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CREDIT AGREEMENT
DATED AS OF JUNE 30, 2000
AMONG
TOM BROWN, INC.
AS BORROWER,
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT,
AND
TILE LENDERS SIGNATORY HERETO
----------
CHASE SECURITIES INC.,
AS ARRANGER
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Terms Defined Above............................................................ -1-
Section 1.02 Certain Defined Terms.......................................................... -1-
Section 1.03 Accounting Terms and Determinations............................................ -14-
ARTICLE II
COMMITMENTS
Section 2.01 Loans and Letters of Credit.................................................... -15-
Section 2.02 Borrowings, Continuations and Conversions; Letters of
Credit......................................................................... -15-
Section 2.03 Changes of Commitments......................................................... -17-
Section 2.04 Fees........................................................................... -18-
Section 2.05 Several Obligations............................................................ -19-
Section 2.06 Notes.......................................................................... -19-
Section 2.07 Prepayments.................................................................... -19-
Section 2.08 Borrowing Base................................................................. -20-
Section 2.09 Assumption of Risks............................................................ -21-
Section 2.10 Obligation to Reimburse and to Prepay.......................................... -22-
Section 2.11 Lending Offices................................................................ -24-
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 Repayment of Loans............................................................. -24-
Section 3.02 Interest....................................................................... -24-
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 Payments....................................................................... -25-
Section 4.02 Pro Rata Treatment............................................................. -25-
Section 4.03 Computations................................................................... -26-
Section 4.04 Non-receipt of Funds by the Administrative Agent............................... -26-
Section 4.05 Set-off, Sharing of Payments, Etc.............................................. -26-
Section 4.06 Taxes.......................................................................... -27-
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ARTICLE V
CAPITAL ADEQUACY
Section 5.01 Additional Costs............................................................. -30-
Section 5.02 Limitation on Eurodollar Loans............................................... -32-
Section 5.03 Illegality................................................................... -32-
Section 5.04 Base Rate Loans Pursuant to Sections 5.01, 5.02 and 5.03..................... -32-
Section 5.05 Compensation................................................................. -32-
Section 5.06 Time Limit; Etc.............................................................. -33-
Section 5.07 Replacement Lenders.......................................................... -33-
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Initial Funding.............................................................. -35-
Section 6.02 Initial and Subsequent Loans and Letters of Credit........................... -36-
Section 6.03 Conditions Precedent for the Benefit of Lenders.............................. -36-
Section 6.04 No Waiver.................................................................... -37-
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.01 Corporate Existence.......................................................... -37-
Section 7.02 Financial Condition.......................................................... -37-
Section 7.03 Litigation................................................................... -38-
Section 7.04 No Breach.................................................................... -38-
Section 7.05 Authority.................................................................... -38-
Section 7.06 Approvals.................................................................... -38-
Section 7.07 Use of Loans................................................................. -38-
Section 7.08 ERISA........................................................................ -38-
Section 7.09 Taxes........................................................................ -38-
Section 7.10 Titles, Etc.................................................................. -41-
Section 7.11 No Material Misstatements.................................................... -42-
Section 7.12 Investment Company Act....................................................... -42-
Section 7.13 Public Utility Holding Company Act........................................... -42-
Section 7.14 Subsidiaries................................................................. -42-
Section 7.15 Location of Business and Offices............................................. -42-
Section 7.16 Defaults..................................................................... -43-
Section 7.17 Environmental Matters........................................................ -43-
Section 7.18 Compliance with the Law...................................................... -44-
Section 7.19 Insurance.................................................................... -44-
Section 7.20 Hedging Agreements........................................................... -44-
Section 7.21 Restriction on Liens......................................................... -45-
Section 7.22 Material Agreements.......................................................... -45-
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ARTICLE VIII
AFFIRMATIVE COVENANTS
Section 8.01 Reporting Requirements....................................................... -45-
Section 8.02 Litigation................................................................... -47-
Section 8.03 Maintenance, Etc............................................................. -47-
Section 8.04 Environmental Matters........................................................ -48-
Section 8.05 Further Assurances........................................................... -49-
Section 8.06 Performance of Obligations................................................... -49-
Section 8.07 Reserve Reports.............................................................. -49-
Section 8.08 Title to Oil and Gas Properties.............................................. -50-
Section 8.09 ERISA Information and Compliance............................................. -50-
ARTICLE IX
NEGATIVE COVENANTS
Section 9.01 Debt......................................................................... -51-
Section 9.02 Liens........................................................................ -52-
Section 9.03 Investments, Loans and Advances.............................................. -52-
Section 9.04 Dividends, Distributions and Redemptions..................................... -53-
Section 9.05 Sales and Leasebacks......................................................... -54-
Section 9.06 Nature of Business........................................................... -54-
Section 9.07 Limitation on Leases......................................................... -54-
Section 9.08 Mergers, Etc................................................................. -54-
Section 9.09 Proceeds of Notes; Letters of Credit......................................... -54-
Section 9.10 ERISA Compliance............................................................. -54-
Section 9.11 Sale or Discount of Receivables.............................................. -56-
Section 9.12 Tangible Net Worth........................................................... -56-
Section 9.13 Fixed Charge Coverage Ratio.................................................. -56-
Section 9.14 Leverage Ratio............................................................... -56-
Section 9.15 Sale of Oil and Gas Properties............................................... -56-
Section 9.16 Environmental Matters........................................................ -56-
Section 9.17 Transactions with Affiliates................................................. -57-
Section 9.18 Subsidiaries................................................................. -57-
Section 9.19 Negative Pledge Agreements................................................... -57-
Section 9.20 Hedging Agreements........................................................... -57-
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default........................................................... -57-
Section 10.02 Remedies.................................................................... -59-
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ARTICLE XI
THE ADMINISTRATIVE AGENT
Section 11.01 Appointment, Powers and Immunities......................................... -60-
Section 11.02 Reliance by Administrative Agent........................................... -60-
Section 11.03 Defaults................................................................... -61-
Section 11.04 Rights as a Lender......................................................... -61-
Section 11.05 INDEMNIFICATION............................................................ -61-
Section 11.06 Non-Reliance on Administrative Agent and other Lenders..................... -61-
Section 11.07 Action by Administrative Agent............................................. -62-
Section 11.08 Resignation or Removal of Administrative Agent............................. -62-
ARTICLE XII
MISCELLANEOUS
Section 12.01 Waiver..................................................................... -63-
Section 12.02 Notices.................................................................... -63-
Section 12.03 Payment of Expenses, Indemnities, Etc...................................... -63-
Section 12.04 Amendments, Etc............................................................ -66-
Section 12.05 Successors and Assigns..................................................... -66-
Section 12.06 Assignments and Participations............................................. -66-
Section 12.07 Invalidity................................................................. -67-
Section 12.08 Counterparts............................................................... -68-
Section 12.09 References; Use of Word "Including"........................................ -68-
Section 12.10 Survival................................................................... -68-
Section 12.11 Captions................................................................... -68-
Section 12.12 NO ORAL AGREEMENTS......................................................... -68-
Section 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.................................. -68-
Section 12.14 Interest................................................................... -69-
Section 12.15 Confidentiality............................................................ -70-
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ANNEXES, EXHIBITS AND SCHEDULES
Annex I - List of Percentage Shares and Maximum Credit Amounts
Exhibit A - Form of Note
Exhibit B - Form of Borrowing, Continuation and Conversion Request
Exhibit C - Form of Compliance Certificate
Exhibit D - Form of Assignment Agreement
Exhibit E - Guarantors
Schedule 7.02 - Liabilities
Schedule 7.09 - Taxes
Schedule 7.10 - Titles, Etc.
Schedule 7.14 - Subsidiaries and Partnerships
Schedule 7.19 - Insurance
Schedule 7.20 - Hedging Agreements
Schedule 7.22 - Material Agreements
Schedule 9.01 - Debt
Schedule 9.02 - Liens
Schedule 9.03 - Investments, Loans and Advances
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THIS CREDIT AGREEMENT dated as of June 30, 2000 is among TOM BROWN,
INC., a corporation formed under the laws of the State of Delaware (the
"Borrower"); each of the lenders that is a signatory hereto or which becomes a
signatory hereto as provided in Section 12.06 (individually, together with its
successors and assigns, a "Lender" and, collectively, the "Lenders"); and THE
CHASE MANHATTAN BANK, a New York banking corporation (in its individual
capacity, "Chase"), as administrative agent for the Lenders (in such capacity,
together with its successors in such capacity, the "Administrative Agent").
RECITALS
A. The Borrower has requested that the Lenders provide certain loans to and
extensions of credit on behalf of the Borrower; and
B. The Lenders have agreed to make such loans and extensions of credit
subject to the terms and conditions of this Agreement.
C. In consideration of the mutual covenants and agreements herein contained
and of the loans, extensions of credit and commitments hereinafter referred to,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Terms Defined Above As used in this Agreement, the terms
"Administrative Agent," "Borrower," "Chase," "Lender," and "Lenders" shall have
the meanings indicated above.
Section 1.02 Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Article I or in
other provisions of this Agreement in the singular to have equivalent meanings
when used in the plural and vice versa):
"Additional Costs" shall have the meaning assigned such term in Section
5.01(a).
"Affected Loans" shall have the meaning assigned such term in Section
5.04.
"Affiliate" of any Person shall mean (i) any Person directly or
indirectly controlled by, controlling or under common control with such first
Person, (ii) any director or officer of such first Person or of any Person
referred to in clause (i) above and (iii) if any Person in clause (i) above is
an individual, any member of the immediate family (including parents, spouse and
children) of such individual and any trust whose principal beneficiary is such
individual or one or more members of such immediate family and any Person who is
controlled by any such member or trust. For purposes of this definition, any
Person which owns directly or indirectly 10% or more of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation or 10% or more of the partnership or other ownership interests of
any other Person (other than as a limited partner of such other Person) will be
deemed to "control" (including, with its correlative meanings, "controlled by"
and "under common control with") such corporation or other Person.
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"Agreement" shall mean this Credit Agreement, as the same may from time
to time be amended or supplemented.
"Aggregate Commitments" at any time shall equal the amount calculated
in accordance with Section 2.03(a).
"Aggregate Maximum Credit Amounts" at any time shall equal the sum of
the Maximum Credit Amounts of the Lenders set forth or Annex], as the same may
be reduced pursuant to Section 203(b). As of the Closing Date, the Aggregate
Maximum Credit Amounts equal $125,000,000.
"Applicable Lending Office" shall mean, for each Lender and for each
Type of Loan, the lending office of such Lender (or an Affiliate of such Lender)
designated for such Type of Loan on the signature pages hereof or such other
offices of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Administrative Agent and the Borrower as the
office by which its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean the applicable per annum percentage set
forth at the appropriate intersection in the table shown below, based on the
Borrowing Base Utilization as in effect from time to time:
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BORROWING BASE UTILIZATION APPLICABLE MARGIN
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EURODOLLAR LOANS BASE RATE LOANS
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Less than or equal to 25% 0.875% 0.000%
Greater than 25%, 1.000% 0.000%
but less than or equal to 50%
Greater than 50%, 1.125% 0.125%
but less than or equal to 75%
Greater than 75% 11.3750% 0.375%
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Each change in the Applicable Margin resulting from a change in the Borrowing
Base Utilization shall take effect at the time of such change in the Borrowing
Base Utilization (including, without limitation, in respect of Eurodollar Loans
then outstanding notwithstanding that such change occurs during an Interest
Period).
"Assignment" shall have the meaning assigned such term in Section
12.06(b).
"Base Rate" shall mean, with respect to any Base Rate Loan, for any
day, the higher of (i) the Federal Funds Rate for any such day plus 1/2 of 1% or
(ii) the Prime Rate for such day. Each change in any interest rate provided for
herein based upon the Base Rate resulting from a change in the Base Rate shall
take effect at the time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest at rates based
upon the Base Rate.
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"Borrowing Base" shall mean at any time an amount equal to the amount
determined in accordance with Section 2.08.
"Borrowing Base Deficiency" shall mean, and occur at any time when, the
amount by which the aggregate outstanding principal amount of the Loans plus the
LC Exposure exceeds the Borrowing Base, whether as the result of a
redetermination, a scheduled reduction, or otherwise.
"Borrowing Base Utilization" shall mean at any time, an amount
(expressed as a percentage) equal to the quotient of (i) the aggregate
principal amount of Loans outstanding plus LC Exposure, divided by (ii) the
Borrowing Base.
"Business Day" shall mean any day other than a day on which commercial
banks are authorized or required to close in New York City, or if such day
relates to a borrowing or continuation of, a payment or prepayment of principal
of or interest on, or conversion of or into, or the Interest Period for, a
Eurodollar Loan or a notice by the Borrower with respect to any such borrowing
or continuation, payment, prepayment, conversion or Interest Period, any day
which is also a day on which dealings in Dollar deposits are carried out in the
London interbank market.
"Capital Stock" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation), and any and all warrants or options to purchase any of the
foregoing.
"Change of Control" shall mean the occurrence of any of the following
events: (a) any Person or "group" (within the meaning of Section 13(d) or 14(d)
of the Securities Exchange Act of 1934, as amended) (i) shall have acquired
beneficial ownership of 35% or more of any outstanding class of Capital Stock
having ordinary voting power in the election of directors of the Borrower, (ii)
(A) shall obtain the power (whether or not exercised) to elect a majority of the
Borrower's directors or (B) the Board of Directors of the Borrower shall not
consist of a majority of Continuing Directors, or (b) except as permitted by
Section 9.15, the Borrower shall cease to own 100% of the issued and outstanding
Capital Stock of each of its Wholly-Owned Subsidiaries. For purposes of this
definition, "Continuing Directors" shall mean the directors of the Borrower on
the Closing Date and each other director, if such other director's nomination
for election to the Board of Directors of the Borrower is recommended by a
majority of the then Continuing Directors.
"Closing Date" shall mean June 30, 2000.
"Co-Agent" shall mean Bank of America, N.A., as co-agent for the
Lenders under this Agreement and the other Loan Documents.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and any successor statute.
"Commitment" shall mean, for any Lender, its obligation to make Loans
as provided in Section 2.01(a) and to participate in the Letters of Credit as
provided in Section 2.01(b) up to the lesser of (i) such Lender's Maximum Credit
Amount and (ii) such Lender's Percentage Share of the amount equal to the then
effective Borrowing Base.
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"Consolidated Net Income" shall mean with respect to the Borrower and
its Consolidated Subsidiaries, for any period, the aggregate of the net income
(or loss) of the Borrower and its Consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, provided that there shall be
excluded from such net income (to the extent otherwise included therein) the
following: (i) the net income of any Person in which the Borrower or any
Consolidated Subsidiary has an interest (which interest does not cause the net
income of such other Person to be consolidated with the net income of the
Borrower and its Consolidated Subsidiaries in accordance with GAAP), except to
the extent of the amount of dividends or distributions actually paid in such
period by such other Person to the Borrower or to a Consolidated Subsidiary, as
the case may be; (ii) the net income (but not loss) of any Consolidated
Subsidiary to the extent that the declaration or payment of dividends or similar
distributions or transfers or loans by that Consolidated Subsidiary is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument or Governmental Requirement applicable to such Consolidated
Subsidiary, or is otherwise restricted or prohibited in each case determined in
accordance with GAAP; (iii) any extraordinary gains or losses; and (iv) the
cumulative effect of a change in accounting principles and any gains or losses
attributable to writeups or write downs of assets.
"Consolidated Subsidiaries" shall mean each Subsidiary of a Person
(whether now existing or hereafter created or acquired) the financial
statements of which shall be (or should have been) consolidated with the
financial statements of such Person in accordance with GAAP. Unless otherwise
indicated, each reference to the term "Consolidated Subsidiary" shall mean a
Subsidiary consolidated with the Borrower.
"Debt" shall mean, for any Person the sum of the following (without
duplication): (i) all obligations of such Person for borrowed money or evidenced
by bonds, debentures, notes or other similar instruments; (ii) all obligations
of such Person (whether contingent or otherwise) in respect of bankers'
acceptances, letters of credit, surety or other bonds and similar instruments;
(iii) all obligations of such Person to pay the deferred purchase price of
Property or services (other than for borrowed money); (iv) all obligations under
leases which shall have been, or should have been, in accordance with GAAP,
recorded as capital leases in respect of which such Person is liable (whether
contingent or otherwise); (v) all obligations under operating leases which
require such Person or its Affiliate to make payments over the term of such
lease, including payments at termination, based on the purchase price or
appraisal value of the Property subject to such lease plus a marginal interest
rate, and used primarily as a financing vehicle for, or to monetize, such
Property; (vi) all Debt (as described in the other clauses of this definition)
and other obligations of others secured by a Lien on any asset of such Person,
whether or not such Debt is assumed by such Person; (vii) all Debt (as described
in the other clauses of this definition) and other obligations of others
guaranteed by such Person or in which such Person otherwise assures a creditor
against loss of the debtor or obligations of others; (viii) all obligations or
undertakings of such Person to maintain or cause to be maintained the financial
position or covenants of others or to purchase the Debt or Property of others;
(ix) obligations to deliver goods or services, including Hydrocarbons in
consideration of advance payments; (x) obligations to pay for goods or services
whether or not such goods or services are actually received or utilized by such
Person which are more than 90 days past due; (xi) any Debt of a Special Entity
for which such Person is liable either by agreement or because of a Governmental
Requirement; (xii) the undischarged balance of any production payment created by
such Person or for the creation of which such Person directly or indirectly
received payment, to the extent such production payment would be reflected on a
consolidated balance sheet of such person.
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"Default" shall mean an Event of Default or an event which with notice
or lapse of time or both would become an Event of Default.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"EBITDAX" shall mean, for any period, the sum of Consolidated Net
Income for such period plus the following expenses or charges to the extent
deducted from Consolidated Net Income in such period: interest, income taxes,
depreciation, depletion, amortization, exploration expense and other non-cash
expenses, determined on a consolidated basis in accordance with GAAP.
"Engineering Reports" shall have the meaning assigned such term in
Section 2.08.
"Environmental Laws" shall mean any and all Governmental Requirements
pertaining to health or the environment in effect in any and all jurisdictions
in which the Borrower or any Subsidiary is conducting or at any time has
conducted business, or where any Property of the Borrower or any Subsidiary is
located, including without limitation, the Oil Pollution Act of 1990 ("OPA"),
the Clean Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 ("CERCLA"), as amended, the Federal
Water Pollution Control Act, as amended, the Occupational Safety and Health
Act of 1970, as amended, the Resource Conservation and Recovery Act of 1976
("RCRA"), as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended,
and other environmental conservation or protection laws. The term "oil" shall
have the meaning specified in OPA, the terms "hazardous substance" and "release"
(or "threatened release") have the meanings specified in CERCLA, and the terms
"solid waste" and "disposal" (or "disposed") have the meanings specified in RCRA
provided, however, that (i) in the event either OPA, CERCLA or RCRA is amended
so as to broaden the meaning of any term defined thereby, such broader meaning
shall apply subsequent to the effective date of such amendment and (ii) to the
extent the laws of the state in which any Property of the Borrower or any
Subsidiary is located establish a meaning for "oil," "hazardous substance,"
"release," "solid waste" or "disposal" which is broader than that specified in
either OPA, CERCLA or RCRA, such broader meaning shall apply.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time and any successor statute.
"ERISA Affiliate" shall mean each trade or business (whether or not
incorporated) which together with the Borrower or any Subsidiary would be deemed
to be a "single employer" within the meaning of section 4001(b)(1) of ERISA or
subsections (b), (c), (m) or (o) of section 414 of the Code.
"ERISA Event" shall mean (i) a "Reportable Event" described in Section
4043 of ERISA and the regulations issued thereunder, (ii) the withdrawal of the
Borrower, any Subsidiary or any ERISA Affiliate from a Plan during a plan year
in which it was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA, (iii) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041 of ERISA, (iv)
the institution of proceedings to terminate a Plan by the PBGC or (v) any other
event or condition which might constitute grounds
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under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan.
"Eurodollar Loans" shall mean Loans the interest rates on which are
determined on the basis of rates referred to in the definition of "Eurodollar
Adjusted Rate".
"Eurodollar Adjusted Rate" shall mean, with respect to any Eurodollar
Loan, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) determined by the Administrative Agent to be equal to the quotient of (i)
the Eurodollar Rate for such Loan for the Interest Period for such Loan divided
by (ii)1 minus the Reserve Requirement for such Loan for such Interest Period.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Loan for
any Interest Period, the rate appearing on Page 3750 of the Dow Jones Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the "Eurodollar
Rate" with respect to such Eurodollar Loan for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Event of Default" shall have the meaning assigned such term in
Section 10.01.
"Excepted Liens" shall mean: (i) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP; (ii) Liens in connection with workmen's compensation,
unemployment insurance or other social security, old age pension or public
liability obligations not yet due or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP; (iii) operators', vendors', carriers', warehousemen's,
repairmen's, mechanics', workmen's, materialmen's, construction or other like
Liens arising by operation of law in the ordinary course of business or incident
to the exploration, development, operation and maintenance of Oil and Gas
Properties or statutory landlord's liens, each of which is in respect of
obligations that are not more than 90 days past due or which are being contested
in good faith by appropriate proceedings and for which adequate reserves have
been maintained in accordance with GAAP; (iv) any Liens reserved in leases or
farmout agreements for rent or royalties and for compliance with the terms of
the farmout agreements or leases in the case of leasehold estates, to the extent
that any such Lien referred to in this clause does not materially impair the use
of the Property covered by such Lien for the purposes for which such Property is
held by the Borrower or any Subsidiary or materially impair the value of such
Property subject thereto; (v) encumbrances (other than to secure the payment of
borrowed money or the deferred purchase price of Property or services),
easements, restrictions, servitudes, permits, conditions, covenants, exceptions
or reservations in any rights of way or other Property of the Borrower or any
Subsidiary for the purpose of roads, pipelines, transmission lines,
transportation
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lines, distribution lines for the removal of gas, oil, coal or other minerals or
timber, and other like purposes, or for the joint or common use of real estate,
rights of way, facilities and equipment, and defects, irregularities, zoning
restrictions and deficiencies in title of any rights of way or other Property
which in the aggregate do not materially impair the use of such rights of way or
other Property for the purposes of which such rights of way and other Property
are held by the Borrower or any Subsidiary or materially impair the value of
such Property subject thereto; and (vi) deposits to secure the performance of
bids, trade contracts, surety and appeal bonds, and performance bonds leases,
statutory obligations and other obligations of a like nature incurred in the
ordinary course of business.
"Federal Funds Rate" shall mean, 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 a
member of the Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if the date for which such rate is
to be determined is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to the Administrative Agent on such day on such transactions as
determined by the Administrative Agent.
"Financial Statements" shall mean the financial statement or statements
of the Borrower and its Consolidated Subsidiaries described or referred to in
Section 7.02.
"Fixed Charges" shall mean, for any period, the sum (without
duplication) of (i) interest expense (paid and capitalized) of the Borrower and
its Consolidated Subsidiaries for the relevant period on the aggregate principal
amount of their Debt, plus (ii) scheduled principal payments on the Debt of the
Borrower or any of its Consolidated Subsidiaries made during the relevant
period plus (iii) allowance for cash income taxes of the Borrower and its
Consolidated Subsidiaries for the relevant period.
"Fixed Charge Coverage Ratio" shall mean as of the end of any fiscal
quarter the ratio of (i) EBITDAX for the four fiscal quarters of the Borrower
ending on such date to (ii) Fixed Charges for the four fiscal quarters ending on
such date.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.
"Governmental Authority" shall include the country, the state, county,
city and political subdivisions in which any Person or such Person's Property is
located or which exercises valid jurisdiction over any such Person or such
Person's Property, and any court, agency, department, commission, board, bureau
or instrumentality of any of them including monetary authorities which exercises
valid jurisdiction over any such Person or such Person's Property. Unless
otherwise specified, all references to Governmental Authority herein shall mean
a Governmental Authority having jurisdiction over, where applicable, the
Borrower, its Subsidiaries or any of their property or the Administrative Agent,
any Lender or any Applicable Lending Office.
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"Governmental Requirement" shall mean any law, statute, code,
ordinance, order, determination, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other directive
or requirement (whether or not having the force of law), including, without
limitation, Environmental Laws, energy regulations and occupational, safety and
health standards or controls, of any Governmental Authority.
"Guarantor" shall mean each of the Persons set forth on Exhibit E.
"Guaranty Agreement" shall mean an agreement executed by the Guarantors
in form and substance satisfactory to the Administrative Agent guarantying,
unconditionally, payment of the Indebtedness, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Hedging Agreements" shall mean any commodity, interest rate or
currency swap, cap, floor, collar, forward agreement or other exchange or
protection agreements or any option with respect to any such transaction.
"Highest Lawful Rate" shall mean, with respect to each Lender, the
maximum nonusurious interest rate, if any, that at any time or from time to time
may be contracted for, taken, reserved, charged or received on the Notes or on
other Indebtedness under laws applicable to such Lender which are presently in
effect or, to the extent allowed by law, under such applicable laws which may
hereafter be in effect and which allow a higher maximum nonusurious interest
rate than applicable laws now allow.
"Hydrocarbon Interests" shall mean all rights, titles, interests and
estates now or hereafter acquired in and to oil and gas leases, oil, gas and
mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee
interests, overriding royalty and royalty interests, net profit interests and
production payment interests, including any reserved or residual interests of
whatever nature.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip gasoline,
natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous
hydrocarbons and all products refined or separated therefrom.
"Indebtedness" shall mean any and all amounts owing or to be owing by
the Borrower or any Guarantor to the Administrative Agent, the Issuing Bank
and/or the Lenders in connection with the Loan Documents, and any Hedging
Agreements now or hereafter arising between the Borrower or any Guarantor and
any Lender or its Affiliate and permitted by the terms of this Agreement, and
all renewals, extensions and/or rearrangements of any of the foregoing.
"Indemnified Parties" shall have the meaning assigned such term in
Section 12.03(a)(ii).
"Indemnity Matters" shall mean any and all actions, suits, proceedings
(including any investigations, litigation or inquiries), claims, demands and
causes of action made or threatened against a Person and, in connection
therewith, all losses, liabilities, damages (including, without limitation,
consequential damages) or reasonable costs and expenses of any kind or nature
whatsoever incurred by such Person whether caused by the sole or concurrent
negligence of such Person seeking indemnification.
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"Initial Funding" shall mean the funding of the initial Loans or
issuance of the initial Letters of Credit upon satisfaction of the conditions
set forth in Sections 6.01 and 6.02.
"Initial Reserve Report" shall mean the report of Ryder Scott Company,
dated February 15, 2000 with respect to the Oil and Gas Properties of the
Borrower and its Subsidiaries as of January 1, 2000, copies of which in
sufficient number for each of the Lenders have been delivered to the
Administrative Agent.
"Interest Period" shall mean, with respect to any Eurodollar Loan, the
period commencing on the date such Eurodollar Loan is made 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 2.02 (or
such longer period as may be requested by the Borrower and agreed to by the
Majority Lenders), except that each 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: (i) no Interest Period may end after the
Termination Date; (ii) 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,
if such next succeeding Business Day falls in the next succeeding calendar
month, on the next preceding Business Day); and (iii) no Interest Period shall
have a duration of less than one month and, if the Interest Period for any
Eurodollar Loans would otherwise be for a shorter period, such Loans shall not
be available hereunder.
"Issuing Bank" shall mean Chase or any other Lender agreed to among the
Borrower and the Administrative Agent to issue Letters of Credit.
"LC Commitment" at any time shall mean $10,000,000.
"LC Exposure" at any time shall mean the difference between (i) the
aggregate face amount of all undrawn and uncancelled Letters of Credit plus the
aggregate of all amounts drawn under all Letters of Credit and not yet
reimbursed, minus (ii) the aggregate amount of all cash securing outstanding
Letters of Credit pursuant to Section 2.10(b).
"Lender Termination Date" shall have the meaning assigned such term in
Section 5.07.
"Letter of Credit Agreement" shall mean the written agreements with the
Issuing Bank as issuing lender for any Letter of Credit, executed in connection
with the issuance by the Issuing Bank of the Letters of Credit, such agreements
to be on the Issuing Bank's customary form for letters of credit of comparable
amount and purpose as from time to time in effect or as otherwise agreed to by
the Borrower and the Issuing Bank.
"Letters of Credit" shall mean the letters of credit issued pursuant to
Section 2.01(b) and all reimbursement obligations pertaining to any such letters
of credit and "Letter of Credit" shall mean any one of the Letters of Credit and
the reimbursement obligation pertaining thereto.
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"Lien" shall mean any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and whether such
obligation or claim is fixed or contingent, and including but not limited to (i)
the lien or security interest arising from a mortgage, encumbrance, pledge,
security agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes or (ii) production payments and the like which
constitute Debt, payable out of Oil and Gas Properties. The term "Lien" shall
include reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to be the owner of any Property which
it has acquired or holds subject to a conditional sale agreement, or leases
under a financing lease or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person in a transaction
intended to create a financing.
"Loan Documents" shall mean this Agreement, the Notes, all Letters of
Credit, all Letter of Credit Agreements and the Guaranty Agreement.
"Loans" shall mean the loans as provided for by Section 2.01(a).
"Majority Lenders" shall mean, at any time while no Loans are
outstanding, Lenders having at least sixty-six and two-thirds percent (66-2/3%)
of the Aggregate Commitments and, at any time while Loans are outstanding,
Lenders holding at least sixty-six and two-thirds percent (66-2/3%) of the
outstanding aggregate principal amount of the Loans (without regard to any sale
by a Lender of a participation in any Loan under Section 12.06(c)).
"Material Adverse Effect" shall mean any material and adverse effect on
(i) the assets, liabilities, financial condition, business, operations or
affairs of the Borrower and its Subsidiaries taken as a whole different from
those reflected in the Financial Statements or from the facts represented or
warranted in any Loan Document, or (ii) the ability of the Borrower and its
Subsidiaries taken as a whole to carry out their business as at the Closing Date
or as proposed as of the Closing Date to be conducted or meet their obligations
under the Loan Documents on a timely basis.
"Maximum Credit Amount" shall mean, as to each Lender, the amount set
forth opposite such Lender's name on Annex I under the caption "Maximum Credit
Amounts," as the same may be reduced pursuant to Section 2.03(b) pro rata to
each Lender based on its Percentage Share and as modified from time to time to
reflect any assignments permitted by Section 12.06(b).
"Multiemployer Plan" shall mean a Plan defined as such in Section 3(37)
or 4001(a)(3) of ERISA.
"Net Cash Proceed" shall mean, with respect to any sale or other
disposition of securities, the cash proceeds (including cash equivalents and any
cash payments received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment receivable or
otherwise, but only as and when received) of such sale or other disposition
received by the Borrower or any of its Subsidiaries, net of all attorneys' fees,
accountants' fees, investment banking fees and other customary fees and
commissions actually incurred by the Borrower or any of its Subsidiaries and
documented in connection therewith.
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"Notes" shall mean the Notes provided for by Section 2.06, together
with any and all renewals, extensions for any period, increases, rearrangements,
substitutions or modifications thereof.
"Notice of Termination" shall have the meaning assigned such term in
Section 5.07.
"Oil and Gas Properties" shall mean Hydrocarbon Interests; the
Properties now or hereafter pooled or unitized with Hydrocarbon Interests; all
presently existing or future unitization, pooling agreements and declarations of
pooled units and the units created thereby (including without limitation all
units created under orders, regulations and rules of any Governmental Authority)
which may affect all or any portion of the Hydrocarbon Interests; all operating
agreements, contracts and other agreements which relate to any of the
Hydrocarbon Interests or the production, sale, purchase, exchange or processing
of Hydrocarbons from or attributable to such Hydrocarbon Interests; all
Hydrocarbons in and under and which may be produced and saved or attributable to
the Hydrocarbon Interests, including all oil in tanks, the lands covered thereby
and all rents, issues, profits, proceeds, products, revenues and other incomes
from or attributable to the Hydrocarbon Interests; all tenements, hereditaments,
appurtenances and Properties in any manner appertaining, belonging, affixed or
incidental to the Hydrocarbon Interests; and all Properties, rights, titles,
interests and estates described or referred to above, including any and all
Property, real or personal, now owned or hereinafter acquired and situated upon,
used, held for use or useful in connection with the operating, working or
development of any of such Hydrocarbon Interests or Property (excluding drilling
rigs, automotive equipment or other personal property which may be on such
premises for the purpose of drilling a well or for other similar temporary uses)
and including any and all oil wells, gas wells, injection wells or other wells,
buildings, structures, fuel separators, liquid extraction plants, plant
compressors, pumps, pumping units, field gathering systems, tanks and tank
batteries, fixtures, valves,fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables, wires,
towers, casing, tubing and rods, surface leases, rights-of-way, easements and
servitudes together with all additions, substitutions, replacements, accessions
and attachments to any and all of the foregoing.
"Other Taxes" shall have the meaning assigned such term in Section
4.06(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions.
"Percentage Share" shall mean the percentage of the Aggregate
Commitments to be provided by a Lender under this Agreement as indicated on
Annex I hereto,as modified from time to time to reflect any assignments
permitted by Section 12.06(b).
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, trust, unincorporated organization or
government or any agency, instrumentality or political subdivision thereof, or
any other form of entity.
"Plan" shall mean any employee pension benefit plan, as defined in
Section 3(2) of ERISA, which (i) is currently or hereafter sponsored, maintained
or contributed to by the Borrower, any Subsidiary or an ERISA Affiliate or (ii)
was at any time during the preceding six calendar years sponsored, maintained or
contributed to, by the Borrower, any Subsidiary or an ERISA Affiliate.
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"Post-Default Rate" shall mean, in respect of any principal of any Loan
or any other amount payable by the Borrower under this Agreement or any other
Loan Document which is not paid when due, a rate per annum during the period
commencing on the date such amount became due and ending on the date such amount
is paid in full equal to 2% per annum above the Base Rate as in effect from time
to time plus the Applicable Margin (if any), but in no event to exceed the
Highest Lawful Rate; provided, however, for a Eurodollar Loan, the
"Post-Default Rate" for such principal shall be, for the period commencing on
the date such amount became due and ending on the date such amount is paid in
full at a rate equal to 2% per annum above the interest rate for such Loan as
provided in Section 3.02(a)(ii), but in no event to exceed the Highest Lawful
Rate.
"Prime Rate" shall mean the rate of interest from time to time
announced publicly by the Administrative Agent at the Principal Office as its
prime commercial lending rate. Such rate is set by the Administrative Agent as a
general reference rate of interest, taking into account such factors as the
Administrative Agent may deem appropriate, it being understood that many of the
Administrative Agent's commercial or other loans are priced in relation to such
rate, that it is not necessarily the lowest or best rate actually charged to any
customer and that the Administrative Agent may make various commercial or other
loans at rates of interest having no relationship to such rate.
"Principal Office" shall mean the principal office of the
Administrative Agent, presently located at 270 Park Avenue, New York, New York
10017.
"Prior Credit Agreement" shall mean that certain Credit Agreement dated
as of April 17, 1998 among the Borrower, the lenders parties thereto, and The
Chase Manhattan Bank, as administrative agent for such lenders, as heretofore
amended.
"Prior Debt" shall mean all Debt outstanding under the Prior Credit
Agreement.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Quarterly Dates" shall mean the last day of each March, June,
September, and December in each year, the first of which shall be September 30,
2000, provided, however, that if any such day is not a Business Day, such
Quarterly Date shall be the next succeeding Business Day.
"Redetermination Date" shall mean the date that the redetermined
Borrowing Base becomes effective subject to the notice requirements specified in
Section 2.08(f) both for scheduled redeterminations and unscheduled
redeterminations.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be amended or
supplemented from time to time.
"Regulatory Change" shall mean, with respect to any Lender, any change
after the Closing Date in any Governmental Requirement (including Regulation D)
or the adoption or making after such date of any interpretations, directives or
requests applying to a class of lenders (including such Lender or its Applicable
Lending Office) of or under any Governmental Requirement (whether or not having
the force of law) by any Governmental Authority charged with the interpretation
or administration thereof.
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"Replacement Lender" shall have the meaning assigned such term in
Section 5.07.
"Required Payment" shall have the meaning assigned such term in Section
4.04.
"Reserve Report" shall mean a report, in form and substance
satisfactory to the Administrative Agent, setting forth, as of each December 31
(or such other date in the event of an unscheduled redetermination) the oil and
gas reserves attributable to the Borrower's Oil and Gas Properties together with
a projection of the rate of production and future net income, taxes, operating
expenses and capital expenditures with respect thereto as of such date. The term
"Reserve Report" shall also include the information to be provided by the
Borrower at any other time pursuant to Section 8.07(b).
"Reserve Requirement" shall mean, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks 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 banks by
reason of any Regulatory Change against (i) any category of liabilities which
includes deposits by reference to which the Eurodollar Rate is to be determined
or (ii) any category of extensions of credit or other assets which include a
Eurodollar Loan.
"Responsible Officer" shall mean, as to any Person, the Chief Executive
Officer, the President, any Vice President or the Treasurer of such Person and,
with respect to financial matters, the term "Responsible Officer" shall include
the Chief Financial Officer and Treasurer of such Person. Unless otherwise
specified, all references to a Responsible Officer herein shall mean a
Responsible Officer of the Borrower.
"Scheduled Redetermination Date" shall have the meaning assigned such
term in Section 2.08(d).
"SEC" shall mean the Securities and Exchange Commission or any
successor Governmental Authority.
"Special Entity" shall mean any joint venture, limited liability
company or partnership, general or limited partnership or any other type of
partnership or company other than a corporation in which a Person or one or more
of its other Subsidiaries is a member, owner, partner or joint venturer and
owns, directly or indirectly, at least a majority of the equity of such entity
or controls the management of such entity, but excluding any tax partnerships
that are not classified as partnerships under state law. For purposes of this
definition, any Person which owns directly or indirectly an equity investment in
another Person which allows the first Person to manage or elect managers who
manage the normal activities of such second Person will be deemed to "control"
such second Person (e.g., a sole general partner controls a limited
partnership).
"Subsidiary" shall mean (i) any corporation of which at least a
majority of the outstanding shares of stock having by the terms thereof ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by of the happening of
any
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contingency) is at the time directly or indirectly owned or controlled by
another Person or one or more of such Person's Subsidiaries or by such Person
and one or more of its Subsidiaries and (ii) any Special Entity. Unless
otherwise indicated herein, each reference to the term "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Tangible Net Worth" shall mean, as at any date, the sum of the
following for the Borrower and its Consolidated Subsidiaries determined (without
duplication) in accordance with GAAP:
(i) all items which would be included under shareholders' equity on the
consolidated balance sheet of the Borrower, minus
(ii) the sum of the following: the book value of all assets of the
Borrower and its Consolidated Subsidiaries which should be classified as
intangibles (without duplication of deductions in respect of items already
deducted in arriving at surplus and retained earnings) but in any event
including as such intangibles the following: goodwill, research and development
costs, trademarks, trade names, copyrights, patents and franchises, unamortized
debt discount and expense, all reserves and any writeup in the book value of
assets resulting from a revaluation thereof or resulting from any changes in
GAAP subsequent to December 31, 1999.
"Taxes" shall have the meaning assigned such term in Section 4.06(a).
"Terminated Lender" shall have the meaning assigned such term in
Section 5.07.
"Termination Date" shall mean the earlier to occur of (i) the third
anniversary of the Closing Date or (ii) the date that the Commitments are sooner
terminated pursuant to Sections 203(b) or 10.02.
"Type" shall mean, with respect to any Loan, a Base Rate Loan or a
Eurodollar Loan.
"Wholly-Owned Subsidiary" shall mean, as to any Person, any Subsidiary
of which all of the outstanding shares of Capital Stock (other than directors'
qualifying shares) on a fully-diluted basis, are owned by such Person or one or
more of its Wholly-Owned Subsidiaries or by such Person and one or more of its
Wholly-Owned Subsidiaries. Unless otherwise indicated, each reference to the
"Wholly-Owned Subsidiary" shall mean a Wholly-Owned Subsidiary of the Borrower.
"Wildhorse" shall mean Wildhorse Energy Partners, LLC, a Delaware
limited liability company.
"Wildhorse Limited Liability Company Agreement" shall mean the Limited
Liability Company Agreement between KMI and the Borrower for the formation of
Wildhorse, dated January 31, 1996, as amended.
Section 1.03 Accounting Terms and Determinations Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to
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accounting matters hereunder shall be made, and all financial statements and
certificates and reports as to financial matters required to be furnished to the
Administrative Agent or the Lenders hereunder shall be prepared, in accordance
with GAAP, applied on a basis consistent with the audited financial statements
of the Borrower referred to in Section 7.02 (except for changes concurred with
by the Borrower's independent public accountants).
ARTICLE II
COMMITMENTS
Section 2.01 Loans and Letters of Credit
(a) Loans. Each Lender severally agrees, on the terms and conditions of
this Agreement, to make loans to the Borrower during the period from and
including (i) the Closing Date or (ii) such later date that such Lender
becomes a party to this Agreement as provided in Section 12.06(b), to and up
to, but excluding, the Termination Date in an aggregate principal amount at
any one time outstanding up to, but not exceeding, the amount of such
Lender's Commitment as then in effect provided, however, that the aggregate
principal amount of all such Loans by all Lenders hereunder at any one time
outstanding, together with the LC Exposure, shall not exceed the Aggregate
Commitments. Subject to the terms of this Agreement, during the period from
the Closing Date to and up to, but excluding, the Termination Date, the
Borrower may borrow, repay and reborrow the amount described in this Section
2.01(a).
(b) Letters of Credit. During the period from and including the Closing
Date to, but excluding, the Termination Date, each Issuing Bank, as issuing
bank for the Lenders, agrees to extend credit for the account of the
Borrower or Subsidiary at any time and from time to time by issuing,
renewing, extending or reissuing Letters of Credit; provided however, the LC
Exposure at any one time outstanding shall not exceed the lesser of (i) the
LC Commitment or (ii) the Aggregate Commitments, as then in effect, minus
the aggregate principal amount of all Loans and the LC Exposure then
outstanding. The Lenders shall participate in such Letters of Credit
according to their respective Percentage Shares. Each of the Letters of
Credit shall (i) be issued by the Issuing Bank, (ii) contain such terms and
provisions as are reasonably required by the Issuing Bank, (iii) be for the
account of the Borrower or Subsidiary and (iv) expire not later than two (2)
days before the Termination Date.
(c) Limitation on Types of Loans. Subject to the other terms and
provisions of this Agreement, at the option of the Borrower, the Loans may
be Base Rate Loans or Eurodollar Loans; provided, however, no more than
eight Eurodollar Loans may be outstanding at any time.
Section 2.02 Borrowings, Continuations and Conversions: Letters of
Credit
(a) Borrowings. The Borrower shall give the Administrative Agent (which
shall promptly notify the Lenders) advance notice as hereinafter provided of
each borrowing hereunder, which shall specify (i) the aggregate amount of
such borrowing, (ii) the Type and
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(iii) the date (which shall be a Business Day) of the Loans to be borrowed,
and (iv) (in the case of Eurodollar Loans) the duration of the Interest
Period therefor.
(b) Minimum Amounts. All Base Rate Loan borrowings shall be in amounts
of at least $500,000 or the remaining balance of the Aggregate Commitments,
if less, or any whole multiple of $500,000 in excess thereof, and all
Eurodollar Loans shall be in amounts of at least $1,000,000 or any whole
multiple of $1,000,000 in excess thereof.
(c) Notices. All borrowings, continuations and conversions shall
require advance written notice to the Administrative Agent (which shall
promptly notify the Lenders) in the form of Exhibit B (or telephonic notice
promptly confirmed by such a written notice), which in each case shall be
irrevocable, from the Borrower to be received by the Administrative Agent
not later than 2:00 p.m. New York time at least one Business Day prior to
the date of each Base Rate Loan borrowing and three Business Days prior to
the date of each Eurodollar Loan borrowing, continuation or conversion.
Without in any way limiting the Borrower's obligation to confirm in writing
any telephonic notice, the Administrative Agent may act without liability
upon the basis of telephonic notice believed by the Administrative Agent in
good faith to be from the Borrower prior to receipt of written confirmation.
In each such case, the Borrower hereby waives the right to dispute the
Administrative Agent's record of the terms of such telephonic notice except
in the case of gross negligence or willful misconduct by the Administrative
Agent.
(d) Continuation Options. Subject to the provisions made in this
Section 2.02(d), the Borrower may elect to continue all or any part of any
Eurodollar Loan beyond the expiration of the then current Interest Period
relating thereto by giving advance notice as provided in Section 2.02(c) to
the Administrative Agent (which shall promptly notify the Lenders) of such
election, specifying the amount of such Loan to be continued and the
Interest Period therefor. In the absence of such a timely and proper
election, the Borrower shall be deemed to have elected to convert such
Eurodollar Loan to a Base Rate Loan pursuant to Section 2.02(e) on the last
day of the then expiring Interest Period. All or any part of any Eurodollar
Loan may be continued as provided herein, provided that (i) any continuation
of any such Loan shall be (as to each Loan as continued for an applicable
interest Period) in amounts of at least $1,000,000 or any whole multiple of
$1,000,000 in excess thereof and (ii) no Default shall have occurred and be
continuing. If a Default shall have occurred and be continuing, each
Eurodollar Loan shall be converted to a Base Rate Loan on the last day of
the Interest Period applicable thereto.
(e) Conversion Options. The Borrower may elect to convert all or any
part of any Eurodollar Loan on the last day of the then current Interest
Period relating thereto to a Base Rate Loan by giving advance notice to the
Administrative Agent (which shall promptly notify the Lenders) of such
election. Subject to the provisions made in this Section 2.02(e), the
Borrower may elect to convert all or any part of any Base Rate Loan at any
time and from time to time to a Eurodollar Loan by giving advance notice as
provided in Section 2.02(c) to the Administrative Agent (which shall
promptly notify the Lenders) of such election. All or any part of any
outstanding Loan may be converted as provided herein, provided that (i) any
conversion of any Base Rate Loan into a Eurodollar Loan shall be (as to each
such Loan into which there is a conversion for an applicable Interest
Period) in amounts of at least
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$1,000,000 or any whole multiple of $1,000,000 in excess thereof and (ii) no
Default shall have occurred and be continuing. If a Default shall have
occurred and be continuing, no Base Rate Loan may be converted into a
Eurodollar Loan.
(f) Advances. Not later than 11:00 a.m. New York time on the date
specified for each borrowing hereunder, each Lender shall make available the
amount of the Loan to be made by it on such date to the Administrative
Agent, to an account which the Administrative Agent shall specify, in
immediately available funds, for the account of the Borrower. The amounts so
received by the Administrative Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Borrower by
depositing the same, in immediately available funds, in an account of the
Borrower, designated by the Borrower and maintained at the Principal Office.
(g) Letters of Credit. The Borrower shall give the Issuing Bank (which
shall promptly notify the Lenders of such request and their Percentage Share
of such Letter of Credit) advance notice to be received by the Issuing Bank
not later than 11:00 a.m. New York time not less than three (3) Business
Days prior thereto of each request for the issuance, and at least thirty
(30) Business Days prior to the date of the renewal or extension, of a
Letter of Credit hereunder which request shall specify (i) the amount of
such Letter of Credit, (ii) the date (which shall be a Business Day) such
Letter of Credit is to be issued, renewed or extended, (iii) the duration
thereof, (iv) the name and address of the beneficiary thereof, (v) the type
of the Letter of Credit and (vi) such other information as the
Administrative Agent may reasonably request, all of which shall be
reasonably satisfactory to the Administrative Agent. Subject to the terms
and conditions of this Agreement, on the date specified for the issuance,
renewal or extension of a Letter of Credit, the Administrative Agent shall
issue, renew or extend such Letter of Credit to the beneficiary thereof
In conjunction with the issuance of each Letter of Credit, the Borrower
and the applicable Subsidiary, if the account party, shall execute a Letter
of Credit Agreement. In the event of any conflict between any provision of a
Letter of Credit Agreement and this Agreement, the Borrower, the Issuing
Bank, the Administrative Agent and the Lenders hereby agree that the
provisions of this Agreement shall govern.
The Issuing Bank will send to the Borrower and each Lender, immediately
upon issuance of any Letter of Credit, or an amendment thereto, a true and
complete copy of such Letter of Credit, or such amendment thereto.
Section 2.03 Changes of Commitments
(a) The Aggregate Commitments shall at all times be equal to the lesser
of (i) the Aggregate Maximum Credit Amounts after adjustments resulting from
reductions pursuant to Section 2.03(b) or (ii) the Borrowing Base as
determined from time to time.
(b) The Borrower shall have the right to terminate or to reduce the
amount of the Aggregate Maximum Credit Amounts at any time, or from time to
time, upon not less than three (3) Business Days' prior notice to the
Administrative Agent (which shall promptly notify the Lenders) of each
such termination or reduction, which notice shall specify the effective
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date thereof and the amount of any such reduction (which shall not be less
than $1,000,000 or any whole multiple of $1,000,000 in excess thereof) and
shall be irrevocable and effective only upon receipt by the Administrative
Agent.
(c) The Aggregate Maximum Credit Amounts once terminated or reduced may
not be reinstated.
Section 2.04 Fees.
(a) Commitment Fee. The Borrower shall pay to the Administrative Agent
for the account of each Lender a commitment fee on the daily average unused
amount of the Aggregate Commitments for the period from and including the
Closing Date up to, but excluding, the earlier of the date the Aggregate
Commitments are terminated or the Termination Date at a rate per annum equal
to the applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the Borrowing Base
Utilization as in effect from time to time:
<TABLE>
<CAPTION>
Borrowing Base Utilization Applicable Percentage
-------------------------- ---------------------
<S> <C>
Less than or equal to 25% 0.200%
Greater than 25%, but less than or equal 0.250%.
to 75%
Greater than 75% 0.375%
</TABLE>
Accrued commitment fees shall be payable quarterly in arrears on each Quarterly
Date and on the earlier of the date the Aggregate Commitments are terminated or
the Termination Date.
(b) Letter of Credit Fees
(i) The Borrower agrees to pay the Administrative Agent, for the
account of each Lender, commissions for issuing the Letters of Credit on the
daily average outstanding of the maximum liability of the Issuing Bank
existing from time to time under such Letter of Credit (calculated
separately for each Letter of Credit) at the rate per annum equal to the
Applicable Margin in effect from time to time for Eurodollar Loans, provided
that each Letter of Credit shall bear a minimum commission of $500. Each
Letter of Credit shall be deemed to be outstanding up to the full face
amount of the Letter of Credit until the Issuing Bank has received the
canceled Letter of Credit or a written cancellation of the Letter of Credit
from the beneficiary of such Letter of Credit in form and substance
acceptable to the Issuing Bank or the Letter of Credit expires in accordance
with its terms, or for any reductions in the amount of the Letter of Credit
(other than from a drawing), written notification from the beneficiary of
such Letter of Credit or the Letter of Credit reduces in accordance with its
terms. Such commissions are payable quarterly in arrears on each Quarterly
Date and upon cancellation or expiration of each such Letter of Credit.
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(ii) The Borrower agrees to pay the Administrative Agent, for the
account of the Issuing Bank, commissions for issuing the Letters of Credit
(calculated separately for each Letter of Credit) equal to 0.125% of the
face amount of each Letter of Credit, payable upon issuance of such Letter
of Credit.
(iii) The Borrower agrees to pay the Issuing Bank on demand the
Issuing Bank's customary letter of credit transactional fees, including
amendment fees, negotiation and drawing fees, or other fees customarily
payable with respect to each Letter of Credit.
Section 2.05 Several Obligations. The failure of any Lender to make any
Loan to be made by it or to provide funds for disbursements or reimbursements
under Letters of Credit on the date specified therefor shall not relieve any
other Lender of its obligation to make its Loan or provide funds on such date,
but no Lender shall be responsible for the failure of any other Lender to make a
Loan to be made by such other Lender or to provide funds to be provided by such
other Lender.
Section 2.06 Notes. The Loans made by each Lender shall be evidenced by
a single promissory note of the Borrower in substantially the form of Exhibit A,
dated (i) the Closing Date or (ii) the effective date of an Assignment pursuant
to Section 12.06(b), payable to the order of such Lender in a principal amount
equal to its Maximum Credit Amount as originally in effect and otherwise duly
completed and such substitute Notes as required by Section 12.06(b). The date,
amount, Type, interest rate and Interest Period of each Loan made by each
Lender, and all payments made on account of the principal thereof, shall be
recorded by such Lender on its books for its Note, and, prior to any transfer
may be endorsed by such Lender on the schedule attached to such Note or any
continuation thereof or on any separate record maintained by such Lender.
Failure to make any such notation or to attach a schedule shall not affect any
Lender's or the Borrower's rights or obligations in respect of such Loans or
affect the validity of such transfer by any Lender of its Note.
Section 2.07 Prepayments.
(a) Voluntary Prepayments. The Borrower may prepay the Base Rate Loans
upon not less than one (1) Business Day's prior notice to the Administrative
Agent (which shall promptly notify the Lenders), which notice shall specify
the prepayment date (which shall be a Business Day) and the amount of the
prepayment (which shall be at least $1,000,000 or the remaining aggregate
principal balance outstanding on the Notes) and shall be irrevocable and
effective only upon receipt by the Administrative Agent, provided that
interest on the principal prepaid, accrued to the prepayment date, shall be
paid on the prepayment date. The Borrower may prepay Eurodollar Loans on the
same conditions as for Base Rate Loans (except that prior notice to the
Administrative Agent shall be not less than three (3) Business Days for
Eurodollar Loans) and in addition such prepayments of Eurodollar Loans shall
be subject to the terms of Section 5.05.
(b) Mandatory Prepayments
(i) Termination or Reduction of Aggregate Maximum Revolving Credit
Amounts. If, after giving effect to any termination or reduction of the
Aggregate Maximum Credit Amounts pursuant to Section 2.03(b), the
outstanding aggregate principal amount of the Loans, plus the LC Exposure,
exceeds the Aggregate Maximum Credit Amounts, the
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Borrower shall (i) prepay the Loans on the date of such termination or
reduction in an aggregate principal amount equal to the excess,
together with interest on the principal amount paid accrued to the date
of such prepayment and (ii) if any excess remains after prepaying all
of the Loans because of LC Exposure, pay to the Administrative Agent on
behalf of the Lenders an amount equal to the excess to be held as cash
collateral as provided in Section 2.10(b) hereof.
(ii) Redetermination of Borrowing Base. Upon any
redetermination of the amount of the Borrowing Base in accordance with
Section 2.08, if the redetermined Borrowing Base results in a Borrowing
Base Deficiency, then the Borrower shall, within 60 days of receipt of
written notice thereof, (i) prepay the Loans in a principal amount
sufficient to eliminate such Borrowing Base Deficiency, together with
interest on the principal amount paid accrued to the date of such
prepayment and (ii) if, because of LC Exposure, a Borrowing Base
Deficiency remains after prepaying all of the Loans, pay to the
Administrative Agent on behalf of the Lenders an amount equal to
such remaining Borrowing Base Deficiency to be held as cash collateral
as provided in Section 2.10(b).
(c) Generally. Prepayments permitted or required under this
Section 2.07 shall be without premium or penalty, except as required
under Section 5.05 for prepayment of Eurodollar Loans. Any prepayment
may be reborrowed subject to the then effective Aggregate Commitments.
Section 2.08 Borrowing Base
(a) The Borrowing Base shall be determined in accordance with
Section 2.08(b) by the Administrative Agent and the Co-Agent with the
concurrence of the Majority Lenders and is subject to redetermination
in accordance with Section 2.08(d). Upon any redetermination of the
Borrowing Base, such redetermination shall remain in effect until the
next successive Redetermination Date. So long as any of the Commitments
are in effect or any LC Exposure or Loans are outstanding hereunder,
this facility shall be governed by the then effective Borrowing Base.
During the period from and after the Closing Date until the first
redetermination pursuant to Section 2.08(d), the amount of the
Borrowing Base shall be $225,000,000.
(b) Upon receipt of the Reserve Reports required by Section
8.07 and such other reports, data and supplemental information as may
from time to time be reasonably requested by the Administrative Agent
and the Co-Agent (the "Engineering Reports"), the Administrative Agent
and the Co-Agent will redetermine the Borrowing Base. Such
redetermination will be in accordance with their normal and customary
procedures for evaluating oil and gas reserves and other related
assets as such exist at that particular time. The Administrative Agent
and the Co-Agent, in their sole discretion, may make adjustments to the
rates, volumes and prices and other assumptions set forth therein in
accordance with its normal and customary procedures for evaluating oil
and gas reserves and other related assets as such exist at that
particular time. The Administrative Agent and the Co-Agent shall
propose to the Lenders a new Borrowing Base within 30 days following
receipt by the Administrative Agent, the Co-Agent and the Lenders of
the Engineering Reports in a timely and complete manner. After having
received notice of such proposal by the Administrative
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Agent and the Co-Agent, the Majority Lenders shall have 15 days to
agree or disagree with such proposal. If at the end of the 15 days, the
Majority Lenders have not communicated their approval or disapproval,
such silence shall be deemed to be an approval and the Administrative
Agent's and the Co-Agent's proposal shall be the new Borrowing Base. If
however, the Majority Lenders notify the Administrative Agent within 15
days of their disapproval, the Majority Lenders shall, within a
reasonable period of time, agree on a new Borrowing Base. The
Administrative Agent, the Co-Agent and the Majority Lenders must
approve a new Borrowing Base.
(c) The Administrative Agent and the Co-Agent may exclude any
Oil and Gas Property or portion of production therefrom or any income
from any other Property from the Borrowing Base, at any time, because
title information is not reasonably satisfactory.
(d) So long as any of the Commitments are in effect and until
payment in full of all Loans hereunder, on or around the first Business
Day of each June (being a "Scheduled Redetermination Date"), the
Lenders shall redetermine the amount of the Borrowing Base in
accordance with Section 2.08(b). In addition, (i) the Majority Lenders
may initiate a redetermination of the Borrowing Base at any other time
as they so elect by specifying in writing to the Borrower the date on
which the Borrower is to furnish, or cause to be furnished, a Reserve
Report in accordance with Section 8.07(b) and the date on which such
redetermination is to occur; provided, however, that the Majority
Lenders may initiate only one such unscheduled redetermination during
any consecutive twelve (12) month period, and (ii) the Borrower may,
from time to time, initiate a redetermination of the Borrowing Base at
any other time as it so elects by specifying in writing to the
Administrative Agent (who will promptly notify the Lenders) the date on
which the Borrower will furnish, or cause to be furnished, a Reserve
Report in accordance with Section 8.07(b) and the date on which such
redetermination is requested to occur; provided, however, that the
Borrower may initiate only one such unscheduled redetermination during
any consecutive twelve (12) month period. Any such unscheduled
Borrowing Base redeterminations shall be made in accordance with the
procedures described in Section 2.08(b).
(e) If at any time, and from time to time, the Borrowing Base
Utilization exceeds 50%, the Administrative Agent and the Co-Agent may,
or upon request of the Majority Lenders shall, redetermine the amount
of the Borrowing Base by specifying in writing to the Borrower the date
on which the Borrower is to furnish a Reserve Report in accordance with
Section 8.07(b) and the date on which such redetermination is to occur
provided, however, that the Administrative Agent, the Co-Agent and the
Majority Lenders may initiate only one such unscheduled redetermination
between Scheduled Redetermination Dates in addition to any
redeterminations provided by Section 2.08(d).
(f) The Administrative Agent shall promptly notify in writing
the Borrower and the Lenders of the new Borrowing Base. Any
redetermination of the Borrowing Base shall not be in effect until
written notice is received by the Borrower.
Section 2.09 Assumption of Risks. The Borrower assumes all
risks of the acts or omissions of any beneficiary of any Letter of Credit or any
transferee thereof with respect to its use of such Letter of Credit. Neither any
Issuing Bank (except in the case of gross negligence or willful
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<PAGE> 28
misconduct on the part of such Issuing Bank or any of its employees), its
correspondents nor any Lender shall be responsible for the validity, sufficiency
or genuineness of certificates or other documents or any endorsements thereon,
even if such certificates or other documents should in fact prove to be invalid,
insufficient, fraudulent or forged; for errors, omissions, interruptions or
delays in transmissions or delivery of any messages by mail, telex or otherwise,
whether or not they be in code; for errors in translation or for errors in
interpretation of technical terms; the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; the failure
of any beneficiary or any transferee of any Letter of Credit to comply fully
with conditions required in order to draw upon any Letter of Credit; or for any
other consequences arising from causes beyond such Issuing Bank's control or the
control of such Issuing Bank's correspondents. In addition, neither any Issuing
Bank, the Administrative Agent nor any Lender shall be responsible for any
error, neglect, or default of any of such Issuing Bank's correspondents; and
none of the above shall affect, impair or prevent the vesting of any of such
Issuing Bank's, the Administrative Agent's or any Lender's rights or powers
hereunder or under the Letter of Credit Agreements, all of which rights shall be
cumulative. Each Issuing Bank and its correspondents may accept certificates or
other documents that appear on their face to be in order, without responsibility
for further investigation of any matter contained therein regardless of any
notice or information to the contrary. In furtherance and not in limitation of
the foregoing provisions, the Borrower agrees that any action, inaction or
omission taken or not taken by an Issuing Bank or by any correspondent for such
Issuing Bank in good faith in connection with any Letter of Credit, or any
related drafts, certificates, documents or instruments, shall be binding on the
Borrower and shall not put the Issuing Bank or its correspondents under any
resulting liability to the Borrower.
Section 2.10 Obligation to Reimburse and to Prepay
(a) if a disbursement by an Issuing Bank is made under any
Letter of Credit, the Borrower shall pay to the Administrative Agent
within two (2) Business Days after notice of any such disbursement is
received by the Borrower, the amount of each such disbursement made by
such Issuing Bank under the Letter of Credit (if such payment is not
sooner effected as may be required under this Section 2.10 or under
other provisions of the Letter of Credit), together with interest on
the amount disbursed from and including the date of disbursement until
payment in full of such disbursed amount at a varying rate per annum
equal to (i) the then applicable interest rate for Base Rate Loans
through the second Business Day after notice of such disbursement is
received by the Borrower and (ii) thereafter, the Post-Default Rate for
Base Rate Loans (but in no event to exceed the Highest Lawful Rate)
for the period from and including the third Business Day following the
date of such disbursement to and including the date of repayment in
full of such disbursed amount. The obligations of the Borrower under
this Agreement with respect to each Letter of Credit shall be absolute,
unconditional and irrevocable and shall be paid or performed strictly
in accordance with the terms of this Agreement under all circumstances
whatsoever, including, without limitation, but only to the fullest
extent permitted by applicable law, the following circumstances: (i)
any lack of validity or enforceability of this Agreement, any Letter of
Credit or any other Loan Document; (ii) any amendment or waiver of
(including any default), or any consent to departure from this
Agreement (except to the extent permitted by any amendment or waiver),
any Letter of Credit or any other Loan Document; (iii) the existence of
any claim, set-off, defense or other rights which the Borrower may have
at any time against the beneficiary of
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any Letter of Credit or any transferee of any Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may be
acting), such Issuing Bank, the Administrative Agent, any Lender or any
other Person, whether in connection with this Agreement, any Letter of
Credit, any other Loan Document, the transactions contemplated hereby
or any unrelated transaction; (iv) any statement, certificate, draft,
notice or any other document presented under any Letter of Credit
proves to have been forged, fraudulent, insufficient or invalid in any
respect or any statement therein proves to have been untrue or
inaccurate in any respect whatsoever; (v) payment by such Issuing Bank
under any Letter of Credit against presentation of a draft or
certificate which appears on its face to comply, but does not comply,
with the terms of such Letter of Credit; and (vi) any other
circumstance or happening whatsoever, whether or not similar to any of
the foregoing.
Notwithstanding anything in this Agreement to the contrary, the
Borrower will not be liable for payment or performance that results
from the gross negligence or willful misconduct of the Issuing Bank.
(b) In the event of the occurrence of any Event of Default, a
payment or prepayment pursuant to Section 2.07(b) or the maturity of
the Notes, whether by acceleration or otherwise, an amount equal to the
LC Exposure (or the excess in the case of Section 2.07(b)) shall be
deemed to be forthwith due and owing by the Borrower to the Issuing
Bank, the Administrative Agent and the Lenders as of the date of any
such occurrence; and the Borrower's obligation to pay such amount shall
be absolute and unconditional, without regard to whether any
beneficiary of any such Letter of Credit has attempted to draw down all
or a portion of such amount under the terms of a Letter of Credit, and,
to the fullest extent permitted by applicable law, shall not be subject
to any defense or be affected by a right of set-off, counterclaim or
recoupment which the Borrower may now or hereafter have against any
such beneficiary, the Issuing Bank, the Administrative Agent, the
Lenders or any other Person for any reason whatsoever. Such payments
shall be held by the Issuing Bank on behalf of the Lenders as cash
collateral securing the LC Exposure in an account or accounts at the
Principal Office; and the Borrower hereby, and by its deposit with the
Administrative Agent, grants to the Administrative Agent a security
interest in such cash collateral. In the event of any such payment by
the Borrower of amounts contingently owing under outstanding Letters of
Credit and in the event that thereafter drafts or other demands for
payment complying with the terms of such Letters of Credit are not made
prior to the respective expiration dates thereof, the Administrative
Agent and the Lenders agree, if no Event of Default has occurred and is
continuing or if no other amounts are outstanding under this Agreement,
the Notes or any other Loan Document, to remit to the Borrower amounts
for which the contingent obligations evidenced by the Letters of Credit
have ceased.
(c) Each Lender severally and unconditionally agrees that it
shall promptly reimburse the Issuing Bank an amount equal to such
Lender's Percentage Share of any disbursement made by the Issuing Bank
under any Letter of Credit that is not reimbursed according to this
Section 2.10.
(d) Notwithstanding anything to the contrary contained herein,
if no Default exists and subject to availability under the Aggregate
Commitments (after reduction for LC Exposure), to the extent the
Borrower has not reimbursed the Issuing Bank for any drawn
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<PAGE> 30
upon Letter of Credit within one (1) Business Day after notice of such
disbursement has been received by the Borrower, the amount of such
Letter of Credit reimbursement obligation shall automatically be funded
by the Lenders as a Loan hereunder and used by the Lenders to pay such
Letter of Credit reimbursement obligation. If a Default exists, or if
the funding of such Letter of Credit reimbursement obligation as a Loan
would cause the aggregate amount of all Loans outstanding to exceed the
Aggregate Commitments (after reduction for LC Exposure), such Letter of
Credit reimbursement obligation shall not be funded as a Loan, but
instead shall accrue interest as provided in Section 2.10(a).
Section 2.11 Lending Offices The Loans of each Type made by each Lender
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 Repayment of Loans
(a) Loans. On the Termination Date, the Borrower shall repay
the outstanding aggregate principal of the Notes.
(b) Generally. The Borrower will pay to the Administrative
Agent, for the account of each Lender, the principal payments required
by this Section 3.01.
Section 3.02 Interest
(a) Interest Rates. The Borrower will pay to the
Administrative Agent, for the account of each Lender, interest on the
unpaid principal amount of each Loan made by such Lender for the period
commencing on the date such Loan is made to, but excluding, the date
such Loan shall be paid in full, at the following rates per annum:
(i) if such a Loan is a Base Rate Loan, the Base Rate
(as in effect from time to time) plus the Applicable Margin for Base
Rate Loans (as in effect from time to time), but in no event to exceed
the Highest Lawful Rate; and
(ii) if such a Loan is a Eurodollar Loan, for each
Interest Period relating thereto, the Eurodollar Adjusted Rate for such
Loan plus the Applicable Margin for Eurodollar Loans (as in effect from
time to time), but in no event to exceed the Highest Lawful Rate.
(b) Post-Default Rate. Notwithstanding the foregoing, the
Borrower will pay to the Administrative Agent, for the account of each
Lender interest at the applicable Post-Default Rate on any principal of
any Loan made by such Lender, and (to the fullest extent permitted by
law) on any other amount payable by the Borrower hereunder, under any
Loan Document or under any Note held by such Lender to or for account
of such Lender, for the period commencing on the date such amount
becomes due until the same is paid in full.
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(c) Due Dates. Accrued interest on Base Rate Loans shall be
payable quarterly on each Quarterly Date commencing on September 30,
2000, and accrued interest on each Eurodollar Loan shall be payable on
the last day of the Interest Period therefor and, if such Interest
Period is longer than three months at three-month intervals following
the first day of such Interest Period, except that interest payable at
the Post-Default Rate shall be payable from time to time on demand and
interest on any Eurodollar Loan that is converted into a Base Rate Loan
(pursuant to Section 5.04) shall be payable on the date of conversion
(but only to the extent so converted). Any accrued and unpaid interest
on the Loans on the Termination Date shall be paid on such date.
(d) Determination of Rates. Promptly after the determination
of any interest rate provided for herein or any change therein, the
Administrative Agent shall notify the Lenders to which such interest is
payable and the Borrower thereof. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall, except
in cases of manifest error, be final, conclusive and binding on the
parties.
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 Payments. Except to the extent otherwise provided
herein, all payments of principal, interest and other amounts to be made by the
Borrower under this Agreement, the Notes, and the Letter of Credit Agreements
shall be made in Dollars, in immediately available funds, to the Administrative
Agent at such account as the Administrative Agent shall specify by notice to the
Borrower from time to time, not later than 11:00 a.m. New York time on the date
on which such payments shall become due (each such payment made after such time
on such due date to be deemed to have been made on the next succeeding Business
Day). Such payments shall be made without (to the fullest extent permitted by
applicable law) defense, set-off or counterclaim. Each payment received by the
Administrative Agent under this Agreement or any Note for account of a Lender
shall be paid promptly to such Lender in immediately available funds. Except as
otherwise provided in the definition of "Interest Period", if the due date of
any payment under this Agreement or any Note would otherwise fall on a day which
is not a Business Day such date shall be extended to the next succeeding
Business Day and interest shall be payable for any principal so extended for the
period of such extension. At the time of each payment to the Administrative
Agent of any principal of or interest on any borrowing, the Borrower shall
notify the Administrative Agent of the Loans to which such payment shall apply.
In the absence of such notice the Administrative Agent may specify the Loans to
which such payment shall apply, but to the extent possible such payment or
prepayment will be applied first to the Loans comprised of Base Rate Loans.
Section 4.02 Pro Rata Treatment. Except to the extent
otherwise provided herein each Lender agrees that: (i) each borrowing from the
Lenders under Section 2.01 and each continuation and conversion under Section
2.02 shall be made from the Lenders pro rata in accordance with their Percentage
Share, each payment of fees under Section 2.04(a) and Section 2.04(b)(i) shall
be made for account of the Lenders pro rata in accordance with their Percentage
Share, and each termination or reduction of the amount of the Aggregate Maximum
Credit Amounts under Section 2.03(b) shall be applied to the Commitment of each
Lender, pro rata according to the
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amount of its respective Commitment; (ii) each payment of principal of Loans by
the Borrower shall be made for account of the Lenders pro rata in accordance
with the respective unpaid principal amount of the Loans held by the Lenders;
(iii) each payment of interest on Loans by the Borrower shall be made for
account of the Lenders pro rata in accordance with the amounts of interest due
and payable to the respective Lenders; and (iv) each reimbursement by the
Borrower of disbursements under Letters of Credit shall be made for account of
the Issuing Bank or, if funded by the Lenders, pro rata for the account of the
Lenders, in accordance with the amounts of reimbursement obligations due and
payable to each respective Lender.
Section 4.03 Computations. Interest on Eurodollar Loans shall
be computed on the basis of a year of 360 days and actual days elapsed
(including the first day but excluding the last day) occurring in the period for
which such interest is payable, unless such calculation would exceed the Highest
Lawful Rate, in which case interest shall be calculated on the per annum basis
of a year of 365 or 366 days, as the case may be. Interest on Base Rate Loans
and fees shall be computed on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed (including the first day but excluding the
last day) occurring in the period for which such interest is payable.
Section 4.04 Non-receipt of Funds by the Administrative Agent.
Unless the Administrative Agent shall have been notified by a Lender or the
Borrower prior to the date on which such notifying party is scheduled to make
payment to the Administrative Agent (in the case of a Lender) of the proceeds of
a Loan or a payment under a Letter of Credit to be made by it hereunder or (in
the case of the Borrower) a payment to the Administrative Agent for account of
one or more of the Lenders hereunder (such payment being herein called
the "Required Payment"), which notice shall be effective upon receipt, that it
does not intend to make the Required Payment to the Administrative Agent, the
Administrative Agent may assume that time Required Payment has been made and
may, in reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient(s) on such date and, if such
Lender or the Borrower (as the case may be) has not in fact made the Required
Payment to the Administrative Agent, the recipient(s) of such payment shall, on
demand, repay to the Administrative Agent the amount so made available together
with interest thereon in respect of each day during the period commencing on the
date such amount was so made available by the Administrative Agent until, but
excluding, the date the Administrative Agent recovers such amount at a rate per
annum which, for any Lender as recipient, will be equal to the Federal Funds
Rate, and for the Borrower as recipient, will be equal to the Base Rate plus the
Applicable Margin.
Section 4.05 Set-off, Sharing of Payments, Etc.
(a) The Borrower agrees that, in addition to (and without
limitation of) any right of set-off, bankers' lien or counterclaim a
Lender may otherwise have, each Lender shall have the right and be
entitled (after consultation with the Administrative Agent), at its
option, to offset balances held by it or by any of its Affiliates for
account of the Borrower or any Subsidiary at any of its offices, in
Dollars or in any other currency, against any principal of or interest
on any of such Lender's Loans, or any other amount payable to such
Lender hereunder, which is not paid when due (regardless of whether
such balances are then due to the Borrower), in which case it shall
promptly notify the Borrower and the Administrative Agent thereof,
provided that such Lender's failure to give such notice shall not
affect the validity thereof.
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(b) If any Lender shall obtain payment of any principal of or
interest on any Loan made by it to the Borrower under this Agreement
(or reimbursement as to any Letter of Credit) through the exercise of
any right of set-off, banker's lien or counterclaim or similar right or
otherwise, and, as a result of such payment, such Lender shall have
received a greater percentage of the principal or interest (or
reimbursement) then due hereunder by the Borrower to such Lender than
the percentage received by any other Lenders, it shall promptly (i)
notify the Administrative Agent and each other Lender thereof and (ii)
purchase from such other Lenders participations in (or, if and to the
extent specified by such Lender, direct interests in) the Loans (or
participations in Letters of Credit) made by such other Lenders (or in
interest due thereon, as the case may be) in such amounts, and make
such other adjustments from time to time as shall be equitable, to the
end that all the Lenders shall share the benefit of such excess payment
(net of any expenses which may be incurred by such Lender in obtaining
or preserving such excess payment) pro rata in accordance with the
unpaid principal and/or interest on the Loans held by each of the
Lenders (or reimbursements of Letters of Credit). To such end all the
Lenders shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is
rescinded or must otherwise be restored. The Borrower agrees that any
Lender so purchasing a participation (or direct interest) in the Loans
made by other Lenders (or in interest due thereon, as the case may be)
may exercise all rights of set-off, banker's lien, counterclaim or
similar rights with respect to such participation as fully as if such
Lender were a direct holder of Loans (or Letters of Credit) in the
amount of such participation. Nothing contained herein shall require
any Lender to exercise any such right or shall affect the right of any
Lender to exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness or obligation of the
Borrower. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a set-off
to which this Section 4.05 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Lenders entitled under this
Section 4.05 to share the benefits of any recovery on such secured
claim.
Section 4.06 Taxes.
(a) Payments Free and Clear. Any and all payments by the
Borrower hereunder shall be made, in accordance with Section 4.01, free
and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto excluding, in the case of each Lender,
any Issuing Bank and the Administrative Agent, taxes imposed on its
income, and franchise or similar taxes imposed on it, by (i) any
jurisdiction (or political subdivision thereof) of which the
Administrative Agent, such Issuing Bank or such Lender, as the case may
be, is a citizen or resident or in which such Lender has an Applicable
Lending Office, (ii) the jurisdiction (or any political
subdivision thereof) in which the Administrative Agent, such Issuing
Bank or such Lender is organized, or (iii) any jurisdiction (or
political subdivision thereof) in which such Lender, such Issuing Bank
or the Administrative Agent is presently doing business which taxes are
imposed solely as a result of doing business in such jurisdiction (all
such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to the Lenders, any Issuing Bank
or the Administrative Agent (i) the sum payable shall be increased by
the amount necessary so that after making all
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required deductions (including deductions applicable to additional sums
payable under this Section 4.06) such Lender, such Issuing Bank or the
Administrative Agent (as the case may be) shall receive an amount equal
to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant taxing authority or
other Governmental Authority in accordance with applicable law.
(b) Other Taxes. In addition, to the fullest extent permitted
by applicable law, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with
respect to, this Agreement, any Assignment or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) INDEMNIFICATION. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE BORROWER WILL INDEMNIFY EACH LENDER, ISSUING BANK
AND THE ADMINISTRATIVE AGENT FOR THE FULL AMOUNT OF TAXES AND OTHER
TAXES (INCLUDING, BUT NOT LIMITED TO, ANY TAXES OR OTHER TAXES IMPOSED
BY ANY GOVERNMENTAL AUTHORITY ON AMOUNTS PAYABLE UNDER THIS SECTION
4.06) PAID BY SUCH LENDER, THE ISSUING BANK OR THE ADMINISTRATIVE AGENT
(ON THEIR BEHALF OR ON BEHALF OF ANY LENDER), AS THE CASE MAY BE, AND
ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND EXPENSES) ARISING
THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH TAXES OR OTHER
TAXES WERE CORRECTLY OR LEGALLY ASSERTED UNLESS THE PAYMENT OF SUCH
TAXES WAS NOT CORRECTLY OR LEGALLY ASSERTED AND SUCH ISSUING BANK'S,
LENDER'S OR THE ADMINISTRATIVE AGENT'S PAYMENT OF SUCH TAXES OR OTHER
TAXES WAS THE RESULT OF ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. ANY
PAYMENT PURSUANT TO SUCH INDEMNIFICATION SHALL BE MADE WITHIN THIRTY
(30) DAYS AFTER THE DATE ANY LENDER, ANY ISSUING BANK OR THE
ADMINISTRATIVE AGENT, AS THE CASE MAY BE, MAKES WRITTEN DEMAND
THEREFOR. IF ANY LENDER, ANY ISSUING BANK OR THE ADMINISTRATIVE AGENT
RECEIVES A REFUND OR CREDIT IN RESPECT OF ANY TAXES OR OTHER TAXES FOR
WHICH SUCH LENDER, SUCH ISSUING BANK OR THE ADMINISTRATIVE AGENT HAS
RECEIVED PAYMENT FROM THE BORROWER IT SHALL PROMPTLY NOTIFY THE
BORROWER OF SUCH REFUND OR CREDIT AND SHALL, IF NO DEFAULT HAS OCCURRED
AND IS CONTINUING, WITHIN THIRTY (30) DAYS AFTER RECEIPT OF A REQUEST
BY THE BORROWER (OR PROMPTLY UPON RECEIPT, IF THE BORROWER HAS
REQUESTED APPLICATION FOR SUCH REFUND OR CREDIT PURSUANT HERETO), PAY
AN AMOUNT EQUAL TO SUCH REFUND OR CREDIT TO THE BORROWER WITHOUT
INTEREST (BUT WITH ANY INTEREST SO REFUNDED OR CREDITED), PROVIDED THAT
THE BORROWER, UPON THE REQUEST OF SUCH LENDER, SUCH ISSUING BANK OR THE
ADMINISTRATIVE AGENT, AGREES TO RETURN SUCH REFUND OR CREDIT (PLUS
PENALTIES, INTEREST OR OTHER CHARGES) TO SUCH LENDER, SUCH ISSUING BANK
OR THE ADMINISTRATIVE AGENT IN THE EVENT SUCH LENDER, SUCH ISSUING BANK
OR THE ADMINISTRATIVE AGENT IS REQUIRED TO REPAY SUCH REFUND OR CREDIT.
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(d) Lender Representations
(i) Each Lender represents that it is either (i) a
banking association or corporation organized under the laws of the
United States of America or any state thereof or (2) it is entitled to
complete exemption from United States withholding tax imposed on or
with respect to any payments, including fees, to be made to it pursuant
to this Agreement (A) under an applicable provision of a tax convention
to which the United States of America is a party or (B) because it is
acting through a branch, agency or office in the United States of
America and any payment to be received by it hereunder is effectively
connected with a trade or business in the United States of America.
Each Lender that is not a banking association or corporation organized
under the laws of the United States of America or any state thereof
agrees to provide to the Borrower and the Administrative Agent on the
Closing Date, or on the date of its delivery of the Assignment
pursuant to which it becomes a Lender, and at such other times as
required by United States law or as the Borrower or the Administrative
Agent shall reasonably request, two accurate and complete original
signed copies of either (A) Internal Revenue Service Form W-8-ECI (or
successor form) certifying that all payments to be made to it hereunder
will be effectively connected to a United States trade or business (the
"Form W-8-ECI Certification") or (B) Internal Revenue Service Form
W-8-BEN (or successor form) certifying that it is entitled to the
benefit of a provision of a tax convention to which the United States
of America is a party which completely exempts from United States
withholding tax all payments to be made to it hereunder (the "Form
W-8-BEN Certification"). In addition, each Lender agrees that if it
previously filed a Form W-8-ECI Certification, it will deliver to the
Borrower and the Administrative Agent a new Form W-8-ECI Certification
prior to the first payment date occurring in each of its subsequent
taxable years; and if it previously filed a Form W-8-BEN Certification,
it will deliver to the Borrower and the Administrative Agent a new
certification prior to the first payment date falling in the third year
following the previous filing of such certification. Each Lender also
agrees to deliver to the Borrower and the Administrative Agent such
other or supplemental forms as may at any time be required as a result
of changes in applicable law or regulation in order to confirm or
maintain in effect its entitlement to exemption from United States
withholding tax on any payments hereunder, provided that the
circumstances of such Lender at the relevant time and applicable laws
permit it to do so. If a Lender determines, as a result of any change
in either (i) a Governmental Requirement or (ii) its circumstances,
that it is unable to submit any form or certificate that it is
obligated to submit pursuant to this Section 4.06, or that it is
required to withdraw or cancel any such form or certificate previously
submitted, it shall promptly notify the Borrower and the Administrative
Agent of such fact. If a Lender is organized under the laws of a
jurisdiction outside the United States of America, unless the Borrower
and the Administrative Agent have received a Form W-8-BEN Certification
or Form W-8-ECI Certification satisfactory to them indicating that all
payments to be made to such Lender hereunder are not subject to United
States withholding tax, the Borrower shall withhold taxes from such
payments at the applicable statutory rate. Each Lender agrees to
indemnify and hold harmless the Borrower or Administrative Agent, as
applicable, from any United States taxes, penalties, interest and other
expenses, costs and losses incurred or payable by (i) the
Administrative Agent as a result of such Lender's failure to submit any
form or certificate that it is required to provide pursuant to this
Section 4.06 or (ii) the Borrower or the Administrative Agent as a
result of their reliance on any such form or certificate which such
Lender has provided to them pursuant to this Section 4.06.
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<PAGE> 36
(ii) For any period with respect to which a Lender
has failed to provide the Borrower with the form required pursuant to
this Section 4.06, if any, (other than if such failure is due to a
change in a Governmental Requirement occurring subsequent to the date
on which a form originally was required to be provided), such Lender
shall not be entitled to indemnification under Section 4.06 with
respect to taxes imposed by the United States which taxes would not
have been imposed but for such failure to provide such forms, provided,
however, that if a Lender, which is otherwise exempt from or subject to
a reduced rate of withholding tax, becomes subject to taxes because of
its failure to deliver a form required hereunder, the Borrower shall
take such steps as such Lender shall reasonably request to assist such
Lender to recover such taxes.
(iii) Any Lender claiming any additional amounts
payable pursuant to this Section 4.06 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any
certificate or document requested by the Borrower or the Administrative
Agent or to change the jurisdiction of its Applicable Lending Office or
to contest any tax imposed if the making of such a filing or change or
contesting such tax would avoid the need for or reduce the amount of
any such additional amounts that may thereafter accrue and would not,
in the sole determination of such Lender, be otherwise disadvantageous
to such Lender.
ARTICLE V
CAPITAL ADEQUACY
Section 5.01 Additional Costs
(a) Eurodollar Regulations, etc. The Borrower shall pay
directly to each Lender from time to time such amounts as such Lender
may determine to be necessary to compensate such Lender for any costs
which it determines are attributable to its making or maintaining of
any Eurodollar Loans or issuing or participating in Letters of Credit
hereunder or its obligation to make any Eurodollar Loans or issue or
participate in any Letters of Credit hereunder, or any reduction in any
amount receivable by such Lender hereunder in respect of any of such
Eurodollar Loans, Letters of Credit or such obligation (such increases
in costs and reductions in amounts receivable being herein called
"Additional Costs"), resulting from any Regulatory Change which: (i)
changes the basis of taxation of any amounts payable to such Lender
under this Agreement or any Note in respect of any of such Eurodollar
Loans or Letters of Credit (other than taxes imposed on the overall net
income of such Lender or of its Applicable Lending Office for any of
such Eurodollar Loans by the jurisdiction in which such Lender has its
principal office or Applicable Lending Office); or (ii) imposes or
modifies any reserve, special deposit, minimum capital, capital ratio
or similar requirements relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of such Lender, or
the Commitment or Loans of such Lender or the Eurodollar interbank
market; or (iii) imposes any other condition affecting this Agreement
or any Note (or any of such extensions of credit or liabilities) or
such Lender's Commitment or Loans. Each Lender will notify the
Administrative Agent and the Borrower of any event occurring after the
Closing Date which will entitle such Lender to compensation pursuant to
this Section 5.01(a) as promptly as practicable after it obtains
knowledge thereof and determines to request such
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<PAGE> 37
compensation, and will designate a different Applicable Lending Office
for the Loans of such Lender affected by such event if such designation
will avoid the need for, or reduce the amount of, such compensation and
will not, in the sole opinion of such Lender, be disadvantageous to
such Lender, provided that such Lender shall have no obligation to so
designate an Applicable Lending Office located in the United States. If
any Lender requests compensation from the Borrower under this Section
5.01(a), the Borrower may, by notice to such Lender, suspend the
obligation of such Lender to make additional Loans of the Type with
respect to which such compensation is requested until the Regulatory
Change giving rise to such request ceases to be in effect (in which
case the provisions of Section 5.04 shall be applicable).
(b) Regulatory Change. Without limiting the effect of the
provisions of Section 5.01(a), in the event that at any time (by reason
of any Regulatory Change or any other circumstances arising after the
Closing Date affecting (A) any Lender, (B) the Eurodollar interbank
market or (C) such Lender's position in such market), the Eurodollar
Adjusted Rate for a particular Interest Period, as determined in good
faith by