1
EXHIBIT 10.46
================================================================================
CREDIT AGREEMENT
AMONG
TRANSTEXAS GAS CORPORATION,
BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
AND
CREDIT SUISSE FIRST BOSTON MANAGEMENT CORPORATION,
AS ADMINISTRATIVE AGENT
DATED AS OF APRIL 27, 1999
================================================================================
2
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS
1.1 Defined Terms.............................................................................................1
1.2 Other Definitional Provisions.............................................................................9
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments...............................................................................................9
2.2 Notes.....................................................................................................9
2.3 Procedure for Loan Borrowing.............................................................................10
2.4 Additional Loans.........................................................................................10
SECTION 3. GENERAL PROVISIONS APPLICABLE TO THE LOANS
3.1 Interest Rates and Payment Dates.........................................................................10
3.2 Optional Prepayments.....................................................................................10
3.3 Computation of Interest and Fees.........................................................................11
3.4 Pro Rata Treatment and Payments..........................................................................11
3.5 Taxes....................................................................................................11
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 Financial Condition......................................................................................13
4.2 Existence; Compliance with Law...........................................................................13
4.3 Power; Authorization; Enforceable Obligations............................................................14
4.4 No Legal Bar.............................................................................................14
4.5 No Material Litigation...................................................................................14
4.6 No Default...............................................................................................14
4.7 Ownership of Property; Liens.............................................................................15
4.8 Intellectual Property....................................................................................15
4.9 Taxes....................................................................................................15
4.10 Federal Regulations.....................................................................................15
4.11 ERISA...................................................................................................15
4.12 Investment Company Act; Other Regulations...............................................................16
-i-
3
4.13 Subsidiaries............................................................................................16
4.14 Security Interests......................................................................................16
4.15 Accuracy and Completeness of Information................................................................16
4.16 Labor Relations.........................................................................................17
4.17 Insurance...............................................................................................17
4.18 Purpose of Loans........................................................................................17
4.19 Year 2000 Compliance....................................................................................17
4.20 Order Expenses..........................................................................................17
4.21 Effectiveness of Orders.................................................................................17
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to First Advance of Loans.....................................................................17
5.2 Conditions to Second Advance of Loans....................................................................20
5.3 Release of Funds from Cash Collateral Account............................................................21
SECTION 6. AFFIRMATIVE COVENANTS
6.1 Financial Statements.....................................................................................21
6.2 Certificates; Other Information..........................................................................22
6.3 Payment of Obligations...................................................................................22
6.4 Conduct of Business and Maintenance of Existence.........................................................22
6.5 Maintenance of Property; Insurance.......................................................................22
6.6 Inspection of Property; Books and Records; Discussions...................................................23
6.7 Notices..................................................................................................23
6.8 Environmental Laws.......................................................................................24
6.9 Year 2000 Covenants......................................................................................24
SECTION 7. NEGATIVE COVENANTS
7.1 Limitation on Indebtedness...............................................................................24
7.2 Limitation on Liens......................................................................................24
7.3 Limitation on Guarantee Obligations......................................................................25
7.4 Limitation on Fundamental Changes........................................................................25
7.5 Limitation on Sale of Assets.............................................................................25
7.6 Limitation on Dividends..................................................................................26
7.7 Limitation on Capital Expenditures.......................................................................26
-ii-
4
7.8 Limitation on Investments, Loans and Advances............................................................26
7.9 Limitation on Optional Payments and Modifications of Debt Instruments....................................26
7.10 Limitation on Transactions with Affiliates..............................................................27
7.11 Limitation on Lines of Business; Limitation on Drilling Activity........................................27
7.12 Governing Documents.....................................................................................27
SECTION 8. EVENTS OF DEFAULT
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment..............................................................................................30
9.2 Delegation of Duties.....................................................................................30
9.3 Exculpatory Provisions...................................................................................30
9.4 Reliance by Administrative Agent.........................................................................30
9.5 Notice of Default........................................................................................31
9.6 Non-Reliance on Administrative Agent and Other Lenders...................................................31
9.7 Indemnification..........................................................................................32
9.8 Administrative Agent in Its Individual Capacity..........................................................32
9.9 Successor Administrative Agent...........................................................................32
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers..................................................................................32
10.2 Notices.................................................................................................33
10.3 No Waiver; Cumulative Remedies..........................................................................34
10.4 Survival of Representations and Warranties..............................................................34
10.5 Payment of Expenses and Taxes...........................................................................34
10.6 Successors and Assigns; Participations and Assignments..................................................35
10.7 Set-off.................................................................................................36
10.8 Counterparts............................................................................................37
10.9 Severability............................................................................................37
10.10 Integration............................................................................................37
10.11 GOVERNING LAW..........................................................................................37
10.12 Submission To Jurisdiction; Waivers....................................................................37
10.13 Acknowledgements.......................................................................................38
10.14 WAIVERS OF JURY TRIAL..................................................................................38
10.15 Intercompany Loans.....................................................................................38
10.16 Concerning the Collateral..............................................................................39
-iii-
5
Schedules
Schedule 1 Lenders and Commitments
Schedule 4.1 Material Changes
Schedule 4.5 Material Litigation
Schedule 4.13 Subsidiaries
Schedule 4.17 Insurance
Schedule 7.1 Existing Indebtedness
Schedule 7.2 Existing Liens
Schedule 7.3 Existing Guarantees
Schedule 7.10 Transactions with Affiliates
Schedule 7.11 Permitted Drilling Activities
Exhibits
Exhibit A Form of Note
Exhibit B Form of Blocked Account Agreement
Exhibit C Form of Guarantee
Exhibit D Form of Non-Bank Status Certificate
Exhibit E Form of Secretary's Certificate
Exhibit F Form of Legal Opinion
Exhibit G Form of Assignment and Acceptance
6
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of April 27, 1999, among TRANSTEXAS
GAS CORPORATION, a Delaware corporation and a debtor-in-possession (the
"Borrower"), the lenders from time to time parties to this Agreement (the
"Lenders") and CREDIT SUISSE FIRST BOSTON MANAGEMENT CORPORATION, as
administrative agent for the Lenders hereunder.
RECITALS
The Borrower has filed a voluntary bankruptcy petition for
relief under Chapter 11 of the United States Bankruptcy Code (as amended from
time to time, the "Bankruptcy Code") in the United States Bankruptcy Court for
Delaware (the "Bankruptcy Court"), commencing a case (the "Borrower's Case") on
April 19, 1999 (the "Petition Date").
Additionally, TransAmerican Energy Corporation, a Delaware
corporation ("TEC") and TransAmerican Refining Corporation, a Texas corporation
("TARC"; together with TEC, each a "Guarantor", collectively the "Guarantors"),
affiliates of the Borrower, have also filed voluntary bankruptcy petitions for
relief under Chapter 11 of the Bankruptcy Code with the Bankruptcy Court,
commencing their respective cases (each a "Guarantor's Case", collectively the
"Guarantors' Cases"; together with the Borrower's Case, the "Chapter 11 Cases")
The Borrower has requested that, during the pendancy of the
Chapter 11 Cases, each of the Lenders make a term loan to the Borrower in the
aggregate principal amount of $20,000,000, the proceeds of which would be used
to for working capital purposes in the ordinary course of business and to pay
fees and expenses incurred in connection herewith. The Guarantors are willing to
guarantee all obligations of the Borrower hereunder. The Lenders are willing to
make such credit available to the Borrower, but only on these terms, and subject
to the conditions, set forth in this Agreement.
The parties hereto hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Administrative Agent": Credit Suisse First Boston Management
Corporation, as the administrative agent for the Lenders under this
Agreement and the other Loan Documents to the extent provided herein
and therein.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person (including, with its
correlative meanings, "controlled by" and "under common control with")
means the power, directly or indirectly, either to (a) vote 10% or more
of the securities having
7
ordinary voting power for the election of directors of such Person or
(b) direct or cause the direction of the management and policies of
such Person, whether by contract or otherwise.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Approval Orders": the collective reference to the Interim
Order, the Final Order and the Guarantee Orders.
"Assignee": as defined in Section 10.6(c).
"Assignment and Acceptance": as defined in Section 10.6(c).
"Avoidance Action" shall mean any action which seeks (a) to
invalidate, avoid, subordinate or otherwise impair any claims of the
Lenders under this Agreement or any liens created by the Loan Documents
or (b) to recover any transfer made to the Administrative Agent or any
Lender by or on behalf of the Borrower or any Guarantor, provided, that
Avoidance Action shall not include any action taken to investigate any
of the foregoing.
"Bankruptcy Code": as defined in the Recitals hereto.
"Bankruptcy Court": as defined in the Recitals hereto.
"Blocked Account Agreement": the Blocked Account Agreement, in
the form of Exhibit B attached hereto, among the Borrower and the
Administrative Agent.
"Borrower": as defined in the Heading hereto.
"Borrower Carve Out Expenses": fees payable to the Clerk of
the Bankruptcy Court and the United States Trustee pursuant to 28
U.S.C. Section 1930, and the allowed fees and expenses of attorneys,
accountants and other professionals retained by the Borrower and any
Official Committee appointed in the Chapter 11 Case; provided, that
Borrower Carve Out Expenses shall not include fees and expenses
incurred at any time in connection with any Avoidance Actions.
"Borrower's Case": as defined in the Recitals hereto.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all similar ownership interests in a Person (other
than a corporation) and any and all warrants or options to purchase any
of the foregoing.
-2-
8
"Cash Collateral Account": a demand deposit account
established and maintained by the Borrower with the Administrative
Agent (or one of its Affiliates), which shall be subject to a Blocked
Account Agreement.
"Cash Equivalents": (a) securities with maturities of 90 days
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of
90 days or less from the date of acquisition and overnight bank
deposits of any Lender or of any commercial bank having capital and
surplus in excess of $500,000,000, (c) repurchase obligations of any
Lender or of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than seven days with
respect to securities issued or fully guaranteed or insured by the
United States Government, (d) commercial paper of a domestic issuer
rated at least A-1 or the equivalent thereof by Standard and Poor's
Ratings Group ("S&P") or P-1 or the equivalent thereof by ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's") and in either case maturing within
90 days after the day of acquisition, (e) securities with maturities of
90 days or less from the date of acquisition issued or fully guaranteed
by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities
of which state, commonwealth, territory, political subdivision, taxing
authority or foreign government (as the case may be) are rated at least
A by S&P or A by Moody's, (f) securities with maturities of 90 days or
less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements
of clause (b) of this definition or (g) shares of money market mutual
or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
"Chapter 11 Cases": as defined in the Recitals hereto.
"Closing Date": the date on which the conditions precedent set
forth in Section 5.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all property and interests in property of the
Loan Parties, now owned or hereinafter acquired, upon which a Lien is
purported to be created in favor of the Lenders by the Approval Orders.
"Commitment": as to any Lender, its obligation to make a Loan
to the Borrower pursuant to Section 2.1 in the amount set forth
opposite such Lender's name on Schedule 1.
"Commitment Percentage": as to any Lender, the percentage
equal to the quotient of such Lender's Commitment divided by the
aggregate Commitments.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA
-3-
9
or is part of a group which includes the Borrower and which is treated
as a single employer under Section 414 of the Code.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any
time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Event of Default": any of the events specified in Section 8;
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Final Order": the order of the Bankruptcy Court in the
Borrower's Case granting final approval for this Agreement.
"Final Period": the period of time during which the Final
Order is in effect.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"Funding Date" shall mean the date on which advances under the
Loans are made hereunder.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time.
"Governing Documents": as to any Person, its articles or
certificate of incorporation and by-laws, its partnership agreement,
its certificate of formation and operating agreement, and/or the other
organizational or governing documents of such Person.
-4-
10
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee": the Guarantee to be executed and delivered by the
Guarantors, substantially in the form of Exhibit C, as the same may be
amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The terms
"Guarantee" and "Guaranteed" used as a verb shall have a correlative
meaning. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of
the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
"Guarantee Order" shall mean an order of the Bankruptcy Court
in each Guarantor's Case in form and substance acceptable to the Lender
approving the Guarantee.
"Guarantor": as defined in the Recitals hereto.
"Guarantor Carve Out Expenses" shall mean fees payable to the
Clerk of the Bankruptcy Court and the United States Trustee pursuant to
28 U.S.C. Section 1930, and the allowed fees and expenses of attorneys,
accountants and other professionals retained by a Guarantor and any
Official Committee appointed in a Guarantor's Case; provided, that
-5-
11
Guarantor Carve Out Expenses shall not include fees and expenses
incurred at any time in connection with any Avoidance Action.
"Guarantor's Case": as defined in the Recitals hereto.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money
(whether by loan or the issuance and sale of debt securities) or for
the deferred purchase price of property or services (other than current
trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (c) all obligations of such Person
under Financing Leases, (d) all obligations of such Person in respect
of letters of credit, acceptances or similar instruments issued or
created for the account of such Person and (e) all liabilities secured
by any Lien on any property owned by such Person even though such
Person has not assumed or otherwise become liable for the payment
thereof.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": the last day of each month, or if
such day is not a Business Day, the next succeeding Business Day.
"Interest Rate": 13% per annum.
"Interim Order": the order of the Bankruptcy Court in the
Borrower's Case granting interim approval for this Agreement.
"Interim Period": the period of time during which the Interim
Order is in effect (but shall not include the Final Period).
"Lenders": as defined in the heading hereto.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing), and the filing of any
financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction in respect of any of the foregoing.
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Notes and the Guarantee.
"Loan Parties": the Borrower and the Guarantors.
-6-
12
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole or
any Guarantor and its Subsidiaries taken as a whole or (b) the validity
or enforceability of this or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder
or thereunder, excluding, however, any consequences of the Chapter 11
Cases.
"Maturity Date": the earlier to occur of (i) October 20, 1999
and (ii) the effective date of a Plan of Reorganization.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Non-Bank Status Certificate": as defined in Section
3.6(b)(i)(B).
"Non-Excluded Taxes": as defined in Section 3.5.
"Note": as defined in Section 2.2.
"Obligations": the unpaid principal amount of, and interest
(including, without limitation, interest accruing after the maturity of
the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) on
the Loans, and all other obligations and liabilities of the Loan
Parties to the Administrative Agent and the Lenders, whether direct or
indirect, absolute or contingent, due or to become due, or now existing
or hereafter incurred, which may arise under, or out of or in
connection with this Agreement, the Notes, the Guarantees and any other
Loan Documents and any other document made, delivered or given in
connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees and disbursements of counsel
to the Administrative Agent or to the Lenders that are required to be
paid by a Loan Party pursuant to the terms of the Loan Documents) or
otherwise.
"Official Committee" shall mean any committee appointed in a
Chapter 11 case by the United States Trustee pursuant to Section 1102
of the Bankruptcy Code.
"Participant": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Petition Date": as defined in the Recitals hereto.
-7-
13
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Plans of Reorganization": the collective reference to the
plans of reorganization in each of the Chapter 11 Cases.
"Register": as defined in Section 10.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under Sections .21, .22, .23, .26, .27 or .28
of PBGC Reg. Section 4043.
"Required Lenders": at any time, Lenders the Commitment
Percentages of which aggregate at least 65%.
"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or Governing
Documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the chief executive officer and the
president of the Borrower or, with respect to financial matters, the
chief financial officer of the Borrower.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"TARC": as defined in the Recitals hereto.
"TEC": as defined in the Recitals hereto.
-8-
14
"Transferee": as defined in Section 10.6(f).
"United States Trustee": the United States Trustee for
Region 3.
"Weekly Budget": a four-week budget of projected operating
expenses, capital expenditure, and working capital needs of the
Borrower, on a weekly basis for the four weeks covered by the budget in
form and substance approved by the Required Lenders, in their sole
discretion.
"Year 2000 Problem": the risk that computer applications used
by the Borrower and its Subsidiaries may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior
to, and any date on or after, December 31, 1999.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in any Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Borrower and its Subsidiaries not defined in Section 1.1 and accounting
terms partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. Subject to the terms and conditions hereof,
each Lender severally agrees to make a term loan (a "Loan") to the Borrower on
the Closing Date in an amount not to exceed its pro-rata share (based on the
amount of the Commitment of such Lender then in effect); provided, that the
Commitments shall terminate at 3:00 p.m., New York City time, on April 30, 1999
or such later date as shall be agreed to by the Lenders, if the Loans have not
been made prior to that time.
2.2 Notes. The Loan of each Lender shall be evidenced by a
promissory note of the Borrower, substantially in the form of Exhibit A with
appropriate insertions as to payee, date and principal amount (a "Note"),
payable to the order of such Lender and representing the obligation of the
Borrower to pay the amount of the Loan made by such Lender. Each Lender is
hereby authorized to record the date and amount of its Loan and the date and
amount of each payment or prepayment of principal thereof on the schedule
annexed to and constituting a part of its Note, and any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded;
provided, that the failure of such Lender to make any such recordation
-9-
15
shall not impair or otherwise affect the validity or enforceability of its Note.
Each Note shall (a) be dated the Closing Date, (b) be stated to mature on the
Maturity Date and (c) bear interest for the period from the date thereof on the
unpaid principal amount thereof at the interest rates per annum specified in
Section 3.1. Interest on the Notes shall be payable on the dates specified in
Section 3.1(c).
2.3 Procedure for Loan Borrowing. The proceeds of the Loans
will be disbursed in two advances, the first advance on the Closing Date in the
amount of $6,000,000.00 in connection with the Interim Order and the second
advance in the amount of $14,000,000.00 in connection with the Final Order upon
satisfaction of the conditions set forth in Section 5.2. The Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 10:00 a.m., New York City time, one Business
Day prior to each Funding Date requesting that the Lenders make advances under
the Loans on such Funding Date and specifying (i) the Funding Date (which in the
case of the first advance shall be the Closing Date) and (ii) the amount to be
advanced. Upon receipt of such notice the Administrative Agent shall promptly
notify each Lender thereof. Not later than 11:00 a.m. on the each Funding Date
each Lender shall credit the Cash Collateral Account the amount of such Lender's
pro rata share of the Loans to be advanced in immediately available funds.
2.4 Additional Loans. One or more existing Lenders, and/or one
or more other Persons acceptable to the Required Lenders, may make an additional
Loan to the Borrower in an aggregate principal amount not to exceed $10,000,000
as contemplated by Section 3.2. Any such additional Loan shall be evidenced by a
Note issued by the Borrower and shall otherwise be treated as a Loan hereunder.
SECTION 3. GENERAL PROVISIONS APPLICABLE TO THE LOANS
3.1 Interest Rates and Payment Dates.
(a) Each Loan shall bear interest for each day at the Interest
Rate.
(b) If all or a portion of (i) any principal of any Loan, (ii)
any interest payable thereon, or (iii) any other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), the principal of the Loans and any such overdue interest or other
amount shall bear interest at a rate per annum equal to the Interest Rate plus
2% until such overdue principal, interest or other amount is paid in full (as
well after as before judgment).
(c) Interest shall be payable in arrears on each Interest
Payment Date, provided, that interest accruing pursuant to paragraph (b) of this
Section shall be payable from time to time on demand.
3.2 Optional Prepayments. The Borrower may prepay the Loans,
in whole but not in part, without premium or penalty, upon at least five
Business Days' irrevocable notice to the Administrative Agent, specifying the
date and amount of prepayment; provided, that (i) no such prepayment may occur
prior to the date which is 30 days following the Closing Date, (ii) no such
prepayment shall be permitted if either the Lenders, new lenders acceptable to
the Required
-10-
16
Lenders or a combination thereof have increased the aggregate Commitments
hereunder to at least $30,000,000 and (iii) no such prepayments shall be
permitted unless made with the proceeds of a new debtor-in-possession financing
facility consented to by the Administrative Agent. Upon receipt of any such
notice the Administrative Agent shall promptly notify each Lender thereof. If
any such notice is given, the Loans shall be due and payable on the date
specified therein, together with accrued interest to such date. Amounts prepaid
on account of the Loans may not be reborrowed. The Loan may not otherwise be
prepaid without the prior consent of the Required Lender.
3.3 Computation of Interest and Fees. Commitment fees and
interest shall be calculated on the basis of a 360-day year for the actual days
elapsed.
3.4 Pro Rata Treatment and Payments. Each payment (including
each prepayment) by the Borrower on account of principal of and interest on the
Loans and any fees shall be made pro rata according to the respective
outstanding principal amounts of the Loans then held by the Lenders. All
payments (including prepayments) to be made by the Borrower hereunder, whether
on account of principal, interest, fees or otherwise, shall be made without
set-off or counterclaim and shall be made prior to 12:00 noon, New York City
time, on the due date thereof to each Lender, at such Lender's office specified
in Section 10.2, in Dollars and in immediately available funds. If any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
3.5 Taxes.
(a) All payments made by the Borrower under this Agreement and
any Note shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any Note). If any such non-excluded taxes,
levies, imposts, duties, charges, fees deductions or withholdings ("Non-Excluded
Taxes") are required to be withheld from any amounts payable to the
Administrative Agent or any Lender hereunder or under any Note, the amounts so
payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement, provided,
however, that the Borrower shall not be required to increase any such amounts
payable to any Lender that is not organized under the laws of the United States
of America or a state thereof if such Lender fails to comply with the
requirements of clause (b) of this Section. Whenever any Non-Excluded Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Administrative
-11-
17
Agent for its own account or for the account of such Lender, as the case may be,
a certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes
when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent and the Lenders
for any incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. The
agreements in this Section shall survive the termination of this Agreement and
the payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) (A) if such Lender is a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, deliver to the Borrower and the
Administrative Agent (x) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor applicable
form, as the case may be, and (y) an Internal Revenue Service Form W-8
or W-9, or successor applicable form, as the case may be, or (B) if
such Lender is not a "bank" within the meaning of Section 881(c)(3)(A)
of the Code and cannot deliver either Internal Revenue Service Form
1001 or 4224, deliver (x) a certificate substantially in the form of
Exhibit D (a "Non-Bank Status Certificate") and (y) two completed and
signed copies of Internal Revenue Service Form W-8 or successor
applicable form;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the most recent
form previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the
Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, (ii) in the
case of a Non-Bank Status Certificate, that it is not a "bank" as such term is
defined in Section 881(c)(3)(A) of the Code, and (iii) in the case of a Form W-8
or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a Participant
pursuant to Section 10.6 shall, upon the effectiveness of the related transfer,
be required to provide all of the forms and statements required pursuant to this
Section, provided that in the case of a Participant such Participant shall
furnish all such required forms and statements to the Lender from which the
related participation shall have been purchased.
-12-
18
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans, the Borrower hereby represents and
warrants to the Administrative Agent and each Lender that:
4.1 Financial Condition.
(a) The consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at January 31, 1998 and the related consolidated
statements of income and of cash flows for the fiscal year ended on such date,
reported on by PricewaterhouseCoopers LP, copies of which have heretofore been
furnished to each Lender, are complete and correct and present fairly the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the fiscal year then ended. The unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at October 31, 1998 and the related unaudited consolidated statements of income
and of cash flows for the nine-month period ended on such date, certified by a
Responsible Officer, copies of which have heretofore been furnished to each
Lender, are complete and correct in all material respects and present fairly the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the nine-month period then ended (subject
to normal year-end audit adjustments and the absence of footnotes). All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by such accountants or Responsible Officer,
as the case may be, and as disclosed therein). Neither the Borrower nor any of
its consolidated Subsidiaries had, at the date of the most recent balance sheet
referred to above, any material Guarantee Obligation, contingent liability or
liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including, without limitation, any interest rate or foreign currency
swap or exchange transaction or other financial derivative, which is not
reflected in the foregoing statements or in the notes thereto. Except as set
forth on Schedule 4.1, during the period from October 31, 1998 to and including
the date hereof there has been no sale, transfer or other disposition by the
Borrower or any of its consolidated Subsidiaries of any material part of its
business or property and no purchase or other acquisition of any business or
property (including any Capital Stock of any other Person) material in relation
to the consolidated financial condition of the Borrower and its consolidated
Subsidiaries at October 31, 1998.
(b) The operating forecast and cash flow projections of the
Borrower and its consolidated Subsidiaries and the initial Weekly Budget, copies
of which have heretofore been furnished to the Lenders, have been prepared in
good faith under the direction of a Responsible Officer of the Borrower, and in
accordance with GAAP. The Borrower has no reason to believe that as of the date
of delivery thereof such operating forecast and cash flow projections and such
Weekly Budget are materially incorrect or misleading in any material respect, or
omit to state any material fact which would render them misleading in any
material respect.
4.2 Existence; Compliance with Law. Each of the Borrower and
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the
-13-
19
jurisdiction of its organization, (b) has the corporate power and authority, and
the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified as a foreign corporation and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification and (d) is in compliance
with all Requirements of Law except to the extent that the failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
4.3 Power; Authorization; Enforceable Obligations. Upon entry
of the Interim Order and the Final Order, as applicable, the Borrower has the
corporate power and authority, and the legal right, to make, deliver and perform
the Loan Documents to which it is a party and to borrow hereunder and has taken
all necessary corporate action to authorize the borrowings on the terms and
conditions of this Agreement and any Notes and to authorize the execution,
delivery and performance of the Loan Documents to which it is a party. After
entry of the Interim Order and the Final Order, as applicable, no consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of the Loan Documents to which the Borrower is a party. This
Agreement has been, and each other Loan Document to which it is a party will be,
duly executed and delivered on behalf of the Borrower. Upon entry of the Interim
Order and the Final Order, as applicable, this Agreement constitutes, and each
other Loan Document to which it is a party when executed and delivered will
constitute, a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
4.4 No Legal Bar. Upon entry of the Interim Order and the
Final Order, as applicable, the execution, delivery and performance of the Loan
Documents to which the Borrower is a party, the borrowings hereunder and the use
of the proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of the Borrower or of any of its Subsidiaries and will not result in,
or require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation (other than Liens created by the Approval Orders in favor
of the Administrative Agent).
4.5 No Material Litigation. Except as set forth on Schedule
4.5, no litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of its or their respective properties or revenues (a) with respect to any of the
Loan Documents or any of the transactions contemplated hereby or thereby, or (b)
which could reasonably be expected to have a Material Adverse Effect.
4.6 No Default. No Default or Event of Default has occurred
and is continuing.
-14-
20
4.7 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by Section 7.2.
4.8 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does the
Borrower know of any valid basis for any such claim. The use of such
Intellectual Property by the Borrower and its Subsidiaries does not infringe on
the rights of any Person, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
4.9 Taxes. Each of the Borrower and its Subsidiaries has filed
or caused to be filed all tax returns which, to the knowledge of the Borrower,
are required to be filed and has paid all taxes shown to be due and payable on
said returns or on any assessments made against it or any of its property and
all other taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be or taxes in the
aggregate amount not to exceed $2,000,000.00); no tax Lien has been filed, and,
to the knowledge of the Borrower, no claim is being asserted, with respect to
any such tax, fee or other charge.
4.10 Federal Regulations. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the Board
of Governors of the Federal Reserve System as now and from time to time
hereafter in effect, or for any purpose which violates, or which would be
inconsistent with, the provisions of the regulations of such Board of Governors.
If requested by any Lender or the Administrative Agent, the Borrower will
furnish to the Administrative Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form G-3 or FR Form U-1
referred to in said Regulation U.
4.11 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. Neither the Borrower nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan, and
neither the Borrower
-15-
21
nor any Commonly Controlled Entity would become subject to any liability under
ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made. No such
Multiemployer Plan is in Reorganization or Insolvent.
4.12 Investment Company Act; Other Regulations. The Borrower
is not an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
The Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
4.13 Subsidiaries. Schedule 4.13 sets forth the name of TEC
and each direct or indirect Subsidiary of TEC, its form of organization, its
jurisdiction of organization, the total number of issued and outstanding shares
or other interests of Capital Stock thereof, the classes and number of issued
and outstanding shares or other interests of Capital Stock of each such class,
the identity of each holder or group of holders of Capital Stock thereof and the
number of shares or other interests of such Capital Stock held by each such
holder and the percentage of all outstanding shares or other interests of such
class of Capital Stock held by such holders.
4.14 Security Interests. After entry of the Interim Order or
the Final Order, as applicable, and the Guarantee Orders, the Administrative
Agent for the ratable benefit of the Lenders shall have a legal, valid and
enforceable, first priority perfected security interest in all right, title and
interest of the Loan Party in the "Collateral" described therein, other than as
provided in the Interim Order during its pendency and the Final Order during its
pendency.
4.15 Accuracy and Completeness of Information.
(a) All factual information, reports and other papers and data
with respect to the Loan Parties (other than projections) furnished, and all
factual statements and representations made, to the Administrative Agent or the
Lenders by a Loan Party, or on behalf of a Loan Party, were, at the time the
same were so furnished or made, when taken together with all such other factual
information, reports and other papers and data previously so furnished and all
such other factual statements and representations previously so made, complete
and correct in all material respects, to the extent necessary to give the
Administrative Agent and the Lenders true and accurate knowledge of the subject
matter thereof in all material respects, and did not, as of the date so
furnished or made, contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances in which the same were
made.
(b) All projections with respect to the Loan Parties furnished
by or on behalf of a Loan Party to the Administrative Agent or the Lenders were
prepared and presented in good faith by or on behalf of such Loan Party. No fact
is known to a Loan Party which materially and adversely affects or in the future
is reasonably likely (so far as such Loan Party can reasonably foresee) to have
a Material Adverse Effect which has not been set forth in the financial
statements referred to in Section 4.1 or in such information, reports, papers
and data or otherwise disclosed in writing to the Administrative Agent or the
Lenders prior to the Closing Date.
-16-
22
4.16 Labor Relations. No Loan Party is engaged in any unfair
labor practice which could reasonably be expected to have a Material Adverse
Effect. There is (a) no unfair labor practice compliant pending or, to the best
knowledge of each Loan Party and each of the Subsidiaries, threatened against a
Loan Party before the National Labor Relations Board which could reasonably be
expected to have a Material Adverse Effect and no grievance or arbitration
proceeding arising out of or under a collective bargaining agreement is so
pending or threatened; (b) no strike, labor dispute, slowdown or stoppage
pending or, to the best knowledge of each Loan Party, threatened against a Loan
Party; and (c) no union representation question existing with respect to the
employees of a Loan Party and no union organizing activities are taking place
with respect to any thereof.
4.17 Insurance. Each Loan Party has, with respect to its
properties and business, insurance covering the risks, in the amounts, with the
deductible or other retention amounts, and with the carriers, listed on Schedule
4.17, which insurance meets the requirements of Section 6.5 hereof as of the
Closing Date.
4.18 Purpose of Loans. The proceeds of the Loans shall be used
by the Borrower for working capital purposes in the ordinary course of business
in accordance with the Weekly Budgets.
4.19 Year 2000 Compliance. From and after the Closing Date,
the Borrower believes that the Year 2000 Problem would not reasonably be
expected to have a Material Adverse Effect on the Borrower.
4.20 Order Expenses.
(a) During the Interim Period, upon the entry of the Interim
Order, the Obligations shall constitute allowed administrative expenses in the
Borrower's Case having priority in payment over all other administrative
expenses and unsecured claims, other than the Borrower Carve Out Expenses.
(b) During the Final Period, upon the entry of the Final
Order, the Obligations shall constitute allowed administrative expenses in the
Borrowers Case having priority in payment over all other administrative expenses
and unsecured claims, other than the Borrower Carve Out Expenses.
4.21 Effectiveness of Orders. Each of the Interim Order, the
Final Order and the Guarantee Order, as applicable, are in full force and effect
from the time after the date on which each was entered and has not been stayed,
reversed, modified or amended without the consent of the Lender.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to First Advance of Loans. The agreement of
each Lender to make the first advance of its Loan is subject to the
satisfaction, immediately prior to or concurrently with the making of the first
advance of such Loan on the Closing Date, which shall
-17-
23
be on or prior to April 30, 1999 or such later date as shall be agreed to by the
Lenders, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have
received: (i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower, with a counterpart for each Lender;
(ii) for the account of each Lender, a Note of the
Borrower conforming to the requirements hereof and executed by
a duly authorized officer of the Borrower;
(iii) the Guarantee, executed and delivered by a duly
authorized officer of the party thereto, with a counterpart or
a conformed copy for each Lender; and
(iv) the Blocked Account Agreement, executed and
delivered by a duly authorized officer of each party thereto,
with a counterpart or a conformed copy for each Lender.
(b) Secretary's Certificates. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of
each Loan Party, dated the Closing Date, substantially in the form of
Exhibit E, with appropriate insertions and attachments, satisfactory in
form and substance to the Administrative Agent, executed by the
President or any Vice President and the Secretary or any Assistant
Secretary of such Loan Party.
(c) Corporate Proceedings of the Loan Parties. The
Administrative Agent shall have received, with a counterpart for each
Lender, a copy of the resolutions, in form and substance satisfactory
to the Administrative Agent, of the Board of Directors of each Loan
Party authorizing (i) the execution, delivery and performance of this
Agreement and the other Loan Documents to which it is a party, (ii) the
borrowings contemplated hereunder and (iii) the granting by it of the
Liens created pursuant to the Approval Orders, certified by the
Secretary or an Assistant Secretary of such Loan Party as of the
Closing Date, which certificate shall be in form and substance
satisfactory to the Administrative Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked
or rescinded.
(d) Incumbency Certificates. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of
each Loan Party, dated the Closing Date, as to the incumbency and
signature of the officers of such Loan Party executing any Loan
Document satisfactory in form and substance to the Administrative
Agent, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of such Loan Party.
(e) Corporate Documents. The Administrative Agent shall have
received, with a counterpart for each Lender, true and complete copies
of the certificate of incorporation and by-laws of each Loan Party,
certified as of the Closing Date as
-18-
24
complete and correct copies thereof by the Secretary or an Assistant
Secretary of such Loan Party.
(f) Good Standing Certificates. The Administrative Agent shall
have received, with a copy for each Lender, certificates dated as of a
recent date from the Secretary of State or other appropriate authority,
evidencing the good standing of each Loan Party in the jurisdiction of
its organization.
(g) Fees. The Administrative Agent and the Lenders shall have
received the fees to be received on the Closing Date, as set forth in a
letter of even date herewith, and shall have received reimbursement for
all costs and expenses in accordance herewith.
(h) Legal Opinions. The Administrative Agent shall have
received, with a counterpart for each Lender, the executed legal
opinions of Young ▇▇▇▇▇▇▇ Stargatt & ▇▇▇▇▇▇ and Gardere & ▇▇▇▇▇, LLP,
counsel to the Borrower and the other Loan Parties, substantially in
the form of Exhibit F. Such legal opinion shall cover such other
matters incident to the transactions contemplated by this Agreement as
the Administrative Agent may reasonably require.
(i) Guarantee Expenses. The obligations of the Guarantors
under the Guarantee (the "Guarantor Obligations") shall constitute
allowed administrative expenses in each Guarantor's Case having
priority over all other administrative expenses of the kinds specified
in Sections 503(b) or 507(b) of the Bankruptcy Code and unsecured
claims, other than Guarantor Carve-Out Expenses, and shall be paid as
ordinary course expenses during each Guarantor's Case without notice,
hearing or court approval. The doctrine of marshaling shall not be
available or applicable with respect to the payment of any Guarantor
Obligations or any enforcement of remedies by the Administrative Agent
and the Lenders.
(j) Approval Orders. The Interim Order and the Guarantee
Orders, in form and substance satisfactory to the Lenders, shall be in
effect and provide that no Avoidance Action may be commenced by any
person after the later of (i) 60 days following the Petition Date or
(ii) the date on which the United States Trustee forms the official
committee of unsecured creditors.
(k) Liens. The Approval Orders shall create in favor of the
Administrative Agent for the benefit of the Lenders a first priority
perfected security interest in all "Collateral" described in the Order,
other than as provided in the Interim Order during its pendency and the
Final Order during its pendency.
(l) Review of Bankruptcy Filings. The Administrative Agent and
each of the Lenders shall have reviewed and approved all documents and
pleadings submitted to the Bankruptcy Court with respect to the interim
and final approval of this Loan Agreement.
(m) Weekly Budget. The Administrative Agent and each of the
Lenders shall have reviewed and approved the most recent Weekly Budget
of the
-19-
25
Borrower covering, on a week-by-week basis, a period of four weeks from
the Petition Date.
(n) Capital Structure. The capital structure of the Borrower
and the Guarantors shall be satisfactory to the Administrative Agent
and the Lenders.
(o) Reserve Report. The Administrative Agent and the Lenders
shall have received an engineer's report with respect to proven
reserves of the Borrower, which shall be in form and substance
satisfactory to the Administrative Agent and the Lenders.
(p) Representations and Warranties. Each of the
representations and warranties made by the Borrower and the other Loan
Parties in or pursuant to the Loan Documents shall be true and correct
in all material respects on and as of such date as if made on and as of
such date.
(q) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Loans requested to be made on such date.
(r) Additional Matters. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement, the other Loan
Documents shall be satisfactory in form and substance to the
Administrative Agent, and the Administrative Agent shall have received
such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it
shall reasonably request.
5.2 Conditions to Second Advance of Loans. The agreement of each
Lender to make the second advance of its Loan is subject to the satisfaction,
immediately prior to or concurrently with the making of the second advance of
such Loan, of the following conditions precedent:
(a) The Final Order, in form and substance satisfactory to the
Administrative Agent and the Lenders shall have been entered by the
Bankruptcy Court;
(b) The Borrower and the Guarantors shall have each filed a
Plan of Reorganization in their respective Chapter 11 Cases, each in
form and substance satisfactory to the Administrative Agent and the
Lenders;
(c) no Event of Default has occurred and is then continuing;
(d) all representations and warranties contained in this
Agreement or any other Loan Documents are true and correct in all
material respects; and
(e) no change in circumstances shall have occurred that could
reasonably be expected to have a Material Adverse Effect.
-20-
26
5.3 Release of Funds from Cash Collateral Account. The
Borrower shall be permitted to withdraw funds from the Cash Collateral Account
to pay expenses of the Borrower in accordance with the Weekly Budget so long as,
as of the date of such withdrawal:
(a) no Event of Default has occurred and is continuing, or
will occur as a result of such withdrawal;
(b) all representations and warranties contained in this
Agreement or any other Loan Documents are true and correct in all material
respects; and
(c) no change in circumstances has occurred that could
reasonably be expected to have a Material Adverse Effect.
If an Event of Default has occurred and is continuing, the Required Lenders may
direct the Administrative Agent to no longer honor or permit withdrawals by the
Borrower from the Cash Collateral Account.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any of the
Commitments remain in effect or any amount is owing to any Lender or the
Administrative Agent hereunder or under any other Loan Document, the Borrower
shall and (except in the case of delivery of financial information, reports and
notices) shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event not later than 60
days after the end of each of the first three quarterly periods of each fiscal
year and 105 days after the last fiscal quarter of each fiscal year of the
Borrower, the unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and retained earnings and of cash
flows of the Borrower and its consolidated Subsidiaries for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments); and
(b) as soon as available, but in any event not later than 30
days after the end of each calendar month, the unaudited consolidated and
consolidating balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such month and the related unaudited consolidated and
consolidating statements of income and retained earnings and of cash flows of
the Borrower and its consolidated Subsidiaries for such month and the portion of
the fiscal year through the end of such month, setting forth in each case in
comparative form the figures for the previous year, certified by a Responsible
Officer as being fairly stated in all material respects (subject to normal
year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the
-21-
27
periods reflected therein and with prior periods (except as approved by such
accountants or officer, as the case may be, and disclosed therein).
6.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in Sections 6.1(a) and (b), a certificate of a Responsible Officer
(i) stating that, to the best of such Officer's knowledge, the Borrower during
such period has observed or performed all of its covenants and other agreements,
and satisfied every condition, contained in this Agreement and the other Loan
Documents to be observed, performed or satisfied by it, and that such Officer
has obtained no knowledge of any Default or Event of Default except as specified
in such certificate and (ii) showing in detail the calculations supporting such
Officer's certification of the Borrower's compliance with the requirements of
Section 7.1;
(b) with respect to each Weekly Budget after the Weekly Budget
entered with the Interim Order, not later than 20th day of each month, a
proposed Weekly Budget for the next succeeding month, which proposed Weekly
Budget shall become the Weekly Budget for such next succeeding month if approved
by the Required Lenders no later than the twenty-fifth day of such month (to the
extent modified by the Required Lenders, as so modified, the Weekly Budget for
such next succeeding month);
(c) promptly, such additional financial and other information
as any Lender may from time to time reasonably request; and
(d) within 14 days after the Closing Date, a listing of all
voluntary liens encumbering the assets of the Loan Parties, in form and
substance satisfactory to the Administrative Agent and the Lenders.
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its post-petition obligations of whatever nature and other obligations
approved by the Bankruptcy Court, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence. Continue
to engage in business of the same general type as now conducted by it and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except as otherwise
permitted pursuant to Section 7.5; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, be reasonably expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. Keep all property
useful and necessary in its business in good working order and condition;
maintain with financially sound and reputable insurance companies insurance on
all its property in at least such amounts and against at least such risks as are
usually insured against in the same general area by companies engaged in the
same or a similar business, which insurance shall name the Administrative Agent
-22-
28
as lender loss payee, in the case of property or casualty insurance, and as an
additional insured, in the case of liability insurance; and furnish to each
Lender, upon written request, full information as to the insurance carried.
6.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants.
6.7 Notices. From and after the Closing Date, promptly give
notice to the Administrative Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries or
(ii) litigation, investigation or proceeding which may exist at any
time between the Borrower or any of its Subsidiaries and any
Governmental Authority, which in either case, if not cured or if
adversely determined, as the case may be, could reasonably be expected
to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or
any of its Subsidiaries in which the amount involved is $1,000,000 or
more and not covered by insurance or in which injunctive or similar
relief is sought;
(d) of the acquisition by any Loan Party of any property
or interest in property (including, without limitation, real property),
that is not subject to a perfected Lien in favor of the Administrative
Agent pursuant to the Approval Orders;
(e) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know
thereof: (i) the occurrence or expected occurrence of any Reportable
Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC
or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the
Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the terminating, Reorganization
or Insolvency of, any Plan; and
(f) any development or event which has had or could
reasonably be expected to have a Material Adverse Effect.
-23-
29
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
6.8 Environmental Laws.
(a) Comply with, and ensure compliance by all tenants and
subtenants, if any, with, all applicable Environmental Laws in all material
respects and obtain and comply in all material respects with and maintain, and
ensure that all tenants and subtenants obtain and comply with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws in all material respects.
(b) Conduct and complete in all material respects all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws.
6.9 Year 2000 Covenants. No later than the Closing Date, the
Borrower and its Subsidiaries shall review the areas within their business and
operations which could be adversely affected by, and shall have developed or be
developing a program to address on a timely basis, the Year 2000 Problem, and
shall have made or be making related appropriate inquiry of material suppliers
and vendors. From time to time, at the request of the Administrative Agent, the
Borrower and its Subsidiaries shall provide to the Administrative Agent such
updated information or documentation as is requested regarding the status of
their efforts to address the Year 2000 Problem.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any amount is
owing to any Lender or the Administrative Agent hereunder or under any other
Loan Document, the Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:
7.1 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary;
(c) Indebtedness secured by Liens permitted under Section 7.2;
and
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.1 and any refinancings, refundings, renewals or extensions thereof.
7.2 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except as otherwise provided in the Interim Order during
its pendency and the Final Order during its
-24-
30
pendency and for Liens which are subordinate to the Liens created by the
Approval Orders in favor of the Administrative Agent for the benefit of the
Lenders, and except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its Subsidiaries,
as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
(i) are not overdue for a period of more than 60 days or which are being
contested in good faith by appropriate proceedings or (ii) are subject to the
automatic stay in the Borrower's Chapter 11 Case;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business; and
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the Borrower or such Subsidiary.
7.3 Limitation on Guarantee Obligations. Create, incur, assume
or suffer to exist any Guarantee Obligation except for Guarantee Obligations in
existence on the date hereof and listed on Schedule 7.3.
7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any one or more wholly
owned Subsidiaries of the Borrower (provided that the wholly owned Subsidiary or
Subsidiaries shall be the continuing or surviving corporation); and
(b) any wholly owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or any other wholly owned Subsidiary of the Borrower.
7.5 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of
-25-
31
any Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to
any Person other than the Borrower or any wholly owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out
property in the ordinary course of business;
(b) the sale or other disposition of any property (including
hydrocardons) in the ordinary course of business;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection with the
compromise or collection thereof; and
(e) as permitted by Section 7.4(b).
7.6 Limitation on Dividends. Declare or pay any dividend
(other than dividends payable solely in common stock of the Borrower) on, or
make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Capital Stock of the Borrower or any
warrants or options to purchase any such Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Borrower or
any Subsidiary.
7.7 Limitation on Capital Expenditures. Make or commit to make
(by way of the acquisition of securities of a Person or otherwise) any
expenditure in respect of the purchase or other acquisition of fixed or capital
assets (excluding any such asset acquired in connection with normal replacement
and maintenance programs properly charged to current operations) except for
expenditures in the current Weekly Budget; provided that in no event shall the
Borrower make Capital Expenditure in connection with new oil and gas fields or
▇▇▇▇▇ or other exploration activity, other than the drilling of proven oil and
gas fields and ▇▇▇▇▇ or prospect areas, in each case as described on Schedule
7.11.
7.8 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person,
except :
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents; and
(c) investments by the Borrower in any Subsidiary and
investments by such Subsidiary in the Borrower and in other Subsidiaries of the
Borrower.
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments. (a) Make any optional payment or prepayment on or redemption or
purchase of any Indebtedness (other than the Loans) and (b) amend, modify or
change, or consent or agree to any
-26-
32
amendment, modification or change to any of the terms any Indebtedness (other
than any such amendment, modification or change which would extend the maturity
or reduce the amount of any payment of principal thereof or which would reduce
the rate or extend the date for payment of interest thereon).
7.10 Limitation on Transactions with Affiliates. Except as set
forth on Schedule 7.10, enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of property or the rendering
of any service, with any Affiliate unless such transaction is (a) otherwise
permitted under this Agreement, (b) in the ordinary course of the Borrower's or
such Subsidiary's business and (b) upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary, as the case may be, than it would
obtain in a comparable arm's length transaction with a Person which is not an
Affiliate.
7.11 Limitation on Lines of Business; Limitation on Drilling
Activity.
(a) Enter into any business, either directly or through any
Subsidiary, except for those businesses in which the Borrower and its
Subsidiaries are engaged on the date of this Agreement.
(b) Engage in any drilling other than the drilling of proven
oil and gas fields and ▇▇▇▇▇ or prospect areas, in each case as described on
Schedule 7.11 or in a Weekly Budget.
7.12 Governing Documents. Amend its certificate of
incorporation (except to increase the number of authorized shares of common
stock), partnership agreement or other Governing Documents, without the prior
written consent of the Required Lenders, which shall not be unreasonably
withheld or delayed.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Loan when due in accordance with the terms thereof or hereof; or the
Borrower shall fail to pay any interest on any Loan, or any other
amount payable hereunder or under the other Loan Documents, within five
days after any such interest or other amount becomes due in accordance
with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by
the Borrower or any other Loan Party herein or in any other Loan
Document or which is contained in any certificate, document or
financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall
prove to have been incorrect in any material respect on or as of the
date made or deemed made; or
(c) The Borrower shall default in the observance or
performance of any agreement contained in Section 7; or
-27-
33
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default
in any payment of principal of or interest of any Indebtedness (other
than the Loans) or in the payment of any Guarantee Obligation, beyond
the period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Indebtedness or Guarantee
Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity
or such Guarantee Obligation to become payable, and in each case, the
consequences of such default shall not be stayed by the Chapter 11
Cases; or
(f) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or
(g) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $500,000 or more,
and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the
entry thereof or shall not otherwise be stayed by the Chapter 11 Cases;
or
(h) The Lien created by the Approval Orders shall cease to be
enforceable and of the same effect and priority purported to be created
thereby; or
-28-
34
(i) Any Guarantee shall cease, for any reason, to be in full
force and effect or any Guarantor shall so assert; or
(j) Any Avoidance Action with respect to the Obligations or
any payments in respect thereof or with respect to the Collateral is
commenced by either the Borrower or a Guarantor against the
Administrative Agent or any Lender; or
(k) Any order shall be entered in any Chapter 11 Case which
(i) provides for the appointment of a trustee or an examiner with
expanded powers which is not reversed within thirty (30) days of the
entry thereof; (ii) dismisses such Chapter 11 Case or converts such
Chapter 11 Case into a Chapter 7 case; (iii) confirms a plan of
reorganization that is not a Plan of Reorganization as defined herein;
(iv) without the consent of the Lenders, revokes, reverses, stays or
otherwise modifies any Approval Order, including without limitation,
any order approving the granting of any Lien on the Collateral or
granting any expense a priority equal to or greater than the priority
granted to the Lenders (any of (i) through (iv), a "Case Order"); (v)
in the reasonable judgment of the Lenders, impairs or adversely affects
the Collateral, the Guarantee, or the likelihood that the Borrower will
discharge in full its obligations to the Lenders under this Agreement
in a timely manner; or (vi) stays or restrains the effectiveness of any
provision of this Agreement or the pledge of the Collateral; or
(l) A motion for any Case Order shall be made by (i) the
Official Committee, which is not withdrawn within thirty (30) days
following the date on which such motion is made, (ii) the Borrower or
any Guarantor or (iii) any other Person and (x) the Official Committee
shall have consented thereto or shall have failed to contest such
motion within thirty (30) days following the date on which such motion
is made or (y) the Borrower or any Guarantor shall have consented
thereto or shall have failed to contest such motion within thirty (30)
days following the date on which such motion is made; or
(m) The Borrower and the Guarantors fail to file a Plan of
Reorganization in their respective Chapter 11 Cases within thirty (30)
days following the Closing Date;
(n) The entry of an order authorizing the borrower or any
guarantor to obtain financing from BNY Financial Corporation ("BNY")
and/or use cash collateral of BNY on terms and conditions which the
Lenders do not expressly consent to in writing (provided, however, the
Lenders will have no right to withhold such consent to an order which
grants to BNY a super priority claim pursuant to Bankruptcy Code
Section 507(b) on a pari passu basis with such claim granted to the
Lenders under the Interim Order);
then, and in any such Event of Default, with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower, declare the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement to be due and payable forthwith, whereupon the same shall
immediately become due and payable.
-29-
35
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the Administrative Agent of such Lender
under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the Administrative Agent, in such capacity, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of the Borrower to perform its obligations hereunder
or thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
9.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrower or any other Loan Party), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified in failing
-30-
36
or refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate or 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 or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance with a
request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
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 interests of the Lenders.
9.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower or any other Loan Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and the other
Loan Parties and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative 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 credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent hereunder or under the
other Loan Documents, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower or any other Loan
Party which may come into the possession of the Administrative Agent or any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
-31-
37
9.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Commitment Percentages in effect on the
date on which indemnification is sought, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Administrative Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Administrative Agent's gross negligence or willful misconduct. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.
9.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower and the other
Loan Parties as though the Administrative Agent were not the Administrative
Agent hereunder and under the other Loan Documents. With respect to the Loans
made by it, the Administrative Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent shall be
approved by the Borrower, whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement nor any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent may, from time to time, (a) enter
into with the Borrower written amendments, supplements or modifications hereto
and to the other Loan Documents for the purpose of adding any provisions to this
Agreement or the
-32-
38
other Loan Documents or changing in any manner the rights of the Lenders or of
the Borrower hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders or the Administrative Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) reduce the amount or extend the scheduled date of
maturity of any Loan or of any installment thereof, or reduce the stated rate of
any interest or fee payable hereunder or extend the scheduled date of any
payment thereof or increase the aggregate amount or extend the expiration date
of any Lender's Commitment, in each case without the consent of each Lender
affected thereby, or (ii) amend, modify or waive any provision of this Section
10.1 or reduce the percentage specified in the definition of Required Lenders or
Majority Lenders, or consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement and the other Loan
Documents or release all or substantially all of the Collateral or release all
or substantially all of the Guarantors from their obligations under the
Guarantees, in each case without the written consent of all the Lenders, or (ii)
amend, modify or waive any provision of Section 9 without the written consent of
the then Administrative Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Borrower, the Lenders, the Administrative Agent and all
future holders of the Loans. In the case of any waiver, the Borrower, the
Lenders and the Administrative Agent shall be restored to their former positions
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been electronically confirmed,
addressed as follows in the case of the Borrower and the Administrative Agent,
and as set forth in Schedule I in the case of the other parties hereto, or to
such other address as may be hereafter notified by the respective parties
hereto:
The Borrower: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention ▇▇ ▇▇▇▇▇▇▇
Fax: (281) 986 - 8865
Telephone: (281) 987 - 8600
-33-
39
The Administrative
Agent: Credit Suisse First Boston Management Corporation
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Section 2.3 shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Administrative Agent and the Lenders for all their
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, (b) to
pay or reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of counsel
to each Lender and of counsel to the Administrative Agent, (c) to pay,
indemnify, and hold each Lender and the Administrative Agent harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including,
without
-34-
40
limitation, any of the foregoing relating to the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
the Borrower, any of its Subsidiaries, any Guarantor or any of the Properties
(all the foregoing in this clause (d), collectively, the "indemnified
liabilities"), provided, that the Borrower shall have no obligation hereunder to
the Administrative Agent or any Lender with respect to indemnified liabilities
arising from (i) the gross negligence or willful misconduct of the
Administrative Agent or any such Lender or (ii) legal proceedings commenced
against the Administrative Agent or any such Lender by any security holder or
creditor thereof arising out of and based upon rights afforded any such security
holder or creditor solely in its capacity as such. The agreements in this
Section shall survive repayment of the Loans and all other amounts payable
hereunder.
10.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Administrative Agent and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants") participating
interests in any Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. The Borrower
agrees that if amounts outstanding under this Agreement are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under this Agreement, provided that, in purchasing such
participating interest, such Participant shall be deemed to have agreed to share
with the Lenders the proceeds thereof as provided in Section 10.7(a) as fully as
if it were a Lender hereunder.
(c) Any Lender may, in accordance with applicable law, at any
time and from time to time assign to any Lender or any affiliate thereof or,
with the consent of the Administrative Agent (which shall not be unreasonably
withheld), to an additional bank or financial institution (an "Assignee") all or
any part of its rights and obligations under this Agreement and the other Loan
Documents pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit G, with appropriate completions (an "Assignment and Acceptance"),
executed by such Assignee, such assigning Lender (and, in the case of an
Assignee that is not then a Lender or an affiliate thereof, by the
Administrative Agent) and delivered to the Administrative Agent for its
acceptance and recording in the Register. Upon such execution, delivery,
acceptance and recording, from and after the effective date determined
-35-
41
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with Commitments as set
forth therein, and (y) the assigning Lender thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such assigning Lender shall cease to be a party hereto).
(d) The Administrative Agent, on behalf of the Borrower, shall
maintain at the address of the Administrative Agent referred to in Section 10.2
a copy of each Assignment and Acceptance delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Lenders and
the Commitment of, and principal amount of the Loans owing to, each Lender from
time to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent and the Lenders may
(and, in the case of any Loan or other obligation hereunder not evidenced by a
Note, shall) treat each Person whose name is recorded in the Register as the
owner of a Loan or other obligation hereunder as the owner thereof for all
purposes of this Agreement and the other Loan Documents, notwithstanding any
notice to the contrary. Any assignment of any Loan or other obligation hereunder
not evidenced by a Note shall be effective only upon appropriate entries with
respect thereto being made in the Register. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by the Administrative Agent), the
Administrative Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
any and all financial information in such Lender's possession concerning the
Borrower and its Affiliates which has been delivered to such Lender by or on
behalf of the Borrower pursuant to this Agreement or which has been delivered to
such Lender by or on behalf of the Borrower in connection with such Lender's
credit evaluation of the Borrower and its Affiliates prior to becoming a party
to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including, without limitation,
any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve
Bank in accordance with applicable law.
10.7 Set-off. In addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right, with prior notice to
the Borrower only to the extent required by applicable law, any other such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the
-36-
42
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
set-off and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission of signature pages hereto), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
-37-
43
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 10.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential damages.
10.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Borrower and the other Loan Parties, on one hand, and
Agent and Lenders, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15 Intercompany Loans. It is expressly understood,
acknowledged and agreed by the Borrower that Firstar Bank of Minnesota, N.A. as
Trustee (together with its successors and assigns, the "Indenture Trustee")
under the Indenture issued by TEC and dated as of June 13, 1997, may, in its
sole discretion and without the consent of any Person, take all actions it deems
necessary or appropriate in order to (a) collect and receive any and all amounts
payable in respect of the obligations of the Borrower under the Loan Agreement
dated as of June 13, 1997 between the TEC and the Borrower (as the same may be
amended, modified or supplemented from time to time) and each promissory note
issued thereunder by the Borrower and all security instruments related thereto
(collectively, the "IC Documents") and (b) enforce or effect all security
interest under the IC Documents in accordance with and to the extent provided in
the IC Documents. Such actions shall include, but not be limited to, enforcing
or effecting any term or provision of the IC Documents or advising, instructing
or otherwise directing TEC's agents with respect to the enforcement of any term
or provision of the IC Documents. The Indenture Trustee shall have the sole
right to take all such actions until the Required Lenders or the Indenture
Trustee otherwise agree.
-38-
44
10.16 Concerning the Collateral. The Borrower hereby grants a
lien on and security interest in all of the Borrower's right title and interest
in and to the Collateral to secure the full payment and performance of the
Obligations.
[Signature Pages Follow]
-39-
45
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
TRANSTEXAS GAS CORPORATION, Borrower
By:
-----------------------------------------
Title:
CREDIT SUISSE FIRST BOSTON
MANAGEMENT CORPORATION
as Administrative Agent and as a Lender
By:
-----------------------------------------
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & CO. L.P., Lender
By:
-----------------------------------------
Title:
OAKTREE CAPITAL MANAGEMENT L.L.P., Lender
By:
-----------------------------------------
Title:
Credit Agreement: Signature Page
46
EXHIBIT D
CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of
April __, 1999, among TransTexas Gas Corporation, the lenders parties thereto,
and Credit Suisse First Boston Management Corporation, as administrative agent
(as amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"). Pursuant to the provisions of Section 3.5(b)(i)(B) of the
Credit Agreement, the undersigned hereby certifies that it is not a "bank" as
such term is defined in Section 881(c)(3)(A) of the Internal Revenue Code of
1986, as amended.
[NAME OF LENDER]
By:
-------------------------------------
Title:
Date:___________________, 19__
