1
EXHIBIT 10.21
SUBORDINATED
CREDIT AGREEMENT
BETWEEN
THE MERIDIAN RESOURCE CORPORATION
AS BORROWER
AND
FORTIS CAPITAL CORP.
AS LENDER
DATED AS OF JANUARY 5, 2001
$25,000,000
2
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS....................................................1
SECTION 1.01. Basic Definitions......................................1
SECTION 1.03 Other Definitions......................................4
ARTICLE II LOANS.........................................................5
SECTION 2.01. Loans..................................................5
SECTION 2.02. Note...................................................5
SECTION 2.03. Repayment of Loans.....................................5
SECTION 2.04. Interest...............................................5
SECTION 2.05. Borrowing Procedure....................................5
SECTION 2.06. Prepayments Conversion and Continuations of Loans......6
SECTION 2.07. Minimum Amounts........................................6
SECTION 2.08. Certain Notices........................................6
SECTION 2.09. Use of Proceeds........................................7
SECTION 2.10. Fees...................................................7
SECTION 2.11. Computations...........................................7
SECTION 2.12. Reduction or Termination of Commitment.................7
SECTION 2.13. Payments...............................................7
ARTICLE III CHANGE IN CIRCUMSTANCES......................................7
SECTION 3.01. Increased Cost and Reduced Return......................7
SECTION 3.02. Limitation on Eurodollar Loans.........................8
SECTION 3.03. Illegality.............................................9
SECTION 3.04. Compensation...........................................9
SECTION 3.05. Taxes..................................................9
ARTICLE IV CONDITIONS...................................................11
SECTION 4.01. Initial Loan..........................................11
SECTION 4.02. Each Loan.............................................11
ARTICLE V REPRESENTATIONS AND WARRANTIES................................12
SECTION 5.01. Existence.............................................12
SECTION 5.02. Financial Statements..................................12
SECTION 5.03. Authorization No Breach...............................12
SECTION 5.04. Litigation............................................13
SECTION 5.05. Enforceability........................................13
SECTION 5.06. Approvals.............................................13
SECTION 5.07. Disclosure............................................13
SECTION 5.08. Senior Facility.......................................13
ARTICLE VI COVENANTS....................................................13
SECTION 6.01. Information...........................................13
SECTION 6.02. Obligations...........................................14
SECTION 6.03 Financial Covenants....................................14
ARTICLE VII DEFAULT.....................................................15
SECTION 7.01. Events of Default.....................................15
SECTION 7.02. Remedies..............................................16
3
ARTICLE VIII MISCELLANEOUS..............................................16
SECTION 8.01. Expenses..............................................16
SECTION 8.02. Indemnification.......................................16
SECTION 8.03. Subordination Agreement...............................17
SECTION 8.04. Right of Set-off......................................17
SECTION 8.05. No Waiver: Cumulative Remedies........................17
SECTION 8.06. Successors and Assigns................................17
SECTION 8.07. Amendments............................................18
SECTION 8.08. Notices...............................................18
SECTION 8.09. Counterparts..........................................18
SECTION 8.10. Severability..........................................18
SECTION 8.11. Controlling Agreement.................................18
SECTION 8.12. Survival..............................................19
SECTION 8.13. Governing Law.........................................19
SECTION 8.14. WAIVER OF JURY TRIAL..................................20
SECTION 8.15. ENTIRE AGREEMENT......................................20
4
SUBORDINATED CREDIT AGREEMENT (this "Agreement") dated as of January 5,
2001, between THE MERIDIAN RESOURCE CORPORATION, a Texas corporation (the
"Borrower"), and FORTIS CAPITAL CORP., a Connecticut corporation (the "Lender").
The parties hereto agree as follows:
ARTICLE IDEFINITIONS
SECTION 1.01. Basic Definitions. As used in this Agreement, the
following terms have the following meanings:
"Applicable Base Rate Margin" means 1.50%.
"Applicable Eurodollar Rate Margin" means 3.50%.
"Availability Period" means from the date of this Agreement to and
including January 31, 2001.
"Commitment" means the obligation of the Lender to make Loans to the
Borrower in an aggregate principal amount at any time outstanding up to but not
exceeding $25,000,000, as the same may be reduced or terminated pursuant to this
Agreement.
"Principal Office" means the office of the Lender located at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
"Senior Facility" means the Amended and Restated Credit Agreement dated
May 22, 1998, as amended from time to time thereafter, among the Borrower, the
several lenders from time to time parties thereto, The Chase Manhattan Bank, as
the Administrative Agent for the lenders party thereto (in such capacity, the
"Administrative Agent"), Toronto Dominion (Texas), Inc. and Fortis Capital
Corp., as co-arrangers (each in such capacity, a "Co-Arranger"), and Toronto
Dominion (Texas), Inc., as documentation agent.
"Termination Date" means December 31, 2001.
SECTION 1.02. Additional Definitions. As used in this Agreement, the
following terms have the following meanings.
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Lender to be equal to the quotient
obtained by dividing (a) the Eurodollar Rate for such Eurodollar Loan for such
Interest Period by (b) 1 minus the Reserve Requirement for such Eurodollar Loan
for such Interest Period.
"Base Rate" means, for any day, the rate per annum equal to the higher
of (a) the Federal Funds Rate for such day plus one-half of one percent (.5%)and
(b) the Prime Rate for such day. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or Federal Funds Rate.
1
5
"Base Rate Loans" means Loans that bear interest at rates based upon
the Base Rate.
"Business Day" means any day except a Saturday, Sunday, or other day on
which Lenders in the State where the Principal Office is located are authorized
by law to close and, if the applicable Business Day relates to Eurodollar Loans,
on which commercial banks in London are open for international business
(including dealings in Dollar deposits in the London inter-bank market).
"Committed Loans" has the meaning specified in Section 2.01.
"Continue", "Continuation", and "Continued" shall refer to a
continuation pursuant to Section 2.07 of a Eurodollar Loan or Money Market Loan
as a Loan of the same Type from one Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to the conversion
pursuant to Section 2.07 or Article III of one Type of Loan into another Type of
Loan.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments, or similar debtor relief laws from time to time in effect affecting
the rights of creditors generally.
"Default" means an Event of Default or the occurrence of an event or
condition that with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means, with respect to any principal of any Loan or any
other amount payable by the Borrower under this Agreement or any other Loan
Documents that is not paid when due (whether at stated maturity, by
acceleration, or otherwise), a rate per annum during the period for and
including the due date to but excluding the date on which such amount is paid in
full equal to two percent (2%) plus the rate on Base Rate Loans or Eurodollar
Loans specified in Section 2.04 depending upon which type of Loan is then in
effect.
"Dollars" and "$" mean lawful money of the United States of America.
"Eurodollar Loans" means Loans that bear interest at rates based upon
the Adjusted Eurodollar Rate.
"Event of Default" has the meaning specified in Section 7.01.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "Eurodollar Rate" shall mean,
for any Eurodollar Loan for any Interest Period therefor, the rate per annum
appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to such
Interest Period. If for any reason such rate is not available, the term
2
6
"Eurodollar Rate" shall mean, for any Eurodollar Loan for any Interest Period
therefor, the rate for deposits in Dollars at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Lender of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions an the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Lender on such
day on such transactions as determined by the Lender.
"Financial Statements" means the audited consolidated financial
statements of the Borrower and the Subsidiaries dated as of December 31, 1999,
and the unaudited consolidated financial statements for the quarterly period
ended September 30, 2000.
"Governmental Authority" means any nation or government, any state or
political subdivision thereof, any central Lender (or similar monetary or
regulatory authority), and any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government.
"Interest Period" means with respect to any Eurodollar Loan, each
period commencing on the date such Eurodollar Loan is made or Converted from a
Base Rate Loan or the last day of the next preceding Interest Period with
respect to such Eurodollar Loan, and ending on the numerically corresponding day
in the first, second, third, or sixth calendar month thereafter, as the Borrower
may select as provided in Section 2.08, except that each such Interest Period
which commences on the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate subsequent
calendar month. Notwithstanding the foregoing: (a) each Interest Period which
would otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (or, in the case of Eurodollar Loans, if such succeeding
Business Day falls in the next succeeding calendar month, on the next preceding
Business Day); (b) any Interest Period which would otherwise extend beyond the
Termination Date shall end on the Termination Date; (c) no more than 3 Interest
Periods for Eurodollar Loans shall be in effect at the same time; and (d) no
Interest Period shall have a duration of less than 1 month and, if the Interest
Period for any Eurodollar Loan would otherwise be a shorter period, such
Eurodollar Loan shall not be available hereunder.
"Loan Documents" means this Agreement and all other documents,
instruments, and agreements executed or delivered pursuant to or in connection
with this Agreement, as the same may be amended, modified, renewed, extended, or
supplemented.
3
7
"Loans" means Committed Loans.
"Material Adverse Effect" means a material adverse effect on (a) the
financial condition or business operations of the Borrower and the Subsidiaries
taken as a whole, (b) the ability of the Borrower to pay and perform its
obligations under any Loan Document, or (c) the validity or enforceability of
any Loan Document or the rights and remedies of the Lender thereunder.
"Note" and "Notes" have the meanings specified in Section 2.02.
"Person" means any individual, corporation, company, joint venture,
association, partnership, trust, unincorporated organization, Governmental
Authority, or other entity.
"Prime Rate" means the per annum rate of interest announced from time
to time by The Chase Manhattan Bank as its prime rate, which rate may not be the
lowest rate of interest charged by such bank to its customers.
"Quarterly Date" means the last day of each March, June, September, and
December of each year, the first of which shall be the first such day after the
date of this Agreement.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including any marginal, special, supplemental, or emergency reserves)
are required to be maintained under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) by member
Lenders of the Federal Reserve System in New York City with deposits exceeding
one billion Dollars against "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by such
member Lenders with respect to (i) any category of liabilities which includes
deposits by reference to which the Adjusted Eurodollar Rate is to be determined,
or (ii) any category of extension of credit or other assets which include
Eurodollar Loans. The adjusted Eurodollar Rate shall be adjusted automatically
on and as of the effective date of any change in the Reserve Requirement.
"Subordination Agreement" means, the Subordination Agreement, dated the
date hereof, between the Lender, the Borrower and The Chase Manhattan Bank, as
agent for the lenders under the Senior Facility.
"Subsidiary" means, any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other Persons performing similar functions are at the
time directly or indirectly owned by the Borrower.
"Type" means any type of Loan (i.e., Base Rate Loan or Eurodollar
Loan).
SECTION 1.03 Other Definitions. All capitalized terms used in this
Agreement but not otherwise defined herein shall have the meaning ascribed
thereto in the Senior Facility.
4
8
ARTICLE II
LOANS
SECTION 2.01. Loans. Subject to the terms and conditions of this
Agreement, the Lender agrees to make one or more loans ("Committed Loan") to the
Borrower during the Availability Period, provided that the aggregate principal
amount of the Loans at any time outstanding to the Borrower shall not exceed the
amount of the Commitment.
SECTION 2.02. Note. The Loans made by the Lender to the Borrower shall
be evidenced by a single promissory note of the Borrower in substantially the
form of Exhibit A, dated the date such loan is funded, payable to the order of
the Lender in a principal amount equal to the Commitment as originally in effect
and otherwise duly completed (as from time to time amended, modified, renewed,
or extended, the "Note").
SECTION 2.03. Repayment of Loans. The Borrower shall pay to the Lender
on the Termination Date the outstanding principal amount of the Loans borrowed
by it.
SECTION 2.04. Interest. The Borrower shall pay to the Lender interest
on the unpaid principal amount of each Loan borrowed by it for the period
commencing on the date of such Loan to but excluding the date such Loan shall be
paid in full, at the following rates per annum:
(a) during the periods such Loan is a Base Rate Loan, the Base Rate
plus the Applicable Base Rate Margin, and;
(b) during the periods such Loan is a Eurodollar Loan, the Adjusted
Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
Notwithstanding the foregoing, the Borrower shall pay to the Lender interest at
the Default Rate on any principal of any Loan borrowed by it and (to the fullest
extent permitted by law) on any other amount payable by the Borrower under this
Agreement or any other Loan Document which is not paid in full when due (whether
at stated maturity, by acceleration, or otherwise), for the period from and
including the due date thereof to but excluding the date the same is paid in
full. Accrued interest on the Loans shall be due and payable as follows: (i) in
the case of Base Rate Loans, on each Quarterly Date; (ii) in the case of each
Eurodollar Loan, on the last day of the Interest Period with respect thereto
and, in the case of an Interest Period greater than three months, at three-month
intervals after the first day of such Interest Period; (iii) upon the payment or
prepayment of any Loan or the Conversion of any Loan to a Loan of another Type
(but only on the principal amount so paid, prepaid, or Converted); and (iv) on
the Termination Date; provided that interest payable at the Default Rate shall
be payable from time to time an demand.
SECTION 2.05. Borrowing Procedure. The Borrower shall give the Lender
notice of each borrowing by it hereunder in accordance with Section 2.08. Not
later than 2:00 p.m. (at the Principal Office) on the date specified for each
borrowing hereunder, the Lender will make available the amount of the Loan to be
made by it on such date to the Borrower by depositing the same, in immediately
available funds, in an account of the Borrower (designated by the Borrower)
maintained with The Chase Manhattan Bank in New York City, New York, in the
5
9
name of The Meridian Resource Corporation, account number 144-813684, or as
otherwise directed by the Borrower.
SECTION 2.06. Prepayments Conversion and Continuations of Loans.
Subject to Section 2.07, the Borrower shall have the right from time to time to
prepay the Loans borrowed by it, or to Convert all or part of a Loan borrowed by
it of one Type into a Loan of another Type or to Continue Eurodollar Loans
borrowed by it, provided that: (a) the Borrower shall give the Lender notice of
each such prepayment, Conversion or Continuation as provided in Section 2.08,
(b) Eurodollar Loans may only be Converted on the last day of the Interest
Period, and (c) except for Conversions into Base Rate Loans, no Conversions or
Continuations shall be made while a Default has occurred and is continuing.
SECTION 2.07. Minimum Amounts. Except for Conversions and prepayments
pursuant to Article III, each borrowing, each Conversion and each prepayment of
principal of the Loans shall be in an amount at least equal to $1,000.000.
Anything in this Agreement to the contrary notwithstanding, the aggregate
principal amount of Eurodollar Loans having the same Interest Period shall be at
least equal to $1,000,000.
SECTION 2.08. Certain Notices. Notices by the Borrower to the Lender of
a termination or reduction of the Commitment, of borrowings, Conversions,
Continuations and optional prepayments of Loans and of the duration of Interest
Periods shall be irrevocable and shall be effective only if received by the
Lender not later than 11:00 a.m. (local time at the Principal Office) on the
number of Business Days prior to the date of the relevant termination,
reduction, borrowing, Conversion, Continuation, or prepayment or the first day
of such Interest Period specified below:
Notice Number of Business
------
Days Prior
Termination or reduction of Commitment 2
Borrowing or prepaying of, or Conversions into, Base Rate Loans same day
Borrowing or prepaying of, Conversions into, Continuations as, or duration of 2
Interest Periods for, Eurodollar Loans
Each such notice of termination or reduction shall specify the amount of the
Commitment to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation, or optional prepayment shall specify (a) the amount
and Type of the Loan to be borrowed, Converted, Continued, or prepaid (and, in
the case of a Conversion, the Type of Loan to result from such Conversion), (b)
the date of borrowing, Conversion, Continuation or prepayment (which shall be a
Business Day), and (c) in the case of a borrowing of a Eurodollar Loan, or
Conversion to or Continuation of a Eurodollar Loan, the duration of the Interest
Period. In the event the Borrower fails to select the Type of Loan, or the
duration of any Interest Period for any Eurodollar Loan, within the time period
and otherwise as provided in this Section 2.08, such Loan (if outstanding
6
10
as a Eurodollar Loan) will be automatically Converted into a Base Rate Loan on
the last day of the preceding Interest Period for such Loan or (if outstanding
as a Base Rate Loan) will remain as, or (if not than outstanding) will be made
as, a Base Rate Loan.
SECTION 2.09. Use of Proceeds. The proceeds of the Loans shall be used
by the Borrower for the purpose of providing a portion of the Funds necessary to
repurchase shares of its common and preferred stock currently held by Shell USA,
and for general corporate purposes of the Borrower. The Borrower will not,
directly or indirectly, use any part of such proceeds for the purchasing or
carrying any margin stock within the meaning of Regulations U, T, or X of the
Board of Governors of the Federal Reserve System.
SECTION 2.10. Fees. The Borrower agrees to pay to the Lender such fees
as the Lender and Borrower may agree upon in writing in connection herewith.
SECTION 2.11. Computations. Interest and commitment fees payable by the
Borrower hereunder and under the other Loan Documents shall be computed on the
basis of a year of 360 days and the actual number of days elapsed (including the
first day but excluding the last day) occurring in the period for which payable.
SECTION 2.12. Reduction or Termination of Commitment. The Borrower
shall have the right to irrevocably terminate or reduce in part the unused
portion of the Commitment at any time and from time to time, provided that: (a)
the Borrower shall give notice of each such termination or reduction as provided
in Section 2.08; and (b) each partial reduction shall be in an aggregate amount
at least equal to $1,000,000.
SECTION 2.13. Payments. All payments of principal, interest, and other
amounts to be made by the Borrower under this Agreement and other Loan Documents
shall be made to the Lender at the principal Office in Dollars and in
immediately available funds, without setoff, deduction, or counterclaim.
Whenever any payment under this Agreement or any other Loan Document shall be
stated to be due on a day that is not a Business Day, such payment may be made
on the next succeeding Business Day, and such extension of time in such case
shall be included in the computation of interest, as applicable.
ARTICLE III
CHANGE IN CIRCUMSTANCES
SECTION 3.01. Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of any applicable law,
rule, or regulation, or any change in any applicable law, rule, or regulation,
or any change in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by the Lender with any request or directive (whether or
not having force of law) of any such Governmental Authority:
7
11
(i) shall subject the Lender to any tax, duty, or other charge
with respect to any Eurodollar Loans, the Note executed by the
Borrower, or its obligation to make Eurodollar Loans, or change the
basis of taxation of any amounts payable to the Lender under this
Agreement or the Note in respect of any Eurodollar Loans (other than
taxes imposed on the overall net income of the Lender by the
jurisdiction in which the Lender has its Principal Office);
(ii) shall impose or modify any reserve, special deposit, or
similar requirement (other than the Reserve Requirement utilized in,
the determination of the Adjusted Eurodollar Rate) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, the Lender (including the Commitment);
or
(iii) shall impose on the Lender or on the London interbank
market any other condition affecting this Agreement or the Note or any
of such extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to the Lender of
making, Converting into, Continuing, or maintaining any Eurodollar Loans or to
reduce any sum received or receivable by the Lender under this Agreement or the
Note executed by the Borrower with respect to any Eurodollar Loans or Money
Market Loans, then the Borrower shall pay to the Lender on demand such amount or
amounts as will compensate the Lender for such increased cost or reduction.
(b) If the Lender shall have determined that the adoption of any
applicable law, rule, or regulation regarding capital adequacy or any change
therein or in the interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof, or any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such Governmental Authority, has or would have the effect of
reducing the rate of return on the capital of the Lender or any corporation
controlling the Lender as a consequence of the Lender's obligations hereunder to
a level below that which the Lender or such corporation could have achieved but
for such adoption, change, request, or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by the Lender to
be material, then from time to time upon demand the Borrower shall pay to the
Lender such additional amount or amounts as will compensate the Lender for such
reduction.
(c) A certificate of the Lender claiming compensation under this
Section and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of clearly demonstrable error. In
determining such amount, the Lender may use any reasonable averaging and
attribution methods.
SECTION 3.02. Limitation on Eurodollar Loans. If on or prior to the
first day of any Interest Period for any Eurodollar Loan:
(a) the Lender determines (which determination shall be conclusive)
that by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate, for such
Interest Period; or
8
12
(b) the Lender determines (which determination shall be conclusive)
that the Adjusted Eurodollar Rate will not adequately and fairly reflect the
cost to the Lender of funding Eurodollar Loans for such Interest Period;
then the Lender shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lender shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Loans or Convert such Loans into Base Rate Loans in accordance with
the terms of this Agreement.
SECTION 3.03. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for the Lender to make,
maintain, or fund Eurodollar Loans hereunder, then the Lender shall promptly
notify Borrower thereof and the Lender's obligation to make or Continue
Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans shall be
suspended until such time as the Lender may again make, maintain, and fund
Eurodollar Loans and the Borrower shall, on the last day of the Interest Period
for each outstanding Eurodollar Loan (or earlier, if required by law), either
prepay such Loans or Convert such Loans into Base Rate Loans in accordance with
the terms of this Agreement.
SECTION 3.04. Compensation. Upon the request of the Lender, the
Borrower shall pay to the Lender such amount or amounts as shall be sufficient
(in the reasonable opinion of the Lender) to compensate it for any loss, cost,
or expense incurred by it as a result of:
(a) any payment, prepayment or Conversion of a Eurodollar Loan for any
reason (including, without limitation, the acceleration of the Loans pursuant to
Section 7.02) on a date other than the last day of an Interest Period for such
Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any conditions precedent specified in Article IV to
be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Loan on the
date for such borrowing, Conversion, Continuation, or prepayment specified in
the relevant notice of borrowing, prepayment, Continuation, or Conversion under
this Agreement.
Without limiting the effect of the preceding sentence, such
compensation shall include any loss, cost, or expense incurred in obtaining,
liquidating, or. employing deposits from third parties (including loss of
margin).
SECTION 3.05. 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, nor
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes, franchise taxes (imposed in
lieu of net income taxes) and doing business taxes imposed on the Lender as a
result of a present or former connection between such Lender and the
jurisdiction of the Governmental
9
13
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the
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 Lender hereunder or under the Note, the amounts so payable to the
Lender shall be increased to the extent necessary to yield to the 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 Non-U.S. Lender if such Non-U.S. Lender fails to comply with the
requirements of paragraph (b) of this subsection. Whenever any Non-Excluded
Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the account of the Lender, a certified copy of an
original official receipt received by the Borrower showing payment thereof. If,
when the Borrower is required by this subsection 3.05(a) to pay any Non-Excluded
Taxes, the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Lender the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Lender for any incremental taxes, interest or penalties that may become
payable by any Lender as a result of any such failure. The agreements in this
subsection shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
(b) Each future lender hereunder (or Transferee) that is not a citizen
or resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of
America, or any estate or trust that is subject to federal income taxation
regardless of the source of its income (a "Non-U.S. Lender") shall deliver to
the Borrower (or, in the case of a Participant, to the Lender from which the
related participation shall have been purchased) two copies of either U.S.
Internal Revenue Service form 1001 or Form 4224 (or successor forms, if
applicable), or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the code with respect
to payments of "portfolio interest," a FormW-8, or any subsequent versions
thereof or successors thereto (and, if such Non-U.S. Lender delivers a Form W-8,
an annual certificate representing that such Non-U.S. Lender (i) is not a "bank"
for purposes of Section 881(c) of the code (and is not subject to regulatory or
other legal requirements as a bank in any jurisdiction, and has not been treated
as a bank in any filing with or submission made to any Governmental Authority or
rating agency), (ii) is not a 10% shareholder (within the meaning of Section
871(h(3)(B) of the code) of the Borrower and (iii) is not a controlled foreign
corporation related to the Borrower (within the meaning of Section 864(d)(4) of
the Code)), properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from U.S. federal withholding tax on all payments by
the Borrower under this Agreement and the other Loan Documents, along with such
other additional forms as the Borrower (or, in the case of a Participant, the
Lender from which the related participation shall have been purchased) may
reasonably request to establish the availability of such exemption. Such forms
shall be delivered by each Non-U.S. Lender on or before the date it becomes a
party to this Agreement (or, in the case of any Participant, on or before the
date such Participant purchases the related participation).
10
14
(c) The Borrower agrees to indemnify the Lender for the full amount of
Taxes and Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this Section
3.05) paid by the Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, except for any Taxes or
Other Taxes that are due as a result of or in connection with a Lender's failure
to comply with Section 3.05(b).
ARTICLE IV
CONDITIONS
SECTION 4.01. Initial Loan. The obligation of the Lender to make the
initial Loan to the Borrower hereunder is subject to the satisfaction of the
following conditions:
(a) receipt by the Lender of the Note duly executed by the Borrower,
complying with the provisions of Section 2.02, and such other Loan Documents as
the Lender may reasonably request;
(b) receipt by the Lender of all documents that the Lender may request
relating to the existence of the Borrower, the authorization for and the
validity of the Loan Documents, and any other matters relevant thereto, all in
form and substance satisfactory to the Lender;
(c) approval by the requisite Lenders under the Senior Facility of the
incurrence of the indebtedness of the Borrower under this Agreement, and
delivery of a certificate from the Administrative Agent attesting to such
approval;
(d) execution of a subordination agreement among the Borrower, the
Lenders under the Senior Facility and the Lender on terms and conditions
satisfactory to the Lender; and
(e) receipt by the Lender from the Borrower's counsel of a legal
opinion, satisfactory to Lender, covering such matters incident to the
transactions contemplated by this Agreement and such other matters as the Lender
may reasonably request;
(f) execution of a fee letter regarding fees payable by Borrower to
Lender.
SECTION 4.02. Each Loan. The obligation of the Lender to make any Loan
(including the initial Loan) to the Borrower is subject to the satisfaction of
the following conditions precedent:
(a) receipt by the Lender of a notice of borrowing in accordance with
Section 2.05;
(b) immediately after the making of such Loan, the aggregate
outstanding principal amount of the Loans made to the Borrower will not exceed
the amount of the Commitment;
(c) immediately before and after such Loan, no Default or Event of
Default shall have occurred and be continuing;
11
15
(d) the representations and warranties of the Borrower contained in
this Agreement and the other Loan Documents shall be true and correct on and as
of the date of such Loan; and
(e) immediately before making such Loan, no event or condition has
occurred that could have a Material Adverse Effect.
Each borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such borrowing that the conditions precedent
specified in clauses (b), (c), (d), and (e) of this Section have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement, the Borrower
represents and warrants to the Lender as of the date hereof that:
SECTION 5.01. Existence. Each of the Borrower and the Subsidiaries (a)
is duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its organization, except where the failure of any of the
Subsidiaries to be in good standing would not have a Material Adverse Effect;
and (b) has the requisite power and authority and legal right to own its assets
and carry on its business as now being or as proposed to be conducted. Each of
the Borrower and the Subsidiaries has the power, authority, and legal right to
execute, deliver, and perform its obligations under the Loan Documents to which
it is a party.
SECTION 5.02. Financial Statements. The Financial Statements are
complete and correct, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, and fairly and accurately
present in all material respects the financial condition of the Borrower and the
Subsidiaries as of the respective dates indicated therein and the results of
operations for the respective periods indicated therein. Since the effective
date of the Financial Statements, no event or condition has occurred that could
have a Material Adverse Effect.
SECTION 5.03. Authorization No Breach. The execution, delivery, and
performance by each of the Borrower and the Subsidiaries of the Loan Documents
to which it is a party and compliance with the terms and provisions thereof have
been duly authorized by all requisite action on the part of the Borrower and
each such Subsidiary and do not and will not violate, or result in a breach of
or default under, or require any consent under (i) the articles of
incorporation, bylaws, or other organizational documents of the Borrower or any
such Subsidiary, (ii) any applicable law, rule, or regulation or any order,
writ, injunction, or decree of any Governmental Authority or arbitrator, or
(iii) any agreement or instrument to which the Borrower or any such Subsidiary
is a party or by which any of them or any of their property is bond or subject,
except for such breaches, violations or defaults, with respect to the matters
set forth in clauses (ii) and (iii), as would not have a Material Adverse
Effect.
12
16
SECTION 5.04. Litigation. There is no action, suit, investigation, or
proceeding before or by any Governmental Authority or arbitrator pending, or to
the knowledge of the Borrower, threatened against or affecting the Borrower or
any Subsidiary, that could, if adversely determined, have a Material Adverse
Effect.
SECTION 5.05. Enforceability. This Agreement constitutes, and the other
Loan Documents when executed and delivered by the Borrower and each Subsidiary
party thereto shall constitute. the legal, valid, and binding obligations of the
Borrower and such Subsidiary, enforceable against the Borrower and such
Subsidiary in accordance with their respective terms, except as limited by
applicable Debtor Relief Laws and general principles of equity.
SECTION 5.06. Approvals. No authorization, approval, or consent of, and
no filing or registration with, any Governmental Authority or third party is or
will be necessary for the execution, delivery, or performance by the Borrower or
any Subsidiary of any of the Loan Documents to which it is a party or for the
validity or enforceability thereof.
SECTION 5.07. Disclosure. No statement, information, report,
representation, or warranty made by the Borrower in any Loan Document or
furnished to the Lender in connection with any Loan Document contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements herein or therein not misleading in any material respect.
SECTION 5.08. Senior Facility. There is no Default or Event of Default
under the Senior Facility.
ARTICLE VI
COVENANTS
The Borrower agrees that, so long as the Lender has any Commitment
hereunder or any amount payable under the Note remains unpaid:
SECTION 6.01. Information. The Borrower shall deliver to the Lender:
(a) as soon as available and in any event within 105 days after the end
of each fiscal year of the Borrower a consolidated balance sheet of the Borrower
and the Subsidiaries as of the end of such fiscal year and the related
consolidated, statements of income and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all prepared in accordance with generally accepted accounting principles applied
on a consistent basis and certified by independent public accountants of
nationally recognized standing;
(b) as soon as available and in any event within 50 days after the end
of each of the first three quarters of each fiscal year of the Borrower a
consolidated balance sheet of the Borrower and the Subsidiaries as of the end of
such quarter and the related consolidated statements of income and cash flows
for such quarter and for the portion of the Borrower's fiscal year ended at the
end of such quarter, setting forth in each case in comparative form the figures
for the
13
17
corresponding quarter and the corresponding portion of the Borrower's previous
fiscal year, all in reasonable detail and duly certified (subject to normal
year-end adjustments) by the chief accounting officer of the Borrower as having
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis;
(c) within three (3) Business Days any officer of the Borrower obtains
knowledge of any Default hereunder or any Default under the Senior Facility, a
certificate of the chief financial officer of the Borrower setting forth the
details thereof and any action that the Borrower is taking or proposes to take
with respect thereto;
(d) any other report, notices, certificates or other information
delivered to the Administrative Agent under the Senior Facility; and
(e) from time to time such additional information regarding the
financial condition, or business of the Borrower and the Subsidiaries as the
Lender may reasonably request.
SECTION 6.02. Obligations. The Borrower shall, and shall cause each of
the Subsidiaries to:
(a) preserve maintain all of its rights, privileges, and franchises
necessary or desirable in the normal conduct of its business, except where such
failure to maintain such rights, privileges or franchises would not have a
Material Adverse Effect;
(b) comply with the requirements of all applicable laws. rules,
regulations, and orders of Governmental Authorities, except where the failure to
comply therewith would not have a Material Adverse Effect;
(c) pay and discharge when due all taxes, assessments, and governmental
charges or levies imposed on it or on its income or profits or any of its
property, except for any such tax, assessment, charge, or levy the payment of
which is being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained;
(d) maintain all of its properties owned or used in its business in
good working order and condition ordinary wear and tear excepted, except where
such failure to maintain such properties would not have a Material Adverse
Effect;
(e) permit representatives of the Lender, during normal business hours,
to examine, copy, and make extracts from its books and records, to inspect its
properties, and to discuss its business and affairs with its officers,
directors, and after prior notice to the Borrower, with its accountants; and
(f) maintain insurance in such amounts, with such deductibles, and
against such risks as is customary for similarly situated businesses, except
where the failure to maintain such insurance could not reasonably be expected to
have a Material Adverse Effect.
14
18
SECTION 6.03 Financial Covenants. The Borrower shall not:
(a) Total Debt Interest Coverage Ratio. Permit, for any period of four
consecutive fiscal quarters (commencing with the fiscal quarter ended September
30, 2000), the ratio of EBITDA to Consolidated Interest Expense of the Borrower
and its Subsidiaries for such four consecutive fiscal quarters to be less than
3.0 to 1.0.
(b) Total Debt Leverage Ratio. Permit the ratio of Indebtedness of the
Borrower and its Subsidiaries, as of the last day of any fiscal quarter
(commencing September 30, 2000), to EBITDA, for the period of four consecutive
fiscal quarters then ended, to be greater than 3.25 to 1.0.
(c) Consolidated Net Worth. Permit the Consolidated Net Worth of the
Borrower and its Subsidiaries during any period to be less than the sum of (i)
$100,000,000 plus (ii) amounts accrued in the shareholders' equity section of
the Borrower's balance sheet, on account of the issuance by the Borrower to
Shell Oil Company or its Affiliates of shares of Common Stock, and Preferred
Stock, upon the closing of the transactions contemplated in the Merger Agreement
minus (iii) any non-cash charges or expenses accrued by Borrower to meet ceiling
test levels in conformity with Securities and Exchange Commission Regulation S-X
article 4-10(c)(4) and minus (iv) all other non-cash charges or expenses accrued
by Borrower as a result of the Shell Transactions.
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default. Each of the following shall constitute
an "Event of Default":
(a) The Borrower shall fail to pay when due any principal of any Loan,
or the Borrower shall fail to pay when due any interest or other amount payable
by it under any Loan Document and such failure continues for a period of three
(3) Business Days.
(b) Any representation, warranty, certification, or statement made or
deemed made by the Borrower in any Loan Document or in any certificate,
financial statement, or other document delivered pursuant thereto shall be
false, misleading, or incorrect in any material respect when made or deemed
made.
(c) The Borrower shall fail to perform, observe, or comply with any
covenant, agreement, or term contained in Section 6.03 of this Agreement.
(d) The Borrower shall fail to perform, observe, or comply with any
other covenant, agreement, or term contained in any Loan Document (other than a
failure covered elsewhere in this Section 7.01) and such failure shall continue
for a period of thirty (30) days after notice thereof to the Borrower by the
Lender.
15
19
(e) An Event of Default shall occur and be continuing, and is not
otherwise waived, under the Senior Facility.
SECTION 7.02. Remedies. So long as any Event of Default shall occur and
be continuing, the Lender may do any one or more of the following:
(a) Acceleration. Declare all outstanding principal of and accrued and
unpaid interest on the Note and all other amounts payable by the Borrower under
the Loan Documents immediately due and payable, and the same shall thereupon
become immediately due and payable, without presentment, demand, protest, notice
of acceleration, notice of intent to accelerate, or other notices or formalities
of any kind, all of which are hereby expressly waived by the Borrower.
(b) Termination of Commitment. Terminate the Commitment without notice
to the Borrower.
(c) Rights. Exercise any and all rights and remedies afforded by
applicable law or otherwise.
Notwithstanding the foregoing, upon the occurrence of an Event of Default under
Section 9.(f) of the Senior Facility, the Commitment shall automatically
terminate, and the outstanding principal of and accrued and unpaid interest on
the Note and all other amounts payable by the Borrower under the Loan Documents
shall thereupon become immediately due and payable without presentment, demand,
protest, notice of acceleration, notice of intent to accelerate, or other
notices or formalities of any kind, all of which are hereby expressly waived by
the Borrower.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Expenses. The Borrower shall on demand pay or reimburse
the Lender for paying (a) all reasonable costs and expenses of the Lender,
including the reasonable fees and disbursements of counsel for the Lender, in
connection with the administration of the Loan Documents, the preparation of any
waiver or consent thereunder or any amendment thereof or any Default or alleged
Default and (b) if an Event of Default occurs, all costs and expenses incurred
by the Lender, including the reasonable fees and disbursements of counsel, in
connection with such Event of Default and any collection, bankruptcy,
insolvency, or other enforcement proceedings resulting therefrom.
SECTION 8.02. Indemnification. The Borrower agrees to indemnify the
Lender and each affiliate thereof, their respective officers, directors,
employees, attorneys, and agents (each an "Indemnified Person") from, and hold
each of them harmless against, any and all losses, liabilities, claims, damages,
penalties, judgments, disbursements, costs, and expenses, including all fees and
disbursements of counsel (collectively the "Indemnified Liabilities"), which
directly or indirectly arise from or relate to any Loan Document or any of the
transactions contemplated thereby, but excluding (i) any of the foregoing to the
extent caused by the gross negligence or willful misconduct of the Indemnified
Person, and (ii) any Indemnified Liabilities that arise out
16
20
of or relate to the failure of the Lender to comply with Section 3.05(b).
Without limiting any provision of any Loan Document, it is the express intention
of the parties hereto that each Indemnified Person shall be indemnified from and
held harmless against any and all Indemnified Liabilities arising out of or
resulting from the sole or contributory negligence of the Indemnified Person.
SECTION 8.03. Subordination Agreement. The rights and obligations of
the Borrower and the Lender hereunder shall remain at all times subject to the
terms and conditions of the Subordination Agreement.
SECTION 8.04. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, the Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by the Lender
(or any of its affiliates) to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter existing
under the Loan Documents, irrespective of whether the Lender shall have made any
demand under the Loan Documents and although such obligations may be unmatured.
The Lender agrees promptly to notify the Borrower after any such set-off and
application made by the Lender; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the Lender under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that the Lender may
have.
SECTION 8.05. No Waiver: Cumulative Remedies. No failure on the part of
the Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power, or privilege under any Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power, or privilege under any Loan Document preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in the Loan Documents are cumulative and not
exclusive of any rights and remedies provided by law.
SECTION 8.06. Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights or obligations hereunder
without the prior written consent of the Lender. The Lender may, in the ordinary
course of its commercial banking or lending business and in accordance with
applicable law, at any time and from time to time, assign to any Affiliate of a
Lender or, with the prior written consent of the Borrower (which consent shall
not be unreasonably withheld), to an additional bank or financial institution or
other entity (an "Assignee") all or any part of its rights an obligations under
this Agreement and the other Loan Documents pursuant to an assignment instrument
in form and substance satisfactory to the Lender and executed by the Lender, the
assignee and the Borrower, provided, that if any Lender assigns all or any part
of its rights and obligations under this Agreement to one of its Affiliates in
connection with or in contemplation of the sale or other disposition of its
interest in such Affiliate, the Borrower's prior written consent shall be
required for such assignment. For the
17
21
avoidance of doubt following an assignment by the Lender of any interest herein,
any such assignment instrument executed by Lender shall include an express
statement directing the Borrower to pay the assigned principal amount, and all
accrued unpaid interest thereon, to the assignee. Notwithstanding any provision
of this Section 8.05, the consent of the Borrower shall not be required for any
assignment which occurs at any time when any of the events described in
Subsection 9(f) of the Senior Facility shall have occurred and be continuing.
All information provided by the Borrower to the Lender may be furnished by the
Lender to its affiliates and to any actual or proposed assignee or participant.
(b) In the event that the Lender sells interests in this
Agreement to third parties or Affiliates, then (i) Fortis Capital Corp. and its
Affiliates (collectively, "Fortis") shall retain at least $12,600,000 in total
commitments (or, if funded in whole or in part at the time that Fortis sells
such interests herein, then Fortis shall retain at least $12,600,000 in total
principal amount of outstanding loans made pursuant hereto), and (ii) this
Agreement may be amended, modified or supplemented, or any waiver of any
provision hereof may be granted, by written agreement of the holders of more
than 50% in aggregate loan commitments hereunder (or in outstanding principal
amount of loans, if the loans hereunder have been funded in whole or in part).
SECTION 8.07. Amendments. No amendment or waiver of any provision of
any Loan Document to which the Borrower is a party, nor any consent to any
departure by the Borrower therefrom, shall be effective unless the same shall be
agreed or consented to in writing by the Lender and the Borrower, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 8.08. Notices. All notices, requests, and other communications
to either party hereunder shall be in writing (including facsimile transmission)
and shall be given to such party at its address or facsimile number set forth on
the signature pages hereof. Each such notice, request, or other communication
shall be effective (i) if given by facsimile transmission, when transmitted to
the facsimile number referred to in this Section and confirmation of receipt is
received, (ii) if given by mail, three (3) Business Days after such
communication is deposited is the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered at
the address referred to in this Section.
SECTION 8.09. Counterparts. This Agreement may be executed. in one or
more counterparts, each of which shall be deemed as original, but all of which
together shall constitute one and the same instrument.
SECTION 8.10. Severability. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
SECTION 8.11. Controlling Agreement. It is the intent of the Borrower and
the Lender in the execution and performance of this Agreement to remain in
strict compliance with applicable law from time to time in effect. In
furtherance thereof, the Borrower and the Lender stipulate
18
22
and agree that none of the terms and provisions contained in this Agreement, or
in the Note or any Loan Document or otherwise relating hereto, shall ever be
construed to create a contract to pay for the use, forbearance or detention of
money with interest at a rate or in an amount in excess of the maximum rate or
amount of interest permitted to be charged under applicable law (such maximum
rate of interest hereinafter referred to as the "Maximum Rate"). For purposes of
this Agreement, "interest" shall include the aggregate of all charges which
constitute interest under applicable law that are contracted for, charged,
reserved , received or paid under this Agreement. The Borrower shall never be
required to pay unearned interest and shall never be required to pay interest at
a rate or in amount in excess of the maximum rate or amount of interest that may
be lawfully charged under applicable law, and the provisions of this paragraph
shall control over all other provisions of this Agreement, and of any other
instrument pertaining to this Agreement (including without limiting the
generality of the foregoing any Loan Document), which may be in apparent
conflict herewith. If obligations arising under this Agreement and evidenced by
the Note are prepaid for any reason, or if under any other contingency the
effective rate or amount of interest which would otherwise be payable under this
Agreement would exceed the maximum rate or amount of interest the Lender or any
holder of the Note is allowed by applicable law to charge, contract for, take or
receive, or in the event that the Lender or any holder of the Note shall charge,
contract for, take, reserve or receive monies that are deemed to constitute
interest which would, in the absence of this provision, increase the effective
rate or amount of interest payable under this Note to a rate or amount in excess
of that permitted to be charged, contracted for, taken, reserved or received
under applicable law then in effect, then the principal amount of the
indebtedness arising under the Agreement or the amount of interest which would
otherwise be payable under this Agreement or both shall be reduced to the amount
allowed under applicable law as now or hereinafter construed by the courts
having jurisdiction, and all such moneys so charged, contracted for taken,
reserved or received that are deemed to constitute interest in excess of the
maximum rate or amount of interest permitted by applicable law shall immediately
be returned to or credited to the account of the Borrower upon such
determination. The Lender and the Borrower further stipulate and agree that,
without limitation of the foregoing, all calculations of the rate or amount of
interest contracted for, charged, taken, reserved or received under this
Agreement or the Note which are made for the purpose of determining whether such
rate or amount exceeds the maximum lawful rate or amount, shall be made, to the
extent permitted by applicable law, by amortizing, prorating, allocating and
spreading in equal parts during the period of the full stated term of the
indebtedness arising hereunder, all interest at any time contracted for,
charged, taken, reserved or received from the Borrower or otherwise by the
Lender of the holders of the Note.
SECTION 8.12. Survival. All representations and warranties made or deemed
made by the Borrower in the Loan Documents shall survive the execution and
delivery thereof and the making of the Loans, and no investigation by the Lender
or any closing shall affect the representations and warranties by the Borrower
or the right of the Lender to rely upon them. Without prejudice to the survival
of any other obligation of the Borrower hereunder, the obligations of the
Borrower under Article III and Sections 8.01 and 8.02 shall survive repayment of
the Note and termination of the Commitment.
SECTION 8.13. Governing Law. This Agreement and the Note shall be
governed by and construed in accordance with, the law of the State of Texas
without regard to principles of
19
23
conflicts of laws, and the applicable laws of the United States of America. The
Borrower hereby submits to the nonexclusive jurisdiction of the United States
District Court and each state court in the City of Houston for the purposes of
all legal proceedings arising out of or relating to any of the Loan Documents or
the transactions contemplated thereby. The Borrower irrevocably consents to the
service of any and all process in any such action or proceeding by the mailing
of copies of such process to the Borrower at its address set forth underneath
its signature hereto. The Borrower irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
SECTION 8.14. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS
OF THE LENDER IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
SECTION 8.15. ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.)
20
24
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWER
THE MERIDIAN RESOURCE
CORPORATION
By:
-----------------------------------------
Title:
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Chief Executive Officer
By:
-----------------------------------------
Title:
--------------------------------------
P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Financial Officer
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇ ▇▇▇▇
Attention: P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Chief
Financial Officer
LENDER
FORTIS CAPITAL CORP.
By:
-----------------------------------------
Title:
--------------------------------------
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Managing Director
25
EXHIBIT A
PROMISSORY NOTE
$25,000,000.00 January 5, 2001
FOR VALUE RECEIVED, the undersigned, THE MERIDIAN RESOURCE CORPORATION,
a Texas corporation (the "Borrower"), hereby promises to pay to the order of
FORTIS CAPITAL CORP. (the "Lender"), at the Principal Office, in lawful money of
the United States of America and in immediately available funds, the principal
amount of Twenty Five Million Dollars ($25,000,000.00) or such lesser amount as
shall equal the aggregate unpaid principal amount of the Loans made by the
Lender to the Borrower under the Credit Agreement referred to below, on the
dates and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Loan, at such office, in
like money and funds, for the period commencing on the date of such Loan until
such Loan shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
The books and records of the Lender shall be prima facie evidence of
all amounts outstanding hereunder.
This Note is the Note referred to in the Credit Agreement of even date
herewith, between the Borrower and the Lender (such Credit Agreement, as the
same may be amended, modified, or supplemented from time to time, being referred
to herein as the "Credit Agreement"), and evidences Loans made by the Lender
thereunder. The Credit Agreement, among other things, contains provisions for
acceleration of the maturity of this Note upon the happening of certain stated
events and for repayments of Loans prior to the maturity of this Note upon the
terms and conditions specified in the Credit Agreement. Capitalized terms used
in this Note have the respective meanings assigned to them in the Credit
Agreement.
It is the intent of Lender and Borrower in the execution and
performance of this Note to remain in strict compliance with applicable law from
time to time in effect. In furtherance thereof, Lender and Borrower stipulate
and agree that none of the terms and provisions contained in this Note shall
ever be construed to create a contract to pay for the use, forbearance or
detention of money with interest at a rate or in an amount in excess of the
maximum rate or amount of interest permitted to be charged under applicable law
(such maximum rate being hereinafter referred to as the "Maximum Rate"). For
purposes of this Note "interest" shall include the aggregate of all charges
which constitute interest under applicable law that are contracted for, charged,
reserved, received or paid under this Note. Borrower shall never be required to
pay unearned interest and shall never be required to pay interest at a rate or
in an amount in excess of the Maximum Rate or amount of interest that may be
lawfully charged under applicable law, and the provisions of this paragraph
shall control over all other provisions of this Note, and of any other
instrument pertaining to or securing this Note, which may be in actual or
apparent conflict herewith. If this Note is prepaid, or if the maturity of this
Note is accelerated for any reason, or if under any other contingency the
effective rate or amount of interest which would otherwise be payable under this
Note would exceed the Maximum Rate or amount of
26
interest Lender or any other holder of this Note is allowed by applicable law to
charge, contract for, take, reserve or receive, or in the event Lender or any
holder of this Note shall charge, contract for, take, reserve or receive monies
that are deemed to constitute interest which would, in the absence of this
provision, increase the effective rate or amount of interest payable under this
Note to a rate or amount in excess of that permitted to be charged, contracted
for, taken, reserved or received under applicable law then in effect, then the
principal amount of this Note or the amount of interest which would otherwise be
payable under this Note or both shall be reduced to the amount allowed under
applicable law as now or hereinafter construed by the courts having
jurisdiction, and all such moneys so charged, contracted for, taken, reserved or
received that are deemed to constitute interest in excess of the Maximum Rate or
amount of interest permitted by applicable law shall immediately be returned to
or credited to the account of Borrower upon such determination. Lender and
Borrower further stipulate and agree that, without limitation of the foregoing,
all calculations of the rate or amount of interest contracted for, charged,
taken, reserved or received under this Note which are made for the purpose of
determining whether such rate or amount exceeds the Maximum Rate or amount,
shall be made to the extent not prohibited by applicable law, by amortizing,
prorating, allocating and spreading during the period of the full stated term of
this Note, all interest at any time contracted for, charged, taken, reserved or
received from Borrower or otherwise by Lender or any other holder of this Note.
ALL INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATED TO OTHER
INDEBTEDNESS PURSUANT TO, AND TO THE EXTENT PROVIDED IN, AND IS OTHERWISE
SUBJECT TO THE TERMS OF, THE SUBORDINATION AGREEMENT, OF EVEN DATE HEREWITH (THE
"SUBORDINATION AGREEMENT"), AS THE SAME MAY BE AMENDED, MODIFIED OR OTHERWISE
SUPPLEMENTED FROM TIME TO TIME, BY AND AMONG THE MERIDIAN RESOURCE CORPORATION,
AS BORROWER, THE CHASE MANHATTAN BANK, AS AGENT FOR THE LENDERS PARTIES TO THE
SENIOR CREDIT AGREEMENT REFERRED TO IN THE SUBORDINATION AGREEMENT, AND THE
HOLDERS FROM TIME TO TIME OF THE OBLIGATIONS ARISING UNDER THE SUBORDINATED LOAN
AGREEMENT REFERRED TO IN THE SUBORDINATION AGREEMENT, INCLUDING, WITHOUT
LIMITATION, THIS NOTE.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.)
27
This Note shall be governed by and construed in accordance with the
laws of the State of Texas without regard to principles of conflicts of laws,
and the applicable laws of the United States of America.
THE MERIDIAN RESOURCE CORPORATION
By:
---------------------------------------
Title:
------------------------------------
By:
---------------------------------------
Title:
------------------------------------
