<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): DECEMBER 18, 1997
PIONEER NATURAL RESOURCES COMPANY
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 1-13245 75-2702753
- ------------------------------------ --------------- ------------------------
(State or other jurisdiction of Commission (I.R.S. Employer
incorporation or organization) File Number Identification Number)
1400 WILLIAMS SQUARE WEST, 5205 N. O'CONNOR BLVD., IRVING, TEXAS 75039
- ---------------------------------------------------------------- -----------
(Address of principal executive offices) (Zip code)
Registrant's Telephone Number, including area code: (972) 444-9001
Not applicable
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
<PAGE> 2
PIONEER NATURAL RESOURCES COMPANY
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Item 2. Acquisition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 5. Other Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 7. Financial Statements and Exhibits:
Preliminary Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Unaudited Pro Forma Combined Financial Statements of Pioneer Natural Resources Company:
Unaudited Pro Forma Combined Balance Sheet of Pioneer Natural Resources
Company as of September 30, 1997 . . . . . . . . . . . . . . . . . . . . . . . 6
Unaudited Pro Forma Combined Statement of Operations of Pioneer Natural
Resources Company for the nine months ended September 30, 1997 . . . . . . . . 7
Unaudited Pro Forma Combined Statement of Operations of Pioneer Natural
Resources Company for the year ended December 31, 1996 . . . . . . . . . . . . 8
Unaudited Pro Forma Financial Statements of Pioneer Natural Resources Company:
Unaudited Pro Forma Statement of Operations of Pioneer Natural Resources
Company for the nine months ended September 30, 1997 . . . . . . . . . . . . . 9
Unaudited Pro Forma Statement of Operations of Pioneer Natural Resources
Company for the year ended December 31, 1996 . . . . . . . . . . . . . . . . . 10
Unaudited Pro Forma Adjusted Statement of Operations of Pioneer Natural
Resources Company for the year ended December 31, 1996 . . . . . . . . . . . . 11
Unaudited Pro Forma Statement of Operations of Mesa Inc. for the year ended
December 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Unaudited Pro Forma Financial Statements of Chauvco Resources, Ltd.:
Unaudited Pro Forma Balance Sheet of Chauvco Resources Ltd. as of
September 30, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Unaudited Pro Forma Statement of Operations of Chauvco Resources Ltd.
for the nine months ended September 30, 1997 . . . . . . . . . . . . . . . . . 14
Notes to Unaudited Pro Forma Combined Financial Statements . . . . . . . . . . . . . 15
Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>
2
<PAGE> 3
ITEM 2. ACQUISITION OF ASSETS
On September 3, 1997, Pioneer Natural Resources Company ("Pioneer")
entered into an agreement (the "Combination Agreement") to acquire the Canadian
and Argentine oil and gas businesses of Chauvco Resources Ltd. ("Chauvco"), a
publicly traded independent oil and gas company based in Calgary, Canada (the
"Transaction"), and to spin-off to Chauvco shareholders Chauvco's Gabonese oil
and gas operations and other international interests through Chauvco's existing
subsidiary, Chauvco Resources International Ltd. ("CRI"). The Transaction
was completed on December 18, 1997.
In accordance with the Combination Agreement, each holder of Chauvco
common shares ("Chauvco Shareholder") received for each Chauvco common share
held (i) one share of CRI and (ii) in certain cases, at the election of the
Chauvco Shareholder, either the number of Pioneer common shares or shares
exchangeable into Pioneer shares ("Exchangeable Shares") or a combination of
both determined by multiplying each Chauvco common share held by an exchange
ratio of 0.493827. In total, the acquisition consideration paid to the
shareholders of Chauvco was approximately $946 million, consisting of the
issuance of 14,015,010 shares of Pioneer common stock and 10,901,924
Exchangeable Shares and the assumption of $228 million of long-term debt. Cash
payments were made in lieu of issuing fractional shares.
For a detailed description of the assets acquired and liabilities assumed
from Chauvco, see the Joint Management Information Circular and Proxy Statement
dated November 14, 1997 incorporated herein by reference. In accordance with
the provisions of Accounting Principles Board No. 16, "Business Combinations,"
("APB 16"), the Transaction was treated as an acquisition of Chauvco by
Pioneer. See "Item 7. Financial Statements and Exhibits" for the preliminary
allocation of the total purchase price of Chauvco to the acquired assets and
liabilities based upon the estimated fair values assigned to each of the
significant assets acquired and liabilities assumed. Any future adjustments to
the allocation of the purchase price are not anticipated to be material to
Pioneer's financial statements.
ITEM 5. OTHER EVENTS
Tender Offer for Senior Subordinated Notes. On November 14, 1997, Pioneer
Natural Resources USA, Inc. ("Pioneer USA"), a wholly-owned subsidiary of
Pioneer, announced an offer to purchase for cash any and all of its $264
million 11 5/8% Senior Subordinated Discount Notes Due 2006 ("11 5/8% Notes")
and its $325 million 10 5/8% Senior Subordinated Notes Due 2006 ("10 5/8%
Notes") (collectively the "Mesa Notes") for a purchase price of $1,171.40 and
$829.90, respectively, per $1,000 tendered plus any interest accrued on the 10
5/8% Notes (the "Tender Offer"). As of December 15, 1997, the offer expiration
date, the respective Mesa Note holders had tendered approximately $319.1
million, or 98%, of the 10 5/8% Notes and approximately $241.5 million, or 91%,
of the 11 5/8% Notes. On December 18, 1997, Pioneer USA paid holders an
aggregate of approximately $574.3 million for the principal amount tendered on
the Mesa Notes, and Pioneer USA paid to the holders of the 10 5/8% Notes
accrued interest through the payment date of the Tender Offer of approximately
$15.7 million. As a result of the Tender Offer, Pioneer will recognize
after-tax extraordinary loss on early extinguishment of debt of $11.9 million
during the fourth quarter of 1997. Pioneer USA financed the purchase price of
the Mesa Notes tendered in the offer with borrowings under its bank credit
facility.
In connection with the Tender Offer, the holders of the requisite
percentage of each outstanding issue of Mesa Notes approved amendments to the
respective indentures governing the Mesa Notes which eliminated or modified
most of the restrictive covenants contained in the indentures. Such amendments
became effective on December 18, 1997, upon completion of the Tender Offer.
American Cometra Acquisition. On December 19, 1997, Pioneer completed the
acquisition of assets in the East Texas Basin from affiliates of American
Cometra, Inc. ("ACI") and Rockland Pipeline Co. ("Rockland"), both
subsidiaries of Electrafina S.A. of Belgium ("American Cometra Acquisition").
The total consideration paid was approximately $126 million, consisting of $80
million in cash and 1.7 million shares of Pioneer's common stock. Pioneer
acquired ACI's producing wells, acreage, seismic data, royalties and mineral
interests, and Rockland's gathering system, pipeline and gas processing plant
in the East Texas Basin. This acquisition establishes a critical mass and core
area in the East Texas Basin for Pioneer and provides it with a major presence
in the Cotton Valley Reef trend.
1997 Asset Divestitures. During December 1997, Pioneer completed the sale
of certain non-strategic properties for cash proceeds of approximately $103
million (the "1997 Asset Divestitures"). These divestitures involve
approximately 800 properties and represent less than 3% of Pioneer's total
reserve base and about 1% of Pioneer's daily production. Proceeds from these
divestitures were primarily used to fund the American Cometra Acquisition
described above.
Credit Facility Agreements. On December 18, 1997, Pioneer amended and
restated its domestic credit facilities ("United States Credit Facility") in
order to substitute Pioneer as the borrower in place of Pioneer USA. The United
States Credit Facility consists of two credit facility agreements. The primary
facility provides for a $1.075 billion revolving line of credit with a maturity
date of August 7, 2002. The additional facility provides for a $300 million
line of credit with a maturity date of August 5, 1998. Advances on the United
States Credit Facility bear interest, at the borrower's option, based on (a)
the prime rate of NationsBank of Texas, N.A., (b) a Eurodollar rate
(substantially equal to LIBOR), adjusted for the reserve requirement as
determined by the Board of Governors of the Federal Reserve System with respect
to transactions in Eurocurrency liabilities ("LIBOR Rate"), or (c) a
competitive bid rate as quoted by the lenders electing to participate following
the borrower's request. Advances that bear a LIBOR Rate have periodic
maturities, at the borrower's option, of one, two, three, six, nine or twelve
months. Advances that bear competitive bid rates have periodic maturities, at
the borrower's option, of not less than 15 days nor more than 360 days. The
interest rates on LIBOR Rate advances vary with interest rate margins ranging
from 18 basis points to 45 basis points. The interest rate margin is determined
by a grid based upon the long-term public debt rating of Pioneer's senior
unsecured indebtedness. Pioneer's obligations are guaranteed by Pioneer USA and
certain other U.S. subsidiaries, and are secured by a pledge of 65% of the
capital stock of certain non-U.S. subsidiaries. The United States Credit
Facility has been used to refinance the debt of Parker & Parsley Petroleum
Company and MESA Inc. in their merger on August 7, 1997, to fund the offer to
purchase the Mesa Notes, to fund the acquisition of assets from ACI and
Rockland, and for other general corporate purposes. Pioneer also executed a
$100 million note (the "Term Note"), dated as of December 22, 1997, payable to
NationsBank of Texas, N.A. for use for working capital. The Term Note has a
maturity date of April 1, 1999, and bears interest at the borrower's option, at
the rates set forth in clauses (a) and (b) of this paragraph. Also on December
18, 1997, Pioneer refinanced all of Chauvco's outstanding debt by establishing
a $290 million Canadian credit facility under which the borrower is Chauvco,
and Pioneer and certain of its subsidiaries (not including Pioneer USA) provide
guarantees.
Restructuring. On December 30, 1997, Pioneer and Pioneer USA completed a
restructuring that resulted in Pioneer becoming the primary obligor on the
$28.4 million of Mesa Notes that were not tendered and on the $300 million of
Parker & Parsley Petroleum Company's 8 7/8% Senior Notes Due 2005 and 8 1/4%
Senior Notes Due 2007 ("Parker & Parsley Notes"). Pioneer USA has guaranteed
the payment of principal and interest on the Parker & Parsley Notes, but has
not guaranteed the Mesa Notes. The guarantee of the Parker & Parsley Notes will
terminate if Pioneer USA is released from its guarantees of Pioneer's United
States Credit Facility.
Fourth Quarter Charges. During the fourth quarter of 1997, Pioneer will
recognize certain charges which adversely affect Pioneer's financial results.
In addition to the $11.9 million after-tax extraordinary loss related to the
Tender Offer noted above, Pioneer estimates that it will recognize after-tax
charges of between $7 - $10 million for the purchase of 3-D seismic data and
approximately $3 million resulting from the write-off of an unsuccessful well
in Guatemala. The decline of oil and gas prices during the fourth quarter of
1997 will also have an adverse effect on Pioneer's financial results.
3
<PAGE> 4
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
In accordance with the Combination Agreement, each holder of Chauvco common
shares received for each Chauvco common share held (i) one CRI Share and (ii) in
certain cases, at the election of the Chauvco Shareholder, either the number of
shares of Pioneer common stock or Exchangeable Shares, or a combination of both,
determined by multiplying each Chauvco Common Share held by an exchange ratio of
.493827. In total, 14,015,010 shares of Pioneer common stock and 10,901,924
Exchangeable Shares were issued upon completion of the Transaction. Cash
payments were made in lieu of issuing approximately 89 fractional shares of
Pioneer common stock and 18 fractional shares of Exchangeable Shares.
In accordance with APB 16, the Transaction was treated as an acquisition of
Chauvco by Pioneer. The value of Pioneer common stock for use in determining
the aggregate purchase consideration allocated to the acquired assets and
liabilities of Chauvco ("Consideration") is $27.625, which represents the market
price of Pioneer common stock on December 18, 1997, the date of the shareholder
vote for the Transaction (the "Chauvco Meeting").
In August 1997, the stockholders of Pioneer's predecessor entities, Parker &
Parsley Petroleum Company ("Parker & Parsley") and MESA Inc. ("Mesa"), approved
an Amended and Restated Agreement and Plan of Merger ("Merger Agreement") that
resulted in the formation of Pioneer ("Parker/Mesa Merger"). In accordance with
the provisions of APB 16, the merger was treated as an acquisition of Mesa by
Parker & Parsley. As a result, the historical financial statements of Pioneer
are those of Parker & Parsley and present the addition of Mesa's assets and
liabilities as an acquisition by Pioneer in August 1997, and all references to
Pioneer contained herein are references to Parker & Parsley for dates prior to
the Parker/Mesa Merger.
The unaudited pro forma combined balance sheet and statements of operations
have been prepared to give effect to certain transactions as described below.
The unaudited pro forma combined balance sheet of Pioneer as of September
30, 1997 has been prepared to give effect to the Transaction as if such
transaction had occurred on September 30, 1997. In accordance with the
provisions of APB 16, the Transaction has been accounted for as a purchase
of Chauvco by Pioneer.
The unaudited pro forma combined statements of operations of Pioneer for
the nine months ended September 30, 1997 and for the year ended December
31, 1996 have been prepared to give effect to the Transaction, Parker/Mesa
Merger and certain events described below for Pioneer, Chauvco and Mesa as
if the Transaction, Parker/Mesa Merger and such events had occurred on
January 1, 1996.
Pro Forma Pioneer has been prepared to give effect to the acquisition of
Pro Forma Mesa by Adjusted Pioneer, both as defined below.
Pro Forma Chauvco has been prepared to give effect to the distribution of
CRI Shares and the rights to the Alliance Pipeline to the Chauvco
Shareholders.
Adjusted Pioneer has been prepared to give effect to (i) the sale of certain
wholly-owned Australian subsidiaries in March 1996 and the sale of Bridge
Oil Timor Sea, Inc. in June 1996 (collectively, the "Australasian Assets
Sold"), (ii) the aggregate effect of the sale of certain nonstrategic
domestic oil and gas properties, gas plants, contract rights and related
assets sold during the period from January 2, 1996 to December 31, 1996
(collectively, the "1996 Assets Sold") and (iii) the exchange of Pioneer's
6 1/4% Cumulative Monthly Income Convertible Preferred Shares ("Preferred
Shares") to Pioneer common stock in August 1997.
Pro Forma Mesa has been prepared to give effect to the Recapitalization (as
described in Note 1. of Notes to Unaudited Pro Forma Combined Financial
Statements), which entailed issuing $265 million in new preferred equity
and repaying and refinancing substantially all of Mesa's $1.2 billion of
then existing long-term debt, and the Greenhill acquisition, including
additional borrowings to finance such acquisition.
4
<PAGE> 5
The historical consolidated financial statements for Chauvco and CRI were
prepared under Canadian GAAP and in Canadian dollars. For these unaudited pro
forma combined financial statements, the historical financial information of
Chauvco, CRI and the Alliance Pipeline project have been converted to U.S.
dollars using the period end exchange rate for the balance sheet and the
average exchange rate for the statements of operations for the respective
periods. These unaudited pro forma combined financial statements also contain
certain adjustments to conform the historical Chauvco financial statements to
U.S. GAAP and successful efforts method of accounting as used by Pioneer after
eliminating the balances or activity associated with CRI and the Alliance
Pipeline. In addition, certain reclassifications have been made to Chauvco's
historical consolidated financial statements to conform to Pioneer's financial
statement presentation.
The unaudited pro forma combined financial statements included herein are
not necessarily indicative of the results that might have occurred had the
transactions taken place at the beginning of the period specified and are not
intended to be a projection of future results. In addition, future results may
vary significantly from the results reflected in the accompanying unaudited pro
forma combined financial statements because of normal production declines,
changes in product prices, future acquisitions and divestitures, future
development and exploration activities, and other factors.
The following unaudited pro forma combined financial statements should be
read in conjunction with (i) the Consolidated Financial Statements (and the
related notes) of Pioneer included in its Quarterly Report on Form 10-Q for the
nine months ended September 30, 1997, (ii) the Consolidated Financial
Statements (and the related notes) of both Parker & Parsley and Mesa included
in their respective Annual Reports on Form 10-K and Form 10-K/A for the year
ended December 31, 1996 and their respective Quarterly Reports on Form 10-Q for
the three months ended March 31, 1997 and the six months ended June 30, 1997
and (iii) the Consolidated Financial Statements (and the related notes) of
Chauvco for the nine months ended September 30, 1997 and for the three-year
period ended December 31, 1996.
5
<PAGE> 6
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(in thousands)
<TABLE>
<CAPTION>
ASSETS
Pro Forma
Pro Forma Combined Pro Forma
Pioneer Chauvco Adjustments Combined
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 40,631 $ 431 (3)(a) $ 41,059
Restricted cash 1,716 - 1,716
Accounts receivable 128,093 38,256 166,349
Inventories 6,839 1,875 8,714
Deferred income taxes 3,600 - 3,600
Other current assets 5,073 1,444 6,517
----------- ----------- -----------
Total current assets 185,952 42,006 227,955
----------- ----------- -----------
Property, plant and equipment, at cost:
Oil and gas properties, using the successful
efforts method of accounting:
Proved properties 3,994,707 792,653 (164,554)(a) 4,622,806
Unproved properties 83,402 33,129 401,462 (a) 517,993
Accumulated depletion, depreciation and
amortization (554,132) (310,954) 310,954 (a) (554,132)
----------- ----------- -----------
3,523,977 514,828 4,586,667
----------- ----------- -----------
Other property and equipment, net 35,736 6,085 41,821
Other assets, net 51,078 22,700 73,778
----------- ----------- -----------
$ 3,796,743 $ 585,619 $ 4,930,221
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 11,116 $ 19,545 $ 30,661
Undistributed unit purchases 1,716 - 1,716
Accounts payable 76,698 33,423 110,121
Domestic and foreign income taxes 52 161 213
Other current liabilities 46,995 - 46,995
----------- ----------- -----------
Total current liabilities 136,577 53,129 189,706
----------- ----------- -----------
Long-term debt, less current maturities 1,601,145 208,653 30,000 (a) 1,839,798
Other noncurrent liabilities 127,614 7,808 135,422
Deferred income taxes 213,300 52,290 93,268 (a) 358,858
Stockholders' equity:
Common stock 745 108,836 (108,587)(a) 994
Additional paid-in capital 1,626,487 - 688,081 (a) 2,314,568
Unearned compensation (17,316) - (17,316)
Retained earnings 108,191 154,903 (154,903)(a) 108,191
----------- ----------- -----------
Total stockholders' equity 1,718,107 263,739 2,406,437
----------- ----------- -----------
Commitments and contingencies
----------- ----------- -----------
$ 3,796,743 $ 585,619 $ 4,930,221
=========== =========== ===========
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
6
<PAGE> 7
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(in thousands, except per share data)
<TABLE>
<CAPTION>
Pro Forma
Pro Forma Pro Forma Combined Pro Forma
Pioneer Chauvco Adjustments Combined
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas $ 558,600 $ 111,272 $ 669,872
Interest and other 5,671 2,183 7,854
Gain on disposition of assets, net 2,763 - 2,763
----------- ---------- -----------
567,034 113,455 680,489
----------- ---------- -----------
Cost and expenses:
Oil and gas production 151,400 30,396 181,796
Depletion, depreciation and amortization 245,414 41,771 (3,597)(b) 283,588
Impairment of long-lived assets 2,907 - 2,907
Exploration and abandonments 46,304 - 6,414(c) 52,718
General and administrative 62,765 5,246 7,003(d) 75,014
Interest 98,016 7,193 1,197(e) 106,406
Other 5,685 - 5,685
----------- ---------- -----------
612,491 84,606 708,114
----------- ---------- -----------
Income (loss) from continuing operations
before income taxes (45,457) 28,849 (27,625)
Income tax benefit (provision) 17,700 (5,667) 367(f) 12,400
----------- ---------- -----------
Income (loss) from continuing operations (27,757) 23,182 (15,225)
Income (loss) from continuing operations per share $ (.38) $ .48 $ (.15)
=========== ========== ===========
Weighted average shares outstanding 74,010 48,428 (23,511)(g) 98,927
=========== ========== ===========
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
7
<PAGE> 8
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(in thousands, except per share data)
<TABLE>
<CAPTION>
Pro Forma
Pro Forma Combined Pro Forma
Pioneer Chauvco Adjustments Combined
-------------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas $ 751,806 $ 129,833 $ 881,639
Natural gas processing 23,184 - 23,184
Interest and other 42,038 381 42,419
Gain on disposition of assets, net 11,966 - 11,966
------------ ----------- -----------
828,994 130,214 959,208
------------ ----------- -----------
Cost and expenses:
Oil and gas production 196,014 34,145 230,159
Natural gas processing 11,949 - 11,949
Depletion, depreciation and
amortization 320,468 48,657 (3,626)(b) 365,499
Exploration and abandonments 32,128 - 5,427 (c) 37,555
General and administrative 68,478 7,469 8,008 (d) 83,955
Interest 128,401 8,313 1,866 (e) 138,580
Other 4,791 - 4,791
------------ ----------- -----------
762,229 98,584 872,488
------------ ----------- -----------
Income from continuing operations
before income taxes 66,765 31,630 86,720
Income tax provision (24,700) (6,612) 612 (f) (30,700)
------------ ----------- -----------
Income from continuing operations $ 42,065 $ 25,018 $ 56,020
============ =========== ===========
Income per share $ .57 $ .52 $ .56
============ =========== ===========
Weighted average shares
outstanding 74,261 48,300 (23,383)(g) 99,178
============ =========== ===========
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
8
<PAGE> 9
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(in thousands, except per share data)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Pioneer Mesa Greenhill Adjustments Pioneer
------------ -------------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Revenues:
Oil and gas $ 348,980 $ 192,251 $ 17,369 $ 558,600
Interest and other 3,649 1,875 147 5,671
Gain (loss) on disposition of
assets, net 2,745 (23) 41 2,763
----------- ------------ --------- -----------
A
355,374 194,103 17,557 567,034
----------- ------------ --------- -----------
Cost and expenses:
Oil and gas production 91,674 53,085 6,641 151,400
Depletion, depreciation and
amortization 126,897 65,359 7,725 45,433 (b) 245,414
Impairment of long-lived assets - 2,907 - 2,907
Exploration and abandonments 34,310 8,410 4,059 (475)(h) 46,304
General and administrative 31,769 17,203 13,318 475 (h) 62,765
Interest 44,264 57,388 - (3,037)(i) 98,016
5,429 (j)
(6,028)(k)
Other 2,982 2,703 - 5,685
----------- ------------ --------- -----------
331,896 207,055 31,743 612,491
----------- ------------ --------- -----------
Income (loss) from continuing
operations before income taxes 23,478 (12,952) (14,186) (45,457)
Income tax benefit (provision) (8,500) - - 26,200 (f) 17,700
----------- ------------ --------- -----------
Income (loss) from continuing
operations 14,978 (12,952) (14,186) (27,757)
Dividends on preferred stock - (11,105) - 11,105 (l) -
----------- ------------ --------- -----------
Income (loss) from continuing
operations attributable to
common stock $ 14,978 $ (24,057) $ (14,186) $ (27,757)
=========== ============ ========= ===========
Income (loss) per common share $ .34 $ (.37) $ (.38)
=========== ============ ===========
Weighted average shares
outstanding 43,453 65,670 (35,113)(m) 74,010
=========== ============ ===========
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
9
<PAGE> 10
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(in thousands, except per share data)
<TABLE>
<CAPTION>
Adjusted Pro Forma Pro Forma Pro Forma
Pioneer Mesa Adjustments Pioneer
------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas $ 374,560 $ 377,246 $ 751,806
Natural gas processing 23,184 - 23,184
Interest and other 17,328 24,710 42,038
Gain on disposition of assets, net - 11,966 11,966
------------ ----------- -----------
415,072 413,922 828,994
------------ ----------- -----------
Cost and expenses:
Oil and gas production 101,545 94,469 196,014
Natural gas processing 11,949 - 11,949
Depletion, depreciation and
amortization 104,629 135,289 80,550 (b) 320,468
Exploration and abandonments 20,187 12,772 (831)(h) 32,128
General and administrative 26,631 41,016 831 (h) 68,478
Interest 28,700 105,266 (5,565)(j) 128,401
Other 2,451 2,340 4,791
------------ ----------- -----------
296,092 391,152 762,229
------------ ----------- -----------
Income from continuing operations
before income taxes 118,980 22,770 66,765
Income tax provision (41,600) - 16,900 (f) (24,700)
------------ ----------- -----------
Income from continuing operations 77,380 22,770 42,065
Dividends on preferred stock - (21,880) 21,880 (l) -
------------ ----------- -----------
Income from continuing operations
attributable to common stock $ 77,380 $ 890 $ 42,065
============ =========== ===========
Income per common share $ 1.82 $ .01 $ .57
============ =========== ===========
Weighted average shares
outstanding 42,448 64,164 (32,351)(m) 74,261
============ =========== ===========
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
10
<PAGE> 11
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED PRO FORMA ADJUSTED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(in thousands, except per share data)
<TABLE>
<CAPTION>
Australasian 1996
Assets Assets Pro Forma Adjusted
Pioneer Sold Sold Adjustments Pioneer
------------ ------------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Revenues:
Oil and gas $ 396,931 $ (10,591) $ (11,780) $ 374,560
Natural gas processing 23,814 - (630) 23,184
Interest and other 17,458 (130) - 17,328
Gain on disposition of assets,
net 97,140 (83,260) (13,880) -
----------- ------------ ---------- ----------
535,343 (93,981) (26,290) 415,072
----------- ------------ ---------- ----------
Cost and expenses:
Oil and gas production 110,334 (3,300) (5,489) 101,545
Natural gas processing 12,528 - (579) 11,949
Depletion, depreciation and
amortization 112,134 (4,217) (3,288) 104,629
Exploration and abandonments 23,030 (1,435) (1,408) 20,187
General and administrative 28,363 (1,732) - 26,631
Interest 46,155 (1,100) - (12,020)(i) 28,700
(4,335)(n)
Other 2,451 - - 2,451
----------- ------------ ---------- ----------
334,995 (11,784) (10,764) 296,092
----------- ------------ ---------- ----------
Income from continuing operations
before income taxes 200,348 (82,197) (15,526) 118,980
Income tax provision (60,100) 16,000 5,400 (2,900)(f) (41,600)
----------- ------------ ---------- ----------
Income from continuing operations $ 140,248 $ (66,197) $ (10,126) $ 77,380
=========== ============ ========== ==========
Income per share $ 3.92 $ 1.82
=========== ==========
Weighted average shares
outstanding 35,734 6,714 (i) 42,448
=========== ==========
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
11
<PAGE> 12
MESA INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(in thousands, except per share data)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Mesa Recapitalization Greenhill Adjustments Mesa
------------- ---------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues:
Oil and gas $ 306,302 $ - $ 70,944 $ 377,246
Natural gas processing - - - -
Interest and other 24,710 - - 24,710
Gain on disposition of assets, net 11,966 - - 11,966
------------- -------- ----------- ----------
342,978 - 70,944 413,922
------------- -------- ----------- ----------
Cost and expenses:
Oil and gas production 71,370 - 23,099 94,469
Natural gas processing - - - -
Depletion, depreciation and
amortization 103,301 - 29,355 2,633 (b) 135,289
Exploration and abandonments 5,431 - 7,341 12,772
General and administrative 31,473 - 9,543 41,016
Interest 121,135 (34,530)(o) (729) 19,390 (k) 105,266
Other 1,929 - 411 2,340
------------- -------- ----------- ----------
334,639 (34,530) 69,020 391,152
------------- -------- ----------- ----------
Income from continuing operations
before income taxes 8,339 34,530 1,924 22,770
Income tax provision - - - -
------------- -------- ----------- ----------
Income from continuing operations 8,339 34,530 1,924 22,770
Dividends on preferred stock (9,522) (12,358)(p) - (21,880)
------------- -------- ----------- ----------
Income (loss) from continuing
operations attributable to
common stock $ (1,183) $ 22,172 $ 1,924 $ 890
============= ======== =========== ==========
Income (loss) per common share $ (.02) $ .01
============= ==========
Weighted average shares
outstanding 64,164 64,164
============= ==========
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
12
<PAGE> 13
CHAUVCO RESOURCES LTD.
UNAUDITED PRO FORMA BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(in thousands)
<TABLE>
<CAPTION>
ASSETS
Pro Forma
Chauvco CRI Alliance Chauvco
----------- -------------- ------------ ------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 985 $ (554) $ - $ 431
Accounts receivable 30,343 (4,420) 12,333 38,256
Inventories 4,032 (2,157) - 1,875
Other current assets 3,093 (1,649) - 1,444
----------- --------- ---------- -----------
Total current assets 38,453 (8,780) 12,333 42,006
----------- --------- ---------- -----------
Oil and gas properties, using the full
cost method of accounting 870,524 (44,742) - 825,782
Accumulated depletion, depreciation and
amortization (311,874) 920 - (310,954)
----------- --------- ---------- -----------
558,650 (43,822) - 514,828
----------- --------- ---------- -----------
Other property and equipment, net 10,572 (4,487) - 6,085
Other assets, net 35,033 - (12,333) 22,700
----------- --------- ---------- -----------
$ 642,708 $ (57,089) $ - $ 585,619
=========== ========= ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 19,545 $ - $ - $ 19,545
Accounts payable 42,073 (8,650) - 33,423
Domestic and foreign income taxes 161 - - 161
----------- --------- ---------- -----------
Total current liabilities 61,779 (8,650) - 53,129
----------- --------- ---------- -----------
Long-term debt, less current maturities 208,653 - - 208,653
Other noncurrent liabilities 8,061 (253) - 7,808
Deferred income taxes 52,290 - - 52,290
Stockholders' equity:
Common stock 158,603 (49,767) - 108,836
Retained earnings 153,322 1,581 - 154,903
----------- --------- ---------- -----------
Total stockholders' equity 311,925 (48,186) - 263,739
----------- --------- ---------- -----------
Commitments and contingencies
----------- --------- ---------- -----------
$ 642,708 $ (57,089) $ - $ 585,619
=========== ========= ========== ===========
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
13
<PAGE> 14
CHAUVCO RESOURCES LTD.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(in thousands, except per share data)
<TABLE>
<CAPTION>
Pro Forma
Chauvco CRI Chauvco
----------- ------------ ------------
<S> <C> <C> <C>
Revenues:
Oil and gas $ 113,182 $ (1,910) $ 111,272
Interest and other 1,814 369 2,183
----------- ---------- -----------
114,996 (1,541) 113,455
----------- ---------- -----------
Cost and expenses:
Oil and gas production 31,617 (1,221) 30,396
Depletion, depreciation and amortization 42,693 (922) 41,771
General and administrative 5,670 (424) 5,246
Interest 7,656 (463) 7,193
Other 22 (22) -
----------- ---------- -----------
87,658 (3,052) 84,606
----------- ---------- -----------
Income from continuing operations before income taxes 27,338 1,511 28,849
Income tax provision (5,667) - (5,667)
----------- ---------- -----------
Income from continuing operations $ 21,671 $ 1,511 $ 23,182
=========== ========== ===========
Income per common share $ .45 $ .48
=========== ===========
Weighted average shares outstanding 48,428 48,428
=========== ===========
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
14
<PAGE> 15
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
NOTE 1. BASIS OF PRESENTATION
ACQUISITION OF CHAUVCO. In accordance with the Combination Agreement, each
holder of Chauvco common shares received for each Chauvco common share held (i)
one CRI Share and (ii) in certain cases, at the election of the Chauvco
Shareholder, either the number of shares of Pioneer common stock or Exchangeable
Shares, or a combination of both, determined by multiplying each Chauvco Common
Share held by an exchange ratio of .493827. In total, 14,015,010 shares of
Pioneer common stock and 10,901,924 Exchangeable Shares were issued upon
completion of the Transaction. Cash payments were made in lieu of issuing
approximately 89 fractional shares of Pioneer common stock and 18 fractional
shares of Exchangeable Shares.
In accordance with APB 16, the Transaction was treated as an acquisition of
Chauvco by Pioneer. The value of Pioneer common stock for use in determining
the aggregate purchase consideration allocated to the acquired assets and
liabilities of Chauvco ("Consideration") is $27.625, which represents the market
price of Pioneer common stock on the date of the Chauvco Meeting.
The historical consolidated financial statements for Chauvco and CRI were
prepared under Canadian GAAP and in Canadian dollars. For these unaudited pro
forma financial statements, the historical financial information of Chauvco,
CRI and the Alliance Pipeline project have been converted to U.S. dollars using
the period end exchange rate for the balance sheet and the average exchange
rate for the statement of operations. These unaudited pro forma financial
statements also contain certain adjustments to conform the historical Chauvco
financial statements to U.S. GAAP after eliminating the balances or activity
associated with CRI and the Alliance Pipeline. In addition, certain
reclassifications have been made to Chauvco's historical consolidated financial
statements to conform to Pioneer's financial statement presentation.
ACQUISITION OF MESA. In accordance with the Merger Agreement, (i) holders
of Parker & Parsley common stock received one share of Pioneer common stock for
each share held; (ii) holders of Mesa common stock received one share of
Pioneer common stock for every seven shares held; and (iii) holders of Mesa
Series A Preferred Stock and Mesa Series B Preferred Stock received 1.25 shares
of Pioneer common stock for every seven shares held. No fractional shares were
issued and all treasury shares were canceled.
DESCRIPTION OF PRO FORMA FINANCIAL STATEMENTS. The unaudited pro forma
combined balance sheet of Pioneer as of September 30, 1997 has been prepared to
give effect to the Transaction as if such transactions had occurred on September
30, 1997. In accordance with the provisions of APB No. 16, "Business
Combinations", the Transaction has been accounted for as a purchase of Chauvco
by Pioneer.
The unaudited pro forma combined statements of operations of Pioneer for
the nine months ended September 30, 1997 and for the year ended December 31,
1996 have been prepared to give effect to the Transaction and the Parker/Mesa
Merger and certain events described below for Pioneer, Chauvco and Mesa as if
the Transaction, the Parker/Mesa Merger and such events had occurred on January
1, 1996.
Pro Forma Pioneer has been prepared to give effect to the acquisition of
Pro Forma Mesa by Adjusted Pioneer, both as defined below.
Pro Forma Chauvco has been prepared to give effect to the distribution of
CRI shares and the rights to the Alliance Pipeline to Chauvco Shareholders.
15
<PAGE> 16
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
Adjusted Pioneer has been prepared to give effect to the sale of the
Australasian Assets Sold, the 1996 Assets Sold and the exchange of Pioneer's
Preferred Shares to Pioneer common stock.
Pro Forma Mesa has been prepared to give effect to the Recapitalization
and the Greenhill Acquisition, including additional borrowings to finance such
acquisition.
The following is a description of the individual columns included in these
unaudited pro forma combined financial statements:
PIONEER - Represents the consolidated balance sheet of Pioneer as of
September 30, 1997 and the consolidated statements of operations of
Pioneer for the nine months ended September 30, 1997 and for the year
ended December 31, 1996.
AUSTRALASIAN ASSETS SOLD - Reflects the results of operations for the
year ended December 31, 1996 from certain wholly-owned subsidiaries
prior to their sale in 1996. On March 28, 1996, Pioneer completed
the sale of certain wholly-owned subsidiaries to Santos Ltd., and on
June 20, 1996, Pioneer completed the sale of another wholly-owned
subsidiary, Bridge Oil Timor Sea, Inc., to Phillips Petroleum
International Investment Company. During the year ended December 31,
1996, Pioneer received aggregate consideration of $237.5 million for
these combined sales. The assets sold to Santos Ltd. consisted
primarily of properties located in the Cooper Basin in Central
Australia, the Surat Basin in Northeast Australia, the Carnarvon
Basin on the Northwest Shelf off the coast of Western Australia, the
Otway Basin off the coast of Southeast Australia and the Central
Sumatra Basin in Indonesia. At December 31, 1995, Pioneer's
interests in these properties contained 32.1 million BOE of proved
reserves (consisting of 12.4 million Bbls of oil and 118.3 Bcf of
gas), representing $133.8 million of SEC PV 10 value. Prior to their
sale in 1996, these properties produced 249,500 Bbls of oil and
1,927,000 Mcf of gas. Pioneer received an average price of $19.55
per Bbl of oil and $1.95 per Mcf of gas from such production and
incurred production costs per BOE of $4.92 and depletion expense per
BOE of $5.84 related to these properties. The wholly-owned
subsidiary sold to Phillips Petroleum International Investment
Company, Bridge Oil Timor Sea, Inc., has a wholly-owned subsidiary,
Bridge Oil Timor Sea Pty Ltd., which owns a 22.5% interest in the
ZOCA 91-13 permit in the offshore Bonapart Basin in the Zone of
Cooperation between Australia and Indonesia.
1996 ASSETS SOLD - Reflects the results of operations for the year
ended December 31, 1996 from certain oil and gas properties, gas
plants, contract rights and related assets prior to their sale in
1996. During the year ended December 31, 1996, Pioneer sold certain
domestic nonstrategic oil and gas properties, gas plants and other
related assets for aggregate proceeds of approximately $58.4 million.
Prior to their sale in 1996, these oil and gas properties produced
274,314 Bbls of oil and 3,196,093 Mcf of gas. Pioneer received an
average price of $19.30 per Bbl of oil and $2.03 per Mcf of gas from
such production and incurred production costs per BOE of $6.80 and
depletion expense per BOE of $4.04 related to these properties.
MESA - Represents the unaudited consolidated statements of
operations of Mesa for the seven months ended July 31, 1997(the
period prior to its acquisition by Pioneer) and for the year ended
December 31, 1996.
RECAPITALIZATION - Represents the effects on Mesa's unaudited pro
forma combined statement of operations from the Recapitalization as
if it had occurred on January 1, 1996. In August 1996, Mesa
completed a recapitalization of its balance sheet by issuing new
equity and repaying and refinancing substantially all of its then
existing long-term debt. The Recapitalization was undertaken by Mesa
in an effort to deleverage and recapitalize Mesa through the issuance
of additional equity and through the refinancing of substantially all
of Mesa's $1.2 billion debt existing prior to the Recapitalization.
The Recapitalization provided Mesa with an
16
<PAGE> 17
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
improved financial condition due to (i) a significant reduction in
total debt outstanding, (ii) a reduction in annual cash interest
expense of approximately $75 million, (iii) cost savings programs
which reduced general and administrative and other overhead expenses
by approximately $10 million annually, and (iv) the extension of
maturities on Mesa's long-term debt, which eliminated Mesa's then
existing liquidity concerns. The Recapitalization included (i) the
private placement of shares of a new class of Mesa Series B Preferred
Stock for $133 million to DNR - Mesa Holdings, Inc. ("DNR"), whose
sole general partner is Rainwater Inc., a Texas corporation owned by
Richard E. Rainwater, (ii) the sale of $132 million of a new class of
Mesa Series A Preferred Stock to Mesa's then existing stockholders
through a rights offering, (iii) the establishment of a new bank
credit facility and (iv) the issuance of two new series of senior
subordinated notes.
GREENHILL - Represents the unaudited statements of operations of
Greenhill prior to its acquisition by Mesa on April 15, 1997 and for
the year ended December 31, 1996.
CHAUVCO - Represents the consolidated balance sheet of Chauvco as of
September 30, 1997 and the consolidated statements of operations of
Chauvco for the nine months ended September 30, 1997 and for the year
ended December 31, 1996. The historical consolidated financial
statements for Chauvco were prepared under Canadian GAAP and converted
to U.S. dollars utilizing the exchange rates of Canadian dollars to
U.S. dollars as listed below, which are based upon the noon buying
rate in New York City for cable transfers in Canadian dollars, as
certified for customer purposes by the Federal Reserve Bank of New
York (the "Noon Buying Rate"):
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- --------------
<S> <C> <C>
Balance Sheets .7234 N/A
Statements of Operations .7253 .7330
</TABLE>
CRI - Represents the consolidated balance sheet of CRI as of September
30, 1997 and the statement of operations of CRI for the nine months
ended September 30, 1997, which were prepared under Canadian GAAP and
in U.S. dollars. CRI was incorporated on July 29, 1997 as a
wholly-owned subsidiary of Chauvco.
ALLIANCE - Reflects the investment in the Alliance Projects as of
September 30, 1997 which were prepared under Canadian GAAP and
converted to U.S. dollars utilizing the Noon Buying Rate of .7234.
The unaudited pro forma combined statement of operations for the year ended
December 31, 1996 presented herein does not reflect the results of operations
from Mesa's acquisition from MAPCO Inc. of approximately 11 MMBOE in February
1997 for approximately $66 million. The purchase was funded by additional
borrowings under Mesa's credit facility. In addition, the unaudited pro forma
combined statement of operations for the year ended December 31, 1996 presented
herein does not reflect the results of operations from Chauvco's acquisition of
Tidal Resources Inc. on January 3, 1997 for approximately $55 million. The
purchase was funded by additional borrowings under Chauvco's credit facility.
The unaudited pro forma combined financial statements of Pioneer presented
herein do not reflect the results of the Tender Offer, American Cometra
Acquisition, 1997 Asset Divestitures, or the Restructuring, as more fully
described in "Item 5. Other Events"; all of which were completed in the fourth
quarter of 1997. These acquisitions and other transactions are not presented
since they are not considered significant under Rule 3-05 of Regulation S-X.
17
<PAGE> 18
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
NOTE 2. ACQUISITION OF CHAUVCO
The aggregate Pioneer common stock purchase consideration, including
nonrecurring transaction costs, is computed below in accordance with an
exchange ratio of .493827 shares of Pioneer common stock for each Chauvco share
held and a Pioneer common stock price of $27.625.
<TABLE>
<CAPTION>
Chauvco
Common Chauvco
Shares Options Total
---------------- --------------- --------------
<S> <C> <C> <C>
Shares/options outstanding 48,916,983 2,417,600
Exchange ratio .493827 .493827
------------- ------------
24,156,527 1,193,876
Less: Option Exercise shares (a) - (433,469)
------------- ------------
24,156,527 760,407 24,916,934
Pioneer shares/Exchangeable Shares to be issued
Value of Pioneer common stock (b) $ 27.625 $ 27.625 $ 27.625
------------- ------------ -------------
Pioneer common stock consideration $ 667,324,058 $ 21,006,243 $ 688,330,301
============= ============
Transaction costs 30,000,000
Cash paid in lieu of fractional shares 2,956
-------------
Aggregate purchase consideration $ 718,333,257
=============
</TABLE>
- ---------------
(a) Certain Chauvco Optionholders have elected to reduce the number of shares
of Pioneer common stock they would otherwise be eligible to receive by the
number of shares of Pioneer common stock equal to the exercise strike price
of their options rather than pay, in cash, their exercise price.
(b) Pioneer common stock is valued at $27.625 per share which represents the
market price of Pioneer common stock on December 18, 1997, the date of the
shareholder vote for the Transaction.
The following table represents the preliminary allocation of the total
purchase price of Chauvco to the acquired assets and liabilities of Chauvco.
The allocation represents the fair values assigned to each of the significant
assets acquired and liabilities assumed. Any future adjustments to the
allocation of the purchase price are not anticipated to be material to the
unaudited pro forma financial statements.
18
<PAGE> 19
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
Allocation of Aggregate
Purchase Consideration
September 30, 1997
-----------------------
(in thousands)
<S> <C>
Net working capital $ (11,123)
Property, plant and equipment 1,062,690
Other assets 28,785
Long-term debt (208,653)
Other non-current liabilities, including deferred taxes (153,366)
------------
$ 718,333
============
Pioneer common stock consideration $ 688,330
Transaction costs 30,000
Cash paid in lieu of fractional shares 3
------------
Aggregate purchase consideration $ 718,333
============
</TABLE>
The following table illustrates the number of shares of Pioneer common
stock that are issued and outstanding upon the consummation of the Transaction:
<TABLE>
<CAPTION>
Shares/options
outstanding Exchange Pioneer Shares/
at December 18, 1997 Ratio Exchangeable Shares
-------------------- ----------- -------------------
<S> <C> <C> <C>
Pioneer common stock 74,463,064 N/A 74,463,064
Chauvco Common Shares 48,916,983 .493827 24,156,527
Chauvco Options 2,417,600 (a) 760,407
------------
99,379,998
============
</TABLE>
- ------------------
(a) Certain Chauvco Optionholders have elected to reduce the number of shares
of Pioneer common stock they would otherwise be eligible to receive by the
number of shares of Pioneer common stock equal to the exercise strike
price of their options rather than pay, in cash, their exercise price.
19
<PAGE> 20
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
NOTE 3. ACQUISITION OF MESA
The aggregate Pioneer common stock purchase consideration, including
nonrecurring transaction costs, is computed in accordance with the Exchange
Ratios agreed to in the Merger Agreement as follows:
<TABLE>
<CAPTION>
Mesa Mesa Series Mesa Series
common A Preferred B Preferred
Stock Stock Stock Total
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Shares outstanding 64,279,568 62,884,094 63,672,925
Exchange ratio for Mesa shares 1.00 1.25 1.25
------------- ------------- -------------
64,279,568 78,605,118 79,591,156 222,475,842
Exchange ratio to Pioneer common stock 7.00 7.00 7.00 7.00
------------- ------------- ------------- -------------
Pioneer shares 9,182,795 11,229,303 11,370,165 31,782,263
Value of Pioneer common stock (a) $ 30.82 $ 30.82 $ 30.82 $ 30.82
------------- ------------- ------------- -------------
Pioneer common stock consideration $ 283,013,742 $ 346,087,118 $ 350,428,485 979,529,345
============= ============= =============
Transaction costs 7,916,762
Mesa options 3,036,712
-------------
Aggregate purchase consideration $ 990,482,819
=============
</TABLE>
- -------------------------
(a) Pioneer common stock is valued at $30.82 per share which represents
Pioneer's seven-day average trading price surrounding the announcement of
the Parker/Mesa Merger on April 7, 1997.
The following table represents the preliminary allocation of the total
purchase price of Mesa, including its Greenhill Acquisition, to the acquired
assets and liabilities of Mesa. The allocation represents the fair values
assigned to each of the significant assets acquired and liabilities assumed.
Any future adjustments to the allocation of the purchase price are not
anticipated to be material to the unaudited pro forma combined financial
statements.
<TABLE>
<CAPTION>
Allocation of Aggregate
Purchase Consideration
September 30, 1997
------------------------
(in thousands)
<S> <C>
Net working capital $ 47
Property, plant and equipment 2,382,205
Other assets 49,219
Long-term debt (1,191,038)
Other noncurrent liabilities, including deferred taxes (249,950)
------------
$ 990,483
============
Pioneer common stock consideration $ 979,529
Transaction costs 7,917
Mesa options 3,037
------------
Aggregate purchase consideration $ 990,483
============
</TABLE>
20
<PAGE> 21
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
The following table illustrates the number of shares of Pioneer common
stock that were issued in accordance with the exchange ratios agreed to in
the Merger Agreement.
<TABLE>
<CAPTION>
Shares
Outstanding Pioneer
Existing Security Type at August 7, 1997 Common Stock
- ------------------------------------ ----------------- --------------
<S> <C> <C>
Parker & Parsley Common Stock 41,773,238 41,773,238
Mesa Common Stock 64,279,568 9,182,795
Mesa Series A Preferred Stock 62,884,094 11,229,303
Mesa Series B Preferred Stock 63,672,925 11,370,165
------------
73,555,501
============
</TABLE>
NOTE 4. PRO FORMA ENTRIES
(a) To record the acquisition of Chauvco using the purchase method of
accounting. The allocation of the purchase price to the acquired assets
and liabilities is preliminary and, therefore, subject to change. Any
future adjustments to the allocation of the purchase price are not
anticipated to be material to Pioneer's financial statements. (See Note 2
above).
(b) To adjust depreciation, depletion and amortization expense for the
additional basis allocated to the oil and gas properties acquired and
accounted for using the successful efforts method of accounting.
(c) To reclassify amounts which were capitalized by Chauvco as oil and gas
properties in accordance with the full cost method of accounting but that
are treated as exploratory dry hole, geological and geophysical and delay
rental expenses in accordance with the successful efforts method of
accounting.
(d) To reclassify amounts which were capitalized by Chauvco as oil and gas
properties in accordance with the full cost method of accounting but that
are treated as general and administrative expenses in accordance with the
successful efforts method of accounting.
(e) To record interest expense on the borrowings of $30 million which will be
utilized to pay for nonrecurring transaction costs. The interest rate
used to determine such interest expense of 5.32% and 6.22% represents
Pioneer's average borrowing rate on outstanding bank indebtedness for the
nine months ended September 30, 1997 and the year ended December 31, 1996,
respectively.
(f) To adjust income tax expense for each tax jurisdiction.
(g) To adjust the weighted average shares outstanding for the acquisition of
Chauvco. This adjustment also assumes the conversion of the Chauvco
options into Pioneer common stock for purposes of computing weighted
average shares outstanding.
(h) To reclassify certain amounts to conform with the financial statement
presentation of Pioneer.
(i) To (i) reclassify the Preferred Shares to common stock as a result of
Pioneer's mandatory exchange of such Preferred Shares for shares of Pioneer
common stock on July 28, 1997 and (ii) eliminate the interest expense
associated with such Preferred Shares and amortization of capitalized
issuance fees. On July 28, 1997, Pioneer exercised its right to require
each holder of the 3,776,400 Preferred Shares to mandatorily exchange all
Preferred Shares for shares of common stock of Pioneer at a rate of 1.7778
shares of Pioneer common stock for each Preferred Share. As a result of the
exchange, Pioneer will no longer incur interest expense of approximately
$12 million per year associated with the Preferred Shares.
21
<PAGE> 22
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(j) To reduce interest expense for (i) the amortization of the premiums
(utilizing the effective interest rate method) recorded as part of
purchase accounting for Mesa's 10-5/8% senior subordinated notes and
11-5/8% senior subordinated discount notes and (ii) the application of
Pioneer's excess cash in 1996 to the reduction of Mesa's outstanding bank
indebtedness at Mesa's 1996 pro forma incremental borrowing interest rate
of 7% (see pro forma entry (k) below).
(k) To adjust interest expense resulting from the borrowing of the funds
necessary for Mesa's acquisition of Greenhill. Mesa's 1997 and 1996 pro
forma incremental borrowing interest rate of 7% was utilized to determine
the additional pro forma interest expense.
(l) To eliminate the preferred stock dividends associated with Mesa's Series A
and Series B Preferred Stock.
(m) To adjust the weighted average shares outstanding for the acquisition of
Mesa. This adjustment also assumes the conversion of Mesa's outstanding
employee stock options into Pioneer employee stock options for purposes of
computing weighted average shares outstanding.
(n) To adjust interest expense resulting from the application of that portion
of the sales proceeds from the Australasian Assets Sold and the 1996
Assets Sold necessary to retire Pioneer's outstanding bank indebtedness.
The proceeds applied to retire Pioneer's outstanding bank indebtedness of
$225 million resulted in a reduction in interest expense of $4.3 million.
The reduction in interest expense was calculated utilizing Pioneer's
weighted average rate on its bank indebtedness of 6.22% for the period
during 1996 in which Pioneer had outstanding bank indebtedness.
(o) To reduce interest expense as a result of the Recapitalization. Interest
expense adjustments include the following for the year ended December 31,
1996:
<TABLE>
<CAPTION>
Pro Forma
Historical Pro Forma Adjustment
--------- ---------- -----------
<S> <C> <C> <C>
Interest expense on former debt repaid in the
Recapitalization:
Secured notes $ 26,231 $ - $ (26,231)
Former credit agreement 2,472 - (2,472)
12-3/4% secured discount notes 43,979 - (43,979)
13-1/2% subordinated notes 654 - (654)
Interest expense on former debt repaid prior to the
Recapitalization:
12-3/4% unsecured discount notes 2,595 2,595 -
Interest expense on new debt issued in the
Recapitalization:
10-5/8% senior subordinated notes 17,613 35,418 17,805
11-5/8% senior discount notes 8,893 18,661 9,768
New Credit Facility 15,094 26,327 11,233
Other interest expense 3,604 3,604 -
--------- ---------- -----------
$ 121,135 $ 86,605 $ (34,530)
========= ========== ===========
</TABLE>
22
<PAGE> 23
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
Other interest expense is primarily the interest portion of the
administrative fee charged by Colorado Interstate Gas Company in
connection with Mesa's West Panhandle field operations. The interest rate
on the New Credit Facility is approximately 7.75% on the first $250
million due to an interest rate swap with the balance at a floating rate
that during the period outstanding was approximately 7%.
(p) To record the pro forma adjustment for an 8% annual dividend on the Mesa
Series A and Series B Preferred Stock payable quarterly in additional
shares of Mesa Series A and Series B Preferred Stock for at least the
first four years after issuance as if the Mesa Series A and Series B
Preferred Stock had been issued on January 1, 1996.
NOTE 5. INCOME TAXES
Pioneer will account for income taxes in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes." In accordance with SFAS 109, Pioneer will prepare separate tax
calculations for each tax jurisdiction in which Pioneer will be subject to
income taxes.
NOTE 6. INCOME FROM CONTINUING OPERATIONS PER SHARE
Income from continuing operations per share is computed based on the
weighted average number of shares of common stock and common stock equivalents,
if more than 3% dilutive, outstanding during the period. Fully diluted income
from continuing operations per share is not presented since dilution is less
than 3% on a pro forma combined basis. Income from continuing operations per
share reflects the exchange of Chauvco Common Shares for Pioneer common stock
or Exchangeable Shares, the exchange of Pioneer's Preferred Shares and the
conversion of Mesa's Series A Preferred Stock and Mesa's Series B Preferred
Stock to Pioneer common stock.
NOTE 7. GENERAL AND ADMINISTRATIVE EXPENSE REDUCTIONS
Mesa's general and administrative expenses for the year ended December 31,
1996 includes $9.4 million associated with the elimination of 86 positions from
the total of 385 at December 31, 1995, and a significant downsizing of Mesa's
natural gas vehicle equipment business in conjunction with the
Recapitalization. Given the first quarter 1997 general and administrative
expenses of $3.8 million, Mesa's continuing costs are estimated at
approximately $15 million per year ($3.8 million multiplied by four quarters).
In addition, Greenhill's general and administrative expenses prior to its sale
to Mesa on April 15, 1997 of $13.3 million included severance costs paid to
Greenhill employees of approximately $11 million as few of Greenhill's
administrative personnel were retained. The accompanying Pro Forma Combined
Statements of Operations for Pioneer do not include any adjustments related to
the expected level of ongoing general and administrative expense.
23
<PAGE> 24
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
NOTE 8. OIL AND GAS RESERVE DATA
The following unaudited pro forma supplemental information regarding the
oil and gas activities of Pioneer is presented pursuant to the disclosure
requirements promulgated by the SEC and Statement of Financial Accounting
Standards No. 69, "Disclosures About Oil and Gas Producing Activities." The
pro forma reserve information is presented as if the sale of the Australasian
Assets and 1996 Assets Sold and the acquisition of Chauvco, Mesa and Greenhill
had occurred on January 1, 1996.
Management emphasizes that reserve estimates are inherently imprecise and
subject to revision and that estimates of new discoveries are more imprecise
than those of producing oil and gas properties. Accordingly, the estimates are
expected to change as future information becomes available; such changes could
be significant.
Quantities of oil and gas reserves
Set forth below is a pro forma summary of the changes in the net
quantities of oil and natural gas reserves for the year ended December 31,
1996.
<TABLE>
<CAPTION>
Oil, NGL's and Condensate (MBbls) Gas (MMcf)
----------------------------------------- -------------------------------------------------
USA Argentina Canada Total USA Argentina Canada Total
-------- --------- ------- -------- ---------- --------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1996 267,108 15,933 21,895 304,936 1,984,726 322,000 136,264 2,442,990
Revisions of previous
estimates 31,475 (722) 249 31,002 42,246 (10,860) (5,180) 26,206
Purchase of minerals-
in-place 300 - - 300 11,494 - - 11,494
New discoveries and
extensions 2,794 1,608 650 5,052 30,151 4,588 3,320 38,059
Production (20,497) (1,183) (4,330) (26,010) (160,729) (16,820) (12,500) (190,049)
-------- ------- ------- -------- ---------- ------- -------- -----------
Balance, December 31,
1996 281,180 15,636 18,464 315,280 1,907,888 298,908 121,904 2,328,700
======== ======= ======= ======== ========== ======= ======== ===========
</TABLE>
Standardized measure of discounted future net cash flows
The pro forma combined standardized measure of discounted future net cash
flow is computed by applying year-end prices of oil and gas (with consideration
of price changes only to the extent provided by contractual arrangements) to
the estimated future production of oil and gas reserves less estimated future
expenditures (based on year-end costs) to be incurred in developing and
producing the proved reserves, discounted using a rate of 10% per year to
reflect the estimated timing of the future cash flows. Future income taxes are
calculated by comparing discounted future cash flows to the tax basis of oil
and gas properties, plus available carryforwards and credits, and applying the
current tax rate to the difference.
24
<PAGE> 25
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
December 31, 1996
-------------------------------------------------------------
USA Argentina Canada Total
--------------- ----------- ---------- ----------------
(in thousands)
<S> <C> <C> <C> <C>
Oil and gas producing activities:
Future cash inflows $ 13,987,546 $ 599,243 $ 680,112 $ 15,266,901
Future production costs (3,970,522) (144,714) (173,033) (4,288,269)
Future development costs (389,701) (24,084) (10,632) (424,417)
Future income tax expense (2,679,214) (721) (156,606) (2,836,541)
------------ ---------- ---------- ------------
6,948,109 429,724 339,841 7,717,674
10% annual discount factor (3,240,886) (214,813) (114,840) (3,570,539)
------------ ---------- ---------- ------------
Standardized measure of discounted future
net cash flows $ 3,707,223 $ 214,911 $ 225,001 $ 4,147,135
============ ========== ========== ============
</TABLE>
Changes relating to the standardized measure of discounted future net cash
flows
The principal sources of the change in the pro forma combined standardized
measure of discounted future net cash flows for the year ended December 31,
1996 are as follows (in thousands):
<TABLE>
<S> <C>
Oil and gas sales, net of production costs $ (651,480)
Net changes in prices and production costs 2,220,041
Extensions and discoveries 131,526
Purchases of minerals-in-place 20,606
Revisions of estimated future development costs (71,763)
Revisions of previous quantity estimates 327,004
Accretion of discount 290,618
Changes in production rates, timing and other (150,096)
-----------
Change in present value of future net revenues 2,116,456
Net change in present value of future income taxes (628,589)
-----------
1,487,867
Balance, beginning of year 2,659,268
-----------
Balance, end of year $ 4,147,134
===========
</TABLE>
25
<PAGE> 26
PIONEER NATURAL RESOURCES COMPANY
<TABLE>
<CAPTION>
EXHIBIT
<S> <C> <C>
2.1 Combination Agreement, dated as of September 3, 1997, between
Pioneer and Chauvco Resources Ltd. ("Chauvco") (incorporated by
reference to Exhibit 2.2 to Pioneer's Registration Statement on
Form S-3, Registration No. 333-20483, filed with the SEC on
December 15, 1997).
2.2* Plan of Arrangement, as amended, under Section 186 of the
Business Corporations Act (Alberta).
2.3* Support Agreement, dated as of December 18, 1997, between
Pioneer and Pioneer Natural Resources (Canada) Ltd. ("Pioneer
Canada").
2.4* Voting and Exchange Trust Agreement, dated as of December 18,
1997, among Pioneer, Pioneer Canada and Montreal Trust
Company of Canada, as Trustee.
2.5 Amended and Restated Shareholders Agreement, dated as of
September 3, 1997, by and among Pioneer and Guy J. Turcotte
(incorporated by reference to Exhibit 2.6 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-20483
filed with the SEC on December 15, 1997).
2.6 Shareholders Agreement, dated as of September 3, 1997, by and
among Pioneer, Chauvco, DNR-MESA Holdings, L.P. ("DNR"),
Scott D. Sheffield and I. Jon Brumley (incorporated by reference
to Exhibit 2.3 to Pioneer's Current Report on Form 8-K, File
No. 001-13245, filed with the SEC on October 2, 1997).
2.7 Shareholders Agreement, dated as of September 3, 1997, by and
among Pioneer, Trimac Corporation and Gendis Inc.
(incorporated by reference to Exhibit 2.4 to Pioneer's
Current report on Form 8-K, File No.001-13245, filed with the SEC
on October 2, 1997).
2.8 Amended and Restated Shareholders Agreement, dated as of
September 3, 1997, by and among the Company and Guy J. Turcotte
(incorporated by reference to Exhibit 2.6 to the Company's
Registration Statement on Form S-3, Registration No. 333-42315),
filed with the SEC on December 15, 1997).
3.1 Certificate of Designations of Special Preferred Voting Stock
(incorporated by reference to Exhibit 3.3 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-20483,
filed with the SEC on December 15, 1997).
3.2 Terms and Conditions of Exchangeable Shares (incorporated by
reference to Annex F to the Definitive Joint Management
Information Circular and Proxy
</TABLE>
<PAGE> 27
<TABLE>
<S> <C>
Statement of Pioneer and Chauvco, File No. 001-13245, filed
with the SEC on November 17, 1997).
4.1* Form of Certificate of Special Preferred Voting Stock.
4.2* Form of Certificate of Exchangeable Shares.
10.1* Amended and Restated Credit Facility Agreement (Primary Facility),
dated as of December 18, 1997, between Pioneer, as Borrower,
and NationsBank of Texas, N.A. as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York,
as Documentation Agent, and The Chase Manhattan Bank, as
Syndication Agent and the other Co-Agents and Lenders named
therein.
10.2* Amended and Restated Credit Facility Agreement (364 Day Facility),
dated as of December 18, 1997, between Pioneer, as Borrower,
and NationsBank of Texas, N.A. as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York,
as Documentation Agent, and The Chase Manhattan Bank, as
Syndication Agent; and the other Co-Agents and Lenders named
therein.
10.3* Credit Agreement, dated as of December 18, 1997, among Chauvco,
Canadian Imperial Bank of Commerce, as Agent, and the other
Lenders named therein.
10.4 First Supplemental Indenture, dated as of April 15, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 10 5/8% Senior
Subordinated Notes Due 2006 (incorporated by reference to Exhibit
10.5 to Pioneer's Registration Statement on Form S-3, Registration
No. 333-39381, filed with the SEC on November 3, 1997).
10.5 Second Supplemental Indenture, dated as of August 7, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 10 5/8% Senior
Subordinated Notes Due 2006 (incorporated by reference to
Exhibit 10.6 to Pioneer's Registration Statement on Form S-3,
Registration No. 333-39381, filed with the SEC on November 3,
1997).
10.6* Third Supplemental Indenture, dated as of December 18, 1997,
among Pioneer USA, the Subsidiary Guarantors named therein,
Pioneer, and Harris Trust and Savings Bank, as Trustee, with
respect to the Indenture, dated as of July 2, 1996, as amended,
relating to Pioneer USA's 10 5/8% Senior Subordinated Notes due
2006.
10.7* Fourth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer USA, a Delaware corporation, Pioneer, a
Delaware corporation, Pioneer NewSubl, Inc., a Texas corporation,
and Harris Trust and Savings Bank, an Illinois corporation, as
trustee, with respect to the Indenture, dated as of July 2, 1996,
as amended, relating to Pioneer USA's 10 5/8% Senior Subordinated
Notes due 2006.
10.8* Fifth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer NewSubl, Inc. (as successor to Pioneer USA), a
Texas corporation, Pioneer, a Delaware corporation, Pioneer
DebtCo, Inc., a Texas corporation, and Harris Trust and Savings
Bank, an Illinois corporation, as trustee, with respect to the
Indenture, dated as of July 2, 1996, as amended, relating to
Pioneer USA's 10 5/8% Senior Subordinated Notes due 2006.
10.9* Sixth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer DebtCo, Inc. (as successor to Pioneer NewSubl,
Inc.), a Texas corporation, Pioneer, a Delaware corporation,
and Harris Trust and Savings Bank, an Illinois corporation, as
trustee, with respect to the Indenture, dated as of July 2, 1996,
as amended, relating to Pioneer USA's 10 5/8% Senior Subordinated
Notes due 2006.
10.10 First Supplemental Indenture, dated as of April 15, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 11 5/8%
Senior Subordinated Discount Notes Due 2006 (incorporated by
reference to Exhibit 10.2 to Pioneer's Registration Statement on
Form S-3, Registration No. 333-39381, filed with the SEC on
November 3, 1997).
10.11 Second Supplemental Indenture, dated as of August 7, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 11 5/8%
Senior Subordinated Discount Notes Due 2006 (incorporated by
reference to Exhibit 10.3 to Pioneer's Registration Statement on
Form S-3, Registration No. 333-39381, filed with the SEC on
November 3, 1997).
10.12* Third Supplemental Indenture, dated as of December 18, 1997,
among Pioneer USA, the Subsidiary Guarantors named therein,
Pioneer, and Harris Trust and Savings Bank, as Trustee, with
respect to the Indenture, dated as of July 2, 1996, as amended,
relating to Pioneer USA's 11 5/8% Senior Subordinated Notes due
2006.
</TABLE>
<PAGE> 28
<TABLE>
<S> <C>
10.13* Fourth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer USA (formerly known as Mesa Operating Co.), a
Delaware corporation, Pioneer, a Delaware corporation,
Pioneer NewSub1, Inc., a Texas corporation, and Harris Trust and
Savings Bank, an Illinois corporation, as Trustee, with respect
to the Indenture dated as of July 2, 1996, as amended, relating
to Pioneer USA's 11 5/8% Senior Subordinated Discount Notes Due.
10.14* Fifth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer NewSub1, Inc. (as successor to Pioneer USA), a
Texas corporation, Pioneer, a Delaware corporation, Pioneer
DebtCo, Inc., a Texas corporation, and Harris Trust and Savings
Bank, an Illinois corporation, as trustee, with respect to the
Indenture dated as of July 2, 1996, as amended, relating to
Pioneer USA's 11 5/8% Senior Subordinated Discount Notes Due
2006.
10.15* Sixth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer DebtCo, Inc.(as successor to Pioneer NewSub1,
Inc.), a Texas corporation, Pioneer, a Delaware corporation,
and Harris Trust and Savings Bank, an Illinois corporation, as
trustee, with respect to the Indenture dated as of July 2, 1996,
as amended, relating to Pioneer USA's 11 5/8% Senior Subordinated
Discount Notes Due 2006.
10.16 First Supplemental Indenture, dated as of August 7, 1997, among
Parker & Parsley, The Chase Manhattan Bank, as Trustee, and
Pioneer USA, with respect to the Indenture, dated April 12,
1995, between Pioneer USA (successor to Parker & Parsley
Petroleum Company), and The Chase Manhattan Bank (National
Association), as Trustee (incorporated by reference to Exhibit
10.9 to Pioneer's Registration Statement on Form S-3,
Registration No. 333-39381, filed with the SEC on November 3,
1997).
10.17* Second Supplemental Indenture, dated as of December 30, 1997,
among Pioneer USA, a Delaware corporation, Pioneer NewSubl, Inc., a
Texas corporation, and The Chase Manhattan Bank, a New York
banking association, as trustee, with respect to the Indenture,
dated as of April 12, 1995, as amended, relating to Pioneer USA's
8 7/8% Senior Notes Due 2005 and 8 1/4% Senior Notes Due 2007.
10.18* Third Supplemental Indenture, dated as of December 30, 1997,
among Pioneer NewSubl, Inc. (as successor to Pioneer USA), a
Texas corporation, Pioneer DebtCo, Inc., a Texas corporation, and
The Chase Manhattan Bank, a New York banking association, as
trustee, with respect to the Indenture, dated as of April 12,
1995, as amended, relating to Pioneer USA's 8 7/8% Senior Notes
Due 2005 and 8 1/4% Senior Notes Due 2007.
10.19* Fourth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer DebtCo, Inc. (as successor to Pioneer NewSubl,
Inc., as successor to Pioneer USA), a Texas corporation,
Pioneer, a Delaware corporation, Pioneer USA, a Delaware
corporation, and The Chase Manhattan Bank, a New York banking
association, as trustee, with respect to the Indenture, dated as
of April 12, 1995, as amended, relating to Pioneer USA's 8 7/8%
Senior Notes Due 2005 and 8 1/4% Senior Notes Due 2007.
</TABLE>
<PAGE> 29
<TABLE>
<S> <C>
10.20* Guarantee, dated as of December 30, 1997, by Pioneer USA relating
to the $150,000,000 in aggregate principal amount of 8 7/8%
Senior Notes Due 2005 and $150,000,000 in aggregate principal
amount of 8 1/4% Senior Notes Due 2007 issued under the
Indenture, dated as of April 12, 1995, between Pioneer USA and
The Chase Manhattan Bank, a New York banking association, as
Trustee.
10.21* Note, dated December 22, 1997, between Pioneer, as Borrower,
and NationsBank of Texas, N.A., as Lender.
10.22* Purchase and Sale Agreement, dated as of October 22, 1997, between
Cometra Energy, L.P., and Pioneer USA.
10.23* Indemnification Agreement, dated as of August 8, 1997, between
Pioneer and Scott D. Sheffield, together with a schedule
identifying substantially identical agreements between Pioneer's
other directors and named executive officers identified on
Schedule I.
10.24 Gathering Agreement, dated May 29, 1987, between Mesa Operating
Limited Partnership and Colorado Interstate Gas Company
(incorporated by reference to Exhibit 10.26 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-39381,
filed with the SEC on November 3, 1997).
10.25 Amendment to 1990 Gathering Agreement Amendment, dated September
1, 1997, between Colorado Interstate Gas Company and Pioneer USA
(incorporated by reference to Exhibit 10.28 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-39381,
filed with the SEC on November 3, 1997).
10.26 Stock Acquisition Loan Agreement entered into as of June 15,
1995, between Parker & Parsley Petroleum Company and Scott D.
Sheffield, together with Schedule I identifying executive
officers with substantially identical agreements providing for
Parker & Parsley Petroleum Company's loans to such officers in
order to acquire shares of Parker & Parsley Petroleum Company's
Common Stock, par value $0.01 per share (incorporated by
reference to Exhibit 10.48 to Pioneer's Amendment No. 1 to
Registration Statement on Form S-3, Registration No. 333-39381,
filed with the SEC on November 3, 1997).
</TABLE>
- ----------------------
* Filed herewith.
<PAGE> 30
PIONEER NATURAL RESOURCES COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PIONEER NATURAL RESOURCES COMPANY
Date: December 31, 1997 By: /s/ GARRETT SMITH
-----------------------------------
Executive Vice President - Chief
Financial Officer
<PAGE> 31
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- ------ ----------- ----
<S> <C> <C>
2.1 Combination Agreement, dated as of September 3, 1997, between
Pioneer and Chauvco Resources Ltd. ("Chauvco") (incorporated by
reference to Exhibit 2.2 to Pioneer's Registration Statement on
Form S-3, Registration No. 333-20483, filed with the SEC on
December 15, 1997).
2.2* Plan of Arrangement, as amended, under Section 186 of the
Business Corporations Act (Alberta).
2.3* Support Agreement, dated as of December 18, 1997, between
Pioneer and Pioneer Natural Resources (Canada) Ltd. ("Pioneer
Canada").
2.4* Voting and Exchange Trust Agreement, dated as of December 18,
1997, among Pioneer, Pioneer Canada and Montreal Trust
Company of Canada, as Trustee.
2.5 Amended and Restated Shareholders Agreement, dated as of
September 3, 1997, by and among Pioneer and Guy J. Turcotte
(incorporated by reference to Exhibit 2.6 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-20483
filed with the SEC on December 15, 1997).
2.6 Shareholders Agreement, dated as of September 3, 1997, by and
among Pioneer, Chauvco, DNR-MESA Holdings, L.P. ("DNR"),
Scott D. Sheffield and I. Jon Brumley (incorporated by reference
to Exhibit 2.3 to Pioneer's Current Report on Form 8-K, File
No. 001-13245, filed with the SEC on October 2, 1997).
2.7 Shareholders Agreement, dated as of September 3, 1997, by and
among Pioneer, Trimac Corporation and Gendis Inc.
(incorporated by reference to Exhibit 2.4 to Pioneer's
Current report on Form 8-K, File No.001-13245, filed with the SEC
on October 2, 1997).
2.8 Amended and Restated Shareholders Agreement, dated as of
September 3, 1997, by and among the Company and Guy J. Turcotte
(incorporated by reference to Exhibit 2.6 to the Company's
Registration Statement on Form S-3, Registration No. 333-42315),
filed with the SEC on December 15, 1997).
3.1 Certificate of Designations of Special Preferred Voting Stock
(incorporated by reference to Exhibit 3.3 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-20483,
filed with the SEC on December 15, 1997).
3.2 Terms and Conditions of Exchangeable Shares (incorporated by
reference to Annex F to the Definitive Joint Management
Information Circular and Proxy
</TABLE>
<PAGE> 32
<TABLE>
<S> <C>
Statement of Pioneer and Chauvco, File No. 001-13245, filed
with the SEC on November 17, 1997).
4.1* Form of Certificate of Special Preferred Voting Stock.
4.2* Form of Certificate of Exchangeable Shares.
10.1* Amended and Restated Credit Facility Agreement (Primary Facility),
dated as of December 18, 1997, between Pioneer, as Borrower,
and NationsBank of Texas, N.A. as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York,
as Documentation Agent, and The Chase Manhattan Bank, as
Syndication Agent and the other Co-Agents and Lenders named
therein.
10.2* Amended and Restated Credit Facility Agreement (364 Day Facility),
dated as of December 18, 1997, between Pioneer, as Borrower,
and NationsBank of Texas, N.A. as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York,
as Documentation Agent, and The Chase Manhattan Bank, as
Syndication Agent; and the other Co-Agents and Lenders named
therein.
10.3* Credit Agreement, dated as of December 18, 1997, among Chauvco,
Canadian Imperial Bank of Commerce, as Agent, and the other
Lenders named therein.
10.4 First Supplemental Indenture, dated as of April 15, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 10 5/8% Senior
Subordinated Notes Due 2006 (incorporated by reference to Exhibit
10.5 to Pioneer's Registration Statement on Form S-3, Registration
No. 333-39381, filed with the SEC on November 3, 1997).
10.5 Second Supplemental Indenture, dated as of August 7, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 10 5/8% Senior
Subordinated Notes Due 2006 (incorporated by reference to
Exhibit 10.6 to Pioneer's Registration Statement on Form S-3,
Registration No. 333-39381, filed with the SEC on November 3,
1997).
10.6* Third Supplemental Indenture, dated as of December 18, 1997,
among Pioneer USA, the Subsidiary Guarantors named therein,
Pioneer, and Harris Trust and Savings Bank, as Trustee, with
respect to the Indenture, dated as of July 2, 1996, as amended,
relating to Pioneer USA's 10 5/8% Senior Subordinated Notes due
2006.
10.7* Fourth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer USA, a Delaware corporation, Pioneer, a
Delaware corporation, Pioneer NewSubl, Inc., a Texas corporation,
and Harris Trust and Savings Bank, an Illinois corporation, as
trustee, with respect to the Indenture, dated as of July 2, 1996,
as amended, relating to Pioneer USA's 10 5/8% Senior Subordinated
Notes due 2006.
10.8* Fifth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer NewSubl, Inc. (as successor to Pioneer USA), a
Texas corporation, Pioneer, a Delaware corporation, Pioneer
DebtCo, Inc., a Texas corporation, and Harris Trust and Savings
Bank, an Illinois corporation, as trustee, with respect to the
Indenture, dated as of July 2, 1996, as amended, relating to
Pioneer USA's 10 5/8% Senior Subordinated Notes due 2006.
10.9* Sixth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer DebtCo, Inc. (as successor to Pioneer NewSubl,
Inc.), a Texas corporation, Pioneer, a Delaware corporation,
and Harris Trust and Savings Bank, an Illinois corporation, as
trustee, with respect to the Indenture, dated as of July 2, 1996,
as amended, relating to Pioneer USA's 10 5/8% Senior Subordinated
Notes due 2006.
10.10 First Supplemental Indenture, dated as of April 15, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 11 5/8%
Senior Subordinated Discount Notes Due 2006 (incorporated by
reference to Exhibit 10.2 to Pioneer's Registration Statement on
Form S-3, Registration No. 333-39381, filed with the SEC on
November 3, 1997).
10.11 Second Supplemental Indenture, dated as of August 7, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 11 5/8%
Senior Subordinated Discount Notes Due 2006 (incorporated by
reference to Exhibit 10.3 to Pioneer's Registration Statement on
Form S-3, Registration No. 333-39381, filed with the SEC on
November 3, 1997).
10.12* Third Supplemental Indenture, dated as of December 18, 1997,
among Pioneer USA, the Subsidiary Guarantors named therein,
Pioneer, and Harris Trust and Savings Bank, as Trustee, with
respect to the Indenture, dated as of July 2, 1996, as amended,
relating to Pioneer USA's 11 5/8% Senior Subordinated Notes due
2006.
</TABLE>
<PAGE> 33
<TABLE>
<S> <C>
10.13* Fourth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer USA (formerly known as Mesa Operating Co.), a
Delaware corporation, Pioneer, a Delaware corporation,
Pioneer NewSub1, Inc., a Texas corporation, and Harris Trust and
Savings Bank, an Illinois corporation, as Trustee, with respect
to the Indenture dated as of July 2, 1996, as amended, relating
to Pioneer USA's 11 5/8% Senior Subordinated Discount Notes Due.
10.14* Fifth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer NewSub1, Inc. (as successor to Pioneer USA), a
Texas corporation, Pioneer, a Delaware corporation, Pioneer
DebtCo, Inc., a Texas corporation, and Harris Trust and Savings
Bank, an Illinois corporation, as trustee, with respect to the
Indenture dated as of July 2, 1996, as amended, relating to
Pioneer USA's 11 5/8% Senior Subordinated Discount Notes Due
2006.
10.15* Sixth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer DebtCo, Inc.(as successor to Pioneer NewSub1,
Inc.), a Texas corporation, Pioneer, a Delaware corporation,
and Harris Trust and Savings Bank, an Illinois corporation, as
trustee, with respect to the Indenture dated as of July 2, 1996,
as amended, relating to Pioneer USA's 11 5/8% Senior Subordinated
Discount Notes Due 2006.
10.16 First Supplemental Indenture, dated as of August 7, 1997, among
Parker & Parsley, The Chase Manhattan Bank, as Trustee, and
Pioneer USA, with respect to the Indenture, dated April 12,
1995, between Pioneer USA (successor to Parker & Parsley
Petroleum Company), and The Chase Manhattan Bank (National
Association), as Trustee (incorporated by reference to Exhibit
10.9 to Pioneer's Registration Statement on Form S-3,
Registration No. 333-39381, filed with the SEC on November 3,
1997).
10.17* Second Supplemental Indenture, dated as of December 30, 1997,
among Pioneer USA, a Delaware corporation, Pioneer NewSubl, Inc., a
Texas corporation, and The Chase Manhattan Bank, a New York
banking association, as trustee, with respect to the Indenture,
dated as of April 12, 1995, as amended, relating to Pioneer USA's
8 7/8% Senior Notes Due 2005 and 8 1/4% Senior Notes Due 2007.
10.18* Third Supplemental Indenture, dated as of December 30, 1997,
among Pioneer NewSubl, Inc. (as successor to Pioneer USA), a
Texas corporation, Pioneer DebtCo, Inc., a Texas corporation, and
The Chase Manhattan Bank, a New York banking association, as
trustee, with respect to the Indenture, dated as of April 12,
1995, as amended, relating to Pioneer USA's 8 7/8% Senior Notes
Due 2005 and 8 1/4% Senior Notes Due 2007.
10.19* Fourth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer DebtCo, Inc. (as successor to Pioneer NewSubl,
Inc., as successor to Pioneer USA), a Texas corporation,
Pioneer, a Delaware corporation, Pioneer USA, a Delaware
corporation, and The Chase Manhattan Bank, a New York banking
association, as trustee, with respect to the Indenture, dated as
of April 12, 1995, as amended, relating to Pioneer USA's 8 7/8%
Senior Notes Due 2005 and 8 1/4% Senior Notes Due 2007.
</TABLE>
<PAGE> 34
<TABLE>
<S> <C>
10.20* Guarantee, dated as of December 30, 1997, by Pioneer USA relating
to the $150,000,000 in aggregate principal amount of 8 7/8%
Senior Notes Due 2005 and $150,000,000 in aggregate principal
amount of 8 1/4% Senior Notes Due 2007 issued under the
Indenture, dated as of April 12, 1995, between Pioneer USA and
The Chase Manhattan Bank, a New York banking association, as
Trustee.
10.21* Note, dated December 22, 1997, between Pioneer, as Borrower,
and NationsBank of Texas, N.A., as Lender.
10.22* Purchase and Sale Agreement, dated as of October 22, 1997, between
Cometra Energy, L.P., and Pioneer USA.
10.23* Indemnification Agreement, dated as of August 8, 1997, between
Pioneer and Scott D. Sheffield, together with a schedule
identifying substantially identical agreements between Pioneer's
other directors and named executive officers identified on
Schedule I.
10.24 Gathering Agreement, dated May 29, 1987, between Mesa Operating
Limited Partnership and Colorado Interstate Gas Company
(incorporated by reference to Exhibit 10.26 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-39381,
filed with the SEC on November 3, 1997).
10.25 Amendment to 1990 Gathering Agreement Amendment, dated September
1, 1997, between Colorado Interstate Gas Company and Pioneer USA
(incorporated by reference to Exhibit 10.28 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-39381,
filed with the SEC on November 3, 1997).
10.26 Stock Acquisition Loan Agreement entered into as of June 15,
1995, between Parker & Parsley Petroleum Company and Scott D.
Sheffield, together with Schedule I identifying executive
officers with substantially identical agreements providing for
Parker & Parsley Petroleum Company's loans to such officers in
order to acquire shares of Parker & Parsley Petroleum Company's
Common Stock, par value $0.01 per share (incorporated by
reference to Exhibit 10.48 to Pioneer's Amendment No. 1 to
Registration Statement on Form S-3, Registration No. 333-39381,
filed with the SEC on November 3, 1997).
</TABLE>
- ----------------------
* Filed herewith.
<PAGE> 1
EXHIBIT 2.2
PLAN OF ARRANGEMENT
UNDER SECTION 186
OF THE BUSINESS CORPORATIONS ACT (ALBERTA)
ARTICLE 1
INTERPRETATION
1.1 Definitions. In this Plan of Arrangement unless there is something in
the subject matter or context inconsistent therewith, the following terms shall
have the respective meanings set out below and grammatical variations of such
terms shall have corresponding meanings:
"ABCA" means the Business Corporations Act (Alberta), as amended;
"Arrangement" means the arrangement under section 186 of the ABCA on the terms
and subject to the conditions set out in this Plan of Arrangement, subject to
any amendments thereto made in accordance with Section 6.1 hereof or made at
the direction of the Court in the Final Order;
"Arrangement Resolution" means the special resolution passed by the holders of
the Chauvco Common Shares and Chauvco Options at the Meeting;
"Automatic Redemption Date" has the meaning attributed thereto in the
Exchangeable Share Provisions;
"Average Closing Price" means the average closing sales price, regular way, per
share of the US Co Common Stock on the NYSE in United States dollars as
reported in the Wall Street Journal over the ten (10) consecutive trading days
ending on the third trading day next preceding the date of the Meeting
converted to Canadian dollars using the Currency Exchange Rate;
"Business Day" has the meaning attributed thereto in the Exchangeable Share
Provisions;
"Cash Payment " means the cash payment, if any, which a holder of Chauvco
Common Shares or Chauvco Options is entitled to receive in accordance with
Section 2.2;
"Certificates" means, collectively, the certificates representing the
Exchangeable Shares and shares of US Co Common Stock (in each case rounded down
to the nearest whole number) and the CRI Shares which a holder of Chauvco
Common Shares or Chauvco Options is entitled to receive pursuant to the
Arrangement;
"Chauvco" means Chauvco Resources Ltd., a corporation organized and existing
under the ABCA and any successor corporation;
"Chauvco Common Shares" means the common shares in the capital of Chauvco;
<PAGE> 2
-2-
"Chauvco Options" means each of the outstanding options to purchase Chauvco
Common Shares, including all outstanding options granted under Chauvco's Stock
Option Plan as amended and restated on November 10, 1995;
"Combination Agreement" means the agreement by and among US Co and Chauvco,
dated as of September 3, 1997, as the same may be amended and restated,
providing for, among other things, the Arrangement;
"Court" means the Court of Queen's Bench of Alberta;
"CR" means CR International Limited, a corporation organized and existing under
the laws of Bermuda;
"CRI" means Chauvco Resources International Ltd., a corporation organized and
existing under the laws of Bermuda;
"CRI Shares" means the common shares in the capital of CRI;
"Currency Exchange Rate" means the noon spot rate of exchange of US dollars to
Canadian dollars announced by the Bank of Canada on the day preceding the date
of calculation;
"Depositary" means Montreal Trust Company of Canada at its principal office in
Calgary, Alberta;
"Dissent Procedures" has the meaning attributed thereto in Section 3.1;
"Effective Date" means the date the articles of arrangement giving effect to
this Plan of Arrangement are filed by the Registrar of Corporations pursuant to
subsection 186(10) of the ABCA;
"Effective Time" means 12:01 a.m. on the Effective Date;
"Election Deadline" means that date which is two (2) days prior to the date of
the Meeting;
"Exchange Ratio" has the meaning attributed thereto in Section 2.2;
"Exchangeable Share Consideration" has the meaning attributed thereto in the
Exchangeable Share Provisions;
"Exchangeable Share Price" has the meaning attributed thereto in the
Exchangeable Share Provisions;
"Exchangeable Share Provisions" means the rights, privileges, restrictions and
conditions attaching to the Exchangeable Shares;
"Exchangeable Shares" means the exchangeable shares in the capital of US Co
Sub;
"Final Order" means the final order of the Court approving the Arrangement as
such order may be amended by the Court at any time prior to the Effective Time;
<PAGE> 3
-3-
"Gabon Securities" has the meaning attributed thereto in Section 2.1(b);
"Gabon Subsidiaries" has the meaning attributed thereto in Section 2.1(b);
"ITA" means the Income Tax Act (Canada), as amended;
"Joint Proxy Statement" means the Joint Management Information Circular and
Proxy Statement of Chauvco and US Co dated November 14, 1997;
"Letter of Transmittal and Election Form" has the meaning attributed thereto in
Section 2.1(h);
"Liquidation Call Purchase Price" has the meaning attributed thereto in Section
5.1;
"Liquidation Call Right" has the meaning attributed thereto in Section 5.1;
"Liquidation Date" has the meaning attributed thereto in the Exchangeable Share
Provisions;
"Meeting" means the special meeting of Shareholders and Optionholders to be
held to consider the Arrangement;
"NYSE" means the New York Stock Exchange;
"Optionholders" means holders of Chauvco Options;
"Option Letter of Transmittal and Election Form" has the meaning attributed
thereto in Section 2.1(f);
"Option Payment" has the meaning attributed thereto in Section 2.1(e);
"Record Date" means that date which is three trading days prior to the
Effective Date;
"Redemption Call Purchase Price" has the meaning attributed thereto in Section
5.2;
"Redemption Call Right" has the meaning attributed thereto in Section 5.2;
"Shareholders" means holders of Chauvco Common Shares;
"Shareholders Rights Plan Agreement" means the Shareholders Rights Plan
Agreement between Chauvco and Montreal Trust Company of Canada made as of April
24, 1997;
"Subsidiary" has the meaning attributed thereto in the Exchangeable Share
Provisions;
"US Co" means Pioneer Natural Resources Company, a corporation organized and
existing under the laws of the State of Delaware and any successor corporation;
"US Co Common Stock" has the meaning attributed thereto in the Exchangeable
Share Provisions;
"US Co Stock Price" has the meaning attributed thereto in Section 2.2;
<PAGE> 4
-4-
"US Co Sub" means Pioneer Natural Resources (Canada) Ltd., a corporation
organized and existing under the laws of British Columbia and any successor
corporation;
"US Co Sub Common Shares" means the common shares in the capital of US Co Sub;
"Voting Share" has the meaning ascribed to such term in the Voting and Exchange
Trust Agreement;
"Voting and Exchange Trust Agreement" has the meaning attributed thereto in the
Exchangeable Share Provisions; and
"Westoil" means Westoil Marine & Transport Co Ltd., a corporation organized and
existing under the laws of Bermuda.
1.2 Sections and Headings. The division of this Plan of Arrangement into
sections and the insertion of headings are for reference purposes only and
shall not affect the interpretation of this Plan of Arrangement. Unless
otherwise indicated, any reference in this Plan of Arrangement to a section or
an Appendix refers to the specified section of or Appendix to this Plan of
Arrangement.
1.3 Number, Gender and Persons. In this Plan of Arrangement, unless the
context otherwise requires, words importing the singular number include the
plural and vice versa, words importing any gender include all genders and words
importing persons include individuals, corporations, partnerships,
associations, trusts, unincorporated organizations, governmental bodies and
other legal or business entities of any kind.
1.4 Currency. Unless otherwise specified, all references herein to
"dollars" or "$" shall mean Canadian dollars.
ARTICLE 2
ARRANGEMENT
2.1 Arrangement. At the Effective Time, the following transactions shall
occur and shall be deemed to occur in the following order without any further
act or formality:
(a) Chauvco shall subscribe for that number of CRI Shares as is
equal to (i) the number of Chauvco Common Shares which are issued and
outstanding on the Record Date, (ii) plus that number of Chauvco Common Shares
which all Optionholders would otherwise be entitled to acquire on the exercise
of their Chauvco Options on a fully vested basis on the Record Date (other than
Chauvco Common Shares that could be acquired by Optionholders who exercise
their right of dissent in accordance with Article 3 hereof and who are
ultimately entitled to be paid the fair value of their Chauvco Options), (iii)
less that number of CRI Shares then held by Chauvco, and (iv) less that number
of Chauvco Common Shares held by Shareholders who have exercised their rights
of dissent in accordance with Article 3 hereof and who are ultimately entitled
to be paid the fair value for such shares. The subscription price for the CRI
Shares shall be paid for in cash in the aggregate amount equal to US$5,000,000
plus the fair market value on the Effective Date (as determined and adjusted in
accordance with Section 2.3) of the Gabon Securities;
<PAGE> 5
-5-
(b) CRI shall purchase from CR for cash in an aggregate amount
equal to the fair market value thereof on the Effective Date (as determined
and adjusted in accordance with Section 2.3), (i) all of the issued and
outstanding securities of Chauvco Resources (Gabon) S.A., Chauvco Resources
(Gabon-Ngalo) S.A., Chauvco Resources (Gabon-Maga) S.A., Chauvco Resources
(Gabon-Avomo) S.A. and CR Trading Co. Ltd. (collectively, the "Gabon
Subsidiaries"), (ii) 75% of the issued and outstanding securities of Westoil,
and (iii) all of its rights under a loan in the amount of U.S. $909,421.60 made
by CR to Olympic Marine Services International, Inc. (which owns the remaining
25% of the issued and outstanding securities of Westoil), any and all advances
made by CR to Westoil, and any and all advances made by Chauvco (all of which
shall have first been assigned by Chauvco to CR) to the Gabon Subsidiaries and
Westoil (such securities in Section 2.1(b)(i), (ii) and (iii) collectively, the
"Gabon Securities");
(c) Chauvco shall transfer, assign and convey to CRI, in
consideration for $1.00, all of Chauvco's right, title, benefit and interest in
and to any and all trademarks (including registrations and applications
therefor), trade names and the internet domain name "chauvco.com" owned by
Chauvco as at the Effective Time, and the other assets and property which are
set out in Exhibit I;
(d) US Co Sub shall purchase from Chauvco all of the issued and
outstanding CRI Shares in consideration of the payment by way of promissory
note of US Co Sub to Chauvco in an amount equal to the subscription price paid
for such CRI Shares by Chauvco under Section 2.1(a);
(e) each of the outstanding Chauvco Options (other than Chauvco
Options held by an Optionholder who has exercised its right of dissent in
accordance with Article 3 hereof and is ultimately entitled to be paid the fair
value of its Chauvco Options) will vest, if not already vested, and be
transferred to US Co Sub in consideration for one (1) CRI Share and, in
accordance with the election of each Optionholder and the remainder of this
Section 2.1(e) and Section 2.1(f), a number of shares of US Co Common Stock
determined in accordance with the Exchange Ratio in which event, in addition to
transferring the Chauvco Options to US Co Sub, the Optionholder will be
required to make a payment to US Co Sub (the "Option Payment") in an amount
equal to the aggregate exercise price which the Optionholder would otherwise be
required to pay on the exercise of such options. As an alternative to making
the Option Payment, Optionholders will be entitled to elect to reduce the
number of shares of US Co Common Stock to be received by the number obtained by
dividing the Option Payment by the US Co Stock Price (converted into Canadian
dollars using the Currency Exchange Rate). Each Optionholder will receive only
a whole number of shares of US Co Common Stock resulting from the transfer of
his Chauvco Options. In lieu of fractional shares of US Co Common Stock, each
Optionholder who would otherwise be entitled to receive such fractional shares
shall be paid by US Co Sub an amount determined in accordance herewith in full
satisfaction of such fractional entitlement;
(f) an Optionholder electing to make the Option Payment and
receive the applicable number of shares of US Co Common Stock under Section
2.1(e) above must have given effect to the election by depositing with the
Depositary, prior to the Election Deadline, a duly completed letter of
transmittal and election form (the "Option Letter of Transmittal and Election
Form") in the form provided by Chauvco along with the Joint Proxy Statement
indicating such holder's election and by agreeing to pay the Option Payment to
the Depositary as agent for US Co Sub. Coincident with the receipt of the CRI
Shares and shares of US Co Common Stock, such Optionholder shall pay the Option
Payment to the Depositary as agent for US Co Sub less any amounts receivable by
such Optionholder in connection with fractional entitlements hereunder. In the
event that an Optionholder
<PAGE> 6
-6-
who has elected to make the Option Payment fails to make the Option Payment on
or before the day that is 60 days after the Effective Date, such Optionholder
shall be deemed to have elected the option to receive the reduced number of
shares of US Co Common Stock by not making the Option Payment. In the event
that an Optionholder has failed to validly make an election in the Option
Letter of Transmittal and Election Form pursuant to this paragraph, such
Optionholder shall be deemed to have elected the option to receive the reduced
number of shares of US Co Common Stock by not making the Option Payment;
(g) each of the outstanding Chauvco Common Shares that are not
held by a Shareholder who has exercised its right of dissent in accordance with
Article 3 hereof and is ultimately entitled to be paid the fair value of its
Chauvco Common Shares will be transferred to US Co Sub in consideration for one
(1) CRI Share and, at the election of the holders of the Chauvco Common Shares:
(i) a number of shares of US Co Common Stock determined
in accordance with the Exchange Ratio. Each such
holder of Chauvco Common Shares will receive only a
whole number of shares of US Co Common Stock
resulting from the transfer of such holder's Chauvco
Common Shares to US Co Sub. In lieu of fractional
shares of US Co Common Stock, each holder of a
Chauvco Common Share who otherwise would be entitled
to receive such fractional share shall be paid by US
Co Sub an amount determined in accordance herewith in
full satisfaction of such fractional entitlement; or
(ii) a number of shares of Exchangeable Shares determined
in accordance with the Exchange Ratio. Each such
holder of Chauvco Common Shares will receive only a
whole number of Exchangeable Shares resulting from
the transfer of such holder's Chauvco Common Shares
to US Co Sub. In lieu of fractional Exchangeable
Shares, each holder of a Chauvco Common Share who
otherwise would be entitled to receive such
fractional share shall be paid by US Co Sub an amount
determined in accordance herewith in full
satisfaction of such fractional entitlement,
provided that such holders shall be entitled to elect to
receive a combination of shares of US Co Common Stock and
Exchangeable Shares on the transfer of their Chauvco Common
Shares; and
contemporaneously with such transfer, the Shareholders Rights Plan Agreement
and all outstanding Rights (as defined in the Shareholders Rights Plan
Agreement) will be terminated, void and of no further force or effect;
(h) a holder of Chauvco Common Shares must have given effect to
the election in Section 2.1(g) above by depositing with the Depositary, prior
to the Election Deadline, a duly completed letter of transmittal and election
form (the "Letter of Transmittal and Election Form") in the form provided by
Chauvco along with the Joint Proxy Statement indicating such holder's election.
In the event that a holder of Chauvco Common Shares has failed to validly make
an election under Section 2.1(g) in the Letter of Transmittal and Election Form
pursuant to this paragraph, such holder shall
<PAGE> 7
-7-
be deemed to have elected the option under Section 2.1(g)(i). Notwithstanding
any provision to the contrary, holders of Chauvco Common Shares who are not
residents of Canada for the purposes of the ITA will not be entitled to receive
Exchangeable Shares under Section 2.1(g)(ii). Each holder of Chauvco Common
Shares who, prior to the Election Deadline, returned to Chauvco a duly
completed Letter of Transmittal and Election Form (containing a declaration of
residency status) shall be treated as a resident shareholder or non-resident
shareholder, as applicable, in accordance with his declaration. Any holder of
Chauvco Common Shares who did not complete such declaration by the Election
Deadline and who has an address on the register of holders of Chauvco Common
Shares which is outside of Canada shall be deemed to be a non-resident
shareholder;
(i) upon the transfer of shares referred to in Section 2.1(g)
above: (i) each holder of a Chauvco Common Share shall cease to be such a
holder, shall have his name removed from the register of holders of Chauvco
Common Shares and shall become a holder of the number of fully paid CRI Shares
and Exchangeable Shares and/or shares of US Co Common Stock to which he is
entitled as a result of the transfer of shares referred to in Section 2.1(g)
and such holder's name shall be added to the register of holders of such
securities accordingly; and (ii) US Co Sub shall become the legal and
beneficial owner of all of the Chauvco Common Shares so transferred;
(j) holders of Chauvco Common Shares who are residents of Canada
for the purposes of the ITA and who have elected to receive Exchangeable Shares
under Section 2.1(g)(ii) shall be entitled to make an income tax election
pursuant to subsection 85(1) of the ITA with respect to the transfer of their
Chauvco Common Shares to US Co Sub by providing two signed copies of the
necessary election forms to US Co Sub within 90 days following the Effective
Date, duly completed with the details of the number of shares transferred and
the applicable agreed amounts for the purposes of such elections. Thereafter,
subject to the election forms complying with the provisions of the ITA, the
forms will be signed by US Co Sub and returned to such holders of Chauvco
Common Shares for filing with Revenue Canada, Customs, Excise and Taxation;
(k) US Co shall issue to and deposit with the Depositary the
Voting Share, in consideration of the payment to US Co of US$1, to be hereafter
held of record by the Depositary as trustee for and on behalf of, and for the
use and benefit of, the holders of the Exchangeable Shares, in accordance with
the Voting and Exchange Trust Agreement; and
(l) US Co Sub shall be continued as a corporation under the ABCA.
2.2 Exchange Ratio. As used herein, the term "Exchange Ratio" means in
respect of Exchangeable Shares or US Co Common Stock to be delivered upon the
transfer of Chauvco Common Shares or Chauvco Options to US Co Sub, a ratio of
the number of Exchangeable Shares or shares of US Co Common Stock per Chauvco
Common Share or Chauvco Option equal to:
(a) if the US Co Stock Price is less than US$33.50, (.493827);
(b) if the US Co Stock Price is at least US$33.50 but less than
US$39.01,
.493827 - ((US Co Stock Price - 33.50) X .042360)
-------------------------
5.51
<PAGE> 8
-8-
and
(c) if the US Co Stock Price is equal to or greater than $39.01,
(.451467).
The Exchange Ratio as so determined in each case shall be rounded to six
decimal places. The "US Co Stock Price" shall mean the average closing sales
price, regular way, per share of the US Co Common Stock on the NYSE in United
States dollars as reported in the Wall Street Journal over the ten (10)
consecutive trading days ending on the third trading day next preceding the
date of the Meeting. Notwithstanding the foregoing, if the Exchange Ratio is
above .465116, US Co may elect to cause US Co Sub to deliver, in lieu of
Exchangeable Shares and shares of US Co Common Stock, a number of Exchangeable
Shares or shares of US Co Common Stock for each Chauvco Common Share or Chauvco
Option based on the Exchange Ratio as set forth above equal to (.465116) and an
amount in cash (in Canadian dollars) per Chauvco Common Share or Chauvco Option
equal to the product of (x) the US Co Stock Price multiplied by the Currency
Exchange Rate and (y)
Exchange Ratio -- .465116.
2.3 Fair Market Value. (a) Chauvco determined that the fair market value
of the Gabon Securities on September 3, 1997 was approximately US$60,000,000
relying on (i) the bidding process in connection with the sale of Chauvco, (ii)
the reserve and evaluation reports prepared by Chauvco's independent engineers,
(iii) the review and recommendation of Chauvco's senior management which
established a range of values at various discount factors and an assessment of
the exploration and development potential of the applicable properties, and
(iv) an independent review conducted to confirm and support the allocation to
the CRI Shares by Chauvco of a portion of the consideration received by the
Chauvco Shareholders. The fair market value of the Gabon Securities on the
Effective Date shall be revalued and determined by Chauvco using consistent
principles.
(b) Notwithstanding the determination of the fair market value of
the Gabon Securities on the Effective Date under Section 2.3(a), unless Chauvco
and US Co otherwise agree, the amount which will be payable with respect to
such value may not exceed US$100,000,000.
ARTICLE 3
RIGHTS OF DISSENT
3.1 Rights of Dissent. Shareholders and Optionholders may exercise rights
of dissent with respect to their Chauvco Common Shares and Chauvco Options
pursuant to and in the manner set forth in section 184 of the ABCA (as modified
by the Interim Order) and this Section 3.1 (the "Dissent Procedures") in
connection with the Arrangement and holders who duly exercise such rights of
dissent and who:
(a) are ultimately entitled to be paid the fair value for their
Chauvco Common Shares or Chauvco Options shall be deemed to have transferred
such Chauvco Common Shares or Chauvco Options to Chauvco for cancellation on
the Effective Date; or
<PAGE> 9
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(b) are ultimately not entitled, for any reason, to be paid the
fair value for their Chauvco Common Shares or Chauvco Options shall be deemed
to have participated in the Arrangement on the same basis as any
non-dissenting Shareholder or Optionholder,
but in no case shall Chauvco be required to recognize such holders as
Shareholders or Optionholders on and after the Effective Date, and the names of
such Shareholders shall be deleted from the register of holders of Chauvco
Common Shares on the Effective Date.
3.2 Dissent Payments. The obligations to make payments in respect of
dissenting Shareholders and Optionholders (the "Dissent Obligations") shall be
apportioned between Chauvco and CRI as follows:
(a) CRI shall pay that portion of the Dissent Obligations equal to
the result determined by applying the following formula:
Fair market value of the Gabon Securities
determined in accordance with
Section 2.3 X the Currency Exchange Rate
- ---------------------------------------------- X Total Dissent Obligations
(US Co Stock Price X (the total number of
X the Currency Chauvco Common Shares
Exchange Rate) outstanding on the
Effective Date X the
Exchange Ratio)
(b) Chauvco shall pay the remaining portion of the Dissent
Obligations.
ARTICLE 4
CERTIFICATES, CASH PAYMENT AND FRACTIONAL SHARES
4.1 Delivery of Certificates and Cash Payment. At or promptly after the
Effective Time, US Co Sub shall deposit with the Depositary, for the benefit
of the holders of Chauvco Common Shares and Chauvco Options transferred
pursuant to the Arrangement, the Certificates and Cash Payment, if any, to
which each such holder is entitled pursuant to the Arrangement. Upon surrender
to the Depositary:
(a) in the case of holders of Chauvco Common Shares, for
cancellation of a certificate which immediately prior to the Effective Time
represented outstanding Chauvco Common Shares, together with a duly completed
Letter of Transmittal and Election Form; and
(b) in the case of Optionholders of a duly completed Option Letter
of Transmittal and Election Form and, if applicable, the Option Payment;
and, in either case, of such additional documents and instruments as the
Depositary may reasonably require, each such holder shall be entitled to
receive, and the Depositary shall forthwith deliver to each such holder, the
Certificates and the Cash Payment to which such holder has the right to receive
pursuant to the Arrangement (together with any dividends or distributions with
respect to the Exchangeable Shares, US Co Common Stock or CRI Shares, as
applicable, pursuant to Section 4.2 and any cash in lieu of fractional shares
pursuant to Section 4.3), and any certificates so surrendered shall forthwith
be cancelled. In the event of a transfer of ownership of Chauvco Common Shares
<PAGE> 10
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which is not registered in the transfer records of Chauvco, the Certificates
may be issued and the Cash Payment, if any, may be paid and delivered to a
transferee if the certificate representing such Chauvco Common Shares is
presented to the Depositary, accompanied by all documents required to evidence
and effect such transfer. Until surrendered as contemplated by this Section
4.1, each certificate which immediately prior to the Effective Time represented
outstanding Chauvco Common Shares and the Chauvco Options that were transferred
pursuant to the Arrangement shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender (a) the
Certificates and the Cash Payment, if any, to which the holder of Chauvco
Common Shares or Chauvco Options has the right to receive pursuant to the
Arrangement, (b) a cash payment in lieu of any fractional shares as
contemplated by Section 4.3 and (c) any dividends or distributions with a
record date after the Effective Time theretofore paid or payable with respect
to the Exchangeable Shares, US Co Common Stock and CRI Shares, as applicable,
as contemplated by Section 4.2. No interest will be paid from or after the
Effective Date in respect of the Cash Payment.
4.2 Distributions Limited. No dividends or other distributions declared
or made after the Effective Time with respect to the Exchangeable Shares, US Co
Common Stock and CRI Shares, as applicable, with a record date after the
Effective Time shall be paid to the holder of any unsurrendered certificate and
who has not returned a Letter of Transmittal and Election Form which,
immediately prior to the Effective Time, represented outstanding Chauvco Common
Shares or to any Optionholder who has not returned an Option Letter of
Transmittal and Election Form, duly completed and, if applicable, paid the
Option Payment pursuant to Section 2.1(e), and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 4.3,
(and no interest will be earned or payable on these proceeds) unless and until
such certificate and Letter of Transmittal and Election Form or Option Letter
of Transmittal and Election Form and Option Payment, if applicable, shall be
received by the Depositary in accordance with Section 4.1. Subject to
applicable law and to Section 4.5, at the time of such surrender of any such
certificate and Letter of Transmittal and Election Form or Option Letter of
Transmittal and Election Form and Option Payment, if applicable, (or, in the
case of clause (c) below, at the appropriate payment date), there shall be paid
to the record holder of such certificate or to the applicable Optionholder
without interest, (a) the amount of any cash payable in lieu of fractional
shares to which such holder is entitled pursuant to Section 4.3, (b) the amount
of dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to the Exchangeable Shares, US Co Common Stock
and CRI Shares, as applicable, and (c) the amount of dividends or other
distributions with a record date after the Effective Time but prior to
surrender and a payment date subsequent to surrender payable with respect to
the Exchangeable Shares, US Co Common Stock and CRI Shares, as applicable.
4.3 No Fractional Shares. No fractional Exchangeable Shares or shares of
US Co Common Stock shall be issued upon the surrender for transfer of
certificates and Letter of Transmittal and Election Form or upon delivery of an
Option Letter of Transmittal and Election Form and Option Payment, if
applicable, pursuant to Section 4.1 and such fractional interests shall not
entitle the owner thereof to vote or to exercise any rights as a security
holder of Chauvco, US Co or US Co Sub. In lieu of any such fractional
securities, each person entitled to a fractional interest in an Exchangeable
Share or share of US Co Common Stock will receive an amount of cash (rounded to
the nearest whole cent), without interest, equal to the product of (a) such
fraction multiplied by (b) the Average Closing Price of the US Co Common Stock,
such amount to be provided to the Depositary by US Co Sub upon request.
<PAGE> 11
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4.4 Lost Certificates. If any certificate which immediately prior to the
Effective Time represented outstanding Chauvco Common Shares that were
transferred pursuant to Section 2.1 has been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming such certificate
to be lost, stolen or destroyed, the Depositary will issue and deliver in
exchange for such lost, stolen or destroyed certificate, the Certificates and
Cash Payment, if any, to which the holder of such certificate is entitled
pursuant to the Arrangement (and any dividends or distributions with respect
thereto and any cash pursuant to Section 4.3) deliverable in respect thereof as
determined in accordance with Section 2.1. The person who is entitled to
receive such Certificates and Cash Payment, if any, and other payments shall,
as a condition precedent to the receipt thereof, give a bond satisfactory to US
Co Sub and US Co Sub's transfer agent (the "Transfer Agent"), as the case may
be, in such form as US Co Sub may direct or otherwise indemnify US Co Sub in a
manner satisfactory to US Co Sub and the Transfer Agent against any claim that
may be made against US Co Sub or the Transfer Agent with respect to the
certificate alleged to have been lost, stolen or destroyed.
4.5 Extinguishment of Rights. Any certificate which immediately prior to
the Effective Time represented outstanding Chauvco Common Shares that were
transferred pursuant to Section 2.1 and has not been deposited, and any Chauvco
Options with respect to which an Option Letter of Transmittal and Election Form
and the Option Payment, if applicable, has not been deposited or paid, in each
case with all other instruments required by Section 4.1, on or prior to the
tenth anniversary of the Effective Date shall cease to represent a claim or
interest of any kind or nature as a shareholder of Chauvco or an Optionholder.
On such date, the consideration and other payments to which the former
registered holder of the certificate or Optionholder referred to in the
preceding sentence was ultimately entitled shall be deemed to have been
surrendered to US Co together with all entitlements to dividends, distributions
and interest thereon held for such former registered holder for no
consideration.
ARTICLE 5
CERTAIN RIGHTS OF US CO TO ACQUIRE EXCHANGEABLE SHARES
5.1 US Co Liquidation Call Right.
(a) US Co shall have the overriding right (the "Liquidation Call
Right"), in the event of and notwithstanding the proposed liquidation,
dissolution or winding-up of US Co Sub pursuant to Article 5 of the
Exchangeable Share Provisions, to purchase from all but not less than all of
the holders (other than US Co and any Subsidiary thereof) of Exchangeable
Shares on the Liquidation Date all but not less than all of the Exchangeable
Shares held by each such holder on payment by US Co to the holder of the
Exchangeable Share Price applicable on the last Business Day prior to the
Liquidation Date (the "Liquidation Call Purchase Price"). In the event of the
exercise of the Liquidation Call Right by US Co, each holder shall be obligated
to sell all the Exchangeable Shares held by the holder to US Co on the
Liquidation Date on payment by US Co to the holder of the Liquidation Call
Purchase Price for each such share.
(b) To exercise the Liquidation Call Right, US Co must notify US
Co Sub's Transfer Agent in writing, as agent for the holders of Exchangeable
Shares, and US Co Sub of US Co's intention to exercise such right at least 55
days before the Liquidation Date in the case of a voluntary liquidation,
dissolution or winding-up of US Co Sub and at least five Business Days before
the
<PAGE> 12
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Liquidation Date in the case of an involuntary liquidation, dissolution or
winding-up of US Co Sub. The Transfer Agent will notify the holders of
Exchangeable Shares as to whether or not US Co has exercised the Liquidation
Call Right forthwith after the expiry of the date by which the same may be
exercised by US Co. If US Co exercises the Liquidation Call Right, on the
Liquidation Date US Co will purchase and the holders will sell all of the
Exchangeable Shares then outstanding for a price per share equal to the
Liquidation Call Purchase Price.
(c) For the purposes of completing the purchase of the
Exchangeable Shares pursuant to the Liquidation Call Right, US Co shall deposit
with the Transfer Agent, on or before the Liquidation Date, the Exchangeable
Share Consideration representing the total Liquidation Call Purchase Price.
Provided that such Exchangeable Share Consideration has been so deposited with
the Transfer Agent, on and after the Liquidation Date the rights of each holder
of Exchangeable Shares will be limited to receiving such holder's proportionate
part of the total Liquidation Call Purchase Price payable by US Co without
interest upon presentation and surrender by the holder of certificates
representing the Exchangeable Shares held by such holder and the holder shall
on and after the Liquidation Date be considered and deemed for all purposes to
be the holder of the US Co Common Stock delivered to such holder. Upon
surrender to the Transfer Agent of a certificate or certificates representing
Exchangeable Shares, together with such other documents and instruments as may
be required to effect a transfer of Exchangeable Shares under applicable law
and such additional documents and instruments as the Transfer Agent may
reasonably require, the holder of such surrendered certificate or certificates
shall be entitled to receive in exchange therefor, and the Transfer Agent on
behalf of US Co shall deliver to such holder, the Exchangeable Share
Consideration to which the holder is entitled. If US Co does not exercise the
Liquidation Call Right in the manner described above, on the Liquidation Date
the holders of the Exchangeable Shares will be entitled to receive in exchange
therefor the liquidation price otherwise payable by US Co Sub in connection
with the liquidation, dissolution or winding-up of US Co Sub pursuant to
Article 5 of the Exchangeable Share Provisions. Notwithstanding the foregoing,
until such Exchangeable Share Consideration is delivered to the holder, the
holder shall be deemed to still be a holder of Exchangeable Shares for purposes
of all voting rights with respect thereto under the Voting and Exchange Trust
Agreement.
5.2 US Co Redemption Call Right.
(a) US Co shall have the overriding right (the "Redemption Call
Right"), notwithstanding the proposed redemption of the Exchangeable Shares by
US Co Sub pursuant to Article 7 of the Exchangeable Share Provisions, to
purchase from all but not less than all of the holders (other than US Co or any
Subsidiary thereof) of Exchangeable Shares on the Automatic Redemption Date all
but not less than all of the Exchangeable Shares held by each such holder on
payment by US Co to the holder of the Exchangeable Share Price applicable on
the last Business Day prior to the Automatic Redemption Date (the "Redemption
Call Purchase Price"). In the event of the exercise of the Redemption Call
Right by US Co, each holder shall be obligated to sell all the Exchangeable
Shares held by the holder to US Co on the Automatic Redemption Date on payment
by US Co to the holder of the Redemption Call Purchase Price for each such
share.
(b) To exercise the Redemption Call Right, US Co must notify the
Transfer Agent in writing, as agent for the holders of Exchangeable Shares, and
US Co Sub of US Co's intention to exercise such right at least 125 days before
the Automatic Redemption Date. The Transfer Agent will notify the holders of
the Exchangeable Shares as to whether or not US Co has exercised the
<PAGE> 13
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Redemption Call Right forthwith after the date by which the same may be
exercised by US Co. If US Co exercises the Redemption Call Right, on the
Automatic Redemption Date US Co will purchase and the holders will sell all of
the Exchangeable Shares then outstanding for a price per share equal to the
Redemption Call Purchase Price.
(c) For the purposes of completing the purchase of the
Exchangeable Shares pursuant to the Redemption Call Right, US Co shall deposit
with the Transfer Agent, on or before the Automatic Redemption Date, the
Exchangeable Share Consideration representing the total Redemption Call
Purchase Price. Provided that such Exchangeable Share Consideration has been
so deposited with the Transfer Agent, on and after the Automatic Redemption
Date the rights of each holder of Exchangeable Shares will be limited to
receiving such holder's proportionate part of the total Redemption Call
Purchase Price payable by US Co without interest upon presentation and
surrender by the holder of certificates representing the Exchangeable Shares
held by such holder and the holder shall on and after the Automatic Redemption
Date be considered and deemed for all purposes to be the holder of the US Co
Common Stock delivered to such holder. Upon surrender to the Transfer Agent of
a certificate or certificates representing Exchangeable Shares, together with
such other documents and instruments as may be required to effect a transfer of
Exchangeable Shares under applicable law and such additional documents and
instruments as the Transfer Agent may reasonably require, the holder of such
surrendered certificate or certificates shall be entitled to receive in
exchange therefor, and the Transfer Agent on behalf of US Co shall deliver to
such holder, the Exchangeable Share Consideration to which the holder is
entitled. If US Co does not exercise the Redemption Call Right in the manner
described above, on the Automatic Redemption Date the holders of the
Exchangeable Shares will be entitled to receive in exchange therefor the
redemption price otherwise payable by US Co Sub in connection with the
redemption of the Exchangeable Shares pursuant to Article 7 of the Exchangeable
Share Provisions. Notwithstanding the foregoing, until such Exchangeable Share
Consideration is delivered to the holder, the holder shall be deemed to still
be a holder of Exchangeable Shares for purposes of all voting rights with
respect thereto under the Voting and Exchange Trust Agreement.
ARTICLE 6
AMENDMENT
6.1 Plan of Arrangement Amendment. Chauvco reserves the right to amend,
modify and/or supplement this Plan of Arrangement at any time and from time to
time provided that any such amendment, modification, or supplement must be
contained in a written document that is (a) agreed to by US Co, (b) filed with
the Court and, if made following the Meeting, approved by the Court and (c)
communicated to holders of Chauvco Common Shares in the manner required by the
Court (if so required).
Any amendment, modification or supplement to this Plan of Arrangement
may be proposed by Chauvco at any time prior to or at the Meeting (provided
that US Co shall have consented thereto) with or without any other prior notice
or communication, and if so proposed and accepted by the persons voting at the
Meeting (other than as may be required under the Court's interim order), shall
become part of this Plan of Arrangement for all purposes.
Any amendment, modification or supplement to this Plan of Arrangement
that is approved by the Court following the Meeting shall be effective only (a)
if it is consented to by Chauvco (b) if it is consented to by US Co and (c) if
required by the Court or applicable law, it is consented to by the holders of
the Exchangeable Shares.
<PAGE> 1
EXHIBIT 2.3
SUPPORT AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 18th day of December, 1997,
BETWEEN:
PIONEER NATURAL RESOURCES COMPANY, a corporation incorporated
under the laws of the State of Delaware and having its head
and principal office at Irving, Texas (hereinafter referred to
as "US Co")
OF THE FIRST PART,
- and -
PIONEER NATURAL RESOURCES (CANADA) LTD., a corporation
continued under the laws of the Province of Alberta and having
its head and principal office at Calgary, Alberta (hereinafter
referred to as "US Co Sub")
OF THE SECOND PART.
WHEREAS pursuant to a combination agreement dated as of September 3,
1997, by and between US Co and Chauvco Resources Ltd. ("Chauvco") (such
agreement as it may be amended or restated is hereinafter referred to as the
"Combination Agreement"), the parties agreed that on the Effective Date (as
defined in the Combination Agreement), US Co and US Co Sub would execute and
deliver a Support Agreement containing the terms and conditions set forth in
Exhibit B to the Combination Agreement together with such other terms and
conditions as may be agreed to by the parties to the Combination Agreement
acting reasonably;
AND WHEREAS pursuant to an arrangement (the "Arrangement") effected by
Articles of Arrangement dated December 18, 1997 filed pursuant to the Business
Corporations Act (Alberta) certain of the issued and outstanding common shares
of Chauvco ("Chauvco Common Shares") were exchanged for, among other things,
issued and outstanding Exchangeable Shares of US Co Sub (the "Exchangeable
Shares");
AND WHEREAS the Articles of US Co Sub set forth the rights,
privileges, restrictions and conditions (collectively, the "Exchangeable Share
Provisions") attaching to the Exchangeable Shares;
AND WHEREAS the parties hereto desire to make appropriate provision
and to establish a procedure whereby US Co will take certain actions and make
certain payments and deliveries necessary to ensure that US Co Sub will be able
to make certain payments and to deliver or cause
<PAGE> 2
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to be delivered shares of US Co Common Stock in satisfaction of the obligations
of US Co Sub under the Exchangeable Share Provisions with respect to the
payment and satisfaction of dividends, Liquidation Amounts, Retraction Prices
and Redemption Prices, all in accordance with the Exchangeable Share
Provisions;
NOW THEREFORE in consideration of the respective covenants and
agreements provided in this Agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
1. DEFINITIONS AND INTERPRETATION
(a) Defined Terms. Each term denoted herein by initial capital
letters and not otherwise defined herein shall have the
meaning attributed thereto in the Exchangeable Share
Provisions, unless the context requires otherwise.
(b) Interpretation Not Affected by Headings, etc. The division of
this Agreement into articles, sections and paragraphs and the
insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation of
this Agreement.
(c) Number, Gender, etc. Words importing the singular number only
shall include the plural and vice versa. Words importing the
use of any gender shall include all genders.
(d) Date for any Action. If any date on which any action is
required to be taken under this Agreement is not a Business
Day, such action shall be required to be taken on the next
succeeding Business Day.
2. COVENANTS OF US CO AND US CO SUB
(a) Covenants of US Co Regarding Exchangeable Shares. So long as
any Exchangeable Shares are outstanding, US Co will:
(i) not declare or pay any dividend on US Co Common Stock
unless (A) US Co Sub will have sufficient assets,
funds and other property available to enable the due
declaration and the due and punctual payment in
accordance with applicable law of an equivalent
dividend on the Exchangeable Shares and (B) US Co Sub
shall simultaneously declare or pay, as the case may
be, an equivalent dividend on the Exchangeable
Shares, in each case in accordance with the
Exchangeable Share Provisions;
(ii) advise US Co Sub sufficiently in advance of the
declaration by US Co of any dividend on US Co Common
Stock and take all such other actions as are
necessary, in cooperation with US Co Sub, to ensure
that the respective declaration date, record date and
payment date for a dividend on the Exchangeable
Shares shall be the same as the record date,
declaration date and payment date for the
corresponding dividend on US Co Common Stock and such
dividend on the Exchangeable Shares shall correspond
with any
<PAGE> 3
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requirement of the principal stock exchange on which
the Exchangeable Shares are listed;
(iii) ensure that the record date for any dividend declared
on US Co Common Stock is not less than 10 calendar
days after the declaration date for such dividend;
(iv) take all such actions and do all such things as are
necessary or desirable to enable and permit US Co
Sub, in accordance with applicable law, to pay and
otherwise perform its obligations with respect to the
satisfaction of the Liquidation Amount in respect of
each issued and outstanding Exchangeable Share upon
the liquidation, dissolution or winding-up of US Co
Sub, including without limitation all such actions
and all such things as are necessary or desirable to
enable and permit US Co Sub to cause to be delivered
shares of US Co Common Stock to the holders of
Exchangeable Shares in accordance with the provisions
of Article 5 of the Exchangeable Share Provisions;
(v) take all such actions and do all such things as are
necessary or desirable to enable and permit US Co
Sub, in accordance with applicable law, to pay and
otherwise perform its obligations with respect to the
satisfaction of the Retraction Price and the
Redemption Price, including without limitation all
such actions and all such things as are necessary or
desirable to enable and permit US Co Sub to cause to
be delivered shares of US Co Common Stock to the
holders of Exchangeable Shares, upon the retraction
or redemption of the Exchangeable Shares in
accordance with the provisions of Article 6 or
Article 7 of the Exchangeable Share Provisions, as
the case may be; and
(vi) not exercise its vote as a direct or indirect
shareholder to initiate the voluntary liquidation,
dissolution or winding-up of US Co Sub nor take any
action or omit to take any action that is designed to
result in the liquidation, dissolution or winding-up
of US Co Sub.
(b) Segregation of Funds. US Co will cause US Co Sub to deposit a
sufficient amount of funds in a separate account and segregate
a sufficient amount of such assets and other property as is
necessary to enable US Co Sub to pay or otherwise satisfy the
applicable dividends, Liquidation Amount, Retraction Price or
Redemption Price, in each case for the benefit of holders from
time to time of the Exchangeable Shares, and to use such
funds, assets and other property so segregated exclusively for
the payment of dividends and the payment or other satisfaction
of the Liquidation Amount, the Retraction Price or the
Redemption Price, as applicable, net of any corresponding
withholding tax obligations and for the remittance of such
withholding tax obligations.
(c) Reservation of Shares of US Co Common Stock. US Co hereby
represents, warrants and covenants that it has irrevocably
reserved for issuance and will at all times keep available,
free from pre-emptive and other rights, out of its authorized
and unissued capital stock such number of shares of US Co
Common Stock (or other shares or
<PAGE> 4
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securities into which US Co Common Stock may be reclassified
or changed as contemplated by section 2(g) hereof) (i) as is
equal to the sum of (A) the number of Exchangeable Shares
issued and outstanding from time to time and (B) the number of
Exchangeable Shares issuable upon the exercise of all rights
to acquire Exchangeable Shares outstanding from time to time
and (ii) as are now and may hereafter be required to enable
and permit US Co Sub to meet its obligations hereunder, under
the Voting and Exchange Trust Agreement, under the
Exchangeable Share Provisions and under any other security or
commitment pursuant to the Arrangement with respect to which
US Co may now or hereafter be required to issue shares of US
Co Common Stock.
(d) Notification of Certain Events. In order to assist US Co to
comply with its obligations hereunder, US Co Sub will give US
Co notice of each of the following events at the time set
forth below:
(i) in the event of any determination by the Board of
Directors of US Co Sub to institute voluntary
liquidation, dissolution or winding-up proceedings
with respect to US Co Sub or to effect any other
distribution of the assets of US Co Sub among its
shareholders for the purpose of winding-up its
affairs, at least 60 days prior to the proposed
effective date of such liquidation, dissolution,
winding-up or other distribution;
(ii) immediately, upon the earlier of (A) receipt by US Co
Sub of notice of, and (B) US Co Sub otherwise
becoming aware of, any threatened or instituted
claim, suit, petition or other proceedings with
respect to the involuntary liquidation, dissolution
or winding-up of US Co Sub or to effect any other
distribution of the assets of US Co Sub among its
shareholders for the purpose of winding-up its
affairs;
(iii) immediately, upon receipt by US Co Sub of a
Retraction Request (as defined in the Exchangeable
Share Provisions);
(iv) at least 130 days prior to any accelerated Automatic
Redemption Date determined by the Board of Directors
of US Co Sub in accordance with the Exchangeable
Share Provisions; and
(v) as soon as practicable upon the issuance by US Co Sub
of any Exchangeable Shares or rights to acquire
Exchangeable Shares.
(e) Delivery of Shares of US Co Common Stock. In furtherance of
its obligations hereunder, upon notice of any event which
requires US Co Sub to cause to be delivered shares of US Co
Common Stock to any holder of Exchangeable Shares, US Co shall
forthwith issue and deliver the requisite shares of US Co
Common Stock to or to the order of the former holder of the
surrendered Exchangeable Shares, as US Co Sub shall direct.
All such shares of US Co Common Stock shall be duly issued as
fully paid and non- assessable and shall be free and clear of
any lien, claim, encumbrance, security interest or adverse
claim.
<PAGE> 5
- 5 -
(f) Qualification of Shares of US Co Common Stock. US Co
covenants that if any shares of US Co Common Stock (or other
shares or securities into which US Co Common Stock may be
reclassified or changed as contemplated by section 2(g)
hereof) to be issued and delivered hereunder, including for
greater certainty, pursuant to the Exchangeable Share
Provisions, or pursuant to the Exchange Right or the Automatic
Exchange Rights (both as defined in the Voting and Exchange
Trust Agreement) require registration or qualification with or
approval of or the filing of any document including any
prospectus or similar document or the taking of any proceeding
with or the obtaining of any order, ruling or consent from any
governmental or regulatory authority under any Canadian or
United States federal, provincial or state law or regulation
or pursuant to the rules and regulations of any regulatory
authority or the fulfillment of any other legal requirement
(collectively, the "Applicable Laws") before such shares (or
other shares or securities into which US Co Common Stock may
be reclassified or changed as contemplated by section 2(g)
hereof) may be issued and delivered by US Co to the initial
holder thereof (other than US Co Sub) or in order that such
shares may be freely traded thereafter (other than any
restrictions on transfer by reason of a holder being a
"control person" of US Co for purposes of Canadian federal or
provincial securities law or an "affiliate" of US Co or, prior
to the Effective Date, of Chauvco for purposes of United
States federal or state securities law), US Co will in good
faith expeditiously take all such actions and do all such
things as are necessary to cause such shares of US Co Common
Stock (or other shares or securities into which US Co Common
Stock may be reclassified or changed as contemplated by
section 2(g) hereof) to be and remain duly registered,
qualified or approved. US Co represents and warrants that it
has in good faith taken all actions and done all things as are
necessary under Applicable Laws as they exist on the date
hereof to cause the shares of US Co Common Stock (or other
shares or securities into which US Co Common Stock may be
reclassified or changed as contemplated by section 2(g)
hereof) to be issued and delivered hereunder, including for
greater certainty, pursuant to the Exchangeable Share
Provisions, or pursuant to the Exchange Right and the
Automatic Exchange Right to be freely tradeable thereafter
(other than restrictions on transfer by reason of a holder
being a "control person" of US Co for the purposes of Canadian
federal and provincial securities law or an "affiliate" of US
Co or, prior to the Effective Date, of Chauvco for the
purposes of United States federal or state securities law).
US Co will in good faith expeditiously take all such actions
and do all such things as are necessary to cause all shares of
US Co Common Stock (or other shares or other securities into
which US Co Common Stock may be reclassified or changed as
contemplated by section 2(g) hereof) to be delivered
hereunder, including for greater certainty, pursuant to the
Exchangeable Share Provisions, or pursuant to the Exchange
Right or the Automatic Exchange Rights to be listed, quoted or
posted for trading on all stock exchanges and quotation
systems on which such shares are listed, quoted or posted for
trading at such time. US Co will in good faith expeditiously
take all such action and do all such things as are necessary
to cause all Exchangeable Shares to be and to continue to be
listed and posted for trading on The Toronto Stock Exchange.
<PAGE> 6
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(g) Equivalence.
(i) US Co will not without the prior approval of US Co
Sub and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section
9.2 of the Exchangeable Share Provisions:
(A) issue or distribute shares of US Co Common
Stock (or securities exchangeable for or
convertible into or carrying rights to
acquire shares of US Co Common Stock) to the
holders of all or substantially all of the
then outstanding US Co Common Stock by way of
stock dividend or other distribution; or
(B) issue or distribute rights, options or
warrants to the holders of all or
substantially all of the then outstanding
shares of US Co Common Stock entitling them
to subscribe for or to purchase shares of US
Co Common Stock (or securities exchangeable
for or convertible into or carrying rights to
acquire shares of US Co Common Stock); or
(C) issue or distribute to the holders of all or
substantially all of the then outstanding
shares of US Co Common Stock (I) shares or
securities of US Co of any class other than
US Co Common Stock (other than shares
convertible into or exchangeable for or
carrying rights to acquire shares of US Co
Common Stock), (II) rights, options or
warrants other than those referred to in
subsection 2(g)(i)(B) above, (III) evidences
of indebtedness of US Co or (IV) assets of US
Co;
unless
(D) US Co Sub is permitted under applicable law
to issue or distribute the economic
equivalent on a per share basis of such
rights, options, securities, shares,
evidences of indebtedness or other assets to
holders of the Exchangeable Shares; and
(E) US Co Sub shall issue or distribute the
economic equivalent on a per share basis of
such rights, options, securities, shares,
evidences of indebtedness or other assets
simultaneously to holders of the Exchangeable
Shares.
(ii) US Co will not without the prior approval of US Co
Sub and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section
9.2 of the Exchangeable Share Provisions:
(A) subdivide, divide or change the then
outstanding shares of US Co Common Stock into
a greater number of shares of US Co Common
Stock; or
(B) reduce, combine or consolidate or change the
then outstanding shares of US Co Common Stock
into a lesser number of shares of US Co
Common Stock; or
<PAGE> 7
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(C) reclassify or otherwise change the shares of
US Co Common Stock or effect an amalgamation,
merger, reorganization or other transaction
affecting the shares of US Co Common Stock;
unless (I) US Co Sub is permitted under applicable
law to simultaneously make the same or an equivalent
change to, or in the rights of holders of, the
Exchangeable Shares and (II) the same or an
equivalent change is made to, or in the rights of the
holders of, the Exchangeable Shares.
(iii) US Co will ensure that the record date for any event
referred to in section 2(g)(i) or 2(g)(ii) above, or
(if no record date is applicable for such event) the
effective date for any such event, is not less than
10 calendar days after the date on which such event
is declared or announced by US Co (with simultaneous
notice thereof to be given by US Co to US Co Sub).
(h) Tender Offers, etc. In the event that a tender offer, share
exchange offer, issuer bid, take-over bid or similar
transaction with respect to US Co Common Stock (an "Offer") is
proposed by US Co or is proposed to US Co or its shareholders
and is recommended by the Board of Directors of US Co, or is
otherwise effected or to be effected with the consent or
approval of the Board of Directors of US Co, US Co shall take
all such actions and do all such things as are necessary or
desirable to enable and permit holders of Exchangeable Shares
to participate in such Offer to the same extent and on an
equivalent basis as the holders of shares of US Co Common
Stock, without discrimination, including, without limiting the
generality of the foregoing, US Co will use its good faith
efforts expeditiously to (and shall, in the case of a
transaction proposed by US Co or where US Co is a participant
in the negotiation thereof) ensure that holders of
Exchangeable Shares may participate in all such Offers without
being required to retract Exchangeable Shares as against US Co
Sub (or, if so required, to ensure that any such retraction
shall be effective only upon, and shall be conditional upon,
the closing of the Offer and only to the extent necessary to
tender or deposit to the Offer).
(i) Ownership of Outstanding Shares. Without the prior approval
of US Co Sub and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section 9.2 of
the Exchangeable Share Provisions, US Co covenants and agrees
in favour of US Co Sub that, as long as any outstanding
Exchangeable Shares are owned by any person or entity other
than US Co or any of its Subsidiaries, US Co will be and
remain the direct or indirect beneficial owner of all issued
and outstanding shares in the capital of US Co Sub and all
outstanding securities of US Co Sub carrying or otherwise
entitled to voting rights in any circumstances, in each case
other than the Exchangeable Shares.
(j) US Co Not to Vote Exchangeable Shares. US Co covenants and
agrees that it will appoint and cause to be appointed
proxyholders with respect to all Exchangeable Shares held by
US Co and its Subsidiaries for the sole purpose of attending
each meeting of holders of Exchangeable Shares in order to be
counted as part of the quorum for each such meeting. US Co
further covenants and agrees that it will not, and will cause
its Subsidiaries not to, exercise any voting rights which may
be
<PAGE> 8
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exercisable by holders of Exchangeable Shares from time to
time pursuant to the Exchangeable Share Provisions or pursuant
to the provisions of any corporate statute by which US Co Sub
may be governed with respect to any Exchangeable Shares held
by it or by its Subsidiaries in respect of any matter
considered at any meeting of holders of Exchangeable Shares.
(k) Due Performance. On and after the Effective Date, US Co shall
duly and timely perform all of its obligations provided for in
connection with the Plan of Arrangement including any
obligations that may arise upon the exercise of US Co's rights
under the Exchangeable Share Provisions.
(l) Appointment to US Co Board. US Co shall cause James R.
Baroffio to be appointed as a director of US Co on or prior to
the date hereof as a Class II Director to serve until US Co's
1999 annual stockholders' meeting; Guy J. Turcotte to be
nominated as a director of US Co for election at US Co's 1998
annual stockholders' meeting and Mr. Baroffio to be nominated
for re-election at US Co's 1999 annual stockholders' meeting.
US Co shall put forth Messrs. Turcotte and Baroffio for
election to its board of directors as aforesaid and will cause
to be solicited proxies for its stockholder's meetings in
favour of the election of such individual.
(m) Notwithstanding the general restriction in section 4.1(d) of
the share provisions of the Exchangeable Shares, US Co Sub
shall be entitled, for a period of 60 days following the
initial issuance of Exchangeable Shares, to issue Exchangeable
Shares, provided that concurrent with any such issuance it
acquires directly or indirectly an equivalent number of
Exchangeable Shares.
3. GENERAL
(a) Term. This Agreement shall come into force and be effective
as of the date hereof and shall terminate and be of no further
force and effect at such time as no Exchangeable Shares (or
securities or rights convertible into or exchangeable for or
carrying rights to acquire securities Exchangeable Shares) are
held by any party other than US Co and any of its
Subsidiaries.
(b) Changes in Capital of US Co and US Co Sub. Notwithstanding
the provisions of section 3(d) hereof, at all times after the
occurrence of any event effected pursuant to section 2(g) or
2(h) hereof, as a result of which either US Co Common Stock or
the Exchangeable Shares or both are in any way changed, this
Agreement shall forthwith be amended and modified as necessary
in order that it shall apply with full force and effect,
mutatis mutandis, to all new securities into which US Co
Common Stock or the Exchangeable Shares or both are so changed
and the parties hereto shall execute and deliver an agreement
in writing giving effect to and evidencing such necessary
amendments and modifications.
(c) Severability. If any provision of this Agreement is held to
be invalid, illegal or unenforceable, the validity, legality
or enforceability of the remainder of this Agreement shall not
in any way be affected or impaired thereby and this Agreement
<PAGE> 9
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shall be carried out as nearly as possible in accordance with
its original terms and conditions.
(d) Amendments, Modifications, etc. This Agreement may not be
amended or modified except by an agreement in writing executed
by US Co Sub and US Co and approved by the holders of the
Exchangeable Shares in accordance with Section 9.2 of the
Exchangeable Share Provisions.
(e) Ministerial Amendments. Notwithstanding the provisions of
section 3(d), the parties to this Agreement may in writing, at
any time and from time to time, without the approval of the
holders of the Exchangeable Shares, amend or modify this
Agreement for the purposes of:
(i) adding to the covenants of either or both parties for
the protection of the holders of the Exchangeable
Shares;
(ii) making such amendments or modifications not
inconsistent with this Agreement as may be necessary
or desirable with respect to matters or questions
which, in the opinion of the board of directors of
each of US Co Sub and US Co, it may be expedient to
make, provided that each such boards of directors
shall be of the opinion that such amendments or
modifications will not be prejudicial to the
interests of the holders of the Exchangeable Shares;
or
(iii) making such changes or corrections which, on the
advice of counsel to US Co Sub and US Co, are
required for the purpose of curing or correcting any
ambiguity or defect or inconsistent provision or
clerical omission or mistake or manifest error,
provided that the boards of directors of each of US
Co Sub and US Co shall be of the opinion that such
changes or corrections will not be prejudicial to the
interests of the holders of the Exchangeable Shares.
(f) Meeting to Consider Amendments. US Co Sub, at the request of
US Co, shall call a meeting or meetings of the holders of the
Exchangeable Shares for the purpose of considering any
proposed amendment or modification requiring approval of such
shareholders. Any such meeting or meetings shall be called
and held in accordance with the by-laws of US Co Sub, the
Exchangeable Share Provisions and all applicable laws.
(g) Amendments Only in Writing. No amendment to or modification
or waiver of any of the provisions of this Agreement otherwise
permitted hereunder shall be effective unless made in writing
and signed by both of the parties hereto.
(h) Inurement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and the holders, from time
to time, of Exchangeable Shares and each of their respective
heirs, successors and assigns.
(i) Notices to Parties. All notices and other communications
between the parties shall be in writing and shall be deemed to
have been given if delivered personally or by
<PAGE> 10
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confirmed telecopy to the parties at the following addresses
(or at such other address for either such party as shall be
specified in like notice):
(i) if to US Co at:
Pioneer Natural Resources Company
1400 Williams Square West
5205 N. O'Connor Blvd.
Irving, Texas 75039-3746
Attention: President
Telecopy: (972) 402-7057
(ii) if to US Co Sub at:
Pioneer Natural Resources (Canada) Ltd.
2900, 255 - 5th Avenue S.W.
Calgary, Alberta
T2P 3G6
Attention: President
Telecopy: (403) 231-3247
Any notice or other communication given personally shall be
deemed to have been given and received upon delivery thereof
and if given by telecopy shall be deemed to have been given
and received on the date of confirmed receipt thereof unless
such day is not a Business Day in which case it shall be
deemed to have been given and received upon the immediately
following Business Day.
(j) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, and all of which
taken together shall constitute one and the same instrument.
(k) Jurisdiction. This Agreement shall be construed and enforced
in accordance with the laws of the Province of Alberta and the
laws of Canada applicable therein.
(l) Attornment. US Co agrees that any action or proceeding
arising out of or relating to this Agreement may be instituted
in the courts of Alberta, waives any objection which it may
have now or hereafter to the venue of any such action or
proceeding, irrevocably submits to the jurisdiction of the
said courts in any such action or proceeding, agrees to be
bound by any judgment of the said courts and not to seek, and
hereby waives, any review of the merits of any such judgment
by the courts of any other jurisdiction and hereby appoints US
Co Sub at its registered office in the Province of Alberta as
US Co's attorney for service of process.
<PAGE> 11
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
PIONEER NATURAL
RESOURCES COMPANY
Per:
---------------------------
Per:
---------------------------
PIONEER NATURAL RESOURCES
(CANADA) LTD.
Per:
---------------------------
Per:
---------------------------
<PAGE> 1
EXHIBIT 2.4
VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 18th day of December, 1997,
AMONG:
PIONEER NATURAL RESOURCES COMPANY, a corporation incorporated
under the laws of the State of Delaware and having its head
and principal office at Irving, Texas (hereinafter referred to
as "US Co")
OF THE FIRST PART,
- and -
PIONEER NATURAL RESOURCES (CANADA) LTD., a corporation
continued under the laws of the Province of Alberta and having
its head and principal office at Calgary, Alberta (hereinafter
referred to as "US Co Sub")
OF THE SECOND PART,
- and -
MONTREAL TRUST COMPANY OF CANADA, a trust company existing
under the laws of Canada (hereinafter referred to as the
"Trustee")
OF THE THIRD PART.
WHEREAS pursuant to a combination agreement dated as of September 3,
1997, by and between US Co and Chauvco Resources Ltd. ("Chauvco") (such
agreement as it may be amended or restated is hereinafter referred to as the
"Combination Agreement"), the parties agreed that on the Effective Date (as
defined in the Combination Agreement), US Co and US Co Sub would execute and
deliver a Voting and Exchange Trust Agreement containing the terms and
conditions set forth in Exhibit C to the Combination Agreement together with
such other terms and conditions as may be agreed to by the parties to the
Combination Agreement acting reasonably;
AND WHEREAS pursuant to an arrangement (the "Arrangement") effected by
Articles of Arrangement dated December 18, 1997 filed pursuant to the Business
Corporations Act (Alberta), certain of the issued and outstanding common shares
of Chauvco ("Chauvco Common Shares") were
<PAGE> 2
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exchanged for, among other things, issued and outstanding Exchangeable Shares
of US Co Sub (the "Exchangeable Shares");
AND WHEREAS the Articles of US Co Sub set forth the rights,
privileges, restrictions and conditions (collectively, the "Exchangeable Share
Provisions") attaching to the Exchangeable Shares;
AND WHEREAS US Co is to provide voting rights in US Co to each holder
(other than US Co and its Subsidiaries) from time to time of Exchangeable
Shares, such voting rights per Exchangeable Share to be equivalent to the
voting rights per share of US Co Common Stock (the "US Co Common Stock");
AND WHEREAS US Co is to grant to and in favour of the holders (other
than US Co and its Subsidiaries) from time to time of Exchangeable Shares the
right, in the circumstances set forth herein, to require US Co to purchase from
each such holder all or any part of the Exchangeable Shares held by the holder;
AND WHEREAS the parties desire to make appropriate provision and to
establish a procedure whereby voting rights in US Co shall be exercisable by
holders (other than US Co and its Subsidiaries) from time to time of
Exchangeable Shares by and through the Trustee, which will hold legal title to
one (1) share of US Co Special Preferred Voting Stock (the "US Co Special
Voting Stock") to which voting rights attach for the benefit of such holders
and whereby the rights to require US Co to purchase Exchangeable Shares from
the holders thereof (other than US Co and its Subsidiaries) shall be
exercisable by such holders from time to time of Exchangeable Shares by and
through the Trustee, which will hold legal title to such rights for the benefit
of such holders;
AND WHEREAS these recitals and any statements of fact in this
Agreement are made by US Co and US Co Sub and not by the Trustee;
NOW THEREFORE in consideration of the respective covenants and
agreements provided in this Agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
1. DEFINITIONS AND INTERPRETATION
(a) Definitions. In this Agreement, the following terms
shall have the following meanings:
"Aggregate Equivalent Vote Amount" means, with respect to any matter,
proposition or question on which holders of US Co Common Stock are
entitled to vote, consent or otherwise act, the product of (i) the
number of shares of Exchangeable Shares issued and outstanding and
held by Holders multiplied by (ii) the Equivalent Vote Amount.
"Arrangement" has the meaning attributed thereto in the recitals
hereto.
<PAGE> 3
- 3 -
"Automatic Exchange Rights" means the benefit of the obligation of US
Co to effect the automatic exchange of shares of US Co Common Stock
for Exchangeable Shares pursuant to Section 5(1) hereof.
"Board of Directors" means the Board of Directors of US Co Sub.
"Business Day" has the meaning attributed thereto in the Exchangeable
Share Provisions.
"Equivalent Vote Amount" means, with respect to any matter,
proposition or question on which holders of US Co Common Stock are
entitled to vote, consent or otherwise act, the number of votes to
which a holder of one share of US Co Common Stock is entitled with
respect to such matter, proposition or question.
"Exchange Right" has the meaning attributed thereto in Article 5
hereof.
"Exchangeable Share Consideration" has the meaning attributed thereto
in the Exchangeable Share Provisions.
"Exchangeable Share Price" has the meaning attributed thereto in the
Exchangeable Share Provisions.
"Exchangeable Share Provisions" has the meaning attributed thereto in
the recitals hereto.
"Exchangeable Shares" has the meaning attributed thereto in the
recitals hereto.
"Holder Votes" has the meaning attributed thereto in Section 4(b)
hereof.
"Holders" means the registered holders from time to time of
Exchangeable Shares, other than US Co and its Subsidiaries.
"Insolvency Event" means the institution by US Co Sub of any
proceeding to be adjudicated a bankrupt or insolvent or to be
dissolved or wound-up, or the consent of US Co Sub to the institution
of bankruptcy, insolvency, dissolution or winding-up proceedings
against it, or the filing of a petition, answer or consent seeking
dissolution or winding-up under any bankruptcy, insolvency or
analogous laws, including without limitation the Companies' Creditors'
Arrangement Act (Canada) and the Bankruptcy and Insolvency Act
(Canada), and the failure by US Co Sub to contest in good faith any
such proceedings commenced in respect of US Co Sub within 15 days of
becoming aware thereof, or the consent by US Co Sub to the filing of
any such petition or to the appointment of a receiver, or the making
by US Co Sub of a general assignment for the benefit of creditors, or
the admission in writing by US Co Sub of its inability to pay its
debts generally as they become due, or US Co Sub not being permitted,
pursuant to liquidity or solvency requirements of applicable law, to
redeem any Retracted Shares pursuant to Section 6.6 of the
Exchangeable Share Provisions.
"Liquidation Call Right" has the meaning attributed thereto in the
Exchangeable Share Provisions.
<PAGE> 4
- 4 -
"Liquidation Event" has the meaning attributed thereto in subsection
5(l)(ii) hereof.
"Liquidation Event Effective Date" has the meaning attributed thereto
in subsection 5(l)(iii) hereof.
"List" has the meaning attributed thereto in Section 4(f) hereof.
"Officers' Certificate" means, with respect to US Co or US Co Sub, as
the case may be, a certificate signed by any two of the Chairman of
the Board, the Vice-Chairman of the Board, the President, any
Vice-President or any other senior officer of US Co or US Co Sub, as
the case may be.
"Person" includes an individual, partnership, corporation, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative.
"Plan of Arrangement" has the meaning attributed thereto in the
Exchangeable Share Provisions.
"Redemption Call Right" has the meaning attributed thereto in the
Exchangeable Share Provisions.
"Retracted Shares" has the meaning attributed thereto in Section 5(g)
hereof.
"Retraction Call Right" has the meaning attributed thereto in the
Exchangeable Share Provisions.
"Subsidiary" has the meaning attributed thereto in the Exchangeable
Share Provisions.
"Support Agreement" means that certain support agreement made as of
even date hereof between US Co Sub and US Co.
"Trust" means the trust created by this Agreement.
"Trust Estate" means the Voting Share, any other securities, the
Exchange Right, the Automatic Exchange Rights and any money or other
property which may be held by the Trustee from time to time pursuant
to this Agreement.
"Trustee" means Montreal Trust Company of Canada and, subject to the
provisions of Article 10 hereof, includes any successor trustee or
permitted assigns.
"US Co Common Stock" has the meaning attributed thereto in the
recitals hereto.
"US Co Consent" has the meaning attributed thereto in Section 4(b)
hereof.
"US Co Meeting" has the meaning attributed thereto in Section 4(b)
hereof.
<PAGE> 5
- 5 -
"US Co Special Voting Stock" has the meaning attributed thereto in the
recitals hereto.
"US Co Successor" has the meaning attributed thereto in subsection
11(a)(ii) hereof.
"Voting Rights" means the voting rights attached to the Voting Shares.
"Voting Share" means the one (1) share of US Co Special Voting Stock,
U.S. $0.01 par value, issued by US Co to and deposited with the
Trustee, which entitles the holder of record to a number of votes at
meetings of holders of US Co Common Stock equal to the Aggregate
Equivalent Vote Amount.
(b) Interpretation Not Affected by Headings, etc. The division of
this Agreement into articles, sections and paragraphs and the
insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation of
this Agreement.
(c) Number, Gender, etc. Words importing the singular number only
shall include the plural and vice versa. Words importing the
use of any gender shall include all genders.
(d) Date for any Action. If any date on which any action is
required to be taken under this Agreement is not a Business
Day, such action shall be required to be taken on the next
succeeding Business Day.
2. PURPOSE OF AGREEMENT
The purpose of this Agreement is to create the Trust for the benefit
of the Holders, as herein provided. The Trustee will hold the Voting
Share in order to enable the Trustee to exercise the Voting Rights and
will hold the Exchange Right and the Automatic Exchange Rights in
order to enable the Trustee to exercise such rights, in each case as
Trustee for and on behalf of the Holders as provided in this
Agreement.
3. VOTING SHARE
(a) Issuance and Ownership of the Voting Share. US Co hereby
issues to and deposits with the Trustee the Voting Share to be
hereafter held of record by the Trustee as trustee for and on
behalf of, and for the use and benefit of, the Holders and in
accordance with the provisions of this Agreement. US Co hereby
acknowledges receipt from the Trustee as the trustee for and
on behalf of the Holders of good and valuable consideration
(and the adequacy thereof) and $1 in hand paid for the
issuance of the Voting Share by US Co to the Trustee. During
the term of the Trust and subject to the terms and conditions
of this Agreement, the Trustee shall possess and be vested
with full legal ownership of the Voting Share and shall be
entitled to exercise all of the rights and powers of an owner
with respect to the Voting Share, provided that the Trustee
shall:
<PAGE> 6
- 6 -
(i) hold the Voting Share and the legal title thereto as
trustee solely for the use and benefit of the Holders
in accordance with the provisions of this Agreement;
and
(ii) except as specifically authorized by this Agreement,
have no power or authority to sell, transfer, vote or
otherwise deal in or with the Voting Share and the
Voting Share shall not be used or disposed of by the
Trustee for any purpose other than the purposes for
which this Trust is created pursuant to this
Agreement.
(b) Legended Share Certificates. US Co Sub will cause each
certificate representing Exchangeable Shares to bear an
appropriate legend notifying the Holders of their right to
instruct the Trustee with respect to the exercise of the
Voting Rights with respect to the Exchangeable Shares held by
a Holder.
(c) Safe Keeping of Certificate. The certificate representing the
Voting Share shall at all times be held in safe keeping by the
Trustee or its agent.
4. EXERCISE OF VOTING RIGHTS
(a) Voting Rights. The Trustee, as the holder of record of the
Voting Share, shall be entitled to all of the Voting Rights,
including the right to consent to or to vote in person or by
proxy the Voting Share, on any matter, question or proposition
whatsoever that may properly come before the stockholders of
US Co at a US Co Meeting or in connection with a US Co Consent
(in each case, as hereinafter defined). The Voting Rights
shall be and remain vested in and exercised by the Trustee.
Subject to Section 7(o) hereof, the Trustee shall exercise the
Voting Rights only on the basis of instructions received
pursuant to this Article 4 from Holders entitled to instruct
the Trustee as to the voting thereof at the time at which a US
Co Consent is sought or a US Co Meeting is held. To the extent
that no instructions are received from a Holder with respect
to the Voting Rights to which such Holder is entitled, the
Trustee shall not exercise or permit the exercise of such
Holder's Vote.
(b) Number of Votes. With respect to all meetings of stockholders
of US Co at which holders of shares of US Co Common Stock are
entitled to vote (a "US Co Meeting") and with respect to all
written consents sought by US Co from its stockholders
including the holders of shares of US Co Common Stock (a "US
Co Consent"), each Holder shall be entitled to instruct the
Trustee to cast and exercise, in the manner instructed, a
number of votes equal to the Equivalent Vote Amount for each
Exchangeable Share owned of record by such Holder on the
record date established by US Co or by applicable law for such
US Co Meeting or US Co Consent, as the case may be (the
"Holder Votes") in respect of each matter, question or
proposition to be voted on at such US Co Meeting or to be
consented to in connection with such US Co Consent.
<PAGE> 7
- 7 -
(c) Mailings to Shareholders. With respect to each US Co Meeting
and US Co Consent, the Trustee will mail or cause to be mailed
(or otherwise communicate in the same manner as US Co utilizes
in communications to holders of US Co Common Stock, subject to
the Trustee's ability to provide this method of communication
and upon being advised in writing of such method) to each of
the Holders named in the List on the same day as the initial
mailing or notice (or other communication) with respect
thereto is given by US Co to its stockholders:
(i) a copy of such notice, together with any proxy or
information statement and related materials to be
provided to stockholders of US Co;
(ii) a statement that such Holder is entitled to instruct
the Trustee as to the exercise of the Holder Votes
with respect to such US Co Meeting or US Co Consent,
as the case may be, or, pursuant to Section 4(g)
hereof, to attend such US Co Meeting and to exercise
personally the Holder Votes thereat;
(iii) a statement as to the manner in which such
instructions may be given to the Trustee, including
an express indication that instructions may be given
to the Trustee to give:
(A) a proxy to such Holder or his designee to
exercise personally the Holder Votes; or
(B) a proxy to a designated agent or other
representative of the management of US Co to
exercise such Holder Votes;
(iv) a statement that if no such instructions are received
from the Holder, the Holder Votes to which such
Holder is entitled will not be exercised;
(v) a form of direction whereby the Holder may so direct
and instruct the Trustee as contemplated herein; and
(vi) a statement of (A) the time and date by which such
instructions must be received by the Trustee in order
to be binding upon it, which in the case of a US Co
Meeting shall not be later than the close of business
on the Business Day prior to such meeting, and (B)
the method for revoking or amending such
instructions.
The materials referred to above are to be provided by US Co to
the Trustee, but shall be subject to review and comment by the
Trustee.
For the purpose of determining Holder Votes to which a Holder
is entitled in respect of any such US Co Meeting or US Co
Consent, the number of Exchangeable Shares owned of record by
the Holder shall be determined at the close of business on the
record date established by US Co or by applicable law for
purposes of determining stockholders entitled to vote at such
US Co Meeting or to give written consent in connection with
such US Co Consent. US Co will notify the Trustee in writing
of
<PAGE> 8
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any decision of the board of directors of US Co with respect
to the calling of any such US Co Meeting or the seeking of any
such US Co Consent and shall provide all necessary information
and materials to the Trustee in each case promptly and in any
event in sufficient time to enable the Trustee to perform its
obligations contemplated by this Section 4(c).
(d) Copies of Stockholder Information. US Co will deliver to the
Trustee copies of all proxy materials (including notices of US
Co Meetings but excluding proxies to vote shares of US Co
Common Stock), information statements, reports (including
without limitation all interim and annual financial
statements) and other written communications that are to be
distributed from time to time to holders of US Co Common Stock
in sufficient quantities and in sufficient time so as to
enable the Trustee to send those materials to each Holder at
the same time as such materials are first sent to holders of
US Co Common Stock. The Trustee will mail or otherwise send to
each Holder, at the expense of US Co, copies of all such
materials (and all materials specifically directed to the
Holders or to the Trustee for the benefit of the Holders by US
Co) received by the Trustee from US Co at the same time as
such materials are first sent to holders of US Co Common
Stock. The Trustee will make copies of all such materials
available for inspection by any Holder at the Trustee's
principal office in the cities of Calgary and Toronto.
(e) Other Materials. Immediately after receipt by US Co or any
stockholder of US Co of any material sent or given generally
to the holders of US Co Common Stock by or on behalf of a
third party, including without limitation dissident proxy and
information circulars (and related information and material)
and tender and exchange offer circulars (and related
information and material), US Co shall use its best efforts to
obtain and deliver to the Trustee copies thereof in sufficient
quantities so as to enable the Trustee to forward such
material (unless the same has been provided directly to
Holders by such third party) to each Holder as soon as
possible thereafter. As soon as practicable after receipt
thereof, the Trustee will mail or otherwise send to each
Holder, at the expense of US Co, copies of all such materials
received by the Trustee from US Co. The Trustee will also make
copies of all such materials available for inspection by any
Holder at the Trustee's principal office in the cities of
Toronto and Calgary.
(f) List of Persons Entitled to Vote. US Co Sub shall, (i) prior
to each annual, general and special US Co Meeting or the
seeking of any US Co Consent and (ii) forthwith upon each
request made at any time by the Trustee in writing, prepare or
cause to be prepared a list (a "List") of the names and
addresses of the Holders arranged in alphabetical order and
showing the number of Exchangeable Shares held of record by
each such Holder, in each case at the close of business on the
date specified by the Trustee in such request or, in the case
of a List prepared in connection with a US Co Meeting or a US
Co Consent, at the close of business on the record date
established by US Co or pursuant to applicable law for
determining the holders of US Co Common Stock entitled to
receive notice of and/or to vote at such US Co Meeting or to
give consent in connection with such US Co Consent. Each such
List shall be delivered to the Trustee promptly after receipt
by US Co Sub of such request or the
<PAGE> 9
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record date for such meeting or seeking of consent, as the
case may be, and in any event within sufficient time as to
enable the Trustee to perform its obligations under this
Agreement. US Co agrees to give US Co Sub written notice (with
a copy to the Trustee) of the calling of any US Co Meeting or
the seeking of any US Co Consent together with the record
dates therefor, sufficiently prior to the date of the calling
of such meeting or seeking of such consent so as to enable US
Co Sub to perform its obligations under this Section 4(f).
(g) Entitlement to Direct Votes. Any Holder named in a List
prepared in connection with any US Co Meeting or any US Co
Consent will be entitled (i) to instruct the Trustee in the
manner described in Section 4(c) hereof with respect to the
exercise of the Holder Votes to which such Holder is entitled
or (ii) to attend such meeting and personally to exercise
thereat (or to exercise with respect to any written consent),
as the proxy of the Trustee, the Holder Votes to which such
Holder is entitled.
(h) Stockholder Proposals. The Trustee shall forthwith submit to
US Co any stockholder proposal (within the meaning of the
United States Securities Exchange Act of 1934) received by the
Trustee from a Holder. Such stockholder proposal may be
considered at any meeting of US Co at which the holders of US
Co Common Stock are entitled to submit stockholder proposals.
US Co agrees to accept all stockholder proposals submitted by
the Trustee that are received by US Co within the applicable
time limitation under the United States Securities Exchange
Act of 1934, provided that not more than one proposal is
submitted on behalf of any one Holder.
(i) Voting by Trustee, and Attendance of Trustee Representative,
at Meeting.
(i) In connection with each US Co Meeting and US Co
Consent, the Trustee shall exercise, either in person
or by proxy, in accordance with the instructions
received from a Holder pursuant to Section 4(c)
hereof, the Holder Votes as to which such Holder is
entitled to direct the vote (or any lesser number
thereof as may be set forth in the instructions);
provided, however, that such written instructions are
received by the Trustee from the Holder prior to the
time and date fixed by it for receipt of such
instructions in the notice given by the Trustee to
the Holder pursuant to Section 4(c) hereof.
(ii) The Trustee shall cause such representatives as are
empowered by it to sign and deliver, on behalf of the
Trustee, proxies for Voting Rights to attend each US
Co Meeting. Upon submission by a Holder (or its
designee) of identification satisfactory to the
Trustee's representatives, and at the Holder's
request, such representatives shall sign and deliver
to such Holder (or its designee) a proxy to exercise
personally the Holder Votes as to which such Holder
is otherwise entitled hereunder to direct the vote,
if such Holder either (A) has not previously given
the Trustee instructions pursuant to Section 4(c)
hereof in respect of such meeting, or (B) submits to
the Trustee's representatives written revocation of
any such previous instructions. At such meeting, the
Holder exercising such Holder Votes shall have the
same rights
<PAGE> 10
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as the Trustee to speak at the meeting in respect of
any matter, question or proposition, to vote by way
of ballot at the meeting in respect of any matter,
question or proposition and to vote at such meeting
by way of a show of hands in respect of any matter,
question or proposition.
(j) Distribution of Written Materials. Any written materials to be
distributed by the Trustee to the Holders pursuant to this
Agreement shall be delivered or sent by mail (or otherwise
communicated in the same manner as US Co utilizes in
communications to holders of US Co Common Stock) to each
Holder at its address as shown on the books of US Co Sub. US
Co Sub shall provide or cause to be provided to the Trustee
for this purpose, on a timely basis and without charge or
other expense:
(A) current lists of the Holders; and
(B) upon the request of the Trustee, mailing
labels to enable the Trustee to carry out
its duties under this Agreement.
The materials referred to above are to be provided by US Co to
the Trustee, but shall be subject to review and comment by the
Trustee.
(k) Termination of Voting Right. Except as otherwise provided
herein or in the Exchangeable Share Provisions, all of the
rights of a Holder with respect to the Holder Votes
exercisable in respect of the Exchangeable Shares held by such
Holder, including the right to instruct the Trustee as to the
voting of or to vote personally such Holder Votes and
including the right to submit a stockholder proposal to the
Trustee in accordance with Section 4(h) hereof, shall be
deemed to be surrendered by the Holder to US Co and such
Holder Votes and the Voting Rights represented thereby shall
cease immediately upon the delivery by such Holder to the
Trustee of the certificates representing such Exchangeable
Shares in connection with the exercise by the Holder of the
Exchange Right or the occurrence of the automatic exchange of
Exchangeable Shares for shares of US Co Common Stock, as
specified in Article 5 hereof (unless in either case US Co
shall not have delivered the Exchangeable Share Consideration
deliverable in exchange therefor to the Trustee for delivery
to the Holders), or upon the redemption of Exchangeable Shares
pursuant to Article 6 or Article 7 of the Exchangeable Share
Provisions, or upon the effective date of the liquidation,
dissolution or winding-up of US Co Sub pursuant to Article 5
of the Exchangeable Share Provisions, or upon the purchase of
Exchangeable Shares from the holder thereof by US Co pursuant
to the exercise by US Co of the Retraction Call Right, the
Redemption Call Right or the Liquidation Call Right.
5. EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
(a) Grant and Ownership of the Exchange Right. US Co hereby grants
to the Trustee as trustee for and on behalf of, and for the
use and benefit of, the Holders (i) the right (the "Exchange
Right"), upon the occurrence and during the continuance of an
Insolvency Event, to require US Co to purchase from each or
any Holder all or any
<PAGE> 11
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part of the Exchangeable Shares held by such Holders, and (ii)
the Automatic Exchange Rights, all in accordance with the
provisions of this Agreement.
US Co hereby acknowledges receipt from the Trustee as trustee
for and on behalf of the Holders of good and valuable
consideration (and the adequacy thereof) for the grant of the
Exchange Right and the Automatic Exchange Rights by US Co to
the Trustee. During the term of the Trust and subject to the
terms and conditions of this Agreement, the Trustee shall
possess and be vested with full legal ownership of the
Exchange Right and the Automatic Exchange Rights and shall be
entitled to exercise all of the rights and powers of an owner
with respect to the Exchange Right and the Automatic Exchange
Rights, provided that the Trustee shall:
(i) hold the Exchange Right and the Automatic Exchange
Rights and the legal title thereto as trustee solely
for the use and benefit of the Holders in accordance
with the provisions of this Agreement; and
(ii) except as specifically authorized by this Agreement,
have no power or authority to exercise or otherwise
deal in or with the Exchange Right or the Automatic
Exchange Rights, and the Trustee shall not exercise
any such rights for any purpose other than the
purposes for which this Trust is created pursuant to
this Agreement.
(b) Legended Share Certificates. US Co Sub will cause each
certificate representing Exchangeable Shares to bear an
appropriate legend notifying the Holders of:
(i) their right to instruct the Trustee with respect to
the exercise of the Exchange Right in respect of the
Exchangeable Shares held by a Holder; and
(ii) the Automatic Exchange Rights.
(c) General Exercise of Exchange Right. The Exchange Right shall
be and remain vested in and exercised by the Trustee. Subject
to Section 7(o) hereof, the Trustee shall exercise the
Exchange Right only on the basis of instructions received
pursuant to this Article 5 from Holders entitled to instruct
the Trustee as to the exercise thereof To the extent that no
instructions are received from a Holder with respect to the
Exchange Right, the Trustee shall not exercise or permit the
exercise of the Exchange Right.
(d) Purchase Price. The purchase price payable by US Co for each
Exchangeable Share to be purchased by US Co under the Exchange
Right shall be an amount equal to the Exchangeable Share Price
on the last Business Day prior to the day of closing of the
purchase and sale of such Exchangeable Share under the
Exchange Right. In connection with each exercise of the
Exchange Right, US Co will provide to the Trustee an Officer's
Certificate setting forth the calculation of the Exchangeable
Share Price for each Exchangeable Share. The Exchangeable
Share Price for each such Exchangeable Share so purchased may
be satisfied only by US Co issuing and delivering or causing
to be delivered to the Trustee, on behalf of the relevant
Holder,
<PAGE> 12
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the Exchangeable Share Consideration representing the total
Exchangeable Share Price.
(e) Exercise Instructions. Subject to the terms and conditions
herein set forth, a Holder shall be entitled, upon the
occurrence and during the continuance of an Insolvency Event,
to instruct the Trustee to exercise the Exchange Right with
respect to all or any part of the Exchangeable Shares
registered in the name of such Holder on the books of US Co
Sub. To cause the exercise of the Exchange Right by the
Trustee, the Holder shall deliver to the Trustee, in person or
by certified or registered mail, at its principal offices in
Calgary, Alberta or Toronto, Ontario or at such other places
in Canada as the Trustee may from time to time designate by
written notice to the Holders, the certificates representing
the Exchangeable Shares which such Holder desires US Co to
purchase, duly endorsed in blank, and accompanied by such
other documents and instruments as may be required to effect a
transfer of Exchangeable Shares under applicable law and the
by-laws of US Co Sub and such additional documents and
instruments as the Trustee may reasonably require together
with (i) a duly completed form of notice of exercise of the
Exchange Right, contained on the reverse of or attached to the
Exchangeable Share certificates, stating (A) that the Holder
thereby instructs the Trustee to exercise the Exchange Right
so as to require US Co to purchase from the Holder the number
of Exchangeable Shares specified therein, (B) that such Holder
has good title to and owns all such Exchangeable Shares to be
acquired by US Co free and clear of all liens, claims and
encumbrances, (C) the names in which the certificates
representing US Co Common Stock issuable in connection with
the exercise of the Exchange Right are to be issued and (D)
the names and addresses of the persons to whom the
Exchangeable Share Consideration should be delivered and (ii)
payment (or evidence satisfactory to the Trustee, US Co Sub
and US Co of payment) of the taxes (if any) payable as
contemplated by Section 5(h) of this Agreement. If only a part
of the Exchangeable Shares represented by any certificate or
certificates delivered to the Trustee are to be purchased by
US Co under the Exchange Right, a new certificate for the
balance of such Exchangeable Shares shall be issued to the
Holder at the expense of US Co Sub.
(f) Delivery of Exchangeable Share Consideration; Effect of
Exercise. Promptly after receipt of the certificates
representing the Exchangeable Shares which the Holder desires
US Co to purchase under the Exchange Right (together with such
documents and instruments of transfer and a duly completed
form of notice of exercise of the Exchange Right), duly
endorsed for transfer to US Co the Trustee shall notify US Co
and US Co Sub of its receipt of the same, which notice to US
Co and US Co Sub shall constitute exercise of the Exchange
Right by the Trustee on behalf of the Holder of such
Exchangeable Shares, and US Co shall immediately thereafter
deliver or cause to be delivered to the Trustee, for delivery
to the Holder of such Exchangeable Shares (or to such other
persons, if any, properly designated by such Holder), the
Exchangeable Share Consideration deliverable in connection
with the exercise of the Exchange Right; provided, however,
that no such delivery shall be made unless and until the
Holder requesting the same shall have paid (or provided
evidence satisfactory to the Trustee, US Co Sub and US Co of
the payment of) the taxes (if any) payable as contemplated by
Section 5(h) of this Agreement. Immediately upon
<PAGE> 13
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the giving of notice by the Trustee to US Co and US Co Sub of
the exercise of the Exchange Right, as provided in this
Section 5(f), the closing of the transaction of purchase and
sale contemplated by the Exchange Right shall be deemed to
have occurred, and the Holder of such Exchangeable Shares
shall be deemed to have transferred to US Co all of its right,
title and interest in and to such Exchangeable Shares and in
the related interest in the Trust Estate and shall cease to be
a holder of such Exchangeable Shares and shall not be entitled
to exercise any of the rights of a holder in respect thereof,
other than the right to receive his proportionate part of the
total purchase price therefor, unless such Exchangeable Share
Consideration is not delivered by US Co to the Trustee, for
delivery to such Holder (or to such other persons, if any,
properly designated by such Holder), within three Business
Days of the date of the giving of such notice by the Trustee,
in which case the rights of the Holder shall remain unaffected
until such Exchangeable Share Consideration is delivered by US
Co and any cheque included therein is paid. Concurrently with
such Holder ceasing to be a holder of Exchangeable Shares, the
Holder shall be considered and deemed for all purposes to be
the holder of the shares of US Co Common Stock delivered to it
pursuant to the Exchange Right.
(g) Exercise of Exchange Right Subsequent to Retraction. In the
event that a Holder has exercised its right under Article 6 of
the Exchangeable Share Provisions to require US Co Sub to
redeem any or all of the Exchangeable Shares held by the
Holder (the "Retracted Shares") and is notified by US Co Sub
pursuant to Section 6.6 of the Exchangeable Share Provisions
that US Co Sub will not be permitted as a result of liquidity
or solvency requirements of applicable law to redeem all such
Retracted Shares, subject to receipt by the Trustee of written
notice to that effect from US Co Sub and provided that US Co
shall not have exercised the Retraction Call Right with
respect to the Retracted Shares and that the Holder has not
revoked the retraction request delivered by the Holder to US
Co Sub pursuant to Section 6.1 of the Exchangeable Share
Provisions, the retraction request will constitute and will be
deemed to constitute notice from the Holder to the Trustee
instructing the Trustee to exercise the Exchange Right with
respect to those Retracted Shares which US Co Sub is unable to
redeem. In any such event, US Co Sub hereby agrees with the
Trustee and in favour of the Holder immediately to notify the
Trustee of such prohibition against US Co Sub redeeming all of
the Retracted Shares and immediately to forward or cause to be
forwarded to the Trustee all relevant materials delivered by
the Holder to US Co Sub or to the transfer agent of the
Exchangeable Shares (including without limitation a copy of
the retraction request delivered pursuant to Section 6.1 of
the Exchangeable Share Provisions) in connection with such
proposed redemption of the Retracted Shares and the Trustee
will thereupon exercise the Exchange Right with respect to the
Retracted Shares that US Co Sub is not permitted to redeem and
will require US Co to purchase such shares in accordance with
the provisions of this Article 5.
(h) Stamp or Other Transfer Taxes. Upon any sale of Exchangeable
Shares to US Co pursuant to the Exchange Right or the
Automatic Exchange Rights, the share certificate or
certificates representing US Co Common Stock to be delivered
in connection with the payment of the total purchase price
therefor shall be issued in the
<PAGE> 14
- 14 -
name of the Holder of the Exchangeable Shares so sold or in
such names as such Holder may otherwise direct in writing
without charge to the holder of the Exchangeable Shares so
sold, provided, however, that such Holder (i) shall pay (and
neither US Co, US Co Sub nor the Trustee shall be required to
pay) any documentary, stamp, transfer or other similar taxes
that may be payable in respect of any transfer involved in the
issuance or delivery of such shares to a person other than
such Holder or (ii) shall have established to the satisfaction
of the Trustee, US Co and US Co Sub that such taxes, if any,
have been paid.
(i) Notice of Insolvency Event. Immediately upon the occurrence of
an Insolvency Event or any event which with the giving of
notice or the passage of time or both would be an Insolvency
Event US Co Sub and US Co shall give written notice thereof to
the Trustee. As soon as practicable after receiving notice
from US Co Sub and US Co or from any other Person of the
occurrence of an Insolvency Event, the Trustee will mail to
each Holder, at the expense of US Co, a notice of such
Insolvency Event in the form provided by US Co, which notice
shall contain a brief statement of the right of the Holders
with respect to the Exchange Right.
(j) Qualification of US Co Common Stock. US Co covenants that if
any shares of US Co Common Stock to be issued and delivered
pursuant to the Exchange Right or the Automatic Exchange
Rights require registration or qualification with or approval
of or the filing of document including any prospectus or
similar document or the taking of any proceeding with or the
obtaining of any order, ruling or consent from any
governmental or regulatory authority under any Canadian or
United States federal, provincial or state law or regulation
or pursuant to the rules and regulations of any regulatory
authority or the fulfillment of any other legal requirement
(collectively, the "Applicable Laws") before such shares may
be issued and delivered by US Co to the initial holder thereof
(other than US Co Sub) or in order that such shares may be
freely traded thereafter (other than any restrictions on
transfer by reason of a holder being a "control person" of US
Co for purposes of Canadian federal or provincial securities
law or an "affiliate" of US Co or, prior to the date hereof,
of Chauvco for purposes of United States federal or state
securities law), US Co will in good faith expeditiously take
all such actions and do all such things as are necessary to
cause such shares of US Co Common Stock to be and remain duly
registered, qualified or approved. US Co represents and
warrants that it has in good faith taken all actions and done
all things as are necessary under Applicable Laws as they
exist on the date hereof to cause the shares of US Co Common
Stock to be issued and delivered pursuant to the Exchange
Right and the Automatic Exchange Rights and to be freely
tradeable thereafter (other than restrictions on transfer by
reason of a holder being a "control person" of US Co for the
purposes of Canadian federal and provincial securities law or
an "affiliate" of US Co or, prior to the date hereof, of
Chauvco for the purposes of United States federal or state
securities law). US Co will in good faith expeditiously take
all such actions and do all such things as are necessary to
cause all shares of US Co Common Stock to be delivered
pursuant to the Exchange Right or the Automatic Exchange
Rights to be listed, quoted or posted for trading on all stock
exchanges and quotation systems on which such shares are
listed, quoted or posted for trading at such time.
<PAGE> 15
- 15 -
(k) Reservation of Shares of US Co Common Stock. US Co hereby
represents, warrants and covenants that it has irrevocably
reserved for issuance and will at all times keep available,
free from pre-emptive and other rights, out of its authorized
and unissued capital stock such number of shares of US Co
Common Stock (i) as is equal to the sum of (A) the number of
Exchangeable Shares issued and outstanding from time to time
and (B) the number of Exchangeable Shares issuable upon the
exercise of all rights to acquire Exchangeable Shares
outstanding from time to time and (ii) as are now and may
hereafter be required to enable and permit US Co Sub and US Co
to meet their respective obligations hereunder, under the
Support Agreement, under the Exchangeable Share Provisions and
under any other security or commitment pursuant to the
Arrangement with respect to which US Co may now or hereafter
be required to issue shares of US Co Common Stock.
(l) Automatic Exchange on Liquidation of US Co.
(i) US Co will give the Trustee written notice of each of
the following events at the time set forth below:
(A) in the event of any determination by the
board of directors of US Co to institute
voluntary liquidation, dissolution or
winding-up proceedings with respect to US Co
or to effect any other distribution of
assets of US Co among its stockholders for
the purpose of winding-up its affairs, at
least 60 days prior to the proposed
effective date of such liquidation,
dissolution, winding-up or other
distribution; and
(B) immediately, upon the earlier of (I) receipt
by US Co of notice of and (II) US Co
otherwise becoming aware of any threatened
or instituted claim, suit, petition or other
proceedings with respect to the involuntary
liquidation, dissolution or winding-up of US
Co or to effect any other distribution of
assets of US Co among its stockholders for
the purpose of winding-up its affairs.
(ii) Immediately following receipt by the Trustee from US
Co of notice of any event (a "Liquidation Event")
contemplated by Section 5(l)(i) above, the Trustee
will give notice thereof to the Holders. Such notice
will be provided by US Co to the Trustee and shall
include a brief description of the automatic exchange
of Exchangeable Shares for shares of US Co Common
Stock provided for in Section 5(l)(iii) below.
(iii) In order that the Holders will be able to participate
on a PRO RATA basis with the holders of US Co Common
Stock in the distribution of assets of US Co in
connection with a Liquidation Event, immediately
prior to the effective time (the "Liquidation Event
Effective Time") of a Liquidation Event all of the
then outstanding Exchangeable Shares shall be
automatically exchanged for shares of US Co Common
Stock. To effect such automatic exchange, US
<PAGE> 16
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Co shall be deemed to have purchased each
Exchangeable Share outstanding immediately prior to
the Liquidation Event Effective Time and held by
Holders, and each Holder shall be deemed to have sold
the Exchangeable Shares held by it at such time, for
a purchase price per share equal to the Exchangeable
Share Price applicable at such time. In connection
with such automatic exchange, US Co will provide to
the Trustee an Officers' Certificate setting forth
the calculation of the purchase price for each
Exchangeable Share.
(iv) The closing of the transaction of purchase and sale
contemplated by Section 5(l)(iii) above shall be
deemed to have occurred immediately prior to the
Liquidation Event Effective Time, and each Holder of
Exchangeable Shares shall be deemed to have
transferred to US Co all of the Holder's right, title
and interest in and to such Exchangeable Shares and
the related interest in the Trust Estate and shall
cease to be a holder of such Exchangeable Shares and
US Co shall deliver to the Holder the Exchangeable
Share Consideration deliverable upon the automatic
exchange of Exchangeable Shares. Concurrently with
such Holder ceasing to be a holder of Exchangeable
Shares, the Holder shall be considered and deemed for
all purposes to be the holder of the shares of US Co
Common Stock issued to it pursuant to the automatic
exchange of Exchangeable Shares for US Co Common
Stock and the certificates held by the Holder
previously representing the Exchangeable Shares
exchanged by the Holder with US Co pursuant to such
automatic exchange shall thereafter be deemed to
represent the shares of US Co Common Stock issued to
the Holder by US Co pursuant to such automatic
exchange. Upon the request of a Holder and the
surrender by the Holder of Exchangeable Share
certificates deemed to represent shares of US Co
Common Stock, duly endorsed in blank and accompanied
by such instruments of transfer as US Co may
reasonably require, US Co shall deliver or cause to
be delivered to the Holder certificates representing
the shares of US Co Common Stock of which the Holder
is the holder.
6. RESTRICTIONS ON ISSUANCE OF US CO SPECIAL VOTING STOCK
During the term of this Agreement, US Co will not issue any shares of
US Co Special Voting Stock in addition to the Voting Share.
7. CONCERNING THE TRUSTEE
(a) Powers and Duties of the Trustee. The rights, powers and
authorities of the Trustee under this Agreement, in its
capacity as trustee of the Trust, shall include:
(i) receipt and deposit of the Voting Share from US Co as
trustee for and on behalf of the Holders in
accordance with the provisions of this Agreement;
(ii) granting proxies and distributing materials to
Holders as provided in this Agreement;
<PAGE> 17
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(iii) voting the Holder Votes in accordance with the
provisions of this Agreement;
(iv) receiving the grant of the Exchange Right and the
Automatic Exchange Rights from US Co as trustee for
and on behalf of the Holders in accordance with the
provisions of this Agreement;
(v) exercising the Exchange Right and enforcing the
benefit of the Automatic Exchange Rights, in each
case in accordance with the provisions of this
Agreement, and in connection therewith receiving from
Holders Exchangeable Shares and other requisite
documents and distributing to such Holders the shares
of US Co Common Stock and cheques, if any, to which
such Holders are entitled upon the exercise of the
Exchange Right or pursuant to the Automatic Exchange
Rights, as the case may be;
(vi) holding title to the Trust Estate;
(vii) investing any monies forming, from time to time, a
part of the Trust Estate as provided in this
Agreement;
(viii) taking action at the direction of a Holder or Holders
to enforce the obligations of US Co under this
Agreement; and
(ix) taking such other actions and doing such other things
as are specifically provided in this Agreement.
In the exercise of such rights, powers and authorities the
Trustee shall have (and is granted) such incidental and
additional rights, powers and authority not in conflict with
any of the provisions of this Agreement as the Trustee, acting
in good faith and in the reasonable exercise of its
discretion, may deem necessary, appropriate or desirable to
effect the purpose of the Trust. Any exercise of such
discretionary rights, powers and authorities by the Trustee
shall be final, conclusive and binding upon all persons. For
greater certainty, the Trustee shall have only those duties as
are set out specifically in this Agreement.
The Trustee in exercising its rights, powers, duties and
authorities hereunder shall act honestly and in good faith
with a view to the best interests of the Holders and shall
exercise the care, diligence and skill that a reasonably
prudent trustee would exercise in comparable circumstances.
The Trustee shall not be bound to give any notice or do or
take any act, action or proceeding by virtue of the powers
conferred on it hereby unless and until it shall be
specifically required to do so under the terms hereof; nor
shall the Trustee be required to take any notice of, or to do
or to take any act, action or proceeding as a result of any
default or breach of any provision hereunder, unless and until
notified in writing of such default or breach, which notices
shall distinctly specify the default or breach desired to be
brought to the attention of the Trustee and in the absence of
such notice
<PAGE> 18
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the Trustee may for all purposes of this Agreement
conclusively assume that no default or breach has been made in
the observance or performance of any of the representations,
warranties, covenants, agreements or conditions contained
herein.
(b) No Conflict of Interest. The Trustee represents to US Co Sub
and US Co that at the date of execution and delivery of this
Agreement there exists no material conflict of interest in the
role of the Trustee as a fiduciary hereunder and the role of
the Trustee in any other capacity. The Trustee shall, within
90 days after it becomes aware that such a material conflict
of interest exists, either eliminate such material conflict of
interest or resign in the manner and with the effect specified
in Article 10 hereof. If, notwithstanding the foregoing
provisions of this Section 7(b), the Trustee has such a
material conflict of interest, the validity and enforceability
of this Agreement shall not be affected in any manner
whatsoever by reason only of the existence of such material
conflict of interest. If the Trustee contravenes the foregoing
provisions of this Section 7(b), any interested party may
apply to the Alberta Court of Queen's Bench for an order that
the Trustee be replaced as trustee hereunder.
(c) Dealings with Transfer Agents, Registrars, etc. US Co Sub and
US Co irrevocably authorize the Trustee, from time to time,
to:
(i) consult, communicate and otherwise deal with the
respective registrars and transfer agents, and with
any such subsequent registrar or transfer agent, of
the Exchangeable Shares and US Co Common Stock; and
(ii) requisition, from time to time, (A) from any such
registrar or transfer agent any information readily
available from the records maintained by it which the
Trustee may reasonably require for the discharge of
its duties and responsibilities under this Agreement
and (B) from the transfer agent of US Co Common
Stock, and any subsequent transfer agent of such
shares, the share certificates issuable upon the
exercise from time to time of the Exchange Right and
pursuant to the Automatic Exchange Rights in the
manner specified in Article 5 hereof.
US Co Sub and US Co irrevocably authorize their respective
registrars and transfer agents to comply with all such
requests. US Co covenants that it will supply its transfer
agent with duly executed share certificates for the purpose of
completing the exercise from time to time of the Exchange
Right and the Automatic Exchange Rights, in each case pursuant
to Article 5 hereof.
(d) Books and Records. The Trustee shall keep available for
inspection by US Co and US Co Sub, at the Trustee's principal
office in Calgary, Alberta, correct and complete books and
records of account relating to the Trustee's actions under
this Agreement, including without limitation all information
relating to mailings and instructions to and from Holders and
all transactions pursuant to the Voting Rights, the Exchange
Right and the Automatic Exchange Rights for the term of this
Agreement. On or before March 31, 1998, and on or before March
31 in every year thereafter, so long as the Voting Share is on
deposit with the Trustee, the Trustee shall transmit to US
<PAGE> 19
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Co and US Co Sub a brief report, dated as of the preceding
December 31, with respect to:
(i) the property and funds comprising the Trust Estate as
of that date;
(ii) the number of exercises of the Exchange Right, if
any, and the aggregate number of Exchangeable Shares
received by the Trustee on behalf of Holders in
consideration of the issue and delivery by US Co of
shares of US Co Common Stock in connection with the
Exchange Right, during the calendar year ended on
such date; and
(iii) all other actions taken by the Trustee in the
performance of its duties under this Agreement which
it had not previously reported.
(e) Income Tax Returns and Reports. The Trustee shall, to the
extent necessary, prepare and file on behalf of the Trust
appropriate United States and Canadian income tax returns and
any other returns or reports as may be required by applicable
law or pursuant to the rules and regulations of any securities
exchange or other trading system through which the
Exchangeable Shares are traded and, in connection therewith,
may obtain the advice and assistance of such experts as the
Trustee may consider necessary or advisable. If requested by
the Trustee, US Co shall retain such experts for purposes of
providing such advice and assistance.
(f) Indemnification Prior to Certain Actions by Trustee. The
Trustee shall exercise any or all of the rights, duties,
powers or authorities vested in it by this Agreement at the
request, order or direction of any Holder upon such Holder
furnishing to the Trustee reasonable funding, security and
indemnity against the costs, expenses and liabilities which
may be incurred by the Trustee therein or thereby, provided
that no Holder shall be obligated to furnish to the Trustee
any such funding, security or indemnity in connection with the
exercise by the Trustee of any of its rights, duties, powers
and authorities with respect to the Voting Share pursuant to
Article 4 hereof, subject to Section 7(o) hereof, and with
respect to the Exchange Right pursuant to Article 5 hereof,
subject to Section 7(o) hereof, and with respect to the
Automatic Exchange Rights pursuant to Article 5 hereof.
None of the provisions contained in this Agreement shall
require the Trustee to expend or risk its own funds or
otherwise incur financial liability in the exercise of any of
its rights, powers, duties or authorities unless funded, given
funds, security and indemnified as aforesaid.
(g) Actions by Holders. No Holder shall have the right to
institute any action, suit or proceeding or to exercise any
other remedy authorized by this Agreement for the purpose of
enforcing any of its rights or for the execution of any trust
or power hereunder unless the Holder has requested the Trustee
to take or institute such action, suit or proceeding and
furnished the Trustee with the funding, security and indemnity
referred to in Section 7(f) hereof and the Trustee shall have
failed to act within a reasonable time thereafter. In such
case, but not otherwise, the Holder shall be
<PAGE> 20
- 20 -
entitled to take proceedings in any court of competent
jurisdiction such as the Trustee might have taken; it being
understood and intended that no one or more Holders shall have
any right in any manner whatsoever to affect, disturb or
prejudice the rights hereby created by any such action, or to
enforce any right hereunder or under the Voting Rights, the
Exchange Right or the Automatic Exchange Rights, except
subject to the conditions and in the manner herein provided,
and that all powers and trusts hereunder shall be exercised
and all proceedings at law shall be instituted, had and
maintained by the Trustee, except only as herein provided, and
in any event for the equal benefit of all Holders.
(h) Reliance upon Declarations. The Trustee shall not be
considered to be in contravention of any of its rights,
powers, duties and authorities hereunder if, when required, it
acts and relies in good faith upon lists, mailing labels,
notices, statutory declarations, certificates, opinions,
reports or other papers or documents furnished pursuant to the
provisions hereof or required by the Trustee to be furnished
to it in the exercise of its rights, powers, duties and
authorities hereunder and such lists, mailing labels, notices,
statutory declarations, certificates, opinions, reports or
other papers or documents comply with the provisions of
Section 7(i) hereof, if applicable, and with any other
applicable provisions of this Agreement.
(i) Evidence and Authority to Trustee. US Co Sub and/or US Co
shall furnish to the Trustee evidence of compliance with the
conditions provided for in this Agreement relating to any
action or step required or permitted to be taken by US Co Sub
and/or US Co or the Trustee under this Agreement or as a
result of any obligation imposed under this Agreement,
including, without limitation, in respect of the Voting Rights
or the Exchange Right or the Automatic Exchange Rights and the
taking of any other action to be taken by the Trustee at the
request of or on the application of US Co Sub and/or US Co
forthwith if and when:
(i) such evidence is required by any other section of
this Agreement to be furnished to the Trustee in
accordance with the terms of this Section 7(i); or
(ii) the Trustee, in the exercise of its rights, powers,
duties and authorities under this Agreement, gives US
Co Sub and/or US Co written notice requiring it to
furnish such evidence in relation to any particular
action or obligation specified in such notice.
Such evidence shall consist of an Officers' Certificate of US
Co Sub and/or US Co or a statutory declaration or a
certificate made by persons entitled to sign an Officer's
Certificate stating that any such condition has been complied
with in accordance with the terms of this Agreement.
Whenever such evidence relates to a matter other than the
Voting Rights or the Exchange Right or the Automatic Exchange
Rights, and except as otherwise specifically provided herein,
such evidence may consist of a report or opinion of any
solicitor, auditor, accountant, appraiser, valuer, engineer or
other expert or any other person whose qualifications give
authority to a statement made by him provided that
<PAGE> 21
- 21 -
if such report or opinion is furnished by a director, officer
or employee of US Co Sub and/or US Co it shall be in the form
of an Officers' Certificate or a statutory declaration.
Each statutory declaration, certificate, opinion or report
furnished to the Trustee as evidence of compliance with a
condition provided for in this Agreement shall include a
statement by the person giving the evidence:
(iii) declaring that he has read and understands the
provisions of this Agreement relating to the
condition in question;
(iv) describing the nature and scope of the examination or
investigation upon which he based the statutory
declaration, certificate, statement or opinion; and
(v) declaring that he has made such examination or
investigation as he believes is necessary to enable
him to make the statements or give the opinions
contained or expressed therein.
(j) Experts, Advisors and Agents. The Trustee may:
(i) in relation to these presents act and rely on the
opinion or advice of or information obtained from or
prepared by any solicitor, auditor, accountant,
appraiser, valuer, engineer or other expert, whether
retained by the Trustee or by US Co Sub and/or US Co
or otherwise, and may employ such assistants as may
be necessary to the proper determination and
discharge of its powers and duties and determination
of its rights hereunder and may pay proper and
reasonable compensation for all such legal and other
advice or assistance as aforesaid; and
(ii) employ such agents and other assistants as it may
reasonably require for the proper determination and
discharge of its powers and duties hereunder, and may
pay reasonable remuneration for all services
performed for it (and shall be entitled to receive
reasonable remuneration for all services performed by
it) in the discharge of the trusts hereof and
compensation for all disbursements, costs and
expenses made or incurred by it in the determination
and discharge of its duties hereunder and in the
management of the Trust.
(k) Investment of Monies Held by Trustee. Unless otherwise
provided in this Agreement, any monies held by or on behalf of
the Truste which under the terms of this Agreement may or
ought to be invested or which may be on deposit with the
Trustee or which may be in the hands of the Trustee may be
invested and reinvested in the name or under the control of
the Trustee in securities in which, under the laws of the
Province of Alberta trustees are authorized to invest trust
unit monies, provided that such securities are stated to
mature within two years after their purchase by the Trustee,
and the Trustee shall so invest such monies on the written
direction of US Co Sub. Pending the investment of any monies
as hereinbefore provided, such
<PAGE> 22
- 22 -
monies may be deposited in the name of the Trustee in any
chartered bank in Canada or, with the consent of US Co Sub, in
the deposit department of the Trustee or any other loan or
company authorized to accept deposits under the laws of Canada
or any province thereof at the rate of interest then current
on similar deposits.
(l) Trustee Not Required to Give Security. The Trustee shall not
be required to give any bond or security in respect of the
execution of the trusts, rights, duties, powers and
authorities of this Agreement or otherwise in respect of the
premises.
(m) Trustee Not Bound to Act on Request. Except as in this
Agreement otherwise specifically provided, the Trustee shall
not be bound to act in accordance with any direction or
request of US Co Sub and/or US Co or of the directors thereof
until a duly authenticated copy of the instrument or
resolution containing such direction or request shall have
been delivered to the Trustee, and the Trustee shall be
empowered to act and rely upon any such copy purporting to be
authenticated and believed by the Trustee to be genuine.
(n) Authority to Carry on Business. The Trustee represents to US
Co Sub and US Co that at the date of execution and delivery by
it of this Agreement it is authorized to carry on the business
of a trust company in the Province of Alberta but if,
notwithstanding the provisions of this Section 7(n), it ceases
to be so authorized to carry on business, the validity and
enforceability of this Agreement and the Voting Rights, the
Exchange Right and the Automatic Exchange Rights shall not be
affected in any manner whatsoever by reason only of such event
but the Trustee shall, within 90 days after ceasing to be
authorized to carry on the business of a trust company in the
Province of Alberta, either become so authorized or resign in
the manner and with the effect specified in Article 10 hereof.
(o) Conflicting Claims. If conflicting claims or demands are made
or asserted with respect to any interest of any Holder in any
Exchangeable Shares, including any disagreement between the
heirs, representatives, successors or assigns succeeding to
all or any part of the interest of any Holder in any
Exchangeable Shares resulting in conflicting claims or demands
being made in connection with such interest, then the Trustee
shall be entitled, at its sole discretion, to refuse to
recognize or to comply with any such claim or demand. In so
refusing, the Trustee may elect not to exercise any Voting
Rights, Exchange Right or Automatic Exchange Rights subject to
such conflicting claims or demands and, in so doing, the
Trustee shall not be or become liable to any person on account
of such election or its failure or refusal to comply with any
such conflicting claims or demands. The Trustee shall be
entitled to continue to refrain from acting and to refuse to
act until:
(i) the rights of all adverse claimants with respect to
the Voting Rights, Exchange Right or Automatic
Exchange Rights subject to such conflicting claims or
demands have been adjudicated by a final judgment of
a court of competent jurisdiction; or
<PAGE> 23
- 23 -
(ii) all differences with respect to the Voting Rights,
Exchange Right or Automatic Exchange Right subject to
such conflicting claims or demands have been
conclusively settled by a valid written agreement
binding on all such adverse claimants, and the
Trustee shall have been furnished with an executed
copy of such agreement.
If the Trustee elects to recognize any claim or comply with
any demand made by any such adverse claimant, it may in its
discretion require such claimant to furnish such surety bond
or other security satisfactory to the Trustee as it shall deem
appropriate fully to indemnify it as between all conflicting
claims or demands.
(p) Acceptance of Trust. The Trustee hereby accepts the Trust
created and provided for by and in this Agreement and agrees
to perform the same upon the terms and conditions herein set
forth and to hold all rights, privileges and benefits
conferred hereby and by law in trust for the various persons
who shall from time to time be Holders, subject to all the
terms and conditions herein set forth.
8. COMPENSATION
US Co and US Co Sub jointly and severally agree to pay to the Trustee
reasonable compensation for all of the services rendered by it under this
Agreement and will reimburse the Trustee for all reasonable expenses (including
but not limited to taxes, compensation paid to experts, agents and advisors and
travel expenses) and disbursements, including the cost and expense of any suit
or litigation of any character and any proceedings before any governmental
agency reasonably incurred by the Trustee in connection with its rights and
duties under this Agreement; provided that US Co and US Co Sub shall have no
obligation to reimburse the Trustee for any expenses or disbursements paid,
incurred or suffered by the Trustee in any suit or litigation in which the
Trustee is determined to have acted in bad faith or with negligence or willful
misconduct.
9. INDEMNIFICATION AND LIMITATION OF LIABILITY
(a) Indemnification of the Trustee. US Co and US Co Sub jointly
and severally agree to indemnify and hold harmless the Trustee
and each of its directors, officers, employees and agents
appointed and acting in accordance with this Agreement
(collectively, the "Indemnified Parties") against all claims,
losses, damages, costs, penalties, fines and reasonable
expenses (including reasonable expenses of the Trustee's legal
counsel on a solicitor and his own client basis) which,
without fraud, negligence, willful misconduct or bad faith on
the part of such Indemnified Party, may be paid, incurred or
suffered by the Indemnified Party by reason of or as a result
of the Trustee's acceptance or administration of the Trust,
its compliance with its duties set forth in this Agreement, or
any written or oral instructions delivered to the Trustee by
US Co or US Co Sub pursuant hereto. In no case shall US Co or
US Co Sub be liable under this indemnity for any claim against
any of the Indemnified Parties unless US Co and US Co Sub
shall be notified by the Trustee of the written assertion of a
claim or of any action commenced against the Indemnified
Parties, promptly after any of the Indemnified Parties shall
have received any such written assertion of a claim or shall
have been served with a summons or other first legal
<PAGE> 24
- 24 -
process giving information as to the nature and basis of the
claim. Subject to (ii), below, US Co and US Co Sub shall be
entitled to participate at their own expense in the defense
and, if US Co or US Co Sub so elect at any time after receipt
of such notice, either of them may assume the defense of any
suit brought to enforce any such claim. The Trustee shall have
the right to employ separate counsel in any such suit and
participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of the Trustee unless:
(i) the employment of such counsel has been authorized by US
Co or US Co Sub, such authorization not to be unreasonably
withheld; or (ii) the named parties to any such suit include
both the Trustee and US Co or US Co Sub and the Trustee shall
have been advised by counsel acceptable to US Co or US Co Sub
that there may be one or more legal defenses available to the
Trustee that are different from or in addition to those
available to US Co or US Co Sub and that an actual or
potential conflict exists (in which case US Co and US Co Sub
shall not have the right to assume the defense of such suit on
behalf of the Trustee but shall be liable to pay the
reasonable fees and expenses of counsel for the Trustee).
(b) Limitation of Liability. The Trustee shall not be held liable
for any loss which may occur by reason of depreciation of the
value of any part of the Trust Estate or any loss incurred on
any investment of funds pursuant to this Agreement except to
the extent that such loss is attributable to the fraud,
negligence, willful misconduct or bad faith on the part of the
Trustee.
10. CHANGE OF TRUSTEE
(a) Resignation. The Trustee, or any trustee hereafter appointed,
may at any time resign by giving written notice of such
resignation to US Co and US Co Sub specifying the date on
which it desires to resign, provided that such notice shall
never be given less than 60 days before such desired
resignation date unless US Co and US Co Sub otherwise agree
and provided further that such resignation shall not take
effect until the date of the appointment of a successor
trustee and the acceptance of such appointment by the
successor trustee. Upon receiving such notice of resignation,
US Co and US Co Sub shall promptly appoint a successor trustee
by written instrument in duplicate, one copy of which shall be
delivered to the resigning trustee and one copy to the
successor trustee. Failing acceptance by a successor trustee,
a successor trustee may be appointed by an order of the
Alberta Court of Queen's Bench upon application of one or more
of the parties hereto.
(b) Removal. The Trustee, or any Trustee hereafter appointed, may
be removed with or without cause, at any time on 60 days'
prior notice by written instrument executed by US Co and US Co
Sub, in duplicate, one copy of which shall be delivered to the
trustee so removed and one copy to the successor trustee,
provided that, in connection with such removal, provision is
made for a replacement trustee similar to that contemplated in
Section 10(a).
<PAGE> 25
- 25 -
(c) Successor Trustee. Any successor trustee appointed as provided
under this Agreement shall execute, acknowledge and deliver to
US Co and US Co Sub and to its predecessor trustee an
instrument accepting such appointment. Thereupon the
resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act,
deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor under this
Agreement, with like effect as if originally named as trustee
in this Agreement. However, on the written request of US Co
and US Co Sub or of the successor trustee, the trustee ceasing
to act shall, upon payment of any amounts then due it pursuant
to the provisions of this Agreement, execute and deliver an
instrument transferring to such successor Trustee all the
rights and powers of the trustee so ceasing to act. Upon the
request of any such successor trustee, US Co, US Co Sub and
such predecessor trustee shall execute any and all instruments
in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights and
powers.
(d) Notice of Successor Trustee. Upon acceptance of appointment by
a successor trustee as provided herein, US Co and US Co Sub
shall cause to be mailed notice of the succession of such
trustee hereunder to each Holder specified in a List. If US Co
or US Co Sub shall fail to cause such notice to be mailed
within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of US Co and US Co Sub.
11. US CO SUCCESSORS
(a) Certain Requirements in Respect of Combination, etc. US Co
shall not enter into any transaction (whether by way of
reconstruction, reorganization, consolidation, merger,
transfer, sale, lease or otherwise) whereby all or
substantially all of its undertaking, property and assets
would become the property of any other Person or, in the case
of a merger, of the continuing corporation resulting therefrom
unless:
(i) such other Person or continuing corporation (the "US
Co Successor"), by operation of law, becomes, without
further action, bound by the terms and provisions of
this Agreement or, if not so bound, executes, prior
to or contemporaneously with the consummation of such
transaction an agreement supplemental hereto and such
other instruments (if any) as are satisfactory to the
Trustee and in the opinion of legal counsel to the
Trustee are necessary or advisable to evidence the
assumption by the US Co Successor of liability for
all monies payable and property deliverable hereunder
and the covenant of such US Co Successor to pay and
deliver or cause to be delivered the same and its
agreement to observe and perform all the covenants
and obligations of US Co under this Agreement; and
(ii) such transaction shall, to the satisfaction of the
Trustee and in the opinion of legal counsel to the
Trustee, be upon such terms as substantially to
preserve and not to impair in any material respect
any of the rights, duties, powers and authorities of
the Trustee or of the Holders hereunder.
<PAGE> 26
- 26 -
(b) Vesting of Powers in Successor. Whenever the conditions of
Section 11(a) hereof have been duly observed and performed,
the Trustee, if required, by Section 11(a) hereof, the US Co
Successor and US Co Sub shall execute and deliver the
supplemental agreement provided for in Article 12 hereof and
thereupon the US Co Successor shall possess and from time to
time may exercise each and every right and power of US Co
under this Agreement in the name of US Co or otherwise and any
act or proceeding by any provision of this Agreement required
to be done or performed by the board of directors of US Co or
any officers of US Co may be done and performed with like
force and effect by the directors or officers of such US Co
Successor.
(c) Wholly-Owned Subsidiaries. Nothing herein shall be construed
as preventing the amalgamation or merger of any wholly-owned
subsidiary of US Co with or into US Co or the winding-up,
liquidation or dissolution of any wholly-owned subsidiary of
US Co provided that all of the assets of such subsidiary are
transferred to US Co or another wholly-owned subsidiary of US
Co, and any such transactions are expressly permitted by this
Article 11.
12. AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
(a) Amendments, Modifications, etc. This Agreement may not be
amended or modified except by an agreement in writing executed
by US Co Sub, US Co and the Trustee and approved by the
Holders in accordance with Section 9.2 of the Exchangeable
Share Provisions.
(b) Ministerial Amendments. Notwithstanding the provisions of
Section 12(a) hereof, the parties to that agreement may in
writing, at any time and from time to time, without the
approval of the Holders, amend or modify this Agreement for
the purposes of;
(i) adding to the covenants of any or all of the parties
hereto for the protection of the Holders hereunder;
(ii) making such amendments or modifications not
inconsistent with this Agreement as may be necessary
or desirable with respect to matters or questions
which, in the opinion of the board of directors of
each of US Co and US Co Sub and in the opinion of the
Trustee and its counsel having in mind the best
interests of the Holders as a whole, it may be
expedient to make, provided that such boards of
directors and the Trustee and its counsel shall be of
the opinion that such amendments and modifications
will not be prejudicial to the interests of the
Holders as a whole; or
(iii) making such changes or corrections which, on the
advice of counsel to US Co Sub, US Co and the Truste,
are required for the purpose of curing or correcting
any ambiguity or defect or inconsistent provision or
clerical omission or mistake or manifest error,
provided that the Trustee and its counsel and the
board of directors of each of US Co Sub and US Co
shall be
<PAGE> 27
- 27 -
of the opinion that such changes or corrections will
not be prejudicial to the interests of the Holders as
a whole.
(c) Meeting to Consider Amendments. US Co Sub, at the request of
US Co, shall call a meeting or meetings of the Holders for the
purpose of considering any proposed amendment or modification
requiring approval pursuant hereto. Any such meeting or
meetings shall be called and held in accordance with the
by-laws of US Co Sub, the Exchangeable Share Provisions and
all applicable laws.
(d) Changes in Capital of US Co and US Co Sub. At all times after
the occurrence of any event effected pursuant to Section 2(g)
or Section 2(h) of the Support Agreement, as a result of which
either US Co Common Stock or the Exchangeable Shares or both
are in any way changed, this Agreement shall forthwith be
amended and modified as necessary in order that it shall apply
with full force and effect, mutatis mutandis, to all new
securities into which US Co Common Stock or the Exchangeable
Shares or both are so changed and the parties hereto shall
execute and deliver a supplemental agreement giving effect to
and evidencing such necessary amendments and modifications.
(e) Execution of Supplemental Agreements. No amendment to or
modification or waiver of any of the provisions of this
Agreement otherwise permitted hereunder shall be effective
unless made in writing and signed by all of the parties
hereto. From time to time US Co Sub (when authorized by a
resolution of its Board of Directors), US Co (when authorized
by a resolution of its board of directors) and the Trustee
may, subject to the provisions of these presents, and they
shall, when so directed by these presents, execute and deliver
by their proper officers, agreements or other instruments
supplemental hereto, which thereafter shall form part hereof,
for any one or more of the following purposes:
(i) evidencing the succession of any US Co Successors to
US Co and the covenants of and obligations assumed by
each such US Co Successors in accordance with the
provisions of Article 11, and the successor of any
successor trustee in accordance with the provisions
of Article 10;
(ii) making any additions to, deletions from or
alterations of the provisions of this Agreement or
the Voting Rights, the Exchange Right or the
Automatic Exchange Rights which, in the opinion of
the Trustee and its counsel, will not be prejudicial
to the interests of the Holders as a whole or are in
the opinion of counsel to the Trustee necessary or
advisable in order to incorporate, reflect or comply
with any legislation the provisions of which apply to
US Co, US Co Sub, the Trustee or this Agreement; and
(iii) for any other purposes not inconsistent with the
provisions of this Agreement, including without
limitation to make or evidence any amendment or
modification to this Agreement as contemplated
hereby, provided that, in the opinion of the Trustee
and its counsel, the rights of the Trustee and the
Holders as a whole will not be prejudiced thereby.
<PAGE> 28
- 28 -
13. TERMINATION
(a) Term. The Trust created by this Agreement shall continue until
the earliest to occur of the following events:
(i) no outstanding Exchangeable Shares are held by a
Holder;
(ii) each of US Co Sub and US Co elects in writing to
terminate the Trust and such termination is approved
by the Holders of the Exchangeable Shares in
accordance with Section 9.2 of the Exchangeable Share
Provisions; and
(iii) twenty-one (21) years after the death of the last
survivor of the descendants of His Majesty King
George VI of the United Kingdom of Great Britain and
Northern Ireland living on the date of the creation
of the Trust.
(b) Survival of Agreement. This Agreement shall survive any
termination of the Trust and shall continue until there are no
Exchangeable Shares outstanding held by a Holder; provided,
however, that the provisions of Articles 8 and 9 hereof shall
survive any such termination of this Agreement.
14. GENERAL
(a) Severability. If any provision of this Agreement is held to be
invalid, illegal or unenforceable, the validity, legality or
enforceability of the remainder of this Agreement shall not in
any way be affected or impaired thereby and the agreement
shall be carried out as nearly as possible in accordance with
its original terms and conditions.
(b) Inurement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective
successors and permitted assigns and to the benefit of the
Holders.
(c) Notices to Parties. All notices and other communications
between the parties hereunder shall be in writing and shall be
deemed to have been given if delivered personally or by
confirmed telecopy to the parties at the following addresses
(or at such other address for such party as shall be specified
in like notice):
(i) if to US Co at:
Pioneer Natural Resources Company
1400 Williams Square West
5205 N. O'Connor Blvd.
Irving, Texas 75039-3746
Attention: President
Telecopy: (972) 402-7057
<PAGE> 29
- 29 -
(ii) if to US Co Sub at:
Pioneer Natural Resources (Canada) Ltd.
2900, 255 - 5th Avenue S.W.
Calgary, Alberta
T2P 3G6
Attention: President
Telecopy: (403) 231-3247
(iii) if to the Trustee at:
if by mail or delivery:
Montreal Trust Company of Canada
710, 530 - 8th Avenue S.W.
Calgary, Alberta
T2P 3S8
Attention: Marilyne Paynter
Telecopy: (403) 267-6598
Any notice or other communication given personally shall be
deemed to have been given and received upon delivery thereof
and if given by telecopy shall be deemed to have been given
and received on the date of receipt thereof unless such day is
not a Business Day in which case it shall be deemed to have
been given and received upon the immediately following
Business Day.
(d) Notice of Holders. Any and all notices to be given and any
documents to be sent to any Holders may be given or sent to
the address of such Holder shown on the register of Holders of
Exchangeable Shares in any manner permitted by the
Exchangeable Share Provisions and shall be deemed to be
received (if given or sent in such manner) at the time
specified in such Exchangeable Share Provisions, the
provisions of which the Exchangeable Share Provisions shall
apply mutatis mutandis to notices or documents as aforesaid
sent to such Holders.
(e) Risk of Payments by Post. Whenever payments are to be made or
documents are to be sent to any Holder by the Trustee, by US
Co Sub or by US Co or by such Holder to the Trustee or to US
Co or US Co Sub, the making of such payment or sending of such
document sent through the post shall be at the risk of US Co
Sub or US Co, in the case of payments made or documents sent
by the Trustee or US Co Sub or US Co, and the Holder, in the
case of payments made or documents sent by the Holder.
(f) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
<PAGE> 30
- 30 -
(g) Jurisdiction. This Agreement shall be construed and enforced
in accordance with the laws of the Province of Alberta and the
laws of Canada applicable therein.
(h) Attornment. US Co agrees that any action or proceeding arising
out of or relating to this Agreement may be instituted in the
courts of Alberta, waives any objection which it may have now
or hereafter to the venue of any such action or proceeding,
irrevocably submits to the jurisdiction of the said courts in
any such action or proceeding, agrees to be bound by any
judgment of the said courts and agrees not to seek, and hereby
waives, any review of the merits of any such judgment by the
courts of any other jurisdiction and hereby appoints US Co Sub
at its registered office in the Province of Alberta as US Co's
attorney for service of process.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to
be duly executed as of the date first above written.
PIONEER NATURAL
RESOURCES COMPANY
Per:
------------------------------------
Per:
------------------------------------
PIONEER NATURAL RESOURCES (CANADA) LTD.
Per:
------------------------------------
Per:
------------------------------------
MONTREAL TRUST COMPANY
OF CANADA
Per:
------------------------------------
Per:
------------------------------------
<PAGE> 1
EXHIBIT 4.1
Organized Under the Laws of the State of Delaware
NUMBER SHARES
000
PIONEER NATURAL RESOURCES COMPANY
Special Preferred Voting Stock
Par Value $.01
This Certifies that [SPECIMEN] is the
----------------------------------------------------
registered holder of Shares
---------------------------------------------------
of the fully paid and non-assessable Capital Stock of
Pioneer Natural Resources Company
transferable only on the books of the Corporation by the holder hereof in
person or by Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed
this day of A.D. 19
----- --------- --
- -------------------------------- --------------------------------
President Secretary
<PAGE> 2
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
TEN ENT - as tenants by the ------ --------
entireties (Cust) (Minor)
JT TEN - as joint tenants with under Uniform Gifts to
right of survivorship Minors
and not as tenants Act
in common ------------------
(State)
Additional abbreviations may also be used though not in the above list.
For value received, hereby sell, assign and transfer unto
--------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ]
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Shares
----------------------------------------------------------------------
represented by the within Certificate, and do hereby irrevocably constitute
and appoint
-----------------------------------------------------------------
----------------------------------------------------------------------------
Attorney to transfer the said shares on the books of the within-named
Corporation with full power of substitution in the premises.
Dated,
--------------------------
-------------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT,
OR ANY CHANGE WHATEVER.
In presence of
--------------------------------
<PAGE> 1
EXHIBIT 4.2
PIONEER NATURAL RESOURCES (CANADA) LTD.
CONTINUED UNDER THE BUSINESS CORPORATIONS ACT (ALBERTA)
PROROGEE SELON LA LOI INTITULEE BUSINESS CORPORATIONS ACT (ALBERTA)
NUMBER - NUMERO SHARES - ACTIONS
EX CUSIP 723918 10 8
THIS CERTIFIES THAT
LES PRESENTES ATTESTENT QUE
IS THE REGISTERED HOLDER OF
EST LE PORTEUR INSCRIT DE
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FULLY PAID AND NON-ASSESSABLE ACTIONS ECHANGEABLES ENTIEREMENT
EXCHANGEABLE SHARES WITHOUT PAR LIBEREES, SANS VALEUR NOMINALE,
VALUE IN THE CAPITAL OF DU CAPITAL DE
PIONEER NATURAL RESOURCES (CANADA) LTD.
transferable on the books of the lesquelles peuvent etre transferees
Corporation by the registered holder dans les livres de la societe soit en
in person or by attorney duly auth- personne soit par fonde de pouvoir
orized in writing upon surrender of dument autorise par ecrit sur remise
this certificate properly endorsed. du present certificat dument endosse.
This certificate is not valid Le present certificat ne sera valide
until countersigned and registered que s'il est contresigne et enregistre
by the Registrar and Transfer Agent par l'agent charge de la tenue des
of the Corporation. registres et l'agent des transferts de
la societe.
In Witness Whereof the Corporation
has caused this certificate to be En foi de quoi, la societe a fait
signed by the facsimile signatures of signer le present certificat par les
its duly authorized officers. signatures autographiees de ses
dirigeants dument autorises.
Dated/Date du
COUNTERSIGNED AND REGISTERED - CONTRESIGNE ET ENREGISTRE
MONTREAL TRUST COMPANY OF CANADA CALGARY
COMPAGNIE MONTREAL TRUST DU CANADA TORONTO
REGISTRAR AND TRANSFER AGENT
AGENT CHARGE DE LA TENUE DES REGISTRES ET AGENT DES TRANSFERTS
BY - PAR SPECIMEN /s/ GLEN SCHMIDT /s/ MARK L. WITHROW
------------------------------
AUTHORIZED OFFICER - DIRIGEANT PRESIDENT VICE PRESIDENT
AUTORISE PRESIDENT VICE-PRESIDENT
THE SHARES REPRESENTED BY THIS CERT- LES ACTIONS REPRESENTEES PAR LE PRESENT
IFICATE ARE TRANSFERABLE AT THE CERTIFICAT SONT CESSIBLES AUX PRINCIPAUX
OFFICES OF MONTREAL TRUST COMPANY OF BUREAUX DE LA COMPAGNIE MONTREAL TRUST
CANADA IN CALGARY, ALBERTA AND TORONTO, DU CANADA DANS LES VILLES DE CALGARY
ONTARIO. (ALBERTA) ET TORONTO (ONTARIO).
</TABLE>
<PAGE> 2
The class of shares represented by this certificate has rights, privileges,
restrictions or conditions attached thereto and the Corporation will furnish to
a shareholder, on demand and without charge, a full copy of the text of the
rights, privileges, restrictions and conditions attached to the class of shares
represented by this certificate. The holder hereof also has certain rights and
is entitled to certain benefits pursuant to the Voting and Exchange Trust
Agreement (the "Agreement") among Pioneer Natural Resources Company ("Pioneer"),
the Corporation and Montreal Trust Company of Canada (the "Trustee"), including
(a) the right to instruct the Trustee with respect to the exercise of (i) voting
rights in respect of a special voting share of Pioneer and (ii) the right to
exchange the share(s) represented hereby for shares of common stock of Pioneer
and (b) the benefits of the obligation of Pioneer to effect the automatic
exchange of shares of common stock of Pioneer for the share(s) represented
hereby, pursuant to the terms and conditions of the Agreement. The Corporation
and Pioneer have entered into an agreement (the "Support Agreement") pursuant to
which Pioneer has agreed to take certain actions to ensure that the Corporation
will be able to make certain payments and cause to be delivered shares of common
stock of Pioneer in satisfaction of the obligations of the Corporation under the
rights, privileges, restrictions and conditions attaching to the shares
represented hereby. Copies of the Agreement and the Support Agreement are
available for inspection at the registered office of the Corporation. The
share(s) represented hereby are subject to certain overriding purchase rights of
Pioneer pursuant to the articles of the Corporation and the Plan of Arrangement
effected December 18, 1997 under the Business Corporations Act (Alberta) in
respect of Chauvco Resources Ltd. upon the proposed liquidation, dissolution or
winding-up of the Corporation and upon the proposed redemption by the
Corporation of the share(s) represented hereby, and notice of the terms and
conditions of such articles is hereby given.
La categone des actions representees par le present certificat comporte les
droits, privileges, restrictions ou conditions qui y sont rattaches et la
societe fournira a l'actionnaire, sur demande et sans frais, un exemplaire du
texte integral de tels droits, privileges, restrictions et conditions. Le
porteur des presentes a egalement certains droits et beneficie de certains
avantages suivant la convention de vote et d'echange en fideicommis (la
"convention") entre Pioneer Natural Resources (Canada) Ltd. ("Pioneer"), la
societe et la Compagnie Montreal Trust du Canada (le "fiduciaire"), y compris a)
le droit de donnor au fiduciaire des instructions a l'egard de l'exercice i) des
droits de vote rattaches a une action avec droit de vote special de Pioneer et
ii) du droit d'echanger les actions representees par les presentes contre des
actions ordinaires de Pioneer et b) le benefice de l'obligation de Pioneer
d'effectuer l'echange automatique d'actions ordinaires de Pioneer contre les
actions representees par les presentes, suivant les modalites de la convention.
La societe et Pioneer ont conclu une covnention (la "convention du soutien")
suivant laquelle Pioneer a convenu de prendre certaines mesures pour s'assurer
que la societe soit capable d'effectuer certains paiements et de faire en sorte
que soient livrees les actions ordinaires de Pioneer en reglement des
obligations de la societe decoulant des droits, privileges, restrictions et
conditions rattaches aux actions representees par les presentes. Des
exemplaires de la convention et de la convention de soutien pouvent etre
examines au siege social de la societe. Les actions representees par les
presentes sont assorties de certains droits d'achat derogatoires de Pioneer
suivant les statuts de la societe et le plan d'arrangement concernant Chauvco
Resources Ltd. conclu le 18 decembre 1997, en vertu de la Business Corporations
Act (Alberta) advenant la liquidation ou la dissolution proposees de la societe
ou advenant le rachat propose par la societe des actions representees par les
presentes, et avis des modalites de tels statuts est par les presentes donne.
- --------------------------------------------------------------------------------
SHARE TRANSFER POWER PROCURATION POUR LE TRANSFERT D'ACTIONS
Please insert social insurance number of transferee, if applicable
Priere d'inscrire le numero d'assurance sociale du cessionnaire, s'il y a lieu
----------------------------------
----------------------------------
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For Value Received, the undersigned hereby sells, assigns Pour valeur recue, le soussigne vend, cede et transfere
and transfers unto
shares
actions
- --------------------------------------------------------------------------------------------------------------------------
represented by this certificate, and does hereby irrevocably representees par le present certificat et designe
constitute and appoint irrevocablement
- ----------------------------------------------------------------------------------------------------------------------------------
attorney to transfer the said shares on the registers of the son fonde de pouvoir pour transferer lesdites actions au
within named Corporation with full power of substitution in registre de la societe designee aux presentes avec plein
the premises. pouvoir de substitution aux presentes.
- --------------------- ------------------------------------------------------- ------------------------------------------------
(Date) (Signature of Shareholder - Signature de l'actionnaire) (Guarantee of Signature - Aval de la signature)
</TABLE>
- --------------------------------------------------------------------------------
NOTICE OF RETRACTION
To the Corporation and Pioneer
This notice is given pursuant to Article 6 of the provisions (the "Share
Provisions") attaching to the share(s) represented by this certificate and all
capitalized words and expressions used in this notice which are defined in the
Share Provisions have the meanings ascribed to such words and expressions in
such Share Provisions.
The undersigned hereby notifies the Corporation that, subject to the
Retraction Call Right referred to below, the undersigned desires to have the
Corporation redeem in accordance with Article 6 of the Share Provisions:
[ ] all share(s) represented by this certificate; or
[ ] --------------------------------------------- share(s) only.
The undersigned hereby notifies the Corporation that the Retraction Date
shall be .
----
NOTE: The Retraction Date must be a Business Day and must be not less than
three Business Days nor more than 10 Business Days after the date upon
which this notice is received by the Corporation. In the event that no
such Business Day is specified above, the Retraction Date shall be
deemed to be the tenth Business Day after the date on which this notice
is received by the Corporation.
The undersigned acknowledges the Retraction Call Right of Pioneer to
purchase all but not less than all the Retracted Shares from the undersigned and
that this notice shall be deemed to be a revocable offer by the undersigned to
sell the Retracted Shares to Pioneer in accordance with the Retraction Call
Right on the Retraction Date for the Retraction Price and on the other terms and
conditions set out in Section 6.3 of the Share Provisions. If Pioneer
determines not to exercise the Retraction Call Right, the Corporation will
notify the undersigned of such fact as soon as possible. This Notice of
Retraction, and offer to sell the Retracted Shares to Pioneer, may be revoked
and withdrawn by the undersigned by notice in writing given to the Corporation
at any time before the close of business on the Business Day immediately
preceding the Retraction Date.
The undersigned acknowledges that if, as a result of solvency provisions of
applicable law, the Corporation is unable to redeem all Retracted Shares, the
undersigned will be deemed to have exercised the Exchange Right (as defined in
the Agreement) so as to require Pioneer to purchase the unredeemed Retracted
Shares.
The undersigned hereby represents and warrants to the Corporation and
Pioneer that the undersigned has good title to, and owns, the share(s)
represented by this certificate to be acquired by the Corporation or Pioneer,
as the case may be, free and clear of all liens, claims and encumbrances.
[ ] Toronto Please check applicable box if the securities and any cheque(s)
resulting from the retraction or purchase of the Retracted Shares
are to be held for pick-up by the shareholder at the principal
transfer office of the Transfer Agent in Toronto or Calgary,
failing which the securities and any cheque(s) will be mailed to
[ ] Calgary the last address of the shareholder as it appears on the
register.
NOTE: This panel must be completed and this certificate, together with such
additional documents as the Transfer Agent may require, must be deposited
with the Transfer Agent at its principal transfer office in Toronto or
Calgary. The securities and any cheque(s) resulting from the retraction or
purchase of the Retracted Shares will be issued and registered in, and
made payable to, respectively, the name of the shareholder as it appears
on the register of the Corporation and the securities and cheque(s)
resulting from such retraction or purchase will be delivered to such
shareholder as indicated above, unless the form appearing immediately
below is duly completed.
AVIS DE RACHAT AU GRE DU PORTEUR
A la societe et a Pioneer
Le present avis est donne suivant l'article 6 des dispositions (les
"dispositions afferentes aux actions") rattachees aux actions representees par
le present certificat et certains mots utilises dans le present avis qui sont
definis dans les dispositions afferentes aux actions ont le sens qui leur est
attribue dans lesdites dispositions.
Par les presentes, le soussigne avise la societe que, sous reserve du
droit d'achat mentionne ci-apres, il desire que la societe rachete conformement
a l'article 6 des dispositions afferentes aux actions:
[ ] la totalite des actions representees par le present certificat; ou
[ ] ____________________________________ action(s) seulement.
Le soussigne avise la societe que la date de rachat au gre du porteur est
le ___________________________.
NOTE: La date de rachat au gre du porteur doit etre un jour ouvrable et ne peut
pas etre de moins de trois jours ouvrables ni plus de 10 jours ouvrables
apres la date a laquelle la societe recoit le present avis. Si aucun
jour ouvrable n'est indique precedemment, la date de rachat au gre du
porteur est reputee etre le dixieme jour ouvrable apres la date a
laquelle la societe recoit le present avis.
Le soussigne reconnait que le droit d'achat de Pioneer permettant a
celle-ci de lui acheter la totalite mais non moins de la totalite des actions
ayant fait l'objet du privilege de rachat au gre du porteur et que le present
avis est repute etre une offre revocable par le soussigne de vendre a Pioneer
les actions a racheter a la demande du porteur conformement au droit d'achat a
la date de rachat au gre du porteur, au prix de rachat et suivant les autres
modalites etablies a l'article 6.3 des dispositions afferentes aux actions. Si
Pioneer decide de ne pas exercer le droit d'achat, la societe en avisera le
soussigne aussitot que possible. Le soussigne peut revoquer et retirer le
present avis de rachat au gre du porteur et ladite offre de vente a Pioneer en
donnant un avis ecrit a la societe en tout temps avant la fermeture des bureaux
le jour ouvrable precedant immediatement la date de rachat au gre du porteur.
Le soussigne reconnait que si, en raison de dispositions legislatives sur
l'insolvabilite applicables, la societe est incapable de racheter la totalite
des actions a racheter a la demande du porteur, il est repute avoir actions a
racheter a la demande du porteur qui n'auront pas ete rachetees.
Par les presentes, le soussigne declare et garantit a la societe et a
Pioneer qu'il a un titre de propriete bon et valable dans les actions
representees par le present certificat qui seront acquises par la societe ou
Pioneer, selon le cas, libres de toute priorite, reclamation et charge.
______________ ________________________________ ______________________________
(Date) Signature of Shareholder - (Guarantee of Signature -
Signature de l'actionnaire) Aval de la signature
[ ] Toronto Veuillez cocher la case applicable si les titres et les cheques
resultant du rachat ou de l'achat des actions a racheter a la
demande du porteur doivent etre gardes pour que l'actionnaire les
[ ] Calgary recupere au bureau principal des transferts de l'agent des
transfert a Toronto ou a Calgary, sinon les titres et les cheques
seront postes a la derniere adresse de l'actionnaire qui parait
au registre.
NOTE: Cette partie doit etre remplie et le present certificat, avec les
document supplementaires que l'agent des transferts peut demander, doit
etre depose aupres de l'agent des transferts a son bureau principal des
transferts a Toronto ou Calgary. Les titres et les cheques resultant du
rachat au gre du porteur ou de l'achat des actions a racheter a la
demande du porteur seront emis, immatricules et payables au nom de
l'actionnaire comme il parait au registre de la societe et de tels titres
et cheques seront livres a l'actionnaire comme il est indique
precedemment, a moins que le formulaire qui suit soit dument rempli.
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- --------------------------------------------------------------------- -------------------------
Name of Person in Whose Name Securities or Cheque(s) Are To Be Date
Registered, Issued or Delivered (please print)
Nom de la personne au nom de qui les titres ou les cheques doivent
etre immatricules, emis ou livres (en caracteres d'imprimerie)
- --------------------------------------------------------------------- --------------------------
Street Address or P.O. Box - Adresse ou boite postale Signature of Shareholder -
Signature de l'actionnaire
- --------------------------------------------------------------------- --------------------------
City - Ville/Province Signature Guaranteed by -
Signature avalisee par
- --------------------------------------------------------------------- --------------------------
</TABLE>
NOTE: If the notice of retraction is for less than all of the share(s)
represented by this certificate, a certificate representing the remaining
shares of the Corporation will be issued and registered in the name of
the shareholder as it appears on the register of the Corporation, unless
the Share Transfer Power hereon is duly completed in respect of such
shares.
NOTE: Si l'avis de rachat au gre du porteur vise moins de la totalite des
actions representees par le present certificat, un certificat
representant le reste des actions de la societe sera delivre et
immatricule au nom de l'actionnaire comme il parait au registre de la
societe, a moins que la procuration pour le transfert d'actions ait ete
dument remplie a l'egard de telles actions.
NOTICE OF EXERCISE OF EXCHANGE RIGHT UPON INSOLVENCY EVENT
To the Corporation, the Trustee and Pioneer
In accordance with, and subject to, the rights, privileges, restrictions
and conditions attaching to the share(s) represented by this certificate, the
undersigned hereby instructs the Trustee to exercise the Exchange Right (as
defined in the Agreement) upon the occurrence and during continuance of an
Insolvency Event (as defined in the Agreement) so as to require Pioneer to
purchase from the undersigned:
[ ] all share(s) represented by this certificate; or
[ ] ________________________________________________ share(s) only.
The undersigned hereby represents and warrants to the Corporation and
Pioneer that the undersigned has good title to, and owns, the share(s)
represented by this certificate to be acquired by Pioneer free and clear of all
liens, claims and encumbrances.
[ ] Toronto Please check applicable box if the securities and any cheque(s)
resulting from the exercise of the Exchange Right are to be held
for pick-up by the shareholder at the principal transfer office
of the Transfer Agent in Toronto or Calgary, failing which the
[ ] Calgary securities and any cheque(s) will be mailed to the last address
of the shareholder as it appears on the register.
NOTE: This panel must be completed and this certificate, together with such
additional documents as the Transfer Agent may require, must be deposited
with the Transfer Agent at its principal transfer office in Toronto or
Calgary. The securities and any cheque(s) resulting from the exercise of
the Exchange Right will be issued and registered in, and made payable to,
respectively, the name of the shareholder as it appears on the register
of the Corporation and the securities and cheque(s) resulting from such
exchange will be delivered to such shareholder as indicated above, unless
the form appearing immediately below is duly completed.
AVIS D'EXERCICE DU DROIT D'ECHANGE LORS DE L'INSOLVABILITE
A la societe, au fiduciaire et a Pioneer
Sous reserve des droits, privileges, restrictions et conditions rattaches
aux actions representees par le present certificat et conformement a ceux-ci,
le soussigne demande au fiduciaire d'exercer le droit d'echange (selon la
definition dans la convention) a la survenance d'un cas d'insolvabilite (selon
la definition dans la convention) et tant qu'il durera de facon a obliger
Pioneer a lui acheter:
[ ] la totalite des actions representees par le present certificat; ou
[ ] ________________________________________________ action(s) seulement.
Par les presentes, le soussigne declare et garantit a la societe et a
Pioneer qu'il a un titre de propriete bon et valable dans les actions
representees par le present certificat qui seront acquises par Pioneer, libres
de toute priorite, reclamation et charge.
______________ ________________________________ ______________________________
(Date) Signature of Shareholder - (Guarantee of Signature -
Signature de l'actionnaire) Aval de la signature)
[ ] Toronto Veuillez cocher la case applicable si les titres et les cheques
resultant de l'exercice du droit d'echange doivent etre gardes
pour que l'actionnaire les recupere au bureau principal des
[ ] Calgary transferts de l'agent des transferts a Toronto ou a Calgary,
sinon les titres et les cheques seront postes a la derniere
adresse de l'actionnaire qui parait au registre.
NOTE: Cette partie doit etre remplie et le present certificat, avec les
document supplementaires que l'agent des transferts peut demander, doit
etre depose aupres de l'agent des transferts a son bureau principal des
transferts a Toronto ou Calgary. Les titres et les cheques resultant de
l'exercice du droit d'echange seront emis, immatricules et payables au
nom de l'actionnaire comme il parait au registre de la societe et de tels
titres et cheques seront livres a l'actionnaire comme il est indique
precedemment, a moins que le formulaire qui suit soit dument rempli.
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- --------------------------------------------------------------------- -------------------------
Name of Person in Whose Name Securities or Cheque(s) Are To Be Date
Registered, Issued or Delivered (please print)
Nom de la personne au nom de qui les titres ou les cheques doivent
etre immatricules, emis ou livres (en caracteres d'imprimerie)
- --------------------------------------------------------------------- --------------------------
Street Address or P.O. Box - Adresse ou boite postale Signature of Shareholder -
Signature de l'actionnaire
- --------------------------------------------------------------------- --------------------------
City - Ville/Province Signature Guaranteed by -
Signature avalisee par
- --------------------------------------------------------------------- --------------------------
</TABLE>
NOTE: If the election to exchange is for less than all of the share(s)
represented by this certificate, the remaining shares will be registered
in the name of the shareholder as it appears on the register of the
Corporation, unless the Share Transfer Power hereon is duly completed in
respect of such shares.
NOTE: Si l'echange vise moins de la totalite des actions representees par le
present certificat, le reste des actions sera immatricule au nom de
l'actionnaire comme il parait au registre de la societe, a moins que la
procuration pour le transfert d'actions ait ete dument remplie a l'egard
de telles actions.
NOTICE:The signature to the Share Transfer Power, Notice of Retraction or
Notice of Exercise of Exchange Right must correspond with the name as
written upon the face of this certificate in every particular without
alteration or enlargement or any change whatsoever, and must be
guaranteed by a bank, trust company or member of a recognized stock
exchange whose signature is acceptable to the Transfer Agent and
Registrar.
AVIS: La signature apposee sur la procuration pour le transfert d'actions,
l'avis de rachat au gre du porteur ou l'avis d'exercice du droit
d'echange doit correspondre en tous points au nom ecrit au recto du
present certificat sans modification ni ajout d'aucune sorte et doit etre
avalisee par une banque, une societe de fiducie ou un membre d'une bourse
reconnue dont la signature est acceptable pour l'agent des transferts et
l'agent charge de la tenue des registres.
<PAGE> 1
EXHIBIT 10.1
[PRIMARY CREDIT FACILITY]
================================================================================
AMENDED AND RESTATED CREDIT FACILITY AGREEMENT
PIONEER NATURAL RESOURCES COMPANY,
as BORROWER,
and
NATIONSBANK OF TEXAS, N.A.,
as ADMINISTRATIVE AGENT,
and
CIBC INC.,
as DOCUMENTATION AGENT,
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as DOCUMENTATION AGENT,
and
THE CHASE MANHATTAN BANK,
as SYNDICATION AGENT,
THE CO-AGENTS SIGNATORY HERETO,
and
THE OTHER LENDERS SIGNATORY HERETO
as of December 18, 1997 $1,075,000,000
================================================================================
<PAGE> 2
TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS AND REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1.3 Amendment of Defined Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1.4 References and Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1.5 Calculations and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 2 LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.1 Making the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.2 Requests for Revolving Loan Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.3 Rate Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.4 Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.5 Procedure for Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.6 Special Provisions for Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.7 Facility Fee; Amendment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.8 Managing Agents' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.9 Termination and Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.10 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.11 Payments to Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.12 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.13 Requesting Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.14 Reimbursement of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.15 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.16 Capital Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.17 Increased Cost of Eurodollar Portions . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.18 Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.19 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.20 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.21 Make-Whole Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 2.22 Competitive Bid Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 3 CONDITIONS PRECEDENT TO LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 3.1 Initial Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 3.2 Additional Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 4 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 4.1 Borrower's Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 4.2 Representation by Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
</TABLE>
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TABLE OF CONTENTS
(CONTINUED)
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PAGE
----
<S> <C>
ARTICLE 5 COVENANTS OF BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.2 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 5.3 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE 6 EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 6.3 Annulment of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 6.4 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE 7 AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.1 Appointment and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.2 Agent's Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.3 Lenders' Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 7.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 7.5 Rights as Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.6 Sharing of Set-Offs and Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.7 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 7.8 Benefit of Article 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 7.9 Resignation and Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE 8 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 8.1 Waivers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 8.2 Survival of Agreements; Cumulative Nature . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.4 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.6 Limitation on Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 8.7 Termination; Limited Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 8.8 Assignments; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 8.9 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 8.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 8.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.12 Waiver of Jury Trial, Punitive Damages . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.13 Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.14 Nonliability of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.15 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.16 Release of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 8.17 Forum Selection and Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 8.18 Assumption of Prior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.19 Renewal, Extension or Rearrangement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.20 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
</TABLE>
ii
<PAGE> 4
EXHIBITS AND SCHEDULES
Exhibits:
Exhibit A-1 - Form of Loan Note
Exhibit A-2 - Form of Swing Line Note
Exhibit A-3 - Form of Competitive Bid Note
Exhibit B - Form of Guaranty
Exhibit C - Form of Request for Advance
Exhibit D - Form of Rate Election
Exhibit E - Form of Request for Swing Line Advance
Exhibit F - Form of Swing Line Participation Certificate
Exhibit G - [Intentionally omitted]
Exhibit H - Forms of Opinion of Borrower's and Restricted
Subsidiaries' Counsel
Exhibit I - Organization Chart of Borrower and its Subsidiaries
Exhibit J - Form of Designated Officer's Certificate
Exhibit K-1 - Form of Election to Convert
Exhibit K-2 - Form of Release
Exhibit L - Form of Agreement to be Bound
Exhibit M - Form of Pledge Agreement
Exhibit N - Form of Request for Competitive Bid Offer
Exhibit O - Form of Competitive Bid Offer
Exhibit P - Form of Bid Acceptance
Schedules:
Schedule 1 - Schedule of Lenders' Commitments and Percentage Share
Schedule 2 - Disclosure Schedule
Schedule 3 - Schedule of Restricted Subsidiaries
Schedule 4 - Schedule of Insurance
Schedule 5 - Schedule of Security Instruments
Schedule 6 - Continuing Letters of Credit
iii
<PAGE> 5
AMENDED AND RESTATED CREDIT FACILITY AGREEMENT
THIS AMENDED AND RESTATED CREDIT FACILITY AGREEMENT is made as of
December 18, 1997 (together with all amendments, renewals, extensions and other
modifications, if any, from time to time hereafter made hereto, the "Agreement"
or "Credit Facility Agreement"), by and among PIONEER NATURAL RESOURCES
COMPANY, a Delaware corporation (the "Borrower"), and NATIONSBANK OF TEXAS,
N.A., CIBC INC., MORGAN GUARANTY TRUST COMPANY OF NEW YORK, THE CHASE MANHATTAN
BANK, in the capacities herein identified, the Co-Agents party hereto, and the
other Lenders from time to time parties hereto.
RECITALS:
A. Reference is here made to that certain Credit Facility
Agreement - Primary Credit Facility, dated as of August 7, 1997, by and among
Pioneer USA, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Existing Credit Agreement") and the notes issued thereunder.
B. Borrower has assumed effective as of the Effective Date (as
hereinafter defined) and hereby assumes, and Pioneer USA has assigned and
hereby assigns to Borrower, all of the indebtedness, obligations and
liabilities of Pioneer USA, evidenced by and outstanding under the Existing
Credit Agreement and all related instruments and documents (all such
indebtedness, obligations and liabilities under the Existing Credit Agreement
and/or such instruments and documents collectively, the "Prior Indebtedness").
C. Borrower has determined that it is in its best interests to
assume the Prior Indebtedness and has voluntarily requested that Lenders, and
Lenders have agreed to, restructure, rearrange and renew the Prior Indebtedness
and the respective commitments of the Lenders and Agents party to the Existing
Credit Agreement into obligations and commitments hereunder.
D. As a part of the restructuring and rearranging of the Prior
Indebtedness, Lenders shall modify their respective commitments under the
Credit Agreement such that on the Effective Date each Lender shall be obligated
hereunder, subject to the terms hereof, to the Loan Commitment stated on
Schedule 1 for such Lender.
E. Any Loans outstanding under the Existing Credit Agreement on
the Effective Date bearing interest at a Eurodollar Rate shall be deemed
continued as a Loan under this Agreement at such Eurodollar Rate and for the
Eurodollar Interest Period with respect thereto under the Existing Credit
Agreement.
<PAGE> 6
F. Any Competitive Bid Advances outstanding under the Existing
Credit Agreement on the Effective Date shall be deemed continued as a
Competitive Bid Advance under this Agreement at the rate and for the term with
respect thereto under the Existing Credit Agreement.
G. The Letters of Credit (hereinafter defined) outstanding under
the Existing Credit Agreement on the Effective Date described in Schedule 6
hereto shall be deemed continued as Letters of Credit under this Agreement with
the Lenders having on the Effective Date a participation therein equal to their
Percentage Share (hereinafter defined).
H. Lenders and Borrower intend and have agreed to amend and
restate the Existing Credit Agreement in its entirety as and pursuant to this
Agreement.
NOW, THEREFORE, in consideration of the Recitals hereof and the mutual
covenants contained herein, the parties hereby agree to amend and restate the
Existing Credit Agreement in its entirety as follows:
ARTICLE 1
DEFINITIONS AND REFERENCES
Section 1.1 Defined Terms. As used in this Agreement, each of
the following terms has the meaning given it in this Section or in the sections
and subsections referred to below:
"Acquisition Agreement" has the meaning given it in Section 3.1(e).
"Acquisition" has the meaning given it in Section 3.1(e).
"Adjusted Eurodollar Rate" means, with respect to each particular
Eurodollar Portion and the associated Eurodollar Rate and Reserve Percentage,
the rate per annum determined hereunder by Administrative Agent on a daily
basis pursuant to the following formula:
AER = ER + EM
---------
1.00 - RP
AER = Adjusted Eurodollar Rate
ER = Eurodollar Rate
RP = Reserve Percentage
EM = Eurodollar Margin
The Adjusted Eurodollar Rate shall change as and when the associated Reserve
Percentage and Eurodollar Margin change.
"Administrative Agent" means NationsBank of Texas, N.A., as
Administrative Agent hereunder and its successors and assigns in such capacity.
2
<PAGE> 7
"Advance" means any Revolving Loan Advance, Competitive Bid Advance or
Swing Line Advance.
"Affiliate" means, as to any Person, each other Person that directly
or indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person.
"Agent" means any of the Managing Agents or the Collateral Agent
hereunder, solely in such capacities and not in their respective capacities as
Lenders.
"Agreement" means this Amended and Restated Credit Facility Agreement,
as this Amended and Restated Credit Facility Agreement may be amended, modified
or restated from time to time hereafter.
"Amendment Fee Rate" means 2.5 basis points.
"Applicable Rating Level" means the level set forth below that
corresponds to the highest of ratings issued from time to time by Moody's and
S&P, as applicable to Borrower's senior unsecured long-term debt:
<TABLE>
<CAPTION>
Moody's S&P
------- ---
<S> <C> <C>
Level I greater than Baa1 greater than BBB+
Level II Baa1 BBB+
Level III Baa2 BBB
Level IV Baa3 BBB-
Level V less than Baa3 less than BBB-
</TABLE>
For example, if the Moody's rating is Baa1 and the S&P rating is BBB, Level II
shall apply.
For purposes of the foregoing, (i) ")" means a rating more favorable
than; "(" means a rating less favorable than; (ii) if ratings for Borrower's
senior unsecured long-term debt shall not be available from S&P or Moody's,
Level V shall be deemed applicable; (iii) if any of the Rating Agencies shall
change its ratings nomenclature prior to the date all Obligations have been
paid and the Commitments canceled, Borrower and the Lenders shall negotiate in
good faith to amend the references to specific ratings in this definition to
reflect such change, and pending such amendment, if an appropriate Applicable
Rating Level is otherwise not determinable based upon the foregoing grid, the
last Applicable Rating Level in effect at the time of such change shall
continue to apply.
"Base Rate" means the fluctuating per annum rate of interest from time
to time in effect equal to the higher of (a) the rate of interest as publicly
announced by Administrative Agent as its "Prime Rate" or (b) the Federal Funds
Rate plus one-half of one percent (1/2 of 1%), whether or
3
<PAGE> 8
not Borrower has notice thereof. Such rate is set by Administrative Agent as a
general rate of interest, taking into account such factors as Administrative
Agent may deem appropriate, it being understood that many of 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 Administrative Agent may make various commercial or other loans at rates
of interest having no relationship to such rate. If Administrative Agent's
Prime Rate or the Federal Funds Rate changes after the date hereof, the Base
Rate shall be automatically increased or decreased, as the case may be, without
prior notice to Borrower from time to time as of the effective time of each
change in Administrative Agent's Prime Rate or the Federal Funds Rate. The
Administrative Agent shall promptly thereafter notify Borrower of such change
in the Base Rate.
"Base Rate Portion" means that portion of the unpaid principal balance
of a Loan which is not made up of Eurodollar Portions, Swing Line Advances or
Competitive Bid Advances.
"Bid Acceptance" means a Bid Acceptance substantially in the form of
Exhibit P hereto with appropriate insertions.
"Borrower" is defined in the Preamble hereto.
"Business Day" means a day on which commercial banks are open for
business with the public in the State of Texas. Any Business Day in any way
relating to Eurodollar Portions (such as the day on which a Eurodollar Interest
Period begins or ends) must also be a day on which, in the reasonable, good
faith judgment of Administrative Agent, significant transactions in dollars are
carried out in the interbank eurocurrency market.
"Canadian Credit Facility" means that certain Credit Facility
Agreement, dated as of December 18, 1997, among Chauvco, as Borrower, Canadian
Imperial Bank of Commerce, as Arranger and Administrative Agent, Bank of Nova
Scotia, as Co-Syndication Agent, Royal Bank of Canada, as Co-Syndication Agent,
The Chase Manhattan Bank of Canada, as Co-Agent, Morgan Guaranty Trust Company
of New York, as Co-Agent, NationsBank of Texas, N.A., as Co-Agent, The
Toronto-Dominion Bank, as Co-Agent, and the Lenders party thereto, as such
agreement may be amended, modified or restated from time to time.
"Cash Collateral" has the meaning given it in Section 2.14(d).
"Chauvco" means Chauvco Resources Ltd., a corporation organized under
the laws of the Province of Alberta, Canada.
"Co-Agent" means each of Bank of America National Trust and Savings
Association, The Bank of New York, The Bank of Nova Scotia, Royal Bank of
Canada, Union Bank of California, N.A., The Fuji Bank, Limited - Houston
Agency, and Wells Fargo Bank, N.A., as Co-Agents, and their respective
successors and assigns in such capacity.
"Collateral Agent" means NationsBank of Texas, N.A., as collateral
agent under the Security Instruments and its successors and assigns in such
capacity.
4
<PAGE> 9
"Commitment" means, with respect to each Lender, such Lender's Loan
Commitment.
"Competitive Bid Advances" has the meaning given it in Section 2.22.
"Competitive Bid Note" has the meaning given it in Section 2.22.
"Competitive Bid Obligations" means, at the particular time in
question, the sum of all outstanding Competitive Bid Advances.
"Competitive Bid Offer" has the meaning given it in Section 2.22.
"Competitive Bid Rate" has the meaning given it in Section 2.22.
"Consolidated" refers to the consolidation of any Person, in
accordance with GAAP, with its properly consolidated Subsidiaries. References
herein to a Person's Consolidated financial statements, financial position,
financial condition, or liabilities refer to the consolidated financial
statements, financial position, financial condition or liabilities, as the case
may be, of such Person and its properly consolidated Subsidiaries.
"Consolidated Interest Expense" is defined in Section 5.3(a).
"Credit Facility Agreement" means this Amended and Restated Credit
Facility Agreement, as this Amended and Restated Credit Facility Agreement may
be amended, modified or restated from time to time hereafter.
"Debt" of any Person means, without duplication:
(a) indebtedness of such Person for borrowed money;
(b) indebtedness of such Person constituting an obligation to pay
the deferred purchase price of property or services (other
than customary payment terms taken in the ordinary course of
such Person's business);
(c) indebtedness of such Person evidenced by a bond, debenture,
note or similar instrument;
(d) principal obligations under leases capitalized in accordance
with GAAP under which such Person is the lessee;
(e) indebtedness, contingent or otherwise, of such Person with
respect to bankers' acceptances or the face amount of letters
of credit or applications or reimbursement agreements
therefor;
(f) guaranties of such Person of indebtedness or obligations of
the type described in clauses (a), (b), (c), (d) or (e) above
of any other Person or obligations to purchase
5
<PAGE> 10
or acquire or to otherwise protect or insure a creditor
against loss in respect of indebtedness or obligations of the
type described in clauses (a), (b), (c), (d) or (e) above of
any other Person, but excluding endorsements in the ordinary
course of business of negotiable instruments in the course of
collection;
(g) indebtedness or obligations of the type described in clauses
(a), (b), (c), (d) or (e) above, which are secured by a Lien
on any property owned by such Person, whether or not such
indebtedness or obligations have been assumed by such Person
(limited however to the lesser of (1) the amount of its
liability or (2) the value of such property); and
(h) the undischarged balance of any production payment created by
such Person or for the creation of which such Person directly
or indirectly received payment;
provided, however, Debt shall not include (1) accounts payable incurred in the
ordinary course of such Person's business, or (2) any obligations in respect of
(i) exchange, forward, future, swap, hedging or similar agreements and (ii)
prepayments for gas or oil production or gas or oil imbalances.
"Default" means any Event of Default and any default, event or
condition which would, with the giving of any requisite notices and the passage
of any requisite periods of time, constitute an Event of Default.
"Default Rate" means, at the particular time in question, two percent
(2%) per annum plus the Base Rate then in effect; provided, that, with respect
to any Eurodollar Portion with an Eurodollar Interest Period extending beyond
the date such Eurodollar Portion becomes due and payable, "Default Rate" shall
mean, during such Eurodollar Interest Period, two percent (2%) per annum plus
the related Eurodollar Rate and plus the applicable Eurodollar Margin.
"Designated Entity" means Borrower and each of the Restricted
Subsidiaries.
"Designated Officer" means any Executive Officer or any other
individual duly elected to and holding one or more of the offices of vice
president, managing director, executive director, secretary or assistant
secretary of a Designated Entity, or any other Person authorized in writing by
any Designated Entity to execute any Loan Document, in each case designated by
a Designated Entity and acceptable to Required Lenders.
"Disclosure Schedule" means (a) Schedule 2 hereto and (b) any
documents listed on such schedule and expressly incorporated therein by
reference, true and correct copies of which shall have been delivered to
Managing Agents and each other Lender prior to the date hereof. Insofar as any
representations and warranties made herein are incorporated by reference or
otherwise remade in Loan Documents delivered as of a date after the date
hereof, the term "Disclosure Schedule" shall in such representations and
warranties be deemed to refer as well to all other documents indicated by
Borrower to be part of the Disclosure Schedule and which Borrower has at the
6
<PAGE> 11
particular time in question delivered to the Managing Agents, the Co-Agents and
each other Lender and which have not been promptly objected to in writing by or
on behalf of the Required Lenders.
"Documentation Agent" means each of CIBC Inc. and Morgan Guaranty
Trust Company of New York, as Documentation Agents, and their respective
successors and assigns in such capacity.
"EBITDAX" is defined in Section 5.3(a).
"Effective Date" means the date the parties hereto shall have executed
and delivered counterparts hereof to Administrative Agent and Administrative
Agent shall have notified the parties hereto that the Effective Date shall have
occurred.
"Environmental Law" means any federal, state, or local statute, or
rule or regulation promulgated thereunder, any judicial or administrative order
or judgment to which Borrower, or any of its Subsidiaries is a party or which
are applicable to Borrower or any of its Subsidiaries or its or their
respective properties (whether or not by consent), and any provision or
condition of any permit, license or other governmental operating authorization,
relating to protection of the environment, persons or the public welfare from
actual or potential exposure or the effects of exposure to any actual or
potential release, discharge, spill or emission (whether past or present) of,
or regarding the manufacture, processing, production, gathering,
transportation, importation, use, treatment, storage or disposal of, any
chemical, raw material, pollutant, contaminant or toxic or hazardous substance
or waste.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.
"ERISA Plan" means any pension benefit plan subject to Title IV of
ERISA maintained by any Designated Entity or any Affiliate thereof with respect
to which any Designated Entity has a fixed or contingent liability.
"Eurodollar Interest Period" means, with respect to each particular
Eurodollar Portion, a period of one (1), two (2), three (3) or six (6) months,
or, subject to Section 2.3, a period of nine (9) or twelve (12) months, as
specified in the Rate Election applicable thereto, beginning on and including
the date specified in such Rate Election (which must be a Business Day), and
ending on but not including the same day of the relevant month as the day on
which it began (e.g., a period beginning on the third day of one month shall
end on but not include the third day of another month), or if such month has no
numerically corresponding day, on the last Business Day of such month, and
provided that each Eurodollar Interest Period which would otherwise end on a
day which is not a Business Day shall end on the next succeeding Business Day
(unless such next succeeding Business Day is the first Business Day of a
calendar month, in which case such Eurodollar Interest Period shall end on the
immediately preceding Business Day). No Eurodollar Interest Period may be
elected for any Eurodollar Portion which would extend past the Maturity Date of
the Loan of which the Eurodollar Portion is a part.
7
<PAGE> 12
"Eurodollar Margin" means, on any date, with respect to each
Eurodollar Portion of a Revolving Loan, the number of basis points per annum
set forth below based on the Applicable Rating Level on such date:
<TABLE>
<CAPTION>
Applicable Eurodollar
Rating Level Margin
------------ ----------
<S> <C>
Level I 18.0 b.p.
Level II 20.0 b.p.
Level III 23.0 b.p.
Level IV 28.0 b.p.
Level V 45.0 b.p.
</TABLE>
Changes in the Eurodollar Margin will occur automatically without prior notice.
Administrative Agent will give notice promptly to Borrower and the Lenders of
changes in the Eurodollar Margin.
"Eurodollar Portion" means the unpaid principal balance of a Loan
which Borrower designates as such in a Rate Election.
"Eurodollar Rate" means, with respect to each particular Eurodollar
Portion within a Tranche and with respect to the related Eurodollar Interest
Period, the rate of interest per annum (stated to the nearest 10,000ths of 1%)
determined by Administrative Agent in accordance with its customary general
practices to be representative of the rates (stated to the nearest 10,000ths of
1%) at which deposits of dollars are offered to Administrative Agent at
approximately 10:00 a.m., Dallas, Texas time, two Business Days prior to the
first day of such Eurodollar Interest Period by prime banks in the interbank
eurocurrency market which have been selected by Administrative Agent in
accordance with its customary general practices for delivery on the first day
of such Eurodollar Interest Period in an amount equal or comparable to the
amount of Administrative Agent's Eurodollar Portion within such Tranche and for
a period of time equal or comparable to the length of such Eurodollar Interest
Period. The Eurodollar Rate determined by Administrative Agent with respect to
a particular Eurodollar Portion shall be fixed at such rate for the duration of
the associated Eurodollar Interest Period. If Administrative Agent is unable
so to determine the Eurodollar Rate for any Eurodollar Portion, Borrower shall
be deemed not to have elected such Eurodollar Portion.
"Eurodollars" is defined in Section 2.18.
"Event of Default" has the meaning given it in Section 6.1.
"Exchangeable Shares" has the meaning set forth in the Proxy.
8
<PAGE> 13
"Executive Officer" means any individual duly elected to and holding
one or more of the following offices of Borrower: President, Chief Executive
Officer, Chief Financial Officer, Executive Vice President or Senior Vice
President.
"Existing Credit Agreement" has the meaning given it in Recital A.
"Facility Amount" means the aggregate amount of the Commitments (which
amount shall initially be $1,075,000,000), as such amount may be reduced from
time to time pursuant to the terms of this Agreement.
"Facility Fee Rate" means, on any date that a facility fee is due
pursuant to Section 2.7, the number of basis points per annum set forth below
based on the Applicable Rating Level on such date:
<TABLE>
<CAPTION>
Applicable Facility Fee Rate
Rating Level Margin
------------ ------
<S> <C>
Level I 9.0 b.p.
Level II 10.0 b.p.
Level III 12.0 b.p.
Level IV 14.0 b.p.
Level V 20.0 b.p.
</TABLE>
Changes in the Facility Fee Rate will occur automatically without prior notice.
Administrative Agent will give notice promptly to Borrower and the Lenders of
changes in the Facility Fee Rate.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day, as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to
Administrative Agent on such day on such transactions as determined by
Administrative Agent.
"Fiscal Quarter" means a three-month period ending on March 31, June
30, September 30 or December 31 of each year.
"Fiscal Year" means a twelve-month period ending on December 31 of
each year.
9
<PAGE> 14
"Foreign Restricted Subsidiary" means any Restricted Subsidiary of the
Borrower organized under the laws of any jurisdiction other than the United
States or any state thereof.
"GAAP" means those generally accepted accounting principles and
practices which are recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor) and which, in the case of
Borrower and its Consolidated Subsidiaries, are applied for all periods after
the date hereof in a manner consistent with the manner in which such principles
and practices were applied to the Updated Financial Statements (except for
changes concurred with by Borrower's independent public accountants). If any
change in any accounting principle or practice is required by the Financial
Accounting Standards Board (or any such successor) in order for such principle
or practice to continue as a generally accepted accounting principle or
practice, all reports and financial statements required hereunder with respect
to Borrower or with respect to Borrower and its Consolidated Subsidiaries must
be prepared in accordance with such change. In the event any changes in GAAP
materially affect the calculation of Borrower's EBITDAX to Consolidated
Interest Expense Ratio or Consolidated Total Funded Debt to Total
Capitalization as defined and described in Sections 5.3 (a) and (b),
respectively, Borrower and Lenders agree to enter into good faith negotiations
for an agreement to revise such tests to take into account such changes in
GAAP; until Borrower and Majority Lenders have entered into such an agreement,
such financial calculation shall continue to be made in accordance with GAAP as
in effect immediately preceding the date of such change.
"Governmental Authority" means any national, state, county or
municipal government, domestic or foreign, any agency, board, bureau,
commission, court, department or other instrumentality of any such government,
or any arbitrator in any case which has jurisdiction over any of the Lenders,
Borrower, its Subsidiaries or any properties of Borrower or its Subsidiaries.
"Guaranty" means (i) any guaranty substantially in the form of Exhibit
B, with appropriate insertions and deletions, executed or to be executed by any
Restricted Subsidiary, as from time to time amended, modified, or supplemented,
or (ii) any Guaranty delivered pursuant to Section 3.1(a)(1) of the Agreement
as from time to time amended, modified, or supplemented, as the case may be.
"Incumbent Directors" has the meaning given in Section 6.1(i).
"Issuing Bank" means any Lender which in its sole discretion agrees to
be and is designated by Borrower and accepted by the Administrative Agent to
issue one or more Letters of Credit in its capacity as an issuer of Letters of
Credit hereunder, and its successors and assigns in such capacity.
"LC Application" means any application for a Letter of Credit
hereafter made by Borrower to an Issuing Bank.
"LC Conditions" has the meaning given it in Section 2.12.
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<PAGE> 15
"LC Obligations" means, at the particular time in question, the sum of
the Matured LC Obligations plus the aggregate amounts which any Issuing Bank or
Lender might be called upon to advance under all then outstanding Letters of
Credit.
"Letter of Credit" means (i) any letter of credit issued by an Issuing
Bank upon the application of Borrower and (ii) each letter of credit
outstanding on the Effective Date listed on Schedule 6 hereto which letters of
credit will be deemed to be issued and outstanding under this Agreement as of
the Effective Date. Each Letter of Credit shall be classified by Issuing Bank
as a "Commercial" Letter of Credit or a "Standby" Letter of Credit, in
accordance with the laws and regulations applicable to Issuing Bank from time
to time and in accordance with Issuing Bank's customary practices at such times
for reporting to regulatory authorities.
"Lenders" means each party hereto (other than Borrower), including,
without limitation, NationsBank of Texas, N.A. in its capacity as a Lender
hereunder rather than as Administrative Agent or Collateral Agent, CIBC Inc. in
its capacity as a Lender hereunder rather than as Documentation Agent, Morgan
Guaranty Trust Company of New York in its capacity as a Lender hereunder rather
than as Documentation Agent, The Chase Manhattan Bank in its capacity as a
Lender hereunder rather than as Syndication Agent, the Co-Agents in their
capacity as Lenders hereunder rather than as Co- Agents, and the successors and
assigns of each as holder of a Note.
"Lien" means, any lien, mortgage, security interest, pledge, deposit,
production payment, encumbrance, rights of a vendor under any title retention
or conditional sale agreement or lease or other arrangement substantially
equivalent thereto.
"Loan" means any of a Revolving Loan, Competitive Bid Advance or Swing
Line Advance, as the context requires.
"Loan Commitment" means, with respect to each Lender, the amount set
forth as such Lender's Loan Commitment opposite the name of such Lender in the
column headed "New Commitment" or otherwise indicated on Schedule 1 attached
hereto (or, if such Lender is an assignee, the amount of its Loan Commitment
set forth in the assignment pursuant to which it became a Lender) as such
amount may be reduced or increased from time to time pursuant to any assignment
to which it is a party or otherwise pursuant to the terms of this Agreement.
"Loan Commitment Period" means the period from and including the date
hereof until and including the Maturity Date (or, if earlier, the day on which
the Loan Notes first become due and payable in full or the Loan Commitments are
terminated upon notice by Administrative Agent to Borrower pursuant to Section
6.1).
"Loan Documents" means this Credit Facility Agreement, as the same may
have been or may be amended from time to time hereafter, the Notes, the LC
Applications, the Letters of Credit, the Swing Line Participation Certificate,
the Guaranties, the Disclosure Schedule, the
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<PAGE> 16
Security Instruments, the agreements with the Managing Agents referred to in
Section 2.8, any amendments to any of the foregoing, and all other agreements,
certificates, notices and disclosures at any time executed or certified by a
Designated Officer of and on behalf of a Designated Entity and delivered by
such Designated Entity or such Designated Officer in connection herewith or
therewith (exclusive of term sheets, commitment letters, correspondence and
similar documents used in the negotiation hereof or thereof).
"Loan Note" has the meaning given it in Section 2.1(c).
"Majority Lenders" means Lenders whose aggregate Percentage Shares
exceed 50%.
"Managing Agents" means Administrative Agent, each Documentation Agent
and the Syndication Agent hereunder and their successors and assigns in such
capacities.
"Margin Regulations" means, as applicable, Regulations G, U and X of
the Board of Governors of the Federal Reserve System, as from time to time in
effect.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the financial condition of Borrower and its Subsidiaries taken as a whole, (b)
the ability of Borrower and its Subsidiaries taken as a whole to operate their
respective businesses, (c) the ability of Borrower to meet its obligations
under the Loan Documents on a timely basis or (d) the ability of Designated
Entities taken as a whole to meet their obligations under the Loan Documents on
a timely basis; provided, however, that a material adverse effect that is
limited to an Unrestricted Subsidiary shall not (i) be a Material Adverse
Effect or (ii) be included in the determination of whether a Material Adverse
Effect shall have occurred or shall be expected to occur.
"Matured LC Obligations" means all amounts paid by Issuing Bank or any
Lender on drafts or demands for payment drawn or made under any Letter of
Credit (or under or in connection with any LC Application) which have not been
repaid to the Issuing Bank or Lender (with the proceeds of a Revolving Loan
Advance or otherwise).
"Maturity Date" means the earlier of (a) August 7, 2002 and (b) the
date on which the Loan Commitment of each Lender is reduced to zero or
terminated.
"Maximum Lawful Rate" has the meaning given it in Section 8.6.
"Mesa" means Mesa, Inc., a Delaware corporation.
"Moody's" means Moody's Investors Service, Inc. and any successor
thereto that is a nationally-recognized rating agency.
"Section 956" has the meaning given it in Section 6.1(k).
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<PAGE> 17
"Note" means any Loan Note, Swing Line Note or Competitive Bid Note.
"Notice Period" has the meaning given it in Section 6.4.
"Obligations" means all Debt from time to time owing by any of
Designated Entities to any Agent or any Lender under or pursuant to any of the
Loan Documents, including, without limitation, all LC Obligations, Swing Line
Obligations and Competitive Bid Obligations. "Obligation" means any part of
the Obligations.
"Outside Debt" means (i) Pioneer USA's $150,000,000 8 7/8% Senior
Notes due 2005 which obligations thereunder will be transferred to Borrower
pursuant to the Restructuring, (ii) Pioneer USA's $150,000,000 8 1/4% Senior
Notes due 2007 which obligations thereunder will be transferred to Borrower
pursuant to the Restructuring, (iii) Mesa's 10 5/8% Senior Subordinated Notes
due 2006 which obligations thereunder will be transferred to Borrower pursuant
to the Restructuring, and (iv) Mesa's 11 5/8% Senior Subordinated Discount
Notes due 2006 which obligations thereunder will be transferred to Borrower
pursuant to the Restructuring..
"P&P Petroleum" means Parker & Parsley Petroleum Company, a Delaware
corporation.
"Percentage Share" means, with respect to any Lender (a) when used in
Section 2.1 or 2.3, in any Request for Advance or when no Loans (other than
Swing Line Advances or Competitive Bid Advances, if applicable) are outstanding
hereunder, the percentage set forth opposite such Lender's name on Schedule 1
to this Agreement, or in documents of assignment delivered pursuant to Section
8.8, as such percentage may be adjusted from time to time by such assignment
documents, and (b) when used otherwise, the percentage equal to the unpaid
principal balance of such Lender's Loans, other than Swing Line Advances and
Competitive Bid Advances, at the particular time in question divided by the
aggregate unpaid principal balance of all Loans of all Lenders, other than
Swing Line Advances and Competitive Bid Advances, at such time.
"Permitted Liens" means (a) Liens for taxes, assessments or other
governmental charges or levies if the same shall not at the particular time in
question be due and delinquent or (if foreclosure, distraint, sale or other
similar proceedings shall not have been commenced or, if commenced, shall have
been stayed) are being contested in good faith and by appropriate proceedings,
and if the subject Borrower shall have set aside on its books such reserves
(segregated to the extent required by sound accounting practices) as may be
required by GAAP or otherwise determined by the Board of Directors of Borrower
to be adequate with respect thereto; (b) Liens of carriers, warehousemen,
mechanics, laborers, materialmen, landlords, vendors, workmen, and operators
arising in the ordinary course of business or incident to the exploration,
development, operations and maintenance of oil, gas and other hydrocarbon
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<PAGE> 18
properties and related facilities and assets, for sums not yet due or being
contested in good faith and by appropriate proceedings, if Borrower shall have
set aside on its books such reserves (segregated to the extent required by
sound accounting practices) as may be required by GAAP or otherwise determined
by the Board of Directors of Borrower to be adequate with respect thereto; (c)
Liens incurred in the ordinary course of Designated Entities' respective
businesses in connection with worker's compensation, unemployment insurance and
other social security legislation (other than ERISA); (d) Liens incurred in the
ordinary course of Designated Entities' businesses to secure the performance of
bids, tenders, trade contracts, leases (statutory only), statutory obligations,
surety and appeal bonds, performance and return-of-money bonds and other
obligations of a like nature; (e) Liens, easements, rights-of-way restrictions,
servitudes, permits, conditions, covenants, exceptions, reservations and other
similar encumbrances incurred in the ordinary course of Designated Entities'
businesses or existing on property and not in the aggregate materially
interfering with the ordinary conduct of Designated Entities' businesses; (f)
legal or equitable encumbrances deemed to exist by reason of negative pledges
such as in Section 5.2 of this Agreement or the existence of any litigation or
other legal proceeding and any related lis pendens filing (excluding any
attachment prior to judgment, judgment lien or attachment lien in aid of
execution on a judgment); (g) rights of a common owner of any interest in
property held by any Designated Entity as such common owner; (h) farmout,
carried working interest, joint operating, unitization, royalty, overriding
royalty, sales and similar agreements relating to the exploration or
development of, or production from, oil and gas properties incurred in the
ordinary course of business, (i) Liens arising pursuant to Section 9.319 of the
Texas Uniform Commercial Code or other similar statutory provisions of other
states with respect to production purchased from others; (j) Liens represented
by capital leases permitted under this Agreement; (k) any defects,
irregularities, or deficiencies in title to easements, rights-of-way or other
properties which do not in the aggregate have a Material Adverse Effect; (l)
Liens existing pursuant to the Security Instruments; (m) Liens existing in
favor of Agents and Lenders under the Loan Documents; (n) Liens on assets of a
Subsidiary of Borrower in favor of Borrower or another Restricted Subsidiary;
(o) Liens on any property or assets owned or leased by Borrower or any
Subsidiary existing at the time such property or asset was acquired (or at the
time such Person became a Subsidiary); provided that (1) in the case of the
acquisition of a Subsidiary, such lien only encumbers property or assets of
such Subsidiary immediately prior to or at the time of acquisition by Borrower
of such Subsidiary and (2) Borrower will use its best efforts to eliminate such
Liens in a timely manner; (p) purchase money Liens, so long as such Liens only
encumber property or assets (including any improvements thereon, accessions
thereto or proceeds thereof) acquired with the proceeds of purchase money
indebtedness incurred in connection with such Lien; (q) Liens on the stock or
other ownership interest of or in any Unrestricted Subsidiary; (r) Liens in
renewal or extension of any of the foregoing permitted Liens, so long as
limited to the property or assets encumbered and the amount of indebtedness
secured immediately prior to such renewal or extension; and (s) Liens approved
in writing by or on behalf of the Required Lenders.
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"Person" means an individual, corporation, company, partnership,
association, joint stock company, trust or trustee thereof, estate or executor
thereof, unincorporated organization or joint venture, court or governmental
unit or any agency or subdivision thereof, or any other legally recognizable
entity.
"Pioneer Canada" means Pioneer Natural Resources (Canada) Ltd., a
corporation organized under the laws of the Province of Alberta, Canada.
"Pioneer USA" means Pioneer Natural Resources USA, Inc., a Delaware
corporation.
"Pledge Agreement" means a Pledge Agreement substantially in the form
of Exhibit M hereto, or other form of pledge agreement or deed of mortgage, in
form and substance satisfactory to the Managing Agents and the subject
Designated Entity, pledging an interest in the capital shares or stock of,
partnership interests in, or other ownership interest in, a Restricted
Subsidiary as from time to time amended, modified and supplemented.
"Primary Credit Facility" means the facility for loans and the
issuance of Letters of Credit established pursuant to this Agreement.
"Prior Indebtedness" has the meaning given it in Recital B.
"Proxy" has the meaning given it in Section 4.1(f)(ii).
"Rate Election" has the meaning given it in Section 2.3.
"Rating Agencies" means any or all of S&P or Moody's.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as from time to time in effect.
"Request for Advance" means a written or telephonic request, or a
written confirmation, made by a Borrower which meets the requirements of
Section 2.2.
"Request for Competitive Bid Offer" has the meaning given it in
Section 2.22.
"Request for Swing Line Bid" has the meaning given it in Section
2.5(a).
"Required Lenders" means Lenders whose aggregate Percentage Shares
exceed 66 2/3%.
"Reserve Percentage" means, on any day with respect to each particular
Eurodollar Portion in a Tranche, the maximum reserve requirement, as determined
by Administrative
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<PAGE> 20
Agent (including without limitation any basic, supplemental, marginal,
emergency or similar reserves), expressed as a percentage and rounded to the
nearest 1/100th of 1%, which would then apply to Administrative Agent under
Regulation D or successor regulations issued from time to time by the Board of
Governors of the Federal Reserve System with respect to "Eurocurrency
liabilities" (as such term is defined in Regulation D) equal in amount to
Administrative Agent's Eurodollar Portion in such Tranche, were Administrative
Agent to have any such Eurocurrency liabilities. If such reserve requirement
shall change after the date hereof, the Reserve Percentage shall be
automatically increased or decreased, as the case may be, from time to time as
of the effective time of each such change in such reserve requirement.
"Restricted Payment" means any investment, contribution, loan or
advance of cash to a Person (other than (i) Borrower or (ii) a Subsidiary that
is not an Unrestricted Subsidiary), other than:
(a) prudent short-term investments;
(b) investments, contributions, loans or advances disclosed in the
Updated Financial Statements or in the Disclosure Schedule or
in disclosures made subsequent to the date hereof and
consented to in writing by or on behalf of the Majority
Lenders or otherwise made to effect the Acquisition and the
subsequent restructuring of certain of the Restricted
Subsidiaries, as described in the Acquisition Agreement;
(c) investments, contributions, loans or advances made by any
Designated Entity in the ordinary course of its business; or
(d) contributions made by Borrower to any of its Subsidiaries
arising out of or in respect of Letters of Credit issued
hereunder and used for the general corporate purposes of such
Subsidiary (i) so long as no amounts have been drawn under any
such Letter of Credit or (ii) to the extent that Borrower has
been reimbursed by such Subsidiary for amounts drawn under any
such Letter of Credit.
"Restricted Subsidiary" means each Subsidiary of Borrower that, at the
particular time in question, (i) owns directly or indirectly any material
assets or any interest in any other Restricted Subsidiary and (ii) either (a)
has not been designated as an Unrestricted Subsidiary or (b) has been
redesignated as a Restricted Subsidiary. The Restricted Subsidiaries on the
Effective Date are listed on Schedule 3 attached hereto and each other
Subsidiary of Borrower as of the Effective Date shall be an Unrestricted
Subsidiary. A Restricted Subsidiary shall remain such (even if it no longer
owns directly or indirectly any interest in any of the material assets) until
designated as an Unrestricted Subsidiary pursuant to Section 5.2(i). An
Unrestricted Subsidiary shall remain an Unrestricted Subsidiary unless
redesignated as a Restricted Subsidiary pursuant to the provisions of Section
5.2(i).
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"Restructuring" has the meaning given it in Section 5.2(l).
"Revolving Loan" has the meaning given it in Section 2.1(c).
"Revolving Loan Advance" has the meaning given it in Section 2.1(a).
"S&P" means Standard & Poor's Ratings Group and any successor thereto
that is a nationally-recognized rating agency.
"Security Instruments" shall mean the agreements or instruments
described or referred to in Schedule 5, the Guaranties, the Pledge Agreement,
and any and all other agreements or instruments now or hereafter executed and
delivered by any Designated Entity or any other Person in connection with, or
as security for the payment or performance of, the Notes, LC Obligations, this
Agreement or the Guaranties, as any such instrument or agreement may be
supplemented, amended, renewed, extended or restated from time to time.
"Stock Pledge Release Date" has the meaning given to it in Section
8.16.
"Subsidiary" means, with respect to any Person, any corporation, which
is directly or indirectly (through one or more intermediaries) controlled by or
with respect to which fifty percent (50%) or more of the stock having ordinary
voting power to elect the board of directors is owned by such Person, or any
association, partnership, joint venture, or other non-corporate business
entity, enterprise or organization which is directly or indirectly (through one
or more intermediaries) controlled by, or owned one hundred percent (100%) by,
such Person, provided that associations, joint ventures or other relationships
(a) which are established pursuant to an operating agreement or similar
agreement or which are partnerships for purposes of federal income taxation
only, (b) which are not partnerships (or subject to the Uniform Partnership
Act) under applicable state law, and (c) whose businesses are limited to the
exploration, development and operation of oil, gas or mineral properties and
interests owned directly by the parties in such associations, joint ventures or
relationships, shall not be deemed to be "Subsidiaries" of such Person.
"Swing Line Advances" has the meaning given it in Section 2.4.
"Swing Line Lender" means NationsBank of Texas, N.A., its successors
and assigns.
"Swing Line Note" has the meaning given it in Section 2.5(e).
"Swing Line Obligations" means, at the particular time in question,
the sum of all outstanding Swing Line Advances.
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"Swing Line Participation Certificate" means a Swing Line
Participation Certificate substantially in the form of Exhibit "F".
"Swing Line Rate" has the meaning given it in Section 2.5(a).
"Syndication Agent" means The Chase Manhattan Bank, as Syndication
Agent hereunder and its successors and assigns in such capacity.
"Taxes" has the meaning given it in Section 2.20.
"Termination Event" means (a) the occurrence with respect to any ERISA
Plan of (1) a reportable event described in Sections 4043(b)(5) or (6) of ERISA
or (2) any other reportable event described in Section 4043(b) of ERISA other
than a reportable event not subject to the provision for 30-day notice to the
Pension Benefit Guaranty Corporation pursuant to a waiver by such corporation
under Section 4043(a) of ERISA, or (b) the withdrawal of any Designated Entity
or of any Affiliate of any Designated Entity from an ERISA Plan during a plan
year in which it was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA, or (c) the filing of a notice of intent to terminate any ERISA Plan
or the treatment of any ERISA Plan amendment as a termination under Section
4041 of ERISA, or (d) the institution of proceedings to terminate any ERISA
Plan by the Pension Benefit Guaranty Corporation under Section 4042 of ERISA,
or (e) any other event or condition which might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any ERISA Plan.
"364 Day Credit Facility" means that certain Amended and Restated
Credit Facility Agreement, dated as of December 18, 1997, among Pioneer Natural
Resources Company, as Borrower, NationsBank of Texas, N.A., as Administrative
Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New
York, as Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders party thereto, as such agreement
may be amended, modified or restated from time to time.
"Total Capitalization" means the sum (without duplication) of (i)
Consolidated Total Funded Debt of Borrower and its Subsidiaries, plus (ii)
Consolidated shareholder's equity of Borrower and its Subsidiaries.
"Total Funded Debt" means all Debt of the type referred to in clauses
(a), (b), (c), (d), (g) (excluding Debt of the type referred to in clause (e)
of the definition of "Debt") and (h) of the definition of "Debt".
"Tranche" has the meaning given it in Section 2.3.
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"Unrestricted Subsidiary" means each Subsidiary of Borrower which is
not designated as a Restricted Subsidiary on Schedule 3 attached hereto or is
designated by Borrower as an Unrestricted Subsidiary pursuant to Section
5.2(i).
"Updated Financial Statements" means (a) the audited annual
Consolidated financial statements of P&P Petroleum and its Consolidated
Subsidiaries dated as of December 31, 1996, (b) the audited annual Consolidated
financial statements of Mesa and its Consolidated Subsidiaries dated as of
December 31, 1996, and (c) the unaudited Consolidated financial statements and
unaudited consolidating balance sheets and statements of operations of Borrower
and its Consolidated Subsidiaries prepared in reasonable detail in accordance
with GAAP and dated as of September 30, 1997.
Section 1.2 Exhibits and Schedules. All Exhibits and Schedules
attached to this Agreement are a part hereof for all purposes.
Section 1.3 Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein, the terms defined in
this Agreement which refer to a particular agreement, instrument or document
also refer to and include all renewals, extensions, modifications, amendments
and restatements of such agreement, instrument or document, provided that
nothing contained in this Section shall be construed to authorize or require
any such renewal, extension, modification, amendment or restatement.
Section 1.4 References and Titles. All references in this
Agreement to Exhibits, Schedules, articles, sections, subsections and other
subdivisions refer to the Exhibits, Schedules, articles, sections, subsections
and other subdivisions of this Agreement unless expressly provided otherwise.
Titles appearing at the beginning of any subdivisions are for convenience only
and do not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this
Agreement", "this Primary Credit Facility", "Primary Credit Facility", "this
instrument", "herein", "hereof", "hereby", "hereunder" and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited. The phrases "this section" and "this subsection"
and similar phrases refer only to the sections or subsections hereof in which
such phrases occur. The word "or" is not exclusive, and the word "including"
(in its various forms) means "including without limitation". Pronouns in
masculine, feminine and neuter genders shall be construed to include any other
gender, and words in the singular form shall be construed to include the plural
and vice versa, unless the context otherwise requires.
Section 1.5 Calculations and Determinations. All calculations
under the Loan Documents of interest chargeable with respect to Eurodollar
Portions and Competitive Bid Advances shall be made on the basis of actual days
elapsed (including the first day but excluding the last) and a year of 360
days, subject, however, to the limitations set forth in Section 8.6 hereof.
All other calculations of interest and fees made under the Loan Documents
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shall be made on the basis of actual days elapsed (including the first day but
excluding the last) and a year of 365 or 366 days, as appropriate. Unless
otherwise expressly provided herein or unless Required Lenders otherwise
consent, all financial statements and reports furnished to Administrative Agent
or any other Lender hereunder shall be prepared and all financial computations
and determinations pursuant hereto shall be made in accordance with GAAP.
ARTICLE 2
LOANS AND LETTERS OF CREDIT
Section 2.1 Making the Loans.
(a) Subject to the terms and conditions hereof, each Lender agrees
to make advances on a revolving basis (herein a "Revolving
Loan Advance") to Borrower from time to time on any Business
Day during the Loan Commitment Period, equal to such Lender's
Percentage Share of the aggregate amount of Revolving Loan
Advances requested by Borrower to be made on such day, so long
as the aggregate amount of (i) all Lenders' Revolving Loan
Advances (including any Revolving Loan Advances to be made but
not yet made pursuant to a Request for Advance) outstanding at
any time plus (ii) the LC Obligations of all Lenders at such
time plus (iii) all Swing Line Advances to Borrower plus (iv)
all Lenders' Competitive Bid Advances outstanding at such
time, does not exceed the Facility Amount. Subject to the
terms and conditions hereof, Borrower may borrow, repay and
reborrow Revolving Loan Advances.
(b) No Lender shall be permitted or required to make any Revolving
Loan Advance under this Agreement unless the aggregate of (1)
such Lender's Revolving Loan Advances under this Agreement
(including any Revolving Loan Advances to be made but not yet
made pursuant to a Request for Advance) outstanding at any
time plus (2) such Lender's share of LC Obligations at such
time is less than or equal to the least of (i) such Lender's
Loan Commitment or (ii) such Lender's Percentage Share of the
Facility Amount plus (3) such Lender's participation pursuant
to a Swing Line Participation Certificate in any Swing Line
Advances, if any.
(c) The aggregate amount of all Revolving Loan Advances requested
of all Lenders in any Request for Advance must be an integral
multiple of $1,000,000 which equals or exceeds $10,000,000 or
must equal the least of the unadvanced portion of the
aggregate Loan Commitments of all Lenders or the unadvanced
portion of the Facility Amount. The obligation of Borrower to
repay to each Lender the aggregate amount of all Revolving
Loan Advances made by such Lender to
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Borrower (herein called such Lender's "Revolving Loan"),
together with interest accruing in connection therewith, shall
be evidenced by a single promissory note (herein called such
Lender's "Loan Note") made by Borrower payable to the order of
such Lender in the form of Exhibit A-1 with appropriate
insertions. The amount of principal owing on any Lender's
Loan Note at any given time shall be the aggregate amount of
all Revolving Loan Advances theretofore made by such Lender
minus all payments of principal theretofore received by such
Lender on such Loan Note. Interest on each Loan Note shall
accrue and be due and payable as provided herein and therein.
Section 2.2 Requests for Revolving Loan Advances. Borrower must
give to Administrative Agent not later than 11:00 a.m., Dallas, Texas time, for
same day funding, and not later than 1:00 p.m., Dallas, Texas time, for next
Business Day funding, written notice, or telephonic notice promptly confirmed
in writing, of any requested Revolving Loan Advances, after which
Administrative Agent shall give each other Lender prompt notice thereof. Each
such written request or confirmation must be made in the form and substance of
Exhibit C attached hereto, duly completed (herein called a "Request for
Advance"). Each such telephonic request shall be deemed a representation,
warranty, acknowledgment and agreement by Borrower as to the matters which are
required to be set out in such written confirmation. If all conditions
precedent to a Revolving Loan Advance have been met, each Lender will on the
date requested remit, not later than 1:00 p.m., Dallas, Texas time, for same
day funding, and not later than 11:00 a.m., Dallas, Texas time, the following
Business Day for next Business Day funding, to Administrative Agent at
Administrative Agent's office in Dallas, Texas, or to such other office as
Administrative Agent may specify from time to time by notice to Lenders, the
amount of such Lender's Revolving Loan Advance in immediately available funds,
and upon receipt of such funds, unless to its actual knowledge any conditions
precedent to such Revolving Loan Advances have been neither met nor waived as
provided herein, Administrative Agent shall promptly make the Revolving Loan
Advances available to Borrower. Each Request for Advance shall be irrevocable
and binding on Borrower. Unless Administrative Agent shall have received
prompt notice from a Lender that such Lender will not make available to
Administrative Agent such Lender's Revolving Loan Advance, Administrative Agent
may in its discretion assume that such Lender has made such Revolving Loan
Advance available to Administrative Agent in accordance with this Section and
Administrative Agent may if it chooses, in reliance upon such assumption, make
such Revolving Loan Advance available to Borrower. If and to the extent such
Lender shall not so make its Revolving Loan Advance available to Administrative
Agent, such Lender and Borrower severally agree to pay or repay to
Administrative Agent on demand the amount of such Revolving Loan Advance
together with interest thereon, for each day from the date such amount is made
available to Borrower until the date such amount is paid or repaid to
Administrative Agent, (i) if paid or repaid by Borrower at the interest rate
applicable at the time to the other Revolving Loan Advances made on such date
of such Revolving Loan Advance and (ii) if paid or repaid by such Lender, at
the Federal Funds Rate. The failure of
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any Lender to make any Revolving Loan Advance to be made by it hereunder shall
not relieve any other Lender of its obligation hereunder, if any, to make its
Revolving Loan Advance, but no Lender shall be responsible for the failure of
any other Lender to make any Revolving Loan Advance to be made by such other
Lender.
Section 2.3 Rate Elections. Borrower may from time to time
designate all or any portions of the Loans (including any yet to be made
Revolving Loan Advances which are to be made prior to or at the beginning of
the designated Eurodollar Interest Period but excluding any portions of the
Loans which are required to be repaid prior to the end of the designated
Eurodollar Interest Period and excluding any Competitive Bid Advance and any
Swing Line Advance) as a "Tranche", which term refers to a set of Eurodollar
Portions of the same type with identical Eurodollar Interest Periods and with
each Lender participating in such Tranche in accordance with its Percentage
Share. Without the consent of Required Lenders, Borrower may not make such
election, and Administrative Agent and Lenders shall not be required to give
effect to such election, during the continuance of a Default and Borrower may
make such an election with respect to already existing Eurodollar Portions only
if such election will take effect at or after the termination of the Eurodollar
Interest Period applicable thereto. Each election by Borrower of a Tranche
shall:
(a) Be made in writing in the form and substance of Exhibit D
attached hereto, duly completed, herein called a "Rate
Election";
(b) Specify the aggregate amount of the Loans which Borrower
desires to designate as such Tranche, the first day of the
Eurodollar Interest Period which is to apply thereto, and the
length of such Eurodollar Interest Period; and
(c) Be received by Administrative Agent not later than 10:00 a.m.,
Dallas, Texas time, on the third Business Day preceding the
first day of the specified Eurodollar Interest Period.
Promptly after receiving any such Rate Election which meets the
requirements of this Section, Administrative Agent shall notify each Lender
thereof. Each Rate Election shall be irrevocable. Borrower may not make any
Rate Election which does not specify an Eurodollar Interest Period complying
with the definition of "Eurodollar Interest Period" in Section 1.1, and the
aggregate amount of the Tranche elected in any Rate Election must be
$10,000,000 or a higher integral multiple of $1,000,000. Upon the termination
of each Eurodollar Interest Period the portion of each Loan within the related
Tranche shall, unless the subject of a new Rate Election then taking effect,
automatically become a part of the Base Rate Portion of such Loan and become
subject to all provisions of the Loan Documents governing such Base Rate
Portion. Borrower shall have no more than fifteen (15) Tranches in effect at
any time.
If requested to do so by Borrower through Administrative Agent at
least two (2)
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Business Days before the delivery date of any proposed Rate Election, each
Lender will advise Administrative Agent before 10:00 a.m., Dallas, Texas time,
on the Business Day following receipt of such request as to whether, if
Borrower selects a specified duration of nine (9) or twelve (12) months for the
Eurodollar Interest Period applicable to such proposed Rate Election, such
Lender expects that deposits in dollars with a corresponding term will be
available to it in the relevant market on the first day of such Eurodollar
Interest Period in the amount required to fund the Eurodollar Portion of its
Loan to which such Eurodollar Interest Period would apply. Unless a Lender
responds by such time to the effect that it expects such deposits will be
available to it, Borrower shall not be entitled to select such proposed
duration for such Eurodollar Interest Period.
Each Lender may, if it so elects, fulfill its obligation to fund any
Eurodollar Portion by causing one of its foreign branches or Affiliates (or an
international banking facility created by such Lender) to fund or continue such
Eurodollar Portion; provided, however, that such Eurodollar Portion shall be
deemed to have been made and held by such Lender, and the obligations of the
subject Borrower to repay such Eurodollar Portion shall nevertheless be to such
Lender for the account of such branch, or Affiliate (or international banking
facility). In addition, Borrower hereby consents and agrees that, for purposes
of any determination to be made for purposes of Sections 2.17, 2.18, 2.19 and
2.20, it shall be conclusively assumed that such Lender elected to fund all
Eurodollar Portions by purchasing Dollar deposits in the interbank eurodollar
market of its designated office.
Section 2.4 Swing Line Advances. In addition to borrowings
pursuant to Section 2.1(a) or Section 2.22, Borrower may request Swing Line
Lender to make advances to Borrower on any Business Day (unless Borrower and
Swing Line Lender agree otherwise) during the Loan Commitment Period as
provided in Sections 2.5 and 2.6 (herein called "Swing Line Advances");
provided, however, that (a) at no time shall the outstanding aggregate
principal amount of all Swing Line Advances under this Agreement plus all
"Swing Line Advances" (as defined in the 364 Day Credit Facility), if any,
outstanding under the 364 Day Credit Facility exceed $50,000,000, and (b) at no
time shall the sum of (1) the outstanding aggregate principal amount of all
Swing Line Advances to Borrower, (2) the outstanding aggregate principal amount
of the Revolving Loans, (3) the outstanding aggregate principal amount of LC
Obligations and (4) the outstanding aggregate principal amount of all
Competitive Bid Advances, exceed the Facility Amount.
Section 2.5 Procedure for Swing Line Advances.
(a) No later than 11:00 a.m., Dallas, Texas time, on a Business
Day on which Borrower desires a Swing Line Advance, Borrower
shall transmit to Swing Line Lender and to Administrative
Agent by telecopy a notice in substantially the form of
Exhibit E attached hereto (herein called a "Request for Swing
Line Loan"). Swing Line Lender will specify the rate of
interest per annum which
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will be the fixed rate of interest to be charged for such
Swing Line Advance until maturity (herein called the "Swing
Line Rate").
(b) Swing Line Lender shall wire the Swing Line Advance in
immediately available funds by no later than 1:00 p.m.,
Dallas, Texas time on the date of request for Swing Line
Advance, on such day to Administrative Agent, which shall
deposit such funds to an account designated by Borrower by no
later than 1:15 p.m. on the same day.
(c) Borrower shall repay each such Swing Line Advance on or before
1:00 p.m., Dallas, Texas time, on the following Business Day
or at such other maturity (such date of maturity being no more
than fourteen (14) days after the date of the Swing Line
Advance and no later than the Maturity Date) as is agreed to
by Borrower, Administrative Agent and the Swing Line Lender.
The repayment shall be paid on such date by Borrower (which
payment may be in the form of a Swing Line Advance advanced to
Borrower on that day) to Administrative Agent in immediately
available funds with instructions to Administrative Agent to
forward such proceeds to the Swing Line Lender. Any accrued
and unpaid interest pursuant to Swing Line Advances shall be
paid by Borrower (which payment may be in the form of a Swing
Line Advance advanced to Borrower on that day) to
Administrative Agent in immediately available funds on the
first Business Day of each calendar month with instructions to
Administrative Agent to forward such proceeds to the Swing
Line Lender.
(d) Interest on the Swing Line Advances shall be computed on the
basis of a year of 365 or 366 days and actual days elapsed
(including the first day, but excluding the last day)
occurring in the period for which payable and shall not exceed
Maximum Lawful Rate. Past due principal and interest (to the
extent allowed by law) shall bear interest at the lesser of
the Default Rate or the Maximum Lawful Rate and shall be
payable on demand.
(e) The Swing Line Advances made by the Swing Line Lender shall be
evidenced by a single promissory note of Borrower payable to
the order of the Swing Line Lender in the amount of
$50,000,000 and in substantially the form of Exhibit A-2
attached hereto, with appropriate insertions (herein called a
"Swing Line Note"). The date, amount, Swing Line Rate and
maturity of each Swing Line Advance made by a Lender to
Borrower, and each payment made on account of the principal
thereof, shall be recorded by such Lender on its books.
(f) The Swing Line Advances will be used by Borrower to provide
working capital for the operations of Borrower and its
Subsidiaries and for general business purposes. No Swing Line
Advances shall be used for the purpose of purchasing
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or carrying any Margin Stock in violation of the Margin
Regulations.
(g) The obligation of the Swing Line Lender to make each Swing
Line Advance after timely acceptance by Borrower is further
subject to the conditions contained in Article 3.
Section 2.6 Special Provisions for Swing Line Advances.
(a) Lenders to Make Revolving Loan Advances.
(i) Swing Line Lender, at any time in its discretion,
upon written request to Lenders through Administrative Agent (with a
copy to Borrower), may require each Lender (including the Swing Line
Lender) to make a Revolving Loan Advance, subject to the provisions of
Section 2.1 hereof, in an amount equal to such Lender's Percentage
Share of the outstanding Swing Line Advances. Swing Line Lender shall
deliver such request to Administrative Agent prior to 11:00 a.m.,
Dallas, Texas time, on the Business Day next preceding the date (which
shall be a Business Day) on which such Revolving Loan Advances are to
be made. Promptly upon receipt of any such request, Administrative
Agent shall give notice thereof to Lenders. Each Lender shall make
available its Percentage Share of such Revolving Loans to
Administrative Agent by 11:00 a.m., Dallas, Texas time, on the
requested date for such Revolving Loan Advances. Administrative Agent
shall apply the proceeds of such Revolving Loan Advances to prepay the
Swing Line Advances of the Swing Line Lender; provided, however, that
Administrative Agent shall be obligated to make the proceeds of such
Revolving Loans available only to the extent received by it from
Lenders. All Revolving Loans made pursuant to this subsection shall be
Base Rate Loans.
(ii) In the event Administrative Agent advances proceeds
of any Revolving Loan to Swing Line Lender and one or more of the
Lenders (other than Swing Line Lender) fail to fund all or any portion
of such Revolving Loan Advance immediately upon receipt of notice from
Administrative Agent, then (I) such Lender shall pay directly to
Administrative Agent the amount thereof together with interest thereon
at the Federal Funds Rate, and (II) if not paid by such Bank, the
Swing Line Lender will repay directly to Administrative Agent such
amount as will equal the amount such other Lender(s) failed to fund,
together with interest at the Federal Funds Rate.
(b) Participations in Swing Line Advances.
(i) If, at any time prior to the making of Revolving
Loans pursuant to subsection 2.6(a)(i) hereof, any Event of Default
described in Sections 6.1(h) hereof shall have occurred, each Lender,
on the date such Revolving Loan Advance was to have been made or, if
no request for Revolving Loan Advances had been made
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pursuant to Section 2.6(a)(i) hereof, promptly upon request by the
Swing Line Lender delivered to Administrative Agent, shall purchase an
undivided participation interest in all outstanding Swing Line
Advances in an amount equal to its Percentage Share times the
outstanding amount of such Swing Line Advances. Each Lender (other
than the Swing Line Lender) will transfer immediately to
Administrative Agent for credit to Swing Line Lender, in immediately
available funds, the amount of its participation. Upon receipt
thereof, the Swing Line Lender will deliver to such other Lender a
Swing Line Advance Participation Certificate, dated the date of
receipt of such funds and in the amount of such Lender's
participation.
(ii) Whenever, at any time after the Swing Line Lender has
received from any other Lender such other Lender's participating
interest in a Swing Line Advance, the Swing Line Lender receives any
payment on account thereof, Administrative Agent will distribute to
such other Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender's participating interest
was outstanding and funded); provided, however, that in the event that
any payment received by Swing Line Lender is required to be returned,
such other Lender will return to Swing Line Lender any portion thereof
previously distributed to it.
(c) Acknowledged Privity. Borrower expressly agrees that, in
respect of each Lender's funded participation interest in any Swing Line
Advance, such Lender shall be deemed to be in privity of contract with Borrower
and have the same rights and remedies against Borrower under the Loan Documents
as if such funded participation interest in such Swing Line Advance were a
Revolving Loan.
(d) Unconditional Obligation. Each Lender's obligation to make
Revolving Loan Advances or to purchase participation interests in Swing Line
Advances as provided in this Section shall be absolute and unconditional and
shall not be affected by any circumstance, including, without limitation, (A)
any set-off, counterclaim, recoupment, defense or other right which such Lender
may have against Swing Line Lender, Borrower or any other Person for any reason
whatsoever, (B) the existence of any Default or Event of Default at any time,
(C) the occurrence of any event or existence of any condition that might have a
Material Adverse Effect, or (D) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
Section 2.7 Facility Fee; Amendment Fee. In consideration of
each Lender's commitment to make Revolving Loan Advances and Competitive Bid
Advances, Borrower will pay, or cause the payment, to Administrative Agent for
the account of each Lender an annual facility fee payable to each Lender
determined by applying the Facility Fee Rate to such Lender's Percentage Share
of the Facility Amount as of the date of such payment, payable in arrears
quarterly until the Maturity Date, with the first payment thereof to be January
1, 1998,
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subsequent payments on the first day following each successive calendar quarter
ending on each March, June, September and December, and the final payment
thereof on the Maturity Date. Borrower will pay, or cause the payment, to
Administrative Agent for the account of each Lender a non-refundable amendment
fee payable to each Lender determined by applying the Amendment Fee Rate to
such Lender's Percentage Share of the Facility Amount as of the Effective Date.
Section 2.8 Managing Agents' Fees. In addition to all other
amounts due to the Managing Agents under the Loan Documents, Borrower will pay
the non-refundable annual fees set forth in those certain Fee Letters dated
June 25, 1997.
Section 2.9 Termination and Reduction of Commitments.
(a) Unless previously terminated, the Commitments shall terminate
on the Maturity Date.
(b) Borrower may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $1,000,000 and not less
than $5,000,000 and (ii) Borrower shall not terminate or reduce the Commitments
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.10, the sum of (i) all Lenders' Revolving Loan Advances
(including any Revolving Loan Advances to be made but not yet made pursuant to
a Request for Advance) outstanding at any time plus (ii) the LC Obligations of
all Lenders at such time plus (iii) all Swing Line Advances to Borrower plus
(iv) all Lenders' Competitive Bid Advances outstanding at such time, would
exceed the total Commitments.
(c) Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section at
least two Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by Borrower pursuant to
this Section shall be irrevocable; provided that a notice of termination of the
Commitments delivered by Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice
may be revoked by Borrower (by notice to the Administrative Agent on or prior
to the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments shall be permanent. Each reduction
of the Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments.
Section 2.10 Optional Prepayments. Borrower may, upon notice to
each Lender identical to that required for related borrowings under this
Agreement, from time to time and without premium or penalty, prepay its Notes,
in whole or in part, so long as the aggregate
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amounts of all partial prepayments of principal concurrently paid on such Notes
equals $5,000,000 or any higher integral multiple of $1,000,000 or the
aggregate outstanding balance of the Loans, and so long as Borrower does not
prepay any Revolving Loan Advance, Competitive Bid Advance or Swing Line
Advance except in accordance herewith. Any amounts prepaid pursuant to this
Section shall be in addition to, and not in lieu of, all payments otherwise
required to be paid under the Loan Documents at the time of such prepayment.
Section 2.11 Payments to Lenders. Except as expressly set forth
in Section 2.5(c) with respect to repayment of Swing Line Advances and Section
2.22(b) with respect to repayment of Competitive Bid Advances, Borrower will
make each payment which it owes under the Loan Documents to Administrative
Agent at its principal banking office in Dallas, Texas, or to such other office
as Administrative Agent may specify from time to time by notice to Borrower for
the account of each Lender to whom such payment is owed, without the
application of any setoff, deduction or counterclaim. Each such payment must
be received by Administrative Agent not later than 1:00 p.m., Dallas, Texas
time, on the date such payment becomes due and payable, in lawful money of the
United States of America and in immediately available funds. Any payment
received by Administrative Agent after such time will be deemed to have been
made on the next Business Day. Should any such payment become due and payable
on a day other than a Business Day, the maturity of such payment shall be
extended to the next succeeding Business Day (except, with respect to any
Eurodollar Portion, as may be otherwise required by the definition of
Eurodollar Interest Period), and, in the case of a payment of principal or past
due interest, interest shall accrue and be payable thereon for the period of
such extension as provided in the Loan Document under which such payment is
due.
All payments applied to principal or interest on any Note shall be
applied first to any interest then due and payable, then to principal then due
and payable, and last to any prepayment of principal and interest in compliance
with Section 2.10. Unless otherwise expressly provided, all payments by any
Designated Entity pursuant to this Agreement or any other Loan Document shall
be made by such Designated Entity to Administrative Agent for account of Agents
and Lenders pro rata among Obligations of the same type and, if applicable,
having the same Eurodollar Interest Period or, in the case of Swing Line
Advances or Competitive Bid Advances, the same maturity date.
Section 2.12 Letters of Credit. Subject to the terms and
conditions hereof, Borrower may request Issuing Bank to issue one or more
Letters of Credit, provided that, after taking such Letter of Credit into
account:
(a) the sum of (1) the aggregate principal amount of Revolving
Loans outstanding at such time, (2) the aggregate principal
amount of LC Obligations outstanding at such time, (3) the
aggregate principal amount of outstanding Swing Line Advances
to Borrower and (4) the aggregate principal amount of
outstanding
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Competitive Bid Advances to Borrower, does not exceed the
least of (i) the aggregate of all Lenders' Loan Commitments at
such time or (ii) the Facility Amount;
(b) the aggregate amount of LC Obligations outstanding at such
time after giving effect to such request does not exceed
$50,000,000;
(c) the expiration date of such Letter of Credit is prior to the
Maturity Date, unless otherwise agreed to by all of the
Lenders and the Issuing Bank;
(d) such Letter of Credit is to be used for general corporate
purposes of Borrower or any of its Subsidiaries, subject to
paragraph (e) of this Section;
(e) the terms of such Letter of Credit are acceptable to Issuing
Bank in the reasonable exercise of its discretion; and
(f) all other conditions in this Agreement to the issuance of such
Letter of Credit have been satisfied.
Issuing Bank will honor any such request if the foregoing conditions (a)
through (g) (herein called the "LC Conditions") have been met as of the date of
issuance of such Letter of Credit. Nothing herein shall be interpreted or
deemed to obligate any Agent, other than Administrative Agent, or any Lender to
issue any Letter of Credit hereunder, and the obligation of Administrative
Agent to act as Issuing Bank is subject to paragraphs (a) through (g) of this
Section and to satisfaction of the conditions set forth in Article 3.
Section 2.13 Requesting Letters of Credit. Borrower must make
written application pursuant to an LC Application for any Letter of Credit at
least three (3) Business Days before the date on which Issuing Bank is
requested to issue such Letter of Credit. By making any such written
application Borrower shall be deemed to have represented and warranted that the
LC Conditions and the conditions precedent set forth in Section 3.2 will be met
as of the date of issuance of such Letter of Credit. Each such LC Application
must be made in such form as may mutually be agreed upon by Issuing Bank and
Borrower. No more than two (2) Business Days after the LC Conditions for a
Letter of Credit have been met as described in Section 2.12, Issuing Bank will
issue such Letter of Credit at Issuing Bank's office in Dallas, Texas or at
such other office of which Issuing Bank shall give Borrower written notice. In
the event of a conflict between any provision contained in this Agreement and
any provision contained in any LC Application, the provision contained in this
Agreement shall control.
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Section 2.14 Reimbursement of Letters of Credit.
(a) Reimbursement by Borrower. Each payment of a draft or demand
for payment honored by Issuing Bank under a Letter of Credit
shall constitute a loan to and obligation of Borrower.
Promptly upon receipt of written notice of Issuing Bank's
honoring of a Letter of Credit, Borrower promises to pay to
Issuing Bank, or to Issuing Bank's order at such Issuing
Bank's office or at such other office of which Issuing Bank
shall give Borrower written notice, on demand, in legal tender
of the United States of America, any and all amounts paid by
Issuing Bank under any Letter of Credit, together with
interest on any such amounts from the date payment is made by
Issuing Bank under such Letter of Credit until but not
including the date of the repayment of such amounts to Issuing
Bank, at the Base Rate; provided that if any such payment or
reimbursement shall be reimbursed to Issuing Bank on the date
Issuing Bank makes such payment or disbursement, interest
shall be payable on the reimbursable amount at such rate for
one (1) day. In the event that Borrower fails to pay when due
any Matured LC Obligation owed by it to Issuing Bank,
Administrative Agent may, at its option, and without any
notice or further authorization from Borrower, make, pro rata
on behalf of the Lenders, a Revolving Loan Advance under this
Agreement to Borrower in the amount of such unpaid Matured LC
Obligation (whether or not such amount is less than the
minimum Revolving Loan Advance or would result in the
outstanding Obligations being greater than or equal to the
Facility Amount), and apply the proceeds of such Revolving
Loan Advance to the payment of such Matured LC Obligation.
Borrower hereby expressly requests and irrevocably authorizes
Administrative Agent to do all of the foregoing. Revolving
Loan Advances used to refinance Matured LC Obligations shall
bear interest as provided in this Agreement and in the Loan
Notes. Borrower hereby promises to pay, when and as due, all
present and future levies, costs and charges whatsoever
imposed, assessed, levied or collected on, under or in respect
of this Agreement with respect to any Letter of Credit and any
payments of principal, interest or other amounts made on or in
respect of any thereof (excluding, however, any such levies,
costs and charges imposed on or measured by the net income or
receipts of Issuing Bank). Borrower promises to indemnify
Issuing Bank against, and to reimburse Issuing Bank on demand
for, any of the foregoing levies, costs or charges paid by
Issuing Bank and any loss, liability, claim or expense,
including interest, penalties and legal fees, that Issuing
Bank may incur because of or in connection with the failure of
Borrower to make any such payment of levies, costs or charges
when and as due or any payment of Matured LC Obligations when
and as due.
Borrower's obligation to reimburse Issuing Bank under this
paragraph (a) of this
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Section for payments and disbursements made by Issuing Bank
under any Letter of Credit issued pursuant to this Section
shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or
defense to payment which Borrower may have or have had against
Issuing Bank or any Lender, including, without limitation, any
defense based on the failure of the demand for payment under
such Letter of Credit to conform to the terms of such Letter
of Credit or the legality, validity, regularity or
enforceability of such Letter of Credit; provided, however,
that Borrower shall not be obligated to reimburse Issuing Bank
for any wrongful payment or disbursement made by Issuing Bank
under any Letter of Credit as a result of acts or omissions
constituting gross negligence or willful misconduct on the
part of Issuing Bank or any of its officers, employees or
agents.
(b) Reimbursement by Lenders. Issuing Bank irrevocably agrees to
grant and hereby grants to each Lender, and, each Lender
irrevocably agrees to accept and purchase and hereby accepts
and purchases from Issuing Bank, on the terms and conditions
hereinafter stated, for such Lender's own account and risk an
undivided interest equal to such Lender's Percentage Share of
Issuing Bank's obligations and rights under each Letter of
Credit issued hereunder and the amount of each draft paid by
Issuing Bank thereunder. In the event that Borrower should
fail to pay Issuing Bank on demand the amount of any draft or
other request for payment drawn under a Letter of Credit as
provided in paragraph (a) of this Section, each Lender shall,
before 2:00 p.m., Dallas, Texas time, on the Business Day
Issuing Bank shall have given notice to Lenders of Borrower's
failure to so pay Issuing Bank, if such notice is given by
10:00 a.m., Dallas, Texas time (or on the Business Day
immediately succeeding the day such notice is given after
10:00 a.m., Dallas, Texas time), pay to Issuing Bank at
Issuing Bank's offices, or at such other office of which
Issuing Bank shall have given Lenders written notice, in legal
tender of the United States of America, in same day funds,
such Lender's Percentage Share of the amount of such draft or
other request for payment from Borrower plus interest on such
amount from the date Issuing Bank shall have paid such draft
or request for payment to the date of such payment by such
Lender at the Federal Funds Rate. Each Lender's obligation to
reimburse Issuing Bank pursuant to the terms of this Section
is irrevocable and unconditional; provided, however, that
Lenders shall not be obligated to reimburse Issuing Bank for
any wrongful payment or disbursement made by Issuing Bank
under any Letter of Credit as a result of acts or omissions
constituting gross negligence or willful misconduct on the
part of Issuing Bank or any of its officers, employees,
Affiliates or agents. Whenever, at any time after Issuing
Bank has made payment under any Letter of Credit, and has
received from any Lender its Percentage Share of such payment
in accordance with this subsection, Issuing Bank receives any
payment
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related to such Letter of Credit (whether directly from
Borrower or otherwise, including proceeds of collateral
applied thereto by Issuing Bank), or any payment of interest
on account thereof, Issuing Bank will distribute to such
Lender its Percentage Share thereof; provided, however, that
in the event that any such payment received by Issuing Bank
shall be required to be returned by Issuing Bank, such Lender
shall return to Issuing Bank the portion thereof previously
distributed by Issuing Bank to it. Each Lender shall
indemnify and hold Issuing Bank harmless from and against any
and all losses, liabilities (including, without limitation,
liabilities for penalties), actions, suits, judgments,
demands, damages, costs and expenses (including, without
limitation, attorneys' fees and expenses) resulting from any
failure on the part of such Lender to provide, or from any
delay in providing, in accordance with this paragraph to
Issuing Bank such Lender's Percentage Share of the amount of
any payment or disbursement made by Issuing Bank to settle its
obligations under any draft drawn under any Letter of Credit.
(c) Cash Collateral Upon Event of Default. Upon the occurrence of
any Default or Event of Default and the acceleration of the
maturity of the Loans, an amount equal to the amount of the
aggregate contingent liability of Issuing Bank and Lenders in
connection with each Letter of Credit then in effect shall be
deemed (as between Lenders and Borrower) to have been paid or
disbursed by Issuing Bank and Lenders under such Letter of
Credit (notwithstanding that such amount may not in fact have
been so paid or disbursed), and Borrower shall be immediately
obligated to pay to Administrative Agent for the pro rata
benefit of Lenders in accordance with their respective
Percentage Shares, the amount so deemed to have been so paid
or disbursed, which payment shall be made by depositing Cash
Collateral with Administrative Agent in accordance with the
provisions of paragraph (d) of this Section.
(d) Procedures for Depositing and Returning of Cash Collateral.
Any cash collateral amounts received by Administrative Agent
pursuant to the provisions of paragraph (c) of this Section
(the "Cash Collateral") shall be deposited in a separate
interest bearing cash collateral account maintained at the
offices of Administrative Agent or another Lender designated
by Administrative Agent under the sole dominion and control of
Administrative Agent and shall be retained by Administrative
Agent for the pro rata benefit of Lenders in accordance with
their respective Loans and LC Obligations as collateral
security for, and Borrower hereby grants to Administrative
Agent for the benefit of the Lenders a security interest in
such Cash Collateral including all interest accruing thereon
and the proceeds thereof to secure, first the payment of the
Obligations of Borrower under or in connection with its
Letters of Credit, and then the other Obligations of Borrower
under and in connection with this Agreement and the
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other Loan Documents, including all Obligations of Borrower
under its Notes pro rata to each Lender in accordance with its
Loans and Percentage Share of all LC Obligations. All Cash
Collateral delivered to Administrative Agent may be applied by
Administrative Agent from time to time against any of
Borrower's reimbursement Obligations with respect to any
Letter of Credit as to which a draw is made. If and to the
extent that the Default or Event of Default giving rise to the
Required Lenders' demand for Cash Collateral has been cured to
the reasonable satisfaction of Required Lenders and the
acceleration of the Loans has been rescinded and annulled
pursuant to Section 6.3 or (a) all Obligations of Borrower
have been fully paid and satisfied, (b) no Letters of Credit
remain outstanding and (c) Lenders' Commitments have
terminated, Administrative Agent shall promptly return to
Borrower, upon Borrower's request therefor, all amounts
previously paid to Administrative Agent pursuant to paragraph
(c) of this Section and not theretofore returned by
Administrative Agent to Borrower or applied by Administrative
Agent to reduce amounts payable by Borrower to Lenders under
or with respect to the Letters of Credit or other amounts due
to Lenders or Agents hereunder or under the other Loan
Documents.
Section 2.15 Letter of Credit Fees. In consideration of Issuing
Bank's issuance of any Letter of Credit and each other Lender's agreement to
purchase a risk participation therein, Borrower agrees to pay to Administrative
Agent:
(a) a letter of credit fronting fee for the account of the Issuing
Bank with respect to such Letter of Credit upon issuance of
each Letter of Credit in an amount equal to the greater of (x)
$500 or (y) one- eighth of one percent (1/8 of 1%) per annum
calculated on the face amount thereof; and
(b) a letter of credit fee for the account of Lenders, to be
distributed to Lenders ratably in accordance with their
Percentage Shares, calculated on the face amount of each
Letter of Credit in the amount of the applicable Eurodollar
Margin, payable quarterly in arrears and at the expiration or
termination of each Letter of Credit.
Section 2.16 Capital Reimbursement. If either (a) the
introduction or implementation of, or the compliance with, or any change in, or
in the interpretation of, any law, rule or regulation, or (b) the introduction
or implementation of or the compliance with any request, directive or guideline
from any central bank or Governmental Authority (whether or not having the
force of law) affects or would affect the amount of capital required to be
maintained by any Lender or any corporation controlling any Lender, then, upon
demand by such Lender, Borrower will immediately pay to Administrative Agent
for the benefit of such Lender, from time to time as specified by such Lender,
such additional amount which such Lender shall determine to be appropriate to
compensate such Lender or any corporation controlling such
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Lender in light of such circumstances, to the extent that such Lender
reasonably determines that, because of the existence of such circumstances, the
amount of any such capital would be increased or the rate of return on any such
capital would be reduced, in whole or in part, by or as a consequence of the
existence of such Lender's Commitments, its Loans, its Percentage Share of LC
Obligations, and its other commitments under this Agreement to Borrower,
subject to the provisions of Section 2.21.
Section 2.17 Increased Cost of Eurodollar Portions. If any
applicable domestic or foreign law, treaty, rule, directive or regulation
(whether now in effect or hereinafter enacted or promulgated, including
Regulation D) or any interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof (whether or not having the force of law):
(a) shall change the basis of taxation of payments to any Lender
of any principal, interest, or other amounts attributable to
any Eurodollar Portion of its Loans, its Percentage Share of
LC Obligations or its participation in any Swing Line Advances
or its Competitive Bid Advances or otherwise due under this
Agreement in respect of any Eurodollar Portion of its Loans or
its participation in any Swing Line Advances or Competitive
Bid Advances (other than taxes imposed on the overall net
income of such Lender or any lending office of such Lender by
any jurisdiction in which such Lender or any such lending
office is located);
(b) shall change, impose, modify, apply or deem applicable any
reserve, special deposit or similar requirements in respect of
any Eurodollar Portion of any Lender (excluding those for
which such Lender is fully compensated pursuant to adjustments
made in the definition of Adjusted Eurodollar Rate) or against
assets of, deposits with or for the account of, or credit
extended by, such Lender; or
(c) shall impose on any Lender, the certificate of deposit market
or the interbank eurocurrency deposit market any other
condition affecting any Eurodollar Portion;
and the result of any of the foregoing (a) through (c) is to (1) increase the
cost to any Lender of funding or maintaining any Eurodollar Portion, any
participation in any Swing Line Advance or any Competitive Bid Advance, as the
case may be, or (2) to reduce the amount of any sum receivable by any Lender in
respect of any Eurodollar Portion, Swing Line Advance or Competitive Bid
Advance, as the case may be, by an amount reasonably deemed by such Lender to
be material; then (i) such Lender shall promptly notify Administrative Agent
and Borrower in writing of the happening of such event, (ii) Borrower shall
thereafter upon demand pay to Administrative Agent for the account of such
Lender such additional amount or amounts as will compensate such Lender for
such additional cost or reduction, subject to the
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provisions of Sections 2.21 and 2.19, and (iii) Borrower may elect, by giving
to Administrative Agent and Lender not less than three (3) Business Days'
notice, to convert all (but not less than all) of any such Eurodollar Portion
into a part of the Base Rate Portion.
Section 2.18 Availability. If (a) any change in applicable laws,
treaties, rules or regulations or in the interpretation or administration
thereof in any jurisdiction whatsoever, domestic or foreign, shall make it
unlawful or impracticable for any Lender to fund or maintain Eurodollar
Portions, or shall materially restrict the authority of any Lender to purchase
or take offshore deposits of dollars ("Eurodollars"), or to issue Letters of
Credit or fund its Percentage Share of LC Obligations, or (b) any Lender
determines that matching deposits appropriate to fund or maintain any
Eurodollar Portion are not available to it, or (c) any Lender determines that
the formula for calculating the Adjusted Eurodollar Rate does not fairly
reflect the cost to such Lender of making or maintaining loans based on such
rates, then, upon notice by such Lender to Administrative Agent and to
Borrower, Borrower's right to elect Eurodollar Portions or to apply for Letters
of Credit shall be suspended to the extent and for the duration of such
illegality, impracticability, restriction or condition, and all Eurodollar
Portions (or portions thereof) which are then outstanding or are then the
subject of any Rate Election and which cannot lawfully or practicably be
maintained or funded shall immediately become or remain part of the Base Rate
Portions of such Lender's Loan, subject to the provisions of Sections 2.21 and
2.19. Borrower agrees to indemnify Administrative Agent and each Lender and
hold Administrative Agent and each Lender harmless against all costs, expenses,
claims, penalties, liabilities and damages which may result from any such
change in law, treaty, rule, regulation, interpretation or administration,
subject to the provisions of Section 2.21.
Section 2.19 Funding Losses. In addition to its other obligations
hereunder, subject to the provisions of Section 2.21, Borrower shall indemnify
each Lender against, and reimburse each Lender on demand for, any loss or
expense incurred or sustained by such Lender, determined as provided in this
Section, as a result of (a) any payment or prepayment (whether authorized or
required hereunder or otherwise) of all or a portion of a Eurodollar Portion of
Borrower on a day other than the day on which the applicable Eurodollar
Interest Period ends, (b) any payment or prepayment, whether required hereunder
or otherwise, of a Loan of Borrower made after the delivery, but before the
effective date, of a Rate Election, if such payment or prepayment prevents such
Rate Election from becoming fully effective, (c) the failure of any Revolving
Loan Advance or Swing Line Advance or Competitive Bid Advance to be made to
Borrower or of any Rate Election of Borrower to become effective due to any
condition precedent to a Revolving Loan Advance or Swing Line Advance or
Competitive Bid Advance not being satisfied, due to the inability of
Administrative Agent (acting reasonably and in accordance with Section 2.18) to
determine a Eurodollar Rate for a Eurodollar Portion of Borrower or due to any
other action or inaction of any Designated Entity, (d) any conversion (whether
authorized or required hereunder or otherwise) of all or any portion of any
Eurodollar Portion of Borrower into a Base Rate Portion or into a different
Eurodollar
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Portion on a day other than the day on which the applicable Eurodollar Interest
Period ends, (e) any payment or prepayment of all or a portion of a Swing Line
Advance to Borrower on a day other than the maturity date for such Swing Line
Advance or (f) any payment or prepayment of all or a portion of a Competitive
Bid Advance on a day other than the maturity date for such Competitive Bid
Advance.
Upon the occurrence of an event as described in subsections (a)
through (f) of this Section, the method to be used by each Lender to calculate
the loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund or maintain Eurodollar
Portions of Revolving Loan Advances, Swing Line Advances or Competitive Bid
Advances, as the case may be, is as follows:
Funding Loss = P x (F-R) x D/360
P = principal amount of payment, prepayment,
conversion, non-borrowing or non-effective
Rate Election
F = Eurodollar Rate or Swing Line Rate or
Competitive Bid Rate, as the case may be
(adjusted for Reserve Percentage), utilized
in the calculations of the Eurodollar Rate or
Swing Line Rate or Competitive Bid Rate, as
the case may be, on the Eurodollar Portion or
Swing Line Advance or Competitive Bid Advance
which is being paid, prepaid, converted, not
borrowed or not subject to effective Rate
Election
R = reinvestment rate (as hereinafter defined)
D = number of days from the date of the payment,
prepayment, conversion, non-borrowing or
non-effectiveness until the day on which the
Eurodollar Interest Period of the Eurodollar
Portion ends or the Swing Line Advance or
Competitive Bid Advance matures
Reinvestment rate as it is used herein will be equal to the Eurodollar Rate,
adjusted for the Reserve Percentage quoted to such Lender, or the Swing Line
Rate or Competitive Bid Rate that would be quoted by such Lender, as the case
may be, effective for the date on which the payment, prepayment, conversion,
non-borrowing or non-effectiveness occurs. For purposes of determining the
reinvestment rate for purposes of this Section, the Eurodollar Rate will be the
quote for either one (1) month, two (2) months, three (3) months, six (6)
months, nine (9) months or twelve (12) months, the Competitive Bid Rate will be
the quote for a number of days between seven (7) and 360, and the Swing Line
Rate will be the quote for a number of days between one (1) and fourteen (14),
whichever most closely approximates (but which may contain more or fewer days
than) the number of days from the date of the payment, prepayment, conversion,
non-borrowing or non-effectiveness until the last day of the relevant
Eurodollar Interest Period or the scheduled maturity, as the case may be, of
the Eurodollar
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Portion, Competitive Bid Advance or Swing Line Advance, as the case may be, in
respect of which the payment, prepayment, conversion, non-borrowing or
non-effectiveness occurs; provided that if such number of days in respect of a
Eurodollar Rate is the midpoint between two such periods, such rate will be the
lower of the two rates for such periods.
Section 2.20 Taxes. All payments by Borrower of principal of,
and interest on, the Loans, the LC Obligations and all other amounts payable
hereunder shall be made free and clear of and without deduction for any present
or future income, excise, stamp, or franchise taxes and other taxes, fees,
duties, withholdings or other charges of any nature whatsoever imposed by any
taxing authority, but excluding franchise taxes and taxes imposed on or
measured by any Lender's net income or receipts (such non-excluded items being
called "Taxes"). In the event that any withholding or deduction from any
payment to be made by Borrower hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then, subject to the
provisions of Section 2.21, Borrower will:
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to Administrative Agent an official receipt
or other documentation satisfactory to Administrative Agent
evidencing such payment to such authority; and
(c) pay to Administrative Agent for the account of the applicable
Lender(s) such additional amount(s) as is necessary to ensure
that the net amount actually received by each Lender will
equal the full amount such Lender would have received had no
such withholding or deduction been required and Borrower
hereby acknowledges that it is not entitled to and will not
seek recovery or restitution of any amount due to any of the
Lenders or Agents and paid by Borrower pursuant to this clause
(c) or pursuant to the next sentence.
If any Taxes are directly asserted against any Agent or any Lender with respect
to any payment received by such Agent or such Lender hereunder, such Agent or
such Lender may pay such Taxes and, if paid in good faith, Borrower will
promptly pay such additional amounts to Administrative Agent for the account of
such Lender or Agent (including any penalties, interest or expenses) as is
necessary in order that the net amount received by such person after the
payment of such Taxes (including any taxes on such additional amount) shall
equal the amount such person would have received had no such Taxes been
asserted, subject to the provisions of Section 2.21.
Borrower shall pay all stamp, transaction, registration and similar
taxes (including financial institutions' duties, debit taxes or other taxes
payable by return and taxes passed on to any Lender or Agent by a bank or
financial institution (collectively "Stamp Taxes") and, if
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Borrower fails to pay any such charges or taxes after reasonable notice from
any such Lender or Agent, fines and penalties) which may be payable or
determined to be payable in relation to the execution, delivery, performance or
enforcement of this Agreement or any Loan Document or any other transaction
contemplated by any Loan Document to which Borrower is a party. Borrower
hereby indemnifies each Lender and Agent against any liability resulting from
delay or omission to pay such charges or taxes except to the extent the
liability results from failure by the relevant Lender or Agent to pay any such
tax after having been delivered funds to do so by Borrower or to the extent
such liability is for fines and penalties resulting from such Lender's or
Agent's failure to provide reasonable notice to Borrower as provided herein.
If Borrower fails to pay any Taxes or Stamp Taxes when due to the
appropriate taxing authority or fails to remit to Administrative Agent, for the
account of the respective Lenders, the required receipts or other required
documentary evidence, Borrower shall indemnify Lenders for any Taxes, interest
or penalties that may become payable by any Lender as a result of any such
failure, subject to the provisions of Section 2.21. For purposes of this
Section, a distribution hereunder by Administrative Agent or any Lender to or
for the account of any Lender or Agent shall be deemed a payment by the subject
Borrower.
Borrower waives any statutory right to recover from any Agent or any
Lender any amount due to any such Agent or Lender and paid by Borrower under
this Section.
On or prior to the first date on which interest or fees are payable
hereunder for the account of any Lender, each Lender that is organized under
the laws of a jurisdiction other than the United States shall execute and
deliver to Administrative Agent, three (3) or more (as Administrative Agent may
reasonably request) United States Internal Revenue Service Forms 1001 or 4224
or such other forms or documents (or successor forms or documents),
appropriately completed, as may be applicable to establish the extent, if any,
to which a payment to such Lender is exempt from withholding or deduction of
Taxes. Each Lender which so delivers a Form 1001 or 4224 further undertakes to
deliver to Administrative Agent three (3) additional copies of such form (or a
successor form) on or before the date that such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by Administrative Agent, in
each case certifying that such Lender is entitled to receive payments from
Borrower under this Agreement and the Notes without deduction or withholding of
any United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms of the type previously delivered inapplicable or which would prevent
such Lender from duly completing and delivering such form with respect to it
and such Lender advises Administrative Agent that it is not capable of
receiving such payments on the basis reflected in such previously delivered
form without any deduction or withholding of United States federal income tax.
Administrative Agent shall provide one (1) copy of each
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of such forms or documents so provided to Borrower and Documentation Agent.
Section 2.21 Make-Whole Qualifications. Each Lender's claims for
reimbursements, payments, indemnities or otherwise under Sections 2.16, 2.17,
2.18, 2.19 and 2.20 and Borrower's obligation with respect thereto, shall be
limited and qualified by and subject to the following:
(a) Borrower's obligation to pay, satisfy or recognize such claim
shall be limited to costs or losses incurred within one (1)
year immediately prior to any demand or request therefor upon
Borrower;
(b) each Lender's demand for reimbursement, payment or indemnity
from Borrower must be limited to that which is being generally
applied at the time by such Lender for comparable borrowers
and credits subject to credit agreements similar to this
Agreement, but without regard to provisions similar to this
Section;
(c) each Lender which asserts its rights with respect thereto or
which is seeking or imposing such reimbursement, payment or
indemnity shall provide evidence regarding the basis of such
claim and the calculation and application thereof in
reasonable detail and, in determining such amount, each Lender
may use reasonable methods of attribution and averaging;
(d) each Lender which is seeking payment or reimbursement pursuant
to Section 2.20 shall, if so requested by Borrower, use
reasonable efforts (subject to the overall policy
considerations of such Lender) to designate a different
lending office hereunder if to do so will avoid the need for,
or reduce the amount of, any such payment or reimbursement;
provided that, Lender would, in its sole but reasonable
determination, suffer no material economic, legal or
regulatory disadvantage or burden;
(e) Borrower may, in its sole discretion, elect, unless and until
the applicable Lender notifies Borrower that the circumstances
giving rise thereto no longer apply to such Lender, that, to
the extent that a Lender's claims for such reimbursements,
payments or indemnities would be reduced thereby, that subject
to Section 2.19, (1) all Loans to Borrower which would
otherwise be made by such Lender as Eurodollar Portions shall
be made instead as Base Rate Portions (all of which interest
and principal shall be payable as provided herein with respect
to the related Eurodollar Portions of the Lenders), and (2)
after each Eurodollar Portion has been repaid, all payments of
principal which would otherwise would be applied to repay such
Eurodollar Portion shall be applied to repay Base Rate
Portions instead; and
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(f) Borrower may designate a replacement Lender (which may be one
(1) or more of the then existing Lenders hereunder and which
shall be reasonably satisfactory to Administrative Agent) to
purchase the Notes and Percentage Share of LC Obligations, in
each case without recourse, and assume the Commitments and all
other obligations hereunder of any Lender that has suspended
the availability of Eurodollar Portions pursuant to Section
2.18 or that has demanded reimbursement, payment or indemnity
under Sections 2.16, 2.17, 2.18, 2.19 or 2.20, and such Lender
shall be obligated to sell, transfer and deliver all of its
Notes, and Percentage Share of LC Obligations to such
replacement Lender for the outstanding principal amount of
such Notes, plus Lender's Percentage Share of LC Obligations,
plus in each case, accrued interest thereon and such Lender's
portion of accrued but unpaid fees through the date of such
purchase, and permit such replacement lender to assume its
Commitments. Borrower shall be obligated to pay all
additional amounts due to the Lender being replaced pursuant
to Sections 2.16, 2.17, 2.18, 2.19 and 2.20 through the date
of such purchase and assumption; provided, that if the
replacement Lender fails to purchase all such rights and
interests and assume all such Commitments on the specified
date in accordance herewith, Borrower shall continue to be
obligated to pay such amounts to such Lender which was to have
been replaced and provided further that Borrower shall pay any
Taxes or Stamp Taxes, if any, as a result of such transfer.
Section 2.22 Competitive Bid Advances.
(a) In addition to borrowings pursuant to Section 2.1(a) or
Section 2.4, Borrower may request each Lender severally to submit offers
(herein called a "Competitive Bid Offer") to make advances to Borrower on any
Business Day during the Loan Commitment Period as provided in this Section
(herein called "Competitive Bid Advances"); provided, however, that each Lender
may in its sole discretion, but shall have no obligation whatsoever to submit
such offers, and Borrower may, but shall have no obligation to, accept any such
offers.
(b) Procedure for Competitive Bid Advances.
(i) Borrower may request Competitive Bid Advances by
delivering a request for a Competitive Bid Advance to
each Lender (which has indicated to Borrower its
interest in making a Competitive Bid Advance) and
Administrative Agent not later than 9:00 a.m.,
Dallas, Texas time, one (1) Business Day prior to the
proposed borrowing date. Each request for a
Competitive Bid Advance shall be in substantially the
form of Exhibit N hereto (herein called a "Request
for Competitive Bid Offer") and may solicit bids for
Competitive Bid Advances having not more than three
(3) alternative maturity dates and for Competitive
Bid Advances in any
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respective principal amount equal to $10,000,000 or
an integral multiple of $1,000,000 in excess thereof
for each maturity date requested. The maturity date
for each Competitive Bid Advance shall be not less
than fifteen (15) days nor more than 360 days after
the borrowing date therefor (and in any event not
after the Maturity Date).
(ii) Upon receipt of a Request for Competitive Bid Offer,
any Lender that elects, in its sole discretion, to do
so, shall irrevocably offer to make one (1) or more
Competitive Bid Advances at a fixed rate of interest
determined by such Lender in its sole discretion for
each such Competitive Bid Advance. Any such
irrevocable offer shall be made by delivering a
Competitive Bid Offer to Administrative Agent and to
Borrower, before 9:00 a.m., Dallas, Texas time (or,
in the case of a Competitive Bid Offer by
Administrative Agent, before 8:45 a.m., Dallas, Texas
time), on the proposed borrowing date, setting forth
the maximum amount of Competitive Bid Advances for
each maturity date, and the aggregate maximum amount
for all maturity dates, which such Lender would be
willing to make (which amounts may exceed such
Lender's Percentage Share of the Commitments) and the
fixed rate of interest at which such Lender is
willing to make each such Competitive Bid Advance,
which fixed rate of interest may or may not be, in
such Lender's discretion, different for each
Competitive Bid Advance (respectively herein a
"Competitive Bid Rate"). Borrower shall pay to
Administrative Agent a fee of $500 on each day that
Borrower accepts a Competitive Bid Offer.
(iii) The Competitive Bid Offer delivered by each Lender in
response to a Request for Competitive Bid Offer shall
set forth an amount proposed to be loaned by such
Lender for each maturity date requested by Borrower
that is equal to $10,000,000 or an integral multiple
of $1,000,000 in excess thereof. Any Competitive Bid
Offer by any Lender that: (A) does not substantially
conform to the form of Exhibit O hereto, (B) contains
qualifying, conditional or similar language, (C)
proposes terms other than or in addition to those set
forth in the applicable Request for Competitive Bid
Offer or (D) is received by Borrower after the
applicable time specified in this subsection, shall
be rejected by Borrower and Administrative Agent (and
Administrative Agent shall notify the relevant Lender
of such rejection for one or more of the matters
described in the foregoing (A) through (D) by
telephone and telecopy as soon as practicable
thereafter).
(iv) Borrower shall before 10:00 a.m., Dallas, Texas time,
on the proposed
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borrowing date either, in its absolute discretion:
(A) withdraw such Request for Competitive Bid
Offer by giving telephonic notice to that
effect;
(B) accept one (1) or more of the Competitive Bid
Offers by giving telephonic notice to
Administrative Agent (immediately confirmed
by delivery to Administrative Agent by
facsimile transmission of a Bid Acceptance)
of the amount of Competitive Bid Advance(s)
for each relevant maturity date to be made by
the relevant Lender(s) (which amount for each
such maturity date shall be equal to or less
than the maximum amount for such maturity
date specified in the Competitive Bid Offer
of such Lender(s), and for all maturity dates
included in such Competitive Bid Offer shall
be equal to or less than the aggregate
maximum amount specified in such Request for
Competitive Bid Offer for all such maturity
dates) and reject any Competitive Bid Offers
not accepted by Borrower by giving telephonic
notice to Administrative Agent of such
rejection; provided, however, that (1)
Borrower may not accept Competitive Bid
Offers for any maturity date in an aggregate
principal amount in excess of the maximum
principal amount requested in the related
Request for Competitive Bid Offer (and
Competitive Bid Advances allocated to a
Lender on a borrowing date for each relevant
maturity date shall be in a principal amount
equal to $10,000,000 or an integral multiple
of $1,000,000 in excess thereof); and (2)
Administrative Agent shall notify the Lender
that submitted a Competitive Bid Offer for
such Business Day of Borrower's decision by
telecopying to each such Lender a copy of the
Bid Acceptance by no later than 12:00 noon,
Dallas, Texas time, on the borrowing date
specified in the Request for Competitive Bid
Offer; or
(C) Borrower may accept or reject any Competitive
Bid Offer(s) in whole or in part; provided
that after giving effect to any such accepted
Competitive Bid Offer(s), the sum of (i) the
aggregate principal amount of the Revolving
Loans and Swing Line Advances outstanding at
such time, (ii) the aggregate principal
amount of LC Obligations outstanding at such
time, and (iii) the aggregate principal
amount of Competitive Bid Advances
outstanding at such time, does not exceed the
Facility Amount.
(v) If Borrower notifies Administrative Agent that a
Request for Competitive
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Bid Offer is withdrawn pursuant to clause (iv) above,
the Competitive Bid Advance requested thereby shall
not be made.
(vi) Each Lender which is to make a Competitive Bid
Advance shall, before 1:00 p.m., Dallas, Texas time,
on the borrowing date specified in the Request for
Competitive Bid Offer applicable thereto, make
available to Administrative Agent in immediately
available funds the amount of each Competitive Bid
Advance to be made by such Lender. Administrative
Agent shall deposit such funds to an account
designated by Borrower by no later than 1:15 p.m.,
Dallas, Texas time, on such date.
(vii) Borrower shall repay to Administrative Agent, for the
account of each Lender which has made a Competitive
Bid Advance, on the maturity date of each Competitive
Bid Advance (such maturity date being that specified
by Borrower for repayment of such Competitive Bid
Advance in the related Request for Competitive Bid
Offer) the then unpaid principal amount of such
Competitive Bid Advance. Borrower shall not have the
right to prepay any principal amount of any
Competitive Bid Advance. If any Lender makes a
Competitive Bid Advance on a day on which Borrower is
to repay all or any part of an outstanding
Competitive Bid Advance from such Lender, if
requested by Borrower, such Lender shall apply the
proceeds of its new Competitive Bid Advance to make
such repayment and, in such instance, only an amount
equal to the difference (if any) between the amount
being borrowed and the amount being repaid shall be
made available by such Lender to Administrative Agent
as provided in Section 2.22(b)(vi), or remitted by
Borrower to Administrative Agent as provided in this
Section 2.22(b)(vii), as the case may be.
(viii) Borrower shall pay interest on the unpaid principal
amount of each Competitive Bid Advance from the
borrowing date to the stated maturity date thereof,
at the rate of interest determined pursuant to clause
(b) (ii) above (calculated on the basis of a 360 day
year for actual days elapsed including the first but
excluding the last), but not in excess of the Maximum
Lawful Rate, payable on the maturity date with
respect to such Competitive Bid Advance and, if such
maturity date is more than 90 days after the date of
making such Competitive Bid Advance, on such
ninetieth day and each ninetieth day occurring after
such ninetieth day until the maturity date. If all
or a portion of the principal of or interest on any
Competitive Bid Advance shall not be paid when due
(whether at the stated maturity, by acceleration or
otherwise), without limiting any rights of any Lender
under this Agreement, (i) such overdue principal
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amount shall bear interest from the date on which
such payment was due (other than on the scheduled
maturity date with respect thereto) at the Default
Rate, but not in excess of the Maximum Lawful Rate,
until paid in full (as well as after as before
judgment) and (ii) such overdue interest shall bear
interest from the date on which payment was due at
the Default Rate, but not in excess of the Maximum
Lawful Rate, until paid in full (as well as after as
before judgment).
(c) The Competitive Bid Advances made by each Lender shall be
evidenced by a single promissory note of Borrower payable to
the order of such Lender substantially in the form of Exhibit
A-3 attached hereto, with appropriate insertions (herein
called a "Competitive Bid Note"). The date, amount,
Competitive Bid Rate and maturity date of each Competitive Bid
Advance made by a Lender to Borrower, and each payment made on
account of the principal thereof, shall be recorded by such
Lender on its books.
(d) The Competitive Bid Advances will be used by Borrower to
provide working capital and for the general business purposes
of Borrower and its Subsidiaries. No Competitive Bid Advances
shall be used for the purpose of purchasing or carrying any
Margin Stock in violation of the Margin Regulations.
(e) The obligation of Lenders to make each Competitive Bid Advance
after timely acceptance by Borrower is further subject to the
conditions contained in Article 3.
(f) Borrower shall not be required to accept Competitive Bid
Offers on the basis of the lowest Competitive Bid Rate
offered, but may in its sole discretion accept any Competitive
Bid Offer regardless of the Competitive Bid Rate(s) offered.
ARTICLE 3
CONDITIONS PRECEDENT TO LENDING
Section 3.1 Initial Conditions Precedent. No Lender has any
obligation to make its first Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance and Issuing Bank has no obligation to issue the first
Letter of Credit (whether or not otherwise agreed to by Issuing Bank) unless:
(a) Administrative Agent shall have received all of the following
with copies for each Lender, at Administrative Agent's office
in Midland, Texas:
(1) This Agreement, the Notes, those Security Instruments
and Guaranties
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listed on Schedule 5 hereto, any other documents
required in connection herewith, each duly executed
and delivered and in form, substance and date
satisfactory to Managing Agents.
(2) The following certificates:
(i) an "Omnibus Certificate" of the Secretary or
an Assistant Secretary and of a Designated
Officer, which shall contain the names and
signatures of the officers of Borrower
authorized to execute Loan Documents and
which shall certify to the truth, correctness
and completeness of the following exhibits
attached thereto: (A) a copy of resolutions
duly adopted by the Board of Directors of
Borrower and in full force and effect at the
time this Agreement is entered into,
authorizing the execution of this Agreement
and the other Loan Documents delivered or to
be delivered in connection herewith and the
consummation of the transactions contemplated
herein and therein, (B) a copy of the charter
documents of Borrower and all amendments
thereto, certified by the appropriate
official of Borrower's jurisdiction of
organization, and (C) a copy of the bylaws or
similar governing documents of Borrower
(provided that, to the extent Borrower has
previously provided Administrative Agent
certified copies of the documents described
in (B) and (C) above, such Omnibus
Certificate may omit such documents, but
shall include a statement that such documents
have not been modified in any respect since
the date last so provided to Administrative
Agent, except as may be specifically noted in
such Omnibus Certificate with appropriate
attachments); and
(ii) a "Compliance Certificate" of a Designated
Officer of Borrower, of even date with such
Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance or issuance of a
Letter of Credit, in which such officer
certifies to the satisfaction of the
conditions set out in Section 3.2(a) and (b)
and that all conditions hereunder have been
satisfied.
(3) A certificate (or certificates) of the due formation,
valid existence and good standing of Borrower in its
jurisdiction of organization, issued by the
appropriate authorities of such jurisdiction.
(4) The favorable opinions of the counsel for Borrower
and the Restricted Subsidiaries, given upon their
express instructions substantially in the
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form set forth as Exhibit H attached hereto.
(5) Documents similar to those specified in Section
3.1(a)(2)(i) and 3.1(a)(3) with respect to each
Restricted Subsidiary which is or will be party to a
Security Instrument on the date hereof.
(6) A certificate of a Designated Officer of Borrower as
to insurance concerning the material assets of
Designated Entities. Lenders agree that Designated
Entities' insurance coverage disclosed on Schedule 4
is acceptable at the date hereof.
(b) Except as disclosed to the Lenders in the Disclosure Schedule
or otherwise in writing prior to the execution hereof and not
objected to by Required Lenders, there shall be no pending or
threatened litigation, action or proceeding against Borrower
or any of its Subsidiaries which, if adversely determined,
could reasonably be expected to have a Material Adverse
Effect.
(c) No event or condition shall have occurred (i) with respect to
Borrower and its Restricted Subsidiaries (other than Chauvco
and its Subsidiaries) since August 8, 1997 and (ii) with
respect to Chauvco and its Subsidiaries since September 30,
1997, which is reasonably expected to result in a Material
Adverse Effect.
(d) After giving effect to such Revolving Loan Advances,
Competitive Bid Advances and Swing Line Advances and Letters
of Credit, Borrower and Lenders shall be in compliance with
the Margin Regulations.
(e) The acquisition by Borrower or any of its Affiliates of
Chauvco (the "Acquisition") shall have been consummated as
contemplated by and pursuant to that certain Combination
Agreement, dated as of September 3, 1997, as amended (the
"Acquisition Agreement"), between Borrower and Chauvco, and
Administrative Agent shall have received (i) satisfactory
evidence of the consummation of such Acquisition and (ii) a
certificate from a Designated Officer of Borrower certifying
that the Acquisition has been consummated.
(f) A certificate of a Designated Officer of Borrower certifying
that (i) all representations and warranties made by any
Designated Entity in this Agreement or any other Loan Document
are true and correct as of the Effective Date and (ii) that
all conditions precedent to the initial Advance contained in
this Agreement or any other Loan Document have been satisfied
as of the Effective Date.
(g) All requisite Governmental Authorities and third parties shall
have approved or
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consented to the Acquisition and all related transactions,
including, without limitation, the issuance, closing and
funding of this Agreement and the facilities thereunder, to
the extent required. All applicable appeal periods shall have
expired and there shall be, in the judgment of the Managing
Agents, in their sole discretion, no governmental or judicial
action, actual or threatened, restraining, preventing or
imposing burdensome conditions on the Acquisition and all
related transactions, including, without limitation, the
issuance, closing and funding of this Agreement and the
facilities thereunder.
(h) Managing Agents shall have received copies of all financial
statements, reports, notices and proxy statements sent by
Borrower to its stockholders and all SEC filings concerning
the Acquisition.
(i) No litigation or administrative proceeding or other legal or
regulatory developments prohibiting or enjoining the
consummation of the Acquisition shall exist.
(j) Exclusive of the Acquisition, no "Event of Default" (as
defined in the Existing Credit Agreement) shall have occurred
and be continuing.
(k) Administrative Agent shall have received copies of (i) the
executed documentation for the 364 Day Credit Facility and
(ii) the executed documentation for the Canadian Credit
Facility.
Section 3.2 Additional Conditions Precedent. No Lender has any
obligation to make any Revolving Loan Advance, Competitive Bid Advance or Swing
Line Advance (including its initial Advance) and Issuing Bank has no obligation
to issue any Letter of Credit (including the first) unless the following
conditions precedent have been satisfied:
(a) All representations and warranties made by any Designated
Entity in any Loan Document shall be true on and as of the
date of such Revolving Loan Advance, Swing Line Advance,
Competitive Bid Advance or issuance of Letter of Credit as if
such representations and warranties had been made as of the
date of such Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance or issuance of such Letter of Credit
(unless stated to relate solely to an earlier date, in which
case such representations and warranties shall be true and
correct as of such earlier date).
(b) In the case of the first Revolving Loan Advance, Swing Line
Advance or Competitive Bid Advance or issuance of the first
Letter of Credit, no Event of Default, and in the case of any
other Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance or issuance of a Letter of Credit, no
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Default shall exist at the date of such Revolving Loan
Advance, Swing Line Advance or Competitive Bid Advance or
issuance of Letter of Credit or will occur as a result of the
making of the requested Revolving Loan Advance, Swing Line
Advance or Competitive Bid Advance or the issuance of the
requested Letter of Credit.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 Borrower's Representations and Warranties. To
confirm each Lender's understanding concerning Borrower and its businesses,
properties and obligations, and to induce Managing Agents, Co-Agents and each
Lender to enter into this Agreement and to make the Loans to Borrower, except
as to matters disclosed herein or in the Disclosure Schedule, Borrower
represents and warrants to Managing Agents, Co-Agents and each Lender that:
(a) No Default. No Designated Entity is in default in the
performance of any of the covenants and agreements contained
herein or under any other Loan Document. No event or
circumstance has occurred and is continuing which constitutes
a Default.
(b) Organization, Existence and Good Standing. Each Designated
Entity is duly organized or incorporated, validly existing and
in good standing under the laws of its jurisdiction of
organization or incorporation, having all corporate or
partnership powers required to enter into and carry out the
transactions contemplated hereby. Each Designated Entity is
duly qualified, in good standing, and authorized to do
business in all other jurisdictions wherein the character of
the properties owned or held by it or the nature of the
business transacted by it makes such qualification necessary,
except for any lack of qualification, good standing or
authorization that could not reasonably be expected to have a
Material Adverse Effect. Each Designated Entity has taken all
actions customarily taken in order to enter, for the purpose
of conducting business or owning property, each jurisdiction
outside the United States wherein the character of the
properties owned or held by it or the nature of the business
transacted by it makes such actions desirable, except for any
failure or other matter that could not reasonably be expected
to have a Material Adverse Effect.
(c) Authorization. Each Designated Entity has duly taken all
corporate or partnership action necessary to authorize the
execution and delivery by it of the Loan Documents to which it
is a party and to authorize the consummation of the
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transactions contemplated thereby and the performance of its
obligations thereunder. Borrower is duly authorized to borrow
funds hereunder.
(d) No Conflicts or Consents. The execution and delivery by each
Designated Entity of the Loan Documents to which it is a
party, the performance by each Designated Entity of its
obligations under such Loan Documents, and the consummation of
the transactions contemplated by the various Loan Documents,
including, without limitation, the consummation of the
Acquisition, do not and will not (1) conflict with any
provision of the articles or certificate of incorporation,
bylaws, charter, partnership agreement or certificate or other
governing document of such Designated Entity, or (2) except as
to matters that could not reasonably be expected to have a
Material Adverse Effect, result in the acceleration of any
Debt owed by such Designated Entity, or conflict with any law,
statute, rule, regulation, or material agreement, judgment,
license, order or permit applicable to or binding upon such
Designated Entity, or require the consent, approval,
authorization or order of, or notice to or filing with, any
Governmental Authority or third party, or result in or require
the creation of any Lien upon any material assets or
properties of such Designated Entity, except (i) as permitted
in the Loan Documents and (ii) for filings and recordings of
the Security Instruments.
(e) Enforceable Obligations. This Agreement is, and the other
Loan Documents when duly executed and delivered will be,
legal, valid and binding obligations of each Designated Entity
which is a party hereto or thereto, enforceable in accordance
with their terms except as such enforcement may be limited by
bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights generally and
by general principles of equity.
(f) Financial Statements. (i) The Updated Financial Statements
fairly present Borrower's, Mesa's and P&P Petroleum's and each
of their Consolidated subsidiaries' financial position at the
respective dates thereof and the results of Borrower's, Mesa's
and P&P Petroleum's and each of their Consolidated
subsidiaries' operations and cash flows for the respective
periods thereof. From the date of the audited Updated
Financial Statements to the Effective Date, no change has
occurred in Borrower's, Mesa's or P&P Petroleum's Consolidated
financial condition which could reasonably be expected to
result in a Material Adverse Effect, except as reflected in
the Disclosure Schedule. From September 30, 1997 to the
Effective Date, no change has occurred in Chauvco's
Consolidated financial condition which could reasonably be
expected to result in a Material Adverse Effect, except as
reflected in the Disclosure Schedule. All Updated Financial
Statements were prepared in accordance with GAAP as in effect
on the date thereof.
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(ii) The Unaudited Pro Forma Financial Statements
of Borrower for the periods ending December 31, 1996 and
September 30, 1997 contained in the Joint Management
Information Circular and Proxy Statement, dated November 17,
1997 (the "Proxy"), and the Unaudited Pro Forma Financial
Statements of Borrower for the period ending September 30,
1997, fairly present Borrower's pro forma financial position
at the respective dates thereof and the results of Borrower's
pro forma operations and cash flows for the respective periods
thereof. From the date of such financial statements to the
Effective Date no change has occurred in Borrower's
Consolidated financial condition which could reasonably be
expected to result in a Material Adverse Effect on Borrower's
Pro Forma Consolidated Financial Condition, except as
reflected in the Disclosure Schedule. All such financial
statements were prepared in accordance with GAAP as in effect
on the date thereof.
(g) Other Obligations. Except as disclosed in the Disclosure
Schedule, as of the Effective Date, neither Borrower nor any
of its Consolidated Subsidiaries has any outstanding Debt
which is, in the aggregate, material to Borrower and its
Consolidated Subsidiaries and not shown in the Updated
Financial Statements.
(h) Full Disclosure. No certificate, statement or other
information delivered herewith or heretofore by any Designated
Officer of any Designated Entity to either of Managing Agents,
Co-Agents or any Lender in connection with the negotiation of
this Agreement or in connection with any transaction
contemplated hereby contains any untrue statement of a fact or
omits to state any fact known to Borrower, P&P Petroleum, Mesa
or any Designated Entity (other than industry-wide risks
normally associated with the types of businesses conducted by
Borrower, P&P Petroleum, Mesa or any Designated Entity)
necessary to make the statements contained herein or therein
not misleading as of the date made or deemed made, except to
the extent that any untrue statement or omission could not
reasonably be expected to have a Material Adverse Effect.
(i) Litigation. Except as disclosed in the Updated Financial
Statements or in the Disclosure Schedule: (1) there are no
actions, suits or legal, equitable, arbitrative or
administrative proceedings pending, or, to the knowledge of
Borrower, threatened, against any Designated Entity before any
Governmental Authority that could reasonably be expected to
have a Material Adverse Effect, and (2) there are no
outstanding judgments, injunctions, writs, rulings or orders
by any such Governmental Authority against Borrower, P&P
Petroleum, Mesa or any of their respective Consolidated
Subsidiaries which could reasonably be expected to have a
Material Adverse Effect.
(j) Environmental Matters. The liabilities and costs of Borrower
and its
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Consolidated Subsidiaries related to compliance with
applicable Environmental Laws (as in effect on the date on
which this representation is made or deemed made) could not
reasonably be expected to have a Material Adverse Effect.
(k) Title to Properties. Each Designated Entity has good and
defensible title to all of its material properties and assets,
except any failure, defect or other matter that could not, in
the aggregate, reasonably be expected to have a Material
Adverse Effect.
(l) Investment Company Act. Neither Borrower nor any of its
Subsidiaries is an "investment company" or a "company
controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.
(m) Public Utility Holding Company Act. Neither Borrower nor any
of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding
company", or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(n) Principal Business Offices. As of the Effective Date, each
Designated Entity's principal place of business and chief
executive office is located at the place described in the
Disclosure Schedule.
(o) Solvency. Each Designated Entity is solvent and will continue
to be solvent after the making and guarantying of the Loans
and the issuance of the Letters of Credit.
(p) Organization. As of the Effective Date, the organization
chart of Borrower and its Subsidiaries with material assets
set forth on Exhibit I is true and correct in all material
respects. Except for the Exchangeable Shares, as of the
Effective Date, Borrower or a Restricted Subsidiary owns all
of the issued and outstanding capital stock of each Restricted
Subsidiary. As of the Effective Date, no Restricted
Subsidiary has issued any securities convertible into shares
of its stock or any options (except as set forth in the
Disclosure Schedule), warrants or other rights to acquire such
shares or securities convertible into such shares and the
outstanding capital stock and securities of each Restricted
Subsidiary is owned by Borrower or another Restricted
Subsidiary free and clear of all Liens, warrants, options or
rights of others of any kind whatsoever, except for Permitted
Liens.
(q) Use of Proceeds; Margin Stock. Borrower and its Subsidiaries
shall use (i) the
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initial Revolving Loan Advance to discharge all outstanding
obligations under the Existing Credit Agreement, and (ii) all
Revolving Loan Advances, Letters of Credit, Competitive Bid
Advances and Swing Line Advances for its and their respective
general corporate purposes. In no event shall the funds from
any Revolving Loan Advance, Swing Line Advance, Competitive
Bid Advance or Letter of Credit be used directly or indirectly
by any Persons for personal, family, household or agricultural
purposes or for the purpose, whether immediate, incidental or
ultimate, of purchasing, acquiring or carrying any "margin
stock" or any "margin securities" (as such terms are defined
in the Margin Regulations) in violation of the Margin
Regulations, or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or
carry "margin stock" or "margin securities" in violation of
the Margin Regulations, or to extend credit to others directly
or indirectly for the purpose of purchasing or carrying any
such margin stock or margin securities in violation of the
Margin Regulations. Borrower is not engaged principally, or as
one of Borrower's important activities, in the business of
extending credit to others for the purpose of purchasing or
carrying such margin stock or margin securities. Neither any
Designated Entity nor any Person acting on behalf of any
Designated Entity has taken or will take any action which
might cause this Agreement, the Notes, or any Guaranty, any
Loan Document or any Loan or Letter of Credit to violate the
Margin Regulations or to violate Section 7 of the Securities
Exchange Act of 1934, or any rule or regulation thereunder, in
each case as now or hereafter in effect.
(r) Liens Under the Security Instruments. Upon the execution and
delivery of the Security Instruments in accordance herewith,
and where appropriate the filing and recordation thereof with
the appropriate filing or recording officers in each of the
necessary jurisdictions, the Liens granted and to be granted
by any Designated Entity to Lenders or the Trustee (as defined
in any of the Security Instruments) on behalf of Lenders in
such Designated Entity's assets pursuant to the Security
Instruments will be validly created, perfected and first
priority Liens, subject only to Permitted Liens.
Section 4.2 Representation by Lenders. Each Lender hereby
represents that it will acquire its Notes for its own account in the ordinary
course of its commercial lending business; however, such Lender may sell or
otherwise transfer its Notes, any participation interest or other interest in
its Notes, or any of its other rights and obligations under the Loan Documents
as permitted by Section 8.8.
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ARTICLE 5
COVENANTS OF BORROWER
Section 5.1 Affirmative Covenants. To conform with the terms and
conditions under which each Lender is willing to have credit outstanding to
Borrower, and to induce Managing Agents, Co-Agents and each Lender to enter
into this Agreement and make the Loans to Borrower and to issue Letters of
Credit, unless Required Lenders shall have previously agreed otherwise in
writing, Borrower, severally for itself and its Subsidiaries, covenants and
agrees that:
(a) Payment and Performance. Borrower will pay all amounts due
from it under the Loan Documents in accordance with the terms
thereof and will observe, perform and comply with every
covenant, term and condition expressed in the Loan Documents,
and will cause each Designated Entity which is a Subsidiary of
Borrower to perform and comply with every covenant, term and
condition expressed in the Loan Documents and applicable to
such Designated Entity.
(b) Books, Financial Statements and Reports. Borrower will at all
times maintain full and materially accurate books of account
and records. Borrower will maintain and will cause its
Subsidiaries to maintain a standard system of accounting and
will cause the following statements and reports to be
delivered to Managing Agents and each Lender at Borrower's
expense:
(1) As soon as available, and in any event within 120
days after the end of each Fiscal Year, complete
audited Consolidated financial statements of Borrower
and its Subsidiaries and unaudited consolidating
balance sheets and statements of operations of
Borrower and its Subsidiaries, prepared in reasonable
detail in accordance with GAAP; such audited
statements to be accompanied by an opinion, by KPMG
Peat Marwick, or such other independent certified
public accountants of nationally recognized standing
selected by Borrower, stating that such Consolidated
financial statements have been so prepared. Borrower
will, together with each set of such financial
statements delivered pursuant to this Section,
furnish a certificate in the form of Exhibit J signed
by a Designated Officer of Borrower stating that, to
the best of his knowledge, (i) such financial
statements are accurate and complete, and (ii) no
Default or Event of Default exists at the end of such
Fiscal Quarter or at the time of such certificate or
specifying the nature and period of existence of any
such Default or Event of Default. Such certificate
shall contain calculations showing compliance (or
noncompliance) at the end of such Fiscal Quarter with
the requirements of Sections 5.3(a) and (b).
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(2) As soon as available, and in any event within 60 days
after the end of the first three Fiscal Quarters in
each Fiscal Year, unaudited Consolidated financial
statements of Borrower and its Subsidiaries and
unaudited consolidating balance sheet and statements
of operations of Borrower and its Subsidiaries as of
the end of such Fiscal Quarter, all in reasonable
detail and prepared in accordance with GAAP, subject
to changes resulting from year-end adjustments.
Borrower will, together with each set of such
financial statements delivered pursuant to this
Section, furnish a certificate in the form of Exhibit
J signed by a Designated Officer of Borrower stating
that, to the best of his knowledge, (i) such
financial statements are accurate and complete, and
(ii) no Default or Event of Default exists at the end
of such Fiscal Quarter or at the time of such
certificate or specifying the nature and period of
existence of any such Default or Event of Default.
Such certificate shall contain calculations showing
compliance (or noncompliance) at the end of such
Fiscal Quarter with the requirements of Sections
5.3(a) and (b).
(3) Promptly after transmittal or filing, copies of all
financial statements, reports, notices and proxy
statements sent by Borrower to its stockholders and
all registration statements, periodic reports and
other statements and schedules filed by Borrower or
any of its Subsidiaries with any securities exchange,
the Securities and Exchange Commission or any similar
Governmental Authority.
(c) Other Information and Inspections. Borrower will furnish to
Managing Agents and each Lender any information which
Administrative Agent, on behalf of any Lender, may from time
to time reasonably request in writing concerning any covenant,
provision or condition of the Loan Documents or any matter in
connection with Borrower's and its Subsidiaries' businesses
and operations. Borrower will permit and will cause each of
its Subsidiaries to permit representatives of Agents and
Lenders (including independent accountants, agents and
attorneys), at the expense and risk of the applicable Lender,
to visit and inspect, during normal business hours and upon
reasonable notice any of Borrower's or such Subsidiaries'
property, including its books of account, other books and
records, and any facilities or other business assets, and to
make extra copies therefrom and photocopies and photographs
thereof, and to write down and record any information such
representatives obtain, and Borrower shall permit and will
cause each of its Subsidiaries to permit Agents and the
Lenders or their representatives, to investigate and verify
the accuracy of the information furnished to Administrative
Agent or any Lender in connection with the Loan Documents and
to discuss all such matters with its officers, employees and
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representatives; provided, however, that any such visit,
inspection, investigation or verification or discussion with
respect to Borrower taking place at a time when Borrower has
been notified in writing by Administrative Agent of the
existence of a Default or an Event of Default applicable to
Borrower which has occurred and is continuing shall be at the
cost and expense of Borrower, and that neither Managing
Agents, Co-Agents nor Lenders shall have any obligation to pay
any costs or expenses of Borrower or any other Designated
Entity or any of their officers, employees or representatives
in respect thereof irrespective of the existence of any
Default or Event of Default.
(d) Notice of Material Events. Borrower will promptly upon its
awareness thereof notify Administrative Agent and each Lender
(1) of the occurrence of any Default or any other event, which
has or may reasonably be expected to have, a Material Adverse
Effect, (2) of the acceleration of the maturity of any Debt
owed by any Designated Entity or any default by any Designated
Entity under any instrument evidencing or governing Debt, if
such acceleration or default has a Material Adverse Effect,
(3) of the occurrence of any Termination Event which may
reasonably be expected to have a Material Adverse Effect, and
(4) of the filing of any litigation or proceeding in which any
Designated Entity is a party or of any material developments
in existing litigation in which any Designated Entity is a
party in which an adverse decision may reasonably be expected
to have a Material Adverse Effect.
(e) Maintenance of Existence and Qualifications. Borrower will,
and will cause each Restricted Subsidiary to, maintain and
preserve its existence as a corporation or partnership, as the
case may be. Borrower will, and will cause each Restricted
Subsidiary to, maintain and preserve its good standing and its
rights and franchises in full force and effect and qualify to
do business as a foreign corporation in all states or
jurisdictions where required by applicable law, except for any
failure to maintain, preserve and qualify that could not
reasonably be expected to have a Material Adverse Effect.
Nothing in this Section shall prohibit (i) a merger or
consolidation permitted by Section 5.2(c) or (ii) a
termination of such existence, good standing, rights or
franchises of any Restricted Subsidiary if Borrower determines
in good faith that such termination is in the best interest of
Borrower and could not reasonably be expected to have a
Material Adverse Effect.
(f) Payment of Taxes and Trade Debt. Borrower will, and will
cause each of its Subsidiaries to, except for any failure or
other matter that could not reasonably be expected to have a
Material Adverse Effect, (1) timely file all required tax
returns, (2) timely pay all taxes, assessments, and other
governmental charges or levies imposed upon it or upon its
income, profits or property, and (3) timely
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pay all trade debt. Borrower and its respective Subsidiaries
may, however, delay paying or discharging any such taxes,
assessments, charges, debts or levies so long as the validity
thereof is contested in good faith by appropriate proceedings
and adequate reserves therefor in accordance with GAAP have
been set aside and reflected among the books and records of
Borrower and its Subsidiaries.
(g) Insurance. Borrower will, and will cause each of its
Subsidiaries to, at all times maintain insurance in such
amounts and covering such risks as are in accordance with
normal industry practice for companies engaged in similar
businesses and owning similar properties in the same general
area in which Borrower and its Subsidiaries conduct business,
which insurance (other than prudent self-insurance programs)
shall be by financially sound and reputable insurers.
(h) Payment of Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, Borrower will
promptly pay all reasonable costs and expenses (including
reasonable attorneys' fees) incurred by or on behalf of (1)
the Documentation Agents in connection with the negotiation,
preparation, execution and delivery of the Loan Documents and
any amendment, modification or restatement thereof, and any
and all consents, waivers or other documents or instruments,
including commitment letters, term sheets and any memorandum
relating thereto (provided that Borrower shall be obligated to
pay only the attorneys' fees of a common counsel for the
Documentation Agents, Mayer, Brown & Platt), (2) Agents in
connection with due diligence, syndication, travel and
advertising related to this Agreement and the transactions
contemplated thereby, and (3) Administrative Agent or any
Lender in connection with enforcement of the Loan Documents or
the defense of Administrative Agent's or any Lender's exercise
of its rights thereunder. The selection of Managing Agents'
counsel and consultants in connection with the matters
described in the preceding sentence shall be subject to the
approval of Borrower, which approval shall not be unreasonably
withheld. Attorneys' fees reimbursed by Borrower for any
amendment, modification or restatement of any Loan Document
shall be estimated and approved by Borrower prior to
incurrence, such approval not to be unreasonably withheld.
Attorneys' fees reimbursed by Borrower in connection with the
enforcement of the Loan Documents or the defense of
Administrative Agent's or any Lenders' exercise of its rights
hereunder shall be for a single law firm per country (unless
conflicts (including conflicts between Managing Agents and the
other Lenders as determined in the reasonable discretion of
the Required Lenders) otherwise prohibit the engagement of a
single law firm).
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(i) Compliance with Agreements and Law. Borrower will, and will
cause each of its Subsidiaries to (1) perform all material
obligations it is required to perform under the terms of each
material agreement, contract or other instrument or obligation
to which it is a party or by which it or any of its material
properties is bound, except for any non-performance that will
not have or reasonably be expected to have a Material Adverse
Effect; and (2) conduct its business and affairs in material
compliance with all laws, regulations, and orders applicable
thereto (including without limitation Environmental Laws)
except for any non-compliance that could not reasonably be
expected to have a Material Adverse Effect.
(j) Maintenance of Business. Borrower will, and will cause each
Restricted Subsidiary to, maintain as its primary business the
exploration, production and development of oil, natural gas
and other liquid and gaseous hydrocarbons and the gathering,
processing, transmission and marketing of hydrocarbons and
activities related or ancillary thereto.
(k) Operations. Borrower will, and will cause each Restricted
Subsidiary to, cause all material properties to be regularly
operated, maintained and developed in a good and workmanlike
manner, as would a prudent operator and in accordance with all
applicable federal, state and local laws, rules and
regulations, except for any failure to so operate, maintain
and develop that could not reasonably be expected to have a
Material Adverse Effect.
(l) Restructuring. No later than 30 days after the Effective
Date, Borrower shall cause the Outside Debt to be assumed by
Borrower through a Restructuring. In connection with such
Restructuring, Pioneer USA shall guarantee the repayment of
the Outside Debt being assumed by Borrower. Contemporaneously
with such Restructuring, Borrower shall cause the Subsidiary
or Subsidiaries who are the surviving entities of such
Restructuring to execute new Guaranties. As used herein,
"Restructuring" shall mean the formation of one or more
wholly-owned Subsidiaries of Borrower and/or Pioneer USA and
the occurrence of one or more mergers, to take place on a
single day, among Borrower, Pioneer USA and any such
Subsidiaries, in each case as determined by Borrower to be
appropriate to bring about the assumption, by merger, of the
Outside Debt from Pioneer USA to Borrower as contemplated by
this Section.
Section 5.2 Negative Covenants. To conform with the terms and
conditions under which each Lender is willing to have credit outstanding to
Borrower, and to induce Managing Agents and each Lender to enter into this
Agreement and make the Loans to Borrower and to issue Letters of Credit, unless
Required Lenders shall have previously agreed otherwise in writing, Borrower,
severally for itself and its Subsidiaries, covenants and agrees that:
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(a) Limitation on Debt. Borrower will not, and will not permit any
Restricted Subsidiary to, in any manner owe or be liable for
Debt except:
(1) the Obligations;
(2) Debt pursuant to the 364 Day Credit Facility and Debt
pursuant to the Canadian Credit Facility in a maximum
aggregate amount of $300,000,000;
(3) unsecured Debt among Designated Entities;
(4) Debt arising under capital leases which does not in
the aggregate for Borrower and all Restricted
Subsidiaries exceed $20,000,000 at any one time
outstanding;
(5) Debt, other than Debt otherwise permitted by another
subparagraph of this Section 5.2(a), which, at the
time incurred, is at prevailing market rates of
interest and contains covenants and conditions and
events of default no more onerous to Designated
Entities than the terms of this Agreement; provided,
that no Default or Event of Default will result from
the incurrence of such Debt and be continuing;
(6) guaranties of Debt which is the primary obligation of
a Designated Entity and permitted under this Section
5.2(a);
(7) Debt arising (whether by contract or as a result of
statutory liability of a general partner) by virtue
of any Designated Entity being a general partner of a
general or limited partnership pursuant to agreements
in effect on the Effective Date not in excess of the
aggregate amounts permitted to be incurred pursuant
to such agreements on the Effective Date for all such
Debt and other such Debt otherwise permitted pursuant
to the other subparagraphs of this Section 5.2(a);
and
(8) Debt existing on the Effective Date which is
disclosed (i) in the Updated Financial Statements or
(ii) in the Disclosure Schedule and any extensions,
renewals or replacements thereof upon terms no more
onerous to Borrower than the terms of this Agreement
or the terms of the instruments evidencing such Debt
as of the date of this Agreement.
(b) Negative Pledge. Borrower will not, and will not permit any
of its Restricted Subsidiaries to, create, assume or permit to
exist any Lien upon any of their respective material property,
except Permitted Liens.
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(c) Limitation on Mergers. Except as expressly provided in this
paragraph, Borrower will not, and will not permit any of its
Restricted Subsidiaries to, merge or consolidate with or into
any other business entity, except (1) Borrower may be party to
a merger or consolidation so long as the surviving entity is
Borrower and no Default will exist and the Obligations do not
exceed the Facility Amount after giving effect thereto and (2)
any Restricted Subsidiary may be a party to any merger or
consolidation so long as the surviving entity is a Restricted
Subsidiary and any Guaranty of, or Pledge Agreement by, such
Restricted Subsidiary continues as to such surviving entity,
no Default will exist, and the Obligations do not exceed the
Facility Amount after giving effect thereto.
(d) Limitation on Disposition of Capital Stock of Restricted
Subsidiaries. Borrower will not, and will not permit any
Restricted Subsidiary to, sell, transfer or otherwise dispose
of capital stock of any Restricted Subsidiary, except that
Borrower and any Restricted Subsidiary may sell, issue,
transfer or otherwise dispose of the capital stock of any
Restricted Subsidiary to Borrower or to another Restricted
Subsidiary.
(e) Limitation on Restricted Payments. Borrower will not, and
will not permit any Restricted Subsidiary to, make Restricted
Payments in excess of $150,000,000 in the aggregate for the
duration of this Agreement for all such Restricted Payments;
provided, however, that in the event that any Unrestricted
Subsidiary of Borrower is redesignated to be a Restricted
Subsidiary of Borrower for purposes of this Agreement, then
for purposes of determining compliance with this Section, all
Restricted Payments made to such Unrestricted Subsidiary shall
be deducted from the aggregate total of all Restricted
Payments made for the duration of this Agreement. No
Restricted Payment may be made (1) if the Obligations shall
exceed the Facility Amount, (2) if any Default or Event of
Default shall have occurred and be continuing, or (3) if as a
result thereof, any Default or Event of Default shall have
occurred and be continuing.
(f) Transactions with Affiliates. Borrower will not, and will not
permit any of its Restricted Subsidiaries to, engage in any
material transaction with any of Borrower's Affiliates on
terms which are less favorable than those which would have
been obtainable at the time in arm's-length dealing with
Persons other than such Affiliates, provided, however that
such restriction shall not apply to transactions (i) among
Borrower and its Restricted Subsidiaries and (ii) among
Restricted Subsidiaries.
(g) Limitations on Restricted Subsidiaries. Borrower will not
permit any Restricted Subsidiary to become subject to
covenants which:
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(1) restrict dividends or dividend capacity;
(2) restrict loans and advances to Borrower;
(3) restrict the ability to make tax payments or
management payments to Borrower; or
(4) restrict the capitalization structure of any
Restricted Subsidiary.
(h) Limitation on Sale/Leasebacks. Designated Entities will not
enter into any arrangement, directly or indirectly, with any
Person whereby any Designated Entity shall sell or transfer
any material asset, and whereby any Designated Entity shall
then or immediately thereafter rent or lease as lessee such
asset or any part thereof.
(i) Conversion between Restricted Subsidiary and Unrestricted
Subsidiary. Borrower may convert any Restricted Subsidiary to
an Unrestricted Subsidiary by giving Administrative Agent at
least five (5) Business Days' notice of such conversion in the
form of Exhibit K-1 attached hereto; provided that (1) no
Restricted Subsidiary shall be so converted so long as it owns
or will thereafter own, directly or indirectly, any interest
in any material asset or in another Restricted Subsidiary
unless the value of such material assets, together with the
aggregate of all Restricted Payments made and the value of any
other material assets determined as aforesaid of any
Restricted Subsidiaries converted to Unrestricted Subsidiaries
do not exceed in the aggregate the limitation on Restricted
Payments contained in Section 5.2(e) hereof, and (2) no such
conversion shall be made if after giving effect to such
conversion, any Default would exist. Upon any such conversion
of a Restricted Subsidiary to an Unrestricted Subsidiary, such
Subsidiary shall be released from its obligations under its
Guaranty, and Managing Agents and Lenders shall execute and
deliver a release substantially in the form of Exhibit K-2
hereto. Borrower may convert any Unrestricted Subsidiary to a
Restricted Subsidiary by giving Administrative Agent at least
five (5) Business Days' notice of such conversion in the form
of Exhibit K-1 attached hereto; provided that no such
conversion may be made if after giving effect to such
conversion, any Default would exist.
(j) Margin Securities. Proceeds of the Loans will not be used to
purchase or carry Margin Stock except in compliance with the
Margin Regulations.
(k) Modification to Canadian Credit Facility. Borrower shall not
make, permit or otherwise consent to any amendment or
modification to, or seek a waiver of, any representation,
warranty or covenant contained in the Canadian Credit
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Facility without the prior consent of the Required Lenders,
such consent not to be unreasonably withheld.
Section 5.3 Financial Covenants. To conform with the terms and
conditions under which each Lender is willing to have credit outstanding to
Borrower, and to induce Managing Agents and each Lender to enter into this
Agreement and make the Loans to Borrower and to issue Letters of Credit, unless
Required Lenders shall have previously agreed otherwise in writing, Borrower,
severally for itself and its Subsidiaries, covenants and agrees that:
(a) EBITDAX to Consolidated Interest Expense Ratio. The ratio of
Borrower's "EBITDAX" to "Consolidated Interest Expense" for
the last four rolling Fiscal Quarters will not be less than
3.75 to 1.0; provided, however, that the EBITDAX to
Consolidated Interest Expense Ratio shall first be calculated
on December 31, 1997; provided further that for the periods
for calculation ending on or before September 30, 1998, each
reference to "for the last four rolling Fiscal Quarters" shall
be deemed to be a reference to the period from October 1, 1997
through the date of such calculation. As used in this
paragraph, the term "Consolidated Interest Expense" means for
any period, total interest expense, whether paid or accrued,
of Borrower and its Subsidiaries on a Consolidated basis,
including, without limitation, all commissions, discounts and
other fees and charges owed with respect to Letters of Credit.
As used in this paragraph, the term "EBITDAX" means for any
period the sum of the amounts for such period of Consolidated
net income, Consolidated Interest Expense, depreciation
expense, depletion expense, amortization expense, federal and
state income taxes, exploration and abandonment expense and
other non-cash charges and expenses, all as determined on a
Consolidated basis for Borrower and its Subsidiaries.
(b) Consolidated Total Funded Debt to Total Capitalization.
Borrower's Consolidated Total Funded Debt to Total
Capitalization will not, as of the last day of any Fiscal
Quarter, be greater than 60%.
ARTICLE 6
EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Events of Default. Each of the following events
constitutes an "Event of Default" under this Agreement:
(a) Borrower shall default on the payment when due of any
principal on any of its Loans or any of its Notes or any
amount in respect of any LC Obligation;
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(b) Borrower fails to pay any of its Obligations (other than
principal or any amount in respect of its LC Obligations) when
due and payable, whether interest in respect of any Loan or
any fee or any other amounts payable under any of the Loan
Documents and such failure shall continue unremedied for a
period of five (5) Business Days; provided, however, that any
such Default shall not constitute an Event of Default if
subsequently available information indicates that a payment
made when due was insufficient because of a good faith error
in calculation so long as Borrower shall cure such deficiency
within five (5) Business Days after Borrower becomes aware of
such deficiency;
(c) any Designated Entity fails to duly observe, perform or comply
with any covenant, agreement, condition or provision set forth
in Section 5.1(d) or 5.2 of this Agreement;
(d) any Designated Entity fails (other than as referred to in
subsections (a), (b) and (c) above) to duly observe, perform
or comply with any covenant, agreement, condition or provision
of any Loan Document applicable to it (even if all or part of
such agreement or covenant is void or unenforceable), and such
failure is not remedied within thirty (30) Business Days after
written notice thereof shall have been sent to Borrower by
Administrative Agent or any Lender;
(e) any representation or warranty previously, presently or
hereafter made in writing or deemed made by or on behalf of
any Designated Entity in connection with any Loan Document
shall have been false or incorrect in any material respect on
any date on or as of which made and either (1) an Executive
Officer of Borrower had actual knowledge that such
representation or warranty was false or incorrect in a
material respect when made or (2) if no Executive Officer had
such knowledge, such representation or warranty shall continue
to be false or incorrect in any material respect thirty (30)
Business Days after the earlier of an Executive Officer of
Borrower obtaining actual knowledge thereof or written notice
thereof shall have been sent to Borrower by Administrative
Agent;
(f) any Designated Entity (1) fails to pay when due Debt in excess
of $20,000,000 or (2) breaches or defaults in the performance
of any agreement or instrument by which any such Debt in
excess of $20,000,000 is issued, evidenced, governed, or
secured, and any such failure, breach or default continues
beyond any applicable period of grace provided therefor;
(g) either (1) any "accumulated funding deficiency" (as defined in
Section 412(a) of the Internal Revenue Code of 1986, as
amended) in excess of $10,000,000 exists with respect to any
ERISA Plan, whether or not waived by the Secretary of the
Treasury or his delegate, or (2) any Termination Event which
has a Material
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Adverse Effect occurs with respect to any ERISA Plan and the
then current value of such ERISA Plan's benefit liabilities
exceeds the then current value of such ERISA Plan's assets
available for the payment of such benefit liabilities by more
than $10,000,000 (or in the case of a Termination Event
involving the withdrawal of a substantial employer, the
withdrawing employer's proportionate share of such excess
exceeds such amount);
(h) any Designated Entity:
(1) suffers the commencement of any involuntary
bankruptcy, reorganization, debt arrangement, winding
up, dissolution, official management or
administration, or other case or proceeding under any
bankruptcy or insolvency law or the entry against it
of a judgment, decree or order for relief by a court
of competent jurisdiction in such a case or
proceeding, which in either case remains undismissed
for a period of sixty (60) days; provided that each
Designated Entity hereby expressly authorizes each
Agent and each Lender to appear in any court
proceeding during such sixty (60) day period to
preserve, protect and defend their rights under the
Loan Documents;
(2) commences a voluntary case under any applicable
bankruptcy, insolvency or similar law now or
hereafter in effect, including, without limitation,
the United States Bankruptcy Code or the Corporations
Law of Australia, as from time to time amended; or
applies for or consents or acquiesces to the entry of
an order for relief in an involuntary case under any
such law, or becomes insolvent or makes a general
assignment for the benefit of creditors, or fails
generally to pay (or admits in writing its inability
to pay) its debts as such debts become due, or takes
corporate or other action to authorize any of the
foregoing;
(3) suffers the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee,
sequestrator, administrator or similar official of
all or a substantial part of its assets in a
proceeding brought against or initiated by it, and
such appointment is neither made ineffective nor
discharged within sixty (60) days after such event or
such appointment or taking possession is at any time
consented to, requested by, or acquiesced to by such
Designated Entity;
(4) suffers the entry against it of a final judgment for
the payment of money in excess of $20,000,000 (not
covered by insurance satisfactory to Administrative
Agent in its discretion), unless the same is
discharged within thirty (30) days after the date of
entry thereof or an appeal or
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appropriate proceeding for review thereof is taken
within such period and a stay of execution pending
such appeal is obtained and continues; or
(5) suffers a writ or warrant of attachment or any
similar process to be issued by any court against all
or any substantial part of its property, and such
writ or warrant of attachment or any similar process
is not stayed or released within thirty (30) days
after the entry or levy thereof or after any stay is
vacated or set aside;
(i) (a) any person (other than Borrower, a Restricted Subsidiary
of Borrower or any employee benefit plan of Borrower or any of
its Subsidiaries) or group (as such term is used in Section
13(d) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended) shall acquire, directly or indirectly, beneficial
ownership of an aggregate of 35% or more of the issued and
outstanding voting stock of Borrower or (b) during any period
of two consecutive years ending on or after the Effective
Date, as determined as of the last day of each calendar
quarter after the Effective Date, the individuals (the
"Incumbent Directors") who at the beginning of such period
constituted the Board of Directors of Borrower (other than
additions thereto or removals therefrom from time to time
thereafter approved by a vote of at least two-thirds of such
Incumbent Directors) shall cease for any reason to constitute
50% or more of the Board of Directors of Borrower; provided,
however, that for each determination period ending on or
before September 30, 1999, each determination period shall be
deemed to be a period from the Effective Date through the date
of such calculation;
(j) any of the Loan Documents are determined to be invalid or
unenforceable in any material respect;
(k) (1) any Restricted Subsidiary other than any Foreign
Restricted Subsidiary, and any of their respective
Restricted Subsidiaries fails to execute and deliver
to Collateral Agent a Guaranty of the type referred
to in clause (i) of the definition of "Guaranty",
within 30 days of becoming a Restricted Subsidiary;
(2) unless and to the extent that any Foreign Restricted
Subsidiary or any other Restricted Subsidiary is
prohibited from, or subject to adverse tax
consequences as a result of, guaranteeing the
Obligations under this Agreement (a) under Section
956 of the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time
("Section 956") (b) pursuant to contractual
restrictions in existence prior to the Effective Date
or (c) as a matter of corporate law, any Foreign
Restricted
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Subsidiary or any other Restricted Subsidiary fails
to execute and deliver to Collateral Agent, a
Guaranty of the type referred to in clause (i) of the
definition of "Guaranty" together with in the case of
any Foreign Restricted Subsidiary, a notice in
relation to such Guaranty or, in the case of any
Restricted Subsidiary subject to the Corporation Laws
of Australia, a certificate under Section 206(6) of
the Corporations Laws of Australia in relation to
such Guaranty, in each case (1) as soon as
practicable following the termination or
inapplicability of the contractual restrictions,
corporate law prohibitions and adverse tax
consequences referred to in this paragraph or (2) if
no such contractual restrictions, corporate law
prohibitions and adverse tax consequences apply, as
soon as practicable following a determination that
such contractual restrictions, corporate law
prohibitions and adverse tax consequences do not
apply;
(l) unless and to the extent that (a) any such pledge or mortgage
would result in (i) substantial stamp or similar taxes or (ii)
adverse tax consequences pursuant to Section 956, (b) any such
pledge or mortgage is prohibited either (i) pursuant to
contractual restrictions in existence prior to the Effective
Date or (ii) as a matter of corporate law, or (c) a Guaranty
of the type referred to in clause (i) of the definition of
"Guaranty" has been executed and delivered by the Restricted
Subsidiary the capital stock or shares of which would
otherwise be subject to pledge or mortgage under this
paragraph, Borrower, or any Subsidiary of Borrower, owning
capital stock or shares of any Restricted Subsidiary of any
Foreign Restricted Subsidiary, fails (x) to execute and
deliver to Collateral Agent the Pledge Agreements, together
with sixty-five percent (65%) of all issued and outstanding
stock or shares of such Restricted Subsidiary or such Foreign
Restricted Subsidiary and stock powers or share transfers
executed in blank, together with a either a certificate under
Section 206 (6) of the Corporations Law of Australia or a
notice of the type described in Section 6.1(k)(2) hereof, in
each case in relation to such Pledge Agreement, as the case
may be and if applicable, as soon as practicable after the
termination or inapplicability of such contractual
restrictions and corporate law prohibitions and adverse tax
consequences referred to in this paragraph and (y) to repay
all Obligations and other amounts and to cause all outstanding
Letters of Credit to be terminated and the originals thereof
to be returned to the Issuing Bank as soon as practical after
the termination or inapplicability of such contractual
restrictions and corporate law prohibitions and adverse tax
consequences referred to in this paragraph; or
(m) any Designated Entity, to the extent applicable, fails, (x)
promptly upon the reasonable request of the Managing Agents at
any time or from time to time
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prior to the applicable Stock Pledge Release Date, as the case
may be, (1) to execute, acknowledge or deliver, or to cause to
be executed, acknowledged or delivered, or to register, record
or file, or to cause to be registered, recorded or filed, any
document or instrument necessary or advisable or as Required
Lenders may from time to time reasonably deem to be necessary
or advisable in connection with the grant, creation,
preservation, perfection or maintenance, as first, prior and
perfected Liens, the Liens created, or intended to be created,
by the applicable Security Instruments, subject only to
Permitted Liens or (2) to perform or to continue to perform at
all times and from time to time all actions necessary or
advisable or reasonably deemed to be necessary or advisable by
the Required Lenders in connection with such creation,
preservation, perfection and maintenance; and (y) to repay all
Obligations and other amounts and to cause all outstanding
Letters of Credit to be terminated and the originals thereof
to be returned to the Issuing Bank as soon as practical after
receipt of the reasonable request of Managing Agents pursuant
to the foregoing clause (x);
provided, however, that the foregoing events which affect only
Restricted Subsidiaries that (a) are not guarantors of the
Obligations, and (b) are immaterial (as determined by the
Managing Agents), shall not constitute "Events of Default"
under this Agreement. It is agreed by the parties hereto that
so long as Borrower or any Restricted Subsidiary has made
reasonable efforts under the circumstances to obtain the
approvals required by Section 205(10) of the Corporations Law
of Australia (if applicable), the foregoing paragraphs (k)(2),
(l) and (m) shall not require any Restricted Subsidiaries to
provide any pledge or guaranty prohibited by corporate law
unless the requirements of such Section 205(10) of the
Corporations Law of Australia, to the extent applicable, have
been satisfied; and
(k) Any "Event of Default" as defined in the Canadian Credit
Facility or the 364 Day Credit Facility shall occur; provided
that the occurrence of a "Default" as defined in the Canadian
Credit Facility or the 364 Day Credit Facility shall
constitute a Default under this Agreement; provided further
that if such "Default" is cured or waived under the Canadian
Credit Facility or the 364 Day Credit Facility, as applicable,
then such "Default" shall no longer constitute a Default under
this Agreement.
Upon the occurrence of an Event of Default described in Section 6.1(h)(1), (2)
or (3) with respect to Borrower, the Commitments shall automatically terminate
and all of the Obligations shall thereupon be immediately due and payable,
without demand, presentment, notice of demand or of dishonor and nonpayment,
protest, notice of protest, notice of intention to accelerate, declaration or
notice of acceleration, or any other notice or declaration of any kind, all of
which are hereby expressly waived by Borrower and each Designated Entity who at
any
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time ratifies or approves this Agreement. During the continuance of any other
Event of Default, Administrative Agent at any time and from time to time upon
written instructions from Required Lenders (which, for purposes of this
sentence only, shall be determined giving effect to each Lender's outstanding
Swing Line Advances and Competitive Bid Advances) shall, by notice to Borrower
(but otherwise without notice to any other Designated Entity), declare the
Commitments to be terminated, and/or declare any or all of the Obligations
immediately due and payable, and all such Obligations shall thereupon be
immediately due and payable, without demand, presentment, notice of demand or
of dishonor and nonpayment, protest, notice of protest, notice of intention to
accelerate, declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly waived by Borrower
and each Designated Entity who at any time ratifies, approves or guaranties
this Agreement and/or require Borrower to deposit Cash Collateral with
Administrative Agent in an amount determined in accordance with paragraph (c)
of Section 2.14.
Section 6.2 Remedies. If any Default shall occur and be
continuing, each Lender or Administrative Agent on behalf of Lenders may
protect and enforce its rights under the Loan Documents by any appropriate
proceedings, including, without limitation, proceedings for specific
performance of any covenant or agreement contained in any Loan Document, and
each Lender may enforce the payment of any Obligations due it or enforce any
other legal or equitable rights which it may have. Additionally, under such
circumstances, the Required Lenders or, at the direction of Required Lenders,
the Trustee (or Collateral Agent) may proceed to protect the Lenders' rights
under the Security Instruments. All rights, remedies and powers conferred upon
Administrative Agent and Lenders under the Loan Documents are cumulative and
not exclusive of any other rights, remedies or powers available under the Loan
Documents or at law or in equity.
Section 6.3 Annulment of Acceleration. If a declaration of
acceleration is made pursuant to this Article 6, then Required Lenders, by
written notice to Borrower and Administrative Agent, may collectively rescind
and annul such declaration in its entirety; provided, that at the time such
declaration is annulled and rescinded: (a) no judgment or decree has been
entered for the payment of any moneys due pursuant to any Note or this
Agreement; (b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and this Agreement (other than principal amounts which
may have become due as a result of acceleration), including interest upon
overdue interest, to the extent payment thereof is lawful, shall have been duly
paid; and (c) each and every other Event of Default which has theretofore
occurred shall have been waived pursuant to Section 8.1 or otherwise made good
or cured.
Section 6.4 Indemnity. Borrower hereby indemnifies each Agent and
each Lender, from and against any and all liabilities, obligations, claims,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements (including reasonable fees of attorneys, accountants, experts and
advisors) of any kind or nature whatsoever (in this Section collectively called
"liabilities and costs") which to any extent (in whole or in part) may be
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imposed on, incurred by, or asserted against such Agent or such Lender as a
result of, arising out of, relating to or in connection with:
(a) the Loan Documents to which Borrower or one or more of its
Subsidiaries is a party or the rights provided therein
(including the enforcement or defense thereof);
(b) the direct or indirect application or proposed application of
the proceeds of any Loan or Letter of Credit to or for
Borrower or any of its Subsidiaries;
(c) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan or
Letter of Credit to or for Borrower or any of its
Subsidiaries;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter
(including enforcement) relating to any Environmental Law or
the condition of any facility or property owned, leased or
operated by Borrower or any of its Subsidiaries; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from,
any facility owned or operated by Borrower or any of its
Subsidiaries of any hazardous or toxic substance (including
any liabilities and costs under any Environmental Law),
regardless of whether caused by, or within the control of,
Borrower or any of its Subsidiaries; or any misrepresentation,
inaccuracy or any breach in or of Section 4.1(j) or Section
5.1(i) by or with respect to Borrower or any of its
Subsidiaries.
The foregoing indemnification shall not apply to the extent such liabilities
and costs are determined to have resulted or been caused, in whole or in part,
by the gross negligence or willful misconduct on the part of such Agent or
Lender. THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH
LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN
PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND EXCEPT AS PROVIDED BY THE
IMMEDIATELY PRECEDING SENTENCE. In the event that any claim or demand for
which Borrower would be liable to any Agent or any Lender under this Section is
asserted against or sought to be collected from any Agent or any Lender by a
third party, Agent or such Lender shall promptly notify Borrower of such claim
or demand. Borrower shall have the lesser of: (i) thirty (30) Business Days
from receipt of the above notice; or (ii) three (3) Business Days prior to the
expiration of any period after which a default judgment may be entered against
such Agent or Lender (the "Notice Period") to notify such Agent and/or Lender
whether or not Borrower desires, at the sole cost and expense of Borrower, to
defend such Agent and/or Lender against such claim or demand. In the event
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that Borrower notifies such Agent and/or Lender within the Notice Period, that
it desires to defend such Agent and/or Lender against such claim or demand,
Borrower shall have the right to settle or otherwise dispose of such claim or
demand (other than claims alleging criminal violations) on such terms as
Borrower, with the consent of the indemnified party (which consent shall not be
unreasonably withheld) shall deem appropriate; provided that:
(w) counsel designated by Borrower is reasonably
acceptable to the Managing Agents and the affected
Lender;
(x) Borrower will have acknowledged in writing that this
Section will cover any liabilities and costs in any
such claim or demand;
(y) in the sole determination of the Managing Agents and
the affected Lender, Borrower will have the financial
ability to pay such liabilities and costs; and
(z) Borrower shall thereafter consult with the Managing
Agents and the affected Lender with respect to such
claim or demand; and
provided further, that each of Agents and the affected Lender shall have the
right at all times to participate in any proceeding, at their sole cost and
expense, subject, however, to Borrower's right to control the defense of all
proceedings concerning such claim or demand.
In the event that Borrower fails to give such Agent and/or Lender such notice,
such Agent and/or Lender may defend against such claim or demand; provided,
however, that Borrower's obligation to reimburse such Agent and/or Lender shall
be limited to a single law firm of such Agent and/or Lender (unless Borrower
otherwise consents, which consent shall not be unreasonably withheld); provided
further, that Borrower shall have the right at all times to participate in any
such proceeding, at its sole cost and expense, subject, however, to the right
of such Agent and/or Lender to control the defense of all proceedings
concerning such claim or demand. As used in this Section, the terms "Agent"
and "Lender" shall refer not only to the Persons designated as such in Section
1.1 but also to each director, officer, agent, attorney, employee and
representative of such Person.
ARTICLE 7
AGENTS
Section 7.1 Appointment and Authority. NationsBank of Texas,
N.A. is hereby appointed Administrative Agent hereunder and under each other
Loan Document, CIBC Inc. is hereby appointed Documentation Agent hereunder and
under each other Loan Document,
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Morgan Guaranty Trust Company of New York is hereby appointed Documentation
Agent hereunder and under each other Loan Document and The Chase Manhattan Bank
is hereby appointed Syndication Agent hereunder and under each other Loan
Document, each Co-Agent is hereby appointed Co-Agent hereunder and under each
other Loan Document, and each of the Lenders hereby authorizes each such Agent
to act as the agent of such Lender hereunder and each other Loan Document to
the extent provided herein or therein. In addition, each Lender hereby
irrevocably authorizes Administrative Agent, and Administrative Agent hereby
undertakes, to receive payments of principal, interest due hereunder as
specified herein and to act as Collateral Agent under the Security Instruments.
In addition, each Lender hereby authorizes each Agent, and each Agent hereby
undertakes to take all other actions and to exercise such powers under the Loan
Documents as are specifically delegated to such Agent by the terms hereof or
thereof, together with all other powers reasonably incidental thereto. No
Co-Agent has any duties or responsibilities whatsoever as Co-Agent (as opposed
to its capacity as Lender) under or in connection with this Agreement or any of
the Loan Documents. The relationship of each Agent to Lender is only that of
one commercial bank acting as administrative agent for others, and nothing in
the Loan Documents shall be construed to constitute any Agent a trustee or
other fiduciary for any holder of any of the Notes or of any participation
therein or in the LC Obligations, nor to impose on any Agent duties and
obligations other than those expressly provided for in the Loan Documents.
None of the Agents shall have implied duties to Lenders, or any obligations to
Lenders to take any action under the Loan Documents, except any action by an
Agent specifically provided by the Loan Documents to be taken by such Agent.
With respect to any matters not expressly provided for in the Loan Documents
and any matters which the Loan Documents place within the discretion of any
Agent, such Agent shall not be required to exercise any discretion or take any
action, and each such Agent may request instructions from Lenders with respect
to any such matter, in which case such Agent shall be required to act or to
refrain from acting (and shall be fully protected and free from liability to
any and all Lenders and Agents in so acting or refraining from acting) upon the
instructions of Required Lenders (including itself); provided, however, that no
Agent shall be required to take any action which exposes it to a risk of
personal liability that it considers unreasonable or which is contrary to the
Loan Documents or to applicable law unless indemnified to its satisfaction by
Lenders or Borrower. Upon receipt by Administrative Agent from Borrower of any
communication calling for action on the part of Lenders or upon notice from any
Lender to Administrative Agent of any Default or Event of Default,
Administrative Agent shall promptly notify each Lender thereof.
Section 7.2 Agent's Reliance. No Agent or any of their
respective directors, officers, agents, attorneys, or employees shall be liable
for any action taken or omitted to be taken by any of them under or in
connection with the Loan Documents, including their negligence of any kind,
except that each shall be liable for its own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, each Agent:
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(a) may treat the payee of any Note as the holder thereof until
Administrative Agent receives written notice of the assignment
or transfer thereof in accordance with this Agreement, signed
by such payee and in form satisfactory to Administrative
Agent;
(b) may consult with legal counsel (including counsel for
Borrower), independent public accountants and other experts
selected by such Agent and shall not be liable for any action
taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts;
(c) makes no warranty or representation to any Lender or to any
other Agent and shall not be responsible to any Lender or
Agent for any statements, warranties or representations made
in or in connection with the Loan Documents by any other
Person;
(d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or
conditions of the Loan Documents on the part of any Designated
Entity or to inspect the property (including the books and
records) of any Designated Entity;
(e) shall not be responsible to any Lender or to any other Agent
for the due execution (other than its own due execution and
delivery), legality, validity, enforceability, genuineness,
existence, sufficiency or value of any Loan Document, the
Credit Facility Agreement or any instrument or document
furnished in connection herewith, or any collateral;
(f) may rely upon the representations and warranties of any
Designated Entity and the Lenders in exercising its powers
hereunder;
(g) shall not be responsible for the satisfaction of any condition
specified in Article 3, except receipt by an Agent of items
required to be delivered to such Agent; and
(h) shall incur no liability under or in respect of the Loan
Documents by acting upon any notice, consent, certificate or
other instrument or writing (including any telecopy, telegram,
cable or telex) believed by it to be genuine and signed or
sent by the proper Person or Persons.
Section 7.3 Lenders' Credit Decisions. Each Lender acknowledges
that it has, independently and without reliance upon any Agent or any other
Lender, made its own analysis of Designated Entities and the transactions
contemplated hereby and its own independent decision to enter into this
Agreement and the other Loan Documents. Each Lender also
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acknowledges that it will, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents.
Section 7.4 Indemnification. Each Lender agrees to indemnify
each Agent (to the extent not reimbursed by Borrower within ten (10) days after
demand) from and against such Lender's Percentage Share of any and all
liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (including reasonable fees
of attorneys, accountants, experts, and advisors) of any kind or nature
whatsoever (in this Section collectively called "liabilities and costs") which
to any extent (in whole or in part) may be imposed on, incurred by, or asserted
against such Agent growing out of, resulting from or in any other way
associated with any of the Loan Documents and the transactions and events
(including, without limitation, the enforcement thereof) at any time associated
therewith or contemplated therein. THE FOREGOING INDEMNIFICATION SHALL APPLY
WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT
CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY
ANY AGENT, PROVIDED ONLY THAT NO LENDER SHALL BE OBLIGATED UNDER THIS SECTION
TO INDEMNIFY AN AGENT FOR THAT PORTION, IF ANY, OF ANY LIABILITIES AND COSTS
WHICH IS THE SOLE RESULT OF SUCH AGENT'S OWN INDIVIDUAL GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT, AS DETERMINED IN A FINAL JUDGMENT OF A COURT OF COMPETENT
JURISDICTION. Cumulative of the foregoing, each Lender agrees to reimburse
Administrative Agent, each Documentation Agent and Syndication Agent promptly
upon demand for such Lender's Percentage Share of any costs and expenses to be
paid to Administrative Agent, the Documentation Agent or the Syndication Agent
by Borrower under Section 5.1(h) to the extent that Administrative Agent, the
Documentation Agent or the Syndication Agent is not timely reimbursed for such
expenses by Borrower as provided in such section. As used in this Section the
term "Agents" shall refer not only to the Person(s) designated as such in
Section 1.1 but also to each director, officer, agent, attorney, employee and
representative of such Person(s).
Section 7.5 Rights as Lender. In their respective capacity as a
Lender, each Agent shall have the same rights and obligations as any Lender and
may exercise such rights as though it were not an Agent. Each Agent may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with any of Designated Entities or their
Affiliates, all as if it were not an Agent hereunder and without any duty to
account therefor to any other Lender.
Section 7.6 Sharing of Set-Offs and Other Payments. Each Agent
and Lender agrees that if it shall, whether through the exercise of rights
under security documents or rights of banker's lien, setoff, or counterclaim
against any Designated Entity or otherwise, obtain
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payment of a portion of the aggregate Obligations owed to it (other than in
respect of its Swing Line Advances and its Competitive Bid Advances) which,
taking into account all distributions made by Administrative Agent under
Section 2.11, causes such Agent or such Lender to have received more than it
would have received had such payment been received by Administrative Agent and
distributed pursuant to Section 2.11 (or, in the case of Swing Line Advances
paid as provided in Section 2.5(c) or in the case of Competitive Bid Advances
paid as provided in Section 2.22(b)), then it shall be deemed to have
simultaneously purchased and shall be obligated to purchase interests in the
Obligations as necessary to cause Administrative Agent and all Lenders to share
all payments (other than in respect of Swing Line Advances and Competitive Bid
Advances) as provided for in Section 2.11, and such other adjustments shall be
made from time to time as shall be equitable to ensure that all Agents and all
Lenders share all payments of Obligations (other than in respect of its Swing
Line Advances and Competitive Bid Advances) as provided in Section 2.11. If
any Agent or any Lender, whether in connection with setoff of amounts which
might be subject to setoff or otherwise, receives collateral or other
protection for its Obligations or such amounts which might be subject to
setoff, such Agent or Lender agrees, promptly upon demand, to take such action
necessary so that all Agents and all Lenders share in the benefits of such
collateral ratably in proportion to the Obligations owing to each of them.
Nothing herein contained shall in any way affect the right of any Agent or any
Lender to obtain payment (whether by exercise of rights of banker's lien,
set-off or counterclaim or otherwise) of indebtedness other than the
Obligations. Borrower expressly consents to the foregoing arrangements and
agrees that any holder of any such interest or other participation in the
Obligations, whether or not acquired pursuant to the foregoing arrangements,
may to the fullest extent permitted by law exercise any and all rights of
banker's lien, set-off, or counterclaim as fully as if such holder were a
holder of the Obligations in the amount of such interest or other
participation. If all or any part of any funds transferred pursuant to this
Section is thereafter recovered from the seller under this Section which
received the same, the purchase provided for in this Section shall be deemed to
have been rescinded to the extent of such recovery, together with interest, if
any, if interest is required pursuant to court order to be paid on account of
the possession of such funds prior to such recovery.
Section 7.7 Investments. Whenever Administrative Agent in good
faith determines that it is uncertain about how to distribute to Lenders any
funds which it has received, or whenever Administrative Agent in good faith
determines that there is any dispute among Lenders about how such funds should
be distributed, Administrative Agent may choose to defer distribution of the
funds which are the subject of such uncertainty or dispute. If Administrative
Agent in good faith believes that the uncertainty or dispute will not be
promptly resolved, or if Administrative Agent is otherwise required to invest
funds pending distribution to Lenders, Administrative Agent may invest such
funds pending distribution (at the risk of the subject Borrower); all interest
on any such investment shall be distributed upon the distribution of such
investment and in the same proportion and to the same Persons as such
investment. All moneys received by Administrative Agent for distribution to
Lenders (other than to the
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Person who is Administrative Agent in its separate capacity as a Lender) shall
be held by Administrative Agent pending such distribution solely as
Administrative Agent for such Lenders, and Administrative Agent shall have no
equitable title to any portion thereof.
Section 7.8 Benefit of Article 7. The provisions of this Article
(other than the following Section 7.9) are intended solely for the benefit of
Agent and Lenders, and no Designated Entity shall be entitled to rely on any
such provision or assert any such provision in a claim or defense against Agent
or any Lender. Agent and Lenders may waive or amend such provisions as they
desire without any notice to or consent of any Designated Entity.
Section 7.9 Resignation and Removal. Any Agent may resign at any
time by giving written notice thereof to Lenders and Borrower. Each such
notice shall set forth the date of such resignation. Majority Lenders or
Borrower, with the consent (which shall not be unreasonably withheld) of
Majority Lenders (other than Agent to be removed) shall be entitled to remove
any Agent. Upon any such resignation or removal, Borrower may, with the
written concurrence (which shall not be unreasonably withheld) of Majority
Lenders (exclusive of any such resigned or removed Agent), designate a
successor Agent. If, within fifteen (15) days after the date of such
resignation or removal, Borrower makes no such designation or such written
concurrence is not given, Majority Lenders (exclusive of any such resigned or
removed Agent) shall, with the consent of Borrower (which consent shall not be
unreasonably withheld or delayed), have the right to appoint a successor Agent.
A successor must be appointed for any retiring Managing Agent, and such
Managing Agent's resignation shall become effective when such successor accepts
such appointment. Upon the acceptance of any appointment as a Managing Agent
hereunder by a successor Managing Agent and the satisfaction of all obligations
on the part of such retiring or removed Managing Agent necessary to facilitate
succession, the retiring or removed Managing Agent, as the case may be, shall
be discharged from its duties and obligations under this Agreement and the
other Loan Documents. After any Agent's resignation or removal hereunder, the
provisions of this Article 7 shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under the Loan
Documents. Any out-going Agent shall promptly execute all assignments and
other documents necessary to effectuate the transfer of the agency in
connection with this Agreement and shall promptly deliver all original
documents and any collateral in its possession to the successor Agents.
ARTICLE 8
MISCELLANEOUS
Section 8.1 Waivers and Amendments. No failure or delay (whether
by course of conduct or otherwise) by any Agent or any Lender in exercising any
right, power or remedy which any Agent or Lender may have under any of the Loan
Documents shall operate as a waiver thereof or of any other right, power or
remedy, nor shall any single or partial exercise
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by any Agent or Lender of any such right, power or remedy preclude any other or
further exercise thereof or of any other right, power or remedy. No waiver of
any provision of any Loan Document and no consent to any departure therefrom
shall ever be effective unless it is in writing and signed as provided below in
this Section, and then such waiver or consent shall be effective only in the
specific instances and for the purposes for which given and to the extent
specified in such writing. No notice to or demand on any Designated Entity
shall in any case of itself entitle any Designated Entity to any other or
further notice or demand in similar or other circumstances. This Agreement and
the other Loan Documents set forth the entire understanding between the parties
hereto with respect to the transactions contemplated herein and therein and
supersede all prior discussions and understandings with respect to the subject
matter hereof and thereof, and no waiver, consent, release, modification or
amendment of or supplement to this Agreement or the other Loan Documents shall
be valid or effective against any party hereto unless the same is in writing
and signed by (a) if such party is a Designated Entity, by such Designated
Entity, (b) if such party is an Agent, by such Agent and (c) if such party is a
Lender, by such Lender or by Administrative Agent on behalf of Lenders with the
written consent of Required Lenders (or without further consent than that
already provided herein in the circumstances provided in Section 8.7).
Notwithstanding the foregoing or anything to the contrary herein or in any
other Loan Document, no Agent shall, without the prior consent of each Lender,
execute and deliver on behalf of any Lender any waiver or amendment which
would:
(i) increase the Commitment of such Lender or subject such Lender
to any additional obligations;
(ii) reduce or forgive any fees hereunder, or the principal of, or
interest on, such Lender's Notes or LC Obligations;
(iii) postpone any date fixed for any payment of any fees hereunder,
or principal of, or interest on, such Lender's Notes or LC
Obligations;
(iv) amend the definitions herein of "Required Lenders" or
"Majority Lenders" or otherwise change the aggregate amount of
Percentage Shares which is required for Administrative Agent,
any other Agent, Lenders or any of them to take any particular
action under the Loan Documents;
(v) release collateral (except as expressly contemplated by this
Agreement) or any Borrower from its obligation to pay such
Lender's Notes or LC Obligations or any Restricted Subsidiary
from its Guaranty (except upon the Restricted Subsidiary
becoming an Unrestricted Subsidiary as specified in this
Agreement);
(vi) amend this Section 8.1;
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(vii) extend the Loan Commitment Period;
(ix) amend, modify or waive any provision applicable to the
indemnification of any Lender;
(x) consent to the assignment or transfer by any Designated Entity
of any of its rights or obligations under this Agreement or
the other Loan Documents; or
(xi) amend, modify or waive the rights and obligations of the
Issuing Bank or the Agents; provided, that no obligation to
any Designated Entity of any Lender or Issuing Bank or any
Agent may be amended, modified or waived without the written
approval of Borrower, which approval shall not be unreasonably
withheld.
Notwithstanding the foregoing or anything to the contrary herein or in
any other Loan Document, no provision of Article 7 may be amended in any way
which impacts or affects any Agent in its capacity as an Agent (as opposed to
its capacity as a Lender) without the prior written consent of such Agent.
Except as provided in the preceding three sentences or as expressly provided in
any Loan Document, the Required Lenders may waive, modify, amend or supplement
this Agreement and each of the other Loan Documents.
Section 8.2 Survival of Agreements; Cumulative Nature. Each
Designated Entity's various representations, warranties, covenants, indemnities
and agreements in the Loan Documents shall survive the execution and delivery
of this Agreement and the other Loan Documents and the performance hereof and
thereof, including the making or granting of the Loans, the issuance of the
Letters of Credit and the delivery of the Notes, and the other Loan Documents,
and shall further survive until all of the Obligations are paid in full to
Agents and Lenders, all Letters of Credit have expired or been canceled and all
of Agents' and Lenders' obligations to Borrower are terminated, provided that,
notwithstanding the foregoing, certain Obligations of certain Designated
Entities under their respective Guaranties shall survive or be reinstated as
provided in such Guaranties. The representations, warranties, indemnities, and
covenants made by any Designated Entity in any Loan Documents, and the rights,
powers, and privileges granted to Agents and Lenders in the Loan Documents, are
cumulative.
Section 8.3 Notices. All notices, requests, consents, demands
and other communications required or permitted under any Loan Document shall be
in writing, unless otherwise specifically provided in such Loan Document
(provided that Administrative Agent may give telephonic notices to the other
Agents and Lenders), and shall be deemed sufficiently given or furnished if
delivered by personal delivery, by telecopy (with telephonic confirmation of
transmission), by delivery service with proof of delivery, or by registered or
certified United States mail, postage prepaid, to Borrower at the address of
Borrower specified on the signature pages hereto and to each Agent and each
Lender at their addresses specified on the
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signature pages hereto (unless changed by similar notice in writing given by
the particular Person whose address is to be changed). Any such notice or
communication shall be deemed to have been given:
(a) in the case of personal delivery or delivery service, as of
the date of first attempted delivery during normal business
hours at the address provided herein;
(b) in the case of telecopy, upon receipt; or
(c) in the case of registered or certified United States mail,
three (3) days after deposit in the mail, postage prepaid;
provided, however, that no Request for Advance or Rate
Election shall become effective until actually received by
Administrative Agent and no request for the issuance of a
Letter of Credit or Letter of Credit Application shall become
effective until actually received by the Issuing Bank.
Section 8.4 Parties in Interest. All grants, covenants and
agreements contained in the Loan Documents shall bind and inure to the benefit
of the parties thereto and their respective successors and assigns; provided,
however, that no Designated Entity may assign or transfer any of its rights or
delegate any of its duties or obligations under any Loan Document without the
prior written consent of all Lenders.
Section 8.5 Governing Law. THE LOAN DOCUMENTS SHALL BE DEEMED
CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS OF THE STATE OF TEXAS AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. CHAPTER 15 OF TEXAS REVISED CIVIL STATUTES
ANNOTATED ARTICLE 5069 (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS
AND REVOLVING TRI-PARTY ACCOUNTS) DOES NOT APPLY TO THIS AGREEMENT OR TO THE
NOTES.
Section 8.6 Limitation on Interest. It is the intention of the
parties hereto to conform strictly to applicable usury laws and, anything
herein or any other Loan Document to the contrary notwithstanding, the
obligations of Designated Entities to a Lender or an Agent under this Agreement
and the Loan Documents shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt thereof would be
contrary to provisions of law applicable to such Lender or Agent limiting rates
of interest which may be charged or collected by such Lender or Agent.
Accordingly, if the transactions contemplated hereby would be usurious under
laws applicable to a Lender or Agent (including the federal and state laws of
the United States of America or of any other jurisdiction whose laws may be
mandatorily applicable to such Lender or Agent notwithstanding anything to the
contrary in
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this Agreement or any other Loan Document) then, in that event, notwithstanding
anything to the contrary in this Agreement or any other Loan Document, it is
agreed as follows:
(a) the provisions of this Section shall govern and control;
(b) the aggregate of all consideration which constitutes interest
under applicable law that is contracted for, taken, reserved,
charged or received under this Agreement, or under any of the
aforesaid agreements or otherwise in connection with this
Agreement or any other Loan Document by such Lender or Agent
shall under no circumstances exceed the maximum amount of
interest allowed by applicable law (such maximum lawful
interest rate, if any, with respect to each Lender and each
Agent herein called the "Maximum Lawful Rate"), and any excess
shall be canceled automatically and if theretofore paid shall
be credited to the relevant Designated Entity by such Lender
or Agent (or, if such consideration shall have been paid in
full, such excess refunded to the relevant Designated Entity);
(c) all sums paid, or agreed to be paid, to such Lender or Agent
for the use, forbearance and detention of the indebtedness of
the relevant Designated Entity to such Lender or Agent
hereunder or under any other Loan Document shall, to the
extent permitted by laws applicable to such Lender or Agent,
as the case may be, be amortized, prorated, allocated and
spread throughout the full term of such indebtedness until
payment in full so that the actual rate of interest is uniform
throughout the full term thereof;
(d) if at any time the interest provided pursuant to any provision
of this Agreement or any other Loan Document, together with
any other fees payable pursuant to this Agreement or any other
Loan Document and deemed interest under laws applicable to
such Lender or Agent, exceeds the amount which would have
accrued at the Maximum Lawful Rate, the amount of interest and
any such fees to accrue to such Lender or Agent pursuant to
this Agreement or any other Loan Document shall be limited,
notwithstanding anything to the contrary in this Agreement or
any other Loan Document, to that amount which would have
accrued at the Maximum Lawful Rate, but any subsequent
reductions, as applicable, shall not reduce the interest to
accrue to such Lender or Agent pursuant to this Agreement or
any other Loan Document below the Maximum Lawful Rate until
the total amount of interest accrued pursuant to this
Agreement or such other Loan Document, as the case may be, and
such fees deemed to be interest equals the amount of interest
which would have accrued to such Lender or Agent if a varying
rate of interest per annum equal to the interest provided
pursuant to Section 2.3 or any other relevant Section hereof
(other than this Section) and the Notes, as applicable, had at
all times been in
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effect, plus the amount of fees which would have been received
but for the effect of this Section; and
(e) if the total amount of interest paid by or accrued with
respect to the Obligations of Borrower, together with any
other fees payable pursuant to this Agreement and the other
Loan Documents and deemed interest under laws applicable to
such Lender or Agent pursuant to this Agreement or any other
Loan Document under the foregoing provisions of this Section
is less than the total amount of interest which would have
accrued if a varying rate per annum equal to the interest
provided pursuant to Section 2.3 or any other relevant section
hereof (other than this Section), as applicable, had at all
times been in effect and all fees provided for in this
Agreement and the other Loan Documents had been paid, then
Borrower severally agrees to pay to such Lender or Agent an
amount equal to the difference between, (i) the lesser of, (x)
the amount of interest and fees which would have accrued if
the Maximum Lawful Rate had at all times been in effect, and
(y) the amount of interest and fees which would have accrued
if a varying rate per annum equal to the interest provided
pursuant to Section 2.3 or such other relevant section of this
Agreement (other than this Section) and the Notes, as
applicable, had at all times been in effect and all fees had
been paid, and (ii) the amount of interest and fees accrued in
accordance with the other provisions of this Agreement and
other Loan Documents.
For purposes of Chapter 1D of Article 5069 of the Texas Credit Title,
Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article
5069-1.04, Vernon's Texas Civil Statutes, as amended), to the extent, if any,
applicable to any Lender or Agent, Borrower and each other Designated Entity
agrees that the Maximum Lawful Rate shall be the "applicable interest rate
ceiling" as defined in said Chapter, provided that such Lender or Agent, as
applicable, may also rely, to the extent permitted by applicable laws of the
State of Texas and the United States of America, on alternative maximum rates
of interest under other laws applicable to such Lender or Agent from time to
time if greater.
Section 8.7 Termination; Limited Survival. In its sole and
absolute discretion, Borrower may, at any time that no Obligations or other
amounts are owing and no Letters of Credit are outstanding, elect to terminate
this Agreement in a written notice delivered to Administrative Agent. Upon
receipt by Administrative Agent of such a notice, if no Obligations or other
amounts are then owing and no Letters of Credit are outstanding, this Agreement
and all other Loan Documents shall thereupon be terminated and the parties
thereto released from all prospective obligations hereunder or thereunder.
Notwithstanding the foregoing or anything herein to the contrary, any waivers
or admissions made by any Designated Entity in any Loan Document, any
Obligations under Sections 2.16 through 2.20, any obligations which any
Designated Entity may have to indemnify or compensate any Agent, any Issuing
Bank, or any Lender in connection with matters arising upon or prior to the
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<PAGE> 84
termination of this Agreement and any obligations which any Lender may have to
indemnify or compensate any Agent or Issuing Bank in connection with matters
arising upon or prior to the termination of this Agreement shall survive any
termination of this Agreement or any other Loan Document and the release of
Designated Entities. At the request and expense of Borrower, Managing Agents
shall prepare and execute all necessary instruments to reflect and effect such
termination of the Loan Documents including, without limitation, the Security
Instruments. Managing Agents are hereby authorized, jointly and severally, to
execute all such instruments on behalf of all Lenders, without the joinder of
or further action or consent by any Lender.
Section 8.8 Assignments; Participations.
(a) Each Lender shall have the right to sell, assign or transfer
all or any part of such Lender's Notes, Loans, Commitments and
LC Obligations hereunder to one or more Affiliates, Lenders,
financial institutions, pension plans, investment funds, or
similar Persons or to a Federal Reserve Bank; provided, that
in connection with each sale, assignment or transfer (other
than to an Affiliate, a Lender or a Federal Reserve Bank), the
applicable Lender will consider the opinion and recommendation
of Borrower, which opinion and recommendation shall in no way
be binding upon such Lender, and each such sale, assignment,
or transfer (other than to an Affiliate, a Lender or a Federal
Reserve Bank) shall be with the consent of Borrower (unless an
Event of Default has occurred and is continuing), which
consent will not be unreasonably withheld, and with the
consent of Administrative Agent, which consent will not be
unreasonably withheld, and the assignee, transferee or
recipient shall have, to the extent of such sale, assignment,
or transfer, the same rights, benefits and obligations as it
would if it were such Lender and a holder of such Notes,
Commitments and LC Obligations, including, without limitation,
the right to vote on decisions requiring consent or approval
of all Lenders, Majority Lenders or Required Lenders and the
obligation to fund its Loans; provided further, that (1) each
Lender in making each such sale, assignment, or transfer must
sell, assign or transfer a pro rata portion of its Commitments
and each Loan (other than a Swing Line Advance or a
Competitive Bid Advance) and LC Obligation made or held by
such Lender, (2) each such sale, assignment, or transfer
(other than to an Affiliate, a Lender or a Federal Reserve
Bank) shall be in an aggregate principal amount not less than
$10,000,000, (3) each remaining Lender shall at all times
maintain Commitments then outstanding in an aggregate
principal amount at least equal to $10,000,000; (4) no Lender
may offer to sell its Notes, Commitments, LC Obligations or
Loans or interests therein in violation of any securities
laws; and (5) no such assignments (other than to a Federal
Reserve Bank) shall become effective until the assigning
Lender delivers to Administrative Agent and Borrower copies of
all written assignments and other
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<PAGE> 85
documents evidencing any such assignment and an Agreement to
be Bound in the form of Exhibit L, providing for the
assignee's ratification and agreement to be bound by the terms
of this Agreement and the other Loan Documents. An assignment
fee in the amount of $3,500 for each such assignment (other
than to an Affiliate, a Lender or a Federal Reserve Bank) will
be payable to Administrative Agent by assignor or assignee.
Within five (5) Business Days after its receipt of copies of
any assignment and the other documents relating thereto and
the following described Notes, Borrower shall execute and
deliver to Administrative Agent (for delivery to the relevant
assignee) new Notes evidencing such assignee's assigned Loans
and Commitments and if the assignor Lender has retained a
portion of its Loans, replacement Notes in the principal
amount of the Loans and Commitments retained by the assignor
Lender (except as provided in the last sentence of this
paragraph (a) such Notes to be in exchange for, but not in
payment of, the Notes held by such Lender). On and after the
effective date of an assignment hereunder, the assignee shall
for all purposes be a Lender, party to this Agreement and any
other Loan Document executed by the Lenders and shall have all
the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party
thereto, and no further consent or action by Borrower, Lenders
or any Agent shall be required to release the transferor
Lender, with respect to the Commitments, the LC Obligations
and the Loans assigned to such assignee and the transferor
Lender shall henceforth be so released.
(b) Each Lender shall have the right to grant participations in
all or any part of such Lender's Notes, Commitments, LC
Obligations, and Loans hereunder to one or more pension plans,
investment funds, financial institutions or other Persons;
provided, that:
(1) each Lender granting a participation shall retain the
right to vote hereunder, and no participant shall be
entitled to vote hereunder on decisions requiring
consent or approval of Lenders, Majority Lenders or
Required Lenders (except as set forth in (3) below);
(2) in the event any Lender grants a participation
hereunder, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto
for the performance of such obligations, such Lender
shall remain the holder of any such Notes for all
purposes under the Loan Documents, and each Agent,
each Lender and Borrower shall be entitled to deal
with the Lender granting a participation in the same
manner as if no participation had been granted; and
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<PAGE> 86
(3) no participant shall ever have any right by reason of
its participation to exercise any of the rights of
Lenders hereunder, except that any Lender may agree
with any participant that such Lender will not,
without the consent of such participant (which
consent may not be unreasonably withheld), consent to
any amendment or waiver described in Section 8.1
requiring approval of 100% of the Lenders.
(c) It is understood and agreed that any Lender may provide to
assignees and participants and prospective assignees and
participants financial information and reports and data
concerning Borrower's properties and operations which was
provided to such Lender pursuant to this Agreement, subject to
Section 8.9.
(d) Upon the reasonable request of either of the Managing Agents
or Borrower, each Lender will identify those to whom it has
assigned or participated any part of its Notes, LC Obligations
or Loans, and provide the amounts so assigned or participated.
Section 8.9 Confidentiality. Each Agent and each Lender agrees
that it (a) will maintain the confidentiality of all non-public information
from any Designated Entity or any Subsidiary of Borrower obtained pursuant to
the terms of this Agreement or any other Loan Document in accordance with safe
and sound banking practices, and (b) will not use such confidential information
for any purpose other than in connection with this Agreement; provided,
however, that this restriction shall not apply to information which (w) has at
the particular time in question entered the public domain, or been
independently developed without the use or incorporation of any non-public
information provided to such Agent or Lender by any Designated Entity or any
Subsidiary of Borrower by such Agent or such Lender other than through
disclosure by such Agent or such Lender in violation of this Section, (x) is
required to be disclosed by law or by any order, rule, regulation or legal
process (whether valid or invalid) of any court or Governmental Authority, (y)
is furnished to any other Lender or to any purchaser or prospective purchaser
of participations, assignments or other interests in any Loan, Note, LC
Obligation or Commitment that has executed and delivered to Borrower an
agreement containing terms substantially similar to this Section and reasonably
acceptable to Borrower, to keep such information confidential or (z) is
disclosed to such Lender's or Agent's examiners, Affiliates, outside auditors,
counsel and other professional advisors who have a need for such information in
connection with this Agreement and who are advised of the confidential nature
of such information. As used in this Section, the terms "Agent" and "Lender"
shall refer not only to the Persons designated as such in Section 1.1, but also
to each director, Affiliate, officer, agent, attorney, employee and
representative of such Person. Notwithstanding any other provisions of this
Agreement, the terms of this Section shall survive the termination of this
Agreement for a period of three (3) years.
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<PAGE> 87
Section 8.10 Severability. If any term or provision of any Loan
Document shall be determined to be illegal or unenforceable in any
jurisdiction, such term or provision shall, as to such jurisdiction, be illegal
or unenforceable, without affecting the remaining provisions in that
jurisdiction or the legality or enforceability of such terms or conditions in
any other jurisdiction.
Section 8.11 Counterparts. This Agreement may be separately
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to
constitute one and the same Agreement.
Section 8.12 WAIVER OF JURY TRIAL, PUNITIVE DAMAGES. EACH OF THE
BORROWER, AGENTS AND LENDERS HEREBY (I) IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF,
UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED
THEREBY OR ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY; (II) IRREVOCABLY
WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES; (III) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (IV) ACKNOWLEDGES THAT
IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
Section 8.13 Several Obligations. The respective obligations of
Lenders hereunder are several and not joint and no Lender shall be the partner
or agent of any other (except to the extent to which an Agent is authorized to
act as such). The failure of any Lender to perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder. This Agreement is not intended to, and shall not be construed so as
to, confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
Section 8.14 Nonliability of Lenders. The relationship between
Borrower on the one hand and Lenders and Agents on the other hand shall be
solely that of borrower and lender. None of the Agents nor any Lender shall
have any fiduciary responsibilities to Borrower or any of its respective
Subsidiaries. None of the Agents nor any Lender undertakes
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<PAGE> 88
any responsibility to Borrower or any of their respective Subsidiaries to
review or inform Borrower of any matter in connection with any phase of
Borrower's or such Subsidiary's business or operations.
Section 8.15 Setoff. In addition to, and without any limitation
of, any rights of the Lenders under applicable law, if Borrower becomes
insolvent, however evidenced, or any Event of Default or Default occurs and the
maturity of the Obligations has been accelerated, any indebtedness from any
Lender to Borrower (including all account balances, whether provisional or
final and whether or not collected or available) may be offset and applied
toward the payment of the Obligations owing to such Lender, whether or not the
Obligations, or any part thereof, shall then be due and payable.
Section 8.16 Release of Liens. Upon the date of execution and
delivery of a Guaranty of the type referred to in clause (i) of the definition
of "Guaranty" by a Restricted Subsidiary the capital stock of which has been
pledged (each such date, a "Stock Pledge Release Date"), the Collateral Agent
shall release and discharge, at the cost or expense of Borrower, the Pledge
Agreement covering such Subsidiary's capital stock, all of Lenders' and
Collateral Agent's rights and interests in such Pledge Agreement and all liens,
security interests, pledges and encumbrances created or existing under or
pursuant to such Pledge Agreement.
SECTION 8.17 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE
LENDERS OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF TEXAS OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF TEXAS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
COLLATERAL AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND
THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
TEXAS. FOR THE PURPOSE OF ANY ACTION OR PROCEEDING INSTITUTED IN THE FEDERAL
OR STATE COURTS OF TEXAS, HOLDINGS HEREBY IRREVOCABLY DESIGNATES BORROWER WITH
OFFICES
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<PAGE> 89
ON THE DATE HEREOF AT 303 WEST WALL STREET, SUITE 101, MIDLAND, TEXAS 79701 TO
RECEIVE FOR AND ON BEHALF OF HOLDINGS, SERVICES OF PROCESS IN TEXAS. BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
TO THE EXTENT THAT BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, BORROWER HEREBY IRREVOCABLY
WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
Section 8.18 Assumption of Prior Indebtedness. Borrower hereby
assumes effective on the Effective Date, and Pioneer USA has assigned and
hereby assigns to Borrower, all of the Prior Indebtedness under the Existing
Credit Agreement (including any and all outstanding LC Obligations).
Section 8.19 Renewal, Extension or Rearrangement. All provisions
of this Agreement and any other Loan Document relating to the Notes or the
other Obligations (including LC Obligations) shall apply with equal force and
effect to each and all promissory notes or other agreements or instruments
hereafter executed which in whole or in part represent a renewal, extension,
increase or rearrangement of any part of the original Notes or Obligations.
Section 8.20 Entire Agreement. THIS WRITTEN AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
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<PAGE> 90
IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
BORROWER:
PIONEER NATURAL RESOURCES COMPANY
By:
--------------------------------------
Name: M. Garrett Smith
Title: Executive Vice President and
Chief Financial Officer
Address: 1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
Attention: M. Garrett Smith
Telephone: (972) 402-7013
Telecopy: (972) 402-7028
with a copy to:
303 West Wall, Suite 101
P.O. Box 3178
Midland, Texas 79701
Attention: Curt Kamradt
Telephone: (915) 571-3171
Telecopy: (915) 571-5696
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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LENDERS:
NATIONSBANK OF TEXAS, N.A., individually
and as Administrative Agent and as
Collateral Agent
By:
--------------------------------------
Name: Frank K. Stowers
Title: Vice President
Address: 303 W. Wall
P. O. Box 1599
Midland, Texas 79701
Attention: Mr. Frank K. Stowers
Telephone: (915) 685-2179
Telecopy: (915) 685-2009
with further notice to:
901 Main Street, 64th Floor
Dallas, Texas 75202
Attention: Mr. E. Murphy Markham IV
Telephone: (214) 508-1251
Telecopy: (214) 508-1285
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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CIBC INC., individually and as Documentation
Agent
By:
------------------------------------------
Name:
Title:
Address: 2727 Paces Ferry Road
Suite 1200
Atlanta, GA 30339
Attention:
----------------------------
Telephone: (770) 319-4824
Telecopy: (770) 319-4950
with further notice to:
2 Houston Center
909 Fannin Street, Suite 1200
Houston, Texas 77010
Attention: Mr. Paul Jordan
Telephone: (713) 655-5245
Telecopy: (713) 650-3727
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
individually and as Documentation Agent
By:
--------------------------------------
Name:
Title:
Address: 60 Wall Street, 22nd Floor
New York, New York 10260
Attention: Mr. Philip McNeal
Telephone: (212) 648-7181
Telecopy: (212) 648-5023
with further notice to:
Sandra H. Doherty
500 Christiana Stanton Road
Newark, DE 19713-2107
Telephone: (302) 634-8122
Telecopy: (302) 634-1092
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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THE CHASE MANHATTAN BANK, individually
and as Syndication Agent
By:
------------------------------------
Name:
Title:
Address: 712 Main Street, 5th Floor
P. O. Box 2558
Houston, Texas 77252-8086
Attention: Mr. Robert Mertensotto
Telephone: (713) 216-4147
Telecopy: (713) 216-4117
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, individually and as
Co-Agent
By:
-------------------------------------
Name:
Title:
Address: 3 Allen Center
333 Clay Street, Suite 4550
Houston, TX 77002
Attention: Mr. Ron McKaig
Telephone: (713) 651-4881
Telecopy: (713) 651-4841
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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THE BANK OF NEW YORK, individually and
as Co-Agent
By:
-------------------------------------
Name:
Title:
Address: One Wall Street, 19th Floor
New York, New York 10286
Attention: Mr. Ray Palmer
Telephone: (212) 635-7834
Telecopy: (212) 635-7923
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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THE BANK OF NOVA SCOTIA, individually
and as Co-Agent
By:
------------------------------------
Name:
Title:
Address: 600 Peachtree Street N.E.
Suite 2700
Atlanta, Georgia 30308
Attention: Mr. Cleve Bushey
Telephone: (404) 877-1500
Telecopy: (404) 888-8998
with further notice to:
Mr. Jamie Conn
1100 Louisiana, Suite 3000
Houston, TX 77002
Telephone: (713) 759-3426
Telecopy: (713) 752-2425
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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ROYAL BANK OF CANADA, individually and as
Co-Agent
By:
----------------------------------------
Name:
Title:
Address: Financial Square
32 Old Slip St.
New York, New York
10005-3531
Attention: Loan Administrator
Telephone: (212) 428-6321
Telecopy: (212) 428-2372
W/copy to:
Address: 12450 Greens Point Drive
Suite 1450
Houston, Texas 77060
Attention: Ms. Linda Stephens
Telephone: (281) 874-5669
Telecopy: (281) 874-0081
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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UNION BANK OF CALIFORNIA, N.A.,
individually and as Co-Agent
By:
-----------------------------------
Name:
Title:
Address: 500 North Akard, Suite 4200
Dallas, Texas 75201
Attention: Mr. Randy Osterberg
Telephone: (214) 922-4200
Telecopy: (214) 922-4209
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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WELLS FARGO BANK, N.A.,
individually and as Co-Agent
By:
----------------------------------
Name:
Title:
Address: 1445 Ross Avenue, Suite 400
LB 224
Dallas, Texas 75202
Attention: Mr. Lester Keliher
Telephone: (214) 777-4025
Telecopy: (214) 777-4044
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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THE FUJI BANK, LIMITED-HOUSTON AGENCY,
individually and as Co-Agent
By:
-----------------------------------
Name:
Title:
Address: 1221 McKinney Street
Suite 4100
Houston, Texas 77002
Attention: Mr. Tommy Watts
Telephone: (713) 650-7868
Telecopy: (713) 759-0717
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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<PAGE> 102
DEN NORSKE BANK ASA, individually and
as Lead Manager
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
Address: 333 Clay Street, Suite 4890
Houston, Texas 77002
Attention: Mr. J. Morten Kreutz
Telephone: (713) 844-9255
Telecopy: (713) 757-1167
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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<PAGE> 103
BANQUE PARIBAS, individually and as
Lead Manager
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
Address: 1200 Smith Street
Two Allen Center
Suite 3100
Houston, Texas 77002
Attention: Mr. David Dodd
Telephone: (713) 659-4811
Telecopy: (713) 659-6915
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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<PAGE> 104
FIRST UNION NATIONAL BANK, individually
and as Lead Manager
By:
--------------------------------------
Name:
Title:
Address: 1001 Fannin Street
Suite 2255
Houston, Texas 77002
Attention: Mr. Paul N. Riddle
Telephone: (713) 650-3716
Telecopy: (713) 650-6354
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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<PAGE> 105
BANKERS TRUST COMPANY, as a Lender
By:
---------------------------------------
Name:
Title:
Address: 130 Liberty Plaza, 30th Floor
M.S. 2344
New York, New York 10006
Attention: Marcus M. Tarkington
Telephone: (212) 250-7684
Telecopy: (212) 250-8693
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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<PAGE> 106
CREDIT AGRICOLE INDOSUEZ, as a Lender
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
Address: 55 East Monroe
Chicago, Illinois 60603
Attention: Ms. Rosemary Brown
Telephone: (312) 917-7420
Telecopy: (312) 372-4421
with further notice to:
Mr. Brian Knezeak
600 Travis, Suite 2340
Houston, Texas 77002
Telephone: (713) 223-7001
Telecopy: (713) 223-7029
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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<PAGE> 107
NATEXIS BANQUE, as a Lender BFCE
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
Address: 333 Clay Street, Suite 4340
Houston, Texas 77002
Attention: Mr. Eric Ditges
Telephone: (713) 759-9401
Telecopy: (713) 759-9908
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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<PAGE> 108
TORONTO DOMINION (TEXAS), INC., as
a Lender
By:
----------------------------------
Name:
Title:
Address: 909 Fannin Street, Suite 1700
Houston, Texas 77010
Attention: Ms. Darlene Riedel
Telephone: (713) 653-8250
Telecopy: (713) 951-9921
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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<PAGE> 109
THE TOYO TRUST & BANKING CO., LTD.,
as a Lender
By:
-------------------------------
Name:
Title:
Address: 666 5th Avenue, 33rd Floor
New York, New York 10103
Attention: Ms. Sharon Bonelli
Telephone: (212) 307-3410
Telecopy: (212) 307-3498
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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<PAGE> 110
WACHOVIA BANK, N.A., as a Lender
By:
-----------------------------------
Name:
Title:
Address: 191 Peachtree Street
Atlanta, Georgia 30303
Attention: Ms. Paige Mesaros
Telephone: (404) 332-1322
Telecopy: (404) 332-6898
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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<PAGE> 111
THE DAI-ICHI KANGYO BANK, LTD.,
NEW YORK BRANCH, as a Lender
By:
---------------------------------
Name:
Title:
Address: One World Trade Center
48th Floor
New York, New York 10048
Attention: Mr. Masayoshi Komaki
Telephone: (212) 432-6627
Telecopy: (212) 912-1879
Further notice to:
DKB-Houston LPO
1100 Louisiana, Suite 4940
Houston, Texas 77002
Attention: Mr. Warren Ross
Telephone: (713) 654-5055
Telecopy: (713) 654-1667
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
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<PAGE> 112
THE SANWA BANK, LIMITED, as a Lender
By:
-------------------------------------
Name:
Title:
Address: 4100W Texas Commerce
Tower
2200 Ross Avenue
Dallas, Texas 75201
Attention: Mr. Matthew Patrick
Telephone: (214) 665-0242
Telecopy: (214) 953-3963
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 23
<PAGE> 113
KREDIETBANK N.V., as a Lender
By:
-----------------------------------
Name:
Title:
Address: 125 West 55th Street
New York, NY 10019
Attention: Robert E. Snauffer
Vice President
Telephone: (212) 541-0700
Telecopy: (212) 956-5580
with a copy to:
Kredietbank N.V., Atlanta
Representative Office
Two Midtown Plaza, Suite 1750
1349 W. Peachtree Street
Atlanta, Georgia 30309
Attention: Mr. Felip Ferrante
Telephone: (404) 876-2556
Telecopy: (404) 876-3212
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 24
<PAGE> 114
For purposes of selling, assigning, transferring and conveying its
respective indebtedness, obligations and liabilities under the Existing Credit
Agreement to Borrower, the undersigned has caused this Agreement to be executed
by its officer thereunto duly authorized as of the date and year first above
written.
PIONEER NATURAL RESOURCES USA, INC.
By:
--------------------------------------
Name: M. Garrett Smith
Title: Executive Vice President and
Chief Financial Officer
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 25
<PAGE> 115
Exhibit A-1
[Form of]
Loan Note - Primary Credit Facility
$________________ ___________, 199___
FOR VALUE RECEIVED, the undersigned, PIONEER NATURAL RESOURCES
COMPANY, a Delaware corporation, with offices at 303 W. Wall, Suite 101,
Midland, Texas (herein called "Borrower"), hereby promises to pay to the order
of ________________________________ (herein called "Lender"), the principal sum
of _______________________________ and No/100 Dollars ($___________________),
or, if greater or less, the aggregate unpaid principal amount of each Loan made
under this Note by Lender to Borrower pursuant to the terms of the Credit
Agreement (as defined herein), together with interest on the unpaid principal
balance thereof as hereinafter set forth, both principal and interest payable
as herein provided in lawful money of the United States of America at the
principal banking offices of the Administrative Agent under the Credit
Agreement, 901 Main Street, Dallas, Texas 75202, or at such other place as
from time to time may be designated by the holder of this Note, with the
concurrence of Borrower and Administrative Agent. Subject to the terms and
conditions of the Credit Agreement and hereof, Borrower may borrow, repay and
reborrow hereunder.
This Note (a) is issued and delivered under that certain Amended and
Restated Credit Facility Agreement dated as of December 18, 1997 by and among
Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), and is a "Loan Note" as defined therein, and (b) is
subject to the terms and provisions of the Credit Agreement, which contains
provisions for payment and prepayment hereunder and acceleration of the
maturity hereof upon the happening of certain events. Payments on this Note
shall be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto and
for the meanings assigned to terms used and not otherwise defined herein.
Exhibit A-1 - 1
<PAGE> 116
Interest accrued on each Loan evidenced by this Note shall be payable,
without duplication: (a) on the Maturity Date; (b) with respect to any Base
Rate Portion of the Loans evidenced by this Note, on the third Business Day of
each Fiscal Quarter occurring after the date of the initial borrowing of a Base
Rate Portion hereunder; (c) with respect to any Eurodollar Portion of the Loans
evidenced by this Note, on the last day of each applicable Interest Period
(and, if such Interest Period shall exceed 90 days, on the 90th day of such
Interest Period and every 90 days thereafter until the end of such Interest
Period); (d) with respect to any Base Rate Portion converted into a Eurodollar
Portion of the Loans evidenced by this Note pursuant to a Rate Election on a
day when interest would not otherwise have been payable pursuant to clause (b),
on the third Business Day of each Fiscal Quarter occurring after the date of
such conversion; and (e) on any portion of the Loans evidenced by this Note,
the Maturity Date of which is accelerated pursuant to Section 6.1 of the Credit
Agreement, on the date to which the Maturity Date of such portion has been
accelerated. Interest accrued on the Loans evidenced by this Note or other
monetary Obligations arising under this Note, the Credit Agreement or any other
Loan Document after the date such amount is due and payable (whether on the
Maturity Date, upon acceleration or otherwise) shall be payable upon demand.
The principal amount of this Note, together with all interest accrued
hereon and unpaid, shall be due and payable in full on the Maturity Date.
The Base Rate Portion of the Loans evidenced by this Note (exclusive
of any past due principal or interest) from time to time outstanding shall bear
interest on each day outstanding at the Base Rate, plus the applicable Base
Rate Margin. Each Eurodollar Portion of the Loans evidenced by this Note
(exclusive of any past due principal or interest) shall bear interest on each
day during the related Interest Period at the applicable Eurodollar Rate, plus
the applicable Eurodollar Margin. All past due principal of the Loans
evidenced by this Note or other Obligations arising under the Credit Agreement
or any other Loan Document (whether payable on the Maturity Date or otherwise)
shall bear interest on each day outstanding after its due date at the
applicable Default Rate in effect on such day.
Notwithstanding the other provisions of this Note or the Credit
Agreement, in no event shall the interest payable hereon, whether before or
after maturity, exceed the Maximum Lawful Rate and this Note is expressly made
subject to the provisions of the Credit Agreement which more fully set out the
limitations on how interest accrues hereon. In the event applicable law
provides for a ceiling under Chapter 1D of Article 5069 of the Texas Credit
Title, Title 79, Vernon's Texas Civil Statutes, as amended
Exhibit A-1 - 2
<PAGE> 117
(formerly Article 5069-1.04, Vernon's Texas Civil Statutes, as amended), that
ceiling shall be the "applicable interest rate ceiling" as defined in said
Chapter. The term "applicable law" as used in this Note shall mean the laws of
the State of Texas or the laws of the United States, whichever laws allow the
greater interest as such laws now exist or may be enacted, changed or amended
or come into effect in the future.
If this Note is placed in the hands of an attorney for collection
after a Default, or if all or any part of the indebtedness represented hereby
is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, the
undersigned Borrower and all endorsers, sureties and guarantors of this Note
jointly and severally agree to pay reasonable attorneys' fees and collection
costs to the holder hereof in addition to the principal and interest payable
hereunder.
The undersigned Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the
bringing of any suit against any party and any notice of or defense on account
of any extensions, renewals, partial payments or changes in any manner of or in
this Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
It is contemplated that by reason of prepayment hereon there may be
times when no indebtedness is owing hereunder; notwithstanding such
occurrences, this Note shall remain valid and shall be in full force and effect
as to Loans made pursuant to the Credit Agreement subsequent to each
occurrence.
Except as permitted by Section 8.8 of the Credit Agreement, this Note
may not be assigned by Lender to any other Person.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE UNDERSIGNED BORROWER AND LENDER WITH
RESPECT HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS (WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE SAME ARE
GOVERNED BY APPLICABLE FEDERAL LAW.
PIONEER NATURAL RESOURCES COMPANY
By:
---------------------------------------
Name: M. Garrett Smith
Title: Executive Vice President and
Chief Financial Officer
Exhibit A-1 - 3
<PAGE> 118
Exhibit A-2
[Form of]
Swing Line Note - Primary Credit Facility
$50,000,000 _________, 199___
FOR VALUE RECEIVED, the undersigned, PIONEER NATURAL RESOURCES
COMPANY, a Delaware corporation with offices at 303 W. Wall, Suite 101,
Midland, Texas (herein called "Borrower"), hereby promises to pay to the order
of NATIONSBANK OF TEXAS, N.A. (herein called "Lender"), the principal sum of
FIFTY MILLION AND NO/100 Dollars ($50,000,000), or, if less, the aggregate
unpaid principal amount of the Swing Line Advances made under this Note by
Lender to Borrower pursuant to the terms of the Credit Agreement (as defined
herein), together with interest on the unpaid principal balance thereof as
hereinafter set forth, both principal and interest payable as herein provided
in lawful money of the United States of America at the principal banking
offices of Administrative Agent under the Credit Agreement, 901 Main Street,
Dallas, Texas 75202, or at such other place as from time to time may be
designated by the holder of this Note, with the concurrence of Borrower and
Administrative Agent.
This Note (a) is issued and delivered under that certain Amended and
Restated Credit Facility Agreement dated as of December 18, 1997 by and among
Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), and is a "Swing Line Note" as defined therein, and (b) is
subject to the terms and provisions of the Credit Agreement, which contains
provisions for payment and prepayment hereunder and acceleration of the
maturity hereof upon the happening of certain events. Payments on this Note
shall be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto and
for the meanings assigned to terms used and not otherwise defined herein.
The unpaid principal amount of this Note, together with all interest
accrued hereon and unpaid, shall be due and payable in full as provided in the
Credit Agreement and not later than the Maturity Date. Interest accrued on the
Swing Line Advances evidenced by this Note shall be payable as provided in the
Credit Agreement.
Exhibit A-2 - 1
<PAGE> 119
Notwithstanding other provisions of this Note or the Credit Agreement,
in no event shall the interest payable hereon, whether before or after
maturity, exceed the Maximum Lawful Rate and this Note is expressly made
subject to the provisions of the Credit Agreement which more fully set out the
limitations on how interest accrues hereon. In the event applicable law
provides for a ceiling under Chapter 1D of Article 5069 of the Texas Credit
Title, Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article
5069-1.04, Vernon's Texas Civil Statutes, as amended), that ceiling shall be
the "applicable interest rate ceiling" as defined in said Chapter. The term
"applicable law" as used in this Note shall mean the laws of the State of Texas
or the laws of the United States, whichever laws allow the greater interest as
such laws now exist or may be enacted, changed or amended or come into effect
in the future.
If this Note is placed in the hands of an attorney for collection
after a Default, or if all or any part of the indebtedness represented hereby
is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, the
undersigned Borrower and all endorsers, sureties and guarantors of this Note
jointly and severally agree to pay reasonable attorneys' fees and collection
costs to the holder hereof in addition to the principal and interest payable
hereunder.
The undersigned Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the
bringing of any suit against any party and any notice of or defense on account
of any extensions, renewals, partial payments or changes in any manner of or in
this Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
It is contemplated that by reason of prepayment hereon there may be
times when no indebtedness is owing hereunder; notwithstanding such
occurrences, this Note shall remain valid and shall be in full force and effect
as to Loans made pursuant to the Credit Agreement subsequent to each
occurrence.
Except as permitted by Section 8.8 of the Credit Agreement, this Note
may not be assigned by Lender to any other Person.
Exhibit A-2 - 2
<PAGE> 120
THIS NOTE AND THE RIGHTS AND DUTIES OF THE UNDERSIGNED BORROWER AND
LENDER WITH RESPECT HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE
SAME ARE GOVERNED BY APPLICABLE FEDERAL LAW.
PIONEER NATURAL RESOURCES COMPANY
By:
---------------------------------------
Name: M. Garrett Smith
Title: Executive Vice President and
Chief Financial Officer
Exhibit A-2 - 3
<PAGE> 121
Exhibit A-3
[Form of]
Competitive Bid Note - Primary Credit Facility
$1,075,000,000 __________, 199___
FOR VALUE RECEIVED, the undersigned, PIONEER NATURAL RESOURCES
COMPANY, a Delaware corporation, with offices at 303 W. Wall, Suite 101,
Midland, Texas (herein called "Borrower"), hereby promises to pay to the order
of __________________________________ (herein called "Lender"), the principal
sum of ONE BILLION SEVENTY-FIVE MILLION AND NO/100 DOLLARS ($1,075,000,000),
or, if less, the aggregate unpaid principal amount of all Competitive Bid
Advances shown on the schedule attached hereto (and any continuation thereof),
if so shown, made by the Lender to Borrower, together with interest on the
unpaid principal balance thereof as hereinafter set forth, both principal and
interest payable as herein provided in lawful money of the United States of
America at the principal banking offices of Administrative Agent under the
Credit Agreement (as defined herein), 901 Main Street, Dallas, Texas 75202, or
at such other place as from time to time may be designated by the holder of
this Note, with the concurrence of Borrower and Administrative Agent.
This Note (a) is issued and delivered under that certain Amended and
Restated Credit Facility Agreement dated as of December 18, 1997 by and among
Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), and is a "Competitive Bid Note" as defined therein, and
(b) is subject to the terms and provisions of the Credit Agreement, which
contains provisions for payment and prepayment hereunder and acceleration of
the maturity hereof upon the happening of certain events. Payments on this
Note shall be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto and
for the meanings assigned to terms used and not otherwise defined herein.
The unpaid principal amount of this Note, together with all interest
accrued hereon and unpaid, shall be due and payable in full as provided in the
Credit Agreement and not later than the Maturity Date.
Exhibit A-3 - 1
<PAGE> 122
Interest accrued on the Competitive Bid Advances evidenced by this
Note shall be payable as provided in the Credit Agreement.
Notwithstanding other provisions of this Note or the Credit Agreement,
in no event shall the interest payable hereon, whether before or after
maturity, exceed the Maximum Lawful Rate and this Note is expressly made
subject to the provisions of the Credit Agreement which more fully set out the
limitations on how interest accrues hereon. In the event applicable law
provides for a ceiling under Chapter 1D of Article 5069 of the Texas Credit
Title, Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article
5069-1.04, Vernon's Texas Civil Statutes, as amended), that ceiling shall be
the "applicable interest rate ceiling" as defined in said Chapter. The term
"applicable law" as used in this Note shall mean the laws of the State of Texas
or the laws of the United States, whichever laws allow the greater interest as
such laws now exist or may be enacted, changed or amended or come into effect
in the future.
If this Note is placed in the hands of an attorney for collection
after a Default, or if all or any part of the indebtedness represented hereby
is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, the
undersigned Borrower and all endorsers, sureties and guarantors of this Note
jointly and severally agree to pay reasonable attorneys' fees and collection
costs to the holder hereof in addition to the principal and interest payable
hereunder.
The undersigned Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the
bringing of any suit against any party and any notice of or defense on account
of any extensions, renewals, partial payments or changes in any manner of or in
this Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
It is contemplated that by reason of prepayment hereon there may be
times when no indebtedness is owing hereunder; notwithstanding such
occurrences, this Note shall remain valid and shall be in full force and effect
as to Competitive Bid Advances made pursuant to the Credit Agreement subsequent
to each occurrence.
Exhibit A-3 - 2
<PAGE> 123
Except as permitted by Section 8.8 of the Credit Agreement, this Note
may not be assigned by Lender to any other Person.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE UNDERSIGNED BORROWER AND
LENDER WITH RESPECT HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE
SAME ARE GOVERNED BY APPLICABLE FEDERAL LAW.
PIONEER NATURAL RESOURCES COMPANY
By:
---------------------------------------
Name: M. Garrett Smith
Title: Executive Vice President and
Chief Financial Officer
Exhibit A-3 - 3
<PAGE> 124
Exhibit B
[Note: Language in brackets will not be included in every Guaranty to the
extent that, at the time of execution and delivery of the Guaranty, such
execution and delivery would result in adverse tax consequences under Section
956 or substantial stamp tax or similar taxes, are prohibited pursuant to
contractual restrictions or are prohibited as a matter of corporate law.]
[Form of]
GUARANTY
THIS GUARANTY (this "Guaranty"), dated as of _______________, 199___,
made by _________________________ [(A.C.N. _____________)], a ________________
("Guarantor"), in favor of each of the Lender Parties (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Pioneer Natural Resources
Company, a Delaware corporation ("Borrower"), NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, the Co-Agents party thereto, and the Lenders from time to
time parties thereto (together with all amendments, supplements, restatements
and other modifications, if any, thereafter made thereto, the "Primary Credit
Agreement"), the Lenders have extended Commitments (as defined in the Primary
Credit Agreement) to make Loans to Borrower and to issue or participate in
Letters of Credit on behalf of Borrower; and
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co- Agents party thereto, and the Lenders from
time to time parties thereto (together with all amendments, supplements,
restatements and other modifications, if any, thereafter made thereto, the "364
Day Credit Agreement", and together with the Primary Credit Agreement, the
"Credit Agreements"), the Lenders have extended Commitments (as defined in the
364 Day Credit Agreement) to make Loans to Borrower; and
WHEREAS, as a condition precedent to the making of the initial Loans
or issuing of the initial Letters of Credit under
Exhibit B - 1
<PAGE> 125
the Credit Agreements, Guarantor is required to execute and deliver this
Guaranty; and
WHEREAS, Guarantor has duly authorized the execution, delivery and
performance of this Guaranty; and
WHEREAS, it is in the best interests of Guarantor to execute this
Guaranty inasmuch as Guarantor will derive substantial direct and indirect
benefits from the Loans made from time to time to Borrower and Letters of
Credit issued on behalf of Borrower pursuant to the Credit Agreements;
NOW THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, and in order to induce the Lenders to make Loans
(including the initial Loans) to Borrower pursuant to the Credit Agreements and
for the Issuing Bank to issue Letters of Credit on behalf of Borrower and for
the Lenders to acquire participations in such Letters of Credit pursuant to the
Primary Credit Agreement, Guarantor agrees, for the benefit of each Lender
Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"Administrative Agent" is defined in the first recital.
"Borrower" is defined in the first recital.
"Commitments" means "Commitments" as defined in the Primary Credit
Agreement and "Commitments" as defined in the 364 Day Credit Agreement.
"Credit Agreements" is defined in the second recital.
"Debtor" is defined in Section 2.1(a)(i).
"Guarantor" is defined in the preamble.
"Guaranty" is defined in the preamble.
"Lender Party" means, as the context may require, any Lender, any
Issuing Bank or any Agent and each of its respective successors, transferees
and assigns under the Credit Agreements.
Exhibit B - 2
<PAGE> 126
"Lenders" means "Lenders" as defined in the Primary Credit Agreement
and "Lenders" as defined in the 364 Day Credit Agreement.
"Loan Documents" means "Loan Documents" as defined in the Primary
Credit Agreement and "Loan Documents" as defined in the 364 Day Credit
Agreement.
"Notes" means "Notes" as defined in the Primary Credit Agreement and
"Notes" as defined in the 364 Day Credit Agreement.
"Obligations" means "Obligations" as defined in the Primary Credit
Agreement and "Obligations" as defined in the 364 Day Credit Agreement.
"Primary Credit Agreement" is defined in the first recital.
"364 Day Credit Agreement" is defined in the second recital.
SECTION 1.2. Primary Credit Agreement Definitions. Unless
otherwise defined herein or the context otherwise requires, terms used in this
Guaranty, including its preamble and recitals, have the meanings provided in
the Primary Credit Agreement.
ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. Guarantor hereby absolutely,
unconditionally and irrevocably
(a) guarantees
(i) the full and punctual payment when due, whether
at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, of all Obligations of
Borrower now or hereafter existing under the Credit
Agreements, the Notes, the LC Applications and each other Loan
Document to which Borrower is or may become a party, whether
for principal, interest, fees, expenses or otherwise;
(ii) the payment and performance of any and all
present or future obligations of Borrower according to the
terms of any present or future rate swap, rate cap, rate
floor, rate collar, currency exchange transaction, forward
rate agreement, or other exchange or rate protection
agreements or any option with respect to any such transaction
now existing or hereafter entered into between Borrower or any
of its Subsidiaries and one or more of the Lenders or their
Affiliates ("interest rate swap agreement");
Exhibit B - 3
<PAGE> 127
(iii) the payment and performance of any and all
present or future obligations of Borrower according to the
terms of any present or future crude oil, natural gas or other
hydrocarbons swap agreements, crude oil, natural gas or other
hydrocarbons cap, crude oil, natural gas or other hydrocarbons
floor, crude oil, natural gas or other hydrocarbons collar,
crude oil, natural gas or other hydrocarbons exchange
transaction, forward crude oil, natural gas or other
hydrocarbons agreement, or other exchange or crude oil,
natural gas or other hydrocarbons protection agreements or any
option with respect to any such transaction now existing or
hereafter entered into between Borrower or any of its
Subsidiaries and one or more of the Lenders or their
Affiliates; and
(iv) all renewals, rearrangements, increases,
extensions for any period, substitutions, modification,
amendments or supplements in whole or in part of any of the
above loan documents or obligations,
(including all such amounts which would become due but for the
operation of the automatic stay under Section 362(a) of the United
States Bankruptcy Code, 11 U.S.C. Section 362(a), and the operation of
Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11
U.S.C. Section 502(b) and Section 506(b)), and (b) indemnifies and
holds harmless strictly in accordance with the terms of the Credit
Agreements each Lender Party and each holder of a Note from Borrower,
an LC Application or any interest in an LC Obligation for any and all
costs and expenses (including reasonable attorney's fees and expenses)
incurred by such Lender Party or such holder, as the case may be, in
enforcing any rights under this Guaranty; provided, however, that
Guarantor shall only be liable under this Guaranty for the maximum
amount of such liability that can be hereby incurred without rendering
this Guaranty, as it relates to Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer, and not
for any greater amount. This Guaranty constitutes a guaranty of
payment when due and not of collection, and Guarantor specifically
agrees that it shall not be necessary or required that any Lender
Party or any holder of any Note exercise any right, assert any claim
or demand or enforce any remedy whatsoever against Borrower or any
other Designated Entity (or any other Person) before or as a condition
to the obligations of Guarantor hereunder. All payments hereunder are
to be made in the currency in which they are due under the Credit
Agreements.
SECTION 2.2. Acceleration of Guaranty. Guarantor agrees that, in
the event of the dissolution or insolvency of Borrower
Exhibit B - 4
<PAGE> 128
or Guarantor, or the inability or failure of Borrower or Guarantor to pay debts
as they become due, or an assignment by Borrower or Guarantor for the benefit
of creditors, or the commencement of any case or proceeding in respect of
Borrower or Guarantor under any bankruptcy, insolvency or similar laws, and if
such event shall occur at a time when any of the Obligations of Borrower may
not then be due and payable, Guarantor will pay to the Lenders forthwith the
full amount which would be payable hereunder by Guarantor if all such
Obligations were then due and payable.
SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in all
respects be a continuing, absolute, unconditional and irrevocable guaranty of
payment, and shall remain in full force and effect until all Obligations of
Borrower have been paid in full, all obligations of Guarantor hereunder shall
have been paid in full and all Commitments shall have terminated. Guarantor
guarantees that the Obligations of Borrower will be paid strictly in accordance
with the terms of the Credit Agreements and each other Loan Document under
which they arise, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of any
Lender Party or any holder of any Note with respect thereto. The liability of
Guarantor under this Guaranty shall be absolute, unconditional and irrevocable
irrespective of:
(a) (i) any lack of validity, legality or enforceability
of the Credit Agreements, any Note, any LC Application or any other
Loan Document or any portion of any thereof or (ii) the Credit
Agreements, any Note, any LC Application or any other Loan Document or
any portion of any thereof being void or voidable;
(b) the failure of any Lender Party or any holder of any
Note, any LC Application, Letter of Credit or any interest therein
(i) to assert any claim or demand or to enforce any
right or remedy against Borrower, any other Designated Entity
or any other Person (including any other guarantor) under the
provisions of the Credit Agreements, any Note, any LC
Application, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any Obligations of
Borrower or any other Designated Entity;
(c) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations of Borrower
or any other Designated Entity, or any other
Exhibit B - 5
<PAGE> 129
extension, compromise or renewal of any Obligation of Borrower or any
other Designated Entity;
(d) any reduction, limitation, impairment or termination
of any Obligations of Borrower or any other Designated Entity for any
reason, including any claim of waiver, release, surrender, alteration
or compromise, and shall not be subject to (and Guarantor hereby
waives any right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability
of, or any other event or occurrence affecting, any Obligations of
Borrower, any other Designated Entity or otherwise;
(e) any amendment to, extensions of, rescission, waiver,
or other modification of, or any consent to departure from, any of the
terms of the Credit Agreements, any Note, any LC Application, any
Letter of Credit or any other Loan Document;
(f) any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver or
release or addition of, or consent to departure from, any other
guaranty, held by any Lender Party or any holder of any Note, any LC
Application, any Letter of Credit or interest therein securing any of
the Obligations of Borrower or any other Designated Entity; or
(g) any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable discharge
of, Borrower, any other Designated Entity, any surety or any
guarantor.
SECTION 2.4. Reinstatement. Guarantor agrees that this Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Obligations guaranteed
hereby is rescinded or must otherwise be restored by any Lender Party or any
holder of any Note, any LC Application or any interest in an LC Obligation,
upon the insolvency, bankruptcy or reorganization of Borrower, or any other
Designated Entity or otherwise, all as though such payment had not been made.
SECTION 2.5. Waiver. Guarantor hereby waives promptness,
diligence, presentment, notice of acceptance and any other notice with respect
to any of the Obligations of Borrower or any other Designated Entity and this
Guaranty and any requirement that any Agent, any other Lender Party or any
holder of any Note, any LC Application, any Letter of Credit or any interest
therein protect, secure, perfect or insure any security interest or Lien,
Exhibit B - 6
<PAGE> 130
or any property subject thereto, or exhaust any right or take any action
against Borrower, any other Designated Entity or any other Person (including
any other guarantor) or entity or any collateral securing the Obligations of
Borrower or any other Designated Entity, as the case may be.
SECTION 2.6. Waiver of Subrogation. Guarantor hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
Borrower or any other Designated Entity that arise from the existence, payment,
performance or enforcement of Guarantor's obligations under this Guaranty or
any other Loan Document, including any right of subrogation, reimbursement,
contribution, exoneration, or indemnification, any right to participate in any
claim or remedy of the Lender Parties against Borrower or any other Designated
Entity or any collateral which the Collateral Agent now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including the right to take or receive from
Borrower or any other Designated Entity, directly or indirectly, in cash or
other property or by set-off or in any manner, payment or security on account
of such claim or other rights. If any amount shall be paid to Guarantor in
violation of the preceding sentence and the Obligations shall not have been
paid in cash in full and the Commitments have not been terminated, such amount
shall be deemed to have been paid to Guarantor for the benefit of, and held in
trust for, the Lender Parties, and shall forthwith be paid to the Lender
Parties to be credited and applied upon the Obligations, whether matured or
unmatured; otherwise it shall be returned to remitter. Guarantor acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated by the Credit Agreements and that the waiver set
forth in this Section is knowingly made in contemplation of such benefits.
SECTION 2.7. Successors, Transferees and Assigns; Transfers of
Notes. This Guaranty shall:
(a) be binding upon Guarantor, and its successors,
transferees and assigns (provided, however, that Guarantor may not
assign any of its obligations hereunder without the prior written
consent of all Lenders); and
(b) inure to the benefit of and be enforceable by each
Agent and each other Lender Party.
Without limiting the generality of the foregoing clause (b), any Lender may
assign or otherwise transfer (in whole or in part) any Note, Loan, LC
Application, Letter of Credit or interest therein held by it to any other
Person or entity, and such other Person or entity shall thereupon become vested
with all rights and benefits in respect thereof granted to such Lender under
any Loan
Exhibit B - 7
<PAGE> 131
Document (including this Guaranty) or otherwise, subject, however, to any
contrary provisions in such assignment or transfer, and to the provisions of
Section 8.8 of the Credit Agreements.
SECTION 2.8. Taxes. All payments by the undersigned hereunder
shall be made free and clear of and without deduction for any present or future
income, excise, stamp, or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any taxing
authority, but excluding franchise taxes and taxes imposed on or measured by
any Lender's net income or receipts (such non-excluded items being called
"Taxes"). In the event that any withholding or deduction from any payment to
be made hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then, subject to the provisions of Section
2.9, the undersigned will:
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b) promptly forward to Administrative Agent an official
receipt or other documentation satisfactory to Administrative Agent
evidencing such payment to such authority; and
(c) pay to Administrative Agent for the account of the
applicable Lender(s) such additional amount(s) as is necessary to
ensure that the net amount actually received by each Lender will equal
the full amount such Lender would have received had no such
withholding or deduction been required and the undersigned hereby
acknowledges that it is not entitled to and will not seek recovery or
restitution of any amount due to any of the Lenders or Agents and paid
by it pursuant to this clause (c) or pursuant to the next sentence.
If any Taxes are directly asserted against any Agent or any Lender with respect
to any payment received by such Agent or such Lender hereunder, such Agent or
such Lender may pay such Taxes and, if paid in good faith, the undersigned will
promptly pay such additional amounts to the Administrative Agent for the
account of such Lender or Agent (including any penalties, interest or expenses)
as is necessary in order that the net amount received by such person after the
payment of such Taxes (including any taxes on such additional amount) shall
equal the amount such person would have received had no such Taxes been
asserted, subject to the provisions of Section 2.9.
The undersigned shall pay all stamp, transaction, registration and
similar taxes (including financial institutions
Exhibit B - 8
<PAGE> 132
duties, debit taxes or other taxes payable by return and taxes passed on to any
Lender or Agent by a bank or financial institution (collectively "Stamp Taxes")
and, if the undersigned fails to pay any such charges or taxes after reasonable
notice from any such Lender or Agent, fines and penalties) which may be payable
or determined to be payable in relation to the execution, delivery, performance
or enforcement of this Guaranty or any Loan Document or any other transaction
contemplated by any Loan Document to which the undersigned is a party. The
undersigned hereby indemnifies each Lender and Agent against any liability
resulting from delay or omission to pay such charges or taxes except to the
extent the liability results from failure by the relevant Lender or Agent to
pay any such tax after having been delivered funds to do so by the undersigned
or to the extent such liability is for fines and penalties resulting from such
Lender's or Agent's failure to provide reasonable notice to the undersigned as
provided herein.
If the undersigned fails to pay any Taxes or Stamp Taxes when due to
the appropriate taxing authority or fails to remit to Administrative Agent, for
the account of the respective Lenders, the required receipts or other required
documentary evidence, the undersigned shall indemnify Lenders for any Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure, subject to the provisions of Section 2.9.
The undersigned waives any statutory right to recover from any Agent
or any Lender any amount due to any such Agent or Lender and paid by the
undersigned under this Section.
SECTION 2.9. Make-Whole Qualifications. Each Lender's claims for
reimbursements, payments, indemnities or otherwise under Section 2.8 and the
undersigned's obligations with respect thereto, shall be limited and qualified
by and subject to the following:
(a) the undersigned's obligation to pay, satisfy or
recognize such claim shall be limited to costs or losses incurred
within one (1) year immediately prior to any demand or request
therefor upon the undersigned;
(b) each Lender's demand for reimbursement, payment or
indemnity must be limited to that which is being generally applied at
the time by such Lender for comparable guarantors and guaranties
subject to similar provisions;
(c) each Lender which asserts its rights with respect
thereto or which is seeking or imposing such reimbursement, payment or
indemnity shall provide evidence regarding the basis of such claim and
the calculation and application thereof in reasonable detail and, in
determining such
Exhibit B - 9
<PAGE> 133
amount, each Lender may use reasonable methods of attribution and
averaging; and
(d) each Lender which is seeking payment, indemnity or
reimbursement pursuant to Section 2.8 shall, if so requested by the
undersigned use reasonable efforts (subject to the overall policy
considerations of such Lender) to designate a different lending office
hereunder if to do so will avoid the need for, or reduce the amount
of, any such payment, indemnity or reimbursement; provided that,
Lender would, in its sole but reasonable determination, suffer no
material economic, legal or regulatory disadvantage or burden.
[SECTION 2.10. Judgment. Guarantor hereby agrees that:
(a) If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder in United States
Dollars into another currency, Guarantor agrees, to the fullest extent
permitted by law, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative
Agent could purchase United States Dollars with such other currency on
the Business Day preceding that on which final judgment is given.
(b) The obligation of Guarantor in respect of any sum due
from it to any Lender Party or any holder of a Note hereunder shall,
notwithstanding any judgment in a currency other than United States
Dollars, be discharged only to the extent that on the Business Day
following receipt by such Lender Party or such holder, as the case may
be, of any sum adjudged to be so due in such other currency such
Lender Party or such holder, as the case may be, may, in accordance
with normal banking procedures, purchase United States Dollars with
such other currency; in the event that the United States Dollars so
purchased are less than the sum originally due to such Lender Party in
United States Dollars, Guarantor, as a separate obligation and
notwithstanding any such judgment, hereby indemnifies and holds
harmless such Lender Party and such holder against such loss, and if
the United States Dollars so purchased exceed the sum originally due
to such Lender Party or such holder in United States Dollars, such
Lender Party or such holder, as the case may be, shall remit to
Guarantor such excess.]
Exhibit B - 10
<PAGE> 134
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. Guarantor hereby
represents and warrants unto each Lender Party as set forth in this Article.
SECTION 3.1.1. Organization, Existence and Good Standing. Guarantor
is duly organized or incorporated, validly existing and in good standing under
the laws of its jurisdiction of organization or incorporation, having all
corporate or partnership powers required to enter into and carry out the
transactions contemplated hereby. Guarantor is duly qualified, in good
standing, and authorized to do business in all other jurisdictions within the
United States wherein the character of the properties owned or held by it or
the nature of the business transacted by it makes such qualification necessary,
except for any lack of qualification, good standing or authorization that is
not reasonably expected to result in a Material Adverse Effect. Guarantor has
taken all actions customarily taken in order to enter, for the purpose of
conducting business or owning property, each jurisdiction outside the United
States wherein the character of the properties owned or held by it or the
nature of the business transacted by it makes such actions desirable, except
any failure to take such action that is not reasonably expected to result in a
Material Adverse Effect.
SECTION 3.1.2. Authorization. Guarantor has duly taken all
corporate, partnership or shareholder action necessary to authorize the
execution and delivery by it of this Guaranty and to authorize the consummation
of the transactions contemplated hereby and the performance of its obligations
hereunder.
SECTION 3.1.3. No Conflicts or Consents. The execution and delivery
by Guarantor of this Guaranty, the performance by it of its obligations
hereunder, and the consummation of the transactions contemplated by the various
Loan Documents, do not and will not (i) conflict with any provision of the
articles or certificate of incorporation, bylaws, charter, or partnership
agreement or certificate of such Guarantor, or (ii) except as to matters that
could not reasonably be expected to result in a Material Adverse Effect, result
in the acceleration of any Debt owed by such Guarantor, or conflict with any
law, statute, rule, regulation, or agreement, judgment, license, order or
permit applicable to or binding upon such Guarantor, or require the consent,
approval, authorization or order of, or notice to or filing with, any court or
Governmental Authority or third party, or result in or require the creation of
any Lien upon any material assets or properties of such Guarantor, except as
permitted in the Loan Documents.
SECTION 3.1.4. Enforceable Obligations. This Guaranty is the legal,
valid and binding obligation of Guarantor, enforceable in accordance with its
terms, except as such enforcement may be
Exhibit B - 11
<PAGE> 135
limited by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights and by general principles of
equity.
ARTICLE IV
COVENANTS
SECTION 4.1. Covenants. Guarantor covenants and agrees that, so
long as any portion of the Obligations of Borrower shall remain unpaid or any
Lender shall have any outstanding Commitment, Guarantor will, unless the
Required Lenders shall otherwise consent in writing, perform or comply with the
obligations of a Restricted Subsidiary of Borrower set forth in Sections 5.1
and 5.2 of the Credit Agreements, subject to any limitations on performance or
compliance contained in such sections, including, without limitation, the
limitation, when applicable, that the failure to perform or comply could not
reasonably be expected to have a Material Adverse Effect.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Loan Document. This Guaranty is a Loan Document
executed pursuant to the Credit Agreements and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
SECTION 5.2. Binding on Successors, Transferees and Assigns;
Assignment. In addition to, and not in limitation of, Section 2.7, this
Guaranty shall be binding upon Guarantor and its successors, transferees and
assigns and shall inure to the benefit of and be enforceable by each Lender
Party and each holder of a Note, an LC Application, or an interest in an LC
Obligation and their respective successors, transferees and assigns (to the
full extent provided pursuant to Section 2.7); provided, however, that
Guarantor may not assign any of its obligations hereunder without the prior
written consent of all Lenders.
SECTION 5.3. Amendments. No amendment to or waiver of any
provision of this Guaranty, nor consent to any departure by Guarantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Administrative Agent, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION 5.4. Notices. All notices, requests, consents, demands
and other communications required or permitted hereunder shall be in writing,
unless otherwise specifically provided herein and shall be deemed sufficiently
given or furnished if
Exhibit B - 12
<PAGE> 136
delivered by personal delivery, by telecopy (with telephonic confirmation of
transmission, by delivery service with proof of delivery, or by registered or
certified United States mail, postage prepaid, to Guarantor at the address of
Guarantor specified on the signature pages hereto and to each Agent and each
Lender at their addresses specified on the signature pages to the Credit
Agreements (unless changed by similar notice in writing given by the particular
Person whose address is to be changed). Any such notice or communication shall
be deemed to have been given:
(a) in the case of personal delivery or delivery service,
as of the date of first attempted delivery at the address provided
herein;
(b) in the case of telecopy, upon receipt; or
(c) in the case of registered or certified United States
mail, three days after deposit in the mail, postage prepaid.
SECTION 5.5. No Waiver; Remedies. In addition to, and not in
limitation of, Section 2.3 and Section 2.5, no failure on the part of any
Lender Party or any holder of a Note, an LC Application, or an interest in an
LC Obligation to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
SECTION 5.6. Section Captions. Section captions used in this
Guaranty are for convenience of reference only, and shall not affect the
construction of this Guaranty.
SECTION 5.7. Severability. Wherever possible each provision of
this Guaranty shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Guaranty shall be prohibited
by or invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION 5.8. Governing Law, Entire Agreement. THIS GUARANTY SHALL
BE DEEMED A CONTRACT AND INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF TEXAS
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THIS GUARANTY AND THE OTHER LOAN
DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
Exhibit B - 13
<PAGE> 137
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 5.9. Waiver of Jury Trial. EACH OF GUARANTOR, AGENTS AND
LENDERS HEREBY (a) IRREVOCABLY WAIVES, THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS GUARANTY OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH,
BEFORE OR AFTER MATURITY; (b) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES; (c) CERTIFIES THAT
NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (d)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO AND ACCEPT THIS GUARANTY,
THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS
SECTION.
SECTION 5.10. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER
PARTIES OR GUARANTOR SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF TEXAS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST
ANY PROPERTY MAY BE BROUGHT, AT THE COLLATERAL AGENT'S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH PROPERTY MAY BE FOUND. GUARANTOR HEREBY EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS
AND THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
TEXAS. FOR PURPOSES OF ANY ACTION OR PROCEEDING INSTITUTED IN THE FEDERAL OR
STATE COURTS OF TEXAS, THE UNDERSIGNED HEREBY IRREVOCABLY DESIGNATES BORROWER
WITH OFFICES ON THE DATE HEREOF AT 303 WEST WALL STREET, SUITE 101, MIDLAND,
TEXAS 79701 TO RECEIVE FOR AND ON BEHALF OF THE UNDERSIGNED SERVICE OF PROCESS
IN TEXAS. GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT
Exhibit B - 14
<PAGE> 138
GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
Exhibit B - 15
<PAGE> 139
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written but effective as of the Effective Date.
[Name of Guarantor]
By
------------------------------------
Name:
Title:
Address: 303 West Wall
Suite 101
P. O. Box 3178
Midland, Texas 79701
Attention: Curt Kamradt
Telephone: (915) 571-3171
Telecopy: (915) 571-5696
with a copy to:
Garrett Smith
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
Telephone: (972) 402-7013
Telecopy: (972) 402-7028
Exhibit B - 16
<PAGE> 140
Exhibit C
Form of Request for Advance
_____________, ________
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn: Mickey McLean
Re: Request for Advance - Primary Credit Facility
Gentlemen:
Reference is made to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co- Agents party thereto, and the Lenders from
time to time parties thereto (the "Credit Agreement"). Terms which are defined
in the Credit Agreement and which are used but not defined herein are used
herein with the meanings ascribed to them in the Credit Agreement. Pursuant to
the terms of the Credit Agreement, the undersigned Borrower hereby requests
that Lenders make Advances to the undersigned Borrower in the aggregate
principal amount of $__________________, specifies _______________, _______, as
the date the undersigned Borrower desires for Lenders to make such Advances and
requests that Administrative Agent deliver to the undersigned Borrower the
proceeds thereof on such date.
To induce Lenders to make such Advances, the undersigned Borrower
hereby represents, warrants, acknowledges, and agrees to and with each Agent
and each Lender that:
(a) The Designated Officer of Borrower signing this instrument is
a duly elected, qualified and acting officer of the undersigned Borrower,
holding the office indicated below such officer's signature hereto and having
all necessary authority to act for the undersigned Borrower in making and
delivering this Request for Advance.
(b) The representations and warranties of the undersigned Borrower
and each other Designated Entity set forth in the Credit Agreement and the
other Loan Documents are true and correct on and as of the date hereof, with
the same effect as though such
Exhibit C - 1
<PAGE> 141
representations and warranties had been made on and as of the date hereof.
(c) There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as provided in
Section 6.1 of the Credit Agreement; nor will any such Default exist upon the
undersigned Borrower's receipt and application of the Advances requested
hereby. The undersigned Borrower will use the Advances hereby requested in
compliance with the Credit Agreement.
(d) Except to the extent waived in writing as provided in Section
6.1 of the Credit Agreement, the undersigned Borrower has performed and
complied with all agreements and conditions in the Credit Agreement required to
be performed or complied with by the undersigned Borrower on or prior to the
date hereof, and each of the conditions precedent to Advances contained in the
Credit Agreement remains satisfied.
(e) The aggregate unpaid principal balance of the Advances under
the Facility after the making of such Advance requested hereby, plus the
aggregate outstanding amount of LC Obligations and Swing Line Advances and
Competitive Bid Advances at the date hereof will not be in excess of the
Facility Amount on the date requested for the making of such Advances.
(g) The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any course of
dealing, or by any other means not provided for in Section 8.1 of the Credit
Agreement. The Credit Agreement and the other Loan Documents are hereby
ratified, approved, and confirmed in all respects.
The undersigned Borrower agrees that if, prior to the time of the
Advances requested hereby, any matter certified to herein by it will not be
true and correct at such time as if then made, it will immediately so notify
Administrative Agent. Except to the extent, if any, that, prior to the time of
the Advances requested hereby, Administrative Agent shall have received written
notice from the undersigned Borrower to the contrary, each matter certified
herein shall be deemed once again to be certified as true and correct as of the
date of such Advances as if then made.
The Designated Officer of the undersigned Borrower signing this
instrument hereby certifies that, to the best of his
Exhibit C - 2
<PAGE> 142
knowledge, the above representations, warranties, acknowledgments and
agreements of the undersigned Borrower are true, correct and complete.
PIONEER NATURAL RESOURCES COMPANY
By:
---------------------------------
Name:
Title:
Exhibit C - 3
<PAGE> 143
Exhibit D
Form of Rate Election
____________________, ________
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn: Mickey McLean
Re: Rate Election - Primary Credit Facility
Gentlemen:
Reference is made to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co- Agents party thereto, and the Lenders from
time to time parties thereto (the "Credit Agreement"). Terms which are defined
in the Credit Agreement and which are used but not defined herein are used
herein with the meanings ascribed to them in the Credit Agreement. Pursuant to
the terms of the Credit Agreement, the undersigned Borrower hereby elects a
Tranche of Eurodollar Portions in the aggregate amount of $___________ with an
Interest Period beginning on __________ and continuing for a period of
___________________.
To satisfy the conditions set out in the Credit Agreement for the
making of such election, the undersigned Borrower hereby represents, warrants,
acknowledges and agrees that:
(a) The Designated Officer of the undersigned Borrower signing
this instrument is a duly elected, qualified and acting officer of such
Borrower, holding the office indicated below such officer's signature hereto
and having all necessary authority to act for such Borrower in making and
delivering this Rate Election.
(b) There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as provided in
Section 6.1 of the Credit Agreement.
(c) The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any course of
dealing, or by any other means not provided for in
Exhibit D - 1
<PAGE> 144
Section 8.1 of the Credit Agreement. The Credit Agreement and the other Loan
Documents are hereby ratified, approved, and confirmed in all respects.
(d) The undersigned Borrower further agrees that if, on or prior
to the date of the commencement of the Interest Period designated herein, any
matter certified herein by it will not be true and correct at such time as if
such certification were then made, it will immediately so notify Administrative
Agent. Except to the extent, if any, that prior to the commencement of the
Interest Period designated herein Administrative Agent shall receive written
notice to the contrary from the undersigned Borrower, each matter certified
herein shall be deemed to be certified as of the date of the commencement of
such Interest Period as if then made.
The Designated Officer of the undersigned Borrower signing this
instrument hereby certifies that, to the best of his knowledge, the above
representations, warranties, acknowledgments and agreements of the undersigned
Borrower are true, correct and complete.
PIONEER NATURAL RESOURCES COMPANY
By:
----------------------------------
Name:
Title:
Exhibit D - 2
<PAGE> 145
Exhibit E
Form of Request for Swing Line Advance
VIA FACSIMILE # (214)508-2515
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn: Mickey McLean
Reference is made to the Primary Credit Facility pursuant to that
certain Amended and Restated Credit Facility Agreement dated as of December 18,
1997 by and among Borrower, NationsBank of Texas, N.A., as Administrative
Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New
York, as Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders from time to time parties thereto
(the "Credit Agreement"),. Capitalized terms used herein and not otherwise
defined herein shall have the meaning assigned in the Credit Agreement.
In accordance with Section 2.5, the undersigned hereby requests a
Swing Line Advance in an amount of $__________________ to be advanced today,
__________________________. We request this advance be for a period of
________ day(s), maturing on ___________________.
If you have any questions regarding this request, please contact the
undersigned at (915) _____________.
PIONEER NATURAL RESOURCES COMPANY
By:
----------------------------------
Name:
Title:
Exhibit E - 1
<PAGE> 146
Exhibit F
Form of Swing Line Participation Certificate
__________________ ,199__
[Name of Bank]
__________________________
__________________________
__________________________
Gentlemen:
Reference is made to the Primary Credit Facility pursuant to that
certain Amended and Restated Credit Facility Agreement dated as of December 18,
1997 by and among Borrower, NationsBank of Texas, N.A., as Administrative
Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New
York, as Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders from time to time parties thereto
(the "Credit Agreement"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned in the Credit Agreement.
Pursuant to subsection 2.6(b)(i) of the Credit Agreement, the
undersigned hereby acknowledges receipt from you on the date hereof of
_______________________ DOLLARS ($______________) as payment for a
participating interest in the following Swing Line Advance(s):
Date(s) of Swing Line Advance(s): ______________, 199__
Principal Amount of Swing Line Advance(s): $____________________
Very truly yours,
NATIONSBANK OF TEXAS, N.A., as Swing
Line Lender
By:
----------------------------------
Name:
Title:
Exhibit F - 1
<PAGE> 147
Exhibit G
[INTENTIONALLY OMITTED]
Exhibit G - 1
<PAGE> 148
Exhibit H
Forms of Opinion of Borrower's and Restricted Subsidiaries' Counsel
Exhibit H - 1
<PAGE> 149
Exhibit I
Organization Chart of Borrower and its Subsidiaries
Exhibit I has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Exhibit I - 1
<PAGE> 150
Exhibit J
Form of Designated Officer's Certificate
Reference is made to (i) the Primary Credit Facility pursuant to that
certain Amended and Restated Credit Facility Agreement dated as of December 18,
1997 by and among Borrower, NationsBank of Texas, N.A., as Administrative
Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New
York, as Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders from time to time parties thereto
(the "Primary Credit Agreement") and (ii) the 364 Day Credit Facility pursuant
to that certain Amended and Restated Credit Facility Agreement dated as of
December 18, 1997 by and among Borrower, NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, the Co-Agents party thereto, and the Lenders from time to
time parties thereto (the "364 Day Credit Agreement" and, together with the
Primary Credit Facility, the "Credit Agreements"). Terms which are defined in
the Credit Agreements and which are used but not defined herein are used herein
with the meanings given them in the Credit Agreements.
This Certificate is furnished pursuant to Section 5.1(b)(2) of the
Credit Agreements. Together herewith the Borrower is furnishing to Managing
Agents, the Co-Agents and each Lender the Borrower's [FINANCIAL STATEMENTS]
(the "Financial Statements") as of ______________(the "Reporting Date"). The
Borrower hereby represents, warrants, and acknowledges to Agents and each
Lender that:
(a) the Designated Officer of the Borrower signing this instrument
is a duly elected, qualified and acting officer of the
Borrower;
(b) the Financial Statements are accurate and complete and satisfy
the requirements of the Credit Agreements;
(c) attached as Schedule I hereto is a schedule of calculations
showing compliance (or noncompliance, as the case may be) as
of the Reporting Date with the requirements of Section 5.3 of
the Credit Agreements; and
(d) on the Reporting Date, each Borrower was, and on the date
hereof the Borrower is, in full compliance with the disclosure
requirements of Section 5.1(d) of the Credit Agreements, and
no Default otherwise existed on the Reporting Date or
otherwise exists on the date of
Exhibit J - 1
<PAGE> 151
this Certificate [except for Default(s) under Section(s)
________________ of the Credit Agreements, which [is/are] more
fully described on a schedule attached hereto].
The Designated Officer of the Borrower signing this instrument hereby
certifies that he has reviewed the Loan Documents and the Financial Statements
and has otherwise undertaken such inquiry as is in his opinion necessary to
enable him to express an informed opinion with respect to the above
representations, warranties and acknowledgments of the Borrower and, to the
best of his knowledge, such representations, warranties, and acknowledgments
are true, correct and complete.
PIONEER NATURAL RESOURCES COMPANY
By:
----------------------------------
Name:
Title:
Date:
---------------------------------
Exhibit J - 2
<PAGE> 152
Schedule I
================================================================================
COMPLIANCE WITH FINANCIAL COVENANTS AS OF _____________. ($ in 000's)
================================================================================
A. EBITDAX TO CONSOLIDATED INTEREST EXPENSE RATIO
Minimum ratio allowed 3.75
============
B. CONSOLIDATED TOTAL FUNDED DEBT TO TOTAL
CAPITALIZATION
Maximum ratio allowed 60%
============
================================================================================
COMPUTATION OF FINANCIAL REQUIREMENTS AND RATIOS AS OF _____________
================================================================================
A. EBITDAX TO CONSOLIDATED INTEREST EXPENSE RATIO
(Section 5.3(a)) ($ in 000's)
(i) EBITDAX (as defined in Section 5.3(a))
For the period ended __________, the sums
of the amounts for such period of
Consolidated net income, Consolidated
Interest Expense, depreciation expense,
depletion expense, amortization expense,
federal and state income taxes,
exploration and abandonment expense and
other non-cash charges and expenses, all
as determined on a Consolidated basis for
Borrower and its Consolidated
Subsidiaries; $______________
(ii) CONSOLIDATED INTEREST EXPENSE
(as defined in Section 5.3(a))
For the period ended ___________________,
total interest expense,
Exhibit J - 3
<PAGE> 153
whether paid or accrued, of Borrower and
its Consolidated Subsidiaries on a
Consolidated basis, including, without
limitation, all commissions, discounts
and other fees and charges owed with
respect to Letters of Credit. $______________
CONSOLIDATED INTEREST EXPENSE
$
==============
EBITDAX TO CONSOLIDATED INTEREST EXPENSE RATIO ((i)(ii))
$
==============
Minimum ratio allowed $ 3.75:1
==============
B. CONSOLIDATED TOTAL FUNDED DEBT TO TOTAL
CAPITALIZATION (Section 5.3(b)) ($ in 000's)
(i) CONSOLIDATED TOTAL FUNDED DEBT
(as defined in Section 1.1)
(a) All indebtedness of Borrower and
its Consolidated Subsidiaries for
borrowed money $_____________
(b) Plus indebtedness of Borrower and
its Consolidated Subsidiaries
constituting an obligation to pay
the deferred purchase price of
property or services (other than
customary payment terms taken in
the ordinary course of the
business) $_____________
(c) Plus indebtedness of Borrower and
its Consolidated Subsidiaries
evidenced by a bond, debenture,
note or similar instrument $_____________
(d) Plus principal obligations under
leases capitalized in accordance
with GAAP under which either
Borrower or any of its
Consolidated Subsidiaries is the
lessee $_____________
(e) Plus indebtedness or obligations
of the type described in clauses
(a), (b), (c) or (d) of the
definition of Debt, which are
secured by a Lien on any property
owned by Borrower or any of its
Consolidated Subsidiaries, whether
or not such indebtedness or
obligations have been assumed by
Borrower or any of its
Consolidated Subsidiaries (limited
however to the lesser of (1) the
amount of its liability or (2) the
value
Exhibit J - 4
<PAGE> 154
of such property) (excluding Debt
of the type referred to in clause
(e) of the definition of "Debt") $_____________
(f) Plus the undischarged balance of
any production payment created by
Borrower or any of its
Consolidated Subsidiaries or for
the creation of which Borrower or
its Consolidated Subsidiaries
directly or indirectly received
payment. $_____________
CONSOLIDATED TOTAL FUNDED DEBT $
=============
(ii) TOTAL CAPITALIZATION (as defined in Section 1.1)
(a) Consolidated Total Funded Debt of
the Borrower and its Consolidated
Subsidiaries (See B(i) above) $_____________
(b) Plus Consolidated shareholders'
equity of the Borrower and its
Consolidated Subsidiaries $_____________
TOTAL CAPITALIZATION
$
=============
CONSOLIDATED TOTAL FUNDED DEBT TO TOTAL
CAPITALIZATION((i)/(ii)) %
=============
Maximum ratio 60%
=============
Exhibit J - 5
<PAGE> 155
Exhibit K-1
Form of Election to Convert
___________________, _______
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn: Mickey McLean
Re: Conversion of Restricted Subsidiary
Gentlemen:
Reference is made to (i) that certain Amended and Restated Credit
Facility Agreement dated as of December 18, 1997 by and among Borrower,
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Primary Credit Agreement") and (ii) that certain Amended and Restated Credit
Facility Agreement dated as of December 18, 1997 by and among Borrower,
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"364 Day Credit Agreement" and, together with the Primary Credit Agreement, the
"Credit Agreements"). Terms not defined herein which are defined in the Credit
Agreement shall have for the purposes hereof the meanings provided therein.
The Borrower hereby elects, pursuant and subject to Section 5.2(i) of
the Credit Agreements, to convert, effective as of ________________, ________,
[NAME OF RESTRICTED SUBSIDIARY], a [JURISDICTION] [CORPORATION] [PARTNERSHIP],
("Subject Subsidiary"), from a Restricted Subsidiary to an Unrestricted
Subsidiary. The Borrower hereby certifies that all requirements for the
conversion of the Subject Subsidiary to an Unrestricted Subsidiary, as
specified in the Credit Agreements, have been and will be met, both as of the
date hereof and after giving effect to such conversion. After giving effect to
such conversion, no Default will exist. The Borrower hereby agrees that the
election to convert contained herein shall not be effective if the foregoing
certifications are not true and correct in all respects as of the date hereof
or are not true and correct in all respects as of the date of such conversion.
This election to convert
Exhibit K-1 - 1
<PAGE> 156
shall not affect any obligation of the Borrower under the Credit Agreements or
under any Note under any Credit Agreement.
This instrument shall be construed in accordance with and governed by
the laws of the State of Texas.
PIONEER NATURAL RESOURCES COMPANY
By:
------------------------------
Name:
Title:
Receipt of the above Election to Convert is hereby acknowledged on
______________, ________.
NATIONSBANK OF TEXAS, N.A., as
Administrative Agent
By:
------------------------------
Name:
Title:
Exhibit K-1 - 2
<PAGE> 157
Exhibit K-2
Form of Release
This Release is delivered to [NAME OF SUBSIDIARY] in connection with
(i) the Primary Credit Facility pursuant to Section 5.2(i) of that certain
Amended and Restated Credit Facility Agreement dated as of December 18, 1997 by
and among Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC
Inc., as Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Primary Credit Agreement"), and (ii) the 364 Day Credit Facility pursuant to
Section 5.2(i) of that certain Amended and Restated Credit Facility Agreement
dated as of December 18, 1997 by and among Borrower, NationsBank of Texas,
N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (the "364 Day Credit Agreement" and, together with
the Primary Credit Agreement, the "Credit Agreements"). Defined terms used in
this Release shall be used with the same meanings set forth in the Credit
Agreements.
Pursuant to the election to convert in the form of Exhibit K-1 to the
Credit Agreements delivered to Administrative Agent on ______________________,
19 _____, the Borrower has notified the Lenders that it has converted ___
______________ [NAME OF SUBSIDIARY] from a Restricted Subsidiary to an
Unrestricted Subsidiary. Subject to the accuracy of the information contained
in such notice of conversion, the undersigned Managing Agents and Lenders
hereby release __ _______________________________ [NAME OF FORMER RESTRICTED
SUBSIDIARY] from its obligations as Guarantor under its Guaranty dated as of
________, 199__, as from time to time amended, modified and supplemented, other
than obligations if any, pursuant to Section _____ thereof.
This Release may be separately executed in any number of counterparts
and by different parties hereto on separate counterparts, each of which when so
executed shall be deemed to constitute one and the same release.
[Add signature lines for Lenders
and Managing Agents]
Agreed and Accepted
this ___ day of __________, 199__ :
- -------------------------------------
[Name of Restricted Subsidiary]
By:
---------------------------------
Name:
Title:
Exhibit K-2 - 1
<PAGE> 158
Exhibit L
Form of Agreement to be Bound
_____________, 199____
PIONEER NATURAL RESOURCES COMPANY
303 West Wall, Suite 101
Midland, Texas 79701
Attention: Curt F. Kamradt
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attention: Mickey McLean
NationsBank of Texas, N.A.
303 West Wall Street
Midland, Texas 79701
Attn: Frank K. Stowers
CIBC Inc.
2 Houston Center
909 Fannin Street, Suite 1200
Houston, Texas 77010
Attention: Paul Jordan
Re: Assignment to ______________________________of
________________________________ the Loans of
_____________________ - Primary Credit Facility
Gentlemen:
We refer to Section 8.8(a) of that certain Amended and Restated Credit
Facility Agreement dated as of December 18, 1997 by and among Borrower,
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"). Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the Credit Agreement.
This Credit Agreement to be Bound constitutes notice to each of you,
pursuant to Section 8.8(a) of the Credit Agreement, of the assignment to
_______________________ ("Assignee") of (i) an undivided _____ (the "Designated
Percentage"), ($____________________________), of the Loans, LC Obligations and
Commitments of [NAME OF LENDER] ("Assignor") in effect on the date hereof.
Exhibit L - 1
<PAGE> 159
After giving effect to the foregoing assignment, the Loan Commitment
and Percentage Share of each of the Assignor and Assignee is as set forth
beneath the signatures of each such Person below.
Assignee hereby acknowledges and confirms that it has received a copy
of the Credit Agreement and the exhibits related thereto, together with a copy
of all documents which were required to be delivered under the Credit Agreement
as a condition to the making of the Loans and issuing Letters of Credit
thereunder. Assignee further confirms and agrees that in becoming a Lender and
in making its Loans and participating in Letters of Credit under the Credit
Agreement, such actions have and will be made without recourse to, or
representation or warranty by, Assignor, except as expressly set forth in the
Assignment and Assumption of even date herewith between Assignor and Assignee.
Assignor and Assignee hereby agree that [ASSIGNOR/ASSIGNEE] will pay
the processing fee referred to in Section 8.8(a) of the Credit Agreement to
Administrative Agent upon the delivery thereof. It is understood and agreed
that all fees accrued under the Credit Agreement to the date hereof are for
Assignor's account and those accruing from and after the date hereof are for
Assignee's account to the extent specified in the second paragraph hereof.
Each of Assignor and Assignee hereby agree that if it receives any amount under
the Credit Agreement which is for the account of the other, it shall receive
and hold the same for the account of the other and shall promptly pay the same
to the other.
The assignment shall become effective upon (i) the receipt by the
Borrower and Administrative Agent of this document, (ii) the receipt by
Administrative Agent of the processing fee referred to in the preceding
paragraph, and (iii) in accordance with Section 8.8(a) of the Credit Agreement,
the consent of the Borrower and Administrative Agent.
Upon the effective date of this Credit Agreement the Assignee:
(a) shall have all rights and benefits of a "Lender" under the
Credit Agreement as if it were an original signatory thereto to the extent
specified in the second paragraph hereof; and
(b) agrees to be bound by the terms and conditions of each of the
Credit Agreement, and be obligated thereunder, and hereby makes each of the
representations and warranties and acknowledgments contained in such documents
as if it were an original signatory thereto.
Exhibit L - 2
<PAGE> 160
Upon the effective date of this Agreement, the Assignor shall be
released from its obligations under the Credit Agreement and the other Loan
Documents to the extent specified in the second paragraph.
Assignee hereby advises each of you of the following matters with
respect to the assigned Loans:
(A) Addresses for Notice:______________________
Telephone:_________________________________
Telecopy:__________________________________
Institution Name:__________________________
Attention:_________________________________
(B) Payment Instructions:_______________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
This Credit Agreement may be executed by Assignor and Assignee in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
The execution below by the Borrower and Administrative Agent shall
evidence their consent to this Agreement in accordance with Section 8.8(a) of
the Credit Agreement.
Exhibit L - 3
<PAGE> 161
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be executed by its official, officer or agent thereunto duly authorized,
effective as of ______________, ________.
- ---------------------------------- --------------------------------
As Assignor As Assignee
By: By:
------------------------------- -----------------------------
Name: Name:
Title: Title:
Percentage Share: % Percentage Share: %
---------------- -------------
Loan Commitment: Loan Commitment:
---------------- --------------
APPROVED:
PIONEER NATURAL RESOURCES NATIONSBANK OF TEXAS, N.A.
COMPANY
By: By:
------------------------------- -----------------------------
Name: Name:
Title: Title:
Exhibit L - 4
<PAGE> 162
Exhibit M
[Form of]
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of ______,
199___, made by ______________________, a __________________ corporation
("Pledgor"), in favor of NATIONSBANK OF TEXAS, N.A., as collateral agent
(together with any successor(s) thereto in such capacity, the "Collateral
Agent") for each of Lender Parties (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Pioneer Natural Resources
Company, a Delaware corporation ("Borrower"), NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, the Co-Agents party thereto, and the Lenders from time to
time parties thereto (together with all amendments, supplements, restatements
and other modifications, if any, thereafter made thereto, the "Primary Credit
Agreement"), the Lenders have extended Commitments (as defined in the Primary
Credit Agreement) to make Loans to Borrower and to issue or participate in
Letters of Credit on behalf of Borrower; and
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co- Agents party thereto, and the Lenders from
time to time parties thereto (together with all amendments, supplements,
restatements and other modifications, if any, thereafter made thereto, the "364
Day Credit Agreement", and together with the Primary Credit Agreement, the
"Credit Agreements"), the Lenders have extended Commitments (as defined in the
364 Day Credit Agreement) to make Loans to Borrower; and
WHEREAS, pursuant to the Credit Agreements, Pledgor is required to
execute and deliver this Pledge Agreement; and
WHEREAS, Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
WHEREAS, it is in the best interests of Pledgor to execute this Pledge
Agreement inasmuch as Pledgor will derive substantial direct and indirect
benefits from the Loans made from time to
Exhibit M - 1
<PAGE> 163
time to Borrower and Letters of Credit issued on behalf of Borrower pursuant to
the Credit Agreements;
NOW THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, and in order to induce the Lenders to make Loans
(including the initial Loans) to Borrower pursuant to the Credit Agreements and
for the Issuing Bank to issue Letters of Credit on behalf of Borrower and for
the Lenders to acquire participations in such Letters of Credit pursuant to the
Primary Credit Agreement, Pledgor agrees, for the benefit of each Lender Party,
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the first recital.
"Borrower" is defined in the first recital.
"Collateral" is defined in Section 2.1.
"Collateral Agent" is defined in the preamble.
"Commitments" means "Commitments" as defined in the Primary Credit
Agreement and "Commitments" as defined in the 364 Day Credit Agreement.
"Credit Agreements" is defined in the second recital.
"Debtor" is defined in Section 2.1(a)(i).
"Distributions" means all stock dividends, liquidating dividends,
shares of stock resulting from (or in connection with the exercise of) stock
splits, reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock or security entitlements constituting Collateral, but shall not
include Dividends.
"Dividends" means cash dividends and cash distributions with respect
to any Pledged Shares made in the ordinary course of business and not a
liquidating dividend.
Exhibit M - 2
<PAGE> 164
"Lender Party" means, as the context may require, any Lender, any
Issuing Bank or any Agent and each of its respective successors, transferees
and assigns under the Credit Agreements.
"Lenders" means "Lenders" as defined in the Primary Credit Agreement
and "Lenders" as defined in the 364 Day Credit Agreement.
"Loan Documents" means "Loan Documents" as defined in the Primary
Credit Agreement and "Loan Documents" as defined in the 364 Day Credit
Agreement.
"1994 Amendments" means the 1994 Amendments to Articles 8 and 9 of the
Uniform Commercial Code promulgated by the American Law Institute and the
National Conference of Commissions for Uniform State Laws.
"Notes" means "Notes" as defined in the Primary Credit Agreement and
"Notes" as defined in the 364 Day Credit Agreement.
"Obligations" means "Obligations" as defined in the Primary Credit
Agreement and "Obligations" as defined in the 364 Day Credit Agreement.
"Pledge Agreement" is defined in the preamble.
"Pledged Share Issuer" means each Person identified in Attachment 1
hereto as the issuer of the Pledged Shares identified opposite the name of such
Person.
"Pledged Shares" means all shares of capital stock of any Pledged
Share Issuer which are delivered by Pledgor to Collateral Agent hereunder and
all other pledged shares of capital stock from time to time hereafter delivered
by Pledgor to Collateral Agent for the purpose of pledge under this Pledge
Agreement or any other Loan Document, and all proceeds of any of the foregoing.
"Pledgor" is defined in the preamble.
"Primary Credit Agreement" is defined in the first recital.
"Secured Obligations" is defined in Section 2.2.
"Securities Act" is defined in Section 6.2.
"364 Day Credit Agreement" is defined in the second recital.
"U.C.C." means the Uniform Commercial Code as in effect in the State
of Texas.
Exhibit M - 3
<PAGE> 165
SECTION 1.2. Primary Credit Agreement Definitions. Unless
otherwise defined herein or the context otherwise requires, terms used in this
Pledge Agreement, including its preamble and recitals, have the meanings
provided in the Primary Credit Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein
or the context otherwise requires, terms for which meanings are provided in the
U.C.C. are used in this Pledge Agreement, including its preamble and recitals,
with such meanings.
ARTICLE II
PLEDGE
SECTION 2.1. Grant of Security Interest. Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to
Collateral Agent, for its benefit and the ratable benefit of each of Lender
Parties, and hereby grants to Collateral Agent, for its benefit and the ratable
benefit of Lender Parties, a continuing security interest in, all of the
following property (the "Collateral"):
(a) 65% of the issued and outstanding shares of capital
stock of each Pledged Share Issuer identified in Item B of Attachment
1 hereto;
(b) 65% of all other Pledged Shares issued from time to
time;
(c) all Dividends, Distributions, interest, and other
payments and rights with respect to any Pledged Shares; and
(d) all proceeds of any of the foregoing.
SECTION 2.2. Security for Obligations. This Pledge Agreement
secures:
(a) the payment in full of all Obligations of Borrower
now or hereafter existing under the Credit Agreements, the Notes, the
LC Applications and each other Loan Document to which Borrower is or
may become a party, whether for principal, interest, costs, fees,
expenses, or otherwise, and all obligations of Pledgor and each other
Designated Entity now or hereafter existing under this Pledge
Agreement and each other Loan Document to which it is or may become a
party
(b) the payment and performance of any and all present or
future obligations of Borrower according to the terms of any present
or future rate swap, rate cap, rate floor, rate
Exhibit M - 4
<PAGE> 166
collar, currency exchange transaction, forward rate agreement, or
other exchange or rate protection agreements or any option with
respect to any such transaction now existing or hereafter entered into
between Borrower or any of its Subsidiaries and one or more of the
Lenders or their Affiliates ("interest rate swap agreement");
(c) the payment and performance of any and all present or
future obligations of Borrower according to the terms of any present
or future crude oil, natural gas or other hydrocarbons swap
agreements, crude oil, natural gas or other hydrocarbons cap, crude
oil, natural gas or other hydrocarbons floor, crude oil, natural gas
or other hydrocarbons collar, crude oil, natural gas or other
hydrocarbons exchange transaction, forward crude oil, natural gas or
other hydrocarbons agreement, or other exchange or crude oil, natural
gas or other hydrocarbons protection agreements or any option with
respect to any such transaction now existing or hereafter entered into
between Borrower or any of its Subsidiaries and one or more of the
Lenders or their Affiliates; and
(d) all renewals, rearrangements, increases, extensions
for any period, substitutions, modification, amendments or supplements
in whole or in part of any of the above loan documents or obligations
(all such obligations of Borrower and Pledgor being the "Secured Obligations").
SECTION 2.3. Delivery of Pledged Shares. (a) All certificates or
instruments representing or evidencing any Collateral, including all Pledged
Shares shall be delivered to and held by or on behalf of Collateral Agent
pursuant hereto, shall be in suitable form for transfer by delivery, and shall
be accompanied by all necessary indorsements or instruments of transfer or
assignment, duly executed in blank.
(b) (i) To the extent any of the Collateral constitutes
"uncertificated securities" (as defined in Section 8-102(a)(18) of the
U.C.C. or Section 8-102 of the Uniform Commercial Code as in effect in
any jurisdiction that has not adopted the 1994 Amendments) and the
issuer of which is organized in a jurisdiction, or has selected a
jurisdiction (in circumstances permitted by Section 8-110(d) of the
U.C.C.), that has not enacted the 1994 Amendments, Pledgor shall cause
the issuer thereof to acknowledge to Collateral Agent the registration
on the books of such issuer of the pledge and security interest hereby
created in the manner required by Section 8-408(d) of the Uniform
Commercial Code of its jurisdiction of organization.
Exhibit M - 5
<PAGE> 167
(ii) To the extent any of the Collateral constitutes
"uncertificated securities" (as defined in Section 8-102(a)(18) of the
U.C.C.) and the issuer of which is organized in a jurisdiction, or has
selected a jurisdiction (in circumstances permitted by Section
8-110(d) of the U.C.C.), that has enacted the 1994 Amendments, Pledgor
shall cause the issuer thereof to acknowledge to Collateral Agent the
registration on the books of such issuer of the pledge and security
interest hereby created in the manner required by Section 8- 301(1)(b)
of the U.C.C.
(c) (i) To the extent any of the Collateral constitutes a
"security entitlement" or a "securities account" (as such terms are
defined in Sections 8-102(a)(17) and 8-501, respectively, of the
U.C.C.) and the jurisdiction of the securities intermediary (as
described in Section 8-110(e) of the U.C.C.) against which such
securities entitlement is established or at which such securities
account is maintained is not a jurisdiction that has adopted the 1994
Amendments, Pledgor shall cause such Collateral to be transferred to
Collateral Agent pursuant to Section 8-313(1) of the Uniform
Commercial Code as in effect in such jurisdiction in a manner
satisfactory to Collateral Agent.
(ii) To the extent any of the Collateral constitutes a
"security entitlement" or a "securities account" (as such terms are
defined in Sections 8-102(a)(17) and 8-501, respectively, of the
U.C.C.) and the jurisdiction of the securities intermediary (as
described in Section 8-110(e) of the U.C.C.) against which such
securities entitlement is established or at which such securities
account is maintained is a jurisdiction that has adopted the 1994
Amendments, Pledgor shall cause to be delivered to Collateral Agent an
agreement, in form and substance satisfactory to Collateral Agent,
executed by such securities intermediary whereby such securities
intermediary agrees (i) that it will comply with entitlement orders
originated by Collateral Agent without further consent by Pledgor with
respect to all such Collateral (it being understood that such
agreement may provide that at all times when such securities
intermediary has not been notified that a Default is in existence, the
securities intermediary may comply with entitlement orders of
Pledgor), (ii) to subordinate any security interest it may have in and
to all such Collateral to the security interest of Collateral Agent
therein and (iii) that it will not agree with any Person other than
Collateral Agent in any manner that would grant such Person "control"
over any such Collateral.
SECTION 2.4. Dividends on Pledged Shares. In the event that any
Dividend is to be paid on any Pledged Share or securities
Exhibit M - 6
<PAGE> 168
entitlement at a time when (x) no Default has occurred and is continuing, and
no (y) Event of Default has occurred and is continuing, such Dividend or
payment may be paid directly to Pledgor. If any such Default or Event of
Default has occurred and is continuing, then any such Dividend or payment shall
be paid directly to Collateral Agent.
SECTION 2.5. Continuing Security Interest; Transfer of Note. This
Pledge Agreement shall create a continuing security interest in the Collateral
and shall
(a) remain in full force and effect until payment in full
of all Secured Obligations and the termination of all Commitments,
(b) be binding upon Pledgor and its successors,
transferees and assigns, and
(c) inure, together with the rights and remedies of
Collateral Agent hereunder, to the benefit of Collateral Agent and
each other Lender Party.
Without limiting the foregoing clause (c), any Lender may assign or otherwise
transfer (in whole or in part) any Note or Loan held by it to any other Person
or entity, and such other Person or entity shall thereupon become vested with
all the rights and benefits in respect thereof granted to such Lender under any
Loan Document (including this Pledge Agreement) or otherwise, subject, however,
to any contrary provisions in such assignment or transfer, and to the
provisions of Section 8.8 of the Credit Agreements and Article VII of the
Credit Agreements. Upon the payment in full of all Secured Obligations and the
termination of all Commitments, the security interest granted herein shall
terminate and all rights to the Collateral shall revert to Pledgor. Upon any
such termination, Collateral Agent will, at Pledgor's sole expense, deliver to
Pledgor, without any representations, warranties or recourse of any kind
whatsoever, all certificates and instruments representing or evidencing all
Pledged Shares, together with all other Collateral held by Collateral Agent
hereunder, and execute and deliver to Pledgor such documents as Pledgor shall
reasonably request to evidence such termination.
SECTION 2.6. Security Interest Absolute. All rights of Collateral
Agent and the security interests granted to Collateral Agent hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional,
irrespective of (a) any lack of validity or enforceability of the Credit
Agreements, any Note or any other Loan Document, (b) the failure of any Lender
Party or any holder of any Note, (i) to assert any claim or demand or to
enforce any right or remedy against Borrower, any other
Exhibit M - 7
<PAGE> 169
Designated Entity or any other Person under the provisions of the Credit
Agreements, any Note, any other Loan Document or otherwise, or (ii) to exercise
any right or remedy against any other guarantor of, or collateral securing, any
Obligations of Borrower or any other Designated Entity, (c) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations or any other extension, compromise or renewal of any Obligation of
Borrower or any other Designated Entity, (d) any reduction, limitation,
impairment or termination of any Obligations of Borrower or any other
Designated Entity for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and Pledgor
hereby waives any right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligations of Borrower, any other
Designated Entity or otherwise, (e) any amendment to, rescission, waiver, or
other modification of, or any consent to departure from, any of the terms of
the Credit Agreements, any Note or any other Loan Document, (f) any addition,
exchange, release, surrender or non-perfection of any collateral (including the
Collateral), or any amendment to or waiver or release of or addition to or
consent to departure from any guaranty, for any of the Obligations, or (g) any
other circumstances which might otherwise constitute a defense available to, or
a legal or equitable discharge of, Borrower, any other Designated Entity, any
surety or any guarantor.
SECTION 2.7. Waiver of Subrogation. Pledgor hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
Borrower or any other Designated Entity that arise from the existence, payment,
performance or enforcement of Pledgor's obligations under this Pledge Agreement
or any other Loan Document, including any right of subrogation, reimbursement,
exoneration, or indemnification, any right to participate in any claim or
remedy of Lender Parties against Borrower or any other Designated Entity or any
collateral which Collateral Agent now has or hereafter acquires, whether or not
such claim, remedy or right arises in equity, or under contract, statute or
common law, including the right to take or receive from Borrower or any other
Designated Entity, directly or indirectly, in cash or other property or by
set-off or in any manner, payment or security on account of such claim or other
rights. If any amount shall be paid to Pledgor in violation of the preceding
sentence and the Obligations shall not have been paid in cash in full and the
Commitments have not been terminated, such amount shall be deemed to have been
paid to Pledgor for the benefit of, and held in trust for, Lender Parties, and
shall forthwith be paid to Lender Parties to be credited and applied upon the
Obligations, whether matured or
Exhibit M - 8
<PAGE> 170
unmatured. Pledgor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by the Credit Agreements
and that the waiver set forth in this Section is knowingly made in
contemplation of such benefits.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Warranties, etc. Pledgor represents and warrants
unto each Lender Party, as at the date of each pledge and delivery hereunder
(including each pledge and delivery of Pledged Shares) by Pledgor to Collateral
Agent of any Collateral, as set forth in this Article.
SECTION 3.1.1. Representations in Credit Agreement. Pledgor hereby
incorporates by reference, mutatis mutandi, each of the representations and
warranties made in Sections 4.1(a), (b), (c), (d) and (e) of the Credit
Agreement.
SECTION 3.1.2. Ownership, No Liens, etc. Pledgor is the legal and
beneficial owner of, and has good title to (and has full right and authority to
pledge and assign) such Collateral, free and clear of all liens, security
interests, options, or other charges or encumbrances, except any lien or
security interest granted pursuant hereto in favor of Collateral Agent.
SECTION 3.1.3. Valid Security Interest. The delivery of such
Collateral to Collateral Agent is effective to create a valid, perfected, first
priority security interest in such Collateral and all proceeds thereof,
securing the Secured Obligations. No filing or other action will be necessary
to perfect or protect such security interest.
SECTION 3.1.4. As to Pledged Shares. In the case of any Pledged
Shares constituting such Collateral, all of such Pledged Shares are duly
authorized and validly issued, fully paid, and non-assessable, and constitute
65% of the issued and outstanding shares of capital stock of each Pledged Share
Issuer owned by Pledgor set forth across from the name of such Pledged Share
Issuer on Attachment 1 hereto. Pledgor has no Restricted Subsidiary other than
the Pledged Share Issuers.
SECTION 3.1.5. Authorization, Approval, etc. Except as contemplated
by Section 2.3(b) and (c), no authorization, approval, or other action by, and
no notice to or filing with, any governmental authority, regulatory body or any
other Person is required either (a) for the pledge by Pledgor of any Collateral
pursuant to this Pledge Agreement or for the execution, delivery, and
performance of this Pledge Agreement by Pledgor, or (b) for the exercise by
Collateral Agent of the rights provided for in this Pledge Agreement, or,
except with
Exhibit M - 9
<PAGE> 171
respect to any Pledged Shares, as may be required in connection with a
disposition of such Pledged Shares by laws affecting the offering and sale of
securities generally, the remedies in respect of the Collateral pursuant to
this Pledge Agreement.
ARTICLE IV
COVENANTS
SECTION 4.1. Protect Collateral; Further Assurances, etc. Pledgor
will not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral (except in favor of Collateral Agent hereunder). Pledgor will
warrant and defend the right and title herein granted unto Collateral Agent in
and to the Collateral (and all right, title and interest represented by the
Collateral) against the claims and demands of all Persons whomsoever. Pledgor
agrees that at any time, and from time to time, at the expense of Pledgor,
Pledgor will promptly execute and deliver all further instruments, and take all
further action, that may be necessary or desirable, or that Collateral Agent
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Pledgor shall provide Collateral Agent with copies of all written
information received from any securities intermediary of Pledgor with respect
to any Collateral.
SECTION 4.2. Stock Powers, etc. Pledgor agrees that all Pledged
Shares (and all other shares of capital stock constituting Collateral)
delivered by Pledgor pursuant to this Pledge Agreement will be accompanied by
duly indorsed undated blank stock powers, in substantially the form of
Attachment 2 hereto, or other equivalent instruments of transfer acceptable to
Collateral Agent. Pledgor will, from time to time upon the request of
Collateral Agent, promptly deliver to Collateral Agent such stock powers, in
substantially the form of Attachment 2, instruments and similar documents,
satisfactory in form and substance to Collateral Agent, with respect to the
Collateral as Collateral Agent may reasonably request and will, from time to
time upon the request of Collateral Agent after the occurrence of any Event of
Default, promptly transfer any Pledged Shares or other shares of common stock
constituting Collateral into the name of any nominee designated by Collateral
Agent.
SECTION 4.3. Continuous Pledge. Subject to Section 2.4, the
Pledgor will, at all times, keep pledged to Collateral Agent pursuant hereto
all Pledged Shares, all other shares of capital stock constituting Collateral,
and all securities, security entitlements and securities accounts constituting
Collateral and all other Collateral and other securities, instruments, security
entitlements, financial assets, investment property, proceeds,
Exhibit M - 10
<PAGE> 172
and rights from time to time received by or distributable to Pledgor in respect
of any Collateral.
SECTION 4.4. Dividends, etc. Pledgor agrees after any
acceleration under the Credit Agreements or Default occurring on the Maturity
Date, promptly upon receipt thereof by Pledgor and without any request therefor
by Collateral Agent, to deliver (properly endorsed where required hereby or
requested by Collateral Agent) to Collateral Agent all Dividends,
Distributions, all interest, all principal, all other cash payments, and all
proceeds of the Collateral, all of which shall be held by Collateral Agent as
additional Collateral for use in accordance with Section 6.3. All Dividends,
Distributions, interest, principal, cash payments, and proceeds which may at
any time and from time to time be held by Pledgor but which Pledgor is then
obligated to deliver to Collateral Agent, shall, until delivery to Collateral
Agent, be held by Pledgor separate and apart from its other property in trust
for Collateral Agent.
SECTION 4.5. Additional Undertakings. Pledgor will not, without
the prior written consent of Collateral Agent, take or omit to take any action
the taking or the omission of which would result in any impairment or
alteration of the security interest in the Pledged Shares.
ARTICLE V
COLLATERAL AGENT
SECTION 5.1. Agent Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints Collateral Agent Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor or
otherwise, from time to time in Collateral Agent's discretion, to take any
action and to execute any writing or paper which Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Pledge Agreement,
including without limitation: (a) after the occurrence and continuance of an
Event of Default, to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral; (b) to receive, endorse, and
collect any drafts or other instruments, documents and chattel paper, in
connection with clause (a) above; and (c) to file any claims or take any action
or institute any proceedings which Collateral Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to enforce
the rights of Collateral Agent with respect to any of the Collateral. Pledgor
hereby acknowledges, consents and agrees that the power of attorney granted
pursuant to this Section is irrevocable and coupled with an interest.
Exhibit M - 11
<PAGE> 173
SECTION 5.2. Agent May Perform. If Pledgor fails to perform any
agreement contained herein, Collateral Agent may itself perform, or cause
performance of, such agreement, and the expenses of Collateral Agent incurred
in connection therewith shall be payable by Pledgor pursuant to Section 6.4.
SECTION 5.3. Agent Has No Duty. The powers conferred on
Collateral Agent hereunder are solely to protect its interest (on behalf of
Lender Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
Collateral Agent shall have no duty as to any Collateral or responsibility for
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged Shares,
whether or not Collateral Agent has or is deemed to have knowledge of such
matters or (b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. Collateral Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
of the Collateral, if it takes such action for that purpose as Pledgor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure of Collateral Agent
to comply with any such request at any time shall not in itself be deemed a
failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. On or after any acceleration under
the Credit Agreements or Default occurring on the Maturity Date:
(a) Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the U.C.C. (whether or not the U.C.C.
applies to the affected Collateral) and also may, without notice
except as specified below, sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any of Collateral
Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as Collateral Agent may deem
commercially reasonable. Pledgor agrees that, to the extent notice of
sale shall be required by law,
Exhibit M - 12
<PAGE> 174
at least ten days' prior notice to Pledgor of the time and place of
any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. Collateral Agent shall not
be obligated to make any sale of Collateral regardless of notice of
sale having been given. Collateral Agent may adjourn any public or
private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(b) Collateral Agent may (i) transfer all or any part of
the Collateral into the name of Collateral Agent or its nominee, with
or without disclosing that such Collateral is subject to the lien and
security interest hereunder, (ii) notify the parties obligated on any
of the Collateral to make payment to Collateral Agent of any amount
due or to become due thereunder, (iii) enforce collection of any of
the Collateral by suit or otherwise, and surrender, release or
exchange all or any part thereof, or compromise or extend or renew for
any period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto, (iv)
endorse any checks, drafts, or other writings in Pledgor's name to
allow collection of the Collateral, (v) take control of any proceeds
of the Collateral, and (vi) execute (in the name, place and stead of
Pledgor) endorsements, assignments, stock powers and other instruments
of conveyance or transfer with respect to all or any of the
Collateral.
SECTION 6.2. Compliance with Restrictions. Pledgor agrees that in
any sale of any of the Collateral whenever an Event of Default shall have
occurred and be continuing, Collateral Agent is hereby authorized to comply
with any limitation or restriction in connection with such sale as it may be
advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and Pledgor further agrees that such compliance shall not result in such sale
being considered or deemed not to have been made in a commercially reasonable
manner, nor shall Collateral Agent be liable nor accountable to Pledgor for any
discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
Exhibit M - 13
<PAGE> 175
SECTION 6.3. Application of Proceeds. All cash proceeds received
by Collateral Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral may, in the discretion of
Collateral Agent, be held by Collateral Agent as additional collateral security
for, or then or at any time thereafter be applied (after payment of any amounts
payable to Collateral Agent pursuant to Sections 6.4 of the Credit Agreements)
in whole or in part by Collateral Agent against, all or any part of the Secured
Obligations in such order as Collateral Agent shall elect.
Any surplus of such cash or cash proceeds held by Collateral Agent and
remaining after payment in full of all the Secured Obligations, and the
termination of all Commitments, shall be paid over to Pledgor or to whomsoever
may be lawfully entitled to receive such surplus.
SECTION 6.4. Indemnity and Expenses. Pledgor hereby indemnifies
and holds harmless Collateral Agent in accordance with Sections 6.4 of the
Credit Agreements.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Pledge Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
SECTION 7.2. Amendments. No amendment to or waiver of any
provision of this Pledge Agreement, nor consent to any departure by Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
SECTION 7.3. Protection of Collateral. Collateral Agent may from
time to time, at its option, perform any act which Pledgor agrees hereunder to
perform and which Pledgor shall fail to perform after being requested in
writing so to perform after the occurrence and continuance of an Event of
Default and Collateral Agent may from time to time take any other action which
Collateral Agent reasonably deems necessary for the maintenance, preservation
or protection of any of the Collateral or of its security interest therein.
SECTION 7.4. Obligations Not Affected. The obligations of Pledgor
under this Pledge Agreement shall remain in full force and effect without
regard to, and shall not be impaired or affected by:
Exhibit M - 14
<PAGE> 176
(a) any amendment or modification or addition or
supplement to the Credit Agreements, any Note, any other Loan
Documents, any instrument delivered in connection therewith, or any
assignment or transfer thereof;
(b) any exercise, non-exercise, or waiver by Collateral
Agent or any Lender of any right, remedy, power, or privilege under or
in respect of, or any release of any guaranty or collateral provided
pursuant to, this Pledge Agreement, the Credit Agreements, Pledgor's
Guaranty or any other Loan Document;
(c) any waiver, consent, extension, indulgence, or other
action or inaction in respect of this Pledge Agreement, the Credit
Agreements, Pledgor's Guaranty or any other Loan Document or any
assignment or transfer of any thereof; or
(d) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation, or the like, of
Pledgor or any other Person, whether or not Pledgor shall have notice
or knowledge of any of the foregoing.
SECTION 7.5. Notices. All notices, requests, consents, demands
and other communications required or permitted hereunder shall be in writing,
unless otherwise specifically provided herein and shall be deemed sufficiently
given or furnished if delivered by personal delivery, by telecopy (with
telephonic confirmation of transmission, by delivery service with proof of
delivery, or by registered or certified United States mail, postage prepaid, to
Pledgor at the address of Pledgor specified on the signature pages hereto and
to each Agent and each Lender at their addresses specified on the signature
pages to the Credit Agreements (unless changed by similar notice in writing
given by the particular Person whose address is to be changed). Any such
notice or communication shall be deemed to have been given: (a) in the case of
personal delivery service, as of the date of first attempted delivery at the
address provided herein; (b) in the case of telecopy, upon receipt; or (c) in
the case of registered or certified United States mail, three days after
deposit in the mail, postage prepaid.
SECTION 7.6. No Waiver; Remedies. No failure on the part of any
Lender Party or any holder of a Note, an LC Application, or an interest in an
LC Obligation to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
Exhibit M - 15
<PAGE> 177
SECTION 7.7. Section Captions. Section captions used in this
Pledge Agreement are for convenience of reference only, and shall not affect
the construction of this Pledge Agreement.
SECTION 7.8. Severability. Wherever possible each provision of
this Pledge Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Pledge Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Pledge Agreement.
SECTION 7.9. Governing Law, Entire Agreement. THIS PLEDGE
AGREEMENT SHALL BE DEEMED A CONTRACT AND INSTRUMENT MADE UNDER THE LAWS OF THE
STATE OF TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF
AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THIS PLEDGE
AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING
AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.10. Waiver of Jury Trial. EACH OF PLEDGOR, AGENTS AND
LENDERS HEREBY (a) IRREVOCABLY WAIVES, THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS PLEDGE AGREEMENT OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED
THEREWITH, BEFORE OR AFTER MATURITY; (b) IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
SUCH LITIGATION ANY EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES; (c) CERTIFIES
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY
HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS;
AND (d) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO AND ACCEPT THIS
PLEDGE AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION.
SECTION 7.11. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
Exhibit M - 16
<PAGE> 178
CONNECTION WITH, THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF LENDER PARTIES OR PLEDGOR SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF TEXAS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS; PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY BE BROUGHT, AT COLLATERAL
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH PROPERTY MAY BE
FOUND. PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF TEXAS AND THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF TEXAS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH
ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF TEXAS. FOR PURPOSES OF ANY ACTION OR PROCEEDING
INSTITUTED IN THE FEDERAL OR STATE COURTS OF TEXAS, THE UNDERSIGNED HEREBY
IRREVOCABLY DESIGNATES BORROWER WITH OFFICES ON THE DATE HEREOF AT 303 WEST
WALL STREET, SUITE 101, MIDLAND, TEXAS 79701 TO RECEIVE FOR AND ON BEHALF OF
THE UNDERSIGNED SERVICE OF PROCESS IN TEXAS. PLEDGOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, PLEDGOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS PLEDGE AGREEMENT.
THIS WRITTEN PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
Exhibit M - 17
<PAGE> 179
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.
[Pledgor]
---------------------------------------
By:
------------------------------------
Name:
Title:
Address: 303 West Wall
Suite 101
P. O. Box 3178
Midland, Texas 79701
Attention: Curt Kamradt
Telephone: (915) 571-3171
Telecopy: (915) 571-5696
with a copy to:
Garrett Smith
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
Telephone: (972) 402-7013
Telecopy: (972) 402-7028
Exhibit M - 18
<PAGE> 180
NATIONSBANK OF TEXAS, N.A.
By
------------------------------
Name: Frank K. Stowers
Title: Vice President
Address: 303 W. Wall
P. O. Box 1599
Midland, Texas 79701
Attention: Frank K. Stowers
Exhibit M - 19
<PAGE> 181
ACKNOWLEDGMENT
The undersigned hereby agrees and consents to the terms and provisions
of the foregoing Pledge Agreement, including, without limitation, Section 2.3
and Article IV of the Pledge Agreement. The undersigned hereby acknowledges
the registration on its books of the pledge and security interest created by
the Pledge Agreement in the manner required by Section 8-301(1)(b) of the
U.C.C. and that undersigned will not permit any sale, transfer, pledge or other
encumbrance of the Pledged Interests without the prior written consent of the
Agent.
------------------------------
By:
---------------------------
Name:
Title:
Exhibit M - 20
<PAGE> 182
ATTACHMENT 1
to
Pledge Agreement
Pledged Shares
Pledged Share Issuer
<TABLE>
<CAPTION>
Outstanding Shares
Shares Delivered
------------- -------------
<S> <C>
------------- -------------
</TABLE>
Exhibit M - 21
<PAGE> 183
ATTACHMENT 2
to
Pledge Agreement
STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________________________________________
(_______________________) shares of common stock in __________________________,
a _______________ corporation, represented by the attached Certificate No._____
herewith and do hereby irrevocably constitute and appoint _____________________
attorney to transfer the said stock on the books of ___________________________
with full power of substitution in the premises.
DATED ___________________________
[PLEDGOR]
------------------------------
By:
---------------------------
Name:
Title:
IN PRESENCE OF
- -------------------------
Exhibit M - 22
<PAGE> 184
Exhibit N
Request for Competitive Bid Offer
_____________, ________
To: The Lenders party to the Credit Agreement, NationsBank of Texas, N.A.,
as agent (the "Administrative Agent")
From: _________________________ (the "Borrower")
Re: Primary Credit Facility - Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower,
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders from time to time
parties thereto (the "Credit Agreement")
Pursuant to Section 2.22 of the Credit Agreement, we hereby request
Competitive Bid Offers for the following proposed Competitive Bid Advance(s):
Borrowing Date: _________________, ______
<TABLE>
<CAPTION>
Principal Amount(1) Requested Maturity Date(2)
- ------------------- --------------------------
<S> <C>
$
</TABLE>
Upon acceptance by the undersigned of any or all of the Competitive
Bid Offers tendered by Lenders in response to this request, the undersigned
shall be deemed to affirm as of the borrowing date thereof the representations
and warranties made by the Designated Entities in the Credit Agreement and the
other Loan Documents to the extent specified in Section 3.2 thereof (except to
the extent such representations and warranties relate solely to an earlier
date).
- ------------------------------
(1) Amount must be at least $10,000,000 and an integral multiple of
$1,000,000.
(2) At least 15 and up to 360 days.
Exhibit N - 1
<PAGE> 185
Capitalized terms used herein have the meanings assigned to
them in the Credit Agreement.
PIONEER NATURAL RESOURCES COMPANY
By:
---------------------------
Name:
Title:
Exhibit N - 2
<PAGE> 186
Exhibit O
Competitive Bid Offer
______________, ____
To: ____________________________
Attn: ___________________
Re: Primary Credit Facility - Competitive Bid Offer to Pioneer Natural
Resources Company (the "Borrower")
In response to the Borrower's Request for Competitive Bid Offer dated
________, 199_, we hereby make the following Competitive Bid Offer pursuant to
Section 2.22 of the Credit Agreement hereinafter referred to and on the
following terms:
1. Quoting Lender: _________________________________________
2. Person to contact at Lender: ____________________________
3. Borrowing Date: ____________, ______(1)
4. We hereby offer to make Competitive Bid Advance(s) in the following
principal amounts, for the following periods and at the following
rates:
<TABLE>
<CAPTION>
Principal Maturity Competitive
Amount(2) Date(3) Bid Rate(4)
- --------- ------- -----------
<S> <C> <C>
$
</TABLE>
- ------------------------------
(1) As specified in the related Request for Competitive Bid Offer.
(2) Principal amount bid for each maturity date may not exceed the
principal amount requested. Bids must be made for at least
$10,000,000 or an integral multiple of $1,000,000 in excess thereof.
(3) At least 15 and up to 360 days, as specified in the related Request
for Competitive Bid Offer.
(4) Specify rate of interest per annum (rounded to the nearest 1/10,000
of 1%).
Exhibit O - 1
<PAGE> 187
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in that certain Amended
and Restated Credit Facility Agreement dated as of December 18, 1997 by and
among Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), irrevocably obligates us to make the Competitive Bid
Advance(s) for which any offer(s) are accepted, in whole or in part.
Capitalized terms used herein and not otherwise defined herein shall have their
meanings as defined in the Credit Agreement.
Very truly yours,
[NAME OF BANK]
Dated: , By:
-------------- ----- ----------------------------
Authorized Officer
Exhibit O - 2
<PAGE> 188
Exhibit P
Bid Acceptance
___________________, _____
To: [Name of Lender]
Re: Primary Credit Facility - Request for Competitive Bid Offer from
Pioneer Natural Resources Company (the "Borrower")
Pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (the "Credit Agreement"), we accept your
Competitive Bid Offer for the following proposed Competitive Bid Advance(s) and
reject any Competitive Bid Offer to the Competitive Bid Borrower not described
below:
Borrowing Date: ______________, ______
<TABLE>
<CAPTION>
Principal Amount Maturity Date Competitive Bid Rate
- ---------------- ------------- --------------------
<S> <C> <C>
$
</TABLE>
Capitalized terms used herein have the meanings assigned to them in the
Credit Agreement.
PIONEER NATURAL RESOURCES COMPANY
By:
------------------------------
Authorized Officer
Exhibit P - 1
<PAGE> 189
Schedule 1
Schedule of Lenders' Commitments and Percentage Share
Schedule 1 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 1 - 1
<PAGE> 190
Schedule 2
Disclosure Schedule
Schedule 2 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 2 - 1
<PAGE> 191
Schedule 3
Schedule of Restricted Subsidiaries
Schedule 3 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 3 - 1
<PAGE> 192
Schedule 4
Schedule of Insurance
Schedule 4 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 4 - 1
<PAGE> 193
Schedule 5
Schedule of Security Instruments
Schedule 5 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 5 - 1
<PAGE> 194
Schedule 6
Continuing Letters of Credit
Schedule 6 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 6 - 1
<PAGE> 1
EXHIBIT 10.2
[364 DAY CREDIT FACILITY]
================================================================================
AMENDED AND RESTATED CREDIT FACILITY AGREEMENT
PIONEER NATURAL RESOURCES COMPANY,
as BORROWER,
and
NATIONSBANK OF TEXAS, N.A.,
as ADMINISTRATIVE AGENT,
and
CIBC INC.,
as DOCUMENTATION AGENT,
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as DOCUMENTATION AGENT,
and
THE CHASE MANHATTAN BANK,
as SYNDICATION AGENT,
THE CO-AGENTS SIGNATORY HERETO,
and
THE OTHER LENDERS SIGNATORY HERETO
as of December 18, 1997 $300,000,000
================================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
<TABLE>
<CAPTION>
<S> <C>
ARTICLE 1 DEFINITIONS AND REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1.3 Amendment of Defined Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1.4 References and Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1.5 Calculations and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 2 LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.1 Making the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.2 Requests for Revolving Loan Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.3 Rate Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.4 Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.5 Procedure for Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.6 Special Provisions for Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.7 Facility Fee; Amendment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.8 Managing Agents' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.9 Termination and Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.10 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.11 Payments to Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.12 Extension of Maturity Date and of Commitments . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.13 [Intentionally Omitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.14 [Intentionally Omitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.15 [Intentionally Omitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.16 Capital Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.17 Increased Cost of Eurodollar Portions . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.18 Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.19 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.20 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.21 Make-Whole Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.22 Competitive Bid Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 3 CONDITIONS PRECEDENT TO LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 3.1 Initial Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 3.2 Additional Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE 4 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.1 Borrower's Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.2 Representation by Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
</TABLE>
i
<PAGE> 3
TABLE OF CONTENTS
(Continued)
<TABLE>
<CAPTION>
<S> <C>
ARTICLE 5 COVENANTS OF BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 5.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 5.2 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.3 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE 6 EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.3 Annulment of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.4 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE 7 AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.1 Appointment and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.2 Agent's Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.3 Lenders' Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.5 Rights as Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 7.6 Sharing of Set-Offs and Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 7.7 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.8 Benefit of Article 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.9 Resignation and Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE 8 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 8.1 Waivers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 8.2 Survival of Agreements; Cumulative Nature . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 8.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 8.4 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.6 Limitation on Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.7 Termination; Limited Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 8.8 Assignments; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 8.9 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 8.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 8.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 8.12 Waiver of Jury Trial, Punitive Damages . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 8.13 Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 8.14 Nonliability of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 8.15 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 8.16 Release of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 8.17 Forum Selection and Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.18 Assumption of Prior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.19 Renewal, Extension or Rearrangement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 8.20 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
</TABLE>
ii
<PAGE> 4
EXHIBITS AND SCHEDULES
Exhibits:
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit A-1 - Form of Loan Note
Exhibit A-2 - Form of Swing Line Note
Exhibit A-3 - Form of Competitive Bid Note
Exhibit B - Form of Guaranty
Exhibit C - Form of Request for Advance
Exhibit D - Form of Rate Election
Exhibit E - Form of Request for Swing Line Advance
Exhibit F - Form of Swing Line Participation Certificate
Exhibit G - [Intentionally omitted]
Exhibit H - Forms of Opinion of Borrower's and Restricted Subsidiaries' Counsel
Exhibit I - Organization Chart of Borrower and its Subsidiaries
Exhibit J - Form of Designated Officer's Certificate
Exhibit K-1 - Form of Election to Convert
Exhibit K-2 - Form of Release
Exhibit L - Form of Agreement to be Bound
Exhibit M - Form of Pledge Agreement
Exhibit N - Form of Request for Competitive Bid Offer
Exhibit O - Form of Competitive Bid Offer
Exhibit P - Form of Bid Acceptance
Exhibit Q - Form of Certificate of Extension
Schedules:
Schedule 1 - Schedule of Lenders' Commitments and Percentage Share
Schedule 2 - Disclosure Schedule
Schedule 3 - Schedule of Restricted Subsidiaries
Schedule 4 - Schedule of Insurance
Schedule 5 - Schedule of Security Instruments
</TABLE>
iii
<PAGE> 5
AMENDED AND RESTATED CREDIT FACILITY AGREEMENT
THIS AMENDED AND RESTATED CREDIT FACILITY AGREEMENT is made as of
December 18, 1997 (together with all amendments, renewals, extensions and other
modifications, if any, from time to time hereafter made hereto, the "Agreement"
or "Credit Facility Agreement"), by and among PIONEER NATURAL RESOURCES
COMPANY, a Delaware corporation (the "Borrower"), and NATIONSBANK OF TEXAS,
N.A., CIBC INC., MORGAN GUARANTY TRUST COMPANY OF NEW YORK, THE CHASE MANHATTAN
BANK, in the capacities herein identified, the Co-Agents party hereto, and the
other Lenders from time to time parties hereto.
RECITALS:
A. Reference is here made to that certain Credit Facility
Agreement - 364 Day Credit Facility, dated as of August 7, 1997, by and among
Pioneer USA, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Existing Credit Agreement") and the notes issued thereunder.
B. Borrower has assumed effective as of the Effective Date (as
hereinafter defined) and hereby assumes, and Pioneer USA has assigned and
hereby assigns to Borrower, all of the indebtedness, obligations and
liabilities of Pioneer USA, evidenced by and outstanding under the Existing
Credit Agreement and all related instruments and documents (all such
indebtedness, obligations and liabilities under the Existing Credit Agreement
and/or such instruments and documents collectively, the "Prior Indebtedness").
C. Borrower has determined that it is in its best interests to
assume the Prior Indebtedness and has voluntarily requested that Lenders, and
Lenders have agreed to, restructure, rearrange and renew the Prior Indebtedness
and the respective commitments of the Lenders and Agents party to the Existing
Credit Agreement into obligations and commitments hereunder.
D. As a part of the restructuring and rearranging of the Prior
Indebtedness, Lenders shall modify their respective commitments under the
Credit Agreement such that on the Effective Date each Lender shall be obligated
hereunder, subject to the terms hereof, to the Loan Commitment stated on
Schedule 1 for such Lender.
E. Any Loans outstanding under the Existing Credit Agreement on
the Effective Date bearing interest at a Eurodollar Rate shall be deemed
continued as a Loan under this Agreement at such Eurodollar Rate and for the
Eurodollar Interest Period with respect thereto under the Existing Credit
Agreement.
<PAGE> 6
F. Any Competitive Bid Advances outstanding under the Existing
Credit Agreement on the Effective Date shall be deemed continued as a
Competitive Bid Advance under this Agreement at the rate and for the term with
respect thereto under the Existing Credit Agreement.
G. Lenders and Borrower intend and have agreed to amend and
restate the Existing Credit Agreement in its entirety as and pursuant to this
Agreement.
NOW, THEREFORE, in consideration of the Recitals hereof and the mutual
covenants contained herein, the parties hereby agree to amend and restate the
Existing Credit Agreement in its entirety as follows:
ARTICLE 1
DEFINITIONS AND REFERENCES
Section 1.1 Defined Terms. As used in this Agreement, each of
the following terms has the meaning given it in this Section or in the sections
and subsections referred to below:
"Accepting Lenders" is defined in Section 2.12(c).
"Acquisition Agreement" has the meaning given it in Section 3.1(e).
"Acquisition" has the meaning given it in Section 3.1(e).
"Adjusted Eurodollar Rate" means, with respect to each particular
Eurodollar Portion and the associated Eurodollar Rate and Reserve Percentage,
the rate per annum determined hereunder by Administrative Agent on a daily
basis pursuant to the following formula:
<TABLE>
<S> <C>
AER = ER + EM
----------
1.00 - RP
AER = Adjusted Eurodollar Rate
ER = Eurodollar Rate
RP = Reserve Percentage
EM = Eurodollar Margin
</TABLE>
The Adjusted Eurodollar Rate shall change as and when the associated Reserve
Percentage and Eurodollar Margin change.
"Administrative Agent" means NationsBank of Texas, N.A., as
Administrative Agent hereunder and its successors and assigns in such capacity.
"Advance" means any Revolving Loan Advance, Competitive Bid Advance or Swing
Line Advance.
2
<PAGE> 7
"Affiliate" means, as to any Person, each other Person that directly
or indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person.
"Agent" means any of the Managing Agents or the Collateral Agent
hereunder, solely in such capacities and not in their respective capacities as
Lenders.
"Agreement" means this Amended and Restated Credit Facility Agreement,
as this Amended and Restated Credit Facility Agreement may be amended, modified
or restated from time to time hereafter.
"Agreement to be Bound" means an agreement to be bound entered into by
a Lender and an assignee (with the consent of any party whose consent is
required by Section 8.8), and accepted by the Administrative Agent, in
substantially the form of Exhibit L or any other form approved by the
Administrative Agent.
"Amendment Fee Rate" means 2.5 basis points.
"Applicable Rating Level" means the level set forth below that
corresponds to the highest of ratings issued from time to time by Moody's and
S&P, as applicable to Borrower's senior unsecured long-term debt:
<TABLE>
<S> <C> <C>
Moody's S&P
------- ---
Level I >Baa1 >BBB+
Level II Baa1 BBB+
Level III Baa2 BBB
Level IV Baa3 BBB-
Level V <Baa3 <BBB-
</TABLE>
For example, if the Moody's rating is Baa1 and the S&P rating is BBB, Level II
shall apply.
For purposes of the foregoing, (i) ">" means a rating more favorable
than; "<" means a rating less favorable than; (ii) if ratings for Borrower's
senior unsecured long-term debt shall not be available from S&P or Moody's,
Level V shall be deemed applicable; (iii) if any of the Rating Agencies shall
change its ratings nomenclature prior to the date all Obligations have been
paid and the Commitments canceled, Borrower and the Lenders shall negotiate in
good faith to amend the references to specific ratings in this definition to
reflect such change, and pending such amendment, if an appropriate Applicable
Rating Level is otherwise not determinable based upon the foregoing grid, the
last Applicable Rating Level in effect at the time of such change shall
continue to apply.
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<PAGE> 8
"Base Rate" means the fluctuating per annum rate of interest from time
to time in effect equal to the higher of (a) the rate of interest as publicly
announced by Administrative Agent as its "Prime Rate" or (b) the Federal Funds
Rate plus one-half of one percent ( 1/2 of 1%), whether or not Borrower has
notice thereof. Such rate is set by Administrative Agent as a general rate of
interest, taking into account such factors as Administrative Agent may deem
appropriate, it being understood that many of 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
Administrative Agent may make various commercial or other loans at rates of
interest having no relationship to such rate. If Administrative Agent's Prime
Rate or the Federal Funds Rate changes after the date hereof, the Base Rate
shall be automatically increased or decreased, as the case may be, without
prior notice to Borrower from time to time as of the effective time of each
change in Administrative Agent's Prime Rate or the Federal Funds Rate. The
Administrative Agent shall promptly thereafter notify Borrower of such change
in the Base Rate.
"Base Rate Portion" means that portion of the unpaid principal balance
of a Loan which is not made up of Eurodollar Portions, Swing Line Advances or
Competitive Bid Advances.
"Bid Acceptance" means a Bid Acceptance substantially in the form of
Exhibit P hereto with appropriate insertions.
"Borrower" is defined in the Preamble hereto.
"Business Day" means a day on which commercial banks are open for
business with the public in the State of Texas. Any Business Day in any way
relating to Eurodollar Portions (such as the day on which a Eurodollar Interest
Period begins or ends) must also be a day on which, in the reasonable, good
faith judgment of Administrative Agent, significant transactions in dollars are
carried out in the interbank eurocurrency market.
"Canadian Credit Facility" means that certain Credit Facility
Agreement, dated as of December 18, 1997, among Chauvco, as Borrower, Canadian
Imperial Bank of Commerce, as Arranger and Administrative Agent, Bank of Nova
Scotia, as Co-Syndication Agent, Royal Bank of Canada, as Co-Syndication Agent,
The Chase Manhattan Bank of Canada, as Co-Agent, Morgan Guaranty Trust Company
of New York, as Co-Agent, NationsBank of Texas, N.A., as Co-Agent, The
Toronto-Dominion Bank, as Co-Agent, and the Lenders party thereto, as such
agreement may be amended, modified or restated from time to time.
"Certificate of Extension" means a certificate of Borrower, executed
by a Designated Officer and delivered to the Administrative Agent, in
substantially the form of Exhibit Q, which requests an extension of the then
scheduled Maturity Date pursuant to Section 2.12.
"Chauvco" means Chauvco Resources Ltd., a corporation organized under
the laws of the Province of Alberta, Canada.
"Co-Agent" means each of Bank of America National Trust and Savings
Association, The Bank of New York, The Bank of Nova Scotia, Royal Bank of
Canada, Union Bank of California,
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<PAGE> 9
N.A., The Fuji Bank, Limited - Houston Agency, and Wells Fargo Bank, N.A., as
Co-Agents, and their respective successors and assigns in such capacity.
"Collateral Agent" means NationsBank of Texas, N.A., as collateral
agent under the Security Instruments and its successors and assigns in such
capacity.
"Commitment" means, with respect to each Lender, such Lender's Loan
Commitment.
"Competitive Bid Advances" has the meaning given it in Section 2.22.
"Competitive Bid Note" has the meaning given it in Section 2.22.
"Competitive Bid Obligations" means, at the particular time in
question, the sum of all outstanding Competitive Bid Advances.
"Competitive Bid Offer" has the meaning given it in Section 2.22.
"Competitive Bid Rate" has the meaning given it in Section 2.22.
"Consolidated" refers to the consolidation of any Person, in
accordance with GAAP, with its properly consolidated Subsidiaries. References
herein to a Person's Consolidated financial statements, financial position,
financial condition, or liabilities refer to the consolidated financial
statements, financial position, financial condition or liabilities, as the case
may be, of such Person and its properly consolidated Subsidiaries.
"Consolidated Interest Expense" is defined in Section 5.3(a).
"Credit Facility Agreement" means this Amended and Restated Credit
Facility Agreement, as this Amended and Restated Credit Facility Agreement may
be amended, modified or restated from time to time hereafter.
"Debt" of any Person means, without duplication:
(a) indebtedness of such Person for borrowed money;
(b) indebtedness of such Person constituting an obligation to pay
the deferred purchase price of property or services (other
than customary payment terms taken in the ordinary course of
such Person's business);
(c) indebtedness of such Person evidenced by a bond, debenture,
note or similar instrument;
(d) principal obligations under leases capitalized in accordance
with GAAP under which such Person is the lessee;
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<PAGE> 10
(e) indebtedness, contingent or otherwise, of such Person with
respect to bankers' acceptances or the face amount of letters
of credit or applications or reimbursement agreements
therefor;
(f) guaranties of such Person of indebtedness or obligations of
the type described in clauses (a), (b), (c), (d) or (e) above
of any other Person or obligations to purchase or acquire or
to otherwise protect or insure a creditor against loss in
respect of indebtedness or obligations of the type described
in clauses (a), (b), (c), (d) or (e) above of any other
Person, but excluding endorsements in the ordinary course of
business of negotiable instruments in the course of
collection;
(g) indebtedness or obligations of the type described in clauses
(a), (b), (c), (d) or (e) above, which are secured by a Lien
on any property owned by such Person, whether or not such
indebtedness or obligations have been assumed by such Person
(limited however to the lesser of (1) the amount of its
liability or (2) the value of such property); and
(h) the undischarged balance of any production payment created by
such Person or for the creation of which such Person directly
or indirectly received payment;
provided, however, Debt shall not include (1) accounts payable incurred in the
ordinary course of such Person's business, or (2) any obligations in respect of
(i) exchange, forward, future, swap, hedging or similar agreements and (ii)
prepayments for gas or oil production or gas or oil imbalances.
"Declining Lenders" is defined in Section 2.12(c).
"Default" means any Event of Default and any default, event or
condition which would, with the giving of any requisite notices and the passage
of any requisite periods of time, constitute an Event of Default.
"Default Rate" means, at the particular time in question, two percent
(2%) per annum plus the Base Rate then in effect; provided, that, with respect
to any Eurodollar Portion with an Eurodollar Interest Period extending beyond
the date such Eurodollar Portion becomes due and payable, "Default Rate" shall
mean, during such Eurodollar Interest Period, two percent (2%) per annum plus
the related Eurodollar Rate and plus the applicable Eurodollar Margin.
"Designated Entity" means Borrower and each of the Restricted
Subsidiaries.
"Designated Officer" means any Executive Officer or any other
individual duly elected to and holding one or more of the offices of vice
president, managing director, executive director, secretary or assistant
secretary of a Designated Entity, or any other Person authorized in writing by
any Designated Entity to execute any Loan Document, in each case designated by
a Designated Entity and acceptable to Required Lenders.
6
<PAGE> 11
"Disclosure Schedule" means (a) Schedule 2 hereto and (b) any
documents listed on such schedule and expressly incorporated therein by
reference, true and correct copies of which shall have been delivered to
Managing Agents and each other Lender prior to the date hereof. Insofar as any
representations and warranties made herein are incorporated by reference or
otherwise remade in Loan Documents delivered as of a date after the date
hereof, the term "Disclosure Schedule" shall in such representations and
warranties be deemed to refer as well to all other documents indicated by
Borrower to be part of the Disclosure Schedule and which Borrower has at the
particular time in question delivered to the Managing Agents, the Co-Agents and
each other Lender and which have not been promptly objected to in writing by or
on behalf of the Required Lenders.
"Documentation Agent" means each of CIBC Inc. and Morgan Guaranty
Trust Company of New York, as Documentation Agents, and their respective
successors and assigns in such capacity.
"EBITDAX" is defined in Section 5.3(a).
"Effective Date" means the date the parties hereto shall have executed
and delivered counterparts hereof to Administrative Agent and Administrative
Agent shall have notified the parties hereto that the Effective Date shall have
occurred.
"Environmental Law" means any federal, state, or local statute, or
rule or regulation promulgated thereunder, any judicial or administrative order
or judgment to which Borrower, or any of its Subsidiaries is a party or which
are applicable to Borrower or any of its Subsidiaries or its or their
respective properties (whether or not by consent), and any provision or
condition of any permit, license or other governmental operating authorization,
relating to protection of the environment, persons or the public welfare from
actual or potential exposure or the effects of exposure to any actual or
potential release, discharge, spill or emission (whether past or present) of,
or regarding the manufacture, processing, production, gathering,
transportation, importation, use, treatment, storage or disposal of, any
chemical, raw material, pollutant, contaminant or toxic or hazardous substance
or waste.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.
"ERISA Plan" means any pension benefit plan subject to Title IV of
ERISA maintained by any Designated Entity or any Affiliate thereof with respect
to which any Designated Entity has a fixed or contingent liability.
"Eurodollar Interest Period" means, with respect to each particular
Eurodollar Portion, a period of one (1), two (2), three (3) or six (6) months,
or, subject to Section 2.3, a period of nine (9) or twelve (12) months, as
specified in the Rate Election applicable thereto, beginning on and including
the date specified in such Rate Election (which must be a Business Day), and
ending on but not including the same day of the relevant month as the day on
which it began (e.g., a period beginning on the third day of one month shall
end on but not include the third day of another month), or if such month has no
numerically corresponding day, on the last Business Day of such month, and
provided that each Eurodollar Interest Period which would otherwise end on a
day
7
<PAGE> 12
which is not a Business Day shall end on the next succeeding Business Day
(unless such next succeeding Business Day is the first Business Day of a
calendar month, in which case such Eurodollar Interest Period shall end on the
immediately preceding Business Day). No Eurodollar Interest Period may be
elected for any Eurodollar Portion which would extend past the Maturity Date of
the Loan of which the Eurodollar Portion is a part.
"Eurodollar Margin" means, on any date, with respect to each
Eurodollar Portion of a Revolving Loan, the number of basis points per annum
set forth below based on the Applicable Rating Level on such date:
<TABLE>
<S> <C>
Applicable Eurodollar
Rating Level Margin
------------ ------
Level I 20.0 b.p.
Level II 22.0 b.p.
Level III 25.0 b.p.
Level IV 30.0 b.p.
Level V 47.0 b.p.
</TABLE>
Changes in the Eurodollar Margin will occur automatically without prior notice.
Administrative Agent will give notice promptly to Borrower and the Lenders of
changes in the Eurodollar Margin.
"Eurodollar Portion" means the unpaid principal balance of a Loan
which Borrower designates as such in a Rate Election.
"Eurodollar Rate" means, with respect to each particular Eurodollar
Portion within a Tranche and with respect to the related Eurodollar Interest
Period, the rate of interest per annum (stated to the nearest 10,000ths of 1%)
determined by Administrative Agent in accordance with its customary general
practices to be representative of the rates (stated to the nearest 10,000ths of
1%) at which deposits of dollars are offered to Administrative Agent at
approximately 10:00 a.m., Dallas, Texas time, two Business Days prior to the
first day of such Eurodollar Interest Period by prime banks in the interbank
eurocurrency market which have been selected by Administrative Agent in
accordance with its customary general practices for delivery on the first day
of such Eurodollar Interest Period in an amount equal or comparable to the
amount of Administrative Agent's Eurodollar Portion within such Tranche and for
a period of time equal or comparable to the length of such Eurodollar Interest
Period. The Eurodollar Rate determined by Administrative Agent with respect to
a particular Eurodollar Portion shall be fixed at such rate for the duration of
the associated Eurodollar Interest Period. If Administrative Agent is unable
so to determine the Eurodollar Rate for any Eurodollar Portion, Borrower shall
be deemed not to have elected such Eurodollar Portion.
8
<PAGE> 13
"Eurodollars" is defined in Section 2.18.
"Event of Default" has the meaning given it in Section 6.1.
"Exchangeable Shares" has the meaning set forth in the Proxy.
"Executive Officer" means any individual duly elected to and holding
one or more of the following offices of Borrower: President, Chief Executive
Officer, Chief Financial Officer, Executive Vice President or Senior Vice
President.
"Existing Credit Agreement" has the meaning given it in Recital A.
"Facility Amount" means the aggregate amount of the Commitments (which
amount shall initially be $300,000,000), as such amount may be reduced from
time to time pursuant to the terms of this Agreement.
"Facility Fee Rate" means, on any date that a facility fee is due
pursuant to Section 2.7, the number of basis points per annum set forth below
based on the Applicable Rating Level on such date:
<TABLE>
<S> <C>
Applicable Facility Fee Rate
Rating Level Margin
------------ ------
Level I 7.0 b.p.
Level II 8.0 b.p.
Level III 10.0 b.p.
Level IV 12.0 b.p.
Level V 18.0 b.p.
</TABLE>
Changes in the Facility Fee Rate will occur automatically without prior notice.
Administrative Agent will give notice promptly to Borrower and the Lenders of
changes in the Facility Fee Rate.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day, as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to
Administrative Agent on such day on such transactions as determined by
Administrative Agent.
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<PAGE> 14
"Fiscal Quarter" means a three-month period ending on March 31, June
30, September 30 or December 31 of each year.
"Fiscal Year" means a twelve-month period ending on December 31 of
each year.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary of the
Borrower organized under the laws of any jurisdiction other than the United
States or any state thereof.
"GAAP" means those generally accepted accounting principles and
practices which are recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor) and which, in the case of
Borrower and its Consolidated Subsidiaries, are applied for all periods after
the date hereof in a manner consistent with the manner in which such principles
and practices were applied to the Updated Financial Statements (except for
changes concurred with by Borrower's independent public accountants). If any
change in any accounting principle or practice is required by the Financial
Accounting Standards Board (or any such successor) in order for such principle
or practice to continue as a generally accepted accounting principle or
practice, all reports and financial statements required hereunder with respect
to Borrower or with respect to Borrower and its Consolidated Subsidiaries must
be prepared in accordance with such change. In the event any changes in GAAP
materially affect the calculation of Borrower's EBITDAX to Consolidated
Interest Expense Ratio or Consolidated Total Funded Debt to Total
Capitalization as defined and described in Sections 5.3 (a) and (b),
respectively, Borrower and Lenders agree to enter into good faith negotiations
for an agreement to revise such tests to take into account such changes in
GAAP; until Borrower and Majority Lenders have entered into such an agreement,
such financial calculation shall continue to be made in accordance with GAAP as
in effect immediately preceding the date of such change.
"Governmental Authority" means any national, state, county or
municipal government, domestic or foreign, any agency, board, bureau,
commission, court, department or other instrumentality of any such government,
or any arbitrator in any case which has jurisdiction over any of the Lenders,
Borrower, its Subsidiaries or any properties of Borrower or its Subsidiaries.
"Guaranty" means (i) any guaranty substantially in the form of Exhibit
B, with appropriate insertions and deletions, executed or to be executed by any
Restricted Subsidiary, as from time to time amended, modified, or supplemented,
or (ii) any Guaranty delivered pursuant to Section 3.1(a)(1) of the Agreement
as from time to time amended, modified, or supplemented, as the case may be.
"Incumbent Directors" has the meaning given in Section 6.1(i).
"Lenders" means each party hereto (other than Borrower), including,
without limitation, NationsBank of Texas, N.A. in its capacity as a Lender
hereunder rather than as Administrative Agent or Collateral Agent, CIBC Inc. in
its capacity as a Lender hereunder rather than as Documentation Agent, Morgan
Guaranty Trust Company of New York in its capacity as a Lender hereunder rather
than as Documentation Agent, The Chase Manhattan Bank in its capacity as a
10
<PAGE> 15
Lender hereunder rather than as Syndication Agent, the Co-Agents in their
capacity as Lenders hereunder rather than as Co-Agents, and the successors and
assigns of each as holder of a Note.
"Lien" means, any lien, mortgage, security interest, pledge, deposit,
production payment, encumbrance, rights of a vendor under any title retention
or conditional sale agreement or lease or other arrangement substantially
equivalent thereto.
"Loan" means any of a Revolving Loan, Competitive Bid Advance or Swing
Line Advance, as the context requires.
"Loan Commitment" means, with respect to each Lender, the amount set
forth as such Lender's Loan Commitment opposite the name of such Lender in the
column headed "New Commitment" or otherwise indicated on Schedule 1 attached
hereto (or, if such Lender is an assignee, the amount of its Loan Commitment
set forth in the assignment pursuant to which it became a Lender) as such
amount may be reduced or increased from time to time pursuant to any assignment
to which it is a party or otherwise pursuant to the terms of this Agreement.
"Loan Commitment Period" means the period from and including the date
hereof until and including the Maturity Date (or, if earlier, the day on which
the Loan Notes first become due and payable in full or the Loan Commitments are
terminated upon notice by Administrative Agent to Borrower pursuant to Section
6.1).
"Loan Documents" means this Credit Facility Agreement, as the same may
have been or may be amended from time to time hereafter, the Notes, the Swing
Line Participation Certificate, the Guaranties, the Disclosure Schedule, the
Security Instruments, the agreements with the Managing Agents referred to in
Section 2.8, any amendments to any of the foregoing, and all other agreements,
certificates, notices and disclosures at any time executed or certified by a
Designated Officer of and on behalf of a Designated Entity and delivered by
such Designated Entity or such Designated Officer in connection herewith or
therewith (exclusive of term sheets, commitment letters, correspondence and
similar documents used in the negotiation hereof or thereof).
"Loan Note" has the meaning given it in Section 2.1(c).
"Majority Lenders" means Lenders whose aggregate Percentage Shares
exceed 50%.
"Managing Agents" means Administrative Agent, each Documentation Agent
and the Syndication Agent hereunder and their successors and assigns in such
capacities.
"Margin Regulations" means, as applicable, Regulations G, U and X of
the Board of Governors of the Federal Reserve System, as from time to time in
effect.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the financial condition of Borrower and its Subsidiaries taken as a whole, (b)
the ability of Borrower and its Subsidiaries taken as a whole to operate their
respective businesses, (c) the ability of Borrower to meet its obligations
under the Loan Documents on a timely basis or (d) the ability of Designated
11
<PAGE> 16
Entities taken as a whole to meet their obligations under the Loan Documents on
a timely basis; provided, however, that a material adverse effect that is
limited to an Unrestricted Subsidiary shall not (i) be a Material Adverse
Effect or (ii) be included in the determination of whether a Material Adverse
Effect shall have occurred or shall be expected to occur.
"Maturity Date" means the Original Maturity Date, or such other later
date as may result from any extension requested by Borrower and consented to by
the Lenders pursuant to Section 2.12.
"Maximum Lawful Rate" has the meaning given it in Section 8.6.
"Mesa" means Mesa, Inc., a Delaware corporation.
"Moody's" means Moody's Investors Service, Inc. and any successor
thereto that is a nationally-recognized rating agency.
"Section 956" has the meaning given it in Section 6.1(k).
"Note" means any Loan Note, Swing Line Note or Competitive Bid Note.
"Notice Period" has the meaning given it in Section 6.4.
"Obligations" means all Debt from time to time owing by any of
Designated Entities to any Agent or any Lender under or pursuant to any of the
Loan Documents, including, without limitation, all Swing Line Obligations and
Competitive Bid Obligations. "Obligation" means any part of the Obligations.
"Original Maturity Date" means the earlier of (a) August 5, 1998 and
(b) the date on which the Loan Commitment of each Lender is reduced to zero or
terminated.
"Outside Debt" means (i) Pioneer USA's $150,000,000 8 7/8% Senior
Notes due 2005 which obligations thereunder will be transferred to Borrower
pursuant to the Restructuring, (ii) Pioneer USA's $150,000,000 8 1/4% Senior
Notes due 2007 which obligations thereunder will be transferred to Borrower
pursuant to the Restructuring, (iii) Mesa's 10 5/8% Senior Subordinated Notes
due 2006 which obligations thereunder will be transferred to Borrower pursuant
to the Restructuring, and (iv) Mesa's 11 5/8% Senior Subordinated Discount
Notes due 2006 which obligations thereunder will be transferred to Borrower
pursuant to the Restructuring.
"P&P Petroleum" means Parker & Parsley Petroleum Company, a Delaware
corporation.
"Percentage Share" means, with respect to any Lender (a) when used in
Section 2.1 or 2.3, in any Request for Advance or when no Loans (other than
Swing Line Advances or Competitive Bid Advances, if applicable) are outstanding
hereunder, the percentage set forth opposite such Lender's name on Schedule 1
to this Agreement, or in documents of assignment delivered pursuant to Section
8.8, as such percentage may be adjusted from time to time by such assignment
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<PAGE> 17
documents and (b) when used otherwise, the percentage equal to the unpaid
principal balance of such Lender's Loans, other than Swing Line Advances and
Competitive Bid Advances, at the particular time in question divided by the
aggregate unpaid principal balance of all Loans of all Lenders, other than
Swing Line Advances and Competitive Bid Advances, at such time.
"Permitted Liens" means (a) Liens for taxes, assessments or other
governmental charges or levies if the same shall not at the particular time in
question be due and delinquent or (if foreclosure, distraint, sale or other
similar proceedings shall not have been commenced or, if commenced, shall have
been stayed) are being contested in good faith and by appropriate proceedings,
and if the subject Borrower shall have set aside on its books such reserves
(segregated to the extent required by sound accounting practices) as may be
required by GAAP or otherwise determined by the Board of Directors of Borrower
to be adequate with respect thereto; (b) Liens of carriers, warehousemen,
mechanics, laborers, materialmen, landlords, vendors, workmen, and operators
arising in the ordinary course of business or incident to the exploration,
development, operations and maintenance of oil, gas and other hydrocarbon
properties and related facilities and assets, for sums not yet due or being
contested in good faith and by appropriate proceedings, if Borrower shall have
set aside on its books such reserves (segregated to the extent required by
sound accounting practices) as may be required by GAAP or otherwise determined
by the Board of Directors of Borrower to be adequate with respect thereto; (c)
Liens incurred in the ordinary course of Designated Entities' respective
businesses in connection with worker's compensation, unemployment insurance and
other social security legislation (other than ERISA); (d) Liens incurred in the
ordinary course of Designated Entities' businesses to secure the performance of
bids, tenders, trade contracts, leases (statutory only), statutory obligations,
surety and appeal bonds, performance and return-of-money bonds and other
obligations of a like nature; (e) Liens, easements, rights-of-way restrictions,
servitudes, permits, conditions, covenants, exceptions, reservations and other
similar encumbrances incurred in the ordinary course of Designated Entities'
businesses or existing on property and not in the aggregate materially
interfering with the ordinary conduct of Designated Entities' businesses; (f)
legal or equitable encumbrances deemed to exist by reason of negative pledges
such as in Section 5.2 of this Agreement or the existence of any litigation or
other legal proceeding and any related lis pendens filing (excluding any
attachment prior to judgment, judgment lien or attachment lien in aid of
execution on a judgment); (g) rights of a common owner of any interest in
property held by any Designated Entity as such common owner; (h) farmout,
carried working interest, joint operating, unitization, royalty, overriding
royalty, sales and similar agreements relating to the exploration or
development of, or production from, oil and gas properties incurred in the
ordinary course of business, (i) Liens arising pursuant to Section 9.319 of the
Texas Uniform Commercial Code or other similar statutory provisions of other
states with respect to production purchased from others; (j) Liens represented
by capital leases permitted under this Agreement; (k) any defects,
irregularities, or deficiencies in title to easements, rights-of-way or other
properties which do not in the aggregate have a Material Adverse Effect; (l)
Liens existing pursuant to the Security Instruments; (m) Liens existing in
favor of Agents and Lenders under the Loan Documents; (n) Liens on assets of a
Subsidiary of Borrower in favor of Borrower or another Restricted Subsidiary;
(o) Liens on any property or assets owned or leased by Borrower or any
Subsidiary existing at the time such property or asset was acquired (or at the
time such Person became a Subsidiary); provided that (1) in the case of the
acquisition of a Subsidiary, such lien only encumbers property or assets of
such Subsidiary immediately prior to or at the time of
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acquisition by Borrower of such Subsidiary and (2) Borrower will use its best
efforts to eliminate such Liens in a timely manner; (p) purchase money Liens,
so long as such Liens only encumber property or assets (including any
improvements thereon, accessions thereto or proceeds thereof) acquired with the
proceeds of purchase money indebtedness incurred in connection with such Lien;
(q) Liens on the stock or other ownership interest of or in any Unrestricted
Subsidiary; (r) Liens in renewal or extension of any of the foregoing permitted
Liens, so long as limited to the property or assets encumbered and the amount
of indebtedness secured immediately prior to such renewal or extension; and (s)
Liens approved in writing by or on behalf of the Required Lenders.
"Person" means an individual, corporation, company, partnership,
association, joint stock company, trust or trustee thereof, estate or executor
thereof, unincorporated organization or joint venture, court or governmental
unit or any agency or subdivision thereof, or any other legally recognizable
entity.
"Pioneer Canada" means Pioneer Natural Resources (Canada) Ltd., a
corporation organized under the laws of the Province of Alberta, Canada.
"Pioneer USA" means Pioneer Natural Resources USA, Inc., a Delaware
corporation.
"Pledge Agreement" means a Pledge Agreement substantially in the form
of Exhibit M hereto, or other form of pledge agreement or deed of mortgage, in
form and substance satisfactory to the Managing Agents and the subject
Designated Entity, pledging an interest in the capital shares or stock of,
partnership interests in, or other ownership interest in, a Restricted
Subsidiary as from time to time amended, modified and supplemented.
"Primary Credit Facility" means that certain Amended and Restated
Credit Facility Agreement, dated as of December 18, 1997, among Pioneer Natural
Resources Company, as Borrower, NationsBank of Texas, N.A., as Administrative
Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New
York, as Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders party thereto, as such agreement
may be amended, modified or restated from time to time.
"Prior Indebtedness" has the meaning given it in Recital B.
"Proxy" has the meaning given it in Section 4.1(f)(ii).
"Rate Election" has the meaning given it in Section 2.3.
"Rating Agencies" means any or all of S&P or Moody's.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as from time to time in effect.
"Replacement Lenders" is defined in Section 2.12(c)(ii).
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"Request for Advance" means a written or telephonic request, or a
written confirmation, made by a Borrower which meets the requirements of
Section 2.2.
"Request for Competitive Bid Offer" has the meaning given it in
Section 2.22.
"Request for Swing Line Bid" has the meaning given it in Section
2.5(a).
"Required Lenders" means Lenders whose aggregate Percentage Shares exceed
66 2/3%.
"Reserve Percentage" means, on any day with respect to each particular
Eurodollar Portion in a Tranche, the maximum reserve requirement, as determined
by Administrative Agent (including without limitation any basic, supplemental,
marginal, emergency or similar reserves), expressed as a percentage and rounded
to the nearest 1/100th of 1%, which would then apply to Administrative Agent
under Regulation D or successor regulations issued from time to time by the
Board of Governors of the Federal Reserve System with respect to "Eurocurrency
liabilities" (as such term is defined in Regulation D) equal in amount to
Administrative Agent's Eurodollar Portion in such Tranche, were Administrative
Agent to have any such Eurocurrency liabilities. If such reserve requirement
shall change after the date hereof, the Reserve Percentage shall be
automatically increased or decreased, as the case may be, from time to time as
of the effective time of each such change in such reserve requirement.
"Restricted Payment" means any investment, contribution, loan or
advance of cash to a Person (other than (i) Borrower or (ii) a Subsidiary that
is not an Unrestricted Subsidiary), other than:
(a) prudent short-term investments;
(b) investments, contributions, loans or advances disclosed in the
Updated Financial Statements or in the Disclosure Schedule or
in disclosures made subsequent to the date hereof and
consented to in writing by or on behalf of the Majority
Lenders or otherwise made to effect the Acquisition and the
subsequent restructuring of certain of the Restricted
Subsidiaries, as described in the Acquisition Agreement;
(c) investments, contributions, loans or advances made by any
Designated Entity in the ordinary course of its business; or
(d) contributions made by Borrower to any of its Subsidiaries
arising out of or in respect of Letters of Credit (as defined
in the Primary Credit Facility) issued under the Primary
Credit Facility and used for the general corporate purposes of
such Subsidiary (i) so long as no amounts have been drawn
under any such Letter of Credit or (ii) to the extent that
Borrower has been reimbursed by such Subsidiary for amounts
drawn under any such Letter of Credit.
"Restricted Subsidiary" means each Subsidiary of Borrower that, at the
particular time in question, (i) owns directly or indirectly any material
assets or any interest in any other Restricted
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Subsidiary and (ii) either (a) has not been designated as an Unrestricted
Subsidiary or (b) has been redesignated as a Restricted Subsidiary. The
Restricted Subsidiaries on the Effective Date are listed on Schedule 3 attached
hereto and each other Subsidiary of Borrower as of the Effective Date shall be
an Unrestricted Subsidiary. A Restricted Subsidiary shall remain such (even if
it no longer owns directly or indirectly any interest in any of the material
assets) until designated as an Unrestricted Subsidiary pursuant to Section
5.2(i). An Unrestricted Subsidiary shall remain an Unrestricted Subsidiary
unless redesignated as a Restricted Subsidiary pursuant to the provisions of
Section 5.2(i).
"Restructuring" has the meaning given it in Section 5.2(l).
"Revolving Loan" has the meaning given it in Section 2.1(c).
"Revolving Loan Advance" has the meaning given it in Section 2.1(a).
"S&P" means Standard & Poor's Ratings Group and any successor thereto
that is a nationally-recognized rating agency.
"Security Instruments" shall mean the agreements or instruments
described or referred to in Schedule 5, the Guaranties, the Pledge Agreement,
and any and all other agreements or instruments now or hereafter executed and
delivered by any Designated Entity or any other Person in connection with, or
as security for the payment or performance of, the Notes, this Agreement or the
Guaranties, as any such instrument or agreement may be supplemented, amended,
renewed, extended or restated from time to time.
"Stock Pledge Release Date" has the meaning given to it in Section
8.16.
"Subsidiary" means, with respect to any Person, any corporation, which
is directly or indirectly (through one or more intermediaries) controlled by or
with respect to which fifty percent (50%) or more of the stock having ordinary
voting power to elect the board of directors is owned by such Person, or any
association, partnership, joint venture, or other non-corporate business
entity, enterprise or organization which is directly or indirectly (through one
or more intermediaries) controlled by, or owned one hundred percent (100%) by,
such Person, provided that associations, joint ventures or other relationships
(a) which are established pursuant to an operating agreement or similar
agreement or which are partnerships for purposes of federal income taxation
only, (b) which are not partnerships (or subject to the Uniform Partnership
Act) under applicable state law, and (c) whose businesses are limited to the
exploration, development and operation of oil, gas or mineral properties and
interests owned directly by the parties in such associations, joint ventures or
relationships, shall not be deemed to be "Subsidiaries" of such Person.
"Swing Line Advances" has the meaning given it in Section 2.4.
"Swing Line Lender" means NationsBank of Texas, N.A., its successors
and assigns.
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"Swing Line Note" has the meaning given it in Section 2.5(e).
"Swing Line Obligations" means, at the particular time in question,
the sum of all outstanding Swing Line Advances.
"Swing Line Participation Certificate" means a Swing Line
Participation Certificate substantially in the form of Exhibit "F".
"Swing Line Rate" has the meaning given it in Section 2.5(a).
"Syndication Agent" means The Chase Manhattan Bank, as Syndication
Agent hereunder and its successors and assigns in such capacity.
"Taxes" has the meaning given it in Section 2.20.
"Termination Event" means (a) the occurrence with respect to any ERISA
Plan of (1) a reportable event described in Sections 4043(b)(5) or (6) of ERISA
or (2) any other reportable event described in Section 4043(b) of ERISA other
than a reportable event not subject to the provision for 30-day notice to the
Pension Benefit Guaranty Corporation pursuant to a waiver by such corporation
under Section 4043(a) of ERISA, or (b) the withdrawal of any Designated Entity
or of any Affiliate of any Designated Entity from an ERISA Plan during a plan
year in which it was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA, or (c) the filing of a notice of intent to terminate any ERISA Plan
or the treatment of any ERISA Plan amendment as a termination under Section
4041 of ERISA, or (d) the institution of proceedings to terminate any ERISA
Plan by the Pension Benefit Guaranty Corporation under Section 4042 of ERISA,
or (e) any other event or condition which might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any ERISA Plan.
"364 Day Credit Facility" means the facility for loans established
pursuant to this Agreement.
"Total Capitalization" means the sum (without duplication) of (i)
Consolidated Total Funded Debt of Borrower and its Subsidiaries, plus (ii)
Consolidated shareholder's equity of Borrower and its Subsidiaries.
"Total Funded Debt" means all Debt of the type referred to in clauses
(a), (b), (c), (d), (g) (excluding Debt of the type referred to in clause (e)
of the definition of "Debt") and (h) of the definition of "Debt".
"Tranche" has the meaning given it in Section 2.3.
"Unrestricted Subsidiary" means each Subsidiary of Borrower which is
not designated as a Restricted Subsidiary on Schedule 3 attached hereto or is
designated by Borrower as an Unrestricted Subsidiary pursuant to Section
5.2(i).
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"Updated Financial Statements" means (a) the audited annual
Consolidated financial statements of P&P Petroleum and its Consolidated
Subsidiaries dated as of December 31, 1996, (b) the audited annual Consolidated
financial statements of Mesa and its Consolidated Subsidiaries dated as of
December 31, 1996, and (c) the unaudited Consolidated financial statements and
unaudited consolidating balance sheets and statements of operations of Borrower
and its Consolidated Subsidiaries prepared in reasonable detail in accordance
with GAAP and dated as of September 30, 1997.
Section 1.2 Exhibits and Schedules. All Exhibits and Schedules
attached to this Agreement are a part hereof for all purposes.
Section 1.3 Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein, the terms defined in
this Agreement which refer to a particular agreement, instrument or document
also refer to and include all renewals, extensions, modifications, amendments
and restatements of such agreement, instrument or document, provided that
nothing contained in this Section shall be construed to authorize or require
any such renewal, extension, modification, amendment or restatement.
Section 1.4 References and Titles. All references in this
Agreement to Exhibits, Schedules, articles, sections, subsections and other
subdivisions refer to the Exhibits, Schedules, articles, sections, subsections
and other subdivisions of this Agreement unless expressly provided otherwise.
Titles appearing at the beginning of any subdivisions are for convenience only
and do not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this
Agreement", "this 364 Day Credit Facility", "364 Day Credit Facility", "this
instrument", "herein", "hereof", "hereby", "hereunder" and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited. The phrases "this section" and "this subsection"
and similar phrases refer only to the sections or subsections hereof in which
such phrases occur. The word "or" is not exclusive, and the word "including"
(in its various forms) means "including without limitation". Pronouns in
masculine, feminine and neuter genders shall be construed to include any other
gender, and words in the singular form shall be construed to include the plural
and vice versa, unless the context otherwise requires.
Section 1.5 Calculations and Determinations. All calculations
under the Loan Documents of interest chargeable with respect to Eurodollar
Portions and Competitive Bid Advances shall be made on the basis of actual days
elapsed (including the first day but excluding the last) and a year of 360
days, subject, however, to the limitations set forth in Section 8.6 hereof.
All other calculations of interest and fees made under the Loan Documents shall
be made on the basis of actual days elapsed (including the first day but
excluding the last) and a year of 365 or 366 days, as appropriate. Unless
otherwise expressly provided herein or unless Required Lenders otherwise
consent, all financial statements and reports furnished to Administrative Agent
or any other Lender hereunder shall be prepared and all financial computations
and determinations pursuant hereto shall be made in accordance with GAAP.
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ARTICLE 2
LOANS
Section 2.1 Making the Loans.
(a) Subject to the terms and conditions hereof, each Lender agrees
to make advances on a revolving basis (herein a "Revolving
Loan Advance") to Borrower from time to time on any Business
Day during the Loan Commitment Period, equal to such Lender's
Percentage Share of the aggregate amount of Revolving Loan
Advances requested by Borrower to be made on such day, so long
as the aggregate amount of (i) all Lenders' Revolving Loan
Advances (including any Revolving Loan Advances to be made but
not yet made pursuant to a Request for Advance) outstanding at
any time plus (ii) all Swing Line Advances to Borrower plus
(iii) all Lenders' Competitive Bid Advances outstanding at
such time, does not exceed the Facility Amount. Subject to
the terms and conditions hereof, Borrower may borrow, repay
and reborrow Revolving Loan Advances.
(b) No Lender shall be permitted or required to make any Revolving
Loan Advance under this Agreement unless the aggregate of (1)
such Lender's Revolving Loan Advances under this Agreement
(including any Revolving Loan Advances to be made but not yet
made pursuant to a Request for Advance) outstanding at any
time is less than or equal to the least of (i) such Lender's
Loan Commitment or (ii) such Lender's Percentage Share of the
Facility Amount plus (2) such Lender's participation pursuant
to a Swing Line Participation Certificate in any Swing Line
Advances, if any.
(c) The aggregate amount of all Revolving Loan Advances requested
of all Lenders in any Request for Advance must be an integral
multiple of $1,000,000 which equals or exceeds $10,000,000 or
must equal the least of the unadvanced portion of the
aggregate Loan Commitments of all Lenders or the unadvanced
portion of the Facility Amount. The obligation of Borrower to
repay to each Lender the aggregate amount of all Revolving
Loan Advances made by such Lender to Borrower (herein called
such Lender's "Revolving Loan"), together with interest
accruing in connection therewith, shall be evidenced by a
single promissory note (herein called such Lender's "Loan
Note") made by Borrower payable to the order of such Lender in
the form of Exhibit A-1 with appropriate insertions. The
amount of principal owing on any Lender's Loan Note at any
given time shall be the aggregate amount of all Revolving Loan
Advances theretofore made by such Lender minus all payments of
principal theretofore received by such Lender on such Loan
Note. Interest on each Loan Note shall accrue and be due and
payable as provided herein and therein.
Section 2.2 Requests for Revolving Loan Advances. Borrower must
give to Administrative Agent not later than 11:00 a.m., Dallas, Texas time, for
same day funding, and not
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later than 1:00 p.m., Dallas, Texas time, for next Business Day funding,
written notice, or telephonic notice promptly confirmed in writing, of any
requested Revolving Loan Advances, after which Administrative Agent shall give
each other Lender prompt notice thereof. Each such written request or
confirmation must be made in the form and substance of Exhibit C attached
hereto, duly completed (herein called a "Request for Advance"). Each such
telephonic request shall be deemed a representation, warranty, acknowledgment
and agreement by Borrower as to the matters which are required to be set out in
such written confirmation. If all conditions precedent to a Revolving Loan
Advance have been met, each Lender will on the date requested remit, not later
than 1:00 p.m., Dallas, Texas time, for same day funding, and not later than
11:00 a.m., Dallas, Texas time, the following Business Day for next Business
Day funding, to Administrative Agent at Administrative Agent's office in
Dallas, Texas, or to such other office as Administrative Agent may specify from
time to time by notice to Lenders, the amount of such Lender's Revolving Loan
Advance in immediately available funds, and upon receipt of such funds, unless
to its actual knowledge any conditions precedent to such Revolving Loan
Advances have been neither met nor waived as provided herein, Administrative
Agent shall promptly make the Revolving Loan Advances available to Borrower.
Each Request for Advance shall be irrevocable and binding on Borrower. Unless
Administrative Agent shall have received prompt notice from a Lender that such
Lender will not make available to Administrative Agent such Lender's Revolving
Loan Advance, Administrative Agent may in its discretion assume that such
Lender has made such Revolving Loan Advance available to Administrative Agent
in accordance with this Section and Administrative Agent may if it chooses, in
reliance upon such assumption, make such Revolving Loan Advance available to
Borrower. If and to the extent such Lender shall not so make its Revolving
Loan Advance available to Administrative Agent, such Lender and Borrower
severally agree to pay or repay to Administrative Agent on demand the amount of
such Revolving Loan Advance together with interest thereon, for each day from
the date such amount is made available to Borrower until the date such amount
is paid or repaid to Administrative Agent, (i) if paid or repaid by Borrower at
the interest rate applicable at the time to the other Revolving Loan Advances
made on such date of such Revolving Loan Advance and (ii) if paid or repaid by
such Lender, at the Federal Funds Rate. The failure of any Lender to make any
Revolving Loan Advance to be made by it hereunder shall not relieve any other
Lender of its obligation hereunder, if any, to make its Revolving Loan Advance,
but no Lender shall be responsible for the failure of any other Lender to make
any Revolving Loan Advance to be made by such other Lender.
Section 2.3 Rate Elections. Borrower may from time to time
designate all or any portions of the Loans (including any yet to be made
Revolving Loan Advances which are to be made prior to or at the beginning of
the designated Eurodollar Interest Period but excluding any portions of the
Loans which are required to be repaid prior to the end of the designated
Eurodollar Interest Period and excluding any Competitive Bid Advance and any
Swing Line Advance) as a "Tranche", which term refers to a set of Eurodollar
Portions of the same type with identical Eurodollar Interest Periods and with
each Lender participating in such Tranche in accordance with its Percentage
Share. Without the consent of Required Lenders, Borrower may not make such
election, and Administrative Agent and Lenders shall not be required to give
effect to such election, during the continuance of a Default and Borrower may
make such an election with respect to already existing Eurodollar Portions only
if such election will take effect at or after the termination of the Eurodollar
Interest Period applicable thereto. Each election by Borrower of a Tranche
shall:
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(a) Be made in writing in the form and substance of Exhibit D
attached hereto, duly completed, herein called a "Rate
Election";
(b) Specify the aggregate amount of the Loans which Borrower
desires to designate as such Tranche, the first day of the
Eurodollar Interest Period which is to apply thereto, and the
length of such Eurodollar Interest Period; and
(c) Be received by Administrative Agent not later than 10:00 a.m.,
Dallas, Texas time, on the third Business Day preceding the
first day of the specified Eurodollar Interest Period.
Promptly after receiving any such Rate Election which meets the
requirements of this Section, Administrative Agent shall notify each Lender
thereof. Each Rate Election shall be irrevocable. Borrower may not make any
Rate Election which does not specify an Eurodollar Interest Period complying
with the definition of "Eurodollar Interest Period" in Section 1.1, and the
aggregate amount of the Tranche elected in any Rate Election must be
$10,000,000 or a higher integral multiple of $1,000,000. Upon the termination
of each Eurodollar Interest Period the portion of each Loan within the related
Tranche shall, unless the subject of a new Rate Election then taking effect,
automatically become a part of the Base Rate Portion of such Loan and become
subject to all provisions of the Loan Documents governing such Base Rate
Portion. Borrower shall have no more than fifteen (15) Tranches in effect at
any time.
If requested to do so by Borrower through Administrative Agent at
least two (2) Business Days before the delivery date of any proposed Rate
Election, each Lender will advise Administrative Agent before 10:00 a.m.,
Dallas, Texas time, on the Business Day following receipt of such request as to
whether, if Borrower selects a specified duration of nine (9) or twelve (12)
months for the Eurodollar Interest Period applicable to such proposed Rate
Election, such Lender expects that deposits in dollars with a corresponding
term will be available to it in the relevant market on the first day of such
Eurodollar Interest Period in the amount required to fund the Eurodollar
Portion of its Loan to which such Eurodollar Interest Period would apply.
Unless a Lender responds by such time to the effect that it expects such
deposits will be available to it, Borrower shall not be entitled to select such
proposed duration for such Eurodollar Interest Period.
Each Lender may, if it so elects, fulfill its obligation to fund any
Eurodollar Portion by causing one of its foreign branches or Affiliates (or an
international banking facility created by such Lender) to fund or continue such
Eurodollar Portion; provided, however, that such Eurodollar Portion shall be
deemed to have been made and held by such Lender, and the obligations of the
subject Borrower to repay such Eurodollar Portion shall nevertheless be to such
Lender for the account of such branch, or Affiliate (or international banking
facility). In addition, Borrower hereby consents and agrees that, for purposes
of any determination to be made for purposes of Sections 2.17, 2.18, 2.19 and
2.20, it shall be conclusively assumed that such Lender elected to fund all
Eurodollar Portions by purchasing Dollar deposits in the interbank eurodollar
market of its designated office.
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Section 2.4 Swing Line Advances. In addition to borrowings
pursuant to Section 2.1(a) or Section 2.22, Borrower may request Swing Line
Lender to make advances to Borrower on any Business Day (unless Borrower and
Swing Line Lender agree otherwise) during the Loan Commitment Period as
provided in Sections 2.5 and 2.6 (herein called "Swing Line Advances");
provided, however, that (a) at no time shall the outstanding aggregate
principal amount of all Swing Line Advances under this Agreement plus all
"Swing Line Advances" (as defined in the Primary Credit Facility), if any,
outstanding under the Primary Credit Facility exceed $50,000,000, and (b) at no
time shall the sum of (1) the outstanding aggregate principal amount of all
Swing Line Advances to Borrower, (2) the outstanding aggregate principal amount
of the Revolving Loans, and (3) the outstanding aggregate principal amount of
all Competitive Bid Advances, exceed the Facility Amount.
Section 2.5 Procedure for Swing Line Advances.
(a) No later than 11:00 a.m., Dallas, Texas time, on a Business
Day on which Borrower desires a Swing Line Advance, Borrower
shall transmit to Swing Line Lender) and to Administrative
Agent by telecopy a notice in substantially the form of
Exhibit E attached hereto (herein called a "Request for Swing
Line Loan"). Swing Line Lender will specify the rate of
interest per annum which will be the fixed rate of interest to
be charged for such Swing Line Advance until maturity (herein
called the "Swing Line Rate").
(b) Swing Line Lender shall wire the Swing Line Advance in
immediately available funds by no later than 1:00 p.m.,
Dallas, Texas time on the date of request for Swing Line
Advance, on such day to Administrative Agent, which shall
deposit such funds to an account designated by Borrower by no
later than 1:15 p.m. on the same day.
(c) Borrower shall repay each such Swing Line Advance on or before
1:00 p.m., Dallas, Texas time, on the following Business Day
or at such other maturity (such date of maturity being no more
than fourteen (14) days after the date of the Swing Line
Advance and no later than the Maturity Date) as is agreed to
by Borrower, Administrative Agent and the Swing Line Lender.
The repayment shall be paid on such date by Borrower (which
payment may be in the form of a Swing Line Advance advanced to
Borrower on that day) to Administrative Agent in immediately
available funds with instructions to Administrative Agent to
forward such proceeds to the Swing Line Lender. Any accrued
and unpaid interest pursuant to Swing Line Advances shall be
paid by Borrower (which payment may be in the form of a Swing
Line Advance advanced to Borrower on that day) to
Administrative Agent in immediately available funds on the
first Business Day of each calendar month with instructions to
Administrative Agent to forward such proceeds to the Swing
Line Lender.
(d) Interest on the Swing Line Advances shall be computed on the
basis of a year of 365 or 366 days and actual days elapsed
(including the first day, but excluding the
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last day) occurring in the period for which payable and shall
not exceed Maximum Lawful Rate. Past due principal and
interest (to the extent allowed by law) shall bear interest at
the lesser of the Default Rate or the Maximum Lawful Rate and
shall be payable on demand.
(e) The Swing Line Advances made by the Swing Line Lender shall be
evidenced by a single promissory note of Borrower payable to
the order of the Swing Line Lender in the amount of
$50,000,000 and in substantially the form of Exhibit A-2
attached hereto, with appropriate insertions (herein called a
"Swing Line Note"). The date, amount, Swing Line Rate and
maturity of each Swing Line Advance made by a Lender to
Borrower, and each payment made on account of the principal
thereof, shall be recorded by such Lender on its books.
(f) The Swing Line Advances will be used by Borrower to provide
working capital for the operations of Borrower and its
Subsidiaries and for general business purposes. No Swing Line
Advances shall be used for the purpose of purchasing or
carrying any Margin Stock in violation of the Margin
Regulations.
(g) The obligation of the Swing Line Lender to make each Swing
Line Advance after timely acceptance by Borrower is further
subject to the conditions contained in Article 3.
Section 2.6 Special Provisions for Swing Line Advances.
(a) Lenders to Make Revolving Loan Advances.
(i) Swing Line Lender, at any time in its discretion,
upon written request to Lenders through Administrative Agent (with a
copy to Borrower), may require each Lender (including the Swing Line
Lender) to make a Revolving Loan Advance, subject to the provisions of
Section 2.1 hereof, in an amount equal to such Lender's Percentage
Share of the outstanding Swing Line Advances. Swing Line Lender shall
deliver such request to Administrative Agent prior to 11:00 a.m.,
Dallas, Texas time, on the Business Day next preceding the date (which
shall be a Business Day) on which such Revolving Loan Advances are to
be made. Promptly upon receipt of any such request, Administrative
Agent shall give notice thereof to Lenders. Each Lender shall make
available its Percentage Share of such Revolving Loans to
Administrative Agent by 11:00 a.m., Dallas, Texas time, on the
requested date for such Revolving Loan Advances. Administrative Agent
shall apply the proceeds of such Revolving Loan Advances to prepay the
Swing Line Advances of the Swing Line Lender; provided, however, that
Administrative Agent shall be obligated to make the proceeds of such
Revolving Loans available only to the extent received by it from
Lenders. All Revolving Loans made pursuant to this subsection shall be
Base Rate Loans.
(ii) In the event Administrative Agent advances proceeds
of any Revolving Loan to Swing Line Lender and one or more of the
Lenders (other than Swing Line Lender) fail to fund all or any portion
of such Revolving Loan Advance immediately upon receipt of
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notice from Administrative Agent, then (I) such Lender shall pay
directly to Administrative Agent the amount thereof together with
interest thereon at the Federal Funds Rate, and (II) if not paid by
such Bank, the Swing Line Lender will repay directly to Administrative
Agent such amount as will equal the amount such other Lender(s) failed
to fund, together with interest at the Federal Funds Rate.
(b) Participations in Swing Line Advances.
(i) If, at any time prior to the making of Revolving
Loans pursuant to subsection 2.6(a)(i) hereof, any Event of Default
described in Sections 6.1(h) hereof shall have occurred, each Lender,
on the date such Revolving Loan Advance was to have been made or, if
no request for Revolving Loan Advances had been made pursuant to
Section 2.6(a)(i) hereof, promptly upon request by the Swing Line
Lender delivered to Administrative Agent, shall purchase an undivided
participation interest in all outstanding Swing Line Advances in an
amount equal to its Percentage Share times the outstanding amount of
such Swing Line Advances. Each Lender (other than the Swing Line
Lender) will transfer immediately to Administrative Agent for credit
to Swing Line Lender, in immediately available funds, the amount of
its participation. Upon receipt thereof, the Swing Line Lender will
deliver to such other Lender a Swing Line Advance Participation
Certificate, dated the date of receipt of such funds and in the amount
of such Lender's participation.
(ii) Whenever, at any time after the Swing Line Lender has
received from any other Lender such other Lender's participating
interest in a Swing Line Advance, the Swing Line Lender receives any
payment on account thereof, Administrative Agent will distribute to
such other Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender's participating interest
was outstanding and funded); provided, however, that in the event that
any payment received by Swing Line Lender is required to be returned,
such other Lender will return to Swing Line Lender any portion thereof
previously distributed to it.
(c) Acknowledged Privity. Borrower expressly agrees that, in
respect of each Lender's funded participation interest in any Swing Line
Advance, such Lender shall be deemed to be in privity of contract with Borrower
and have the same rights and remedies against Borrower under the Loan Documents
as if such funded participation interest in such Swing Line Advance were a
Revolving Loan.
(d) Unconditional Obligation. Each Lender's obligation to make
Revolving Loan Advances or to purchase participation interests in Swing Line
Advances as provided in this Section shall be absolute and unconditional and
shall not be affected by any circumstance, including without limitation, (A)
any set-off, counterclaim, recoupment, defense or other right which such Lender
may have against Swing Line Lender, Borrower or any other Person for any reason
whatsoever, (B) the existence of any Default or Event of Default at any time,
(C) the occurrence of any event or existence of any condition that might have a
Material Adverse Effect, or (D) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
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<PAGE> 29
Section 2.7 Facility Fee; Amendment Fee. In consideration of
each Lender's commitment to make Revolving Loan Advances and Competitive Bid
Advances, Borrower will pay, or cause the payment, to Administrative Agent for
the account of each Lender an annual facility fee payable to each Lender
determined by applying the Facility Fee Rate to such Lender's Percentage Share
of the Facility Amount as of the date of such payment, payable in arrears
quarterly until the Maturity Date, with the first payment thereof to be January
1, 1998, subsequent payments on the first day following each successive
calendar quarter ending on each March, June, September and December, and the
final payment thereof on the Maturity Date. Borrower will pay, or cause the
payment, to Administrative Agent for the account of each Lender a
non-refundable amendment fee payable to each Lender determined by applying the
Amendment Fee Rate to such Lender's Percentage Share of the Facility Amount as
of the Effective Date.
Section 2.8 Managing Agents' Fees. In addition to all other
amounts due to the Managing Agents under the Loan Documents, Borrower will pay
the non-refundable annual fees set forth in those certain Fee Letters dated
June 25, 1997.
Section 2.9 Termination and Reduction of Commitments.
(a) Unless previously terminated, the Commitments shall terminate
on the Maturity Date.
(b) Borrower may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $1,000,000 and not less
than $5,000,000 and (ii) Borrower shall not terminate or reduce the Commitments
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.10, the sum of (i) all Lenders' Revolving Loan Advances
(including any Revolving Loan Advances to be made but not yet made pursuant to
a Request for Advance) outstanding at any time plus (ii) all Swing Line
Advances to Borrower plus (iii) all Lenders' Competitive Bid Advances
outstanding at such time, would exceed the total Commitments.
(c) Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section at
least two Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by Borrower pursuant to
this Section shall be irrevocable; provided that a notice of termination of the
Commitments delivered by Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice
may be revoked by Borrower (by notice to the Administrative Agent on or prior
to the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments shall be permanent. Each reduction
of the Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments.
Section 2.10 Optional Prepayments. Borrower may, upon notice to
each Lender identical to that required for related borrowings under this
Agreement, from time to time and without premium or penalty, prepay its Notes,
in whole or in part, so long as the aggregate amounts of all
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<PAGE> 30
partial prepayments of principal concurrently paid on such Notes equals
$5,000,000 or any higher integral multiple of $1,000,000 or the aggregate
outstanding balance of the Loans, and so long as Borrower does not prepay any
Revolving Loan Advance, Competitive Bid Advance or Swing Line Advance except in
accordance herewith. Any amounts prepaid pursuant to this Section shall be in
addition to, and not in lieu of, all payments otherwise required to be paid
under the Loan Documents at the time of such prepayment.
Section 2.11 Payments to Lenders. Except as expressly set forth
in Section 2.5(c) with respect to repayment of Swing Line Advances and Section
2.22(b) with respect to repayment of Competitive Bid Advances, Borrower will
make each payment which it owes under the Loan Documents to Administrative
Agent at its principal banking office in Dallas, Texas, or to such other office
as Administrative Agent may specify from time to time by notice to Borrower for
the account of each Lender to whom such payment is owed, without the
application of any setoff, deduction or counterclaim. Each such payment must
be received by Administrative Agent not later than 1:00 p.m., Dallas, Texas
time, on the date such payment becomes due and payable, in lawful money of the
United States of America and in immediately available funds. Any payment
received by Administrative Agent after such time will be deemed to have been
made on the next Business Day. Should any such payment become due and payable
on a day other than a Business Day, the maturity of such payment shall be
extended to the next succeeding Business Day (except, with respect to any
Eurodollar Portion, as may be otherwise required by the definition of
Eurodollar Interest Period), and, in the case of a payment of principal or past
due interest, interest shall accrue and be payable thereon for the period of
such extension as provided in the Loan Document under which such payment is
due.
All payments applied to principal or interest on any Note shall be
applied first to any interest then due and payable, then to principal then due
and payable, and last to any prepayment of principal and interest in compliance
with Section 2.10. Unless otherwise expressly provided, all payments by any
Designated Entity pursuant to this Agreement or any other Loan Document shall
be made by such Designated Entity to Administrative Agent for account of Agents
and Lenders pro rata among Obligations of the same type and, if applicable,
having the same Eurodollar Interest Period or, in the case of Swing Line
Advances or Competitive Bid Advances, the same maturity date.
Section 2.12 Extension of Maturity Date and of Commitments.
(a) Subject to the other provisions of this Agreement and provided
that no Event of Default has occurred and is continuing, the total Commitments
shall be effective for an initial period from the Effective Date to the
Original Maturity Date; provided that the Maturity Date, and concomitantly the
total Commitments, may be extended for successive 364 day periods expiring on
the date which is 364 days from the then scheduled Maturity Date. If Borrower
shall request in a Certificate of Extension delivered to the Administrative
Agent not more than 60 days and not less than 45 days prior to the Maturity
Date that the Maturity Date be extended for 364 days from the then scheduled
Maturity Date, then the Administrative Agent shall promptly notify each Lender
of such request and each Lender shall notify the Administrative Agent, no later
than 30 days prior to the Maturity Date, whether such Lender, in the exercise
of its sole discretion, will extend the
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Maturity Date for such 364 day period. Any Lender which shall not timely
notify the Administrative Agent whether it will extend the Maturity Date shall
be deemed to not have agreed to extend the Maturity Date. No Lender shall have
any obligation whatsoever to agree to extend the Maturity Date. Any agreement
to extend the Maturity Date by any Lender shall be irrevocable, except as
provided in clause (c) of this Section.
(b) If all Lenders notify the Administrative Agent pursuant to
clause (a) of this Section of their agreement to extend the Maturity Date, then
the Administrative Agent shall so notify each Lender and Borrower, and such
extension shall be effective without other or further action by any party
hereto for such additional 364 day period.
(c) If Lenders constituting at least the Majority Lenders approve
the extension of the then scheduled Maturity Date (such Lenders agreeing to
extend the Maturity Date herein called the "Accepting Lenders") and if one or
more Lenders shall notify, or be deemed to notify, the Administrative Agent
pursuant to clause (a) of this Section that they will not extend the then
scheduled Maturity Date (such Lenders herein called the "Declining Lenders"),
then (A) the Administrative Agent shall promptly so notify Borrower and the
Accepting Lenders, (B) the Accepting Lenders shall, upon Borrower's election to
extend the then scheduled Maturity Date in accordance with clause (i) or (ii)
below, extend the then scheduled Maturity Date and (C) Borrower shall, pursuant
to a notice delivered to the Administrative Agent, the Accepting Lenders and
the Declining Lenders, no later than the tenth (10th) day following the date by
which each Lender is required, pursuant to clause (a) of this Section, to
approve or disapprove the requested extension of the total Commitments, either:
(i) elect to extend the Maturity Date with respect to the
Accepting Lenders and direct the Declining Lenders to terminate their
Commitments, which termination shall become effective on the date
which would have been the Maturity Date except for the operation of
this Section. On such date, (x) Borrower shall deliver a notice of
the effectiveness of such termination to the Declining Lenders with a
copy to the Administrative Agent and (y) Borrower shall pay in full in
immediately available funds all Obligations of Borrower owing to the
Declining Lenders, including any amounts required pursuant to Section
2.19, and (z) upon the occurrence of the events set forth in clauses
(x) and (y), the Declining Lenders shall each cease to be a Lender
hereunder for all purposes, other than for purposes of Sections 2.16
through 2.20 and Section 6.4, and shall cease to have any obligations
or any Commitment hereunder, other than to the Agents pursuant to
Article 7, and the Administrative Agent shall promptly notify the
Accepting Lenders and Borrower of the new Commitments; or
(ii) elect to extend the Maturity Date with respect to the
Accepting Lenders and, prior to or no later than the then scheduled
Maturity Date, (A) to replace one or more of the Declining Lender or
Declining Lenders with another lender or lenders reasonably acceptable
to the Administrative Agent or any Accepting Lender (such lenders
herein called the "Replacement Lenders") and (B) Borrower shall pay in
full in immediately available funds all Obligations of Borrower owing
to any Declining Lenders which are not being replaced, as provided in
clause (i) above; provided that (x) the Replacement Lender or
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Replacement Lenders shall purchase, and the Declining Lender or
Declining Lenders shall sell, the Declining Lender's or Declining
Lenders' rights and obligations hereunder without recourse or expense
to, or warranty by, such Declining Lender or Declining Lenders being
replaced for a purchase price equal to the aggregate outstanding
principal amount of the Obligations payable to such Declining Lender
or Declining Lenders plus any accrued but unpaid interest on such
Obligations and accrued but unpaid fees or other amounts owing in
respect of such Declining Lender's or Declining Lenders' Loans and
Commitments hereunder, and (y) upon the payment of such amounts
referred to in clause (x) and the execution of an Agreement to be
Bound by the Replacement Lender or Replacement Lenders and the
Declining Lender or Declining Lenders (which each such Declining
Lender agrees to execute promptly), the Replacement Lender or
Replacement Lenders shall each constitute a Lender hereunder and the
Declining Lender or Declining Lenders being so replaced shall no
longer constitute a Lender (other than for purposes of Sections 2.16
through 2.20 and Section 6.4), and shall no longer have any
obligations hereunder, other than to the Agents pursuant to Article 7;
or
(iii) elect to revoke and cancel the extension request in
such Certificate of Extension by giving notice of such revocation and
cancellation to the Administrative Agent (which shall promptly notify
the Lenders thereof) no later than the tenth (10th) day following the
date by which each Lender is required, pursuant to clause (a) of this
Section, to approve or disapprove the requested extension of the
Maturity Date, and concomitantly the total Commitments.
If Borrower fails to timely provide the election notice referred to in
this clause (c), Borrower shall be deemed to have revoked and canceled the
extension request in the Certificate of Extension and to have elected not to
extend the Maturity Date, and, on the then scheduled Maturity Date, Borrower
shall repay in full all Obligations under the Loan Documents.
Section 2.13 [Intentionally Omitted].
Section 2.14 [Intentionally Omitted].
Section 2.15 [Intentionally Omitted].
Section 2.16 Capital Reimbursement. If either (a) the
introduction or implementation of, or the compliance with, or any change in, or
in the interpretation of, any law, rule or regulation, or (b) the introduction
or implementation of or the compliance with any request, directive or guideline
from any central bank or Governmental Authority (whether or not having the
force of law) affects or would affect the amount of capital required to be
maintained by any Lender or any corporation controlling any Lender, then, upon
demand by such Lender, Borrower will immediately pay to Administrative Agent
for the benefit of such Lender, from time to time as specified by such Lender,
such additional amount which such Lender shall determine to be appropriate to
compensate such Lender or any corporation controlling such Lender in light of
such circumstances, to the extent that such Lender reasonably determines that,
because of the existence of such circumstances, the amount of any such capital
would be increased or the rate of return on any such capital would
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be reduced, in whole or in part, by or as a consequence of the existence of
such Lender's Commitments, its Loans, and its other commitments under this
Agreement to Borrower, subject to the provisions of Section 2.21.
Section 2.17 Increased Cost of Eurodollar Portions. If any
applicable domestic or foreign law, treaty, rule, directive or regulation
(whether now in effect or hereinafter enacted or promulgated, including
Regulation D) or any interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof (whether or not having the force of law):
(a) shall change the basis of taxation of payments to any Lender
of any principal, interest, or other amounts attributable to
any Eurodollar Portion of its Loans or its participation in
any Swing Line Advances or its Competitive Bid Advances or
otherwise due under this Agreement in respect of any
Eurodollar Portion of its Loans or its participation in any
Swing Line Advances or Competitive Bid Advances (other than
taxes imposed on the overall net income of such Lender or any
lending office of such Lender by any jurisdiction in which
such Lender or any such lending office is located);
(b) shall change, impose, modify, apply or deem applicable any
reserve, special deposit or similar requirements in respect of
any Eurodollar Portion of any Lender (excluding those for
which such Lender is fully compensated pursuant to adjustments
made in the definition of Adjusted Eurodollar Rate) or against
assets of, deposits with or for the account of, or credit
extended by, such Lender; or
(c) shall impose on any Lender, the certificate of deposit market
or the interbank eurocurrency deposit market any other
condition affecting any Eurodollar Portion;
and the result of any of the foregoing (a) through (c) is to (1) increase the
cost to any Lender of funding or maintaining any Eurodollar Portion, any
participation in any Swing Line Advance or any Competitive Bid Advance, as the
case may be, or (2) to reduce the amount of any sum receivable by any Lender in
respect of any Eurodollar Portion, Swing Line Advance or Competitive Bid
Advance, as the case may be, by an amount reasonably deemed by such Lender to
be material; then (i) such Lender shall promptly notify Administrative Agent
and Borrower in writing of the happening of such event, (ii) Borrower shall
thereafter upon demand pay to Administrative Agent for the account of such
Lender such additional amount or amounts as will compensate such Lender for
such additional cost or reduction, subject to the provisions of Sections 2.21
and 2.19, and (iii) Borrower may elect, by giving to Administrative Agent and
Lender not less than three (3) Business Days' notice, to convert all (but not
less than all) of any such Eurodollar Portion into a part of the Base Rate
Portion.
Section 2.18 Availability. If (a) any change in applicable laws,
treaties, rules or regulations or in the interpretation or administration
thereof in any jurisdiction whatsoever, domestic or foreign, shall make it
unlawful or impracticable for any Lender to fund or maintain Eurodollar
Portions, or shall materially restrict the authority of any Lender to purchase
or take
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offshore deposits of dollars ("Eurodollars"), or (b) any Lender determines that
matching deposits appropriate to fund or maintain any Eurodollar Portion are
not available to it, or (c) any Lender determines that the formula for
calculating the Adjusted Eurodollar Rate does not fairly reflect the cost to
such Lender of making or maintaining loans based on such rates, then, upon
notice by such Lender to Administrative Agent and to Borrower, Borrower's right
to elect Eurodollar Portions shall be suspended to the extent and for the
duration of such illegality, impracticability, restriction or condition, and
all Eurodollar Portions (or portions thereof) which are then outstanding or are
then the subject of any Rate Election and which cannot lawfully or practicably
be maintained or funded shall immediately become or remain part of the Base
Rate Portions of such Lender's Loan, subject to the provisions of Sections 2.21
and 2.19. Borrower agrees to indemnify Administrative Agent and each Lender
and hold Administrative Agent and each Lender harmless against all costs,
expenses, claims, penalties, liabilities and damages which may result from any
such change in law, treaty, rule, regulation, interpretation or administration,
subject to the provisions of Section 2.21.
Section 2.19 Funding Losses. In addition to its other obligations
hereunder, subject to the provisions of Section 2.21, Borrower shall indemnify
each Lender against, and reimburse each Lender on demand for, any loss or
expense incurred or sustained by such Lender, determined as provided in this
Section, as a result of (a) any payment or prepayment (whether authorized or
required hereunder or otherwise) of all or a portion of a Eurodollar Portion of
Borrower on a day other than the day on which the applicable Eurodollar
Interest Period ends, (b) any payment or prepayment, whether required hereunder
or otherwise, of a Loan of Borrower made after the delivery, but before the
effective date, of a Rate Election, if such payment or prepayment prevents such
Rate Election from becoming fully effective, (c) the failure of any Revolving
Loan Advance or Swing Line Advance or Competitive Bid Advance to be made to
Borrower or of any Rate Election of Borrower to become effective due to any
condition precedent to a Revolving Loan Advance or Swing Line Advance or
Competitive Bid Advance not being satisfied, due to the inability of
Administrative Agent (acting reasonably and in accordance with Section 2.18) to
determine a Eurodollar Rate for a Eurodollar Portion of Borrower or due to any
other action or inaction of any Designated Entity, (d) any conversion (whether
authorized or required hereunder or otherwise) of all or any portion of any
Eurodollar Portion of Borrower into a Base Rate Portion or into a different
Eurodollar Portion on a day other than the day on which the applicable
Eurodollar Interest Period ends, (e) any payment or prepayment of all or a
portion of a Swing Line Advance to Borrower on a day other than the maturity
date for such Swing Line Advance or (f) any payment or prepayment of all or a
portion of a Competitive Bid Advance on a day other than the maturity date for
such Competitive Bid Advance.
Upon the occurrence of an event as described in subsections (a)
through (f) of this Section, the method to be used by each Lender to calculate
the loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund or maintain Eurodollar
Portions of Revolving Loan Advances, Swing Line Advances or Competitive Bid
Advances, as the case may be, is as follows:
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<PAGE> 35
Funding Loss = P x (F-R) x D/360
<TABLE>
<S> <C> <C>
P = principal amount of payment, prepayment, conversion, non-borrowing or non-effective
Rate Election
F = Eurodollar Rate or Swing Line Rate or Competitive Bid Rate, as the case may be
(adjusted for Reserve Percentage), utilized in the calculations of the Eurodollar Rate
or Swing Line Rate or Competitive Bid Rate, as the case may be, on the Eurodollar
Portion or Swing Line Advance or Competitive Bid Advance which is being paid, prepaid,
converted, not borrowed or not subject to effective Rate Election
R = reinvestment rate (as hereinafter defined)
D = number of days from the date of the payment, prepayment, conversion, non-borrowing or
non-effectiveness until the day on which the Eurodollar Interest Period of the
Eurodollar Portion ends or the Swing Line Advance or Competitive Bid Advance matures
</TABLE>
Reinvestment rate as it is used herein will be equal to the Eurodollar Rate,
adjusted for the Reserve Percentage quoted to such Lender, or the Swing Line
Rate or Competitive Bid Rate that would be quoted by such Lender, as the case
may be, effective for the date on which the payment, prepayment, conversion,
non-borrowing or non-effectiveness occurs. For purposes of determining the
reinvestment rate for purposes of this Section, the Eurodollar Rate will be the
quote for either one (1) month, two (2) months, three (3) months, six (6)
months, nine (9) months or twelve (12) months, the Competitive Bid Rate will be
the quote for a number of days between seven (7) and 360, and the Swing Line
Rate will be the quote for a number of days between one (1) and fourteen (14),
whichever most closely approximates (but which may contain more or fewer days
than) the number of days from the date of the payment, prepayment, conversion,
non-borrowing or non-effectiveness until the last day of the relevant
Eurodollar Interest Period or the scheduled maturity, as the case may be, of
the Eurodollar Portion, Competitive Bid Advance or Swing Line Advance, as the
case may be, in respect of which the payment, prepayment, conversion,
non-borrowing or non-effectiveness occurs; provided that if such number of days
in respect of a Eurodollar Rate is the midpoint between two such periods, such
rate will be the lower of the two rates for such periods.
Section 2.20 Taxes. All payments by Borrower of principal of,
and interest on, the Loans and all other amounts payable hereunder shall be
made free and clear of and without deduction for any present or future income,
excise, stamp, or franchise taxes and other taxes, fees, duties, withholdings
or other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender's net
income or receipts (such non-excluded items being called "Taxes"). In the
event that any withholding or deduction from any payment to be made by Borrower
hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then, subject to the provisions of Section 2.21, Borrower
will:
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(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to Administrative Agent an official receipt
or other documentation satisfactory to Administrative Agent
evidencing such payment to such authority; and
(c) pay to Administrative Agent for the account of the applicable
Lender(s) such additional amount(s) as is necessary to ensure
that the net amount actually received by each Lender will
equal the full amount such Lender would have received had no
such withholding or deduction been required and Borrower
hereby acknowledges that it is not entitled to and will not
seek recovery or restitution of any amount due to any of the
Lenders or Agents and paid by Borrower pursuant to this clause
(c) or pursuant to the next sentence.
If any Taxes are directly asserted against any Agent or any Lender with respect
to any payment received by such Agent or such Lender hereunder, such Agent or
such Lender may pay such Taxes and, if paid in good faith, Borrower will
promptly pay such additional amounts to Administrative Agent for the account of
such Lender or Agent (including any penalties, interest or expenses) as is
necessary in order that the net amount received by such person after the
payment of such Taxes (including any taxes on such additional amount) shall
equal the amount such person would have received had no such Taxes been
asserted, subject to the provisions of Section 2.21.
Borrower shall pay all stamp, transaction, registration and similar
taxes (including financial institutions' duties, debit taxes or other taxes
payable by return and taxes passed on to any Lender or Agent by a bank or
financial institution (collectively "Stamp Taxes") and, if Borrower fails to
pay any such charges or taxes after reasonable notice from any such Lender or
Agent, fines and penalties) which may be payable or determined to be payable in
relation to the execution, delivery, performance or enforcement of this
Agreement or any Loan Document or any other transaction contemplated by any
Loan Document to which Borrower is a party. Borrower hereby indemnifies each
Lender and Agent against any liability resulting from delay or omission to pay
such charges or taxes except to the extent the liability results from failure
by the relevant Lender or Agent to pay any such tax after having been delivered
funds to do so by Borrower or to the extent such liability is for fines and
penalties resulting from such Lender's or Agent's failure to provide reasonable
notice to Borrower as provided herein.
If Borrower fails to pay any Taxes or Stamp Taxes when due to the
appropriate taxing authority or fails to remit to Administrative Agent, for the
account of the respective Lenders, the required receipts or other required
documentary evidence, Borrower shall indemnify Lenders for any Taxes, interest
or penalties that may become payable by any Lender as a result of any such
failure, subject to the provisions of Section 2.21. For purposes of this
Section, a distribution hereunder by Administrative Agent or any Lender to or
for the account of any Lender or Agent shall be deemed a payment by the subject
Borrower.
Borrower waives any statutory right to recover from any Agent or any
Lender any amount due to any such Agent or Lender and paid by Borrower under
this Section.
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On or prior to the first date on which interest or fees are payable
hereunder for the account of any Lender, each Lender that is organized under
the laws of a jurisdiction other than the United States shall execute and
deliver to Administrative Agent, three (3) or more (as Administrative Agent may
reasonably request) United States Internal Revenue Service Forms 1001 or 4224
or such other forms or documents (or successor forms or documents),
appropriately completed, as may be applicable to establish the extent, if any,
to which a payment to such Lender is exempt from withholding or deduction of
Taxes. Each Lender which so delivers a Form 1001 or 4224 further undertakes to
deliver to Administrative Agent three (3) additional copies of such form (or a
successor form) on or before the date that such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by Administrative Agent, in
each case certifying that such Lender is entitled to receive payments from
Borrower under this Agreement and the Notes without deduction or withholding of
any United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms of the type previously delivered inapplicable or which would prevent
such Lender from duly completing and delivering such form with respect to it
and such Lender advises Administrative Agent that it is not capable of
receiving such payments on the basis reflected in such previously delivered
form without any deduction or withholding of United States federal income tax.
Administrative Agent shall provide one (1) copy of each of such forms or
documents so provided to Borrower and Documentation Agent.
Section 2.21 Make-Whole Qualifications. Each Lender's claims for
reimbursements, payments, indemnities or otherwise under Sections 2.16, 2.17,
2.18, 2.19 and 2.20 and Borrower's obligation with respect thereto, shall be
limited and qualified by and subject to the following:
(a) Borrower's obligation to pay, satisfy or recognize such claim
shall be limited to costs or losses incurred within one (1)
year immediately prior to any demand or request therefor upon
Borrower;
(b) each Lender's demand for reimbursement, payment or indemnity
from Borrower must be limited to that which is being generally
applied at the time by such Lender for comparable borrowers
and credits subject to credit agreements similar to this
Agreement, but without regard to provisions similar to this
Section;
(c) each Lender which asserts its rights with respect thereto or
which is seeking or imposing such reimbursement, payment or
indemnity shall provide evidence regarding the basis of such
claim and the calculation and application thereof in
reasonable detail and, in determining such amount, each Lender
may use reasonable methods of attribution and averaging;
(d) each Lender which is seeking payment or reimbursement pursuant
to Section 2.20 shall, if so requested by Borrower, use
reasonable efforts (subject to the overall policy
considerations of such Lender) to designate a different
lending office hereunder if to do so will avoid the need for,
or reduce the amount of, any such
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payment or reimbursement; provided that, Lender would, in its
sole but reasonable determination, suffer no material
economic, legal or regulatory disadvantage or burden;
(e) Borrower may, in its sole discretion, elect, unless and until
the applicable Lender notifies Borrower that the circumstances
giving rise thereto no longer apply to such Lender, that, to
the extent that a Lender's claims for such reimbursements,
payments or indemnities would be reduced thereby, that subject
to Section 2.19, (1) all Loans to Borrower which would
otherwise be made by such Lender as Eurodollar Portions shall
be made instead as Base Rate Portions (all of which interest
and principal shall be payable as provided herein with respect
to the related Eurodollar Portions of the Lenders), and (2)
after each Eurodollar Portion has been repaid, all payments of
principal which would otherwise would be applied to repay such
Eurodollar Portion shall be applied to repay Base Rate
Portions instead; and
(f) Borrower may designate a replacement Lender (which may be one
(1) or more of the then existing Lenders hereunder and which
shall be reasonably satisfactory to Administrative Agent) to
purchase the Notes, in each case without recourse, and assume
the Commitments and all other obligations hereunder of any
Lender that has suspended the availability of Eurodollar
Portions pursuant to Section 2.18 or that has demanded
reimbursement, payment or indemnity under Sections 2.16, 2.17,
2.18, 2.19 or 2.20, and such Lender shall be obligated to
sell, transfer and deliver all of its Notes to such
replacement Lender for the outstanding principal amount of
such Notes, plus in each case, accrued interest thereon and
such Lender's portion of accrued but unpaid fees through the
date of such purchase, and permit such replacement lender to
assume its Commitments. Borrower shall be obligated to pay
all additional amounts due to the Lender being replaced
pursuant to Sections 2.16, 2.17, 2.18, 2.19 and 2.20 through
the date of such purchase and assumption; provided, that if
the replacement Lender fails to purchase all such rights and
interests and assume all such Commitments on the specified
date in accordance herewith, Borrower shall continue to be
obligated to pay such amounts to such Lender which was to have
been replaced and provided further that Borrower shall pay any
Taxes or Stamp Taxes, if any, as a result of such transfer.
Section 2.22 Competitive Bid Advances.
(a) In addition to borrowings pursuant to Section 2.1(a) or
Section 2.4, Borrower may request each Lender severally to submit offers
(herein called a "Competitive Bid Offer") to make advances to Borrower on any
Business Day during the Loan Commitment Period as provided in this Section
(herein called "Competitive Bid Advances"); provided, however, that each Lender
may in its sole discretion, but shall have no obligation whatsoever to submit
such offers, and Borrower may, but shall have no obligation to, accept any such
offers.
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(b) Procedure for Competitive Bid Advances.
(i) Borrower may request Competitive Bid Advances by
delivering a request for a Competitive Bid Advance to
each Lender (which has indicated to Borrower its
interest in making a Competitive Bid Advance) and
Administrative Agent not later than 9:00 a.m.,
Dallas, Texas time, one (1) Business Day prior to the
proposed borrowing date. Each request for a
Competitive Bid Advance shall be in substantially the
form of Exhibit N hereto (herein called a "Request
for Competitive Bid Offer") and may solicit bids for
Competitive Bid Advances having not more than three
(3) alternative maturity dates and for Competitive
Bid Advances in any respective principal amount equal
to $10,000,000 or an integral multiple of $1,000,000
in excess thereof for each maturity date requested.
The maturity date for each Competitive Bid Advance
shall be not less than fifteen (15) days nor more
than 360 days after the borrowing date therefor (and
in any event not after the Maturity Date).
(ii) Upon receipt of a Request for Competitive Bid Offer,
any Lender that elects, in its sole discretion, to do
so, shall irrevocably offer to make one (1) or more
Competitive Bid Advances at a fixed rate of interest
determined by such Lender in its sole discretion for
each such Competitive Bid Advance. Any such
irrevocable offer shall be made by delivering a
Competitive Bid Offer to Administrative Agent and to
Borrower, before 9:00 a.m., Dallas, Texas time (or,
in the case of a Competitive Bid Offer by
Administrative Agent, before 8:45 a.m., Dallas, Texas
time), on the proposed borrowing date, setting forth
the maximum amount of Competitive Bid Advances for
each maturity date, and the aggregate maximum amount
for all maturity dates, which such Lender would be
willing to make (which amounts may exceed such
Lender's Percentage Share of the Commitments) and the
fixed rate of interest at which such Lender is
willing to make each such Competitive Bid Advance,
which fixed rate of interest may or may not be, in
such Lender's discretion, different for each
Competitive Bid Advance (respectively herein a
"Competitive Bid Rate"). Borrower shall pay to
Administrative Agent a fee of $500 on each day that
Borrower accepts a Competitive Bid Offer.
(iii) The Competitive Bid Offer delivered by each Lender in
response to a Request for Competitive Bid Offer shall
set forth an amount proposed to be loaned by such
Lender for each maturity date requested by Borrower
that is equal to $10,000,000 or an integral multiple
of $1,000,000 in excess thereof. Any Competitive Bid
Offer by any Lender that: (A) does not substantially
conform to the form of Exhibit O hereto, (B) contains
qualifying, conditional or similar language, (C)
proposes terms other than or in addition to those set
forth in the applicable Request for Competitive Bid
Offer or (D) is received by Borrower after the
applicable time specified in
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this subsection, shall be rejected by Borrower and
Administrative Agent (and Administrative Agent shall
notify the relevant Lender of such rejection for one
or more of the matters described in the foregoing (A)
through (D) by telephone and telecopy as soon as
practicable thereafter).
(iv) Borrower shall before 10:00 a.m., Dallas, Texas time,
on the proposed borrowing date either, in its
absolute discretion:
(A) withdraw such Request for Competitive Bid
Offer by giving telephonic notice to that
effect;
(B) accept one (1) or more of the Competitive Bid
Offers by giving telephonic notice to
Administrative Agent (immediately confirmed
by delivery to Administrative Agent by
facsimile transmission of a Bid Acceptance)
of the amount of Competitive Bid Advance(s)
for each relevant maturity date to be made by
the relevant Lender(s) (which amount for each
such maturity date shall be equal to or less
than the maximum amount for such maturity
date specified in the Competitive Bid Offer
of such Lender(s), and for all maturity dates
included in such Competitive Bid Offer shall
be equal to or less than the aggregate
maximum amount specified in such Request for
Competitive Bid Offer for all such maturity
dates) and reject any Competitive Bid Offers
not accepted by Borrower by giving telephonic
notice to Administrative Agent of such
rejection; provided, however, that (1)
Borrower may not accept Competitive Bid
Offers for any maturity date in an aggregate
principal amount in excess of the maximum
principal amount requested in the related
Request for Competitive Bid Offer (and
Competitive Bid Advances allocated to a
Lender on a borrowing date for each relevant
maturity date shall be in a principal amount
equal to $10,000,000 or an integral multiple
of $1,000,000 in excess thereof); and (2)
Administrative Agent shall notify the Lender
that submitted a Competitive Bid Offer for
such Business Day of Borrower's decision by
telecopying to each such Lender a copy of the
Bid Acceptance by no later than 12:00 noon,
Dallas, Texas time, on the borrowing date
specified in the Request for Competitive Bid
Offer; or
(C) Borrower may accept or reject any Competitive
Bid Offer(s) in whole or in part; provided
that after giving effect to any such accepted
Competitive Bid Offer(s), the sum of (i) the
aggregate principal amount of the Revolving
Loans and Swing Line Advances outstanding at
such time, and (ii) the aggregate principal
amount of Competitive Bid Advances
outstanding at such time, does not exceed the
Facility Amount.
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(v) If Borrower notifies Administrative Agent that a
Request for Competitive Bid Offer is withdrawn
pursuant to clause (iv) above, the Competitive Bid
Advance requested thereby shall not be made.
(vi) Each Lender which is to make a Competitive Bid
Advance shall, before 1:00 p.m., Dallas, Texas time,
on the borrowing date specified in the Request for
Competitive Bid Offer applicable thereto, make
available to Administrative Agent in immediately
available funds the amount of each Competitive Bid
Advance to be made by such Lender. Administrative
Agent shall deposit such funds to an account
designated by Borrower by no later than 1:15 p.m.,
Dallas, Texas time, on such date.
(vii) Borrower shall repay to Administrative Agent, for the
account of each Lender which has made a Competitive
Bid Advance, on the maturity date of each Competitive
Bid Advance (such maturity date being that specified
by Borrower for repayment of such Competitive Bid
Advance in the related Request for Competitive Bid
Offer) the then unpaid principal amount of such
Competitive Bid Advance. Borrower shall not have the
right to prepay any principal amount of any
Competitive Bid Advance. If any Lender makes a
Competitive Bid Advance on a day on which Borrower is
to repay all or any part of an outstanding
Competitive Bid Advance from such Lender, if
requested by Borrower, such Lender shall apply the
proceeds of its new Competitive Bid Advance to make
such repayment and, in such instance, only an amount
equal to the difference (if any) between the amount
being borrowed and the amount being repaid shall be
made available by such Lender to Administrative Agent
as provided in Section 2.22(b)(vi), or remitted by
Borrower to Administrative Agent as provided in this
Section 2.22(b)(vii), as the case may be.
(viii) Borrower shall pay interest on the unpaid principal
amount of each Competitive Bid Advance from the
borrowing date to the stated maturity date thereof,
at the rate of interest determined pursuant to clause
(b) (ii) above (calculated on the basis of a 360 day
year for actual days elapsed including the first but
excluding the last), but not in excess of the Maximum
Lawful Rate, payable on the maturity date with
respect to such Competitive Bid Advance and, if such
maturity date is more than 90 days after the date of
making such Competitive Bid Advance, on such
ninetieth day and each ninetieth day occurring after
such ninetieth day until the maturity date. If all
or a portion of the principal of or interest on any
Competitive Bid Advance shall not be paid when due
(whether at the stated maturity, by acceleration or
otherwise), without limiting any rights of any Lender
under this Agreement, (i) such overdue principal
amount shall bear interest from the date on which
such payment was due (other than on the scheduled
maturity date with respect thereto) at the Default
Rate, but not in excess of the Maximum Lawful Rate,
until paid in full (as well as after as before
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judgment) and (ii) such overdue interest shall bear
interest from the date on which payment was due at
the Default Rate, but not in excess of the Maximum
Lawful Rate, until paid in full (as well as after as
before judgment).
(c) The Competitive Bid Advances made by each Lender shall be
evidenced by a single promissory note of Borrower payable to
the order of such Lender substantially in the form of Exhibit
A-3 attached hereto, with appropriate insertions (herein
called a "Competitive Bid Note"). The date, amount,
Competitive Bid Rate and maturity date of each Competitive Bid
Advance made by a Lender to Borrower, and each payment made on
account of the principal thereof, shall be recorded by such
Lender on its books.
(d) The Competitive Bid Advances will be used by Borrower to
provide working capital and for the general business purposes
of Borrower and its Subsidiaries. No Competitive Bid Advances
shall be used for the purpose of purchasing or carrying any
Margin Stock in violation of the Margin Regulations.
(e) The obligation of Lenders to make each Competitive Bid Advance
after timely acceptance by Borrower is further subject to the
conditions contained in Article 3.
(f) Borrower shall not be required to accept Competitive Bid
Offers on the basis of the lowest Competitive Bid Rate
offered, but may in its sole discretion accept any Competitive
Bid Offer regardless of the Competitive Bid Rate(s) offered.
ARTICLE 3
CONDITIONS PRECEDENT TO LENDING
Section 3.1 Initial Conditions Precedent. No Lender has any
obligation to make its first Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance unless:
(a) Administrative Agent shall have received all of the following
with copies for each Lender, at Administrative Agent's office
in Midland, Texas:
(1) This Agreement, the Notes, those Security Instruments
and Guaranties listed on Schedule 5 hereto, any other
documents required in connection herewith, each duly
executed and delivered and in form, substance and
date satisfactory to Managing Agents.
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(2) The following certificates:
(i) an "Omnibus Certificate" of the Secretary or
an Assistant Secretary and of a Designated
Officer, which shall contain the names and
signatures of the officers of Borrower
authorized to execute Loan Documents and
which shall certify to the truth, correctness
and completeness of the following exhibits
attached thereto: (A) a copy of resolutions
duly adopted by the Board of Directors of
Borrower and in full force and effect at the
time this Agreement is entered into,
authorizing the execution of this Agreement
and the other Loan Documents delivered or to
be delivered in connection herewith and the
consummation of the transactions contemplated
herein and therein, (B) a copy of the charter
documents of Borrower and all amendments
thereto, certified by the appropriate
official of Borrower's jurisdiction of
organization, and (C) a copy of the bylaws or
similar governing documents of Borrower
(provided that, to the extent Borrower has
previously provided Administrative Agent
certified copies of the documents described
in (B) and (C) above, such Omnibus
Certificate may omit such documents, but
shall include a statement that such documents
have not been modified in any respect since
the date last so provided to Administrative
Agent, except as may be specifically noted in
such Omnibus Certificate with appropriate
attachments); and
(ii) a "Compliance Certificate" of a Designated
Officer of Borrower, of even date with such
Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance, in which such
officer certifies to the satisfaction of the
conditions set out in Section 3.2(a) and (b)
and that all conditions hereunder have been
satisfied.
(3) A certificate (or certificates) of the due formation,
valid existence and good standing of Borrower in its
jurisdiction of organization, issued by the
appropriate authorities of such jurisdiction.
(4) The favorable opinions of the counsel for Borrower
and the Restricted Subsidiaries, given upon their
express instructions substantially in the form set
forth as Exhibit H attached hereto.
(5) Documents similar to those specified in Section
3.1(a)(2)(i) and 3.1(a)(3) with respect to each
Restricted Subsidiary which is or will be party to a
Security Instrument on the date hereof.
(6) A certificate of a Designated Officer of Borrower as
to insurance concerning the material assets of
Designated Entities. Lenders agree that Designated
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Entities' insurance coverage disclosed on Schedule 4 is
acceptable at the date hereof.
(b) Except as disclosed to the Lenders in the Disclosure Schedule
or otherwise in writing prior to the execution hereof and not
objected to by Required Lenders, there shall be no pending or
threatened litigation, action or proceeding against Borrower
or any of its Subsidiaries which, if adversely determined,
could reasonably be expected to have a Material Adverse
Effect.
(c) No event or condition shall have occurred (i) with respect to
Borrower and its Restricted Subsidiaries (other than Chauvco
and its Subsidiaries) since August 8, 1997 and (ii) with
respect to Chauvco and its Subsidiaries since September 30,
1997, which is reasonably expected to result in a Material
Adverse Effect.
(d) After giving effect to such Revolving Loan Advances,
Competitive Bid Advances and Swing Line Advances, Borrower and
Lenders shall be in compliance with the Margin Regulations.
(e) The acquisition by Borrower or any of its Affiliates of
Chauvco (the "Acquisition") shall have been consummated as
contemplated by and pursuant to that certain Combination
Agreement, dated as of September 3, 1997, as amended (the
"Acquisition Agreement"), between Borrower and Chauvco, and
Administrative Agent shall have received (i) satisfactory
evidence of the consummation of such Acquisition and (ii) a
certificate from a Designated Officer of Borrower certifying
that the Acquisition has been consummated.
(f) A certificate of a Designated Officer of Borrower certifying
that (i) all representations and warranties made by any
Designated Entity in this Agreement or any other Loan Document
are true and correct as of the Effective Date and (ii) that
all conditions precedent to the initial Advance contained in
this Agreement or any other Loan Document have been satisfied
as of the Effective Date.
(g) All requisite Governmental Authorities and third parties shall
have approved or consented to the Acquisition and all related
transactions, including, without limitation, the issuance,
closing and funding of this Agreement and the facilities
thereunder, to the extent required. All applicable appeal
periods shall have expired and there shall be, in the judgment
of the Managing Agents, in their sole discretion, no
governmental or judicial action, actual or threatened,
restraining, preventing or imposing burdensome conditions on
the Acquisition and all related transactions, including,
without limitation, the issuance, closing and funding of this
Agreement and the facilities thereunder.
(h) Managing Agents shall have received copies of all financial
statements, reports, notices and proxy statements sent by
Borrower to its stockholders and all SEC filings concerning
the Acquisition.
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(i) No litigation or administrative proceeding or other legal or
regulatory developments prohibiting or enjoining the
consummation of the Acquisition shall exist.
(j) Exclusive of the Acquisition, no "Event of Default" (as
defined in the Existing Credit Agreement shall have occurred
and be continuing.
(k) Administrative Agent shall have received copies of (i) the
executed documentation for the Primary Credit Facility and
(ii) the executed documentation for the Canadian Credit
Facility.
Section 3.2 Additional Conditions Precedent. No Lender has any
obligation to make any Revolving Loan Advance, Competitive Bid Advance or Swing
Line Advance (including its initial Advance) unless the following conditions
precedent have been satisfied:
(a) All representations and warranties made by any Designated
Entity in any Loan Document shall be true on and as of the
date of such Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance as if such representations and
warranties had been made as of the date of such Revolving Loan
Advance, Swing Line Advance or Competitive Bid Advance (unless
stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct as of
such earlier date).
(b) In the case of the first Revolving Loan Advance, Swing Line
Advance or Competitive Bid Advance, no Event of Default, and
in the case of any other Revolving Loan Advance, Swing Line
Advance or Competitive Bid Advance, no Default shall exist at
the date of such Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance or will occur as a result of the
making of the requested Revolving Loan Advance, Swing Line
Advance or Competitive Bid Advance.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 Borrower's Representations and Warranties. To
confirm each Lender's understanding concerning Borrower and its businesses,
properties and obligations, and to induce Managing Agents, Co-Agents and each
Lender to enter into this Agreement and to make the Loans to Borrower, except
as to matters disclosed herein or in the Disclosure Schedule, Borrower
represents and warrants to Managing Agents, Co-Agents and each Lender that:
(a) No Default. No Designated Entity is in default in the
performance of any of the covenants and agreements contained
herein or under any other Loan Document. No event or
circumstance has occurred and is continuing which constitutes
a Default.
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(b) Organization, Existence and Good Standing. Each Designated
Entity is duly organized or incorporated, validly existing and
in good standing under the laws of its jurisdiction of
organization or incorporation, having all corporate or
partnership powers required to enter into and carry out the
transactions contemplated hereby. Each Designated Entity is
duly qualified, in good standing, and authorized to do
business in all other jurisdictions wherein the character of
the properties owned or held by it or the nature of the
business transacted by it makes such qualification necessary,
except for any lack of qualification, good standing or
authorization that could not reasonably be expected to have a
Material Adverse Effect. Each Designated Entity has taken all
actions customarily taken in order to enter, for the purpose
of conducting business or owning property, each jurisdiction
outside the United States wherein the character of the
properties owned or held by it or the nature of the business
transacted by it makes such actions desirable, except for any
failure or other matter that could not reasonably be expected
to have a Material Adverse Effect.
(c) Authorization. Each Designated Entity has duly taken all
corporate or partnership action necessary to authorize the
execution and delivery by it of the Loan Documents to which it
is a party and to authorize the consummation of the
transactions contemplated thereby and the performance of its
obligations thereunder. Borrower is duly authorized to borrow
funds hereunder.
(d) No Conflicts or Consents. The execution and delivery by each
Designated Entity of the Loan Documents to which it is a
party, the performance by each Designated Entity of its
obligations under such Loan Documents, and the consummation of
the transactions contemplated by the various Loan Documents,
including, without limitation, the consummation of the
Acquisition, do not and will not (1) conflict with any
provision of the articles or certificate of incorporation,
bylaws, charter, partnership agreement or certificate or other
governing document of such Designated Entity, or (2) except as
to matters that could not reasonably be expected to have a
Material Adverse Effect, result in the acceleration of any
Debt owed by such Designated Entity, or conflict with any law,
statute, rule, regulation, or material agreement, judgment,
license, order or permit applicable to or binding upon such
Designated Entity, or require the consent, approval,
authorization or order of, or notice to or filing with, any
Governmental Authority or third party, or result in or require
the creation of any Lien upon any material assets or
properties of such Designated Entity, except (i) as permitted
in the Loan Documents and (ii) for filings and recordings of
the Security Instruments.
(e) Enforceable Obligations. This Agreement is, and the other
Loan Documents when duly executed and delivered will be,
legal, valid and binding obligations of each Designated Entity
which is a party hereto or thereto, enforceable in accordance
with their terms except as such enforcement may be limited by
bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights generally and
by general principles of equity.
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(f) Financial Statements. (i) The Updated Financial Statements
fairly present Borrower's, Mesa's and P&P Petroleum's and each
of their Consolidated subsidiaries' financial position at the
respective dates thereof and the results of Borrower's, Mesa's
and P&P Petroleum's and each of their Consolidated
subsidiaries' operations and cash flows for the respective
periods thereof. From the date of the audited Updated
Financial Statements to the Effective Date no change has
occurred in Borrower's, Mesa's or P&P Petroleum's Consolidated
financial condition which could reasonably be expected to
result in a Material Adverse Effect, except as reflected in
the Disclosure Schedule. From September 30, 1997 to the
Effective Date, no change has occurred in Chauvco's
Consolidated financial condition which could reasonably be
expected to result in a Material Adverse Effect, except as
reflected in the Disclosure Schedule. All Updated Financial
Statements were prepared in accordance with GAAP as in effect
on the date thereof.
(ii) The Unaudited Pro Forma Financial Statements
of Borrower for the periods ending December 31, 1996 and
September 30, 1997 contained in the Joint Management
Information Circular and Proxy Statement, dated November 17,
1997 (the "Proxy"), and the Unaudited Pro Forma Financial
Statements of Borrower for the period ending September 30,
1997, fairly present Borrower's pro forma financial position
at the respective dates thereof and the results of Borrower's
pro forma operations and cash flows for the respective periods
thereof. From the date of such financial statements to the
Effective Date no change has occurred in Borrower's
Consolidated financial condition which could reasonably be
expected to result in a Material Adverse Effect on Borrower's
Pro Forma Consolidated Financial Condition, except as
reflected in the Disclosure Schedule. All such financial
statements were prepared in accordance with GAAP as in effect
on the date thereof.
(g) Other Obligations. Except as disclosed in the Disclosure
Schedule, as of the Effective Date, neither Borrower nor any
of its Consolidated Subsidiaries has any outstanding Debt
which is, in the aggregate, material to Borrower and its
Consolidated Subsidiaries and not shown in the Updated
Financial Statements.
(h) Full Disclosure. No certificate, statement or other
information delivered herewith or heretofore by any Designated
Officer of any Designated Entity to either of Managing Agents,
Co-Agents or any Lender in connection with the negotiation of
this Agreement or in connection with any transaction
contemplated hereby contains any untrue statement of a fact or
omits to state any fact known to Borrower, P&P Petroleum, Mesa
or any Designated Entity (other than industry-wide risks
normally associated with the types of businesses conducted by
Borrower, P&P Petroleum, Mesa or any Designated Entity)
necessary to make the statements contained herein or therein
not misleading as of the date made or deemed made, except to
the extent that any untrue statement or omission could not
reasonably be expected to have a Material Adverse Effect.
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(i) Litigation. Except as disclosed in the Updated Financial
Statements or in the Disclosure Schedule: (1) there are no
actions, suits or legal, equitable, arbitrative or
administrative proceedings pending, or, to the knowledge of
Borrower, threatened, against any Designated Entity before any
Governmental Authority that could reasonably be expected to
have a Material Adverse Effect, and (2) there are no
outstanding judgments, injunctions, writs, rulings or orders
by any such Governmental Authority against Borrower, P&P
Petroleum, Mesa or any of their respective Consolidated
Subsidiaries which could reasonably be expected to have a
Material Adverse Effect.
(j) Environmental Matters. The liabilities and costs of Borrower
and its Consolidated Subsidiaries related to compliance with
applicable Environmental Laws (as in effect on the date on
which this representation is made or deemed made) could not
reasonably be expected to have a Material Adverse Effect.
(k) Title to Properties. Each Designated Entity has good and
defensible title to all of its material properties and assets,
except any failure, defect or other matter that could not, in
the aggregate, reasonably be expected to have a Material
Adverse Effect.
(l) Investment Company Act. Neither Borrower nor any of its
Subsidiaries is an "investment company" or a "company
controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.
(m) Public Utility Holding Company Act. Neither Borrower nor any
of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding
company", or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(n) Principal Business Offices. As of the Effective Date, each
Designated Entity's principal place of business and chief
executive office is located at the place described in the
Disclosure Schedule.
(o) Solvency. Each Designated Entity is solvent and will continue
to be solvent after the making and guarantying of the Loans.
(p) Organization. As of the Effective Date, the organization
chart of Borrower and its Subsidiaries with material assets
set forth on Exhibit I is true and correct in all material
respects. Except for the Exchangeable Shares, as of the
Effective Date, Borrower or a Restricted Subsidiary owns all
of the issued and outstanding capital stock of each Restricted
Subsidiary. As of the Effective Date, no Restricted
Subsidiary has issued any securities convertible into shares
of its stock or any options (except as set forth in the
Disclosure Schedule), warrants or other rights to acquire such
shares or securities convertible into such shares and the
outstanding capital stock and securities of each Restricted
Subsidiary is owned by Borrower or
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another Restricted Subsidiary free and clear of all Liens,
warrants, options or rights of others of any kind whatsoever,
except for Permitted Liens.
(q) Use of Proceeds; Margin Stock. Borrower and its Subsidiaries
shall use (i) the initial Revolving Loan Advance to discharge
all outstanding obligations under the Existing Credit
Agreement, and (ii) all Revolving Loan Advances, Competitive
Bid Advances and Swing Line Advances for its and their
respective general corporate purposes. In no event shall the
funds from any Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance be used directly or indirectly by any
Persons for personal, family, household or agricultural
purposes or for the purpose, whether immediate, incidental or
ultimate, of purchasing, acquiring or carrying any "margin
stock" or any "margin securities" (as such terms are defined
in the Margin Regulations) in violation of the Margin
Regulations, or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or
carry "margin stock" or "margin securities" in violation of
the Margin Regulations, or to extend credit to others
directly or indirectly for the purpose of purchasing or
carrying any such margin stock or margin securities in
violation of the Margin Regulations. Borrower is not engaged
principally, or as one of Borrower's important activities, in
the business of extending credit to others for the purpose of
purchasing or carrying such margin stock or margin securities.
Neither any Designated Entity nor any Person acting on behalf
of any Designated Entity has taken or will take any action
which might cause this Agreement, the Notes, or any Guaranty,
any Loan Document or any Loan to violate the Margin
Regulations or to violate Section 7 of the Securities Exchange
Act of 1934, or any rule or regulation thereunder, in each
case as now or hereafter in effect.
(r) Liens Under the Security Instruments. Upon the execution and
delivery of the Security Instruments in accordance herewith,
and where appropriate the filing and recordation thereof with
the appropriate filing or recording officers in each of the
necessary jurisdictions, the Liens granted and to be granted
by any Designated Entity to Lenders or the Trustee (as defined
in any of the Security Instruments) on behalf of Lenders in
such Designated Entity's assets pursuant to the Security
Instruments will be validly created, perfected and first
priority Liens, subject only to Permitted Liens.
Section 4.2 Representation by Lenders. Each Lender hereby
represents that it will acquire its Notes for its own account in the ordinary
course of its commercial lending business; however, such Lender may sell or
otherwise transfer its Notes, any participation interest or other interest in
its Notes, or any of its other rights and obligations under the Loan Documents
as permitted by Section 8.8.
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ARTICLE 5
COVENANTS OF BORROWER
Section 5.1 Affirmative Covenants. To conform with the terms and
conditions under which each Lender is willing to have credit outstanding to
Borrower, and to induce Managing Agents, Co-Agents and each Lender to enter
into this Agreement and make the Loans to Borrower, unless Required Lenders
shall have previously agreed otherwise in writing, Borrower severally for
itself and its Subsidiaries, covenants and agrees that:
(a) Payment and Performance. Borrower will pay all amounts due
from it under the Loan Documents in accordance with the terms
thereof and will observe, perform and comply with every
covenant, term and condition expressed in the Loan Documents,
and will cause each Designated Entity which is a Subsidiary of
Borrower to perform and comply with every covenant, term and
condition expressed in the Loan Documents and applicable to
such Designated Entity.
(b) Books, Financial Statements and Reports. Borrower will at all
times maintain full and materially accurate books of account
and records. Borrower will maintain and will cause its
Subsidiaries to maintain a standard system of accounting and
will cause the following statements and reports to be
delivered to Managing Agents and each Lender at Borrower's
expense:
(1) As soon as available, and in any event within 120
days after the end of each Fiscal Year, complete
audited Consolidated financial statements of Borrower
and its Subsidiaries and unaudited consolidating
balance sheets and statements of operations of
Borrower and its Subsidiaries, prepared in reasonable
detail in accordance with GAAP; such audited
statements to be accompanied by an opinion, by KPMG
Peat Marwick, or such other independent certified
public accountants of nationally recognized standing
selected by Borrower, stating that such Consolidated
financial statements have been so prepared. Borrower
will, together with each set of such financial
statements delivered pursuant to this Section,
furnish a certificate in the form of Exhibit J signed
by a Designated Officer of Borrower stating that, to
the best of his knowledge, (i) such financial
statements are accurate and complete, and (ii) no
Default or Event of Default exists at the end of such
Fiscal Quarter or at the time of such certificate or
specifying the nature and period of existence of any
such Default or Event of Default. Such certificate
shall contain calculations showing compliance (or
noncompliance) at the end of such Fiscal Quarter with
the requirements of Sections 5.3(a) and (b).
(2) As soon as available, and in any event within 60 days
after the end of the first three Fiscal Quarters in
each Fiscal Year, unaudited Consolidated financial
statements of Borrower and its Subsidiaries and
unaudited
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consolidating balance sheet and statements of
operations of Borrower and its Subsidiaries as of the
end of such Fiscal Quarter, all in reasonable detail
and prepared in accordance with GAAP, subject to
changes resulting from year-end adjustments.
Borrower will, together with each set of such
financial statements delivered pursuant to this
Section, furnish a certificate in the form of Exhibit
J signed by a Designated Officer of Borrower stating
that, to the best of his knowledge, (i) such
financial statements are accurate and complete, and
(ii) no Default or Event of Default exists at the end
of such Fiscal Quarter or at the time of such
certificate or specifying the nature and period of
existence of any such Default or Event of Default.
Such certificate shall contain calculations showing
compliance (or noncompliance) at the end of such
Fiscal Quarter with the requirements of Sections
5.3(a) and (b).
(3) Promptly after transmittal or filing, copies of all
financial statements, reports, notices and proxy
statements sent by Borrower to its stockholders and
all registration statements, periodic reports and
other statements and schedules filed by Borrower or
any of its Subsidiaries with any securities exchange,
the Securities and Exchange Commission or any similar
Governmental Authority.
(c) Other Information and Inspections. Borrower will furnish to
Managing Agents and each Lender any information which
Administrative Agent, on behalf of any Lender, may from time
to time reasonably request in writing concerning any covenant,
provision or condition of the Loan Documents or any matter in
connection with Borrower's and its Subsidiaries' businesses
and operations. Borrower will permit and will cause each of
its Subsidiaries to permit representatives of Agents and
Lenders (including independent accountants, agents and
attorneys), at the expense and risk of the applicable Lender,
to visit and inspect, during normal business hours and upon
reasonable notice any of Borrower's or such Subsidiaries'
property, including its books of account, other books and
records, and any facilities or other business assets, and to
make extra copies therefrom and photocopies and photographs
thereof, and to write down and record any information such
representatives obtain, and Borrower shall permit and will
cause each of its Subsidiaries to permit Agents and the
Lenders or their representatives, to investigate and verify
the accuracy of the information furnished to Administrative
Agent or any Lender in connection with the Loan Documents and
to discuss all such matters with its officers, employees and
representatives; provided, however, that any such visit,
inspection, investigation or verification or discussion with
respect to Borrower taking place at a time when Borrower has
been notified in writing by Administrative Agent of the
existence of a Default or an Event of Default applicable to
Borrower which has occurred and is continuing shall be at the
cost and expense of Borrower, and that neither Managing
Agents, Co-Agents nor Lenders shall have any obligation to pay
any costs or expenses of Borrower or any other Designated
Entity or any of
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their officers, employees or representatives in respect
thereof irrespective of the existence of any Default or Event
of Default.
(d) Notice of Material Events. Borrower will promptly upon its
awareness thereof notify Administrative Agent and each Lender
(1) of the occurrence of any Default or any other event, which
has or may reasonably be expected to have, a Material Adverse
Effect, (2) of the acceleration of the maturity of any Debt
owed by any Designated Entity or any default by any Designated
Entity under any instrument evidencing or governing Debt, if
such acceleration or default has a Material Adverse Effect,
(3) of the occurrence of any Termination Event which may
reasonably be expected to have a Material Adverse Effect, and
(4) of the filing of any litigation or proceeding in which any
Designated Entity is a party or of any material developments
in existing litigation in which any Designated Entity is a
party in which an adverse decision may reasonably be expected
to have a Material Adverse Effect.
(e) Maintenance of Existence and Qualifications. Borrower will,
and will cause each Restricted Subsidiary to, maintain and
preserve its existence as a corporation or partnership, as the
case may be. Borrower will, and will cause each Restricted
Subsidiary to, maintain and preserve its good standing and its
rights and franchises in full force and effect and qualify to
do business as a foreign corporation in all states or
jurisdictions where required by applicable law, except for any
failure to maintain, preserve and qualify that could not
reasonably be expected to have a Material Adverse Effect.
Nothing in this Section shall prohibit (i) a merger or
consolidation permitted by Section 5.2(c) or (ii) a
termination of such existence, good standing, rights or
franchises of any Restricted Subsidiary if Borrower determines
in good faith that such termination is in the best interest of
Borrower and could not reasonably be expected to have a
Material Adverse Effect.
(f) Payment of Taxes and Trade Debt. Borrower will, and will
cause each of its Subsidiaries to, except for any failure or
other matter that could not reasonably be expected to have a
Material Adverse Effect, (1) timely file all required tax
returns, (2) timely pay all taxes, assessments, and other
governmental charges or levies imposed upon it or upon its
income, profits or property, and (3) timely pay all trade
debt. Borrower and its respective Subsidiaries may, however,
delay paying or discharging any such taxes, assessments,
charges, debts or levies so long as the validity thereof is
contested in good faith by appropriate proceedings and
adequate reserves therefor in accordance with GAAP have been
set aside and reflected among the books and records of
Borrower and its Subsidiaries.
(g) Insurance. Borrower will, and will cause each of its
Subsidiaries to, at all times maintain insurance in such
amounts and covering such risks as are in accordance with
normal industry practice for companies engaged in similar
businesses and
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owning similar properties in the same general area in which
Borrower and its Subsidiaries conduct business, which
insurance (other than prudent self-insurance programs) shall
be by financially sound and reputable insurers.
(h) Payment of Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, Borrower will
promptly pay all reasonable costs and expenses (including
reasonable attorneys' fees) incurred by or on behalf of (1)
the Documentation Agents in connection with the negotiation,
preparation, execution and delivery of the Loan Documents and
any amendment, modification or restatement thereof, and any
and all consents, waivers or other documents or instruments,
including commitment letters, term sheets and any memorandum
relating thereto (provided that Borrower shall be obligated to
pay only the attorneys' fees of a common counsel for the
Documentation Agents, Mayer, Brown & Platt), (2) Agents in
connection with due diligence, syndication, travel and
advertising related to this Agreement and the transactions
contemplated thereby, and (3) Administrative Agent or any
Lender in connection with enforcement of the Loan Documents or
the defense of Administrative Agent's or any Lender's exercise
of its rights thereunder. The selection of Managing Agents'
counsel and consultants in connection with the matters
described in the preceding sentence shall be subject to the
approval of Borrower, which approval shall not be unreasonably
withheld. Attorneys' fees reimbursed by Borrower for any
amendment, modification or restatement of any Loan Document
shall be estimated and approved by Borrower prior to
incurrence, such approval not to be unreasonably withheld.
Attorneys' fees reimbursed by Borrower in connection with the
enforcement of the Loan Documents or the defense of
Administrative Agent's or any Lenders' exercise of its rights
hereunder shall be for a single law firm per country (unless
conflicts (including conflicts between Managing Agents and the
other Lenders as determined in the reasonable discretion of
the Required Lenders) otherwise prohibit the engagement of a
single law firm).
(i) Compliance with Agreements and Law. Borrower will, and will
cause each of its Subsidiaries to (1) perform all material
obligations it is required to perform under the terms of each
material agreement, contract or other instrument or obligation
to which it is a party or by which it or any of its material
properties is bound, except for any non-performance that will
not have or reasonably be expected to have a Material Adverse
Effect; and (2) conduct its business and affairs in material
compliance with all laws, regulations, and orders applicable
thereto (including without limitation Environmental Laws)
except for any non-compliance that could not reasonably be
expected to have a Material Adverse Effect.
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(j) Maintenance of Business. Borrower will, and will cause each
Restricted Subsidiary to, maintain as its primary business the
exploration, production and development of oil, natural gas
and other liquid and gaseous hydrocarbons and the gathering,
processing, transmission and marketing of hydrocarbons and
activities related or ancillary thereto.
(k) Operations. Borrower will, and will cause each Restricted
Subsidiary to, cause all material properties to be regularly
operated, maintained and developed in a good and workmanlike
manner, as would a prudent operator and in accordance with all
applicable federal, state and local laws, rules and
regulations, except for any failure to so operate, maintain
and develop that could not reasonably be expected to have a
Material Adverse Effect.
(l) Restructuring. No later than 30 days after the Effective Date,
Borrower shall cause the Outside Debt to be assumed by
Borrower through a Restructuring. In connection with such
Restructuring, Pioneer USA shall guarantee the repayment of
the Outside Debt being assumed by Borrower. Contemporaneously
with such Restructuring, Borrower shall cause the Subsidiary
or Subsidiaries who are the surviving entities of such
Restructuring to execute new Guaranties. As used herein,
"Restructuring" shall mean the formation of one or more
wholly-owned Subsidiaries of Borrower and/or Pioneer USA and
the occurrence of one or more mergers, to take place on a
single day, among Borrower, Pioneer USA and any such
Subsidiaries, in each case as determined by Borrower to be
appropriate to bring about the assumption, by merger, of the
Outside Debt from Pioneer USA to Borrower as contemplated by
this Section.
Section 5.2 Negative Covenants. To conform with the terms and
conditions under which each Lender is willing to have credit outstanding to
Borrower, and to induce Managing Agents and each Lender to enter into this
Agreement and make the Loans to Borrower, unless Required Lenders shall have
previously agreed otherwise in writing, Borrower severally for itself and its
Subsidiaries, covenants and agrees that:
(a) Limitation on Debt. Borrower will not, and will not permit
any Restricted Subsidiary to, in any manner owe or be liable
for Debt except:
(1) the Obligations;
(2) Debt pursuant to the Primary Credit Facility and Debt
pursuant to the Canadian Credit Facility in a maximum
aggregate amount of $300,000,000;
(3) unsecured Debt among Designated Entities;
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(4) Debt arising under capital leases which does not in
the aggregate for Borrower and all Restricted
Subsidiaries exceed $20,000,000 at any one time
outstanding;
(5) Debt, other than Debt otherwise permitted by another
subparagraph of this Section 5.2(a), which, at the
time incurred, is at prevailing market rates of
interest and contains covenants and conditions and
events of default no more onerous to Designated
Entities than the terms of this Agreement; provided,
that no Default or Event of Default will result from
the incurrence of such Debt and be continuing;
(6) guaranties of Debt which is the primary obligation of
a Designated Entity and permitted under this Section
5.2(a);
(7) Debt arising (whether by contract or as a result of
statutory liability of a general partner) by virtue
of any Designated Entity being a general partner of a
general or limited partnership pursuant to agreements
in effect on the Effective Date not in excess of the
aggregate amounts permitted to be incurred pursuant
to such agreements on the Effective Date for all such
Debt and other such Debt otherwise permitted pursuant
to the other subparagraphs of this Section 5.2(a);
and
(8) Debt existing on the Effective Date which is
disclosed (i) in the Updated Financial Statements or
(ii) in the Disclosure Schedule and any extensions,
renewals or replacements thereof upon terms no more
onerous to Borrower than the terms of this Agreement
or the terms of the instruments evidencing such Debt
as of the date of this Agreement.
(b) Negative Pledge. Borrower will not, and will not permit any
of its Restricted Subsidiaries to, create, assume or permit to
exist any Lien upon any of their respective material property,
except Permitted Liens.
(c) Limitation on Mergers. Except as expressly provided in this
paragraph, Borrower will not, and will not permit any of its
Restricted Subsidiaries to, merge or consolidate with or into
any other business entity, except (1) Borrower may be party to
a merger or consolidation so long as the surviving entity is
Borrower and no Default will exist and the Obligations do not
exceed the Facility Amount after giving effect thereto and (2)
any Restricted Subsidiary may be a party to any merger or
consolidation so long as the surviving entity is a Restricted
Subsidiary and any Guaranty of, or Pledge Agreement by, such
Restricted Subsidiary continues as to such surviving entity,
no Default will
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exist, and the Obligations do not exceed the Facility Amount
after giving effect thereto.
(d) Limitation on Disposition of Capital Stock of Restricted
Subsidiaries. Borrower will not, and will not permit any
Restricted Subsidiary to, sell, transfer or otherwise dispose
of capital stock of any Restricted Subsidiary, except that
Borrower and any Restricted Subsidiary may sell, issue,
transfer or otherwise dispose of the capital stock of any
Restricted Subsidiary to Borrower or to another Restricted
Subsidiary.
(e) Limitation on Restricted Payments. Borrower will not, and
will not permit any Restricted Subsidiary to, make Restricted
Payments in excess of $150,000,000 in the aggregate for the
duration of this Agreement for all such Restricted Payments;
provided, however, that in the event that any Unrestricted
Subsidiary of Borrower is redesignated to be a Restricted
Subsidiary of Borrower for purposes of this Agreement, then
for purposes of determining compliance with this Section, all
Restricted Payments made to such Unrestricted Subsidiary shall
be deducted from the aggregate total of all Restricted
Payments made for the duration of this Agreement. No
Restricted Payment may be made (1) if the Obligations shall
exceed the Facility Amount, (2) if any Default or Event of
Default shall have occurred and be continuing, or (3) if as a
result thereof, any Default or Event of Default shall have
occurred and be continuing.
(f) Transactions with Affiliates. Borrower will not, and will not
permit any of its Restricted Subsidiaries to, engage in any
material transaction with any of Borrower's Affiliates on
terms which are less favorable than those which would have
been obtainable at the time in arm's-length dealing with
Persons other than such Affiliates, provided, however that
such restriction shall not apply to transactions among
Borrower and its Restricted Subsidiaries and (ii) among
Restricted Subsidiaries.
(g) Limitations on Restricted Subsidiaries. Borrower will not
permit any Restricted Subsidiary to become subject to
covenants which:
(1) restrict dividends or dividend capacity;
(2) restrict loans and advances to Borrower;
(3) restrict the ability to make tax payments or
management payments to Borrower; or
(4) restrict the capitalization structure of any
Restricted Subsidiary.
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(h) Limitation on Sale/Leasebacks. Designated Entities will not
enter into any arrangement, directly or indirectly, with any
Person whereby any Designated Entity shall sell or transfer
any material asset, and whereby any Designated Entity shall
then or immediately thereafter rent or lease as lessee such
asset or any part thereof.
(i) Conversion between Restricted Subsidiary and Unrestricted
Subsidiary. Borrower may convert any Restricted Subsidiary to
an Unrestricted Subsidiary by giving Administrative Agent at
least five (5) Business Days' notice of such conversion in the
form of Exhibit K-1 attached hereto; provided that (1) no
Restricted Subsidiary shall be so converted so long as it owns
or will thereafter own, directly or indirectly, any interest
in any material asset or in another Restricted Subsidiary
unless the value of such material assets, together with the
aggregate of all Restricted Payments made and the value of any
other material assets determined as aforesaid of any
Restricted Subsidiaries converted to Unrestricted Subsidiaries
do not exceed in the aggregate the limitation on Restricted
Payments contained in Section 5.2(e) hereof, and (2) no such
conversion shall be made if after giving effect to such
conversion, any Default would exist. Upon any such conversion
of a Restricted Subsidiary to an Unrestricted Subsidiary, such
Subsidiary shall be released from its obligations under its
Guaranty, and Managing Agents and Lenders shall execute and
deliver a release substantially in the form of Exhibit K-2
hereto. Borrower may convert any Unrestricted Subsidiary to a
Restricted Subsidiary by giving Administrative Agent at least
five (5) Business Days' notice of such conversion in the form
of Exhibit K-1 attached hereto; provided that no such
conversion may be made if after giving effect to such
conversion, any Default would exist.
(j) Margin Securities. Proceeds of the Loans will not be used to
purchase or carry Margin Stock except in compliance with the
Margin Regulations.
(k) Modification to Canadian Credit Facility. Borrower shall not
make, permit or otherwise consent to any amendment or
modification to, or seek a waiver of, any representation,
warranty or covenant contained in the Canadian Credit Facility
without the prior consent of the Required Lenders, such
consent not to be unreasonably withheld.
Section 5.3 Financial Covenants. To conform with the terms and
conditions under which each Lender is willing to have credit outstanding to
Borrower, and to induce Managing Agents and each Lender to enter into this
Agreement and make the Loans to Borrower, unless Required Lenders shall have
previously agreed otherwise in writing, Borrower severally for itself and its
Subsidiaries, covenants and agrees that:
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(a) EBITDAX to Consolidated Interest Expense Ratio. The ratio of
Borrower's "EBITDAX" to "Consolidated Interest Expense" for
the last four rolling Fiscal Quarters will not be less than
3.75 to 1.0; provided, however, that the EBITDAX to
Consolidated Interest Expense Ratio shall first be calculated
on December 31, 1997; provided further that for the periods
for calculation ending on or before September 30, 1998, each
reference to "for the last four rolling Fiscal Quarters" shall
be deemed to be a reference to the period from October 1, 1997
through the date of such calculation. As used in this
paragraph, the term "Consolidated Interest Expense" means for
any period, total interest expense, whether paid or accrued,
of Borrower and its Subsidiaries on a Consolidated basis,
including, without limitation, all commissions, discounts and
other fees and charges owed with respect to Letters of Credit
(as defined in the Primary Credit Facility). As used in this
paragraph, the term "EBITDAX" means for any period the sum of
the amounts for such period of Consolidated net income,
Consolidated Interest Expense, depreciation expense, depletion
expense, amortization expense, federal and state income taxes,
exploration and abandonment expense and other non-cash charges
and expenses, all as determined on a Consolidated basis for
Borrower and its Subsidiaries.
(b) Consolidated Total Funded Debt to Total Capitalization.
Borrower's Consolidated Total Funded Debt to Total
Capitalization will not, as of the last day of any Fiscal
Quarter, be greater than 60%.
ARTICLE 6
EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Events of Default. Each of the following events
constitutes an "Event of Default" under this Agreement:
(a) Borrower shall default on the payment when due of any
principal on any of its Loans or any of its Notes;
(b) Borrower fails to pay any of its Obligations (other than
principal) when due and payable, whether interest in respect
of any Loan or any fee or any other amounts payable under any
of the Loan Documents and such failure shall continue
unremedied for a period of five (5) Business Days; provided,
however, that any such Default shall not constitute an Event
of Default if subsequently available information indicates
that a payment made when due was insufficient because of a
good faith error in calculation so long as Borrower shall cure
such deficiency within five (5) Business Days after Borrower
becomes aware of such deficiency;
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(c) any Designated Entity fails to duly observe, perform or comply
with any covenant, agreement, condition or provision set forth
in Section 5.1(d) or 5.2 of this Agreement;
(d) any Designated Entity fails (other than as referred to in
subsections (a), (b) and (c) above) to duly observe, perform
or comply with any covenant, agreement, condition or provision
of any Loan Document applicable to it (even if all or part of
such agreement or covenant is void or unenforceable), and such
failure is not remedied within thirty (30) Business Days after
written notice thereof shall have been sent to Borrower by
Administrative Agent or any Lender;
(e) any representation or warranty previously, presently or
hereafter made in writing or deemed made by or on behalf of
any Designated Entity in connection with any Loan Document
shall have been false or incorrect in any material respect on
any date on or as of which made and either (1) an Executive
Officer of Borrower had actual knowledge that such
representation or warranty was false or incorrect in a
material respect when made or (2) if no Executive Officer had
such knowledge, such representation or warranty shall continue
to be false or incorrect in any material respect thirty (30)
Business Days after the earlier of an Executive Officer of
Borrower obtaining actual knowledge thereof or written notice
thereof shall have been sent to Borrower by Administrative
Agent;
(f) any Designated Entity (1) fails to pay when due Debt in excess
of $20,000,000 or (2) breaches or defaults in the performance
of any agreement or instrument by which any such Debt in
excess of $20,000,000 is issued, evidenced, governed, or
secured, and any such failure, breach or default continues
beyond any applicable period of grace provided therefor;
(g) either (1) any "accumulated funding deficiency" (as defined in
Section 412(a) of the Internal Revenue Code of 1986, as
amended) in excess of $10,000,000 exists with respect to any
ERISA Plan, whether or not waived by the Secretary of the
Treasury or his delegate, or (2) any Termination Event which
has a Material Adverse Effect occurs with respect to any ERISA
Plan and the then current value of such ERISA Plan's benefit
liabilities exceeds the then current value of such ERISA
Plan's assets available for the payment of such benefit
liabilities by more than $10,000,000 (or in the case of a
Termination Event involving the withdrawal of a substantial
employer, the withdrawing employer's proportionate share of
such excess exceeds such amount);
(h) any Designated Entity:
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(1) suffers the commencement of any involuntary
bankruptcy, reorganization, debt arrangement, winding
up, dissolution, official management or
administration, or other case or proceeding under any
bankruptcy or insolvency law or the entry against it
of a judgment, decree or order for relief by a court
of competent jurisdiction in such a case or
proceeding, which in either case remains undismissed
for a period of sixty (60) days; provided that each
Designated Entity hereby expressly authorizes each
Agent and each Lender to appear in any court
proceeding during such sixty (60) day period to
preserve, protect and defend their rights under the
Loan Documents;
(2) commences a voluntary case under any applicable
bankruptcy, insolvency or similar law now or
hereafter in effect, including, without limitation,
the United States Bankruptcy Code or the Corporations
Law of Australia, as from time to time amended; or
applies for or consents or acquiesces to the entry of
an order for relief in an involuntary case under any
such law, or becomes insolvent or makes a general
assignment for the benefit of creditors, or fails
generally to pay (or admits in writing its inability
to pay) its debts as such debts become due, or takes
corporate or other action to authorize any of the
foregoing;
(3) suffers the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee,
sequestrator, administrator or similar official of
all or a substantial part of its assets in a
proceeding brought against or initiated by it, and
such appointment is neither made ineffective nor
discharged within sixty (60) days after such event or
such appointment or taking possession is at any time
consented to, requested by, or acquiesced to by such
Designated Entity;
(4) suffers the entry against it of a final judgment for
the payment of money in excess of $20,000,000 (not
covered by insurance satisfactory to Administrative
Agent in its discretion), unless the same is
discharged within thirty (30) days after the date of
entry thereof or an appeal or appropriate proceeding
for review thereof is taken within such period and a
stay of execution pending such appeal is obtained and
continues; or
(5) suffers a writ or warrant of attachment or any
similar process to be issued by any court against all
or any substantial part of its property, and such
writ or warrant of attachment or any similar process
is not stayed or released within thirty (30) days
after the entry or levy thereof or after any stay is
vacated or set aside;
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(i) (a) any person (other than Borrower, a Restricted Subsidiary
of Borrower or any employee benefit plan of Borrower or any of
its Subsidiaries) or group (as such term is used in Section
13(d) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended) shall acquire, directly or indirectly, beneficial
ownership of an aggregate of 35% or more of the issued and
outstanding voting stock of Borrower or (b) during any period
of two consecutive years ending on or after the Effective
Date, as determined as of the last day of each calendar
quarter after the Effective Date, the individuals (the
"Incumbent Directors") who at the beginning of such period
constituted the Board of Directors of Borrower (other than
additions thereto or removals therefrom from time to time
thereafter approved by a vote of at least two-thirds of such
Incumbent Directors) shall cease for any reason to constitute
50% or more of the Board of Directors of Borrower; provided,
however, that for each determination period ending on or
before September 30, 1999, each determination period shall be
deemed to be a period from the Effective Date through the date
of such calculation;
(j) any of the Loan Documents are determined to be invalid or
unenforceable in any material respect;
(k) (1) any Restricted Subsidiary other than any Foreign
Restricted Subsidiary, and any of their respective
Restricted Subsidiaries fails to execute and deliver
to Collateral Agent a Guaranty of the type referred
to in clause (i) of the definition of "Guaranty",
within 30 days of becoming a Restricted Subsidiary;
(2) unless and to the extent that any Foreign Restricted
Subsidiary or any other Restricted Subsidiary is
prohibited from, or subject to adverse tax
consequences as a result of, guaranteeing the
Obligations under this Agreement (a) under Section
956 of the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time
("Section 956") (b) pursuant to contractual
restrictions in existence prior to the Effective Date
or (c) as a matter of corporate law, any Foreign
Restricted Subsidiary or any other Restricted
Subsidiary fails to execute and deliver to Collateral
Agent, a Guaranty of the type referred to in clause
(i) of the definition of "Guaranty" together with in
the case of any Foreign Restricted Subsidiary, a
notice in relation to such Guaranty or, in the case
of any Restricted Subsidiary subject to the
Corporation Laws of Australia, a certificate under
Section 206(6) of the Corporations Laws of Australia
in relation to such Guaranty, in each case (1) as
soon as practicable following the termination or
inapplicability of the contractual restrictions,
corporate law prohibitions and adverse tax
consequences referred to in this paragraph or (2) if
no such contractual restrictions,
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corporate law prohibitions and adverse tax
consequences apply, as soon as practicable following
a determination that such contractual restrictions,
corporate law prohibitions and adverse tax
consequences do not apply;
(l) unless and to the extent that (a) any such pledge or mortgage
would result in (i) substantial stamp or similar taxes or (ii)
adverse tax consequences pursuant to Section 956, (b) any such
pledge or mortgage is prohibited either (i) pursuant to
contractual restrictions in existence prior to the Effective
Date or (ii) as a matter of corporate law, or (c) a Guaranty
of the type referred to in clause (i) of the definition of
"Guaranty" has been executed and delivered by the Restricted
Subsidiary the capital stock or shares of which would
otherwise be subject to pledge or mortgage under this
paragraph, Borrower, or any Subsidiary of Borrower, owning
capital stock or shares of any Restricted Subsidiary of any
Foreign Restricted Subsidiary, fails (x) to execute and
deliver to Collateral Agent the Pledge Agreements, together
with sixty-five percent (65%) of all issued and outstanding
stock or shares of such Restricted Subsidiary or such Foreign
Restricted Subsidiary and stock powers or share transfers
executed in blank, together with a either a certificate under
Section 206 (6) of the Corporations Law of Australia or a
notice of the type described in Section 6.1(k)(2) hereof, in
each case in relation to such Pledge Agreement, as the case
may be and if applicable, as soon as practicable after the
termination or inapplicability of such contractual
restrictions and corporate law prohibitions and adverse tax
consequences referred to in this paragraph and (y) to repay
all Obligations and other amounts as soon as practical after
the termination or inapplicability of such contractual
restrictions and corporate law prohibitions and adverse tax
consequences referred to in this paragraph; or
(m) any Designated Entity, to the extent applicable, fails, (x)
promptly upon the reasonable request of the Managing Agents at
any time or from time to time prior to the applicable Stock
Pledge Release Date, as the case may be, (1) to execute,
acknowledge or deliver, or to cause to be executed,
acknowledged or delivered, or to register, record or file, or
to cause to be registered, recorded or filed, any document or
instrument necessary or advisable or as Required Lenders may
from time to time reasonably deem to be necessary or advisable
in connection with the grant, creation, preservation,
perfection or maintenance, as first, prior and perfected
Liens, the Liens created, or intended to be created, by the
applicable Security Instruments, subject only to Permitted
Liens or (2) to perform or to continue to perform at all times
and from time to time all actions necessary or advisable or
reasonably deemed to be necessary or advisable by the Required
Lenders in connection with such creation, preservation,
perfection and maintenance; and (y) to repay all Obligations
and other amounts as soon as
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practical after receipt of the reasonable request of Managing
Agents pursuant to the foregoing clause (x);
provided, however, that the foregoing events which affect only Restricted
Subsidiaries that (a) are not guarantors of the Obligations, and (b) are
immaterial (as determined by the Managing Agents), shall not constitute "Events
of Default" under this Agreement. It is agreed by the parties hereto that so
long as Borrower or any Restricted Subsidiary has made reasonable efforts under
the circumstances to obtain the approvals required by Section 205(10) of the
Corporations Law of Australia (if applicable), the foregoing paragraphs (k)(2),
(l) and (m) shall not require any Restricted Subsidiaries to provide any pledge
or guaranty prohibited by corporate law unless the requirements of such Section
205(10) of the Corporations Law of Australia, to the extent applicable, have
been satisfied; and
(k) Any "Event of Default" as defined in the Canadian Credit
Facility or the Primary Credit Facility shall occur; provided
that the occurrence of a "Default" as defined in the Canadian
Credit Facility or the Primary Credit Facility shall
constitute a Default under this Agreement; provided further
that if such "Default" is cured or waived under the Canadian
Credit Facility or the Primary Credit Facility, as applicable,
then such "Default" shall no longer constitute a Default under
this Agreement.
Upon the occurrence of an Event of Default described in Section 6.1(h)(1), (2)
or (3) with respect to Borrower, the Commitments shall automatically terminate
and all of the Obligations shall thereupon be immediately due and payable,
without demand, presentment, notice of demand or of dishonor and nonpayment,
protest, notice of protest, notice of intention to accelerate, declaration or
notice of acceleration, or any other notice or declaration of any kind, all of
which are hereby expressly waived by Borrower and each Designated Entity who at
any time ratifies or approves this Agreement. During the continuance of any
other Event of Default, Administrative Agent at any time and from time to time
upon written instructions from Required Lenders (which, for purposes of this
sentence only, shall be determined giving effect to each Lender's outstanding
Swing Line Advances and Competitive Bid Advances) shall, by notice to Borrower
(but otherwise without notice to any other Designated Entity), declare the
Commitments to be terminated, and/or declare any or all of the Obligations
immediately due and payable, and all such Obligations shall thereupon be
immediately due and payable, without demand, presentment, notice of demand or
of dishonor and nonpayment, protest, notice of protest, notice of intention to
accelerate, declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly waived by Borrower
and each Designated Entity who at any time ratifies, approves or guaranties
this Agreement.
Section 6.2 Remedies. If any Default shall occur and be
continuing, each Lender or Administrative Agent on behalf of Lenders may
protect and enforce its rights under the Loan
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Documents by any appropriate proceedings, including, without limitation,
proceedings for specific performance of any covenant or agreement contained in
any Loan Document, and each Lender may enforce the payment of any Obligations
due it or enforce any other legal or equitable rights which it may have.
Additionally, under such circumstances, the Required Lenders or, at the
direction of Required Lenders, the Trustee (or Collateral Agent) may proceed to
protect the Lenders' rights under the Security Instruments. All rights,
remedies and powers conferred upon Administrative Agent and Lenders under the
Loan Documents are cumulative and not exclusive of any other rights, remedies
or powers available under the Loan Documents or at law or in equity.
Section 6.3 Annulment of Acceleration. If a declaration of
acceleration is made pursuant to this Article 6, then Required Lenders, by
written notice to Borrower and Administrative Agent, may collectively rescind
and annul such declaration in its entirety; provided, that at the time such
declaration is annulled and rescinded: (a) no judgment or decree has been
entered for the payment of any moneys due pursuant to any Note or this
Agreement; (b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and this Agreement (other than principal amounts which
may have become due as a result of acceleration), including interest upon
overdue interest, to the extent payment thereof is lawful, shall have been duly
paid; and (c) each and every other Event of Default which has theretofore
occurred shall have been waived pursuant to Section 8.1 or otherwise made good
or cured.
Section 6.4 Indemnity. Borrower hereby indemnifies each Agent and
each Lender, from and against any and all liabilities, obligations, claims,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements (including reasonable fees of attorneys, accountants, experts and
advisors) of any kind or nature whatsoever (in this Section collectively called
"liabilities and costs") which to any extent (in whole or in part) may be
imposed on, incurred by, or asserted against such Agent or such Lender as a
result of, arising out of, relating to or in connection with:
(a) the Loan Documents to which Borrower or one or more of its
Subsidiaries is a party or the rights provided therein
(including the enforcement or defense thereof);
(b) the direct or indirect application or proposed application of
the proceeds of any Loan to or for Borrower or any of its
Subsidiaries;
(c) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan to
or for Borrower or any of its Subsidiaries;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter
(including enforcement) relating to any
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Environmental Law or the condition of any facility or property
owned, leased or operated by Borrower or any of its
Subsidiaries; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from,
any facility owned or operated by Borrower or any of its
Subsidiaries of any hazardous or toxic substance (including
any liabilities and costs under any Environmental Law),
regardless of whether caused by, or within the control of,
Borrower or any of its Subsidiaries; or any misrepresentation,
inaccuracy or any breach in or of Section 4.1(j) or Section
5.1(i) by or with respect to Borrower or any of its
Subsidiaries.
The foregoing indemnification shall not apply to the extent such liabilities
and costs are determined to have resulted or been caused, in whole or in part,
by the gross negligence or willful misconduct on the part of such Agent or
Lender. THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH
LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN
PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND EXCEPT AS PROVIDED BY THE
IMMEDIATELY PRECEDING SENTENCE. In the event that any claim or demand for
which Borrower would be liable to any Agent or any Lender under this Section is
asserted against or sought to be collected from any Agent or any Lender by a
third party, Agent or such Lender shall promptly notify Borrower of such claim
or demand. Borrower shall have the lesser of: (i) thirty (30) Business Days
from receipt of the above notice; or (ii) three (3) Business Days prior to the
expiration of any period after which a default judgment may be entered against
such Agent or Lender (the "Notice Period") to notify such Agent and/or Lender
whether or not Borrower desires, at the sole cost and expense of Borrower, to
defend such Agent and/or Lender against such claim or demand. In the event
that Borrower notifies such Agent and/or Lender within the Notice Period, that
it desires to defend such Agent and/or Lender against such claim or demand,
Borrower shall have the right to settle or otherwise dispose of such claim or
demand (other than claims alleging criminal violations) on such terms as
Borrower, with the consent of the indemnified party (which consent shall not be
unreasonably withheld) shall deem appropriate; provided that:
(w) counsel designated by Borrower is reasonably
acceptable to the Managing Agents and the affected
Lender;
(x) Borrower will have acknowledged in writing that this
Section will cover any liabilities and costs in any
such claim or demand;
(y) in the sole determination of the Managing Agents and
the affected Lender, Borrower will have the financial
ability to pay such liabilities and costs; and
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(z) Borrower shall thereafter consult with the Managing
Agents and the affected Lender with respect to such
claim or demand; and
provided further, that each of Agents and the affected Lender shall have the
right at all times to participate in any proceeding, at their sole cost and
expense, subject, however, to Borrower's right to control the defense of all
proceedings concerning such claim or demand.
In the event that Borrower fails to give such Agent and/or Lender such notice,
such Agent and/or Lender may defend against such claim or demand; provided,
however, that Borrower's obligation to reimburse such Agent and/or Lender shall
be limited to a single law firm of such Agent and/or Lender (unless Borrower
otherwise consents, which consent shall not be unreasonably withheld); provided
further, that Borrower shall have the right at all times to participate in any
such proceeding, at its sole cost and expense, subject, however, to the right
of such Agent and/or Lender to control the defense of all proceedings
concerning such claim or demand. As used in this Section, the terms "Agent"
and "Lender" shall refer not only to the Persons designated as such in Section
1.1 but also to each director, officer, agent, attorney, employee and
representative of such Person.
ARTICLE 7
AGENTS
Section 7.1 Appointment and Authority. NationsBank of Texas,
N.A. is hereby appointed Administrative Agent hereunder and under each other
Loan Document, CIBC Inc. is hereby appointed Documentation Agent hereunder and
under each other Loan Document, Morgan Guaranty Trust Company of New York is
hereby appointed Documentation Agent hereunder and under each other Loan
Document and The Chase Manhattan Bank is hereby appointed Syndication Agent
hereunder and under each other Loan Document, each Co-Agent is hereby appointed
Co-Agent hereunder and under each other Loan Document, and each of the Lenders
hereby authorizes each such Agent to act as the agent of such Lender hereunder
and each other Loan Document to the extent provided herein or therein. In
addition, each Lender hereby irrevocably authorizes Administrative Agent, and
Administrative Agent hereby undertakes, to receive payments of principal,
interest due hereunder as specified herein and to act as Collateral Agent under
the Security Instruments. In addition, each Lender hereby authorizes each
Agent, and each Agent hereby undertakes to take all other actions and to
exercise such powers under the Loan Documents as are specifically delegated to
such Agent by the terms hereof or thereof, together with all other powers
reasonably incidental thereto. No Co-Agent has any duties or responsibilities
whatsoever as Co-Agent (as opposed to its capacity as Lender) under or in
connection with this Agreement or any of the Loan Documents. The relationship
of each Agent to Lender is only that of one commercial bank acting as
administrative agent for others, and nothing in the Loan Documents shall be
construed to
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constitute any Agent a trustee or other fiduciary for any holder of any of the
Notes or of any participation therein, nor to impose on any Agent duties and
obligations other than those expressly provided for in the Loan Documents.
None of the Agents shall have implied duties to Lenders, or any obligations to
Lenders to take any action under the Loan Documents, except any action by an
Agent specifically provided by the Loan Documents to be taken by such Agent.
With respect to any matters not expressly provided for in the Loan Documents
and any matters which the Loan Documents place within the discretion of any
Agent, such Agent shall not be required to exercise any discretion or take any
action, and each such Agent may request instructions from Lenders with respect
to any such matter, in which case such Agent shall be required to act or to
refrain from acting (and shall be fully protected and free from liability to
any and all Lenders and Agents in so acting or refraining from acting) upon the
instructions of Required Lenders (including itself); provided, however, that no
Agent shall be required to take any action which exposes it to a risk of
personal liability that it considers unreasonable or which is contrary to the
Loan Documents or to applicable law unless indemnified to its satisfaction by
Lenders or Borrower. Upon receipt by Administrative Agent from Borrower of any
communication calling for action on the part of Lenders or upon notice from any
Lender to Administrative Agent of any Default or Event of Default,
Administrative Agent shall promptly notify each Lender thereof.
Section 7.2 Agent's Reliance. No Agent or any of their
respective directors, officers, agents, attorneys, or employees shall be liable
for any action taken or omitted to be taken by any of them under or in
connection with the Loan Documents, including their negligence of any kind,
except that each shall be liable for its own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, each Agent:
(a) may treat the payee of any Note as the holder thereof until
Administrative Agent receives written notice of the assignment
or transfer thereof in accordance with this Agreement, signed
by such payee and in form satisfactory to Administrative
Agent;
(b) may consult with legal counsel (including counsel for
Borrower), independent public accountants and other experts
selected by such Agent and shall not be liable for any action
taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts;
(c) makes no warranty or representation to any Lender or to any
other Agent and shall not be responsible to any Lender or
Agent for any statements, warranties or representations made
in or in connection with the Loan Documents by any other
Person;
(d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or
conditions of the Loan Documents
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on the part of any Designated Entity or to inspect the
property (including the books and records) of any Designated
Entity;
(e) shall not be responsible to any Lender or to any other Agent
for the due execution (other than its own due execution and
delivery), legality, validity, enforceability, genuineness,
existence, sufficiency or value of any Loan Document, the
Credit Facility Agreement or any instrument or document
furnished in connection herewith, or any collateral;
(f) may rely upon the representations and warranties of any
Designated Entity and the Lenders in exercising its powers
hereunder;
(g) shall not be responsible for the satisfaction of any condition
specified in Article 3, except receipt by an Agent of items
required to be delivered to such Agent; and
(h) shall incur no liability under or in respect of the Loan
Documents by acting upon any notice, consent, certificate or
other instrument or writing (including any telecopy, telegram,
cable or telex) believed by it to be genuine and signed or
sent by the proper Person or Persons.
Section 7.3 Lenders' Credit Decisions. Each Lender acknowledges
that it has, independently and without reliance upon any Agent or any other
Lender, made its own analysis of Designated Entities and the transactions
contemplated hereby and its own independent decision to enter into this
Agreement and the other Loan Documents. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents.
Section 7.4 Indemnification. Each Lender agrees to indemnify
each Agent (to the extent not reimbursed by Borrower within ten (10) days after
demand) from and against such Lender's Percentage Share of any and all
liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (including reasonable fees
of attorneys, accountants, experts, and advisors) of any kind or nature
whatsoever (in this Section collectively called "liabilities and costs") which
to any extent (in whole or in part) may be imposed on, incurred by, or asserted
against such Agent growing out of, resulting from or in any other way
associated with any of the Loan Documents and the transactions and events
(including, without limitation, the enforcement thereof) at any time associated
therewith or contemplated therein. THE FOREGOING INDEMNIFICATION SHALL APPLY
WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT
CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR
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OMISSION OF ANY KIND BY ANY AGENT, PROVIDED ONLY THAT NO LENDER SHALL BE
OBLIGATED UNDER THIS SECTION TO INDEMNIFY AN AGENT FOR THAT PORTION, IF ANY, OF
ANY LIABILITIES AND COSTS WHICH IS THE SOLE RESULT OF SUCH AGENT'S OWN
INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS DETERMINED IN A FINAL
JUDGMENT OF A COURT OF COMPETENT JURISDICTION. Cumulative of the foregoing,
each Lender agrees to reimburse Administrative Agent, each Documentation Agent
and Syndication Agent promptly upon demand for such Lender's Percentage Share
of any costs and expenses to be paid to Administrative Agent, the Documentation
Agent or the Syndication Agent by Borrower under Section 5.1(h) to the extent
that Administrative Agent, the Documentation Agent or the Syndication Agent is
not timely reimbursed for such expenses by Borrower as provided in such
section. As used in this Section the term "Agents" shall refer not only to the
Person(s) designated as such in Section 1.1 but also to each director, officer,
agent, attorney, employee and representative of such Person(s).
Section 7.5 Rights as Lender. In their respective capacity as a
Lender, each Agent shall have the same rights and obligations as any Lender and
may exercise such rights as though it were not an Agent. Each Agent may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with any of Designated Entities or their
Affiliates, all as if it were not an Agent hereunder and without any duty to
account therefor to any other Lender.
Section 7.6 Sharing of Set-Offs and Other Payments. Each Agent
and Lender agrees that if it shall, whether through the exercise of rights
under security documents or rights of banker's lien, setoff, or counterclaim
against any Designated Entity or otherwise, obtain payment of a portion of the
aggregate Obligations owed to it (other than in respect of its Swing Line
Advances and its Competitive Bid Advances) which, taking into account all
distributions made by Administrative Agent under Section 2.11, causes such
Agent or such Lender to have received more than it would have received had such
payment been received by Administrative Agent and distributed pursuant to
Section 2.11 (or, in the case of Swing Line Advances paid as provided in
Section 2.5(c) or in the case of Competitive Bid Advances paid as provided in
Section 2.22(b)), then it shall be deemed to have simultaneously purchased and
shall be obligated to purchase interests in the Obligations as necessary to
cause Administrative Agent and all Lenders to share all payments (other than in
respect of Swing Line Advances and Competitive Bid Advances) as provided for in
Section 2.11, and such other adjustments shall be made from time to time as
shall be equitable to ensure that all Agents and all Lenders share all payments
of Obligations (other than in respect of its Swing Line Advances and
Competitive Bid Advances) as provided in Section 2.11. If any Agent or any
Lender, whether in connection with setoff of amounts which might be subject to
setoff or otherwise, receives collateral or other protection for its
Obligations or such amounts which might be subject to setoff, such Agent or
Lender agrees, promptly upon demand, to take such action necessary so that all
Agents and all Lenders share in the benefits of such collateral ratably in
proportion to
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the Obligations owing to each of them. Nothing herein contained shall in any
way affect the right of any Agent or any Lender to obtain payment (whether by
exercise of rights of banker's lien, set-off or counterclaim or otherwise) of
indebtedness other than the Obligations. Borrower expressly consents to the
foregoing arrangements and agrees that any holder of any such interest or other
participation in the Obligations, whether or not acquired pursuant to the
foregoing arrangements, may to the fullest extent permitted by law exercise any
and all rights of banker's lien, set-off, or counterclaim as fully as if such
holder were a holder of the Obligations in the amount of such interest or other
participation. If all or any part of any funds transferred pursuant to this
Section is thereafter recovered from the seller under this Section which
received the same, the purchase provided for in this Section shall be deemed to
have been rescinded to the extent of such recovery, together with interest, if
any, if interest is required pursuant to court order to be paid on account of
the possession of such funds prior to such recovery.
Section 7.7 Investments. Whenever Administrative Agent in good
faith determines that it is uncertain about how to distribute to Lenders any
funds which it has received, or whenever Administrative Agent in good faith
determines that there is any dispute among Lenders about how such funds should
be distributed, Administrative Agent may choose to defer distribution of the
funds which are the subject of such uncertainty or dispute. If Administrative
Agent in good faith believes that the uncertainty or dispute will not be
promptly resolved, or if Administrative Agent is otherwise required to invest
funds pending distribution to Lenders, Administrative Agent may invest such
funds pending distribution (at the risk of the subject Borrower); all interest
on any such investment shall be distributed upon the distribution of such
investment and in the same proportion and to the same Persons as such
investment. All moneys received by Administrative Agent for distribution to
Lenders (other than to the Person who is Administrative Agent in its separate
capacity as a Lender) shall be held by Administrative Agent pending such
distribution solely as Administrative Agent for such Lenders, and
Administrative Agent shall have no equitable title to any portion thereof.
Section 7.8 Benefit of Article 7. The provisions of this Article
(other than the following Section 7.9) are intended solely for the benefit of
Agent and Lenders, and no Designated Entity shall be entitled to rely on any
such provision or assert any such provision in a claim or defense against Agent
or any Lender. Agent and Lenders may waive or amend such provisions as they
desire without any notice to or consent of any Designated Entity.
Section 7.9 Resignation and Removal. Any Agent may resign at any
time by giving written notice thereof to Lenders and Borrower. Each such
notice shall set forth the date of such resignation. Majority Lenders or
Borrower, with the consent (which shall not be unreasonably withheld) of
Majority Lenders (other than Agent to be removed) shall be entitled to remove
any Agent. Upon any such resignation or removal, Borrower may, with the
written concurrence (which shall not be unreasonably withheld) of Majority
Lenders (exclusive of any such resigned or removed Agent), designate a
successor Agent. If, within fifteen (15) days
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after the date of such resignation or removal, Borrower makes no such
designation or such written concurrence is not given, Majority Lenders
(exclusive of any such resigned or removed Agent) shall, with the consent of
Borrower (which consent shall not be unreasonably withheld or delayed), have
the right to appoint a successor Agent. A successor must be appointed for any
retiring Managing Agent, and such Managing Agent's resignation shall become
effective when such successor accepts such appointment. Upon the acceptance of
any appointment as a Managing Agent hereunder by a successor Managing Agent and
the satisfaction of all obligations on the part of such retiring or removed
Managing Agent necessary to facilitate succession, the retiring or removed
Managing Agent, as the case may be, shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. After any
Agent's resignation or removal hereunder, the provisions of this Article 7
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under the Loan Documents. Any out-going Agent
shall promptly execute all assignments and other documents necessary to
effectuate the transfer of the agency in connection with this Agreement and
shall promptly deliver all original documents and any collateral in its
possession to the successor Agents.
ARTICLE 8
MISCELLANEOUS
Section 8.1 Waivers and Amendments. No failure or delay (whether
by course of conduct or otherwise) by any Agent or any Lender in exercising any
right, power or remedy which any Agent or Lender may have under any of the Loan
Documents shall operate as a waiver thereof or of any other right, power or
remedy, nor shall any single or partial exercise by any Agent or Lender of any
such right, power or remedy preclude any other or further exercise thereof or
of any other right, power or remedy. No waiver of any provision of any Loan
Document and no consent to any departure therefrom shall ever be effective
unless it is in writing and signed as provided below in this Section, and then
such waiver or consent shall be effective only in the specific instances and
for the purposes for which given and to the extent specified in such writing.
No notice to or demand on any Designated Entity shall in any case of itself
entitle any Designated Entity to any other or further notice or demand in
similar or other circumstances. This Agreement and the other Loan Documents
set forth the entire understanding between the parties hereto with respect to
the transactions contemplated herein and therein and supersede all prior
discussions and understandings with respect to the subject matter hereof and
thereof, and no waiver, consent, release, modification or amendment of or
supplement to this Agreement or the other Loan Documents shall be valid or
effective against any party hereto unless the same is in writing and signed by
(a) if such party is a Designated Entity, by such Designated Entity, (b) if
such party is an Agent, by such Agent and (c) if such party is a Lender, by
such Lender or by Administrative Agent on behalf of Lenders with the written
consent of Required Lenders (or without further consent than that already
provided herein in the circumstances provided in Section 8.7). Notwithstanding
the foregoing or
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anything to the contrary herein or in any other Loan Document, no Agent shall,
without the prior consent of each Lender, execute and deliver on behalf of any
Lender any waiver or amendment which would:
(i) increase the Commitment of such Lender or subject such Lender
to any additional obligations;
(ii) reduce or forgive any fees hereunder, or the principal of, or
interest on, such Lender's Notes;
(iii) postpone any date fixed for any payment of any fees hereunder,
or principal of, or interest on, such Lender's Notes;
(iv) amend the definitions herein of "Required Lenders" or
"Majority Lenders" or otherwise change the aggregate amount of
Percentage Shares which is required for Administrative Agent,
any other Agent, Lenders or any of them to take any particular
action under the Loan Documents;
(v) release collateral (except as expressly contemplated by this
Agreement) or any Borrower from its obligation to pay such
Lender's Notes or any Restricted Subsidiary from its Guaranty
(except upon the Restricted Subsidiary becoming an
Unrestricted Subsidiary as specified in this Agreement);
(vi) amend this Section 8.1;
(vii) extend the Loan Commitment Period;
(ix) amend, modify or waive any provision applicable to the
indemnification of any Lender;
(x) consent to the assignment or transfer by any Designated Entity
of any of its rights or obligations under this Agreement or
the other Loan Documents; or
(xi) amend, modify or waive the rights and obligations of the
Agents; provided, that no obligation to any Designated Entity
of any Lender or any Agent may be amended, modified or waived
without the written approval of Borrower, which approval shall
not be unreasonably withheld.
Notwithstanding the foregoing or anything to the contrary herein or in
any other Loan Document, no provision of Article 7 may be amended in any way
which impacts or affects any Agent in its capacity as an Agent (as opposed to
its capacity as a Lender) without the prior written consent of such Agent.
Except as provided in the preceding three sentences or as
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expressly provided in any Loan Document, the Required Lenders may waive,
modify, amend or supplement this Agreement and each of the other Loan
Documents.
Section 8.2 Survival of Agreements; Cumulative Nature. Each
Designated Entity's various representations, warranties, covenants, indemnities
and agreements in the Loan Documents shall survive the execution and delivery
of this Agreement and the other Loan Documents and the performance hereof and
thereof, including the making or granting of the Loans and the delivery of the
Notes, and the other Loan Documents, and shall further survive until all of the
Obligations are paid in full to Agents and Lenders and all of Agents' and
Lenders' obligations to Borrower are terminated, provided that, notwithstanding
the foregoing, certain Obligations of certain Designated Entities under their
respective Guaranties shall survive or be reinstated as provided in such
Guaranties. The representations, warranties, indemnities, and covenants made
by any Designated Entity in any Loan Documents, and the rights, powers, and
privileges granted to Agents and Lenders in the Loan Documents, are cumulative.
Section 8.3 Notices. All notices, requests, consents, demands
and other communications required or permitted under any Loan Document shall be
in writing, unless otherwise specifically provided in such Loan Document
(provided that Administrative Agent may give telephonic notices to the other
Agents and Lenders), and shall be deemed sufficiently given or furnished if
delivered by personal delivery, by telecopy (with telephonic confirmation of
transmission), by delivery service with proof of delivery, or by registered or
certified United States mail, postage prepaid, to Borrower at the address of
Borrower specified on the signature pages hereto and to each Agent and each
Lender at their addresses specified on the signature pages hereto (unless
changed by similar notice in writing given by the particular Person whose
address is to be changed). Any such notice or communication shall be deemed to
have been given:
(a) in the case of personal delivery or delivery service, as of
the date of first attempted delivery during normal business
hours at the address provided herein;
(b) in the case of telecopy, upon receipt; or
(c) in the case of registered or certified United States mail,
three (3) days after deposit in the mail, postage prepaid;
provided, however, that no Request for Advance or Rate
Election shall become effective until actually received by
Administrative Agent.
Section 8.4 Parties in Interest. All grants, covenants and
agreements contained in the Loan Documents shall bind and inure to the benefit
of the parties thereto and their respective successors and assigns; provided,
however, that no Designated Entity may assign or
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transfer any of its rights or delegate any of its duties or obligations under
any Loan Document without the prior written consent of all Lenders.
Section 8.5 Governing Law. THE LOAN DOCUMENTS SHALL BE DEEMED
CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS OF THE STATE OF TEXAS AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. CHAPTER 15 OF TEXAS REVISED CIVIL STATUTES
ANNOTATED ARTICLE 5069 (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS
AND REVOLVING TRI-PARTY ACCOUNTS) DOES NOT APPLY TO THIS AGREEMENT OR TO THE
NOTES.
Section 8.6 Limitation on Interest. It is the intention of the
parties hereto to conform strictly to applicable usury laws and, anything
herein or any other Loan Document to the contrary notwithstanding, the
obligations of Designated Entities to a Lender or an Agent under this Agreement
and the Loan Documents shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt thereof would be
contrary to provisions of law applicable to such Lender or Agent limiting rates
of interest which may be charged or collected by such Lender or Agent.
Accordingly, if the transactions contemplated hereby would be usurious under
laws applicable to a Lender or Agent (including the federal and state laws of
the United States of America or of any other jurisdiction whose laws may be
mandatorily applicable to such Lender or Agent notwithstanding anything to the
contrary in this Agreement or any other Loan Document) then, in that event,
notwithstanding anything to the contrary in this Agreement or any other Loan
Document, it is agreed as follows:
(a) the provisions of this Section shall govern and control;
(b) the aggregate of all consideration which constitutes interest
under applicable law that is contracted for, taken, reserved,
charged or received under this Agreement, or under any of the
aforesaid agreements or otherwise in connection with this
Agreement or any other Loan Document by such Lender or Agent
shall under no circumstances exceed the maximum amount of
interest allowed by applicable law (such maximum lawful
interest rate, if any, with respect to each Lender and each
Agent herein called the "Maximum Lawful Rate"), and any excess
shall be canceled automatically and if theretofore paid shall
be credited to the relevant Designated Entity by such Lender
or Agent (or, if such consideration shall have been paid in
full, such excess refunded to the relevant Designated Entity);
(c) all sums paid, or agreed to be paid, to such Lender or Agent
for the use, forbearance and detention of the indebtedness of
the relevant Designated Entity
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to such Lender or Agent hereunder or under any other Loan
Document shall, to the extent permitted by laws applicable to
such Lender or Agent, as the case may be, be amortized,
prorated, allocated and spread throughout the full term of
such indebtedness until payment in full so that the actual
rate of interest is uniform throughout the full term thereof;
(d) if at any time the interest provided pursuant to any provision
of this Agreement or any other Loan Document, together with
any other fees payable pursuant to this Agreement or any other
Loan Document and deemed interest under laws applicable to
such Lender or Agent, exceeds the amount which would have
accrued at the Maximum Lawful Rate, the amount of interest and
any such fees to accrue to such Lender or Agent pursuant to
this Agreement or any other Loan Document shall be limited,
notwithstanding anything to the contrary in this Agreement or
any other Loan Document, to that amount which would have
accrued at the Maximum Lawful Rate, but any subsequent
reductions, as applicable, shall not reduce the interest to
accrue to such Lender or Agent pursuant to this Agreement or
any other Loan Document below the Maximum Lawful Rate until
the total amount of interest accrued pursuant to this
Agreement or such other Loan Document, as the case may be, and
such fees deemed to be interest equals the amount of interest
which would have accrued to such Lender or Agent if a varying
rate of interest per annum equal to the interest provided
pursuant to Section 2.3 or any other relevant Section hereof
(other than this Section) and the Notes, as applicable, had at
all times been in effect, plus the amount of fees which would
have been received but for the effect of this Section; and
(e) if the total amount of interest paid by or accrued with
respect to the Obligations of Borrower, together with any
other fees payable pursuant to this Agreement and the other
Loan Documents and deemed interest under laws applicable to
such Lender or Agent pursuant to this Agreement or any other
Loan Document under the foregoing provisions of this Section
is less than the total amount of interest which would have
accrued if a varying rate per annum equal to the interest
provided pursuant to Section 2.3 or any other relevant section
hereof (other than this Section), as applicable, had at all
times been in effect and all fees provided for in this
Agreement and the other Loan Documents had been paid, then
Borrower severally agrees to pay to such Lender or Agent an
amount equal to the difference between, (i) the lesser of, (x)
the amount of interest and fees which would have accrued if
the Maximum Lawful Rate had at all times been in effect, and
(y) the amount of interest and fees which would have accrued
if a varying rate per annum equal to the interest provided
pursuant to Section 2.3 or such other relevant section of this
Agreement (other than this Section) and the Notes, as
applicable, had at all times been in effect and all fees had
been
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paid, and (ii) the amount of interest and fees accrued in
accordance with the other provisions of this Agreement and
other Loan Documents.
For purposes of Chapter 1D of Article 5069 of the Texas Credit Title,
Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article
5069-1.04, Vernon's Texas Civil Statutes, as amended), to the extent, if any,
applicable to any Lender or Agent, Borrower and each other Designated Entity
agrees that the Maximum Lawful Rate shall be the "applicable interest rate
ceiling" as defined in said Chapter, provided that such Lender or Agent, as
applicable, may also rely, to the extent permitted by applicable laws of the
State of Texas and the United States of America, on alternative maximum rates
of interest under other laws applicable to such Lender or Agent from time to
time if greater.
Section 8.7 Termination; Limited Survival. In its sole and
absolute discretion, Borrower may, at any time that no Obligations or other
amounts are owing, elect to terminate this Agreement in a written notice
delivered to Administrative Agent. Upon receipt by Administrative Agent of
such a notice, if no Obligations or other amounts are then owing, this
Agreement and all other Loan Documents shall thereupon be terminated and the
parties thereto released from all prospective obligations hereunder or
thereunder. Notwithstanding the foregoing or anything herein to the contrary,
any waivers or admissions made by any Designated Entity in any Loan Document,
any Obligations under Sections 2.16 through 2.20, any obligations which any
Designated Entity may have to indemnify or compensate any Agent, or any Lender
in connection with matters arising upon or prior to the termination of this
Agreement and any obligations which any Lender may have to indemnify or
compensate any Agent in connection with matters arising upon or prior to the
termination of this Agreement shall survive any termination of this Agreement
or any other Loan Document and the release of Designated Entities. At the
request and expense of Borrower, Managing Agents shall prepare and execute all
necessary instruments to reflect and effect such termination of the Loan
Documents including, without limitation, the Security Instruments. Managing
Agents are hereby authorized, jointly and severally, to execute all such
instruments on behalf of all Lenders, without the joinder of or further action
or consent by any Lender.
Section 8.8 Assignments; Participations.
(a) Each Lender shall have the right to sell, assign or transfer
all or any part of such Lender's Notes, Loans and Commitments
hereunder to one or more Affiliates, Lenders, financial
institutions, pension plans, investment funds, or similar
Persons or to a Federal Reserve Bank; provided, that in
connection with each sale, assignment or transfer (other than
to an Affiliate, a Lender or a Federal Reserve Bank), the
applicable Lender will consider the opinion and recommendation
of Borrower, which opinion and recommendation shall in no way
be binding upon such Lender, and each such sale, assignment,
or transfer (other than to an Affiliate, a Lender or a Federal
Reserve Bank) shall be with
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the consent of Borrower (unless an Event of Default has
occurred and is continuing), which consent will not be
unreasonably withheld, and with the consent of Administrative
Agent, which consent will not be unreasonably withheld, and
the assignee, transferee or recipient shall have, to the
extent of such sale, assignment, or transfer, the same rights,
benefits and obligations as it would if it were such Lender
and a holder of such Notes and Commitments, including, without
limitation, the right to vote on decisions requiring consent
or approval of all Lenders, Majority Lenders or Required
Lenders and the obligation to fund its Loans; provided
further, that (1) each Lender in making each such sale,
assignment, or transfer must sell, assign or transfer a pro
rata portion of its Commitments and each Loan (other than a
Swing Line Advance or a Competitive Bid Advance) made or held
by such Lender, (2) each such sale, assignment, or transfer
(other than to an Affiliate, a Lender or a Federal Reserve
Bank) shall be in an aggregate principal amount not less than
$10,000,000, (3) each remaining Lender shall at all times
maintain Commitments then outstanding in an aggregate
principal amount at least equal to $10,000,000; (4) no Lender
may offer to sell its Notes, Commitments or Loans or interests
therein in violation of any securities laws; and (5) no such
assignments (other than to a Federal Reserve Bank) shall
become effective until the assigning Lender delivers to
Administrative Agent and Borrower copies of all written
assignments and other documents evidencing any such assignment
and an Agreement to be Bound in the form of Exhibit L,
providing for the assignee's ratification and agreement to be
bound by the terms of this Agreement and the other Loan
Documents. An assignment fee in the amount of $3,500 for each
such assignment (other than to an Affiliate, a Lender or a
Federal Reserve Bank) will be payable to Administrative Agent
by assignor or assignee. Within five (5) Business Days after
its receipt of copies of any assignment and the other
documents relating thereto and the following described Notes,
Borrower shall execute and deliver to Administrative Agent
(for delivery to the relevant assignee) new Notes evidencing
such assignee's assigned Loans and Commitments and if the
assignor Lender has retained a portion of its Loans,
replacement Notes in the principal amount of the Loans and
Commitments retained by the assignor Lender (except as
provided in the last sentence of this paragraph (a) such Notes
to be in exchange for, but not in payment of, the Notes held
by such Lender). On and after the effective date of an
assignment hereunder, the assignee shall for all purposes be a
Lender, party to this Agreement and any other Loan Document
executed by the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same
extent as if it were an original party thereto, and no further
consent or action by Borrower, Lenders or any Agent shall be
required to release the transferor Lender, with respect to the
Commitments and the Loans assigned to such assignee and the
transferor Lender shall henceforth be so released.
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(b) Each Lender shall have the right to grant participations in
all or any part of such Lender's Notes, Commitments, and Loans
hereunder to one or more pension plans, investment funds,
financial institutions or other Persons; provided, that:
(1) each Lender granting a participation shall retain the
right to vote hereunder, and no participant shall be
entitled to vote hereunder on decisions requiring
consent or approval of Lenders, Majority Lenders or
Required Lenders (except as set forth in (3) below);
(2) in the event any Lender grants a participation
hereunder, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto
for the performance of such obligations, such Lender
shall remain the holder of any such Notes for all
purposes under the Loan Documents, and each Agent,
each Lender and Borrower shall be entitled to deal
with the Lender granting a participation in the same
manner as if no participation had been granted; and
(3) no participant shall ever have any right by reason of
its participation to exercise any of the rights of
Lenders hereunder, except that any Lender may agree
with any participant that such Lender will not,
without the consent of such participant (which
consent may not be unreasonably withheld), consent to
any amendment or waiver described in Section 8.1
requiring approval of 100% of the Lenders.
(c) It is understood and agreed that any Lender may provide to
assignees and participants and prospective assignees and
participants financial information and reports and data
concerning Borrower's properties and operations which was
provided to such Lender pursuant to this Agreement, subject to
Section 8.9.
(d) Upon the reasonable request of either of the Managing Agents
or Borrower, each Lender will identify those to whom it has
assigned or participated any part of its Notes or Loans, and
provide the amounts so assigned or participated.
Section 8.9 Confidentiality. Each Agent and each Lender agrees
that it (a) will maintain the confidentiality of all non-public information
from any Designated Entity or any Subsidiary of Borrower obtained pursuant to
the terms of this Agreement or any other Loan Document in accordance with safe
and sound banking practices, and (b) will not use such confidential information
for any purpose other than in connection with this Agreement; provided,
however, that this restriction shall not apply to information which (w) has at
the particular time in question entered the public domain, or been
independently developed without the use or incorporation of any non-public
information provided to such Agent or Lender by
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any Designated Entity or any Subsidiary of Borrower by such Agent or such
Lender other than through disclosure by such Agent or such Lender in violation
of this Section, (x) is required to be disclosed by law or by any order, rule,
regulation or legal process (whether valid or invalid) of any court or
Governmental Authority, (y) is furnished to any other Lender or to any
purchaser or prospective purchaser of participations, assignments or other
interests in any Loan, Note or Commitment that has executed and delivered to
Borrower an agreement containing terms substantially similar to this Section
and reasonably acceptable to Borrower, to keep such information confidential or
(z) is disclosed to such Lender's or Agent's examiners, Affiliates, outside
auditors, counsel and other professional advisors who have a need for such
information in connection with this Agreement and who are advised of the
confidential nature of such information. As used in this Section, the terms
"Agent" and "Lender" shall refer not only to the Persons designated as such in
Section 1.1, but also to each director, Affiliate, officer, agent, attorney,
employee and representative of such Person. Notwithstanding any other
provisions of this Agreement, the terms of this Section shall survive the
termination of this Agreement for a period of three (3) years.
Section 8.10 Severability. If any term or provision of any Loan
Document shall be determined to be illegal or unenforceable in any
jurisdiction, such term or provision shall, as to such jurisdiction, be illegal
or unenforceable, without affecting the remaining provisions in that
jurisdiction or the legality or enforceability of such terms or conditions in
any other jurisdiction.
Section 8.11 Counterparts. This Agreement may be separately
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to
constitute one and the same Agreement.
Section 8.12 WAIVER OF JURY TRIAL, PUNITIVE DAMAGES. EACH OF THE
BORROWER, AGENTS AND LENDERS HEREBY (I) IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF,
UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED
THEREBY OR ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY; (II) IRREVOCABLY
WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES; (III) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (IV) ACKNOWLEDGES THAT
IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND
THE
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TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
Section 8.13 Several Obligations. The respective obligations of
Lenders hereunder are several and not joint and no Lender shall be the partner
or agent of any other (except to the extent to which an Agent is authorized to
act as such). The failure of any Lender to perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder. This Agreement is not intended to, and shall not be construed so as
to, confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
Section 8.14 Nonliability of Lenders. The relationship between
Borrower on the one hand and Lenders and Agents on the other hand shall be
solely that of borrower and lender. None of the Agents nor any Lender shall
have any fiduciary responsibilities to Borrower or any of its respective
Subsidiaries. None of the Agents nor any Lender undertakes any responsibility
to Borrower or any of their respective Subsidiaries to review or inform
Borrower of any matter in connection with any phase of Borrower's or such
Subsidiary's business or operations.
Section 8.15 Setoff. In addition to, and without any limitation
of, any rights of the Lenders under applicable law, if Borrower becomes
insolvent, however evidenced, or any Event of Default or Default occurs and the
maturity of the Obligations has been accelerated, any indebtedness from any
Lender to Borrower (including all account balances, whether provisional or
final and whether or not collected or available) may be offset and applied
toward the payment of the Obligations owing to such Lender, whether or not the
Obligations, or any part thereof, shall then be due and payable.
Section 8.16 Release of Liens. Upon the date of execution and
delivery of a Guaranty of the type referred to in clause (i) of the definition
of "Guaranty" by a Restricted Subsidiary the capital stock of which has been
pledged (each such date, a "Stock Pledge Release Date"), the Collateral Agent
shall release and discharge, at the cost or expense of Borrower, the Pledge
Agreement covering such Subsidiary's capital stock, all of Lenders' and
Collateral Agent's rights and interests in such Pledge Agreement and all liens,
security interests, pledges and encumbrances created or existing under or
pursuant to such Pledge Agreement.
SECTION 8.17 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE
LENDERS OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF
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THE STATE OF TEXAS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST
ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE COLLATERAL AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF TEXAS. FOR THE
PURPOSE OF ANY ACTION OR PROCEEDING INSTITUTED IN THE FEDERAL OR STATE COURTS
OF TEXAS, HOLDINGS HEREBY IRREVOCABLY DESIGNATES BORROWER WITH OFFICES ON THE
DATE HEREOF AT 303 WEST WALL STREET, SUITE 101, MIDLAND, TEXAS 79701 TO
RECEIVE FOR AND ON BEHALF OF HOLDINGS, SERVICES OF PROCESS IN TEXAS. BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
TO THE EXTENT THAT BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE
OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, BORROWER HEREBY IRREVOCABLY
WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS.
Section 8.18 Assumption of Prior Indebtedness. Borrower hereby
assumes effective on the Effective Date, and Pioneer USA has assigned and
hereby assigns to Borrower, all of the Prior Indebtedness under the Existing
Credit Agreement (including any and all outstanding LC Obligations).
Section 8.19 Renewal, Extension or Rearrangement. All provisions
Agreement and any other Loan Document relating to the Notes or the other
Obligations shall apply with equal force and effect to each and all
promissory notes or other agreements or instruments hereafter executed which in
whole or in part represent a renewal, extension, increase or rearrangement of
any part of the original Notes or Obligations.
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Section 8.20 Entire Agreement. THIS WRITTEN AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, this Agreement is executed as of the date first written
above.
BORROWER:
PIONEER NATURAL RESOURCES COMPANY
By:
-------------------------------------
Name: M. Garrett Smith
Title: Executive Vice President and
Chief Financial Officer
Address: 1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
Attention: M. Garrett Smith
Telephone: (972) 402-7013
Telecopy: (972) 402-7028
with a copy to:
303 West Wall, Suite 101
P.O. Box 3178
Midland, Texas 79701
Attention: Curt Kamradt
Telephone: (915) 571-3171
Telecopy: (915) 571-5696
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 1
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LENDERS:
NATIONSBANK OF TEXAS, N.A.,
individually and as Administrative Agent
and as Collateral Agent
By:
-------------------------------------
Name: Frank K. Stowers
Title: Vice President
Address: 303 W. Wall
P. O. Box 1599
Midland, Texas 79701
Attention: Mr. Frank K. Stowers
Telephone: (915) 685-2179
Telecopy: (915) 685-2009
with further notice to:
901 Main Street, 64th Floor
Dallas, Texas 75202
Attention: Mr. E. Murphy Markham IV
Telephone: (214) 508-1251
Telecopy: (214) 508-1285
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 2
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CIBC INC., individually and as
Documentation Agent
By:
-------------------------------
Name:
Title:
Address: 2727 Paces Ferry Road
Suite 1200
Atlanta, GA 30339
Attention:
------------------------
Telephone: (770) 319-4824
Telecopy: (770) 319-4950
with further notice to:
2 Houston Center
909 Fannin Street, Suite 1200
Houston, Texas 77010
Attention: Mr. Paul Jordan
Telephone: (713) 655-5245
Telecopy: (713) 650-3727
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 3
<PAGE> 86
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
individually and as Documentation Agent
By:
------------------------------
Name:
Title:
Address: 60 Wall Street, 22nd Floor
New York, New York 10260
Attention: Mr. Philip McNeal
Telephone: (212) 648-7181
Telecopy: (212) 648-5023
with further notice to:
Sandra H. Doherty
500 Christiana Stanton Road
Newark, DE 19713-2107
Telephone: (302) 634-8122
Telecopy: (302) 634-1092
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 4
<PAGE> 87
THE CHASE MANHATTAN BANK,
individually and as
Syndication Agent
By:
-----------------------
Name:
Title:
Address: 712 Main Street,
5th Floor
P. O. Box 2558
Houston, Texas 77252-8086
Attention: Mr. Robert Mertensotto
Telephone: (713) 216-4147
Telecopy: (713) 216-4117
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 5
<PAGE> 88
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
individually and as Co-Agent
By:
-----------------------------
Name:
Title:
Address: 3 Allen Center
333 Clay Street, Suite 4550
Houston, TX 77002
Attention: Mr. Ron McKaig
Telephone: (713) 651-4881
Telecopy: (713) 651-4841
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 6
<PAGE> 89
THE BANK OF NEW YORK,
individually and as Co-Agent
By:
--------------------------
Name:
Title:
Address: One Wall Street,
19th Floor
New York, New York 10286
Attention: Mr. Ray Palmer
Telephone: (212) 635- 7834
Telecopy: (212) 635-7923
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 7
<PAGE> 90
THE BANK OF NOVA SCOTIA,
individually and as Co-Agent
By:
---------------------------
Name:
Title:
Address: 600 Peachtree Street N.E.
Suite 2700
Atlanta, Georgia 30308
Attention: Mr. Cleve Bushey
Telephone: (404) 877-1500
Telecopy: (404) 888-8998
with further notice to:
Mr. Jamie Conn
1100 Louisiana, Suite 3000
Houston, TX 77002
Telephone: (713) 759-3426
Telecopy: (713) 752-2425
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 8
<PAGE> 91
ROYAL BANK OF CANADA,
individually and as Co-Agent
By:
--------------------------
Name:
Title:
Address: Financial Square
32 Old Slip St.
New York, New York
10005-3531
Attention: Loan Administrator
Telephone: (212) 428-6321
Telecopy: (212) 428-2372
W/copy to:
Address: 12450 Greens Point Drive
Suite 1450
Houston, Texas 77060
Attention: Ms. Linda Stephens
Telephone: (281) 874-5669
Telecopy: (281) 874-0081
[SIGNATURE PAGE TO 364 PAGE CREDIT FACILITY]
S - 9
<PAGE> 92
UNION BANK OF CALIFORNIA, N.A.,
individually and as Co-Agent
By:
-----------------------------
Name:
Title:
Address: 500 North Akard,
Suite 4200
Dallas, Texas 75201
Attention: Mr. Randy Osterberg
Telephone: (214) 922-4200
Telecopy: (214) 922-4209
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 10
<PAGE> 93
WELLS FARGO BANK, N.A.,
individually and as Co-Agent
By:
---------------------------
Name:
Title:
Address: 1445 Ross Avenue,
Suite 400
LB 224
Dallas, Texas 75202
Attention: Mr. Lester Keliher
Telephone: (214) 777-4025
Telecopy: (214) 777-4044
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S-11
<PAGE> 94
THE FUJI BANK, LIMITED-HOUSTON
AGENCY, individually and as
Co-Agent
By:
----------------------------
Name:
Title:
Address: 1221 McKinney Street
Suite 4100
Houston, Texas 77002
Attention: Mr. Tommy Watts
Telephone: (713) 650-7868
Telecopy: (713) 759-0717
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 12
<PAGE> 95
DEN NORSKE BANK ASA,
individually and as Lead
Manager
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
Address: 333 Clay Street,
Suite 4890
Houston, Texas 77002
Attention: Mr. J. Morten Kreutz
Telephone: (713) 844-9255
Telecopy: (713) 757-1167
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 13
<PAGE> 96
BANQUE PARIBAS, individually
and as Lead Manager
By:
--------------------------
Name:
Title:
By:
--------------------------
Name:
Title:
Address: 1200 Smith Street
Two Allen Center
Suite 3100
Houston, Texas 77002
Attention: Mr. David Dodd
Telephone: (713) 659-4811
Telecopy: (713) 659-6915
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 14
<PAGE> 97
FIRST UNION NATIONAL BANK,
individually and as Lead
Manager
By:
-------------------------
Name:
Title:
Address: 1001 Fannin Street
Suite 2255
Houston, Texas 77002
Attention: Mr. Paul N. Riddle
Telephone: (713) 650-3716
Telecopy: (713) 650-6354
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 15
<PAGE> 98
BANKERS TRUST COMPANY, as a
Lender
By:
--------------------------
Name:
Title:
Address: 130 Liberty Plaza,
30th Floor
M.S. 2344 New York, New York
10006
Attention: Marcus M. Tarkington
Telephone: (212) 250-7684
Telecopy: (212) 250-8693
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 16
<PAGE> 99
CREDIT AGRICOLE INDOSUEZ, as a
Lender
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title
:
Address: 55 East Monroe
Chicago, Illinois 60603
Attention: Ms. Rosemary Brown
Telephone: (312) 917-7420
Telecopy: (312) 372-4421
with further notice to:
Mr. Brian Knezeak
600 Travis, Suite 2340
Houston, Texas 77002
Telephone: (713) 223-7001
Telecopy: (713) 223-7029
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 17
<PAGE> 100
NATEXIS BANQUE, as a Lender
BFCE
By:
--------------------------
Name:
Title:
By:
--------------------------
Name:
Title:
Address: 333 Clay Street,
Suite 4340
Houston, Texas 77002
Attention: Mr. Eric Ditges
Telephone: (713) 759-9401
Telecopy: (713) 759-9908
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 18
<PAGE> 101
TORONTO DOMINION (TEXAS),
INC., as a Lender
By:
----------------------------
Name:
Title:
Address: 909 Fannin Street,
Suite 1700
Houston, Texas 77010
Attention: Ms. Darlene Riedel
Telephone: (713) 653-8250
Telecopy: (713) 951-9921
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 19
<PAGE> 102
THE TOYO TRUST & BANKING CO.,
LTD., as a Lender
By:
---------------------------
Name:
Title:
Address: 666 5th Avenue,
33rd Floor
New York, New York 10103
Attention: Ms. Sharon Bonelli
Telephone: (212) 307-3410
Telecopy: (212) 307-3498
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 20
<PAGE> 103
WACHOVIA BANK, N.A., as a
Lender
By:
------------------------
Name:
Title:
Address: 191 Peachtree Street
Atlanta, Georgia 30303
Attention: Ms. Paige Mesaros
Telephone: (404) 332-1322
Telecopy: (404) 332-6898
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 21
<PAGE> 104
THE DAI-ICHI KANGYO BANK,
LTD., NEW YORK BRANCH, as a
Lender
By:
-------------------------
Name:
Title:
Address: One World Trade Center
48th Floor
New York, New York
10048
Attention: Mr. Masayoshi Komaki
Telephone: (212) 432-6627
Telecopy: (212) 912-1879
Further notice to:
DKB-Houston LPO
1100 Louisiana, Suite 4940
Houston, Texas 77002
Attention: Mr. Warren Ross
Telephone: (713) 654-5055
Telecopy: (713) 654-1667
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 22
<PAGE> 105
THE SANWA BANK, LIMITED, as a
Lender
By:
---------------------------
Name:
Title:
Address: 4100W Texas Commerce Tower
2200 Ross Avenue
Dallas, Texas 75201
Attention: Mr. Matthew Patrick
Telephone: (214) 665-0242
Telecopy: (214) 953-3963
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S-23
<PAGE> 106
KREDIETBANK N.V., as a Lender
By:
---------------------------
Name:
Title:
Address: 125 West 55th Street
New York, NY 10019
Attention: Robert E. Snauffer
Vice President
Telephone: (212) 541-0700
Telecopy: (212) 956-5580
with a copy to:
Kredietbank N.V., Atlanta
Representative Office Two
Midtown Plaza, Suite 1750
1349 W. Peachtree Street
Atlanta, Georgia 30309
Attention: Mr. Felip Ferrante
Telephone: (404) 876-2556
Telecopy: (404) 876-3212
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 24
<PAGE> 107
For purposes of selling, assigning, transferring and conveying its
respective indebtedness, obligations and liabilities under the Existing Credit
Agreement to Borrower, the undersigned has caused this Agreement to be executed
by its officer thereunto duly authorized as of the date and year first above
written.
PIONEER NATURAL RESOURCES USA, INC.
By:
----------------------------------
Name: M. Garrett Smith
Title: Executive Vice President and
Chief Financial Officer
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
S - 25
<PAGE> 108
Exhibit A-1
[Form of]
Loan Note - 364 Day Credit Facility
$___________ _____________, 199___
FOR VALUE RECEIVED, the undersigned, PIONEER NATURAL RESOURCES
COMPANY, a Delaware corporation, with offices at 303 W. Wall, Suite 101,
Midland, Texas (herein called "Borrower"), hereby promises to pay to the order
of _______________ ________________ (herein called "Lender"), the principal sum
of _______________________________ and No/100 Dollars ($____ ______________),
or, if greater or less, the aggregate unpaid principal amount of each Loan made
under this Note by Lender to Borrower pursuant to the terms of the Credit
Agreement (as defined herein), together with interest on the unpaid principal
balance thereof as hereinafter set forth, both principal and interest payable
as herein provided in lawful money of the United States of America at the
principal banking offices of the Administrative Agent under the Credit
Agreement, 901 Main Street, Dallas, Texas 75202, or at such other place as
from time to time may be designated by the holder of this Note, with the
concurrence of Borrower and Administrative Agent. Subject to the terms and
conditions of the Credit Agreement and hereof, Borrower may borrow, repay and
reborrow hereunder.
This Note (a) is issued and delivered under that certain Amended and
Restated Credit Facility Agreement dated as of December 18, 1997 by and among
Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), and is a "Loan Note" as defined therein, and (b) is
subject to the terms and provisions of the Credit Agreement, which contains
provisions for payment and prepayment hereunder and acceleration of the
maturity hereof upon the happening of certain events. Payments on this Note
shall be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto and
for the meanings assigned to terms used and not otherwise defined herein.
Exhibit A-1 - 1
<PAGE> 109
Interest accrued on each Loan evidenced by this Note shall be payable,
without duplication: (a) on the Maturity Date; (b) with respect to any Base
Rate Portion of the Loans evidenced by this Note, on the third Business Day of
each Fiscal Quarter occurring after the date of the initial borrowing of a Base
Rate Portion hereunder; (c) with respect to any Eurodollar Portion of the Loans
evidenced by this Note, on the last day of each applicable Interest Period
(and, if such Interest Period shall exceed 90 days, on the 90th day of such
Interest Period and every 90 days thereafter until the end of such Interest
Period); (d) with respect to any Base Rate Portion converted into a Eurodollar
Portion of the Loans evidenced by this Note pursuant to a Rate Election on a
day when interest would not otherwise have been payable pursuant to clause (b),
on the third Business Day of each Fiscal Quarter occurring after the date of
such conversion; and (e) on any portion of the Loans evidenced by this Note,
the Maturity Date of which is accelerated pursuant to Section 6.1 of the Credit
Agreement, on the date to which the Maturity Date of such portion has been
accelerated. Interest accrued on the Loans evidenced by this Note or other
monetary Obligations arising under this Note, the Credit Agreement or any other
Loan Document after the date such amount is due and payable (whether on the
Maturity Date, upon acceleration or otherwise) shall be payable upon demand.
The principal amount of this Note, together with all interest accrued
hereon and unpaid, shall be due and payable in full on the Maturity Date.
The Base Rate Portion of the Loans evidenced by this Note (exclusive
of any past due principal or interest) from time to time outstanding shall bear
interest on each day outstanding at the Base Rate, plus the applicable Base
Rate Margin. Each Eurodollar Portion of the Loans evidenced by this Note
(exclusive of any past due principal or interest) shall bear interest on each
day during the related Interest Period at the applicable Eurodollar Rate, plus
the applicable Eurodollar Margin. All past due principal of the Loans
evidenced by this Note or other Obligations arising under the Credit Agreement
or any other Loan Document (whether payable on the Maturity Date or otherwise)
shall bear interest on each day outstanding after its due date at the
applicable Default Rate in effect on such day.
Notwithstanding the other provisions of this Note or the Credit
Agreement, in no event shall the interest payable hereon, whether before or
after maturity, exceed the Maximum Lawful Rate and this Note is expressly made
subject to the provisions of the Credit Agreement which more fully set out the
limitations on how interest accrues hereon. In the event applicable law
provides for a ceiling under Chapter 1D of Article 5069 of the Texas Credit
Title, Title 79, Vernon's Texas Civil Statutes, as amended
Exhibit A-1 - 2
<PAGE> 110
(formerly Article 5069-1.04, Vernon's Texas Civil Statutes, as amended), that
ceiling shall be the "applicable interest rate ceiling" as defined in said
Chapter. The term "applicable law" as used in this Note shall mean the laws of
the State of Texas or the laws of the United States, whichever laws allow the
greater interest as such laws now exist or may be enacted, changed or amended
or come into effect in the future.
If this Note is placed in the hands of an attorney for collection
after a Default, or if all or any part of the indebtedness represented hereby
is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, the
undersigned Borrower and all endorsers, sureties and guarantors of this Note
jointly and severally agree to pay reasonable attorneys' fees and collection
costs to the holder hereof in addition to the principal and interest payable
hereunder.
The undersigned Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the
bringing of any suit against any party and any notice of or defense on account
of any extensions, renewals, partial payments or changes in any manner of or in
this Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
It is contemplated that by reason of prepayment hereon there may be
times when no indebtedness is owing hereunder; notwithstanding such
occurrences, this Note shall remain valid and shall be in full force and effect
as to Loans made pursuant to the Credit Agreement subsequent to each
occurrence.
Except as permitted by Section 8.8 of the Credit Agreement, this Note
may not be assigned by Lender to any other Person.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE UNDERSIGNED BORROWER AND LENDER WITH
RESPECT HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS (WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE SAME ARE
GOVERNED BY APPLICABLE FEDERAL LAW.
PIONEER NATURAL RESOURCES COMPANY
By:
-------------------------------
Name: M. Garrett Smith
Title: Executive Vice President and
Chief Financial Officer
Exhibit A-1 - 3
<PAGE> 111
Exhibit A-1 - 4
<PAGE> 112
Exhibit A-2
[Form of]
Swing Line Note - 364 Day Credit Facility
$50,000,000 __________, 199___
FOR VALUE RECEIVED, the undersigned, PIONEER NATURAL RESOURCES
COMPANY, a Delaware corporation with offices at 303 W. Wall, Suite 101,
Midland, Texas (herein called "Borrower"), hereby promises to pay to the order
of NATIONSBANK OF TEXAS, N.A. (herein called "Lender"), the principal sum of
FIFTY MILLION AND NO/100 Dollars ($50,000,000), or, if less, the aggregate
unpaid principal amount of the Swing Line Advances made under this Note by
Lender to Borrower pursuant to the terms of the Credit Agreement (as defined
herein), together with interest on the unpaid principal balance thereof as
hereinafter set forth, both principal and interest payable as herein provided
in lawful money of the United States of America at the principal banking
offices of Administrative Agent under the Credit Agreement, 901 Main Street,
Dallas, Texas 75202, or at such other place as from time to time may be
designated by the holder of this Note, with the concurrence of Borrower and
Administrative Agent.
This Note (a) is issued and delivered under that certain Amended and
Restated Credit Facility Agreement dated as of December 18, 1997 by and among
Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), and is a "Swing Line Note" as defined therein, and (b) is
subject to the terms and provisions of the Credit Agreement, which contains
provisions for payment and prepayment hereunder and acceleration of the
maturity hereof upon the happening of certain events. Payments on this Note
shall be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto and
for the meanings assigned to terms used and not otherwise defined herein.
The unpaid principal amount of this Note, together with all interest
accrued hereon and unpaid, shall be due and payable in full as provided in the
Credit Agreement and not later than the Maturity Date. Interest accrued on the
Swing Line Advances evidenced by this Note shall be payable as provided in the
Credit Agreement.
Exhibit A-2 - 1
<PAGE> 113
Notwithstanding other provisions of this Note or the Credit Agreement,
in no event shall the interest payable hereon, whether before or after
maturity, exceed the Maximum Lawful Rate and this Note is expressly made
subject to the provisions of the Credit Agreement which more fully set out the
limitations on how interest accrues hereon. In the event applicable law
provides for a ceiling under Chapter 1D of Article 5069 of the Texas Credit
Title, Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article
5069-1.04, Vernon's Texas Civil Statutes, as amended), that ceiling shall be
the "applicable interest rate ceiling" as defined in said Chapter. The term
"applicable law" as used in this Note shall mean the laws of the State of Texas
or the laws of the United States, whichever laws allow the greater interest as
such laws now exist or may be enacted, changed or amended or come into effect
in the future.
If this Note is placed in the hands of an attorney for collection
after a Default, or if all or any part of the indebtedness represented hereby
is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, the
undersigned Borrower and all endorsers, sureties and guarantors of this Note
jointly and severally agree to pay reasonable attorneys' fees and collection
costs to the holder hereof in addition to the principal and interest payable
hereunder.
The undersigned Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the
bringing of any suit against any party and any notice of or defense on account
of any extensions, renewals, partial payments or changes in any manner of or in
this Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
It is contemplated that by reason of prepayment hereon there may be
times when no indebtedness is owing hereunder; notwithstanding such
occurrences, this Note shall remain valid and shall be in full force and effect
as to Loans made pursuant to the Credit Agreement subsequent to each
occurrence.
Except as permitted by Section 8.8 of the Credit Agreement, this Note
may not be assigned by Lender to any other Person.
Exhibit A-2 - 2
<PAGE> 114
THIS NOTE AND THE RIGHTS AND DUTIES OF THE UNDERSIGNED BORROWER AND
LENDER WITH RESPECT HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE
SAME ARE GOVERNED BY APPLICABLE FEDERAL LAW.
PIONEER NATURAL RESOURCES
COMPANY
By:
---------------------------
Name: M. Garrett Smith
Title: Executive Vice
President and Chief
Financial Officer
Exhibit A-2 - 3
<PAGE> 115
Exhibit A-3
[Form of]
Competitive Bid Note - 364 Day Credit Facility
$300,000,000 , 199
---------- ---
FOR VALUE RECEIVED, the undersigned, PIONEER NATURAL RESOURCES COMPANY,
a Delaware corporation, with offices at 303 W. Wall, Suite 101, Midland, Texas
(herein called "Borrower"), hereby promises to pay to the order of
_____________ _____________________ (herein called "Lender"), the principal sum
of THREE HUNDRED MILLION AND No/100 DOLLARS ($300,000,000), or, if less, the
aggregate unpaid principal amount of all Competitive Bid Advances shown on the
schedule attached hereto (and any continuation thereof), if so shown, made by
the Lender to Borrower, together with interest on the unpaid principal balance
thereof as hereinafter set forth, both principal and interest payable as herein
provided in lawful money of the United States of America at the principal
banking offices of Administrative Agent under the Credit Agreement (as defined
herein), 901 Main Street, Dallas, Texas 75202, or at such other place as from
time to time may be designated by the holder of this Note, with the concurrence
of Borrower and Administrative Agent.
This Note (a) is issued and delivered under that certain Amended and
Restated Credit Facility Agreement dated as of December 18, 1997 by and among
Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the Co-
Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), and is a "Competitive Bid Note" as defined therein, and
(b) is subject to the terms and provisions of the Credit Agreement, which
contains provisions for payment and prepayment hereunder and acceleration of
the maturity hereof upon the happening of certain events. Payments on this
Note shall be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto and
for the meanings assigned to terms used and not otherwise defined herein.
The unpaid principal amount of this Note, together with all interest
accrued hereon and unpaid, shall be due and payable in full as provided in the
Credit Agreement and not later than the Maturity Date.
Exhibit A-3 - 1
<PAGE> 116
Interest accrued on the Competitive Bid Advances evidenced by this Note
shall be payable as provided in the Credit Agreement.
Notwithstanding other provisions of this Note or the Credit Agreement,
in no event shall the interest payable hereon, whether before or after
maturity, exceed the Maximum Lawful Rate and this Note is expressly made
subject to the provisions of the Credit Agreement which more fully set out the
limitations on how interest accrues hereon. In the event applicable law
provides for a ceiling under Chapter 1D of Article 5069 of the Texas Credit
Title, Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article
5069-1.04, Vernon's Texas Civil Statutes, as amended), that ceiling shall be
the "applicable interest rate ceiling" as defined in said Chapter. The term
"applicable law" as used in this Note shall mean the laws of the State of Texas
or the laws of the United States, whichever laws allow the greater interest as
such laws now exist or may be enacted, changed or amended or come into effect
in the future.
If this Note is placed in the hands of an attorney for collection after
a Default, or if all or any part of the indebtedness represented hereby is
proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, the
undersigned Borrower and all endorsers, sureties and guarantors of this Note
jointly and severally agree to pay reasonable attorneys' fees and collection
costs to the holder hereof in addition to the principal and interest payable
hereunder.
The undersigned Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the
bringing of any suit against any party and any notice of or defense on account
of any extensions, renewals, partial payments or changes in any manner of or in
this Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
It is contemplated that by reason of prepayment hereon there may be
times when no indebtedness is owing hereunder; notwithstanding such
occurrences, this Note shall remain valid and shall be in full force and effect
as to Competitive Bid Advances made pursuant to the Credit Agreement subsequent
to each occurrence.
Exhibit A-3 - 2
<PAGE> 117
Except as permitted by Section 8.8 of the Credit Agreement, this Note
may not be assigned by Lender to any other Person.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE UNDERSIGNED BORROWER AND
LENDER WITH RESPECT HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE
SAME ARE GOVERNED BY APPLICABLE FEDERAL LAW.
PIONEER NATURAL RESOURCES COMPANY
By:
-------------------------------------------------
Name: M. Garrett Smith
Title: Executive Vice President
and Chief Financial Officer
Exhibit A-3 - 3
<PAGE> 118
Exhibit B
[Note: Language in brackets will not be included in every Guaranty to the
extent that, at the time of execution and delivery of the Guaranty, such
execution and delivery would result in adverse tax consequences under Section
956 or substantial stamp tax or similar taxes, are prohibited pursuant to
contractual restrictions or are prohibited as a matter of corporate law.]
[Form of]
GUARANTY
THIS GUARANTY (this "Guaranty"), dated as of ________________, 199___,
made by _________________________ [(A.C.N. _____________)], a ________________
("Guarantor"), in favor of each of the Lender Parties (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Pioneer Natural Resources
Company, a Delaware corporation ("Borrower"), NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, the Co-Agents party thereto, and the Lenders from time to
time parties thereto (together with all amendments, supplements, restatements
and other modifications, if any, thereafter made thereto, the "Primary Credit
Agreement"), the Lenders have extended Commitments (as defined in the Primary
Credit Agreement) to make Loans to Borrower and to issue or participate in
Letters of Credit on behalf of Borrower; and
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (together with all amendments, supplements,
restatements and other modifications, if any, thereafter made thereto, the "364
Day Credit Agreement", and together with the Primary Credit Agreement, the
"Credit Agreements"), the Lenders have extended Commitments (as defined in the
364 Day Credit Agreement) to make Loans to Borrower; and
WHEREAS, as a condition precedent to the making of the initial Loans or
issuing of the initial Letters of Credit under
Exhibit B - 1
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the Credit Agreements, Guarantor is required to execute and deliver this
Guaranty; and
WHEREAS, Guarantor has duly authorized the execution, delivery and
performance of this Guaranty; and
WHEREAS, it is in the best interests of Guarantor to execute this
Guaranty inasmuch as Guarantor will derive substantial direct and indirect
benefits from the Loans made from time to time to Borrower and Letters of
Credit issued on behalf of Borrower pursuant to the Credit Agreements;
NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce the Lenders to make Loans
(including the initial Loans) to Borrower pursuant to the Credit Agreements and
for the Issuing Bank to issue Letters of Credit on behalf of Borrower and for
the Lenders to acquire participations in such Letters of Credit pursuant to the
Primary Credit Agreement, Guarantor agrees, for the benefit of each Lender
Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"Administrative Agent" is defined in the first recital.
"Borrower" is defined in the first recital.
"Commitments" means "Commitments" as defined in the Primary Credit
Agreement and "Commitments" as defined in the 364 Day Credit Agreement.
"Credit Agreements" is defined in the second recital.
"Debtor" is defined in Section 2.1(a)(i).
"Guarantor" is defined in the preamble.
"Guaranty" is defined in the preamble.
"Lender Party" means, as the context may require, any Lender, any
Issuing Bank or any Agent and each of its respective successors, transferees
and assigns under the Credit Agreements.
Exhibit B - 2
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"Lenders" means "Lenders" as defined in the Primary Credit Agreement and
"Lenders" as defined in the 364 Day Credit Agreement.
"Loan Documents" means "Loan Documents" as defined in the Primary Credit
Agreement and "Loan Documents" as defined in the 364 Day Credit Agreement.
"Notes" means "Notes" as defined in the Primary Credit Agreement and
"Notes" as defined in the 364 Day Credit Agreement.
"Obligations" means "Obligations" as defined in the Primary Credit
Agreement and "Obligations" as defined in the 364 Day Credit Agreement.
"Primary Credit Agreement" is defined in the first recital.
"364 Day Credit Agreement" is defined in the second recital.
SECTION 1.2. Primary Credit Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Guaranty,
including its preamble and recitals, have the meanings provided in the Primary
Credit Agreement.
ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. Guarantor hereby absolutely, unconditionally
and irrevocably
(a) guarantees
(i) the full and punctual payment when due, whether at
stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, of all Obligations of Borrower
now or hereafter existing under the Credit Agreements, the Notes,
the LC Applications and each other Loan Document to which
Borrower is or may become a party, whether for principal,
interest, fees, expenses or otherwise;
(ii) the payment and performance of any and all present
or future obligations of Borrower according to the terms of any
present or future rate swap, rate cap, rate floor, rate collar,
currency exchange transaction, forward rate agreement, or other
exchange or rate protection agreements or any option with respect
to any such transaction now existing or hereafter entered into
between Borrower or any of its Subsidiaries and one or more of
the Lenders or their Affiliates ("interest rate swap agreement");
Exhibit B - 3
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(iii) the payment and performance of any and all present
or future obligations of Borrower according to the terms of any
present or future crude oil, natural gas or other hydrocarbons
swap agreements, crude oil, natural gas or other hydrocarbons
cap, crude oil, natural gas or other hydrocarbons floor, crude
oil, natural gas or other hydrocarbons collar, crude oil, natural
gas or other hydrocarbons exchange transaction, forward crude
oil, natural gas or other hydrocarbons agreement, or other
exchange or crude oil, natural gas or other hydrocarbons
protection agreements or any option with respect to any such
transaction now existing or hereafter entered into between
Borrower or any of its Subsidiaries and one or more of the
Lenders or their Affiliates; and
(iv) all renewals, rearrangements, increases, extensions
for any period, substitutions, modification, amendments or
supplements in whole or in part of any of the above loan
documents or obligations,
(including all such amounts which would become due but for the operation
of the automatic stay under Section 362(a) of the United States
Bankruptcy Code, 11 U.S.C. Section 362(a), and the operation of Sections
502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C.
Section 502(b) and Section 506(b)), and (b) indemnifies and holds
harmless strictly in accordance with the terms of the Credit Agreements
each Lender Party and each holder of a Note from Borrower, an LC
Application or any interest in an LC Obligation for any and all costs
and expenses (including reasonable attorney's fees and expenses)
incurred by such Lender Party or such holder, as the case may be, in
enforcing any rights under this Guaranty; provided, however, that
Guarantor shall only be liable under this Guaranty for the maximum
amount of such liability that can be hereby incurred without rendering
this Guaranty, as it relates to Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for
any greater amount. This Guaranty constitutes a guaranty of payment
when due and not of collection, and Guarantor specifically agrees that
it shall not be necessary or required that any Lender Party or any
holder of any Note exercise any right, assert any claim or demand or
enforce any remedy whatsoever against Borrower or any other Designated
Entity (or any other Person) before or as a condition to the obligations
of Guarantor hereunder. All payments hereunder are to be made in the
currency in which they are due under the Credit Agreements.
SECTION 2.2. Acceleration of Guaranty. Guarantor agrees that, in the
event of the dissolution or insolvency of Borrower
Exhibit B - 4
<PAGE> 122
or Guarantor, or the inability or failure of Borrower or Guarantor to pay debts
as they become due, or an assignment by Borrower or Guarantor for the benefit
of creditors, or the commencement of any case or proceeding in respect of
Borrower or Guarantor under any bankruptcy, insolvency or similar laws, and if
such event shall occur at a time when any of the Obligations of Borrower may
not then be due and payable, Guarantor will pay to the Lenders forthwith the
full amount which would be payable hereunder by Guarantor if all such
Obligations were then due and payable.
SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in all
respects be a continuing, absolute, unconditional and irrevocable guaranty of
payment, and shall remain in full force and effect until all Obligations of
Borrower have been paid in full, all obligations of Guarantor hereunder shall
have been paid in full and all Commitments shall have terminated. Guarantor
guarantees that the Obligations of Borrower will be paid strictly in accordance
with the terms of the Credit Agreements and each other Loan Document under
which they arise, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of any
Lender Party or any holder of any Note with respect thereto. The liability of
Guarantor under this Guaranty shall be absolute, unconditional and irrevocable
irrespective of:
(a) (i) any lack of validity, legality or enforceability of
the Credit Agreements, any Note, any LC Application or any other Loan
Document or any portion of any thereof or (ii) the Credit Agreements,
any Note, any LC Application or any other Loan Document or any portion
of any thereof being void or voidable;
(b) the failure of any Lender Party or any holder of any Note,
any LC Application, Letter of Credit or any interest therein
(i) to assert any claim or demand or to enforce any
right or remedy against Borrower, any other Designated Entity or
any other Person (including any other guarantor) under the
provisions of the Credit Agreements, any Note, any LC
Application, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any other
guarantor of, or collateral securing, any Obligations of Borrower
or any other Designated Entity;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of Borrower or any
other Designated Entity, or any other
Exhibit B - 5
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extension, compromise or renewal of any Obligation of Borrower or any
other Designated Entity;
(d) any reduction, limitation, impairment or termination of
any Obligations of Borrower or any other Designated Entity for any
reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to (and Guarantor hereby waives any
right to or claim of) any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any
other event or occurrence affecting, any Obligations of Borrower, any
other Designated Entity or otherwise;
(e) any amendment to, extensions of, rescission, waiver, or
other modification of, or any consent to departure from, any of the
terms of the Credit Agreements, any Note, any LC Application, any Letter
of Credit or any other Loan Document;
(f) any addition, exchange, release, surrender or non-
perfection of any collateral, or any amendment to or waiver or release
or addition of, or consent to departure from, any other guaranty, held
by any Lender Party or any holder of any Note, any LC Application, any
Letter of Credit or interest therein securing any of the Obligations of
Borrower or any other Designated Entity; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, Borrower,
any other Designated Entity, any surety or any guarantor.
SECTION 2.4. Reinstatement. Guarantor agrees that this Guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment (in whole or in part) of any of the Obligations guaranteed hereby
is rescinded or must otherwise be restored by any Lender Party or any holder of
any Note, any LC Application or any interest in an LC Obligation, upon the
insolvency, bankruptcy or reorganization of Borrower, or any other Designated
Entity or otherwise, all as though such payment had not been made.
SECTION 2.5. Waiver. Guarantor hereby waives promptness, diligence,
presentment, notice of acceptance and any other notice with respect to any of
the Obligations of Borrower or any other Designated Entity and this Guaranty
and any requirement that any Agent, any other Lender Party or any holder of any
Note, any LC Application, any Letter of Credit or any interest therein protect,
secure, perfect or insure any security interest or Lien,
Exhibit B - 6
<PAGE> 124
or any property subject thereto, or exhaust any right or take any action
against Borrower, any other Designated Entity or any other Person (including
any other guarantor) or entity or any collateral securing the Obligations of
Borrower or any other Designated Entity, as the case may be.
SECTION 2.6. Waiver of Subrogation. Guarantor hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
Borrower or any other Designated Entity that arise from the existence, payment,
performance or enforcement of Guarantor's obligations under this Guaranty or
any other Loan Document, including any right of subrogation, reimbursement,
contribution, exoneration, or indemnification, any right to participate in any
claim or remedy of the Lender Parties against Borrower or any other Designated
Entity or any collateral which the Collateral Agent now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including the right to take or receive from
Borrower or any other Designated Entity, directly or indirectly, in cash or
other property or by set-off or in any manner, payment or security on account
of such claim or other rights. If any amount shall be paid to Guarantor in
violation of the preceding sentence and the Obligations shall not have been
paid in cash in full and the Commitments have not been terminated, such amount
shall be deemed to have been paid to Guarantor for the benefit of, and held in
trust for, the Lender Parties, and shall forthwith be paid to the Lender
Parties to be credited and applied upon the Obligations, whether matured or
unmatured; otherwise it shall be returned to remitter. Guarantor acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated by the Credit Agreements and that the waiver set
forth in this Section is knowingly made in contemplation of such benefits.
SECTION 2.7. Successors, Transferees and Assigns; Transfers of Notes.
This Guaranty shall:
(a) be binding upon Guarantor, and its successors, transferees
and assigns (provided, however, that Guarantor may not assign any of its
obligations hereunder without the prior written consent of all Lenders);
and
(b) inure to the benefit of and be enforceable by each Agent
and each other Lender Party.
Without limiting the generality of the foregoing clause (b), any Lender may
assign or otherwise transfer (in whole or in part) any Note, Loan, LC
Application, Letter of Credit or interest therein held by it to any other
Person or entity, and such other Person or entity shall thereupon become vested
with all rights and benefits in respect thereof granted to such Lender under
any Loan
Exhibit B - 7
<PAGE> 125
Document (including this Guaranty) or otherwise, subject, however, to any
contrary provisions in such assignment or transfer, and to the provisions of
Section 8.8 of the Credit Agreements.
SECTION 2.8. Taxes. All payments by the undersigned hereunder shall be
made free and clear of and without deduction for any present or future income,
excise, stamp, or franchise taxes and other taxes, fees, duties, withholdings
or other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender's net
income or receipts (such non-excluded items being called "Taxes"). In the
event that any withholding or deduction from any payment to be made hereunder
is required in respect of any Taxes pursuant to any applicable law, rule or
regulation, then, subject to the provisions of Section 2.9, the undersigned
will:
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to Administrative Agent an official
receipt or other documentation satisfactory to Administrative Agent
evidencing such payment to such authority; and
(c) pay to Administrative Agent for the account of the
applicable Lender(s) such additional amount(s) as is necessary to ensure
that the net amount actually received by each Lender will equal the full
amount such Lender would have received had no such withholding or
deduction been required and the undersigned hereby acknowledges that it
is not entitled to and will not seek recovery or restitution of any
amount due to any of the Lenders or Agents and paid by it pursuant to
this clause (c) or pursuant to the next sentence.
If any Taxes are directly asserted against any Agent or any Lender with respect
to any payment received by such Agent or such Lender hereunder, such Agent or
such Lender may pay such Taxes and, if paid in good faith, the undersigned will
promptly pay such additional amounts to the Administrative Agent for the
account of such Lender or Agent (including any penalties, interest or expenses)
as is necessary in order that the net amount received by such person after the
payment of such Taxes (including any taxes on such additional amount) shall
equal the amount such person would have received had no such Taxes been
asserted, subject to the provisions of Section 2.9.
The undersigned shall pay all stamp, transaction, registration and
similar taxes (including financial institutions
Exhibit B - 8
<PAGE> 126
duties, debit taxes or other taxes payable by return and taxes passed on to any
Lender or Agent by a bank or financial institution (collectively "Stamp Taxes")
and, if the undersigned fails to pay any such charges or taxes after reasonable
notice from any such Lender or Agent, fines and penalties) which may be payable
or determined to be payable in relation to the execution, delivery, performance
or enforcement of this Guaranty or any Loan Document or any other transaction
contemplated by any Loan Document to which the undersigned is a party. The
undersigned hereby indemnifies each Lender and Agent against any liability
resulting from delay or omission to pay such charges or taxes except to the
extent the liability results from failure by the relevant Lender or Agent to
pay any such tax after having been delivered funds to do so by the undersigned
or to the extent such liability is for fines and penalties resulting from such
Lender's or Agent's failure to provide reasonable notice to the undersigned as
provided herein.
If the undersigned fails to pay any Taxes or Stamp Taxes when due to the
appropriate taxing authority or fails to remit to Administrative Agent, for the
account of the respective Lenders, the required receipts or other required
documentary evidence, the undersigned shall indemnify Lenders for any Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure, subject to the provisions of Section 2.9.
The undersigned waives any statutory right to recover from any Agent or
any Lender any amount due to any such Agent or Lender and paid by the
undersigned under this Section.
SECTION 2.9. Make-Whole Qualifications. Each Lender's claims for
reimbursements, payments, indemnities or otherwise under Section 2.8 and the
undersigned's obligations with respect thereto, shall be limited and qualified
by and subject to the following:
(a) the undersigned's obligation to pay, satisfy or recognize
such claim shall be limited to costs or losses incurred within one (1)
year immediately prior to any demand or request therefor upon the
undersigned;
(b) each Lender's demand for reimbursement, payment or
indemnity must be limited to that which is being generally applied at
the time by such Lender for comparable guarantors and guaranties subject
to similar provisions;
(c) each Lender which asserts its rights with respect thereto
or which is seeking or imposing such reimbursement, payment or indemnity
shall provide evidence regarding the basis of such claim and the
calculation and application thereof in reasonable detail and, in
determining such
Exhibit B - 9
<PAGE> 127
amount, each Lender may use reasonable methods of attribution and
averaging; and
(d) each Lender which is seeking payment, indemnity or
reimbursement pursuant to Section 2.8 shall, if so requested by the
undersigned use reasonable efforts (subject to the overall policy
considerations of such Lender) to designate a different lending office
hereunder if to do so will avoid the need for, or reduce the amount of,
any such payment, indemnity or reimbursement; provided that, Lender
would, in its sole but reasonable determination, suffer no material
economic, legal or regulatory disadvantage or burden.
[SECTION 2.10. Judgment. Guarantor hereby agrees that:
(a) If, for the purposes of obtaining judgment in any court,
it is necessary to convert a sum due hereunder in United States Dollars
into another currency, Guarantor agrees, to the fullest extent permitted
by law, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase United States Dollars with such other currency on the Business
Day preceding that on which final judgment is given.
(b) The obligation of Guarantor in respect of any sum due from
it to any Lender Party or any holder of a Note hereunder shall,
notwithstanding any judgment in a currency other than United States
Dollars, be discharged only to the extent that on the Business Day
following receipt by such Lender Party or such holder, as the case may
be, of any sum adjudged to be so due in such other currency such Lender
Party or such holder, as the case may be, may, in accordance with normal
banking procedures, purchase United States Dollars with such other
currency; in the event that the United States Dollars so purchased are
less than the sum originally due to such Lender Party in United States
Dollars, Guarantor, as a separate obligation and notwithstanding any
such judgment, hereby indemnifies and holds harmless such Lender Party
and such holder against such loss, and if the United States Dollars so
purchased exceed the sum originally due to such Lender Party or such
holder in United States Dollars, such Lender Party or such holder, as
the case may be, shall remit to Guarantor such excess.]
Exhibit B - 10
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. Guarantor hereby
represents and warrants unto each Lender Party as set forth in this Article.
SECTION 3.1.1. Organization, Existence and Good Standing. Guarantor is
duly organized or incorporated, validly existing and in good standing under the
laws of its jurisdiction of organization or incorporation, having all corporate
or partnership powers required to enter into and carry out the transactions
contemplated hereby. Guarantor is duly qualified, in good standing, and
authorized to do business in all other jurisdictions within the United States
wherein the character of the properties owned or held by it or the nature of
the business transacted by it makes such qualification necessary, except for
any lack of qualification, good standing or authorization that is not
reasonably expected to result in a Material Adverse Effect. Guarantor has
taken all actions customarily taken in order to enter, for the purpose of
conducting business or owning property, each jurisdiction outside the United
States wherein the character of the properties owned or held by it or the
nature of the business transacted by it makes such actions desirable, except
any failure to take such action that is not reasonably expected to result in a
Material Adverse Effect.
SECTION 3.1.2. Authorization. Guarantor has duly taken all corporate,
partnership or shareholder action necessary to authorize the execution and
delivery by it of this Guaranty and to authorize the consummation of the
transactions contemplated hereby and the performance of its obligations
hereunder.
SECTION 3.1.3. No Conflicts or Consents. The execution and delivery by
Guarantor of this Guaranty, the performance by it of its obligations hereunder,
and the consummation of the transactions contemplated by the various Loan
Documents, do not and will not (i) conflict with any provision of the articles
or certificate of incorporation, bylaws, charter, or partnership agreement or
certificate of such Guarantor, or (ii) except as to matters that could not
reasonably be expected to result in a Material Adverse Effect, result in the
acceleration of any Debt owed by such Guarantor, or conflict with any law,
statute, rule, regulation, or agreement, judgment, license, order or permit
applicable to or binding upon such Guarantor, or require the consent, approval,
authorization or order of, or notice to or filing with, any court or
Governmental Authority or third party, or result in or require the creation of
any Lien upon any material assets or properties of such Guarantor, except as
permitted in the Loan Documents.
SECTION 3.1.4. Enforceable Obligations. This Guaranty is the legal,
valid and binding obligation of Guarantor, enforceable in accordance with its
terms, except as such enforcement may be
Exhibit B - 11
<PAGE> 129
limited by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights and by general principles of
equity.
ARTICLE IV
COVENANTS
SECTION 4.1. Covenants. Guarantor covenants and agrees that, so long
as any portion of the Obligations of Borrower shall remain unpaid or any Lender
shall have any outstanding Commitment, Guarantor will, unless the Required
Lenders shall otherwise consent in writing, perform or comply with the
obligations of a Restricted Subsidiary of Borrower set forth in Sections 5.1
and 5.2 of the Credit Agreements, subject to any limitations on performance or
compliance contained in such sections, including, without limitation, the
limitation, when applicable, that the failure to perform or comply could not
reasonably be expected to have a Material Adverse Effect.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Loan Document. This Guaranty is a Loan Document executed
pursuant to the Credit Agreements and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION 5.2. Binding on Successors, Transferees and Assigns;
Assignment. In addition to, and not in limitation of, Section 2.7, this
Guaranty shall be binding upon Guarantor and its successors, transferees and
assigns and shall inure to the benefit of and be enforceable by each Lender
Party and each holder of a Note, an LC Application, or an interest in an LC
Obligation and their respective successors, transferees and assigns (to the
full extent provided pursuant to Section 2.7); provided, however, that
Guarantor may not assign any of its obligations hereunder without the prior
written consent of all Lenders.
SECTION 5.3. Amendments. No amendment to or waiver of any provision of
this Guaranty, nor consent to any departure by Guarantor herefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Administrative Agent, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
SECTION 5.4. Notices. All notices, requests, consents, demands and
other communications required or permitted hereunder shall be in writing,
unless otherwise specifically provided herein and shall be deemed sufficiently
given or furnished if
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<PAGE> 130
delivered by personal delivery, by telecopy (with telephonic confirmation of
transmission, by delivery service with proof of delivery, or by registered or
certified United States mail, postage prepaid, to Guarantor at the address of
Guarantor specified on the signature pages hereto and to each Agent and each
Lender at their addresses specified on the signature pages to the Credit
Agreements (unless changed by similar notice in writing given by the particular
Person whose address is to be changed). Any such notice or communication shall
be deemed to have been given:
(a) in the case of personal delivery or delivery service, as
of the date of first attempted delivery at the address provided herein;
(b) in the case of telecopy, upon receipt; or
(c) in the case of registered or certified United States mail,
three days after deposit in the mail, postage prepaid.
SECTION 5.5. No Waiver; Remedies. In addition to, and not in
limitation of, Section 2.3 and Section 2.5, no failure on the part of any
Lender Party or any holder of a Note, an LC Application, or an interest in an
LC Obligation to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
SECTION 5.6. Section Captions. Section captions used in this Guaranty
are for convenience of reference only, and shall not affect the construction of
this Guaranty.
SECTION 5.7. Severability. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION 5.8. Governing Law, Entire Agreement. THIS GUARANTY SHALL BE
DEEMED A CONTRACT AND INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF TEXAS AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. THIS GUARANTY AND THE OTHER LOAN
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DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS,
WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 5.9. Waiver of Jury Trial. EACH OF GUARANTOR, AGENTS AND
LENDERS HEREBY (a) IRREVOCABLY WAIVES, THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS GUARANTY OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH,
BEFORE OR AFTER MATURITY; (b) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES; (c) CERTIFIES THAT
NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (d)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO AND ACCEPT THIS GUARANTY,
THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS
SECTION.
SECTION 5.10. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER
PARTIES OR GUARANTOR SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF TEXAS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST
ANY PROPERTY MAY BE BROUGHT, AT THE COLLATERAL AGENT'S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH PROPERTY MAY BE FOUND. GUARANTOR HEREBY EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS
AND THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
TEXAS. FOR PURPOSES OF ANY ACTION OR PROCEEDING INSTITUTED IN THE FEDERAL OR
STATE COURTS OF TEXAS,
Exhibit B - 14
<PAGE> 132
THE UNDERSIGNED HEREBY IRREVOCABLY DESIGNATES BORROWER WITH OFFICES ON THE DATE
HEREOF AT 303 WEST WALL STREET, SUITE 101, MIDLAND, TEXAS 79701 TO RECEIVE FOR
AND ON BEHALF OF THE UNDERSIGNED SERVICE OF PROCESS IN TEXAS. GUARANTOR HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT
THAT GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF
ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
Exhibit B - 15
<PAGE> 133
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written but effective as of the Effective Date.
[Name of Guarantor]
By
----------------------------------
Name:
Title:
Address: 303 West Wall
Suite 101
P. O. Box 3178
Midland, Texas 79701
Attention: Curt Kamradt
Telephone: (915) 571-3171
Telecopy: (915) 571-5696
with a copy to:
Garrett Smith
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
Telephone: (972) 402-7013
Telecopy: (972) 402-7028
Exhibit B - 16
<PAGE> 134
Exhibit C
Form of Request for Advance
_____________, ________
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn: Mickey McLean
Re: Request for Advance - 364 Day Credit Facility
Gentlemen:
Reference is made to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (the "Credit Agreement"). Terms which are defined
in the Credit Agreement and which are used but not defined herein are used
herein with the meanings ascribed to them in the Credit Agreement. Pursuant to
the terms of the Credit Agreement, the undersigned Borrower hereby requests
that Lenders make Advances to the undersigned Borrower in the aggregate
principal amount of $__________________, specifies _______________, _______, as
the date the undersigned Borrower desires for Lenders to make such Advances and
requests that Administrative Agent deliver to the undersigned Borrower the
proceeds thereof on such date.
To induce Lenders to make such Advances, the undersigned Borrower hereby
represents, warrants, acknowledges, and agrees to and with each Agent and each
Lender that:
(a) The Designated Officer of Borrower signing this instrument is a
duly elected, qualified and acting officer of the undersigned Borrower, holding
the office indicated below such officer's signature hereto and having all
necessary authority to act for the undersigned Borrower in making and
delivering this Request for Advance.
(b) The representations and warranties of the undersigned Borrower
and each other Designated Entity set forth in the Credit Agreement and the
other Loan Documents are true and correct on and as of the date hereof, with
the same effect as though such
Exhibit C - 1
<PAGE> 135
representations and warranties had been made on and as of the date hereof.
(c) There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as provided in
Section 6.1 of the Credit Agreement; nor will any such Default exist upon the
undersigned Borrower's receipt and application of the Advances requested
hereby. The undersigned Borrower will use the Advances hereby requested in
compliance with the Credit Agreement.
(d) Except to the extent waived in writing as provided in Section 6.1
of the Credit Agreement, the undersigned Borrower has performed and complied
with all agreements and conditions in the Credit Agreement required to be
performed or complied with by the undersigned Borrower on or prior to the date
hereof, and each of the conditions precedent to Advances contained in the
Credit Agreement remains satisfied.
(e) The aggregate unpaid principal balance of the Advances under the
Facility after the making of such Advance requested hereby, plus the aggregate
outstanding amount of Swing Line Advances and Competitive Bid Advances at the
date hereof will not be in excess of the Facility Amount on the date requested
for the making of such Advances.
(g) The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any course of
dealing, or by any other means not provided for in Section 8.1 of the Credit
Agreement. The Credit Agreement and the other Loan Documents are hereby
ratified, approved, and confirmed in all respects.
The undersigned Borrower agrees that if, prior to the time of the
Advances requested hereby, any matter certified to herein by it will not be
true and correct at such time as if then made, it will immediately so notify
Administrative Agent. Except to the extent, if any, that, prior to the time of
the Advances requested hereby, Administrative Agent shall have received written
notice from the undersigned Borrower to the contrary, each matter certified
herein shall be deemed once again to be certified as true and correct as of the
date of such Advances as if then made.
The Designated Officer of the undersigned Borrower signing this
instrument hereby certifies that, to the best of his
Exhibit C - 2
<PAGE> 136
knowledge, the above representations, warranties, acknowledgments and
agreements of the undersigned Borrower are true, correct and complete.
PIONEER NATURAL RESOURCES
COMPANY
By:
---------------------------
Name:
Title:
Exhibit C - 3
<PAGE> 137
Exhibit D
Form of Rate Election
____________________, ________
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn: Mickey McLean
Re: Rate Election - 364 Day Credit Facility
Gentlemen:
Reference is made to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (the "Credit Agreement"). Terms which are defined
in the Credit Agreement and which are used but not defined herein are used
herein with the meanings ascribed to them in the Credit Agreement. Pursuant to
the terms of the Credit Agreement, the undersigned Borrower hereby elects a
Tranche of Eurodollar Portions in the aggregate amount of $___________ with an
Interest Period beginning on __________ and continuing for a period of
___________________.
To satisfy the conditions set out in the Credit Agreement for the making
of such election, the undersigned Borrower hereby represents, warrants,
acknowledges and agrees that:
(a) The Designated Officer of the undersigned Borrower signing this
instrument is a duly elected, qualified and acting officer of such Borrower,
holding the office indicated below such officer's signature hereto and having
all necessary authority to act for such Borrower in making and delivering this
Rate Election.
(b) There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as provided in
Section 6.1 of the Credit Agreement.
(c) The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any course of
dealing, or by any other means not provided for in
Exhibit D - 1
<PAGE> 138
Section 8.1 of the Credit Agreement. The Credit Agreement and the other Loan
Documents are hereby ratified, approved, and confirmed in all respects.
(d) The undersigned Borrower further agrees that if, on or prior to
the date of the commencement of the Interest Period designated herein, any
matter certified herein by it will not be true and correct at such time as if
such certification were then made, it will immediately so notify Administrative
Agent. Except to the extent, if any, that prior to the commencement of the
Interest Period designated herein Administrative Agent shall receive written
notice to the contrary from the undersigned Borrower, each matter certified
herein shall be deemed to be certified as of the date of the commencement of
such Interest Period as if then made.
The Designated Officer of the undersigned Borrower signing this
instrument hereby certifies that, to the best of his knowledge, the above
representations, warranties, acknowledgments and agreements of the undersigned
Borrower are true, correct and complete.
PIONEER NATURAL RESOURCES
COMPANY
By:
--------------------------
Name:
Title:
Exhibit D - 2
<PAGE> 139
Exhibit E
Form of Request for Swing Line Advance
VIA FACSIMILE # (214) 508-2515
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn: Mickey McLean
Reference is made to the 364 Day Credit Facility pursuant to that certain
Amended and Restated Credit Facility Agreement dated as of December 18, 1997 by
and among Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC
Inc., as Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the Co-
Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"),. Capitalized terms used herein and not otherwise defined
herein shall have the meaning assigned in the Credit Agreement.
In accordance with Section 2.5, the undersigned hereby requests a Swing
Line Advance in an amount of $___________________ to be advanced today,
________ _________________. We request this advance be for a period of
________ day(s), maturing on ___________________.
If you have any questions regarding this request, please contact the
undersigned at (915) _____________.
PIONEER NATURAL RESOURCES
COMPANY
By:
---------------------------
Name:
Title:
Exhibit E - 1
<PAGE> 140
Exhibit F
Form of Swing Line Participation Certificate
__________________ ,199__
[Name of Bank]
__________________________
__________________________
__________________________
Gentlemen:
Reference is made to the Primary Credit Facility pursuant to that
certain Amended and Restated Credit Facility Agreement dated as of December 18,
1997 by and among Borrower, NationsBank of Texas, N.A., as Administrative
Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New
York, as Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders from time to time parties thereto
(the "Credit Agreement"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned in the Credit Agreement.
Pursuant to subsection 2.6(b)(i) of the Credit Agreement, the
undersigned hereby acknowledges receipt from you on the date hereof of
_______________________ DOLLARS ($______________) as payment for a
participating interest in the following Swing Line Advance(s):
Date(s) of Swing Line Advance(s): ______________, 199__
Principal Amount of Swing Line Advance(s): $____________________
Very truly yours,
NATIONSBANK OF TEXAS, N.A., as
Swing Line Lender
By
----------------------------
Name:
Title:
Exhibit F - 1
<PAGE> 141
Exhibit G
[INTENTIONALLY OMITTED]
Exhibit G - 1
<PAGE> 142
Exhibit H
Forms of Opinion of Borrower's and Restricted Subsidiaries' Counsel
Exhibit G - 2
<PAGE> 143
Exhibit I
Organization Chart of Borrower and its Subsidiaries
Exhibit I has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Exhibit I - 1
<PAGE> 144
Exhibit J
Form of Designated Officer's Certificate
Reference is made to (i) the Primary Credit Facility pursuant to that
certain Amended and Restated Credit Facility Agreement dated as of December 18,
1997 by and among Borrower, NationsBank of Texas, N.A., as Administrative
Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New
York, as Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders from time to time parties thereto
(the "Primary Credit Agreement") and (ii) the 364 Day Credit Facility pursuant
to that certain Amended and Restated Credit Facility Agreement dated as of
December 18, 1997 by and among Borrower, NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, the Co-Agents party thereto, and the Lenders from time to
time parties thereto (the "364 Day Credit Agreement" and, together with the
Primary Credit Facility, the "Credit Agreements") Terms which are defined in
the Credit Agreements and which are used but not defined herein are used herein
with the meanings given them in the Credit Agreements.
This Certificate is furnished pursuant to Section 5.1(b)(2) of the
Credit Agreements. Together herewith the Borrower is furnishing to Managing
Agents, the Co-Agents and each Lender the Borrower's [FINANCIAL STATEMENTS]
(the "Financial Statements") as of ______________(the "Reporting Date"). The
Borrower hereby represents, warrants, and acknowledges to Agents and each
Lender that:
(a) the Designated Officer of the Borrower signing this instrument is
a duly elected, qualified and acting officer of the Borrower;
(b) the Financial Statements are accurate and complete and satisfy
the requirements of the Credit Agreements;
(c) attached as Schedule I hereto is a schedule of calculations
showing compliance (or noncompliance, as the case may be) as of
the Reporting Date with the requirements of Section 5.3 of the
Credit Agreements; and
(d) on the Reporting Date, each Borrower was, and on the date hereof
the Borrower is, in full compliance with the disclosure
requirements of Section 5.1(d) of the Credit Agreements, and no
Default otherwise existed on the Reporting Date or otherwise
exists on the date of
Exhibit J - 1
<PAGE> 145
this Certificate [except for Default(s) under Section(s)
_________ ______ of the Credit Agreements, which [is/are] more
fully described on a schedule attached hereto].
The Designated Officer of the Borrower signing this instrument hereby
certifies that he has reviewed the Loan Documents and the Financial Statements
and has otherwise undertaken such inquiry as is in his opinion necessary to
enable him to express an informed opinion with respect to the above
representations, warranties and acknowledgments of the Borrower and, to the
best of his knowledge, such representations, warranties, and acknowledgments
are true, correct and complete.
PIONEER NATURAL RESOURCES
COMPANY
By:
---------------------------
Name:
Title:
Date:
-------------------------
Exhibit J - 2
<PAGE> 146
Schedule I
================================================================================
COMPLIANCE WITH FINANCIAL COVENANTS AS OF _____________. ($ in 000's)
================================================================================
A. EBITDAX TO CONSOLIDATED INTEREST EXPENSE RATIO
Minimum ratio allowed 3.75
============
B. CONSOLIDATED TOTAL FUNDED DEBT TO TOTAL
CAPITALIZATION
Maximum ratio allowed 60%
============
================================================================================
COMPUTATION OF FINANCIAL REQUIREMENTS AND RATIOS AS OF _____________
================================================================================
A. EBITDAX TO CONSOLIDATED INTEREST EXPENSE RATIO
(Section 5.3(a)) ($ in 000's)
(i) EBITDAX (as defined in Section 5.3(a))
For the period ended __________, the sums
of the amounts for such period of
Consolidated net income, Consolidated
Interest Expense, depreciation expense,
depletion expense, amortization expense,
federal and state income taxes,
exploration and abandonment expense and
other non-cash charges and expenses, all
as determined on a Consolidated basis for
Borrower and its Consolidated
Subsidiaries; $______________
(ii) CONSOLIDATED INTEREST EXPENSE
(as defined in Section 5.3(a))
For the period ended ___________________,
total interest expense,
Exhibit J - 3
<PAGE> 147
whether paid or accrued, of Borrower and
its Consolidated Subsidiaries on a
Consolidated basis, including, without
limitation, all commissions, discounts
and other fees and charges owed with
respect to Letters of Credit. $______________
CONSOLIDATED INTEREST EXPENSE
$
==============
EBITDAX TO CONSOLIDATED INTEREST EXPENSE RATIO ((i)(ii))
$
==============
Minimum ratio allowed $ 3.75:1
==============
B. CONSOLIDATED TOTAL FUNDED DEBT TO TOTAL
CAPITALIZATION (Section 5.3(b)) ($ in 000's)
(i) CONSOLIDATED TOTAL FUNDED DEBT
(as defined in Section 1.1)
(a) All indebtedness of Borrower and
its Consolidated Subsidiaries for
borrowed money $_____________
(b) Plus indebtedness of Borrower and
its Consolidated Subsidiaries
constituting an obligation to pay
the deferred purchase price of
property or services (other than
customary payment terms taken in
the ordinary course of the
business) $_____________
(c) Plus indebtedness of Borrower and
its Consolidated Subsidiaries
evidenced by a bond, debenture,
note or similar instrument $_____________
(d) Plus principal obligations under
leases capitalized in accordance
with GAAP under which either
Borrower or any of its
Consolidated Subsidiaries is the
lessee $_____________
(e) Plus indebtedness or obligations
of the type described in clauses
(a), (b), (c) or (d) of the
definition of Debt, which are
secured by a Lien on any property
owned by Borrower or any of its
Consolidated Subsidiaries, whether
or not such indebtedness or
obligations have been assumed by
Borrower or any of its
Consolidated Subsidiaries (limited
however to the lesser of (1) the
amount of its liability or (2) the
value
Exhibit J - 4
<PAGE> 148
of such property) (excluding Debt
of the type referred to in clause
(e) of the definition of "Debt") $_____________
(f) Plus the undischarged balance of
any production payment created by
Borrower or any of its
Consolidated Subsidiaries or for
the creation of which Borrower or
its Consolidated Subsidiaries
directly or indirectly received
payment. $_____________
CONSOLIDATED TOTAL FUNDED DEBT $
=============
(ii) TOTAL CAPITALIZATION (as defined in Section 1.1)
(a) Consolidated Total Funded Debt of
the Borrower and its Consolidated
Subsidiaries (See B(i) above) $_____________
(b) Plus Consolidated shareholders'
equity of the Borrower and its
Consolidated Subsidiaries $_____________
TOTAL CAPITALIZATION
$
=============
CONSOLIDATED TOTAL FUNDED DEBT TO TOTAL
CAPITALIZATION((i)/(ii)) %
=============
Maximum ratio 60%
=============
Exhibit J - 5
<PAGE> 149
Exhibit K-1
Form of Election to Convert
___________________, _______
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn: Mickey McLean
Re: Conversion of Restricted Subsidiary
Gentlemen:
Reference is made to (i) that certain Amended and Restated Credit
Facility Agreement dated as of December 18, 1997 by and among Borrower,
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the Co-
Agents party thereto, and the Lenders from time to time parties thereto (the
"Primary Credit Agreement") and (ii) that certain Amended and Restated Credit
Facility Agreement dated as of December 18, 1997 by and among Borrower,
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the Co-
Agents party thereto, and the Lenders from time to time parties thereto (the
"364 Day Credit Agreement" and, together with the Primary Credit Agreement, the
"Credit Agreements"). Terms not defined herein which are defined in the Credit
Agreement shall have for the purposes hereof the meanings provided therein.
The Borrower hereby elects, pursuant and subject to Section 5.2(i) of
the Credit Agreements, to convert, effective as of ________________, ________,
[NAME OF RESTRICTED SUBSIDIARY], a [JURISDICTION] [CORPORATION] [PARTNERSHIP],
("Subject Subsidiary"), from a Restricted Subsidiary to an Unrestricted
Subsidiary. The Borrower hereby certifies that all requirements for the
conversion of the Subject Subsidiary to an Unrestricted Subsidiary, as
specified in the Credit Agreements, have been and will be met, both as of the
date hereof and after giving effect to such conversion. After giving effect to
such conversion, no Default will exist. The Borrower hereby agrees that the
election to convert contained herein shall not be effective if the foregoing
certifications are not true and correct in all respects as of the date hereof
or are not true and correct in all respects as of the date of such conversion.
This election to convert
Exhibit K-1 - 1
<PAGE> 150
shall not affect any obligation of the Borrower under the Credit Agreements or
under any Note under any Credit Agreement.
This instrument shall be construed in accordance with and governed by
the laws of the State of Texas.
PIONEER NATURAL RESOURCES
COMPANY
By:
---------------------------
Name:
Title:
Receipt of the above Election to Convert is hereby acknowledged on
______ ________, ________.
NATIONSBANK OF TEXAS, N.A., as
Administrative Agent
By:
---------------------------
Name:
Title:
Exhibit K-1 - 2
<PAGE> 151
Exhibit K-2
Form of Release
This Release is delivered to [NAME OF SUBSIDIARY] in connection with (i)
the Primary Credit Facility pursuant to Section 5.2(i) of that certain Amended
and Restated Credit Facility Agreement dated as of December 18, 1997 by and
among Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the Co-
Agents party thereto, and the Lenders from time to time parties thereto (the
"Primary Credit Agreement"), and (ii) the 364 Day Credit Facility pursuant to
Section 5.2(i) of that certain Amended and Restated Credit Facility Agreement
dated as of December 18, 1997 by and among Borrower, NationsBank of Texas,
N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (the "364 Day Credit Agreement" and, together with
the Primary Credit Agreement, the "Credit Agreements"). Defined terms used in
this Release shall be used with the same meanings set forth in the Credit
Agreements.
Pursuant to the election to convert in the form of Exhibit K-1 to the
Credit Agreements delivered to Administrative Agent on ______________________,
19 _____, the Borrower has notified the Lenders that it has converted
__________ _______ [NAME OF SUBSIDIARY] from a Restricted Subsidiary to an
Unrestricted Subsidiary. Subject to the accuracy of the information contained
in such notice of conversion, the undersigned Managing Agents and Lenders
hereby release __________________________________ [NAME OF FORMER RESTRICTED
SUBSIDIARY] from its obligations as Guarantor under its Guaranty dated as of
___ ________, 199__, as from time to time amended, modified and supplemented,
other than obligations if any, pursuant to Section _____ thereof.
This Release may be separately executed in any number of counterparts
and by different parties hereto on separate counterparts, each of which when so
executed shall be deemed to constitute one and the same release.
[Add signature lines for Lenders and
Managing Agents]
Agreed and Accepted
this day of , 199 :
--- ---------- --
- ---------------------------------------
[Name of Restricted Subsidiary]
By:
---------------------------
Name:
Title:
Exhibit K-2 - 1
<PAGE> 152
Exhibit L
Form of Agreement to be Bound
_____________, 199____
PIONEER NATURAL RESOURCES COMPANY
303 West Wall, Suite 101
Midland, Texas 79701
Attention: Curt F. Kamradt
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attention: Mickey McLean
NationsBank of Texas, N.A.
303 West Wall Street
Midland, Texas 79701
Attn: Frank K. Stowers
CIBC Inc.
2 Houston Center
909 Fannin Street, Suite 1200
Houston, Texas 77010
Attention: Paul Jordan
Re: Assignment to ______________________________of
___________________________________the Loans of
_____________________ - 364 Day Credit Facility
Gentlemen:
We refer to Section 8.8(a) of that certain Amended and Restated Credit
Facility Agreement dated as of December 18, 1997 by and among Borrower,
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the Co-
Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"). Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the Credit Agreement.
This Credit Agreement to be Bound constitutes notice to each of you,
pursuant to Section 8.8(a) of the Credit Agreement, of the assignment to
_______________________ ("Assignee") of (i) an undivided _____ (the "Designated
Percentage"), ($____________________________), of the Loans and Commitments of
[NAME OF LENDER] ("Assignor") in effect on the date hereof.
Exhibit L - 1
<PAGE> 153
After giving effect to the foregoing assignment, the Loan Commitment and
Percentage Share of each of the Assignor and Assignee is as set forth beneath
the signatures of each such Person below.
Assignee hereby acknowledges and confirms that it has received a copy of
the Credit Agreement and the exhibits related thereto, together with a copy of
all documents which were required to be delivered under the Credit Agreement as
a condition to the making of the Loans thereunder. Assignee further confirms
and agrees that in becoming a Lender and in making its Loans under the Credit
Agreement, such actions have and will be made without recourse to, or
representation or warranty by, Assignor, except as expressly set forth in the
Assignment and Assumption of even date herewith between Assignor and Assignee.
Assignor and Assignee hereby agree that [ASSIGNOR/ASSIGNEE] will pay the
processing fee referred to in Section 8.8(a) of the Credit Agreement to
Administrative Agent upon the delivery thereof. It is understood and agreed
that all fees accrued under the Credit Agreement to the date hereof are for
Assignor's account and those accruing from and after the date hereof are for
Assignee's account to the extent specified in the second paragraph hereof.
Each of Assignor and Assignee hereby agree that if it receives any amount under
the Credit Agreement which is for the account of the other, it shall receive
and hold the same for the account of the other and shall promptly pay the same
to the other.
The assignment shall become effective upon (i) the receipt by the
Borrower and Administrative Agent of this document, (ii) the receipt by
Administrative Agent of the processing fee referred to in the preceding
paragraph, and (iii) in accordance with Section 8.8(a) of the Credit Agreement,
the consent of the Borrower and Administrative Agent.
Upon the effective date of this Credit Agreement the Assignee:
(a) shall have all rights and benefits of a "Lender" under the Credit
Agreement as if it were an original signatory thereto to the extent specified
in the second paragraph hereof; and
(b) agrees to be bound by the terms and conditions of each of the
Credit Agreement, and be obligated thereunder, and hereby makes each of the
representations and warranties and acknowledgments contained in such documents
as if it were an original signatory thereto.
Exhibit L - 2
<PAGE> 154
Upon the effective date of this Agreement, the Assignor shall be
released from its obligations under the Credit Agreement and the other Loan
Documents to the extent specified in the second paragraph.
Assignee hereby advises each of you of the following matters with
respect to the assigned Loans:
(A) Addresses for Notice:
-----------------------------
Telephone:
----------------------------------------
Telecopy:
-----------------------------------------
Institution Name:
---------------------------------
Attention:
----------------------------------------
(B) Payment Instructions:
---------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
This Credit Agreement may be executed by Assignor and Assignee in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
The execution below by the Borrower and Administrative Agent shall
evidence their consent to this Agreement in accordance with Section 8.8(a) of
the Credit Agreement.
Exhibit L - 3
<PAGE> 155
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to
be executed by its official, officer or agent thereunto duly authorized,
effective as of ______________, ________.
- ---------------------------- -------------------------------------
As Assignor As Assignee
By: By:
------------------------- ----------------------------------
Name: Name:
Title: Title:
Percentage Share: % Percentage Share: %
---------- -----------------
Loan Commitment: Loan Commitment:
---------- ------------------
APPROVED:
PIONEER NATURAL RESOURCES NATIONSBANK OF TEXAS, N.A.
COMPANY
By: By:
------------------------- ----------------------------------
Name: Name:
Title: Title:
Exhibit L - 4
<PAGE> 156
Exhibit M
[Form of]
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of ___________
, 199__, made by ______________________, a __________________ corporation
("Pledgor"), in favor of NATIONSBANK OF TEXAS, N.A., as collateral agent
(together with any successor(s) thereto in such capacity, the "Collateral
Agent") for each of Lender Parties (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Pioneer Natural Resources
Company, a Delaware corporation ("Borrower"), NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, the Co-Agents party thereto, and the Lenders from time to
time parties thereto (together with all amendments, supplements, restatements
and other modifications, if any, thereafter made thereto, the "Primary Credit
Agreement"), the Lenders have extended Commitments (as defined in the Primary
Credit Agreement) to make Loans to Borrower and to issue or participate in
Letters of Credit on behalf of Borrower; and
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (together with all amendments, supplements,
restatements and other modifications, if any, thereafter made thereto, the "364
Day Credit Agreement", and together with the Primary Credit Agreement, the
"Credit Agreements"), the Lenders have extended Commitments (as defined in the
364 Day Credit Agreement) to make Loans to Borrower; and
WHEREAS, pursuant to the Credit Agreements, Pledgor is required to
execute and deliver this Pledge Agreement; and
WHEREAS, Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
WHEREAS, it is in the best interests of Pledgor to execute this Pledge
Agreement inasmuch as Pledgor will derive substantial direct and indirect
benefits from the Loans made from time to
Exhibit M - 1
<PAGE> 157
time to Borrower and Letters of Credit issued on behalf of Borrower pursuant to
the Credit Agreements;
NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce the Lenders to make Loans
(including the initial Loans) to Borrower pursuant to the Credit Agreements and
for the Issuing Bank to issue Letters of Credit on behalf of Borrower and for
the Lenders to acquire participations in such Letters of Credit pursuant to the
Primary Credit Agreement, Pledgor agrees, for the benefit of each Lender Party,
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the first recital.
"Borrower" is defined in the first recital.
"Collateral" is defined in Section 2.1.
"Collateral Agent" is defined in the preamble.
"Commitments" means "Commitments" as defined in the Primary Credit
Agreement and "Commitments" as defined in the 364 Day Credit Agreement.
"Credit Agreements" is defined in the second recital.
"Debtor" is defined in Section 2.1(a)(i).
"Distributions" means all stock dividends, liquidating dividends, shares
of stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock or security entitlements constituting Collateral, but shall not
include Dividends.
"Dividends" means cash dividends and cash distributions with respect to
any Pledged Shares made in the ordinary course of business and not a
liquidating dividend.
Exhibit M - 2
<PAGE> 158
"Lender Party" means, as the context may require, any Lender, any
Issuing Bank or any Agent and each of its respective successors, transferees
and assigns under the Credit Agreements.
"Lenders" means "Lenders" as defined in the Primary Credit Agreement and
"Lenders" as defined in the 364 Day Credit Agreement.
"Loan Documents" means "Loan Documents" as defined in the Primary Credit
Agreement and "Loan Documents" as defined in the 364 Day Credit Agreement.
"1994 Amendments" means the 1994 Amendments to Articles 8 and 9 of the
Uniform Commercial Code promulgated by the American Law Institute and the
National Conference of Commissions for Uniform State Laws.
"Notes" means "Notes" as defined in the Primary Credit Agreement and
"Notes" as defined in the 364 Day Credit Agreement.
"Obligations" means "Obligations" as defined in the Primary Credit
Agreement and "Obligations" as defined in the 364 Day Credit Agreement.
"Pledge Agreement" is defined in the preamble.
"Pledged Share Issuer" means each Person identified in Attachment 1
hereto as the issuer of the Pledged Shares identified opposite the name of such
Person.
"Pledged Shares" means all shares of capital stock of any Pledged Share
Issuer which are delivered by Pledgor to Collateral Agent hereunder and all
other pledged shares of capital stock from time to time hereafter delivered by
Pledgor to Collateral Agent for the purpose of pledge under this Pledge
Agreement or any other Loan Document, and all proceeds of any of the foregoing.
"Pledgor" is defined in the preamble.
"Primary Credit Agreement" is defined in the first recital.
"Secured Obligations" is defined in Section 2.2.
"Securities Act" is defined in Section 6.2.
"364 Day Credit Agreement" is defined in the second recital.
"U.C.C." means the Uniform Commercial Code as in effect in the State of
Texas.
Exhibit M - 3
<PAGE> 159
SECTION 1.2. Primary Credit Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Pledge
Agreement, including its preamble and recitals, have the meanings provided in
the Primary Credit Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or
the context otherwise requires, terms for which meanings are provided in the
U.C.C. are used in this Pledge Agreement, including its preamble and recitals,
with such meanings.
ARTICLE II
PLEDGE
SECTION 2.1. Grant of Security Interest. Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to
Collateral Agent, for its benefit and the ratable benefit of each of Lender
Parties, and hereby grants to Collateral Agent, for its benefit and the ratable
benefit of Lender Parties, a continuing security interest in, all of the
following property (the "Collateral"):
(a) 65% of the issued and outstanding shares of capital stock
of each Pledged Share Issuer identified in Item B of Attachment 1
hereto;
(b) 65% of all other Pledged Shares issued from time to time;
(c) all Dividends, Distributions, interest, and other payments
and rights with respect to any Pledged Shares; and
(d) all proceeds of any of the foregoing.
SECTION 2.2. Security for Obligations. This Pledge Agreement secures:
(a) the payment in full of all Obligations of Borrower now or
hereafter existing under the Credit Agreements, the Notes, the LC
Applications and each other Loan Document to which Borrower is or may
become a party, whether for principal, interest, costs, fees, expenses,
or otherwise, and all obligations of Pledgor and each other Designated
Entity now or hereafter existing under this Pledge Agreement and each
other Loan Document to which it is or may become a party
(b) the payment and performance of any and all present or
future obligations of Borrower according to the terms of any present or
future rate swap, rate cap, rate floor, rate
Exhibit M - 4
<PAGE> 160
collar, currency exchange transaction, forward rate agreement, or other
exchange or rate protection agreements or any option with respect to any
such transaction now existing or hereafter entered into between Borrower
or any of its Subsidiaries and one or more of the Lenders or their
Affiliates ("interest rate swap agreement");
(c) the payment and performance of any and all present or
future obligations of Borrower according to the terms of any present or
future crude oil, natural gas or other hydrocarbons swap agreements,
crude oil, natural gas or other hydrocarbons cap, crude oil, natural gas
or other hydrocarbons floor, crude oil, natural gas or other
hydrocarbons collar, crude oil, natural gas or other hydrocarbons
exchange transaction, forward crude oil, natural gas or other
hydrocarbons agreement, or other exchange or crude oil, natural gas or
other hydrocarbons protection agreements or any option with respect to
any such transaction now existing or hereafter entered into between
Borrower or any of its Subsidiaries and one or more of the Lenders or
their Affiliates; and
(d) all renewals, rearrangements, increases, extensions for
any period, substitutions, modification, amendments or supplements in
whole or in part of any of the above loan documents or obligations
(all such obligations of Borrower and Pledgor being the "Secured
Obligations").
SECTION 2.3. Delivery of Pledged Shares. (a) All certificates or
instruments representing or evidencing any Collateral, including all Pledged
Shares shall be delivered to and held by or on behalf of Collateral Agent
pursuant hereto, shall be in suitable form for transfer by delivery, and shall
be accompanied by all necessary indorsements or instruments of transfer or
assignment, duly executed in blank.
(b) (i) To the extent any of the Collateral constitutes
"uncertificated securities" (as defined in Section 8-102(a)(18) of the
U.C.C. or Section 8-102 of the Uniform Commercial Code as in effect in
any jurisdiction that has not adopted the 1994 Amendments) and the
issuer of which is organized in a jurisdiction, or has selected a
jurisdiction (in circumstances permitted by Section 8-110(d) of the
U.C.C.), that has not enacted the 1994 Amendments, Pledgor shall cause
the issuer thereof to acknowledge to Collateral Agent the registration
on the books of such issuer of the pledge and security interest hereby
created in the manner required by Section 8-408(d) of the Uniform
Commercial Code of its jurisdiction of organization.
Exhibit M - 5
<PAGE> 161
(ii) To the extent any of the Collateral constitutes
"uncertificated securities" (as defined in Section 8-102(a)(18) of the
U.C.C.) and the issuer of which is organized in a jurisdiction, or has
selected a jurisdiction (in circumstances permitted by Section 8-110(d)
of the U.C.C.), that has enacted the 1994 Amendments, Pledgor shall
cause the issuer thereof to acknowledge to Collateral Agent the
registration on the books of such issuer of the pledge and security
interest hereby created in the manner required by Section 8-301(1)(b) of
the U.C.C.
(c) (i) To the extent any of the Collateral constitutes a "security
entitlement" or a "securities account" (as such terms are defined in
Sections 8-102(a)(17) and 8-501, respectively, of the U.C.C.) and the
jurisdiction of the securities intermediary (as described in Section 8-
110(e) of the U.C.C.) against which such securities entitlement is
established or at which such securities account is maintained is not a
jurisdiction that has adopted the 1994 Amendments, Pledgor shall cause
such Collateral to be transferred to Collateral Agent pursuant to
Section 8-313(1) of the Uniform Commercial Code as in effect in such
jurisdiction in a manner satisfactory to Collateral Agent.
(ii) To the extent any of the Collateral constitutes a "security
entitlement" or a "securities account" (as such terms are defined in
Sections 8-102(a)(17) and 8-501, respectively, of the U.C.C.) and the
jurisdiction of the securities intermediary (as described in Section 8-
110(e) of the U.C.C.) against which such securities entitlement is
established or at which such securities account is maintained is a
jurisdiction that has adopted the 1994 Amendments, Pledgor shall cause
to be delivered to Collateral Agent an agreement, in form and substance
satisfactory to Collateral Agent, executed by such securities
intermediary whereby such securities intermediary agrees (i) that it
will comply with entitlement orders originated by Collateral Agent
without further consent by Pledgor with respect to all such Collateral
(it being understood that such agreement may provide that at all times
when such securities intermediary has not been notified that a Default
is in existence, the securities intermediary may comply with entitlement
orders of Pledgor), (ii) to subordinate any security interest it may
have in and to all such Collateral to the security interest of
Collateral Agent therein and (iii) that it will not agree with any
Person other than Collateral Agent in any manner that would grant such
Person "control" over any such Collateral.
SECTION 2.4. Dividends on Pledged Shares. In the event that any
Dividend is to be paid on any Pledged Share or securities
Exhibit M - 6
<PAGE> 162
entitlement at a time when (x) no Default has occurred and is continuing, and
no (y) Event of Default has occurred and is continuing, such Dividend or
payment may be paid directly to Pledgor. If any such Default or Event of
Default has occurred and is continuing, then any such Dividend or payment shall
be paid directly to Collateral Agent.
SECTION 2.5. Continuing Security Interest; Transfer of Note. This
Pledge Agreement shall create a continuing security interest in the Collateral
and shall
(a) remain in full force and effect until payment in full of
all Secured Obligations and the termination of all Commitments,
(b) be binding upon Pledgor and its successors, transferees
and assigns, and
(c) inure, together with the rights and remedies of Collateral
Agent hereunder, to the benefit of Collateral Agent and each other
Lender Party.
Without limiting the foregoing clause (c), any Lender may assign or otherwise
transfer (in whole or in part) any Note or Loan held by it to any other Person
or entity, and such other Person or entity shall thereupon become vested with
all the rights and benefits in respect thereof granted to such Lender under any
Loan Document (including this Pledge Agreement) or otherwise, subject, however,
to any contrary provisions in such assignment or transfer, and to the
provisions of Section 8.8 of the Credit Agreements and Article VII of the
Credit Agreements. Upon the payment in full of all Secured Obligations and the
termination of all Commitments, the security interest granted herein shall
terminate and all rights to the Collateral shall revert to Pledgor. Upon any
such termination, Collateral Agent will, at Pledgor's sole expense, deliver to
Pledgor, without any representations, warranties or recourse of any kind
whatsoever, all certificates and instruments representing or evidencing all
Pledged Shares, together with all other Collateral held by Collateral Agent
hereunder, and execute and deliver to Pledgor such documents as Pledgor shall
reasonably request to evidence such termination.
SECTION 2.6. Security Interest Absolute. All rights of Collateral
Agent and the security interests granted to Collateral Agent hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional,
irrespective of (a) any lack of validity or enforceability of the Credit
Agreements, any Note or any other Loan Document, (b) the failure of any Lender
Party or any holder of any Note, (i) to assert any claim or demand or to
enforce any right or remedy against Borrower, any other
Exhibit M - 7
<PAGE> 163
Designated Entity or any other Person under the provisions of the Credit
Agreements, any Note, any other Loan Document or otherwise, or (ii) to exercise
any right or remedy against any other guarantor of, or collateral securing, any
Obligations of Borrower or any other Designated Entity, (c) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations or any other extension, compromise or renewal of any Obligation of
Borrower or any other Designated Entity, (d) any reduction, limitation,
impairment or termination of any Obligations of Borrower or any other
Designated Entity for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and Pledgor
hereby waives any right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligations of Borrower, any other
Designated Entity or otherwise, (e) any amendment to, rescission, waiver, or
other modification of, or any consent to departure from, any of the terms of
the Credit Agreements, any Note or any other Loan Document, (f) any addition,
exchange, release, surrender or non-perfection of any collateral (including the
Collateral), or any amendment to or waiver or release of or addition to or
consent to departure from any guaranty, for any of the Obligations, or (g) any
other circumstances which might otherwise constitute a defense available to, or
a legal or equitable discharge of, Borrower, any other Designated Entity, any
surety or any guarantor.
SECTION 2.7. Waiver of Subrogation. Pledgor hereby irrevocably waives
any claim or other rights which it may now or hereafter acquire against
Borrower or any other Designated Entity that arise from the existence, payment,
performance or enforcement of Pledgor's obligations under this Pledge Agreement
or any other Loan Document, including any right of subrogation, reimbursement,
exoneration, or indemnification, any right to participate in any claim or
remedy of Lender Parties against Borrower or any other Designated Entity or any
collateral which Collateral Agent now has or hereafter acquires, whether or not
such claim, remedy or right arises in equity, or under contract, statute or
common law, including the right to take or receive from Borrower or any other
Designated Entity, directly or indirectly, in cash or other property or by set-
off or in any manner, payment or security on account of such claim or other
rights. If any amount shall be paid to Pledgor in violation of the preceding
sentence and the Obligations shall not have been paid in cash in full and the
Commitments have not been terminated, such amount shall be deemed to have been
paid to Pledgor for the benefit of, and held in trust for, Lender Parties, and
shall forthwith be paid to Lender Parties to be credited and applied upon the
Obligations, whether matured or
Exhibit M - 8
<PAGE> 164
unmatured. Pledgor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by the Credit Agreements
and that the waiver set forth in this Section is knowingly made in
contemplation of such benefits.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Warranties, etc. Pledgor represents and warrants unto
each Lender Party, as at the date of each pledge and delivery hereunder
(including each pledge and delivery of Pledged Shares) by Pledgor to Collateral
Agent of any Collateral, as set forth in this Article.
SECTION 3.1.1. Representations in Credit Agreement. Pledgor
hereby incorporates by reference, mutatis mutandi, each of the representations
and warranties made in Sections 4.1(a), (b), (c), (d) and (e) of the Credit
Agreement.
SECTION 3.1.2. Ownership, No Liens, etc. Pledgor is the legal and
beneficial owner of, and has good title to (and has full right and authority to
pledge and assign) such Collateral, free and clear of all liens, security
interests, options, or other charges or encumbrances, except any lien or
security interest granted pursuant hereto in favor of Collateral Agent.
SECTION 3.1.3. Valid Security Interest. The delivery of such
Collateral to Collateral Agent is effective to create a valid, perfected, first
priority security interest in such Collateral and all proceeds thereof,
securing the Secured Obligations. No filing or other action will be necessary
to perfect or protect such security interest.
SECTION 3.1.4. As to Pledged Shares. In the case of any Pledged
Shares constituting such Collateral, all of such Pledged Shares are duly
authorized and validly issued, fully paid, and non-assessable, and constitute
65% of the issued and outstanding shares of capital stock of each Pledged Share
Issuer owned by Pledgor set forth across from the name of such Pledged Share
Issuer on Attachment 1 hereto. Pledgor has no Restricted Subsidiary other than
the Pledged Share Issuers.
SECTION 3.1.5. Authorization, Approval, etc. Except as
contemplated by Section 2.3(b) and (c), no authorization, approval, or other
action by, and no notice to or filing with, any governmental authority,
regulatory body or any other Person is required either (a) for the pledge by
Pledgor of any Collateral pursuant to this Pledge Agreement or for the
execution, delivery, and performance of this Pledge Agreement by Pledgor, or
(b) for the exercise by Collateral Agent of the rights provided for in this
Pledge Agreement, or, except with
Exhibit M - 9
<PAGE> 165
respect to any Pledged Shares, as may be required in connection with a
disposition of such Pledged Shares by laws affecting the offering and sale of
securities generally, the remedies in respect of the Collateral pursuant to
this Pledge Agreement.
ARTICLE IV
COVENANTS
SECTION 4.1. Protect Collateral; Further Assurances, etc. Pledgor will
not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral (except in favor of Collateral Agent hereunder). Pledgor will
warrant and defend the right and title herein granted unto Collateral Agent in
and to the Collateral (and all right, title and interest represented by the
Collateral) against the claims and demands of all Persons whomsoever. Pledgor
agrees that at any time, and from time to time, at the expense of Pledgor,
Pledgor will promptly execute and deliver all further instruments, and take all
further action, that may be necessary or desirable, or that Collateral Agent
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Pledgor shall provide Collateral Agent with copies of all written
information received from any securities intermediary of Pledgor with respect
to any Collateral.
SECTION 4.2. Stock Powers, etc. Pledgor agrees that all Pledged Shares
(and all other shares of capital stock constituting Collateral) delivered by
Pledgor pursuant to this Pledge Agreement will be accompanied by duly indorsed
undated blank stock powers, in substantially the form of Attachment 2 hereto,
or other equivalent instruments of transfer acceptable to Collateral Agent.
Pledgor will, from time to time upon the request of Collateral Agent, promptly
deliver to Collateral Agent such stock powers, in substantially the form of
Attachment 2, instruments and similar documents, satisfactory in form and
substance to Collateral Agent, with respect to the Collateral as Collateral
Agent may reasonably request and will, from time to time upon the request of
Collateral Agent after the occurrence of any Event of Default, promptly
transfer any Pledged Shares or other shares of common stock constituting
Collateral into the name of any nominee designated by Collateral Agent.
SECTION 4.3. Continuous Pledge. Subject to Section 2.4, the Pledgor
will, at all times, keep pledged to Collateral Agent pursuant hereto all
Pledged Shares, all other shares of capital stock constituting Collateral, and
all securities, security entitlements and securities accounts constituting
Collateral and all other Collateral and other securities, instruments, security
entitlements, financial assets, investment property, proceeds,
Exhibit M - 10
<PAGE> 166
and rights from time to time received by or distributable to Pledgor in respect
of any Collateral.
SECTION 4.4. Dividends, etc. Pledgor agrees after any acceleration
under the Credit Agreements or Default occurring on the Maturity Date, promptly
upon receipt thereof by Pledgor and without any request therefor by Collateral
Agent, to deliver (properly endorsed where required hereby or requested by
Collateral Agent) to Collateral Agent all Dividends, Distributions, all
interest, all principal, all other cash payments, and all proceeds of the
Collateral, all of which shall be held by Collateral Agent as additional
Collateral for use in accordance with Section 6.3. All Dividends,
Distributions, interest, principal, cash payments, and proceeds which may at
any time and from time to time be held by Pledgor but which Pledgor is then
obligated to deliver to Collateral Agent, shall, until delivery to Collateral
Agent, be held by Pledgor separate and apart from its other property in trust
for Collateral Agent.
SECTION 4.5. Additional Undertakings. Pledgor will not, without the
prior written consent of Collateral Agent, take or omit to take any action the
taking or the omission of which would result in any impairment or alteration of
the security interest in the Pledged Shares.
ARTICLE V
COLLATERAL AGENT
SECTION 5.1. Agent Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints Collateral Agent Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor or
otherwise, from time to time in Collateral Agent's discretion, to take any
action and to execute any writing or paper which Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Pledge Agreement,
including without limitation: (a) after the occurrence and continuance of an
Event of Default, to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral; (b) to receive, endorse, and
collect any drafts or other instruments, documents and chattel paper, in
connection with clause (a) above; and (c) to file any claims or take any action
or institute any proceedings which Collateral Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to enforce
the rights of Collateral Agent with respect to any of the Collateral. Pledgor
hereby acknowledges, consents and agrees that the power of attorney granted
pursuant to this Section is irrevocable and coupled with an interest.
Exhibit M - 11
<PAGE> 167
SECTION 5.2. Agent May Perform. If Pledgor fails to perform any
agreement contained herein, Collateral Agent may itself perform, or cause
performance of, such agreement, and the expenses of Collateral Agent incurred
in connection therewith shall be payable by Pledgor pursuant to Section 6.4.
SECTION 5.3. Agent Has No Duty. The powers conferred on Collateral
Agent hereunder are solely to protect its interest (on behalf of Lender
Parties) in the Collateral and shall not impose any duty on it to exercise any
such powers. Except for reasonable care of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, Collateral
Agent shall have no duty as to any Collateral or responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Shares, whether or
not Collateral Agent has or is deemed to have knowledge of such matters or (b)
taking any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. Collateral Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as Pledgor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default, but failure of Collateral Agent to comply
with any such request at any time shall not in itself be deemed a failure to
exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. On or after any acceleration under the
Credit Agreements or Default occurring on the Maturity Date:
(a) Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a secured
party on default under the U.C.C. (whether or not the U.C.C. applies to
the affected Collateral) and also may, without notice except as
specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of Collateral Agent's offices
or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as Collateral Agent may deem commercially reasonable.
Pledgor agrees that, to the extent notice of sale shall be required by
law,
Exhibit M - 12
<PAGE> 168
at least ten days' prior notice to Pledgor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. Collateral Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale
having been given. Collateral Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(b) Collateral Agent may (i) transfer all or any part of the
Collateral into the name of Collateral Agent or its nominee, with or
without disclosing that such Collateral is subject to the lien and
security interest hereunder, (ii) notify the parties obligated on any of
the Collateral to make payment to Collateral Agent of any amount due or
to become due thereunder, (iii) enforce collection of any of the
Collateral by suit or otherwise, and surrender, release or exchange all
or any part thereof, or compromise or extend or renew for any period
(whether or not longer than the original period) any obligations of any
nature of any party with respect thereto, (iv) endorse any checks,
drafts, or other writings in Pledgor's name to allow collection of the
Collateral, (v) take control of any proceeds of the Collateral, and (vi)
execute (in the name, place and stead of Pledgor) endorsements,
assignments, stock powers and other instruments of conveyance or
transfer with respect to all or any of the Collateral.
SECTION 6.2. Compliance with Restrictions. Pledgor agrees that in any
sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, Collateral Agent is hereby authorized to comply with any
limitation or restriction in connection with such sale as it may be advised by
counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and Pledgor further agrees that such compliance shall not result in such sale
being considered or deemed not to have been made in a commercially reasonable
manner, nor shall Collateral Agent be liable nor accountable to Pledgor for any
discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
Exhibit M - 13
<PAGE> 169
SECTION 6.3. Application of Proceeds. All cash proceeds received by
Collateral Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral may, in the discretion of
Collateral Agent, be held by Collateral Agent as additional collateral security
for, or then or at any time thereafter be applied (after payment of any amounts
payable to Collateral Agent pursuant to Sections 6.4 of the Credit Agreements)
in whole or in part by Collateral Agent against, all or any part of the Secured
Obligations in such order as Collateral Agent shall elect.
Any surplus of such cash or cash proceeds held by Collateral Agent and
remaining after payment in full of all the Secured Obligations, and the
termination of all Commitments, shall be paid over to Pledgor or to whomsoever
may be lawfully entitled to receive such surplus.
SECTION 6.4. Indemnity and Expenses. Pledgor hereby indemnifies and
holds harmless Collateral Agent in accordance with Sections 6.4 of the Credit
Agreements.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION 7.2. Amendments. No amendment to or waiver of any provision of
this Pledge Agreement, nor consent to any departure by Pledgor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Administrative Agent, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
SECTION 7.3. Protection of Collateral. Collateral Agent may from time
to time, at its option, perform any act which Pledgor agrees hereunder to
perform and which Pledgor shall fail to perform after being requested in
writing so to perform after the occurrence and continuance of an Event of
Default and Collateral Agent may from time to time take any other action which
Collateral Agent reasonably deems necessary for the maintenance, preservation
or protection of any of the Collateral or of its security interest therein.
SECTION 7.4. Obligations Not Affected. The obligations of Pledgor
under this Pledge Agreement shall remain in full force and effect without
regard to, and shall not be impaired or affected by:
Exhibit M - 14
<PAGE> 170
(a) any amendment or modification or addition or supplement to
the Credit Agreements, any Note, any other Loan Documents, any
instrument delivered in connection therewith, or any assignment or
transfer thereof;
(b) any exercise, non-exercise, or waiver by Collateral Agent
or any Lender of any right, remedy, power, or privilege under or in
respect of, or any release of any guaranty or collateral provided
pursuant to, this Pledge Agreement, the Credit Agreements, Pledgor's
Guaranty or any other Loan Document;
(c) any waiver, consent, extension, indulgence, or other
action or inaction in respect of this Pledge Agreement, the Credit
Agreements, Pledgor's Guaranty or any other Loan Document or any
assignment or transfer of any thereof; or
(d) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation, or the like, of Pledgor or any
other Person, whether or not Pledgor shall have notice or knowledge of
any of the foregoing.
SECTION 7.5. Notices. All notices, requests, consents, demands and
other communications required or permitted hereunder shall be in writing,
unless otherwise specifically provided herein and shall be deemed sufficiently
given or furnished if delivered by personal delivery, by telecopy (with
telephonic confirmation of transmission, by delivery service with proof of
delivery, or by registered or certified United States mail, postage prepaid, to
Pledgor at the address of Pledgor specified on the signature pages hereto and
to each Agent and each Lender at their addresses specified on the signature
pages to the Credit Agreements (unless changed by similar notice in writing
given by the particular Person whose address is to be changed). Any such
notice or communication shall be deemed to have been given: (a) in the case of
personal delivery service, as of the date of first attempted delivery at the
address provided herein; (b) in the case of telecopy, upon receipt; or (c) in
the case of registered or certified United States mail, three days after
deposit in the mail, postage prepaid.
SECTION 7.6. No Waiver; Remedies. No failure on the part of any Lender
Party or any holder of a Note, an LC Application, or an interest in an LC
Obligation to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Exhibit M - 15
<PAGE> 171
SECTION 7.7. Section Captions. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION 7.8. Severability. Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.
SECTION 7.9. Governing Law, Entire Agreement. THIS PLEDGE AGREEMENT
SHALL BE DEEMED A CONTRACT AND INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF
TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THIS PLEDGE AGREEMENT AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.10. Waiver of Jury Trial. EACH OF PLEDGOR, AGENTS AND LENDERS
HEREBY (a) IRREVOCABLY WAIVES, THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS PLEDGE
AGREEMENT OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH,
BEFORE OR AFTER MATURITY; (b) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES; (c) CERTIFIES THAT
NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (d)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO AND ACCEPT THIS PLEDGE
AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY
AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION.
SECTION 7.11. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
Exhibit M - 16
<PAGE> 172
CONNECTION WITH, THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF LENDER PARTIES OR PLEDGOR SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF TEXAS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS; PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY BE BROUGHT, AT COLLATERAL
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH PROPERTY MAY BE
FOUND. PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF TEXAS AND THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF TEXAS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH
ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF TEXAS. FOR PURPOSES OF ANY ACTION OR PROCEEDING
INSTITUTED IN THE FEDERAL OR STATE COURTS OF TEXAS, THE UNDERSIGNED HEREBY
IRREVOCABLY DESIGNATES BORROWER WITH OFFICES ON THE DATE HEREOF AT 303 WEST
WALL STREET, SUITE 101, MIDLAND, TEXAS 79701 TO RECEIVE FOR AND ON BEHALF OF
THE UNDERSIGNED SERVICE OF PROCESS IN TEXAS. PLEDGOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, PLEDGOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS PLEDGE AGREEMENT.
THIS WRITTEN PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
Exhibit M - 17
<PAGE> 173
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[Pledgor]
-------------------------------------------------
By:
----------------------------------------------
Name:
Title:
Address: 303 West Wall
Suite 101
P. O. Box 3178
Midland, Texas 79701
Attention: Curt Kamradt
Telephone: (915) 571-3171
Telecopy: (915) 571-5696
with a copy to:
Garrett Smith
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
Telephone: (972) 402-7013
Telecopy: (972) 402-7028
Exhibit M - 18
<PAGE> 174
NATIONSBANK OF TEXAS, N.A.
By
-------------------------------------------------
Name: Frank K. Stowers
Title: Vice President
Address: 303 W. Wall
P. O. Box 1599
Midland, Texas 79701
Attention: Frank K. Stowers
Exhibit M - 19
<PAGE> 175
ACKNOWLEDGMENT
The undersigned hereby agrees and consents to the terms and provisions
of the foregoing Pledge Agreement, including, without limitation, Section 2.3
and Article IV of the Pledge Agreement. The undersigned hereby acknowledges
the registration on its books of the pledge and security interest created by
the Pledge Agreement in the manner required by Section 8-301(1)(b) of the
U.C.C. and that undersigned will not permit any sale, transfer, pledge or other
encumbrance of the Pledged Interests without the prior written consent of the
Agent.
-----------------------
By:
--------------------
Name:
Title:
Exhibit M - 20
<PAGE> 176
ATTACHMENT 1
to
Pledge Agreement
<TABLE>
<CAPTION>
Pledged Shares
Pledged Share Issuer
Outstanding Shares
Shares Delivered
- ---------------- ----------- ------------
<S> <C> <C>
- ---------------- ----------- ------------
</TABLE>
Exhibit M - 21
<PAGE> 177
ATTACHMENT 2
to
Pledge Agreement
STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
___________________________________________________________________________
(_______________________) shares of common stock in ___________________________
_, a _______________ corporation, represented by the attached Certificate
No.___ _________ herewith and do hereby irrevocably constitute and appoint
____________ ___________________________________________ attorney to transfer
the said stock on the books of ______________________________ with full power
of substitution in the premises.
DATED
--------------------
[PLEDGOR]
-----------------------------------------
By:
--------------------------------------
Name:
Title:
IN PRESENCE OF
- -----------------------
Exhibit M - 22
<PAGE> 178
Exhibit N
Request for Competitive Bid Offer
_____________, ________
To: The Lenders party to the Credit Agreement, NationsBank of Texas, N.A.,
as agent (the "Administrative Agent")
From: _________________________ (the "Borrower")
Re: 364 Day Credit Facility - Amended and Restated Credit Facility Agreement
dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent,
Morgan Guaranty Trust Company of New York, as Documentation Agent, The
Chase Manhattan Bank, as Syndication Agent, the Co-Agents party thereto,
and the Lenders from time to time parties thereto (the "Credit
Agreement")
Pursuant to Section 2.22 of the Credit Agreement, we hereby request
Competitive Bid Offers for the following proposed Competitive Bid Advance(s):
Borrowing Date: _________________, ______
Exhibit N - 1
<PAGE> 179
Principal Amount(1) Requested Maturity Date(2)
$
Upon acceptance by the undersigned of any or all of the Competitive Bid
Offers tendered by Lenders in response to this request, the undersigned shall
be deemed to affirm as of the borrowing date thereof the representations and
warranties made by the Designated Entities in the Credit Agreement and the
other Loan Documents to the extent specified in Section 3.2 thereof (except to
the extent such representations and warranties relate solely to an earlier
date).
Capitalized terms used herein have the meanings assigned to them in the
Credit Agreement.
PIONEER NATURAL RESOURCES
COMPANY
By:
---------------------------
Name:
Title:
- -------------------------
(1) Amount must be at least $10,000,000 and an integral multiple of
$1,000,000.
(2) At least 15 and up to 360 days.
Exhibit N - 2
<PAGE> 180
Exhibit O
Competitive Bid Offer
______________, ____
To: _________________________
Attn: ___________________
Re: 364 Day Credit Facility - Competitive Bid Offer to Pioneer Natural
Resources Company (the "Borrower")
In response to the Borrower's Request for Competitive Bid Offer dated
___ _____, 199_, we hereby make the following Competitive Bid Offer pursuant to
Section 2.22 of the Credit Agreement hereinafter referred to and on the
following terms:
1. Quoting Lender: _________________________________________
2. Person to contact at Lender: ____________________________
3. Borrowing Date: ____________, ______(1)
4. We hereby offer to make Competitive Bid Advance(s) in the following
principal amounts, for the following periods and at the following rates:
<TABLE>
<CAPTION>
Principal Maturity Competitive
Amount(2) Date(3) Bid Rate(4)
- -------- -------- ------------
<S> <C> <C>
$
</TABLE>
- -------------------------
(1) As specified in the related Request for Competitive Bid Offer.
(2) Principal amount bid for each maturity date may not exceed the principal
amount requested. Bids must be made for at least $10,000,000 or an
integral multiple of $1,000,000 in excess thereof.
(3) At least 15 and up to 360 days, as specified in the related Request for
Competitive Bid Offer.
(4) Specify rate of interest per annum (rounded to the nearest 1/10,000 of
1%).
Exhibit O - 1
<PAGE> 181
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in that certain Amended
and Restated Credit Facility Agreement dated as of December 18, 1997 by and
among Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the Co-
Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), irrevocably obligates us to make the Competitive Bid
Advance(s) for which any offer(s) are accepted, in whole or in part.
Capitalized terms used herein and not otherwise defined herein shall have their
meanings as defined in the Credit Agreement.
Very truly yours,
[NAME OF BANK]
Dated: , By:
-------------- ----- ----------------------------------
Authorized Officer
Exhibit O - 2
<PAGE> 182
Exhibit P
Bid Acceptance
___________________, _____
To: [Name of Lender]
Re: 364 Day Credit Facility - Request for Competitive Bid Offer from Pioneer
Natural Resources Company (the "Borrower")
Pursuant to that certain Amended and Restated Credit Facility Agreement
dated as of December 18, 1997 by and among Borrower, NationsBank of Texas,
N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (the "Credit Agreement"), we accept your
Competitive Bid Offer for the following proposed Competitive Bid Advance(s) and
reject any Competitive Bid Offer to the Competitive Bid Borrower not described
below:
Borrowing Date: ______________, ______
<TABLE>
<CAPTION>
Principal Amount Maturity Date Competitive Bid Rate
- ---------------- ------------- --------------------
<S> <C> <C>
$
</TABLE>
Capitalized terms used herein have the meanings assigned to them in the
Credit Agreement.
PIONEER NATURAL RESOURCES
COMPANY
By:
---------------------------
Authorized Officer
Exhibit P - 1
<PAGE> 183
Exhibit Q
[Form of]
Certificate of Extension
_____________, ________
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn: Ruth De la Garza
NationsBank of Texas, N.A.
303 West Wall Street
Midland, Texas 79701
Attn: Frank K. Stowers
Re: Extension of Maturity Date - 364 Day Credit Facility
Gentlemen:
Reference is made to that certain Amended and Restated Credit Facility
Agreement, dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (the "Credit Agreement"). Terms which are defined
in the Credit Agreement and which are used but not defined herein are used
herein with the meanings ascribed to them in the Credit Agreement.
Pursuant to the terms of Section 2.12 of the Credit Agreement, Borrower
hereby requests an extension of the Maturity Date under the Credit Agreement
for a period of 364 days from the current Maturity Date.
To induce Lenders to make such an extension of the current Maturity
Date, Borrower hereby represents, warrants, acknowledges, and agrees to and
with each Agent and each Lender that:
(a) The Designated Officer of Borrower signing this instrument is a
duly elected, qualified and acting officer of Borrower, holding the office
indicated below such officer's signature hereto and having all necessary
authority to act for Borrower in making and delivering this Certificate of
Extension.
Exhibit Q - 1
<PAGE> 184
(b) The representations and warranties of Borrower and each other
Obligor set forth in the Credit Agreement and the other Loan Documents are true
and correct on and as of the date hereof, with the same effect as though such
representations and warranties had been made on and as of the date hereof.
(c) There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as provided in
Section 6.1 of the Credit Agreement.
(d) Except to the extent waived in writing as provided in Section 6.1
of the Credit Agreement, Borrower has performed and complied with all
agreements and conditions in the Credit Agreement required to be performed or
complied with by Borrower on or prior to the date hereof.
(g) The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any course of
dealing, or by any other means not provided for in Section 8.1 of the Credit
Agreement. The Credit Agreement and the other Loan Documents are hereby
ratified, approved, and confirmed in all respects.
Borrower agrees that if, prior to the time of the extension of the
current Maturity Date requested hereby, any matter certified to herein by it
will not be true and correct at such time as if then made, it will immediately
so notify Administrative Agent. Except to the extent, if any, that, prior to
the time of the extension of the current Maturity Date requested hereby,
Administrative Agent shall have received written notice from Borrower to the
contrary, each matter certified herein shall be deemed once again to be
certified as true and correct as of the date of such extension as if then made.
The Designated Officer of Borrower signing this instrument hereby
certifies that, to the best of his knowledge, the above representations,
warranties, acknowledgments and agreements of Borrower are true, correct and
complete.
PIONEER NATURAL RESOURCES
USA, INC.
By:
---------------------------
Name:
Title:
Exhibit Q - 2
<PAGE> 185
Schedule 1
Schedule of Lenders' Commitments and Percentage Share
Schedule 1 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 1 - 1
<PAGE> 186
Schedule 2
Disclosure Schedule
Schedule 2 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 2 - 1
<PAGE> 187
Schedule 3
Schedule of Restricted Subsidiaries
Schedule 3 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 3 - 1
<PAGE> 188
Schedule 4
Schedule of Insurance
Schedule 4 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 4 - 1
<PAGE> 189
Schedule 5
Schedule of Security Instruments
Schedule 5 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 5 - 1
<PAGE> 1
EXHIBIT 10.3
CHAUVCO RESOURCES LTD.
As Borrower
- and -
CANADIAN IMPERIAL BANK OF COMMERCE
As Arranger, Administrative Agent, and Canadian Resident Lender
- and -
BANK OF NOVA SCOTIA
As Co-Syndication Agent and Canadian Resident Lender
- and -
ROYAL BANK OF CANADA
As Co-Syndication Agent and Canadian Resident Lender
- and -
THE CHASE MANHATTAN BANK OF CANADA
As Co-Agent and Canadian Resident Lender
- and -
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
As Co-Agent and Non-resident Lender
- and -
NATIONSBANK OF TEXAS, N.A.
As Co-Agent and Non-resident Lender
- and -
THE TORONTO-DOMINION BANK
As Co-Agent and Canadian Resident Lender
- and -
FIRST UNION NATIONAL BANK
As Non-resident Lender
- and -
WACHOVIA BANK, N.A.
As Non-resident Lender
- and -
THOSE FINANCIAL INSTITUTIONS WHICH
HEREAFTER BECOME LENDERS
- --------------------------------------------------------------------------------
CREDIT AGREEMENT
- --------------------------------------------------------------------------------
Effective December 18, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE 1
INTERPRETATION
<S> <C> <C>
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . -2-
1.2 Headings . . . . . . . . . . . . . . . . . . . . . . -3-
1.3 Subdivisions . . . . . . . . . . . . . . . . . . . . -3-
1.4 Number . . . . . . . . . . . . . . . . . . . . . . . -3-
1.5 Statutes, Regulations and Rules . . . . . . . . . . . -3-
1.6 Monetary References . . . . . . . . . . . . . . . . . -3-
1.7 Time . . . . . . . . . . . . . . . . . . . . . . . . -3-
1.8 Governing Law . . . . . . . . . . . . . . . . . . . . -3-
1.9 Enurement . . . . . . . . . . . . . . . . . . . . . . -3-
1.10 Amendments . . . . . . . . . . . . . . . . . . . . . -3-
1.11 No Waiver . . . . . . . . . . . . . . . . . . . . . . -3-
1.12 Severability . . . . . . . . . . . . . . . . . . . . -4-
1.13 Inconsistency . . . . . . . . . . . . . . . . . . . . -4-
1.14 Accounting Terms and Principles . . . . . . . . . . . -4-
1.15 Schedules . . . . . . . . . . . . . . . . . . . . . . -4-
ARTICLE 2
DELIVERIES ON CLOSING DATE
2.1 Deliveries on Closing by Borrower . . . . . . . . . . -5-
ARTICLE 3
THE CREDIT FACILITY
3.1 The Credit Facility . . . . . . . . . . . . . . . . . -5-
3.2 Extension of Conversion Date . . . . . . . . . . . . -5-
3.3 Conversion to Term Loan . . . . . . . . . . . . . . . -7-
3.4 Non-Accepting Lender . . . . . . . . . . . . . . . . -7-
3.5 Defaulting Lender . . . . . . . . . . . . . . . . . . -8-
3.6 Outstanding Principal . . . . . . . . . . . . . . . . -8-
3.7 Maturity Date of Advances . . . . . . . . . . . . . . -8-
3.8 Repayments . . . . . . . . . . . . . . . . . . . . . -8-
(a) During Revolving Period . . . . . . . . . . -8-
(b) During Term Period . . . . . . . . . . . . . -8-
(c) Payment On Termination Date . . . . . . . . -9-
(d) General Right to Prepay And Cancel . . . . . -9-
(e) Cancellation During the Revolving Period . . -9-
(f) Prepayment During Term Period . . . . . . . -9-
3.9 Use of Proceeds . . . . . . . . . . . . . . . . . . . -9-
3.10 Types of Accommodation . . . . . . . . . . . . . . . -10-
3.11 Determination of Applicable Rating Level . . . . . . -10-
</TABLE>
<PAGE> 3
-ii-
<TABLE>
<S> <C> <C>
3.12 Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . -11-
(a) Interest and Fees . . . . . . . . . . . . . . . . . . -11-
(b) Increase in Rates and Fees on change of Applicable
Rating Level . . . . . . . . . . . . . . . . . . -11-
ARTICLE 4
UNSECURED CREDIT FACILITY
4.1 Unsecured Credit Facility . . . . . . . . . . . . . . . . . . . -12-
ARTICLE 5
FUNDING AND OTHER MECHANICS
5.1 Funding of Accommodations . . . . . . . . . . . . . . . . . . . -12-
5.2 Notice Provisions . . . . . . . . . . . . . . . . . . . . . . . -12-
5.3 Irrevocability . . . . . . . . . . . . . . . . . . . . . . . . -13-
5.4 Pro-Rata Availment and Payment. . . . . . . . . . . . . . . . . -13-
5.5 Rollover/Conversion of Accommodations . . . . . . . . . . . . . -14-
5.6 Agent's Obligations . . . . . . . . . . . . . . . . . . . . . . -14-
5.7 Lenders' Obligations . . . . . . . . . . . . . . . . . . . . . -15-
5.8 Exchange Rate Fluctuations . . . . . . . . . . . . . . . . . . -15-
5.9 Excess Relating to LIBOR Based Loans, Canadian Eurodollar Loans
and Bankers' Acceptances. . . . . . . . . . . . . . . . -15-
ARTICLE 6
HOSTILE ACQUISITIONS
6.1 Hostile Acquisitions . . . . . . . . . . . . . . . . . . . . . -15-
ARTICLE 7
CALCULATION OF INTEREST AND FEES
7.1 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
7.2 Payment of Interest, Stamping Fees and Issuance Fees . . . . . -16-
(a) Interest . . . . . . . . . . . . . . . . . . . . . . . -16-
(b) Calculation of Interest and Stamping Fees . . . . . . . -17-
(c) LIBOR Based Loans and Canadian Eurodollar Loans . . . . -17-
(d) Interest Act (Canada) . . . . . . . . . . . . . . . . . -17-
7.3 Payment of Stamping Fee . . . . . . . . . . . . . . . . . . . . -17-
7.4 Maximum Rate of Return . . . . . . . . . . . . . . . . . . . . -17-
7.5 Waiver of Judgment Interest Act (Alberta) . . . . . . . . . . . -18-
7.6 Deemed Reinvestment Not Applicable . . . . . . . . . . . . . . -18-
</TABLE>
<PAGE> 4
-iii-
<TABLE>
<CAPTION>
ARTICLE 8
GENERAL PROVISIONS RELATING TO LIBOR BASED LOANS
AND CANADIAN EURODOLLAR LOANS
<S> <C> <C>
8.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -18-
8.2 Early Termination of LIBOR Periods . . . . . . . . . . . . . . . . -18-
8.3 Inability to Make LIBOR Based Loans or Canadian Eurodollar Loans . -19-
ARTICLE 9
BANKERS' ACCEPTANCES
9.1 Creation of Bankers' Acceptances . . . . . . . . . . . . . . . . . -19-
9.2 Terms of Acceptance by the Canadian Resident Lenders . . . . . . . -20-
(a) Delivery and Payment . . . . . . . . . . . . . . . . . . . -20-
(b) No Liability . . . . . . . . . . . . . . . . . . . . . . . -20-
(c) Bankers' Acceptances Purchased by Lenders . . . . . . . . . -20-
(d) Marketing . . . . . . . . . . . . . . . . . . . . . . . . . -20-
(e) Power of Attorney . . . . . . . . . . . . . . . . . . . . . -20-
9.3 General Mechanics . . . . . . . . . . . . . . . . . . . . . . . . . -20-
(a) Notice . . . . . . . . . . . . . . . . . . . . . . . . . . -20-
(b) Rollovers . . . . . . . . . . . . . . . . . . . . . . . . . -21-
(c) Conversion from Canadian Dollar Accommodation . . . . . . . -21-
(d) Conversion to Canadian Dollar Accommodation . . . . . . . . -21-
(e) Conversion from or to U.S. Dollar Accommodation . . . . . . -22-
(f) Authorization . . . . . . . . . . . . . . . . . . . . . . . -22-
9.4 Execution of Bankers' Acceptances . . . . . . . . . . . . . . . . . -22-
9.5 Escrowed Funds . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
ARTICLE 10
INCREASED COSTS AND WITHHOLDING TAX
10.1 Increased Costs Due to Changes in Law . . . . . . . . . . . . . . . -23-
10.2 Changes in Circumstances . . . . . . . . . . . . . . . . . . . . . -23-
10.3 Withholding Tax . . . . . . . . . . . . . . . . . . . . . . . . . . -24-
(a) Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . -24-
(b) Credits or Refunds . . . . . . . . . . . . . . . . . . . . -25-
(c) Contesting Taxes . . . . . . . . . . . . . . . . . . . . . -25-
</TABLE>
<PAGE> 5
-iv-
<TABLE>
<S> <C> <C>
ARTICLE 11
FEES AND EXPENSES
11.1 Facility Fee . . . . . . . . . . . . . . . . . . . . . . . -25-
11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . -26-
ARTICLE 12
CONDITIONS PRECEDENT
12.1 Conditions Precedent to Initial Drawdown . . . . . . . . . -26-
(a) Deliveries . . . . . . . . . . . . . . . . . . . . -26-
(b) Notice . . . . . . . . . . . . . . . . . . . . . . -27-
(c) Guarantee . . . . . . . . . . . . . . . . . . . . . -27-
(d) Corporate Proceedings . . . . . . . . . . . . . . . -27-
(e) Absence of Material Litigation . . . . . . . . . . -27-
(f) No Change in Applicable Law . . . . . . . . . . . . -27-
(g) No Default . . . . . . . . . . . . . . . . . . . . -27-
(h) Chauvco Acquisition . . . . . . . . . . . . . . . . -27-
(i) Absence of Litigation Enjoining Acquisition . . . . -28-
(j) Chauvco Acquisition Notices . . . . . . . . . . . . -28-
(k) No Material Adverse Change . . . . . . . . . . . . -28-
(l) Pro Forma Balance Sheet of Parent . . . . . . . . . -28-
12.2 Conditions to Subsequent Advances . . . . . . . . . . . . . -28-
(a) Notice . . . . . . . . . . . . . . . . . . . . . . -28-
(b) No Default . . . . . . . . . . . . . . . . . . . . -28-
(c) Representations and Warranties . . . . . . . . . . -28-
ARTICLE 13
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
13.1 Borrower's Representations and Warranties . . . . . . . . . -29-
(a) No Default . . . . . . . . . . . . . . . . . . . . -29-
(b) Organization, Existence and Good Standing . . . . . -29-
(c) Authorization . . . . . . . . . . . . . . . . . . . -29-
(d) No Conflicts or Consents . . . . . . . . . . . . . -29-
(f) Financial Statements . . . . . . . . . . . . . . . -30-
(g) Other Obligations . . . . . . . . . . . . . . . . . -30-
(h) Full Disclosure . . . . . . . . . . . . . . . . . . -30-
(i) Litigation . . . . . . . . . . . . . . . . . . . . -31-
(j) Environmental Matters . . . . . . . . . . . . . . . -31-
(k) Title to Properties . . . . . . . . . . . . . . . . -31-
(l) Solvency . . . . . . . . . . . . . . . . . . . . . -31-
(m) Environmental Laws . . . . . . . . . . . . . . . . -31-
</TABLE>
<PAGE> 6
-v-
<TABLE>
<CAPTION>
<S> <C> <C>
(n) No Breach of Orders, Licences or Statutes . . . . . . . . -31-
(o) Approvals . . . . . . . . . . . . . . . . . . . . . . . . -32-
(p) Restricted Subsidiaries . . . . . . . . . . . . . . . . . -32-
(q) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . -32-
13.2 Acknowledgement . . . . . . . . . . . . . . . . . . . . . . . . . -32-
ARTICLE 14
COVENANTS OF THE BORROWER
14.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . -33-
(a) Payment and Performance . . . . . . . . . . . . . . . . . -33-
(b) Books, Financial Statements and Reports . . . . . . . . . -33-
(c) Other Information and Inspections . . . . . . . . . . . . -34-
(d) Notice of Material Events . . . . . . . . . . . . . . . . -35-
(e) Maintenance of Existence and Qualifications . . . . . . . -35-
(f) Payment of Taxes and Trade Debt . . . . . . . . . . . . . -35-
(g) Insurance . . . . . . . . . . . . . . . . . . . . . . . . -36-
(h) Compliance with Agreements and Law . . . . . . . . . . . -36-
(i) Maintenance of Business . . . . . . . . . . . . . . . . . -36-
(j) Operations . . . . . . . . . . . . . . . . . . . . . . . -36-
(k) Ranking of Indebtedness . . . . . . . . . . . . . . . . . -36-
(l) Ownership of Restricted Subsidiaries . . . . . . . . . . -37-
(m) Ownership of Assets . . . . . . . . . . . . . . . . . . . -37-
14.2 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . -37-
(a) Limitation on Indebtedness . . . . . . . . . . . . . . . -37-
(b) Negative Pledge . . . . . . . . . . . . . . . . . . . . . -38-
(c) Limitation on Mergers . . . . . . . . . . . . . . . . . . -38-
(d) Limitation on Disposition of Capital Stock of Restricted
Subsidiaries . . . . . . . . . . . . . . . . . . -38-
(e) Limitation on Restricted Payments . . . . . . . . . . . . -38-
(f) Transactions with Affiliates . . . . . . . . . . . . . . -39-
(g) Limitations on Restricted Subsidiaries . . . . . . . . . -39-
(h) Limitation on Sale/Leasebacks . . . . . . . . . . . . . . -39-
(i) Conversion between Restricted Subsidiary and
Unrestricted Subsidiary . . . . . . . . . . . . -39-
(j) Disposition of Property . . . . . . . . . . . . . . . . . -40-
(k) Limitation on Distributions to Pioneer (Canada) . . . . . -40-
ARTICLE 15
INDEMNITY OF BORROWER
15.1 Indemnity of Borrower . . . . . . . . . . . . . . . . . . . . . . -41-
</TABLE>
<PAGE> 7
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<TABLE>
<CAPTION>
ARTICLE 16
SUBSIDIARIES
<S> <C> <C>
16.1 Guarantees by Restricted Subsidiaries . . . . . . . . . . . . . -42-
ARTICLE 17
ADMINISTRATION OF THE CREDIT FACILITY
17.1 Authorization and Action . . . . . . . . . . . . . . . . . . . -42-
(a) Authorization and Action . . . . . . . . . . . . . . . -42-
(b) Paying Agent . . . . . . . . . . . . . . . . . . . . . -42-
(c) Lenders' Determination . . . . . . . . . . . . . . . . -43-
(d) Deemed Non-Consent . . . . . . . . . . . . . . . . . . -43-
17.2 Procedure for Making Advances . . . . . . . . . . . . . . . . . -43-
(a) Pro Rata Advances . . . . . . . . . . . . . . . . . . . -43-
(b) Instructions from Borrower . . . . . . . . . . . . . . -43-
(c) Assumption Respecting Availability . . . . . . . . . . -44-
17.3 Remittance of Payments . . . . . . . . . . . . . . . . . . . . -44-
17.4 Redistribution of Payment . . . . . . . . . . . . . . . . . . . -45-
17.5 Duties and Obligations . . . . . . . . . . . . . . . . . . . . -46-
17.6 Prompt Notice to the Lenders . . . . . . . . . . . . . . . . . -47-
17.7 Agent and Agent Authority . . . . . . . . . . . . . . . . . . . -47-
17.8 Lenders' Credit Decisions . . . . . . . . . . . . . . . . . . . -47-
17.9 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . -47-
17.10 Resignation and Removal . . . . . . . . . . . . . . . . . . . . -48-
17.11 Taking and Enforcement of Remedies . . . . . . . . . . . . . . -48-
17.12 Agent May Perform Covenants . . . . . . . . . . . . . . . . . . -49-
17.13 No Liability of Agent . . . . . . . . . . . . . . . . . . . . . -49-
17.14 Nature of Obligations under this Agreement . . . . . . . . . . -49-
(a) Obligations Separate . . . . . . . . . . . . . . . . . -49-
(b) No Liability for Failure by other Lenders . . . . . . . -49-
17.15 Consent or Waiver by Lenders . . . . . . . . . . . . . . . . . -49-
(a) Unanimity . . . . . . . . . . . . . . . . . . . . . . . -49-
(c) Majority Consent . . . . . . . . . . . . . . . . . . . -50-
ARTICLE 18
EVENTS OF DEFAULT
18.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . -50-
(a) Failure to Pay . . . . . . . . . . . . . . . . . . . . -50-
(b) Breach of Certain Covenants . . . . . . . . . . . . . . -50-
(c) Breach of Covenants . . . . . . . . . . . . . . . . . . -50-
(d) Failure to Execute Support Guarantee . . . . . . . . . -51-
</TABLE>
<PAGE> 8
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<TABLE>
<S> <C> <C>
(e) False Representation or Warranty . . . . . . . . . . . -51-
(f) Failure to Pay Other Indebtedness . . . . . . . . . . . -51-
(g) Bankruptcy . . . . . . . . . . . . . . . . . . . . . . -51-
(h) Default by Parent . . . . . . . . . . . . . . . . . . . -52-
(i) Other Defaults . . . . . . . . . . . . . . . . . . . . -52-
(j) Invalidity of Documents . . . . . . . . . . . . . . . . -53-
(k) Change of Control . . . . . . . . . . . . . . . . . . . -53-
18.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . -53-
18.3 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . -53-
ARTICLE 19
CONFIDENTIALITY
19.1 Non-Disclosure . . . . . . . . . . . . . . . . . . . . . . . . -53-
19.2 Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . -53-
19.3 Permitted Disclosures by the Agent and Each Lender . . . . . . -54-
19.4 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . -54-
ARTICLE 20
ASSIGNMENT
20.1 Assignment by Borrower . . . . . . . . . . . . . . . . . . . . -54-
20.2 Assignment by the Lenders . . . . . . . . . . . . . . . . . . . -54-
ARTICLE 21
MISCELLANEOUS
21.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . -55-
21.2 Telephone Instructions . . . . . . . . . . . . . . . . . . . . -56-
21.3 No Partnership, Joint Venture or Agency . . . . . . . . . . . . -56-
21.4 Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . -57-
(a) Deficiency . . . . . . . . . . . . . . . . . . . . . . -57-
(b) Excess . . . . . . . . . . . . . . . . . . . . . . . . -57-
21.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . -57-
21.6 Waiver of Laws . . . . . . . . . . . . . . . . . . . . . . . . -57-
21.7 Attornment and Waiver of Jury Trial . . . . . . . . . . . . . . -58-
21.8 Interest on Payments in Arrears . . . . . . . . . . . . . . . . -58-
21.9 Payments Due on Banking Day . . . . . . . . . . . . . . . . . . -59-
21.10 Application of Proceeds . . . . . . . . . . . . . . . . . . . . -59-
21.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . -59-
21.12 Whole Agreement . . . . . . . . . . . . . . . . . . . . . . . . -60-
</TABLE>
<PAGE> 9
CREDIT AGREEMENT
THIS AGREEMENT made effective the 18th day of December, 1997
BETWEEN
CHAUVCO RESOURCES LTD.
As Borrower
- and -
CANADIAN IMPERIAL BANK OF COMMERCE
As Arranger, Administrative Agent, and Canadian Resident Lender
- and -
BANK OF NOVA SCOTIA
As Co-Syndication Agent and Canadian Resident Lender
- and -
ROYAL BANK OF CANADA
As Co-Syndication Agent and Canadian Resident Lender
- and -
THE CHASE MANHATTAN BANK OF CANADA
As Co-Agent and Canadian Resident Lender
- and -
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
As Co-Agent and Non-resident Lender
- and -
NATIONSBANK OF TEXAS, N.A.
As Co-Agent and Non-resident Lender
- and -
<PAGE> 10
-2-
THE TORONTO-DOMINION BANK
As Co-Agent and Canadian Resident Lender
- and -
FIRST UNION NATIONAL BANK
As Non-resident Lender
- and -
WACHOVIA BANK, N.A.
As Non-resident Lender
- and -
THOSE FINANCIAL INSTITUTIONS WHICH
HEREAFTER BECOME LENDERS
PREAMBLE
1. The Borrower has requested and the Lenders have agreed to
establish a senior, unsecured, unsubordinated credit facility on the terms and
conditions set forth below.
2. CIBC has agreed to act as Agent for the Lenders under the
Credit Facility.
AGREEMENT
In consideration of the covenants and agreements between the
Parties contained in this Agreement and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties agree
as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS. Capitalized words and phrases used in the
Documents and in all notices and communications expressed to be made pursuant
to this Agreement shall have the meanings set out in Schedule A, unless the
context otherwise requires or is otherwise defined in any of the Documents.
<PAGE> 11
-3-
1.2 HEADINGS. Headings, subheadings and the table of contents
contained in any of the Documents are inserted for convenience of reference
only and shall not affect the construction or interpretation of any of the
Documents.
1.3 SUBDIVISIONS. Unless otherwise stated, reference herein to a
Schedule or to an Article, Section, paragraph or other subdivision is a
reference to such Schedule to this Agreement or such Article, Section,
paragraph or other subdivision of this Agreement. Reference in Schedule A to a
Schedule or to an Article, Section, paragraph or other subdivision of "the
Agreement" is a reference to such Schedule or Article, Section, paragraph or
other subdivision of this Agreement.
1.4 NUMBER. Wherever the context in any of the Documents so
requires, a term used herein importing the singular shall also include the
plural and vice versa.
1.5 STATUTES, REGULATIONS AND RULES. Any reference in any of the
Documents to all or any section or paragraph or any other subdivision of any
Law shall, unless otherwise expressly stated, be a reference to that Law or the
relevant section or paragraph or other subdivision thereof, as amended,
substituted, replaced or re-enacted from time to time.
1.6 MONETARY REFERENCES. Whenever an amount of money is referred
to in any of the Documents, such amount shall, unless otherwise expressly
stated, be in U.S. Dollars.
1.7 TIME. Time shall be of the essence of the Documents.
1.8 GOVERNING LAW. The Documents shall be governed by and
construed in accordance with the Laws in force in the Province of Alberta from
time to time.
1.9 ENUREMENT. The Documents shall be binding upon and shall
enure to the benefit of the Parties and their respective successors and
permitted assigns.
1.10 AMENDMENTS. No Document may be amended orally and, subject to
Section 21.1(e), any amendment may only be made by way of an instrument in
writing signed by the Parties.
1.11 NO WAIVER.
(a) Subject to Section 1.11(c), no waiver by a Party of any
provision or of the breach of any provision of any of the
Documents shall be effective unless it is contained in a
written instrument duly executed by an authorized officer or
representative of such Party. Such written waiver shall
affect only the matter specifically identified in the
instrument granting the waiver and shall not extend to any
other matter, provision or breach.
<PAGE> 12
-4-
(b) The failure of a Party to take any steps in exercising any
right in respect of the breach or nonfulfillment of any
provision of any of the Documents shall not operate as a
waiver of that right, breach or provision, nor shall any
single or partial exercise of any right preclude any other or
future exercise of that right or the exercise of any other
right, whether in Law or otherwise.
(c) Acceptance of payment by a Party after a breach or
nonfulfillment of any provision of any of the Documents
requiring a payment by the other Party to such Party shall
constitute a waiver of such provision if cured by such
payment, but shall not constitute a waiver or cure of any
other provision of any of the Documents.
1.12 SEVERABILITY. If any portion of a Document or the application
thereof to any circumstance shall be held invalid or unenforceable to an extent
that does not affect in a fundamental way, the operation of the Document in
question, the remainder of the provision in question, or its application to any
circumstance other than that to which it has been held invalid or
unenforceable, and the remainder of the Document in question, shall not be
affected thereby and shall be valid and enforceable to the fullest extent
permitted by Law.
1.13 INCONSISTENCY. To the extent that there is any inconsistency
or ambiguity between the provisions of this Agreement and any other Document
(which for purposes of this Section 1.13 only shall also include any Schedule
to this Agreement), the provisions of this Agreement shall govern to the extent
necessary to eliminate such inconsistency or ambiguity.
1.14 ACCOUNTING TERMS AND PRINCIPLES. Except as otherwise
expressly provided, all accounting terms, principles, calculations and the
financial tests applicable to the Credit Facility shall be interpreted, applied
and calculated, as the case may be, in accordance with U.S. GAAP and all
financial statements required to be provided to the Agent or the Lenders
hereunder shall be prepared in accordance with U.S. GAAP. The basis of
accounting and all calculations set out in this Agreement shall be applied and
made on a consistent basis and shall not be changed for the purposes of this
Agreement unless agreed to by the Agent in writing, such agreement not to be
unreasonably withheld. It shall be reasonable for the Agent to withhold its
consent if a proposed change could adversely affect the obligations of the
Borrower or the rights and benefits of the Lenders hereunder.
<TABLE>
<CAPTION>
1.15 Schedules. The following are the Schedules which form part of this Agreement:
<S> <C>
SCHEDULE A: Definitions
SCHEDULE B: Form of Closing Certificate
SCHEDULE C: Form of Notice of Borrowing
SCHEDULE D: Form of Notice of Rollover/Conversion
SCHEDULE E: Form of Financial Certificate
SCHEDULE F: List of Restricted Subsidiaries
SCHEDULE G: Request for an Offer of Extension
</TABLE>
<PAGE> 13
-5-
<TABLE>
<CAPTION>
<S> <C>
SCHEDULE H: Form of Support Guarantee and Parent Guarantee
SCHEDULE I: Power of Attorney (BAs)
SCHEDULE J: Form of Notice of Subsidiary Conversion
SCHEDULE K: Form of Release of Restricted Subsidiary
SCHEDULE L: Disclosure Schedule
</TABLE>
ARTICLE 2
DELIVERIES ON CLOSING DATE
2.1 DELIVERIES ON CLOSING BY BORROWER. On the Closing Date, the
Borrower shall deliver or cause to be delivered the Closing Certificate to the
Agent for the benefit of the Lenders.
ARTICLE 3
THE CREDIT FACILITY
3.1 THE CREDIT FACILITY. Subject to the terms and conditions
hereof and effective on the Closing Date:
(a) The Lenders hereby establish the Credit Facility in favour of
the Borrower to be funded through the following tranches:
(i) Tranche A: Advances by the Canadian Resident
Lenders; and
(ii) Tranche B: Advances by the Non-resident
Lenders.
(b) The Credit Facility is available during the Revolving Period
to a maximum aggregate principal amount under Tranche A and
Tranche B of $290,000,000.
3.2 EXTENSION OF CONVERSION DATE.
(a) In this Section 3.2:
"REQUEST FOR AN OFFER OF EXTENSION" means a written request
made by the Borrower to the Lenders (in substantially the form
of Schedule G) to have the Lenders issue an offer to the
Borrower extending the Revolving Period for a further 364
days; and
"OFFER OF EXTENSION" means a written offer by the Agent, for
and on behalf of Lenders representing more than 50% of the
Commitment Amount, to the Borrower to extend the Revolving
Period to a date 364 days from acceptance by the Borrower
<PAGE> 14
-6-
of such offer, and setting forth, if applicable, the terms and
conditions on which such extension is offered by the Lenders
and as may be accepted by the Borrower.
(b) The Borrower may, at its option and from time to time, request
an offer to extend the Revolving Period by delivering to the
Agent a Request for an Offer of Extension not less than 60
days and not more than 90 days prior to the then current
Conversion Date. The Agent shall forthwith provide a copy of
the Request for an Offer of Extension to each of the Lenders
who has not previously become a Non-Accepting Lender. Upon
receipt by the Agent from the Borrower of an executed Request
for an Offer of Extension, each Lender shall, after
discussions among the Lenders to ascertain, if possible, a
common position, within 30 days after the date the Agent
receives such request from the Borrower, either:
(i) notify the Agent of its acceptance of the Request for
an Offer of Extension, and the terms and conditions,
if any, upon which such Lender is prepared to extend
the Conversion Date; or
(ii) notify the Agent that the request for the issuance of
an Offer of Extension has been denied, such notice to
forthwith be forwarded by the Agent to the Borrower
to allow the Borrower to make its election under
Section 3.4.
The failure of a Lender to deliver an Offer of Extension
within such 30 day period shall be deemed to be notification
by such Lender to the Borrower that such Lender has denied the
Borrower's Request for an Offer of Extension.
(c) Provided that Lenders representing more than 50% of the
Commitment Amount provide notice to the Agent under Section
3.2(b)(i) that they accept the Request for an Offer of
Extension, such acceptance having common terms and conditions
in respect of, as applicable, Tranche A or Tranche B, the
Agent shall deliver to the Borrower an Offer of Extension
incorporating the said terms and conditions, such offer shall
be open for acceptance by the Borrower until the Banking Day
immediately preceding the then current Conversion Date. Upon
written notice by the Borrower to the Agent accepting an
outstanding Offer of Extension and agreeing to the terms and
conditions, if any, specified therein (the date of such notice
of acceptance being the "Extension Date"), the Conversion Date
shall be extended to the date 364 days from the Extension Date
and the terms and conditions specified in such Offer of
Extension shall be immediately effective.
(d) The Borrower understands that the consideration of any Request
for an Offer of Extension constitutes an independent credit
decision where each Lender retains the absolute and unfettered
discretion to make and that no commitment in this regard is
hereby given by a Lender and that any offer to extend the
Conversion Date may
<PAGE> 15
-7-
be on such terms and conditions in addition to those set out
herein as the extending Lenders stipulate.
3.3 CONVERSION TO TERM LOAN. Subject to an extension of the
Revolving Period in accordance with Section 3.2 and for each Non-Accepting
Lender under Section 3.4(a)(i), effective at 11:59 p.m. Calgary, Alberta time
on the day immediately preceding the Conversion Date, and provided that no
Event of Default shall have occurred and be continuing, (i) each Lender's
Revolving Commitment shall be automatically cancelled, (ii) the Outstandings
attributable to each Lender shall become a Term Loan having a term to maturity
as set forth in Section 3.8(b), and (iii) each Lender shall thereupon be deemed
to have provided such Lender's Term Commitment in favour of the Borrower.
3.4 NON-ACCEPTING LENDER. Provided that Lenders representing more
than 50% but less than 100% of the Commitment Amount provide notice to the
Agent under Section 3.2(b)(i) that they accept the Request for an Offer of
Extension, on notice of the Borrower to the Agent, the Borrower shall be
entitled to choose any of the following in respect of each Lender who does not
accept a Request for an Offer of Extension (each a "Non-Accepting Lender")
prior to the expiration of the Revolving Period, provided that if the Borrower
does not make an election prior to the expiration of the Revolving Period, the
Borrower shall be deemed to have irrevocably elected to exercise the provisions
of Section 3.4(a)(i):
(a) the Non-Accepting Lender's Commitment shall be cancelled as of
the Extension Date, the Revolving Commitment shall be reduced
by such cancellation, and all Obligations then outstanding to
the Non- Accepting Lender shall, at the option of the
Borrower, either (i) become a Term Loan pursuant to Section
3.3 or (ii) on or prior to the Extension Date, be repaid in
full;
(b) the Borrower shall replace the Non-Accepting Lender by
reaching satisfactory arrangements with one or more Lenders or
new Canadian Resident Lenders or new Non-resident Lenders,
having regard to the identity of the Non-Accepting Lender, for
the purchase of the Revolving Commitment of such Non-
Accepting Lender and such Non-Accepting Lender shall be
obligated to sell its Revolving Commitment in accordance with
such satisfactory arrangements; or
(c) the Borrower may elect to revoke and cancel the Request for an
Offer of Extension by giving notice of such revocation and
cancellation to the Agent (which shall promptly notify the
Lenders thereof), and concurrently therewith, shall have the
option to (i) cancel the total Commitment Amount and, subject
to the notice requirements set forth in Section 5.2 and to the
provisions of Sections 8.2 and 9.5, repay in full all
Obligations under the Documents, or (ii) have the Outstandings
on the Conversion Date become a Term Loan pursuant to Section
3.3.
<PAGE> 16
-8-
3.5 DEFAULTING LENDER. By notice of the Borrower to the Agent, the
Borrower shall be entitled to choose an option as set forth in Section 3.4(a)
or (b) in respect of any Lender who, as reasonably determined by the Borrower
in consultation with the Agent:
(a) defaults in funding Advances (including the acceptance or
purchase of Bankers' Acceptances) as required hereunder;
(b) requires the Borrower to pay additional amounts with respect
to Withholding Taxes pursuant to Section 10.3(a);
(c) requests Additional Compensation pursuant to Section 10.1(a);
(d) is unable to make a LIBOR Based Loan or Canadian Eurodollar
Loan pursuant to a determination under Section 8.3; or
(e) is unable to maintain or continue to offer any Accommodation
pursuant to a determination under Section 10.2.
3.6 OUTSTANDING PRINCIPAL. Subject to Section 5.8, the Borrower
shall at no time permit the Outstandings under the Revolver to exceed the
aggregate of all Revolving Commitments or permit the Outstandings under the
Term Loan to exceed the aggregate of all Term Commitments.
3.7 MATURITY DATE OF ADVANCES. Each Advance by way of Bankers'
Acceptance, Canadian Eurodollar Loan or LIBOR Based Loan shall have a Maturity
Date which:
(a) expires on or prior to the Termination Date; and
(b) shall enable the Borrower to make the Scheduled Reductions as
the same become due.
3.8 REPAYMENTS.
(a) DURING REVOLVING PERIOD. During the Revolving Period the
Borrower may repay and re-borrow any amount up to all of the
Lenders' then subsisting Revolving Commitments.
(b) DURING TERM PERIOD. During the Term Period the Borrower
shall, as a Principal Repayment, pay to each Lender providing
a Term Loan, in 10 equal semi-annual installments beginning on
the first Banking Day of the seventh Month following the
Conversion Date (the "First Instalment Date"), an amount equal
to 2 1/2% of the Outstandings to such Non-Accepting Lender on
the Conversion Date. Each of the
<PAGE> 17
-9-
above referred to semi-annual principal instalments are herein
called a "Scheduled Reduction".
(c) PAYMENT ON TERMINATION DATE. The Term Commitment of a Lender,
if any, remaining on the Termination Date applicable to such
Lender, shall be automatically reduced to zero and the
Borrower shall pay to such Lender all Obligations outstanding
to such Lender on such date.
(d) GENERAL RIGHT TO PREPAY AND CANCEL. Subject to Sections 8.2
and 9.5, and upon the Borrower giving the Agent not less than
3 Banking Days notice, the Borrower may at any time prepay,
based on each Lender's Pro Rata Share, without premium, bonus
or penalty, any or all Outstandings under the Term
Commitments, except that a Bankers' Acceptance shall not be
paid prior to its Maturity Date. The Borrower may also at any
time, upon the Borrower giving the Agent not less than 3
Banking Days prior notice, cancel in whole or in part, based
on each Lender's Pro Rata Share, any undrawn portion of the
Commitment Amount of the Lenders, including any undrawn
portion resulting from a prepayment. Any prepayment of
Outstandings under the Term Commitment as provided above,
other than the making of a Scheduled Reduction or the
repayment in full of a Non-Accepting Lender pursuant to
Section 3.4(a), shall automatically cause a reduction in the
Revolving Commitment of a Lender, provided a Revolving Period
is still subsisting, equal to an amount of such prepayment
multiplied by a fraction, the numerator being the Revolving
Commitment of such Lender, and the denominator being the
aggregate of all Revolving Commitments then subsisting.
(e) CANCELLATION DURING THE REVOLVING PERIOD. During the
Revolving Period, any optional cancellation pursuant to
Section 3.8(d) above shall result in a permanent reduction,
based on each Lender's Pro Rata Share, of the Revolving
Commitments of the Lenders.
(f) PREPAYMENT DURING TERM PERIOD. Any permanent prepayment made
by the Borrower pursuant to Section 3.8(d) during the Term
Period shall reduce the amount of each then remaining
Scheduled Reduction pro rata.
3.9 USE OF PROCEEDS. Except with respect to the initial Drawdown
and to the extent required under the Combination Agreement, the Borrower shall
use the proceeds of the Credit Facility to discharge all outstanding debt
obligations of Chauvco (other than trade payables) and shall be entitled to use
the remaining proceeds for general purposes (including, without limitation,
acquisitions), subject to the provisions of this Agreement dealing with Hostile
Acquisitions.
<PAGE> 18
-10-
3.10 TYPES OF ACCOMMODATION. The Borrower may from time to time
obtain under the Credit Facility all or one or more of the following types of
Accommodation:
(a) under Tranche A:
(i) Canadian Prime Rate Loans;
(ii) U.S. Base Rate Loans;
(iii) LIBOR Based Loans;
(iv) Bankers' Acceptances; and
(b) under Tranche B:
(i) Alternate Base Rate Loans;
(ii) LIBOR Based Loans; and
(iii) Canadian Eurodollar Loans.
3.11 DETERMINATION OF APPLICABLE RATING LEVEL
(a) The Applicable Rating Level shall be based on the Rating
Agencies senior unsecured long-term debt rating of the Parent
as follows:
<TABLE>
<CAPTION>
------------------------------------------------------
APPLICABLE RATING LEVEL MOODY'S S & P
------------------------------------------------------
<S> <C> <C>
I >Baa1 >BBB+
------------------------------------------------------
II Baa1 BBB+
------------------------------------------------------
III Baa2 BBB
------------------------------------------------------
IV Baa3 BBB-
------------------------------------------------------
V <Baa3 <BBB-
------------------------------------------------------
</TABLE>
(i) if the Rating Agencies assign an equivalent debt
rating, then the Applicable Rating Level shall be
that set forth opposite such debt rating;
(ii) if the debt ratings assigned by the Rating Agencies
differ, then the Applicable Rating Level shall be
that set forth opposite the higher debt rating;
(iii) if only one Rating Agency provides a debt rating,
then the Applicable Rating Level shall be that set
forth opposite such debt rating; or
(iv) if no Rating Agency provides a debt rating, then the
Applicable Rating Level shall be Level V.
<PAGE> 19
-11-
3.12 INTEREST AND FEES.
(a) INTEREST AND FEES. Interest payable by the Borrower under
each Accommodation shall be determined in the following
manner:
(i) each Canadian Prime Rate Loan shall bear interest at
a variable rate of interest per annum equal to the
Canadian Prime Rate;
(ii) each U.S. Base Rate Loan shall bear interest at a
variable rate per annum equal to the U.S. Base Rate;
(iii) each Alternate Base Rate Loan shall bear interest at
a variable rate of interest per annum equal to the
Alternate Base Rate;
(iv) each LIBOR Based Loan shall bear interest at a rate
per annum equal to the LIBOR plus the applicable
margin based on the Applicable Rating Level as
indicated in the table below;
(v) each Canadian Eurodollar Loan shall bear interest at
a rate per annum equal to the Canadian Eurodollar
Rate plus the applicable margin based on the
Applicable Rating Level as indicated on the table
below; and
(vi) for each Bankers' Acceptance, the stamping fee
payable by the Borrower on the acceptance thereof by
the Canadian Resident Lenders shall be based on the
Applicable Rating Level as indicated in the table
below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
Applicable Rating Level I II III IV V
- -------------------------------------------------------------------------------------------------------
Stamping fee on Bankers' 18 20 23 28 45
Acceptances and margins on
LIBOR Based Loans/Canadian
Eurodollar Loans (Basis
Points)
- -------------------------------------------------------------------------------------------------------
</TABLE>
(b) INCREASE IN RATES AND FEES ON CHANGE OF APPLICABLE RATING
LEVEL. Any increase or decrease in the interest rates and
fees based on a change in the Applicable Rating Level shall be
effective and adjusted for as of the date on which the credit
ratings are publicly announced by a Rating Agency, provided
that there shall be no adjustment to stamping fees on Bankers'
Acceptances that are outstanding on the
<PAGE> 20
-12-
effective date. Any such increase or decrease in the interest
on LIBOR Based Loans or Canadian Eurodollar Loans shall apply
proportionately to each such LIBOR Based Loan or Canadian
Eurodollar Loan on the basis of the number of days remaining
to the Maturity Date of each such loan relative to the term
thereof.
ARTICLE 4
UNSECURED CREDIT FACILITY
4.1 UNSECURED CREDIT FACILITY. The Credit Facility shall be
unsecured. The Borrower acknowledges and agrees that all present and future
Obligations shall, as of the Closing Date and thereafter until the Termination
Date, constitute senior, unsecured Indebtedness of the Borrower.
ARTICLE 5
FUNDING AND OTHER MECHANICS
5.1 FUNDING OF ACCOMMODATIONS. Subject to Section 5.2 and
Articles 8 and 9 all Advances requested by the Borrower under the Credit
Facility shall be made available by deposit of the applicable funds (which in
the case of Bankers' Acceptances shall be the Net Proceeds) into the Borrower's
Account for value on the Banking Day or the LIBOR Banking Day, as the case may
be, on which the Advance is to take place. Each such Advance shall be in a
Borrowing Amount.
5.2 NOTICE PROVISIONS. Drawdowns shall be made available to the
Borrower and the Borrower shall be entitled to rollover or convert maturing
Advances, provided a Notice of Borrowing or a Notice of Rollover/Conversion, as
applicable, is received from the Borrower by the Agent as follows:
(a) with respect to Advances, by way of U.S. Base Rate Loans and
Alternate Base Rate Loans, at least 2 Banking Days prior to
such Advance, provided notice is received by the Agent no
later than 12:00 noon Toronto, Ontario time on the second
Banking Day immediately preceding the Drawdown Date or the
date of rollover or conversion of a maturing Advance, as
applicable; and
(b) with respect to LIBOR Based Loans, Canadian Eurodollar Loans,
Canadian Prime Rate Loans and Bankers' Acceptances, at least 3
LIBOR Banking Days prior to such Advance, provided notice is
received by the Agent no later than 12:00 noon Toronto,
Ontario time on the third LIBOR Banking Day immediately
preceding the Drawdown Date or the date of rollover or
conversion, of a maturing Advance, as applicable.
<PAGE> 21
-13-
Any of the notices referred to in the foregoing paragraphs may, subject to
Section 21.2, be given by the Borrower to the Agent at the Agent's Canadian
Address by telephone and in such case shall be immediately followed by the
Borrower delivering on the day of such telephone notice, a Notice of Borrowing
or Notice of Rollover/Conversion, as applicable, confirming such instructions.
5.3 IRREVOCABILITY. A Notice of Borrowing or Notice of
Rollover/Conversion given by the Borrower shall be irrevocable and shall oblige
the Borrower to take the action contemplated herein and therein on the date
specified therein unless the Agent otherwise agrees.
5.4 PRO-RATA AVAILMENT AND PAYMENT.
(a) Except as otherwise specifically provided herein, all Advances
shall be made based on those Lenders' Pro Rata Share who
participate in such Advance as herein provided at the
applicable time, subject to such rounding up or down among
such advancing Lenders as is necessary to accommodate the
amount provided for in the Notice of Borrowing. The relative
positions of such advancing Lenders shall be readjusted by the
Agent in accordance with the respective Commitment at the
earliest possible opportunity as Advances are made to or
payments received from the Borrower, both before and after an
Event of Default. No Lender shall be responsible for any
default by any other Lender in its obligation to make its Pro
Rata Share of a requested Advance nor shall the Pro Rata Share
or the Commitment of any Lender be increased as a result of
the default by any other Lender in its obligation to make
Advances as herein provided.
(b) All Advances requested by the Borrower shall be made using
Accommodations that shall permit the Canadian Resident Lenders
and the Non-resident Lenders to participate in such Advance
based on each such Lender's Pro Rata Share. In addition, the
Borrower shall select similar maturity dates, if applicable,
with respect to Advances provided by the Canadian Resident
Lenders and Advances provided by the Non-resident Lenders with
the intent that all Advances provided by the Lenders shall
mature, to the extent applicable, at the same time.
(c) If a Lender fails to make available its Pro Rata Share of an
Advance, any other Lender under the applicable Tranche upon
notice to the Borrower, the Agent and the other Lenders, may,
but is not obligated to, advance to the Borrower the amount
(or if more than one Lender so elects, such amount as the
electing Lenders shall agree upon) of such defaulting Lender's
Pro Rata Share of such Advance. The Lenders, the Agent and
the Borrower shall thereupon enter into such documentation as
may be appropriate to evidence the adjustment of the
Commitments necessitated by the Advance made by any such
Lender. If the complete amount of such defaulting Lender's
Pro Rata Share of the Advance is not advanced to the Borrower
by the Lenders hereunder, the Borrower may, at its option,
obtain such deficiency from a new Canadian Resident Lender
under
<PAGE> 22
-14-
Tranche A or a new Non-resident Lender under Tranche B,
acceptable to the Non-defaulting Lenders, acting reasonably,
provided such deficiency is funded under this Agreement by
such party agreeing to be bound by the terms and conditions of
the Documents in a manner acceptable to the non-defaulting
Lenders, acting reasonably.
5.5 ROLLOVER/CONVERSION OF ACCOMMODATIONS.
(a) Subject to Section 5.2 and Articles 8 and 9, the Borrower
shall be entitled to rollover any type of Accommodation into
the same type of Accommodation or convert any type of
Accommodation into another type of Accommodation on the terms
herein provided.
(b) If the Borrower fails to give the Agent a duly completed
Notice of Rollover/Conversion if and as required by Section
5.2, or if in giving such notice the Borrower fails to provide
for the rollover or conversion of all of the Advances then
maturing, the Borrower shall be deemed to have irrevocably
elected to convert each Advance then maturing, or that part
thereof which the Borrower has failed to provide for in such
notice, as the case may be, into a Canadian Prime Rate Loan
with respect to a Tranche A Cdn. Dollar Advance, a U.S. Base
Rate Loan with respect to a Tranche A U.S. Dollar Advance or
an Alternate Base Rate Loan with respect to a Tranche B
Advance.
(c) No conversion of a Bankers' Acceptance shall be made prior to
its Maturity Date.
(d) Subject to Section 8.2, the Borrower may elect to convert a
LIBOR Based Loan or a Canadian Eurodollar Loan prior to its
Maturity Date into another type of Accommodation.
(e) The Borrower shall forthwith and in any event within 3 Banking
Days of demand thereof by a Lender, indemnify and save
harmless each Lender for any and all currency fluctuation loss
suffered by a Lender by reason of any requested conversion of
an Advance into an Advance of a different currency. At the
request of the Borrower, a Lender seeking indemnification
under this Section 5.5(e) shall set forth in a officer's
certificate the particulars of such loss which certificate
shall constitute prima facie evidence thereof.
5.6 AGENT'S OBLIGATIONS. Upon receipt of a Notice of Borrowing or
Notice of Rollover/Conversion with respect to a proposed Advance (other than by
way of Bankers' Acceptances), the Agent shall forthwith notify the Lenders
under the applicable Tranche of the proposed date on which such Advance is to
take place, of each such Lender's Pro Rata Share of such Advance and if
applicable, of the account of the Agent to which each such Lender's Pro Rata
Share thereof is to be credited.
<PAGE> 23
-15-
5.7 LENDERS' OBLIGATIONS. Each Lender to which a particular
Advance applies shall, prior to 10:00 a.m. Toronto local time on the proposed
date on which such Advance is to take place (other than by way of Bankers'
Acceptances), credit the account of the Agent specified in the Agent's notice
given pursuant to Section 5.6 with such Lender's Pro Rata Share of such
Advance, and by 11:00 a.m. Toronto local time on the same date, the Agent shall
make available to the Borrower the amount so credited.
5.8 EXCHANGE RATE FLUCTUATIONS. If as a result of currency
fluctuation the Exchange Equivalent in U.S. Dollars of the Outstandings
exceeds the Commitment Amount (the "Excess"), the Borrower shall pay such
Excess to the Agent, for the benefit of those Lenders to which the Excess
applies, as a Principal Repayment. If the Excess equals or exceeds 2% of the
Commitments, the Excess shall, to the extent not removed by further currency
fluctuations and subject to Section 5.9, be paid within 3 Banking Days after
written notice from the Agent, otherwise, the Excess shall, to the extent not
removed by further currency fluctuations and subject to Section 5.9, be paid on
the first day of the Quarter next following such notice.
5.9 EXCESS RELATING TO LIBOR BASED LOANS, CANADIAN EURODOLLAR
LOANS AND BANKERS' ACCEPTANCES. If to pay an Excess, it is necessary to repay
a LIBOR Based Loan, Canadian Eurodollar Loan or an Advance by way of Bankers'
Acceptances, prior to the Maturity Date thereof, the Borrower shall not be
required to repay such Advances until the earlier of, the first day of the next
Quarter or the Maturity Date applicable thereto, provided, however, that at the
request of the Agent, the Borrower shall, within the applicable time period
stipulated in the second sentence of Section 5.8, pay to the Agent for deposit
into an escrow account maintained by and in the name of the Agent the Excess,
to be held by the Agent for set-off against future Indebtedness owing by the
Borrower to the Lenders to which such Excess applies and, pending such
application, shall bear interest for the Borrower's account at the rate
declared by the Agent from time to time as that payable by it in respect of
deposits for such amount and for the period from the date of deposit to the
Maturity Date of such Advance.
ARTICLE 6
HOSTILE ACQUISITIONS
6.1 HOSTILE ACQUISITIONS. If the Borrower wishes to utilize
Drawdowns to facilitate a Hostile Acquisition by the Borrower or any Affiliate
of the Borrower:
(a) at least 10 Banking Days prior to the delivery to the Agent of
a Notice of Borrowing made in connection with a Hostile
Acquisition, an Executive Officer of the Borrower shall notify
the Agent, who shall promptly notify each Lender under the
applicable Tranche, of the particulars of the Hostile
Acquisition in sufficient detail to enable each such Lender to
determine whether it may participate in a Drawdown to be
utilized for such Hostile Acquisition;
<PAGE> 24
-16-
(b) within 5 Banking Days of being so notified by the Agent, each
such Lender shall in turn notify the Agent as to whether it is
a Conflicted Lender (such determination to be made by each
such Lender in the exercise of its reasonable discretion),
provided that, if a Lender does not so notify the Agent within
such 5 Banking Days, such Lender shall be deemed not to have
elected to participate in a Drawdown to be utilized for such
Hostile Acquisition and the Agent shall then promptly notify
the Borrower of each such Lender's determination;
(c) the Drawdown shall be reduced by each Conflicted Lender's Pro
Rata Share thereof. As a result, the allocation among the
Lenders of interest and other fees payable by the Borrower
hereunder, shall reflect such reduction such that the "Pro
Rata Share" of the Lenders shall be adjusted to reflect the
amount of Outstandings then funded by each Lender based on the
aggregate amount of Outstandings after taking into account the
amount of the requested Drawdown not funded by the Conflicted
Lenders; except that, notwithstanding the adjustment of the
Lender's Pro Rata Share pursuant to this Section 6.1, there
shall be no adjustment to the Commitment of each Lender; and
(d) subject to this Section 6.1, subsequent Drawdowns under the
Credit shall be funded first by the Conflicted Lenders, until
the "Pro Rata Share" of outstanding Advances under the Credit
Facility equal the "Pro Rata Share" of the Lenders existing on
the Closing Date.
ARTICLE 7
CALCULATION OF INTEREST AND FEES
7.1 RECORDS. The Agent shall maintain records, in written or
electronic form, evidencing all Advances and all other amounts owing by the
Borrower to the Lenders under the Credit Facility. The Agent shall enter in
such records details of all amounts from time to time owing, paid or prepaid by
the Borrower to the Lenders under the Credit Facility. The information entered
in such records shall, in the absence of manifest error constitute prima facie
evidence of the Indebtedness of the Borrower to the Lenders under the Credit
Facility.
7.2 PAYMENT OF INTEREST, STAMPING FEES AND ISSUANCE FEES.
(a) INTEREST. Except as expressly stated otherwise, all Canadian
Prime Rate Loans, U.S. Base Rate Loans, Alternate Base Rate
Loans, LIBOR Based Loans and Canadian Eurodollar Loans, from
time to time outstanding hereunder, shall bear interest, after
as well as before maturity, default and judgment, with
interest on overdue interest, at the rates prescribed under
Section 3.12. If interest is payable at a variable rate, such
variable rate shall be adjusted automatically without notice
to the Borrower whenever there is a variation in that rate.
<PAGE> 25
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(b) CALCULATION OF INTEREST AND STAMPING FEES. Interest on
Canadian Prime Rate Loans, U.S. Base Rate Loans and Alternate
Base Rate Loans shall accrue and be calculated (but not
compounded) daily and be payable quarterly in arrears on the
first Banking Day of each Quarter for the immediately
preceding Quarter, or, after notice to the Borrower, on such
other Banking Day as is customary for the Agent having regard
to its then existing standard practice. Interest on Canadian
Prime Rate Loans, U.S. Base Rate Loans and stamping fees on
Canadian Dollar Bankers' Acceptances shall be calculated on
the basis of a 365-day Year and, interest on Alternate Base
Rate Loans shall be calculated on the basis of a 360 day Year.
(c) LIBOR BASED LOANS AND CANADIAN EURODOLLAR LOANS. Interest on
LIBOR Based Loans and Canadian Eurodollar Loans shall accrue
and be calculated (but not compounded) daily and be payable at
the end of each applicable LIBOR Period, provided that, where
the LIBOR Period exceeds 90 days, interest shall be payable
every 90 days during the term of the LIBOR Period and on the
last day of the applicable LIBOR Period. Interest on LIBOR
Based Loans and Canadian Eurodollar Loans shall be calculated
on the basis of the actual number of days in each LIBOR Period
divided by 360. For the purposes of the Interest Act
(Canada), the annual rates of interest applicable to LIBOR
Based Loans and Canadian Eurodollar Loans are the rates as
determined hereunder multiplied by the actual number of days
in a period of one Year commencing on the first day of the
period for which such interest is payable and divided by 360.
(d) INTEREST ACT (CANADA). For the purposes of the Interest Act
(Canada), the annual rates of interest, stamping fees and
issuance fees applicable to Canadian Prime Rate Loans, U.S.
Base Rate Loans, Alternate Base Rate Loans and Bankers'
Acceptances, respectively, are the rates as determined
hereunder multiplied by the actual number of days in a period
of one Year commencing on the first day of the period for
which such interest, stamping fee or issuance fee is payable
and divided by 365, except in the case of Alternate Base Rate
Loans which shall be divided by 360.
7.3 PAYMENT OF STAMPING FEE. Upon the acceptance of a Bankers'
Acceptance by a Canadian Resident Lender hereunder, the Borrower shall pay to
such Lender the applicable stamping fee with respect to such Bankers'
Acceptance. Payment of the stamping fee may be made by way of set-off as
provided in Section 9.5.
7.4 MAXIMUM RATE OF RETURN. Notwithstanding any provision herein
to the contrary, in no event shall the aggregate "interest" (as defined in
section 347 of the Criminal Code (Canada)) payable under the Documents exceed
the maximum effective annual rate of interest on the "credit advanced" (as
defined in that section) permitted under that section and, if any payment,
collection or demand pursuant to this Agreement in respect of "interest" (as
defined in that section) is determined to be contrary to the provisions of that
section, such payment, collection or demand
<PAGE> 26
-18-
shall be deemed to have been made by mutual mistake of the Borrower, the Agent
and the Lenders and the amount of such payment or collection shall be refunded
to the Borrower. For purposes of the Documents, the effective annual rate of
interest shall be determined in accordance with generally accepted actuarial
practices and principles over the term applicable to the Credit Facility on the
basis of annual compounding of the lawfully permitted rate of interest and, in
the event of dispute, a certificate of a Fellow of the Canadian Institute of
Actuaries appointed by the Agent shall be prima facie evidence, for the
purposes of such determination.
7.5 WAIVER OF JUDGMENT INTEREST ACT (ALBERTA). To the extent
permitted by law, the provisions of the Judgment Interest Act (Alberta) shall
not apply to the Documents and are hereby expressly waived by the Borrower.
7.6 DEEMED REINVESTMENT NOT APPLICABLE. For the purposes of the
Interest Act (Canada), the principle of deemed reinvestment of interest shall
not apply to any interest calculation under the Documents, and the rates of
interest stipulated in this Agreement are intended to be nominal rates and not
effective rates or yields.
ARTICLE 8
GENERAL PROVISIONS RELATING TO LIBOR BASED LOANS
AND CANADIAN EURODOLLAR LOANS
8.1 GENERAL. If the Borrower elects to Drawdown by way of a
rollover or convert an Accommodation into a LIBOR Based Loan or a Canadian
Eurodollar Loan, the Borrower shall specify in its Notice of Borrowing or
Notice of Rollover/Conversion, as applicable, the LIBOR Period (which shall
begin and end on a LIBOR Banking Day) applicable to such loan. Subject to
Section 5.5(b), if the Borrower fails, as required hereunder, to select a LIBOR
Period for any proposed LIBOR Based Loan or Canadian Eurodollar Loan, then the
applicable LIBOR Period shall be determined by the Agent.
8.2 EARLY TERMINATION OF LIBOR PERIODS. If the Borrower requests
that the Lenders under the applicable Tranche arrange for early termination of
a LIBOR Based Loan or Canadian Eurodollar Loan, the Borrower shall pay to such
Lenders all breakage costs, reasonable expenses and out-of-pocket costs
incurred by such Lenders as a result of the early termination of such loan,
including expenses and out-of-pocket costs incurred due to early redemption of
offsetting deposits. If any such early termination cannot be effected, such
loan shall not be terminated and the Borrower shall continue to pay interest to
such Lenders, at the rate per annum applicable to such LIBOR Based Loan or
Canadian Eurodollar Loan for the remainder of the applicable LIBOR Period. A
written statement of the Agent on behalf of the affected Lenders as to the
amount and nature of such breakage costs, expenses and out-of-pocket costs
shall, in the absence of manifest error, be prima facie evidence of the amount
thereof.
<PAGE> 27
-19-
8.3 INABILITY TO MAKE LIBOR BASED LOANS OR CANADIAN EURODOLLAR
LOANS. If on any date a Lender determines (which determination shall be
conclusive as between the Parties), that its ability to make a requested LIBOR
Based Loan or Canadian Eurodollar Loan has become impracticable, impossible or
unlawful, or has been materially adversely affected, because:
(a) of any change in applicable Laws or regulations, or in the
interpretation or administration thereof by authorities having
jurisdiction in the matter;
(b) of any material adverse change in, or the termination of, the
London Interbank Eurodollar Market for Eurodollars or Canadian
Eurodollars;
(c) there exists no adequate and fair measure to ascertain the
LIBOR for any LIBOR Period for the LIBOR Based Loan, or
(d) there exists no adequate and fair measure to ascertain the
Canadian Eurodollar Rate for any LIBOR Period for the Canadian
Eurodollar Loan,
then the Lender shall give the Borrower and the Agent written notice thereof
and the Lender shall have no further obligation with respect to such LIBOR
Based Loan or Canadian Eurodollar Loan, provided that, the Borrower may elect
to Drawdown, rollover or convert the amount originally requested by way of such
loan, into some other type of Accommodation upon compliance with the applicable
Drawdown or rollover or conversion requirements set out herein.
ARTICLE 9
BANKERS' ACCEPTANCES
9.1 CREATION OF BANKERS' ACCEPTANCES. Upon receipt of a Notice of
Borrowing and subject to the provisions of this Agreement, the Canadian
Resident Lenders shall accept, on a Pro Rata Share basis, (but shall be under
no obligation to purchase or discount) from time to time such Cdn. Dollar bills
of exchange as the Borrower shall request provided that:
(a) Bankers' Acceptances shall be issued on a Banking Day;
(b) each Bankers' Acceptance shall have a term of 1, 2, 3 or 6
months (excluding days of grace), as selected by the Borrower
in the relevant Notice of Borrowing provided that each
Bankers' Acceptance shall mature on a Banking Day;
(c) the face amount of each Bankers' Acceptance shall be not less
than $100,000 and in multiples of $100,000 for any amounts in
excess thereof; and
(d) each Bankers' Acceptance shall be in a form acceptable to the
Canadian Resident Lenders.
<PAGE> 28
-20-
9.2 TERMS OF ACCEPTANCE BY THE CANADIAN RESIDENT LENDERS.
(a) DELIVERY AND PAYMENT. Subject to Section 9.2(e) the Borrower
shall pre-sign and deliver to each Canadian Resident Lender
bankers' acceptance drafts in sufficient quantity to meet the
Borrower's requirements for anticipated Advances by way of
Bankers' Acceptances. The Borrower shall provide for payment
to the Agent for the benefit of the Canadian Resident Lenders
of each Bankers' Acceptance at its Maturity Date, either by
payment of the full face amount thereof or through utilization
of an Accommodation in accordance with this Agreement, or
through a combination thereof. The Borrower waives
presentment for payment of Bankers' Acceptances by the
Canadian Resident Lenders and shall not claim from the
Canadian Resident Lenders any days of grace for the payment at
maturity of Bankers' Acceptances. Any amount owing by the
Borrower in respect of any Bankers' Acceptance which is not
paid in accordance with the foregoing, shall, as and from its
Maturity Date, be deemed to be outstanding hereunder as a
Canadian Prime Rate Loan.
(b) NO LIABILITY. The Agent and the Canadian Resident Lenders
shall not be liable for any damage, loss or improper use of
any bankers' acceptance draft endorsed in blank except for any
loss arising by reason of the Agent or a Canadian Resident
Lender failing to use the same standard of care in the custody
of such bankers' acceptance drafts as the Agent or such
Canadian Resident Lender use in the custody of their own
property of a similar nature.
(c) BANKERS' ACCEPTANCES PURCHASED BY LENDERS. Where the
Borrower so elects in the Notice of Borrowing or Notice of
Rollover/Conversion, a Canadian Resident Lender shall purchase
Bankers' Acceptances accepted by it for an amount equal to the
Discount Proceeds having regard to the BA Rate applicable to
such Lender.
(d) MARKETING. Where the Borrower so elects in the Notice of
Borrowing or Notice of Rollover/Conversion, it shall be
responsible for, and shall make its own arrangements with
respect to, the marketing of Bankers' Acceptances.
(e) POWER OF ATTORNEY. At the request of the Borrower, the
Canadian Resident Lenders and the Borrower shall enter into a
Power of Attorney, substantially in the form of Schedule "I",
to facilitate the execution and sale of Bankers' Acceptances.
9.3 GENERAL MECHANICS.
(a) NOTICE. The Borrower may in the Notice of Borrowing or in a
Notice of Rollover/Conversion request an Accommodation by way
of Bankers' Acceptances and by subsequent notice to the Agent
provide the Agent with information as to the
<PAGE> 29
-21-
Discount Proceeds payable by the purchasers of the Bankers'
Acceptances and the party to whom delivery of the Bankers'
Acceptances is to be made against delivery of the applicable
Discount Proceeds, but if it does not do so, the Borrower
shall initiate a telephone call to the Agent by 10:00 a.m.
Toronto local time on the date of drawdown or the date of the
rollover or conversion, as applicable, and provide such
information to the Agent. Any such telephone advice shall be
subject to Section 21.2 and shall be confirmed by a written
notice of the Borrower to the Agent prior to 2:00 p.m. Toronto
local time on the same day.
(b) ROLLOVERS. In the case of a rollover of maturing Bankers'
Acceptances, issued by a Canadian Resident Lender, such
Canadian Resident Lender, in order to satisfy the continuing
liability of the Borrower to the Canadian Resident Lender for
the face amount of the maturing Bankers' Acceptances, shall
retain for its own account the Net Proceeds of each new
Bankers' Acceptance issued by it in connection with such
rollover and the Borrower shall, on the Maturity Date of the
maturing Bankers' Acceptances, pay to the Agent for the
benefit of the Canadian Resident Lenders an amount equal to
the difference between the face amount of the maturing
Bankers' Acceptances and the aggregate Net Proceeds of the new
Bankers' Acceptances.
(c) CONVERSION FROM CANADIAN DOLLAR ACCOMMODATION. In the case of
a conversion from a Canadian Prime Rate Loan into an
Accommodation by way of Bankers' Acceptances to be issued by a
Canadian Resident Lender pursuant to Section 9.2(c), such
Canadian Resident Lender, in order to satisfy the continuing
liability of the Borrower to it for the principal amount of
the Canadian Prime Rate Loan being converted, shall retain for
its own account the Net Proceeds of each new Bankers'
Acceptance issued by it in connection with such conversion and
the Borrower shall, on the date of issuance of the Bankers'
Acceptances, pay to the Agent for the benefit of the Canadian
Resident Lenders an amount equal to the difference between the
aggregate principal amount of the Canadian Prime Rate Loan
being converted owing to the Canadian Resident Lenders and the
aggregate Net Proceeds of such Bankers' Acceptances.
(d) CONVERSION TO CANADIAN DOLLAR ACCOMMODATION. In the case of a
conversion of an Accommodation by way of Bankers' Acceptances
into a Canadian Prime Rate Loan, each Canadian Resident
Lender, in order to satisfy the liability of the Borrower to
it for the face amount of the maturing Bankers' Acceptances,
shall record the obligation of the Borrower to it as a
Canadian Prime Rate Loan, unless the Borrower provides for
payment to the Agent for the benefit of the Canadian Resident
Lenders of the face amount of the maturing Bankers' Acceptance
in some other manner acceptable to the Canadian Resident
Lenders.
<PAGE> 30
-22-
(e) CONVERSION FROM OR TO U.S. DOLLAR ACCOMMODATION. In the case
of a conversion of Bankers' Acceptance Advances from or to a
U.S. Dollar Accommodation, the Parties to which this Article 9
applies shall follow the notice procedures set out in Section
9.3(a) and the funding procedures set out in Article 5 without
any netting of funds.
(f) AUTHORIZATION. The Borrower hereby authorizes each Canadian
Resident Lender to complete, stamp, hold, sell, rediscount or
otherwise dispose of all Bankers' Acceptances accepted by it
pursuant to this Section in accordance with the instructions
provided by the Borrower pursuant to Sections 5.2 or 5.5, as
applicable.
9.4 EXECUTION OF BANKERS' ACCEPTANCES. The signatures of any
authorized signatory on Bankers' Acceptances may, at the option of the
Borrower, be reproduced in facsimile and such Bankers' Acceptances bearing such
facsimile signatures shall be binding on the Borrower as if they had been
manually signed by such authorized signatory. Notwithstanding that any person
whose signature appears on any Bankers' Acceptance as a signatory may no longer
be an authorized signatory of the Borrower at the date of issuance of a
Bankers' Acceptance, and notwithstanding that the signature affixed may be a
reproduction only, such signature shall nevertheless be valid and sufficient
for all purposes as if such authority had remained in force at the time of such
issuance and as if such signature had been manually applied, and any such
Bankers' Acceptance so signed shall be binding on the Borrower.
9.5 ESCROWED FUNDS. Upon the occurrence of an Event of Default
and an acceleration of the Outstandings under Section 18.2 or upon a repayment
permitted under Section 3.4(c), the Borrower shall forthwith pay to the Agent
for deposit into an escrow account maintained by and in the name of the Agent
for the benefit of the Canadian Resident Lenders on a Pro Rata Basis an amount
equal to the Canadian Resident Lenders' maximum potential liability (as
determined by the Agent) under then outstanding Bankers' Acceptances (the
"Escrow Funds"). The Escrow Funds shall be held by the Agent for set-off
against future Obligations of the Borrower and pending such application shall
bear interest at the rate declared by the Agent from time to time as that
payable by it in respect of deposits for such amount and for such period
relative to the Maturity Date of the Bankers' Acceptances, as applicable. If
such Event of Default is either waived or cured in compliance with the terms of
this Agreement, then the Escrow Funds, together with any accrued interest to
the date of release, shall be forthwith released to the Borrower.
<PAGE> 31
-23-
ARTICLE 10
INCREASED COSTS AND WITHHOLDING TAX
10.1 INCREASED COSTS DUE TO CHANGES IN LAW.
(a) If due to either:
(i) the introduction of, or any change in, or in the
interpretation of any Law, regulation, guideline,
treaty, policy, or directive whether having the force
of law or not, resulting in the imposition or
increase of reserve, deposit or similar requirements
by any court, central bank or other Governmental Body
charged with the administration thereof; or
(ii) the compliance with any guideline or request from any
central bank or other Governmental Body which a
Lender, acting reasonably and in good faith,
determines that it is required to comply with,
there shall be any increase in the cost to a Lender of
agreeing to make or making, funding or maintaining the Credit
Facility, or any reduction in the effective return to such
Lender thereunder, then, subject to Section 10.1(b), the
Borrower shall, within 10 Banking Days after being notified by
such Lender of such event, pay to the Agent for the benefit of
such Lender monthly in arrears, that amount (the "Additional
Compensation") which such Lender, acting reasonably,
determines shall compensate it, after taking into account all
applicable Taxes, for any such increased costs or reduced
returns incurred or suffered by such Lender.
(b) If Additional Compensation is payable, the Borrower shall have
the option to pre-pay any amount of the Credit Facility
affected thereby, subject to Sections 8.2 and 9.5. If the
Additional Compensation relates to outstanding Bankers'
Acceptances, the Lender, if a Canadian Resident Lender, may
require the Borrower to deposit in an interest bearing account
with such Lender such amount as may be necessary to fully
satisfy the contingent obligations of such Lender for all
outstanding Bankers' Acceptances in accordance with the
arrangements set out in Section 9.5.
10.2 CHANGES IN CIRCUMSTANCES. Notwithstanding anything to the
contrary herein contained, if on any date a Lender determines in good faith,
which determination shall be conclusive and binding on the Parties, and gives
written notice to the Borrower and the Agent that its ability to maintain or
continue to offer any Accommodation under the Credit Facility, has become
unlawful or impossible because:
<PAGE> 32
-24-
(a) of any change in applicable Laws or regulations, or in the
interpretation or administration thereof by authorities having
jurisdiction in the matter; or
(b) of any material adverse change in or the termination of the
London Interbank Eurodollar Market for Eurodollars; or
(c) the imposition of any condition, restriction or limitation
upon any Lender which is outside of its control,
then in any such case the Borrower shall forthwith within 30 days or such
longer period as the law allows repay all Outstandings affected thereby,
together with all unpaid interest accrued thereon to the date of repayment and
all breakage costs and other expenses incurred in connection with the
termination of any Accommodation, including without limitation, any expenses
resulting from the termination of any LIBOR Period, in the case of LIBOR Based
Loans or Canadian Eurodollar Loans. The Borrower may utilize other forms of
Accommodations not so affected in order to make any required repayment and
after any such repayment, the Borrower may elect to re-borrow the amount repaid
by way of some other Accommodation upon complying with applicable requirements
hereof.
10.3 WITHHOLDING TAX.
(a) INDEMNITY. All payments of the Obligations made hereunder by
the Borrower shall be made without deduction or withholding
for or on account of any Withholding Tax. If the Borrower is
required by law or by the administration thereof to withhold
or deduct Withholding Taxes, provided that such requirement
has arisen due to a change in Law or the application thereof
since the Closing Date, the Borrower shall forthwith pay to
the Agent on behalf of the affected Lenders such additional
amounts as may be necessary in order that the net amounts
received by the affected Lenders after such withholding or
deduction (including any required deduction or withholding on
the additional amount) shall equal the amount that the
affected Lenders would have received had no deduction or
withholding been made. The Borrower may, at its option, deem
the Lender to then be a Non-Accepting Lender and exercise any
of the options available to it under Section 3.4. In
addition, if requested by the Agent, the Borrower shall
forward to the Agent on behalf of the affected Lenders such
tax receipts or other official documentation with respect to
the payment of the Withholding Tax so deducted or withheld as
may be issued from time to time by such government or taxing
authority. Without limiting the foregoing, if the Agent or
any Lender shall become liable for Taxes as a result of a
payment having been made by the Borrower to such Lender under
this Section 10.3, the Borrower shall indemnify the Agent and
the Lenders for any such Taxes payable by the Agent or the
Lenders in respect of any such payment.
<PAGE> 33
-25-
(b) CREDITS OR REFUNDS. If, following the imposition of any
Withholding Taxes as aforesaid upon any payment by the
Borrower, the affected Lender is granted a credit against or
refund in respect of such Withholding Taxes for any Tax
payable by it, such Lender shall (subject to the Borrower
having paid any additional amounts payable in accordance with
this Section 10.3), to the extent that it is satisfied in its
sole discretion that it can do so without prejudice to the
retention of the amount of such credit or refund, reimburse
the Borrower with such amount as such Lender shall certify to
be the proportion of such credit or refund as shall leave such
Lender (after such reimbursement) in no worse position than it
would have been if there had been no Withholding Taxes imposed
upon the payment by the Borrower as aforesaid. Such
reimbursement shall be made as soon as practicable following
the receipt of such credit or refund.
(c) CONTESTING TAXES. If the Borrower pays any amount pursuant to
Section 10.3(a) with respect to any payment to a Lender or
with the prior written consent of such Lender provides any
security therefor pursuant to applicable Law, and the Borrower
at its expense wishes to contest the exigibility of the
relevant Taxes and furnishes to such Lender an opinion of tax
counsel satisfactory to such Lender, acting reasonably, to the
effect that there exists a reasonable basis for contesting
such Taxes, such Lender shall in good faith contest such
Taxes, provided that:
(i) the Borrower has otherwise complied with this Section
10.3;
(ii) the Borrower has delivered to such Lender such
additional security or assurances as such Lender may
require, acting reasonably, in order to be satisfied
that such Lender shall not incur any liability by
reason of any contestation, including, without
limitation, legal fees, disbursements, interest and
penalties; and
(iii) the institution, conduct and continuation of such
proceedings (including the settlement or compromise
of same) shall remain within the sole discretion of
such Lender and shall forthwith be abandoned if such
Lender so requires having regard to its overall tax
and related interests.
ARTICLE 11
FEES AND EXPENSES
11.1 FACILITY FEE. The Borrower shall pay, or cause the payment,
to the Agent for the account of each Lender an annual facility fee payable to
each Lender determined by applying the Facility Fee Rate based on the
applicable Rating Level as determined in Section 3.11 , to such daily
aggregate amount of the Commitments (whether used or unused). Such facility
fee shall be allocated among the Lenders based on their Pro Rata Shares. The
facility fee shall be payable with
<PAGE> 34
-26-
respect to each Lender in arrears quarterly until the Termination Date
applicable to each such Lender, with the first payment thereof to be April 1,
1998, subsequent payments on the first day following each successive Quarter
ending on each September, December, March and June, and the final payment
thereof on the Termination Date.
<TABLE>
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Applicable Rating Level I II III IV V
- ------------------------------------------------------------------------------------------------
Facility Fee Rate (Basis Points) 9 10 12 14 20
- ------------------------------------------------------------------------------------------------
</TABLE>
11.2 EXPENSES. The Borrower shall pay or reimburse the Agent and
the Lenders in the currency so incurred for the reasonable out-of-pocket
expenses, including without limitation, reasonable legal fees and enforcement
costs incurred by the Agent and the Lenders in connection with the negotiation,
preparation, execution and maintenance of the Documents and the enforcement of
the Lender's rights and remedies with respect to the Borrower's Indebtedness
under the Credit Facility.
ARTICLE 12
CONDITIONS PRECEDENT
12.1 CONDITIONS PRECEDENT TO INITIAL DRAWDOWN. The obligation of
the Lenders to provide the initial Drawdown is subject to the fulfilment of the
following conditions precedent to the satisfaction of the Lenders on or prior
to the initial Drawdown Date, it being understood that the said conditions are
included for the exclusive benefit of the Lenders and may be waived in writing
in whole or in part by the Majority Lenders at any time:
(a) DELIVERIES. The Agent shall have received delivery of each of
the following:
(i) certificates of public officials as to Borrower's,
Parent's, Pioneer (Resources) and each Restricted
Subsidiary's corporate and organizational status and
good standing;
(ii) a corporate certificate of an Executive Officer of
each of the Borrower, Parent and each Restricted
Subsidiary certifying as to respective resolutions
and incumbency of officers executing the Documents;
and
(iii) opinions from counsel for the Borrower, the Parent,
Pioneer (Resources), and for each Restricted
Subsidiary, dated the initial Drawdown Date and in
form and substance satisfactory to the Agent, acting
reasonably, as to such matters as the Agent shall
reasonably require, including without limitation,
<PAGE> 35
-27-
opinion on the due authorization, execution, delivery and
enforceability of the Documents.
(b) NOTICE. The Agent shall have received the appropriate Notice
of Borrowing in the manner required hereunder.
(c) GUARANTEES. The Restricted Subsidiaries and Pioneer
(Resources) shall have duly authorized, executed and delivered
to the Agent their Support Guarantees. The Parent shall have
duly authorized executed and delivered to the Agent the Parent
Guarantee.
(d) CORPORATE PROCEEDINGS. All proceedings to be taken in
connection with the transactions contemplated by the Documents
shall be satisfactory in form and substance to the Lenders
acting reasonably, and the Lenders shall have received
certified copies of all documents which they may reasonably
request in connection with such transactions and of the
records of all corporate proceedings taken in connection
therewith, including without limitation, the incumbency of all
signatories thereto.
(e) ABSENCE OF MATERIAL LITIGATION. Except as disclosed to the
Lenders in the Disclosure Schedule or otherwise in writing
prior to the Closing Date, and not objected to by or on behalf
of the Majority Lenders, there shall be no litigation, pending
or threatened, which could reasonably be expected to result in
an Event of Default or a Material Adverse Change.
(f) NO CHANGE IN APPLICABLE LAW. The Lenders shall be satisfied,
acting reasonably, that there shall have not occurred any
change in any applicable Law or regulation thereunder or
interpretation thereof by any authority charged with the
administration thereof, or by any court which in the opinion
of counsel for the Lenders could make it unlawful or
impossible for the Lenders to provide any Drawdown whatsoever.
(g) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing.
(h) CHAUVCO ACQUISITION. The indirect acquisition by the Parent
of Chauvco (the "Acquisition"), shall have occurred as
contemplated by and pursuant to the Combination Agreement
dated September 3, 1997, as amended, among such parties and
the Lenders shall have received a certificate from an
Executive Officer of the Borrower confirming the same in form
satisfactory to the Agent acting reasonably.
<PAGE> 36
-28-
(i) ABSENCE OF LITIGATION ENJOINING ACQUISITION. There shall be
no litigation or administrative proceedings or other legal or
regulatory developments prohibiting or enjoining the parties
thereto from consummating the Acquisition.
(j) CHAUVCO ACQUISITION NOTICES. The Agent shall have received
copies of all financial statements, reports, notices and proxy
statements sent by the Parent and Chauvco to their respective
stockholders, including all relevant filings with Governmental
Bodies concerning the Acquisition.
(k) NO MATERIAL ADVERSE CHANGE. Except as disclosed in the
Disclosure Schedule, no event or condition shall have occurred
since September 30, 1997 with respect to the Borrower which
could reasonably be expected to result in an Event of Default
or a Material Adverse Change.
(l) PRO FORMA BALANCE SHEET OF PARENT. The Lenders shall have
received certified copies of the pro forma balance sheet of
the Parent as of September 30, 1997, giving effect to the
Acquisition and any related transaction.
12.2 CONDITIONS TO SUBSEQUENT ADVANCES. The obligations of the
Lenders to provide subsequent Advances following the initial Drawdown is
subject to the fulfilment of the following conditions precedent to the
satisfaction of the Lenders, it being understood that the said conditions are
included for the exclusive benefit of the Lenders and may be waived in writing
in whole or in part by the Majority Lenders at any time:
(a) NOTICE. The Agent shall have received the appropriate Notice
of Borrowing or Notice of Rollover/Conversion, as applicable,
in the manner required hereunder;
(b) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing; and
(c) REPRESENTATIONS AND WARRANTIES. The representations and
warranties identified in Section 13.2 shall be true and
correct on and as of the date of the requested Advance with
the same effect as though made on and as of such date (unless
stated to relate solely to an earlier date in which case such
representations and warranties shall be true and correct as of
such earlier date).
<PAGE> 37
-29-
ARTICLE 13
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
13.1 BORROWER'S REPRESENTATIONS AND WARRANTIES. Except as to
matters disclosed in the Disclosure Schedule the Borrower hereby represents and
warrants to the Lenders as of the Closing Date that:
(a) NO DEFAULT. Neither the Borrower nor any Restricted
Subsidiary is in default in the performance of any of the
covenants and agreements contained herein or under any of the
other Documents. No event or circumstance has occurred and is
continuing which constitutes a Default.
(b) ORGANIZATION, EXISTENCE AND GOOD STANDING. The Borrower and
each Restricted Subsidiary is duly organized or incorporated,
validly existing and in good standing under the Laws of its
jurisdiction of organization or incorporation, having all
corporate powers required to enter into and carry out the
transactions contemplated hereby. The Borrower and each
Restricted Subsidiary is duly qualified, registered, in good
standing, and authorized to do business in all other
jurisdictions wherein the character of the properties owned or
held by it or the nature of the business transacted by it
makes such qualification necessary, except for any lack of
qualification, good standing or authorization that could not
reasonably be expected to have a Material Adverse Effect. The
Borrower and each Restricted Subsidiary has taken all actions
customarily taken in order to enter, for the purpose of
conducting business or owning property, each jurisdiction
outside Canada wherein the character of the properties owned
or held by it or the nature of the business transacted by it
makes such actions desirable, except for any failure or other
matter that could not reasonably be expected to have a
Material Adverse Effect.
(c) AUTHORIZATION. The Borrower and each Restricted Subsidiary
has duly taken all corporate action necessary to authorize the
execution and delivery by it of the Documents to which it is a
party and to authorize the consummation of the transactions
contemplated thereby and the performance of its obligations
thereunder. The Borrower is duly authorized to borrow funds
hereunder.
(d) NO CONFLICTS OR CONSENTS. The execution and delivery by the
Borrower and each Restricted Subsidiary of the Documents to
which it is a party, the performance by the Borrower and each
Restricted Subsidiary of its obligations under such Documents,
and the consummation of the transactions contemplated by the
various Documents, including, without limitation, the
consummation of the Acquisition, do not and will not (1)
conflict with any provision of the constating documents or
by-laws or any directors resolution or other governing
document of such Borrower or Restricted Subsidiary, or (2)
except as to matters that could not reasonably be
<PAGE> 38
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expected to have a Material Adverse Effect, result in the acceleration
of any Indebtedness owed by such Borrower or Restricted Subsidiary, or
conflict with any Law or material agreement, judgment, license, order
or permit applicable to or binding upon such Borrower or Restricted
Subsidiary, or require the consent, approval, authorization or order
of, or notice to or filing with, any Governmental Body or third party,
or result in or require the creation of any Lien upon any material
assets or properties of such Borrower or Restricted Subsidiary, except
as permitted in the Documents.
(e) ENFORCEABLE OBLIGATIONS. This Agreement is, and the other
Documents when duly executed and delivered will be, legal,
valid and binding obligations of the Borrower and each
Restricted Subsidiary which is a party hereto or thereto,
enforceable in accordance with their terms except as such
enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, winding-up, moratorium or similar
Laws relating to the enforcement of creditors' rights
generally and by general principles of equity.
(f) FINANCIAL STATEMENTS. The Consolidated audited financial
statements of Parent for the year ended December 31, 1996 and
the Consolidated unaudited financial statements and unaudited
consolidating statements of operations of the Parent dated as
of September 30, 1997 (the "Updated Financial Statements"),
and all financial statements contained in the Joint Proxy
Statement were prepared in accordance with the applicable GAAP
and such statements present fairly in all material respects
the Parent's Consolidated financial position and pro forma
Consolidated financial position as at the respective dates
thereof, and since September 30, 1997 through the Closing Date
there has been no Material Adverse Change except as reflected
in the Disclosure Schedule.
(g) OTHER OBLIGATIONS. Except as reflected in the Disclosure
Schedule, as of the Closing Date, neither the Borrower nor any
of its Restricted Subsidiaries has any outstanding
Indebtedness which is, in the aggregate, material to the
Borrower, and its Restricted Subsidiaries and not shown in the
Joint Proxy Statement.
(h) FULL DISCLOSURE. No certificate, statement or other
information delivered herewith or heretofore by the Borrower
or any Restricted Subsidiary, to the Agent or any Lender in
connection with the negotiation of this Agreement or in
connection with any transaction contemplated hereby, contains
any untrue statement of a fact or omits to state any fact
known to the Borrower or any Restricted Subsidiary (other than
industry-wide risks normally associated with the types of
businesses conducted by the Borrower or any Restricted
Subsidiary) necessary to make the statements contained herein
or therein not misleading as of the date made or deemed made,
except to the extent that any untrue statement or omission
could not reasonably be expected to have a Material Adverse
Effect.
<PAGE> 39
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(i) LITIGATION. Except as disclosed in the Joint Proxy Statement
or in the Disclosure Schedule:
(i) there are no actions, suits or proceedings at Law or
before or by any Governmental Body existing or
pending, or to the Borrower's knowledge threatened,
to which the Borrower or any Restricted Subsidiary is
or is threatened to be made a party and the result of
which could reasonably be expected to cause an Event
of Default or a Material Adverse Change; and
(ii) there are no outstanding judgments, writs, rulings or
orders by any Governmental Body against the Borrower
or any Restricted Subsidiary which could reasonably
be expected to have a Material Adverse Effect.
(j) ENVIRONMENTAL MATTERS. The liabilities and costs of the
Borrower and its Subsidiaries related to compliance with
applicable Environmental Laws (as in effect on the date on
which this representation is made or deemed made) could not
reasonably be expected to have a Material Adverse Effect.
(k) TITLE TO PROPERTIES. The Borrower and each Restricted
Subsidiary has good and defensible title to all of its
material properties and assets, except any failure, defect or
other matter that could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(l) SOLVENCY. The Obligors, on an aggregate basis, are solvent
and will continue to be solvent after the making and
guaranteeing of the Advances.
(m) ENVIRONMENTAL LAWS. The Borrower has obtained, and has caused
each of the Restricted Subsidiaries to obtain, all material
permits, licenses and other authorizations which are required
under Environmental Laws. It and each of the Restricted
Subsidiaries is in full compliance with Environmental Laws and
with the terms and conditions of all such permits, licenses
and authorizations, except to the extent that failure to so
comply could not reasonably be expected to have a Material
Adverse Effect.
(n) NO BREACH OF ORDERS, LICENCES OR STATUTES. The Borrower and
each of the Restricted Subsidiaries is not in breach of, and
neither it nor any of the Restricted Subsidiaries has received
any notice of the breach by it or any of the Restricted
Subsidiaries of:
(i) any order, approval or mandatory requirement or
directive of any Governmental Body;
<PAGE> 40
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(ii) any governmental licence or permit; or
(iii) any applicable Law,
the breach of which could reasonably be expected to have a
Material Adverse Effect.
(o) APPROVALS. All approvals and consents necessary for the
Borrower and each of the Restricted Subsidiaries to enter into
the Documents and the Acquisition and perform their
obligations thereunder have, in each case, been obtained and
are in good standing and all applicable appeal periods shall
have expired and there are no governmental or judicial
actions, actual or threatened, restraining, preventing or
imposing burdensome conditions on the Acquisition or the
Credit Facility, and further, except where failure to have
done so could not reasonably be expected to have a Material
Adverse Effect, all regulatory approvals, permits and licenses
necessary for it and each of the Restricted Subsidiaries to
carry on their respective businesses, as currently carried on,
have been obtained and are in good standing.
(p) RESTRICTED SUBSIDIARIES. As of the Closing Date, all of the
Restricted Subsidiaries are listed in Schedule F and all other
Subsidiaries of the Borrower shall be designated as
Unrestricted Subsidiaries.
(q) TAXES. The Borrower and each of the Restricted Subsidiaries
have filed all tax returns, as applicable, and all other
material returns and filings required under applicable Law
which to their knowledge are required to be filed by them and
have paid all Taxes due pursuant to such returns or pursuant
to any assessment received by them, except as are being
contested in good faith or which could not reasonably be
expected to have a Material Adverse Effect.
13.2 ACKNOWLEDGEMENT. The Borrower acknowledges that the Lenders
are relying upon the representations and warranties in this Article 13 in
making the Credit Facility available to the Borrower and that the
representations and warranties contained in Sections 13.1(h), 13.1(i), 13.1(j),
13.1(k), 13.1(m), 13.1(n), 13.1(o), and 13.1(q) shall be deemed to be restated
in every respect effective on the date of each and every Advance.
<PAGE> 41
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ARTICLE 14
COVENANTS OF THE BORROWER
14.1 AFFIRMATIVE COVENANTS. While any Obligations under the Credit
Facility are outstanding or the Credit Facility is available to the Borrower,
the Borrower hereby covenants with the Lenders that:
(a) PAYMENT AND PERFORMANCE. The Borrower shall pay or cause to
be paid all Obligations due from it under the Documents in
accordance with the terms thereof and shall observe, perform
and comply with every covenant, term and condition expressed
in the Documents, and shall cause each Obligor which is a
Subsidiary of the Borrower to perform and comply with every
covenant, term and condition expressed in the Documents and
applicable to such Obligor.
(b) BOOKS, FINANCIAL STATEMENTS AND REPORTS. The Borrower shall
maintain and shall cause its Subsidiaries to maintain full and
materially accurate books of account and records reflecting
the operations of their respective businesses. The Borrower
shall maintain and shall cause its Subsidiaries to maintain a
standard system of accounting and shall cause the following
statements and reports to be delivered to the Agent with
sufficient copies for distribution to the Lenders:
(i) As soon as available, and in any event within 120
days after the end of each Fiscal Year, complete
audited Consolidated financial statements of Parent
and its Subsidiaries (including the Borrower) and
unaudited consolidating balance sheets and statements
of operations of Parent and its Subsidiaries,
prepared in reasonable detail in accordance with U.S.
GAAP; such audited statements to be accompanied by an
opinion, by Ernst & Young LLP, or such other
independent certified public accountants of
nationally recognized standing selected by the
Parent, stating that such Consolidated financial
statements have been so prepared. The Borrower
shall, together with each set of such financial
statements delivered pursuant to this Section,
furnish a certificate in the form of Schedule E
stating that, to the best of its knowledge (i) no
Default or Event of Default exists at the end of such
fiscal Quarter or at the time of such certificate or
specifying the nature and period of existence of any
such Default or Event of Default; and (ii)
confirmation of compliance with Section 14.1(m).
(ii) As soon as available, and in any event within 60 days
after the end of the first three fiscal Quarters in
each fiscal Year, unaudited Consolidated financial
statements of the Parent and its Subsidiaries
(including the Borrower), and unaudited consolidating
balance sheet and statements of operations of the
Parent and its Subsidiaries as of the end of such
fiscal Quarter, all in reasonable detail and prepared
in accordance with U.S.
<PAGE> 42
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GAAP, subject to changes resulting from year-end
adjustments. The Borrower shall, together with each
set of such financial statements delivered pursuant
to this Section, furnish a certificate in the form of
Schedule E stating that, to the best of its knowledge
(i) no Default or Event of Default exists at the end
of such fiscal Quarter or at the time of such
certificate or specifying the nature and period of
existence of any such Default or Event of Default;
and (ii) confirmation of compliance with Section
14.1(m).
(iii) Promptly after transmittal or filing, copies of all
financial statements, reports, notices and proxy
statements sent by the Parent to its stockholders and
all registration statements, periodic reports and
other statements and schedules filed by the Parent or
any of its Subsidiaries with any securities exchange,
the Securities and Exchange Commission or any similar
Governmental Body.
(c) OTHER INFORMATION AND INSPECTIONS. The Borrower shall furnish
to the Agent and each Lender any information which the Agent,
on behalf of any Lender, may from time to time reasonably
request in writing concerning any covenant, provision or
condition of the Documents or any matter in connection with
the Borrower's and each of its Subsidiaries' businesses and
operations. The Borrower shall permit and shall cause its
Subsidiaries to permit representatives of Agents and Lenders
(including independent accountants, agents and attorneys), at
the expense and risk of the applicable Lender, to visit and
inspect, during normal business hours and upon reasonable
notice, any of the Borrower's or its Subsidiaries' property,
including its books of account, other books and records, and
any facilities or other business assets, and to make extra
copies therefrom and photocopies and photographs thereof, and
to write down and record any information such representatives
obtain, and the Borrower shall permit and shall cause each of
its Subsidiaries to permit the Agent and the Lenders or their
representatives, to investigate and verify the accuracy of the
information furnished to the Agent or any Lender in connection
with the Documents and to discuss all such matters with its
officers, employees and representatives; provided, however,
that any such visit, inspection, investigation or verification
or discussion with respect to the Borrower taking place at a
time when the Borrower has been notified in writing by the
Agent of the existence of a Default or an Event of Default
applicable to the Borrower which has occurred and is
continuing shall be at the cost and expense of the Borrower,
and that neither the Agents nor Lenders shall have any
obligation to pay any costs or expenses of the Borrower or any
other Obligor or any of their officers, employees or
representatives in respect thereof irrespective of the
existence of any Default or Event of Default.
(d) NOTICE OF MATERIAL EVENTS. The Borrower shall promptly upon
its awareness thereof notify the Agent and each Lender of:
<PAGE> 43
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(i) the occurrence of any Default or any other event,
which has or may reasonably be expected to have, a
Material Adverse Effect;
(ii) the acceleration of the maturity of any Indebtedness
owed by any Obligor or any default by any Obligor
under any instrument evidencing or governing
Indebtedness, if such acceleration or default has a
Material Adverse Effect; and
(iii) the filing of any litigation, governmental,
environmental or other proceeding in which any
Obligor is a party or of any material developments in
existing litigation in which any Obligor is a party
in which an adverse decision may reasonably be
expected to have a Material Adverse Effect.
(e) MAINTENANCE OF EXISTENCE AND QUALIFICATIONS. The Borrower
shall, and shall cause each Restricted Subsidiary to, maintain
and preserve its existence as a corporation under the Laws of
its jurisdiction of incorporation. The Borrower shall, and
shall cause each Restricted Subsidiary to, maintain and
preserve its good standing and its rights and franchises in
full force and effect and qualify to do business as a foreign
corporation in all states, provinces or jurisdictions where
required by applicable Law, except for any failure to
maintain, preserve and qualify that could not reasonably be
expected to have a Material Adverse Effect. Nothing in this
Section shall prohibit (i) a merger or consolidation permitted
by Section 14.2(c); or (ii) a termination of such existence,
good standing, rights or franchises of the Borrower or any
Restricted Subsidiary if the Borrower determines in good faith
that such termination is in the best interest of the Borrower
and could not reasonably be expected to have a Material
Adverse Effect.
(f) PAYMENT OF TAXES AND TRADE DEBT. The Borrower shall, and
shall cause each of its Subsidiaries to, except for any
failure or other matter that could not reasonably be expected
to have a Material Adverse Effect:
(1) timely file all required tax returns;
(2) timely pay all Taxes, assessments, and other
governmental charges or levies imposed upon it or
upon its income, profits or property; and
(3) timely pay all trade debt.
The Borrower and its Subsidiaries may, however, delay paying
or discharging any such Taxes, assessments, charges, debts or
levies so long as the validity thereof is contested in good
faith by appropriate proceedings and adequate reserves
therefor in accordance with the applicable GAAP have been set
aside and reflected among the books and records of the
Borrower and its Subsidiaries.
<PAGE> 44
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(g) INSURANCE. The Borrower shall, and shall cause each of its
Subsidiaries to, at all times maintain insurance in such
amounts and covering such risks as are in accordance with
normal industry practice for companies engaged in similar
businesses and owning similar properties in the same general
area in which the Borrower and its Subsidiaries conduct
business, which insurance (other than prudent self- insurance
programs) shall be by financially sound and reputable
insurers.
(h) COMPLIANCE WITH AGREEMENTS AND LAW. The Borrower shall, and
shall cause its Subsidiaries to:
(1) perform all material obligations it is required to
perform under the terms of each material agreement,
contract or other instrument or obligation to which
it is a party or by which it or any of its material
properties is bound, except for any non-performance
that will not have or reasonably be expected to have
a Material Adverse Effect; and
(2) conduct its business and affairs in material
compliance with all Laws, regulations, and orders
applicable thereto (including without limitation
Environmental Laws) except for any non- compliance
that could not reasonably be expected to have a
Material Adverse Effect.
(i) MAINTENANCE OF BUSINESS. The Borrower shall, and shall cause
each Restricted Subsidiary to, maintain as its primary
business the exploration, production and development of oil,
natural gas and other liquid and gaseous hydrocarbons and the
gathering, processing, transmission and marketing of
hydrocarbons and activities related or ancillary thereto.
(j) OPERATIONS. The Borrower shall, and shall cause each
Restricted Subsidiary to, cause all material properties to be
regularly operated, maintained and developed in a good and
workmanlike manner, as would a prudent operator and in
accordance with all applicable Laws, rules and regulations,
except for any failure to so operate, maintain and develop
that could not reasonably be expected to have a Material
Adverse Effect.
(k) RANKING OF INDEBTEDNESS. The Indebtedness of the Borrower to
the Lenders under the Credit Facility and the Indebtedness of
each of the Restricted Subsidiaries under its Support
Guarantee, shall, at all times, rank at least pari passu in
priority of payment with all of its most senior unsecured
unsubordinated Indebtedness. Nothing in the foregoing shall,
in and of itself, constitute or be deemed to constitute an
agreement or acknowledgement by the Lenders that the
Indebtedness subject to or secured by any Permitted
Encumbrance ranks (apart from the effect of any Lien included
in or inherent in any such Permitted Encumbrance) in priority
<PAGE> 45
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to the Indebtedness of the Borrower under the Documents or the
Indebtedness of any Restricted Subsidiary under its Support
Guarantee.
(l) OWNERSHIP OF RESTRICTED SUBSIDIARIES. The Borrower shall
directly or indirectly maintain at all times Control over each
Restricted Subsidiary.
(m) OWNERSHIP OF ASSETS. The Borrower shall ensure at all times
that it and the Restricted Subsidiaries which are then
providing Support Guarantees represent not less than 90% of
the Consolidated Total Assets.
14.2 NEGATIVE COVENANTS. While any Obligations under the Credit
Facility are outstanding or the Credit Facility is available to the Borrower,
the Borrower hereby covenants with the Lenders that:
(a) LIMITATION ON INDEBTEDNESS.The Borrower shall not, and shall
not permit any Restricted Subsidiary to, in any manner owe or
be liable for Indebtedness except:
i) the Obligations;
ii) Indebtedness pursuant to the U.S. Credit Facility;
iii) Indebtedness under the Operating Credit;
iv) unsecured Indebtedness among the Obligors;
v) Indebtedness arising under capital leases which does
not in the aggregate for the Borrower and Restricted
Subsidiaries exceed $20,000,000 at any one time
outstanding;
vi) Indebtedness, other than Indebtedness otherwise
permitted by another subparagraph of this Section
14.2(a), which, at the time incurred, is at
prevailing market rates of interest and contains
covenants and conditions and events of default no
more onerous to the Restricted Subsidiaries than the
terms of this Agreement; provided, that no Default or
Event of Default shall result from the incurrence of
such Indebtedness and be continuing;
vii) guaranties of Indebtedness which is the primary
obligation of the Borrower or a Restricted Subsidiary
and permitted under this Section 14.2(a);
viii) Indebtedness arising (whether by contract or as a
result of statutory liability of a general partner)
by virtue of the Borrower or any Restricted
Subsidiary being a general partner of a general or
limited partnership pursuant to agreements in effect
on the Closing Date not in excess of the aggregate
<PAGE> 46
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amounts permitted to be incurred pursuant to such
agreements on the Closing Date for all such
Indebtedness and other such Indebtedness otherwise
permitted pursuant to the other subparagraphs of this
Section 14.2(a); and
ix) Indebtedness existing on the Closing Date which is
disclosed (i) in the Updated Financial Statements, or
(ii) in the Disclosure Schedule and any extensions,
renewals or replacements thereof upon terms no more
onerous to the Borrower than the terms of this
Agreement or the terms of the instruments evidencing
such Indebtedness as of the date of this Agreement.
(b) NEGATIVE PLEDGE. The Borrower shall not, and shall not permit
any of the Restricted Subsidiaries to, create, assume or
permit to exist any Lien upon any of their respective material
property, except Permitted Encumbrances.
(c) LIMITATION ON MERGERS. Except as expressly provided in this
paragraph, the Borrower shall not, and shall not permit any of
the Restricted Subsidiaries to, amalgamate, merge or
consolidate with or into any other business entity, except (1)
Borrower may be party to an amalgamation, merger or
consolidation so long as the resulting or surviving entity is
the Borrower and no Default shall exist and the Obligations do
not exceed the Commitment Amount after giving effect thereto;
(2) any Restricted Subsidiary may be a party to any
amalgamation, merger or consolidation so long as the resulting
or surviving entity is the Borrower or another Restricted
Subsidiary and any Support Guarantee of such Restricted
Subsidiary continues as to such resulting or surviving entity,
no Default shall exist, and the Obligations do not exceed the
Commitment Amount after giving effect thereto; and (3) the
Borrower may merge, consolidate or amalgamate with Pioneer
(Canada).
(d) LIMITATION ON DISPOSITION OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES. The Borrower shall not, and shall not permit
any Restricted Subsidiary to, sell, transfer or otherwise
dispose of capital stock of any Restricted Subsidiary, except
that the Borrower and any Restricted Subsidiary may sell,
issue, transfer or otherwise dispose of the capital stock of
the Borrower or any Restricted Subsidiary to the Parent,
Borrower, Pioneer (Canada) or to another Obligor.
(e) LIMITATION ON RESTRICTED PAYMENTS. The Borrower shall not,
and shall not permit any Restricted Subsidiary to, make
Restricted Payments in excess of $25,000,000 in the aggregate
for the duration of this Agreement for all such Restricted
Payments; provided, however, that in the event that any
Unrestricted Subsidiary of the Borrower is redesignated to be
a Restricted Subsidiary of the Borrower for purposes of this
Agreement, then for purposes of determining compliance with
this Section, all Restricted Payments made to such
Unrestricted Subsidiary shall be deducted from the aggregate
total of all Restricted Payments made for the duration
<PAGE> 47
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of this Agreement. No Restricted Payment may be made (i) if
the Obligations shall exceed the Commitment Amount, (ii) if
any Default or Event of Default shall have occurred and be
continuing, or (iii) if as a result thereof, any Default or
Event of Default shall have occurred and be continuing.
(f) TRANSACTIONS WITH AFFILIATES. The Borrower shall not, and
shall not permit any of the Restricted Subsidiaries to, engage
in any material transaction with any of Borrower's Affiliates
on terms which are less favourable than those which could have
been obtainable at the time in arm's-length dealing with
Persons other than such Affiliates, provided, however that
such restriction shall not apply to transactions among any of
the Borrower and Restricted Subsidiaries.
(g) LIMITATIONS ON RESTRICTED SUBSIDIARIES. The Borrower shall
not permit any Restricted Subsidiary to become subject to
covenants which:
(A) restrict dividends or dividend capacity;
(B) restrict loans and advances to the Borrower;
(C) restrict the ability to make tax payments or
management payments to the Borrower; or
(D) restrict the capitalization structure of any
Restricted Subsidiary.
(h) LIMITATION ON SALE/LEASEBACKS. The Borrower shall not, and
shall not permit any Restricted Subsidiary to, enter into any
arrangement, directly or indirectly, with any Person whereby
any Restricted Subsidiary shall sell or transfer any material
asset, and whereby any Restricted Subsidiary shall then or
immediately thereafter rent or lease as lessee such asset or
any part thereof.
(i) CONVERSION BETWEEN RESTRICTED SUBSIDIARY AND UNRESTRICTED
SUBSIDIARY. Subject to the provisions of Section 14.1(m), the
Borrower may convert any Restricted Subsidiary to an
Unrestricted Subsidiary by giving the Agent at least 5 Banking
Days' notice of such conversion in the form of Schedule J
attached hereto; provided that (i) no Restricted Subsidiary
shall be so converted so long as it owns or will thereafter
own, directly or indirectly, any interest in any material
asset or in another Restricted Subsidiary unless the value of
such material assets, together with the aggregate of all
Restricted Payments made and the value of any other material
assets determined as aforesaid of any Restricted Subsidiaries
converted to Unrestricted Subsidiaries do not exceed in the
aggregate the limitation on Restricted Payments contained in
Section 14.2(e) hereof, and (ii) no such conversion shall be
made if after giving effect to such conversion, any Default
could exist. Upon any such conversion of a Restricted
Subsidiary to an Unrestricted Subsidiary, such
<PAGE> 48
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Subsidiary shall be released from its obligations under its
Support Guarantee, and the Agent and Lenders shall execute and
deliver a release substantially in the form of Schedule K
hereto. Borrower may convert any Unrestricted Subsidiary to a
Restricted Subsidiary by giving the Agent at least 5 Banking
Days' notice of such conversion in the form of Schedule J
attached hereto; provided that no such conversion may be made
if, after giving effect to such conversion, any Default could
exist.
(j) DISPOSITION OF PROPERTY. The Borrower shall not, and shall
not permit any of its Subsidiaries to, make any disposition,
sale or other transfer of any of its property (a
"Disposition"), other than the sale of hydrocarbons made in
the ordinary course of business, where the aggregate
consideration received by the Borrower or its Subsidiaries, as
the case may be, with respect to all Dispositions made in any
Fiscal Year exceeds U.S. $45,000,000 net of the book value of
any property acquired by the Borrower or any of its
Subsidiaries during such Fiscal Year.
(k) LIMITATION ON DISTRIBUTIONS TO PIONEER (CANADA). The Borrower
shall not and shall not permit any of its Subsidiaries:
(a) to make any distribution, transfer or disposition of
its property or assets to Pioneer (Canada) by way of
sale, gift, liquidation or otherwise, except for
Dividends, including stock dividends; or
(b) to make any loan, provide credit or provide financial
assistance to, or for the benefit of, Pioneer
(Canada),
unless and until;
(a) Pioneer (Canada) becomes a co-borrower hereunder;
(b) Pioneer (Canada) becomes an Obligor; or
(c) Pioneer (Canada) amalgamates, merges or consolidates
with the Borrower and, as a result thereof, becomes
the Borrower hereunder,
all upon terms and conditions satisfactory to the Majority
Lenders acting reasonably.
ARTICLE 15
INDEMNITY OF BORROWER
15.1 INDEMNITY OF BORROWER. The Borrower hereby indemnifies and
holds harmless the Agent and each Lender, including each of their directors,
officers, employees, agents and
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Affiliates (in this Section 15.1, collectively the "indemnified parties"), for
any costs, losses, damages, expenses, judgments, suits, claims, awards, fines,
sanctions and liabilities whatsoever (including any reasonable and necessary
costs or expenses defending or denying the same and including the reasonable
costs or expenses preparing any necessary environmental assessment report or
other such reports) suffered or incurred by an indemnified party arising out
of, or in respect of:
(a) the Release by the Borrower or any of its Subsidiaries of any
Contaminant into the Environment;
(b) the failure of the Borrower to pay any sum on its due date;
(c) the occurrence of any Event of Default pertaining to the
Borrower; and
(d) the remedial action, if any, required to be taken by such
indemnified party in respect of any of the above,
(in this Section 15.1 collectively a "claim") except in such cases where and
only to the extent that such costs, losses, damages, expenses, judgments,
suits, claims, awards, fines, sanctions or liabilities arose solely from the
gross negligence or wilful misconduct of the Agent or any Lender, or any of its
directors, officers, employees and agents. This indemnity shall survive
repayment or cancellation of the Credit Facility, or any part thereof,
including any termination of this Agreement. Other than for costs and expenses
incurred by the indemnified parties for investigating, defending or denying a
claim or preparing any necessary environmental assessment report or other
reports in connection with any claim (the reasonable costs thereof to be paid
forthwith by the Borrower on demand therefor), the indemnified parties shall
not request indemnification from the Borrower unless an indemnified party is
required by Law, based on the advice of such indemnified party's counsel, to
honour a claim or any part thereof. The Borrower solely shall be entitled, but
not obligated, to negotiate any settlement of a claim, and to defend and carry
any action relating to a claim.
ARTICLE 16
SUBSIDIARIES
16.1 GUARANTEES BY RESTRICTED SUBSIDIARIES. In order to qualify as
a Restricted Subsidiary, the Borrower shall from time to time promptly cause
each Subsidiary to be designated a Restricted Subsidiary hereunder to provide
to the Lenders a Support Guarantee together with all necessary corporate
authorizations in connection therewith and the opinion of counsel acceptable to
the Agent, acting reasonably, concerning the due authorization, execution,
delivery and enforceability of such Support Guarantee, subject to such
qualifications respecting enforceability which are acceptable to the Agent,
acting reasonably, and as are generally recognized in the opinion of counsel to
the Agent as being customary in the circumstances.
<PAGE> 50
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ARTICLE 17
ADMINISTRATION OF THE CREDIT FACILITY
17.1 AUTHORIZATION AND ACTION.
(a) AUTHORIZATION AND ACTION. Each Lender hereby irrevocably
appoints and authorizes the Agent to be its agent in its name
and on its behalf and to exercise such rights or powers
granted to the Agent or the Lenders under the Documents to the
extent specifically provided therein and on the terms thereof,
together with such powers and authority as are reasonably
incidental thereto and all payments or notices given to the
Agent for the benefit of the Lenders shall be, insofar as the
Borrower is concerned, deemed received by all applicable
Lenders. As to any matters not expressly provided for by the
Documents, the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully indemnified and
protected by the Lenders to the greatest extent permitted by
law in so acting or refraining from acting) upon the
instructions of the Majority Lenders, and such instructions
shall be binding upon all Lenders, provided that the Agent
shall not be required to take any action which, in the opinion
of the Agent, exposes the Agent to liability in such capacity,
which could result in the Agent incurring any costs and
expenses or which is contrary to the spirit and intent of this
Agreement.
(b) PAYING AGENT. On notice of the Agent to the Non-resident
Lenders and the Borrower, the Agent may appoint CIBC Inc. as a
paying agent under Tranche B and the provisions of this
Article 17 shall, upon such appointment, apply to CIBC Inc. as
though CIBC Inc. was an Agent hereunder.
(c) LENDERS' DETERMINATION. Where the provisions of this
Agreement provide that any waiver of or any amendment to
any provision of the Documents may be made or any action,
consent or other determination in connection with the
Documents may be taken or given, with the consent or agreement
of the Lenders, then any such waiver, amendment, action,
consent or determination so made, so taken or so given with the
consent or agreement of the required majority of the Lenders
shall be binding on all of the Lenders and all of the Lenders
shall cooperate in all ways necessary or desirable to implement
and effect such waiver, amendment, action, consent or
determination.
(d) DEEMED NON-CONSENT. If the Agent delivers a written notice to
a Lender requesting advice from such Lender as to whether it
consents or objects to any matter in connection with the
Documents, then, except as otherwise expressly provided
herein, if such Lender does not deliver to the Agent its
written consent or objection to such matter within 10 Banking
Days of the delivery of such written
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notice by the Agent to such Lender, such Lender shall be
deemed not to have consented thereto upon the expiry of such
10 Banking Day period.
17.2 PROCEDURE FOR MAKING ADVANCES.
(a) PRO RATA ADVANCES. Subject to Sections 6.1 and 9.1, all
Advances under a Tranche made under the Revolver shall be in
accordance with each applicable Lender's Pro Rata Share of
such Advance and, subject to Section 9.1, Advances under a
Tranche made by way of rollover or conversion under the Term
Loan shall be made in accordance with each applicable Lender's
Pro Rata Share of such Advance.
(b) INSTRUCTIONS FROM BORROWER. Subject to Article 9, the
Lenders, through the Agent, shall make Advances available to
the Borrower as required hereunder by debiting the account of
the Agent to which each Lender's Pro Rata Share of such
Advances have been credited in accordance with Section 5.7 (or
causing such account to be debited) and, in the absence of
other arrangements agreed to by the Agent and the Borrower in
writing, by transferring (or causing to be transferred) like
funds in accordance with the instructions of the Borrower as
set forth in the Notice of Borrowing or Notice of
Rollover/Conversion, as the case may be, in respect of each
Advance, provided that the obligation of the Agent hereunder
shall be limited to taking such steps as are commercially
reasonable in the circumstances to implement such
instructions, and the Agent shall not be liable for any
damages, claims or costs which may be suffered by the Borrower
or any of the Lenders and occasioned by the failure of such
funds to reach their designated destination, unless such
failure is due to the gross negligence of the Agent.
(c) ASSUMPTION RESPECTING AVAILABILITY. Unless the Agent has been
notified by a Lender within 1 Banking Day prior to an
anticipated Advance that such Lender shall not make available
to the Agent its Pro Rata Share of such Advance, the Agent may
assume that such Lender has made such portion of the Advance
available to the Agent on the date such Advance is to take
place, in accordance with the provisions hereof and the Agent
may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the
extent such Lender shall not have made its Pro Rata Share of
an Advance available to the Agent, such Lender agrees to pay
to the Agent, forthwith on demand, such Lender's Pro Rata
Share of the Advance and all reasonable costs and expenses
incurred by the Agent in connection therewith together with
interest thereon (at the rate payable thereunder by the
Borrower in respect of such Advance) for each day from the
date such amount is made available to the Borrower until the
date such amount is paid to the Agent, provided however, that
if such Lender fails to so pay, the Borrower covenants and
agrees that without prejudice to any rights the Borrower may
have against such Lender, it shall repay such amount (without
<PAGE> 52
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duplication) to the Agent for the account of the Agent after
receipt of the certificate referred to below within 3 Banking
Days after demand therefor by the Agent. The amount payable
to the Agent pursuant hereto shall be as set forth in a
certificate delivered by the Agent to such non-paying Lender
and the Borrower (which certificate shall contain reasonable
details of how the amount payable is calculated) and shall be
conclusive and binding, for all purposes, in the absence of
manifest error. If such Lender makes the payment to the Agent
as required herein, the amount so paid shall constitute such
Lender's Pro Rata Share of the Advance for purposes of this
Agreement. The failure of any Lender to make its Pro Rata
Share of the Advance shall not relieve any other Lender of its
obligation, if any, hereunder to make its Pro Rata Share of
the Advance on the date that such Advance is to take place,
but no Lender shall be responsible for the failure of any
other Lender to provide its Pro Rata Share of any Advance.
17.3 REMITTANCE OF PAYMENTS. Forthwith after receipt of any
payment by the Borrower hereunder, the Agent, if and to the extent a Lender is
entitled thereto, shall remit to each Lender its Pro Rata Share of such
payment, provided that, if the Agent, on the assumption that it shall receive
on any particular date a payment of principal, interest or fees hereunder,
remits to a Lender its Pro Rata Share of such payment and the Borrower fails to
make such payment, each such Lender agrees to repay to the Agent forthwith on
demand such Lender's Pro Rata Share of any such payment, together with all
reasonable costs and expenses incurred by the Agent in connection therewith and
interest thereon at the rate and calculated in the manner customarily
applicable to interbank payments for each day from the date such amount is
remitted to such Lender. The exact amount of the repayment required to be made
by a Lender pursuant hereto shall be set forth in a certificate delivered by
the Agent to such Lender, which certificate shall be conclusive and binding for
all purposes in the absence of manifest error.
17.4 REDISTRIBUTION OF PAYMENT. Each Lender agrees that:
(a) If it exercises any right of counter-claim, set off, bankers'
lien or similar right with respect to any property of the
Borrower or if under applicable law it receives a secured
claim, the security for which is a debt owed by it to the
Borrower, it shall apportion the amount thereof
proportionately between:
(i) amounts outstanding at such time owed by the Borrower
to such Lender under this Agreement, which amounts
shall be applied in accordance with this Section; and
(ii) amounts otherwise owed to it by the Borrower,
provided that any cash collateral account held by
such Lender as collateral for a bankers' acceptance
(including a Bankers' Acceptance) issued or accepted
by such Lender on behalf of the Borrower may be
applied by such Lender to such
<PAGE> 53
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amounts owed by the Borrower to such Lender in
respect of any such Bankers' Acceptance without
apportionment.
(b) If it receives, through the exercise of a right or the receipt
of a claim described in paragraph (a) above or otherwise,
payment of a proportion of the aggregate amount of principal
and interest and fees due to it hereunder which is greater
than the proportion received by any other Lender in respect of
the aggregate amount of principal, interest and fees due in
respect of the Credit Facility (having regard to the
respective proportionate amounts advanced as Advances by each
of the Lenders), the Lender receiving such proportionately
greater payment shall purchase a participation (which shall be
deemed to have been done simultaneously with receipt of such
payment) in that portion of the Credit Facility of the other
Lenders so that their respective receipts shall be on a Pro
Rata Basis, provided however that, if all or part of such
proportionately greater payment received by such purchasing
Lender shall be recovered, such purchase shall be rescinded
and the purchase price paid for such participation shall be
returned to the extent of such recovery, but without interest.
Such Lender shall exercise its rights in respect of such
secured claim in a manner consistent with the rights of the
Lenders entitled under this Section to share in the benefits
of any recovery on such secured claims.
(c) If it does any act or thing permitted by paragraphs (a) or (b)
above, it shall promptly provide full particulars thereof to
the Agent.
(d) Except as permitted under paragraphs (a) and (b) above, no
Lender shall be entitled to exercise any right of
counter-claim, set off, bankers' lien or similar right without
the prior written consent of the other Lenders.
(e) Upon the occurrence and continuance of an Event of Default, if
the Agent determines at such time that Outstandings to each
Lender are not reflective of each Lender's Pro Rata Share
thereof, the relative position of all Lenders shall be
readjusted by the Agent in accordance with the Pro Rata Share
of the Lenders at the earliest opportunity.
17.5 DUTIES AND OBLIGATIONS. The Agent or any of its directors,
officers, agents or employees (and, for purposes hereof, the Agent shall be
deemed to be contracting as agent and trustee for and on behalf of such
persons) shall not be liable to any Lender for any action taken or omitted to
be taken by any of them under or in connection with the Documents, except for
their own gross negligence or wilful misconduct. Without limiting the
generality of the foregoing, the Agent:
(a) may assume that there has been no assignment or transfer by a
Lender of its rights and obligations under the Documents;
<PAGE> 54
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(b) may consult with counsel (including counsel for the Borrower),
independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to
be taken in good faith by it in accordance with the advice of
such counsel, accountants or experts;
(c) shall incur no liability under or in respect of the Documents
by acting upon any notice, consent, certificate or other
instrument or writing believed by it to be genuine and signed
or sent by the proper Person or by acting upon any
representation or warranty of the Borrower made or deemed to
be made hereunder;
(d) may assume that no Default or Event of Default has occurred
and is continuing unless it has actual knowledge to the
contrary; and
(e) may rely as to any matter of fact which might reasonably be
expected to be within the knowledge of any Person upon a
certificate signed by or on behalf of such Person.
Further, the Agent (i) does not make any warranty or representation to any
Lender nor shall it be responsible to any Lender for the accuracy or
completeness of the data made available to any of the Lenders in connection
with the Credit Facility, or for any statements, warranties or representations
(whether written or oral) made in connection with the Credit Facility, (ii)
shall not have any duty to ascertain or to enquire as to the performance or
observance of any of the terms, covenants or conditions of the Documents on the
part of the Borrower, Parent or any Restricted Subsidiary or to inspect the
property (including books and records) of the Borrower, Parent or any
Restricted Subsidiary, and (iii) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Documents or any other instrument or document furnished pursuant
hereto or thereto.
17.6 PROMPT NOTICE TO THE LENDERS. The Agent shall provide to the
Lenders copies of all information, notices and reports required to be given to
the Agent by the Borrower hereunder, promptly upon receipt of same, excepting
for information and notices relating solely to the role of the Agent hereunder.
17.7 AGENT AND AGENT AUTHORITY. With respect to its Pro Rata Share
of Advances, the Agent shall have the same rights and powers under the
Documents as any other Lender and may exercise the same as though it were not
the Agent. The Agent may accept deposits from, lend money to, and generally
engage in any kind of business with the Borrower, Parent, their Subsidiaries,
the Borrower's shareholders or any corporation or other entity owned or
controlled by any of them and any Person which may do business with any of
them, all as if the Agent was not serving as Agent, without any duty or
obligation to account therefor to the Lenders.
17.8 LENDERS' CREDIT DECISIONS. It is understood and agreed by
each Lender that it has itself been, and shall continue to be, solely
responsible for making its own independent appraisal
<PAGE> 55
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of and investigations into the financial condition, creditworthiness,
condition, affairs, status and nature of the Borrower, Parent and their
Subsidiaries. Accordingly, each Lender confirms with the Agent that it has not
relied, and shall not hereafter rely, on the Agent (a) to check or enquire on
its behalf into the adequacy, accuracy or completeness of any information
provided by the Borrower or any other Person under or in connection with the
Credit Facility (whether or not such information has been or is hereafter
distributed to such Lender by the Agent) or (b) to assess or keep under review
on its behalf the financial condition, creditworthiness, condition, affairs,
status or nature of the Borrower, Parent and their Subsidiaries. Each Lender
acknowledges that a copy of the Documents has been made available to it for
review and each Lender acknowledges that it is satisfied with the form and
substance of the Documents. A Lender shall not make any independent
arrangement with the Borrower, Parent and their Subsidiaries for the
satisfaction of any Obligations owing to it under the Documents without the
written consent of the other Lenders.
17.9 INDEMNIFICATION. The Lenders hereby agree to indemnify the
Agent and its directors, officers, agents and employees (to the extent not
actually reimbursed by the Borrower) in accordance with their respective Pro
Rata Shares, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent or its directors, officers, agents and employees in
any way relating to or arising out of the Documents or any action taken or
omitted by the Agent under or in respect of the Documents in its capacity as
Agent, provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or wilful misconduct. Without limiting the generality of the
foregoing, each Lender agrees to reimburse the Agent promptly upon demand for
its Pro Rata Share of any reasonable out-of-pocket expenses (including counsel
fees, on a solicitor-client basis) incurred by the Agent in connection with the
preservation of any right of the Agent or the Lenders under, or the enforcement
of, or legal advice in respect of rights or responsibilities under, the
Documents, to the extent that the Agent is not actually reimbursed for such
expenses by the Borrower. This indemnity shall survive the termination of this
Agreement as a separate covenant of the Lenders.
17.10 RESIGNATION AND REMOVAL. The Agent may resign at any time by
giving written notice thereof to the Lenders and Borrower. Each such notice
shall set forth the date of such resignation. The Majority Lenders or
Borrower, with the consent (which shall not be unreasonably withheld) of the
Majority Lenders (other than Agent) shall be entitled to remove the Agent.
Upon any such resignation or removal, the Borrower may, with the written
concurrence (which shall not be unreasonably withheld) of the Majority Lenders
(exclusive of the Agent), designate a Successor Agent. If, within fifteen (15)
days after the date of such resignation or removal, the Borrower makes no such
designation or such written concurrence is not given, the Majority Lenders
(exclusive of the Agent) shall, with the consent of the Borrower (which consent
shall not be unreasonably withheld or delayed), appoint a Successor Agent.
Upon the acceptance of any appointment as an Agent hereunder by a Successor
Agent and the satisfaction of all obligations on the part of such retiring or
removed Agent necessary to facilitate succession, the
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retiring or removed Agent, as the case may be, shall be discharged from its
duties and obligations under this Agreement and the other Documents. After the
Agent's resignation or removal hereunder, the provisions of this Article 17
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under the Documents. The out-going Agent shall
promptly execute all assignments and other documents necessary to effectuate
the transfer of the agency in connection with this Agreement and shall promptly
deliver all original documents and any collateral in its possession to the
Successor Agent.
17.11 TAKING AND ENFORCEMENT OF REMEDIES. Each of the Lenders
hereby acknowledges that, to the extent permitted by applicable Law, the
remedies provided under the Documents to the Lenders are for the benefit of the
Lenders collectively and not severally and that its rights in respect of the
remedies thereunder are to be exercised not severally but collectively through
the Agent upon the decision of the Lenders (with the required majority as
herein provided), regardless of whether acceleration of any Obligation
hereunder was made. Notwithstanding any of the provisions contained herein,
each of the Lenders hereby covenants and agrees that it shall not be entitled
to take any action with respect to the Credit Facility, including any
acceleration of any Obligation, but that any such action shall be taken only by
the Agent with the prior written direction of the Majority Lenders, provided
that, notwithstanding the foregoing, in the absence of instructions from the
Lenders, and where in the sole opinion of the Agent the exigencies of the
situation warrant such action, the Agent may without notice to or consent of
the Lenders take such action on behalf of the Lenders as it deems appropriate
or desirable in the circumstances. Each of the Lenders hereby covenants and
agrees that it has not heretofore and shall not seek, take, accept or receive
any security for any of the Obligation and, except for the payment of
structuring fees, agency fees or any other similar forms of compensation, shall
not enter into any agreement with any of the Parties relating in any manner
whatsoever to the Credit Facility, unless all of the Lenders shall at the same
time obtain the benefit of any such security or agreement, as the case may be.
17.12 AGENT MAY PERFORM COVENANTS. If the Borrower fails to perform
any covenants on its part herein contained, (i) the Agent may give notice to
the Borrower of such failure and if, within 30 days of such notice (or after
the expiry of such other time or cure period as may be required in this
Agreement), such covenant remains unperformed, or (ii) without notice if the
Agent determines that the Lenders could otherwise be adversely affected, and,
in each case, the Agent on behalf of the Lenders may, in its sole discretion
but need not, perform any such covenant capable of being performed by it and,
if the covenant requires the payment or expenditure of money, the Agent may
make such payment or expenditure and all sums so expended shall be forthwith
payable by the Borrower to the Agent on behalf of the Lenders and shall bear
interest at the Canadian Prime Rate plus 2% for expenses denominated in
Canadian Dollars and the U.S. Base rate plus 2% for expenses denominated in
U.S. Dollars.
17.13 NO LIABILITY OF AGENT. The Agent, in its capacity as agent
hereunder, shall have no responsibility or liability to the Obligors or the
Lenders on account of the failure of any Lender
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to perform its obligations hereunder, or to any Lender on account of the
failure of any Obligor to perform its obligations under the Documents.
17.14 NATURE OF OBLIGATIONS UNDER THIS AGREEMENT.
(a) OBLIGATIONS SEPARATE. The obligations of each Lender and the
Agent under this Agreement are separate. The failure of any
Lender to carry out its obligations hereunder shall not
relieve the other Lenders, the Agent, the Borrower or any
Restricted Subsidiary of any of their respective obligations
under the Documents.
(b) NO LIABILITY FOR FAILURE BY OTHER LENDERS. Neither the Agent
nor any Lender shall be liable or otherwise responsible for
the obligations of any other Lender under the Documents.
17.15 CONSENT OR WAIVER BY LENDERS.
(a) UNANIMITY. The following matters shall require the unanimous
approval, consent or agreement, as the context requires, of
all Lenders:
(i) the reduction or forgiveness of any Obligation;
(ii) the postponement of any Maturity Date of any Advance;
(iii) any increase in the Commitment Amount;
(iv) any change in the nature of Accommodations or any
amendment to Articles 3 and 15 and Sections 11.1,
14.1(k) and 14.2(b);
(v) any amendments to the Parent Guarantee or any Support
Guarantee;
(vi) any assignment by the Borrower under Section 20.1;
(vii) any amendment to this Section 17.15; and
(viii) any change to the definitions of "Majority Lenders"
and "Termination Date".
(b) CONSENT OF AGENT. Any change or modification to any
provisions to the Documents which directly affect the rights
and obligations of the Agent, acting in such capacity, shall
require the consent of the Agent.
(c) MAJORITY CONSENT. Subject to paragraphs (a) and (b) above,
any waiver of or any amendment to any provision of the
Documents and any action, consent or other
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determination in connection with the Documents shall bind all
of the Lenders if such waiver, amendment, action, consent or
other determination is agreed to in writing by the Majority
Lenders.
ARTICLE 18
EVENTS OF DEFAULT
18.1 EVENTS OF DEFAULT. Each of the following events shall
constitute an Event of Default:
(a) FAILURE TO PAY. If the Borrower fails to pay any of its
Obligations when due and payable and such failure shall
continue unremedied for a period of 5 Banking Days; provided,
however, that any such Default shall not constitute an Event
of Default if subsequently available information indicates
that a payment made when due was insufficient because of a
good faith error in calculation so long as the Borrower shall
cure such deficiency within 5 Banking Days after the Borrower
becomes aware of such deficiency;
(b) BREACH OF CERTAIN COVENANTS. If the Borrower fails to duly
observe, perform or comply with any covenant, agreement,
condition or provision set forth in Section 14.1(d) or 14.2
of this Agreement;
(c) BREACH OF COVENANTS. If any Obligor fails (other than as
referred to in subsections (a) and (b) above) to duly observe,
perform or comply with any covenant, agreement, condition or
provision of any Document applicable to it (even if all or
part of such agreement or covenant is void or unenforceable),
and such failure is not remedied within 30 Banking Days after
written notice thereof shall have been sent to the Borrower by
the Agent or any Lender;
(d) FAILURE TO EXECUTE SUPPORT GUARANTEE. If any Restricted
Subsidiary or Obligor other than the Parent and Borrower fails
to execute and deliver to the Agent a Support Guarantee within
30 days of becoming an Obligor.
(e) FALSE REPRESENTATION OR WARRANTY. If any representation or
warranty previously, presently or hereafter made in writing or
deemed made by or on behalf of any Obligor in connection with
any Document shall have been false or incorrect in any
material respect on any date on or as of which made and either
(i) an Executive Officer of the Borrower had actual knowledge
that such representation or warranty was false or incorrect in
a material respect when made or (ii) if no Executive Officer
had such knowledge, such representation or warranty shall
continue to be false or incorrect in any material respect 30
Banking Days after the earlier of an
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Executive Officer of the Borrower obtaining actual knowledge
thereof or written notice thereof shall have been sent to the
Borrower by the Agent;
(f) FAILURE TO PAY OTHER INDEBTEDNESS. If any Obligor (i) fails
to pay when due Indebtedness in excess of $20,000,000 or (ii)
breaches or defaults in the performance of any agreement or
instrument by which any such Indebtedness in excess of
$20,000,000 is issued, evidenced, governed, or secured, and
any such failure, breach or default continues beyond any
applicable period of grace provided therefor;
(g) BANKRUPTCY. If any Obligor:
i) suffers the commencement of any involuntary
bankruptcy, reorganization, debt arrangement, winding
up, dissolution, official management or
administration, or other case or proceeding under any
bankruptcy or insolvency law or the entry against it
of a judgment, decree or order for relief by a court
of competent jurisdiction in such a case or
proceeding, which in either case remains undismissed
for a period of 60 days; provided that each Obligor
hereby expressly authorizes the Agent and each Lender
to appear in any court proceeding during such 60 day
period to preserve, protect and defend their rights
under the Documents;
ii) commences a voluntary case under any applicable
bankruptcy, insolvency or similar law now or
hereafter in effect, including, without limitation,
the Bankruptcy and Insolvency Act (Canada), the
Companies' Creditors Arrangement Act (Canada), the
United States Bankruptcy Code or the Corporations Law
of Australia, as from time to time amended; or
applies for or consents or acquiesces to the entry of
an order for relief in an involuntary case under any
such law, or becomes insolvent or makes a general
assignment for the benefit of creditors, or fails
generally to pay (or admits in writing its inability
to pay) its debts as such debts become due, or takes
corporate or other action to authorize any of the
foregoing;
iii) suffers the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee,
sequestrator, administrator or similar official of
all or a substantial part of its assets in a
proceeding brought against or initiated by it, and
such appointment is neither made ineffective nor
discharged within 60 days after such event or such
appointment or taking possession is at any time
consented to, requested by, or acquiesced to by such
Obligor;
iv) suffers the entry against it of a final judgment or
decree for the payment of money in excess of
$20,000,000 (not covered by insurance satisfactory to
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the Agent in its discretion), unless the same is
discharged within 30 days after the date of entry
thereof or an appeal or appropriate proceeding for
review thereof is taken within such period and a stay
of execution pending such appeal is obtained and
continues; or
v) suffers a levy of distress or execution or
possession, or a writ or warrant of attachment or any
similar process to be issued by any court against all
or any substantial part of its property, and such
writ, levy or warrant or any similar process is not
stayed or released within 30 days after the entry or
levy thereof or after any stay is vacated or set
aside.
(h) DEFAULT BY PARENT. If any breach or default occurs under the
Parent Guarantee or an "Event of Default" occurs under the
U.S. Credit Facility, as therein defined, provided that if
such breach or default is cured or waived pursuant to the
terms of the Parent Guarantee or the U.S. Credit Facility, as
applicable, then such breach or default shall no longer
constitute an Event of Default under this Agreement.
(i) OTHER DEFAULTS. If any Obligor defaults in the observance or
performance of any non-monetary obligation, covenant or
condition to be observed or performed by it pursuant to any
agreement to which the Obligor is a party or by which any of
its property is bound (other than the obligations, covenants
and conditions provided for in Section 18.1(f)), where such
default could reasonably be expected to have a Material
Adverse Effect and the Obligor fails to remedy such default
within a period of 30 days after notice of such default from
the Agent to the Borrower unless such default is being
contested by the Borrower, Pioneer (Resources), Parent or
Restricted Subsidiary, as the case may be, in good faith and
the Borrower, Pioneer (Resources), Parent or a Restricted
Subsidiary has provided the Agent with a reserve thereof
adequate in the opinion of the Agent acting reasonably.
(j) INVALIDITY OF DOCUMENTS. If any of the Documents becomes
invalid or unenforceable in any material respect for any
reason, or if it becomes unlawful for the Borrower to perform
any of its material obligations under any of the Documents.
(k) CHANGE OF CONTROL. If a Change of Control occurs.
18.2 REMEDIES. Upon the occurrence of an Event of Default, the
Agent (on direction by the Majority Lenders) may forthwith terminate any
further obligation to make Advances or to grant any further credits to the
Borrower hereunder and may declare the Outstandings together with unpaid
accrued interest thereon and any other amounts owing under the Documents,
contingent or otherwise to be immediately due and payable, whereupon the
Borrower shall be obligated without any further grace period to forthwith pay
such amounts to the Lenders, and the Lenders may exercise any and all rights,
remedies, powers and privileges afforded by applicable
<PAGE> 61
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Law or under any and all other instruments, documents and agreements made to
secure or assure payment and performance of the obligations of the Obligors
under the Documents.
18.3 WAIVERS. An Event of Default may only be waived in writing by
the Majority Lenders.
ARTICLE 19
CONFIDENTIALITY
19.1 NON-DISCLOSURE. All confidential information of the Obligors,
including, without limitation, any and all provisions of the Documents and any
and all discussions or agreements made between the Parties with respect to the
Documents and any confidential information relating to a Hostile Acquisition,
other than confidential information that is required by Law to be disclosed by
the Party receiving the confidential information to any Governmental Body,
shall be held by the Agent and each Lender in the strictest confidence and
shall not be disclosed to any Person, except as provided in Sections 19.2 and
19.3, provided that the confidential nature of the information is made known or
ought to have been known to the disclosing Party.
19.2 EXCEPTIONS. Sections 19.1 and 19.3 do not apply to
confidential information:
(a) of a Party where that Party consents in writing to its
disclosure;
(b) which becomes part of the public domain without a breach of
this Article 19;
(c) received from a third party without restriction on further
disclosure and without breach of Section 19.1;
(d) developed independently without breach of Section 19.1;
(e) to the extent required to be disclosed by order or direction
of a court or Governmental Body of competent jurisdiction; or
(f) to the extent required to be disclosed in connection with any
future syndication, participation, sale or assignment pursuant
to Section 20.2, and which disclosure is made pursuant to the
same obligation of confidentiality.
19.3 PERMITTED DISCLOSURES BY THE AGENT AND EACH LENDER.
Confidential information received by the Agent and each Lender may be disclosed
to its directors, officers, employees, Affiliates, auditors, accountants, legal
counsel, geologists, engineers and other consultants and financial advisors
retained by the Agent and each Lender on a need to know basis only, but subject
to the same duty of confidentiality.
<PAGE> 62
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19.4 SURVIVAL. The obligations of the Parties under this Article
19 shall survive the termination of this Agreement.
ARTICLE 20
ASSIGNMENT
20.1 ASSIGNMENT BY BORROWER. Except as expressly permitted
hereunder, this Agreement and the rights and obligations of the Borrower
hereunder shall not be assignable, in whole or in part, by the Borrower without
the prior written consent of the Lenders.
20.2 ASSIGNMENT BY THE LENDERS. The Lenders shall have the right
to syndicate, participate, sell or assign in minimum portions of $10,000,000
and thereafter in $1,000,000 increments, the Commitment Amount under the
Credit Facility to one or more Canadian Resident Lenders under Tranche A or
Non-resident Lenders under Tranche B, acceptable to the Borrower acting
reasonably, provided that at and after the time of the assignment, the Borrower
shall not be under any obligation to pay by way of withholding tax or otherwise
any greater amount than it would have been obliged to pay if the Lender had not
made an assignment, and provided further, that each remaining Lender shall at
all times maintain a Commitment then outstanding in an aggregate principal
amount at least equal to $5,000,000. An assignment fee of $3,500 or the
Exchange Equivalent thereof in Canadian Dollars for each such assignment (other
than to an Affiliate, a Lender or a Federal Reserve Bank) shall be payable to
the Agent by the assignor or assignee. In the event of such syndication,
participation, sale or assignment, the Borrower shall execute and deliver all
such agreements, documents and instruments as the Agent or Lender may
reasonably request to effect and recognize such syndication, participation,
sale or assignment.
ARTICLE 21
MISCELLANEOUS
21.1 NOTICES. Unless otherwise provided in the Documents, any
notice, consent, determination, demand or other communication required or
permitted to be given or made thereunder, shall be in writing and shall be
sufficiently given or made if:
(a) left at the relevant address set forth below; or
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(b) telecopied or sent by other means of recorded electronic
communication:
(i) if to the Agent, addressed to it at:
Canadian Imperial Bank of Commerce
Commerce Court West, 7th Floor,
Toronto, Ontario, M5L 1A2
Telecopier: (416) 650-3727
Attention: Agency Manager
(ii) if to the Borrower, addressed to it at:
Chauvco Resources Ltd.
2900, 255 - 5th Avenue S.W.
Calgary, AB T2P 3G6
Telecopier: (403) 231-3260
Attention: Jane Stevenson, Vice
President-Finance and
Controller
cc: M. Garrett Smith
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
Telecopier: (972) 402-7028
Curt F. Kamradt
303 West Wall
Suite 101
P.O. Box 3178
Midland, Texas 79701
Telecopier: (915) 571-5696
(iii) if to a Lender, addressed to it at its address or
facsimile number set forth on the signature pages
hereof.
(c) The Parties shall accept service of judicial proceedings
arising under the Documents at its respective address set
forth herein.
(d) Any notice or other communication given or made in accordance
with this Section 21.1 shall be deemed to have been given or
made on the same day and to have been received on the day of
delivery if delivered as aforesaid or on the day of receipt of
<PAGE> 64
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same by telecopy or other recorded means of electronic
communication, as the case may be, provided such day is a
Banking Day and that such notice is received prior to 12:00
noon local time and, if such day is not a Banking Day or if
notice is received after12:00 noon local time, on the first
Banking Day thereafter.
(e) Each Party may change its address and telecopier number for
purposes of this Section 21.1 by written notice given in the
manner provided in this Section 21.1 to the other Parties.
21.2 TELEPHONE INSTRUCTIONS. Any telephone instructions given by
the Borrower to the Agent in relation to this Agreement shall be at the risk of
the Borrower and the Agent shall have no liability for any error or omission in
such telephone instructions or in the interpretation or execution thereof by
the Agent, as the case may be, provided the Agent acted without gross
negligence or wilful misconduct in the circumstances. The Agent shall notify
the Borrower of any conflict or inconsistency between any written confirmation
of such telephone instructions received from the Borrower and the said
telephone advice as soon as practicable after the conflict or inconsistency
becomes apparent to the Agent.
21.3 NO PARTNERSHIP, JOINT VENTURE OR AGENCY. Except as expressly
provided for herein, the Parties agree that nothing contained in this Agreement
nor the conduct of any Party shall in any manner whatsoever constitute or be
intended to constitute any Party as the agent or representative or fiduciary of
any other Party nor constitute or be intended to constitute a partnership or
joint venture among the Parties or any of them, but rather each Party shall be
separately responsible, liable and accountable for its own obligations under
the Documents, or any conduct arising therefrom and for all claims, demands,
actions and causes of action arising therefrom. The Parties agree that no
Party shall have the authority or represent that it has, or hold itself out as
having, the authority to act for or assume any obligation or responsibility on
behalf of any other Party, save and except as may be expressly provided for in
this Agreement.
21.4 JUDGMENT CURRENCY.
(a) DEFICIENCY. If, for the purposes of obtaining judgment in any
court or any other related purpose hereunder, it is necessary
to convert an amount due hereunder in the currency in which it
is due (the "Original Currency") into another currency (the
"Second Currency"), the rate of exchange applicable shall be
the Noon Rate on the relevant date to purchase in Toronto,
Ontario the Original Currency with the Second Currency and
includes any premium and costs of exchange payable by the
purchaser in connection with such purchase. Each Party (the
"First Party") agrees that its obligation in respect of any
Original Currency due from it to the other Parties hereunder
shall, notwithstanding any judgment or payment in the Second
Currency, be discharged only to the extent that on the Banking
Day following the receipt of any sum so paid in the Second
Currency, the other Parties may, in accordance with normal
banking procedures, purchase in the Toronto, Ontario
<PAGE> 65
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foreign exchange market the Original Currency with the amount
of the Second Currency so paid; and if the amount of the
Original Currency so purchased is less than the amount
originally due in the Original Currency, the First Party
agrees that the deficiency shall be a separate obligation of
it, independent from its obligations under this Agreement, and
shall constitute in favour of the other Parties a cause of
action which shall continue in full force and effect
notwithstanding any such judgment, or order to the contrary,
and the First Party agrees, notwithstanding any such payment
or judgment, to indemnify the other Parties against any such
loss or deficiency.
(b) EXCESS. A Lender shall pay to the Borrower the amount, if
any, after netting out all amounts due by the Borrower under
Section 21.4(a), which it may realize in excess of what is
owed to it by virtue of the conversion of the Original
Currency into the Second Currency.
21.5 FURTHER ASSURANCES. The Borrower shall, from time to time
forthwith at the Agent's request and at its own cost and expense, do, make and
execute, or cause to be executed, all such further documents, acts, matters and
things which may be reasonably required by the Agent with respect to the Credit
Facility or any part thereof and to give effect to any provision of the
Documents.
21.6 WAIVER OF LAWS. To the extent legally permitted, the Borrower
hereby irrevocably and absolutely waives the provisions of any applicable Law
which may be inconsistent at any time with, or which may delay or limit in any
way, the enforcement of the Documents in accordance with their terms.
21.7 ATTORNMENT AND WAIVER OF JURY TRIAL. The Parties hereto do
hereby irrevocably:
(a) submit and attorn to the non-exclusive jurisdiction of the
courts of the Province of Alberta and the Laws of Canada
applicable therein for all matters arising out of or relating
to the Documents or any of the transactions contemplated
thereby; and
(b) waive any right they may have to, or to apply for, trial by
jury in connection with any matter, action, proceeding, claim
or counterclaim arising out of or relating to the Documents or
any of the transactions contemplated thereby.
21.8 INTEREST ON PAYMENTS IN ARREARS.
(a) Except as otherwise provided in this Agreement, interest shall
be paid by the Parties as follows:
(i) on amounts for which any Party has actually incurred
an out-of-pocket expense and for which another Party
has an obligation under the Documents
<PAGE> 66
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to reimburse such amounts to a Party incurring the
expenses, interest shall be payable on such amount at
the Canadian Prime Rate plus 2% for amounts
denominated in Canadian Dollars and at the Alternate
Base Rate plus 2% for amounts denominated in U.S.
Dollars, from and including the day on which the
amount was incurred to but excluding the day on which
the amount is reimbursed if, commencing on the date
which is 3 Banking Days following a demand for
payment of the amount in accordance with the terms of
the Documents, such expense has not been paid; and
(ii) on amounts payable by one Party to another Party
under the Documents where such payment is in default
but the non-payment of such amount has not required
an actual out-of-pocket expense by the Party to whom
such payment is due, at the Canadian Prime Rate plus
2% for amounts denominated in Canadian Dollars and at
the Alternate Base Rate plus 2% for amounts
denominated in U.S. Dollars, from and including the
day on which the payment was due to, but excluding
the day on which the payment is made whether before
or after judgment, but if such payment is a
reimbursement by the Agent to the Borrower for
overpayment by it to the Agent or any Lender or is in
respect of an inadvertent underpayment by the Agent
or any Lender, the Agent or any Lender or the
Borrower to another Party (based on information
provided by such other Party), such interest shall
only be calculated from the date which is 3 Banking
Days following a demand for payment by the Party
entitled to it.
(b) All interest referred to in this Section 21.8 shall be
calculated on the same basis as Canadian Prime Rate Loans for
amounts denominated in Canadian Dollars and calculated on the
same basis as Alternate Base Rate Loans for amounts
denominated in U.S. Dollars.
21.9 PAYMENTS DUE ON BANKING DAY. Whenever any payment hereunder
shall be due on a day other than a Banking Day, or in the case of LIBOR Based
Loans or Canadian Eurodollar Loans a LIBOR Banking Day, such payment shall be
made on the next succeeding Banking Day, or LIBOR Banking Day, as applicable,
and such extension of time shall in such case be included in the computation of
payment of interest thereunder.
21.10 APPLICATION OF PROCEEDS. Except as otherwise agreed to by the
Lenders in their sole discretion and as otherwise expressly provided hereunder,
all payments made by or on behalf of the Borrower or a Restricted Subsidiary
under the Documents, after acceleration pursuant to Section 18.2, shall be
applied by the Agent in accordance with amounts owed in respect of each
category of amounts set forth below, each such application to be made in the
following order with the balance remaining after application in respect of each
category to be applied to the next succeeding category, provided that any
remainder after all Obligations are satisfied is paid to the Borrower:
<PAGE> 67
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(a) in payment of any amounts due and payable by way of
recoverable expenses;
(b) in payment of any amounts by way of any fees (other than the
facility fee referred to in Section 11.1);
(c) in payment of any amounts due and payable as and by way of
interest or the facility fee, including any interest on
overdue amounts;
(d) in payment of any Outstandings; and
(e) in payment of all other Obligations.
21.11 COUNTERPARTS. The Documents may be executed in any number of
counterparts and by different Parties in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same instrument.
<PAGE> 68
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21.12 WHOLE AGREEMENT. The Documents constitute the whole and
entire agreement between the Parties and cancel and supersede any prior
agreements, undertakings, declarations, representations and warranties, written
or verbal between the Agent, any Lender and the Borrower in respect of the
Credit Facility.
THIS LOAN AGREEMENT has been executed effective the date
first written.
CHAUVCO RESOURCES LTD., as Borrower
By: /s/ GLEN SCHMIDT
______________________________
Name: Glen Schmidt
Title: Vice President
By: /s/ JANE STEVENSON
______________________________
Name: Jane Stevenson
Title: Controller
This is a counterpart execution page to the Credit Agreement
dated December 18, 1997.
<PAGE> 69
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CANADIAN IMPERIAL BANK OF
COMMERCE, as Arranger, Administrative Agent,
and Canadian Resident Lender
By:
-----------------------------------
Name: David Swain
Title: Vice President
Address as Arranger and Administrative Agent:
Commerce Court West, 7th floor
Toronto, Ontario M5L 1A2
Fax: 416-650-3727
Address as Canadian resident Lender:
Bankers Hall, 10th floor
855-2nd Street S.W.
Calgary, Alberta T2P 4J7
Fax: 403-221-5779
Commitment: Tranche A $40,000,000
This is a counterpart execution page to the Credit Agreement
dated December 18, 1997.
<PAGE> 70
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THE BANK OF NOVA SCOTIA, as Co-Syndication
Agent and Canadian Resident Lender
By:
---------------------------------
Name: Dan Belot
Title: Relationship Manager
By:
---------------------------------
Name: Michael Jackson
Title: Vice President and Office Head
Address:
Corporate & Energy Banking
Suite 3820, 700-2nd Street S.W.
Calgary, Alberta T2P 2N7
Fax: 403-221-6497
Commitment: Tranche A $40,000,000
This is a counterpart execution page to the Credit Agreement
dated December 18, 1997.
<PAGE> 71
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ROYAL BANK OF CANADA, as Co-Syndication
Agent and Canadian Resident Lender
By:
------------------------------
Name: Bruce Edgelow
Title: Senior Account Manager
By:
------------------------------
Name: Lorne Gartner
Title: Manager
Address:
Oil & Gas Banking Centre
335 8th Avenue S.W., 11th floor,
Calgary, Alberta T2P 1C9
Fax: 403-292-3436
Commitment: Tranche A $40,000,000
This is a counterpart execution page to the Credit Agreement
dated December 18, 1997.
<PAGE> 72
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THE CHASE MANHATTAN BANK OF CANADA,
as Co- Agent and Canadian Resident Lender
By:
-------------------------------
Name: Christine Chan
Title: Vice President
Address:
1 First Canadian Place
6900, 100 King Street West
Toronto, Ontario M5X 1A4
Fax: 416-216-4161
Commitment: Tranche A $35,000,000
This is a counterpart execution page to the Credit Agreement
dated December 18, 1997.
<PAGE> 73
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MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Co-Agent and Non-resident Lender
By:
---------------------------------
Name: John Kowalczuk
Title: Vice President
Address:
60 Wall Street, 22nd floor
New York, New York 10260
Fax: 212-648-5014
Commitment: Tranche B $35,000,000
This is a counterpart execution page to the Credit Agreement
dated December 18, 1997.
<PAGE> 74
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NATIONSBANK OF TEXAS, N.A., as Co-Agent
and Non-resident Lender
By:
---------------------------------
Name: Frank Stowers
Title: Vice President
Address:
303 West Wall Street
Midland, Texas 79701
Fax: 915-685-2009
Commitment: Tranche B $35,000,000
This is a counterpart execution page to the Credit Agreement
dated December 18, 1997.
<PAGE> 75
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THE TORONTO-DOMINION BANK, as Co-
Agent and Canadian Resident Lender
By:
---------------------------------
Name: Loretta Palandri
Title: Manager, Corporate Banking
Address:
800 Home Oil Tower
324-8th Avenue S.W.
Calgary, Alberta T2P 2Z2
Fax: 403-292-2772
Commitment: Tranche A $35,000,000
This is a counterpart execution page to the Credit Agreement
dated December 18, 1997.
<PAGE> 76
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FIRST UNION NATIONAL BANK, as Non-resident
Lender
By:
---------------------------------
Name: Michael Kolosowsky
Title: Vice President
Address:
One First Union Center
301 South College Street, TW-11
Charlotte, North Carolina 28288-0658
Fax: 704-374-6249
Commitment: Tranche B $15,000,000
This is a counterpart execution page to the Credit Agreement
dated December 18, 1997.
<PAGE> 77
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WACHOVIA BANK, N.A., as Non-resident
Lender
By:
---------------------------------
Name: Paige Mesaros
Title: Vice President
Address:
191 Peachtree Street N.E.
MC370, 28th floor
Atlanta, Georgia 30303
Fax: 404-332-6898
Commitment: Tranche B $15,000,000
This is a counterpart execution page to the Credit Agreement
dated December 18, 1997.
<PAGE> 78
SCHEDULE A
CHAUVCO RESOURCES LTD.
LOAN AGREEMENT
DEFINITIONS
"ACCOMMODATION " means an accommodation referred to in Section 3.10 of the
Agreement.
"ACQUISITION" means the indirect acquisition of Chauvco by Parent as
contemplated in the Combination Agreement.
"ADDITIONAL COMPENSATION" has the meaning attributed to it in Section 10.1(a)
of the Agreement.
"ADVANCE" means with respect to a Drawdown under the Credit Facility or a
rollover or conversion thereof:
(a) in respect of Accommodations other than Bankers' Acceptances,
the disbursement or credit of funds to, or to the credit of,
the Borrower; and
(b) in respect of Bankers' Acceptances, the acceptance or purchase
by the Canadian Resident Lenders of drafts issued under the
Agreement by the Borrower.
"AFFILIATE" has the meaning given such term in the Business Corporations Act
(Alberta).
"AGENT" means initially CIBC in its capacity as administrative agent under the
Documents or any Successor Agent.
"AGENT'S CANADIAN ADDRESS" means Commerce Court West, 7th Floor, Toronto,
Ontario, M5L 1A2, until changed in accordance with the provisions of the
Agreement.
"AGREEMENT" or "THIS AGREEMENT" means the agreement in writing dated the
Closing Date between the Borrower, CIBC as Agent and the Lenders entitled
"Credit Agreement", inclusive of all Schedules, including this Schedule, as
amended, confirmed, replaced or restated from time to time and "hereto",
"hereof", "herein", "hereby" and "hereunder", and similar expressions mean and
refer to the Agreement and, unless the context otherwise requires, not to any
particular Article, Section, paragraph or other subdivision thereof.
"ALTERNATE BASE RATE" or "ABR" means on any day, a fluctuating rate of
interest per annum equal to the higher of (i) the rate of interest per annum
most recently established by CIBC Inc. as its reference rate for U.S. Dollar
commercial loans made to a Person in the United States; and (ii) the Federal
Funds Rate plus 50 Basis Points.
<PAGE> 79
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"ALTERNATE BASE RATE LOANS" mean an Advance in U.S. Dollars which bears
interest at a rate based on the Alternate Base Rate.
"APPLICABLE RATING LEVEL" means the level based on the senior unsecured
long-term debt rating of the Parent as determined by the Rating Agencies as set
forth in Section 3.11.
"BA RATE" means with respect to Bankers' Acceptances accepted by the Canadian
Resident Lenders, as follows:
(a) if such Lender is listed in Schedule I of the Bank Act
(Canada), the rate established by CIBC for Bankers'
Acceptances of similar terms at approximately 10:00 a.m.,
Toronto, Ontario time; and
(b) if such Lender is not listed in Schedule I of the Bank Act
(Canada), the lesser of such Lender's Banker's Acceptance rate
for Bankers' Acceptances of similar terms or the rate
established by CIBC for such Bankers' Acceptances of similar
terms at approximately 10:00 a.m., Toronto, Ontario time plus
7.5 Basis Points.
"BANKERS' ACCEPTANCE" means a Canadian Dollar draft of the Borrower, for a term
selected by the Borrower of either 1, 2, 3 or 6 months (as reduced or extended
by the Lender, acting reasonably, to allow the maturity thereof to fall on a
Banking Day) payable in Canada.
"BANKING DAY" means any day, other than a Saturday or Sunday, on which the
Lenders, to the extent they have offices in the following cities, are open for
domestic and foreign exchange business in Calgary, Alberta, Toronto, Ontario
and New York, New York.
"BANKRUPTCY AND INSOLVENCY ACT (CANADA)" means the Bankruptcy and Insolvency
Act, S.C. 1992, c. 27, including the regulations made and, from time to time,
in force under that Act.
"BASIS POINT" means one-hundredth of 1%.
"BORROWER" means Chauvco, an Alberta corporation and its successors and
permitted assigns.
"BORROWER'S ACCOUNT" means one or more current accounts maintained by the
Borrower at a branch of the Agent or such other account as may be agreed to by
the Agent and the Borrower.
"BORROWING AMOUNT" means for all Advances a minimum Drawdown of $10,000,000
(Cdn. $ or U.S. $, as applicable) plus any whole multiple of $1,000,000.
"BUSINESS CORPORATIONS ACT (ALBERTA)" means the Business Corporations Act, S.A.
1981 c. B-15, including the regulations made, from time to time, under that
Act.
<PAGE> 80
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"CANADIAN DOLLARS", "CDN. DOLLARS", "CDN. $" or "CANADIAN $" means, in each
case, such currency of Canada which, as at the time of payment or
determination, is legal tender in Canada for the payment of public or private
debts.
"CANADIAN EURODOLLAR" means Canadian Dollars which are freely convertible,
transferable and dealt in on the London Interbank Eurodollar Market.
"CANADIAN EURODOLLAR LOAN" means an Advance in Canadian Dollars which bears
interest at a rate based on the Canadian Eurodollar Rate.
"CANADIAN EURODOLLAR RATE" means the rate for deposits in Canadian Eurodollars
which appears on Telerate Page 3740 of the Dow Jones Telerate Services as of
11:00 a.m. (London (local) time), on the date two LIBOR Banking days before a
Canadian Eurodollar Loan. If such rate is not available, it shall mean the sum
of:
(a) LIBOR; and
(b) hedging costs of each Non-resident Lender in respect of such
conversion from U.S. Dollars to Canadian Dollars.
"CANADIAN GAAP" means generally accepted accounting principles which are in
effect from time to time in Canada, as published in the Handbook.
"CANADIAN PRIME RATE" or "PRIME" means the greater of (i) the rate of interest
per annum most recently announced by the Agent as its reference rate for
Canadian Dollar commercial loans made to a Person in Canada; and (ii) the CDOR
Rate plus 50 Basis Points.
"CANADIAN PRIME RATE LOAN" means an Advance in Canadian Dollars which bears
interest at a rate based on the Canadian Prime Rate.
"CANADIAN RESIDENT LENDER" means CIBC and each Lender identified as such on
the signature pages to the Agreement and any other lender which becomes a
Lender under Tranche A as permitted under this Agreement, each being a Person
that is not a non-resident of Canada for the purposes of the Income Tax Act
(Canada).
"CDOR RATE" means the average yield to maturity for bankers' acceptances
accepted by CIBC quoted on the Reuter's Canadian Deposit Offered Rate screen,
at 10:00 a.m., Toronto, Ontario time on the applicable date on which an Advance
shall take place, for bankers' acceptances having a term similar to the term
requested for each Bankers' Acceptance issued pursuant to the applicable
Advance.
"CHANGE OF CONTROL" means if any Person (other than Pioneer (Canada) or an
Obligor) acquires, directly or indirectly, alone or in concert with other
Persons, over a period of time or at any one
<PAGE> 81
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time, shares in the capital of the Borrower aggregating in excess of 35% of all
of the then issued and outstanding Voting Shares of the Borrower.
"CHAUVCO" means Chauvco Resources Ltd. and its successors.
"CIBC" means Canadian Imperial Bank of Commerce, a Canadian chartered bank
having an office in Calgary, Alberta and its successors and permitted assigns.
"CIBC INC." means CIBC Inc., a U.S. Affiliate of CIBC having its principal
place of business in New York, New York.
"CLOSING CERTIFICATE" means a certificate substantially in the form of Schedule
B to the Agreement.
"CLOSING DATE" means the effective date of the Agreement being December 18,
1997.
"COMBINATION AGREEMENT" means the agreement, as amended, between Parent and
Chauvco dated September 3, 1997 pertaining to the Acquisition.
"COMMITMENT" means, in relation to a Lender, the maximum amount which such
Lender has agreed to lend or to make available under either Tranche A or
Tranche B as initially set forth in the signature pages to the Agreement,
comprised of such Lender's Revolving Commitment and Term Commitment, as may be
reduced or assumed pursuant to the provisions of the Agreement.
"COMMITMENT AMOUNT" means U.S. $300,000,000 or the Exchange Equivalent thereof
in Canadian Dollars as may be reduced pursuant to the provisions of the
Agreement.
"COMPANIES' CREDITORS ARRANGEMENT ACT (CANADA)" means the Companies' Creditors
Arrangement Act, R.S.C. 1985, c. C-36, including the regulations made and from
time to time in force under that Act.
"CONFLICTED LENDER" means, with respect to any Hostile Acquisition, a Lender
that has established an internal policy of general application which prohibits
such Lender from extending credit to Persons (including the Borrower) for the
purposes of funding a Hostile Acquisition in circumstances where such Lender
has existing commitments (whether funded or unfunded) to provide credit to the
Person subject to the Hostile Acquisition.
"CONSOLIDATED" refers to the consolidation of any Person, in accordance with
U.S. or Canadian GAAP, with its properly consolidated Subsidiaries. References
herein to a Person's Consolidated financial statements, financial position,
financial condition, or liabilities refer to the consolidated financial
statements, financial position, financial condition or liabilities, as the case
may be, of such Person and its properly consolidated Subsidiaries.
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"CONSOLIDATED TOTAL ASSETS" means, as at the time of any determination, on a
consolidated basis, based on U.S. GAAP, the Borrower's total assets as shown on
its then most recent balance sheet and as set forth in the Financial
Certificate.
"CONTAMINANTS" means those substances, pollutants, wastes and special wastes
which are defined as contaminants, hazardous, toxic, or a threat to public
health, public safety or to the Environment under any applicable Environmental
Laws.
"CONTROL" means with respect to any Person, any other Person possessing
directly or indirectly, the power to (a) vote sufficient Voting Shares to elect
a majority of directors of such first mentioned Person or (b) direct or cause
the direction of the management and policies of such first mentioned Person,
whether through the ownership of voting securities, by contract or otherwise.
"CONVERSION DATE" means the day which immediately follows the last day of the
Revolving Period.
"CREDIT FACILITY" means the credit facility established by the Lenders by way
of Tranche A and Tranche B in favour of the Borrower pursuant to Section 3.1 of
the Agreement.
"CRIMINAL CODE (CANADA)" means the Criminal Code, R.S.C. 1985, c. C-46,
including the regulations made and, from time to time, in force under that Act.
"DEFAULT" means any event or circumstance which with the giving of notice or
lapse of time (or both) would constitute an Event of Default.
"DISCLOSURE SCHEDULE" means (a) Schedule L hereto and (b) any documents listed
on such schedule and expressly incorporated therein by reference, true and
correct copies of which shall have been delivered to the Agent and each other
Lender prior to the date hereof. Insofar as any representations and warranties
made herein are incorporated by reference or otherwise remade in Documents
delivered as of a date after the date hereof, the term "Disclosure Schedule"
shall in such representations and warranties be deemed to refer as well to all
other documents indicated by the Borrower to be part of the Disclosure Schedule
and which the Borrower has at the particular time in question delivered to the
Agent and each other Lender and which have not been promptly objected to in
writing by or on behalf of the Majority Lenders.
"DISCOUNT PROCEEDS" means the amount received by the Borrower from the sale of
each Bankers' Acceptance without deduction for any applicable stamping fee paid
in respect thereof.
"DISPOSITION" has the meaning attributed to it in Section 14.2(j) of the
Agreement.
"DISTRIBUTIONS" means all stock dividends, liquidating dividends, shares of
stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations and all other distributions (whether similar or dissimilar to
the
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foregoing) on or with respect to any shares held by Pioneer (Canada), but shall
not include Dividends.
"DIVIDENDS" means cash dividends and cash distributions with respect to any
shares held by Pioneer (Canada) made in the ordinary course of business and not
a liquidating dividend.
"DOCUMENTS" means the Agreement, the Parent Guarantee, the Support Guarantees
and any other instruments or agreements entered into by the Parties and any
Obligor relating to the Credit Facility.
"DRAWDOWN" means a borrowing or credit of funds by way of Advances, other than
an Advance by way of rollover or conversion of an Advance.
"DRAWDOWN DATE" means the date specified in a Notice of Borrowing as the date
on which a Drawdown shall occur and which date shall be a Banking Day, and
which, in the case of a LIBOR Based Loan or a Canadian Eurodollar Loan, shall
be a LIBOR Banking Day.
"ENVIRONMENT" means all components of the earth, including, without
limitation, all layers of the atmosphere, air, land (including, without
limitation, all underground spaces and cavities and all lands submerged under
water), soil, water (including, without limitation, surface and underground
water), organic and inorganic matter and living organisms, and the interacting
natural systems that include the components referred to in this definition.
"ENVIRONMENTAL LAWS" means any Law relating, in whole or in part, to the
protection or enhancement of the Environment, including, without limitation,
transportation or handling of dangerous goods.
"ESCROW FUNDS" has the meaning attributed to it in Section 9.5 of the
Agreement.
"EURODOLLARS" means U.S. Dollars which are freely convertible, transferable and
dealt in on the London Interbank Eurodollar Market.
"EVENT OF DEFAULT" means an event specified in Section 18.1 of the Agreement.
"EXCESS" has the meaning attributed to it in Section 5.8 of the Agreement.
"EXCHANGE EQUIVALENT" in respect of one currency (the "Original Currency"),
being Canadian Dollars or U.S. Dollars, as the case may be, means, at the date
of determination, the amount of currency expressed in the other such currency
necessary to purchase, based on the Noon Rate on such date, the specified
amount of the Original Currency on such date.
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"EXECUTIVE OFFICER" means any individual duly elected to and holding one or
more of the following offices of a Person: President, Vice President,
Secretary, Treasurer, Assistant-Treasurer and Assistant-Secretary.
"FACILITY FEE RATE" means the rate in Basis Points for the facility fee as
determined in Section 11.1 of the Agreement.
"FEDERAL FUNDS RATE" means the rate set forth in the Federal Reserve Bank of
New York weekly statistical release designated as H.15(519), opposite the
caption "Federal Funds (Effective)" or, if such rate is not so published for a
Banking Day, the average of the quotations at approximately 10:00 am (New York
time) on such day received by the Agent from three federal funds brokers of
nationally recognized standing selected by the Agent in its sole discretion.
"FINANCIAL CERTIFICATE" means a certificate by the Borrower to the Agent
substantially in the form of Schedule E to the Agreement.
"FIRST INSTALMENT DATE" has the meaning given such term in Section 3.8(b) of
the Agreement.
"FISCAL YEAR" means a period commencing on January 1 and ending on December 31
of each year.
"GOVERNMENTAL BODY" means any domestic or foreign, national, federal,
provincial, state, municipal or other local government or body and any
division, agency, ministry, commission, board or authority or any
quasi-governmental or private body exercising any statutory, regulatory,
expropriation or taxing authority under the authority of any of the foregoing,
and any domestic, foreign or international judicial, quasi-judicial,
arbitration or administrative court, tribunal, commission, board or panel
acting under the authority of any of the foregoing.
"HANDBOOK" means the "CICA Handbook" published by the Canadian Institute of
Chartered Accountants, as amended, replaced or republished from time to time.
"HOSTILE ACQUISITION" means (i) an offer by a Person to acquire or the
acceptance by a Person of an offer to sell shares of a corporation (the
"Target") which, having regard to other shares of the Target that are
beneficially owned by such Person (or over which control or direction is
exercised by such Person and its Subsidiaries and any other Person acting
jointly or in concert) on the date that the offer or acceptance is made,
constitutes a take-over bid under securities legislation applicable thereto and
(ii) which the board of directors of the Target has not approved or recommended
to the shareholders of the Target.
"INCOME TAX ACT (CANADA)" means the Income Tax Act, S.C. 1970-71-72, c. 63,
including the regulations made and, from time to time, in force under that Act.
"INDEBTEDNESS" means with respect to any Person, including the Borrower,
without duplication:
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(a) indebtedness of such Person for borrowed money;
(b) indebtedness of such Person constituting an obligation to pay
the deferred purchase price of property or services (other
than customary payment terms taken in the ordinary course of
such Person's business);
(c) indebtedness of such Person evidenced by a bond, debenture,
note or similar instrument;
(d) principal obligations under leases capitalized in accordance
with U.S. or Canadian GAAP (as applicable) under which such
Person is the lessee;
(e) indebtedness, contingent or otherwise, of such Person with
respect to bankers' acceptances or the face amount of letters
of credit or applications or reimbursement agreements
therefor;
(f) guarantees of such Person of indebtedness or obligations of
the type described in paragraphs (a), (b), (c), (d) or (e)
above of any other Person or obligations to purchase or
acquire or to otherwise protect or insure a creditor against
loss in respect of indebtedness or obligations of the type
described in paragraphs (a), (b), (c), (d) or (e) above of any
other Person, but excluding endorsements in the ordinary
course of business of negotiable instruments in the course of
collection;
(g) indebtedness or obligations of the type described in
paragraphs (a), (b), (c), (d) or (e) above, which are secured
by a Lien on any property owned by such Person, whether or not
such indebtedness or obligations have been assumed by such
Person (limited however, notwithstanding paragraphs (a), (b),
(c), (d) or (e), to the lesser of (i) the amount of its
liability or (ii) the value of such property); and
(h) the undischarged balance of any production payment created by
such Person or for the creation of which such Person directly
or indirectly received payment;
provided, however, Indebtedness shall not include (i) accounts payable incurred
in the ordinary course of such Person's business, or (ii) any obligations in
respect of (A) exchange, forward, future, swap, hedging or similar agreements
and (B) prepayments for gas or oil production or gas or oil imbalances.
"INTEREST ACT (CANADA)" means the Interest Act, R.S.C. 1985, c. I-15, including
the regulations made and, from time to time, in force under that Act.
"JOINT PROXY STATEMENT" means the Joint Management Information Circular and
Proxy Statement of Parent and Chauvco that was mailed out on or about November
17, 1997.
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"JUDGMENT INTEREST ACT (ALBERTA)" means the Judgment Interest Act, S.A. 1984 c.
J-O.5, including the regulations made and, from time to time, in force under
that Act.
"LAWS" means all constitutions, treaties, laws, statutes, codes, ordinances,
orders, decrees, rules, regulations and municipal by-laws, whether domestic,
foreign or international, any judgments, orders, writs, injunctions, decisions,
rulings, decrees and awards of any Governmental Body, and any policies,
voluntary restraints, practices or guidelines of any Governmental Body, and
including, without limitation, any principles of common law and equity.
"LENDERS" means the Canadian Resident Lenders and the Non-resident Lenders
collectively, provided that for the purposes of Tranche A, "Lenders" means the
Canadian Resident Lenders only, and for the purposes of Tranche B, "Lenders"
means the Non-resident Lenders only, and "Lender" means any one Canadian
Resident Lender or Non-resident Lender as the context requires.
"LIBOR" means the rate per annum (rounded up to the nearest 1/100th of 1% if
necessary) determined by the Agent, as the arithmetic average of the rates
listed by Telerate (screen 3750) applicable to the relevant LIBOR Period at
which deposits in U.S. Dollars are offered to financial institutions at 11:00
am (London local time) on the date 2 LIBOR Banking Days in advance of the
commencement of the applicable LIBOR Period. If there is no Telerate quote for
the relevant LIBOR Period, then such rate will be determined by the Agent,
acting reasonably.
"LIBOR BANKING DAY" means any Banking Day on which commercial banks are open
for international business (including dealings in U.S. and Canadian Dollar
deposits in the London Interbank Eurodollar Market) in London, England, New
York, New York, Toronto, Ontario and Calgary, Alberta.
"LIBOR BASED LOAN" means an Advance in U.S. Dollars which bears interest at a
rate based on the LIBOR.
"LIBOR PERIOD" means a period of 1, 2, 3, 6, 9 or 12 months selected by the
Borrower and readily available to the Borrower and accessible to the Lenders at
the time of any request for a LIBOR Based Loan or Canadian Eurodollar Loan in
the London Interbank Eurodollar Market.
"LIEN" means any mortgage, lien, pledge, charge (whether fixed or floating),
security interest, title retention agreement, or other encumbrance of any kind,
contingent or absolute but excludes, for greater certainty, any contractual
right of set-off created in the ordinary course of business and any writ of
execution, or other similar instrument, arising from a judgment relating to the
non-payment of indebtedness.
"MAJORITY LENDERS" means the Lenders holding in aggregate at least 66 2/3% of
the Commitment Amount.
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"MATERIAL ADVERSE CHANGE" means, on a Consolidated basis, a change in or
circumstances arising in regard to the business, operations, assets or
financial conditions of the Borrower and its Subsidiaries, taken as a whole,
that could reasonably be expected to have a material adverse effect on the
ability of the Borrower or its Restricted Subsidiaries to perform its material
obligations under the Documents.
"MATERIAL ADVERSE EFFECT" means, on a Consolidated basis, a material adverse
effect on the business, operations, assets or financial conditions of the
Borrower and its Subsidiaries, taken as a whole, that could reasonably be
expected to have a material adverse effect on the ability of the Borrower or
its Restricted Subsidiaries to perform its material obligations under the
Documents.
"MATURITY DATE" means the date, which must be a Banking Day, or a LIBOR Banking
Day with respect to a LIBOR Based Loan and Canadian Eurodollar Loan, on which a
LIBOR Based Loan or Canadian Eurodollar Loan becomes due and payable by the
Borrower, or the date on which a Bankers' Acceptance matures.
"MONTH" means a calendar month.
"MOODY'S" means Moody's Investors Service, Inc.
"NET PROCEEDS" means the Discount Proceeds less the applicable stamping fee as
provided under the Agreement in respect of Bankers' Acceptances.
"NON-ACCEPTING LENDER" has the meaning attributed to it in Section 3.4.
"NON-RESIDENT LENDER" means any Lender which is not a Canadian Resident Lender,
and shall initially mean each Lender identified as such on the signature pages
to the Agreement and any other Lender who becomes a Lender under Tranche B as
permitted under the Agreement.
"NOON RATE" means, in relation to the conversion of one currency into another
currency, the rate of exchange for such conversion as quoted by the Bank of
Canada (or, if not so quoted, the spot rate of exchange quoted for wholesale
transactions made by the Agent at Toronto, Ontario at approximately noon
(Toronto local time)).
"NOTICE OF BORROWING" means a notice by the Borrower to the Agent substantially
in the form of Schedule C to the Agreement.
"NOTICE OF ROLLOVER/CONVERSION" means a notice by the Borrower to the Agent
substantially in the form of Schedule D to the Agreement.
"NOTICE OF SUBSIDIARY CONVERSION" means a notice by the Borrower to the Agent
substantially in the form of Schedule J to the Agreement.
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"OBLIGATIONS" means, without duplication, all Outstandings, including the face
amount of any unmatured Bankers' Acceptances, and accrued interest thereon, and
the payment or performance of all other Indebtedness of the Borrower to the
Agent or the Lenders or a Lender hereunder or arising under and pursuant to any
other Documents, including all fees, costs, expenses and indemnity obligations
hereunder or thereunder.
"OBLIGORS" means the Borrower, Parent, Pioneer (Resources), each Restricted
Subsidiary and any other Person who provides a Support Guarantee.
"OPERATING CREDIT" means the operating credit facility dated June 14, 1996, as
amended and restated provided by the Operating Lender to the Borrower to fund
negative working capital requirements up to a principal amount not exceeding
Cdn. $20,000,000 or such other operating facility in place from time to time as
may be entered into by the Borrower.
"OPERATING LENDER" means initially Royal Bank of Canada, a Canadian chartered
bank having an office in Calgary, Alberta, or any successor Lender designated
by the Borrower who agrees to provide the Operating Credit.
"OUTSTANDINGS" means the amount of principal outstanding from time to time
owing by the Borrower to the Lenders under the Credit Facility and the face
amount of all unmatured Bankers' Acceptances.
"PARENT" means Pioneer Natural Resources Company and its successors.
"PARENT GUARANTEE" means a guarantee given by the Parent in the form provided
in Schedule H.
"PARTIES" means the Borrower, the Agent and the Lenders and their respective
successors and permitted assigns, and "PARTY" means any one of the Parties.
"PERMITTED ENCUMBRANCES" means in respect of the Borrower or any Restricted
Subsidiary:
(a) Liens for taxes, assessments or other governmental charges or levies
if the same shall not at the particular time in question be due and
delinquent or (if foreclosure, distraint, sale or other similar
proceedings shall not have been commenced or, if commenced, shall have
been stayed) are being contested in good faith and by appropriate
proceedings, and if the Borrower shall have set aside on its books
such reserves (segregated to the extent required by sound accounting
practices) as may be required by U.S. or Canadian GAAP or otherwise
determined by the Board of Directors of the Borrower to be adequate
with respect thereto;
(b) Liens of carriers, warehousemen, mechanics, labourers, materialmen,
landlords, vendors, workmen, and operators arising in the ordinary
course of business or incident to the exploration, development,
operations and maintenance of oil, gas and other hydrocarbon
<PAGE> 89
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properties and related facilities and assets, for sums not yet due or
being contested in good faith and by appropriate proceedings, if the
Borrower shall have set aside on its books such reserves (segregated
to the extent required by sound accounting practices) as may be
required by U.S. or Canadian GAAP or otherwise determined by the Board
of Directors of the Borrower to be adequate with respect thereto;
(c) Liens incurred in the ordinary course of the Borrower's and each
Restricted Subsidiary's respective businesses in connection with
worker's compensation, unemployment insurance and other social
security legislation;
(d) Liens incurred in the ordinary course of the Borrower's and each
Restricted Subsidiary's businesses to secure the performance of bids,
tenders, trade contracts, leases (statutory only), statutory
obligations, surety and appeal bonds, performance and return-of-money
bonds and other obligations of a like nature;
(e) Liens, easements, rights-of-way restrictions, servitudes, permits,
conditions, covenants, exceptions, reservations and other similar
encumbrances incurred in the ordinary course of the Borrower's and
each Restricted Subsidiary's businesses or existing on property and
not in the aggregate materially interfering with the ordinary conduct
of the Borrower's and each Restricted Subsidiary's businesses;
(f) legal or equitable encumbrances deemed to exist by reason of negative
pledges such as in Section 14.2 of this Agreement or the existence of
any litigation or other legal proceeding and any related lis pendens
filing (excluding any attachment prior to judgment, judgment lien or
attachment lien in aid of execution on a judgment);
(g) rights of a common owner of any interest in property held by the
Borrower or any Restricted Subsidiary as such common owner;
(h) farmout, carried working interest, joint operating, unitization,
royalty, overriding royalty, sales and similar agreements relating to
the exploration or development of, or production from, oil and gas
properties incurred in the ordinary course of business,
(i) Liens with respect to production purchased from others;
(j) Liens represented by capital leases permitted under this Agreement;
(k) any defects, irregularities, or deficiencies in title to easements,
rights-of-way or other properties which do not in the aggregate have a
Material Adverse Effect;
(l) Liens existing pursuant to the Security Instruments as defined in the
U.S. Credit Facility Agreement;
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(m) Liens existing in favor of the Agent and Lenders under the Documents;
(n) Liens on assets of a Subsidiary of the Borrower in favor of the
Borrower or another Restricted Subsidiary;
(o) Liens on any property or assets owned or leased by the Borrower or any
Subsidiary existing at the time such property or asset was acquired
(or at the time such Person became a Subsidiary); provided that (i) in
the case of the acquisition of a Subsidiary, such lien only encumbers
property or assets of such Subsidiary immediately prior to or at the
time of acquisition by the Borrower of such Subsidiary and (ii) the
Borrower shall use its best efforts to eliminate such Liens in a
timely manner;
(p) Purchase Money Liens, so long as such Liens only encumber property or
assets (including any improvements thereon, accessions thereto or
proceeds thereof) acquired with the proceeds of purchase money
indebtedness incurred in connection with such Lien;
(q) Liens on the stock or other ownership interest of or in any
Unrestricted Subsidiary;
(r) Liens in renewal or extension of any of the foregoing permitted Liens,
so long as limited to the property or assets encumbered and the amount
of indebtedness secured immediately prior to such renewal or
extension; and
(s) Liens approved in writing by or on behalf of the Majority Lenders.
"PERSON" means an individual, a partnership, a corporation, a company, a trust,
an unincorporated organization, a union, a government or any department or
agency thereof (collectively an "entity") and the heirs, executors,
administrators, successors, or other legal representatives, as the case may be,
of such entity.
"PIONEER (CANADA)" means Pioneer Natural Resources (Canada) Ltd. and its
successors.
"PIONEER (RESOURCES)" means Pioneer International Resources Company and its
successors.
"PRIMARY FACILITY" means the credit facility evidenced by the Amended and
Restated Credit Facility Agreement dated as of December 18, 1997, among Pioneer
Natural Resources Company as Borrower, NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, the Co-Agents signatory thereto and the Lenders signatory
thereto, for U.S. $1,075,000,000 as amended, modified or restated from time to
time.
"PRINCIPAL REPAYMENT" means the repayment by or for and on behalf of the
Borrower to the Lenders of all or a portion of any Outstandings under the
Credit Facility.
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"PRO RATA SHARE" means, subject to Section 6.1, the proportion of any amount to
which a Lender is entitled, or for which a Lender is responsible, and the Pro
Rata Share of a Lender of any amount shall be determined as follows:
(a) the Pro Rata Share of a Lender of any Advance for which such Lender is
obligated to make under the Agreement and such Lender's share of
Obligations which such Lender is entitled to receive under the
Documents shall be calculated by multiplying the amount of such
Advance or payment, as the case may be, by the Commitment of such
Lender and dividing the result by the aggregate amount of the
Commitments of those Lenders which are likewise obligated or entitled;
and
(b) the Pro Rata Share of a Lender of any payment received or recovered
after the occurrence of an Event of Default shall be calculated by
multiplying the amount received or recovered by the Obligations owing
to such Lender and dividing the result by the Obligations owing to all
Lenders.
"PURCHASE MONEY LIEN" means a Lien, whether given to a vendor, lender or any
other Person, securing indebtedness assumed or incurred as, or to provide, all
or part of the purchase price or other acquisition cost of property, which Lien
is limited exclusively to such property and the proceeds thereof.
"QUARTER" means a 3 Month period commencing on the first day of each and every
January, April, July and October.
"RATING AGENCIES" means S & P and Moody's or any other recognized rating agency
acceptable to the Borrower and the Majority Lenders.
"RELEASE" includes releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, disposing or dumping.
"RELEASE OF RESTRICTED SUBSIDIARY" means a release by the Agent and the Lenders
of a Restricted Subsidiary substantially in the form of Schedule K to the
Agreement.
"RESTRICTED PAYMENTS" means any investment, contribution, distribution, loan or
advance of cash to a Person (other than an Obligor, subject to Section
14.2(k)), other than:
(a) prudent short-term investments;
(b) investments, contributions, distributions, loans or advances
disclosed in the Updated Financial Statements or in the
Disclosure Schedule or in disclosures made subsequent to the
date hereof and consented to in writing by or on behalf of the
Majority Lenders; or
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(c) investments, contributions, loans or advances made by any
Obligor in the ordinary course of its business.
"RESTRICTED SUBSIDIARY" means each Subsidiary of the Borrower that, at the
particular time in question (a) owns directly or indirectly any material
assets or any interest in any other Restricted Subsidiary, and (b) either (i)
has not been designated as an Unrestricted Subsidiary or (ii) has been
redesignated as a Restricted Subsidiary. A Restricted Subsidiary shall remain
such (even if it no longer owns directly or indirectly any interest in any
material assets) until designated as an Unrestricted Subsidiary pursuant to
Section 14.2(i). An Unrestricted Subsidiary shall remain an Unrestricted
Subsidiary unless redesignated as a Restricted Subsidiary pursuant to the
provisions of Section 14.2(i).
"REVOLVER" means the Credit Facility during the Revolving Period.
"REVOLVING COMMITMENT" means, with respect to a Lender under the Revolver, the
commitment of such Lender as shown on the signature pages hereto opposite such
Lender's name, subject to such reductions or assumptions as are permitted or
required under the Agreement.
"REVOLVING PERIOD" means with respect to each lender having a Revolving
Commitment from time to time, initially, the period commencing on the Closing
Date and ending 364 days thereafter, and thereafter ending on the day
immediately preceding the Conversion Date if the Revolving Period is not
extended for a further 364 days as provided under the Agreement.
"S&P" means Standard & Poor's Ratings Service.
"SCHEDULED REDUCTION" has the meaning attributed to it in Section 3.8(b) of the
Agreement.
"SUBSIDIARY" means any corporation (now or hereafter in existence) of which
more than 50% of the outstanding Voting Shares are owned, directly or
indirectly by or for a Person, provided that the ownership of such shares
confers the right to elect at least a majority of the board of directors of
such corporation and includes any corporation in like relationship to a
Subsidiary, and for purposes of this Agreement, "SUBSIDIARY" shall also include
a partnership in circumstances where the Borrower, directly or indirectly, (i)
owns a majority of the equity of the partnership and (ii) through the exercise
of voting rights, controls the mind and management of the partnership.
"SUCCESSOR AGENT" has the meaning attributed to in Section 17.10 of the
Agreement.
"SUPPORT GUARANTEE" means a guarantee given by a Restricted Subsidiary, Pioneer
(Resources) and any Obligor not already an Obligor hereunder substantially in
the form of Schedule H.
"TAXES" means all taxes of any kind or nature whatsoever including, without
limitation, income taxes, capital taxes, minimum taxes, levies, imposts, stamp
taxes, royalties, duties, charges to tax, value added taxes, commodity taxes,
goods and services taxes, and all fees, deductions,
<PAGE> 93
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compulsory loans, withholdings and restrictions or conditions resulting in a
charge imposed, levied, collected, withheld or assessed as of the date hereof
or at any time in the future by any governmental or quasi-governmental
authority of or within any jurisdiction whatsoever having power to tax,
together with penalties, fines, additions to tax and interest thereon and any
instalments in respect thereof.
"TERM COMMITMENT" means, with respect to a Lender, the Outstandings then funded
by such Lender on the Conversion Date applicable to such Lender's Commitment,
subject to such reductions as are permitted or required hereunder.
"TERM LOAN" means the non-revolving portion of the Credit Facility pursuant to
which a Lender is required to provide to the Borrower a Term Commitment.
"TERM PERIOD" means the period commencing on the Conversion Date and expiring
on the Termination Date.
"TERMINATION DATE" means with respect to the Term Period applicable to a
Non-Accepting Lender, the day falling 5 Years and 1 day from the Conversion
Date.
"364 DAY FACILITY" means the credit facility evidenced by the Amended and
Restated Credit Facility Agreement dated as of December 18, 1997, among Pioneer
Natural Resources Company, as Borrower, NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, the Co-Agents party thereto, and the Lenders party thereto,
for U.S. $300,000,000 as such agreement may be amended, modified or restated
from time to time.
"TRANCHE" means either Tranche A or Tranche B and "TRANCHES" means Tranche A
and Tranche B.
"TRANCHE A" means Advances made by the Canadian Resident Lenders to the
Borrower.
"TRANCHE B" means Advances made by the Non-Resident Lenders to the Borrower.
"UNRESTRICTED SUBSIDIARY" means each Subsidiary of the Borrower that is not
designated as a Restricted Subsidiary in Schedule F hereto, or is designated by
the Borrower as an Unrestricted Subsidiary pursuant to Section 14.2(i).
"UPDATED FINANCIAL STATEMENTS" has the meaning attributed to it in Section
13.1(f) of the Agreement.
<PAGE> 94
-17-
"U.S. BASE RATE" or "USBR" means the greater of (i) the rate of interest most
recently announced by the Agent as its base rate for loans in U.S. Dollars made
in Canada; and (ii) the daily Federal Funds Rate for such day plus 50 Basis
Points.
"U.S. BASE RATE LOAN" means an Advance in U.S. Dollars which bears interest at
a rate based on the U.S. Base Rate.
"U.S. CREDIT FACILITY" means the Primary Facility and the 364 Day Facility,
collectively.
"U.S. DOLLARS" or "U.S.$" each means such currency of the United States of
America which, as at the time of payment or determination, is legal tender
therein for the payment of public or private debts.
"U.S. GAAP" means those generally accepted accounting principles and practices
which are recognized as such by the "Financial Accounting Standards Board" (or
any generally recognized successor) and which, in the case of the Parent,
Borrower and their Consolidated Subsidiaries, are applied for all periods after
the date hereof in a manner consistent with the manner in which such principles
and practices were applied to the Updated Financial Statements (except for
changes concurred with by the Parent's or Borrower's independent public
accountants). If any change in any accounting principle or practice is
required by the "Financial Accounting Standards Board" (or any such successor)
in order for such principle or practice to continue as a generally accepted
accounting principle or practice, all reports and financial statements required
hereunder with respect to the Parent or Borrower or with respect to the Parent,
Borrower and their Consolidated Subsidiaries must be prepared in accordance
with such change. In the event any changes in U.S. GAAP materially affect the
calculation of Consolidated Total Assets, the Borrower and the Lenders agree to
enter into good faith negotiations for an agreement to revise such calculation
to take into account such changes in U.S. GAAP; until Borrower and the Lenders
have entered into such an agreement, such financial calculation shall continue
to be made in accordance with U.S. GAAP as in effect immediately preceding the
date of such change.
"VOTING SHARES" means shares of capital stock of any class of any corporation
carrying voting rights under all circumstances, provided that, for the purposes
of this definition, shares which only carry the right to vote conditionally on
the happening of an event shall not be considered Voting Shares, whether or not
such event shall have occurred, nor shall any shares be deemed to cease to be
Voting Shares solely by reason of a right to vote accruing to shares of another
class or classes by reason of the happening of such event.
"WITHHOLDING TAX" means any amount on account of Taxes which the Borrower is
required to deduct or withhold under applicable Law in connection with the
payment of any Obligation.
"YEAR" means a period of 12 Months from any date.
<PAGE> 95
SCHEDULE B
CHAUVCO RESOURCES LTD.
CREDIT AGREEMENT
FORM OF CLOSING CERTIFICATE
TO: Canadian Imperial Bank of Commerce
10th Floor, Bankers Hall East
855 - 2nd Street S.W.
Calgary, Alberta
T2P 2P2
as Agent for and on behalf of the Lenders as defined in
the Credit Agreement (defined below).
AND TO: Blake, Cassels & Graydon
Barristers & Solicitors
#3500, East Tower, Bankers Hall
855 Second Street S.W.
Calgary, Alberta
T2P 4J8
RE: Credit Facility dated as of December 18, 1997 Between Chauvco
Resources Ltd., as Borrower, Canadian Imperial Bank of
Commerce ("CIBC"), as Agent and the Lenders (as defined
therein), all as amended or restated from time to time (the
"Credit Agreement")
================================================================================
This Certificate is given to the Lenders by [NAME OF
BORROWER/EACH GUARANTOR] (the "Obligor") pursuant to provisions of the Credit
Agreement dated the same date as this Certificate between the Obligor and CIBC.
This Certificate is also given by the Obligor to the legal
counsel for CIBC for the purpose of enabling such counsel to rely upon the
factual matters certified herein in giving their respective opinions relative
to the Credit Agreement.
Unless otherwise indicated, capitalized terms used in this
Certificate have the meanings set out in Schedule A to the Credit Agreement.
The Obligor hereby certifies as follows:
1. Annexed hereto as Exhibit A is a true and complete
copy of all corporate resolutions and similar type
actions taken by the Obligor and, as applicable, its
shareholders, to authorize the Credit Facility and
the execution and
<PAGE> 96
-2-
delivery of the Credit Agreement and the other
Documents and the observance and performance by the
Obligor of its obligations thereunder. The
resolutions have not been amended, and are now in
full force and effect.
2. Annexed hereto as Exhibit B is a true and complete
copy of the currently effective constating or charter
documents of the Obligor, together with any
amendments thereto or continuations thereof, these
constating or charter documents being in full force
and effect as of the date hereof.
3. Annexed hereto as Exhibit C is a true and complete
copy of the by-laws of the Obligor, these by-laws
being in full force and effect as of the date hereof.
4. The persons whose names appear below have been duly
appointed to the offices ascribed below to those
persons and the signature placed opposite each name
and office is the true signature of the person whose
name appears opposite.
<TABLE>
<CAPTION>
NAME OFFICE SIGNATURE
---- ------ ---------
<S> <C> <C>
[o] [o]
----------------
[o] [o]
----------------
</TABLE>
This Certificate is given this 18th day of December, 1997.
[o]
Per:
-------------------------
Name:
Title:
<PAGE> 97
EXHIBIT A
(RESOLUTIONS)
<PAGE> 98
EXHIBIT B
(CONSTATING/CHARTER DOCUMENTS)
<PAGE> 99
EXHIBIT C
(BY-LAWS)
<PAGE> 100
SCHEDULE C
CHAUVCO RESOURCES LTD.
CREDIT AGREEMENT
FORM OF NOTICE OF BORROWING
TO: CANADIAN IMPERIAL BANK OF COMMERCE as Agent for and on behalf of the
Lenders as defined in the Credit Agreement (defined below)
Re: Credit Facility dated as of December 18, 1997 Between Chauvco
Resources Ltd., as Borrower, Canadian Imperial Bank of Commerce
("CIBC"), as Agent and the Lenders (as defined therein), all as
amended or restated from time to time (the "Credit Agreement")
================================================================================
Unless otherwise indicated, capitalized terms in this Notice have the
meanings set out in Schedule A to the Credit Agreement.
1. THE DRAWDOWN DATE IS THE ______ DAY OF ______________________,
_______.
2. Pursuant to Section 5.2 of the Credit Agreement, the undersigned
hereby irrevocably requests that the following Accommodations be made
available:
CANADIAN DOLLARS
TYPE OF ACCOMMODATION PRINCIPAL AMOUNT TERM
Canadian Prime Rate Loan/ ________________ ________
Canadian Eurodollar Loan
Banker's Acceptance/
Canadian Eurodollar Loan ________________ ________
Canadian Resident Lender Purchase
________________ (check for yes)
U.S. DOLLARS
TYPE OF ACCOMMODATION PRINCIPAL AMOUNT TERM
U.S. Base Rate Loan/ __________________ N/A
---------
Alternate Base Rate Loan
LIBOR Based Loan __________________ _________
DATED this _________ day of ______________________, ___________, at
_______________ ___m., Toronto, Ontario time.
CHAUVCO RESOURCES LTD.
Per:
______________________________
Name:
Title:
<PAGE> 101
SCHEDULE D
CHAUVCO RESOURCES LTD.
CREDIT AGREEMENT
FORM OF NOTICE OF ROLLOVER/CONVERSION
TO: The Canadian Imperial Bank of Commerce as Agent for and on behalf of
the Lenders as defined in the Credit Agreement (defined below)
Re: Credit Facility dated as of December 18, 1997 Between Chauvco
Resources Ltd., as Borrower, Canadian Imperial Bank of Commerce
("CIBC"), as Agent and the Lenders (as defined therein), all as
amended or restated from time to time (the "Credit Agreement")
================================================================================
Unless otherwise indicated, capitalized terms in this Notice have the
meanings set out in Schedule A to the Credit Agreement.
1. Pursuant to Section 5.2 of the Credit Agreement, the Borrower hereby
irrevocably notifies the Agent that it shall be:
(a) rolling over the Accommodation described as:
Type of Accommodation:________________________________________
Principal Amount:_____________________________________________
Date of Maturity:_____________________________________________
into the same Accommodation
Date of Maturity:_____________________________________________
or; (b) converting the Accommodation described as:
Type of Accommodation:________________________________________
Principal Amount:_____________________________________________
Date of Maturity:_____________________________________________
into an Accommodation described as:
Type of Accommodation:________________________________________
(if Bankers Acceptance, specify if to be
purchased by Canadian Resident Lenders or marketed
independently)________________________________________________
Principal Amount:_____________________________________________
Date of Maturity:_____________________________________________
effective the ______ day of __________________________, _________.
DATED this ________ day of ______________________, __________ at
___________ ___.m. Toronto, Ontario time.
CHAUVCO RESOURCES LTD.
Per:___________________________________
Name:
Title:
<PAGE> 102
SCHEDULE E
CHAUVCO RESOURCES LTD.
CREDIT AGREEMENT
FORM OF FINANCIAL CERTIFICATE
TO: The Canadian Imperial Bank of Commerce as Agent for and on behalf of
the Lenders as defined in the Credit Agreement (defined below)
Re: Credit Facility dated as of December 18, 1997 Between Chauvco
Resources Ltd., as Borrower, Canadian Imperial Bank of Commerce
("CIBC"), as Agent and the Lenders (as defined therein), all as
amended or restated from time to time (the "Credit Agreement")
================================================================================
Unless otherwise indicated, capitalized terms used in this Certificate
have the meanings set out in Schedule A to the Credit Agreement.
This Certificate is furnished pursuant to Section 14.1(b) of the
Credit Agreement. The Borrower hereby represents, warrants, and acknowledges
to the Agent and each Lender that:
(a) the Executive Officer of the Borrower signing this instrument
is a duly elected, qualified and acting officer of the
Borrower;
(b) the value of Consolidated Total Assets as of [INSERT DATE OF
LATEST FINANCIALS TO BE DELIVERED BY PARENT] (the "Reporting
Date") is $[o], of which approximately [o]% represents the
Consolidated Total Assets of the Borrower and Restricted
Subsidiaries; and
(c) on the Reporting Date, the Borrower was, and on the date
hereof the Borrower is in full compliance with the disclosure
requirements of Section 14.1(d) of the Credit Agreement, and
no Default otherwise existed on the Reporting Date or
otherwise exists on the date of this Certificate [except for
Default(s) under Section(s) ________________ of the Credit
Agreement, which [is/are] more fully described on an exhibit
attached hereto].
The Executive Officer of the Borrower signing this instrument hereby
certifies without personal liability that he has reviewed the Documents and has
otherwise undertaken such inquiry as is in his opinion necessary to enable him
to express an informed opinion with respect to the above representations,
warranties and acknowledgments of the Borrower and, to the best of his
knowledge, such representations, warranties, and acknowledgments are true,
correct and complete.
CHAUVCO RESOURCES LTD.
By:_____________________________________
Name:
Title:
Date:___________________________________
<PAGE> 103
SCHEDULE F
CHAUVCO RESOURCES LTD.
CREDIT AGREEMENT
LIST OF RESTRICTED SUBSIDIARIES
Schedule F has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
<PAGE> 104
SCHEDULE G
CHAUVCO RESOURCES LTD.
CREDIT AGREEMENT
FORM OF REQUEST FOR AN OFFER OF EXTENSION
TO: Canadian Imperial Bank of Commerce as Agent for and on behalf of the
Lenders as defined in the Credit Agreement (defined below)
Re: Credit Facility dated as of December 18, 1997 Between Chauvco
Resources Ltd., as Borrower, Canadian Imperial Bank of Commerce
("CIBC"), as Agent and the Lenders (as defined therein), all as
amended or restated from time to time (the "Credit Agreement")
================================================================================
Unless otherwise indicated capitalized terms in this Notice have the
meanings set out in Schedule A to the Credit Agreement.
1. Pursuant to Section 3.2 of the Credit Agreement, the Borrower hereby
requests the Lenders under the Revolver to extend the Revolving Period for a
further 364 days.
Dated at _______________________, ______________________ this _______
day of __________________, ____________.
CHAUVCO RESOURCES LTD.
Per:____________________________________
Name:
Title:
<PAGE> 105
SCHEDULE I
CHAUVCO RESOURCES LTD.
CREDIT AGREEMENT
FORM OF POWER OF ATTORNEY FOR THE ISSUANCE
OF BANKERS' ACCEPTANCES
TO The Canadian Imperial Bank of Commerce as Agent for and on behalf of
the Lenders as defined in the Credit Agreement (defined below)
Re: Credit Facility dated as of December 18, 1997 Between Chauvco
Resources Ltd., as Borrower, Canadian Imperial Bank of Commerce
("CIBC"), as Agent and the Lenders (as defined therein), all as
amended or restated from time to time (the "Credit Agreement")
================================================================================
WHEREAS CHAUVCO RESOURCES LTD. (the "Corporation") wishes to
facilitate the acceptance of Bankers' Acceptances pursuant to the terms of the
Credit Facility dated as of December 18, 1997 Between Chauvco Resources Ltd.,
as Borrower, Canadian Imperial Bank of Commerce ("CIBC"), as Agent and the
Lenders (as defined therein), all as amended or restated from time to time (the
"Credit Agreement") .
Unless otherwise indicated capitalized terms in this Notice have the
meanings set out in Schedule A to the Credit Agreement.
NOW THEREFORE the Corporation, hereby makes, constitutes and appoints
[INSERT NAME OF CANADIAN RESIDENT LENDER] (the "Bank"), acting by any
authorized signatory of the Bank, attorney (the "Attorney") of the Corporation
to complete, execute, endorse, discount and deliver on behalf of the
Corporation bankers' acceptances ("Drafts") to be issued in the name of the
Corporation.
Provided that these presents or the powers given hereby shall in no
way extend, revoke or make void, or be deemed or construed to extend, revoke or
make void, any former or other power of attorney made by the Corporation at any
time prior hereto or given to any other person or persons whomsoever for any
other purpose and that such other powers of attorney shall remain and be of the
same authority, validity, force and effect as if these presents had not been
made, with the exception of any previous powers of attorney in form similar to
this Power of Attorney granted to the Bank for the execution of Drafts, all of
which previous powers are hereby revoked.
In connection with the issuance of Drafts signed by the Attorney on
behalf of the Corporation and in consideration of the Bank's continuing to
carry on the banking business, and to accept Drafts, of the Corporation, the
Corporation agrees with the Bank as follows:
<PAGE> 106
-2-
1. Following delivery by the Corporation of a Notice of Borrowing or
Notice of Rollover/Notice of Conversion requiring an Advance by way of Bankers'
Acceptances pursuant to the provisions of the Credit Agreement, the Agent under
the Credit Agreement may give to the Attorney, on behalf of the Corporation,
written instructions, relating to the completion, endorsement, execution,
discount and/or delivery by the Attorney on behalf of the Corporation of Drafts
which the Corporation wishes to submit to the Bank for acceptance by the Bank
and shall specify the following information:
(a) reference to this Power of Attorney;
(b) a Canadian dollar amount, which shall be the aggregate face
amount of the Drafts to be drawn in a particular transaction;
(c) the requested dates of issuance and maturity of the Drafts;
(d) discount or payment instructions specifying either;
(i) (in the case of Drafts to be discounted by the Bank),
particulars of the date on and the rate of discount
at which to Drafts are to be discounted, the account
number of the Corporation and the financial
institution at which the proceeds of discount are to
be credited; or
(ii) (in the case of Drafts to be discounted to a person
other than the Bank), particulars of the person to
whom the Drafts are to be delivered, the amount of
payment to be received therefrom and the account
number of the Corporation and the financial
institution at which such payment is to be credited.
2. The Bank may act upon receipt of the written instructions as aforesaid
purporting to be from the Agent.
3. Upon receipt of the written instructions from the Agent as aforesaid,
the Attorney is authorized:
(a) to sign for and on behalf and in the name of the Corporation,
as drawer, Drafts drawn on the Bank payable to the order of
the Corporation or payable to the order of the Bank;
(b) to fill in the amount, date and maturity date of such Drafts;
and
(c) to discount and/or deliver such Drafts which have been
accepted by the Bank.
4. The Corporation hereby agrees to indemnify the Bank, its officers and
agents, including without limitation the Attorney, to hold it and them harmless
from and against any loss, liability, expenses, or claim of any kind or nature
whatsoever incurred by it or them as a result of any action or inaction in any
way relating to or arising out of this Power of Attorney, or the acts
<PAGE> 107
-3-
contemplated hereby, with the exception of gross negligence or wilful
misconduct on the part of the Bank or any of its agents or employees.
The Attorney may act as attorney of the Corporation until a subsequent
power of attorney relating to the issuance of Drafts completed, executed,
endorsed, signed and/or delivered by an Attorney on behalf of the Corporation
is issued. This Power of Attorney may be revoked by the Corporation at any
time upon not less than five Banking Days, written notice served upon the Bank
at the main branch of the Bank in [o]. The revocation of this power of
attorney for any such reason shall not reduce, limit or otherwise affect the
obligations of the Corporation in respect of any Draft completed, executed,
endorsed, discounted and/or delivered in accordance herewith prior to the date
of such revocation. This Power of Attorney may be terminated by the Bank at
any time upon not less than 2 Banking Days written notice to the Corporation.
5. Any revocation or termination of this Power of Attorney shall not
affect the rights of the Bank and any obligations of the Corporation with
respect to the indemnities of the Corporation as stated herein with respect to
all matters arising prior in time to any such revocation or termination.
6. The provisions of this Power of Attorney are in addition to and not
substitution for any other agreement(s) between the Corporation and the Bank
relating to the issuance, acceptance and payment of Drafts.
7. In the event of a conflict between the provisions of this Power of
Attorney and the Credit Agreement, the Credit Agreement shall prevail.
8. Notices required to be delivered hereunder shall be delivered in
accordance with the provisions of Section 21.1 of the Credit Agreement.
9. This Power of Attorney shall be governed by and construed in
accordance with the laws of the Province of Alberta, and the laws of Canada as
applicable therein and each of the Corporation and the Bank hereby irrevocably
attorns to the non-exclusive jurisdiction of the courts of the Province of
Alberta for all matters arising out of or relating to this Power of Attorney.
DATED the _____________ day of __________________, ______.
CHAUVCO RESOURCES LTD.
By:
_____________________________________
Name:
Title:
<PAGE> 108
SCHEDULE J
CHAUVCO RESOURCES LTD.
CREDIT AGREEMENT
NOTICE OF SUBSIDIARY CONVERSION
TO The Canadian Imperial Bank of Commerce as Agent for and on behalf of
the Lenders as defined in the Credit Agreement (defined below)
Re: Credit Facility dated as of December 18, 1997 Between Chauvco
Resources Ltd., as Borrower, Canadian Imperial Bank of Commerce
("CIBC"), as Agent and the Lenders (as defined therein), all as
amended or restated from time to time (the "Credit Agreement")
================================================================================
Unless otherwise indicated capitalized terms in this Notice have the
meanings set out in Schedule A to the Credit Agreement.
The Borrower hereby elects, pursuant and subject to Section 14.2(i) of
the Credit Agreement, to convert, effective as of ________________, ________,
[NAME OF SUBSIDIARY], a [JURISDICTION] [CORPORATION], ("Subject Subsidiary"),
from a[n] [Restricted/Unrestricted] Subsidiary to a[n]
[Unrestricted/Restricted] Subsidiary. The Borrower hereby certifies that all
requirements for the conversion of the Subject Subsidiary to a[n]
[Unrestricted/Restricted] Subsidiary, as specified in the Credit Agreement,
have been and will be met, both as of the date hereof and after giving effect
to such conversion. After giving effect to such conversion, no Default will
exist. The Borrower hereby agrees that the election to convert contained
herein shall not be effective if the foregoing certifications are not true and
correct in all respects as of the date hereof or are not true and correct in
all respects as of the date of such conversion. This election to convert shall
not affect any obligation of the Borrower under the Credit Agreement.
This instrument shall be construed in accordance with and governed by
the laws of the Province of Alberta.
CHAUVCO RESOURCES LTD.
By:_____________________________________
Name:
Title:
Receipt of the above Election to Convert is hereby acknowledged on
______________, ________.
CANADIAN IMPERIAL BANK OF COMMERCE,
as Agent
By:_____________________________________
Name:
Title:
<PAGE> 109
SCHEDULE K
CHAUVCO RESOURCES LTD.
CREDIT AGREEMENT
FORM OF RELEASE OF RESTRICTED SUBSIDIARY
TO [NAME OF SUBSIDIARY]
Re: Credit Facility dated as of December 18, 1997 Between Chauvco
Resources Ltd., as Borrower, Canadian Imperial Bank of Commerce
("CIBC"), as Agent and the Lenders (as defined therein), all as
amended or restated from time to time (the "Credit Agreement")
================================================================================
Unless otherwise indicated capitalized terms in this Notice have the
meanings set out in Schedule A to the Credit Agreement.
Pursuant to the notice to convert in the form of Schedule J to the
Credit Agreement delivered to the Agent on _ ___________________, _______, the
Borrower has notified the Lenders that it has converted [NAME OF SUBSIDIARY]
from a Restricted Subsidiary to an Unrestricted Subsidiary. Subject to the
accuracy of the information contained in such notice of conversion, the
undersigned Agent and Lenders hereby release [NAME OF FORMER RESTRICTED
SUBSIDIARY] from its obligations as Guarantor under its Guarantee dated as of
________, _______, as from time to time amended, modified and supplemented,
other than obligations if any, pursuant to Section _____ thereof.
This Release may be separately executed in any number of counterparts
and by different parties hereto on separate counterparts, each of which when so
executed shall be deemed to constitute one and the same release.
[Add signature lines for Lenders and Agent]
Agreed and Accepted
this ___ day of __________, _______ :
____________________________________
[Name of Restricted Subsidiary]
By: ________________________________
Name:
Title:
<PAGE> 110
SCHEDULE L
CHAUVCO RESOURCES LTD.
CREDIT AGREEMENT
DISCLOSURE SCHEDULE
Re: Credit Facility dated as of December 18, 1997 Between Chauvco
Resources Ltd., as Borrower, Canadian Imperial Bank of Commerce
("CIBC"), as Agent and the Lenders (as defined therein), all as
amended or restated from time to time (the "Credit Agreement")
================================================================================
Schedule L has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
<PAGE> 1
EXHIBIT 10.6
================================================================================
PIONEER NATURAL RESOURCES USA, INC.,
PIONEER NATURAL RESOURCES COMPANY,
AND
THE SUBSIDIARY GUARANTORS
being released hereby
$325,000,000
10 5/8% SENIOR SUBORDINATED NOTES
DUE JULY 1, 2006
THIRD SUPPLEMENTAL INDENTURE
DATED AS OF DECEMBER 18, 1997
HARRIS TRUST AND SAVINGS BANK
TRUSTEE
================================================================================
<PAGE> 2
THIRD SUPPLEMENTAL INDENTURE
THIS THIRD SUPPLEMENTAL INDENTURE, dated as of December 18,
1997, among PIONEER NATURAL RESOURCES USA, INC. (formerly Mesa Operating Co.),
a Delaware corporation (the "Issuer"), PIONEER NATURAL RESOURCES COMPANY
(successor to MESA Inc.), a Delaware corporation (the "Guarantor"), PIONEER
NATURAL RESOURCES (GPC), INC. (formerly Greenhill Petroleum Corporation), a
Delaware corporation ("GPC"), WESTPAN NGL CO., a Delaware corporation
("Westpan"), PARKER & PARSLEY ENERGY TRADING COMPANY, a Delaware corporation
("Energy"), PARKER & PARSLEY GAS PROCESSING CO., a Delaware corporation
("Processing" and together with GPC, Westpan, and Energy, the "Subsidiary
Guarantors"), and HARRIS TRUST AND SAVINGS BANK, a corporation organized and
existing under the laws of the State of Illinois, as trustee (the "Trustee").
Intending to be legally bound hereby, each of the parties
agrees as follows for the benefit of the other parties and for the equal and
ratable benefit of Holders of the Issuer's 10 5/8% Senior Subordinated Notes
due July 1, 2006 (the "Securities"):
WHEREAS, the Issuer, the Guarantor, the Subsidiary Guarantors
and the Trustee are parties to that certain Indenture, dated as of July 2,
1996, as amended by the First Supplemental Indenture, dated as of April 15,
1997, and as further amended by the Second Supplemental Indenture, dated as of
August 7, 1997 (the "Indenture"), pursuant to which the Securities were issued;
and
WHEREAS, Section 9.2 of the Indenture provides that the
Issuer, the Guarantor, the Subsidiary Guarantors and the Trustee may amend the
Indenture with the consent of the Holders of at least a majority (and with
respect to certain amendments, at least 66 2/3%) in aggregate principal amount
of the Securities then outstanding; and
WHEREAS, the Holders of at least 66 2/3% in aggregate
principal amount of the Securities outstanding have consented to the amendments
effected by this Third Supplemental Indenture; and
WHEREAS, all things necessary to make this Third Supplemental
Indenture a valid agreement, in accordance with its terms, have been done; and
WHEREAS, capitalized terms used herein and not otherwise
defined are used as defined in the Indenture.
NOW, THEREFORE, in consideration of these premises and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Issuer, the Guarantor, the Subsidiary Guarantors and
the Trustee hereby amend and supplement the Indenture as follows:
2
<PAGE> 3
ARTICLE I
AMENDMENTS TO THE INDENTURE
1.1. Sections 3.9, 4.3, 4.4(b), 4.7, 4.8, 4.9, 4.10, 4.11,
4.12, 4.13, 4.14, 4.16, 4.17, 6.1(4), 6.1(7), 6.1(8), 6.1(9), 8.4(c), 10.3(c),
11.4 and 11.5 of the Indenture are hereby amended by deleting all such sections
and all references thereto in their entirety.
1.2 Sections 6.1, 6.2 and 6.6(b) of the Indenture are
hereby amended by changing all current references therein of "25%" to "50%",
and by changing all current references therein of "30" to "60."
1.3. The Indenture is hereby amended to replace the word
"Guarantees" with the word "Guarantee" in each instance, to replace the word
"Guarantors" with the word "Guarantor" in each instance, and to delete the
words "Subsidiary Guarantor" and "Subsidiary Guarantors" in each instance
(other than in Section 2.9 of the Indenture), and to make all changes in the
location of related conjunctions, agreement of verbs, and agreement of pronouns
as are reasonably necessary to give effect to this amendment and to retain
proper sentence structure and usage.
1.4 Section 2.9 of the Indenture is hereby amended to
replace the words "Subsidiary Guarantor" with the word "Subsidiary."
1.5 Section 4.15 of the Indenture is hereby amended to
read in its entirety as follows:
Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and
effect (i) its corporate existence and (ii) the rights (charter and
statutory), licenses and franchises of the Company, provided, however,
that the Company shall not be required to preserve any such right,
license or franchise if the Board of Directors of the Company shall
determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries, taken as
a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.
1.6 Section 5.1 of the Indenture is hereby amended to
read in its entirety as follows:
The Company shall not consolidate or merge with or into
(whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease or otherwise dispose of all or substantially
all of its properties or assets, in one or more related transactions,
to another Person, unless (i) the Company is the surviving corporation
of any such consolidation or merger or (a) the Person formed by or
surviving such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made (the "Surviving Entity") is a
corporation organized or existing under the laws of the United States,
any state thereof or the
3
<PAGE> 4
District of Columbia and (b) such Surviving Entity assumes all the
obligations of the Company under the Notes and the Indenture pursuant
to a supplemented indenture in a form reasonably satisfactory to the
Trustee; and (ii) immediately before and after giving effect to such
transaction no Default or Event of Default exists. Notwithstanding
the foregoing clauses, (a) any Subsidiary may consolidate with, merge
into or transfer all or part of its properties and assets to the
Company or the Parent, and (b) the Company may merge with the Parent
or any Subsidiary of the Parent or the Company.
1.7 Section 8.3 of the Indenture is hereby amended to
delete the following parenthetical in its entirety: "(but only with respect to
the Company's failure to observe or perform the covenants, conditions and
agreements of the Company under clause (iv) of Section 5.1)."
1.8 The form of Note and the form of Guarantee, and the
outstanding Notes and Guarantees, are hereby amended to make any and all
changes that correspond to the amendments to the Indenture set forth in
Sections 1.1 through 1.7 of this Third Supplemental Indenture.
1.9 The Subsidiary Guarantors are hereby released from
any and all obligations they have or may have with respect to any Guarantee
contemplated by the Indenture as the Indenture existed before giving effect to
the amendments herein.
ARTICLE II
MISCELLANEOUS
2.1 Except to the extent amended by or inconsistent with
this Third Supplemental Indenture, the Issuer, the Guarantor, and the Trustee
hereby ratify and reconfirm the Indenture in its entirety.
2.2 This Third Supplemental Indenture may be executed in
any number of counterparts, each of which so executed shall be an original, but
all such counterparts shall together constitute but one and the same
instrument.
2.3 THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE
CONSTRUCTION AND INTERPRETATION OF THIS THIRD SUPPLEMENTAL INDENTURE, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
2.4 The Trustee accepts the amendments to the Indenture
effected by this Third Supplemental Indenture and agrees to execute the trusts
created by the Indenture as hereby amended, but only upon the terms and
conditions set forth in the Indenture.
2.5 The recitals contained herein shall be taken as the
statements of the Issuer, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Third Supplemental Indenture.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this
Third Supplemental Indenture as of the date first above written.
<TABLE>
<S> <C>
PIONEER NATURAL RESOURCES USA, INC.
Attest:
/s/ Sharon Petty By: /s/ Scott D. Sheffield
- ------------------------------------------- -------------------------------------------------------------------
President
PIONEER NATURAL RESOURCES COMPANY
Attest:
/s/ Sharon Petty By: /s/ Scott D. Sheffield
- ------------------------------------------- -------------------------------------------------------------------
President and Chief Executive Officer
PIONEER NATURAL RESOURCES (GPC), INC.
Attest:
/s/ Sharon Petty By: /s/ M. Garrett Smith
- ------------------------------------------- -------------------------------------------------------------------
Executive Vice President
WESTPAN NGL CO.
Attest:
/s/ Sharon Petty By: /s/ M. Garrett Smith
- ------------------------------------------- -------------------------------------------------------------------
Executive Vice President
PARKER & PARSLEY ENERGY
TRADING COMPANY
Attest:
/s/ Sharon Petty By: /s/ Scott D. Sheffield
- ------------------------------------------- -------------------------------------------------------------------
President
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C>
PARKER & PARSLEY GAS PROCESSING CO.
Attest:
/s/ Julee Taylor By: /s/ Timothy L. Dove
- ------------------------------------------- -------------------------------------------------------------------
Vice President
HARRIS TRUST AND SAVINGS BANK,
as Trustee
Attest:
/s/ C. Potter By: /s/ Judith Bartolini
- ------------------------------------------- -------------------------------------------------------------------
</TABLE>
6
<PAGE> 1
EXHIBIT 10.7
FOURTH SUPPLEMENTAL INDENTURE
THIS FOURTH SUPPLEMENTAL INDENTURE, dated as of December 30, 1997,
among PIONEER NATURAL RESOURCES USA, INC. (formerly known as Mesa Operating
Co.), a Delaware corporation (the "Company"), PIONEER NATURAL RESOURCES COMPANY
(as successor to MESA Inc.), a Delaware corporation ("Pioneer"), PIONEER
NEWSUB1, INC., a Texas corporation and wholly-owned subsidiary of the Company
("NewSub1"), and HARRIS TRUST AND SAVINGS BANK, an Illinois corporation, as
trustee (the "Trustee"). Capitalized terms used herein and not otherwise defined
have the meanings set forth in the Indenture referred to below.
RECITALS
A. The Company, Pioneer and the Trustee are parties to that certain
Indenture, dated as of July 2, 1996, as amended by the First Supplemental
Indenture, dated as of April 15, 1997, as further amended by the Second
Supplemental Indenture, dated as of August 7, 1997, as further amended by the
Third Supplemental Indenture, dated as of December 18, 1997 (the "Indenture"),
pursuant to which the 105/8% Senior Subordinated Notes due July 1, 2006 (the
"Notes") were issued.
B. In connection with a merger (the "Restructuring") as of the date
hereof by and between the Company and NewSub1, NewSub1 will assume and be
responsible and liable for all obligations of the Company with respect to the
Notes and the Indenture (collectively, the "Restructured Debt"), to the same
extent as if the Restructured Debt had been incurred or contracted by NewSub1.
C. In connection with the Restructuring, the Company, Pioneer and
NewSub1 have duly determined to make, execute and deliver to the Trustee this
Fourth Supplemental Indenture in order to reflect the results of the
Restructuring as required by the Indenture.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, the parties hereto agree, subject to the terms and conditions
hereinafter set forth, as follows for the benefit of the Trustee and the Holders
of the Notes:
1. The Restructuring is permitted by Section 5.1 of the Indenture and
in connection therewith:
(a) NewSub1 hereby expressly assumes all obligations of the
Company under the Notes and the Indenture;
(b) The Company, Pioneer and NewSub1 hereby represent that
immediately before and after giving effect to the Restructuring, no
Default or Event of Default exists;
(c) The Company, Pioneer and NewSub1 hereby represent that
immediately after giving effect to the Restructuring on a pro forma
basis (and treating any Indebtedness not previously an obligation of
the Company which becomes the obligation of the Company as
<PAGE> 2
a result of the Restructuring as having been incurred at the time of
such transaction), the Consolidated Net Worth of NewSub1, as the
Surviving Entity, is equal to or greater than the Consolidated Net
Worth of the Company immediately prior to the Restructuring; and
(d) The Company, Pioneer and NewSub1 hereby represent that
NewSub1 will, at the time of the Restructuring and after giving pro
forma effect thereto as if such transaction had occurred as of January
1, 1997, be permitted to incur at least $1.00 of additional
Indebtedness as set forth in the first paragraph of Section 4.9 of the
Indenture.
2. As of the effective date of this Fourth Supplemental Indenture,
NewSub1, as the Surviving Entity, shall succeed to, and be substituted for, and
may exercise every right and power of the Company under the Indenture with the
same effect as if NewSub1 had been named as the Company in the Indenture.
3. This Fourth Supplemental Indenture is executed and shall be
construed as an indenture supplemental to the Indenture and, as provided in the
Indenture, this Fourth Supplemental Indenture forms a part of the Indenture.
Except to the extent amended by or supplemented by this Fourth Supplemental
Indenture, the Company, Pioneer, NewSub1 and the Trustee hereby ratify, confirm
and reaffirm the Indenture in all respects.
4. This Fourth Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
5. The laws of the State of New York shall govern the construction and
interpretation of this Fourth Supplemental Indenture, without regard to
principles of conflicts of laws.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Supplemental Indenture to be signed on their behalf by their duly authorized
representatives as of the date first above written:
PIONEER NATURAL RESOURCES USA,
Attest: INC.
/s/ W.T. Howard By: /s/ M. Garrett Smith
- -------------------------------- ----------------------------------------
Name: W.T. Howard M. Garrett Smith
Assistant Secretary Senior Vice President - Finance
PIONEER NATURAL RESOURCES
Attest: COMPANY
/s/ Scott D. Sheffield By: /s/ M. Garrett Smith
- -------------------------------- ----------------------------------------
Name: Scott D. Sheffield M. Garrett Smith
Assistant Secretary Executive Vice President and Chief
Financial Officer
PIONEER NEWSUB1, INC.
Attest:
/s/ Scott D. Sheffield By: /s/ M. Garrett Smith
- -------------------------------- ----------------------------------------
Name: Scott D. Sheffield M. Garrett Smith
Assistant Secretary President
HARRIS TRUST AND SAVINGS BANK,
Attest: as Trustee
/s/ D.G. Donovan By: /s/ J. Bartolini
- -------------------------------- ----------------------------------------
D.G. Donovan J. Bartolini
Assistant Secretary Vice President
[Signature Page - Fourth Supplemental Indenture - Page 1 of 1]
<PAGE> 1
EXHIBIT 10.8
FIFTH SUPPLEMENTAL INDENTURE
THIS FIFTH SUPPLEMENTAL INDENTURE, dated as of December 30, 1997, among
PIONEER NEWSUB1, INC. (as successor to Pioneer Natural Resources USA, Inc.,
formerly known as Mesa Operating Co.), a Texas corporation (the "Company"),
PIONEER NATURAL RESOURCES COMPANY (as successor to MESA Inc.), a Delaware
corporation ("Pioneer"), PIONEER DEBTCO, INC., a Texas corporation and
wholly-owned subsidiary of Pioneer ("DebtCo"), and HARRIS TRUST AND SAVINGS
BANK, an Illinois corporation, as trustee (the "Trustee"). Capitalized terms
used herein and not otherwise defined have the meanings set forth in the
Indenture referred to below.
RECITALS
A. The Company, Pioneer and the Trustee are parties to that certain
Indenture, dated as of July 2, 1996, as amended by the First Supplemental
Indenture, dated as of April 15, 1997, as further amended by the Second
Supplemental Indenture, dated as of August 7, 1997, as further amended by the
Third Supplemental Indenture, dated as of December 18, 1997, as further amended
by the Fourth Supplemental Indenture, dated as of December 30, 1997 (the
"Indenture"), pursuant to which the 10 5/8% Senior Subordinated Notes due
July 1, 2006 (the "Notes") were issued.
B. In connection with a merger (the "Restructuring") as of the date
hereof by and between the Company and DebtCo, DebtCo will assume and be
responsible and liable for all obligations of the Company with respect to the
Notes and the Indenture (collectively, the "Restructured Debt"), to the same
extent as if the Restructured Debt had been incurred or contracted by DebtCo.
C. In connection with the Restructuring, the Company, Pioneer and
DebtCo have duly determined to make, execute and deliver to the Trustee this
Fifth Supplemental Indenture in order to reflect the results of the
Restructuring as required by the Indenture.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, the parties hereto agree, subject to the terms and conditions
hereinafter set forth, as follows for the benefit of the Trustee and the Holders
of the Notes:
1. The Restructuring is permitted by Section 5.1 of the Indenture and
in connection therewith:
(a) DebtCo hereby expressly assumes all obligations of the
Company under the Notes and the Indenture;
(b) The Company, Pioneer and DebtCo hereby represent that
immediately before and after giving effect to the Restructuring, no
Default or Event of Default exists;
<PAGE> 2
(c) The Company, Pioneer and DebtCo hereby represent that
immediately after giving effect to the Restructuring on a pro forma
basis (and treating any Indebtedness not previously an obligation of
the Company which becomes the obligation of the Company as a result of
the Restructuring as having been incurred at the time of such
transaction), the Consolidated Net Worth of DebtCo, as the Surviving
Entity with respect to the Restructured Debt, is equal to or greater
than the Consolidated Net Worth of the Company immediately prior to the
Restructuring; and
(d) The Company, Pioneer and DebtCo hereby represent that
DebtCo will, at the time of the Restructuring and after giving pro
forma effect thereto as if such transaction had occurred as of January
1, 1997, be permitted to incur at least $1.00 of additional
Indebtedness as set forth in the first paragraph of Section 4.9 of the
Indenture.
2. As of the effective date of this Fifth Supplemental Indenture,
DebtCo, as the Surviving Entity with respect to the Restructured Debt, shall
succeed to, and be substituted for, and may exercise every right and power of
the Company under the Indenture with the same effect as if DebtCo had been named
as the Company in the Indenture.
3. This Fifth Supplemental Indenture is executed and shall be construed
as an indenture supplemental to the Indenture and, as provided in the Indenture,
this Fifth Supplemental Indenture forms a part of the Indenture. Except to the
extent amended by or supplemented by this Fifth Supplemental Indenture, the
Company, Pioneer, DebtCo and the Trustee hereby ratify, confirm and reaffirm the
Indenture in all respects.
4. This Fifth Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
5. The laws of the State of New York shall govern the construction and
interpretation of this Fifth Supplemental Indenture, without regard to
principles of conflicts of laws.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Fifth
Supplemental Indenture to be signed on their behalf by their duly authorized
representatives as of the date first above written:
PIONEER NEWSUB1, INC.
Attest:
/s/ Mark L. Withrow By: /s/ M. Garrett Smith
- -------------------------------- ----------------------------------------
Name: Mark L. Withrow M. Garrett Smith
Secretary President
PIONEER NATURAL RESOURCES
Attest: COMPANY
/s/ Mark L. Withrow By: /s/ M. Garrett Smith
- -------------------------------- ----------------------------------------
Name: Mark L. Withrow M. Garrett Smith
Secretary Executive Vice President and Chief
Financial Officer
PIONEER DEBTCO, INC.
Attest:
/s/ Mark L. Withrow By: /s/ M. Garrett Smith
- -------------------------------- ----------------------------------------
Name: Mark L. Withrow M. Garrett Smith
Secretary President
HARRIS TRUST AND SAVINGS BANK,
Attest: as Trustee
/s/ C. Potter By: /s/ J. Bartolini
- ------------------------------- ----------------------------------------
C. Potter J. Bartolini
Assistant Secretary Vice President
[Signature Page - Fifth Supplemental Indenture - Page 1 of 1]
<PAGE> 1
EXHIBIT 10.9
SIXTH SUPPLEMENTAL INDENTURE
THIS SIXTH SUPPLEMENTAL INDENTURE, dated as of December 30, 1997, among
PIONEER DEBTCO, INC. (as successor to Pioneer NewSub1, Inc., as successor to
Pioneer Natural Resources USA, Inc., formerly known as Mesa Operating Co.), a
Texas corporation (the "Company"), PIONEER NATURAL RESOURCES COMPANY (as
successor to MESA Inc.), a Delaware corporation and the sole stockholder of the
Company ("Pioneer"), and HARRIS TRUST AND SAVINGS BANK, an Illinois corporation,
as trustee (the "Trustee"). Capitalized terms used herein and not otherwise
defined have the meanings set forth in the Indenture referred to below.
RECITALS
A. The Company, Pioneer and the Trustee are parties to that certain
Indenture, dated as of July 2, 1996, as amended by the First Supplemental
Indenture, dated as of April 15, 1997, as further amended by the Second
Supplemental Indenture, dated as of August 7, 1997, as further amended by the
Third Supplemental Indenture, dated as of December 18, 1997, as further amended
by the Fourth Supplemental Indenture, dated as of December 30, 1997, as further
amended by the Fifth Supplemental Indenture, dated as of December 30, 1997 (the
"Indenture"), pursuant to which the 105/8% Senior Subordinated Notes due July 1,
2006 (the "Notes") were issued.
B. In connection with a merger (the "Restructuring") as of the date
hereof by and between Pioneer and the Company, Pioneer will assume and be
responsible and liable for all obligations of the Company with respect to the
Notes and the Indenture (collectively, the "Restructured Debt"), to the same
extent as if the Restructured Debt had been incurred or contracted by Pioneer.
C. In connection with the Restructuring, the Company and Pioneer have
duly determined to make, execute and deliver to the Trustee this Sixth
Supplemental Indenture in order to reflect the results of the Restructuring as
required by the Indenture.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, the parties hereto agree, subject to the terms and conditions
hereinafter set forth, as follows for the benefit of the Trustee and the Holders
of the Notes:
1. The Restructuring is permitted by Section 5.1 of the Indenture and
in connection therewith:
(a) Pioneer hereby expressly assumes all obligations of the
Company under the Notes and the Indenture;
(b) The Company and Pioneer hereby represent that immediately
before and after giving effect to the Restructuring, no Default or
Event of Default exists;
<PAGE> 2
(c) The Company and Pioneer hereby represent that immediately
after giving effect to the Restructuring on a pro forma basis (and
treating any Indebtedness not previously an obligation of the Company
which becomes the obligation of the Company as a result of the
Restructuring as having been incurred at the time of such transaction),
the Consolidated Net Worth of Pioneer, as the Surviving Entity with
respect to the Restructured Debt, is equal to or greater than the
Consolidated Net Worth of the Company immediately prior to the
Restructuring; and
(d) The Company and Pioneer hereby represent that Pioneer
will, at the time of the Restructuring and after giving pro forma
effect thereto as if such transaction had occurred as of January 1,
1997, be permitted to incur at least $1.00 of additional Indebtedness
as set forth in the first paragraph of Section 4.9 of the Indenture.
2. As of the effective date of this Sixth Supplemental Indenture,
Pioneer, as the Surviving Entity with respect to the Restructured Debt, shall
succeed to, and be substituted for, and may exercise every right and power of
the Company under the Indenture with the same effect as if Pioneer had been
named as the Company in the Indenture.
3. The Guarantor is hereby released from any and all obligations it has
or may have with respect to any Guarantee contemplated by the Indenture as the
Indenture existed before giving effect to this Sixth Supplemental Indenture.
4. This Sixth Supplemental Indenture is executed and shall be construed
as an indenture supplemental to the Indenture and, as provided in the Indenture,
this Sixth Supplemental Indenture forms a part of the Indenture. Except to the
extent amended by or supplemented by this Sixth Supplemental Indenture, the
Company, Pioneer and the Trustee hereby ratify, confirm and reaffirm the
Indenture in all respects.
5. This Sixth Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
6. The laws of the State of New York shall govern the construction and
interpretation of this Sixth Supplemental Indenture, without regard to
principles of conflicts of laws.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Sixth
Supplemental Indenture to be signed on their behalf by their duly authorized
representatives as of the date first above written:
Attest: PIONEER DEBTCO, INC.
/s/ Scott D. Sheffield By: /s/ M. Garrett Smith
- ---------------------------------- ----------------------------------------
Name: Scott D. Sheffield M. Garrett Smith
Assistant Secretary President
PIONEER NATURAL RESOURCES
Attest: COMPANY
/s/ Scott D. Sheffield By: /s/ M. Garrett Smith
- ---------------------------------- ----------------------------------------
Name: Scott D. Sheffield M. Garrett Smith
Assistant Secretary Executive Vice President and Chief
Financial Officer
HARRIS TRUST AND SAVINGS BANK,
Attest: as Trustee
/s/ D.G. Donovan By: /s/ J. Bartolini
- ---------------------------------- ----------------------------------------
D.G. Donovan J. Bartolini
Assistant Secretary Vice President
[Signature Page - Sixth Supplemental Indenture - Page 1 of 1]
<PAGE> 1
EXHIBIT 10.12
================================================================================
PIONEER NATURAL RESOURCES USA, INC.,
PIONEER NATURAL RESOURCES COMPANY,
AND
THE SUBSIDIARY GUARANTORS
being released hereby
$264,000,000
11 5/8% SENIOR SUBORDINATED DISCOUNT NOTES
DUE JULY 1, 2006
THIRD SUPPLEMENTAL INDENTURE
DATED AS OF DECEMBER 18, 1997
HARRIS TRUST AND SAVINGS BANK
TRUSTEE
================================================================================
<PAGE> 2
THIRD SUPPLEMENTAL INDENTURE
THIS THIRD SUPPLEMENTAL INDENTURE, dated as of December 18,
1997, among PIONEER NATURAL RESOURCES USA, INC. (formerly Mesa Operating Co.),
a Delaware corporation (the "Issuer"), PIONEER NATURAL RESOURCES COMPANY
(successor to MESA Inc.), a Delaware corporation (the "Guarantor"), PIONEER
NATURAL RESOURCES (GPC), INC. (formerly Greenhill Petroleum Corporation), a
Delaware corporation ("GPC"), WESTPAN NGL CO., a Delaware corporation
("Westpan"), PARKER & PARSLEY ENERGY TRADING COMPANY, a Delaware corporation
("Energy"), PARKER & PARSLEY GAS PROCESSING CO., a Delaware corporation
("Processing" and together with GPC, Westpan, and Energy, the "Subsidiary
Guarantors"), and HARRIS TRUST AND SAVINGS BANK, a corporation organized and
existing under the laws of the State of Illinois, as trustee (the "Trustee").
Intending to be legally bound hereby, each of the parties
agrees as follows for the benefit of the other parties and for the equal and
ratable benefit of Holders of the Issuer's 11 5/8% Senior Subordinated Discount
Notes due July 1, 2006 (the "Securities"):
WHEREAS, the Issuer, the Guarantor, the Subsidiary Guarantors
and the Trustee are parties to that certain Indenture, dated as of July 2,
1996, as amended by the First Supplemental Indenture, dated as of April 15,
1997, and as further amended by the Second Supplemental Indenture, dated as of
August 7, 1997 (the "Indenture"), pursuant to which the Securities were issued;
and
WHEREAS, Section 9.2 of the Indenture provides that the
Issuer, the Guarantor, the Subsidiary Guarantors and the Trustee may amend the
Indenture with the consent of the Holders of at least a majority (and with
respect to certain amendments, at least 66 2/3%) in aggregate principal amount
of the Securities then outstanding; and
WHEREAS, the Holders of at least 66 2/3% in aggregate
principal amount of the Securities outstanding have consented to the amendments
effected by this Third Supplemental Indenture; and
WHEREAS, all things necessary to make this Third Supplemental
Indenture a valid agreement, in accordance with its terms, have been done; and
WHEREAS, capitalized terms used herein and not otherwise
defined are used as defined in the Indenture.
NOW, THEREFORE, in consideration of these premises and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Issuer, the Guarantor, the Subsidiary Guarantors and
the Trustee hereby amend and supplement the Indenture as follows:
2
<PAGE> 3
ARTICLE I
AMENDMENTS TO THE INDENTURE
1.1. Sections 3.9, 4.3, 4.4(b), 4.7, 4.8, 4.9, 4.10, 4.11,
4.12, 4.13, 4.14, 4.16, 4.17, 6.1(4), 6.1(7), 6.1(8), 6.1(9), 8.4(c), 10.3(c),
11.4 and 11.5 of the Indenture are hereby amended by deleting all such sections
and all references thereto in their entirety.
1.2 Sections 6.1, 6.2 and 6.6(b) of the Indenture are
hereby amended by changing all current references therein of "25%" to "50%",
and by changing all current references therein of "30" to "60."
1.3. The Indenture is hereby amended to replace the word
"Guarantees" with the word "Guarantee" in each instance, to replace the word
"Guarantors" with the word "Guarantor" in each instance, and to delete the
words "Subsidiary Guarantor" and "Subsidiary Guarantors" in each instance
(other than in Section 2.9 of the Indenture), and to make all changes in the
location of related conjunctions, agreement of verbs, and agreement of pronouns
as are reasonably necessary to give effect to this amendment and to retain
proper sentence structure and usage.
1.4 Section 2.9 of the Indenture is hereby amended to
replace the words "Subsidiary Guarantor" with the word "Subsidiary."
1.5 Section 4.15 of the Indenture is hereby amended to
read in its entirety as follows:
Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and
effect (i) its corporate existence and (ii) the rights (charter and
statutory), licenses and franchises of the Company, provided, however,
that the Company shall not be required to preserve any such right,
license or franchise if the Board of Directors of the Company shall
determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries, taken as
a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.
1.6 Section 5.1 of the Indenture is hereby amended to
read in its entirety as follows:
The Company shall not consolidate or merge with or into
(whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease or otherwise dispose of all or substantially
all of its properties or assets, in one or more related transactions,
to another Person, unless (i) the Company is the surviving corporation
of any such consolidation or merger or (a) the Person formed by or
surviving such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made (the "Surviving Entity") is a
corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia and (b) such Surviving
Entity assumes all the obligations of the Company under the Notes and
the
3
<PAGE> 4
Indenture pursuant to a supplemented indenture in a form reasonably
satisfactory to the Trustee; and (ii) immediately before and after
giving effect to such transaction no Default or Event of Default
exists. Notwithstanding the foregoing clauses, (a) any Subsidiary may
consolidate with, merge into or transfer all or part of its properties
and assets to the Company or the Parent, and (b) the Company may merge
with the Parent or any Subsidiary of the Parent or the Company.
1.7 Section 8.3 of the Indenture is hereby amended to
delete the following parenthetical in its entirety: "(but only with respect to
the Company's failure to observe or perform the covenants, conditions and
agreements of the Company under clause (iv) of Section 5.1)."
1.8 The form of Note and the form of Guarantee, and the
outstanding Notes and Guarantees, are hereby amended to make any and all
changes that correspond to the amendments to the Indenture set forth in
Sections 1.1 through 1.7 of this Third Supplemental Indenture.
1.9 The Subsidiary Guarantors are hereby released from
any and all obligations they have or may have with respect to any Guarantee
contemplated by the Indenture as the Indenture existed before giving effect to
the amendments herein.
ARTICLE II
MISCELLANEOUS
2.1 Except to the extent amended by or inconsistent with
this Third Supplemental Indenture, the Issuer, the Guarantor, and the Trustee
hereby ratify and reconfirm the Indenture in its entirety.
2.2 This Third Supplemental Indenture may be executed in
any number of counterparts, each of which so executed shall be an original, but
all such counterparts shall together constitute but one and the same
instrument.
2.3 THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE
CONSTRUCTION AND INTERPRETATION OF THIS THIRD SUPPLEMENTAL INDENTURE, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
2.4 The Trustee accepts the amendments to the Indenture
effected by this Third Supplemental Indenture and agrees to execute the trusts
created by the Indenture as hereby amended, but only upon the terms and
conditions set forth in the Indenture.
2.5 The recitals contained herein shall be taken as the
statements of the Issuer, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Third Supplemental Indenture.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this
Third Supplemental Indenture as of the date first above written.
<TABLE>
<S> <C>
PIONEER NATURAL RESOURCES USA, INC.
Attest:
/s/ Sharon Petty By: /s/ Scott D. Sheffield
- ------------------------------------------- -------------------------------------------------------------------
President
PIONEER NATURAL RESOURCES COMPANY
Attest:
/s/ Sharon Petty By: /s/ Scott D. Sheffield
- ------------------------------------------- -------------------------------------------------------------------
President and Chief Executive Officer
PIONEER NATURAL RESOURCES (GPC), INC.
Attest:
/s/ Sharon Petty By: /s/ M. Garrett Smith
- ------------------------------------------- -------------------------------------------------------------------
Executive Vice President
WESTPAN NGL CO.
Attest:
/s/ Sharon Petty By: /s/ M. Garrett Smith
- ------------------------------------------- -------------------------------------------------------------------
Executive Vice President
PARKER & PARSLEY ENERGY
TRADING COMPANY
Attest:
/s/ Sharon Petty By: /s/ Scott D. Sheffield
- ------------------------------------------- -------------------------------------------------------------------
President
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C>
PARKER & PARSLEY GAS PROCESSING CO.
Attest:
/s/ Julee Taylor By: /s/ Timothy L. Dove
- ------------------------------------------- -------------------------------------------------------------------
Vice President
HARRIS TRUST AND SAVINGS BANK,
as Trustee
Attest:
/s/ C. Potter By: /s/ Judith Bartolini
- ------------------------------------------- -------------------------------------------------------------------
</TABLE>
6
<PAGE> 1
EXHIBIT 10.13
FOURTH SUPPLEMENTAL INDENTURE
THIS FOURTH SUPPLEMENTAL INDENTURE, dated as of December 30, 1997,
among PIONEER NATURAL RESOURCES USA, INC. (formerly known as Mesa Operating
Co.), a Delaware corporation (the "Company"), PIONEER NATURAL RESOURCES COMPANY
(as successor to MESA Inc.), a Delaware corporation ("Pioneer"), PIONEER
NEWSUB1, INC., a Texas corporation and wholly-owned subsidiary of the Company
("NewSub1"), and HARRIS TRUST AND SAVINGS BANK, an Illinois corporation, as
trustee (the "Trustee"). Capitalized terms used herein and not otherwise defined
have the meanings set forth in the Indenture referred to below.
RECITALS
A. The Company, Pioneer and the Trustee are parties to that certain
Indenture, dated as of July 2, 1996, as amended by the First Supplemental
Indenture, dated as of April 15, 1997, as further amended by the Second
Supplemental Indenture, dated as of August 7, 1997, as further amended by the
Third Supplemental Indenture, dated as of December 18, 1997 (the "Indenture"),
pursuant to which the 115/8% Senior Subordinated Discount Notes due July 1, 2006
(the "Notes") were issued.
B. In connection with a merger (the "Restructuring") as of the date
hereof by and between the Company and NewSub1, NewSub1 will assume and be
responsible and liable for all obligations of the Company with respect to the
Notes and the Indenture (collectively, the "Restructured Debt"), to the same
extent as if the Restructured Debt had been incurred or contracted by NewSub1.
C. In connection with the Restructuring, the Company, Pioneer and
NewSub1 have duly determined to make, execute and deliver to the Trustee this
Fourth Supplemental Indenture in order to reflect the results of the
Restructuring as required by the Indenture.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, the parties hereto agree, subject to the terms and conditions
hereinafter set forth, as follows for the benefit of the Trustee and the Holders
of the Notes:
1. The Restructuring is permitted by Section 5.1 of the Indenture and
in connection therewith:
(a) NewSub1 hereby expressly assumes all obligations of the
Company under the Notes and the Indenture;
(b) The Company, Pioneer and NewSub1 hereby represent that
immediately before and after giving effect to the Restructuring, no
Default or Event of Default exists;
(c) The Company, Pioneer and NewSub1 hereby represent that
immediately after giving effect to the Restructuring on a pro forma
basis (and treating any Indebtedness not
<PAGE> 2
previously an obligation of the Company which becomes the obligation of
the Company as a result of the Restructuring as having been incurred at
the time of such transaction), the Consolidated Net Worth of NewSub1,
as the Surviving Entity, is equal to or greater than the Consolidated
Net Worth of the Company immediately prior to the Restructuring; and
(d) The Company, Pioneer and NewSub1 hereby represent that
NewSub1 will, at the time of the Restructuring and after giving pro
forma effect thereto as if such transaction had occurred as of January
1, 1997, be permitted to incur at least $1.00 of additional
Indebtedness as set forth in the first paragraph of Section 4.9 of the
Indenture.
2. As of the effective date of this Fourth Supplemental Indenture,
NewSub1, as the Surviving Entity, shall succeed to, and be substituted for, and
may exercise every right and power of the Company under the Indenture with the
same effect as if NewSub1 had been named as the Company in the Indenture.
3. This Fourth Supplemental Indenture is executed and shall be
construed as an indenture supplemental to the Indenture and, as provided in the
Indenture, this Fourth Supplemental Indenture forms a part of the Indenture.
Except to the extent amended by or supplemented by this Fourth Supplemental
Indenture, the Company, Pioneer, NewSub1 and the Trustee hereby ratify, confirm
and reaffirm the Indenture in all respects.
4. This Fourth Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
5. The laws of the State of New York shall govern the construction and
interpretation of this Fourth Supplemental Indenture, without regard to
principles of conflicts of laws.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Supplemental Indenture to be signed on their behalf by their duly authorized
representatives as of the date first above written:
PIONEER NATURAL RESOURCES USA,
Attest: INC.
/s/ W.T. Howard By: /s/ M. Garrett Smith
- -------------------------------- ----------------------------------------
Name: W.T. Howard M. Garrett Smith
Assistant Secretary Senior Vice President - Finance
PIONEER NATURAL RESOURCES
Attest: COMPANY
/s/ Scott D. Sheffield By: /s/ M. Garrett Smith
- -------------------------------- ----------------------------------------
Name: Scott D. Sheffield M. Garrett Smith
Assistant Secretary Executive Vice President and Chief
Financial Officer
PIONEER NEWSUB1, INC.
Attest:
/s/ Scott D. Sheffield By: /s/ M. Garrett Smith
- -------------------------------- ----------------------------------------
Name: Scott D. Sheffield M. Garrett Smith
Assistant Secretary President
HARRIS TRUST AND SAVINGS BANK,
Attest: as Trustee
/s/ D.G. Donovan By: /s/ J. Bartolini
- -------------------------------- ----------------------------------------
D.G. Donovan J. Bartolini
Assistant Secretary Vice President
[Signature Page - Fourth Supplemental Indenture - Page 1 of 1]
<PAGE> 1
EXHIBIT 10.14
FIFTH SUPPLEMENTAL INDENTURE
THIS FIFTH SUPPLEMENTAL INDENTURE, dated as of December 30, 1997, among
PIONEER NEWSUB1, INC. (as successor to Pioneer Natural Resources USA, Inc.,
formerly known as Mesa Operating Co.), a Texas corporation (the "Company"),
PIONEER NATURAL RESOURCES COMPANY (as successor to MESA Inc.), a Delaware
corporation ("Pioneer"), PIONEER DEBTCO, INC., a Texas corporation and
wholly-owned subsidiary of Pioneer ("DebtCo"), and HARRIS TRUST AND SAVINGS
BANK, an Illinois corporation, as trustee (the "Trustee"). Capitalized terms
used herein and not otherwise defined have the meanings set forth in the
Indenture referred to below.
RECITALS
A. The Company, Pioneer and the Trustee are parties to that certain
Indenture, dated as of July 2, 1996, as amended by the First Supplemental
Indenture, dated as of April 15, 1997, as further amended by the Second
Supplemental Indenture, dated as of August 7, 1997, as further amended by the
Third Supplemental Indenture, dated as of December 18, 1997, as further amended
by the Fourth Supplemental Indenture, dated as of December 30, 1997 (the
"Indenture"), pursuant to which the 11 5/8% Senior Subordinated Discount Notes
due July 1 2006 (the "Notes") were issued.
B. In connection with a merger (the "Restructuring") as of the date
hereof by and between the Company and DebtCo, DebtCo will assume and be
responsible and liable for all obligations of the Company with respect to the
Notes and the Indenture (collectively, the "Restructured Debt"), to the same
extent as if the Restructured Debt had been incurred or contracted by DebtCo.
C. In connection with the Restructuring, the Company, Pioneer and
DebtCo have duly determined to make, execute and deliver to the Trustee this
Fifth Supplemental Indenture in order to reflect the results of the
Restructuring as required by the Indenture.
NOW, THEREFORE, in consideration of the mutual agreements and
covenants set forth herein, the parties hereto agree, subject to the terms and
conditions hereinafter set forth, as follows for the benefit of the Trustee and
the Holders of the Notes:
1. The Restructuring is permitted by Section 5.1 of the Indenture and
in connection therewith:
(a) DebtCo hereby expressly assumes all obligations of the
Company under the Notes and the Indenture;
(b) The Company, Pioneer and DebtCo hereby represent that
immediately before and after giving effect to the Restructuring, no
Default or Event of Default exists;
<PAGE> 2
(c) The Company, Pioneer and DebtCo hereby represent that
immediately after giving effect to the Restructuring on a pro forma
basis (and treating any Indebtedness not previously an obligation of
the Company which becomes the obligation of the Company as a result of
the Restructuring as having been incurred at the time of such
transaction), the Consolidated Net Worth of DebtCo, as the Surviving
Entity with respect to the Restructured Debt, is equal to or greater
than the Consolidated Net Worth of the Company immediately prior to the
Restructuring; and
(d) The Company, Pioneer and DebtCo hereby represent that
DebtCo will, at the time of the Restructuring and after giving pro
forma effect thereto as if such transaction had occurred as of January
1, 1997, be permitted to incur at least $1.00 of additional
Indebtedness as set forth in the first paragraph of Section 4.9 of the
Indenture.
2. As of the effective date of this Fifth Supplemental Indenture,
DebtCo, as the Surviving Entity with respect to the Restructured Debt, shall
succeed to, and be substituted for, and may exercise every right and power of
the Company under the Indenture with the same effect as if DebtCo had been named
as the Company in the Indenture.
3. This Fifth Supplemental Indenture is executed and shall be construed
as an indenture supplemental to the Indenture and, as provided in the Indenture,
this Fifth Supplemental Indenture forms a part of the Indenture. Except to the
extent amended by or supplemented by this Fifth Supplemental Indenture, the
Company, Pioneer, DebtCo and the Trustee hereby ratify, confirm and reaffirm the
Indenture in all respects.
4. This Fifth Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
5. The laws of the State of New York shall govern the construction and
interpretation of this Fifth Supplemental Indenture, without regard to
principles of conflicts of laws.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Fifth
Supplemental Indenture to be signed on their behalf by their duly authorized
representatives as of the date first above written:
PIONEER NEWSUB1, INC.
Attest:
/s/ Mark L. Withrow By: /s/ M. Garrett Smith
- -------------------------------- ----------------------------------------
Name: Mark L. Withrow M. Garrett Smith
Secretary President
PIONEER NATURAL RESOURCES
Attest: COMPANY
/s/ Mark L. Withrow By: /s/ M. Garrett Smith
- -------------------------------- ----------------------------------------
Name: Mark L. Withrow M. Garrett Smith
Secretary Executive Vice President and Chief
Financial Officer
PIONEER DEBTCO, INC.
Attest:
/s/ Mark L. Withrow By: /s/ M. Garrett Smith
- -------------------------------- ----------------------------------------
Name: Mark L. Withrow M. Garrett Smith
Secretary President
HARRIS TRUST AND SAVINGS BANK,
Attest: as Trustee
/s/ C. Potter By: /s/ J. Bartolini
- ------------------------------- ----------------------------------------
C. Potter J. Bartolini
Assistant Secretary Vice President
[Signature Page - Fifth Supplemental Indenture - Page 1 of 1]
<PAGE> 1
EXHIBIT 10.15
SIXTH SUPPLEMENTAL INDENTURE
THIS SIXTH SUPPLEMENTAL INDENTURE, dated as of December 30, 1997, among
PIONEER DEBTCO, INC. (as successor to Pioneer NewSub1, Inc., as successor to
Pioneer Natural Resources USA, Inc., formerly known as Mesa Operating Co.), a
Texas corporation (the "Company"), PIONEER NATURAL RESOURCES COMPANY (as
successor to MESA Inc.), a Delaware corporation and the sole stockholder of the
Company ("Pioneer"), and HARRIS TRUST AND SAVINGS BANK, an Illinois corporation,
as trustee (the "Trustee"). Capitalized terms used herein and not otherwise
defined have the meanings set forth in the Indenture referred to below.
RECITALS
A. The Company, Pioneer and the Trustee are parties to that certain
Indenture, dated as of July 2, 1996, as amended by the First Supplemental
Indenture, dated as of April 15, 1997, as further amended by the Second
Supplemental Indenture, dated as of August 7, 1997, as further amended by the
Third Supplemental Indenture, dated as of December 18, 1997, as further amended
by the Fourth Supplemental Indenture, dated as of December 30, 1997, as further
amended by the Fifth Supplemental Indenture, dated as of December 30, 1997 (the
"Indenture"), pursuant to which the 11 5/8% Senior Subordinated Discount Notes
due July 1, 2006 (the "Notes") were issued.
B. In connection with a merger (the "Restructuring") as of the date
hereof by and between Pioneer and the Company, Pioneer will assume and be
responsible and liable for all obligations of the Company with respect to the
Notes and the Indenture (collectively, the "Restructured Debt"), to the same
extent as if the Restructured Debt had been incurred or contracted by Pioneer.
C. In connection with the Restructuring, the Company and Pioneer have
duly determined to make, execute and deliver to the Trustee this Sixth
Supplemental Indenture in order to reflect the results of the Restructuring as
required by the Indenture.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, the parties hereto agree, subject to the terms and conditions
hereinafter set forth, as follows for the benefit of the Trustee and the Holders
of the Notes:
1. The Restructuring is permitted by Section 5.1 of the Indenture and
in connection therewith:
(a) Pioneer hereby expressly assumes all obligations of the
Company under the Notes and the Indenture;
(b) The Company and Pioneer hereby represent that immediately
before and after giving effect to the Restructuring, no Default or
Event of Default exists;
<PAGE> 2
(c) The Company and Pioneer hereby represent that immediately
after giving effect to the Restructuring on a pro forma basis (and
treating any Indebtedness not previously an obligation of the Company
which becomes the obligation of the Company as a result of the
Restructuring as having been incurred at the time of such transaction),
the Consolidated Net Worth of Pioneer, as the Surviving Entity with
respect to the Restructured Debt, is equal to or greater than the
Consolidated Net Worth of the Company immediately prior to the
Restructuring; and
(d) The Company and Pioneer hereby represent that Pioneer
will, at the time of the Restructuring and after giving pro forma
effect thereto as if such transaction had occurred as of January 1,
1997, be permitted to incur at least $1.00 of additional Indebtedness
as set forth in the first paragraph of Section 4.9 of the Indenture.
2. As of the effective date of this Sixth Supplemental Indenture,
Pioneer, as the Surviving Entity with respect to the Restructured Debt, shall
succeed to, and be substituted for, and may exercise every right and power of
the Company under the Indenture with the same effect as if Pioneer had been
named as the Company in the Indenture.
3. The Guarantor is hereby released from any and all obligations it has
or may have with respect to any Guarantee contemplated by the Indenture as the
Indenture existed before giving effect to this Sixth Supplemental Indenture.
4. This Sixth Supplemental Indenture is executed and shall be construed
as an indenture supplemental to the Indenture and, as provided in the Indenture,
this Sixth Supplemental Indenture forms a part of the Indenture. Except to the
extent amended by or supplemented by this Sixth Supplemental Indenture, the
Company, Pioneer and the Trustee hereby ratify, confirm and reaffirm the
Indenture in all respects.
5. This Sixth Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
6. The laws of the State of New York shall govern the construction and
interpretation of this Sixth Supplemental Indenture, without regard to
principles of conflicts of laws.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Sixth
Supplemental Indenture to be signed on their behalf by their duly authorized
representatives as of the date first above written:
Attest: PIONEER DEBTCO, INC.
/s/ Scott D. Sheffield By: /s/ M. Garrett Smith
- ---------------------------------- ----------------------------------------
Name: Scott D. Sheffield M. Garrett Smith
Assistant Secretary President
PIONEER NATURAL RESOURCES
Attest: COMPANY
/s/ Scott D. Sheffield By: /s/ M. Garrett Smith
- ---------------------------------- ----------------------------------------
Name: Scott D. Sheffield M. Garrett Smith
Assistant Secretary Executive Vice President and Chief
Financial Officer
HARRIS TRUST AND SAVINGS BANK,
Attest: as Trustee
/s/ D.G. Donovan By: /s/ J. Bartolini
- ---------------------------------- ----------------------------------------
D.G. Donovan J. Bartolini
Assistant Secretary Vice President
[Signature Page - Sixth Supplemental Indenture - Page 1 of 1]
<PAGE> 1
EXHIBIT 10.17
SECOND SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE, dated as of December 30, 1997,
among PIONEER NATURAL RESOURCES USA, INC. (formerly known as Mesa Operating Co.,
as successor to Parker & Parsley Petroleum Company), a Delaware corporation (the
"Company"), PIONEER NEWSUB1, INC., a Texas corporation and wholly-owned
subsidiary of the Company ("NewSub1"), and THE CHASE MANHATTAN BANK, a New York
banking association, as trustee (the "Trustee"). Capitalized terms used herein
and not otherwise defined have the meanings set forth in the Indenture referred
to below.
RECITALS
A. The Company and the Trustee are parties to that certain Indenture,
dated as of April 12, 1995, as amended by the First Supplemental Indenture,
dated as of August 7, 1997 (the "Indenture"), pursuant to which the Company
issued 87/8% Senior Notes due 2005 and 8 1/4% Senior Notes due 2007
(collectively, the "Debt Securities").
B. Article IX of the Indenture provides that the Company, when
authorized by a resolution of the Board of Directors of the Company, and the
Trustee may, without the consent of the holders of the Debt Securities, enter
into a supplemental indenture to evidence the succession pursuant to Article X
of the Indenture of another corporation to the Company and the assumption by
such successor of the covenants, agreements and obligations of the Company under
the Debt Securities and the Indenture.
C. Upon consummation of a merger (the "Restructuring") as of the date
hereof by and between the Company and NewSub1, NewSub1 will be possessed of all
the estate, property, rights, privileges and franchises of the Company and will
assume and be responsible and liable for all obligations of the Company with
respect to the Debt Securities and the Indenture (collectively, the
"Restructured Debt"), to the same extent as if the Restructured Debt had been
incurred or contracted by NewSub1.
D. In connection with the Restructuring, the Company and NewSub1 have
duly determined to make, execute and deliver to the Trustee this Second
Supplemental Indenture in order to reflect the results of the Restructuring as
required by the Indenture.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, the parties hereto agree, subject to the terms and conditions
hereinafter set forth, as follows for the benefit of the Trustee and the Holders
of the Debt Securities:
1. The Restructuring is permitted by Section 10.01 of the Indenture and
in connection therewith:
(a) NewSub1 hereby expressly assumes all obligations of the
Company under the Debt Securities and the Indenture;
<PAGE> 2
(b) The Company and NewSub1 hereby represent that immediately
after giving effect to the Restructuring (and treating any Indebtedness
which becomes an obligation of NewSub1, as the Successor Company, or
any Subsidiary of the Company as a result of the Restructuring as
having been Incurred by NewSub1, as the Successor Company, or such
Subsidiary at the time of such transaction), no Default or Event of
Default has occurred or is continuing;
(c) NewSub1, as the Successor Company, waives any right to
redeem any Bearer Security under circumstances in which NewSub1, as the
Successor Company, is otherwise entitled to redeem such Bearer Security
but the Company would not have been entitled to redeem if the
Restructuring had not occurred.
2. As of the effective date of this Second Supplemental Indenture and
upon consummation of the Restructuring, NewSub1, as the Successor Company, shall
succeed to, and be substituted for, and may exercise every right and power of
the Company under the Indenture with the same effect as if NewSub1 had been
named as the Company in the Indenture.
3. This Second Supplemental Indenture is executed and shall be
construed as an indenture supplemental to the Indenture and, as provided in the
Indenture, this Second Supplemental Indenture forms a part of the Indenture.
Except to the extent amended by or supplemented by this Second Supplemental
Indenture, the Company, NewSub1 and the Trustee hereby ratify, confirm and
reaffirm the Indenture in all respects.
4. This Second Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
5. The laws of the State of New York shall govern the construction and
interpretation of this Second Supplemental Indenture, without regard to
principles of conflicts of laws.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be signed on their behalf by their duly authorized
representatives as of the date first above written:
PIONEER NATURAL RESOURCES USA, INC.
By: /s/ M. GARRETT SMITH
--------------------------------------
M. Garrett Smith
Senior Vice President - Finance
PIONEER NEWSUB1, INC.
By: /s/ M. GARRETT SMITH
--------------------------------------
M. Garrett Smith
President
THE CHASE MANHATTAN BANK, as Trustee
By: /s/ JAMES P. FREEMAN
---------------------------------------
Name: James P. Freeman
-------------------------------------
Title: Assistant Vice President
------------------------------------
[Signature Page - Second Supplemental Indenture - Page 1 of 1]
<PAGE> 1
EXHIBIT 10.18
THIRD SUPPLEMENTAL INDENTURE
THIS THIRD SUPPLEMENTAL INDENTURE, dated as of December 30, 1997, among
PIONEER NEWSUB1, INC. (as successor to Pioneer Natural Resources USA, Inc.,
formerly known as Mesa Operating Co., as successor to Parker & Parsley Petroleum
Company), a Texas corporation (the "Company"), PIONEER DEBTCO, INC., a Texas
corporation and wholly-owned subsidiary of Pioneer Natural Resources Company
("DebtCo"), and THE CHASE MANHATTAN BANK, a New York banking association, as
trustee (the "Trustee"). Capitalized terms used herein and not otherwise defined
have the meanings set forth in the Indenture referred to below.
RECITALS
A. The Company and the Trustee are parties to that certain Indenture,
dated as of April 12, 1995, as amended by the First Supplemental Indenture,
dated as of August 7, 1997, as amended by the Second Supplemental Indenture,
dated as of December 30, 1997 (the "Indenture"), pursuant to which the Company
issued 87/8% Senior Notes due 2005 and 8 1/4% Senior Notes due 2007
(collectively, the "Debt Securities").
B. Article IX of the Indenture provides that the Company, when
authorized by a resolution of the Board of Directors of the Company, and the
Trustee may, without the consent of the holders of the Debt Securities, enter
into a supplemental indenture to evidence the succession pursuant to Article X
of the Indenture of another corporation to the Company and the assumption by
such successor of the covenants, agreements and obligations of the Company under
the Debt Securities and the Indenture.
C. Upon consummation of a merger (the "Restructuring") as of the date
hereof by and among the Company, DebtCo and Pioneer AssetCo, Inc., a Texas
corporation and wholly-owned subsidiary of DebtCo ("AssetCo"), DebtCo will
assume and be responsible and liable for all obligations of the Company with
respect to the Debt Securities and the Indenture (collectively, the
"Restructured Debt"), to the same extent as if the Restructured Debt had been
incurred or contracted by DebtCo, and AssetCo will be possessed of all the
estate, property, rights, privileges and franchises of the Company other than
the Restructured Debt.
D. In connection with the Restructuring, the Company and DebtCo have
duly determined to make, execute and deliver to the Trustee this Third
Supplemental Indenture in order to reflect the results of the Restructuring as
required by the Indenture.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, the parties hereto agree, subject to the terms and conditions
hereinafter set forth, as follows for the benefit of the Trustee and the Holders
of the Debt Securities:
1. The Restructuring is permitted by Section 10.01 of the Indenture and
in connection therewith:
<PAGE> 2
(a) DebtCo hereby expressly assumes all obligations of the
Company under the Debt Securities and the Indenture;
(b) The Company and DebtCo hereby represent that immediately
after giving effect to the Restructuring (and treating any Indebtedness
which becomes an obligation of DebtCo, as the Successor Company with
respect to the Restructured Debt, or any Subsidiary of the Company as a
result of the Restructuring as having been Incurred by DebtCo, as the
Successor Company with respect to the Restructured Debt, or such
Subsidiary at the time of such transaction), no Default or Event of
Default has occurred or is continuing;
(c) DebtCo, as the Successor Company with respect to the
Restructured Debt, waives any right to redeem any Bearer Security under
circumstances in which DebtCo, as the Successor Company with respect to
the Restructured Debt, is otherwise entitled to redeem such Bearer
Security but the Company would not have been entitled to redeem if the
Restructuring had not occurred.
2. As of the effective date of this Third Supplemental Indenture and
upon consummation of the Restructuring, DebtCo, as the Successor Company with
respect to the Restructured Debt, shall succeed to, and be substituted for, and
may exercise every right and power of the Company under the Indenture with the
same effect as if DebtCo had been named as the Company in the Indenture.
3. This Third Supplemental Indenture is executed and shall be construed
as an indenture supplemental to the Indenture and, as provided in the Indenture,
this Third Supplemental Indenture forms a part of the Indenture. Except to the
extent amended by or supplemented by this Third Supplemental Indenture, the
Company, DebtCo and the Trustee hereby ratify, confirm and reaffirm the
Indenture in all respects.
4. This Third Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
5. The laws of the State of New York shall govern the construction and
interpretation of this Third Supplemental Indenture, without regard to
principles of conflicts of laws.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be signed on their behalf by their duly authorized
representatives as of the date first above written:
PIONEER NEWSUB1, INC.
By: /s/ M. GARRETT SMITH
------------------------------
M. Garrett Smith
President
PIONEER DEBTCO, INC.
By: /s/ M. GARRETT SMITH
------------------------------
M. Garrett Smith
President
THE CHASE MANHATTAN BANK, as Trustee
By: /s/ JAMES P. FREEMAN
-------------------------------
Name: James P. Freeman
-----------------------------
Title: Assistant Vice President
----------------------------
[Signature Page - Third Supplemental Indenture - Page 1 of 1]
<PAGE> 1
EXHIBIT 10.19
FOURTH SUPPLEMENTAL INDENTURE
THIS FOURTH SUPPLEMENTAL INDENTURE, dated as of December 30, 1997,
among PIONEER NATURAL RESOURCES COMPANY, a Delaware corporation ("Pioneer"),
PIONEER NATURAL RESOURCES USA, INC., a Delaware corporation, as a subsidiary
guarantor (the "Subsidiary Guarantor"), PIONEER DEBTCO, INC. (as successor to
Pioneer NewSub1, Inc., as successor to Pioneer Natural Resources USA, Inc.,
formerly known as Mesa Operating Co., as successor to Parker & Parsley Petroleum
Company), a Texas corporation (the "Company"), and THE CHASE MANHATTAN BANK, a
New York banking association, as trustee (the "Trustee"). Capitalized terms used
herein and not otherwise defined have the meanings set forth in the Indenture
referred to below.
RECITALS
A. The Company and the Trustee are parties to that certain Indenture,
dated as of April 12, 1995, as amended by the First Supplemental Indenture,
dated as of August 7, 1997, as amended by the Second Supplemental Indenture,
dated as of December 30, 1997, as amended by the Third Supplemental Indenture,
dated as of December 30, 1997 (the "Indenture"), pursuant to which the Company
issued 87/8% Senior Notes Due 2005 and 8 1/4% Senior Notes Due 2007
(collectively, the "Debt Securities").
B. Article IX of the Indenture provides that the Company, when
authorized by a resolution of the Board of Directors of the Company, and the
Trustee may, without the consent of the holders of the Debt Securities, enter
into a supplemental indenture (i) to evidence the succession pursuant to Article
X of the Indenture of another corporation to the Company and the assumption by
such successor of the covenants, agreements and obligations of the Company under
the Debt Securities and the Indenture and (ii) to add a Guarantee with respect
to the Debt Securities.
C. Upon consummation of a merger (the "Restructuring") as of the date
hereof by and between the Company and Pioneer, (i) Pioneer will be possessed of
all the estate, property, rights, privileges and franchises of the Company and
will assume and be responsible and liable for all obligations of the Company
with respect to the Debt Securities and the Indenture (collectively, the
"Restructured Debt"), to the same extent as if the Restructured Debt had been
incurred or contracted by Pioneer, and (ii) the Subsidiary Guarantor will
execute and deliver a Guarantee to the Trustee, pursuant to which the Subsidiary
Guarantor guarantees the obligations of the Company with respect to the
Restructured Debt.
D. In connection with the Restructuring, the Company, Pioneer and the
Subsidiary Guarantor have duly determined to make, execute and deliver to the
Trustee this Fourth Supplemental Indenture in order to reflect the results of
the Restructuring as required by the Indenture.
<PAGE> 2
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, the parties hereto agree, subject to the terms and conditions
hereinafter set forth, as follows for the benefit of the Trustee and the Holders
of the Debt Securities:
1. The Restructuring is permitted by Section 10.01 of the Indenture and
in connection therewith:
(a) Pioneer hereby expressly assumes all obligations of the
Company under the Debt Securities and the Indenture;
(b) The Company and Pioneer hereby represent that immediately
after giving effect to the Restructuring (and treating any Indebtedness
which becomes an obligation of Pioneer, as the Successor Company, or
any Subsidiary of the Company as a result of the Restructuring as
having been Incurred by Pioneer, as the Successor Company, or such
Subsidiary at the time of such transaction), no Default or Event of
Default has occurred or is continuing;
(c) Pioneer, as the Successor Company, waives any right to
redeem any Bearer Security under circumstances in which Pioneer, as the
Successor Company, is otherwise entitled to redeem such Bearer Security
but the Company would not have been entitled to redeem if the
Restructuring had not occurred.
2. As of the effective date of this Fourth Supplemental Indenture and
upon consummation of the Restructuring, Pioneer, as the Successor Company, shall
succeed to, and be substituted for, and may exercise every right and power of
the Company under the Indenture with the same effect as if Pioneer had been
named as the Company in the Indenture.
3. Article XIII of the Indenture is hereby amended to be re-numbered
Article XIV and each reference in the Indenture to Article XIII or any section
thereof is hereby amended to correspond to the foregoing re-numbering. The
Indenture is hereby further amended to add the following new Article XIII:
ARTICLE XIII
THE GUARANTEE
Section 13.01. The Guarantee.
Pioneer Natural Resources USA, Inc., a Delaware corporation
and wholly-owned subsidiary of the Company (the "Subsidiary
Guarantor"), hereby unconditionally guarantees to each Holder of Debt
Securities authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Debt Securities or the
obligations of the Company hereunder or thereunder, that: (a) the
principal of and premium, if any, and interest, on the Debt Securities
shall be promptly paid in full when due, whether at maturity, by
acceleration, redemption or
-2-
<PAGE> 3
otherwise, and interest on the overdue principal of and interest on
premium, if any, and interest, on the Debt Securities, if any, if
lawful, and all other obligations of the Company to the Holders or the
Trustee hereunder or thereunder shall be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b)
in case of any extension of time of payment or renewal of any Debt
Securities or any of such other obligations, that the same shall be
promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed or any performance so guaranteed for whatever reason, the
Subsidiary Guarantor shall be obligated to pay the same immediately.
The Subsidiary Guarantor hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Debt Securities or this Indenture, the absence of
any action to enforce the same, any waiver or consent by any Holder
with respect to any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce the same or any
other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. The Subsidiary Guarantor
hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenant that the
Subsidiary Guarantor's guarantee under this Section shall not be
discharged except by complete performance of the obligations contained
in the Debt Securities and this Indenture. If any Holder or the Trustee
is required by any court or otherwise to return to the Company, the
Subsidiary Guarantor or any custodian, trustee, liquidator or other
similar official acting in relation to either the Company or the
Subsidiary Guarantor any amount paid by either to the Trustee or such
Holder, the Subsidiary Guarantor's guarantee under this Section, to the
extent theretofore discharged, shall be reinstated in full force and
effect. The Subsidiary Guarantor agrees that it shall not be entitled
to any right of subrogation in relation to the Holders of Debt
Securities in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. The Subsidiary
Guarantor further agrees that, as between itself as guarantor, on the
one hand, and the Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be accelerated as
provided in Article VI for the purposes of the Subsidiary Guarantor's
guarantee hereunder, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby and (y) in the event of any declaration of
acceleration of such obligations as provided in Article VI, such
obligations (whether or not due and payable) shall forthwith become due
and payable by the Subsidiary Guarantor for the purposes of its
guarantee hereunder.
Section 13.02. Execution and Delivery of Guarantee.
To evidence its Guarantee set forth in Section 13.01, the
Subsidiary Guarantor hereby agrees that a notation of such Guarantee
shall be endorsed by an officer of the Subsidiary Guarantor on each
Debt Security authenticated and delivered by the Trustee, that this
Indenture shall be executed on behalf of the Subsidiary Guarantor by
its President or one of its Vice Presidents and attested to by an
Officer and that the Subsidiary Guarantor shall
-3-
<PAGE> 4
deliver to the Trustee an Opinion of Counsel that the foregoing have
been duly authorized, executed and delivered by the Subsidiary
Guarantor and that such Guarantee is a valid and legally binding
obligation of the Subsidiary Guarantor, enforceable against the
Subsidiary Guarantor in accordance with its terms.
The Subsidiary Guarantor hereby agrees that its Guarantee set
forth in Section 13.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Debt Security a notation
of such Guarantee.
If an officer of the Subsidiary Guarantor whose signature is
on this Indenture or on the applicable Guarantee no longer holds that
office at the time the Trustee authenticates the Debt Securities on
which such Guarantee is endorsed, such Guarantee shall be valid
nevertheless.
The delivery of any Debt Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Guarantee set forth in this Indenture on behalf of the Subsidiary
Guarantor.
Section 13.03. Subsidiary Guarantor May Consolidate, etc., on
Certain Terms.
The Subsidiary Guarantor may not consolidate with or merge
with or into, another corporation or Person other than the Company or
another Subsidiary, unless:
(a) subject to the provisions of Section 13.04
hereof, the Person formed by or surviving any such
consolidation or merger assumes all the obligations of the
Subsidiary Guarantor's Guarantee pursuant to a supplemental
indenture in form reasonably satisfactory to the Trustee;
(b) immediately after giving effect to such
transaction, no Default or Event of Default exists; and
(c) such transaction does not violate Section 4.11 or
Section 4.12.
In case of any such consolidation or merger and upon the
assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the Guarantee of the Debt Securities and the due and
punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Subsidiary Guarantor, such successor
corporation shall succeed to and be substituted for the Subsidiary
Guarantor with the same effect as if it had been named herein as the
Subsidiary Guarantor. Such successor corporation thereupon may cause to
be signed the Guarantee to be endorsed upon all of the Debt Securities
issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee. The Guarantee so issued shall in
all respects have the same legal rank and benefit under this Indenture
as any Guarantee theretofore and thereafter issued in accordance with
the terms of
-4-
<PAGE> 5
this Indenture as though all of such Guarantees had been issued at the
date of the execution hereof.
Except as set forth in Articles IV and X hereof, nothing
contained in this Indenture or in any of the Debt Securities shall
prevent any consolidation or merger of the Subsidiary Guarantor with or
into the Company or another Subsidiary, or shall prevent any sale or
conveyance of the property of the Subsidiary Guarantor as an entirety
or substantially as an entirety to the Company or any Subsidiary.
Section 13.04. Release of Guarantee.
The Subsidiary Guarantor shall be released and relieved of any
obligations under its Guarantee upon release or other termination of
both (A) that certain Guaranty, dated as of December 18, 1997, by the
Subsidiary Guarantor with respect to the Amended and Restated Credit
Facility Agreement (Primary Facility), dated as of December 18, 1997
(the "Primary Agreement"), among Pioneer, NationsBank of Texas, as
administrative agent, CIBC Inc., as documentation agent, Morgan
Guaranty Trust Company of New York, as documentation agent, The Chase
Manhattan Bank, as syndication agent, the co-agents signatory thereto,
and the other lenders signatory thereto, and (B) that certain Guaranty,
dated as of December 18, 1997, by the Subsidiary Guarantor with respect
to the Amended and Restated Credit Facility Agreement (364-Day
Facility), dated as of December 18, 1997 (the "364-Day Agreement" and
together with the Primary Agreement, the "United States Credit
Agreement"), among Pioneer, NationsBank of Texas, as administrative
agent, CIBC Inc., as documentation agent, Morgan Guaranty Trust Company
of New York, as documentation agent, The Chase Manhattan Bank, as
syndication agent, the co-agents signatory thereto, and the other
lenders signatory thereto (the foregoing guarantees being referred to
herein as the "United States Credit Facility Guarantees"). Any
refinancing, refunding, extension, renewal or replacement (or
successive refinancings, refundings, extensions, renewals or
replacements), as a whole, or in part, of the United States Credit
Facility shall not be deemed a release or other termination of the
United States Credit Facility Guarantees if the Subsidiary Guarantor
provides a guarantee or guarantees with respect to such refinancing,
refunding, extension, renewal or replacement in substantially the same
form, and on substantially the same terms, as the United States Credit
Facility Guarantees.
In the event of a sale or other disposition of all or
substantially all of the assets of the Subsidiary Guarantor or a sale
or other disposition (including, without limitation, by foreclosure) of
all of the capital stock of the Subsidiary Guarantor, to any
corporation or other Person (including a Subsidiary) by way of merger,
consolidation, or otherwise, in a transaction that does not violate any
of the covenants of this Indenture, then the Subsidiary Guarantor shall
be released and relieved of any obligations under its Guarantee and
such acquiring corporation or other Person, if other than the Company
or a Subsidiary shall have no obligation to assume or otherwise become
liable under such Guarantee; provided, if such acquiring corporation or
other Person is other than the Company or a Subsidiary, that the net
proceeds of such sale or other disposition are applied, as applicable,
in accordance with
-5-
<PAGE> 6
Section 4.12 hereof. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that such
sale or other disposition was made by the Company in accordance with
the provisions of this Indenture, including without limitation Section
4.12, the Trustee shall execute any documents reasonably required in
order to evidence the release of the Subsidiary Guarantor from its
obligations under its Guarantee.
Section 13.05. Limitation on Subsidiary Guarantor Liability.
For purposes hereof, the Subsidiary Guarantor's liability
shall be that amount from time to time equal to the aggregate liability
of the Subsidiary Guarantor under its Guarantee, but shall be limited
to the lesser of (i) the aggregate amount of the obligations of the
Company under the Debt Securities and this Indenture and (ii) the
amount, if any, which would not have (A) rendered the Subsidiary
Guarantor "insolvent" (as such term is defined in the federal
Bankruptcy Law and in the Debtor and Creditor Law of the State of New
York) or (B) left it with unreasonably small capital at the time its
Guarantee of the Debt Securities was entered into, after giving effect
to the incurrence of existing Indebtedness immediately prior to such
time; provided that, it shall be a presumption in any lawsuit or other
proceeding in which the Subsidiary Guarantor is a party that the amount
guaranteed pursuant to its Guarantee is the amount set forth in clause
(i) above unless any creditor, or representative of creditors of the
Subsidiary Guarantor, or debtor in possession or trustee in bankruptcy
of the Subsidiary Guarantor, otherwise proves in such a lawsuit that
the aggregate liability of the Subsidiary Guarantor is limited to the
amount set forth in clause (ii). In making any determination as to the
solvency or sufficiency of capital of the Subsidiary Guarantor in
accordance with the previous sentence, any rights the Subsidiary
Guarantor may have, contractual or otherwise, shall be taken into
account.
4. This Fourth Supplemental Indenture is executed and shall be
construed as an indenture supplemental to the Indenture and, as provided in the
Indenture, this Fourth Supplemental Indenture forms a part of the Indenture.
Except to the extent amended by or supplemented by this Fourth Supplemental
Indenture, the Company, Pioneer and the Trustee hereby ratify, confirm and
reaffirm the Indenture in all respects.
5. This Fourth Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
6. The laws of the State of New York shall govern the construction and
interpretation of this Fourth Supplemental Indenture, without regard to
principles of conflicts of laws.
-6-
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Supplemental Indenture to be signed on their behalf by their duly authorized
representatives as of the date first above written:
PIONEER DEBTCO, INC.
By: /s/ M. GARRETT SMITH
---------------------------------
M. Garrett Smith
President
PIONEER NATURAL RESOURCES COMPANY
By: /s/ M. GARRETT SMITH
---------------------------------
M. Garrett Smith
Executive Vice President and Chief
Financial Officer
PIONEER NATURAL RESOURCES USA, INC.
By: /s/ M. GARRETT SMITH
---------------------------------
M. Garrett Smith
Senior Vice President - Finance
THE CHASE MANHATTAN BANK, as Trustee
By: /s/ JAMES P. FREEMAN
---------------------------------
Name: James P. Freeman
-------------------------------
Title: Assistant Vice President
------------------------------
[Signature Page - Fourth Supplemental Indenture - Page 1 of 1]
<PAGE> 1
EXHIBIT 10.20
GUARANTEE
THIS GUARANTEE, dated as of December 30, 1997 (this "Agreement"), is
entered into by Pioneer Natural Resources USA, Inc., a Delaware corporation
("Pioneer USA"). Capitalized terms used herein but not otherwise defined have
the meanings set forth in the Indenture referred to below.
RECITALS:
A. Pioneer USA is a wholly-owned subsidiary of Pioneer Natural
Resources Company, a Delaware corporation ("Pioneer").
B. As of the date hereof, Pioneer has assumed the obligations of
Pioneer USA with respect to that certain Indenture, dated as of April 12, 1995,
as supplemented from time to time (the "Indenture"), between Pioneer USA
(formerly Mesa Operating Co., as successor to Parker & Parsley Petroleum
Company) and The Chase Manhattan Bank, a New York banking association, as
trustee, pursuant to which Pioneer USA has issued $150,000,000 in aggregate
principal amount of 87/8% Senior Notes Due 2005 and $150,000,000 in aggregate
principal amount of 8 1/4% Senior Notes Due 2007 (collectively, the "Debt
Securities").
NOW, THEREFORE, in consideration of the assumption by Pioneer of all
obligations with respect to the Indenture and the Debt Securities, Pioneer USA
hereby agrees as follows:
ARTICLE 1
GUARANTEE
1.1 Guarantee. Pioneer USA hereby unconditionally guarantees to each
Holder of Debt Securities authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Debt Securities or the obligations of
Pioneer thereunder, that: (a) the principal of, premium, if any, and interest on
the Debt Securities shall be promptly paid in full when due, whether at
maturity, by acceleration or otherwise, and interest on the overdue principal of
and interest, if any, on any premium and interest on the Debt Securities, if
lawful, and all other obligations of Pioneer to the Holders or the Trustee
thereunder shall be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Debt Securities or any of such other obligations, that
same shall be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, Pioneer USA shall be obligated to
pay the same immediately.
1.2 Continuing Guarantee; Release. This is a continuing guarantee and
shall remain in full force and effect and shall be binding upon Pioneer USA and
its respective successors and assigns to the extent set forth in the Indenture
until full and final payment of all of Pioneer's obligations under the Debt
Securities and the Indenture and shall inure to the benefit of the Trustee and
the Holders of Debt Securities and their successors and assigns and, in the
event of any transfer or
<PAGE> 2
assignment of rights by any Holder of Debt Securities or the Trustee, the rights
and privileges herein conferred upon that party shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions hereof. Pioneer USA shall be released and relieved of any obligations
under this Agreement upon release or other termination of both (A) that certain
Guaranty, dated as of December 18, 1997, by Pioneer USA with respect to the
Amended and Restated Credit Facility Agreement (Primary Facility), dated as of
December 18, 1997 (the "Primary Agreement"), among Pioneer, NationsBank of
Texas, as administrative agent, CIBC Inc., as documentation agent, Morgan
Guaranty Trust Company of New York, as documentation agent, The Chase Manhattan
Bank, as syndication agent, the co-agents signatory thereto, and the other
lenders signatory thereto, and (B) that certain Guaranty, dated as of December
18, 1997, by Pioneer USA with respect to the Amended and Restated Credit
Facility Agreement (364-Day Facility), dated as of December 18, 1997 (the
"364-Day Agreement" and together with the Primary Agreement, the "United States
Credit Agreement"), among Pioneer, NationsBank of Texas, as administrative
agent, CIBC Inc., as documentation agent, Morgan Guaranty Trust Company of New
York, as documentation agent, The Chase Manhattan Bank, as syndication agent,
the co-agents signatory thereto, and the other lenders signatory thereto (the
foregoing guarantees being referred to herein as the "United States Credit
Facility Guarantees"). Any refinancing, refunding, extension, renewal or
replacement (or successive refinancings, refundings, extensions, renewals or
replacements), as a whole, or in part, of the United States Credit Facility
shall not be deemed a release or other termination of the United States Credit
Facility Guarantees if Pioneer USA provides a guarantee or guarantees with
respect to such refinancing, refunding, extension, renewal or replacement in
substantially the same form, and on substantially the same terms, as the United
States Credit Facility Guarantees.
ARTICLE 2
MISCELLANEOUS
2.1 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
2.2 Severability. If any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
2.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
signed by its duly authorized officer as of the date first above written.
PIONEER NATURAL RESOURCES USA, INC.
By: /s/ M. GARRETT SMITH
-----------------------------------
M. Garrett Smith
Senior Vice President - Finance
[Signature Page - Guarantee - Page 1 of 1]
<PAGE> 1
Exhibit 10.21
Note
$100,000,000 December 22, 1997
FOR VALUE RECEIVED, the undersigned, PIONEER NATURAL RESOURCES COMPANY, a
Delaware corporation, with offices at 303 W. Wall, Suite 101, Midland, Texas
(herein called "Borrower"), hereby promises to pay to the order of NATIONSBANK
OF TEXAS, N.A. (herein called "Lender"), the principal sum of ONE HUNDRED
MILLION AND NO/100 DOLLARS ($100,000,000), or, if greater or less, the
aggregate unpaid principal amount of each advance made under this Note
("Advance") by Lender to Borrower, together with interest on the unpaid
principal balance thereof as hereinafter set forth, both principal and interest
payable as herein provided in lawful money of the United States of America at
the principal banking offices of the Lender, 901 Main Street, Dallas, Texas
75202, or at such other place as from time to time may be designated by the
holder of this Notes, with the concurrence of Borrower and Lender. Subject to
the terms and conditions of the Credit Agreement and hereof, Borrower may
borrow, repay and reborrow hereunder.
Reference is made to that certain Amended and Restated Credit Facility
Agreement - Primary Facility, dated as of December 18, 1997, by and among
Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"). This Note is not one of the Notes issued pursuant to the
Credit Agreement. The Note incorporates by reference the terms and provisions
of the Credit Agreement, including, but not limited to, the manner of making
advances, the provisions for interest rate elections, provisions for payment and
prepayment and acceleration of the maturity hereof upon the happening of
certain events. Reference is hereby made to the Credit Agreement for a
description of certain rights, limitations of rights, obligations and duties of
the parties hereto and for the meanings assigned to terms used and not otherwise
defined herein which are hereby incorporated by this reference.
The principal amount of this Note, together with all interest accrued
hereon and unpaid along with any other amounts due and owing in connection with
this Note, shall be due and payable in full on the earlier to occur of (i)
April 1, 1999 ("Maturity Date") or (ii) the date when the commitments of Lender
under this Note are terminated. Borrower may reduce the amount of the Lender's
commitments hereunder at any time upon three (3) days written notice of Lender.
Upon the occurrence of an Event of Default under the Credit Agreement, Lender's
commitments hereunder shall immediately terminate.
Interest accrued on each Advance evidenced by this Note shall be payable,
without duplication: (a) on the Maturity Date; (b) with respect to any Base
Rate Portion of the Advances evidenced by this Note, on the third Business Day
of each Fiscal Quarter occurring after the date of the initial borrowing of a
Base Rate Portion hereunder; (c) with respect to any Eurodollar Portion of the
Advances evidenced by this Note, on the last day of each applicable Interest
Period (and, if such Interest Period shall exceed 90 days, on the 90th day of
such Interest Period and every 90 days thereafter until the end of such
Interest Period); (d) with respect to any Base Rate Portion converted into a
Eurodollar Portion of the Advances evidenced by this Note pursuant to a Rate
Election on a day when interest would not
Page 1 of a 3 Page Note
<PAGE> 2
otherwise have been payable pursuant to clause (b), on the third Business Day
of each Fiscal Quarter occurring after the date of such conversion; and (e) on
any portion of the Advances evidenced by this Note, the Maturity Date of which
is accelerated pursuant to Section 6.1 of the Credit Agreement, on the date to
which the Maturity Date of such portion has been accelerated. Interest accrued
on the Advances evidenced by this Note or other monetary Obligations arising
under this Note, the Credit Agreement or any other Loan Document after the date
such amount is due and payable (whether on the Maturity Date, upon acceleration
or otherwise) shall be payable on demand.
The Base Rate Portion of the Advances evidenced by this Note (exclusive
of any past due principal or interest) from time to time outstanding shall bear
interest on each day outstanding at the Base Rate, plus the applicable Base Rate
Margin. Each Eurodollar Portion of the Advances evidenced by this Note
(exclusive of any past due principal or interest) shall bear interest on each
day during the related Interest Period at the applicable Eurodollar Rate, plus
the applicable Eurodollar Margin. All past due principal of the Advances
evidenced by this Note (whether payable on the Maturity Date or otherwise) shall
bear interest on each day outstanding after its due date at the applicable
Default Rate in effect on such day.
Notwithstanding the other provisions of this Note, in no event shall
the interest payable hereon, whether before or after maturity, exceed the
Maximum Lawful Rate and this Note is expressly made subject to the provisions
of the Credit Agreement which more fully set out the limitations on how
interest accrues hereon. In the event applicable law provides for a ceiling
under Chapter 1D of Article 5069 of the Texas Credit Title, Title 79, Vernon's
Texas Civil Statutes, as amended (formerly Article 5069-1.04, Vernon's Texas
Civil Statutes, as amended), that ceiling shall be the indicated rate ceiling.
The term "applicable law" as used in this Note shall mean the laws of the State
of Texas or the laws of the United States, whichever laws allow the greater
interest as such laws now exist or may be enacted, changed or amended or come
into effect in the future.
If this Note is placed in the hands of an attorney for collection after
a Default, or if all or any part of the indebtedness represented hereby is
proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, the
undersigned Borrower and any and all endorsers, sureties and guarantors of this
Note jointly and severally agree to pay reasonable attorneys' fees and
collection costs to the holder hereof in addition to the principal and interest
payable hereunder.
The undersigned Borrower and any and all endorsers, sureties and
guarantors of this Note hereby severally waive demand, presentment, notice of
demand and of dishonor and nonpayment of this Note, protest, notice of protest,
notice of intention to accelerate the maturity of this Note, declaration or
notice of acceleration of the maturity of this Note, diligence in collecting,
the bringing of any suit against any party and any notice of or defense on
account of any extensions, renewals, partial payments or changes in any manner
of or in this Note or in any of its terms, provisions and covenants, or any
releases or substitutions of any security, or any delay, indulgence or other
act of any trustee or any holder hereof, whether before or after maturity.
It is contemplated that by reason of prepayment hereon there may be
times when no indebtedness is owing hereunder; notwithstanding such occurrences,
as long as all of Lender's commitments
Page 2 of a 3 Page Note
<PAGE> 3
hereunder have not been terminated, this Note shall remain valid and shall be
in full force and effect as to Advances subsequent to each occurrence.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE UNDERSIGNED BORROWER AND
LENDER WITH RESPECT HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE
SAME ARE GOVERNED BY APPLICABLE FEDERAL LAW.
THIS WRITTEN AGREEMENT AND THE DOCUMENTS EXECUTED IN CONNECTION
HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
PIONEER NATURAL RESOURCES
COMPANY
By: /s/ GARRETT SMITH
-------------------------------
Name: M. Garrett Smith
Title: Executive Vice President and
Chief Financial Officer
Page 3 of a 3 Page Note
<PAGE> 1
EXHIBIT 10.22
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (the "Agreement") dated as of the 22nd day
of October, 1997, is between COMETRA ENERGY, L.P., a Texas limited partnership
the sole general partner of which is Aveneg, Inc., a Delaware corporation
("Seller"), and PIONEER NATURAL RESOURCES USA, INC., a Delaware corporation
("Buyer").
In consideration of the mutual promises contained herein, the benefits to
be derived by each party hereunder and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer
agree as follows:
ARTICLE I
PURCHASE AND SALE
1.01 - PURCHASE AND SALE. Subject to the terms and conditions of the
Agreement, Seller agrees to sell and convey and Buyer agrees to purchase and pay
for the following described assets (hereinafter referred to as the "Assets"):
(a) The interests in and to the oil and gas properties (the
"Producing Properties") described as follows:
(1) all of Seller's and all of any Affiliate's right, title and
interest in and to the oil and gas leases, and oil, gas and
mineral leases described in Exhibit "A" hereto (the
"Producing Leases");
(2) all of Seller's and all of any Affiliate's rights in respect
of any pooled or unitized acreage located in whole or in
part on lands covered by or pooled or unitized with the
Producing Leases or the Other Leases as described below,
including rights to production from the pool or unit
allocated to any Producing Lease being a part thereof;
(3) all rights, options, titles, and interests of Seller or any
Affiliate granting Seller or any Affiliate the right to
obtain, or otherwise earn interests in or to any portion of
the Producing Properties, the Option Leases or the Added
Interests no matter how earned;
(4) all of Seller's and all of any Affiliate's tenements,
hereditaments, and appurtenances belonging to any of the
foregoing;
<PAGE> 2
-2-
(5) all of the right, title and interest of Seller or any
Affiliate in and to the real, personal and mixed property
used in the operation of the Assets, whether located on or
off the premises covered by any of the Assets (the
"Equipment") including, but not limited to (A) all wellhead
equipment, fixtures (including, but not limited to, field
separators and liquid extractors), pipe, casing, and tubing
in, on or appurtenant to the wells ("Wells") described on
Exhibit "B" attached hereto and made a part hereof; (B) all
production, gathering, treating, processing, compression,
dehydration, salt water disposal, injection, gathering line
and pipeline equipment and facilities; (C) all flow lines,
powerlines, and poles; and (D) all tanks, machines,
equipment, radio-controlled instruments, tools, dies,
vessels and other facilities;
(a) All of Seller's and all of any Affiliate's right, title and
interest in and to the oil and gas leases, oil, gas and mineral
leases, rights or options to acquire or own an interest in any
oil and gas lease, and any other oil and gas properties (the
"Other Leases") described on Exhibit "C" hereto and all lands
covered thereby;
(b) All of Seller's and all of any Affiliate's right, title and
interest under the contracts, agreements, easements, surface
rights and other instruments described on Exhibit "D" attached
hereto and made a part hereof together with all of Seller's and
all of any Affiliate's right, title and interest under any
surface leases, rights of way, farmin agreements, farmout
agreements, exploration agreements, bottom hole agreements,
acreage contribution agreements, operating agreements, unit
agreements, processing agreements, options, leases of equipment
or facilities, governmental permits and licenses and other
contracts, agreements, licenses, permits and rights that are
owned by Seller or any Affiliate in whole or in part, which are
not described on Exhibit "D" hereto, and that are appurtenant to
the Assets or used or held for use in connection with the
ownership or operation of the Assets or with the production,
treatment, sale, or disposal of water, hydrocarbons and
associated substances therefrom or thereon (in the aggregate the
"Contracts");
(c) Subject to the provisions of Section 8.06 hereof, all of the
files, records, documents, correspondence and data, including
Seller's or any Affiliate's proprietary 3D Seismic Data which
covers in whole or in part the areas shown on Exhibit "K" hereto,
and any other seismic data or information covering any of the
Assets to the extent Seller's or any Affiliate's transfer of same
is not prohibited or restricted by any obligation of
confidentiality or licensing agreement prohibiting such transfer,
now in the possession or control of Seller or any Affiliate that
relates to the
<PAGE> 3
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items described in sub-paragraphs (a), (b) or (c) above, without
limitation, including, but not limited to, those items described
in Section 4.01(a)(1-11) below (the "Records");
(d) All production facilities, casing, tubing, wellheads, packers,
battery equipment, tanks, valves and any other equipment in
inventory that relates to and is used or held for use in
connection with the Assets, with said inventory covering at least
those items identified on Exhibit "E";
(e) Except for any assets excluded under Section 1.02 below, all
warranties, covenants, indemnities and representations from third
parties, claims, rights and causes of action against third
parties, asserted and unasserted, known and unknown, of or
pertaining to the Assets;
(f) All of Seller's and all of any Affiliate's right, title and
interest in oil, gas, mineral and other hydrocarbon substances
produced from the Producing Leases, Other Leases and Added
Interests on or after the Effective Time;
(g) Two seismic work stations, and the related Geoquest software;
(h) All privileges, benefits, and powers conferred upon the holder of
the Producing Leases, Other Leases and the Added Interests with
respect to the use or occupation of the surface of the lands
covered by the Assets or any lands adjacent thereto; and
(i) To the extent applicable to a Producing Lease, Prospect Tract, or
Anomaly Area, and except to the extent excluded under Section
1.02 below, all of Seller's and all of any Affiliate's right,
title and interest in and to any of the properties, assets and
interests that are similar in nature to or description of those
described or referred to in the previous provisions of this
Section 1.01, whether real, personal or mixed property, located
in Anderson, Freestone, Henderson or Leon Counties, Texas, and
all right, title and interest of Seller or any Affiliate in and
to any oil and gas lease, option, overriding royalty interest,
mineral fee, royalty interest, surface estate or other interest
in real property covering any lands or interests located in
Anderson, Freestone, Henderson or Leon Counties, Texas, and all
personal and mixed property located on or used in connection
therewith, regardless of whether any of such lands or interests
are described or referred to in the previous provisions of this
Section 1.01 or on Exhibits "A," "B," "C" or "D" attached hereto
(the "Added Interests").
<PAGE> 4
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As used in this Agreement, the term "Affiliate" shall mean any corporation,
limited liability company, association, partnership or person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with Seller.
1.02 - EXCLUDED ASSETS. There is hereby excluded from the Assets and
retained by Seller the following described property:
(a) Vehicles used by Seller in the operation of the Assets;
(b) All of Seller's right, title and interest in those wells and
leases described in Exhibit "F" attached hereto; and
(c) All claims for severance tax refunds for a period prior to the
Effective Time and, for a period of two years from the Closing
Date, all other claims, rights, and causes of action against
third parties of or pertaining to the Assets that relate to the
period prior to the Effective Time for which an adjustment to the
Purchase Price has not been made under Section 2.02(a)(1-10);
provided, however, that Seller shall not retain any claims,
demands or causes of actions relating to a period prior to the
Closing Date that relates to any confidentiality agreements
(express or implied), non-competition agreements (express or
implied) or claims of unlawful trade practices or improper or
unauthorized use of trade secrets, confidential information, or
proprietary data, or the misappropriation thereof, of Seller or
of any Affiliate against third parties, including present or
former officers, employees, agents or contractors of Seller or
any Affiliate, that affect the Assets or Seller's, Buyer's or any
Affiliate's interest in the Assets.
1.03 - EFFECTIVE TIME. The purchase and sale of the Assets shall be
effective as of 11:59 p.m. Central Standard Time on September 30, 1997 (herein
called the "Effective Time").
ARTICLE II
PURCHASE PRICE
2.01 - PURCHASE PRICE. The purchase price (the "Purchase Price") payable by
Buyer for the Properties shall be payable as follows:
(a) Cash. $50,000,000 cash at the Closing, inclusive of cash payments
represented by transfer of the Earnest Money to Seller.
(b) Parent's Stock. 1,750,000 newly issued shares of common stock of
Buyer's parent, Pioneer Natural Resources Company ("Parent") (the
"Parent's Stock") (par value $.01 per share).
<PAGE> 5
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2.02 - ADJUSTMENTS TO PURCHASE PRICE. The Purchase Price shall be adjusted
as follows:
(a) The Purchase Price shall be adjusted upward by the following;
provided, however Seller shall comply with Section 4.01(b) of
this Agreement:
(1) the value of all merchantable, allowable oil in storage at
the Effective Time, above the pipeline connection, which is
sold and which is credited to the Assets and paid to Buyer,
such value to be the actual price received less taxes and
applicable lease burdens deducted by the purchaser or paid
by Buyer, which adjustment, if any, shall be governed by
Section 8.01 hereunder on Post-Closing Adjustment;
(2) the amount of all verifiable expenditures incurred in the
normal course of business (including, without limitation,
expenses under applicable operating agreements or other
similar arrangements or agreements and, in the absence of
such agreements, such expenses of the sort customarily
billed thereunder) paid by Seller or an Affiliate of Seller
in connection with the operation of the Assets in accordance
with this Agreement for work actually performed subsequent
to the Effective Time and prior to the Closing Date (defined
below);
(3) an amount equal to all prepaid expenses attributable to the
Assets that are paid by Seller or any Affiliate of Seller
prior to the Closing Date that inure to the benefit of Buyer
and that are, in accordance with generally accepted
accounting principles, attributable to the period after the
Effective Time, including without limitation, prepaid ad
valorem, property, production, severance and similar taxes
(but not including income, franchise or other similar entity
level taxes) based upon or measured by the ownership of
property or the production of hydrocarbons or the receipt of
proceeds therefrom;
(4) all costs incurred by Seller or an Affiliate of Seller after
the Effective Time in acquiring or maintaining any oil and
gas lease or other oil and gas interest conveyed to Buyer
pursuant to the terms of this Agreement, including without
limitation all brokers cost and expense, bonus and delay
rental;
(5) an amount equal to $6,295, representing the value of the
volume of gas less than its ownership percentage which
Seller has produced from any of the Wells ("Under
Production");
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(6) all costs incurred prior to the Effective Time in connection
with the drilling of the Braveheart well and the Wood well;
(7) the amount of $3,800 per month (pro rated for partial
months) for the period between the Effective Time and the
Closing Date (defined below) as reimbursement to Seller for
costs incurred in operating and managing the Assets after
the Effective Time;
(8) if and only if the Closing Date is subsequent to December
19, 1997, interest on the Purchase Price for the period from
the Effective Time to the Closing Date, calculated at a rate
per annum equal to the lesser of (A) the highest rate
allowed by law, or (B) the prime rate of Texas Commerce Bank
N.A., on the Closing Date; provided, however, that this
Section 2.02(a)(8) shall not apply if Seller's obligation to
close as set forth in Section 6.02 has not been satisfied as
of December 19, 1997 or if the Closing Date is extended by
Seller according to Section 5.04(c);
(9) the value of any severance tax refunds received by Buyer
prior to Closing and attributable to the Assets prior to the
Effective Time; and
(10) any other amount agreed upon by Seller and Buyer.
(b) The Purchase Price shall be adjusted downward by the following:
(1) proceeds received by Seller from the sale of oil, gas or
other hydrocarbons attributable to the Assets and which are
produced after the Effective Time;
(2) an amount equal to all unpaid ad valorem, property,
production, severance and similar taxes and assessments (but
not including income, franchise or other similar entity
level taxes) based upon or measured by the ownership of
property or the production of hydrocarbons or the receipt of
proceeds therefrom accruing to the Assets attributable to
the period prior to the Effective Time, which amount shall
be computed in accordance with generally accepted accounting
principles;
(3) an amount equal to the aggregate sum of the Defect Value
(defined below) of all Defective Interests (defined below)
determined to exist in accordance with Article V hereof (if
the total of Defective Interests exceeds $100,000), less
(ii) an amount equal to the sum of all Upward Adjustments
(as defined in
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Section 5.07 hereof), but Upward Adjustments shall not
exceed the Defect Value;
(4) an amount equal to any costs incurred prior to the Closing
Date associated with the drilling or completion of the
Johnston well paid by Buyer;
(5) an amount equal to $241,822, representing the value of the
Over Production liability of Seller as set forth on Exhibit
J" hereto; and
(6) any other amount agreed upon by Seller and Buyer.
2.03 - ALLOCATION OF PURCHASE PRICE. Seller and Buyer agree that the
Purchase Price will be allocated among the Assets as set forth on Exhibits "G"
attached hereto and made a part hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 - REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants the following:
(a) Seller is a duly organized, validly existing limited partnership
organized and in good standing under the laws of its state of
formation and is qualified to do business in the State of Texas.
Seller has heretofore delivered to Buyer true, correct and
complete copies of its partnership agreement and all other
formation documents, certificates and governing rules.
(b) Seller has all requisite power and authority, partnership,
corporate and otherwise, to carry on its business as presently
conducted, to enter into the Agreement, to sell and convey, free
and clear of all adverse claims, the Assets on the terms
described in the Agreement and to perform its other obligations
under the Agreement.
(c) The execution and delivery of this Agreement and the acquisition
of the Parent's Stock have been, and the execution and delivery
of all certificates, documents and instruments required to be
executed and delivered by Seller at the Closing, and the
consummation of the transactions contemplated hereby as of the
Effective Time shall have been duly authorized by all necessary
partnership and corporate action
<PAGE> 8
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on the part of the Seller and its Affiliates, and no further
authorization is required by any law, statute, regulation, court
order or judgment applicable to Seller and, where applicable, to
its Affiliates. This Agreement constitutes a legal, valid and
binding obligation of Seller and, where applicable, Seller shall
cause this Agreement to constitute a legal, valid and binding
obligation of the Affiliates enforceable in accordance with its
terms, subject however, to the effects of bankruptcy, insolvency,
reorganization, moratorium and similar laws, as well as to
principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(d) The execution and delivery of the Agreement and the consummation
of the transactions contemplated hereby will not (i) violate, or
be in conflict with, any provisions of Seller's agreement of
limited partnership or other governing documents, (ii) constitute
a material breach of, or any event of default under, any contract
or agreement to which Seller is a party or by which it or its
assets are bound, or constitute the happening of an event or
condition upon which any other party to such a contract or
agreement may exercise any right or option which will materially
adversely affect any of the Assets (except any provision as to
(A) required consents to transfer and related provisions, (B)
maintenance of uniform interests provisions and (C) any other
third-party approvals contemplated herein), (iii) violate any
judgment, decree, order, statute, rule or regulation applicable
to Seller, (iv) result in any material liability to Buyer under
the terms of any contracts or agreements, except those
obligations related to the Assets after the Effective Time and
assumed by Buyer pursuant to the terms of the Agreement, (v)
conflict with, result in a breach of, constitute a default under
(without regard to requirements of notice or the lapse of time or
both), accelerate or permit the acceleration of the performance
required by, or require any consent, authorization or approval
under, (I) any mortgage, indenture, loan, credit agreement or
other agreement or instrument evidencing indebtedness for
borrowed money to which Seller is a party or by which Seller is
bound and to which any of the Assets is subject or (II) any
lease, license, contract or other agreement or instrument to
which Seller is a party or by which it is bound and to which any
of the Assets is subject; or (vi) result in the creation or
imposition of a lien, charge or other encumbrance upon the
Assets.
(e) Except as shown on Exhibit "H" attached hereto and made a part
hereof, no suit, action or other proceeding is pending before any
court or governmental agency as of the date of this Agreement to
which Seller or any Affiliate is a party and which relates to the
Assets and to the knowledge of Seller no such suit, action or
other proceeding is
<PAGE> 9
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threatened. Seller shall promptly notify Buyer of any such suit
or proceeding arising or to which Seller has knowledge prior to
Closing. The litigation and proceedings listed on Exhibit "H"
will not result in substantial impairment or loss of Seller's
title to any material part of the Assets or that might materially
hinder or impede the operation of the Assets or the ability of
Seller to perform its obligations hereunder.
(f) During the period the Seller or any of Seller's Affiliates has
owned the Assets (the "Ownership Period") to the knowledge of
Seller all royalties (other than royalties held in suspense),
rentals and other payments due under the Producing Leases and
Other Leases have been properly and timely paid and no notices
have been received by Seller or any of Seller's Affiliates of any
claim to the contrary.
(g) During the Ownership Period all ad valorem, property, production,
severance and similar taxes and assessments based on or measured
by the ownership of property or the production of hydrocarbons or
the receipt of proceeds therefrom on the Assets have been
properly paid.
(h) Seller has incurred no liability, contingent or otherwise, for
brokers' or finders' fees relating to the transactions
contemplated by this Agreement for which Buyer shall have any
responsibility whatsoever.
(i) The only material surface leases, farmin agreements, farmout
agreements, exploration agreements, bottom hole agreements,
acreage contribution agreements, operating agreements, unit
agreements, processing agreements, options, leases of equipment
or facilities, and other contracts, agreements and rights that
cover or affect the Assets, in whole or in part, are those
Contracts described on Exhibit "D" attached hereto and made a
part hereof, and all of such Contracts listed on Exhibit "D" are
valid, binding and enforceable according to their respective
terms, Seller is not in breach or default with respect thereto,
all material payments due thereunder have been paid by Seller, no
other party to such Contracts is in breach or default thereunder,
and no party to the Contract has taken action or threatened to
terminate, cancel, or rescind the Contracts or any portion
thereof.
(j) Seller is not a "foreign person" within the meaning of Section
1445 of the Internal Revenue Code of 1986, as amended.
(k) The Authorities for Expenditures (AFE's) set forth on Exhibit "I"
attached hereto constitute all of the material AFE's which have
been approved by Seller or other working interest owners
respecting operations to be conducted on the Assets after the
Effective Time.
<PAGE> 10
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(l) Except as shown on Exhibit "J" attached hereto, there is no
Take-or-Pay Liability, Under Production or Over Production
liability affecting the Assets.
(m) The seismic data made available to Buyer for its evaluation of
the Assets was derived from the 3-D Seismic Data to be
transferred to Buyer hereunder, Seller's 3-D Seismic Data covers
the lands identified within the highlighted areas on the plats
attached hereto as Exhibit "K," such seismic data is proprietary
and upon Closing shall be transferred to Buyer free from
restrictions respecting Buyer's use thereof, except as set forth
in the Contracts described on Exhibit "D" hereto.
(n) To the best of Seller's knowledge, the shaded area on the plat
attached hereto as Exhibit "L" identifies the areas in which
Seller's operations on the Producing Leases or Prospect Tracts
may be precluded or prohibited by coal or lignite mining
operations.
(o) Exhibit "M" attached hereto identifies all of the Other Leases
that contain primary terms expiring on or before December 31,
1998, except for such Other Leases presently held by production
or containing options to extend the primary term thereof beyond
December 31, 1998.
(p) The Contracts described on Exhibit "D" attached hereto contain
all, if any, Preference Rights affecting the Producing Leases and
the Other Leases.
(q) The Parent's Stock to be acquired by Seller hereunder is being
acquired for its own account for investment and with no intention
of distributing or reselling the Parent's Stock or any part
thereof or interest therein in any transaction which would be in
violation of the securities laws of the United States of America
or any state or any foreign country or jurisdiction.
(r) If Seller should decide to dispose of any of the Parent's Stock
to be purchased by it, Seller understands and agrees that it may
do so only pursuant to an effective registration statement under
the Securities Act of 1933, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated
thereunder (the "Securities Act"), or pursuant to an exemption
from registration under the Securities Act. In connection with
any offer, resale, pledge or other transfer (individually and
collectively, a "Transfer") of any Parent's Stock other than
pursuant to an effective registration statement, Parent may
require that the transferor of the Parent's Stock provide to
Parent an opinion of counsel, which opinion shall be reasonably
satisfactory in form and substance to
<PAGE> 11
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Parent, to the effect that such Transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and any state or
foreign securities laws. Seller agrees to the imprinting, so long
as appropriate, of substantially the following legends on
certificates representing the Parent's Stock:
THE SHARES OF COMMON STOCK (THE "SHARES") EVIDENCED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER AGREES THAT IT WILL NOT OFFER, RESELL, PLEDGE
OR OTHERWISE TRANSFER (INDIVIDUALLY AND COLLECTIVELY, A
"TRANSFER") THE SHARES EVIDENCED HEREBY, EXCEPT (A) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR
(B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT SUCH AS THE EXEMPTION SET FORTH IN RULE 144 UNDER
THE SECURITIES ACT (IF APPLICABLE). IF THE PROPOSED TRANSFER IS
TO BE MADE OTHER THAN PURSUANT TO CLAUSE (A) ABOVE, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE CORPORATION AND THE
TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR ANY STATE OR FOREIGN SECURITIES LAW.
The foregoing legend set forth above may be removed if and when
the Parent's Stock represented by such certificate is disposed of
pursuant to an effective registration statement under the
Securities Act or the opinion of counsel referred to above has
been provided to Parent.
(s) Seller agrees that Parent shall be entitled to make a notation on
its records and give instructions to any transfer agent for the
Parent's Stock in order to implement the restrictions on transfer
set forth in this Agreement.
(t) At the time Seller was offered the Parent's Stock, Seller was,
and as of the date hereof, Seller is, and at the Closing Date,
Seller will be, an "accredited investor" as defined in Rule
501(a) under the Securities Act,
<PAGE> 12
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and has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating Parent
and an investment in the Parent's Stock, and is able to bear the
economic risk of such investment.
(u) Seller acknowledges that it has received a copy of Parent's
Preliminary Proxy Statement with respect to an arrangement
involving Parent and Chauvco Resources Ltd., and that it has been
afforded: (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives
of Buyer and Parent concerning the terms and conditions of the
offering of the Parent's Stock and the merits and risks of
investing in the Parent's Stock; (ii) access to information about
Parent, Parent's financial condition, pro forma results of
operations, business properties, management and prospects
sufficient to enable it to evaluate its investment in the
Parent's Stock; and (iii) the opportunity to obtain such
additional information which Parent possesses or can acquire
without unreasonable effort or expense that is necessary to
verify the accuracy and completeness of such information.
(v) Seller also understands and acknowledges that the Parent's Stock
is being offered and sold without registration under the
Securities Act in a transaction that is exempt from the
registration provisions of the Securities Act and the
availability of such exemption depends in part on, and that Buyer
and Parent (and, for purposes of the opinion to be delivered to
Seller pursuant to Section 7.02(n) hereof, counsel to Buyer and
Parent) will rely upon, the accuracy and truthfulness of the
foregoing representations and Seller hereby consents to such
reliance.
(w) To the knowledge of Seller, all material valid laws, regulations
and orders of all governmental agencies having jurisdiction over
the Assets have been and shall continue to be complied with until
the Closing. To the best of Seller's knowledge, all material
necessary permits from governmental agencies having jurisdiction
in connection with the Assets have been obtained and have been
timely, properly and accurately made and will continue to be
timely, properly and accurately made through Closing. To the
knowledge of Seller, all plugged wells located on the Assets have
been properly plugged and there are no abandoned unplugged
wellbores located on the Assets which good oil field practice
would required plugging. Seller has not been named or threatened
with being named a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended. Except as disclosed on Exhibit "N"
hereto, Seller has not caused or allowed the generation,
treatment, storage, disposal or release of hazardous substances
on the Assets except in accordance with local,
<PAGE> 13
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state, and federal statutes, ordinances, rules and regulations.
Except as disclosed on Exhibit "N" hereto, to the best of
Seller's knowledge no hazardous substance has ever been disposed
of on the Assets or from the Assets to locations offsite of the
Assets except in accordance with local, state, and federal
statues, ordinances, rules and regulations.
(x) Seller is not in default under, and no condition exists that with
notice or lapse of time or both would constitute a default under
(i) any order, judgment or decree of any court, commission,
board, agency or other governmental body, or (ii) any law,
statute, ordinance, decree, order, rule or regulation of any
governmental authority.
(y) There are no properties comprising the Assets with respect to
which (i) deliveries of natural gas dedicated to interstate
commerce have been terminated or diverted therefrom without there
having been obtained appropriate abandonment orders or other
required regulatory approvals, or (ii) Seller is not receiving on
a current basis the payments required under the terms of the
Contracts. During the Ownership Period, no purchaser of natural
gas under the Contracts has (i) curtailed (other than seasonal
curtailment) its takes of natural gas, or (ii) given notice
(either written or verbal) that it desires to amend any of the
Contracts with respect to price or quantity of deliveries under
take-or-pay provisions, to such extent that any such action may
materially affect the economic value of the reserves attributable
to the Assets affected by such action.
(z) Except for Permitted Encumbrances, neither Seller nor any
Affiliate of Seller has encumbered any of the Assets with any
deed of trust, security interest, indenture, mortgage or trust
agreement.
3.02 - REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller that:
(a) Buyer is a duly organized, validly existing corporation organized
and in good standing under the laws of the State of its
incorporation and is qualified to do business in the State of
Texas.
(b) Buyer has all requisite power and authority, corporate and
otherwise, to carry on its business as presently conducted, to
enter into the Agreement, and to perform its obligations under
the Agreement.
(c) The execution and delivery of this Agreement has been, and the
execution and delivery of all certificates, documents and
instruments required to be executed and delivered by Buyer at
Closing, and the
<PAGE> 14
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consummation of the transactions contemplated hereby as of the
Effective Time shall have been duly authorized by all necessary
corporate action on the part of the Buyer and no further
authorization is required by any law, statute, regulation, court
order or judgment applicable to Buyer. This Agreement constitutes
a legal, valid and binding obligation of Buyer enforceable in
accordance with its terms, subject however, to the effects of
bankruptcy, insolvency, reorganization, moratorium and similar
laws, as well as to principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
(d) The execution and delivery of the Agreement and the consummation
of the transactions contemplated hereby will not (i) violate, or
be in conflict with, any provisions of Buyer's articles of
incorporation, bylaws or governing documents, (ii) constitute a
material breach of, or any event of default under, any contract
or agreement to which Buyer is a party or by which it or its
assets are bound, or constitute the happening of an event or
condition upon which any other party to such a contract or
agreement may exercise any right or option which will materially
adversely affect the ability of Buyer to perform its obligations
hereunder, (iii) assuming expiration or termination of the
applicable waiting period under the HSR Act, violate any
judgment, decree, order, statute, rule or regulation applicable
to Buyer, or (iv) result in any material liability to Seller
under the terms of any contracts or agreements to which Buyer is
a party.
(e) No suit, action or other proceeding is pending before any court
or governmental agency as of the date of this Agreement to which
Buyer is a party and which might materially hinder or impede the
ability of Buyer to perform its obligations hereunder. Buyer
shall promptly notify Seller of any such proceeding arising prior
to the Closing with respect to which Buyer receives actual
notice.
(f) Buyer has incurred no liability, contingent or otherwise, for
brokers' or finders' fees relating to the transactions
contemplated by this Agreement for which Seller shall have any
responsibility whatsoever.
(g) Buyer is a knowledgeable purchaser, owner and operator of oil and
gas properties, has the ability to evaluate (and in fact has
evaluated) the Assets for purchase, and is acquiring the Assets
for its own account and not with the intent to make a
distribution thereof within the meaning of the Securities Act of
1933 (and the rules and regulations pertaining thereto) or a
distribution thereof in violation of any other applicable
securities laws.
<PAGE> 15
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(h) In entering into this Agreement, Buyer has relied solely on the
express representations warranties and covenants of Sellers in
this Agreement, its independent investigation of, and judgment
with respect to, the Assets and the advice of its own legal, tax,
economic, environmental, engineering, geological and geophysical
advisors and not on any comments or statements of Seller or any
representatives of, or consultants or advisors engaged by Seller.
(i) The Parent's Stock to be issued by Parent to Seller at Closing
has been duly authorized for such issuance and, when issued and
delivered by Parent in accordance with the provisions of this
Agreement, will be validly issued, fully paid, and nonassessable.
Once registered in accordance with the provisions of Section 8.10
hereof, the Parent's Stock shall be freely tradable by Seller
according to Section 8.10 hereof. The issuance of the Parent's
Stock under this Agreement is not subject to any preemptive or
similar rights.
(j) Parent is current in its obligations to file all periodic reports
and proxy statements with the Securities and Exchange Commission
required to be filed under the Securities Exchange Act of 1934,
as amended, and applicable rules and regulations promulgated
thereunder. Parent's Annual Report on Form-10K for the year ended
December 31, 1996 and all subsequent filings (the "SEC
Documents") do not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. Since
December 31, 1996, there have been no material developments,
transactions or events affecting Parent (other than developments
or events affecting the oil and gas exploration and production
industry generally) other than as disclosed by Parent in the SEC
Documents or to Seller in writing. There are no material
liabilities of Parent (contingent or otherwise), other than as
disclosed in the SEC Documents and the final statements included
therein.
(k) The authorized and outstanding capital stock of Parent as of
September 30, 1997 consists solely of (a) 500,000,000 shares of
Parent's common stock par value $.01 per share, of which
74,449,446 shares were duly authorized, validly issued and
outstanding, fully paid and non-assessable, and (b) 100,000,000
shares of preferred stock, par value $.01 per share.
(l) To Parent's knowledge, there are no facts or circumstances that
exist as of the Closing Date that would prevent or preclude
Parent from complying with its obligations under Section 8.10
hereof.
<PAGE> 16
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ARTICLE IV
COVENANTS
4.01 - COVENANTS OF SELLER. Seller covenants and agrees with Buyer that:
(a) Commencing with the execution date of this Agreement, Seller will
make available to Buyer for examination at Seller's office in
Fort Worth, Texas, all title and other information relating to
the Assets insofar as the same are in Seller's possession and
will cooperate with Buyer in Buyer's efforts to obtain, at
Buyer's expense, such additional information relating to the
Assets as Buyer may reasonably desire, to the extent in each case
that Seller may do so without violating legal constraints or any
obligation of confidence or other contractual commitment of
Seller to a third party. Such information shall include:
(1) Title opinions, runsheets, abstracts, mineral take-offs,
ownership reports, and title status reports pertaining to
the Assets;
(2) Copies of the Producing Leases, Other Leases, instruments
evidencing the Added Interests, prior conveyances of the
Assets, unitization, pooling and operating agreements,
division and transfer orders, mortgages, deeds of trust,
security agreements, chattel mortgages, financing statements
and other encumbrances not discharged and affecting the
title to or the value of the Assets and all other
information contained in the land files of Seller and
relating to the Assets;
(3) Records relating to the payment of rentals, royalties and
other payments due under the Producing Leases, Other Leases
and Added Interests;
(4) Records relating to the payment of ad valorem, property,
production, severance, excise and similar taxes and
assessments based on or measured by the ownership of
property or the production of hydrocarbons or the receipt of
proceeds therefrom on the Assets;
(5) Ownership maps, surveys, logs and seismic information
relating to the Assets;
(6) Copies of all purchase, sale, processing and transportation
agreements relating to the Assets;
<PAGE> 17
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(7) Copies of all agreements including the leases, permits,
easements, licenses and orders relating to the Assets;
(8) Production and operational records relating to the Assets,
including filings made with regulatory agencies;
(9) Inventories of personal property and fixtures included in
the Assets;
(10) Accounting records, and engineering and technical data, and
geological and geophysical data, relating to the Assets; and
(11) Any other files, data, records and materials in Seller's
possession or custody which relate to or pertain to the
Assets.
Seller shall permit Buyer, at Buyer's expense, to inspect and
photocopy such information and records at any reasonable time
during the term of this Agreement but only to the extent, in each
case, that Seller may do so without violating any obligation of
confidence or contractual commitment to a third party. Seller
shall not be obligated to acquire any other or additional updated
abstracts, title opinions or additional title information not
otherwise described above, but shall cooperate with Buyer in
Buyer's efforts to obtain, at Buyer's expense, such additional
title information as Buyer may reasonably deem prudent.
(b) From the date of this Agreement until Closing, Seller (i) will
cause the Assets to be operated and maintained in a good and
workmanlike manner consistent with prior practices, and will pay
or cause to be paid all costs and expenses in connection
therewith, (ii) will not abandon any Assets, (iii) will maintain
insurance now in force with respect to the Assets, (iv) will
comply with all the rules, regulations and orders of the Texas
Railroad Commission which are applicable to Seller and the
Assets, and will timely, properly and accurately make all reports
required to be filed with the Texas Railroad Commission, (v) will
perform and comply with all of the material covenants and
conditions contained in the agreements relating to the Assets,
and (vi) will pay all taxes and assessments with respect to the
Assets which become due and payable prior to the Closing Date;
provided however, in the absence of Buyer's written consent, from
the date of this Agreement until the Closing, Seller shall not
conduct or authorize any operation on the Assets requiring
Authority for Expenditure (AFE) approval by working interest
owners under applicable operating agreements, or an expenditure
of $100,000.00 or more for the entire 100% of any single project
(except for emergency operations); provided, further, that Seller
is authorized to incur the expenditures set
<PAGE> 18
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forth on Exhibit "I" attached hereto without the prior consent of
Buyer. With regard to any single activity or matter other than
those specifically set forth above in this Section 4.01(b), the
expenditure of which by Seller is reasonably expected to exceed
$25,000, Seller shall consult with Buyer and consider Buyer's
comments and considerations regarding such activities or matters
before undertaking such activities or matters.
(c) Without the prior written consent of Buyer, from the date of this
Agreement until Closing, Seller shall not enter into any new
agreements or commitments with respect to the Assets, will not
modify or terminate any of the agreements relating to the Assets,
shall not encumber, sell, transfer, assign, convey, or otherwise
dispose of any of the Assets other than personal property which
is replaced by equivalent property or consumed in the operation
of the Assets, and will not voluntarily compromise any amounts
payable to Seller due to any casualty loss or any pending or
threatened taking related to the Assets; provided, however, that
prior to Closing Seller or any Affiliate of Seller may execute
and deliver to applicable third parties assignments of interests
in the Producing Leases and Other Leases that are required under
the terms of the Contracts as described on Exhibit "D."
(d) Seller shall use all reasonable efforts to maintain its
partnership status and to assure that as of the Closing it shall
not be under any material corporate, legal or contractual
restriction that would prohibit or delay the timely consummation
of this transaction.
(e) Seller shall permit Buyer's authorized representatives to consult
with Seller and/or such third-party operator's agents and
employees during reasonable business hours and to conduct, at
Buyer's sole risk and expense, on-site inspections, environmental
assessments, reasonable tests and inventories of the Assets as
provided in Section 5.03 hereof.
(f) During the period from the date of this Agreement to the Closing
Date, Seller shall use its best efforts to maintain its
relationships with all suppliers, customers and others having
business relationships with Seller with respect to the Assets so
that such relationships will be preserved for Buyer on and after
the Closing Date.
(g) Seller shall give Buyer notice of any litigation initiated
against Seller, of which Seller has notice, and which relates to
the Assets or the ability of Seller to proceed to Closing.
(h) Promptly after execution of this Agreement, Seller shall initiate
the procedures necessary to comply with the terms of any
Preference Rights
<PAGE> 19
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or Transfer Requirement. As used herein the term "Preference
Rights" means any preferential right to purchase, right of first
refusal, or other agreement which grants to any person the right
to acquire any of the Assets or an interest in any of the Assets
as a result of or in connection with (i) the sale, assignment,
encumbrance or other transfer of any of the Assets or any
interest therein or portion thereof, or (ii) the execution or
delivery of this Agreement or the consummation or performance of
the terms and conditions contemplated by this agreement. As used
herein the term "Transfer Requirement" means any consent,
approval, waiver, authorization, filing or notification with,
from or to any person which must be obtained made or complied
with in connection with the transactions contemplated by this
Agreement in order for (1) such transactions to be effective, or
(2) to prevent any termination of any interest in any of the
Assets; provided however, the term "Transfer Requirements" shall
not include any required consents or approvals of any
governmental agency in connection with the assignment of any of
the Assets if such consents or approvals are customarily obtained
after closings of transactions of this nature.
(i) From the date of this Agreement until Closing, Seller shall not
create any Title Defect against any of the Assets.
(j) Prior to Closing, Seller, at Buyer's expense, shall cooperate
with and assist Buyer in enforcing all confidentiality
agreements, non-competition agreements and violations of unlawful
trade practices, whether contractual or otherwise, as well as
improper or unauthorized use of trade secrets, confidential
information, or proprietary data, or the misappropriation thereof
of Seller or of any Affiliate, against third parties (including
present or former officers, employees, agents and contractors of
Seller or an Affiliate) that adversely affect the Assets or
Buyer's, Seller's or any Affiliate's interest therein, including,
if requested by Buyer, the instigation of legal proceedings for
such purposes if Seller believes in its discretion that such
proceedings are meritorious and can be asserted in good faith.
(k) Prior to Closing, Seller shall use its best efforts to obtain
renewals and extensions to, or new leases covering, those
Producing Leases or Other Leases described on Exhibit "M"
attached hereto that contain primary terms expiring before July
1, 1998, and any renewals and extensions to, or new leases
obtained by Seller shall be deemed Producing Leases or Other
Leases (as the case may be) and conveyed to Buyer at Closing.
<PAGE> 20
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4.02 - COVENANTS OF BUYER. Buyer covenants and agrees with Seller that:
(a) Buyer shall use all reasonable efforts to maintain its corporate
status and to assure that as of the Closing, it will not be under
any material corporate, legal or contractual restriction that
would prohibit or delay the timely consummation of this
transaction.
(b) Prior to Closing Buyer shall exercise all reasonable diligence in
safeguarding and maintaining secure all engineering, geological
and geophysical data, reports and maps, accounting records, and
all other confidential data or information relating to the Assets
in the possession of Buyer. If the transaction contemplated by
this Agreement is not consummated, Buyer shall return to Seller
all information which Seller has delivered to Buyer which relate
to the Assets.
(c) Buyer shall give Seller notice of any litigation initiated
against Buyer, of which Buyer has notice, and which relates to
the Assets or the ability of Buyer to proceed to Closing.
ARTICLE V
TITLE MATTERS AND DEFECTIVE INTERESTS
5.01 - DEFENSIBLE TITLE, PERMITTED ENCUMBRANCES AND TITLE DEFECT.
(a) As used herein, the term "Defensible Title" shall have the
following meaning:
(1) With respect to the Producing Leases the term "Defensible
Title" shall mean such title, subject to the Permitted
Encumbrances to the extent that same does not constitute an
Interest Reduction, which:
(A) is free and clear of liens or encumbrances and is
otherwise only subject to contractually binding
arrangements which are contained in the Contracts
described on Exhibit "D";
(B) entitles Seller to receive and to deliver to Buyer at
Closing not less than the "Revenue Interest" set forth
on Exhibit "B" hereto for each of the Wells of all oil,
gas and associated liquid and gaseous hydrocarbons
produced,
<PAGE> 21
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saved and marketed from such Well, after deducting all
royalty, overriding royalty and other leasehold
burdens;
(C) obligates Seller to bear costs and expenses relating to
the maintenance, development and operation of each of
the Wells in an amount not greater than the "Working
Interest" set forth on Exhibit "B" hereto with respect
to each of the Wells, unless there is a corresponding
and proportionately equal increase in the Revenue
Interest attributable to such Well; and
(D) as to that portion of the Producing Leases that is not
included in any pooled unit, is not subject to any
royalties, overriding royalties, net profits interests,
production payments or any similar burdens except for
the lessor's royalties reserved in the Producing Leases
and the other burdens expressly contained in the
Contracts described on Exhibit "D".
(1) With respect to the Other Leases and such Producing Leases
that include lands within any Prospect Tract, the term
"Defensible Title" shall mean that in each of the Prospect
Tracts identified on Exhibit "O" hereto (A) Seller is
entitled to receive and shall deliver to Buyer at Closing
the Working Interest shown for such Prospect Tract on
Exhibit "O" hereto under the heading "Seller's Net W.I. in
Tract", (B) Seller is entitled to receive and shall deliver
to Buyer at Closing the Revenue Interest in each Prospect
Tract shown for each such Prospect Tract on Exhibit "O"
attached hereto and made a part hereof under the heading
"Seller's N.R.I. in Tract," and (C) Seller's title, subject
to the Permitted Encumbrances, in all material respects, is
free and clear of liens or encumbrances, and is otherwise
only subject to contractually binding arrangements contained
in the Contracts described on Exhibit "D".
(2) With respect to all lands covered by the Other Leases and
not included within a Prospect Tract, Defensible Title shall
mean that (A) Seller owns and shall deliver to Buyer at
Closing the number of "Net Leasehold Acres" or "Net Acres,"
as the case may be, shown for each such Other Lease on
Exhibit "O" attached hereto and made a part hereof, (B)
except for the lessor's royalties reserved in such Other
Leases, such Other Leases as to such lands are not subject
to any overriding royalties, net profits interests,
production payments or any similar burdens, unless expressly
<PAGE> 22
-22-
contained in the Contracts described on Exhibit "D," and (C)
Seller's title, subject to the Permitted Encumbrances, is
free and clear of liens and encumbrances and is otherwise
subject only to contractually binding arrangements which are
contained in the Contracts described on Exhibit "D."
(3) With respect to the Contracts, Defensible Title means that
subject to the Permitted Encumbrances (A) either (i) Seller
was an original signatory to the contract, or (ii) Seller
has acquired the rights of an original signatory to the
contract through a chain of one or more assignments, and (B)
the rights of Seller under the Contracts are free and clear
of mortgages, liens, security interests, pledges, charges,
encumbrances, claims, limitations, irregularities, burdens
or defects, and is otherwise only subject to their terms.
(4) The term "Prospect Tract" as used herein shall mean each
separate tract of land identified by the areas colored in
blue, red, yellow, green, purple, gray, brown, orange, pink,
and other colors on each of the plats attached hereto on
Exhibit "O," with each such "Prospect Tract" being
designated by the "Tract Number" and "Lease Number" set
forth in the schedule of Seller's ownership interest for
each Anomaly Area on Exhibit "O" attached hereto.
(b) The term "Permitted Encumbrances" as used herein shall mean:
(1) lessors' royalties, overriding royalties and other burdens,
reversionary interests and similar burdens if the net
cumulative effect of such burdens does not operate at
Closing or thereafter to reduce (i) the Revenue Interest of
any of the Wells to less than the Revenue Interest for such
Well as set forth in Exhibit "B" hereto, (ii) the Working
Interest of any of the Wells to less than the Working
Interest for such Well set forth in Exhibit "B" without a
corresponding and proportionate reduction in the Revenue
Interest in such Well, (iii) the Net Revenue Interest in or
respecting each Prospect Tract to less than that shown on
Exhibit "O" attached hereto, or (iv) the Working Interest in
or respecting each Prospect Tract to less than the Working
Interest for such Prospect Tract as shown on Exhibit "O"
attached hereto without a corresponding and proportionate
reduction in the Revenue Interest for such Prospect Tract
(any of the reductions in interest set forth above is herein
called an "Interest Reduction");
<PAGE> 23
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(2) Preference Rights and Transfer Requirements, including
consents to assign, with respect to which prior to Closing
(i) waivers or consents are obtained from the appropriate
parties, (ii) the prescribed time period for asserting or
exercising such rights has expired without an exercise of
such rights, or (iii) arrangements can be made by Buyer or
Seller to allow Buyer to receive substantially the same
economic benefit as if all such waivers and consents had
been obtained;
(3) to the extent same does not cause an Interest Reduction,
liens for taxes or assessments by a governmental body of
competent jurisdiction not yet due or not yet delinquent or,
if delinquent, that are being contested in good faith in the
normal course of business;
(4) all inchoate liens and liens of operators under existing
operating agreements identified in Exhibit "D" relating to
obligations not yet due or pursuant to which Seller is not
in default that are not such as to interfere materially with
the operation, value or use of the particular Asset affected
by such lien;
(5) all rights to consent by, required notices to, filings with,
or other actions by governmental bodies of competent
jurisdiction in connection with the sale or conveyance of
the Assets, if same are customarily obtained subsequent to
the transfer of title;
(6) to the extent same does not cause an Interest Reduction, the
terms and conditions of the Producing Leases, the Other
Leases, the instruments of conveyance evidencing the Added
Interests, and the Contracts set forth in Exhibit "D";
(7) to the extent same does not cause an Interest Reduction, if
applicable, existing rights of re-assignments in the event
of intended release or surrender of an interest to the
extent the same are contained in the Contracts set forth in
Exhibit "D";
(8) to the extent same does not cause an Interest Reduction,
easements, rights-of-way, servitudes, permits, surface
leases and other rights in respect of surface operations,
pipelines, grazing, logging, canals, ditches, reservoirs or
the like; and easements for streets, alleys, highways,
pipelines, telephone lines, power lines, railways and other
easements and rights-of-way, on, over or in respect of any
of the Assets to the extent such are of record as of the
Effective Time;
<PAGE> 24
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(9) to the extent same does not cause an Interest Reduction,
rights reserved to or vested in any municipality or
governmental, statutory or public authority of competent
jurisdiction to control or regulate any of the Assets in any
manner, and all applicable laws, rules and orders of
governmental authority of competent jurisdiction to the
extent such do not prevent reasonable use by Buyer of the
Assets for the purposes herein intended;
(10) to the extent same does not cause an Interest Reduction, the
lack of a recordable assignment conveying to Seller or
American Cometra, Inc., its interest in the Producing Leases
for the Watson No. 2 well;
(11) top leases acquired by third parties which (i) are not
effective until the termination of an oil and gas lease
owned by Seller, and (ii) do not preclude Seller's right to
extend any such oil and gas lease; and
(12) such Title Defects or other defects as Buyer has waived
pursuant to this Agreement.
(c) The term "Title Defect" as used herein shall mean any
encumbrance, encroachment, irregularity, defect in or objection
to Seller's title to the Assets (expressly excluding Permitted
Encumbrances), that alone or in combination with other defects
renders Seller's title to the Assets or any portion thereof less
than Defensible Title.
5.02 - DEFECTIVE INTERESTS.
(a) As used herein the term "Defective Interest" shall mean:
(1) That portion of the Assets affected by a Title Defect;
(2) That portion of the Assets (a) that has a condition or that
contains substances or materials of environmental concern
which may result in a risk of third party tort claims or
action by governmental authority, or (b) adversely affected
by noncompliance with the laws, rules, regulations,
ordinances or orders of any governmental agency or authority
having jurisdiction over any portion of the Assets,
including without limitation Environmental Laws (defined
below) as may be reasonably determined in accordance with
generally accepted industry practices and standards;
<PAGE> 25
-25-
(3) That portion of the Assets adversely affected by the default
of Seller, or any other party, under an obligation under the
Contracts (other than Title Defects affecting the status of
Seller's title to the Assets);
(4) That portion of the Assets with respect to which any
Preference Right is exercised unless Buyer elects to receive
the consideration received from the exercise of such
Preference Right;
(5) To the extent an adjustment to the Purchase Price has not
been made according to Section 2.02(b)(5), that portion of
the Assets with respect to which (i) Seller is obligated by
virtue of any pre-payment arrangements under any contract
for the sale of hydrocarbons and containing a "take or pay"
or similar provision or a production payment or any other
arrangement to deliver hydrocarbons produced from the Assets
at some future time without then or thereafter receiving
full payment therefor ("Take-or-Pay Liability"), or (ii)
Seller has produced a share of gas in excess of its
ownership percentage and Seller is obligated to reduce its
share of production under a gas balancing agreement or
similar arrangement to allow under-produced parties to come
back into balance ("Over Production"). The volumes of
Take-or-Pay Liability and Over Production currently known to
Seller are described on Exhibit "I" attached hereto and made
a part hereof;
(6) That portion of the Equipment which has a defect, (resulting
from design, construction, wear or other reason) which will
prevent the continued operation of that portion of the
Equipment in accordance with prior practice;
(7) That portion of the Assets destroyed by fire or other
casualty, or with respect to which there is a taking or
threatened taking in condemnation or under the right of
eminent domain; and
(8) That portion of the Assets affected by any suit, action or
other proceeding before any court or government agency that
would result in a material loss or impairment of Seller's
title to any portion of the Assets, or a portion of the
value thereof, including but not limited to suits, actions
or other proceedings described on Exhibit "H" hereto.
(b) As used herein the term "Defect Value" shall mean:
(1) for Defective Interests under Section 5.02(a)(1) or (a)(4):
<PAGE> 26
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(i) with respect to a Title Defect affecting an interest in
a Well, the Defect Value shall be the product of the
Allocated Value for the Well affected by the Defective
Interest as set forth on Exhibit "G" times the interest
in the Well that is affected by the Defective Interest;
(ii) with respect to a Title Defect on a Prospect Tract
(whether such Prospect Tract includes part of a
Producing Lease or includes part of an Other Lease) the
Defect Value shall be as follows:
(A) to the extent the Title Defect relates to that
part of a Prospect Tract that lies within an
Anomaly Area (defined below) and the Title
Defect is not a Non-Value Defect (defined below)
the Defect Value for such Title Defect shall be
calculated according to the formula provided
in Section 5.02(b)(5) for the type of Title
Defect being valued;
(B) to the extent the Title Defect relates to an
interest in an Anomaly Area and the Title Defect
is a Non-Value Defect the Defect Value shall be
the value, at $1,000 per acre per "Seller's Net
Acres in Tract" as shown for that Prospect Tract
on Exhibit "O" hereto for such Anomaly Area,
of that interest in the Prospect Tract which is
affected by the Defective Interest;
(C) to the extent the Title Defect relates to an
interest outside an Anomaly Area the Defect
Value shall be the value, at three hundred
twenty dollars ($320) per acre per "Seller's Net
Acres in Tract" as shown for that Prospect
Tract on Exhibit "O" hereto for such Anomaly
Area, of the interest in the Prospect Tract which
is affected by the Defective Interest;
(D) as used herein the term "Anomaly Area" shall mean
the lands which lie within the area delineated
by the heavy red lines on the maps included within
Exhibit "O" attached hereto and
<PAGE> 27
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made a part hereof and designated as "Anomaly
Area" on Exhibit "O" hereto; and
(E) As used herein the term "Non-Value Defect" shall
mean a Title Defect affecting an interest within
an Anomaly Area, which, due to the location and
size of such Defective Interest will not prevent
Buyer from drilling any well it reasonably wishes
to drill on such Anomaly Area without reduction
as to such well in the total of "Seller's G.W.I.
in Anomaly" and the total of "Seller's N.R.I. in
Anomaly" to less than that shown on Exhibit "O"
hereto for such Anomaly Area (the "Represented
Interest"). If the Anomaly Area is of a size
sufficient to drill more than one well, then the
average of the working interests and the average
of the net revenue interests of the wells Buyer
could reasonably drill on the Anomaly Area shall
not be less than the Represented Interest for
such Anomaly Area. For purposes of this section,
it shall be deemed reasonable to drill one well
for each 160 acres in the Anomaly Area, with one
additional well for excess acreage, if over 80
acres;
(2) for Defective Interests under Section 5.02(a)(5), the Defect
Value shall be computed on the basis of the price received
by Seller; and
(3) for Defective Interests under Section 5.02(a)(2), the Defect
Value shall be computed on the basis of the cost of curing,
correcting and/or remediating such Defective Interest.
(4) for all other Defective Interests as to the Assets under
Section 5.02(a) which are not provided for above in Section
5.02(b)(1)- (3), the lesser of (i) the reduction in value of
the Asset(s) caused by a Defective Interest, or (ii) the
cost of curing, correcting and/or remediating such Defective
Interests.
(5) For purposes of this Agreement,
(i) If there is a Title Defect resulting in a decrease in
Working Interest in a Prospect Tract as set forth under
the heading "Seller's Net W.I. in Tract" as shown on
Exhibit "O" hereto (with a proportionate reduction in
"Seller's Net
<PAGE> 28
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N.R.I. in Tract" for such Prospect Tract as shown on
Exhibit "O" hereto), and the Title Defect is not a
Non-Value Defect, then it is the intent of the parties
hereto to calculate Defect Value by multiplying the
Allocated Value of the Anomaly Area affected by such
Title Defect as shown on Exhibit "G" hereto by (A) a
fraction the numerator of which is the gross number of
acres in the Anomaly Area affected by the Title Defect
as set forth under the heading "Acres in Tract" as
shown on Exhibit "O" hereto and the denominator of
which is the total of "Seller's Net Acres in Tract" in
such Anomaly Area, and (B) a fraction the numerator of
which is the "Seller's Net W.I. in Tract" actually
conveyed by the Seller in the affected acreage if
greater than zero and the denominator of which is the
"Seller's Net W.I. in Tract" as shown on Exhibit "O"
for the affected acreage on Exhibit "O" hereto. This
is expressed algebraically as follows:
<TABLE>
<S> <C> <C>
Allocated Value "Acres in Tract" affected by Title Defect "Seller's Net W.I. in Tract" delivered
of Anomaly X ---------------------------------------- X -------------------------------------
Total of "Seller's Net Acres in Tract" "Seller's Net W.I. in Tract"
</TABLE>
(ii) If there is a Title Defect resulting in a decrease in
Revenue Interest in a Prospect Tract as set forth under
the heading "Seller's Net N.R.I. in Tract" on Exhibit
"O" attached hereto (without a proportionate reduction
in "Seller's Net W.I. in Tract" as shown on Exhibit "O"
hereto), and the Title Defect is not a Non-Value
Defect, then it is the intent of the parties hereto to
calculate Defect Value by multiplying the Allocated
Value of the Anomaly Area affected by such Title Defect
as shown on Exhibit "G" hereto by (A) a fraction the
numerator of which is the gross number of acres in the
Anomaly Area affected by the Title Defect as set forth
under the heading "Acres in Tract" as shown on Exhibit
"O" hereto and the denominator of which is the total of
"Seller's Net Acres in Tract" in such Anomaly Area as
shown on Exhibit "O" hereto, and (B) a fraction the
numerator of which is the "Seller's Net N.R.I. in
Tract" actually conveyed by Seller in the affected
acreage if greater than zero and the denominator of
which is the "Seller's Net N.R.I. in Tract" as shown on
Exhibit "O" attached hereto for the affected acreage.
This is expressed algebraically as follows:
<PAGE> 29
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<TABLE>
<S> <C> <C>
Allocated Value "Acres in Tract" affected by Title Defect "Seller's Net N.R.I. in Tract" delivered
of Anomaly X ---------------------------------------- X -------------------------------------
Total of "Seller's Net Acres in Tract" "Seller's Net N.R.I. in Tract"
</TABLE>
(iii) If there is a Title Defect resulting in a decrease in
Working Interest in a Prospect Tract as set forth under
the heading "Seller's Net W.I. in Tract" as shown on
Exhibit "O" attached hereto (without a proportionate
reduction in "Seller's Net W.I. in Tract" as shown on
Exhibit "O" attached hereto), and the Title Defect is
not a Non-Value Defect, then it is the intent of the
parties hereto to calculate Defect Value by multiplying
the Allocated Value of the Anomaly Area affected by
Title Defect as shown on Exhibit "G" hereof by (A) a
fraction the numerator of which is the gross number of
acres in the Anomaly Area affected by the Title Defect
as set forth under the heading "Acres in Tract" as
shown on Exhibit "O" attached hereto and the
denominator of which is the total of "Seller's Net
Acres in Tract" in such Anomaly Area as shown on
Exhibit "O" attached hereto, and (B) a fraction the
numerator of which is the "Seller's Net W.I. in Tract"
actually conveyed by Seller in the affected acreage if
greater than zero and the denominator of which is the
"Seller's Net W.I. in Tract" as shown on Exhibit "O"
attached hereto for the affected acreage if greater
than zero, and (C) a fraction the numerator of which is
the "Seller's Net N.R.I. in Tract" as shown on Exhibit
"O" attached hereto for the affected acreage if greater
than zero and the denominator of which is the "Seller's
Net N.R.I. in Tract" actually conveyed by the Seller in
the affected acreage if greater than zero. This is
expressed algebraically as follows:
<TABLE>
<S> <C> <C>
Allocated Value "Acres in Tract" affected by Title Defect "Seller's Net W.I. in Tract" delivered
of Anomaly X ----------------------------------------- X --------------------------------------
Gross Acres in Anomaly "Seller's Net W.I. in Tract"
"Seller's Net N.R.I. in Tract"
X ---------------------------------------
"Seller's Net N.R.I. in Tract" delivered
</TABLE>
(iv) If, in determining the Defect Value according to any
formula set forth in Section 5.02(b)(5) above, the
denominator or numerator of any of the fractions in any
of such formula is zero, then such formula shall be
calculated as if such fraction is one (1).
<PAGE> 30
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5.03 - BUYER'S RIGHT OF INSPECTION. Seller grants Buyer and its duly
authorized representatives, contractors and subcontractors (collectively
"Representatives") the limited right of entry to the Assets for the purpose of,
inspecting the Assets in accordance with the terms of Section 4.01(e) hereof,
("Permitted Activities"), subject however, to the following conditions:
(a) Buyer shall notify Seller of its desire to enter the Assets to
conduct Permitted Activities at least 48 hours prior to such
entry.
(b) Upon receipt of such notice, Seller shall allow Buyer and its
Representatives to enter the Assets during normal business hours
to conduct Permitted Activities. The Permitted Activities of
Buyer and its Representatives shall not unreasonably interfere
with Seller's operations or business, and Buyer and its
Representatives shall not remain on the Assets subsequent to the
completion of their Permitted Activities.
(c) The Permitted Activities shall be conducted in accordance with
all applicable environmental and regulatory laws, rules and
regulations, and commonly accepted standards for conducting such
activities. Upon completion of its activity, Buyer and its
Representatives shall restore (as far as reasonably possible) the
Property to its condition existing as of Buyer's entry thereon
and remove all equipment and materials that were brought onto the
Assets by Buyer and its Representatives. As soon as reasonably
possible, Buyer shall provide Seller with a copy of all reports
prepared for Buyer as a result of conducting Permitted
Activities.
(d) Buyer will be responsible for the conduct and protection of all
persons involved in the Permitted Activities. Seller shall not
have any right to control and shall not exercise any
responsibility with respect to the Permitted Activities conducted
by Buyer on the Assets, except that Seller shall have the right
(but not the obligation) to prevent any damage to its property or
disruption to its business. Buyer and its Representatives will
undertake all measures reasonably necessary to protect all
persons conducting the Permitted Activities on the Assets and any
other persons who may enter the Assets during or after completion
of the Permitted Activities.
(e) Neither Buyer nor its Representatives shall contact any federal,
state, or local agency with respect to environmental conditions
discovered on the Assets without the prior written permission and
consent of Seller, except as may be otherwise required by
applicable law, rule or regulation. Any proposal of Buyer or its
Representatives to contact any federal, state, or local agency
shall be delivered in writing to Seller for review and approval.
<PAGE> 31
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(f) BUYER AGREES TO FULLY INDEMNIFY, DEFEND, AND HOLD SELLER, ITS
AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS AND CONTRACTORS HARMLESS FROM AND AGAINST ANY ALL CLAIMS,
LIABILITIES, CAUSES OF ACTIONS, JUDGMENTS OR DEFENSE EXPENSES
(INCLUDING ATTORNEYS FEES AND EXPERT EXPENSES) OF ANY PERSON,
INCLUDING BUYER, ITS AFFILIATES AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS AND CONTRACTORS, FOR (I) PERSONAL
INJURY OR DEATH OF ANY PERSON, (II) DAMAGE TO THE PROPERTY OF
SELLER, BUYER OR ANY OTHER PERSON, OR (III) ALL OTHER DAMAGES OR
ECONOMIC LOSSES [INCLUDING PUNITIVE, INDIRECT OR CONSEQUENTIAL
DAMAGES (SUBJECT TO SECTION 9.02 HEREIN)], ATTRIBUTABLE TO OR
ARISING FROM THE ACTIONS OR OMISSIONS OF BUYER AND ITS
REPRESENTATIVES IN PERFORMING THE PERMITTED ACTIVITIES, EXCEPT
ONLY TO THE EXTENT ANY SUCH INJURY, DAMAGE, OR LOSS IS CAUSED BY
THE GROSS NEGLIGENCE OR STRICT LIABILITY OF SELLER.
5.04 - NOTICE OF DEFECTIVE INTERESTS.
(a) Buyer shall give Seller notice(s) of Defective Interests not
later than December 5, 1997. Such notice(s) shall be in writing
and shall include (i) a description of the Defective Interest
(ii) the reason Buyer believes such Assets to be a Defective
Interest, and (iii) the Defect Value asserted by Buyer with
respect to the asserted Defective Interest. Buyer may not give
notice(s) of Defective Interests unless (i) the Defect Value for
a singular or specific Title Defect or Defective Interest exceeds
$5,000 and (ii) the total of the asserted Defect Values for
asserted Defective Interests exceeds $100,000. Buyer shall be
deemed to have waived all Defective Interests of which Seller has
not been given such notice.
(b) Upon being notified by Buyer pursuant to Section 5.04(a) of any
asserted Defective Interest the Seller shall give written
counter-notice to Buyer within five (5) days (i) that it either
(A) will attempt to correct the asserted Defective Interest, or
(B) does not intend to attempt to correct the Defective Interest;
and (ii) whether it agrees or disagrees that the asserted
Defective Interest exist, and (iii) whether it agrees or
disagrees with the Defect Value asserted by the Buyer. If Buyer
asserts as a Defective Interest that the interest of Seller in a
Prospect Tract is less than that set forth on Exhibit "O" hereto,
then Seller may cure or partially cure such Defective Interest by
acquiring, at Seller's expense,
<PAGE> 32
-32-
additional interests within the Prospect Tract which increase the
ownership of Seller within the Prospect Tract to that interest
for such Prospect Tract that is set forth on Exhibit "O."
(c) If Seller gives counter-notice of intent to attempt to correct
any asserted Defective Interest, it shall have a period of thirty
(30) days from the receipt of the Buyer's notice (the "Cure
Period") to attempt to correct such asserted Defective Interest
at its own expense, and if applicable, the Closing Date shall be
extended until the third business day after the earliest to occur
of the following: (A) the Defective Interests set forth by
Seller's counter-notice are corrected, (B) Seller notifies Buyer
it cannot correct such Defective Interests, or (C) the expiration
of the Cure Period. If Seller fails to cure any asserted
Defective Interest which it attempts to cure, Buyer shall have
the rights set forth elsewhere in this Agreement, but such
failure shall not create any additional obligation of Seller to
Buyer.
(d) If Seller gives counter-notice that it disagrees there is a
Defective Interest, then the existence thereof (and if it exists,
the Defect Value) will be determined by arbitration pursuant to
Section 5.05 hereof.
(e) If Seller gives counter-notice that it disagrees with the Defect
Value asserted by Buyer in connection with a Defective Interest,
then the amount of the Defect Value will be determined by
arbitration pursuant to Section 5.05 hereof.
(f) The failure of Seller to deliver written counter-notice as
provided herein shall be deemed to be notice that Seller (i) will
not attempt to correct that asserted Defective Interest, (ii)
disagrees that there is a Defective Interest and (iii) disagrees
with the Defect Value asserted by the Buyer.
(g) In determining which portions of the Assets are Defective
Interests, it is the intent of the parties to include, when
possible, only that portion of the Assets affected by the defect.
(h) If Seller gives timely counter-notice to Buyer according to this
Agreement of its intent to correct any asserted Defective
Interest according to Section 5.04(c) but Seller is unable to
correct such Defective Interest before the expiration of the Cure
Period and Closing occurs with a reduction to the Purchase Price
equal to the Defect Value asserted for such Defective Interest,
Seller shall be entitled to a post- closing adjustment to the
Purchase Price in an amount equal to the Defect Value of such
Defective Interest if after Closing, but before the Final
Settlement Date, Seller corrects such Defective Interest. After
<PAGE> 33
-33-
Closing, without the prior consent of Buyer, Seller shall not
attempt to cure any Defective Interests other than those set
forth in Seller's counter-notice that Seller intends to cure. At
least thirty (30) days prior to the Final Settlement Date, but
not later than ninety (90) days after the Closing Date, Seller
shall provide Buyer with copies of all title curative materials
that Seller has obtained after the Closing in connection with the
Defective Interests that Seller cures after Closing pursuant to
this Section 5.04(h), and thereafter Seller shall provide Buyer
copies of such additional title curative materials for such
Defective Interests that Seller obtains up to the Final
Settlement Date as promptly as possible after such materials
become available to Seller.
5.05 - ARBITRATION PROCEDURES. If any matter is required by this Article,
Section 8.11 or Section 8.09 of the Plant Agreement to be arbitrated, such
arbitration shall be conducted as set forth in this Section 5.05.
(a) For each matter submitted for arbitration, the parties shall
jointly select a mutually acceptable person as the sole
arbitrator under this Agreement for such matter. If the parties
are unable to agree upon the designation of a person as
arbitrator within five (5) days from the proposal of either party
of a person to act as arbitrator, then either Seller or Buyer, or
both such parties, may in writing request the American
Arbitration Association to appoint a qualified arbitrator.
(b) Any arbitration hearing shall be held at a place in Dallas or
Fort Worth, Texas acceptable to the arbitrator.
(c) The arbitrator shall settle disputes regarding (i) the existence
of Defective Interests and/or the Defect Value thereof and
Seller's attempts to correct any Title Defects, as to arbitration
proceedings brought concerning Defective Interests and (ii) the
existence and scope of either parties post- Closing obligations
under Article VIII hereof or Article VIII of the Plant Agreement
and the award or damages to be paid by either party who fails to
perform its obligations under Article VIII hereof or Article VIII
of the Plant Agreement, as to arbitration proceedings brought
under Section 8.11 or Section 8.09 of the Plant Agreement. The
arbitration shall be in accordance with the Texas General
Arbitration Act and the Rules of the American Arbitration
Association, to the extent such rules do not conflict with the
terms of such act and the terms hereof. Such arbitrator shall
hear all arbitration matters arising under this Article V,
Section 8.11 or Section 8.09 of the Plant Agreement. The decision
of the arbitrator shall be binding upon the parties, and may be
enforced in any court of competent jurisdiction. The parties and
the arbitrator shall proceed diligently and in good faith in
order that the arbitrator's decision
<PAGE> 34
-34-
shall be made as promptly as possible. Seller and Buyer,
respectively, shall bear their own legal fees and other costs
incurred in presenting their respective cases. The charges and
expenses of the arbitrator shall be shared equally by Seller and
Buyer.
(d) The arbitration shall commence within ten days after the
arbitrator is selected as set forth in Section 5.05(a) above. In
fulfilling his duties hereunder, the arbitrator shall be bound by
the terms of this Agreement. In fulfilling any of his arbitration
duties, the arbitrator may consider such other matters as in the
opinion of the arbitrator are necessary or helpful to make a
proper evaluation. Additionally, the arbitrator may consult with
and engage disinterested third parties, including, without
limitation, petroleum engineers, environmental engineers,
attorneys and consultants, to advise the arbitrator.
(e) If any arbitrator selected hereunder should die, resign or be
unable to perform his duties hereunder, the parties, or if the
parties are unable to agree, the American Arbitration Association
shall select a replacement arbitrator. The aforesaid procedure
shall be followed from time to time as necessary.
(f) The foregoing arbitration procedures shall also apply according
to Section 8.11.
5.06 - EFFECT OF DEFECTIVE INTERESTS ON CLOSING. If Buyer asserts any
Defective Interests the following shall apply:
(a) The parties shall proceed to Closing as provided in this
Agreement if (i) Seller cures the asserted defect, (ii) Buyer
agrees to waive the relevant Defective Interest and purchase the
Defective Interest notwithstanding the asserted Defective
Interest, or (iii) Buyer and Seller agree to a Defect Value and
the Purchase Price is reduced by such amount in accordance with
Section 2.02 hereof.
(b) If any matter is referred to arbitration under Section 5.05 of
this Agreement and the Defect Value or Values asserted by Buyer
would not permit either party to terminate this Agreement
according to Section 9.01(c) or (d) hereof, then the parties
shall proceed to Closing, the asserted Defective Interests shall
be conveyed to Buyer, and the Closing Amount (defined below)
shall be reduced by an amount equal to the asserted Defect Values
of the asserted Defective Interests (the "Withheld Payment"). The
Withheld Payment shall be placed in escrow with the same entity
under essentially the same terms as the Earnest Money (defined
below). The Withheld Payment shall be paid as follows:
<PAGE> 35
-35-
(i) If the arbitrator decides that any Defective Interest
asserted by the Buyer is not a Defective Interest, then
the Withheld Payment with respect to the asserted
Defective Interest shall be paid to the Seller.
(ii) If the arbitrator decides that any one or more of the
Defective Interests asserted by the Buyer is in fact a
Defective Interest, then, if the total Defect Value for
all Defective Interests that have been determined to
exist, exceed $100,000, the Withheld Payment, up to the
amount of the Defect Value, as determined by the
arbitrator, shall be distributed to the Buyer, and the
remainder, if any, shall be distributed to the Seller.
(c) If any matter is referred to arbitration under Section 5.05 of
this Agreement and the Defect Value or Values asserted by Buyer
with respect to the matters under arbitration together with the
Defect Value of any other Defective Interests previously agreed
to by Seller could, if determined by the arbitrator to be in the
amount asserted by Buyer, permit either party to terminate this
Agreement according to Section 9.01(c) or (d) hereof, then,
unless this Agreement is terminated by Seller pursuant to Article
IX hereof, Closing shall be postponed until the arbitrator
renders his final decisions. After the arbitrator renders his
decision the parties shall proceed to Closing, the Assets,
including any Defective Interests, shall be conveyed to the Buyer
and the Purchase Price will be reduced by the Defect Value found
by the arbitrator, if such Defect Value or Values exceeds
$100,000; provided, however, nothing contained in this Section
5.06(c) shall be deemed to in any way modify or terminate
Seller's or Buyer's right to terminate under Section 9.01 hereof
or conditions to Closing under Section 6.01(d) and Section
6.02(d) hereof after the arbitrator renders his decision.
5.07 - IDENTIFICATION OF UPWARD ADJUSTMENT. If it is determined prior to
the Closing Date that Seller owns a greater undivided interest in the Assets
than reflected in the Exhibits hereto which results in an increase in value of a
portion of the Assets, the party discovering such inaccuracy shall immediately
notify the other party and Buyer and Seller shall endeavor to agree upon an
amount by which the Defect Value of all Defect Interests determined to exist in
accordance with Article V shall be set-off (but not to exceed the Defect Value)
in accordance with Section 2.02(b)(3) (the "Upward Adjustment"). If Buyer and
Seller fail to agree to the Upward Adjustment, then the amount or such Upward
Adjustment shall be determined by arbitration pursuant to Section 5.05 hereof.
<PAGE> 36
-36-
ARTICLE VI
CONDITIONS TO CLOSING
6.01 - SELLER'S CONDITIONS. The obligations of Seller at the Closing are
subject, at the option of Seller, to the satisfaction at or prior to the Closing
of the following conditions:
(a) All representations and warranties of Buyer contained in this
Agreement shall be true in all material respects at and as of the
Closing as if such representations and warranties were made at
and as of the Closing; and Buyer shall have performed and
satisfied all material obligations in all material respects
required by this Agreement to be performed and satisfied by Buyer
at or prior to the Closing.
(b) No suit or other proceeding shall be pending before any court or
governmental agency seeking to restrain or prohibit or declare
illegal, or seeking substantial damages in connection with, the
purchase and sale contemplated by this Agreement.
(c) All transactions contemplated by that certain Purchase and Sale
Agreement (the "Plant Agreement") of even date herewith between
Plum Creek Pipeline Company, L.P.. and Buyer shall have closed
pursuant to the terms of such agreement.
(d) Neither Seller nor Buyer has terminated this Agreement pursuant
to Section 9.01(c) or (d).
6.02 - BUYER'S CONDITIONS. The obligations of Buyer at the Closing are
subject, at the option of Buyer, to the satisfaction at or prior to the Closing
of the following conditions:
(a) All representations and warranties of Seller contained in this
Agreement shall be true in all material respects at and as of the
Closing as if such representations and warranties were made at
and as of the Closing; and Seller shall have performed and
satisfied all material agreements in all material respects
required by this Agreement to be performed and satisfied by
Seller at or prior to the Closing.
(b) No suit or other proceeding shall be pending before any court or
governmental agency seeking to restrain or prohibit or declare
illegal, or seeking substantial damages in connection with, the
purchase and sale contemplated by this Agreement.
<PAGE> 37
-37-
(c) All transactions contemplated by the Plant Agreement shall have
closed pursuant to the terms of such agreement.
(d) Neither Seller nor Buyer has terminated this Agreement pursuant
to Section 9.01(c) or (d).
ARTICLE VII
CLOSING
7.01 - DATE OF CLOSING. Unless the parties hereto mutually agree otherwise
and subject to the conditions stated in this Agreement, the consummation of the
transactions contemplated hereby (herein called the "Closing") shall be held at
the offices of Seller in Fort Worth, Texas, on the latest of
(i) December 19, 1997;
(ii) The day provided in Section 5.04(c);
(iii) Three (3) business days following the decision
rendered in any arbitration conducted pursuant to
Section 5.06(c) hereof; or
(iv) the date of closing under the Plant Agreement.
The date on which closing occurs is referred to herein as the "Closing Date."
7.02 - CLOSING OBLIGATIONS. At the Closing, the following events shall
occur, each being a condition precedent to the others and each being deemed to
have occurred simultaneously with the others:
(a) Seller shall execute, acknowledge and deliver an assignment, bill
of sale, and conveyance in recordable form (in sufficient
counterparts to facilitate recording) sufficient to convey to
Buyer the Assets with covenants of special warranty as to all
Assets, such conveyance to be substantially in the form attached
hereto as Exhibit "P."
(b) At Buyer's request, Seller shall execute and deliver to Buyer an
Assignment and Bill of Sale, in a form reasonably acceptable to
Buyer and Seller, transferring to Buyer any proprietary 3-D
Seismic Data of Seller covering the Assets.
<PAGE> 38
-38-
(c) Seller shall execute and deliver to Buyer, in a form reasonably
acceptable to Seller and Buyer, an assignment of Seller's right
to receive a recordable assignment of the Producing Leases on
which the Watson No. 2 Well is located. Such assignment shall be
with special warranty of title only, and shall contain the same
disclaimers as to the condition of personal property as are
contained in the form of assignment attached hereto as Exhibit
"P."
(d) Seller shall execute and deliver to Buyer an assignment or bill
of sale, in a form reasonably acceptable to Seller and Buyer,
transferring to Buyer any of the Assets not otherwise conveyed to
it.
(e) Seller and Buyer shall execute and deliver a settlement statement
(herein called the "Preliminary Settlement Statement") that shall
set forth the Closing Amount (as hereinafter defined) and each
adjustment and the calculation of such adjustments used to
determine such amount. The term "Closing Amount" shall mean the
Purchase Price adjusted as provided in Section 2.02, using for
such adjustments the best information then available.
(f) Buyer shall pay the Closing Amount, other than the Earnest Money,
to Seller by wire transfer in immediately available funds.
(g) The Escrow Agent shall deliver the Earnest Money plus interest
earned thereon to Seller.
(h) Parent shall deliver to Seller the original stock certificates
evidencing Parent's Stock.
(i) Seller and Buyer (or an affiliate of Buyer who is authorized to
operate properties according to rules and regulations of the
Railroad Commission of the State of Texas) shall execute Texas
Railroad Commission Forms P-4 designating Buyer operator of the
Assets previously operated by Seller or an Affiliate, subject
however to the rights of third parties under applicable operating
agreements, and Seller shall file such forms with the Texas
Railroad Commission.
(j) Seller shall deliver to Buyer, (1) a certificate signed by a
responsible officer of the General Partner of Seller certifying
that all of the representations and warranties of Seller made
hereunder are true and correct at and as of Closing, as if made
on the Closing Date, (2) a certified copy of the Executive
Committee of the Board of Directors of the General Partner of
Seller authorizing the transaction contemplated by the Agreement,
such certified copy to show the dates of adoption and
<PAGE> 39
-39-
that on the Closing Date the resolutions have not been rescinded
or modified, and (3) a Certificate of the Secretary of Seller
showing the incumbency of the officers of the General Partner of
Seller executing instruments on behalf of the General Partner of
Seller.
(k) Buyer shall deliver to Seller (1) a certificate signed by a
responsible officer of Buyer certifying that all of the
representations and warranties of Buyer made hereunder are true
and correct at and as of Closing, as if made on the Closing Date,
(2) a certified copy of a resolution of the Board of Directors of
Buyer authorizing the transaction contemplated by the Agreement,
such certified copy to show the date of adoption and that on the
Closing Date it has not been rescinded or modified, (3) a
Certificate of the Secretary of Buyer showing the incumbency of
the officers of Buyer executing instruments on behalf of Buyer,
and (4) such documents as may be reasonably requested by Seller
demonstrating that Buyer is a qualified operator with the Texas
Railroad Commission and has posted all bonds required by it.
(l) Seller shall deliver to Buyer all funds held in suspense by
Seller with respect to the Assets together with a report in
reasonable detail setting forth the reasons such funds are held
in suspense.
(m) Seller and Buyer shall execute, acknowledge and deliver such
transfer orders or letters in lieu thereof, as may be reasonably
requested and prepared by Buyer, directing all purchasers of
production to make payment to Buyer of proceeds attributable to
production from the Assets assigned to Buyer.
(n) Seller shall have delivered to Buyer a favorable opinion of
Murphy Mahon Keffler & Farrier, L.L.P., counsel to Seller, dated
the Closing Date, substantially in the form of Exhibit "Q"
hereof.
(o) Buyer shall have delivered to Seller a favorable opinion of
counsel to Buyer and Parent, which shall be reasonably acceptable
to Seller, dated the Closing Date, substantially in the form of
Exhibit "R" hereof.
(p) In order to secure the performance of Seller's post Closing
obligations and the post-Closing obligations of Plum Creek
Pipeline Company ("Plum Creek") according to Article VIII of the
Plant Agreement, Buyer, Seller and Plum Creek shall enter into an
escrow agreement similar in form and substance to the escrow
agreement established hereunder with respect to the Earnest
Money. The Seller shall deposit fifteen million dollars
($15,000,000.00) into escrow under such escrow agreement
("Escrowed Funds"). The Buyer shall be authorized to withdraw
<PAGE> 40
-40-
Escrowed Funds upon the delivery to the escrow agent of an
affidavit signed by a responsible officer of Buyer (with copy to
Seller) to the effect that (i) Seller or Plum Creek (as the case
may be) has defaulted on one or more of its obligations under
this Agreement or the Plant Agreement which survive Closing, (ii)
Buyer has given Seller or Plum Creek (as the case may be) not
less than 10 days prior written notice of such default and Seller
or Plum Creek (as the case may be) has failed to cure its
default, and (iii) either Seller or Plum Creek (as the case may
be) has agreed with Buyer's assertion of default and/or the
damages asserted by Buyer's on account of such default, or the
existence of such default and/or the damages asserted by Buyer's
on account of such default has been finally determined by under
the arbitration provisions set forth in the Agreement. Such
escrow agreement shall also provide that (i) if the existence of
Seller's or Plum Creek's default and/or the damages asserted by
Buyer on account of such default is submitted for determination
through arbitration, the amount asserted by Buyer as damages on
account of such default shall be paid to Buyer from the Escrowed
Funds if the arbitrator's determination is not final within 90
days after the date that an arbitrator is selected according to
Section 5.05 hereof; provided, however, that if the arbitrator
determines that the award of damages payable to Buyer is less
than the amount withdrawn by Buyer from the Escrowed Funds, Buyer
shall repay the amount of such excess to Seller, plus that
portion of the interest thereon that was withdrawn by Buyer,
within five (5) business days after receipt of written demand
from Buyer, and (ii) if Buyer withdraws any of the Escrowed
Funds, either by Seller's or Plum Creek's (as the case may be)
agreement or following the arbitrator's final decision, Buyer
shall also be entitled to one-half (1/2) of the interest that
accrues on the amount withdrawn by Buyer from the Closing Date to
the date of withdrawal. Such escrow agreement shall continue in
effect until the later to occur of (A) two years from the Closing
Date, and (B) 30 days subsequent to the final determination by an
arbitrator of any assertion by Buyer, made within two years from
the Closing Date, of Seller's or Plum Creek's default of a post
Closing obligation. Upon termination of the escrow agreement all
funds remaining in escrow shall be returned to Seller. If
requested by Seller, Buyer shall cooperate with Seller in
substituting a irrevocable standby letter of credit as security
for Seller's and Plum Creek's post-Closing obligations, but such
letter of credit shall be in form and substance acceptable to
Buyer.
<PAGE> 41
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ARTICLE VIII
OBLIGATIONS AFTER CLOSING
8.01 - POST-CLOSING ADJUSTMENTS.
(a) As soon as practicable after the Closing, but not later than 90
days after the Closing, Seller shall prepare and deliver to
Buyer, in accordance with this Agreement and generally accepted
accounting principles, a statement ("Seller's Final Settlement
Statement") setting forth each adjustment to Purchase Price that
was not finally determined as of the Closing and any adjustment
to which Seller is entitled to according to Section 5.04(h) and
showing the calculation of such adjustments. As soon as
practicable after receipt of Seller's Final Settlement Statement,
and no later than 120 days after the Closing Date, Buyer shall
deliver to the Seller a written report containing any changes
that Buyer proposes be made to Seller's Final Settlement
Statement. The parties shall undertake to agree with respect to
the amounts due pursuant to such Post-Closing adjustment not
later than 150 days after the Closing Date. If Buyer fails to
propose any changes to the accounting set forth in the Seller's
Final Settlement Statement, it shall be deemed that Buyer agrees
with Seller's Final Settlement Statement. The final agreed price
paid by Buyer to Seller for the Assets after all adjustments is
hereinafter referred to as the "Final Purchase Price." The date
upon which such agreement is reached or upon which the Final
Purchase Price is established, shall be herein called the "Final
Settlement Date".
(b) If Seller and Buyer are unable to agree upon the Final Purchase
Price within 150 days from the Closing Date, the Dallas office of
Arthur Anderson, independent public accountants, is designated to
act as an arbitrator and to decide all points of disagreement
with respect to the Final Purchase Price, such decision to be
binding upon both parties. If such firm is unwilling or unable to
serve in such capacity, Seller and Buyer shall attempt to, in
good faith, designate another acceptable person as the sole
arbitrator under this Section. If the parties are unable to agree
upon the designation of a person as substitute arbitrator, then
Seller or Buyer, or both of them, may in writing request the
American Arbitration Association to appoint the substitute
arbitrator. The arbitration shall be conducted under the Texas
General Arbitration Act and the rules of the American Arbitration
Association to the extent such rules do not conflict with the
terms of such Act and terms hereof. The costs and expenses of the
arbitrator, whether the firm designated above, or a third party
appointed pursuant to the preceding sentence shall be shared
equally by
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Seller and Buyer. Within five (5) days after the decision of the
arbitrator, the Buyer or Seller, as the case may be, shall
promptly make a cash payment to the other equal to the sum as may
be found to be due as the Final Purchase Price. Notwithstanding
the foregoing provisions of this Section 8.01(b), any questions
with respect to a Defective Interest or Defect Value shall be
resolved pursuant to the terms of Article V hereof.
8.02 - SALES TAXES AND RECORDING FEES. Buyer shall pay all sales taxes
occasioned by the sale of the Assets and all documentary, filing and recording
fees required in connection with the filing and recording of any assignments.
8.03 - FURTHER ASSURANCES. After Closing, Seller and Buyer shall execute,
acknowledge and deliver or cause to be executed, acknowledged and delivered such
instruments and take such other action including payment of monies as may be
necessary or advisable to carry out their obligations under this Agreement and
under any document, certificate or other instrument delivered pursuant hereto or
required by law.
8.04 - BUYER'S POST-CLOSING OBLIGATIONS.
(a) If at any time subsequent to the Closing, Buyer comes into
possession of money or property belonging to the Seller such
money or other property shall be promptly delivered to the
Seller.
(b) Upon Closing, Buyer assumes all liabilities attributable to the
Assets arising from, attributable to, or alleged to be arising
from or attributable to a violation of, or the failure to perform
any obligation imposed by any and all laws, statutes, ordinances,
rules, regulations, orders or determinations of any governmental
authority pertaining to health or environment, including
Environmental Laws, in effect where the Assets are located, which
accrue or arise from and after the Effective Time. In connection
with this assumption of liability by Buyer, Buyer agrees that
prior to Closing it will conduct such inspections of the Assets
as deemed necessary by it to fully evaluate the condition of the
Assets. As used in this Agreement "Environmental Laws" means all
laws, rules, and regulations, whether federal, state or local, as
they exist on the date hereof, relating to (a) the control of any
pollutant or potential pollutant or protection of the air, water,
land or the environment, (b) solid, gaseous or liquid waste
generation, handling, treatment, storage, disposal or
transportation, or (c) exposure to hazardous, toxic, explosive,
corrosive or other substances alleged to be harmful.
"Environmental Laws" shall include, but not be limited to, the
Clean Air Act, 42 U.S.C.ss.7401 et seq., the Clean Water Act 33
U.S.C.ss.1251 et seq., the Resource Conservation Recovery Act, 42
U.S.C.ss.6901 et seq., the Superfund
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Amendments and Reauthorization Act, 42 U.S.C. ss.11001 et seq.,
the Water Pollution Control Act, 33 U.S.C. ss.1251 et seq., the
Safe Drinking Water Act, 42 U.S.C. ss.300f et seq., and the
Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss.9601 et seq.
(c) Upon Closing, Buyer assumes all duties and obligations of the
owner of the Assets which accrue or arise from and after the
Effective Time. Without limitation of the foregoing, Buyer
assumes (i) all obligations of Seller under the Contracts arising
after the Effective Time, including any obligation of Seller
under any of the Contracts to assign any interest in the Other
Leases to other parties entitled to such an assignment under the
terms of the Contracts, (ii) all accounts payable and contractual
obligations incurred by Seller in accordance with this Agreement
with respect to the Assets attributable to periods on or after
the Effective Time, (iii) the obligation to make proper
distribution of any suspense accounts transferred to Buyer in
accordance with standard industry practice, regardless of whether
the suspense funds accrued prior or subsequent to the Effective
Time, (iv) all obligations to properly remove all pipe and
equipment, close pits and to cleanup and restore any property
included in or affected by the Assets which was in compliance
with Environmental Laws at the Effective Time, and (v) all
liabilities and obligations resulting from injury or death to
persons and damage to property arising from or attributable to
the ownership or operation of the Assets after the Effective
Time.
(d) If, pursuant to Section 4.01(i), Seller does not provide notice
to any third parties under Preference Rights contained in the
Contracts listed on Exhibit "D" requesting waiver of such
provisions, or if such request for waiver is made by Seller prior
to Closing, but the third party's waiver of or election to
exercise the Preference Right is not due under the applicable
agreement until after Closing, the affected Property shall be
conveyed to and purchased by Buyer at Closing pursuant to the
terms of this Agreement subject to the terms of the applicable
Preference Right. After Closing, Buyer shall, if necessary,
provide notice to the appropriate third parties requesting waiver
of the applicable Preference Right and/or comply with the terms
of the Preference Right that are properly exercised after
Closing, with Buyer receiving all consideration payable upon the
exercise of such Preference Right.
(e) UPON CLOSING, BUYER AGREES TO INDEMNIFY, RELEASE, DEFEND AND HOLD
HARMLESS SELLER, ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
REPRESENTATIVES, AFFILIATES, SUBSIDIARIES, SUCCESSORS AND ASSIGNS
<PAGE> 44
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FROM AND AGAINST ANY CLAIMS, LIABILITIES, LOSSES, DAMAGES, COSTS
AND EXPENSES (INCLUDING WITHOUT LIMITATION, DAMAGE TO PROPERTY,
OR INJURY OR DEATH OF PERSONS, COURT COSTS, REASONABLE ATTORNEY'S
FEES AND EXPENSES OF EXPERTS) CAUSED BY, ARISING FROM OR
ATTRIBUTABLE TO THE OWNERSHIP OR OPERATION OF THE ASSETS AFTER
THE EFFECTIVE TIME, OR THE BREACH BY BUYER OF ANY OF ITS
OBLIGATIONS UNDER THIS AGREEMENT.
8.05 - SELLER'S POST-CLOSING OBLIGATIONS.
(a) If at any time subsequent to the Closing, Seller comes into
possession of money or property belonging to the Buyer such money
or other property shall be promptly delivered to the Buyer.
(b) Upon Closing, Seller assumes all liabilities attributable to the
Assets arising from, attributable to, or alleged to be arising
from or attributable to a violation of, or the failure to perform
any obligation imposed by any and all laws, statutes, ordinances,
rules, regulations, orders or determinations of any governmental
authority pertaining to health or environment, including
Environmental Laws, in effect where the Assets are located, which
accrue or arise from and before the Effective Time.
(c) Upon Closing, Seller assumes all duties and obligations of the
owner of the Assets which accrue or arise from and before the
Effective Time. Without limitation of the foregoing, Seller
assumes (i) all obligations of Seller under the Contracts arising
before the Effective Time, (ii) all accounts payable and
contractual obligations incurred by Seller in accordance with
this Agreement with respect to the Assets attributable to periods
on or before the Effective Time, and (iii) all liabilities and
obligations resulting from injury or death to persons and damage
to property arising from or attributable to the ownership or
operation of the Assets before the Effective Time.
(d) Seller shall continue its existence for a period of two years
from the Closing Date; provided, however, Seller may terminate
its existence prior to such time if an Affiliate of Seller
qualified to do business in Texas agrees to assume Seller's
obligations hereunder and maintain its existence for a period of
two years from the Closing Date. Seller (or such Affiliate of
Seller which expressly assumes Seller's obligations hereunder)
shall maintain a net worth in the amount of at least
<PAGE> 45
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$5,000,000 in a manner or form reasonably satisfactory to Buyer
for at least two years from and after Closing.
(e) Notwithstanding any other provision of this Agreements, Seller
agrees that Buyer will not incur any liability of any kind
whatsoever with respect to employment matters of Seller of any
Affiliate of Seller, including, but not limited to, any liability
for compensation, savings plans, severance, pensions, the
Employee Retirement Income Security Act of 1974, or other
benefits, as a consequence of consummating the transactions
contemplated by this Agreement, nor will the Assets, or any part
thereof, be subject to any kind of lien or claim in connection
with such employment matters and Seller shall defend, indemnify
and hold harmless Buyer from any and all claims, lawsuits, costs,
or expenses, including attorney's fees, regarding same.
(f) After Closing Seller shall request its lease brokers to provide
Seller with copies of all title information in their possession
not previously furnished to Seller. Upon receipt of such title
information Seller shall provide same to Buyer.
(g) Seller agrees to defend and indemnify Buyer and hold it harmless
from any and all liability arising out of or related to the
litigation described on Exhibit "H" attached hereto and made a
part hereof. In addition, at such time as the litigation
identified as item 1 on Exhibit "H" hereto is concluded by a
final non-appealable order of a court with jurisdiction or by
binding settlement of the parties, Seller shall assign to Buyer
all of Seller's or Affiliate's right, title and interest in the
oil and gas leases described as items 1 through 9 on Exhibit "F"
attached hereto, provided such leases are not required to be
assigned to a third-party in connection with the settlement of
such litigation.
(h) UPON CLOSING, SELLER AGREES TO INDEMNIFY, RELEASE, DEFEND AND
HOLD HARMLESS BUYER, ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
REPRESENTATIVES, AFFILIATES, SUBSIDIARIES, SUCCESSORS AND ASSIGNS
FROM AND AGAINST ANY CLAIMS, LIABILITIES, LOSSES, DAMAGES, COSTS
AND EXPENSES (INCLUDING WITHOUT LIMITATION, DAMAGE TO PROPERTY,
OR INJURY OR DEATH OF PERSONS, COURT COSTS, REASONABLE ATTORNEY'S
FEES AND EXPENSES OF EXPERTS) CAUSED BY, ARISING FROM OR
ATTRIBUTABLE TO THE OWNERSHIP OR OPERATION OF THE ASSETS PRIOR TO
THE EFFECTIVE TIME, OR THE BREACH BY SELLER OF ANY OF ITS
OBLIGATIONS UNDER THIS AGREEMENT.
<PAGE> 46
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8.06 - DELIVERY OF RECORDS. Within ten (10) days after Closing, Seller
shall deliver the Records to Buyer. For a period of two years after the Closing
Date Buyer shall allow Seller reasonable access to the necessary Records during
Buyer's normal business hours after Closing for the purpose of complying with
its post-closing obligations hereunder, filing or amending a tax return,
participating in litigation related to the Assets, or for any other similar
legitimate business purpose; provided that any copies of Records made by Seller
shall be at the sole expense of Seller.
8.07 - DISCLAIMERS OF REPRESENTATIONS AND WARRANTIES. The express
representation and warranties of Seller contained in this Agreement are
exclusive and are in lieu of all other representations and warranties, express,
implied or statutory. BUYER ACKNOWLEDGES THAT, EXCEPT FOR SELLER'S EXPRESS
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, SELLER HAS NOT MADE,
AND SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER HEREBY EXPRESSLY
WAIVES ANY REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW, BY
STATUTE OR OTHERWISE RELATING TO (I) THE ENVIRONMENTAL CONDITION OF THE ASSETS,
(II) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (III) ANY IMPLIED OR
EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (IV) ANY IMPLIED OR
EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (V) ANY RIGHTS
OF PURCHASERS UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION,
(VI) ANY AND ALL IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW AND (VII) THE
QUALITY, QUANTITY OR VOLUME OF ANY OIL, AND GAS RESERVES; IT BEING THE EXPRESS
INTENTION OF BOTH BUYER AND SELLER THAT THE PERSONAL PROPERTY, EQUIPMENT AND
FIXTURES INCLUDED WITHIN THE ASSETS ARE TO BE CONVEYED TO BUYER IN THEIR PRESENT
CONDITION AND STATE OF REPAIR, "AS IS" AND "WHERE IS" WITH ALL FAULTS, AND THAT
BUYER HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS BUYER DEEMS APPROPRIATE.
SELLER AND BUYER AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE
EFFECTIVE, THE DISCLAIMERS OF CERTAIN WARRANTIES CONTAINED IN THIS SECTION ARE
"CONSPICUOUS" DISCLAIMERS FOR THE PURPOSES OF ANY APPLICABLE LAW, RULE OR ORDER.
8.08 - WAIVER OF DTPA. It is the intent of the parties that Buyer's rights
and remedies with respect to this transaction and with respect to all acts or
practices of Seller, past, present or future, in connection with this
transaction shall be governed by legal principles other than the Texas Deceptive
Trade Practices - Consumer Protection Act, Tex. Bus. & Ann. ss.17.41 et seq.
(Vernon 1987 and Supp. 1994) (the "DTPA") or any similar statute of any
jurisdiction that may be applicable to the transactions contemplated hereby. As
such, Buyer hereby waives the applicability of the DTPA or any similar statute
to this transaction and any and all duties, rights or remedies that might be
imposed by the DTPA or any similar statute; provided, however, Buyer does not
waive Section 17.555 of the DTPA. Buyer acknowledges, represents and
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warrants that it is purchasing the assets covered by this Agreement for
commercial or business matters; that it is able to evaluate the merits and risks
of a transaction such as this; and that it is not in a significantly disparate
bargaining position with Seller. Buyer expressly recognizes that the price for
which Seller has agreed to sell the assets and perform its obligations under
this Agreement has been predicated upon the inapplicability of the DTPA or any
similar statute and this waiver of the DTPA and any similar statute. Buyer
further recognizes that Seller, in determining to proceed with the entering into
of this Agreement has expressly relied on the provisions of this Section 8.08.
8.09 - RESIGNATION OF OPERATOR. On the Closing Date, Seller or its
Affiliate, if applicable, shall resign as operator of all of the Assets it
operates, as provided in any applicable operating agreement, and shall use
reasonable efforts to secure the consents necessary for Buyer to become operator
of the Assets previously operated by Seller or its Affiliate, if applicable,
and, if requested by Buyer, Seller or its Affiliate, if applicable, shall notify
non-operators of the Assets it operates recommending that Buyer be elected as
successor operator. With respect to those Assets as to which Buyer becomes
operator, Seller or its Affiliate, if applicable, shall relinquish operations to
Buyer on the Closing Date. At the time Seller relinquishes operations to Buyer,
Seller shall deliver to Buyer all amounts payable to third parties out of
production attributable to the Assets and held in suspense by Seller.
8.10 - REGISTRATION OBLIGATIONS OF PARENT.
(a) Registration Obligation. Within thirty (30) days from the Closing
Date, Parent shall prepare and file with the Securities and
Exchange Commission, or any successor body thereto (the
"Commission"), a registration statement on Form S-3 or other
appropriate form (the "Registration Statement") pursuant to Rule
415 under the Securities Act of 1933, as amended, and all rules
and regulations under such Act (the "Securities Act") covering
the resale by Seller of Parent's Stock. Parent shall use its
reasonable best efforts to keep the Registration Statement
continuously effective under the Securities Act until the date
which is 24 months from the Closing Date, or such shorter period
ending when (i) all shares of Parent Stock covered by the
Registration Statement have been sold in the manner set forth and
as contemplated in the Registration Statement, or (ii) in the
opinion of counsel to Parent, which opinion shall be satisfactory
in form, scope and substance to Seller, registration of the
Parent Stock is (A) no longer required under the Securities Act,
and (B) Seller may sell all remaining shares of Parent Stock in
the open market without limitations as to volume and without
being required to file any forms or reports with the Commission
under the Securities Act.
(b) Registration Procedures. In connection with the Registration
Statement, Parent shall use its reasonable best efforts to effect
the registration of the resale by Seller of the Parent's Stock,
and pursuant thereto, Parent shall as expeditiously as possible:
(i) prepare and file with the Commission the Registration
Statement on the appropriate form with respect to such
Parent's Stock and use all reasonable efforts to cause
the Registration Statement to become effective as soon
as legally practicable following
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its filing (provided that before filing a Registration
Statement or prospectus or any amendments or
supplements thereto, Parent will furnish to the
counsel selected by Seller copies of all such
documents proposed to be filed, which documents will
be subject to the review of such counsel);
(ii) subject to Section 8.10(a) hereof, prepare and file
with the Commission such amendments and supplements to
the Registration Statement and the prospectus used in
connection therewith as may be necessary to comply with
the provisions of the Securities Act with respect to
the disposition of all securities covered by the
Registration Statement in accordance with the intended
methods of disposition by Sellers set forth in the
Registration Statement;
(iii) furnish to Seller such number of copies of the
Registration Statement, each amendment and supplement
thereto, the prospectus included in the Registration
Statement (including each preliminary prospectus) and
such other documents as Seller may reasonably request
in order to facilitate the disposition of the Parent's
Stock;
(iv) use its reasonable best efforts to register or qualify
the Parent's Stock under such other securities or blue
sky laws of such jurisdictions within the United States
as Seller reasonably requests and do any and all other
acts and things which may be reasonably necessary or
advisable to enable Seller to consummate the
disposition in such jurisdictions of the Parent's Stock
(provided that Parent will not be required to qualify
generally to do business, file any general consent to
service of process, or subject itself to taxation in
any jurisdiction where it would not otherwise be
required to qualify, file, or subject itself to
taxation but for this subparagraph);
(v) notify Seller, at any time when a prospectus relating
thereto is required to be delivered under the
Securities Act, of the happening of any event as a
result of which the prospectus included in the
Registration Statement contains an untrue statement of
a material fact or omits to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading, and, at the request
of Seller, Parent will immediately prepare a supplement
or amendment to such prospectus so that, as thereafter
delivered to the purchasers of the Parent's Stock, such
prospectus will not contain an untrue statement of a
material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading; provided, however,
that Parent's obligation under this paragraph (v) to
effect any such supplement, amendment or filing may be
suspended for a period not exceeding ten (10)
consecutive days that shares are traded on the New York
Stock Exchange in the event Parent or any of its
affiliates are at the time engaged in confidential
negotiations or other confidential business activities,
the disclosure of which would be required in such
supplement, amendment or filing (but would not be
required if such supplement, amendment or filing were
not filed), and the Board of Directors of Parent
determines in good faith that such disclosure would be
materially detrimental to Parent and its stockholders
or would have a material adverse effect on any such
confidential negotiations or other confidential
business activities, except that in no event shall
Parent suspend its obligation
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under this paragraph (v) on more than one (1) occasion
during any ninety (90) consecutive day period
following the Closing Date.
(vi) use its reasonable efforts to cause all of the Parent's
Stock to be listed on each securities exchange on which
similar securities issued by Parent are then listed;
(vii) provide a transfer agent and registrar (which may be
Parent) for all of the Parent's Stock not later than
the effective date of the Registration Statement;
(viii) enter into such customary agreements and take all
such other actions as Seller reasonably requests in
order to expedite or facilitate the disposition of the
Parent's Stock (including, without limitation,
effecting a stock split or a combination of shares);
(ix) make available for inspection by Seller, any
underwriter participating in any disposition pursuant
to the Registration Statement and any attorney,
accountant or other agent retained by Seller or
underwriter, at the offices where normally kept, during
reasonable business hours, all financial and other
records (as may be reasonably requested), pertinent
corporate documents and properties of Parent
(collectively, the "Parent Records") as shall be
reasonably necessary to enable them to exercise their
due diligence responsibility, and cause Parent's
officers, directors,, employees and independent
accountants to supply all information reasonably
requested by Seller, underwriter, attorney, accountant
or agent in connection with the Registration Statement.
Parent Records which Parent determines, in good faith,
to be confidential and any Parent Records which it
notifies Seller are confidential shall not be disclosed
by Seller or any such underwriter, attorney, accountant
or other agent unless (A) the disclosure of such Parent
Records is necessary to avoid or correct a misstatement
or omission in the Registration Statement and Parent's
obligation to amend or supplement the Registration
Statement is not then suspended under the proviso to
Section 8.10(b)(v), (B) the release of such Parent
Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction, or (C)
the information in such Parent Records has been made
generally available to the public. Seller agrees that
information obtained by it as a result of such
inspections shall be deemed confidential and shall not
be used by it as the basis for any market transaction
in securities of Parent unless and until such
information is made generally available to the public
and Seller shall cause any attorney, accountant or
agent retained by Seller to keep confidential any such
information;
(x) otherwise use reasonable efforts to comply with all
applicable rules and regulations of the Commission, and
make available to its security holders, as soon as
reasonably practicable, an earnings statement covering
the period of at least 12 months beginning with the
first day of Parent's first full calendar quarter after
the effective date of the Registration Statement, which
earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158
thereunder;
(xi) in the event of the issuance of any stop order
suspending the effectiveness of the Registration
Statement, or of any order suspending or preventing the
use
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of any related prospectus or suspending the
qualification of any common stock included in the
Registration Statement for sale in any jurisdiction,
Parent will use reasonable efforts promptly to obtain
the withdrawal of such order; and
(xii) use reasonable efforts to cause the Parent's Stock
covered by the Registration Statement to be registered
with or approved by such other governmental agencies or
authorities as may be necessary to enable Seller to
consummate the disposition of the Parent's Stock except
as may be required solely as a consequence of the
nature of Seller's business.
(c) Certain Obligations of Seller. Prior to making a sale of Parent
Stock pursuant to the Registration Statement, Seller shall notify
Parent in writing of its intention to sell Parent Stock pursuant
to the Registration Statement. Upon receipt of such notice,
Parent shall advise Seller, within two (2) business days
following receipt of such notice in writing, of the existence of
any condition described in paragraph (v) of Section 8.10(b).
Seller agrees by acquisition of Parent Stock that, upon receipt
of such written notice from Parent of the happening of any event
of the kind described in paragraph (v) of Section 8.10(b) or
paragraph (xi) of Section 8.10(b), or of Parent's reasonable
determination that a post-effective amendment to the Registration
Statement would be appropriate, Seller shall forthwith
discontinue disposition of Parent Stock covered by the
Registration Statement until Seller's receipt of the copies of
the supplemented or amended prospectus contemplated by paragraph
(v) of Section 8.10(b), which supplemented or amended prospectus
shall be delivered to Seller not later than the date that is 10
days that shares are traded in the New York Stock Exchange
following the date of Parent's written notice referred to herein,
and Seller's discontinuance of the disposition of Parent Stock
shall terminate at the end of such 10-day period regardless of
whether such supplemented or amended prospectus is delivered to
Seller within such 10-day period.
The "Plan of Distribution" contained in the Registration
Statement shall not provide for any firm commitment underwriting
of the Parent Stock, and the distribution of the Parent Stock
under the Registration Statement shall not be effected through
any underwriters on a firm commitment basis.
(d) Registration Expenses. Parent shall bear and pay all expenses in
connection with the registration effected pursuant to this
Section 8.10, including, without limitation, (i) all expenses
incident to Parent's performance of or compliance with the
registration rights granted hereunder, including (without
limitation) all registration and filing fees, fees and expenses
of compliance with securities and blue sky laws, printing and
engraving expenses, messenger, telephone and delivery expenses,
and fees and disbursements of counsel for Parent and all
independent certified public accountants, and (ii) the expense of
any annual audit and the fees and expenses incurred in connection
with the listing of the securities to be registered on each of
the securities exchange on which similar securities issued by
Parent are then listed. Notwithstanding the foregoing, Seller
shall pay all underwriting discounts and commissions or broker's
commissions incurred in connection with the sale or other
disposition
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of Parent's Stock for or on behalf of Seller's account and,
except as provided in Section 8.10(d) hereof, all fees and
expenses of legal counsel for Seller.
(e) INDEMNIFICATION. BUYER AND PARENT SHALL INDEMNIFY AND HOLD
HARMLESS, WITH RESPECT TO THE REGISTRATION STATEMENT FILED BY IT,
TO THE FULL EXTENT PERMITTED BY LAW, SELLER AND EACH OTHER PERSON
OR ENTITY, IF ANY, WHO CONTROLS SELLER WITHIN THE MEANING OF
SECTION 15 OF THE SECURITIES ACT (COLLECTIVELY, "HOLDER
INDEMNIFIED PARTIES") AGAINST ALL LOSSES, CLAIMS, DAMAGES,
LIABILITIES AND EXPENSES, JOINT OR SEVERAL, TO WHICH ANY SUCH
HOLDER INDEMNIFIED PARTY MAY BECOME SUBJECT UNDER THE SECURITIES
ACT, THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED, AND ALL
RULES AND REGULATIONS UNDER SUCH ACT, AT COMMON LAW OR OTHERWISE,
INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR EXPENSES
(OR ACTIONS OR PROCEEDINGS, WHETHER COMMENCED OR THREATENED, IN
RESPECT THEREOF) ARISE OUT OF OR ARE BASED UPON (I) ANY UNTRUE
STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT
CONTAINED IN THE REGISTRATION STATEMENT AS CONTEMPLATED HEREBY OR
ANY OMISSION OR ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT
REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS
THEREIN NOT MISLEADING, (II) ANY UNTRUE STATEMENT OR ALLEGED
UNTRUE STATEMENT OF A MATERIAL FACT CONTAINED IN ANY PRELIMINARY,
FINAL OR SUMMARY PROSPECTUS, TOGETHER WITH THE DOCUMENTS
INCORPORATED BY REFERENCE THEREIN (AS AMENDED OR SUPPLEMENTED IF
PARENT SHALL HAVE FILED WITH THE COMMISSION ANY AMENDMENT THEREOF
OR SUPPLEMENT THERETO), OR ANY OMISSION OR ALLEGED OMISSION TO
STATE THEREIN A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR
NECESSARY IN ORDER TO MAKE THE STATEMENTS THEREIN, IN THE LIGHT
OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING,
OR (III) ANY VIOLATION BY PARENT OF ANY FEDERAL, STATE OR COMMON
LAW RULE OR REGULATION APPLICABLE TO PARENT AND RELATING TO
ACTION OF OR INACTION BY PARENT IN CONNECTION WITH ANY SUCH
REGISTRATION; AND IN EACH SUCH CASE, PARENT SHALL REIMBURSE EACH
SUCH HOLDER INDEMNIFIED PARTY FOR ANY REASONABLE LEGAL OR OTHER
EXPENSES INCURRED BY ANY OF THEM IN CONNECTION WITH INVESTIGATING
OR DEFENDING ANY SUCH LOSS, CLAIM, DAMAGE, LIABILITY, EXPENSE,
ACTION OR PROCEEDING; PROVIDED, HOWEVER, THAT PARENT SHALL NOT BE
LIABLE TO ANY SUCH HOLDER INDEMNIFIED PARTY IN ANY SUCH CASE TO
THE EXTENT, THAT ANY SUCH LOSS, CLAIM, DAMAGE, LIABILITY OR
EXPENSE (OR ACTION OR PROCEEDING, WHETHER COMMENCED OR
THREATENED, IN RESPECT THEREOF) ARISES OUT OF OR IS BASED UPON
ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OR OMISSION OR
ALLEGED
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OMISSION MADE IN THE REGISTRATION STATEMENT OR AMENDMENT THEREOF
OR SUPPLEMENT THERETO OR IN ANY SUCH PRELIMINARY, FINAL OR
SUMMARY PROSPECTUS IN RELIANCE UPON AND IN CONFORMITY WITH
WRITTEN INFORMATION FURNISHED TO PARENT BY OR ON BEHALF OF ANY
SUCH HOLDER INDEMNIFIED PARTY FOR USE IN THE PREPARATION THEREOF.
SUCH INDEMNITY AND REIMBURSEMENT OF EXPENSES AND OTHER
OBLIGATIONS SHALL REMAIN IN FULL FORCE AND EFFECT REGARDLESS OF
ANY INVESTIGATION MADE BY OR ON BEHALF OF THE HOLDER INDEMNIFIED
PARTIES AND SHALL SURVIVE THE TRANSFER OF SUCH SECURITIES BY SUCH
HOLDER INDEMNIFIED PARTIES.
In connection with the Registration Statement, Seller
shall furnish Parent in writing such information as Parent
reasonably requests for use in connection with the Registration
Statement or any prospectus relating thereto. SELLER SHALL
INDEMNIFY AND HOLD HARMLESS, WITH RESPECT TO THE REGISTRATION
STATEMENT FILED BY PARENT, TO THE FULL EXTENT PERMITTED BY LAW,
PARENT AND EACH OTHER PERSON OR ENTITY, IF ANY, WHO CONTROLS
PARENT WITHIN THE MEANING OF SECTION 15 OF THE SECURITIES ACT
(COLLECTIVELY, "PARENT INDEMNIFIED PARTIES") AGAINST ALL LOSSES,
CLAIMS, DAMAGES, LIABILITIES AND EXPENSES, JOINT OR SEVERAL, TO
WHICH ANY SUCH PARENT INDEMNIFIED PARTY MAY BECOME SUBJECT UNDER
THE SECURITIES ACT, THE SECURITIES AND EXCHANGE ACT OF 1934, AS
AMENDED, AND ALL RULES AND REGULATIONS UNDER SUCH ACT, AT COMMON
LAW OR OTHERWISE, INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR EXPENSES (OR ACTIONS OR PROCEEDINGS, WHETHER
COMMENCED OR THREATENED, IN RESPECT THEREOF) ARISE OUT OF OR ARE
BASED UPON (I) ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT
OF A MATERIAL FACT CONTAINED IN ANY INFORMATION PROVIDED TO
PARENT BY SELLER HEREUNDER OR ANY OMISSION OR ALLEGED OMISSION
TO STATE IN ANY OF SUCH INFORMATION A MATERIAL FACT REQUIRED TO
BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS IN ANY OF
SUCH INFORMATION NOT MISLEADING, OR (II) ANY UNTRUE STATEMENT OR
ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT CONTAINED IN ANY
INFORMATION PROVIDED TO PARENT BY SELLER HEREUNDER, TOGETHER
WITH THE DOCUMENTS INCORPORATED BY REFERENCE THEREIN (AS AMENDED
OR SUPPLEMENTED IF SELLER SHALL HAVE PROVIDED PARENT ANY
AMENDMENT THEREOF OR SUPPLEMENT THERETO), OR ANY OMISSION OR
ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT REQUIRED TO BE
STATED THEREIN OR NECESSARY IN ORDER TO MAKE THE STATEMENTS IN
SUCH INFORMATION, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH
THEY WERE MADE, NOT MISLEADING; AND IN EACH SUCH CASE, SELLER
SHALL REIMBURSE EACH SUCH PARENT INDEMNIFIED PARTY FOR ANY
REASONABLE LEGAL OR OTHER EXPENSES INCURRED BY ANY OF
<PAGE> 53
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THEM IN CONNECTION WITH INVESTIGATING OR DEFENDING ANY SUCH
LOSS, CLAIM, DAMAGE, LIABILITY, EXPENSE, ACTION OR PROCEEDING.
SUCH INDEMNITY AND REIMBURSEMENT OF EXPENSES AND OTHER
OBLIGATIONS SHALL REMAIN IN FULL FORCE AND EFFECT REGARDLESS OF
ANY INVESTIGATION MADE BY OR ON BEHALF OF THE PARENT INDEMNIFIED
PARTIES AND SHALL SURVIVE THE TRANSFER OF SUCH SECURITIES BY
SELLER.
(f) Representations, Warranties and Covenants of Seller. In
connection with the transactions contemplated by this Section
8.10, Seller hereby covenants to Buyer and Parent that (i)
neither Seller nor any of its affiliates (as defined in the
Securities Act) will take, directly or indirectly, any action
designed to stabilize (except as may be permitted by applicable
law) or manipulate the price of any security of Parent, and (ii)
Seller shall promptly furnish to Parent any and all information
available to Seller and not otherwise publicly available to
Parent as may be reasonably required by, or as may be necessary
or advisable to comply with the provisions of, the Securities Act
and the Exchange Act, and the rules and regulations promulgated
thereunder, in connection with the preparation and filing of the
Registration Statement pursuant hereto, or any amendment or
supplement thereto, or any preliminary prospectus included
therein. All information to be furnished to Parent by or on
behalf of Seller expressly for use in connection with the
preparation of any preliminary prospectus, any prospectus, the
Registration Statement, or any amendment or supplement thereto,
will not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(g) Registration Rights Not Assignable. Notwithstanding anything else
contain in this Agreement to the contrary, the registration
rights set forth in and contemplated by this Section 8.10 shall
not be assignable, in whole or in part, by Seller without the
prior written consent of Parent.
8.11 - ARBITRATION. If any party disputes or questions its obligations to
perform under this Article VIII, including the application of any indemnities
set forth herein, then such disputes or questions shall be determined through
arbitration proceedings according to Section 5.05 hereof.
8.12 - SURVIVAL. The representations, warranties, covenants, agreements and
indemnities included or provided in Sections 5.03(f) and 5.04(h), this Article
VIII, in Article X, in Article XI, in Article XII, and in the assignments and
agreements to be delivered at the Closing shall survive the Closing. All other
representations, warranties, covenants, certificates, instruments and agreements
contained in or referred to in this Agreement shall terminate at Closing.
<PAGE> 54
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ARTICLE IX
TERMINATION OF AGREEMENT
9.01 - TERMINATION. This Agreement and the transactions contemplated hereby
may be terminated in the following instances:
(a) by Seller if the conditions set forth in Section 6.01 are not
satisfied in all material respects or waived prior to the Closing
Date;
(b) by Buyer if the conditions set forth in Section 6.02 are not
satisfied in all material respects or waived prior to the Closing
Date;
(c) by Seller if at any time prior to the Closing Date (i) the
aggregate of the Defect Value asserted by Buyer for all then
uncured Defective Interests set forth in Sections 5.02(a)(1) and
(3) equals or exceeds $5,000,000 or (ii) the aggregate of the
Defect Value asserted by Buyer for those then uncured Defective
Interests set forth in Sections 5.02(a)(2), (4), (5), (6), (7)
and (8) equals or exceeds Section $5,000,000;
(d) by Buyer if at any time prior to the Closing Date (i) the
aggregate of the Defect Value asserted by Buyer, agreed to by
Seller and/or finally determined by arbitration for all then
uncured Defective Interests set forth in Sections 5.02(a)(1) and
(3) equals or exceeds $5,000,000 or (ii) the aggregate of the
Defect Value asserted by Buyer, agreed to by Seller and/or
finally determined by arbitration for those then uncured
Defective Interests set forth in Sections 5.02(a)(2), (4), (5),
(6), (7) and (8) equals or exceeds $5,000,000;
(e) at any time by the mutual written agreement of Buyer and Seller;
(f) by Buyer if Buyer is not in default under this Agreement if
Closing does not occur for any reason by 5:00 p.m. on March 31,
1998; or
(g) by Seller if Seller is not in default under this Agreement if
Closing does not occur for any reason by 5:00 p.m. on March 31,
1998.
9.02 - LIABILITIES. Nothing contained in this Agreement shall limit
Seller's or Buyer's legal or equitable remedies including, without limitation,
damages for the breach or failure of any representation, warranty, covenant or
agreement contained herein and the right to enforce specific performance of this
Agreement; provided however, (i) neither party hereto shall be liable to the
other for indirect, punitive or consequential damages; (ii) if all conditions
precedent to the obligation of Buyer to close have been satisfied, but Buyer
refuses to close, Seller shall have the option to either pursue specific
performance or receive the Earnest Money
<PAGE> 55
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as liquidated damages, and if Seller receives the Earnest Money as liquidated
damages pursuant to Article X hereof, then Seller shall have no further recourse
against Buyer; (iii) if all conditions precedent to the obligation of Seller to
close have been satisfied, but Seller refuses to close, Buyer's sole remedy
shall be to either (A) enforce specific performance or (B)(1) have the Earnest
Money returned, (2) receive within five (5) business days from termination, as
liquidated damages from Seller, the sum of $6,100,000, and (3) terminate this
Agreement; and (iv) Seller shall have no liability to Buyer if Buyer terminates
this Agreement because any representation or warranty made by Seller herein is
incorrect.
ARTICLE X
EARNEST MONEY
Upon the execution of this Agreement, Buyer has deposited into escrow with
Bank One, N.A. in Fort Worth, Texas (the "Escrow Agent"), Six Million One
Hundred Thousand and No/100 Dollars ($6,100,000.00) as earnest money (the
"Earnest Money"). At closing, the Earnest Money, less any costs or fees
incurred, plus any interest earned thereon shall be applied against the Purchase
Price. If this transaction fails to close due to any breach by Buyer of the
terms, conditions, representations and warranties found in this Agreement, then
at the election of Seller, the Earnest Money and all interest earned thereon may
be delivered to Seller as liquidated damages. If this transaction fails to
close, due to any breach by Seller of the terms, conditions, representations and
warranties found in this Agreement, then the Earnest Money and all interest
earned thereon shall be delivered to Buyer. If this transaction fails to close
for any other reason whatsoever, then the Earnest Money and all interest earned
thereon shall be delivered to Buyer. Seller and Buyer agree to give the Escrow
Agent joint instructions for the delivery of the Earnest Money, together with
any interest earned thereon, in accordance with the terms of this Agreement
ARTICLE XI
INDEMNIFICATION
11.01 - RIGHT TO EMPLOY COUNSEL.
(a) When any claim, action, or suit shall be filed or asserted in
writing against any party which is indemnifiable under the terms
of this Agreement, the indemnified party shall promptly notify
the indemnifying party of the same in writing, specifying in
detail the basis of such claim and the facts pertaining thereto,
and the indemnifying party shall, at its option, have the right
to assume the defense thereof or participate in the defense
thereof and to employ its own legal counsel in connection with
such defense. Failure of the indemnified party to notify the
indemnifying party of such claim, action, or suit within twenty
(20) calendar days after
<PAGE> 56
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notice to the indemnified party of such claim, action, or suit
shall constitute a waiver of its rights under this Article,
unless such failure to notify within such time period shall not
prejudice the rights of the indemnifying party in respect of such
claim, action or suit, in which case prompt notification as
provided above shall be sufficient.
(b) The indemnified party shall have the right to employ counsel
separate from counsel employed by the indemnifying party in any
such action and to participate in the defense thereof, but the
fees and expenses of such counsel employed by the indemnified
party shall be at the sole expense of the indemnified party
unless (i) the indemnifying party shall have elected not or shall
have failed to assume or participate in the defense thereof, (ii)
the employment thereof has been specifically authorized by the
indemnifying party in writing, or (iii) the parties to any such
action (including any impleaded parties) include both the
indemnifying and indemnified party, and the indemnified party
shall have been advised by its counsel that there may be one or
more legal defenses available to it which are different from or
additional to those available to the indemnifying party (in any
which case (i), (ii) or (iii) above the indemnifying party shall
not have the right to assume the defense of such action on behalf
of the indemnified party and the fees and expenses of such
counsel employed by the indemnified party shall be at the sole
expense of the indemnifying party).
(c) Prior to effectuating any settlement of any such action or
proceeding, the indemnified party shall furnish the indemnifying
party with written notice of any proposed settlement in
sufficient time to allow the indemnifying party to act thereon.
The indemnifying party shall not be liable for any settlement of
any such action or proceeding effected without the written
consent of the indemnifying party. The indemnifying party shall
not effect a settlement of any claim without the written consent
of the indemnified party unless the indemnifying party secures
the complete release of the indemnified party as a part of such
settlement.
11.02 - CLAIM REIMBURSEMENT AND REDUCTION.
(a) Should the indemnified party realize any benefit, including any
tax benefit, resulting from any loss, liability, cost or damage
for which such indemnified party has been indemnified under this
Article, such indemnified party shall reimburse the indemnifying
party, at the time such benefit is realized, an amount equal to
the dollar amount of such benefit so realized.
<PAGE> 57
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(b) Any claim shall be reduced to the extent of any third party
insurance or condemnation payment actually received by the
indemnified party or, alternatively, at the option of the
indemnified party, the rights of the indemnified party against
any insurer or governmental unit with respect to such claim shall
be assigned to the indemnifying party.
ARTICLE XII
GENERAL
12.01 - EXHIBITS. All Exhibits are hereby incorporated in this Agreement by
reference and constitute a part of this Agreement. Each party to this Agreement
and its counsel has received a complete set of Exhibits prior to and as of the
execution of this Agreement.
12.02 - EXPENSES. All fees, costs and expenses incurred by Buyer or Seller
in negotiating this Agreement or in consummating the transactions contemplated
by this Agreement shall be paid by the party incurring the same including,
without limitation, legal and accounting fees, costs and expenses.
12.03 - NOTICES. All notices or communications required or permitted under
this Agreement shall be in writing, and any notices or communications hereunder
shall be deemed to have been duly made if delivered by (i) hand, (ii) overnight
delivery service, (iii) telecopy, or (iv) three days after being placed in first
class certified mail, postage prepaid, with return receipt requested to the
following addresses:
All notices to Seller shall be delivered to:
Cometra Energy, L.P.
500 Throckmorton, Suite 2500
Fort Worth, Texas 76102
Telecopy: 817-877-4464
All notices to Buyer shall be delivered to:
Pioneer Natural Resources USA, Inc.
1400 Williams Square West
5205 N. O'Connor Blvd.
Irving, Texas 75039-3746
Telecopy: 972-444-4395
The address at which any party hereto is to receive notice may be changed from
time to time by such party by giving notice of the new address to all other
parties hereto. Any notice or
<PAGE> 58
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communication given by telecopy shall be promptly confirmed by delivery of a
copy of such notice or communication by hand or overnight delivery service.
12.04 - AMENDMENTS. This Agreement may not be amended nor any rights
hereunder waived except by an instrument in writing signed by the party to be
charged with such amendment or waiver and delivered by such party to the party
claiming the benefit of such amendment or waiver.
12.05 - HEADINGS. The headings of the articles and sections of this
Agreement are for guidance and convenience of reference only and shall not limit
or otherwise affect any of the terms or provisions of this Agreement.
12.06 - COUNTERPARTS. This Agreement may be executed by Buyer and Seller in
any number of counterparts, each of which shall be deemed an original
instrument, but all of which together shall constitute but one and the same
instrument.
12.07 - REFERENCES. References made in this Agreement, including use of a
pronoun, shall be deemed to include where applicable, masculine, feminine,
singular or plural, individuals, partnerships or corporations. As used in this
Agreement, "person" shall mean any natural person, corporation, partnership,
trust, estate or other entity.
12.08 - GOVERNING LAW. This Agreement and the transactions contemplated
hereby shall be construed in accordance with, and governed by, the laws of the
State of Texas.
12.09 - ENTIRE AGREEMENT. This Agreement (including the Exhibits hereto)
constitutes the entire understanding among the parties with respect to the
subject matter hereof, superseding all negotiations, prior discussions and prior
agreements and understandings relating to such subject matter.
12.10 - PARTIES IN INTEREST. This Agreement shall be binding upon and shall
inure to the benefit of, the parties hereto and, except as otherwise prohibited,
their respective successors and assigns; and except as otherwise stated herein,
nothing contained in this Agreement, or implied herefrom, is intended to confer
upon any other person or entity any benefits, rights or remedies.
12.11 - ASSIGNMENTS. Neither Buyer nor Seller may assign all or any portion
of their respective rights or delegate any portion of their duties hereunder
without the prior written consent of the other, which consent shall not be
unreasonably withheld; provided, however, Buyer, at any time up to and including
two (2) business days prior to Closing, may provide notice in writing to Seller
of the party or parties to receive title to the Assets or any part thereof and
the documents conveying title or ownership interest to said Assets shall be
accordingly modified prior to Closing, and provided further that after Closing,
Buyer's interests in the Assets which are conveyed hereunder are freely
assignable by Buyer without any written consent by Seller.
<PAGE> 59
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12.12 - PUBLIC ANNOUNCEMENTS. The parties hereto agree that prior to making
any public announcement or statement with respect to the transactions
contemplated by this Agreement, the party desiring to make such public
announcement or statement shall consult with the other party hereto and exercise
their best efforts to agree upon the text of a joint public announcement or
statement to be made solely by Seller or Buyer, as the case may be; provided,
however, if Seller or Buyer is required by law to make such public announcement
or statement, then the same may be made without the approval of the other party.
The opinion of counsel of either party shall be conclusive evidence of such
requirement by law. Buyer may issue a press release similar in content to that
attached as Exhibit "S" hereto and made a part hereof and Buyer may discuss the
contents of same and the contemplated transaction with analysts, investors and
interested parties as is customary in transactions of this kind.
12.13 - NOTICES AFTER CLOSING. Buyer and Seller hereby agree that each
party shall notify the other of its receipt, after the Closing Date, of any
instrument, notification or other document affecting the Assets while owned by
such other party.
12.14 - SEVERABILITY. If a court of competent jurisdiction determines that
any clause or provision of this agreement is void, illegal or unenforceable, the
other clauses and provisions of the Agreement shall remain in full force and
effect and the clauses and provisions that are determined to be void, illegal or
unenforceable shall be limited so that they shall remain in effect to the extent
permissible by law.
12.15 - TIME IS OF THE ESSENCE. It is understood and agreed that time is of
the essence in this Agreement.
IN WITNESS WHEREOF, the parties have executed or caused the Agreement to be
executed as of the day and year first above written.
COMETRA ENERGY, L.P.
By: AVENEG, INC., Its General Partner
By:
------------------------------------
Mark W. Young,
Chief Executive Officer
SELLER
PIONEER NATURAL RESOURCES USA, INC.
By:
------------------------------------
Timothy L. Dove, Executive Vice
President, Business Development
BUYER
<PAGE> 60
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CONFIRMATIONS
American Cometra, Inc. joins in the execution of this Agreement to confirm
its agreement to perform those obligations of this Agreement that are to be
performed by an Affiliate of Seller, but only to the extent that the context any
of such obligations requires performance by American Cometra, Inc. as an
Affiliate of Seller.
AMERICAN COMETRA, INC.
By:
------------------------------------
Mark W. Young, Chief Executive Officer
Pioneer Natural Resources Company joins in the execution of this Agreement
to confirm its obligations under Section 8.10 of this Agreement.
PIONEER NATURAL RESOURCES COMPANY
By:
------------------------------------
Timothy L. Dove, Executive Vice
President, Business Development
<PAGE> 1
EXHIBIT 10.23
PIONEER NATURAL RESOURCES COMPANY
INDEMNIFICATION AGREEMENT
This Agreement ("Agreement") is made and entered into as of the 8th
day of August, 1997 (the "Effective Date"), by and between Pioneer Natural
Resources Company, a Delaware corporation (the "Company"), and Scott D.
Sheffield ("Indemnitee").
RECITALS
A. Highly competent and experienced persons are becoming more
reluctant to serve corporations as directors, executive officers or in other
capacities unless they are provided with adequate protection through insurance
and adequate indemnification against inordinate risks of claims and actions
against them arising out of their service to and activities on behalf of the
Company.
B. The Board of Directors of the Company (the "Board") has
determined that the inability to attract and retain such persons would be
detrimental to the best interests of the Company and its stockholders and that
the Company should act to assure such persons that there will be increased
certainty of such protection in the future.
C. The Board has also determined that it is reasonable, prudent
and necessary for the Company, in addition to purchasing and maintaining
directors's and officers's liability insurance (or otherwise providing for
adequate arrangements of self-insurance), contractually to obligate itself to
indemnify such persons to the fullest extent permitted by applicable law so
that they will serve or continue to serve the Company free from undue concern
that they will not be so indemnified.
D. Indemnitee is willing to serve, continue to serve and to take
on additional service for or on behalf of the Company on the condition that he
be so indemnified to the fullest extent permitted by law.
E. Article Twelfth of the Amended and Restated Certificate of
Incorporation of the Company provides for indemnification, advancement of
expenses, arrangements of insurance and self-insurance and specifically
authorizes the Company to enter into indemnification agreements that
contractually provide to indemnitees the benefits of the provisions of Article
Twelfth and other indemnification protections to the fullest extent permitted
by law.
In consideration of the foregoing and the mutual covenants herein
contained, and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereby agree as follows:
<PAGE> 2
ARTICLE I
CERTAIN DEFINITIONS
As used herein, the following words and terms shall have the following
respective meanings (whether singular or plural):
"Acquiring Person" means any person other than (i) the Company, (ii)
any of the Company's s Subsidiaries, (iii) any employee benefit plan of the
Company or of a Subsidiary of the Company or of a Company owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, or (iv) any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or of a Subsidiary of the Company or of a Company owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
"Change in Control" means the occurrence of any of the following
events:
(i) The acquisition by any person of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (x) the then outstanding shares of Common Stock of the Company (the
"Outstanding Company Common Stock") or (y) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this Subparagraph (i), the following
acquisitions shall not constitute a Change of Control: (A) any acquisition
directly from the Company, (B) any acquisition by the Company, (C) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (D)
any acquisition by any corporation pursuant to a transaction which complies
with clauses (A), (B) and (C) of paragraph (iii) below; or
(ii) Members of the Incumbent Board cease for any reason to
constitute at least a majority of the Board; or
(iii) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company or an acquisition of assets of another corporation (a "Business
Combination"), in each case, unless, following such Business Combination, (A)
all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company
<PAGE> 3
Voting Securities, as the case may be, (B) no person (excluding any employee
benefit plan (or related trust) of the Company or the corporation resulting
from such Business Combination) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership results solely from ownership of the Company
that existed prior to the Business Combination and (C) at least a majority of
the members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing
for such Business Combination; or
(iv) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
"Claim" means an actual or threatened claim or request for relief
which is or may be made by reason of anything done or not done by Indemnitee
in, or by reason of any event or occurrence related to, Indemnitee's
Corporate Status.
"Corporate Status" means the status of a person who is, becomes or was
a director, officer, employee, agent or fiduciary of the Company or is, becomes
or was serving at the request of the Company as a director, officer, partner,
venturer, proprietor, trustee, employee, agent, fiduciary or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other enterprise.
For purposes of this Agreement, the Company agrees that Indemnitee's service on
behalf of or with respect to any Subsidiary of the Company shall be deemed to
be at the request of the Company.
"DGCL" means the Delaware General Corporation Law and any successor
statute thereto, as either of them may from time to time be amended.
"Disinterested Director" with respect to any request by Indemnitee for
indemnification hereunder, means a director of the Company who at the time of
the vote is not a named defendant or respondent in the Proceeding in respect of
which indemnification is sought by Indemnitee.
"Expenses" means all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees and all other disbursements, costs or expenses of the types customarily
incurred in connection with prosecuting, defending (including affirmative
defenses and counterclaims), preparing to prosecute or defend, investigating or
being or preparing to be a witness in, or participating in or preparing to
participate in (including on appeal), a Proceeding.
"Incumbent Board" means the individuals who, as of the date of this
Agreement, constitute the Board and any other individual who becomes a director
of the Company after that date and whose election or appointment by the Board
or nomination for election by the Corporation's s stockholders was approved by
a vote of at least a majority of the directors then comprising the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors
<PAGE> 4
or other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Incumbent Board.
"Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither contemporaneously
is, nor in the five years theretofore has been, retained to represent: (a) the
Company or Indemnitee in any matter material to either such party (other than
as Independent Counsel under this Agreement or similar agreements, (b) any
other party to the Proceeding giving rise to a claim for indemnification
hereunder or (c) the beneficial owner, directly or indirectly, of securities of
the Company representing 40% or more of the combined voting power of the
Corporation's s then outstanding voting securities (other than, in each such
case, with respect to matters concerning the rights of Indemnitee under this
Agreement, or of other indemnitees under similar indemnification agreements).
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee's s rights under
this Agreement.
"person" means any individual, entity or group (within the meaning of
Sections 13(d)(3) and 14(d)(2) of the Exchange Act).
"Potential Change in Control" shall be deemed to have occurred if (i)
the Company enters into an agreement, the consummation of which would result in
the occurrence of a Change in Control; (ii) any person (including the Company)
publicly announces an intention to take or consider taking actions that, if
consummated, would constitute a Change in Control; (iii) any Acquiring Person
who is or becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of securities of the Company representing
10% or more of the combined voting power of the then Outstanding Company Voting
Securities increases his beneficial ownership of such securities by 5% or more
over the percentage so owned by the person on the date hereof; or (iv) the
Board adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change of Control has occurred.
"Proceeding" means any threatened, pending or completed action, suit,
arbitration, investigation, alternate dispute resolution mechanism,
administrative hearing or any other proceeding (including, without limitation,
any securities laws action, suit, arbitration, alternative dispute resolution
mechanism, hearing or procedure) whether civil, criminal, administrative,
arbitrative or investigative and whether or not based upon events occurring, or
actions taken, before the date hereof, and any appeal in or related to any such
action, suit, arbitration, investigation, hearing or proceeding and any inquiry
or investigation (including discovery), whether conducted by the Company or any
other party, that Indemnitee in good faith believes could lead to any appeal in
or related to, any such action, suit, arbitration, alternative dispute
resolution mechanism, hearing or other proceeding.
"Subsidiary" means, with respect to any person, any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by that person.
<PAGE> 5
"Voting Securities" means any securities that vote generally in the
election of directors, in the admission of general partners, or in the
selection of any other similar governing body.
ARTICLE II
SERVICES BY INDEMNITEE
Indemnitee is serving as Director, President & Chief Executive Officer
of the Company. Indemnitee may from time to time also agree to serve, as the
Company may request from time to time, in another capacity for the Company
(including another officer or director position) or as a director, officer,
partner, venturer, proprietor, trustee, employee, agent, fiduciary or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other enterprise.
Indemnitee and the Company each acknowledge that they have entered into this
Agreement as a means of inducing Indemnitee to serve, or continue to serve,
the Company in such capacities. Indemnitee may at any time and for any reason
resign from such position or positions (subject to any other contractual
obligation or any obligation imposed by operation of law). The Company shall
have no obligation under this Agreement to continue Indemnitee in any such
position or positions.
ARTICLE III
INDEMNIFICATION
Section 3.1 General. Subject to the provisions set forth in
Article V, the Company shall indemnify, and advance Expenses to, Indemnitee to
the fullest extent permitted by applicable law in effect on the date hereof and
to such greater extent as applicable law may thereafter from time to time
permit. The other provisions set forth in this Agreement are provided in
addition to and as a means of furtherance and implementation of, and not in
limitation of, the obligations expressed in this Article III. No requirement,
condition to or limitation of any right to indemnification III, or to
advancement of Expenses under this Article III, shall in any way limit the
rights of Indemnitee under Section 7.3.
Section 3.2 Additional Indemnity of the Company. Indemnitee
shall be entitled to indemnification pursuant to this Section 3.2 if, by reason
of anything done or not done by Indemnitee in, or by reason of any event or
occurrence related to, Indemnitee's s Corporate Status, Indemnitee is, was or
becomes, or is threatened to be made, a party to, or witness or other
participant in any Proceeding. Pursuant to this Section 3.2, Indemnitee shall
be indemnified against any and all Expenses, judgments, penalties (including
excise or similar taxes), fines and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with or
in respect of any such Expenses, judgments, penalties, fines and amounts paid
in settlement) actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any Claim, issue or matter therein.
Notwithstanding the foregoing, the obligations of the Company under this
Section 3.2 shall be subject to the condition that no determination (which, in
any case in which Independent Counsel is involved, shall be in a form of a
written opinion) shall have been made
<PAGE> 6
pursuant to Article V that Indemnitee would not be permitted to be indemnified
under applicable law. Nothing in this Section 3.2 shall limit the benefits of
Section 3.1 or any other Section hereunder.
Section 3.3 Advancement of Expenses. The Company shall pay all
reasonable Expenses incurred by or on behalf of Indemnitee (or, if applicable,
reimburse Indemnitee for any and all Expenses reasonable incurred by Indemnitee
and previously paid by Indemnitee) in connection with any Claim or Proceeding,
whether brought by the Company or otherwise, in advance of any determination
respecting entitlement to indemnification pursuant to Article IV hereof within
10 days after the receipt by the Company of (a) a written request from
Indemnitee requesting such payment or payments from time to time, whether prior
to or after final disposition of such Proceeding, and (b) a written affirmation
from Indemnitee of his good faith belief that he has met the standard of
conduct necessary for Indemnitee to be permitted to be indemnified under
applicable law. Such statement or statements shall reasonably evidence the
Expenses incurred by Indemnitee. Any such payment by the Company is referred
to in this Agreement as an "Expense Advance." In connection with any request
for an Expense Advance, if requested by the Company, Indemnitee or Indemnitee's
s counsel shall also submit an affidavit stating that the Expenses incurred
were reasonable. Any dispute as to the reasonableness of any Expense shall not
delay an Expense Advance by the Company, and the Company agrees that any such
dispute shall be resolved only upon the disposition or conclusion of the
underlying Claim against the Indemnitee. Indemnitee hereby undertakes and
agrees (which agreement shall be an unsecured obligation of Indemnitee) that he
will reimburse and repay the Company without interest for any Expenses Advance
to the extent that it shall ultimately be determined (in a final adjudication
by a court from which there is no further right of appeal or in a final
adjudication of an arbitration pursuant to Section 5.1 if Indemnitee elects to
seek such arbitration) that Indemnitee is not entitled to be indemnified by the
Company against such Expenses.
Section 3.4 Indemnification for Additional Expenses. The Company
shall indemnity Indemnitee against any and all costs and expenses (including
attorneys's and expert witnesses's fees) and, if requested by Indemnitee,
shall (within two business days of that request) advance those costs and
expenses to Indemnitee, that are incurred by Indemnitee in connection with any
claim asserted against or action brought by Indemnitee for (i) indemnification
or an Expense Advance by the Company under this Agreement or any other
agreement or provision of the Corporation's s Certificate of Incorporation or
Bylaws now or hereafter in effect relating to any Claim or Proceeding, or (ii)
recovery under any directors's and officers's liability insurance policies
maintained by the Company, regardless of whether Indemnitee ultimately is
determined to be entitled to that indemnification, advance expense payment, or
insurance recovery, as the case may be.
Section 3.5 Partial Indemnity. If Indemnitee is entitled under
any provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgments, fines, penalties, and amounts paid in
settlement of a Claim or Proceeding but not, however, for all of the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any
other provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all Claims or
Proceedings, or in defense of any issue or matter therein, including dismissal
<PAGE> 7
without prejudice, Indemnitee shall be indemnified against all Expenses
incurred in connection therewith.
ARTICLE IV
PROCEDURE FOR DETERMINATION OF ENTITLEMENT
TO INDEMNIFICATION
Section 4.1 Request by Indemnitee. To obtain indemnification
under this Agreement, Indemnitee shall submit to the Company a written request,
including therein or therewith such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to indemnification. The
Secretary or an Assistant Secretary of the Company shall, promptly upon receipt
of such a request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification.
Section 4.2 Determination of Request. Upon written request by
Indemnitee for indemnification pursuant to the first sentence of Section 4.1
hereof, a determination, if required by applicable law, with respect to whether
Indemnitee is permitted under applicable law to be indemnified shall be made in
accordance with the terms of Section 4.5(b), in the specific case as follows:
(a) If a Potential Change in Control or a Change in
Control shall have occurred, by Independent Counsel (selected in
accordance with Section 4.3) in a written opinion to the Board and
Indemnitee, unless Indemnitee shall request that such determination be
made by the Board, or a committee of the Board, in which case by the
person or persons or in the manner provided for in clause (i) or (ii)
of paragraph (b) below; or
(b) If a Potential Change in Control or a Change in
Control shall not have occurred, (i) by the Board by a majority vote
of a quorum of the Board consisting of Disinterested Directors, or
(ii) if there are no Disinterested Directors, or if a quorum of the
Board consisting of Disinterested Directors is not obtainable, by a
majority vote of a committee of the Board designated to act in the
matter by a majority vote of the entire Board, consisting solely of
two or more Disinterested Directors, or (iii) by Independent Counsel
selected by the Board or a committee of the Board by a vote as set
forth in clauses (i) or (ii) of this paragraph (b), or if such quorum
is not obtainable or such a committee cannot be established, by a
majority vote of all directors, or (iv) if Indemnitee and the Company
agree, by the stockholders of the Company in a vote that excludes the
shares held by directors who are not Disinterested Directors.
If it is so determined that Indemnitee is permitted to be indemnified under
applicable law, payment to Indemnitee shall be made within 10 days after such
determination. Nothing contained in this Agreement shall require that any
determination be made under this Section 4.2 prior to the disposition or
conclusion of a Claim or Proceeding against the Indemnitee; provided, however,
that Expense Advances shall continue to be made by the Company pursuant to, and
to the extent required
<PAGE> 8
by, the provisions of Article III. Indemnitee shall cooperate with the person
or persons making such determination with respect to Indemnitee's s entitlement
to indemnification, including providing to such person upon reasonable advance
request any documentation or information that is not privileged or otherwise
protected from disclosure and that is reasonably available to Indemnitee and
reasonably necessary to such determination. Any costs or expenses (including
attorneys's fees and disbursements) incurred by Indemnitee in so cooperating
with the person or persons making such determination shall be borne by the
Company (irrespective of the determination as to Indemnitee's s entitlement to
indemnification) and the Company shall indemnify and hold harmless Indemnitee
therefrom.
Section 4.3 Independent Counsel. If a Potential Change in
Control or a Change in Control shall not have occurred and the determination of
entitlement to indemnification is to be made by Independent Counsel, the
Independent Counsel shall be selected by (a) a majority vote of the
Disinterested Directors, even though less than a quorum of the Board or (b) if
there are no Disinterested Directors, by a majority vote of the Board, and the
Company shall give written notice to Indemnitee, within 10 days after receipt
by the Company of Indemnitee's request for indemnification, specifying the
identity and address of the Independent Counsel so selected. If a Potential
Change in Control or a Change in Control shall have occurred and the
determination of entitlement to indemnification is to be made by Independent
Counsel, the Independent Counsel shall be selected by Indemnitee, and
Indemnitee shall give written notice to the Company, within 10 days after
submission of Indemnitee's s request for indemnification, specifying the
identity and address of the Independent Counsel so selected (unless Indemnitee
shall request that such selection be made by the Disinterested Directors or a
committee of the Board, in which event the Company shall give written notice to
Indemnitee within 10 days after receipt of Indemnitee's s request for the Board
or a committee of the Disinterested Directors to make such selection,
specifying the identity and address of the Independent Counsel so selected).
In either event, (i) such notice to Indemnitee or the Company, as the case may
be, shall be accompanied by a written affirmation of the Independent Counsel so
selected that it satisfies the requirements of the definition of "Independent
Counsel" in Article I and that it agrees to serve in such capacity and (ii)
Indemnitee or the Company, as the case may be, may, within seven days after
such written notice of selection shall have been given, deliver to the Company
or to Indemnitee, as the case may be, a written objection to such selection.
Any objection to selection of Independent Counsel pursuant to this Section 4.3
may be asserted only on the ground that the Independent Counsel so selected
does not meet the requirements of the definition of "Independent Counsel" in
Article I, and the objection shall set forth with particularity the factual
basis of such assertion. If such written objection is timely made, the
Independent Counsel so selected may not serve as Independent Counsel unless and
until a court of competent jurisdiction (the "Court") has determined that such
objection is without merit. In the event of a timely written objection to a
choice of Independent Counsel, the party originally selecting the Independent
Counsel shall have seven days to make an alternate selection of Independent
Counsel and to give written notice of such selection to the other party, after
which time such other party shall have five days to make a written objection to
such alternate selection. If, within 30 days after submission of Indemnitee's
s request for indemnification pursuant to Section 4.1, no Independent Counsel
shall have been selected and not objected to, either the Company or Indemnitee
may petition the Court for resolution of any objection that shall have been
made by the Company or Indemnitee to the
<PAGE> 9
other's selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the Court or by such other person
as the Court shall designate, and the person with respect to whom an objection
is so resolved or the person so appointed shall act as Independent Counsel
under Section 4.2. The Company shall pay any and all reasonable fees and
expenses incurred by such Independent Counsel in connection with acting
pursuant to Section 4.2, and the Company shall pay all reasonable fees and
expenses incident to the procedures of this Section 4.3, regardless of the
manner in which such Independent Counsel was selected or appointed. Upon the
due commencement of any judicial proceeding or arbitration pursuant to Section
5.1, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 4.4 Establishment of a Trust. In the event of a
Potential Change in Control or a Change in Control, the Company shall, upon
written request by the Indemnitee, create a trust for the benefit of the
Indemnitee (the "Trust") and from time to time upon written request of the
Indemnitee shall fund the Trust in an amount sufficient to satisfy any and all
Expenses reasonably anticipated at the time of each such request to be incurred
in connection with investigating, preparing for, and defending any Claim, and
any and all judgments, fines, penalties, and settlement amounts of any and all
Claims from time to time actually paid or claimed, reasonably anticipated, or
proposed to be paid. The amount to be deposited in the Trust pursuant to the
foregoing funding obligation shall be determined by the Independent Counsel (or
other person(s) making the determination of whether Indemnitee is permitted to
be indemnified by applicable law). The terms of the Trust shall provide that,
upon a Change in Control, (i) the Trust shall not be revoked or the principal
thereof invaded, without the written consent of the Indemnitee; (ii) the
trustee of the Trust shall advance, within ten business days of a request by
Indemnitee, any and all reasonable Expenses to Indemnitee, any required
determination concerning the reasonableness of the Expenses to be made by the
Independent Counsel (and Indemnitee hereby agrees to reimburse the Trust under
the circumstances in which Indemnitee would be required to reimburse the
Company for Expenses Advances under Section 3.3 of this Agreement); (iii) the
Trust shall continue to be funded by the Company in accordance with the funding
obligation set forth above; (iv) the trustee of the Trust shall promptly pay to
Indemnitee all amounts for which Indemnitee shall be entitled to
indemnification pursuant to this Agreement; and (v) all unexpended funds in the
Trust shall revert to the Company upon a final determination by the Independent
Counsel or a court of competent jurisdiction, as the case may be, that
Indemnitee has been fully indemnified under the terms of this Agreement. The
trustee of the Trust shall be chosen by Indemnitee and shall be an institution
that is not affiliated with the Indemnitee. Nothing in this Section 4.4 shall
relieve the Company of any of its obligations under this Agreement.
Section 4.5 Presumptions and Effect of Certain Proceedings.
i. The Indemnitee shall be presumed to be
entitled to indemnification under this Agreement upon
submission of a request for indemnification under
Section 4.1, and the Company shall have the burden of
proof in overcoming that presumption in reaching a
determination contrary to that presumption. Such
presumption shall be used by Independent Counsel (or
other person or
<PAGE> 10
persons determining entitlement to indemnification)
as a basis for a determination of entitlement to
indemnification unless the Company provides
information sufficient to overcome such presumption
by clear and convincing evidence or unless the
investigation, review and analysis of Independent
Counsel (or such other person or persons) convinces
him by clear and convincing evidence that the
presumption should not apply.
ii. If the person or persons empowered or
selected under Article IV of this Agreement to
determine whether Indemnitee is entitled to
indemnification shall not have made a determination
within 60 days after receipt by the Company of the
request by Indemnitee therefor, the requisite
determination of entitlement to indemnification shall
be deemed to have been made and Indemnitee shall be
entitled to such indemnification, absent (i) a
knowing misstatement by Indemnitee of a material
fact, or knowing omission of a material fact
necessary to make Indemnitee's s statement not
materially misleading, in connection with the request
for indemnification, or (ii) a prohibition of such
indemnification under applicable law; provided,
however, that such 60-day period may be extended for
a reasonable time, not to exceed an additional 30
days, if the person making the determination with
respect to entitlement to indemnification in good
faith requires such additional time for the obtaining
or evaluating of documentation and/or information
relating to such determination; and provided,
further, that the 60-day limitation set forth in this
Section 4.5(b) shall not apply and such period shall
be extended as necessary (i) if within 30 days after
receipt by the Company of the request for
indemnification under Section 4.1 Indemnitee and the
Company have agreed, and the Board has resolved to
submit such determination to the stockholders of the
Company pursuant to Section 4.2(b) for their
consideration at an annual meeting of stockholders to
be held within 90 days after such agreement and such
determination is made thereat, or a special meeting
of stockholders is called within 30 days after such
receipt for the purpose of making such determination,
such meeting is held for such purpose within 60 days
after having been so called and such determination is
made thereat, or (ii) if the determination of
entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 4.2(a) of
this Agreement, in which case the applicable period
shall be as set forth in Section 5.1(c).
iii. The termination of any Proceeding or of any
Claim, issue or matter by judgment, order, settlement
(whether with or without court approval) or
conviction, or upon a plea of nolo contendere or its
equivalent, shall not (except as otherwise expressly
provided in this Agreement) by itself adversely
affect the rights of Indemnitee to indemnification or
create a presumption that Indemnitee meet any
particular standard of conduct or have any particular
belief or that a court has determined that
indemnification is not permitted by applicable law.
Indemnitee shall be deemed to have been found
<PAGE> 11
liable in respect of any Claim, issue or matter only
after he shall have been so adjudged by the Court
after exhaustion of all appeals therefrom.
ARTICLE V
CERTAIN REMEDIES OF INDEMNITEE
Section 5.1 Indemnitee Entitled to Adjudication in an Appropriate
Court. If (a) a determination is made pursuant to Article IV that Indemnitee is
not entitled to indemnification under this Agreement; (b) there has been any
failure by the Company to make timely payment or advancement of any amounts due
hereunder; or (c) the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 4.2 and such determination
shall not have been made and delivered in a written opinion within 90 days
after the latest of (i) such Independent Counsel's s being appointed, (ii) the
overruling by the Court of objections to such counsel's s selection or (iii)
expiration of all periods for the Company or Indemnitee to object to such
counsel's s selection, Indemnitee shall be entitled to commence an action
seeking an adjudication in the Court of his entitlement to such indemnification
or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek
an award in arbitration to be conducted by a single arbitrator pursuant to the
commercial arbitration rules of the American Arbitration Association.
Indemnitee shall commence such action seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has
the right to commence such action pursuant to this Section 5.1, or such right
shall expire. The Company agrees not to oppose Indemnitee's s right to seek
any such adjudication or award in arbitration.
Section 5.2 Adverse Determination Not to Affect any Judicial
Proceeding. If a determination shall have been made pursuant to Article IV
that Indemnitee is not entitled to indemnification under this Agreement, any
judicial proceeding or arbitration commenced pursuant to this Article V shall
be conducted in all respects as a de novo trial or arbitration on the merits,
and Indemnitee shall not be prejudiced by reason of such initial adverse
determination. In any judicial proceeding or arbitration commenced pursuant to
this Article V, Indemnitee shall be presumed to be entitled to indemnification
or advancement of Expenses, as the case may be, under this Agreement and the
Company shall have the burden of proof in overcoming such presumption and to
show by clear and convincing evidence that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
Section 5.3 Company Bound by Determination Favorable to
Indemnitee in any Judicial Proceeding or Arbitration. If a determination shall
have been made or deemed to have been made pursuant to Article IV that
Indemnitee is entitled to indemnification, the Company shall be irrevocably
bound by such determination in any judicial proceeding or arbitration commenced
pursuant to this Article V, and shall be precluded from asserting that such
determination has not been made or that the procedure by which such
determination was made is not valid, binding and enforceable, in each such case
absent (a) a knowing misstatement by Indemnitee of a material fact, or a
knowing omission of a material fact necessary to make a statement by Indemnitee
not materially misleading, in connection with the request for indemnification
or (b) a prohibition of such indemnification under applicable law.
<PAGE> 12
Section 5.3 Company Bound by the Agreement. The Company shall be
precluded from asserting in any judicial proceeding or arbitration commenced
pursuant to this Article V that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any
such court or before any such arbitrator that the Company is bound by all the
provisions of this Agreement.
Section 5.4 Indemnitee Entitled to Expenses of Judicial
Proceeding. If Indemnitee seeks a judicial adjudication of or an award in
arbitration to enforce his rights under, or to recover damages for breach of,
this Agreement, Indemnitee shall be entitled to recover from the Company, and
the Company shall indemnify Indemnitee against, any and all expenses (of the
types described in the definition of Expenses in Article I) actually and
reasonably incurred by him in such judicial adjudication or arbitration but
only if Indemnitee prevails therein. If it shall be determined in such
judicial adjudication or arbitration that Indemnitee is entitled to receive
part but not all of the indemnification or advancement of expenses or other
benefit sought, the expenses incurred by Indemnitee in connection with such
judicial adjudication or arbitration shall be equitably allocated between the
Company and Indemnitee. Notwithstanding the foregoing, if a Change in Control
shall have occurred, Indemnitee shall be entitled to indemnification under this
Section 5.5 regardless of whether Indemnitee ultimately prevails in such
judicial adjudication or arbitration.
ARTICLE VI
CONTRIBUTION
Section 6.1 Contribution Payment. To the extent the
indemnification provided for under any provision of this Agreement is
determined (in the manner hereinabove provided) not to be permitted under
applicable law, then in the event Indemnitee was, is, or becomes a party to or
witness or other participant in, or is threatened to be made a party to or
witness or other participant in, a Proceeding by reason of (or arising in part
out of) Indemnitee's Corporate Status, the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount of any and all Expenses, judgments,
fines, or penalties assessed against or incurred or paid by Indemnitee on
account of such Proceeding and any and all amounts paid in settlement of that
Proceeding (including all interest, assessments, and other charges paid or
payable in connection with or in respect of such Expenses, judgments, fines,
penalties, or amounts paid in settlement) for which such indemnification is not
permitted ("Contribution Amounts"), in such proportion as is appropriate to
reflect the relative fault with respect to the subject matter of the Proceeding
giving rise to the Contribution Amounts of Indemnitee, on the one hand, and of
the Company and any and all other parties (including officers and directors of
the Company other than Indemnitee) who may be at fault with respect to such
matter (collectively, including the Company, the "Third Parties") on the other
hand.
<PAGE> 13
Section 6.2 Relative Fault. The relative fault of the Third
Parties and the Indemnitee shall be determined (i) by reference to the relative
fault of Indemnitee as determined by the court or other governmental agency
assessing the Contribution Amounts or (ii) to the extent such court or other
governmental agency does not apportion relative fault, by the Independent
Counsel (or such other party which makes a determination under Article IV after
giving effect to, among other things, the relative intent, knowledge, access to
information, and opportunity to prevent or correct the subject matter of the
Proceedings and other relevant equitable considerations of each party. The
Company and Indemnitee agree that it would not be just and equitable if
contribution pursuant to this Section 6.2 were determined by pro rata
allocation or by any other method of allocation which does take account of the
equitable considerations referred to in this Section 6.2.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Non-Exclusivity. The rights of Indemnitee to receive
indemnification and advancement of Expenses under this Agreement shall be in
addition to, and shall not be deemed exclusive of, any other rights Indemnitee
shall under the DGCL or other applicable law, the charter or bylaws of the
Company, any other agreement, vote of stockholders or a resolution of
directors, or otherwise. No amendment or alteration of the charter or bylaws
of the Company or any provision thereof shall adversely affect Indemnitee's s
rights hereunder and such rights shall be in addition to any rights Indemnitee
may have under the charter, Bylaws and the DGCL or other applicable law. To the
extent that there is a change in the DGCL or other applicable law (whether by
statute or judicial decision) that allows greater indemnification by agreement
than would be afforded currently under the Corporation's s charter or bylaws
and this Agreement, it is the intent of the parties hereto that the Indemnitee
shall enjoy by virtue of this Agreement the greater benefit so afforded by such
change.
Section 7.2 Insurance and Subrogation.
(a) To the extent that the Company maintains an insurance
policy or policies providing liability insurance for directors,
officers, employees, agents or fiduciaries of the Company or for
individuals serving at the request of the Company as directors,
officers, partners, venturers, proprietors, trustees, employees,
agents, fiduciaries or similar functionaries of another foreign or
domestic corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise, Indemnitee shall be
covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage available for any such
director, officer, employee, agent or fiduciary under such policy or
policies.
(b) In the event of any payment by the Company under this
Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall
execute all papers required and take all action necessary to secure
such rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
<PAGE> 14
(c) The Company shall not be liable under this Agreement
to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such
payment under the Corporation's s charter or bylaws or any insurance
policy, contract, agreement or otherwise.
Section 7.3 Self Insurance of the Company; Other Arrangements.
The parties hereto recognize that the Company may, but is not required to,
procure or maintain insurance or other similar arrangements, at its expense, to
protect itself and any person, including the Indemnitee, who is or was a
director, officer, employee, agent or fiduciary of the Company or who is or was
serving at the request of the Company as a director, officer, partner,
venturer, proprietor, trustee, employee, agent, fiduciary or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other enterprise
against any expense, liability or loss asserted against or incurred by such
person, in such a capacity or arising out of his status as such a person,
whether or not the Company would have the power to indemnify such person
against such expense or liability or loss.
In considering the cost and availability of such insurance, the
Company (through the exercise of the business judgment of its directors and
officers) may, from time to time, purchase insurance which provides for certain
(i) deductibles, (ii) limits on payments required to be made by the insurer or
(iii) coverage which may not be as comprehensive as that previously included in
insurance purchased by the Company or its predecessors. The purchase of
insurance with deductibles, limits on payments and coverage exclusions, even if
in the best interest of the Company, may not be in the best interest of the
Indemnitee. As to the Company, purchasing insurance with deductibles, limits
on payments and coverage exclusions is similar to the Corporation's s practice
of self-insurance in other areas. In order to protect Indemnitee who would
otherwise be more fully or entirely covered under such policies, the Company
shall, to the maximum extent permitted by applicable law, indemnify and hold
Indemnitee harmless to the extent (i) of such deductibles, (ii) of amounts
exceeding payments required to be made by an insurer or (iii) that prior
policies of officer's s and director's s liability insurance held by the
Company or its predecessors would have provided for payment to Indemnitee, if
by reason of his Corporate Status he is or is threatened to be made a party to
any Proceeding. The obligation of the Company in the preceding sentence shall
be without regard to whether the Company would otherwise be required to
indemnify such officer or director under the other provisions of this
Agreement, or under any law, agreement, vote of stockholders or directors or
other arrangement. Without limiting the generality of any provision of this
Agreement, the procedures in Article IV hereof shall, to the extent applicable,
be used for determining entitlement to indemnification under this Section 7.3.
Section 7.4 Certain Settlement Provisions. The Company shall
have no obligation to indemnify Indemnitee under this Agreement for amounts
paid in settlement of a Proceeding or Claim without the Corporation's s prior
written consent. The Company shall not settle any Proceeding or Claim in any
manner that would impose any fine or other obligation on Indemnitee without
Indemnitee's s prior written consent. Neither the Company nor Indemnitee shall
unreasonably withhold their consent to any proposed settlement.
<PAGE> 15
Section 7.5 Exculpation of Directors. If Indemnitee is or was a
director of the Company, he shall not in that capacity be liable to the Company
or its stockholders for monetary damages for an act or omission in Indemnitee's
s capacity as a director, except that Indemnitee's s liability shall not be
eliminated or limited for: (a) any breach of Indemnitee's s duty of loyalty to
the Company or its stockholders; (b) any acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of the law; (c) a
transaction from which Indemnitee received an improper benefit, whether or not
the benefit resulted from an action taken within the scope of Indemnitee's s
office; or (d) an act or omission for which the liability of Indemnitee is
expressly provided for by statute.
Section 7.6 Duration of Agreement. This Agreement shall continue
for so long as Indemnitee serves as a director, officer, employee, agent or
fiduciary of the Company or, at the request of the Company, as a director,
officer, partner, venturer, proprietor, trustee, employee, agent, fiduciary or
similar functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan or other
enterprise, and thereafter shall survive until and terminate upon the later to
occur of: (a) the expiration of 20 years after the latest date that Indemnitee
shall have ceased to serve in any such capacity; (b) the final termination of
all pending Proceedings in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any proceeding
commenced by Indemnitee pursuant to Article IV relating thereto; or (c) the
expiration of all statutes of limitation applicable to possible Claims arising
out of Indemnitee's s Corporate Status.
Section 7.7 Notice by Each Party. Indemnitee shall promptly
notify the Company in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document or communication
relating to any Proceeding or Claim for which Indemnitee may be entitled to
indemnification or advancement of Expenses hereunder; provided, however, that
any failure of Indemnitee to so notify the Company shall not adversely affect
Indemnitee's s rights under this Agreement except to the extent the Company
shall have been materially prejudiced as a direct result of such failure. The
Company shall promptly notify Indemnitee in writing as to the pendency of any
Proceeding or Claim that may involve a claim against the Indemnitee for which
Indemnitee may be entitled to indemnification or advancement of Expenses
hereunder.
Section 7.8 Amendment. This Agreement may not be modified or
amended except by a written instrument executed by or on behalf of each of the
parties hereto.
Section 7.9 Waivers. The observance of any term of this
Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively) by the party entitled to enforce such
term only by a writing signed by the party against which such waiver is to be
asserted. Unless otherwise expressly provided herein, no delay on the part of
any party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any party
hereto of any right, power or privilege hereunder operate as a waiver of any
other right, power or privilege hereunder nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder.
<PAGE> 16
Section 7.10 Entire Agreement. This Agreement and the documents
expressly referred to herein constitute the entire agreement between the
parties hereto with respect to the matters covered hereby, and any other prior
or contemporaneous oral or written understandings or agreements with respect to
the matters covered hereby are expressly superseded by this Agreement.
Section 7.11 Severability. If any provision of this Agreement
(including any provision within a single section, paragraph or sentence) or the
application of such provision to any person or circumstance, shall be
judicially declared to be invalid, unenforceable or void, such decision will
not have the effect of invalidating or voiding the remainder of this Agreement
or affect the application of such provision to other persons or circumstances,
it being the intent and agreement of the parties that this Agreement shall be
deemed amended by modifying such provision to the extent necessary to render it
valid, legal and enforceable while preserving its intent, or if such
modification is not possible, by substituting therefor another provision that
is valid, legal and unenforceable and that achieves the same objective. Any
such finding of invalidity or unenforceability shall not prevent the
enforcement of such provision in any other jurisdiction to the maximum extent
permitted by applicable law.
Section 7.12 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given upon (a) transmitter's
s confirmation of a receipt of a facsimile transmission, (b) confirmed delivery
of a standard overnight courier or when delivered by hand or (c) the expiration
of five business days after the date mailed by certified or registered mail
(return receipt requested), postage prepaid, to the parties at the following
addresses (or at such other addresses for a party as shall be specified by like
notice):
If to the Company, to it at:
Pioneer Natural Resources Company
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039-3746
Attn: Chief Financial Officer
If to Indemnitee, to him at:
Scott D. Sheffield
Pioneer Natural Resources Company
1400 Williams Square West
5205 N. O'Connor Blvd.
Irving, Texas 75039
or to such other address or to such other individuals as any party shall have
last designated by notice to the other parties. All notices and other
communications given to any party in accordance with
<PAGE> 17
the provisions of this Agreement shall be deemed to have been given when
delivered or sent to the intended recipient thereof in accordance with the
provisions of this Section 7.12.
Section 7.13 Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware without
regard to the principles of conflict of laws.
<PAGE> 18
Section 7.14 Certain Construction Rules.
(a) The article and section headings contained in this
Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. As used in this
Agreement, unless otherwise provided to the contrary, all references
to days shall be deemed references to calendar days and any reference
to a "Section" or "Article" shall be deemed to refer to a section or
article of this Agreement. The words "hereof," "herein" and
"hereunder" and words of similar import referring to this Agreement
refer to this Agreement as a whole and not to any particular provision
of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." Unless otherwise
specifically provided for herein, the term "or" shall not be deemed to
be exclusive. Whenever the context may require, any pronoun used in
this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall
include the plural and vice versa.
(b) For purposes of this Agreement, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; references to "serving at the
request of the Company" shall include any service as a director,
officer, employee or agent of the Company which imposes duties on, or
involves services by, such director, nominee, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries.
Section 7.15 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument,
notwithstanding that both parties are not signatories to the original or same
counterpart.
Section 7.16 Certain Persons Not Entitled to Indemnification.
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advancement of Expenses hereunder with respect
to any Proceeding or any Claim, issue or matter therein, brought or made by
such person against the Company, except as specifically provided in Article III
or Article IV hereof.
Section 7.17 Indemnification for Negligence, Gross Negligence,
etc. Without limiting the generality of any other provision hereunder, it is
the express intent of this Agreement that Indemnitee be indemnified and
Expenses be advanced regardless of Indemnitee's s acts of negligence, gross
negligence, intentional or willful misconduct to the extent that
indemnification and advancement of Expenses is allowed pursuant to the terms of
this Agreement and under applicable law.
Section 7.18 Mutual Acknowledgment. Both the Company and
Indemnitee acknowledge that in certain instances, applicable law or public
policy may prohibit the Company from indemnifying the directors, officers,
employees, agents or fiduciaries of the Company under this Agreement or
otherwise. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the Securities
and Exchange
<PAGE> 19
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Corporation's s right under public
policy to indemnify Indemnitee.
Section 7.19 Enforcement. The Company agrees that its execution
of this Agreement shall constitute a stipulation by which it shall be
irrevocably bound in any court or arbitration in which a proceeding by
Indemnitee for enforcement of his rights hereunder shall have been commenced,
continued or appealed, that its obligations set forth in this Agreement are
unique and special, and that failure of the Company to comply with the
provisions of this Agreement will cause irreparable and irremediable injury to
Indemnitee, for which a remedy at law will be inadequate. As a result, in
addition to any other right or remedy he may have at law or in equity with
respect to breach of this Agreement, Indemnitee shall be entitled to injunctive
or mandatory relief directing specific performance by the Company of its
obligations under this Agreement.
Section 7.20 Successors and Assigns. All of the terms and
provisions of this Agreement shall be binding upon, shall inure to the benefit
of and shall be enforceable by the parties hereto and their respective
successors, assigns, heirs, executors, administrators, legal representatives.
Section 7.21 Period of Limitations. No legal action shall be
brought and no cause of action shall be asserted by or on behalf of the Company
or any affiliate of the Company against Indemnitee or Indemnitee's s spouse,
heirs, executors, or personal or legal representatives after the expiration of
three years from the date of accrual of that cause of action, and any claim or
cause of action of the Company or its affiliate shall be extinguished and
deemed released unless asserted by the timely filing of a legal action within
that three-year period; provided, however, that, if any shorter period of
limitations is otherwise applicable to any such cause of action, the shorter
period shall govern.
<PAGE> 20
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered to be effective as of the date first above written.
PIONEER NATURAL RESOURCES COMPANY
By: /s/ Mark L. Withrow
---------------------------------
Name: Mark L. Withrow
Title: Executive Vice President
INDEMNITEE:
/s/ Scott D. Sheffield
-------------------------------------
Scott D. Sheffield
<PAGE> 21
SCHEDULE I
I. Jon Brumley
Timothy L. Dove
Dennis E. Fagerstone
Mel Fischer
Mark L. Withrow
Lon C. Kile
M. Garrett Smith
R. Hartwell Gardner
John S. Herrington
Kenneth A. Hersh
James L. Houghton
Jerry P. Jones
Boone Pickens
Richard E. Rainwater
Charles E. Ramsey, Jr.
Arthur L. Smith
Philip B. Smith
Robert L. Stillwell
Michael D. Wortley
James R. Baroffio
