EXECUTION
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CREDIT AGREEMENT
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QUESTAR MARKET RESOURCES, INC.
as Borrower
BANK OF AMERICA, N.A.
as Administrative Agent
BANC OF AMERICA SECURITIES, LLC
as Lead Arranger and Book Manager
and
CERTAIN FINANCIAL INSTITUTIONS
as Lenders
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$280,000,000
July 31, 2001
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TABLE OF CONTENTS
Page
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CREDIT AGREEMENT.............................................................................1
ARTICLE I - THE LOAN.........................................................................1
Section 1.1. COMMITMENTS TO LEND; NOTES...............................................1
Section 1.2. REQUESTS FOR NEW LOANS...................................................1
Section 1.3. CONTINUATIONS AND CONVERSIONS OF EXISTING LOANS..........................2
Section 1.4. USE OF PROCEEDS..........................................................3
Section 1.5. INTEREST RATES AND FEES..................................................3
Section 1.6. PREPAYMENTS..............................................................4
ARTICLE II - PAYMENTS TO LENDERS.............................................................5
Section 2.1. GENERAL PROCEDURES.......................................................5
Section 2.2. INCREASED COST AND REDUCED RETURN........................................6
Section 2.3. LIMITATION ON TYPES OF LOANS.............................................7
Section 2.4. ILLEGALITY...............................................................7
Section 2.5. TREATMENT OF AFFECTED LOANS..............................................8
Section 2.6. COMPENSATION.............................................................8
Section 2.7. CHANGE OF APPLICABLE LENDING OFFICE......................................9
Section 2.8. REPLACEMENT OF LENDERS...................................................9
Section 2.9. TAXES....................................................................9
ARTICLE III - CONDITIONS PRECEDENT TO LENDING...............................................11
Section 3.1. DOCUMENTS TO BE DELIVERED...............................................11
Section 3.2. ADDITIONAL CONDITIONS PRECEDENT TO FIRST LOAN...........................12
ARTICLE IV - REPRESENTATIONS AND WARRANTIES.................................................13
Section 4.1. NO DEFAULT..............................................................13
Section 4.2. ORGANIZATION AND GOOD STANDING..........................................14
Section 4.3. AUTHORIZATION...........................................................14
Section 4.4. NO CONFLICTS OR CONSENTS................................................14
Section 4.5. ENFORCEABLE OBLIGATIONS.................................................14
Section 4.6. INITIAL FINANCIAL STATEMENTS............................................14
Section 4.7. OTHER OBLIGATIONS AND RESTRICTIONS......................................15
Section 4.8. FULL DISCLOSURE.........................................................15
Section 4.9. LITIGATION..............................................................15
Section 4.10. LABOR DISPUTES AND ACTS OF GOD..........................................15
Section 4.11. ERISA PLANS AND LIABILITIES.............................................15
Section 4.12. ENVIRONMENTAL AND OTHER LAWS............................................16
Section 4.13. BORROWER'S SUBSIDIARIES.................................................16
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Section 4.14. TITLE TO PROPERTIES; LICENSES...........................................16
Section 4.15. GOVERNMENT REGULATION...................................................17
Section 4.16. INSIDER.................................................................17
Section 4.17. SOLVENCY................................................................17
ARTICLE V - AFFIRMATIVE COVENANTS OF BORROWER...............................................17
Section 5.1. PAYMENT AND PERFORMANCE.................................................17
Section 5.2. BOOKS, FINANCIAL STATEMENTS AND REPORTS.................................17
Section 5.3. OTHER INFORMATION AND INSPECTIONS.......................................18
Section 5.4. NOTICE OF MATERIAL EVENTS AND CHANGE OF ADDRESS.........................19
Section 5.5. MAINTENANCE OF PROPERTIES...............................................19
Section 5.6. MAINTENANCE OF EXISTENCE AND QUALIFICATIONS.............................19
Section 5.7. PAYMENT OF TRADE LIABILITIES, TAXES, ETC................................20
Section 5.8. INSURANCE...............................................................20
Section 5.9. PERFORMANCE ON BORROWER'S BEHALF........................................20
Section 5.10. INTEREST................................................................20
Section 5.11. COMPLIANCE WITH AGREEMENTS AND LAW......................................20
Section 5.12. ENVIRONMENTAL MATTERS...................................................20
Section 5.13. EVIDENCE OF COMPLIANCE..................................................21
Section 5.14. BANK ACCOUNTS; OFFSET...................................................21
ARTICLE VI - NEGATIVE COVENANTS OF BORROWER.................................................21
Section 6.1. INDEBTEDNESS............................................................22
Section 6.2. LIMITATION ON LIENS.....................................................23
Section 6.3. LIMITATION ON INVESTMENTS AND NEW BUSINESSES............................23
Section 6.4. LIMITATION ON MERGERS...................................................23
Section 6.5. LIMITATION ON ISSUANCE OF SECURITIES BY SUBSIDIARIES OF BORROWER........23
Section 6.6. TRANSACTIONS WITH AFFILIATES............................................23
Section 6.7. PROHIBITED CONTRACTS....................................................24
Section 6.9. LIMITATION ON SALES OF PROPERTY.........................................24
Section 6.10. HEDGING CONTRACTS.......................................................24
Section 6.11. FUNDED DEBT TO TOTAL CAPITALIZATION.....................................25
Section 6.12. NET WORTH...............................................................25
ARTICLE VII - EVENTS OF DEFAULT AND REMEDIES................................................25
Section 7.1. EVENTS OF DEFAULT.......................................................25
Section 7.2. REMEDIES................................................................28
ARTICLE VIII - AGENT........................................................................28
Section 8.1. APPOINTMENT, POWERS, AND IMMUNITIES.....................................28
Section 8.2. RELIANCE BY AGENT.......................................................28
Section 8.3. DEFAULTS................................................................29
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Section 8.4. RIGHTS AS LENDER........................................................29
Section 8.5. INDEMNIFICATION.........................................................29
Section 8.6. NON-RELIANCE ON AGENT AND OTHER LENDERS.................................30
Section 8.7. SHARING OF SET-OFFS AND OTHER PAYMENTS..................................30
Section 8.8. INVESTMENTS.............................................................31
Section 8.9. BENEFIT OF ARTICLE VIII.................................................31
Section 8.10. RESIGNATION.............................................................31
ARTICLE IX - MISCELLANEOUS..................................................................31
Section 9.1. WAIVERS AND AMENDMENTS; ACKNOWLEDGMENTS.................................31
Section 9.2. SURVIVAL OF AGREEMENTS; CUMULATIVE NATURE...............................33
Section 9.3. NOTICES.................................................................33
Section 9.4. PAYMENT OF EXPENSES; INDEMNITY..........................................34
Section 9.5. JOINT AND SEVERAL LIABILITY; PARTIES IN INTEREST........................35
Section 9.6. ASSIGNMENTS AND PARTICIPATIONS..........................................35
Section 9.7. CONFIDENTIALITY.........................................................37
Section 9.8. GOVERNING LAW; SUBMISSION TO PROCESS....................................38
Section 9.9. LIMITATION ON INTEREST..................................................38
Section 9.10. TERMINATION; LIMITED SURVIVAL...........................................39
Section 9.11. SEVERABILITY............................................................39
Section 9.12. COUNTERPARTS; FAX.......................................................39
Section 9.13. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC.............................39
Section 9.14. DEFINED TERMS...........................................................40
Section 9.15. ANNEX I, EXHIBITS AND SCHEDULES; ADDITIONAL DEFINITIONS.................40
Section 9.16. AMENDMENT OF DEFINED INSTRUMENTS........................................40
Section 9.17. REFERENCES AND TITLES...................................................40
Section 9.18. CALCULATIONS AND DETERMINATIONS.........................................40
Section 9.19. CONSTRUCTION OF INDEMNITIES AND RELEASES................................41
SCHEDULES AND EXHIBITS:
Annex I - Defined Terms
Schedule 1 - Disclosure Schedule
Exhibit A - Promissory Note
Exhibit B - Continuation/Conversion Notice
Exhibit C - Certificate Accompanying Financial Statements
Exhibit D - Opinion of Counsel for Restricted Persons
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Exhibit E - Assignment and Acceptance Agreement
Exhibit F - Borrowing Notice
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CREDIT AGREEMENT
THIS
CREDIT AGREEMENT is made as of July 31, 2001, by and among Questar
Market Resources, Inc., a Utah corporation (herein called "Borrower"), Bank of
America, N.A., individually and as administrative agent (herein called "Agent")
and the undersigned Lenders. In consideration of the mutual covenants and
agreements contained herein the parties hereto agree as follows:
ARTICLE I - THE LOAN
Section 1.1. COMMITMENTS TO LEND; NOTES. Subject to the terms and
conditions hereof, each Lender severally agrees to make loans to Borrower on the
date hereof (herein called such Lender's "Loans") upon Borrower's request from
time to time during the Commitment Period, provided that (i) subject to Sections
2.3, 2.4 and 2.5, all Lenders are requested to make Loans of the same Type in
accordance with their respective Percentage Shares and as part of the same
Borrowing, and (ii) the aggregate amount of all Loans does not exceed
$280,000,000. The obligation of Borrower to repay to each Lender the aggregate
amount of the Loans made by such Lender, together with interest accruing in
connection therewith, shall be evidenced by a single promissory note (herein
called such Lender's "Note") made by Borrower payable to the order of such
Lender in the form of Exhibit A with appropriate insertions. The amount of
principal owing on any Lender's Note at any given time shall be the aggregate
amount of the Loans theretofore made by such Lender minus all payments of
principal theretofore received by such Lender on such Note. Interest on each
Note shall accrue and be due and payable as provided herein and therein. Each
Note shall be due and payable as provided herein and therein, and shall be due
and payable in full on the Maturity Date. Subject to the terms and conditions
hereof, Borrower may borrow, repay, and reborrow Loans under this Agreement
during the Commitment Period. Borrower may have no more than ten borrowings of
Eurodollar Loans outstanding at any time.
Section 1.2. REQUESTS FOR NEW LOANS. Borrower must give to Agent
written notice (or telephonic notice promptly confirmed in writing) of any
requested Borrowing of new Loans to be advanced by Lenders. Each such notice
constitutes a "Borrowing Notice" hereunder and must:
(a) specify the aggregate amount of any such Borrowing of new Base Rate
Loans and the date on which such Base Rate Loans are to be advanced, or the
aggregate amount of any such Borrowing of new Eurodollar Loans, the date on
which such Eurodollar Loans are to be advanced (which shall be the first day of
the Eurodollar Interest Period which is to apply thereto), and the length of the
applicable Eurodollar Interest Period; and
(b) be received by Agent not later than 11:00 a.m., Dallas,
Texas time,
on the day on which any such Base Rate Loans are to be made, or the second
Business Day preceding the day on which any such Eurodollar Loans are to be
made.
Each such written request or confirmation must be made in the form and substance
of the "Borrowing Notice" attached hereto as Exhibit F, duly completed and
signed by an officer of the Borrower or such other Person duly authorized by the
President of Borrower, provided that Borrower shall deliver a copy of such
authorization to Agent. Each such telephonic request shall be deemed a
representation, warranty, acknowledgment and agreement by Borrower as to the
matters which are required to be set out in such written confirmation. Upon
receipt of any such Borrowing Notice, Agent shall give each Lender notice of the
terms thereof not later than 1:00 p.m., Dallas,
Texas time on the day it
receives such Borrowing Notice from Borrower if it receives such Borrowing
Notice by 11:00 a.m., Dallas,
Texas time, otherwise on the next Business Day. If
all conditions precedent to such new Loans have been met, each Lender will on
the date requested promptly remit to Agent at Agent's office in Dallas,
Texas
the amount of such Lender's new Loan in immediately available funds, and upon
receipt of such funds, unless to its actual knowledge any conditions precedent
to such Loans have been neither met nor waived as provided herein, Agent shall
promptly make such Loans available to Borrower. Unless Agent shall have received
prompt notice from a Lender that such Lender will not make available to Agent
such Lender's new Loan, Agent may in its discretion assume that such Lender has
made such Loan available to Agent in accordance with this section and Agent may
if it chooses, in reliance upon such assumption, make such Loan available to
Borrower. If and to the extent such Lender shall not so make its new Loan
available to Agent, such Lender and Borrower severally agree to pay or repay to
Agent within three days after demand the amount of such Loan together with
interest thereon, for each day from the date such amount was made available to
Borrower until the date such amount is paid or repaid to Agent, with interest at
(1) the Federal Funds Rate, if such Lender is making such payment; provided that
Agent gave notice of the terms of the Borrowing Notice to such Lender in
accordance with the terms of this Section 1.2, and (2) the interest rate
applicable at the time to the other new Loans made on such date, if Borrower is
making such repayment. If neither such Lender nor Borrower pays or repays to
Agent such amount within such three-day period, Agent shall in addition to such
amount be entitled to recover from such Lender and from Borrower, on demand,
interest thereon at the Default Rate for Base Rate Loans, calculated from the
date such amount was made available to Borrower. The failure of any Lender to
make any new Loan to be made by it hereunder shall not relieve any other Lender
of its obligation hereunder, if any, to make its new Loan, but no Lender shall
be responsible for the failure of any other Lender to make any new Loan to be
made by such other Lender.
Section 1.3. CONTINUATIONS AND CONVERSIONS OF EXISTING LOANS. Borrower
may make the following elections with respect to Loans already outstanding under
this Agreement: to convert Base Rate Loans to Eurodollar Loans, to convert
Eurodollar Loans to Base Rate Loans on the last day of the Eurodollar Interest
Period applicable thereto, and to continue Eurodollar Loans beyond the
expiration of such Eurodollar Interest Period by designating a new Eurodollar
Interest Period to take effect at the time of such expiration. To make any such
election, Borrower must give to Agent written notice (or telephonic notice
promptly confirmed in writing) of any such Conversion or Continuation of
existing Loans, with a separate notice given for each new Borrowing. Each such
notice constitutes a "Continuation/Conversion Notice" hereunder and must:
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(a) specify the existing Loans made under this Agreement which are to
be continued or converted;
(b) specify the aggregate amount of any Borrowing of Base Rate Loans
into which such existing Loans are to be continued or converted and the date on
which such Continuation or Conversion is to occur, or the aggregate amount of
any Borrowing of Eurodollar Loans into which such existing Eurodollar Loans are
to be continued or converted, the date on which such Continuation or Conversion
is to occur (which shall be the first day of the Eurodollar Interest Period
which is to apply to such Eurodollar Loans), and the length of the applicable
Eurodollar Interest Period; and
(c) be received by Agent not later than 11:00 a.m., Dallas,
Texas time,
on the day on which any such Continuation or Conversion to Base Rate Loans is to
occur, or the second Business Day preceding the day on which any such
Continuation or Conversion to Eurodollar Loans is to occur.
Each such written request or confirmation must be made in the form and substance
of the "Continuation/Conversion Notice" attached hereto as Exhibit B, duly
completed. Each such telephonic request shall be deemed a representation,
warranty, acknowledgment and agreement by Borrower as to the matters which are
required to be set out in such written confirmation. Upon receipt of any such
Continuation/Conversion Notice, Agent shall give each Lender prompt notice of
the terms thereof. Each Continuation/Conversion Notice shall be irrevocable and
binding on Borrower. During the continuance of any Default, Borrower may not
make any election to convert existing Loans made under this Agreement into
Eurodollar Loans or continue existing Loans made under this Agreement as
Eurodollar Loans. If (due to the existence of a Default or for any other reason)
Borrower fails to timely and properly give any Continuation/Conversion Notice
with respect to a Borrowing of existing Eurodollar Loans at least two Business
Days prior to the end of the Eurodollar Interest Period applicable thereto, such
Eurodollar Loans shall automatically be converted into Base Rate Loans at the
end of such Eurodollar Interest Period. No new funds shall be repaid by Borrower
or advanced by any Lender in connection with any Continuation or Conversion of
existing Loans pursuant to this section, and no such Continuation or Conversion
shall be deemed to be a new advance of funds for any purpose; such Continuations
and Conversions merely constitute a change in the interest rate applicable to
already outstanding Loans.
Section 1.4. USE OF PROCEEDS. Borrower shall use all Loans made under
this Agreement to consummate the transactions contemplated by the Acquisition
Documents. In no event shall the funds from any Loan be used directly or
indirectly by any Person for personal, family, household or agricultural
purposes or for the purpose, whether immediate, incidental or ultimate, of
purchasing, acquiring or carrying any "margin stock" (as such term is defined in
Regulation U promulgated by the Board of Governors of the Federal Reserve
System) or to extend credit to others directly or indirectly for the purpose of
purchasing or carrying any such margin stock. Borrower represents and warrants
that Borrower is not engaged principally, or as one of Borrower's important
activities, in the business of extending credit to others for the purpose of
purchasing or carrying such margin stock.
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Section 1.5. INTEREST RATES AND FEES.
(a) LOANS. The following interest and fees shall be payable with
respect to Loans:
(i) INTEREST. Each Loan that is a Base Rate Loan shall bear
interest on each day outstanding at the Base Rate in effect on such
day. Each Loan that is a Eurodollar Loan shall bear interest on each
day during the related Eurodollar Interest Period at the related
Adjusted Eurodollar Rate in effect on such day.
(ii) DEFAULT INTEREST. Notwithstanding the foregoing, if an Event
of Default has occurred and is continuing, all Loans shall bear
interest on each day outstanding at the applicable Default Rate. Past
due payments of principal and interest shall bear interest at the rates
and in the manner set forth in the Notes.
(b) SUBJECT FEE LETTER. In addition to all other amounts due to Agent
and Lenders under the Loan Documents, Borrower will pay fees to Agent and
Lenders as described in a letter agreement (the "Subject Fee Letter") of even
date herewith between Borrower and Agent.
(c) COMMITMENT FEES. In consideration of each Lender's commitment to
make Loans under this Agreement, Borrower will pay to Agent for the account of
each Lender a commitment fee determined on a daily basis by applying the
Commitment Fee Rate to its Percentage Share of the amount by which the Maximum
Credit Amount exceeds the outstanding principal balance of the Loans on each day
during the period from the date hereof until the Maturity Date. This commitment
fee shall be due and payable in arrears on the fifteenth day after the end of
each Fiscal Quarter and on the Maturity Date.
(d) UTILIZATION FEES. During the period from the date hereof until the
Facility Maturity Date, Borrower will pay to Agent for the account of each
Lender a utilization fee for each day on which the Facility Usage exceeds thirty
three and one-third percent (33 1/3%) of the Maximum Credit Amount. The amount
of the utilization fee shall be determined on a daily basis by applying the
Utilization Fee Rate to each such Lender's Percentage Share of the Facility
Usage on each such day. This utilization fee shall be due and payable in arrears
on each Interest Payment Date for Base Rate Loans and at the end of the
Commitment Period.
Section 1.6. PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. Borrower may, upon giving notice to Agent by
11:00 a.m., Dallas,
Texas time on the Business Day of prepayment, from time to
time and without premium or penalty prepay the Notes, in whole or in part, so
long as all partial prepayments of principal concurrently paid on the Notes are
in increments of $100,000 and in an aggregate amount greater than or equal to
$200,000, and so long as Borrower pays all amounts owing in connection with the
prepayment of any Eurodollar Loan owing under Section 2.6. Agent shall give each
Lender notice
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thereof by 2:00 p.m. Dallas,
Texas time on the date such notice is received from
Borrower. Each prepayment of principal under this section shall be accompanied
by all interest then accrued and unpaid on the principal so prepaid. Any
principal or interest prepaid pursuant to this section shall be in addition to,
and not in lieu of, all payments otherwise required to be paid under the Loan
Documents at the time of such prepayment.
(b) PROCEDURES. Each prepayment of principal under this Section shall
be accompanied by all interest then accrued and unpaid on the principal so
prepaid. Any principal or interest prepaid pursuant to this section shall be in
addition to, and not in lieu of, all payments otherwise required to be paid
under the Loan Documents at the time of such prepayment.
ARTICLE II - PAYMENTS TO LENDERS
Section 2.1. GENERAL PROCEDURES. Borrower will make each payment which
it owes under the Loan Documents to Agent for the account of the Lender Party to
whom such payment is owed, in lawful money of the United States of America,
without set-off, deduction or counterclaim, and in immediately available funds.
Each such payment must be received by Agent not later than 11:00 a.m., Dallas,
Texas time, on the date such payment becomes due and payable. Any payment
received by Agent after such time will be deemed to have been made on the next
following Business Day. Should any such payment become due and payable on a day
other than a Business Day, the maturity of such payment shall be extended to the
next succeeding Business Day, and, in the case of a payment of principal or past
due interest, interest shall accrue and be payable thereon for the period of
such extension as provided in the Loan Document under which such payment is due.
Each payment under a Loan Document shall be due and payable at the place
provided therein and, if no specific place of payment is provided, shall be due
and payable at the place of payment of Agent's Note. When Agent collects or
receives money on account of the Obligations, Agent shall distribute all money
so collected or received by 2:00 p.m. Dallas,
Texas time on the Business Day
received, if received by 11:00 a.m. Dallas,
Texas time, otherwise on the day of
deemed receipt, and each Lender Party shall apply all such money so distributed,
as follows:
(a) first, for the payment of all Obligations which are then due (and
if such money is insufficient to pay all such Obligations, first to any
reimbursements due Agent under Section 5.9 or 9.4, then to any reimbursement due
any other Lender Party under Section 9.4, and then to the partial payment of all
other Obligations then due in proportion to the amounts thereof, or as Lender
Parties shall otherwise agree);
(b) then for the prepayment of amounts owing under the Loan Documents
(other than principal on the Notes) if so specified by Borrower;
(c) then for the prepayment of principal on the Notes, together with
accrued and unpaid interest on the principal so prepaid; and
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(d) last, for the payment or prepayment of any other Obligations.
All payments applied to principal or interest on any Note shall be applied first
to any interest then due and payable, then to principal then due and payable,
and last to any prepayment of principal and interest in compliance with Section
1.6. All distributions of amounts described in any of subsections (b), (c) or
(d) above shall be made by Agent pro rata to each Lender Party then owed
Obligations described in such subsection in proportion to all amounts owed to
all Lender Parties which are described in such subsection.
Section 2.2. INCREASED COST AND REDUCED RETURN.
(a) If, after the date hereof, the adoption of any applicable Law,
rule, or regulation, or any change in any applicable Law, rule, or regulation,
or any change in the interpretation or administration thereof by any
Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender Party (or
its Applicable Lending Office) with any request or directive (whether or not
having the force of Law) of any such Governmental Authority, central bank, or
comparable agency:
(i) shall subject such Lender Party (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Loans or its obligation to make Eurodollar Loans, or change
the basis of taxation of any amounts payable to such Lender Party (or
its Applicable Lending Office) under this Agreement or its Note in
respect of any Eurodollar Loans (other than taxes (including franchise
taxes) imposed on the overall net income of such Lender Party by the
jurisdiction in which such Lender Party has its principal office or
such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the Reserve
Requirement utilized in the determination of the Adjusted Eurodollar
Rate) relating to any extensions of credit or other assets of, or any
deposits with or other liabilities or commitments of, such Lender Party
(or its Applicable Lending Office), including the commitment of such
Lender Party hereunder; or
(iii) shall impose on such Lender Party (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Agreement or its Notes or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
Party (or its Applicable Lending Office) of making, converting into, continuing,
or maintaining any Eurodollar Loans or to reduce any sum received or receivable
by such Lender Party (or its Applicable Lending Office) under this Agreement or
its Notes with respect to any Eurodollar Loans, then Borrower shall pay to such
Lender Party on demand such amount or amounts as will compensate such Lender
Party for such increased cost or reduction. If any Lender Party requests
compensation by Borrower under this
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Section 2.2(a), Borrower may, by notice to such Lender Party (with a copy to
Agent), suspend the obligation of such Lender Party to make or continue Loans of
the Type with respect to which such compensation is requested, or to convert
Loans of any other Type into Loans of such Type, until the event or condition
giving rise to such request ceases to be in effect (in which case the provisions
of Section 2.5 shall be applicable); PROVIDED that such suspension shall not
affect the right of such Lender Party to receive the compensation so requested.
(b) If, after the date hereof, any Lender Party shall have determined
that the adoption of any applicable Law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any Governmental Authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of Law) of
any such Governmental Authority, central bank, or comparable agency, has the
effect of reducing the rate of return on the capital of such Lender Party or any
corporation controlling such Lender Party as a consequence of the obligations of
such Lender Party hereunder to a level below that which such Lender Party or
such corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand Borrower shall pay such Lender
Party such additional amount or amounts as will compensate such Lender Party for
such reduction, but only to the extent that such Lender Party has not been
compensated therefor by any increase in the Adjusted Eurodollar Rate; provided
that if such Lender Party fails to give notice to Borrower of any additional
costs within ninety (90) days after it has actual knowledge thereof, such Lender
Party shall not be entitled to compensation for such additional costs incurred
more than ninety (90) days prior to the date on which notice is given by such
Lender Party.
(c) Each Lender Party shall promptly notify Borrower and Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender Party to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender Party, be otherwise disadvantageous to it.
(d) Any Lender Party claiming compensation under this Section 2.2 or
Section 2.6 shall furnish to Borrower and Agent a statement setting forth the
additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such amount, such
Lender Party shall act in good faith and may use any reasonable averaging and
attribution methods.
Section 2.3. LIMITATION ON TYPES OF LOANS. If on or prior to the first
day of any Eurodollar Interest Period for any Eurodollar Loan:
(a) Agent determines (which determination shall be conclusive) that by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such Eurodollar
Interest Period; or
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(b) the Required Lenders determine (which determination shall be
conclusive) and notify Agent that the Adjusted Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding Eurodollar
Loans or for such Eurodollar Interest Period;
then Agent shall give Borrower prompt notice thereof specifying the relevant
amounts or periods, and so long as such condition remains in effect, the Lender
Parties shall be under no obligation to make additional Eurodollar Loans,
continue Eurodollar Loans or convert Base Rate Loans into Eurodollar Loans, and
Borrower shall, on the last day(s) of the then current Eurodollar Interest
Period(s) for the outstanding Eurodollar Loans, either prepay such Loans or
convert such Loans into Base Rate Loans in accordance with the terms of this
Agreement.
Section 2.4. ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender Party or its
Applicable Lending Office to make, maintain, or fund Eurodollar Loans hereunder,
then such Lender Party shall promptly notify Borrower thereof and such Lender
Party's obligation to make or continue Eurodollar Loans and to convert Base Rate
Loans into Eurodollar Loans shall be suspended until such time as such Lender
Party may again make, maintain, and fund Eurodollar Loans (in which case the
provisions of Section 3.5 shall be applicable).
Section 2.5. TREATMENT OF AFFECTED LOANS. If the obligation of any
Lender Party to make a particular Type of Loan or to continue, or to convert
Loans of any other Type into, Loans of a particular Type shall be suspended
pursuant to Sections 2.2, 2.3 or 2.4 hereof (Loans of such Type being herein
called "AFFECTED LOANS" and such Type being herein called the "AFFECTED TYPE"),
such Lender Party's Affected Loans shall be automatically converted into Base
Rate Loans on the last day(s) of the then current Interest Period(s) for
Affected Loans (or, in the case of a Conversion required by Section 3.4 hereof,
on such earlier date as such Lender Party may specify to Borrower with a copy to
Agent) and, unless and until such Lender Party gives notice as provided below
that the circumstances specified in Sections 2.2, 2.3 or 2.4 hereof that gave
rise to such Conversion no longer exist:
(a) to the extent that such Lender Party's Affected Loans have been so
converted, all payments and prepayments of principal that would otherwise be
applied to such Lender Party's Affected Loans shall be applied instead to its
Base Rate Loans; and
(b) all Loans that would otherwise be made or continued by such Lender
Party as Loans of the Affected Type shall be made or continued instead as Base
Rate Loans, and all Loans of such Lender Party that would otherwise be converted
into Loans of the Affected Type shall be converted instead into (or shall remain
as) Base Rate Loans.
If such Lender Party gives notice to Borrower (with a copy to Agent) that the
circumstances specified in Section 2.2, 2.3 or 2.4 hereof that gave rise to the
Conversion of such Lender Party's Affected Loans pursuant to this Section no
longer exist (which such Lender Party agrees to do promptly upon such
circumstances ceasing to exist) at a time when Loans of the Affected Type made
by other Lender Parties are outstanding, such Lender Party's Base Rate Loans
shall be automatically converted, on the
8
first day(s) of the next succeeding Interest Period(s) for such outstanding
Loans of the Affected Type, to the extent necessary so that, after giving effect
thereto, all Loans held by the Lender Parties holding Loans of the Affected Type
and by such Lender Party are held pro rata (as to principal amounts, Types, and
Interest Periods) in accordance with their Percentage Shares of the Maximum
Credit Amount.
Section 2.6. COMPENSATION. Upon the request of any Lender Party,
Borrower shall pay to such Lender Party such amount or amounts as shall be
sufficient (in the reasonable opinion of such Lender Party) to compensate it for
any loss, cost, or expense (including loss of anticipated profits) incurred by
it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar Loan for any
reason (including, without limitation, the acceleration of the Loans pursuant to
Section 7.1) on a date other than the last day of the Interest Period for such
Loan; or
(b) any failure by Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Article III to
be satisfied) to borrow, convert, continue, or prepay a Eurodollar Loan on the
date for such borrowing, Conversion, Continuation, or prepayment specified in
the relevant notice of borrowing, prepayment, Continuation, or Conversion under
this Agreement.
Section 2.7. CHANGE OF APPLICABLE LENDING OFFICE. Each Lender Party
agrees that, upon the occurrence of any event giving rise to the operation of
Sections 2.2 through 2.5 with respect to such Lender Party, it will, if
requested by Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender Party) to designate another Applicable Lending
Office, provided that such designation is made on such terms that such Lender
Party and its Applicable Lending Office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of any such section. Nothing in this section shall affect
or postpone any of the obligations of Borrower or the rights of any Lender Party
provided in Sections 3.2 through 3.5.
Section 2.8. REPLACEMENT OF LENDERS. If any Lender Party seeks
reimbursement for increased costs under Sections 2.2 through 2.5, or if Borrower
is required to increase any such payment under Section 2.9, then within ninety
days thereafter -- provided no Event of Default then exists -- Borrower shall
have the right (unless such Lender Party withdraws its request for additional
compensation) to replace such Lender Party by requiring such Lender Party to
assign its Loans and Notes, and its commitments hereunder to an Eligible
Transferee reasonably acceptable to Borrower, provided that: (a) all Obligations
of Borrower owing to such Lender Party being replaced (including such increased
costs, but excluding principal and accrued interest on the Notes being assigned)
shall be paid in full to such Lender Party concurrently with such assignment,
and (b) the replacement Eligible Transferee shall purchase the foregoing by
paying to such Lender Party a price equal to the principal amount thereof plus
accrued and unpaid interest thereon. In connection with any such assignment
Borrower, Agent, such Lender Party and the replacement Eligible Transferee shall
otherwise comply with Section 9.5. Notwithstanding the foregoing rights of
Borrower under this section, however,
9
Borrower may not replace any Lender Party which seeks reimbursement for
increased costs under Section 2.2 through 2.5 unless Borrower is at the same
time replacing all Lender Parties which are then seeking such compensation. In
connection with any such replacement of a Lender Party, Borrower shall pay all
costs that would have been due to such Lender Party pursuant to Section 2.6 if
such Lender Party's Loans had been prepaid at the time of such replacement.
Section 2.9. TAXES. (a) Any and all payments by Borrower to or for the
account of any Lender Party or Agent hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, EXCLUDING, in the case of each Lender
Party, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the Laws of which such Lender Party (or its Applicable
Lending Office) is organized or is a resident for tax purposes or any political
subdivision thereof (ALL SUCH NON-EXCLUDED taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter in this
section 2.9 referred to as "TAXES"). If Borrower shall be required by Law to
deduct any Taxes from or in respect of any sum payable under this Agreement or
any other Loan Document to any Lender Party, (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this section) such Lender
Party receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions, and (iii)
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable Law.
(b) In addition, Borrower agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under this Agreement or any
other Loan Document or from the execution or delivery of, or otherwise with
respect to, this Agreement or any other Loan Document (hereinafter in this
Section 2.9 referred to as "OTHER TAXES").
(c) Borrower agrees to indemnify each Lender Party or Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this section) paid by such Lender Party or Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender Party organized under the Laws of a jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this Agreement in the case of each Lender Party listed on the signature pages
hereof and on or prior to the date on which it becomes a Lender Party in the
case of each other Lender Party, and from time to time thereafter if requested
in writing by Borrower or Agent (but only so long as such Lender Party remains
lawfully able to do so), shall provide Borrower and Agent with a properly
executed (i) Internal Revenue Service Form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender Party is entitled to benefits under an income tax treaty to which the
United States is a party
10
which reduces the rate of withholding tax on payments of interest or certifying
that the income receivable pursuant to this Agreement is effectively connected
with the conduct of a trade or business in the United States, (ii) Internal
Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and (iii) any other form or
certificate required by any taxing authority (including any certificate required
by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that
such Lender Party is entitled to an exemption from or a reduced rate of tax on
payments pursuant to this Agreement or any of the other Loan Documents.
(e) For any period with respect to which a Lender Party has failed to
provide Borrower and Agent with the appropriate form pursuant to Section 2.9(d)
(unless such failure is due to a change in treaty, Law, or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender Party shall not be entitled to indemnification under Sections
2.9(a), 2.9(b) or 2.9(c) with respect to Taxes imposed by the United States;
PROVIDED, HOWEVER, that should a Lender Party, which is otherwise exempt from or
subject to a reduced rate of withholding tax, become subject to Taxes because of
its failure to deliver a form required hereunder, Borrower shall take such steps
as such Lender Party shall reasonably request to assist such Lender Party to
recover such Taxes. Further, Borrower shall not be required to indemnify such
Lender Party for any withholding taxes which Borrower is required to withhold
and remit in respect of any principal, interest or other amount paid or payable
by Borrower to or for account of any Lender Party hereunder or under any other
Loan Document.
(f) If Borrower is required to pay additional amounts to or for the
account of any Lender Party pursuant to this Section, then such Lender Party
will agree to use reasonable efforts to change the jurisdiction of its
Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of such
Lender Party, is not otherwise disadvantageous to such Lender Party and in the
event Lender Party is reimbursed for an amount paid by Borrower pursuant to this
Section, it shall promptly return such amount to Borrower.
(g) Within thirty (30) days after the date of any payment of Taxes,
Borrower shall furnish to Agent the original or a certified copy of a receipt
evidencing such payment.
(h) Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained in this
section shall survive the termination of this Agreement and the payment in full
of the Notes.
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ARTICLE III - CONDITIONS PRECEDENT TO LENDING
Section 3.1. DOCUMENTS TO BE DELIVERED. No Lender has any obligation to
make its initial Loan, unless Agent shall have received all of the following, at
Agent's office in Dallas, Texas, duly executed and delivered and in form,
substance and date satisfactory to Agent:
(a) This Agreement and any other documents that Lenders are to execute
in connection herewith.
(b) Each Note.
(c) Certain certificates of Borrower including:
(i) An "Omnibus Certificate" of the Secretary or Assistant
Secretary and of the Chairman of the Board, President, Chief Financial
Officer or Vice President of Administrative Services of Borrower, which
shall contain the names and signatures of the officers of Borrower
authorized to execute Loan Documents and which shall certify to the
truth, correctness and completeness of the following exhibits attached
thereto: (1) a copy of resolutions duly adopted by the Board of
Directors of Borrower and in full force and effect at the time this
Agreement is entered into, authorizing the execution of this Agreement
and the other Loan Documents delivered or to be delivered in connection
herewith and the consummation of the transactions contemplated herein
and therein, (2) a copy of the charter documents of Borrower and all
amendments thereto, certified by the appropriate official of Borrower's
state of organization, and (3) a copy of any bylaws of Borrower; and
(ii) A "Compliance Certificate" of the Chairman of the Board or
President and of the Chief Financial Officer of Borrower, of even date
with such Loan, in which such officers certify to the satisfaction of
the conditions set out in subsections (g), (h), and (i) of Section 3.2.
(d) A certificate (or certificates) of the due formation, valid
existence and good standing of Borrower in the State of Utah, issued by the
appropriate official of such State.
(e) A favorable opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Division, Counsel for
Restricted Persons, substantially in the form set forth in Exhibit D.
(f) The Initial Financial Statements.
(g) A notice of request for borrowing in form and substance acceptable
to Agent.
(h) A copy of each Acquisition Document executed by each party thereto.
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Section 3.2. ADDITIONAL CONDITIONS PRECEDENT TO FIRST LOAN. No Lender
has any obligation to make its first Loan, unless on the date thereof:
(a) No event which would reasonably be expected to have a Material
Adverse Effect shall have occurred since December 31, 2000.
(b) Borrower shall have certified to Agent and Lenders that the Initial
Financial Statements fairly present Borrower's Consolidated financial position
at the respective dates thereof and the Consolidated results of Borrower's
operations and Borrower's Consolidated cash flows for the respective periods
thereof.
(c) Borrower shall have certified to Agent and Lenders that no
Restricted Person has any outstanding Liabilities of any kind (including
contingent obligations, tax assessments, and unusual forward or long-term
commitments) which are, in the aggregate, material to Borrower or material with
respect to Borrower's Consolidated financial condition and not shown in the
Initial Financial Statements or disclosed in the Disclosure Schedule.
(d) All legal matters relating to the Loan Documents and the
consummation of the transactions contemplated thereby shall be satisfactory to
▇▇▇▇▇▇▇▇ & Knight, L.L.P., counsel to Agent.
(e) The credit rating for Borrower's long-term debt given (i) by
▇▇▇▇▇'▇ must be Baa3 or above or (ii) by S&P must be BBB- or above.
Section 3.3. ADDITIONAL CONDITIONS PRECEDENT TO ALL LOANS. No Lender
has any obligation to make any Loan (including its first), unless on the date
thereof:
(a) All commitment, facility, agency, legal and other fees required to
be paid or reimbursed to any Lender pursuant to any Loan Documents or any
commitment agreement heretofore entered into shall have been paid (including
those pursuant to the Subject Fee Letter).
(b) All representations and warranties made by any Restricted Person in
any Loan Document shall be true on and as of the date of such Loan (except to
the extent that the facts upon which such representations are based have been
changed by the extension of credit hereunder) as if such representations and
warranties had been made as of the date of such Loan.
(c) No Default shall exist at the date of such Loan.
(d) Only with respect to the making of a new Loan, pursuant to Section
1.2, no event which would reasonably be expected to have a Material Adverse
Effect shall have occurred since the date of the audited annual Initial
Financial Statements.
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(e) Each Restricted Person shall have performed and complied with all
agreements and conditions required in the Loan Documents to be performed or
complied with by it on or prior to the date of such Loan (including those in the
Subject Fee Letter).
(f) The making of such Loan shall not be prohibited by any Law and
shall not subject any Lender to any penalty or other onerous condition under or
pursuant to any such Law.
(g) Agent shall have received all documents and instruments which Agent
has then requested, in addition to those described in Section 3.1 (including
opinions of legal counsel for Restricted Persons and Agent; corporate documents
and records; documents evidencing governmental authorizations, consents,
approvals, licenses and exemptions; and certificates of public officials and of
officers and representatives of Borrower and other Persons), as to (i) the
accuracy and validity of or compliance with all representations, warranties and
covenants made by any Restricted Person in this Agreement and the other Loan
Documents, (ii) the satisfaction of all conditions contained herein or therein,
and (iii) all other matters pertaining hereto and thereto. All such additional
documents and instruments shall be satisfactory to Agent in form, substance and
date.
(h) All of the transactions contemplated under the Acquisition
Documents shall have been consummated, in compliance with the terms and
conditions thereof pursuant to which Borrower shall own all assets to be
acquired pursuant thereto, and all representations and warranties made by any
party to the Acquisition Documents shall be true and correct.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
To confirm each Lender's understanding concerning Restricted Persons
and Restricted Persons' businesses, properties and obligations and to induce
each Lender to enter into this Agreement and to extend credit hereunder,
Borrower represents and warrants to each Lender that:
Section 4.1. NO DEFAULT. No event has occurred and is continuing which
constitutes a Default.
Section 4.2. ORGANIZATION AND GOOD STANDING. Each Restricted Person is
duly organized, validly existing and in good standing under the Laws of its
jurisdiction of organization, having all powers required to carry on its
business and enter into and carry out the transactions contemplated hereby. Each
Restricted Person is duly qualified, in good standing, and authorized to do
business in all other jurisdictions within the United States wherein the
character of the properties owned or held by it or the nature of the business
transacted by it makes such qualification necessary. Each Restricted Person has
taken all actions and procedures customarily taken in order to enter, for the
purpose of conducting business or owning property, each jurisdiction outside the
United States wherein the character of the properties owned or held by it or the
nature of the business transacted by it makes such actions and procedures
desirable.
14
Section 4.3. AUTHORIZATION. Borrower has duly taken all action
necessary to authorize the execution and delivery by it of the Loan Documents to
which it is a party and to authorize the consummation of the transactions
contemplated thereby and the performance of its obligations thereunder. Borrower
is duly authorized to borrow funds hereunder.
Section 4.4. NO CONFLICTS OR CONSENTS. The execution and delivery by
the various Restricted Persons of the Loan Documents to which each is a party,
the performance by each of its obligations under such Loan Documents and the
Acquisition Documents, and the consummation of the transactions contemplated by
the various Loan Documents and Acquisition Documents, do not and will not (a)
conflict with any provision of (i) any Law, (ii) the organizational documents of
any Restricted Person, or (iii) any agreement, judgment, license, order or
permit applicable to or binding upon any Restricted Person, or (b) result in the
acceleration of any Indebtedness owed by any Restricted Person, or (c) result in
or require the creation of any Lien upon any assets or properties of any
Restricted Person, except as expressly contemplated or permitted in the Loan
Documents. Except as expressly contemplated in the Loan Documents no consent,
approval, authorization or order of, and no notice to or filing with, any
Tribunal or third party is required in connection with the execution, delivery
or performance by any Restricted Person of any Loan Document or to consummate
any transactions contemplated by the Loan Documents.
Section 4.5. ENFORCEABLE OBLIGATIONS. This Agreement is, and the other
Loan Documents when duly executed and delivered will be, legal, valid and
binding obligations of each Restricted Person which is a party hereto or
thereto, enforceable in accordance with their terms except as such enforcement
may be limited by bankruptcy, insolvency or similar Laws of general application
relating to the enforcement of creditors' rights.
Section 4.6. INITIAL FINANCIAL STATEMENTS. Borrower has heretofore
delivered to each Lender true, correct and complete copies of the Initial
Financial Statements. The Initial Financial Statements fairly present Borrower's
and Target's Consolidated financial position at the respective dates thereof and
the Consolidated results of Borrower's operations and Borrower's Consolidated
cash flows for the respective periods thereof. Since the date of the annual
Initial Financial Statements no event which would cause a Material Adverse
Effect has occurred, except as reflected in the Disclosure Schedule. All Initial
Financial Statements were prepared in accordance with GAAP.
Section 4.7. OTHER OBLIGATIONS AND RESTRICTIONS. No Restricted Person
has any outstanding Liabilities of any kind (including contingent obligations,
tax assessments, and unusual forward or long-term commitments) which are, in the
aggregate, material to Borrower or material with respect to Borrower's
Consolidated financial condition and not shown in the Initial Financial
Statements or disclosed in the Disclosure Schedule. Except as shown in the
Initial Financial Statements or disclosed in the Disclosure Schedule, no
Restricted Person is subject to or restricted by any franchise, contract, deed,
charter restriction, or other instrument or restriction which could cause a
Material Adverse Effect.
15
Section 4.8. FULL DISCLOSURE. No certificate, statement or other
information delivered herewith or heretofore by any Restricted Person to any
Lender in connection with the negotiation of this Agreement or in connection
with any transaction contemplated hereby contains any untrue statement of a
material fact or omits to state any material fact known to any Restricted Person
(other than industry-wide risks normally associated with the types of businesses
conducted by Restricted Persons) necessary to make the statements contained
herein or therein not misleading as of the date made or deemed made. There is no
fact known to any Restricted Person (other than industry-wide risks normally
associated with the types of businesses conducted by Restricted Persons) that
has not been disclosed to each Lender in writing which would reasonably be
expected to have a Material Adverse Effect.
Section 4.9. LITIGATION. Except as disclosed in the Initial Financial
Statements or in the Disclosure Schedule: (a) there are no actions, suits or
legal, equitable, arbitrative or administrative proceedings pending, or to the
knowledge of any Restricted Person threatened, against any Restricted Person
before any Tribunal which would reasonably be expected to have a Material
Adverse Effect, and (b) there are no outstanding judgments, injunctions, writs,
rulings or orders by any such Tribunal against any Restricted Person which would
reasonably be expected to have a Material Adverse Effect.
Section 4.10. LABOR DISPUTES AND ACTS OF GOD. Except as disclosed in
the Disclosure Schedule, neither the business nor the properties of any
Restricted Person has been affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act
of God or of the public enemy or other casualty (whether or not covered by
insurance), which would reasonably be expected to have a Material Adverse
Effect.
Section 4.11. ERISA PLANS AND LIABILITIES. All currently existing ERISA
Plans are listed in the Disclosure Schedule. Except as disclosed in the Initial
Financial Statements or in the Disclosure Schedule, no Termination Event has
occurred with respect to any ERISA Plan and all ERISA Affiliates are in
compliance with ERISA in all material respects. No ERISA Affiliate is required
to contribute to, or has any other absolute or contingent liability in respect
of, any "multiemployer plan" as defined in Section 4001 of ERISA. Except as set
forth in the Disclosure Schedule: (a) no "accumulated funding deficiency" (as
defined in Section 412(a) of the Internal Revenue Code) exists with respect to
any ERISA Plan, whether or not waived by the Secretary of the Treasury or his
delegate, and (b) the current value of each ERISA Plan's benefits does not
exceed the current value of such ERISA Plan's assets available for the payment
of such benefits by more than $25,000,000.
Section 4.12. ENVIRONMENTAL AND OTHER LAWS. Except as disclosed in the
Disclosure Schedule: (a) Restricted Persons are conducting their businesses in
material compliance with all applicable Laws, including Environmental Laws, and
have and are in compliance with all licenses and permits required under any such
Laws; (b) none of the operations or properties of any Restricted Person is the
subject of federal, state or local investigation evaluating whether any material
remedial action is needed to respond to a release of any Hazardous Materials
into the environment or to the improper storage or disposal (including storage
or disposal at offsite locations) of any Hazardous
16
Materials; and (c) no Restricted Person (and to the best knowledge of Borrower,
no other Person) has filed any notice under any Law indicating that any
Restricted Person is responsible for the improper release into the environment,
or the improper storage or disposal, of any material amount of any Hazardous
Materials or that any Hazardous Materials have been improperly released, or are
improperly stored or disposed of, upon any property of any Restricted Person;
(d) no Restricted Person has transported or arranged for the transportation of
any Hazardous Material to any location which is (i) listed on the National
Priorities List under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, listed for possible inclusion on such
National Priorities List by the Environmental Protection Agency in its
Comprehensive Environmental Response, Compensation and Liability Information
System List, or listed on any similar state list or (ii) the subject of federal,
state or local enforcement actions or other investigations which may lead to
claims against any Restricted Person for clean-up costs, remedial work, damages
to natural resources or for personal injury claims (whether under Environmental
Laws or otherwise); and (e) no Restricted Person otherwise has any known
material contingent liability under any Environmental Laws or in connection with
the release into the environment, or the storage or disposal, of any Hazardous
Materials.
Section 4.13. BORROWER'S SUBSIDIARIES. Borrower does not presently have
any Subsidiary or own any stock in any other corporation or association except
those listed in the Disclosure Schedule and except in cases where Borrower owns
less than 5% of the outstanding capital stock of any such corporation. Neither
Borrower nor any Restricted Person is a member of any general or limited
partnership, limited liability company, joint venture formed under the laws of
the United States or any State thereof or association of any type whatsoever
except those listed in the Disclosure Schedule and associations, joint ventures
or other relationships (a) which are established pursuant to a standard form
operating agreement or similar agreement or which are partnerships for purposes
of federal income taxation only, (b) which are not corporations or partnerships
(or subject to the Uniform Partnership Act) under applicable state Law, AND (c)
whose businesses are limited to the exploration, development and operation of
oil, gas or mineral properties, pipelines or gathering systems and interests
owned directly by the parties in such associations, joint ventures or
relationships. Borrower owns, directly or indirectly, the equity interest in
each of its Subsidiaries which is indicated in the Disclosure Schedule.
Section 4.14. TITLE TO PROPERTIES; LICENSES. Each Restricted Person has
good and defensible title to all of its material properties and assets, free and
clear of all Liens other than Permitted Liens and of all impediments to the use
of such properties and assets in such Restricted Person's business. Each
Restricted Person possesses all licenses, permits, franchises, patents,
copyrights, trademarks and trade names, and other intellectual property (or
otherwise possesses the right to use such intellectual property without
violation of the rights of any other Person) which are necessary to carry out
its business as presently conducted and as presently proposed to be conducted
hereafter, and no Restricted Person is in violation in any material respect of
the terms under which it possesses such intellectual property or the right to
use such intellectual property.
Section 4.15. GOVERNMENT REGULATION. Neither Borrower nor any other
Restricted Person owing Obligations is subject to regulation under the Public
Utility Holding Company Act of 1935, the
17
Federal Power Act, the Investment Company Act of 1940 (as any of the preceding
acts have been amended) or any other Law which regulates the incurring by such
Person of Indebtedness, including Laws relating to common contract carriers or
the sale of electricity, gas, steam, water or other public utility services.
Section 4.16. INSIDER. No Restricted Person, nor any Person having
"control" (as that term is defined in 12 U.S.C. Section 375b(9) or in
regulations promulgated pursuant thereto) of any Restricted Person, is a
"director" or an "executive officer" or "principal shareholder" (as those terms
are defined in 12 U.S.C. Section 375b(8) or (9) or in regulations promulgated
pursuant thereto) of any Lender, of a bank holding company of which any Lender
is a Subsidiary or of any Subsidiary of a bank holding company of which any
Lender is a Subsidiary.
Section 4.17. SOLVENCY. Upon giving effect to the issuance of the
Notes, the execution of the Loan Documents by Borrower and the consummation of
the transactions contemplated hereby, Borrower will be solvent (as such term is
used in applicable bankruptcy, liquidation, receivership, insolvency or similar
Laws).
ARTICLE V - AFFIRMATIVE COVENANTS OF BORROWER
To conform with the terms and conditions under which each Lender is
willing to have credit outstanding to Borrower, and to induce each Lender to
enter into this Agreement and extend credit hereunder, Borrower warrants,
covenants and agrees that until the full and final payment of the Obligations
and the termination of this Agreement, unless Required Lenders have previously
agreed otherwise:
Section 5.1. PAYMENT AND PERFORMANCE. Borrower will pay all amounts due
under the Loan Documents in accordance with the terms thereof and will observe,
perform and comply with every covenant, term and condition expressed or implied
in the Loan Documents. Borrower will cause each other Restricted Person to
observe, perform and comply with every such term, covenant and condition in any
Loan Document.
Section 5.2. BOOKS, FINANCIAL STATEMENTS AND REPORTS. Each Restricted
Person will at all times maintain full and accurate books of account and
records. Borrower will maintain and will cause its Subsidiaries to maintain a
standard system of accounting, will maintain its Fiscal Year, and will furnish
the following statements and reports to each Lender Party at Borrower's expense:
(a) As soon as available, and in any event within one hundred twenty
(120) days after the end of each Fiscal Year, complete Consolidated financial
statements of Borrower together with all notes thereto, prepared in reasonable
detail in accordance with GAAP, together with an unqualified opinion, based on
an audit using generally accepted auditing standards, by one of the six largest
independent certified public accounting firms in the United States, stating that
such Consolidated
18
financial statements have been so prepared. These financial statements shall
contain a Consolidated balance sheet as of the end of such Fiscal Year and
Consolidated statements of earnings, of cash flows, and of changes in owners'
equity for such Fiscal Year, each setting forth in comparative form the
corresponding figures for the preceding Fiscal Year. In addition, within one
hundred twenty (120) days after the end of each Fiscal Year Borrower will
furnish to Agent and each Lender a certificate in the form of Exhibit C signed
by the President, Chief Financial Officer, Controller or Vice President of
Administrative Services of Borrower, stating that such financial statements
fairly present the financial condition of Borrower, stating that such Person has
reviewed the Loan Documents, containing all calculations required to be made to
show compliance or non-compliance with the provisions of Sections 6.11 and 6.12,
and further stating that there is no condition or event at the end of such
Fiscal Year or at the time of such certificate which constitutes a Default and
specifying the nature and period of existence of any such condition or event.
(b) As soon as available, and in any event within sixty (60) days after
the end of each Fiscal Quarter, Borrower's Consolidated and consolidating
balance sheet and income statement as of the end of such Fiscal Quarter and a
Consolidated statement of cash flows for the period from the beginning of the
then current Fiscal Year to the end of such Fiscal Quarter, all in reasonable
detail and prepared in accordance with GAAP, subject to changes resulting from
normal year-end adjustments. In addition Borrower will, together with each such
set of financial statements, furnish a certificate in the form of Exhibit C
signed by the President, Chief Financial Officer, Controller or Vice President
of Administrative Services of Borrower stating that such financial statements
are accurate and complete (subject to normal year-end adjustments), stating that
such Person has reviewed the Loan Documents, containing all calculations
required to be made by Borrower to show compliance or non-compliance with the
provisions of Sections 6.11 and 6.12 and further stating that there is no
condition or event at the end of such Fiscal Quarter or at the time of such
certificate which constitutes a Default and specifying the nature and period of
existence of any such condition or event.
(c) Promptly upon their becoming available, Borrower shall provided
copies of all registration statements, periodic reports and other statements and
schedules filed by any Restricted Person with any securities exchange, the
Securities and Exchange Commission or any similar Governmental Authority.
Section 5.3. OTHER INFORMATION AND INSPECTIONS. Borrower will furnish
to each Lender any information which Agent may from time to time reasonably
request concerning any covenant, provision or condition of the Loan Documents or
any matter in connection with Restricted Persons' businesses and operations.
Borrower will permit, and will cause the other Restricted Persons to permit,
representatives appointed by Agent (including independent accountants, auditors,
agents, attorneys, appraisers and any other Persons) to visit and inspect during
normal business hours any of the Restricted Persons properties, including its
books of account, other books and records, and any facilities or other business
assets, and to make extra copies therefrom and photocopies and photographs
thereof, and to write down and record any information such representatives
obtain, and Borrower will permit, and will cause the other Restricted Persons to
permit, Agent or its representatives
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to investigate and verify the accuracy of the information furnished to Agent or
any Lender in connection with the Loan Documents and to discuss all such matters
with its officers, employees and representatives.
Section 5.4. NOTICE OF MATERIAL EVENTS AND CHANGE OF ADDRESS. Borrower
will promptly notify each Lender in writing, stating that such notice is being
given pursuant to this Agreement, of:
(a) the occurrence of any event which would have a Material Adverse
Effect,
(b) the occurrence of any Default,
(c) the acceleration of the maturity of any Indebtedness owed by any
Restricted Person having a principal balance of more than $25,000,000, or of any
default by any Restricted Person under any indenture, mortgage, agreement,
contract or other instrument to which any of them is a party or by which any of
them or any of their properties is bound, if such default would have a Material
Adverse Effect,
(d) the occurrence of any Termination Event,
(e) any claim of $10,000,000 or more, any notice of potential liability
under any Environmental Laws which might exceed such amount, or any other
material adverse claim asserted against any Restricted Person or with respect to
any Restricted Person's properties, and
(f) the filing of any suit or proceeding against any Restricted Person
in which an adverse decision would have a Material Adverse Effect.
Upon the occurrence of any of the foregoing, Restricted Persons will take all
necessary or appropriate steps to remedy promptly any such Material Adverse
Effect, Default, acceleration, default or Termination Event, to protect against
any such adverse claim, to defend any such suit or proceeding, and to resolve
all controversies on account of any of the foregoing. Borrower will also notify
Agent and Agent's counsel in writing promptly in the event that any Restricted
Person changes its name or the location of its chief executive office.
Section 5.5. MAINTENANCE OF PROPERTIES. Each Restricted Person will
maintain, preserve, protect, and keep all property used or useful in the conduct
of its business in good condition and in compliance with all applicable Laws,
and will from time to time make all repairs, renewals and replacements needed to
enable the business and operations carried on in connection therewith to be
promptly and advantageously conducted at all times.
Section 5.6. MAINTENANCE OF EXISTENCE AND QUALIFICATIONS. Each
Restricted Person will maintain and preserve its existence and its rights and
franchises in full force and effect and will qualify to
20
do business in all states or jurisdictions where required by applicable Law,
except where the failure so to qualify will not have a Material Adverse Effect.
Section 5.7. PAYMENT OF TRADE LIABILITIES, TAXES, ETC. Each Restricted
Person will (a) timely file all required tax returns; (b) timely pay all taxes,
assessments, and other governmental charges or levies imposed upon it or upon
its income, profits or property; and (c) maintain appropriate accruals and
reserves for all of the foregoing in accordance with GAAP. Each Restricted
Person may, however, delay paying or discharging any of the foregoing so long as
it is in good faith contesting the validity thereof by appropriate proceedings
and has set aside on its books adequate reserves therefor.
Section 5.8. INSURANCE. In accordance with industry standards, each
Restricted Person will keep or cause to be kept insured or self-insured, at the
option of each Restricted Person, its surface equipment and other property of a
character usually insured by similar Persons engaged in the same or similar
businesses. The insurance coverages and amounts will be reasonably determined by
each Restricted Person, based on coverages carried by prudent owners of similar
equipment and property.
Section 5.9. PERFORMANCE ON BORROWER'S BEHALF. If any Restricted Person
fails to pay any taxes, insurance premiums, expenses, attorneys' fees or other
amounts it is required to pay under any Loan Document during any period in which
a Default exists, Agent may pay the same. Borrower shall immediately reimburse
Agent for any such payments and each amount paid by Agent shall constitute an
Obligation owed hereunder which is due and payable on the date such amount is
paid by Agent.
Section 5.10. INTEREST. Borrower hereby promises to each Lender Party
to pay interest at the Default Rate applicable to Base Rate Loans on all
Obligations (including Obligations to pay fees or to reimburse or indemnify any
Lender) which Borrower has in this Agreement promised to pay to such Lender
Party and which are not paid when due. Such interest shall accrue from the date
such Obligations become due until they are paid.
Section 5.11. COMPLIANCE WITH AGREEMENTS AND LAW. Each Restricted
Person will perform all material obligations it is required to perform under the
terms of each indenture, mortgage, deed of trust, security agreement, lease,
franchise, agreement, contract or other instrument or obligation to which it is
a party or by which it or any of its properties is bound. Each Restricted Person
will conduct its business and affairs in compliance with all Laws applicable
thereto.
Section 5.12. ENVIRONMENTAL MATTERS.
(a) Each Restricted Person will comply in all material respects with
all Environmental Laws now or hereafter applicable to such Restricted Person, as
well as all contractual obligations and agreements with respect to environmental
remediation or other environmental matters, and shall obtain, at or prior to the
time required by applicable Environmental Laws, all environmental, health and
safety permits, licenses and other authorizations necessary for its operations
and will maintain such authorizations in full force and effect.
21
(b) Borrower will promptly furnish to Agent all written notices of
violation, orders, claims, citations, complaints, penalty assessments, suits or
other proceedings received by Borrower, or of which it has notice, pending or
threatened against Borrower, by any Governmental Authority with respect to any
alleged violation of or non-compliance with any Environmental Laws or any
permits, licenses or authorizations in connection with its ownership or use of
its properties or the operation of its business, if the violation, order, claim,
citation, complaint, penalty assessment, suit or other proceeding could
reasonably be expected to result in liability to Borrower in excess of
$10,000,000.
(c) Borrower will promptly furnish to Agent all requests for
information, notices of claim, demand letters, and other notifications, received
by Borrower in connection with its ownership or use of its properties or the
conduct of its business, relating to potential responsibility with respect to
any investigation or clean-up of Hazardous Material at any location.
Section 5.13. EVIDENCE OF COMPLIANCE. Each Restricted Person will
furnish to each Lender at such Restricted Person's or Borrower's expense all
evidence which Agent from time to time reasonably requests in writing as to the
accuracy and validity of or compliance with all representations, warranties and
covenants made by any Restricted Person in the Loan Documents, the satisfaction
of all conditions contained therein, and all other matters pertaining thereto.
Section 5.14. BANK ACCOUNTS; OFFSET. To secure the repayment of the
Obligations Borrower hereby grants to each Lender a right of offset, each of
which shall be in addition to all other interests, liens, and rights of any
Lender at common Law, under the Loan Documents, or otherwise, and each of which
shall be upon and against (a) any and all moneys, securities or other property
(and the proceeds therefrom) of Borrower now or hereafter held or received by or
in transit to any Lender from or for the account of Borrower, whether for
safekeeping, custody, pledge, transmission, collection or otherwise, (b) any and
all deposits (general or special, time or demand, provisional or final) of
Borrower with any Lender, and (c) any other credits and claims of Borrower at
any time existing against any Lender, including claims under certificates of
deposit. At any time and from time to time after the occurrence of any Default,
each Lender is hereby authorized to offset against the Obligations then due and
payable (in either case without notice to Borrower), any and all items
hereinabove referred to. To the extent that Borrower has accounts designated as
royalty or joint interest owner accounts, the foregoing right of offset shall
not extend to funds in such accounts which belong to, or otherwise arise from
payments to Borrower for the account of, third party royalty or joint interest
owners.
ARTICLE VI - NEGATIVE COVENANTS OF BORROWER
To conform with the terms and conditions under which each Lender is
willing to have credit outstanding to Borrower, and to induce each Lender to
enter into this Agreement and make the Loans, Borrower warrants, covenants and
agrees that until the full and final payment of the Obligations and the
termination of this Agreement, unless Required Lenders have previously agreed
otherwise:
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Section 6.1. INDEBTEDNESS. No Restricted Person (other than Borrower)
will in any manner owe or be liable for Indebtedness except:
(a) the Obligations and the 1999 Obligations.
(b) capital lease obligations (excluding oil, gas or mineral leases)
entered into in the ordinary course of such Restricted Person's business in
arm's length transactions at competitive market rates under competitive terms
and conditions in all respects, provided that the obligations required to be
paid in any Fiscal Year under any such capital leases do not in the aggregate
exceed $2,000,000 for all Restricted Persons.
(c) unsecured Liabilities owed among Restricted Persons.
(d) guaranties by one Restricted Person of Liabilities owed by another
Restricted Person, if such Liabilities either (i) are not Indebtedness, or (ii)
are allowed under subsections (a), (b) or (c) of this Section 6.1.
(e) Indebtedness of the Restricted Persons for plugging and abandonment
bonds issued by third parties or for letters of credit issued in place thereof
which are required by regulatory authorities in the area of operations, and
Indebtedness of the Restricted Persons for other bonds or letters of credit
which are required by such regulatory authorities with respect to other normal
oil and gas operations.
(f) non-recourse Indebtedness as to which no Restricted Person (i)
provides any guaranty or credit support of any kind (including any undertaking,
guarantee, indemnity, agreement or instrument that would constitute
Indebtedness) or (ii) is directly or indirectly liable (as a guarantor or
otherwise); provided, that after giving effect to such Indebtedness outstanding
from time to time, Borrower is not in violation of Sections 6.11 and 6.12.
(g) Indebtedness that is subordinated to the Obligations and the 1999
Obligations on terms acceptable to Required Lenders.
(h) Indebtedness to Questar Corporation that is subordinated to the
Obligations on the terms described in the promissory note attached hereto as
Schedule 2.
(i) Acquired Debt which meets the following requirements: (A) the
documentation evidencing such Indebtedness shall contain no terms, conditions or
defaults (other than pricing) which are more favorable to the third party
creditor than those contained in this Agreement are to Lenders and (B) at the
time such Indebtedness is incurred, no Default or Event of Default shall have
occurred and be continuing hereunder.
(j) Indebtedness under Hedging Contracts permitted under Section 6.10.
23
(k) unsecured Indebtedness of the Restricted Persons not described in
subsections (a) through (j) above which meets the following requirements: (A)
the documentation evidencing such Indebtedness shall contain no terms,
conditions or defaults (other than pricing) which are more favorable to the
third party creditor than those contained in this Agreement are to Lenders and
(B) at the time such Indebtedness is incurred, no Default or Event of Default
shall have occurred and be continuing hereunder; provided that the Indebtedness
of the Restricted Persons (OTHER THAN BORROWER) permitted under this subsection
(k) shall not exceed $30,000,000 in the aggregate, excluding guaranties of
Indebtedness of other Restricted Persons.
Section 6.2. LIMITATION ON LIENS. Except for Permitted Liens, no
Restricted Person will create, assume or permit to exist any Lien upon any of
the properties or assets which it now owns or hereafter acquires. No Restricted
Person will allow the filing or continued existence of any financing statement
describing as collateral any assets or property of such Restricted Person, other
than financing statements which describe only collateral subject to a Lien
permitted under this section and which name as secured party or lessor only the
holder of such Lien.
Section 6.3. LIMITATION ON INVESTMENTS AND NEW BUSINESSES. No
Restricted Person will:
(a) engage directly or indirectly in any business or conduct any
operations, except (i) in connection with or incidental to its present
businesses and operations or complementary to such businesses or operations or
(ii) in connection with businesses or operations that are not material to
Borrower and its Subsidiaries on a consolidated basis;
(b) make any acquisitions of or capital contributions to any Person or
any other Investment, except (i) Investments in the ordinary course of business,
(ii) demand loans to Questar Corporation, and (iii) purchases of equity
interests in Persons involved in the oil and gas industry if the aggregate
amount of the purchase price for all such purchases (including the purchase in
question) made by the Restricted Persons after the date hereof does not exceed
$30,000,000.
Section 6.4. LIMITATION ON MERGERS. Borrower will not merge or
consolidate with or into any other Person unless Borrower is the surviving
business entity and no Default exists prior to such merger or consolidation or
will exist immediately thereafter.
Section 6.5. LIMITATION ON ISSUANCE OF SECURITIES BY SUBSIDIARIES OF
BORROWER. No Restricted Subsidiary of Borrower will issue any additional shares
of its capital stock, additional partnership interests or other equity
securities or any options, warrants or other rights to acquire such additional
shares, partnership interests or other securities except to another Restricted
Person of which such issuer is already directly or indirectly a Subsidiary of
Borrower.
Section 6.6. TRANSACTIONS WITH AFFILIATES. No Restricted Person will
engage in any material transaction with any of its Affiliates on terms which are
less favorable in any material respect to it than
24
those which would have been obtainable at the time in arm's-length dealing with
Persons other than such Affiliates.
Section 6.7. PROHIBITED CONTRACTS. Except as expressly provided for in
the Loan Documents, no Restricted Person will, directly or indirectly, enter
into, create, or otherwise allow to exist any contract or other consensual
restriction on the ability of any Restricted Person that is a Subsidiary of
Borrower: (a) to pay dividends or make other distributions to Borrower, (b) to
redeem equity interests held in it by Borrower, (c) to repay loans and other
indebtedness owing by it to Borrower, or (d) to transfer any of its assets to
Borrower.
Section 6.8. ERISA. No ERISA Affiliate will incur any obligation to
contribute to any "multiemployer plan" as defined in Section 4001 of
ERISA.
Section 6.9. LIMITATION ON SALES OF PROPERTY. No Restricted Person will
sell, transfer, lease, exchange, alienate or dispose of any of its material
assets or properties or any material interest therein, or discount, sell, pledge
or assign any notes payable to it, accounts receivable or future income, except:
(a) equipment which is worthless or obsolete or which is replaced by
equipment of equal suitability and value;
(b) inventory (including oil and gas sold as produced and seismic data)
which is sold in the ordinary course of business on ordinary trade terms;
(c) capital stock of any of Borrower's Subsidiaries which is
transferred to Borrower or a wholly owned Subsidiary of Borrower;
(d) interests in oil and gas properties, or portions thereof, to which
no proved reserves of oil, gas or other liquid or gaseous hydrocarbons are
properly attributed.
(e) notwithstanding the above, other property which is sold for fair
consideration in an aggregate amount not to exceed twenty percent (20%) of the
Consolidated net book value of Borrower's property, plant and equipment during
any Fiscal Year.
Section 6.10. HEDGING CONTRACTS. No Restricted Person will be a party
to or in any manner be liable on any Hedging Contract, unless such contracts are
entered into as a hedge of equity oil and gas production (whether production is
produced by any Restricted Person or purchased from third parties), floating
rate Indebtedness or foreign currency needs (and not as a speculative
investment), such contracts are entered into in the ordinary course of the
Restricted Persons' businesses, and
(i) if such contracts are entered into with the purpose and
effect of fixing prices on oil or gas expected to be produced by
Restricted Persons:
25
(A) such contracts for any single month (determined, in the
case of contracts that are not settled on a monthly basis, by a
monthly proration acceptable to Agent) do not, in the aggregate,
cover amounts greater than seventy- five percent (75%) of the
Restricted Persons' aggregate Projected Oil and Gas Production
anticipated to be sold in the ordinary course of the Restricted
Persons' businesses for such month; AND
(B) such contracts do not require any Restricted Person to
provide any Lien or letter of credit to secure the Restricted
Persons' obligations thereunder, other than Liens on cash or cash
equivalents and letters of credit; provided that the aggregate
amount of cash and cash equivalents subject to Liens securing such
contracts and the undrawn amount of all letters of credit securing
such contracts shall not exceed $30,000,000 at any time.
As used in this subsection (i), the term "PROJECTED OIL AND GAS
PRODUCTION" means the projected production of oil or gas (measured by
volume unit or BTU equivalent, not sales price) for the term of the
contracts or a particular month, as applicable, from properties and
interests owned by any Restricted Person which have attributable to
them proved oil or gas reserves.
(ii) if such contracts are entered into with the purpose and
effect of fixing interest rates on a principal amount of indebtedness
of such Restricted Person that is accruing interest at a variable rate,
the aggregate notional amount of such contracts never exceeds the
anticipated outstanding principal balance of the indebtedness to be
hedged by such contracts or an average of such principal balances
calculated using a generally accepted method of matching interest swap
contracts to declining principal balances, and the floating rate index
of each such contract generally matches the index used to determine the
floating rates of interest on the corresponding indebtedness to be
hedged by such contract.
Section 6.11. FUNDED DEBT TO TOTAL CAPITALIZATION. As of the end of
each Fiscal Quarter, the Debt to Capitalization Ratio will not exceed 0.6 to
1.0.
Section 6.12. NET WORTH. Borrower's Consolidated Net Worth will never
be less than the sum of (a) eighty-five percent (85%) of Borrower's Consolidated
Net Worth as of December 31, 2000 PLUS (b) an aggregate amount equal to fifty
percent (50%) of its Consolidated Net Income for each Fiscal Quarter (but, in
each case, only including such Fiscal Quarters for which Consolidated Net Income
is a positive number) from and after December 31, 2000 to and including the date
of determination thereof, computed on a cumulative basis for such period.
26
ARTICLE VII - EVENTS OF DEFAULT AND REMEDIES
Section 7.1. EVENTS OF DEFAULT. Each of the following events
constitutes an Event of Default under this Agreement:
(a) Borrower fails to pay any principal component of any Obligation
when due and payable or fails to pay any other Obligation within five (5)
Business Days after the date when due and payable, whether at a date for the
payment of a fixed installment or as a contingent or other payment becomes due
and payable or as a result of acceleration or otherwise;
(b) Any "default" or "event of default" occurs under any Loan Document
which defines either such term, and the same is not remedied within the
applicable period of grace (if any) provided in such Loan Document;
(c) Borrower fails to duly observe, perform or comply with Section 5.3
or Section 5.4 of this Agreement, with the exception of the failure to provide
notice in the event that any Restricted Person changes its name or location of
its chief executive office;
(d) Borrower fails (other than as referred to in subsections (a), (b)
or (c) above) to duly observe, perform or comply with any covenant, agreement,
condition or provision of any Loan Document, and such failure remains unremedied
for a period of thirty (30) days after notice of such failure is given by Agent
to Borrower;
(e) Any representation or warranty previously, presently or hereafter
made in writing by or on behalf of any Restricted Person in connection with any
Loan Document shall prove to have been false or incorrect in any material
respect on any date on or as of which made, or this Agreement or any Note is
asserted to be or at any time ceases to be valid, binding and enforceable in any
material respect as warranted in Section 4.5 for any reason other than its
release or subordination by Agent;
(f) Any Restricted Person fails to duly observe, perform or comply with
any agreement with any Person or any term or condition of any instrument, if
such failure could reasonably be expected to have a Material Adverse Effect upon
Borrower;
(g) Any Restricted Person (i) fails to duly pay any Indebtedness in
excess of $10,000,000 constituting principal or interest owed by it with respect
to borrowed money or money otherwise owed under any note, bond, or similar
instrument, or (ii) breaches or defaults in the performance of any agreement or
instrument by which any such Indebtedness is issued, evidenced, governed, or
secured, other than a breach or default described in clause (i) above, and any
such failure, breach or default continues beyond any applicable period of grace
provided therefor;
(h) Borrower or any other Restricted Person having assets with a book
value of at least $10,000,000:
27
(i) suffers the entry against it of a judgment, decree or order for
relief by a Tribunal of competent jurisdiction in an involuntary
proceeding commenced under any applicable bankruptcy, insolvency or
other similar Law of any jurisdiction now or hereafter in effect,
including the federal Bankruptcy Code, as from time to time amended, or
has any such proceeding commenced against it which remains undismissed
for a period of thirty days; or
(ii) commences a voluntary case under any applicable bankruptcy,
insolvency or similar Law now or hereafter in effect, including the
federal Bankruptcy Code, as from time to time amended; or applies for
or consents to the entry of an order for relief in an involuntary case
under any such Law; or makes a general assignment for the benefit of
creditors; or fails generally to pay (or admits in writing its
inability to pay) its debts as such debts become due; or takes
corporate or other action to authorize any of the foregoing; or
(iii) suffers the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of all or a substantial part of its property in a
proceeding brought against or initiated by it, and such appointment or
taking possession is neither made ineffective nor discharged within
thirty days after the making thereof, or such appointment or taking
possession is at any time consented to, requested by, or acquiesced to
by it; or
(iv) suffers the entry against it of a final judgment for the
payment of money in an amount that exceeds (x) the valid and
collectible insurance in respect thereof or (y) the amount of an
indemnity with respect thereto reasonably acceptable to the Required
Lenders by $10,000,000 or more, unless the same is discharged within
thirty days after the date of entry thereof or an appeal or appropriate
proceeding for review thereof is taken within such period and a stay of
execution pending such appeal is obtained; or
(v) suffers a writ or warrant of attachment or similar process to
be issued by any Tribunal against all or any part of its property
having a book value of at least $10,000,000, and such writ or warrant
of attachment or any similar process is not stayed or released within
thirty days after the entry or levy thereof or after any stay is
vacated or set aside;
(i) Either (i) any "accumulated funding deficiency" (as defined in
Section 412(a) of the Internal Revenue Code) in excess of $10,000,000 exists
with respect to any ERISA Plan, whether or not waived by the Secretary of the
Treasury or his delegate, or (ii) any Termination Event occurs with respect to
any ERISA Plan and the then current value of such ERISA Plan's benefit
liabilities exceeds the then current value of such ERISA Plan's assets available
for the payment of such benefit liabilities by more than $10,000,000 (or in the
case of a Termination Event involving the withdrawal of a substantial employer,
the withdrawing employer's proportionate share of such excess exceeds such
amount);
(j) Questar Corporation ceases to own 100% of the capital stock of
Borrower; and
28
(k) Any "Event of Default" occurs under the 1999 Agreements.
Upon the occurrence of an Event of Default described in subsection (h)(i),
(h)(ii) or (h)(iii) of this section with respect to Borrower, all of the
Obligations shall thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by Borrower and each Restricted Person who at any time
ratifies or approves this Agreement. During the continuance of any other Event
of Default, Agent at any time and from time to time may (and upon written
instructions from Required Lenders, Agent shall), without notice to Borrower or
any other Restricted Person, declare any or all of the Obligations immediately
due and payable, and all such Obligations shall thereupon be immediately due and
payable, without demand, presentment, notice of demand or of dishonor and
nonpayment, protest, notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or declaration of any
kind, all of which are hereby expressly waived by Borrower and each Restricted
Person who at any time ratifies or approves this Agreement.
Section 7.2. REMEDIES. If any Default shall occur and be continuing,
each Lender Party may protect and enforce its rights under the Loan Documents by
any appropriate proceedings, including proceedings for specific performance of
any covenant or agreement contained in any Loan Document, and each Lender Party
may enforce the payment of any Obligations due it or enforce any other legal or
equitable right which it may have. All rights, remedies and powers conferred
upon Lender Parties under the Loan Documents shall be deemed cumulative and not
exclusive of any other rights, remedies or powers available under the Loan
Documents or at Law or in equity.
ARTICLE VIII - AGENT
Section 8.1. APPOINTMENT, POWERS, AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Agent (which term as used in this sentence and in Section 8.5 and the
first sentence of Section 8.6 hereof shall include its Affiliates and its own
and its Affiliates' officers, directors, employees, and agents): (a) shall not
have any duties or responsibilities except those expressly set forth in this
Agreement and shall not be a trustee or fiduciary for any Lender; (b) shall not
be responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Loan
Document or any certificate or other document referred to or provided for in, or
received by any of them under, any Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Loan Document,
or any other document referred to or provided for therein or for any failure by
any Restricted Person or any other Person to perform any of its obligations
thereunder; (c) shall not be responsible for or have any duty to ascertain,
inquire into, or verify the performance or observance of any covenants or
agreements by any Restricted Person or the
29
satisfaction of any condition or, except at the written direction of any Lender,
to inspect the property (including the books and records) of any Restricted
Person or any of its Subsidiaries or Affiliates; (d) shall not be required to
initiate or conduct any litigation or collection proceedings under any Loan
Document; and (e) shall not be responsible for any action taken or omitted to be
taken by it under or in connection with any Loan Document, except for its own
gross negligence or willful misconduct. Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
Section 8.2. RELIANCE BY AGENT. Agent shall be entitled to rely upon
any certification, notice, instrument, writing, or other communication
(including, without limitation, any thereof by telephone or telecopy) believed
by it to be genuine and correct and to have been signed, sent or made by or on
behalf of the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any Restricted Person), independent accountants,
and other experts selected by Agent. Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and until Agent
receives and accepts an Assignment and Acceptance executed in accordance with
Section 9.6 hereof. As to any matters not expressly provided for by this
Agreement, Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding on all of the
Lenders; PROVIDED, HOWEVER, that Agent shall not be required to take any action
that exposes Agent to personal liability or that is contrary to any Loan
Document or applicable Law or unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking any such action.
Section 8.3. DEFAULTS. Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless Agent has
received written notice from a Lender or Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that Agent receives such a notice of the occurrence of a Default or Event
of Default, Agent shall give prompt notice thereof to the Lenders. Agent shall
(subject to Section 8.1 hereof) take such action with respect to such Default or
Event of Default as shall reasonably be directed by the Required Lenders.
Notwithstanding the foregoing, unless and until Agent shall have received such
directions, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Lenders.
Section 8.4. RIGHTS AS LENDER. With respect to its Percentage Share of
the Maximum Credit Amount and the Loans made by it, Agent (and any successor
acting as Agent) in its capacity as a Lender hereunder shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting as Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include Agent in its individual
capacity. Agent (and any successor acting as Agent) and its Affiliates may
(without having to account therefor to any Lender) accept deposits from, lend
money to, make Investments in, provide services to, and generally engage in
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any kind of lending, trust, or other business with any Restricted Person or any
of its Subsidiaries or Affiliates as if it were not acting as Agent, and Agent
(and any successor acting as Agent) and its Affiliates may accept fees and other
consideration from any Restricted Person or any of its Subsidiaries or
Affiliates for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.
SECTION 8.5. INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY AGENT (TO
THE EXTENT NOT REIMBURSED UNDER SECTION 9.4 HEREOF, BUT WITHOUT LIMITING THE
OBLIGATIONS OF BORROWER UNDER SUCH SECTION) RATABLY IN ACCORDANCE WITH THEIR
RESPECTIVE PERCENTAGE SHARES, FOR ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, REASONABLE COSTS AND EXPENSES
(INCLUDING ATTORNEYS' FEES), OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER
THAT MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST AGENT (INCLUDING BY ANY
LENDER) IN ANY WAY RELATING TO OR ARISING OUT OF ANY LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED THEREBY OR ANY ACTION TAKEN OR OMITTED BY AGENT UNDER
ANY LOAN DOCUMENT (INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF
AGENT); PROVIDED that no Lender shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful misconduct of the Person
to be indemnified. Without limitation of the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any costs or
expenses payable by Borrower under Section 9.4, to the extent that Agent is not
promptly reimbursed for such costs and expenses by Borrower. The agreements
contained in this section shall survive payment in full of the Loans and all
other amounts payable under this Agreement.
Section 8.6. NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
agrees that it has, independently and without reliance on Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and its Subsidiaries
and decision to enter into this Agreement and that it will, independently and
without reliance upon Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Loan Documents.
Except for notices, reports, and other documents and information expressly
required to be furnished to the Lenders by Agent hereunder, Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any
Restricted Person or any of its Subsidiaries or Affiliates that may come into
the possession of Agent or any of its Affiliates.
Section 8.7. SHARING OF SET-OFFS AND OTHER PAYMENTS. Each Lender Party
agrees that if it shall, whether through the exercise of rights under Loan
Documents or rights of banker's lien, set off, or counterclaim against Borrower
or otherwise, obtain payment of a portion of the aggregate Obligations owed to
it which, taking into account all distributions made by Agent under Section 2.1,
causes such Lender Party to have received more than it would have received had
such payment been received by Agent and distributed pursuant to Section 2.1,
then (a) it shall be deemed to have simultaneously purchased and shall be
obligated to purchase interests in the Obligations as necessary to cause all
Lender Parties to share all payments as provided for in Section 2.1, and (b)
such other adjustments
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shall be made from time to time as shall be equitable to ensure that Agent and
all Lender Parties share all payments of Obligations as provided in Section 2.1;
provided, however, that nothing herein contained shall in any way affect the
right of any Lender Party to obtain payment (whether by exercise of rights of
banker's lien, set-off or counterclaim or otherwise) of indebtedness other than
the Obligations. Borrower expressly consents to the foregoing arrangements and
agrees that any holder of any such interest or other participation in the
Obligations, whether or not acquired pursuant to the foregoing arrangements, may
to the fullest extent permitted by Law exercise any and all rights of banker's
lien, set-off, or counterclaim as fully as if such holder were a holder of the
Obligations in the amount of such interest or other participation. If all or any
part of any funds transferred pursuant to this section is thereafter recovered
from the seller under this section which received the same, the purchase
provided for in this section shall be deemed to have been rescinded to the
extent of such recovery, together with interest, if any, if interest is required
pursuant to the of a Tribunal order to be paid on account of the possession of
such funds prior to such recovery.
Section 8.8. INVESTMENTS. Whenever Agent in good faith determines that
it is uncertain about how to distribute to Lender Parties any funds which it has
received, or whenever Agent in good faith determines that there is any dispute
among Lender Parties about how such funds should be distributed, Agent may
choose to defer distribution of the funds which are the subject of such
uncertainty or dispute. If Agent in good faith believes that the uncertainty or
dispute will not be promptly resolved, or if Agent is otherwise required to
invest funds pending distribution to Lender Parties, Agent shall invest such
funds pending distribution; all interest on any such Investment shall be
distributed upon the distribution of such Investment and in the same proportion
and to the same Persons as such Investment. All moneys received by Agent for
distribution to Lender Parties (other than to the Person who is Agent in its
separate capacity as a Lender Party) shall be held by Agent pending such
distribution solely as Agent for such Lender Parties, and Agent shall have no
equitable title to any portion thereof.
Section 8.9. BENEFIT OF ARTICLE VIII. The provisions of this Article
are intended solely for the benefit of Lender Parties, and no Restricted Person
shall be entitled to rely on any such provision or assert any such provision in
a claim or defense against any Lender. Lender Parties may waive or amend such
provisions as they desire without any notice to or consent of Borrower or any
Restricted Person.
Section 8.10. RESIGNATION. Agent may resign at any time by giving
written notice thereof to Lenders and Borrower. Each such notice shall set forth
the date of such resignation. Upon any such resignation, Required Lenders shall
have the right to appoint a successor Agent. A successor must be appointed for
any retiring Agent, and such Agent's resignation shall become effective when
such successor accepts such appointment. If, within thirty days after the date
of the retiring Agent's resignation, no successor Agent has been appointed and
has accepted such appointment, then the retiring Agent may appoint a successor
Agent, which shall be a commercial bank organized or licensed to conduct a
banking or trust business under the Laws of the United States of America or of
any state thereof and if no Default or Event of Default has occurred and is
continuing, retiring Agent shall obtain the consent of Borrower. Upon the
acceptance of any appointment as Agent hereunder by a successor
32
Agent, the retiring Agent shall be discharged from its duties and obligations
under this Agreement and the other Loan Documents. After any retiring Agent's
resignation hereunder the provisions of this Article VIII shall continue to
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under the Loan Documents.
ARTICLE IX - MISCELLANEOUS
Section 9.1. WAIVERS AND AMENDMENTS; ACKNOWLEDGMENTS.
(a) WAIVERS AND AMENDMENTS. No failure or delay (whether by course of
conduct or otherwise) by any Lender Party in exercising any right, power or
remedy which such Lender Party may have under any of the Loan Documents shall
operate as a waiver thereof or of any other right, power or remedy, nor shall
any single or partial exercise by any Lender Party of any such right, power or
remedy preclude any other or further exercise thereof or of any other right,
power or remedy. No waiver of any provision of any Loan Document and no consent
to any departure therefrom shall ever be effective unless it is in writing and
signed as provided below in this section, and then such waiver or consent shall
be effective only in the specific instances and for the purposes for which given
and to the extent specified in such writing. No notice to or demand on any
Restricted Person shall in any case of itself entitle any Restricted Person to
any other or further notice or demand in similar or other circumstances. This
Agreement and the other Loan Documents set forth the entire understanding
between the parties hereto with respect to the transactions contemplated herein
and therein and supersede all prior discussions and understandings with respect
to the subject matter hereof and thereof, and no waiver, consent, release,
modification or amendment of or supplement to this Agreement or the other Loan
Documents shall be valid or effective against any party hereto unless the same
is in writing and signed by (i) if such party is Borrower, by Borrower, (ii) if
such party is Agent, by such party, and (iii) if such party is a Lender, by such
Lender or by Agent on behalf of Lenders with the written consent of Required
Lenders (which consent has already been given as to the termination of the Loan
Documents as provided in Section 9.10). Notwithstanding the foregoing or
anything to the contrary herein, Agent shall not, without the prior consent of
all Lenders, execute and deliver on behalf of such Lender any waiver or
amendment which would increase the Maximum Credit Amount hereunder.
Notwithstanding the foregoing or anything to the contrary herein, Agent shall
not, without the prior consent of each individual Lender, execute and deliver on
behalf of such Lender any waiver or amendment which would: (1) waive any of the
conditions specified in Article III, (2) increase the maximum amount which such
Lender is committed hereunder to lend, (3) reduce any fees payable to such
Lender hereunder, or the principal of, or interest on, such Lender's Note, (4)
postpone any date fixed for any payment of any such fees, principal or interest,
(5) amend the definition herein of "Required Lenders," or otherwise change the
aggregate amount of Percentage Shares which is required for Agent, Lenders or
any of them to take any particular action under the Loan Documents, (6) release
Borrower from its obligation to pay such Lender's Note, or (7) amend this
Section 9.1(a).
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(b) ACKNOWLEDGMENTS AND ADMISSIONS. Borrower hereby represents,
warrants, acknowledges and admits that (i) it has been advised by counsel in the
negotiation, execution and delivery of the Loan Documents to which it is a
party, (ii) it has made an independent decision to enter into this Agreement and
the other Loan Documents to which it is a party, without reliance on any
representation, warranty, covenant or undertaking by Agent or any Lender,
whether written, oral or implicit, other than as expressly set out in this
Agreement or in another Loan Document delivered on or after the date hereof,
(iii) there are no representations, warranties, covenants, undertakings or
agreements by any Lender as to the Loan Documents except as expressly set out in
this Agreement or in another Loan Document delivered on or after the date
hereof, (iv) no Lender has any fiduciary obligation toward Borrower with respect
to any Loan Document or the transactions contemplated thereby, (v) the
relationship pursuant to the Loan Documents between Borrower and the other
Restricted Persons, on one hand, and each Lender, on the other hand, is and
shall be solely that of debtor and creditor, respectively, (vi) no partnership
or joint venture exists with respect to the Loan Documents between any
Restricted Person and any Lender, (vii) Agent is not Borrower's Agent, but Agent
for Lenders, (viii) without limiting any of the foregoing, Borrower is not
relying upon any representation or covenant by any Lender, or any representative
thereof, and no such representation or covenant has been made, that any Lender
will, at the time of an Event of Default or Default, or at any other time,
waive, negotiate, discuss, or take or refrain from taking any action permitted
under the Loan Documents with respect to any such Event of Default or Default or
any other provision of the Loan Documents, (ix) should an Event of Default or
Default occur or exist, each Lender will determine in its sole discretion and
for its own reasons what remedies and actions it will or will not exercise or
take at that time, and (x) all Lender Parties have relied upon the truthfulness
of the acknowledgments in this section in deciding to execute and deliver this
Agreement and to become obligated hereunder.
(c) JOINT ACKNOWLEDGMENT. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 9.2. SURVIVAL OF AGREEMENTS; CUMULATIVE NATURE. All of
Restricted Persons' various representations, warranties, covenants and
agreements in the Loan Documents shall survive the execution and delivery of
this Agreement and the other Loan Documents and the performance hereof and
thereof, including the making or granting of the Loans and the delivery of the
Notes and the other Loan Documents, and shall further survive until all of the
Obligations are paid in full to each Lender Party and all of Lender Parties'
obligations to Borrower are terminated. All statements and agreements contained
in any certificate or other instrument delivered by any Restricted Person to any
Lender Party under any Loan Document shall be deemed representations and
warranties by Borrower or agreements and covenants of Borrower under this
Agreement. The representations, warranties, indemnities, and covenants made by
Restricted Persons in the Loan Documents, and the rights, powers, and privileges
34
granted to Lender Parties in the Loan Documents, are cumulative, and, except for
expressly specified waivers and consents, no Loan Document shall be construed in
the context of another to diminish, nullify, or otherwise reduce the benefit to
any Lender Party of any such representation, warranty, indemnity, covenant,
right, power or privilege. In particular and without limitation, no exception
set out in this Agreement to any representation, warranty, indemnity, or
covenant herein contained shall apply to any similar representation, warranty,
indemnity, or covenant contained in any other Loan Document, and each such
similar representation, warranty, indemnity, or covenant shall be subject only
to those exceptions which are expressly made applicable to it by the terms of
the various Loan Documents.
Section 9.3. NOTICES. All notices, requests, consents, demands and
other communications required or permitted under any Loan Document shall be in
writing, unless otherwise specifically provided in such Loan Document (provided
that Agent may give telephonic notices to the other Lender Parties), and shall
be deemed sufficiently given or furnished if delivered by personal delivery, by
facsimile or other electronic transmission, by delivery service with proof of
delivery, or by registered or certified United States mail, postage prepaid, to
Borrower and Restricted Persons at the address of Borrower specified on the
signature pages hereto and to each Lender Party at its address specified on the
signature pages hereto (unless changed by similar notice in writing given by the
particular Person whose address is to be changed). Any such notice or
communication shall be deemed to have been given (a) in the case of personal
delivery or delivery service, as of the date of first attempted delivery during
normal business hours at the address provided herein, (b) in the case of
facsimile or other electronic transmission, upon receipt, or (c) in the case of
registered or certified United States mail, three days after deposit in the
mail; provided, however, that no Continuation/Conversion Notice shall become
effective until actually received by Agent.
Section 9.4. PAYMENT OF EXPENSES; INDEMNITY.
(a) PAYMENT OF EXPENSES. Whether or not the transactions contemplated
by this Agreement are consummated, Borrower will promptly (and in any event,
within 30 days after any invoice or other statement or notice) pay: (i) all
reasonable costs and expenses incurred by or on behalf of Agent (including,
without limitation, external attorneys' fees, consultants' fees, travel costs
and miscellaneous expenses) in connection with the negotiation, preparation,
execution and delivery of the Loan Documents, and any and all consents, waivers
or other documents or instruments relating thereto, and (ii) all reasonable
costs and expenses incurred by or on behalf of any Lender Party (including,
without limitation, external attorneys' fees, consultants' fees, accounting
fees, travel costs and miscellaneous expenses) in connection with the defense or
enforcement of any of the Loan Documents (including this section) or the defense
of any Lender Party's exercise of its rights thereunder.
(b) INDEMNITY. BORROWER AGREES TO INDEMNIFY EACH LENDER PARTY , UPON
DEMAND, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, CLAIMS, LOSSES,
DAMAGES, PENALTIES, FINES, ACTIONS, JUDGMENTS, SUITS, SETTLEMENTS, REASONABLE
COSTS AND EXPENSES OR DISBURSEMENTS (INCLUDING REASONABLE FEES OF ATTORNEYS,
ACCOUNTANTS, EXPERTS AND ADVISORS) OF ANY KIND OR NATURE WHATSOEVER (IN THIS
SECTION COLLECTIVELY CALLED "LIABILITIES AND COSTS") WHICH TO ANY
35
EXTENT (IN WHOLE OR IN PART) MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST
SUCH LENDER PARTY GROWING OUT OF, RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED
WITH THE LOAN DOCUMENTS AND THE TRANSACTIONS AND EVENTS (INCLUDING THE
ENFORCEMENT OR DEFENSE THEREOF) AT ANY TIME ASSOCIATED THEREWITH OR CONTEMPLATED
THEREIN (WHETHER ARISING IN CONTRACT OR IN TORT OR OTHERWISE AND INCLUDING ANY
VIOLATION OR NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAWS BY ANY LENDER PARTY OR
ANY OTHER PERSON OR ANY LIABILITIES OR DUTIES OF ANY LENDER PARTY OR ANY OTHER
PERSON WITH RESPECT TO HAZARDOUS MATERIALS FOUND IN OR RELEASED INTO THE
ENVIRONMENT).
THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN PART BY ANY NEGLIGENT
ACT OR OMISSION OF ANY KIND BY ANY LENDER PARTY,
provided only that no Lender Party shall be entitled under this section to
receive indemnification for that portion, if any, of any liabilities and costs
which is proximately caused by its own individual gross negligence or willful
misconduct, as determined in a final judgment. If any Person (including Borrower
or any of its Affiliates) ever alleges such gross negligence or willful
misconduct by any Lender Party, the indemnification provided for in this section
shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent jurisdiction enters a
final judgment as to the extent and effect of the alleged gross negligence or
willful misconduct. As used in this section the term "Lender Party" shall refer
not only to each Person designated as such in Section 1.1 but also to each
director, officer, agent, attorney, employee, representative and Affiliate of
such Person.
Section 9.5. JOINT AND SEVERAL LIABILITY; PARTIES IN INTEREST. All
Obligations which are incurred by two or more Restricted Persons shall be their
joint and several obligations and liabilities. All grants, covenants and
agreements contained in the Loan Documents shall bind and inure to the benefit
of the parties thereto and their respective successors and assigns; provided,
however, that no Restricted Person may assign or transfer any of its rights or
delegate any of its duties or obligations under any Loan Document without the
prior consent of all of the Lenders. Neither Borrower nor any Affiliates of
Borrower shall directly or indirectly purchase or otherwise retire any
Obligations owed to any Lender nor will any Lender accept any offer to do so,
unless each Lender shall have received substantially the same offer with respect
to the same Percentage Share of the Obligations owed to it. If Borrower or any
Affiliate of Borrower at any time purchases some but less than all of the
Obligations owed to all Lender Parties, such purchaser shall not be entitled to
any rights of any Lender under the Loan Documents unless and until Borrower or
its Affiliates have purchased all of the Obligations.
Section 9.6. ASSIGNMENTS AND PARTICIPATIONS.
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(a) Each Lender may assign to one or more Eligible Transferees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Loans, its Note, and its Percentage Share of
the Maximum Credit Amount); PROVIDED, HOWEVER, that
(i) each such assignment shall be to an Eligible Transferee;
(ii) except in the case of such an assignment to another Lender or
an assignment of all of a Lender's rights and obligations under this
Agreement, any partial assignment of such Lender's rights and
obligations under this Agreement shall be in a collective amount at
least equal to $20,000,000 or an integral multiple of $5,000,000 in
excess thereof;
(iii) each such assignment by a Lender shall be of a constant, and
not varying, percentage of all of its rights and obligations under the
Loan Documents;
(iv) the parties to such assignment shall execute and deliver to
Agent for its acceptance an Assignment and Acceptance in the form of
Exhibit E hereto, together with any Note subject to such assignment and
a processing fee of $3,500; and
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this section, the assignor, Agent and
Borrower shall make appropriate arrangements so that, if required, new Notes are
issued to the assignor and the assignee. If the assignee is not incorporated
under the Laws of the United States of America or a state thereof, it shall
deliver to Borrower and Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 2.9.
(b) Agent shall maintain at its address referred to in Section 9.3 a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and their
Percentage Share of the Maximum Credit Amount of, and principal amount of the
Loans owing to, each Lender from time to time (the "REGISTER"). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and Borrower, Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit F hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the parties thereto.
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(d) Each Lender may sell participations to one or more Persons that are
Eligible Transferees in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Maximum Credit Amount and its
Loans); PROVIDED, HOWEVER, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participant shall be entitled to the benefit of the yield protection
provisions contained in Article II and the right of offset contained in Section
5.14, and (iv) Borrower shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of Borrower relating to its Loans and its Note and to approve any
amendment, modification, or waiver of any provision of this Agreement (other
than amendments, modifications, or waivers decreasing the amount of principal of
or the rate at which interest is payable on such Loans or Note, extending any
scheduled principal payment date or date fixed for the payment of interest on
such Loans or Note, or extending the Maximum Credit Amount).
(e) Notwithstanding anything to the contrary contained herein, Lender
(a "Granting Bank") may grant to a special purpose funding vehicle (an "SPC"),
identified as such in writing from time to time by the Granting Bank to the
Agent and the Borrower, the option to provide to the Borrower all or any part of
any Loan that such Granting Bank would otherwise be obligated to make to the
Borrower pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to make any Loan, and (ii) if an SPC elects
not to exercise such option or otherwise fails to provide all or any part of
such Loan, the Granting Bank shall be obligated to make such Loan pursuant to
the terms hereof. The making of a Loan by an SPC hereunder shall utilize the
Percentage Share of the Maximum Credit Amount of the Granting Bank to the same
extent, and as if, such Loan were made by such Granting Bank. Each party hereto
hereby agrees that no SPC shall be liable for any indemnity or payment under
this Agreement for which a Lender would otherwise be liable for so long as, and
to the extent, the Granting Bank provides such indemnity or makes such payment.
In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPC, it will not institute
against, or join any other person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any State thereof. In addition,
notwithstanding anything to the contrary contained in this Section 9.6(e), any
SPC may (i) with notice to, but without the prior written consent of, the
Borrower and the Agent and without paying any processing fee therefor, assign
all or a portion of its interests in any Loans to the Granting Bank or to any
financial institutions providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC. This Section 10.6(e)
may not be amended without the written consent of the Granting Bank.
Notwithstanding the above (i) any Granting Bank's obligations under this
Agreement as a Lender hereunder shall remain unchanged, (ii) such Granting Bank
shall remain solely responsible to the other parties hereto for the performance
of such obligations, and (iii) Borrower shall continue to deal solely and
directly with such Granting Bank in
38
connection with such Granting Bank's rights and obligations under this
Agreement, and such Granting Bank shall retain the sole right to enforce the
obligations of Borrower relating to the Loans and its Note and to approve any
amendment, modification, or waiver of any provision of this Agreement.
(f) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its Loans and
its Note to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve Bank. No
such assignment shall release the assigning Lender from its obligations
hereunder.
(g) Any Lender may furnish any information concerning Borrower or any
of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 9.7 hereof.
Section 9.7. CONFIDENTIALITY. Agent and each Lender (each, a "LENDING
PARTY") agrees to keep confidential any information furnished or made available
to it by Borrower pursuant to this Agreement that is marked confidential;
PROVIDED that nothing herein shall prevent any Lending Party from disclosing
such information (a) to any other Lending Party or any Affiliate of any Lending
Party, or any officer, director, employee, Agent, or advisor of any Lending
Party or Affiliate of any Lending Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided herein, (c) as
required by any Law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a disclosure by
any Lending Party prohibited by this Agreement, (g) in connection with any
litigation to which such Lending Party or any of its Affiliates may be a party,
(h) to the extent necessary in connection with the exercise of any remedy under
this Agreement or any other Loan Document, and (i) subject to provisions
substantially similar to those contained in this section, to any actual or
proposed participant or assignee.
Section 9.8. GOVERNING LAW; SUBMISSION TO PROCESS. EXCEPT TO THE EXTENT
THAT THE LAW OF ANOTHER JURISDICTION IS EXPRESSLY ELECTED IN A LOAN DOCUMENT,
THE LOAN DOCUMENTS SHALL BE DEEMED CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS
OF THE STATE OF TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF
AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. BORROWER HEREBY
IRREVOCABLY SUBMITS ITSELF AND EACH OTHER RESTRICTED PERSON TO THE NON-EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE STATE OF TEXAS AND
AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT OR ANY
RESTRICTED PERSON IN ANY LEGAL PROCEEDING RELATING TO THE LOAN DOCUMENTS OR THE
OBLIGATIONS BY ANY MEANS ALLOWED UNDER TEXAS OR FEDERAL LAW. CHAPTER 346 OF THE
TEXAS FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND
REVOLVING TRI- PARTY ACCOUNTS) DOES NOT APPLY TO THIS AGREEMENT OR THE NOTES.
39
Section 9.9. LIMITATION ON INTEREST. Lender Parties, Restricted Persons
and any other parties to the Loan Documents intend to contract in strict
compliance with applicable usury Law from time to time in effect. In furtherance
thereof such Persons stipulate and agree that none of the terms and provisions
contained in the Loan Documents shall ever be construed to create a contract to
pay, for the use, forbearance or detention of money, interest in excess of the
maximum amount of interest permitted to be charged by applicable Law from time
to time in effect. Neither any Restricted Person nor any present or future
guarantors, endorsers, or other Persons hereafter becoming liable for payment of
any Obligation shall ever be liable for unearned interest thereon or shall ever
be required to pay interest thereon in excess of the maximum amount that may be
lawfully contracted for, charged, or received under applicable Law from time to
time in effect, and the provisions of this section shall control over all other
provisions of the Loan Documents which may be in conflict or apparent conflict
herewith. Lender Parties expressly disavow any intention to contract for,
charge, or collect excessive unearned interest or finance charges in the event
the maturity of any Obligation is accelerated. If (a) the maturity of any
Obligation is accelerated for any reason, (b) any Obligation is prepaid and as a
result any amounts held to constitute interest are determined to be in excess of
the legal maximum, or (c) any Lender or any other holder of any or all of the
Obligations shall otherwise collect moneys which are determined to constitute
interest which would otherwise increase the interest on any or all of the
Obligations to an amount in excess of that permitted to be charged by applicable
Law then in effect, then all sums determined to constitute interest in excess of
such legal limit shall, without penalty, be promptly applied to reduce the then
outstanding principal of the related Obligations or, at such Lender's or
holder's option, promptly returned to Borrower or the other payor thereof upon
such determination. In determining whether or not the interest paid or payable,
under any specific circumstance, exceeds the maximum amount permitted under
applicable Law, Lender Parties and Restricted Persons (and any other payors
thereof) shall to the greatest extent permitted under applicable Law, (i)
characterize any non-principal payment as an expense, fee or premium rather than
as interest, (ii) exclude voluntary prepayments and the effects thereof, and
(iii) amortize, prorate, allocate, and spread the total amount of interest
throughout the entire contemplated term of the instruments evidencing the
Obligations in accordance with the amounts outstanding from time to time
thereunder and the maximum legal rate of interest from time to time in effect
under applicable Law in order to lawfully contract for, charge, or receive the
maximum amount of interest permitted under applicable Law. In the event
applicable Law provides for an interest ceiling under Chapter 303 of the Texas
Finance Code as amended, for that day, the ceiling shall be the "weekly ceiling"
as defined in the Texas Finance Code, provided that if any applicable Law
permits greater interest, the Law permitting the greatest interest shall apply.
As used in this section the term "applicable Law" means the Laws of the State of
Texas or the Laws of the United States of America, whichever Laws allow the
greater interest, as such Laws now exist or may be changed or amended or come
into effect in the future.
Section 9.10. TERMINATION; LIMITED SURVIVAL. In its sole and absolute
discretion Borrower may at any time that no Obligations are owing elect in a
written notice delivered to Agent to terminate this Agreement. Upon receipt by
Agent of such a notice, if no Obligations are then owing this Agreement and all
other Loan Documents shall thereupon be terminated and the parties thereto
released from all prospective obligations thereunder. Notwithstanding the
foregoing or anything herein
40
to the contrary, any waivers or admissions made by any Restricted Person in any
Loan Document, any Obligations under Sections 2.2 through 2.6, and any
obligations which any Person may have to indemnify or compensate any Lender
Party shall survive any termination of this Agreement or any other Loan
Document. At the request and expense of Borrower, Agent shall prepare and
execute all necessary instruments to reflect and effect such termination of the
Loan Documents. Agent is hereby authorized to execute all such instruments on
behalf of all Lenders, without the joinder of or further action by any Lender.
Section 9.11. SEVERABILITY. If any term or provision of any Loan
Document shall be determined to be illegal or unenforceable all other terms and
provisions of the Loan Documents shall nevertheless remain effective and shall
be enforced to the fullest extent permitted by applicable Law.
Section 9.12. COUNTERPARTS; FAX. This Agreement may be separately
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to
constitute one and the same Agreement. This Agreement and the Loan Documents may
be validly executed and delivered by facsimile or other electronic transmission.
Section 9.13. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. BORROWER AND
EACH LENDER PARTY HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY
(a) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR
INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN
DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH,
BEFORE OR AFTER MATURITY; (b) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY
"SPECIAL DAMAGES", AS DEFINED BELOW, (c) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (d) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION. AS USED IN THIS SECTION,
"SPECIAL DAMAGES" INCLUDES ALL SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE
DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS
WHICH ANY PARTY HERETO HAS EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER
PARTY HERETO.
Section 9.14. DEFINED TERMS. Capitalized terms and phrases used and not
otherwise defined herein shall for all purposes of this Agreement have the
meaning given to such terms and phrases in Annex I hereto.
Section 9.15. ANNEX I, EXHIBITS AND SCHEDULES; ADDITIONAL DEFINITIONS.
Annex I and all Exhibits and Schedules attached to this Agreement are a part
hereof for all purposes.
41
Section 9.16. AMENDMENT OF DEFINED INSTRUMENTS. Unless the context
otherwise requires or unless otherwise provided herein the terms defined in this
Agreement which refer to a particular agreement, instrument or document also
refer to and include all renewals, extensions, modifications, amendments and
restatements of such agreement, instrument or document, provided that nothing
contained in this section shall be construed to authorize any such renewal,
extension, modification, amendment or restatement.
Section 9.17. REFERENCES AND TITLES. All references in this Agreement
to Exhibits, Schedules, articles, sections, subsections and other subdivisions
refer to the Exhibits, Schedules, articles, sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any subdivisions are for convenience only and do
not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this
Agreement", "this instrument", "herein", "hereof", "hereby", "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. The phrases "this section"
and "this subsection" and similar phrases refer only to the sections or
subsections hereof in which such phrases occur. The word "or" is not exclusive,
and the word "including" (in its various forms) means "including without
limitation". Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.
Section 9.18. CALCULATIONS AND DETERMINATIONS. All calculations under
the Loan Documents of interest chargeable with respect to Eurodollar Loans and
of fees shall be made on the basis of actual days elapsed (including the first
day but excluding the last) and a year of 360 days. All other calculations of
interest made under the Loan Documents shall be made on the basis of actual days
elapsed (including the first day but excluding the last) and a year of 365 or
366 days, as appropriate. Each determination by a Lender Party of amounts to be
paid hereunder any other matters which are to be determined hereunder by a
Lender Party (such as any Eurodollar Rate, Adjusted Eurodollar Rate, Business
Day, Interest Period, or Reserve Requirement) shall, in the absence of manifest
error, be conclusive and binding. Unless otherwise expressly provided herein or
unless Required Lenders otherwise consent all financial statements and reports
furnished to any Lender Party hereunder shall be prepared and all financial
computations and determinations pursuant hereto shall be made in accordance with
GAAP.
Section 9.19. CONSTRUCTION OF INDEMNITIES AND RELEASES. All
indemnification and release provisions of this Agreement shall be construed
broadly (and not narrowly) in favor of the Persons receiving indemnification
from or being released.
42
IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
QUESTAR MARKET RESOURCES, INC.
Borrower
By:
------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
Mailing Address:
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇. ▇▇▇▇▇▇
Street Address:
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA, N.A.,
Administrative Agent and Lender
By:
-----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
Percentage Share: 100%
Address for Notice, Domestic Lending Office, and
Eurodollar Lending Office:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇. ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX I
DEFINED TERMS
"COMMITMENT FEE RATE" means, on any date, the number of Basis Points per
annum set forth below based on the Applicable Rating Level on such date:
APPLICABLE APPLICABLE COMMITMENT
RATING LEVEL FEE RATE
------------ ---------------------
Level I 8.5
------------ ---------------------
Level II 10.0
------------ ---------------------
Level III 12.5
------------ ---------------------
Level IV 15.0
------------ ---------------------
Level V 17.0
------------ ---------------------
Level VI 22.5
------------ ---------------------
Level VII 27.5
============ =====================
"1999 AGREEMENTS" means, collectively, (a) that certain
Credit Agreement
dated as of April 19, 1999 among Borrower, as Borrower, and Bank of America,
N.A., as Administrative Agent, and certain other financial institutions, as
Lenders, and (b) that certain Canadian
Credit Agreement dated April 19, 1999
among Celsius Energy Resources, Ltd., as Canadian Borrower, and Bank of America
Canada, as Administrative Agent, and certain other financial institutions, as
Lenders, in each case as amended, supplemented, or restated.
"1999 OBLIGATIONS" means all Liabilities of Restricted Persons under or
relating to the 1999 Agreements.
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any assets acquired by such specified Person, and any refinancing of
the foregoing indebtedness on similar terms, taking into account current market
conditions.
1
"ACQUISITION DOCUMENTS" means (i) that certain Stock Purchase Agreement
dated as of July 26, 2001 among Borrower and the existing shareholders of
Shenendoah Energy Inc. and (ii) unexecuted copies of all other agreements,
conveyances, or documents which will, at closing, be executed, delivered, or
accepted by any Restricted Person pursuant thereto, by means of which Borrower
will acquire all of the oil and gas properties of Target through the purchase of
all of the issued and outstanding capital stock of Target.
"ADJUSTED EURODOLLAR RATE" means, for any Eurodollar Loan for any
Eurodollar Interest Period therefor, the per annum rate equal to the sum of (a)
the Applicable Margin plus (b) the rate per annum (rounded upwards, if
necessary, to the nearest 1/1000 of 1%) determined by Agent to be equal to the
quotient obtained by dividing (i) the Eurodollar Rate for such Eurodollar Loan
for such Eurodollar Interest Period by (ii) 1 minus the Reserve Requirement for
such Eurodollar Loan for such Interest Period. The Adjusted Eurodollar Rate for
any Eurodollar Loan shall change whenever the Applicable Margin or the Reserve
Requirement changes. No Adjusted Eurodollar Rate charged by any Person shall
ever exceed the Highest Lawful Rate.
"AFFILIATE" means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person. A Person shall be
deemed to be "controlled by" any other Person if such other Person possesses,
directly or indirectly, power
(a) to vote 20% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing general
partners; or
(b) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"AGENT" means Bank of America, N.A., as administrative agent under the
Agreement, and its successors and assigns in such capacity.
"APPLICABLE LENDING OFFICE" means, for each Lender and for each Type of
Loan, the "Lending Office" of such Lender (or of an Affiliate of such Lender)
designated for such Type of Loan on the signature pages hereof or such other
office of such Lender (or an Affiliate of such Lender) as such Lender may from
time to time specify to Agent and Borrower by written notice in accordance with
the terms hereof as the office by which its Loans of such Type are to be made
and maintained.
"APPLICABLE MARGIN" means on any date, the number of Basis Points per
annum set forth below based on the Applicable Rating Level on such date:
2
APPLICABLE APPLICABLE
RATING LEVEL MARGIN
------------ ----------
Level I 30.0
------------ ----------
Level II 35.0
------------ ----------
Level III 45.0
------------ ----------
Level IV 60.0
------------ ----------
Level V 75.0
------------ ----------
Level VI 100.0
------------ ----------
Level VII 125.0
============ ==========
Changes in the Applicable Margin will occur automatically without prior notice
as changes in the Applicable Rating Level occur. Agent will give notice promptly
to Borrower and the Lenders of changes in the Applicable Margin.
"APPLICABLE RATING LEVEL" means for any day, the highest Rating Level (as
such term is defined below in this paragraph) issued by S&P or ▇▇▇▇▇'▇
(collectively, in this definition called the "Designated Rating Agencies"),
provided that if the Rating Level issued by one Designated Rating Agency is more
than one level higher than the Rating Level issued by the other Designated
Rating Agency, the "Applicable Rating Level" will be one level above the lowest
Rating Level. As used in this definition, (i) the term "Rating Level" means for
any day with respect to any of the Designated Rating Agencies, the rating level
described below (or its then equivalent) applicable on such day, issued by such
Designated Rating Agency, from time to time, with respect to Borrower's
Long-Term Debt or if such rating is unavailable, equivalents thereof, including
counterparty ratings, implied ratings and corporate ratings; (ii) "Borrower's
Long-Term Debt" means senior, unsecured, non-credit enhanced long-term
indebtedness for borrowed money of Borrower, and (iii) "GREATER THAN OR EQUAL
TO" means a rating equal to or more favorable than and "LESS THAN OR EQUAL TO"
means a rating equal to or less favorable than.
3
RATING LEVEL S&P MOODY'S
------------ -------------------------- -------------------------
Level I GREATER THAN OR EQUAL TO A LESS THAN OR EQUAL TO A2
------------ -------------------------- -------------------------
Level II A- A3
------------ -------------------------- -------------------------
Level III BBB+ Baa1
------------ -------------------------- -------------------------
Level IV BBB Baa2
------------ -------------------------- -------------------------
Level V BBB- Baa3
------------ -------------------------- -------------------------
Level VI BB+ Ba1
------------ -------------------------- -------------------------
Level VII LESS THAN OR EQUAL TO BB LESS THAN OR EQUAL TO Ba2
============ ========================== =========================
If either of the Designated Rating Agencies shall not have in effect a rating
for Borrower's Long- Term Debt or if the rating system of any of the Designated
Rating Agencies shall change, or if either of the Designated Rating Agencies
shall cease to be in the business of rating corporate debt obligations, Borrower
and Required Lenders shall negotiate in good faith to amend this definition to
reflect such changed rating system or the unavailability of ratings from such
Designated Rating Agency, but until such an agreement shall be reached, the
Applicable Rating Level shall be based only upon the rating by the remaining
Designated Rating Agency.
"BASE RATE" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America, N.A. as its "prime rate." Such rate is a rate set by Bank of America,
N.A. based upon various factors including Bank of America, N.A.'s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such rate announced by Bank of America, N.A.
shall take effect at the opening of business on the day specified in the public
announcement of such change. No Base Rate charged by any Person shall ever
exceed the Highest Lawful Rate.
"BASE RATE LOAN" means a Loan which bears interest at the Base Rate.
"BASIS POINT" means one one-hundredth of one percent (0.01%).
"BORROWER" means Questar Market Resources, Inc., a Utah corporation.
"BORROWING" means a borrowing of new Loans of a single Type pursuant to
Section 1.2 of the Agreement or a Continuation or Conversion of existing Loans
into a single Type (and, in the case of Eurodollar Loans, with the same Interest
Period) pursuant to Section 1.3 of the Agreement.
4
"BUSINESS DAY" means a day, other than a Saturday or Sunday, on which
commercial banks are open for business with the public in Dallas, Texas. Any
Business Day in any way relating to Eurodollar Loans (such as the day on which
an Interest Period begins or ends) must also be a day on which, in the judgment
of Agent, significant transactions in dollars are carried out in the interbank
eurocurrency market.
"CHANGE OF CONTROL" means the occurrence of any of the following events:
(i) any Person (or syndicate or group (a "Group") of Persons which is deemed a
"person" for the purposes of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended) acquires more than fifty percent (50%) of the outstanding
stock of Borrower having ordinary voting power (disregarding changes in voting
power based on the occurrence of contingencies) for the election of directors;
(ii) during any period of twelve successive months a majority of the Persons who
were directors of Borrower at the beginning of such period cease to be directors
of Borrower; or (iii) such Person or Group succeeds in having sufficient of its
nominees elected to the board of directors of Borrower, such that such nominees,
when added to any existing director or remaining director remaining on the board
of directors after such election who is an Affiliate of such Person or Group,
will constitute a majority of such board of directors.
"CLOSING DATE" means July 31, 2001.
"COMMITMENT PERIOD" means the period from the Closing Date until but not
including the Maturity Date.
"CONSOLIDATED" refers to the consolidation of any Person, in accordance
with GAAP, with its properly consolidated subsidiaries. References herein to a
Person's Consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the consolidated financial statements,
financial position, financial condition, liabilities, etc. of such Person and
its properly consolidated subsidiaries.
"CONSOLIDATED ASSETS" means the total assets of Borrower and its
Restricted Subsidiaries which would be shown as assets on a Consolidated balance
sheet of Borrower and its Restricted Subsidiaries prepared in accordance with
GAAP, after eliminating all amounts properly attributable to minority interest,
if any, in the stock and surplus of the Restricted Subsidiaries.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense, whether paid or accrued, including without limitation all commissions,
discounts and other fees and charges owed with respect to letters of credit.
5
"CONSOLIDATED NET INCOME" means, for any period, Borrower's and its
properly Consolidated subsidiaries' gross revenues for such period, including
any cash dividends or distributions actually received from any other Person
during such period, minus Borrower's and such subsidiaries' expenses and other
proper charges against income (including taxes on income, to the extent
imposed), determined on a Consolidated basis after eliminating earnings or
losses attributable to outstanding minority interests and excluding the net
earnings of any Person other than such a subsidiary in which Borrower or any of
such subsidiaries has an ownership interest.
"CONSOLIDATED NET WORTH" means as to Borrower and its properly
Consolidated subsidiaries at any time, the remainder of all Consolidated assets
of Borrower and such subsidiaries which would be shown on their Consolidated
balance sheet prepared as of such time in accordance with GAAP, minus the sum of
(a) all amounts which would be shown on such balance sheet as minority interests
in any such subsidiaries, plus (b) all Consolidated Liabilities of Borrower and
such subsidiaries which would be shown on such balance sheet, adjusted by
treating as Liabilities rather than equity all capital stock and other equity
securities which Borrower or any such subsidiary would be required to purchase,
redeem or otherwise acquire at the election of any holder thereof, upon the
passage of time, or upon the occurrence of any contingency (other than the
voluntary election of Borrower or any such subsidiary to make such purchase,
redemption or acquisition) and excluding unrealized noncash gains or losses
resulting from "▇▇▇▇-to-market" adjustments pursuant to FAS 133.
"CONTINUATION" shall refer to the continuation pursuant to Section 1.3
thereof of a Eurodollar Loan as a Eurodollar Loan from one Interest Period to
the next Interest Period.
"CONTINUATION/CONVERSION NOTICE" means with respect to the Agreement, a
written or telephonic request, or a written confirmation, made by Borrower which
meets the requirements of Section 1.3 of the Agreement.
"CONVERSION" shall refer to a conversion pursuant to Section 1.3 of one
Type of Loan into another Type of Loan.
"DEBT TO CAPITALIZATION RATIO" means, at the time of determination, the
ratio of (a) Funded Debt to (b) the sum of the Funded Debt PLUS Shareholders'
Equity.
"DEFAULT" means any Event of Default and any default, event or condition
which would, with the giving of any requisite notices and the passage of any
requisite periods of time, constitute an Event of Default.
"DEFAULT RATE" means at the time in question (i) with respect to any Base
Rate Loan, the rate one percent (1.0%) above the Base Rate then in effect and
(ii) with respect to any Eurodollar Loan, the rate one percent (1%) above the
Adjusted Eurodollar Rate then in effect for such Loan. No Default Rate charged
by any Person shall ever exceed the Highest Lawful Rate.
6
"DISCLOSURE SCHEDULE" means Schedule 1 hereto.
"DISTRIBUTION" means (a) any dividend or other distribution made by a
Restricted Person on or in respect of any stock, partnership interest, or other
equity interest in such Restricted Person (including any option or warrant to
buy such an equity interest), or (b) any payment made by a Restricted Person to
purchase, redeem, acquire or retire any stock, partnership interest, or other
equity interest in such Restricted Person (including any such option or
warrant).
"DOMESTIC LENDING OFFICE" means, with respect to any Lender, the office
of such Lender specified as its "Domestic Lending Office" below its name on its
signature page to the Agreement, or such other office as such Lender may from
time to time specify to any Borrower and Agent; and, with respect to Agent, the
office, branch, or agency through which it administers this Agreement.
"ELIGIBLE TRANSFEREE" means a Person which either (a) is a Lender or an
Affiliate of a Lender, or (b) is consented to as an Eligible Transferee by
Agent, and, so long as no Default or Event of Default is continuing, by the
Borrower, in each case which consent will not be unreasonably withheld; provided
that the no consent shall be required for a Person to be an "Eligible
Transferee" for purposes of Section 9.6(d) of the Agreement.
"ENVIRONMENTAL LAWS" means any and all Laws relating to the environment
or to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment including 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, chemicals, or industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.
"ERISA AFFILIATE" means Borrower and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control that, together with Borrower, are treated as a single employer
under Section 414 of the Internal Revenue Code.
"ERISA PLAN" means any employee pension benefit plan subject to Title IV
of ERISA maintained by any ERISA Affiliate with respect to which any Restricted
Person has a fixed or contingent liability.
"EURODOLLAR INTEREST PERIOD" means, with respect to each particular
Eurodollar Loan in a Borrowing, the period specified in the borrowing notice
delivered by Borrower pursuant to Section 1.2 or any Continuation/Conversion
Notice applicable thereto, beginning on and including the date specified in such
notice (which must be a Business Day), and ending one, two, three, or six months
thereafter, as the applicable Borrower may elect in such notice; provided that:
(a) any Interest Period which would
7
otherwise end on a day which is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in anothercalendar month,
in which case such Interest Period shall end on the next preceding Business Day;
(b) any Interest Period which begins on the last Business Day in a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day in a calendar month; and (c) notwithstanding the foregoing, any
Interest Period which would otherwise end after the Maturity Date shall end on
the Maturity Date or, if the last day of such period is not a Business Day, on
the next preceding Business Day.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender, the office
of such Lender specified as its "Eurodollar Lending Office" below its name on
the signature page hereto (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such Lender may from
time to time specify to Borrower and Agent.
"EURODOLLAR LOAN" means a Loan which bears interest at the Adjusted
Eurodollar Rate.
"EURODOLLAR RATE" means, for any Eurodollar Loan within a Borrowing and
with respect to the related Interest Period therefor:
(a) the rate per annum equal to the rate determined by Agent to
be the offered rate that appears on the page of the Telerate screen (or
any successor thereto) that displays an average British Bankers
Association Interest Settlement Rate for deposits in US Dollars (for
delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest
Period, or
(b) if the rate referenced in the preceding subsection (a) does
not appear on such page or service or such page or service shall cease to
be available, the rate per annum equal to the rate determined by Agent to
be the offered rate on such other page or other service that displays an
average British Bankers Association Interest Settlement Rate for deposits
in US Dollars (for delivery on the first day of such Interest Period)
with a term equivalent to such Interest Period, determined as of
approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period, or
(c) if the rates referenced in the preceding subsections (a)
and (b) are not available, the rate per annum determined by Agent as the
rate of interest (rounded upward to the next 1/100th of 1%) at which
deposits in US Dollars for delivery on the first day of such Interest
Period in same day funds in the approximate amount of the Eurodollar Loan
being made, Continued or Converted and with a term equivalent to such
Interest Period would be offered by Bank of America, N.A.'s London Branch
to major banks in the offshore US Dollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period.
8
"EVENT OF DEFAULT" has the meaning given to such term in Section 7.1.
"FAS 133" means the Financial Accounting Standard's Board Statement No.
133, as amended by Statement ▇▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 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 Dallas, Texas on the Business Day next succeeding such
day; PROVIDED that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to Bank of America,
N.A. on such day on such transactions as determined by Agent.
"FISCAL QUARTER" means a three-month period ending on March 31, June 30,
September 30 or December 31 of any year.
"FISCAL YEAR" means a twelve-month period ending on December 31 of any
year.
"FUNDED DEBT" means the aggregate of the following Indebtedness of
Borrower and its Subsidiaries, after elimination of intercompany items and other
Consolidation in accordance with GAAP: (a) Indebtedness (including the
Obligations) for borrowed money, regardless of maturity, (b) Indebtedness
constituting an obligation to pay the deferred purchase price of property, (c)
Indebtedness evidenced by a bond, debenture, note or similar instrument, and (d)
Indebtedness which is due and payable at the time in question, with respect to
letters of credit or reimbursement agreements therefor.
"GAAP" means those generally accepted accounting principles and practices
which are recognized as such from time to time by the Financial Accounting
Standards Board (or any generally recognized successor) and which, in the case
of Borrower and its Consolidated Subsidiaries, are applied for all periods after
the Closing Date in a manner consistent with the manner in which such principles
and practices were applied to the Initial Financial Statements.
"GOVERNMENTAL AUTHORITY" means any domestic or foreign, national,
federal, provincial, state, municipal or other local government or body and any
division, agency, ministry, commission, board or authority or any
quasi-governmental or private body exercising any statutory, regulatory,
expropriation or taxing authority under the authority of any of the foregoing,
and any domestic, foreign or international judicial, quasi-judicial, arbitration
or administrative court, tribunal, commission, board or panel acting under the
authority of any of the foregoing.
9
"HAZARDOUS MATERIALS" means any substances regulated under any
Environmental Law, whether as pollutants, contaminants, or chemicals, or as
industrial, toxic or hazardous substances or wastes, or otherwise.
"HEDGING CONTRACT" means (a) any agreement providing for options, swaps,
floors, caps, collars, forward sales or forward purchases involving interest
rates, commodities or commodity prices, equities, currencies, bonds, or indexes
based on any of the foregoing, (b) any option, futures or forward contract
traded on an exchange, and (c) any other derivative agreement or other similar
agreement or arrangement.
"HIGHEST LAWFUL RATE" means, with respect to each Lender Party to whom
Obligations are owed, the maximum nonusurious rate of interest that such Lender
Party is permitted under applicable Law to contract for, take, charge, or
receive with respect to such Obligations. All determinations herein of the
Highest Lawful Rate, or of any interest rate determined by reference to the
Highest Lawful Rate, shall be made separately for each Lender Party as
appropriate to assure that the Loan Documents are not construed to obligate any
Person to pay interest to any Lender Party at a rate in excess of the Highest
Lawful Rate applicable to such Lender Party.
"INDEBTEDNESS" of any Person means Liabilities in any of the following
categories:
(a) Liabilities for borrowed money,
(b) Liabilities constituting an obligation to pay the deferred Purchase
price of property or services, other than customary payment terms taken in the
ordinary course of such Person's business,
(c) Liabilities evidenced by a bond, debenture, note or similar
instrument,
(d) Liabilities arising under conditional sales or other title
retention agreements or under leases capitalized in accordance with GAAP, but
excluding customary oil, gas or mineral leases,
(e) Liabilities with respect to payments received in consideration of
oil, gas, or other minerals yet to be acquired or produced at the time of
payment (including obligations under "take-or-pay" contracts to deliver gas in
return for payments already received and the undischarged balance of any
production payment created by such Person or for the creation of which such
Person directly or indirectly received payment);
(f) Liabilities under Hedging Contracts,
(g) Liabilities with respect to letters of credit or applications or
reimbursement agreements therefor, OR
10
(h) Liabilities under direct or indirect guaranties of Liabilities of
any Person or constituting obligations to purchase or acquire or to otherwise
protect or insure a creditor against loss in respect of Indebtedness of the
types described in paragraphs (a) through (g) above of any Person (such as
obligations under working capital maintenance agreements, agreements to
keep-well, or agreements to purchase debt, assets, goods, securities or
services, but excluding endorsements in the ordinary course of business of
negotiable instruments in the course of collection),
provided, however, that the "Indebtedness" of any Person shall not include
Liabilities that were incurred by such Person on ordinary trade terms to
vendors, suppliers, or other Persons providing goods and services for use by
such Person in the ordinary course of its business, unless and until such
Liabilities are outstanding more than 90 days past the original invoice or
billing date therefor. Any Indebtedness owed by a partnership shall be deemed
Indebtedness of any partner in such partnership to the extent such partner has
any liability of any kind therefor.
"INITIAL FINANCIAL STATEMENTS" means (a) the audited annual Consolidated
financial statements of Borrower dated as of December 31, 2000, (b) the audited
annual Consolidated financial statements of Target dated as of December 31,
2000, and (c) the unaudited quarterly financial statements of Target dated as of
May 31, 2001.
"INTEREST PAYMENT DATE" means (a) with respect to each Base Rate Loan,
the last day of each March, June, September and December beginning September 30,
2001, and (b) with respect to each Eurodollar Loan, the last day of the
Eurodollar Interest Period that is applicable thereto and, if such Eurodollar
Interest Period is six months in length, the date specified by Agent which is
approximately three months after such Eurodollar Interest Period begins;
provided that the last day of each calendar month shall also be an Interest
Payment Date for each such Loan so long as any Event of Default exists under
Section 7.1(a) or (b).
"INTEREST PERIOD" means with respect to any Eurodollar Loan, the related
Eurodollar Interest Period.
"INTERNAL REVENUE CODE" means the United States Internal Revenue Code of
1986, as amended from time to time and any successor statute or statutes.
"INVESTMENT" means any investment made directly or indirectly, in any
Person, whether by acquisition of shares of capital stock, indebtedness or other
obligations or securities or by loan, advance, capital contribution or otherwise
and whether made in cash, by the transfer of property, or by any other means.
"LAW" means any statute, law, regulation, ordinance, rule, treaty,
judgment, order, decree, permit, concession, franchise, license, agreement or
other governmental restriction of the United States or any state, or political
subdivision thereof or of any foreign country or any department, province or
other political subdivision thereof.
11
"LENDER PARTIES" means Agent and all Lenders.
"LENDERS" means each signatory to the Agreement (other than any
Borrower), including Bank of America, N.A. in its capacity as a Lender hereunder
rather than as Agent and the successors of each such party as holder of a Note.
"LIABILITIES" means, as to any Person, all indebtedness, liabilities and
obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent, and whether or not required to be considered pursuant to GAAP.
"LIEN" means, with respect to any property or assets, any lien, mortgage,
security interest, pledge, deposit, production payment, rights of a vendor under
any title retention or conditional sale agreement or lease substantially
equivalent thereto, tax lien, mechanic's or materialman's lien, or any other
charge or encumbrance for security purposes, whether arising by Law or agreement
or otherwise, but excluding any right of offset. "Lien" also means any filed
financing statement, any registration of a pledge (such as with an issuer of
uncertificated securities), or any other arrangement or action which would serve
to perfect a Lien described in the preceding sentence, regardless of whether
such financing statement is filed, such registration is made, or such
arrangement or action is undertaken before or after such Lien exists.
"LOAN" has the meaning given it in Section 1.1 of the Agreement.
"LOAN DOCUMENTS" means the Agreement, the Notes issued under the
Agreement, the Subject Fee Letter, and all other agreements, certificates,
documents, instruments and writings at any time delivered in connection herewith
or therewith (exclusive of term sheets and commitment letters).
"MATERIAL ADVERSE EFFECT" means any event which would reasonably be
expected to have a material and adverse effect upon (a) Borrower's Consolidated
financial condition, (b) Borrower's Consolidated operations, properties or
prospects, considered as a whole, (c) Borrower's ability to timely pay the
Obligations, or (d) the enforceability of the material terms of any Loan
Documents.
"MATURITY DATE" means July 31, 2002.
"MAXIMUM CREDIT AMOUNT" means the amount of $280,000,000.
"MOODY'S" means ▇▇▇▇▇'▇ Investor Service, Inc., or its successor.
"NOTES" has the meaning given such term in Section 1.1.
"OBLIGATIONS" means all Liabilities from time to time owing by any
Restricted Person to any Lender Party under or pursuant to any of the Loan
Documents. "OBLIGATION" means any part of the Obligations.
12
"PERCENTAGE SHARE" means when used in Article I of the Agreement or when
no Loans are outstanding, the percentage set forth opposite such Lender's name
on the signature pages hereto as modified by assignments of a Lender's rights
and obligations under the Agreement made by or to such Lender in accordance with
the terms of the Agreement, and (ii) when used otherwise, the percentage
obtained by dividing (x) the sum of the unpaid principal balance of such
Lender's Loan, by (y) the sum of the aggregate unpaid principal balance of all
Loans at such time.
"PERMITTED LIENS" means:
(a) operators' liens under customary operating agreements, liens
arising under gas transportation and purchase agreements on the gas being
transported or processed which secure related gas transportation and processing
fees only, statutory Liens for taxes, statutory mechanics' and materialmen's
Liens, and other similar statutory Liens, provided such Liens secure only
Liabilities which are not delinquent or which are being contested as provided in
Section 5.7 of the Agreement;
(b) Liens on any oil and gas properties which neither have developed
reserves (producing or non-producing) properly attributable thereto nor are
otherwise held under lease by production of other reserves;
(c) Liens on the Restricted Persons' office facilities;
(d) Liens on property securing non-recourse debt permitted under
Section 6.1(f) of the Agreement which is acquired with proceeds or developed
with proceeds of the non-recourse debt; and
(e) Liens to secure the Obligations and the 1999 Obligations.
provided that nothing in this definition shall in and of itself constitute or be
deemed to constitute an agreement or acknowledgment by the Agent or any Lender
that the Indebtedness subject to or secured by any such Permitted Lien ranks
(apart from the effect of any Lien included in or inherent in any such Permitted
Liens) in priority to the Obligations.
"PERSON" means an individual, corporation, partnership, limited liability
company, association, joint stock company, trust or trustee thereof, estate or
executor thereof, unincorporated organization or joint venture, Tribunal, or any
other legally recognizable entity.
"RATING AGENCY" means any of S & P or Moody's.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect.
"REQUIRED LENDERS" means Lenders whose aggregate Percentage Shares equal
or exceed fifty percent (50%).
13
"RESERVE REQUIREMENT" means, at any time, the maximum rate at which
reserves (including any marginal, special, supplemental, or emergency reserves)
are required to be maintained under regulations issued from time to time by the
Board of Governors of the Federal Reserve System of the United States of America
(or any successor) by member banks of such Federal Reserve System against
"Eurocurrency liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with respect to
(a) any category of liabilities which includes deposits by reference to which
the Adjusted Eurodollar Rate is to be determined, or (b) any category of
extensions of credit or other assets which include Eurodollar Loans.
"RESTRICTED PERSON" means any of Borrower and each Restricted Subsidiary.
"RESTRICTED SUBSIDIARY" means any Subsidiary of Borrower that is not an
Unrestricted Subsidiary.
"S & P" means Standard & Poor's Ratings Services (a division of McGraw
Hill Companies, Inc.), or its successor.
"SHAREHOLDERS' EQUITY" means the remainder of (i) Borrower's Consolidated
assets MINUS (ii) the sum of (x) Borrower's Consolidated liabilities (such
assets and liabilities to be calculated excluding unrealized noncash gains or
losses resulting from ▇▇▇▇-to-market adjustments pursuant to FAS 133) plus (y)
all treasury stock of Borrower and its Subsidiaries.
"SUBJECT FEE LETTER" means that certain fee letter dated as of July 31,
2001 by and among Borrower, Agent, and Banc of America Securities LLC.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association, partnership, limited liability company, joint venture, or other
business or corporate entity, enterprise or organization which is directly or
indirectly (through one or more intermediaries) controlled by or owned fifty
percent or more by such Person, provided that (a) associations, joint ventures
or other relationships (i) which are established pursuant to a standard form
operating agreement or similar agreement or which are partnerships for purposes
of federal income taxation only, (ii) which are not corporations or partnerships
(or subject to the Uniform Partnership Act) under applicable state Law, AND
(iii) whose businesses are limited to the exploration, development and operation
of oil, gas or mineral properties, transportation and related facilities and
interests owned directly by the parties in such associations, joint ventures or
relationships, shall not be deemed to be "Subsidiaries" of such Person and (b)
associations, joint ventures or other relationships (i) which are not
corporations or partnerships under applicable provincial Law, AND (ii) whose
businesses are limited to the exploration, development and operation of oil, gas
or mineral properties, transportation and related facilities and interests owned
directly by the parties in such associations, joint ventures or relationships,
shall not be deemed to be "Subsidiaries" of such Person.
"Target" means Shenendoah Energy Inc., a Delaware corporation.
14
"TERMINATION EVENT" means (a) the occurrence with respect to any ERISA
Plan of (i) a reportable event described in Sections 4043(b)(5) or (6) of ERISA
or (ii) any other reportable event described in Section 4043(b) of ERISA other
than a reportable event not subject to the provision for 30-day notice to the
Pension Benefit Guaranty Corporation pursuant to a waiver by such corporation
under Section 4043(a) of ERISA, or (b) the withdrawal of any ERISA Affiliate
from an ERISA Plan during a plan year in which it was a "substantial employer"
as defined in Section 4001(a)(2) of ERISA, or (c) the filing of a notice of
intent to terminate any ERISA Plan or the treatment of any ERISA Plan amendment
as a termination under Section 4041 of ERISA, or (d) the institution of
proceedings to terminate any ERISA Plan by the Pension Benefit Guaranty
Corporation under Section 4042 of ERISA, or (e) any other event or condition
which might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any ERISA Plan.
"TOTAL CAPITALIZATION" means the sum (without duplication) of (i) the
Consolidated Total Funded Debt of Borrower plus (ii) the Consolidated
Shareholder's Equity of Borrower.
"TOTAL FUNDED DEBT" means Liabilities referred to in clauses (a), (b),
(c), (d), and (e) of the definition of "Indebtedness".
"TRIBUNAL" means any government, any arbitration panel, any court or any
governmental department, commission, board, bureau, agency or instrumentality of
the United States of America or any state, commonwealth, nation, territory,
possession, county, parish, town, township, village or municipality, whether now
or hereafter constituted or existing.
"TYPE" means with respect to any Loans, the characterization of such
Loans as either Base Rate Loans or Eurodollar Loans.
"UNRESTRICTED SUBSIDIARY" means any corporation, association,
partnership, limited liability company, joint venture, or other business or
corporate entity, enterprise or organization in which Borrower does not
presently own an interest (directly or indirectly) which hereafter becomes a
Subsidiary of Borrower and which, within 90 days thereafter, is designated as an
Unrestricted Subsidiary by Borrower to Agent, provided that Borrower may not
designate as an Unrestricted Subsidiary any Subsidiary in which it has made an
Investment of more than $25,000,000 (directly or indirectly) by any means other
than newly issued stock or treasury stock of Borrower, which may be used to make
an Investment in Unrestricted Subsidiaries without limit and provided further
that in the event the book value of the assets of any Unrestricted Subsidiary at
any time exceeds $25,000,000, such Subsidiary shall cease to be an Unrestricted
Subsidiary and shall automatically become a Restricted Person.
"UTILIZATION FEE RATE" means, on any date, the number of Basis Points per
annum set forth below based on the Applicable Rating Level on such date:
15
APPLICABLE APPLICABLE UTILIZATION
RATING LEVEL FEE RATE
------------ ----------------------
Level I 10.0
------------ ----------------------
Level II 10.0
------------ ----------------------
Level III 15.0
------------ ----------------------
Level IV 15.0
------------ ----------------------
Level V 20.0
------------ ----------------------
Level VI 20.0
------------ ----------------------
Level VII 20.0
============ ======================
"US DOLLAR" or "$" means the lawful currency of the United States of
America.
16
SCHEDULE 1
DISCLOSURE SCHEDULE
EXHIBIT A
PROMISSORY NOTE
[$280,000,000.00] Dallas, Texas July 31, 2001
FOR VALUE RECEIVED, the undersigned, Questar Market Resources, Inc., a
Utah corporation (herein called "Borrower"), hereby promises to pay to the order
of Bank of America, N.A. (herein called "Lender"), the principal sum of
__________________ Dollars ($________________), or, if greater or less, the
aggregate unpaid principal amount of the Loans made under this Note by Lender to
Borrower pursuant to the terms of the
Credit Agreement (as hereinafter defined),
together with interest on the unpaid principal balance thereof as hereinafter
set forth, both principal and interest payable as herein provided in lawful
money of the United States of America at the offices of Agent under the
Credit
Agreement, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ or at such other place within Dallas
County, Texas, as from time to time may be designated by the holder of this
Note.
This Note (a) is issued and delivered under that certain
Credit
Agreement of even date herewith among Borrower, Bank of America, N.A.,
individually and as administrative agent ("Agent"), and the lenders (including
Lender) referred to therein (herein, as from time to time supplemented, amended
or restated, called the "
Credit Agreement"), and is a "Note" as defined therein
and (b) is subject to the terms and provisions of the Credit Agreement, which
contains provisions for payments and prepayments hereunder and acceleration of
the maturity hereof upon the happening of certain stated events. Payments on
this Note shall be made and applied as provided herein and in the Credit
Agreement. Reference is hereby made to the Credit Agreement for a description of
certain rights, limitations of rights, obligations and duties of the parties
hereto and for the meanings assigned to terms used and not defined herein.
The principal amount of this Note, together with all interest accrued
hereon, shall be due and payable in full on the Maturity Date.
Loans that are Base Rate Loans (exclusive of any past due principal or
interest) from time to time outstanding shall bear interest on each day
outstanding at the Base Rate in effect on such day; provided that if an Event of
Default has occurred and is continuing, Base Rate Loans shall bear interest on
each day outstanding at the applicable Default Rate in effect on such day. On
each Interest Payment Date Borrower shall pay to the holder hereof all unpaid
interest which has accrued on the Base Rate Loans to but not including such
Interest Payment Date. Each Loan that is a Eurodollar Loan (exclusive of any
past due principal or interest) shall bear interest on each day during the
related Interest Period at the related Adjusted Eurodollar Rate in effect on
such day; provided that if an Event of Default has occurred and is continuing,
such Eurodollar Loan shall bear interest on each day outstanding at the
applicable Default Rate in effect on such day. On each Interest Payment Date
relating to such
Eurodollar Loan, Borrower shall pay to the holder hereof all unpaid interest
which has accrued on such Eurodollar Loan to but not including such Interest
Payment Date.
All past due principal of and past due interest on the Loans shall bear
interest on each day outstanding at the applicable Default Rate in effect on
such day, and such interest shall be due and payable daily as it accrues.
Notwithstanding the foregoing provisions of this paragraph: (a) this Note shall
never bear interest in excess of the Highest Lawful Rate, and (b) if at any time
the rate at which interest is payable on this Note is limited by the Highest
Lawful Rate (by the foregoing subsection (a) or by reference to the Highest
Lawful Rate in the definitions of Base Rate, Adjusted Eurodollar Rate, and
Default Rate), this Note shall bear interest at the Highest Lawful Rate and
shall continue to bear interest at the Highest Lawful Rate until such time as
the total amount of interest accrued hereon equals (but does not exceed) the
total amount of interest which would have accrued hereon had there been no
Highest Lawful Rate applicable hereto.
Notwithstanding the foregoing paragraph and all other provisions of
this Note, in no event shall the interest payable hereon, whether before or
after maturity, exceed the maximum amount of interest which, under applicable
Law, may be charged on this Note, and this Note is expressly made subject to the
provisions of the Credit Agreement which more fully set out the limitations on
how interest accrues hereon. The term "applicable Law" as used in this Note
shall mean the laws of the State of Texas or the laws of the United States,
whichever laws allow the greater interest, as such laws now exist or may be
changed or amended or come into effect in the future.
If this Note is placed in the hands of an attorney for collection after
default, or if all or any part of the indebtedness represented hereby is proved,
established or collected in any court or in any bankruptcy, receivership, debtor
relief, probate or other court proceedings, Borrower and all endorsers, sureties
and guarantors of this Note jointly and severally agree to pay reasonable
attorneys' fees and collection costs to the holder hereof in addition to the
principal and interest payable hereunder.
Borrower and all endorsers, sureties and guarantors of this Note hereby
severally waive demand, presentment, notice of demand and of dishonor and
nonpayment of this Note, protest, notice of protest, notice of intention to
accelerate the maturity of this Note, declaration or notice of acceleration of
the maturity of this Note, diligence in collecting, the bringing of any suit
against any party and any notice of or defense on account of any extensions,
renewals, partial payments or changes in any manner of or in this Note or in any
of its terms, provisions and covenants, or any releases or substitutions of any
security, or any delay, indulgence or other act of any trustee or any holder
hereof, whether before or after maturity.
2
THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE SAME ARE GOVERNED BY APPLICABLE
FEDERAL LAW.
QUESTAR MARKET RESOURCES, INC.
By:
---------------------------
Name:
----------------------
Title:
---------------------
3
EXHIBIT B
CONTINUATION/CONVERSION NOTICE
Reference is made to that certain Credit Agreement dated as of July 31,
2001 (as from time to time amended, the "Agreement"), by and among Questar
Market Resources, Inc., a Utah corporation ("Borrower"), Bank of America, N.A.,
individually and as administrative agent ("Agent"), and certain financial
institutions ("Lenders"). Terms which are defined in the Agreement and which are
used but not defined herein are used herein with the meanings given them in the
Agreement.
Borrower hereby requests a conversion or continuation of existing Loans
into a new Borrowing pursuant to Section 1.2 of the Agreement as follows:
Existing Borrowing(s) to be continued or converted:
$____________ of Eurodollar Loans with Eurodollar Interest Period
ending __________
$____________ of Base Rate Loans
Date of continuation or conversion: __________________
Length of Eurodollar Interest Period for Eurodollar Loans
(1, 2, 3 or 6 months): ___________ months
To meet the conditions set out in the Credit Agreement for such
conversion/continuation, Borrower hereby represents, warrants, acknowledges, and
agrees to and with Agent and each Lender that:
(a) The officer of Borrower or such other Person duly authorized
by the President of Borrower signing this instrument is the duly
elected, qualified and acting officer of Borrower or such other Person
duly authorized by the President of Borrower as indicated below such
officer's signature hereto having all necessary authority to act for
Borrower in making the request herein contained.
(b) There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as
provided in Section 9.1(a) of the Credit Agreement.
(c) The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any
course of dealing, or by any other means not
provided for in Section 9.1(a) of the Agreement. The Credit Agreement
and the other Loan Documents are hereby ratified, approved, and
confirmed in all respects.
The officer of Borrower or such other Person duly authorized by the
President of Borrower signing this instrument hereby certifies that, to the best
of his knowledge after due inquiry, the above representations, warranties,
acknowledgments, and agreements of Borrower are true, correct and complete.
IN WITNESS WHEREOF this instrument is executed as of
__________________, 200_.
QUESTAR MARKET RESOURCES, INC.
By:
-----------------------------
Name:
-----------------------
Title:
----------------------
2
EXHIBIT C
CERTIFICATE ACCOMPANYING
FINANCIAL STATEMENTS
Reference is made to that certain Credit Agreement dated as of July 31,
2001 (as from time to time amended, the "Agreement"), by and among Questar
Market Resources, Inc., a Utah corporation ("Borrower"), Bank of America, N.A.,
individually and as administrative agent ("Agent"), and certain financial
institutions ("Lenders"), which Agreement is in full force and effect on the
date hereof. Terms which are defined in the Agreement are used herein with the
meanings given them in the Agreement.
This Certificate is furnished pursuant to Section 3.2 (c) of the
Agreement. Together herewith Borrower is furnishing to Agent and each Lender
Borrower's *[audited/unaudited] financial statements (the "Financial
Statements") as at __________________ (the "Reporting Date"). Borrower hereby
represents, warrants, and acknowledges to Agent and each Lender that:
(a) the officer of Borrower signing this instrument is the duly
elected, qualified and acting Chief Financial Officer of Borrower;
(b) the Financial Statements are accurate and complete and satisfy
the requirements of the Agreement;
(c) attached hereto is a schedule of calculations showing
Borrower's compliance as of the Reporting Date with the requirements of
Sections 6.11 and 6.12 of the Agreement *[and Borrower's non-compliance
as of such date with the requirements of Section(s) 6.11 and 6.12 of
the Agreement];
(d) on the Reporting Date Borrower was, and on the date hereof
Borrower is, in full compliance with the disclosure requirements of
Section 5.2(c) and 5.4 of the Agreement, and no Default otherwise
existed on the Reporting Date or otherwise exists on the date of this
instrument *[except for Default(s) under Section(s)___________ of the
Agreement, which *[is/are] more fully described on a schedule attached
hereto].
(e) *[Unless otherwise disclosed on a schedule attached hereto,]
The representations and warranties of Borrower set forth in the
Agreement and the other Loan Documents are true and correct on and as
of the date hereof (except to the extent that the facts on which such
representations and warranties are based have been changed by the
extension of credit under the Agreement), with the same effect as
though such representations and warranties had been made on and as of
the date hereof.
The officer of Borrower signing this instrument hereby certifies that
he has reviewed the Loan Documents and the Financial Statements and has
otherwise undertaken such inquiry as is in his opinion
necessary to enable him to express an informed opinion with respect to the above
representations, warranties and acknowledgments of Borrower and, to the best of
his knowledge, such representations, warranties, and acknowledgments are true,
correct and complete.
IN WITNESS WHEREOF, this instrument is executed as of ____________,
2001.
QUESTAR MARKET RESOURCES, INC.
By:
----------------------------
Name:
----------------------
Title:
---------------------
2
EXHIBIT D
OPINION OF BORROWER'S COUNSEL
[To be inserted.]
EXHIBIT E
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of July 31, 2001
(the "CREDIT AGREEMENT") among Questar Market Resources, Inc., a Utah
corporation (the "BORROWER"), the Lenders (as defined in the Credit Agreement)
and Bank of America, N.A., individually and as administrative agent for the
Lenders (the "Agent"). Terms defined in the Credit Agreement are used herein
with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without
recourse and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents as of the date hereof equal to the
percentage interest specified on Schedule 1 of all outstanding rights and
obligations under the Credit Agreement and the other Loan Documents. After
giving effect to such sale and assignment, the Assignee's Maximum Credit Amount
and the amount of the Loans owing to the Assignee will be as set forth on
Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Restricted Person
or the performance or observance by any Restricted Person of any of its
obligations under the Loan Documents or any other instrument or document
furnished pursuant thereto; and (iv) attaches the Note held by the Assignor and
requests that Agent exchange such Note for new Notes payable to the order of the
Assignee in an amount equal to the Maximum Credit Amount assumed by the Assignee
pursuant hereto and to the Assignor in an amount equal to the Maximum Credit
Amount retained by the Assignor, if any, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 5.2 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Transferee; (iv) appoints and
authorizes Agent to take such action as Agent on its behalf and to exercise such
powers and discretion under the Credit Agreement as are delegated to Agent by
the terms thereof, together with such powers and discretion as
are reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service or other forms required under Section 2.9
4. Following the execution of this Assignment and Acceptance, it will
be delivered to Agent for acceptance and recording by Agent. The effective date
for this Assignment and Acceptance (the "EFFECTIVE DATE") shall be the date of
acceptance hereof by Agent, unless otherwise specified on Schedule 1.
5. Upon such acceptance and recording by Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by Agent, from and after the
Effective Date, Agent shall make all payments under the Credit Agreement and the
Notes in respect of the interest assigned hereby (including, without limitation,
all payments of principal, interest and commitment fees with respect thereto) to
the Assignee. The Assignor and Assignee shall make all appropriate adjustments
in payments under the Credit Agreement and the Notes for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the Laws of the State of Texas.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
2
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
Percentage interest assigned: ______________ %
Assignee's Maximum Credit Amount: US $__________
Aggregate outstanding principal amount
of Loans assigned: US $__________
Principal amount of Note payable to Assignee: US $__________
Principal amount of Note payable to Assignor: US $__________
Effective Date (if other than date
of acceptance by Agent): * ____________,____
[NAME OF ASSIGNOR], as Assignor
By:
---------------------------
Title:
Dated:
------------------------
[NAME OF ASSIGNEE], as Assignee
By:
---------------------------
Title:
Domestic Lending Office:
Eurodollar Lending Office:
* This date should be no earlier than five Business Days after the
delivery of this Assignment and Acceptance to Agent.
Accepted [and Approved] **
this________ day of ___________________, 19 __
[Bank of America, N.A.]
By:
----------------------------------------
Title:
[Approved this ___________ day
of _________________, 19 _____
QUESTAR MARKET RESOURCES, INC.
By:
-------------------------------------]**
Title:
** Required if the Assignee is an Eligible Transferee solely by
reason of subsection (b) of
the definition of "Eligible Transferee".
2
EXHIBIT F
BORROWING NOTICE
Reference is made to that certain Credit Agreement dated as of July 31,
2001 (as from time to time amended, the "Agreement"), by and among Questar
Market Resources, Inc., a Utah corporation ("Borrower"), Bank of America, N.A.,
as individually and as administrative agent ("Agent"), and certain financial
institutions ("Lenders"). Terms which are defined in the Agreement are used
herein with the meanings given them in the Agreement. Pursuant to the terms of
the Agreement, Borrower hereby requests Lenders to make Loans to Borrower as
follows:
Aggregate amount of Loans: $ ___________________
Type of Loans in Borrowing: ___________________
[Base Rate Loans or Eurodollar Loans]
Date on which Loans are to be made: ___________________
Length of Interest Period for Eurodollar Loans ____________ months
[1, 2, 3 or 6 months]
To induce Lenders to make such Loans, Borrower hereby represents,
warrants, acknowledges, and agrees to and with Agent and each Lender that:
(a) The officer of Borrower or such other Person duly authorized by
the President of Borrower signing this instrument is the duly elected,
qualified and acting officer of Borrower or such other Person duly
authorized by the President of Borrower as indicated below such
officer's signature hereto having all necessary authority to act for
Borrower in making the request herein contained.
(b) The representations and warranties of Borrower set forth in the
Agreement and the other Loan Documents are true and correct on and as
of the date hereof (except to the extent that the facts on which such
representations and warranties are based have been changed by the
extension of credit under the Agreement), with the same effect as
though such representations and warranties had been made on and as of
the date hereof.
(c) There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as
provided in Section 9.1(a) of the Agreement; nor will any such Default
exist upon Borrower's receipt and application of the Loans requested
hereby. Borrower will use the Loans hereby requested in compliance with
Section 1.4 of the Agreement.
(d) Except to the extent waived in writing as provided in Section
9.1(a) of the Agreement, Borrower has performed and complied with all
agreements and conditions in the Agreement required to be performed or
complied with by Borrower on or prior to the date hereof, and each of
the conditions precedent to Loans contained in the Agreement remains
satisfied.
(e) The aggregate amount of all Loans, after the making of the
Loans requested hereby, will not be in excess of the Maximum Credit
Amount on the date requested for the making of such Loans.
(f) The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any
course of dealing, or by any other means not provided for in Section
9.1(a) of the Agreement. The Agreement and the other Loan Documents are
hereby ratified, approved, and confirmed in all respects.
The officer of Borrower or such other Person duly authorized by the
President of Borrower signing this instrument hereby certifies that, to the best
of his knowledge after due inquiry, the above representations, warranties,
acknowledgments, and agreements of Borrower are true, correct and complete.
IN WITNESS WHEREOF, this instrument is executed as of ____________,
200__.
QUESTAR MARKET RESOURCES, INC.
By:
------------------------------
Name:
Title:
2