Exhibit 10.22
CONFORMED COPY
$250,000,000
CREDIT AGREEMENT
dated as of
December 17, 1998
among
Cabot Oil & Gas Corporation,
The Banks Parties Hereto
and
▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Administrative Agent
▇.▇. ▇▇▇▇▇▇ Securities, Inc.,
Arranger
Bank of Montreal,
Syndication Agent
NationsBank, N.A.
Documentation Agent
165
TABLE OF CONTENTS
Page
ARTICLE 1 Definitions
Section 1.01. Definitions1
Section 1.02. Accounting Terms and Determinations..................... 13
Section 1.03. Types of Borrowings..................................... 14
ARTICLE 2 The Credits
Section 2.01. Commitments to Lend14
Section 2.02. Notice of Borrowings.................................... 14
Section 2.03. Notes................................................... 16
Section 2.04. Maturity of Loans....................................... 16
Section 2.05. Interest Rates.......................................... 16
Section 2.06. Commitment Fees......................................... 19
Section 2.07. Termination or Reduction of Commitments................. 19
Section 2.08. Method of Electing Interest Rates....................... 20
Section 2.09. Optional Prepayments.................................... 21
Section 2.10. General Provisions as to Payments....................... 22
Section 2.11. Funding Losses.......................................... 23
Section 2.12. Computation of Interest and Fees........................ 23
Section 2.13. Withholding Tax Exemption............................... 23
Section 2.14. Regulation D Compensation............................... 24
Section 2.15. Maximum Interest Rate................................... 24
ARTICLE 3 Conditions
Section 3.01. Effectiveness........................................... 25
Section 3.02. Borrowings.............................................. 26
ARTICLE 4 Representations and Warranties
Section 4.01. Corporate Existence and Power........................... 27
Section 4.02. Corporate Governmental Authorization; No Contravention.. 28
Section 4.03. Binding Effect.......................................... 28
Section 4.04. Financial and Other Information......................... 28
Section 4.05. Full Disclosure......................................... 29
Section 4.06. Litigation.............................................. 29
Section 4.07. Compliance with ERISA................................... 29
Section 4.08. Environmental Matters................................... 30
Section 4.09. Taxes................................................... 30
Section 4.10. Titles, etc............................................. 30
Section 4.11. Casualties; Taking of Properties........................ 31
Section 4.12. Use of Proceeds......................................... 31
Section 4.13. Year 2000 Compliance.................................... 31
ARTICLE 5 Covenants
Section 5.01. Information............................................. 32
Section 5.02. Payment of Obligations.................................. 34
Section 5.03. Maintenance of Property................................. 34
Section 5.04. Conduct of Business and Maintenance of Existence........ 34
Section 5.05. Compliance with Laws.................................... 34
Section 5.06. Inspections of Property, Books and Records.............. 35
Section 5.07. Insurance............................................... 35
Section 5.08. Covenant to Secure Indebtedness Equally................. 35
Section 5.09. Engineering Reports..................................... 35
Section 5.10. Debt.................................................... 37
Section 5.11. Liens................................................... 39
Section 5.12. Sales of Petroleum Properties........................... 40
Section 5.13. Annual Coverage Ratio................................... 40
Section 5.14. Consolidations, Mergers and Sales of Assets............. 40
Section 5.15. Subsidiary Debt......................................... 41
Section 5.16. Subsidiaries............................................ 41
ARTICLE 6 Defaults
Section 6.01. Events of Default....................................... 41
Section 6.02. Notice of Default....................................... 44
166
ARTICLE 7 The Agent
Section 7.01. Appointment and Authorization........................... 44
Section 7.02. Agent and Affiliates.................................... 44
Section 7.03. Action by Agent......................................... 45
Section 7.04. Consultation with Experts............................... 45
Section 7.05. Liability of Agent...................................... 45
Section 7.06. Indemnification......................................... 45
Section 7.07. Credit Decision......................................... 46
Section 7.08. Successor Agent......................................... 46
Section 7.09. Agent's Fees............................................ 46
ARTICLE 8 Change in Circumstances
Section 8.01. Basis for Determining Interest
Rate Inadequate or Unfair............................... 46
Section 8.02. Illegality.............................................. 47
Section 8.03. Increased Cost and Reduced Return....................... 48
Section 8.04. Base Rate Loans Substituted for
Affected Fixed Rate Loans............................... 50
Section 8.05. Substitution of Bank.................................... 50
ARTICLE 9 Miscellaneous
Section 9.01. Notices................................................. 50
Section 9.02. No Waivers.............................................. 51
Section 9.03. Expenses; Documentary Taxes; Indemnification............ 51
Section 9.04. Sharing of Set-Offs..................................... 51
Section 9.05. Amendments and Waivers.................................. 52
Section 9.06. Successors and Assigns.................................. 52
Section 9.07. Collateral.............................................. 54
Section 9.08. New York Law; Submission to Jurisdiction................ 54
Section 9.09. Counterparts............................................ 54
Section 9.10. Confidentiality......................................... 54
Section 9.11. No Unwritten Agreements................................. 55
Exhibit A - Note
Exhibit B - Opinion of Special Counsel for the Borrower
Exhibit C - Opinion of Managing Counsel of the Borrower
Exhibit D - Opinion of Special Counsel for the Agent
167
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of December 17, 1998 among CABOT OIL & GAS
CORPORATION, the BANKS from time to time parties hereto and ▇▇▇▇▇▇ GUARANTY
TRUST COMPANY OF NEW YORK, as Agent. The parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"Adjusted CD Rate" has the meaning set forth in Section 2.05(b).
"Administrative Questionnaire" means, with respect to each Bank, the
administrative questionnaire in the form submitted to such Bank by the Agent and
submitted to the Agent (with a copy to the Borrower) duly completed by such
Bank.
"Agent" means ▇▇▇▇▇▇ Guaranty Trust Company of New York in its capacity as
agent for the Banks hereunder, and its successors in such capacity.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Domestic Loans, its Domestic Lending Office and (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Assessment Rate" has the meaning set forth in Section 2.05(b).
"Assignee" has the meaning set forth in Section 9.06(c).
"Bank" means each bank or other financial institution listed on the
signature pages hereof, each Assignee which becomes a Bank pursuant to Section
9.06(c), and their respective successors.
"Base Rate" means, for any day, a rate per annum equal to the higher of (i)
the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds
Rate for such day.
"Base Rate Loan" means, at any time, a Loan which bears interest at such
time at a rate determined pursuant to Section 2.05(a) in accordance with the
applicable Notice of Borrowing or Notice of Interest Rate Election or pursuant
to Article 8.
"Borrower" means Cabot Oil & Gas Corporation, a Delaware corporation, and
its successors.
"Borrower's Consolidated Debt" means, at any date, the aggregate
outstanding principal amount of Debt of the Borrower and its Subsidiaries,
determined on a consolidated basis as of such date (not including any
Non-Recourse Debt in an aggregate principal amount not to exceed $150,000,000 at
any such date incurred by the Borrower and its Subsidiaries to finance the
acquisition of Properties (other than Petroleum Properties)); provided that the
Borrower may request from time to time the exclusion from Borrower's
Consolidated Debt of any Subordinated Debt proposed to be incurred at such time
by written notice to the Agent setting forth the terms of such Subordinated Debt
(such terms to include, without limitation, the aggregate principal amount of
such Subordinated Debt, the rate, if any, at which interest is to accrue
thereon, the dates of any scheduled repayments thereof and the final maturity
thereof), and the Agent shall promptly thereafter notify each Bank of such
request. The Borrower shall also furnish each Bank with such other information
with respect to such Subordinated Debt as any Bank may reasonably request.
Within 30 days of receipt of notice of such request from the Agent, the Banks
shall consult with one another to determine the percentage, if any, acceptable
to the Required Banks of the aggregate principal amount of such Subordinated
Debt which is to be excluded from Borrower's Consolidated Debt. Such percentage
as so determined by the Required Banks shall be promptly notified in writing by
the Agent to the Borrower, and upon such notification, and for all purposes
thereafter, an amount equal to such percentage of the aggregate outstanding
principal amount of such Subordinated Debt shall be excluded from Borrower's
Consolidated Debt until such Subordinated Debt is repaid in full or, if
applicable, converted into capital stock of the Borrower.
168
"Borrower's 1997 Form 10-K" means the Borrower's annual report on Form 10-K
for the fiscal year ended December 31, 1997, as filed with the Securities and
Exchange Commission.
"Borrowing" has the meaning set forth in Section 1.03.
"CD Base Rate" has the meaning set forth in Section 2.05(b).
"CD Loan" means, at any time, a Loan which bears interest at such time at a
rate determined pursuant to Section 2.05(b) in accordance with the applicable
Notice of Borrowing or Notice of Interest Rate Election.
"CD Margin" has the meaning set forth in Section 2.05(b).
"CD Reference Banks" means ▇▇▇▇▇▇ Guaranty Trust Company of New York and
any other Bank selected by the Agent to serve in such capacity and not
disapproved by the Borrower or the Required Banks.
"CFADS" or "Cash Flow Available for Debt Service" means, for any period,
gross cash operating revenues properly allocable to (i) Proved Reserves and
other assets consisting primarily of gas gathering and transmission pipelines
that are directly owned by the Borrower or its Subsidiaries or (ii) any Section
29 Transaction PPI in Proved Reserves or other assets, which Proved Reserves or
other assets are in each case not subject to any Non-Recourse Debt or any Lien
except Excepted Liens and Liens permitted under Section 5.11(e) and located in
the United States of America or in Canada for such period, less (in the case of
clause (i)) the following cash items: royalties, operating costs, severance,
wellhead taxes, general and administrative expenses and current income and other
taxes properly allocable to such period and cash capital expenditures made
during such period and properly allocable to Petroleum Properties and such other
assets. CFADS shall be determined based on the most recent Reserve Report and
financial statements (and supplemental information) furnished to the Banks,
subject to approval of such Reserve Report and financial statements (and
supplemental information) by the Required Banks and, with respect to pipeline
assets, shall take into account the Borrower's end product sales value of
natural gas as most recently furnished by the Borrower in writing to the Banks
(together with a description of the applicable period of sales data from which
such end product sales value was derived) and derived from information set forth
in financial statements furnished to the Banks and shall be determined based on
an assumption that, for so long as substantially all of the natural gas moving
through such pipeline assets are produced from reserves (i) owned by the
Borrower or any Subsidiary or (ii) in which the Borrower has a Section 29
Transaction PPI, the volumes of natural gas transported by such pipelines
positively correlate with the rate at which natural gas is produced from proved
developed producing reserves as determined according to such Reserve Report and
financial statements (and supplemental information).
CFADS shall exclude amounts attributable to any Subsidiary to the extent of any
minority interest in such Subsidiary.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof as its Commitment,
as such amount may be reduced from time to time pursuant to Section 2.07 or
increased or reduced by reason of an assignment pursuant to Section 9.06, or the
obligation of such Bank to make Loans pursuant to Section 2.01 not to exceed
such amount, as the context may require, and "Commitments" means the aggregate
Commitments of all of the Banks.
"Consolidated Subsidiary" means at any date any Subsidiary or other entity
the accounts of which would be consolidated with those of the Borrower in its
consolidated financial statements as if such statements were prepared as of such
date.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii)all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee under capital
leases, (v) all Debt of others secured by a Lien on any asset of such Person,
whether or not such Debt is assumed by such Person, and (vi) all Debt of others
directly or indirectly guaranteed by such Person or in respect of which such
Person is otherwise liable, contingently or otherwise.
169
"Debt Limit" means that dollar amount determined and periodically adjusted
in accordance with Section 5.10(b).
A "Debt Limit Excession" exists at any date if and to the extent that
Borrower's Consolidated Debt at such date exceeds the Debt Limit at such date.
"Debt Percentage" means, at any date, the percentage equivalent of a
fraction the numerator of which is Borrower's Consolidated Debt at such date and
the denominator of which is the Debt Limit at such date and shall be determined
based on the certificate of the chief financial officer, chief accounting
officer or treasurer of the Borrower furnished to the Banks as provided in
Section 5.01(h).
"Default" means the occurrence of any of the events specified in Section
6.01, whether or not any requirement for notice or lapse of time or other
condition precedent has been satisfied.
"Domestic Borrowing" means any Borrowing comprised of Domestic Loans.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located at its
address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent; provided that any Bank may so designate
separate Domestic Lending Offices for its Base Rate Loans, on the one hand, and
its CD Loans, on the other hand, in which case all references herein to the
Domestic Lending Office of such Bank shall be deemed to refer to either or both
of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in Section 2.05(b).
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 3.01.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch or
affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Euro-Dollar Lending
Office) or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower
and the Agent.
170
"Euro-Dollar Loan" means, at any time, a Loan which bears interest at such
time at a rate determined pursuant to Section 2.05(c) or 2.05(d) in accordance
with the applicable Notice of Borrowing or Notice of Interest Rate Election.
"Euro-Dollar Margin" has the meaning set forth in Section 2.05(c).
"Euro-Dollar Reference Banks" means the principal London offices of ▇▇▇▇▇▇
Guaranty Trust Company of New York and any other Bank selected by the Agent to
serve in such capacity and not disapproved by the Borrower or the Required
Banks.
"Euro-Dollar Reserve Percentage" means, with respect to any Bank, for any
day that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for such Bank in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents).
"Event of Default" means any of the events specified in Section 6.01.
"Excepted Liens" means: (i) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being contested in good
faith by appropriate action; (ii) Liens in connection with workmen's
compensation, unemployment insurance or other social security, old age pension
or public liability obligations; (iii)legal or equitable encumbrances deemed to
exist by reason of the existence of any litigation or other legal proceeding or
arising out of a judgment or award with respect to which an appeal is being
prosecuted, but only so long as execution of such judgment and enforcement of
such Lien is effectively stayed and the amount thereof (in excess of applicable
insurance coverage) does not exceed, individually or in the aggregate,
$5,000,000; (iv) vendors', carriers', warehousemen's, repairmen's, mechanics',
workmen's, materialmen's, construction or other like Liens (including, without
limitation, Liens arising in favor of sellers of hydrocarbons) arising by
operation of law in the ordinary course of business incident to obligations
which are not yet due or which are being contested in good faith by appropriate
proceedings by or on behalf of the Borrower or a Subsidiary; (v) Liens arising
in the ordinary course of business under farm-out agreements, gas sales
contracts, operating agreements, unitization and pooling agreements, and such
other documents as are customarily found in connection with comparable drilling
and producing operations; (vi) letters of credit, pledges or deposits, including
bonds, required in the ordinary course of business to secure public or statutory
obligations or to secure performance in connection with bids or contracts
related to the exploration or development of Petroleum Properties, to the extent
that payment of the underlying obligations is not yet due or is being contested
in good faith by appropriate proceedings by or on behalf of the Borrower or a
Subsidiary and with respect to which appropriate reserves have been established;
and (vii) minor irregularities in title which do not materially interfere with
the occupation, use and enjoyment by the Borrower and its Subsidiaries of their
respective Properties in the normal course of business as presently conducted or
materially impair the value thereof for such business.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute. For purposes of Section 6.01(k), unless otherwise defined
in such Section, the terms enclosed in quotation marks as used therein have the
meanings ascribed to such terms under the Exchange Act and the rules and
regulations promulgated by the Securities and Exchange Commission thereunder.
"Executive Officer" means, with respect to any Person, the president, any
vice president, the treasurer, the chief financial officer, the chief accounting
officer, the controller or the general counsel or any other person performing
similar functions.
"Existing Agreement" means the Amended and Restated Credit Agreement dated
as of May 30, 1995 among the Borrower, the banks parties thereto and ▇▇▇▇▇▇
Guaranty Trust Company of New York, as agent for such banks, as amended to the
Effective Date.
171
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to ▇▇▇▇▇▇ Guaranty Trust Company of New
York on such day on such transactions as determined by the Agent.
"Financing Documents" means this Agreement and the Notes.
"Fixed Rate Borrowing" means any Borrowing comprised of Fixed Rate Loans.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or both.
"Group of Loans" means at any time, a group of Loans consisting of (i) all
Loans which are Base Rate Loans at such time (other than Base Rate Loans arising
under Section 8.02 or 8.04, which shall be included in the related Group of
Fixed Rate Loans) or (ii) all Loans which are the same Type of Fixed Rate Loans
having the same Interest Period at such time.
"Indebtedness" means any and all Loans and all other liabilities of the
Borrower to the Banks from time to time existing under the Financing Documents
and all renewals, extensions, rearrangements, amendments or supplements to such
documents.
"Interest Period" means: (1) with respect to each Euro-Dollar Loan, a
period beginning on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in the applicable Notice of Interest Rate
Election and ending one, three or six months thereafter, as the Borrower may
elect in the applicable Notice; provided that: (a) any Interest Period which
would otherwise end on a day which is not a Euro-Dollar Business Day shall be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day; (b) any Interest
Period which begins on the last Euro-Dollar Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall, subject to clause (c) below,
end on the last Euro-Dollar Business Day of a calendar month; and (c) any
Interest Period which begins before the Termination Date and would otherwise end
after the Termination Date shall end on the Termination Date. (2) with respect
to each CD Loan, a period beginning on the date of borrowing specified in the
applicable Notice of Borrowing or on the date specified in the applicable Notice
of Interest Rate Election and ending 30, 90 or 180 days thereafter, as the
Borrower may elect in the applicable Notice; provided that: (a) any Interest
Period (other than an Interest Period determined pursuant to clause (b) below)
which would otherwise end on a day which is not a Euro-Dollar Business Day shall
be extended to the next succeeding Euro-Dollar Business Day; and (b) any
Interest Period which begins before the Termination Date and would otherwise end
after the Termination Date shall end on the Termination Date.
Notwithstanding the foregoing (x) all Interest Periods at any one time
outstanding shall end on not more than six different dates and (y) the duration
of any Interest Period which would otherwise violate the limitation in clause
(x) shall be adjusted to coincide with the remaining term of such other then
current Interest Period with respect to a Fixed Rate Loan of the same Type as
the Borrower shall specify in the related Notice of Borrowing or Notice of
Interest Rate Election.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset
(including without limitation any Production Payment, advance payment, gas
imbalances, take or pay or similar arrangement with respect to minerals in
place) or any other arrangement the economic effect of which is to give a
creditor preferential access to such asset to satisfy its claim, whether or not
filed, recorded or otherwise perfected under applicable law. For the purposes of
172
this Agreement, the Borrower or any Subsidiary shall be deemed to own subject to
a Lien (i) any asset that it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset or any capitalized lease
obligation or (ii) any account receivable transferred by it with recourse
(including any such transfer subject to a holdback or similar arrangement which
effectively imposes the risk of collectibility upon the transferor).
"Loan" means any loan made or to be made by a Bank hereunder, which will be
either a Domestic Loan (i.e., a Base Rate Loan or a CD Loan) or a Euro-Dollar
Loan. "Loans" means all or any combination of the foregoing, as the context may
require.
"London Interbank Offered Rate" has the meaning set forth in Section
2.05(c).
"Material Adverse Effect" means (i) any material adverse effect on the
business, Properties, financial position, results of operations or prospects of
the Borrower and its Subsidiaries, taken as a whole; (ii) any material adverse
effect on the ability of the Borrower to perform any of its obligations under
the Financing Documents or (iii) any material adverse effect on any of the
rights and remedies of the Banks and the Agent under the Financing Documents.
"Material Debt" means Debt (other than Non-Recourse Debt) of the Borrower
and/or one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, in an aggregate principal amount exceeding $7,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate Unfunded
Liabilities in excess of $3,000,000.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"Non-Recourse Debt" of any Person means Debt of such Person in respect of
which (i) the recourse of the holder of such Debt, whether direct or indirect
and whether contingent or otherwise, is effectively limited to the assets
directly securing such Debt; (ii) such holder may not collect by levy of
execution against assets of such Person generally (other than the assets
directly securing such Debt) if such Person fails to pay such Debt when due and
the holder obtains a judgment with respect thereto; and (iii) such holder has
waived, to the extent such holder may effectively do so, such holder's right to
elect recourse treatment under 11 U.S.C. 1111(b).
"Notes" means promissory notes of the Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Notice of Interest Rate Election" has the meaning set forth in Section
2.08.
"Parent" means, with respect to any Bank, any Person controlling such Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an association,
a trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Petroleum Property" means (i) any interest of the Borrower or any
Subsidiary in oil and gas reserves and assets consisting primarily of gas
gathering and transmission pipelines which is, or is to be, taken into account
in the determination of the Debt Limit pursuant to Section 5.10 or the annual
coverage ratio pursuant to Section 5.13 and (ii) any Section 29 Transaction PPI
provided that (a) such Section 29 Transaction PPI constitutes a production
173
payment within the meaning of the Bankruptcy Reform Act of 1994 and (b) such
Section 29 Transaction PPI is filed, recorded or otherwise perfected under
applicable law so as to be fully protected from all creditors and transferees of
the grantor thereof.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Pricing Schedule" means the schedule annexed hereto denominated as such.
"Prime Rate" means the rate of interest publicly announced by ▇▇▇▇▇▇
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"Production Payment" means an interest in a Petroleum Property that (i) is
not subject to the costs of production and (ii) terminates at such time as the
interest-holder has realized a specified sum from the sale of oil or gas
attributable to such interest.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Proved Reserves" means "proved oil and gas reserves" as specified under
Rule 4-10(a)(2) of Regulation S-X of the Securities and Exchange Commission.
"Quarterly Date" means the first day of each March, June, September and
December or if any such date is not a Euro-Dollar Business Day, the next
succeeding Euro-Dollar Business Day.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar Reference
Banks, as the context may require, and "Reference Bank" means any one of such
Reference Banks.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 66 2/3% of the
aggregate amount of the Commitments then in effect, or, if the Commitments shall
have been terminated, holding Notes evidencing at least 66 2/3% of the aggregate
principal amount of the Loans then outstanding.
"Reserve Report" means a report delivered by the Borrower pursuant to
Section 5.09(a), Section 5.09(b) or Section 5.09(c).
"Revolving Credit Period" means the period from and including the Effective
Date to but not including the Termination Date.
"Section 29 Transaction" means a transaction completed prior to the date
hereof with terms similar to those outlined in the letter dated March 20, 1995
from State Street Bank and Trust Company to the Borrower, copies of which have
heretofore been delivered to the Banks.
"Section 29 Transaction PPI" means a volumetric production payment interest
arising from the Section 29 Transaction.
"Subordinated Debt" means indebtedness of the Borrower for borrowed money
which (i) is not guaranteed by any other Person, (ii) requires no payment of
principal to be made prior to the first anniversary of the Termination Date (as
in effect at the time such Subordinated Debt is incurred or as requested to be
extended by the Borrower and approved by the Banks at such time) and (iii)is
subordinated in right of payment to the Indebtedness by subordination provisions
in form and substance satisfactory to the Required Banks.
"Subsidiary" means any corporation or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower.
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"Termination Date" means December 17, 2003, or if such date is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"Type" refers to the determination whether a Loan is a Base Rate Loan, a CD
Loan or a Euro-Dollar Loan (or a Borrowing comprised of such Loans).
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the present value of all benefits under such Plan
exceeds (ii) the fair market value of all Plan assets allocable to such benefits
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of the Borrower or any Subsidiary
(whether direct or joint and several with one or more affiliates) to the PBGC or
any other Person under Title IV of ERISA.
"Wholly-Owned Subsidiary" means any Subsidiary all of the shares of capital
stock or other ownership interests of which (except directors' qualifying
shares) are at the time directly or indirectly owned by the Borrower.
Section 1.02. Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used in this Agreement shall be interpreted, all
accounting determinations hereunder shall be made and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the Borrower's
independent public accountants) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks; provided that, if the Borrower notifies the Agent that the
Borrower wishes to amend any covenant in Article 5 to eliminate the effect of
any change in generally accepted accounting principles on the operation of such
covenant (or if the Agent notifies the Borrower that the Required Banks wish to
amend Article 5 for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Banks.
Section 1.03. Types of Borrowings. The term "Borrowing" means a borrowing of the
same Type by the Borrower from one or more Banks pursuant to Article 2 on a
given date and, in the case of Fixed Rate Loans, for the same Interest Period.
Borrowings are classified for purposes of this Agreement by Type (e.g., a
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans).
ARTICLE 2
The Credits
Section 2.01. Commitments to Lend. During the Revolving Credit Period each Bank
severally agrees, on the terms and conditions set forth in this Agreement, to
make Loans to the Borrower pursuant to this Section from time to time in amounts
such that the aggregate principal amount of Loans by such Bank at any one time
outstanding shall not exceed the amount of its Commitment at such time. Within
the foregoing limits, the Borrower may borrow under this Section, prepay Loans
and reborrow at any time during the Revolving Credit Period under this Section.
Each Borrowing under this Section shall be made from the several Banks ratably
in proportion to their respective Commitments.
Section 2.02. Notice of Borrowings.
(a) The Borrower shall give the Agent notice (a "Notice of Borrowing") not
later than 10:30 A.M. (New York City time) on (x) the Domestic
Business Day of each Base Rate Borrowing, (y) the second Domestic
Business Day next preceding each CD Borrowing and (z) the third
Euro-Dollar Business Day next preceding each Euro-Dollar Borrowing,
specifying: (i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing, (ii) the
aggregate amount of such Borrowing, which shall be $3,000,000 or any
larger multiple of $1,000,000 (except that any Borrowing may be in the
aggregate amount available hereunder in accordance with Section
3.02(b)) (iii)whether the Loans comprising such Borrowing are
initially to be CD Loans, Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Fixed Rate Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions
of the definition of Interest Period.
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(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's share (if any) of
such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(c) Not later than 12:00 Noon (New York City time) on the date of each
Borrowing, each Bank shall make available its share of such Borrowing,
in Federal or other funds immediately available in New York City, to
the Agent at its address specified in or pursuant to Section 9.01.
Unless the Agent determines that any applicable condition specified in
Article 3 has not been satisfied, the Agent will make the funds so
received from the Banks available to the Borrower at the Agent's
aforesaid address.
(d) Unless the Agent shall have received notice from a Bank prior to the
date of any Borrowing that such Bank will not make available to the
Agent such Bank's share of such Borrowing, the Agent may assume that
such Bank has made such share available to the Agent on the date of
such Borrowing in accordance with subsection (c) of this Section 2.02
and the Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent
that such Bank shall not have so made such share available to the
Agent, such Bank and the Borrower severally agree to repay to the
Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, a rate per annum equal to
the higher of the Federal Funds Rate and the interest rate applicable
thereto pursuant to Section 2.05 and (ii) in the case of such Bank,
the Federal Funds Rate. If such Bank shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such
Bank's Loan included in such Borrowing for purposes of this Agreement.
The failure of any Bank to make the Loan to be made by it as part of
any Borrowing shall not relieve any other Bank of its obligation, if
any, hereunder to make its Loan, and no Bank shall be responsible for
the failure of any other Bank to make any Loan to be made by such
other Bank hereunder.
Section 2.03. Notes.
(a) The Loans of each Bank shall be evidenced by a single Note payable to
the order of such Bank for the account of its Applicable Lending
Office in an amount equal to the aggregate unpaid principal amount of
such Bank's Loans.
(b) Upon receipt of each Bank's Note pursuant to Section 3.01, the Agent
shall forward such Note to such Bank. Each Bank shall record the date,
amount and Type of each Loan made by it and the date and amount of
each payment of principal made by the Borrower with respect thereto,
and may, if such Bank so elects in connection with any transfer or
enforcement of its Note, endorse on the schedule forming a part
thereof appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding; provided that the
failure of any Bank to make, or any error in making, any such
recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under the Notes. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Note and to attach to and
make a part of its Note a continuation of any such schedule as and
when required.
Section 2.04. Maturity of Loans. The Loans of each Bank shall mature, and the
principal amount thereof shall be due and payable, together with accrued
interest thereon, on the Termination Date.
Section 2.05. Interest Rates.
(a) Subject to Section 2.15, each Base Rate Loan shall bear interest on
the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, at a rate per annum equal to
the Base Rate for such day. Such interest shall be payable quarterly
in arrears on each Quarterly Date and, in the case of any Base Rate
Loan converted to a Fixed Rate Loan, on the date of such conversion.
Subject to Section 2.15, any overdue principal of and overdue interest
on any Base Rate Loan shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the sum of 2% plus the
rate otherwise applicable to Base Rate Loans for such day.
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(b) Subject to Section 2.15, each CD Loan shall bear interest on the
outstanding principal amount thereof, for each Interest Period
applicable thereto, at a rate per annum equal to the sum of the CD
Margin plus the applicable Adjusted CD Rate; provided that if any CD
Loan shall, as a result of clause (2)(b) of the definition of Interest
Period, have an Interest Period of less than 30 days, such CD Loan
shall bear interest during such Interest Period at the rate applicable
to Base Rate Loans during such period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest
Period is longer than 90 days, 90 days after the first day thereof.
Subject to Section 2.15, any overdue principal of and overdue interest
on any CD Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 2% plus the higher
of (i) the sum of the CD Margin plus the Adjusted CD Rate applicable
to such Loan at the date such payment was due and (ii) the rate
applicable to Base Rate Loans for such day.
"CD Margin" means a rate per annum determined in accordance with the
Pricing Schedule.
The "Adjusted CD Rate" applicable to any Interest Period means a rate
per annum determined pursuant to the following formula:
ACDR
=
[ CDBR ]*
[ ------------- ] + AR
[ 1.00 - DRP ]
ACDR
=
Adjusted CD Rate
CDBR
=
CD Base Rate
DRP
=
Domestic Reserve Percentage
AR
=
Assessment Rate
------------------------
* The amount in brackets being rounded upwards, if necessary, to
the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate of
interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per
annum bid at 10:00 A.M. (New York City time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two or more
New York certificate of deposit dealers of recognized standing for the
purchase at face value from each CD Reference Bank of its certificates
of deposit in an amount comparable to the unpaid principal amount of
the CD Loan of such CD Reference Bank to which such Interest Period
applies and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed
by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including
without limitation any basic, supplemental or emergency reserves) for
a member bank of the Federal Reserve System in New York City with
deposits exceeding five billion dollars in respect of new non-personal
time deposits in dollars in New York City having a maturity comparable
to the related Interest Period and in an amount of $100,000 or more.
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The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance
Fund classified as adequately capitalized and within supervisory
subgroup "A" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. Section 327.4(a) (or
any successor provision) to the Federal Deposit Insurance Corporation
(or any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the United
States. The Adjusted CD Rate shall be adjusted automatically on and as
of the effective date of any change in the Assessment Rate.
(c) Subject to Section 2.15, each Euro-Dollar Loan shall bear interest on
the outstanding principal amount thereof, for each Interest Period
applicable thereto, at a rate per annum equal to the sum of the
Euro-Dollar Margin plus the applicable London Interbank Offered Rate.
Such interest shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than three months,
three months after the first day thereof.
"Euro-Dollar Margin" means a rate per annum determined in accordance
with the Pricing Schedule.
The "London Interbank Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher
1/16 of 1%) of the respective rates per annum at which deposits in
dollars are offered to each of the Euro-Dollar Reference Banks in the
London interbank market at approximately 11:00 A.M. (London time) two
Euro-Dollar Business Days before the first day of such Interest Period
in an amount approximately equal to the principal amount of the
Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such
Interest Period is to apply and for a period of time comparable to
such Interest Period.
(d) Subject to Section 2.15, any overdue principal of and overdue interest
on any Euro-Dollar Loan shall bear interest, payable on demand, for
each day from and including the date payment thereof was due to but
excluding the date of actual payment, at a rate per annum equal to the
sum of 2% plus the higher of (i) the sum of the Euro-Dollar Margin
plus the London Interbank Offered Rate applicable to such Loan and
(ii) the Euro-Dollar Margin plus the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100 of 1%) by dividing (x)
the average (rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per annum at which one day (or, if such
amount due remains unpaid more than three Euro-Dollar Business Days,
then for such other period of time not longer than six months as the
Agent may select) deposits in dollars in an amount approximately equal
to such overdue payment due to each of the Euro-Dollar Reference Banks
are offered to such Euro-Dollar Reference Bank in the London interbank
market for the applicable period determined as provided above by (y)
1.00 minus the Euro-Dollar Reserve Percentage (or, if the
circumstances described in clause (a) or (b) of Section 8.01 shall
exist, at a rate per annum equal to the sum of 2% plus the rate
applicable to Base Rate Loans for such day).
(e) The Agent shall determine each interest rate applicable to the Loans
hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest
error.
(f) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any
Reference Bank does not furnish a timely quotation, the Agent shall
determine the relevant interest rate on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Banks or, if
none of such quotations is available on a timely basis, the provisions
of Section 8.01 shall apply.
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Section 2.06. Commitment Fees. The Borrower shall pay to the Agent for the
account of each Bank a commitment fee at a rate per annum equal to the
Commitment Fee Rate (determined daily in accordance with the Pricing Schedule)
on the daily average unused amount of its Commitment. Such commitment fees shall
accrue from and including the Effective Date to but excluding the date of
termination of the Commitments in their entirety. Accrued fees under this
Section shall be payable quarterly in arrears on each Quarterly Date and upon
the date of termination of the Commitments in their entirety.
Section 2.07. Termination or Reduction of Commitments.
(a) Mandatory. The Commitments shall terminate on the Termination Date.
(b) Optional. The Borrower may, upon at least three Domestic Business
Days' notice to the Agent, (i) terminate the Commitments at any time,
if no Loans are outstanding at such time or (ii) ratably reduce from
time to time by an aggregate amount of $5,000,000 or any larger
multiple thereof, the aggregate amount of the Commitments in excess of
the aggregate outstanding principal amount of the Loans.
Section 2.08. Method of Electing Interest Rates.
(a) The Loans comprising each Borrowing shall bear interest initially at
the Type of rate specified by the Borrower in the applicable Notice of
Borrowing. Thereafter, the Borrower may from time to time elect to
change or continue the type of interest rate borne by each Group of
Loans (subject in each case to the provisions of Article 8), as
follows: (i) if such Loans are Base Rate Loans, the Borrower may elect
to convert such Loans to CD Loans as of any Domestic Business Day or
to Euro-Dollar Loans as of any Euro-Dollar Business Day; (ii) if such
Loans are CD Loans, the Borrower may elect to convert such Loans to
Base Rate Loans or Euro-Dollar Loans, or may elect to continue such
Loans as CD Loans for an additional Interest Period, in each case
beginning on the last day of the then current Interest Period
applicable to such Loans; (iii)if such Loans are Euro-Dollar Loans,
the Borrower may elect to convert such Loans to Base Rate Loans or CD
Loans, or may elect to continue such Loans as Euro-Dollar Loans for an
additional Interest Period, in each case beginning on the last day of
the then current Interest Period applicable to such Loans; (iv) if
such Loans are Base Rate Loans, the Borrower may elect to designate
such Loans as any combination of Base Rate Loans, CD Loans or
Euro-Dollar Loans as of any Domestic Business Day in the case of CD
Loans and as of any Euro-Dollar Business Day in the case of
Euro-Dollar Loans (subject to the definition of Interest Period); and
(v) if such Loans are Fixed Rate Loans, the Borrower may elect to
designate such Loans as any combination of Base Rate Loans, CD Loans
or Euro-Dollar Loans as of the last day of the then current Interest
Period applicable to such Loans (subject to the definition of Interest
Period).
Each such election shall be made by delivering a notice (a "Notice of
Interest Rate Election") to the Agent not later than 10:30 A.M. (New
York City time) on the third Euro-Dollar Business Day before the
conversion or continuation selected in such notice is to be effective
(unless the relevant Loans are to be converted from Domestic Loans of
one Type to Domestic Loans of the other Type or are CD Loans to be
continued as CD Loans for an additional Interest Period, in which case
such notice shall be delivered to the Agent not later than 10:30 A.M.
(New York City time) on the second Domestic Business Day before such
conversion or continuation is to be effective). A Notice of Interest
Rate Election may, if it so specifies, apply to only a portion of the
aggregate principal amount of the relevant Group of Loans; provided
that (i) such portion is allocated ratably among the Loans comprising
such Group and (ii) the portion to which such notice applies, and the
remaining portion to which it does not apply, are each at least
$3,000,000.
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(b) Each Notice of Interest Rate Election shall specify with respect to
the outstanding Borrowing to which such notice applies: (i) the Group
of Loans (or portion thereof) to which such notice applies); (ii) the
date on which conversion or continuation selected in such notice is to
be effective, which shall comply with the applicable clause of
subsection (a) above; (iii)if such Group of Loans (or portion thereof)
are to be converted, the new type of Loans and, if such new Loans are
CD Loans or Euro-Dollar Loans, the duration of the initial Interest
Period applicable thereto after such conversion; and (iv) if such
Group of Loans (or portion thereof) are to be continued as CD Loans or
Euro-Dollar Loans for an additional Interest Period, the duration of
such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the Borrower
pursuant to subsection (a) above, the Agent shall promptly notify each
Bank of the contents thereof and such notice shall not thereafter be
revocable by the Borrower. If the Borrower fails to deliver a timely
Notice of Interest Rate Election to the Agent for any Borrowing
comprised of Fixed Rate Loans, such Loans shall be converted into Base
Rate Loans on the last day of the then current Interest Period
applicable thereto.
Section 2.09. Optional Prepayments.
(a) Subject in the case of Fixed Rate Loans to the provisions of Section
2.11, the Borrower may (i) upon notice to the Agent not later than
10:30 A.M. (New York City time) on any Domestic Business Day, prepay
on such Domestic Business Day any Group of Base Rate Loans, (ii) upon
at least three Domestic Business Days' notice to the Agent, prepay any
Group of CD Loans and (iii) upon at least three Euro-Dollar Business
Days' notice to the Agent, prepay any Group of Euro-Dollar Loans, in
each case in whole at any time, or from time to time in part in
amounts aggregating $1,000,000 or any larger multiple of $1,000,000,
by paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment.
Each such optional prepayment shall be applied to prepay ratably the
Loans of the several Banks included in such Group.
(b) Upon receipt of a notice of prepayment pursuant to subsection (a) this
Section 2.09, the Agent shall promptly notify each Bank of the
contents thereof and of such Bank's ratable share of such prepayment
and such notice shall not thereafter be revocable by the Borrower.
Section 2.10. General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of, and interest on,
the Loans and of fees hereunder, not later than 12:00 Noon (New York
City time) on the date when due, in Federal or other funds immediately
available in New York City, to the Agent at its address referred to in
Section 9.01. The Agent will promptly distribute to each Bank its
ratable share of each such payment received by the Agent for the
account of the Banks. Whenever any payment of principal of, or
interest on, the Domestic Loans or of fees shall be due on a day which
is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever any
payment of principal of, or interest on, the Euro-Dollar Loans shall
be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof shall be
the next preceding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date
and the Agent may, in reliance upon such assumption, cause to be
180
distributed to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent that the Borrower
shall not have so made such payment, each Bank shall repay to the
Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount
is distributed to such Bank until the date such Bank repays such
amount to the Agent, at the Federal Funds Rate.
Section 2.11. Funding Losses. If the Borrower makes any payment of principal
with respect to any Fixed Rate Loan or any Fixed Rate Loan is converted to a
Base Rate Loan (whether pursuant to this Article 2 or Article 6 or 8 or
otherwise) on any day other than the last day of the Interest Period applicable
thereto, or the end of an applicable period fixed pursuant to Section 2.05(d),
or if the Borrower fails to borrow or prepay any Fixed Rate Loans after notice
has been given to any Bank in accordance with Section 2.02(b) or 2.09(a), the
Borrower shall reimburse each Bank within 15 days after demand for any resulting
loss or expense incurred with respect to such Loans, including (without
limitation) any loss incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the period after any such
payment or conversion or failure to borrow or prepay, provided that such Bank
shall have delivered to the Borrower a certificate as to the amount of such loss
or expense, which certificate shall be conclusive in the absence of manifest
error.
Section 2.12. Computation of Interest and Fees. Interest based on the Prime Rate
and commitment fees hereunder shall be computed on the basis of a year of 365
days (or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest shall
be computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day).
Section 2.13. Withholding Tax Exemption. At least five Domestic Business Days
prior to the first date on which interest or fees are payable hereunder for the
account of any Bank, each Bank that is not incorporated under the laws of the
United States of America or a state thereof agrees that it will deliver to each
of the Borrower and the Agent two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, certifying in either case that such
Bank is entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal income taxes. Each Bank
which so delivers a Form 1001 or 4224 further undertakes to deliver to each of
the Borrower and the Agent two additional copies of such form (or a successor
form) on or before the date that such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrower or the Agent, in each case
certifying that such Bank is entitled to receive payments under this Agreement
and the Notes without deduction or withholding of any United States federal
income taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Bank from duly completing and delivering any such
form with respect to it and such Bank advises the Borrower and the Agent that it
is not capable of receiving payments without any deduction or withholding of
United States federal income tax.
Section 2.14. Regulation D Compensation. For so long as any Bank maintains
reserves against "Eurocurrency liabilities" (or any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of such Bank to United
States residents), then such Bank may require the Borrower to pay,
contemporaneously with each payment of interest on the Euro-Dollar Loans,
additional interest on the related Euro-Dollar Loan of such Bank at a rate per
annum up to but not exceeding the excess of (i) (A) the applicable London
Interbank Offered Rate divided by (B) one minus the Euro-Dollar Reserve
Percentage over (ii) the applicable London Interbank Offered Rate. Any Bank
wishing to require payment of such additional interest (x) shall so notify the
Borrower and the Agent, in which case such additional interest on the
Euro-Dollar Loans of such Bank shall be payable to such Bank at the place
indicated in such notice with respect to each Interest Period commencing at
least five Euro-Dollar Business Days after the giving of such notice and (y)
shall notify the Borrower at least five Euro-Dollar Business Days prior to each
date on which interest is payable on the Euro-Dollar Loans of the amount to
which such Bank is then entitled under this Section.
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Section 2.15. Maximum Interest Rate.
(a) Nothing contained in this Agreement or the Notes shall require the
Borrower to pay interest at a rate exceeding the maximum rate
permitted by law.
(b) If the amount of interest, including amounts that would be deemed to
constitute interest under applicable law, payable for the account of
any Bank, would at any time exceed the maximum amount permitted by
applicable law to be charged by such Bank, the amount of interest
payable for its account shall ipso facto be automatically reduced to
such maximum permissible amount, and any amount constituting interest
received by such Bank in excess of the maximum permissible amount of
interest which, under applicable law, could then be collected by such
Bank shall be credited by such Bank against and to the extent of the
unpaid principal amount of the Loans of such Bank outstanding at such
time, first against any Base Rate Loans and next against any Fixed
Rate Loans as selected by such Bank, with the remaining excess, if
any, being promptly refunded to the Borrower.
(c) If the amount of interest, including amounts that would be deemed to
constitute interest under applicable law, payable for the account of
any Bank in respect of any applicable computation period is reduced
pursuant to clause (b) of this Section and the amount of interest
payable for its account in respect of any subsequent computation
period would be less than the maximum amount permitted by applicable
law to be charged by such Bank, then the amount of interest payable
for its account in respect of such subsequent computation period shall
be automatically increased to such maximum permissible amount;
provided that at no time shall the aggregate amount by which interest
paid for the account of any Bank has been increased pursuant to this
clause (c) exceed the aggregate amount by which interest paid for its
account has theretofore been reduced pursuant to clause (b) of this
Section.
ARTICLE 3
Conditions
Section 3.01. Effectiveness. This Agreement shall become effective on the date
that each of the following conditions shall have been satisfied (or waived in
accordance with Section 9.05) (except Sections 2.11 and 9.03, which shall become
effective on the date that clause (a) below is satisfied):
(a) receipt by the Agent of counterparts hereof, signed by each of the
parties hereto (or, in the case of any party as to which any executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of facsimile or other written confirmation from
such party of execution of a counterpart hereof by such party);
(b) receipt by the Agent for the account of each Bank of a Note duly
executed on behalf of the Borrower and dated on or before the
Effective Date, complying with the provisions of Section 2.03;
(c) receipt by the Agent of an opinion of ▇▇▇▇▇ & ▇▇▇▇▇, special counsel
for the Borrower, substantially in the form of Exhibit B hereto;
(d) receipt by the Agent of an opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice
President, Managing Counsel and Corporate Secretary of the Borrower,
substantially in the form of Exhibit C hereto;
(e) receipt by the Agent of an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special
counsel for the Agent, substantially in the form of Exhibit D hereto;
(f) receipt by the Agent of a certificate signed by the chief financial
officer, chief accounting officer or treasurer of the Borrower, to the
effect set forth in clauses (b), (c) and (d) of Section 3.02;
(g) receipt by the Agent of all documents it may reasonably request
relating to the existence of the Borrower, the corporate authority for
and the validity of the Financing Documents, and any other matters
relevant hereto, all in form and substance satisfactory to the Agent;
and
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(h) receipt by the Agent of evidence satisfactory to it of the payment of
all principal of and interest on any loans outstanding under, and all
accrued fees under, the Existing Agreement;
The certificate and opinions referred to in clauses (c), (d), (e) and (f) above
shall be dated the Effective Date; provided that this Agreement shall not become
effective or be binding on any party hereto unless all of the foregoing
conditions are satisfied not later than December 17, 1998. Promptly after the
Effective Date occurs, the Agent shall notify the Borrower and the Banks
thereof, and such notice shall be conclusive and binding on all parties hereto.
The Borrower and the Banks party to the Existing Agreement, comprising the
"Required Banks" as defined therein, hereby agree that (i) the commitments of
the banks under the Existing Agreement shall terminate in their entirety
immediately and automatically upon the effectiveness of this Agreement, without
further action by any party to the Existing Agreement, (ii) all accrued fees
under the Existing Agreement shall be due and payable at such time and (iii)
subject to the funding loss indemnities in the Existing Agreement, the Borrower
may prepay any and all loans outstanding thereunder on the Effective Date.
Promptly after the Effective Date, each Bank which is a party to the Existing
Agreement will return to the Borrower the note issued to it pursuant to the
Existing Agreement (or if it is unable to locate such note, will provide the
Borrower with an officer's certificate to that effect).
Section 3.02. Borrowings. The obligation of each Bank to make a Loan to the
Borrower on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) receipt by the Agent of notice of such Borrowing as required by
Section 2.02;
(b) the fact that, immediately after such Borrowing, Borrower's
Consolidated Debt will not exceed the Debt Limit;
(c) the fact that, immediately before and after such Borrowing, no Default
shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the Borrower
contained in this Agreement (except, in the case of any Borrowing
occurring subsequent to the first Borrowing, the representations and
warranties covering historical information in Sections 4.04(a) and (b)
and the first sentence of Section 4.05, and except to the extent the
representations and warranties would cover price and other economic
assumptions furnished by the Required Banks under Section 5.09(d))
shall be true and correct on and as of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.
ARTICLE 4
Representations and Warranties
The Borrower represents and warrants that:
Section 4.01. Corporate Existence and Power. The Borrower and each Subsidiary is
a corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to own
its assets and to carry on its business as now conducted and is duly qualified
as a foreign corporation in good standing in each jurisdiction where the nature
of its business or the ownership or leasing of its Properties requires such
qualification, except where the failure to qualify would not materially and
adversely affect the conduct of its business or the enforceability of
contractual obligations of the Borrower. Neither the Borrower nor any Subsidiary
is subject to regulation under the Public Utility Holding Company Act of 1935,
the Investment Company Act of 1940, the Interstate Commerce Act or any other law
or regulation the application of which limits the incurrence by the Borrower of
Debt hereunder, including, but not limited to, laws relating to common or
contract carriers or the sale of electricity, gas, steam, water or other public
utility services.
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Section 4.02. Corporate Governmental Authorization; No Contravention. The
execution, delivery and performance by the Borrower of the Financing Documents
are within the Borrower's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or filing
with, any governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of the Borrower or of any agreement
or instrument evidencing or governing Debt of the Borrower or any Subsidiary or
any other agreement, instrument, judgment, injunction, order or decree binding
upon the Borrower or any Subsidiary or result in the creation or imposition of
any Lien on any asset of the Borrower pursuant to any such agreement,
instrument, judgment, injunction, order or decree.
Section 4.03. Binding Effect. This Agreement constitutes a valid and binding
agreement of the Borrower and each of the other Financing Documents, when
executed and delivered in accordance with this Agreement, will constitute valid
and binding obligations of the Borrower, in each case enforceable in accordance
with its terms, except as the same may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by general principles of
equity.
Section 4.04. Financial and Other Information.
(a) (i) The combined balance sheet of the Borrower and its Subsidiaries as
of December 31, 1997 and the related combined statements of income and
cash flows for the fiscal year then ended, reported on by Coopers &
▇▇▇▇▇▇▇ and incorporated by reference in the Borrower's 1997 Form
10-K, a copy of which has been delivered to each of the Banks, fairly
present, in conformity with generally accepted accounting principles,
the combined financial position of the Borrower and its Subsidiaries
as of such date and their combined results of operations and cash
flows for such fiscal year. (ii) The unaudited consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of
September 30, 1998 and the related unaudited consolidated statements
of income and cash flows for the nine months then ended, set forth in
the Borrower's quarterly report for the fiscal quarter ended September
30, 1998 as filed with the Securities and Exchange Commission on Form
10-Q, a copy of which has been delivered to each of the Banks fairly
present, in conformity with generally accepted accounting principles,
the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated
results of operations and cash flows for such nine-month period
(subject to normal year-end adjustments).
(b) There are no statements or conclusions in the Cabot Oil & Gas
Corporation Reserve Summary as of July 1, 1998, a copy of which has
been delivered to each of the Banks (the "Reserve Report"), which are
based upon or include misleading information or fail to take into
account material information regarding the matters reported therein,
it being understood that such statements and conclusions are
necessarily based upon professional opinions, estimates and forecasts,
and the Borrower does not warrant that such opinions, estimates and
forecasts will ultimately prove to have been accurate.
(c) Since September 30, 1998, there has been no material adverse change in
the business, Properties, financial position, results of operations or
prospects of the Borrower or of the Borrower and its Subsidiaries,
considered as a whole.
Section 4.05. Full Disclosure. None of the financial statements and other
financial or factual information included in the financial statements described
in Section 4.04(a) or in the Reserve Report (excluding estimates, financial
projections and pro forma financial statements) contains any untrue statement of
material fact or omits to state a material fact necessary in order to make the
statements contained therein not misleading. All other financial and reserve
information, financial statements and other documents, estimates, projections
and pro forma financial information furnished by the Borrower to the Banks in
connection with the Financing Documents do not and will not contain any untrue
statement of material fact or omit to state a material fact necessary in order
to make the statements contained therein not misleading. The Borrower has
disclosed to the Banks in writing any and all facts which materially and
adversely affect the business, properties, operations or condition, financial or
otherwise, of the Borrower or of the Borrower and its Subsidiaries, considered
as a whole, or the Borrower's ability to perform its obligations under the
Financing Documents.
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Section 4.06. Litigation. Except as set forth in the Borrower's Form 1997 10-K,
there is no action, suit or proceeding pending against, or to the knowledge of
the Borrower threatened against or affecting, the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable possibility of an adverse decision which
could materially adversely affect the business, Properties, financial position,
results of operations or prospects of the Borrower or of the Borrower and its
Subsidiaries, considered as a whole, or which in any manner draws into question
the validity of any Financing Document.
Section 4.07. Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan, or made any amendment
to any Plan, which, in either case, has resulted or could result in the
imposition of a Lien on Property of the Borrower or any Subsidiary or the
posting of a bond or other security by the Borrower or any Subsidiary under
ERISA or the Internal Revenue Code or (iii) incurred any liability under Title
IV of ERISA (other than a liability to the PBGC for premiums under Section 4007
of ERISA) which could cause the Borrower or any Subsidiary (whether directly or
jointly and severally with one or more affiliates) to incur any liability.
Section 4.08. Environmental Matters. In the ordinary course of its business, the
Borrower considers the effect of all existing and applicable Environmental Laws
on the business, operations and properties of the Borrower and its Subsidiaries,
in the course of which it identifies and evaluates associated liabilities and
costs (including, without limitation, any capital or operating expenditures
required for clean-up or closure of properties presently or previously owned,
any capital or operating expenditures required to achieve or maintain compliance
with environmental protection standards imposed by law or as a condition of any
license, permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction in the
level of or change in the nature of operations conducted thereat and any actual
or potential liabilities to third parties, including employees, and any related
costs and expenses). The Borrower has reasonably concluded that existing and
applicable Environmental Laws are unlikely to have a material adverse effect on
the business, Properties, financial condition, results of operations or
prospects of the Borrower or of the Borrower and its Subsidiaries, considered as
a whole.
Section 4.09. Taxes. The Borrower and its Subsidiaries have filed all United
States Federal income tax and all other material tax returns which are required
to be filed by them and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Borrower or any Subsidiary. The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of taxes or other governmental charges are adequate.
Section 4.10. Titles, etc. The Borrower and each Subsidiary has good, valid and
defensible title to its material (individually or in the aggregate) Properties
(including valid and defensible title to all of the oil and gas Properties which
such Borrower has identified to the Banks for use in determining the Debt Limit
and good title to other material Properties which are not oil and gas
Properties) free and clear of all Liens except (i) Excepted Liens or (ii) Liens
otherwise expressly permitted by Section 5.11.
Section 4.11. Casualties; Taking of Properties. Since the date of the most
recent Reserve Report, neither the business nor the Petroleum Properties of the
Borrower have been affected as a result of any fire, explosion, earthquake,
flood, drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of Property or cancellation of contracts, permits or
concessions by any domestic or foreign government or any agency thereof, riot,
activities of armed forces or acts of God or of any public enemy, the occurrence
of which would have a material adverse effect on the business, Properties,
financial condition, results of operations or prospects of the Borrower or of
the Borrower and its Subsidiaries, considered as a whole.
Section 4.12. Use of Proceeds. The proceeds of the Loans will be used for the
Borrower's general corporate purposes, including without limitation the payment
of dividends as permitted hereunder and the financing of the acquisition,
exploration and development of Petroleum Properties. None of such proceeds will
be used, directly or indirectly, for the purpose, whether immediate, incidental
or ultimate, which violates or which would be inconsistent with Regulation U.
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Section 4.13. Year 2000 Compliance. The Borrower has (i) initiated a review and
assessment of all areas within the business and operations of the Borrower and
each of its Subsidiaries that could be adversely affected by the "Year 2000
Problem" (that is, the risk that computer applications used by it or any of its
Subsidiaries may be unable to recognize and perform properly date-sensitive
functions involving any date after December 31, 1999), (ii) developed a course
of action and timeline for addressing the Year 2000 Problem on a timely basis
and (iii)is in the process of implementing the same. The Borrower reasonably
believes that all computer applications used by the Borrower that are material
to the business or operations of the Borrower or any of its Subsidiaries will on
a timely basis be able to perform properly date-sensitive functions for all
dates on and after January 1, 2000, except to the extent that a failure to do so
could not reasonably be expected to have a Material Adverse Effect.
ARTICLE 5
Covenants
The Borrower agrees that, so long as any Bank has any Commitment hereunder or
any amount payable under any Note remains unpaid, it will perform and comply
with each of the following covenants, unless such performance and compliance
shall have been specifically waived in writing by the Required Banks.
Section 5.01. Information. The Borrower will deliver to each of the Banks:
(a) as soon as available and in any event within 95 days after the end of
each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated statements of income and cash
flows for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on in a
manner acceptable to the Securities and Exchange Commission by
PricewaterhouseCoopers or other independent public accountants of
nationally recognized standing;
(b) as soon as available and in any event within 60 days after the end of
each of the first three quarters of each fiscal year of the Borrower,
a consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such quarter and the related
consolidated statements of income and cash flows for such quarter and
for the portion of the Borrower's fiscal year ended at the end of such
quarter, setting forth in each case in comparative form the figures
for the corresponding quarter and the corresponding portion of the
Borrower's previous fiscal year, all certified (subject to normal
year-end adjustments) as to fairness of presentation, generally
accepted accounting principles and consistency by the chief financial
officer, chief accounting officer or treasurer of the Borrower;
(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of the chief
financial officer, chief accounting officer or treasurer of the
Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Section 5.10 and Section 5.13 on the date of such
financial statements, and (ii) stating whether any Default exists on
the date of such certificate and, if any Default then exists, setting
forth the details thereof and the action which the Borrower is taking
or proposes to take with respect thereto;
(d) within five days after any Executive Officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, a
certificate of the chief financial officer, chief accounting officer
or treasurer of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;
(e) promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy
statements so mailed;
(f) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K,
10-Q and 8-K (or their equivalents) which the Borrower shall have
filed with the Securities and Exchange Commission;
186
(g) if and when any member of the ERISA Group (i) gives or is required to
give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or any
Executive Officer of the Borrower or any Subsidiary knows that the
plan administrator of any Plan has given or is required to give notice
of any such reportable event, a copy of the notice of such reportable
event given or required to be given to the PBGC; (ii) receives notice
of complete or partial withdrawal liability under Title IV of ERISA or
notice that any Multiemployer Plan is in reorganization, is insolvent
or has been terminated, a copy of such notice; (iii)receives notice
from the PBGC under Title IV of ERISA of an intent to terminate,
impose liability (other than for premiums under Section 4007 of ERISA)
in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code, a copy of such
application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information
filed with the PBGC; (vi) gives notice of withdrawal from any Plan
pursuant to Section 4063 of ERISA, a copy of such notice; or
(vii)fails to make any required payment or contribution to any Plan or
Multiemployer Plan or makes any amendment to any Plan which has
resulted or could result in the imposition of a Lien on Property of
the Borrower or any Subsidiary or the posting of a bond or other
security by the Borrower or any Subsidiary, a certificate of the chief
financial officer, chief accounting officer or treasurer of the
Borrower setting forth details as to such occurrence and action, if
any, which the Borrower or applicable member of the ERISA Group is
required or proposes to take;
(h) as soon as practicable upon any change in the applicable Commitment
Fee Rate, Euro-Dollar Margin or CD Margin on account of a change in
the Debt Percentage, a certificate of the chief financial officer,
chief accounting officer or treasurer of the Borrower setting forth
the date thereof and a calculation of the Debt Percentage at such
date; and
(i) from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries as any Bank
may reasonably request; provided that, to the extent practicable (as
determined by the Agent in its sole discretion), requests from the
Banks for written reports shall be delivered to the Borrower by the
Agent.
Section 5.02. Payment of Obligations. The Borrower will pay and discharge, and
will cause each Subsidiary to pay and discharge, at or before maturity, all
their respective material obligations and liabilities, including, without
limitation, tax liabilities, except where the same may be contested in good
faith by appropriate proceedings, and will maintain, and will cause each
Subsidiary to maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the same.
Section 5.03. Maintenance of Property. The Borrower will keep, and will cause
each Subsidiary to keep, all property useful and necessary in its business in
good working order and condition, ordinary wear and tear excepted. The Borrower
will operate, or will use its best efforts to cause a third party operator to
operate, all Petroleum Properties in a prudent manner, and will market or will
cause to be marketed the production therefrom at the best price reasonably
obtainable at the time the applicable sales contract is executed. The Borrower
will not abandon any Petroleum Property capable of production in paying
quantities.
Section 5.04. Conduct of Business and Maintenance of Existence. The Borrower
will continue, and will cause each Subsidiary to continue, to engage in business
of the same general type as now conducted by the Borrower and its Subsidiaries,
and will preserve, renew and keep in full force and effect, and will cause each
Subsidiary to preserve, renew and keep in full force and effect their respective
corporate existence and their respective rights, privileges and franchises
necessary or desirable in the normal conduct of business; provided that nothing
in this Section shall prohibit (i) the merger of a Wholly-Owned Subsidiary into
the Borrower or the merger or consolidation of a Wholly-Owned Subsidiary with or
187
into another Person if the corporation surviving such consolidation or merger is
a Wholly-Owned Subsidiary and if, in each case, after giving effect thereto, no
Default shall have occurred and be continuing or (ii) the termination of the
corporate existence of any Subsidiary if the Borrower in good faith determines
that such termination is in the best interest of the Borrower and is not
materially disadvantageous to the Banks.
Section 5.05. Compliance with Laws. The Borrower will comply, and will cause
each Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder) except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings.
Section 5.06. Inspections of Property, Books and Records. The Borrower will
keep, and will cause each Subsidiary to keep, proper books of record and account
in which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and will permit, and
will cause each Subsidiary to permit, representatives of any Bank at such Bank's
expense to visit and inspect any of their respective Properties, to examine and
make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be desired.
Section 5.07. Insurance. The Borrower and each Subsidiary now maintains and will
cause to be maintained with insurers which the Borrower believes to be
financially sound and reputable, insurance with respect to its Properties and
business against such liabilities, casualties, risks and contingencies and in
such types and amounts as is customary in the case of Persons engaged in the
same or similar businesses and similarly situated. Upon request of any Bank, the
Borrower will furnish or cause to be furnished to such Bank from time to time a
summary of the insurance coverage of the Borrower and its Subsidiaries in form
and substance satisfactory to the Required Banks. In the case of any fire,
accident or other casualty causing loss or damage to any Properties of the
Borrower, the proceeds of such policies shall be used to repair or replace the
damaged Property, or to prepay the Indebtedness.
Section 5.08. Covenant to Secure Indebtedness Equally. If the Borrower or any
Subsidiary shall create or assume any Lien upon any of its Property, whether now
owned or hereafter acquired, other than Liens permitted by Section 5.11, the
Borrower and such Subsidiary, if applicable, shall make effective provision
whereby the Indebtedness will be concurrently secured by such Lien equally and
ratably with any and all other Debt thereby secured as long as any other Debt
shall be so secured. The remedy provided in this Section 5.08 shall not be
exclusive and shall have no effect on the availability or exercise of any other
remedy that may be available to any Bank under the Financing Documents.
Section 5.09. Engineering Reports.
(a) By March 15 and September 15 of each year, the Borrower shall furnish
to each of the Banks a report in form and substance reasonably
satisfactory to the Required Banks which may be prepared by or under
the supervision of a petroleum engineer who may be an employee of the
Borrower, which shall evaluate all Proved Reserves owned by the
Borrower and its Subsidiaries as of the preceding December 31 or June
30, respectively (provided, that each such report evaluating such
Proved Reserves as of the preceding June 30 of each year shall be
based upon the geologic and well data set forth in the immediately
preceding Reserve Report), and which shall, together with any other
information reasonably requested by any Bank, set forth the
information necessary to determine the Debt Limit as of such date.
(b) Together with the Reserve Report furnished pursuant to subsection (a)
as of December 31 of any year, the Borrower shall furnish to each of
the Banks a review report thereon in form and substance reasonably
satisfactory to the Required Banks by ▇▇▇▇▇▇ & ▇▇▇▇▇, Ltd. or other
independent petroleum engineers acceptable to the Required Banks
(provided that such review report shall not be required to comment on
any price or other economic assumptions furnished by the Required
Banks to the Borrower under subsection (d) below).
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(c) At any time and upon request by the Required Banks, the Borrower shall
furnish to each of the Banks, within 30 days of such request, a report
which shall evaluate all Proved Reserves owned by the Borrower and its
Subsidiaries as of the date of the most recent Reserve Report or as of
such other date as the Required Banks specify, in form and substance
reasonably satisfactory to the Required Banks (a "Special Engineering
Report"), together with any other information reasonably requested by
any Bank; provided, that such evaluation shall be based upon the
geologic and well data set forth in the Reserve Report furnished as of
the immediately preceding Reserve Report for which a review report has
been furnished under subsection (b). The Special Engineering Report
shall use production and cost profiles from the most recent Reserve
Report with such other information as supplied by the Required Banks.
(d) The reports contemplated by this Section shall be prepared on the
basis of price and other economic assumptions specified by the
Required Banks to the Borrower not less than 60 days prior to the date
the related report is due and in accordance with their customary oil
and gas lending practices for Persons engaged in the same or similar
businesses and similarly situated as the Borrower; provided that the
natural gas price assumptions shall take into account the Borrower's
end product sales value for natural gas as most recently furnished by
the Borrower in writing to the Banks (together with a description of
the applicable period of sales data from which such end product sales
value was derived) and derived from the financial statements furnished
to the Banks.
Section 5.10. Debt.
(a) The Borrower's Consolidated Debt will at no time exceed the Debt
Limit; provided that if a Debt Limit Excession exists solely by reason
of a reduction of the Debt Limit pursuant to a redetermination under
subsection (b)(ii) below, no Default will arise hereunder until 180
days following the date of such redetermination (during which time the
Borrower or any Subsidiary may reduce Debt or acquire additional
Petroleum Properties so as to restore compliance hereunder; provided
further that the Debt Limit Excession shall be reduced by an amount
equal to 50% of such Debt Limit Excession no later than 90 days
following such redetermination).
(b) The Debt Limit will be determined and adjusted periodically as
follows: (i) Prior to a determination pursuant to subsection (b)(ii)
below on the basis of the Reserve Report delivered as of December 31,
1998, and subject to adjustment in accordance with subsections
(b)(iii) and (b)(iv) below, the Debt Limit shall be $400,000,000. (ii)
The Agent will determine a proposed Debt Limit in accordance with its
customary oil and gas lending practices (A) within 30 days of delivery
of each Reserve Report pursuant to Section 5.09, commencing January 1,
1999 or (B) at any time if the Required Banks so elect by notice to
the Borrower and the Agent and, in either such case, notify such
proposed Debt Limit to each of the other Banks. Unless the Banks
having more than 33 1/3% of the aggregate amount of Commitments then
in effect (or, if the Commitments have been terminated, holding Notes
evidencing more than 33 1/3% of the aggregate principal amount of the
Loans then outstanding) notify the Borrower and Agent that they
disapprove such proposed Debt Limit within 30 days of notice by the
Agent as aforesaid, such Debt Limit shall become effective on such
30th day. If the Debt Limit is so disapproved, then the Banks shall
consult with one another to determine a Debt Limit acceptable to the
Required Banks. The Debt Limit so determined by the Required Banks
shall be promptly notified in writing by the Agent to the Borrower,
and upon such notification shall be binding on all parties. (iii)Upon
any sale by the Borrower or any Subsidiary of any Petroleum Property
(other than (i) the sale of hydrocarbons after severance occurring in
the ordinary course of the Borrower's business as presently conducted,
(ii) the sale of any Petroleum Property pursuant to the Section 29
Transaction or (iii)the sale of the Section 29 Transaction PPIs by
reason of the rescission of the Section 29 Transaction) or any direct
or indirect transfer or other disposition to any third party of a
direct or indirect interest in any Subsidiary whose assets were
included in the most recent determination of the Debt Limit, the Debt
Limit shall be reduced, effective on the date of consummation of the
sale of such Petroleum Property or transfer of such interest in such
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Subsidiary, by an amount equal to 60% of the net proceeds of or
consideration for (whether received in cash or otherwise) such sale or
transfer; provided that no such reduction shall be required with
respect to aggregate net sales proceeds or consideration received of
up to $10,000,000 in any calendar year; and provided, further, that
all such sales of Petroleum Properties and transfers of interests in
Subsidiaries are subject to the provisions of Sections 5.12 and 5.15.
(iv) If the Debt Limit shall have been reduced pursuant to subsection
(b)(ii) or (b)(iii) above, then prior to the next redetermination of
the Debt Limit pursuant to subsection (b)(ii) above, and immediately
upon notification by the Borrower to the Agent of the development by
the Borrower or any Subsidiary of any Proved Reserves and other assets
consisting primarily of gas gathering and transmission pipelines
located in the United States of America or in Canada owned directly by
the Borrower or any Subsidiary and not reflected in the most recent
Reserve Report, the Debt Limit shall be increased up to but not in
excess of the amount thereof prior to such reductions, by an amount
equal to 50% of the net present value of projected CFADS, determined
on the basis of the price and other economic assumptions reflected in
the most recent Reserve Report, applicable to such Proved Reserves (to
the extent permitted to be included in the determination of CFADS) and
other assets. (v) If prior to the next preparation of the Reserve
Report pursuant to Section 5.09 the Borrower notifies the Agent of the
acquisition by the Borrower or any Subsidiary of any Proved Reserves
(to the extent permitted to be included in the determination of CFADS)
and other assets consisting primarily of gas gathering and
transmission pipelines located in the United States of America or in
Canada, the Agent shall promptly thereafter notify each Bank of such
acquisition and the Borrower shall as promptly as practicable
thereafter deliver to each of the Banks a report prepared by or under
the supervision of a petroleum engineer (who may be an employee of the
Borrower) evaluating such Proved Reserves and other assets. Within 60
days of delivery of such evaluation report, the Agent, after
consultation with the Borrower, will determine a proposed increase in
the Debt Limit and notify such proposed increase to each of the Banks.
Unless the Banks having more than 33 1/3% of the aggregate amount of
Commitments then in effect (or, if the Commitments have been
terminated, holding Notes evidencing more than 33 1/3% of the
aggregate principal amount of the Loans then outstanding) notify the
Borrower and the Agent that they disapprove such proposed increase
within 30 days of notice by the Agent as aforesaid, the Debt Limit as
proposed to be increased shall become effective on such 30th day. If
such proposed increase in the Debt Limit is so disapproved, then the
Banks shall consult with one another to determine an increase in the
Debt Limit acceptable to the Required Banks. The Debt Limit as
increased by the amount so determined by the Required Banks shall be
promptly notified in writing by the Agent to the Borrower, and upon
such notification shall be binding on all parties. (vi) The Borrower
shall notify each Bank at the earliest practicable time in advance of
any transactions which entail a reasonable likelihood of an adjustment
to the Debt Limit pursuant to subsection (b)(iii), (b)(iv) or (b)(v)
above, and shall furnish each Bank with such information with respect
thereto as any Bank may reasonably request.
Section 5.11. Liens. The Borrower will not, and not permit any Subsidiary to,
create, incur, assume or suffer to exist any Lien on any of its Properties (now
owned or hereafter acquired), except:
(a) Excepted Liens;
(b) Liens existing on Property owned by the Borrower or any Subsidiary on
the Effective Date, but not any renewals and extensions thereof;
provided that the aggregate amount of Debt secured by such Liens shall
not exceed $5,000,000;
(c) subject to Section 5.10, a Lien existing on any asset (other than any
Petroleum Property) prior to the acquisition thereof by a Borrower,
but not created in contemplation of such acquisition;
(d) subject to Section 5.10, a Lien on any asset securing Debt incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring such asset (other than any Petroleum Property), provided
that such Lien attaches to such asset concurrently with or within 90
days after the acquisition thereof;
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(e) Liens representing gas imbalances, take or pay or other prepayments in
the ordinary course of business with respect to any Petroleum
Properties which would require the Borrower or any Subsidiary to
deliver hydrocarbons produced from any Petroleum Properties at some
future time without then or thereafter receiving full payment
therefor, which in the aggregate would not exceed 3% of the Debt Limit
and as adjusted to reflect any subsequent adjustment of the Debt Limit
pursuant to Section 5.10(b)(iii), (iv) or (v), all as notified in
writing by the Agent to the Borrower; and
(f) Liens securing other Debt of the Borrower or any Subsidiary the
aggregate principal amount of which does not exceed $3,000,000 at any
time.
Section 5.12. Sales of Petroleum Properties. The Borrower will not, and will not
permit any Subsidiary to, sell, transfer or otherwise dispose of any Petroleum
Property for less than the fair market value of such Property (other than (i)
the sale of any Petroleum Property pursuant to the Section 29 Transaction or
(ii) the sale of the Section 29 Transaction PPIs by reason of the rescission of
the Section 29 Transaction) and if, after giving effect thereto, to any
concurrent reduction in the Debt Limit pursuant to Section 5.10 and to
application of the proceeds of such disposition, Borrower's Consolidated Debt
would exceed the Debt Limit.
Section 5.13. Annual Coverage Ratio. The Annual Coverage Ratio will at no time
be less than 2.8:1. For this purpose: "Annual Coverage Ratio" means at any date
the ratio of Consolidated Cash Flow to Consolidated Interest Expense for the
period of four consecutive fiscal quarters most recently ended on or prior to
such date. "Consolidated Cash Flow" means, for any period, the net cash from
operating activities of the Borrower and its Consolidated Subsidiaries for such
period, as the same is, or would in accordance with generally accepted
accounting principles be set forth in a statement of cash flows for such period,
plus to the extent deducted in determining such net cash from operating
activities, the sum of (i) consolidated interest charges incurred by the
Borrower and its Consolidated Subsidiaries during such period and (ii) income
tax expense. "Consolidated Interest Expense" means, for any period, the interest
expense of the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis for such period in accordance with generally accepted
accounting principles.
Section 5.14. Consolidations, Mergers and Sales of Assets. The Borrower will
not, and will not permit any Subsidiary to, consolidate or merge with or into
any other Person or sell, lease or otherwise transfer, directly or indirectly,
all or substantially all of its assets to any other Person except as otherwise
permitted by Section 5.04.
Section 5.15. Subsidiary Debt. The Borrower will not permit any of its
Subsidiaries to incur, create, assume, guarantee or in any other manner become
liable with respect to, or extend the maturity of or become responsible for the
payment of any Debt other than (i) Debt owing to the Borrower or a Wholly-Owned
Subsidiary, (ii) Non-Recourse Debt in an aggregate principal amount not to
exceed $150,000,000 (together with any such Non-Recourse Debt incurred by the
Borrower) at any time incurred to finance the acquisition of Properties (other
than Petroleum Properties) and (iii)other Debt in an aggregate principal amount
not to exceed at any time an amount equal to 3% of the Debt Limit and as
adjusted to reflect any subsequent adjustment of the Debt Limit pursuant to
Section 5.10(b)(iii), (iv) or (v), all as notified in writing by the Agent to
the Borrower.
Section 5.16. Subsidiaries. The Borrower will not, and will not permit any
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any restriction (other than any restriction imposed by applicable corporate law)
on (i) the ability of such Subsidiary to make intercompany payments or advances
to the Borrower or (ii) the ability of the Borrower to direct the actions of
such Subsidiary or to otherwise maintain or exercise control over such
Subsidiary's actions, subject to any fiduciary responsibility under applicable
law to any minority stockholders of such Subsidiary.
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ARTICLE 6
Defaults
Section 6.01. Events of Default. If one or more of the following events not
specifically waived in writing by the Required Banks shall have occurred and be
continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan or
shall fail to pay within five Business Days of the due date thereof
any interest, fees or other amount payable under the Financing
Documents;
(b) the Borrower shall fail to observe or perform any covenant or
agreement contained in Section 5.16 for 10 days after it shall have
become aware of such failure or any covenant or agreement contained in
Sections 5.10 through 5.15;
(c) the Borrower shall fail to observe or perform any of its covenants or
agreements contained in any of the Financing Documents (other than
those covered by clause (a) or (b) above) for 30 days after it shall
have become aware of such failure;
(d) any representation, warranty, certification or statement made by the
Borrower in any of the Financing Documents or in any certificate,
financial statement or other document delivered pursuant to any of the
Financing Documents shall prove to have been incorrect in any material
respect when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make any payment in
respect of any Material Debt (other than the Notes) when due or within
any applicable grace period and such default has not been effectively
waived by the holders of such Debt;
(f) any event or condition shall occur which, after the expiration of any
applicable grace period with respect thereto, results in the
acceleration of the maturity of any Material Debt (other than the
Notes) or enables the holder of such Debt or any Person acting on such
holder's behalf to accelerate the maturity thereof and such default
has not been effectively waived by the holders of such Debt (provided,
that prior to the expiration of such grace period, the occurrence of
such event or condition shall constitute a Default hereunder);
(g) the Borrower or any Subsidiary shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its debts
as they become due, or shall take any corporate action to authorize
any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced against the
Borrower or any Subsidiary seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be
entered against the Borrower or any Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an amount or
amounts aggregating in excess of $500,000 which it shall have become
liable to pay under Title IV of ERISA which failure to pay could cause
the Borrower or any Subsidiary (whether directly or jointly and
severally with one or more affiliates) to incur a liability in respect
of such amount or amounts, except for any such failure which is being
192
contested in good faith through appropriate proceedings, so long as
such proceedings are diligently prosecuted and no Lien has been
imposed on any Property of the Borrower or any Subsidiary as a
consequence of such failure; or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any member of
the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate, to impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer any Material Plan; or a condition shall exist
by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multi-employer Plans which could cause the Borrower or any Subsidiary
(whether directly or jointly and severally with one or more
affiliates) of the ERISA Group to incur a current payment obligation
in excess of $500,000;
(j) a judgment or order for the payment of money in excess of $5,000,000
shall be rendered against the Borrower or any Subsidiary and such
judgment or order shall continue unsatisfied and unstayed pending
appeal for a period of 30 days; or
(k) (i) any "person" or "group" of persons shall have acquired "beneficial
ownership" of 35% or more of the outstanding shares of common stock of
the Borrower or (ii) during any period of 24 consecutive calendar
months, individuals who were directors of the Borrower on the first
day of such period and individuals who are "Qualifying Directors", in
the aggregate, shall cease to constitute a majority of the board of
directors of the Borrower; for purposes of this Section (k), a
"Qualifying Director" shall mean any director who (a) is elected by a
majority of the members of the board of directors of the Borrower who
were directors immediately prior to the event that caused the change
in directorships and (b) is not a "person" or member of a "group" of
persons, or an "affiliate" or "associate" of any "person" or "group"
member, or an "associate" of an "affiliate" of any such "person" or
"group" member, which "person" or "group" of persons, together with
all of their respective "affiliates" and "associates" and all
"associates" of their respective "affiliates" (other than a "person"
or "group" of persons or an "affiliate" or "associate" of such
"person" or "group" of persons or an "associate" of such "affiliate",
in each case which is affiliated with the Borrower or any Subsidiary)
comprise a majority of the board of directors of the Borrower
("person", "group", "beneficial ownership", "affiliate" and
"associate" having the meanings assigned thereto in Rules 12b-2 and
13d under the Securities Exchange Act of 1934); then, and in every
such event, the Agent shall (i) if requested by the Banks holding 50%
or more of the aggregate amount of the Commitments then in effect, by
notice to the Borrower terminate the Commitments and they shall
thereupon terminate, and (ii) if requested by the Banks holding 50% or
more of the aggregate principal amount of the Loans then outstanding,
by notice to the Borrower declare the Notes (together with accrued
interest thereon) to be, and the Notes shall thereupon become,
immediately due and payable without presentment, demand, protest,
notice of intent to accelerate or other notice of any kind, all of
which are hereby waived by the Borrower; provided that in the case of
any of the Events of Default specified in Section 6.01(g) or Section
6.01(h) with respect to the Borrower, without any notice to the
Borrower or any other act by the Agent or the Banks, the Commitments
shall thereupon terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable without
presentment, demand, protest, notice of intent to accelerate, notice
of acceleration or other notice of any kind, all of which are hereby
waived by the Borrower.
Section 6.02. Notice of Default. The Agent shall give notice to the Borrower of
a Default under Section 6.01(d) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
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ARTICLE 7
The Agent
Section 7.01. Appointment and Authorization. Each Bank irrevocably appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the Notes as are delegated to the Agent by
the terms hereof or thereof, together with all such powers as are reasonably
incidental thereto.
Section 7.02. Agent and Affiliates. ▇▇▇▇▇▇ Guaranty Trust Company of New York
shall have the same rights and powers under this Agreement as any other Bank and
may exercise or refrain from exercising the same as though it were not the
Agent, and ▇▇▇▇▇▇ Guaranty Trust Company of New York 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
it were not the Agent hereunder.
Section 7.03. Action by Agent. The obligations of the Agent hereunder are only
those expressly set forth herein. Without limiting the generality of the
foregoing, the Agent shall not be required to take any action with respect to
any Default, except as expressly provided in Article 6.
Section 7.04. Consultation with Experts. Consultation with Experts. The Agent
may consult with legal counsel (who may be counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
Section 7.05. Liability of Agent. Neither the Agent nor any of its affiliates
nor any of their respective directors, officers, agents or employees shall be
liable to the Banks for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks or (ii) in
the absence of its own gross negligence or willful misconduct. Neither the Agent
nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation made in
connection with this Agreement or any Borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of the Borrower; (iii)the
satisfaction of any condition specified in Article 3, except receipt of items
required to be delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement or other
writing (which may be a bank wire, telex or similar writing) believed by it to
be genuine or to be signed by the proper party or parties. Without limiting the
generality of the foregoing, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or expressed) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
Section 7.06. Indemnification. Each Bank shall, ratably in accordance with its
Commitment, indemnify the Agent, its affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed by the Borrower)
against any cost, expense (including counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from such indemnitees,
gross negligence or willful misconduct) that such indemnitees may suffer or
incur in connection with this Agreement or any action taken or omitted by such
indemnitees hereunder.
Section 7.07. Credit Decision. Each Bank acknowledges that it has, independently
and without reliance upon the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
that it will, independently and without reliance upon the Agent or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
any action under this Agreement.
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Section 7.08. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Banks and the Borrower. Upon any such resignation,
the Required Banks shall have the right, with the consent of the Borrower, to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Required Banks, and shall have accepted such appointment, within 30 days
after the retiring Agent gives notice of resignation, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent, which shall be a
commercial bank organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $50,000,000. Upon the acceptance of its appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent.
Section 7.09. Agent's Fees. The Borrower shall pay to the Agent for its own
account fees in the amounts and at the times previously agreed upon between the
Borrower and the Agent.
ARTICLE 8
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If on or
prior to the first day of any Interest Period for any Group of Fixed Rate Loans:
(a) the Agent is advised by the Reference Banks that deposits in dollars
(in the applicable amounts) are not being offered to the Reference
Banks in the relevant market for such Interest Period, or
(b) Banks holding Notes evidencing 50% or more of the aggregate principal
amount of the Loans comprising such Group advise the Agent that the
Adjusted CD Rate or the London Interbank Offered Rate, as the case may
be, as determined by the Agent will not adequately and fairly reflect
the cost to such Banks of funding their CD Loans or Euro-Dollar Loans,
as the case may be, for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist,
(a) the obligations of the Banks to make CD Loans or Euro-Dollar Loans, as
the case may be, or to convert outstanding Loans into CD Loans or
Euro-Dollar Loans, as the case may be, shall be suspended and
(b) unless the Agent shall have received a timely Notice of Interest Rate
Election from the Borrower in accordance with Section 2.08 requesting
the conversion of CD Loans or Euro-Dollar Loans, as the case may be,
into a different Type of Fixed Rate Loans, each outstanding CD Loan or
Euro-Dollar Loan, as the case may be, shall be converted into a Base
Rate Loan on the last day of the then current Interest Period
applicable thereto. Unless the Borrower notifies the Agent at least
one Domestic Business Day before the date of any Fixed Rate Borrowing
for which a Notice of Borrowing has previously been given that it
elects not to borrow on such date, such Borrowing shall instead be
made as a Base Rate Borrowing.
Section 8.02. Illegality. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any Bank (or its
Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and
such Bank shall so notify the Agent, the Agent shall forthwith give notice
thereof to the other Banks and the Borrower, whereupon until such Bank notifies
the Borrower and the Agent that the circumstances giving rise to such suspension
no longer exist, the obligation of such Bank to make Euro-Dollar Loans, or to
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convert outstanding Loans into Euro-Dollar Loans, shall be suspended. Before
giving any notice to the Agent pursuant to this Section, such Bank shall
designate a different Euro-Dollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such notice is given, all Euro-Dollar
Loans of such Bank then outstanding shall be converted to Base Rate Loans either
(a) on the last day of the then current Interest Period applicable to such
Euro-Dollar Loans if such Bank may lawfully continue to maintain and
fund such Loans to such day or
(b) immediately if such Bank may not lawfully continue to maintain and
fund such Loans to such day.
Section 8.03. Increased Cost and Reduced Return.
(a) If on or after the date hereof, the adoption of any applicable law,
rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency: (i) shall subject
any Bank (or its Applicable Lending Office) to any tax, duty or other
charge with respect to its Fixed Rate Loans, its Note or its
obligation to make Fixed Rate Loans, or shall change the basis of
taxation of payments to any Bank (or its Applicable Lending Office) of
the principal of or interest on its Fixed Rate Loans or any other
amounts due under this Agreement in respect of its Fixed Rate Loans or
its obligation to make Fixed Rate Loans (except for any increase in
franchise taxes imposed or changes in the rate of tax on the overall
net income of such Bank or its Applicable Lending Office imposed by
the jurisdiction in which such Bank's principal executive office or
Applicable Lending Office is located); or (ii) shall impose, modify or
deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding (A) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve Percentage and
(B) with respect to any Euro-Dollar Loan any such requirement with
respect to which such Bank is entitled to compensation during the
relevant Interest Period under Section 2.14), special deposit,
insurance assessment (excluding, without respect to any CD Loan, any
such requirement reflected in an applicable Assessment Rate) or
similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Bank (or its Applicable Lending
Office) or shall impose on any Bank (or its Applicable Lending Office)
or on the United States market for certificates of deposit or the
London interbank market any other condition affecting its Fixed Rate
Loans, its Note or its obligation to make Fixed Rate Loans; and the
result of any of the foregoing is to increase the cost to such Bank
(or its Applicable Lending Office) of making or maintaining any Fixed
Rate Loan, or to reduce the amount of any sum received or receivable
by such Bank (or its Applicable Lending Office) under this Agreement
or under its Note with respect thereto, by an amount deemed by such
Bank to be material, then, within 15 days after demand by such Bank
(with a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any
change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on capital of
such Bank (or its Parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its Parent) could
have achieved but for such law, rule, regulation, change or compliance
(taking into consideration its policies with respect to capital
196
adequacy) by an amount deemed by such Bank to be material, then from
time to time, within 15 days after demand by such Bank (with a copy to
the Agent), the Borrower shall pay to such Bank such additional amount
or amounts as will compensate such Bank (or its Parent) for such
reduction; provided that the Borrower will not be obligated to
compensate any Bank for any such reduction attributable to a period
commencing more than 120 days prior to the giving of notice by such
Bank to the Borrower of its intention to seek compensation under this
paragraph (b) and the making of demand by such Bank for payment
thereof in accordance herewith (except for any period during which,
because of the retroactive application of such statute, regulation or
other basis upon which the claimed compensation is based, such Bank
did not know that the amount of such reduction would arise or accrue).
(c) Each Bank will promptly notify the Borrower and the Agent of any event
of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation
will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, such Bank
may use any reasonable averaging and attribution methods.
Section 8.04. Base Rate Loans Substituted for Affected Fixed Rate Loans. If (i)
the obligation of any Bank to make or maintain Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03(a) and the Borrower shall, by at least five Euro-Dollar
Business Days' prior notice to such Bank through the Agent, have elected that
the provisions of this Section shall apply to such Bank, then, unless and until
such Bank notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as (or continued
as or converted into) CD Loans or Euro-Dollar Loans, as the case may
be, shall instead be Base Rate Loans, and
(b) after each of its outstanding CD Loans or Euro-Dollar Loans, as the
case may be, has been repaid (or converted), all payments of principal
which would otherwise be applied to repay such Fixed Rate Loans shall
be applied to repay its Base Rate Loans instead.
If such Bank notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the Borrower shall elect that the principal amount of
each such Base Rate Loan shall be converted into a CD Loan or a Euro-Dollar
Loan, as the case may be, on the first day of the next succeeding Interest
Period applicable to the related CD Loans or Euro-Dollar Loans of the other
Banks.
Section 8.05. Substitution of Bank. If (i) the obligation of any Bank to make
Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any Bank
has demanded compensation under Section 8.03, the Borrower shall have the right,
with the assistance of the Agent, to seek a mutually satisfactory substitute
bank or banks (which may be one or more of the Banks) to purchase the Note and
assume the Commitment of such Bank.
ARTICLE 9
Miscellaneous
Section 9.01. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party: (x) in the
case of the Borrower or the Agent, at its address, facsimile number or telex
number set forth on the signature pages hereof, (y) in the case of any Bank, at
its address or telex number set forth in its Administrative Questionnaire or (z)
in the case of any party, such other address, facsimile number or telex number
as such party may hereafter specify for the purpose by notice to the Agent and
the Borrower. Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted to the telex
number specified in this Section and the appropriate answerback is received (ii)
197
or if given by any other means, when received; provided that notices given by
telex to the Agent under Article 2 or Article 8 shall not be effective until
received.
Section 9.02. No Waivers. No failure or delay by the Agent or any Bank in
exercising any right, power or privilege under any Financing Document shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies therein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
Section 9.03. Expenses; Documentary Taxes; Indemnification.
(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses of
the Agent, including fees and disbursements of special counsel for the
Agent, in connection with the preparation of the Financing Documents,
any waiver or consent thereunder or any amendment thereof or any
Default or alleged Default hereunder and (ii) if an Event of Default
occurs, all out-of-pocket expenses incurred by the Agent or any Bank,
including fees and disbursements of counsel, in connection with such
Event of Default and collection and other enforcement proceedings
resulting therefrom. The Borrower shall indemnify each Bank against
any transfer taxes, documentary taxes, assessments or charges made by
any governmental authority by reason of the execution and delivery of
any Financing Document.
(b) The Borrower agrees to indemnify the Agent and each Bank, their
respective affiliates and the respective directors, officers, agents
and employees of the foregoing (each an "Indemnitee") and hold each
Indemnitee harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of counsel, which
may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) relating to or
arising out of this Agreement or any actual or proposed use of
proceeds of Loans hereunder; provided that no Indemnitee shall have
the right to be indemnified hereunder for such Indemnitees own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.
Section 9.04. Sharing of Set-Offs. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest due with respect
to any Note held by it which is greater than the proportion received by any
other Bank in respect of the aggregate amount of principal and interest due with
respect to any Note held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the Notes
held by the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with respect to the
Notes held by the Banks shall be shared by the Banks pro rata; provided that
nothing in this Section shall impair the right of any Bank to exercise any right
of set-off or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Note acquired pursuant to the foregoing arrangements may exercise rights of
set-off or counterclaim and other rights with respect to such participation as
fully as if such holder of a participation were a direct creditor of the
Borrower in the amount of such participation.
Section 9.05. Amendments and Waivers. Any provision of this Agreement or the
Notes may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed by the Borrower and the Required Banks (and, if the rights
or duties of the Agent are affected thereby, by the Agent); provided that no
such amendment or waiver shall, unless signed by all the Banks, (i) increase or
decrease the Commitment of any Bank or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
fees hereunder, (iii)postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder or for any reduction or termination
of any Commitment or (iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement.
198
Section 9.06. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or otherwise transfer
any of its rights under this Agreement without the prior written
consent of all Banks. Any assignment or transfer hereunder shall be
made in accordance with applicable law, including without limitation
federal and/or state securities laws, if applicable.
(b) Any Bank may at any time grant to one or more banks or other financial
institutions (each a "Participant") participating interests in its
Commitment or any or all of its Loans. In the event of any such grant
by a Bank of a participating interest to a Participant, whether or not
upon notice to the Borrower and the Agent, such Bank shall remain
responsible for the performance of its obligations hereunder, and the
Borrower and the Agent shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations under
this Agreement. The rights and entitlements of any Bank under Sections
2.11 and 2.14 and Article 8 shall be determined for purposes of this
Agreement on the basis of what such Bank would be entitled to receive
under this Agreement had it not granted any participating interest to
any Participant, whether or not such Bank has in fact done so. Any
agreement pursuant to which any Bank may grant such a participating
interest shall provide that such Bank shall retain the sole right and
responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided
that such participation agreement may provide that such Bank will not
agree to any modification, amendment or waiver of this Agreement
described in clause (i), (ii) or (iii) of Section 9.05 without the
consent of the Participant and may contain any other provisions, or
such participation may take place on such other terms, as such Bank
deems appropriate. An assignment or other transfer which is not
permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating
interest granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
financial institutions (each an "Assignee") all or a portion of its
rights and obligations under the Financing Documents, and such
Assignee shall assume such rights and obligations, pursuant to an
instrument executed by such Assignee and such transferor Bank, with
(and subject to) notice to, and the consent of, the Borrower and the
Agent (which consents shall not be unreasonably withheld); provided
that if an Assignee is an affiliate of such transferor Bank, such
notice shall be given but no such consent shall be required; provided,
further, that no assignment representing less than $5,000,000 in
Commitments shall be permitted without the consent of the Borrower and
the Agent; and provided, further, that during the continuance of an
Event of Default, no such consent of the Borrower shall be required.
Upon execution and delivery of such an instrument and payment by such
Assignee to such transferor Bank of an amount equal to the purchase
price agreed between such transferor Bank and such Assignee, such
Assignee shall be a Bank party to this Agreement and shall have all
the rights and obligations of a Bank with a Commitment as set forth in
such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and
no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the
transferor Bank, the Agent and the Borrower shall make appropriate
arrangements so that, if required, new Notes are issued to the
Assignee. In connection with any such assignment, the transferor Bank
shall pay to the Agent an administrative fee for processing such
assignment in the amount of $2,500. If the Assignee is not
incorporated under the laws of the United States of America or a state
thereof, it shall, prior to the first date on which interest or fees
are payable hereunder for its account, deliver to the Borrower and the
Agent certification as to exemption from deduction or withholding of
any United States federal income taxes in accordance with Section
2.13.
199
(d) Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations
hereunder.
(e) No Assignee or other transferee of any Bank's rights (not including
Participants) shall be entitled to receive any greater payment under
Section 8.03 than such Bank would have been entitled to receive with
respect to the rights transferred, unless such transfer is made with
the Borrower's prior written consent or by reason of the provisions of
Section 8.02 or 8.03 requiring such Bank to designate a different
Applicable Lending Office under certain circumstances or at a time
when the circumstances giving rise to such greater payment did not
exist.
Section 9.07. Collateral. Each of the Banks represents to the Agent and each of
the other Banks that it in good faith is not relying upon any "margin stock" (as
defined in Regulation U) as collateral in the extension or maintenance of the
credit provided for in this Agreement.
Section 9.08. New York Law; Submission to Jurisdiction. THIS AGREEMENT AND EACH
NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE
OF NEW YORK. THE BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY
NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. THE BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
Section 9.09. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Section 9.10. Confidentiality. Each of the Agent and the Banks agrees to
maintain the confidentiality of any information of a confidential nature which
it has or shall acquire during the term of this Agreement relating to the
business, operations and financial or other condition of the Borrower or its
Subsidiaries or, with respect to ERISA matters, any other member of the ERISA
Group, except and to the extent that (i) the Agent or such Bank may be required
to disclose such information (a) at the request of a bank regulatory agency or
in connection with an examination of the Agent or such Bank by bank examiners,
(b) pursuant to subpoena or other court process, (c) at the express direction of
any other authorized government agency, (d) to its independent auditors or (e)
otherwise as required by law or (ii) such information is disclosed in connection
with the prospective or actual assignment, grant of a participation interest or
other transfer by a Bank of or in any of its interests in this Agreement, the
Notes or the other Financing Documents, provided that such prospective or actual
Assignee, Participant or other transferee shall have agreed to keep such
information confidential on the terms and conditions set forth herein.
Section 9.11. No Unwritten Agreements. THIS AGREEMENT AND THE NOTES REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO, SUPERSEDING ANY AND ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT MATTER HEREOF, AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF ORAL AGREEMENTS OF THE PARTIES HERETO, WHETHER
MADE BEFORE, ON OR AFTER THE DATE OF THIS AGREEMENT. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES HERETO.
200
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written. CABOT OIL & GAS CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
Commitments:
$32,500,000 BANKBOSTON, N.A.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director
$32,500,000 BANK OF MONTREAL
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
$32,500,000 ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
$32,500,000 NATIONSBANK, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
$20,000,000 BANK ONE, TEXAS, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
$20,000,000 CHASE BANK OF TEXAS, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
$20,000,000 FROST NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Market President
$20,000,000 MEES PIERSON CAPITAL CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
201
$20,000,000 PNC BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
$20,000,000 THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
------------
Total Commitments
$250,000,000
============
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
202
PRICING SCHEDULE
Each of "Euro-Dollar Margin", "CD Margin" and "Commitment Fee Rate" means, for
any date, the rate set forth below in the row opposite such term and in the
column corresponding to the Debt Percentage that exists on such date:
Debt Percentage
Lower than 60%
60%-80%
Higher than 80%
Euro-Dollar
Margin
0.750%
1.00%
1.250%
CD Margin
0.875%
1.125%
1.375%
Commitment Fee
Rate
0.250%
0.3750%
0.3750%
▇▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
December 17, 1998
For value received, Cabot Oil & Gas Corporation, a Delaware corporation (the
"Borrower"), promises to pay to the order of (the "Bank"), for the account of
its Applicable Lending Office, the unpaid principal amount of each Loan made by
the Bank to the Borrower pursuant to the Credit Agreement referred to below on
the date or dates provided for in the Credit Agreement. The Borrower promises to
pay interest on the unpaid principal amount of each such Loan on the dates and
at the rate or rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of ▇▇▇▇▇▇ Guaranty
Trust Company of New York, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇. All Loans made by
the Bank, the respective Types thereof and all repayments of the principal
thereof shall be recorded by the Bank and, if the Bank so elects in connection
with any transfer or enforcement hereof, appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding may be
endorsed by the Bank on the schedule attached hereto, or on a continuation of
such schedule attached to and made a part hereof; provided that the failure of
the Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement. This note
is one of the Notes referred to in the Credit Agreement dated as of December 17,
1998 among the Borrower, the banks parties thereto and ▇▇▇▇▇▇ Guaranty Trust
Company of New York, as Agent (as the same may be amended from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement are used herein with
the same meanings. Reference is made to the Credit Agreement for provisions for
the prepayment hereof and the acceleration of the maturity hereof.
CABOT OIL & GAS CORPORATION
By:_____________________________
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Date
Amount of Loan
Type of Loan
Amount of Principal
Repaid Notation
Made By
204
EXHIBIT B
OPINION OF SPECIAL
COUNSEL FOR THE BORROWER
[Effective Date]
To the Banks and the Agent Referred to Below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We have acted as special counsel for Cabot Oil & Gas Corporation (the
"Borrower") in connection with the Credit Agreement (the "Credit Agreement")
dated as of December , 1998 among the Borrower, the banks parties thereto and
▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent. This opinion is delivered
to you pursuant to Section 3.01 of the Credit Agreement. Unless otherwise
defined herein, capitalized terms used in this opinion are used as defined in,
or by reference in, the Credit Agreement. In connection with this opinion, we
have examined copies of the following documents:
(a) The Credit Agreement;
(b) The Notes; and
(c) The certificate of incorporation and bylaws, as amended or restated to
the date hereof, of the Borrower.
The documents described in Paragraphs (a) and (b) above are herein called the
"Loan Documents." In addition, we have reviewed the originals or copies,
certified or otherwise identified to our satisfaction, of such documents and
corporate records furnished to us by the Borrower, certificates of public
officials and of representatives of the Borrower, statutes and other instruments
and documents and (except as otherwise stated herein) have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion. In giving such opinion, we have relied upon
certificates of officers of the Borrower with respect to the accuracy of the
factual matters contained in such certificates copies of which are attached
hereto. In our examination of the Loan Documents, we have assumed, without
independent investigation, (i) the genuineness of all signatures of, and the
authority of, all Persons signing all documents examined by us in connection
with this opinion on behalf of parties thereto, other than the Borrower, (ii)
the capacity of each signing party, and (iii) the authenticity of all documents
submitted to us as originals and the conformity to authentic original documents
of all copies submitted to us as certified, conformed or photostatic copies.
Based upon and subject to the foregoing and other qualifications and assumptions
set forth below and upon such other matters as we deem appropriate, we are of
the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware, and has all
corporate powers required to carry on its business as now conducted.
Neither the Borrower nor any Subsidiary is subject to regulation under
the Public Utility Holding Company Act of 1935, the Investment Company
Act of 1940 or the Interstate Commerce Act, in each case such that the
application thereof would limit the incurrence by the Borrower of Debt
under the Credit Agreement.
2. The Borrower has taken all necessary corporate action to authorize the
execution, delivery and performance of each of the Loan Documents. The
Borrower has corporate power and authority to execute and deliver the
Loan Documents and to perform its obligations thereunder.
3. The execution and delivery by the Borrower of the Loan Documents, and
the performance of its obligations thereunder do not and will not
conflict with any of the terms, conditions or provisions of the
certificate of incorporation or bylaws of the Borrower; or to our
knowledge after due inquiry, (A) require any action by or in respect
205
of, or filing with, any Texas or United States federal governmental
body, agency or official, or (B) violate any provision of any existing
Texas, New York, Delaware corporate or United States federal law or
regulation applicable to the Borrower. We call to your attention the
fact that in the event the Borrower or a Subsidiary grants liens to
its creditors, it may be required to grant equal and ratable liens to
creditors of Cabot Corporation under provisions governing indebtedness
of Cabot Corporation which require the granting of equal and ratable
liens to creditors of Cabot Corporation.
4. The Credit Agreement constitutes a valid and binding agreement of the
Borrower and the Notes constitute valid and binding obligations of the
Borrower, in each case enforceable in accordance with their respective
terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
The foregoing opinions are subject to the following additional
assumptions and qualifications: (a) We have not been called upon to,
and accordingly do not, express any opinion as to the various state
and Federal Laws (other than Regulations U or X promulgated by the
Board of Governors of the Federal Reserve System, as in effect on the
date hereof) regulating banks or the conduct of their business that
may relate to the Loan Documents and the transactions contemplated
thereby. (b) We express no opinion in paragraph 3 above as to whether
the conduct of the Borrower's business in the ordinary course is in
compliance with the laws, rules and regulations governing the same.
(c) We express no opinion as to the enforceability under Texas law of
(i) Section 6.01 of the Credit Agreement to the extent it purports to
waive any defense to the performance of contract obligations which
cannot, as a matter of law, be effectively waived, or (ii) any
indemnity provisions contained in the Credit Agreement or the Notes.
(d) For the purpose of rendering the opinions expressed in Paragraph 4
above we have assumed that the Agent and each Bank will at all times
comply strictly with the provisions of Section 2.15 of the Credit
Agreement. If any Bank fails to comply with the usury savings clause
provisions under Section 2.15 of the Credit Agreement prohibiting the
collections of amounts constituting interest payable under or in
connection with the Credit Agreement and the Notes in excess of the
highest lawful rate, we express no opinion as to whether the refunding
of such amounts, or the crediting of any outstanding principal as
provided in Section 2.15 of the Credit Agreement with such amount
which has been contracted for, charged or collected in violation of
any applicable usury laws is sufficient to avoid violation of such
laws.
We are qualified to practice law in the States of New York and Texas only and do
not hold ourselves out as experts on, or express any opinion herein concerning,
the laws of any jurisdiction other than the laws of the States of New York,
Texas, the General Corporation Law of the State of Delaware and applicable
federal law of the United States. This opinion is being furnished to the Banks
and the Agent for the use of their counsel. No other use or distribution of this
opinion may be made without our prior written consent.
Very truly yours,
206
EXHIBIT C
OPINION OF MANAGING COUNSEL OF THE BORROWER
[Effective Date]
To the Banks and The Agent Referred to Below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
I am Managing Counsel of Cabot Oil & Gas Corporation (the "Borrower") and am
familiar with the Credit Agreement (the "Credit Agreement") dated as of December
____, 1998 among the Borrower, the banks parties thereto and ▇▇▇▇▇▇ Guaranty
Trust Company of New York, as Agent. This opinion is delivered to you pursuant
to Section 3.01 of the Credit Agreement. Unless otherwise defined herein,
capitalized terms used in this opinion are used as defined in, or by reference
in, the Credit Agreement. In Connection with this opinion, I have examined
copies of the following documents: (a) The Credit Agreement; and (b) The Notes.
The documents described in Paragraphs (a) and (b) above are herein called the
"Loan Documents."
In addition, I have reviewed the originals or copies, certified or otherwise
identified to my satisfaction, of such documents and corporate records furnished
to me by the Borrower, certificates of public officials and of representatives
of the Borrower, statutes and other instruments and documents and (except as
otherwise stated herein) have conducted such other investigations of fact and
law as I have deemed necessary or advisable for purposes of this opinion. In
giving such opinion, I have relied upon certificates of officers of the Borrower
with respect to the accuracy of the factual matters contained in such
certificates copies of which are attached hereto. In my examination of the Loan
Documents, I have assumed, without independent investigation, (i) the
genuineness of all signatures of, and the authority of, all Persons signing all
documents examined by me in connection with this opinion on behalf of parties
thereto, (ii) the capacity of each signing party, and (iii)the authenticity of
all documents submitted to me as certified, conformed or photostatic copies. I
have not been requested to opine, and I have not opined, as to any issues other
than those expressly set forth herein. It is my understanding that as to such
other matters, you are relying on the respective opinions of even date herewith
of ▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Borrower; and ▇▇▇▇▇, Polk & ▇▇▇▇▇▇▇▇, special
counsel for the Agent. Based upon and subject to the foregoing, I am of the
opinion that:
1. To my knowledge after due inquiry, the Borrower has all material
governmental licenses, authorizations and consents required to carry on its
business as now conducted and is in good standing and is duly qualified as
a foreign corporation in all jurisdictions in which the failure to so
qualify would have a Material Adverse Effect.
2. To my knowledge after due inquiry, the execution and delivery by the
Borrower of the Loan Documents, and the performance of its obligations
hereunder do not and will not (A) create (with or without the giving of
notice or the lapse of time, or both) a default under or a breach of any
instrument or document evidencing indebtedness for borrowed money to which
the Borrower is a party or by which it is bound or any other material
agreement, or (B) result in the creation or imposition of any Lien on any
asset of the Borrower pursuant to any such agreement or instrument, or (C)
conflict with or result in a breach of any order, judgment, injunction or
decree which is binding upon the Borrower.
3. Except as described in the 1997 Form 10-K Statement, there is not action,
suit or proceeding pending against, or to my knowledge threatened against
or affecting, the Borrower or any or its Subsidiaries or Affiliates before
any court or arbitrator or any governmental body, agency or official in
which there is a reasonable possibility of an adverse decision which could
materially adversely affect the business, Properties, financial position,
results of operations or prospects of the Borrower or of the Borrower and
its Subsidiaries, taken as a whole, or which in any manner draws into
question the validity of any of the Loan Documents.
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I am qualified to practice law in the State of Texas only and I do not hold
myself out as an expert on, or express any opinion herein concerning, the laws
of any jurisdiction other than the laws of the State of Texas and applicable
federal law of the United States. This opinion is being furnished to the Banks
and the Agent for their use of their counsel. No other use or distribution of
this opinion may be made without my prior written consent.
Very truly yours,
▇▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, SPECIAL COUNSEL FOR THE AGENT
[Effective Date]
To the Banks and the Agent Referred to Below
c/▇ ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have participated in the preparation of the Credit Agreement (the "Credit
Agreement") dated as of December , 1998 among Cabot Oil & Gas Corporation, a
Delaware corporation (the "Borrower"), the banks parties thereto and ▇▇▇▇▇▇
Guaranty Trust Company of New York, as Agent (the "Agent"), and have acted as
special counsel for the Agent for the purpose of rendering this opinion pursuant
to Section 3.01 of the Credit Agreement. Terms defined in the Credit Agreement
are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for purposes of this
opinion. Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the Credit
Agreement and the Notes are within the Borrower's corporate powers and
have been duly authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and binding agreement of the
Borrower and each Note constitutes a valid and binding obligation of
the Borrower, in each case enforceable in accordance with its terms
except as the same may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and by general principles
of equity.
We are members of the Bar of the State of New York and the foregoing opinion is
limited to the laws of the State of New York, the federal laws of the United
States of America and the General Corporation Law of the State of Delaware. In
giving the foregoing opinion, we express no opinion as to the effect (if any) of
any law of any jurisdiction (except the State of New York) in which any Bank is
located which limits the rate of interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the above matter. This
opinion may not be relied upon by you for any other purpose or relied upon by
any other person without our prior written consent.
Very truly yours,
209