the case of a Base Rate Borrowing and (y) on a Business Day
not less than three nor more than five Business Days in advance of a LIBO Rate
Borrowing. On the terms and subject to the conditions of this Agreement, each
Borrowing shall be comprised of the type of Loans, and shall be made on the
Business Day, specified in such Borrowing Request. On or before 12:00 Noon (U.S.
Central time) on such Business Day each Lender shall deposit with the Agent same
day funds in an amount equal to such Lender's Percentage of the requested
Borrowing. Such deposit will be made to an account which the Agent shall specify
from time to time by notice to the Lenders. To the extent funds are received
from the Lenders, the Agent shall make such funds available to the Borrower by
wire transfer to the accounts the Borrower shall have specified in its Borrowing
Request. No Lender's obligation to make any Loan shall be affected by any other
Lender's failure to make any Loan.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Agent on or before 11:00 a.m., U.S.
Central time, on a Business Day, the Borrower may from time to time irrevocably
elect, on not less than three nor more than five Business Days' notice that all,
or any portion in an aggregate minimum amount of $5,000,000 and an integral
multiple of $1,000,000, of any Loans be, in the case of Base Rate Loans,
converted into LIBO Rate Loans or, in the case of LIBO Rate Loans, converted
into a Base Rate Loan or continued as a LIBO Rate Loan (in the absence of
delivery of a Continuation/Conversion Notice with respect to any LIBO Rate Loan
at least three
20
Business Days before the last day of the then current Interest Period with
respect thereto, such LIBO Rate Loan shall, on such last day, automatically
convert to a Base Rate Loan); provided, however, that (a) each such conversion
or continuation shall be pro rated among the applicable outstanding Loans of all
Lenders, and (b) no portion of the outstanding principal amount of any Loans may
be continued as, or be converted into, LIBO Rate Loans when any Default has
occurred and is continuing.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of the Borrower to repay such
LIBO Rate Loan shall nevertheless be to such Lender for the account of such
foreign branch, Affiliate or international banking facility. In addition, the
Borrower hereby consents and agrees that, for purposes of any determination to
be made for purposes of Sections 4.1, 4.2, 4.3 or 4.4, it shall be conclusively
assumed that each Lender elected to fund all LIBO Rate Loans by purchasing
Dollar deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.6. Notes. Each Lender's Loans under its Commitment shall be
evidenced by a Note payable to the order of such Lender in a maximum principal
amount equal to such Lender's Percentage of the original Maximum Commitment
Amount. The Borrower hereby irrevocably authorizes each Lender to make (or cause
to be made) appropriate notations on the grid attached to such Lender's Notes
(or on any continuation of such grid), which notations, if made, shall evidence,
inter alia, the date of, the outstanding principal of, and the interest rate and
Interest Period applicable to the Loans evidenced thereby. Such notations shall
be conclusive and binding on the Borrower absent manifest error; provided,
however, that the failure of any Lender to make any such notations shall not
limit or otherwise affect any Obligations of the Borrower.
SECTION 2.7. Determination of the Borrowing Base. During the period
from the date hereof to the date of the first determination of the Borrowing
Base pursuant to the further provisions of this Section 2.7., the amount of the
Borrowing Base shall be $450,000,000.
SECTION 2.7.1. Annual Scheduled Determinations of the Borrowing Base.
Promptly after December 31 of each calendar year commencing December 31, 1997,
and in any event prior to April 1 of the following calendar year, the Borrower
shall furnish to the Agent and each Lender a report in form and substance
satisfactory to the Agent, prepared or audited by Netherland, ▇▇▇▇▇▇ and
Associates, Inc. or such other engineering firm as may be selected by the
Borrower with the prior approval of the Required Lenders, which report shall be
dated as of December 31st of such calendar year and
21
shall set forth the proven and producing oil and gas reserves attributable to
the Oil and Gas Properties and a projection of the rate of production and net
operating income with respect thereto, as of such date, and a projection of the
rate of production and net operating income with respect thereto, as of such
date. Upon receipt of such report relating to the Oil and Gas Properties, the
Agent shall make a determination within 25 days of the receipt of such report of
the amount of Senior Debt which the Borrower may maintain (herein as determined
and redetermined from time to time and in effect on any date called the
"Borrowing Base") on account of such reserves as of such December 31st, subject
to the approval of the Applicable Lenders as provided in this Section, and upon
such determination the Agent shall promptly notify the Lenders in writing of its
determination of the Borrowing Base. The determination of the Borrowing Base
made by the Agent shall be so made by the Agent in the exercise of its sole
discretion in accordance with the Agent's customary practices and standards for
oil and gas loans. The Applicable Lenders may approve the Agent's determination
of the Borrowing Base by written notice to the Agent within 10 days of the
Agent's notification of its determination of the new Borrowing Base. If the
Applicable Lenders fail to approve the determination of the Borrowing Base made
by the Agent hereunder within such 10 days then, within an additional 5 days,
the Applicable Lenders in their sole discretion shall determine the Borrowing
Base in accordance with their respective customary practices and standards for
oil and gas loans.
SECTION 2.7.2. Semi-Annual Scheduled Determination of the Borrowing
Base. In addition, within ninety (90) days after each June 30 (commencing June
30, 1998) the Borrower will make available for review by the Agent monthly
production data for each property included within the Oil and Gas Properties for
the six (6) month period preceding such date together with the Borrower's
projection of the rate of production and net operating income for such
properties (in the aggregate). Also to be made available are the reserves,
projected rate of income and net operating income on (i) any Oil and Gas
Properties which were developed by the Borrower subsequent to the preceding
December 31 and which are to be included in the Borrowing Base. Upon the receipt
of a report relating to the Oil and Gas Properties, the Agent shall make a
determination within 25 days of the receipt of such report of the Borrowing Base
as of the preceding June 30. The determinations of the Borrowing Base shall be
made in the same manner and be subject to the same approvals as prescribed above
with respect to the annual review, and likewise the Agent shall communicate the
results of each such determination to the Lenders. The Applicable Lenders may
approve the determination of the Borrowing Base by written notice to the Agent
within 10 days of the giving of notice of the determination by the Agent to such
Lenders and the Agent will thereupon notify the Borrower of the Borrowing Base
approved by the Applicable Lenders. If the Applicable Lenders fail to approve a
determination of the Borrowing Base made by the Agent pursuant to this Section
2.7.2 within such 10 days, then the Applicable Lenders shall, within an
additional 5 days, make a determination of the Borrowing
22
Base based on their sole discretion in accordance with their respective
customary practices and standards for oil and gas loans.
SECTION 2.7.3. Discretionary Determination of the Borrowing Base. If,
in addition to the foregoing scheduled annual and semi-annual determinations of
the Borrowing Base, the Lenders (or the Applicable Lenders) shall be requested
by the Borrower to redetermine the Borrowing Base, in their sole discretion
based on their respective customary practices and standards for oil and gas
loans, then the Borrower shall pay to the Agent a fee of $25,000 and to each
Lender (other than the Agent) a fee of $12,500 in connection with such
redetermination.
SECTION 2.7.4. Reduction of the Borrowing Base Upon Sales of Oil and
Gas Properties. In the event of a sale, transfer, lease, contribution or other
conveyance of an Oil and Gas Property as permitted pursuant to Section 7.2.7,
the Borrowing Base may be automatically reduced by an amount to be determined by
the Agent with the approval of the Applicable Lenders in accordance with their
respective customary standards for oil and gas loans on account of such sale,
transfer, assignment, lease, contribution or other conveyance.
SECTION 2.8. Letters of Credit.
SECTION 2.8.1. Issuance Requests. By delivering to the Agent and the
applicable Issuer an Issuance Request on or before 11:30 a.m. (U.S. Central
time), the Borrower may request, from time to time prior to the Revolving Period
Commitment Termination Date and on not less than three nor more than ten
Business Days' notice, that such Issuer issue an irrevocable Standby Letter of
Credit or Documentary Letter of Credit in such form as may be mutually agreed to
by the Borrower and such Issuer (each a "Letter of Credit"), in support of
obligations of the Borrower incurred in the Borrower's ordinary course of
business and which are described in such Issuance Request. Upon receipt of an
Issuance Request, the Agent shall promptly notify the Lenders thereof. Each
Letter of Credit shall by its terms be stated to expire on a date (its "Stated
Expiry Date") no later than five Business Days before the Stated Maturity Date
of any Term Loan.
SECTION 2.8.2. Issuances. On the terms and subject to the conditions of
this Agreement (including Article V), the Issuer shall issue Letters of Credit
in accordance with the Issuance Requests made therefor. Each Issuer will make
available the original of each Letter of Credit which it issues in accordance
with the Issuance Request therefor to the beneficiary thereof (and will promptly
provide each of the Lenders and the Borrower with a copy of such Letter of
Credit). The Borrower will provide the Agent with a copy of each Other Letter of
Credit on the day such Other Letter of Credit is issued.
SECTION 2.8.3. Aggregate Amount Available Under Letters of Credit. The
aggregate Stated Amount of all Letters of Credit
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outstanding at any one time shall not exceed the amount equal to $125,000,000
(the "Letter of Credit Sublimit") minus the aggregate Stated Amount of all Other
Letters of Credit and after issuance of any Letter of Credit, the aggregate
Letter of Credit Outstandings of all Letters of Credit plus the Stated Amount of
all Other Letters of Credit plus the aggregate principal amount of outstanding
Loans shall not exceed the Commitment Amount.
SECTION 2.8.4. Other Lenders' Participation. Each Letter of Credit
issued pursuant to Section 2.8.2 shall, effective upon its issuance and without
further action, be issued on behalf of all Lenders (including the Issuer
thereof) pro rata according to their respective Percentages. Each Lender shall,
to the extent of its Percentage, be deemed irrevocably to have participated in
the issuance of such Letter of Credit and shall be responsible to reimburse
promptly the Issuer thereof for Reimbursement Obligations which have not been
reimbursed by the Borrower in accordance with Section 2.8.5, or which have been
reimbursed by the Borrower but must be returned, restored or disgorged by such
Issuer for any reason, and each Lender shall, to the extent of its Percentage,
be entitled to receive from the Agent a ratable portion of the letter of credit
fees received by the Agent pursuant to Section 3.3.3, with respect to each
Letter of Credit. In the event that the Borrower shall fail to reimburse any
Issuer, or if for any reason Revolving Loans shall not be made to fund any
Reimbursement Obligation, all as provided in Section 2.8.5 and in an amount
equal to the amount of any drawing honored by such Issuer under a Letter of
Credit issued by it, or in the event such Issuer must for any reason return or
disgorge such reimbursement, such Issuer shall promptly notify each Lender of
the unreimbursed amount of such drawing and of such Lender's respective
participation therein. Each Lender shall make available to such Issuer, whether
or not any Default shall have occurred and be continuing, an amount equal to its
respective participation in same day or immediately available funds at the
office of such Issuer specified in such notice if the Issuer shall notify the
Agent on or before 11:30 a.m. (U.S. Central time) of any Business Day by the
close of business on such Business Day or if the Issuer shall notify the Agent
after 11:30 a.m. (U.S. Central time) of any Business Day not later than 11:30
a.m. (U.S. Central time) on the Business Day (under the laws of the jurisdiction
of such Issuer) after the date notified by such Issuer. In the event that any
Lender fails to make available to such Issuer the amount of such Lender's
participation in such Letter of Credit as provided herein, such Issuer shall be
entitled to recover such amount on demand from such Lender together with
interest at the daily average Federal Funds Rate for three Business Days
(together with such other compensatory amounts as may be required to be paid by
such Lender to the Agent pursuant to the Rules for Interbank Compensation of the
council on International Banking or the Clearinghouse Compensation Committee, as
the case may be, as in effect from time to time) and thereafter at the LIBO Rate
plus the Applicable Margin. Nothing in this Section 2.8.4 shall be deemed to
prejudice the right of any Lender to recover from any Issuer any amounts made
available by such Lender to such
24
Issuer pursuant to this Section 2.8.4 in the event that it is determined by a
court of competent jurisdiction that the payment with respect to a Letter of
Credit by such Issuer in respect of which payment was made by such Lender
constituted gross negligence or wilful misconduct on the part of such Issuer.
Each Issuer shall distribute to each other Lender which has paid all amounts
payable by it under this Section 2.8.4 with respect to any Letter of Credit
issued by such Issuer such other Lender's Percentage of all payments received by
such Issuer from the Borrower in reimbursement of drawings honored by such
Issuer under such Letter of Credit when such payments are received.
SECTION 2.8.5. Disbursements. Each Issuer will notify the Borrower and
the Agent promptly of the presentment for payment of any Letter of Credit,
together with notice of the date (the "Disbursement Date") such payment shall be
made. Subject to the terms and provisions of such Letter of Credit, the
applicable Issuer shall make such payment (the "Disbursement") to the
beneficiary (or its designee) of such Letter of Credit. Prior to 11:30 a.m.
(U.S. Central time) on the Disbursement Date, the Borrower will reimburse the
applicable Issuer for all amounts which it has disbursed under the Letter of
Credit. In the event the applicable Issuer is not reimbursed by the Borrower on
the Disbursement Date, or if such Issuer must for any reason return or disgorge
such reimbursement, the Lenders (including such Issuer) shall, on the terms and
subject to the conditions of this Agreement, fund the Reimbursement Obligation
therefor by making, on the next Business Day, Revolving Loans which are Base
Rate Loans as provided in Section 2.1.1 (the Borrower being deemed to have given
a timely Borrowing Request therefor for such amount); provided, however, for the
purpose of determining the availability of the Commitments to make Loans
immediately prior to giving effect to the application of the proceeds of such
Loans, such Reimbursement Obligation shall be deemed not to be outstanding at
such time. To the extent the applicable Issuer is not reimbursed in full in
accordance with the preceding sentences, the Borrower's Reimbursement Obligation
shall accrue interest at a fluctuating rate determined by reference to the LIBO
Rate, plus a margin of 2% per annum, payable on demand.
SECTION 2.8.6. Reimbursement. The Borrower's obligation (a
"Reimbursement Obligation") under Section 2.8.5 to reimburse an Issuer with
respect to each Disbursement (including interest thereon), and each Lender's
obligation to make participation payments in each drawing which has not been
reimbursed by the Borrower, shall be absolute and unconditional under any and
all circumstances and irrespective of any setoff, counterclaim, or defense to
payment which the Borrower may have or have had against any Lender or any
beneficiary of a Letter of Credit, including any defense based upon the
occurrence of any Default, any draft, demand or certificate or other document
presented under a Letter of Credit proving to be forged, fraudulent, invalid or
insufficient, the failure of any disbursement to conform to the terms of the
applicable Letter of Credit (if, in the applicable Issuer's good
25
faith opinion, such disbursement is determined to be appropriate) or any
non-application or misapplication by the beneficiary of the proceeds of such
disbursement, or the legality, validity, form, regularity, or enforceability of
such Letter of Credit; provided, however, that nothing herein shall adversely
affect the right of the Borrower or any Lender to commence any proceeding
against the applicable Issuer for any wrongful disbursement made by such Issuer
under a Letter of Credit as a result of acts or omissions constituting gross
negligence or wilful misconduct on the part of such Issuer.
SECTION 2.8.7. Deemed Disbursements. Upon either (i) the occurrence and
during the continuation of an Event of Default pursuant to Section 8.1.9 or the
occurrence of the Revolving Period Commitment Termination Date or (ii) the
declaration by the Agent of all or any portion of the outstanding principal
amount of the Loans and other Obligations to be due and payable and/or the
commitments (if not theretofore terminated) to be terminated as provided in
Section 8.3, an amount equal to that portion of Letter of Credit Outstandings
attributable to outstanding and undrawn Letters of Credit shall, at the election
of the applicable Issuer acting on instructions from the Required Lenders, and
without demand upon or notice to the Borrower, be deemed to have been paid or
disbursed by such Issuer under such Letters of Credit (notwithstanding that such
amount may not in fact have been so paid or disbursed), and, upon notification
by such Issuer to the Agent and the Borrower of its obligations under this
Section, the Borrower shall be immediately obligated to reimburse such Issuer
the amount deemed to have been so paid or disbursed by such Issuer. Any amounts
so received by such Issuer from the Borrower pursuant to this Section shall be
delivered to the Agent to be held as collateral security for the repayment of
the Borrower's obligations in connection with the Letters of Credit. All amounts
on deposit pursuant to this Section 2.8.7 shall, until their application to any
Obligation or their return to the Borrower, as the case may be, at the
Borrower's written request, be invested in high grade short-term liquid
investments acceptable to Agent and designated by the Borrower, which
investments shall be held by the Agent as additional collateral security for the
repayment of the Borrower's Obligations under and in connection with the Letters
of Credit and all other Obligations. Any losses, net of earnings, and reasonable
fees and expenses of such investments shall be charged against the principal
amount invested. The Agent, the Issuer and the Lenders shall not be liable for
any loss resulting from any investment made by the Agent at the Borrower's
request. The Agent is not obligated hereby, or by any other Loan Document, to
make or maintain any investment, except upon written request by the Borrower. At
any time when such Letters of Credit shall terminate and all Obligations to each
Issuer are either terminated or paid or reimbursed to each Issuer in full, the
Obligations of the Borrower under this Section 2.8.7 shall be reduced
accordingly (subject, however, to reinstatement in the event any payment in
respect of any of such Letters of Credit is recovered in any manner from such
Issuer), and the Agent will return to the Borrower the excess, if
26
any, of the aggregate amount held by the Agent and not theretofore applied to
any Reimbursement Obligation. At such time when all Events of Default shall have
been cured or waived, if the Revolving Period Commitment Termination Date shall
not have occurred for any reason, the Agent shall return to the Borrower all
amounts then on deposit with the Agent pursuant to this Section 2.8.7.
SECTION 2.8.8. Nature of Reimbursement Obligations. The Borrower shall
assume all risks of the acts, omissions, or misuse of any Letter of Credit by
the beneficiary thereof. Neither any Issuer, the Agent nor any Lender (except to
the extent of its own gross negligence or wilful misconduct) shall be
responsible for: (a) the form, validity, sufficiency, accuracy, genuineness, or
legal effect of any Letter of Credit or any document submitted by any party in
connection with the application for and issuance of a Letter of Credit, even if
it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent, or forged; (b) the form, validity, sufficiency,
accuracy, genuineness, or legal effect of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof in whole or in part, which may prove
to be invalid or ineffective for any reason; (c) failure of the beneficiary to
comply fully with conditions required in order to demand payment under a Letter
of Credit; (d) errors, omissions, interruptions, or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, facsimile or
otherwise; or (e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a Letter of
Credit or of the proceeds thereof. None of the foregoing shall affect, impair,
or prevent the vesting of any of the rights or powers granted any Issuer or any
Lender hereunder. In furtherance and extension, and not in limitation or
derogation, of any of the foregoing, any action taken or omitted to be taken by
any Issuer in good faith shall be binding upon the Borrower and shall not put
such Issuer under any resulting liability to the Borrower.
SECTION 2.8.9. Increased Costs; Indemnity. If by reason of (a) any
change in applicable law, regulation, rule, decree or regulatory requirement or
any change in the interpretation or application by any judicial or regulatory
authority of any law, regulation, rule, decree or regulatory requirement, or (b)
compliance by any Issuer or any Lender with any direction, or requirement of any
governmental or monetary authority, including Regulation D of the F.R.S. Board:
(i) any Issuer or any Lender shall be subject to any tax (other than taxes on
net income and franchises), levy, charge or withholding of any nature or to any
variation thereof or to any penalty with respect to the maintenance or
fulfillment of its obligations under this Section 2.8, whether directly or by
such being imposed on or suffered by such Issuer or such Lender; (ii) any
reserve, deposit or similar requirement is or shall be applicable, increased,
imposed or modified in respect of any Letters of Credit issued by any Issuer or
participations therein purchased by any Lender; or (iii) there shall be imposed
on
27
any Issuer or any Lender any other condition regarding this Section 2.8, any
Letter of Credit or any participation therein, and the result of the foregoing
is directly to increase the cost to such Issuer or such Lender of issuing or
maintaining any Letter of Credit or of purchasing or maintaining any
participation therein, or to reduce any amount receivable in respect thereof by
such Issuer or such Lender, then and in any such case such Issuer or such Lender
may, at any time after the additional cost is incurred or the amount received is
reduced, notify the Agent and the Borrower thereof, and the Borrower shall pay
within 10 days of demand such amounts as such Issuer or Lender may in good faith
specify to be necessary to compensate such Issuer or Lender for such additional
cost or reduced receipt, together with interest on such amount from the date
demanded until payment in full thereof at a rate equal at all times to the
Alternate Base Rate per annum. The determination by such Issuer or Lender, as
the case may be, of any amount due pursuant to this Section 2.8.9, as set forth
in a statement setting forth the calculation thereof in reasonable detail,
shall, in the absence of manifest error, be conclusive and binding on the
Borrower.
In addition to amounts payable as elsewhere provided in this Section
2.8, the Borrower hereby indemnifies, exonerates and holds each Issuer, the
Agent and each Lender harmless from and against any and all actions, causes of
action, suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether such Issuer, the Agent or such
Lender is a party to the action for which indemnification is sought), including
reasonable attorneys' fees and disbursements, which such Issuer, the Agent or
such Lender may incur or be subject to as a consequence, direct or indirect, of
the issuance of the Letters of Credit, other than as a result of the gross
negligence or wilful misconduct of such Issuer as determined by a court of
competent jurisdiction, or the failure of such Issuer to honor a drawing under
any Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future government or governmental authority.
2.8.10. Letter of Credit Collateral Account. The Borrower hereby agrees
that it will, until the final expiration date of any Letter of Credit and
thereafter as long as any amount is payable to the Lenders in respect of any
Letter of Credit, maintain a special collateral account (the "Letter of Credit
Collateral Account") with the Agent, in the name of the Borrower but under the
sole dominion and control of the Agent, for the benefit of the Lenders and in
which the Borrower shall have no interest other than as set forth in Section
3.1.2. The Agent will invest any funds on deposit from time to time in the
Letter of Credit Collateral Account in short term investments, having a maturity
not exceeding 30 days. Nothing in this Section 2.8.10 shall (i) obligate the
Borrower to deposit any funds in the Letter of Credit Collateral Account, (ii)
obligate the Agent to require the Borrower to deposit any funds in the Letter of
Credit Collateral Account or (iii) limit the right of the Agent to release any
funds held in the Letter of Credit Collateral
28
Account, other than as required by Section 3.1.2. The Borrower hereby grants to
the Agent for the benefit of the Lenders a security interest in the Letter of
Credit Collateral Account and any funds or investments in such account.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. The Borrower shall make
mandatory repayments and prepayments and may also make voluntary prepayments
from time to time pursuant to this Section 3.1. Each prepayment made pursuant to
this Section shall be without premium or penalty, except as may be required by
Section 4.4.
SECTION 3.1.1. Repayments. To the extent that Term Loans are made to
the Borrower on the Revolving Period Commitment Termination Date, such Term
Loans shall be deemed to be for repayment of the principal of Revolving Loans
outstanding as of the Revolving Period Commitment Termination Date. The Borrower
shall repay in full the unpaid aggregate principal amount of each Loan upon the
Stated Maturity Date therefor. Prior thereto, the Borrower shall, on each
Quarterly Payment Date occurring after the Revolving Period Commitment
Termination Date, make a scheduled repayment of the outstanding principal amount
of the Term Loans in an amount equal to one twelfth (1/12) of the original
aggregate principal amount of the Term Loans; provided, that the final scheduled
repayment on the Stated Maturity Date for Term Loans shall be in an amount
necessary to repay in full the unpaid principal of the Term Loans.
SECTION 3.1.2. Mandatory Prepayments on Loans. If at any time, the
aggregate principal amount of all Senior Debt outstanding shall exceed the
Borrowing Base then in effect, the Borrower shall, at the Borrower's option,
either (a) forthwith repay a portion of the Loans in an aggregate principal
amount equal to such excess or (b) pay an amount equal to such excess in no more
than six substantially equal monthly installments, the first such payment to be
due within five days after the date on which it is first determined that such
principal amount of Senior Debt exceeds the Borrowing Base, and the remaining
payments due on the numerically corresponding day of each of the subsequent
months so that, upon the conclusion of such mandatory prepayments, the aggregate
principal amount of all outstanding Senior Debt does not exceed the Borrowing
Base; provided that if the aggregate principal amount of all Senior Debt
outstanding shall exceed the Borrowing Base as a result of the reduction of the
Borrowing Base pursuant to Section 7.2.7, then the foregoing clause (b) shall
not apply. If a subsequent month does not contain a numerically corresponding
day, the Borrower shall make such payment on the last Business Day of such
month, or if the numerically corresponding day is not a Business Day, such
payment will be due on the preceding Business Day. In the event the aggregate of
all Letter of Credit Outstandings plus the aggregate Stated Amount of all Other
Letters
29
of Credit exceeds the Letter of Credit Sublimit, the Borrower shall either
reduce the Letter of Credit Outstandings and/or the aggregate Stated Amount of
all Other Letters of Credit by an aggregate amount equal to such excess or
deposit cash collateral into the Letter of Credit Collateral Account on account
of and to secure its Obligations with respect to Letters of Credit then in
effect and not otherwise fully collateralized, such cash deposits to be in an
amount equal to such excess. In addition, in the event the sum of the aggregate
Letter of Credit Outstandings of all Letters of Credit plus the Stated Amount of
all Other Letters of Credit plus the aggregate principal amount of outstanding
Loans exceeds the Commitment Amount, the Borrower shall first make a mandatory
prepayment of the outstanding principal amount of the Loans, and second, deposit
cash collateral in the Letter of Credit Collateral Account, such prepayments
and/or cash deposits to be in an aggregate amount equal to such excess.
Mandatory prepayments pursuant to this Section 3.1.2 shall be in addition to and
not in lieu of principal payments required pursuant to Section 3.1.1; provided,
that such mandatory prepayments shall be applied against the next scheduled
repayment or repayments required pursuant to Section 3.1.1 if, as of the date
for such scheduled repayment, after giving effect to such scheduled repayment,
the Senior Debt shall be less than or equal to the Borrowing Base then in
effect.
The Borrower shall, on each date when any reduction in the Revolving
Period Commitment Amount shall become effective pursuant to Section 2.2.1, make
a mandatory prepayment of all Revolving Loans equal to the excess, if any, of
the aggregate, outstanding principal amount of all Revolving Loans over the
Revolving Period Commitment Amount as so reduced and/or deposit cash collateral
in the Letter of Credit Collateral Account, such prepayments and or cash
deposits to be in an aggregate amount equal to such excess.
SECTION 3.1.3. Repayment Upon Acceleration. The Borrower shall,
immediately upon any acceleration of the Stated Maturity Date of any Loans
pursuant to Section 8.2 or 8.3, repay all Loans.
SECTION 3.1.4. Voluntary Repayments. The Borrower may, from time to
time on any Business Day prior to the Stated Maturity Date, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of any
Loans; provided, however, that (i) any such prepayment shall be made pro rata
among Loans of the same type and, if applicable, having the same Interest Period
of all Lenders; (ii) no such prepayment of any LIBO Rate Loan may be made on any
day other than the last day of the Interest Period for such Loan; and (iii) all
such voluntary partial prepayments shall be in an aggregate minimum amount of
$300,000 for Base Rate Loans and $1,000,000 for LIBO Rate Loans and an integral
multiple of $100,000; provided that after giving effect to such partial
prepayment, any outstanding LIBO Rate Loans with the same Interest Period, if
any, shall be in a minimum aggregate principal amount of at least $5,000,000.
Each voluntary prepayment of Term Loans made pursuant to this Section 3.1.4
shall be applied, to the extent of such prepayment, in the inverse order of the
scheduled repayments
30
of Term Loans set forth in Section 3.1.1. Each prepayment of any Loans made
pursuant to this Section shall be without premium or penalty, except as may be
required by Section 4.4. No voluntary prepayment of principal of any Revolving
Loans shall cause a reduction in the Revolving Period Commitment Amount. No
voluntary prepayment of principal of any Term Loan may be reborrowed.
SECTION 3.2. Interest Provisions. Interest on the outstanding
principal amount of Loans shall accrue and be payable in accordance with this
Section 3.2.
SECTION 3.2.1. Rates. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum: (a) on that portion
maintained from time to time as a Base Rate Loan, equal to the sum of the
Alternate Base Rate from time to time in effect plus the Base Rate Applicable
Margin; and (b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate (Reserve
Adjusted) for such Interest Period plus the LIBO Rate Applicable Margin.
The "LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be
made, continued or maintained as, or converted into, a LIBO Rate Loan for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) determined pursuant to the following formula:
LIBO Rate LIBO Rate
(Reserve Adjusted) = -------------------------------
1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be determined by the Agent on the basis of the LIBOR Reserve
Percentage in effect on, and the applicable rates furnished to and received by
the Agent from Bank of Montreal, two Business Days before the first day of such
Interest Period.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans,
the rate of interest equal to the average (rounded upwards, if necessary, to the
nearest 1/16 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to Bank of Montreal's LIBOR Office in
the London interbank market as at or about 10:00 a.m. U.S. Central time two
Business Days prior to the beginning of such Interest Period for delivery on the
first day of such Interest Period, and in an amount approximately equal to the
amount of Bank of Montreal's LIBO Rate Loan and for a period approximately equal
to such Interest Period.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under
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regulations issued from time to time by the F.R.S. Board and then applicable to
assets or liabilities consisting of and including "Eurocurrency Liabilities", as
currently defined in Regulation D of the F.R.S. Board, having a term
approximately equal or comparable to such Interest Period.
All LIBO Rate Loans shall bear interest from and including the first
day of the applicable Interest Period to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such LIBO
Rate Loan.
SECTION 3.2.2. Post-Maturity Rates. After the date any principal amount
of any Loan is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise), or after any other monetary Obligation of the
Borrower shall have become due and payable, the Borrower shall pay, but only to
the extent permitted by law, interest (after as well as before judgment) on such
amounts at a rate per annum equal to the Alternate Base Rate plus a margin of
2%.
SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication: (a) on the Stated Maturity Date therefor; (b)
except in the case of voluntary prepayment of Base Rate Loans, on the date of
any payment or prepayment, in whole or in part, of principal outstanding on such
Loan; (c) with respect to Base Rate Loans, on each Quarterly Payment Date
occurring after the date of the initial Borrowing hereunder; (d) with respect to
LIBO Rate Loans, the last day of each applicable Interest Period (and, if such
Interest Period shall exceed 90 days, on the 90th day of such Interest Period);
and (e) on that portion of any Loans the Stated Maturity Date of which is
accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such
acceleration. Interest accrued on Loans or other monetary Obligations arising
under this Agreement or any other Loan Document after the date such amount is
due and payable (whether on the Stated Maturity Date, upon acceleration or
otherwise) shall be payable upon demand. Notwithstanding clauses (a) and (b)
above, except as otherwise provided in this Section 3.2.3, no accrued interest
shall be due and payable on the Revolving Period Commitment Termination Date on
those Revolving Loans the principal of which is deemed to have been repaid by
Term Loans to the Borrower pursuant to Section 3.1.1.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth in
this Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fee. The Borrower agrees to pay to the Agent
for the account of each Lender, for the period (including any portion thereof
when any of its Commitments are suspended by reason of the Borrower's inability
to satisfy any condition of Article V) commencing on the Effective Date and
continuing through the Revolving Period Commitment Termination Date, a
commitment fee at the rate of (i) during any period when the ratio (expressed as
a percentage) of the outstanding principal of Senior Debt, including any Loans
outstanding, to the Borrowing Base then in
32
effect is greater than 75%, 3/8 of 1% per annum and (ii) during all other
periods 1/4 of 1% per annum on such Lender's Percentage of the average daily
unused portion of the Revolving Period Commitment Amount. Such commitment fees
shall be payable by the Borrower in arrears on each Quarterly Payment Date,
commencing on March 1, 1998, and ending on the Revolving Period Commitment
Termination Date.
SECTION 3.3.2. Agent's Fees. To the Agent for its own account, the
fees as set forth in the letter agreement between the Borrower and the Agent
dated December 8, 1997.
SECTION 3.3.3. Letter of Credit Face Amount Fee. The Borrower agrees
to pay to the Agent, for the account of each Lender, a fee for each Letter of
Credit for the period from and including the date of the issuance of such Letter
of Credit to (but not including) the date upon which such Letter of Credit
expires, at a per annum rate equal to the Letter of Credit Applicable Margin on
the outstanding face amount of each Letter of Credit. Such fee shall be payable
by the Borrower in arrears on each Quarterly Payment Date, and on the Stated
Maturity Date of any Term Loan for any period then ending for which such fee
shall not theretofore have been paid, commencing on the first such date after
the issuance of such Letter of Credit.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. If LIBO Rate Lending Unlawful. If any Lender shall
determine (which determination shall, upon notice thereof to the Borrower and
the Lenders, be conclusive and binding on the Borrower) that the introduction of
or any change in or in the interpretation of any law makes it unlawful, or any
central bank or other governmental authority asserts that it is unlawful, for
such Lender to make, continue or maintain any Loan as, or to convert any Loan
into, a LIBO Rate Loan, the obligations of all Lenders to make, continue,
maintain or convert any such Loans shall, upon such determination, forthwith be
suspended until such Lender shall notify the Agent that the circumstances
causing such suspension no longer exist, and all LIBO Rate Loans shall
automatically convert into Base Rate Loans at the end of the then current
Interest Periods with respect thereto or sooner, if required by such law or
assertion.
SECTION 4.2. If Deposits Unavailable. If the Agent shall have
determined that (a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to Bank of Montreal in its relevant market; or
(b) by reason of circumstances affecting Bank of Montreal's relevant market,
adequate means do not exist for ascertaining the interest rate applicable
hereunder to LIBO Rate Loans, then, upon notice from the Agent to the Borrower
and the Lenders, the obligations of all Lenders under Section 2.3
33
and Section 2.4 to make or continue any Loans as, or to convert any Loans into,
LIBO Rate Loans shall forthwith be suspended until the Agent shall notify the
Borrower and the Lenders that the circum stances causing such suspension no
longer exist.
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. The Borrower
agrees to reimburse each Lender for any increase in the cost to such Lender of,
or any reduction in the amount of any sum receivable by such Lender in respect
of, making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, LIBO Rate Loans; provided, the Borrower shall only be obligated to
reimburse a Lender in respect of such increases or reductions if such Lender is
generally seeking such reimbursement from similar borrowers under similar
circumstances and Borrower shall not be obligated to reimburse a Lender in
respect of such increases or reductions in respect of any period prior to notice
thereof to Borrower. Such Lender shall promptly notify the Agent and the
Borrower in writing of the occurrence of any such event, such notice to state,
in reasonable detail, the reasons therefor and the additional amount required
fully to compensate such Lender for such increased cost or reduced amount. Such
additional amounts shall be payable by the Borrower directly to such Lender
within five days of its receipt of such notice, and such notice shall, in the
absence of manifest error, be conclusive and binding on the Borrower.
SECTION 4.4. Funding Losses. In the event any Lender shall incur
any loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a LIBO
Rate Loan) as a result of (a) any conversion or repayment or prepayment of the
principal amount of any LIBO Rate Loan on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to Section 3.1
or otherwise; (b) any Loans not being made as LIBO Rate Loans in accordance with
the Borrowing Request therefor; or (c) any Loans not being continued as, or
converted into, LIBO Rate Loans in accordance with the Continuation/Conversion
Notice therefor; then, upon the written notice of such Lender to the Borrower
(with a copy to the Agent), the Borrower shall, within five days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such loss or expense.
Such written notice (which shall include calculations in reasonable detail)
shall, in the absence of manifest error, be conclusive and binding on the
Borrower.
SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental
34
authority affects or would affect the amount of capital required or expected to
be maintained by any Lender or any Person controlling such Lender, and such
Lender determines (in its sole and absolute discretion) that the rate of return
on its or such controlling Person's capital as a consequence of its Commitments
or the Borrowings made by such Lender is reduced to a level below that which
such Lender or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by such Lender to the Borrower, the Borrower shall, within 5 days
of its receipt of such notice, pay directly to such Lender additional amounts
sufficient to compensate such Lender or such controlling Person for such
reduction in rate of return; provided, the Borrower shall only be obligated to
pay such amounts to a Lender if such Lender is generally seeking payment in
respect of such amounts from similar borrowers under similar circumstances and
Borrower shall not be obligated to reimburse a Lender in respect of such amounts
in respect of any period prior to such notice to the Borrower. A statement of
such Lender as to any such additional amount or amounts (including calculations
thereof in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Borrower. In determining such amount, such Lender
may use any reasonable method of averaging and attribution that it (in its sole
and absolute discretion) shall deem applicable.
SECTION 4.6. Taxes. In the event that any withholding or deduction
from any payment to be made by the Borrower hereunder is required in respect of
any present or future income, excise, stamp or franchise taxes and other taxes,
fees, duties, withholdings or other charges of any nature whatsoever imposed by
any taxing authority, but excluding franchise taxes and taxes imposed on or
measured by any Lender's or Issuer's net income or receipts (such non-excluded
items being called "Taxes") pursuant to any applicable law, rule or regulation,
then the Borrower will (a) pay directly to the relevant authority the full
amount required to be so withheld or deducted; and (b) promptly forward to the
Agent an official receipt or other documentation satisfactory to the Agent
evidencing such payment to such authority.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lenders or the Issuer, the required receipts or other required
documentary evidence, the Borrower shall indemnify the Lenders or the Issuer, as
the case may be, for any incremental Taxes, interest or penalties that may
become payable by any Lender as a result of any such failure. For purposes of
this Section 4.6, a distribution hereunder by the Agent or any Lender or Issuer
to or for the account of any Lender or Issuer shall be deemed a payment by the
Borrower.
Upon the request of the Borrower or the Agent, each Lender and Issuer
that is organized under the laws of a jurisdiction other than the United States
shall, prior to the due date of any payments under the Notes, execute and
deliver to the Borrower and the Agent,
35
on or about the first scheduled payment date in each Fiscal Year, one or more
(as the Borrower or the Agent may reasonably request) United States Internal
Revenue Service Forms 4224 or Forms 1001 or such other forms or documents (or
successor forms or documents), appropriately completed, as may be applicable to
establish the extent, if any, to which a payment to such Lender or Issuer is
exempt from withholding or deduction of Taxes.
SECTION 4.7. Payments, Computations, etc. Unless otherwise
expressly provided, all payments by the Borrower pursuant to this Agreement, the
Notes or any other Loan Document shall be made by the Borrower to the Agent for
the pro rata account of the Lenders or the Issuer entitled to receive such
payment. All such payments required to be made to the Agent shall be made,
without setoff, deduction or counterclaim, not later than 12:00 Noon, United
States Central time, on the date due, in same day or immediately available
funds, to such account as the Agent shall specify from time to time by notice to
the Borrower. Funds received after that time shall be deemed to have been
received by the Agent on the next succeeding Business Day. The Agent shall
promptly remit in same day funds to each Lender or Issuer its share, if any, of
such payments received by the Agent for the account of such Lender or Issuer.
All interest and fees shall be computed on the basis of the actual number of
days (including the first day but excluding the last day) occurring during the
period for which such interest or fee is payable over a year comprised of 360
days (or, in the case of interest on a Base Rate Loan, 365 days or, if
appropriate, 366 days). Whenever any payment to be made shall otherwise be due
on a day which is not a Business Day, such payment shall (except as otherwise
required by clause (c) of the definition of the term "Interest Period" with
respect to LIBO Rate Loans) be made on the next succeeding Business Day and such
extension of time shall be included in computing interest and fees, if any, in
connection with such payment.
SECTION 4.8. Sharing of Payments. If any Lender shall obtain any
payment or other recovery (whether voluntary, involun tary, by application of
setoff or otherwise) on account of any Loan or participation in a Letter of
Credit (other than pursuant to the terms of Sections 4.3, 4.4 and 4.5) in excess
of its pro rata share of payments then or therewith obtained by all Lenders,
such Lender shall purchase from the other Lenders such participations in Loans
made by them and participations in Letters of Credit held by them as shall be
necessary to cause such purchasing Lender to share the excess payment or other
recovery ratably with each of them; provided, however, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing Lender, the purchase shall be rescinded and each Lender which
has sold a participation to the purchasing Lender shall repay to the purchasing
Lender the purchase price to the ratable extent of such recovery together with
an amount equal to such selling Lender's ratable share (according to the
proportion of (a) the amount of such selling Lender's required repayment to the
purchasing Lender to (b) the total amount so recovered from the purchasing
Lender) of
36
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 4.8 may,
to the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 4.9) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section 4.8 applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section 4.8 to share in the benefits of any
recovery on such secured claim.
SECTION 4.9. Setoff. Each Lender and Issuer shall, upon the
occurrence of any Default described in clauses (a) through (d) of Section 8.1.9
with respect to the Borrower or any of its Subsidiaries or any other Event of
Default, have the right to appropriate and apply to the payment of the
Obligations owing to it (whether or not then due), and (as security for such
Obligations) the Borrower hereby grants to each Lender and Issuer a continuing
security interest in, any and all balances, credits, deposits, accounts or
moneys of the Borrower then or thereafter maintained with such Lender or Issuer;
provided, however, that any such appropriation and application shall be subject
to the provisions of Section 4.8. Each Lender and Issuer agrees promptly to
notify the Borrower and the Agent after any such setoff and application made by
such Lender or Issuer; provided, however, that the failure to give such notice
shall not affect the validity of such setoff and application. The rights of each
Lender and Issuer under this Section 4.9 are in addition to other rights and
remedies (including other rights of setoff under applicable law or otherwise)
which such Lender or Issuer may have.
SECTION 4.10. Use of Proceeds. The Borrower shall apply the
proceeds of each Borrowing in accordance with the fifth recital; provided that
the Borrower will not and will not permit any Subsidiary to use any proceeds to
fund an Acquisition not approved by the board of directors or other governing
body of the target or selling company or to acquire any "margin stock" (as
defined in F.R.S. Regulation U) in violation of Regulation G,T,X or U of the
Board of Governors of the Federal Reserve System.
ARTICLE V
CONDITIONS TO BORROWING
SECTION 5.1. Continuation of Original Loans; Initial Borrowing.
The obligations of the Lenders to continue the Original Loans as Loans hereunder
and to fund the initial Borrowing and to issue the initial Letter of Credit
shall be subject to the prior or concurrent satisfaction of each of the
conditions precedent set forth in this Section 5.1.
37
SECTION 5.1.1. Resolutions, etc. The Agent shall have received from
the Borrower a certificate, dated the date of the initial Borrowing or the
issuance of the initial Letter of Credit, of its Secretary or Assistant
Secretary as to (a) resolutions of its Board of Directors then in full force and
effect authorizing the execution, delivery and performance of this Agreement,
the Notes and each other Loan Document to be executed by it; and (b) the
incumbency and signatures of those of its officers authorized to act with
respect to this Agreement, the Notes and each other Loan Document executed by
it, upon which certificate each Lender may conclusively rely until it shall have
received a further certificate of the Secretary or Assistant Secretary of the
Borrower canceling or amending such prior certificate.
SECTION 5.1.2. Delivery of Notes. The Agent shall have received, for
the account of each Lender, its Note duly executed and delivered by the
Borrower.
SECTION 5.1.3. [Reserved].
SECTION 5.1.4. Compliance with Representations and Warranties. The
Agent shall have received a certificate from an Authorized Officer confirming
compliance with Section 5.2.1 and stating that, after giving effect to Loans or
Letters of Credit comprising the initial Borrowings, Senior Debt shall not
exceed the Borrowing Base then in effect.
SECTION 5.1.5. Opinions of Counsel. The Agent shall have received an
opinion, dated the date of the initial Borrowing and addressed to the Agent and
all Lenders and Issuers, from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, a Professional Corporation,
counsel to the Borrower, substantially in the form of Exhibit E-1 hereto and the
Agent shall be satisfied that it will receive within 30 days of the initial
Borrowing an opinion from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, a Professional Corporation, counsel
to the Borrower, substantially in the form of Exhibit E-2 hereto.
SECTION 5.1.6. Closing Fees, Expenses, etc. The Agent shall have
received for its own account, or for the account of each Lender, as the case may
be, all fees, costs and expenses due and payable pursuant to Sections 3.3 and
10.3, if then invoiced.
SECTION 5.2. Conditions Precedent to Revolving Loans. The
obligation of each Lender to fund any Revolving Loan and of each Issuer to issue
a Letter of Credit on the occasion of any Borrowing (including the initial
Borrowing) shall be subject to the satisfaction of each of the conditions
precedent set forth in this Section 5.2.
SECTION 5.2.1. Compliance with Warranties, No Default, etc. Both
before and after giving effect to any Borrowing (but, if any Default of the
nature referred to in Section 8.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds
38
thereof) the following statements shall be true and correct: (a) the
representations and warranties set forth in Article VI (excluding, however,
those contained in Section 6.7) shall be true and correct with the same effect
as if then made (unless stated to relate solely to an early date, in which case
such representations and warranties shall be true and correct as of such earlier
date); (b) except as disclosed by the Borrower to the Agent and the Lenders
pursuant to Section 6.7 (i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or, to the knowledge
of the Borrower, threatened against the Borrower or any of its Subsidiaries
which might materially adversely affect the Borrower's consolidated business,
operations, assets, revenues, properties or prospects or which purports to
affect the legality, validity or enforceability of this Agreement, the Notes or
any other Loan Document; and (ii) no development shall have occurred in any
labor controversy, litigation, arbitration or governmental investigation or
proceeding disclosed pursuant to Section 6.7 which might materially adversely
affect the consolidated businesses, operations, assets, revenues, properties or
prospects of the Borrower and its Subsidiaries; (c) no Default shall have then
occurred and be continuing, and neither the Borrower nor any of its Subsidiaries
are in material violation of any law or governmental regulation or court order
or decree; (d) the Borrower is in compliance with the Current Ratio and Tangible
Net Worth tests required by Section 7.2.4, and, immediately after giving effect
to the proposed Borrowing, the Senior Debt of the Borrower shall not exceed the
Borrowing Base and (e) the Loans and Letters of Credit requested will constitute
"Designated Senior Indebtedness" pursuant to the Indenture, as defined therein.
SECTION 5.2.2. Borrowing Request. The Agent shall have received a
Borrowing Request for such Borrowing of a Loan and an Issuance Request for each
Borrowing which is in the form of the issuance of a Letter of Credit. Each of
the delivery of a Borrowing Request or Issuance Request shall constitute a
representation and warranty by the Borrower that, on the date of such Borrowing
(both immediately before and after giving effect to such Borrowing and the
application of the proceeds thereof), the statements made in Section 5.2.1 are
true and correct.
SECTION 5.2.3. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries shall be satisfactory in form and substance to the Agent and its
counsel; the Agent and its counsel shall have received all information,
approvals, opinions, documents or instruments as the Agent or its counsel may
reasonably request.
SECTION 5.3. Conditions Precedent to the Making of the Term Loans.
The obligation of each Lender to make its Term Loan is subject to (a) the
condition precedent that the principal of all Revolving Loans and accrued
interest on all Revolving Loans, except those Revolving Loans the principal of
which shall be deemed to
39
have been repaid by Term Loans pursuant to Section 3.1.1 and for which such
interest is not otherwise due and payable, shall have been paid in full prior to
or concurrently with the making of such Term Loan; and (b) the conditions
precedent set forth in Section 5.2.1. The acceptance by the Borrower of the
proceeds of the Term Loans shall constitute a representation and warranty that,
on the Revolving Period Commitment Termination Date (both before and after
giving effect to such Term Loans and the application of the proceeds thereof),
the statements made in Section 5.2.1 are true and correct.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into this
Agreement and to make Loans hereunder, and the Issuer to issue Letters of Credit
and the Lenders to participate in Letters of Credit, the Borrower represents and
warrants unto the Agent and each Lender and Issuer as set forth in this Article
VI.
SECTION 6.1. Organization, etc. The Borrower and each of its
Subsidiaries is a corporation validly organized and existing and in good
standing under the laws of the jurisdiction of its incorporation, is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the nature of its business requires such qualification,
and has full power and authority and holds all requisite governmental licenses,
permits and other approvals to enter into and perform its Obligations under this
Agreement, the Notes and each other Loan Document and to own and hold under
lease its property and to conduct its business substantially as currently
conducted by it.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The
execution, delivery and performance by the Borrower of this Agreement, the Notes
and each other Loan Document executed or to be executed by it, are within the
Borrower's corporate powers, have been duly authorized by all necessary
corporate action, and do not (a) contravene the Borrower's Organic Documents;
(b) contravene any contractual restriction, law or governmental regulation or
court decree or order binding on or affecting the Borrower; or (c) result in, or
require the creation or imposition of, any Lien on any of the Borrower's
properties.
SECTION 6.3. Government Approval, Regulation, etc. No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or other Person is required for
the due execution, delivery or performance by the Borrower of this Agreement,
the Notes or any other Loan Document. Neither the Borrower nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding
40
company" or of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
SECTION 6.4. Validity, etc. This Agreement constitutes, and the
Notes and each other Loan Document executed by the Borrower will, on the due
execution and delivery thereof, constitute, the legal, valid and binding
obligations of the Borrower enforceable in accordance with their respective
terms except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally.
SECTION 6.5. Financial Information. The consolidated balance sheet
of the Borrower and its Subsidiaries as at September 30, 1997, and the related
consolidated statements of earnings and cash flows of the Borrower and its
Subsidiaries, copies of which have been furnished to the Agent and each Lender,
have been prepared in accordance with GAAP consistently applied, and present
fairly the consolidated financial condition of the Borrower and its Subsidiaries
as at the date thereof and the results of their operations for the period then
ended.
SECTION 6.6. No Material Adverse Change. Since the date of the
financial statements described in Section 6.5, other than changes resulting from
fluctuations in oil and gas prices, there has been no material adverse change in
the financial condition, operations, assets, business, properties or prospects
of the Borrower and its Subsidiaries, taken as a whole, except as disclosed in
Item 6.6 of the Disclosure Schedule.
SECTION 6.7. Litigation, Labor Controversies, etc. There is no
pending or, to the knowledge of the Borrower, threatened litigation, action,
proceeding, or labor controversy affecting the Borrower or any of its
Subsidiaries, or any of their respective properties, businesses, assets or
revenues, which may materially adversely affect the financial condition,
operations, assets, business, properties or prospects of the Borrower and its
Subsidiaries, taken as a whole, or which purports to affect the legality,
validity or enforceability of this Agreement, the Notes or any other Loan
Document, except as disclosed in Item 6.7 ("Litigation") of the Disclosure
Schedule.
SECTION 6.8. Subsidiaries. The Borrower has no Subsidiaries,
except those Subsidiaries which are identified in Item 6.8 ("Existing
Subsidiaries") of the Disclosure Schedule.
SECTION 6.9. Ownership of Properties. The Borrower and each of its
Subsidiaries owns good and defensible title to all of its properties and assets,
real and personal, tangible and intangible, of any nature whatsoever (including
patents, trade-
41
marks, trade names, service marks and copyrights), free and clear of all Liens,
charges or claims (including infringement claims with respect to patents,
trademarks, copyrights and the like), except those which would not have a
material adverse effect on the financial conditions, operations, assets,
business, properties or prospects of the Borrower and its Subsidiaries, taken as
a whole, and except as permitted pursuant to Section 7.2.3. For the purposes of
this representation, good and defensible title shall mean record title which may
be subject to minor defects and irregularities which (a) do not materially
reduce Borrower's net revenue interests or increase Borrower's working interests
(without a corresponding and proportional increase in Borrower's net revenue
interests) therein, and (b) are not likely to interfere materially with the
benefit and enjoyment of production from such properties.
SECTION 6.10. Taxes. To the best of the Borrower's knowledge,
Borrower and each of its Subsidiaries has filed all tax returns and reports
required by law to have been filed by it and has paid all taxes and governmental
charges thereby shown to be owing, except any such taxes or charges which are
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books.
SECTION 6.11. Pension and Welfare Plans. No steps have been taken
to terminate any Pension Plan, and no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a Lien under section
302(f) of ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which might result in the incurrence by the Borrower
or any member of the Controlled Group of any material liability, fine or
penalty. Neither the Borrower nor any member of the Controlled Group has any
contingent liability with respect to any post-retirement benefit under a Welfare
Plan, other than liability for continuation coverage described in Part 6 of
Title I of ERISA.
SECTION 6.12. Environmental Warranties. To the best of Borrower's
knowledge after reasonable investigation, except as set forth in Item 6.12
("Environmental Matters") of the Disclosure Schedule: (a) all facilities and
property (including underlying groundwater) owned or leased by the Borrower or
any of its Subsidiaries have been, and continue to be, owned or leased by the
Borrower and its Subsidiaries in material compliance with all Environmental
Laws; (b) there have been no past, and there are no pending or threatened (i)
claims, complaints, notices or requests for information received by the Borrower
or any of its Subsidiaries with respect to any alleged violation of any
Environmental Law, or (ii) complaints, notices or inquiries to the Borrower or
any of its Subsidiaries regarding potential liability under any Environmental
Law; (c) there have been no Releases (or, in Argentina, release) of Hazardous
Materials at, on or under any property now or previously owned or leased by the
Borrower or any of its Subsidiaries that, singly or in the aggregate, have, or
may reasonably be expected to have, a material adverse effect on the financial
condition,
42
operations, assets, business, properties or prospects of the Borrower and its
Subsidiaries, taken as a whole; (d) the Borrower and its Subsidiaries have been
issued and are in material compliance with all permits, certificates, approvals,
licenses and other authorizations relating to environmental matters and
necessary or desirable for their businesses; (e) no property now or previously
owned or leased by the Borrower or any of its Subsidiaries is listed or proposed
for listing (with respect to owned property only) on the National Priorities
List pursuant to CERCLA, on the CERCLIS or on any similar state list of sites
requiring investigation or clean-up; (f) there are no underground storage tanks,
active or abandoned, including petroleum storage tanks, on or under any property
now or previously owned or leased by the Borrower or any of its Subsidiaries
that, singly or in the aggregate, have, or may reasonably be expected to have, a
material adverse effect on the financial condition, operations, assets,
business, properties or prospects of the Borrower and its Subsidiaries, taken as
a whole; (g) neither Borrower nor any Subsidiary of the Borrower has directly
transported or directly arranged for the transportation of any Hazardous
Material to any location which is listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state list
or which is the subject of federal, state or local enforcement actions or other
investigations which may lead to material claims against the Borrower or such
Subsidiary thereof for any remedial work, damage to natural resources or
personal injury, including claims under CERCLA; (h) there are no polychlorinated
biphenyls or friable asbestos present at any property now or previously owned or
leased by the Borrower or any Subsidiary of the Borrower that, singly or in the
aggregate, have, or may reasonably be expected to have, a material adverse
effect on the financial condition, operations, assets, business, properties or
prospects of the Borrower and its Subsidiaries, taken as a whole; and (i) no
conditions exist at, on or under any property now or previously owned or leased
by the Borrower or any Subsidiary which, with the passage of time, or the giving
of notice or both, would give rise to liability under any Environmental Law
which singly or in the aggregate have, or may reasonably be expected to have, a
material adverse effect on the financial condition, operations, assets,
business, properties or prospects of the Borrower and its Subsidiaries, taken as
a whole.
SECTION 6.13. Regulations G, U and X. The Borrower is not engaged
in the business of extending credit for the purpose of purchasing or carrying
margin stock, and no proceeds of any Loans will be used for a purpose which
violates, or would be inconsistent with, F.R.S. Board Regulation G, U or X.
Terms for which meanings are provided in F.R.S. Board Regulation G, U or X or
any regulations substituted therefor, as from time to time in effect, are used
in this Section with such meanings.
SECTION 6.14. Accuracy of Information. All factual information
heretofore or contemporaneously furnished by or on behalf of the Borrower in
writing to the Agent or any Lender or
43
Issuer for purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all other such factual information hereafter
furnished by or on behalf of the Borrower to the Agent or any Lender or Issuer
will be, true and accurate in every material respect on the date as of which
such information is dated or certified and as of the date of execution and
delivery of this Agreement by the Agent and such Lender or Issuer, and such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary to make such information not misleading.
SECTION 6.15. No Default. Neither the Borrower nor any Subsidiary
is in default in any respect materially and adversely affecting the business,
property, assets, operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries, taken as a whole, with respect to any indenture,
mortgage, deed of trust or other agreement or instrument to which the Borrower
is a party or by which the Borrower or its properties is/are bound or affected.
SECTION 6.16. No Violation of Applicable Law. To the best of the
Borrower's knowledge, neither the Borrower nor any of its Subsidiaries has
violated any applicable statute, regulation or ordinance of the United States of
America or any foreign country, or any state, municipality or other
jurisdiction, or of any agency thereof in any respect materially and adversely
affecting the business, property, assets, operations or condition, financial or
otherwise, of Borrower and its Subsidiaries, taken as a whole, and the Borrower
has not received any notice of probable violation from the Department of Energy
or the Environmental Protection Agency. The Borrower is using the Borrower's
best efforts to comply or cause its Subsidiaries to comply with all statutes,
rules and regulations relating to environmental standards and controls in all
jurisdictions where the Borrower and its Subsidiaries are presently doing
business.
SECTION 6.17. Permits. The Borrower and its Subsidiaries have all
governmental and private permits, certificates, consents and franchises which in
any respect are material to the business, property, assets, operations or
condition, financial or otherwise, of the Borrower and its Subsidiaries to carry
on the Borrower's and such Subsidiaries' business as now being conducted, and to
own or lease and operate the Borrower's and such Subsidiaries' properties as now
owned or leased. All such governmental and private permits, certificates,
consents and franchises are valid and subsisting, and the Borrower and its
Subsidiaries are not in violation thereof in a manner which would have a
material and adverse effect thereon.
44
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower agrees with the
Agent and each Lender that, until all Commitments have terminated and all
Obligations have been paid and performed in full, the Borrower will perform the
obligations set forth in this Section 7.1.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. The
Borrower will furnish, or will cause to be furnished, to each Lender and the
Agent copies of the following financial statements, reports, notices and
information: (a) as soon as available and in any event within 45 days after the
end of each of the first three Fiscal Quarters of each Fiscal Year of the
Borrower, consolidated balance sheets of the Borrower and its Subsidiaries as of
the end of such Fiscal Quarter and consolidated statements of earnings and cash
flows of the Borrower and its Subsidiaries for such Fiscal Quarter and for the
period commencing at the end of the previous Fiscal Year and ending with the end
of such Fiscal Quarter, certified by the chief accounting or financial
Authorized Officer of the Borrower; (b) as soon as available and in any event
within 120 days after the end of each Fiscal Year of the Borrower, a complete
copy of the annual audit report for such Fiscal Year for the Borrower and its
Subsidiaries, including therein consolidated balance sheets of the Borrower and
its Subsidiaries as of the end of such Fiscal Year and consolidated statements
of earnings and cash flows of the Borrower and its Subsidiaries for such Fiscal
Year, in each case certified (without any Impermissible Qualification) by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP or other independent public accountants selected by the Borrower
and reasonably acceptable to the Agent and the Required Lenders, together with a
certificate from such accountants (i) containing a computation of, and showing
compliance with, each of the financial ratios and restrictions contained in
Section 7.2.4 and (ii) containing a computation of the Consolidated Interest
Coverage Ratio (as defined in the Indenture) as of the date of such statements
and to the effect that, in making the examination necessary for the signing of
such annual report by such accountants, they have not become aware of any
Default or Event of Default that has occurred and is continuing, or, if they
have become aware of such Default or Event of Default, describing such Default
or Event of Default and the steps, if any, being taken to cure it; (c) as soon
as available and in any event within 45 days after the end of each Fiscal
Quarter, a certificate, executed by the chief accounting or financial Authorized
Officer of the Borrower, showing (in reasonable detail and with appropriate
calculations and computations in all respects satisfactory to the Agent) (i)
compliance with the financial covenants set forth in Section 7.2.4 and (ii)
containing a computation of the Consolidated Interest Coverage Ratio (as defined
in the Indenture) as of the
45
date of such statements; (d) forthwith upon the occurrence of each Default, a
statement of the chief accounting or financial Authorized Officer of the
Borrower setting forth details of such Default and the action which the Borrower
has taken and proposes to take with respect thereto; (e) as soon as possible and
in any event within three days after (i) the occurrence of any adverse
development with respect to any litigation, action, proceeding, or labor
controversy described in Section 6.7, or (ii) the commencement of any labor
controversy, litigation, action or proceeding of the type described in Section
6.7, notice thereof and copies of all documentation relating thereto; (f)
promptly after the sending or filing thereof, copies of all reports which the
Borrower sends to any of its securityholders, and all reports and registration
statements which the Borrower or any of its Subsidiaries files with the
Securities and Exchange Commission or any national securities exchange; (g)
immediately upon becoming aware of the institution of any steps by the Borrower
or any other Person to terminate any Pension Plan, or the failure to make a
required contribution to any Pension Plan, if such failure is sufficient to give
rise to a Lien under section 302(f) of ERISA, or the taking of any action with
respect to a Pension Plan which could result in the requirement that the
Borrower furnish a bond or other security to the PBGC or such Pension Plan, or
the occurrence of any event with respect to any Pension Plan which could result
in the incurrence by the Borrower of any material liability, fine or penalty, or
any material increase in the contingent liability of the Borrower with respect
to any post-retirement Welfare Plan benefit, notice thereof and copies of all
documentation relating thereto; and (h) such other information respecting the
condition or operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as any Lender through the Agent may from time to time reasonably
request.
SECTION 7.1.2. Compliance with Laws, etc. The Borrower will, and
will cause each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to include
(without limitation) the payment, before the same become delinquent, of all
taxes, assessments and governmental charges imposed upon it or upon its property
except to the extent being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books. The Borrower will maintain and preserve its
corporate existence and qualification as a foreign corporation.
SECTION 7.1.3. Maintenance of Properties. The Borrower will, and
will cause each of its Subsidiaries to, maintain, preserve, protect and keep its
material properties in good repair, working order and condition, and make
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times, all
in accordance with approved practices of prudent operators and standards
prevailing in the oil and gas industry and within limits imposed by joint
operating agreements.
46
SECTION 7.1.4. Insurance. The Borrower will, and will cause each of
its Subsidiaries to, maintain or cause to be maintained, with responsible
insurance companies insurance with respect to its properties and business
against such casualties and contingencies and of such types and in such amounts
as is customary in the case of similar businesses and will, upon request of the
Agent, furnish to each Lender at reasonable intervals a certificate of an
Authorized Officer of the Borrower setting forth the nature and extent of all
insurance maintained by the Borrower and its Subsidiaries in accordance with
this Section.
SECTION 7.1.5. Books and Records. The Borrower will, and will cause
each of its Subsidiaries to, keep books and records which accurately reflect all
of its business affairs and transactions and permit the Agent and each Lender
and Issuer or any of their respective representatives, at reasonable times and
intervals, to visit all of its offices, to discuss its financial matters with
its officers and to examine any of its books or other corporate records.
SECTION 7.1.6. Environmental Covenant. The Borrower will, and will
cause each of its Subsidiaries to (a) use and operate all of its facilities and
properties in material compliance with all Environmental Laws, keep all
necessary permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material compliance
therewith, and handle all Hazardous Materials in material compliance with all
applicable Environmental Laws; (b) immediately notify the Agent and provide
copies upon receipt of all written claims, complaints, notices or inquiries
relating to the condition of its facilities and properties or compliance with
Environmental Laws, and shall promptly cure and have dismissed with prejudice
any actions and proceedings relating to compliance with Environmental Laws; and
(c) provide such information and certifications which the Agent may reasonably
request from time to time to evidence compliance with this Section 7.1.6.
SECTION 7.1.7. Employee Benefit Plans. With respect to each Plan of
Borrower, if any: (a) at all times make prompt payments of contributions with
respect to each such Plan, so as to meet the minimum funding standards required
by sections 302 through 305 of ERISA; (b) upon the receipt of reasonable written
request from the Lenders, promptly furnish the Lenders with copies of each
report required to be filed pursuant to (S).103 of ERISA in connection with such
Plan for each plan-year, including any certified financial statements or
actuarial statements required under said (S)103; (c) immediately notify the
Lenders of any fact, including, but not limited to, any "Reportable Event" (as
that term is defined in (S)4043 of ERISA) arising in connection with any such
Plan which might constitute grounds for the termination thereof or for the
appointment by the appropriate United States District Court of a trustee to
administer such Plan, and, within thirty (30) days after the occurrence of any
Reportable Event, deliver to the Lenders a statement from Borrower's President
detailing such Reportable Event
47
and Borrower's proposed action with respect thereto; and (d) promptly upon their
request therefor, furnish the Lenders such additional information concerning any
such Plan as the Lenders may reasonably request.
SECTION 7.1.8. Designated Senior Indebtedness. The Borrower and the
Lenders hereby agree that all Obligations of the Borrower pursuant to this
Agreement and each other Loan Document constitute Designated Senior Indebtedness
(as defined in the Indenture) for purposes of the Indenture. The Borrower
furthermore agrees that it shall deliver all notices and take such other action
as may be required by the Indenture such that the Obligations of the Borrower
under this Agreement shall at all times constitute Designated Senior
Indebtedness.
SECTION 7.2. Negative Covenants. The Borrower agrees with the
Agent and each Lender and Issuer that, until all Commitments have terminated and
all Obligations have been paid and performed in full, the Borrower will perform
the obligations set forth in this Section 7.2.
SECTION 7.2.1. Business Activities. The Borrower will not, and will
not permit any of its Subsidiaries to, engage in any business activity, except
those described in the first recital and such activities as may be incidental or
related thereto.
SECTION 7.2.2. Indebtedness. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following: (a) Indebtedness in respect of the Loans and
other Obligations; (b) Indebtedness existing as of the Effective Date which is
identified in Item 7.2.2(c) ("Ongoing Indebtedness") of the Disclosure Schedule;
(c) unsecured trade debt incurred in the ordinary course of business (including
open accounts extended by suppliers on normal trade terms in connection with
purchases of goods and services, but excluding Indebtedness incurred through the
borrowing of money or Contingent Liabilities); (d) lease obligations under
leases covering Borrower's or any of its Subsidiary's business premises (which
shall include storage yard facilities); (e) lease obligations arising from the
leasing of equipment located upon the Borrower's properties and utilized in the
production of oil and gas therefrom; (f) lease obligations, not to exceed
$1,000,000 in any Fiscal Year arising from the lease of equipment used in the
ordinary course of business of the Borrower and its Subsidiaries; (g) current
indebtedness to operators under joint operating agreements or compulsory pooling
orders; (h) advances made as operator on behalf of non-operators pursuant to
joint operating agreements or pooling orders; (i) letter of credit reimbursement
agreements with issuers and any reimbursement obligations that arise thereunder,
provided such letters of credit and reimbursement obligations together with all
Letter of Credit Outstandings are not in excess of $125,000,000 at any time
outstanding in the aggregate; (j) funds held for and payments due to third
parties from
48
production from properties; (k) Indebtedness of the Borrower's Subsidiaries
owing to the Borrower or to other Subsidiaries of the Borrower and unsecured
Indebtedness of the Borrower owing to its Subsidiaries; (l) deferred tax
liability; (m) Indebtedness of the Borrower in an outstanding amount not to
exceed $50,000,000 in the aggregate, plus interest and premium, if any; (n) the
guaranties by the Borrower of the obligations of its Subsidiaries otherwise
permitted by the terms of this Agreement, provided that the aggregate
outstanding principal amount of Indebtedness and other obligations of Subject
Subsidiaries guaranteed by the Borrower shall not exceed $25,000,000 at any
time; (o) Indebtedness of any Subject Subsidiary, provided that such
Indebtedness shall not be a direct obligation or Contingent Liability of the
Borrower or any other Subsidiary of the Borrower except as permitted by clause
(n) above; (p) the Borrower's $150,000,000 9% Senior Subordinated Notes Due
2005; (q) Indebtedness in respect of Hedging Obligations, provided that such
Hedging Obligations in respect of oil and gas do not exceed volumes with respect
to any year in excess of 80% of the projected production attributable to the
Borrower's and its Subsidiaries' then proved developed oil and gas properties in
respect of such year; (r) the Borrower's $100,000,000 8 5/8% Senior Subordinated
Notes Due 2009; (s) Indebtedness in an aggregate outstanding amount not to
exceed $150,000,000, plus premium and interest, to be issued in the form of
convertible junior subordinated debentures with a coupon rate of up to 6.5% and
a tenure of at least 20 years; provided such Indebtedness is subordinated, upon
terms satisfactory to the Agent and the Required Lenders, in right of payment to
the payment in full in cash of all Obligations; and (t) any guarantee by the
Borrower issued in connection with any convertible preferred securities issued
by a statutory business trust formed by the Borrower; provided such guarantee is
subordinated, upon terms satisfactory to the Agent and the Required Lenders, in
right of payment to the payment in full in cash of all Obligations.
SECTION 7.2.3. Liens. The Borrower will not, and will not permit any
of its Subsidiaries (other than any Subject Subsidiary) to, create, incur,
assume or suffer to exist any Lien upon any of its property, revenues or assets,
whether now owned or hereafter acquired, except: (a) Liens granted prior to the
Effective Date to secure payment of Indebtedness of the type permitted and
described in clause (b) of Section 7.2.2; (b) Liens for taxes, assessments or
other governmental charges or levies not at the time delinquent or thereafter
payable without penalty or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books; (c) Liens of carriers, warehousemen,
mechanics, materialmen and landlords incurred in the ordinary course of business
for sums not overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books; (d) encumbrances created by production sales
contracts, joint operating agreements and other contracts entered into in the
normal course of Borrower's business for exploration, development and/or
operation
49
of the Borrower's properties; (e) easements, servitudes and other rights of user
which do not materially interfere with the use of such assets; (f) other minor
burdens and defects of or in title which do not secure the payment of money,
other than as described in clause (a); (g) those and only those lease burdens
previously disclosed to the Lenders in writing and existing operating
agreements, farmout agreements and other agreements and contractual obligations
related to the Borrower's properties; (h) Liens incurred in the ordinary course
of business in connection with workmen's compensation, unemployment insurance or
other forms of governmental insurance or benefits, or to secure performance of
tenders, statutory obligations, leases and contracts (other than for borrowed
money) entered into in the ordinary course of business or to secure obligations
on surety or appeal bonds; (i) judgment Liens in existence less than 15 days
after the entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies; (j) Liens affecting
the property of the Subject Subsidiaries only securing Indebtedness permitted by
clause (o) of Section 7.2.2; (k) the Lien granted to Exxon Company, U.S.A. prior
to the Effective Date covering property described in Exhibit H; (l) Liens on
cash collateral delivered pursuant to Section 2.8.7; and (m) Liens granted
pursuant to Section 4.9.
SECTION 7.2.4. Financial Condition. The Borrower will not permit:
(a) its Tangible Net Worth to be less than the sum of $275,000,000 plus 75% of
the proceeds from third parties of the sale by the Borrower and its Subsidiaries
of securities (other than securities constituting Indebtedness) net of
reasonable incidental, brokerage, underwriting and legal costs actually paid to
third parties in connection therewith, less the aggregate of the reductions
after September 30, 1997 in the values at which the Borrower's oil and gas
properties are carried on its books in accordance with GAAP in order to comply
with the full cost method of accounting for oil and gas properties or as
required by ceiling tests established by the Securities and Exchange Commission;
and (b) its Current Ratio as of the end of any Fiscal Quarter to be less than
1:1; provided that for purposes hereof, any unused portion of the Revolving
Period Commitment Amount will be deemed a current asset.
SECTION 7.2.5. Take or Pay Contracts. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into or be a party to any
arrangement for the purchase of materials, supplies, other property or services
if such arrangement by its express terms requires that payment be made by the
Borrower or such Subsidiary regardless of whether such materials, supplies,
other property or services are delivered or furnished to it.
SECTION 7.2.6. Consolidation, Merger, etc. The Borrower will not,
and will not permit any of its Subsidiaries to, liquidate or dissolve,
consolidate with, or merge into or with, any other corporation, or purchase or
otherwise acquire all or substantially
50
all of the assets of any Person (or of any division thereof) except (a) any such
Subsidiary may liquidate or dissolve voluntarily into, and may merge with and
into, the Borrower or any other Subsidiary of the Borrower, and the assets or
stock of any Subsidiary of the Borrower may be purchased or otherwise acquired
by the Borrower or any other Subsidiary of the Borrower; provided, that no
Subsidiary of the Borrower which is not a Subject Subsidiary may dissolve or
liquidate voluntarily into, and neither the Borrower nor any Subsidiary of the
Borrower which is not a Subject Subsidiary may merge with or into, any Subject
Subsidiary unless the Borrower or such Subsidiary which is not a Subject
Subsidiary is the surviving entity, and the assets or stock of any Subsidiary of
the Borrower which is not a Subject Subsidiary may not be purchased or otherwise
acquired by any Subject Subsidiary; and (b) so long as no Default has occurred
and is continuing or would occur after giving effect thereto, the Borrower or
any of its Subsidiaries may purchase all or substantially all of the assets of
any Person, or acquire such Person by merger.
SECTION 7.2.7. Asset Dispositions, etc. The Borrower will not, and
will not permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, exchange or lease, or grant options, warrants or other rights
with respect to, all or any substantial part of its assets (including accounts
receivable and capital stock of Subsidiaries) to any Person (including any
Subject Subsidiary), unless it has either given Lenders 15 Business Days prior
written notice thereof or the aggregate consideration for all such sales,
transfers, conveyances, exchanges or leases made in any six month period ending
June 30 or December 31 is less than Twenty-five Million Dollars ($25,000,000).
Notwithstanding anything to the contrary in this Agreement, the Borrower will
not, and will not permit any of its Subsidiaries (other than a Subject
Subsidiary) to, sell, transfer, lease, contribute or otherwise convey, exchange
or lease, or grant options, warrants or other rights with respect to, all or any
substantial part of its assets (including accounts receivable and capital stock
of Subsidiaries) to any Subject Subsidiary. In the event that the Borrower and
its Subsidiaries shall sell, transfer, lease, contribute or otherwise convey,
exchange or lease properties in excess of Twenty-five Million Dollars
($25,000,000) in the aggregate in any six month period ending June 30 or
December 31, the Applicable Lenders shall have the option to reduce the
Borrowing Base.
SECTION 7.2.8. Guaranties, Loans or Advances. Other than Borrower's
Indebtedness hereunder and other than pursuant to Borrower's current and future
employees' stock option plans, the Borrower will not become or be a guarantor or
surety of, or otherwise become or be responsible in any manner (whether by
agreement to purchase or repurchase any obligation, stock, assets, goods or
services, or to supply or advance any funds, assets, goods or services, or
otherwise, whether directly or indirectly) with respect to, any undertaking of
any other person or entity, nor make or permit to exist any loans or advances to
any other Persons which in the aggregate exceed the amount of $500,000 at any
time
51
outstanding, except for (a) the endorsement, in the ordinary course of
collection, of instruments payable to Borrower, or its order; (b) advances made
and liabilities existing under joint operating agreements and compulsory pooling
orders; (c) the liability to account to third persons for their share of
production proceeds received by Borrower; (d) loans and advances to employees
for the sole purpose of permitting such employees to purchase shares of
Borrower's capital stock; (e) loans and advances to employees of the Borrower
and its Subsidiaries for travel and other business expenses; (f)loans and
advances by the Borrower to any of its Subsidiaries or by any Subsidiary of the
Borrower to the Borrower or any other Subsidiary of the Borrower; (g) guaranties
by the Borrower of obligations of its Subsidiaries otherwise permitted pursuant
to this Agreement, provided that the aggregate outstanding principal amount of
Indebtedness and other obligations of Subject Subsidiaries so guaranteed shall
not at any time exceed $25,000,000 in the aggregate; and (h)any guarantee by the
Borrower issued in connection with any convertible preferred securities issued
by a statutory business trust formed by the Borrower; provided such guarantee is
subordinated, upon terms satisfactory to the Agent and the Required Lenders, in
right of payment to the payment in full in cash of all Obligations.
SECTION 7.2.9. Other Agreements. The Borrower will not enter into
any agreement containing any provision which would be violated or breached by
the performance of its obligations hereunder or under any instrument or document
delivered or to be delivered by it hereunder or in connection herewith.
SECTION 7.2.10. Transactions with Affiliates. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into, or cause, suffer or
permit to exist any arrangement or contract with any of its other Affiliates
unless such arrangement or contract is determined by the Board of Directors of
the Borrower to be (a) fair and equitable to the Borrower or such Subsidiary and
(b) an arrangement or contract of the kind which would be entered into by a
prudent Person in the position of the Borrower or such Subsidiary with a Person
which is not one of its Affiliates.
SECTION 7.2.11. Negative Pledges, Restrictive Agreements, etc. The
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any agreement (excluding this Agreement, any other Loan Document, and any
agreement governing any Indebtedness permitted by clause (b), (p),(r),(s) or (t)
of Section 7.2.2) prohibiting (a) the creation or assumption of any Lien upon
its properties, revenues or assets (other than the properties, revenues or
assets of the Subject Subsidiaries) whether now owned or hereafter acquired, or
the ability of the Borrower to amend or otherwise modify this Agreement or any
other Loan Document; or (b) the ability of any Subsidiary (other than a Subject
Subsidiary) to make any payments, directly or indirectly, to the Borrower by way
of dividends, advances, repayments of loans or advances, reimbursements of
management and other intercompany charges, expenses and accruals or other
returns on investments, or any other
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agreement or arrangement which restricts the ability of any such Subsidiary
(other than a Subject Subsidiary) to make any payment, directly or indirectly,
to the Borrower. Notwithstanding the foregoing, any agreement governing any
Indebtedness permitted by clause (p),(r),(s) or (t) of Section 7.2.2 shall not
prohibit the creation or assumption of any Lien upon the properties, revenues or
assets of the Borrower or any Subsidiary (other than a Subject Subsidiary),
whether now owned or hereafter acquired securing any Senior Debt, and no
agreement governing any Indebtedness permitted by clause (p),(r),(s) or (t) of
Section 7.2.2 shall prohibit the ability of any Subsidiary (other than a Subject
Subsidiary) to make any payments, directly or indirectly, to the Borrower or the
ability of the Borrower to amend or otherwise modify this Agreement or any other
Loan Document.
SECTION 7.2.12. Investment in Subsidiaries. If any Default or Event
of Default shall have occurred and is continuing or during any period in which
the aggregate principal amount of Senior Debt shall exceed the Borrowing Base
then in effect, the Borrower shall not, and shall not permit any of its
Subsidiaries which are not Subject Subsidiaries to, incur any Contingent
Liabilities for any Indebtedness or other obligations of any Subject Subsidiary,
make any loan or advance to, or assume, redeem, purchase, defease, pay or
forgive any Indebtedness or other obligation of, or make any equity investment
in, or incur any Indebtedness on behalf of, any Subsidiary and the Borrower
shall not, and shall not permit any of its Subsidiaries which are not Subject
Subsidiaries to, apply any of its funds, property or assets to the purchase,
redemption, sinking fund for or other retirement of any shares of any class of
capital stock of a Subsidiary or warrants, options or other rights with respect
to any shares of any class of such capital stock or any Indebtedness or
obligations of any Subsidiary.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following
events or occurrences described in this Section 8.1 shall constitute an "Event
of Default".
SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall
default in the payment or prepayment when due of any principal of or interest on
any Loan or any Reimbursement Obligations, or the Borrower shall default in the
payment when due of any commitment fee or any letter of credit fees or of any
other Obligation.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty of
the Borrower made or deemed to be made hereunder or in any other Loan Document
or any other writing or certificate furnished by or on behalf of the Borrower to
the Agent or any
53
Lender for the purposes of or in connection with this Agreement or any such
other Loan Document (including any certificates delivered pursuant to Article V)
is or shall be incorrect when made in any material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations.
The Borrower shall default in the due performance and observance of any of its
obligations under Sections 7.2.4 or 7.2.8.
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations.
The Borrower shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document, and such default shall
continue unremedied for a period of 15 days after the Borrower shall become
aware of such default, whether by notice thereof given to the Borrower by the
Agent or any Lender or otherwise.
SECTION 8.1.5. Default on Other Indebtedness. A default shall occur
in the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness for borrowed money (other than
Indebtedness described in Section 8.1.1) or Contingent Liability of the Borrower
or any of its Subsidiaries, or a default shall occur in the performance or
observance of any obligation or condition with respect to such Indebtedness if
the effect of such default is to accelerate the maturity of any such
Indebtedness or such default shall continue unremedied for any applicable period
of time sufficient to permit the holder or holders of such Indebtedness, or any
trustee or agent for such holders, to cause such Indebtedness to become due and
payable prior to its expressed maturity.
SECTION 8.1.6. Other Material Obligations. Default in the payment
for a period in excess of sixty (60) days of when due, or in the performance or
observance of any material obligation of, or condition agreed to by, the
Borrower or any Subsidiary with respect to any material purchase or lease of
goods or services (except those which would not have a material adverse effect
on the financial conditions, operations, assets, business, properties or
prospects of the Borrower and its Subsidiaries, taken as a whole, and except
only to the extent that the existence of any such default is being contested by
the Borrower or such Subsidiary in good faith by appropriate proceedings).
SECTION 8.1.7. Judgments. Any judgment or order for the payment of
money in excess of $20,000,000 (or its equivalent) shall be rendered against the
Borrower or any of its Subsidiaries and either (a) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order; or (b) there
shall be any period of 10 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect.
SECTION 8.1.8. Pension Plans. Any of the following events shall
occur with respect to any Pension Plan: (a) the institution
54
of any steps by the Borrower, any member of its Controlled Group or any other
Person to terminate a Pension Plan if, as a result of such termination, the
Borrower or any such member could be required to make a contribution to such
Pension Plan, or could reasonably expect to incur a liability or obligation to
such Pension Plan, in excess of $1,000,000; or (b) a contribution failure occurs
with respect to any Pension Plan sufficient to give rise to a Lien under section
302(f) of ERISA.
SECTION 8.1.9. Bankruptcy, Insolvency, etc. The Borrower or any of
its Subsidiaries shall (a) become insolvent or generally fail to pay, or admit
in writing its inability or unwillingness to pay, debts as they become due; (b)
apply for, consent to, or acquiesce in, the appointment of a trustee, receiver,
sequestrator or other custodian for the Borrower or any of its Subsidiaries or
any property of any thereof, or make a general assignment for the benefit of
creditors; (c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver, sequestrator
or other custodian for the Borrower or any of its Subsidiaries or for a
substantial part of the property of any thereof, and such trustee, receiver,
sequestrator or other custodian shall not be discharged within 60 days, provided
that the Borrower, for itself and each of its Subsidiaries, hereby expressly
authorizes the Agent and each Lender to appear in any court conducting any
relevant proceeding during such 60-day period to preserve, protect and defend
their rights under the Loan Documents; (d) permit or suffer to exist the
commencement of any bankruptcy, reorganization, debt arrangement or other case
or proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, in respect of the Borrower or any of its
Subsidiaries, and, if any such case or proceeding is not commenced by the
Borrower or such Subsidiary, such case or proceeding shall be consented to or
acquiesced in by the Borrower or such Subsidiary or shall result in the entry of
an order for relief or shall remain for 60 days undismissed, provided that the
Borrower, for itself and each of its Subsidiaries, hereby expressly authorizes
the Agent and each Lender to appear in any court conducting any such case or
proceeding during such 60-day period to preserve, protect and defend their
rights under the Loan Documents; or (e) take any corporate action authorizing,
or in furtherance of, any of the foregoing.
SECTION 8.1.10. Change of Control. A Change of Control shall occur.
SECTION 8.2. Action if Bankruptcy. If any Event of Default
described in clauses (a) through (d) of Section 8.1.9 shall occur with respect
to the Borrower or any of its Subsidiaries, the Commitments (if not theretofore
terminated) shall automatically terminate and the outstanding principal amount
of all outstanding Loans and all other Obligations shall automatically be and
become immediately due and payable, without notice (including notice of intent
to accelerate and notice of acceleration) or demand and notice and demand, are
hereby waived.
55
SECTION 8.3. Action if Other Event of Default. If any Event of
Default (other than any Event of Default described in clauses (a) through (d) of
Section 8.1.9 (with respect to the Borrower or any of its Subsidiaries) shall
occur for any reason, whether voluntary or involuntary, and be continuing, the
Agent, upon the direction of the Required Lenders, shall by notice to the
Borrower declare all or any portion of the outstanding principal amount of the
Loans and other Obligations to be due and payable and/or the Commitments (if not
theretofore terminated) to be terminated, whereupon the full unpaid amount of
such Loans and other Obligations which shall be so declared due and payable
shall be and become immediately due and payable, without further notice
(including notice of intent to accelerate and notice of acceleration), demand or
presentment, and/or, as the case may be, the Commitments shall terminate, all of
which notice, demand and presentment are hereby waived.
ARTICLE IX
THE AGENT
SECTION 9.1. Actions. Each Lender hereby appoints Bank of Montreal
as its Agent under and for purposes of this Agreement, the Notes, the Letters of
Credit and each other Loan Document. Each Lender authorizes the Agent and each
Issuer to act on behalf of such Lender under this Agreement, the Notes, the
Letters of Credit and each other Loan Document and, in the absence of other
written instructions from the Required Lenders received from time to time by the
Agent (with respect to which the Agent agrees that it will comply, except as
otherwise provided in this Section or as otherwise advised by counsel), to
exercise such powers hereunder and thereunder as are specifically delegated to
or required of the Agent or such Issuer by the terms hereof and thereof,
together with such powers as may be reasonably incidental thereto. Each Lender
hereby indemnifies (which indemnity shall survive any termination of this
Agreement) the Agent, pro rata according to such Lender's Percentage, from and
against any and all liabilities, obligations, losses, damages, claims, costs or
expenses of any kind or nature whatsoever which may at any time be imposed on,
incurred by, or asserted against, the Agent or such Issuer in any way relating
to or arising out of its services as Agent under this Agreement, the Notes, the
Letters of Credit and any other Loan Document, including reasonable attorneys'
fees, and as to which the Agent or such Issuer is not reimbursed by the
Borrower; provided, however, that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, claims, costs or
expenses which are determined by a court of competent jurisdiction in a final
proceeding to have resulted solely from the Agent's gross negligence or wilful
misconduct. The Agent or any Issuer shall not be required to take any action
hereunder, under the Notes under the Letters of Credit or under any other Loan
Document, or to prosecute or defend any suit in respect of this Agreement, the
Notes, the Letters of Credit or any other Loan Document, unless it
56
is indemnified hereunder to its satisfaction. If any indemnity in favor of the
Agent or any Issuer shall be or become, in the Agent's determination,
inadequate, the Agent or such Issuer may call for additional indemnification
from the Lenders and cease to do the acts indemnified against hereunder until
such additional indemnity is given.
SECTION 9.2. Funding Reliance, etc. Unless the Agent shall have
been notified by telephone, confirmed in writing, by any Lender by (i) 5:00
p.m., United States Central time, on the day prior to a Borrowing in the case of
LIBO Rate Loans and (ii) 12:00 Noon United States Central time on the day of any
Borrowing in the case of Base Rate Loans that such Lender will not make
available the amount which would constitute its Percentage of such Borrowing on
the date specified therefor, the Agent may assume that such Lender has made such
amount available to the Agent and, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If and to the extent that such
Lender shall not have made such amount available to the Agent, such Lender and
the Borrower severally agree to repay the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
the Agent made such amount available to the Borrower to the date such amount is
repaid to the Agent, at the interest rate applicable at the time to Loans
comprising such Borrowing.
SECTION 9.3. Exculpation. Neither the Agent, any Issuer nor any of
their respective directors, officers, employees or agents shall be liable to any
Lender for any action taken or omitted to be taken by it or them under this
Agreement or any other Loan Document, or in connection herewith or therewith,
except for its or their own wilful misconduct or gross negligence, nor
responsible for any recitals or warranties herein or therein, nor for the
effectiveness, enforceability, validity or due execution of this Agreement or
any other Loan Document, nor to make any inquiry respecting the performance by
the Borrower of its obligations hereunder or under any other Loan Document. Any
such inquiry which may be made by the Agent or any Issuer shall not obligate it
to make any further inquiry or to take any action. The Agent and each Issuer
shall be entitled to rely upon advice of counsel concerning legal matters and
upon any notice, consent, certificate, statement or writing which the Agent
believes to be genuine and to have been presented by a proper Person.
SECTION 9.4. Successor. The Agent may resign as such at any time
upon at least 30 days' prior notice to the Borrower and all Lenders. If the
Agent at any time shall resign, the Required Lenders may appoint another Lender
as a successor Agent which shall thereupon become the Agent hereunder. If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the retiring Agent's giving
notice of resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be one of the Lenders or a commercial
banking institution organized
57
under the laws of the U.S. (or any State thereof) or a U.S. branch or agency of
a commercial banking institution, and having a combined capital and surplus of
at least $500,000,000. Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall be entitled to receive from the
retiring Agent such documents of transfer and assignment as such successor Agent
may reasonably request, and shall thereupon succeed to and become vested with
all rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation hereunder as the Agent, the
provisions of (a) this Article IX shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent under this Agreement;
and (b) Section 10.3 and Section 10.4 shall continue to inure to its benefit.
SECTION 9.5. Loans by Bank of Montreal. Bank of Montreal shall
have the same rights and powers with respect to (x) the Loans made by it or any
of its Affiliates, and (y) the Notes held by it or any of its Affiliates as any
other Lender and may exercise the same as if it were not the Agent. Bank of
Montreal and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower or any Subsidiary or
Affiliate of the Borrower as if Bank of Montreal were not the Agent hereunder.
Each Issuer shall have the same rights and powers hereunder as the other Lenders
and may exercise the same rights and powers as though it were not an Issuer.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it
has, independently of the Agent and each other Lender, and based on such
Lender's review of the financial information of the Borrower, this Agreement,
the other Loan Documents (the terms and provisions of which being satisfactory
to such Lender) and such other documents, information and investigations as such
Lender has deemed appropriate, made its own credit decision to extend its
Commitments. Each Lender also acknowledges that it will, independently of the
Agent and each other Lender, and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any other Loan
Document.
SECTION 9.7. Copies, etc. The Agent shall give prompt notice to
each Lender of each notice or request required or permitted to be given to the
Agent by the Borrower pursuant to the terms of this Agreement (unless
concurrently delivered to the Lenders by the Borrower). The Agent will
distribute to each Lender each document or instrument received for its account
and copies of all other communications received by the Agent from the Borrower
for distribution to the Lenders by the Agent in accordance with the terms of
this Agreement.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Borrower and the Required Lenders; provided, however, that
no such amendment, modification or waiver which would: (a) modify any
requirement hereunder that any particular action be taken by all the Lenders or
by the Required Lenders or by the Applicable Lenders shall be effective unless
consented to by each Lender; (b) modify this Section 10.1, change the definition
of "Required Lenders" or "Applicable Lenders", increase any Commitment Amount or
the Percentage of any Lender, reduce any fees described in Article III, or
extend any Commitment Termination Date shall be made without the consent of each
Lender and each holder of a Note; (c) extend the due date for, or reduce the
amount of, any scheduled repayment or prepayment of principal of or interest on
any Loan (or reduce the principal amount of or rate of interest on any Loan)
shall be made without the consent of the holder of that Note evidencing such
Loan; or (d) affect adversely the interests, rights or obligations of the Agent
as the Agent shall be made without consent of the Agent.
No failure or delay on the part of the Agent, any Lender, any Issuer or
the holder of any Note in exercising any power or right under this Agreement or
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on the Borrower in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by the Agent, any Lender,
any Issuer or the holder of any Note under this Agreement or any other Loan
Document shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION 10.2. Notices. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth below its signature hereto or set
forth in the Lender Assignment Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed given when
received; any notice, if transmitted by facsimile, shall be deemed given when
transmitted.
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SECTION 10.3. Payment of Costs and Expenses. The Borrower agrees to pay
on demand all reasonable expenses of the Agent (including the reasonable fees
and out-of-pocket expenses of counsel to the Agent and of local counsel, if any,
who may be retained by counsel to the Agent) in connection with (a) the
negotiation, preparation, execution and delivery of this Agreement and of each
other Loan Document, including schedules and exhibits, and any amendments,
waivers, consents, supplements or other modifications to this Agreement or any
other Loan Document as may from time to time hereafter be required, whether or
not the transactions contemplated hereby are consummated, and (b) the
preparation and review of the form of any document or instrument relevant to
this Agreement or any other Loan Document.
The Borrower further agrees to pay, and to save the Agent and the
Lenders and Issuers harmless from all liability for, any stamp or other taxes
which may be payable in connection with the execution or delivery of this
Agreement, the borrowings hereunder, or the issuance of the Notes or any other
Loan Documents. The Borrower also agrees to reimburse the Agent and each Lender
and Issuer upon demand for all reasonable out-of-pocket expenses (including
attorneys' fees and legal expenses) incurred by the Agent or such Lender in
connection with (x) the negotiation of any restructuring or "work-out", whether
or not consummated, of any Obligations, and (y) the enforcement of any
Obligations.
SECTION 10.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments
and the issuance of Letters of Credit, the Borrower hereby indemnifies,
exonerates and holds the Agent, each Issuer and each Lender and each of their
respective officers, directors, employees and agents (collectively, the
"Indemnified Parties") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements (collectively, the
"Indemnified Liabilities"), incurred by the Indemnified Parties or any of them
as a result of, or arising out of, or relating to (a) any transaction financed
or to be financed in whole or in part, directly or indirectly, with the proceeds
of any Loan or Letter of Credit; (b) the entering into and performance of this
Agreement and any other Loan Document by any of the Indemnified Parties (except,
with respect to any action brought by or on behalf of the Borrower, to the
extent such Indemnified Party shall be found liable to the Borrower pursuant to
a finding by a court of competent jurisdiction, not subject to appeal); (c) any
investigation, litigation or proceeding related to any environmental cleanup,
audit, compliance or other matter relating to the protection of the environment
or the Release by the Borrower or any of its Subsidiaries of any Hazardous
Material; or (d) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real property
owned or
60
operated by the Borrower or any Subsidiary thereof of any Hazardous Material
(including any losses, liabilities, damages, injuries, costs, expenses or claims
asserted or arising under any Environmental Law), regardless of whether caused
by, or within the control of, the Borrower or such Subsidiary, except for any
such Indemnified Liabilities arising for the account of a particular Indemnified
Party by reason of the relevant Indemnified Party's gross negligence or wilful
misconduct. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
SECTION 10.5. Survival. The obligations of the Borrower under Sections
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under
Section 9.1, shall in each case survive any termination of this Agreement, the
payment in full of all Obligations and the termination of all Commitments. The
representations and warranties made by the Borrower in this Agreement and in
each other Loan Document shall survive the execution and delivery of this
Agreement and each such other Loan Document.
SECTION 10.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7. Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 10.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be executed by the Borrower and the Agent and be deemed to be an
original and all of which shall constitute together but one and the same
agreement. This Agreement shall become effective when counterparts hereof
executed on behalf of the Borrower and each Lender (or notice thereof
satisfactory to the Agent) shall have been received by the Agent and notice
thereof shall have been given by the Agent to the Borrower and each Lender.
SECTION 10.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE
NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. This
Agreement, the Notes and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and
61
supersede any prior agreements, written or oral, with respect
thereto.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
SECTION 10.10. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that: (a) the Borrower may not assign
or transfer its rights or obligations hereunder without the prior written
consent of the Agent and all Lenders; and (b) the rights of sale, assignment and
transfer of the Lenders are subject to Section 10.11.
SECTION 10.11. Sale and Transfer of Loans and Notes; Participations in
Loans and Notes. Each Lender may assign, or sell participations in, its Loans
and Commitments to one or more other Persons in accordance with this Section
10.11.
SECTION 10.11.1. Assignments. Any Lender,
(a) with the written consent of the Borrower (in its sole
discretion) and the Agent (which consent shall not be unreasonably
delayed or withheld) and each Issuer, may at any time assign and
delegate to one or more commercial banks or other financial
institutions, and
(b) with notice to the Borrower and the Agent and each Issuer,
but without the consent of the Borrower or the Agent or any Issuer, may
assign and delegate to any of its Affiliates or to any other Lender
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), all or any fraction of such Lender's total Loans,
Commitments and participations in Letters of Credit (which assignment and
delegation shall be of a constant, and not a varying, percentage of all the
assigning Lender's Loans and Commitments and participations in Letters of
Credit) in a minimum aggregate amount of $20,000,000 or such Lender's Percentage
of the Commitment Amount, if less; provided, however, that any such Assignee
Lender will comply, if applicable, with the provisions contained in the last
sentence of Section 4.6; and further, provided, however, that, the Borrower and
the Agent shall be entitled to continue to deal solely and directly with such
Lender in connection with the interests so assigned and delegated to an Assignee
Lender until
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(c) written notice of such assignment and delegation, together
with payment instructions, addresses and related information with
respect to such Assignee Lender, shall have been given to the Borrower
and the Agent and each Issuer by such Lender and such Assignee Lender,
(d) such Assignee Lender shall have executed and delivered to
the Borrower, the Agent and each Issuer a Lender Assignment Agreement,
accepted by the Borrower, the Agent and each Issuer, and
(e) the processing fees described below shall have been paid.
From and after the date that the Borrower and the Agent and each Issuer accepts
such Lender Assignment Agreement, (x) the Assignee Lender thereunder shall be
deemed automatically to have become a party hereto and to the extent that rights
and obligations hereunder have been assigned and delegated to such Assignee
Lender in connection with such Lender Assignment Agreement, shall have the
rights and obligations of a Lender hereunder and under the other Loan Documents,
and (y) the assignor Lender, to the extent that rights and obligations hereunder
have been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within five Business Days after its receipt of notice that the
Agent has received an executed Lender Assignment Agreement, the Borrower shall
execute and deliver to the Agent (for delivery to the relevant Assignee Lender)
new Notes evidencing such Assignee Lender's assigned Loans and Commitments and,
if the assignor Lender has retained Loans and Commitments hereunder, replacement
Notes in the principal amount of the Loans and Commitments retained by the
assignor Lender hereunder (such Notes to be in exchange for, but not in payment
of, those Notes then held by such assignor Lender). Each such Note shall be
dated the date of the predecessor Notes. The assignor Lender shall ▇▇▇▇ the
predecessor Notes "exchanged" and deliver them to the Borrower. Accrued interest
on that part of the predecessor Notes evidenced by the new Notes, and accrued
fees, shall be paid as provided in the Lender Assignment Agreement. Accrued
interest on that part of the predecessor Notes evidenced by the replacement
Notes shall be paid to the assignor Lender. Accrued interest and accrued fees
shall be paid at the same time or times provided in the predecessor Notes and in
this Agreement. Such assignor Lender or such Assignee Lender must also pay a
processing fee to the Agent upon delivery of any Lender Assignment Agreement in
the amount of $2,500. Any attempted assignment and delegation not made in
accordance with this Section 10.11.1 shall be null and void.
SECTION 10.11.2. Participations. Any Lender, with the prior written
consent of the Borrower in its sole discretion, may at any time sell to one or
more commercial banks (each of such commercial banks being herein called a
"Participant") participating interests in any of the Loans, Commitments, or
other interests of
63
such Lender hereunder; provided, however, that (a) no participation contemplated
in this Section 10.11 shall relieve such Lender from its Commitments or its
other obligations hereunder or under any other Loan Document, (b) such Lender
shall remain solely responsible for the performance of its Commitments and such
other obligations, (c) the Borrower and each other Obligor and the Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and each of the other Loan
Documents, (d) no Participant, unless such Participant is an Affiliate of such
Lender, or is itself a Lender, shall be entitled to require such Lender to take
or refrain from taking any action hereunder or under any other Loan Document,
except that such Lender may agree with any Participant that such Lender will
not, without such Participant's consent, take any actions of the type described
in clause (b) or (c) of Section 10.1, and (e) the Borrower shall not be required
to pay any amount under Section 4.6 that is greater than the amount which it
would have been required to pay had no participating interest been sold.
SECTION 10.12. Other Transactions. Nothing contained herein shall
preclude the Agent or any other Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Affiliates in which the Borrower or such
Affiliate is not restricted hereby from engaging with any other Person. The
parties hereto agree that if at any time the Borrower or its Subsidiaries shall
grant to the Lenders Liens securing the obligations of the Borrower to the
Lenders and Issuers hereunder, such Liens shall also secure obligations to any
Lender in respect of any letter of credit reimbursement obligations permitted by
Section 7.2.2.(i) hereof owing to one or more Lenders.
SECTION 10.13. Sale and Purchase of Loans. On the Effective Date, the
aggregate principal balance of the Prior Indebtedness outstanding is
$189,000,000 as shown on Schedule F-2 and each Lender represents and warrants
for itself that its outstanding loans under the Original Credit Agreement as of
the Effective Date is as set forth in the second column of Schedule F-2. Lenders
hereby sell, assign, transfer and convey, and Lenders hereby purchase and accept
so much of the Prior Indebtedness and all of the rights, titles, benefits,
interests, privileges, claims, liens, security interests, and obligations
existing and to exist (collectively the "Interests") such that each Lender's
Percentage of the outstanding loans and commitments under the Original Credit
Agreement as amended and restated by this Agreement shall be as set forth in
Schedule F-1 as of the Effective Date. The foregoing assignment, transfer and
conveyance are without recourse to the Lenders and without any warranties
whatsoever as to title, enforceability, collectibility, documentation or freedom
from liens or encumbrances, in whole or in part, other than the warranty by each
Lender that it has not sold, transferred, conveyed or encumbered such Interests.
If as a result thereof, a Lender's Percentage of the outstanding Loans under
this Agreement is less than its outstanding loans under the Original Credit
Agreement on
64
the Effective Date, the difference set forth in the last column of Schedule F-2
shall be remitted to such Lender by the Agent upon receipt of funds from the
other Lenders shown in the last column of Schedule F-2 on the Effective Date.
Each Lender so acquiring a part of such outstanding loans assumes its Percentage
of the outstanding Loans, Commitments, rights, titles, interests, privileges,
claims, liens, security interests, benefits and obligations under this Agreement
and the other Loan Documents and any Lender so acquiring an interest in such
outstanding Loans may be paid a cost of funds with respect thereto as mutually
agreed between the Borrower and such Lender. Lenders are proportionately
released from the obligations assumed by Lenders so acquiring such obligations
and, to that extent, the Lenders so released shall have no further obligation
under the Original Credit Agreement, as amended and restated hereby. The
Borrower hereby represents and warrants that it has no defenses, offsets or
counterclaims to the Prior Indebtedness or its obligations or rights under this
Agreement, including, without limitation, the Interests being assigned pursuant
to this Section 10.13. Any loans outstanding under the Original Credit Agreement
on the Effective Date bearing interest at a LIBO Rate (as defined therein) shall
be deemed continued as a Loan under this Agreement at such LIBO Rate and for the
Interest Period with respect thereto under the Original Credit Agreement. The
promissory notes evidencing the Prior Indebtedness shall be appropriately
endorsed and delivered by the holders thereof to the Agent and retained by the
Agent until the Obligations shall have been paid in full, all Letters of Credit
have expired or been canceled and the Commitments have been canceled.
SECTION 10.14. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE
LENDERS, ANY ISSUER, OR THE BORROWER MAY BE BROUGHT AND MAINTAINED IN THE COURTS
OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE
BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
65
INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 10.15. Waiver of Jury Trial. THE AGENT, THE LENDERS, EACH
ISSUER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR THE
BORROWER. THE BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE AGENT, EACH ISSUER AND THE LENDERS ENTERING INTO
THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
66
VINTAGE PETROLEUM, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Executive Vice President and
Chief Financial Officer
Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Executive Vice President
and Chief Financial
Officer
67
BANK OF MONTREAL
acting through its U.S. branches
and agencies, including initially
its Chicago, Illinois branch,
as Agent
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director, U.S. Corporate
Banking
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.:
---------------------------
Attention:
-------------------------------
-------------------------------
with copy to:
Bank of Montreal
Houston Agency
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Director
68
LENDERS:
BANK OF MONTREAL
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director, U.S. Corporate
Banking
Domestic
Office: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.:
---------------------------
Attention:
-------------------------------
-------------------------------
LIBOR
Office: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.:
---------------------------
Attention:
-------------------------------
-------------------------------
with copy to:
Bank of Montreal
Houston Agency
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
69
THE CHASE MANHATTAN BANK,
as Lender and Lead Manager
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
Domestic
Office: The Chase Manhattan Bank
1 Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Loan and Agency
Services
LIBOR
Office: The Chase Manhattan Bank
1 Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: Loan and Agency
Services
70
BANKBOSTON, N.A.,
as Lender and Lead Manager
By:/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Domestic 01-08-04
Office: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
LIBOR 01-08-04
Office: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Loan Administrator
71
NATIONSBANK OF TEXAS, N.A.,
as Lender and Lead Manager
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: SVP
Domestic
Office: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
LIBOR
Office: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
72
SOCIETE GENERALE, SOUTHWEST AGENCY,
as Lender and Lead Manager
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Domestic
Office: 4800 ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: Loan Operations
LIBOR
Office: 4800 ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: Loan Operations
with copy to:
Societe Generale
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
73
ABN AMRO BANK, N.A.,
as Lender
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Group Vice President
Domestic
Office:
Facsimile No.:
---------------------------
Attention:
-------------------------------
-------------------------------
LIBOR
Office:
Facsimile No.:
---------------------------
Attention:
-------------------------------
-------------------------------
74
BANK OF OKLAHOMA,
NATIONAL ASSOCIATION
as Lender
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice Pres.
Domestic
Office:
Facsimile No.:▇▇▇-▇▇▇-▇▇▇▇
Attention:
-------------------------------
-------------------------------
LIBOR
Office:
Facsimile No.:
---------------------------
Attention:
-------------------------------
-------------------------------
75
BANQUE PARIBAS,
as Lender
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Domestic
Office:
Facsimile No.:
---------------------------
Attention:
-------------------------------
-------------------------------
LIBOR
Office:
Facsimile No.:
---------------------------
Attention:
-------------------------------
-------------------------------
76
CIBC INC.,
as Lender
By:/s/ ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
By:
--------------------------------------
Name:
Title:
Domestic
Office:
Facsimile No.:770/319-4950
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
LIBOR
Office:
Facsimile No.:770/319-4950
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
77
CREDIT LYONNAIS,
as Lender
By:/s/ Philippe Soustra
--------------------------------------
Name: Philippe Soustra
Title: Senior Vice President
By:
--------------------------------------
Name:
Title:
Domestic
Office:
Facsimile No.:
---------------------------
Attention:
-------------------------------
-------------------------------
LIBOR
Office:
Facsimile No.:
---------------------------
Attention:
-------------------------------
-------------------------------
78
SANWA BANK, LIMITED,
as Lender
By:/s/ C. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: C. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
By:
--------------------------------------
Name:
Title:
Domestic
Office:
Facsimile No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
-------------------------------
-------------------------------
LIBOR
Office:
Facsimile No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ Hara
79
THE FIRST NATIONAL BANK OF CHICAGO,
as Lender
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Attorney-In-Fact
Domestic
Office:
Facsimile No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
LIBOR
Office:
Facsimile No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, N.A.
as Lender
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
Domestic
Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
LIBOR
Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with copy to:
Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
81
For purposes of selling, assigning, transferring and conveying its
respective Interests, the undersigned have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date and year
first above written.
MELLON BANK, N.A.
By:/s/ A. ▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: A. ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
82
EXHIBIT A
NOTE
$_____________ ____________, 19___
FOR VALUE RECEIVED, the undersigned, VINTAGE PETROLEUM, INC., a
Delaware corporation (the "Borrower"), promises to pay to the order of
_______________________ (the "Lender") the principal sum of ____________________
DOLLARS ($____________) or, if less, the aggregate unpaid principal amount of
all Loans made by the Lender pursuant to that certain Amended and Restated
Credit Agreement, dated as of December 8, 1997 (together with all amendments and
other modifications, if any, from time to time thereafter made thereto, the
"Credit Agreement"), among the Borrower, BANK OF MONTREAL, as Agent, the various
financial institutions (including the Lender) as are, or may from time to time
become, parties thereto, payable in installments as set forth in the Credit
Agreement, with a final installment (in the amount necessary to pay in full this
Note) due and payable on the Stated Maturity Date set forth therein.
The Borrower also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made in lawful money
of the United States of America in same day or immediately available funds to
the account designated by the Agent pursuant to the Credit Agreement.
This Note is one of the Notes referred to in, and evidences
Indebtedness incurred under, the Credit Agreement, to which reference is made
for a statement of the terms and conditions on which the Borrower is permitted
and required to make prepayments and repayments of principal of the Indebtedness
evidenced by this Note and on which such Indebtedness may be declared to be
immediately due and payable. Unless otherwise defined, terms used herein have
the meanings provided in the Credit Agreement.
[This Note is an extension, renewal, and replacement of, and is given
in substitution and exchange for, that certain Note, dated August 29, 1996, in
the original principal amount of ____________, executed by Borrower and payable
to the order of Lender in connection with the Original Credit Agreement, and the
indebtedness evidenced hereby and thereby is a continuing indebtedness and
nothing herein contained or implied shall be construed to deem such indebtedness
or any accrued and unpaid interest thereon paid, satisfied, novated or
terminated, or any collateral or security therefore released or terminated.]
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
THIS NOTE HAS BEEN DELIVERED IN CHICAGO, ILLINOIS AND SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
ILLINOIS.
VINTAGE PETROLEUM, INC.
By
-----------------------
Title:
2
LOANS AND PRINCIPAL PAYMENTS
---------------------------------------------------------------------------------------------------------------------------
Amount of Unpaid
Amount of Principal Principal
Loan Made Repaid Balance
--------- --------- -------
Interest
Base LIBO Period (if Base LIBO Base LIBO Notation
Date Rate Rate applicable) Rate Rate Rate Rate Total Made By
---- ---- ---- ----------- ---- ---- ---- ---- ----- -------
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3
EXHIBIT B
BORROWING REQUEST
Bank of Montreal
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: [Name]
[Title]
VINTAGE PETROLEUM, INC.
Gentlemen and Ladies:
This Borrowing Request is delivered to you pursuant to Section 2.3 of
the Amended and Restated Credit Agreement, dated as of December 8, 1997
(together with all amendments, if any, from time to time thereafter made
thereto, the "Credit Agreement"), among Vintage Petroleum, Inc., a Delaware
corporation (the "Borrower"), certain financial institutions and Bank of
Montreal (the "Agent"). Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the Credit Agreement.
The Borrower hereby requests that a Revolving Loan be made in the
aggregate principal amount of $__________ on __________, 19___ as a [LIBO Rate
Loan having an Interest Period of _______ months] [Base Rate Loan].
The Borrower hereby acknowledges that, pursuant to Section 5.2.2 of the
Credit Agreement, each of the delivery of this Borrowing Request and the
acceptance by the Borrower of the proceeds of the Loans requested hereby
constitutes a representation and warranty by the Borrower that, on the date of
such Loans, and before and after giving effect thereto and to the application of
the proceeds therefrom, all statements set forth in Section 5.2.1 are true and
correct in all material respects.
The Borrower certifies that the Senior Debt of the Borrower and its
Subsidiaries, other than Loans made pursuant to the Credit Agreement, is
$_____________ as of the date hereof.
The Borrower agrees that if prior to the time of the Borrowing
requested hereby any matter certified to herein by it will not be true and
correct at such time as if then made, it will immediately so notify the Agent.
Except to the extent, if any, that prior to the time of the Borrowing requested
hereby the Agent shall receive written notice to the contrary from the Borrower,
each matter certified to herein shall be deemed once again to be certified as
true and correct at the date of such Borrowing as if then made.
Please wire transfer the proceeds of the Borrowing requested hereby to
the accounts of the following persons at the financial institutions indicated
respectively:
Person to be Paid
Amount to be ------------------------------------ Name, Address, etc.
Transferred Name Account No. of Transferee Lender
----------- ---- ----------- --------------------
$
----------- ------------ ---------- --------------------
--------------------
Attention:
---------
$
----------- ------------ ----------- --------------------
--------------------
Attention:
---------
Balance of The Borrower
such proceeds ----------- --------------------
--------------------
Attention:
---------
The Borrower has caused this Borrowing Request to be executed and
delivered, and the certification and warranties contained herein to be made, by
its duly Authorized Officer this ___ day of ___________, 19___.
VINTAGE PETROLEUM, INC.
By
-----------------------
Title:
2
EXHIBIT C
CONTINUATION/CONVERSION NOTICE
Bank of Montreal
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: [Name]
[Title]
VINTAGE PETROLEUM, INC.
Gentlemen and Ladies:
This Continuation/Conversion Notice is delivered to you pursuant to
Section 2.4 of the Amended and Restated Credit Agreement, dated as of December
8, 1997 (together with all amendments, if any, from time to time thereafter made
thereto, the "Credit Agreement"), among Vintage Petroleum, Inc., a Delaware
corporation (the "Borrower"), certain financial institutions and Bank of
Montreal (the "Agent"). Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the Credit Agreement.
The Borrower hereby requests that on ____________, 19___,
(1) $___________ of the presently outstanding principal amount
of the [Term Loans] [Revolving Loans] originally made on __________,
19___ [and $__________ of the presently out standing principal amount
of the [Revolving Loans] originally made on __________, 19___],
(2) and all presently being maintained as */[Base Rate Loans]
[LIBO Rate Loans],
(3) be [converted into] [continued as],
(4) **/[LIBO Rate Loans having an Interest Period of ______
months] [Base Rate Loans].
The Borrower hereby:
(a) certifies and warrants that no Default has occurred and is
continuing; and
(b) agrees that if prior to the time of such continuation or
conversion any matter certified to herein by
--------
*/ Select appropriate interest rate option.
** Insert appropriate interest rate option.
it will not be true and correct at such time as if then made, it will
immediately so notify the Agent.
Except to the extent, if any, that prior to the time of the continuation or
conversion requested hereby the Agent shall receive written notice to the
contrary from the Borrower, each matter certified to herein shall be deemed to
be certified at the date of such continuation or conversion as if then made.
The Borrower has caused this Continuation/Conversion Notice to be
executed and delivered, and the certification and warranties contained herein to
be made, by its Authorized Officer this ___ day of _________, 19___.
VINTAGE PETROLEUM, INC.
By
------------------------
Title:
2
EXHIBIT D
LENDER ASSIGNMENT AGREEMENT
To: Vintage Petroleum, Inc.
To: Bank of Montreal,
as the Agent
VINTAGE PETROLEUM, INC.
Gentlemen and Ladies:
We refer to clause (d) of Section 10.11.1 of the Amended and Restated
Credit Agreement, dated as of December 8, 1997 (together with all amendments and
other modifications, if any, from time to time thereafter made thereto, the
"Credit Agreement"), among Vintage Petroleum, Inc., a Delaware corporation (the
"Borrower"), the various financial institutions (the "Lenders") as are, or shall
from time to time become, parties thereto, and Bank of Montreal, as agent (the
"Agent") for the Lenders. Unless otherwise defined herein or the context
otherwise requires, terms used herein have the meanings provided in the Credit
Agreement.
This Agreement is delivered to you pursuant to clause (d) of Section
10.11.1 of the Credit Agreement and also constitutes notice to each of you,
pursuant to clause (c) of Section 10.11.1 of the Credit Agreement, of the
assignment and delegation to _______________ (the "Assignee") of ___% of the
Loans and Commitments of _____________ (the "Assignor") outstanding under the
Credit Agreement on the date hereof. After giving effect to the foregoing
assignment and delegation, the Assignor's and the Assignee's Percentages for the
purposes of the Credit Agreement are set forth opposite such Person's name on
the signature pages hereof.
[Add paragraph dealing with accrued interest and fees with respect to
Loans and participations in Letters of Credit being assigned.]
The Assignee hereby acknowledges and confirms that it has received a
copy of the Credit Agreement and the exhibits related thereto, together with
copies of the documents which were required to be delivered under the Credit
Agreement as a condition to the making of the Loans thereunder. The Assignee
further confirms and agrees that in becoming a Lender and in making its
Commitments and Loans and in participating in Letters of Credit under the Credit
Agreement, such actions have and will be made without recourse to, or
representation or warranty by the Agent.
Except as otherwise provided in the Credit Agreement, effective as of
the date of acceptance hereof by the Agent
(a) the Assignee
(i) shall be deemed automatically to have become a
party to the Credit Agreement, have all the rights and
obligations of a "Lender" under the Credit Agreement and the
other Loan Documents as if it were an original signatory
thereto to the extent specified in the second paragraph
hereof; and
(ii) agrees to be bound by the terms and conditions
set forth in the Credit Agreement and the other Loan Documents
as if it were an original signatory thereto; and
(b) the Assignor shall be released from its obligations under
the Credit Agreement and the other Loan Documents to the extent
specified in the second paragraph hereof.
The Assignor and the Assignee hereby agree that the [Assignor]
[Assignee] will pay to the Agent the processing fee referred to in Section
10.11.1 of the Credit Agreement upon the delivery hereof.
The Assignee hereby advises each of you of the following administrative
details with respect to the assigned Loans and Commitments and requests the
Agent to acknowledge receipt of this document:
(A) Address for Notices:
Institution Name:
Attention:
Domestic Office:
Telephone:
Facsimile:
LIBOR Office:
Telephone:
Facsimile:
(B) Payment Instructions:
The Assignee agrees to furnish the tax form required by the last
sentence of Section 4.6 (if so required) of the Credit Agreement no later than
the date of acceptance hereof by the Agent.
This Agreement may be executed by the Assignor and Assignee in separate
counterparts, each of which when so executed and delivered
2
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
Adjusted Percentage [ASSIGNOR]
Term Loan Commitment
and
Term Loans: ___%
Revolving Loan
Commitment
and
Revolving Loans: ___%
Letter of Credit
participations: ___%
By:
-------------------------
Title:
Percentage [ASSIGNEE]
Term Loan Commitment
and
Term Loans: ___%
Revolving Loan
Commitment
and
Revolving Loans: ___%
Letter of Credit
participations: ___%
By:
-------------------------
Title:
Accepted and Acknowledged
this __ day of _______, 19__
BANK OF MONTREAL,
as Agent
By:
-------------------------
Title:
[VINTAGE PETROLEUM, INC.,
as Borrower
By:
-------------------------
Title:]
[add signature blocks for each Issuer]
3
EXHIBIT G
FORM OF ISSUANCE REQUEST
Issuance Request
Bank of Montreal
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
--------------------------
Re: Vintage Petroleum, Inc.
Gentlemen and Ladies:
This Issuance Request is delivered to you pursuant to Section 2.8.1 of
the Amended and Restated Credit Agreement, dated as of December 8, 1997
(together with all amendments and other modifications, if any, from time to time
thereafter made thereto, the "Credit Agreement"), among Vintage Petroleum, Inc.,
a Delaware corporation (the "Borrower"), the various financial institutions as
are, or may from time to time become, parties thereto (collectively, the
"Lenders"), and Bank of Montreal, acting through certain of its U.S. branches or
agencies ("BMO") as agent (in such capacity, together with any successor(s)
thereto in such capacity, the "Agent") for the Lenders. Terms used herein have
the meanings provided in the Credit Agreement unless otherwise defined herein or
the context otherwise requires.
The Borrower hereby requests that __________________________ as the
Issuer issue a Letter of Credit on [Date] in the aggregate initial face amount
of [and in the form attached hereto].***/
The beneficiary of the requested Letter of Credit will be
_________________________, and such Letter of Credit will be in
support of the [Provide Description] and will have a stated expiry
date of [Date]. [The following documents will be required upon
presentation: [Provide Description]
Attached hereto is an executed copy of an [Application for Letter of
Credit].
The Borrower hereby acknowledges that, pursuant to Section 5.2.2 of the
Credit Agreement, each of the delivery of this Issuance Request and the issuance
of the Letter of Credit requested hereby constitutes a representation and
warranty by the Borrower that, on the date of such Borrowing, and before and
after giving
--------
***/ Include where the Borrower is providing the form of Letter of
Credit requested to be issued.
effect thereto, all statements set forth in Section 5.2.1 are true and correct
in all material respects.
IN WITNESS WHEREOF, the Borrower has caused this Issuance Request to be
executed and delivered by its duly Authorized Officer this ____ day of ________,
19__.
VINTAGE PETROLEUM, INC.
By
-----------------------
Title:
2