<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
__________________________________
Date of Report (Date of earliest event reported): June 8, 1995
MAXUS ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-8567-2 75-1891531
(Commission File Number) (I.R.S. Employer
Identification No.)
717 North Harwood Street, Dallas, Texas 75201-6594
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 953-2000
<PAGE>
ITEM 5. OTHER EVENTS.
On June 8, 1995, a special meeting of the stockholders of Maxus Energy
Corporation (the "Company") was held to approve the Agreement of Merger
("Merger Agreement") dated February 28, 1995, between the Company, YPF
Acquisition Corp. (the "Purchaser") and YPF Sociedad An nima ("YPF"). The
holders of the Company's common stock, $1.00 par value per share (the
"Shares"), and $4.00 Cumulative Convertible Preferred Stock (the "$4.00
Preferred Stock" and together with the Shares, the "Voting Shares") approved
the Merger Agreement by a vote as set forth below, and the Purchaser was
merged into the Company (the "Merger") on June 8, 1995.
APPROVAL OF THE MERGER AGREEMENT
Votes For Votes Against Abstentions Broker Non-Votes
--------- ------------- ----------- ----------------
125,431,963 560,882 261,164 0
The Merger was the consummation of the transactions contemplated by a
tender offer (the "Offer") which was commenced on March 6, 1995 by the
Purchaser for all the outstanding Shares at $5.50 per Share. Pursuant to the
Offer, in April 1995 the Purchaser acquired 120,000,613 Shares representing
approximately 88.5% of the then-outstanding Shares of the Company. As a
result of the Merger, each outstanding Share (other than Shares held by the
Purchaser, YPF or any of their subsidiaries or in the treasury of the
Company, all of which were cancelled, and Shares of holders who perfected
their appraisal rights under Section 262 of the Delaware General Corporation
Law) was converted into the right to receive $5.50, and YPF became the sole
holder of the Shares. Under the terms of the Merger Agreement, all of the
Company's preferred stock, consisting of the $4.00 Preferred Stock, $2.50
Cumulative Preferred Stock and $9.75 Cumulative Convertible Preferred Stock,
remain outstanding. YPF currently owns approximately 96.9% of the
outstanding Voting Shares.
The total amount of funds required by the Purchaser to acquire the
entire common equity interest in the Company, including the purchase of
Shares pursuant to the Offer and the payment for Shares converted into the
right to receive cash pursuant to the Merger, and to pay related fees and
expenses, is expected to be approximately $800 million. On April 5, 1995,
the Purchaser entered into a credit agreement (the "Credit Agreement") with
lenders for which The Chase Manhattan Bank (National Association) ("Chase")
acted as agent, pursuant to which the lenders extended to the Purchaser a
credit facility for up to $550 million (the "Purchaser Facility"). On April
5, 1995, the Purchaser borrowed $442.2 million under the Purchaser Facility
and received a capital contribution of $250 million from YPF. The Purchaser
used borrowings under the Purchaser Facility and the funds contributed to it
by YPF to purchase 120,000,613 Shares pursuant to the Offer.
Pursuant to a commitment letter from Chase, Chase provided two
additional credit facilities aggregating $425 million: (i) a credit facility
of $250 million extended to Midgard Energy Company ("Midgard"), a wholly
owned subsidiary of the Company, and (ii) a credit facility of $175 million
extended to Maxus Indonesia, Inc. ("Holdings"), a wholly owned subsidiary of
the Company. The
1
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proceeds of the loans made pursuant to these facilities were used to repay,
in part, the Purchaser Facility, which was assumed by the Company. In
addition, the Company applied $8 million of its available cash to repayment
of the Purchaser Facility and is using approximately $85.9 of its available
cash to pay holders of Shares converted into the right to receive cash in
the Merger.
MIDGARD FACILITY. Approximately $250 million of the loans under the
Purchaser Facility were repaid on June 8, 1995 with funds provided to the
Company by Midgard. Midgard provided these funds from the proceeds of a $250
million loan (the "Midgard Loan") extended to it pursuant to a credit
agreement (the "Midgard Facility") entered into on such date. In addition,
approximately $8 million of the loans outstanding under the Purchaser
Facility, including accrued interest on the Purchaser Facility loans, were
repaid on June 8, 1995 from cash held by the Company. At this time, the
maturity of the Purchaser Facility was extended to June 16, 1995.
The Midgard Loan was made in a single drawing, will mature on
December 31, 2003 and will be repaid in up to 28 consecutive quarterly
installments commencing on March 31, 1997, subject to semi-annual borrowing
base redeterminations. At Midgard's option, the interest rate applicable to
the Midgard Loan will be, until March 31, 1997, either (i) the one-, two- or
three-month London Interbank Offered Rate plus a margin of 1 3/4% or (ii) the
Base Rate (as defined in the Midgard Facility) plus a margin of 3/4% and,
thereafter, either (iii) the one-, two- or three-month London Interbank
Offered Rate plus a margin of 2 1/4% or (iv) the Base Rate plus a margin of
1 1/4%. The Midgard Loan is not secured but is guaranteed by YPF and the
Company. The agreement evidencing the Midgard Loan contains, among other things,
a negative pledge on all assets of Midgard, subject to customary exceptions.
It is anticipated that the Midgard Loan will be repaid with funds generated
by Midgard's business operations.
SUBSIDIARIES FACILITY. Approximately $175 million of the Purchaser
Facility was repaid with funds provided on June 16, 1995 to the Company by
Holdings. Holdings provided these funds from the proceeds of a $175 million
loan (the "Subsidiaries Loan") extended to it pursuant to a credit agreement
(the "Subsidiaries Facility") entered into on such date.
The Subsidiaries Loan was made in a single drawing on June 16, 1995,
will mature on December 31, 2002 and will be repaid in up to 24 consecutive
quarterly installments commencing on March 31, 1997, subject to semi-annual
borrowing base redeterminations. At the option of Holdings, the interest
rates applicable to the Subsidiaries Loan will be, until March 31, 1997,
either (i) the one-, two- or three-month London Interbank Offered Rate plus a
margin of 2 1/4% or (ii) the Base Rate (as defined in the Subsidiaries
Facility) plus a margin of 1 1/4 and, thereafter, either (iii) the one-,
two- or three-month London Interbank Offered Rate plus a margin of 2 3/4% or
(iv) the Base Rate plus a margin of 1 3/4%. The Subsidiaries Loan to
Holdings is secured by the stock of Maxus Northwest Java, Inc. ("Java") and
Maxus Southeast Sumatra, Inc. ("Sumatra") (collectively, the "Holdings
Subsidiaries") and by the interest of Holdings, Java and Sumatra in certain
accounts maintained at Chase into which the proceeds of sales of hydrocarbons
are to be deposited, and is guaranteed by Java, Sumatra, YPF and the Company.
The agreement evidencing the Subsidiaries Loan contains a negative pledge on
all of the other assets of Holdings, subject to customary exceptions. It is
anticipated that the Subsidiaries Loan will be repaid with funds generated by
the Holdings Subsidiaries' business operations.
2
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS
4.1 -Credit Agreement dated as of June 8, 1995, between Midgard
Energy Company, the lenders signatory thereto and The Chase
Manhattan Bank (National Association), as agent.
4.2 -Credit Agreement dated as of June 16, 1995, between Maxus
Indonesia, Inc., Maxus Northwest Java, Inc., Maxus Southeast
Sumatra, Inc., the lenders signatory thereto and The Chase
Manhattan Bank (National Association), as agent.
3
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SIGNATURE
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.
MAXUS ENERGY CORPORATION
By: /s/ G. R. BROWN
____________________
G. R. Brown
Vice President and Controller
Dated: June 23, 1995
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EXHIBIT INDEX
Exhibit
Number Exhibit
- ------ -------
4.1 Credit Agreement dated as of June 8, 1995, between Midgard
Energy Company, the lenders signatory thereto and The Chase
Manhattan Bank (National Association), as agent.
4.2 Credit Agreement dated as of June 16, 1995, between Maxus
Indonesia, Inc., Maxus Northwest Java, Inc., Maxus Southeast
Sumatra, Inc., the lenders signatory thereto and The Chase
Manhattan Bank (National Association), as agent.
5
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EXECUTION COUNTERPART
- -----------------------------------------------------------------
- -----------------------------------------------------------------
MIDGARD ENERGY COMPANY
_____________________________
CREDIT AGREEMENT
Dated as of June 8, 1995
______________________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
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<PAGE>
TABLE OF CONTENTS
Page
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Section 1. Definitions and Accounting Matters . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . 22
1.03 Types of Loans . . . . . . . . . . . . . . . . . 24
1.04 Borrowing Base . . . . . . . . . . . . . . . . . 24
1.05 Copies of Documents . . . . . . . . . . . . . . 26
1.06 Subsidiaries . . . . . . . . . . . . . . . . . . 26
Section 2. Commitments, Loans, Notes and Prepayments . . . 27
2.01 Loans . . . . . . . . . . . . . . . . . . . . . 27
2.02 Borrowings . . . . . . . . . . . . . . . . . . . 27
2.03 Termination of Commitments . . . . . . . . . . . 27
2.04 Lending Offices . . . . . . . . . . . . . . . . 27
2.05 Several Obligations; Remedies Independent . . . 27
2.06 Notes . . . . . . . . . . . . . . . . . . . . . 28
2.07 Optional Prepayments and Conversions or
Continuations of Loans . . . . . . . . . . . . 28
2.08 Mandatory Prepayments. . . . . . . . . . . . . . 29
Section 3. Payments of Principal and Interest . . . . . . . 32
3.01 Repayment of Loans . . . . . . . . . . . . . . . 32
3.02 Interest . . . . . . . . . . . . . . . . . . . . 33
Section 4. Payments; Pro Rata Treatment; Computations;
Etc. . . . . . . . . . . . . . . . . . . . . . 34
4.01 Payments . . . . . . . . . . . . . . . . . . . . 34
4.02 Pro Rata Treatment . . . . . . . . . . . . . . . 34
4.03 Computations . . . . . . . . . . . . . . . . . . 35
4.04 Minimum Amounts . . . . . . . . . . . . . . . . 35
4.05 Certain Notices . . . . . . . . . . . . . . . . 35
4.06 Non-Receipt of Funds by the Agent . . . . . . . 36
4.07 Sharing of Payments, Etc. . . . . . . . . . . . 37
Section 5. Yield Protection, Etc. . . . . . . . . . . . . . 37
5.01 Additional Costs . . . . . . . . . . . . . . . . 37
5.02 Limitation on Types of Loans . . . . . . . . . . 40
5.03 Illegality . . . . . . . . . . . . . . . . . . . 41
5.04 Treatment of Affected Loans . . . . . . . . . . 41
5.05 Broken Funding . . . . . . . . . . . . . . . . . 42
5.06 U.S. Taxes . . . . . . . . . . . . . . . . . . . 43
5.07 Replacement of Certain Lenders . . . . . . . . . 44
Section 6. Conditions Precedent . . . . . . . . . . . . . . 45
6.01 Conditions Precedent . . . . . . . . . . . . . . 45
6.02 Other Conditions Precedent . . . . . . . . . . . 49
Section 7. Representations and Warranties . . . . . . . . . 50
7.01 Corporate Existence . . . . . . . . . . . . . . 50
(i)
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Page
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7.02 Financial Condition . . . . . . . . . . . . . . 50
7.03 Litigation . . . . . . . . . . . . . . . . . . . 50
7.04 No Breach . . . . . . . . . . . . . . . . . . . 51
7.05 Action . . . . . . . . . . . . . . . . . . . . . 51
7.06 Approvals . . . . . . . . . . . . . . . . . . . 51
7.07 Use of Credit . . . . . . . . . . . . . . . . . 52
7.08 ERISA . . . . . . . . . . . . . . . . . . . . . 52
7.09 Taxes . . . . . . . . . . . . . . . . . . . . . 52
7.10 Investment Company Act . . . . . . . . . . . . . 52
7.11 Public Utility Holding Company Act . . . . . . . 52
7.12 Material Agreements and Liens . . . . . . . . . 53
7.13 Environmental Matters . . . . . . . . . . . . . 53
7.14 Capitalization . . . . . . . . . . . . . . . . . 56
7.15 Subsidiaries, Etc . . . . . . . . . . . . . . . 56
7.16 Title to Assets . . . . . . . . . . . . . . . . 56
7.17 True and Complete Disclosure . . . . . . . . . . 57
Section 8. Covenants of the Company . . . . . . . . . . . . 57
8.01 Financial Statements Etc. . . . . . . . . . . . 57
8.02 Litigation . . . . . . . . . . . . . . . . . . . 61
8.03 Existence, Etc. . . . . . . . . . . . . . . . . 61
8.04 Insurance . . . . . . . . . . . . . . . . . . . 62
8.05 Prohibition of Fundamental Changes . . . . . . . 62
8.06 Limitation on Liens . . . . . . . . . . . . . . 63
8.07 Indebtedness . . . . . . . . . . . . . . . . . . 66
8.08 Investments . . . . . . . . . . . . . . . . . . 67
8.09 Restricted Payments . . . . . . . . . . . . . . 68
8.10 Certain Financial Covenants . . . . . . . . . . 69
8.11 Maintenance of Corporate Separateness . . . . . 70
8.12 Subordinated Indebtedness . . . . . . . . . . . 70
8.13 Lines of Business . . . . . . . . . . . . . . . 70
8.14 Transactions with Affiliates . . . . . . . . . . 70
8.15 Use of Proceeds . . . . . . . . . . . . . . . . 71
8.16 Subsidiaries . . . . . . . . . . . . . . . . . . 71
8.17 Modifications of Certain Documents . . . . . . . 71
8.18 Changes to Production Payments . . . . . . . . . 71
8.19 Information with Respect to Dispositions and
Property Acquisitions . . . . . . . . . . . . 72
Section 9. Events of Default . . . . . . . . . . . . . . . 72
Section 10. The Agent . . . . . . . . . . . . . . . . . . . 76
10.01 Appointment, Powers and Immunities . . . . . . . 76
10.02 Reliance by Agent . . . . . . . . . . . . . . . 77
10.03 Defaults . . . . . . . . . . . . . . . . . . . . 77
10.04 Rights as a Lender . . . . . . . . . . . . . . . 77
10.05 Indemnification . . . . . . . . . . . . . . . . 78
10.06 Non-Reliance on Agent and Other Lenders . . . . 78
10.07 Failure to Act . . . . . . . . . . . . . . . . . 79
10.08 Resignation or Removal of Agent . . . . . . . . 79
10.09 Consents under Other Basic Documents . . . . . . 79
(ii)
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Page
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Section 11. Miscellaneous . . . . . . . . . . . . . . . . . 80
11.01 Waiver . . . . . . . . . . . . . . . . . . . . . 80
11.02 Notices . . . . . . . . . . . . . . . . . . . . 80
11.03 Expenses, Etc. . . . . . . . . . . . . . . . . . 80
11.04 Amendments, Etc. . . . . . . . . . . . . . . . . 81
11.05 Successors and Assigns . . . . . . . . . . . . . 82
11.06 Assignments and Participations . . . . . . . . . 82
11.07 Survival . . . . . . . . . . . . . . . . . . . . 84
11.08 Captions . . . . . . . . . . . . . . . . . . . . 85
11.09 Counterparts . . . . . . . . . . . . . . . . . . 85
11.10 Governing Law; Submission to Jurisdiction . . . 85
11.11 Waiver of Jury Trial . . . . . . . . . . . . . . 85
11.12 Treatment of Certain Information;
Confidentiality . . . . . . . . . . . . . . . 85
SCHEDULE I - Material Agreements and Liens
SCHEDULE II - Environmental Matters
SCHEDULE III - Subsidiaries and Investments
SCHEDULE IV - Litigation
SCHEDULE V - Events of Default relating to YPF and Maxus
SCHEDULE VI - Reorganization Transactions
SCHEDULE VII - Waivers of Statutes of Limitations - Taxes
EXHIBIT A - Form of Note
EXHIBIT B-1 - Form of YPF Guarantee Agreement
EXHIBIT B-2 - Form of Maxus Guarantee Agreement
EXHIBIT C-1 - Form of Opinion of Counsel to
the Obligors
EXHIBIT C-2 - Form of Opinion of Special Argentine Counsel
to the Obligors
EXHIBIT C-3 - Form of Opinion of Vice President-Legal of
Maxus
EXHIBIT D-1 - Form of Opinion of Special New York Counsel
to Chase
EXHIBIT D-2 - Form of Opinion of Special Argentine Counsel
to Chase
EXHIBIT E - Form of Confidentiality Agreement
EXHIBIT F - Form of Notice of Assignment
EXHIBIT G - Form of Process Agent Acceptance
EXHIBIT H - Form of Statement of Gas Plant Operating
Income
EXHIBIT I - Form of Affiliate Subordination Agreement
(iii)
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CREDIT AGREEMENT dated as of June 8, 1995, between:
MIDGARD ENERGY COMPANY, a corporation duly organized and validly
existing under the laws of the State of Delaware (the "COMPANY");
each of the lenders that is a signatory hereto identified under
the caption "LENDERS" on the signature pages hereto or that,
pursuant to Section 11.06(b) hereof, shall become a "Lender"
hereunder (individually, a "LENDER" and, collectively, the
"LENDERS"); and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
a national banking association, as agent for the Lenders (in such
capacity, together with its successors in such capacity, the
"AGENT").
The Company has requested that the Lenders make loans
to it in an aggregate principal amount not exceeding $250,000,000
and the Lenders are prepared to make such loans upon the terms
and conditions hereof. Accordingly, the parties hereto agree as
follows:
Section 1. DEFINITIONS AND ACCOUNTING MATTERS.
1.01 CERTAIN DEFINED TERMS. As used herein, the
following terms shall have the following meanings (all terms
defined in this Section 1.01 or in other provisions of this
Agreement in the singular to have the same meanings when used in
the plural and VICE VERSA):
"ACQUISITION CREDIT AGREEMENT" shall mean the Credit
Agreement dated as of April 5, 1995 between YPF Acquisition
Corp., YPF, as guarantor, the lenders named therein and Chase, as
agent for said lenders, as such agreement may be modified and
supplemented and in effect from time to time.
"AFFILIATE" shall mean, with respect to any Person, any
other Person that directly or indirectly controls, or is under
common control with, or is controlled by, such Person. As used
in this definition, "CONTROL" (including, with its correlative
meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall
mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership
interests, by contract or otherwise), PROVIDED that, in any
event, any Person that owns directly or indirectly securities
having 5% or more of the voting power for the election of
directors or other governing body of a corporation or 5% or more
of the partnership or other ownership interests of any other
Person (other than as a limited partner of such other Person or
as an owner of an undivided fractional interest in hydrocarbon
reserves or production or gathering, processing or storage assets
with respect to which such Person is not the operator or is the
owner of 25% or less of the capital stock of or other ownership
interests in a corporation or other entity owning any of the
foregoing (provided that another corporation or entity that does
not control, or is not controlled by or under common control
with, such Person is the owner of a greater percentage of the
CREDIT AGREEMENT
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ownership interests in such corporation or entity than such
Person) will be deemed to control such corporation or other
Person. Notwithstanding the foregoing, (i) no individual shall
be an Affiliate of any Person solely by reason of his or her
being a director, officer or employee of such Person and (ii)
none of the Company and the Wholly Owned Subsidiaries of the
Company shall be Affiliates of each other.
"AFFILIATE SUBORDINATED INDEBTEDNESS" shall mean
indebtedness of the Company to YPF or a Wholly Owned Subsidiary
of YPF (other than Maxus or a Wholly Owned Subsidiary of Maxus)
for borrowed money: (a) no part of the principal of which shall
be payable (or subject to any mandatory prepayment, redemption or
similar provisions) prior to the payment in full of the principal
of and interest on the Loans and all other amounts payable by the
Company hereunder and under the Notes without the prior consent
of the Majority Lenders (except, in the case of Casualty Event
ASD, for payments of principal thereof if and to the extent
permitted by Section 3.02 of Exhibit I hereto); and (b) the
obligations of the Company in respect of which are subordinated
to the obligations of the Company hereunder and under the Notes
pursuant to an Affiliate Subordination Agreement (or on other
terms of subordination, and pursuant to documentation,
satisfactory to the Majority Lenders).
"AFFILIATE SUBORDINATION AGREEMENT" shall mean a
subordination agreement between YPF or a Wholly Owned Subsidiary
of YPF (other than Maxus or a Wholly Owned Subsidiary of Maxus)
and the Agent in substantially the form of Exhibit I hereto.
"APPLICABLE LENDING OFFICE" shall mean, for each Lender
and for each Type of Loan, the "Lending Office" of such Lender
(or of an affiliate of such Lender) designated for such Type of
Loan on the signature pages hereof or such other office of such
Lender (or of an affiliate of such Lender) as such Lender may
from time to time specify to the Agent and the Company as the
office by which its Loans of such Type are to be made and
maintained.
"APPLICABLE MARGIN" shall mean, with respect to each
Type of Loan during each period set forth in the schedule below,
the percentage per annum set forth opposite such period under
such Type of Loan in such schedule:
CREDIT AGREEMENT
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Applicable Margin (% p.a.)
--------------------------
Period Base Rate Loans Eurodollar Loans
------ --------------- ----------------
From and including the Closing
Date through and including
March 31, 1997 3/4 of 1% 1 3/4%
From and including April 1,
1997 and at all times
thereafter 1 1/4% 2 1/4%
"BANKRUPTCY CODE" shall mean the U.S. Federal
Bankruptcy Code of 1978, as amended from time to time.
"BASE RATE" shall mean, for any day, a rate per annum
equal to the higher of (a) the Federal Funds Rate for such day
plus 1/2 of 1% and (b) the Prime Rate for such day. Each change in
any interest rate provided for herein based upon the Base Rate
resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.
"BASIC DOCUMENTS" shall mean, collectively, this
Agreement, the Notes, the Maxus Guarantee Agreement and the YPF
Guarantee Agreement.
"BORROWING BASE" shall have the meaning assigned to
such term in Section 1.04(b)(iv) hereof.
"BORROWING BASE PREPAYMENT ASD" shall have the meaning
assigned to such term in Section 8.07(d) hereof.
"BORROWING BASE REPAYMENT AMOUNT" shall have the
meaning assigned to such term in Section 2.08(a) hereof.
"BORROWING BASE REPORTS" shall mean collectively,
Statements of Gas Plant Operating Income and Hydrocarbon Reserve
Evaluation Reports and "BORROWING BASE REPORT" shall mean either
thereof.
"BUSINESS DAY" shall mean any day (a) on which
commercial banks are not authorized or required to close in New
York City and (b) if such day relates to a borrowing of, a
payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a Eurodollar
Loan or a notice by the Company with respect to any such
borrowing, payment, prepayment, Conversion or Interest Period,
that is also a day on which dealings in Dollar deposits are
carried out in the London interbank market.
"CAPEX ASD" shall have the meaning assigned to such
term in Section 8.07(d) hereof.
CREDIT AGREEMENT
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"CAPITAL EXPENDITURES" shall mean, for any period,
expenditures (including, without limitation, the aggregate amount
of Capital Lease Obligations paid or required to be paid during
such period) made or contemplated to be made by the Company or
any of its Subsidiaries in connection with the acquisition and
exploitation of, or the exploration for or development or
production of, Hydrocarbon Properties or to acquire or construct
fixed assets, plant and equipment (including renewals,
improvements and replacements, but excluding repairs) during such
period computed in accordance with GAAP. Notwithstanding the
foregoing "Capital Expenditures" for any period (i) with respect
to Hydrocarbon Properties, shall be limited to those capital
expenditures which (a) are contemplated to be made during any
period as indicated in the Hydrocarbon Reserve Evaluation Report
delivered to the Agent immediately prior to such period or (b)
the Company has indicated would be made by a prudent operator of
hydrocarbon properties in a certificate of a Senior Officer of
the Company delivered to the Agent simultaneously with such
Hydrocarbon Reserve Evaluation Report, (ii) with respect to Gas
Plant Assets, shall be limited to those capital expenditures
which the Company has indicated would be made by a prudent
operator of gas transportation and processing facilities in the
Statement of Gas Plant Operating Income delivered to the Agent
immediately prior to such period and (iii) shall exclude capital
expenditures made during such period with the proceeds of Net
Equity Investments for Capital Expenditures.
"CAPITAL LEASE OBLIGATIONS" shall mean, for any Person,
all obligations of such Person to pay rent or other amounts under
a lease of (or other agreement conveying the right to use)
Property to the extent such obligations are required to be
classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
"CASH FLOW" shall mean, for any period, for the Company
and its Subsidiaries (determined on a consolidated basis in
accordance with GAAP, to the extent applicable), the sum of the
following for such period (without duplication), which shall be
treated as a single accounting period: (a) gross operating
revenue from the sale of natural gas, oil and other hydrocarbon
products and providing related services MINUS (b) Operating
Expenses; PROVIDED that, in no event shall any non-cash item of
revenue be included in the determination of Cash Flow.
"CASUALTY EVENT" shall mean, with respect to any Gas
Plant Assets of the Company or any of its Subsidiaries, any loss
of or damage to, or any condemnation or other taking of, such Gas
Plant Assets for which such Company or any of its Subsidiaries
receives, anticipates receiving or has filed a claim for Casualty
Proceeds.
CREDIT AGREEMENT
<PAGE>
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"CASUALTY EVENT ASD" shall have the meaning assigned to
such term in Section 8.07(d) hereof.
"CASUALTY PROCEEDS" shall mean the proceeds of any
insurance, condemnation award or other compensation paid or
payable to the Company by an insurer or Government Authority in
respect of any Casualty Event.
"CHASE" shall mean The Chase Manhattan Bank (National
Association).
"CLOSING DATE" shall mean the date upon which the Loans
hereunder are made.
"CLOSING DATE MATERIAL ADVERSE EFFECT" shall mean a
material adverse effect on any of the condition (financial or
otherwise), business, operations, assets, nature of assets or
liabilities of any of (a) YPF and its Subsidiaries taken as a
whole (including, without limitation, the investment ratings of
any of YPF's securities being downgraded or being put on "credit
watch" or "credit review" with negative implications by any
nationally recognized statistical rating organization) or (b)
Maxus and its Subsidiaries taken as a whole.
"CODE" shall mean the U.S. Internal Revenue Code of
1986, as amended from time to time.
"COMMITMENT" shall mean, as to each Lender, the
obligation of such Lender to make a Loan pursuant to Section 2.01
hereof in a principal amount at any one time outstanding up to
but not exceeding the amount set opposite such Lender's name on
the signature pages hereof under the caption "Commitment". The
original aggregate principal amount of the Commitments is
$250,000,000.
"COMMITMENT TERMINATION DATE" shall mean June 12, 1995.
"COMMODITY HEDGING AGREEMENT" shall mean, for any
Person, an agreement or arrangement between such Person and one
or more financial institutions or other entities providing for
the transfer or mitigation of risks of fluctuations in the prices
of hydrocarbons, either generally or under specific
circumstances.
"COMPANY MATERIAL ADVERSE EFFECT" shall mean a material
adverse effect on (a) the Property, financial condition, business
or operations of the Company and its Subsidiaries taken as a
whole, (b) the ability of the Company or any of its Subsidiaries
to perform any of its payment or any of its other material
obligations under any of the Basic Documents to which it is a
party, (c) the validity or enforceability of any of such
obligations, (d) the ability of the Lenders or the Agent to
enforce any of their respective rights and remedies under any of
CREDIT AGREEMENT
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- 6 -
the Basic Documents to which the Company is a party or (e) the
timely payment of the principal of or interest on the Loans or
other amounts payable in connection therewith.
"CONTINUE", "CONTINUATION" and "CONTINUED" shall refer
to the continuation pursuant to Section 2.07 hereof of a
Eurodollar Loan from one Interest Period to the next Interest
Period.
"CONVERT", "CONVERSION" and "CONVERTED" shall refer to
a conversion pursuant to Section 2.07 hereof of one Type of Loans
into another Type of Loans, which may be accompanied by the
transfer by a Lender (at its sole discretion) of a Loan from one
Applicable Lending Office to another.
"DEBT COVERAGE RATIO" shall mean, as at any date, the
ratio of (a) Cash Flow for the period of four complete fiscal
quarters of the Company most recently ended prior to such date
(or, if such date is prior to April 1, 1996, the fiscal quarter
or quarters of the Company that have elapsed since March 31,
1995, in each case taken as a single accounting period), to (b)
Debt Service for such period.
"DEBT SERVICE" shall mean, for any period, the sum, for
the Company and its Subsidiaries (determined on a consolidated
basis in accordance with GAAP), of the following (without
duplication): (a) all regularly scheduled payments or
prepayments of principal of Indebtedness (including, without
limitation, the principal component of any payments in respect of
Capital Lease Obligations but excluding any prepayments required
pursuant to Section 2.08 hereof) made or required to be made
during such period PLUS (b) all Interest Expense for such period.
"DEFAULT" shall mean an Event of Default or an event
that with notice or lapse of time or both would become an Event
of Default.
"DETERMINATION DATE" shall mean, when used with respect
to any Borrowing Base Report, the date 30 days following the
Report Delivery Date with respect to such Borrowing Base Report;
provided that if such date is not a Business Day, the
Determination Date shall be the immediately succeeding Business
Day.
"DETERMINATION PERIOD" shall mean (a) with respect to
any Hydrocarbon Reserve Evaluation Report delivered by the
Independent Petroleum Engineer, the calendar year for which such
report was prepared, (b) with respect to any Hydrocarbon Reserve
Evaluation Report prepared by the Company, the period from
January 1 to June 30 of each calendar year for which such report
was prepared and (c) with respect to any Statement of Gas Plant
Operating Income, the six-month period with respect to which such
statement was prepared.
CREDIT AGREEMENT
<PAGE>
- 7 -
"DISPOSITION" shall mean any sale, assignment, transfer
or other disposition of any Property (whether now owned or
hereafter acquired) by the Company or any of its Subsidiaries to
any other Person excluding (i) obsolete or worn-out Property,
tools or equipment no longer used or useful in its business so
long as such items are disposed of in the ordinary course of
business and on ordinary business terms, (ii) any inventory or
other Property (including, without limitation, accounts
receivable) disposed of in the ordinary course of business and on
ordinary business terms, (iii) any hydrocarbons produced,
processed or sold in the ordinary course of business and on
ordinary business terms (excluding Production Payments or any
other sale or lease of interests in hydrocarbons in the ground
with respect to Properties of the Company or any Subsidiary) and
(iv) dispositions of Properties the subject of Casualty Events.
"DOLLAR-DENOMINATED PRODUCTION PAYMENTS" shall mean
production payment obligations of the Company or any of its
Subsidiaries which are payable from a specified share of proceeds
received from production from specific Properties, together with
all undertakings and obligations in connection therewith.
"DOLLARS" and "$" shall mean lawful money of the United
States of America.
"ENVIRONMENTAL CLAIM" shall mean any written notice,
claim or demand (collectively, a "CLAIM") by any Person alleging
or asserting liability of the Company or any of its Subsidiaries
for investigatory costs, cleanup costs, governmental response
costs, damages to natural resources or other Property, personal
injuries, fines or penalties arising out of, based on or
resulting from (a) the presence, or Release into the environment,
of any Environmental Material at any location, whether or not
owned by such Person, or (b) circumstances forming the basis of
any violation or alleged violation by, or any liability or
alleged liability of, the Company or any of its Subsidiaries of
or under any Environmental Law. The term "Environmental Claim"
shall include, without limitation, any claim by any governmental
authority for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any applicable
Environmental Law, and any claim by any third party seeking
damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from the presence of
or exposure to Environmental Materials.
"ENVIRONMENTAL LAWS" shall mean any and all applicable
U.S. Federal, state, local and foreign laws, rules or
regulations, and any orders or decrees relating to the regulation
of Environmental Materials, including, but not limited to the
following: the Environmental Material(s) Transportation Act, 49
U.S.C. Sections 1801 ET SEQ.; the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C.
CREDIT AGREEMENT
<PAGE>
- 8 -
Sections 9601 ET SEQ.; the Resource Conservation and Recovery
Act, 42 U.S.C. Sections 6901 ET SEQ.; the Clean Water Act, 33
U.S.C. Sections 1231 ET SEQ.; the Clean Air Act, 42 U.S.C.
Sections 7401 ET SEQ.; the Toxic Substances Control Act, 15
U.S.C. Sections 2601 ET SEQ.; the Safe Drinking Water Act, 42
U.S.C. Sections 3808 ET SEQ.; and the Oil Pollution Act, 33
U.S.C. Sections 2701 ET SEQ., each as amended, and their state
and local counterparts or equivalents, as amended.
"ENVIRONMENTAL MATERIAL" shall mean, collectively,
(a) any petroleum or petroleum products Released to the
environment, RCRA ignitible materials, waste explosives, spent or
waste radioactive materials, asbestos, urea formaldehyde foam
insulation, and transformers or other equipment that contain
polychlorinated biphenyls ("PCB'S") and (b) any other chemical or
substance, exposure to which is now or hereafter regulated under
any Environmental Law.
"EQUITY RIGHTS" shall mean, with respect to any Person,
any subscriptions, options, warrants, commitments, preemptive
rights or agreements of any kind (including, without limitation,
any stockholders' or voting trust agreements) for the issuance,
sale, registration or voting of, or securities convertible into,
any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, such
Person.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA AFFILIATE" shall mean any corporation or trade
or business that is a member of any group of organizations (i)
described in Section 414(b) or (c) of the Code of which the
Company is a member and (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f)
of ERISA and Section 412(n) of the Code, described in Section
414(m) or (o) of the Code of which the Company is a member.
"EURODOLLAR LOANS" shall mean Loans that bear interest
at rates based on rates referred to in the definition of
"Eurodollar Rate" in this Section 1.01.
"EURODOLLAR RATE" shall mean, with respect to any
Eurodollar Loan for any Interest Period therefor, the arithmetic
mean, as determined by the Agent, of the rates per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) quoted by the
respective Reference Lenders at approximately 11:00 a.m. London
time (or as soon thereafter as practicable) on the date two
Business Days prior to the first day of such Interest Period for
the offering by the respective Reference Lenders to leading banks
in the London interbank market of Dollar deposits having a term
comparable to such Interest Period and in an amount comparable to
the principal amount of the Eurodollar Loan to be made by the
CREDIT AGREEMENT
<PAGE>
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respective Reference Lenders for such Interest Period. If any
Reference Lender is not participating in any Eurodollar Loans
during any Interest Period therefor, the Eurodollar Rate for such
Loans for such Interest Period shall be determined by reference
to the amount of such Loans that such Reference Lender would have
made or had outstanding had it been participating in such Loan
during such Interest Period.
"EVENT OF DEFAULT" shall have the meaning assigned to
such term in Section 9 hereof.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, PROVIDED that (a) if the day for
which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published
on the next succeeding Business Day and (b) if such rate is not
so published for any Business Day, the Federal Funds Rate for
such Business Day shall be the average rate charged to Chase on
such Business Day on such transactions as determined by the
Agent.
"FUTURE NET REVENUES" shall mean, for any period, the
future gross revenues attributable to all or a part (as specified
herein) of Proved Reserves for such period less the sum for such
period of all projected Operating Expenses with respect thereto,
as set forth in the related Hydrocarbon Reserve Evaluation
Report, and less (without duplication) all amounts projected to
be applied to the discharge of any Production Payment and to the
unearned balance of any advance payment received under any
contract to be performed relating to such Proved Reserves.
"GAAP" shall mean United States generally accepted
accounting principles as such principles shall be in effect at
the time of the computation or determination or as of the date of
the relevant financial statements, as the case may be (the
"Relevant Date"), subject to Section 1.02 hereof.
"GAS PLANT ASSET ASSUMPTIONS" shall mean, at any time
(a) (i) the net cash flow, (ii) the capacity, (iii) the
utilization rates, (iv) the profit margins and (v) the Capital
Expenditures, in each case related to the Gas Plant Assets,
(b) the price of natural gas, natural gas liquids and other
substances produced or consumed by the Gas Plant Assets, in the
case of both clauses (a) and (b) above, as estimated by the Agent
with the approval of the Majority Lenders, in their reasonable
discretion, using the information set forth in the Statement of
Gas Plant Operating Income delivered immediately prior to such
CREDIT AGREEMENT
<PAGE>
- 10 -
time, and any other relevant information or factors, including,
without limitation, economic assumptions with respect to
inflation, any additional Indebtedness or other obligations that
may be incurred by the Company and its Subsidiaries after the
Determination Period for such Statement of Gas Plant Operating
Income, and any additional Gas Plant Assets acquired by the
Company and its Subsidiaries after such Determination Period
(which are not subject to any Liens other than Liens permitted by
Section 8.06 hereof).
"GAS PLANT ASSETS" shall mean interests which the
Company or any of its Subsidiaries has from time to time in gas
processing plants and gas gathering systems.
"GOVERNMENT AUTHORITY" shall mean any Federal, State,
municipal, local, territorial, or other governmental subdivision,
department, commission, board, bureau, agency, regulatory
authority, instrumentality, judicial or administrative body,
domestic or foreign.
"GUARANTEE" shall mean a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or become
contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any
Person or any production or revenues generated by (or any capital
or other expenditures incurred in connection with the acquisition
and exploitation of, or the exploration for or development or
production of) any Hydrocarbon Properties or any Gas Plant
Assets, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person,
or an agreement to purchase, sell or lease (as lessee or lessor)
Property, products, materials, supplies or services primarily for
the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss,
and including, without limitation, causing a bank or other
financial institution to issue a letter of credit or other
similar instrument for the benefit of another Person, but
excluding endorsements for collection or deposit in the ordinary
course of business. The terms "GUARANTEE" and "GUARANTEED" used
as a verb shall have a correlative meaning.
"HYDROCARBON BORROWING BASE ASSUMPTIONS" shall have the
meaning assigned to such term in Section 1.04(b)(iii) hereof.
"HYDROCARBON PROPERTIES" shall mean interests which the
Company or any of its Subsidiaries has from time to time in
hydrocarbon reserves.
"HYDROCARBON RESERVE EVALUATION REPORT" shall mean the
Initial Hydrocarbon Reserve Evaluation Report and each subsequent
unsuperseded report that is prepared on a basis reasonably
consistent with the Initial Hydrocarbon Reserve Evaluation Report
CREDIT AGREEMENT
<PAGE>
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and is otherwise satisfactory in form and substance to the
Majority Lenders.
"INDEBTEDNESS" shall mean, for any Person (without
duplication): (a) obligations created, issued or incurred by such
Person for borrowed money (whether by loan, the issuance and sale
of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or
otherwise, to purchase or repurchase the same or similar Property
from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services,
other than trade accounts payable (other than for borrowed money)
arising, and accrued expenses incurred, in the ordinary course of
business so long as such trade accounts payable are payable
within 90 days after the date of receipt of the invoice therefor;
(c) obligations of others secured by a Lien on the Property of
such Person, whether or not the respective obligations so secured
has been assumed by such Person; (d) obligations of such Person
in respect of letters of credit, surety bonds or similar
instruments issued or accepted by banks, surety companies and
other financial institutions for account of such Person; (e)
Capital Lease Obligations of such Person; (f) obligations of such
Person in respect of obligations of the types specified in other
clauses of this definition as a general partner or joint venturer
of any partnership or joint venture (other than in respect of
obligations incurred in the ordinary course of business); (g) the
unearned balance of any advance payment received by such Person
under any contract to be performed in excess of $250,000 in the
aggregate (other than as provided in clause (h) below); (h) the
unearned balance of any advance payment received by such Person
under any contract to be performed in excess of $2,000,000 in the
aggregate resulting from transactions in the ordinary course of
such Person's business; and (i) Indebtedness of others Guaranteed
by such Person.
"INDEPENDENT PETROLEUM ENGINEER" shall mean any firm of
independent petroleum engineers selected by the Company and
acceptable to the Majority Lenders.
"INITIAL HYDROCARBON RESERVE EVALUATION REPORT" shall
mean a report prepared by Gaffney, Cline & Associates, Inc. dated
March 10, 1995, as audited by Miller & Lents, Ltd. (the results
of such audit being set forth in letters dated March 23, 1995)
with respect to Proved Reserves.
"INITIAL STATEMENT OF GAS PLANT OPERATING INCOME" shall
mean the Statement of Gas Plant Operating Income dated April,
1995.
"INTERCOMPANY AGREEMENT" shall have the meaning
assigned to such term in Section 8.14 hereof.
CREDIT AGREEMENT
<PAGE>
- 12 -
"INTEREST COVERAGE RATIO" shall mean, as at any date,
the ratio of (a) Cash Flow for the four complete fiscal quarters
of the Company ending on or most recently ended prior to such
date (or, if such date is prior to April 1, 1996, the fiscal
quarter or quarters of the Company that have elapsed since March
31, 1995), in each case taken as a single accounting period, TO
(b) Interest Expense for such period.
"INTEREST EXPENSE" shall mean, for any period, interest
expense of the Company and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP),
including, without limitation, (a) all interest in respect of
Indebtedness (including, without limitation, the interest
component of any payments in respect of Capital Lease
Obligations) accrued (whether or not actually paid during such
period) or capitalized during such period PLUS (b) the net amount
payable (or MINUS the net amount receivable) under Interest Rate
Protection Agreements during such period (whether or not actually
paid or received during such period).
"INTEREST PERIOD" shall mean, with respect to any
Eurodollar Loan, each period commencing on the date such
Eurodollar Loan is made or Converted from a Base Rate Loan or the
last day of the next preceding Interest Period for such Loan and
ending on the numerically corresponding day in the first, second
or third calendar month thereafter, as the Company may select as
provided in Section 4.05 hereof, except that each Interest Period
that commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in
the appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may
commence before and end after any Principal Payment Date unless,
after giving effect thereto, the aggregate outstanding principal
amount of the Eurodollar Loans having Interest Periods that end
after such Principal Payment Date shall be equal to or less than
the aggregate outstanding principal amount of the Eurodollar
Loans scheduled to be outstanding after giving effect to the
payments of principal required to be made on such Principal
Payment Date; (ii) each Interest Period that would otherwise end
on a day that is not a Business Day shall end on the next
succeeding Business Day (or, if such next succeeding Business Day
falls in the next succeeding calendar month, on the next
preceding Business Day); and (iii) notwithstanding clause (i)
above, no Interest Period shall have a duration of less than one
month and, if the Interest Period for any Eurodollar Loan would
otherwise be a shorter period, such Loan shall not be available
hereunder for such period.
"INTEREST RATE PROTECTION AGREEMENT" shall mean, for
any Person, an interest rate swap, cap or collar agreement or
similar arrangement between such Person and one or more financial
CREDIT AGREEMENT
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institutions providing for the transfer or mitigation of interest
risks either generally or under specific contingencies.
"INVESTMENT" shall mean, for any Person (without
duplication): (a) the acquisition (whether for cash, Property,
services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any
such acquisition (including, without limitation, any "short sale"
or any sale of any securities at a time when such securities are
not owned by the Person entering into such sale); (b) the making
of any deposit with, or advance, loan or other extension of
credit to, any other Person (including the purchase of Property
from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such Person),
but excluding any such advance, loan or extension of credit
having a term not exceeding 90 days arising in connection with
the sale of inventory or supplies or the providing of oil and gas
operating, producing or marketing services by such Person in the
ordinary course of business; (c) the entering into of any
Guarantee of, or other contingent obligation with respect to,
Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or
extended to such other Person (other than Guarantees included in
the definition of Indebtedness in this Section 1.01); and (d) the
entering into of any Interest Rate Protection Agreement or
Commodity Hedging Agreement.
"LEGAL REQUIREMENTS" shall mean all laws, rules or
regulations of any Government Authority or any order, writ,
injunction or decree of any court or governmental or regulatory
authority or agency.
"LIEN" shall mean, with respect to any Property, any
assignment in trust, mortgage, lien, pledge, charge, fiduciary or
security assignment, security interest or encumbrance of any kind
in respect of such Property (including, without limitation, any
Production Payment, advance payment or similar arrangement with
respect to minerals in place). For purposes of the foregoing, a
Person shall be deemed to own subject to a Lien any Property that
it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or
other title retention agreement (other than an operating lease)
relating to such Property.
"LIKE-KIND EXCHANGE" shall have the meaning assigned to
such term in Section 2.08(d) hereof.
"LOANS" shall mean the loans provided for in Section
2.01 hereof, which may be Base Rate Loans and/or Eurodollar
Loans.
CREDIT AGREEMENT
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"MAJORITY LENDERS" shall mean Lenders holding at least
66 2/3% of the aggregate amount of the Commitments or, if the
Commitments shall have terminated, Lenders holding at least 66
2/3% of the aggregate unpaid principal amount of the Loans.
"MAXUS" shall mean Maxus Energy Corporation, a Delaware
corporation.
"MAXUS GUARANTEE AGREEMENT" shall mean a Guarantee
Agreement substantially in the form of Exhibit B-2, hereto
between Maxus and the Agent, as the same may be modified and
supplemented and in effect from time to time.
"MAXUS PREFERRED SHARES" shall mean, collectively, the
$4.00 Cumulative Convertible Preferred Stock par value $1.00 per
share, the $9.75 Cumulative Convertible Preferred Stock par value
$1.00 per share, and the $2.50 Cumulative Preferred Stock par
value $1.00 per share, in each case, of Maxus.
"MERGER" shall mean the merger of YPF Acquisition Corp.
with and into Maxus pursuant to the Merger Agreement.
"MERGER AGREEMENT" shall mean the Agreement of Merger
dated as of February 28, 1995 among YPF, YPF Acquisition Corp.
and Maxus, as the same may be modified and supplemented and in
effect from time to time.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions
have been made by the Company or any ERISA Affiliate and that is
covered by Title IV of ERISA.
"NET AVAILABLE PROCEEDS" shall mean:
(a) in the case of any Disposition by the Company or
any of its Subsidiaries, the amount of Net Cash Payments
received in connection with such Disposition;
(b) in the case of any Casualty Event, the aggregate
amount of the Casualty Proceeds received by the Company and
its Subsidiaries in respect of such Casualty Event net of
(i) reasonable expenses incurred by the Company and its
Subsidiaries in connection therewith and (ii) contractually
required repayments of Indebtedness to the extent secured by
a Lien on the Property the subject of such Casualty Event
and any income and transfer taxes payable by the Company or
any of its Subsidiaries in respect of such Casualty Event;
and
(c) in the case of any Subordinated Debt Issuance, the
aggregate amount of all cash received by the Company in
respect of such Subordinated Debt Issuance net of reasonable
expenses incurred by the Company in connection therewith
CREDIT AGREEMENT
<PAGE>
- 15 -
(including, without limitation, all brokers' commissions,
lawyers', accountants' and consultants' fees and expenses,
all investment advisory, placement and underwriting fees and
any other nonrecurring expenses).
"NET CASH PAYMENTS" shall mean, with respect to any
Disposition, the aggregate amount of all cash payments, and the
fair market value of any non-cash consideration, received by the
Company and its Subsidiaries directly or indirectly in connection
with such Disposition; PROVIDED that (a) Net Cash Payments shall
be net of (i) the amount of any legal, title and recording tax
expenses, commissions and other fees and expenses paid by the
Company and its Subsidiaries in connection with such Disposition
and (ii) any U.S. Federal, state and local income or other taxes
estimated to be payable by Maxus or the Company and its
Subsidiaries, as the case may be, as a result of such Disposition
(but only to the extent that (x) such estimated taxes are in fact
paid to Maxus pursuant to an Intercompany Agreement relating to
taxes for payment to the relevant Federal, state or local
governmental authority not later than the date such taxes are
required to be paid to the relevant Government Authority or
otherwise and (y) until such taxes are so paid, the Company
establishes reserves for the payment of such taxes in accordance
with GAAP) and (b) Net Cash Payments shall be net of any
repayments by the Company or any of its Subsidiaries of
Indebtedness to the extent that (i) such Indebtedness is secured
by a Lien on the Property that is the subject of such Disposition
and (ii) such Indebtedness is to be repaid as a condition to the
Disposition of such Property.
"NET EQUITY INVESTMENTS FOR CAPITAL EXPENDITURES" shall
mean, for any period, the receipt by the Company during such
period of any (a) proceeds of a capital contribution from YPF or
a Wholly Owned Subsidiary of YPF (other than any Subsidiaries of
the Company), PLUS (b) proceeds of Capex ASD and Casualty Event
ASD, in each case only if and to the extent that at the time of
receipt of such proceeds, a Senior Officer of the Company has
indicated in a certificate delivered to the Agent that the same
are to be used by the Company to make Capital Expenditures),
provided that "Net Equity Investments for Capital Expenditures"
shall be reduced by any Restricted Payments made during such
period.
"NOTES" shall mean the promissory notes provided for by
Section 2.06 hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same may
be modified and supplemented and in effect from time to time.
"OBLIGORS" shall mean the Company, Maxus and YPF.
"OPERATING EXPENSES" shall mean, for any period, the
sum of the following for the Company and its Subsidiaries
(determined on a consolidated basis in accordance with GAAP, to
CREDIT AGREEMENT
<PAGE>
- 16 -
the extent applicable) to the extent paid during such period
(without duplication), which shall be treated as a single
accounting period: (a) expenses (including lease operating
expenses) incurred in producing natural gas, oil and other
hydrocarbon products and providing related services (including,
without limitation, royalties paid or payable during such period
but only to the extent reflected in the computation of gross
operating revenue for purposes of determining Cash Flow for such
period); (b) Taxes; (c) general and administrative and other
overhead expenditures; (d) Capital Expenditures made during such
period in respect of Proved Reserves and Gas Plant Assets; and
(e) all other production and operating expenses paid; PROVIDED
that, in no event shall any non-cash item of expense be included
in the determination of Operating Expenses.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"PERMITTED INVESTMENTS" shall mean: (a) direct
obligations of the United States of America, or of any agency
thereof, or obligations guaranteed as to principal and interest
by the United States of America, or of any agency thereof, in
each case maturing not more than 180 days from the date of
acquisition thereof; (b) marketable general obligations issued by
any state of the United States of America maturing within 180
days from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings generally
obtainable from either Standard & Poor's Ratings Group or Moody's
Investors Service, Inc.; (c) Dollar denominated domestic and
Eurodollar certificates of deposit, time or demand deposits or
bankers' acceptances and maturing within 180 days from the date
of acquisition issued or guaranteed by, or placed with, and money
market deposit accounts issued or offered by: (i) any Lender,
(ii) any other commercial bank organized under the laws of the
United States of America or any state thereof or the District of
Columbia having (or the holding company of which such bank is a
Subsidiary having) combined capital, surplus and undivided
profits (less any undivided losses) of not less than
$1,000,000,000; and (iii) any branch located in the United States
of America of a commercial bank organized under the laws of the
United Kingdom, Canada or Japan (or the holding company of which
such commercial bank is a subsidiary) having a combined capital,
surplus and undivided profits (less any undivided losses) of not
less than $1,000,000,000; (d) commercial paper (i) rated A-1 or
better or P-1 by Standard & Poor's Ratings Group or Moody's
Investors Services, Inc., respectively, or (ii) rated A-2 or P-2
or better by Standard & Poor's Ratings Group or Moody's Investors
Services, Inc., respectively, issued by any Lender (or any other
Person that owns, directly or indirectly, not less than 80% of
the voting securities of such Lender) having capital surplus and
undivided profits (less any undivided losses) of at least
$1,000,000,000, in each case maturing not more than 180 days from
CREDIT AGREEMENT
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the date of acquisition thereof and so long as the same (x)
provides for the payment of principal and interest and (y) are
not subject to any contingency regarding the payment of principal
or interest; and (e) fully collateralized repurchase agreements
with a term of not more than 30 days for underlying securities of
the types described in clauses (a) and (b) of this definition,
entered into with any institution meeting the qualifications
specified in subclauses (i) through (iii) of clause (c) of this
definition.
"PERSON" shall mean any individual, corporation,
company, voluntary association, partnership, joint venture,
trust, unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof).
"PLAN" shall mean an employee benefit or other plan
established or maintained by the Company or any ERISA Affiliate
and that is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"POST-DEFAULT RATE" shall mean, in respect of (a) any
principal of any Loan that is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum
during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to
3 1/2% PLUS the Base Rate as in effect from time to time PLUS the
Applicable Margin for Base Rate Loans (PROVIDED that, if the
amount so in default is principal of a Eurodollar Loan and the
due date thereof is a day other than the last day of the current
Interest Period therefor, the "Post-Default Rate" for such
principal shall be, for the period from and including such due
date to but excluding the last day of such Interest Period, 3 1/2%
PLUS the interest rate for such Loan as provided in Section
3.02(b) hereof) and (b) interest on any Loan or any other amount
payable to the Agent or the Lenders hereunder, in each case, that
is not paid when due (whether at stated maturity, by acceleration
or otherwise), a rate per annum during the period from and
including the due date to but excluding the date on which such
amount is paid in full equal to 3 1/2% PLUS the Base Rate as in
effect from time to time PLUS the Applicable Margin for Base Rate
Loans.
"PRESENT VALUE OF GAS PLANT ASSETS" shall mean, as of
any date, estimated net cash flow expressed in Dollars (after
Capital Expenditures, cost of gas purchased and applicable taxes)
in respect of Gas Plant Assets calculated in accordance with
product pricing models and utilization rates for gas processing
and gathering assets in effect at the time such estimate is made
and discounted to present value at a discount rate for the Gas
Plant Assets, in each case, acceptable to the Majority Lenders.
"PRESENT VALUE OF RESERVES" shall mean, as of any date,
estimated net cash flow expressed in Dollars (after development
CREDIT AGREEMENT
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expenses and production taxes) in respect of Proved Reserves
attributable to Hydrocarbon Properties calculated in accordance
with risk factors and product pricing models for hydrocarbon
properties in effect at the time such estimate is made and
discounted to present value at a discount rate for Proved
Reserves acceptable, in each case, to the Majority Lenders.
"PRIME RATE" shall mean the rate of interest from time
to time announced by Chase at the Principal Office as its prime
commercial lending rate.
"PRINCIPAL OFFICE" shall mean the principal office of
Chase, located on the date hereof at 1 Chase Manhattan Plaza, New
York, New York 10081.
"PRINCIPAL PAYMENT DATES" shall mean the Quarterly
Dates falling on or nearest to March 31, June 30, September 30
and December 31 of each year, commencing with March 31, 1997
through and including December 31, 2003.
"PRODUCTION PAYMENTS" shall mean Dollar-Denominated
Production Payments and Volumetric Production Payments.
"PROPERTY" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible.
"PROVED RESERVES" shall mean reserves (to the extent of
the net interest of the Company and its Subsidiaries therein)
comprised of quantities of hydrocarbons which geologic and
engineering data demonstrate with reasonable certainty to be
recoverable in future years from known reservoirs under existing
economic and operating conditions.
"QUARTERLY DATES" shall mean the last Business Day of
March, June, September and December in each year, the first of
which shall be June 30, 1995.
"REDETERMINATION" shall mean a redetermination of the
Borrowing Base provided for by Section 1.04 hereof.
"REDETERMINATION DATE" shall have the meaning assigned
to such term in Section 1.04(b)(ii) hereof.
"REDETERMINATION REVIEW" shall have the meaning
assigned to such term in Section 1.04(c) hereof.
"REFERENCE LENDERS" shall mean Chase and such other
Lenders as may be agreed by Chase and the Company from time to
time (but in no event shall there be more than three Reference
Lenders at any time) or their respective Applicable Lending
Offices, as the case may be.
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"REGULATION A", "REGULATION D", "REGULATION U" AND
"REGULATION X" shall mean, respectively, Regulations A, D, U and
X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in
effect from time to time.
"REGULATORY CHANGE" shall mean, with respect to any
Lender, any change after the date hereof in U.S. Federal, state
or foreign law or regulations (including, without limitation,
Regulation D) or the adoption or making after such date of any
interpretation, directive or request applying to a class of banks
including such Lender of or under any U.S. Federal, state or
foreign law or regulations (whether or not having the force of
law and whether or not failure to comply therewith would be
unlawful) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.
"RELEASE" shall mean any release, spill, emission,
leaking, pumping, injection, deposit, disposal or discharge of
Environmental Materials into the environment; as used herein, the
term "Released" shall have a correlative meaning.
"RELEVANT DATE" shall have the meaning assigned to such
term in the definition of GAAP in this Section 1.01.
"REORGANIZATION TRANSACTIONS" shall mean, collectively,
the transactions described in Schedule VI hereof, all of which
are to occur on or before the Closing Date.
"REPORT DELIVERY DATE" shall mean each of March 1 and
September 1 in each year; provided that if any such day is not a
Business Day, the Report Delivery Date shall be the immediately
succeeding Business Day.
"RESTRICTED PAYMENTS" shall mean (a) dividends (in
cash, Property or obligations) on, or other payments or
distributions on account of, or the setting apart of money for a
sinking or other analogous fund for, or the purchase, redemption,
retirement or other acquisition of, any shares of any class of
stock of the Company or of any warrants, options or other rights
to acquire the same (or to make any payments to any other Person,
such as "phantom stock" payments, where the amount thereof is
calculated with reference to the fair market or equity value of
the Company or any of its Subsidiaries), but excluding dividends
payable solely in shares of common stock of the Company, and (b)
payments of interest on Affiliate Subordinated Indebtedness.
"SENIOR OFFICER" shall mean, when used with respect to
the Company, Maxus or YPF, the president, the principal executive
officer, the principal operating officer or the principal
financial officer of the Company, Maxus or YPF, as the case may
be.
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- 20 -
"STATEMENT OF GAS PLANT OPERATING INCOME" shall mean a
statement of operating income for the Gas Plant Assets in the
form attached as Exhibit H hereto that (a) is prepared in
accordance with GAAP, to the extent applicable, (b) is prepared
for the twelve month period ending on the December 31 (with
respect to the Report Delivery Date of March 1 in each year) or
the six month period ending on the June 30 (with respect to the
Report Delivery Date of September 1 of each year), as the case
may be, immediately prior to the date of such statement, and (c)
contains such other information reasonably requested by the
Majority Lenders (with sufficient advance notice to permit timely
compliance by the Company).
"SUBORDINATED DEBT ISSUANCE" shall mean the incurrence
by the Company of any Subordinated Indebtedness referred to in
Section 8.07(c) hereof.
"SUBORDINATED INDEBTEDNESS" shall mean Affiliate
Subordinated Indebtedness and other unsecured Indebtedness of the
Company for borrowed money (a) for which the Company is directly
and primarily liable, (b) in respect of which none of its
Subsidiaries is contingently or otherwise obligated, (c) that is
(except in the case of Affiliate Subordinated Indebtedness
subject to an Affiliate Subordination Agreement) subordinated to
the obligations of the Company to pay principal of, and interest
on, the Loans and the Notes and all other amounts payable by the
Company hereunder on terms of subordination in form and substance
satisfactory to the Majority Lenders, and (d) (except in the case
of Affiliate Subordinated Indebtedness subject to an Affiliate
Subordination Agreement) the other terms of which (including,
without limitation, terms relating to the amortization of such
Subordinated Indebtedness, interest thereon, mandatory
prepayments and redemptions thereof and covenants and events of
default with respect thereto) are in form and substance
satisfactory to the Majority Lenders.
"SUBSEQUENT REDETERMINATION" shall have the meaning
assigned to such term in Section 2.08(a) hereof.
"SUBSIDIARY" shall mean, with respect to any Person,
any corporation, partnership or other entity of which at least a
majority of the securities or other ownership interests having by
the terms thereof ordinary voting power to elect a majority of
the board of directors or other persons performing similar
functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other
ownership interests of any other class or classes of such
corporation, partnership or other entity shall have or might have
voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by such
Person or one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries of such Person.
CREDIT AGREEMENT
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"SUBSTANTIAL ASSET SALE" shall mean, at any time, any
Disposition or Dispositions, other than Dispositions described in
clause (i) of the third paragraph of Section 8.05 hereof, the
aggregate Net Available Proceeds of which have exceeded
$100,000,000 since the immediately preceding Determination Date.
"TANGIBLE NET WORTH" shall mean, as at any date, the
sum for the Company and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP),
of the following:
(a) the amount of capital stock of the Company; PLUS
(b) the amount of surplus and retained earnings (or,
in the case of a surplus or retained earnings deficit, MINUS
the amount of such deficit); MINUS
(c) the sum of the following: cost of treasury shares
and the book value of all assets that should be classified
as intangibles (without duplication of deductions in respect
of items already deducted in arriving at surplus and
retained earnings) but in any event including goodwill,
minority interests, research and development costs,
trademarks, trade names, copyrights, patents and franchises,
unamortized debt discount and expense, all reserves for
losses, contingencies, or other liabilities (but only to the
extent such reserves were not deducted in arriving at the
amounts in clause (a) or (b) above) and any write-up in the
book value of assets resulting from a revaluation thereof
subsequent to June 8, 1995 (excluding any adjustment in the
book value of the assets of the Company resulting from the
Merger and the transactions contemplated thereby after such
date).
"TAXES" shall mean all taxes, levies, imposts, stamp
taxes, duties, charges to tax, fees, deductions, withholdings or
other charges which are imposed, levied, collected, withheld or
assessed by any political subdivision or taxing authority as of
the date of this Agreement or at any time in the future together
with interest thereon and penalties with respect thereto, if any,
and any payments of principal, interest, charges, fees or other
amounts made on or in respect thereof, including without
limitation production and severance taxes and windfall profit
taxes, and "Tax" and "Taxation" shall be construed accordingly.
"TYPE" shall have the meaning assigned to such term in
Section 1.03 hereof.
"UNRESTRICTED CASH AND CASH EQUIVALENTS" shall mean
cash and cash equivalents of the Company and its Subsidiaries
that are (a) subject to no restrictions on the use thereof by the
Company or any of its Subsidiaries pursuant to any agreement or
understanding with any Person and (b) not set aside for, nor
CREDIT AGREEMENT
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dedicated to, any particular uses other than the payment of
principal of, and interest on, the Loans and the Notes, and the
other amounts payable by the Company to the Agent and the Lenders
hereunder.
"VOLUMETRIC PRODUCTION PAYMENTS" shall mean production
payment obligations of the Company or any of its Subsidiaries
which are payable from a specified share of production from
specific Properties, together with all undertakings and
obligations in connection therewith.
"WHOLLY OWNED SUBSIDIARY" shall mean, with respect to
any Person, any corporation, partnership or other entity of which
all of the equity securities or other ownership interests (other
than, in the case of a corporation, directors' qualifying shares)
are directly or indirectly owned or controlled by such Person or
one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
"YPF" shall mean YPF Sociedad Anonima, an Argentine
sociedad anonima.
"YPF GUARANTEE AGREEMENT" shall mean a Guarantee
Agreement substantially in the form of Exhibit B-1 hereto between
YPF and the Agent, as the same may be modified and supplemented
and in effect from time to time.
1.02 ACCOUNTING TERMS AND DETERMINATIONS.
(a) Except as otherwise provided in this Agreement,
all computations and determinations as to accounting or financial
matters and all financial statements to be delivered pursuant to
this Agreement shall be made and prepared in accordance with GAAP
(including principles of consolidation where appropriate), and
all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP.
(b) If any change in GAAP after the date of this
Agreement shall be required to be applied to transactions then or
thereafter in existence, and a violation of or default under one
or more provisions of this Agreement shall have occurred or in
the opinion of the Company would likely occur which would not
have occurred or be likely to occur if no change in accounting
principles had taken place:
(i) the parties agree that such violation or default
shall not constitute a Default for a period of 60 days from
the date the Company notifies the Agent of the application
of this Section 1.02(b) identifying such change and the
provisions of this Agreement affected thereby;
(ii) the parties agree in such event to negotiate in
good faith an amendment of this Agreement which shall
CREDIT AGREEMENT
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approximate to the extent possible the economic effect of
the original financial covenants after taking into account
such change in GAAP; and
(iii) if the parties are unable to agree on such an
amendment within such 60-day period, the Company shall have
the option of (A) prepaying the Loans (pursuant to Section
2.07 and the other applicable provisions hereof) within 120
days from the date the Company notifies the Agent of the
application of this Section 1.02(b) or (B) making all future
calculations by application of generally accepted accounting
principles applied on a basis consistent with those in
effect immediately prior to such change in generally
accepted accounting principles. If the Company does not
exercise either such option within said period by written
notice to the Agent, then as used in this Agreement, "GAAP"
shall mean generally accepted principles in effect at the
Relevant Date.
(c) If any change in GAAP after the date of this
Agreement shall be required to be applied to transactions or
conditions then or thereafter in existence, and the Agent shall
assert that the effect of such change is or shall likely be to
distort materially the effect of any of the definitions of
financial terms in Section 1 hereof or any of the financial
covenants of the Company in Section 8 hereof (the "FINANCIAL
PROVISIONS"), so that the intended economic effect of any of the
Financial Provisions will not in fact be accomplished:
(i) the Agent shall notify the Company of such
assertion, specifying the change in GAAP which is objected
to, and until otherwise determined as provided below, the
specified change in GAAP shall not be made by the Company in
its financial statements for the purpose of applying the
Financial Provisions; and
(ii) the parties shall follow the procedures set forth
in paragraph (ii) and the first sentence of paragraph (iii)
of subsection (b) of this Section 1.02. If the parties are
unable to agree on an amendment as provided in said
paragraph (ii) and if the Company does not exercise the
option set forth in the first sentence of said paragraph
(iii) within the specified period, then as used in this
Agreement "GAAP" shall mean generally accepted accounting
principles in effect at the Relevant Date, except that the
specified change in GAAP which is objected to by the Agent
shall not be made in applying the Financial Provisions.
(d) The Company will not change the last day of its
fiscal year from December 31 of each year, or the last days of
the first three fiscal quarters in each of its fiscal years from
March 31, June 30 and September 30 of each year, respectively.
CREDIT AGREEMENT
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1.03 TYPES OF LOANS. Loans hereunder are
distinguished by "Type". The "Type" of a Loan refers to whether
such Loan is a Base Rate Loan or a Eurodollar Loan, each of which
constitutes a Type.
1.04 BORROWING BASE.
(a) BORROWING BASE REPORTS. The Company has
heretofore furnished to the Agent and the Lenders the Initial
Hydrocarbon Reserve Evaluation Report and the Initial Statement
of Gas Plant Operating Income. On or before each Report Delivery
Date, the Company shall furnish to the Agent (with sufficient
copies for each Lender) (i) an updated Hydrocarbon Reserve
Evaluation Report as provided in Sections 8.01(f) and (g) hereof
and (ii) a Statement of Gas Plant Operating Income as provided in
Section 8.01(h) hereof.
(b) BORROWING BASE.
(i) During the period commencing on the date hereof
and ending on the date the first redetermination of the
Borrowing Base becomes effective as provided in clause (ii)
of this Section 1.04(b), the Borrowing Base shall be
$250,000,000 which amount has been determined on the basis
of the Initial Hydrocarbon Reserve Evaluation Report and the
Initial Statement of Gas Plant Operating Income (with such
adjustments to the rates, factors, values, estimates,
assumptions and computations set forth in such Initial
Hydrocarbon Reserve Evaluation Report and the Gas Plant
Asset Assumptions as have been approved by the Majority
Lenders).
(ii) As promptly as practicable following the receipt
of the Borrowing Base Reports on each Report Delivery Date,
the Agent (in consultation with the Lenders) shall (A)
redetermine the Borrowing Base on the basis of such
Borrowing Base Reports (or, in the case of a Redetermination
Review, the Borrowing Base Reports then in effect) in the
manner provided in clause (iii) of this Section 1.04(b), (B)
notify the Lenders of such redetermination and (C) if such
redetermination is approved by the Majority Lenders, notify
the Company and the Lenders of the Borrowing Base as so
redetermined and such redetermined Borrowing Base shall
become effective on the Determination Date immediately
following the Report Delivery Date for such Borrowing Base
Reports (or such later date as notified by the Agent to the
Company and the Lenders) and shall remain effective until
again redetermined; PROVIDED that with respect to any
redetermination of the Borrowing Base as a result of a
Redetermination Review, the Borrowing Base as so
redetermined shall become effective on the date the Agent
shall notify the Company and the Lenders thereof. Each date
on which a redetermination of the Borrowing Base becomes
CREDIT AGREEMENT
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effective as provided in the preceding sentence is herein
called a "REDETERMINATION DATE".
(iii) Each redetermination by the Agent of the Borrowing
Base (and the Majority Lenders' approval thereof) shall be
made on the basis of (A) with respect to the Hydrocarbon
Properties, parameters which may include the Present Value
of Reserves attributable to Hydrocarbon Properties as set
forth in the related Hydrocarbon Reserve Evaluation Report,
as adjusted by the Agent with the approval of the Majority
Lenders, in its and their reasonable discretion, using the
rates, factors, values, estimates, assumptions and
computations set forth in such Hydrocarbon Reserve
Evaluation Report and any other relevant information or
factors including, without limitation, any additional
Indebtedness or other obligations that may be incurred by
the Company and its Subsidiaries, any Hydrocarbon Properties
acquired or sold by the Company and its Subsidiaries after
the Determination Period for such Hydrocarbon Reserve
Evaluation Report (which, in the case of Hydrocarbon
Properties acquired by the Company or any Subsidiary, are
not subject to any Lien other than Liens permitted by
Section 8.06 hereof and which shall take into consideration
any Liens existing on such Hydrocarbon Properties at the
time of such acquisition by the Company or any Subsidiary)
and any Proved Reserves not reflected in such Hydrocarbon
Reserve Evaluation Report but are attributable to
Hydrocarbon Properties covered by such Reserve Evaluation
Report (such adjustments being herein called "HYDROCARBON
BORROWING BASE ASSUMPTIONS"), and (B) with respect to the
Gas Plant Assets, the Gas Plant Asset Assumptions and, in
the case of any Redetermination as a result of a
Redetermination Review, the changes in the Hydrocarbon
Borrowing Base Assumptions and the Gas Plant Asset
Assumptions specified in the related notice pursuant to
Section 1.04(c) hereof. Notwithstanding the foregoing (but
without duplication), (i) the Net Available Proceeds of any
Disposition that the Company has indicated will be
reinvested in Property of comparable value, in accordance
with and in the amounts provided in Section 2.08(d) hereof
(provided that such Disposition occurred not more than 90
days prior to the applicable Redetermination Date), shall be
included in the calculation of the Borrowing Base, (ii) the
amount of any Casualty Proceeds (x) the Company reasonably
anticipates will be received within 180 days after the
relevant Redetermination Date (whether or not the Company
intends to repair or replace the Property affected by such
Casualty Event) or (y) received by the Company and being
used by the Company in connection with the repair or
replacement of the Property affected by such Casualty Event
shall, in each case, be included in the calculation of the
Borrowing Base and (iii) the net proceeds of any Casualty
Event ASD incurred by the Company to finance the repair or
CREDIT AGREEMENT
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replacement of the Gas Plant Assets affected by such
Casualty Event shall be included in the calculation of the
Borrowing Base.
(iv) As used herein, "BORROWING BASE" shall mean the
amount specified in clause (i) of this Section 1.04(b)
hereof as redetermined from time to time as provided in
clauses (ii) and (iii) of this Section 1.04(b), each such
redetermination to become effective as provided in said
clause (ii).
(c) REDETERMINATION REVIEW. At any time prior to 60
days following the receipt by the Lenders of any partial
prepayment of the Loans from the proceeds of a Substantial Asset
Sale as provided in Section 2.08(d) hereof, the Majority Lenders
shall have the right to request that the Agent redetermine the
Borrowing Base then in effect (a "REDETERMINATION REVIEW"). As
promptly as reasonably practicable after receipt of a request for
a Redetermination Review, the Agent shall endeavor to redetermine
the Borrowing Base as then in effect as provided in clauses (ii)
and (iii) of Section 1.04(b) hereof on the basis of the Borrowing
Base Reports used to determine such Borrowing Base and any
changes in the Hydrocarbon Borrowing Base Assumptions or Gas
Plant Asset Assumptions used to determine such Borrowing Base as
are specified in such request and approved by the Majority
Lenders or as the Agent, with the approval of the Majority
Lenders, may deem appropriate; PROVIDED that, in no event shall
any Redetermination Review or any such Redetermination limit any
obligation of the Company then in effect to prepay the Loans in
accordance with Section 2.08(a) hereof as a result of a prior
Redetermination of the Borrowing Base.
(d) DETERMINATIONS, ETC. All determinations and
redeterminations and adjustments of the Borrowing Base or any
Hydrocarbon Borrowing Base Assumption or any Gas Plant Asset
Assumption by the Agent or the Majority Lenders provided for in
this Section 1.04 or in the definition of "Present Value of
Reserves" or "Present Value of Gas Plant Assets" in Section 1.01
hereof, including any approvals or disapprovals of a
determination or redetermination of the Borrowing Base or any
Hydrocarbon Borrowing Base Assumption or any Gas Plant Asset
Assumption or any adjustment thereof shall be made on a
reasonable basis, in good faith and in a manner reasonably
consistent with the basis on which the initial Borrowing Base was
determined.
1.05 COPIES OF DOCUMENTS. Whenever this Agreement
provides that the Agent will distribute to the Lenders documents
provided by the Company, the Company shall furnish to the Agent a
copy of such document for each Lender.
1.06 SUBSIDIARIES. As of the date hereof the Company
has no Subsidiaries. Without limiting the obligation of the
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Company to obtain the consent of the Majority Lenders to the
formation or acquisition by the Company of any Subsidiary, all
references in this Agreement to Subsidiaries of the Company shall
be deemed inapplicable until such time as any Subsidiary of the
Company shall be so formed or acquired.
Section 2. COMMITMENTS, LOANS, NOTES AND PREPAYMENTS.
2.01 LOANS. Each Lender severally agrees, on the
terms and conditions of this Agreement, to make a term loan to
the Company in Dollars on or before the Commitment Termination
Date in an aggregate principal amount up to but not exceeding the
amount of the Commitment of such Lender. Thereafter the Company
may Convert Loans of one Type into Loans of another Type (as
provided in Section 2.07 hereof) or Continue Loans of one Type as
Loans of the same Type (as provided in Section 2.07 hereof);
PROVIDED that no more than eight separate Interest Periods in
respect of Eurodollar Loans from each Lender may be outstanding
at any one time.
2.02 BORROWINGS. The Company shall give the Agent
notice of each borrowing hereunder as provided in Section 4.05
hereof. Not later than 1:00 p.m. New York time on the date
specified for each borrowing hereunder, each Lender shall make
available the amount of the Loan or Loans to be made by it on
such date to the Agent, at account number NYAO-DI-900-9-000002
maintained by the Agent with Chase at the Principal Office, in
immediately available funds, for account of the Company. The
amount so received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Company by
depositing the same, in immediately available funds, in an
account of the Company maintained with Chase at the Principal
Office designated by the Company.
2.03 TERMINATION OF COMMITMENTS. Any portion of the
Commitments not used on the Closing Date shall be automatically
terminated.
2.04 LENDING OFFICES. The Loans of each Type made by
each Lender shall be made and maintained at such Lender's
Applicable Lending Office for Loans of such Type.
2.05 SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT. The
failure of any Lender to make any Loan to be made by it on the
date specified therefor shall not relieve any other Lender of its
obligation to make its Loan on such date, but neither any Lender
nor the Agent shall be responsible for the failure of any other
Lender to make a Loan to be made by such other Lender, and
(except as otherwise provided in Section 4.06 hereof) no Lender
shall have any obligation to the Agent or any other Lender for
the failure by such Lender to make any Loan required to be made
by such Lender. The amounts payable by the Company at any time
hereunder and under the Notes, and to each Lender shall be a
CREDIT AGREEMENT
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separate and independent debt and each Lender shall be entitled
to protect and enforce its rights arising out of this Agreement
and the Notes, and, to the extent permitted by law, it shall not
be necessary for any other Lender or the Agent to consent to, or
be joined as an additional party in, any proceedings for such
purposes, PROVIDED that, in no event may the obligations
hereunder and under the Notes be accelerated except in accordance
with Section 9 hereof.
2.06 NOTES.
(a) The Loan made by each Lender shall be evidenced by
a single promissory note of the Company substantially in the form
of Exhibit A hereto, dated the date hereof, payable to such
Lender in a principal amount equal to the amount of its
Commitment as originally in effect and otherwise duly completed.
(b) The date, amount, Type, interest rate and duration
of each Interest Period (if applicable) of or for each Loan made
by each Lender to the Company, and each payment made on account
of the principal thereof, shall be recorded by such Lender on its
books and, prior to any transfer of the Note held by it, endorsed
by such Lender on the schedule attached to such Note or any
continuation thereof; PROVIDED that the failure of such Lender to
make any such recordation or endorsement shall not affect the
obligations of the Company to make a payment when due of any
amount owing hereunder or under such Note in respect of the
Loans.
(c) No Lender shall be entitled to have its Note
substituted or exchanged for any reason, or subdivided for
promissory notes of lesser denominations, except in connection
with a permitted assignment of all or any portion of such
Lender's Loan and Note pursuant to Section 11.06 hereof or a
required assignment of all of such Lender's Loans as contemplated
by Section 5.07 hereof (and, (x) if requested by any Lender or in
connection with any such required assignment, the Company agrees
to so exchange any Note and (y) promptly following delivery to
any Lender of replacement Note(s), such Lender (if such Lender is
an assigning Lender) agrees to deliver to the Company such
Lender's existing Note marked canceled).
2.07 OPTIONAL PREPAYMENTS AND CONVERSIONS OR
CONTINUATIONS OF LOANS. Subject to Section 4.04 hereof, the
Company shall have the right to prepay Loans, or to Convert Loans
of one Type into Loans of another Type or Continue Loans of one
Type as Loans of the same Type, at any time or from time to time,
PROVIDED that: (a) the Company shall give the Agent notice of
each such prepayment, Conversion or Continuation as provided in
Section 4.05 hereof (and, upon the date specified in any such
notice of prepayment, the amount to be prepaid shall become due
and payable hereunder); (b) Eurodollar Loans may be prepaid or
Converted only on the last day of an Interest Period for such
CREDIT AGREEMENT
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Loans; and (c) (i) the aggregate principal amount of any
prepayment of Loans made prior to March 31, 1997, shall be
applied to the Loans outstanding as at the date of such
prepayment and (ii) 50% of the aggregate principal amount of any
prepayment of the Loans made on or after March 31, 1997 shall be
applied to the installments of the Loans in the inverse order of
their maturities and the balance shall be applied to the
installments of the Loans ratably. Notwithstanding the
foregoing, and without limiting the rights and remedies of the
Lenders under Section 9 hereof, in the event that any Event of
Default shall have occurred and be continuing, the Agent may (and
at the request of the Majority Lenders shall) suspend the right
of the Company to Convert any Loan into a Eurodollar Loan, or to
Continue any Loan as a Eurodollar Loan, in which event all Loans
shall be Converted (on the last day(s) of the respective Interest
Periods therefor) or Continued, as the case may be, as Base Rate
Loans.
2.08 MANDATORY PREPAYMENTS.
(a) BORROWING BASE. (i) In the event that, after
giving effect to any Redetermination (other than pursuant to a
Redetermination Review), the Borrowing Base as redetermined is
less than the aggregate principal amount of the Loans outstanding
on the related Redetermination Date (minus any portion of a
Borrowing Base Repayment Amount resulting from a prior
Redetermination that has not been paid), the Company shall prepay
principal of the Loans in an amount equal to the excess (such
excess, a "BORROWING BASE REPAYMENT AMOUNT") in five equal
consecutive monthly installments commencing on the day 30 days
after the date the Agent notifies the Company of the
effectiveness of such Redetermination (or, if such day is not a
Business Day, on the next succeeding Business Day) with the
remaining such installments to be paid on the corresponding day
in each of the four succeeding months (or, if any such day is not
a Business Day, on the next succeeding Business Day), such
prepayment to be effected in the manner specified in Section
2.08(e) hereof; provided that if the Borrowing Base is
redetermined (a "SUBSEQUENT REDETERMINATION") pursuant to Section
1.04(b) hereof prior to the date the last such installment of
principal required to be prepaid pursuant to this Section 2.08(a)
is paid, (A) any of such installments remaining to be paid shall
cease to be payable if the Borrowing Base as redetermined in such
Subsequent Redetermination is equal to or greater than the
aggregate principal amount of the Loans outstanding on the
related Redetermination Date (but without affecting the
obligation of the Company to make prepayments of principal of the
Loans if and to the extent required by this Section 2.08(a) in
connection with such Subsequent Redetermination), (B) any such
installments remaining to be paid shall continue to be payable if
the Borrowing Base as redetermined in such Subsequent
Redetermination is less than the aggregate principal amount of
the Loans outstanding on the
CREDIT AGREEMENT
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related Redetermination Date and (C) if the Borrowing Base as
redetermined in such Subsequent Redetermination is less than the
aggregate principal amount of Loans outstanding on the related
Redetermination Date by an amount which is less than the
remaining Borrowing Base Repayment Amount, the Company shall pay
such portion of the remaining Borrowing Base Repayment Amount as
shall cause the Borrowing Base as so Redetermined to equal the
aggregate principal amount of the Loans outstanding.
(ii) In the event that, after giving effect to any
Redetermination pursuant to a Redetermination Review, the
Borrowing Base as redetermined is less than the aggregate
principal amount of the Loans outstanding on the related
Redetermination Date (minus any portion of a Borrowing Base
Repayment Amount that has not been paid), the Company shall
prepay the principal of the Loans in an amount equal to such
excess on the date 30 days following such Redetermination
Date.
(b) CASUALTY EVENTS. Upon the date 30 days following
the receipt by the Company of the proceeds of insurance,
condemnation award or other compensation in respect of any
Casualty Event affecting any Gas Plant Assets of the Company or
any of its Subsidiaries (or upon such earlier date as the Company
or such Subsidiary, as the case may be, shall have determined not
to repair or replace the Gas Plant Assets affected by such
Casualty Event), the Company shall prepay the Loans in an
aggregate amount, if any, equal to 100% of the Net Available
Proceeds of such Casualty Event not theretofore applied to the
repair or replacement of such Gas Plant Assets, such prepayment
to be effected in each case in the manner specified in paragraph
(e) of this Section 2.08; provided that (i) no such prepayment
shall be required if a Senior Officer of the Company has
delivered a certificate to the Agent certifying that the Company
is using such proceeds in connection with the repair or
replacement of the Gas Plant Assets affected by such Casualty
Event and (ii) any such prepayment shall be reduced by the
amount, if any, of the principal amount of any prepayments
previously made by the Company pursuant to Section 2.08(a)
required as a result of one or more prior Redeterminations but
only to the extent that such prior Redeterminations resulted in
the exclusion from the Borrowing Base of the Gas Plant Assets the
subject of such Casualty Event. Notwithstanding the foregoing,
if the Company has received proceeds of Casualty Event ASD and,
at the time of receipt by the Company of such proceeds, a Senior
Officer of the Company notified the Agent that all such proceeds
will be used for the repair or replacement of Gas Plant Assets
affected by a Casualty Event and, if all such proceeds are used
for the repair or replacement of such Gas Plant Assets, upon
receipt of any Casualty Proceeds in respect of such Casualty
Event, the Company may pay such Casualty Event ASD in an amount
equal to such Casualty Proceeds as provided in Section 3.02 of
the related Affiliate Subordination Agreement and shall not be
CREDIT AGREEMENT
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required to prepay the Loans with the Casualty Proceeds used to
so pay such Casualty Event ASD.
(c) SUBORDINATED INDEBTEDNESS. Upon any Subordinated
Debt Issuance, the Company shall prepay principal of the Loans in
an aggregate principal amount equal to 100% of the Net Available
Proceeds of such Subordinated Debt Issuance, such prepayment to
be effected in the manner specified in paragraph (e) of this
Section 2.08.
(d) SALE OF ASSETS. Without limiting the obligation
of the Company to obtain the consent of the Majority Lenders
pursuant to Section 8.05 hereof to any Disposition not otherwise
permitted hereunder, in the event that the Net Available Proceeds
of any Disposition (herein, the "CURRENT DISPOSITION"), and of
all prior Dispositions as to which a prepayment has not yet been
made under this Section 2.08(d), shall exceed $2,000,000 in any
fiscal year then, no later than two Business Days following the
occurrence of the Current Disposition, the Company shall deliver
to the Lenders a statement, certified by a Senior Officer of the
Company, in form and detail satisfactory to the Agent, of the
amount of the Net Available Proceeds of the Current Disposition
and of all such prior Dispositions and a description of the
Property subject to such Current Disposition and shall indicate
whether the Company intends (i) such Net Available Proceeds will
be reinvested by the Company or a Subsidiary of the Company in
Property of comparable value (which may include Property received
in consideration of such Disposition) or (ii) the Loans will be
prepaid in an aggregate amount equal to 100% of the Net Available
Proceeds of the Current Disposition and such prior Dispositions
(in excess of $2,000,000); provided that if the Net Available
Proceeds of the Current Disposition and all such prior
dispositions subsequent to the Determination Date immediately
preceding such Current Disposition exceed $12,500,000 (or
$25,000,000 in the case of a like-kind exchange where no cash or
cash equivalents constitute any material part of the
consideration for such Disposition and where the consideration is
received contemporaneously with such Disposition (a "LIKE-KIND
EXCHANGE")), the Company shall prepay the Loans in an aggregate
amount equal to 100% of the Net Available Proceeds of the Current
Disposition and such prior Dispositions (in excess of $12,500,000
or $25,000,000, as the case may be). If the Company has
indicated that the Net Available Proceeds are to be reinvested in
Property of comparable value, such reinvestment shall be
completed not later than 90 days following the date of the
Current Disposition.
Any prepayment to be made pursuant to this Section
2.08(d) shall be applied as follows: (i) if made at any time
prior to March 31, 1997, such prepayment shall be applied to the
aggregate principal amount of the Loans then outstanding and
(ii) if made on and after March 31, 1997, (x) with respect to the
first $50,000,000 of prepayments of principal in any fiscal year,
CREDIT AGREEMENT
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50% of each such prepayment shall be applied first to the
installments of the Loans in the inverse order of their
maturities and the balance shall be applied to the remaining
installments of the Loans ratably and (y) with respect to
prepayments of principal in any fiscal year in excess of the
first $50,000,000 in prepayments, each such prepayment shall be
applied to the installments of the Loans in the inverse order of
their maturities.
Proceeds of the Dispositions permitted pursuant to the
last sentence of Section 8.05 hereof shall be applied in
accordance with this Section 2.08(d).
(e) APPLICATION. Prepayments described in paragraphs
(a), (b) and (c) of this Section 2.08 shall be applied as
follows: (i) if made at any time prior to March 31, 1997, such
prepayment shall be applied to the aggregate principal amount of
the Loans then outstanding and (ii) if made on or after March 31,
1997, such prepayment shall be applied to the installments of the
Loans then outstanding in the inverse order of their maturities,
provided that prepayments described in said paragraphs (a) and
(c) made on or after such date shall be applied to such
installments ratably.
Section 3. PAYMENTS OF PRINCIPAL AND INTEREST.
3.01 REPAYMENT OF LOANS. The Company hereby promises
to pay to the Agent for account of each Lender the principal of
such Lender's Loan in 28 installments payable on the Principal
Payment Dates set forth below as follows (each such installment
to be in an amount equal to the product of (x) the aggregate
principal amount of the Loans outstanding at the close of
business on March 30, 1997 TIMES (y) the percentage set forth
below opposite the related Principal Payment Date):
Principal Payment Date Percentage
---------------------- ----------
March 31, 1997 4%
June 30, 1997 4%
September 30, 1997 4%
December 31, 1997 4%
March 31, 1998 4%
June 30, 1998 4%
September 30, 1998 4%
December 31, 1998 4%
March 31, 1999 4%
June 30, 1999 4%
September 30, 1999 4%
December 31, 1999 4%
March 31, 2000 4%
June 30, 2000 4%
September 30, 2000 4%
December 31, 2000 4%
CREDIT AGREEMENT
<PAGE>
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March 31, 2001 3%
June 30, 2001 3%
September 30, 2001 3%
December 31, 2001 3%
March 31, 2002 3%
June 30, 2002 3%
September 30, 2002 3%
December 31, 2002 3%
March 31, 2003 3%
June 30, 2003 3%
September 30, 2003 3%
December 31, 2003 3%
3.02 INTEREST. The Company hereby promises to pay to
the Agent for account of each Lender interest on the unpaid
principal amount of each Loan made by such Lender for the period
from and including the date of such Loan to but excluding the
date such Loan shall be paid in full, at the following rates per
annum:
(a) during such periods as such Loan is a Base Rate
Loan, the Base Rate (as in effect from time to time) PLUS
the Applicable Margin and
(b) during such periods as such Loan is a Eurodollar
Loan, for each Interest Period therefor, the Eurodollar Rate
for such Loan for such Interest Period PLUS the Applicable
Margin.
Notwithstanding the foregoing, the Company hereby promises to pay
to the Agent for account of the Agent or any Lender interest at
the applicable Post-Default Rate on the following:
(i) on any principal of any Loan held by such Lender
that shall not be paid in full when due (whether at stated
maturity, by acceleration or otherwise) for the period from
and including the due date thereof to but excluding the date
the same is paid in full; and
(ii) on any interest on any Loan or any other amount
payable to the Agent or such Lender hereunder that shall not
be paid in full when due for the period from the due date
thereof to but excluding the date the same is paid in full.
Accrued interest on each Loan shall be payable (i) in
the case of a Base Rate Loan, quarterly on the Quarterly Dates,
(ii) in the case of a Eurodollar Loan, on the last day of each
Interest Period therefor and (iii) in the case of any Loan, upon
the payment or prepayment thereof or the Conversion of such Loan
to a Loan of another Type (but only on the principal amount so
paid, prepaid or Converted), except that interest payable at the
Post-Default Rate shall be payable from time to time on demand.
Promptly after the determination of any interest rate provided
CREDIT AGREEMENT
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for herein or any change therein, the Agent shall give notice
thereof to the Lenders to which such interest is payable and to
the Company.
Section 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS;
ETC.
4.01 PAYMENTS.
(a) Except to the extent otherwise provided herein,
all payments of principal, interest and other amounts to be made
by the Company under this Agreement and the Notes, shall be made
in Dollars, in immediately available funds, without deduction,
set-off or counterclaim, to the Agent at account number
NYAO-DI-900-9-000002 maintained by the Agent with Chase at the
Principal Office, not later than 1:00 p.m. New York time on the
date on which such payment shall become due (each such payment
made after such time on such due date to be deemed to have been
made on the next succeeding Business Day).
(b) The Company shall, at the time of making each
payment under this Agreement or any Note for account of any
Lender, specify to the Agent (which shall so notify the intended
recipient(s) thereof) the Loans or other amounts payable by the
Company hereunder to which such payment is to be applied (except
that, unless such payment is specified by the Company to be a
payment or prepayment of principal required to be made under
Section 3.01 or 2.08 hereof or a payment of interest required to
be made under Section 3.02 hereof, if an Event of Default has
occurred and is continuing, the Agent may distribute such payment
to the Lenders for application in such manner as it or the
Majority Lenders, subject to Section 4.02 hereof, may determine
to be appropriate).
(c) Each payment received by the Agent under this
Agreement or any Note for account of any Lender shall be paid by
the Agent promptly to such Lender, in immediately available
funds, for account of such Lender's Applicable Lending Office for
the Loan or other obligation in respect of which such payment is
made.
(d) If the due date of any payment under this
Agreement or any Note would otherwise fall on a day that is not a
Business Day, such date shall be extended to the next succeeding
Business Day, and interest shall be payable for any principal so
extended for the period of such extension.
4.02 PRO RATA TREATMENT. Except to the extent
otherwise provided herein: (a) each borrowing from the Lenders
under Section 2.01 hereof shall be made from the Lenders, and
each termination or reduction of the amount of the Commitments
under Section 2.03 hereof shall be applied to the respective
Commitments of the Lenders, pro rata according to the amounts of
CREDIT AGREEMENT
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their respective Commitments; (b) except as otherwise provided in
Section 5.04 hereof, Eurodollar Loans having the same Interest
Period shall be allocated pro rata among the Lenders according to
the amounts of their respective Commitments (in the case of the
making of Loans) or their respective Loans (in the case of
Conversions and Continuations of Loans); (c) each payment or
prepayment of principal of Loans by the Company shall be made for
account of the Lenders pro rata in accordance with the respective
unpaid principal amounts of the Loans held by them; and (d) each
payment of interest on Loans by the Company shall be made for
account of the Lenders pro rata in accordance with the amounts of
interest on such Loans then due and payable to the respective
Lenders.
4.03 COMPUTATIONS. Interest on Eurodollar Loans shall
be computed on the basis of a year of 360 days and actual days
elapsed (including the first day but excluding the last day)
occurring in the period for which payable and interest on Base
Rate Loans shall be computed on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed (including the
first day but excluding the last day) occurring in the period for
which payable. Notwithstanding the foregoing, for each day that
the Base Rate is calculated by reference to the Federal Funds
Rate, interest on Base Rate Loans shall be computed on the basis
of a year of 360 days and actual days elapsed.
4.04 MINIMUM AMOUNTS. Except for prepayments required
pursuant to Section 2.08 hereof, each borrowing, Conversion and
partial prepayment of principal of Loans shall be in an aggregate
amount at least equal to (x) in the case of Base Rate Loans,
$10,000,000 or a larger multiple of $1,000,000 and (y) in the
case of Eurodollar Loans $10,000,000 or a larger multiple of
$5,000,000 (borrowings, Conversions or prepayments of or into
Loans of different Types or, in the case of Eurodollar Loans,
having different Interest Periods at the same time hereunder to
be deemed separate borrowings, Conversions and prepayments for
purposes of the foregoing, one for each Type or Interest Period),
PROVIDED that the aggregate principal amount of Eurodollar Loans
having the same Interest Period shall be in an amount at least
equal to $10,000,000 or a larger multiple of $5,000,000 and, if
any Eurodollar Loans would otherwise be in a lesser principal
amount for any period, such Loans shall be Base Rate Loans during
such period.
4.05 CERTAIN NOTICES. Notices by the Company to the
Agent of borrowings, Conversions, Continuations and optional
prepayments of Loans, of Types of Loans and of the duration of
Interest Periods shall be irrevocable and shall be effective only
if received by the Agent not later than 12:00 noon New York time
on the number of Business Days prior to the date of the relevant
termination, reduction, borrowing, Conversion, Continuation or
prepayment or the first day of such Interest Period specified
below:
CREDIT AGREEMENT
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Number of
Business
Notice Days Prior
------ ----------
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans same day
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Each such notice of borrowing, Conversion, Continuation or
optional prepayment shall specify the Loans to be borrowed,
Converted, Continued or prepaid and the amount (subject to
Section 4.04 hereof) and Type of each Loan to be borrowed,
Converted, Continued or prepaid and the date of borrowing,
Conversion, Continuation or optional prepayment (which shall be a
Business Day). Each such notice of the duration of an Interest
Period shall specify the Loans to which such Interest Period is
to relate. The Agent shall promptly notify the Lenders of the
contents of each such notice. In the event that the Company
fails to select the Type of Loan, or the duration of any Interest
Period for any Eurodollar Loan, within the time period and
otherwise as provided in this Section 4.05, such Loan (if
outstanding as a Eurodollar Loan) will be automatically Converted
into a Base Rate Loan on the last day of the then current
Interest Period for such Loan or (if outstanding as a Base Rate
Loan) will remain as, or (if not then outstanding) will be made
as, a Base Rate Loan.
4.06 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the
Agent shall have been notified by a Lender or the Company (the
"PAYOR") prior to the date on which the Payor is to make payment
to the Agent or (in the case of a Lender) the proceeds of a Loan
to be made by such Lender hereunder or (in the case of the
Company) a payment to the Agent for account of one or more of the
Lenders hereunder (such payment being herein called the "REQUIRED
PAYMENT"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Agent,
the Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required
to), make the amount thereof available to the intended
recipient(s) on such date; and, if the Payor has not in fact made
the Required Payment to the Agent, the recipient(s) of such
payment shall, on demand, repay to the Agent the amount so made
available together with interest thereon in respect of each day
during the period commencing on the date (the "ADVANCE DATE")
such amount was so made available by the Agent until the date the
Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such day and, if such recipient(s) shall
fail promptly to make such payment, the Agent shall be entitled
CREDIT AGREEMENT
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to recover such amount, on demand, from the Payor, together with
interest as aforesaid.
4.07 SHARING OF PAYMENTS, ETC.
(a) If any Lender shall obtain from the Company
payment of any principal of or interest on any Loan owing to it
or payment of any other amount under this Agreement or any other
Basic Document through the exercise of any right of set-off,
banker's lien or counterclaim or similar right or otherwise
(other than from the Agent as provided herein), and, as a result
of such payment, such Lender shall have received a greater
percentage of the principal of or interest on the Loans or such
other amounts then due hereunder or thereunder by the Company to
such Lender than the percentage received by any other Lender, it
shall promptly purchase from such other Lenders participations in
(or, if and to the extent specified by such Lender, direct
interests in) the Loans or such other amounts, respectively,
owing to such other Lenders (or in interest due thereon, as the
case may be) in such amounts, and make such other adjustments
from time to time as shall be equitable, to the end that all the
Lenders shall share the benefit of such excess payment (net of
any expenses that may be incurred by such Lender in obtaining or
preserving such excess payment) pro rata in accordance with the
unpaid principal of and/or interest on the Loans or such other
amounts, respectively, owing to each of the Lenders. To such end
all the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if
such payment is rescinded or must otherwise be restored.
(b) Nothing contained in Section 4.07(a) hereof shall
require any Lender to exercise any such right or shall affect the
right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness
or obligation of the Company. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives
a secured claim in lieu of a set-off to which this Section 4.07
applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this
Section 4.07 to share in the benefits of any recovery on such
secured claim.
Section 5. YIELD PROTECTION, ETC.
5.01 ADDITIONAL COSTS.
(a) The Company shall pay directly to each Lender from
time to time such amounts as such Lender may reasonably determine
to be necessary to compensate such Lender for any costs that such
Lender determines are attributable to its making or maintaining
of any Eurodollar Loans or its obligation to make any Eurodollar
Loans hereunder, or any reduction in any amount receivable by
CREDIT AGREEMENT
<PAGE>
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such Lender hereunder in respect of any of such Loans or such
obligation (such increases in costs and reductions in amounts
receivable, together with costs referred to in Section 5.01(b)
hereof, being herein called "ADDITIONAL COSTS"), resulting from
any Regulatory Change that:
(i) shall (without duplication of amounts paid
pursuant to Section 5.06 or 11.03(c) hereof) subject any
Lender (or its Applicable Lending Office for any of such
Loans) to any tax, duty or other charge in respect of such
Loans or its Note or changes the basis of taxation of any
amounts payable to such Lender under this Agreement or its
Note in respect of any of such Loans (excluding, in each
case, any such changes in the rate of tax on the overall net
income of, or the rate at which franchise taxes are imposed
on, such Lender or such Applicable Lending Office by the
jurisdiction in which such Lender has its principal office
or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit
or similar requirements (other than, in the case of any
Lender for any period as to which the Company is required to
pay any amount under paragraph (d) below, the reserves
against "Eurocurrency liabilities" under Regulation D
therein referred to) relating to any extensions of credit or
other assets of, or any deposits with or other liabilities
of, such Lender (including, without limitation, any of such
Loans or any deposits referred to in the definition of
"Eurodollar Rate" in Section 1.01 hereof); or
(iii) imposes any other condition affecting this
Agreement or its Note (or any of such extensions of credit
or liabilities).
If any Lender requests compensation from the Company under this
Section 5.01(a), the Company may, by notice to such Lender (with
a copy to the Agent), suspend the obligation of such Lender
thereafter to make or Continue Eurodollar Loans, or to Convert
Base Rate Loans into Eurodollar Loans, until the Regulatory
Change giving rise to such request ceases to be in effect (in
which case the provisions of Section 5.04 hereof shall be
applicable), PROVIDED that such suspension shall not affect the
right of such Lender to receive the compensation so requested.
(b) Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), the
Company shall pay directly to each Lender from time to time on
request such amounts as such Lender may determine to be necessary
to compensate such Lender (or, without duplication, the holding
company of which such Lender is a subsidiary) for any costs that
it determines are attributable to the maintenance by such Lender
(or any Applicable Lending Office or such bank holding company)
of capital in respect of its Loan that it would not have incurred
CREDIT AGREEMENT
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but for a Regulatory Change (such compensation to include,
without limitation, an amount equal to any reduction of the rate
of return on assets or equity of such Lender (or any Applicable
Lending Office or such bank holding company) to a level below
that which such Lender (or any Applicable Lending Office or such
bank holding company) could have achieved but for such Regulatory
Change).
(c) Each Lender shall notify the Company of any event
occurring after the date hereof entitling such Lender to
compensation under paragraph (a) or (b) of this Section 5.01 as
promptly as practicable, but in any event within 30 days (45
days, in the case of Additional Costs referred to in said
paragraph (b)), after such Lender obtains actual knowledge
thereof; PROVIDED that (i) if any Lender fails to give such
notice within 30 days (45 days, in the case of Additional Costs
referred to in said paragraph (b)), after it obtains actual
knowledge of such an event, such Lender shall, with respect to
compensation payable pursuant to this Section 5.01 in respect of
any Additional Costs resulting from such event, only be entitled
to payment under this Section 5.01 for Additional Costs incurred
from and after the date 30 days (45 days, in the case of
Additional Costs referred to in said paragraph (b)), prior to the
date that such Lender does give such notice and (ii) each Lender
will make all reasonable efforts to avoid the need for or
minimize the amount of such compensation, including, without
limitation, designating a different Applicable Lending Office for
the Loans of such Lender affected by such event if such
designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the reasonable opinion of such
Lender, be disadvantageous to such Lender, except that such
Lender shall have no obligation to designate an Applicable
Lending Office located in the United States of America. Each
Lender will furnish to the Company a certificate setting forth
the basis and amount of each request by such Lender for
compensation under paragraph (a) or (b) of this Section 5.01
(which certificate, in the case of a request for compensation
under said paragraph (b), shall state that such Lender is
generally requesting such compensation from other similarly
situated borrowers under similar credit facilities).
Determinations and allocations by any Lender for purposes of this
Section 5.01 of the effect of any Regulatory Change pursuant to
paragraph (a) of this Section 5.01, or of the effect of capital
maintained pursuant to paragraph (b) of this Section 5.01, on its
costs or rate of return of maintaining Loans or its obligation to
make Loans, or on amounts receivable by it in respect of Loans,
and of the amounts required to compensate such Lender under this
Section 5.01, shall be prima facie evidence of such Lender's
right to receive such compensation.
(d) Without limiting the effect of the foregoing, the
Company shall pay to each Lender on the last day of each Interest
Period so long as such Lender is maintaining reserves against
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"Eurocurrency liabilities" under Regulation D (or so long as such
Lender is, by reason of any Regulatory Change, maintaining
reserves against any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar
Loans is determined as provided in this Agreement or against any
category of extensions of credit or other assets of such Lender
that includes any Eurodollar Loans) an additional amount
(determined by such Lender and notified to the Company through
the Agent) equal to the product of the following for each
Eurodollar Loan held by such Lender for each day during such
Interest Period:
(i) the principal amount of such Eurodollar Loan
outstanding on such day; and
(ii) the remainder of (x) a fraction the numerator of
which is the rate (expressed as a decimal) at which interest
accrues on such Eurodollar Loan for such Interest Period as
provided in this Agreement (less the Applicable Margin) and
the denominator of which is one MINUS the effective rate
(expressed as a decimal) at which such reserve requirements
are imposed on such Lender on such day MINUS (y) such
numerator; and
(iii) 1/360.
5.02 LIMITATION ON TYPES OF LOANS. Anything herein to
the contrary notwithstanding, if, on or prior to the
determination of any Eurodollar Rate for any Interest Period:
(a) the Agent determines, which determination shall be
conclusive, that quotations of interest rates for the
relevant deposits referred to in the definition of
"Eurodollar Rate" in Section 1.01 hereof are not being
provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for
Eurodollar Loans as provided herein; or
(b) the Majority Lenders determine, which
determination shall be conclusive, and notify the Agent that
the relevant rates of interest referred to in the definition
of "Eurodollar Rate" in Section 1.01 hereof upon the basis
of which the rate of interest for Eurodollar Loans for such
Interest Period is to be determined are not likely to be
adequate to cover the cost to such Lenders of making or
maintaining Eurodollar Loans for such Interest Period;
then the Agent shall give the Company and each Lender prompt
notice thereof and, so long as such condition remains in effect,
the Lenders shall be under no obligation to make additional
Eurodollar Loans, to Continue Eurodollar Loans or to Convert Base
Rate Loans into Eurodollar Loans, and the Company shall, on the
last day(s) of the then current Interest Period(s) for the
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outstanding Eurodollar Loans, either prepay such Loans or Convert
such Loans into Base Rate Loans in accordance with Section 2.07
hereof.
5.03 ILLEGALITY. Notwithstanding any other provision
of this Agreement, in the event that it becomes unlawful for any
Lender or its Applicable Lending Office to honor its obligation
to make or maintain Eurodollar Loans hereunder (and, in the
reasonable opinion of such Lender, the designation of a different
Applicable Lending Office would either not avoid such
unlawfulness or would be disadvantageous to such Lender), then
such Lender shall promptly notify the Company thereof (with a
copy to the Agent) and such Lender's obligation to make or
Continue, or to Convert Loans of any other Type into, Eurodollar
Loans shall be suspended until such time as such Lender may again
make and maintain Eurodollar Loans (in which case the provisions
of Section 5.04 hereof shall be applicable).
5.04 TREATMENT OF AFFECTED LOANS. If the obligation
of any Lender to make Eurodollar Loans or to Continue, or to
Convert Base Rate Loans into, Eurodollar Loans shall be suspended
pursuant to Section 5.01 or 5.03 hereof, such Lender's Eurodollar
Loans shall be automatically Converted into Base Rate Loans on
the last day(s) of the then current Interest Period(s) for
Eurodollar Loans (or, in the case of a Conversion required by
Section 5.01(b) or 5.03 hereof, on such earlier date as such
Lender may specify to the Company with a copy to the Agent) and,
unless and until such Lender gives notice as provided below that
the circumstances specified in Section 5.01 or 5.03 hereof that
gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans
have been so Converted, all payments and prepayments of
principal that would otherwise be applied to such Lender's
Eurodollar Loans shall be applied instead to its Base Rate
Loans; and
(b) all Loans that would otherwise be made or
Continued by such Lender as Eurodollar Loans shall be made
or Continued instead as Base Rate Loans, and all Base Rate
Loans of such Lender that would otherwise be Converted into
Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Company with a copy to the
Agent that the circumstances specified in Section 5.01 or 5.03
hereof that gave rise to the Conversion of such Lender's
Eurodollar Loans pursuant to this Section 5.04 no longer exist
(which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be
automatically Converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding Eurodollar
Loans, to the extent necessary so that, after giving effect
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thereto, all Loans held by the Lenders holding Eurodollar Loans
and by such Lender are held pro rata (as to principal amounts,
Types and Interest Periods) in accordance with their respective
Commitments.
5.05 BROKEN FUNDING. The Company shall pay to the
Agent for account of each Lender, upon the request of such Lender
through the Agent, such amount or amounts as shall be sufficient
(in the reasonable opinion of such Lender) to compensate it for
any loss, cost or expense that such Lender determines is
attributable to:
(a) any payment, prepayment or Conversion of a
Eurodollar Loan made by such Lender for any reason
(including, without limitation, the acceleration of the
Loans pursuant to Section 9 hereof but excluding any
Conversion pursuant to Section 5.04 hereof resulting from an
event referred to in Section 5.03 hereof) on a date other
than the last day of an Interest Period for such Loan; or
(b) any failure by the Company for any reason
(including, without limitation, the failure of any of the
conditions precedent specified in Section 6 hereof to be
satisfied) to borrow a Eurodollar Loan from such Lender on
the date for such borrowing specified in the relevant notice
of borrowing given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any,
of (i) the amount of interest that otherwise would have accrued
on the principal amount so paid, prepaid, Converted or not
borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of
the then current Interest Period for such Loan (or, in the case
of a failure to borrow, the Interest Period for such Loan that
would have commenced on the date specified for such borrowing) at
the applicable rate of interest for such Loan provided for herein
(minus the relevant Applicable Margin) over (ii) the amount of
interest that otherwise would have accrued on such principal
amount at a rate per annum equal to the interest component of the
amount such Lender would have offered in the London interbank
market for Dollar deposits of leading banks in amounts comparable
to such principal amount and with maturities comparable to such
period (as reasonably determined by such Lender). Each Lender
claiming compensation under this Section 5.05 will furnish to the
Company through the Agent a certificate setting forth the basis
of the calculation and the amount of such compensation, which
certificate shall be prima facie evidence of such Lender's right
to receive the compensation claimed.
CREDIT AGREEMENT
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5.06 U.S. TAXES.
(a) The Company agrees to pay to each Lender that is
not a U.S. Person such additional amounts as are necessary in
order that the net payment of any amount due to such non-U.S.
Person hereunder after deduction for or withholding in respect of
any U.S. Taxes imposed with respect to such payment (or in lieu
thereof, payment of such U.S. Taxes by such non-U.S. Person),
will not be less than the amount stated herein to be then due and
payable, PROVIDED that the foregoing obligation to pay such
additional amounts shall not apply:
(i) to any payment to any Lender hereunder unless such
Lender is, on the date hereof (or on the date it becomes a
Lender hereunder as provided in Section 11.06(b) hereof) and
on the date of any change in the Applicable Lending Office
of such Lender, either entitled to submit a Form 1001
(relating to such Lender and entitling it to a complete
exemption from withholding on all interest to be received by
it hereunder in respect of the Loans) or Form 4224 (relating
to all interest to be received by such Lender hereunder in
respect of the Loans), or
(ii) to any U.S. Taxes imposed solely by reason of the
failure by such non-U.S. Person to comply with applicable
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity
or connections with the United States of America of such
non-U.S. Person if such compliance is required by statute or
regulation of the United States of America as a precondition
to relief or exemption from such U.S. Taxes.
For the purposes of this Section 5.06(a), (A) "U.S. PERSON" shall
mean a citizen, national or resident of the United States of
America, a corporation, partnership or other entity created or
organized in or under any laws of the United States of America or
any State thereof, or any estate or trust that is subject to
Federal income taxation regardless of the source of its income,
(B) "U.S. TAXES" shall mean any present or future tax, assessment
or other charge or levy imposed by or on behalf of the United
States of America or any taxing authority thereof or therein, (C)
"FORM 1001" shall mean Form 1001 (Ownership, Exemption, or
Reduced Rate Certificate) of the Department of the Treasury of
the United States of America and (D) "FORM 4224" shall mean Form
4224 (Exemption from Withholding of Tax on Income Effectively
Connected with the Conduct of a Trade or Business in the United
States) of the Department of the Treasury of the United States of
America (or in relation to either such Form such successor and
related forms as may from time to time be adopted by the relevant
taxing authorities of the United States of America to document a
claim to which such Form relates). Each of the Forms referred to
in the foregoing clauses (C) and (D) shall include such successor
and related forms as may from time to time
CREDIT AGREEMENT
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be adopted by the relevant taxing authorities of the United
States of America to document a claim to which such Form relates.
(b) Within 30 days after paying any amount to the
Agent or any Lender from which it is required by law to make any
deduction or withholding, and within 30 days after it is required
by law to remit such deduction or withholding to any relevant
taxing or other authority, the Company shall deliver to the Agent
for delivery to such non-U.S. Person evidence satisfactory to
such Person of such deduction, withholding or payment (as the
case may be).
(c) Each Lender (including any lender that becomes a
Lender pursuant to Section 5.07 or 11.06 hereof) represents and
warrants to the Company and the Agent that on the date hereof
(or, in the case of any such lender that becomes a Lender
pursuant to said Section 5.07 or 11.06, on the date it becomes a
Lender) such Lender is either organized under the laws of the
United States or a State thereof or is entitled to submit either
a Form 1001 (relating to such Lender and entitling it to a
complete exemption from withholding on all interest to be
received by it hereunder in respect of the Loans) or a Form 4224
(relating to all interest to be received by such Lender hereunder
in respect of the Loans) and has delivered two copies of such
form duly completed to each of the Agent and the Company.
5.07 REPLACEMENT OF CERTAIN LENDERS. If (a) any
Lender becomes the subject of an insolvency proceeding or any
U.S. Government Authority assumes control of such Lender or any
holding company of which such Lender is a Subsidiary, requests
compensation under Section 5.01 hereof or gives notice under
Section 5.03 hereof suspending its obligation to make or maintain
Eurodollar Loans hereunder and (b) no Default shall have occurred
and be continuing, then the Company, upon not less than three
Business Days' prior notice to such Lender (with a copy to the
Agent), may require that such Lender assign (in which case such
Lender shall assign as provided in Section 12.06 hereof) its
Loan(s) to one or more other Lenders, or another lender
(reasonably acceptable to the Agent), specified by the Company in
such notice that are willing to accept such assignment for an
amount equal to the sum of the outstanding aggregate principal
amount of such Lender's Loan(s) and unpaid interest thereon
accrued to the date of the consummation of such assignment (such
assignment to be pursuant to documentation reasonably acceptable
to the assigning Lender), provided that upon the consummation of
such assignment the Company shall pay to such Lender (if not paid
to such Lender by the assignee) (x) such amounts (if any) as are
then owing to such Lender under this Section 5 (including,
without limitation, amounts under Section 5.05 hereof, if any,
that the Company would be required to pay to such Lender if the
Loan(s) assigned by such Lender were being prepaid by the Company
on the date of such assignment) and (y) all other amounts then
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owing by the Company hereunder to or for the account of such
Lender.
Section 6. CONDITIONS PRECEDENT.
6.01 CONDITIONS PRECEDENT. The obligation of each
Lender to make its Loan hereunder is subject to the conditions
precedent that (i) such Loan shall be made on or before the
Commitment Termination Date and (ii) the Agent shall have
received the following documents (with, in the case of clauses
(a), (b), (c) and (d) below, sufficient copies for each Lender),
each of which shall be satisfactory to the Agent (and to the
extent specified below, to each Lender or the Majority Lenders)
in form and substance:
(a) CORPORATE DOCUMENTS. The following documents,
each certified as indicated below:
(i) a copy of the charter of the Company,
certified as of a date reasonably close to the Closing
Date by the Secretary of State of Delaware, and a
certificate from such Secretary of State dated as of a
date reasonably close to the Closing Date as to the
good standing of and charter documents filed by, the
Company;
(ii) a certificate of the Secretary or an
Assistant Secretary of the Company, dated the Closing
Date and certifying (A) that attached thereto is a true
and complete copy of the by-laws of the Company as
amended and in effect at all times from the date on
which the resolutions referred to in clause (B) below
were adopted to and including the date of such
certificate, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the board
of directors of the Company authorizing the execution,
delivery and performance of such of the Basic Documents
to which it is or is intended to be a party (including
the borrowings hereunder), and that such resolutions
have not been modified, rescinded or amended and are in
full force and effect, (C) that the charter documents
of the Company have not been amended since the date one
day prior to the certification thereto furnished
pursuant to clause (i) above, and (D) as to the
incumbency and specimen signature of each officer of
the Company executing such of the Basic Documents to
which the Company is or is intended to be a party and
each other document to be delivered by the Company from
time to time in connection therewith (and the Agent and
each Lender may conclusively rely on such certificate
until it receives notice in writing from the Company);
CREDIT AGREEMENT
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(iii) a certification of another officer of the
Company, dated the Closing Date, as to the incumbency
and specimen signature of the Secretary or Assistant
Secretary, as the case may be, of the Company;
(iv) copies certified as of the Closing Date, of
the ESTATUTOS and other constitutive documents of YPF
and of all corporate authority for YPF (including,
without limitation, board of director resolutions and
evidence of the incumbency, including specimen
signatures, of officers) with respect to the execution,
delivery and performance of the YPF Guarantee Agreement
(and the Agent and each Lender may conclusively rely on
such certificate until it receives notice in writing
from YPF);
(v) the Articles of Merger relating to the merger
of YPF Acquisition Corp. into Maxus as filed with the
Secretary of State of Delaware certified as of the
Closing Date by the Secretary or an Assistant Secretary
of Maxus;
(vi) a certificate of the Secretary or an
Assistant Secretary of Maxus dated the Closing Date
certifying (A) that attached thereto is a true and
complete copy of the Certificate of Incorporation and
by-laws of Maxus, as amended and in effect on the
Closing Date (prior to giving effect to the Merger),
(B) that attached thereto is a true and complete copy
of resolutions duly adopted by the board of directors
of Maxus authorizing the execution, delivery and
performance of the Maxus Guarantee Agreement and (C) as
to the incumbency and specimen signature of each
officer of Maxus that executed the Maxus Guarantee
Agreement (and the Agent and each Lender may
conclusively rely on such certificate until it receives
notice in writing from Maxus to the contrary);
(vii) a certification of another officer of Maxus,
dated the Closing Date, as to the incumbency and
specimen signature of the Secretary or an Assistant
Secretary, as the case may be, of Maxus;
(viii) certificates of the Secretary of State of
Delaware dated as of a date reasonably close to the
Closing Date as to the good standing of and charter
documents filed by Maxus and the Company; and
(ix) certificates of the Secretary of State or
other appropriate official of the States of Texas and
Oklahoma, each dated as of a date reasonably close to
the Closing Date, as to the good standing of, and
CREDIT AGREEMENT
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authority to transact business of, the Company in such
States.
(b) OFFICER'S CERTIFICATES. A certificate of a Senior
Officer of each of (i) the Company, dated the Closing Date,
to the effect set forth in clauses (1)(a) and (1)(b) of
Section 6.02 hereof (except that such officer of the Company
shall represent and warrant with respect to only the Company
and its Subsidiaries), (ii) YPF, dated the Closing Date, to
the effect set forth in said clauses (1)(a) and (1)(b)
(except that such officer of YPF shall represent and warrant
with respect to only YPF and its Subsidiaries (as defined in
Schedule V hereto), and (iii) Maxus, dated the Closing Date,
to the effect set forth in said clauses (1)(a) and (1)(b)
(except that such officer of Maxus shall represent and
warrant with respect to only Maxus and its Material
Subsidiaries (as defined in the Maxus Guarantee Agreement)).
(c) OPINIONS OF COUNSEL TO THE OBLIGORS. Opinions,
dated the Closing Date, of (i) Andrews & Kurth L.L.P.,
special New York counsel to the Obligors, substantially in
the form of Exhibit C-1 hereto and covering such other
matters as the Agent or any Lender may reasonably request,
(ii) Marval, O'Farrell & Mairal, special Argentine counsel
to the Obligors, substantially in the form of Exhibit C-2
hereto and covering such other matters as the Agent or any
Lender may reasonably request and (iii) David A. Wadsworth,
Esq., Vice President-Legal of Maxus, substantially in the
form of Exhibit C-3 hereto and covering such other matters
as the Agent or any Lender may reasonably request (and the
Company hereby instructs each such counsel to deliver such
opinions to the Lenders and the Agent).
(d) OPINIONS OF SPECIAL NEW YORK COUNSEL AND SPECIAL
ARGENTINE COUNSEL TO CHASE. Opinions, dated the Closing
Date, of (i) Milbank, Tweed, Hadley & McCloy, special New
York counsel to Chase, substantially in the form of Exhibit
D-1 hereto and (ii) Perez Alati, Grondona, Benites, Arntsen
& Martinez de Hoz(h), special Argentine counsel to Chase,
substantially in the form of Exhibit D-2 hereto (and Chase
hereby instructs each such counsel to deliver such opinion
to the Lenders).
(e) NOTES. The Notes, duly completed and executed for
each Lender.
(f) YPF GUARANTEE AGREEMENT AND MAXUS GUARANTEE
AGREEMENT. The YPF Guarantee Agreement, duly executed and
delivered by YPF and the Agent and the Maxus Guarantee
Agreement duly executed and delivered by Maxus and the
Agent.
CREDIT AGREEMENT
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(g) ENVIRONMENTAL CERTIFICATE. A certificate of a
Senior Officer of Maxus as to the corporate structure of the
Company and its Subsidiaries in relation to Chemical Land
Holdings, Inc. and other environmental matters related to
Midgard.
(h) MERGER AND ACQUISITION CREDIT AGREEMENT. A
certificate of a Senior Officer of YPF that the Merger has
been consummated in accordance with the terms of the Merger
Agreement.
(i) REPAYMENT OF EXISTING INDEBTEDNESS. Evidence that
all but $175,000,000 of the principal of the loans
outstanding under the Acquisition Credit Agreement has been
(or shall be simultaneously) paid in full.
(j) SOLVENCY OF MAXUS. A certificate of Maxus and a
written opinion of Houlihan Lokey Howard & Zukin, Inc., each
dated the Closing Date, confirming that as of such date no
fact has come to its attention that would lead it to believe
that the analysis and conclusions stated in the certificate
or opinion (as the case may be) furnished pursuant to
Section 7.01(n) of the Acquisition Credit Agreement are not
true and correct in all material respects.
(k) NO CONFLICTING AGREEMENTS. The Agent shall have
received a certificate of a Senior Officer of Maxus
certifying that, after giving effect to the borrowing
hereunder, the consummation of the Merger and the other
transactions contemplated hereby to occur on the Closing
Date, Maxus is in compliance with the provisions of each of
the Maxus Public Debt Documents (as defined in the Maxus
Guarantee Agreement) and the provisions relating to the
Maxus Preferred Shares (i) the $4.00 Cumulative Convertible
Preferred Stock par value $1.00 per share, (ii) the $9.75
Cumulative Convertible Preferred Stock par value $1.00 per
share and (iii) the $2.50 Cumulative Preferred Stock par
value $1.00 per share, in each case of Maxus.
(l) REORGANIZATION TRANSACTIONS. A certificate of a
Senior Officer of Maxus certifying that the Reorganization
Transactions have been consummated.
(m) BORROWING BASE REPORTS. The Initial Hydrocarbon
Reserve Evaluation Report and the Initial Statement of Gas
Plant Operating Income.
(n) PROCESS AGENT ACCEPTANCE. A Process Agent
Acceptance, duly executed and delivered by CT Corporation in
respect of YPF, substantially in the form of Exhibit G
hereto.
CREDIT AGREEMENT
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(o) OTHER DOCUMENTS. Such other documents as the
Agent or any Lender or special New York counsel to Chase may
reasonably request.
The obligation of any Lender to make its Loan hereunder is also
subject to the payment by the Obligors of such fees as the
Obligors shall have agreed to pay or deliver to any Lender or the
Agent in connection herewith, including, without limitation, the
reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy,
special New York counsel to Chase and Perez Alati, Grondona,
Benites, Arntsen & Martinez de Hoz (h), special Argentine counsel
to Chase, in connection with the negotiation, preparation,
execution and delivery of this Agreement and the other Basic
Documents and the making of the Loans hereunder (to the extent
that statements for such fees and expenses have been delivered to
the Obligors and, in the case of the Milbank, Tweed, Hadley &
McCloy, subject to the proviso in Section 11.03(a)(i) hereof).
6.02 OTHER CONDITIONS PRECEDENT. The obligation of
each Lender to make its Loan hereunder is subject to the further
conditions precedent that:
(1) both immediately prior to the making of such Loan
and also after giving effect thereto and to the intended use
thereof:
(a) no Default shall have occurred and be
continuing; and
(b) the representations and warranties made by
the Company in Section 7 hereof and by each Obligor in
each of the Basic Documents to which such Obligor is a
party, shall be true and complete on and as of the date
of the making of such Loan with the same force and
effect as if made on and as of such date (or, if any
such representation or warranty is expressly stated to
have been made as of a specific date, as of such
specific date); and
(2) no changes in circumstances shall have occurred
since December 31, 1994 that have had or could reasonably be
expected to have a Closing Date Material Adverse Effect or a
Company Material Adverse Effect and no information relating
to the Company or any of its Subsidiaries or the
transactions contemplated hereby furnished in writing by or
on behalf of the Obligors to Chase or any of the other
Lenders (other than any thereof which, at the time
furnished, such Obligor indicated in writing was inaccurate)
that has proven to have been inaccurate, incomplete or
misleading at the time furnished shall be materially adverse
with respect to the matters referred to in the definition of
Closing Date Material Adverse Effect (taken as a whole) or
Company Material Adverse Effect.
CREDIT AGREEMENT
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Section 7. REPRESENTATIONS AND WARRANTIES. The
Company represents and warrants to the Agent and the Lenders
that:
7.01 CORPORATE EXISTENCE. Each of the Company and its
Subsidiaries: (a) is a corporation, partnership or other entity
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization; (b) has all
requisite corporate or other power, and has all material
governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now
being or as proposed to be conducted; and (c) is qualified to do
business and is in good standing in all jurisdictions in which
the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could
reasonably be expected to (either individually or in the
aggregate) have a Company Material Adverse Effect.
7.02 FINANCIAL CONDITION. The Company has heretofore
furnished to each of the Lenders a pro forma consolidated balance
sheet of the Company and its Subsidiaries as at March 31, 1995
and the related pro forma consolidated statements of income,
retained earnings and cash flows of the Company and its
Subsidiaries for the fiscal quarter ended on said date but, in
the case of said balance sheet, after giving effect to the
Reorganization Transactions, the making of the Loans hereunder
and the payments referred to in Section 8.15 hereof and the other
transactions contemplated hereby to occur on or prior to the
Closing Date. All such financial statements are complete and
correct and fairly present in all material respects the pro forma
consolidated financial condition of the Company and its
Subsidiaries, as at said date and the pro forma consolidated
results of their operations for the fiscal quarter ended on said
date, all in accordance with generally accepted accounting
principles and practices (to the extent applicable). None of the
Company nor any of its Subsidiaries has on the date hereof any
material contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments, except as referred to or
reflected or provided for in said balance sheet as at said date.
Since March 31, 1995, there has been no material adverse change
in the consolidated financial condition, operations or business
taken as a whole of the Company and its Subsidiaries from that
set forth in said financial statements.
7.03 LITIGATION. Except as disclosed in Schedule IV
hereto, there are no legal or arbitral proceedings, or any
proceedings by or before any governmental or regulatory authority
or agency, now pending or (to the knowledge of the Company)
threatened against the Company or any of its Subsidiaries that
could reasonably be expected to be adversely determined and, if
adversely determined, could (either individually or in the
CREDIT AGREEMENT
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aggregate) reasonably be expected to have a Company Material
Adverse Effect.
7.04 NO BREACH. (a) None of the execution and
delivery of this Agreement and the Notes and the other Basic
Documents to which the Company is a party, the consummation of
the transactions herein and therein contemplated or compliance
with the terms and provisions hereof and thereof will conflict
with or result in a breach of, or require any consent (which has
not been obtained or the requirement for which has not been
waived) under, the charter or by-laws of the Company, or any
agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them or any of their
Property is bound or to which any of them is subject, or
constitute a default under any such agreement or instrument, or
result in the creation or imposition of any Lien upon any
Property of the Company or any of its Subsidiaries pursuant to
the terms of any such agreement or instrument.
(b) None of the execution and delivery of this
Agreement and the Notes and the other Basic Documents to which
the Company is a party, the consummation of the transactions
herein and therein contemplated or compliance with the terms and
provisions hereof and thereof will violate any Legal Requirements
other than any Legal Requirements the violation of which,
individually or in the aggregate, could not reasonably be
expected to have a Company Material Adverse Effect.
7.05 ACTION. The Company has all necessary corporate
power, authority and legal right to execute, deliver and perform
its obligations under each of the Basic Documents to which it is
a party; the execution, delivery and performance by the Company
of each of the Basic Documents to which it is a party have been
duly authorized by all necessary corporate action on its part
(including, without limitation, any required shareholder
approvals); and this Agreement has been duly and validly executed
and delivered by the Company and constitutes, and each of the
Notes and the other Basic Documents to which it is a party when
executed and delivered (in the case of the Notes, for value) will
constitute, its legal, valid and binding obligation, enforceable
against the Company in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general
applicability affecting the enforcement of creditors' rights and
(b) the application of general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law).
7.06 APPROVALS. No authorizations, approvals or
consents of, and no filings or registrations with, any
governmental or regulatory authority or agency, or any securities
exchange, are necessary for the execution, delivery or
performance by the Company of the Basic Documents to which it is
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a party or for the legality, validity or enforceability thereof,
except for any thereof the failure of which to be obtained or
effected could not, individually or in the aggregate, reasonably
be expect to have a Company Material Adverse Effect.
7.07 USE OF CREDIT. Neither the Company nor any of
its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the
purpose, whether immediate, incidental or ultimate, of buying or
carrying margin stock (as such term is defined in Regulation U),
and no part of the proceeds of the Loans hereunder will be used
to buy or carry any margin stock.
7.08 ERISA. Each Plan, and, to the knowledge of the
Company, each Multiemployer Plan, is in compliance in all
material respects with, and has been administered in all material
respects in compliance with, the applicable provisions of ERISA,
the Code and any other U.S. Federal or State law, and no event or
condition has occurred and is continuing as to which the Company
would be under an obligation to furnish a report to the Lenders
under Section 8.01(e) hereof.
7.09 TAXES. The Company and its Subsidiaries are
members of an affiliated group of corporations filing
consolidated returns for U.S. Federal income tax purposes, of
which Maxus is the "common parent" (within the meaning of Section
1504 of the Code) of such group. The Company and its
Subsidiaries have filed all U.S. Federal income tax returns and
all other material tax returns that are required to be filed by
them (or have obtained extensions with respect thereto) and have
paid all taxes due pursuant to such returns or pursuant to any
assessment received by the Company or any of its Subsidiaries.
The charges, accruals and reserves on the books of the Company
and its Subsidiaries in respect of taxes and other governmental
charges are, in the opinion of the Company, adequate. Except as
set forth in Schedule VII hereto, neither the Company nor any
other Person acting on its behalf has given or been requested to
give a waiver of the statute of limitations relating to the
payment of any U.S. Federal, state, local and foreign taxes or
other impositions.
7.10 INVESTMENT COMPANY ACT. Neither the Company 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.
7.11 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the
Company 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.
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7.12 MATERIAL AGREEMENTS AND LIENS.
(a) Part A of Schedule I hereto is a complete and
correct list of each Production Payment, each credit agreement,
loan agreement, indenture, purchase agreement, Guarantee, letter
of credit or other arrangement (other than under the Basic
Documents and under any Credit Agreement among Maxus Northwest
Java, Inc., Maxus Southeast Sumatra Inc., Maxus Indonesia, Inc.,
the lenders party thereto and Chase, as agent for such lenders
and the documents entered into in connection therewith as
contemplated by Schedule VI to the Acquisition Credit Agreement)
providing for or otherwise relating to any Indebtedness or any
extension of credit (or commitment for any extension of credit)
to, or Guarantee by, the Company or any of its Subsidiaries,
outstanding on the date hereof the aggregate principal or face
amount or obligations of which equals or exceeds or may equal or
exceed $1,000,000 (except for any thereof which the Company
reasonably believes could not equal or exceed $1,000,000), and
the aggregate principal or face amount outstanding or that may
become outstanding under each such arrangement or Production
Payment (as the case may be) is correctly described in Part A of
said Schedule I.
(b) Part B of Schedule I hereto is a complete and
correct list of each Lien securing Indebtedness of any Person
outstanding on the date hereof the aggregate principal or face
amount of which equals or exceeds or may equal or exceed
$1,000,000 (except for any thereof securing obligations referred
to in the first parenthetical phrase in Section 7.12(a) hereof or
which the Company reasonably believes could not equal or exceed
$1,000,000) and covering any Property of the Company or any of
its Subsidiaries, and the aggregate Indebtedness secured (or that
may be secured) by each such Lien and the Property covered by
each such Lien is correctly described in Part B of said Schedule I.
7.13 ENVIRONMENTAL MATTERS. Each of the Company and
its Subsidiaries has obtained all environmental, health and
safety permits, licenses and other authorizations required under
all Environmental Laws to carry on its business as now being or
as proposed to be conducted, except to the extent failure to have
any such permit, license or authorization would not reasonably be
expected to (either individually or in the aggregate) have a
Company Material Adverse Effect. Each of such permits, licenses
and authorizations is in full force and effect and each of the
Company and its Subsidiaries is in compliance with the terms and
conditions thereof, and is also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in
any applicable Environmental Law or in any regulation, code,
plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder, all
except to the extent failure to comply therewith would not
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reasonably be expected to (either individually or in the
aggregate) have a Company Material Adverse Effect.
In addition, except (x) for matters that could not
reasonably be expected, as of the date hereof, to have a Company
Material Adverse Effect and (y) as set forth in Schedule II
hereto:
(a) No notice, notification, demand, request for
information, citation, summons or order has been issued, no
complaint has been filed, no penalty has been assessed and
no investigation or review is, to the knowledge of a Senior
Officer of the Company, pending or threatened by any
Government Authority or other Person with respect to any
alleged failure by the Company or any of its Subsidiaries to
have any environmental, health or safety permit, license or
other authorization required under any Environmental Law in
connection with the conduct of the business of the Company
or any of its Subsidiaries or with respect to any
generation, treatment, storage, recycling, transportation,
discharge or disposal, or any Release of any Environmental
Material generated by the Company or any of its
Subsidiaries.
(b) None of the Company and its Subsidiaries own,
operate or lease, and have not owned, operated or leased in
the past, a treatment, storage or disposal facility
requiring a permit under the Resource Conservation and
Recovery Act of 1976, as amended, or under any comparable
state or local statute.
(c) No polychlorinated biphenyls (PCB's) are present
or have been Released at any site or facility now or, to the
knowledge of a Senior Officer of the Company, previously
owned, operated or leased by the Company or any of its
Subsidiaries.
(d) No asbestos or asbestos-containing materials is or
has been Released at any site or facility now or, to the
knowledge of a Senior Officer of the Company, previously
owned, operated or leased by the Company or any of its
Subsidiaries.
(e) There are no unregistered or unpermitted
underground storage tanks or surface impoundments for
Environmental Materials, active or abandoned, at any site or
facility now or, to the knowledge of a Senior Officer of the
Company, previously owned, operated or leased by the Company
or any of its Subsidiaries.
(f) No Environmental Material has been Released at, on
or under any site or facility now or, to the knowledge of a
Senior Officer of the Company, previously owned, operated or
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leased by the Company or any of its Subsidiaries in a
reportable quantity established by statute, ordinance, rule,
regulation or order.
(g) No Environmental Material has been otherwise
Released at, on or under any site or facility now or, to the
knowledge of a Senior Officer of the Company, previously
owned, operated or leased by the Company or any of its
Subsidiaries.
(h) Neither the Company nor any of its Subsidiaries
has transported or arranged for the transportation of any
Environmental Materials to any location that is listed on
the National Priorities List ("NPL") under the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), or, to the knowledge of a
Senior Officer of the Company, included by the Environmental
Protection Agency in the Comprehensive Environmental
Response and Liability Information System, as provided for
by 40 C.F.R. Section 300.5 ("CERCLIS"), or on any similar
state or local list or that is the subject of U.S. Federal,
state or local enforcement actions or other investigations
that may lead to Environmental Claims against the Company.
(i) No Environmental Material generated by the Company
or any of its Subsidiaries has been recycled, treated,
stored, disposed of or Released by the Company or any of its
Subsidiaries, in each case, other than in accordance with
all applicable Environmental Laws, at any location.
(j) No written notification of a Release of an
Environmental Material has been filed by or on behalf of the
Company or any of its Subsidiaries and no site or facility
now or, to the knowledge of a Senior Officer of the Company,
previously owned, operated or leased by the Company or any
of its Subsidiaries is listed or proposed for listing on the
NPL, CERCLIS or any similar state list of sites.
(k) No Liens have been effected under or pursuant to
any Environmental Laws on any site or facility owned,
operated or leased by the Company or any of its
Subsidiaries, and no government action has been taken or is
in process that could subject any such site or facility to
such Liens and neither the Company nor any of its
Subsidiaries would be required to place any notice or
restriction relating to the presence of any Environmental
Materials at any site or facility owned by it in any deed to
the real property on which such site or facility is located.
(l) Upon request, the Company will make available to
the Agent for review all non-privileged environmental
investigations, studies, audits, tests, reviews or other
analyses conducted by or that are in the possession of the
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Company or any of its Subsidiaries in relation to facts,
circumstances or conditions at or affecting any site or
facility now or previously owned, operated or leased by the
Company or any of its Subsidiaries and that could reasonably
be expected to result in a Company Material Adverse Effect.
7.14 CAPITALIZATION. The authorized capital stock of
the Company consists, on the date hereof, of an aggregate of
60,000,000 shares consisting of (i) 40,000,000 shares of common
stock, par value $0.01 per share, of which 12,500,000 shares are
duly and validly issued and outstanding, each of which shares is
fully paid and nonassessable and (ii) 20,000,000 shares of
preferred stock, par value $0.01 per share, none of which shares
is issued and outstanding. As of the date hereof all of such
issued and outstanding shares of common stock are owned
beneficially and of record by Maxus.
7.15 SUBSIDIARIES, ETC.
(a) As of the date hereof the Company has no
Subsidiaries.
(b) Set forth in Schedule III hereto is a complete and
correct list of all Investments (other than operating deposit
accounts with banks and Permitted Investments) held by the
Company or any of its Subsidiaries in any Person on the date
hereof including, without limitation, all interests of the
Company or any of its Subsidiaries in any partnership or joint
venture ("PARTNERSHIP INTERESTS") and, for each such Investment
or Partnership Interest, (x) the identity of the Person or
Persons holding such Investment or Partnership Interest (as the
case may be) and (y) the nature of such Investment or Partnership
Interest (as the case may be). Except as disclosed in Schedule
III hereto, each of the Company and its Subsidiaries owns, free
and clear of all Liens, all such Investments and such Partnership
Interests.
7.16 TITLE TO ASSETS. The Company owns or leases and
has on the date hereof good and defensible title (subject only to
Liens permitted by Section 8.06 hereof) to the material
Properties reflected as owned or leased by it in the most recent
financial statements referred to in Section 7.02 hereof
including, without limitation, the oil and natural gas assets
shown to be owned by it in the Initial Hydrocarbon Reserve
Evaluation Report and the Initial Statement of Gas Plant
Operating Income (in each case, other than Properties disposed of
in the ordinary course of business). The Company owns or leases
and has on the date hereof good and defensible title to, and
enjoys on the date hereof peaceful and undisturbed possession of,
all Properties (subject only to Liens permitted by Section 8.06
hereof) that are necessary for the operation and conduct of its
businesses.
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7.17 TRUE AND COMPLETE DISCLOSURE. The information,
reports (including, without limitation, hydrocarbon engineering
reports), financial statements, exhibits and schedules furnished
in writing by or on behalf of the Company to the Agent or any
Lender in connection with the negotiation, preparation or
delivery of this Agreement and the other Basic Documents or
included herein or therein or delivered pursuant hereto or
thereto, when taken as a whole, do not contain any untrue
statement of material fact or omit to state any material fact
necessary to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading,
provided that, in the case of projections and pro forma financial
statements, the Company represents and warrants only that the
same were prepared in good faith and on the basis of assumptions
and estimates that were reasonable as of the date as of which the
same are stated to have been prepared. All written information
furnished after the date hereof by the Company and its
Subsidiaries to the Agent and the Lenders in connection with this
Agreement and the other Basic Documents to which the Company is a
party and the transactions contemplated hereby and thereby will
be true, complete and accurate in every material respect on, or
(in the case of projections and pro forma financial statements)
will be prepared in good faith and on, the basis of reasonable
assumptions and estimates as of, the date as of which such
information is stated or certified. There is no fact known to
the Company that could reasonably be expected to have a Company
Material Adverse Effect that has not been disclosed herein, in
the other Basic Documents or in a report, financial statement,
exhibit, schedule, disclosure letter or other writing furnished
to the Lenders for use in connection with the transactions
contemplated hereby or thereby.
Section 8. COVENANTS OF THE COMPANY. The Company
covenants and agrees with the Lenders and the Agent that, so long
as any Loan is outstanding and until payment in full of all
amounts payable by the Company hereunder:
8.01 FINANCIAL STATEMENTS ETC. The Company will
deliver to Agent (and the Agent shall deliver to each of the
Lenders):
(a) as soon as available and in any event within 60
days after the end of each of the first three quarterly
fiscal periods of each fiscal year of the Company,
consolidated statements of income, retained earnings and
cash flows of the Company and its Subsidiaries for such
period and for the period from the beginning of the
respective fiscal year to the end of such period, and the
related consolidated balance sheet of the Company and its
Subsidiaries as at the end of such period, setting forth in
each case in comparative form the corresponding consolidated
figures for the corresponding periods in the preceding
fiscal year (except that, (i) in the case of balance sheets,
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such comparison shall be to the last day of the prior fiscal
year and (ii) no such comparisons shall be required prior to
the fiscal quarter ending June 30, 1996), accompanied by a
certificate of a senior financial officer of the Company,
which certificate shall state that said consolidated
financial statements fairly present the consolidated
financial condition and results of operations of the Company
and its Subsidiaries in accordance with generally accepted
accounting principles, consistently applied, as at the end
of, and for, such period (subject to normal year-end audit
adjustments);
(b) as soon as available and in any event within 105
days after the end of each fiscal year of the Company,
consolidated statements of income, retained earnings and
cash flows of the Company and its Subsidiaries for such
fiscal year and the related consolidated balance sheet of
the Company and its Subsidiaries as at the end of such
fiscal year, setting forth in each case in comparative form
the corresponding consolidated figures for the preceding
fiscal year (for each fiscal year commencing after December
31, 1995), and accompanied by an opinion thereon of
independent certified public accountants of recognized
national standing, which opinion shall state that said
consolidated financial statements fairly present the
consolidated financial condition and results of operations
of the Company and its Subsidiaries as at the end of, and
for, such fiscal year in accordance with generally accepted
accounting principles;
(c) promptly upon their becoming available, copies of
all registration statements that have become effective and
regular periodic reports, if any, that the Company shall
have filed with the Securities and Exchange Commission (or
any governmental agency substituted therefor) or any
national securities exchange;
(d) promptly upon the mailing thereof to the holders
of any publicly-traded debt securities or equity securities
of the Company generally, copies of all financial
statements, reports and proxy statements so mailed;
(e) as soon as possible, and in any event within ten
days after a Senior Officer of the Company knows or has
reason to believe that any of the events or conditions
specified below with respect to any Plan or Multiemployer
Plan has occurred or exists, a statement signed by a senior
financial officer of the Company setting forth details
respecting such event or condition and the action, if any,
that the Company or its ERISA Affiliate proposes to take
with respect thereto (and a copy of any report or notice
required to be filed with or given to the PBGC by the
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Company or an ERISA Affiliate with respect to such event or
condition):
(i) any reportable event, as defined in Section
4043(b) of ERISA and the regulations issued thereunder,
with respect to a Plan, as to which the PBGC has not by
regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the
occurrence of such event (PROVIDED that a failure to
meet the minimum funding standard of Section 412 of the
Code or Section 302 of ERISA, including, without
limitation, the failure to make on or before its due
date a required installment under Section 412(m) of the
Code or Section 302(e) of ERISA, shall be a reportable
event regardless of the issuance of any waivers in
accordance with Section 412(d) of the Code); and any
request for a waiver under Section 412(d) of the Code
for any Plan;
(ii) the distribution under Section 4041(c) of
ERISA of a notice of intent to terminate any Plan or
any action taken by the Company or an ERISA Affiliate
to terminate any Plan;
(iii) the institution by the PBGC of proceedings
under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan,
or the receipt by the Company or any ERISA Affiliate of
a notice from a Multiemployer Plan that such action has
been taken by the PBGC with respect to such
Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by the Company or any ERISA
Affiliate that results in liability under Section 4201
or 4204 of ERISA (including the obligation to satisfy
secondary liability as a result of a purchaser default)
or the receipt by the Company or any ERISA Affiliate of
notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241
or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a
fiduciary of any Multiemployer Plan against the Company
or any ERISA Affiliate to enforce Section 515 of ERISA,
which proceeding is not dismissed within 30 days; and
(vi) the adoption of an amendment to any Plan
that, pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA, would result in the loss of
tax-exempt status of the trust of which such Plan is a
part if the Company or an ERISA Affiliate fails to
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timely provide security to the Plan in accordance with
the provisions of said Sections;
(f) not later than March 1 of each calendar year
(commencing with the calendar year beginning January 1,
1996), a Hydrocarbon Reserve Evaluation Report prepared by
the Independent Petroleum Engineer with respect to the
Hydrocarbon Properties owned or leased by the Company as of
December 31 of the immediately preceding calendar year;
(g) not later than September 1 of each calendar year
(commencing with September 1, 1996), a Hydrocarbon Reserve
Evaluation Report prepared by the Company with respect to
the Hydrocarbon Properties owned or leased by the Company as
of June 30 of such calendar year;
(h) (i) not later than March 1 of each calendar year
(commencing with March 1, 1996), a Statement of Gas Plant
Operating Income for the twelve-month period ending on the
next preceding December 31 and (ii) not later than September
1 of each calendar year (commencing with September 1, 1996),
a Statement of Gas Plant Operating Income for the six-month
period ending on the next preceding June 30;
(i) within ten days after the Company or any of its
Subsidiaries receives notice of any material change in the
schedule of payment or delivery of any Production Payment to
which the Company or such Subsidiary is a party, notice of
such change, together with an explanation of the reason for
such change;
(j) promptly after a Senior Officer of the Company
knows or has reason to believe that any Default has occurred
(other than a Default that has ceased to exist), a notice of
such Default describing the same in reasonable detail and,
together with such notice or as soon thereafter as possible,
a description of the action that the Company has taken or
proposes to take with respect thereto; and
(k) from time to time such other information regarding
the Properties, financial condition, operations or business
of the Company or any of its Subsidiaries (including,
without limitation, any Plan or Multiemployer Plan and any
reports or other information required to be filed under
ERISA) as any Lender (through the Agent) or the Agent may
reasonably request.
The Company will furnish to each Lender, at the time it furnishes
each set of financial statements pursuant to paragraph (a) or (b)
above, a certificate of a senior financial officer of the Company
(i) to the effect that no Default has occurred and is continuing
(or, if any Default has occurred and is continuing, describing
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the same in reasonable detail and describing the action that the
Company has taken or proposes to take with respect thereto) and
(ii) setting forth in reasonable detail the computations
necessary to determine whether the Company is in compliance with
Sections 8.06(h), (i), (j), (p) and (q), 8.07(c), (d) and (e),
8.08(d), (e) and (f), 8.09 and 8.10 hereof as of the end of the
respective quarterly fiscal period or fiscal year.
8.02 LITIGATION. The Company will promptly give to
the Agent (and the Agent shall give to each Lender) notice of all
legal or arbitral proceedings, and of all proceedings by or
before any governmental or regulatory authority or agency, and
any material development in respect of such legal or other
proceedings, affecting the Company or any of its Subsidiaries,
except proceedings that, if adversely determined, could not
(either individually or in the aggregate) reasonably be expected
to have a Company Material Adverse Effect. Without limiting the
generality of the foregoing, the Company will give to the Agent
(and the Agent shall give to each Lender) notice of the assertion
of any Environmental Claim by any Person against, or with respect
to the activities of, the Company or any of its Subsidiaries and
notice of any alleged violation of or non-compliance with any
Environmental Laws or any permits, licenses or authorizations,
other than any Environmental Claim or alleged violation that
could not reasonably be expected to be adversely determined or,
if adversely determined, could not reasonably be expected to
(either individually or in the aggregate) have a Company Material
Adverse Effect.
8.03 EXISTENCE, ETC. The Company will, and will cause
each of its Subsidiaries to:
(a) preserve and maintain its legal existence and all
of its material rights, privileges, licenses and franchises
(PROVIDED that nothing in this Section 8.03 shall prohibit
any transaction expressly permitted under Section 8.05
hereof);
(b) comply with the requirements of all applicable
laws, rules, regulations and orders of governmental or
regulatory authorities if failure to comply with such
requirements could reasonably be expected to (either
individually or in the aggregate) have a Company Material
Adverse Effect;
(c) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its
income or profits or on any of its Property prior to the
date on which penalties attach thereto, except for any such
tax, assessment, charge or levy the payment of which is
being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained to the
extent required by GAAP;
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(d) maintain all of its material Properties used or
useful in its business in good working order and condition,
ordinary wear and tear excepted;
(e) keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP;
and
(f) permit representatives of any Lender or the Agent,
during normal business hours and at the expense of such
Lender or Agent (as the case may be), to examine, copy and
make extracts from its books and records, to inspect any of
its Properties, and to discuss its business and affairs with
its officers, all to the extent reasonably requested by such
Lender or the Agent (as the case may be).
8.04 INSURANCE. The Company will, and will cause each
of its Subsidiaries to, maintain insurance with financially sound
and reputable insurance companies, and with respect to Property
and risks of a character usually maintained by corporations
engaged in the same or similar business similarly situated,
against loss, damage and liability of the kinds and in the
amounts customarily maintained by such corporations (provided
that, to the extent customarily maintained by such corporations,
the Company and its Subsidiaries may maintain self-insurance).
8.05 PROHIBITION OF FUNDAMENTAL CHANGES. The Company
will not, nor will it permit any of its Subsidiaries to, enter
into any transaction of merger or consolidation or amalgamation,
or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution).
The Company will not, nor will it permit any of its
Subsidiaries to, acquire any business or Property from, or
capital stock of, or be a party to any acquisition of, any Person
except for purchases of inventory and other Property (including,
without limitation, operating leases) to be sold or used in the
ordinary course of business and Investments permitted under
Section 8.08 hereof.
The Company will not, nor will it permit any of its
Subsidiaries to, convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, all
or a substantial part of its business or Property, whether now
owned or hereafter acquired (including, without limitation,
receivables and leasehold interests), but excluding (i) (a)
Dispositions for fair market value as to which the Net Available
Proceeds therefrom do not exceed $2,000,000 in any fiscal year
and (b) Dispositions for fair market value as to which the Net
Available Proceeds exceed $2,000,000 (but do not exceed
$25,000,000) during any period commencing on the day following a
Determination Date and ending on the next succeeding
Determination Date (except that not more than $12,500,000 of the
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Net Available Proceeds of Dispositions permitted by this clause
(b) in any such period are derived from Dispositions that do not
constitute Like-Kind Exchanges), provided that, no later than two
Business Days following the occurrence of any such Disposition,
the Company shall deliver to the Lenders a statement, certified
by a Senior Officer of the Company, in form and detail
satisfactory to the Agent, of the amount of the Net Available
Proceeds of the Disposition and of all such prior Dispositions
during such period and shall indicate that the Company intends to
reinvest such Net Available Proceeds in Property of comparable
value (which may include Property received in consideration of
such Disposition) within 90 days of such Disposition and (ii) the
expiration of leases covering Hydrocarbon Properties in
accordance their respective terms. Notwithstanding the
foregoing, the Company may make Dispositions in addition to those
described in the immediately preceding sentence so long as the
proceeds of any such Dispositions are applied in accordance with
the penultimate paragraph of Section 2.08(d) hereof and the
Company provides the information required pursuant to Section
8.19(a) hereof.
Notwithstanding the foregoing provisions of this
Section 8.05, the Company may merge or consolidate with any other
Person (including a Wholly Owned Subsidiary of the Company) if
the surviving corporation is the Company or a Wholly Owned
Subsidiary of Maxus that is primarily engaged in the production
and exploration of or for hydrocarbon properties in the United
States of America and the Majority Lenders shall have consented
to such merger or consolidation and (ii) after giving effect
thereto no Default would exist hereunder.
8.06 LIMITATION ON LIENS. The Company will not, nor
will it permit any of its Subsidiaries to, create, incur, assume
or suffer to exist any Lien upon any of its Property, whether now
owned or hereafter acquired, except:
(a) Liens in existence on the date hereof and listed
in Part B of Schedule I hereto;
(b) Liens imposed by any governmental authority for
taxes, assessments or charges not yet due or that are being
contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the
books of the Company or the affected Subsidiaries, as the
case may be, in accordance with GAAP;
(c) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in
the ordinary course of business that are not overdue for a
period of more than 30 days or that are being contested in
good faith and by appropriate proceedings and Liens securing
judgments but only to the extent for an amount and for a
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period not resulting in an Event of Default under Section
9(h) hereof;
(d) pledges or deposits under worker's compensation,
unemployment insurance and other social security
legislation;
(e) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business;
(f) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions,
easements, licenses, restrictions on the use of Property or
minor imperfections in title thereto that, in the aggregate,
are not material in amount, and that do not in any case
materially detract from the value of the Property subject
thereto or interfere with the ordinary conduct of the
business of the Company and any of its Subsidiaries;
(g) Liens on Property of any corporation that becomes
a Subsidiary of the Company after the date hereof, PROVIDED
that such Liens are in existence at the time such
corporation becomes a Subsidiary of the Company and were not
created in anticipation thereof;
(h) Liens upon real and/or tangible personal Property
acquired after the date hereof (by purchase, construction or
otherwise) by the Company or any of its Subsidiaries, each
of which Liens either (A) existed on such Property before
the time of its acquisition and was not created in
anticipation thereof or (B) was created solely for the
purpose of securing Indebtedness representing, or incurred
to finance, refinance or refund, the cost (including the
cost of construction) of such Property; PROVIDED that (i) no
such Lien shall extend to or cover any Property of the
Company or such Subsidiary other than the Property so
acquired and improvements thereon, (ii) the principal amount
of Indebtedness secured by any such Lien shall at no time
exceed 75% of the fair market value (as determined in good
faith by a senior financial officer of the Company) of such
Property at the time it was acquired (by purchase,
construction or otherwise), (iii) the obligations of the
Company or any Subsidiary of the Company in respect of
Capital Lease Obligations under a capital lease of Property
(other than any Hydrocarbon Property) entered into in the
ordinary course of business may be secured by a Lien on the
Property subject to such capital lease and (iv) no such Lien
shall be incurred in connection with any Production Payment;
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(i) Liens under farm-in, farm-out, joint operating,
area of mutual interest or similar agreements entered into
by the Company or any of its Subsidiaries in the ordinary
course of business which such Person determines in good
faith to be necessary for or advantageous to the economic
development of its Properties; PROVIDED that no such Lien
(other than Liens under joint operating agreements, which
Liens arise in the ordinary course of business) shall be
granted upon Property in which the fair market value of the
Proved Reserves exceeds 50% of the fair market value of the
Property (as determined in good faith by a Senior Officer of
the Company);
(j) Liens created after the date hereof pursuant to
any Interest Rate Protection Agreements or Commodity Hedging
Agreements permitted under Section 8.08(e) hereof so long as
the Majority Lenders shall have consented thereto or the
aggregate "credit exposure" secured thereby (together with
Indebtedness secured by Liens permitted by clause (p) below)
shall not exceed $10,000,000 in the aggregate at any one
time outstanding (and, for purposes hereof, the "CREDIT
EXPOSURE" at any time under an Interest Rate Protection
Agreement or Commodity Hedging Agreement shall be determined
as provided in Section 8.08(e) hereof);
(k) licenses, leases or subleases granted to others in
the ordinary course of business not materially interfering
with the conduct of the business of the Company and its
Subsidiaries taken as a whole;
(l) statutory and contractual landlords' and lessors'
liens under leases to which the Company or any of its
Subsidiaries is a party;
(m) any interest or title of a lessor, sublessor,
licensee or licensor under any lease or license agreement
permitted by this Agreement;
(n) Liens in favor of a banking institution arising as
a matter of law encumbering deposits (including the right of
set-off) held by such banking institutions incurred in the
ordinary course of business and which are within the general
parameters customary in the banking industry;
(o) Liens in favor of customs and revenue authorities
arising as a matter of law to secure the payment of customs'
duties in connection with the importation of goods;
(p) additional Liens created after the date hereof
upon real and/or personal property; provided that the
outstanding aggregate principal or face amount of
Indebtedness secured thereby and by Liens permitted by
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clause (j) above and incurred after the date hereof shall
not exceed $10,000,000 any time; and
(q) any extension, renewal or replacement of the
foregoing, PROVIDED that the Liens permitted hereunder shall
not be spread to cover any additional Indebtedness or
Property (other than a substitution of like Property).
8.07 INDEBTEDNESS. The Company will not, nor will it
permit any of its Subsidiaries to, create, incur or suffer to
exist any Indebtedness except:
(a) Indebtedness hereunder and under the other Basic
Documents to the Lenders;
(b) Indebtedness outstanding on the date hereof and
listed in Part A of Schedule I hereto;
(c) Subordinated Indebtedness of the Company (other
than Affiliate Subordinated Indebtedness) incurred after the
date hereof PROVIDED that the Net Available Proceeds thereof
shall be applied by the Company to the prepayment of the
principal of the Loans as provided in Section 2.08(c)
hereof;
(d) Affiliate Subordinated Indebtedness, PROVIDED
that: (i) the maximum rate per annum of interest applicable
to any Affiliate Subordinated Indebtedness shall not exceed
the Base Rate (as in effect from time to time); (ii) the
proceeds thereof will be applied by the Company only as
follows (as specified by the Company to the Agent as
provided in clause (iii) below): (A) to replace, restore or
rebuild Gas Plant Assets in anticipation of the Company's
receipt of Casualty Proceeds in respect of a Casualty Event
(Affiliate Subordinated Indebtedness incurred for such
purposes being herein called "CASUALTY EVENT ASD"); (B) to
make Capital Expenditures in respect of Hydrocarbon
Properties or Gas Plant Assets (Affiliate Subordinated
Indebtedness incurred for such purposes being herein called
"CAPEX ASD"); and (C) to make prepayments of principal of
Loans pursuant to Section 2.08(a) hereof (Affiliate
Subordinated Indebtedness incurred for such purposes being
herein called "BORROWING BASE PREPAYMENT ASD"); (iii) the
Company specifies to the Agent, at or prior to the time any
Affiliate Subordinated Indebtedness is incurred, the
principal amount thereof, the holder or holders thereof and
whether such Affiliate Subordinated Indebtedness is Casualty
Event ASD, Capex ASD or Borrowing Base Prepayment ASD; (iv)
the holder of such Affiliate Subordinated Indebtedness shall
have executed and delivered to the Agent an Affiliate
Subordination Agreement, duly completed and executed (and
the Agent shall have received such evidence, if any, of the
due authorization, execution and delivery thereof by such
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holder, and of the legality, validity, binding effect and
enforceability thereof, as the Agent may reasonably
request); and (v) no Affiliate Subordinated Indebtedness may
be created or incurred if, after giving effect thereto, the
aggregate outstanding principal amount of all Affiliate
Subordinated Indebtedness (not including capitalized
interest thereon) would exceed an amount equal to 150% of
Tangible Net Worth; and
(e) additional Indebtedness of the Company and its
Subsidiaries (including, without limitation, Capital Lease
Obligations and other Indebtedness secured by Liens
permitted under Section 8.06(j) or (p) hereof) up to but not
exceeding $10,000,000 at any one time outstanding.
8.08 INVESTMENTS. The Company will not, nor will it
permit any of its Subsidiaries to, make or permit to remain
outstanding any Investments except:
(a) Investments outstanding on the date hereof and
identified in Part B of Schedule III hereto;
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) advances by the Company to Maxus or any of its
Subsidiaries or Affiliates (other than any Subsidiary of the
Company) in the ordinary course of business so long as (i)
each such advance shall be payable on demand and shall bear
interest (payable on demand) at a rate per annum not less
than the Base Rate (as in effect from time to time), (ii)
the aggregate amount of all such advances made by the
Company in any fiscal year shall not exceed the sum of
$30,000,000 plus the aggregate amount of all such advances
repaid to the Company during such fiscal year, (iii) at the
time of each such advance (and after giving effect thereto),
(A) the Company shall be in compliance with Section 8.10
hereof, (B) the aggregate amount of Unrestricted Cash and
Cash Equivalents shall be greater than or equal to the
aggregate amount of the principal payments and interest on
the Loans scheduled to be made during the six months
following the date of such advance and the Company shall
maintain such amount of Unrestricted Cash and Cash
Equivalents during such six month period (interest to be
calculated for this purpose on the basis of the rates at
which interest is payable on the Loans on the first date of
the Subject Month (as defined below) and (C) no Default
shall have occurred and be continuing and (iv) at the time
of each such advance the aggregate outstanding principal
amount of the Loans shall be less than or equal to the
Borrowing Base then in effect, (v) the Agent shall receive,
within 15 days following the end of each month during which
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any such advance is made (the "Subject Month"), a
certificate of a senior financial officer of the Company to
the effect set forth in the preceding clauses (i) through
(iv) with respect to the advances made during the Subject
Month and setting forth in reasonable detail the
calculations necessary to determine compliance with clauses
(ii) and (iii)(A) and (B) and (iv) above as of the end of
the Subject Month, (vi) in no event will any such advance be
made directly or indirectly with the proceeds of Affiliate
Subordinated Indebtedness and (vii) any payments required by
the Company under any tax sharing or similar agreement with
Maxus shall be set-off and applied against any such advances
made by the Company;
(e) Interest Rate Protection Agreements and Commodity
Hedging Agreements with any Lender or any affiliate thereof
or any other Person (with the consent of the Majority
Lenders), PROVIDED that, when entering into any Interest
Rate Protection Agreement or Commodity Hedging Agreement
that at the time has, or at any time in the future may give
rise to, any "credit exposure", the aggregate "credit
exposure" under all Interest Rate Protection Agreements and
Commodity Hedging Agreements (including the Interest Rate
Protection Agreement or Commodity Hedging Agreement being
entered into) shall not exceed $10,000,000 (and, for
purposes hereof, the "CREDIT EXPOSURE" at any time under an
Interest Rate Protection Agreement or Commodity Hedging
Agreement shall be determined at such time in accordance
with the standard methods of calculating credit exposure
under similar arrangements as prescribed from time to time
by the Agent, taking into account potential interest rate
movements (or commodity price movements, as the case may be)
and the respective termination provisions and notional
principal amount and term of such Interest Rate Protection
Agreement or such Commodity Hedging Agreement); and
(f) additional Investments up to but not exceeding
$10,000,000 in the aggregate.
8.09 RESTRICTED PAYMENTS. Except for payments
referred to in Section 8.15 hereof made on the Closing Date, the
Company will not, nor will it permit any of its Subsidiaries to,
declare or make any Restricted Payment at any time; PROVIDED that
the Company may at any time or from time to time after July 1,
1995 make a Restricted Payment in cash, subject to the
satisfaction of each of the following conditions on the date of
such Restricted Payment and after giving effect thereto:
(i) no Default shall have occurred and be continuing;
(ii) the aggregate amount of such Restricted Payment
and all other Restricted Payments made on and after July 1,
1995 shall not exceed an amount equal to 50% of the
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consolidated net income of the Company and its Subsidiaries
for the period commencing on July 1, 1995 and ending on the
last day of the fiscal quarter most recently ended prior to
the date of such Restricted Payment (such period to be
treated for this purpose as a single accounting period);
(iii) the Debt Coverage Ratio and the Interest Coverage
Ratio as at the last day of the fiscal quarter most recently
ended prior to the date of such Restricted Payment shall be
at least 1.25 to 1 and 1.75 to 1, respectively;
(iv) the Debt Coverage Ratio and the Interest Coverage
Ratio (in each case calculated without giving effect to the
last sentence of the definition of "Capital Expenditures")
as at the last day of the fiscal quarter most recently ended
prior to the date of such Restricted Payment shall each be
at least 1.00 to 1.00; and
(v) the Company shall have delivered to the Agent, at
least five Business Days (but not more than ten Business
Days) prior to the date of such Restricted Payment, a
certificate of a senior financial officer of the Company to
the effect that the foregoing conditions have been satisfied
(and setting forth computations in reasonable detail
demonstrating satisfaction of the conditions specified in
clauses (ii) and (iv) above and, unless the Agent has
received such computations pursuant to Section 8.01 hereof,
clause (iii) above) as at the date of such certificate.
Notwithstanding the foregoing, (a) if the conditions set forth in
clauses (i) and (iv) above have been satisfied on the date of and
after giving effect to each payment described below in this
clause (a), if any holder of Affiliate Subordinated Indebtedness
is required to pay any Tax on any capitalized interest payments
deemed to be (but not actually) received by such holder during
any period on such Affiliate Subordinated Indebtedness, the
Company may make payments to such holder in an aggregate amount
not in excess of 10% of the capitalized interest deemed to be
(but not actually) received by such holder during such period and
(b) if the condition set forth in clause (i) above is satisfied
on the date of and after giving effect to each payment described
below in this clause (b), the Company may make payments
consisting of interest on Casualty Event ASD from Casualty
Proceeds if and to the extent such Casualty Event ASD was
incurred by the Company to replace, restore or rebuild Gas Plant
Assets in anticipation of the Company's receipt of such Casualty
Proceeds.
8.10 CERTAIN FINANCIAL COVENANTS.
(a) TANGIBLE NET WORTH. The Company will not permit
Tangible Net Worth to be less than $200,000,000 PLUS (or minus)
the amount of any adjustment after June 8, 1995 in the book value
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of the assets of the Company resulting from the Merger and the
transactions contemplated thereby.
(b) DEBT COVERAGE RATIO. The Company will not permit
the Debt Coverage Ratio to be less than 1.1 to 1 as at the last
day of any fiscal quarter.
(c) INTEREST COVERAGE RATIO. The Company will not
permit the Interest Coverage Ratio to be less than 1.25 to 1 as
at the last day of any fiscal quarter.
8.11 MAINTENANCE OF CORPORATE SEPARATENESS. The
Company shall, and shall cause each of its Subsidiaries that has
any significant business activities or any significant
Indebtedness or liabilities to, satisfy customary corporate
formalities, including, without limitation, the holding of
regular board of directors' and shareholders' meetings (or the
taking of actions pursuant to written consents in lieu of such
meetings) and the maintenance of separate corporate records and
accounts.
8.12 SUBORDINATED INDEBTEDNESS. The Company will not,
nor will it permit any of its Subsidiaries to, purchase, redeem,
retire or otherwise acquire for value, or set apart any money for
a sinking, defeasance or other analogous fund for the purchase,
redemption, retirement or other acquisition of, or make any
voluntary payment or prepayment of the principal of or interest
on, or any other amount owing in respect of, any Subordinated
Indebtedness, except (subject to the subordination provisions
applicable thereto) for regularly scheduled payments or mandatory
prepayments of principal and interest in respect thereof required
pursuant to the instruments evidencing such Subordinated
Indebtedness (including, without limitation, in the case of
Affiliate Subordinated Indebtedness, payments permitted by
Section 3.02 of the related Affiliate Subordination Agreement).
8.13 LINES OF BUSINESS. The Company will not, nor
will it permit any of its Subsidiaries to, engage to any
substantial extent in any line or lines of business activity
other than the acquisition, exploration, development, production,
processing, marketing, gathering and sale of hydrocarbons in the
United States (but in no event shall the Company or any of its
Subsidiaries engage in the refining or other "downstream"
activities relating to hydrocarbon products).
8.14 TRANSACTIONS WITH AFFILIATES. Except as
expressly permitted by this Agreement, the Company will not, nor
will it permit any of its Subsidiaries to, directly or
indirectly: (a) make any Investment in an Affiliate of the
Company; (b) transfer, sell, lease, assign or otherwise dispose
of any material Property to an Affiliate of the Company; (c)
merge into or consolidate with or purchase or acquire Property
from an Affiliate of the Company; or (d) enter into any
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other transaction directly or indirectly with or for the benefit
of an Affiliate of the Company (including, without limitation,
Guarantees and assumptions of obligations of an Affiliate of the
Company); except that (1) the Company and its Subsidiaries may
enter into Intercompany Agreements with Affiliates of the Company
and make or provide or receive payments for services thereunder
in accordance with the terms thereof provided that each such
Intercompany Agreement is in substantially the form furnished to
and approved by the Agent prior to the date of this Agreement or
has been approved by the Majority Lenders (as used herein,
"INTERCOMPANY AGREEMENT" shall mean a tax or expense sharing
agreement, or any agreement providing for the provision of
services, between one or more of the Company and its Subsidiaries
and one or more Affiliates of the Company), (2) any Affiliate of
the Company who is an individual may serve as a director, officer
or employee of the Company or any of its Subsidiaries and receive
reasonable compensation for his or her services in such capacity
and (3) the Company and its Subsidiaries may enter into
transactions (other than extensions of credit by the Company or
any of its Subsidiaries to an Affiliate of the Company) providing
for the leasing of Property, the rendering or receipt of services
or the purchase or sale of inventory and other Property in the
ordinary course of business if the monetary or business
consideration arising therefrom would be substantially as
advantageous to the Company and its Subsidiaries as the monetary
or business consideration that would obtain in a comparable
transaction with a Person not an Affiliate of the Company.
8.15 USE OF PROCEEDS. The Company will use the
proceeds of the Loans hereunder solely to pay dividends to Maxus
and make other payments to Maxus in connection with the
retirement of certain Indebtedness of the Company to Maxus.
8.16 SUBSIDIARIES. Anything in this Agreement to the
contrary notwithstanding, the Company will not form or acquire
any Subsidiary without the prior consent of the Majority Lenders.
8.17 MODIFICATIONS OF CERTAIN DOCUMENTS. The Company
will not agree or consent to any modification, supplement or
waiver of any of the provisions of any agreement, instrument or
other document evidencing or relating to any Subordinated
Indebtedness or any Intercompany Agreements executed and
delivered in substantially the form furnished to and approved by
the Agent prior to the date of this Agreement or approved by the
Majority Lenders pursuant to Section 8.14 hereof, in each case
without the prior consent of the Majority Lenders.
8.18 CHANGES TO PRODUCTION PAYMENTS. The Company will
not, and will not permit any of its Subsidiaries to, voluntarily
agree or consent to any change in the delivery or payment
schedule of any Production Payment or similar agreement to which
the Company or any of its Subsidiaries is a party without the
prior consent of the Majority Lenders.
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8.19 INFORMATION WITH RESPECT TO DISPOSITIONS AND
PROPERTY ACQUISITIONS.
(a) The Company will and will cause each of its
Subsidiaries to deliver to the Agent (with sufficient copies for
each Lender) not later than 15 days (or two Business Days in the
case of a Disposition the Net Available Proceeds of which are
being applied in accordance with Section 2.08(d) hereof)
following the date of any Disposition referred to in clause (i)
of the penultimate paragraph of Section 8.05 hereof and the Net
Available Proceeds of which exceed the limitation specified in
clause (b) of said clause (i), a certificate of a Senior Officer
of the Company, in form and substance satisfactory to the Agent:
(i) describing the Property the subject of such
Disposition; and
(ii) containing the same scope and type of information
with respect to such Property as was contained in the
Statement of Gas Plant Assets or Hydrocarbon Reserve
Evaluation Report, as the case may be, delivered immediately
prior to such Disposition.
(b) The Company will and will cause each of its
Subsidiaries to deliver to the Agent (with sufficient copies for
each Lender) not later than 15 days following the date of any
acquisition of Property which the Company or any such Subsidiary
values for financial statement purposes at more than $12,500,000
(or $25,000,000 in the case of a Like-Kind Exchange) (other than
Property acquired by the Company or any such Subsidiary in the
ordinary course of business), a certificate of a Senior Officer,
in form and substance satisfactory to the Agent:
(i) describing the Property acquired; and
(ii) containing the same scope and type of information
with respect to such Property as was contained for
substantially similar Properties in the Statement of Gas
Plant Assets or Hydrocarbon Reserve Evaluation Report
delivered immediately prior to such acquisition.
Section 9. EVENTS OF DEFAULT. If one or more of the
following events (herein called "EVENTS OF DEFAULT") shall occur
and be continuing:
(a) The Company shall default in the payment when due
(whether at stated maturity or upon mandatory or optional
prepayment) of: (i) any principal of any Loan; or (ii) any
interest on any Loan or any fee or any other amount payable
by it hereunder or under any other Basic Document if not
paid within two Business Days of the date that the same
shall become due; or
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(b) The Company or any of its Subsidiaries shall
default in the payment when due of any principal of or
interest on any of its other Indebtedness aggregating
$5,000,000 or more, or in the payment when due of any amount
under any Interest Rate Protection Agreement or Commodity
Hedging Agreement for a notional principal amount exceeding
$2,000,000; or any event specified in any note, agreement,
indenture or other document evidencing or relating to any
such Indebtedness or any event specified in any Interest
Rate Protection Agreement or Commodity Hedging Agreement
shall occur if the effect of such event is to cause, or
(with the giving of any notice or the lapse of time or both)
to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to
cause, such Indebtedness to become due, or to be prepaid in
full (whether by redemption, purchase, offer to purchase or
otherwise), prior to its stated maturity or to have the
interest rate thereon reset to a level so that securities
evidencing such Indebtedness trade at a level specified in
relation to the par value thereof or, in the case of an
Interest Rate Protection Agreement or Commodity Hedging
Agreement, to permit the payments owing under such Interest
Rate Protection Agreement or Commodity Hedging Agreement to
be liquidated; or
(c) Any representation, warranty or certification made
or deemed made herein or in any other Basic Document (or in
any modification or supplement hereto or thereto) by or on
behalf of any Obligor, or any certificate furnished to any
Lender or the Agent pursuant to the provisions hereof or
thereof, shall prove to have been false or misleading as of
the time made or furnished in any material respect; or
(d) The Company shall default in the performance of
any of its obligations under any of Section 8.01(j), 8.05,
8.06, 8.07, 8.08, 8.09, 8.10, 8.12, 8.14, 8.15, 8.17 or 8.18
hereof; or the Company shall default in the performance of
any of its other obligations in this Agreement or any other
Basic Document and such default shall continue unremedied
for a period of 30 or more days after notice thereof to the
Company by the Agent or any Lender (through the Agent); or
(e) The Company or any of its Subsidiaries shall admit
in writing its inability to, or be generally unable to, pay
its debts as such debts become due; or
(f) The Company or any of its Subsidiaries shall (i)
apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, examiner or
liquidator of itself or of all or a substantial part of its
Property, (ii) make a general assignment for the benefit of
its creditors, (iii) commence a voluntary case under the
Bankruptcy Code, (iv) file a petition seeking to
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take advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code
or (vi) take any corporate action for the purpose of
effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without
the application or consent of the Company or any of its
Subsidiaries, in any court of competent jurisdiction,
seeking (i) its reorganization, liquidation, dissolution,
arrangement or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a
receiver, custodian, trustee, examiner, liquidator or the
like of the Company or such Subsidiary or of all or any
substantial part of its Property or (iii) similar relief in
respect of the Company or such Subsidiary under any law
relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in
effect, for a period of 60 or more days; or an order for
relief against the Company or such Subsidiary shall be
entered in an involuntary case under the Bankruptcy Code; or
(h) A final judgment or order for the payment of money
shall be entered against the Company or any of its
Subsidiaries (i) which, within 30 days after the entry
thereof, has not been discharged or execution thereof has
not been stayed pending appeal or as to which any
enforcement proceeding shall have been commenced (and not
stayed) by any creditor thereon and (ii) the aggregate
amount of all such final judgments or orders meeting the
criteria set forth in clause (i) exceeds $5,000,000 (net of
insurance coverage as to which the insurer has acknowledged
coverage); or
(i) An event or condition specified in Section 8.01(e)
hereof shall occur or exist with respect to any Plan or
Multiemployer Plan and, as a result of such event or
condition, together with all other such events or
conditions, the Company or any ERISA Affiliate shall incur
or in the opinion of the Majority Lenders shall be
reasonably likely to incur a liability to a Plan, a
Multiemployer Plan or the PBGC (or any combination of the
foregoing) that, in the determination of the Majority
Lenders, could reasonably be expected to (either
individually or in the aggregate) have a Company Material
Adverse Effect (insofar as such liability is payable by the
Company or any of its Subsidiaries but after deducting any
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portion thereof that is reasonably expected to be paid by
other creditworthy Persons liable therefor); or
(j) There shall have been asserted against the Company
or any of its Subsidiaries one or more Environmental Claims
that could reasonably be expected to be determined adversely
to the Company or any of its Subsidiaries, and, if adversely
determined, could reasonably be expected to result in
liability on the part of the Company and its Subsidiaries
(insofar as such amount is payable by the Company or any of
its Subsidiaries but after deducting any portion thereof
that is reasonably expected to be paid by other creditworthy
Persons jointly and severally liable therefore) (such
Environmental Claims being herein called the "SUBJECT
ENVIRONMENTAL CLAIMS") and the aggregate amount that could
reasonably be expected to be payable by the Company and its
Subsidiaries in respect of the Subject Environmental Claims
(after giving effect to such deductions) exceeds (i)
$8,000,000 in any fiscal year of the Company, (ii)
$35,000,000 during the period commencing on the date hereof
and ending on the last Principal Payment Date or (iii)
$100,000,000 on or after the date hereof; or
(k) All of the outstanding shares of capital stock of
the Company (other than directors' qualifying shares, if
any) shall cease to be owned, directly or indirectly, by
Maxus or YPF or any of such shares shall be owned, directly
or indirectly, by an entity (other than Maxus or YPF) which
is not incorporated or organized under the laws of a state
of the United States of America and the business of which
does not consist solely of making and holding investments in
Subsidiaries of YPF; or
(l) Any event set forth in Schedule V hereto shall
occur;
THEREUPON: (1) in the case of an Event of Default other than one
referred to in clause (f) or (g) of this Section 9 with respect
to the Company, the Agent may and, upon request of the Majority
Lenders, will, by notice to the Company, declare the principal
amount then outstanding of, and the accrued interest on, the
Loans and all other amounts payable by the Company hereunder and
under the Notes (including, without limitation, any amounts
payable under Section 5.05 hereof) to be forthwith due and
payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest or other formalities
of any kind, all of which are hereby expressly waived by the
Company; and (2) in the case of the occurrence of an Event of
Default referred to in clause (f) or (g) of this Section 9 with
respect to the Company, the principal amount then outstanding of,
and the accrued interest on, the Loans and all other amounts
payable by the Company hereunder and under the Notes (including,
without limitation, any amounts payable under Section 5.05
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hereof) shall automatically become immediately due and payable
without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by the Company.
Section 10. THE AGENT.
10.01 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender
hereby appoints and authorizes the Agent to act as its agent
hereunder and under the other Basic Documents any Affiliate
Subordination Agreement providing for the subordination of
Affiliate Subordinated Indebtedness with such powers as are
specifically delegated to the Agent by the terms of this
Agreement and of the other Basic Documents, together with such
other powers as are reasonably incidental thereto. The Agent
(which term as used in this sentence and in Section 10.05 and the
first sentence of Section 10.06 hereof shall include reference to
its affiliates and its own and its affiliates' officers,
directors, employees and agents):
(a) shall have no duties or responsibilities except
those expressly set forth in this Agreement and in the other
Basic Documents, and shall not by reason of this Agreement
or any other Basic Document be a trustee for any Lender;
(b) shall not be responsible to the Lenders for any
recitals, statements, representations or warranties
contained in this Agreement or in any other Basic Document,
or in any certificate or other document referred to or
provided for in, or received by any of them under, this
Agreement or any other Basic Document, in each case made or
furnished by any other Person, or for the value, validity,
effectiveness (other than its own due execution and
delivery), genuineness, enforceability or sufficiency of
this Agreement, any Note or any other Basic Document or any
other document referred to or provided for herein or therein
or for any failure by the Company or any other Person to
perform any of its obligations hereunder or thereunder; and
(c) shall not be responsible for any action taken or
omitted to be taken by it hereunder or under any other Basic
Document or under any other document or instrument referred
to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence
or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such
agents or attorneys-in-fact selected by it in good faith. The
Agent may deem and treat the payee of a Note as the holder
thereof for all purposes hereof unless and until a notice of the
assignment or transfer thereof shall have been filed with the
Agent, together with the consent of the Company to such
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assignment or transfer (to the extent provided in Section
11.06(b) hereof).
10.02 RELIANCE BY AGENT. The Agent shall be entitled
to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone,
telecopy, telegram or cable) in good faith believed by it to be
genuine and correct and to have been signed or sent by or on
behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other
experts selected by the Agent. As to any matters not expressly
provided for by this Agreement or any other Basic Document, the
Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance
with instructions given by the Majority Lenders, and such
instructions of the Majority Lenders and any action taken or
failure to act pursuant thereto shall be binding on all of the
Lenders.
10.03 DEFAULTS. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the
Agent has received notice from a Lender or the Company specifying
such Default and stating that such notice is a "Notice of
Default". In the event that the Agent receives such a notice of
the occurrence of a Default, the Agent shall give prompt notice
thereof to the Lenders. The Agent shall (subject to Section
10.07 hereof) take such action with respect to such Default as
shall be directed by the Majority Lenders, PROVIDED that, unless
and until the Agent shall have received such directions, the
Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as
it shall deem advisable in the best interest of the Lenders
except to the extent that this Agreement expressly requires that
such action be taken, or not be taken, only with the consent or
upon the authorization of the Majority Lenders or all of the
Lenders.
10.04 RIGHTS AS A LENDER. With respect to its
Commitment and the Loans made by it, Chase (and any successor
acting as Agent) in its capacity as a Lender hereunder shall have
the same rights and powers hereunder as any other Lender and may
exercise the same as though it were not acting as the Agent, and
the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Agent in its individual
capacity. Chase (and any successor acting as Agent) and its
affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to, make investments in and
generally engage in any kind of banking, trust or other business
with the Company, YPF, Maxus and their respective Subsidiaries or
Affiliates as if it were not acting as the Agent, and Chase (and
any such successor) and its affiliates may accept fees and other
consideration from any such Person for services in connection
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with this Agreement or otherwise without having to account for
the same to the Lenders.
10.05 INDEMNIFICATION. The Lenders agree to indemnify
the Agent (to the extent not reimbursed under Section 11.03
hereof, but without limiting the obligations of the Company under
said Section 11.03) ratably in accordance with the aggregate
principal amount of the Loans held by the Lenders (or, if no
Loans are at the time outstanding, ratably in accordance with
their respective Commitments), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted
against the Agent (including by any Lender) arising out of or by
reason of any investigation in or in any way relating to or
arising out of this Agreement or any other Basic Document or any
other documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby (including,
without limitation, the costs and expenses that the Company is
obligated to pay under Section 11.03 hereof but excluding, unless
a Default has occurred and is continuing, normal administrative
costs and expenses incident to the performance of its agency
duties hereunder) or the enforcement of any of the terms hereof
or thereof or of any such other documents, PROVIDED that no
Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the
party to be indemnified.
10.06 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each
Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit
analysis of the Company and its Subsidiaries (and YPF and Maxus
and their respective Subsidiaries,) and decision to enter into
this Agreement and that it will, independently and without
reliance upon the Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking
or not taking action under this Agreement or under any other
Basic Document. The Agent shall not be required to keep itself
informed as to the performance or observance by the Company of
this Agreement or any of the other Basic Documents or any other
document referred to or provided for herein or therein or to
inspect the Properties or books of the Company, YPF, Maxus or
their respective Subsidiaries. Except for notices, reports and
other documents and information expressly required to be
furnished to the Lenders by the Agent hereunder or under the
other Basic Documents, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or
business of the Company, YPF, Maxus or their respective
Subsidiaries (or any of their affiliates) that may come into the
possession of the Agent or any of its affiliates.
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10.07 FAILURE TO ACT. Except for action expressly
required of the Agent hereunder and under the other Basic
Documents, the Agent shall in all cases be fully justified in
failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction from the
Lenders of their indemnification obligations under Section 10.05
hereof against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such
action and the Agent may consult with counsel and the advice of
counsel shall be full and complete authorization and protection
in respect of any action taken or omitted by it hereunder or
under any of the other Basic Documents.
10.08 RESIGNATION OR REMOVAL OF AGENT. Subject to the
appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving notice thereof
to the Lenders and the Company, and the Agent may be removed at
any time with or without cause by the Majority Lenders with
(unless an Event of Default has occurred and is continuing) the
approval of the Company (such approval not to be unreasonably
withheld). Upon any such resignation or removal, the Majority
Lenders shall have the right to appoint a successor Agent with
(unless an Event of Default has occurred and is continuing) the
approval of the Company (such approval not to be unreasonably
withheld). If no successor Agent shall have been so appointed by
the Majority Lenders and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring
Agent, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent with (unless an Event of Default has
occurred and is continuing) the approval of the Company (such
approval not to be unreasonably withheld), that shall be a bank
that has an office in New York, New York with a combined capital
and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges 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 or removal hereunder as Agent, the provisions of this
Section 10 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was
acting as the Agent.
10.09 CONSENTS UNDER OTHER BASIC DOCUMENTS. Except as
otherwise provided in Section 11.04 hereof with respect to this
Agreement, the Agent may, with the prior consent of the Majority
Lenders (but not otherwise), consent to any modification,
supplement or waiver under any of the Basic Documents PROVIDED
that, without the prior consent of all of the Lenders, the Agent
shall not release either YPF or Maxus from its obligations under
the YPF Guarantee Agreement or the Maxus Guarantee Agreement, as
the case may be.
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Section 11. MISCELLANEOUS.
11.01 WAIVER. No failure on the part of the Agent or
any Lender to exercise and no delay in exercising, and no course
of dealing with respect to, any right, power or privilege under
this Agreement or any Note shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or
privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
11.02 NOTICES. All notices, requests and other
communications provided for herein (including, without
limitation, any modifications of, or waivers, requests or
consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof); or, as to any party, at
such other address as shall be designated by such party in a
notice to each other party. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered
or, in the case of a mailed notice, upon receipt, in each case
given or addressed as aforesaid.
11.03 EXPENSES, ETC. The Company agrees to pay or
reimburse each of the Lenders and the Agent for (without
duplication): (a) all reasonable out-of-pocket costs and expenses
of the Agent (including, without limitation, the reasonable fees
and expenses of Milbank, Tweed, Hadley & McCloy ("MILBANK"),
special New York counsel to Chase, and Perez Alati, Grondona,
Benites, Arntsen & Martinez de Hoz (h), special Argentine counsel
to Chase) in connection with (i) the negotiation, preparation,
execution and delivery of this Agreement and the other Basic
Documents and the making and syndication of the Loans hereunder
and related matters (provided that such fees and expenses of
Milbank do not exceed the budgeted amounts indicated by Milbank,
without the prior approval of YPF) and (ii) the negotiation or
preparation of any modification, supplement or waiver of any of
the terms of this Agreement or any of the other Basic Documents
or any Affiliate Subordination Agreement (whether or not
consummated); (b) all reasonable out-of-pocket costs and expenses
of the Lenders and the Agent (including, without limitation, the
reasonable fees and expenses of legal counsel) in connection with
(i) any Event of Default and any enforcement or collection
proceedings resulting therefrom, including, without limitation,
all manner of participation in or other involvement with (x)
bankruptcy, insolvency, receivership, foreclosure, winding up or
liquidation proceedings, (y) judicial or regulatory proceedings
and (z) workout, restructuring or other negotiations or
proceedings (whether or not the workout, restructuring or
transaction contemplated thereby is consummated) and (ii) the
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enforcement of this Section 11.03, and (c) with duplication of
any amounts payable by the Company under Section 5.06 hereof, all
transfer, stamp, documentary or other similar taxes, assessments
or charges levied by any governmental or revenue authority in
respect of this Agreement or any of the other Basic Documents or
any other document referred to herein or therein.
The Company hereby agrees to indemnify the Agent and
each Lender and their respective directors, officers, employees,
attorneys and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims, damages or
expenses incurred by any of them (including, without limitation,
any and all losses, liabilities, claims, damages or expenses
incurred by the Agent to any Lender), whether or not the Agent or
any Lender is a party thereto arising out of or by reason of any
investigation or litigation or other proceedings (including any
threatened investigation or litigation or other proceedings)
relating to the Loans hereunder or any of the other transactions
contemplated hereby or any actual or proposed use by the Company
or any of its Subsidiaries of the proceeds of any of the Loans
hereunder, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such
investigation or litigation or other proceedings (but excluding
any such losses, liabilities, claims, damages or expenses
incurred by reason of the gross negligence or willful misconduct
of the Person to be indemnified or actions ("ILLEGAL ACTIONS") by
such Person which such Person knew or reasonably should have
known were illegal. Without limiting the generality of the
foregoing, the Company will indemnify the Agent and each Lender
from, and hold the Agent and each Lender harmless against, any
losses, liabilities, claims, damages or expenses described in the
preceding sentence (but excluding, as provided in the preceding
sentence, any loss, liability, claim, damage or expense incurred
by reason of the gross negligence, willful misconduct or Illegal
Actions of the Person to be indemnified) arising under any
Environmental Law as a result of the past, present or future
operations of the Company or any of its Subsidiaries (or any
predecessor in interest to the Company or any of its
Subsidiaries), or the past, present or future condition of any
site or facility owned, operated or leased at any time by the
Company or any of its Subsidiaries (or any such predecessor in
interest), or any Release or threatened Release of any
Environmental Material at or from any such site or facility,
including any such Release or threatened Release that shall occur
during any period when the Agent or any Lender shall be in
possession of any such site or facility following the exercise by
the Agent or any Lender of any of its rights and remedies
hereunder to the extent that such Release is caused by the Agent
or the Lenders.
11.04 AMENDMENTS, ETC. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may
be modified or supplemented only by an instrument in writing
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signed by the Company, the Agent and the Majority Lenders, or by
the Company and the Agent acting with the consent of the Majority
Lenders, and any provision of this Agreement may be waived by the
Majority Lenders or by the Agent acting with the consent of the
Majority Lenders; PROVIDED that: (a) no modification, supplement
or waiver shall, unless by an instrument signed by all of the
Lenders or by the Agent acting with the consent of all of the
Lenders: (i) increase, or extend the term of the Commitments, or
extend the time or waive any requirement for the reduction or
termination of the Commitments, (ii) extend the date fixed for
the payment of principal of or interest on any Loan or any fee
hereunder, (iii) reduce or forgive the amount of any such payment
of principal, (iv) reduce the rate at which interest is payable
thereon or any fee is payable hereunder, (v) alter the rights or
obligations of the Company to prepay Loans, (vi) alter the terms
of this Section 11.04, (vii) modify the definition of the term
"Majority Lenders" or modify in any other manner the number or
percentage of the Lenders required to make any determinations or
waive any rights hereunder or to modify any provision hereof, or
(viii) waive any of the conditions precedent set forth in Section
6 hereof; (b) any modification or supplement of Section 10 hereof
shall require the consent of the Agent and (c) any waiver of any
provision of this Agreement that adversely affects the Company
shall require the consent of the Company.
11.05 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
11.06 ASSIGNMENTS AND PARTICIPATIONS.
(a) The Company may not assign any of its rights or
obligations hereunder or under the Notes without the prior
consent of all of the Lenders and the Agent.
(b) Each Lender may (and each Lender shall, if
requested pursuant to Section 5.07 hereof) assign any of its
Loans and its Note with the consent, so long as no Event of
Default shall have occurred and be continuing, of the Company
(such consent not to be unreasonably withheld or delayed);
PROVIDED that
(i) no such consent by the Company shall be required
in the case of any assignment to another Lender;
(ii) except to the extent the Agent and the Company
shall otherwise consent, any such partial assignment (other
than to another Lender) shall be in an amount at least equal
to $5,000,000;
(iii) each such assignment by a Lender of its Loans or
Note shall be made in such manner so that the same portion
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of its Loans and Note is assigned to the respective
assignee; and
(iv) upon each such assignment, the assignor and
assignee shall deliver to the Company and the Agent a Notice
of Assignment in the form of Exhibit F hereto.
Upon execution and delivery by the assignor and the assignee to
and the Agent of such Notice of Assignment, and upon consent
thereto by the Agent and the Company to the extent required
above, the assignee shall have, to the extent of such assignment
(unless otherwise consented to by the Agent and the Company), the
obligations, rights and benefits of a Lender hereunder holding
and Loans (or portions thereof) assigned to it and specified in
such Notice of Assignment (in addition to the Loans, if any,
theretofore held by such assignee). Unless otherwise agreed by
the Agent, upon each such assignment the assigning Lender shall
pay the Agent an assignment fee of $3,000.
(c) A Lender may sell or agree to sell to one or more
other Persons a participation in all or any part of any Loans
held by it, in which event each purchaser of a participation (a
"PARTICIPANT") shall be entitled to the rights and benefits of
the provisions of Section 8.01(k) hereof with respect to its
participation in such Loans as if (and the Company shall be
directly obligated to such Participant under such provisions as
if) such Participant were a "Lender" for purposes of said
Section, but, shall not have any other rights or benefits under
this Agreement or any Note or any other Basic Document (the
Participant's rights against such Lender in respect of such
participation to be those set forth in the agreements executed by
such Lender in favor of the Participant). All amounts payable by
the Company to any Lender under Section 5 hereof and Section
11.03 hereof in respect of Loans held by it, shall be determined
as if such Lender had not sold or agreed to sell any
participations in such Loans, and as if such Lender were funding
each of such Loan in the same way that it is funding the portion
of such Loan and Commitment in which no participations have been
sold. In no event shall a Lender that sells a participation
agree with the Participant to take or refrain from taking any
action hereunder or under any other Basic Document except that
such Lender may agree with the Participant that it will not,
without the consent of the Participant, agree to (i) extend the
date fixed for the payment of principal of or interest on the
related Loan or Loans or any portion of any fee hereunder payable
to the Participant, (ii) reduce the amount of any such payment of
principal, (iii) reduce the rate at which interest is payable
thereon, or any fee hereunder payable to the Participant, to a
level below the rate at which the Participant is entitled to
receive such interest or fee, (iv) alter the rights or
obligations of the Company to prepay the related Loans or (v)
consent to any modification, supplement or waiver hereof or of
any of the other Basic Documents to the extent that the same,
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under Section 10.09 or 11.04 hereof, requires the consent of each
Lender.
(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 11.06,
any Lender may (without notice to or the consent of the Company,
the Agent or any other Lender and without payment of any fee) (i)
assign and pledge all or any portion of its Loan and its Note to
any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal
Reserve Bank and (ii) assign all or any portion of its rights
under this Agreement and its Loan and its Note to an affiliate.
No such assignment shall release the assigning Lender from its
obligations hereunder.
(e) A Lender may furnish any information concerning
the Company, YPF, Maxus or any of their respective Subsidiaries
in the possession of such Lender from time to time to assignees
and participants (including prospective assignees and
participants), subject, however, to the provisions of Section
11.12 hereof.
(f) Anything in this Section 11.06 to the contrary
notwithstanding, no Lender may assign or participate any interest
in any Loan held by it hereunder to the Company or any of its
Affiliates or Subsidiaries without the prior consent of each
Lender.
11.07 SURVIVAL. The obligations of the Company under
Sections 5.01, 5.05, 5.06 and 11.03 hereof, and the obligations
of the Lenders under Sections 10.05 and 11.12 hereof, shall
survive the repayment of the Loans and the termination of the
Commitments and, in the case of any Lender that may assign any
interest in its Loans hereunder, shall survive the making of such
assignment, notwithstanding that such assigning Lender may cease
to be a "Lender" hereunder; provided that all such obligations
shall survive the repayment of the Loans only for a period of two
years (five years in the case of said Section 5.06) except if and
to the extent any liability is asserted by the Company, the Agent
or any of the Lenders under any of such Sections within such two-
year (or, in the case of said Section 5.06, five-year) period.
In addition, each representation and warranty made, or deemed to
be made by a notice of any Loan, herein or pursuant hereto shall
survive the making of such representation and warranty, and no
Lender shall be deemed to have waived, by reason of making any
Loan, any Default that may arise by reason of such representation
or warranty proving to have been false or misleading,
notwithstanding that such Lender or the Agent may have had notice
or knowledge or reason to believe that such representation or
warranty was false or misleading at the time such Loan was made.
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11.08 CAPTIONS. The table of contents and captions
and section headings appearing herein are included solely for
convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
11.09 COUNTERPARTS. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement and the Notes shall be governed by, and construed in
accordance with, the law of the State of New York. The Company
hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and
of the Supreme Court of the State of New York sitting in New York
County (including its Appellate Division), and of any other
appellate court in the State of New York, for the purposes of all
legal proceedings arising out of or relating to this Agreement or
the transactions contemplated hereby. The Company hereby
irrevocably waives, to the fullest extent permitted by applicable
law, any objection that 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.
11.11 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE
AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.12 TREATMENT OF CERTAIN INFORMATION;
CONFIDENTIALITY. Each Lender and the Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees
and representatives) with each of the Company, Maxus and YPF to
use its best efforts to keep confidential and not to disclose any
non-public information supplied to it by the Company, Maxus or
YPF pursuant to this Agreement or any of the other Basic
Documents that is identified by the Company, Maxus or YPF as
being confidential at the time the same is delivered to the
Lenders or the Agent, PROVIDED that nothing herein shall limit
the disclosure of any such information (i) to the extent required
by statute, rule, regulation or judicial process, (ii) to counsel
for any of the Lenders or the Agent, (iii) to bank examiners,
auditors or accountants, (iv) to the Agent or any other Lender
(or to Chase Securities, Inc., Chase Investment Bank, Ltd., and
Chase Manhattan Asia Limited), (v) in connection with any
litigation relating to any of the Basic Documents or the
transactions contemplated thereby to which any one or more of the
Lenders or the Agent is a party, (vi) to a subsidiary or
affiliate of such Lender in connection with the administration,
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management or booking of any Loans or (vii) to any assignee or
participant (or prospective assignee or participant) so long as
such assignee or participant (or prospective assignee or
participant) first executes and delivers to the respective Lender
a Confidentiality Agreement substantially in the form of Exhibit
E hereto (or executes and delivers to such Lender an
acknowledgement to the effect that it is bound by the provisions
of this Section 11.12, which acknowledgement may be included as
part of the respective assignment or participation agreement
pursuant to which such assignee or participant acquires an
interest in the Loans hereunder). The obligations of each Lender
under this Section 11.12 shall supersede and replace the
obligations of such Lender under any confidentiality letter in
respect of this financing signed and delivered by such Lender to
the Company, Maxus or YPF prior to the date hereof; in addition,
the obligations of any assignee that has executed a
Confidentiality Agreement in the form of Exhibit E hereto shall
be superseded by this Section 11.12 upon the date upon which such
assignee becomes a Lender hereunder pursuant to Section 11.06(b)
hereof.
CREDIT AGREEMENT
<PAGE>
- 87 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and
year first above written.
MIDGARD ENERGY COMPANY
By_________________________
Title:
Address for Notices:
Midgard Energy Company
717 North Harwood Street
Dallas, TX 75201
Attention: Mark J. Gentry
Telecopier No.: 214-953-2901
Telephone No.: 214-953-2000
with copies to:
Maxus Energy Corporation
717 North Harwood Street
Dallas, TX 75201
Attention: Mark J. Gentry
Telecopier No.: 214-953-2901
YPF Sociedad Anonima
Aveneda Pte. Rogue Saenz Pena 777
Buenos Aires 1364
Argentina
Attention: Carlos Felices
Telecopier No.: 54-1-329-2113
CREDIT AGREEMENT
<PAGE>
- 88 -
LENDERS
-------
Commitment THE CHASE MANHATTAN BANK
- ---------- (NATIONAL ASSOCIATION)
$23,000,000.00
By_________________________
Title:
Lending Office for all Loans:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, NY 10081
Address for Notices:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, NY 10081
Attention: Ian Schottlaender
Managing Director
Telecopier No.: 212-552-1687
Telephone No.: 212-552-5874
CREDIT AGREEMENT
<PAGE>
- 89 -
Commitment BANK OF MONTREAL
- ----------
$12,000,000.00
By_________________________
Title:
Lending Office for all Loans:
Bank of Montreal
700 Louisiana, Suite 4400
Houston, TX 77002
Address for Notices:
Bank of Montreal
700 Louisiana, Suite 4400
Houston, TX 77002
Attention: Mike Stuckey
Telecopier No.: 713-546-1845
Telephone No.: 713-546-9744
CREDIT AGREEMENT
<PAGE>
- 90 -
Commitment THE BANK OF NOVA SCOTIA
- ----------
$12,000,000.00
By_________________________
Title:
Lending Office for all Loans:
The Bank of Nova Scotia
Atlanta Agency
600 Peachtree Street N.E.
Suite 2700
Atlanta, GA 30308
Address for Notices:
The Bank of Nova Scotia
Atlanta Agency
600 Peachtree Street N.E.
Suite 2700
Atlanta, GA 30308
Attention: F.C.H. Ashby
Telecopier No.: 404-888-8998
Telephone No.: 404-877-1500
With a copy to:
The Bank of Nova Scotia
Houston Representative Office
1100 Louisiana
Suite 3000
Houston, TX 77002
Telecopier No.: 713-752-2425
Telephone No.: 713-752-0900
CREDIT AGREEMENT
<PAGE>
- 91 -
Commitment BANK OF SCOTLAND
- ----------
$12,000,000.00
By_________________________
Title:
Lending Office for all Loans:
Bank of Scotland
565 Fifth Avenue
New York, NY 10017
Address for Notices:
Bank of Scotland
565 Fifth Avenue
New York, NY 10017
Attention: Loan Administration
Telecopier No.: 212-450-0872
Telephone No.: 212-557-9460
CREDIT AGREEMENT
<PAGE>
- 92 -
Commitment BANK ONE, TEXAS, N.A.
- ----------
$12,000,000.00
By_________________________
Title:
Lending Office for all Loans:
Bank One, Texas, N.A.
1717 Main Street
4th Floor
Dallas, TX 75201
Address for Notices:
Bank One, Texas,
National Association
1717 Main Street
4th Floor
Dallas, TX 75201
Attention: Nancy Daniel - LCSR
Telecopier No.: 214-290-5226
Telephone No.: 214-290-2652
CREDIT AGREEMENT
<PAGE>
- 93 -
Commitment BANQUE FRANCAISE DU COMMERCE
- ---------- EXTERIEUR
$12,000,000.00
By_________________________
Title:
By_________________________
Title:
Lending Office for all Loans:
Banque Francaise du Commerce
Exterieur
Southwest Representative Office
333 Clay Street, Suite 4340
Houston, TX 77002
Address for Notices:
Banque Francaise du Commerce
Exterieur
Southwest Representative Office
333 Clay Street, Suite 4340
Houston, TX 77002
Attention: Tanya McAllister,
Administrative
Assistant
Telecopier No.: 713-759-9908
Telephone No.: 713-759-9401
With a copy to:
Banque Francaise du Commerce
Exterieur
645 Fifth Avenue
20th Floor
New York, NY 10022
Attention: Joan Rankine
Telecopier No.: 212-872-5045
Telephone No.: 212-872-5000
CREDIT AGREEMENT
<PAGE>
- 94 -
Commitment BANQUE PARIBAS - HOUSTON AGENCY
- ----------
$17,000,000.00
By_________________________
Title:
By_________________________
Title:
Lending Office for all Loans:
Banque Paribas
1200 Smith, Suite 3100
Houston, TX 77002
Address for Notices:
Banque Paribas
1200 Smith, Suite 3100
Houston, TX 77002
Attention: Bart Schouest
Telecopier No.: 713-659-3832
Telephone No.: 713-659-4811
CREDIT AGREEMENT
<PAGE>
- 95 -
Commitment BARCLAYS BANK PLC
- ----------
$17,000,000.00
By_________________________
Title:
Lending Office for all Loans:
Barclays Bank plc
222 Broadway
12th Floor
New York, NY 10038
Address for Notices:
Barclays Bank plc
222 Broadway
12th Floor
New York, NY 10038
Attention: Client Services Unit
Telecopier No.: 212-412-4090
Telephone No.: 212-412-1406
CREDIT AGREEMENT
<PAGE>
- 96 -
Commitment CIBC, INC.
- ----------
$17,000,000.00
By_________________________
Title:
Lending Office for all Loans:
CIBC, Inc.
2 Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, GA 30339
Address for Notices:
CIBC, Inc.
2 Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, GA 30339
Attention: Adrienne Burch
Telecopier No.: 404-319-4835
Telephone No.: 404-319-4950
CREDIT AGREEMENT
<PAGE>
- 97 -
Commitment CHRISTIANIA BANK NEW YORK BRANCH
- ----------
$17,000,000.00
By______________________________
Title:
Lending Office for all Loans:
Christiania Bank
New York Branch
11 West 42nd Street
7th Floor
New York, NY 10036
Address for Notices:
Christiania Bank
New York Branch
11 West 42nd Street
7th Floor
New York, NY 10036
Attention: John Thieroff
Telecopier No.: 212-827-4888
Telephone No.: 212-827-4813
CREDIT AGREEMENT
<PAGE>
- 98 -
Commitment CREDIT LYONNAIS CAYMAN ISLAND
- ---------- BRANCH
$17,000,000.00
By___________________________
Title:
Lending Office for all Loans:
Credit Lyonnais Cayman Island
Branch
1301 Avenue of the Americas
New York, NY 10019
Address for Notices:
Credit Lyonnais
Houston Representative Office
1000 Louisiana
Suite 5360
Houston, TX 77002
Attention: Bernadette Archie
Telecopier No.: 713-751-0307
Telephone No.: 713-751-0500
CREDIT AGREEMENT
<PAGE>
- 99 -
Commitment THE FUJI BANK, LTD.
- ----------
$12,000,000.00
By_________________________
Title:
Lending Office for all Loans:
The Fuji Bank, Ltd.
1221 McKinney Street
Suite 4100
Houston, TX 77010
Address for Notices:
The Fuji Bank, Ltd.
1221 McKinney Street
Suite 4100
Houston, TX 77010
Attention: Loan Administration
Telecopier No.: 713-759-0048
Telephone No.: 713-650-7868
CREDIT AGREEMENT
<PAGE>
- 100 -
Commitment THE LONG-TERM CREDIT BANK OF JAPAN,
- ---------- LIMITED
$17,000,000.00
By________________________________
Title:
Lending Office for all Loans:
The Long-Term Credit Bank of Japan,
Limited
165 Broadway
New York, NY 10006
Address for Notices:
The Long-Term Credit Bank of Japan,
Limited
165 Broadway
New York, NY 10006
Attention: LTCB New York Branch
Operations
Telecopier No.: 212-608-3452
Telephone No.: 212-335-4801
CREDIT AGREEMENT
<PAGE>
- 101 -
Commitment ROYAL BANK OF CANADA
- ----------
$12,000,000.00
By_________________________
Title:
Lending Office for all Loans:
Royal Bank of Canada
1 Financial Square, 24th Floor
New York, NY 10005-3531
Address for Notices:
Royal Bank of Canada
1 Financial Square, 24th Floor
New York, NY 10005-3531
Attention: Jewel Haines,
Assistant Manager
Telecopier No.: 212-428-2372
Telephone No.: 212-428-6321
CREDIT AGREEMENT
<PAGE>
- 102 -
Commitment SOCIETE GENERALE, SOUTHWEST AGENCY
- ----------
$12,000,000.00
By________________________________
Title:
Lending Office for all Loans:
Societe Generale, Southwest Agency
2001 Ross Avenue
Suite 4800
Dallas, TX 75201
Address for Notices:
Societe Generale, Southwest Agency
2001 Ross Avenue
Suite 4800
Dallas, TX 75201
Attention: Molly Franklin
Telecopier No.: 214-754-0171
Telephone No.: 214-979-2743
CREDIT AGREEMENT
<PAGE>
- 103 -
Commitment UNION BANK
- ----------
$12,000,000.00
By_________________________
Title:
Lending Office for all Loans:
Union Bank
500 North Akard
Suite 4200
Dallas, TX 75201
Address for Notices:
Union Bank
500 North Akard
Suite 4200
Dallas, TX 75201
Attention: Marie Reed
Telecopier No.: 214-922-4209
Telephone No.: 214-922-4200
CREDIT AGREEMENT
<PAGE>
- 104 -
Commitment WELLS FARGO BANK, N.A.
- ----------
$17,000,000.00
By_________________________
Title:
Lending Office for all Loans:
Wells Fargo Bank, N.A.
420 Mongtomery Street
9th Floor MAC 0101-091
San Francisco, CA 94104
Address for Notices:
Wells Fargo Bank, N.A.
420 Mongtomery Street
9th Floor MAC 0101-091
San Francisco, CA 94104
Attention: Teresa Croce
Telecopier No.: 415-989-4319
Telephone No.: 415-396-3629
CREDIT AGREEMENT
<PAGE>
- 105 -
AGENT
-----
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By_________________________
Title:
Address for Notices to
Chase as Agent:
The Chase Manhattan Bank
(National Association)
4 Chase Metrotech Center-13th Floor
Brooklyn, NY 11245
Attention: New York Agency
Telecopier No.: 718-242-6910
Telephone No.: 718-242-7979
with copies to:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, NY 10081
Attention: Ian Schottlaender
Telecopier No.: 212-552-1687
Telephone No.: 212-552-5874
CREDIT AGREEMENT
<PAGE>
SCHEDULE I
MATERIAL AGREEMENTS AND LIENS
Part A - MATERIAL AGREEMENTS
Midgard has guaranteed the obligations of Maxus Gas Marketing
Company ("MGMC") pursuant to certain transportation agreements
entered into by MGMC in the ordinary course of business,
including the following:
TRANSPORTER TERM AMOUNT
- ----------- ---- ------
Panhandle Eastern Corporation Continuing* unlimited
Enron Corporation December 31, 1995 not specified
Williams Natural Gas Company Continuing* unlimited
________________
* may be terminated upon written notice under the contract.
Part B - LIENS
None
SCHEDULE I
<PAGE>
SCHEDULE II
ENVIRONMENTAL MATTERS
None
SCHEDULE II
<PAGE>
SCHEDULE III
INVESTMENTS AND PARTNERSHIPS AND JOINT VENTURE INTERESTS
Midgard and other parties to certain oil and gas joint operating
agreements entered into in the ordinary course of business have
elected to be treated as partnerships for tax purposes.
Midgard has guaranteed the obligations of Maxus Gas Marketing
Company ("MGMC") pursuant to certain transportation agreements
entered into by MGMC in the ordinary course of business,
including the following:
TRANSPORTER TERM AMOUNT
- ----------- ---- ------
Panhandle Eastern Corporation Continuing* unlimited
Enron Corporation December 31, 1995 not specified
Williams Natural Gas Company Continuing* unlimited
________________
* may be terminated upon written notice under the contract.
SCHEDULE III
<PAGE>
SCHEDULE IV
LITIGATION
1. Vernon Kemp et al v. Maxus Exploration Company
Cause No. 95-02-3295
31st Judicial District Court
Lipscomb County, Texas
2. Naylor Farms, Inc. v. Maxus Exploration Company et al
Case No. CV-94-10
District Court
Beaver County, Oklahoma
3. The Board of County Commissioners of Converse County,
Wyoming v. Woods Petroleum Corporation et al
Civil Action No. 11917
8th Judicial District Court
Converse County, Wyoming
4. In The Matter Of: Maxus Energy Corporation/Dallas, Texas
Docket No. TSCA-95-H-07
[U.S. EPA Administrative Complaint]
5. In Re Maxus Exploration Company
IBLA Docket No. 94-732
[MMS Administrative Proceeding]
6. In Re Maxus Exploration Company
MMS/SICD 5-5-53
[MMS Administrative Proceeding]
7. Federal Income Tax audit of Maxus Energy Corporation and
subsidiaries consolidated return for the year 1986
8. Federal Income Tax audit of Maxus Energy Corporation and
subsidiaries consolidated return for the years 1987 - 1989
9. Federal Income Tax audit of Maxus Energy Corporation and
subsidiaries consolidated return for the year 1991
10. Koch Oil Company v. Kerr-McGee Corporation et al
Case No. CIV-92-1595-L
U.S. District Court for the Western District of Oklahoma
11. Shirley Polvadore et al v. Maxus Exploration Company
Cause No. ________
Judicial District Court
Potter County, Texas
12. John A. Culbertson v. Coastal Oil & Gas Corp.
Case No. 91-009655-NO-B
Circuit Court
Midland County, Michigan
SCHEDULE IV
<PAGE>
- 2 -
13. Hector Navarette - possible claim for personal injuries
allegedly sustained while working at a Midgard well location
14. Phillips Petroleum demand concerning the price paid by
Midgard for natural gas pursuant to a natural gas purchase
agreement
15. In Re Diamond Shamrock Securities Litigation
Consolidated Civil Action No. 13483
Court of Chancery
New Castle County, Delaware
16. Aline Boudreaux Daspit et al v. TXP Operating Company et al
Case No. 87-3108-A
15th Judicial District Court
Lafayette Parish, Louisiana
17. All litigation, claims and similar matters, if any,
disclosed in any public filings with the Securities and
Exchange Commission by Maxus Energy Corporation relating to
or involving Midgard Energy Company or by Midgard Energy
Company
SCHEDULE IV
<PAGE>
SCHEDULE V
PART A. EVENTS OF DEFAULT WITH RESPECT TO YPF
Capitalized terms used in Part A of this Schedule V
(unless otherwise defined in Part A of this Schedule V) shall
have the meanings assigned to them in the YPF Guarantee Agreement
or (if not otherwise defined in the YPF Guarantee Agreement) in
the Credit Agreement. In addition, as used in Part A of this
Schedule V, each reference to a Subsidiary or Subsidiaries of YPF
shall be deemed to refer to a Subsidiary or Subsidiaries of YPF
(as the case may be) other than Maxus and its Subsidiaries.
1. YPF shall default in the performance of any of its
obligations under any of Section 4.12, 4.14, 4.15, 4.16 or
4.19 of the YPF Guarantee Agreement or under Section 4.07(b)
thereof; or YPF shall default in the performance of any of
its other obligations under the YPF Guarantee Agreement and
such default shall continue unremedied for a period of 30 or
more days after notice thereof to YPF by the Agent or any
Lender (through the Agent).
2. YPF or any Subsidiary shall (a) default in the
payment of the principal of or interest on any other note,
bond, coupon or other instrument evidencing Indebtedness in
an amount of $20,000,000 or more issued, assumed or
guaranteed by it, when and as the same shall become due and
payable, if such default shall continue for more than the
period of grace, if any, originally applicable thereto and
the time for payment of such amount has not been expressly
extended, or (b) default in the observance of any other
terms and conditions relating to any such Indebtedness, if
the effect of such default is to cause such Indebtedness to
become due prior to its stated maturity.
3. Any government or governmental authority shall have
condemned, nationalized, seized, or otherwise expropriated
all or any substantial part of the Property of YPF or any
Subsidiary or the share capital of YPF or any such
Subsidiary, or shall have assumed custody or control of such
Property or of the business or operations of YPF or any such
Subsidiary or of the share capital of YPF or any such
Subsidiary, or shall have taken any action for the winding-
up or dissolution of YPF or any such Subsidiary or any
action that would prevent YPF or any such Subsidiary or its
officers from carrying on its business or operations or a
substantial part thereof for a period of longer than 30 days
and the result of any such action shall materially prejudice
the ability of YPF to perform its obligations under the
Basic Documents to which it is a party.
4. It becomes unlawful for YPF to perform any of its
obligations under any of the Basic Documents to which it is
SCHEDULE V
<PAGE>
- 2 -
a party, or any of its obligations thereunder ceases to be
valid, binding or enforceable.
5. A resolution is passed or adopted by the Board of
Directors or stockholders of YPF or a judgment of a court of
competent jurisdiction is made, that YPF be wound up or
dissolved, other than for the purposes of or pursuant to a
merger or consolidation otherwise permitted under and in
accordance with the terms of Section 4.16 of the YPF
Guarantee Agreement, and any winding up, dissolution or
liquidation proceedings remain undismissed for thirty (30)
days.
6. An attachment, execution, seizure before judgment
or other legal process is levied or enforced upon any part
of the Property of YPF or any Subsidiary which Property is
material to the condition, financial or otherwise, or to the
earnings, operations or business affairs or business
prospects of YPF and its Subsidiaries taken as a whole, and
(a) such attachment, execution, seizure before judgment or
other legal process is not discharged within 30 days thereof
or (b) if such attachment, execution, seizure before
judgment or other legal process shall not have been
discharged within such 30-day period, YPF or such
Subsidiary, as the case may be, shall not have within such
30-day period contested such attachment, execution, seizure
before judgment or other legal process in good faith by
appropriate proceedings upon stay of execution of the
enforcement thereof or upon posting a bond in connection
therewith; PROVIDED, HOWEVER, that in no event shall the
grace period provided by clause (b) above extend beyond the
60th day after the initiation of such proceedings.
7. A court having jurisdiction enters a decree or
order for (a) relief in respect of YPF or any Significant
Subsidiary in an involuntary case under Argentine Law No.
19,551 or any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect or (b) appointment of
an administrator, receiver, trustee or intervenor for YPF or
any Significant Subsidiary for all or substantially all of
the Property of YPF or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in
effect for a period of 30 consecutive days.
8. YPF or any Significant Subsidiary (a) commences a
voluntary case under Argentine Law No. 19,551 or any
applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, (b) consents to the appointment of
or taking possession by an administrator, receiver, trustee
or intervenor for YPF or any Significant Subsidiary for all
or substantially all of the Property of YPF or any
SCHEDULE V
<PAGE>
- 3 -
Significant Subsidiary or (c) effects any general assignment
for the benefit of creditors.
9. A moratorium is agreed or declared in respect of
any Indebtedness of YPF, or of any Significant Subsidiary,
or any government or governmental authority condemns,
seizes, compulsorily purchases or expropriates 10% or more
of the assets of YPF and its Subsidiaries considered as one
enterprise.
10. Any event occurs which under the laws of any
relevant jurisdiction has an analogous effect to any of the
events referred to in Item 9 of Part A of this Schedule V.
PART B. EVENTS OF DEFAULT WITH RESPECT TO MAXUS
Capitalized terms used in Part B of this Schedule V
(unless otherwise defined in Part B of this Schedule V) shall
have the meanings assigned to them in the Maxus Guarantee
Agreement or (if not otherwise defined in the Maxus Guarantee
Agreement) in the Credit Agreement.
1. Maxus shall default in the performance of any of
its obligations under any of Section 4.01(e), 4.05, 4.06 or 4.07
of the Maxus Guarantee Agreement; or Maxus shall default in the
performance of any of its other obligations under the Maxus
Guarantee Agreement and such default shall continue unremedied
for a period of 30 or more days after notice thereof to Maxus by
the Agent or any Lender (through the Agent).
2. Maxus shall default in the payment when due of any
principal of or interest on any of its other Indebtedness (or
amounts payable under any Interest Rate Protection Agreements or
Commodity Hedging Agreements) aggregating $10,000,000 or more
("OTHER INDEBTEDNESS").
3. Any event, other than an event specified in
paragraph 2 above, specified in any note, agreement, indenture or
other document evidencing or relating to any Other Indebtedness
(or amounts payable under any Interest Rate Protection Agreements
or Commodity Hedging Agreements) aggregating $10,000,000 or more
other than Indebtedness in respect of the loans provided for by
any Credit Agreement between Maxus Northwest Java, Inc., Maxus
Southeast Sumatra Inc., Maxus Indonesia, Inc., the lenders named
therein and Chase as agent for such lenders) shall occur if the
effect of such event is to cause such Other Indebtedness to
become due, or to be required to be prepaid in full (whether by
redemption, purchase, offer to purchase or otherwise), prior to
its stated maturity or, in the case of an Interest Rate
SCHEDULE V
<PAGE>
- 4 -
Protection Agreement or a Commodity Hedging Agreement, to cause
amounts owing thereunder to be liquidated.
4. A Non-Payment Cross-Default shall occur and be
continuing in respect of any Eligible Other Indebtedness. As
used in this paragraph 4:
(a) "ELIGIBLE OTHER INDEBTEDNESS" shall mean Other
Indebtedness other than Indebtedness defined in the first
parenthetical clause in paragraph 3 above.
(b) "NON-PAYMENT CROSS-DEFAULT" shall mean, with
respect to any Eligible Other Indebtedness (the "FIRST OTHER
INDEBTEDNESS"), any event, other than an event referred to
in paragraph 2 above, in respect of any Eligible Other
Indebtedness (other than the First Other Indebtedness) which
permits the holder or holders of the First Other
Indebtedness (or a trustee or agent on behalf of such holder
or holders) to cause such First Other Indebtedness to become
due, or to be required to be prepaid in full (whether by
redemption, purchase, offer to purchase or otherwise), prior
to its stated maturity or, if the First Other Indebtedness
relates to an Interest Rate Protection Agreement or
Commodity Hedging Agreement, to cause payments owing
thereunder to be liquidated.
5. Maxus shall admit in writing its inability to, or
be generally unable to, pay its debts as such debts become due.
6. Maxus shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner or liquidator of itself or of all or
a substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) file a
petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of
debts, (iv) pass or adopt a resolution by the Board of Directors
or stockholders thereof for the purpose of effecting any of the
foregoing or (v) do the equivalent of any of the foregoing under
any foreign laws.
7. A proceeding or case shall be commenced, without
the application or consent of Maxus, in any court of competent
jurisdiction, seeking (i) the reorganization, liquidation,
dissolution, arrangement or winding-up of Maxus, or the
composition or readjustment of its debts, (ii) the appointment of
a receiver, custodian, trustee, examiner, liquidator or the like
of Maxus or of all or any substantial part of its Property, (iii)
similar relief in respect of Maxus under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or
SCHEDULE V
<PAGE>
- 5 -
composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of 60 or more days
or (iv) the equivalent of any of the foregoing under any foreign
laws.
8. A final judgment or order for the payment of money
shall be entered against Maxus (i) which, within 30 days after
the entry thereof, has not been discharged or execution thereof
has not been stayed pending appeal or as to which any enforcement
proceeding shall have been commenced (and not stayed) by any
creditor thereon and (ii) the aggregate amount of all such final
judgments or orders meeting the criteria set forth in clause (i)
exceeds $10,000,000 (net of insurance coverage as to which the
insurer has acknowledged coverage).
SCHEDULE V
<PAGE>
SCHEDULE VI
REORGANIZATION TRANSACTIONS
1. Forgiveness by the Company of $251,390,415 of
intercompany debt owed to the Company by Maxus.
2. Forgiveness by Maxus of $1,540,990,283 of
intercompany debt owed to Maxus by the Company.
3. Dividend by the Company to Maxus of all of the
outstanding capital stock of the following companies
(constituting all of its Subsidiaries): Maxus Corporate Company,
Maxus Gas Marketing Company, Maxus Industrial Gas Company, Maxus
Offshore Exploration Company, Trice Properties, Inc. and Natomas
North America, Inc.
SCHEDULE VI
<PAGE>
SCHEDULE VII
WAIVERS OF STATUTES OF LIMITATION - TAXES
Extensions of the statute of limitations on the assessment of
United States federal income tax on Maxus Energy Corporation and
its subsidiaries have been granted with respect to the following
years:
Tax Year Extended to
-------- -----------
1986 December 31, 1995
1987 June 30, 1995
1988 June 30, 1995
1989 June 30, 1995
1990 September 15, 1996
1991 September 15, 1996
SCHEDULE VII
<PAGE>
EXECUTION COUNTERPART
File No. 33307
- -----------------------------------------------------------------
- -----------------------------------------------------------------
MAXUS INDONESIA, INC.,
as Borrower
AND
MAXUS NORTHWEST JAVA, INC.
AND
MAXUS SOUTHEAST SUMATRA, INC.,
as Guarantors
_____________________________
CREDIT AGREEMENT
Dated as of June 16, 1995
______________________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
- -----------------------------------------------------------------
- -----------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
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Section 1. Definitions and Accounting Matters . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . 24
1.03 Types of Loans . . . . . . . . . . . . . . . . . 26
1.04 Borrowing Base . . . . . . . . . . . . . . . . . 26
1.05 Copies of Documents . . . . . . . . . . . . . . 29
1.06 Subsidiaries . . . . . . . . . . . . . . . . . . 29
Section 2. Commitments, Loans, Notes and Prepayments . . . 29
2.01 Loans . . . . . . . . . . . . . . . . . . . . . 29
2.02 Borrowings . . . . . . . . . . . . . . . . . . . 29
2.03 Termination of Commitments . . . . . . . . . . . 29
2.04 Lending Offices . . . . . . . . . . . . . . . . 29
2.05 Several Obligations; Remedies Independent . . . 30
2.06 Notes . . . . . . . . . . . . . . . . . . . . . 30
2.07 Optional Prepayments and Conversions or
Continuations of Loans . . . . . . . . . . . . 31
2.08 Mandatory Prepayments and Credits to Borrowing
Base Redetermination Sub-Account. . . . . . . 31
Section 3. Payments of Principal and Interest . . . . . . . 34
3.01 Repayment of Loans . . . . . . . . . . . . . . . 34
3.02 Interest . . . . . . . . . . . . . . . . . . . . 35
Section 4. Payments; Pro Rata Treatment; Computations;
Etc. . . . . . . . . . . . . . . . . . . . . . 36
4.01 Payments . . . . . . . . . . . . . . . . . . . . 36
4.02 Pro Rata Treatment . . . . . . . . . . . . . . . 37
4.03 Computations . . . . . . . . . . . . . . . . . . 37
4.04 Minimum Amounts . . . . . . . . . . . . . . . . 37
4.05 Certain Notices . . . . . . . . . . . . . . . . 38
4.06 Non-Receipt of Funds by the Agent . . . . . . . 38
4.07 Sharing of Payments, Etc. . . . . . . . . . . . 39
Section 5. Yield Protection, Etc. . . . . . . . . . . . . . 40
5.01 Additional Costs . . . . . . . . . . . . . . . . 40
5.02 Limitation on Types of Loans . . . . . . . . . . 43
5.03 Illegality . . . . . . . . . . . . . . . . . . . 43
5.04 Treatment of Affected Loans . . . . . . . . . . 44
5.05 Broken Funding . . . . . . . . . . . . . . . . . 44
5.06 U.S. Taxes . . . . . . . . . . . . . . . . . . . 45
5.07 Replacement of Certain Lenders . . . . . . . . . 47
(i)
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Section 6. Guarantee . . . . . . . . . . . . . . . . . . . 47
6.01 The Guarantee . . . . . . . . . . . . . . . . . 47
6.02 Obligations Unconditional . . . . . . . . . . . 48
6.03 Reinstatement . . . . . . . . . . . . . . . . . 49
6.04 Subrogation . . . . . . . . . . . . . . . . . . 49
6.05 Remedies . . . . . . . . . . . . . . . . . . . . 49
6.06 Instrument for the Payment of Money . . . . . . 50
6.07 Continuing Guarantee . . . . . . . . . . . . . . 50
6.08 Rights of Contribution . . . . . . . . . . . . . 50
6.09 General Limitation on Guarantee
Obligations. . . . . . . . . . . . . . . . . . 51
Section 7. Conditions Precedent . . . . . . . . . . . . . . 51
7.01 Conditions Precedent . . . . . . . . . . . . . . 51
7.02 Other Conditions Precedent . . . . . . . . . . . 56
Section 8. Representations and Warranties . . . . . . . . . 56
8.01 Corporate Existence . . . . . . . . . . . . . . 56
8.02 Financial Condition . . . . . . . . . . . . . . 57
8.03 Litigation . . . . . . . . . . . . . . . . . . . 57
8.04 No Breach . . . . . . . . . . . . . . . . . . . 58
8.05 Action . . . . . . . . . . . . . . . . . . . . . 58
8.06 Approvals . . . . . . . . . . . . . . . . . . . 59
8.07 Use of Credit . . . . . . . . . . . . . . . . . 59
8.08 ERISA . . . . . . . . . . . . . . . . . . . . . 59
8.09 Taxes . . . . . . . . . . . . . . . . . . . . . 59
8.10 Investment Company Act . . . . . . . . . . . . . 59
8.11 Public Utility Holding Company Act . . . . . . . 60
8.12 Material Agreements and Liens . . . . . . . . . 60
8.13 Environmental Matters . . . . . . . . . . . . . 60
8.14 Capitalization . . . . . . . . . . . . . . . . . 62
8.15 Subsidiaries, Etc. . . . . . . . . . . . . . . . 62
8.16 Title to Assets . . . . . . . . . . . . . . . . 62
8.17 True and Complete Disclosure . . . . . . . . . . 63
8.18 Indonesian Agreements . . . . . . . . . . . . . 63
8.19 Special Purpose Company . . . . . . . . . . . . 64
Section 9. Covenants of the Relevant Obligors . . . . . . . 64
9.01 Financial Statements Etc. . . . . . . . . . . . 64
9.02 Litigation . . . . . . . . . . . . . . . . . . . 69
9.03 Existence, Etc. . . . . . . . . . . . . . . . . 69
9.04 Insurance . . . . . . . . . . . . . . . . . . . 70
9.05 Prohibition of Fundamental Changes . . . . . . . 70
9.06 Limitation on Liens . . . . . . . . . . . . . . 71
9.07 Indebtedness . . . . . . . . . . . . . . . . . . 74
9.08 Investments . . . . . . . . . . . . . . . . . . 76
9.09 Restricted Payments . . . . . . . . . . . . . . 78
9.10 Certain Financial Covenants . . . . . . . . . . 79
9.11 Maintenance of Corporate Separateness . . . . . 79
9.12 Lines of Business; Etc. . . . . . . . . . . . . 79
(ii)
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9.13 Transactions with Affiliates . . . . . . . . . . 80
9.14 Use of Proceeds . . . . . . . . . . . . . . . . 80
9.15 Certain Obligations Respecting Subsidiaries . . 80
9.16 Changes to Production Payments . . . . . . . . . 81
9.17 Sales Contracts . . . . . . . . . . . . . . . . 81
9.18 Indonesian Agreements and Other Agreements . . . 82
9.19 Special Covenant relating to Holdings . . . . . 82
9.20 Subordinated Indebtedness . . . . . . . . . . . 83
9.21 Information with Respect to Dispositions,
Property Acquisitions and Certain Actions
of Indonesian Government Authorities. . . . . 83
Section 10. Events of Default . . . . . . . . . . . . . . . 84
Section 11. The Agent . . . . . . . . . . . . . . . . . . . 88
11.01 Appointment, Powers and Immunities . . . . . . . 88
11.02 Reliance by Agent . . . . . . . . . . . . . . . 89
11.03 Defaults . . . . . . . . . . . . . . . . . . . . 89
11.04 Rights as a Lender . . . . . . . . . . . . . . . 90
11.05 Indemnification . . . . . . . . . . . . . . . . 90
11.06 Non-Reliance on Agent and Other Lenders . . . . 90
11.07 Failure to Act . . . . . . . . . . . . . . . . . 91
11.08 Resignation or Removal of Agent . . . . . . . . 91
11.09 Consents under Other Basic Documents . . . . . . 92
Section 12. Miscellaneous . . . . . . . . . . . . . . . . . 92
12.01 Waiver . . . . . . . . . . . . . . . . . . . . . 92
12.02 Notices . . . . . . . . . . . . . . . . . . . . 92
12.03 Expenses, Etc. . . . . . . . . . . . . . . . . . 93
12.04 Amendments, Etc. . . . . . . . . . . . . . . . . 94
12.05 Successors and Assigns . . . . . . . . . . . . . 95
12.06 Assignments and Participations . . . . . . . . . 95
12.07 Survival . . . . . . . . . . . . . . . . . . . . 97
12.08 Captions . . . . . . . . . . . . . . . . . . . . 97
12.09 Counterparts . . . . . . . . . . . . . . . . . . 97
12.10 Governing Law; Submission to Jurisdiction . . . 97
12.11 Waiver of Jury Trial . . . . . . . . . . . . . . 98
12.12 Treatment of Certain Information;
Confidentiality . . . . . . . . . . . . . . . 98
12.13 Appointment of Holdings as Agent . . . . . . . . 99
12.14 Joint and Several Liability . . . . . . . . . . 99
SCHEDULE I - Material Agreement, Liens and Production
Payments
SCHEDULE II - Environmental Matters
SCHEDULE III - Subsidiaries and Investments
SCHEDULE IV - Litigation
SCHEDULE V - Intentionally Omitted
SCHEDULE VI - Events of Default relating to YPF and Maxus
SCHEDULE VII - Eligible Buyers
SCHEDULE VIII - Reorganization Transactions
SCHEDULE IX - Waivers of Statutes of Limitations -- Taxes
(iii)
<PAGE>
EXHIBIT A - Form of Note
EXHIBIT B-1 - Form of YPF Guarantee Agreement
EXHIBIT B-2 - Form of Maxus Guarantee Agreement
EXHIBIT C - Form of Account Pledge Agreement
EXHIBIT D - Form of Pledge Agreement
EXHIBIT E-1 - Form of Opinion of Special New York and Texas
Counsel to the Obligors
EXHIBIT E-2 - Form of Opinion of Special Argentine Counsel
to the Obligors
EXHIBIT E-3 - Form of Opinion of Vice President -- Legal
Counsel of Maxus
EXHIBIT F-1 - Form of Opinion of Special New York Counsel
to Chase
EXHIBIT F-2 - Form of Opinion of Special Argentine Counsel
to Chase
EXHIBIT F-3 - Form of Opinion of Special Indonesian Counsel
to Chase
EXHIBIT G - Form of Confidentiality Agreement
EXHIBIT H - Form of Notice of Assignment
EXHIBIT I - Form of Process Agent Acceptance
EXHIBIT J - Form of Affiliate Subordination Agreement
(iv)
<PAGE>
CREDIT AGREEMENT dated as of June 16, 1995, between:
MAXUS INDONESIA, INC., a corporation duly organized and validly
existing under the laws of the State of Delaware ("HOLDINGS");
MAXUS NORTHWEST JAVA, INC., a corporation duly organized and
validly existing under the laws of the State of Delaware ("MAXUS
JAVA"); MAXUS SOUTHEAST SUMATRA, INC., a corporation duly
organized and validly existing under the laws of the State of
Delaware ("MAXUS SUMATRA" and, together with Maxus Java, a
"SUBSIDIARY GUARANTOR" and, collectively, the "SUBSIDIARY
GUARANTORS"); each of the lenders that is a signatory hereto
identified under the caption "LENDERS" on the signature pages
hereto or that, pursuant to Section 12.06(b) hereof, shall become
a "Lender" hereunder (individually, a "LENDER" and, collectively,
the "LENDERS"); and THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), a national banking association, as agent for the
Lenders (in such capacity, together with its successors in such
capacity, the "AGENT").
Holdings has requested that the Lenders make loans to
it in an aggregate principal amount not exceeding $175,000,000
and the Lenders are prepared to make such loans upon the terms
and conditions hereof. Accordingly, the parties hereto agree as
follows:
Section 1. DEFINITIONS AND ACCOUNTING MATTERS.
1.01 CERTAIN DEFINED TERMS. As used herein, the
following terms shall have the following meanings (all terms
defined in this Section 1.01 or in other provisions of this
Agreement in the singular to have the same meanings when used in
the plural and VICE VERSA):
"ACCOUNT PLEDGE AGREEMENT" shall mean an Account Pledge
Agreement substantially in the form of Exhibit C hereto between
the Subsidiary Guarantors, Holdings, Chase and the Agent, as the
same may be modified and supplemented and in effect from time to
time.
"ACCOUNTS" shall have the meaning assigned to such term
in the Account Pledge Agreement.
"ACQUISITION CREDIT AGREEMENT" shall mean the Credit
Agreement dated as of April 5, 1995 between YPF Acquisition
Corp., YPF, as guarantor, the lenders named therein and Chase, as
agent for said lenders, as the same may be modified and
supplemented and in effect from time to time.
"AFFILIATE" shall mean, with respect to any Person, any
other Person that directly or indirectly controls, or is under
common control with, or is controlled by, such Person. As used
in this definition, "CONTROL" (including, with its correlative
meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall
mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership
CREDIT AGREEMENT
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- 2 -
interests, by contract or otherwise), PROVIDED that, in any
event, any Person that owns directly or indirectly securities
having 5% or more of the voting power for the election of
directors or other governing body of a corporation or 5% or more
of the partnership or other ownership interests of any other
Person (other than as a limited partner of such other Person or
as an owner of an undivided fractional interest in hydrocarbon
reserves or production or gathering, processing or storage assets
with respect to which such Person is not the operator or is the
owner of 25% or less of the capital stock of or other ownership
interests in a corporation or other entity owning any of the
foregoing (PROVIDED that another corporation or entity that does
not control, or is not controlled by or under common control
with, such Person is the owner of a greater percentage of the
ownership interests in such corporation or entity than such
Person)) will be deemed to control such corporation or other
Person. Notwithstanding the foregoing, (i) no individual shall
be an Affiliate of any Person solely by reason of his or her
being a director, officer or employee of such Person and
(ii) none of Holdings and the Wholly Owned Subsidiaries of
Holdings shall be Affiliates of each other.
"AFFILIATE SUBORDINATED INDEBTEDNESS" shall mean
Indebtedness of Holdings to YPF or a Wholly Owned Subsidiary of
YPF (other than Maxus or a Wholly Owned Subsidiary of Maxus) for
borrowed money: (a) no part of the principal of which shall be
payable (or subject to any mandatory prepayment, redemption or
similar provisions) prior to the payment in full of the principal
of and interest on the Loans and all other amounts payable by
Holdings hereunder and under the Notes without the prior consent
of the Majority Lenders; and (b) the obligations of Holdings in
respect of which are subordinated to the obligations of Holdings
hereunder and under the Notes pursuant to an Affiliate
Subordination Agreement (or on other terms of subordination, and
pursuant to documentation, satisfactory to the Majority Lenders).
"AFFILIATE SUBORDINATION AGREEMENT" shall mean a
subordination agreement between YPF or a Wholly Owned Subsidiary
of YPF (other than Maxus or a Wholly Owned Subsidiary of Maxus)
and the Agent in substantially the form of Exhibit J hereof.
"APPLICABLE LENDING OFFICE" shall mean, for each Lender
and for each Type of Loan, the "Lending Office" of such Lender
(or of an affiliate of such Lender) designated for such Type of
Loan on the signature pages hereof or such other office of such
Lender (or of an affiliate of such Lender) as such Lender may
from time to time specify to the Agent and Holdings as the office
by which its Loans of such Type are to be made and maintained.
"APPLICABLE MARGIN" shall mean, with respect to each
Type of Loan during each period set forth in the schedule below,
the percentage per annum set forth opposite such period under
such Type of Loan in such schedule:
CREDIT AGREEMENT
<PAGE>
- 3 -
Applicable Margin (% p.a.)
--------------------------
Period Base Rate Loans Eurodollar Loans
------ --------------- ----------------
From and including the
Closing Date through and
including March 30, 1997 1 1/4% 2 1/4%
From and including
March 31, 1997 and
at all times thereafter 1 3/4% 2 3/4%
"BANKRUPTCY CODE" shall mean the U.S. Federal
Bankruptcy Code of 1978, as amended from time to time.
"BASE RATE" shall mean, for any day, a rate per annum
equal to the higher of (a) the Federal Funds Rate for such day
plus 1/2 of 1% and (b) the Prime Rate for such day. Each change
in any interest rate provided for herein based upon the Base Rate
resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.
"BASIC DOCUMENTS" shall mean, collectively, this
Agreement, the Notes and the Support Documents.
"BORROWING BASE" shall have the meaning assigned to
such term in Section 1.04(b)(iv) hereof.
"BORROWING BASE DEFICIENCY" shall mean, with respect to
any Redetermination Date, the amount (if any) by which the
aggregate principal amount of the Loans outstanding as of such
Redetermination Date exceeds the Borrowing Base as redetermined
as of such Redetermination Date.
"BORROWING BASE EXCESS" shall mean, as of any date, the
amount (if any) by which the Borrowing Base as redetermined as of
the then most recent Redetermination Date exceeds the aggregate
principal amount of the Loans outstanding as of such date.
"BORROWING BASE PREPAYMENT ASD" shall have the meaning
assigned to such term in Section 9.07(d) hereof.
"BORROWING BASE REDETERMINATION SUB-ACCOUNT" shall have
the meaning assigned to such term in the Account Pledge
Agreement.
"BUSINESS DAY" shall mean any day (a) on which
commercial banks are not authorized or required to close in New
York City and (b) if such day relates to a borrowing of, a
payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a Eurodollar
Loan or a notice by Holdings with respect to any such borrowing,
payment, prepayment, Conversion or Interest Period, that is also
CREDIT AGREEMENT
<PAGE>
- 4 -
a day on which dealings in Dollar deposits are carried out in the
London interbank market.
"CAPEX ASD" shall have the meaning assigned to such
term in Section 9.07(d) hereof.
"CAPITAL EXPENDITURES" shall mean, for any period,
expenditures (including, without limitation, the aggregate amount
of Capital Lease Obligations paid or required to be paid during
such period) made or contemplated to be made by the Subsidiary
Guarantors or any of their Subsidiaries in connection with the
acquisition and exploitation of, or the exploration for or
development or production of, Hydrocarbon Properties or to
acquire or construct fixed assets, plant and equipment (including
renewals, improvements and replacements, but excluding repairs)
during such period computed in accordance with GAAP.
Notwithstanding the foregoing: (a) "Capital Expenditures" for
any period (i) with respect to Hydrocarbon Properties shall be
limited to those capital expenditures which (a) are contemplated
to be made during any period as indicated in the Reserve
Evaluation Report delivered to the Agent immediately prior to
such period or (b) either of the Subsidiary Guarantors has
indicated would be made by a prudent operator of hydrocarbon
properties in a certificate of a Senior Officer of such
Subsidiary Guarantor delivered to the Agent simultaneously with
such Reserve Evaluation Report and (ii) shall exclude capital
expenditures made during such period with the proceeds of Net
Equity Investments for Capital Expenditures; (b) when used with
respect to Maxus Sumatra, "Capital Expenditures" shall not
include any Capital Expenditures made by it as the operator under
the Operating Agreement to which it is a party or the related
Production Sharing Agreement in connection with transactions
under such agreements if and to the extent the other parties to
such Operating Agreement are obligated to reimburse it for their
respective pro rata shares of such Capital Expenditures; and
(c) when used with respect to Maxus Java, "Capital Expenditures"
shall include any payments made by it to the operator under the
Operating Agreement to which Maxus Java is a party or the related
Production Sharing Agreement in satisfaction of Maxus Java's
obligations to reimburse such operator for Maxus Java's pro rata
share of Capital Expenditures made by such operator in connection
with transactions under such agreements.
"CAPITAL LEASE OBLIGATIONS" shall mean, for any Person,
all obligations of such Person to pay rent or other amounts under
a lease of (or other agreement conveying the right to use)
Property to the extent such obligations are required to be
classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
CREDIT AGREEMENT
<PAGE>
- 5 -
"CASH FLOW" shall mean, for any period, for Holdings
and its Subsidiaries (determined on a consolidated basis in
accordance with GAAP, to the extent applicable), the sum of the
following for such period (without duplication), which shall be
treated as a single accounting period: (a) gross operating
revenue from the sale of natural gas, oil and other hydrocarbon
products and providing related services MINUS (b) Operating
Expenses; PROVIDED that, in no event shall any non-cash item of
revenue or expense be included in the determination of Cash Flow.
"CASUALTY EVENT" shall mean, with respect to any
Property of any Person, any loss of or damage to, or any
condemnation or other taking of, such Property for which such
Person or any of its Subsidiaries receives, anticipates
recovering or has filed a claim for Casualty Proceeds.
"CASUALTY PROCEEDS" shall mean the proceeds of any
insurance, condemnation award or other compensation paid or
payable to either of the Subsidiary Guarantors or any of their
respective Subsidiaries by an insurer or Government Authority in
respect of any Casualty Event.
"CHASE" shall mean The Chase Manhattan Bank (National
Association).
"CLOSING DATE" shall mean the date upon which the Loans
hereunder are made.
"CLOSING DATE MATERIAL ADVERSE EFFECT" shall mean a
material adverse effect on any of the condition (financial or
otherwise), business, operations, assets, nature of assets or
liabilities of any of (a) YPF and its Subsidiaries taken as a
whole (including, without limitation, the investment ratings of
any of YPF's securities being downgraded or being put on "credit
watch" or "credit review" with negative implications by any
nationally recognized statistical rating organization), or
(b) Maxus and its Subsidiaries taken as a whole.
"CODE" shall mean the U.S. Internal Revenue Code of
1986, as amended from time to time.
"COLLECTION ACCOUNT" shall have the meaning assigned to
such term in the Account Pledge Agreement.
"COMMITMENT" shall mean, as to each Lender, the
obligation of such Lender to make a Loan pursuant to Section 2.01
hereof in a principal amount at any one time outstanding up to
but not exceeding the amount set opposite such Lender's name on
the signature pages hereof under the caption "Commitment". The
original aggregate principal amount of the Commitments is
$175,000,000.
"COMMITMENT TERMINATION DATE" shall mean June 19, 1995.
CREDIT AGREEMENT
<PAGE>
- 6 -
"COMMODITY HEDGING AGREEMENT" shall mean, for any Person,
an agreement or arrangement between such Person and one or more
financial institutions or other entities providing for the transfer
or mitigation of risks of fluctuations in the prices of
hydrocarbons, either generally or under specific circumstances.
"CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to
the continuation pursuant to Section 2.07 hereof of a Eurodollar
Loan from one Interest Period to the next Interest Period.
"CONVERT", "CONVERSION" and "CONVERTED" shall refer to a
conversion pursuant to Section 2.07 hereof of one Type of Loans
into another Type of Loans, which may be accompanied by the
transfer by a Lender (at its sole discretion) of a Loan from
one Applicable Lending Office to another.
"CREDIT AGRICOLE" shall mean Caisse Nationale de Credit
Agricole, Geneva branch.
"CREDIT AGRICOLE ACCOUNT AGREEMENT" shall mean an
Assignment of Account Agreement to be entered into by Credit
Agricole, Maxus Java, Maxus Sumatra, Maxus Energy Trading Company
and the Agent in substantially the form heretofore delivered to and
approved by the Agent (with such changes therein as may be approved
by the Majority Lenders), as the same shall be amended,
supplemented, extended and replaced (pursuant to Section 9.17(c)(i)
hereof or otherwise) from time to time.
"DEBT COVERAGE RATIO" shall mean, as at any date, the
ratio of (a) Cash Flow for the period of four complete fiscal
quarters of Holdings and its Subsidiaries most recently ended prior
to such date (or, if such date is prior to April 1, 1996, the
fiscal quarter or quarters of Holdings and its Subsidiaries that
have elapsed since March 31, 1995, in each case taken as a single
accounting period), to (b) Debt Service for such period.
"DEBT SERVICE" shall mean, for any period, the sum, for
Holdings and its Subsidiaries (determined on a consolidated basis
in accordance with GAAP), of the following (without duplication):
(a) all regularly scheduled payments or prepayments of principal of
Indebtedness (including, without limitation, the principal
component of any payments in respect of Capital Lease Obligations
but excluding any prepayment required pursuant to Section 2.08
hereof) made or required to be made during such period PLUS (b) all
Interest Expense for such period.
"DEFAULT" shall mean an Event of Default or an event that
with notice or lapse of time or both would become an Event of
Default.
"DETERMINATION DATE" shall mean, when used with respect
to any Reserve Evaluation Report, the date 30 days following the
CREDIT AGREEMENT
<PAGE>
- 7 -
related Report Delivery Date; PROVIDED that if such date is not a
Business Day, the Determination Date shall be the immediately
succeeding Business Day.
"DETERMINATION PERIOD" shall mean, (a) with respect to
any Reserve Evaluation Report delivered by the Independent
Petroleum Engineer, the calendar year for which such report was
prepared and (b) with respect to any Reserve Evaluation Report
prepared by the Subsidiary Guarantors, the period from January 1
to June 30 of the calendar year for which such report was
prepared.
"DISPOSITION" shall mean any sale, assignment, transfer
or other disposition of any Property (whether now owned or
hereafter acquired) by either Subsidiary Guarantor or any of its
Subsidiaries to any other Person excluding (i) obsolete or
worn-out Property, tools or equipment no longer used or useful in
its business so long as such items are disposed of in the
ordinary course of business and on ordinary business terms,
(ii) any inventory or other Property (including, without
limitation, accounts receivable) sold or disposed of in the
ordinary course of business and on ordinary business terms),
(iii) any hydrocarbons produced, processed or sold in the
ordinary course of business and on ordinary business terms
(excluding Production Payments or any other sale or lease of
interests in hydrocarbons in the ground with respect to
Properties of either Subsidiary Guarantor or any of its
Subsidiaries) and (iv) dispositions of Properties the subject of
Casualty Events.
"DOLLAR-DENOMINATED PRODUCTION PAYMENTS" shall mean
production payment obligations of either Subsidiary Guarantor or
any of its Subsidiaries which are payable from a specified share
of proceeds received from production from specific Properties,
together with all undertakings and obligations in connection
therewith.
"DOLLARS" and "$" shall mean lawful money of the United
States of America.
"ELIGIBLE BUYERS" shall mean any of the Persons set
forth on Schedule VII hereto or any other Person identified by
either Subsidiary Guarantor as an "Eligible Buyer" by notice to
the Agent with respect to which the Agent does not notify such
Subsidiary Guarantor within 15 Business Days after the receipt by
the Agent of such notice that the Majority Lenders have
determined that such Person shall not be an Eligible Buyer (such
determination to be within the sole discretion of the Majority
Lenders); PROVIDED that:
(a) if such Person shall be the subject of any
bankruptcy, insolvency, reorganization, liquidation,
dissolution or winding-up proceeding or action (whether
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voluntary or involuntary), such Person shall not be an
Eligible Buyer with respect to any Sales Contract entered
into after either Subsidiary Guarantor or Holdings receives
any written notice or otherwise becomes aware of such event,
and
(b) if, as at any date, more than 25% of the aggregate
amount of accounts due from any such Person to the
Subsidiary Guarantors and their respective Subsidiaries in
respect of its purchases of crude oil or other hydrocarbons
from either of the Subsidiary Guarantors or any of their
respective Subsidiaries has, as of such date, remained
unpaid for more than 30 days (measured from the due date
specified in the original invoice therefor), such Person
shall cease to be an Eligible Buyer 15 days after such date,
PROVIDED that for purposes of determining compliance with
Section 9.17(b) hereof, such Person shall continue to be an
Eligible Buyer with respect to any Sales Contract entered
into prior to such date so long as the Subsidiary Guarantor
party thereto is diligently attempting to collect such past
due amounts and if such Subsidiary Guarantor believes that
it is able to terminate such Sales Contract and such
termination is believed to be in such Subsidiary Guarantor's
best interest, is diligently attempting to effect such
termination.
"ENVIRONMENTAL CLAIM" shall mean, with respect to each
of the Relevant Obligors and its Subsidiaries, any written
notice, claim or demand (collectively, a "CLAIM") by any Person
alleging or asserting liability of such Relevant Obligor and its
Subsidiaries for investigatory costs, cleanup costs, governmental
response costs, damages to natural resources or other Property,
personal injuries, fines or penalties arising out of, based on or
resulting from (a) the presence, or Release into the environment,
of any Environmental Material at any location, whether or not
owned by such Person, or (b) circumstances forming the basis of
any violation or alleged violation by, or any liability or
alleged liability of, such Relevant Obligor and its Subsidiaries
of or under any Environmental Law. The term "Environmental
Claim" shall include, without limitation, any claim by any
governmental authority for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from the presence of
or exposure to Environmental Materials, but shall not include
costs incurred under the respective Production Sharing Agreements
or Operating Agreements to abandon or dispose of drilling
platforms and related production facilities as required by
Pertamina or any other Government Authority, PROVIDED that such
costs are reflected in the Reserve Evaluation Reports covering
the respective periods in which such costs are incurred.
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"ENVIRONMENTAL LAWS" shall mean any and all applicable
Indonesian (whether national, provincial or local) and other
foreign laws, rules or regulations, and any orders or decrees,
relating to the regulation or protection of human health, safety
or the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or
toxic or hazardous substances or wastes into the indoor or
outdoor environment, including, without limitation, ambient air,
soil, surface water, ground water, wetlands, land or subsurface
strata, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes.
"ENVIRONMENTAL MATERIAL" shall mean any substance,
waste, pollutant, contaminant, chemical or other material,
exposure to which is now or hereafter regulated, or the handling
and disposal of which is now or hereafter regulated, under any
Environmental Law.
"EQUITY RIGHTS" shall mean, with respect to any Person,
any subscriptions, options, warrants, commitments, preemptive
rights or agreements of any kind (including, without limitation,
any stockholders' or voting trust agreements) for the issuance,
sale, registration or voting of, or securities convertible into,
any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, such
Person.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA AFFILIATE" shall mean any corporation or trade
or business that is a member of any group of organizations
(i) described in Section 414(b) or (c) of the Code of which any
of Holdings and its Subsidiaries is a member and (ii) solely for
purposes of potential liability under Section 302(c)(11) of ERISA
and Section 412(c)(11) of the Code and the lien created under
Section 302(f) of ERISA and Section 412(n) of the Code, described
in Section 414(m) or (o) of the Code of which any of Holdings and
its Subsidiaries is a member.
"EURODOLLAR LOANS" shall mean Loans that bear interest
at rates based on rates referred to in the definition of
"Eurodollar Rate" in this Section 1.01.
"EURODOLLAR RATE" shall mean, with respect to any
Eurodollar Loan for any Interest Period therefor, the arithmetic
mean, as determined by the Agent, of the rates per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) quoted by the
respective Reference Lenders at approximately 11:00 a.m. London
time (or as soon thereafter as practicable) on the date
two Business Days prior to the first day of such Interest Period
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for the offering by the respective Reference Lenders to leading
banks in the London interbank market of Dollar deposits having a
term comparable to such Interest Period and in an amount
comparable to the principal amount of the Eurodollar Loan to be
made by the respective Reference Lenders for such Interest
Period. If any Reference Lender is not participating in any
Eurodollar Loans during any Interest Period therefor, the
Eurodollar Rate for such Loans for such Interest Period shall be
determined by reference to the amount of such Loans that such
Reference Lender would have made or had outstanding had it been
participating in such Loan during such Interest Period.
"EVENT OF DEFAULT" shall have the meaning assigned to
such term in Section 10 hereof.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, PROVIDED that (a) if the day for
which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published
on the next succeeding Business Day and (b) if such rate is not
so published for any Business Day, the Federal Funds Rate for
such Business Day shall be the average rate charged to Chase on
such Business Day on such transactions as determined by the
Agent.
"GAAP" shall mean accounting principles generally
accepted in the United States as such principles shall be in
effect at the time of the computation or determination or as of
the date of the relevant financial statements, as the case may be
(the "RELEVANT DATE"), subject to Section 1.02 hereof.
"GOVERNMENT AUTHORITY" shall mean any federal, state,
provincial, municipal, local or territorial government or
governmental subdivision, department, commission, board, bureau,
agency, regulatory authority, instrumentality, judicial, taxing
or administrative body, domestic or foreign, including, without
limitation, in the case of Indonesia, any ministry or state
enterprise of the Republic of Indonesia and any officer or
official of any of the foregoing (including, without limitation,
Pertamina in its capacity as regulator of Indonesian petroleum
operators and matters in general but not in its capacity as a
contracting party to each Production Sharing Contract and
Operating Agreement).
"GUARANTEE" shall mean a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or become
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contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any
Person or any production or revenues generated by (or any capital
or other expenditures incurred in connection with the acquisition
and exploitation of, or the exploration for or development or
production of) any Hydrocarbon Properties, or a guarantee of the
payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) Property, products, materials,
supplies or services primarily for the purpose of enabling a
debtor to make payment of such debtor's obligations or an
agreement to assure a creditor against loss, and including,
without limitation, causing a bank or other financial institution
to issue a letter of credit or other similar instrument for the
benefit of another Person, but excluding endorsements for
collection or deposit in the ordinary course of business. The
terms "GUARANTEE" and "GUARANTEED" used as a verb shall have a
correlative meaning.
"HYDROCARBON PROPERTIES" shall mean, (i) with respect
to either Subsidiary Guarantor, such Subsidiary Guarantor's
Indonesian Interests and (ii) with respect to either Subsidiary
Guarantor or any of its Subsidiaries, such Subsidiary Guarantor's
or Subsidiary's interests in hydrocarbon reserves.
"INDEBTEDNESS" shall mean, for any Person (without
duplication): (a) obligations created, issued or incurred by
such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or
otherwise, to purchase or repurchase the same or similar Property
from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services,
other than trade accounts payable (other than for borrowed money)
arising, and accrued expenses incurred, in the ordinary course of
business so long as such trade accounts payable are payable
within 90 days after the date of receipt of the invoice therefor;
(c) obligations of others secured by a Lien on the Property of
such Person, whether or not the respective obligations so secured
has been assumed by such Person; (d) obligations of such Person
in respect of letters of credit, surety bonds or similar
instruments issued or accepted by banks, surety companies and
other financial institutions for account of such Person;
(e) Capital Lease Obligations of such Person other than any
thereof for which either of the Subsidiary Guarantors are liable
(in the case of Maxus Sumatra, directly, or, in the case of Maxus
Java, indirectly by way of an obligation to reimburse the
operator under the Operating Agreement to which it is a party)
and which is incurred in connection with transactions under the
Operating Agreement to which such Subsidiary Guarantor is a party
or the related Production Sharing Agreement; (f) obligations of
such Person in respect of obligations of the types specified in
other clauses of this definition as a partner or joint venturer
CREDIT AGREEMENT
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of any partnership or joint venture (other than in respect of
obligations incurred in the ordinary course of business); (g) the
unearned balance of any advance payment received by such Person
under any contract to be performed in excess of $250,000 in the
aggregate (other than as provided in clause (h) below); (h) the
unearned balance of any advance payment received by such Person
under any contract to be performed in excess of $2,000,000 in the
aggregate resulting from transactions in the ordinary course of
such Person's business; and (i) Indebtedness of others Guaranteed
by such Person; PROVIDED that: (i) when used with respect to
Maxus Sumatra, "Indebtedness" shall not include any Indebtedness
incurred by it as the operator under the Operating Agreement to
which it is a party or the related Production Sharing Agreement
in connection with transactions under such agreements if and to
the extent the other parties to such Operating Agreement are
obligated to reimburse it for their respective pro rata shares of
payments made by it in respect of such Indebtedness; and
(ii) when used with respect to Maxus Java, "Indebtedness" shall
include its obligations to reimburse the operator under the
Operating Agreement to which Maxus Java is a party or the related
Production Sharing Agreement for Maxus Java's pro rata share of
payments made by such operator in respect of Indebtedness
incurred by such operator in connection with transactions under
such agreements.
"INDEPENDENT PETROLEUM ENGINEER" shall mean any firm of
independent petroleum engineers selected by the Relevant Obligors
and acceptable to the Majority Lenders.
"INDONESIAN AGREEMENTS" shall mean, collectively, the
Production Sharing Agreements and the Operating Agreements.
"INDONESIAN INTERESTS" shall mean, when used with
respect to a Subsidiary Guarantor, such Subsidiary Guarantor's
rights and interests in, to and under the Production Sharing
Agreement to which it is a party and the related Operating
Agreement including, without limitation, its rights thereunder to
develop, operate, produce, extract and otherwise exploit its
share of the hydrocarbon reserves that are the subject of such
Indonesian Agreements and export from Indonesia and sell its
share of the hydrocarbons produced thereunder.
"INDONESIAN MATERIAL ADVERSE EFFECT" shall mean a
material adverse effect on (a) the Property (including, without
limitation, the Indonesian Interests of the Subsidiary
Guarantors), financial condition, business or operations of
Holdings and its Subsidiaries taken as a whole, (b) the ability
of Holdings or any of its Subsidiaries to perform any of its
payment or any of its other material obligations under any of the
Basic Documents to which it is a party, (c) the validity or
enforceability of any of such obligations, (d) the ability of the
Lenders and the Agent to enforce any of their respective rights
and remedies under any of the Basic Documents to which Holdings
CREDIT AGREEMENT
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or any of its Subsidiaries is a party or (e) the timely payment
of the principal of or interest on the Loans or other amounts
payable in connection therewith.
"INITIAL RESERVE EVALUATION REPORT" shall mean a report
prepared by Gaffney Cline & Associates, Inc. dated March 10,
1995, as audited by Miller & Lents, Ltd. (the results of such
audit being set forth in letters dated March 23, 1995) with
respect to Proved Reserves.
"INTERCOMPANY AGREEMENTS" shall have the meaning
assigned to such term in Section 9.13 hereof.
"INTEREST COVERAGE RATIO" shall mean, as at any date,
the ratio of (a) Cash Flow for the four complete fiscal quarters
of Holdings and its Subsidiaries ending on or most recently ended
prior to such date (or if such date is prior to April 1, 1996,
the fiscal quarter or quarters of Holdings and its Subsidiaries
that have elapsed since March 31, 1995), in each case taken as a
single accounting period, TO (b) Interest Expense for such
period.
"INTEREST EXPENSE" shall mean, for any period, interest
expense of Holdings and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP),
including, without limitation: (a) all interest in respect of
Indebtedness (including, without limitation, the interest
component of any payments in respect of Capital Lease
Obligations) accrued (whether or not actually paid during such
period) or capitalized during such period PLUS (b) the net amount
payable (or MINUS the net amount receivable) under Interest Rate
Protection Agreements during such period (whether or not actually
paid or received during such period).
"INTEREST PERIOD" shall mean, with respect to any
Eurodollar Loan, each period commencing on the date such
Eurodollar Loan is made or Converted from a Base Rate Loan or the
last day of the next preceding Interest Period for such Loan and
ending on the numerically corresponding day in the first, second
or third calendar month thereafter, as Holdings may select as
provided in Section 4.05 hereof, except that each Interest Period
that commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in
the appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may
commence before and end after any Principal Payment Date unless,
after giving effect thereto, the aggregate outstanding principal
amount of the Eurodollar Loans having Interest Periods that end
after such Principal Payment Date shall be equal to or less than
the aggregate outstanding principal amount of the Loans scheduled
to be outstanding after giving effect to the payments of
principal required to be made on such Principal Payment Date;
CREDIT AGREEMENT
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(ii) each Interest Period that would otherwise end on a day that
is not a Business Day shall end on the next succeeding Business
Day (or, if such next succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business Day);
and (iii) notwithstanding clause (i) above, no Interest Period
shall have a duration of less than one month and, if the Interest
Period for any Eurodollar Loan would otherwise be a shorter
period, such Loan shall not be available hereunder for such
period.
"INTEREST RATE PROTECTION AGREEMENT" shall mean, for
any Person, an interest rate swap, cap or collar agreement or
similar arrangement between such Person and one or more financial
institutions providing for the transfer or mitigation of interest
risks either generally or under specific contingencies.
"INVESTMENT" shall mean, for any Person (without
duplication): (a) the acquisition (whether for cash, Property,
services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any
such acquisition (including, without limitation, any "short sale"
or any sale of any securities at a time when such securities are
not owned by the Person entering into such sale); (b) the making
of any deposit with, or advance, loan or other extension of
credit to, any other Person (including the purchase of Property
from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such Person),
but excluding any such advance, loan or extension of credit
having a term not exceeding 90 days arising in connection with
the sale of inventory or supplies or the providing of oil and gas
operating, producing or marketing services by such Person in the
ordinary course of business; (c) the entering into of any
Guarantee of, or other contingent obligation with respect to,
Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or
extended to such other Person (other than Guarantees included in
the definition of Indebtedness in this Section 1.01); and (d) the
entering into of any Interest Rate Protection Agreement or
Commodity Hedging Agreement; PROVIDED that: (i) when used with
respect to Maxus Sumatra, "Investments" shall not include any
Investments made by it as the operator under the Operating
Agreement to which it is a party or the related Production
Sharing Agreement in connection with transactions under such
agreements if and to the extent the other parties to such
Operating Agreement are obligated to reimburse it for their
respective pro rata shares of such Investments; and (ii) when
used with respect to Maxus Java, "Investments" shall include any
payments made by it to the operator under the Operating Agreement
to which Maxus Java is a party or the related Production Sharing
Agreement in satisfaction of Maxus Java's obligations to
reimburse such operator for Maxus Java's pro rata share of
CREDIT AGREEMENT
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Investments made by such operator in connection with transactions
under such agreements.
"LEGAL REQUIREMENTS" shall mean all laws, rules or
regulations of any Government Authority or any order, writ,
injunction or decree of any court or governmental or regulatory
authority or agency.
"LIEN" shall mean, with respect to any Property, any
assignment in trust, mortgage, lien, pledge, charge, fiduciary or
security assignment, security interest or encumbrance of any kind
in respect of such Property (including, without limitation, any
Production Payment, advance payment or similar arrangement with
respect to minerals in place). For purposes of the foregoing, a
Person shall be deemed to own subject to a Lien any Property that
it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or
other title retention agreement (other than an operating lease)
relating to such Property.
"LIKE-KIND EXCHANGE" shall have the meaning assigned to
such term in Section 2.08(d) hereof.
"LOANS" shall mean the loans provided for in
Section 2.01 hereof, which may be Base Rate Loans and/or
Eurodollar Loans.
"MAJORITY LENDERS" shall mean Lenders having at least
66 2/3% of the aggregate amount of the Commitments or, if the
Commitments shall have terminated, Lenders holding at least
66 2/3% of the aggregate unpaid principal amount of the Loans.
"MARGIN STOCK" shall mean "margin stock" within the
meaning of Regulation U and Y.
"MAXUS" shall mean Maxus Energy Corporation, a Delaware
corporation.
"MAXUS GUARANTEE AGREEMENT" shall mean a Guarantee
Agreement substantially in the form of Exhibit B-2 hereto between
Maxus and the Agent, as the same may be modified and supplemented
and in effect from time to time.
"MERGER" shall mean the merger of YPF Acquisition Corp.
with and into Maxus pursuant to the Merger Agreement.
"MERGER AGREEMENT" shall mean the Agreement of Merger
dated as of February 28, 1995 among YPF, YPF Acquisition Corp.
and Maxus, as the same may be modified and supplemented and in
effect from time to time.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions
CREDIT AGREEMENT
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have been made by Holdings or any of its Subsidiaries or any
ERISA Affiliate and that is covered by Title IV of ERISA.
"NET AVAILABLE PROCEEDS" shall mean:
(a) in the case of any Disposition by either
Subsidiary Guarantor or any of its Subsidiaries, the amount
of Net Cash Payments received in connection with such
Disposition;
(b) in the case of any Casualty Event, the aggregate
amount of the Casualty Proceeds received by the relevant
Subsidiary Guarantor or any of its Subsidiaries in respect
of such Casualty Event net of (i) reasonable expenses
incurred by such Subsidiary Guarantor or Subsidiary in
connection therewith and (ii) contractually required
repayments of Indebtedness to the extent secured by a Lien
on the Property the subject of such Casualty Event and any
income and transfer taxes payable by such Subsidiary
Guarantor or Subsidiary in respect of such Casualty Event;
and
(c) in the case of any Subordinated Debt Issuance, the
aggregate amount of all cash received by Holdings in respect
of such Subordinated Debt Issuance net of reasonable
expenses incurred by Holdings or in connection therewith
(including, without limitation, all brokers' commissions,
lawyers', accountants' and consultants' fees and expenses,
all investment advisory, placement and underwriting fees and
any other nonrecurring expenses).
"NET CASH PAYMENTS" shall mean, with respect to any
Disposition, the aggregate amount of all cash payments, and the
fair market value of any non-cash consideration, received by the
relevant Subsidiary Guarantor or any of its Subsidiaries directly
or indirectly in connection with such Disposition; PROVIDED that
(a) Net Cash Payments shall be net of (i) the amount of any
legal, title and recording tax expenses, commissions and other
fees and expenses paid by such Subsidiary Guarantor or Subsidiary
in connection with such Disposition and (ii) any Federal, state
and local income or other taxes estimated (including, without
limitation, any foreign taxes) to be payable by Maxus, Holdings
or any of their respective Subsidiaries, as the case may be, as a
result of such Disposition (but only to the extent that
(x) amounts equal to such estimated taxes are in fact paid to
Maxus (in cash or by offset against obligations owed by Maxus to
Holdings) pursuant to an Intercompany Agreement relating to Taxes
for payment to the relevant Federal, state or local governmental
authority not later than the date such taxes are required to be
paid to the relevant Government Authority or otherwise and
(y) until such taxes are so paid, the applicable Subsidiary
Guarantor or its relevant Subsidiary establishes reserves for the
payment of such taxes in accordance with GAAP) and (b) Net Cash
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Payments shall be net of any repayments by the relevant
Subsidiary Guarantor or Subsidiaries of Indebtedness to the
extent that (i) such Indebtedness is secured by a Lien on the
Property that is the subject of such Disposition and (ii) such
Indebtedness is to be repaid as a condition to the Disposition of
such Property.
"NET EQUITY INVESTMENTS FOR CAPITAL EXPENDITURES" shall
mean, for any period, the receipt by a Subsidiary Guarantor
during such period of any (a) proceeds of a capital contribution
from Holdings made with the proceeds of a capital contribution to
Holdings from YPF or a Wholly Owned Subsidiary of YPF (other than
any of the other Relevant Obligors or their respective
Subsidiaries), plus (b) proceeds of a capital contribution from
Holdings made with the proceeds of Capex ASD, in each case only
if and to the extent that at the time of receipt of such
proceeds, a Senior Officer of the applicable Subsidiary Guarantor
or Holdings has indicated in a notice to the Agent that the same
are to be used by a Subsidiary Guarantor to make Capital
Expenditures; PROVIDED that "Net Equity Investments for Capital
Expenditures" for any period shall be reduced by any Restricted
Payments made during such period.
"NOTES" shall mean the promissory notes provided for by
Section 2.06 hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall
be modified and supplemented and in effect from time to time.
"OBLIGORS" shall mean, collectively, Holdings, the
Subsidiary Guarantors, Maxus and YPF.
"OPERATING AGREEMENTS" shall mean, collectively,
(a) the Operating Agreement dated May 5, 1967 between the
Sinclair Group (including Maxus Java) referred to therein and the
IIAPCO Group referred to therein and (b) the Operating Agreement
effective as of September 6, 1968 by and among the parties
(including Maxus Sumatra) referred to therein, in each case, as
such agreements have heretofore been modified, renewed, extended
and supplemented and shall hereafter be modified, renewed,
extended and supplemented and in effect from time to time.
"OPERATING EXPENSES" shall mean, for any period, the
sum of the following for Holdings and its Subsidiaries
(determined on a consolidated basis in accordance with GAAP, to
the extent applicable) to the extent paid during such period
(without duplication), which shall be treated as a single
accounting period: (a) expenses (including lease operating
expenses) incurred in producing natural gas, oil and other
hydrocarbon products and providing related services (including,
without limitation, royalties paid or payable during such period
but only to the extent reflected in the computation of gross
operating revenues for purposes of determining Cash Flow for such
period); (b) Taxes (other than Taxes of any United States
CREDIT AGREEMENT
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Government Authority paid in respect of the income or profits of
the Subsidiary Guarantors and their respective Subsidiaries);
(c) general and administrative and other overhead expenditures;
(d) Capital Expenditures made during such period in respect of
Hydrocarbon Properties; and (e) all other production and
operating expenses paid; PROVIDED that, in no event shall any
non-cash item of expense be included in the determination of
Operating Expenses.
"PAYMENT DEFAULT" shall mean any failure of Holdings to
pay any principal of or interest on the Loans when due.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"PERMITTED INVESTMENTS" shall mean: (a) direct
obligations of the United States of America, or of any agency
thereof, or obligations guaranteed as to principal and interest
by the United States of America, or of any agency thereof, in
each case maturing not more than 180 days from the date of
acquisition thereof; (b) marketable general obligations issued by
any state of the United States of America maturing within
180 days from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings generally
obtainable from either Standard & Poor's Ratings Group or Moody's
Investors Service, Inc.; (c) Dollar denominated domestic and
Eurodollar certificates of deposit, time or demand deposits or
bankers' acceptances and maturing within 180 days from the date
of acquisition issued or guaranteed by, or placed with, and money
market deposit accounts issued or offered by: (i) any Lender,
(ii) any other commercial bank organized under the laws of the
United States of America or any state thereof or the District of
Columbia (or the holding company of which such bank is a
subsidiary having) having combined capital, surplus and undivided
profits (less any undivided losses) of not less than
$1,000,000,000, and (iii) any branch located in the United States
of America of a commercial bank organized under the laws of the
United Kingdom, Canada or Japan (or the holding company of which
such commercial bank is a subsidiary) having a combined capital,
surplus and undivided profits (less any undivided losses) of not
less than $1,000,000,000; (d) commercial paper (i) rated A-1 or
better or P-1 by Standard & Poor's Ratings Group or Moody's
Investors Services, Inc., respectively, or (ii) rated A-2 or P-2
or better by Standard & Poor's Ratings Group or Moody's Investors
Services, Inc., respectively, issued by any Lender (or any other
Person that owns, directly or indirectly, not less than 80% of
the voting securities of such Lender) having capital surplus and
undivided profits (less any undivided losses) of at least
$1,000,000,000, in each case maturing not more than 180 days from
the date of acquisition thereof and so long as the same
(x) provides for the payment of principal and interest and
(y) are not subject to any contingency regarding the payment of
CREDIT AGREEMENT
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principal or interest; and (e) fully collateralized repurchase
agreements with a term of not more than 30 days for underlying
securities of the types described in clauses (a) and (b) of this
definition, entered into with any institution meeting the
qualifications specified in subclauses (i) through (iii) of
clause (c) of this definition.
"PERSON" shall mean any individual, corporation,
company, voluntary association, partnership, joint venture,
trust, unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof).
"PERTAMINA" shall mean Perusahaan Pertambangan Minyak
Dan Gas Bumi Negara, an Indonesian state enterprise.
"PLAN" shall mean an employee benefit or other plan
established or maintained by Holdings or any ERISA Affiliate and
that is covered by Title IV of ERISA, other than a Multiemployer
Plan.
"PLEDGE AGREEMENT" shall mean a Pledge Agreement
substantially in the form of Exhibit D hereto between Holdings
and the Agent, as the same may be modified and supplemented and
in effect from time to time.
"POST-DEFAULT RATE" shall mean, in respect of (a) any
principal of any Loan that is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum
during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to
3 1/2% PLUS the Base Rate as in effect from time to time PLUS the
Applicable Margin for Base Rate Loans (PROVIDED that, if the
amount so in default is principal of a Eurodollar Loan and the
due date thereof is a day other than the last day of the current
Interest Period therefor, the "Post-Default Rate" for such
principal shall be, for the period from and including such due
date to but excluding the last day of such Interest Period,
3 1/2% PLUS the interest rate for such Loan as provided in
Section 3.02(b) hereof) and (b) interest on any Loan or any other
amount payable to the Agent or the Lenders hereunder, in each
case, that is not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the period
from and including the due date to but excluding the date on
which such amount is paid in full equal to 3 1/2% PLUS the Base
Rate as in effect from time to time PLUS the Applicable Margin
for Base Rate Loans.
"PRESENT VALUE OF RESERVES" shall mean, as of any date,
estimated net cash flow expressed in Dollars (after development
expenses and production taxes) in respect of Proved Reserves
attributable to Hydrocarbon Properties calculated in accordance
with risk factors and product pricing models for hydrocarbon
properties in effect at the time such estimate is made and
CREDIT AGREEMENT
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discounted to present value at a discount rate for Proved
Reserves acceptable, in each case, to the Majority Lenders.
"PRIME RATE" shall mean the rate of interest from time
to time announced by Chase at the Principal Office as its prime
commercial lending rate.
"PRINCIPAL OFFICE" shall mean the principal office of
Chase, located on the date hereof at 1 Chase Manhattan Plaza, New
York, New York 10081.
"PRINCIPAL PAYMENT DATES" shall mean the Quarterly
Dates falling on or nearest to March 31, June 30, September 30
and December 31 of each year, commencing with March 31, 1997
through and including December 31, 2002.
"PRODUCTION PAYMENTS" shall mean Dollar-Denominated
Production Payments and Volumetric Production Payments.
"PRODUCTION SHARING AGREEMENTS" shall mean,
collectively, (a) the Production Sharing Contract for Southeast
Sumatra dated as of September 6, 1968 originally by and between
Pertamina and Independent Indonesian American Petroleum Company
and the other contractor parties referred to therein and (b) the
Production Sharing Contract for Northwest Java dated as of
April 18, 1966 originally by and between Pertamina, Independent
Indonesian American Petroleum Company and the other "Contractors"
referred to therein, in each case, as such agreements have
heretofore been modified, renewed, extended and supplemented and
shall hereafter be modified, renewed, extended and supplemented
and in effect from time to time.
"PROPERTY" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible.
"PROVED RESERVES" shall mean reserves (to the extent of
the net interest of either Subsidiary Guarantor or any of its
Subsidiaries therein including, in the case of a Subsidiary
Guarantor, its net interest in reserves represented by its
Indonesian Interests) comprised of quantities of hydrocarbons
which geologic and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known reservoirs
under existing economic and operating conditions.
"QUARTERLY DATES" shall mean the last Business Day of
March, June, September and December in each year, the first of
which shall be June 30, 1995.
"REDETERMINATION" shall mean a redetermination of the
Borrowing Base provided for by Section 1.04 hereof.
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"REDETERMINATION DATE" shall have the meaning assigned
to such term in Section 1.04(b)(ii) hereof.
"REDETERMINATION REVIEW" shall have the meaning
assigned to such term in Section 1.04(c) hereof.
"REFERENCE LENDERS" shall mean Chase and such other
Lenders as may be agreed by Chase and Holdings from time to time
(but in no event shall there be more than three Reference Lenders
at any time) or their respective Applicable Lending Offices, as
the case may be.
"REGULATION A", "REGULATION D", "REGULATION U" AND
"REGULATION X" shall mean, respectively, Regulations A, D, U and
X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in
effect from time to time.
"REGULATORY CHANGE" shall mean, with respect to any
Lender, any change after the date hereof in U.S. Federal, state
or foreign law or regulations (including, without limitation,
Regulation D) or the adoption or making after such date of any
interpretation, directive or request applying to a class of banks
including such Lender of or under any U.S. Federal, state or
foreign law or regulations (whether or not having the force of
law and whether or not failure to comply therewith would be
unlawful) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.
"RELEASE" shall mean any release, spill, emission,
leaking, pumping, injection, deposit, disposal or discharge of
Environmental Materials into the environment; as used herein, the
term "Released" shall have a correlative meaning.
"RELEVANT OBLIGORS" shall mean, collectively, the
Subsidiary Guarantors and Holdings.
"RELEVANT PARTY" shall have the meaning assigned to
such term in Section 10(b) hereof.
"RELEVANT DATE" shall have the meaning assigned to such
term in the definition of "GAAP" in this Section 1.01.
"REORGANIZATION TRANSACTIONS" shall mean, collectively,
the transactions described in Schedule VIII hereto, all of which
are to occur on or before the Closing Date.
"REPORT DELIVERY DATE" shall mean each of March 1 and
September 1 in each year; provided that if any such day is not a
Business Day, the Report Delivery Date shall be the immediately
succeeding Business Day.
CREDIT AGREEMENT
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"RESERVE EVALUATION REPORT" shall mean the Initial
Reserve Evaluation Report and each subsequent unsuperseded report
that is prepared on a basis reasonably consistent with the
Initial Reserve Evaluation Report and is otherwise satisfactory
in form and substance to the Majority Lenders.
"RESTRICTED PAYMENTS" shall mean (a) dividends (in
cash, Property or obligations) on, or other payments or
distributions on account of, or the setting apart of money for a
sinking or other analogous fund for, or the purchase, redemption,
retirement or other acquisition of, any shares of any class of
stock of Holdings or of any warrants, options or other rights to
acquire the same (or to make any payments to any other Person,
such as "phantom stock" payments, where the amount thereof is
calculated with reference to the fair market or equity value of
Holdings or any of its Subsidiaries), but excluding dividends
payable solely in shares of common stock of Holdings, and
(b) payments of interest on Affiliate Subordinated Indebtedness.
"SALES CONTRACTS" shall mean any contract or agreement
for the sale by either Subsidiary Guarantor or any of its
Subsidiaries of crude oil or other hydrocarbon products.
"SENIOR OFFICER" shall mean, when used with respect to
an Obligor, the president, the principal executive officer, the
principal operating officer or the principal financial officer of
such Obligor.
"SUBORDINATED DEBT ISSUANCE" shall mean the incurrence
by Holdings of any Subordinated Indebtedness referred to in
Section 9.07(c) hereof.
"SUBORDINATED INDEBTEDNESS" shall mean Affiliate
Subordinated Indebtedness and other unsecured Indebtedness of
Holdings for borrowed money (a) for which Holdings is directly
and primarily liable, (b) in respect of which none of its
Subsidiaries is contingently or otherwise obligated, (c) that is
(except in the case of Affiliate Subordinated Indebtedness
subject to an Affiliate Subordination Agreement) subordinated to
the obligations of Holdings to pay principal of, and interest on,
the Loans and the Notes and all other amounts payable by Holdings
hereunder on terms of subordination in form and substance
satisfactory to the Majority Lenders, and (d) (except in the case
of Affiliate Subordinated Indebtedness subject to an Affiliate
Subordination Agreement) the other terms of which (including,
without limitation, terms relating to the amortization of such
Subordinated Indebtedness, interest thereon, mandatory
prepayments and redemptions thereof and covenants and events of
default with respect thereto) are in form and substance
satisfactory to the Majority Lenders.
"SUBSEQUENT REDETERMINATION" shall have the meaning
assigned to such term in Section 2.08(a) hereof.
CREDIT AGREEMENT
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"SUBSIDIARY" shall mean, with respect to any Person,
any corporation, partnership or other entity of which at least a
majority of the securities or other ownership interests having by
the terms thereof ordinary voting power to elect a majority of
the board of directors or other persons performing similar
functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other
ownership interests of any other class or classes of such
corporation, partnership or other entity shall have or might have
voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by such
Person or one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries of such Person.
"SUBSTANTIAL ASSET SALE" shall mean, at any time, any
Disposition or Dispositions, other than Dispositions described in
clause (iii) of the third paragraph of Section 9.05 hereof, the
aggregate Net Available Proceeds of which have exceeded
$100,000,000 since the immediately preceding Determination Date.
"SUPPORT DOCUMENTS" shall mean, collectively, the
Account Pledge Agreement, the Pledge Agreement, the Credit
Agricole Account Agreement, the Maxus Guarantee Agreement, the
YPF Guarantee Agreement and all Uniform Commercial Code financing
statements required by the Account Pledge Agreement and the
Pledge Agreement to be filed with respect to the security
interests in personal Property created pursuant thereto.
"TANGIBLE NET WORTH" shall mean, as at any date, the
sum for Holdings and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP),
of the following:
(a) the amount of capital stock of Holdings; PLUS
(b) the amount of surplus and retained earnings (or,
in the case of a surplus or retained earnings deficit, MINUS
the amount of such deficit); MINUS
(c) the sum of the following: cost of treasury shares
and the book value of all assets that should be classified
as intangibles (without duplication of deductions in respect
of items already deducted in arriving at surplus and
retained earnings) but in any event including goodwill,
minority interests, research and development costs,
trademarks, trade names, copyrights, patents and franchises,
unamortized debt discount and expense, all reserves for
losses, contingencies, or other liabilities (but only to the
extent such reserves were not deducted in arriving at the
amounts in clause (a) or (b) above) and any write-up in the
book value of assets resulting from a revaluation thereof
subsequent to June 16, 1995 (excluding any adjustment to the
CREDIT AGREEMENT
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net worth of Holdings resulting from the Merger and the
transactions contemplated thereby after such date).
"TAXES" shall mean all taxes, levies, imposts, stamp
taxes, duties, charges to tax, fees, deductions, withholdings, or
charges, which are imposed, levied, collected, withheld or
assessed by any Government Authority as of the date of this
Agreement or at any time in the future together with interest
thereon and penalties with respect thereto, if any, and any
payments of principal, interest, charges, fees or other amounts
made on or in respect thereof, including, without limitation,
production and severance taxes and windfall profit taxes and
"Tax" and "Taxation" shall be construed accordingly.
"TYPE" shall have the meaning assigned to such term in
Section 1.03 hereof.
"UNRESTRICTED CASH AND CASH EQUIVALENTS" shall mean
cash and cash equivalents of Holdings and its Subsidiaries that
are (a) subject to no restrictions on the use thereof by Holdings
or any of its Subsidiaries pursuant to any agreement or
understanding with any Person and (b) not set aside for, nor
dedicated to, any particular uses other than the payment of
principal of, and interest on, the Loans and the Notes, and the
other amounts payable by Holdings and its Subsidiaries to the
Agent and the Lenders hereunder.
"VOLUMETRIC PRODUCTION PAYMENTS" shall mean production
payment obligations of either Subsidiary Guarantor or any of its
Subsidiaries which are payable from a specified share of
production from specific Properties, together with all
undertakings and obligations in connection therewith.
"WHOLLY OWNED SUBSIDIARY" shall mean, with respect to
any Person, any corporation, partnership or other entity of which
all of the equity securities or other ownership interests (other
than, in the case of a corporation, directors' qualifying shares)
are directly or indirectly owned or controlled by such Person or
one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
"YPF" shall mean YPF Sociedad Anonima, an Argentine
sociedad anonima.
"YPF GUARANTEE AGREEMENT" shall mean a Guarantee
Agreement substantially in the form of Exhibit B-1 hereto between
YPF and the Agent, as the same may be modified and supplemented
and in effect from time to time.
1.02 ACCOUNTING TERMS AND DETERMINATIONS.
(a) Except as otherwise provided in this Agreement,
all computations and determinations as to accounting or financial
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matters and all financial statements to be delivered pursuant to
this Agreement shall be made and prepared in accordance with GAAP
(including principles of consolidation where appropriate), and
all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP.
(b) If any change in GAAP after the date of this
Agreement shall be required to be applied to transactions then or
thereafter in existence, and a violation of or default under one
or more provisions of this Agreement shall have occurred or in
the opinion of Holdings would likely occur which would not have
occurred or be likely to occur if no change in accounting
principles had taken place:
(i) the parties agree that such violation or default
shall not constitute a Default for a period of 60 days from
the date Holdings notifies the Agent of the application of
this Section 1.02(b) identifying such change and the
provisions of this Agreement affected thereby;
(ii) the parties agree in such event to negotiate in
good faith an amendment of this Agreement which shall
approximate to the extent possible the economic effect of
the original financial covenants after taking into account
such change in GAAP; and
(iii) if the parties are unable to agree on such an
amendment within such 60-day period, Holdings shall have the
option of (A) prepaying the Loans (pursuant to Section 2.07
and the other applicable provisions hereof) within 120 days
from the date Holdings notifies the Agent of the application
of this Section 1.02(b) or (B) making all future
calculations by application of generally accepted accounting
principles applied on a basis consistent with those in
effect immediately prior to such change in generally
accepted accounting principles. If Holdings does not
exercise either such option within said period by written
notice to the Agent, then as used in this Agreement, "GAAP"
shall mean generally accepted accounting principles in
effect at the Relevant Date.
(c) If any change in GAAP after the date of this
Agreement shall be required to be applied to transactions or
conditions then or thereafter in existence, and the Agent shall
assert that the effect of such change is or shall likely be to
distort materially the effect of any of the definitions of
financial terms in Section 1 hereof or any of the financial
covenants of the Relevant Obligors in Section 9 hereof (the
"FINANCIAL PROVISIONS"), so that the intended economic effect of
any of the Financial Provisions will not in fact be accomplished:
(i) the Agent shall notify Holdings of such assertion,
specifying the change in GAAP which is objected to, and
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until otherwise determined as provided below, the specified
change in GAAP shall not be made by the Relevant Obligors in
their respective financial statements for the purpose of
applying the Financial Provisions; and
(ii) the parties shall follow the procedures set forth
in paragraph (ii) and the first sentence of paragraph (iii)
of subsection (b) of this Section 1.02. If the parties are
unable to agree on an amendment as provided in said
paragraph (ii) and if Holdings does not exercise the option
set forth in the first sentence of said paragraph (iii)
within the specified period, then as used in this Agreement
"GAAP" shall mean generally accepted accounting principles
in effect at the Relevant Date, except that the specified
change in GAAP which is objected to by the Agent shall not
be made in applying the Financial Provisions.
(d) None of the Relevant Obligors will change the last
day of its fiscal year from December 31 of each year, or the last
days of the first three fiscal quarters in each of its fiscal
years from March 31, June 30 and September 30 of each year,
respectively.
1.03 TYPES OF LOANS. Loans hereunder are
distinguished by "Type". The "Type" of a Loan refers to whether
such Loan is a Base Rate Loan or a Eurodollar Loan, each of which
constitutes a Type.
1.04 BORROWING BASE.
(a) BORROWING BASE REPORTS. The Subsidiary Guarantors
have heretofore furnished to the Agent and the Lenders the
Initial Reserve Evaluation Report. On or before each Report
Delivery Date, the Subsidiary Guarantors shall furnish to the
Agent (for delivery to the Lenders) and Holdings an updated
Reserve Evaluation Report as provided in Sections 9.01(h) and (i)
hereof.
(b) BORROWING BASE.
(i) During the period commencing on the date hereof
and ending on the date the first redetermination of the
Borrowing Base becomes effective as provided in clause (ii)
of this Section 1.04(b), the Borrowing Base shall be
$175,000,000 which amount has been determined on the basis
of the Initial Reserve Evaluation Report (with such
adjustments to the rates, factors, values, estimates,
assumptions and computations set forth in such Initial
Reserve Evaluation Report as have been approved by the
Majority Lenders).
(ii) As promptly as practicable following the receipt
of the Reserve Evaluation Report on each Report Delivery
CREDIT AGREEMENT
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Date, the Agent (in consultation with the Lenders) shall
(A) redetermine the Borrowing Base on the basis of such
Reserve Evaluation Report (or, in the case of a
Redetermination Review, the Reserve Evaluation Report then
in effect) in the manner provided in clause (iii) of this
Section 1.04(b), (B) notify the Lenders of such
redetermination and (C) if such redetermination is approved
by the Majority Lenders, notify Holdings and the Lenders of
the Borrowing Base as so redetermined and such redetermined
Borrowing Base shall become effective on the Determination
Date immediately following the Report Delivery Date for such
Reserve Evaluation Report (or such later date as notified by
the Agent to Holdings and the Lenders) and shall remain
effective until again redetermined; PROVIDED that, with
respect to any redetermination of the Borrowing Base as a
result of a Redetermination Review, the Borrowing Base as so
redetermined shall become effective on the date the Agent
shall notify Holdings and the Lenders thereof. Each date on
which a redetermination of the Borrowing Base becomes
effective as provided in the preceding sentence is herein
called a "REDETERMINATION DATE".
(iii) Each redetermination by the Agent of the Borrowing
Base (and the Majority Lenders' approval thereof) shall be
made on the basis of parameters which may include the
Present Value of Reserves attributable to Hydrocarbon
Properties as set forth in the related Reserve Evaluation
Report, as adjusted by the Agent with the approval of the
Majority Lenders, in its and their reasonable discretion,
using the rates, factors, values, estimates, assumptions and
computations set forth in such Reserve Evaluation Report and
any other relevant information or factors including, without
limitation, any Indebtedness or other obligations that may
be incurred by the Subsidiary Guarantors and their
Subsidiaries, any Hydrocarbon Properties acquired or sold by
either Subsidiary Guarantor or any of its Subsidiaries after
the Determination Period for such Reserve Evaluation Report
(which, in the case of the Hydrocarbon Properties acquired
by either Subsidiary Guarantor or any of its Subsidiaries,
are not subject to any Lien other than Liens permitted by
Section 9.06 hereof and which shall take into consideration
any Liens existing on Hydrocarbon Properties at the time of
such acquisition by such Subsidiary Guarantor or Subsidiary)
and any Proved Reserves not reflected in such Reserve
Evaluation Report but are attributable to Hydrocarbon
Properties covered by such Reserve Evaluation Report (such
adjustments being herein called "BORROWING BASE
ASSUMPTIONS") and, in the case of any Redetermination as a
result of a Redetermination Review, the changes in the
Borrowing Base Assumptions specified in the related notice
pursuant to Section 1.04(c) hereof. Notwithstanding the
foregoing (but without duplication), (i) the Net Available
Proceeds of any Disposition that any of the Relevant
CREDIT AGREEMENT
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Obligors has indicated will be reinvested in Property of
comparable value, in accordance with and in the amounts
provided in Section 2.08(d) hereof (PROVIDED that such
Disposition occurred not more than 90 days prior to the
applicable Redetermination Date), shall be included in the
calculation of the Borrowing Base and (ii) the amount of any
Casualty Proceeds (x) the Subsidiary Guarantors reasonably
anticipate will be received within 180 days after the
relevant Redetermination Date (whether or not the applicable
Subsidiary Guarantor intends to repair or replace the
Property affected by such Casualty Event) and (y) received
by a Subsidiary Guarantor and being used by such Subsidiary
Guarantor in connection with the repair or replacement of
the Property affected by such Casualty Event shall, in each
case, be included in the calculation of the Borrowing Base.
(iv) As used herein, "BORROWING BASE" shall mean the
amount specified in clause (i) of this Section 1.04(b)
hereof as redetermined from time to time as provided in
clauses (ii) and (iii) of this Section 1.04(b), each such
redetermination to become effective as provided in said
clause (ii).
(c) REDETERMINATION REVIEW. At any time prior to
60 days following the receipt by the Lenders of any partial
prepayment of the Loans from the proceeds of a Substantial Asset
Sale as provided in Section 2.08(d) hereof, the Majority Lenders
shall have the right to request that the Agent redetermine the
Borrowing Base then in effect (a "REDETERMINATION REVIEW"). As
promptly as reasonably practicable after receipt of a request for
a Redetermination Review, the Agent shall endeavor to redetermine
the Borrowing Base as then in effect as provided in clauses (ii)
and (iii) of Section 1.04(b) hereof on the basis of the Reserve
Evaluation Reports used to determine such Borrowing Base and any
changes in the Borrowing Base Assumptions used to determine such
Borrowing Base as are specified in such request and approved by
the Majority Lenders or as the Agent, with the approval of the
Majority Lenders, may deem appropriate; PROVIDED that, in no
event shall any Redetermination Review or any such
Redetermination limit any obligation of Holdings then in effect
to prepay the Loans in accordance with Section 2.08(a) hereof as
a result of a prior Redetermination of the Borrowing Base.
(d) DETERMINATIONS, ETC. All determinations and
redeterminations and adjustments of the Borrowing Base or any
Borrowing Base Assumption by the Agent or the Majority Lenders
provided for in this Section 1.04 or in the definition of
"Present Value of Reserves" in Section 1.01 hereof, including any
approvals or disapprovals of a determination or redetermination
of the Borrowing Base or any Borrowing Base Assumption or any
adjustment thereof shall be made on a reasonable basis, in good
faith and in a manner reasonably consistent with the basis on
which the initial Borrowing Base was determined.
CREDIT AGREEMENT
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1.05 COPIES OF DOCUMENTS. Whenever this Agreement
provides that the Agent will distribute to the Lenders documents
provided by any of the Relevant Obligors, such Relevant Obligor
shall furnish to the Agent a copy of such document for each
Lender.
1.06 SUBSIDIARIES. As of the date hereof Holdings has
no Subsidiaries other than the Subsidiary Guarantors and neither
Subsidiary Guarantor has any Subsidiaries. Without limiting the
obligation of the Relevant Obligors to obtain the consent of the
Majority Lenders to the formation or acquisition by either
Subsidiary Guarantor of any Subsidiary (or any additional
Subsidiary in the case of Holdings), all references in this
Agreement to Subsidiaries of any of the Relevant Obligors (except
with respect to Holdings and the Subsidiary Guarantors as
Subsidiaries of Holdings) shall be deemed inapplicable until such
time as an additional Subsidiary of any such Subsidiary Guarantor
shall be so formed or acquired.
Section 2. COMMITMENTS, LOANS, NOTES AND PREPAYMENTS.
2.01 LOANS. Each Lender severally agrees, on the
terms and conditions of this Agreement, to make a term loan to
Holdings in Dollars on or before the Commitment Termination Date
in an aggregate principal amount up to but not exceeding the
amount of the Commitment of such Lender. Thereafter Holdings may
Convert Loans of one Type into Loans of another Type (as provided
in Section 2.07 hereof) or Continue Loans of one Type as Loans of
the same Type (as provided in Section 2.07 hereof); PROVIDED that
no more than eight separate Interest Periods in respect of
Eurodollar Loans from each Lender may be outstanding at any one
time.
2.02 BORROWINGS. Holdings shall give the Agent notice
of the borrowing hereunder as provided in Section 4.05 hereof.
Not later than 1:00 p.m. New York time on the date specified for
such borrowing, each Lender shall make available the amount of
the Loan or Loans to be made by it on such date to the Agent, at
account number NYAO-DI-900-9-000002 maintained by the Agent with
Chase at the Principal Office, in immediately available funds,
for account of Holdings. The amount so received by the Agent
shall, subject to the terms and conditions of this Agreement, be
made available to Holdings by depositing the same, in immediately
available funds, in an account of Holdings (designated by
Holdings) maintained with Chase at the Principal Office.
2.03 TERMINATION OF COMMITMENTS. Any portion of the
Commitments not used on the Closing Date shall be automatically
terminated.
2.04 LENDING OFFICES. The Loans of each Type made by
each Lender shall be made and maintained at such Lender's
Applicable Lending Office for Loans of such Type.
CREDIT AGREEMENT
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2.05 SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT. The
failure of any Lender to make any Loan to be made by it on the
date specified therefor shall not relieve any other Lender of its
obligation to make its Loan on such date, but neither any Lender
nor the Agent shall be responsible for the failure of any other
Lender to make a Loan to be made by such other Lender, and
(except as otherwise provided in Section 4.06 hereof) no Lender
shall have any obligation to the Agent or any other Lender for
the failure by such Lender to make any Loan required to be made
by such Lender. The amounts payable by Holdings at any time
hereunder and under the Notes to each Lender shall be a separate
and independent debt and each Lender shall be entitled to protect
and enforce its rights arising out of this Agreement and the
Notes, and, to the extent permitted by law, it shall not be
necessary for any other Lender or the Agent to consent to, or be
joined as an additional party in, any proceedings for such
purposes, PROVIDED that, in no event may the obligations
hereunder and under the Notes be accelerated except in accordance
with Section 10 hereof.
2.06 NOTES.
(a) The Loan made by each Lender shall be evidenced by
a single promissory note of Holdings substantially in the form of
Exhibit A hereto, dated the date hereof, payable to such Lender
in a principal amount equal to the amount of its Commitment as
originally in effect and otherwise duly completed.
(b) The date, amount, Type, interest rate and duration
of each Interest Period (if applicable) of or for each Loan made
by each Lender to Holdings, and each payment made on account of
the principal thereof, shall be recorded by such Lender on its
books and, prior to any transfer of the Note held by it, endorsed
by such Lender on the schedule attached to such Note or any
continuation thereof; PROVIDED that the failure of such Lender to
make any such recordation or endorsement shall not affect the
obligations of Holdings to make a payment when due of any amount
owing hereunder or under such Note in respect of the Loans.
(c) No Lender shall be entitled to have its Note
substituted or exchanged for any reason, or subdivided for
promissory notes of lesser denominations, except in connection
with a permitted assignment of all or any portion of such
Lender's Loan and Note pursuant to Section 12.06 hereof or a
required assignment of all of such Lender's Loans as contemplated
by Section 5.07 hereof (and, (x) if requested by any Lender or in
connection with any such required assignment, Holdings agrees to
so exchange any Note and (y) promptly following delivery to any
Lender of replacement Note(s), such Lender (if such Lender is an
assigning Lender) agrees to deliver to Holdings such Lender's
existing Note marked canceled).
CREDIT AGREEMENT
<PAGE>
- 31 -
2.07 OPTIONAL PREPAYMENTS AND CONVERSIONS OR
CONTINUATIONS OF LOANS. Subject to Section 4.04 hereof, Holdings
shall have the right to prepay Loans, or to Convert Loans of one
Type into Loans of another Type or Continue Loans of one Type as
Loans of the same Type, at any time or from time to time,
PROVIDED that: (a) Holdings shall give the Agent notice of each
such prepayment, Conversion or Continuation as provided in
Section 4.05 hereof (and, upon the date specified in any such
notice of prepayment, the amount to be prepaid shall become due
and payable hereunder); (b) Eurodollar Loans may be prepaid or
Converted only on the last day of an Interest Period for such
Loans; and (c) (i) the aggregate principal amount of any
prepayment of Loans made prior to March 31, 1997 shall be applied
first to the Loans outstanding as at the date of such prepayment
and (ii) 50% of the aggregate principal amount of any prepayment
of the Loans made on or after March 31, 1997 shall be applied to
the installments of the Loans in the inverse order of their
maturities and the balance shall be applied to the remaining
installments of the Loans ratably. Notwithstanding the
foregoing, and without limiting the rights and remedies of the
Lenders under Section 10 hereof, in the event that any Event of
Default shall have occurred and be continuing, the Agent may (and
at the request of the Majority Lenders shall) suspend the right
of Holdings to Convert any Loan into a Eurodollar Loan, or to
Continue any Loan as a Eurodollar Loan, in which event all
Eurodollar Loans shall be Converted (on the last day(s) of the
respective Interest Periods therefor) into Base Rate Loans.
2.08 MANDATORY PREPAYMENTS AND CREDITS TO BORROWING
BASE REDETERMINATION SUB-ACCOUNT.
(a) BORROWING BASE. (i) In the event that, after
giving effect to any Redetermination (other than pursuant to
a Redetermination Review) a Borrowing Base Deficiency
exists, Holdings shall pay to the Agent for credit to the
Borrowing Base Redetermination Sub-Account an amount equal
to such Borrowing Base Deficiency in five equal consecutive
monthly installments, the first such installment to be
payable 30 days after such Redetermination Date and the
remaining four such installments to be paid on the
corresponding day in each of the four succeeding months (or,
if any such day is not a Business Day, on the next
succeeding Business Day); PROVIDED that:
(A) if any such installments remain to be paid as
of the immediately succeeding Redetermination Date (a
"SUBSEQUENT REDETERMINATION DATE"), such installments
shall cease to be payable as of such Subsequent
Redetermination Date (but without affecting the
obligation of Holdings to make payments to the Agent
for credit to the Borrowing Base Redetermination Sub-
Account if and to the extent required by this
CREDIT AGREEMENT
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Section 2.08(a) in connection with any Borrowing Base
Deficiency as of such Subsequent Redetermination Date);
(B) in the event that a Borrowing Base Deficiency
exists as of such Subsequent Redetermination Date (the
"SUBSEQUENT BORROWING BASE DEFICIENCY") and (x) such
Subsequent Borrowing Base Deficiency is equal to or
less than the Borrowing Base Deficiency as of the
preceding Redetermination Date, Holdings shall prepay
the Loans in an amount equal to such Subsequent
Borrowing Base Deficiency not later than one Business
Day after such Subsequent Redetermination Date, or
(y) if such Subsequent Borrowing Base Deficiency is
greater than the Borrowing Base Deficiency as of such
preceding Redetermination Date, prepay the Loans in an
amount equal to the Borrowing Base Deficiency as of
such preceding Redetermination Date not later than one
Business Day after such Subsequent Redetermination Date
and pay to the Agent the difference between such
Subsequent Borrowing Base Deficiency and such earlier
Borrowing Base Deficiency in five equal consecutive
monthly installments as provided above; and
(C) in the event that on any date there exists a
Borrowing Base Excess (or the difference between the
outstanding principal amount of the Loans as of such
date and the Borrowing Base as redetermined on the then
most recent Redetermination Date is 0), unless a
Payment Default or Event of Default shall have occurred
and be continuing, the Agent shall, upon the request of
Holdings, not later than the second Business Day
following the receipt of such request, debit the
Borrowing Base Redetermination Sub-Account in an amount
equal to the collected balance therein (or such lesser
amount as Holdings shall request) and pay such amount
to Holdings by crediting such amount to the Operating
Account (as defined in the Account Pledge Agreement).
(ii) In the event that, after giving effect to any
Redetermination pursuant to a Redetermination Review, the
Borrowing Base as redetermined is less than the aggregate
principal amount of the Loans outstanding on the related
Redetermination Date (minus any portion of a Borrowing Base
Repayment Amount that has not been paid), Holdings shall
prepay the principal of the Loans in an amount equal to such
excess on the date 30 days following such Redetermination
Date.
(b) CASUALTY EVENTS. Upon the date 30 days following
the receipt by either Subsidiary Guarantor or any of its
Subsidiaries of any Casualty Proceeds in respect of any Casualty
Event affecting any Property of such Subsidiary Guarantor or
Subsidiary (or upon such earlier date as Subsidiary Guarantor or
CREDIT AGREEMENT
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such Subsidiary, as the case may be, shall have determined not to
repair or replace the Property affected by such Casualty Event),
Holdings shall prepay the Loans in an aggregate amount, if any,
equal to 100% of the Net Available Proceeds of such Casualty
Event not theretofore applied by such Subsidiary Guarantor or
Subsidiary to the repair or replacement of such Property, such
prepayment to be effected in each case in the manner specified in
paragraph (d) of this Section 2.08, PROVIDED that no prepayment
shall be required to the extent the applicable Subsidiary
Guarantor or Subsidiary is required by any laws of the Republic
of Indonesia or by the Indonesian Agreements to apply such
Casualty Proceeds to the repair, replacement or development of
any tangible Properties relating to its Indonesian Interests.
(c) SUBORDINATED INDEBTEDNESS. Upon any Subordinated
Debt Issuance, Holdings shall prepay principal of the Loans in an
aggregate principal amount equal to 100% of the Net Available
Proceeds of such Subordinated Debt Issuance, such prepayment to
be effected in the manner specified in paragraph (e) of this
Section 2.08.
(d) SALE OF ASSETS. Without limiting the obligation
of the Relevant Obligors to obtain the consent of the Majority
Lenders pursuant to Section 9.05 hereof to any Disposition not
otherwise permitted hereunder, in the event that the Net
Available Proceeds of any Disposition (herein, the "CURRENT
DISPOSITION"), and of all prior Dispositions made by Subsidiary
Guarantors and their Subsidiaries as to which a prepayment has
not yet been made under this Section 2.08(d), shall exceed
$2,000,000 (in the aggregate for both Subsidiary Guarantors and
their Subsidiaries) in any fiscal year then, no later than two
Business Days following the occurrence of the Current
Disposition, Holdings shall deliver to the Lenders a statement,
certified by a Senior Officer of Holdings, in form and detail
satisfactory to the Agent, of the amount of the Net Available
Proceeds of the Current Disposition and of all such prior
Dispositions and a description of the Property subject to such
Current Disposition and shall indicate whether (i) such Net
Available Proceeds will be reinvested by the relevant Subsidiary
Guarantor or Subsidiary in Property of comparable value (which
may include Property received in consideration of such
Disposition) or (ii) the Loans will be prepaid in an aggregate
amount equal to 100% of the Net Available Proceeds of the Current
Disposition and such prior Dispositions (in excess of
$2,000,000); PROVIDED that if the Net Available Proceeds of the
Current Disposition and all such prior Dispositions subsequent to
the Determination Date immediately preceding such Current
Disposition exceed $12,500,000 (or $25,000,000 in the case of a
like-kind exchange where no cash or cash equivalents constitute
any material part of the consideration for such Disposition and
where the consideration is received contemporaneously with such
Disposition (a "LIKE-KIND EXCHANGE"), Holdings shall prepay the
Loans in an aggregate amount equal to 100% of the Net Available
CREDIT AGREEMENT
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Proceeds of the Current Disposition and such prior Dispositions
(in excess of $12,500,000 or $25,000,000, as the case may be).
If such statement has indicated that the Net Available Proceeds
are to be reinvested in Property of comparable value, such
reinvestment shall be completed not later than 90 days following
the date of the Current Disposition.
Any prepayment to be made pursuant to this
Section 2.08(d) shall be applied as follows: (i) if made at any
time prior to March 31, 1997, such prepayment shall be applied to
the aggregate principal amount of the Loans then outstanding and
(ii) if made on and after March 31, 1997, (x) with respect to the
first $50,000,000 of prepayments of principal in any fiscal year,
50% of each such prepayment shall be applied first to the
installments of the Loans in the inverse order of their
maturities and the balance shall be applied to the remaining
installments of the Loans ratably and (y) with respect to
prepayments of principal in any fiscal year in excess of the
first $50,000,000 in prepayments, each such prepayment shall be
applied to the installments of the Loans in the inverse order of
their maturities.
Proceeds of Dispositions permitted pursuant to the last
sentence of Section 8.05 hereof shall be applied in accordance
with this Section 2.08(d).
(e) APPLICATION. Prepayments described in paragraphs
(b) and (c) of this Section 2.08 shall be applied as follows:
(i) if made at any time prior to March 31, 1997, such prepayment
shall be applied to the aggregate principal amount of the Loans
then outstanding and (ii) if made on or after March 31, 1997,
such prepayment shall be applied to the installments of the Loans
then outstanding in the inverse order of their maturities,
PROVIDED that such prepayments described in said paragraph (c)
shall be applied to such installments ratably. Prepayments
described in Section 2.08(a)(i)(B) hereof shall be applied as
follows: (A) if made at any time prior to March 31, 1997, such
prepayment shall be applied to the aggregate principal amount of
the Loans then outstanding and (B) if made on or after March 31,
1997, such prepayment shall be applied to the installments of the
Loans then outstanding ratably.
Section 3. PAYMENTS OF PRINCIPAL AND INTEREST.
3.01 REPAYMENT OF LOANS. Holdings hereby promises to
pay to the Agent for account of each Lender the principal of such
Lender's Loan in 24 installments payable on the Principal Payment
Dates set forth below as follows (each such installment to be in
an amount equal to the product of (x) the aggregate principal
amount of the Loans outstanding at the close of business on
March 30, 1997 TIMES (y) the percentage set forth below opposite
the related Principal Payment Date):
CREDIT AGREEMENT
<PAGE>
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Principal Payment Date Percentage
---------------------- ----------
March 31, 1997 5%
June 30, 1997 5%
September 30, 1997 5%
December 31, 1997 5%
March 31, 1998 5%
June 30, 1998 5%
September 30, 1998 5%
December 31, 1998 5%
March 31, 1999 4%
June 30, 1999 4%
September 30, 1999 4%
December 31, 1999 4%
March 31, 2000 4%
June 30, 2000 4%
September 30, 2000 4%
December 31, 2000 4%
March 31, 2001 3.5%
June 30, 2001 3.5%
September 30, 2001 3.5%
December 31, 2001 3.5%
March 31, 2002 3.5%
June 30, 2002 3.5%
September 30, 2002 3.5%
December 31, 2002 3.5%
3.02 INTEREST. Holdings hereby promises to pay to the
Agent for account of each Lender interest on the unpaid principal
amount of each Loan made by such Lender for the period from and
including the date of such Loan to but excluding the date such
Loan shall be paid in full, at the following rates per annum:
(a) during such periods as such Loan is a Base Rate
Loan, the Base Rate (as in effect from time to time) PLUS
the Applicable Margin and
(b) during such periods as such Loan is a Eurodollar
Loan, for each Interest Period therefor, the Eurodollar Rate
for such Loan for such Interest Period PLUS the Applicable
Margin.
Notwithstanding the foregoing, Holdings hereby promises to pay to
the Agent for account of the Agent or any Lender interest at the
applicable Post-Default Rate on the following:
(i) on any principal of any Loan held by such
Lender that shall not be paid in full when due (whether
at stated maturity, by acceleration or otherwise) for
the period from and including the due date thereof to
but excluding the date the same is paid in full; and
CREDIT AGREEMENT
<PAGE>
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(ii) on any interest on any Loan or any other
amount payable to the Agent or such Lender hereunder
that shall not be paid in full when due for the period
from the due date thereof to but excluding the date the
same is paid in full.
Accrued interest on each Loan shall be payable (i) in
the case of a Base Rate Loan, quarterly on the Quarterly Dates,
(ii) in the case of a Eurodollar Loan, on the last day of each
Interest Period therefor and (iii) in the case of any Loan, upon
the payment or prepayment thereof or the Conversion of such Loan
to a Loan of another Type (but only on the principal amount so
paid, prepaid or Converted), except that interest payable at the
Post-Default Rate shall be payable from time to time on demand.
Promptly after the determination of any interest rate provided
for herein or any change therein, the Agent shall give notice
thereof to the Lenders to which such interest is payable and to
Holdings.
Section 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS;
ETC.
4.01 PAYMENTS.
(a) Except to the extent otherwise provided herein,
all payments of principal, interest and other amounts to be made
by Holdings under this Agreement and the Notes, shall be made in
Dollars, in immediately available funds, without deduction,
set-off or counterclaim, to the Agent at account number
NYAO-DI-900-9-000002 maintained by the Agent with Chase at the
Principal Office, not later than 1:00 p.m. New York time on the
date on which such payment shall become due (each such payment
made after such time on such due date to be deemed to have been
made on the next succeeding Business Day).
(b) Holdings shall, at the time of making each payment
under this Agreement or any Note for account of any Lender,
specify to the Agent (which shall so notify the intended
recipient(s) thereof) the Loans or other amounts payable by
Holdings hereunder to which such payment is to be applied (except
that, unless such payment is specified by Holdings to be a
payment or prepayment of principal required to be made under
Section 3.01 or 2.08 hereof or a payment of interest required to
be made under Section 3.02 hereof, if an Event of Default has
occurred and is continuing, the Agent may distribute such payment
to the Lenders for application in such manner as it or the
Majority Lenders, subject to Section 4.02 hereof, may determine
to be appropriate).
(c) Each payment received by the Agent under this
Agreement or any Note for account of any Lender shall be paid by
the Agent promptly to such Lender, in immediately available
funds, for account of such Lender's Applicable Lending Office for
CREDIT AGREEMENT
<PAGE>
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the Loan or other obligation in respect of which such payment is
made.
(d) If the due date of any payment under this
Agreement or any Note would otherwise fall on a day that is not a
Business Day, such date shall be extended to the next succeeding
Business Day, and interest shall be payable for any principal so
extended for the period of such extension.
4.02 PRO RATA TREATMENT. Except to the extent
otherwise provided herein: (a) each borrowing from the Lenders
under Section 2.01 hereof shall be made from the Lenders, and
each termination or reduction of the amount of the Commitments
under Section 2.03 hereof shall be applied to the respective
Commitments of the Lenders, pro rata according to the amounts of
their respective Commitments; (b) except as otherwise provided in
Section 5.04 hereof, Eurodollar Loans having the same Interest
Period shall be allocated pro rata among the Lenders according to
the amounts of their respective Commitments (in the case of the
making of Loans) or their respective Loans (in the case of
Conversions and Continuations of Loans); (c) each payment or
prepayment of principal of Loans by Holdings shall be made for
account of the Lenders pro rata in accordance with the respective
unpaid principal amounts of the Loans held by them; and (d) each
payment of interest on Loans by Holdings shall be made for
account of the Lenders pro rata in accordance with the amounts of
interest on such Loans then due and payable to the respective
Lenders.
4.03 COMPUTATIONS. Interest on Eurodollar Loans shall
be computed on the basis of a year of 360 days and actual days
elapsed (including the first day but excluding the last day)
occurring in the period for which payable and interest on Base
Rate Loans shall be computed on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed (including
the first day but excluding the last day) occurring in the period
for which payable. Notwithstanding the foregoing, for each day
that the Base Rate is calculated by reference to the Federal
Funds Rate, interest on Base Rate Loans shall be computed on the
basis of a year of 360 days and actual days elapsed.
4.04 MINIMUM AMOUNTS. Except for prepayments required
pursuant to Section 2.08 hereof, each borrowing, Conversion and
partial prepayment of principal of Loans shall be in an aggregate
amount at least equal to (x) in the case of Base Rate Loans,
$10,000,000 or a larger multiple of $1,000,000 and (y) in the
case of Eurodollar Loans $10,000,000 or a larger multiple of
$5,000,000 (borrowings, Conversions or prepayments of or into
Loans of different Types or, in the case of Eurodollar Loans,
having different Interest Periods at the same time hereunder to
be deemed separate borrowings, Conversions and prepayments for
purposes of the foregoing, one for each Type or Interest Period),
PROVIDED that the aggregate principal amount of Eurodollar Loans
CREDIT AGREEMENT
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having the same Interest Period shall be in an amount at least
equal to $10,000,000 or a larger multiple of $5,000,000 and, if
any Eurodollar Loans would otherwise be in a lesser principal
amount for any period, such Loans shall be Base Rate Loans during
such period.
4.05 CERTAIN NOTICES. Notices by Holdings to the
Agent of borrowings, Conversions, Continuations and optional
prepayments of Loans, of Types of Loans and of the duration of
Interest Periods shall be irrevocable and shall be effective only
if received by the Agent not later than 12:00 noon New York time
on the number of Business Days prior to the date of the relevant
termination, reduction, borrowing, Conversion, Continuation or
prepayment or the first day of such Interest Period specified
below:
Number of
Business
Notice Days Prior
------ ----------
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans same day
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Each such notice of borrowing, Conversion, Continuation or
optional prepayment shall specify the Loans to be borrowed,
Converted, Continued or prepaid and the amount (subject to
Section 4.04 hereof) and Type of each Loan to be borrowed,
Converted, Continued or prepaid and the date of borrowing,
Conversion, Continuation or optional prepayment (which shall be a
Business Day). Each such notice of the duration of an Interest
Period shall specify the Loans to which such Interest Period is
to relate. The Agent shall promptly notify the Lenders of the
contents of each such notice. In the event that Holdings fails
to select the Type of Loan, or the duration of any Interest
Period for any Eurodollar Loan, within the time period and
otherwise as provided in this Section 4.05, such Loan (if
outstanding as a Eurodollar Loan) will be automatically Converted
into a Base Rate Loan on the last day of the then current
Interest Period for such Loan or (if outstanding as a Base Rate
Loan) will remain as, or (if not then outstanding) will be made
as, a Base Rate Loan.
4.06 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the
Agent shall have been notified by a Lender or Holdings (the
"PAYOR") prior to the date on which the Payor is to make payment
to the Agent or (in the case of a Lender) the proceeds of a Loan
to be made by such Lender hereunder or (in the case of Holdings)
CREDIT AGREEMENT
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a payment to the Agent for account of one or more of the Lenders
hereunder (such payment being herein called the "REQUIRED
PAYMENT"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Agent,
the Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required
to), make the amount thereof available to the intended
recipient(s) on such date; and, if the Payor has not in fact made
the Required Payment to the Agent, the recipient(s) of such
payment shall, on demand, repay to the Agent the amount so made
available together with interest thereon in respect of each day
during the period commencing on the date (the "ADVANCE DATE")
such amount was so made available by the Agent until the date the
Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such day and, if such recipient(s) shall
fail promptly to make such payment, the Agent shall be entitled
to recover such amount, on demand, from the Payor, together with
interest as aforesaid.
4.07 SHARING OF PAYMENTS, ETC.
(a) Each Relevant Obligor agrees that, in addition to
(and without limitation of) any right of set-off, banker's lien
or counterclaim a Lender may otherwise have, each Lender shall be
entitled, at its option (to the fullest extent permitted by law)
upon and during the continuance of an Event of Default, to set
off and apply any deposit (general or special, time or demand,
provisional or final), or other indebtedness, held by it for the
credit or account of such Relevant Obligor at any of its offices,
in Dollars or in any other currency, against any principal of or
interest on any of such Lender's Loans or any other amount
payable to such Lender hereunder, that is not paid when due
(regardless of whether such deposit or other indebtedness are
then due to such Relevant Obligor), in which case it shall
promptly notify such Relevant Obligor and the Agent thereof,
PROVIDED that such Lender's failure to give such notice shall not
affect the validity thereof.
(b) If any Lender shall obtain from any Relevant
Obligor payment of any principal of or interest on any Loan owing
to it or payment of any other amount under this Agreement or any
other Basic Document through the exercise of any right of
set-off, banker's lien or counterclaim or similar right or
otherwise (other than from the Agent as provided herein), and, as
a result of such payment, such Lender shall have received a
greater percentage of the principal of or interest on the Loans
or such other amounts then due hereunder or thereunder by such
Relevant Obligor to such Lender than the percentage received by
any other Lender, it shall promptly purchase from such other
Lenders participations in (or, if and to the extent specified by
such Lender, direct interests in) the Loans or such other
amounts, respectively, owing to such other Lenders (or in
interest due thereon, as the case may be) in such amounts, and
CREDIT AGREEMENT
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make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the
benefit of such excess payment (net of any expenses that may be
incurred by such Lender in obtaining or preserving such excess
payment) pro rata in accordance with the unpaid principal of
and/or interest on the Loans or such other amounts, respectively,
owing to each of the Lenders. To such end all the Lenders shall
make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or
must otherwise be restored.
(c) Each Relevant Obligor agrees that, to the extent
permitted by law, any Lender so purchasing such a participation
(or direct interest) may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of
Loans or other amounts (as the case may be) owing to such Lender
in the amount of such participation.
(d) Nothing contained herein shall require any Lender
to exercise any such right or shall affect the right of any
Lender to exercise, and retain the benefits of exercising, any
such right with respect to any other indebtedness or obligation
of any of the Relevant Obligors. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives
a secured claim in lieu of a set-off to which this Section 4.07
applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this
Section 4.07 to share in the benefits of any recovery on such
secured claim.
Section 5. YIELD PROTECTION, ETC.
5.01 ADDITIONAL COSTS.
(a) Holdings shall pay directly to each Lender from
time to time such amounts as such Lender may reasonably determine
to be necessary to compensate such Lender for any costs that such
Lender determines are attributable to its making or maintaining
of any Eurodollar Loans or its obligation to make any Eurodollar
Loans hereunder, or any reduction in any amount receivable by
such Lender hereunder in respect of any of such Loans or such
obligation (such increases in costs and reductions in amounts
receivable, together with costs referred to in Section 5.01(b)
hereof, being herein called "ADDITIONAL COSTS"), resulting from
any Regulatory Change that:
(i) shall (without duplication of amounts paid
pursuant to Section 5.06 or 12.03(c) hereof) subject any
Lender (or its Applicable Lending Office for any of such
Loans) to any tax, duty or other charge in respect of such
Loans or its Note or changes the basis of taxation of any
CREDIT AGREEMENT
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amounts payable to such Lender under this Agreement or its
Note in respect of any of such Loans (excluding, in each
case, any such changes in the rate of tax on the overall net
income of, or the rate at which franchise taxes are imposed
on, such Lender or such Applicable Lending Office by the
jurisdiction in which such Lender has its principal office
or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit
or similar requirements (other than, in the case of any
Lender for any period as to which Holdings is required to
pay any amount under paragraph (e) below, the reserves
against "Eurocurrency liabilities" under Regulation D
therein referred to) relating to any extensions of credit or
other assets of, or any deposits with or other liabilities
of, such Lender (including, without limitation, any of such
Loans or any deposits referred to in the definition of
"Eurodollar Rate" in Section 1.01 hereof); or
(iii) imposes any other condition affecting this
Agreement or its Note (or any of such extensions of credit
or liabilities).
If any Lender requests compensation from Holdings under this
Section 5.01(a), Holdings may, by notice to such Lender (with a
copy to the Agent), suspend the obligation of such Lender
thereafter to make or Continue Eurodollar Loans, or to Convert
Base Rate Loans into Eurodollar Loans, until the Regulatory
Change giving rise to such request ceases to be in effect (in
which case the provisions of Section 5.04 hereof shall be
applicable), PROVIDED that such suspension shall not affect the
right of such Lender to receive the compensation so requested.
(b) Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication),
Holdings shall pay directly to each Lender from time to time on
request such amounts as such Lender may determine to be necessary
to compensate such Lender (or, without duplication, the holding
company of which such Lender is a subsidiary) for any costs that
it determines are attributable to the maintenance by such Lender
(or any Applicable Lending Office or such bank holding company)
of capital in respect of its Loan that it would not have incurred
but for a Regulatory Change (such compensation to include,
without limitation, an amount equal to any reduction of the rate
of return on assets or equity of such Lender (or any Applicable
Lending Office or such bank holding company) to a level below
that which such Lender (or any Applicable Lending Office or such
bank holding company) could have achieved but for such Regulatory
Change).
(c) Each Lender shall notify Holdings of any event
occurring after the date hereof entitling such Lender to
compensation under paragraph (a) or (b) of this Section 5.01 as
CREDIT AGREEMENT
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promptly as practicable, but in any event within 30 days
(45 days, in the case of Additional Costs referred to in said
paragraph (b)), after such Lender obtains actual knowledge
thereof; PROVIDED that (i) if any Lender fails to give such
notice within 30 days (45 days, in the case of Additional Costs
referred to in said paragraph (b)), after it obtains actual
knowledge of such an event, such Lender shall, with respect to
compensation payable pursuant to this Section 5.01 in respect of
any Additional Costs resulting from such event, only be entitled
to payment under this Section 5.01 for Additional Costs incurred
from and after the date 30 days (45 days, in the case of
Additional Costs referred to in said paragraph (b)), prior to the
date that such Lender does give such notice and (ii) each Lender
will make all reasonable efforts to avoid the need for or
minimize the amount of such compensation, including, without
limitation, designating a different Applicable Lending Office for
the Loans of such Lender affected by such event if such
designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the reasonable opinion of such
Lender, be disadvantageous to such Lender, except that such
Lender shall have no obligation to designate an Applicable
Lending Office located in the United States of America. Each
Lender will furnish to Holdings a certificate setting forth the
basis and amount of each request by such Lender for compensation
under paragraph (a) or (b) of this Section 5.01 (which
certificate, in the case of a request for compensation under said
paragraph (b), shall state that such Lender is generally
requesting such compensation from other similarly situated
borrowers under similar credit facilities). Determinations and
allocations by any Lender for purposes of this Section 5.01 of
the effect of any Regulatory Change pursuant to paragraph (a) of
this Section 5.01, or of the effect of capital maintained
pursuant to paragraph (b) of this Section 5.01, on its costs or
rate of return of maintaining Loans or its obligation to make
Loans, or on amounts receivable by it in respect of Loans, and of
the amounts required to compensate such Lender under this
Section 5.01, shall be prima facie evidence of such Lender's
right to receive such compensation.
(d) Without limiting the effect of the foregoing,
Holdings shall pay to each Lender on the last day of each
Interest Period so long as such Lender is maintaining reserves
against "Eurocurrency liabilities" under Regulation D (or so long
as such Lender is, by reason of any Regulatory Change,
maintaining reserves against any other category of liabilities
that includes deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this Agreement or
against any category of extensions of credit or other assets of
such Lender that includes any Eurodollar Loans) an additional
amount (determined by such Lender and notified to Holdings
through the Agent) equal to the product of the following for each
Eurodollar Loan held by such Lender for each day during such
Interest Period:
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(i) the principal amount of such Eurodollar Loan
outstanding on such day; and
(ii) the remainder of (x) a fraction the numerator of
which is the rate (expressed as a decimal) at which interest
accrues on such Eurodollar Loan for such Interest Period as
provided in this Agreement (less the Applicable Margin) and
the denominator of which is one MINUS the effective rate
(expressed as a decimal) at which such reserve requirements
are imposed on such Lender on such day MINUS (y) such
numerator; and
(iii) 1/360.
5.02 LIMITATION ON TYPES OF LOANS. Anything herein to
the contrary notwithstanding, if, on or prior to the
determination of any Eurodollar Rate for any Interest Period:
(a) the Agent determines, which determination shall be
conclusive, that quotations of interest rates for the
relevant deposits referred to in the definition of
"Eurodollar Rate" in Section 1.01 hereof are not being
provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for
Eurodollar Loans as provided herein; or
(b) the Majority Lenders determine, which
determination shall be conclusive, and notify the Agent that
the relevant rates of interest referred to in the definition
of "Eurodollar Rate" in Section 1.01 hereof upon the basis
of which the rate of interest for Eurodollar Loans for such
Interest Period is to be determined are not likely to be
adequate to cover the cost to such Lenders of making or
maintaining Eurodollar Loans for such Interest Period;
then the Agent shall give Holdings and each Lender prompt notice
thereof and, so long as such condition remains in effect, the
Lenders shall be under no obligation to make additional
Eurodollar Loans, to Continue Eurodollar Loans or to Convert Base
Rate Loans into Eurodollar Loans, and Holdings shall, on the last
day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Loans, either prepay such Loans or Convert such Loans
into Base Rate Loans in accordance with Section 2.07 hereof.
5.03 ILLEGALITY. Notwithstanding any other provision
of this Agreement, in the event that it becomes unlawful for any
Lender or its Applicable Lending Office to honor its obligation
to make or maintain Eurodollar Loans hereunder (and, in the
reasonable opinion of such Lender, the designation of a different
Applicable Lending Office would either not avoid such
unlawfulness or would be disadvantageous to such Lender), then
such Lender shall promptly notify Holdings thereof (with a copy
to the Agent) and such Lender's obligation to make or Continue,
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or to Convert Loans of any other Type into, Eurodollar Loans
shall be suspended until such time as such Lender may again make
and maintain Eurodollar Loans (in which case the provisions of
Section 5.04 hereof shall be applicable).
5.04 TREATMENT OF AFFECTED LOANS. If the obligation
of any Lender to make Eurodollar Loans or to Continue, or to
Convert Base Rate Loans into, Eurodollar Loans shall be suspended
pursuant to Section 5.01 or 5.03 hereof, such Lender's Eurodollar
Loans shall be automatically Converted into Base Rate Loans on
the last day(s) of the then current Interest Period(s) for
Eurodollar Loans (or, in the case of a Conversion required by
Section 5.01(b) or 5.03 hereof, on such earlier date as such
Lender may specify to Holdings with a copy to the Agent) and,
unless and until such Lender gives notice as provided below that
the circumstances specified in Section 5.01 or 5.03 hereof that
gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans
have been so Converted, all payments and prepayments of
principal that would otherwise be applied to such Lender's
Eurodollar Loans shall be applied instead to its Base Rate
Loans; and
(b) all Loans that would otherwise be made or
Continued by such Lender as Eurodollar Loans shall be made
or Continued instead as Base Rate Loans, and all Base Rate
Loans of such Lender that would otherwise be Converted into
Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to Holdings with a copy to the Agent
that the circumstances specified in Section 5.01 or 5.03 hereof
that gave rise to the Conversion of such Lender's Eurodollar
Loans pursuant to this Section 5.04 no longer exist (which such
Lender agrees to do promptly upon such circumstances ceasing to
exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Loans, to the extent
necessary so that, after giving effect thereto, all Loans held by
the Lenders holding Eurodollar Loans and by such Lender are held
pro rata (as to principal amounts, Types and Interest Periods) in
accordance with their respective Commitments.
5.05 BROKEN FUNDING. Holdings shall pay to the Agent
for account of each Lender, upon the request of such Lender
through the Agent, such amount or amounts as shall be sufficient
(in the reasonable opinion of such Lender) to compensate it for
any loss, cost or expense that such Lender determines is
attributable to:
(a) any payment, prepayment or Conversion of a
Eurodollar Loan made by such Lender for any reason
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(including, without limitation, the acceleration of the
Loans pursuant to Section 10 hereof but excluding any
Conversion pursuant to Section 5.04 hereof resulting from an
event referred to in Section 5.03 hereof) on a date other
than the last day of an Interest Period for such Loan; or
(b) any failure by Holdings for any reason (including,
without limitation, the failure of any of the conditions
precedent specified in Section 7 hereof to be satisfied) to
borrow a Eurodollar Loan from such Lender on the date for
such borrowing specified in the relevant notice of borrowing
given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any,
of (i) the amount of interest that otherwise would have accrued
on the principal amount so paid, prepaid, Converted or not
borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of
the then current Interest Period for such Loan (or, in the case
of a failure to borrow, the Interest Period for such Loan that
would have commenced on the date specified for such borrowing) at
the applicable rate of interest for such Loan provided for herein
(minus the relevant Applicable Margin) over (ii) the amount of
interest that otherwise would have accrued on such principal
amount at a rate per annum equal to the interest component of the
amount such Lender would have offered in the London interbank
market for Dollar deposits of leading banks in amounts comparable
to such principal amount and with maturities comparable to such
period (as reasonably determined by such Lender). Each Lender
claiming compensation under this Section 5.05 will furnish to
Holdings through the Agent a certificate setting forth the basis
of the calculation and the amount of such compensation, which
certificate shall be prima facie evidence of such Lender's right
to receive the compensation claimed.
5.06 U.S. TAXES.
(a) Holdings agree to pay to each Lender that is not a
U.S. Person such additional amounts as are necessary in order
that the net payment of any amount due to such non-U.S. Person
hereunder after deduction for or withholding in respect of any
U.S. Taxes imposed with respect to such payment (or in lieu
thereof, payment of such U.S. Taxes by such non-U.S. Person),
will not be less than the amount stated herein to be then due and
payable, PROVIDED that the foregoing obligation to pay such
additional amounts shall not apply:
(i) to any payment to any Lender hereunder unless such
Lender is, on the date hereof (or on the date it becomes a
Lender hereunder as provided in Section 12.06(b) hereof) and
on the date of any change in the Applicable Lending Office
of such Lender, either entitled to submit a Form 1001
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(relating to such Lender and entitling it to a complete
exemption from withholding on all interest to be received by
it hereunder in respect of the Loans) or Form 4224 (relating
to all interest to be received by such Lender hereunder in
respect of the Loans), or
(ii) to any U.S. Taxes imposed solely by reason of the
failure by such non-U.S. Person to comply with applicable
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity
or connections with the United States of America of such
non-U.S. Person if such compliance is required by statute or
regulation of the United States of America as a precondition
to relief or exemption from such U.S. Taxes.
For the purposes of this Section 5.06(a), (A) "U.S. PERSON" shall
mean a citizen, national or resident of the United States of
America, a corporation, partnership or other entity created or
organized in or under any laws of the United States of America or
any State thereof, or any estate or trust that is subject to
Federal income taxation regardless of the source of its income,
(B) "U.S. TAXES" shall mean any present or future tax, assessment
or other charge or levy imposed by or on behalf of the United
States of America or any taxing authority thereof or therein,
(C) "FORM 1001" shall mean Form 1001 (Ownership, Exemption, or
Reduced Rate Certificate) of the Department of the Treasury of
the United States of America and (D) "FORM 4224" shall mean
Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in
the United States) of the Department of the Treasury of the
United States of America (or in relation to either such Form such
successor and related forms as may from time to time be adopted
by the relevant taxing authorities of the United States of
America to document a claim to which such Form relates). Each of
the Forms referred to in the foregoing clauses (C) and (D) shall
include such successor and related forms as may from time to time
be adopted by the relevant taxing authorities of the United
States of America to document a claim to which such Form relates.
(b) Within 30 days after paying any amount to the
Agent or any Lender from which it is required by law to make any
deduction or withholding, and within 30 days after it is required
by law to remit such deduction or withholding to any relevant
taxing or other authority, Holdings shall deliver to the Agent
for delivery to such non-U.S. Person evidence satisfactory to
such Person of such deduction, withholding or payment (as the
case may be).
(c) Each Lender (including any lender that becomes a
Lender pursuant to Section 5.07 or 12.06 hereof) represents and
warrants to Holdings and the Agent that on the date hereof (or,
in the case of any such lender that becomes a Lender pursuant to
said Section 5.07 or 12.06, on the date it becomes a Lender) such
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Lender is either organized under the laws of the United States or
a State thereof or is entitled to submit either a Form 1001
(relating to such Lender and entitling it to a complete exemption
from withholding on all interest to be received by it hereunder
in respect of the Loans) or a Form 4224 (relating to all interest
to be received by such Lender hereunder in respect of the Loans)
and has delivered two copies of such form duly completed to each
of the Agent and Holdings.
5.07 REPLACEMENT OF CERTAIN LENDERS. If (a) any
Lender becomes the subject of an insolvency proceeding or any
United States Government Authority assumes control of such Lender
or any holding company of which such Lender is a Subsidiary,
requests compensation under Section 5.01 hereof or gives notice
under Section 5.03 hereof suspending its obligation to make or
maintain Eurodollar Loans hereunder and (b) no Default shall have
occurred and be continuing, then Holdings, upon not less than
three Business Days' prior notice to such Lender (with a copy to
the Agent), may require that such Lender assign (in which case
such Lender shall assign as provided in Section 12.06 hereof) its
Loan(s) to one or more other Lenders, or another lender
(reasonably acceptable to the Agent), specified by Holdings in
such notice that are willing to accept such assignment for an
amount equal to the sum of the outstanding aggregate principal
amount of such Lender's Loan(s) and unpaid interest thereon
accrued to the date of the consummation of such assignment (such
assignment to be pursuant to documentation reasonably acceptable
to the assigning Lender), PROVIDED that upon the consummation of
such assignment Holdings shall pay to such Lender (if not paid to
such Lender by the assignee) (x) such amounts (if any) as are
then owing to such Lender under this Section 5 (including,
without limitation, amounts under Section 5.05 hereof, if any,
that Holdings would be required to pay to such Lender if the
Loan(s) assigned by such Lender were being prepaid by Holdings on
the date of such assignment) and (y) all other amounts then owing
by Holdings hereunder to or for the account of such Lender.
Section 6. GUARANTEE.
6.01 THE GUARANTEE. Each of the Subsidiary Guarantors
hereby jointly and severally guarantees to each Lender and the
Agent and their respective successors and assigns the prompt
payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the principal of and interest on
the Loans made by the Lenders to, and, without duplication, the
Note held by each Lender of, Holdings and all other amounts from
time to time owing to the Lenders or the Agent by Holdings under
this Agreement and, without duplication, under the Notes and by
Holdings under any of the other Basic Documents (other than the
Credit Agricole Account Agreement), in each case strictly in
accordance with the terms thereof (such obligations being herein
collectively called the "GUARANTEED OBLIGATIONS"). Each of the
Subsidiary Guarantors hereby further agrees that if Holdings
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shall fail to pay in full when due (whether at stated maturity,
by acceleration or otherwise) any of the Guaranteed Obligations,
such Subsidiary Guarantor will promptly pay the same, without any
demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
6.02 OBLIGATIONS UNCONDITIONAL. The obligations of
each Subsidiary Guarantor under Section 6.01 hereof are, to the
fullest extent permitted by law, absolute and unconditional
irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of Holdings under this
Agreement, the Notes or any other agreement or instrument
referred to herein or therein, or any substitution, release or
exchange of any other guarantee of or any security for any of the
Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, it being the intent of this
Section 6.02 that the obligations of each Subsidiary Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances (other than full and final payment of the
Guaranteed Obligations). Without limiting the generality of the
foregoing, it is agreed that, to the fullest extent permitted by
law, the occurrence of any one or more of the following shall not
alter or impair the liability of each Subsidiary Guarantor
hereunder which shall remain absolute and unconditional as
described above:
(i) at any time or from time to time, without notice
to either Subsidiary Guarantor, the time for any performance
of or compliance with any of the Guaranteed Obligations
shall be extended (except to the extent otherwise required
by Section 12.04 hereof), or such performance or compliance
shall be waived;
(ii) any of the acts mentioned in any of the provisions
of this Agreement or the Notes or any other agreement or
instrument referred to herein or therein shall be done or
omitted;
(iii) the maturity of any of the Guaranteed Obligations
shall be accelerated, or any of the Guaranteed Obligations
shall be modified, supplemented or amended in any respect,
or any right under this Agreement or the Notes or any other
agreement or instrument referred to herein or therein shall
be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
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(iv) any lien or security interest granted to, or in
favor of, the Agent or any Lender or Lenders as security for
any of the Guaranteed Obligations shall fail to be
perfected.
Each Subsidiary Guarantor hereby expressly waives diligence,
presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender
exhaust any right, power or remedy or proceed against either or
both of Holdings or the other Subsidiary Guarantor under this
Agreement or the Notes or any other agreement or instrument
referred to herein or therein, or against any other Person under
any other guarantee of, or security for, any of the Guaranteed
Obligations.
6.03 REINSTATEMENT. The obligations of each
Subsidiary Guarantor under this Section 6 shall be automatically
reinstated if and to the extent that for any reason any payment
by or on behalf of Holdings in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any
holder of any of the Guaranteed Obligations, whether as a result
of any proceedings in bankruptcy or reorganization or otherwise
and each Subsidiary Guarantor agrees that it will indemnify the
Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees of counsel)
incurred by the Agent or such Lender in connection with such
rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar
payment under any bankruptcy, insolvency or similar law.
6.04 SUBROGATION. Each Subsidiary Guarantor hereby
jointly and severally agrees that until the payment and
satisfaction in full of all Guaranteed Obligations it shall not
exercise any right or remedy arising by reason of any performance
by it of its Guarantee in Section 6.01 hereof, whether by
subrogation or otherwise, against Holdings or any other guarantor
of any of the Guaranteed Obligations or any security for any of
the Guaranteed Obligations.
6.05 REMEDIES. Each Subsidiary Guarantor agrees that,
as between it and the Lenders, to the fullest extent permitted by
law, its obligations under this Agreement may be declared to be
forthwith due and payable as provided in Section 10 hereof (and
shall be deemed to have become automatically due and payable in
the circumstances provided in said Section 10) for purposes of
Section 6.01 hereof notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from
becoming automatically due and payable) as against Holdings and
that, in the event of such declaration (or such obligations being
deemed to have become automatically due and payable), such
obligations (whether or not due and payable by Holdings) shall
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forthwith become due and payable by such Subsidiary Guarantor for
purposes of said Section 6.01.
6.06 INSTRUMENT FOR THE PAYMENT OF MONEY. To the
fullest extent permitted by law, each Subsidiary Guarantor hereby
(a) acknowledges that the guarantee in this Section 6 constitutes
an instrument for the payment of money, and consents and
(b) agrees that any Lender or the Agent, at its sole option, in
the event of a dispute by such Subsidiary Guarantor in the
payment of any moneys due hereunder, shall have the right to
bring motion-action under New York CPLR Section 3213.
6.07 CONTINUING GUARANTEE. The guarantee in this
Section 6 is a continuing guarantee, and shall apply to all
Guaranteed Obligations whenever arising.
6.08 RIGHTS OF CONTRIBUTION. The Subsidiary
Guarantors hereby agree, as between themselves, that if any
Subsidiary Guarantor shall become an Excess Funding Obligor (as
defined below) by reason of the payment by such Subsidiary
Guarantor of any Guaranteed Obligations, each other Subsidiary
Guarantor shall, on demand of such Excess Funding Obligor (but
subject to the next sentence), pay to such Excess Funding Obligor
an amount equal to such Subsidiary Guarantor's Pro Rata Share (as
defined below and determined, for this purpose, without reference
to the Properties, debts and liabilities of such Excess Funding
Obligor) of the Excess Payment (as defined below) in respect of
such Guaranteed Obligations.
For purposes of this Section 6.08, (i) "EXCESS FUNDING
OBLIGOR" shall mean, in respect of any Guaranteed Obligations, a
Subsidiary Guarantor that has paid an amount in excess of its Pro
Rata Share of such Guaranteed Obligations, (ii) "EXCESS PAYMENT"
shall mean, in respect of any Guaranteed Obligations, the amount
paid by an Excess Funding Obligor in excess of its Pro Rata Share
of such Guaranteed Obligations and (iii) "PRO RATA SHARE" shall
mean, for any Subsidiary Guarantor, the ratio (expressed as a
percentage) of (x) the amount by which the aggregate fair
saleable value of all Properties of such Subsidiary Guarantor on
the date of this Agreement exceeds the amount of all the debts
and liabilities of such Subsidiary Guarantor (including
contingent, subordinated, unmatured and unliquidated liabilities,
but excluding the obligations that have been Guaranteed by such
Subsidiary Guarantor in Section 6.01 hereof) to (y) the amount by
which the aggregate fair saleable value of all Properties of
Holdings and all of the Subsidiary Guarantors exceeds the amount
of all the debts and liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of Holdings and the Subsidiary
Guarantors hereunder) of Holdings and all of the Subsidiary
Guarantors, all as of the Closing Date.
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6.09 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In
any action or proceeding involving any state corporate law, or
any state or Federal bankruptcy, insolvency, reorganization or
other law affecting the rights of creditors generally, if the
obligations of any Subsidiary Guarantor under Section 6.01 hereof
would otherwise, taking into account the provisions of
Section 6.08 hereof, be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other
creditors, on account of the amount of its liability under said
Section 6.01, then, notwithstanding any other provision hereof to
the contrary, the amount of such liability shall, without any
further action by such Subsidiary Guarantor, any Lender, the
Agent or any other Person, be automatically limited and reduced
to the highest amount that is valid and enforceable and not
subordinated to the claims of other creditors and determined in
such action or proceeding.
Section 7. CONDITIONS PRECEDENT.
7.01 CONDITIONS PRECEDENT. The obligation of each
Lender to make its Loan hereunder is subject to the conditions
precedent that (i) such Loan shall be made on or before the
Commitment Termination Date and (ii) the Agent shall have
received the following documents (with, in the case of
clauses (a), (b), (c) and (d) below, sufficient copies for each
Lender), each of which shall be satisfactory to the Agent in form
and substance:
(a) CORPORATE DOCUMENTS. The following documents,
each certified as indicated below:
(i) a copy of the charter of each Relevant
Obligor, certified as of a date reasonably close to the
Closing Date by the Secretary of State of Delaware, and
a certificate from such Secretary of State dated as of
a date reasonably close to the Closing Date as to the
good standing of and charter documents filed by such
Relevant Obligor;
(ii) a certificate of the Secretary or an
Assistant Secretary of each Relevant Obligor, dated the
Closing Date and certifying (A) that attached thereto
is a true and complete copy of the by-laws of such
Relevant Obligor as amended and in effect at all times
from the date on which the resolutions referred to in
clause (B) below were adopted to and including the date
of such certificate, (B) that attached thereto is a
true and complete copy of resolutions duly adopted by
the board of directors of such Relevant Obligor
authorizing the execution, delivery and performance of
such of the Basic Documents to which it is or is
intended to be a party (including the borrowings
hereunder), and that such resolutions have not been
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modified, rescinded or amended and are in full force and
effect, (C) that the charter documents of such Relevant
Obligor have not been amended since the date one day prior
to the certification thereto furnished pursuant to clause
(i) above, and (D) as to the incumbency and specimen
signature of each officer of such Relevant Obligor executing
such of the Basic Documents to which such Relevant Obligor
is or is intended to be a party and each other document to
be delivered by such Relevant Obligor from time to time in
connection therewith (and the Agent and each Lender may
conclusively rely on such certificate until it receives
notice in writing from such Relevant Obligor);
(iii) a certification of another officer of each
Relevant Obligor, dated the Closing Date, as to the
incumbency and specimen signature of the Secretary or
Assistant Secretary, as the case may be, of such
Relevant Obligor;
(iv) copies certified as of the Closing Date, of
the ESTATUTOS and other constitutive documents of YPF
and of all corporate authority for YPF (including,
without limitation, board of director resolutions and
evidence of the incumbency, including specimen
signatures, of officers) with respect to the execution,
delivery and performance of the YPF Guarantee Agreement
(and the Agent and each Lender may conclusively rely on
such certificate until it receives notice in writing
from YPF);
(v) the Articles of Merger relating to the merger
of YPF Acquisition Corp. into Maxus as filed with the
Secretary of State of Delaware certified as of the
Closing Date by the Secretary or an Assistant Secretary
of Maxus;
(vi) a certificate of the Secretary or an
Assistant Secretary of Maxus dated the Closing Date
certifying (A) that attached thereto is a true and
complete copy of the Certificate of Incorporation and
by-laws of Maxus, as amended and in effect on the
Closing Date, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the board
of directors of Maxus authorizing the execution,
delivery and performance of the Maxus Guarantee
Agreement and (C) as to the incumbency and specimen
signature of each officer of Maxus that executed the
Maxus Guarantee Agreement (and the Agent and each
Lender may conclusively rely on such certificate until
it receives notice in writing from Maxus to the
contrary);
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(vii) a certification of another officer of Maxus,
dated the Closing Date, as to the incumbency and
specimen signature of the Secretary or an Assistant
Secretary, as the case may be, of Maxus; and
(viii) certificates of the Secretary of State of
Delaware dated as of a date reasonably close to the
Closing Date as to the good standing of and charter
documents filed by Maxus.
(b) OFFICER'S CERTIFICATES. A certificate of a Senior
Officer of each of (i) the Relevant Obligors, dated the
Closing Date, to the effect set forth in clauses (1)(a)
and (1)(b) of Section 7.02 hereof (except that such officer
of such Relevant Obligor shall represent and warrant with
respect to only such Relevant Obligor and its Subsidiaries),
(ii) YPF, dated the Closing Date, to the effect set forth in
said clauses (1)(a) and (1)(b) of Section 7.02 hereof
(except that such officer of YPF shall represent and warrant
with respect to only YPF and its Subsidiaries (as defined in
Schedule VI hereto)), and (iii) Maxus, dated the Closing
Date, to the effect set forth in said clauses (1)(a) and
(1)(b) of Section 7.02 hereof (except that such officer of
Maxus shall represent and warrant with respect to only Maxus
and the Material Subsidiaries (as defined in the Maxus
Guarantee Agreement)).
(c) OPINIONS OF COUNSEL TO THE OBLIGORS. Opinions,
dated the Closing Date, of (i) Andrews & Kurth L.L.P.,
special New York counsel to the Obligors, substantially in
the form of Exhibit E-1 hereto and covering such other
matters as the Agent or any Lender may reasonably request,
(ii) Marval, O'Farrell & Mairal, special Argentine counsel
to the Obligors, substantially in the form of Exhibit E-2
hereto and covering such other matters as the Agent or any
Lender may reasonably request, (iii) David A. Wadsworth,
Esq., Vice President-Legal of Maxus, substantially in the
form of Exhibit E-3 hereto and covering such other matters
as the Agent or any Lender may reasonably request (and the
applicable Obligors hereby instruct each such counsel to
deliver such opinions to the Lenders and the Agent) and
(iv) Soewito, Suhardiman, Eddymurthy & Kardono, special
Indonesian counsel to the Obligors.
(d) OPINIONS OF SPECIAL NEW YORK COUNSEL AND SPECIAL
ARGENTINE COUNSEL TO CHASE. Opinions, dated the Closing
Date, of (i) Milbank, Tweed, Hadley & McCloy, special New
York counsel to Chase, substantially in the form of
Exhibit F-1 hereto, (ii) Perez Alati, Grondona, Benites,
Arntsen & Martinez de Hoz(h), special Argentine counsel to
Chase, substantially in the form of Exhibit F-2 hereto and
(iii) Makarim & Taira S., special Indonesian counsel to
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Chase (and Chase hereby instructs each such counsel to deliver
such opinion to the Lenders).
(e) NOTES. The Notes, duly completed and executed for
each Lender.
(f) YPF GUARANTEE AGREEMENT AND MAXUS GUARANTEE
AGREEMENT. The YPF Guarantee Agreement, duly executed and
delivered by YPF and the Agent and the Maxus Guarantee
Agreement duly executed and delivered by Maxus and the
Agent.
(g) ACCOUNT PLEDGE AGREEMENT. The Account Pledge
Agreement, duly executed and delivered by the Relevant
Obligors and the Agent. In addition, (i) the Relevant
Obligors shall have taken such other action (including,
without limitation, delivering to the Agent, for filing,
appropriately completed and duly executed copies of Uniform
Commercial Code financing statements) as the Agent shall
have requested in order to perfect the security interests
created pursuant to the Account Pledge Agreement and
(ii) the accounts contemplated by Sections 2, 3 and 4 of the
Account Pledge Agreement shall have been established.
(h) PLEDGE AGREEMENT. The Pledge Agreement, duly
executed and delivered by Holdings and the Agent and the
certificates identified in Section 3(a) thereof, accompanied
by undated stock powers executed in blank. In addition,
Holdings shall have taken such other action (including,
without limitation, delivering to the Agent, for filing,
appropriately completed and duly executed copies of Uniform
Commercial Code financing statements) as the Agent shall
have requested in order to perfect the security interests
created pursuant to the Pledge Agreement.
(i) MERGER AND ACQUISITION CREDIT AGREEMENT. A
certificate of a Senior Officer of YPF that the Merger has
been consummated in accordance with the terms of the Merger
Agreement.
(j) REPAYMENT OF EXISTING INDEBTEDNESS. Evidence that
the principal of and interest on, and all other amounts
owing in respect of, the Indebtedness under the Acquisition
Credit Agreement have been (or shall be simultaneously) paid
in full.
(k) SOLVENCY OF MAXUS. A certificate of Maxus dated
the Closing Date and a written opinion of Houlihan Lokey
Howard & Zukin, Inc., dated June 8, 1995, confirming that as
of such date no fact has come to its attention that would
lead it to believe that the analysis and conclusions stated
in the certificate or opinion (as the case may be) furnished
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pursuant to Section 7.01(n) of the Acquisition Credit
Agreement are not true and correct in all material respects.
(l) NO CONFLICTING AGREEMENTS. The Agent shall have
received a certificate of a Senior Officer of Maxus
certifying that, after giving effect to the borrowing
hereunder, the consummation of the Merger, the other
transactions that occurred on the date the Merger was
consummated and the transactions contemplated hereby to
occur on the Closing Date, Maxus is in compliance with the
provisions of each of the Maxus Public Debt Documents (as
defined in the Maxus Guarantee Agreement) and the provisions
relating to (i) the $4.00 Cumulative Convertible Preferred
Stock pay value $1.00 per share, (ii) the $9.75 Cumulative
Convertible Preferred Stock par value $1.00 per share and
(iii) the $2.50 Cumulative Preferred Stock par value
$1.00 per share, in each case of Maxus.
(m) REORGANIZATION TRANSACTIONS. A certificate of a
Senior Officer of Maxus certifying that the Reorganization
Transactions have been consummated.
(n) RESERVE EVALUATION REPORT. The Initial Reserve
Evaluation Report.
(o) PROCESS AGENT ACCEPTANCE. A Process Agent
Acceptance, duly executed and delivered by CT Corporation
System in respect of YPF, substantially in the form of
Exhibit I hereto.
(p) SALES CONTRACTS. A description of all Sales
Contracts (including the purchasers and volumes sold
thereunder) as in effect as of a date not more than 20 days
prior to the Closing Date demonstrating compliance with the
requirements of Section 9.17(b) hereof.
(q) OTHER DOCUMENTS. Such other documents (including,
without limitation, documents evidencing that Credit
Agricole has released the Subsidiary Guarantors from their
obligations referred to in Section 10 of the form of the
Credit Agricole Account Agreement referred to in the
definition of such term in Section 1.01 hereof and the liens
and security interests granted by them referred to in said
Section 10) as the Agent or any Lender or special New York
counsel to Chase may reasonably request.
The obligation of any Lender to make its Loan hereunder is also
subject to the payment by the Obligors of such fees as the
Obligors shall have agreed to pay or deliver to any Lender or the
Agent in connection herewith, including, without limitation, the
reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy,
special New York counsel to Chase, Perez Alati, Grondona,
Benites, Arntsen & Martinez de Hoz (h), special Argentine counsel
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to Chase and Makarim & Taira S., special Indonesian counsel to
Chase in connection with the negotiation, preparation, execution
and delivery of this Agreement and the other Basic Documents and
the making of the Loans hereunder (to the extent that statements
for such fees and expenses have been delivered to the Obligors
and, in the case of the Milbank, Tweed, Hadley & McCloy, subject
to the proviso in Section 12.03(a)(i) hereof).
7.02 OTHER CONDITIONS PRECEDENT. The obligation of
each Lender to make its Loan hereunder is subject to the further
conditions precedent that:
(1) both immediately prior to the making of such Loan
and also after giving effect thereto and to the intended use
thereof:
(a) no Default shall have occurred and be continuing;
and
(b) the representations and warranties made by the
Relevant Obligors in Section 8 hereof and by each Obligor in
each of the Basic Documents to which such Obligor is a
party, shall be true and complete on and as of the date of
the making of such Loan with the same force and effect as if
made on and as of such date (or, if any such representation
or warranty is expressly stated to have been made as of a
specific date, as of such specific date); and
(2) no changes in circumstances shall have occurred
since December 31, 1994 that have had or could reasonably be
expected to have a Closing Date Material Adverse Effect or an
Indonesian Material Adverse Effect and no information relating to
Holdings or any of its Subsidiaries or the transactions
contemplated hereby furnished in writing by or on behalf of the
Obligors to Chase or any of the other Lenders (other than any
thereof which, at the time furnished, such Obligor indicated in
writing was inaccurate) that has proven to have been inaccurate,
incomplete or misleading at the time furnished shall be
materially adverse with respect to the matters referred to in the
definition of Closing Date Material Adverse Effect (taken as a
whole) or Indonesian Material Adverse Effect.
Section 8. REPRESENTATIONS AND WARRANTIES. Each
Relevant Obligor (as to itself and each of its Subsidiaries)
represents and warrants to the Agent and the Lenders that:
8.01 CORPORATE EXISTENCE. Each Relevant Obligor and
its Subsidiaries: (a) is a corporation, partnership or other
entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization; (b) has
all requisite corporate or other power, and has all material
governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now
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being or as proposed to be conducted; and (c) is qualified to do
business and is in good standing in all jurisdictions in which
the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could
reasonably be expected to (either individually or in the
aggregate) have an Indonesian Material Adverse Effect.
8.02 FINANCIAL CONDITION. The Relevant Obligors have
heretofore furnished to each of the Lenders the following
financial statements:
(a) a consolidated balance sheet of each Subsidiary
Guarantor and its Subsidiaries as at March 31, 1995 and the
related consolidated statements of income, retained earnings
and cash flows of such Subsidiary Guarantor and its
Subsidiaries for the fiscal quarter ended on said date; and
(b) a pro forma consolidated balance sheet of Holdings
and its Subsidiaries as at March 31, 1995 and the related
pro forma consolidated statements of income, retained
earnings and cash flows of Holdings and its Subsidiaries for
the fiscal quarter ended on said date but, in the case of
said balance sheet, after giving effect to the
Reorganization Transactions, the making of the Loans
hereunder and the payments referred to in Section 9.14
hereof and the other transactions contemplated hereby to
occur on or prior to the Closing Date.
All such financial statements are complete and correct and fairly
present in all material respects the respective actual or pro
forma financial condition, as the case may be, of the respective
entities as at said dates and the respective actual or pro forma
financial condition, as the case may be, consolidated results or
pro forma consolidated results, as the case may be, of such
entities' operations for the fiscal quarter ended on said date
(subject to normal year-end audit adjustments), all in accordance
with generally accepted accounting principles and practices (to
the extent applicable). None of the Relevant Obligors nor any of
their respective Subsidiaries has on the date hereof any material
contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from
any unfavorable commitments, except as referred to or reflected
or provided for in said respective balance sheets as at said
date. Since March 31, 1995, there has been no material adverse
change in the consolidated financial condition, operations or
business of the Relevant Obligors from that set forth in said
financial statements.
8.03 LITIGATION. Except as disclosed in Schedule IV
hereto, there are no legal or arbitral proceedings, or any
proceedings by or before any governmental or regulatory authority
or agency, now pending or (to the knowledge of any Relevant
Obligor) threatened against any Relevant Obligor or any of its
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Subsidiaries that could reasonably be expected to be adversely
determined and, if adversely determined, could reasonably be
expected to (either individually or in the aggregate) have an
Indonesian Material Adverse Effect.
8.04 NO BREACH. (a) None of the execution and
delivery of this Agreement and the Notes and the other Basic
Documents to which any of the Relevant Obligors is a party, the
consummation of the transactions herein and therein contemplated
or compliance with the terms and provisions hereof and thereof
will conflict with or result in a breach of, or require any
consent (which has not been obtained or the requirement for which
has not been waived) under, the charter or by-laws of any
Relevant Obligor, or any agreement or instrument to which any
Relevant Obligor or any of its Subsidiaries is a party or by
which any of them or any of their Property is bound or to which
any of them is subject, or constitute a default under any such
agreement or instrument, or (except for the Liens created
pursuant to the Support Documents) result in the creation or
imposition of any Lien upon any Property of any Relevant Obligor
or any of its Subsidiaries pursuant to the terms of any such
agreement or instrument.
(b) None of the execution and delivery of this
Agreement and the Notes and the other Basic Documents to which
any of the Relevant Obligors is a party, the consummation of the
transactions herein and therein contemplated or compliance with
the terms and provisions hereof and thereof will violate any
Legal Requirements other than any Legal Requirements the
violation of which, individually or in the aggregate, could not
reasonably be expected to have an Indonesian Material Adverse
Effect.
8.05 ACTION. Each Relevant Obligor has all necessary
corporate power, authority and legal right to execute, deliver
and perform its obligations under each of the Basic Documents to
which it is a party; the execution, delivery and performance by
each Relevant Obligor of each of the Basic Documents to which it
is a party have been duly authorized by all necessary corporate
action on its part (including, without limitation, any required
shareholder approvals); and this Agreement has been duly and
validly executed and delivered by each Relevant Obligor and
constitutes, and each of the Notes and the other Basic Documents
to which it is a party when executed and delivered (in the case
of the Notes, for value) will constitute, its legal, valid and
binding obligation, enforceable against such Relevant Obligor in
accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium
or similar laws of general applicability affecting the
enforcement of creditors' rights and (b) the application of
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
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8.06 APPROVALS. No authorizations, approvals or
consents of, and no filings or registrations with, any
governmental or regulatory authority or agency, or any securities
exchange, are necessary for the execution, delivery or
performance by any Relevant Obligor of the Basic Documents to
which it is a party or for the legality, validity or
enforceability thereof, except for (a) any thereof the failure of
which to be obtained or effected could not, individually or in
the aggregate, reasonably be expected to have an Indonesian
Material Adverse Effect and (b) filings and recordings in respect
of Liens created pursuant to the Support Documents.
8.07 USE OF CREDIT. None of the Relevant Obligors nor
any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the
purpose, whether immediate, incidental or ultimate, of buying or
carrying margin stock (as such term is defined in Regulation U),
and no part of the proceeds of the Loans hereunder will be used
to buy or carry any margin stock.
8.08 ERISA. Each Plan, and, to the knowledge of each
Relevant Obligor, each Multiemployer Plan, is in compliance in
all material respects with, and has been administered in all
material respects in compliance with, the applicable provisions
of ERISA, the Code and any other U.S. Federal or State law, and
no event or condition has occurred and is continuing as to which
any Relevant Obligor would be under an obligation to furnish a
report to the Lenders under Section 9.01(g) hereof.
8.09 TAXES. The Relevant Obligors and their
Subsidiaries are members of an affiliated group of corporations
filing consolidated returns for U.S. Federal income tax purposes,
of which Maxus is the "common parent" (within the meaning of
Section 1504 of the Code) of such group. The Relevant Obligors
and their Subsidiaries have filed all U.S. Federal income tax
returns and all other material tax returns that are required to
be filed by them (or have obtained extensions with respect
thereto) and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by any Relevant Obligor or
any of its Subsidiaries. The charges, accruals and reserves on
the books of the Relevant Obligors and their Subsidiaries in
respect of taxes and other governmental charges are, in the
opinion of the Relevant Obligors, adequate. Except as set forth
in Schedule IX hereto, none of the Relevant Obligors nor any
other Person acting on its behalf has given or been requested to
give a waiver of the statute of limitations relating to the
payment of any U.S. Federal, state, local and foreign taxes or
other impositions.
8.10 INVESTMENT COMPANY ACT. Neither Holdings 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.
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8.11 PUBLIC UTILITY HOLDING COMPANY ACT. Neither
Holdings 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.
8.12 MATERIAL AGREEMENTS AND LIENS.
(a) Part A of Schedule I hereto is a complete and
correct list of each Production Payment, each credit agreement,
loan agreement, indenture, purchase agreement, Guarantee, letter
of credit or other arrangement (other than under the Basic
Documents) providing for or otherwise relating to any
Indebtedness or any extension of credit (or commitment for any
extension of credit) to, or Guarantee by, Holdings or any of its
Subsidiaries, outstanding on the date hereof the aggregate
principal or face amount of or obligations under which equals or
exceeds or may equal or exceed $1,000,000 (except for any thereof
which the Relevant Obligors reasonably believe could not equal or
exceed $1,000,000), and the aggregate principal or face amount
outstanding or that may become outstanding under each such
arrangement is correctly described in Part A of said Schedule I.
(b) Part B of Schedule I hereto is a complete and
correct list of each Lien securing Indebtedness of any Person
outstanding on the date hereof the aggregate principal or face
amount of which equals or exceeds or may equal or exceed
$1,000,000 (except for any thereof securing obligations referred
to in the first parenthetical phrase in Section 8.12(a) hereof or
which the Relevant Obligors reasonably believe could not equal or
exceed $1,000,000), and covering any Property of Holdings or any
of its Subsidiaries, and the aggregate Indebtedness secured (or
that may be secured) by each such Lien and the Property covered
by each such Lien is correctly described in Part B of said
Schedule I.
8.13 ENVIRONMENTAL MATTERS. Each Relevant Obligor and
its Subsidiaries has obtained all environmental, health and
safety permits, licenses and other authorizations required under
all Environmental Laws to carry on its business as now being or
as proposed to be conducted, except to the extent failure to have
any such permit, license or authorization would not reasonably be
expected to (either individually or in the aggregate) have an
Indonesian Material Adverse Effect. Each of such permits,
licenses and authorizations is in full force and effect and each
Relevant Obligor and its Subsidiaries is in compliance with the
terms and conditions thereof, and is also in compliance with all
other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Environmental Law or in any
regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved
thereunder, all except to the extent failure to comply therewith
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would not would not reasonably be expected to (either
individually or in the aggregate) have an Indonesian Material
Adverse Effect.
In addition, except (x) for those matters that could
not reasonably be expected, as of the date hereof, to have an
Indonesian Material Adverse Effect and (y) as set forth in
Schedule II hereto:
(a) No notice, notification, demand, request for
information, citation, summons or order has been issued, no
complaint has been filed, no penalty has been assessed and
no investigation or review is, to the knowledge of a Senior
Officer of any Relevant Obligor, pending or threatened by
any Government Authority or other Person with respect to any
alleged failure by any Relevant Obligor or any of its
Subsidiaries to have such environmental, health or safety
permit, license or other authorization required under any
Environmental Law in connection with the conduct of the
business of such Relevant Obligor or any of its Subsidiaries
or with respect to any generation, treatment, storage,
recycling, transportation, discharge or disposal, or any
Release of any Environmental Material generated by such
Relevant Obligor or any of its Subsidiaries.
(b) No Environmental Materials have been Released at,
on or under any site or facility now or, to the knowledge of
a Senior Officer of any Relevant Obligor, previously owned,
operated or leased by such Relevant Obligor or any of its
Subsidiaries in a reportable quantity established by
statute, ordinance, rule, regulation or order.
(c) No Relevant Obligor nor any of its Subsidiaries
has transported or arranged for the transportation of any
Environmental Material to any location that, to the
knowledge of a Senior Officer of such Relevant Obligor, is
the subject of enforcement actions or other investigations
by any Governmental Authority that could reasonably be
expected to lead to any Environmental Claim against any
Relevant Obligor or any of its Subsidiaries.
(d) To the knowledge of the Relevant Obligors, no
other condition, circumstance, action, activity or event
exists on any site or facility now or previously owned,
operated or leased by any Relevant Obligor or any of its
Subsidiaries that could reasonably form the basis of an
Environmental Claim against any of the Relevant Obligors or
any of their Subsidiaries.
Upon request, the Relevant Obligors will make available
to the Agent for review all non-privileged environmental
investigations, studies, audits, tests, reviews or other analyses
conducted by or that are in the possession of any Relevant
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Obligor or any of its Subsidiaries in relation to facts,
circumstances or conditions at or affecting any site or facility
now or previously owned, operated or leased by any Relevant
Obligor or any of its Subsidiaries and that could reasonably be
expected to result in an Indonesian Material Adverse Effect.
8.14 CAPITALIZATION. (a) The authorized capital
stock of Holdings consists, on the date hereof, of an aggregate
of 1000 shares of common stock, par value $1.00 per share, of
which 100 shares are duly and validly issued and outstanding,
each of which shares is fully paid and nonassessable. As of the
date hereof all of such issued and outstanding shares of common
stock are owned beneficially and of record by Maxus and all of
such issued and outstanding shares of preferred stock are owned
beneficially and of record by Maxus.
(b) The authorized capital stock of (i) Maxus Java
consists, on the date hereof, of an aggregate of 1000 shares of
common stock, par value $1.00 per share, of which 100 shares are
duly and validly issued and outstanding, each of which shares is
fully paid and nonassessable, and (ii) Maxus Sumatra consists, on
the date hereof, of an aggregate of 100 shares of common stock,
no par value of which 100 shares are duly and validly issued and
outstanding, each of which shares is fully paid and
nonassessable.
8.15 SUBSIDIARIES, ETC.
(a) Neither Subsidiary Guarantor has, on the date
hereof, any Subsidiaries, and Holdings does not have, on the date
hereof, any Subsidiaries other than the Subsidiary Guarantors.
(b) Set forth in Schedule III hereto is a complete and
correct list of all Investments (other than operating deposit
accounts with banks and Permitted Investments) held by Holdings
or any of its Subsidiaries in any Person on the date hereof
(including, without limitation, all interests of Holdings or any
of its Subsidiaries in any partnership or joint venture
("PARTNERSHIP INTERESTS") and, for each such Investment or
Partnership Interest, (x) the identity of the Person or Persons
holding such Investment or Partnership Interest (as the case may
be) and (y) the nature of such Investment or Partnership Interest
(as the case may be). Except as disclosed in Schedule III
hereto, each of Holdings and its Subsidiaries owns, free and
clear of all Liens (other than Liens created pursuant to the
Support Documents), all such Investments and such Partnership
Interests.
8.16 TITLE TO ASSETS. Each Subsidiary Guarantor owns
or leases and has on the date hereof good and defensible title
(subject only to Liens permitted by Section 9.06 hereof) to the
material Properties reflected as owned or leased by it in the
most recent financial statements referred to in Section 8.02
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hereof including, without limitation, its Indonesian Interests
and the other oil and natural gas assets, or interests therein,
shown to be owned or leased by it in the Initial Reserve
Evaluation Report (other than Properties disposed of in the
ordinary course of business). Each Subsidiary Guarantor owns or
leases and has on the date hereof good and defensible title to,
and enjoys on the date hereof peaceful and undisturbed possession
of, all Properties (subject only to Liens permitted by
Section 9.06 hereof) that are necessary for the operation and
conduct of its businesses.
8.17 TRUE AND COMPLETE DISCLOSURE. The information,
reports (including, without limitation, hydrocarbon engineering
reports), financial statements, exhibits and schedules furnished
in writing by or on behalf of the Relevant Obligors to the Agent
or any Lender in connection with the negotiation, preparation or
delivery of this Agreement and the other Basic Documents or
included herein or therein or delivered pursuant hereto or
thereto, when taken as a whole, do not contain any untrue
statement of material fact or omit to state any material fact
necessary to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading,
PROVIDED that, in the case of projections and pro forma financial
statements, the Relevant Obligors represent and warrant only that
the same were prepared in good faith and on the basis of
assumptions and estimates that were reasonable as of the date as
of which the same are stated to have been prepared. All written
information furnished after the date hereof by the Relevant
Obligors and their respective Subsidiaries to the Agent and the
Lenders in connection with this Agreement and the other Basic
Documents to which any of the Relevant Obligors are parties and
the transactions contemplated hereby and thereby will be true,
complete and accurate in every material respect on, or (in the
case of projections and pro forma financial statements) will be
prepared in good faith and on the basis of reasonable assumptions
and estimates as of, the date as of which such information is
stated or certified. There is no fact known to any Relevant
Obligor that could reasonably be expected to have an Indonesian
Material Adverse Effect that has not been disclosed herein, in
the other Basic Documents or in a report, financial statement,
exhibit, schedule, disclosure letter or other writing furnished
to the Lenders for use in connection with the transactions
contemplated hereby or thereby.
8.18 INDONESIAN AGREEMENTS. The Subsidiary Guarantors
have heretofore delivered to the Agent true and complete copies
of each Indonesian Agreement and each Sales Agreement that has a
term of greater than three months other than any such Sales
Agreement entered into with Pertamina which provides that the
terms thereof may not be disclosed or are otherwise subject to
confidentiality provisions, each as in effect on the date hereof.
Each such agreement is in full force and effect and no event or
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condition has occurred or exists that could result in the
termination of any thereof.
8.19 SPECIAL PURPOSE COMPANY. Holdings has (a) no
material assets other than cash and Investments permitted to be
made by it as provided in Section 9.08 hereof and its rights and
interests under the documents referred to in clause (b) below and
(b) no Indebtedness, and no material obligations other than its
obligations under the Basic Documents and the other documents
referred to therein to which it is a party.
Section 9. COVENANTS OF THE RELEVANT OBLIGORS. Each
Relevant Obligor covenants and agrees with the Lenders and the
Agent that, so long as any Commitment or Loan is outstanding and
until payment in full of all amounts payable by Holdings
hereunder:
9.01 FINANCIAL STATEMENTS ETC. Holdings shall deliver
to Agent (and the Agent shall deliver to each of the Lenders):
(a) as soon as available and in any event within
60 days after the end of each of the first three quarterly
fiscal periods of each fiscal year of Holdings and its
Subsidiaries, consolidated statements of income, retained
earnings and cash flows of each Subsidiary Guarantor and its
Subsidiaries for such period and for the period from the
beginning of the respective fiscal year to the end of such
period, and the related consolidated balance sheet of such
Subsidiary Guarantor and its Subsidiaries as at the end of
such period, setting forth in each case in comparative form
the corresponding consolidated figures for the corresponding
periods in the preceding fiscal year (except that (i) in the
case of balance sheets, such comparison shall be to the last
day of the prior fiscal year and (ii) no such comparisons
shall be required prior to the fiscal quarter ending
June 30, 1996), accompanied by a certificate of a senior
financial officer of such Subsidiary Guarantor, which
certificate shall state that said consolidated financial
statements fairly present the consolidated financial
condition and results of operations of such Subsidiary
Guarantor and its Subsidiaries, in accordance with generally
accepted accounting principles, consistently applied, as at
the end of, and for, such period (subject to normal year-end
audit adjustments); PROVIDED that such financial statements
need not be delivered to the Agent if such information is
contained in the financial statements delivered to the Agent
pursuant to Section 9.01(c) hereof;
(b) as soon as available and in any event within
105 days after the end of each fiscal year of Holdings and
its Subsidiaries, consolidated statements of income,
retained earnings and cash flows of each Subsidiary
Guarantor and its Subsidiaries for such fiscal year and the
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related consolidated balance sheet of such Subsidiary
Guarantor and its Subsidiaries as at the end of such fiscal
year, setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the
preceding fiscal year (for each fiscal year commencing after
December 31, 1995), and accompanied by an opinion thereon of
independent certified public accountants of recognized
national standing, which opinion shall state that said
consolidated financial statements fairly present the
consolidated financial condition and results of operations
of such Subsidiary Guarantor and its Subsidiaries as at the
end of, and for, such fiscal year in accordance with
generally accepted accounting principles; PROVIDED that such
financial statements need not be delivered to the Agent if
such information (other than an opinion of independent
certified public accountants with respect to the financial
statements of each Subsidiary Guarantor) is contained in the
financial statements delivered to the Agent pursuant to
Section 9.01(d) hereof;
(c) as soon as available and in any event within
60 days after the end of each quarterly fiscal period
(excluding the last fiscal quarter) of each fiscal year of
Holdings and its Subsidiaries, consolidated and
consolidating statements of income, retained earnings and
cash flows of Holdings and its Subsidiaries for such period
and for the period from the beginning of the respective
fiscal year to the end of such period, and the related
consolidated and consolidating balance sheets of Holdings
and its Subsidiaries as at the end of such period, setting
forth in each case in comparative form the corresponding
consolidated figures for the corresponding periods in the
preceding fiscal year (except that, (i) in the case of
balance sheets, such comparison shall be to the last day of
the prior fiscal year and (ii) no such comparison need be
made prior to the fiscal quarter ending June 30, 1996),
accompanied by a certificate of a senior financial officer
of Holdings, which certificate shall state that said
consolidated financial statements fairly present the
consolidated financial condition and results of operations
of Holdings and its Subsidiaries, and said consolidating
financial statements fairly present the respective
individual unconsolidated financial condition and results of
operations of Holdings and each of its Subsidiaries, in each
case in accordance with generally accepted accounting
principles, consistently applied, as at the end of, and for,
such period (subject to normal year-end audit adjustments);
(d) as soon as available and in any event within
105 days after the end of each fiscal year of Holdings and
its Subsidiaries, consolidated and consolidating statements
of income, retained earnings and cash flows of Holdings and
its Subsidiaries for such fiscal year and the related
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consolidated and consolidating balance sheets of Holdings
and its Subsidiaries as at the end of such fiscal year,
setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the
preceding fiscal year (for each fiscal year commencing after
December 31, 1995), and accompanied (i) in the case of said
consolidated balance sheet of Holdings, by an opinion
thereon of independent certified public accountants of
recognized national standing, which opinion shall state that
said consolidated financial statements fairly present the
consolidated financial condition and results of operations
of Holdings and its Subsidiaries as at the end of, and for,
such fiscal year in accordance with generally accepted
accounting principles and (ii) in the case of said
consolidating statements and balance sheets, by a
certificate of the senior financial officer of Holdings,
which certificate shall state that said consolidating
financial statements fairly present the respective
individual unconsolidated financial condition and results of
operations of Holdings and of each of its Subsidiaries, in
each case in accordance with generally accepted accounting
principles, consistently applied, as at the end of, and for,
such fiscal year;
(e) promptly upon their becoming available, copies of
all registration statements that have become effective and
regular periodic reports, if any, that any of the Relevant
Obligors shall have filed with the Securities and Exchange
Commission (or any governmental agency substituted therefor)
or any national securities exchange;
(f) promptly upon the mailing thereof to the holders
of any publicly-traded debt securities or equity securities
of any of the Relevant Obligors generally, copies of all
financial statements, reports and proxy statements so
mailed;
(g) as soon as possible, and in any event within ten
days after a Senior Officer of any Relevant Obligor knows or
has reason to believe that any of the events or conditions
specified below with respect to any Plan or Multiemployer
Plan has occurred or exists, a statement signed by a senior
financial officer of such Relevant Obligor setting forth
details respecting such event or condition and the action,
if any, that such Relevant Obligor or its ERISA Affiliate
proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to the
PBGC by such Relevant Obligor or an ERISA Affiliate with
respect to such event or condition):
(i) any reportable event, as defined in
Section 4043(b) of ERISA and the regulations issued
thereunder, with respect to a Plan, as to which the
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PBGC has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event (PROVIDED that a failure to
meet the minimum funding standard of Section 412 of the Code
or Section 302 of ERISA, including, without limitation, the
failure to make on or before its due date a required
installment under Section 412(m) of the Code or
Section 302(e) of ERISA, shall be a reportable event
regardless of the issuance of any waivers in accordance with
Section 412(d) of the Code); and any request for a waiver
under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041(c) of
ERISA of a notice of intent to terminate any Plan or
any action taken by such Relevant Obligor or an
ERISA Affiliate to terminate any Plan;
(iii) the institution by the PBGC of proceedings
under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan,
or the receipt by such Relevant Obligor or any
ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by the PBGC with
respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by such Relevant Obligor or any
ERISA Affiliate that results in liability under
Section 4201 or 4204 of ERISA (including the obligation
to satisfy secondary liability as a result of a
purchaser default) or the receipt by such Relevant
Obligor or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or
that it intends to terminate or has terminated under
Section 4041A of ERISA;
(v) the institution of a proceeding by a
fiduciary of any Multiemployer Plan against such
Relevant Obligor or any ERISA Affiliate to enforce
Section 515 of ERISA, which proceeding is not dismissed
within 30 days; and
(vi) the adoption of an amendment to any Plan
that, pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA, would result in the loss of tax-
exempt status of the trust of which such Plan is a part
if such Relevant Obligor or an ERISA Affiliate fails to
timely provide security to the Plan in accordance with
the provisions of said Sections;
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(h) not later than March 1 of each calendar year
(commencing with the calendar year beginning January 1,
1996), a Reserve Evaluation Report prepared by the
Independent Petroleum Engineer with respect to the
Hydrocarbon Properties owned or leased by the Subsidiary
Guarantors as of December 31 of the immediately preceding
calendar year;
(i) not later than September 1 of each calendar year
(commencing with September 1, 1996), a Reserve Evaluation
Report prepared by the Subsidiary Guarantors with respect to
the Hydrocarbon Properties owned or leased by the Subsidiary
Guarantors as of June 30 of such calendar year;
(j) within ten days after either Subsidiary Guarantor
or any of its Subsidiaries receives notice of any material
change in the schedule of payment or delivery of any
Production Payment to which it is a party, notice of such
change, together with an explanation of the reason for such
change;
(k) promptly after a Senior Officer of Holdings or
either Subsidiary Guarantor knows or has reason to believe
that any Default (other than a Default that has ceased to
exist) has occurred, a notice of such Default describing the
same in reasonable detail and, together with such notice or
as soon thereafter as possible, a description of the action
that Holdings or such Subsidiary Guarantor, as the case may
be, has taken or proposes to take with respect thereto;
(l) promptly after a Senior Officer of any Relevant
Obligor becomes aware thereof, notice of the occurrence of
any event or the existence of any event or condition that
could reasonably be expected to result in the termination of
any Indonesian Agreement (other than information previously
delivered pursuant to Section 9.21(c) hereof); and
(m) from time to time such other information regarding
the Properties (including the respective Subsidiary
Guarantors' Indonesian Interests), financial condition,
operations or business of any of Holdings and the Subsidiary
Guarantors and their respective Subsidiaries (including,
without limitation, any Plan or Multiemployer Plan and any
reports or other information required to be filed under
ERISA), the Indonesian Agreements, the Sales Contracts,
Eligible Buyers and other purchasers under Sales Contracts
and the transactions contemplated hereby and thereby as any
Lender (through the Agent) or the Agent may reasonably
request.
Holdings will furnish to each Lender, at the time it furnishes
each set of financial statements pursuant to paragraph (a) or (b)
above, a certificate of a senior financial officer of Holdings
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(i) to the effect that no Default has occurred and is continuing
(or, if any Default has occurred and is continuing, describing
the same in reasonable detail and describing the action that the
Relevant Obligors have taken or propose to take with respect
thereto) and (ii) setting forth in reasonable detail the
computations and information necessary to determine whether the
Relevant Obligors are in compliance with Sections 9.06(h), (i),
(j), (p) and (q), 9.07(c), (d) and (e), (f) and (h), 9.09, 9.10
and 9.17 hereof as of the end of the respective quarterly fiscal
period or fiscal year.
9.02 LITIGATION. Holdings will promptly give to the
Agent (and the Agent shall give to each Lender) notice of all
legal or arbitral proceedings, and of all proceedings by or
before any governmental or regulatory authority or agency, and
any material development in respect of such legal or other
proceedings, affecting Holdings or any of its Subsidiaries,
except proceedings that, if adversely determined, could not
(either individually or in the aggregate) reasonably be expected
to have an Indonesian Material Adverse Effect. Without limiting
the generality of the foregoing, Holdings will give to the Agent
(and the Agent shall give to each Lender) notice of the assertion
of any Environmental Claim by any Person against, or with respect
to the activities of, any of the Relevant Obligors or any of
their respective Subsidiaries including, without limitation,
notice of any alleged violation of or non-compliance with any
Environmental Laws or any permits, licenses or authorizations,
other than any Environmental Claim or alleged violation that
could not reasonably be expected to be adversely determined or,
if adversely determined, could not reasonably be expected to
(either individually or in the aggregate) have an Indonesian
Material Adverse Effect.
9.03 EXISTENCE, ETC. Each of the Relevant Obligors
will, and will cause each of its Subsidiaries to:
(a) preserve and maintain its legal existence and all
of its material rights, privileges, licenses and franchises
(PROVIDED that nothing in this Section 9.03 shall prohibit
any transaction expressly permitted under Section 9.05
hereof);
(b) comply with the requirements of all applicable
laws, rules, regulations and orders of governmental or
regulatory authorities if failure to comply with such
requirements could reasonably be expected to (either
individually or in the aggregate) have an Indonesian
Material Adverse Effect;
(c) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its
income or profits or on any of its Property prior to the
date on which penalties attach thereto, except for any such
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tax, assessment, charge or levy the payment of which is
being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained to the
extent required by GAAP;
(d) maintain all of its material Properties used or
useful in its business in good working order and condition,
ordinary wear and tear excepted;
(e) keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP;
and
(f) permit representatives of any Lender or the Agent,
during normal business hours and at the expense of such
Lender or Agent (as the case may be), to examine, copy and
make extracts from its books and records, to inspect any of
its Properties, and to discuss its business and affairs with
its officers, all to the extent reasonably requested by such
Lender or the Agent (as the case may be).
9.04 INSURANCE. Each of the Relevant Obligors will,
and will cause each of its Subsidiaries to, maintain insurance
with financially sound and reputable insurance companies, and
with respect to Property and risks of a character usually
maintained by corporations engaged in the same or similar
business similarly situated, against loss, damage and liability
of the kinds and in the amounts customarily maintained by such
corporations, PROVIDED that to the extent customarily maintained
by such corporations, the Relevant Obligors and their
Subsidiaries may maintain self-insurance).
9.05 PROHIBITION OF FUNDAMENTAL CHANGES. None of the
Relevant Obligors will, nor will it permit any of its
Subsidiaries to, enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution).
None of the Relevant Obligors will, nor will it permit
any of its Subsidiaries to, acquire any business or Property
from, or capital stock of, or be a party to any acquisition of,
any Person except for purchases of inventory and other Property
(including, without limitation, operating leases) to be sold or
used in the ordinary course of business and Investments permitted
under Section 9.08 hereof.
None of the Relevant Obligors will, nor will it permit
any of its Subsidiaries to, convey, sell, lease, transfer or
otherwise dispose of, in one transaction or a series of
transactions, all or a substantial part of its business or
Property, whether now owned or hereafter acquired (including,
without limitation, receivables and leasehold interests), but
excluding (i) (a) Dispositions for fair market value as to which
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the Net Available Proceeds do not exceed $2,000,000 in any fiscal
year and (b) Dispositions for fair market value as to which the
Net Available Proceeds exceed $2,000,000 (but do not exceed
$25,000,000) during any period commencing on the day following a
Determination Date and ending on the next succeeding
Determination Date (PROVIDED that not more than $12,500,000 of
the Net Available Proceeds of Dispositions permitted by this
clause (b) in any such period are derived from Dispositions that
do not constitute Like-Kind Exchanges), so long as, no later than
two Business Days following the occurrence of any such
Disposition, the applicable Relevant Obligor shall deliver to the
Lenders a statement, certified by a Senior Officer of such
Relevant Obligor, in form and detail satisfactory to the Agent,
of the amount of the Net Available Proceeds of such Disposition
and of all prior such Dispositions during such period and shall
indicate that the Relevant Obligors intend to reinvest such Net
Available Proceeds in Property of comparable value (which may
include Property received in consideration of such Disposition)
within 90 days of such Disposition, and (ii) the expiration of
leases covering Hydrocarbon Properties in accordance their
respective terms; PROVIDED that, neither Subsidiary Guarantor
shall convey, sell, lease, transfer or otherwise dispose of any
interest in any Indonesian Agreement to which it is a party or
any of its other Indonesian Interests. Notwithstanding the
foregoing, any Relevant Obligor may make Dispositions in addition
to those described in the immediately preceding sentence so long
as the proceeds of any such Dispositions are applied in
accordance with the penultimate paragraph of Section 2.08(d)
hereof and such Relevant Obligor provides the information
required pursuant to Section 9.21(a) hereof.
Notwithstanding the foregoing provisions of this
Section 9.05, any of Holdings and its Subsidiaries may merge or
consolidate with each other or any other Person (including a
Wholly Owned Subsidiary of either Subsidiary Guarantor) if
(i) the surviving corporation is a Relevant Obligor or another
Wholly Owned Subsidiary of Maxus that is primarily engaged in the
production and exploration of or for hydrocarbon properties
outside of the United States of America and the Majority Lenders
shall have consented to such merger or consolidation and
(ii) after giving effect thereto no Default would exist
hereunder.
9.06 LIMITATION ON LIENS. None of the Relevant
Obligors will, nor will it permit any of its Subsidiaries to,
create, incur, assume or suffer to exist any Lien upon any of its
Property, whether now owned or hereafter acquired, except:
(a) Liens created pursuant to the Support Documents;
(b) until the borrowing hereunder (but not
thereafter), Liens in existence on the date hereof and
listed in Part B of Schedule I hereto;
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(c) Liens imposed by any governmental authority for
taxes, assessments or charges not yet due or that are being
contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the
books of the Subsidiary Guarantors or the affected
Subsidiaries, as the case may be, in accordance with GAAP;
(d) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in
the ordinary course of business that are not overdue for a
period of more than 30 days or that are being contested in
good faith and by appropriate proceedings and Liens securing
judgments but only to the extent for an amount and for a
period not resulting in an Event of Default under
Section 10(h) hereof;
(e) pledges or deposits under worker's compensation,
unemployment insurance and other social security
legislation;
(f) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business;
(g) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions,
easements, licenses, restrictions on the use of Property or
minor imperfections in title thereto that, in the aggregate,
are not material in amount, and that do not in any case
materially detract from the value of the Property subject
thereto or interfere with the ordinary conduct of the
business of the Subsidiary Guarantors and any of their
respective Subsidiaries;
(h) Liens upon real and/or tangible personal Property
acquired after the date hereof (by purchase, construction or
otherwise) by either of the Subsidiary Guarantors or any of
its Subsidiaries, each of which Liens either (A) existed on
such Property before the time of its acquisition and was not
created in anticipation thereof or (B) was created solely
for the purpose of securing Indebtedness representing, or
incurred to finance, refinance or refund, the cost
(including the cost of construction) of such Property;
PROVIDED that (i) no such Lien shall extend to or cover any
Property of such Subsidiary Guarantor or such Subsidiary
other than the Property so acquired and improvements
thereon, (ii) the principal amount of Indebtedness secured
by any such Lien shall at no time exceed 75% of the fair
market value (as determined in good faith by a senior
financial officer of such Subsidiary Guarantor) of such
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Property at the time it was acquired (by purchase, construction
or otherwise), (iii) the obligations of such Subsidiary Guarantor
or such Subsidiary in respect of Capital Lease Obligations under
a capital lease of Property (other than any Hydrocarbon Property)
entered into in the ordinary course of business may be secured by
a Lien on the Property subject to such capital lease and (iv) no
such Lien shall be incurred in connection with any Production
Payment;
(i) Liens under farm-in, farm-out, joint operating,
area of mutual interest agreements or similar agreements
entered into by either Subsidiary Guarantor or any of its
Subsidiaries in the ordinary course of business which such
Person determines in good faith to be necessary for or
advantageous to the economic development of its Properties;
PROVIDED that no such Lien (other than Liens under joint
operating agreements, which arise in the ordinary course of
business) shall be granted upon Property in which the fair
market value of the Proved Reserves exceeds 50% of the fair
market value of the Property (as determined in good faith by
a Senior Officer of such Subsidiary Guarantor);
(j) Liens created after the date hereof pursuant to
any Interest Rate Protection Agreements or Commodity Hedging
Agreements permitted under Section 9.08(f) hereof so long as
the Majority Lenders shall have consented thereto or the
aggregate "credit exposure" secured thereby (together with
Indebtedness secured by Liens permitted by clause (p) below)
shall not exceed $10,000,000 in the aggregate at any one
time outstanding (and, for purposes hereof, the "CREDIT
EXPOSURE" at any time under an Interest Rate Protection
Agreement or Commodity Hedging Agreement shall be determined
as provided in Section 9.08(f) hereof);
(k) licenses, leases or subleases granted to others in
the ordinary course of business not materially interfering
with the conduct of the business of the Subsidiary
Guarantors and their Subsidiaries taken as a whole;
(l) statutory and contractual landlords' and lessors'
liens under leases to which either Subsidiary Guarantor or
any of its Subsidiaries is a party;
(m) any interest or title of a lessor, sublessor,
licensee or licensor under any lease or license agreement
permitted by this Agreement;
(n) Liens in favor of a banking institution arising as
a matter of law encumbering deposits (including the right of
set-off) held by such banking institutions incurred in the
ordinary course of business and which are within the general
parameters customary in the banking industry;
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(o) Liens in favor of customs and revenue authorities
arising as a matter of law to secure the payment of customs'
duties in connection with the importation of goods;
(p) additional Liens created after the date hereof
upon real and/or personal property; PROVIDED that the
outstanding aggregate principal or face amount of
Indebtedness secured thereby and by Liens permitted by
clause (j) above and incurred after the date hereof shall
not exceed $10,000,000 any time;
(q) Liens of the type described in Section 9.08(h)
hereof; and
(r) any extension, renewal or replacement of the
foregoing, PROVIDED that the Liens permitted hereunder shall
not be spread to cover any additional Indebtedness or
Property (other than a substitution of like Property).
9.07 INDEBTEDNESS. None of the Relevant Obligors
will, nor will it permit any of its Subsidiaries to, create,
incur or suffer to exist any Indebtedness except:
(a) Indebtedness hereunder and under the other Basic
Documents to the Lenders;
(b) Indebtedness outstanding on the date hereof and
listed in Part A of Schedule I hereto;
(c) Subordinated Indebtedness of Holdings (other than
Affiliate Subordinated Indebtedness) incurred after the date
hereof PROVIDED that the Net Available Proceeds thereof
shall be applied by Holdings to the prepayment of the
principal of the Loans as provided in Section 2.08(c)
hereof;
(d) Affiliate Subordinated Indebtedness of Holdings;
PROVIDED that (i) the maximum rate per annum of interest
applicable to any such Affiliate Subordinated Indebtedness
shall not exceed the Base Rate (as in effect from time to
time); (ii) the proceeds thereof will be applied by Holdings
only as follows (as specified by Holdings to the Agent as
provided in clause (iii) below): (A) to make capital
contributions to the Subsidiary Guarantors the proceeds of
which will be used by them to make Capital Expenditures in
respect of Hydrocarbon Properties (Affiliate Subordinated
Indebtedness incurred for such purposes being herein called
"CAPEX ASD") and (B) to enable Holdings to make payments to
the Agent for credit to the Borrowing Base Redetermination
Sub-Account and prepayments of principal of Loans pursuant
to Section 2.08(a) hereof (Affiliate Subordinated
Indebtedness incurred for such purposes being herein called
"BORROWING BASE PREPAYMENT ASD"); (iii) Holdings specifies
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to the Agent, at or prior to the time any Affiliate Subordinated
Indebtedness is incurred, the principal amount thereof, the
holder or holders thereof and whether such Affiliate Subordinated
Indebtedness is Capex ASD or Borrowing Base Prepayment ASD; (iv)
the holder shall have executed and delivered to the Agent an
Affiliate Subordination Agreement, duly completed and executed
(and the Agent shall have received such evidence, if any, of the
due authorization, execution and delivery thereof by such holder,
and of the legality, validity, binding effect and enforceability
thereof, as the Agent may reasonably request); and (v) no
Affiliate Subordinated Indebtedness may be created or incurred
if, after giving effect thereto, the aggregate outstanding
principal amount of all Affiliate Subordinated Indebtedness (not
including capitalized interest thereon) would exceed an amount
equal to 150% of Tangible Net Worth;
(e) Indebtedness incurred by: (i) Maxus Sumatra as
operator under the Operating Agreement to which it is a
party or the related Production Sharing Agreement in
connection with transactions under such agreements, PROVIDED
that such Indebtedness of Maxus Sumatra shall not exceed
$10,000,000 in the aggregate at any one time outstanding;
and (ii) Maxus Java to the operator (the "JAVA OPERATOR")
under the Operating Agreement to which Maxus Java is a party
in respect of Indebtedness incurred by the Java Operator in
connection with transactions under such Operating Agreement
or the related Production Sharing Agreement and in respect
of which Maxus Java and the other parties to such Operating
Agreement (other than the Java Operator) are obligated to
reimburse the Java Operator for their respective pro rata
shares of such Indebtedness of the Java Operator, PROVIDED
that such Indebtedness of Maxus Java shall not exceed
$10,000,000 in the aggregate at any one time outstanding;
(f) additional Indebtedness of Holdings (including,
without limitation, Capital Lease Obligations and other
Indebtedness secured by Liens permitted under
Section 9.06(j) or (p) hereof) up to but not exceeding
$10,000,000 at any one time outstanding;
(g) Indebtedness of the Subsidiary Guarantors and
Holdings in respect of loans and advances made as permitted
by Section 9.08(d) hereof; and
(h) Indebtedness of Maxus Sumatra arising from one or
more letters of credit in an aggregate amount not exceeding
three months' rent and service charges as security for lease
obligations relating to an office lease by Maxus Sumatra of
premises in the Jakarta Stock Exchange Building.
CREDIT AGREEMENT
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9.08 INVESTMENTS. The Relevant Obligors will not, nor
will they permit any of their respective Subsidiaries to, make or
permit to remain outstanding any Investments except:
(a) Investments outstanding on the date hereof and
identified in Part B of Schedule III hereto;
(b) operating deposit accounts with banks (including
the "Account" as defined in the Credit Agricole Account
Agreement);
(c) Permitted Investments;
(d) loans and advances by the Subsidiary Guarantors to
Holdings and by Holdings to the Subsidiary Guarantors and
Investments by Holdings in common stock of, and other
capital contributions by Holdings to, the Subsidiary
Guarantors;
(e) advances by any of the Relevant Obligors to Maxus
or any of its Subsidiaries or Affiliates (other than
Holdings or any of its Subsidiaries) in the ordinary course
of business so long as (i) each such advance shall be
payable on demand and shall bear interest (payable on
demand) at a rate per annum not less than the Base Rate (as
in effect from time to time), (ii) the aggregate amount of
all such advances made by the Relevant Obligors in any
fiscal year shall not exceed the sum of $55,000,000 plus the
aggregate amount of all such advances repaid to the Relevant
Obligors during such fiscal year, (iii) at the time of each
such advance (and after giving effect thereto), (A) the
Relevant Obligors shall be in compliance with Section 9.10
hereof, (B) the aggregate amount of Unrestricted Cash and
Cash Equivalents shall be greater than or equal to the
aggregate amount of the principal payments and interest on
the Loans scheduled to be made during the six months
following the date of such advance and the Relevant Obligors
shall maintain such amount of Unrestricted Cash and Cash
Equivalents during such six month period (interest to be
calculated for this purpose on the basis of the rates at
which interest is payable on the Loans on the first day of
the Subject Month (as defined below)) and (C) no Default
shall have occurred and be continuing and (iv) at the time
of each such advance the aggregate outstanding principal
amount of the Loans shall be less than or equal to the
Borrowing Base then in effect, (v) the Agent shall receive,
within 15 days following the end of each month during which
any such advance is made (the "SUBJECT MONTH") a certificate
of a senior financial officer of Holdings to the effect set
forth in the preceding clauses (i) through (iv) with respect
to the advances made during the Subject Month and setting
forth in reasonable detail the calculations necessary to
determine compliance with clauses (ii), (iii)(A) and (B) and
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(iv) above) as of the end of the Subject Month, (vi) in no
event will any such advance be made directly or indirectly
with the proceeds of Affiliate Subordinated Indebtedness and
(vii) any payments required by any Relevant Obligor under
any tax sharing or similar agreement with Maxus shall be
set-off and applied against any such advances made by the
Relevant Obligors;
(f) Interest Rate Protection Agreements and Commodity
Hedging Agreements with any Lender or any affiliate thereof
or any other Person (with the consent of the Majority
Lenders) entered into by any of the Relevant Obligors,
PROVIDED that, when entering into any Interest Rate
Protection Agreement or Commodity Hedging Agreement that at
the time has, or at any time in the future may give rise to,
any "credit exposure", the aggregate "credit exposure" under
all Interest Rate Protection Agreements and Commodity
Hedging Agreements (including the Interest Rate Protection
Agreement or Commodity Hedging Agreement being entered into)
shall not exceed $10,000,000 (and, for purposes hereof, the
"CREDIT EXPOSURE" at any time under an Interest Rate
Protection Agreement or Commodity Hedging Agreement shall be
determined at such time in accordance with the standard
methods of calculating credit exposure under similar
arrangements as prescribed from time to time by the Agent,
taking into account potential interest rate movements (or
commodity price movements, as the case may be) and the
respective termination provisions and notional principal
amount and term of such Interest Rate Protection Agreement
or such Commodity Hedging Agreement);
(g) Investments with Indonesian Banks made for the
purpose of funding employee and related benefits to
Indonesian nationals and other investments required by
Indonesian law for similar purposes;
(h) Investments in the form of time deposits in
Indonesian banks securing rent obligations and other
obligations (or reimbursement obligations in respect of
guarantees issued to support such obligations) entered into
in Indonesia by either Subsidiary Guarantor in the ordinary
course of its business;
(i) Investments by: (x) Maxus Sumatra as operator
under the Operating Agreement to which it is a party or the
related Production Sharing Agreement in the form of time
deposits with banks to secure obligations incurred in
connection with transactions under such agreements, PROVIDED
that such Investments shall not exceed $10,000,000 in the
aggregate at any one time outstanding and (y) Investments by
Maxus Java referred to in clause (ii) of the proviso at the
end of the definition of "Investments" in Section 1.01
hereof, PROVIDED that such Investments shall not exceed
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$10,000,000 in the aggregate at any one time outstanding;
and
(j) additional Investments by the Relevant Obligors up
to but not exceeding $10,000,000 in the aggregate.
9.09 RESTRICTED PAYMENTS. Except for payments
referred to in Section 9.14 hereof made on the Closing Date,
Holdings will not make any Restricted Payment at any time;
PROVIDED that Holdings may at any time or from time to time after
July 1, 1995 make a Restricted Payment in cash, subject to the
satisfaction of each of the following conditions on the date of
such Restricted Payment and after giving effect thereto:
(i) no Default shall have occurred and be
continuing;
(ii) the aggregate amount of such Restricted Payment
and all other Restricted Payments made on and after July 1,
1995 shall not exceed an amount equal to 50% of the
consolidated net income of Holdings and its Subsidiaries for
the period commencing on July 1, 1995 and ending on the last
day of the fiscal quarter most recently ended prior to the
date of such Restricted Payment (such period to be treated
for this purpose as a single accounting period);
(iii) the Debt Coverage Ratio and the Interest
Coverage Ratio as at the last day of the fiscal quarter most
recently ended prior to the date of such Restricted Payment
shall be at least 1.25 to 1 and 1.75 to 1, respectively;
(iv) the Debt Coverage Ratio and the Interest
Coverage Ratio (in each case calculated without giving
effect to the last sentence of the definition of "Capital
Expenditures") as at the last day of the fiscal quarter most
recently ended prior to the date of such Restricted Payment,
shall each be at least 1.00 to 1.00; and
(v) Holdings shall have delivered to the Agent, at
least five Business Days (but not more than ten Business
Days) prior to the date of such Restricted Payment, a
certificate of a senior financial officer of Holdings to the
effect that the foregoing conditions have been satisfied
(and setting forth computations in reasonable detail
demonstrating satisfaction of the conditions specified in
clauses (ii) and (iv) above and, unless the Agent has
received such computations pursuant to Section 9.01 hereof,
clause (iii) above) as at the date of such certificate.
Notwithstanding the foregoing, if the conditions set forth in
clauses (i) and (iv) above have been satisfied on the date of and
after giving effect to each payment described below, if any
holder of Affiliate Subordinated Indebtedness is required to pay
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any Tax on any capitalized interest payments deemed to be (but
not actually) received by such holder during any period on such
Affiliate Subordinated Indebtedness, Holdings may make payments
to such holder in an aggregate amount not in excess of 10% of the
capitalized interest deemed to be (but not actually) received by
such holder during such period. Any provision of this Agreement
or any other Basic Document to the contrary notwithstanding, each
of the Subsidiary Guarantors may pay to Holdings dividends and
other distributions on shares of its capital stock without limit.
9.10 CERTAIN FINANCIAL COVENANTS.
(a) TANGIBLE NET WORTH. The Relevant Obligors will
not permit Tangible Net Worth to be less than $350,000,000 plus
(or minus) 70% of the amount of any adjustment after June 16,
1995 to the net worth of Holdings resulting from the Merger and
the transactions contemplated thereby.
(b) DEBT COVERAGE RATIO. The Relevant Obligors will
not permit the Debt Coverage Ratio to be less than 1.1 to 1 as at
the last day of any fiscal quarter.
(c) INTEREST COVERAGE RATIO. The Relevant Obligors
will not permit the Interest Coverage Ratio to be less than
1.25 to 1 as at the last day of any fiscal quarter.
9.11 MAINTENANCE OF CORPORATE SEPARATENESS. The
Relevant Obligors will, and will cause each of their respective
Subsidiaries that has any significant business activities or any
significant Indebtedness or liabilities to, satisfy customary
corporate formalities, including, without limitation, the holding
of regular board of directors' and shareholders' meetings (or the
taking of actions pursuant to written consents in lieu of such
meetings) and the maintenance of separate corporate records and
accounts other than the Accounts (PROVIDED that the Relevant
Obligors shall maintain appropriate records enabling them to
identify the portions of the balances therein respectively owned
by them).
9.12 LINES OF BUSINESS; ETC. The Subsidiary
Guarantors will not, nor will they permit any of their respective
Subsidiaries to engage to any substantial extent in any line or
lines of business activity other than the acquisition,
exploration, development, production, processing and gathering of
hydrocarbons in Indonesia and the marketing and sale of such
hydrocarbons (but in no event shall the Subsidiary Guarantors or
any of their respective Subsidiaries engage in refining or other
"downstream" activities relating to hydrocarbon products). The
Relevant Obligors will not, nor will they permit any of their
respective Subsidiaries to, engage in any business or activities
or own any Properties which could result in any Relevant Obligor
or any of its Subsidiaries being a "Restricted Subsidiary" as
such term is defined in the Maxus Guarantee Agreement.
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9.13 TRANSACTIONS WITH AFFILIATES. Except as
expressly permitted by this Agreement, the Relevant Obligors will
not, nor will they permit any of their respective Subsidiaries
to, directly or indirectly: (a) make any Investment in an
Affiliate of Holdings; (b) transfer, sell, lease, assign or
otherwise dispose of any material Property to an Affiliate of
Holdings; (c) merge into or consolidate with or purchase or
acquire Property from an Affiliate of Holdings; or (d) enter into
any other transaction directly or indirectly with or for the
benefit of an Affiliate of Holdings (including, without
limitation, Guarantees and assumptions of obligations of an
Affiliate of Holdings); except that (1) the Subsidiary Guarantors
may enter into and perform their respective obligations under the
Credit Agricole Account Agreement, and Holdings or any of its
Subsidiaries may enter into Intercompany Agreements with YPF or
any of its other Subsidiaries and make or provide or receive
payments for services thereunder in accordance with the terms
thereof provided that each such Intercompany Agreement is in
substantially the form furnished to and approved by the Agent
prior to the date of this Agreement or has been approved by the
Majority Lenders (as used herein, "INTERCOMPANY AGREEMENT" shall
mean a tax or expense sharing agreement, or any agreement
providing for the provision of services, between one or more of
Holdings and its Subsidiaries and one or more of YPF and its
other Subsidiaries), (2) any Affiliate of Holdings who is an
individual may serve as a director, officer or employee of
Holdings or any of its Subsidiaries and receive reasonable
compensation for his or her services in such capacity and
(3) Holdings and its Subsidiaries may enter into other
transactions (other than extensions of credit by Holdings or any
of its Subsidiaries) with Affiliates of Holdings providing for
the leasing of Property, the rendering or receipt of services or
the purchase or sale of inventory and other Property in the
ordinary course of business if the monetary or business
consideration arising therefrom would be substantially as
advantageous to Holdings and its Subsidiaries as the monetary or
business consideration that would obtain in a comparable
transaction with a Person not an Affiliate of Holdings.
9.14 USE OF PROCEEDS. Holdings will use the proceeds
of the Loans hereunder solely to pay dividends to Maxus.
9.15 CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES. The
Relevant Obligors will take such action from time to time as
shall be necessary to ensure that each of the Subsidiary
Guarantors is a Wholly Owned Subsidiary of Holdings. In the
event that any additional shares of stock shall be issued by
either Subsidiary Guarantor, Holdings agrees forthwith to deliver
to the Agent pursuant to the Pledge Agreement such shares of
stock accompanied by undated stock powers executed in blank and
to take such other action as the Agent shall request to perfect
the security interest created therein pursuant to the Pledge
Agreement. Anything in this Agreement to the contrary
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notwithstanding, the Relevant Obligors will not form or acquire any
Subsidiary without the prior consent of the Majority Lenders.
9.16 CHANGES TO PRODUCTION PAYMENTS. The Relevant
Obligors will not, nor will they permit any of their respective
Subsidiaries to voluntarily agree or consent to any change in the
delivery or payment schedule of any Production Payment or similar
agreement to which any of them are parties without the prior
consent of the Agent.
9.17 SALES CONTRACTS.
(a) Each Subsidiary Guarantor will direct all purchasers
(including, without limitation, all Eligible Buyers) of crude oil
and other hydrocarbon products produced from Properties located in
the Republic of Indonesia by it or for its account and in respect
of which it is entitled to retain the sales proceeds for its
account to make (and will take all action necessary to ensure that
all such purchasers make) all payments in respect of such purchases
in U.S. Dollars to the Collection Account as provided in the
Account Pledge Agreement (other than in respect of crude oil and
other hydrocarbon products for which invoices have been delivered
prior to the date hereof); PROVIDED that the Subsidiary Guarantors
may instead, with respect to crude oil referred to in the form of
the Credit Agricole Account Agreement referred to in the definition
of such term in Section 1.01 hereof sold by the Subsidiary
Guarantors and Maxus Energy Trading Company ("TRADING"), direct,
and cause Trading to direct, all purchasers of such crude oil to
make payments of the purchase price thereof to Credit Agricole (or
any other bank substituted therefor as contemplated by Section
9.17(c)(i) hereof) which the Subsidiary Guarantors will direct, and
will cause Trading to direct, to remit to the Agent for credit to
the Collection Account the Subsidiary Guarantors' and (until the
Credit Agricole Account Agreement is executed and delivered by all
of the intended parties thereto) Trading's respective portions of
such payments (less, in the case of Trading's portion, any amounts
owed to Credit Agricole by Trading in respect of Trading's
obligation to reimburse Credit Agricole in respect of letters of
credit issued by it to provide for the payment of the purchase
price of such crude oil purchased by Trading payable by Trading to
the sellers thereof to Trading).
(b) The Subsidiary Guarantors will maintain in effect
Sales Contracts with Eligible Buyers providing for the sale by the
Subsidiary Guarantors for U.S. Dollars of crude oil and other
hydrocarbon products produced from Properties located in the
Republic of Indonesia by the Subsidiary Guarantors or for their
respective accounts and in respect of which they are entitled to
retain the sales proceeds for their respective accounts, such that
the aggregate amount of such crude oil and other hydrocarbons sold
or to be sold under such contracts in each fiscal year shall equal
at least 80% of the total amount of crude oil and other
hydrocarbons so produced by or for the account of the Subsidiary
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Guarantors and in respect of which they are entitled to retain
sales proceeds for their respective accounts in such fiscal year.
(c) If, at any time following the date the Credit
Agricole Account Agreement is executed and delivered by all
intended parties thereto, said Agreement is terminated (other than
by the Agent except by reason of a material default thereunder by
any other party thereto) or otherwise ceases to be in full force
and effect (other than by reason of the act or omission of the
Agent except as specified in the preceding parenthetical phrase),
the Subsidiary Guarantors will either (i) cause, not later than 30
days after such event, a new agreement to be entered into with the
Agent by Credit Agricole (or another bank acceptable to Majority
Lenders) and the Subsidiary Guarantors providing for the
collection, allocation and distribution of the payments for crude
oil referred to in said Agreement and the other matters provided
for thereby on substantially the same terms as are contained
therein (or other terms acceptable to the Majority Lenders) or (ii)
cause that portion of each payment for that portion of such crude
oil sold by or for the account of the Subsidiary Guarantors to be
remitted directly by the respective purchasers thereof to the
Collection Account.
9.18 INDONESIAN AGREEMENTS AND OTHER AGREEMENTS.
(a) Unless the failure to do so could not reasonably be
expected to have an Indonesian Material Adverse Effect, each of the
Subsidiary Guarantors will at all times perform and observe all of
its obligations under or in respect of its Indonesian Interests
(including the Operating Agreement to which it is a party and the
related Production Sharing Agreement), enforce all of its rights
and claims under or in respect of such Indonesian Interest
(including such Indonesian Agreements) and take such other actions
as shall be necessary to maintain such Indonesian Agreements in
full force and effect and to maintain, preserve and protect such
Indonesian Interests (including to maintain such Indonesian
Agreements in full force and effect).
(b) The Relevant Obligors will not, nor will they permit
any of their respective Subsidiaries to, agree or consent to any
modification, supplement or waiver of any of the provisions of (i)
any agreement, instrument or other document evidencing or relating
to any Subordinated Indebtedness, (ii) any Intercompany Agreement
executed and delivered in substantially the form furnished to and
approved by the Agent prior to the date of this Agreement or
approved by the Majority Lenders pursuant to Section 9.13 hereof
and (iii) any of the Indonesian Agreements except to the extent
such modifications, supplements and waivers of the Indonesian
Agreements could not reasonably be expected to have (individually
or in the aggregate) an Indonesian Material Adverse Effect.
9.19 SPECIAL COVENANT RELATING TO HOLDINGS. Holdings
will not engage in any business or transactions other than those
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associated with holding the capital stock of the Subsidiary
Guarantors and borrowings hereunder and the other transactions
contemplated by the Basic Documents and the other documents
referred to therein. Without limiting the generality of the
foregoing, Holdings will use its best efforts so to conduct its
affairs as not to subject this Agreement or any payments required
to be made by Holdings hereunder or on the Notes to any requirement
for consent or approval of any Government Authority of or in the
Republic of Indonesia not applicable thereto on the date of this
Agreement (other than any such requirement that is satisfied).
9.20 SUBORDINATED INDEBTEDNESS. Holdings will not, nor
will it permit any of its Subsidiaries to, purchase, redeem, retire
or otherwise acquire for value, or set apart any money for a
sinking, defeasance or other analogous fund for the purchase,
redemption, retirement or other acquisition of, or make any
voluntary payment or prepayment of the principal of or interest on,
or any other amount owing in respect of, any Subordinated
Indebtedness, except (subject to the subordination provisions
applicable thereto) for regularly scheduled payments or mandatory
prepayments of principal and interest in respect thereof required
pursuant to the instruments evidencing such Subordinated
Indebtedness (including, without limitation, in the case of
Affiliate Subordinated Indebtedness, payments permitted by Section
3.02 of the related Affiliate Subordination Agreement).
9.21 INFORMATION WITH RESPECT TO DISPOSITIONS, PROPERTY
ACQUISITIONS AND CERTAIN ACTIONS OF INDONESIAN GOVERNMENT
AUTHORITIES.
(a) Each Relevant Obligor will and will cause each of
its Subsidiaries to deliver to the Agent (with sufficient
copies for each Lender) not later than 15 days (or two
Business Days in the case of a Disposition the Net Available
Proceeds of which are being applied in accordance with Section
2.08(d) hereof) following the date of any Disposition referred
to in clause (i) of the penultimate paragraph of Section 9.05
hereof the Net Available Proceeds of which exceed the
limitations specified in clause (b) of said clause (i), a
certificate of a Senior Officer of such Relevant Obligor, in
form and substance satisfactory to the Agent:
(i) describing the Property the subject of such
Disposition; and
(ii) containing the same scope and type of
information with respect to such Property as was
contained in the Reserve Evaluation Report delivered
immediately prior to such Disposition.
(b) Each Relevant Obligor will and will cause each of
its Subsidiaries to deliver to the Agent (for delivery to the
Lenders) not later than 15 days following the date of any
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acquisition of Property which such Relevant Obligor or any
such Subsidiary values for financial statement purposes at
more than $12,500,000 (or $25,000,000 in the case of a Like-
Kind Exchange) (other than Property acquired by such Relevant
Obligor or any such Subsidiary in the ordinary course of
business), a certificate of a Senior Officer, in form and
substance satisfactory to the Agent:
(i) describing the Property acquired; and
(ii) containing the same scope and type of
information with respect to such Property as was
contained for substantially similar Properties in the
Reserve Evaluation Report delivered immediately prior to
the date of the acquisition of such Property.
(c) Each Subsidiary Guarantor will notify the Agent
within ten days of such Subsidiary Guarantor's receipt of
information indicating one or more Government Authorities of
or in Indonesia has, or has indicated its intention to,
repudiate, terminate, seize, appropriate, assume the
management of, abrogate or reduce all or any material portion
of such Subsidiary Guarantor's Indonesian Interests or take
any other action or actions (including, without limitation,
suspending or terminating all or any material portion of the
production or exportation of hydrocarbons the subject of the
Indonesian Agreements, subjecting such Subsidiary Guarantor to
new or additional Taxes that result in an increase in the
aggregate amount of Taxes paid or payable by the Subsidiary
Guarantors to Indonesian Government Authorities of greater
than 25% subsequent to the date hereof or imposing currency
controls that prevent either Subsidiary Guarantor from
accepting payment in U.S. Dollars or prevent either Subsidiary
Guarantor from transferring such payments outside of the
Republic of Indonesia, in each such case with respect to
greater than 25% of its hydrocarbon sales).
Section 10. EVENTS OF DEFAULT. If one or more of the
following events (herein called "EVENTS OF DEFAULT") shall occur
and be continuing:
(a) Holdings shall default in the payment when due
(whether at stated maturity or upon mandatory or optional
prepayment) of: (i) any principal of any Loan; or (ii) any
interest on any Loan or any fee or any other amount payable by
it hereunder or under any other Basic Document (other than the
Assignment of Account Agreement) if not paid within two
Business Days of the date that the same shall become due; or
(b) Holdings or any of its Subsidiaries (Holdings and
such Subsidiaries being herein collectively called the
"RELEVANT PARTIES") shall default in the payment when due of
any principal of or interest on any of its other Indebtedness
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aggregating $5,000,000 or more, or in the payment when due of
any amount under any Interest Rate Protection Agreement or
Commodity Hedging Agreement for a notional principal amount
exceeding $2,000,000; or any event specified in any note,
agreement, indenture or other document evidencing or relating
to any such Indebtedness or any event specified in any
Interest Rate Protection Agreement or Commodity Hedging
Agreement shall occur if the effect of such event is to cause,
or (with the giving of any notice or the lapse of time or
both) to permit the holder or holders of such Indebtedness (or
a trustee or agent on behalf of such holder or holders) to
cause, such Indebtedness to become due, or to be prepaid in
full (whether by redemption, purchase, offer to purchase or
otherwise), prior to its stated maturity or to have the
interest rate thereon reset to a level so that securities
evidencing such Indebtedness trade at a level specified in
relation to the par value thereof or, in the case of an
Interest Rate Protection Agreement or Commodity Hedging
Agreement, to permit the payments owing under such Interest
Rate Protection Agreement or Commodity Hedging Agreement to be
liquidated; or
(c) Any representation, warranty or certification made
or deemed made herein or in any other Basic Document (or in
any modification or supplement hereto or thereto) by or on
behalf of any Obligor, or any certificate furnished to any
Lender or the Agent pursuant to the provisions hereof or
thereof, shall prove to have been false or misleading as of
the time made or furnished in any material respect; or
(d) Any Relevant Obligor shall default in the
performance of any of its obligations under any of
Sections 9.01(k), 9.03(a), 9.05, 9.06, 9.07, 9.08, 9.09, 9.10,
9.11, 9.13, 9.14, 9.15, 9.16, 9.17(a), 9.17(b), 9.18 or 9.20
hereof; or any Relevant Obligor shall default in the
performance of any of its other obligations in this Agreement
or any other Basic Document (or Credit Agricole shall fail to
pay any amounts aggregating $10,000,000 or more payable by it
to the Agent under the Credit Agricole Account Agreement) and
such default shall continue unremedied for a period of 30 or
more days after notice thereof to Holdings by the Agent or any
Lender (through the Agent); or
(e) Any Relevant Party shall admit in writing its
inability to, or be generally unable to, pay its debts as such
debts become due; or
(f) Any Relevant Party shall (i) apply for or consent to
the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator of itself
or of all or a substantial part of its Property, (ii) make a
general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the Bankruptcy Code,
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(iv) file a petition seeking to take advantage of any other
law relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement or winding-up, or
composition or readjustment of debts, (v) fail to controvert
in a timely and appropriate manner, or acquiesce in writing
to, any petition filed against it in an involuntary case under
the Bankruptcy Code, (vi) take any corporate action for the
purpose of effecting any of the foregoing or (vii) do the
equivalent of any of the foregoing under any foreign laws; or
(g) A proceeding or case shall be commenced, without the
application or consent of any Relevant Party, in any court of
competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (ii) the appointment
of a receiver, custodian, trustee, examiner, liquidator or the
like of such Relevant Party or of all or any substantial part
of its Property, (iii) similar relief in respect of such
Relevant Party under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or
adjustment of debts, and such proceeding or case shall
continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered
and continue unstayed and in effect, for a period of 60 or
more days; or an order for relief against such Relevant Party
shall be entered in an involuntary case under the Bankruptcy
Code or (iv) the equivalent of any of the foregoing under any
foreign laws; or
(h) A final judgment or order for the payment of money
shall be entered against any Relevant Party (i) which, within
30 days after the entry thereof, has not been discharged or
execution thereof has not been stayed pending appeal or as to
which any enforcement proceeding shall have been commenced
(and not stayed) by any creditor thereon and (ii) the
aggregate amount of all such final judgments or orders meeting
the criteria set forth in clause (i) above exceeds $5,000,000
(net of insurance coverage as to which the insurer has
acknowledged coverage); or
(i) An event or condition specified in Section 9.01(g)
hereof shall occur or exist with respect to any Plan or
Multiemployer Plan and, as a result of such event or
condition, together with all other such events or conditions,
any Relevant Party or any ERISA Affiliate shall incur or in
the opinion of the Majority Lenders shall be reasonably likely
to incur a liability to a Plan, a Multiemployer Plan or the
PBGC (or any combination of the foregoing) that, in the
determination of the Majority Lenders, could reasonably be
expected to (either individually or in the aggregate) have an
Indonesian Material Adverse Effect; or
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(j) There shall have been asserted against any Relevant
Party one or more Environmental Claims that could reasonably
be expected to be determined adversely to such Relevant Party,
and, if adversely determined, could reasonably be expected to
result in liability on the part of such Relevant Party
(insofar as such amount is payable by such Relevant Party but
after deducting any portion thereof that is reasonably
expected to be paid by other creditworthy Persons jointly and
severally liable therefor) (such Environmental Claims being
herein called the "SUBJECT ENVIRONMENTAL CLAIMS") and the
aggregate amount that could reasonably be expected to be
payable by the Relevant Parties in respect of Subject
Environmental Claims (after giving effect to such deductions)
exceeds (i) $8,000,000 in any fiscal year of the Relevant
Obligors, (ii) $35,000,000 during the period commencing on the
date hereof and ending on the last Principal Payment Date or
(iii) $100,000,000 on or after the date hereof; or
(k) All of the outstanding shares of capital stock of
Holdings (other than directors' qualifying shares, if any)
shall cease to be owned, directly or indirectly, by Maxus or
YPF or any of such shares shall be owned, directly or
indirectly, by an entity (other than Maxus or YPF) which is
not incorporated or organized under the laws of a state of the
United States of America and the business of which does not
consist solely of making and holding investments in
Subsidiaries of YPF; or
(l) Either Subsidiary Guarantor shall cease to be a
Wholly Owned Subsidiary of Holdings; or
(m) The Liens created by the Support Documents shall at
any time not constitute valid and perfected Liens on the
collateral intended to be covered thereby (to the extent
perfection by filing, registration, recordation or possession
is required herein or therein) in favor of the Agent, free and
clear of all other Liens (other than Liens permitted under
Section 9.06 hereof or under the respective Support Documents
and other than a failure of the Liens on the Collection
Account or the Borrowing Base Redetermination Sub-Account to
be valid or perfected Liens by reason of the Subsidiary
Guarantors' rights under Section 2.08(a)(i)(C) hereof with
respect to such account) except as a result of any action
taken omitted to be taken by the Agent or the Lenders, or,
except for expiration in accordance with its terms, any of the
Support Documents shall for whatever reason be terminated or
cease to be in full force and effect in any respects material
to the Agent and the Lenders, or the enforceability thereof
shall be contested by any Obligor; or
(n) Any event set forth in Schedule VI hereto shall
occur; or
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(o) Either of the Production Sharing Agreements shall be
terminated for any reason or shall cease to be in full force
and effect in any respect material to the related Subsidiary
Guarantor or the Agent and the Lenders;
THEREUPON: (1) in the case of an Event of Default other than one
referred to in clause (f) or (g) of this Section 10 with respect to
Holdings or either Subsidiary Guarantor, the Agent may and, upon
request of the Majority Lenders, will, by notice to the Holdings,
declare the principal amount then outstanding of, and the accrued
interest on, the Loans and all other amounts payable by Holdings
and the Subsidiary Guarantors hereunder and under the Notes
(including, without limitation, any amounts payable under
Section 5.05 hereof) to be forthwith due and payable, whereupon
such amounts shall be immediately due and payable without
presentment, demand, protest or other formalities of any kind, all
of which are hereby expressly waived by the Relevant Obligors; and
(2) in the case of the occurrence of an Event of Default referred
to in clause (f) or (g) of this Section 10 with respect to Holdings
or either Subsidiary Guarantor, the principal amount then
outstanding of, and the accrued interest on, the Loans and all
other amounts payable by the Relevant Obligors hereunder and under
the Notes (including, without limitation, any amounts payable under
Section 5.05 hereof) shall automatically become immediately due and
payable without presentment, demand, protest or other formalities
of any kind, all of which are hereby expressly waived by the
Relevant Obligors.
Section 11. THE AGENT.
11.01 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender
hereby appoints and authorizes the Agent to act as its agent
hereunder and under the other Basic Documents and any Affiliate
Subordination Agreements with such powers as are specifically
delegated to the Agent by the terms of this Agreement and the other
Basic Documents and any Affiliate Subordination Agreement, together
with such other powers as are reasonably incidental thereto. The
Agent (which term as used in this sentence and in Section 11.05 and
the first sentence of Section 11.06 hereof shall include reference
to its affiliates and its own and its affiliates' officers,
directors, employees and agents):
(a) shall have no duties or responsibilities except
those expressly set forth in this Agreement and in the other
Basic Documents and any Affiliate Subordination Agreement, and
shall not by reason of this Agreement or any other Basic
Document be a trustee for any Lender;
(b) shall not be responsible to the Lenders for any
recitals, statements, representations or warranties contained
in this Agreement or in any other Basic Document or any
Affiliate Subordination Agreement, or in any certificate or
other document referred to or provided for in, or received by
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any of them under, this Agreement or any other Basic Document
or any Affiliate Subordination Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, any Note or any other Basic
Document or any other document referred to or provided for
herein or therein or for any failure by Holdings or either
Subsidiary Guarantor or any other Person to perform any of its
obligations hereunder or thereunder; and
(c) shall not be responsible for any action taken or
omitted to be taken by it hereunder or under any other Basic
Document or under any other document or instrument referred to
or provided for herein or therein or in connection herewith or
therewith, except for its own gross negligence or willful
misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The Agent may deem
and treat the payee of a Note as the holder thereof for all
purposes hereof unless and until a notice of the assignment or
transfer thereof shall have been filed with the Agent, together
with the consent of Holdings to such assignment or transfer (to the
extent provided in Section 12.06(b) hereof).
11.02 RELIANCE BY AGENT. The Agent shall be entitled to
rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone, telecopy,
telegram or cable) in good faith believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by the
Agent. As to any matters not expressly provided for by this
Agreement or any other Basic Document or any Affiliate Subordina-
tion Agreement, the Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder or thereunder in
accordance with instructions given by the Majority Lenders, and
such instructions of the Majority Lenders and any action taken or
failure to act pursuant thereto shall be binding on all of the
Lenders.
11.03 DEFAULTS. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the Agent
has received notice from a Lender or Holdings or either Subsidiary
Guarantor specifying such Default and stating that such notice is a
"Notice of Default". In the event that the Agent receives such a
notice of the occurrence of a Default, the Agent shall give prompt
notice thereof to the Lenders. The Agent shall (subject to Section
11.07 hereof) take such action with respect to such Default as
shall be directed by the Majority Lenders, PROVIDED that, unless
and until the Agent shall have received such directions, the Agent
may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default as it shall
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deem advisable in the best interest of the Lenders except to the
extent that this Agreement expressly requires that such action be
taken, or not be taken, only with the consent or upon the
authorization of the Majority Lenders or all of the Lenders.
11.04 RIGHTS AS A LENDER. With respect to its
Commitment and the Loans made by it, Chase (and any successor
acting as Agent) in its capacity as a Lender hereunder shall have
the same rights and powers hereunder as any other Lender and may
exercise the same as though it were not acting as the Agent, and
the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. Chase
(and any successor acting as Agent) and its affiliates may (without
having to account therefor to any Lender) accept deposits from,
lend money to, make investments in and generally engage in any kind
of banking, trust or other business with Holdings, either
Subsidiary Guarantor, YPF, Maxus and their respective Subsidiaries
or Affiliates as if it were not acting as the Agent, and Chase (and
any such successor) and its affiliates may accept fees and other
consideration from any such Person for services in connection with
this Agreement or otherwise without having to account for the same
to the Lenders.
11.05 INDEMNIFICATION. The Lenders agree to indemnify
the Agent (to the extent not reimbursed under Section 12.03 hereof,
but without limiting the obligations of Holdings under said
Section 12.03) ratably in accordance with the aggregate principal
amount of the Loans held by the Lenders (or, if no Loans are at the
time outstanding, ratably in accordance with their respective
Commitments), for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Agent (including by any
Lender) arising out of or by reason of any investigation in or in
any way relating to or arising out of this Agreement or any other
Basic Document or any other documents contemplated by or referred
to herein or therein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses that
Holdings is obligated to pay under Section 12.03 hereof but
excluding, unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of
its agency duties hereunder) or the enforcement of any of the terms
hereof or thereof or of any such other documents, PROVIDED that no
Lender shall be liable for any of the foregoing to the extent they
arise from the gross negligence or willful misconduct of the party
to be indemnified.
11.06 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each
Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit
analysis of Holdings, the Subsidiary Guarantors and their
respective Subsidiaries (and YPF and Maxus and their respective
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Subsidiaries,) and decision to enter into this Agreement and that
it will, independently and without reliance upon the Agent or any
other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this
Agreement or under any other Basic Document. The Agent shall not
be required to keep itself informed as to the performance or
observance by Holdings or either Subsidiary Guarantor of this
Agreement or any of the other Basic Documents or any other document
referred to or provided for herein or therein or to inspect the
Properties or books of Holdings, the Subsidiary Guarantors, YPF,
Maxus or their respective Subsidiaries. Except for notices,
reports and other documents and information expressly required to
be furnished to the Lenders by the Agent hereunder or under the
other Basic Documents or any Affiliate Subordination Agreement, the
Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs,
financial condition or business of Holdings, the Subsidiary
Guarantors, YPF, Maxus or their respective Subsidiaries (or any of
their affiliates) that may come into the possession of the Agent or
any of its affiliates.
11.07 FAILURE TO ACT. Except for action expressly
required of the Agent hereunder and under the other Basic Documents
and any Affiliate Subordination Agreement, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its
satisfaction from the Lenders of their indemnification obligations
under Section 11.05 hereof against any and all liability and
expense that may be incurred by it by reason of taking or
continuing to take any such action and the Agent may consult with
counsel and the advice of counsel shall be full and complete
authorization and protection in respect of any action taken or
omitted by it hereunder under any of the other Basic Documents, any
Affiliate Subordination Agreement or under the Support Documents.
11.08 RESIGNATION OR REMOVAL OF AGENT. Subject to the
appointment and acceptance of a successor Agent as provided below,
the Agent may resign at any time by giving notice thereof to the
Lenders, Holdings and the Subsidiary Guarantors, and the Agent may
be removed at any time with or without cause by the Majority
Lenders with (unless an Event of Default has occurred or is
continuing) the approval of Holdings (such approval not to be
unreasonably withheld). Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor Agent
with (unless an Event of Default has occurred and is continuing)
the approval of Holdings (such approval not to be unreasonably
withheld). If no successor Agent shall have been so appointed by
the Majority Lenders and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent with (unless an Event of Default has occurred and
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is continuing) the approval of Holdings (such approval not to be
unreasonably withheld), that shall be a bank that has an office in
New York, New York with a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges 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 or removal hereunder as
Agent, the provisions of this Section 11 shall continue in effect
for its benefit in respect of any actions taken or omitted to be
taken by it while it was acting as the Agent.
11.09 CONSENTS UNDER OTHER BASIC DOCUMENTS. Except as
otherwise provided in Section 12.04 hereof with respect to this
Agreement, the Agent may, with the prior consent of the Majority
Lenders (but not otherwise), consent to any modification,
supplement or waiver under any of the Basic Documents or any
Affiliate Subordination Agreement, PROVIDED that, without the prior
consent of all of the Lenders, the Agent shall not (except as
provided herein or in the Support Documents): (i) release any
collateral or otherwise terminate any Lien under any Basic Document
providing for collateral security, or agree to additional
obligations being secured by such collateral security (unless the
Lien for such additional obligations shall be junior to the Lien in
favor of the other obligations secured by such Basic Document),
except that no such consent shall be required, and the Agent is
hereby authorized, to release any Lien covering Property that is
the subject of a disposition of Property permitted hereunder or to
which the Majority Lender have consented, (ii) release any Relevant
Obligor from its obligations under any of the Basic Documents to
which it is a party and (iii) release either YPF or Maxus from its
obligations under the YPF Guarantee Agreement or the Maxus
Guarantee Agreement, as the case may be, or either Subsidiary
Guarantor from its obligations under Section 6 hereof.
Section 12. MISCELLANEOUS.
12.01 WAIVER. No failure on the part of the Agent or
any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under this
Agreement or any Note shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or privilege
under this Agreement or any Note preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
12.02 NOTICES. All notices, requests and other
communications provided for herein and under the Support Documents
(including, without limitation, any modifications of, or waivers,
requests or consents under, this Agreement) shall be given or made
in writing (including, without limitation, by telecopy) delivered
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to the intended recipient at the "Address for Notices" specified
below its name on the signature pages hereof); or, as to any party,
at such other address as shall be designated by such party in a
notice to each other party. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered
or, in the case of a mailed notice, upon receipt, in each case
given or addressed as aforesaid.
12.03 EXPENSES, ETC. Holdings agrees to pay or
reimburse each of the Lenders and the Agent for (without
duplication): (a) all reasonable out-of-pocket costs and expenses
of the Agent (including, without limitation, the reasonable fees
and expenses of Milbank, Tweed, Hadley & McCloy ("MILBANK"),
special New York counsel to Chase, Perez Alati, Grondona, Benites,
Arntsen & Martinez de Hoz (h), special Argentine counsel to Chase
and Makarim & Taira S., special Indonesian counsel to Chase) in
connection with (i) the negotiation, preparation, execution and
delivery of this Agreement and the other Basic Documents and the
making and syndication of the Loans hereunder and related matters
(PROVIDED that such fees and expenses of Milbank cannot exceed the
budgeted amounts indicated by Milbank, without the prior approval
of YPF) and (ii) the negotiation or preparation of any
modification, supplement or waiver of any of the terms of this
Agreement or any of the other Basic Documents or any Affiliate
Subordination Agreement (whether or not consummated); (b) all
reasonable out-of-pocket costs and expenses of the Lenders and the
Agent (including, without limitation, the reasonable fees and
expenses of legal counsel) in connection with (i) any Event of
Default and any enforcement or collection proceedings resulting
therefrom, including, without limitation, all manner of
participation in or other involvement with (x) bankruptcy,
insolvency, receivership, foreclosure, winding up or liquidation
proceedings, (y) judicial or regulatory proceedings and (z)
workout, restructuring or other negotiations or proceedings
(whether or not the workout, restructuring or transaction
contemplated thereby is consummated) and (ii) the enforcement of
this Section 12.03; and (c) without duplication of any amounts
payable by Holdings under Section 5.06 hereof, all transfer, stamp,
documentary or other similar taxes, assessments or charges levied
by any governmental or revenue authority in respect of this
Agreement or any of the other Basic Documents or any other document
referred to herein or therein.
Holdings hereby agrees to indemnify the Agent and each
Lender and their respective directors, officers, employees,
attorneys and agents from, and hold each of them harmless against,
any and all losses, liabilities, claims, damages or expenses
incurred by any of them (including, without limitation, any and all
losses, liabilities, claims, damages or expenses incurred by the
Agent to any Lender), whether or not the Agent or any Lender is a
party thereto arising out of or by reason of any investigation or
litigation or other proceedings (including any threatened
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investigation or litigation or other proceedings) relating to the
Loans hereunder or any of the other transactions contemplated
hereby or any actual or proposed use by Holdings of the proceeds of
the Loans hereunder, including, without limitation, the reasonable
fees and disbursements of counsel incurred in connection with any
such investigation or litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or expenses
incurred by reason of the gross negligence or willful misconduct of
the Person to be indemnified or actions ("ILLEGAL ACTIONS") by such
Person which such Person knew or reasonably should have known were
illegal). Without limiting the generality of the foregoing,
Holdings will indemnify the Agent and each Lender from, and hold
the Agent and each Lender harmless against, any losses,
liabilities, claims, damages or expenses described in the preceding
sentence (but excluding, as provided in the preceding sentence, any
loss, liability, claim, damage or expense incurred by reason of the
gross negligence, willful misconduct or Illegal Actions of the
Person to be indemnified) arising under any Environmental Law as a
result of the past, present or future operations of Holdings or any
of its Subsidiaries (or any predecessor in interest to Holdings or
any of its Subsidiaries), or the past, present or future condition
of any site or facility owned, operated or leased at any time by
Holdings or any of its Subsidiaries (or any such predecessor in
interest), or any Release or threatened Release of any
Environmental Materials at or from any such site or facility,
including any such Release or threatened Release that shall occur
during any period when the Agent or any Lender shall be in
possession of any such site or facility following the exercise by
the Agent or any Lender of any of its rights and remedies hereunder
to the extent that such Release is caused by the Agent or the
Lenders.
12.04 AMENDMENTS, ETC. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be
modified or supplemented only by an instrument in writing signed by
Holdings, the Subsidiary Guarantors, the Agent and the Majority
Lenders, or by Holdings, the Subsidiary Guarantors and the Agent
acting with the consent of the Majority Lenders, and any provision
of this Agreement may be waived by the Majority Lenders or by the
Agent acting with the consent of the Majority Lenders; PROVIDED
that: (a) no modification, supplement or waiver shall, unless by
an instrument signed by all of the Lenders or by the Agent acting
with the consent of all of the Lenders: (i) increase, or extend
the term of the Commitments, or extend the time or waive any
requirement for the reduction or termination of the Commitments,
(ii) extend the date fixed for the payment of principal of or
interest on any Loan or any fee hereunder, (iii) reduce or forgive
the amount of any such payment of principal, (iv) reduce the rate
at which interest is payable thereon or any fee is payable
hereunder, (v) alter the rights or obligations of Holdings to
prepay Loans, (vi) alter the terms of this Section 12.04,
(vii) modify the definition of the term "Majority Lenders" or
modify in any other manner the number or percentage of the Lenders
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required to make any determinations or waive any rights hereunder
or to modify any provision hereof, or (viii) waive any of the
conditions precedent set forth in Section 6 hereof; (b) any
modification or supplement of Section 11 hereof shall require the
consent of the Agent; (c) any modification or supplement of
Section 6 hereof shall require the consent of the Subsidiary
Guarantors; and (d) any waiver of any provision of this Agreement
that adversely affects Holdings shall require the consent of
Holdings.
12.05 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
12.06 ASSIGNMENTS AND PARTICIPATIONS.
(a) Neither Holdings nor either Subsidiary Guarantor may
assign any of its rights or obligations hereunder or under the
Notes without the prior consent of all of the Lenders and the
Agent.
(b) Each Lender may (and each Lender shall, if requested
pursuant to Section 5.07 hereof) assign any of its Loans and its
Note, with the consent, so long as no Event of Default shall have
occurred and be continuing, of Holdings (such consent not to be
unreasonably withheld or delayed); PROVIDED that
(i) no such consent by Holdings shall be required in the
case of any assignment to another Lender;
(ii) except to the extent the Agent and Holdings shall
otherwise consent, any such partial assignment (other than to
another Lender) shall be in an amount at least equal to
$5,000,000;
(iii) each such assignment by a Lender of its Loans or
Note shall be made in such manner so that the same portion of
its Loans and Note is assigned to the respective assignee; and
(iv) upon each such assignment, the assignor and assignee
shall deliver to Holdings and the Agent a Notice of Assignment
in the form of Exhibit H hereto.
Upon execution and delivery by the assignor and the assignee to and
the Agent of such Notice of Assignment, and upon consent thereto by
the Agent and Holdings to the extent required above, the assignee
shall have, to the extent of such assignment (unless otherwise
consented to by the Agent and Holdings), the obligations, rights
and benefits of a Lender hereunder holding the Loans (or portions
thereof) assigned to it and specified in such Notice of Assignment
(in addition to the Loans, if any, theretofore held by such
assignee). Unless otherwise agreed by the Agent, upon each such
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assignment the assigning Lender shall pay the Agent an assignment
fee of $3,000.
(c) A Lender may sell or agree to sell to one or more
other Persons a participation in all or any part of any Loans held
by it, in which event each purchaser of a participation (a
"PARTICIPANT") shall be entitled to the rights and benefits of the
provisions of Section 9.01(m) hereof with respect to its
participation in such Loans as if (and the Relevant Obligors shall
be directly obligated to such Participant under such provisions as
if) such Participant were a "Lender" for purposes of said Section,
but, except as otherwise provided in Section 4.07(c) hereof, shall
not have any other rights or benefits under this Agreement or any
Note or any other Basic Document and any Affiliate Subordination
Agreement (the Participant's rights against such Lender in respect
of such participation to be those set forth in the agreements
executed by such Lender in favor of the Participant). All amounts
payable by Holdings to any Lender under Section 5 hereof and
Section 12.03 hereof in respect of Loans held by it, shall be
determined as if such Lender had not sold or agreed to sell any
participations in such Loans, and as if such Lender were funding
each of such Loan in the same way that it is funding the portion of
such Loan and Commitment in which no participations have been sold.
In no event shall a Lender that sells a participation agree with
the Participant to take or refrain from taking any action hereunder
or under any other Basic Document and any Affiliate Subordination
Agreement except that such Lender may agree with the Participant
that it will not, without the consent of the Participant, agree to
(i) extend the date fixed for the payment of principal of or
interest on the related Loan or Loans or any portion of any fee
hereunder payable to the Participant, (ii) reduce the amount of any
such payment of principal, (iii) reduce the rate at which interest
is payable thereon, or any fee hereunder payable to the
Participant, to a level below the rate at which the Participant is
entitled to receive such interest or fee, (v) alter the rights or
obligations of Holdings to prepay the related Loans or (vi) consent
to any modification, supplement or waiver hereof or of any of the
other Basic Documents to the extent that the same, under
Section 11.09 or 12.04 hereof, requires the consent of each Lender.
(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 12.06, any
Lender may (without notice to or the consent of Holdings, the Agent
or any other Lender and without payment of any fee) (i) assign and
pledge all or any portion of its Loan and its Note to any Federal
Reserve Bank as collateral security pursuant to Regulation A and
any Operating Circular issued by such Federal Reserve Bank and (ii)
assign all or any portion of its rights under this Agreement and
its Loan and its Note to an affiliate. No such assignment shall
release the assigning Lender from its obligations hereunder.
(e) A Lender may furnish any information concerning
Holdings, the Subsidiary Guarantors, YPF, Maxus or any of their
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respective Subsidiaries in the possession of such Lender from time
to time to assignees and participants (including prospective
assignees and participants), subject, however, to the provisions of
Section 12.12 hereof.
(f) Anything in this Section 12.06 to the contrary
notwithstanding, no Lender may assign or participate any interest
in any Loan held by it hereunder to Holdings or either Subsidiary
Guarantor or any of its Affiliates or Subsidiaries without the
prior consent of each Lender.
12.07 SURVIVAL. The obligations of Holdings under
Sections 5.01, 5.05, 5.06 and 12.03 hereof, and the obligations of
the Lenders under Sections 11.05 and 12.12 hereof, shall survive
the repayment of the Loans and the termination of the Commitments
and, in the case of any Lender that may assign any interest in its
Loans hereunder, shall survive the making of such assignment,
notwithstanding that such assigning Lender may cease to be a
"Lender" hereunder; PROVIDED that all such obligations shall
survive the repayment of the Loans only for a period of two years
(five years in the case of said Section 5.06) except if and to the
extent any liability is asserted by Holdings, the Agent or any of
the Lenders under any of such Sections within such two-year (or, in
the case of said Section 5.06, five-year) period. In addition,
each representation and warranty made, or deemed to be made by a
notice of any Loan, herein or pursuant hereto shall survive the
making of such representation and warranty, and no Lender shall be
deemed to have waived, by reason of making any Loan, any Default
that may arise by reason of such representation or warranty proving
to have been false or misleading, notwithstanding that such Lender
or the Agent may have had notice or knowledge or reason to believe
that such representation or warranty was false or misleading at the
time such Loan was made.
12.08 CAPTIONS. The table of contents and captions and
section headings appearing herein are included solely for
convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
12.09 COUNTERPARTS. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such counterpart.
12.10 GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement and the Notes shall be governed by, and construed in
accordance with, the law of the State of New York. Holdings and
the Subsidiary Guarantors hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern
District of New York and of the Supreme Court of the State of New
York sitting in New York County (including its Appellate Division),
and of any other appellate court in the State of New York, for the
purposes of all legal proceedings arising out of or relating to
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this Agreement or the transactions contemplated hereby. Holdings
and the Subsidiary Guarantors hereby irrevocably waive, to the
fullest extent permitted by applicable law, any objection that 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.
12.11 WAIVER OF JURY TRIAL. EACH OF HOLDINGS, EACH
SUBSIDIARY GUARANTOR, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, THE NOTES, THE OTHER BASIC DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.12 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY.
Each Lender and the Agent agrees (on behalf of itself and each of
its affiliates, directors, officers, employees and representatives)
with each of the Relevant Obligors, Maxus and YPF to use its best
efforts to keep confidential and not to disclose any non-public
information supplied to it by any of the Relevant Obligors, Maxus
and YPF pursuant to this Agreement or any of the other Basic
Documents that is identified by any of the Relevant Obligors, Maxus
and YPF as being confidential at the time the same is delivered to
the Lenders or the Agent, PROVIDED that nothing herein shall limit
the disclosure of any such information (i) to the extent required
by statute, rule, regulation or judicial process, (ii) to counsel
for any of the Lenders or the Agent, (iii) to bank examiners,
auditors or accountants, (iv) to the Agent or any other Lender (or
to Chase Securities, Inc., Chase Investment Bank, Ltd., and Chase
Manhattan Asia Limited), (v) in connection with any litigation
relating to any of the Basic Documents or any Affiliate
Subordination Agreement or the transactions contemplated thereby to
which any one or more of the Lenders or the Agent is a party,
(vi) to a subsidiary or affiliate of such Lender in connection with
the administration, management or booking of any Loans or (vii) to
any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or
prospective assignee or participant) first executes and delivers to
the respective Lender a Confidentiality Agreement substantially in
the form of Exhibit G hereto (or executes and delivers to such
Lender an acknowledgement to the effect that it is bound by the
provisions of this Section 12.12, which acknowledgement may be
included as part of the respective assignment or participation
agreement pursuant to which such assignee or participant acquires
an interest in the Loans hereunder). The obligations of each
Lender under this Section 12.12 shall supersede and replace the
obligations of such Lender under any confidentiality letter in
respect of this financing signed and delivered by such Lender to
any of the Relevant Obligors, Maxus and YPF prior to the date
hereof; in addition, the obligations of any assignee that has
executed a Confidentiality Agreement in the form of Exhibit G
hereto shall be superseded by this Section 12.12 upon the date upon
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which such assignee becomes a Lender hereunder pursuant to
Section 12.06(b) hereof.
12.13 APPOINTMENT OF HOLDINGS AS AGENT. Each Subsidiary
Guarantor hereby irrevocably appoints Holdings as its agent for the
purpose of giving and receiving any and all notices and other
communications provided for herein to be given by or to it
hereunder. By its signature below, Holdings hereby accepts such
appointment.
12.14 JOINT AND SEVERAL LIABILITY. All monetary
obligations of the Subsidiary Guarantors hereunder and under the
other Basic Documents to which the Subsidiary Guarantors are
parties shall be their joint and several obligations.
CREDIT AGREEMENT
<PAGE>
- 100 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year
first above written.
BORROWER
--------
MAXUS INDONESIA, INC.
By_________________________
Title:
Address for Notices:
Maxus Indonesia, Inc.
717 North Harwood Street
Dallas, TX 75201
Attention: Mark J. Gentry
Telecopier No.: 214-953-2901
Telephone No.: 214-953-2000
with copies to:
Maxus Energy Corporation
717 North Harwood Street
Dallas, TX 75201
Attention: Mark J. Gentry
Telecopier No.: 214-953-2901
YPF Sociedad Anonima
Avenida Pte. Roque Saenz Pena 777
Buenos Aires 1364, Argentina
Attention: Carlos Felices
Telecopier No.: 54-1-329-2113
CREDIT AGREEMENT
<PAGE>
- 101 -
SUBSIDIARY GUARANTORS
---------------------
MAXUS NORTHWEST JAVA, INC.
By_________________________
Title:
Address for Notices:
Maxus Northwest Java, Inc.
717 North Harwood Street
Dallas, TX 75201
Attention: Mark J. Gentry
Telecopier No.: 214-953-2901
Telephone No.: 214-953-2000
with copies to:
Maxus Energy Corporation
717 North Harwood Street
Dallas, TX 75201
Attention: Mark J. Gentry
Telecopier No.: 214-953-2901
YPF Sociedad Anonima
Avenida Pte. Roque Saenz Pena 777
Buenos Aires 1364, Argentina
Attention: Carlos Felices
Telecopier No.: 54-1-329-2113
CREDIT AGREEMENT
<PAGE>
- 102 -
MAXUS SOUTHEAST SUMATRA INC.
By_________________________
Title:
Address for Notices:
Maxus Southeast Sumatra, Inc.
717 North Harwood Street
Dallas, TX 75201
Attention: Mark J. Gentry
Telecopier No.: 214-953-2901
Telephone No.: 214-953-2000
with copies to:
Maxus Energy Corporation
717 North Harwood Street
Dallas, TX 75201
Attention: Mark J. Gentry
Telecopier No.: 214-953-2901
YPF Sociedad Anonima
Avenida Pte. Roque Saenz Pena 777
Buenos Aires 1364, Argentina
Attention: Carlos Felices
Telecopier No.: 54-1-329-2113
CREDIT AGREEMENT
<PAGE>
- 103 -
LENDERS
-------
Commitment THE CHASE MANHATTAN BANK
- ----------
(NATIONAL ASSOCIATION)
$48,125,000.00
By_________________________
Title:
Lending Office for all Loans:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Address for Notices:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Attention: Ian Schottlaender
Managing Director
Telecopier No.: 212-552-1687
Telephone No.: 212-552-5874
CREDIT AGREEMENT
<PAGE>
- 104 -
Commitment THE BANK OF NOVA SCOTIA
- ----------
$15,000,000.00
By_________________________
Title:
Lending Office for all Loans:
The Bank of Nova Scotia
Atlanta Agency
600 Peachtree Street N.E.
Suite 2700
Atlanta, GA 30308
Address for Notices:
The Bank of Nova Scotia
Atlanta Agency
600 Peachtree Street N.E.
Suite 2700
Atlanta, GA 30308
Attention: F.C.H. Ashby
Telecopier No.: 415-397-0791
Telephone No.: 404-877-1500
With a copy to:
The Bank of Nova Scotia
Houston Representative Office
1100 Louisiana
Suite 3000
Houston, TX 77002
Telecopier No.: 713-752-2425
Telephone No.: 713-752-0900
CREDIT AGREEMENT
<PAGE>
- 105 -
Commitment BANQUE FRANCAISE DU COMMERCE
- ---------- EXTERIEUR
$10,000,000.00
By_________________________
Title:
By_________________________
Title:
Lending Office for all Loans:
Banque Francaise du Commerce
Exterieur
Southwest Representative Office
333 Clay Street, Suite 4340
Houston, TX 77002
Address for Notices:
Banque Francaise du Commerce
Exterieur
Southwest Representative Office
333 Clay Street, Suite 4340
Houston, TX 77002
Attention: Tanya McAllister,
Administrative
Assistant
Telecopier No.: 713-759-9908
Telephone No.: 713-759-9401
With a copy to:
Banque Francaise du Commerce
Exterieur
645 Fifth Avenue
20th Floor
New York, NY 10022
Attention: Joan Rankine
Telecopier No.: 212-872-5045
Telephone No.: 212-872-5000
CREDIT AGREEMENT
<PAGE>
- 106 -
Commitment BANQUE PARIBAS - HOUSTON AGENCY
- ----------
$21,875,000.00
By_________________________
Title:
By_________________________
Title:
Lending Office for all Loans:
Banque Paribas
1200 Smith, Suite 3100
Houston, TX 77002
Address for Notices:
Banque Paribas
1200 Smith, Suite 3100
Houston, TX 77002
Attention: Bart Schouest
Telecopier No.: 713-659-3832
Telephone No.: 713-659-4811
CREDIT AGREEMENT
<PAGE>
- 107 -
Commitment THE FUJI BANK, LTD.
- ----------
$25,000,000.00
By_________________________
Title:
Lending Office for all Loans:
The Fuji Bank, Ltd.
1221 McKinney Street
Suite 4100
Houston, TX 77010
Address for Notices:
The Fuji Bank, Ltd.
1221 McKinney Street
Suite 4100
Houston, TX 77010
Attention: Loan Administration
Telecopier No.: 713-759-0048
Telephone No.: 713-650-7868
CREDIT AGREEMENT
<PAGE>
- 108 -
Commitment THE LONG-TERM CREDIT BANK OF JAPAN,
- ---------- LIMITED
$25,000,000.00
By_________________________
Title:
Lending Office for all Loans:
The Long-Term Credit Bank of Japan,
Limited
165 Broadway
New York, NY 10006
Address for Notices:
The Long-Term Credit Bank of Japan,
Limited
165 Broadway
New York NY 10006
Attention: LTCB New York Branch
Operations
Telecopier No.: 212-608-3452
Telephone No.: 212-335-4801
CREDIT AGREEMENT
<PAGE>
- 109 -
Commitment THE SANWA BANK LIMITED
- ----------
$15,000,000.00
By_________________________
Title:
Lending Office for all Loans:
The Sanwa Bank Limited
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
Address for Notices:
The Sanwa Bank Limited
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
Attention: Loan Administration
Telecopier No.: 212-754-2368
Telephone No.: 212-339-6241
CREDIT AGREEMENT
<PAGE>
- 110 -
Commitment SOCIETE GENERALE, SOUTHWEST AGENCY
- ----------
$15,000,000.00
By_________________________
Title:
Lending Office for all Loans:
Societe Generale, Southwest Agency
2001 Ross Avenue
Suite 4800
Dallas, TX 75201
Address for Notices:
Societe Generale, Southwest Agency
2001 Ross Avenue
Suite 4800
Dallas, TX 75201
Attention: Molly Franklin
Telecopier No.: 214-754-0171
Telephone No.: 214-979-2743
CREDIT AGREEMENT
<PAGE>
- 111 -
AGENT
-----
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By_________________________
Title:
Address for Notices to
Chase as Agent:
The Chase Manhattan Bank
(National Association)
4 Chase Metrotech Center-13th Floor
Brooklyn, New York 11245
Attention: New York Agency
Telecopier No.: 718-242-6910
Telephone No.: 718-242-7979
with copies to:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Attention: Ian Schottlaender
Telecopier No.: 212-552-1687
CREDIT AGREEMENT
<PAGE>
SCHEDULE I
MATERIAL AGREEMENTS AND LIENS
Part A - MATERIAL AGREEMENTS
Indebtedness of Maxus Java to Holdings pursuant to a
Loan Agreement dated June 1, 1992 between Maxus Java, as
Borrower, and Maxus International Energy Company, as Lender
(which Loan Agreement has been assigned to Holdings) in the
principal amount of $34,231,719.56 outstanding as at May 31,
1995.
Indebtedness of Holdings to Maxus Java in a principal
amount as at May 31, 1995 equal to that of the Indebtedness of
Maxus Java to Holdings referred to above, viz., $34,231,719.56.
The Operating Agreements
As to Maxus Sumatra, no other agreements specified in
Section 8.12(a) other than those entered into as operator under
the Operating Agreement relating to the Southeast Sumatra
Production Sharing Agreement.
As to Maxus Java, no other agreements specified in
Section 8.12(a) other than those entered into by Atlantic
Richfield Indonesia, Inc. (or affiliate(s) thereof) as operator
under the Operating Agreement relating to the Northwest Java
Production Sharing Agreement.
Part B - LIENS
See attached.
SCHEDULE I
<PAGE>
SCHEDULE II
ENVIRONMENTAL MATTERS
None.
SCHEDULE II
<PAGE>
SCHEDULE III
SUBSIDIARIES AND INVESTMENTS
PART A
None.
PART B
As to each of Maxus Java and Holdings, the Investment
consisting of Indebtedness of one of such corporations held by
the other, as referred to in Part A of Schedule I.
The Operating Agreements
As to Maxus Sumatra, no other arrangements specified in
Section 8.12(a) other than those entered into as operator under
the Operating Agreement relating to the Southeast Sumatra
Production Sharing Agreement.
As to Maxus Java, no other arrangements specified in
Section 8.12(a) other than those entered into by Atlantic
Richfield Indonesia, Inc. (or affiliate(s) thereof) as operator
under the Operating Agreement relating to the Northwest Java
Production Sharing Agreement.
SCHEDULE III
<PAGE>
SCHEDULE IV
LITIGATION
1. Federal Income Tax audit of Maxus Energy Corporation and
subsidiaries consolidated return for the year 1986.
2. Federal Income Tax audit of Maxus Energy Corporation and
subsidiaries consolidated return for the years 1987 - 1989.
3. Federal Income Tax audit of Maxus Energy Corporation and
subsidiaries consolidated return for the year 1991.
4. PT Buana Bintang v. Maxus Southeast Sumatra, Inc. Supreme
Court of Indonesia.
5. All litigation, claims and similar matters, if any,
disclosed in any public filings with the Securities and
Exchange Commission by Maxus Energy Corporation relating or
involving any Relevant Obligor.
SCHEDULE IV
<PAGE>
SCHEDULE V
Intentionally Omitted
SCHEDULE V
<PAGE>
SCHEDULE VI
PART A. EVENTS OF DEFAULT WITH RESPECT TO YPF
Capitalized terms used in Part A of this Schedule VI
(unless otherwise defined in Part A of this Schedule VI) shall
have the meanings assigned to them in the YPF Guarantee Agreement
or (if not otherwise defined in the YPF Guarantee Agreement) in
the Credit Agreement. In addition, as used in Part A of this
Schedule VI, each reference to a Subsidiary or Subsidiaries of
YPF shall be deemed to refer to a Subsidiary or Subsidiaries of
YPF (as the case may be) other than Maxus and its Subsidiaries.
1. YPF shall default in the performance of any of its
obligations under any of Section 4.12, 4.14, 4.15, 4.16 or
4.19 of the YPF Guarantee Agreement or under Section 4.07(b)
thereof; or YPF shall default in the performance of any of
its other obligations under the YPF Guarantee Agreement and
such default shall continue unremedied for a period of 30 or
more days after notice thereof to YPF by the Agent or any
Lender (through the Agent).
2. YPF or any Subsidiary shall (a) default in the
payment of the principal of or interest on any other note,
bond, coupon or other instrument evidencing Indebtedness in
an amount of $20,000,000 or more issued, assumed or
guaranteed by it, when and as the same shall become due and
payable, if such default shall continue for more than the
period of grace, if any, originally applicable thereto and
the time for payment of such amount has not been expressly
extended, or (b) default in the observance of any other
terms and conditions relating to any such Indebtedness, if
the effect of such default is to cause such Indebtedness to
become due prior to its stated maturity.
3. Any government or governmental authority shall have
condemned, nationalized, seized, or otherwise expropriated
all or any substantial part of the Property of YPF or any
Subsidiary or the share capital of YPF or any such
Subsidiary, or shall have assumed custody or control of such
Property or of the business or operations of YPF or any such
Subsidiary or of the share capital of YPF or any such
Subsidiary, or shall have taken any action for the winding-
up or dissolution of YPF or any such Subsidiary or any
action that would prevent YPF or any such Subsidiary or its
officers from carrying on its business or operations or a
substantial part thereof for a period of longer than 30 days
and the result of any such action shall materially prejudice
the ability of YPF to perform its obligations under the
Basic Documents to which it is a party.
4. It becomes unlawful for YPF to perform any of its
obligations under any of the Basic Documents to which it is
SCHEDULE VI
<PAGE>
- 2 -
a party, or any of its obligations thereunder ceases to be
valid, binding or enforceable.
5. A resolution is passed or adopted by the Board of
Directors or stockholders of YPF or a judgment of a court of
competent jurisdiction is made, that YPF be wound up or
dissolved, other than for the purposes of or pursuant to a
merger or consolidation otherwise permitted under and in
accordance with the terms of Section 4.16 of the YPF
Guarantee Agreement, and any winding up, dissolution or
liquidation proceedings remain undismissed for thirty (30)
days.
6. An attachment, execution, seizure before judgment
or other legal process is levied or enforced upon any part
of the Property of YPF or any Subsidiary which Property is
material to the condition, financial or otherwise, or to the
earnings, operations or business affairs or business
prospects of YPF and its Subsidiaries taken as a whole, and
(a) such attachment, execution, seizure before judgment or
other legal process is not discharged within 30 days thereof
or (b) if such attachment, execution, seizure before
judgment or other legal process shall not have been
discharged within such 30-day period, YPF or such
Subsidiary, as the case may be, shall not have within such
30-day period contested such attachment, execution, seizure
before judgment or other legal process in good faith by
appropriate proceedings upon stay of execution of the
enforcement thereof or upon posting a bond in connection
therewith; PROVIDED, HOWEVER, that in no event shall the
grace period provided by clause (b) above extend beyond the
60th day after the initiation of such proceedings.
7. A court having jurisdiction enters a decree or
order for (a) relief in respect of YPF or any Significant
Subsidiary in an involuntary case under Argentine Law No.
19,551 or any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect or (b) appointment of
an administrator, receiver, trustee or intervenor for YPF or
any Significant Subsidiary for all or substantially all of
the Property of YPF or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in
effect for a period of 30 consecutive days.
8. YPF or any Significant Subsidiary (a) commences a
voluntary case under Argentine Law No. 19,551 or any
applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, (b) consents to the appointment of
or taking possession by an administrator, receiver, trustee
or intervenor for YPF or any Significant Subsidiary for all
or substantially all of the Property of YPF or any
SCHEDULE VI
<PAGE>
- 3 -
Significant Subsidiary or (c) effects any general assignment
for the benefit of creditors.
9. A moratorium is agreed or declared in respect of
any Indebtedness of YPF, or of any Significant Subsidiary,
or any government or governmental authority condemns,
seizes, compulsorily purchases or expropriates 10% or more
of the assets of YPF and its Subsidiaries considered as one
enterprise.
10. Any event occurs which under the laws of any
relevant jurisdiction has an analogous effect to any of the
events referred to in Item 9 of Part A of this Schedule VI.
PART B. EVENTS OF DEFAULT WITH RESPECT TO MAXUS
Capitalized terms used in Part B of this Schedule VI
(unless otherwise defined in Part B of this Schedule VI) shall
have the meanings assigned to them in the Maxus Guarantee
Agreement or (if not otherwise defined in the Maxus Guarantee
Agreement) in the Credit Agreement.
1. Maxus shall default in the performance of any of
its obligations under any of Section 4.01(e), 4.05, 4.06 or 4.07
of the Maxus Guarantee Agreement; or Maxus shall default in the
performance of any of its other obligations under the Maxus
Guarantee Agreement and such default shall continue unremedied
for a period of 30 or more days after notice thereof to Maxus by
the Agent or any Lender (through the Agent).
2. Maxus shall default in the payment when due of any
principal of or interest on any of its other Indebtedness (or
amounts payable under any Interest Rate Protection Agreements or
Commodity Hedging Agreements) aggregating $10,000,000 or more
("OTHER INDEBTEDNESS").
3. Any event, other than an event specified in
paragraph 2 above, specified in any note, agreement, indenture or
other document evidencing or relating to any Other Indebtedness
(or amounts payable under any Interest Rate Protection Agreements
or Commodity Hedging Agreements) aggregating $10,000,000 or more
(other than Indebtedness in respect of the loans provided for by
the Credit Agreement dated as of June 8, 1995 between Midgard
Energy Company, the lenders named therein and Chase as agent for
such lenders) shall occur if the effect of such event is to cause
such Other Indebtedness to become due, or to be required to be
prepaid in full (whether by redemption, purchase, offer to
purchase or otherwise), prior to its stated maturity or, in the
case of an Interest Rate Protection Agreement or a Commodity
Hedging Agreement, to cause amounts owing thereunder to be
liquidated.
SCHEDULE VI
<PAGE>
- 4 -
4. A Non-Payment Cross-Default shall occur and be
continuing in respect of any Eligible Other Indebtedness. As
used in this paragraph 4:
(a) "ELIGIBLE OTHER INDEBTEDNESS" shall mean
Other Indebtedness other than Indebtedness referred to in
the first parenthetical clause in paragraph 3 above.
(b) "NON-PAYMENT CROSS-DEFAULT" shall mean, with
respect to any Eligible Other Indebtedness (the "FIRST OTHER
INDEBTEDNESS"), any event, other than an event referred to
in paragraph 2 above, in respect of any Eligible Other
Indebtedness (other than the First Other Indebtedness) which
permits the holder or holders of the First Other
Indebtedness (or a trustee or agent on behalf of such holder
or holders) to cause such First Other Indebtedness to become
due, or to be required to be prepaid in full (whether by
redemption, purchase, offer to purchase or otherwise), prior
to its stated maturity or, if the First Other Indebtedness
relates to an Interest Rate Protection Agreement or
Commodity Hedging Agreement, to cause payments owing
thereunder to be liquidated.
5. Maxus shall admit in writing its inability to, or
be generally unable to, pay its debts as such debts become due.
6. Maxus shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner or liquidator of itself or of all or
a substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) file a
petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of
debts, (iv) pass or adopt a resolution by the Board of Directors
or stockholders thereof for the purpose of effecting any of the
foregoing or (v) do the equivalent of any of the foregoing under
any foreign laws.
7. A proceeding or case shall be commenced, without
the application or consent of Maxus, in any court of competent
jurisdiction, seeking (i) the reorganization, liquidation,
dissolution, arrangement or winding-up of Maxus, or the
composition or readjustment of its debts, (ii) the appointment of
a receiver, custodian, trustee, examiner, liquidator or the like
of Maxus or of all or any substantial part of its Property,
(iii) similar relief in respect of Maxus under any law relating
to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and
SCHEDULE VI
<PAGE>
- 5 -
continue unstayed and in effect, for a period of 60 or more days
or (iv) the equivalent of any of the foregoing under any foreign
laws.
8. A final judgment or order for the payment of money
shall be entered against Maxus (i) which, within 30 days after
the entry thereof, has not been discharged or execution thereof
has not been stayed pending appeal or as to which any enforcement
proceeding shall have been commenced (and not stayed) by any
creditor thereon and (ii) the aggregate amount of all such final
judgments or orders meeting the criteria set forth in clause (i)
exceeds $10,000,000 (net of insurance coverage as to which the
insurer has acknowledged coverage).
SCHEDULE VI
<PAGE>
SCHEDULE VII
ELIGIBLE BUYERS
AMPOL REFINERIES LIMITED MITSUI & CO. LTD
ARCO MITSUI OIL ASIA (HONG KONG) LTD
BHP MOBIL
BP MITSUBISHI
CALTEX NICOR
CHEVRON NIPPON OIL CO.
COSMO OIL PETRO DIAMOND
COASTAL PECTEN (SHELL)
ENTERPRISE PETROLEUM LTD PETRA
EXO PETRO PROGRESS INC.
EXXON PHIBRO ENERGY USA INC.
FAR EAST OIL CO. PERTAMINA
FAR EAST PETROLEUM CO LTD PERMINDO
FUJI PACIFIC POINT
IDEMITSU SEAPAC ENERGY RESOURCES LTD
INPEX SHELL
ITOCHU SINOCHEM
JAPEX SINOLINK
J. ARON SINOPEC (HONG KONG) LIMITED
JAPAN INDONESIA OIL CO. SUMITOMO
KANGQI TAIYO OIL
KANSAI TEPCO
KASHIMA TEXACO
KIPCO TOHO
KERR MCGEE TOMEN PETROLEUM (SINGAPORE)
KOCH SUPPLY AND TRADING CO. UNION OIL
LUCKY GOLDSTAR INT'L. UNOCAL
LASMO VALERO REFINING COMPANY
MARUBENI VITOL
SCHEDULE VII
<PAGE>
SCHEDULE VIII
REORGANIZATION TRANSACTIONS
1. Incorporation of Maxus Indonesia on March 29, 1995
as a Wholly Owned Subsidiary of Natomas Energy Company ("NEC").
2. Dividend by NEC of all of the outstanding capital
stock of each of Maxus Java and Maxus Sumatra to Maxus Indonesia.
3. Dividend by NEC of all of the outstanding capital
stock of Maxus Indonesia to Maxus prior to the Merger.
SCHEDULE VIII
<PAGE>
SCHEDULE IX
WAIVERS OF STATUTES OF LIMITATION - TAXES
Extensions of the statue of limitations on the assessment of
United Stated federal income tax on Maxus Energy Corporation and
its subsidiaries has been granted with respect to the following
years:
Tax Year Extended to
-------- -----------
1986 December 31, 1995
1987 June 30, 1995
1988 June 30, 1995
1989 June 30, 1995
1990 September 15, 1996
1991 September 15, 1996
