SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1997
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ............to............
Commission file number 1-959
THE LOUISIANA LAND AND EXPLORATION COMPANY
Exact name of registrant as specified in its charter
MARYLAND 72-0244700
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
909 POYDRAS STREET, NEW ORLEANS, LA. 70112
Address of principal executive offices Zip Code
Registrant's telephone number, including area code 504-566-6500
NO CHANGE
Former name, former address and former fiscal year, if
changed since last report
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X . No .
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Outstanding at
Class July 24, 1997
CAPITAL STOCK, $.15 PAR VALUE 34,447,355 SHARES
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
INDEX
Page
Number
_________________________________________________________________
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
(The June 30, 1997 and 1996 consolidated financial state-
ments included in this filing on Form 10-Q have been
reviewed by KPMG Peat Marwick LLP, independent auditors, in
accordance with established professional standards and
procedures for such a review. The report of KPMG Peat
Marwick LLP commenting upon their review is included
herein.)
Consolidated Balance Sheets - June 30, 1997 and
December 31, 1996............................. 3
Consolidated Statements of Earnings - three months
and six months ended June 30, 1997 and 1996... 4
Consolidated Statements of Cash Flows - six months
ended June 30, 1997 and 1996.................. 5
Notes to Consolidated Financial Statements........ 6-9
Independent Auditors' Review Report............... 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 11-13
Petroleum Segment Information......................... 14
Operating Data........................................ 15-16
Part II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K............ 17
<PAGE>
<PAGE>
<TABLE>
Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
THE LOUISIANA LAND AND EXPLORATION COMPANY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
(Millions of dollars)
June 30, December 31,
ASSETS 1997 1996
_____________________________________________________________________________________
<S> <C> <C>
CURRENT ASSETS:
Cash, including cash equivalents (June 30,
1997-$3.8; December 31, 1996-$1.2) $ 15.9 9.0
Accounts and notes receivable, principally trade 115.5 150.7
Income taxes receivable .6 -
Prepaid expenses 11.9 10.7
Deferred income taxes .7 .7
_____________________________________________________________________________________
TOTAL CURRENT ASSETS 144.6 171.1
_____________________________________________________________________________________
Investments in affiliates 8.4 8.1
Property, plant and equipment 3,131.5 3,100.6
Less accumulated depletion, depreciation and amortization (1,964.2) (1,940.9)
_____________________________________________________________________________________
NET PROPERTY, PLANT AND EQUIPMENT 1,167.3 1,159.7
_____________________________________________________________________________________
Other assets 25.3 25.9
_____________________________________________________________________________________
$ 1,345.6 1,364.8
_____________________________________________________________________________________
LIABILITIES AND STOCKHOLDERS' EQUITY
_____________________________________________________________________________________
CURRENT LIABILITIES:
Accounts payable and accrued expenses 137.4 138.9
Income taxes payable 3.9 9.4
_____________________________________________________________________________________
TOTAL CURRENT LIABILITIES 141.3 148.3
_____________________________________________________________________________________
Deferred income taxes 82.3 78.4
Long-term debt 460.1 505.7
Other liabilities 160.2 157.8
_____________________________________________________________________________________
STOCKHOLDERS' EQUITY:
Capital stock 5.2 5.1
Additional paid-in capital 48.3 44.6
Retained earnings 448.2 424.9
_____________________________________________________________________________________
TOTAL STOCKHOLDERS' EQUITY 501.7 474.6
_____________________________________________________________________________________
$ 1,345.6 1,364.8
_____________________________________________________________________________________
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(Millions, except per share data)
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas $134.4 135.8 305.2 283.5
Refined products - 110.2 - 225.0
Gain on sale of oil and gas properties - .3 .4 .3
_____________________________________________________________________________________
134.4 246.3 305.6 508.8
_____________________________________________________________________________________
COSTS AND EXPENSES:
Lease operating and facility expenses 30.0 27.9 61.1 57.9
Refinery cost of sales and operating
expenses - 101.7 - 216.1
Dry holes and exploratory charges 29.5 21.8 75.8 43.3
Depletion, depreciation and amortization 44.9 44.6 88.6 88.1
Taxes, other than on earnings 5.2 6.3 11.5 12.5
General, administrative and other
expenses 9.8 9.1 19.1 18.0
_____________________________________________________________________________________
119.4 211.4 256.1 435.9
_____________________________________________________________________________________
15.0 34.9 49.5 72.9
OTHER INCOME (EXPENSE):
Interest and debt expenses (6.5) (8.9) (14.4) (18.1)
Other income (expense), net 1.3 .5 7.8 3.5
_____________________________________________________________________________________
Earnings before income taxes 9.8 26.5 42.9 58.3
Income tax expense 3.6 9.3 15.5 20.5
_____________________________________________________________________________________
NET EARNINGS $ 6.2 17.2 27.4 37.8
_____________________________________________________________________________________
EARNINGS PER SHARE $ 0.18 0.50 0.79 1.11
_____________________________________________________________________________________
AVERAGE SHARES 34.5 34.2 34.5 34.0
_____________________________________________________________________________________
CASH DIVIDENDS PER SHARE $ 0.06 0.06 0.12 0.12
_____________________________________________________________________________________
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Millions of dollars)
<CAPTION>
Six months ended
June 30,
1997 1996
_____________________________________________________________________________________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 27.4 37.8
Adjustments to reconcile to cash flows
from operations:
Gain on sale of oil and gas properties (.4) (.3)
Depletion, depreciation and amortization 88.6 88.1
Deferred income taxes 3.9 12.6
Dry holes and impairment charges 49.7 22.3
Other .1 6.1
_____________________________________________________________________________________
169.3 166.6
Changes in operating assets and liabilities:
Net decrease in receivables 37.3 10.4
Net increase in inventories - (4.3)
Net increase in prepaid items (1.2) (1.3)
Net increase (decrease) in payables (9.5) 7.8
Other 1.7 (2.1)
_____________________________________________________________________________________
NET CASH FLOWS FROM OPERATING ACTIVITIES 197.6 177.1
_____________________________________________________________________________________
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (146.5) (99.7)
Proceeds from asset sales 6.1 .5
Other (3.2) .5
_____________________________________________________________________________________
NET CASH FLOWS FROM INVESTING ACTIVITIES (143.6) (98.7)
_____________________________________________________________________________________
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (45.6) (99.2)
Advances against cash surrender value - 9.6
Dividends (4.1) (4.1)
Repayment of loans to ESOP - 1.2
Other 2.6 15.5
_____________________________________________________________________________________
NET CASH FLOWS FROM FINANCING ACTIVITIES (47.1) (77.0)
_____________________________________________________________________________________
INCREASE IN CASH AND CASH EQUIVALENTS $ 6.9 1.4
_____________________________________________________________________________________
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting only of
normal recurring accruals) necessary to present fairly the financial
position as of June 30, 1997, and the results of operations and cash
flows for the three-month and six-month periods ended June 30, 1997
and 1996. Certain amounts have been reclassified to conform with the
current period's presentation.
2. On July 31, 1996, the Company completed the sale of its crude oil
refinery and terminal near Mobile, Alabama, including crude oil and
refined product inventories, for approximately $70 million resulting
in a pretax gain of approximately $2 million. The net book value of
refinery property, plant and equipment at that date totaled
approximately $33 million. The following table sets forth the
refinery operating results for the periods indicated.
<TABLE>
<CAPTION>
(Unaudited)
Periods ended
June 30, 1996
Three Six
Months Months
________________________________________________________________________________
<S> <C> <C>
REFINING OPERATIONS
Refining Operating Profit:
Revenues:
Refined products* $117.9 239.0
Other .2 .3
________________________________________________________________________________
118.1 239.3
________________________________________________________________________________
Cost and expenses:
Cost of sales* 98.2 207.4
Operating expenses 11.2 22.7
Depreciation .5 .9
Taxes, other than income .4 .8
________________________________________________________________________________
110.3 231.8
________________________________________________________________________________
$ 7.8 7.5
________________________________________________________________________________
*Before the elimination of intercompany
transfers to the company's refinery $ 7.7 14.0
________________________________________________________________________________
</TABLE>
3. For the three months ended June 30, 1997 and 1996, interest costs
incurred were $9.2 million and $11.8 million, respectively, of which
$2.7 million and $2.9 million, respectively, were capitalized as part
of the cost of property, plant and equipment. For the six months ended
June 30, 1997 and 1996, interest costs incurred were $18.7 million and
$24.4 million, respectively, of which $4.3 million and $6.3 million,
respectively, were capitalized as part of the cost of property, plant
and equipment.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. As prescribed by Accounting Principles Board Opinion No. 15, "Earnings
Per Share" ("Opinion No. 15"), earnings per share are calculated on the
weighted average number of shares outstanding during each period for
capital stock and, when dilutive, capital stock equivalents, which
assumes exercise of stock options.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards Statement No. 128,
"Earnings Per Share" ("SFAS No. 128"). SFAS No. 128 supersedes Opinion
No. 15, will be effective for the Company's year ended December 31,
1997, and cannot be adopted earlier. After adoption, all prior period
earnings per share must be restated to conform with SFAS No. 128. Due
to the insignificant number of potentially dilutive securities (stock
options) outstanding, SFAS No. 128 will not have a material impact on
the Company's earnings per share.
5. In accordance with Regulation S-X, Rule 3-09, the audited consolidated
financial statements of the Company's 50%-owned affiliate, MaraLou
Netherlands Partnership (MaraLou) and its wholly-owned consolidated
subsidiary, CLAM Petroleum Company (CLAM), were filed with the
Company's Annual Report on Form 10-K for the year ended December 31,
1996.
Accordingly, the following unaudited summarized consolidated income
statement information for MaraLou and its consolidated subsidiary,
CLAM, for the three-month and six-month periods ended June 30, 1997 and
1996 are presented in accordance with Regulation S-X, Rule 10-01(b).
<TABLE>
<CAPTION>
(Unaudited)
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
________________________________________________________________________________
<S> <C> <C> <C> <C>
Gross revenues $ 20.9 21.4 48.9 53.1
________________________________________________________________________________
Operating profit 10.1 7.4 26.7 24.3
________________________________________________________________________________
Net earnings 2.3 3.8 8.8 11.8
________________________________________________________________________________
</TABLE>
6. The Company uses derivative commodity instruments to manage commodity
price risks associated with future natural gas and crude oil production
but does not use them for speculative purposes. The company's
commodity price hedging program utilizes futures, forwards, options and
swap contracts in series of transactions designed to set a floor price
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for future production and at the same time allow the Company to
participate in market price increases above a set level over the floor
price and outside of specific ranges. To qualify as a hedge, these
contracts must correlate to anticipated future production such that the
Company's exposure to the effects of price changes is reduced. The
Company uses the accrual method of accounting for derivative commodity
instruments. At inception, the contract premiums paid are recorded as
prepaid expenses and, upon settlement of the hedged production month,
are included with the gains and losses on the contracts in oil and gas
revenues.
At June 30, 1997, approximately 46 trillion BTU of domestic natural gas
production for the remainder of 1997 were covered by a series of
transactions designed to set an average floor price of $1.82 per
million BTU with the Company's nonparticipation in market price
increases above the floor price limited to $0.18 per million BTU. For
1998, approximately 57 trillion BTU of domestic natural gas were
similarly hedged at an average floor price of $1.80 per million BTU
with the Company's nonparticipation in market price increases above the
floor price limited to $0.24 per million BTU. For 1999, approximately
14 trillion BTU of domestic natural gas were similarly hedged at an
average floor price of $1.92 per million BTU with the Company's
nonparticipation in market price increases above the floor price
limited to $0.37 per million BTU. While these transactions have
nominal carrying values, their fair value, represented by the estimated
amount that would be required to terminate the contracts, were a net
cost of $3.0 million for the 1997 hedges, a net benefit of $.5 million
for the 1998 hedges and a net benefit of $1.1 million for 1999 hedges.
(The Company estimates that its domestic natural gas production
averages approximately 1.07 million BTU for each thousand cubic feet.)
In addition, approximately 3.4 million barrels of the Company's
worldwide crude oil production for the remainder of 1997 were similarly
hedged at an average floor price of $17.80 per barrel with the
Company's nonparticiation in market price increases above the floor
price limited to $1.16 per barrel. These transactions also have
nominal carrying values, but their fair value at June 30, 1997 amounted
to a net benefit of $.9 million.
7. On July 16, 1997, the Company signed a definitive agreement to combine
with Burlington Resources Inc. (BR) in a transaction intended to be
accounted for under the pooling of interests method of accounting for
business combinations. Under the terms of the agreement, which is
subject to the approvals of regulatory agencies and the shareholders
of both companies, a wholly owned subsidiary of BR will merge into the
Company and the Company's shareholders will receive 1.525 shares of BR
common stock for each Company share held and the Company will become
a wholly owned subsidiary of BR. The transaction is expected to
qualify as a tax-free reorganization.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8. The Company has been notified by the U.S. Environmental Protection
Agency that it is one of many Potentially Responsible Parties (PRP)
with respect to certain National Priorities List sites. Based on its
evaluation of the potential total cleanup costs, its estimate of its
potential exposure, and the viability of the other PRP's, the Company
believes that any costs ultimately required to be borne by it at these
sites will not have a material adverse effect on the results of
operations, cash flow or financial position of the Company.
The Company is subject to other legal proceedings, claims and
liabilities which arise in the ordinary course of its business. In the
opinion of Management, the amount of ultimate liability with respect
to these actions will not have a material adverse effect on results of
operations, cash flow or financial position of the Company.
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REVIEW REPORT
The Board of Directors
The Louisiana Land and Exploration Company:
We have reviewed the consolidated balance sheet of The Louisiana Land and
Exploration Company and subsidiaries as of June 30, 1997, and the related
consolidated statements of earnings and cash flows for the three-month and
six-month periods ended June 30, 1997 and 1996. These consolidated
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the consolidated financial statements referred to above
for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of The Louisiana Land and
Exploration Company and subsidiaries as of December 31, 1996, and the
related consolidated statements of earnings, stockholders' equity, and
cash flows for the year then ended (not presented herein); and in our
report dated February 7, 1997, we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the information
set forth in the accompanying consolidated balance sheet as of
December 31, 1996, is fairly presented, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
/KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
New Orleans, Louisiana
July 28, 1997
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995
Statements, other than historical facts, contained in this Quarterly
Report on Form 10-Q, including statements of estimated oil and gas
production and reserves, drilling plans, future cash flows, anticipated
capital expenditures and Management's strategies, plans and objectives,
are "forward looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Although the Company believes that its
forward looking statements are based on reasonable assumptions, it
cautions that such statements are subject to a wide range of risks and
uncertainties incident to the exploration for, acquisition, development
and marketing of oil and gas, and it can give no assurance that its
estimates and expectations will be realized. Important factors that could
cause actual results to differ materially from the forward looking
statements include, but are not limited to, changes in production volumes,
worldwide demand, and commodity prices for petroleum natural resources;
the timing and extent of the Company's success in discovering, acquiring,
developing and producing oil and gas reserves; risks incident to the
drilling and operation of oil and gas wells; future production and
development costs; the effect of existing and future laws, governmental
regulations and the political and economic climate of the United States
and foreign countries in which the Company operates; the effect of hedging
activities; and conditions in the capital markets. Other risk factors are
discussed elsewhere in this Form 10-Q, including those risk factors
described in Note 8 of "Notes to Consolidated Financial Statements" and
in the Company's Form 10-K.
REVIEW OF OPERATIONS
Second quarter and first half 1997 net earnings totaled $6.2 million
and $27.4 million, respectively, down from the $17.2 million and $37.8
million earned for the respective 1996 periods. The decline in net
earnings resulted primarily from reduced liquids volumes, lower domestic
natural gas prices and higher exploratory costs in both 1997 periods and
the inclusion in the comparable 1996 periods of operating results from the
Company's Mobile refinery, which was sold in July 1996.
OIL AND GAS OPERATIONS
Revenues from the Company's oil and gas operations were down $1 million
from the second quarter of 1996 due to lower liquids revenues. Liquids
revenues were down $5 million due to lower crude oil volumes ($3 million)
and prices ($2 million). Natural gas revenues were up almost $3 million
as a result of higher domestic deliveries ($9 million). The effect of
higher domestic natural gas deliveries was partially offset by lower
prices ($6 million).<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
In the first half of 1997 revenues from the Company's oil and gas
operations were up $22 million from the first half of 1996. Liquids
revenues were up $6 million primarily due to the higher worldwide crude
oil prices. Natural gas revenues were up almost $15 million as a result
of higher domestic deliveries ($20 million), partially offset by lower
prices ($5 million).
Crude oil volumes in the second quarter and first half of 1997
decreased 2100 and 1500 barrels per day (BPD), respectively, from the
comparable 1996 periods primarily due to production declines at the North
Sea. North Sea operations were down 2700 BPD and 2300 BPD in the 1997
second quarter and first half, respectively, as wells shut-in due to
pipeline maintenance and natural declines more than offset new production
from the Thelma Field. While new wells onstream in south Louisiana and
the Gulf of Mexico properties contributed to higher domestic volumes in
the first half, which were up 500 BPD, natural declines and the effect of
properties sold resulted in a decline of 700 BPD in the second quarter of
1997. Other foreign crude volumes were up 1300 BPD and 300 BPD in the
second quarter and first half, respectively, due to new wells onstream at
the KAKAP concession, offshore Indonesia.
Natural gas deliveries were up 39 million and 37 million cubic feet per
day in the second quarter and first half of 1997, respectively, due to
higher domestic production. Domestic deliveries were up due to new wells
onstream in the Gulf of Mexico and south Louisiana. The higher domestic
deliveries were partially offset by the effects of natural declines at
mature producing properties and wells shut-in for maintenance and repairs.
Partially offsetting the higher domestic production were lower volumes
from the North Sea operations due to the aforementioned shut-ins and
natural declines and demand-induced declines from the Company's 50%-owned
affiliate, CLAM Petroleum Company.
Lease operating and facility expenses (LOE) were up in both 1997
periods as higher workover costs and facilities expenses offset reductions
in operating costs and repair charges. Depletion, depreciation and
amortization (DD&A) was up marginally in both periods as a result of the
DD&A associated with new wells onstream. This increase in DD&A was
partially offset by natural production declines on mature producing
properties. Dry holes and exploratory charges increased due to the write-
off of unsuccessful exploratory wells and higher seismic costs incurred.
Interest and debt expenses were down from the 1996 periods as a result of
the significant reduction in long-term debt over the last twelve months.
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
In the first half of 1997, the Company generated approximately $198
million in cash from operations which, along with available cash, was used
for capital projects ($147 million), reductions of long-term debt ($46
million) and dividends paid ($4 million).
In June 1997, the Company replaced its existing $350 million Revolving
Credit Facility with a Revolving Credit Facility of a like amount, the
primary objectives of which were to avail the Company of lower market
pricing, extend the maturity by one year to 2002 and obtain other terms
and conditions which are more favorable to the Company.
The Company expects to fund its 1997 expenditures, including capital
and exploration expenditures of approximately $320 million, primarily from
operating cash flows. The Company's expenditures are continually
reviewed, and revised as necessary, based on perceived current and long-
term economic conditions.
CAPITAL STOCK, DIVIDENDS AND OTHER MARKET DATA
On July 16, 1997 the Company signed a definitive agreement to combine
with Burlington Resources Inc. (BR) in a transaction intended to be
accounted for under the pooling of interests method of accounting for
business combinations. Under the terms of the agreement, which is subject
to the approvals of regulatory agencies and the shareholders of both
companies, a wholly owned subsidiary of BR will merge into the Company and
the Company's shareholders will receive 1.525 shares of BR common stock
for each Company share held and the Company will become a wholly owned
subsidiary of BR. The transaction is expected to qualify as a tax-free
reorganization.
In February 1997, the Company's Board of Directors authorized the
repurchase of up to two million shares of the Company's capital stock.
No shares have been repurchased under the program. In connection with the
agreement with BR discussed above, the Company's Board of Directors has
agreed to terminate such repurchase program.
NOTE: The accompanying consolidated financial statements and notes
thereto included in Item 1. of this Form 10-Q and the petroleum
segment information and operating data following this Item 2. are
an integral part of this discussion and analysis and should be
read in conjunction herewith.
<PAGE>
<PAGE>
<TABLE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
PETROLEUM SEGMENT INFORMATION
(Millions of dollars)
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
Sales to unaffiliated customers:
Domestic1 $ 96.9 207.3 223.9 426.2
North Sea 29.1 33.0 67.5 70.1
Other foreign 8.4 6.0 14.2 12.5
_____________________________________________________________________________________
Total revenues $134.4 246.3 305.6 508.8
_____________________________________________________________________________________
Earnings before income taxes:
Operating profit (loss):
Domestic1 23.9 38.7 58.0 80.4
North Sea 8.0 10.0 24.7 22.1
Other foreign (2.2) (2.9) (6.8) (7.2)
_____________________________________________________________________________________
29.7 45.8 75.9 95.3
Other income (expense), net (19.9) (19.3) (33.0) (37.0)
_____________________________________________________________________________________
Earnings before income taxes $ 9.8 26.5 42.9 58.3
_____________________________________________________________________________________
Capital expenditures:
Exploration:
Domestic 51.0 26.0 83.9 43.9
North Sea 1.6 .8 2.6 .8
Other foreign 7.5 4.3 12.1 6.4
_____________________________________________________________________________________
60.1 31.1 98.6 51.1
_____________________________________________________________________________________
Development:
Domestic 16.4 20.9 29.7 31.1
North Sea 5.7 4.3 9.7 10.3
Other foreign 2.1 2.4 5.6 4.8
_____________________________________________________________________________________
24.2 27.6 45.0 46.2
_____________________________________________________________________________________
84.3 58.7 143.6 97.3
Capitalized interest 2.7 2.9 4.3 6.3
Other 1.2 .6 1.8 1.4
_____________________________________________________________________________________
$ 88.2 62.2 149.7 105.0
_____________________________________________________________________________________
1 The 1996 period includes the operations of the Company's refinery which was sold in
July 1996. See Note 2 of "Notes to Consolidated Financial Statements."
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
OPERATING DATA
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
OIL AND GAS OPERATIONS1
CRUDE AND CONDENSATE2
Production (thousands of barrels per day):
Domestic 21.0 21.7 21.3 20.8
North Sea 13.4 16.1 13.9 16.2
Other foreign 5.2 3.9 4.2 3.9
_____________________________________________________________________________________
39.6 41.7 39.4 40.9
_____________________________________________________________________________________
Average price received (per barrel):
Domestic $18.57 19.29 20.48 19.18
North Sea 17.91 18.33 19.70 18.55
Other foreign 17.70 17.40 18.45 17.55
Consolidated 18.23 18.74 19.99 18.77
_____________________________________________________________________________________
PLANT PRODUCTS
Production (thousands of barrels per day):
Domestic 3.1 2.1 2.9 2.0
North Sea .8 .9 .8 .9
_____________________________________________________________________________________
3.9 3.0 3.7 2.9
_____________________________________________________________________________________
Average price received (per barrel):
Domestic $11.22 12.53 14.79 12.45
North Sea 14.11 14.26 19.23 15.39
Consolidated 11.83 13.06 15.83 13.37
_____________________________________________________________________________________
NATURAL GAS
Production (millions of cubic feet per day):
Domestic 315.7 272.1 308.4 263.6
North Sea 27.0 28.3 32.2 33.1
CLAM Petroleum Company 41.3 44.3 45.3 52.2
_____________________________________________________________________________________
384.0 344.7 385.9 348.9
_____________________________________________________________________________________
Average price received (per MCF):
Domestic $ 1.99 2.23 2.41 2.54
North Sea 2.58 2.17 2.66 2.19
CLAM Petroleum Company 2.81 2.64 2.82 2.75
Consolidated 2.12 2.27 2.48 2.54
_____________________________________________________________________________________
1 Includes the Company's 50% equity interest in its unconsolidated affiliate, CLAM
Petroleum Company.
2 Before the elimination of intercompany transfers.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
OPERATING DATA (CONTINUED)
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
GROSS WELLS DRILLED
Working Interest
Exploratory:
Oil 6 0 7 2
Gas 6 3 8 5
Dry 8 4 10 7
_____________________________________________________________________________________
20 7 25 14
_____________________________________________________________________________________
Development:
Oil 8 5 10 10
Gas 4 2 5 3
Dry - - - -
_____________________________________________________________________________________
12 7 15 13
_____________________________________________________________________________________
Total working interest 32 14 40 27
Royalty Interest 15 5 20 7
_____________________________________________________________________________________
Total wells 47 19 60 34
_____________________________________________________________________________________
NET WELLS DRILLED
Exploratory:
Oil 2.0 - 2.5 .7
Gas 2.6 1.1 3.4 2.1
Dry 3.6 1.6 4.5 2.5
_____________________________________________________________________________________
8.2 2.7 10.4 5.3
_____________________________________________________________________________________
Development:
Oil 1.1 .5 2.5 1.1
Gas .6 1.0 1.3 1.5
Dry - - - -
_____________________________________________________________________________________
1.7 1.5 3.8 2.6
_____________________________________________________________________________________
Total net wells 9.9 4.2 14.2 7.9
_____________________________________________________________________________________
/TABLE
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit 10.1 - Credit Agreement dated as of June 7, 1997
Exhibit 10.2 - Merger Agreement, dated as of July 16,
1997, among Burlington Resources Inc., BR Acquisition
Corporation and The Louisiana Land and Exploration
Company (incorporated by reference to Appendix A to the
registrant's Joint Proxy Statement/Prospectus included in
the Schedule 14A filed with the Commission on July 31,
1997).
Exhibit 10.3 - Stock Option Agreement, dated as of July
16, 1997, between Burlington Resources Inc. and The
Louisiana Land and Exploration Company (incorporated by
reference to Appendix B to the registrant's Joint Proxy
Statement/Prospectus included in the Schedule 14A filed
with the Commission on July 31, 1997).
Exhibit 27 - Financial Data Schedules:
Quarter ended June 30, 1997
Quarter ended June 30, 1996 (restated)
(b) Reports on Form 8-K:
On July 17, 1997, the Company filed a Current Report on
Form 8-K which included a press release announcing that
the Company had entered into an agreement and Plan of
Merger dated July 16, 1997 among the Company, Burlington
Resources Inc. and BR Acquisition Corporation, a wholly
owned subsidiary of Burlington Resources Inc, pursuant to
which BR Acquisition Corporation will merge with and into
the Company.
<PAGE>
<PAGE>
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, thereunto duly authorized.
THE LOUISIANA LAND AND EXPLORATION COMPANY
(REGISTRANT)
By: /s/ J. N. WOOD
__________________________________________
J. N. WOOD
VICE PRESIDENT AND CONTROLLER
(PRINCIPAL ACCOUNTING OFFICER)
Dated: July 30, 1997
EXHIBIT 10.1
<PAGE>
<PAGE>
Exhibit 10.1
$350,000,000
CREDIT AGREEMENT
dated as of
June 7, 1997
among
THE LOUISIANA LAND AND EXPLORATION COMPANY,
The BANKS Listed Herein,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agent
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
and NATIONSBANK OF TEXAS, N.A.,
as Co-Agents
<PAGE>
<PAGE>
TABLE OF CONTENTS1
ARTICLE I
DEFINITIONS
1.01 Definitions
1.02 Accounting Terms and Determinations
1.03 Types of Borrowings
1.04 Other Definitional Provisions
ARTICLE II
THE CREDITS
2.01 Commitments to Lend
2.02 Method of Borrowing
2.03 Money Market Borrowings
2.04 Notice to Banks; Funding of Loans
2.05 Notes
2.06 Method of Electing Interest Rates for Committed Loans
2.07 Interest Rates
2.08 Fees
2.09 Termination or Reduction of Commitments
2.10 Prepayments and Repayments
2.11 General Provision as to Payments
2.12 Funding Losses
2.13 Computation of Interest and Fees
2.14 Taxes
2.15 Regulation D Compensation
ARTICLE III
CONDITIONS TO BORROWING
3.01 Each Borrowing
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01 Corporate Existence and Power
4.02 Corporate and Governmental Authorization; No Contravention
4.03 Binding Effect
4.04 Information
4.05 No Material Adverse Change
1 The Table of Contents is not a part of this Agreement.
<PAGE>
<PAGE>
4.06 Litigation
4.07 Compliance with ERISA
4.08 Taxes
4.09 Compliance with Laws
4.10 Investment Company Act
4.11 Public Utility Holding Company Act
4.12 Ownership of Property, Liens
4.13 Current Disclosure
4.14 Use of Proceeds
4.15 Environmental Matters
ARTICLE V
COVENANTS
5.01 Information
5.02 Payment of Obligations
5.03 Maintenance of Property
5.04 Insurance
5.05 Compliance With Law
5.06 Inspection of Property, Book and Records
5.07 Development and Operation of Oil, Gas and Mineral
Properties
5.08 Maintenance of Existence, Rights, Etc.
5.09 Negative Pledge
5.10 Consolidations, Mergers and Asset Sales
5.11 Cash Flow Coverage
5.12 Minimum Consolidated Tangible Net Worth
5.13 Subsidiary Debt
5.14 Transactions with Affiliates
5.15 Limitation of Restrictions Affecting
Subsidiaries
<PAGE>
<PAGE>
ARTICLE VI
DEFAULTS
6.01 Defaults
6.02 Notice of Default
ARTICLE VII
THE AGENT
7.01 Appointment and Authorization
7.02 Agent and Affiliates
7.03 Action by Agent
7.04 Consultation with Experts
7.05 Liability of Agent
7.06 Indemnification
7.07 Credit Decision
7.08 Agents' Fees
7.09 Successor Agent
7.10 Co-Agents Not Liable
ARTICLE VIII
CHANGES IN CIRCUMSTANCES
8.01 Basis for Determining Interest Rate Inadequate or Unfair
8.02 Illegality
8.03 Increased Cost and Reduced Return
8.04 Domestic Loans Substituted For Affected Euro-Dollar Loans
8.05 Substitution of Bank
ARTICLE IX
MISCELLANEOUS
9.01 Notices
9.02 No Waiver
9.03 Expenses; Indemnification
9.04 Sharing of Set-offs
9.05 Amendments and Waivers
9.06 Successors and Assigns
9.07 Collateral
9.08 Governing Law; Submission to Jurisdiction
<PAGE>
<PAGE>
9.09 Counterparts; Integration;
9.10 WAIVER OF JURY TRIAL
9.11 Confidentiality
ARTICLE X
EFFECTIVENESS
10.01 Conditions to Effectiveness
10.02 Consequences of Effectiveness Transitional Provisions
Schedule I -- Pricing Schedule
Schedule II -- Subsidiary Restrictions
Exhibit A -- Note
Exhibit B-1 -- Opinion of Special Counsel
for the Obligors
Exhibit B-2 -- Opinion of General Counsel of
the Borrower
Exhibit C -- Opinion of Davis Polk & Wardwell
Exhibit D -- Form of Money Market Quote Request
Exhibit E -- Form of Invitation for Money Market
Quotes
Exhibit F -- Form of Money Market Quote
Exhibit G -- Assignment and Assumption Agreement
<PAGE>
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
AGREEMENT dated as of June 17, 1997 among THE LOUISIANA
LAND AND EXPLORATION COMPANY, the BANKS listed on the signature
pages hereof and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Agent, and TEXAS COMMERCE BANK NATIONAL ASSOCIATION and NATIONSBANK
OF TEXAS, N.A., as Co-Agents.
WHEREAS, the Borrower, certain of the Banks, the
Co-Agents and the Agent are parties to a Credit Agreement dated as
of June 8, 1995 (as amended to the date hereof, the "Existing
Agreement"); WHEREAS, the parties hereto wish to replace the credit
facility under the Existing Agreement with a new credit facility
hereunder;
WHEREAS, when all the conditions specified in Section
10.01 have been satisfied, the Existing Agreement will be
automatically terminated and the loans outstanding thereunder (if
any) will be repaid or refinanced hereunder;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. The following terms, as used
herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of Money
Market Quotes setting forth Money Market Absolute Rates pursuant to
Section 2.03.
"Additional Bank" has the meaning set forth in Section
9.05(b).
"Administrative Questionnaire" means, with respect to
each Bank, an administrative questionnaire in the form prepared by
the Agent and submitted to the Agent (with a copy to the Borrower)
duly completed by such Bank.
"Affiliate" means (i) any Person that directly, or
indirectly through one or more intermediaries, controls the
Borrower (a "Controlling Person") and (ii) any Person (other than
the Borrower or a Subsidiary of the Borrower) which is controlled
by or is under common control with a Controlling Person. As used
herein, the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the
<PAGE>
<PAGE>
management or policies of a Person, whether through the ownership
of voting securities, by contract or otherwise. For purposes of
this Agreement, CLAM is an Affiliate of the Borrower. Neither a
director nor an officer of the Borrower, in such capacity, shall be
deemed, for purposes of this Agreement, an Affiliate.
"Agent" means Morgan, in its capacity as agent for the
Banks under the Financing Documents, and its successors in such
capacity.
"Applicable Lending Office" means, with respect to any
Bank, (i) in the case of its Domestic Loans, its Domestic Lending
Office, (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar
Lending Office and (iii) in the case of its Money Market Loans, its
Money Market Lending Office.
"Applicable Margin" has the meaning set forth in Section
2.07(g).
"Assignee" has the meaning set forth in Section 9.06(c).
"Assignment and Assumption" has the meaning set forth in
Section 9.06(c).
"Bank" means each bank or other financial institution
listed on the signature pages hereof, each Additional Bank or
Assignee which becomes a "Bank" for purposes hereof pursuant to
Section 9.05(b) or 9.06(c), and their respective successors.
"Base Rate" means, for any day, a rate per annum equal to
the higher of (i) the Prime Rate for such day and (ii) the sum of
1/2 of 1% plus the Federal Funds Rate for such day.
"Benefit Arrangement" means at any time an employee
benefit plan within the meaning of Section 3(3) of ERISA which is
not a Plan or a Multiemployer Plan and which is maintained or
otherwise contributed to by any member of the ERISA Group.
"Borrower" means The Louisiana Land and Exploration
Company, a Maryland corporation, and its successors.
"Borrowing" has the meaning set forth in Section 1.03.
"Capital Lease" means a lease that would be capitalized
on a balance sheet of the lessee prepared in accordance with
generally accepted accounting principles.
"CLAM" means CLAM Petroleum Company, a Delaware
corporation and an Affiliate of the Borrower, and CLAM's
successors.
<PAGE>
<PAGE>
"CLAM Credit Agreement" means the Amended and Restated
Credit Agreement dated as of July 25, 1985, among MaraLou
Netherlands Partnership, CLAM, the banks parties thereto and
Morgan, as agent for such banks, as amended and restated as of June
19, 1992, or any successor credit agreement entered into for the
purpose of refinancing such Amended and Restated Credit Agreement,
in each case, as amended, restated, extended or otherwise modified
from time to time.
"Co-Agent" means each of Texas Commerce Bank
NationalAssociation and NationsBank of Texas, N.A., in its capacity
as Co-Agent hereunder.
"Committed Loan" means a loan made by a Bank pursuant to
Section 2.01.
"Commitment" means, with respect to each Bank, the amount
set forth opposite the name of such Bank on the signature pages
hereof or in the case of an Additional Bank or Assignee, the amount
of the Commitment assumed by it, in each case as such amount may be
increased from time to time pursuant to Section 9.05(b) or 9.06(c)
or reduced from time to time pursuant to Section 2.09 or 9.06(c).
"Consolidated Cash Flow" means, for any period, cash flow
from operating activities (before changes in working capital) for
such period as set forth in the Borrower's consolidated statement
of cash flows for such period, adjusted to exclude the effect of
any extraordinary items reflected therein.
"Consolidated Cash Flow Ratio" means at any date the
ratio of (i) Consolidated Cash Flow for the four most recently
completed consecutive fiscal quarters of the Borrower and its
Consolidated Subsidiaries as of such date to (ii) Consolidated Debt
as of the last day of such period.
"Consolidated Debt" means at any date the aggregate
amount of Debt of the Borrower and its Consolidated Subsidiaries,
determined on a consolidated basis as of such date.
"Consolidated Subsidiary" means, at any date with respect
to any Person, any Subsidiary or other entity the accounts of which
would be consolidated with those of such Person in the consolidated
financial statements of such Person as of such date.
"Consolidated Tangible Net Worth" means at any date the
consolidated stockholders' equity of the Borrower and its
Consolidated Subsidiaries less their consolidated Intangible
Assets, all determined as of such date. For purposes of this
definition "Intangible Assets" means the amount (to the extent
reflected in determining such consolidated stockholders' equity) of
all goodwill, patents, trademarks, service marks, trade names,
copyrights, organization or developmental expenses and other
intangible assets.
<PAGE>
<PAGE>
"Constitutional Documents" in relation to any corporate
Person means the Certificate of Incorporation and By-Laws or other
constitutional documents of such corporate Person.
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all obligations of such
Person to pay the deferred purchase price of property or services,
(iv) all obligations of such Person as lessee which are capitalized
in accordance with generally accepted accounting principles, (v)
all non-contingent obligations (and for purposes of Section 5.09
and the definition of Material Debt, all contingent obligations) of
such Person to reimburse any bank or other Person in respect of
amounts paid under a letter of credit or similar instrument which
(in the case of non-contingent obligations) remain unpaid for more
than five days, (vi) all Debt secured by a Lien on any asset of
such Person, whether or not such Debt is otherwise an obligation of
such Person (quantified, for purposes hereof, as an amount equal to
the lesser of (a) the amount of such Debt and (b) the value
(determined as of the last day of the fiscal year most recently
ended) of the assets securing such Debt) (vii) all Debt of others
Guaranteed by such Person; provided that (x) neither (a) trade or
other accounts payable arising in the ordinary course of business
nor (b) obligations in respect of insurance policies or performance
or surety bonds (including performance or surety bonds in the form
of a letter of credit or similar instrument) which are not
themselves Guarantees of Debt (nor drafts, acceptances or similar
instruments evidencing the same nor obligations in respect of
letters of credit or similar instruments supporting the payment of
the foregoing) shall constitute Debt, it being understood that any
obligation referred to in (b) that is drawn and remains unpaid for
more than 90 days shall constitute Debt, except where such
obligation is being contested in good faith by appropriate
proceedings, (y) the Morgan Gold Loans shall not at any time
constitute Debt unless, at such time, for any reason whatsoever,
(1) no royalty income shall have accrued under the Royalty
Agreement dated as of December 5, 1984 between Copper Range
Company, a Michigan corporation, and the Borrower during the three
consecutive fiscal quarters of the Borrower most recently ended
prior to such time or (2) any payment required to have been made to
the Borrower under such agreement prior to such time shall not have
been paid on, or within 30 days after, the date such payment is due
and (z) amounts borrowed by the Borrower under life insurance
policies issued to the Borrower and covering employees or former
employees of the Borrower not in excess of the cash surrender value
of such policies shall not constitute Debt of the Borrower.
"Default" means any condition or event that constitutes
an Event of Default or that with the giving of notice or lapse of
time or both would, unless cured or waived, become an Event of
Default.
<PAGE>
<PAGE>
"Derivatives Obligations" of any Person means all
obligations of such Person in respect of any rate swap transaction,
basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction,
cap transaction, floor transaction, collar transaction, currency
swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with
respect to any of the foregoing transactions) or any combination of
the foregoing transactions, excluding (i) crude oil, natural gas
and petroleum market transactions on a spot or forward basis which
contemplate physical delivery and/or receipt and (ii) purchases of
foreign currency on a spot or forward basis to fund local currency
requirements.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in New York City are
authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its
office located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as
its Domestic Lending Office) or such other office as such Bank may
hereafter designate as its Domestic Lending Office by notice to
the Borrower and the Agent.
"Domestic Loan" means (i) a Committed Loan which bears
interest at a rate of interest determined in accordance with
Section 2.07(a) on the basis of the Base Rate pursuant to the
applicable Notice of Borrowing or Notice of Interest Rate Election
or Article 8 or (ii) an overdue amount which was a Domestic Loan
immediately before it became overdue.
"Effective Date" means the date this Agreement becomes
effective in accordance with Section 10.01.
"Environmental Laws" means any and all applicable
federal, state, local and foreign statutes, laws, judicial
decisions (to the extent such decisions are binding upon the
Borrower or any Subsidiary of the Borrower), regulations,
ordinances, rules, codes, injunctions, permits, grants, franchises
and licenses relating to pollution or the protection of public
health and the environment; including without limitation laws
relating to Releases of Hazardous Substances or wastes into the
environment including without limitation ambient air, surface
water, ground water or land, or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances or the clean-up or
other remediation thereof to the extent such activities impact the
environment.
<PAGE>
<PAGE>
"Equity Security" means, as to any Person, any capital
stock or other equity security, or any warrant or other right to
purchase such an equity security, issued by such Person.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary of the
Borrower and all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common
control which, together with the Borrower or any Subsidiary of the
Borrower, are treated as a single employer under Section 414 of the
Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business
Day on which commercial banks are open for international business
(including dealings in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its
office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative
Questionnaire as its Euro-Dollar Lending Office) or such other
office, branch or affiliate of such Bank as it may hereafter
designate as its Euro-Dollar Lending Office by notice to the
Borrower and the Agent.
"Euro-Dollar Loan" means (i) a Committed Loan which bears
interest at a rate of interest determined in accordance with
Section 2.07(b) on the basis of a London Interbank Offered Rate
pursuant to the applicable Notice of Borrowing or Notice of
Interest Rate Election or (ii) an overdue amount which was a
Euro-Dollar Loan immediately before it became overdue.
"Euro-Dollar Reserve Percentage" has the meaning set
forth in Section 2.15.
"Event of Acceleration" means any of the events or
conditions set forth in Sections 6.01(g) and 6.01(h) with respect
to the Borrower.
"Event of Default" has the meaning set forth in Section
6.01.
"Existing Agreement" has the meaning set forth in the
recitals hereto.
"Federal Funds Rate" means, for any day, the rate per
annum (rounded upward, if necessary, to the nearest 1/100th 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 Domestic Business Day next
<PAGE>
<PAGE>
succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Domestic
Business Day as so published on the next succeeding Domestic
Business Day, and (ii) if no such rate is so published on such next
succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Morgan on such day on such
transactions as determined by the Agent.
"Financial Officer" means the chief financial officer,
chief accounting officer or treasurer of the Borrower.
"Financing Documents" means this Agreement and the Notes.
"Fixed Rate Loans" means Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest
at the Base Rate pursuant to Section 8.01(a)) or any combination of
the foregoing.
"Group" of Loans means at any time a group of Committed
Loans consisting of (i) all Loans which are Domestic Loans at such
time or (ii) all Loans which are Euro-Dollar Loans having the same
Interest Period at such time; provided that, if a Loan of any
particular Bank is converted to or made as a Domestic Loan pursuant
to Section 8.02 or 8.04, such Loan shall be included in the same
Group or Groups of Loans from time to time as it would have been in
if it had not been so converted or made.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing any Debt of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt
(whether arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the holder of such Debt of the payment
thereof or to protect such holder against loss in respect thereof
(in whole or in part); provided that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has a
corresponding meaning. It is understood that the obligations of
the Borrower and its Subsidiaries under the arrangements entered
into in connection with the CLAM Credit Agreement do not constitute
a Guarantee of Debt of CLAM.
"Hazardous Substances" means any toxic, radioactive,
caustic or otherwise hazardous substance or waste regulated under
Environmental Laws, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any
constituent elements displaying any of the foregoing
characteristics regulated under Environmental Laws.
<PAGE>
<PAGE>
"Indemnitee" has the meaning set forth in Section
9.03(b).
"Information" means, collectively, (i) the Borrower's
annual report on Form 10-K for the fiscal year ended December 31,
1996 and (ii) the Borrower's quarterly report on Form 10-Q for the
fiscal quarter ended March 31, 1997.
"Interest Period" means: (1) with respect to each
Euro-Dollar Loan, a period commencing on the date of borrowing
specified in the applicable Notice of Borrowing or on the date
specified in the applicable Notice of Interest Rate Election and
ending one, two, three or six months thereafter, as the Borrower
may elect in the applicable Notice of Borrowing or Notice of
Interest Rate Election; provided that:
(a) any Interest Period that would otherwise end on a
day that is not a Euro-Dollar Business Day shall be extended
to the next succeeding Euro-Dollar Business Day unless such
day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period that begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end
on the last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after
the Termination Date shall end on the Termination Date.
(2) with respect to each Money Market LIBOR Borrowing,
the period commencing on the date of such Borrowing and ending such
whole number of months thereafter as the Borrower may elect in
accordance with Section 2.03: provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended
to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in
which case such Interest Period shall end on the next
preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end
on the last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after
the Termination Date shall end on the Termination Date.
<PAGE>
<PAGE>
(3) with respect to each Money Market Absolute Rate
Borrowing, the period commencing on the date of such Borrowing and
ending such number of days thereafter (but not less than 7 days) as
the Borrower may elect in accordance with Section 2.03; provided
that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended
to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after
the Termination Date will end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended, or any successor statute.
"Investment" means with respect to any Person (the
"Investor"), any investment by the Investor in any other Person,
whether by means of share purchase, capital contribution, loan,
advance, purchase of Debt, Guarantee of Debt, time deposit or
otherwise.
"LIBOR Auction" means a solicitation of Money Market
Quotes setting forth Money Market Margins based on the London
Interbank Offered Rate pursuant to Section 2.03.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind
in respect of such asset (including any production payment, any
obligation to deliver hydrocarbons in the future in satisfaction of
an advance payment previously received or any similar arrangement
which gives a creditor preferential access to minerals in place) or
any other arrangement the economic effect of which is to give a
creditor preferential access to such asset to satisfy its claim,
whether or not filed, recorded or otherwise perfected under
applicable law; provided that (i) the creation of interests in
property of the character commonly referred to as a "royalty
interest" or "overriding royalty interest", farmouts, joint
operating or unitization agreements, or other similar transactions
in the ordinary course of business and (ii) borrowings under life
insurance policies as described in clause (z) of the proviso to the
definition of "Debt" shall not be deemed to create a Lien. For the
purpose of this Agreement, the Borrower or any Subsidiary of the
Borrower shall be deemed to own subject to a Lien (i) any asset
that it has acquired or holds subject to the interest of a vendor
or lessor under any conditional sale agreement or other title
retention agreement relating to such asset or any Capital Lease or
(ii) any account receivable transferred by it with recourse for
collectibility (including any such transfer subject to a holdback
or similar arrangement which effectively imposes the risk of
collectibility upon the transferor).
<PAGE>
<PAGE>
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a
Money Market Loan and "Loans" means Domestic Loans or Euro-Dollar
Loans or Money Market Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth
in Section 2.07(b).
"Material Adverse Effect" means any material adverse
effect on the business, condition (financial or otherwise),
operations, properties or prospects of the Borrower and its
Subsidiaries, taken as a whole.
"Material Debt" means Debt (other than the Loans) of the
Borrower and/or one or more of its Subsidiaries, arising in one or
more related or unrelated transactions, in an aggregate principal
amount exceeding $10,000,000.
"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $10,000,000.
"Money Market Absolute Rate" has the meaning set forth in
Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan to be made
by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate
of such Bank as it may hereafter designate as its Money Market
Lending Office by notice to the Borrower and the Agent; provided
that any Bank may from time to time by notice to the Borrower and
the Agent designate separate Money Market Lending Offices for its
Money Market LIBOR Loans, on the one hand, and its Money Market
Absolute Rate Loans, on the other hand, in which case all
references herein to the Money Market Lending Office of such Bank
shall be deemed to refer to either or both of such offices, as the
context may require.
"Money Market LIBOR Loan" means a loan to be made by a
Bank pursuant to a LIBOR Auction (including such a loan bearing
interest at the Base Rate pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a
Money Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in
Section 2.03(d).
"Money Market Quote" means an offer by a Bank to make a
Money Market Loan in accordance with Section 2.03.
<PAGE>
<PAGE>
"Moody's" means Moody's Investors Service, Inc., or any
successor to such corporation's business of rating debt securities.
"Morgan" means Morgan Guaranty Trust Company of New York,
and its successors.
"Morgan Gold Loans" means the obligations of the Borrower
under the respective Credit Agreements dated as of December 23,
1994 and March 31, 1995 between the Borrower and Morgan, or under
any amended or additional credit agreements on substantially
similar terms, provided that the aggregate outstanding amount
borrowed thereunder shall at no time exceed 35,000 ounces of gold.
"Multiemployer Plan" means at any time an employee
pension benefit plan within the meaning of Section 4001(a)(3) of
ERISA to which any member of the ERISA Group is then making or
accruing an obligation to make contributions or has within the
preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group
during such five year period.
"Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing the
obligation of the Borrower to repay the Loans, and "Note" means any
one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed
Borrowing (as defined in Section 2.02) or a Notice of Money Market
Borrowing (as defined in Section 2.03(f)).
"Notice of Interest Rate Election" has the meaning set
forth in Section 2.06.
"Other Taxes" has the meaning set forth in Section 2.14.
"Parent" means, with respect to any Bank, any Person controlling
such Bank.
"Participant" has the meaning set forth in Section
9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
"Permitted Liens" means the Liens permitted to exist
under Section 5.09 hereof.
"Person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an
agency or instrumentality thereof.
<PAGE>
<PAGE>
"Petroleum Property" means any interest of the Borrower
or any Subsidiary of the Borrower in Proved Reserves.
"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412
of the Internal Revenue Code and either (i) is maintained, or
contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has at any time within the
preceding five years been maintained, or contributed to, by any
Person which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member of the
ERISA Group.
"Pricing Schedule" means the Schedule attached hereto
identified as such.
"Prime Rate" means the rate of interest publicly
announced by Morgan in New York City from time to time as its Prime
Rate.
"Proved Reserves" means "proved oil and gas reserves" as
specified under Rule 4-10(a)(2) of Regulation S-X of the Securities
and Exchange Commission.
"Quarterly Date" means the last Euro-Dollar Business Day
of each March, June, September and December.
"Reference Banks" means the principal London offices of
Texas Commerce Bank National Association, NationsBank of Texas,
N.A. (or an affiliate thereof with an office in London) and Morgan.
"Register" has the meaning set forth in Section 9.06(f).
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time to
time.
"Release" means any release, discharge, emission,
spilling, leakage, pumping, pouring, emptying, injection, escape,
leaching, dumping or disposal. The term "Released" has a
corresponding meaning.
"Required Banks" means at any time Banks having at least
66 2/3% of the aggregate amount of the Commitments, or if the
Commitments shall have terminated, holding Notes evidencing at
least 66 2/3% of the aggregate outstanding principal amount of the
Loans.
"S&P" means Standard & Poor's Ratings Group, a division
of The McGraw-Hill Companies, Inc., or any successor to its
business of rating debt securities.
<PAGE>
<PAGE>
"Significant Subsidiary" means (i) any Subsidiary of the
Borrower which owns any Petroleum Property and (ii) any other
Subsidiary of the Borrower which owns any capital stock of or Debt
of any other Significant Subsidiary.
"Stockholder Payment" means (i) any dividend or other
distribution on any Equity Securities of the Borrower and (ii) any
payment on account of the purchase, redemption, retirement or
acquisition of (a) any Equity Securities of the Borrower or (b) any
option, warrant or other right to acquire Equity Securities of the
Borrower.
"Subsidiary" means any corporation or other entity of
which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or
indirectly owned by the Borrower (or, if such term is used with
reference to any other Person, by such other Person).
"Taxes" has the meaning set forth in Section 2.14.
"Termination Date" means June 30, 2002 (or if such date
is not a Euro-Dollar Business Day, the next preceding Euro-Dollar
Business Day).
"Unfunded Liabilities" means, with respect to any Plan at
any time, the amount (if any) by which (i) the value of all benefit
liabilities under such Plan, determined on a plan termination basis
using the assumptions prescribed by the PBGC for purposes of
Section 4044 of ERISA, exceeds (ii) the fair market value of all
Plan assets allocable to such liabilities under Title I of ERISA
(excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to
the extent that such excess represents a potential liability of a
member of the ERISA Group to the PBGC or any other Person under
Title IV of ERISA.
"Wholly-Owned Subsidiary" means, with respect to any
Person, any Subsidiary all of the Equity Securities of which
(except directors' qualifying shares and investments by foreign
nationals mandated by applicable law) are at the time owned by such
Person and/or one or more of its Wholly-Owned Subsidiaries.
Section 1.02. Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall
be made, and all financial statements required to be delivered
hereunder shall be prepared in accordance with generally accepted
accounting principles as in effect from time to time, applied on a
basis consistent (except for changes concurred in by the Borrower's
independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its
<PAGE>
<PAGE>
Consolidated Subsidiaries delivered to the Banks; provided that, if
the Borrower notifies the Agent that it wishes to amend any
covenant in Article 5 to eliminate the effect of any change in
generally accepted accounting principles on the operation of such
covenant (or if the Agent notifies the Borrower that the Required
Banks wish to amend Article 5 for such purpose), then compliance
with such covenant shall be determined on the basis of generally
accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became
effective, until either such notice is withdrawn or such covenant
is amended in a manner satisfactory to the Borrower and the
Required Banks.
Section 1.03. Types of Borrowing. The term "Borrowing"
denotes the aggregation of Loans of the same type of one or more
Banks to be made to the Borrower pursuant to Article 2 on a single
date and for a single initial Interest Period. Borrowings are
classified for purposes of this Agreement either by reference to
the pricing of Loans comprising such Borrowing (e.g., a
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar
Loans) or by reference to the provisions of Article 2 under which
participation therein is determined (i.e., a "Committed Borrowing"
is a Borrowing under Section 2.01 in which all Banks participate in
proportion to their Commitments, while a "Money Market Borrowing"
is a Borrowing under Section 2.03 in which the Bank participants
are determined on the basis of their bids in accordance therewith).
Section 1.04. Other Definitional Provisions. References
in this Agreement to "Articles", "Sections", "Schedules" or
"Exhibits" shall be to Articles, Sections, Schedules or Exhibits of
or to this Agreement unless otherwise specifically provided. Any
of the terms defined in Section 1.01 may, unless the context
otherwise requires, be used in the singular or plural depending on
the reference. "Include", "includes" and "including" shall be
deemed to be followed by "without limitation" whether or not they
are in fact followed by such words or words of like import.
"Writing", "written" and comparable terms refer to printing, typing
and other means of reproducing words in a visible form. References
to any agreement or contract are to such agreement or contract as
amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof.
ARTICLE 2
THE CREDITS
Section 2.01. Commitments to Lend. Subject to the terms
and conditions set forth in this Agreement, each Bank severally
agrees to make loans to the Borrower from time to time during the
period from and including the date hereof to but not including the
Termination Date in amounts such that the aggregate principal
<PAGE>
<PAGE>
amount of Committed Loans by such Bank at any one time outstanding
shall not exceed the amount of its Commitment. Within the limits
specified in this Agreement, the Borrower may borrow pursuant to
this Section 2.01, repay or prepay Committed Loans and reborrow
pursuant to this Section 2.01. Each Borrowing under this Section
2.01 shall be in an aggregate principal amount of $10,000,000 or
any larger multiple of $1,000,000 (except that any such Borrowing
may be in the aggregate amount available in accordance with Section
3.01(b)) and shall be made from the several Banks ratably in
proportion to their respective Commitments.
Section 2.02. Method of Borrowing. The Borrower shall
give the Agent notice (a "Notice of Committed Borrowing") not later
than 10:30 A.M. (New York City time) on (x) the date of each
Domestic Borrowing and (y) the third Euro-Dollar Business Day
before each Euro-Dollar Borrowing, specifying:
(a) the proposed date of such Borrowing, which shall be
a Domestic Business Day in the case of a Domestic Borrowing or
a Euro-Dollar Business Day in the case of a Euro-Dollar
Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to
be Domestic Loans or Euro-Dollar Loans, and
(d) in the case of a Euro-Dollar Borrowing, the duration
of the initial Interest Period applicable thereto, subject to
the provisions of the definition of Interest Period. No more
than ten Groups of Euro-Dollar Loans shall be outstanding at
any one time.
Section 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed
Borrowings pursuant to Section 2.01, the Borrower may, as set forth
in this Section, request the Banks to make offers to make Money
Market Loans to the Borrower. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall
have no obligation to, accept any such offers in the manner set
forth in this Section.
(b) Money Market Quote Request. When the Borrower
wishes to request offers to make Money Market Loans under this
Section, it shall transmit to the Agent by telex or facsimile
transmission a Money Market Quote Request substantially in the form
of Exhibit D hereto so as to be received no later than 10:30 A.M.
(New York City time) on (x) the fifth Euro-Dollar Business Day
prior to the date of Borrowing proposed therein, in the case of a
LIBOR Auction or (y) the Domestic Business Day next preceding the
<PAGE>
<PAGE>
date of Borrowing proposed therein, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction
for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a
Domestic Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall
be $10,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of
Interest Period, and
(iv) whether the Money Market Quotes requested are to set
forth a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more
than one Interest Period in a single Money Market Quote Request.
No Money Market Quote Request shall be given within five
Euro-Dollar Business Days (or such other number of days as the
Borrower and the Agent may agree) of any other Money Market Quote
Request.
(c) Invitation for Money Market Quotes. Promptly upon
receipt of a Money Market Quote Request, the Agent shall send to
the Banks by telex or facsimile transmission an Invitation for
Money Market Quotes substantially in the form of Exhibit E hereto,
which shall constitute an invitation by the Borrower to each Bank
to submit Money Market Quotes offering to make the Money Market
Loans to which such Money Market Quote Request relates in
accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i)
Each Bank may submit a Money Market Quote containing an offer or
offers to make Money Market Loans in response to any Invitation for
Money Market Quotes. Each Money Market Quote must comply with the
requirements of this subsection (d) and must be submitted to the
Agent by telex or facsimile transmission at its offices specified
in or pursuant to Section 9.01 not later than (x) 2:00 P.M. (New
York City time) on the fourth Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y)
9:30 A.M. (New York City time) on the proposed date of Borrowing,
in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Agent shall have
mutually agreed and shall have notified to the Banks not later than
the date of the Money Market Quote Request for the first LIBOR
<PAGE>
<PAGE>
Auction or Absolute Rate Auction for which such change is to be
effective); provided that Money Market Quotes submitted by the
Agent (or any affiliate of the Agent) in the capacity of a Bank may
be submitted, and may only be submitted, if the Agent or such
affiliate notifies the Borrower of the terms of the offer or offers
contained therein not later than (x) one hour prior to the deadline
for the other Banks, in the case of a LIBOR Auction or (y) 15
minutes prior to the deadline for the other Banks, in the case of
an Absolute Rate Auction. Subject to Articles 3 and 6, any Money
Market Quote so made shall be irrevocable except with the written
consent of the Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially
the form of Exhibit F hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan
for which each such offer is being made, which principal
amount (w) may be greater than or less than the
Commitment of the quoting Bank, (x) must be $5,000,000 or
a larger multiple of $1,000,000, (y) may not exceed the
principal amount of Money Market Loans for which offers
were requested and (z) may be subject to an aggregate
limitation as to the principal amount of Money Market
Loans for which offers being made by such quoting Bank
may be accepted,
(C) in the case of a LIBOR Auction, the margin
above or below the applicable London Interbank Offered
Rate (the "Money Market Margin") offered for each such
Money Market Loan, expressed as a percentage (specified
to the nearest 1/10,000th of 1%) to be added to or
subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the
rate of interest per annum (specified to the nearest
1/10,000th of 1%) (the "Money Market Absolute Rate")
offered for each such Money Market Loan, and
(E) the identity of the quoting Bank. A Money
Market Quote may set forth up to five separate offers by
the quoting Bank with respect to each Interest Period
specified in the related Invitation for Money Market
Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit
F hereto or does not specify all of the information
required by subsection (d)(ii);
<PAGE>
<PAGE>
(B) contains qualifying, conditional or similar
language;
(C) proposes terms other than or in addition to
those set forth in the applicable Invitation for Money
Market Quotes; or
(D) arrives after the time set forth in subsection
(d)(i).
(e) Notice to Borrower. The Agent shall promptly notify
the Borrower of the terms (x) of any Money Market Quote submitted
by a Bank that is in accordance with subsection (d) and (y) of any
Money Market Quote that amends, modifies or is otherwise
inconsistent with a previous Money Market Quote submitted by such
Bank with respect to the same Money Market Quote Request. Any such
subsequent Money Market Quote shall be disregarded by the Agent
unless such subsequent Money Market Quote is submitted solely to
correct a manifest error in such former Money Market Quote. The
Agent's notice to the Borrower shall specify (A) the aggregate
principal amount of Money Market Loans for which offers have been
received for each Interest Period specified in the related Money
Market Quote Request, (B) the respective principal amounts and
Money Market Margins or Money Market Absolute Rates, as the case
may be, so offered and (C) if applicable, limitations on the
aggregate principal amount of Money Market Loans for which offers
in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than
10:30 A.M. (New York City time) on (x) the third Euro-Dollar
Business Day prior to the proposed date of Borrowing, in the case
of a LIBOR Auction or (y) the proposed date of Borrowing, in the
case of an Absolute Rate Auction (or, in either case, such other
time or date as the Borrower and the Agent shall have mutually
agreed and shall have notified to the Banks not later than the date
of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective),
the Borrower shall notify the Agent of its acceptance or
non-acceptance of the offers so notified to it pursuant to
subsection (e). In the case of acceptance, such notice (a "Notice
of Money Market Borrowing") shall specify the aggregate principal
amount of offers for each Interest Period that are accepted. The
Borrower may accept any Money Market Quote in whole or in part;
provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in
the related Money Market Quote Request,
(ii) the principal amount of each Money Market Borrowing
must be $10,000,000 or a larger multiple of $1,000,000,
<PAGE>
<PAGE>
(iii) acceptance of offers may only be made on the basis
of ascending Money Market Margins or Money Market Absolute
Rates, as the case may be, and
(iv) the Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise fails to
comply with the requirements of this Agreement.
(g) Allocation by Agent. If offers are made by two or
more Banks with the same Money Market Margins or Money Market
Absolute Rates, as the case may be, for a greater aggregate
principal amount than the amount in respect of which such offers
are accepted for the related Interest Period, the principal amount
of Money Market Loans in respect of which such offers are accepted
shall be allocated by the Agent among such Banks as nearly as
possible (in multiples of $1,000,000, as the Agent may deem
appropriate) in proportion to the aggregate principal amounts of
such offers. Determinations by the Agent of the amounts of Money
Market Loans shall be conclusive in the absence of manifest error.
Section 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent
shall promptly notify each Bank of the contents thereof and of such
Bank's share (if any) of such Borrowing, and such Notice of
Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on
the date of each Borrowing, each Bank participating therein shall
(except as provided in subsection (c) of this Section) make
available its share of such Borrowing, in Federal or other funds
immediately available in New York City, to the Agent at its address
referred to in Section 9.01. Unless the Agent determines that any
applicable condition specified in Article 3 has not been satisfied,
the Agent will make the funds so received from the Banks available
to the Borrower on such date at the Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on
which the Borrower is to repay all or any part of an outstanding
Loan from such Bank, such Bank shall apply the proceeds of its new
Loan to make such repayment and 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 Bank to the
Agent as provided in subsection (b) of this Section, or remitted by
the Borrower to the Agent as provided in Section 2.11, as the case
may be.
<PAGE>
<PAGE>
(d) Unless the Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not
make available to the Agent such Bank's share of such Borrowing,
the Agent may assume that such Bank has made such share available
to the Agent on the date of such Borrowing in accordance with
subsections (b) and (c) of this Section 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 that such
Bank shall not have so made such share available to the Agent, such
Bank and the Borrower severally agree to repay to the Agent
forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to
the Agent, at (i) in the case of the Borrower, a rate per annum
equal to the higher of the Federal Funds Rate and the interest rate
applicable thereto pursuant to Section 2.07 and (ii) in the case of
such Bank, the Federal Funds Rate. If such Bank shall repay to the
Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes
of this Agreement.
Section 2.05. Notes. (a) The Loans of each Bank shall
be evidenced by a single Note payable to such Bank for the account
of its Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the
Agent, request that its Loans of a particular type be
evidenced by separate Notes. Each such Note shall be in
substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely
Loans of the relevant type. Each reference in this Agreement
to the "Note" of such Bank shall be deemed to refer to and
include any or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section
10.01, the Agent shall forward such Note to such Bank. Each
Bank shall record the date, amount, type and, in the case of
a Money Market Loan, maturity of each Loan made by it and the
date and amount of each payment of principal made by the
Borrower with respect thereto, and may, if such Bank so elects
in connection with any transfer or enforcement of its Note,
endorse on the schedule forming a part thereof appropriate
notations to evidence the foregoing information with respect
to each such Loan then outstanding; provided that the failure
of any Bank to make any such endorsement shall not affect the
obligations of the Borrower hereunder or under the Notes.
Each Bank is hereby irrevocably authorized by the Borrower so
to endorse its Note and to attach to and make a part of its
Note a continuation of any such schedule as and when required.
<PAGE>
<PAGE>
Section 2.06. Method of Electing Interest Rates for
Committed Loans.
(a) The Committed Loans included in each Committed
Borrowing shall bear interest initially at the type of rate
specified by the Borrower in the applicable Notice of Committed
Borrowing. Thereafter, the Borrower may from time to time elect to
change or continue the type of interest rate borne by each Group of
Loans (subject in each case to the provisions of Article 8), as
follows:
(i) if such Loans are Domestic Loans, the Borrower may
elect to convert such Loans to Euro-Dollar Loans as of any
Euro-Dollar Business Day; and
(ii) if such Loans are Euro-Dollar Loans, the Borrower
may elect to convert such Loans to Domestic Loans or elect to
continue such Loans as Euro-Dollar Loans for an additional
Interest Period, in each case effective on the last day of the
then current Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice
of Interest Rate Election") to the Agent at least three Euro-Dollar
Business Days before the conversion or continuation selected in
such notice is to be effective. A Notice of Interest Rate Election
may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans; provided that (i)
such portion is allocated ratably among the Loans comprising such
Group and (ii) the portion to which such Notice applies, and the
remaining portion to which it does not apply, are each $10,000,000
or any larger multiple of $1,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which
such notice applies;
(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply
with the applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be
converted, the new type of Loans and, if such new Loans are
Euro-Dollar Loans, the duration of the initial Interest Period
applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar
Loans for an additional Interest Period, the duration of such
additional Interest Period. Each Interest Period specified in
a Notice of Interest Rate Election shall comply with the
provisions of the definition of Interest Period.
<PAGE>
<PAGE>
(c) Upon receipt of a Notice of Interest Rate Election
from the Borrower pursuant to subsection (a) above, the Agent shall
promptly notify each Bank of the contents thereof and such notice
shall not thereafter be revocable by the Borrower. If the Borrower
fails to deliver a timely Notice of Interest Rate Election to the
Agent for any Group of Euro-Dollar Loans, such Loans shall be
converted into Domestic Loans on the last day of the then current
Interest Period applicable thereto.
Section 2.07. Interest Rates. (a) Each Domestic Loan
shall bear interest on the outstanding principal amount thereof,
for each day from the date such Loan is made until it becomes due,
at a rate per annum equal to the Base Rate for such day. Such
interest shall be payable quarterly in arrears on each Quarterly
Date (commencing with the first such date after the date hereof)
and, with respect to the principal amount of any Domestic Loan
converted to a Euro-Dollar Loan, on each date that a Domestic Loan
is so converted. Any overdue principal of or interest on any
Domestic Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 2% plus the rate
otherwise applicable to Domestic Loans for such day.
(b) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each day during the
Interest Period applicable thereto, at a rate per annum equal to
the sum of the Applicable Margin for such day plus the London
Interbank Offered Rate applicable to such Interest Period. Such
interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than three months,
at intervals of three months after the first day thereof. The
"London Interbank Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher
1/16 of 1%) of the respective rates per annum at which deposits in
dollars are offered to each of the Reference Banks in the London
interbank market at approximately 11:00 A.M. (London time) two
Euro-Dollar Business Days before the first day of such Interest
Period in an amount approximately equal to the principal amount of
the Euro-Dollar Loan of such Reference Bank to which such Interest
Period is to apply and for a period of time comparable to such
Interest Period.
(c) Any overdue principal of or interest on any
Euro-Dollar Loan shall bear interest, payable on demand, for each
day from and including the date payment thereof was due to but
excluding the date of actual payment, at a rate per annum equal to
the sum of 2% plus the higher of (i) the sum of the Applicable
Margin for such day plus the London Interbank Offered Rate
applicable to the Interest Period for such Loan and (ii) the
Applicable Margin for such day plus the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing
<PAGE>
<PAGE>
(x) the average (rounded upward, if necessary, to the next higher
1/16 of 1%) of the respective rates per annum at which one day (or,
if such amount due remains unpaid more than three Euro-Dollar
Business Days, then for such other period of time not longer than
six months as the Agent may select) deposits in dollars in an
amount approximately equal to such overdue payment due to each of
the Reference Banks are offered to such Reference Bank in the
London interbank market for the applicable period determined as
provided above by (y) 1.00 minus the Euro-Dollar Reserve Percentage
(or, if the circumstances described in Sections 8.01(a) or 8.01(b)
shall exist, the rate applicable to Domestic Loans for such day).
(d) Subject to Section 8.01(a), each Money Market LIBOR
Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per
annum equal to the sum of the London Interbank Offered Rate for
such Interest Period (determined in accordance with Section 2.07(b)
as if the related Money Market LIBOR Borrowing were a Committed
Euro-Dollar Borrowing) plus (or minus) the Money Market Margin
quoted by the Bank making such Loan in accordance with Section
2.03. Each Money Market Absolute Rate Loan shall bear interest on
the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the Money Market
Absolute Rate quoted by the Bank making such Loan in accordance
with Section 2.03. Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest
Period is longer than three months, at intervals of three months
after the first day thereof. Any overdue principal of or interest
on any Money Market Loan shall bear interest, payable on demand,
for each day until paid at a rate per annum equal to the sum of 2%
plus the Base Rate for such day.
(e) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give prompt
notice to the Borrower and the participating Banks of each rate of
interest so determined, and its determination thereof shall be
conclusive in the absence of manifest error.
(f) Each Reference Bank agrees to use its best efforts
to furnish quotations to the Agent as contemplated hereby. If any
Reference Bank does not furnish a timely quotation, the Agent shall
determine the relevant interest rate on the basis of the quotation
or quotations furnished by the remaining Reference Bank or Banks
or, if none of such quotations is available on a timely basis, the
provisions of Section 8.01 shall apply.
(g) The "Applicable Margin" at any date means the
applicable percentage determined in accordance with the Pricing
Schedule.
<PAGE>
<PAGE>
Section 2.08. Facility Fee. (a) The Borrower shall pay
to the Agent for the account of the Banks ratably a facility fee at
the Facility Fee Rate (determined daily in accordance with the
Pricing Schedule). Such facility fee shall accrue (i) from and
including the Effective Date to but excluding the Termination Date
(or earlier date of termination of the Commitments in their
entirety), on the daily aggregate amount of the Commitments
(whether used or unused) and (ii) from and including the
Termination Date or such earlier date of termination to but
excluding the date the Loans shall be repaid in their entirety, on
the daily aggregate outstanding principal amount of the Loans.
(b) Payments. Accrued fees under this Section shall be
payable quarterly in arrears on each Quarterly Date and upon the
date of termination of the Commitments in their entirety (and, if
later, the date the Loans shall be repaid in their entirety).
Section 2.09. Termination or Reduction of Commitments.
(a) Optional Termination or Reduction. The Borrower
may, upon at least three Domestic Business Days' notice to the
Agent, (i) terminate the Commitments at any time, if no Loans are
outstanding at such time or (ii) ratably reduce from time to time
by an aggregate amount of $5,000,000 or any larger multiple of
$1,000,000, the aggregate amount of the Commitments in excess of
the aggregate outstanding principal amount of the Loans.
(b) Scheduled Termination. The Commitments shall
terminate on the Termination Date, and any Loans then outstanding
(together with accrued interest thereon) shall be due and payable
on such date.
Section 2.10. Optional Prepayments. (a) The Borrower
may, upon at least (i) one Domestic Business Day's notice to the
Agent, in the case of Domestic Loans (or Money Market LIBOR Loans
bearing interest at the Base Rate pursuant to Section 8.01(a)) and
(ii) three Euro-Dollar Business Days' notice to the Agent, in the
case of Euro-Dollar Loans, prepay any Group of Committed Loans (or
any Borrowing comprised of Money Market LIBOR Loans bearing
interest at the Base Rate pursuant to Section 8.01(a)) in whole at
any time, or from time to time in part in amounts aggregating
$10,000,000 or any larger multiple of $1,000,000, by paying the
principal amount to be prepaid together with accrued interest
thereon to the date of prepayment and, in the case of a prepayment
of Euro-Dollar Loans, together with any additional amounts payable
pursuant to Section 2.12. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks included
in such Group (or Borrowing).
<PAGE>
<PAGE>
(b) Except as provided in subsection (a) above, the
Borrower may not prepay all or any portion of the principal amount
of any Money Market Loan before the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to
this Section, the Agent shall promptly notify each Bank of the
contents thereof and of such Bank's ratable share of such
prepayment and such notice of prepayment shall not thereafter be
revocable by the Borrower.
Section 2.11. General Provisions as to Payments. (a)
The Borrower shall make each payment of principal of, and interest
on, the Loans and of fees hereunder, not later than 12:00 Noon (New
York City time) on the date when due, in Federal or other funds
immediately available in New York City, to the Agent at its address
referred to in Section 9.01. The Agent will promptly distribute to
each Bank its ratable share of each such payment received by the
Agent for the account of the Banks. Whenever any payment of
principal of, or interest on, the Domestic Loans or of fees shall
be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of, or interest
on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding
Euro-Dollar Business Day. Whenever any payment of principal of, or
interest on, the Money Market Loans shall be due on a day which is
not a Euro-Dollar Business Day, the date for payment thereof shall
be extended to the next succeeding Euro-Dollar Business Day. If
the date for any payment of principal is extended by operation of
law or otherwise, interest thereon shall be payable for such
extended time.
(b) Unless the Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the
Banks hereunder that the Borrower will not make such payment in
full, the Agent may assume that the Borrower has made such payment
in full to the Agent on such date and the Agent may, in reliance
upon such assumption, cause to be distributed to each Bank on such
due date an amount equal to the amount then due such Bank. If and
to the extent that the Borrower shall not have so made such
payment, each Bank shall repay to the Agent forthwith on demand
such amount distributed to such Bank together with interest
thereon, for each day from the date such amount is distributed to
such Bank until the date such Bank repays such amount to the Agent,
at the Federal Funds Rate.
<PAGE>
<PAGE>
Section 2.12. Funding Losses. If the Borrower makes any
payment of principal with respect to any Fixed Rate Loan or any
Fixed Rate Loan is converted to a Domestic Loan (pursuant to
Article 2, 6 or 8 or otherwise) on any day other than the last day
of the Interest Period applicable thereto, or the last day of an
applicable period fixed pursuant to Section 2.07(c), or if the
Borrower fails to borrow or prepay any Fixed Rate Loans after
notice has been given to any Bank in accordance with Section 2.04
or 2.10(c), the Borrower shall reimburse each Bank on demand for
any resulting loss or expense incurred by such Bank (or by any
existing or prospective Participant in the related Loan), including
(without limitation) any loss incurred in obtaining, liquidating or
employing deposits from third parties, but excluding loss of
margin, for the period after any such payment or failure to borrow
or prepay; provided that such Bank shall have delivered to the
Borrower a certificate as to the amount of such loss or expense,
which certificate shall be conclusive in the absence of manifest
error.
Section 2.13. Computation of Interest and Fees.
Interest based on the Prime Rate hereunder shall be computed on the
basis of a year of 365 days (or 366 days in a leap year) and paid
for the actual number of days elapsed (including the first day but
excluding the last day). All other interest and facility fees
shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but
excluding the last day).
Section 2.14. Taxes. (a) Any and all payments by the
Borrower to or for the account of any Bank or the Agent hereunder
or under any other Financing Document shall be made free and clear
of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each
Bank and the Agent, taxes imposed on its income, and franchise or
similar taxes imposed on it, by (i) any jurisdiction (or political
subdivision thereof) of which the Agent or such Bank, as the case
may be, is a citizen or resident or in which such Bank has a
permanent establishment (or is otherwise engaged in the active
conduct of its banking business through an office or a branch)
which is such Bank's Applicable Lending Office, (ii) the
jurisdiction (or any political subdivision thereof) in which the
Agent or such Bank is organized or (iii) any jurisdiction (or
political subdivision thereof) in which such Bank or the Agent is
doing business on the date on which it becomes a Bank which taxes
(in the case of this clause (iii)) are imposed solely as a result
of doing business in such jurisdiction (all such non-excluded
taxes, duties, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If the
<PAGE>
<PAGE>
Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder or under any other Financing
Document to any Bank or the Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums
payable under this Section 2.14) such Bank or the Agent (as the
case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law, and (iv) the Borrower shall use its
best efforts to furnish to the Agent, at its address referred to in
Section 9.01, the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present
or future stamp or documentary taxes or any other excise or
property taxes, or charges or similar levies which arise from any
payment made hereunder or under any other Financing Document or
from the execution or delivery of, or otherwise with respect to,
this Agreement or any other Financing Document (hereinafter
referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Bank and the
Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by
any jurisdiction on amounts payable under this Section 2.14) paid
by such Bank or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or
with respect thereto; provided that no such indemnification shall
be payable to the extent such Taxes, Other Taxes or liabilities
shall have been incurred as a consequence of gross negligence or
willful misconduct by such Bank or the Agent, as the case may be.
This indemnification shall be made within 15 days from the date
such Bank or the Agent (as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution
and delivery of this Agreement in the case of each Bank listed on
the signature pages hereof and on the date on which it becomes a
Bank in the case of each other Bank, shall provide the Borrower
with Internal Revenue Service form 1001 or 4224, as appropriate, or
any successor form prescribed by the Internal Revenue Service, and
shall (but only so long as such Bank remains lawfully able to do
so) deliver to the Borrower additional copies of such forms on or
before the date that such forms expire or become obsolete or after
the occurrence of an event requiring a change in the most recent
form so delivered by it and such amendments thereto as may be
reasonably requested by the Borrower, in each case certifying that
such Bank is entitled to benefits under an income tax treaty to
which the United States is a party which reduces the rate of
<PAGE>
<PAGE>
withholding tax on payments of interest or fees or certifying that
the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United
States. If the form provided by a Bank at the time such Bank first
becomes a party to this Agreement indicates a United States
withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from "Taxes" as defined in
Section 2.14(a).
(e) For any period with respect to which a Bank has
failed to provide the Borrower with the form required pursuant to
Section 2.14(d), if any (other than if such failure is due to a
change in treaty, law or regulation occurring subsequent to the
date on which a form originally was required to be provided), such
Bank shall not be entitled to indemnification under Section 2.14(a)
or 2.14(c) with respect to Taxes imposed by the United States which
Taxes would not have been imposed but for such failure to provide
such form; provided, however, that should a Bank, which is
otherwise exempt from or subject to a reduced rate of withholding
tax, become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as the
Bank shall reasonably request to assist the Bank to recover such
Taxes.
(f) If the Borrower is required to pay additional
amounts to or for the account of any Bank pursuant to this Section
2.14, then such Bank will change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the sole
judgment of such Bank, is not otherwise disadvantageous to such
Bank. No Bank shall be entitled to receive any greater payment
under this Section 2.14 as a result of the designation by such Bank
of a different Applicable Lending Office after the date hereof,
unless such designation is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.02 or 8.03
requiring such Bank to designate a different Applicable Lending
Office under certain circumstances or at a time when the
circumstances giving rise to such greater payment did not exist.
(g) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations
of the Borrower contained in this Section 2.14 shall survive the
payment in full of principal and interest hereunder.
<PAGE>
<PAGE>
Section 2.15. Regulation D Compensation. Each Bank may
require the borrower to pay, contemporaneously with each payment of
interest on the Euro-Dollar Loans, additional interest on the
related Euro-Dollar Loan of such Bank at a rate per annum
determined by such Bank up to but not exceeding the excess of (i)
(a) the applicable London Interbank Offered Rate divided by (b) one
minus the Euro-Dollar Reserve Percentage over (ii) the applicable
London Interbank Offered Rate. Any Bank wishing to require payment
of such additional interest (x) shall so notify the Borrower and
the Agent, in which case such additional interest on the
Euro-Dollar Loans of such Bank shall be payable to such Bank at the
place indicated in such notice with respect to each Interest Period
commencing at least three Euro-Dollar Business Days after the
giving of such notice, and (y) shall notify the Borrower at least
five Euro-Dollar Business Days prior to each date on which interest
is payable on the Euro-Dollar Loans of the amount then due it under
this Section.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day,
as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve
requirement for a member bank of the Federal Reserve System in New
York City with deposits exceeding five billion dollars in respect
of
"Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to
which the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which includes
loans by a non-United States office of any Bank to United States
residents).
ARTICLE 3
CONDITIONS TO BORROWING
The obligation of each Bank to make a Loan on the
occasion of each Borrowing is subject to the satisfaction of such
of the following conditions as shall not have been expressly waived
by the Required Banks:
Section 3.01. Each Borrowing. In the case of each
Borrowing:
(a) receipt by the Agent of a Notice of Borrowing as
required by Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed
the aggregate amount of the Commitments;
<PAGE>
<PAGE>
(c) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing; and
(d) the fact that each of the representations and
warranties made by the Borrower in or pursuant to the Financing
Documents (except, in the case of any Borrowing subsequent to the
first Borrowing under this Agreement, the representations and
warranties set forth in Section 4.04) shall be true on and as of
the date of such Borrowing.
Each Borrowing under this Agreement shall be deemed to be a
representation and warranty by the Borrower on the date of such
Borrowing as to the facts specified in subsections (b), (c) and (d)
of this Section 3.01.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and
each Bank that:
Section 4.01. Corporate Existence and Power. The
Borrower and each of its Significant Subsidiaries is a corporation
duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all corporate
powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now
conducted and as proposed to be conducted.
Section 4.02. Corporate and Governmental Authorization;
No Contravention. The execution and delivery by the Borrower of
each of the Financing Documents and the performance by the Borrower
of its obligations thereunder are within the corporate power of the
Borrower, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or
regulation or of the Constitutional Documents of the Borrower or
any of its Subsidiaries or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Borrower or any
of its Subsidiaries or result in or require the imposition of any
Lien on any asset of the Borrower or any of its Subsidiaries.
Section 4.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of the Borrower and each
Note, when executed and delivered as contemplated by this
Agreement, will constitute a valid and binding obligation of the
Borrower, in each case enforceable in accordance with its terms
except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of
general applicability.<PAGE>
<PAGE>
Section 4.04. Information.
(a) Financial Statements. The historical consolidated
financial statements of the Borrower as of and for the fiscal year
ending on December 31, 1996 and as of and for the three-month
period ending on March 31, 1997 included in the Information fairly
present the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as at the dates and the consolidated
results of operations and cash flows of the Borrower and its
Consolidated Subsidiaries for the periods therein set forth, all in
accordance with generally accepted accounting principles
consistently applied (except as disclosed therein).
(b) Full Disclosure. The Information did not as of the
respective dates as of which information is stated therein, and
does not, as of the date of this Agreement, contain any untrue
statement of material fact or omit to state a material fact
necessary in order to make the statements contained therein, in the
light of the circumstances under which they were made, not
misleading.
Section 4.05. No Material Adverse Change. Since the
respective dates as of which information is stated in the
Information, no event has occurred and no condition has come into
existence which has had, or could reasonably be expected to have,
a Material Adverse Effect.
Section 4.06. Litigation. Except as disclosed in the
Information, there is no action, suit or proceeding pending
against, or to the knowledge of the Borrower threatened against or
affecting, the Borrower or any Subsidiary of the Borrower before
any court or arbitrator or any governmental body, agency or
official (i) in which an adverse decision could reasonably be
expected which would have a Material Adverse Effect or (ii) which
in any manner questions the validity of any Financing Document,
other than any such action, suit or proceeding that the Borrower
does not deem material and of which it has notified the Banks,
unless the Required Banks have, in the good faith exercise of their
discretion, notified the Borrower that they deem such action, suit
or proceeding material.
Section 4.07. Compliance with ERISA. Each member of the
ERISA Group (x) has fulfilled its obligations under the minimum
funding standards of ERISA and the Internal Revenue Code with
respect to each Plan and (y) is in compliance in all material
respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan other than any
failure to so comply that could not reasonably be expected to have
<PAGE>
<PAGE>
a Material Adverse Effect. No member of the ERISA Group has (i)
sought a waiver of the minimum funding standard under Section 412
of the Internal Revenue Code in respect of any Plan, (ii) failed to
make any contribution or payment to any Plan or Multiemployer Plan
or in respect of any Benefit Arrangement, or made any amendment to
any Plan or Benefit Arrangement, which has resulted or could
reasonably be expected to result in the imposition of a Lien or the
posting of a bond or other security under ERISA or the Internal
Revenue Code or (iii) incurred any liability under Title IV of
ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA.
Section 4.08. Taxes. The Borrower and its Subsidiaries
have filed all United States Federal income tax returns that are
required to be filed by them and have paid all taxes shown as due
pursuant to such returns or pursuant to any assessment received by
any of them, except such taxes, if any, as are being contested in
good faith and as to which reserves have been provided, as and to
the extent required by generally accepted accounting principles.
The charges, accruals and reserves on the books of the Borrower and
its Subsidiaries in respect of taxes or other governmental charges
are adequate.
Section 4.09. Compliance with Laws. The Borrower and
its Subsidiaries are in compliance in all material respects with
all applicable laws, rules and regulations, other than such laws,
rules or regulations (i) the validity or applicability of which the
Borrower or such Subsidiary is contesting in good faith or (ii)
failure to comply with which cannot reasonably be expected to have
a Material Adverse Effect.
Section 4.10. Investment Company Act. Neither the
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.
Section 4.11. Public Utility Holding Company Act.
Neither the Borrower nor any of its Subsidiaries is a "holding
company", or an "affiliate" of a "holding company" or a "subsidiary
company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 4.12. Ownership of Property, Liens. Except to
an extent which could not reasonably be expected to have a Material
Adverse Effect: the Borrower and its Subsidiaries have good and
marketable title to and are in lawful possession of, or have valid
leasehold interests in, all properties and other assets (real or
personal, tangible, intangible or mixed) purported to be owned by
the Borrower and its Subsidiaries or to be leased by the Borrower
<PAGE>
<PAGE>
and its Subsidiaries (as the case may be), and none of such
properties and assets is subject to any Liens, except Permitted
Liens, all of such properties and other assets are in good working
order and condition, ordinary wear and tear excepted, and the
Borrower and its Subsidiaries have received all deeds, assignments,
bills of sale and other documents and duly effected all recordings,
filings and other actions necessary or appropriate to establish,
protect and perfect its right, title and interest in and to all
such properties and assets.
Section 4.13. Current Disclosure. Except for political,
economic and social matters of general knowledge within the
international banking community, the Borrower has disclosed to the
Banks in writing any and all facts which to the best of its
knowledge could reasonably be expected to have a Material Adverse
Effect.
Section 4.14. Use of Proceeds. The proceeds of the
Loans will be used for the Borrower's general corporate purposes.
None of such proceeds will be used, directly or indirectly, for any
purpose which would violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System, as in effect from time to
time.
Section 4.15. Environmental Matters. In the ordinary
course of its business, the Borrower conducts periodic reviews of
the effect of Environmental Laws on the business, operations and
properties of the Borrower and its Subsidiaries, in the course of
which it identifies and evaluates associated liabilities and costs,
if any, (including, without limitation, (a) any capital or
operating expenditures required for clean-up or closure of
properties presently or, if notice of potential liability has been
received or if the Borrower is otherwise aware that such
expenditures will be required, previously owned, (b) any capital or
operating expenditures required to achieve or maintain compliance
with environmental protection standards imposed by Environmental
Law or as a condition of any license, permit or contract, (c) any
related constraints on operating activities, including any periodic
or permanent shutdown of any facility or reduction in the level of
or change in the nature of operations conducted thereat, (d) any
costs or liabilities in connection with disposal of Hazardous
Substances at third-party sites, and (e) any actual or known
potential liabilities under Environmental Laws to third parties,
including employees). On the basis of these reviews and other
relevant information, the Borrower has reasonably concluded that
such associated liabilities and costs, including the costs of
compliance with Environmental Laws, are unlikely to have a Material
Adverse Effect.
<PAGE>
<PAGE>
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any
Commitment hereunder or any amount payable under any Note remains
unpaid or any amount that is due and payable hereunder remains
unpaid:
Section 5.01. Information. The Borrower will deliver to
each of the Banks:
(a) as soon as available and in any event within 120
days after the end of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal year and the related
consolidated statements of earnings, stockholders' equity and cash
flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all
reported on in a manner acceptable to the Securities and Exchange
Commission by KPMG Peat Marwick or other independent public
accountants of nationally recognized standing;
(b) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each fiscal
year of the Borrower, a condensed consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such
quarter and the related condensed consolidated statements of
earnings and cash flows for such quarter or for the portion of the
Borrower's fiscal year ended at the end of such quarter, setting
forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the
Borrower's previous fiscal year, all certified (subject to normal
year-end audit adjustments) as to fairness of presentation,
generally accepted accounting principles and consistency by the
chief financial officer or the Controller of the Borrower;
(c) simultaneously with the delivery of each set of
financial statements referred to in subsections (a) and (b) above,
a certificate of the chief financial officer or the Treasurer of
the Borrower (i) setting forth in reasonable detail the
calculations required to establish whether the Borrower was in
compliance with the requirements of Sections 5.11 to 5.13,
inclusive, on the date of such financial statements and (ii)
stating whether there exists on the date of such certificate any
Default and, if any Default then exists, setting forth the details
thereof and the action which the Borrower is taking or proposes to
take with respect thereto;
<PAGE>
<PAGE>
(d) forthwith upon the occurrence of any Default, a
certificate of the chief financial officer or the Treasurer of the
Borrower setting forth details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
(e) promptly upon the mailing thereof to the
shareholders of the Borrower generally, copies of all financial
statements, reports and proxy statements so mailed;
(f) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and annual,
quarterly or current reports which the Borrower shall have filed
with the Securities and Exchange Commission;
(g) if and when any member of the ERISA Group (i) gives
or is required to give notice to the PBGC of any "reportable event"
(as defined in Section 4043 of ERISA) with respect to any Plan
which might constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan
has given or is required to give notice of any such reportable
event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete
or partial withdrawal liability under Title IV of ERISA or notice
that any Multiemployer Plan is in reorganization, is insolvent or
has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate,
impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan,
a copy of such notice; (iv) applies for a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code, a
copy of such application; (v) gives notice of intent to terminate
any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy
of such notice; or (vii) fails to make any payment or contribution
to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could reasonably be expected to
result in the imposition of a Lien or the posting of a bond or
other security under ERISA or the Internal Revenue Code, a
certificate of a Financial Officer setting forth details as to such
occurrence and action, if any, which the Borrower or applicable
member of the ERISA Group is required or proposes to take; and
(h) from time to time such additional information
regarding the financial position or business of the Borrower as the
Agent, at the request of any Bank, may reasonably request.
<PAGE>
<PAGE>
Section 5.02. Payment of Obligations. The Borrower
will, and will cause each of its Subsidiaries to, pay and
discharge, before they give rise to a Lien on any of its property
or assets (or, if later, when the same shall become due and
payable), (i) all material claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons
which, in any such case, if unpaid, might by law give rise to a
Lien upon any of its property or assets, and (ii) all material
taxes, assessments and governmental charges or levies upon it or
its property or assets, except where any of the items in clause (i)
or (ii) above may be contested in good faith by appropriate
proceedings, and the Borrower or such Subsidiary, as the case may
be, shall have set aside on its books, in accordance with generally
accepted accounting principles, appropriate reserves, if any, for
the accrual of any such items.
Section 5.03. Maintenance of Property. The Borrower
will keep, and will cause each of its Subsidiaries to keep, all
property useful and necessary in its business in good working order
and condition, ordinary wear and tear excepted.
Section 5.04. Insurance. The Borrower will maintain,
and will cause each of its Subsidiaries to maintain, insurance
coverage with respect to their respective properties and business
against such liabilities, casualties, risks and contingencies and
in such types and amounts and with such financially sound and
reputable companies, all as are generally consistent with its past
practices (subject to availability of such insurance at reasonable
costs) and the prudent and customary practices of the oil and gas
industry. Upon the request of the Agent, the Borrower will furnish
or cause to be furnished to the Banks from time to time a summary
of the insurance coverage of the Borrower and its Subsidiaries in
form and substance satisfactory to the Required Banks in their
reasonable judgment.
Section 5.05. Compliance with Law. The Borrower will
comply, and cause each of its Subsidiaries to comply, in all
material respects with all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA and
the rules and regulations thereunder).
Section 5.06. Inspection of Property, Books and Records.
The Borrower will keep, and will cause each of its Subsidiaries to
keep, proper books of record and account in which full, true and
correct entries in conformity with generally accepted accounting
principles shall be made of all dealings and transactions in
relation to its business and activities. The Borrower, upon
reasonable request by any Bank, will permit, and will cause each of
its Subsidiaries to permit, representatives of any Bank to visit
<PAGE>
<PAGE>
and inspect any of their respective properties, to examine and make
abstracts and copies from any of their respective books and records
and to discuss their respective affairs, finances and accounts with
their respective officers and employees and, in the presence of the
Borrower, its independent public accountants, all at such
reasonable times and as often as may reasonably be desired.
Section 5.07. Development and Operation of Oil, Gas and
Mineral Properties. The Borrower will use all reasonable efforts
to cause all Petroleum Properties to be operated in a manner
consistent with sound oil field practice. The Borrower will cause
each Petroleum Property to be developed in such manner, and will
devote such funds to such purpose, as would a reasonably prudent
Person similarly situated.
Section 5.08. Maintenance of Existence, Rights, Etc.
The Borrower will preserve, renew and keep in full force and
effect, and will cause each of its Subsidiaries which owns any
Petroleum Property to preserve, renew and keep in full force and
effect, their respective corporate existences and their respective
rights, privileges, licenses and franchises materially necessary or
desirable in the normal conduct of business; provided that nothing
in this Section 5.08 shall prohibit (i) a merger or consolidation
permitted by Section 5.10 or (ii) the termination of the corporate
existence of any Subsidiary of the Borrower if the Borrower in good
faith determines that such termination is in the best interest of
the Borrower and is not materially disadvantageous to the Banks.
Section 5.09. Negative Pledge. The Borrower will not, and will
not permit any of its Subsidiaries to, create, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired except:
(a) Liens existing on the date of this Agreement
securing Debt outstanding on the date of this Agreement in an
aggregate principal or face amount not exceeding $10,000,000;
(b) any Lien existing on any asset prior to the
acquisition thereof by the Borrower or such Subsidiary and not
created in contemplation of such acquisition;
(c) any Lien existing on any asset of any Person at the
time such Person becomes a Subsidiary of the Borrower and not
created in contemplation of such event;
(d) any Lien on any asset securing Debt incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring, improving or constructing such asset, provided that such
Lien attaches to such asset concurrently with or within 90 days
after the acquisition or completion of construction thereof or
improvement thereto;
<PAGE>
<PAGE>
(e) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by
any of the foregoing clauses of this Section, provided that the
principal amount of such Debt is not increased (except by the
amount of costs reasonably incurred in connection with the issuance
thereof) and such Debt is not secured by any additional assets;
(f) Liens which (i) do not secure Debt or Derivatives
Obligations, (ii) do not secure any obligation in respect of which
the lesser of (A) the amount of such obligation and (B) the value
(determined as of the last day of the fiscal year most recently
ended) of the collateral securing such obligation exceeds
$50,000,000 and
(iii) do not in the aggregate materially detract from the
value of the assets of the Borrower and its Subsidiaries,
taken as a whole, or materially impair the use thereof in the
operation of its business;
(g) Liens on cash and cash equivalents securing
Derivatives Obligations, provided that the aggregate amount of cash
and cash equivalents subject to such Liens may at no time exceed
$75,000,000;
(h) Liens on capital stock or indebtedness of CLAM owned
by the Borrower or any of its Subsidiaries, which Liens secure Debt
of CLAM; and
(i) Liens not permitted by the foregoing subsections (a)
through (h) securing Debt in an aggregate principal amount at
any time outstanding not exceeding $10,000,000.
Section 5.10. Consolidations, Mergers and Sales of
Assets. The Borrower will not, and will not permit any of its
Subsidiaries to, consolidate or merge with or into, or sell, lease
or otherwise dispose of all or substantially all of its assets to,
any other Person, except that (i) the Borrower may merge with any
Person if the Borrower is the surviving corporation and if,
immediately after such merger (and giving effect thereto) but
subject to clause (iii) below, no Default shall have occurred and
be continuing, (ii) any Subsidiary of the Borrower may merge or
consolidate with or into, or transfer all or substantially all of
its assets to, any Person if either (A) the surviving corporation
or transferee is the Borrower or a Wholly-Owned Subsidiary of the
Borrower or (B) such merger, consolidation or transfer of all or
substantially all assets is in conjunction with a disposition by
the Borrower of its entire Investment in such Subsidiary otherwise
permitted hereunder and, if, in either such case, immediately after
such transaction (and giving effect thereto) no Default shall have
occurred and be continuing and (iii) any Wholly-Owned Subsidiary of
the Borrower may consolidate or merge with or into, or sell, lease
or otherwise dispose of all or substantially all of its assets to
(A) any other Wholly-Owned Subsidiary of the Borrower or (B) the
Borrower.
<PAGE>
<PAGE>
Section 5.11. Cash Flow Coverage. As of the last day of
each fiscal quarter of the Borrower, the Consolidated Cash Flow
Ratio will not be less than .25:1.
Section 5.12. Minimum Consolidated Tangible Net Worth.
Consolidated Tangible Net Worth will at no time be less than the
sum of (i) $350,000,000 plus (ii) an amount equal to 75% of the
cumulative additions to Consolidated Tangible Net Worth resulting
from issuances of Equity Securities made by the Borrower from and
after the date hereof minus (iii) the sum of (x) the cumulative
amount by which Consolidated Tangible Net Worth shall have been
reduced by reason of non-cash write-downs of long-term assets
subsequent to December 31, 1996 and (y) the lesser of (A)
$50,000,000 and (B) the cumulative amount by which Consolidated
Tangible Net Worth shall have been reduced by reason of share
repurchases made by the Borrower subsequent to March 31, 1997 and
prior to the third anniversary of the Effective Date.
Section 5.13. Subsidiary Debt. The aggregate
outstanding principal amount of Debt of all Significant
Subsidiaries of the Borrower (exclusive, in each case, of Debt
owing to the Borrower or a Wholly-Owned Subsidiary) shall not
exceed on any date the greater of (i) $100,000,000 and (ii) 20% of
Consolidated Tangible Net Worth as of such date.
Section 5.14. Transactions with Affiliates. The
Borrower will not, and will not permit any of its Subsidiaries to,
directly or indirectly, pay any funds to or for the account of,
make any Investment in, lease, sell, transfer or otherwise dispose
of any assets, tangible or intangible, to, or participate in, or
effect any transaction in connection with any joint enterprise or
other joint arrangement with, any Affiliate; provided, however,
that the foregoing provisions of this Section shall not prohibit
(a) the Borrower or any of its Subsidiaries from declaring or
paying any lawful dividend or other Stockholder Payment so long as,
after giving effect thereto, no Default shall have occurred and be
continuing (as determined at the time the Borrower or such
Subsidiary declares such dividend or otherwise becomes legally
committed to make such Stockholder Payment), (b) the Borrower or
any of its Subsidiaries from making sales to or purchases from any
Affiliate and, in connection therewith, extending credit or making
payments, or from making payments for services rendered by any
Affiliate, if such sales or purchases are made or such services are
rendered in the ordinary course of business and on terms and
conditions at least as favorable to the Borrower or such Subsidiary
as the terms and conditions which would apply in a similar
transaction with a Person not an Affiliate, (c) the Borrower or any
of its Subsidiaries from making payments of principal, interest and
premium on any Debt of the Borrower or such Subsidiary held by an
Affiliate if the terms of such Debt are substantially as favorable
<PAGE>
<PAGE>
to the Borrower or such Subsidiary as the terms which could have
been obtained at the time of the creation of such Debt from a
lender which was not an Affiliate or (d) the Borrower or any of its
Subsidiaries from participating in, or effecting any transaction in
connection with, any joint enterprise or other joint arrangement
with any Affiliate if the Borrower or such Subsidiary participates
in the ordinary course of its business and on a basis no less
advantageous than the basis on which such Affiliate participates.
Section 5.15. Limitation on Restrictions Affecting
Subsidiaries. Neither the Borrower nor any of its Significant
Subsidiaries will enter into, or suffer to exist, any agreement
with any Person, other than this Agreement, which prohibits or
limits in any material respect the ability of any Significant
Subsidiary to (a) pay dividends or make other distributions or pay
any Debt owed to the Borrower or any Subsidiary of the Borrower,
(b) make loans or advances to the Borrower or any Subsidiary of the
Borrower, (c) transfer properties or assets to the Borrower or any
Subsidiary of the Borrower or (d) create, incur, assume or suffer
to exist any Lien upon its property, assets or revenues, whether
now owned or hereafter acquired, except (i) customary provisions
incident to Liens which the Subsidiaries are permitted to incur
pursuant to this Agreement, (ii) customary restrictions on
assignability in leases and other contracts entered into in the
ordinary course of business, (iii) the restrictions disclosed on
Schedule II hereto and (iv) restrictions no more restrictive than
those so disclosed in agreements relating to Debt that is incurred
to refinance the Debt to which the restrictions so disclosed
relate; provided that the principal amount of such Debt is not
increased (except by the amount of costs reasonably incurred in
connection with the issuance thereof).
ARTICLE 6
DEFAULTS
Section 6.01. Defaults. If one or more of the following
events (each, an "Event of Default") shall have occurred and be
continuing:
(a) any principal of or any interest on any Loan or any
fees or any other amount payable hereunder shall not be paid within
two Domestic Business Days of the date when due; or
(b) the Borrower shall fail to observe or perform any
covenant contained in Sections 5.08 through 5.15, inclusive; or
(c) the Borrower shall fail to observe or perform any of
its covenants or agreements contained in the Financing Documents
(other than those covered by subsections (a) or (b) above) and such
failure shall continue for ten Domestic Business Days after the
Borrower knew or in the exercise of reasonable diligence should
have known of such failure; or
<PAGE>
<PAGE>
(d) any representation, warranty, certification or
statement made by the Borrower in any Financing Document or in any
certificate, financial statement or other document delivered
pursuant thereto shall prove to have been incorrect in any material
respect when made (or deemed made); or
(e) (i) the Borrower or any of its Subsidiaries shall
fail to make any payment in respect of Material Debt when due or
within any applicable grace period or (ii) the Borrower or any of
its Subsidiaries shall fail to make a payment in excess of
$10,000,000 in respect of Derivatives Obligations of the Borrower
and/or one or more of its Subsidiaries, arising in one or more
related or unrelated transactions, when due or within any
applicable grace period;
(f) any event or condition shall occur that results in
the acceleration of the maturity of Material Debt or enables the
holder or holders of Material Debt or any Person acting on behalf
of such holder or holders to accelerate the maturity thereof; or
(g) the Borrower or any Significant Subsidiary shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the
foregoing; or
(h) an involuntary case or other proceeding shall be
commenced against the Borrower or any Significant Subsidiary
seeking liquidation, reorganization or other relief with respect to
it or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official
of it or any substantial part of its property, and such involuntary
case or other proceeding shall remain undismissed and unstayed for
a period of 60 days; or an order for relief shall be entered
against the Borrower or any Significant Subsidiary under the
Federal bankruptcy laws as now or hereafter in effect; or
(i) any member of the ERISA Group shall fail to pay when
due an amount or amounts aggregating in excess of $20,000,000
which it shall have become liable to pay under Title IV of
ERISA; or notice of intent to terminate a Material Plan shall
<PAGE>
<PAGE>
be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title
IV of ERISA to terminate, to impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or to
cause a trustee to be appointed to administer any Material
Plan; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one
or more Multiemployer Plans which could reasonably be expected
to cause one or more members of the ERISA Group to incur a
current payment obligation in excess of $20,000,000; or
(j) a judgment or order for the payment of money in
excess of $10,000,000 shall be rendered against the Borrower or any
Significant Subsidiary and such judgment or order shall continue
unsatisfied and unstayed for a period of 30 days; or
(k) any person or group of persons (within the meaning
of Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under said Act) of 30% or more of the outstanding shares
of common stock of the Borrower; or, during any period of 12
consecutive calendar months, individuals who were directors of the
Borrower on the first day of such period, together with directors
whose election or appointment as directors was effected or
recommended by a majority of such directors, shall cease to
constitute a majority of the board of directors of the Borrower;
then, and in every such event, the Agent shall (i) if requested by
the Required Banks, by notice to the Borrower terminate the
Commitments and they shall thereupon terminate, and (ii) if
requested by the Required Banks, by notice to the Borrower declare
the Notes (together with accrued interest thereon) to be, and the
Notes shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; provided that in the case
of an Event of Acceleration, without any notice to the Borrower or
any other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued interest
thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower.
Section 6.02. Notice of Default. The Agent shall give
notice to the Borrower of a Default promptly upon being requested
to do so by any Bank and shall thereupon notify all the Banks
thereof.
<PAGE>
<PAGE>
ARTICLE 7
THE AGENT
Section 7.01. Appointment and Authorization. Each Bank
irrevocably appoints the Agent to act as its agent in connection
herewith and authorizes the Agent to take such action as agent on
such Bank's behalf and to exercise such powers under the Financing
Documents as are delegated to the Agent by the terms thereof,
together with all such powers as are reasonably incidental thereto.
Section 7.02. Agent and Affiliates. Morgan shall have
the same rights and powers under this Agreement as any other Bank
and may exercise or refrain from exercising the same as though it
were not the Agent, and Morgan and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if it were not the Agent.
Section 7.03. Action by Agent. The obligations of the
Agent under the Financing Documents are only those expressly set
forth therein with respect to it. Without limiting the generality
of the foregoing, the Agent shall not be required to take any
action with respect to any Default, except as expressly provided in
Article 6.
Section 7.04. Consultation with Experts. The Agent may
consult with legal counsel (who may be 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 by
it in good faith in accordance with the advice of such counsel,
accountants or experts.
Section 7.05. Liability of Agent. Neither the Agent nor
any of its affiliates nor any of their respective directors,
officers, agents or employees shall be liable to any Bank for any
action taken or not taken by it in connection with the Financing
Documents (i) with the consent or at the request of the Required
Banks or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Agent nor any of its affiliates nor any of
their respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or
verify (i) any statement, warranty or representation made in
connection with any Financing Document or any borrowing hereunder;
(ii) the performance or observance of any of the covenants or
agreements of the Borrower under any Financing Document; (iii) the
satisfaction of any condition specified in Article 3 or 10, except
receipt of items required to be delivered to the Agent; or (iv) the
validity, effectiveness or genuineness of any Financing Document or
any other instrument or writing furnished in connection therewith.
The Agent shall incur no liability by acting in reliance upon any
notice, consent, certificate, statement, or other writing (which
may be a bank wire, telex, facsimile copy or similar writing)
believed by it to be genuine or to be signed by the proper party or
parties.<PAGE>
<PAGE>
Section 7.06. Indemnification. The Banks shall, ratably
in accordance with their respective Commitments, indemnify the
Agent, its affiliates and their respective directors, officers,
agents and employees (to the extent not reimbursed by the Borrower)
against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except
such as result from such indemnitees' gross negligence or willful
misconduct) that such indemnitees may suffer or incur in connection
with the Financing Documents or any action taken or omitted by such
indemnitees thereunder.
Section 7.07. Credit Decision. Each Bank acknowledges
that it has, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Bank also acknowledges that it
will, independently and without reliance upon the Agent or any
other Bank, 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 any action under the Financing
Documents.
Section 7.08. Agents' Fees. The Borrower shall pay
arrangement and agency fees to the Agent and each Co-Agent in the
amounts and on the dates agreed to prior to the date hereof by the
Borrower and the Agent or such Co-Agent, as the case may be.
Section 7.09. Successor Agent. The Agent may resign at
any time by giving notice thereof to the Banks and the Borrower.
Upon any such resignation, the Required Banks shall have the right,
with the consent of the Borrower (which shall not be unreasonably
withheld), to appoint a successor Agent. If no successor Agent
shall have been so appointed by the Required Banks, and shall have
accepted such appointment, within 30 days after the retiring
Agent's giving of notice of resignation, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent, which shall
be a Bank or a commercial bank organized or licensed under the laws
of the United States of America or of any State thereof and having
a combined capital and surplus of at least $200,000,000. Upon the
acceptance of its appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it
while it was Agent.
Section 7.10. Co-Agents Not Liable. Nothing in the
Financing Documents shall impose upon either Co-Agent, in such
capacity, any duties or responsibilities whatsoever.
<PAGE>
<PAGE>
ARTICLE 8
CHANGES IN CIRCUMSTANCES
Section 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If prior to the first day of any Interest
Period for any Euro-Dollar Borrowing or Money Market LIBOR
Borrowing:
(a) the Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not being
offered to the Reference Banks in the London interbank market for
such Interest Period, or
(b) in the case of a Euro-Dollar Borrowing, Banks having
50% or more of the aggregate amount of the Commitments advise the
Agent that the London Interbank Offered Rate as determined by the
Agent will not adequately and fairly reflect the cost to such Banks
of funding their Euro-Dollar Loans for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, the
obligations of the Banks to make Euro-Dollar Loans or to convert
outstanding Domestic Loans into Euro-Dollar Loans shall be
suspended and each outstanding Euro-Dollar Loan shall be converted
into a Domestic Loan on the last day of the then current Interest
Period applicable thereto. Unless the Borrower notifies the Agent
at least two Domestic Business Days before the date of any Fixed
Rate Borrowing for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, (i) if such Fixed
Rate Borrowing is a Euro-Dollar Borrowing, such Borrowing shall
instead be made as a Domestic Borrowing and (ii) if such Fixed Rate
Borrowing is a Money Market LIBOR Borrowing, the Money Market LIBOR
Loans comprising such Borrowing shall bear interest for each day
from and including the first day to but excluding the last day of
the Interest Period applicable thereto at the Base Rate for such
day.
Section 8.02. Illegality. If, on or after the date of
this Agreement, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof,
or compliance by any Bank (or its Euro-Dollar Lending Office) with
any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make
it unlawful or impossible for any Bank (or its Euro-Dollar Lending
Office) to make, maintain or fund its Euro-Dollar Loans and such
<PAGE>
<PAGE>
Bank shall so notify the Agent, the Agent shall forthwith give
notice thereof to the other Banks and the Borrower, whereupon until
such Bank notifies the Borrower and the Agent that the
circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans or to convert
outstanding Domestic Loans into Euro-Dollar Loans shall be
suspended. Before giving any notice to the Agent pursuant to this
Section, such Bank shall designate a different Euro-Dollar Lending
Office if such designation will avoid the need for giving such
notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such notice is given, each
Euro-Dollar Loan of such Bank then outstanding shall be converted
to a Domestic Loan either (a) on the last day of the then current
Interest Period applicable to such Euro-Dollar Loan if such Bank
may lawfully continue to maintain and fund such Loan as a
Euro-Dollar Loan to such day or (b) immediately if such Bank shall
determine that it may not lawfully continue to maintain and fund
such Loan as a Euro-Dollar Loan to such day. Section 8.03.
Increased Cost and Reduced Return. (a) If on or after (x) the date
hereof, in the case of any Euro-Dollar Loan or any obligation to
make Euro-Dollar Loans or (y) the date of the related Money Market
Quote, in the case of any Money Market Loan, the adoption of any
applicable law, rule or regulation, or any change in any applicable
law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank
or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether
or not having the force of law) of any such authority, central bank
or comparable agency shall impose, modify or deem applicable any
reserve, special deposit, insurance assessment or similar
requirement (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System but
excluding with respect to any Euro-Dollar Loan any such requirement
with respect to which such Bank is entitled to compensation during
the relevant Interest Period under Section 2.15) against assets of,
deposits with or for the account of, or credit extended by, any
Bank (or its Applicable Lending Office) or shall impose on any Bank
(or its Applicable Lending Office) or the London interbank market
any other condition affecting its Fixed Rate Loans, its Note or its
obligation to make Fixed Rate Loans, and the result of any of the
foregoing is to increase the cost to such Bank (or its Applicable
Lending Office) of making or maintaining its Fixed Rate Loans, or
to reduce the amount of any sum received or receivable by such Bank
(or its Applicable Lending Office) under this Agreement or under
its Note with respect thereto, by an amount deemed by such Bank to
be material, then, within 15 days after demand by such Bank (with
a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such
increased cost or reduction; provided that no Bank shall be
entitled to compensation under this Section 8.03 for any such
increased cost or reduction that is the result of the withholding
or payment of any Taxes or Other Taxes.
<PAGE>
<PAGE>
(b) If any Bank shall have determined that, on or after
the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any such
law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank
or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on capital of such
Bank (or its Parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or
directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Bank to be material,
then from time to time, within 15 days after demand by such Bank
(with a copy to the Agent), the Borrower shall pay to such Bank
such additional amount or amounts as will compensate such Bank (or
its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the
Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Bank to compensation pursuant
to this Section and will designate a different Applicable Lending
Office if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. A certificate of
any Bank claiming compensation under this Section and setting forth
the additional amount or amounts to be paid to it hereunder shall
be conclusive in the absence of manifest error. In determining
such amount, such Bank may use any reasonable averaging and
attribution methods.
Section 8.04. Domestic Loans Substituted for Affected
Euro-Dollar Loans. If (i) the obligation of any Bank to make or
maintain Euro-Dollar Loans has been suspended pursuant to Section
8.02 or (ii) any Bank has demanded compensation under Section 2.14
or 8.03(a) with respect to its Euro-Dollar Loans and the Borrower
shall, by at least five Euro-Dollar Business Days' prior notice to
such Bank through the Agent, have elected that the provisions of
this Section shall apply to such Bank, then, unless and until such
Bank notifies the Borrower that the circumstances giving rise to
such suspension or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank
as (or continued as or converted into) Euro-Dollar Loans shall
instead be Domestic Loans (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of the
other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid,
all payments of principal which would otherwise be applied to repay
such Euro-Dollar Loans shall be applied to repay its Domestic Loans
instead.
<PAGE>
<PAGE>
If such Bank notifies the Borrower that the circumstances giving
rise to such notice no longer apply, the principal amount of each
such Domestic Loan shall be converted into a Euro-Dollar Loan on
the first day of the next succeeding Interest Period applicable to
the related Euro-Dollar Loans of the other Banks.
Section 8.05. Substitution of Bank. If any Bank (i) has
demanded or is entitled to receive compensation for increased costs
pursuant to Section 2.14 or 8.03 or (ii) has determined that the
making or continuation of any Euro-Dollar Rate Loan has become
unlawful or impossible pursuant to Section 8.02 and similar
compensation has not been demanded by, or a similar determination
has not been made by, all of the Banks, the Borrower shall have the
right to designate an Assignee which is not an Affiliate of the
Borrower to purchase for cash the outstanding Loans and Commitment
of such Bank and to assume all of such Bank's other rights and
obligations hereunder without recourse to or warranty by, or
expense to, such Bank, for a purchase price equal to the principal
amount of all of such Bank's outstanding Loans plus any accrued but
unpaid interest thereon and the accrued but unpaid facility fees in
respect of that Bank's Commitment hereunder plus such amount, if
any, as would be payable pursuant to Section 2.12 if the
outstanding Loans of such Bank were prepaid in their entirety on
the date of consummation of such assignment and such Bank shall
effect the sale of such Loans and Commitment to the designated
Assignee on such terms.
ARTICLE 9
MISCELLANEOUS
Section 9.01. Notices. Unless otherwise specified
herein, all notices, requests and other communications to any party
hereunder shall be in writing (including bank wire, telex,
facsimile copy or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Agent, at its
address, facsimile number or telex number set forth on the
signature pages hereof, (y) in the case of any Co-Agent or Bank, at
its address, facsimile number or telex number set forth in its
Administrative Questionnaire or (z) in the case of any party, such
other address or telex or facsimile number as such party may
hereafter specify for the purpose by notice to the Agent and the
Borrower. Each such notice, request or other communication shall
be effective when received or when delivery thereof is refused.
Section 9.02. No Waiver. No failure or delay by the
Agent or any Bank in exercising any right, power or privilege under
any Financing Document shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies provided in the Financing
Documents shall be cumulative and not exclusive of any rights or
remedies provided by law.
<PAGE>
<PAGE>
Section 9.03. Expenses; Indemnification. (a) The
Borrower shall pay on demand (i) all reasonable out-of-pocket
expenses of the Agent and the Co-Agents (including, without
limitation, fees and disbursements of Davis Polk & Wardwell,
special counsel for the Agent and the Co-Agents) in connection with
the preparation and administration of the Financing Documents, any
waiver, consent or amendment of any provision thereof, or any
Default or alleged Default thereunder, and (ii) if any Event of
Default occurs, all reasonable out-of-pocket expenses incurred by
the Agent or any Bank, including fees and disbursements of counsel,
in connection with such Event of Default and collection and other
enforcement proceedings resulting therefrom.
(b) The Borrower shall indemnify the Agent and each
Bank, their respective affiliates and the respective directors,
officers, agents and employees of the foregoing (each an
"Indemnitee") and hold each Indemnitee harmless from and against
any and all liabilities, losses, damages, costs and expenses of any
kind (including, without limitation, the reasonable fees and
disbursements of counsel for any Indemnitee in connection with any
investigative, administrative or judicial proceeding, whether or
not such Indemnitee shall be designated a party thereto) which may
be incurred by any Indemnitee relating to or arising out of the
Financing Documents or any actual or proposed use of the proceeds
of the Loans hereunder; provided that no Indemnitee shall have the
right to be indemnified hereunder for its own gross negligence or
willful misconduct as determined by a court of competent
jurisdiction; provided further that no Indemnitee shall have the
right to be indemnified hereunder in connection with any
proceedings between it and another Indemnitee which does not relate
to the Borrower. The Borrower shall not be liable to any
Indemnitee for the cost of any settlement entered into without the
consent of the Borrower, such consent not to be unreasonably
withheld.
Section 9.04. Sharing of Set-offs. Each Bank agrees
that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest due with respect to its
Loans which is greater than the proportion received by any other
Bank in respect of the aggregate amount of principal and interest
due with respect to the Loans of such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Loans of the other Banks, and such other
adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Loans of the
Banks shall be shared by the Banks pro rata; provided that nothing
in this Section shall impair the right of any Bank to exercise any
right of set-off or counterclaim it may have and to apply the
amount subject to such exercise to the payment of indebtedness of
<PAGE>
<PAGE>
the Borrower other than indebtedness under the Financing Documents.
The Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any holder of a participation in a Loan,
whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of set-off or counterclaim and other rights with
respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount
of such participation.
Section 9.05. Amendments and Waivers. (a) Any provision
of this Agreement or the Notes may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by
the Borrower and the Required Banks (and, if the rights or duties
of the Agent or either Co-Agent are affected thereby, by it);
provided that no such amendment or waiver shall, unless signed by
all the Banks, (i) increase or decrease the Commitment of any Bank
(except (x) for a ratable decrease in the Commitments of all Banks
or (y) as contemplated by subsection 9.05(b) below) or subject any
Bank to any additional obligation, (ii) reduce the principal of or
rate of interest on any Loan or any fees hereunder, (iii) postpone
the date fixed for any payment of principal of or interest on any
Loan or any fees hereunder or for termination of any Commitment or
(iv) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any action
under this Section or any other provision of this Agreement.
(b) Subsequent to the Effective Date, the Borrower may,
from time to time, upon notice to the Agent, propose to increase
the aggregate amount of the Commitments by an amount specified by
it in such notice (the amount of any such increase, the "Increased
Commitments"). The Agent shall promptly notify the Banks of any
such proposal received by it. Each Bank party to this Agreement at
such time shall have the right (but no obligation) for a period of
15 days following receipt of such notice, to elect by notice to the
Borrower and the Agent to increase its Commitment by a principal
amount which bears the same ratio to the Increased Commitments as
its then Commitment bears to the aggregate Commitments then
existing. If any Bank party to this Agreement does not respond to
a proposal to increase its Commitment within such period, such Bank
shall be deemed to have elected not to increase its Commitment. If
any Bank party to this Agreement shall not elect so to increase its
Commitment, the Borrower may designate another bank or other banks
(which may be one or more of the Banks) (if not previously a Bank,
each an "Additional Bank") which at the time agrees to do so to be
party to this Agreement, the Commitments of which shall not in the
aggregate exceed the unsubscribed amount of the Increased
Commitments. An increase in the aggregate amount of the
Commitments pursuant to this subsection (b) shall become effective
upon the receipt by the Agent of an agreement in form and substance
<PAGE>
<PAGE>
satisfactory to the Agent signed by the Borrower, by each
Additional Bank, by each other Bank whose Commitment is to be
increased and by the Required Banks, setting forth the new
Commitments of such Banks and setting forth the agreement of each
Additional Bank to become a party to this Agreement and to be bound
by all the terms and provisions hereof, together with such evidence
of appropriate corporate authorization on the part of the Borrower
with respect to the Increased Commitments and such opinions of
counsel for the Borrower with respect to the Increased Commitments
as the Agent may reasonably request.
Section 9.06. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns,
except that the Borrower may not assign or otherwise transfer any
of its rights under this Agreement without the prior written
consent of all Banks.
(b) Any Bank may at any time grant to one or more banks
or other institutions (each a "Participant") participating
interests in its Commitment or any or all of its Loans. In the
event of any such grant by a Bank of a participating interest to a
Participant, whether or not upon notice to the Borrower and the
Agent, such Bank shall remain responsible for the performance of
its obligations hereunder, and the Borrower and the Agent shall
continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating
interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrower
hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this
Agreement; provided that such participation agreement may provide
that such Bank will not agree to any modification, amendment or
waiver of this Agreement described in clause (i), (ii), (iii) or
(iv) of Section 9.05(a) without the consent of the Participant.
The Borrower agrees that each Participant shall, to the extent
provided in its participation agreement and subject to subsection
(e) below, be entitled to the benefits of Article 8 with respect to
its participating interest. An assignment or other transfer which
is not permitted by subsection (c) or (d) below shall be given
effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this subsection
(b).
(c) Any Bank may at any time assign to one or more banks
or other institutions (each an "Assignee") all, or a ratable
portion of all, of its rights and obligations under this Agreement
and the Notes, and such Assignee shall assume such rights and
obligations, pursuant to an Assignment and Assumption Agreement
<PAGE>
<PAGE>
substantially in the form of Exhibit G hereto executed by such
Assignee and such transferor Bank, with (and subject to) the
subscribed consent of the Borrower and the Agent, which shall not
be unreasonably withheld in the case of an assignment to an
Assignee in an amount equivalent to an initial Commitment of not
less than $10,000,000; provided that if an Assignee is an affiliate
of such transferor Bank no such consent shall be required; and
provided further that such assignment may, but need not, include
rights of the transferor Bank in respect of outstanding Money
Market Loans. Upon such execution, delivery, acceptance and
recordation, from and after the effective date determined pursuant
to such Assignment and Assumption, such Assignee shall be a Bank
party to this Agreement and shall have all the rights and
obligations of a Bank with a Commitment as set forth in such
Assignment and Assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent,
and no further consent or action by any party shall be required.
Upon the consummation of any assignment pursuant to this subsection
(c), the transferor Bank, the Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued
to the Assignee. If the Assignee is not incorporated under the
laws of the United States of America or a state thereof, it shall
deliver to the Borrower and the Agent certification as to exemption
from deduction or withholding of any United States federal income
taxes in accordance with Section 2.14.
(d) Any Bank may at any time assign all or any portion
of its rights under this Agreement and its Note to a Federal
Reserve Bank. No such assignment shall release the transferor Bank
from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any
Bank's rights (which for purposes of this Section 9.06(e) shall
include any new Applicable Lending Office designated by such Bank
after the date hereof) shall be entitled to receive any greater
payment under Section 8.03 or 2.14 than such Bank would have been
entitled to receive with respect to the rights transferred, unless
such transfer is made with the Borrower's prior written consent or
by reason of the provisions of Section 8.02 or 8.03 requiring such
Bank to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances giving
rise to such greater payment did not exist.
(f) The Agent (acting as agent of the Borrower for this
purpose only) shall maintain at its address referred to in Section
9.01 a copy of each Assignment and Assumption delivered to it and
a register (the "Register") for the recordation of the names and
addresses of the Banks and the Commitment of, and principal amount
of the Loans owing to, each Bank from time to time. The Register
shall be available for inspection and copying by the Borrower or
<PAGE>
<PAGE>
any Bank at any reasonable time and from time to time upon
reasonable prior notice. Upon its receipt of an Assignment and
Assumption executed by a transferor Bank and an Assignee (and, in
the case of an Assignee that is not then a Bank or an affiliate of
a Bank, by the Borrower and the Agent) together with payment by
such transferor Bank to the Agent of a registration and processing
fee of $3,000, the Agent shall (i) promptly accept such Assignment
and Assumption and (ii) on the effective date determined pursuant
thereto record the information contained therein in the Register
and give notice of such acceptance and recordation to the
transferor Bank, its Assignee and the Borrower.
Section 9.07. Collateral. Each of the Banks represents
to the Agent and each of the other Banks that it in good faith is
not relying upon any "margin stock" (as defined in Regulation U) as
collateral in the extension or maintenance of the credit provided
for in this Agreement.
Section 9.08. Governing Law; Submission to Jurisdiction.
This Agreement and each Note shall be governed by and construed in
accordance with the laws of the State of New York. The Borrower
hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of
any New York State court sitting in New York City for purposes of
all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an
inconvenient forum.
Section 9.09. Counterparts; Integration. This Agreement
may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement constitutes
the entire agreement and understanding among the parties hereto and
supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof. Should any part of
this Agreement for any reason be declared invalid, such decision
shall not affect the validity of any remaining portion, which
remaining portion shall remain in force and effect as if this
Agreement had been executed with the invalid portion thereof
eliminated and it is hereby declared the intention of the parties
hereto that they would have executed the remaining portion of this
Agreement without including therein any such part, parts, or
portion which may, for any reason, be hereafter declared invalid.
<PAGE>
<PAGE>
Section 9.10. Waiver of Jury Trial. EACH OF THE
BORROWER, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED
TO ENTER INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.10.
Section 9.11. Confidentiality. Each Bank agrees to keep
any information delivered or made available by the Borrower to it
confidential from anyone other than persons employed or retained by
such Bank who are expected to become engaged in evaluating,
approving, structuring or administering the Loans; provided that
nothing herein shall prevent any Bank from disclosing such
information (a) to any other Bank or to the Agent, (b) to any other
person if reasonably incidental to the administration of the Loans
or required by applicable law or regulation, (c) upon the subpoena
or order of any court or administrative agency, (d) upon the
request or demand of any regulatory agency or authority, (e) which
had been publicly disclosed other than as a result of a disclosure
by the Agent or any Bank prohibited by this Agreement, (f) in
connection with any litigation to which the Agent, any Bank or its
subsidiaries or Parent may be a party, (g) to the extent necessary
in connection with the exercise of any remedy hereunder, (h) to
such Bank's or Agent's legal counsel and independent auditors and
(i) subject to a confidentiality agreement containing provisions
substantially similar to those contained in this Section made for
the benefit of the Borrower by any actual or proposed Participant
or Assignee, to such actual or proposed Participant or Assignee.
ARTICLE 10
EFFECTIVENESS
Section 10.01. Conditions to Effectiveness. This
Agreement will become effective upon the satisfaction of the
following conditions:
(a) receipt by the Agent of duly executed counterparts
of this Agreement signed by all of the parties hereto (or, in the
case of any party as to which the executed counterpart shall not
have been received, receipt by the Agent in form satisfactory to it
of telegraphic, telex, facsimile transmission or other written
confirmation from such party of execution of a counterpart of this
Agreement by such party);
<PAGE>
<PAGE>
(b) arrangements satisfactory to the Agent shall have
been made to repay the Loans made by the Banks under the Existing
Agreement which are not continued under this Agreement pursuant to
Section 10.02(b);
(c) receipt by the Agent for the account of each Bank of
a duly executed Note, each dated the Effective Date, complying with
the provisions of Section 2.05;
(d) receipt by the Agent of an opinion of (i) Cahill
Gordon & Reindel, special counsel for the Borrower, substantially
to the effect set forth in Exhibit B-1 hereto, and (ii) the General
Counsel of the Borrower, substantially to the effect set forth in
Exhibit B-2 hereto;
(e) receipt by the Agent of an opinion of Davis Polk &
Wardwell, special counsel for the Agent and the Co-Agents,
substantially to the effect set forth in Exhibit C hereto;
(f) receipt by the Agent of a certificate signed by a
Financial Officer of the Borrower to the effect set forth in
Sections 3.01(c) and 3.01(d); and
(g) receipt by the Agent of all documents it may
reasonably request relating to the existence of the Borrower, the
corporate authority for and validity of the Financing Documents and
any other matters relevant hereto, all in form and substance
satisfactory to the Agent. The documents and opinions referred to
in this Section 10.01 shall be delivered to the Agent no later than
the Effective Date. The certificate and opinions referred to in
subsections (d), (e) and (f) above shall be dated the Effective
Date.
Section 10.02. Consequences of Effectiveness;
Transitional Provisions. (a) On the Effective Date, the
commitments under the Existing Agreement shall terminate without
further action by any party thereto. The Agent will promptly
notify each of the other parties hereto and to the Existing
Agreement of the effectiveness of this Agreement.
(b) Concurrently with the effectiveness of this
Agreement, the Borrower shall prepay in full (including accrued and
unpaid interest thereon to, but excluding, the Effective Date) (i)
all "Money Market Loans" outstanding under the Existing Agreement
made by "Banks" under the Existing Agreement which are not Banks
hereunder and (ii) all Committed Loans outstanding under the
Existing Agreement. Any "Money Market Loans" outstanding under the
Existing Agreement on the Effective Date made by Banks parties to
this Agreement shall remain outstanding as Money Market Loans
hereunder on the terms previously established with respect thereto
under the Existing Agreement. Concurrently with the effectiveness
of this Agreement, the Borrower shall pay all accrued and unpaid
commitment and facility fees under the Existing Agreement to, but
excluding, the Effective Date.<PAGE>
<PAGE>
(c) The Banks which are parties to the Existing
Agreement, comprising the "Required Banks" as defined therein,
hereby waive any requirement of notice of termination of the
Commitments pursuant to Section 2.09(a) and any restriction on
prepayment of Money Market Loans to the extent necessary to give
effect to the subsections (a) and (b) above, provided that any such
prepayment of Money Market Loans shall be subject to Section 2.12
of the Existing Agreement.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
THE LOUISIANA LAND AND
EXPLORATION COMPANY
By /s/ Suzanne V. Baer
Title: Vice President & Treasurer
909 Poydras Street
New Orleans, LA 70112
Attention: Suzanne V. Baer
Facsimile number: 504-566-6584
Commitments
$32,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ John Kowalczuk
Title: Vice President
<PAGE>
<PAGE>
$29,000,000 TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By /s/ Sandra Aultman
Title: Vice President
$29,000,000 NATIONSBANK OF TEXAS, N.A.
By /s/ John H. Roberts
Title: Vice Pesident
$25,000,000 UNION BANK OF SWITZERLAND
HOUSTON AGENCY
By /s/ Dan O. Boyle
Title: Managing Director
By /s/ J. Finley Biggerstaff
Title: Assistant Vice President
$25,000,000 WACHOVIA BANK N.A.
By /s/ Carl E. Peoples
Title: Vice President
$17,500,000 BANK OF MONTREAL
By /s/ Bryan R. Gallow
Title: Managing Director
$17,500,000 THE BANK OF NEW YORK
By /s/ Ian K. Stewart
Title: Senior Vice President
<PAGE>
<PAGE>
$17,500,000 THE BANK OF NOVA SCOTIA
By /s/ F.C.H. Ashby
Title: Senior Manager Loan
Operations
$17,500,000 BANQUE PARIBAS
By /s/ Barton D. Schouest
Title: Group Vice President
By /s/ Douglas R. Liftman
Title: Vice President
$17,500,000 CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Pascal Poupelle
Title: Executive Vice President
$17,500,000 THE FIRST NATIONAL BANK
OF CHICAGO
By /s/ Gail F. Scannell
Title: Assistant Vice President
$17,500,000 THE FIRST NATIONAL BANK
OF COMMERCE
By /s/ Nemesio J. Viso
Title: Vice President
$17,500,000 HIBERNIA NATIONAL BANK
By /s/ Tammy M. Angelety
Title: Banking Officer
<PAGE>
<PAGE>
By /s/ Lyndsay P. Job
Title: Senior Vice President
$17,500,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED NEW YORK BRANCH
By /s/ Kazutoshi Kuwahara
Title: Executive Vice President,
Houston Office
$17,500,000 MELLON BANK, N.A.
By /s/ E. Marc Cuenod, Jr.
Title: First Vice President
$17,500,000 ROYAL BANK OF CANADA
By /s/ Linda M. Stephens
Title: Manager
$17,500,000 WHITNEY NATIONAL BANK
By /s/ Robert L. Browning
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ John Kowalczuk
Title: Vice President
60 Wall Street
New York, NY 10260-0060
Attention:
Telex number: 177615
Facsimile number: 212-648-5023
<PAGE>
<PAGE>
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Co-Agent
By /s/ Sandra Aultman
Title: Vice President
NATIONSBANK OF TEXAS, N.A.,
as Co-Agent
By /s/ John H. Roberts
Title: Vice President
<PAGE>
<PAGE>
SCHEDULE I
PRICING SCHEDULE
The "Applicable Margin" and "Facility Fee Rate" for any day
are the respective percentages set forth below in the applicable
row under the column corresponding to the "Pricing Level" that
applies to the Borrower on such day:
Level Level Level Level
Status I II III IV
Applicable Margin 0.185% 0.215% 0.2875% 0.50%
Facility Fee Rate 0.09% 0.11% 0.1375% 0.25%
For purposes of this Schedule, the following terms have
the following meanings, subject to the further provisions of this
Schedule:
"Applicable Pricing Rating" means, as to the Borrower at
any date, the higher of the ratings assigned to the Borrower by S&P
and Moody's at such date; provided that if the difference between
such ratings is more than one notch (e.g. more than the difference
between A+ and A), the Applicable Pricing Rating will be the median
rating between them (or if there is no such median rating, the
higher of two intermediate ratings).
"Level I Pricing" exists at any date if, at such date,
the Borrower's Applicable Pricing Rating is BBB+ (Baa1) or higher.
"Level II Pricing" exists at any date if, at such date,
(i) the Borrower's Applicable Pricing Rating is BBB (Baa2) or
higher and (ii) Level I Status does not exist.
"Level III Pricing" exists at any date if, at such date, (i)
the Borrower's Applicable Pricing Rating is BBB- (Baa3) or higher
and (ii) neither Level I Status nor Level II Status exists.
"Level IV Pricing" exists at any date if, at such date,
no other Pricing Level applies.
"Pricing Level" refers to the determination of which of
Level I, Level II, Level III or Level IV applies at any date.
The credit ratings to be utilized for purposes of this Schedule are
those assigned to the senior unsecured long-term debt securities of
the Borrower without third-party credit enhancement, and any rating
assigned to any other debt security of the Borrower shall be
disregarded. The rating in effect at any date is that in effect at
the close of business on such date.
<PAGE>
<PAGE>
SCHEDULE II
Restrictions Affecting Subsidiaries:
The following list is intended to be inclusive of all items that
might be deemed to be a restriction on a Significant Subsidiary of
the Borrower and mention of a covenant or restriction herein shall
not be deemed an admission that such covenant or restriction
constitutes a restriction within the meaning of Section 5.15
herein:
Agreements:
1. Indenture governing the 8 1/4% Notes due 2002
2. Indenture governing the 7 5/8% Debentures due 2013
3. Indenture governing the 7.65% Debentures due 2023
4. Credit Agreement dated as of December 23, 1994 with Morgan
Guaranty Trust Company of New York.
5. Credit Agreement dated as of March 31, 1995 with Morgan
Guaranty Trust Company of New York.
Summary of Restrictions:
The agreements listed above contain: (a) restrictions on the
incurrence of liens by subsidiaries, (b) restrictions on certain
sale and leasebacks of assets, (c) limitations on the incurrence of
debt by Subsidiaries or by the Borrower and its Subsidiaries on a
consolidated basis and requirements that a Subsidiary or the
Borrower and its Subsidiaries on a consolidated basis maintain
specified financial ratios or net worth, and (d) restrictions on
mergers, consolidations or sales of all or substantially all of the
assets of Subsidiaries.
<PAGE>
<PAGE>
EXHIBIT A
NOTE
New York, New York
, 19
For value received, The Louisiana Land and Exploration
Company, a Maryland corporation (the "Borrower"), promises to pay
to
(the "Bank"), for the account of its Applicable Lending Office, the
unpaid principal amount of each Loan made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below on the
maturity date provided for in the Credit Agreement. The Borrower
promises to pay interest on the unpaid principal amount of each
such Loan on the dates and at the rate or rates provided for in the
Credit Agreement. All such payments of principal and interest
shall be made in lawful money of the United States in Federal or
other immediately available funds at the office of Morgan Guaranty
Trust Company of New York, 60 Wall Street, New York, New York.
All Loans made by the Bank, the respective types and, in
the case of Money Market Loans, maturities thereof and all
repayments of the principal thereof shall be recorded by the Bank
and, if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding may be
endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof;
provided that the failure of the Bank to make any such endorsement
shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This note is one of the Notes referred to in the Credit
Agreement dated as of June 17, 1997 among the Borrower, the banks
listed on the signature pages thereof, Morgan Guaranty Trust
Company of New York, as Agent, and Texas Commerce Bank National
Association and NationsBank of Texas, N.A., as Co-Agents (as the
same may be amended from time to time, the "Credit Agreement").
Terms defined in the Credit Agreement are used herein
with the same meanings. Reference is made to the Credit Agreement
for provisions for the prepayment hereof and the acceleration of
the maturity hereof.
THE LOUISIANA LAND AND
EXPLORATION COMPANY
By
Title:
<PAGE>
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
________________________________________________________________
Amount of
Amount of Type of Maturity Principal Notation
Date Loan Loan of Loan Repaid Made By
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
<PAGE>
EXHIBIT B-1
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, NY 10260
Dear Sirs:
We have acted as counsel for The Louisiana Land and
Exploration Company (the "Borrower") in connection with the Credit
Agreement (the "Credit Agreement") dated as of June 17, 1997 among
the Borrower, the banks listed on the signature pages thereof,
Morgan Guaranty Trust Company of New York, as Agent, and Texas
Commerce Bank National Association and NationsBank of Texas, N.A.,
as Co-Agents. Terms defined in the Credit Agreement are used
herein as therein defined. This opinion is being rendered to
you at the request of our client pursuant to the Credit
Agreement.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and other
instruments and have conducted such other investigations of fact
and law as we have deemed necessary or advisable for purposes of
this opinion. We have assumed for purposes of our opinions set
forth below that the execution and delivery of the Credit Agreement
by the Agent and each of the Banks has been duly authorized by the
Agent and the Banks. As to questions of fact relating to the
Borrower material to such opinions, we have relied upon
representations of appropriate officers of the Borrower.
Upon the basis of the foregoing, we are of the opinion
that:
1. The Borrower is a corporation duly incorporated,
validly existing and in good standing under the laws of Maryland,
and has all corporate powers required to carry on its business as
now conducted.
<PAGE>
<PAGE>
2. The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are within the
Borrower's corporate powers, have been duly authorized by all
necessary corporate action, do not contravene, or constitute a
default under, the articles of incorporation or by-laws of the
Borrower, and require no action by or in respect of, or filing
with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of
applicable law or regulation or, to our knowledge, of any agreement
or instrument evidencing or governing Debt of the Borrower or any
Subsidiary of the Borrower or any other material agreement,
judgment, injunction, order, decree or other instrument known to us
and binding upon the Borrower or result in the creation or
imposition of any Lien on any asset of the Borrower.
3. The Credit Agreement constitutes a valid and binding
agreement of the Borrower and the Notes constitute valid and
binding obligations of the Borrower enforceable in accordance with
their respective terms, in each case except (i) as limited by
bankruptcy, insolvency, moratorium, fraudulent conveyance or
transfer and similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable
remedies may be limited by general equitable principles.
We are qualified to practice in the State of New York and
do not purport to be experts on any laws other than the laws of the
United States, the State of New York and the Corporations and
Associations Law of the State of Maryland. We have made no
independent investigation of the laws of any other jurisdiction
and, accordingly, this opinion is rendered only with respect to the
laws of such jurisdictions. In giving this opinion, we express no
opinion as to the effect (if any) of any law of any jurisdiction
(except the State of New York) in which any Bank is located which
limits the rate of interest that such Bank may charge or collect.
The opinions expressed herein are solely for the benefit
of the Banks and the Agent and may not be relied upon by any other
persons.
Very truly yours
<PAGE>
<PAGE>
EXHIBIT B-2
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, NY 10260
Re: Opinion of General Counsel of the Borrower
Dear Sirs:
I am General Counsel of The Louisiana Land and
Exploration Company (the "Borrower") and have acted as such in
connection with the Credit Agreement (the "Credit Agreement") dated
as June 17, 1997, among the Borrower, the banks listed on the
signature pages thereof, Morgan Guaranty Trust Company of New York,
as Agent, and Texas Commerce Bank National Association and
NationsBank of Texas, N.A., as Co-Agents. Terms defined in the
Credit Agreement are used herein as therein defined. This opinion
is being rendered to you at the request of the Borrower pursuant to
Section 10.01(d) of the Credit Agreement.
I, or attorneys acting under my supervision, have
examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have
conducted such other investigations of fact and law as I have
deemed necessary or advisable for purposes of this opinion. I have
assumed for purposes of our opinions set forth below that the
execution and delivery of the Credit Agreement by the Agent and
each of the Banks has been duly authorized by the Agent and the
Banks. As to questions of fact relating to the Borrower material
to such opinions, we have relied upon representations of
appropriate officers of the Borrower.
Upon the basis of the foregoing, I am of the opinion
that:
1. The Borrower has all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted.
<PAGE>
<PAGE>
2. Except as set forth in the Borrower's Annual Report
on Form 10-K for the year ended December 31, 1996, there is no
action, suit or proceeding pending against, or to the best of my
knowledge threatened against, the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental
body, agency or official, in which an adverse decision could
reasonably be expected which could have a Material Adverse Effect
or which, to my knowledge, in any manner draws into question of the
validity of the Credit Agreement or the Notes.
I am qualified to practice in the State of Louisiana and
do not purport to be an expert on any laws other than the laws of
the United States and the State of Louisiana, and this opinion is
rendered only with respect to such laws. I have made no
independent investigation of the laws of any other jurisdiction.
The opinions expressed herein are solely for the benefits
of the Banks and the Agent and may not be relied upon by any other
persons.
Very truly yours,
<PAGE>
<PAGE>
June 17, 1997
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the Credit
Agreement (the "Credit Agreement") dated as of June 17, 1997 among
The Louisiana Land and Exploration Company, a Maryland corporation
(the "Borrower"), the banks listed on the signature pages thereof
(the "Banks"), Morgan Guaranty Trust Company of New York, as Agent
and Texas Commerce Bank National Association and NationsBank of
Texas, N.A., as Co-Agents (the "Co-Agents"), and have acted as
special counsel for the Agent for the purpose of rendering this
opinion pursuant to Section 10.01(e) of the Credit Agreement.
Terms defined in the Credit Agreement are used herein as therein
defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and other
instruments and have conducted such other investigations of fact
and law as we have deemed necessary or advisable for purposes of
this opinion.
Upon the basis of the foregoing, and assuming the due
authorization, execution and delivery of the Credit Agreement and
each of the Notes by or on behalf of the Borrower, we are of the
opinion that the Credit Agreement constitutes a valid and binding
agreement of the Borrower and each Note constitutes a valid and
binding obligation of the Borrower, in each case enforceable in
accordance with its terms, except as the same may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
<PAGE>
<PAGE>
We are members of the Bar of the State of New York and
the foregoing opinion is limited to the laws of the State of New
York and the federal laws of the United States of America. In
giving the foregoing opinion, we express no opinion as to the
effect (if any) of any law of any jurisdiction (except the State of
New York) in which any Bank is located which limits the rate of
interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with
the above matter. This opinion may not be relied upon by you for
any other purpose or relied upon by any other person without our
prior written consent.
Very truly yours,
<PAGE>
<PAGE>
EXHIBIT D
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York (the "Agent")
From: The Louisiana Land and Exploration Company
Re: Credit Agreement (the "Credit Agreement") dated as of
June 17, 1997 among the Borrower, the Banks listed on the
signature pages thereof and the Agent and Texas Commerce
Bank National Association and NationsBank of Texas, N.A.,
as Co-Agents
We hereby give notice pursuant to Section 2.03 of the
Credit Agreement that we request Money Market Quotes for the
following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount1 Interest Period2
$
Such Money Market Quotes should offer a Money Market
[Margin] [Absolute Rate]. [The applicable base rate is the London
Interbank Offered Rate.]
Terms used herein have the meanings assigned to them in
the Credit Agreement.
THE LOUISIANA LAND AND
EXPLORATION COMPANY
By
Title:
___________________
1Amount must be $10,000,000 or a larger multiple of
$1,000,000.
2Not less than one month (LIBOR Auction) or not less than 7
days (Absolute Rate Auction), subject to the provisions of the
definition of Interest Period.
<PAGE>
<PAGE>
Such Money Market Quotes should offer a Money Market
[Margiin] [Absolute Rate]. [The applicable base rate is the London
Interbank Offered Rate.]
Terms used herein have the meanings assigned to them in
the Credit Agreement.
THE LOUISIANA LAND AND
EXPLORATION COMPANY
By
Title:
<PAGE>
<PAGE>
EXHIBIT E
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to The Louisiana Land
and Exploration Company (the "Borrower")
Pursuant to Section 2.03 of the Credit Agreement dated as
of June 17, 1997 among the Borrower, the Banks parties thereto and
the undersigned, as Agent, and Texas Commerce Bank National
Association and NationsBank of Texas, N.A., as Co-Agents, we are
pleased on behalf of the Borrower to invite you to submit Money
Market Quotes to the Borrower for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market
[Margin] [Absolute Rate]. [The applicable base rate is the London
Interbank Offered Rate.]
Please respond to this invitation by no later than [2:00
P.M.] [9:30 A.M.] (New York City time) on [date].
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By
Authorized Officer
<PAGE>
<PAGE>
EXHIBIT F
Form of Money Market Quote
To: Morgan Guaranty Trust Company of New York, as Agent
Re: Money Market Quote to The Louisiana Land and Exploration
Company (the "Borrower")
In response to your invitation on behalf of the Borrower
dated _____________, 19__, we hereby make the following Money
Market Quote on the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. Date of Borrowing: *
4. We hereby offer to make Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at
the following rates:
Principal Interest Money Market
Amount** Period*** Margin**** Absolute Rate*****
$
$
[Provided, that the aggregate principal amount of Money Market
Loans for which the above offers may be accepted shall not
exceed $____________.]**
__________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed
principal amount requested. Specify aggregate limitation if the
sum of the individual offers exceeds the amount the Bank is willing
to lend. Bids must be made for $5,000,000 or a larger multiple of
$1,000,000.
(notes continued on following page)
<PAGE>
<PAGE>
We understand and agree that the offer(s) set forth
above, subject to the satisfaction of the applicable conditions set
forth in the Credit Agreement dated as of June 17, 1997 among the
Borrower, the Banks listed on the signature pages thereof and
yourselves, as Agent and Texas Commerce Bank National Association
and NationsBank of Texas, N.A., as Co-Agents, irrevocably obligates
us to make the Money Market Loan(s) for which any offer(s) are
accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated:_________________ By:__________________________
Authorized Officer
__________
*** Not less than one month or not less than 7 days, as specified
in the related Invitation. No more than five bids are permitted
for each Interest Period.
**** Margin over or under the London Interbank Offered Rate
determined for the applicable Interest Period. Specify percentage
(to the nearest 1/10,000 of 1%) and specify whether "PLUS" or
"MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th
of 1%).
<PAGE>
<PAGE>
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR]
(the "Assignor"), [ASSIGNEE] (the "Assignee"), THE LOUISIANA LAND
AND EXPLORATION COMPANY (the "Borrower") and MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the Credit Agreement dated as of June 17,
1997 among the Borrower, the Assignor and the other Banks party
thereto, as Banks, and the Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the
Assignor has a Commitment to make Loans to the Borrower in an
aggregate principal amount at any time outstanding not to exceed
$__________;
WHEREAS, Committed Loans made to the Borrower by the
Assignor under the Credit Agreement in the aggregate principal
amount of $__________ are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of
the Assignor under the Credit Agreement in respect of a portion
of its Commitment
thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding
Committed Loans, and the Assignee proposes to accept assignment of
such rights and assume the corresponding obligations from the
Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as
follows:
Section 1. Definitions. All capitalized terms not
otherwise defined herein shall have the respective meanings set
forth in the Credit Agreement.
<PAGE>
<PAGE>
Section 2. Assignments. The Assignor hereby assigns and
sells to the Assignee all of the rights of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, and the
Assignee hereby accepts such assignment from the Assignor and
assumes all of the obligations of the Assignor under the Credit
Agreement to the extent of the Assigned Amount, including the
purchase from the Assignor of the corresponding portion of the
principal amount of the Committed Loans made by the Assignor
outstanding at the effective date hereof. Upon the execution and
delivery hereof by the Assignor, the Assignee [, the Borrower and
the Agent] and the payment of the amounts specified in Section 3
required to be paid on the date hereof (i) the Assignee shall, as
of the effective date hereof, succeed to the rights and be
obligated to perform the obligations of a Bank under the Credit
Agreement with a Commitment in an amount equal to the Assigned
Amount, and (ii) the Commitment of the Assignor shall, as of the
effective date hereof, be reduced by a like amount and the Assignor
released from its obligations under the Credit Agreement to the
extent such obligations have been assumed by the Assignee. The
assignment provided for herein shall be without recourse to the
Assignor.
Section 3. Payments. As consideration for the
assignment and sale contemplated in Section 2 hereof, the Assignee
shall pay to the Assignor on the effective date hereof in Federal
funds the amount heretofore agreed between them. It is understood
that commitment and/or facility fees in respect of the Assigned
Amount accrued to the effective date hereof are for the account of
the Assignor and such fees accruing from and including the
effective date hereof are for the account of the Assignee. Each of
the Assignor and the Assignee hereby agrees that if it receives any
amount under the Credit Agreement which is for the account of the
other party hereto, it shall receive the same for the account of
such other party to the extent of such other party's interest
therein and shall promptly pay the same to such other party.
[Section 4. Consent of the Borrower and the Agent. This
Agreement is conditioned upon the consent of the Borrower and the
Agent pursuant to Section 9.06(c) of the Credit Agreement. The
execution of this Agreement by the Borrower and the Agent is
evidence of this consent. Pursuant to Section 9.06(c) the Borrower
agrees to execute and deliver a Note payable to the order of the
Assignee.]
Section 5. Effectiveness. The effective date of this
Agreement shall be __________, 199_. Following the execution of
this Agreement, it will be delivered to the Agent for acceptance by
it and recording by the Agent pursuant to Section 9.06(f) of the
Credit Agreement effective as of the date specified above (which
shall not, unless otherwise agreed to by the Agent, be earlier than
five Domestic Business Days after the date of such acceptance and
recording by the Agent).
<PAGE>
<PAGE>
Section 6. Non-reliance on Assignor. The Assignor makes
no representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition,
or statements of the Borrower, or the validity and enforceability
of the obligations of the Borrower in respect of the Credit
Agreement or any Note. The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on
such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement
and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the
Borrower.
Section 7. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State
of New York.
Section 8. Counterparts. This Agreement may be signed
in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were
upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:
Title:
[ASSIGNEE]
By:
Title:
<PAGE>
<PAGE>
THE LOUISIANA LAND AND
EXPLORATION COMPANY
By:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF
EARNINGS OF THE LOUISIANA LAND AND EXPLORATION COMPANY AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 15,900
<SECURITIES> 0
<RECEIVABLES> 116,100
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 144,600
<PP&E> 3,131,500
<DEPRECIATION> 1,964,200
<TOTAL-ASSETS> 1,345,600
<CURRENT-LIABILITIES> 141,300
<BONDS> 460,100
<COMMON> 5,200
0
0
<OTHER-SE> 496,500
<TOTAL-LIABILITY-AND-EQUITY> 1,345,600
<SALES> 305,600
<TOTAL-REVENUES> 305,600
<CGS> 0
<TOTAL-COSTS> 237,000
<OTHER-EXPENSES> 11,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,400
<INCOME-PRETAX> 42,900
<INCOME-TAX> 15,500
<INCOME-CONTINUING> 27,400
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,400
<EPS-PRIMARY> .79
<EPS-DILUTED> .79
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF
EARNINGS OF THE LOUISIANA LAND AND EXPLORATION COMPANY AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS. THIS SCHEDULE HAS BEEN RESTATED TO CONFORM TO
FINANCIAL STATEMENTS CLASSIFICATIONS ADOPTED IN 1997.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 11,700
<SECURITIES> 0
<RECEIVABLES> 133,000
<ALLOWANCES> 0
<INVENTORY> 43,000
<CURRENT-ASSETS> 202,800
<PP&E> 3,185,900
<DEPRECIATION> 1,981,500
<TOTAL-ASSETS> 1,455,300
<CURRENT-LIABILITIES> 214,500
<BONDS> 592,400
<COMMON> 5,100
0
0
<OTHER-SE> 422,600
<TOTAL-LIABILITY-AND-EQUITY> 1,455,300
<SALES> 508,800
<TOTAL-REVENUES> 508,800
<CGS> 0
<TOTAL-COSTS> 417,900
<OTHER-EXPENSES> 14,500
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,100
<INCOME-PRETAX> 58,300
<INCOME-TAX> 20,500
<INCOME-CONTINUING> 37,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,800
<EPS-PRIMARY> 1.11
<EPS-DILUTED> 1.11
