<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549-1004
FORM 10-Q
QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
Commission file number 1-12088
UNITED MERIDIAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 75-2160316
- --------------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
1201 Louisiana, Suite 1400, Houston, TX 77002-5603
- ------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
(713) 654-9110
-------------------------------
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares outstanding of the registrant's common stock, all
of which comprise a single class with a $0.01 par value, as of April 30, 1997,
the latest practicable date, was 35,556,559.
<PAGE>
UNITED MERIDIAN CORPORATION
FORM 10-Q
MARCH 31, 1997
TABLE OF CONTENTS
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited)
Consolidated Statement of Income for the Three Months
Ended March 31, 1997 and 1996.............................. 1
Consolidated Balance Sheet at March 31, 1997 and
December 31, 1996.......................................... 2
Consolidated Statement of Changes in Stockholders' Equity
for the Year Ended December 31, 1996 and for the
Three Months Ended March 31, 1997.......................... 4
Consolidated Statement of Cash Flows for the Three Months
Ended March 31, 1997 and 1996.............................. 5
Notes to Consolidated Financial Statements.................. 6
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition....................... 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings............................................ 15
Item 2. Changes in Securities........................................ 15
Item 3. Defaults Upon Senior Securities.............................. 15
Item 4. Submission of Matters to a Vote of Security Holders.......... 15
Item 5. Other Information............................................ 15
Item 6. Exhibits and Reports on Form 8-K............................. 15
SIGNATURES............................................................... 15
EXHIBITS -
Index to Exhibits...................................................... 16
<PAGE>
CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
For the three months
ended March 31,
-------------------------
1997 1996
---------- ----------
Revenues:
Gas sales...................................... $ 32,606 $ 30,002
Oil sales...................................... 30,874 16,419
Gain on sale of assets......................... 827 5,525
Other.......................................... 698 222
---------- ----------
65,005 52,168
---------- ----------
Costs and expenses:
Production costs............................... 13,150 12,804
General and administrative..................... 2,549 3,399
Exploration, including dry holes
and impairments............................... 12,740 4,461
Depreciation, depletion and amortization....... 21,196 19,759
---------- ----------
49,635 40,423
---------- ----------
Income from operations.......................... 15,370 11,745
Other income, expenses and deductions:
Interest and debt expense..................... (4,688) (5,539)
Interest and other income..................... 973 114
---------- ----------
Income before income taxes...................... 11,655 6,320
Income tax provision:
Current....................................... (1,282) (108)
Deferred...................................... (4,174) (2,496)
---------- ----------
Net income...................................... 6,199 3,716
Preferred stock dividends....................... - (766)
---------- ----------
Net income available to common stockholders..... $ 6,199 $ 2,950
========== ==========
Net income per common share (Exhibit 11.1)...... $ 0.17 $ 0.10
========== ==========
Weighted average number of common
shares outstanding, including
common share equivalents (Exhibit 11.1)........ 36,627 29,618
========== ==========
The accompanying notes are an integral part of these
consolidated financial statements.
-1-
<PAGE>
UNITED MERIDIAN CORPORATION
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
March 31, December 31,
1997 1996
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents..................... $ 63,774 $ 54,942
Accounts receivable:
Oil and gas sales............................ 24,307 36,238
Joint interest and other..................... 52,230 45,447
Deferred income taxes......................... 2,839 2,839
Inventory..................................... 11,788 11,389
Prepaid expenses and other.................... 5,734 5,306
------------ ------------
160,672 156,161
------------ ------------
Property and equipment, at cost:
Oil and gas (successful efforts method)
Proved properties............................ 884,098 851,818
Unproved properties.......................... 15,073 14,667
Other property and equipment.................. 10,098 8,295
------------ ------------
909,269 874,780
Accumulated depreciation, depletion
and amortization............................. (363,444) (350,591)
------------ ------------
545,825 524,189
------------ ------------
Other assets:
Gas imbalances receivable..................... 5,621 5,702
Deferred income taxes......................... 22,428 23,035
Debt issue costs.............................. 10,139 8,370
Other......................................... 869 836
------------ ------------
39,057 37,943
------------ ------------
TOTAL ASSETS............................. $ 745,554 $ 718,293
============ ============
The accompanying notes are an integral part of these
consolidated financial statements.
-2-
<PAGE>
UNITED MERIDIAN CORPORATION
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
March 31, December 31,
1997 1996
------------ ------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.............................. $ 83,634 $ 80,593
Advances from joint owners.................... 13,358 5,575
Interest payable.............................. 7,235 3,800
Accrued liabilities........................... 8,506 7,525
Current maturities of long-term debt.......... 911 899
------------ ------------
113,644 98,392
------------ ------------
Long-term debt:
10-3/8% senior subordinated notes............. 150,000 150,000
Other......................................... 6,693 6,832
------------ ------------
156,693 156,832
------------ ------------
Deferred credits and other liabilities:
Deferred income taxes......................... 20,963 20,797
Gas imbalances payable........................ 4,081 3,994
Other......................................... 5,960 6,042
------------ ------------
31,004 30,833
------------ ------------
Commitments and contingencies
Stockholders' equity:
Common stock.................................. 355 352
Additional paid-in capital.................... 546,874 540,661
Foreign currency translation adjustment....... (4,695) (4,257)
Retained earnings (deficit)................... (98,321) (104,520)
------------ ------------
444,213 432,236
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.... $ 745,554 $ 718,293
============ ============
The accompanying notes are an intgral part of these
consolidated financial statements.
-3-
<PAGE>
UNITED MERIDIAN CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
FOR THE YEAR ENDED DECEMBER 31, 1996 AND THREE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
SERIES F
PREFERRED STOCK COMMON STOCK ADD'L FOREIGN RETAINED
------------------------ --------------------- PAID-IN CURRENCY EARNINGS
SHARES AMOUNT SHARES AMOUNT CAPITAL ADJUSTMENT (DEFICIT) TOTAL
---------- ---------- ---------- --------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995 1,166,667 $ 12 28,150,224 $ 281 $ 336,469 $ (4,057) $(120,393) $ 212,312
Foreign currency translation
adjustment................. (200) (200)
Common stock offering........... 4,088,942 41 182,629 182,670
Exercise of common stock
options.................... 897,007 9 17,951 17,960
Exercise of warrants............ 235,749 2 3,619 3,621
Preferred stock dividends....... (1,531) (1,531)
Automatic conversion of
Series F preferred stock
to common stock............... (1,166,667) (12) 1,845,284 19 (7) -
Net income...................... 17,404 17,404
----------- ---------- ---------- --------- --------- ---------- --------- ----------
Balance, December 31, 1996...... - - 35,217,206 352 540,661 (4,257) (104,520) 432,236
Foreign currency translation
adjustment.................... (438) (438)
Exercise of common stock
options....................... 331,599 3 6,213 6,216
Net income...................... 6,199 6,199
----------- ---------- ---------- --------- --------- ---------- --------- ----------
Balance, March 31, 1997
(Unaudited).................. - $ - 35,548,805 $ 355 $ 546,874 $ (4,695) $ (98,321) $ 444,213
=========== ========== ========== ========= ========= ========== ========= ==========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
-4-
<PAGE>
UNITED MERIDIAN CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
For the three months
ended March 31,
--------------------
1997 1996
---------- ----------
Cash flows from operating activities:
Net income........................................ $ 6,199 $ 3,716
Adjustments to reconcile net income to
cash from operating activities:
Exploration, including dry holes
and impairments................................ 12,740 4,461
Depreciation, depletion and amortization........ 21,196 19,759
Amortization of debt issue cost................. 336 394
Deferred income tax provision................... 4,174 2,496
Gain on sale of assets.......................... (827) (5,525)
---------- ----------
43,818 25,301
Changes in assets and liabilities:
Decrease (increase) in receivables............... 2,045 (3,729)
Increase (decrease) in payables and other
current liabilities............................. 5,415 (11,523)
Increase (decrease) in net gas imbalances........ 168 (375)
Other............................................ 2,424 1,776
---------- ----------
Net cash provided by operating activities.... 53,870 11,450
---------- ----------
Cash flows from investing activities:
Exploration....................................... (28,842) (12,382)
Development....................................... (18,479) (16,774)
Additions to other property and equipment......... (1,640) (231)
Net proceeds from sale of assets.................. 3,314 7,520
---------- ----------
Net cash used in investing activities........ (45,647) (21,867)
---------- ----------
Cash flows from financing activities:
Repayment of long-term debt....................... (228) (39,493)
Additions to total debt........................... - 44,083
Debt issue costs.................................. (2,153) (197)
Proceeds from exercise of common stock options.... 2,990 949
Preferred stock dividends......................... - (766)
---------- ----------
Net cash provided by financing activities.... 609 4,576
---------- ----------
Net increase (decrease) in cash and cash
equivalents........................................ 8,832 (5,841)
Cash and cash equivalents at beginning of period.... 54,942 13,586
---------- ----------
Cash and cash equivalents at end of period.......... $ 63,774 $ 7,745
========== ==========
The accompanying notes are an integral part of these
consolidated financial statements.
-5-
<PAGE>
UNITED MERIDIAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 BASIS OF FINANCIAL STATEMENTS
The accompanying consolidated financial statements of United Meridian
Corporation (UMC or the Company) included herein have been prepared, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission (SEC). Although certain information normally included in financial
statements prepared in accordance with generally accepted accounting principles
has been condensed or omitted, UMC believes that the disclosures are adequate to
make the information presented not misleading. The financial statements should
be read in conjunction with the consolidated financial statements and notes
thereto for the year ended December 31, 1996.
The financial statements reflect all normal recurring adjustments that, in the
opinion of management, are necessary for a fair presentation.
NOTE 2 ACQUISITIONS AND DISPOSITIONS
As part of its on-going operations, the Company continually sells producing
and undeveloped reserves and related assets. Certain transactions occurring in
the periods presented are discussed below.
During the three months ended March 31, 1997, the Company sold various non-
strategic North American properties for total proceeds of $3,314,000 resulting
in pre-tax gains of $827,000.
In late 1995, the Company agreed to assign to Yukong Limited a portion of its
interests in Blocks CI-01 and CI-02 in Cote d'Ivoire and Blocks B, C and D in
Equatorial Guinea. Mobil Equatorial Guinea, Inc. (Mobil) subsequently exercised
its preferential right to purchase the interest in Block B in lieu of the
proposed assignment to Yukong Limited. Under the agreements, the Company
received $5,441,000 in cash in the first quarter of 1996 resulting in a pre-tax
gain of $4,764,000.
During the first quarter of 1996, the Company sold various other non-strategic
North American properties for total proceeds of $2,079,000, resulting in pre-tax
gains of $761,000.
NOTE 3 FINANCIAL INSTRUMENTS
The Company has, from time to time, entered into hedging transactions to
reduce its exposure to both crude oil and natural gas price reductions and
increases in interest rates.
The Company hedged a portion of its oil production with collar agreements in
the first three months of 1997, resulting in a $364,000 downward adjustment to
oil revenues. Details of contracts in place at March 31, 1997 are described
below.
At March 31, 1997, the Company had oil collar contracts on 200,000 barrels of
oil per month for April 1997 through June 1997 with a "floor" price of $21.00
and an average "cap" price of $24.69. UMC's current hedging agreements are
settled on a monthly basis. All of UMC's current contracts specify the third-
party index to be the New York Mercantile Exchange (NYMEX) futures contract
prices for the applicable commodity, matching the appropriate basis risk. There
was no deferred hedge gain or loss for crude oil at March 31, 1997.
Effective January 18, 1994, UMC entered into five-year fixed LIBOR interest
rate swap contracts that provide for fixed interest rates to be realized on
notional amounts of $30,000,000 in 1994 and $45,000,000 from 1995 through 1998.
The agreement includes varying annual fixed interest rates ranging from 3.66% in
1994 to 6.40% in 1998, plus interest rate margins. Due to the November 1996
pay-down of amounts outstanding under the Credit Facility, the Company did not
have notional amounts of floating rate debt totaling $45,000,00 and therefore
could no longer apply hedge accounting. As such,
-6-
<PAGE>
a gain of $486,000 was recorded as other income during the first quarter of
1997.
NOTE 4 BANK FACILITY
During March 1997, the Company completed negotiations to expand the Credit
Facility to $300,000,000 with an initial borrowing base of $275,000,000. The
new facility was expanded to include the Company's international assets. At
March 31, 1997, there were no outstanding borrowings.
NOTE 5 IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARD
The Financial Accounting Standards Board (FASB) recently issued Statement of
Financial Accounting Standard (SFAS) No. 128, "Earnings per Share" superseding
Accounting Principles Board (APB) No. 15. The main goals of the FASB were to
harmonize the earnings per share calculation in the United States with those
common in other countries and with International Standard No. 33 and to address
criticism that APB No. 15 contained unnecessarily complex and arbitrary
provisions. Although SFAS No. 128 cannot be adopted until December 15, 1997,
pro forma disclosures are allowed to minimize the impact of year-end adoption.
Therefore, the following pro forma information is presented:
For the three months ended March 31,
------------------------------------
1997 1996
------------ ------------
Primary EPS as reported under
APB No. 15 $ .17 $ .10
Effect of SFAS No. 128 .01 -
------------ ------------
Basic EPS, as restated $ .18 $ .10
============ ============
Fully diluted EPS as reported
under APB No. 15 $ .17 $ .10
Effect of SFAS No. 128 - -
------------ ------------
Diluted EPS, as restated $ .17 $ .10
============ ============
As mandated by SFAS No. 128, basic earnings per common share is computed by
dividing net income by the weighted average number of shares of common stock
outstanding during the year. Diluted earnings per common share is determined
on the assumption that outstanding stock options have been converted using the
average price for the quarter.
NOTE 6 SUPPLEMENTAL GUARANTOR INFORMATION
In connection with the sale by UMC of the 10-3/8% Senior Subordinated Notes
(Notes) in October 1995, UMC Petroleum Corporation (Petroleum), wholly-owned and
the Company's only direct subsidiary, has unconditionally guaranteed the full
and prompt performance of the Company's obligations under the Notes and related
indenture, including the payment of principal, premium (if any) and interest.
Other than intercompany arrangements and transactions, the consolidated
financial statements of Petroleum are equivalent in all material respects to
those of the Company and therefore the separate consolidated financial
statements of Petroleum are not material to investors and have not been included
herein. However, in an effort to provide meaningful financial data relating to
the guarantor (i.e., Petroleum on an unconsolidated basis) of the Notes, the
following condensed consolidating financial information has been provided
following the policies set forth below:
(1) Investments in subsidiaries are accounted for by the Company on the
cost basis. Earnings of subsidiaries are therefore not reflected in
the related investment accounts.
(2) Certain reclassifications were made to conform all of the financial
information to the financial presentation on a consolidated basis. The
principal eliminating entries eliminate investments in subsidiaries
and intercompany balances.
-7-
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
For the three months ended March 31, 1997 and 1996
(In thousands)
<TABLE>
<CAPTION>
UNCONSOLIDATED
--------------------------------------------
GUARANTOR NON-GUARANTOR CONSOLIDATED
UMC SUBSIDIARY SUBSIDIARIES UMC
---------- ---------- ------------- ------------
<S> <C> <C> <C> <C>
1997
- ----
Revenues.............................. $ - $ 38,804 $ 26,201 $ 65,005
---------- ---------- ------------- ------------
Costs and expenses:
Production costs................... - 9,498 3,652 13,150
General and administrative......... 30 2,049 470 2,549
Exploration, including dry holes and
impairments....................... - 2,978 9,762 12,740
Depreciation, depletion and
amortization...................... - 13,668 7,528 21,196
---------- ---------- ------------- ------------
Income (loss) from operations......... (30) 10,611 4,789 15,370
Interest income (expense), net..... 4,761 (5,155) (4,294) (4,688)
Other credits, net................. - 997 (24) 973
---------- ---------- ------------- ------------
Income before income taxes............ 4,731 6,453 471 11,655
Income tax provision.................. (1,723) (2,665) (1,068) (5,456)
---------- ---------- ------------- ------------
Net income (loss)..................... $ 3,008 $ 3,788 $ (597) $ 6,199
========== ========== ============= ============
1996
- ----
Revenues.............................. $ - $ 38,170 $ 13,998 $ 52,168
---------- ---------- ------------- ------------
Costs and expenses:
Production costs................... - 9,707 3,097 12,804
General and administrative......... 37 2,643 719 3,399
Exploration, including dry holes
and impairments................... - 2,019 2,442 4,461
Depreciation, depletion and
amortization...................... - 16,698 3,061 19,759
---------- ---------- ------------- ------------
Income (loss) from operations......... (37) 7,103 4,679 11,745
Interest income (expense), net..... 4,405 (7,953) (1,991) (5,539)
Other credits, net................. - 81 33 114
---------- ---------- ------------- ------------
Income (loss) before income taxes..... 4,368 (769) 2,721 6,320
Income tax provision.................. (1,509) (17) (1,078) (2,604)
---------- ---------- ------------- ------------
Net income (loss)..................... $ 2,859 $ (786) $ 1,643 $ 3,716
========== ========== ============= ============
</TABLE>
-8-
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
At March 31, 1997 and December 31, 1996
(In thousands)
<TABLE>
<CAPTION>
UNCONSOLIDATED
--------------------------------------------
GUARANTOR NON-GUARANTOR ELIMINATING CONSOLIDATED
UMC SUBSIDIARY SUBSIDIARIES ENTRIES UMC
---------- ---------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
MARCH 31, 1997
- --------------
ASSETS
Current assets.............................. $ 2 $ 102,256 $ 58,414 $ - $ 160,672
Intercompany investments.................... 695,473 (355,054) (202,082) (138,337) -
Property and equipment, net................. - 275,996 269,829 - 545,825
Other assets................................ (8,386) 51,254 (3,811) - 39,057
---------- ---------- ------------- ----------- ------------
Total assets............................. $ 687,089 $ 74,452 $ 122,350 $ (138,337) $ 745,554
========== ========== ============= =========== ============
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities......................... $ 7,217 $ 48,123 $ 58,304 $ - $ 113,644
Long-term debt.............................. 150,000 (5,700) 12,393 - 156,693
Deferred credits and other
liabilities.............................. - 9,427 21,577 - 31,004
Stockholders' equity........................ 529,872 22,602 30,076 (138,337) 444,213
---------- ---------- ------------- ----------- ------------
Total liabilities &
stockholders' equity.................... $ 687,089 $ 74,452 $ 122,350 $ (138,337) $ 745,554
========== ========== ============= =========== ============
DECEMBER 31, 1996
- -----------------
ASSETS
Current assets.............................. $ 3 $ 93,023 $ 63,135 $ - $ 156,161
Intercompany investments.................... 668,025 (346,861) (182,827) (138,337) -
Property and equipment, net................. - 282,236 241,953 - 524,189
Other assets................................ 5,947 36,714 (4,718) - 37,943
---------- ---------- ------------- ----------- ------------
Total assets............................. $ 673,975 $ 65,112 $ 117,543 $ (138,337) $ 718,293
========== ========== ============= =========== ============
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities......................... $ 3,327 $ 42,577 $ 52,488 $ - $ 98,392
Long-term debt.............................. 150,000 (5,700) 12,532 - 156,832
Deferred credits and other
liabilities................................ - 9,421 21,412 - 30,833
Stockholders' equity........................ 520,648 18,814 31,111 (138,337) 432,236
---------- ---------- ------------- ----------- ------------
Total liabilities &
stockholders' equity...................... $ 673,975 $ 65,112 $ 117,543 $ (138,337) $ 718,293
========== ========== ============= =========== ============
</TABLE>
-9-
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the three months ended March 31, 1997 and 1996
(In thousands)
<TABLE>
<CAPTION>
UNCONSOLIDATED
--------------------------------------------
GUARANTOR NON-GUARANTOR CONSOLIDATED
UMC SUBSIDIARY SUBSIDIARIES UMC
---------- ---------- ------------- -----------
<S> <C> <C> <C> <C>
1997
- ----
Cash flows from operating activities:
Net income (loss).......................... $ 3,008 $ 3,788 $ (597) $ 6,199
Adjustments to reconcile net income
(loss) to cash from operating activities.. 1,861 18,613 17,145 37,619
Changes in assets and liabilities.......... 18,223 (8,199) 28 10,052
---------- ---------- ------------- -----------
Net cash provided by operating
activities............................. 23,092 14,202 16,576 53,870
Cash flows used in investing activities..... - (6,415) (39,232) (45,647)
Cash flows provided by (used in) financing
activities................................. (23,093) 3,630 20,072 609
---------- ---------- ------------- -----------
Net increase (decrease) in cash and cash
equivalents................................ (1) 11,417 (2,584) 8,832
Cash and cash equivalents at beginning
of period.................................. 3 41,759 13,180 54,942
---------- ---------- ------------- -----------
Cash and cash equivalents at end of period.. $ 2 $ 53,176 $ 10,596 $ 63,774
========== ========== ============= ===========
1996
- ----
Cash flows from operating activities:
Net income (loss).......................... $ 2,859 $ (786) $ 1,643 $ 3,716
Adjustments to reconcile net income
(loss) to cash from operating activities.. 1,639 18,090 1,856 21,585
Changes in assets and liabilities......... 3,124 (12,318) (4,657) (13,851)
---------- ---------- ------------- -----------
Net cash provided by (used in) operating
activities............................ 7,622 4,986 (1,158) 11,450
Cash flows used in investing activities..... - (17,474) (4,393) (21,867)
Cash flows provided by (used in) financing
activities................................ (7,636) 10,193 2,019 4,576
---------- ---------- ------------- -----------
Net decrease in cash and cash
equivalents............................... (14) (2,295) (3,532) (5,841)
Cash and cash equivalents at beginning
of period................................. 31 6,631 6,924 13,586
---------- ---------- ------------- -----------
Cash and cash equivalents at end of period.. $ 17 $ 4,336 $ 3,392 $ 7,745
========== ========== ============= ===========
</TABLE>
-10-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION.
RESULTS OF OPERATIONS
The following table sets forth certain operating information of the Company for
the periods shown:
FOR THE THREE MONTHS
ENDED MARCH 31,
--------------------
1997 1996
------ ------
Production:
Oil (MBO)
U.S.................................... 512 556
Canada................................. 102 145
Cote d'Ivoire.......................... 294 203
Equatorial Guinea...................... 750 -
------ ------
Total................................. 1,658 904
Natural gas (MMCF)
U.S.................................... 10,588 12,292
Canada................................. 1,636 1,193
Cote d'Ivoire.......................... 951 513
------ ------
Total................................. 13,175 13,998
Average wellhead sales price, including hedging:
Oil ($ per bbl)
U.S.................................... $ 19.55 $ 18.05
Canada................................. $ 21.36 $ 16.72
Cote d'Ivoire.......................... $ 19.92 $ 18.71
Equatorial Guinea...................... $ 17.11 $ -
Average............................... $ 18.62 $ 18.15
Natural gas ($ per MCF)
U.S.................................... $ 2.62 $ 2.21
Canada................................. $ 1.90 $ 1.61
Cote d'Ivoire.......................... $ 1.87 $ 1.72
Average............................... $ 2.47 $ 2.14
Additional data ($ per BOE):
Production and operating costs /(1)/...... $ 2.65 $ 3.04
General and administrative expense........ $ 0.66 $ 1.05
Oil and natural gas depletion and
depreciation............................. $ 5.41 $ 6.00
/(1)/ Costs incurred to operate and maintain wells and related equipment,
excluding ad valorem and production taxes of $0.76 and $0.92 per BOE for
the three months ended March 31, 1997 and 1996, respectively.
-11-
<PAGE>
THREE MONTHS ENDED MARCH 31, 1997 COMPARED WITH THE THREE MONTHS ENDED
MARCH 31, 1996.
Oil and gas revenues for the three months ended March 31, 1997 were $63.5
million, or 36.9% greater than oil and gas revenues of $46.4 million for the
three months ended March 31, 1996. The increase in oil and gas revenues is
primarily due to increased oil production volumes in West Africa and
improvements in oil and natural gas prices. The average sales price after
hedging for natural gas increased to $2.47 per Mcf, or 15.4%, in the first
quarter of 1997 as compared to the same period of 1996. The impact of hedging
on natural gas prices received and natural gas revenues for 1996 was a decrease
of $0.11 per MCF and $1.5 million, respectively. Natural gas production for the
three months ended March 31, 1997 was 13,175 MMCF, a decrease of 5.9% as
compared to the first quarter of 1996 volumes due primarily to reduced
production from the Gulf of Mexico. Oil production increased 83.4%, or 754 MBO,
in the first three months of 1997 as compared to the same period in 1996 due
primarily to increased oil production in Cote d'Ivoire and commencement of
production in Equatorial Guinea in August 1996. The average sales price after
hedging for oil increased to $18.62, or 2.6%, in the three months ended
March 31, 1997 as compared to the prior year period. The impact of hedging on
oil prices received and oil revenues for the first quarter of 1997 was a
decrease of $0.22 per barrel and $0.4 million, respectively.
During the three months ended March 31, 1997, the Company sold various non-
strategic North American properties for total cash proceeds of $3.3 million,
resulting in pre-tax gains of $0.8 million. The first quarter of 1996 gains on
sales of assets resulted primarily from a pre-tax gain of $4.8 million on cash
proceeds of $5.4 million related to the purchase by Mobil of a 10% interest in
Equatorial Guinea Block B. In addition, the Company sold various non-strategic
North American properties for total cash proceeds of $2.1 million, resulting in
$0.7 million of pre-tax gains.
Production costs, including ad valorem and production taxes, increased to
$13.2 million, or 3.1%, in the first three months of 1997 as compared to $12.8
million in the comparable period of 1996, primarily due to commencement of
production in Equatorial Guinea in August 1996. However, on a cost per barrel
of oil equivalent (BOE) basis, production costs in the first quarter of 1997
decreased $0.55 per BOE (13.9%) when compared to the first quarter of 1996.
General and administrative expenses for the three months ended March 31, 1997
were $2.5 million compared to $3.4 million in the three months ended
March 31, 1996. This decrease was primarily due to certain non-cash benefits
accrual reductions in the first quarter of 1997. General and administrative
expenses per BOE of production decreased from $1.05 per BOE in the first quarter
of 1996 to $0.66 per BOE in the comparable period of 1997.
Exploration, dry hole and lease impairment expenses for the first quarter of
1997 totaled $12.7 million as compared to $4.5 million in the first quarter of
1996. This increase of $8.2 million was primarily due to increased dry hole
costs experienced in Equatorial Guinea Block D and Cote d'Ivoire Block CI-12.
In addition, the Company had increased geological and geophysical costs in the
1997 period as compared to the 1996 period reflecting a higher level of
exploration activity in Cote d'Ivoire, Equatorial Guinea and North America.
Depreciation, depletion and amortization (DD&A) expense for the three months
ended March 31, 1997 of $21.1 million increased 6.6% from $19.8 million for the
comparable 1996 period. This increase is primarily attributable to increased
production levels in Cote d'Ivoire and Equatorial Guinea. The rate per BOE of
oil and gas DD&A decreased 9.8% from $6.00 per BOE in the first quarter of 1996
to $5.41 per BOE in the 1997 comparable period. This decrease is primarily due
to a change in the Company's production mix (lower Gulf of Mexico production
with historically high DD&A rates, offset by increased West African production
with lower DD&A rates).
Interest and debt expense for the three months ended March 31, 1997 was $4.7
million, including non-cash amortization of debt issue costs totaling $0.3
million, compared to $5.5 million in the three months ended March 31, 1996. The
decrease in interest expense is primarily due to the reduced debt levels in 1997
as a result of debt payments in late 1996 with the proceeds of the November 1996
equity offering.
An income tax provision of $5.5 million (of which $1.3 million is a current
provision and $4.2 million is a deferred provision) was recognized for the three
months ended 1997, compared to a provision of $2.6 million (of which $0.1
million was a current provision and $2.5 million was a deferred provision) for
the comparable 1996 period. Significantly impacting first quarter 1997 current
taxes is a $1.2 million non-cash provision representing current taxes incurred
in Cote d'Ivoire which, under the terms of the production sharing contract, will
be paid by the Ivorian government from their production proceeds. Consistent
with Statement of Financial Accounting Standards (SFAS) 109, Accounting for
Income Taxes, the deferred income tax provision or benefit was derived primarily
from changes in deferred income tax assets and
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<PAGE>
liabilities recorded on the balance sheet.
The Company reported net income of $6.2 million, or $0.17 per share, for the
first quarter of 1997 compared to a net income of $3.7 million, or $0.10 per
share, for the first quarter of 1996.
CAPITAL RESOURCES AND LIQUIDITY
The Company has historically funded its operations, acquisitions, exploration
and development expenditures from cash flows from operating activities, bank
borrowings, sales of common and preferred stock, issuance of senior subordinated
notes, sales of non-strategic oil and natural gas properties, sales of partial
interests in exploration concessions and project finance borrowings.
The primary sources of cash for the Company during the three months ended
March 31, 1997, included proceeds from funds generated from operations, proceeds
from asset sales and exercise of stock options. In the comparable period of
1996, the primary sources of cash included funds generated from operations,
proceeds from asset sales and bank borrowings. Primary cash uses for the
quarters ended March 31, 1997 and 1996 included capital expenditures (including
exploration expenses) which totaled $49.0 million and $29.4 million,
respectively. In addition, during the three months ended March 31, 1997, cash
uses include $2.2 million of debt issue costs as a result of the new Credit
Facility discussed below.
Discretionary cash flow, a measure of performance for exploration and
production companies, is derived by adjusting net income to eliminate the
effects of exploration expenses, including dry hole costs and impairments, DD&A,
deferred income tax, gain (loss) on sale of assets and non-cash amortization of
debt issue costs. The effects of working capital changes are not taken into
account. This measure reflects an amount that is available for capital
expenditures, debt repayment or dividend payments. The company generated
discretionary cash flow for the three months ended March 31, 1997 and 1996 of
approximately $43.8 million and $25.3 million, respectively. The 73% increase
in discretionary cash flow in the 1997 period as compared to the 1996 period is
primarily due to increased oil production in Cote d'Ivoire and Equatorial Guinea
and the overall improvements in oil and natural gas prices.
The company has used the Credit Facility to partially finance its
expenditures. During March 1997, the Company completed negotiations to expand
the Credit Facility to $300 million from $200 million with an initial borrowing
base of $275 million. As of March 31, 1997, the Company had no outstanding
loans thereunder and outstanding letters of credit of approximately $0.6
million. Resulting liquidity (including cash) at March 31, 1997 was
approximately $338 million. As of December 31, 1996, the borrowing base under
the Credit Facility was $200 million, and the Company had no outstanding loans
thereunder and outstanding letters of credit of approximately $0.6 million.
Resulting liquidity (including cash) exceeded $254 million.
As part of its on-going operations, the Company periodically sells interests
in proved reserves and enhanced exploration prospects. This practice continued
in the first quarters of 1997 and 1996, with net cash proceeds from sales of
assets of $3.3 million and $7.5 million, respectively. During the three months
ended March 31, 1997, the cash proceeds were generated through the sale of
various non-strategic North American properties. These proceeds were used to
redeploy capital to domestic and international opportunities which management
believes represent higher rates of return.
The Company's capital expenditure budget for 1997 is expected to be
approximately $250 million, consisting of approximately $84 million for
exploration, approximately $159 million for development and approximately $7
million of other capital expenditures. Primary areas of emphasis will be East
Texas, the Gulf of Mexico and Western Africa. Based upon the results of
exploration activities during 1997, the operating capital budget could be
expanded by approximately $50 million for follow-up appraisal or development
expenditures. Funding for capital expenditures is anticipated to come from
present cash on hand, discretionary cash flow and, if necessary, borrowings
under the credit facility. In addition, the Company will evaluate its level of
capital spending throughout the year based upon drilling results, commodity
prices, cash flows from operations and property acquisitions. Actual capital
spending may vary from the initial capital expenditure budget.
Due to the aforementioned expanded credit facility and the equity offering
completed in November 1996, the Company's financial structure has been
significantly strengthened. The Company's debt to total capitalization ratio
has decreased to 26.2% at March 31, 1997, from 26.7% at December 31, 1996.
Combined with cash flows from operating activities, the Company has the
financial strength, leverage and liquidity that will allow it to fund the 1997
capital
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<PAGE>
expenditure program, including the international exploration and development
opportunities in Cote d'Ivoire and Equatorial Guinea, and continue to
selectively pursue strategic corporate and property acquisitions.
The Company's interest coverage ratio (calculated as the ratio of income from
operations plus DD&A and exploration expense to interest plus capitalized
interest less non-cash amortization of debt issue costs) was 11.3 to 1 for the
first quarter of 1997, compared with 6.4 to 1 for the first quarter of 1996.
FOREIGN CURRENCY TRANSACTIONS
The Company conducts a portion of its business in Canadian dollars.
Therefore, a portion of the Company's business is subject to fluctuations in
currency exchange rates. In preparing the Company's financial statements, the
results of operations of the Canadian subsidiary are generally translated at the
average exchange rate for the year-to-date, and the subsidiary's assets and
liabilities are translated at the rate of exchange in effect on the balance
sheet date.
The majority of revenues and expenditures for the Company's West African
operations are settled and all books and records are maintained in the U.S.
dollar.
CHANGES IN PRICES AND INFLATION
The Company's revenues and the value of its oil and natural gas properties
have been, and will continue to be, effected by changes in oil and natural gas
prices. The Company's ability to maintain its current borrowing capacity and to
obtain additional capital on attractive terms is also substantially dependent on
oil and natural gas prices. Oil and natural gas prices are subject to
significant seasonal, market and other fluctuations that are beyond the
Company's ability to control or predict. Although certain Company costs and
expenses are effected by the level of inflation, inflation did not have a
significant effect on the Company's results of operations for the first three
months of 1997 or 1996.
FORWARD - LOOKING STATEMENTS
Certain statements in this report, including statements of the Company's and
management's expectations, intentions, plans and beliefs, including those
contained in or implied by "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Notes to Consolidated Financial
Statements, are forward-looking statements, as defined in Section 21E of the
Securities Exchange Act of 1934, that are dependent on certain events, risks and
uncertainties that may be outside the Company's control. These forward-looking
statements include statements of management's plans and objectives for the
Company's future operations and statements of future economic performance;
information regarding drilling schedules, expected or planned production or
transportation capacity, future production levels of international and domestic
fields, the Company's capital budget and future capital requirements, the
Company's meeting its future capital needs, the Company's realization of its
deferred tax asset, the level of future expenditures for environmental costs and
the outcome of regulatory and litigation matters; and the assumptions described
in this report underlying such forward-looking statements. Actual results and
developments could differ materially from those expressed in or implied by such
statements due to a number of factors, including, without limitation, those
described in the context of such forward-looking statements, fluctuations in the
price of crude oil and natural gas, the success rate of exploration efforts,
timeliness of development activities, and the risk factors described from time
to time in the Company's other documents and reports filed with the Securities
and Exchange Commission.
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<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is a named defendant in lawsuits and is a party in governmental
proceedings in the ordinary course of business. While the outcome of such
lawsuits or other proceedings against the Company cannot be predicted with
certainty, management does not expect these matters to have a material adverse
effect on the financial condition or results of operations of the Company.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits: See Index to Exhibits on page 17.
(b) Report on Form 8-K:
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITED MERIDIAN CORPORATION
May 9, 1997 /s/Jonathan M. Clarkson
------------------------
Jonathan M. Clarkson
Executive Vice President and
Chief Financial Officer
/s/Christopher E. Cragg
------------------------
Christopher E. Cragg
Vice President, Controller and
Chief Accounting Officer
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<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
- -------
3.1 Certificate of Incorporation of the Company, as amended,
incorporated by reference to Exhibit 3.1 to UMC's 1995 Form 10-K
filed with the Securities and Exchange Commission on March 7, 1996.
3.2 By-laws of the Company, as amended, incorporated by reference to
Exhibit 3.2 to UMC's 1995 Form 10-K filed with the Securities and
Exchange Commission on March 7, 1996.
4.1 Amendment No. 1 to Registration Rights Agreement dated as of August
9, 1994 among GARI, UMC, General Atlantic Corporation, John Hancock
Mutual Life Insurance Company and Fidelity Oil Holdings, Inc.,
incorporated by reference to Exhibit (c)(8) to UMC's Schedule 14D-1
(No. 5-44990) filed with the Securities and Exchange Commission on
August 11, 1994.
4.2 Specimen of certificate representing Series A Voting Common Stock,
$.01 par value, of the Company, incorporated herein by reference to
Exhibit 4.13 to the Company's Form 10-Q for the period ended
June 30, 1994 filed with the Securities and Exchange Commission on
August 10, 1994.
4.3 Stock Purchase Agreement of Series F Convertible Preferred Stock
(par value $0.01 per share) between UMC and John Hancock Mutual Life
Insurance Company, The Travelers Insurance Company, The Travelers
Life and Annuity Company, The Phoenix Insurance Company and the
Travelers Indemnity Company dated June 30, 1994, incorporated by
reference to Exhibit 4.16 to UMC's Form 10-Q for the quarterly
period ended June 30, 1995, filed with the Securities and Exchange
Commission on August 10, 1995.
4.4 Stock Purchase Agreement of Series F Convertible Preferred Stock
(par value $0.01 per share) between UMC and John Hancock Mutual Life
Insurance Company dated July 24, 1995, incorporated by reference to
Exhibit 4.17 to UMC's Form 10-Q for the quarterly period ended
June 30, 1995, filed with the Securities and Exchange Commission on
August 10, 1995.
4.5 First Amendment to Credit Agreement among UMC, The Chase Manhattan
Bank, N.A., Morgan Guaranty Trust Company of New York and Lenders
Signatory thereto dated as of June 30, 1995, incorporated by
reference to Exhibit 4.18 to UMC's Form 10-Q for the quarterly
period ended June 30, 1995, filed with the Securities and Exchange
Commission on August 10, 1995.
4.6 Loan Agreement between UMIC Cote d'Ivoire Corporation and
International Finance Corporation dated as of July 14, 1995,
incorporated by reference to Exhibit 4.19 to UMC's Form 10-Q for the
quarterly period ended June 30, 1995, filed with the Securities and
Exchange Commission on August 10, 1995.
4.7 Share Retention, Guarantee and Clawback Agreement among UMC, UMC
Petroleum Corporation, UMIC Cote d'Ivoire Corporation and
International Finance Corporation dated as of July 14, 1995,
incorporated by reference to Exhibit 4.20 to UMC's Form 10-Q for the
quarterly period ended June 30, 1995, filed with the Securities and
Exchange Commission on August 10, 1995.
4.8 Fourth Joint Amendment to Amended and Restated Credit Agreement and
to Amended and Restated Credit Agreement (Canada) effective as of
October 30, 1995, incorporated by reference to Exhibit 4.21 to UMC's
Form 10-Q for the quarterly period ended September 30, 1995, filed
with the Securities and Exchange Commission on November 13, 1995.
4.9 Indenture between the Company, Petroleum and Bank of Montreal Trust
Company, dated October 30, 1995, incorporated by reference to
Exhibit 4.20 to UMC's 1995 Form 10-K filed with the Securities
and Exchange Commission on March 7, 1996.
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<PAGE>
4.10 Rights Agreement by and between United Meridian Corporation and
Chemical Mellon Shareholder Services, L.L.C., as Rights Agent, dated
as of February 13, 1996, incorporated by reference as Exhibit 1 to
Form 8-K, filed with the Securities and Exchange Commission on
February 14, 1996.
4.11* Global Credit Agreement dated as of March 18, 1997, among United
Meridian Corporation, UMC Petroleum Corporation, The Chase Manhattan
Bank, N.A., as Administrative Agent, Morgan Guaranty Trust Company
of New York, as Syndication Agent, NationsBank of Texas, N.A. and
Societe Generale, as Documentation Agents, Banque Paribas, Wells
Fargo Bank, N.A., and Colorado National Bank, as Co-Agents and The
Lenders Now or Hereafter Signatory Hereto.
4.12* Credit Agreement dated as of March 18, 1997 among UMC Resources
Canada Ltd., as the Company, The Chase Manhattan Bank of Canada, as
Agent, and the Lenders Signatory Hereto.
4.13* Guaranty Agreement dated as of March 18, 1997, by UMC Petroleum
Corporation in favor of The Chase Manhattan Bank of Canada, as
Administrative Agent, and The Lenders Now or Hereafter Signatory to
the Credit Agreement.
4.14* Guaranty Agreement dated as of March 18, 1997, by United Meridian
Corporation in favor of The Chase Manhattan Bank, as Administrative
Agent, Morgan Guaranty Trust Company of New York, as Syndication
Agent, NationsBank of Texas, N.A. and Societe Generale, as
Documentation Agents, Banque Paribas, Wells Fargo Bank, N.A., and
Colorado National Bank as Co-Agents, and The Lenders Now or
Hereafter Signatory to the Credit Agreement.
4.15* Guaranty Agreement dated as of March 18, 1997 by United Meridian
Corporation in favor of The Chase Manhattan Bank of Canada, as
Administrative Agent, and The Lenders Now or Hereafter Signatory to
the Credit Agreement.
4.16* Guaranty Agreement dated as of March 18, 1997 by Norfolk Holdings,
Inc. as the Guarantor, in favor of The Chase Manhattan Bank, as
Administrative Agent, Morgan Guaranty Trust Company of New York as
Syndication Agent, NationsBank of Texas, N.A. and Societe Generale,
as Documentation Agents, Banque Paribas, Wells Fargo Bank, N.A., and
Colorado National Bank, as Co-Agents, and The Lenders Now or
Hereafter Signatory to the Credit Agreement.
4.17* Guaranty Agreement dated as of March 18, 1997 by UMIC Cote d'Ivoire
Corporation, as the Guarantor, in favor of The Chase Manhattan Bank,
as Administrative Agent, Morgan Guaranty Trust Company of New York,
as Syndication Agent, NationsBank of Texas, N.A., and Societe
Generale, as Documentation Agents, Banque Paribas, Wells Fargo Bank,
N.A., and Colorado National Bank, as Co-Agents, and The Lenders Now
or Hereafter Signatory to the Credit Agreement.
4.18* Guaranty Agreement dated as of March 18, 1997 by UMC Equatorial
Guinea Corporation, as the Guarantor, in favor of The Chase
Manhattan Bank, as Administrative Agent, Morgan Guaranty Trust
Company of New York, as Syndication Agent, NationsBank of Texas,
N.A. and Societe Generale, as Documentation Agents, Banque Paribas,
Wells Fargo Bank, N.A., and Colorado National Bank, as Co-Agents,
and The Lenders Now or Hereafter Signatory to the Credit Agreement.
4.19* Intercreditor Agreement dated as of March 18, 1997, among United
Meridian Corporation, UMC Petroleum Corporation, Norfolk Holdings
Inc., UMC Resources Canada Ltd., UMIC Cote d'Ivoire Corporation, UMC
Equatorial Guinea Corporation, The Chase Manhattan Bank, as
Administrative Agent and Collateral Agent, Morgan Guaranty Trust
Company of New York, as Syndication Agent, NationsBank of Texas,
N.A. and Societe Generale, as Documentation Agents, Banque Paribas,
Wells Fargo Bank, N.A., as Co-Agents, The Chase Manhattan Bank of
Canada, as Canadian Agent, and The Lenders Now or Hereafter
Signatory Hereto.
10.1 Employment Agreement dated as of August 9, 1994, among Donald D.
Wolf, UMC and Petroleum, incorporated by reference to Exhibit (c)(4)
to UMC's Schedule 14D-1 (No. 5-44990) filed with the Securities and
Exchange Commission on August 11, 1994.
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<PAGE>
10.2 The UMC Petroleum Savings Plan as amended and restated incorporated
herein by reference to Exhibit 4.10 to the Company's Form S-8 (No.
33-73574) filed with the Securities and Exchange Commission on
December 29, 1993.
10.3 First Amendment to the UMC Petroleum Savings Plan, as Amended and
Restated as of January 1, 1993, dated April 18, 1994, incorporated
by reference to Exhibit 10.3 to UMC's 1994 Form 10-K filed with the
Securities and Exchange Commission on March 10, 1995.
10.4 UMC 1987 Nonqualified Stock Option Plan, as amended, incorporated
herein by reference to Exhibit 10.3 to the Company's Form S-1 (No.
33-63532) filed with the Securities and Exchange Commission on
May 28, 1993.
10.5 Third Amendment to UMC 1987 Nonqualified Stock Option Plan dated
November 16, 1993 incorporated herein by reference to Exhibit 10.4
to the Company's 1993 Form 10-K filed with the Securities and
Exchange Commission on March 7, 1994.
10.6 Fourth Amendment to UMC 1987 Nonqualified Stock Option Plan dated
April 6, 1994, incorporated by reference to Exhibit 10.6 to UMC's
1994 Form 10-K filed with the Securities and Exchange Commission on
March 10, 1995.
10.7 UMC 1994 Employee Nonqualified Stock Option Plan incorporated by
reference to Exhibit 4.14 to the Company's Form S-8 (No. 33-79160)
filed with the Securities and Exchange Commission on May 19, 1994.
10.8 First Amendment to the UMC 1994 Employee Nonqualified Stock Option
Plan dated November 16, 1994, incorporated by reference to Exhibit
4.11.1 to the Company's Form S-8 (No. 33-86480) filed with the
Securities and Exchange Commission on November 18, 1994.
10.9 Second Amendment to the UMC 1994 Employee Nonqualified Stock Option
Plan dated May 22, 1996, incorporated by reference to Exhibit 4.3.2
to the Company's Form S-8 (No. 333-05401) filed with the Securities
and Exchange Commission on June 6, 1996.
10.10 Form of the Third Amendment to the UMC 1994 Employee Nonqualified
Stock Option Plan dated November 13, 1996, incorporated by reference
to Exhibit 10.10 to UMC's 1996 Form 10-K filed with the Securities
and Exchange Commission on March 7, 1997.
10.11 UMC 1994 Outside Directors' Nonqualified Stock Option Plan
incorporated herein by reference to Exhibit 4.15 to the Company's
Form S-8 (No. 33-79160) filed with the Securities and Exchange
Commission on May 19, 1994.
10.12 First Amendment to the UMC 1994 Outside Directors' Nonqualified
Stock Option Plan dated May 22, 1996, incorporated by reference to
Exhibit 4.4.1 to the Company's Form S-8 (No. 333-05401) filed with
the Securities and Exchange Commission on June 6, 1996.
10.13 Form of the Second Amendment to the UMC 1994 Outside Directors'
Nonqualified Stock Option Plan dated November 13, 1996, incorporated
by reference to Exhibit 10.13 to UMC's 1996 Form 10-K filed with the
Securities and Exchange Commission on March 7, 1997.
10.14 UMC Petroleum Corporation Supplemental Benefit Plan effective
January 1, 1994, approved by the Board of Directors on March 29,
1994, incorporated by reference to Exhibit 10.10 to UMC's 1994 Form
10-K filed with the Securities and Exchange Commission on
March 10, 1995.
10.15 Form of Indemnification Agreement, with Schedule of Signatories,
incorporated herein by reference to Exhibit 10.4 to the Company's
Form S-1 (No. 33-63532) filed with the Securities and Exchange
Commission on May 28, 1993.
10.16 Petroleum Production Sharing Contract on Block CI-11 dated June 27,
1992 among the Republic of
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<PAGE>
Cote d'Ivoire, UMIC Cote d'Ivoire Corporation and Societe Nationale
d'Operations Petrolieres de la Cote d'Ivoire (including English
translation), incorporated herein by reference to Exhibit 10.5 to
Amendment No. 3 to the Company's Form S-1 (No. 33-63532) filed with
the Securities and Exchange Commission on July 20, 1993.
10.17 Production Sharing Contract dated August 18, 1992 between the
Republic of Equatorial Guinea and United Meridian International
Corporation (Area A -Offshore NE Bioco), incorporated herein by
reference to Exhibit 10.6 to Amendment No. 1 to the Company's
Form S-1 (No. 33-63532) filed with the Securities and Exchange
Commission on June 18, 1993.
10.18 Production Sharing Contract dated June 29, 1992 between the Republic
of Equatorial Guinea and United Meridian International Corporation
(Area B -Offshore NW Bioco), incorporated herein by reference to
Exhibit 10.7 to Amendment No. 1 to the Company's Form S-1
(No. 33-63532) filed with the Securities and Exchange Commission on
June 18, 1993.
10.19 Production Sharing Contract dated June 29, 1994 between the Republic
of Equatorial Guinea and United Meridian International Corporation
(Area C -Offshore Bioco) incorporated by reference to Exhibit 10.15
to UMC's 1994 Form 10-K filed with the Securities and Exchange
Commission on March 10, 1995.
10.20 Production Sharing Contract on Block CI-01 dated December 5, 1994
among The Republic of Cote d'Ivoire, UMIC Cote d'Ivoire Corporation
and Societe Nationale d'Operations Petrolieres de la Cote d'Ivoire
(English translation) incorporated by reference to Exhibit 10.16 to
UMC's 1994 Form 10-K filed with the Securities and Exchange
Commission on March 10, 1995.
10.21 Production Sharing Contract on Block CI-02 dated December 5, 1994
among The Republic of Cote d'Ivoire UMIC Cote d'Ivoire Corporation
and Societe Nationale d'Operations Petrolieres de la Cote d'Ivoire
(English translation) incorporated by reference to Exhibit 10.17 to
UMC's 1994 Form 10-K filed with the Securities and Exchange
Commission on March 10, 1995.
10.22 Production Sharing of Block CI-12 dated April 27, 1995 among The
Republic of Cote d'Ivoire, UMIC Cote d'Ivoire Corporation and others
(English translation), incorporated by reference to Exhibit 10.18 to
UMC's 1995 Form 10-K filed with the Securities and Exchange
Commission on March 7, 1996.
10.23 Contract for Sale and Purchase of Natural Gas for Block CI-11 among
Caisse Autonome D'Amortissement, UMIC Cote d'Ivoire Corporation and
others dated September 30, 1994 (French and English translation)
incorporated by reference to Exhibit 10.7 to the Company's Form 10-Q
for the period ended September 30, 1994 filed with the Securities
and Exchange Commission on November 14, 1994.
10.24 Production Sharing Contract dated April 5, 1995 between The Republic
of Equatorial Guinea and UMIC Equatorial Guinea Corporation
(Area D - Offshore Bioco) incorporated by reference to Exhibit 10.20
to the Company's Form 10-Q for the period ended June 30, 1995 filed
with the Securities and Exchange Commission on August 10, 1995.
10.25 Contract for Purchase and Sale of Lion Crude Oil between UMIC Cote
d'Ivoire Corporation, International Finance Corporation, G.N.R.
(Cote d'Ivoire) Ltd. and Pluspetrol S.A. and Total International
Limited, dated December 1, 1995, incorporated by reference to
Exhibit 10.22 to UMC's 1995 Form 10-K filed with the Securities and
Exchange Commission on March 7, 1995.
10.26 Amendment to United Meridian Corporation 1994 Non-Qualified Stock
Option Agreement for Former Employees of General Atlantic Resources,
Inc. dated as of April 16, 1996 among UMC and Donald D. Wolf,
incorporated by reference to Exhibit 10.22 to the Company's Form 10-
Q for the period ended June 30, 1996 filed with the Securities and
Exchange Commission on August 8, 1996.
10.27 Amendment to Employment Agreement dated as of April 16, 1996 among
Petroleum and Donald
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<PAGE>
D. Wolf incorporated by reference to Exhibit 10.23 to the Company's
Form 10-Q for the period ended June 30, 1996 filed with the
Securities and Exchange Commission on August 8, 1996.
10.28 Employment Agreement, dated October 9, 1996, between UMC, UMC
Petroleum Corporation and James L. Dunlap, incorporated by reference
to Exhibit 10.1 to UMC's Form S-3, Amendment No. 2 (No. 333-12823),
filed with the Securities and Exchange Commission on
October 30, 1996.
10.29 Form of Indemnification Agreement with a schedule of director
signatories, incorporated by reference to Exhibit 10.2 to UMC's Form
S-3, Amendment No. 2 (No. 333-12823) filed with the Securities and
Exchange Commission on October 30, 1996.
11.1* Calculation of Net Income per Common Share.
27.1* Financial Data Schedule.
________________
* Filed herewith.
(B) REPORTS ON FORM 8-K
None.
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<PAGE>
EXHIBIT 4.11
GLOBAL CREDIT AGREEMENT
Dated as of March 18, 1997
among
United Meridian Corporation,
UMC Petroleum Corporation,
The Chase Manhattan Bank,
as Administrative Agent,
Morgan Guaranty Trust Company of New York,
as Syndication Agent,
NationsBank of Texas, N.A.
and
Societe Generale,
as Documentation Agents,
Banque Paribas,
Wells Fargo Bank, N.A.,
and
Colorado National Bank,
as Co-Agents,
and
The Lenders Now or Hereafter Signatory Hereto
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
Article I
Definitions and Accounting Matters
Section 1.01 Terms Defined Above............................... -1-
Section 1.02 Certain Defined Terms............................. -2-
Section 1.03 Accounting Terms and Determinations............... -20-
Article II
Commitments
Section 2.01 Loans and Letters of Credit....................... -21-
Section 2.02 Borrowings, Continuations and Conversions;
Issuance of Letters of Credit.................... -23-
Section 2.03 Changes of Commitments............................ -26-
Section 2.04 Facility Fee and Other Fees....................... -28-
Section 2.05 Lending Offices................................... -29-
Section 2.06 Several Obligations............................... -29-
Section 2.07 Notes............................................. -29-
Section 2.08 Prepayments....................................... -30-
Section 2.09 Borrowing Base.................................... -31-
Article III
Payments of Principal and Interest
Section 3.01 Repayment of Loans................................ -35-
Section 3.02 Interest.......................................... -35-
Article IV
Payments; Pro Rata Treatment; Computations; Etc.
Section 4.01 Payments.......................................... -36-
Section 4.02 Pro Rata Treatment................................ -37-
Section 4.03 Computations...................................... -37-
Section 4.04 Non-receipt of Funds by the
Administrative Agent............................. -37-
Section 4.05 Sharing of Payments, Etc.......................... -38-
Section 4.06 Assumption of Risks............................... -39-
Section 4.07 Obligation to Reimburse and to Prepay............. -39-
Section 4.08 Obligations for Letters of Credit................. -41-
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<PAGE>
Article V
Yield Protection and Illegality
Section 5.01 Additional Costs.................................. -41-
Section 5.02 Limitation on Eurodollar Loans.................... -43-
Section 5.03 Illegality........................................ -43-
Section 5.04 Base Rate Loans pursuant to
Sections 5.01, 5.02 and 5.03..................... -43-
Section 5.05 Compensation...................................... -43-
Section 5.06 Additional Cost in Respect of Tax................. -44-
Section 5.07 Avoidance of Taxes and Additional Costs........... -45-
Section 5.08 Lender Tax Representation......................... -46-
Section 5.09 Limitation on Right to Compensation............... -46-
Article VI
Conditions Precedent
Section 6.01 Initial Loan...................................... -46-
Section 6.02 Subsequent Loans and Letters of Credit............ -48-
Section 6.03 Conditions Relating to Letters of Credit.......... -49-
Article VII
Representations and Warranties
Section 7.01 Corporate Existence............................... -49-
Section 7.02 Financial Condition............................... -50-
Section 7.03 Litigation........................................ -50-
Section 7.04 No Breach......................................... -50-
Section 7.05 Corporate Action.................................. -51-
Section 7.06 Approvals......................................... -51-
Section 7.07 Use of Loans...................................... -51-
Section 7.08 ERISA............................................. -51-
Section 7.09 Taxes............................................. -51-
Section 7.10 Insurance......................................... -52-
Section 7.11 Titles, etc....................................... -52-
Section 7.12 No Material Misstatements......................... -52-
Section 7.13 Investment Company Act............................ -52-
Section 7.14 Public Utility Holding Company Act................ -52-
Section 7.15 Subsidiaries and Partnerships..................... -53-
Section 7.16 Location of Business and Offices.................. -53-
Section 7.17 Rate Filings...................................... -53-
Section 7.18 Environmental Matters............................. -53-
Section 7.19 Defaults.......................................... -54-
Section 7.20 Compliance with the Law........................... -54-
Section 7.21 Designated Contracts.............................. -54-
-ii-
<PAGE>
Article VIII
Affirmative Covenants
Section 8.01 Financial Statements.............................. -55-
Section 8.02 Litigation........................................ -58-
Section 8.03 Corporate Existence, Etc.......................... -58-
Section 8.04 Environmental Matters............................. -59-
Section 8.05 Engineering Reports............................... -59-
Section 8.06 Material Subsidiaries............................. -60-
Section 8.07 Stock of Subsidiaries............................. -61-
Section 8.08 Further Assurances................................ -61-
Section 8.09 Additional Security Instruments................... -61-
Section 8.10 International Component........................... -61-
Section 8.11 Designated Contracts.............................. -62-
Section 8.12 North American Expenditures....................... -62-
Article IX
Negative Covenants
Section 9.01 Debt.............................................. -62-
Section 9.02 Liens............................................. -64-
Section 9.03 Investments, Loans and Advances................... -65-
Section 9.04 Dividends, Distributions,
Redemptions and Tax Payments..................... -67-
Section 9.05 Leverage Ratio.................................... -67-
Section 9.06 Nature of Business................................ -67-
Section 9.07 Limitation on Operating Leases.................... -67-
Section 9.08 Mergers, Etc...................................... -68-
Section 9.09 Proceeds of Notes................................. -68-
Section 9.10 ERISA Compliance.................................. -68-
Section 9.11 Sale or Discount of Receivables................... -68-
Section 9.12 Tangible Net Worth of United Meridian............. -68-
Section 9.13 Transactions with Affiliates...................... -69-
Section 9.14 Negative Pledge Agreements........................ -69-
Section 9.15 Subsidiaries and Partnerships..................... -69-
Section 9.16 Sale of Oil and Gas Properties.................... -69-
Section 9.17 Environmental Matters............................. -70-
Section 9.18 Payment Restrictions.............................. -70-
Section 9.19 Interest Coverage Ratio........................... -70-
Section 9.20 Subordinated Debt................................. -70-
Section 9.21 Designated Contracts.............................. -71-
Section 9.22 Maintenance of Deposits........................... -71-
-iii-
<PAGE>
Article X
Events of Default
Section 10.01 Events of Default................................ -71-
Section 10.02 Cash Collateral for Letters of Credit............ -74-
Article XI
The Agents
Section 11.01 Appointment, Powers and Immunities............... -74-
Section 11.02 Reliance by Agents............................... -75-
Section 11.03 Defaults......................................... -75-
Section 11.04 Rights as a Lender............................... -75-
Section 11.05 Indemnification.................................. -76-
Section 11.06 Non-Reliance on Agents and other Lenders......... -76-
Section 11.07 Action by Administrative Agent................... -76-
Section 11.08 Resignation or Removal of Agents................. -77-
Article XII
Miscellaneous
Section 12.01 Waiver........................................... -77-
Section 12.02 Notices.......................................... -77-
Section 12.03 Payment of Expenses, Indemnities, etc............ -77-
Section 12.04 Amendments, Etc.................................. -79-
Section 12.05 Successors and Assigns........................... -79-
Section 12.06 Assignments and Participations................... -80-
Section 12.07 Invalidity....................................... -81-
Section 12.08 Entire Agreement................................. -81-
Section 12.09 References....................................... -81-
Section 12.10 Survival......................................... -82-
Section 12.11 Captions......................................... -82-
Section 12.12 Counterparts..................................... -82-
Section 12.13 GOVERNING LAW.................................... -82-
Section 12.14 Confidentiality.................................. -83-
Section 12.15 Interest......................................... -83-
Section 12.16 Effectiveness.................................... -84-
Section 12.17 Interpretation of Security Instruments........... -85-
Section 12.18 Survival of Obligations.......................... -85-
Section 12.19 Debt Characterization for Indenture Purposes..... -85-
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<PAGE>
ANNEX, EXHIBITS AND SCHEDULES
Annex I - List of U.S. Commitments and Canadian Subcommitments;
Global Commitment Percentages
Exhibit A-1 - Form of Conventional Loan Note
Exhibit A-2 - Form of Bid Rate Loan Note
Exhibit B - Form of Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
Exhibit C-1 - Form of Borrowing Request
Exhibit C-2 - Form of Competitive Bid Request
Exhibit C-3 - Form of Bid Loan Quote/Response to Competitive Bid Request
Exhibit D - Subsidiaries and Guarantors
Exhibit E - Partnerships
Exhibit F - Security Instruments
Exhibit G - Form of Assignment and Acceptance
Schedule 7.03 - Litigation
Schedule 7.08 - ERISA Obligations and ERISA Affiliates
Schedule 7.18 - Environmental Matters
Schedule 9.01 - Debt not reflected in Financial Statements
Schedule 9.02 - Liens
Schedule 9.03 - Investments, loans or advances not reflected in
Financial Statements
Schedule 9.10 - Accumulated Funding Deficiencies
Schedule 9.16 - Sale Properties
-v-
<PAGE>
This Global Credit Agreement dated as of March 18, 1997 is among:
United Meridian Corporation, a corporation duly organized and validly existing
under the laws of the state of Delaware ("United Meridian"); UMC Petroleum
Corporation, a corporation duly organized and validly existing under the laws of
the state of Delaware (the "Company"); each of the financial institutions that
is now or hereafter a signatory hereto (individually, a "Lender" and,
collectively, the "Lenders"); The Chase Manhattan Bank, as administrative agent
for the Lenders (in such capacity, the "Administrative Agent"), Morgan Guaranty
Trust Company of New York, as syndication agent for the Lenders (in such
capacity, the "Syndication Agent"), NationsBank of Texas, N.A. and Societe
Generale, as documentation agents for the Lenders (in such capacity, the
"Documentation Agents"), and Banque Paribas, Wells Fargo Bank, N.A., and
Colorado National Bank, as co-agents for the Lenders (in such capacity, the
"Co-Agents").
Recitals
A. United Meridian and Norfolk Holdings Inc., a corporation duly
organized and validly existing under the laws of the State of Delaware
("Norfolk"), as guarantors, the Company, as borrower, the Administrative Agent,
as agent, Morgan Guaranty Trust Company of New York, as co-agent, and the
financial institutions signatory thereto entered into that certain Amended and
Restated Credit Agreement dated as of July 18, 1994, as amended by that certain
First Joint Amendment to Amended and Restated Credit Agreement and To Amended
and Restated Credit Agreement (Canada) dated as of September 2, 1994, as further
amended by that certain Second Joint Amendment To Amended and Restated Credit
Agreement and To Amended and Restated Credit Agreement (Canada) dated as of
November 15, 1994, as further amended by that certain Third Joint Amendment To
Amended and Restated Credit Agreement and To Amended and Restated Credit
Agreement (Canada) dated as of December 31, 1994, as further amended by that
certain Fourth Joint Amendment To Amended and Restated Credit Agreement and To
Amended and Restated Credit Agreement (Canada) dated as of October 30, 1995, and
as further amended by that certain Fifth Joint Amendment To Amended and Restated
Credit Agreement and To Amended and Restated Credit Agreement (Canada) dated as
of November 1, 1996 (such credit agreement, as amended, the "Prior Credit
Agreement").
B. United Meridian and the Company have requested that the Agents and the
Lenders amend and restate the Prior Credit Agreement and make credit available
to and on behalf of the Company on the terms and conditions stated herein.
C. The Agents and the Lenders, subject to the terms and conditions stated
herein, are willing to amend and restate the Prior Credit Agreement and to make
such credit facilities available.
D. NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 TERMS DEFINED ABOVE. As used in this Agreement, the terms
"Administrative Agent", "Co-Agents", "Company", "Documentation Agents",
"Lender", "Lenders", "Norfolk", "Syndication Agent" and "United Meridian" shall
have the meanings indicated above.
-1-
<PAGE>
SECTION 1.02 CERTAIN DEFINED TERMS. As used herein, including the
recitals, the following terms shall have the following meanings:
"Abandon" shall mean, with respect to any Oil and Gas Property of a Person:
(a) the suspension for more than 90 days (or 120 days in the case of a
suspension related to a force majeure so long as such Person is diligently and
continuously proceeding to mitigate the consequences thereof) of the continuous
or regular operations on such Oil and Gas Property in the ordinary course of
such Person's business; (b) the abandonment or indefinite deferral of the
continuous or regular operations of such Oil and Gas Property in the ordinary
course of such Person's business; or (c) any public announcement by such Person
of its intention to do the same.
"Absolute Rate" shall mean, with respect to any Bid Rate Loan, such rate of
interest as a Lender may offer the Company for any given Interest Period
therefor, which rate shall be fixed for the duration of such Interest Period.
"Absolute Rate Loans" shall mean Bid Rate Loans which bear interest at the
Absolute Rate.
"Additional Costs" shall have the meaning assigned to that term in
Section 5.01(a).
"Affected Loans" shall have the meaning assigned to that term in
Section 5.04.
"Affiliate" of any Person shall mean (a) any Person directly or indirectly
controlled by, controlling or under common control with such first Person and
(b) any director or executive officer of such first Person.
"Affiliated Canadian Lender" shall mean, with regard to any Lender, the
Canadian Lender designated as such on Annex I, if any.
"Agent" shall mean any one or more of the Administrative Agent, the
Collateral Agent, the Syndication Agent, the Documentation Agents and/or the Co-
Agents, or if the context so indicates, all of the foregoing collectively.
References to any Agent shall include its successors.
"Aggregate Commitments" at any time shall equal the sum of the Commitments
of all of the Lenders.
"Agreement" shall mean this Credit Agreement, as amended, supplemented or
modified from time to time.
"Allocated Canadian Borrowing Base" shall mean, as of any date, an amount
in Dollars designated as such by the Company pursuant to Section 2.09(a)(iii).
A Canadian Lender's Share of the Allocated Canadian Borrowing Base shall equal
such Canadian Lender's Canadian Commitment Percentage of the Allocated Canadian
Borrowing Base.
-2-
<PAGE>
"Allocated U.S. Borrowing Base" shall mean an amount equal to the Borrowing
Base then in effect minus the Allocated Canadian Borrowing Base. A Lender's
Share of the Allocated U.S. Borrowing Base shall equal such Lender's Commitment
Percentage of the Allocated U.S. Borrowing Base.
"Applicable Lending Office" shall mean, for each Lender and for each Type
of Loan, the lending office of such Lender (or an Affiliate of such Lender)
designated for such Type of Loan on the signature pages hereof or such other
office of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Administrative Agent and the Company as the
office at which its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean, with respect to Conventional Loans, the
following rate per annum as is applicable:
================================================================================
Borrowing Base Utilization Applicable Margin for Applicable Margin for
Percentage Eurodollar Loans Base Rate Loans
- --------------------------------------------------------------------------------
Less than 40% 0.250% (0.250%)
- --------------------------------------------------------------------------------
Greater than or equal to 40%, 0.375% (0.125%)
but less than 55%
- --------------------------------------------------------------------------------
Greater than or equal to 55%, 0.500% 0.000%
but less than 65%
- --------------------------------------------------------------------------------
Greater than or equal to 65%, 1.125% 0.250%
but less than 85%
- --------------------------------------------------------------------------------
Greater than or equal to 85% 1.500% 0.750%.
================================================================================
"Assignment and Acceptance" shall have the meaning assigned such term in
Section 12.06(b).
"Available Canadian Subcommitment" shall mean, as of any date of
determination, the lesser of (a) the Canadian dollar amount of the Allocated
Canadian Borrowing Base (converted from U.S. Dollars to Canadian dollars by
multiplying the exchange ratio of Canadian dollars to U.S. Dollars in effect on
such date of determination, as determined in good faith by the Administrative
Agent on such date pursuant to the following sentence, and the Allocated
Canadian Borrowing Base); or (b) the aggregate Canadian Subcommitments as then
in effect. The exchange ratio shall be calculated (i) on the date a
reallocation pursuant to Section 2.09(a) between the Available Canadian
Subcommitment and Available U.S. Commitment occurs, (ii) on each Redetermination
Date, or (iii) in any event, at ninety (90) day intervals following the most
recent Redetermination Date.
-3-
<PAGE>
"Available U.S. Commitment" shall mean the obligation of the Lenders to
make Loans to the Company and to participate in Letters of Credit issued by the
Administrative Agent for the account of the Company and its Subsidiaries in an
aggregate amount not to exceed the lesser of either (a) the Aggregate
Commitments, as then in effect, or (b) the then applicable Allocated U.S.
Borrowing Base.
"Bankers Acceptances" shall mean any banker's acceptance issued to any of
the Canadian Lenders pursuant to the Canadian Credit Agreement.
"Base Rate" shall mean, with respect to any Base Rate Loan, for any day,
the higher of (a) the Federal Funds Rate for any such day plus 1/2 of 1% or (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.
"Base Rate Loans" shall mean Loans which bear interest at rates based upon
the Base Rate.
"Bid Loan Quote" shall mean an offer by any Lender to make Bid Rate Loans
pursuant to Section 2.01(c), such offer being substantially in the form of
Exhibit C-3.
"Bid Rate" shall mean, with respect to any Bid Rate Loan, the rate per
annum offered by any Lender in its sole discretion to the Company pursuant to
Section 2.01(c) for any Bid Rate Loan, which rate shall be either (a) determined
on the basis of the rates referred to in the definition of "Eurodollar Rate" in
this Section 1.02 or (b) an Absolute Rate.
"Bid Rate Loan" shall mean any loan made pursuant to Section 2.01(c) under
the procedures set forth in Section 2.02(g).
"Bid Rate Note" shall mean a promissory note, described in Section 2.07(b)
and being substantially in the form of Exhibit A-2, issued by the Company to the
order of a Lender evidencing Bid Rate Loans made to the Company by such Lender.
"Borrowing Base" shall mean at any time an amount equal to the amount
determined in accordance with Section 2.09.
"Borrowing Base Deficiency" shall have the meaning assigned to that term in
Section 2.08(c).
"Borrowing Base Utilization Percentage" shall mean, as of any day, the
fraction, expressed as a percentage, the numerator of which is the balance of
all Loans, the LC Exposure and the Canadian Indebtedness and the denominator of
which is the Borrowing Base in effect on such day.
"Business Day" shall mean any day on which commercial banks are not
authorized or required to close in New York City; and where such term is used in
the definition of "Quarterly Date" in this Section 1.02 or if such day relates
to a borrowing of, a payment or prepayment of principal of or interest on, a
continuation of, or a conversion of or into, or the Interest Period for, a
Eurodollar Loan or a notice by the Company with respect to any such borrowing,
payment, prepayment, continuation, conversion
-4-
<PAGE>
or Interest Period, any day which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"Canadian Agent" shall mean The Chase Manhattan Bank of Canada, as agent
for the Canadian Lenders, together with its successors in such capacity.
"Canadian Commitment Percentage" shall mean a Canadian Lender's share,
expressed as a percentage, of the Canadian Subcommitments as set forth under the
caption "Canadian Subcommitment Percentage" in Annex I, as modified from time to
time to reflect any assignments permitted by Section 12.06(b) of the Canadian
Credit Agreement or changes pursuant to Section 2.09(a) of the Canadian Credit
Agreement.
"Canadian Subcommitments" shall mean the "Commitments" of the Canadian
Lenders (in Canadian dollars) under the Canadian Credit Agreement.
"Canadian Credit Agreement" shall mean that certain Credit Agreement dated
of even date herewith among UMC Canada, the Canadian Agent and the Canadian
Lenders, as the same may be amended, restated, supplemented or modified from
time to time.
"Canadian Indebtedness" shall mean the loans (in Canadian dollars) made and
Bankers Acceptances issued and accepted to or for UMC Canada (in Canadian
dollars) pursuant to the Canadian Credit Agreement.
"Canadian Lenders" shall mean the lenders now or hereafter parties to the
Canadian Credit Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral Agent" shall mean The Chase Manhattan Bank, in its capacity as
the collateral agent, under the Intercreditor Agreement.
"Commitment" shall mean, as to each Lender, the obligation of such Lender
to make Conventional Loans to the Company and to participate in the Letters of
Credit issued by the Administrative Agent for the account of the Company or any
of its Subsidiaries, in an aggregate amount at any one time outstanding equal to
the amount set forth opposite such Lender's name on Annex I under the caption
"U.S. Commitment", as the same may be reduced pursuant to Section 2.03 or may be
modified pursuant to Assignment and Acceptances pursuant to Section 12.06(b).
"Commitment Percentage" shall mean, as of any date of determination, as to
any Lender, the percentage of the Commitments to be provided by a Lender under
this Agreement as indicated on Annex I under the caption "U.S. Commitment
Percentage", as modified from time to time to reflect any assignments permitted
by Section 12.06(b) or changes pursuant to Section 2.09(a).
"Commitment Reduction Date" shall mean the last day of March and September
of each year, commencing September 30, 1999, unless such date is extended or
waived pursuant to Section 2.03(b).
-5-
<PAGE>
"Competitive Bid Request" shall have the meaning assigned such term in
Section 2.02(g)(i).
"Consolidated Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person (whether now existing or hereafter acquired) whose
financial statements should be (or should have been) consolidated with the
financial statements of such Person in accordance with generally accepted
accounting principles.
"Consolidated Tangible Net Worth" shall mean, with respect to United
Meridian and its Subsidiaries, the sum of preferred stock (if any), par value
of common stock, capital in excess of par value of common stock and retained
earnings, less treasury stock (if any), less goodwill, less cost in excess of
fair value of net assets acquired and less all other assets that are properly
classified as intangible assets, but plus the amount of noncash write downs of
long-lived assets in compliance with generally accepted accounting principles or
SEC guidelines, and plus or minus, as appropriate, foreign currency translation
adjustments, all as determined on a consolidated basis. Notwithstanding the
foregoing, "Consolidated Tangible Net Worth" shall not be reduced to reflect
repurchases of equity securities permitted by the terms of Section 9.04(a).
"Conventional Loan Note" shall mean a promissory note, described in Section
2.07(a) and being substantially in the form of Exhibit A-1, issued by the
Company to the order of any Lender evidencing the Conventional Loans made to the
Company by such Lender.
"Conventional Loans" shall mean the loans made pursuant to Section 2.01(a).
"Debt" shall mean, for any Person the sum of the following (without
duplication): (a) all obliga tions of such Person for borrowed money or
evidenced by bonds, debentures, notes or other similar instruments; (b) all
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, bankers' acceptances, surety or other bonds and similar
instruments; (c) all obligations of such Person to pay the deferred purchase
price of Property or services, except trade accounts payable (other than for
borrowed money) arising in the ordinary course of business of such Person; (d)
all obligations under leases which shall have been, or should have been, in
accordance with generally accepted accounting principles in effect on the date
of this Agreement, recorded as capital leases in respect of which such Person is
liable, contingently or otherwise, as obligor, guarantor or otherwise; (e) all
Debt of others secured by a Lien on any asset of such Person, whether or not
such Debt is assumed by such Person, provided that if such Debt is Non-recourse
except with respect to the asset subject of the Lien, then only that portion of
such Debt equal to the lesser of the amount of such Debt and the fair market
value of such asset; (f) all Debt of others guaranteed by such Person or upon
which such Person is otherwise liable as a partner or otherwise to the extent of
the lesser of the amount of such Debt or the maximum stated amount of such
guarantee or other liability; (g) the undischarged balance of any production
payment created by such Person or for the creation of which such Person directly
or indirectly received payment; and (h) obligations to deliver goods or services
including Hydrocarbons in consideration of advance payments other (1) than
obligations to sell or purchase Hydrocarbons, (2) obligations with pipelines for
firm transportation of natural gas of such Person, and (3) oil and gas balancing
agreements, take or pay agreements or other prepayment obligations in respect of
Hydrocarbons, in each case, incurred in the ordinary course of business and
which are customary in the oil and gas industry.
-6-
<PAGE>
"Default" shall mean an event which with notice or lapse of time or both
would become an Event of Default.
"Designated Contract" shall mean any of: (i) the UMC-CI-11 PSC, (ii) the
UMC-EG-B PSC, and (iii) any production sharing contract or other petroleum
concession, license or similar agreement entered into by the Company or any of
its Subsidiaries with a foreign nation or any other Person exercising rights on
behalf of a sovereign if the Company desires to include the Oil and Gas
Properties covered by such contract in the Borrowing Base and such Oil and Gas
Properties constitute 5% or more of the then current amount of the Borrowing
Base, in each case together with any and all replacements, extension or renewals
thereof and any and all amendments, modifications or supplements permitted by
the terms of Section 9.21. At the election of the Company, any Designated
Contract may be redesignated to no longer constitute a Designated Contract,
except that no such redesignation may be made if such redesignation would result
in a Borrowing Base Deficiency under Section 2.08(c). After such election, the
value of the Properties subject to such contract shall not be included in
subsequent redeterminations of the Borrowing Base unless the Company has elected
to include such Property in such redetermination of the Borrowing Base. In the
event of any such election to exclude a contract, if the sum of, without
duplication, (A) the value of the Oil and Gas Properties subject to such
contract, (B) the value of all other Oil and Gas Properties subject to contracts
that ceased to be Designated Contracts during the same Redetermination Period,
(C) the value of all Oil and Gas Properties of Subsidiaries that ceased to be
Material Subsidiaries during the same Redetermination Period, and (D) the amount
of all sales of Properties (excluding (1) Hydrocarbons sold in the ordinary
course of business as and when produced or after production thereof, (2) Oil and
Gas Properties described in clauses (A), (B) and (C) above and (3) Properties
listed on Schedule 9.16) made during such Redetermination Period, constitutes
less than 5% of the then current value of the Borrowing Base, then no adjustment
to the Borrowing Base shall occur as a result of such election. If such sum is
greater than or equal to 5% of the then current value of the Borrowing Base,
then the Borrowing Base shall be reduced by an amount agreed to at the time by
the Required Lenders.
"Dollars" and "$" shall mean lawful money of the United States of America.
"EBITDA" shall mean, with respect to United Meridian and its Consolidated
Subsidiaries, net earnings (excluding gains and losses resulting from the sale
or retirement of assets, non-cash write downs and charges resulting from
accounting convention changes) before deduction for taxes, interest expenses,
exploration expenses, depreciation, and depletion and amortization expenses, all
determined in accordance with generally accepted accounting principles.
"Effective Date" shall have the meaning assigned such term in
Section 12.16.
"Engineering Reports" shall have the meaning assigned to that term in
Section 2.09(c).
"Environmental Laws" shall mean any and all laws, statutes, ordinances,
rules, regulations, orders, or determinations of any Governmental Authority
pertaining to health or the environment in effect in any and all jurisdictions
in which United Meridian or any of its Subsidiaries are conducting or at any
time have conducted business, or where any Property of United Meridian or any of
its Subsidiaries is located, or where any hazardous substances generated by or
disposed of by United Meridian or any
-7-
<PAGE>
of its Subsidiaries are located, including without limitation, the Oil Pollution
Act of 1990 ("OPA"), the Clean Air Act, as amended, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), as
amended, the Federal Water Pollution Control Act, as amended, the Occupational
Safety and Health Act of 1970, as amended, the Resource Conservation and
Recovery Act of 1976 ("RCRA"), as amended, the Safe Drinking Water Act, as
amended, the Toxic Substances Control Act, as amended, the Superfund Amendments
and Reauthorization Act of 1986, as amended. For purposes of this definition,
the term "oil" shall have the meaning specified in OPA; the terms "hazardous
substance," "release" and "threatened release" have the meanings specified in
CERCLA, and the terms "solid waste" and "disposal" (or "disposed") have the
meanings specified in RCRA; provided that, in the event either OPA, CERCLA or
RCRA is amended so as to broaden the meaning of any term defined thereby, such
broader meaning shall apply subsequent to the effective date of such amendment
with respect to all provisions of this Agreement other than Article VII hereof,
and provided further that, to the extent the laws of the state in which any
Property of the Company or its Subsidiaries is located establish a meaning for
"oil," "hazardous substance," "release," "solid waste" or "disposal" which is
broader than that specified in either OPA, CERCLA or RCRA, such broader meaning
shall apply.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business which is
a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as United Meridian or is under common control
(within the meaning of Section 414(c) of the Code) with United Meridian.
"Eurodollar Loans" shall mean Loans the interest rates on which are
determined on the basis of rates referred to in the definition of "Eurodollar
Rate" in this Section 1.02.
"Eurodollar Rate" shall mean, with respect to a Eurodollar Loan, the rate
per annum (rounded upwards, if necessary to the nearest 1/100 of 1%) quoted by
the Administrative Agent at approximately 11:00 a.m. London time (or as soon
thereafter as practicable) two (2) Business Days prior to the first day of the
Interest Period for such Loan for the offering by the Administrative Agent 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 Lenders for such Interest
Period.
"Event of Default" shall have the meaning assigned to that term in
Section 10.01.
"Event of Loss" shall mean any of the following events in respect of any
Oil and Gas Property: (a) the total loss of such Oil and Gas Property or the
total loss of use thereof due to destruction, damage beyond repair or rendition
thereof permanently unfit for normal use for any reason whatsoever; or (b) any
damage to such Oil and Gas Property which results in an insurance settlement on
the basis of a total loss.
-8-
<PAGE>
"Excepted Liens" shall mean: (i) Liens for taxes, assessments or other
governmental charges or levies not yet delinquent or which are being contested
in good faith by appropriate action; (ii) Liens in connection with workmen's
compensation, unemployment insurance or other social security, old age pension
or public liability obligations not yet due or which are being contested in good
faith by appropriate action; (iii) (A) vendors', carriers', operators',
warehousemen's, repairmen's, mechanics', workmen's, materialmen's, construction,
maritime, landlords' and other like Liens arising by operation of law and (B)
Liens arising by agreement (provided that no such Liens secure any obligations
constituting Debt for borrowed money or contingent obligations relating to
borrowed money), in each case, in the ordinary course of business or incident to
the exploration, development, operation and maintenance of Oil and Gas
Properties (including without limitation, Liens created in the ordinary course
of business under oil and gas leases, farm-out agreements, divisions orders,
partnership agreements, production sharing contracts or other petroleum
concessions, licenses or similar agreements, royalty agreements, contracts for
the sale or transportation of Hydrocarbons, operating agreements, development
agreements or compulsory pooling or unitization orders, declarations and
agreements and statutory landlord's liens), in any such case, in respect of
obligations which have not been outstanding more than 90 days or which are being
contested in good faith by appropriate proceedings; (iv) Liens securing the
performance of bids, tenders, contracts (other than for the repayment of
borrowed money or for the deferred purchase price of Property or services),
leases (other than leases which constitute Debt), statutory obligations, surety
and appeal bonds, and other Liens of like nature, in each case made in the
ordinary course of business; (v) any Liens securing Debt, neither assumed nor
guaranteed by United Meridian or any of its Subsidiaries nor on which any one of
them pays interest, existing upon real estate or rights in or relating to real
estate acquired by United Meridian or any Subsidiaries for substation, metering
station, pump station, storage, gathering line, transmission line,
transportation line, distribution line or right of way purposes, and any Liens
reserved in leases for rent and for compliance with the terms of the leases in
the case of leasehold estates, to the extent that any such Lien referred to in
this clause (v) does not materially impair the use of the Property covered by
such Lien for the purposes for which such Property is held by United Meridian or
such Subsidiary; (vi) encumbrances (other than to secure the payment of borrowed
money or the deferred purchase price of Property or services), easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations in any rights of way or other Property of United Meridian or any of
its Subsidiaries for the purpose of roads, pipelines, transmission lines,
transportation lines, distribution lines for the removal of gas, oil, coal or
other minerals or timber, and other like purposes, or for the joint or common
use of real estate, rights of way, facilities and equipment, and defects,
irregularities and deficiencies in title of any rights of way or other Property
which in the aggregate do not materially impair the use of such rights of way or
other Property for the purposes of which such rights of way and other Property
are held by United Meridian or any of its Subsidiaries; (vii) inchoate Liens on
pipelines or pipeline facilities that arise by operation of law which have not
attached to the Property subject of such Lien, (viii) rights of collecting banks
having rights of setoff, revocation, refund or chargeback with respect to money
or instruments of United Meridian or any of its Subsidiaries or on deposit with
or in the possession of such banks, and (ix) judgment and attachment Liens not
giving rise to an Event of Default or Liens created by or existing from any
litigation or legal proceedings that are currently being contested in good faith
by appropriate proceedings, promptly instituted and diligently conducted, and
for which adequate reserves have been made to the extent required by generally
accepted accounting principles.
"Excluded Taxes" shall have the meaning assigned such term in
Section 5.01(a).
-9-
<PAGE>
"Facility Fee Rate" shall mean, the following rate per annum as is
applicable:
================================================================================
Borrowing Base Utilization Percentage Rate Per Annum
- --------------------------------------------------------------------------------
Less than 55% 0.250%
- --------------------------------------------------------------------------------
Greater than or equal to 55%, 0.375%
but less than 85%
- --------------------------------------------------------------------------------
Greater than or equal to 85% 0.500%.
================================================================================
"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 (i) 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 for the next preceding day as so published on the next succeeding
Business Day, and (ii) if such rate is not so published for any Business Day,
the Federal Funds Rate for such day shall be the average rate charged to the
Administrative Agent on such day on such similar transactions as determined by
the Administrative Agent.
"Fee Letter" shall mean that certain letter agreement dated March 13, 1997
among the Company, the Administrative Agent and an Affiliate of the
Administrative Agent.
"Financial Statements" shall mean the annual, audited consolidated
financial statement or statements of United Meridian and its Consolidated
Subsidiaries described or referred to in Section 7.02(a).
"Global Commitment Percentage" shall mean, as to any Lender, the percentage
of the Indebtedness (plus, without duplication, if such Lender is also a
Canadian Lender or has an Affiliated Canadian Lender, the Dollar amount of
Canadian Indebtedness) to be provided by such Lender under this Agreement (and,
as applicable, by such Lender or its Affiliated Canadian Lender under the
Canadian Credit Agreement) as indicated on Annex I, as modified from time to
time to reflect any assignments permitted by Section 12.06(b) hereof and Section
12.06(b) of the Canadian Credit Agreement and any decreases pursuant to Section
2.03 hereof or Section 2.03 of the Canadian Credit Agreement.
"Governmental Authority" shall mean (a) any governmental authority wherever
located, including the federal governments of the United States and Canada, and
any state, county, parish, province, municipal and political subdivisions in
which any Property of United Meridian or any of its Subsidiaries is located or
which exercises jurisdiction over any such Property; and (b) any court, agency,
department, commission, board, bureau or instrumentality of any of them which
exercises jurisdiction over any such Person or Property.
-10-
<PAGE>
"Governmental Requirement" shall mean any law, statute, code, ordinance,
order, rule, regulation, judgment, decree, injunction, franchise, permit,
certificate, license, authorization or other direction or requirement
(including, without limitation, Environmental Laws, energy regulations and
occupational, safety and health standards or controls) of any Governmental
Authority.
"Guarantors" shall mean United Meridian, Norfolk, each of the Material
Subsidiaries and any Subsidiary of United Meridian which hereafter executes and
delivers to the Administrative Agent a Guaranty Agreement (whether or not
pursuant to Section 8.06(a)).
"Guaranty Agreements" shall mean a guaranty agreement executed by each of
the Guarantors in form and substance satisfactory to the Administrative Agent
and the Co-Agents guarantying payment of the Indebtedness.
"Havre" shall mean Havre Pipeline Company L.L.C., a limited liability
company established under the laws of the State of Texas of which the Company is
the manager and a majority member.
"Havre Credit Facility" shall mean that certain Credit Agreement, dated as
of September 29, 1995, by and between Union Bank and Havre, the promissory notes
described therein, the Pledge and Estoppel Agreement executed by the Company in
connection therewith, the Indemnity Agreement executed by the Company in
connection therewith, and all amendments, restatements and other modifications
(but not increases) to the foregoing from time to time.
"Highest Lawful Rate" shall mean, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Notes or on other
Indebtedness under laws applicable to such Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"Hydrocarbon Interests" shall mean all rights, titles, interests and
estates in and to oil and gas leases; oil, gas and mineral leases; other liquid
or gaseous hydrocarbon leases; production sharing contracts or other petroleum
concessions, licenses or similar agreements made by or on behalf of a sovereign;
mineral fee interests; overriding royalty and royalty interests; net profit
interests and production payment interests in Hydrocarbons, including any
reserve or residual interest of whatever nature.
"Hydrocarbons" shall mean oil, gas, casinghead gas, drip gasoline, natural
gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and
all products refined therefrom and all other minerals.
"IFC" shall mean the International Finance Corporation, an international
organization established by Articles of Agreement among its member countries.
"IFC Assignment Documents" shall mean (i) the Receipt and Acknowledgment of
Assignment dated November 14, 1996 from the IFC in favor of the Company pursuant
to which the IFC assigned the IFC Loan and related Liens to the Company; and
(ii) that certain Amended and Restated Collateral
-11-
<PAGE>
Assignment of Loan Agreement, Loan, Security Documents and Liens dated of even
date herewith by the Company in favor of the Administrative Agent for the
benefit of the Agents and the Lenders, pursuant to which the IFC Loan has been
collaterally assigned and pledged to secure the Indebtedness and the Canadian
Indebtedness.
"IFC Loan" shall mean the $35,000,000 loan made by the IFC to UMC-CI-11
pursuant to the terms of that certain Loan Agreement dated as of July 14, 1995
between IFC and UMC-CI-11, as amended, as secured by: (i) those certain Actes de
Delegation de Creances made by UMC-CI-11 in favor of the IFC, and (ii) that
certain Declaration Notariee Par La Societe UMC-CI-11 among Joseph Stephen
Thornton, acting on behalf of UMC-CI-11, as such agreements may have been or may
be amended or supplemented from time to time.
"Indebtedness" shall mean any and all amounts owing or to be owing by the
Company or the Guarantors to any Agent and/or the Lenders in connection with the
Notes or any Security Instrument, including this Agreement and the Letter of
Credit Agreements, and all renewals, extensions and/or rearrangements thereof,
but excluding the Canadian Indebtedness.
"Indemnity Matters" shall mean actions, suits, proceedings (including any
investigations, litigation or inquiries), claims, demands, causes of action,
costs, losses, liabilities, damages or expenses of any kind or nature
whatsoever.
"Indenture" shall mean that certain Indenture among United Meridian, as
issuer, the Company as initial Subsidiary Guarantor, and Bank of Montreal Trust
Company, as trustee, dated as of October 30, 1995, providing for the issuance of
United Meridian's $150,000,000 10-3/8% Senior Subordinated Notes due 2005, the
Securities (as defined therein) issued thereunder, and the Subsidiary Guarantees
(as defined in the Indenture), together with all amendments to the foregoing
permitted under Section 9.20(b) of this Agreement or a consent thereunder.
"Initial Funding" shall mean the funding of the initial Loans pursuant to
Section 6.01.
"Initial Reserve Reports" shall mean: (a) the reports of Ryder Scott
Company Petroleum Engineers dated as of January 1, 1997 and McDaniel &
Associates Consultants Ltd. dated as of January 1, 1997 with respect to Oil and
Gas Properties of the Company; (b) McDaniel & Associates Consultants Ltd. dated
as of January 1, 1997 with respect to the Oil and Gas Properties of UMC Canada;
and (c) Netherland, Sewell & Associates, Inc. dated as of January 1, 1997 with
respect to the Oil and Gas Properties of UMC-CI-11 and UMC-EG-B.
"Intercreditor Agreement" shall mean that certain Intercreditor Agreement
of even date herewith among the Agents, the Lenders, the Canadian Agent, the
Canadian Lenders, United Meridian, the Company, UMC Canada and the Guarantors,
as amended from time to time.
"Interest Coverage Ratio" shall mean the ratio, calculated as of the last
day of any fiscal quarter of United Meridian, of (a) EBITDA for the immediately
preceding four (4) fiscal quarters of United Meridian and its Consolidated
Subsidiaries ending on the date of determination to (b) interest expenses
(including capitalized interest expenses and excluding to the extent included in
the calculation of interest
-12-
<PAGE>
expenses, amortization of capitalized debt issuance costs of United Meridian and
its Consolidated Subsidiaries) on all Debt of United Meridian and its
Consolidated Subsidiaries for the immediately preceding four (4) fiscal quarters
of United Meridian ending on the date of determination.
"Interest Period" shall mean:
(a) with respect to any Eurodollar Loan, the period commencing on the date
such Eurodollar Loan is made or converted from a Base Rate Loan or the last day
of the next preceding Interest Period with respect to such Loan and ending on
the numerically corresponding day in the first, second, third or sixth calendar
month thereafter, as the Company may select as provided in Section 2.02 (or, in
the case of a Conventional Loan that is a Eurodollar Loan, such longer period as
may be requested by the Company and agreed to by all of the Lenders, and, in the
case of a Bid Rate Loan that is a Eurodollar Loan, nine or twelve months as may
be requested by the Company and agreed to by the Lender making such Loan),
except that each Interest Period which commences on the last Business Day of a
calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month; and
(b) with respect to any Absolute Rate Loan, the period commencing on the
date such Loan is made and ending on such day thereafter, up to 360 days, as the
Company may select as provided in Section 2.02(g).
Notwithstanding the foregoing (unless, in the case of a Conventional Loan
that is a Eurodollar Loan, agreed to by the Company and all of the Lenders, or,
in the case of a Bid Rate Loan, the Company and the Lender making such Loan):
(i) no Interest Period for a Loan may commence before and end after any
Commitment Reduction Date unless, after giving effect thereto, the aggregate
principal amount of the Loans having Interest Periods which end after such
Commitment Reduction Date shall be equal to or less than the amount to which the
Aggregate Commitments are to be automatically reduced on such Commitment
Reduction Date; (ii) each Interest Period which would otherwise end on a day
which is not a Business Day shall end on the next succeeding Business Day unless
the next succeeding Business Day falls in the next succeeding calendar month,
then on the next preceding Business Day; and (iii) notwithstanding clause (i)
above, no Interest Period for any Eurodollar Loans shall have a duration of less
than one month and, if the Interest Period for any Eurodollar Loans would
otherwise be a shorter period, such Loans shall not be available hereunder.
"International Component" shall mean that portion of the Borrowing Base
attributable to the Oil and Gas Properties owned by any Material Subsidiary
which Properties are beyond the geographic boundaries of North America.
"LC Exposure" shall mean at any time the aggregate undrawn face amount of
all outstanding Letters of Credit and the aggregate of all amounts drawn under
Letters of Credit and not yet reimbursed or funded as a Loan pursuant to Section
4.07(b), minus the aggregate face amount of all letters of credit issued for the
benefit of the Company or the Administrative Agent, which in each instance has
been specifically accepted by the Administrative Agent as acceptable collateral
supporting the Letters of Credit.
-13-
<PAGE>
"LC Fee Rate" shall mean, the following rate per annum as is applicable:
================================================================================
Borrowing Base Utilization LC Fee Rate
Percentage
- --------------------------------------------------------------------------------
Less than 40% 0.250%
- --------------------------------------------------------------------------------
Greater than or equal to 40%, 0.375%
but less than 55%
- --------------------------------------------------------------------------------
Greater than or equal to 55%, 0.500%
but less than 65%
- --------------------------------------------------------------------------------
Greater than or equal to 65%, 1.125%
but less than 85%
- --------------------------------------------------------------------------------
Greater than or equal to 85% 1.500%.
================================================================================
"Lender Group" shall mean collectively the Agents, the Lenders, the
Canadian Agent, the Canadian Lenders and the Collateral Agent.
"Letter of Credit Agreements" shall mean the written agreements between the
Company and the Administrative Agent or one of its Affiliates executed or
hereafter executed in connection with the issuance by the Administrative Agent
or its Affiliate of the Letters of Credit, such agreements to be on the
Administrative Agent's or such Affiliate's customary form for letters of credit
of comparable amount and purpose, as from time to time in effect or as otherwise
agreed to by the Company and the Administrative Agent or its Affiliate.
"Letters of Credit" shall mean: (a) the letters of credit hereafter issued
by the Administrative Agent or one of its Affiliates on behalf of the Lenders
pursuant to Section 2.01(b), (b) all letters of credit heretofore issued by the
Administrative Agent, as agent, or one of its Affiliates under the Prior Credit
Agreement, which are outstanding on the date of the Initial Funding, and (c) all
reimbursement obligations pertaining to any such letters of credit; and "Letter
of Credit" shall mean any one of the Letters of Credit and the reimbursement
obligation pertaining thereto.
"Leverage Ratio" means, as of any time, the ratio of (a) total Debt of
United Meridian and its Subsidiaries on a consolidated basis at such time to (b)
Consolidated Tangible Net Worth plus total Debt of United Meridian and its
Subsidiaries on a consolidated basis at such time.
"Liens" shall mean, with respect to any asset, any mortgage, lien, pledge,
charge (including, without limitation, production payments and the like payable
out of Oil and Gas Properties), security interest or encumbrance of any kind in
respect of such asset. For the purposes of this Agreement, United Meridian and
its Subsidiaries shall be deemed to own subject to a Lien any asset which 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
relating to such asset.
"Loans" shall mean the Conventional Loans and Bid Rate Loans provided for
by Section 2.01.
-14-
<PAGE>
"Material Adverse Effect" shall mean any material and adverse effect on:
(a) the business, condition (financial or otherwise), results of operations,
assets, liabilities or prospects of the Company, the Guarantors, UMC Canada and
the Material Subsidiaries on a consolidated basis, (b) the ability of United
Meridian and its Subsidiaries, including the Company, to perform their
obligations under the Security Instruments to which they are party, taken as a
whole, or (c) the rights and remedies of the Agents and the Lenders under the
Security Instruments, taken as a whole.
"Material Subsidiary" shall mean UMC-CI-11, UMC-EG-B and any other
Subsidiary of the Company that holds Oil and Gas Properties in a jurisdiction
outside the geographical boundaries of North America if: (a) the Company desires
to include in the Borrowing Base the value of such Oil and Gas Properties and
such Properties constitute 5% or more of the amount of the then current
Borrowing Base, or (b) United Meridian and/or any of its Subsidiaries have made
investments, loans and/or advances in or to such Subsidiary in excess of
$50,000,000 during the twelve month period ending on the date of the most
recently delivered quarterly or annual financial statements under either Section
7.02 or Section 8.01, net of cash received from such Subsidiary during such
period as a return of capital or return on investments, loans or advances
previously made in or to such Subsidiary; provided that
(i) a Material Subsidiary under clause (a) may, upon the election of the
Company, cease to be a Material Subsidiary if the Company desires to
exclude the Oil and Gas Properties held by such Subsidiary from the
Borrowing Base (provided that the Company may not make such an election if
a Borrowing Base Deficiency under Section 2.08(c) would result from such
exclusion); and if the sum of, without duplication, (1) the value of the
Oil and Gas Properties owned by such Subsidiary, (2) the value of all Oil
and Gas Properties under contracts which ceased to be Designated Contracts
during the same Redetermination Period, (3) the value of all Oil and Gas
Properties of all other Subsidiaries that ceased to be Material
Subsidiaries during the same Redetermination Period, and (4) the amount of
all sales of Properties (excluding (A) Hydrocarbons sold in the ordinary
course of business as and when produced or after production thereof, (B)
Oil and Gas Properties described in clauses (1), (2) and (3) above and (C)
Properties listed on Schedule 9.16) made during such Redetermination
Period, constitutes 5% or more of the then current value of the Borrowing
Base, then the Borrowing Base shall be reduced by an amount agreed to at
the time by the Required Lenders (and if such sum is less than 5%, no
adjustment to the Borrowing Base shall occur as a result of such election);
and
(ii) a Material Subsidiary under clause (b) may, upon the election of the
Company, cease to be a Material Subsidiary if the aggregate amount of
investments, loans and/or advances made by United Meridian or any of its
Subsidiaries in or to such Subsidiary is less than $50,000,000 (net of cash
received from such Subsidiary during such period as a return of capital or
return on investments, loans or advances previously made in or to such
Subsidiary) during the twelve month period ending on the date of the most
recently delivered quarterly or annual financial statements under either
Section 7.02 or Section 8.01.
"Multiemployer Plan" shall mean a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by United Meridian or any ERISA
Affiliate and which is covered by Title IV of ERISA.
-15-
<PAGE>
"Non-recourse" with respect to an obligation and a Person shall mean that
such Person has no liability to the holder of such obligation for the payment or
repayment of such obligation, except that such Person may have liability to the
holder of such obligation for damages with respect to such obligation arising
out of fraudulent acts or omissions, willful misrepresentations, willful
misconduct and similar acts or omissions by such Person.
"North American Component" shall mean that portion of the Borrowing Base
attributable to the Oil and Gas Properties owned by the Company and its
Subsidiaries which are within the geographic boundaries of North America.
"Notes" shall mean the Conventional Loan Notes and Bid Rate Notes, together
with any and all renewals, extensions for any period, increases, rearrangements
or replacements thereof.
"Oil and Gas Properties" shall mean Hydrocarbon Interests; the Properties
now or hereafter pooled or unitized with Hydrocarbon Interests; all presently
existing or future unitization or pooling agreements and declarations of pooled
units and the units created thereby (including without limitation all units
created under orders, regulations and rules of any Governmental Authority having
jurisdiction) which may affect all or any portion of the Hydrocarbon Interests;
all operating agreements, contracts and other agreements which relate to any of
the Hydrocarbon Interests or the production, sale, purchase, exchange or
processing of Hydrocarbons from or attributable to such Hydrocarbon Interests;
all Hydrocarbons in and under and which may be produced and saved or
attributable to the Hydrocarbon Interests, the lands covered thereby and all oil
in tanks and all rents, issues, profits, proceeds, products, revenues and other
incomes from or attributable to the Hydrocarbon Interests; all tenements,
heredita ments, appurtenances and Properties in anywise appertaining,
belonging, affixed or incidental to the Hydrocarbon Interests, Properties,
rights, titles, interests and estates described or referred to above, including
any and all Property, real or personal, now owned or hereinafter acquired and
situated upon, used, held for use or useful in connection with the operating,
working or development of any of such Hydrocarbon Interests or Property
(excluding drilling rigs, automotive equipment or other personal property which
may be on such premises for the purpose of drilling a well or for other similar
temporary uses) and including any and all oil wells, gas wells, injection wells
or other wells, buildings, structures, fuel separators, liquid extraction
plants, plant compressors, pumps, pumping units, field gathering systems, tanks
and tank batteries, fixtures, valves, fittings, machinery and parts, engines,
boilers, meters, apparatus, equipment, appliances, tools, implements, cables,
wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements
and servitudes together with all additions, substitutions, replacements,
accessions and attachments to any and all of the foregoing.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Partnerships" shall mean the general and limited partnerships listed on
Exhibit E.
"Person" shall mean any individual, corporation, limited liability company,
voluntary association, partnership, joint venture, trust, unincorporated
organization or government or any agency, instrumentality or political
subdivision thereof, or any other form of entity.
-16-
<PAGE>
"Plan" shall mean an employee pension benefit or other plan established or
maintained by United Meridian or any ERISA Affiliate and which is covered by
Title IV of ERISA, other than a Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any principal of any Loan or
any other amount payable by the Company or any Guarantor under this Agreement,
any Note or any Security Instrument which is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum during the
period commencing on the due date until such amount is paid in full or the
default is cured or waived equal to 4% per annum above the Base Rate as in
effect from time to time plus the Applicable Margin (if any), but in no event to
exceed the Highest Lawful Rate; provided that, if such amount in default is
principal of a Eurodollar Loan or Absolute Rate Loan and the due date is a day
other than the last day of the Interest Period therefor, the "Post-Default Rate"
for such principal shall be, for the period commencing on the due date and
ending on the last day of the Interest Period therefor, 4% per annum above the
interest rate for such Loan as provided in Section 3.02(a), but in no event to
exceed the Highest Lawful Rate, and thereafter, the rate provided for above in
this definition.
"Prime Rate" shall mean the rate of interest from time to time announced by
the Administrative Agent at the Principal Office as its prime commercial lending
rate. Such rate is set by the Administrative Agent as a general reference rate
of interest, taking into account such factors as it may deem appropriate, it
being understood that many of the Administrative Agent's commercial or other
loans are priced in relation to such rate, that it is not necessarily the lowest
or best rate actually charged to any customer and that the Administrative Agent
may make various commercial or other loans at rates of interest having no
relationship to such rate.
"Principal Office" shall mean the principal office of the Administrative
Agent, presently located at 270 Park Avenue, New York, New York 10017.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Quarterly Dates" shall mean the last day of each March, June, September
and December in each year, commencing March 31, 1997; provided that if any such
day is not a Business Day, then such Quarterly Date shall be the next succeeding
Business Day.
"Redetermination Date" shall mean the annual, semi-annual or other date
that the redetermined Borrowing Base becomes effective.
"Redetermination Period" shall mean the period between any two consecutive
Redetermination Dates, regardless of the length of such period.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be amended or
supplemented from time to time.
-17-
<PAGE>
"Regulations G, T, U and X" shall mean Regulations G, T, U and X of the
Board of Governors of the Federal Reserve System (or any successor), as the same
may be amended or supplemented from time to time.
"Regulatory Change" shall mean, with respect to any Lender, any change
after the date of this Agreement in United States Federal, state or foreign law
or regulations (including Regulation D) or the adoption or making after such
date of any interpretations, directives or requests applying to a class of
lenders or insurance companies, including such Lender or its Applicable Lending
Office, of or under any United States Federal, state or foreign law or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"Required Lenders" shall mean: (a) at any time while no Conventional Loans,
Canadian Indebtedness or Letters of Credit are outstanding, Lenders and Canadian
Lenders having, without duplication, greater than sixty-six and two-thirds
percent (66-2/3%) of the sum of the Aggregate Commitments and the Canadian
Subcommitments; and (b) at any time while Conventional Loans, Canadian
Indebtedness or Letters of Credit are outstanding, Lenders and Canadian Lenders
holding (or, as to Letters of Credit, participating in) greater than sixty-six
and two-thirds percent (66-2/3%) of the outstanding aggregate principal amount
of the Conventional Loans, Canadian Indebtedness and Letters of Credit (without
regard to any sale by a Lender or a Canadian Lender of a participation in any
Loan, Canadian Loan or Letter of Credit). For purposes of this determination,
Canadian dollar amounts shall be converted to Dollars at an exchange rate
determined by the Administrative Agent in good faith.
"Required Payment" shall have the meaning assigned to that term in
Section 4.04.
"Reserve Report" shall have the meaning assigned such term in
Section 8.05(a).
"SEC" shall mean the Securities and Exchange Commission or any successor
agency thereto.
"SEC Value" shall mean the future net revenues before income taxes from
proved reserves, estimated assuming that oil and natural gas prices and
production costs remain constant, then discounted at the rate of 10% per year to
obtain the present value.
"Security Instruments" shall mean this Agreement, the Notes, the Letter of
Credit Agreements, the Guaranty Agreements, the Fee Letter, the agreements or
instruments described or referred to in Exhibit F, and any and all other
agreements or instruments now or hereafter executed and delivered by the
Guarantors, the Company or any other Person (other than participation or similar
agreements between any Lender and any other lender or creditor with respect to
any Indebtedness pursuant to this Agreement) in connection with, or as security
for the payment or performance of, the Notes, the Letter of Credit Agreements or
this Agreement, as such agreements may be amended or supplemented from time to
time.
"Share" of the Allocated Canadian Borrowing Base or the Allocated U.S.
Borrowing Base shall have the meaning set forth within such terms.
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"Subordinated Debt" shall mean: (a) the Debt of United Meridian or any of
its Subsidiaries under the Indenture and other Subordinated Debt permitted under
Section 9.03(e)(i); and (b) any Subordinated Debt of United Meridian and its
Subsidiaries incurred in accordance with the terms of Section 9.01(e)(ii).
"Subsidiary" shall mean, with respect to any Person, any corporation or
limited liability company of which at least a majority of the outstanding shares
of stock or interests having by the terms thereof ordinary voting power to elect
a majority of the board of directors of such corporation or a manager of such
limited liability company (irrespective of whether or not at the time stock or
interests of any other class or classes 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 of its Subsidiaries
or by such Person and one or more of the Subsidiaries.
"Tax" shall mean any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and additions
thereto) that is imposed by any government or other taxing authority in respect
of any payment under this Agreement (or, if applicable in the context, the
Canadian Credit Agreement) other than a stamp, registration, documentation or
similar tax.
"Tax Partnerships" shall mean partnerships or joint ventures arising out of
routine joint operating agreements or farmout agreements entered into with
United Meridian or any of its Subsidiaries with respect to Oil and Gas
Properties.
"Tax Payments" shall mean payments or reimbursements to United Meridian for
taxes paid by United Meridian on behalf of any of its Subsidiaries, including
the Company or any payments, approved by the Required Lenders, to United
Meridian for the use of tax benefits pursuant to tax sharing agree ments.
"Technical Agents" shall mean the Administrative Agent, the Syndication
Agent and the Documentation Agents.
"Termination Date" shall mean March 31, 2002, unless the Commitments are
sooner terminated pursuant to Section 2.03(c) or Section 10.01, or extended
pursuant to Section 2.03(b).
"Third Party LC Exposure" shall mean, at any time, the aggregate undrawn
face amount of all outstanding letters of credit issued for the account of the
Company or its Subsidiaries under Section 9.01(h) and the aggregate of all
amounts drawn under such letters of credit and not yet reimbursed by the
Company.
"Type" shall mean, with respect to any Loan, an Absolute Rate Loan, a
Eurodollar Loan or a Base Rate Loan, each being a "Type" of Loan.
"UMC Canada" shall mean UMC Canada Resources Ltd., a company continued
under the laws of the Province of British Columbia.
"UMC-CI-11" shall mean UMIC Cote d'Ivoire Corporation, a Delaware
corporation.
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"UMC-CI-11 PSC" shall mean collectively, (a) that certain production
sharing contract for the area known as "Block CI-11" dated June 27, 1992 among
(originally or by assignment) The Republic of Cote d'Ivoire, Societe Nationale
d'Operations Petrolieres de la Cote d'Ivoire and UMC-CI-11, as amended by that
certain First Amendment to Production Sharing Contract dated as of June 24,
1993, and as amended from time to time hereafter in accordance with Section
9.21; and (b) that certain Joint Operating Agreement dated June 27, 1992 among
(originally or by assignment) UMC-CI-11, the IFC, Societe Nationale d'Operations
Petrolieres de la Cote d'Ivoire, and the other parties thereto, as amended by
that certain First Amendment to Joint Operating Agreement dated as of July 23,
1993; as amended by that certain Second Amendment to Joint Operating Agreement
dated as of July 29, 1993; as amended by that certain Third Amendment to Joint
Operating Agreement dated as of August 3, 1993; as amended by that certain
Fourth Amendment to Joint Operating Agreement dated as of July 14, 1995; as
amended by that certain Fifth Amendment to Joint Operating Agreement dated as of
July 1, 1996, and as amended from time to time hereafter in accordance with
Section 9.21.
"UMC-EG-B" shall mean UMC Equatorial Guinea Corporation, a Delaware
corporation.
"UMC-EG-B PSC" shall mean collectively, (a) that certain production sharing
contract for the area in Equatorial Guinea known as "Area B - Offshore NW Bioco"
dated June 29, 1992 among (originally or by assignment) The Republic of
Equatorial Guinea, Mobil Equatorial Guinea Inc., and UMC-EG-B, as amended by
that certain First Amendment to Production Sharing Contract dated as of
December 15, 1992, as amended by that certain Second Amendment to Production
Sharing Contract dated as of September 17, 1993, as amended by that certain
Third Amendment to Production Sharing Contract dated as of March 1, 1994, as
amended by that certain Fourth Amendment to Production Sharing Contract dated as
of June 29, 1994, as amended by that certain Fifth Amendment to Production
Sharing Contract dated as of January 25, 1996, and as amended from time to time
hereafter in accordance with Section 9.21; and (b) that certain Joint Operating
Agreement dated May 24, 1994 among (originally or by assignment) Mobil
Equatorial Guinea Inc., as operator, and UMC-EG-B, as amended by that certain
First Amendment to Joint Operating Agreement dated as of November 3, 1995, and
as amended from time to time hereafter in accordance with Section 9.21.
"Voting Stock" shall mean, with respect to any Person, any class or classes
of capital stock pursuant to which the holders thereof have the general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of any Person (irrespective of whether or not,
at the time, stock of any other class or classes shall have, or might have,
voting power by reason of the happening of any contingency).
SECTION 1.03 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to any Agent or the Lenders hereunder shall be
prepared, in accordance with generally accepted accounting principles as in
effect, applied on a basis consistent with the Financial Statements. Unless
otherwise specified, all amounts referred to herein and in the other Security
Instruments (other than the Canadian Credit Agreement and any guaranty executed
in connection with the Canadian Credit Agreement) are in Dollars.
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ARTICLE II
COMMITMENTS
SECTION 2.01 LOANS AND LETTERS OF CREDIT.
(a) CONVENTIONAL LOANS.
(i) Each Lender severally agrees, on the terms and conditions of this
Agreement, to make revolving credit loans (each a "Conventional Loan") to
the Company during the period from and including the Effective Date to and
including the Termination Date, in an aggregate principal amount at any one
time outstanding up to but not exceeding the lesser of (1) such Lender's
Commitment and (2) the amount of such Lender's Share of the Allocated U.S.
Borrowing Base as then in effect; provided that the aggregate principal
amount of all Conventional Loans and all Bid Rate Loans made by all of the
Lenders hereunder at any one time outstanding shall not exceed the
Available U.S. Commitment, as then in effect, minus the LC Exposure.
Subject to the terms of this Agreement, during the period from the
Effective Date to and including the Termination Date, the Company may
borrow, repay and reborrow the amount of the Available U.S. Commitment as
then in effect. Conventional Loans may be Base Rate Loans or Eurodollar
Loans.
(ii) Unless consented to in writing by the Administrative Agent, no more
than five (5) Eurodollar Loans that are Conventional Loans may be
outstanding from each Lender at any time. For purposes of this Section
2.01(a)(ii), Eurodollar Loans having different Interest Periods, regardless
of whether they commence on the same date, shall be considered separate
Loans.
(b) LETTERS OF CREDIT.
(i) During the period from and including the Effective Date to and
including the Termination Date, the Administrative Agent agrees, on behalf
of the Lenders, to extend credit to the Company by issuing, renewing,
extending or reissuing Letters of Credit for the account of the Company or
any of its Subsidiaries; provided that the aggregate LC Exposure at any one
time outstanding shall not exceed the lesser of (A) the Available U.S.
Commitment as then in effect minus the aggregate amount of all Conventional
Loans and Bid Rate Loans then outstanding or (B) $50,000,000.
(ii) Each of the Letters of Credit shall (A) be issued by the
Administrative Agent or Texas Commerce Bank National Association, an
Affiliate of the Administrative Agent, (B) contain such terms and
provisions as are reasonably required by the Administrative Agent, (C) be
for the account of the Company or one of its Subsidiaries, and (D) expire
not later than the earlier of three (3) years after the issue date of such
Letter of Credit or two (2) days before the Termination Date.
(iii) In conjunction with the issuance of a Letter of Credit, the Company
shall execute a Letter of Credit Agreement. In the event of any conflict
between any provision of a Letter of Credit Agreement and this Agreement,
the Company, the Guarantors, the Agents and the
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Lenders hereby agree that the provisions of this Agreement shall govern.
Such conflicts include, without limitation, provisions in a Letter of
Credit Agreement providing for an interest rate different from the interest
rate provided in this Agreement and provisions in a Letter of Credit
Agreement requiring or relating to collateral to secure the obligations
thereunder.
(c) BID RATE LOANS.
(i) Each Lender severally agrees that the Company from time to time may
request one or more of the Lenders to make loans to the Company on a non-
pro rata basis (each a "Bid Rate Loan") in the manner set forth in Section
2.02(g) during the period from and including the Effective Date to and
including the Termination Date; provided that (A) no Lender shall be
obligated to make Bid Rate Loans to the Company unless such Lender has
irrevocably offered to make a Bid Rate Loan pursuant to Section
2.02(g)(iii); and (B) following the making of any Bid Rate Loan by any
Lender, the aggregate principal amount of all Conventional Loans and all
Bid Rate Loans made by all of the Lenders hereunder at any one time
outstanding shall not exceed the Available U.S. Commitment, as then in
effect, minus the LC Exposure. Bid Rate Loans may be Eurodollar Loans or
Absolute Rate Loans. For purposes of this Section 2.01(c)(i) and Section
2.02(g), Bid Rate Loans having different Interest Periods, regardless of
whether they commence on the same date, shall be considered separate Loans.
(ii) The making of any Bid Rate Loan to the Company by any Lender shall
not be deemed to be a utilization of such Lender's Commitment (although it
shall be deemed to be a utilization of the Available U.S. Commitment to
effect the above stated limitation and for all other purposes of this
Agreement).
(d) LOANS UNDER PRIOR CREDIT AGREEMENT. On the Effective Date:
(i) the Company shall pay all accrued and unpaid commitment fees
outstanding under the Prior Credit Agreement for the account of each
"Lender" under the Prior Credit Agreement;
(ii) each "Eurodollar Loan" outstanding under the Prior Credit Agreement
shall be deemed a Eurodollar Loan hereunder in the amount, with the same
rate of interest and maturity date as such "Eurodollar Loan" under the
Prior Credit Agreement, and the obligations of the Company with respect to
such "Eurodollar Loan," including accrued and unpaid interest shall be
deemed carried forward hereunder (and, as such, such Eurodollar Loans may
not be allocated in accordance with the percentages set forth on Annex I),
and the execution and delivery of this Agreement and the extension of such
Loans hereunder shall not entitle any "Lender" under the Prior Credit
Agreement to seek compensation pursuant to Section 5.05 hereof or thereof;
(iii) each "Base Rate Loan" under the Prior Credit Agreement shall be
deemed to be repaid with the proceeds of a new Base Rate Loan under this
Agreement; and
(iv) the Prior Credit Agreement and the commitments thereunder shall be
superseded by this Agreement and such commitments shall terminate.
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SECTION 2.02 BORROWINGS, CONTINUATIONS AND CONVERSIONS;
ISSUANCE OF LETTERS OF CREDIT.
(a) BORROWINGS. The Company shall give the Administrative Agent
(which shall promptly notify the Lenders) advance notice as hereinafter provided
of each borrowing, continuation, and conversion hereunder of a Conventional
Loan, which shall specify the aggregate amount of such borrowing, continuation
or conversion, the Type and date (which shall be a Business Day) of the
Conventional Loans to be borrowed, continued or converted, and (in the case of
Eurodollar Loans) the duration of the Interest Period therefor.
(b) MINIMUM AMOUNTS. All Base Rate Loans (as part of the same
borrowing) shall be in aggregate amounts among all Lenders of at least
$1,000,000 (or whole multiples thereof) or the remaining unused portion of the
Commitments, or the amount disbursed under a Letter of Credit and advanced
hereunder pursuant to Section 4.07(b) hereof, if less. All Eurodollar Loans (as
part of the same borrowing) shall be in aggregate amounts among all Lenders of
at least $1,000,000 (or whole multiples thereof). All Bid Rate Loan borrowings
under Section 2.02(g) shall be in amounts of at least $5,000,000.
(c) NOTICES, ETC. FOR CONVENTIONAL LOANS. All borrowings,
continuations and conversions relating to Conventional Loans shall require
advance written notice from the Company to the Administrative Agent, in the form
of Exhibit C-1, or such other form as may be accepted by the Administrative
Agent from time to time, which in each case shall be irrevocable and effective
only upon receipt by the Administrative Agent not later than (i) in the case of
a Base Rate Loan, 12:00 noon New York time on the date of such borrowing,
continuation or conversion; and (ii) in the case of a Eurodollar Loan, 12:00
noon New York time on a day which is not less than three (3) Business Days prior
to the date of such borrowing, continuation or conversion. Not later than 12:00
noon New York time on the date specified for each borrowing hereunder of a
Conventional Loan, each Lender shall make available the amount of the
Conventional Loan to be made by such Lender on such date to the Administrative
Agent, at account number 900-9-000002 maintained by the Administrative Agent at
the Principal Office, in immediately available funds for the account of the
Company. The amounts so received by the Administrative 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 designated by the Company and maintained with the Administrative Agent
at the Principal Office.
(d) LETTERS OF CREDIT. The Company shall give the Administrative
Agent (which shall promptly notify the Lenders) advance notice as provided in
Section 2.02(c) not less than one (1) Business Day prior thereto of each request
for the issuance, renewal, or extension of a Letter of Credit hereunder which
request shall specify the amount of such Letter of Credit, the date (which shall
be a Business Day) such Letter of Credit is to be issued, renewed or extended,
the duration thereof, the beneficiary thereof, and such other terms as the
Administrative Agent may reasonably request, all of which shall be reasonably
satisfactory to the Administrative Agent. Subject to the terms and conditions
of this Agreement, on the date specified for the issuance, renewal or extension
of a Letter of Credit, the Administrative Agent shall issue such Letter of
Credit to the beneficiary thereof.
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(e) CONTINUATION OPTIONS. Subject to the terms of this Agreement, the
Company may elect to continue all or any part of any Eurodollar Loan that is a
Conventional Loan beyond the expiration of the then current Interest Period
relating thereto by giving advance notice to the Administrative Agent of such
election, specifying the amount of such Eurodollar Loan to be continued and the
Interest Period therefor. In the absence of such a timely and proper election,
the Company shall be deemed to have elected to convert such Eurodollar Loan to a
Base Rate Loan. All or any part of any Eurodollar Loan may be continued as
provided herein, provided that (i) the principal amount of all or any part of a
Loan so continued shall be not less than $1,000,000 in the aggregate for all
Lenders and (ii) no Default shall have occurred and be continuing. If a Default
shall have occurred and be continuing, each Eurodollar Loan shall be converted
to a Base Rate Loan on the last day of the Interest Period applicable thereto.
The Company may not continue Bid Rate Loans.
(f) CONVERSION OPTIONS. The Company may elect to convert any
Eurodollar Loan that is a Conventional Loan on the last day of the then current
Interest Period relating thereto to a Base Rate Loan by giving advance notice to
the Administrative Agent of such election. Subject to the terms of this
Agreement, the Company may elect to convert all or any part of a Base Rate Loan
that is a Conventional Loan at any time and from time to time to a Eurodollar
Loan by giving advance notice to the Administrative Agent of such election. All
or any part of any outstanding Loan may be converted as provided herein,
provided that any conversion of any Base Rate Loan into a Eurodollar Loan shall
be (as to each such Loan into which there is a conversion for an applicable
Interest Period) in the principal amount not less than $1,000,000 in the
aggregate for all Lenders. If no Default shall have occurred and be continuing,
each Loan may be converted as provided in this Section. If a Default shall have
occurred and be continuing, no Loan may be converted into a Eurodollar Loan.
The Company may not convert Bid Rate Loans.
(g) BID RATE LOANS. The procedure for making Bid Rate Loans shall be
as follows:
(i) The Company may request Bid Rate Loans pursuant to this Section
2.02(g) from time to time from the Lenders by giving to the Administrative
Agent, as bid administrator, a notice of a proposed bid rate borrowing in
substantially the form of Exhibit C-2 hereto (a "Competitive Bid Request"),
which notice shall be given not later than 10:00 a.m., New York time, on a
Business Day not less than four (4) Business Days prior to the proposed date the
Bid Rate Loans are to be borrowed if such Bid Rate Loans are Eurodollar Loans
and not less than one (1) Business Day prior to the proposed date the Bid Rate
Loans are to be borrowed if such Bid Rate Loans are Absolute Rate Loans. The
Competitive Bid Request shall specify the proposed date of the Bid Rate Loans to
be borrowed (which shall be a Business Day), the aggregate amount of the
proposed Bid Rate Loans to be made, which shall be not less than $5,000,000, the
duration therefor, the Type, the interest payment date or dates relating
thereto, and any other terms to be applicable to such Bid Rate Loan. The
Company may request offers to make Bid Rate Loans for up to three (3) different
Interest Periods in a single Competitive Bid Request. The terms of a
Competitive Bid Request may not waive or modify any of the conditions precedent
set forth herein. The Administrative Agent, as bid administrator, shall
promptly notify each Lender of the Company's request for Bid Rate Loans by
sending each Lender a copy of the Competitive Bid Request.
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(ii) Each Competitive Bid Request must be in writing and may be
delivered (whether by the Company or the Administrative Agent as bid
administrator) by telegraph, telex, telecopy, other facsimile transmission or
other suitable means. All responses to any Competitive Bid Request shall be in
writing and may be delivered to the Administrative Agent by telegraph, telex,
telecopy, other facsimile transmission or other suitable means.
(iii) Upon receipt of such Competitive Bid Request, each Lender may,
if, in its sole discretion, it elects to do so, irrevocably offer to make one or
more Bid Rate Loans to the Company at a rate or rates of interest specified by
such Lender in its sole discretion by notifying the Administrative Agent, as bid
administrator (which shall promptly convey such response to the Company), in
writing by supplying a Bid Rate Quote in substantially the form of Exhibit C-3
hereto of its decision not later than 2:00 p.m., New York time, on the Business
Day not less than four (4) Business Days prior to the proposed date the Bid Rate
Loans are to be borrowed if such Bid Rate Loans are Eurodollar Loans and before
10:00 a.m. New York time on the same Business Day as the Bid Rate Loans are to
be borrowed if such Bid Rate Loans are Absolute Rate Loans (provided that if the
Administrative Agent, in its capacity as a Lender, desires to submit a Bid Rate
Quote, it shall on the relevant date submit its quote not later than 1:45 p.m.
and 9:45 a.m., respectively), of the minimum amount and maximum amount of each
Bid Rate Loan such Lender would be willing to make as part of such proposed Bid
Rate Loan (which shall be not less than $5,000,000), the rate or rates of
interest therefor, the Applicable Lending Office therefor, if different, and the
period of time during which such Lender's offer with respect to such rate or
rates of interest shall remain open. Such rate or rates of interest may be
either an Absolute Rate or based on the definition of "Eurodollar Rate," adding
or subtracting any margin which such Lender deems appropriate. Unless otherwise
agreed by the Administrative Agent and the Company, no Bid Rate Quote shall
contain qualifying, conditional or similar language, propose terms other than or
in addition to those set forth in the relevant Competitive Bid Request, or be
conditioned upon acceptance by the Company of all of the Bid Rate Loans for
which such offer is being made. Bid Rate Quotes not in compliance with this
clause (iii) may be disregarded by the Company in its sole discretion.
(iv) The Company shall, in turn, not later than the expiration of the
period of time specified by such Lender during which its offer would remain open
(but in no event later than 10:30 a.m. New York time on the Business Day that is
three (3) Business Days prior to the proposed borrowing date if such Bid Rate
Loans are Eurodollar Loans and not later than 11:00 a.m. New York time on the
proposed borrowing date if such Bid Rate Loans are Absolute Rate Loans), in its
sole discretion, either (A) cancel its request by giving the Administrative
Agent, as bid administrator, notice to that effect, or (B) accept one or more
offers made by Lenders to make one or more Bid Rate Loans, in its sole
discretion, by giving notice to the Administrative Agent, as bid administrator,
of the amount of each Bid Rate Loan to be made by such Lender (which amount
shall be equal to or greater than the minimum amount and less than or equal to
the maximum amount, that such Lender specified to the Company for such Bid Rate
Loan pursuant to clause (iii) above, but in no event shall such amount be less
than $5,000,000). In the event the Company fails to cancel its request or to
accept the offer of a Lender to make one or more Bid Rate Loans within the time
periods specified in this clause (iv), the Company shall be deemed to have
canceled its request for such Bid Rate Loan. Upon notice that a Competitive Bid
Request has been canceled, the Administrative Agent, as bid administrator, shall
give prompt notice thereof to the Lenders.
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(v) The Company shall have no obligation to accept any offers, but
if the Company accepts offers, it shall do so on the basis of the lowest Bid
Rate offered; and in the event bids are equal, the Company may accept any such
offers in its sole discretion. If the Company accepts one or more of the offers
made by the Lenders, the Administrative Agent, as bid administrator, shall
promptly notify each Lender whose offer was accepted of the date and aggregate
amount of such Bid Rate Loan and shall promptly notify all other Lenders whose
offers were not accepted of such fact. The benefit of any notice or time periods
specified above in this Section 2.02(g) relating to Bid Rate Loans from any
Lender may be waived by the Company or such Lender, as the case may be, without
the consent or approval of the Administrative Agent or any other Lender.
(vi) Not later than 1:00 p.m., New York time, on the date specified
for each borrowing hereunder of a Bid Rate Loan, each Lender that has had its
bids accepted shall make available the amount of such Bid Rate Loan to be made
by it on such date to the Administrative Agent, at an account maintained by the
Administrative Agent at the Principal Office, in immediately available funds,
for the account of the Company. The amounts so received by the Administrative
Agent shall, subject to the terms and conditions of this Agreement, including
without limitation the satisfaction of all conditions precedent specified in
Section 6.02, be made available to the Company by depositing the same, in
immediately available funds, in an account of the Company, designated by the
Company, maintained with the Administrative Agent at the Principal Office.
(vii) If any Lender makes a new Bid Rate Loan hereunder on a day on
which the Company is to repay all or any part of any outstanding Bid Rate Loan
from such Lender, such Lender shall apply the proceeds of its new Bid Rate Loan
to make such repayment and only an amount equal to the difference (if any)
between such amount being borrowed and such amount being repaid shall be made
available by such Lender to the Company or remitted by the Company to such
Lender, as the case may be.
(viii) The indebtedness of the Company resulting from each Bid Rate
Loan made to the Company shall be evidenced by the records of each Lender making
a Bid Rate Loan and by the Bid Rate Note therefor. Such records shall be
presumed correct; provided that the failure of any Lender to make any such
notation on its Bid Rate Note shall not affect the Company's obligations in
respect of its Bid Rate Loan from such Lender.
SECTION 2.03 CHANGES OF COMMITMENTS.
(a) SCHEDULED REDUCTIONS. Unless the Aggregate Commitments has already
been reduced pursuant to Section 2.03(c), the Aggregate Commitments shall
automatically reduce as follows:
(i) on the initial Commitment Reduction Date, the Aggregate Commitments
shall reduce to $275,000,000;
(ii) on the second Commitment Reduction Date, the Aggregate Commitments
shall reduce to $250,000,000;
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(iii) on the third Commitment Reduction Date, the Aggregate Commitments
shall reduce to $225,000,000;
(iv) on the fourth Commitment Reduction Date, the Aggregate Commitments
shall reduce to $200,000,000;
(v) on the fifth Commitment Reduction Date, the Aggregate Commitments
shall reduce to $175,000,000; and
(vi) on the Termination Date, the Aggregate Commitments shall be reduced
to zero.
(b) WAIVER AND EXTENSION OF REVOLVING CREDIT REDUCTION DATES.
(i) At any time prior to the date 15 days in advance of any Commitment
Reduction Date, the Company may request in writing that the Lenders and the
Canadian Lenders waive the scheduled reduction to occur on such Commitment
Reduction Date; provided, that any such waiver shall require the consent of
all of the Lenders and the Canadian Lenders, which consent may be withheld
in each such Person's sole discretion; and provided, further, that if any
Lender or Canadian Lender has not responded to such request in writing
within 15 days after receipt of the written request of the Company by the
Administrative Agent, such failure shall be deemed a denial of said
request. Any waiver granted under this clause (i) shall not affect the
amount or timing of any subsequent scheduled reductions.
(ii) Without limitation of clause (i) above, at any time prior to the date
45 days in advance of the initial Commitment Reduction Date, the Company
may request in writing that the Lenders and the Canadian Lenders postpone
the initial Commitment Reduction Date for one (1) additional year;
provided, that any such postponement shall require the consent of all of
the Lenders and the Canadian Lenders, which consent may be withheld in each
such Person's sole discretion; and provided, further, that if any Lender or
Canadian Lender has not responded to such request in writing within the 45
days after receipt of the written request of the Company by the
Administrative Agent, such failure shall be deemed a denial of said
request. If the request for postponement is granted, the Company may
request additional postponements at any time prior to the date 45 days in
advance of the initial Commitment Reduction Date. Each postponement
requires the consent of all Lenders and Canadian Lenders.
(iii) If the Required Lenders (but not all Lenders and Canadian Lenders)
have agreed to waive any reduction scheduled to occur on a Commitment
Reduction Date under Section 2.03(a) as provided in Section 2.03(b)(i) or
to postpone the initial Commitment Reduction Date as provided in Section
2.03(b)(ii), then the Company (or UMC Canada) may terminate, in whole but
not in part, the Commitment of any Lender or the Canadian Subcommitment of
any Canadian Lender which has refused to grant such waiver or extension (a
"Terminated Lender") upon five (5) Business Days' notice, during the period
commencing on the expiration of the 15 day or 45 day, as applicable, notice
period referred to above and ending, in either case, on the date five (5)
Business Days prior to the date of the scheduled reduction or the initial
Commitment Reduction Date, by giving written notice to the Terminated
Lender and the
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Administrative Agent (or the Canadian Agent) (such notice referred to
herein as a "Notice of Termination"). In order to effect the termination of
the Commitment (or Canadian Subcommitment) of the Terminated Lender, the
Company (or UMC Canada) shall: (1) obtain an agreement with one or more
Lenders (or Canadian Lenders) to increase its respective Commitment (or
Canadian Subcommitment) and/or (2) request any one or more other financial
institutions to become parties to this Agreement (or the Canadian Credit
Agreement) in place of such Terminated Lender; provided, that any such
financial institution is reasonably acceptable to the Administrative Agent
(or the Canadian Agent) and becomes party to this Agreement (or the
Canadian Credit Agreement) by executing an Assignment and Acceptance (or
its equivalent under the Canadian Credit Agreement) (the Lender or other
financial institutions that agree to accept in whole or in part the
Commitment (or Canadian Subcommitment) of the Terminated Lender being
referred to herein as the "Replacement Lender"), such that the aggregate
increased and/or accepted Commitments (or Canadian Subcommitments) of the
Replacement Lender(s) under clauses (1) and (2) equal the Commitment (or
Canadian Subcommitment) of the Terminated Lender. If the Company (or UMC
Canada) is unable to obtain one or more Replacement Lenders to accept the
Commitment (or Canadian Subcommitment) of the Terminated Lender, the
Commitment Reduction Date shall not be postponed. Any assignment to a
Replacement Lender shall be effected pursuant to Section 12.06(b) or
Section 12.03(b) of the Canadian Credit Agreement, as applicable.
(c) OPTIONAL REDUCTION. The Company shall have the right to terminate
or to reduce the Aggregate Commitments at any time or from time to time upon not
less than one (1) Business Day's prior written notice to the Administrative
Agent (which shall promptly notify the Lenders) of each such termination or
reduction, which notice shall specify the effective date thereof and the amount
of any such reduction (which shall not be less than $5,000,000, or any whole
multiple of $1,000,000 in excess thereof). Such notice shall be irrevocable and
effective only upon receipt by the Administrative Agent.
(d) REINSTATEMENT. The Aggregate Commitments once terminated or reduced
may not be reinstated. The amount of the Available U.S. Commitment may increase
or decrease from time to time in accordance with the terms hereof, including,
but not limited to Section 2.09.
SECTION 2.04 FACILITY FEE AND OTHER FEES.
(a) FACILITY FEE. The Company shall pay to the Administrative Agent
for the account of the Lenders a facility fee (the "Facility Fee") in an
aggregate amount equal to the Facility Fee Rate times the average daily
Available U.S. Commitment. The Facility Fee will accrue for the period from and
including the Effective Date to and including the Termination Date, without
regard to the outstanding principal amount of Loans outstanding. Accrued
Facility Fees shall be payable in arrears on each Quarterly Date and on the
Termination Date.
(b) LETTER OF CREDIT FEE. The Company agrees to pay to the
Administrative Agent for the account of the Lenders a quarterly fee for issuing
the Letters of Credit, calculated separately for each Letter of Credit, in an
aggregate amount for each Letter of Credit equal to 1/4 of the product of (i)
the LC Fee Rate, as then in effect, and (ii) the daily average balance during
such quarter of the amount of the Letter of Credit upon which drafts may be
drawn from time to time commencing on the date of
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issuance of such Letter of Credit (or on the date of Initial Funding for Letters
of Credit issued under the Prior Credit Agreement and outstanding on the date of
Initial Funding); provided that each respective Letter of Credit shall bear an
aggregate minimum quarterly fee equal to $350, or such other fee as may be
specifically agreed by the Company and the Administrative Agent in each
respective Letter of Credit Agreement. All fees for all Letters of Credit
(including all fees incurred for any amendments to Letters of Credit) shall be
payable in arrears on each Quarterly Date.
(c) ISSUING FEE. In addition to the fees described in Section 2.04(b), the
Company shall pay to the Administrative Agent for its own account a quarterly
fee for issuing each Letter of Credit, calculated separately for each Letter of
Credit, in an aggregate amount for each Letter of Credit equal to 1/4 of the
product of (i) .125% per annum and (ii) the daily average balance during such
quarter of the amount of the Letter of Credit upon which drafts may be drawn
from time to time commencing on the date of issuance of such Letter of Credit
(or on the date of Initial Funding for Letters of Credit issued under the Prior
Credit Agreement and outstanding on the date of Initial Funding). All fees for
all Letters of Credit (including all fees incurred for any amendments to Letters
of Credit) shall be payable in arrears on each Quarterly Date.
(d) COMPETITIVE BID ADMINISTRATION FEE. Upon delivery of each Competitive
Bid Request to the Administrative Agent, the Company shall pay to the
Administrative Agent, as bid administrator, for its own account, a bid
administration fee of $1,000, which fee shall be due and payable regardless of
whether or not the Company cancels its request or accepts any offers from any
Lender.
SECTION 2.05 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.
SECTION 2.06 SEVERAL OBLIGATIONS. The failure of any Lender to make
any Loan to be made by such Lender or to provide funds for disbursements under
Letters of Credit on the date specified therefor shall not relieve any other
Lender of its obligation to make its Loan or provide such funds on such date,
but no Lender shall be responsible for the failure of any other Lender to make a
Loan to be made by such other Lender or to provide funds to be provided by such
other Lender.
SECTION 2.07 NOTES.
(a) CONVENTIONAL NOTES. The Conventional Loans made by each Lender shall
be evidenced by a single promissory note of the Company in substantially the
form of Exhibit A-1, dated as of the Effective Date or such later date that a
Lender becomes a party hereto, payable to the order of such Lender in a
principal amount equal to the maximum amount of its Commitment as originally in
effect and otherwise duly completed. The date, amount, Type, interest rate and
maturity date of each Conventional Loan made by each Lender, and all payments
made on account of the principal thereof, shall be recorded by such Lender on
its books and, prior to any transfer of the Conventional Loan Note held by it,
endorsed by such Lender on the schedule attached to such Note or any
continuation thereof; provided that the failure of a Lender to make any notation
shall not affect the Company's obligations in respect of such Loan.
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(b) BID RATE NOTES. The Bid Rate Loans made by each Lender shall be
evidenced by a single promissory note of the Company in substantially the form
of Exhibit A-2, dated as of the Effective Date or such later date that a Lender
becomes a party hereto, payable to such Lender and otherwise duly completed.
The date, amount, Type, interest rate and maturity date of each Bid Rate Loan
made by each Lender, and all payments made on account of the principal thereof,
shall be recorded by such Lender on its books and, prior to any transfer of the
Bid Rate Note held by it, endorsed by such Lender on the schedule attached to
such Note or any continuation thereof; provided that the failure of a Lender to
make any notation shall not affect the Company's obligations in respect of such
Loan.
(c) NO RIGHT TO SUBDIVIDE. No Lender shall be entitled to have its
Notes subdivided, by exchange for promissory notes of lesser denominations or
otherwise, except in connection with a permitted assignment of all or any
portion of such Lender's Commitment, Loans and Notes pursuant to Section
12.06(b).
SECTION 2.08 PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. The Company may prepay Conventional Loans
on any Business Day upon notice to the Administrative Agent (which shall
promptly notify the Lenders), which notice (i) shall be given by the Company not
later than 12:00 noon New York time on such Business Day, (ii) shall specify the
amount of the prepayment (which shall be not less than $1,000,000 or the
remaining balance of Base Rate Loans outstanding, if less) and (iii) shall be
irrevocable and effective only upon receipt by the Administrative Agent.
Interest on the principal prepaid, accrued to the prepayment date, shall be paid
on the prepayment date. Any prepayment of any Eurodollar Loans shall be subject
to the provisions of Section 5.05. The Company may not prepay Bid Rate Loans;
provided that the foregoing shall not prevent an acceleration of the maturity of
a Bid Rate Loan upon the occurrence and continuance of an Event of Default.
(b) MANDATORY PREPAYMENT UPON REDUCTION OF COMMITMENT. If, after
giving effect to any termination or reduction of the Aggregate Commitments
pursuant to Section 2.03, the sum of the outstanding aggregate principal amount
of the Loans and the LC Exposure exceeds the Aggregate Commitments, then the
Company shall on the date of such termination or reduction pay or prepay the
amount of such excess for application first, towards reduction of all amounts
previously drawn under Letters of Credit, but not yet funded as a Conventional
Loan pursuant to Section 4.07(b) or reimbursed, second, if necessary, towards
reduction of the outstanding principal balance of the Conventional Loan Notes by
prepaying Base Rate Loans, if any, then outstanding, third, if necessary, toward
a reduction of the outstanding principal balance of the Conventional Loan Notes
by prepaying Eurodollar Loans, if any, then outstanding, fourth, if necessary,
paying such amount to the Administrative Agent as cash collateral for
outstanding Letters of Credit, which amount shall be held by the Administrative
Agent as cash collateral to secure the Company's obligation to reimburse the
Administrative Agent and the Lenders for drawings under the Letters of Credit
and fifth, if necessary, paying such amount to the Administrative Agent as cash
collateral for outstanding Bid Rate Loans, which amount shall be held by the
Administrative Agent as cash collateral to secure the Company's obligation under
such Loans. The Company shall on the date of such termination or reduction also
pay any amounts payable pursuant to Section 5.05 in connection therewith.
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(c) MANDATORY PREPAYMENT UPON REDETERMINATION. Upon any adjustment or
redetermination of the amount of the Borrowing Base in accordance with (i) the
definitions of Designated Contract or Material Subsidiary, (ii) Section 2.09,
(iii) 9.01(e)(ii), or (iv) Section 9.16, if the adjusted or redetermined
Borrowing Base is less than the sum of the aggregate outstanding principal
amount of the Loans, the LC Exposure and the Canadian Indebtedness (a "Borrowing
Base Deficiency"), then the Company shall within 90 days of receipt of written
notice thereof either (i) take such steps as may be approved by the
Administrative Agent to increase the Borrowing Base by an amount equal to or
greater than the amount of such Borrowing Base Deficiency or (ii) prepay the
amount of such Borrowing Base Deficiency for application first, towards
reduction of all amounts previously drawn under Letters of Credit, but not yet
funded as a Conventional Loan pursuant to Section 4.07(b) or reimbursed,
second, if necessary, towards reduction of the outstanding principal balance of
the Conventional Loan Notes and Canadian Indebtedness by prepaying Base Rate
Loans, as defined herein and as defined in the Canadian Credit Agreement, if
any, then outstanding, third, if necessary, by prepaying Bankers' Acceptances
issued and outstanding under the Canadian Credit Agreement, fourth, if
necessary, toward a reduction of the outstanding principal balance of the
Conventional Loan Notes by prepaying Eurodollar Loans, if any, then outstanding,
fifth, if necessary, paying such amount to the Administrative Agent as cash
collateral for outstanding Letters of Credit, which amount shall be held by the
Administrative Agent as cash collateral to secure the Company's obligation to
reimburse the Administrative Agent and the Lenders for drawings under the
Letters of Credit and sixth, if necessary, paying such amount to the
Administrative Agent as cash collateral for outstanding Bid Rate Loans, which
amount shall be held by the Administrative Agent as cash collateral to secure
the Company's obligation under such Loans. The Company shall also pay any
amounts payable pursuant to Section 5.05 in connection therewith.
(d) PREPAYMENT FOLLOWING REALLOCATION. Upon any reallocation of the
Borrowing Base in accordance with Section 2.09, if either (i) the Available U.S.
Commitment is less than the sum of the aggregate outstanding principal amount of
the Loans and the LC Exposure or (ii) the Available Canadian Subcommitment is
less than the Canadian Indebtedness, then in either case, the Company shall
within 90 days of receipt of written notice thereof, prepay the amount of such
excess in a manner consistent with the application order specified in Section
2.08(c).
(e) NO PENALTY OR PREMIUMS. Subject to compensation requirements of
Section 5.05, all prepayments shall be without premium or penalty.
SECTION 2.09 BORROWING BASE.
(a) COMPONENTS AND ALLOCATION.
(i) The Borrowing Base shall be comprised of two components: the North
American Component and the International Component. The North American
Component shall be not less than sixty percent (60%) of the amount of the
Borrowing Base and the International Component shall be not more than forty
percent (40%) of the Borrowing Base. For the period from and including the
Effective Date to but not including the first Redetermination Date, the
amount of the Borrowing Base shall be $275,000,000, representing a North
American Component of $200,000,000 and an International Component of
$75,000,000. The Borrowing Base may not exceed the Aggregate Commitments.
Notwithstanding the foregoing, the International
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Component (and, accordingly, the Borrowing Base) shall be decreased by the
value of the Oil and Gas Properties subject to a Designated Contract
described in Section 8.10 until the earlier of (1) receipt by the
Collateral Agent of the acknowledgments described in Section 8.10 with
respect to such Designated Contract, and (2) the expiration of the 180 day
period described in Section 8.10.
(ii) Subject to the terms of Section 2.09(a)(i), the Borrowing Base shall
be determined in accordance with Sections 2.09(b), (c) and (d) by the
Technical Agents with the approval or deemed approval of the Required
Lenders (provided that any increase in the Borrowing Base shall require the
approval or deemed approval of all the Lenders and the Canadian Lenders).
The Borrowing Base will be redetermined annually in accordance with Section
2.09(b), commencing May 1, 1998; provided that, subject to Section 2.09(e),
if the Borrowing Base Utilization Percentage is greater than fifty percent
(50%) at any time during the 90 day period prior to October 1st of each
year, the Required Lenders may designate in writing that a redetermination
shall occur on the following November 1st. Upon any redetermination of the
Borrowing Base, such redetermination shall remain in effect until the next
successive Redetermination Date.
(iii) Without regard to its constituent components, the Borrowing Base may
be allocated between the Company under this Agreement and UMC Canada under
the Canadian Credit Agreement. The Allocated U.S. Borrowing Base in effect
from time to time shall represent the maximum amount of credit in the form
of Loans and Letters of Credit (subject to the Aggregate Commitments and
the other provisions of this Agreement) that the Lenders will extend to the
Company at any one time prior to the Termination Date. On the Effective
Date, the Allocated Canadian Borrowing Base shall be $17,582,418.00,
resulting in an initial Allocated U.S. Borrowing Base of $257,417,582.00.
(iv) The Company at any time shall have the right to request in writing to
the Administrative Agent, Canadian Agent and the Canadian Lenders that the
Canadian Lenders, in their sole discretion, increase the Allocated Canadian
Borrowing Base; provided that any such increase shall require the approval
of all of the Canadian Lenders; and provided further that the Company may
not make such request more than three (3) times during any twelve month
period. Within ten (10) Business Days of the receipt by the Canadian
Lenders of such request, the Canadian Lenders shall give written notice to
the Company and the Administrative Agent of their approval or disapproval
of such increase. If such increase is approved, each Lender which is also a
Canadian Lender (or who has an Affiliated Canadian Lender) shall have its
pro rata share of the Allocated U.S. Borrowing Base reduced by an amount
equal to its corresponding increase in the Allocated Canadian Borrowing
Base. The revised Allocated U.S. Borrowing Base and Allocated Canadian
Borrowing Base (and, if applicable, Commitment Percentages) shall become
effective upon the distribution by the Administrative Agent to the Company,
all Lenders and all Canadian Lenders of written notice thereof which shall
occur not later than three (3) Business Days after its receipt of the
notice of increase.
(v) The Company at any time shall have the right to request in writing to
the Administrative Agent, the Canadian Agent and the Lenders who are also
Canadian Lenders (or who have
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Affiliated Canadian Lenders) that such Lenders who are also Canadian
Lenders (or who have Affiliated Canadian Lenders), in their sole
discretion, permit the Company to decrease the Allocated Canadian Borrowing
Base; provided that any such change shall require the approval of all of
such Lenders; and provided further that the Company may not make such
request more than three (3) times during any twelve month period. Within
ten (10) Business Days of the receipt by such Lenders of such request, such
Lenders shall give written notice to the Company and the Administrative
Agent of their approval or disapproval of such change. If such decrease is
approved, each such Lender shall have its pro rata share of the Allocated
U.S. Borrowing Base increased by an amount equal to its corresponding
decrease in the Allocated Canadian Borrowing Base. The revised Allocated
U.S. Borrowing Base and Allocated Canadian Borrowing Base (and, if
applicable, Commitment Percentages) shall become effective upon the
distribution by the Administrative Agent to the Company, all Lenders and
all Canadian Lenders of written notice thereof which shall occur not later
than three (3) Business Days after its receipt of the notice of increase.
(vi) Reallocations of the Allocated U.S. Borrowing Base and Allocated
Canadian Borrowing Base may affect the Commitment Percentage set forth on
Annex I, but shall not, without the prior agreement of all the Lenders and
the Company, affect the Global Commitment Percentage.
(b) REDETERMINATION. On or before April 1st of each year (and October
1st, if the Technical Agents have made the election permitted under Section
2.09(a)(ii)), commencing April 1, 1998 (or commencing October 1, 1997, if the
Technical Agents have made the election permitted under Section 2.09(a)(ii)),
the Technical Agents shall propose in writing to the Company, the Lenders and
the Canadian Lenders a new Borrowing Base in accordance with Section 2.09(c)
(assuming receipt by the Technical Agents of the Engineering Reports in a timely
and complete manner). After having received notice of such proposal by the
Technical Agents, each Lender and each Canadian Lender shall have ten (10) days
to agree with such proposal or disagree by proposing an alternate Borrowing
Base. If at the end of ten (10) days, any Lender or Canadian Lender has not
communicated its approval or disapproval, such silence shall be deemed to be an
approval. If, however, within ten (10) days, the Required Lenders have not
approved or deemed to have approved, as aforesaid, the proposed Borrowing Base,
then the Borrowing Base shall be determined in accordance with Section 2.09(d).
After such redetermined Borrowing Base is approved by the Required Lenders or is
otherwise determined as provided in Section 2.09(d), it shall become effective
and applicable to the Company, the Agents, the Lenders and the Canadian Lenders
as of the next succeeding May 1st (or if the election is made under Section
2.09(a)(ii), November 1st).
(c) ENGINEERING REPORTS. Upon receipt of the reports required by
Section 8.05 and such other reports, data, and supplemental information as may,
from time to time, be reasonably requested by the Required Lenders (the
"Engineering Reports"), together with a certificate from the President or chief
financial officer of the Company that, to the best of his knowledge and in all
material respects, (i) the information contained in the Engineering Reports is
true and correct, (ii) the certificate identifies the Properties covered by the
Engineering Reports that have not been previously included in any prior
Engineering Reports, and (iii) no other Oil and Gas Properties have been sold
since the date of the last Borrowing Base determination except as set forth on
an exhibit to the certificate, which certificate shall list all Oil and Gas
Properties sold in compliance with Section 9.16 (or pursuant to a waiver
thereof) and
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in such detail as reasonably required by the Technical Agents, the Technical
Agents will evaluate such information. The Technical Agents, with the approval
or deemed approval of the Required Lenders as set forth in Section 2.09(b), but
subject to the terms of Section 2.09(d), shall redetermine the Borrowing Base
based upon such information and such other information (including, without
limitation, the Indebtedness) as the Technical Agents deem appropriate and
consistent with their normal oil and gas lending criteria as it exists at the
particular time (including, without limitation, the status of title information
with respect to Properties in the Engineering Reports and the existence of any
other Debt including, without limitation, the Debt of UMC Canada under the
Canadian Credit Agreement). Such redetermination shall be accomplished not
later than and effective as of the first (1st) day of each May (or November, if
appropriate pursuant to Section 2.09(a)(ii)) of each calendar year, assuming
that the Company shall have furnished the Engineering Reports in a timely and
complete manner.
(d) CONSENSUS AND FAILURE OF CONSENSUS. Except as hereinafter
provided, the decision of the Required Lenders with respect to any Borrowing
Base determination shall control; however, if the Required Lenders have not
approved or are not deemed to have approved the Borrowing Base as of the date
such a determination is called for in Section 2.09(b), any Lender or Canadian
Lender may submit a proposed amount and the Borrowing Base to be determined
shall be equal to an amount calculated by adding the three (3) highest proposed
Borrowing Base amounts from the Borrowing Base amounts submitted by the Lenders
and the Canadian Lenders, and then dividing such sum by three (3).
Notwithstanding the foregoing, however, any increase in the Borrowing Base shall
require the consent of all the Lenders and the Canadian Lenders.
(e) INTERIM REDETERMINATIONS. The Company may, at its option one time
during a 12 month period, initiate an interim redetermination of the Borrowing
Base. The Required Lenders may, at their option one time during any 12 month
period, initiate an interim redetermination of either the North American
Component or the International Component of the Borrowing Base if, in the
reasonable judgment of the Required Lenders, an event has occurred or
circumstance exists which has or which could reasonably be expected to have a
Material Adverse Effect. Without limitation of such events or circumstances,
the parties agree that any of the following shall constitute events which could
reasonably be expected to have a Material Adverse Effect:
(i) any change in any Governmental Requirement relating to Taxes which
causes United Meridian or any of its Subsidiaries to pay Taxes in
materially greater amounts than it or they were paying prior to the change
in connection with any Designated Contract or their operations thereunder,
including the export of crude oil;
(ii) any permanent condemnation, confiscation or seizure of, or
requisition of title to or use of, by any Governmental Authority of any
Material Subsidiary or any Designated Contract if such action results in
the loss (net of any insurance recovery) of Oil and Gas Properties which
constitute 5% or more of the then current amount of the Borrowing Base;
(iii) any of the Oil and Gas Properties of a Material Subsidiary which
constitute 5% or more of the then current amount of the Borrowing Base
shall suffer any Event of Loss;
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(iv) any provision of any Designated Contract shall be amended, modified
or supplemented if the effect of such actions could reasonably be expected
to have a Material Adverse Effect or any Designated Contract shall be
terminated unless a successor contract has been executed and delivered as
permitted by the terms of Section 9.21(b) and the Company has, or has
caused its Subsidiary to, comply with the terms of Section 8.11(b); or
(v) any Material Subsidiary shall Abandon its interest as a production
sharing contractor under any Designated Contract.
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
SECTION 3.01 REPAYMENT OF LOANS. The Company will pay on the
Termination Date to the Administrative Agent for the account of each Lender the
then-outstanding principal amount of each Conventional Loan made by such Lender.
Notwithstanding the foregoing sentence, each Bid Rate Loan will mature and be
payable in full on the last day of the Interest Period therefor and the Company
agrees to pay to the Administrative Agent for the account of the Lender making
such Bid Rate Loan the amount of such Bid Rate Loan in full on such day.
SECTION 3.02 INTEREST.
(a) The Company will pay to the Administrative Agent for the account
of each Lender interest on the unpaid principal amount of each Loan made by such
Lender for the period commencing on the date of such Loan to but excluding the
date such Loan shall be paid in full, at the following rates per annum:
(i) if such Loan is a Base Rate Loan, the Base Rate (as in effect from
time to time) plus the Applicable Margin for Base Rate Loans, but in no
event to exceed the Highest Lawful Rate;
(ii) if such Loan is a Eurodollar Loan that is a Conventional Loan, for
each Interest Period relating thereto, the Eurodollar Rate for such Loan
plus the Applicable Margin for Eurodollar Loans that are Conventional
Loans, but in no event to exceed the Highest Lawful Rate;
(iii) if such Loan is a Eurodollar Loan that is a Bid Rate Loan, for each
Interest Period relating thereto, the Eurodollar Rate for Eurodollar Loans
plus or minus any margin as may be agreed between the Company and the
Lender making such Bid Rate Loan, but in no event to exceed the Highest
Lawful Rate; and
(iv) if such Loan is an Absolute Rate Loan, for each Interest Period
relating thereto, such rate per annum as may be agreed between the Company
and the Lender making such Bid Rate Loan, but in no event to exceed the
Highest Lawful Rate.
Notwithstanding the foregoing, the Company will pay to the Administrative
Agent for the account of each Lender interest at the applicable Post-Default
Rate on any principal of any Loan made by such Lender, and, to the fullest
extent permitted by law, on any other amount payable by the
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Company or a Guarantor hereunder or under any Security Instrument, that shall
not be paid in full when due (whether at stated maturity, by acceleration or
otherwise), for the period commencing on the due date thereof until the same is
paid in full, but in no event to exceed the Highest Lawful Rate.
(b) Accrued interest on each Base Rate Loan shall be payable quarterly
on each Quarterly Date. Accrued interest on each Eurodollar Loan and Absolute
Rate Loan shall be payable on the last day of the Interest Period therefor and,
if such Interest Period is longer than three months or ninety (90) days, at
three-month or ninety (90) day intervals, as appropriate, following the first
day of such Interest Period. In any event, interest payable at the Post-Default
Rate shall be payable from time to time on demand and interest on any Eurodollar
Loan that is converted into a Base Rate Loan pursuant to Section 5.04 shall be
payable on the date of conversion (but only to the extent so converted).
(c) Promptly after the determination of any interest rate provided for
herein or any change therein, the Administrative Agent shall notify the Company
and the Lenders to which such interest is payable thereof. Upon notice to the
Administrative Agent of the incurrence of Debt pursuant to Section 8.01(g)
and/or any change in the amount of the Indebtedness (including the LC Exposure)
outstanding hereunder or the amount of the Canadian Indebtedness under the
Canadian Credit Agreement, the Administrative Agent shall promptly redetermine
the Borrowing Base Utilization Percentage; and in the event such circumstances
result in a change in the Applicable Margin, the Facility Fee Rate or the LC Fee
Rate, the Administrative Agent shall notify the Lenders and the Company thereof.
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
SECTION 4.01 PAYMENTS. Except to the extent otherwise provided herein,
all payments of principal, interest and other amounts to be made by the Company
under this Agreement, the Notes and other Security Instruments shall be made in
Dollars, in immediately available funds, to the Administrative Agent at account
number 900-9-000002 maintained by the Administrative Agent at the Principal
Office, not later than 1:00 p.m. New York time on the date on which such
payments shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business Day). The
Company shall, subject to Section 4.02, at the time of making each payment under
this Agreement, any Note or any other Security Instrument, specify to the
Administrative Agent the Loans, Letters of Credit or other amounts payable by
the Company hereunder to which such payment is to be applied (and in the event
that it fails to so specify, and such day is not a Quarterly Date or other day
on which a payment of either interest or principal is due, then such payments
shall be applied in the following order: first, to interest accrued on
Conventional Loans maintained as Base Rate Loans, second, any excess to reduce
the aggregate principal amount then outstanding on Conventional Loans maintained
as Base Rate Loans, third, any excess to interest accrued on Conventional Loans
maintained as Eurodollar Loans, and fourth any excess to reduce the aggregate
principal amount then outstanding on Conventional Loans maintained as Eurodollar
Loans; provided that if an Event of Default has occurred and is continuing, the
Administrative Agent may distribute such payment to the Lenders in such manner
as it or the Required Lenders may determine to be appropriate, subject to
Section 4.02). Each payment received by the Administrative Agent under this
Agreement, any Note or any other Security Instrument for the account of a Lender
shall be paid promptly to such Lender, in immediately available funds, for
account of such Lender's Applicable Lending Office for the
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Loan, Letter of Credit or other amount in respect of which such payment is made.
Except as provided in clause (ii) of the provisions of the definition of
Interest Period, if the due date of any payment under this Agreement, any Note
or any other Security Instrument would otherwise fall on a day which is not a
Business Day such date shall be extended to the next succeeding Business Day and
interest shall be payable for any principal so extended for the period of such
extension.
SECTION 4.02 PRO RATA TREATMENT. Except with respect to Bid Rate
Loans made by any Lender or to the extent otherwise provided herein: (a) (i)
each borrowing from the Lenders under Section 2.01 shall be made from the
Lenders in such amounts as may be necessary so that, after giving effect to such
borrowing, the outstanding Conventional Loans shall have been made pro rata by
the Lenders based on their respective Commitment Percentages as then in effect,
(ii) each payment of Facility Fee or other fees under Sections 2.04(a) and (b)
shall be made for the account of the Lenders pro rata according to their
respective Commitment Percentages, and (iii) each termination or reduction of
the amount of the Commitments under Section 2.03 shall be applied to the
Commitments of the Lenders pro rata according to their respective Global
Commitment Percentages (or, if there is a contemporaneous and corresponding
termination or reduction of the amount of the Canadian Subcommitments, such
amounts as may be necessary so that, after giving effect to such reduction, the
Global Commitment Percentages shall have been reduced pro rata); (b) each
payment of principal of Conventional Loans by the Company shall be made for the
account of the Lenders pro rata in accordance with the respective unpaid
principal amount of the Conventional Loans held by the Lenders; (c) each payment
of interest on Conventional Loans by the Company shall be made for the account
of the Lenders pro rata in accordance with the amounts of interest due and
payable on such Conventional Loans to the respective Lenders; and (d) each
reimbursement by the Company of disbursements under Letters of Credit shall be
made for the account of the Lenders pro rata in accordance with the amounts of
reimbursement obligations due and payable on such Letters of Credit to the
respective Lenders. If, on any day on which payments on account of one or more
Bid Rate Loans are due, payments on account of Conventional Loans or on account
of other items otherwise under this Agreement are also due and the Agent has
received insufficient funds to pay all amounts due and owing on such date, then
the Agent shall distribute all funds so received pro rata among the Lenders in
accordance with the unpaid amounts due on such day.
SECTION 4.03 COMPUTATIONS. Interest on Eurodollar Loans and Absolute
Rate Loans shall be computed on the basis of a year of 360 days and actual days
elapsed (including the first day but excluding the last day) occurring in the
period for which such interest is payable (unless such calculation would result
in a rate of interest that would exceed the Highest Lawful Rate for any Lender
in which event such calculation for such Lender shall be computed on the basis
of a year of 365 or 366 days, as the case may be). Interest on Base Rate Loans
and fees shall be computed on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed (including the first day but excluding the
last day) occurring in the period for which payable.
SECTION 4.04 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. Unless the
Administrative Agent shall have been notified by a Lender or the Company prior
to the date on which a payment is scheduled to be made to the Administrative
Agent of (in the case of a Lender) the proceeds of a Loan to be made by it
hereunder or under a Letter of Credit or (in the case of the Company) a payment
to the Administrative Agent for account of one or more of the Lenders hereunder
(such payment being herein
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called a "Required Payment"), which notice shall be effective upon receipt, that
it does not intend to make the Required Payment to the Administrative Agent, the
Administrative Agent may assume that 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. If such Lender or
the Company (as the case may be) has not in fact made the Required Payment to
the Administrative Agent, the recipient(s) of such payment shall, on demand,
repay to the Administrative Agent the amount so made available together with
interest thereon in respect of each day during the period commencing on the date
such amount was so made available by the Administrative Agent until the date the
Administrative Agent recovers such amount at a rate per annum equal to the Base
Rate for such day, but in no event to exceed the Highest Lawful Rate.
SECTION 4.05 SHARING OF PAYMENTS, ETC.
(a) The Company agrees that, in addition to (and without limitation
of) any right of set-off, bankers' lien or counterclaim a Lender may otherwise
have, each Lender shall be entitled (after consultation with the Administrative
Agent), at its option, during the existence of an Event of Default, to offset
balances held by it for account of the Company 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 or under any
other Security Instrument which is not paid when due (regardless of whether such
balances are then due to the Company), in which case such Lender shall promptly
notify the Company and the Administrative Agent thereof, provided that such
Lender's failure to give such notice shall not affect the validity thereof.
(b) If any Lender shall obtain payment of any principal of or interest
on any Loan made by it to the Company under this Agreement or payment of any
reimbursement obligation under a Letter of Credit Agreement through the exercise
of any right of set-off, banker's lien or counterclaim or similar right or
otherwise, and, as a result of such payment, such Lender shall have received a
greater percentage of the principal or interest or reimbursement obligation then
due hereunder or under the respective Letter of Credit Agreement, as the case
may be, by the Company to such Lender than the percentage received by any other
Lenders, such Lender shall promptly purchase from such other Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Loans made by such other Lenders (or in interest due thereon,
as the case may be) or reimbursement obligations under the Letter of Credit
Agreements in such amounts, and make such other adjustments from time to time as
shall be equitable, to the end that all the Lenders shall share the benefit of
such excess payment (net of any expenses which may be incurred by such Lender in
obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal and/or interest on the Loans held by each of the Lenders or pro
rata in accordance with the unpaid reimbursement obligation owed 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. The Company agrees that any Lender
so purchasing a participation (or direct interest) in the Loans made by other
Lenders (or in interest due thereon, as the case may be) or in the reimbursement
obligations owed to the other Lenders may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender were a direct holder of Loans or reimbursement
obligations, as the case may be, in the amount of such participation. Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and
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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 4.05 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this Section 4.05 to
share the benefits of any recovery on such secured claim.
(c) Without limitation of the last sentence of Section 4.02, if an
Event of Default has occurred and is continuing and the Notes have been declared
to be immediately due and payable, the Administrative Agent shall distribute
funds received pro rata among the Lenders in accordance with the respective
unpaid principal amounts of the Loans (whether Conventional Loans or Bid Rate
Loans) held by the Lenders.
SECTION 4.06 ASSUMPTION OF RISKS. The Company assumes all risks of
the acts or omissions of beneficiaries of any of the Letters of Credit with
respect to its use of the Letters of Credit. Except in the case of gross
negligence or willful misconduct on the part of such Person or any of its
employees, neither the Administrative Agent, the Administrative Agent's
correspondents, any other Agent, nor any Lender shall be responsible: (a) for
the validity or genuineness of certificates or other documents, even if such
certificates or other documents should in fact prove to be invalid, fraudulent
or forged; (b) for errors, omissions, interruptions or delays in transmissions
or delivery of any messages by mail, telex, or otherwise, whether or not they be
in code; (c) for errors in translation or for errors in interpretation of
technical terms; or (d) for any other consequences arising from causes beyond
the Administrative Agent's control. In addition, neither the Administrative
Agent, any other Agent nor any Lender shall be responsible for any error,
neglect, or default of any of the Administrative Agent's correspondents which
were chosen in good faith; and none of the above shall affect, impair or prevent
the vesting of any of the Administrative Agent's rights or any Lender's rights
or powers hereunder or under the Letter of Credit Agreements, all of which
rights shall be cumulative. The Administrative Agent and the Administrative
Agent's correspondents may accept certificates or other documents that appear on
their face to be in order, without responsibility for further investigation. In
furtherance and not in limitation of the foregoing provisions, the Company
agrees that any action, inaction or omission taken or not taken by the
Administrative Agent or any correspondent in the absence of gross negligence or
willful misconduct by the Administrative Agent or any correspondent in
connection with any Letter of Credit, or any related drafts, certificates,
documents or instruments, shall be binding on the Company and shall not put the
Administrative Agent or its correspondents or any Lender under any resulting
liability to the Company.
SECTION 4.07 OBLIGATION TO REIMBURSE AND TO PREPAY.
(a) If any draft or claim shall be presented for payment under a
Letter of Credit, after confirming that such draft or claim complies with all
requirements of the relevant Letter of Credit, the Administrative Agent shall
promptly notify the Company and each Lender orally (confirming such notice
promptly in writing) of the date and the amount of the draft or claim presented
for payment, the Business Day on which such draft or claim is to be honored and,
in the case of each Lender, the ratable share of such draft or claim
attributable to such Lender on the basis of its Commitment Percentage then in
effect.
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(b) If a disbursement by the Administrative Agent is made under any
Letter of Credit and no Default under this Agreement shall have occurred and be
continuing, the Company may elect, and if no election is made, the Company shall
be deemed to have elected, to have the amount of such disbursement up to the
amount of the Available U.S. Commitment then available treated as a Conventional
Loan to the Company as provided in Section 2.01(a), subject to the terms and
conditions set forth in this Agreement. With respect to any disbursement under
a Letter of Credit after and during the continuance of a Default, the amount of
such disbursement shall be due and payable immediately and the Company shall pay
to the Administrative Agent, promptly after notice of such disbursement is
received by the Company, in federal or other immediately available funds, the
amount of such disbursement, together with interest on the amount disbursed from
and including the date of disbursement until payment in full of such disbursed
amount at a varying rate per annum equal to (i) the Base Rate (as in effect from
time to time) plus the Applicable Margin for Base Rate Loans (but in no event to
exceed the Highest Lawful Rate) for the first Business Day following the date of
such disbursement and (ii) the Post-Default Rate for Base Rate Loans for the
period from and including the second Business Day following the date of such
disbursement to and including the date of repayment in full of such disbursed
amount.
(c) The Company's obligation to make each such payment shall be
absolute and unconditional and shall not be subject to any defense or be
affected by any right of setoff, counterclaim or recoupment which the Company
may now or hereafter have against any beneficiary of any Letter of Credit, the
Administrative Agent, any other Agent, any Lender or any other Person for any
reason whatsoever (but, without prejudice to any other provisions hereof, any
such payment shall not waive, impair or otherwise adversely affect any claim, if
any, that the Company may have against any beneficiary of a Letter of Credit,
the Administrative Agent, any other Agent, any Lender or any other Person).
(d) If an Event of Default shall have occurred and be continuing, the
Company shall, upon request of the Required Lenders, pay to the Collateral Agent
as cash collateral an amount equal to the LC Exposure. The Company's obligation
to provide such cash collateral shall be absolute and unconditional without
regard to whether any beneficiary of any such Letter of Credit has attempted to
draw down all or a portion of such amount under the terms of a Letter of Credit.
In addition, the Company's obligation shall not be subject to any defense or be
affected by a right of setoff, counterclaim or recoupment which the Company may
now or hereafter have against any such beneficiary, any Agent, any Lender or any
other Person for any reason whatsoever (but, without prejudice to any other
provisions hereof, any such payment shall not waive, impair or otherwise
adversely affect any claim, if any, that the Company may have against any
beneficiary of a Letter of Credit, the Administrative Agent, any other Agent,
any Lender or any other Person). The Company hereby grants to the Collateral
Agent, for the benefit of the Agents and the Lenders, a security interest in all
such cash to secure the LC Exposure and any and all other Indebtedness now or
hereafter owing hereunder. If the Company shall provide cash collateral under
this Section 4.07(a) or shall prepay any Letter of Credit pursuant to Section
2.08 and thereafter either (i) drafts or other demands for payment complying
with the terms of such Letters of Credit are not made prior to the respective
expiration dates thereof, or (ii) such Event of Default shall have been waived
or cured, then the Agents and the Lenders agree that the Collateral Agent is
hereby authorized, without further action by any other Agent or Lender, to
release the Lien in such cash and will
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direct the Collateral Agent to remit to the Company amounts for which the
contingent obligations evidenced by such Letters of Credit have ceased.
SECTION 4.08 OBLIGATIONS FOR LETTERS OF CREDIT.
(a) Immediately, (i) upon issuance of any Letter of Credit by the
Administrative Agent and (ii) effective on the date of the Initial Funding with
respect to Letters of Credit outstanding under the Prior Credit Agreement on the
date of Initial Funding, each Lender shall be deemed to be a participant through
the Administrative Agent in the obligation of the Administrative Agent under
such Letter of Credit. Upon the delivery by such Lender to the Administrative
Agent of funds requested for a disbursement pursuant to Section 4.08(c), such
Lender shall be deemed as having purchased a participating interest in the
Company's reimbursement obligations with respect to such Letter of Credit in an
amount equal to such funds delivered to the Administrative Agent.
(b) Each Lender severally agrees with the Administrative Agent and the
Company that it shall be unconditionally liable to the Administrative Agent,
without regard to the occurrence of any Default or Event of Default, for its
prorata share, based upon its Commitment Percentage, of disbursements under any
Letter of Credit, and agrees to reimburse on demand the Administrative Agent for
its pro rata share of each such disbursement.
(c) The Administrative Agent shall promptly request from each Lender
its ratable share of any disbursement under any Letter of Credit that the
Company has not elected hereunder to treat as a Conventional Loan pursuant to
Section 4.07, which amount shall be made available by each Lender to the
Administrative Agent at the Principal Office in immediately available funds no
later than 2:00 p.m. New York time on the date requested. If such amount due to
the Administrative Agent is made available later than 2:00 p.m. New York time on
the date requested, then such Lender shall pay to the Administrative Agent such
amount with interest thereon in respect of each day during the period commencing
on the date such amount was requested until the date the Administrative Agent
receives such amount at a rate per annum equal to the Base Rate (but not to
exceed the Highest Lawful Rate).
ARTICLE V
YIELD PROTECTION AND ILLEGALITY
SECTION 5.01 ADDITIONAL COSTS.
(a) EURODOLLAR REGULATIONS. The Company shall pay directly to each
Lender such amounts as such Lender may determine to be necessary to compensate
it for any increased costs incurred by the Lender which such Lender determines
are attributable to its making or maintaining 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
being herein called "Additional Costs"), resulting from any Regulatory Change
which: (i) changes the basis of taxation of any amounts payable to such Lender
under this Agreement or its Notes in respect of any of such Loans (other than
franchise taxes, taxes on capital and/or gross receipts or taxes imposed on the
overall net income of such Lender or of its Applicable Lending Office for any of
such Loans by the jurisdiction in which such Lender has its principal office
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or such Applicable Lending Office ("Excluded Taxes")); or (ii) imposes or
modifies any reserve, special deposit, minimum capital, capital ratio or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Lender (including any of such Loans
or any deposits referred to in the definition of "Eurodollar Rate" in Section
1.02 hereof), or any Commitment of such Lender; or (iii) imposes any other
condition affecting this Agreement or its Notes (or any of such extensions of
credit or liabilities) or Commitment.
(b) SUSPENSION OF EURODOLLAR LOANS. If any Lender requests
compensation from the Company under Section 5.01(a), the Company may, by notice
to such Lender (with a copy to the Administrative Agent), suspend the obligation
of such Lender to make additional Loans of the Type with respect to which such
compensation is requested until the Regulatory Change giving rise to such
request ceases to be in effect (in which case the provisions of Section 5.04
shall be applicable). Without limiting the effect of the foregoing provisions
of this Section 5.01(b), in the event that, by reason of any Regulatory Change,
any Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement or
a category of extensions of credit or other assets of such Lender which includes
Eurodollar Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, such Lender may elect
by notice to the Company (with a copy to the Administrative Agent), to suspend
its obligation to make additional Eurodollar Loans until such Regulatory Change
ceases to be in effect (in which case the provisions of Section 5.04 shall be
applicable).
(c) CAPITAL ADEQUACY. Without limiting the effect of Section 5.01(a)
and (b), but without duplication, after any Regulatory Change, the Company shall
pay directly to each Lender such amounts as such Lender may determine to be
necessary to compensate such Lender (or its parent or holding company) for any
costs which it determines are attributable to the maintenance by such Lender (or
its parent or holding company or its Applicable Lending Office) of its capital
in respect of its Commitment, its Note, any Loans and/or any interest held by it
in any Letter of Credit. Such compensation shall 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) to a level below that which such
Lender (or any Applicable Lending Office) could have achieved but for such law,
regulation, interpretation, directive or request.
(d) COMPENSATION PROCEDURE. Each Lender will notify the Administrative
Agent and the Company of any event occurring after the date of this Agreement
which will entitle such Lender to compensation pursuant to this Section 5.01 as
promptly as practicable after it obtains knowledge thereof and determines to
request such compensation. Each Lender will furnish the Administrative Agent and
the Company with a certificate setting forth the basis and amount of each
request by such Lender for compensation under this Section 5.01. Determinations
and allocations by any Lender for purposes of this Section 5.01 of the effect of
any Regulatory Change pursuant to Sections 5.01(a) or (b), or of the effect of
capital maintained pursuant to Section 5.01(c), on its costs or rate of return
of maintaining Loans or issuing or participating in Letters of Credit or its
obligation to make Loans or issue or participate in Letters of Credit, or on
amounts receivable by it in respect of Loans or such obligations,
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and of the additional amounts required to compensate such Lender under this
Section 5.01, shall be conclusive, provided that such determinations and
allocations are made on a reasonable basis.
SECTION 5.02 LIMITATION ON EURODOLLAR LOANS. Notwithstanding any
other provision of this Agreement, if, on or prior to the determination of any
Eurodollar Rate for any Interest Period:
(a) the Administrative 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 1.02 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 Administrative Agent shall determine (which determination
shall be conclusive) that the relevant rates of interest referred to in the
definition of "Eurodollar Rate" in Section 1.02 upon the basis of which the rate
of interest for Eurodollar Loans for such Interest Period is to be determined
are not likely to adequately cover the cost to the Lenders of making or
maintaining Eurodollar Loans;
then the Administrative 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.
SECTION 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, then such Lender shall promptly notify the Company thereof
(with a copy to the Administrative Agent) and such Lender's obligation to make
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
shall be applicable).
SECTION 5.04 BASE RATE LOANS PURSUANT TO SECTIONS 5.01, 5.02 AND 5.03. If
the obligation of any Lender to make Eurodollar Loans shall be suspended
pursuant to Section 5.01, 5.02 or 5.03 ("Affected Loans"), all Affected Loans
which would otherwise be made by such Lender shall be made instead as Base Rate
Loans (and, if an event referred to in Section 5.01(b) or Section 5.03 has
occurred and such Lender so requests by notice to the Company with a copy to the
Administrative Agent, all Affected Loans of such Lender then outstanding shall
be automatically converted into Base Rate Loans on the date specified by such
Lender in such notice). To the extent that Affected Loans are so made as (or
converted into) Base Rate Loans all payments of principal which would otherwise
be applied to such Lender's Affected Loans shall be applied instead to the Loans
so converted.
SECTION 5.05 COMPENSATION.
(a) FUNDING LOSSES. The Company shall pay to the Administrative Agent
for account of each Lender, upon the request of such Lender through the
Administrative 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 which such Lender determines are attributable to:
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(i) any payment, prepayment or conversion of a Eurodollar Loan for any
reason (including, without limitation, the acceleration of the Loans
pursuant to Section 10.01) on a date other than the last day of the
Interest Period for such Loan; or
(ii) any failure by the Company for any reason (including but not limited
to, the failure of any of the conditions precedent specified in Article VI
to be satisfied) to borrow, continue or convert a Eurodollar Loan from such
Lender on the date for such borrowing, continuation or conversion specified
in the relevant notice of borrowing given pursuant to Section 2.02.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (x) the amount of interest
which otherwise would have accrued on the principal amount so paid, prepaid or
converted for the period from the date of such payment, prepayment or conversion
to the last day of the then current Interest Period for such Loan (or, in the
case of a failure to borrow, convert or continue, the Interest Period for such
Loan which would have commenced on the date specified for such borrowing,
conversion or continuation) at the applicable rate of interest for such Loan
provided for herein over (y) the interest component of the amount such Lender
would have bid 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).
(b) COMPENSATION PROCEDURE. Each Lender will notify the Administrative
Agent and the Company of any event occurring after the date of this Agreement
which will entitle such Lender to compensation pursuant to this Section 5.05 as
promptly as practicable after it obtains knowledge thereof and determines to
request such compensation. Each Lender will furnish the Administrative Agent and
the Company with a certificate setting forth the basis and amount of each
request by such Lender for compensation under this Section 5.05. Determinations
shall be conclusive, provided that such determinations are made on a reasonable
basis.
SECTION 5.06 ADDITIONAL COST IN RESPECT OF TAX.
(a) PAYMENTS FEE AND CLEAR. Each payment to be made by the Company
hereunder or in connection herewith to any Agent or Lender or any other Person
shall be made free and clear of and without deduction for or on account of any
Tax unless the Company is required to make such payment subject to the deduction
or withholding of Tax, in which case (except for Excluded Taxes) the sum payable
by the Company in respect of which such deduction or withholding is required to
be made shall be increased to the extent necessary to ensure that, after the
making of such deduction or withholding, such Person receives and retains (free
from any liability in respect of any such deduction or withholding) a net sum
equal to the sum which it would have received and so retained had not such
deduction or withholding been made or required to be made.
(b) OBLIGATION TO INDEMNIFY. If (i) any Agent or Lender is required
by law to make any payment on account of any Tax (except for Excluded Taxes) on
or in relation to any sum received or receivable hereunder by such Agent or
Lender or (ii) any liability in respect of any such payment is asserted,
imposed, levied or assessed against such Agent or Lender, then the Company shall
promptly pay to such Agent or Lender, as the case may be, any additional amounts
necessary to compensate it for
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such payment together with any interest, penalties and expenses payable or
incurred in connection therewith. If an Agent or a Lender has paid over on
account of Tax (other than Excluded Taxes) an amount paid to it by the Company
pursuant to the foregoing indemnification and the amount so paid over is
subsequently refunded to the recipient Agent or Lender, in whole or in part,
then the recipient Agent or Lender shall promptly remit such amount refunded to
the Company.
(c) COMPENSATION PROCEDURE. Any Agent or Lender intending to make a
claim pursuant to this Section 5.06 shall deliver to the Administrative Agent,
reasonably promptly after becoming aware of the circumstances giving rise to the
claim, a certificate to that effect specifying the event by reason of which it
is entitled to make such claim and setting out in reasonable detail the basis
and computation of such claim. The Administrative Agent shall promptly deliver
to the Company a copy of such certificate or its own certificate, as
appropriate.
(d) NOTICE OF CHANGES; PROOF OF PAYMENT. If at any time the Company
is required by law to make any deduction or withholding from any sum payable by
it hereunder or in connection herewith (or if thereafter there is any change in
the rates at which or the manner in which such deductions or withholdings are
calculated), the Company shall promptly notify the Administrative Agent thereof.
If the Company makes any payment hereunder or in connection herewith for which
it is required by law to make any deduction or withholding, it shall pay the
full amount to be deducted or withheld to the relevant taxation or other
authority within the time allowed for such payment under applicable law and
shall deliver to the Administrative Agent within thirty (30) days after it has
made such payment to the applicable authority (i) a receipt issued by such
authority or (ii) other evidence reasonably satisfactory to the Administrative
Agent evidencing the payment to such authority of all amounts so required to be
deducted or withheld from such payment.
SECTION 5.07 AVOIDANCE OF TAXES AND ADDITIONAL COSTS.
(a) CHANGE APPLICABLE FUNDING OFFICE. If a Lender makes any claim
under Section 5.01 or Section 5.06 in respect of Additional Costs of Taxes, such
Lender shall be obligated to use reasonable efforts to designate a different
Applicable Lending Office for the Commitment or the Loans of such Lender
affected by such event if such designation will avoid the need for, or reduce
the amount of, such compensation or the imposition of any Taxes and will not, in
the sole opinion of such Lender, be disadvantageous to such Lender; provided
that such Lender shall have no obligation to so designate an Applicable Lending
Office located in the United States.
(b) REPLACEMENT. If any Lender claims (i) payment of Additional
Costs, (ii) the inability to make or maintain the Eurodollar Rate for its Loans
pursuant to Section 5.01 or 5.03 (when such inability is not then being claimed
by substantially all of the Lenders) or (iii) payment of any Taxes pursuant to
Section 5.06, then the Company shall have the right, upon payment of such
requested Additional Costs or Taxes, if applicable, to (i) prepay the Loans made
by such Lender and terminate the Commitment of such Lender on a non pro rata
basis or (ii) subject to the approval of the Administrative Agent (such approval
not to be unreasonably withheld or delayed), find one or more Persons willing to
assume the Loans, Commitment and other obligations of such Lender and replace
such Lender pursuant to an Assignment and Acceptance. Any such assumption shall
be effected pursuant to Section 12.06(b).
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The Company shall not, however, be entitled to replace any Lender if an event
which with notice or lapse of time, or both, would constitute a Default or an
Event of Default exists at the time.
SECTION 5.08 LENDER TAX REPRESENTATION. Each Lender represents that
it is either (a) a corporation organized under the laws of the United States of
America or any state thereof or (b) entitled to complete exemption from United
States withholding tax imposed on or with respect to any payments, including
fees, to be made to it pursuant to this Agreement, the Notes and the other
Security Instruments (i) under an applicable provision of a tax convention to
which the United States of America is a party or (ii) because it is acting
through a branch, agency or office in the United States of America and any
payment to be received by it hereunder is effectively connected with a trade or
business in the United States of America. Each Lender that is not a corporation
organized under the laws of the United States of America or any state thereof
agrees to provide to the Company and the Administrative Agent on the Effective
Date, or on the date of its delivery of the Assignment and Acceptance pursuant
to which it becomes a Lender, and at such other times as required by United
States law, two accurate and complete original signed copies of either Internal
Revenue Service Form 4224 (or successor form) certifying that all payments to be
made to it hereunder will be effectively connected to a United States trade or
business or Internal Revenue Service Form 1001 (or successor form) certifying
that it is entitled to the benefit of a tax convention to which the United
States of America is a party which completely exempts from United States
withholding tax all payments to be made to it hereunder. If a Lender
determines, as a result of any Regulatory Change or other change in its
circumstances, that it is unable to submit any form or certificate that it is
obligated to submit pursuant to this Section 5.08, or that it is required to
withdraw or cancel any such form or certificate previously submitted, it shall
promptly notify the Company and the Administrative Agent of such fact.
SECTION 5.09 LIMITATION ON RIGHT TO COMPENSATION. Any demand for
compensation pursuant to Article V (other than Section 5.06) must be made on or
before twelve (12) months after the Lender incurs the expense, cost or economic
loss referred to or such Lender shall be deemed to have waived the right to such
compensation. Any demand for compensation pursuant to Section 5.06 must be made
on or before twenty-four (24) months after the Lender incurs the expense, cost
or economic loss referred to or such Lender shall be deemed to have waived the
right to such compensation.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01 INITIAL LOAN. The obligation of the Lenders to make the
initial Loans hereunder (which initial Loans will include the purchase, renewal
and rearrangement of the Debt outstanding under the Prior Credit Agreement and
the assumption of the obligations under all Letters of Credit outstanding under
the Prior Credit Agreement) is subject to the receipt by the Administrative
Agent of the following documents and satisfaction of the other conditions
provided in this Section 6.01, each of which shall be satisfactory to the
Administrative Agent in form and substance unless otherwise indicated:
(a) A certificate of the Secretary or Assistant Secretary of the
Company setting forth (i) that the resolutions of its board of directors
attached to such certificate are in full force and effect with respect to the
authorization of the execution, delivery and performance of the obligations
contained in the Notes, this Agreement and the other Security Instruments to
which it is a party, (ii) that the officers
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of the Company specified in such Secretary's Certificate are authorized to sign
this Agreement, the Notes, and the other Security Instruments to which it is a
party and who, until replaced by another officer or officers duly authorized for
that purpose, will act as the Company's representative(s) for the purposes of
signing documents and giving notices and other communications in connection with
this Agreement, the other Security Instruments to which it is a party and the
transactions contemplated hereby and thereby, (iii) specimen signatures of the
officers so authorized, and (iv) that attached to such certificate are true and
complete copies of the certificate of incorporation and the bylaws of the
Company. The Agents and the Lenders may conclusively rely on such certificate
until the Administrative Agent receives notice in writing from the Company to
the contrary.
(b) A certificate of the Secretary or Assistant Secretary of each
Guarantor setting forth (i) that the resolutions of its board of directors
attached to such certificate are in full force and effect with respect to the
authorization of the execution, delivery and performance of the obligations
contained in the Security Instruments to which it is a party, (ii) that the
officers of such Guarantor specified in such Secretary's Certificate are
authorized to sign the Security Instruments to which it is a party and who,
until replaced by another officer or officers duly authorized for that purpose,
will act as its representative(s) for the purposes of signing documents and
giving notices and other communications in connection with such Security
Instruments and the transactions contemplated thereby, (iii) specimen signatures
of the officers so authorized, and (iv) that attached to such certificate are
true and complete copies of the articles or certificate of incorporation and the
bylaws of such Guarantor. The Agents and the Lenders may conclusively rely on
such certificate until the Administrative Agent receives notice in writing from
such Guarantor to the contrary.
(c) The Notes, the Guaranty Agreements, the IFC Assignment Documents
and the other Security Instruments listed on Exhibit F, each duly completed and
executed.
(d) The following legal opinions:
(i) An opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel to
United Meridian and its Subsidiaries, including the Company, substantially
in the form of Exhibit B; and
(ii) An opinion of Gide Loyrette Nouel, special Cote d'Ivoire counsel to
UMC-CI-11, addressing such matters as may be reasonably requested by the
Administrative Agent.
(e) the Initial Reserve Reports.
(f) Pro forma financial projections for United Meridian and its
Consolidated Subsidiaries for the period of three (3) consecutive fiscal years,
commencing on January 1, 1997, specifying in reasonable detail projected gross
and net revenue from the sale of Hydrocarbons and expected capital expenditures
for each fiscal year occurring during such three year period.
(g) The Administrative Agent shall have received one or more
certificates or policies of insurance reflecting that United Meridian and its
Subsidiaries, including the Company, are carrying insurance consistent with the
requirements of this Agreement as to amounts, coverages and provisions.
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(h) All conditions to closing the Canadian Credit Agreement shall have
been satisfied or waived contemporaneously with the Initial Funding.
(i) Evidence of termination of other existing credit facilities and
repayment of Debt thereunder, other than (i) the Havre Credit Facility and (ii)
the IFC Loan.
(j) Each of the Designated Contracts in effect as of the Effective
Date shall have been executed and delivered by the parties signatory thereto and
no conditions precedent to its effectiveness shall exist which have not either
been satisfied or waived; and the Company shall have delivered to the
Administrative Agent a copy of each, certified by the Company as true, complete
and correct.
(k) Evidence that the process agent for United Meridian, the Company
and the other Guarantors under Section 12.13 and the Security Instruments have
accepted such appointment.
(l) Such other documents as the Administrative Agent or Co-Agents or
special counsel to the Administrative Agent may reasonably request.
SECTION 6.02 SUBSEQUENT LOANS AND LETTERS OF CREDIT.
(a) GENERALLY. The obligation of the Lenders to make Loans to the
Company upon the occasion of each borrowing hereunder (other than Base Rate
Loans which are made pursuant to the terms hereof solely to replace existing
Eurodollar Loans which have matured in the normal course on the last day of an
Interest Period therefor or pursuant to Section 5.03) or of the Administrative
Agent to issue Letters of Credit is subject to the further conditions precedent
that, as of the date of such Loans and after giving effect thereto: (i) no
Default or Event of Default shall have occurred and be continuing; (ii) no event
or circumstance having a Material Adverse Effect shall have occurred since the
date of the Financial Statements, and (iii) the representations and warranties
made by the Company and the Guarantors in Article VII and the Security
Instruments shall be true in all material respects on and as of the date of the
making of such Loans or the issuance of such Letter of Credit with the same
force and effect as if made on and as of such date and following such new
borrowing or issuance, except as such represen tations and warranties are
modified to give effect to transactions expressly permitted hereby.
(b) CERTIFICATION AS TO REPRESENTATIONS. Each notice of borrowing,
conversion or continuation and selection of an Interest Period (other than Base
Rate Loans which are made pursuant to the terms hereof solely to replace
existing Eurodollar Loans which have matured in the normal course on the last
day of an Interest Period therefor or pursuant to Section 5.03) or request for
the issuance, renewal, extension or reissuance of a Letter of Credit by the
Company hereunder shall constitute a certification by United Meridian and the
Company to the effect set forth in Section 6.02(a) (both as of the date of such
notice and, unless United Meridian or the Company otherwise notifies the
Administrative Agent prior to the date of or immediately following such
borrowing or such issuance, as of the date of such borrowing or issuance, as the
case may be).
(c) SECRETARY'S CERTIFICATE REGARDING CORPORATE AUTHORIZATION. In
addition to the other terms and conditions set forth in this Agreement, the
obligation of the Lenders to make Loans to the Company or of the Administrative
Agent to issue Letters of Credit, if, after giving effect thereto, the
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aggregate principal amount of all the Loans then outstanding, the LC Exposure
and the Canadian Indebtedness would be in excess of $250,000,000, is subject to
the further condition precedent that United Meridian deliver a Secretary's
certificate, in form and substance reasonably satisfactory to the Administrative
Agent, relating to the authorization of the execution, delivery and performance
of the obligations contained in the Notes, this Agreement and the other Security
Instruments to which it is a party with respect to borrowings in excess of
$250,000,000.
(d) CERTIFICATE REGARDING INCURRENCE OF DEBT UNDER INDENTURE. The
obligation of the Lenders to make Loans to the Company or of the Administrative
Agent to issue Letters of Credit, if, after giving effect thereto, the aggregate
principal amount of all the Loans then outstanding, the LC Exposure and the
Canadian Indebtedness would be in excess of $250,000,000, is subject to the
further condition precedent that United Meridian deliver a certificate from an
authorized officer, in form and substance reasonably satisfactory to the
Administrative Agent, certifying that, as of the date of incurrence, United
Meridian is permitted to incur such Indebtedness or Canadian Indebtedness under
the Indenture and setting forth in reasonable detail calculations to support the
certification.
SECTION 6.03 CONDITIONS RELATING TO LETTERS OF CREDIT. In addition
to the satisfaction of all other conditions precedent set forth in this Article
VI, the issuance, renewal, extension or reissuance of the Letters of Credit
referred to in Section 2.01(b) is subject to the following conditions precedent:
(a) At least one (1) Business Day prior to the date of the issuance,
renewal, extension or reissuance of each Letter of Credit, the Administrative
Agent shall have received a written request for a Letter of Credit as described
in Section 2.02.
(b) The Company shall have duly and validly executed and delivered to
the Administrative Agent a Letter of Credit Agreement pertaining to the Letter
of Credit.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
United Meridian and the Company represent and warrant to the Agents and the
Lenders as follows:
SECTION 7.01 CORPORATE EXISTENCE. The Company, each Guarantor, UMC
Canada and each Material Subsidiary: (a) is duly organized and validly existing
under the laws of the jurisdiction of its formation (or, if appropriate, the
laws of the jurisdiction under which it is continued); (b) has all requi site
power, and has all material governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business as now being
conducted; and (c) is qualified to do business in all jurisdictions in which the
nature of the business conducted by it makes such qualification necessary and
where failure so to qualify would have a Material Adverse Effect.
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SECTION 7.02 FINANCIAL CONDITION.
(a) The audited consolidated balance sheet of United Meridian and its
Consolidated Subsidiaries as at December 31, 1996, and the related audited
consolidated statements of income, changes in stockholders' equity and cash
flows of United Meridian and its Consolidated Subsidiaries for the fiscal period
ended on said date, with the opinion thereon of Arthur Andersen & Co.,
heretofore furnished to each of the Lenders, fairly present in all material
respects the consolidated financial condition of United Meridian and its
Consolidated Subsidiaries and the consolidated results of their operations as at
said date and for the period stated, all in accordance with generally accepted
accounting principles and practices applied on a consistent basis.
(b) The audited consolidated balance sheet of the Company and its
Consolidated Subsidiaries as at December 31, 1996, and the related audited
consolidated statements of income, changes in stockholders' equity and cash
flows of the Company and its Consolidated Subsidiaries for the fiscal period
ended on said date, with the opinion thereon of Arthur Andersen & Co., upon
being furnished to each of the Lenders, will fairly present in all material
respects the consolidated financial condition of the Company and its
Consolidated Subsidiaries and the consolidated results of their operations as
at said date and for the period stated, all in accordance with generally
accepted accounting principles and practices applied on a consistent basis.
(c) United Meridian and its Subsidiaries on a consolidated basis, as
of December 31, 1996, had no material contingent liabilities, liabilities for
taxes, Liens, 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 their respective financial statements as at said
respective date or otherwise contemplated by this Agreement. Since December 31,
1996, there has been no change or event which has had or could reasonably be
expected to have a Material Adverse Effect.
SECTION 7.03 LITIGATION. Except as disclosed on Schedule 7.03, there
are no legal or arbitral proceedings or any proceedings by or before any
Governmental Authority, now pending or (to the knowledge of the Company and
United Meridian) threatened against United Meridian or any of its Subsidiaries,
including the Company, or against any of their respective Property or the
Designated Contracts to which such Person is a party which, if adversely
determined, could have a Material Adverse Effect.
SECTION 7.04 NO BREACH. The execution and delivery by United Meridian and
its Subsidiaries, including the Company, of this Agreement, the Notes, the other
Security Instruments or the Designated Contracts to which such Person is a
party, the consummation of the transactions herein or therein contemplated, and
the compliance with the terms and provisions hereof will not (a) conflict with
or result in a breach of, or require any consent under (i) the respective
charter or by-laws of such Person, or (ii) any applicable law or regulation, or
any order, writ, injunction or decree of any court or other Governmental
Authority, or any agreement or instrument to which any such Person is a party or
by which it is bound or to which it is subject, in each case in such manner as
could reasonably be expected to have a Material Adverse Effect; or (b)
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien upon any of the revenues or Property of such
Person, in each case in such manner as could reasonably be expected to have a
Material Adverse Effect.
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SECTION 7.05 CORPORATE ACTION. Each of the Company and the Guarantors has
all necessary corporate power and authority to execute, deliver and perform its
respective obligations under this Agreement, the Notes and the Security
Instruments and Designated Contracts to which it is a party; and the execution,
delivery and performance by each of the Company and the Guarantors of this
Agreement, the Notes and the Security Instruments and Designated Contracts to
which such Person is a party have been duly authorized by all necessary
corporate action on its part. This Agreement, the Notes and the Security
Instruments constitute the legal, valid and binding obligation of each of the
Company and the Guarantors party thereto, enforceable against the Company and
the Guarantors in accordance with their terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights and general principles of equity.
SECTION 7.06 APPROVALS. Other than consents heretofore obtained and
consents described in Section 7.21(b) and Section 8.10, no authorizations,
approvals or consents of, and no filings or registrations with, any Governmental
Authority are necessary for the execution, delivery or performance by the
Company or any Guarantor of this Agreement, the Notes, or the Security
Instruments to which it is a party or for the validity or enforceability
thereof. It is understood that continued performance by United Meridian and its
Subsidiaries, including the Company, of this Agreement and the other Security
Instruments to which such Persons are a party will require various filings, such
as filings related to environmental matters, ERISA matters, Taxes and
intellectual property, filings required to maintain corporate and similar
standing and existence, filings pursuant to the Uniform Commercial Code and
other security filings and recordings, filings required by the SEC, routine
filings in the ordinary course of business, and filings required in connection
with the exercise by the Lenders and the Agents of remedies in connection with
the Security Instruments.
SECTION 7.07 USE OF LOANS. The proceeds of the Loans shall be used
by the Company for general corporate purposes of the Company and its
Subsidiaries, including without limitation, the acquisition of Oil and Gas
Properties and Persons owning Oil and Gas Properties. Neither United Meridian
nor any of its Subsidiaries, including the Company, 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 within the meaning of Regulation G, T, U or X and no part of the proceeds
of any Loan hereunder will be used to buy or carry any margin stock.
SECTION 7.08 ERISA. Except as set out in Schedule 7.08, each of
United Meridian and the ERISA Affiliates (a) have fulfilled its respective
obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan, (b) are in compliance, with respect to each Plan, in all
material respects with the presently applicable provisions of ERISA and the
Code, and (c) have not incurred any liability to the PBGC or any Plan or
Multiemployer Plan. Except as set out in Schedule 7.08, United Meridian and its
Subsidiaries, including the Company, have no ERISA Affiliates.
SECTION 7.09 TAXES. Each of United Meridian and its Subsidiaries,
including the Company, has filed all United States Federal income tax returns
and all other material tax returns which are required to be filed by it and has
paid all taxes due pursuant to such returns or pursuant to any assessment
received by it, except for such taxes as are being contested in good faith by
appropriate proceedings and for which adequate reserves are being maintained.
The charges, accruals and reserves on the books of
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United Meridian and its Subsidiaries, including the Company, in respect of taxes
and other governmental charges are, in the opinion of United Meridian, adequate.
SECTION 7.10 INSURANCE. United Meridian has, and has caused all its
Subsidiaries to, have (a) all insurance policies sufficient for the compliance
by each of them with all material Governmental Requirements, and (b) insurance
coverage in at least such amounts and against such risks (including public
liability) that are usually insured against by companies similarly situated
engaged in the same or a similar business for the assets and operations of
United Meridian and its Subsidiaries, including the Company.
SECTION 7.11 TITLES, ETC. United Meridian and its Subsidiaries,
including the Company, own the material Oil and Gas Properties included in the
Borrowing Base, free and clear of all Liens except Liens permitted under Section
9.02. Other than Liens permitted under Section 9.02, United Meridian (directly
or indirectly through the Company and its other Subsidiaries) will own in the
aggregate, in all material respects, the net interests in production
attributable to the wells and units evaluated in the Initial Reserve Reports,
including ownership through UMC-CI-11 of an approximately 25% production sharing
contractor's interest in the UMC-CI-11 PSC, and ownership through UMC-EG-B of an
approximately 25% production sharing contractor's interest in the UMC-EG-B PSC.
The ownership of such Properties shall not in the aggregate in any material
respect obligate United Meridian and its Subsidiaries to bear the costs and
expenses relating to the maintenance, development and operations of such
Properties in an amount materially in excess of the working interest of such
Properties set forth in the Initial Reserve Reports. United Meridian has, or
has caused its Subsidiaries to, pay all royalties payable under the Hydrocarbon
Interests to which it is operator, except those contested in accordance with the
terms of the applicable joint operating agreement or otherwise contested in good
faith by appropriate proceedings. Upon delivery of each Reserve Report
furnished to the Lenders pursuant to Sections 8.05(a) or (b), the statements
made in the preceding sentences of this Section 7.11 shall be true with respect
to such Reserve Reports. All information contained in the Initial Reserve
Reports is true and correct in all material respects as of the date thereof and
as of the date of the Initial Funding.
SECTION 7.12 NO MATERIAL MISSTATEMENTS. At the time delivery is made, no
information, exhibit or report furnished to any Agent or Lender by United
Meridian or any of its Subsidiaries in connection with the negotiation of this
Agreement or any Security Instrument contained any material misstatement of fact
or omitted to state a material fact or any fact necessary to make the statement
contained therein not materially misleading. Notwithstanding the foregoing, the
financial statements described in Section 7.02 and Section 8.01 shall be subject
to the standards set forth in Section 7.02.
SECTION 7.13 INVESTMENT COMPANY ACT. Neither United Meridian nor any
of its Subsidiaries, including the Company, is an "investment company" or a
company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 7.14 PUBLIC UTILITY HOLDING COMPANY ACT. Neither United
Meridian nor any of its Subsidiaries, including the Company, is a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," or a
"public utility" within the meaning of the Public Utility Holding Company Act of
1935, as amended.
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SECTION 7.15 SUBSIDIARIES AND PARTNERSHIPS. Except as shown in
Exhibit D, United Meridian has no Subsidiaries; and except as shown in Exhibit
D, the Company has no Subsidiaries. Except as indicated on Exhibit D, United
Meridian owns 100% of all of the issued and outstanding shares of each class of
stock issued by each of its Subsidiaries. United Meridian and its Subsidiaries
have no interest in any partnerships other than Tax Partnerships and the
partnerships identified in Exhibit E.
SECTION 7.16 LOCATION OF BUSINESS AND OFFICES. The principal place
of business and chief executive offices of United Meridian and each its
Subsidiaries, including the Company, are located at either the address stated on
the signature page of this Agreement or on Exhibit D.
SECTION 7.17 RATE FILINGS. To the best of the Company's knowledge, (a)
neither the Company nor any of its Subsidiaries have violated any provisions of
The Natural Gas Act or any other Federal or State law or any of the regulations
thereunder, including those of any Governmental Authority having jurisdiction
over the Oil and Gas Properties of the Company or such Subsidiary, which
violation could reasonably be expected to have a Material Adverse Effect; and
(b) the Company and its Subsidiaries have made all necessary rate filings,
certificate applications, well category filings, interim collection filings and
notices, and any other filings or certifications, and have received all
necessary regulatory authorizations (including without limitation necessary
authorizations, if any, with respect to any processing arrangements conducted by
any one of them or others respecting said Oil and Gas Properties or production
therefrom) required under said laws and regulations with respect to all of the
Oil and Gas Properties or production therefrom so as not to have a Material
Adverse Effect. To the best of the Company's knowledge, said material rate
filings, certificate applications, well category filings, interim collection
filings and notices, and other filings and certifications contain no untrue
statements of material facts nor do they omit any statements of material facts
necessary in said filings.
SECTION 7.18 ENVIRONMENTAL MATTERS. Except as provided in Schedule 7.18
or as would not have a Material Adverse Effect (or with respect to (c), (d), and
(e) below, where the failure to take such actions would not have such a Material
Adverse Effect):
(a) Neither any Property of United Meridian and its Subsidiaries,
including the Company, nor the operations conducted thereon violate any
Environmental Laws or order of any court or Governmental Authority with respect
to Environmental Laws;
(b) Without limitation of Section 7.18(a), no Property of United
Meridian and its Subsidiaries, including the Company, nor the operations
conducted thereon (including operations by any prior owner or operator of such
Property), are in violation of or subject to any existing, pending or (to the
knowledge of either United Meridian or the Company) threatened action, suit,
investigation, inquiry or proceeding by or before any court or Governmental
Authority with respect to Environmental Laws or to any remedial obligations
under Environmental Laws;
(c) All notices, permits, licenses or similar authorizations, if any,
required to be obtained or filed in connection with the operation or use of any
and all Property of United Meridian and its Subsidiaries, including without
limitation past or present treatment, storage, disposal or release of a
hazardous substance or solid waste into the environment, have been duly obtained
or filed;
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(d) All hazardous substances generated at any and all Property of
United Meridian and its Subsidiaries, including the Company, have in the past
been transported, treated and disposed of only by carriers maintaining valid
permits under RCRA and any other Environmental Law and only at treatment,
storage and disposal facilities maintaining valid permits under RCRA and any
other Environmental Law, which carriers and facilities (to the best knowledge of
United Meridian and the Company) have been and are operating in compliance with
such permits;
(e) United Meridian and its Subsidiaries, including the Company, have
taken all steps necessary to determine and have determined that no hazardous
substances or solid waste have been disposed of or otherwise released and there
has been no threatened release of any hazardous substances on or to any Property
of United Meridian and its Subsidiaries, including the Company, except in
compliance with Environmental Laws; and
(f) United Meridian and its Subsidiaries, including the Company, have
no material liability in connection with any release or threatened release of
any hazardous substance or solid waste into the environment.
(g) To the extent applicable, United Meridian and its Subsidiaries,
including the Company, have complied with all financial responsibility, spill
prevention facility design, operation and equipment requirements imposed by OPA
or will comply with such requirements scheduled to be imposed by OPA in the
future during the term of this Agreement; and United Meridian has no reason to
believe that either it or its Subsidiaries will not be able to maintain
compliance with all applicable OPA requirements during the term of this
Agreement.
SECTION 7.19 DEFAULTS. United Meridian and its Subsidiaries,
including the Company, are not in default and no event or circumstance has
occurred which, but for the passage of time or the giving of notice, or both,
would constitute a default under any agreement or other instrument to which
either United Meridian or any of its Subsidiaries, including the Company, is a
party or by which it is bound in any manner that could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default hereunder has
occurred and is continuing.
SECTION 7.20 COMPLIANCE WITH THE LAW. United Meridian and its
Subsidiaries, including the Company, have not violated any Governmental
Requirement or failed to obtain any license, permit, franchise or other
governmental authorization necessary for the ownership of any of their
respective Properties or the conduct of their respective business which
violation or failure could reasonably be expected to have a Material Adverse
Effect.
SECTION 7.21 DESIGNATED CONTRACTS.
(a) The Administrative Agent has been provided with a true and correct
copy of each Designated Contract as in effect on the Effective Date. Except as
permitted pursuant to Section 9.21(b), none of the Designated Contracts has been
terminated, amended, modified or supplemented and each is valid, binding and
enforceable against United Meridian and its Subsidiaries to the extent such
Person is a party thereto, except as may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors' rights and
general principles of equity. All conditions precedent to the
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obligations of the respective parties under the Designated Contracts
constituting such as of the Effective Date will have been satisfied or waived on
the Effective Date except for such conditions precedent which need not be
satisfied until a later time; and United Meridian and the Company have no
reason to believe that any such condition precedent cannot be satisfied at or
prior to the appropriate time. To the best knowledge of United Meridian and the
Company: (i) all representations, warranties and other factual statements made
by each party to a Designated Contract are true and correct in all material
respects, (ii) no default under any Designated Contract has occurred and is
continuing which default could reasonably be expected to have a Material Adverse
Effect, and (iii) each Designated Contract is valid, binding and enforceable
against the parties thereto other than United Meridian and its Subsidiaries,
except as may be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights and general principles of equity.
(b) United Meridian and its Material Subsidiaries which are parties to
the Designated Contracts have obtained all consents from Governmental
Authorities necessary to perform its respective obligations under the Designated
Contract to which such Person is a party, except where the failure to obtain
such consents could not reasonably be expected to have a Material Adverse
Effect.
(c) United Meridian and its Subsidiaries which are parties to the
Designated Contracts have the right to grant a Lien on their respective
interests in the Designated Contracts to which such Person is a party and each
such Person has granted a Lien to the Collateral Agent, for the benefit of the
Agents and the Lenders, on its interests in such Designated Contracts and its
right to receive proceeds thereunder. Subject to the terms of the Security
Instruments, the Collateral Agent may enforce the remedies of the Agents and the
Lenders contained in the Security Instruments against such collateral.
ARTICLE VIII
AFFIRMATIVE COVENANTS
United Meridian and the Company agree that, so long as any of the
Commitments are in effect and until payment in full of all Loans hereunder, all
interest thereon and all other amounts payable by the Company or any Guarantor
hereunder or any Security Instrument:
SECTION 8.01 FINANCIAL STATEMENTS. The Company shall deliver, and
shall cause UMC Canada to, cause to be delivered, 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 fiscal quarterly periods of each fiscal year of each
of United Meridian, the Company and UMC Canada, consolidated statements of
income (including cost summaries of general and administrative expenses in
detail satisfactory to the Administrative Agent), changes in stockholders'
equity and cash flows of United Meridian and its Consolidated Subsidiaries, the
Company and its Consolidated Subsidiaries and UMC Canada and its Consolidated
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 sheets as at the end of such period, and commencing October 1, 1996,
setting forth in each case in comparative form the corresponding figures for the
corresponding period in the preceding fiscal year, accompanied by the
certificates of the respective senior financial officers of United Meridian, the
Company and UMC Canada, which certificates shall respectively state that said
financial statements
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fairly present, in all material respects, the respective consolidated financial
conditions and results of operations of United Meridian, the Company and UMC
Canada and their respective Consolidated Subsidiaries in accordance with
generally accepted accounting principles, consistently applied, as at the end
of, and for, such period (subject to the absence of footnotes and normal year-
end audit adjustments).
(b) As soon as available and in any event within 120 days after the
end of each fiscal year of United Meridian, the Company and UMC Canada,
consolidated statements of income, changes in stockholders' equity and cash
flows of United Meridian and its Consolidated Subsidiaries, the Company and its
Consolidated Subsidiaries and UMC Canada and its Consolidated Subsidiaries for
such year and the related consolidated balance sheets as at the end of such
year, and commencing December 31, 1996, setting forth in each case in
comparative form the corresponding figures for the preceding fiscal year, and
accompanied by the opinion thereon of independent certified public accountants
of recognized national standing, which opinion shall state that said financial
statements fairly present, in all material respects, the respective
consolidated financial condition and results of operations of United Meridian,
the Company and UMC Canada and their respective Consolidated Subsidiaries as at
the end of, and for, such fiscal year.
(c) Promptly upon their becoming available, copies of all registration
statements and regular periodic reports, if any, which United Meridian or any of
its Subsidiaries shall have filed with the SEC or any national securities
exchange.
(d) As soon as possible, and in any event within ten (10) days after
United Meridian knows that any of the events or conditions specified below with
respect to any Plan or Multiemployer Plan have occurred or exist, a statement
signed by a senior financial officer of United Meridian setting forth details
respecting such event or condition and the action, if any, which United Meridian
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 PBGC by United Meridian
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 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 shall be a reportable event regardless of the
issuance of any waivers in accordance with Section 412(d) of the Code);
(ii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan;
(iii) the institution by 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 United Meridian or any ERISA Affiliate of a notice
from a Multiemployer Plan that such action has been taken by PBGC with
respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal by United Meridian or any ERISA
Affiliate under Section 4201 or 4204 of ERISA from a Multiemployer Plan, or
the receipt by United Meridian
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or any ERISA Affiliate of notice from a Multiemployer Plan that 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; and
(v) the institution of a proceeding by a fiduciary of any Multiemployer
Plan against United Meridian or any ERISA Affiliate to enforce Section 515
of ERISA, which proceeding is not dismissed within 30 days.
(e) As soon as available and in any event within 60 days after the end
of each fiscal quarterly period of each fiscal year of United Meridian, for such
quarterly period, the detailed monthly financial reports of United Meridian and
its Consolidated Subsidiaries, containing production, revenue and cost
information reports for such quarterly period with respect to the Oil and Gas
Properties owned by the Company and its Subsidiaries, which report shall be in
such form as may be accepted by the Administrative Agent and the Co-Agents from
time to time.
(f) Promptly after United Meridian or the Company knows that a Default
or Event of Default has occurred and is continuing, a notice of such Default or
Event of Default describing the same in reasonable detail and what action, if
any, either United Meridian or the Company intends to take in response thereto.
(g) At the time of, or promptly after, the issuance of any letter of
credit by a third party pursuant to Section 9.01(h), written notice of such
event describing the amount of Debt incurred, the expiry date of such letter of
credit or guarantee, and such other information as the Administrative Agent may
reasonably request.
(h) Promptly upon their becoming available, copies of all material
notices or material documents received by United Meridian or any of its
Subsidiaries pursuant to any Designated Contract.
(i) Promptly after United Meridian or any of its Subsidiaries is aware
of any event of force majeure, Event of Loss or other event, circumstance or
condition materially and adversely affecting the Oil and Gas Properties of any
Material Subsidiary, notice of such event, circumstance or condition.
(j) Promptly after United Meridian or any of its Subsidiaries is aware
that any Security Instrument, after delivery thereof, has for any reason, except
to the extent permitted by the terms of this Agreement or thereof, ceased to be
in full force and effect and valid, binding and enforceable in accordance with
its terms (subject to customary exceptions therefrom), or ceased to create a
valid and perfected Lien of the priority required by this Agreement or thereby,
notice of such event or condition.
(k) From time to time such other information regarding the business,
affairs or financial condition of United Meridian and its Subsidiaries,
including the Company, as any Lender or the Administrative Agent may reasonably
request.
United Meridian and the Company shall furnish to each Lender, at the time it
furnishes each set of financial statements pursuant to Section 8.01(a) or (b), a
certificate of a senior financial officer of United Meridian: (i) to the effect
that no Default or Event of Default has occurred and is continuing (or, if any
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Default or Event of Default has occurred and is continuing, describing the same
in reasonable detail and what action, if any, United Meridian and/or the Company
intends to take in response thereto); and (ii) setting forth in reasonable
detail the computations necessary to determine whether United Meridian is in
compliance with Sections 9.01(h), 9.03(c), 9.04, 9.05, 9.12, 9.16(b) and 9.19 as
of the end of the respective fiscal quarter or fiscal year.
SECTION 8.02 LITIGATION. The Company shall, and shall cause UMC Canada
to, promptly give to the Administrative Agent notice of all legal or arbitral
proceedings, and of all proceedings before any Governmental Authority, affecting
United Meridian or any of its Subsidiaries, including the Company, or any
Designated Contract, except proceedings which could not reasonably be expected
to have a Material Adverse Effect.
SECTION 8.03 CORPORATE EXISTENCE, ETC.
(a) Except as permitted by Section 9.08, the Company and United
Meridian shall, and shall cause each of its Subsidiaries to: (i) preserve and
maintain its corporate existence and all of its material rights, privileges and
franchises; (ii) comply with the requirements of all applicable laws, rules,
regulations and orders of Governmental Authorities if failure to comply with
such requirements could reasonably be expected to have a Material Adverse
Effect; (iii) 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; (iv) permit representatives of any Lender or the Administrative
Agent, during normal business hours, to examine, copy and make extracts from its
books and records, inspect its Properties, and discuss its business and affairs
with its officers, all to the extent reasonably requested by such Lender or the
Administrative Agent (as the case may be); and (v) keep insured by financially
sound and reputable insurers all Property of a character usually insured by
corporations engaged in the same or similar business similarly situated against
loss or damage of the kinds and in the amounts customarily insured against by
such corporations and carry such other insurance as is usually carried by such
corporations.
(b) The Company and United Meridian shall, and shall cause each of its
Subsidiaries to (i) do or cause to be done all things reasonably necessary to
preserve and keep in good repair, working order and efficiency (ordinary wear
and tear excepted) all of the Oil and Gas Properties owned by the Company or any
Subsidiary of the Company including, without limitation, all equipment,
machinery and facilities, and (ii) make all the reasonably necessary repairs,
renewals and replacements so that at all times the state and condition of the
Oil and Gas Properties owned by United Meridian and its Subsidiaries, including
the Company, will be fully preserved and maintained, except to the extent a
portion of such Oil and Gas Properties is no longer capable of producing
Hydrocarbons in economically reasonable amounts, as determined by United
Meridian in its sole judgment.
(c) United Meridian and its Subsidiaries, including the Company, will
promptly pay and discharge or cause to be paid and discharged all delay rentals,
royalties, expenses and indebtedness accruing under, and perform or cause to be
performed each and every act, matter or thing required by, each and all of the
assignments, deeds, leases, sub-leases, contracts and agreements affecting their
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interests in their Oil and Gas Properties and will do all other things necessary
to keep unimpaired the Company's or any Subsidiary of the Company's rights with
respect thereto and prevent any forfeiture thereof or a default thereunder,
except (i) to the extent a portion of such Oil and Gas Properties is no longer
capable of producing Hydrocarbons in economically reasonable amounts as
determined by United Meridian in its sole judgment, (ii) for dispositions of Oil
and Gas Properties permitted by Section 9.16, and (iii) if such failure to
comply could not reasonably be expected to have a Material Adverse Effect.
(d) United Meridian and its Subsidiaries, including the Company, will
operate their Oil and Gas Properties or cause or use commercially reasonably
efforts to cause such Oil and Gas Properties to be operated in a careful and
efficient manner in accordance with the practices of the industry and in
compliance with all applicable contracts and agreements and in compliance in all
material respects with all Governmental Requirements, except where the failure
to do so could reasonably be expected to have a Material Adverse Effect.
(e) United Meridian will, and will cause its Subsidiaries, including
the Company, to, maintain accounting procedures, books and records to permit the
preparation of financial statements of United Meridian and its Subsidiaries in
accordance with generally accepted accounting principles.
(f) United Meridian or any of its Subsidiaries, including the Company,
may upon thirty (30) days' prior notice to the Administrative Agent change its
principal place of business and chief executive offices from that listed on
Exhibit D.
SECTION 8.04 ENVIRONMENTAL MATTERS. United Meridian shall, and shall
cause each of its Subsidiaries, including the Company, to promptly notify the
Administrative Agent and the Lenders in writing of any existing, pending or
threatened action, investigation or inquiry by any Governmental Authority (of
which United Meridian or any of its Subsidiaries has actual knowledge) in
connection with any Environmental Laws, excluding routine testing and corrective
action, which would involve a violation of any Environmental Law or remedial
obligation (individually or in the aggregate) sufficient to have a Material
Adverse Effect.
SECTION 8.05 ENGINEERING REPORTS.
(a) On or before March 15 of each year commencing March 15, 1998, the
Company shall furnish to the Technical Agents and the Lenders a report in form
and substance reasonably satisfactory to the Technical Agents, prepared by an
independent petroleum consultant(s) acceptable to the Technical Agents, which
report shall evaluate as of January 1 of such year those Oil and Gas Properties
of the Company, UMC Canada, UMC-CI-11, UMC-EG-B and the other Material
Subsidiaries whose Properties the Company desires to have included in the
Borrowing Base and comprising not less than 80% of the value of (i) the Oil and
Gas Properties comprising the North American Component and (ii) the Oil and Gas
Properties comprising the International Component, and which shall, together
with any other information reasonably requested by the Required Lenders, set
forth the proved oil and gas reserves attributable to such Properties together
with a projection of the rate of production and future net income with respect
thereto as of such date, based upon the pricing assumptions provided by the
Technical Agents. Such report shall be accompanied with an engineering report
prepared by the chief engineer of the Company, in form and substance reasonably
satisfactory to the Technical Agents (such report of an
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independent consultant and report of the chief engineer collectively being
referred to as the "Reserve Report"), which report of the chief engineer shall
evaluate as of January 1 of such year the remaining Oil and Gas Properties
included in the Borrowing Base in the same manner and format as the report of
the independent petroleum consultants.
(b) On or before September 15 of each year commencing September 15, 1998
(unless the November, 1997 redetermination has been elected pursuant to Section
2.09(a)(ii), in which case, commencing September 15, 1997), the Company shall
furnish to the Technical Agents and the Lenders a report in form and substance
reasonably satisfactory to the Technical Agents prepared either by an
independent petroleum consultant(s) acceptable to the Technical Agents or by the
chief engineer of the Company (who shall certify such report to be true and
accurate and to have been prepared in accordance with the procedures used in the
immediately preceding Reserve Report), which shall further evaluate the Oil and
Gas Properties evaluated in the immediately preceding Reserve Report, and which
shall, together with any other information reasonably requested by the Required
Lenders, set forth the proved oil and gas reserves attributable to such
Properties as of the immediately preceding July 1, together with a projection of
the rate of production and net future income with respect thereto as of such
date, based upon the pricing assumptions provided by the Technical Agents.
(c) With the delivery of the reports required in Section 8.05(a) and
(b), the Company shall provide to the Lenders a statement reflecting any
material changes in the net revenue interest of each well or lease as reflected
in the Reserve Report delivered for the prior period, after giving effect to all
encumbrances listed therein from the net revenue interests as reflected in such
report, along with an explanation as to any material discrepancies between the
two net revenue interest disclosures. At the time of delivery of each such
report, the Company shall be deemed to have made the representations and
warranties with respect thereto required by Section 7.11.
SECTION 8.06 MATERIAL SUBSIDIARIES.
(a) If any Subsidiary (whether now existing or hereafter formed or
acquired) of United Meridian which is organized under the laws of the United
States or any state thereof shall become a Material Subsidiary, then (i) such
Subsidiary shall execute and deliver to the Administrative Agent a Guaranty
Agreement and (ii) United Meridian shall pledge or cause to be pledged to the
Collateral Agent 100% of the capital stock of such Subsidiary and shall execute
and deliver or cause to be executed and delivered pledge agreements, stock
powers and other instruments to effect such pledge. Each Guaranty Agreement
shall, if appropriate, be limited as necessary in order to allow compliance with
Section 10.12 of the Indenture.
(b) If any Subsidiary (whether now existing or hereafter formed or
acquired) of United Meridian which is not organized under the laws of the United
States or any state thereof shall become a Material Subsidiary, then United
Meridian shall pledge or cause to be pledged to the Collateral Agent the maximum
percentage of the capital stock of such Subsidiary which may be pledged to the
Collateral Agent without constituting an investment of earnings in U.S. property
under Section 956 (or any successor provision) of the Code that would trigger an
increase in the gross income of United Meridian pursuant to Section 951 (or any
successor provision) of the Code or such lesser percentage as may be acceptable
to the Administrative Agent and Co-Agents in their sole discretion. United
Meridian shall
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or shall cause to be executed and delivered pledge agreements, stock powers and
other instruments to effect such pledge.
SECTION 8.07 STOCK OF SUBSIDIARIES. Except as provided in Section 9.08
and Exhibit D, United Meridian will at all times own all issued and outstanding
shares of all classes of stock of its Subsidiaries as listed on Exhibit D and
the Company will at all times own all issued and outstanding shares of all
classes of stock of its Subsidiaries listed on Exhibit D.
SECTION 8.08 FURTHER ASSURANCES. United Meridian shall, and shall
cause its Subsidiaries to, cure promptly any defects in the creation and
issuance of the Notes and the execution and delivery of the Security
Instruments, including this Agreement. United Meridian and its Subsidiaries,
including the Company, will at their expense promptly execute and deliver to the
Administrative Agent upon request all such other and further documents,
agreements and instruments (a) in compliance with or accomplishment of the
covenants and agreements of the Guarantors and the Company in the Security
Instruments, including this Agreement, (b) to further evidence and more fully
describe the collateral intended as security for the Notes, (c) to correct any
omissions in the Security Instruments, or more fully state the security
obligations set out herein or in any of the Security Instruments, (d) to
perfect, protect or preserve any Liens created pursuant to any of the Security
Instruments, or (e) to make any recordings, to file any notices, or obtain any
consents, all as may be necessary or appropriate in connection therewith.
SECTION 8.09 ADDITIONAL SECURITY INSTRUMENTS. If the Borrowing Base
Utilization Percentage exceeds eighty percent (80%) for any period of 90
consecutive days, calculated as of the last day of any month, then the Company
shall, and shall cause its Subsidiaries owning Oil and Gas Properties in North
America to, give to the Collateral Agent or its designee, for the benefit of the
Agents and the Lenders, Liens on its and its Subsidiaries' North American Oil
and Gas Properties having not less than eighty percent (80%) of the SEC Value of
the North American Component as reflected in the most recent Reserve Report;
provided that the Liens on the Properties of UMC Canada shall secure only the
Canadian Indebtedness.
SECTION 8.10 INTERNATIONAL COMPONENT. United Meridian and the Company
shall use good faith and commercially reasonable efforts to accomplish the
following within 180 days of the Effective Date:
(a) cause the Governments of each of The Republic of Equatorial Guinea
and The Republic of Cote d'Ivoire, to acknowledge the Liens and related rights
granted in favor of the Collateral Agent, for the benefit of the Agents and the
Lenders on the relevant Designated Contracts; and
(b) cause Mobil Equatorial Guinea Inc. to acknowledge the Liens and
related rights granted in favor of the Collateral Agent, for the benefit of the
Agents and the Lenders, on the Designated Contracts to which Mobil Equatorial
Guinea Inc. is a party.
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SECTION 8.11 DESIGNATED CONTRACTS.
(a) United Meridian shall, and shall cause each of its Subsidiaries
which is a party to such Designated Contract to perform and observe all of the
covenants and obligations of such Person under the Designated Contracts to which
it is a party, except to the extent such failure could not reasonably be
expected to have a Material Adverse Effect. Upon any amendment, modification,
supplement or waiver of a Designated Contract permitted by the terms of Section
9.21, the Company shall, or cause its Subsidiary signatory thereto, to provide
the Administrative Agent a true and correct copy of such amendment,
modification, supplement or waiver.
(b) If any agreement which is not a Designated Contract on the
Effective Date (whether currently existing or hereafter executed) becomes a
Designated Contract, United Meridian shall, or shall cause the Subsidiary
signatory to such Designated Contract to, deliver a true and complete copy of
such new Designated Contract to the Administrative Agent. United Meridian
shall, and shall cause its Subsidiaries which are a party to such Designated
Contract to, grant to the Collateral Agent Liens on such Designated Contract to
secure the Indebtedness and the Canadian Indebtedness, and shall take such
actions as may be reasonably requested by the Administrative Agent to perfect
such Liens under applicable law.
SECTION 8.12 NORTH AMERICAN EXPENDITURES. If at any time during any
fiscal year, the Borrowing Base Utilization Percentage exceeds 50%, then the
Company shall deliver to the Administrative Agent reasonably satisfactory
evidence that it has spent, or has caused its Subsidiaries having Oil and Gas
Properties within the geographical boundaries of North America to spend (or has
budgeted, or caused to be budgeted) during such fiscal year an aggregate
amount of not less than $50,000,000 on capital expenditures (including
exploration and development costs and acquisitions of Oil and Gas Properties
within the geographical boundaries of North America or Persons owning Oil and
Gas Properties located within the geographical boundaries of North America) in
connection with its Oil and Gas Properties located within the geographical
boundaries of North America. The Company agrees to spend amounts budgeted under
this Section 8.12 until such time as it and/or its Subsidiaries have made the
required expenditures hereunder.
ARTICLE IX
NEGATIVE COVENANTS
United Meridian and the Company agree that, so long as any of the
Commitments are in effect and until payment in full of all Loans hereunder, all
interest thereon and all other amounts payable by the Company or any Guarantor
hereunder or any Security Instrument:
SECTION 9.01 DEBT. United Meridian will not and will not permit any
of its Subsidiaries, including the Company, to incur, create, assume or suffer
to exist any Debt, except:
(a) the Indebtedness and the Canadian Indebtedness and any guarantees
thereof;
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(b) Debt of United Meridian and its Subsidiaries, including the
Company, existing on the date of this Agreement which is reflected in the
Financial Statements or is disclosed in Schedule 9.01, and any renewals,
refinancings and extensions thereof;
(c) Debt created under leases which, in accordance with generally
accepted accounting principles in effect on the date of this Agreement, have
been recorded or should have been recorded as capital leases, in an aggregate
amount not to exceed $10,000,000 at any one time outstanding; provided that UMC
Canada may not incur, create, assume or suffer to exist any Debt under this
Section 9.01(c) in an aggregate amount in excess of $2,000,000 at any one time
outstanding;
(d) Debt of any Subsidiary of the Company which is not a Material
Subsidiary, on terms approved by the Administrative Agent and the Co-Agents
(which approval shall not be unreasonably withheld), which Debt is Non-recourse
(except to the extent permitted in Section 9.01(m)) to United Meridian and its
Subsidiaries, except to the stock (or other ownership interest) of the
Subsidiary owing such Debt and to the Property of such Subsidiary, provided that
such Property is not included in the most recent calculation of the Borrowing
Base;
(e) (i) Subordinated Debt incurred pursuant to the Indenture and any
refinancings permitted by Section 9.20(a) of this Agreement or a consent
thereunder; provided that in no event may the aggregate principal amount of all
Subordinated Debt exceed $150,000,000 at any one time outstanding without the
consent of all of the Lenders and Canadian Lenders, and (ii) other Subordinated
Debt that is issued on terms reasonably satisfactory to each of the
Administrative Agent and the Co-Agents with respect to maturity, interest rate,
covenants and subordination language and any refinancings thereof permitted by
Section 9.20(a) of this Agreement or a consent thereunder, provided that in
connection with the issuance of any such Subordinated Debt under this clause
(ii), the Borrowing Base is redetermined;
(f) Without limitation of Section 9.01(h), Debt of United Meridian or
any of its Subsidiaries, including the Company, created, incurred or assumed
after the date hereof; provided that the aggregate outstanding principal amount
of such Debt shall not exceed $10,000,000 at any one time outstanding;
(g) Debt owed by United Meridian or any of its Subsidiaries to United
Meridian or any of its Subsidiaries to the extent permitted by Sections 9.03;
provided such Debt is on terms (including, without limitation, subordination
provisions) reasonably satisfactory to the Administrative Agent (which approval
shall not be unreasonably withheld);
(h) Without limitation of Section 9.01(f), Debt under or attributable
to letters of credit not issued pursuant to this Agreement in an amount not to
exceed $5,000,000 in the aggregate at any one time outstanding; provided that
the aggregate fees associated with having such letters of credit issued on
behalf of the Company or its Subsidiaries are less than the fees specified in
Section 2.04 for the issuance of Letters of Credit in the same amounts;
(i) Debt, on terms approved by the Administrative Agent and the Co-
Agents (which approval shall not be unreasonably withheld), incurred by
partnerships, of which the Company or any Subsidiary is a general partner and
which Debt is Non-recourse to the Company or such Subsidiary for
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the payment thereof (including no recourse to the Company's or such Subsidiary's
interest in such partnership);
(j) Debt under the Havre Credit Facility;
(k) Debt not to exceed $20,000,000 in the aggregate at any one time
outstanding under guarantees or other similar surety obligations with respect to
Debt owed by the Government of Equatorial Guinea or any Person exercising rights
of a sovereign on its behalf;
(l) Debt not to exceed $10,000,000 in the aggregate at any one time
outstanding under completion guarantees, performance guarantees or other similar
surety obligations with respect to Debt related to the proposed Abidjan LPG
plant;
(m) Without limitation of Section 9.01(l), Debt not to exceed
$10,000,000 in the aggregate at any one time outstanding under completion
guarantees, performance guarantees or other similar surety obligations with
respect to Debt that is either (1) Debt described in Section 9.01(d) or (2) Debt
of Persons who are not Subsidiaries of United Meridian which is Non-recourse to
United Meridian and its Subsidiaries and any of their Property except to the
stock (or other ownership interest) of the Person owing such Debt; and
(n) Endorsements of checks and other instruments in the ordinary course
of business for purposes of collection.
SECTION 9.02 LIENS. United Meridian will not and will not permit any
of its Subsidiaries, including the Company to create, incur, assume or permit to
exist any Lien on any of its Properties (now owned or hereafter acquired),
except:
(a) Liens securing the payment of any Indebtedness or the Canadian
Indebtedness and any guarantees thereof;
(b) Excepted Liens;
(c) Liens existing on Property owned by United Meridian or any of its
Subsidiaries, including the Company, on the date of this Agreement which have
been disclosed to the Lenders in Schedule 9.02, and any renewals and extensions
thereof;
(d) Liens securing Debt permitted by Section 9.01(c), provided that
such Liens attach only to the Property subject to such lease;
(e) Liens securing Debt permitted by Section 9.01(d);
(f) Liens securing Debt permitted by Section 9.01(i), provided that
such Liens attach only to Property of the partnership incurring such Debt;
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(g) Liens to secure the Debt permitted by Section 9.01(j) on any
Property owned by Havre and on the Company's ownership interest in Havre, and
encumbrances under gas gathering agreements caused by the dedication by the
Company to Havre of the Company's Oil and Gas Properties located adjacent to the
gas gathering system owned by Havre; and
(h) Liens securing Debt permitted by Sections 9.01(k), (l) and (m).
SECTION 9.03 INVESTMENTS, LOANS AND ADVANCES. United Meridian will
not and will not permit any of its Subsidiaries, including the Company, to make
or permit to remain outstanding any loans or advances to or investments in any
Person, except that the foregoing restriction shall not apply to:
(a) investments, loans or advances reflected in the Financial Statements
or which are disclosed to the Lenders in Schedule 9.03;
(b) investments, loans or advances by United Meridian or by any of its
Subsidiaries to or in United Meridian or any of its Subsidiaries whose Oil and
Gas Properties are included in the North American Component of the most recent
Borrowing Base;
(c) (i) investments by the Company or any of its Subsidiaries in
additional Oil and Gas Properties and gas gathering systems related thereto and
other investments made in the ordinary course of, and which are or become
customary in, the oil and gas business as a means of actively exploiting,
exploring for, acquiring, developing, processing, gathering, storing, marketing
or transporting oil and gas; (ii) investments, loans or advances in or to
Subsidiaries or other Affiliates of the Company for the investment by such
Persons in Properties of the types described in clause (c)(i) above (whether now
owned or hereafter acquired or developed) located in jurisdictions outside of
North America; provided that such investments, loans or advances under this
clause (ii) shall not exceed $150,000,000 annually, net of cash received during
such period as a return of capital or return on investment from any such
investment, loan or advance previously made, in the aggregate for each nation;
and (iii) investments in unrelated development activities or businesses in
countries in which any of its Subsidiaries has Oil and Gas Properties; provided
that the aggregate amount of such investments do not exceed $10,000,000, net of
cash received during such period as a return of capital or return on investment
from any such investment, loan or advance previously made, in the aggregate
during any twelve month period;
(d) routine advances by United Meridian or any of its Subsidiaries to
or on behalf of United Meridian or any of its Subsidiaries in the ordinary
course of business for general and administrative expenses;
(e) routine operating expenses advanced by United Meridian or any of
its Subsidiaries as operator in the ordinary course of business for other
working interest owners under operating agree ments, which do not exceed
$10,000,000 in the aggregate outstanding at any one time to all Persons
combined;
(f) investments required to satisfy obligations under any Plans;
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(g) accounts receivable of United Meridian or any of its Subsidiaries,
including the Company, arising out of the sale of Hydrocarbons and other assets
or services in the ordinary course of business;
(h) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof, in each case
maturing within one year from the date of creation thereof; and repurchase
agreements with respect to such types of securities contracted with a Person
having a net worth of not less than $500,000,000 (as of the date of such
Person's most recent financial reports);
(i) commercial paper rated in the highest grade by Standard & Poor's
Rating Group or Moody's Investors Service, Inc.;
(j) demand deposits and certificates of deposit maturing within one
year from the date of acquisition thereof with any Lender or any office located
in the United States of any bank or trust company which is organized under the
laws of the United States or any state thereof and which has capital, surplus
and undivided profits aggregating at least $500,000,000 (as of the date of such
bank or trust company's most recent financial reports);
(k) routine advances or loans to employees of United Meridian or any
of its Subsidiaries, including the Company, not to exceed $200,000 in the
aggregate at any one time;
(l) deposit accounts maintained in the ordinary course of business by
a Subsidiary of the Company maturing within one year from the date of creation
thereof with any bank or trust company organized in a country in which such
Subsidiary is then doing business or in which it owns Property;
(m) investments, loans or advances in an aggregate amount not to
exceed $20,000,000, net of cash received during such period as a return of
capital or return on investment from any such investment, loan or advance
previously made, to the Government of Equatorial Guinea or any Governmental
Authority thereof;
(n) investments, loans or advances in the proposed Abidjan LPG plant
or any Person that directly or indirectly control such plant in an aggregate
amount not to exceed $15,000,000, net of cash received during such period as a
return of capital or return on investment, loan or advance from any such
investment previously made; and
(o) investments in any interest rate swap or foreign currency exchange,
rate cap, rate floor, rate collar, forward agreement or other exchange or rate
protection agreements or any option with respect to any such transaction and any
commodity price swap agreement, cap, floor, collar, exchange transaction,
forward agreement or other exchange or protection agreement relating to
Hydrocarbons or any option with respect to any such transaction by United
Meridian or any of its Subsidiaries under hedging agreements entered into in the
ordinary course of their business for the purposes of protecting against
fluctuations in interest rates, oil and gas prices or foreign currency exchange
rates.
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SECTION 9.04 DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS AND TAX PAYMENTS.
(a) Except with prior approval of the Required Lenders, United
Meridian will not declare or pay any dividend, purchase, redeem or otherwise
acquire for value any of its stock now or hereafter outstanding, return any
capital to its stockholders, or make any distribution of its assets to its
stockholders as such, or permit any of its Subsidiaries to purchase or otherwise
acquire for value any stock of United Meridian, except United Meridian may, so
long as no Default or Event of Default has occurred and is continuing: (i)
declare and deliver stock dividends; (ii) redeem or repurchase stock with the
proceeds received from the issuance of new shares of any class of stock within
the 12 month period prior to such redemption or repurchase; provided that the
aggregate amount redeemed or repurchased during such 12 month period does not
exceed $100,000,000; and (iii) declare and pay cash dividends, and if, but only
if, the 12 month redemption/repurchase period allowed in Section 9.04(a)(ii) has
expired, redeem or repurchase stock in either case in an aggregate amount not to
exceed $25,000,000 plus 50% of the net income (after deduction of any net
losses) of United Meridian and its Consolidated Subsidiaries generated after
December 31, 1996; provided that no Borrowing Base Deficiency exists either
immediately before declaration of such dividend and after payment of such
dividend or immediately after any such stock redemption or repurchase.
(b) Except with prior approval of the Required Lenders, the Company
will not declare or pay any dividend, purchase, redeem or otherwise acquire for
value any of its stock now or hereafter outstanding, return any capital to its
stockholders or make any distribution of its assets to its stockholders as such
or pay any Tax Payments to United Meridian, except that the Company may, so long
as no Default or Event of Default has occurred and is continuing: (i) declare
and deliver stock dividends; (ii) redeem or repurchase stock with the proceeds
received from the issue of new shares; (iii) declare and pay cash dividends to
permit the payment of interest and principal on Debt permitted in Section 9.01;
(iv) pay Tax Payments to United Meridian; and (v) declare and pay cash dividends
to United Meridian; provided that such dividends to United Meridian do not
exceed $25,000,000 plus 50% of the net income (after deduction of any net
losses) of United Meridian and its Consolidated Subsidiaries generated after
December 31, 1996, and provided further that no Borrowing Base Deficiency exists
immediately before declaration of such dividend and after payment of such
dividend.
SECTION 9.05 LEVERAGE RATIO. United Meridian will not at any time
permit the Leverage Ratio to be greater than sixty percent (60%).
SECTION 9.06 NATURE OF BUSINESS. United Meridian and the Company
will not, and will not permit any of their respective existing Subsidiaries to,
make any material change in the character of its business as carried on at the
date hereof.
SECTION 9.07 LIMITATION ON OPERATING LEASES. United Meridian will
not, and will not permit any of its Subsidiaries, including the Company to,
create, incur, assume or suffer to exist any obligation for the payment of rent
or hire of Property of any kind whatsoever (real or personal), under leases or
lease agreements (other than leases or lease agreements which constitute Debt or
oil and gas leases) which would cause (i) the aggregate amount of all payments
made by United Meridian and its Subsidiaries, other than UMC Canada and its
Subsidiaries (in each case, determined on a consolidated basis), pursuant to
such leases or lease agreements to exceed $15,000,000 in any period of twelve
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consecutive calendar months or (ii) the aggregate amount of all payments made by
UMC Canada and its Subsidiaries (determined on a consolidated basis) pursuant
to such leases or lease agreements to exceed $2,000,000 in any period of twelve
consecutive calendar months.
SECTION 9.08 MERGERS, ETC. United Meridian will not, and will not
permit any of its Subsidiaries, including the Company and UMC Canada, to (a)
merge into or with or consolidate with, any other Person, (b) sell, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions), all or any substantial part of its Property or assets to any
other Person, or (c) dissolve or take other similar actions; provided that if
United Meridian or the Company gives prior written notice to the Administrative
Agent, and no Default or Event of Default has occurred and is continuing or will
result from the action proposed to be taken, then: any Subsidiary of the Company
(other than UMC Canada) may (i) merge or consolidate with the Company or with
any other Subsidiary of the Company, (ii) sell, lease or otherwise dispose of
(at fair market value) all or any substantial part of its Property or assets to
the Company or to any other Subsidiary of the Company, or (iii) dissolve or take
other similar actions.
SECTION 9.09 PROCEEDS OF NOTES. The Company will not permit the
proceeds of the Notes to be used for any purpose other than those permitted by
Section 7.07.
SECTION 9.10 ERISA COMPLIANCE. United Meridian will not at any time
permit any Plan maintained by it or any of its Subsidiaries to:
(a) engage in any "prohibited transaction" as such term is defined in
Section 4975 of the Code;
(b) except as provided in Schedule 9.10, incur any "accumulated
funding deficiency" as such term is defined in Section 302 of ERISA; or
(c) terminate any such Plan in a manner which could result in the
imposition of a Lien on the Property of United Meridian or any of its
Subsidiaries, including the Company, pursuant to Section 4068 of ERISA.
SECTION 9.11 SALE OR DISCOUNT OF RECEIVABLES. Except for receivables
obtained by the Company out of the ordinary course of its business, United
Meridian and its Subsidiaries, including the Company, will not discount or sell
(with or without recourse) any of its notes receivable or accounts receivable
except for settlement of joint interest billing accounts (other than with
respect to Subsidiaries) in the normal course of business.
SECTION 9.12 TANGIBLE NET WORTH OF UNITED MERIDIAN. On and after the
Initial Funding, United Meridian will not permit its Consolidated Tangible Net
Worth to be less than $345,000,000 plus the amount equal to fifty percent (50%)
of the net proceeds of any sale or other issuance of any equity security by
United Meridian at any time, plus the amount equal to 50% of its positive net
income for the period from January 1, 1997 to the date of such determination,
taken as a single accounting period.
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SECTION 9.13 TRANSACTIONS WITH AFFILIATES. United Meridian and its
Subsidiaries, including the Company, shall not enter into any transaction,
including without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate (other than United Meridian,
the Company, UMC Canada or a Guarantor) unless such transactions are in the
ordinary course of United Meridian's or its Subsidiary's business and are upon
fair and reasonable terms no less favorable to United Meridian or such
Subsidiary than could be obtained in a comparable arm's length transaction with
a Person not an Affiliate.
SECTION 9.14 NEGATIVE PLEDGE AGREEMENTS. Except for (a) any of the
Security Instruments; (b) the Indenture or any other agreement evidencing the
Subordinated Debt; (c) agreements permitted by Sections 9.02(c), (d), (e), (f),
(g) or (h) but only with respect to the Property subject of the Lien permitted
thereby; (d) customary provisions in leases, licenses, asset sale agreements and
other customary agreements not related to the borrowing of money and entered
into in the ordinary course of business, (e) Liens or restrictions imposed on
investments (or Property related thereto) of the type described in Section
9.03(c)(iii), but only on such investments or Property; and (f) restrictions
imposed by agreements governing Excepted Liens, United Meridian and its
Subsidiaries, including the Company, will not create, incur, assume or suffer to
exist any contract, agreement or understanding which in any way prohibits or
restricts the granting, conveying, creation or imposition of any Lien on any
Property of United Meridian or any of its Subsidiaries, including the Company,
or which requires the consent of or notice to other Persons in connection
therewith.
SECTION 9.15 SUBSIDIARIES AND PARTNERSHIPS. United Meridian and any
of its Subsidiaries may create additional Subsidiaries or partnerships, provided
that the Company shall give the Administrative Agent prompt notice thereof.
SECTION 9.16 SALE OF OIL AND GAS PROPERTIES. Except for Hydrocarbons
sold in the ordinary course of business as and when produced or after the
production thereof, the Company will not sell, assign, transfer or convey, or
permit any of its Subsidiaries to sell, assign, transfer or convey, any interest
in any of the Oil and Gas Properties that constitute part of the Borrowing Base.
This provision shall not apply to:
(a) Routine farm-outs of non-proven acreage;
(b) Sales of Properties, provided that the sum of, without duplication,
(i) the value of all Oil and Gas Properties subject to contracts that ceased to
be Designated Contracts during the same Redetermination Period, (ii) the value
of all Oil and Gas Properties of Subsidiaries that ceased to be Material
Subsidiaries during the same Redetermination Period, and (iii) the amount of all
sales of Properties (excluding (A) Hydrocarbons sold in the ordinary course of
business as and when produced or after the production thereof, (B) Oil and Gas
Properties described in clauses (i) and (ii) above and (C) Properties listed on
Schedule 9.16) made during such Redetermination Period, constitutes less than 5%
of the then current value of the Borrowing Base (as in effect immediately prior
to such sale);
(c) In addition to sales permitted under Section 9.16(b), sales of
Properties included in the Borrowing Base; provided that simultaneously with any
such sale the Borrowing Base is reduced by an amount agreed to at the time by
the Required Lenders; and
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(d) Sale of the Properties listed on Schedule 9.16.
SECTION 9.17 ENVIRONMENTAL MATTERS. United Meridian will not cause
or permit, or permit any of its Subsidiaries, including the Company, to cause or
permit, any of its Property to be in violation of, or do anything or permit
anything to be done which will subject any such Property to any remedial
obligations under any Environmental Laws if the effect of such violation could
reasonably be expected to have a Material Adverse Effect. United Meridian and
its Subsidiaries, including the Company, will establish and implement such
procedures as may be necessary to promptly and properly respond in the event
that: (i) solid wastes are disposed of on any of its respective Property in
quantities or locations that would require remedial action under any
Environmental Laws; (ii) hazardous substances are released on or to any such
Property in a quantity equal to or exceeding that quantity which requires
reporting pursuant to Section 103 of CERCLA; (iii) hazardous substances are
released on or to any such Property so as to pose an imminent and substantial
endangerment to public health or welfare or the environment; or (iv) oil is
released or threatened to be released in violation of OPA.
SECTION 9.18 PAYMENT RESTRICTIONS. Except for (a) any of the
Security Instruments, (b) the Indenture or other agreements evidencing any of
the Subordinated Debt, (c) the agreements relating to Non-recourse Debt
permitted by Section 9.01, but only with respect to the Subsidiary that is
liable for such Non-recourse Debt, (d) the Havre Credit Facility, but only with
respect to Havre and the Properties securing the Havre Credit Facility, and (e)
restrictions imposed relating to investments (or Property related thereto) of
the type described in Section 9.03(c)(iii), but only with respect to such
investments or Property, United Meridian and its Subsidiaries, including the
Company, will not enter into any agreements which would restrict payments from
the Subsidiaries of the Company to the Company or Subsidiaries of United
Meridian to United Meridian.
SECTION 9.19 INTEREST COVERAGE RATIO. United Meridian will not
permit its Interest Coverage Ratio, as of the end of any fiscal quarter of
United Meridian and its Consolidated Subsidiaries, from and after
March 31, 1997, to be less than the ratio set forth for each fiscal quarter
ending during the following periods:
================================================================================
Period Ratio
- --------------------------------------------------------------------------------
Effective Date until 12/31/97 2.75:1.0
- --------------------------------------------------------------------------------
thereafter 3.00:1.0
================================================================================
SECTION 9.20 SUBORDINATED DEBT. Neither United Meridian nor any of
its Subsidiaries shall, without the prior written consent of the Required
Lenders:
(a) defease, redeem, offer to purchase or purchase any of the
Subordinated Debt, unless the Indebtedness shall have been paid in full and the
Commitments of each Lender and Canadian Lender terminated; provided that United
Meridian may optionally defease, redeem or offer to purchase all or any part of
the Subordinated Debt (i) with the proceeds of the issuance of any equity
securities or (ii) with the proceeds of any other Debt which is subordinated on
terms substantially identical to the Subordinated Debt (or on terms more
advantageous to the Lenders and the Canadian Lenders) and which
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has an average life and final maturity later than the average life and final
maturity date, respectively, of the Subordinated Debt; or
(b) amend, supplement or modify the provisions of the Indenture or any
instrument evidencing or guaranteeing the Subordinated Debt; provided that the
foregoing shall not apply to any amendment, supplement or modification, that (i)
subject to the concurrence of the Administrative Agent and the Co-Agents, causes
the Subordinated Debt to have terms generally less restrictive than its current
terms as of the date of this Agreement, or (ii) United Meridian (and the
trustee, if applicable) may enter into without the consent of the holders of
such Subordinated Debt (other than amendments or supplements of the type
described in Section 9.1(b) or (c) of the Indenture).
SECTION 9.21 DESIGNATED CONTRACTS.
(a) United Meridian shall, and shall cause each of its Subsidiaries
which is a party to such Designated Contract to not amend, modify, supplement or
grant any waiver of any term of any such Designated Contract, if the effect of
such amendment, modification, supplement or waiver would be to materially and
adversely affect the commercial terms of such Designated Contract, its value or
the Liens of the Agents and the Lenders.
(b) Without the prior written consent of the Required Lenders, United
Meridian shall not, and shall not permit any of its Subsidiaries to, cancel or
terminate any Designated Contract unless (i) a successor contract has been
executed and delivered on economic terms and conditions acceptable to United
Meridian and not materially less favorable than those of the predecessor
contract or (ii) the other Person party to such Designated Contract is in
material default and, following such termination, United Meridian or its
appropriate Subsidiary diligently pursues against such Person and any and all
sureties or collateral and all remedies which it has available under applicable
law or contract as the result of such breach and termination if the failure to
pursue such remedies could reasonably be expected to have a Material Adverse
Effect.
SECTION 9.22 MAINTENANCE OF DEPOSITS. United Meridian and the
Company shall not, and shall not permit any of their Subsidiaries to, maintain
deposits of funds in any bank or financial institution outside of the United
States, Canada and nations that are members of the European Union, except for
operating accounts in jurisdictions where United Meridian or any of its
Subsidiaries is doing business or owns Property, which operating accounts shall
contain only such minimum amounts as may be necessary for the conduct of
business or the maintenance and exploitation of such Property.
ARTICLE X
EVENTS OF DEFAULT
SECTION 10.01 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 of any principal
of any Loan or of any reimbursement obligation for disbursement made under any
Letter of Credit or the Company shall default in the payment when due of any
interest on any Loan, any fees payable hereunder or under any
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other Security Agreement or other amount payable by it hereunder or under any
other Security Instrument and such default shall continue for a period of three
days; or
(b) United Meridian or any of its Subsidiaries, including the Company,
shall default in the payment when due (after expiration of all applicable grace
periods, if any) of any principal of or interest on any of its other Debt, or
default in the payment of any termination or settlement payments under any
futures contracts, swap contracts or other similar hedging agreements, in either
case an amount in excess of $5,000,000; or any event specified in any note,
agreement, indenture or other document evidencing or relating to any Debt in an
amount in excess of $5,000,000 shall occur (including the giving of all required
notices and the expiration of all applicable grace periods, if any) and be
continuing if the effect of such event is to cause, or to permit the holder or
holders of such Debt (or a trustee or agent on behalf of such holder or holders)
to cause, such Debt in excess of $5,000,000 to become due prior to its stated
maturity; or
(c) UMC Canada shall default in the payment when due of any principal
of or interest on any Loan (as defined in the Canadian Credit Agreement) or the
payment when due of any Bankers Acceptance or any fees or other amount payable
by it thereunder; or
(d) Any representation, warranty or certification made or deemed made
herein or in any other Security Instrument by United Meridian or any of its
Subsidiaries, including the Company, or in any certificate furnished to any
Lender or any Agent pursuant to the provisions hereof or any other Security
Instrument, shall prove to have been false or misleading as of the time made or
furnished in any material respect; or
(e) United Meridian or the Company, shall default in the performance
of any of their respective obligations under Article IX; UMC Canada shall
default in the performance of any of its obligations under Article IX of the
Canadian Credit Agreement; or United Meridian or any of its Subsidiaries,
including the Company, shall default in the performance of any of their
respective other obligations in this Agreement or under any other Security
Instrument and such default shall continue unremedied for a period of 30 days
after notice thereof to United Meridian or such defaulting Subsidiary, as the
case may be, by the Administrative Agent or any Lender; or
(f) The Company, any Guarantor, UMC Canada or any Material Subsidiary,
shall admit in writing its inability to, or be generally unable to, pay its
debts as such debts become due; or
(g) The Company, any Guarantor, UMC Canada or any Material Subsidiary,
shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee 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 (as now or hereafter in effect), (iv) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
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
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(h) A proceeding or case shall be commenced, without the application
or consent of the Company, any Guarantor, UMC Canada or any Material Subsidiary,
in any court of competent jurisdiction, seeking (i) its liquidation,
reorganization, dissolution or winding-up, or the composition or readjustment of
its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for such Person or of all or any substantial part of its assets, or
(iii) similar relief in respect of any such Person 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 days; or an order for
relief against such Person shall be entered in an involun tary case under the
Bankruptcy Code; or
(i) A final judgment or judgments for the payment of money in excess
of $5,000,000 in the aggregate in excess of insurance coverage shall be rendered
by a court or courts against United Meridian or any of its Subsidiaries and
either the same shall not be discharged or provision shall not be made for such
discharge, or a stay of execution thereof shall not be procured, in either case,
within 30 days from the date of entry thereof and the judgment debtor shall not,
within said period of 30 days, or such longer period during which execution of
the same shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal; or
(j) An event or condition specified in Section 9.10 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, United
Meridian or any ERISA Affiliate shall incur or in the opinion of the Required
Lenders shall be reasonably likely to incur a liability to a Plan, a
Multiemployer Plan or PBGC (or any combination of the foregoing) which is, in
the determination of the Required Lenders, material in relation to the
consolidated financial position of United Meridian and its Consolidated
Subsidiaries; or
(k) Any material Security Instrument, after delivery thereof, shall
for any reason, except to the extent permitted by the terms of this Agreement or
thereof, cease to be in full force and effect and valid, binding and enforceable
in accordance with its terms (subject to customary exceptions therefrom), or
cease to create a valid and perfected Lien of the priority required by this
Agreement or thereby on any portion of the collateral purported to be covered
thereby having a SEC Value in excess of $5,000,000, and if such collateral
relates to the International Component, all such defect(s) in such Lien (or its
perfection or priority, as appropriate) shall not have been cured within 30 days
after notice thereof to United Meridian by the Administrative Agent or any
Lender; or United Meridian or any of its Subsidiaries shall state in writing
(other than any writing giving the Agents and the Lenders notice thereof) that
any Security Instrument is no longer in full force and effect or valid, binding
and enforceable in accordance with its terms (subject to customary exceptions
therefrom), or does not create a valid and perfected Lien of the priority
required by this Agreement or thereby; or
(l) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended), excluding
underwriters in the course of their distribution of Voting Stock in an
underwritten public offering, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 of the SEC under the Securities Exchange Act of 1934), directly or
indirectly, of more than 50% of the total Voting Stock of United Meridian; or
during any consecutive two-year period,
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individuals who at the beginning of such period constituted the Board of
Directors of United Meridian (together with any new directors whose election by
such Board of Directors or whose nomination for election by the stockholders of
United Meridian was approved by a vote of a majority of the directors then still
in office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of United Meridian
then in office; or
(m) United Meridian shall cease to directly or indirectly own 100% of
each class of stock of the Company, UMC Canada or any Guarantor (except
directors' qualifying shares) and subject to the Collateral Agent's Lien in
accordance with the terms of the Security Instruments.
THEREUPON: (i) in the case of an Event of Default other than one referred to in
clause (f), (g) or (h) of this Section 10.01 with respect to the Company, any
Guarantor or UMC Canada, the Administrative Agent may and, upon request of the
Required Lenders, shall, by notice to the Company, cancel the Commitments and/or
declare the principal amount of the Loans, together with accrued interest, and
all other amounts payable by the Company hereunder and under the Notes to be
forthwith due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest, notice of intent to accelerate,
notice of acceleration or other formalities of any kind, all of which are hereby
expressly waived by the Company; and (ii) in the case of the occurrence of an
Event of Default referred to in clause (f), (g) or (h) of this Section 10.01
with respect to the Company, any Guarantor or UMC Canada, the Commitments shall
be automatically canceled and the principal amount of the Loans, together with
accrued interest, and all other amounts payable by the Company hereunder and
under the Notes shall become automatically immediately due and payable without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other formalities of any kind, all of which are hereby expressly
waived by the Company.
SECTION 10.02 CASH COLLATERAL FOR LETTERS OF CREDIT. If an Event of
Default exists, the Administrative Agent and the Collateral Agent may, or upon
the request of the Required Lenders, shall, proceed to enforce remedies under
the Security Instruments. Upon realization of any of the collateral consisting
of cash, or of any cash proceeds from any disposition of the collateral, all
such cash and cash proceeds shall be applied as set forth in the Intercreditor
Agreement.
ARTICLE XI
THE AGENTS
SECTION 11.01 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent, the Syndication
Agent, each Documentation Agent and each Co-Agent to act as its agent hereunder
with such powers as are specifically delegated to it by the terms of this
Agreement or any Security Instrument, together with such other powers as are
reasonably incidental thereto. Each Agent (which term as used in this sentence
and in Section 11.05 and the first sentence of Section 11.06 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 the other Security Instruments and
shall not by reason of this Agreement or any other Security Instrument be a
trustee for any other Agent or Lender; (b) shall not be
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responsible to any other Agent or the Lenders (i) for the accuracy of any
recitals, statements, representations or warranties contained in this Agreement
or any Security Instrument or in any certificate or other document referred to
or provided for in, or received by any of them under, this Agreement; (ii) for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement, any Note or any Security Instrument or any other document
referred to or provided for herein; or (iii) for any failure by the Company, any
Guarantor or any other Person to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder except as may be expressly required under this
Agreement or any other Security Instrument; and (d) shall not be responsible for
any action taken or omitted to be taken by it hereunder or under any other
Security Instrument, except for its own gross negligence or willful misconduct.
The Agents 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. Each Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been filed with the
Administrative Agent, together with the written consent of the Company to such
assignment or transfer.
SECTION 11.02 RELIANCE BY AGENTS. Each Agent shall be entitled to
rely: (a) upon any certification, notice or other communication (including any
thereof by telephone, telex, telegram or cable) 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 (b) upon advice and statements of legal counsel, independent
accountants and other experts selected by any Agent in good faith. As to any
matters not expressly provided for by this Agreement or any Security Instrument,
each Agent shall in all cases be fully protected in acting, or in refraining
from acting, hereunder in accordance with instructions signed by the Required
Lenders; and such instructions of the Required Lenders and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders.
SECTION 11.03 DEFAULTS. No Agent shall be deemed to have knowledge
of the occurrence of a Default (other than, in the case of the Administrative
Agent, the non-payment of principal of or interest on Loans or of fees or the
non-payment of reimbursement obligations of the Company in connection with
Letters of Credit) unless it has received notice from either a Lender or the
Company specifying such Default and stating that such notice is a "Notice of
Default". In the event that any Agent receives such a notice of the occurrence
of a Default, it shall promptly give notice to the Administrative Agent who
shall thereafter give prompt notice thereof to the Lenders.
SECTION 11.04 RIGHTS AS A LENDER. With respect to its Commitment and
the Loans made by it and the Letters of Credit issued by it or in which it is
participating, each Agent (and any successor acting as an 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 an Agent,
and the term "Lender" or "Lenders" shall include each Agent in its individual
capacity. Each Agent (and any successor acting as an Agent) and its Affiliates
may (without having to account therefor to any other Agent or Lender) accept
deposits from, lend money to and generally engage in any kind of banking, trust
or other business with United Meridian and its Subsidiaries, including the
Company, or any of United Meridian's Affiliates as if it were not acting as an
Agent. Each Agent and its Affiliates may accept fees and other consideration
from United Meridian or any of its Affiliates, including the Company, for
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services in connection with this Agreement, any Security Instrument or otherwise
without having to account for the same to any other Agent or the Lenders.
SECTION 11.05 INDEMNIFICATION. The Lenders agree to indemnify each
Agent (to the extent not reimbursed under Section 12.03, but without limiting
the obligations of the Company under Section 12.03), ratably in accordance with
the aggregate principal amount of the Loans made by the Lenders (or, if no Loans
are at the time outstanding, ratably in accordance with their respective
Commitments), for any and all Indemnity Matters of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against such Agent
in any way relating to or arising out of: (a) this Agreement or any other
Security Instrument or the transactions contemplated hereby and thereby
(including, without limitation, the costs and expenses which the Company is
obligated to pay under Section 12.03 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 (b) the enforcement of any
of the terms hereof or of any other Security Instrument; provided that no Lender
shall be liable for any Indemnity Matter to the extent it arises from the gross
negligence or willful misconduct of the Person to be indemnified; and provided
further that no Lender shall be liable for any Indemnity Matters arising solely
by reason of claims among the Agents and their shareholders.
SECTION 11.06 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender
agrees: (a) that it has, independently and without reliance on any Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of United Meridian and its
Subsidiaries, including the Company and each Guarantor, and decision to enter
into this Agreement; and (b) that it will, independently and without reliance
upon any Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any other
Security Instrument. No Agent shall be required to keep itself informed as to
the performance or observance by any Guarantor, the Company or any other Person
of its obligations under this Agreement or any other Security Instrument or
document referred to or provided for herein or to inspect the Properties or
books of United Meridian and its Subsidiaries, including the Company. Except
for notices, reports and other documents and information expressly required to
be furnished to the Lenders by an Agent hereunder or under a Security
Instrument, no Agent shall have any duty or responsibility to provide any other
Agent or Lender with any credit or other information concerning the affairs,
financial condition or business of United Meridian and its Subsidiaries,
including the Company, (or any of their Affiliates) which may come into the
possession of such Agent or any of their Affiliates.
SECTION 11.07 ACTION BY ADMINISTRATIVE AGENT. Except for action or
other matters expressly required of an Agent hereunder, such Agent shall in all
cases be fully justified in failing or refusing to act hereunder unless it shall
(i) receive written instructions from the Required Lenders specifying the action
to be taken, and (ii) be indemnified to its satisfaction by the Lenders against
any and all liability and expenses which may be incurred by it by reason of
taking or continuing to take any such action, and such instructions of the
Required Lenders and any action taken or failure to act pursuant thereto shall
be binding on all of the Lenders. If a Default has occurred and is continuing,
the Administrative Agent shall take such action with respect to such Default as
shall be directed by the Required Lenders in the written instructions (with
indemnities) described in this Section 11.07, provided that, unless and until
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall
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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 interests of the
Lenders. In no event, however, shall the Administrative Agent be required to
take any action which exposes it to personal liability or which is contrary to
this Agreement and the Security Instruments or applicable law.
SECTION 11.08 RESIGNATION OR REMOVAL OF AGENTS. Subject to the
appointment and acceptance of a successor Agent as provided in this Section
11.08, any Agent may resign at any time by giving notice thereof to the Lenders
and the Company, and any Agent may be removed at any time, for cause, by the
Required Lenders. Upon any such resignation or removal, the Required Lenders,
with the consent of the Company (which consent shall not be unreasonably
withheld or delayed), shall have the right to appoint a successor Agent. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after either the retiring Agent's
giving of notice of resignation or the Required Lenders' removal of the retiring
Agent, then the retiring Agent may, on behalf of the Lenders, appoint its
successor. Upon the acceptance of any appointment as an Agent hereunder by a
successor, such successor 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, the provisions of this
Article XI 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 an Agent.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 WAIVER. No failure on the part of any Agent or any
Lender to exercise, no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement or any Security
Instrument shall operate as a waiver thereof; and no single or partial exercise
of any right, power or privilege under this Agreement or any Security Instrument
shall 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.
SECTION 12.02 NOTICES. All notices and other communications provided
for herein and in the other Security Instruments (including, without limitation,
any modifications of, or waivers or consents under, this Agreement or the other
Security Instruments) shall be given or made by telecopy, telegraph, cable or in
writing and telecopied, telegraphed, cabled, mailed or 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, delivered to the telegraph or cable office or
personally delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid.
SECTION 12.03 PAYMENT OF EXPENSES, INDEMNITIES, ETC. The Company agrees
to:
(a) whether or not the transactions hereby contemplated are consummated,
pay all reasonable expenses of the Administrative Agent in the administration
(both before and after the execution hereof and including advice of counsel as
to the rights and duties of the Agents and the
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Lenders with respect thereto) of, and in connection with the negotiation,
investigation, preparation, execution and delivery of, recording or filing of,
preservation of rights under, enforcement of, and refinancing, renegotiation or
restructuring of, this Agreement, the Notes and the other Security Instruments
and any amendment, waiver or consent relating thereto (including, without
limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent and in the case of enforcement for any of the Lenders); and
promptly reimburse each Agent or Lender for all amounts expended, advanced or
incurred by such Agent or Lender to satisfy any obligation of the Company or the
Guarantors under this Agreement or any Security Instrument; and
(b) pay and hold each of the Agents and the Lenders harmless from and
against any and all present and future stamp and other similar taxes with
respect to the foregoing matters and save each Agent and Lender harmless from
and against any and all liabilities with respect to or resulting from any delay
or omission to pay such taxes; and
(c) indemnify the Agents and each Lender, their officers, directors,
employees, representatives, agents and Affiliates (collectively, the
"Indemnified Parties") from, hold each of them harmless against, promptly upon
demand pay or reimburse each of them for, and refrain from creating or asserting
against any of them, any and all Indemnity Matters of any kind or nature
whatsoever which may be incurred by or asserted against or involve any of them
(whether or not any of them is designated a party thereto) as a result of,
arising out of or in any way related to (i) offsets, reductions, rebatements or
other claims, counterclaims or defenses of any nature whatsoever (including,
without limitation, claims of usury) of United Meridian or any of its
Subsidiaries, including the Company, or any other Person, whether in tort or in
contract, fixed or contingent, in law or in equity, known or unknown, whether
now existing or hereafter arising, in connection with other lenders whose Debt
may be refinanced with any proceeds of the Loans (in their capacity as lenders
or as agent for the lenders in connection with the loan documents executed in
connection with such refinanced Debt and not otherwise), the loan documents
executed in connection with such refinanced Debt or any actions or relationships
relating to any of the foregoing, (ii) any actual or proposed use by the
Company or any of its Subsidiaries of the proceeds of any of the Loans or
Letters of Credit or (iii) any other aspect of this Agreement, the Notes and the
other Security Instruments, including, without limitation, the reasonable fees
and disbursements of counsel and all other expenses incurred in connection with
investigating, defending or preparing to defend any such action, suit,
proceeding (including any investigations, litigation or inquiries) or claim, but
excluding herefrom all Indemnity Matters arising solely by reason of claims
among Indemnified Parties and their shareholders.
(d) indemnify and hold each Agent and Lender, its officers, directors,
employees, representatives, agents and Affiliates harmless against, and promptly
to pay on demand or reimburse each of them with respect to, any and all
Indemnity Matters of any and every kind or nature whatsoever asserted against or
incurred by any of them by reason of or arising out of or in any way related to
(i) the breach of any representation or warranty as set forth herein regarding
Environmental Laws, or (ii) the failure of United Meridian
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or any of its Subsidiaries, including the Company, to perform any obligation
herein required to be performed pursuant to Environmental Laws.
(e) In the case of any indemnification hereunder, the Agent or Lender
seeking indemnification, as appropriate shall give notice to the Company of any
such claim or demand being made against the Indemnified Party; and the Company
shall have the non-exclusive right to join in the defense against any such claim
or demand.
(f) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES
NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER
WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN
OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT
IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE
INDEMNIFIED PARTIES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON
ANY ONE OR MORE OF THE INDEMNIFIED PARTIES. TO THE EXTENT THAT AN INDEMNIFIED
PARTY IS FOUND TO HAVE COMMITTED AN ACT OF GROSS NEGLIGENCE OR WILFUL
MISCONDUCT, THIS CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL CONTINUE BUT
SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED TO HAVE OCCURRED BY
REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF THE
INDEMNIFIED PARTY. IN ADDITION, THE FOREGOING INDEMNITIES EXCLUDE ALL INDEMNITY
MATTERS ARISING SOLELY BY REASON OF CLAIMS AMONG INDEMNIFIED PARTIES AND THEIR
SHAREHOLDERS.
(g) The Company's obligations under this Section 12.03 shall survive
any termination of this Agreement and the payment of the Notes and shall
continue thereafter in full force and effect.
(h) The Company shall pay any amounts due under this Section 12.03
within thirty (30) days of the receipt by the Company of notice of the amount
due.
SECTION 12.04 AMENDMENTS, ETC. Subject to the terms of the
Intercreditor Agreement, any provision of this Agreement or any other Security
Instruments may be amended, modified or waived with the Required Lenders'
consent; provided that no amendment, modification or waiver which amends,
modifies or waives the definition of "Required Lenders", this Section 12.04, any
provision in Section 2.03, extends the maturity of the Loans, modifies the
definition of Applicable Margin or reduces the interest rate (other than as a
result of waiving the applicability of any post-Default increases in such
rates), modifies the payment dates for payments of either principal or interest
on any Loan, modifies any fees payable hereunder, increases the Borrowing Base,
releases all or substantially all of the collateral (except as expressly
provided in the Security Instruments) or releases any Guarantor shall be
effective without consent of all Lenders and Canadian Lenders. Without
limitation of the foregoing, no amendment, modification or waiver which modifies
the rights, duties or obligations or fees of any Agent shall be effective
without the consent of such Agent.
SECTION 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.
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SECTION 12.06 ASSIGNMENTS AND PARTICIPATIONS.
(a) The Company may not assign its rights or obligations hereunder,
under the Notes or under any Letter of Credit Agreement without the prior
consent of all of the Lenders and the Administrative Agent.
(b) Each Lender may, upon the written consent of the Company which
consent shall not be unreasonably withheld or delayed, assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
pursuant to an Assignment and Acceptance Agreement substantially in the form of
Exhibit G (an "Assignment and Acceptance"); provided that (i) any such
assignment shall be in the aggregate amount of at least $10,000,000 or such
lesser amount to which the Company has consented, and (ii) the assignee shall
pay to the Administrative Agent a processing and recordation fee of $2,500;
provided that such fee shall not be payable in conjunction with any assignments
occurring within 30 days of the Effective Date. Any such assignment will become
effective upon the issuance by the Administrative Agent of a letter of
acknowledgment reflecting such assignment and the resultant effects thereof on
the Commitments of the assignor and assignee, and the principal amount
outstanding of the Conventional Loans owed to the assignor and assignee, the
Administrative Agent hereby agreeing to effect such issuance no later than five
(5) Business Days after its receipt of an Assignment and Acceptance executed by
all parties thereto. Promptly after receipt of an Assignment and Acceptance
executed by all parties thereto, the Administrative Agent shall send to the
Company a copy of such executed Assignment and Acceptance. Upon receipt of such
executed Assignment and Acceptance, the Company, will, at its own expense,
execute and deliver new Conventional Loan Notes to the assignor and/or assignee,
as appropriate, in accordance with their respective interests as they appear on
the Administrative Agent's letter of acknowledgment. Upon the effectiveness of
any assignment pursuant to this Section, the assignee will become a "Lender," if
not already a "Lender," for all purposes of this Agreement and the other
Security Instruments. Subject to the terms of Section 12.10 of this Agreement
and the Sections referred to therein, the assignor shall be relieved of its
obligations hereunder to the extent of such assignment (and if the assigning
Lender no longer holds any rights or obligations under this Agreement, such
assigning Lender shall cease to be a "Lender" hereunder). The Administrative
Agent will prepare on the last Business Day of each month during which an
assignment has become effective pursuant to this Section 12.06(b), a new Annex I
giving effect to all such assignments effected during such month, and will
promptly provide the same to the Company and each of the Lenders. If an
assignment is made to a Person which had not previously been a Lender, the
Company will promptly execute and deliver to such Lender a Bid Rate Note as
described in Section 2.07(b).
(c) Each Lender may transfer, grant or assign participations in all or any
part of such Lender's interests hereunder pursuant to this subsection to any
Person, provided that: (i) such Lender shall remain a "Lender" for all purposes
of this Agreement and the transferee of such participation shall not constitute
a "Lender" hereunder; and (ii) no participant under any such participation shall
have rights to approve any amendment to or waiver of this Agreement, the Notes
or any Security Instrument except to the extent such amendment or waiver would
(x) extend the Termination Date, (y) reduce the interest rate (other than as a
result of waiving the applicability of any post-default increases in interest
rates) or fees applicable to any of the Commitments or Loans in which such
participant is participating, or postpone the payment of any thereof, or (z)
release all or substantially all of the collateral (except as expressly provided
in the Security Instruments) supporting any of the Commitments or Loans in which
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such participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the
Security Instruments (the participant's rights against the granting Lender in
respect of such participation to be those set forth in the agreement with such
Lender creating such participation), and all amounts payable by the Company
hereunder shall be determined as if such Lender had not sold such participation,
provided that if such participant has made and complied with the representations
contained in Section 5.08, such participant shall be entitled to receive
additional amounts under Article V on the same basis as if it were a Lender
other than amounts paid by reason of such participant's noncompliance with
Section 5.08. In addition, each agreement creating any participation must
include agreements by the participant to be bound by the provisions of Section
12.14 and forbidding the transfer, assignment or sub-participation of such
participation.
(d) Notwithstanding any other provisions of this Section 12.06, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participations therein shall be permitted if such transfer,
assignment or grant would require the Company to file a registration statement
with the SEC or to qualify the Loans or any interest therein under the "Blue
Sky" laws of any state.
(e) The Lenders may furnish any information concerning the Company in
the possession of the Lenders from time to time to assignees and participants
(including prospective assignees and participants); provided that, such Persons
agree in writing to be bound by the provisions of Section 12.14 hereof.
(f) Notwithstanding anything in this Section 12.06 to the contrary,
any Lender may assign and pledge all or any of its Notes to any Federal Reserve
Bank or the United States Treasury as collateral security pursuant to Regulation
A of the Board of Governors of the Federal Reserve System and any operating
circular issued by such Federal Reserve System and/or such Federal Reserve Bank.
No such assignment and/or pledge shall release the assigning and/or pledging
Lender from its obligations hereunder.
SECTION 12.07 INVALIDITY. In the event that any one or more of the
provisions contained in the Notes, this Agreement or in any other Security
Instrument shall for any reason be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of such Note, this Agreement or any other Security Instrument.
SECTION 12.08 ENTIRE AGREEMENT. The Notes, this Agreement and the
other Security Instruments embody the entire agreement and understanding between
the Lenders, the Agents, the Company and the Guarantor and supersede all prior
agreements and understandings between such parties relating to the subject
matter hereof and thereof. There are no unwritten oral agreements between the
parties.
SECTION 12.09 REFERENCES. The words "herein," "hereof," "hereunder"
and other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or subsection.
Any reference herein to a Section shall be deemed to refer to the applicable
Section of this Agreement unless otherwise stated herein. Any reference herein
to an exhibit or schedule shall be deemed to refer to the applicable exhibit or
schedule attached hereto unless otherwise stated herein.
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SECTION 12.10 SURVIVAL. The obligations of the Company, each Agent
and the Lenders under Sections 5.01, 5.05, 5.06, 12.03 and 12.14 shall survive
the repayment of the Loans, the expiration of the Letters of Credit and the
termination of the Commitments and any assignment by a Lender of all its Loans
or Commitments pursuant to Section 12.06(b).
SECTION 12.11 CAPTIONS. Captions and section headings appearing
herein or any Security Instrument are included solely for convenience of
reference and are not intended to affect the interpretation of any provision of
this Agreement or such Security Instrument.
SECTION 12.12 COUNTERPARTS. This Agreement and each Security
Instrument (other than the Notes) 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 or any such Security Instrument
by signing any such counterpart.
SECTION 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT AND THE NOTES (INCLUDING, BUT NOT LIMITED TO, THE
VALIDITY AND ENFORCEABILITY HEREOF AND THEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, OTHER THAN THE
CONFLICT OF LAWS RULES THEREOF.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
NOTES OR THE OTHER SECURITY INSTRUMENTS TO WHICH EITHER UNITED MERIDIAN OR THE
COMPANY IS A PARTY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF
THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, UNITED MERIDIAN AND THE COMPANY EACH
HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. UNITED MERIDIAN AND THE COMPANY HEREBY IRREVOCABLY WAIVE ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE AND DOES NOT PRECLUDE THE
ADMINISTRATIVE AGENT OR ANY LENDER FROM OBTAINING JURISDICTION OVER UNITED
MERIDIAN OR THE COMPANY IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) United Meridian and the Company hereby irrevocably designate CT
Corporation System, located at 1633 Broadway, New York, New York 10019, as its
designee, appointee and agent to receive, for and on its behalf, service of
process in the State of New York in any legal action or proceeding with respect
to this Agreement, the Notes or the other Security Instruments to which either
United Meridian or the Company is a party. It is understood that a copy of such
process served on such agent will be promptly forwarded by overnight courier to
United Meridian or the Company, as the case may be, at its respective address
set forth opposite its signature below, but the failure of such party, as the
case may
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be, to receive such copy shall not affect in any way the service of such
process. United Meridian and the Company further irrevocably consent to the
service of process of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it, as the case may be, at its said address, such service to
become effective 30 days after such mailing.
(d) Nothing herein shall affect the right of any Agent or any Lender
or any holder of a Note to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against United Meridian or
the Company in any other jurisdiction.
(e) EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR TO DEFEND ANY RIGHTS UNDER THIS AGREEMENT, THE NOTES OR ANY OTHER
SECURITY INSTRUMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, THE NOTES OR ANY OTHER SECURITY INSTRUMENT AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 12.14 CONFIDENTIALITY. Each Lender and each Agent agree that
they will use their best efforts not to disclose without the prior written
consent of the Company (other than to their employees, auditors or counsel or to
another Lender if the Lender or such Lender's holding or parent company or the
Administrative Agent in its sole discretion determines that any such party
should have access to such information) any information with respect to United
Meridian or any of its Subsidiaries, including the Company, which is furnished
pursuant to this Agreement and which is designated by the Company to the Lenders
and the Administrative Agent in writing as confidential, provided that any
Lender and the Administrative Agent may disclose any such information (a) as has
become generally available to the public, (b) as may be required or appropriate
in any report, statement or testimony submitted to any municipal, state or
Federal regulatory body having or claiming to have jurisdiction over such Lender
or the Administrative Agent or to the Federal Reserve Board, the Federal Deposit
Insurance Company, National Association of Insurance Commissioners or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in response to any summons or subpoena or
in connection with any litigation, (d) in order to comply with any law, order,
regulation or ruling applicable to such Lender or the Administrative Agent, and
(e) to the prospective transferee in connection with any contemplated transfer
of any of the Notes or any interest therein by such Lender, provided that such
prospective transferee or participant executes an agreement with the Company
containing provisions substantially identical to those contained in this
Section.
SECTION 12.15 INTEREST. It is the intention of the parties hereto
that each Agent and Lender shall conform strictly to usury laws applicable to
it. Accordingly, if the transactions contemplated hereby would be usurious as
to any Agent or Lender under laws applicable to it (including the laws of the
United States of America and the State of New York or any other jurisdiction
whose laws may be mandatorily applicable to such Agent or Lender notwithstanding
the other provisions of this Agreement), then, in that event, notwithstanding
anything to the contrary in the Notes, this Agreement or any other
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Security Instrument, it is agreed as follows: (a) the aggregate of all
consideration which constitutes interest under law applicable to any Agent or
Lender that is contracted for, taken, reserved, charged or received by such
Agent or Lender under the Notes, this Agreement or under any of the other
aforesaid Security Instruments or agreements or otherwise in connection with the
Notes shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be canceled automatically and if
theretofore paid shall be credited by such Agent or Lender on the principal
amount of the Indebtedness (or, to the extent that the principal amount of the
Indebtedness shall have been or would thereby be paid in full, refunded by such
Agent or Lender to the Company); and (b) in the event that the maturity of the
Notes is accelerated by reason of an election of the holder thereof resulting
from any Event of Default under this Agreement or otherwise, or in the event of
any required or permitted prepayment, then such consideration that constitutes
interest under law applicable to any Agent or Lender may never include more than
the maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by
such Agent or Lender as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by such Agent or Lender on the principal
amount of the Indebtedness (or, to the extent that the principal amount of the
Indebtedness shall have been or would thereby be paid in full, refunded by such
Agent or Lender to the Company). All sums paid or agreed to be paid to any
Agent or Lender for the use, forbearance or detention of sums due hereunder
shall, to the extent permitted by law applicable to such Agent or Lender, be
amortized, prorated, allocated and spread throughout the term of the Loans
evidenced by the Notes until payment in full so that the rate or amount of
interest on account of any Loans or other amounts hereunder does not exceed the
maximum amount allowed by such applicable law. If at any time and from time to
time (i) the amount of interest payable to any Agent or Lender on any date shall
be computed at the Highest Lawful Rate applicable to such Agent or Lender
pursuant to this Section 12.15 and (ii) in respect of any subsequent interest
computation period the amount of interest otherwise payable to such Agent or
Lender would be less than the amount of interest payable to such Agent or Lender
computed at the Highest Lawful Rate applicable to such Agent or Lender, then the
amount of interest payable to such Agent or Lender in respect of such subsequent
interest computation period shall continue to be computed at the Highest Lawful
Rate applicable to such Agent or Lender until the total amount of interest
payable to such Agent or Lender shall equal the total amount of interest which
would have been payable to such Agent Lender if the total amount of interest had
been computed without giving effect to this Section 12.15.
To the extent that Article 5069-1.04 of the Texas Revised Civil
Statutes is relevant to any Agent or Lender for the purpose of determining the
Highest Lawful Rate, each such Agent and Lender hereby elects to determine the
applicable rate ceiling under such Article by the indicated (weekly) rate
ceiling from time to time in effect.
SECTION 12.16 EFFECTIVENESS. This Agreement and the Security
Instruments shall not be effective until the date (the "Effective Date") that
each of them is delivered to the Lenders in the State of New York, accepted by
the Lenders in such State, and executed by the Lenders in such State.
SECTION 12.17 INTERPRETATION OF SECURITY INSTRUMENTS. If in the
event of any conflict between the terms of Articles VII, VIII, IX and X of this
Agreement and the representations, warranties, covenants and events of default
contained in any of the Security Instruments, the terms of Articles VII, VIII,
IX and X of this Agreement, as appropriate, shall govern.
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SECTION 12.18 SURVIVAL OF OBLIGATIONS. To the extent that any
payments on the Indebtedness or proceeds of any collateral are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, debtor in possession, receiver or other Person under any
bankruptcy law, common law or equitable cause, then to such extent, the
Indebtedness so satisfied shall be revived and continue as if such payment or
proceeds had not been received and the Collateral Agent's (held for the benefit
of the Agents and the Lenders) Liens, rights, powers and remedies under this
Agreement and each Security Instrument shall continue in full force and effect.
In such event, each Security Instrument shall be automatically reinstated and
United Meridian shall, and shall cause each of the Guarantors and the Company
to, take such action as may be reasonably requested by the Administrative Agent
and the Lenders to effect such reinstatement.
SECTION 12.19 DEBT CHARACTERIZATION FOR INDENTURE PURPOSES. If so
designated by United Meridian in its internal records (which designation may be
made in its sole and absolute discretion), any Debt incurred hereunder and under
the Canadian Credit Agreement and all guarantees thereof shall constitute
"Indebtedness" other than "Permitted Indebtedness" (as such terms are defined in
the Indenture) for purposes of the Indenture.
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The parties hereto have caused this Agreement to be duly executed as
of the day and year first above written.
COMPANY:
UMC PETROLEUM CORPORATION
By:____________________________________________
Kevin McMillan, Vice President and Treasurer
1201 Louisiana, Suite 1400
Houston, Texas 77002
Telecopier No.: (713) 653-5024
Telephone No.: (713) 654-9110
Attention: Kevin McMillan
GUARANTOR:
UNITED MERIDIAN CORPORATION
By:____________________________________________
Kevin McMillan, Vice President and Treasurer
1201 Louisiana, Suite 1400
Houston, Texas 77002
Telecopier No.: (713) 653-5024
Telephone No.: (713) 654-9110
Attention: Kevin McMillan
-86-
<PAGE>
BANQUE PARIBAS
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
Base Rate and Eurodollar Lending Office:
1200 Smith Street, Suite 3100
Houston, Texas 77002
Address for Notice:
1200 Smith Street, Suite 3100
Houston, Texas 77002
Attn: Leah Evans or Pam Clark
Telecopy No: (713) 659-3832
Telephone No: (713) 659-4811
with copy to:
Banque Paribas
Houston Agency
1200 Smith Street, Suite 3100
Houston, Texas 77002
Attn: Brian Malone
Vice President
Telecopy: (713) 659-3832
Telephone: (713) 659-4811
-87-
<PAGE>
THE CHASE MANHATTAN BANK
By:___________________________
Mary Jo Woodford
Vice President
Lending Office for Base Rate Loans:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Lending Office for Eurodollar Loans:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Address for Notices:
The Chase Manhattan Bank
1 Chase Manhattan Plaza
New York, New York 10081
Telecopier No.: (212) 552-5777
Telephone No.: (212) 552-7684
Attention: Agency Services Group
with a copy to:
Chase Securities Inc.
700 Travis -5 TCBN
Houston, Texas 77002
Telecopier No.: (713) 216-8870
Telephone No.: (713) 216-8869
Attention: Peter Licalzi
-88-
<PAGE>
NATIONSBANK OF TEXAS, N.A.
By:_________________________
Paul Squires
Senior Vice President
Base Rate and Eurodollar Lending Office:
901 Main Street
Dallas, Texas 75201
Address for Notice:
901 Main Street
Dallas, Texas 75201
Attn: Karen Dumond
Telecopy No: (214) 508-1285
Telephone No: (214) 508-2513
with copy to:
NationsBank of Texas, N.A.
700 Louisiana, 8th Floor
Houston, Texas 77002
Attn: Paul Squires
Senior Vice President
Telecopy: (713) 247-6568
Telephone: (713) 247-6952
-89-
<PAGE>
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By:_________________________
Philip W. McNeal
Managing Director
Lending Office for Base Rate Loans and
Eurodollar Loans:
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260
Address for Notices:
Morgan Guaranty Trust Company
of New York
150 William Street, 11th Floor
New York, New York 10038
Telex No.: 177615MGTUT
Telecopier No.: (212) 619-2156
Telephone No.: (212) 587-2958
Attention: Debra Palamara
with a copy to:
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260
Telex No.: 177615MGTUT
Telecopier No.: (212) 837-5023
Telephone No.: (212) 648-6985
Attention: Philip W. McNeal
-90-
<PAGE>
SOCIETE GENERALE, SOUTHWEST AGENCY
By:______________________________
Richard Erbert
Vice President
Base Rate and Eurodollar Lending Office:
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Address for Notice:
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Attn: Administration
Telecopy No: (214) 754-0171
Telephone No: (214) 979-2792
with copy to:
Societe Generale
1111 Bagby, Suite 2020
Houston, Texas 77002
Attn: Richard Erbert
Vice President
Telecopy: (713) 650-0824
Telephone: (713) 759-6318
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<PAGE>
WELLS FARGO BANK, N.A.
By:________________________
John Fields
Vice President
Base Rate and Eurodollar Lending Office:
420 Montgomery
MAC # 0101-091
San Francisco, California 94104
Address for Notice:
420 Montgomery
MAC # 0101-091
San Francisco, California 94104
Attn: Joan Nitis
Telecopy No: (415) 989-4319
Telephone No: (415) 396-4916
with copy to:
Wells Fargo Corporate Services, Inc.
3535 Lincoln Plaza
500 N. Akard
Dallas, Texas 75201
Attn: John Fields
Vice President
Telecopy: (214) 740-2815
Telephone: (214) 740-2828
-92-
<PAGE>
COLORADO NATIONAL BANK
By:____________________________
Name:
Title:
Base Rate and Eurodollar Lending Office:
950 17th Street, Suite 300
Denver, Colorado 80202
Address for Notice:
950 17th Street, Suite 300
Denver, Colorado 80202
Attn: Paul Jelaco
Telecopy No: (303) 585-4362
Telephone No: (303) 585-5000
-93-
<PAGE>
AGENTS: THE CHASE MANHATTAN BANK, as Administrative Agent
By:_____________________________________________
Mary Jo Woodford
Vice President
Address for Notices to Chase as
Agent:
The Chase Manhattan Bank
1 Chase Manhattan Plaza
8th Floor
New York, New York 10081
Telecopier No.: (212) 552-5777
Telephone No.: (212) 552-7684
Attention: Agency Services Group
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Syndication Agent
By:_____________________________________________
Philip W. McNeal
Managing Director
Address for Notices for Morgan as Syndication
Agent:
Morgan Guaranty Trust Company
of New York
150 William Street, 11th Floor
New York, New York 10038
Telex No.: 177615MGTUT
Telecopier No.: (212) 619-2156
Telephone No.: (212) 587-2958
Attention: Debra Palamara
-94-
<PAGE>
NATIONSBANK OF TEXAS, N.A., as Documentation
Agent
By:____________________________________________
Paul Squires
Senior Vice President
Address for Notice:
NationsBank of Texas, N.A., as Documentation
Agent
700 Louisiana, 8th Floor
Houston, Texas 77002
Attn: Paul Squires
Senior Vice President
Telecopy: (713) 247-6568
Telephone: (713) 247-6952
SOCIETE GENERALE, SOUTHWEST AGENCY, as
Documentation Agent
By:____________________________________________
Richard Erbert
Vice President
Address for Notice:
Societe General, Southwest Agency, as
Documentation Agent
1111 Bagby, Suite 2020
Houston, Texas 77002
Attn: Richard Erbert
Vice President
Telecopy: (713) 650-0824
Telephone: (713) 759-6318
-95-
<PAGE>
BANQUE PARIBAS, as Co-Agent
By:____________________________________________
Name:
Title:
By:____________________________________________
Name:
Title:
Address for Notice:
Banque Paribas, Houston Agency
1200 Smith Street, Suite 3100
Houston, Texas 77002
Attn: Brian Malone, Vice President
Telecopy: (713) 659-3832
Telephone: (713) 659-4811
WELLS FARGO BANK, N.A., as Co-Agent
By:____________________________________________
John Fields
Vice President
Address for Notice:
Wells Fargo Corporate Services, Inc.
3535 Lincoln Plaza
500 N. Akard
Dallas, Texas 75201
Attn: John Fields, Vice President
Telecopy: (214) 740-2815
Telephone: (214) 740-2828
-96-
<PAGE>
COLORADO NATIONAL BANK, as Co-Agent
By:________________________________
Name:
Title:
Address for Notice:
Colorado National Bank
950 17th Street, Suite 300
Denver, Colorado 80202
Attn: Paul Jelaco
Telecopy No: (303) 585-4362
Telephone No: (303) 585-5000
-97-
<PAGE>
EXHIBIT 4.12
CREDIT AGREEMENT
Dated as of March 18, 1997
Among
UMC RESOURCES CANADA LTD.,
as the Company,
THE CHASE MANHATTAN BANK OF CANADA,
as Agent,
and
THE LENDERS SIGNATORY HERETO
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
Article I: Definitions and Accounting Matters
Section 1.01 Terms Defined Above................................... -1-
Section 1.02 Certain Defined Terms................................. -1-
Section 1.03 Other Defined Terms................................... -5-
Section 1.04 Accounting Terms and Determinations................... -5-
Article II: Commitments
Section 2.01 Loans and Bankers' Acceptances........................ -6-
Section 2.02 Borrowings, Renewals, Conversions, and Issuances...... -7-
Section 2.03 Changes of Commitments................................ -8-
Section 2.04 Commitment Fee and Other Fees......................... -9-
Section 2.05 Lending Offices....................................... -9-
Section 2.06 Several Obligations................................... -10-
Section 2.07 Notes................................................. -10-
Section 2.08 Prepayments........................................... -10-
Section 2.09 Available Canadian Commitment......................... -11-
Section 2.10 Acceptance Date Procedure............................. -11-
Section 2.11 Purchase of Bankers' Acceptances...................... -12-
Section 2.12 Payment of Bankers' Acceptances....................... -12-
Article III: Payments of Principal and Interest
Section 3.01 Repayment of Loans.................................... -12-
Section 3.02 Interest.............................................. -13-
Article IV: Payments; Pro Rata Treatment; Computations; Etc.
Section 4.01 Payments.............................................. -13-
Section 4.02 Pro Rata Treatment.................................... -13-
Section 4.03 Computations.......................................... -14-
Section 4.04 Non-receipt of Funds by the Administrative Agent...... -14-
Section 4.05 Sharing of Payments, Etc.............................. -14-
Article V: Yield Protection and Illegality
Section 5.01 Additional Costs...................................... -15-
Section 5.02 Illegality............................................ -16-
Section 5.03 Additional Cost in Respect of Tax..................... -17-
Section 5.04 Base Rate Loans pursuant to Sections 5.01 and 5.02.... -18-
Section 5.05 Compensation.......................................... -18-
Section 5.06 Avoidance of Taxes and Additional Costs............... -18-
<PAGE>
Section 5.07 Limitation on Right to Compensation................... -19-
Article VI: Conditions Precedent
Section 6.01 Initial Loan or Bankers' Acceptance................... -19-
Section 6.02 Subsequent Borrowings................................. -20-
Article VII: Representations and Warranties
Section 7.01 Incorporation By Reference............................ -20-
Article VIII: Affirmative Covenants
Section 8.01 Incorporation By Reference............................ -21-
Article IX: Negative Covenants
Section 9.01 Affirmation of Certain Covenants in Article IX
of the U. S. Credit Agreement........................ -21-
Article X: Events of Default
Section 10.01 Events of Default.................................... -22-
Article XI: The Administrative Agent
Section 11.01 Incorporation by Reference........................... -22-
Article XII: Miscellaneous
Section 12.01 Incorporation by Reference........................... -23-
Section 12.02 Amendments, Etc...................................... -23-
Section 12.03 Assignments and Participations....................... -23-
Section 12.04 Survival............................................. -24-
Section 12.05 GOVERNING LAW........................................ -24-
Section 12.06 Effectiveness........................................ -25-
Section 12.07 Interpretation of Security Instruments............... -25-
Section 12.08 Debt Characterization for Indenture Purposes......... -25-
Exhibit A - Form of Note
Exhibit B - Form of Bankers' Acceptances
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Borrowing Request
<PAGE>
This CREDIT AGREEMENT dated as of March 18, 1997 is among: UMC
RESOURCES CANADA LTD., a company continued under the laws of the Province of
British Columbia and formerly known as Norwich Resources Canada Ltd. (the
"Company"); each of the lenders that is a signatory hereto (individually, a
"Lender" and, collectively, the "Lenders"); and THE CHASE MANHATTAN BANK OF
CANADA, as administrative agent for the Lenders (in such capacity, together with
its successors in such capacity, the "Administrative Agent").
Recitals
A. The Company, the Administrative Agent and the Lenders entered into
that certain Amended and Restated Credit Agreement dated July 18, 1994, as
amended by that certain First Joint Amendment to Amended and Restated Credit
Agreement and Amended and Restated Credit Agreement (Canada) dated September 2,
1994, as further amended by that certain Second Joint Amendment to Amended and
Restated Credit Agreement and Amended and Restated Credit Agreement (Canada)
dated as of November 15, 1994, as further amended by that certain Third Joint
Amendment to Amended and Restated Credit Agreement and Amended and Restated
Credit Agreement (Canada) dated as of December 31, 1994, as further amended by
that certain Fourth Joint Amendment to Amended and Restated Credit Agreement and
Amended and Restated Credit Agreement (Canada) dated as of October 30, 1995, and
as further amended by that certain Fifth Joint Amendment to Amended and Restated
Credit Agreement and Amended and Restated Credit Agreement (Canada) dated as of
November 1, 1996 (such credit agreement, as amended, the "Prior Credit
Agreement").
B. The Company has requested that the Administrative Agent and the
Lenders amend and restate the Prior Credit Agreement and make credit available
to and on behalf of the Company on the terms and conditions stated herein.
C. The Administrative Agent and the Lenders, subject to the terms and
conditions stated herein, are willing to amend and restate the Prior Credit
Agreement and to make such credit facilities available.
D. Subject to the terms and conditions set forth herein, the
Administrative Agent and the Lenders have agreed to make certain credit
available to the Company; and accordingly, the parties hereto agree as follows:
ARTICLE I: DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 TERMS DEFINED ABOVE. As used in this Agreement, the terms
"Administrative Agent", "Company", "Lender", "Lenders" and "Prior Credit
Agreement" shall have the meanings indicated above.
SECTION 1.02 CERTAIN DEFINED TERMS. As used herein, the following terms
shall have the following meanings (all terms defined in this Article I or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
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<PAGE>
"Acceptance Date" shall mean any Business Day on which a Bankers'
Acceptance is issued and accepted by the Accepting Lender.
"Acceptance Exposure" means, at any time, the aggregate face amount of all
Bankers' Acceptances outstanding at such time for which the Company has not yet
reimbursed the Accepting Lenders.
"Accepting Lender" shall mean, as to any Bankers' Acceptance, the
Administrative Agent or any other Lender which has accepted such Bankers'
Acceptance pursuant to the terms of this Agreement.
"Additional Costs" shall have the meaning assigned to that term in Section
5.01.
"Aggregate Commitments" at any time shall equal the sum of the Commitments
of all of the Lenders.
"Affected Loans" shall have the meaning assigned to that term in Section
5.04.
"Agreement" shall mean this Credit Agreement, as amended, supplemented or
modified from time to time.
"Allocated Canadian Borrowing Base" shall mean the amount designated as
such by Petroleum under Section 2.09 of the U. S. Credit Agreement.
"Applicable Lending Office" shall mean, for each Lender, the lending office
of such Lender (or an Affiliate of such Lender) located in Canada designated on
the signature pages hereof or such other offices of such Lender (or of an
Affiliate of such Lender) located in Canada as such Lender may from time to time
specify to the Administrative Agent and the Company as the office at which its
Loans are to be made and maintained and Bankers' Acceptances are to be accepted.
"Applicable Margin" shall mean:
(a) with respect to Base Rate Loans: the Applicable Margin for Base Rate
Loans that are Conventional Loans under the U. S. Credit Agreement plus the then
applicable Facility Fee Rate; provided, that if at any time, the Applicable
Margin for Base Rate Loans plus the Base Rate is less than the Applicable Margin
for Bankers' Acceptances plus the Discount Rate for Bankers' Acceptances having
an Interest Period of 30 days, the Applicable Margin for Base Rate Loans shall
be increased so that the Applicable Margin for Base Rate Loans plus the Base
Rate will be not less than the Applicable Margin for Bankers' Acceptances plus
the Discount Rate for Bankers' Acceptances having an Interest Period of 30 days;
and
(b) with respect to Bankers' Acceptances: the Applicable Margin for
Eurodollar Loans that are Conventional Loans under the U. S. Credit Agreement
plus the then applicable Facility Fee Rate.
"Assignment and Acceptance" shall have the meaning assigned such term in
Section 12.03(b).
-2-
<PAGE>
"Available Proceeds" shall mean the face amount of the Bankers' Acceptance
less the applicable Discount Amount and the Stamping Fee.
"Bankers' Acceptance" shall mean a bill of exchange drawn by the Company,
duly completed and accepted by a Lender, in a form customarily used by the
Administrative Agent in creating bankers' acceptances and which otherwise meets
any requirements of the Administrative Agent.
"Base Rate" shall mean, with respect to any Base Rate Loan, for any day,
the rate equal to the Prime Rate for such day. Each change in any interest rate
provided for herein based upon the Base Rate resulting from a change in the Base
Rate shall take effect at the time of such change in the Base Rate.
"Base Rate Loans" shall mean loans which bear interest at the Base Rate.
"Borrowing" shall mean a utilization of the Commitments by way of Loans or
by the issuance, acceptance and purchase of Bankers' Acceptances.
"Business Day" shall mean any day on which commercial banks are not
authorized or required to close in Toronto, Canada.
"Chase" shall mean The Chase Manhattan Bank of Canada.
"Commitment" shall mean, as to each Lender, the obligation of such Lender
to make Loans to the Company or accept Bankers' Acceptances from the Company in
an aggregate amount at any one time outstanding equal to the amount set forth
opposite such Lender's name on Annex I to the U. S. Credit Agreement under the
caption " Canadian Commitment" (as the same may be reduced from time to time
pursuant to Section 2.03 or modified pursuant to Assignment and Acceptances
pursuant to Section 12.03(b)).
"Commitment Percentage" shall mean, as to any Lender, the percentage of the
Commitments to be provided by such Lender under this Agreement as indicated on
Annex I to the U. S. Credit Agreement as the Canadian Commitment Percentage, as
modified from time to time to reflect any assignments permitted by Section
12.03(b), such percentage being the quotient of such Lender's Commitment divided
by the aggregate Commitments for all Lenders.
"Discount Amount" shall mean, with respect to any Bankers' Acceptance, an
amount equal to the face amount thereof multiplied by the Discount Rate.
"Discount Rate" shall mean at any time, with respect to any Bankers'
Acceptance, the then current bid rate in effect quoted by the Administrative
Agent on such day, which shall be a Business Day, for purchase by the
Administrative Agent of bankers' acceptances of the same face amount and having
maturities on the same date as the maturity date of such Bankers' Acceptance.
"Dollars" and "$" shall mean Canadian Dollars.
"Effective Date" shall have the meaning assigned such term in Section
12.16.
-3-
<PAGE>
"Guarantors" shall mean United Meridian and Petroleum.
"Guaranty Agreements" shall mean an agreement executed by each of the
Guarantors in form and substance satisfactory to the Administrative Agent
guarantying payment of the Indebtedness.
"Indebtedness" shall mean any and all amounts owing or to be owing by the
Company or the Guarantors to the Administrative Agent, and/or the Lenders in
connection with the Notes, any Bankers' Acceptance or any Security Instrument,
including this Agreement and all renewals, extensions and/or rearrangements
thereof.
"Insolvency Event" shall mean any of the Events of Default described in
Section 10.01(f), (g) or (h) of the U. S. Credit Agreement.
"Initial Funding" shall mean the funding of the initial Borrowing pursuant
to Section 6.01.
"Interest Period" shall mean, with respect to any Bankers' Acceptances, the
period (which shall be 30 days, 60 days, 90 days, and subject to availability,
180 days, or such other period longer than 90 days requested by the Company and
agreed to by all the Lenders) commencing on the date such Bankers' Acceptance is
issued, accepted and purchased.
Notwithstanding the foregoing (unless otherwise agreed to by the Company and all
of the Lenders): (i) no Interest Period may commence before and end after any
Commitment Reduction Date unless, after giving effect thereto, the aggregate
principal amount of the Loans and Bankers' Acceptances having Interest Periods
which end after such Commitment Reduction Date shall be equal to or less than
the amount to which the Aggregate Commitments are to be automatically reduced on
such Commitment Reduction Date pursuant to Section 2.03(a); and (ii) each
Interest Period which would otherwise end on a day which is not a Business Day
shall end on the next succeeding Business Day.
"Loans" shall have the meaning assigned to that term in Section 2.01.
"Note" shall mean a promissory note issued by the Company described in
Section 2.07(a) payable to the order of any Lender and being substantially in
the form of Exhibit A evidencing the aggregate Loans to the Company by such
Lender.
"Petroleum" shall mean UMC Petroleum Corporation, a Delaware corporation.
"Prime Rate" shall mean the rate of interest from time to time announced by
the Administrative Agent at the Principal Office as its prime commercial lending
rate. Such rate is set by the Administrative Agent as a general reference rate
of interest, taking into account such factors as the Administrative Agent may
deem appropriate, it being understood that many of the Administrative Agent's
commercial or other loans are priced in relation to such rate, that it is not
necessarily the lowest or best rate actually charged to any customer and that
the Administrative Agent may make various commercial or other loans at rates of
interest having no relationship to such rate.
-4-
<PAGE>
"Principal Office" shall mean the principal office of the Administrative
Agent and Chase in Canada, presently located in Toronto, Ontario, Canada.
"Regulatory Change" shall mean, with respect to any Lender, any change
after the date of this Agreement in United States Federal, Canadian, state,
provincial, or foreign law or regulations or the adoption or making after such
date of any interpretations, directives or requests applying to a class of
lenders or insurance companies (including such Lender or its Applicable Lending
Office) of or under any United States Federal, Canadian, state, provincial or
foreign law or regulations (whether or not having the force of law) by any court
or governmental or monetary authority charged with the interpretation or
administration thereof.
"Required Payment" shall have the meaning assigned to that term in Section
4.04.
"Security Instruments" shall mean this Agreement, the Notes, the Bankers'
Acceptances, the Guaranty Agreements, and all instruments, documents and
agreements which are "Security Instruments" under the U. S. Credit Agreement,
and any and all other agreements or instruments now or hereafter executed and
delivered by United Meridian or any of its Subsidiaries, including the Company,
or any other Person (other than participation or similar agreements between any
Lender and any other lender or creditor with respect to any Indebtedness
pursuant to this Agreement) in connection with, or as security for the payment
or performance of, the Notes or this Agreement, as such agreements may be
amended or supplemented from time to time.
"Stamping Fee" shall mean, with respect to any Bankers' Acceptance, an
amount equal to the face amount thereof multiplied by the Applicable Margin for
Bankers' Acceptances.
"U.S. Administrative Agent" shall mean The Chase Manhattan Bank as
Administrative Agent for the U.S. Lenders, together with its successors in such
capacity.
"U.S. Commitments" shall mean the "Commitments" as defined in the U. S.
Credit Agreement.
"U.S. Indebtedness" shall mean the sum of all Loans and the LC Exposure
under the U. S. Credit Agreement, as such terms are defined therein.
"U.S. Lenders shall mean the "Lenders" as defined in the U. S. Credit
Agreement.
"U.S. Credit Agreement" shall mean that certain Global Credit Agreement of
even date herewith among Petroleum, United Meridian, as a guarantor, The Chase
Manhattan Bank, as Administrative Agent, Morgan Guaranty Trust Company of New
York, as Syndication Agent, NationsBank of Texas, N.A. and Societe Generale as
Documentation Agents, Banque Paribas, Colorado National Bank and Wells Fargo
Bank, N.A., as Co-Agents, and the lenders parties thereto, as amended, restated,
supplemented or modified from time to time.
SECTION 1.03 OTHER DEFINED TERMS. All other capitalized terms not defined
herein shall have the meanings assigned such terms in the U. S. Credit
Agreement.
-5-
<PAGE>
SECTION 1.04 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Administrative Agent or the Lenders hereunder
shall be prepared, in accordance with Canadian generally accepted accounting
principles as in effect, applied on a basis consistent with the audited
consolidated financial statements of the Company and the consolidated
Subsidiaries referred to in Section 7.02 (except for changes concurred with by
the Company's independent public accountants).
ARTICLE II: COMMITMENTS
SECTION 2.01 LOANS AND BANKERS' ACCEPTANCES.
(a) LOANS - Each Lender severally agrees, on the terms and conditions of
this Agreement, to make to the Company during the period from and including the
Effective Date to and including the Termination Date, revolving credit loans
(the "Loans") in an aggregate principal amount at any one time outstanding up
to, but not exceeding, the amount of such Lender's Commitment as then in effect;
provided, that the aggregate principal amount of (i) all Loans made by each
Lender shall not exceed (1) such Lender's Commitment Percentage of the Available
Canadian Commitment minus (2) such Lender's Acceptance Exposure and (ii) all
Loans made by all Lenders hereunder at any one time outstanding shall not exceed
the Available Canadian Commitment, as then in effect, minus the aggregate amount
of Acceptance Exposure for all Lenders. Subject to the terms of this Agreement,
during the period from the Effective Date to and including the Termination Date,
the Company may borrow, repay and reborrow the amount of the Commitments, as
then in effect.
(b) BANKERS' ACCEPTANCES - Each Lender severally agrees, on the terms and
conditions of this Agreement, to accept and, immediately thereafter, purchase
Bankers' Acceptances from the Company from and after the Effective Date with a
maturity or Interest Period not beyond the Termination Date in an aggregate
amount at any one time outstanding up to, but not exceeding, the amount of such
Lenders' Commitment as then in effect; provided, that the Acceptance Exposure at
any one time (i) for each Lender shall not exceed (1) such Lender's Commitment
Percentage of the Available Canadian Commitment minus (2) such Lender's
outstanding Loans and (ii) for all Lenders shall not exceed the Available
Canadian Commitment, as then in effect, minus the aggregate amount of all
outstanding Loans.
(c) DELIVERY OF BANKERS' ACCEPTANCES - Upon execution of this Agreement,
the Company shall deliver to each Lender bills of exchange, in the form for
Bankers' Acceptances of such Lender, executed in blank in sufficient quantity
and thereafter shall, from time to time upon request of the Administrative
Agent, deliver to the Lenders further quantities of such bills of exchange (on
the Administrative Agent's forms) so executed, and the Lenders shall hold such
bills of exchange in safekeeping. The present form of Bankers' Acceptances of
each Lender is set out in Exhibit B.
(d) SAFEKEEPING OF BANKERS' ACCEPTANCES - The bills of exchange so executed
in blank and delivered to each Lender shall be held in safekeeping in the vault
of one of each such Lender's branches. The standard of care that each Lender
shall maintain in its safekeeping of such bills of exchange shall
-6-
<PAGE>
be at least as high as that maintained by such Lender in the safekeeping of its
own securities. Each Lender shall indemnify and hold and save harmless the
Company from loss or damage resulting from the failure of such Lender to
maintain such standard of care.
(e) LOANS UNDER PRIOR CREDIT AGREEMENT. On the Effective Date:
(i) the Company shall pay all accrued and unpaid commitment fees
outstanding under the Prior Credit Agreement for the account of each "Lender"
under the Prior Credit Agreement;
(ii) each "Bankers' Acceptance" outstanding under the Prior Credit
Agreement shall be deemed a Bankers' Acceptance hereunder in the amount, with
the same Discount Amount, Stamping Fee and Interest Period as such "Bankers'
Acceptance" under the Prior Credit Agreement, and the obligations of the Company
with respect to such "Bankers' Acceptance" shall be deemed carried forward
hereunder (and, as such, such Bankers' Acceptances may not be allocated in
accordance with the percentages set forth on Annex I to the U. S. Credit
Agreement), and the execution and delivery of this Agreement and the
continuation of such Bankers' Acceptances hereunder shall not entitle any
"Lender" under the Prior Credit Agreement to seek compensation pursuant to
Section 5.05 hereof or thereof;
(iii) each "Base Rate Loan" under the Prior Credit Agreement shall be
deemed to be repaid with the proceeds of a new Base Rate Loan under this
Agreement; and
(iv) the Prior Credit Agreement and the commitments thereunder shall be
superseded by this Agreement and such commitments shall terminate.
SECTION 2.02 BORROWINGS, RENEWALS, CONVERSIONS, AND ISSUANCES.
(a) BORROWINGS. The Company shall give the Administrative Agent (which
shall promptly notify the Lenders) advance notice as hereinafter provided of
each borrowing, renewal, and conversion, which shall specify the aggregate
amount of such Borrowing, and the date (which shall be a Business Day) of the
Borrowing to be borrowed, renewed or converted, all of which must be reasonably
acceptable to the Administrative Agent, and in the case of Bankers' Acceptances,
all details of the proposed issue, specifying the aggregate amount of Bankers'
Acceptances to be accepted and purchased by the Lenders and the duration of the
Interest Period therefor. Promptly following such notice the Administrative
Agent will notify the Company and the Lenders of the Discount Rate for the
specified Acceptance Date.
(b) MINIMUM AMOUNTS. All Base Rate Loans (as part of the same borrowing)
shall be in aggregate amounts among all Lenders of at least $1,000,000 (or whole
multiples thereof) or the remaining unused portion of the Commitments. All
Bankers' Acceptances (as part of the same borrowing) shall be in aggregate
amounts among all Lenders of not less than $1,000,000 and in whole multiples of
$100,000.
(c) NOTICES, ETC. FOR LOANS. All borrowings, renewals and conversions
shall require advance written notice from the Company to the Administrative
Agent, in the form of Exhibit D, or such
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other form as may be accepted by the Administrative Agent from time to time,
which in each case shall be irrevocable and effective only upon receipt by the
Administrative Agent and shall be received by the Administrative Agent not later
than (i) in the case of a Base Rate Loan, 11:00 a.m. Toronto time on the date of
such borrowing, renewal or conversion; and (ii) in the case of Bankers'
Acceptances, 12:00 noon Toronto time on a day that is not less than one (1)
Business Day prior to the date of such borrowing, renewal or conversion. Not
later than 12:00 noon Toronto time on the date specified for each borrowing
hereunder or each request for the acceptance and purchase of a Bankers'
Acceptance, each Lender shall make available the amount of the Loan or the
Available Proceeds of the Bankers' Acceptance to be made by such Lender on such
date to the Administrative Agent, at account number 219274 maintained by the
Administrative Agent at The Royal Bank of Canada, Correspondent Banking
Division, Toronto, Canada, in immediately available funds for the account of the
Company. The amounts so received by the Administrative 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 designated by the Company.
(d) REPLACEMENT/RENEWAL ACCEPTANCES. Subject to the terms of this
Agreement, the Company may elect to cause a new replacement Bankers' Acceptance
to be issued, accepted and purchased to replace all or any part of any Bankers'
Acceptance at the maturity thereof by giving one (1) Business Day's advance
notice to the Administrative Agent of such election, specifying the amount of
such new Bankers' Acceptance and the Interest Period therefor. In the absence
of such a timely and proper election, the Company shall be deemed to have
elected to convert such Bankers' Acceptance to a Base Rate Loan as provided in
Section 2.12(b). All or any part of any Bankers' Acceptance may be renewed as
provided herein, provided that (i) any renewal Bankers' Acceptance shall meet
all requirements for Bankers' Acceptances hereunder, (ii) no Default shall have
occurred and be continuing and (iii) the Company shall have paid to the
Administrative Agent for the account of Lenders an amount equal to the
difference between the amount due on the maturing Bankers' Acceptance and the
Available Proceeds of the new Bankers' Acceptance. If a Default shall have
occurred and be continuing, each Bankers' Acceptance shall be converted to a
Base Rate Loan on the last day of the Interest Period applicable thereto unless
the Termination Date has occurred in which event all sums due thereon shall be
immediately due and payable.
(e) CONVERSION OPTIONS. The Company may elect to convert any Bankers'
Acceptance on the last day of the then current Interest Period relating thereto
to a Base Rate Loan by giving advance notice to the Administrative Agent of such
election. If no Default shall have occurred and be continuing, subject to the
terms of this Agreement, the Company may elect to convert all or any part of a
Base Rate Loan at any time and from time to time to a Bankers' Acceptance by
giving one (1) Business Day's advance notice to the Administrative Agent of such
election; provided that any conversion of any Base Rate Loan into a Bankers'
Acceptance shall be in the amount not less than $1,000,000 in the aggregate for
all Lenders and in whole multiples of $100,000.
(f) PRO RATA TREATMENT. Unless otherwise agreed among the Lenders, all
Loans shall be made by all Lenders pro rata relative to their respective
Commitment Percentage and the aggregate amount of all Bankers' Acceptances
issued hereunder shall be issued pro rata by all Lenders relative to their
respective Commitment Percentage, rounded, upwards or downwards, as the case may
be, to the nearest $100,000.
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SECTION 2.03 CHANGES OF COMMITMENTS.
(a) SCHEDULED REDUCTIONS. Unless the Commitments of the Lenders have
already been reduced pursuant to Section 2.03 (c), the Aggregate Commitments
shall automatically reduce as follows:
(i) on the initial Commitment Reduction Date, the Aggregate Commitments shall
reduce to 91.6667% of the Aggregate Commitments in effect on the Effective
Date (or such other amount as may be specified in an amendment to this
Agreement, the "Initial Aggregate Commitments");
(ii) on the second Commitment Reduction Date, the Aggregate Commitments shall
reduce to 83.3333% of the Initial Aggregate Commitments;
(iii) on the third Commitment Reduction Date, the Aggregate Commitments
shall reduce to 75% of the Initial Aggregate Commitments;
(iv) on the fourth Commitment Reduction Date, the Aggregate Commitments shall
reduce to 66.6667% of the Initial Aggregate Commitments;
(v) on the fifth Commitment Reduction Date, the Aggregate Commitments shall
reduce to 58.3333% of the Initial Aggregate Commitments; and
(vi) on the Termination Date, the Aggregate Commitments shall be reduced to
zero.
(b) WAIVER AND EXTENSION OF CREDIT REDUCTION DATES. All of the Lenders and
the U.S. Lenders may waive any reduction scheduled to occur on a Commitment
Reduction Date as set forth in Section 2.03(b) of the U.S. Credit Agreement,
which section is hereby incorporated by reference into this Agreement and made a
part of this Agreement to the same extent as if set forth in full herein, except
that for purposes hereof, references therein to "Lenders" and "Canadian Lenders"
shall be deemed to be references to "U.S. Lenders" and "Lenders," respectively,
and, as appropriate in the context, other corresponding changes shall be made,
mutatis mutandis.
(c) OPTIONAL REDUCTION. The Company shall have the right to terminate or
to reduce the amount of the Commitments at any time or from time to time upon
not less than one (1) Business Day's prior notice to the Administrative Agent
(which shall promptly notify the Lenders) of each such termination or reduction,
which notice shall specify the effective date thereof and the amount of any such
reduction (which shall not be less than $5,000,000, or any whole multiple of
$1,000,000 in excess thereof), and shall be irrevocable and effective only upon
receipt by the Administrative Agent.
(d) REINSTATEMENT. Other than increases pursuant to Section 2.09, the
Commitments once terminated or reduced may not be reinstated. The amount of the
Available Canadian Commitment may increase or decrease from time to time in
accordance with the terms of this Agreement, including but not limited to,
Section 2.09.
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SECTION 2.04 COMMITMENT FEE AND OTHER FEES. The Company shall pay to the
Administrative Agent for the account of the Lenders an aggregate commitment fee
on the daily average unused amount of such Lender's Available Canadian
Commitment for the period from and including the Effective Date of this
Agreement to and including the Termination Date, at a rate per annum equal to
the Facility Fee Rate. The commitment fee shall be payable in arrears on each
Quarterly Date and on the Termination Date.
SECTION 2.05 LENDING OFFICES. The Loans made and Bankers' Acceptances
accepted and purchased by each Lender shall be made and maintained at such
Lender's Applicable Lending Office, which shall be located in Canada.
SECTION 2.06 SEVERAL OBLIGATIONS. The failure of any Lender to make any
funds available in connection with any Borrowing to be funded by such Lender on
the date specified therefor shall not relieve any other Lender of its obligation
to provide such funds on such date, but neither the Administrative Agent nor any
Lender shall be responsible for the failure of any other Lender to provide funds
to be provided by such other Lender.
SECTION 2.07 NOTES.
(a) SINGLE PROMISSORY NOTE. The Loans made by each Lender shall be
evidenced by a single promissory note of the Company in substantially the form
of Exhibit A hereto, dated as of the Effective Date or such later date upon a
permitted assignment of all or any portion of such Note, payable to the order of
such Lender in a principal amount equal to the maximum amount of its Commitment
as originally in effect and otherwise duly completed. The date, amount,
interest rate and maturity date of each Loan made by each Lender, and all
payments made on account of the principal thereof, shall be recorded by such
Lender on its books 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.
(b) NO RIGHT TO SUBDIVIDE. No Lender shall be entitled to have its Note
subdivided, by exchange for promissory notes of lesser denominations or
otherwise, except in connection with a permitted assignment of all or any
portion of such Lender's Commitment, Loans and Note pursuant to Section
12.03(b).
SECTION 2.08 PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. The Company may prepay any Loans or Bankers'
Acceptances on any Business Day upon notice to the Administrative Agent (which
shall promptly notify the Lenders), which notice shall be given by the Company
not later than 12:00 noon Toronto time on such Business Day, shall specify the
amount of the prepayment (which shall be not less than $1,000,000 or the remain
ing balance of Base Rate Loans outstanding, if less) and shall be irrevocable
and effective only upon receipt by the Administrative Agent, provided that
interest on the principal prepaid on any Loan, accrued to the prepayment date,
shall be paid on the prepayment date. Any prepayment of any Bankers'
Acceptances shall be subject to the provisions of Sections 2.08(d) and 5.05.
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(b) MANDATORY PREPAYMENT UPON REDUCTION OF COMMITMENT. If, after giving
effect to any termination or reduction of the Commitments pursuant to Section
2.03, the sum of the outstanding aggregate principal amount of the Loans and the
Acceptance Exposure exceeds the aggregate amount of the Commitments, then the
Company shall on the date of such termination or reduction pay or prepay the
amount of such excess amount for application first, towards reduction of the
outstanding principal balance of the Notes and then, if necessary, by prepaying
Bankers' Acceptances, if any, then outstanding subject to the provisions of
Section 2.08(d). The Company shall on the date of such termination or reduction
also pay any amounts payable pursuant to Section 5.05 in connection therewith.
(c) NO PENALTY OR PREMIUMS. Subject to compensation requirements of
Section 5.05 hereof, all prepayments shall be without premium or penalty.
(d) PRO RATA TREATMENT. Without duplication of Section 5.05, any
prepayment of Bankers' Acceptances shall be in an amount equal to the full face
amount of any Bankers' Acceptance so prepaid (less any unearned Discount Amount
and Stamping Fee), and be pro rata among all Lenders relative to their
respective Commitments.
SECTION 2.09 AVAILABLE CANADIAN COMMITMENT.
(a) ALLOCATED CANADIAN BORROWING BASE. The Allocated Canadian Borrowing
Base in effect from time to time shall represent the maximum amount of Loans and
Bankers' Acceptances that the Lenders will loan or accept to or for the Company
at any one time prior to the Termination Date. On the Effective Date, the
Allocated Canadian Borrowing Base shall be U.S. $17,582,418.00.
(b) REALLOCATION. The Company, the Administrative Agent and the Lenders
agree that Petroleum shall have the right to request that the Allocated Canadian
Borrowing Base be increased or decreased, and the Allocated U.S. Borrowing Base
be decreased or increased, respectively, in a corresponding amount, all as more
particularly set forth in Sections 2.09(a)(iv) and 2.09(a)(v) of the U.S. Credit
Agreement, which provisions are hereby incorporated by reference into this
Agreement and made a part of this Agreement to the same extent as if set forth
in full herein, except that for purposes hereof, references therein to "Lenders"
and "Canadian Lenders" shall be deemed to be references to "U.S. Lenders" and
"Lenders," respectively, and, as appropriate in the context, other corresponding
changes shall be made, mutatis mutandis.
(c) NO CHANGE TO GLOBAL COMMITMENT. The Company, the Administrative Agent
and the Lenders agree that reallocations of the Allocated U. S. Borrowing Base
and Allocated Canadian Borrowing Base shall not, without the prior agreement of
all the U.S. Lenders, the Lenders and Petroleum, affect the Global Commitment
Percentage.
SECTION 2.10 ACCEPTANCE DATE PROCEDURE. On the Acceptance Date, the
following provisions shall apply:
(a) On or before 10:30 a.m. Toronto time on the Acceptance Date, the
Administrative Agent shall promptly determine the Discount Rate and notify each
Lender as to:
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(i) the Discount Rate;
(ii) the face amount of the Bankers' Acceptances to be purchased by such Lender
on such Acceptance Date;
(iii) the amount of the Stamping Fee applicable to those Bankers' Acceptances to
be accepted and purchased by such Lender on such Acceptance Date, such
Lender being authorized by the Company to collect the Discount Amount and
the Stamping Fee out of the proceeds of the Bankers' Acceptances upon the
Lender's acceptance and purchase thereof;
(iv) the Available Proceeds by subtracting the Discount Amount and the Stamping
Fee mentioned in subsection (iii) from the face amount mentioned in
subsection (ii).
(b) As provided in Section 2.02(c), not later than 12:00 noon Toronto time
that same day, each Lender shall make available to the Administrative Agent its
Available Proceeds and the Administrative Agent shall make the Available
Proceeds available to the Company.
SECTION 2.11 PURCHASE OF BANKERS' ACCEPTANCES. The Lenders shall, on the
Acceptance Date, accept the Bankers' Acceptances, by inserting the appropriate
face amount, Acceptance Date and maturity date thereof in accordance with the
Company's notice relating thereto and affixing their acceptance stamps thereto,
and shall purchase same as provided in Section 2.10.
SECTION 2.12 PAYMENT OF BANKERS' ACCEPTANCES. The Bankers' Acceptances
shall be payable in accordance with the following provisions:
(a) If such Bankers' Acceptances are held by or presented to the
Accepting Lender or the Administrative Agent, the Company shall pay to the
Administrative Agent for the account of each Lender an amount equal to the face
amount of the Bankers' Acceptances of such Lender on their respective maturity
dates. In the event that any Bankers' Acceptance is presented to the Company,
rather than the Accepting Lender thereof, for payment on its respective maturity
date and the Company shall have made payments to the holders thereof, then the
Company shall give notice to the Administrative Agent to such effect together
with the original cancelled Bankers' Acceptance and the Administrative Agent
shall promptly notify the Lenders.
(b) In the event the Company fails to notify the Administrative Agent in
writing, not later than 12:00 Noon, one (1) Business Day prior to any maturity
date of a Bankers' Acceptance, that the Company intends to pay with its own
funds the amount of the Bankers' Acceptances due on such maturity date, the
Company shall be deemed, for all purposes, to have given the Administrative
Agent notice to convert the amount of such Bankers' Acceptances into a Base Rate
Loan and the provisions of Section 2.02(f) shall apply, except save that:
(i)such maturity date shall be considered to be the borrowing date of such Base
Rate Loan;
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(ii) the proceeds of such Base Rate Loan shall be used to pay the amount of the
Bankers' Acceptance due on such maturity date; and
(iii) on such maturity date, each Lender, instead of making its funds available
to the Administrative Agent to fund such Base Rate Loan, shall first
directly apply its pro rata share of such Loan in payment of its pro rata
share in the amount of its Bankers' Acceptances due on such date.
ARTICLE III: PAYMENTS OF PRINCIPAL AND INTEREST
SECTION 3.01 REPAYMENT OF LOANS. The Company will pay on the Termination
Date to the Administrative Agent for the account of each Lender the then-
outstanding principal amount of each Loan made by such Lender and the amount of
the Acceptance Exposure.
SECTION 3.02 INTEREST.
(a) The Company will pay to the Administrative Agent for the account of
each Lender interest on the unpaid principal amount of each Loan made by such
Lender for the period commencing on the date of such Loan to but excluding the
date such Loan shall be paid in full, at the Base Rate (as in effect from time
to time) plus the Applicable Margin for such Loan, but in no event to exceed the
Highest Lawful Rate.
(b) Accrued interest on each Loan shall be payable quarterly on each
Quarterly Date, except that interest payable after maturity shall be payable
from time to time on demand.
(c) Promptly after the determination of any interest rate provided for
herein or any change therein, the Administrative Agent shall notify the Lenders
to which such interest is payable and the Company.
ARTICLE IV: PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
SECTION 4.01 PAYMENTS. Except to the extent otherwise provided herein,
all payments of principal, interest and other amounts to be made by the Company
under this Agreement, the Notes and the Bankers' Acceptances shall be made in
Dollars, in immediately available funds, to the Administrative Agent at transit
#09591, account number 219-2474-4 maintained by the Administrative Agent at
Royal Bank of Canada, Correspondent Banking Division, Toronto Canada, not later
than 12:00 noon Toronto Time on the date on which such payments shall become due
(each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day). The Company shall, subject to
Section 4.02, at the time of making each payment under this Agreement or any
Note or Bankers' Acceptance, specify to the Administrative Agent the Loans,
Bankers' Acceptances or other amounts payable by the Company hereunder to which
such payment is to be applied (and in the event that it fails to so specify, and
such day is not a Quarterly Date or other day on which a payment of either
interest or principal is due, then such payments shall be applied in the
following order: first, to interest accrued on Loans, second, any excess to
reduce the aggregate principal amount then outstanding on the Loans and, third,
any excess to Bankers' Acceptances; provided, however, that if an Event of
Default has
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occurred and is continuing, the Administrative Agent may distribute such payment
to the Lenders in such manner as it or the Required Lenders may determine to be
appropriate, subject to Section 4.02). Each payment received by the
Administrative Agent under this Agreement or any Note or Bankers' Acceptance for
the account of a Lender shall be paid promptly to such Lender, in immediately
available funds, for account of such Lender's Applicable Lending Office for the
Loan or Bankers' Acceptances in respect of which such payment is made. If the
due date of any payment under this Agreement or any Security Instrument would
otherwise fall on a day which is not a Business Day such date shall be extended
to the next succeeding Business Day and interest shall be payable for any amount
so extended for the period of such extension.
SECTION 4.02 PRO RATA TREATMENT. Except to the extent agreed among the
Lenders or otherwise provided herein: (a) each borrowing from the Lenders under
Section 2.01 shall be made from the Lenders, each payment of commitment fee or
other fees under Section 2.04 shall be made for account of the Lenders, and each
termination or reduction of the amount of the Commitments under Section 2.03
shall be applied to the Commitments of the Lenders, pro rata according to their
respective Commitment Percentages, (b) each payment of Bankers' Acceptances or
principal of Loans by the Company shall be made for account of the Lenders pro
rata in accordance with the aggregate unpaid principal amount of Loans and face
amount of Bankers' Acceptances held or purchased by the Lenders, and (c) 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 due and payable on
such Loans to the respective Lenders.
SECTION 4.03 COMPUTATIONS. Interest on Loans and fees shall be computed
on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable. The Applicable Margin for determining the Stamping
Fee for Bankers' Acceptances shall be computed on the basis of a year of 365
days. Any rates of interest not expressed in this Credit Agreement on the basis
of a 365 day or 366 day year are the equivalent, expressed on a calendar year
basis, of the same rate of interest multiplied by a fraction, the numerator of
which is the actual number of days in the applicable calendar year and the
denominator of which is the number of days on which interest is expressed to be
based.
SECTION 4.04 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. Unless the
Administrative Agent shall have been notified by a Lender or the Company prior
to the date on which a payment is scheduled to be made to the Administrative
Agent of (in the case of a Lender) the proceeds of a Borrowing to be made by it
hereunder or (in the case of the Company) a payment to the Administrative Agent
for account of one or more of the Lenders hereunder (such payment being herein
called a "Required Payment"), which notice shall be effective upon receipt, that
it does not intend to make the Required Payment to the Administrative Agent, the
Administrative Agent may assume that 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 such Lender
or the Company (as the case may be) has not in fact made the Required Payment to
the Administrative Agent, the recipient(s) of such payment shall, on demand,
repay to the Administrative Agent the amount so made available together with
interest thereon in respect of each day during the period commencing on the date
such amount was so made available by the Administrative Agent until the date the
Administrative Agent recovers such amount at a rate per annum equal to the Base
Rate for such day, but in no event to exceed the Highest Lawful Rate.
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SECTION 4.05 SHARING OF PAYMENTS, ETC.
(a) The Company agrees that, in addition to (and without limitation of) any
right of set-off, bankers' lien or counterclaim a Lender may otherwise have,
each Lender shall be entitled (after consultation with the Administrative
Agent), at its option, during the existence of an Event of Default, to offset
balances held by it for account of the Company 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 Bankers' Acceptances, or any other amount payable to such
Lender hereunder which is not paid when due (regardless of whether such balances
are then due to the Company), in which case such Lender shall promptly notify
the Company and the Administrative Agent thereof, provided that such Lender's
failure to give such notice shall not affect the validity thereof.
(b) If any Lender shall obtain payment of any principal of or interest on
any Loan or reimbursement on any Bankers' Acceptance made available to the
Company under this Agreement through the exercise of any right of set-off,
banker's lien or counterclaim or similar right or otherwise, and, as a result of
such payment, such Lender shall have received a greater percentage of the
principal or interest or reimbursement obligation then due hereunder by the
Company to such Lender than the percentage received by any other Lenders, such
Lender 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
Bankers' Acceptances made by such other Lenders (or in interest due thereon, as
the case may be), and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit of such
excess payment (net of any expenses which may be incurred by such Lender in
obtaining or preserving such excess payment) pro rata in accordance with the
aggregate unpaid principal and interest on the Loans and reimbursement
obligations on the Bankers' Acceptances held or accepted by 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. The Company agrees that any Lender so purchasing
a participation (or direct interest) in the Loans or Bankers' Acceptances made
by other Lenders (or in interest due thereon, as the case may be) may exercise
all rights of set-off, bankers' lien, counterclaim or similar rights with
respect to such participation as fully as if such Lender were a direct holder of
Loans or acceptor of Bankers' Acceptances, as the case may be, in the amount of
such participation. Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the 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 4.05 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this Section 4.05 to
share the benefits of any recovery on such secured claim.
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ARTICLE V: YIELD PROTECTION AND ILLEGALITY
SECTION 5.01 ADDITIONAL COSTS.
(a) REGULATORY CHANGE. The Company shall pay directly to each Lender from
time to time such amounts as such Lender may determine to be necessary to
compensate it for any increased costs incurred by the Lender which such Lender
determines are attributable to its making or maintaining any Loans or Bankers'
Acceptances or its obligation to make any Loans or Bankers' Acceptances
hereunder, or any reduction in any amount receivable by such Lender hereunder in
respect of any of such Loans or Bankers' Acceptances (such increases in costs
and reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change which: (i) changes the basis of taxation
of any amounts payable to such Lender under this Agreement in respect of any of
such Loans or Bankers' Acceptances (other than franchise taxes, taxes on capital
and/or gross receipts or taxes imposed on the overall net income of such Lender
or of its Applicable Lending Office for any of such Loans or Bankers'
Acceptances by the jurisdiction in which such Lender has its principal office or
such Applicable Lending Office ("Excluded Taxes")); or (ii) imposes or modifies
any reserve, special deposit, minimum capital, capital ratio or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Lender, or any Commitment of such
Lender; or (iii) imposes any other condition affecting this Agreement or its
Loans or Bankers' Acceptances (or any of such extensions of credit or
liabilities) or Commitment. If any Lender requests compensation from the Company
under this Section 5.01, the Company may, by notice to such Lender (with a copy
to the Administrative Agent), suspend the obligation of such Lender to make
additional Loans or accept and purchase additional Bankers' Acceptances of the
type with respect to which such compensation is requested until the Regulatory
Change giving rise to such request ceases to be in effect (in which case the
provisions of Section 5.04 shall be applicable).
(b) CAPITAL ADEQUACY. 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 for any costs which it
determines are attributable to the maintenance by such Lender (or any Applicable
Lending Office), pursuant to any law or regulation or any interpretation,
directive or request (whether or not having the force of law) of any court or
governmental or monetary authority following any Regulatory Change, of capital
in respect of its Commitment, 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) to a level below that which such
Lender (or any Applicable Lending Office) could have achieved but for such law,
regulation, interpretation, directive or request.
(c) COMPENSATION PROCEDURE. Each Lender will notify the Company of any
event occurring after the date of this Agreement which will entitle such Lender
to compensation pursuant to this Section 5.01 as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation, and
will furnish the Company with a certificate setting forth the basis and amount
of each request by such Lender for compensation under this Section 5.01.
Determinations and allocations by any Lender for purposes of this Section 5.01
of the effect of any Regulatory Change pursuant to Section 5.01(a), or of the
effect of capital maintained pursuant to Section 5.01(b), on its costs or rate
of return of accepting and purchasing Bankers' Acceptances or maintaining Loans
or its obligation to make
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Loans or accept and purchase Bankers' Acceptances, or on amounts receivable by
it in respect of Loans or Bankers' Acceptances, and of the additional amounts
required to compensate such Lender under this Section 5.01, shall be conclusive,
provided that such determinations and allocations are made on a reasonable
basis.
SECTION 5.02 ILLEGALITY. If the introduction of or any change in,
applicable law, regulation, treaty or official directive, or regulatory
requirement or in the interpretation or application thereof by any court or by
any governmental authority charged with the administration thereof, makes it
unlawful, or prohibited for any Lender (in its sole opinion) to accept,
purchase, trade or hold Bankers' Acceptances, such Lender may, by written notice
to the Administrative Agent, which notice shall be promptly communicated by the
Administrative Agent to the Company, terminate its obligations to accept,
purchase, trade or hold Bankers' Acceptances and the Company shall prepay such
Bankers' Acceptances then outstanding forthwith together with any payments
required under Section 5.05, or at the end of such period as such Lender in its
discretion agrees, (it being understood and agreed that the Lender shall use its
best efforts to permit such prepayment to occur on the maturity date of Bankers'
Acceptances, if this is legally permissible) together with all additional
amounts as may be applicable to the date of payment and may reborrow, subject to
the terms hereof, any amount which has been prepaid pursuant to this Section
5.02, by way of one of the remaining legal basis of Borrowings available under
this Agreement.
SECTION 5.03 ADDITIONAL COST IN RESPECT OF TAX.
(a) PAYMENTS FREE AND CLEAR. Each payment to be made by the Company
hereunder or in connection herewith to any Lender or any other Person shall be
made free and clear of and without deduction for or on account of any Tax unless
the Company is required to make such payment subject to the deduction or
withholding of Tax, in which case (except for Excluded Taxes) the sum payable by
the Company in respect of which such deduction or withholding is required to be
made shall be increased to the extent necessary to ensure that, after the making
of such deduction or withholding, such other Person receives and retains (free
from any liability in respect of any such deduction or withholding) a net sum
equal to the sum which it would have received and so retained had not such
deduction or withholding been made or required to be made.
(b) OBLIGATION TO INDEMNIFY. If (i) any Lender or the Administrative
Agent, on behalf of such Lender or on its own behalf, is required by law to make
any payment on account of any Tax (except for Excluded Taxes) on or in relation
to any sum received or receivable hereunder by such Lender or the Administrative
Agent, or (ii) any liability in respect of any such payment is asserted,
imposed, levied or assessed against such Lender or the Administrative Agent (as
the case may be) against such payment or liability, the Company shall promptly
pay to the Administrative Agent or such Lender, as the case may be, any
additional amounts necessary to compensate the Administrative Agent or such
Lender for such payment together with any interest, penalties and expenses
payable or incurred in connection therewith. If the Administrative Agent or a
Lender has paid over on account of Tax (other than Excluded Taxes) an amount
paid to the Administrative Agent or such Lender by the Company pursuant to the
foregoing indemnification and the amount so paid over is subsequently refunded
to the Administrative Agent or such Lender, in whole or in part, the
Administrative Agent or such Lender, as appropriate, shall promptly remit such
amount refunded to the Company.
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(c) COMPENSATION PROCEDURE. A Lender intending to make a claim pursuant to
Section 5.03 shall deliver to the Administrative Agent, reasonably promptly
after becoming aware of the circumstances giving rise to the claim, a
certificate to that effect specifying the event by reason of which it is
entitled to make such claim and setting out in reasonable detail the basis and
computation of such claim. The Administrative Agent shall promptly deliver to
the Company a copy of such certificate or its own certificate if it intends to
make such a claim.
(d) NOTICE OF CHANGES; PROOF OF PAYMENT. If at any time the Company is
required by law to make any deduction or withholding from any sum payable by it
hereunder or in connection herewith (or if thereafter there is any change in the
rates at which or the manner in which such deductions or withholdings are
calculated) the Company shall promptly notify the Administrative Agent thereof.
If the Company makes any payment hereunder or in connection herewith in respect
of which it is required by law to make any deduction or withholding it shall pay
the full amount to be deducted or withheld to the relevant taxation or other
authority within the time allowed for such payment under applicable law and
shall deliver to the Administrative Agent within thirty (30) days after it has
made such payment to the applicable authority (i) a receipt issued by such
authority or (ii) other evidence reasonably satisfactory to the Administrative
Agent evidencing the payment to such authority of all amounts so required to be
deducted or withheld from such payment.
SECTION 5.04 BASE RATE LOANS PURSUANT TO SECTIONS 5.01 AND 5.02. If the
obligation of any Lender to accept and purchase Bankers' Acceptances shall be
suspended pursuant to Section 5.01 or 5.02 ("Affected Loans"), all Affected
Loans which would otherwise be made available by such Lender shall be made
instead as Base Rate Loans (and, if an event referred to in Section 5.01(a) or
Section 5.02 has occurred and such Lender so requests by notice to the Company
with a copy to the Administrative Agent, all Affected Loans of such Lender then
outstanding shall be automatically converted into Base Rate Loans, subject to
Section 5.05, on the date specified by such Lender in such notice) and, to the
extent that Affected Loans are so made as (or converted into) Base Rate Loans,
all payments which would otherwise be applied to such Lender's Affected Loans
shall be applied instead to its Base Rate Loans.
SECTION 5.05 COMPENSATION. The Company shall pay to the Administrative
Agent for account of each Lender, upon the request of such Lender through the
Administrative 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 which such Lender determines are attributable to:
(a) any payment or conversion of a Bankers' Acceptance for any reason
(including, without limitation, the acceleration of the Loans pursuant to
Section 10.01) on a date other than the last day of the Interest Period for such
Bankers' Acceptance; or
(b) any failure by the Company for any reason (including but not limited
to, the failure of any of the conditions precedent specified in Article VI to be
satisfied) to issue a Bankers' Acceptance to such Lender on the date for such
issuance specified in the relevant notice of borrowing given pursuant to Section
2.02.
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SECTION 5.06 AVOIDANCE OF TAXES AND ADDITIONAL COSTS.
(a) CHANGE APPLICABLE FUNDING OFFICE. If a Lender makes any claim under
Section 5.01 or Section 5.03 in respect of Additional Costs or Taxes, such
Lender shall be obligated to use reasonable efforts to designate a different
Applicable Lending Office for the Commitment or the Loans or the Bankers
Acceptances of such Lender affected by such event if such designation will avoid
the need for, or reduce the amount of, such compensation or the imposition of
any Taxes and will not, in the sole opinion of such Lender, be disadvantageous
to such Lender; provided that such Lender shall have no obligation to so
designate an Applicable Lending Office located outside of Canada.
(b) REPLACEMENT. If any Lender claims (i) payment of Additional Costs,
(ii) the inability to make or maintain the Bankers Acceptances pursuant to
Section 5.01 or 5.02 (when such inability is not then being claimed by
substantially all of the Lenders) or (iii) payment of any Taxes pursuant to
Section 5.03, then the Company shall have the right, upon payment of such
requested Additional Costs or Taxes to (i) prepay the Loans made, or repurchase
the Bankers Acceptances discounted, by such Lender and terminate the Commitment
of such Lender on a non pro rata basis or (ii) subject to the approval of the
Administrative Agent (such approval not to be unreasonably withheld or delayed),
find one or more Persons willing to assume the Loans, Commitment and other
obligations of such Lender and replace such Lender pursuant to an Assignment and
Acceptance. Any such assumption shall be effected pursuant to Section 12.03(b).
The Company shall not, however, be entitled to replace any Lender if an event
which with notice or lapse of time, or both, would constitute a Default or an
Event of Default exists at the time.
SECTION 5.07 LIMITATION ON RIGHT TO COMPENSATION. Any demand for
compensation pursuant to Article V (other than Section 5.03) must be made on or
before twelve (12) months after the Lender incurs the expense, cost or economic
loss referred to or such Lender shall be deemed to have waived the right to such
compensation. Any demand for compensation pursuant to Section 5.03 must be made
on or before twenty-four (24) months after the Lender incurs the expense, cost
or economic loss referred to or such Lender shall be deemed to have waived the
right to such compensation.
ARTICLE VI: CONDITIONS PRECEDENT
SECTION 6.01 INITIAL LOAN OR BANKERS' ACCEPTANCE. The obligation of the
Lenders to make the initial Borrowing hereunder is subject to the receipt by the
Administrative Agent of the following documents and satisfaction of the other
conditions provided in this Section 6.01, each of which shall be satisfactory to
the Administrative Agent in form and substance:
(a) A Certificate of the Secretary or Assistant Secretary of the Company
setting forth (i) that the resolutions of its board of directors attached to
such certificate are in full force and effect with respect to the authorization
of the execution, delivery and performance of the obligations contained in the
Notes, this Agreement and the other Security Instruments to which it is a party,
(ii) that the officers of the Company specified in such Secretary's Certificate
are authorized to sign this Agreement, the Notes, and the other Security
Instruments to which it is a party and who, until replaced by another officer or
officers duly authorized for that purpose, will act as the Company's respective
representative for the purposes of signing documents and giving notices and
other communications in connection with this
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Agreement, the Security Instruments to which it is a party and the transactions
contemplated hereby and thereby, (iii) specimen signatures of the officers so
authorized, and (iv) that attached to such certificate are true and complete
copies of the articles and memorandum of the Company. The Administrative Agent
and the Lenders may conclusively rely on such certificate until the
Administrative Agent receives notice in writing from the Company to the
contrary.
(b) A certificate of the Secretary or Assistant Secretary of each Guarantor
setting forth (i) that the resolutions of its board of directors attached to
such certificate are in full force and effect with respect to the authorization
of the execution, delivery and performance of the obligations contained in the
Security Instruments to which it is a party, (ii) that the officers of such
Guarantor specified in such Secretary's Certificate are authorized to sign the
Security Instruments to which it is a party and who, until replaced by another
officer or officers duly authorized for that purpose, will act as its
representative(s) for the purposes of signing documents and giving notices and
other communications in connection with such Security Instruments and the
transactions contemplated thereby, (iii) specimen signatures of the officers so
authorized, and (iv) that attached to such certificate are true and complete
copies of the certificate of incorporation and the bylaws of such Guarantor.
The Administrative Agent and the Lenders may conclusively rely on such
certificate until the Administrative Agent receives notice in writing from such
Guarantor to the contrary.
(c) The following legal opinions:
(i) An opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel to
the Company, addressing such matters as may be reasonably requested by the
Administrative Agent.
(ii) An opinion of Bennett Jones Verchere, special Canadian counsel to the
Company, addressing such matters as may be reasonably requested by the
Administrative Agent.
(iii) An opinion of Ladner Downs, special British Columbia counsel to the
Company, addressing such matters as may be reasonably requested by the
Administrative Agent.
(d) The Notes and bills of exchange referred to in Section 2.01, duly
completed and executed.
(e) The Guaranty Agreements, duly completed and executed.
(f) All conditions precedent to the Initial Funding under the U. S. Credit
Agreement shall have been satisfied to the satisfaction of the Administrative
Agent.
SECTION 6.02 SUBSEQUENT BORROWINGS.
(a) The obligation of the Lenders to provide funds (other than with respect
to Base Rate Loans which are made pursuant to the terms hereof solely to replace
existing Bankers' Acceptances which have matured in the normal course on the
last day of an Interest Period therefor or pursuant to Section 5.02) to the
Company upon the occasion of each borrowing or to accept and purchase a Bankers'
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Acceptance hereunder is subject to the further conditions precedent that, as of
the date of such Loans or acceptance and purchase and after giving effect
thereto: (i) no Default or Event of Default shall have occurred and be
continuing; (ii) no event or circumstance having a Material Adverse Effect shall
have occurred since December 31, 1996, and (iii) the representations and
warranties made by the Company in Article VII and the Security Instruments shall
be true in all material respects on and as of the date of such Borrowing with
the same force and effect as if made on and as of such date and following such
new Borrowing, except as such representations and warranties are modified to
give effect to transactions expressly permitted hereby.
(b) Each notice of borrowing, conversion or renewal (other than Base Rate
Loans which are made pursuant to the terms hereof solely to replace existing
Bankers' Acceptances which have matured in the normal course on the last day of
an Interest Period therefor or pursuant to Section 5.02) and election for
acceptance or renewal of a Bankers' Acceptance by the Company hereunder shall
constitute a certification by the Company to the effect set forth in the
preceding sentence (both as of the date of such notice and, unless the Company
otherwise notifies the Administrative Agent, immediately following such
Borrowing).
ARTICLE VII: REPRESENTATIONS AND WARRANTIES
SECTION 7.01 INCORPORATION BY REFERENCE. Except as expressly stated in
this Agreement, each of the representations and warranties contained in Article
VII of the U. S. Credit Agreement (together with the relevant provisions of any
other Section or Sections to which they refer, including definitions) is hereby
incorporated by reference into this Agreement and made a part of this Agreement
to the same extent as if those terms were set forth in full herein, provided
that, as and when appropriate, in the context: (a) any reference to "Company"
shall be deemed a reference to UMC Resources Canada Ltd.; (b) any reference to
the "Guarantors" shall be deemed a reference to United Meridian and Petroleum;
(c) any references to U.S. Governmental Requirements shall, when appropriate in
the context, be deemed to be references to corresponding Canadian Governmental
Requirements governing such subject matter, if such exist; and (d) any other use
of any capitalized term defined in both this Agreement and the U. S. Credit
Agreement shall be deemed to refer to such term as defined in this Agreement,
where appropriate in the context. As so incorporated, the Company hereby makes
and affirms each such representation and warranty. All amendments,
modifications, approvals, consents and waivers under the U. S. Credit Agreement
entered into by the parties to the U. S. Credit Agreement with respect to
Article VII thereof shall be binding upon the Administrative Agent, the Lenders
and the Company and shall constitute corresponding amendments, modifications,
approvals, consents and waivers hereto.
ARTICLE VIII: AFFIRMATIVE COVENANTS
The Company agrees that, so long as any of the Commitments are in effect
and until payment in full of all Loans and Bankers' Acceptances hereunder, all
interest thereon and all other amounts payable by the Company hereunder:
SECTION 8.01 INCORPORATION BY REFERENCE. The Company will not, and will
not permit any of its Subsidiaries to, enter into, make, take, cause or suffer
to exist any transaction, action, omission or condition, if such transaction,
action, omission or condition constitutes a breach of any covenant set forth
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in Sections 8.01, 8.02, 8.03, 8.04, 8.08 and 8.09 of the U.S. Credit Agreement,
which Sections (together with the relevant provisions of any other Section or
Sections of the U.S. Credit Agreement to which they refer, including
definitions) are hereby incorporated by reference into this Agreement and made a
part of this Agreement to the same extent as if those provisions were set forth
in full herein, provided that, for purposes of this Section, all defined terms
used in such provisions shall have the meanings set forth in the U.S. Credit
Agreement. As so incorporated, the Company hereby repeats and affirms each such
covenant and further covenants and agrees to strictly comply with each such
covenant. All amendments, modifications, approvals, consents and waivers under
the U. S. Credit Agreement entered into by the parties to the U. S. Credit
Agreement with respect to Article VIII thereof shall be binding upon the
Administrative Agent, the Lenders and the Company and shall constitute
corresponding amendments, modifications, approvals, consents and waivers hereto.
ARTICLE IX: NEGATIVE COVENANTS
The Company agrees that, so long as any of the Commitments are in effect
and until payment in full of all Loans and Bankers' Acceptances hereunder, all
interest thereon and all other amounts payable by the Company hereunder:
SECTION 9.01 AFFIRMATION OF CERTAIN COVENANTS IN ARTICLE IX OF THE U. S.
CREDIT AGREEMENT. The Company will not, and will not permit any of its
Subsidiaries to, enter into, make, take, cause or suffer to exist any
transaction, action, omission or condition, if such transaction, action,
omission or condition constitutes a breach of any covenant set forth in Sections
9.01, 9.02, 9.03, 9.06, 9.07, 9.08, 9.09, 9.10, 9.11, 9.13, 9.14, 9.15, 9.16,
9.17, 9.18, 9.20, 9.21 and 9.22 of the U.S. Credit Agreement, which Sections
(together with the relevant provisions of any other Section or Sections of the
U.S. Credit Agreement to which they refer, including definitions) are hereby
incorporated by reference into this Agreement and made a part of this Agreement
to the same extent as if those provisions were set forth in full herein,
provided that, for purposes of this Section, all defined terms used in such
provisions shall have the meanings set forth in the U.S. Credit Agreement. As
so incorporated, the Company hereby repeats and affirms each such covenant and
further covenants and agrees to strictly comply with each such covenant. All
amendments, modifications, approvals, consents and waivers under the U. S.
Credit Agreement, entered into by the parties to the U. S. Credit Agreement with
respect to Article IX thereof, shall be binding upon the Administrative Agent,
the Lenders and the Company and shall constitute corresponding amendments,
modifications, approvals, consents and waivers hereto.
ARTICLE X: EVENTS OF DEFAULT
SECTION 10.01 EVENTS OF DEFAULT. If one or more Events of Default shall
occur and be continuing, then (a) in the case of an Event of Default other than
an Insolvency Event with respect to the Company and either Guarantor, the
Administrative Agent may and, upon request of the Required Lenders, shall, by
notice to the Company, cancel the Commitments and/or 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 and the Bankers'
Acceptances to be forthwith due and payable, whereupon such amounts shall be
immediately due and payable without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other formalities of any kind,
all of which are hereby expressly waived by the Company; and (b) in the case of
the occurrence of an Insolvency Event
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with respect to the Company and either Guarantor, the Commitments shall be
automatically canceled and the principal amount of the Loans, together with
accrued interest, and all other amounts payable by the Company hereunder and
under the Notes and the Bankers' Acceptances shall become automatically
immediately due and payable without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other formalities of any kind,
all of which are hereby expressly waived by the Company and, in either case, the
Administrative Agent and the Lenders may pursue all rights and remedies of the
Lenders and the Administrative Agent under the Security Instruments.
ARTICLE XI: THE ADMINISTRATIVE AGENT
SECTION 11.01 INCORPORATION BY REFERENCE. Sections 11.01 through 11.08 of
the U.S. Credit Agreement (together with the relevant provisions of any other
Section or Sections of the U.S. Credit Agreement to which they refer, including
definitions) are hereby incorporated by reference into this Agreement and made a
part of this Agreement to the same extent as if those provisions were set forth
in full herein, provided that, for purposes of such incorporated Sections, as
appropriate in the context, (i) references therein to "Administrative Agent,"
"Agreement," "Company" and "Lenders" shall mean such terms as defined in this
Agreement; (ii) references therein to "Loans" shall mean "Loans" and "Bankers
Acceptances" as such terms are defined in this Agreement; (iii) references
therein to "Notes" shall mean "Notes" and "Bankers Acceptances" as such terms
are defined in this Agreement; and (iv) as appropriate in the context, other
corresponding changes shall be made, mutatis mutandis.
ARTICLE XII: MISCELLANEOUS
SECTION 12.01 INCORPORATION BY REFERENCE. Sections 12.01, 12.02, 12.03,
12.05, 12.07, 12.08, 12.09, 12.11, 12.12, 12.14, 12.15 and 12.18 of the U.S.
Credit Agreement (together with the relevant provisions of any other Section or
Sections of the U.S. Credit Agreement to which they refer, including
definitions) are hereby incorporated by reference into this Agreement and made a
part of this Agreement to the same extent as if those provisions were set forth
in full herein, provided that, for purposes of such incorporated Sections, as
appropriate in the context, (i) references therein to "Administrative Agent,"
"Agreement," "Company" and "Lenders" shall mean such terms as defined in this
Agreement; (ii) references therein to "Loans" shall mean "Loans" and "Bankers
Acceptances" as such terms are defined in this Agreement; (iii) references
therein to "Notes" shall mean "Notes" and "Bankers Acceptances" as such terms
are defined in this Agreement; and (iv) as appropriate in the context, other
corresponding changes shall be made, mutatis mutandis.
SECTION 12.02 AMENDMENTS, ETC. Subject to the terms of the Intercreditor
Agreement, any provision of this Agreement or any other Security Instruments may
be amended, modified or waived as provided in the U. S. Credit Agreement;
provided that no amendment, modification or waiver which extends the maturity of
the Loans or any Bankers' Acceptances, increases the Available Canadian
Commitment, or reduces the interest rate applicable to the Loans or the Stamping
Fee shall be effective without consent of all Lenders.
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SECTION 12.03 ASSIGNMENTS AND PARTICIPATIONS.
(a) The Company may not assign its rights or obligations hereunder without
the prior consent of all of the Lenders and the Administrative Agent.
(b) Each Lender may, upon the written consent of the Company which consent
shall not be unreasonably withheld or delayed, assign to one or more assignees
all or a portion of its rights and obligations under this Agreement pursuant to
an Assignment and Acceptance Agreement substantially in the form of Exhibit C
(an "Assignment and Acceptance") provided, however, that (i) any such assignment
shall be in the aggregate amount of at least $5,000,000 or such lesser amount to
which the Company has consented, (ii) the assignee shall pay to the
Administrative Agent a processing and recordation fee of $2,500; provided that
such fee shall not be payable in conjunction with any assignments occurring
within 30 days of the Effective Date, and (iii) the assignee is a resident of
Canada for purposes of the Income Tax Act (Canada). Any such assignment will
become effective upon the issuance by the Administrative Agent of a letter of
acknowledgment reflecting such assignment and the resultant effects thereof on
the Commitments of the assignor and assignee, and the principal amount
outstanding of the Loans owed to the assignor and assignee, the Administrative
Agent hereby agreeing to effect such issuance no later than five (5) Business
Days after its receipt of an Assignment and Acceptance executed by all parties
thereto. Promptly after receipt of an Assignment and Acceptance executed by all
parties thereto, the Administrative Agent shall send to the Company a copy of
such executed Assignment and Acceptance. Upon receipt of such executed
Assignment and Acceptance, the Company, will, at its own expense, execute and
deliver new Notes to the assignor and/or assignee, as appropriate, in accordance
with their respective interests as they appear on the Administrative Agent's
letter of acknowledgment. Upon the effectiveness of any assignment pursuant to
this Section, the assignee will become a "Lender," if not already a "Lender,"
for all purposes of this Agreement and the other Security Instruments. The
assignor shall be relieved of its obligations hereunder to the extent of such
assignment (and if the assigning Lender no longer holds any rights or
obligations under this Agreement, such assigning Lender shall cease to be a
"Lender" hereunder except for the purposes of Section 12.04 hereof and the
Sections referred to therein). The Administrative Agent will prepare on the
last Business Day of each month during which an assignment has become effective
pursuant to this Section a revised Annex I to the U. S. Credit Agreement giving
effect to all such assignments effected during such month, and will promptly
provide the same to the Company and each of the Lenders.
(c) Each Lender may transfer, grant or assign participations in all or any
part of such Lender's interests hereunder pursuant to this subsection to any
Person, provided that: (i) such Lender shall remain a "Lender" for all purposes
of this Agreement and the transferee of such participation shall not constitute
a "Lender" hereunder; and (ii) no participant under any such participation shall
have rights to approve any amendment to or waiver of this Agreement, the Notes
or any Security Instrument except to the extent such amendment or waiver would
(x) extend the Termination Date, (y) reduce the interest rate (other than as a
result of waiving the applicability of any post-default increases in interest
rates) or fees applicable to any of the Commitments or Loans in which such
participant is participating, or postpone the payment of any thereof, or (z)
release all or substantially all of the collateral (except as expressly provided
in the Security Instruments) supporting any of the Commitments or Loans in which
such participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the
Security Instruments (the participant's rights against the granting Lender in
respect of such participation to be those set forth in the agreement with such
Lender
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creating such participation), and all amounts payable by the Company hereunder
shall be determined as if such Lender had not sold such participation, provided
that if the participant is a resident of Canada for purposes of the Income Tax
Act (Canada) and has its principal office in Canada, such participant shall be
entitled to receive additional amounts under Article V on the same basis as if
it were a Lender. In addition, each agreement creating any participation must
include agreements by the participant to be bound by the provisions of Section
12.14 of the U.S. Credit Agreement as incorporated herein and forbidding the
transfer, assignment or sub-participation of such participation.
(d) The Lenders may furnish any information concerning the Company in the
possession of the Lenders from time to time to assignees and participants
(including prospective assignees and participants); provided that, such Persons
agree in writing to be bound by the provisions of Section 12.14 of the U.S.
Credit Agreement as incorporated herein by Section 12.01.
SECTION 12.04 SURVIVAL. The obligations of the Company, the Agent and the
Lenders under Sections 5.01, 5.03 and 5.05 hereof, and Sections 12.03 and 12.14
of the U.S. Credit Agreement as incorporated herein by Section 12.01 shall
survive the repayment of the Loans and the termination of the Commitments.
SECTION 12.05 GOVERNING LAW; SUBMISSION TO JURISDICTION.
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(A) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ALBERTA, CANADA.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
NOTES, ANY BANKERS' ACCEPTANCE, OR THE OTHER SECURITY INSTRUMENTS MAY BE BROUGHT
IN THE COURTS OF TORONTO, ONTARIO, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE COMPANY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY
LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE AND DOES NOT PRECLUDE THE
ADMINISTRATIVE AGENT OR ANY LENDER FROM OBTAINING JURISDICTION OVER THE COMPANY
IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) Nothing herein shall affect the right of the Administrative Agent or
any Lender or any holder of a Note to serve process in any manner permitted by
law or to commence legal proceedings or otherwise proceed against the Company in
any other jurisdiction.
(d) EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
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OR PROCEEDING TO ENFORCE OR TO DEFEND ANY RIGHTS UNDER THIS AGREEMENT, THE NOTES
OR ANY OTHER SECURITY INSTRUMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT, THE NOTES OR ANY OTHER SECURITY INSTRUMENT AND AGREES THAT
ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY.
SECTION 12.06 EFFECTIVENESS. This Agreement shall not be effective until
the date (the "Effective Date") that it is delivered to the Lenders in Toronto,
Ontario, Canada, accepted by the Lenders in such place, and executed by the
Lenders in such place.
SECTION 12.07 INTERPRETATION OF SECURITY INSTRUMENTS. If in the event of
any conflict between the terms of Articles VII, VIII, IX and X of this Agreement
and the representations, warranties, covenants or events of default contained in
any of the Security Instruments (other than the U. S. Credit Agreement), the
terms of Articles VII, VIII, IX and X of this Agreement, as appropriate, shall
govern.
SECTION 12.08 DEBT CHARACTERIZATION FOR INDENTURE PURPOSES. If so
designated by United Meridian or UMC Canada in its internal records (which
designation may be made in its sole and absolute discretion), any Debt incurred
hereunder and under the U.S. Credit Agreement and all guarantees thereof shall
constitute "Indebtedness" other than "Permitted Indebtedness" (as such terms are
defined in the Indenture) for purposes of the Indenture.
-26-
<PAGE>
The parties hereto have caused this Agreement to be duly executed as
of the day and year first above written.
COMPANY:
UMC RESOURCES CANADA LTD.
By:
-------------------------------
Kevin McMillan
Vice President and Treasurer
10th Floor, First Canadian Centre
Suite 1000
350-7th Avenue S.W.
Calgary, Alberta T2P 3N9
Telecopier No: (403) 298-8984
Telephone No. (403) 264-3333
with a copy to:
1201 Louisiana, Suite 1400
Houston, Texas 77002
Telecopier No.: (713) 653-5024
Telephone No.: (713) 654-9110
Attention: Kevin McMillan
-27-
<PAGE>
THE CHASE MANHATTAN BANK OF CANADA
By:
-------------------------------
Christine Chen
Vice President
Lending Office for Base Rate Loans:
The Chase Manhattan Bank of Canada
1 First Canadian Place
100 King Street West
Suite 6900, P.O. Box 106
Toronto, Ontario M5X 1A4
Address for Notices:
The Chase Manhattan Bank of Canada
1 First Canadian Place
100 King Street West
Suite 6900, P.O. Box 106
Toronto, Ontario M5X 1A4
Attn: Richard Jerome
with a copy to:
Chase Manhattan Southwest
1100 Milam, Suite 2345
Houston, Texas 77002
Telecopier No.: (713) 751-9122
Telephone No.: (713) 751-5661
Attention: Peter Licalzi
-28-
<PAGE>
SOCIETE GENERALE (CANADA)
By:
-------------------------------
George Benay
Vice President
Lending Office for Base Rate Loans:
Societe Generale (Canada)
100 Yonge Street, Scotia Plaza
Suite 1002
Toronto, Ontario, M5C2W1 Canada
Attn: Bert Coish
Address for Notices:
Societe Generale (Canada)
100 Yonge Street, Scotia Plaza
Suite 1002
Toronto, Ontario, M5C2W1 Canada
Attn: Bert Coish
with a copy to:
Societe Generale
1111 Bagby, Suite 2020
Houston, Texas 77002
Telecopier No.: (713) 650-0824
Telephone No.: (713) 759-6318
Attention: Richard Erbert
Vice President
-29-
<PAGE>
THE CHASE MANHATTAN BANK OF CANADA,
as Administrative Agent
By:
-------------------------------
Christine Chen
Vice President
Address for Notices to Chase
Administrative Agent:
The Chase Manhattan Bank of Canada
1 First Canadian Place
100 King Street West
Suite 6900, P.O. Box 106
Toronto, Ontario M5X 1A4
Attn: Richard Jerome
Telecopier No.: (416) 216-4161
Telephone No.: (416) 216-4145
-30-
<PAGE>
EXHIBIT A
FORM OF NOTE
------------
$________________ ______________, 199__
FOR VALUE RECEIVED, UMC RESOURCES CANADA, LTD., a company continued under
the laws of the Province of British Columbia (the "Company"), hereby promises to
pay to the order of ___________________ (the "Lender"), for the account of its
Applicable Lending Office as provided for by the Credit Agreement (as
hereinafter defined), at the Principal Office of The Chase Manhattan Bank of
Canada, as Administrative Agent, the principal sum of _____________________
____________________ ($__________) (or such lesser amount as shall equal the
aggregate unpaid principal amount of the Loans made by the Lender to the Company
under the Credit Agreement) in lawful money of Canada and in immediately
available funds, on the dates and in the principal amounts provided in the
Credit Agreement, and to pay interest on the unpaid principal amount of each
such Loan, at such Principal Office, in like money and funds, for the period
commencing on the date of such Loan until such Loan shall be paid in full, at
the rates per annum and on the dates provided in the Credit Agreement.
The date, amount, interest rate and maturity of each Loan made by the
Lender to the Company, and each payment made on account of the principal
thereof, shall be recorded by the Lender on its books and, prior to any transfer
of this Note, endorsed by the Lender on the schedules attached hereto or any
continuation thereof.
This Note is a Note referred to in that certain Credit Agreement dated as
of March 18, 1997 between the Company, each of the lenders that is a signatory
thereto and The Chase Manhattan Bank of Canada, as the administrative agent (as
such may be amended from time to time, the "Credit Agreement"), and evidences
the Loans made by the Lender thereunder. Capitalized terms used in this Note
have the respective meanings assigned to them in the Credit Agreement.
This Note is issued pursuant to the Credit Agreement and is entitled
to the benefits provided for in the Credit Agreement and the Security
Instruments. The Credit Agreement provides for the acceleration of the maturity
of this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein and other pertinent terms.
A-1
<PAGE>
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE PROVINCE OF ALBERTA, CANADA.
UMC RESOURCES CANADA LTD.
By:
------------------------------
Name:
Title:
A-2
<PAGE>
SCHEDULE
OF
LOAN AND PAYMENTS OF PRINCIPAL AND INTEREST
-------------------------------------------
<TABLE>
<CAPTION>
Amount of Unpaid
Principal Amount of Principal
Amount of Paid or Interest Balance Notation
Date Loan Prepaid Paid of Loan Made by
- ------ --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
- ------ --------- ---------- ---------- ---------- ---------
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</TABLE>
A-3
<PAGE>
EXHIBIT B
FORM OF BANKER'S ACCEPTANCE
---------------------------
B-1
<PAGE>
EXHIBIT C
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
-------------------------
Dated: _______________, 199__
Reference is made to that certain Credit Agreement dated as of March
18, 1997 among UMC Resources Canada, Ltd., a company continued under the laws of
the Province of British Columbia (the "Company"), The Chase Manhattan Bank of
Canada, as Administrative Agent, and the lenders parties thereto (such Credit
Agreement together with all amendments and supplements thereto being the "Credit
Agreement"). Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Credit Agreement. This Assignment
and Acceptance, between the Assignor (as defined and set forth on Schedule I
hereto and made a part hereof) and the Assignee (as defined and set forth on
Schedule I hereto and made a part hereof) is dated as of the Effective Date (as
set forth on Schedule I hereto and made a part hereof).
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date, an undivided interest (the "Assigned Interest") in and to
all the Assignor's rights and obligations under the Credit Agreement respecting
those, and only those, Commitments, Loans and Bankers' Acceptances contained in
the Credit Agreement as are set forth on Schedule I, in a principal amount as
set forth on Schedule I.
2. The Assignor (i) represents and warrants that it owns the
Assigned Interest free and clear from any lien or adverse claim; (ii) other than
the representation and warranty set forth in clause (i) above, makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other instrument, document or agreement delivered in
connection therewith, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, or any other
instrument or document furnished pursuant thereto, other than that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of either United Meridian or the Company or the performance
or observance by United Meridian or any of its Subsidiaries, including the
Company, or of any of their respective obligations under the Credit Agreement,
or any other instrument or document furnished pursuant thereto; and (iv)
attaches the Notes held by it evidencing the Assigned Interest and requests that
the Company exchange such Notes for new Notes payable to the Assignor (if the
Assignor has retained any interest in the Assigned Interest) and new Notes
payable to the Assignee in the respective amounts which reflect the assignment
being made hereby (and after giving effect to any other assignments which have
become effective on the Effective Date).
3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Credit
C-1
<PAGE>
Agreement, together with copies of the financial statements referred to in
Section 7.02, or if later, the most recent financial statements delivered
pursuant to Section 8.01 thereof, and such other documents and information as it
has deemed appropriate to make its own credit analysis; (iii) agrees that it
will, independently and without reliance upon either the Administrative Agent,
any other Lender or the Assignor and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement; (iv) agrees that it
will be bound by the provisions of the Credit Agreement and will perform in
accordance with its terms all the obligations which by the terms of the Credit
Agreement are required to be performed by it and (v) represents and warrants
that it is a resident of Canada for purposes of the Income Tax Act (Canada) and
has its principal office in Canada.
4. Following the execution of this Assignment and Acceptance,
it will be delivered to the Company effective as of the Effective Date (which
Effective Date shall, unless otherwise agreed, be at least five (5) Business
Days after the execution of this Assignment and Acceptance).
5. Upon delivery to the Company, all payments under the Credit
Agreement in respect of the Assigned Interest (including without limitation, all
payments of principal, interest and fees with respect thereto) for the period up
to, but not including, the Effective Date, shall be made to the Assignor, and
for the period from and after the Effective Date shall be made to the Assignee.
Assignor and Assignee hereby agree that if Assignor receives any of the payments
referred to in the preceding sentence which should have been made to Assignee,
or if Assignee receives any of the payments referred to in the previous sentence
which should have been made to Assignor, such payments shall promptly be paid by
Assignor to Assignee, or by Assignee to Assignor, as the case may be, in full.
6. From and after the Effective Date, (i) the Assignee shall be
a party to the Credit Agreement and, to the extent provided in this Assignment
and Acceptance and Section 12.03 of the Credit Agreement, have the rights and
obligations thereunder, and (ii) the Assignor shall, to the extent provided in
this Assignment and Acceptance and Section 12.03 of the Credit Agreement,
relinquish its rights and be released from its obligations under the Credit
Agreement.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ALBERTA, CANADA.
C-2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective duly authorized officers on
Schedule I hereto.
------------------------------------------
as Assignor
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
------------------------------------------
as Assignee
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
C-3
<PAGE>
APPROVED:
UMC RESOURCES CANADA LTD.
By:
---------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK OF CANADA,
as Administrative Agent
By:
---------------------------------------
Name:
Title:
C-4
<PAGE>
SCHEDULE I TO ASSIGNMENT AND ACCEPTANCE
Assignor: __________________________________________________
Total Commitment of Assignor Prior to Effective Date: $_____________
Total Commitment of Assignor After Effective Date: $_____________
Assignee: __________________________________________________
Total Commitment of Assignee Prior to Effective Date: $_____________
Total Commitment of Assignee After Effective Date: $_____________
Effective Date of Assignment: ______________________________, 199__
Amount of Total Commitment Assigned: $______________________
Principal Amount Percentage Assigned
(or amount of Commitment) (Shown as a percentage of
Assigned aggregate Commitments)
------------------------ -------------------------
$______________ ________%
Assignee's
Address for Notice:
______________________________
______________________________
______________________________
Lending Office:
______________________________
______________________________
______________________________
Attn:_________________________
Telex No:_____________________
Telecopy No:__________________
Telephone No:_________________
C-5
<PAGE>
EXHIBIT D
[FORM OF]
BORROWING, RENEWAL AND CONVERSION REQUEST
_____________________, 199__
UMC Resources Canada Ltd., a company continued under the laws of the
Province of British Columbia (the "Company"), pursuant to the Credit Agreement
dated as of March 18, 1997 among the Company, The Chase Manhattan Bank of
Canada, as Administrative Agent, and the lenders parties thereto (such Credit
Agreement together with all amendments and supplements thereto being the "Credit
Agreement"), hereby makes the requests indicated below (unless otherwise defined
herein, capitalized terms are defined in the Credit Agreement):
1. Borrowings:
(a) Aggregate amount of new Borrowings to be $________________;
(b) Requested funding date is _________________, 199__;
(c) $_____________________ of such Borrowings are to be Bankers' Acceptances;
$_____________________ of such Borrowings are to be Base Rate Loans; and
(d) Length of Interest Period for Bankers' Acceptances is:
_________________________.
2. Bankers' Acceptance Renewals for Bankers' Acceptances maturing on
_________________:
(a) Aggregate amount to be renewed as Bankers' Acceptances is $_______________;
(b) Aggregate amount to be converted to Base Rate Loans is $_______________;
(c) Length of Interest Period for renewed (or reissued) Bankers' Acceptances is
________________________.
D-1
<PAGE>
3. Conversion of Outstanding Base Rate Loans by issuance of Bankers'
Acceptances:
Convert $__________________ of the outstanding Base Rate Loans by issuance of
Bankers' Acceptances on ____________________ with an Interest Period of
______________________.
The undersigned certifies that he is the _____________________ of the
Company, and that as such he is authorized to execute this certificate on behalf
of the Company. The undersigned further certifies, represents and warrants on
behalf of the Company that the Company is entitled to receive the requested
Borrowing, continuation or conversion under the terms and conditions of the
Credit Agreement.
UMC RESOURCES CANADA LTD.
By:
------------------------------
Name:
Title:
D-2
<PAGE>
EXHIBIT 4.13
GUARANTY AGREEMENT
Dated as of March 18, 1997
by
UMC Petroleum Corporation
in favor of
The Chase Manhattan Bank of Canada,
as Administrative Agent,
and
The Lenders Now or Hereafter Signatory To The Credit Agreement
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Article I
Definitions and Accounting Matters
Section 1.01 Terms Defined Above................................................... 1
Section 1.02 Certain Definitions................................................... 1
Section 1.03 Credit Agreement Definitions.......................................... 2
Article II
The Guaranty
Section 2.01 Obligations Guaranteed................................................ 2
Section 2.02 Nature of Guaranty.................................................... 2
Section 2.03 Lenders' Rights....................................................... 2
Section 2.04 Guarantor's Waivers................................................... 3
Section 2.05 Maturity of Obligations; Payment...................................... 3
Section 2.06 Lenders' Expenses..................................................... 3
Section 2.07 Obligation............................................................ 3
Section 2.08 Events and Circumstances Not Reducing or Discharging the Guarantor's
Obligations 3
Section 2.09 Subrogation........................................................... 5
Article III
Representations and Warranties
Section 3.01 By the Guarantor...................................................... 5
Article IV
Subordination of Indebtedness
Section 4.01 Subordination of All Guarantor Claims................................. 6
Section 4.02 Claims in Bankruptcy.................................................. 6
Section 4.03 Payments Held in Trust................................................ 6
Section 4.04 Liens Subordinate..................................................... 7
Section 4.05 Notation of Records................................................... 7
Article V
Miscellaneous
Section 5.01 Successors and Assigns................................................ 7
Section 5.02 Notices............................................................... 7
Section 5.03 Authority of Administrative Agent..................................... 7
Section 5.04 CONSTRUCTION.......................................................... 8
Section 5.05 Prior Guaranty........................................................ 8
Section 5.06 Survival of Obligations............................................... 8
Section 5.07 Subject to the Intercreditor Agreement................................ 8
</TABLE>
i
<PAGE>
GUARANTY AGREEMENT
------------------
This Guaranty Agreement dated as of March 18, 1997 is by UMC Petroleum
Corporation, a corporation duly organized and validly existing under the laws of
the state of Delaware ("Guarantor"), in favor of each of the following: each of
the financial institutions that is now or hereafter a signatory to the Credit
Agreement (as defined below) (individually, a "Lender" and, collectively, the
"Lenders"); and The Chase Manhattan Bank of Canada, as administrative agent for
the Lenders (in such capacity, the "Administrative Agent").
Recitals
A. UMC Resources Canada Ltd., a company continued under the laws of the
Province of British Columbia (the "Company"), the Administrative Agent and the
Lenders have executed that certain Credit Agreement of even date herewith (such
credit agreement, as amended, the "Credit Agreement").
B. One of the terms and conditions stated in the Credit Agreement for the
making of the loans and extensions of credit described in the Credit Agreement
is the execution and delivery to the Administrative Agent and the Lenders of
this Guaranty Agreement.
C. NOW, THEREFORE, (i) in order to comply with the terms and conditions
of the Credit Agreement, (ii) to induce the Lenders, at any time or from time to
time, to loan monies, with or without security to or for the account of the
Company in accordance with the terms of the Credit Agreement, and (iii) for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Guarantor hereby agrees as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 TERMS DEFINED ABOVE. As used in this Guaranty Agreement,
the terms "Administrative Agent", "Company", "Credit Agreement", "Guarantor",
"Lender" and "Lenders" shall have the meanings indicated above.
SECTION 1.02 CERTAIN DEFINITIONS. As used in this Guaranty Agreement, the
following terms shall have the following meanings, unless the context otherwise
requires:
"Guarantor Claims" shall have the meaning indicated in Section 4.01.
"Guaranty Agreement" shall mean this Guaranty Agreement, as the same may
from time to time be amended or supplemented.
"Obligations" shall mean (a) the payment and performance of all present and
future indebtedness, obligations and liabilities of the Company and/or the
Guarantor to the Administrative Agent and the Lenders under the Credit
Agreement, including but not limited to, (i) the full and punctual payment of
the Notes issued thereunder, and any and all promissory notes given in
substitution for such Notes or in modification, renewal, extension or
rearrangement thereof in whole or in part, and (ii) the Acceptance Exposure
under all Bankers Acceptances now outstanding or hereafter issued under the
-1-
<PAGE>
Credit Agreement; (b) all obligations of the Guarantor under this Guaranty
Agreement; and (c) all interest (whether pre- or post petition), charges,
expenses, reasonable attorneys' or other fees and any other sums payable to or
incurred by the Administrative Agent and the Lenders in connection with the
execution, administration or enforcement of any of their rights and remedies
hereunder or any other Security Instrument.
SECTION 1.03 CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein, all terms beginning with a capital letter which are not defined herein
shall have the meaning ascribed such terms in the Credit Agreement and in the
Global Credit Agreement dated of even date herewith among Guarantor, UMC
Petroleum Corporation, a Delaware corporation, each of the financial
institutions that is now or hereafter a signatory thereto (collectively, the
"U.S. Lenders"); The Chase Manhattan Bank, as administrative agent for the U.S.
Lenders, Morgan Guaranty Trust Company of New York, as syndication agent for the
U.S. Lenders, NationsBank of Texas, N.A. and Societe Generale, as documentation
agents for the U.S. Lenders, and Banque Paribas, Wells Fargo Bank, N.A., and
Colorado National Bank, as co-agents for the U.S. Lenders.
ARTICLE II
THE GUARANTY
SECTION 2.01 OBLIGATIONS GUARANTEED. The Guarantor hereby irrevocably and
unconditionally guarantees the prompt payment at maturity of the Obligations.
SECTION 2.02 NATURE OF GUARANTY. This guaranty is an absolute,
irrevocable, completed and continuing guaranty of payment and not a guaranty of
collection, and no notice of the Obligations or any extension of credit already
or hereafter contracted by or extended to the Company need be given to the
Guarantor. The guaranty evidenced hereby is joint and several with all other
guarantees of the Obligations. This guaranty may not be revoked by the
Guarantor and shall continue to be effective with respect to debt under the
Obligations arising or created after any attempted revocation by the Guarantor
and shall remain in full force and effect until the Obligations are paid in full
and the Aggregate Commit ments are terminated, notwithstanding that from time
to time prior thereto no Obligations may be outstanding. The Company, the
Administrative Agent and the Lenders may modify, alter, rearrange, extend for
any period and/or renew from time to time, the Obligations and the
Administrative Agent and the Lenders may waive any Default or Events of Default
without notice to the Guarantor and in such event the Guarantor will remain
fully bound hereunder on the Obligations. Subject to the terms of the Credit
Agreement, this Guaranty Agreement may be enforced by the Administrative Agent
and/or the Lenders and any subsequent holder of the Obligations and shall not be
discharged by the assignment or negotiation of all or part of the Obligations.
The Guarantor hereby expressly waives presentment, demand, notice of non-
payment, protest and notice of protest and dishonor, notice of Event of Default,
notice of intent to accelerate the maturity and notice of acceleration of the
maturity and any other notice in connection with the Obligations, and also
notice of acceptance of this Guaranty Agreement, acceptance on the part of the
Administrative Agent and the Lenders being conclusively presumed by their
request for this Guaranty Agreement and delivery of the same to the
Administrative Agent.
SECTION 2.03 LENDERS' RIGHTS. Subject to the terms of the Credit
Agreement, the Guarantor authorizes the Lenders (or the Administrative Agent on
behalf of the Lenders), without notice or demand and without affecting the
Guarantor's obligation hereunder, to take and hold security for the payment
-2-
<PAGE>
of the Obligations, and exchange, enforce, waive and release any such security;
and to apply such security and direct the order or manner of sale thereof as the
Administrative Agent and the Lenders in their discretion may determine; and to
obtain a guaranty of the Obligations from any one or more Persons and at any
time or times to enforce, waive, rearrange, modify, limit or release any of such
other Persons from their obligations under such guaranties.
SECTION 2.04 GUARANTOR'S WAIVERS. The Guarantor waives any right to
require the Administrative Agent and the Lenders to (a) proceed against the
Company or any other Person liable on the Obligations, (b) enforce their rights
against any other guarantor of the Obligations, (c) proceed or enforce their
rights against or exhaust any security given to secure the Obligations, (d) have
the Company joined with the Guarantor in any suit arising out of this Guaranty
Agreement and/or the Obligations, or (e) pursue any other remedy whatsoever.
Neither the Administrative Agent nor the Lenders shall be required to mitigate
damages or take any action to reduce, collect or enforce the Obligations. The
Guarantor waives any defense arising by reason of any disability, lack of
corporate authority or power, or other defense of the Company or any other
guarantor of the Obligations, and shall remain liable hereon regardless of
whether the Company or any other guarantor be found not liable thereon for any
reason.
SECTION 2.05 MATURITY OF OBLIGATIONS; PAYMENT. The Guarantor agrees that
if the maturity of the Obligations is accelerated by bankruptcy or otherwise,
such maturity shall also be deemed accelerated for the purpose of this Guaranty
Agreement without demand or notice to the Guarantor. The Guarantor will,
forthwith upon notice from the Administrative Agent of the Company's failure to
pay the Obligations at maturity, pay to the Administrative Agent for the benefit
of the Administrative Agent and the Lenders at the Administrative Agent's
Principal Office, the amount due and unpaid by the Company and guaranteed
hereby. The failure of the Administrative Agent to give this notice shall not
in any way release the Guarantor hereunder.
SECTION 2.06 LENDERS' EXPENSES. If the Guarantor fails to pay the
Obligations after notice from the Administrative Agent of the Company's failure
to pay any Obligations at maturity (whether by acceleration or otherwise), and
if the Administrative Agent or the Lenders obtain the services of an attorney
for collection of amounts owing by the Guarantor hereunder, or obtaining advice
of counsel in respect of any of their rights under this Guaranty Agreement, or
if suit is filed to enforce this Guaranty Agreement, or if proceedings are had
in any bankruptcy, receivership or other judicial proceedings for the
establishment or collection of any amount owing by the Guarantor hereunder, or
if any amount owing by the Guarantor hereunder is collected through such
proceedings, the Guarantor agrees to pay to the Administrative Agent at its
Principal Office the reasonable attorneys' fees of the Administrative Agent and
the Lenders.
SECTION 2.07 OBLIGATION. It is expressly agreed that the obligation of
the Guarantor for the payment of the Obligations guaranteed hereby shall be
primary and not secondary.
SECTION 2.08 EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING THE
GUARANTOR'S OBLIGATIONS. The Guarantor hereby consents and agrees to each of
the following to the fullest extent permitted by law, agrees that its
obligations under this Guaranty Agreement shall not be released, diminished,
impaired, reduced or adversely affected by any of the following, and waives any
rights
-3-
<PAGE>
(including without limitation rights to notice) which it might otherwise have as
a result of or in connection with any of the following:
(a) Modifications, etc. Any renewal, extension, modification, or increase
in the amount of the Aggregate Commitments as in effect on the Effective Date,
decrease, alteration or rearrangement of all or any part of the Obligations, any
Security Instrument or any instrument executed in connection therewith, or any
contract or understanding between the Company, any Agent and/or the Lenders, or
any other Person, pertaining to the Obligations;
(b) Adjustment, etc. Any adjustment, indulgence, forbearance or compromise
that might be granted or given by the Administrative Agent or the Lenders to the
Company or the Guarantor or any Person liable on the Obligations;
(c) Condition of the Company or the Guarantor. The insolvency, bankruptcy
arrangement, reorganization, adjustment, composition, liquidation, disability,
dissolution or lack of power of the Company or the Guarantor or any other Person
at any time liable for the payment of all or part of the Obligations; or any
sale, lease or transfer of any or all of the assets of the Company or the
Guarantor, or any changes in the shareholders of the Company or the Guarantor;
(d) Invalidity of Obligations. The invalidity, illegality or
unenforceability of all or any part of the Obligations or any Security
Instrument, including the Notes, for any reason whatsoever, including without
limitation the fact that the Obligations, or any part thereof, exceed the amount
permitted by law, the act of creating the Obligations or any part thereof is
ultra vires, the officers or representatives executing any Security Instrument
or otherwise creating the Obligations acted in excess of their authority, the
Obligations violate applicable usury laws, the Company has valid defenses,
claims or offsets (whether at law, in equity or by agreement) which render the
Obligations wholly or partially uncollectible from the Company, the creation,
performance or repayment of the Obligations (or the execution, delivery and
performance of any Security Instrument) is illegal, uncollectible, legally
impossible or unenforceable, or the Credit Agreement, the Notes or other
Security Instruments have been forged or otherwise are irregular or not genuine
or authentic;
(e) Release of Obligors. Any full or partial release of the obligation of
the Company on the Obligations or any part thereof, of any co-guarantors, or any
other Person now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or assure the
payment of the Obligations or any part thereof, it being recognized,
acknowledged and agreed by the Guarantor that the Guarantor may be required to
pay the Obligations in full without assistance or support of any other Person,
and the Guarantor has not been induced to enter into this Guaranty Agreement on
the basis of a contemplation, belief, understanding or agreement that other
parties other than the Company will be liable to perform the Obligations, or
that the Administrative Agent and the Lenders will look to other parties to
perform the Obligations;
(f) Other Security. The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Obligations;
(g) Release of Collateral, etc. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable
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or unjustifiable impairment) of any collateral, Property or security, at any
time existing in connection with, or assuring or securing payment of, all or any
part of the Obligations;
(h) Care and Diligence. The failure of any Agent or any Lender or any
other Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any part
of such collateral, Property or security;
(i) Status of Liens. The fact that any collateral, security or Lien
contemplated or intended to be given, created or granted as security for the
repayment of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other Lien, it being
recognized and agreed by the Guarantor that the Guarantor is not entering into
this Guaranty Agreement in reliance on, or in contemplation of the benefits of,
the validity, enforceability, collectability or value of any of the collateral
for the Obligations;
(j) Payments Rescinded. Any payment by the Company to any Agent or Lender
is held to constitute a preference under the bankruptcy laws, or for any reason
an Agent or Lender is required to refund such payment or pay such amount to the
Company or someone else; or
(k) Other Actions Taken or Omitted. Any other action taken or omitted to
be taken with respect to the Credit Agreement or the other Security Instruments,
the Obligations, or the security and collateral therefor, whether or not such
action or omission prejudices the Guarantor or increases the likelihood that the
Guarantor will be required to pay the Obligations pursuant to the terms hereof;
it being the unambiguous and unequivocal intention of the Guarantor that the
Guarantor shall be obligated to pay the Obligations when due, notwithstanding
any occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particu larly
described herein, except for the full and final payment and satisfaction of the
Obligations.
SECTION 2.09 SUBROGATION. Until the Obligations have been paid in full
and the Aggregate Commitments terminated, the Guarantor hereby waives any claim,
right or remedy which the Guarantor may now have or hereafter acquire against
the Company which arises out of this Guaranty Agreement or from the performance
by the Guarantor hereunder, including without limitation, any claim, remedy or
right of subrogation, reimbursement, exoneration, indemnification, or
participation in any such claim, right or remedy of any other Person against the
Company. The Guarantor further waives any benefit of any right to participate
in any security now or hereafter held by the Administrative Agent and/or the
Lenders.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 BY THE GUARANTOR. In order to induce the Administrative
Agent and the Lenders to accept this Guaranty Agreement, the Guarantor
represents and warrants to the Administrative Agent and the Lenders (which
representations and warranties will survive the creation of the Obligations and
any extension of credit thereunder) that:
(a) Benefit to the Guarantor. The Company is a wholly-owned Subsidiary of
the Guarantor; and the Guarantor's guaranty pursuant to this Guaranty Agreement
reasonably may be expected to
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benefit, directly or indirectly, the Guarantor; and the Guarantor has determined
that this Guaranty Agreement is necessary and convenient to the conduct,
promotion and attainment of the business of the Guarantor and the Company.
(b) Solvency. It (i) is not insolvent as of the date hereof and will not
be rendered insolvent as a result of this Guaranty Agreement or the transactions
contemplated by the Credit Agreement or the making of the Loans or issuance of
Letters of Credit thereunder, (ii) is not engaged in business or a transaction,
or about to engage in a business or a transaction, for which any Property or
assets remaining with the Guarantor is unreasonably small capital, and (iii)
does not intend to incur, or believe it will incur, debts that will be beyond
its ability to pay as such debts mature.
(c) No Representation by Administrative Agent or Lenders. Neither any
Agent, Lender nor any other Person has made any representation, warranty or
statement to the Guarantor in order to induce the Guarantor to execute this
Guaranty Agreement.
ARTICLE IV
SUBORDINATION OF INDEBTEDNESS
SECTION 4.01 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the
term "Guarantor Claims" shall mean all debts and obligations of the Company to
the Guarantor, whether such debts and obligations now exist or are hereafter
incurred or arise, or whether the obligation of the Company thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or obligations be evidenced by note,
contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such debts or obligations may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by the Guarantor. Except for payments permitted by the Credit
Agreement, until the Obligations shall be paid and satisfied in full, the
Aggregate Commitments are terminated and the Guarantor shall have performed all
of its obligations hereunder and the Security Instruments to which it is a
party, the Guarantor shall not receive or collect, directly or indirectly, from
the Company any amount upon the Guarantor Claims.
SECTION 4.02 CLAIMS IN BANKRUPTCY. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving the Company, the Administrative Agent on behalf of the
Administrative Agent and the Lenders shall have the right to prove their claim
in any proceeding, so as to establish their rights hereunder and receive
directly from the receiver, trustee or other court custodian, dividends and
payments which would otherwise be payable upon Guarantor Claims. The Guarantor
hereby assigns such dividends and payments to the Administrative Agent for the
benefit of the Administrative Agent and the Lenders. Should any Agent or Lender
receive, for application upon the Obligations, any such dividend or payment
which is otherwise payable to the Guarantor, and which, as between the Company
and the Guarantor, shall constitute a credit upon the Guarantor Claims, then
upon payment in full of the Obligations, the Guarantor shall become subrogated
to the rights of the Administrative Agent and the Lenders to the extent that
such payments to the Administrative Agent and the Lenders on the Guarantor
Claims have contributed toward the liquidation of the Obligations, and such
subrogation shall be with respect to that proportion of the Obligations which
would have been unpaid if the Administrative Agent and the Lenders had not
received dividends or payments upon the Guarantor Claims.
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SECTION 4.03 PAYMENTS HELD IN TRUST. In the event that notwithstanding
Sections 4.01 and 4.02, the Guarantor should receive any funds, payments, claims
or distributions which is prohibited by such Sections, the Guarantor agrees (a)
to hold in trust for the Administrative Agent and the Lenders an amount equal to
the amount of all funds, payments, claims or distributions so received, and (b)
that it shall have absolutely no dominion over the amount of such funds,
payments, claims or distributions except to pay them promptly to the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders; and the Guarantor covenants promptly to pay the same to the
Administrative Agent.
SECTION 4.04 LIENS SUBORDINATE. The Guarantor agrees that, until the
Obligations are paid in full and the Aggregate Commitments terminated, any Liens
upon the Company's assets securing payment of the Guarantor Claims shall be and
remain inferior and subordinate to any Liens upon the Company's assets securing
payment of the Obligations, regardless of whether such encumbrances in favor of
the Guarantor, any Agent or Lender presently exist or are hereafter created or
attach. Without the prior written consent of the Administrative Agent, the
Guarantor, during the period in which any of the Obligations are outstanding or
the Aggregate Commitments are in effect, shall not (a) exercise or enforce any
creditor's right it may have against the Company, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceeding
(judicial or otherwise, including without limitation the commencement of or
joinder in any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any Lien, mortgages, deeds of trust, security
interest, collateral rights, judgments or other encumbrances on assets of the
Company held by the Guarantor.
SECTION 4.05 NOTATION OF RECORDS. All promissory notes and, upon the
request of the Administrative Agent, all accounts receivable ledgers or other
evidence of the Guarantor Claims accepted by or held by the Guarantor shall
contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 SUCCESSORS AND ASSIGNS. This Guaranty Agreement is and shall
be in every particular available to the successors and assigns of the
Administrative Agent and the Lenders and is and shall always be fully binding
upon the legal representatives, successors and assigns of the Guarantor,
notwithstanding that some or all of the monies, the repayment of which this
Guaranty Agreement applies, may be actually advanced after any bankruptcy,
receivership, reorganization or other event affecting either the Company or the
Guarantor.
SECTION 5.02 NOTICES. Any notice or demand to the Guarantor under or in
connection with this Guaranty Agreement may be given and shall conclusively be
deemed and considered to have been given and received in the manner and to the
address of the Guarantor as provided for in Section 12.02 of the Credit
Agreement.
SECTION 5.03 AUTHORITY OF ADMINISTRATIVE AGENT. The Guarantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Guaranty Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Guaranty Agreement shall, as between
the Administrative Agent and the Lenders, be
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governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting; and the Guarantor shall not be under
any obligation, or entitlement, to make any inquiry respecting such authority.
SECTION 5.04 CONSTRUCTION. THIS GUARANTY AGREEMENT (INCLUDING, BUT NOT
LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ALBERTA, CANADA.
SECTION 5.05 PRIOR GUARANTY. This Guaranty supersedes and replaces that
certain Guaranty Agreement dated as of July 18, 1994, as amended, given
previously by the Guarantor in favor of the Administrative Agent and others.
SECTION 5.06 SURVIVAL OF OBLIGATIONS. To the extent that any payments on
the Obligations or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Obligations so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Administrative Agent's and the Lenders' Liens, rights,
powers and remedies under this Guaranty Agreement and each Security Instrument
shall continue in full force and effect. In such event, each Security
Instrument shall be automatically reinstated and the Guarantor shall take such
action as may be reasonably requested by the Administrative Agent and the
Lenders to effect such reinstatement.
SECTION 5.07 SUBJECT TO THE INTERCREDITOR AGREEMENT. This Guaranty
Agreement is subject to the terms of the Intercreditor Agreement which (a)
subjects the ability of the Lender Group to pursue remedies hereunder to the
prior consent of the Canadian Lenders and (b) sets forth a priority for the
application of proceeds upon any disposition of amounts received hereunder.
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WITNESS THE EXECUTION HEREOF, effective as of the date first written above.
UMC PETROLEUM CORPORATION
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
UMC Resources Canada Ltd. hereby consents to and agrees to comply with the
terms of this Guaranty Agreement.
UMC Resources Canada Ltd.
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
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EXHIBIT 4.14
GUARANTY AGREEMENT
Dated as of March 18, 1997
by
United Meridian Corporation
in favor of
The Chase Manhattan Bank,
as Administrative Agent,
Morgan Guaranty Trust Company of New York,
as Syndication Agent,
NationsBank of Texas, N.A.
and
Societe Generale,
as Documentation Agents,
Banque Paribas,
Wells Fargo Bank, N.A.,
and
Colorado National Bank,
as Co-Agents,
and
The Lenders Now or Hereafter Signatory To The Credit Agreement
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Page
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<S> <C>
Article I
Definitions and Accounting Matters
Section 1.01 Terms Defined Above.................................... 1
Section 1.02 Certain Definitions.................................... 1
Section 1.03 Credit Agreement Definitions........................... 2
Article II
The Guaranty
Section 2.01 Obligations Guaranteed................................. 2
Section 2.02 Nature of Guaranty..................................... 2
Section 2.03 Lenders' Rights........................................ 2
Section 2.04 Guarantor's Waivers.................................... 3
Section 2.05 Maturity of Obligations; Payment....................... 3
Section 2.06 Lenders' Expenses...................................... 3
Section 2.07 Obligation............................................. 3
Section 2.08 Events and Circumstances Not Reducing or Discharging
the Guarantor's Obligations........................... 3
Section 2.09 Subrogation............................................ 5
Article III
Representations and Warranties
Section 3.01 By the Guarantor....................................... 5
Article IV
Subordination of Indebtedness
Section 4.01 Subordination of All Guarantor Claims.................. 6
Section 4.02 Claims in Bankruptcy................................... 6
Section 4.03 Payments Held in Trust................................. 6
Section 4.04 Liens Subordinate...................................... 7
Section 4.05 Notation of Records.................................... 7
Article V
Miscellaneous
Section 5.01 Successors and Assigns................................. 7
Section 5.02 Notices................................................ 7
Section 5.03 Authority of Administrative Agent...................... 7
Section 5.04 CONSTRUCTION........................................... 8
Section 5.05 Prior Guaranty......................................... 8
Section 5.06 Survival of Obligations................................ 8
Section 5.07 Subject to the Intercreditor Agreement................. 8
</TABLE>
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GUARANTY AGREEMENT
------------------
This Guaranty Agreement dated as of March 18, 1997 is by United
Meridian Corporation, a corporation duly organized and validly existing under
the laws of the state of Delaware ("Guarantor"), in favor of each of the
following: each of the financial institutions that is now or hereafter a
signatory to the Credit Agreement (as defined below) (individually, a "Lender"
and, collectively, the "Lenders"); The Chase Manhattan Bank, as administrative
agent for the Lenders (in such capacity, the "Administrative Agent"), Morgan
Guaranty Trust Company of New York, as syndication agent for the Lenders (in
such capacity, the "Syndication Agent"), NationsBank of Texas, N.A. and Societe
Generale, as documentation agents for the Lenders (in such capacity, the
"Documentation Agents"), and Banque Paribas, Wells Fargo Bank, N.A., and
Colorado National Bank, as co-agents for the Lenders (in such capacity, the "Co-
Agents").
Recitals
A. The Guarantor and UMC Petroleum Corporation, a corporation duly
organized and validly existing under the laws of the state of Delaware (the
"Company"), the Administrative Agent, the Syndication Agent, the Documentation
Agents, the Co-Agents (collectively the "Agents") and the Lenders have executed
that certain Credit Agreement of even date herewith (such credit agreement, as
amended, the "Credit Agreement").
B. One of the terms and conditions stated in the Credit Agreement for the
making of the loans and extensions of credit described in the Credit Agreement
is the execution and delivery to the Agents and the Lenders of this Guaranty
Agreement.
C. NOW, THEREFORE, (i) in order to comply with the terms and conditions
of the Credit Agreement, (ii) to induce the Lenders, at any time or from time to
time, to loan monies, with or without security to or for the account of the
Company in accordance with the terms of the Credit Agreement, and (iii) for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Guarantor hereby agrees as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 TERMS DEFINED ABOVE. As used in this Guaranty Agreement,
the terms "Administrative Agent", "Agents", "Co-Agents", "Company", "Credit
Agreement", "Documentation Agents", "Guarantor", "Lender", "Lenders" and
"Syndication Agent" shall have the meanings indicated above.
SECTION 1.02 CERTAIN DEFINITIONS. As used in this Guaranty Agreement, the
following terms shall have the following meanings, unless the context otherwise
requires:
"Guarantor Claims" shall have the meaning indicated in Section 4.01.
"Guaranty Agreement" shall mean this Guaranty Agreement, as the same may
from time to time be amended or supplemented.
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"Obligations" shall mean (a) the payment and performance of all present and
future indebtedness, obligations and liabilities of the Company and/or the
Guarantor to the Agents and the Lenders under the Credit Agreement, including
but not limited to, (i) the full and punctual payment of the Notes issued
thereunder, and any and all promissory notes given in substitution for such
Notes or in modification, renewal, extension or rearrangement thereof in whole
or in part, and (ii) the reimbursement and other obligations of the Company
under and with respect to Letters of Credit and Letter of Credit Agreements now
outstanding or hereafter issued under the Credit Agreement; (b) all obligations
of the Guarantor under this Guaranty Agreement; and (c) all interest (whether
pre- or post petition), charges, expenses, reasonable attorneys' or other fees
and any other sums payable to or incurred by the Agents and the Lenders in
connection with the execution, administration or enforcement of any of their
rights and remedies hereunder or any other Security Instrument.
SECTION 1.03 CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein, all terms beginning with a capital letter which are defined in the
Credit Agreement shall have the same meanings herein as therein.
ARTICLE II
THE GUARANTY
SECTION 2.01 OBLIGATIONS GUARANTEED. The Guarantor hereby irrevocably and
unconditionally guarantees the prompt payment at maturity of the Obligations.
SECTION 2.02 NATURE OF GUARANTY. This guaranty is an absolute,
irrevocable, completed and continuing guaranty of payment and not a guaranty of
collection, and no notice of the Obligations or any extension of credit already
or hereafter contracted by or extended to the Company need be given to the
Guarantor. The guaranty evidenced hereby is joint and several with all other
guarantees of the Obligations. This guaranty may not be revoked by the Guarantor
and shall continue to be effective with respect to debt under the Obligations
arising or created after any attempted revocation by the Guarantor and shall
remain in full force and effect until the Obligations are paid in full and the
Aggregate Commit ments are terminated, notwithstanding that from time to time
prior thereto no Obligations may be outstanding. The Company, the Agents and the
Lenders may modify, alter, rearrange, extend for any period and/or renew from
time to time, the Obligations and the Agents and the Lenders may waive any
Default or Events of Default without notice to the Guarantor and in such event
the Guarantor will remain fully bound hereunder on the Obligations. Subject to
the terms of the Credit Agreement, this Guaranty Agreement may be enforced by
the Agents and/or the Lenders and any subsequent holder of the Obligations and
shall not be discharged by the assignment or negotiation of all or part of the
Obligations. The Guarantor hereby expressly waives presentment, demand, notice
of non-payment, protest and notice of protest and dishonor, notice of Event of
Default, notice of intent to accelerate the maturity and notice of acceleration
of the maturity and any other notice in connection with the Obligations, and
also notice of acceptance of this Guaranty Agreement, acceptance on the part of
the Agents and the Lenders being conclusively presumed by their request for this
Guaranty Agreement and delivery of the same to the Administrative Agent.
SECTION 2.03 LENDERS' RIGHTS. Subject to the terms of the Credit
Agreement, the Guarantor authorizes the Lenders (or the Administrative Agent on
behalf of the Lenders), without notice or demand and without affecting the
Guarantor's obligation hereunder, to take and hold security for the payment
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of the Obligations, and exchange, enforce, waive and release any such security;
and to apply such security and direct the order or manner of sale thereof as the
Agents and the Lenders in their discretion may determine; and to obtain a
guaranty of the Obligations from any one or more Persons and at any time or
times to enforce, waive, rearrange, modify, limit or release any of such other
Persons from their obligations under such guaranties.
SECTION 2.04 GUARANTOR'S WAIVERS. The Guarantor waives any right to
require the Agents and the Lenders to (a) proceed against the Company or any
other Person liable on the Obligations, (b) enforce their rights against any
other guarantor of the Obligations, (c) proceed or enforce their rights against
or exhaust any security given to secure the Obligations, (d) have the Company
joined with the Guarantor in any suit arising out of this Guaranty Agreement
and/or the Obligations, or (e) pursue any other remedy whatsoever. Neither the
Agents nor the Lenders shall be required to mitigate damages or take any action
to reduce, collect or enforce the Obligations. The Guarantor waives any defense
arising by reason of any disability, lack of corporate authority or power, or
other defense of the Company or any other guarantor of the Obligations, and
shall remain liable hereon regardless of whether the Company or any other
guarantor be found not liable thereon for any reason.
SECTION 2.05 MATURITY OF OBLIGATIONS; PAYMENT. The Guarantor agrees that
if the maturity of the Obligations is accelerated by bankruptcy or otherwise,
such maturity shall also be deemed accelerated for the purpose of this Guaranty
Agreement without demand or notice to the Guarantor. The Guarantor will,
forthwith upon notice from the Administrative Agent of the Company's failure to
pay the Obligations at maturity, pay to the Administrative Agent for the benefit
of the Agents and the Lenders at the Administrative Agent's Principal Office,
the amount due and unpaid by the Company and guaranteed hereby. The failure of
the Administrative Agent to give this notice shall not in any way release the
Guarantor hereunder.
SECTION 2.06 LENDERS' EXPENSES. If the Guarantor fails to pay the
Obligations after notice from the Administrative Agent of the Company's failure
to pay any Obligations at maturity (whether by acceleration or otherwise), and
if the Agents or the Lenders obtain the services of an attorney for collection
of amounts owing by the Guarantor hereunder, or obtaining advice of counsel in
respect of any of their rights under this Guaranty Agreement, or if suit is
filed to enforce this Guaranty Agreement, or if proceedings are had in any
bankruptcy, receivership or other judicial proceedings for the establishment or
collection of any amount owing by the Guarantor hereunder, or if any amount
owing by the Guarantor hereunder is collected through such proceedings, the
Guarantor agrees to pay to the Administrative Agent at its Principal Office the
reasonable attorneys' fees of the Agents and the Lenders.
SECTION 2.07 OBLIGATION. It is expressly agreed that the obligation of
the Guarantor for the payment of the Obligations guaranteed hereby shall be
primary and not secondary.
SECTION 2.08 EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING THE
GUARANTOR'S OBLIGATIONS. The Guarantor hereby consents and agrees to each of
the following to the fullest extent permitted by law, agrees that its
obligations under this Guaranty Agreement shall not be released, diminished,
impaired, reduced or adversely affected by any of the following, and waives any
rights (including without limitation rights to notice) which it might otherwise
have as a result of or in connection with any of the following:
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(a) Modifications, etc. Any renewal, extension, modification, or increase
in the amount of the Aggregate Commitments as in effect on the Effective Date,
decrease, alteration or rearrangement of all or any part of the Obligations, any
Security Instrument or any instrument executed in connection therewith, or any
contract or understanding between the Company, any Agent and/or the Lenders, or
any other Person, pertaining to the Obligations;
(b) Adjustment, etc. Any adjustment, indulgence, forbearance or compromise
that might be granted or given by the Agents or the Lenders to the Company or
the Guarantor or any Person liable on the Obligations;
(c) Condition of the Company or the Guarantor. The insolvency, bankruptcy
arrangement, reorganization, adjustment, composition, liquidation, disability,
dissolution or lack of power of the Company or the Guarantor or any other Person
at any time liable for the payment of all or part of the Obligations; or any
sale, lease or transfer of any or all of the assets of the Company or the
Guarantor, or any changes in the shareholders of the Company or the Guarantor;
(d) Invalidity of Obligations. The invalidity, illegality or
unenforceability of all or any part of the Obligations or any Security
Instrument, including the Notes, for any reason whatsoever, including without
limitation the fact that the Obligations, or any part thereof, exceed the amount
permitted by law, the act of creating the Obligations or any part thereof is
ultra vires, the officers or representatives executing any Security Instrument
or otherwise creating the Obligations acted in excess of their authority, the
Obligations violate applicable usury laws, the Company has valid defenses,
claims or offsets (whether at law, in equity or by agreement) which render the
Obligations wholly or partially uncollectible from the Company, the creation,
performance or repayment of the Obligations (or the execution, delivery and
performance of any Security Instrument) is illegal, uncollectible, legally
impossible or unenforceable, or the Credit Agreement, the Notes or other
Security Instruments have been forged or otherwise are irregular or not genuine
or authentic;
(e) Release of Obligors. Any full or partial release of the obligation of
the Company on the Obligations or any part thereof, of any co-guarantors, or any
other Person now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or assure the
payment of the Obligations or any part thereof, it being recognized,
acknowledged and agreed by the Guarantor that the Guarantor may be required to
pay the Obligations in full without assistance or support of any other Person,
and the Guarantor has not been induced to enter into this Guaranty Agreement on
the basis of a contemplation, belief, understanding or agreement that other
parties other than the Company will be liable to perform the Obligations, or
that the Agents and the Lenders will look to other parties to perform the
Obligations;
(f) Other Security. The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Obligations;
(g) Release of Collateral, etc. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, Property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Obligations;
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(h) Care and Diligence. The failure of any Agent or any Lender or any
other Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any part
of such collateral, Property or security;
(i) Status of Liens. The fact that any collateral, security or Lien
contemplated or intended to be given, created or granted as security for the
repayment of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other Lien, it being
recognized and agreed by the Guarantor that the Guarantor is not entering into
this Guaranty Agreement in reliance on, or in contemplation of the benefits of,
the validity, enforceability, collectability or value of any of the collateral
for the Obligations;
(j) Payments Rescinded. Any payment by the Company to any Agent or Lender
is held to constitute a preference under the bankruptcy laws, or for any reason
an Agent or Lender is required to refund such payment or pay such amount to the
Company or someone else; or
(k) Other Actions Taken or Omitted. Any other action taken or omitted to
be taken with respect to the Credit Agreement or the other Security Instruments,
the Obligations, or the security and collateral therefor, whether or not such
action or omission prejudices the Guarantor or increases the likelihood that the
Guarantor will be required to pay the Obligations pursuant to the terms hereof;
it being the unambiguous and unequivocal intention of the Guarantor that the
Guarantor shall be obligated to pay the Obligations when due, notwithstanding
any occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particu larly
described herein, except for the full and final payment and satisfaction of the
Obligations.
SECTION 2.09 SUBROGATION. Until the Obligations have been paid in full
and the Aggregate Commitments terminated, the Guarantor hereby waives any claim,
right or remedy which the Guarantor may now have or hereafter acquire against
the Company which arises out of this Guaranty Agreement or from the performance
by the Guarantor hereunder, including without limitation, any claim, remedy or
right of subrogation, reimbursement, exoneration, indemnification, or
participation in any such claim, right or remedy of any other Person against the
Company. The Guarantor further waives any benefit of any right to participate
in any security now or hereafter held by the Agents and/or the Lenders.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 BY THE GUARANTOR. In order to induce the Agents and the
Lenders to accept this Guaranty Agreement, the Guarantor represents and warrants
to the Agents and the Lenders (which representations and warranties will survive
the creation of the Obligations and any extension of credit thereunder) that:
(a) Benefit to the Guarantor. The Company is a wholly-owned Subsidiary of
the Guarantor; and the Guarantor's guaranty pursuant to this Guaranty Agreement
reasonably may be expected to benefit, directly or indirectly, the Guarantor;
and the Guarantor has determined that this Guaranty Agreement is necessary and
convenient to the conduct, promotion and attainment of the business of the
Guarantor and the Company.
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(b) Solvency. It (i) is not insolvent as of the date hereof and will not
be rendered insolvent as a result of this Guaranty Agreement or the transactions
contemplated by the Credit Agreement or the making of the Loans or issuance of
Letters of Credit thereunder, (ii) is not engaged in business or a transaction,
or about to engage in a business or a transaction, for which any Property or
assets remaining with the Guarantor is unreasonably small capital, and (iii)
does not intend to incur, or believe it will incur, debts that will be beyond
its ability to pay as such debts mature.
(c) No Representation by Agents or Lenders. Neither any Agent, Lender nor
any other Person has made any representation, warranty or statement to the
Guarantor in order to induce the Guarantor to execute this Guaranty Agreement.
ARTICLE IV
SUBORDINATION OF INDEBTEDNESS
SECTION 4.01 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the
term "Guarantor Claims" shall mean all debts and obligations of the Company to
the Guarantor, whether such debts and obligations now exist or are hereafter
incurred or arise, or whether the obligation of the Company thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or obligations be evidenced by note,
contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such debts or obligations may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by the Guarantor. Except for payments permitted by the Credit
Agreement, until the Obligations shall be paid and satisfied in full, the
Aggregate Commitments are terminated and the Guarantor shall have performed all
of its obligations hereunder and the Security Instruments to which it is a
party, the Guarantor shall not receive or collect, directly or indirectly, from
the Company any amount upon the Guarantor Claims.
SECTION 4.02 CLAIMS IN BANKRUPTCY. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving the Company, the Administrative Agent on behalf of the
Agents and the Lenders shall have the right to prove their claim in any proceed
ing, so as to establish their rights hereunder and receive directly from the
receiver, trustee or other court custodian, dividends and payments which would
otherwise be payable upon Guarantor Claims. The Guarantor hereby assigns such
dividends and payments to the Administrative Agent for the benefit of the Agents
and the Lenders. Should any Agent or Lender receive, for application upon the
Obligations, any such dividend or payment which is otherwise payable to the
Guarantor, and which, as between the Company and the Guarantor, shall constitute
a credit upon the Guarantor Claims, then upon payment in full of the
Obligations, the Guarantor shall become subrogated to the rights of the Agents
and the Lenders to the extent that such payments to the Agents and the Lenders
on the Guarantor Claims have contributed toward the liquidation of the
Obligations, and such subrogation shall be with respect to that proportion of
the Obligations which would have been unpaid if the Agents and the Lenders had
not received dividends or payments upon the Guarantor Claims.
SECTION 4.03 PAYMENTS HELD IN TRUST. In the event that notwithstanding
Sections 4.01 and 4.02, the Guarantor should receive any funds, payments, claims
or distributions which is prohibited by such Sections, the Guarantor agrees (a)
to hold in trust for the Agents and the Lenders an amount equal to the amount of
all funds, payments, claims or distributions so received, and (b) that it shall
have
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absolutely no dominion over the amount of such funds, payments, claims or
distributions except to pay them promptly to the Administrative Agent, for the
benefit of the Agents and the Lenders; and the Guarantor covenants promptly to
pay the same to the Administrative Agent.
SECTION 4.04 LIENS SUBORDINATE. The Guarantor agrees that, until the
Obligations are paid in full and the Aggregate Commitments terminated, any Liens
upon the Company's assets securing payment of the Guarantor Claims shall be and
remain inferior and subordinate to any Liens upon the Company's assets securing
payment of the Obligations, regardless of whether such encumbrances in favor of
the Guarantor, any Agent or Lender presently exist or are hereafter created or
attach. Without the prior written consent of the Administrative Agent, the
Guarantor, during the period in which any of the Obligations are outstanding or
the Aggregate Commitments are in effect, shall not (a) exercise or enforce any
creditor's right it may have against the Company, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceeding
(judicial or otherwise, including without limitation the commencement of or
joinder in any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any Lien, mortgages, deeds of trust, security
interest, collateral rights, judgments or other encumbrances on assets of the
Company held by the Guarantor.
SECTION 4.05 NOTATION OF RECORDS. All promissory notes and, upon the
request of the Administrative Agent, all accounts receivable ledgers or other
evidence of the Guarantor Claims accepted by or held by the Guarantor shall
contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 SUCCESSORS AND ASSIGNS. This Guaranty Agreement is and shall
be in every particular available to the successors and assigns of the Agents and
the Lenders and is and shall always be fully binding upon the legal
representatives, successors and assigns of the Guarantor, notwithstanding that
some or all of the monies, the repayment of which this Guaranty Agreement
applies, may be actually advanced after any bankruptcy, receivership,
reorganization or other event affecting either the Company or the Guarantor.
SECTION 5.02 NOTICES. Any notice or demand to the Guarantor under or in
connection with this Guaranty Agreement may be given and shall conclusively be
deemed and considered to have been given and received in the manner and to the
address of the Guarantor as provided for in Section 12.02 of the Credit
Agreement.
SECTION 5.03 AUTHORITY OF ADMINISTRATIVE AGENT. The Guarantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Guaranty Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Guaranty Agreement shall, as between
the Agents and the Lenders, be governed by the Credit Agreement and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Guarantor, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Lenders with
full and valid authority so to act or
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refrain from acting; and the Guarantor shall not be under any obligation, or
entitlement, to make any inquiry respecting such authority.
SECTION 5.04 CONSTRUCTION. THIS GUARANTY AGREEMENT (INCLUDING, BUT NOT
LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 5.05 PRIOR GUARANTY. This Guaranty supersedes and replaces that
certain Guaranty Agreement dated as of July 18, 1994, as amended, given
previously by the Guarantor in favor of the Administrative Agent and others.
SECTION 5.06 SURVIVAL OF OBLIGATIONS. To the extent that any payments on
the Obligations or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Obligations so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Agents' and the Lenders' Liens, rights, powers and
remedies under this Guaranty Agreement and each Security Instrument shall
continue in full force and effect. In such event, each Security Instrument
shall be automatically reinstated and the Guarantor shall take such action as
may be reasonably requested by the Administrative Agent and the Lenders to
effect such reinstatement.
SECTION 5.07 SUBJECT TO THE INTERCREDITOR AGREEMENT. This Guaranty
Agreement is subject to the terms of the Intercreditor Agreement which (a)
subjects the ability of the Lender Group to pursue remedies hereunder to the
prior consent of the Canadian Lenders and (b) sets forth a priority for the
application of proceeds upon any disposition of amounts received hereunder.
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WITNESS THE EXECUTION HEREOF, effective as of the date first written above.
UNITED MERIDIAN CORPORATION
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
UMC Petroleum Corporation hereby consents to and agrees to comply with the
terms of this Guaranty Agreement.
UMC PETROLEUM CORPORATION
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
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EXHIBIT 4.15
GUARANTY AGREEMENT
Dated as of March 18, 1997
by
United Meridian Corporation
in favor of
The Chase Manhattan Bank of Canada,
as Administrative Agent,
and
The Lenders Now or Hereafter Signatory To The Credit Agreement
<PAGE>
TABLE OF CONTENTS
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Page
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Article I
Definitions and Accounting Matters
Section 1.01 Terms Defined Above.................................... 1
Section 1.02 Certain Definitions.................................... 1
Section 1.03 Credit Agreement Definitions........................... 2
Article II
The Guaranty
Section 2.01 Obligations Guaranteed................................. 2
Section 2.02 Nature of Guaranty..................................... 2
Section 2.03 Lenders' Rights........................................ 2
Section 2.04 Guarantor's Waivers.................................... 3
Section 2.05 Maturity of Obligations; Payment....................... 3
Section 2.06 Lenders' Expenses...................................... 3
Section 2.07 Obligation............................................. 3
Section 2.08 Events and Circumstances Not Reducing or Discharging
the Guarantor's Obligations........................... 3
Section 2.09 Subrogation............................................ 5
Article III
Representations and Warranties
Section 3.01 By the Guarantor....................................... 5
Article IV
Subordination of Indebtedness
Section 4.01 Subordination of All Guarantor Claims.................. 6
Section 4.02 Claims in Bankruptcy................................... 6
Section 4.03 Payments Held in Trust................................. 6
Section 4.04 Liens Subordinate...................................... 7
Section 4.05 Notation of Records.................................... 7
Article V
Miscellaneous
Section 5.01 Successors and Assigns................................. 7
Section 5.02 Notices................................................ 7
Section 5.03 Authority of Administrative Agent...................... 7
Section 5.04 CONSTRUCTION........................................... 8
Section 5.05 Prior Guaranty......................................... 8
Section 5.06 Survival of Obligations................................ 8
Section 5.07 Subject to the Intercreditor Agreement................. 8
i
<PAGE>
GUARANTY AGREEMENT
------------------
This Guaranty Agreement dated as of March 18, 1997 is by United
Meridian Corporation, a corporation duly organized and validly existing under
the laws of the state of Delaware ("Guarantor"), in favor of each of the
following: each of the financial institutions that is now or hereafter a
signatory to the Credit Agreement (as defined below) (individually, a "Lender"
and, collectively, the "Lenders"); and The Chase Manhattan Bank of Canada, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent").
Recitals
A. UMC Resources Canada Ltd., a company continued under the laws of the
Province of British Columbia (the "Company"), the Administrative Agent and the
Lenders have executed that certain Credit Agreement of even date herewith (such
credit agreement, as amended, the "Credit Agreement").
B. One of the terms and conditions stated in the Credit Agreement for the
making of the loans and extensions of credit described in the Credit Agreement
is the execution and delivery to the Administrative Agent and the Lenders of
this Guaranty Agreement.
C. NOW, THEREFORE, (i) in order to comply with the terms and conditions
of the Credit Agreement, (ii) to induce the Lenders, at any time or from time to
time, to loan monies, with or without security to or for the account of the
Company in accordance with the terms of the Credit Agreement, and (iii) for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Guarantor hereby agrees as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 TERMS DEFINED ABOVE. As used in this Guaranty Agreement,
the terms "Administrative Agent", "Company", "Credit Agreement", "Guarantor",
"Lender" and "Lenders" shall have the meanings indicated above.
SECTION 1.02 CERTAIN DEFINITIONS. As used in this Guaranty Agreement, the
following terms shall have the following meanings, unless the context otherwise
requires:
"Guarantor Claims" shall have the meaning indicated in Section 4.01.
"Guaranty Agreement" shall mean this Guaranty Agreement, as the same may
from time to time be amended or supplemented.
"Obligations" shall mean (a) the payment and performance of all present and
future indebtedness, obligations and liabilities of the Company and/or the
Guarantor to the Administrative Agent and the Lenders under the Credit
Agreement, including but not limited to, (i) the full and punctual payment of
the Notes issued thereunder, and any and all promissory notes given in
substitution for such Notes or in modification, renewal, extension or
rearrangement thereof in whole or in part, and (ii) the Acceptance Exposure
under all Bankers Acceptances now outstanding or hereafter issued under the
Credit Agreement; (b) all obligations of the Guarantor under this Guaranty
Agreement; and (c) all interest (whether pre- or post petition), charges,
expenses, reasonable attorneys' or other fees and any
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other sums payable to or incurred by the Administrative Agent and the Lenders in
connection with the execution, administration or enforcement of any of their
rights and remedies hereunder or any other Security Instrument.
SECTION 1.03 CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein, all terms beginning with a capital letter which are not defined herein
shall have the meaning ascribed such terms in the Credit Agreement and in the
Global Credit Agreement dated of even date herewith among Guarantor, UMC
Petroleum Corporation, a Delaware corporation, each of the financial
institutions that is now or hereafter a signatory thereto (collectively, the
"U.S. Lenders"); The Chase Manhattan Bank, as administrative agent for the U.S.
Lenders, Morgan Guaranty Trust Company of New York, as syndication agent for the
U.S. Lenders, NationsBank of Texas, N.A. and Societe Generale, as documentation
agents for the U.S. Lenders, and Banque Paribas, Wells Fargo Bank, N.A., and
Colorado National Bank, as co-agents for the U.S. Lenders.
ARTICLE II
THE GUARANTY
SECTION 2.01 OBLIGATIONS GUARANTEED. The Guarantor hereby irrevocably and
unconditionally guarantees the prompt payment at maturity of the Obligations.
SECTION 2.02 NATURE OF GUARANTY. This guaranty is an absolute,
irrevocable, completed and continuing guaranty of payment and not a guaranty of
collection, and no notice of the Obligations or any extension of credit already
or hereafter contracted by or extended to the Company need be given to the
Guarantor. The guaranty evidenced hereby is joint and several with all other
guarantees of the Obligations. This guaranty may not be revoked by the
Guarantor and shall continue to be effective with respect to debt under the
Obligations arising or created after any attempted revocation by the Guarantor
and shall remain in full force and effect until the Obligations are paid in full
and the Aggregate Commit ments are terminated, notwithstanding that from time
to time prior thereto no Obligations may be outstanding. The Company, the
Administrative Agent and the Lenders may modify, alter, rearrange, extend for
any period and/or renew from time to time, the Obligations and the
Administrative Agent and the Lenders may waive any Default or Events of Default
without notice to the Guarantor and in such event the Guarantor will remain
fully bound hereunder on the Obligations. Subject to the terms of the Credit
Agreement, this Guaranty Agreement may be enforced by the Administrative Agent
and/or the Lenders and any subsequent holder of the Obligations and shall not be
discharged by the assignment or negotiation of all or part of the Obligations.
The Guarantor hereby expressly waives presentment, demand, notice of non-
payment, protest and notice of protest and dishonor, notice of Event of Default,
notice of intent to accelerate the maturity and notice of acceleration of the
maturity and any other notice in connection with the Obligations, and also
notice of acceptance of this Guaranty Agreement, acceptance on the part of the
Administrative Agent and the Lenders being conclusively presumed by their
request for this Guaranty Agreement and delivery of the same to the
Administrative Agent.
SECTION 2.03 LENDERS' RIGHTS. Subject to the terms of the Credit
Agreement, the Guarantor authorizes the Lenders (or the Administrative Agent on
behalf of the Lenders), without notice or demand and without affecting the
Guarantor's obligation hereunder, to take and hold security for the payment of
the Obligations, and exchange, enforce, waive and release any such security; and
to apply such security and direct the order or manner of sale thereof as the
Administrative Agent and the Lenders in their discretion may determine; and to
obtain a guaranty of the Obligations from any one or more
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Persons and at any time or times to enforce, waive, rearrange, modify, limit or
release any of such other Persons from their obligations under such guaranties.
SECTION 2.04 GUARANTOR'S WAIVERS. The Guarantor waives any right to
require the Administrative Agent and the Lenders to (a) proceed against the
Company or any other Person liable on the Obligations, (b) enforce their rights
against any other guarantor of the Obligations, (c) proceed or enforce their
rights against or exhaust any security given to secure the Obligations, (d) have
the Company joined with the Guarantor in any suit arising out of this Guaranty
Agreement and/or the Obligations, or (e) pursue any other remedy whatsoever.
Neither the Administrative Agent nor the Lenders shall be required to mitigate
damages or take any action to reduce, collect or enforce the Obligations. The
Guarantor waives any defense arising by reason of any disability, lack of
corporate authority or power, or other defense of the Company or any other
guarantor of the Obligations, and shall remain liable hereon regardless of
whether the Company or any other guarantor be found not liable thereon for any
reason.
SECTION 2.05 MATURITY OF OBLIGATIONS; PAYMENT. The Guarantor agrees that
if the maturity of the Obligations is accelerated by bankruptcy or otherwise,
such maturity shall also be deemed accelerated for the purpose of this Guaranty
Agreement without demand or notice to the Guarantor. The Guarantor will,
forthwith upon notice from the Administrative Agent of the Company's failure to
pay the Obligations at maturity, pay to the Administrative Agent for the benefit
of the Administrative Agent and the Lenders at the Administrative Agent's
Principal Office, the amount due and unpaid by the Company and guaranteed
hereby. The failure of the Administrative Agent to give this notice shall not
in any way release the Guarantor hereunder.
SECTION 2.06 LENDERS' EXPENSES. If the Guarantor fails to pay the
Obligations after notice from the Administrative Agent of the Company's failure
to pay any Obligations at maturity (whether by acceleration or otherwise), and
if the Administrative Agent or the Lenders obtain the services of an attorney
for collection of amounts owing by the Guarantor hereunder, or obtaining advice
of counsel in respect of any of their rights under this Guaranty Agreement, or
if suit is filed to enforce this Guaranty Agreement, or if proceedings are had
in any bankruptcy, receivership or other judicial proceedings for the
establishment or collection of any amount owing by the Guarantor hereunder, or
if any amount owing by the Guarantor hereunder is collected through such
proceedings, the Guarantor agrees to pay to the Administrative Agent at its
Principal Office the reasonable attorneys' fees of the Administrative Agent and
the Lenders.
SECTION 2.07 OBLIGATION. It is expressly agreed that the obligation of
the Guarantor for the payment of the Obligations guaranteed hereby shall be
primary and not secondary.
SECTION 2.08 EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING THE
GUARANTOR'S OBLIGATIONS. The Guarantor hereby consents and agrees to each of
the following to the fullest extent permitted by law, agrees that its
obligations under this Guaranty Agreement shall not be released, diminished,
impaired, reduced or adversely affected by any of the following, and waives any
rights (including without limitation rights to notice) which it might otherwise
have as a result of or in connection with any of the following:
(a) Modifications, etc. Any renewal, extension, modification, or increase
in the amount of the Aggregate Commitments as in effect on the Effective Date,
decrease, alteration or rearrangement of all or any part of the Obligations, any
Security Instrument or any instrument executed in connection
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therewith, or any contract or understanding between the Company, any Agent
and/or the Lenders, or any other Person, pertaining to the Obligations;
(b) Adjustment, etc. Any adjustment, indulgence, forbearance or compromise
that might be granted or given by the Administrative Agent or the Lenders to the
Company or the Guarantor or any Person liable on the Obligations;
(c) Condition of the Company or the Guarantor. The insolvency, bankruptcy
arrangement, reorganization, adjustment, composition, liquidation, disability,
dissolution or lack of power of the Company or the Guarantor or any other Person
at any time liable for the payment of all or part of the Obligations; or any
sale, lease or transfer of any or all of the assets of the Company or the
Guarantor, or any changes in the shareholders of the Company or the Guarantor;
(d) Invalidity of Obligations. The invalidity, illegality or
unenforceability of all or any part of the Obligations or any Security
Instrument, including the Notes, for any reason whatsoever, including without
limitation the fact that the Obligations, or any part thereof, exceed the amount
permitted by law, the act of creating the Obligations or any part thereof is
ultra vires, the officers or representatives executing any Security Instrument
or otherwise creating the Obligations acted in excess of their authority, the
Obligations violate applicable usury laws, the Company has valid defenses,
claims or offsets (whether at law, in equity or by agreement) which render the
Obligations wholly or partially uncollectible from the Company, the creation,
performance or repayment of the Obligations (or the execution, delivery and
performance of any Security Instrument) is illegal, uncollectible, legally
impossible or unenforceable, or the Credit Agreement, the Notes or other
Security Instruments have been forged or otherwise are irregular or not genuine
or authentic;
(e) Release of Obligors. Any full or partial release of the obligation of
the Company on the Obligations or any part thereof, of any co-guarantors, or any
other Person now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or assure the
payment of the Obligations or any part thereof, it being recognized,
acknowledged and agreed by the Guarantor that the Guarantor may be required to
pay the Obligations in full without assistance or support of any other Person,
and the Guarantor has not been induced to enter into this Guaranty Agreement on
the basis of a contemplation, belief, understanding or agreement that other
parties other than the Company will be liable to perform the Obligations, or
that the Administrative Agent and the Lenders will look to other parties to
perform the Obligations;
(f) Other Security. The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Obligations;
(g) Release of Collateral, etc. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, Property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Obligations;
(h) Care and Diligence. The failure of any Agent or any Lender or any
other Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any part
of such collateral, Property or security;
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(i) Status of Liens. The fact that any collateral, security or Lien
contemplated or intended to be given, created or granted as security for the
repayment of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other Lien, it being
recognized and agreed by the Guarantor that the Guarantor is not entering into
this Guaranty Agreement in reliance on, or in contemplation of the benefits of,
the validity, enforceability, collectability or value of any of the collateral
for the Obligations;
(j) Payments Rescinded. Any payment by the Company to any Agent or Lender
is held to constitute a preference under the bankruptcy laws, or for any reason
an Agent or Lender is required to refund such payment or pay such amount to the
Company or someone else; or
(k) Other Actions Taken or Omitted. Any other action taken or omitted to
be taken with respect to the Credit Agreement or the other Security Instruments,
the Obligations, or the security and collateral therefor, whether or not such
action or omission prejudices the Guarantor or increases the likelihood that the
Guarantor will be required to pay the Obligations pursuant to the terms hereof;
it being the unambiguous and unequivocal intention of the Guarantor that the
Guarantor shall be obligated to pay the Obligations when due, notwithstanding
any occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particu larly
described herein, except for the full and final payment and satisfaction of the
Obligations.
SECTION 2.09 SUBROGATION. Until the Obligations have been paid in full
and the Aggregate Commitments terminated, the Guarantor hereby waives any claim,
right or remedy which the Guarantor may now have or hereafter acquire against
the Company which arises out of this Guaranty Agreement or from the performance
by the Guarantor hereunder, including without limitation, any claim, remedy or
right of subrogation, reimbursement, exoneration, indemnification, or
participation in any such claim, right or remedy of any other Person against the
Company. The Guarantor further waives any benefit of any right to participate
in any security now or hereafter held by the Administrative Agent and/or the
Lenders.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 BY THE GUARANTOR. In order to induce the Administrative
Agent and the Lenders to accept this Guaranty Agreement, the Guarantor
represents and warrants to the Administrative Agent and the Lenders (which
representations and warranties will survive the creation of the Obligations and
any extension of credit thereunder) that:
(a) Benefit to the Guarantor. The Company is a wholly-owned Subsidiary of
the Guarantor; and the Guarantor's guaranty pursuant to this Guaranty Agreement
reasonably may be expected to benefit, directly or indirectly, the Guarantor;
and the Guarantor has determined that this Guaranty Agreement is necessary and
convenient to the conduct, promotion and attainment of the business of the
Guarantor and the Company.
(b) Solvency. It (i) is not insolvent as of the date hereof and will not
be rendered insolvent as a result of this Guaranty Agreement or the transactions
contemplated by the Credit Agreement or the making of the Loans or issuance of
Letters of Credit thereunder, (ii) is not engaged in business or a transaction,
or about to engage in a business or a transaction, for which any Property or
assets remaining
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with the Guarantor is unreasonably small capital, and (iii) does not intend to
incur, or believe it will incur, debts that will be beyond its ability to pay as
such debts mature.
(c) No Representation by Administrative Agent or Lenders. Neither any
Agent, Lender nor any other Person has made any representation, warranty or
statement to the Guarantor in order to induce the Guarantor to execute this
Guaranty Agreement.
ARTICLE IV
SUBORDINATION OF INDEBTEDNESS
SECTION 4.01 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the
term "Guarantor Claims" shall mean all debts and obligations of the Company to
the Guarantor, whether such debts and obligations now exist or are hereafter
incurred or arise, or whether the obligation of the Company thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or obligations be evidenced by note,
contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such debts or obligations may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by the Guarantor. Except for payments permitted by the Credit
Agreement, until the Obligations shall be paid and satisfied in full, the
Aggregate Commitments are terminated and the Guarantor shall have performed all
of its obligations hereunder and the Security Instruments to which it is a
party, the Guarantor shall not receive or collect, directly or indirectly, from
the Company any amount upon the Guarantor Claims.
SECTION 4.02 CLAIMS IN BANKRUPTCY. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving the Company, the Administrative Agent on behalf of the
Administrative Agent and the Lenders shall have the right to prove their claim
in any proceeding, so as to establish their rights hereunder and receive
directly from the receiver, trustee or other court custodian, dividends and
payments which would otherwise be payable upon Guarantor Claims. The Guarantor
hereby assigns such dividends and payments to the Administrative Agent for the
benefit of the Administrative Agent and the Lenders. Should any Agent or Lender
receive, for application upon the Obligations, any such dividend or payment
which is otherwise payable to the Guarantor, and which, as between the Company
and the Guarantor, shall constitute a credit upon the Guarantor Claims, then
upon payment in full of the Obligations, the Guarantor shall become subrogated
to the rights of the Administrative Agent and the Lenders to the extent that
such payments to the Administrative Agent and the Lenders on the Guarantor
Claims have contributed toward the liquidation of the Obligations, and such
subrogation shall be with respect to that proportion of the Obligations which
would have been unpaid if the Administrative Agent and the Lenders had not
received dividends or payments upon the Guarantor Claims.
SECTION 4.03 PAYMENTS HELD IN TRUST. In the event that notwithstanding
Sections 4.01 and 4.02, the Guarantor should receive any funds, payments, claims
or distributions which is prohibited by such Sections, the Guarantor agrees (a)
to hold in trust for the Administrative Agent and the Lenders an amount equal to
the amount of all funds, payments, claims or distributions so received, and (b)
that it shall have absolutely no dominion over the amount of such funds,
payments, claims or distributions except to pay them promptly to the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders; and the Guarantor covenants promptly to pay the same to the
Administrative Agent.
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SECTION 4.04 LIENS SUBORDINATE. The Guarantor agrees that, until the
Obligations are paid in full and the Aggregate Commitments terminated, any Liens
upon the Company's assets securing payment of the Guarantor Claims shall be and
remain inferior and subordinate to any Liens upon the Company's assets securing
payment of the Obligations, regardless of whether such encumbrances in favor of
the Guarantor, any Agent or Lender presently exist or are hereafter created or
attach. Without the prior written consent of the Administrative Agent, the
Guarantor, during the period in which any of the Obligations are outstanding or
the Aggregate Commitments are in effect, shall not (a) exercise or enforce any
creditor's right it may have against the Company, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceeding
(judicial or otherwise, including without limitation the commencement of or
joinder in any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any Lien, mortgages, deeds of trust, security
interest, collateral rights, judgments or other encumbrances on assets of the
Company held by the Guarantor.
SECTION 4.05 NOTATION OF RECORDS. All promissory notes and, upon the
request of the Administrative Agent, all accounts receivable ledgers or other
evidence of the Guarantor Claims accepted by or held by the Guarantor shall
contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 SUCCESSORS AND ASSIGNS. This Guaranty Agreement is and shall
be in every particular available to the successors and assigns of the
Administrative Agent and the Lenders and is and shall always be fully binding
upon the legal representatives, successors and assigns of the Guarantor,
notwithstanding that some or all of the monies, the repayment of which this
Guaranty Agreement applies, may be actually advanced after any bankruptcy,
receivership, reorganization or other event affecting either the Company or the
Guarantor.
SECTION 5.02 NOTICES. Any notice or demand to the Guarantor under or in
connection with this Guaranty Agreement may be given and shall conclusively be
deemed and considered to have been given and received in the manner and to the
address of the Guarantor as provided for in Section 12.02 of the Credit
Agreement.
SECTION 5.03 AUTHORITY OF ADMINISTRATIVE AGENT. The Guarantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Guaranty Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Guaranty Agreement shall, as between
the Administrative Agent and the Lenders, be governed by the Credit Agreement
and by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Guarantor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting; and
the Guarantor shall not be under any obligation, or entitlement, to make any
inquiry respecting such authority.
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SECTION 5.04 CONSTRUCTION. THIS GUARANTY AGREEMENT (INCLUDING, BUT NOT
LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ALBERTA, CANADA.
SECTION 5.05 PRIOR GUARANTY. This Guaranty supersedes and replaces that
certain Guaranty Agreement dated as of July 18, 1994, as amended, given
previously by the Guarantor in favor of the Administrative Agent and others.
SECTION 5.06 SURVIVAL OF OBLIGATIONS. To the extent that any payments on
the Obligations or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Obligations so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Administrative Agent's and the Lenders' Liens, rights,
powers and remedies under this Guaranty Agreement and each Security Instrument
shall continue in full force and effect. In such event, each Security
Instrument shall be automatically reinstated and the Guarantor shall take such
action as may be reasonably requested by the Administrative Agent and the
Lenders to effect such reinstatement.
SECTION 5.07 SUBJECT TO THE INTERCREDITOR AGREEMENT. This Guaranty
Agreement is subject to the terms of the Intercreditor Agreement which (a)
subjects the ability of the Lender Group to pursue remedies hereunder to the
prior consent of the Canadian Lenders and (b) sets forth a priority for the
application of proceeds upon any disposition of amounts received hereunder.
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WITNESS THE EXECUTION HEREOF, effective as of the date first written above.
UNITED MERIDIAN CORPORATION
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
UMC Resources Canada Ltd. hereby consents to and agrees to comply with the
terms of this Guaranty Agreement.
UMC Resources Canada Ltd.
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
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EXHIBIT 4.16
GUARANTY AGREEMENT
Dated as of March 18, 1997
By
NORFOLK HOLDINGS INC.,
as the Guarantor,
in favor of
The Chase Manhattan Bank,
as Administrative Agent,
Morgan Guaranty Trust Company of New York,
as Syndication Agent,
NationsBank of Texas, N.A.
and
Societe Generale,
as Documentation Agents,
Banque Paribas,
Wells Fargo Bank, N.A.,
and
Colorado National Bank,
as Co-Agents,
and
The Lenders Now or Hereafter Signatory To The Credit Agreement
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
Article I
Definitions and Accounting Matters
Section 1.01 Terms Defined Above.................................... 1
Section 1.02 Certain Definitions.................................... 1
Section 1.03 Credit Agreement Definitions........................... 2
Article II
The Guaranty
Section 2.01 Obligations Guaranteed................................. 2
Section 2.02 Nature of Guaranty..................................... 2
Section 2.03 Lenders' Rights........................................ 2
Section 2.04 Guarantor's Waivers.................................... 3
Section 2.05 Maturity of Obligations; Payment....................... 3
Section 2.06 Lenders' Expenses...................................... 3
Section 2.07 Obligation............................................. 3
Section 2.08 Events and Circumstances Not Reducing or Discharging
the Guarantor's Obligations........................... 3
Section 2.09 Limitations on Obligation of the Guarantor Hereunder... 5
Section 2.10 Subrogation............................................ 5
Article III
Representations and Warranties
Section 3.01 By the Guarantor....................................... 6
Article IV
Subordination of Indebtedness
Section 4.01 Subordination of All Guarantor Claims.................. 7
Section 4.02 Claims in Bankruptcy................................... 7
Section 4.03 Payments Held in Trust................................. 8
Section 4.04 Liens Subordinate...................................... 8
Section 4.05 Notation of Records.................................... 8
Article V
Miscellaneous
Section 5.01 Successors and Assigns................................. 8
Section 5.02 Notices................................................ 9
Section 5.03 Authority of Administrative Agent...................... 9
Section 5.04 CONSTRUCTION........................................... 9
Section 5.05 Prior Guaranty......................................... 10
Section 5.06 Entire Agreement....................................... 10
Section 5.07 Survival of Obligations................................ 10
Section 5.08 Subject to the Intercreditor Agreement................. 10
i
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GUARANTY AGREEMENT
------------------
This Guaranty Agreement dated as of March 18, 1997 is by Norfolk
Holdings Inc., a corporation duly organized and validly existing under the laws
of the state of Delaware ("Guarantor"), in favor of each of the following: each
of the financial institutions that is now or hereafter a signatory to the Credit
Agreement (as defined below) (individually, a "Lender" and, collectively, the
"Lenders"); The Chase Manhattan Bank, as administrative agent for the Lenders
(in such capacity, the "Administrative Agent"), Morgan Guaranty Trust Company of
New York, as syndication agent for the Lenders (in such capacity, the
"Syndication Agent"), NationsBank of Texas, N.A. and Societe Generale, as
documentation agents for the Lenders (in such capacity, the "Documentation
Agents"), and Banque Paribas, Wells Fargo Bank, N.A., and Colorado National
Bank, as co-agents for the Lenders (in such capacity, the "Co-Agents").
Recitals
A. United Meridian Corporation, a corporation duly organized and validly
existing under the laws of the state of Delaware ("United Meridian"), UMC
Petroleum Corporation, a corporation duly organized and validly existing under
the laws of the state of Delaware (the "Company"), the Administrative Agent, the
Syndication Agent, the Documentation Agents, the Co-Agents (collectively the
"Agents") and the Lenders have executed that certain Credit Agreement of even
date herewith (such credit agreement, as amended, the "Credit Agreement").
B. One of the terms and conditions stated in the Credit Agreement for the
making of the loans and extensions of credit described in the Credit Agreement
is the execution and delivery to the Agents and the Lenders of this Guaranty
Agreement.
C. NOW, THEREFORE, (i) in order to comply with the terms and conditions
of the Credit Agreement, (ii) to induce the Lenders, at any time or from time to
time, to loan monies, with or without security to or for the account of the
Company in accordance with the terms of the Credit Agreement, and (iii) for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Guarantor hereby agrees as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 TERMS DEFINED ABOVE. As used in This Guaranty Agreement,
the terms "Administrative Agent", "Agents", "Co-Agents", "Company", "Credit
Agreement", "Documentation Agents", "Guarantor", "Lender", "Lenders",
"Syndication Agent" and "United Meridian" shall have the meanings indicated
above.
SECTION 1.02 CERTAIN DEFINITIONS. As used in this Guaranty Agreement, the
following terms shall have the following meanings, unless the context otherwise
requires:
"Guarantor Claims" shall have the meaning indicated in Section 4.01.
"Guaranty Agreement" shall mean this Guaranty Agreement, as the same may
from time to time be amended or supplemented.
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"Obligations" shall mean (a) the payment and performance of all present and
future indebtedness, obligations and liabilities of the Company and/or the
Guarantor to the Agents and the Lenders under the Credit Agreement, including
but not limited to, (i) the full and punctual payment of the Notes issued
thereunder, and any and all promissory notes given in substitution for such
Notes or in modification, renewal, extension or rearrangement thereof in whole
or in part, and (ii) the reimbursement and other obligations of the Company
under and with respect to Letters of Credit and Letter of Credit Agreements now
outstanding or hereafter issued under the Credit Agreement; (b) all obligations
of the Guarantor under this Guaranty Agreement; and (c) all interest (whether
pre or post petition), charges, expenses, reasonable attorneys' or other fees
and any other sums payable to or incurred by the Agents and the Lenders in
connection with the execution, administration or enforcement of any of their
rights and remedies hereunder or any other Security Instrument.
SECTION 1.03 CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein, all terms beginning with a capital letter which are defined in the
Credit Agreement shall have the same meanings herein as therein.
ARTICLE II
THE GUARANTY
SECTION 2.01 OBLIGATIONS GUARANTEED. The Guarantor hereby irrevocably and
unconditionally guarantees the prompt payment at maturity of the Obligations.
SECTION 2.02 NATURE OF GUARANTY. This guaranty is an absolute,
irrevocable, completed and continuing guaranty of payment and not a guaranty of
collection, and no notice of the Obligations or any extension of credit already
or hereafter contracted by or extended to the Company need be given to the
Guarantor. The guaranty evidenced hereby is joint and several with all other
guarantees of the Obligations. This guaranty may not be revoked by the
Guarantor and shall continue to be effective with respect to debt under the
Obligations arising or created after any attempted revocation by the Guarantor
and shall remain in full force and effect until the Obligations are paid in full
and the Aggregate Commit ments are terminated, notwithstanding that from time
to time prior thereto no Obligations may be outstanding. The Company, the
Agents and the Lenders may modify, alter, rearrange, extend for any period
and/or renew from time to time, the Obligations and the Agents and the Lenders
may waive any Default or Events of Default without notice to the Guarantor and
in such event the Guarantor will remain fully bound hereunder on the
Obligations. This Guaranty Agreement may be enforced by the Agents and/or the
Lenders and any subsequent holder of the Obligations and shall not be discharged
by the assignment or negotiation of all or part of the Obligations. The
Guarantor hereby expressly waives presentment, demand, notice of non-payment,
protest and notice of protest and dishonor, notice of Event of Default, notice
of intent to accelerate the maturity and notice of acceleration of the maturity
and any other notice in connection with the Obligations, and also notice of
acceptance of this Guaranty Agreement, acceptance on the part of the Agents and
the Lenders being conclusively presumed by their request for this Guaranty
Agreement and delivery of the same to the Administrative Agent.
SECTION 2.03 LENDERS' RIGHTS. Subject to the terms of the Credit
Agreement, the Guarantor authorizes the Lenders (or the Administrative Agent on
behalf of the Lenders), without notice or demand and without affecting the
Guarantor's obligation hereunder, to take and hold security for the payment
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of the Obligations, and exchange, enforce, waive and release any such security;
and to apply such security and direct the order or manner of sale thereof as the
Agents and the Lenders in their discretion may determine; and to obtain a
guaranty of the Obligations from any one or more Persons and at any time or
times to enforce, waive, rearrange, modify, limit or release any of such other
Persons from their obligations under such guaranties.
SECTION 2.04 GUARANTOR'S WAIVERS. The Guarantor waives any right to
require the Agents and the Lenders to (a) proceed against the Company or any
other Person liable on the Obligations, (b) enforce their rights against any
other guarantor of the Obligations, (c) proceed or enforce their rights against
or exhaust any security given to secure the Obligations, (d) have the Company
joined with the Guarantor in any suit arising out of this Guaranty Agreement
and/or the Obligations, or (e) pursue any other remedy whatsoever. Neither the
Agents nor the Lenders shall be required to mitigate damages or take any action
to reduce, collect or enforce the Obligations. The Guarantor waives any defense
arising by reason of any disability, lack of corporate authority or power, or
other defense of the Company or any other guarantor of the Obligations, and
shall remain liable hereon regardless of whether the Company or any other
guarantor be found not liable thereon for any reason.
SECTION 2.05 MATURITY OF OBLIGATIONS; PAYMENT. The Guarantor agrees that
if the maturity of the Obligations is accelerated by bankruptcy or otherwise,
such maturity shall also be deemed accelerated for the purpose of this Guaranty
Agreement without demand or notice to the Guarantor. The Guarantor will,
forthwith upon notice from the Administrative Agent of the Company's failure to
pay the Obligations at maturity, pay to the Administrative Agent for the benefit
of the Agents and the Lenders at the Administrative Agent's Principal Office,
the amount due and unpaid by the Company and guaranteed hereby. The failure of
the Administrative Agent to give this notice shall not in any way release the
Guarantor hereunder.
SECTION 2.06 LENDERS' EXPENSES. If the Guarantor fails to pay the
Obligations after notice from the Administrative Agent of the Company's failure
to pay any Obligations at maturity (whether by acceleration or otherwise), and
if the Agents or the Lenders obtain the services of an attorney for collection
of amounts owing by the Guarantor hereunder, or obtaining advice of counsel in
respect of any of their rights under this Guaranty Agreement, or if suit is
filed to enforce this Guaranty Agreement, or if proceedings are had in any
bankruptcy, receivership or other judicial proceedings for the establishment or
collection of any amount owing by the Guarantor hereunder, or if any amount
owing by the Guarantor hereunder is collected through such proceedings, the
Guarantor agrees to pay to the Administrative Agent at its Principal Office, the
reasonable attorneys' fees of the Agents and the Lenders.
SECTION 2.07 OBLIGATION. It is expressly agreed that the obligation of
the Guarantor for the payment of the Obligations guaranteed hereby shall be
primary and not secondary.
SECTION 2.08 EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING THE
GUARANTOR'S OBLIGATIONS. The Guarantor hereby consents and agrees to each of
the following to the fullest extent permitted by law, agrees its obligations
under this Guaranty Agreement shall not be released, diminished, impaired,
reduced or adversely affected by any of the following, and waives any rights
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<PAGE>
(including without limitation rights to notice) which it might otherwise have as
a result of or in connection with any of the following:
(a) Modifications, etc. Any renewal, extension, modification, or increase
in the amount of the Aggregate Commitments as in effect on the Effective Date,
decrease, alteration or rearrangement of all or any part of the Obligations,
any Security Instrument or any instrument executed in connection therewith, or
any contract or understanding between the Company, any Agent and/or the Lenders,
or any other Person, pertaining to the Obligations;
(b) Adjustment, etc. Any adjustment, indulgence, forbearance or compromise
that might be granted or given by the Agents or the Lenders to the Company or
the Guarantor or any Person liable on the Obligations;
(c) Condition of the Company or the Guarantor. The insolvency, bankruptcy
arrangement, reorganization, adjustment, composition, liquidation, disability,
dissolution or lack of power of the Company or the Guarantor or any other Person
at any time liable for the payment of all or part of the Obligations; or any
sale, lease or transfer of any or all of the assets of the Company or the
Guarantor, or any changes in the shareholders of the Company or the Guarantor;
(d) Invalidity of Obligations. The invalidity, illegality or
unenforceability of all or any part of the Obligations or any Security
Instrument, including the Notes, for any reason whatsoever, including without
limitation the fact that the Obligations, or any part thereof, exceed the amount
permitted by law, the act of creating the Obligations or any part thereof is
ultra vires, the officers or representatives executing any Security Instrument
acted in excess of their authority, the Obligations violate applicable usury
laws, the Company has valid defenses, claims or offsets (whether at law, in
equity or by agreement) which render the Obligations wholly or partially
uncollectible from the Company, the creation, performance or repayment of the
Obligations (or the execution, delivery and performance of any Security
Instrument) is illegal, uncollectible, legally impossible or unenforceable, or
the Credit Agreement, the Notes or other Security Instruments have been forged
or otherwise are irregular or not genuine or authentic;
(e) Release of Obligors. Any full or partial release of the obligation of
the Company on the Obligations or any part thereof, of any co-guarantors, or any
other Person now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or assure the
payment of the Obligations or any part thereof, it being recognized,
acknowledged and agreed by the Guarantor that the Guarantor may be required to
pay the Obligations in full without assistance or support of any other Person,
and the Guarantor has not been induced to enter into this Guaranty Agreement on
the basis of a contemplation, belief, understanding or agreement that other
parties other than the Company will be liable to perform the Obligations, or
that the Agents and Lenders will look to other parties to perform the
Obligations;
(f) Other Security. The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Obligations;
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(g) Release of Collateral, etc. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, Property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Obligations;
(h) Care and Diligence. The failure of any Agent or Lender or any other
Person to exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of such
collateral, Property or security;
(i) Status of Liens. The fact that any collateral, security or Lien
contemplated or intended to be given, created or granted as security for the
repayment of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other Lien, it being
recognized and agreed by the Guarantor that the Guarantor is not entering into
this Guaranty Agreement in reliance on, or in contemplation of the benefits of,
the validity, enforceability, collectability or value of any of the collateral
for the Obligations;
(j) Payments Rescinded. Any payment by the Company to any Agent or Lender
is held to constitute a preference under the bankruptcy laws, or for any reason
an Agent or Lender is required to refund such payment or pay such amount to the
Company or someone else; or
(k) Other Actions Taken or Omitted. Any other action taken or omitted to
be taken with respect to the Credit Agreement or the other Security Instruments,
the Obligations, or the security and collateral therefor, whether or not such
action or omission prejudices the Guarantor or increases the likelihood that the
Guarantor will be required to pay the Obligations pursuant to the terms hereof;
it being the unambiguous and unequivocal intention of the Guarantor that the
Guarantor shall be obligated to pay the Obligations when due, notwithstanding
any occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particu larly
described herein, except for the full and final payment and satisfaction of the
Obligations.
SECTION 2.09 LIMITATIONS ON OBLIGATION OF THE GUARANTOR HEREUNDER.
(a) Insolvency Limitation. The parties hereto (i) intend that the
obligation of the Guarantor hereunder be limited to the maximum amount that
would not result in the obligation created hereby being avoidable under Section
548 of the Federal Bankruptcy Code (11 U.S.C. (S) 548; hereinafter "Section
548") or other applicable state fraudulent conveyance or transfer law and (ii)
agree that this Guaranty Agreement shall be so construed. Accordingly, the
obligation of the Guarantor hereunder is limited to an amount that is the
greater of (x) the "reasonably equivalent value" or "fair consideration"
received by the Guarantor in exchange for the obligation incurred hereunder,
within the meaning of Section 548, as amended, or any applicable state
fraudulent conveyance or transfer law, as amended; or (y) the lesser of (1) the
maximum amount that will not render the Guarantor insolvent or (2) the maximum
amount that will not leave the Guarantor with any Property deemed an
unreasonably small capital. Clauses (1) and (2) are and shall be determined
pursuant to Section 548, as amended, or other applicable state fraudulent
conveyance or transfer law, as amended.
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(b) Indenture Limitation. In addition to the limitation set forth in
Section 2.09(a), the parties hereto intend that the obligation of the Guarantor
hereunder and under all other Security Instruments be limited to the maximum
amount that would not result in such obligations causing an Event of Default
under Section 10.12 of the Indenture.
SECTION 2.10 SUBROGATION. The Guarantor shall not exercise any rights
which it may acquire by way of subrogation, reimbursement, exoneration,
indemnification or participation, by any payment made under this Guaranty
Agreement, under any other Security Instrument or otherwise until the
Obligations have been paid in full and the Aggregate Commitments are terminated;
provided that, notwithstanding the foregoing, the Guarantor reserves its rights
of contribution and reimbursement, if any, from its co-guarantors and other
Persons liable on the Obligations or otherwise. Except as described in this
Section 2.10, the Guarantor further waives any benefit of any right to
participate in any security now or hereafter held by the Agents and/or the
Lenders.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 BY THE GUARANTOR. In order to induce the Agents and the
Lenders to accept this Guaranty Agreement, the Guarantor represents and warrants
to the Agents and the Lenders (which representations and warranties will survive
the creation of the Obligations and any extension of credit thereunder) that:
(a) Benefit to the Guarantor. The Guarantor is a wholly-owned Subsidiary
of the Company and the Guarantor's guaranty pursuant to this Guaranty Agreement
reasonably may be expected to benefit, directly or indirectly, the Guarantor;
and the Guarantor has determined that this Guaranty Agreement is necessary and
convenient to the conduct, promotion and attainment of the business of the
Guarantor and the Company.
(b) Corporate Existence. The Guarantor: (i) is duly organized and validly
existing under the laws of the jurisdiction of its formation; (ii) has all
requisite power, and has all material governmental licenses, authorizations,
consents and approvals necessary to own its assets and carry on its business as
now being conducted; and (iii) is qualified to do business in all jurisdictions
in which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify would have a Material Adverse Effect.
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(c) No Breach. The execution and delivery by the Guarantor of this
Guaranty Agreement and the other Security Instruments to which it is a party,
the consummation of the transactions herein or therein contemplated, and the
compliance with the terms and provisions hereof will not (i) conflict with or
result in a breach of, or require any consent under (A) the respective charter
or by-laws of the Guarantor, or (B) any applicable law or regulation, or any
order, writ, injunction or decree of any court or other Governmental Authority,
or any material agreement or instrument to which the Guarantor is a party or by
which it is bound or to which it is subject in each case in such manner as could
reasonably be expected to have a Material Adverse Effect; or (ii) constitute a
default under any such agreement or instrument, or result in the creation or
imposition of any Lien upon any of the revenues or Property of the Guarantor in
each case in such manner as could reasonably be expected to have a Material
Adverse Effect.
(d) Corporate Action. The Guarantor has all necessary corporate power and
authority to execute, deliver and perform its obligations under this Guaranty
Agreement and the Security Instruments to which it is a party; and the
execution, delivery and performance by the Guarantor of this Guaranty Agreement
and the other Security Instruments to which such Person is a party have been
duly authorized by all necessary corporate action on its part. This Guaranty
Agreement and the Security Instruments to which the Guarantor is a party
constitute the legal, valid and binding obligation of the Guarantor, enforceable
against the Guarantor in accordance with their terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights and general principals of equity.
(e) Approvals. Other than consents heretofore obtained or described in the
Credit Agreement, no authorizations, approvals or consents of, and no filings or
registrations with, any Governmental Authority are necessary for the execution,
delivery or performance by the Guarantor of this Guaranty Agreement or the
Security Instruments to which it is a party or for the validity or enforce
ability thereof. It is understood that continued performance by the Guarantor
of this Guaranty Agreement and the other Security Instruments to which it is a
party will require various filings, such as filings related to environmental
matters, ERISA matters, Taxes and intellectual property, filings required to
maintain corporate and similar standing and existence, filings pursuant to the
Uniform Commercial Code and other security filings and recordings and filings
required by the SEC, routine filings in the ordinary course of business, and
filings required in connection with the exercise by the Lenders and the Agents
of remedies in connection with the Security Instruments.
(f) Solvency. The Guarantor (i) is not insolvent as of the date hereof and
will not be rendered insolvent as a result of this Guaranty Agreement, (ii) is
not engaged in business or a transaction, or about to engage in a business or a
transaction, for which any Property or assets remaining with the Guarantor is
unreasonably small capital, and (iii) does not intend to incur, or believe it
will incur, debts that will be beyond its ability to pay as such debts mature.
(g) No Representation by Agents or Lenders. Neither any Agent, any Lender
nor any other Person has made any representation, warranty or statement to the
Guarantor in order to induce the Guarantor to execute this Guaranty Agreement.
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ARTICLE IV
SUBORDINATION OF INDEBTEDNESS
SECTION 4.01 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the
term "Guarantor Claims" shall mean all debts and obligations of the Company to
the Guarantor, whether such debts and obligations now exist or are hereafter
incurred or arise, or whether the obligation of the Company thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or obligations be evidenced by note,
contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such debts or obligations may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by. Except for payments permitted by the Credit Agreement, until
the Obligations shall be paid and satisfied in full, the Aggregate Commitments
are terminated and the Guarantor shall have performed all of its obligations
hereunder and under the other Security Instruments to which it is a party, the
Guarantor shall not receive or collect, directly or indirectly, from the Company
any amount upon the Guarantor Claims.
SECTION 4.02 CLAIMS IN BANKRUPTCY. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving the Company, the Administrative Agent on behalf of the
Agents and the Lenders shall have the right to prove their claim in any proceed
ing, so as to establish their rights hereunder and receive directly from the
receiver, trustee or other court custodian, dividends and payments which would
otherwise be payable upon Guarantor Claims. The Guarantor hereby assigns such
dividends and payments to the Administrative Agent for the benefit of the Agents
and the Lenders. Should any Agent or Lender receive, for application upon the
Obligations, any such dividend or payment which is otherwise payable to the
Guarantor, and which, as between the Company and the Guarantor, shall constitute
a credit upon the Guarantor Claims, then upon payment in full of the
Obligations, the Guarantor shall become subrogated to the rights of the Agents
and the Lenders to the extent that such payments to the Agents and the Lenders
on the Guarantor Claims have contributed toward the liquidation of the
Obligations, and such subrogation shall be with respect to that proportion of
the Obligations which would have been unpaid if the Agents and the Lenders had
not received dividends or payments upon the Guarantor Claims.
SECTION 4.03 PAYMENTS HELD IN TRUST. In the event that notwithstanding
Sections 4.01 and 4.02, the Guarantor should receive any funds, payments, claims
or distributions which is prohibited by such Sections, the Guarantor agrees: (a)
to hold in trust for the Agents and the Lenders an amount equal to the amount of
all funds, payments, claims or distributions so received, and (b) that it shall
have absolutely no dominion over the amount of such funds, payments, claims or
distributions except to pay them promptly to the Administrative Agent, for the
benefit of the Agents and the Lenders; and the Guarantor covenants promptly to
pay the same to the Administrative Agent.
SECTION 4.04 LIENS SUBORDINATE. The Guarantor agrees that, until the
Obligations are paid in full and the Aggregate Commitments terminated, any Liens
upon the Company's assets securing payment of the Guarantor Claims shall be and
remain inferior and subordinate to any Liens upon the Company's assets securing
payment of the Obligations, regardless of whether such encumbrances in favor of
the Guarantor, any Agent or Lender presently exist or are hereafter created or
attach. Without the prior
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written consent of the Administrative Agent, the Guarantor, during the period in
which any of the Obligations are outstanding or the Aggregate Commitments are in
effect, shall not (a) exercise or enforce any creditor's right it may have
against the Company, or (b) foreclose, repossess, sequester or otherwise take
steps or institute any action or proceeding (judicial or otherwise, including
without limitation the commencement of or joinder in any liquidation,
bankruptcy, rearrangement, debtor's relief or insolvency proceeding) to enforce
any Lien on assets of the Company held by the Guarantor.
SECTION 4.05 NOTATION OF RECORDS. All promissory notes and, upon the
request of the Administrative Agent, all accounts receivable ledgers or other
evidence of the Guarantor Claims accepted by or held by the Guarantor shall
contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 SUCCESSORS AND ASSIGNS. This Guaranty Agreement is and shall
be in every particular available to the successors and assigns of the Agents and
Lenders and is and shall always be fully binding upon the legal representatives,
successors and assigns of the Guarantor, notwithstanding that some or all of the
monies, the repayment of which this Guaranty Agreement applies, may be actually
advanced after any bankruptcy, receivership, reorganization or other event
affecting either the Company or the Guarantor.
SECTION 5.02 NOTICES. Any notice or demand to the Guarantor under or in
connection with this Guaranty Agreement may be given and shall conclusively be
deemed and considered to have been given and received in the manner and to the
address of the Guarantor set forth in Exhibit D to the Credit Agreement as
provided for in Section 12.02 of the Credit Agreement.
SECTION 5.03 AUTHORITY OF ADMINISTRATIVE AGENT. The Guarantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Guaranty Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Guaranty Agreement shall, as between
the Agents and the Lenders, be governed by the Credit Agreement and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Guarantor, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Lenders with
full and valid authority so to act or refrain from acting; and the Guarantor
shall not be under any obligation, or entitlement, to make any inquiry
respecting such authority.
SECTION 5.04 CONSTRUCTION.
(A) THIS GUARANTY AGREEMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY
AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
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(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY AGREEMENT
OR THE OTHER SECURITY INSTRUMENTS TO WHICH THE GUARANTOR IS A PARTY MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS GUARANTY AGREEMENT, THE GUARANTOR HEREBY ACCEPTS FOR ITSELF AND (TO THE
EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE GUARANTOR HEREBY
IRREVOCA BLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN
SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE
AND DOES NOT PRECLUDE THE ADMINISTRATIVE AGENT OR ANY AGENT OR LENDER FROM
OBTAINING JURISDICTION OVER THE GUARANTOR IN ANY COURT OTHERWISE HAVING
JURISDICTION.
(C) THE GUARANTOR HEREBY IRREVOCABLY DESIGNATE CT CORPORATION SYSTEM,
LOCATED AT 1633 BROADWAY, NEW YORK, NEW YORK 10019, AS ITS DESIGNEE, APPOINTEE
AND AGENT TO RECEIVE, FOR AND ON ITS BEHALF, SERVICE OF PROCESS IN THE STATE OF
NEW YORK IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY
AGREEMENT OR THE OTHER SECURITY INSTRUMENTS TO WHICH IT IS A PARTY. IT IS
UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY
FORWARDED BY OVERNIGHT COURIER TO THE GUARANTOR AT ITS ADDRESS SET FORTH IN
EXHIBIT D TO THE CREDIT AGREEMENT, BUT THE FAILURE OF THE GUARANTOR TO RECEIVE
SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. THE
GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT, AS THE CASE MAY
BE, AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH
MAILING.
(D) NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY AGENT OR ANY LENDER OR ANY
HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE GUARANTOR IN ANY
OTHER JURISDICTION.
(E) EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR TO DEFEND ANY RIGHTS UNDER THIS GUARANTY AGREEMENT OR ANY OTHER
SECURITY INSTRUMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS
GUARANTY AGREEMENT OR ANY OTHER SECURITY INSTRUMENT TO WHICH IT IS A PARTY AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
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SECTION 5.05 PRIOR GUARANTY. This Guaranty supersedes and replaces that
certain Guaranty Agreement dated as of July 18, 1994, as amended, given
previously by the Guarantor in favor of the Administrative Agent and others.
SECTION 5.06 ENTIRE AGREEMENT. This Guaranty Agreement and the other
Security Instruments embody the entire agreement and understanding between the
Lenders, the Agents and the Guarantor and supersede all prior agreements and
understandings between such parties relating to the subject matter hereof and
thereof. There are no unwritten oral agreements between the parties.
SECTION 5.07 SURVIVAL OF OBLIGATIONS. To the extent that any payments on
the Obligations or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Obligations so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Agents' and the Lenders' Liens, rights, powers and
remedies under this Guaranty Agreement and each Security Instrument to which the
Guarantor is a party shall continue in full force and effect. In such event,
each Security Instrument shall be automatically reinstated and the Guarantor
shall take such action as may be reasonably requested by the Administrative
Agent and the Lenders to effect such reinstatement.
SECTION 5.08 SUBJECT TO THE INTERCREDITOR AGREEMENT. This Guaranty
Agreement is subject to the terms of the Intercreditor Agreement which (a)
subjects the ability of the Lender Group to pursue remedies hereunder to the
prior consent of the Canadian Lenders and (b) sets forth a priority for the
application of proceeds upon any disposition of amounts received hereunder. By
execution and delivery of this Guaranty Agreement, the Guarantor hereby
acknowledges the terms of the Intercreditor Agreement, agrees to be bound by the
terms thereof and becomes a party to the Intercreditor Agreement as fully as if
the Guarantor had executed a signature page to the Intercreditor Agreement
(whether or not such additional signature page is ever executed and delivered).
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WITNESS THE EXECUTION HEREOF, effective as of the date first written above.
NORFOLK HOLDINGS INC.
By:
--------------------------------
Name:
Title:
UMC Petroleum Corporation hereby consents to and agrees to comply with the
terms of this Guaranty Agreement.
UMC PETROLEUM CORPORATION
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
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EXHIBIT 4.17
GUARANTY AGREEMENT
Dated as of March 18, 1997
By
UMIC Cote d'Ivoire Corporation,
as the Guarantor,
in favor of
The Chase Manhattan Bank,
as Administrative Agent,
Morgan Guaranty Trust Company of New York,
as Syndication Agent,
NationsBank of Texas, N.A.
and
Societe Generale,
as Documentation Agents,
Banque Paribas,
Wells Fargo Bank, N.A.,
and
Colorado National Bank,
as Co-Agents,
and
The Lenders Now or Hereafter Signatory To The Credit Agreement
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
Article I
Definitions and Accounting Matters
Section 1.01 Terms Defined Above.................................... 1
Section 1.02 Certain Definitions.................................... 1
Section 1.03 Credit Agreement Definitions........................... 2
Article II
The Guaranty
Section 2.01 Obligations Guaranteed................................. 2
Section 2.02 Nature of Guaranty..................................... 2
Section 2.03 Lenders' Rights........................................ 2
Section 2.04 Guarantor's Waivers.................................... 3
Section 2.05 Maturity of Obligations; Payment....................... 3
Section 2.06 Lenders' Expenses...................................... 3
Section 2.07 Obligation............................................. 3
Section 2.08 Events and Circumstances Not Reducing or Discharging
the Guarantor's Obligations........................... 3
Section 2.09 Limitations on Obligation of the Guarantor Hereunder... 5
Section 2.10 Subrogation............................................ 5
Article III
Representations and Warranties
Section 3.01 By the Guarantor....................................... 6
Article IV
Subordination of Indebtedness
Section 4.01 Subordination of All Guarantor Claims.................. 7
Section 4.02 Claims in Bankruptcy................................... 7
Section 4.03 Payments Held in Trust................................. 8
Section 4.04 Liens Subordinate...................................... 8
Section 4.05 Notation of Records.................................... 8
Article V
Miscellaneous
Section 5.01 Successors and Assigns................................. 8
Section 5.02 Notices................................................ 9
Section 5.03 Authority of Administrative Agent...................... 9
Section 5.04 CONSTRUCTION........................................... 9
Section 5.05 Prior Guaranty......................................... 10
Section 5.06 Entire Agreement....................................... 10
Section 5.07 Survival of Obligations................................ 10
Section 5.08 Subject to the Intercreditor Agreement................. 10
GUARANTY AGREEMENT
------------------
This Guaranty Agreement dated as of March 18, 1997 is by UMIC Cote
d'Ivoire Corporation, a corporation duly organized and validly existing under
the laws of the state of Delaware ("Guarantor"), in favor of each of the
following: each of the financial institutions that is now or hereafter a
signatory to the Credit Agreement (as defined below) (individually, a "Lender"
and, collectively, the "Lenders"); The Chase Manhattan Bank, as administrative
agent for the Lenders (in such capacity, the "Administrative Agent"), Morgan
Guaranty Trust Company of New York, as
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syndication agent for the Lenders (in such capacity, the "Syndication Agent"),
NationsBank of Texas, N.A. and Societe Generale, as documentation agents for the
Lenders (in such capacity, the "Documentation Agents"), and Banque Paribas,
Wells Fargo Bank, N.A., and Colorado National Bank, as co-agents for the Lenders
(in such capacity, the "Co-Agents").
Recitals
A. United Meridian Corporation, a corporation duly organized and validly
existing under the laws of the state of Delaware ("United Meridian"), UMC
Petroleum Corporation, a corporation duly organized and validly existing under
the laws of the state of Delaware (the "Company"), the Administrative Agent, the
Syndication Agent, the Documentation Agents, the Co-Agents (collectively the
"Agents") and the Lenders have executed that certain Credit Agreement of even
date herewith (such credit agreement, as amended, the "Credit Agreement").
B. One of the terms and conditions stated in the Credit Agreement for the
making of the loans and extensions of credit described in the Credit Agreement
is the execution and delivery to the Agents and the Lenders of this Guaranty
Agreement.
C. NOW, THEREFORE, (i) in order to comply with the terms and conditions
of the Credit Agreement, (ii) to induce the Lenders, at any time or from time to
time, to loan monies, with or without security to or for the account of the
Company in accordance with the terms of the Credit Agreement, and (iii) for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Guarantor hereby agrees as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 TERMS DEFINED ABOVE. As used in This Guaranty Agreement,
the terms "Administrative Agent", "Agents", "Co-Agents", "Company", "Credit
Agreement", "Documentation Agents", "Guarantor", "Lender", "Lenders",
"Syndication Agent" and "United Meridian" shall have the meanings indicated
above.
SECTION 1.02 CERTAIN DEFINITIONS. As used in this Guaranty Agreement, the
following terms shall have the following meanings, unless the context otherwise
requires:
"Guarantor Claims" shall have the meaning indicated in Section 4.01.
"Guaranty Agreement" shall mean this Guaranty Agreement, as the same may
from time to time be amended or supplemented.
"Obligations" shall mean (a) the payment and performance of all present and
future indebtedness, obligations and liabilities of the Company and/or the
Guarantor to the Agents and the Lenders under the Credit Agreement, including
but not limited to, (i) the full and punctual payment of the Notes issued
thereunder, and any and all promissory notes given in substitution for such
Notes or in modification, renewal, extension or rearrangement thereof in whole
or in part, and (ii) the reimbursement
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and other obligations of the Company under and with respect to Letters of Credit
and Letter of Credit Agreements now outstanding or hereafter issued under the
Credit Agreement; (b) all obligations of the Guarantor under this Guaranty
Agreement; and (c) all interest (whether pre or post petition), charges,
expenses, reasonable attorneys' or other fees and any other sums payable to or
incurred by the Agents and the Lenders in connection with the execution,
administration or enforcement of any of their rights and remedies hereunder or
any other Security Instrument.
SECTION 1.03 CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein, all terms beginning with a capital letter which are defined in the
Credit Agreement shall have the same meanings herein as therein.
ARTICLE II
THE GUARANTY
SECTION 2.01 OBLIGATIONS GUARANTEED. The Guarantor hereby irrevocably and
unconditionally guarantees the prompt payment at maturity of the Obligations.
SECTION 2.02 NATURE OF GUARANTY. This guaranty is an absolute,
irrevocable, completed and continuing guaranty of payment and not a guaranty of
collection, and no notice of the Obligations or any extension of credit already
or hereafter contracted by or extended to the Company need be given to the
Guarantor. The guaranty evidenced hereby is joint and several with all other
guarantees of the Obligations. This guaranty may not be revoked by the
Guarantor and shall continue to be effective with respect to debt under the
Obligations arising or created after any attempted revocation by the Guarantor
and shall remain in full force and effect until the Obligations are paid in full
and the Aggregate Commit ments are terminated, notwithstanding that from time
to time prior thereto no Obligations may be outstanding. The Company, the
Agents and the Lenders may modify, alter, rearrange, extend for any period
and/or renew from time to time, the Obligations and the Agents and the Lenders
may waive any Default or Events of Default without notice to the Guarantor and
in such event the Guarantor will remain fully bound hereunder on the
Obligations. This Guaranty Agreement may be enforced by the Agents and/or the
Lenders and any subsequent holder of the Obligations and shall not be discharged
by the assignment or negotiation of all or part of the Obligations. The
Guarantor hereby expressly waives presentment, demand, notice of non-payment,
protest and notice of protest and dishonor, notice of Event of Default, notice
of intent to accelerate the maturity and notice of acceleration of the maturity
and any other notice in connection with the Obligations, and also notice of
acceptance of this Guaranty Agreement, acceptance on the part of the Agents and
the Lenders being conclusively presumed by their request for this Guaranty
Agreement and delivery of the same to the Administrative Agent.
SECTION 2.03 LENDERS' RIGHTS. Subject to the terms of the Credit
Agreement, the Guarantor authorizes the Lenders (or the Administrative Agent on
behalf of the Lenders), without notice or demand and without affecting the
Guarantor's obligation hereunder, to take and hold security for the payment of
the Obligations, and exchange, enforce, waive and release any such security; and
to apply such security and direct the order or manner of sale thereof as the
Agents and the Lenders in their discretion may determine; and to obtain a
guaranty of the Obligations from any one or more Persons and at any time or
times to enforce, waive, rearrange, modify, limit or release any of such other
Persons from their obligations under such guaranties.
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SECTION 2.04 GUARANTOR'S WAIVERS. The Guarantor waives any right to
require the Agents and the Lenders to (a) proceed against the Company or any
other Person liable on the Obligations, (b) enforce their rights against any
other guarantor of the Obligations, (c) proceed or enforce their rights against
or exhaust any security given to secure the Obligations, (d) have the Company
joined with the Guarantor in any suit arising out of this Guaranty Agreement
and/or the Obligations, or (e) pursue any other remedy whatsoever. Neither the
Agents nor the Lenders shall be required to mitigate damages or take any action
to reduce, collect or enforce the Obligations. The Guarantor waives any defense
arising by reason of any disability, lack of corporate authority or power, or
other defense of the Company or any other guarantor of the Obligations, and
shall remain liable hereon regardless of whether the Company or any other
guarantor be found not liable thereon for any reason.
SECTION 2.05 MATURITY OF OBLIGATIONS; PAYMENT. The Guarantor agrees that
if the maturity of the Obligations is accelerated by bankruptcy or otherwise,
such maturity shall also be deemed accelerated for the purpose of this Guaranty
Agreement without demand or notice to the Guarantor. The Guarantor will,
forthwith upon notice from the Administrative Agent of the Company's failure to
pay the Obligations at maturity, pay to the Administrative Agent for the benefit
of the Agents and the Lenders at the Administrative Agent's Principal Office,
the amount due and unpaid by the Company and guaranteed hereby. The failure of
the Administrative Agent to give this notice shall not in any way release the
Guarantor hereunder.
SECTION 2.06 LENDERS' EXPENSES. If the Guarantor fails to pay the
Obligations after notice from the Administrative Agent of the Company's failure
to pay any Obligations at maturity (whether by acceleration or otherwise), and
if the Agents or the Lenders obtain the services of an attorney for collection
of amounts owing by the Guarantor hereunder, or obtaining advice of counsel in
respect of any of their rights under this Guaranty Agreement, or if suit is
filed to enforce this Guaranty Agreement, or if proceedings are had in any
bankruptcy, receivership or other judicial proceedings for the establishment or
collection of any amount owing by the Guarantor hereunder, or if any amount
owing by the Guarantor hereunder is collected through such proceedings, the
Guarantor agrees to pay to the Administrative Agent at its Principal Office, the
reasonable attorneys' fees of the Agents and the Lenders.
SECTION 2.07 OBLIGATION. It is expressly agreed that the obligation of
the Guarantor for the payment of the Obligations guaranteed hereby shall be
primary and not secondary.
SECTION 2.08 EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING THE
GUARANTOR'S OBLIGATIONS. The Guarantor hereby consents and agrees to each of
the following to the fullest extent permitted by law, agrees its obligations
under this Guaranty Agreement shall not be released, diminished, impaired,
reduced or adversely affected by any of the following, and waives any rights
(including without limitation rights to notice) which it might otherwise have as
a result of or in connection with any of the following:
(a) Modifications, etc. Any renewal, extension, modification, or increase
in the amount of the Aggregate Commitments as in effect on the Effective Date,
decrease, alteration or rearrangement of all or any part of the Obligations,
any Security Instrument or any instrument executed in connection
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<PAGE>
therewith, or any contract or understanding between the Company, any Agent
and/or the Lenders, or any other Person, pertaining to the Obligations;
(b) Adjustment, etc. Any adjustment, indulgence, forbearance or compromise
that might be granted or given by the Agents or the Lenders to the Company or
the Guarantor or any Person liable on the Obligations;
(c) Condition of the Company or the Guarantor. The insolvency, bankruptcy
arrangement, reorganization, adjustment, composition, liquidation, disability,
dissolution or lack of power of the Company or the Guarantor or any other Person
at any time liable for the payment of all or part of the Obligations; or any
sale, lease or transfer of any or all of the assets of the Company or the
Guarantor, or any changes in the shareholders of the Company or the Guarantor;
(d) Invalidity of Obligations. The invalidity, illegality or
unenforceability of all or any part of the Obligations or any Security
Instrument, including the Notes, for any reason whatsoever, including without
limitation the fact that the Obligations, or any part thereof, exceed the amount
permitted by law, the act of creating the Obligations or any part thereof is
ultra vires, the officers or representatives executing any Security Instrument
acted in excess of their authority, the Obligations violate applicable usury
laws, the Company has valid defenses, claims or offsets (whether at law, in
equity or by agreement) which render the Obligations wholly or partially
uncollectible from the Company, the creation, performance or repayment of the
Obligations (or the execution, delivery and performance of any Security
Instrument) is illegal, uncollectible, legally impossible or unenforceable, or
the Credit Agreement, the Notes or other Security Instruments have been forged
or otherwise are irregular or not genuine or authentic;
(e) Release of Obligors. Any full or partial release of the obligation of
the Company on the Obligations or any part thereof, of any co-guarantors, or any
other Person now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or assure the
payment of the Obligations or any part thereof, it being recognized,
acknowledged and agreed by the Guarantor that the Guarantor may be required to
pay the Obligations in full without assistance or support of any other Person,
and the Guarantor has not been induced to enter into this Guaranty Agreement on
the basis of a contemplation, belief, understanding or agreement that other
parties other than the Company will be liable to perform the Obligations, or
that the Agents and Lenders will look to other parties to perform the
Obligations;
(f) Other Security. The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Obligations;
(g) Release of Collateral, etc. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, Property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Obligations;
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(h) Care and Diligence. The failure of any Agent or Lender or any other
Person to exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of such
collateral, Property or security;
(i) Status of Liens. The fact that any collateral, security or Lien
contemplated or intended to be given, created or granted as security for the
repayment of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other Lien, it being
recognized and agreed by the Guarantor that the Guarantor is not entering into
this Guaranty Agreement in reliance on, or in contemplation of the benefits of,
the validity, enforceability, collectability or value of any of the collateral
for the Obligations;
(j) Payments Rescinded. Any payment by the Company to any Agent or Lender
is held to constitute a preference under the bankruptcy laws, or for any reason
an Agent or Lender is required to refund such payment or pay such amount to the
Company or someone else; or
(k) Other Actions Taken or Omitted. Any other action taken or omitted to
be taken with respect to the Credit Agreement or the other Security Instruments,
the Obligations, or the security and collateral therefor, whether or not such
action or omission prejudices the Guarantor or increases the likelihood that the
Guarantor will be required to pay the Obligations pursuant to the terms hereof;
it being the unambiguous and unequivocal intention of the Guarantor that the
Guarantor shall be obligated to pay the Obligations when due, notwithstanding
any occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particu larly
described herein, except for the full and final payment and satisfaction of the
Obligations.
SECTION 2.09 LIMITATIONS ON OBLIGATION OF THE GUARANTOR HEREUNDER.
(a) Insolvency Limitation. The parties hereto (i) intend that the
obligation of the Guarantor hereunder be limited to the maximum amount that
would not result in the obligation created hereby being avoidable under Section
548 of the Federal Bankruptcy Code (11 U.S.C. (S) 548; hereinafter "Section
548") or other applicable state fraudulent conveyance or transfer law and (ii)
agree that this Guaranty Agreement shall be so construed. Accordingly, the
obligation of the Guarantor hereunder is limited to an amount that is the
greater of (x) the "reasonably equivalent value" or "fair consideration"
received by the Guarantor in exchange for the obligation incurred hereunder,
within the meaning of Section 548, as amended, or any applicable state
fraudulent conveyance or transfer law, as amended; or (y) the lesser of (1) the
maximum amount that will not render the Guarantor insolvent or (2) the maximum
amount that will not leave the Guarantor with any Property deemed an
unreasonably small capital. Clauses (1) and (2) are and shall be determined
pursuant to Section 548, as amended, or other applicable state fraudulent
conveyance or transfer law, as amended.
(b) Indenture Limitation. In addition to the limitation set forth in
Section 2.09(a), the parties hereto intend that the obligation of the Guarantor
hereunder and under all other Security Instruments be limited to the maximum
amount that would not result in such obligations causing an Event of Default
under Section 10.12 of the Indenture.
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SECTION 2.10 SUBROGATION. The Guarantor shall not exercise any rights
which it may acquire by way of subrogation, reimbursement, exoneration,
indemnification or participation, by any payment made under this Guaranty
Agreement, under any other Security Instrument or otherwise until the
Obligations have been paid in full and the Aggregate Commitments are terminated;
provided that, notwithstanding the foregoing, the Guarantor reserves its rights
of contribution and reimbursement, if any, from its co-guarantors and other
Persons liable on the Obligations or otherwise. Except as described in this
Section 2.10, the Guarantor further waives any benefit of any right to
participate in any security now or hereafter held by the Agents and/or the
Lenders.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 BY THE GUARANTOR. In order to induce the Agents and the
Lenders to accept this Guaranty Agreement, the Guarantor represents and warrants
to the Agents and the Lenders (which representations and warranties will survive
the creation of the Obligations and any extension of credit thereunder) that:
(a) Benefit to the Guarantor. The Guarantor is a wholly-owned Subsidiary
of the Company and the Guarantor's guaranty pursuant to this Guaranty Agreement
reasonably may be expected to benefit, directly or indirectly, the Guarantor;
and the Guarantor has determined that this Guaranty Agreement is necessary and
convenient to the conduct, promotion and attainment of the business of the
Guarantor and the Company.
(b) Corporate Existence. The Guarantor: (i) is duly organized and validly
existing under the laws of the jurisdiction of its formation; (ii) has all
requisite power, and has all material governmental licenses, authorizations,
consents and approvals necessary to own its assets and carry on its business as
now being conducted; and (iii) is qualified to do business in all jurisdictions
in which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify would have a Material Adverse Effect.
(c) No Breach. The execution and delivery by the Guarantor of this
Guaranty Agreement and the other Security Instruments to which it is a party,
the consummation of the transactions herein or therein contemplated, and the
compliance with the terms and provisions hereof will not (i) conflict with or
result in a breach of, or require any consent under (A) the respective charter
or by-laws of the Guarantor, or (B) any applicable law or regulation, or any
order, writ, injunction or decree of any court or other Governmental Authority,
or any material agreement or instrument to which the Guarantor is a party or by
which it is bound or to which it is subject in each case in such manner as could
reasonably be expected to have a Material Adverse Effect; or (ii) constitute a
default under any such agreement or instrument, or result in the creation or
imposition of any Lien upon any of the revenues or Property of the Guarantor in
each case in such manner as could reasonably be expected to have a Material
Adverse Effect.
(d) Corporate Action. The Guarantor has all necessary corporate power and
authority to execute, deliver and perform its obligations under this Guaranty
Agreement and the Security Instruments to which it is a party; and the
execution, delivery and performance by the Guarantor of this Guaranty
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Agreement and the other Security Instruments to which such Person is a party
have been duly authorized by all necessary corporate action on its part. This
Guaranty Agreement and the Security Instruments to which the Guarantor is a
party constitute the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with their terms, except as may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws affecting creditors' rights and general principals of equity.
(e) Approvals. Other than consents heretofore obtained or described in the
Credit Agreement, no authorizations, approvals or consents of, and no filings or
registrations with, any Governmental Authority are necessary for the execution,
delivery or performance by the Guarantor of this Guaranty Agreement or the
Security Instruments to which it is a party or for the validity or enforce
ability thereof. It is understood that continued performance by the Guarantor
of this Guaranty Agreement and the other Security Instruments to which it is a
party will require various filings, such as filings related to environmental
matters, ERISA matters, Taxes and intellectual property, filings required to
maintain corporate and similar standing and existence, filings pursuant to the
Uniform Commercial Code and other security filings and recordings and filings
required by the SEC, routine filings in the ordinary course of business, and
filings required in connection with the exercise by the Lenders and the Agents
of remedies in connection with the Security Instruments.
(f) Solvency. The Guarantor (i) is not insolvent as of the date hereof and
will not be rendered insolvent as a result of this Guaranty Agreement, (ii) is
not engaged in business or a transaction, or about to engage in a business or a
transaction, for which any Property or assets remaining with the Guarantor is
unreasonably small capital, and (iii) does not intend to incur, or believe it
will incur, debts that will be beyond its ability to pay as such debts mature.
(g) No Representation by Agents or Lenders. Neither any Agent, any Lender
nor any other Person has made any representation, warranty or statement to the
Guarantor in order to induce the Guarantor to execute this Guaranty Agreement.
ARTICLE IV
SUBORDINATION OF INDEBTEDNESS
SECTION 4.01 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the
term "Guarantor Claims" shall mean all debts and obligations of the Company to
the Guarantor, whether such debts and obligations now exist or are hereafter
incurred or arise, or whether the obligation of the Company thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or obligations be evidenced by note,
contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such debts or obligations may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by. Except for payments permitted by the Credit Agreement, until
the Obligations shall be paid and satisfied in full, the Aggregate Commitments
are terminated and the Guarantor shall have performed all of its obligations
hereunder and under the other Security Instruments to which it is a party, the
Guarantor shall not receive or collect, directly or indirectly, from the Company
any amount upon the Guarantor Claims.
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SECTION 4.02 CLAIMS IN BANKRUPTCY. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving the Company, the Administrative Agent on behalf of the
Agents and the Lenders shall have the right to prove their claim in any proceed
ing, so as to establish their rights hereunder and receive directly from the
receiver, trustee or other court custodian, dividends and payments which would
otherwise be payable upon Guarantor Claims. The Guarantor hereby assigns such
dividends and payments to the Administrative Agent for the benefit of the Agents
and the Lenders. Should any Agent or Lender receive, for application upon the
Obligations, any such dividend or payment which is otherwise payable to the
Guarantor, and which, as between the Company and the Guarantor, shall constitute
a credit upon the Guarantor Claims, then upon payment in full of the
Obligations, the Guarantor shall become subrogated to the rights of the Agents
and the Lenders to the extent that such payments to the Agents and the Lenders
on the Guarantor Claims have contributed toward the liquidation of the
Obligations, and such subrogation shall be with respect to that proportion of
the Obligations which would have been unpaid if the Agents and the Lenders had
not received dividends or payments upon the Guarantor Claims.
SECTION 4.03 PAYMENTS HELD IN TRUST. In the event that notwithstanding
Sections 4.01 and 4.02, the Guarantor should receive any funds, payments, claims
or distributions which is prohibited by such Sections, the Guarantor agrees: (a)
to hold in trust for the Agents and the Lenders an amount equal to the amount of
all funds, payments, claims or distributions so received, and (b) that it shall
have absolutely no dominion over the amount of such funds, payments, claims or
distributions except to pay them promptly to the Administrative Agent, for the
benefit of the Agents and the Lenders; and the Guarantor covenants promptly to
pay the same to the Administrative Agent.
SECTION 4.04 LIENS SUBORDINATE. The Guarantor agrees that, until the
Obligations are paid in full and the Aggregate Commitments terminated, any Liens
upon the Company's assets securing payment of the Guarantor Claims shall be and
remain inferior and subordinate to any Liens upon the Company's assets securing
payment of the Obligations, regardless of whether such encumbrances in favor of
the Guarantor, any Agent or Lender presently exist or are hereafter created or
attach. Without the prior written consent of the Administrative Agent, the
Guarantor, during the period in which any of the Obligations are outstanding or
the Aggregate Commitments are in effect, shall not (a) exercise or enforce any
creditor's right it may have against the Company, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceeding
(judicial or otherwise, including without limitation the commencement of or
joinder in any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any Lien on assets of the Company held by the
Guarantor.
SECTION 4.05 NOTATION OF RECORDS. All promissory notes and, upon the
request of the Administrative Agent, all accounts receivable ledgers or other
evidence of the Guarantor Claims accepted by or held by the Guarantor shall
contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 SUCCESSORS AND ASSIGNS. This Guaranty Agreement is and shall
be in every particular available to the successors and assigns of the Agents and
Lenders and is and shall always be
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fully binding upon the legal representatives, successors and assigns of the
Guarantor, notwithstanding that some or all of the monies, the repayment of
which this Guaranty Agreement applies, may be actually advanced after any
bankruptcy, receivership, reorganization or other event affecting either the
Company or the Guarantor.
SECTION 5.02 NOTICES. Any notice or demand to the Guarantor under or in
connection with this Guaranty Agreement may be given and shall conclusively be
deemed and considered to have been given and received in the manner and to the
address of the Guarantor set forth in Exhibit D to the Credit Agreement as
provided for in Section 12.02 of the Credit Agreement.
SECTION 5.03 AUTHORITY OF ADMINISTRATIVE AGENT. The Guarantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Guaranty Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Guaranty Agreement shall, as between
the Agents and the Lenders, be governed by the Credit Agreement and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Guarantor, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Lenders with
full and valid authority so to act or refrain from acting; and the Guarantor
shall not be under any obligation, or entitlement, to make any inquiry
respecting such authority.
SECTION 5.04 CONSTRUCTION.
(A) THIS GUARANTY AGREEMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY
AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY AGREEMENT
OR THE OTHER SECURITY INSTRUMENTS TO WHICH THE GUARANTOR IS A PARTY MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS GUARANTY AGREEMENT, THE GUARANTOR HEREBY ACCEPTS FOR ITSELF AND (TO THE
EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE GUARANTOR HEREBY
IRREVOCA BLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN
SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE
AND DOES NOT PRECLUDE THE ADMINISTRATIVE AGENT OR ANY AGENT OR LENDER FROM
OBTAINING JURISDICTION OVER THE GUARANTOR IN ANY COURT OTHERWISE HAVING
JURISDICTION.
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(C) THE GUARANTOR HEREBY IRREVOCABLY DESIGNATE CT CORPORATION SYSTEM,
LOCATED AT 1633 BROADWAY, NEW YORK, NEW YORK 10019, AS ITS DESIGNEE, APPOINTEE
AND AGENT TO RECEIVE, FOR AND ON ITS BEHALF, SERVICE OF PROCESS IN THE STATE OF
NEW YORK IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY
AGREEMENT OR THE OTHER SECURITY INSTRUMENTS TO WHICH IT IS A PARTY. IT IS
UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY
FORWARDED BY OVERNIGHT COURIER TO THE GUARANTOR AT ITS ADDRESS SET FORTH IN
EXHIBIT D TO THE CREDIT AGREEMENT, BUT THE FAILURE OF THE GUARANTOR TO RECEIVE
SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. THE
GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT, AS THE CASE MAY
BE, AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH
MAILING.
(D) NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY AGENT OR ANY LENDER OR ANY
HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE GUARANTOR IN ANY
OTHER JURISDICTION.
(E) EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR TO DEFEND ANY RIGHTS UNDER THIS GUARANTY AGREEMENT OR ANY OTHER
SECURITY INSTRUMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS
GUARANTY AGREEMENT OR ANY OTHER SECURITY INSTRUMENT TO WHICH IT IS A PARTY AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
SECTION 5.05 PRIOR GUARANTY. This Guaranty supersedes and replaces that
certain Guaranty Agreement dated as of July 18, 1994, as amended, given
previously by the Guarantor in favor of the Administrative Agent and others.
SECTION 5.06 ENTIRE AGREEMENT. This Guaranty Agreement and the other
Security Instruments embody the entire agreement and understanding between the
Lenders, the Agents and the Guarantor and supersede all prior agreements and
understandings between such parties relating to the subject matter hereof and
thereof. There are no unwritten oral agreements between the parties.
SECTION 5.07 SURVIVAL OF OBLIGATIONS. To the extent that any payments on
the Obligations or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Obligations so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Agents' and the Lenders' Liens, rights, powers and
remedies under this Guaranty Agreement and each Security Instrument to which the
Guarantor is a party shall continue in full force and effect. In such event,
each Security Instrument shall be automatically reinstated and the Guarantor
shall take such action as may be reasonably requested by the Administrative
Agent and the Lenders to effect such reinstatement.
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SECTION 5.08 SUBJECT TO THE INTERCREDITOR AGREEMENT. This Guaranty
Agreement is subject to the terms of the Intercreditor Agreement which (a)
subjects the ability of the Lender Group to pursue remedies hereunder to the
prior consent of the Canadian Lenders and (b) sets forth a priority for the
application of proceeds upon any disposition of amounts received hereunder. By
execution and delivery of this Guaranty Agreement, the Guarantor hereby
acknowledges the terms of the Intercreditor Agreement, agrees to be bound by the
terms thereof and becomes a party to the Intercreditor Agreement as fully as if
the Guarantor had executed a signature page to the Intercreditor Agreement
(whether or not such additional signature page is ever executed and delivered).
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WITNESS THE EXECUTION HEREOF, effective as of the date first written above.
UMIC Cote d'Ivoire Corporation
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
UMC Petroleum Corporation hereby consents to and agrees to comply with the
terms of this Guaranty Agreement.
UMC PETROLEUM CORPORATION
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
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EXHIBIT 4.18
GUARANTY AGREEMENT
Dated as of March 18, 1997
By
UMC Equatorial Guinea Corporation,
as the Guarantor,
in favor of
The Chase Manhattan Bank,
as Administrative Agent,
Morgan Guaranty Trust Company of New York,
as Syndication Agent,
NationsBank of Texas, N.A.
and
Societe Generale,
as Documentation Agents,
Banque Paribas,
Wells Fargo Bank, N.A.,
and
Colorado National Bank,
as Co-Agents,
and
The Lenders Now or Hereafter Signatory To The Credit Agreement
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
Article I
Definitions and Accounting Matters
Section 1.01 Terms Defined Above.................................... 1
Section 1.02 Certain Definitions.................................... 1
Section 1.03 Credit Agreement Definitions........................... 2
Article II
The Guaranty
Section 2.01 Obligations Guaranteed................................. 2
Section 2.02 Nature of Guaranty..................................... 2
Section 2.03 Lenders' Rights........................................ 2
Section 2.04 Guarantor's Waivers.................................... 3
Section 2.05 Maturity of Obligations; Payment....................... 3
Section 2.06 Lenders' Expenses...................................... 3
Section 2.07 Obligation............................................. 3
Section 2.08 Events and Circumstances Not Reducing or Discharging
the Guarantor's Obligations........................... 3
Section 2.09 Limitations on Obligation of the Guarantor Hereunder... 5
Section 2.10 Subrogation............................................ 5
Article III
Representations and Warranties
Section 3.01 By the Guarantor....................................... 6
Article IV
Subordination of Indebtedness
Section 4.01 Subordination of All Guarantor Claims.................. 7
Section 4.02 Claims in Bankruptcy................................... 7
Section 4.03 Payments Held in Trust................................. 8
Section 4.04 Liens Subordinate...................................... 8
Section 4.05 Notation of Records.................................... 8
Article V
Miscellaneous
Section 5.01 Successors and Assigns................................. 8
Section 5.02 Notices................................................ 9
Section 5.03 Authority of Administrative Agent...................... 9
Section 5.04 CONSTRUCTION........................................... 9
Section 5.05 Prior Guaranty......................................... 10
Section 5.06 Entire Agreement....................................... 10
Section 5.07 Survival of Obligations................................ 10
Section 5.08 Subject to the Intercreditor Agreement................. 10
GUARANTY AGREEMENT
------------------
This Guaranty Agreement dated as of March 18, 1997 is by UMC
Equatorial Guinea Corporation, a corporation duly organized and validly existing
under the laws of the state of Delaware ("Guarantor"), in favor of each of the
following: each of the financial institutions that is now or hereafter a
signatory to the Credit Agreement (as defined below) (individually, a "Lender"
and, collectively, the "Lenders"); The Chase Manhattan Bank, as administrative
agent for the Lenders (in such capacity, the "Administrative Agent"), Morgan
Guaranty Trust Company of New York,
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as syndication agent for the Lenders (in such capacity, the "Syndication
Agent"), NationsBank of Texas, N.A. and Societe Generale, as documentation
agents for the Lenders (in such capacity, the "Documentation Agents"), and
Banque Paribas, Wells Fargo Bank, N.A., and Colorado National Bank, as co-agents
for the Lenders (in such capacity, the "Co-Agents").
Recitals
A. United Meridian Corporation, a corporation duly organized and validly
existing under the laws of the state of Delaware ("United Meridian"), UMC
Petroleum Corporation, a corporation duly organized and validly existing under
the laws of the state of Delaware (the "Company"), the Administrative Agent, the
Syndication Agent, the Documentation Agents, the Co-Agents (collectively the
"Agents") and the Lenders have executed that certain Credit Agreement of even
date herewith (such credit agreement, as amended, the "Credit Agreement").
B. One of the terms and conditions stated in the Credit Agreement for the
making of the loans and extensions of credit described in the Credit Agreement
is the execution and delivery to the Agents and the Lenders of this Guaranty
Agreement.
C. NOW, THEREFORE, (i) in order to comply with the terms and conditions
of the Credit Agreement, (ii) to induce the Lenders, at any time or from time to
time, to loan monies, with or without security to or for the account of the
Company in accordance with the terms of the Credit Agreement, and (iii) for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Guarantor hereby agrees as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
SECTION 1.01 TERMS DEFINED ABOVE. As used in This Guaranty Agreement,
the terms "Administrative Agent", "Agents", "Co-Agents", "Company", "Credit
Agreement", "Documentation Agents", "Guarantor", "Lender", "Lenders",
"Syndication Agent" and "United Meridian" shall have the meanings indicated
above.
SECTION 1.02 CERTAIN DEFINITIONS. As used in this Guaranty Agreement, the
following terms shall have the following meanings, unless the context otherwise
requires:
"Guarantor Claims" shall have the meaning indicated in Section 4.01.
"Guaranty Agreement" shall mean this Guaranty Agreement, as the same may
from time to time be amended or supplemented.
"Obligations" shall mean (a) the payment and performance of all present and
future indebtedness, obligations and liabilities of the Company and/or the
Guarantor to the Agents and the Lenders under the Credit Agreement, including
but not limited to, (i) the full and punctual payment of the Notes issued
thereunder, and any and all promissory notes given in substitution for such
Notes or in modification, renewal, extension or rearrangement thereof in whole
or in part, and (ii) the reimbursement
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and other obligations of the Company under and with respect to Letters of Credit
and Letter of Credit Agreements now outstanding or hereafter issued under the
Credit Agreement; (b) all obligations of the Guarantor under this Guaranty
Agreement; and (c) all interest (whether pre or post petition), charges,
expenses, reasonable attorneys' or other fees and any other sums payable to or
incurred by the Agents and the Lenders in connection with the execution,
administration or enforcement of any of their rights and remedies hereunder or
any other Security Instrument.
SECTION 1.03 CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein, all terms beginning with a capital letter which are defined in the
Credit Agreement shall have the same meanings herein as therein.
ARTICLE II
THE GUARANTY
SECTION 2.01 OBLIGATIONS GUARANTEED. The Guarantor hereby irrevocably and
unconditionally guarantees the prompt payment at maturity of the Obligations.
SECTION 2.02 NATURE OF GUARANTY. This guaranty is an absolute,
irrevocable, completed and continuing guaranty of payment and not a guaranty of
collection, and no notice of the Obligations or any extension of credit already
or hereafter contracted by or extended to the Company need be given to the
Guarantor. The guaranty evidenced hereby is joint and several with all other
guarantees of the Obligations. This guaranty may not be revoked by the
Guarantor and shall continue to be effective with respect to debt under the
Obligations arising or created after any attempted revocation by the Guarantor
and shall remain in full force and effect until the Obligations are paid in full
and the Aggregate Commit ments are terminated, notwithstanding that from time
to time prior thereto no Obligations may be outstanding. The Company, the
Agents and the Lenders may modify, alter, rearrange, extend for any period
and/or renew from time to time, the Obligations and the Agents and the Lenders
may waive any Default or Events of Default without notice to the Guarantor and
in such event the Guarantor will remain fully bound hereunder on the
Obligations. This Guaranty Agreement may be enforced by the Agents and/or the
Lenders and any subsequent holder of the Obligations and shall not be discharged
by the assignment or negotiation of all or part of the Obligations. The
Guarantor hereby expressly waives presentment, demand, notice of non-payment,
protest and notice of protest and dishonor, notice of Event of Default, notice
of intent to accelerate the maturity and notice of acceleration of the maturity
and any other notice in connection with the Obligations, and also notice of
acceptance of this Guaranty Agreement, acceptance on the part of the Agents and
the Lenders being conclusively presumed by their request for this Guaranty
Agreement and delivery of the same to the Administrative Agent.
SECTION 2.03 LENDERS' RIGHTS. Subject to the terms of the Credit
Agreement, the Guarantor authorizes the Lenders (or the Administrative Agent on
behalf of the Lenders), without notice or demand and without affecting the
Guarantor's obligation hereunder, to take and hold security for the payment of
the Obligations, and exchange, enforce, waive and release any such security; and
to apply such security and direct the order or manner of sale thereof as the
Agents and the Lenders in their discretion may determine; and to obtain a
guaranty of the Obligations from any one or more Persons and at any time or
times to enforce, waive, rearrange, modify, limit or release any of such other
Persons from their obligations under such guaranties.
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SECTION 2.04 GUARANTOR'S WAIVERS. The Guarantor waives any right to
require the Agents and the Lenders to (a) proceed against the Company or any
other Person liable on the Obligations, (b) enforce their rights against any
other guarantor of the Obligations, (c) proceed or enforce their rights against
or exhaust any security given to secure the Obligations, (d) have the Company
joined with the Guarantor in any suit arising out of this Guaranty Agreement
and/or the Obligations, or (e) pursue any other remedy whatsoever. Neither the
Agents nor the Lenders shall be required to mitigate damages or take any action
to reduce, collect or enforce the Obligations. The Guarantor waives any defense
arising by reason of any disability, lack of corporate authority or power, or
other defense of the Company or any other guarantor of the Obligations, and
shall remain liable hereon regardless of whether the Company or any other
guarantor be found not liable thereon for any reason.
SECTION 2.05 MATURITY OF OBLIGATIONS; PAYMENT. The Guarantor agrees that
if the maturity of the Obligations is accelerated by bankruptcy or otherwise,
such maturity shall also be deemed accelerated for the purpose of this Guaranty
Agreement without demand or notice to the Guarantor. The Guarantor will,
forthwith upon notice from the Administrative Agent of the Company's failure to
pay the Obligations at maturity, pay to the Administrative Agent for the benefit
of the Agents and the Lenders at the Administrative Agent's Principal Office,
the amount due and unpaid by the Company and guaranteed hereby. The failure of
the Administrative Agent to give this notice shall not in any way release the
Guarantor hereunder.
SECTION 2.06 LENDERS' EXPENSES. If the Guarantor fails to pay the
Obligations after notice from the Administrative Agent of the Company's failure
to pay any Obligations at maturity (whether by acceleration or otherwise), and
if the Agents or the Lenders obtain the services of an attorney for collection
of amounts owing by the Guarantor hereunder, or obtaining advice of counsel in
respect of any of their rights under this Guaranty Agreement, or if suit is
filed to enforce this Guaranty Agreement, or if proceedings are had in any
bankruptcy, receivership or other judicial proceedings for the establishment or
collection of any amount owing by the Guarantor hereunder, or if any amount
owing by the Guarantor hereunder is collected through such proceedings, the
Guarantor agrees to pay to the Administrative Agent at its Principal Office, the
reasonable attorneys' fees of the Agents and the Lenders.
SECTION 2.07 OBLIGATION. It is expressly agreed that the obligation of
the Guarantor for the payment of the Obligations guaranteed hereby shall be
primary and not secondary.
SECTION 2.08 EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING THE
GUARANTOR'S OBLIGATIONS. The Guarantor hereby consents and agrees to each of
the following to the fullest extent permitted by law, agrees its obligations
under this Guaranty Agreement shall not be released, diminished, impaired,
reduced or adversely affected by any of the following, and waives any rights
(including without limitation rights to notice) which it might otherwise have as
a result of or in connection with any of the following:
(a) Modifications, etc. Any renewal, extension, modification, or increase
in the amount of the Aggregate Commitments as in effect on the Effective Date,
decrease, alteration or rearrangement of all or any part of the Obligations,
any Security Instrument or any instrument executed in connection
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therewith, or any contract or understanding between the Company, any Agent
and/or the Lenders, or any other Person, pertaining to the Obligations;
(b) Adjustment, etc. Any adjustment, indulgence, forbearance or compromise
that might be granted or given by the Agents or the Lenders to the Company or
the Guarantor or any Person liable on the Obligations;
(c) Condition of the Company or the Guarantor. The insolvency, bankruptcy
arrangement, reorganization, adjustment, composition, liquidation, disability,
dissolution or lack of power of the Company or the Guarantor or any other Person
at any time liable for the payment of all or part of the Obligations; or any
sale, lease or transfer of any or all of the assets of the Company or the
Guarantor, or any changes in the shareholders of the Company or the Guarantor;
(d) Invalidity of Obligations. The invalidity, illegality or
unenforceability of all or any part of the Obligations or any Security
Instrument, including the Notes, for any reason whatsoever, including without
limitation the fact that the Obligations, or any part thereof, exceed the amount
permitted by law, the act of creating the Obligations or any part thereof is
ultra vires, the officers or representatives executing any Security Instrument
acted in excess of their authority, the Obligations violate applicable usury
laws, the Company has valid defenses, claims or offsets (whether at law, in
equity or by agreement) which render the Obligations wholly or partially
uncollectible from the Company, the creation, performance or repayment of the
Obligations (or the execution, delivery and performance of any Security
Instrument) is illegal, uncollectible, legally impossible or unenforceable, or
the Credit Agreement, the Notes or other Security Instruments have been forged
or otherwise are irregular or not genuine or authentic;
(e) Release of Obligors. Any full or partial release of the obligation of
the Company on the Obligations or any part thereof, of any co-guarantors, or any
other Person now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or assure the
payment of the Obligations or any part thereof, it being recognized,
acknowledged and agreed by the Guarantor that the Guarantor may be required to
pay the Obligations in full without assistance or support of any other Person,
and the Guarantor has not been induced to enter into this Guaranty Agreement on
the basis of a contemplation, belief, understanding or agreement that other
parties other than the Company will be liable to perform the Obligations, or
that the Agents and Lenders will look to other parties to perform the
Obligations;
(f) Other Security. The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Obligations;
(g) Release of Collateral, etc. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, Property or security, at any time existing in connection with, or
assuring or securing payment of, all or any part of the Obligations;
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(h) Care and Diligence. The failure of any Agent or Lender or any other
Person to exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of such
collateral, Property or security;
(i) Status of Liens. The fact that any collateral, security or Lien
contemplated or intended to be given, created or granted as security for the
repayment of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other Lien, it being
recognized and agreed by the Guarantor that the Guarantor is not entering into
this Guaranty Agreement in reliance on, or in contemplation of the benefits of,
the validity, enforceability, collectability or value of any of the collateral
for the Obligations;
(j) Payments Rescinded. Any payment by the Company to any Agent or Lender
is held to constitute a preference under the bankruptcy laws, or for any reason
an Agent or Lender is required to refund such payment or pay such amount to the
Company or someone else; or
(k) Other Actions Taken or Omitted. Any other action taken or omitted to
be taken with respect to the Credit Agreement or the other Security Instruments,
the Obligations, or the security and collateral therefor, whether or not such
action or omission prejudices the Guarantor or increases the likelihood that the
Guarantor will be required to pay the Obligations pursuant to the terms hereof;
it being the unambiguous and unequivocal intention of the Guarantor that the
Guarantor shall be obligated to pay the Obligations when due, notwithstanding
any occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particu larly
described herein, except for the full and final payment and satisfaction of the
Obligations.
SECTION 2.09 LIMITATIONS ON OBLIGATION OF THE GUARANTOR HEREUNDER.
(a) Insolvency Limitation. The parties hereto (i) intend that the
obligation of the Guarantor hereunder be limited to the maximum amount that
would not result in the obligation created hereby being avoidable under Section
548 of the Federal Bankruptcy Code (11 U.S.C. (S) 548; hereinafter "Section
548") or other applicable state fraudulent conveyance or transfer law and (ii)
agree that this Guaranty Agreement shall be so construed. Accordingly, the
obligation of the Guarantor hereunder is limited to an amount that is the
greater of (x) the "reasonably equivalent value" or "fair consideration"
received by the Guarantor in exchange for the obligation incurred hereunder,
within the meaning of Section 548, as amended, or any applicable state
fraudulent conveyance or transfer law, as amended; or (y) the lesser of (1) the
maximum amount that will not render the Guarantor insolvent or (2) the maximum
amount that will not leave the Guarantor with any Property deemed an
unreasonably small capital. Clauses (1) and (2) are and shall be determined
pursuant to Section 548, as amended, or other applicable state fraudulent
conveyance or transfer law, as amended.
(b) Indenture Limitation. In addition to the limitation set forth in
Section 2.09(a), the parties hereto intend that the obligation of the Guarantor
hereunder and under all other Security Instruments be limited to the maximum
amount that would not result in such obligations causing an Event of Default
under Section 10.12 of the Indenture.
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SECTION 2.10 SUBROGATION. The Guarantor shall not exercise any rights
which it may acquire by way of subrogation, reimbursement, exoneration,
indemnification or participation, by any payment made under this Guaranty
Agreement, under any other Security Instrument or otherwise until the
Obligations have been paid in full and the Aggregate Commitments are terminated;
provided that, notwithstanding the foregoing, the Guarantor reserves its rights
of contribution and reimbursement, if any, from its co-guarantors and other
Persons liable on the Obligations or otherwise. Except as described in this
Section 2.10, the Guarantor further waives any benefit of any right to
participate in any security now or hereafter held by the Agents and/or the
Lenders.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 BY THE GUARANTOR. In order to induce the Agents and the
Lenders to accept this Guaranty Agreement, the Guarantor represents and warrants
to the Agents and the Lenders (which representations and warranties will survive
the creation of the Obligations and any extension of credit thereunder) that:
(a) Benefit to the Guarantor. The Guarantor is a wholly-owned Subsidiary
of the Company and the Guarantor's guaranty pursuant to this Guaranty Agreement
reasonably may be expected to benefit, directly or indirectly, the Guarantor;
and the Guarantor has determined that this Guaranty Agreement is necessary and
convenient to the conduct, promotion and attainment of the business of the
Guarantor and the Company.
(b) Corporate Existence. The Guarantor: (i) is duly organized and validly
existing under the laws of the jurisdiction of its formation; (ii) has all
requisite power, and has all material governmental licenses, authorizations,
consents and approvals necessary to own its assets and carry on its business as
now being conducted; and (iii) is qualified to do business in all jurisdictions
in which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify would have a Material Adverse Effect.
(c) No Breach. The execution and delivery by the Guarantor of this
Guaranty Agreement and the other Security Instruments to which it is a party,
the consummation of the transactions herein or therein contemplated, and the
compliance with the terms and provisions hereof will not (i) conflict with or
result in a breach of, or require any consent under (A) the respective charter
or by-laws of the Guarantor, or (B) any applicable law or regulation, or any
order, writ, injunction or decree of any court or other Governmental Authority,
or any material agreement or instrument to which the Guarantor is a party or by
which it is bound or to which it is subject in each case in such manner as could
reasonably be expected to have a Material Adverse Effect; or (ii) constitute a
default under any such agreement or instrument, or result in the creation or
imposition of any Lien upon any of the revenues or Property of the Guarantor in
each case in such manner as could reasonably be expected to have a Material
Adverse Effect.
(d) Corporate Action. The Guarantor has all necessary corporate power and
authority to execute, deliver and perform its obligations under this Guaranty
Agreement and the Security Instruments to which it is a party; and the
execution, delivery and performance by the Guarantor of this Guaranty
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Agreement and the other Security Instruments to which such Person is a party
have been duly authorized by all necessary corporate action on its part. This
Guaranty Agreement and the Security Instruments to which the Guarantor is a
party constitute the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with their terms, except as may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws affecting creditors' rights and general principals of equity.
(e) Approvals. Other than consents heretofore obtained or described in the
Credit Agreement, no authorizations, approvals or consents of, and no filings or
registrations with, any Governmental Authority are necessary for the execution,
delivery or performance by the Guarantor of this Guaranty Agreement or the
Security Instruments to which it is a party or for the validity or enforce
ability thereof. It is understood that continued performance by the Guarantor
of this Guaranty Agreement and the other Security Instruments to which it is a
party will require various filings, such as filings related to environmental
matters, ERISA matters, Taxes and intellectual property, filings required to
maintain corporate and similar standing and existence, filings pursuant to the
Uniform Commercial Code and other security filings and recordings and filings
required by the SEC, routine filings in the ordinary course of business, and
filings required in connection with the exercise by the Lenders and the Agents
of remedies in connection with the Security Instruments.
(f) Solvency. The Guarantor (i) is not insolvent as of the date hereof and
will not be rendered insolvent as a result of this Guaranty Agreement, (ii) is
not engaged in business or a transaction, or about to engage in a business or a
transaction, for which any Property or assets remaining with the Guarantor is
unreasonably small capital, and (iii) does not intend to incur, or believe it
will incur, debts that will be beyond its ability to pay as such debts mature.
(g) No Representation by Agents or Lenders. Neither any Agent, any Lender
nor any other Person has made any representation, warranty or statement to the
Guarantor in order to induce the Guarantor to execute this Guaranty Agreement.
ARTICLE IV
SUBORDINATION OF INDEBTEDNESS
SECTION 4.01 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the
term "Guarantor Claims" shall mean all debts and obligations of the Company to
the Guarantor, whether such debts and obligations now exist or are hereafter
incurred or arise, or whether the obligation of the Company thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or obligations be evidenced by note,
contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such debts or obligations may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by. Except for payments permitted by the Credit Agreement, until
the Obligations shall be paid and satisfied in full, the Aggregate Commitments
are terminated and the Guarantor shall have performed all of its obligations
hereunder and under the other Security Instruments to which it is a party, the
Guarantor shall not receive or collect, directly or indirectly, from the Company
any amount upon the Guarantor Claims.
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SECTION 4.02 CLAIMS IN BANKRUPTCY. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving the Company, the Administrative Agent on behalf of the
Agents and the Lenders shall have the right to prove their claim in any proceed
ing, so as to establish their rights hereunder and receive directly from the
receiver, trustee or other court custodian, dividends and payments which would
otherwise be payable upon Guarantor Claims. The Guarantor hereby assigns such
dividends and payments to the Administrative Agent for the benefit of the Agents
and the Lenders. Should any Agent or Lender receive, for application upon the
Obligations, any such dividend or payment which is otherwise payable to the
Guarantor, and which, as between the Company and the Guarantor, shall constitute
a credit upon the Guarantor Claims, then upon payment in full of the
Obligations, the Guarantor shall become subrogated to the rights of the Agents
and the Lenders to the extent that such payments to the Agents and the Lenders
on the Guarantor Claims have contributed toward the liquidation of the
Obligations, and such subrogation shall be with respect to that proportion of
the Obligations which would have been unpaid if the Agents and the Lenders had
not received dividends or payments upon the Guarantor Claims.
SECTION 4.03 PAYMENTS HELD IN TRUST. In the event that notwithstanding
Sections 4.01 and 4.02, the Guarantor should receive any funds, payments, claims
or distributions which is prohibited by such Sections, the Guarantor agrees: (a)
to hold in trust for the Agents and the Lenders an amount equal to the amount of
all funds, payments, claims or distributions so received, and (b) that it shall
have absolutely no dominion over the amount of such funds, payments, claims or
distributions except to pay them promptly to the Administrative Agent, for the
benefit of the Agents and the Lenders; and the Guarantor covenants promptly to
pay the same to the Administrative Agent.
SECTION 4.04 LIENS SUBORDINATE. The Guarantor agrees that, until the
Obligations are paid in full and the Aggregate Commitments terminated, any Liens
upon the Company's assets securing payment of the Guarantor Claims shall be and
remain inferior and subordinate to any Liens upon the Company's assets securing
payment of the Obligations, regardless of whether such encumbrances in favor of
the Guarantor, any Agent or Lender presently exist or are hereafter created or
attach. Without the prior written consent of the Administrative Agent, the
Guarantor, during the period in which any of the Obligations are outstanding or
the Aggregate Commitments are in effect, shall not (a) exercise or enforce any
creditor's right it may have against the Company, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceeding
(judicial or otherwise, including without limitation the commencement of or
joinder in any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any Lien on assets of the Company held by the
Guarantor.
SECTION 4.05 NOTATION OF RECORDS. All promissory notes and, upon the
request of the Administrative Agent, all accounts receivable ledgers or other
evidence of the Guarantor Claims accepted by or held by the Guarantor shall
contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 SUCCESSORS AND ASSIGNS. This Guaranty Agreement is and shall
be in every particular available to the successors and assigns of the Agents and
Lenders and is and shall always be
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fully binding upon the legal representatives, successors and assigns of the
Guarantor, notwithstanding that some or all of the monies, the repayment of
which this Guaranty Agreement applies, may be actually advanced after any
bankruptcy, receivership, reorganization or other event affecting either the
Company or the Guarantor.
SECTION 5.02 NOTICES. Any notice or demand to the Guarantor under or in
connection with this Guaranty Agreement may be given and shall conclusively be
deemed and considered to have been given and received in the manner and to the
address of the Guarantor set forth in Exhibit D to the Credit Agreement as
provided for in Section 12.02 of the Credit Agreement.
SECTION 5.03 AUTHORITY OF ADMINISTRATIVE AGENT. The Guarantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Guaranty Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Guaranty Agreement shall, as between
the Agents and the Lenders, be governed by the Credit Agreement and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Guarantor, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Lenders with
full and valid authority so to act or refrain from acting; and the Guarantor
shall not be under any obligation, or entitlement, to make any inquiry
respecting such authority.
SECTION 5.04 CONSTRUCTION.
(A) THIS GUARANTY AGREEMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY
AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY AGREEMENT
OR THE OTHER SECURITY INSTRUMENTS TO WHICH THE GUARANTOR IS A PARTY MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS GUARANTY AGREEMENT, THE GUARANTOR HEREBY ACCEPTS FOR ITSELF AND (TO THE
EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE GUARANTOR HEREBY
IRREVOCA BLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN
SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE
AND DOES NOT PRECLUDE THE ADMINISTRATIVE AGENT OR ANY AGENT OR LENDER FROM
OBTAINING JURISDICTION OVER THE GUARANTOR IN ANY COURT OTHERWISE HAVING
JURISDICTION.
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(C) THE GUARANTOR HEREBY IRREVOCABLY DESIGNATE CT CORPORATION SYSTEM,
LOCATED AT 1633 BROADWAY, NEW YORK, NEW YORK 10019, AS ITS DESIGNEE, APPOINTEE
AND AGENT TO RECEIVE, FOR AND ON ITS BEHALF, SERVICE OF PROCESS IN THE STATE OF
NEW YORK IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY
AGREEMENT OR THE OTHER SECURITY INSTRUMENTS TO WHICH IT IS A PARTY. IT IS
UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY
FORWARDED BY OVERNIGHT COURIER TO THE GUARANTOR AT ITS ADDRESS SET FORTH IN
EXHIBIT D TO THE CREDIT AGREEMENT, BUT THE FAILURE OF THE GUARANTOR TO RECEIVE
SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. THE
GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT, AS THE CASE MAY
BE, AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH
MAILING.
(D) NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY AGENT OR ANY LENDER OR ANY
HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE GUARANTOR IN ANY
OTHER JURISDICTION.
(E) EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR TO DEFEND ANY RIGHTS UNDER THIS GUARANTY AGREEMENT OR ANY OTHER
SECURITY INSTRUMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS
GUARANTY AGREEMENT OR ANY OTHER SECURITY INSTRUMENT TO WHICH IT IS A PARTY AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
SECTION 5.05 PRIOR GUARANTY. This Guaranty supersedes and replaces that
certain Guaranty Agreement dated as of July 18, 1994, as amended, given
previously by the Guarantor in favor of the Administrative Agent and others.
SECTION 5.06 ENTIRE AGREEMENT. This Guaranty Agreement and the other
Security Instruments embody the entire agreement and understanding between the
Lenders, the Agents and the Guarantor and supersede all prior agreements and
understandings between such parties relating to the subject matter hereof and
thereof. There are no unwritten oral agreements between the parties.
SECTION 5.07 SURVIVAL OF OBLIGATIONS. To the extent that any payments on
the Obligations or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Obligations so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Agents' and the Lenders' Liens, rights, powers and
remedies under this Guaranty Agreement and each Security Instrument to which the
Guarantor is a party shall continue in full force and effect. In such event,
each Security Instrument shall be automatically reinstated and the Guarantor
shall take such action as may be reasonably requested by the Administrative
Agent and the Lenders to effect such reinstatement.
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SECTION 5.08 SUBJECT TO THE INTERCREDITOR AGREEMENT. This Guaranty
Agreement is subject to the terms of the Intercreditor Agreement which (a)
subjects the ability of the Lender Group to pursue remedies hereunder to the
prior consent of the Canadian Lenders and (b) sets forth a priority for the
application of proceeds upon any disposition of amounts received hereunder. By
execution and delivery of this Guaranty Agreement, the Guarantor hereby
acknowledges the terms of the Intercreditor Agreement, agrees to be bound by the
terms thereof and becomes a party to the Intercreditor Agreement as fully as if
the Guarantor had executed a signature page to the Intercreditor Agreement
(whether or not such additional signature page is ever executed and delivered).
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WITNESS THE EXECUTION HEREOF, effective as of the date first written above.
UMC Equatorial Guinea Corporation
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
UMC Petroleum Corporation hereby consents to and agrees to comply with the
terms of this Guaranty Agreement.
UMC PETROLEUM CORPORATION
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
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EXHIBIT 4.19
INTERCREDITOR AGREEMENT
among
United Meridian Corporation,
UMC Petroleum Corporation,
Norfolk Holdings Inc.,
UMC Resources Canada Ltd.,
UMIC Cote d'Ivoire Corporation,
UMC Equatorial Guinea Corporation,
The Chase Manhattan Bank,
as Administrative Agent and Collateral Agent,
Morgan Guaranty Trust Company of New York,
as Syndication Agent,
NationsBank of Texas, N.A.
and
Societe Generale,
as Documentation Agents,
Banque Paribas,
Wells Fargo Bank, N.A.,
and
Colorado National Bank,
as Co-Agents,
The Chase Manhattan Bank of Canada,
as Canadian Agent,
and
The Lenders Now or Hereafter Signatory Hereto
March 18, 1997
<PAGE>
TABLE OF CONTENTS
-----------------
Article I
Definitions
Section 1.01 Definitions............................................ 2
Section 1.02 Incorporation of U.S. Credit Agreement Definitions..... 3
Article II
Application of Proceeds
Section 2.01 Election to Pursue Remedies.......................... 3
Section 2.02 Duty of the Collateral Agent......................... 4
Section 2.03 Application of Proceeds.............................. 5
Section 2.04 Payments by Collateral Agent......................... 5
Section 2.05 Notices under Related Documents...................... 5
Section 2.06 Amendments........................................... 5
Section 2.07 Pro Rata Treatment................................... 6
Section 2.08 Voting Procedure..................................... 6
Section 2.09 Triggering Event..................................... 6
Section 2.10 Bankruptcy Preferences............................... 6
Section 2.11 Property of Obligors................................. 6
Section 2.12 Marshalling.......................................... 7
Section 2.13 Lender Dealings; Good Faith.......................... 7
Article III
Calculation of Indebtedness
Section 3.01 Notice of Amount of Indebtedness..................... 7
Section 3.02 Escrow Account....................................... 7
Section 3.03 Handling of Escrow Account........................... 8
Section 3.04 Currency Conversion.................................. 8
Article IV
The Collateral Agent
Section 4.01 Appointment of Collateral Agent...................... 8
Section 4.02 Nature of Duties of Collateral Agent................. 9
Section 4.03 Lack of Reliance on the Collateral Agent............. 9
Section 4.04 Certain Rights of the Collateral Agent............... 10
Section 4.05 Reliance by Collateral Agent......................... 10
Section 4.06 Collateral Agent's Reimbursements and Indemnification 10
Section 4.07 The Collateral Agent in its Individual Capacity...... 11
Section 4.08 Creditors as Owners.................................. 11
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Section 4.09 Successor Collateral Agent........................... 11
Section 4.10 Employment of Collateral Agent and Counsel........... 11
Section 4.11 Independent Action................................... 12
ARTICLE V
Miscellaneous
Section 5.01 Authority............................................ 12
Section 5.02 Termination.......................................... 12
Section 5.03 Notices, etc......................................... 12
Section 5.04 Payment of Expenses, Indemnities, etc................ 12
Section 5.05 Applicable Law....................................... 12
Section 5.06 Entire Agreement..................................... 13
Section 5.07 Execution in Counterparts............................ 13
Section 5.08 Amendment of Defined Instruments..................... 13
Section 5.09 References and Titles................................ 13
Section 5.10 Severability......................................... 13
Section 5.11 Authority............................................ 13
Section 5.12 Conflict with Loan Documents......................... 13
Section 5.13 Limitation by Law.................................... 13
Section 5.14 Benefit of Agreement; Limitation on Assignment....... 13
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INTERCREDITOR AGREEMENT
-----------------------
THIS INTERCREDITOR AGREEMENT dated as of March 18, 1997 (this "Agreement"),
is among: United Meridian Corporation, a corporation duly organized and validly
existing under the laws of the state of Delaware ("United Meridian"); UMC
Petroleum Corporation, a corporation duly organized and validly existing under
the laws of the state of Delaware (the "Company"); Norfolk Holdings Inc., a
corporation duly organized and validly existing under the laws of the state of
Delaware ("Norfolk"); UMC Resources Canada Ltd., a company continued under the
laws of the Province of British Columbia ("UMC Canada"); UMIC Cote d'Ivoire
Corporation, a corporation duly organized and validly existing under the laws of
the state of Delaware ("UMC-CI-11"); UMC Equatorial Guinea Corporation, a
corporation duly organized and validly existing under the laws of the state of
Delaware ("UMC-EG-B"); each of the other Persons now or hereafter signatory
hereto as an Obligor; each of the financial institutions that is now or
hereafter a signatory hereto (individually, a "U.S. Lender" and, collectively,
the "U.S. Lenders"); The Chase Manhattan Bank, as administrative agent for the
U.S. Lenders (in such capacity, the "Administrative Agent") and as Collateral
Agent for the Lender Group, Morgan Guaranty Trust Company of New York, as
syndication agent for the U.S. Lenders (in such capacity, the "Syndication
Agent"), NationsBank of Texas, N.A. and Societe Generale, as documentation
agents for the U.S. Lenders (in such capacity, the "Documentation Agents"), and
Banque Paribas, Wells Fargo Bank, N.A., and Colorado National Bank, as co-agents
for the U.S. Lenders (in such capacity, the "Co-Agents"), The Chase Manhattan
Bank of Canada ("Chase Canada"), as agent for the Canadian Lenders (in such
capacity, the "Canadian Agent"), each of the lenders now or hereafter signatory
to the Canadian Credit Agreement (collectively, the "Canadian Lenders").
Recitals
A. On the date of this Intercreditor Agreement, United Meridian, as
guarantor, the Company, the Administrative Agent, the Syndication Agent, the
Documentation Agents, the Co-Agents (the Administrative Agent, the Documentation
Agent and the Co-Agents collectively being the "U.S. Agents"), and the U.S.
Lenders are entering into that certain Global Credit Agreement (as the same is
from time to time supplemented, amended, restated, extended, or increased herein
called the "U.S. Credit Agreement").
B. On the date of this Intercreditor Agreement, UMC Canada, the Canadian
Agent, and the Canadian Lenders are entering into that certain Credit Agreement
(as the same is from time to time supplemented, amended, restated, extended, or
increased herein called the "Canadian Credit Agreement").
C. To secure, inter alia, the U.S. Indebtedness of the Company under the
U.S. Credit Agreement and the Canadian Indebtedness of UMC Canada under the
Canadian Credit Agreement (collectively, the "Credit Agreements") and the other
obligations of the Obligors under the Security Instruments, the Obligors will
execute and deliver the Security Instruments.
D. The U.S. Lenders and the Canadian Lenders (collectively, the
"Lenders") and the U.S. Agents and the Canadian Agent (collectively, the
"Agents"; and the Collateral Agent, the Lenders and
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the Agents collectively being the "Lender Group") are entering into this
Intercreditor Agreement to establish their relative rights with respect to
payment of their respective Indebtedness owed by the Obligors, to agree as to
the exercise of certain remedies and to appoint The Chase Manhattan Bank as
collateral agent for the purposes of dealing with the Security Instruments and
apportioning payments among the Lenders and for other purposes as set forth
herein.
E. The execution and delivery of this Intercreditor Agreement is a
condition to the performance by each Lender of its obligations under the Credit
Agreement to which it is a party.
F. NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and to induce the U.S. Agents and
the U.S. Lenders to enter into the U.S. Credit Agreement and the Canadian Agent
and the Canadian Lenders to enter into the Canadian Credit Agreement, the
parties hereto hereby agree as follows:
Article I
Definitions
Section 1.01 Definitions. The terms defined in the recitals shall have
the meanings assigned to those terms in such recitals, and the following terms
shall have the meanings assigned as follows:
"Acceptance Exposure" means, at any time, the aggregate face amount of all
Bankers Acceptances outstanding at such time for which UMC Canada has not yet
reimbursed the Canadian Lenders which have accepted such Bankers Acceptance
pursuant to the terms of the Canadian Credit Agreement.
"Balance" shall have the meaning assigned such term in Section 3.03.
"Business Day" shall mean any day excluding Saturday, Sunday and any other
day on which banks are required or authorized to close in New York City or
Toronto.
"Canadian Indebtedness" shall mean the Indebtedness (as defined in the
Canadian Credit Agreement) and shall include the aggregate Acceptance Exposure.
"Canadian Lender Notes" shall mean the Notes issued to the Canadian Lenders
under the Canadian Credit Agreement.
"Collateral Agent" shall mean The Chase Manhattan Bank in such capacity,
together with all successors in such capacity under the terms of this
Intercreditor Agreement.
"Commitments" shall mean the sum of the Aggregate Commitments of the U.S.
Lenders under the U.S. Credit Agreement and the Aggregate Commitments of the
Canadian Lenders under the Canadian Credit Agreement.
"Contingent Indebtedness" shall have the meaning assigned such term in
Section 3.03.
"Conversion Ratio" shall have the meaning assigned such term in Section
3.04.
"Escrow Account" shall have the meaning assigned such term in Section 3.02.
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"Group" shall mean the U.S. Lenders, as a group of Lenders, or the Canadian
Lenders, as a group of Lenders, as the case may be.
"Guarantors" shall mean each Person who now or hereafter guarantees the
U.S. Indebtedness and/or the Canadian Indebtedness.
"Guaranty Agreements" shall mean the Guaranty Agreements guarantying
payment of the U.S. Indebtedness and the Guaranty Agreements guarantying payment
of the Canadian Indebtedness.
"Indebtedness" shall mean all U.S. Indebtedness and Canadian Indebtedness,
including, but not limited to, all other sums of money which may be hereafter
paid or advanced by the Agents or the Lenders under the terms and provisions of
this Intercreditor Agreement or the other Security Instruments as such sums of
money relate either to the administration, protection and exercise of remedies
in connection with this Intercreditor Agreement or the Security Instruments, or
to any reimbursement and indemnity provisions contained in this Intercreditor
Agreement and the Security Instruments.
"Issuing Bank" shall mean, for each of the Letters of Credit, the issuer of
such Letter of Credit.
"Notes" shall mean the U.S. Lender Notes and the Canadian Lender Notes.
"Obligors" shall mean the Company, UMC Canada and the Guarantors.
"Pro Rata Share" shall mean as to each holder of any of the Indebtedness
the percentage that the Indebtedness held by such holder represents of all
Indebtedness.
"Proceeds" shall mean all cash proceeds and other Property received by the
Collateral Agent or any of the Lenders from or for the account of any Obligor,
from whatever source.
"Triggering Event" shall have the meaning assigned such term in Section
2.09.
"U.S. $ Amount" shall have the meaning assigned such term in Section 3.04.
"U.S. Indebtedness" shall mean the Indebtedness, including but not limited
to, the amount of the LC Exposure which is not at such time a part of the fixed
Indebtedness.
"U.S. Lender Notes" shall mean the Notes issued to the U.S. Lenders under
the U.S. Credit Agreement.
Section 1.02 Incorporation of U.S. Credit Agreement Definitions.
Capitalized terms not defined herein shall have the meaning assigned such terms
in the U.S. Credit Agreement.
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Article II
Application of Proceeds
Section 2.01 Election to Pursue Remedies.
(a) Upon the occurrence and during the continuance of any Triggering
Event, the Collateral Agent shall, subject to Section 2.02 and Article IV, take
or, as appropriate, direct the appropriate trustee or agent to take any and all
actions provided for in the Security Instruments relating to the pursuit of
remedies, including the foreclosure or disposition of collateral only if such
actions are authorized as provided in this Section 2.01.
(b) Upon the occurrence and during the continuance of any Triggering
Event, the Lenders shall vote on whether or not to pursue any remedy or remedies
available to them at law or otherwise, including whether or not to foreclose on
or dispose of collateral, if any. If the Required Lenders at such time vote to
pursue any particular remedy or remedies, including foreclosure or disposition
of collateral, instructions specifying the particular action to be taken from
the Required Lenders shall be delivered to the Collateral Agent. Upon receipt
by the Collateral Agent of such instructions from the Required Lenders, with
indemnities appropriate for such instructions as provided in Section 4.04, the
Collateral Agent shall immediately commence to take or direct the instructed
actions (and continue to take such actions) relating such remedies.
(c) Without regard to the occurrence of a Triggering Event, upon the
written instruction of the Required Lenders, with indemnities appropriate for
such instructions as provided in Section 4.04, the Collateral Agent shall (i)
take or direct any action provided for in the Security Instruments (other than
foreclosure or disposition of the collateral) or proceed to enforce, or direct
the enforcement of, consistent with the Security Instruments and applicable law
(other than foreclosure or disposition of the collateral), the rights or powers
provided in the Security Instruments and under applicable law for the benefit of
the Lender Group and shall give such notice or direction or shall take such
action or exercise such right or power hereunder or under any of the Security
Instruments incidental thereto as shall be reasonably specified in such
instructions and consistent with the terms of the Security Instruments and this
Intercreditor Agreement; and/or (ii) execute such instruments or agreements or
take such other action in connection with the Security Instruments as may be
deemed reasonably necessary or appropriate by the Required Lenders and
consistent with the terms of the Security Instruments and this Intercreditor
Agreement. Such action may include, but is not limited to (x) the giving of any
notice, approval, consent or waiver which may be called for under the Security
Instruments, (y) the requiring of the execution and delivery of additional
Security Instruments, or (z) employing agents or directing trustees in order to
accomplish the actions requested.
(d) Nothing in this Section 2.01 shall impair the right of a Lender to
exercise its rights of set-off existing at law or under the Credit Agreements,
but in any event, subject to the terms thereof.
Section 2.02 Duty of the Collateral Agent.
(a) The Collateral Agent shall not be obligated to follow any
instructions of any one or more of the Lenders if: (i) such instructions
conflict with the provisions of this Intercreditor Agreement or any other
Security Instrument or any law or (ii) the Collateral Agent has not been
adequately indemnified to its satisfaction. Nothing in this Article II shall
impair the right of the Collateral Agent in its discretion to take any action,
to the extent that the consent of any of the Lenders is not required or to the
extent
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such action is not prohibited by the terms hereof, which it deems proper and
consistent with the instructions given by the Lenders as provided for herein.
In the absence of written instructions, containing the appropriate indemnities,
from the Lenders or Required Lenders as appropriate for any particular matter,
the Collateral Agent shall have no duty to take or refrain from taking any
action unless such action or inaction is explicitly required by the terms of
this Intercreditor Agreement.
(b) Beyond its duties expressly provided herein or in any Security
Instrument and its duties to account to the Lender Group and/or the Obligors for
monies and other Property received by it hereunder or under any Security
Instrument, the Collateral Agent shall not have any implied duty to the Lender
Group or any Obligor as to any Property belonging to an Obligor (whether or not
the same constitutes collateral) in its possession or control or in the
possession or control of any of its agents or nominees, or any income thereon or
as to the preservation of rights against prior parties or any other rights
pertaining thereto.
Section 2.03 Application of Proceeds.
(a) Upon the occurrence and during the continuance of a Triggering
Event, all Proceeds shall be applied as follows and in accordance with Section
3.03:
(i) First, to the pro rata payment of costs and expenses reasonably
incurred by the Collateral Agent, the Agents or any other Lender in connection
with any action taken or proceeding brought, including reasonable legal expenses
and attorneys' fees, and of all Taxes (other than Excluded Taxes) or
assessments.
(ii) Second, any Balance remaining shall be applied to repay the
Indebtedness or held in escrow as specified in Section 3.03.
(iii) Finally, the payment of surplus proceeds, if any, to any Person
that may be lawfully entitled to receive the same, including without limitation,
an Obligor, and in the order of priority specified for by any Governmental
Requirement.
(b) At any time other than after the occurrence and during continuance
of a Triggering Event, payments made to the Lenders may be applied as provided
in the Credit Agreements.
Section 2.04 Payments by Collateral Agent. All payments by the
Collateral Agent hereunder shall be delivered to the administrative agents under
the Credit Agreements for distribution in the manner set forth therein.
Section 2.05 Notices under Related Documents. The Collateral Agent
shall deliver to each Lender promptly upon receipt thereof, duplicates or copies
of all material notices, requests and other instruments received by the
Collateral Agent under or pursuant to this Intercreditor Agreement or any
Security Instrument, to the extent that the same shall not have been previously
furnished to such Lender pursuant hereto or thereto. Promptly upon obtaining
such knowledge, each Lender agrees: (a) to deliver to the Collateral Agent, at
the same time it makes delivery to the Obligors, a copy of any notice of
default, notice of intent to accelerate or notice of acceleration with respect
to the Indebtedness subject to this Intercreditor Agreement; (b) to deliver to
the Collateral Agent, at the same time it makes delivery to any other Person, a
copy of any notice of the commencement of any judicial proceeding and a copy of
any other notice with respect to the exercise of remedies with respect to the
Indebtedness subject to
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this Intercreditor Agreement. The Collateral Agent agrees to deliver to each
Lender any notice or other communication received by it from any Lender pursuant
to clause (a) or (b) of this Section 2.05.
Section 2.06 Amendments. Amendments, modifications, supplements,
waivers, consents and approvals of or in connection with this Intercreditor
Agreement or any other Security Instrument (other than the Credit Agreements)
may be effectuated only upon the written consent of the Required Lenders (and,
if the rights or duties of the Collateral Agent and the Agents or any Obligors
are affected thereby, by the Collateral Agent and the Agents or the applicable
Obligor, as the case may be). Amendments, modifications, supplements, waivers,
consents and approvals of or in connection with the Credit Agreements shall be
effectuated only in accordance with the terms contained therein.
Section 2.07 Pro Rata Treatment. The Lenders hereby agree among
themselves that (a) prior to the occurrence and continuance of a Triggering
Event, each Lender shall be entitled to receive and retain for its own account
scheduled payments or voluntary prepayments of principal, interest, fees and
premium, if any, all in compliance with the Credit Agreements, and (b) after the
occurrence and during the continuance of a Triggering Event, all Proceeds shall
be applied by the Collateral Agent and shared by Lenders in accordance with the
respective Pro Rata Share held by each of them and in accordance with Section
2.03(a). In the event that any Lender shall obtain payment after the occurrence
and during the continuance of a Triggering Event, whether in whole or in part,
from any source in respect of its portion of the Indebtedness, including without
limitation payments by reason of the exercise of its right of offset, banker's
lien, general lien or counterclaim, such Lender shall promptly pay to the
Collateral Agent such amount for application in accordance with Section 2.03(a).
Section 2.08 Voting Procedure. Notwithstanding anything to the
contrary herein, in the Credit Agreements or in any other Security Instrument,
the Lenders agree that for purposes of any provision hereof or thereof that
requires a vote of the Required Lenders, each Lender shall have the right to
vote independently of the other Lenders in its Group. When this Intercreditor
Agreement requires a vote of the Required Lenders, the Collateral Agent shall
poll the Lenders in order to determine the vote of the Required Lenders (and
such vote shall be binding upon the Lenders who are not among the Required
Lenders). The Obligors and the Lender Group may rely on the Collateral Agent
with regard to any such vote without any duty of further inquiry.
Section 2.09 Triggering Event. The occurrence of any of the following
shall constitute a "Triggering Event":
(a) The occurrence and continuance of an Event of Default specified in
Sections 10.01(f), (g), and (h) of the U.S. Credit Agreement as it relates to
the Company, any Guarantor or UMC Canada, or
(b) The Collateral Agent shall have received from either the
Administrative Agent, the Canadian Agent or the Required Lenders, as
appropriate, written advice, which advice shall reference this Section 2.09, (i)
that an Event of Default has occurred and is continuing and (ii) that the unpaid
principal amount of the Notes and all interest accrued and unpaid thereon have
been declared to be then due and payable.
Section 2.10 Bankruptcy Preferences. If any payment actually
received by any member of the Lender Group is subsequently invalidated, declared
to be fraudulent or preferential or set aside and is required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state, provincial
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or Federal law, common law, or equitable cause, then the Collateral Agent shall
distribute to such Person from the Balance, exclusive of any amount in the
Escrow Account in accordance with Section 3.03, an amount equal to such payment.
If, due to previous disbursements to the Lender Group pursuant to Section
2.03(a), the Balance then held by the Collateral Agent is insufficient for such
purpose, then each other member of the Lender Group shall pay to such Person
upon demand an amount equal to a ratable portion of such payment according to
the aggregate amounts distributed to each member of the Lender Group by the
Collateral Agent.
Section 2.11 Property of Obligors. The Lenders agree that all the
provisions of this Intercreditor Agreement shall apply to any and all Properties
and rights of the Obligors or any other Obligor in which the Collateral Agent
(in its capacity as such), any Agent or any Lender at anytime acquires a right
of set-off or Lien, whether pursuant to the Security Instruments, the Credit
Agreements or a judgment, including, without limitation, real property or rights
in, on or over real property, notwithstanding any provision to the contrary in
any mortgage, leasehold mortgage or other document purporting to grant or
perfect any Lien in favor of any Lender, any Agent, or the Collateral Agent.
Section 2.12 Marshalling. The Collateral Agent shall not be required
to marshall any present or future security for (including without limitation any
collateral described in any of the Security Instruments), or guaranties of the
Indebtedness or any part or portion thereof, or to resort to such security or
guaranties in any particular order; and all rights in respect of such securities
and guaranties shall be cumulative and in addition to all other rights, however
existing or arising. To the extent that they lawfully may, each Agent and
Lender hereby agrees that it will not invoke any law relating to the marshalling
of collateral which might cause delay or impede the enforcement of the Lender
Group's rights under the Security Instruments or under any other instrument
evidencing any of the Indebtedness or under which any of the Indebtedness is
outstanding or by which any of the Indebtedness is secured or guaranteed.
Section 2.13 Lender Dealings; Good Faith. Nothing contained in this
Intercreditor Agreement shall prevent either Group of Lenders from dealing
directly or negotiating with the other Group for any purpose, including, but not
limited to, the purpose of attempting to reach agreement as to any vote or
proposed vote relating to the Collateral Agent's actions hereunder, whether or
not any Triggering Event or other Default or Event of Default has occurred.
Each U.S. Agent and U.S. Lender covenants and agrees with and for the benefit of
the Canadian Agent and each Canadian Lender, and the Canadian Agent and each
Canadian Lender covenants and agrees with and for the benefit of each U.S. Agent
and U.S. Lender, that it will, in taking any action under this Intercreditor
Agreement or directing the Collateral Agent to exercise any remedy hereunder or
under any other Security Instrument, take such action or make such direction in
good faith and in a commercially reasonable manner and not for the purpose of
hindering, delaying, obstructing or preventing the exercise by the other of its
rights under the Security Instruments.
Article III
Calculation of Indebtedness
Section 3.01 Notice of Amount of Indebtedness. Upon receipt of any
Proceeds to be distributed pursuant to Section 2.03(a)(ii), the Collateral Agent
shall give the Lenders notice thereof, and each Lender shall within five (5)
Business Days notify the Collateral Agent of the amount of Indebtedness owing to
such Lender. Such notification shall state the amount of its Indebtedness, how
much is then due and owing, and how much is Contingent Indebtedness. Each
Lender with Contingent
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Indebtedness shall describe the status of such Indebtedness. If requested by
the Collateral Agent, each Lender shall demonstrate that the amounts set forth
in its notice are actually owing to such Lender to the satisfaction of the
Collateral Agent.
Section 3.02 Escrow Account. Prior to taking any action to enforce
any Lien or remedy under any Security Instrument, or requesting cash collateral
for the Letters of Credit or Bankers Acceptances, the Collateral Agent shall
open an escrow account (the "Escrow Account") at its banking quarters in New
York, New York (or such other city where any successor may maintain banking
quarters) designated the "United Meridian Collateral Account."
Section 3.03 Handling of Escrow Account. Upon each receipt by the
Collateral Agent of Proceeds and after payment therefrom of all items referred
to in Section 2.03(a)(i), remaining Proceeds ("Balance") shall be applied as
provided in this Section 3.03. If at such time, there exists any Indebtedness
which is contingent in amount, including, without limitation, contingent amounts
of LC Exposure, but not including the Acceptance Exposure (such Indebtedness
being "Contingent Indebtedness"), the Collateral Agent shall (with the
information provided under Section 3.01) determine the amount of all
Indebtedness then outstanding, including, without limitation, Contingent
Indebtedness. The Balance shall be applied as follows:
(a) If no Contingent Indebtedness is outstanding, then all such
Balance shall be applied to repay or prepay the amount of the Indebtedness then
outstanding until the Indebtedness shall have been paid in full.
(b) If there exists Contingent Indebtedness, the Collateral Agent
shall (i) deposit in the Escrow Account a portion of such Balance equal to the
Contingent Indebtedness divided by total Indebtedness (until such time as the
amount on deposit in the Escrow Account equals the maximum amount of the
Contingent Indebtedness), and (ii) apply the remaining Balance to repay or
prepay the amount of the Indebtedness then outstanding until the Indebtedness
shall have been paid in full. Thereafter, any further remaining Balance shall
be returned or applied as provided in Section 2.03(a)(iii).
(c) If at any time Contingent Indebtedness or any part thereof becomes
Indebtedness which is no longer contingent, any funds held in the Escrow Account
up to the amount (or pro rata amount based upon the total amount of remaining
Contingent Indebtedness if the Escrow Amount is less than the amount of the
remaining Contingent Indebtedness) of such Indebtedness which has become fixed
(or pro rata amount based upon the total amount of remaining Contingent
Indebtedness) shall be distributed pro rata to the holders of such previously
Contingent Indebtedness. If all of the fixed Indebtedness has been paid in full
and the Collateral Agent determines that the amount of monies held in the Escrow
Account exceeds the sum of the Contingent Indebtedness outstanding at such time,
such excess shall be returned or applied as provided in Section 2.03(a)(iii).
Section 3.04 Currency Conversion. To the extent that calculations
under this Intercreditor Agreement involve U.S. and Canadian currency (or any
other currency), the Collateral Agent shall, at the time of such calculation,
determine all amounts based on U.S. dollars, using a conversion ratio (the
"Conversion Ratio") determined by it in good faith (the "U.S. $ Amount"). The
amount of distributions of a Lender's Pro Rata Share shall be based upon the
U.S. $ Amount, but in the case of a Canadian Lender shall be distributed in and
converted to a Canadian dollar amount calculated by using the Conversion Ratio.
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Article IV
The Collateral Agent
Section 4.01 Appointment of Collateral Agent. Each Lender hereby
designates The Chase Manhattan Bank to act as the collateral agent for the
Lenders with respect to the collateral pledge under any of the Security
Instruments, the enforcement of the Liens granted thereunder and the collection
of Proceeds following the disposition of any such collateral. Each Lender
hereby authorizes the Collateral Agent to designate The Chase Manhattan Bank of
Canada to act as the agent for the Collateral Agent on behalf of the Lenders
with respect to the Canadian assets under the Security Instruments. Each Lender
hereby authorizes the Collateral Agent to take such action on its behalf under
the provisions of this Intercreditor Agreement and the Security Instruments and
to exercise such powers and to perform such duties hereunder and thereunder as
are specifically delegated to either The Chase Manhattan Bank, as Administrative
Agent, or The Chase Manhattan Bank of Canada, as Canadian Agent, or required of
the Collateral Agent by the terms hereof and such other powers as are reasonably
incidental thereto. The Collateral Agent may perform any of its duties
hereunder by or through its agents or employees. The Collateral Agent agrees to
act as Collateral Agent upon the express terms and conditions contained in this
Article IV.
Section 4.02 Nature of Duties of Collateral Agent. The Collateral
Agent shall have no duties or responsibilities, except those expressly set forth
in this Intercreditor Agreement or any Security Instrument. The Collateral
Agent shall have and may exercise such powers hereunder and under the Security
Instruments as are specifically delegated to the Collateral Agent by the terms
hereof or to either The Chase Manhattan Bank, as Administrative Agent, or The
Chase Manhattan Bank of Canada, as Canadian Agent thereunder, together with such
powers as are reasonably incidental thereto. Neither the Collateral Agent nor
any of its directors, officers, employees or agents shall be liable to the
Lenders for any action taken or omitted by it as such hereunder or under the
Security Instruments, unless caused solely by its or their gross negligence or
willful misconduct. The duties of the Collateral Agent shall be mechanical and
administrative in nature; and the Collateral Agent shall not have by reason of
this Intercreditor Agreement a fiduciary relationship in respect of any Lender.
Nothing in this Intercreditor Agreement, expressed or implied, is intended to or
shall be so construed as to impose upon the Collateral Agent any Indebtedness in
respect of this Intercreditor Agreement and the other Security Instruments
except as expressly set forth herein.
Section 4.03 Lack of Reliance on the Collateral Agent.
(a) Independently and without reliance upon the Collateral Agent or
any other Lender, each Lender, to the extent it deems appropriate, has made (i)
its own independent investigation of the financial condition and affairs of the
Obligors based on such documents and information as it has deemed appropriate in
connection with the taking or not taking of any action in connection herewith,
and (ii) its own appraisal of the credit worthiness of the Obligors. Each
Lender also acknowledges that it will, independently and without reliance upon
the Collateral Agent or any other Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Intercreditor
Agreement, the Indebtedness or the Security Instruments. Except as expressly
provided in this Intercreditor Agreement and the other Security Instruments, the
Collateral Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Obligors or any
of United Meridian's Subsidiaries which may come into the possession of the
Collateral Agent or any of its Affiliates whether now in its possession or in
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its possession at any time or times hereafter; and the Collateral Agent shall
not be required to keep itself informed as to the performance or observance by
any Obligor of this Intercreditor Agreement, any Security Instrument or any
other document referred to or provided for herein or to inspect the Properties
or books of any Obligor.
(b) The Collateral Agent shall not (i) be responsible to any Lender
for any recitals, statements, information, representations or warranties herein,
in any Security Instrument, or in any document, certificate or other writing
delivered in connection herewith or therewith or for the execution,
effectiveness, genuineness, validity, enforceability, collectability, priority
or sufficiency of this Intercreditor Agreement, the Indebtedness or the Security
Instruments or the financial condition of the Obligors; or (ii) be required to
make any inquiry concerning the performance or observance of any of the terms,
provisions or conditions of this Intercreditor Agreement, the Indebtedness or
the Security Instruments, the financial condition of the Obligors, or the
existence or possible existence of any Default or Event of Default.
Section 4.04 Certain Rights of the Collateral Agent. If the
Collateral Agent shall request instructions from the Lenders with respect to any
act or action (including the failure to act) in connection with this
Intercreditor Agreement, the Indebtedness and the Security Instruments, the
Collateral Agent shall be entitled to refrain from such act or taking such
action unless and until the Collateral Agent shall have received instructions
from the Required Lenders pursuant to the terms hereof; and the Collateral Agent
shall not incur liability to any Person by reason of so refraining. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against the Collateral Agent as a result of the Collateral Agent acting or
refraining from acting under this Intercreditor Agreement or the Security
Instruments in accordance with the written instructions given in accordance with
this Intercreditor Agreement and such instructions and any action taken or
failure to act pursuant thereto shall be binding on all the Lenders. Except for
action expressly required of the Collateral Agent pursuant to the terms hereof,
the Collateral Agent shall be fully justified in failing or refusing to take any
action hereunder or under the Security Instruments unless it shall first be
indemnified to its satisfaction by the Obligors or the Lenders against any and
all liability and expense which may be incurred by the Collateral Agent by
reason of taking or continuing to take any such action. Notwithstanding any
other provision of this Article IV or any indemnity or instructions provided by
any or all of the Lenders, the Collateral Agent shall not be required to take
any action which exposes the Collateral Agent to personal liability or which is
contrary to this Intercreditor Agreement, the Security Instruments or applicable
law.
Section 4.05 Reliance by Collateral Agent. The Collateral Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note or other instrument evidencing the Indebtedness, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other documentary, teletransmission or telephone
message believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person. The Collateral Agent may consult with independent
legal counsel (which shall not be counsel for the Obligors), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 4.06 COLLATERAL AGENT'S REIMBURSEMENTS AND INDEMNIFICATION.
TO THE EXTENT THE COLLATERAL AGENT IS NOT REIMBURSED BY THE COMPANY OR UMC
CANADA, EACH LENDER WILL (WITHOUT DUPLICATION IN THE CASE OF A U.S. LENDER AND
ITS AFFILIATED CANADIAN LENDER) REIMBURSE AND INDEMNIFY THE COLLATERAL AGENT, IN
PROPORTION TO ITS GLOBAL COMMITMENT PERCENTAGE, FOR AND AGAINST ANY AND ALL
INDEMNITY MATTERS WHICH
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MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE COLLATERAL AGENT IN
PERFORMING ITS DUTIES HEREUNDER OR UNDER ANY SECURITY INSTRUMENT OR OTHERWISE IN
CONNECTION HEREWITH OR THEREWITH, INCLUDING LOSSES OCCURRING FROM THE ORDINARY
AND/OR COMPARATIVE NEGLIGENCE OF THE COLLATERAL AGENT, IN ANY WAY RELATING TO OR
ARISING OUT OF THIS INTERCREDITOR AGREEMENT; PROVIDED THAT NO LENDER SHALL BE
LIABLE FOR ANY PORTION OF SUCH LIABILITIES, INDEBTEDNESS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS RESULTING
SOLELY FROM THE COLLATERAL AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
Section 4.07 The Collateral Agent in its Individual Capacity. With
respect to its Indebtedness under the Credit Agreements and its Indebtedness,
the Collateral Agent shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not performing the
duties specified herein; and the terms "Lenders", "Required Lenders", or any
similar terms shall, unless the context clearly otherwise indicates, include The
Chase Manhattan Bank (or any successor Collateral Agent), in its individual
capacity as and to the extent it is a holder of any Note or is an Issuing Bank
and not in its capacity as an Agent or as the Collateral Agent. The Collateral
Agent may accept deposits from, lend money to, and generally engage in any kind
of banking, trust, financial advisory or other business with the Obligors or any
Affiliate of the Obligors as if it were not performing the duties specified
herein, and may accept fees and other consideration from the Obligors for
services in connection with this Intercreditor Agreement and otherwise without
having to account for the same to the Lenders.
Section 4.08 Creditors as Owners. The Collateral Agent may deem and
treat each Lender as the owner of such Lender's Indebtedness for all purposes
hereof unless and until the Collateral Agent is notified of a change in Lenders
pursuant to the terms of Section 12.06 of the U.S. Credit Agreement or Section
12.03 of the Canadian Credit Agreement, as applicable.
Section 4.09 Successor Collateral Agent.
(a) The Collateral Agent may resign at any time by giving sixty (60)
days prior written notice thereof to the Lender Group, the Company and UMC
Canada and may be removed at any time with cause by the Required Lenders, which
resignation or removal shall be effective upon the appointment of a successor to
the Collateral Agent. Upon any such resignation or removal, the Required
Lenders shall have the right to appoint a successor Collateral Agent. If within
thirty (30) days after the retiring Collateral Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Collateral Agent,
no successor Collateral Agent shall have been so appointed by the Required
Lenders and accepted such appointment, then, the retiring Collateral Agent may,
on behalf of the Lenders, appoint a successor Collateral Agent, which shall be a
bank which maintains an office in the United States of America, or a commercial
bank organized under the laws of the United States of America or of any State
thereof, or any Affiliate of such bank, having a combined capital and surplus of
at least $200,000,000 as of the date of its most recent financial statements.
(b) Upon the acceptance of any appointment as Collateral Agent
hereunder by a successor Collateral Agent, such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, and the retiring Collateral Agent
shall be discharged from its duties and Indebtedness under this Intercreditor
Agreement. After any retiring Collateral Agent's resignation or removal
hereunder as Collateral Agent, the provisions of
11
<PAGE>
this Intercreditor Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Collateral Agent under this
Intercreditor Agreement.
Section 4.10 Employment of Collateral Agent and Counsel. The
Collateral Agent may execute any of its duties as Collateral Agent hereunder or
under the Security Instruments by or through employees, agents, and attorneys-
in-fact and shall not be answerable to the Lenders for the default or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care,
provided that the Collateral Agent shall always be obligated to account for
moneys or securities received by it or its authorized agents. The Collateral
Agent shall be entitled to advice of independent counsel concerning all matters
pertaining to the agency hereby created and its duties hereunder or under the
Security Instruments.
Section 4.11 Independent Action. Each Lender agrees that no Lender
or Agent other than the Collateral Agent shall have any right individually to
realize upon the Liens granted by the Security Instruments or to otherwise
enforce or exercise any remedy in respect of the Security Instruments (other
than the right of set-off at law or specified in the Credit Agreements, but in
any event, subject to the terms thereof), it being understood and agreed that
such remedies may be exercised only by the Collateral Agent for the ratable
benefit of the Lender Group. Each Agent and Lender further agrees that it shall
not individually institute any judicial action pertaining to the Security
Instruments or exercise any other remedy (other than the right of set-off at law
or specified in the Credit Agreements, but in any event, subject to the terms
thereof), pertaining to the Security Instruments, except with the consent of the
Required Lenders.
ARTICLE V
Miscellaneous
Section 5.01 Authority. The parties hereto represent and warrant
that they have all requisite power to, and have been duly authorized to, enter
into this Intercreditor Agreement.
Section 5.02 Termination. This Intercreditor Agreement shall
terminate upon receipt by the Collateral Agent of evidence satisfactory to it of
(a) the payment (or prepayment) in full of the principal of and the premium, if
any, and interest on all Indebtedness, (b) the termination of the Commitments in
the Credit Agreements, and (c) the termination of the Security Instruments
pursuant to the terms of the Credit Agreements.
Section 5.03 Notices, etc. All notices and other communications
hereunder shall be given in writing and shall be given to such Person at its
address or telecopy number as set forth on the signature pages of the Credit
Agreements or such other address or telecopy number such Person may hereafter
specify by notice to the Collateral Agent (who shall promptly notify the
Obligors and the other Lenders). Each notice or other communication shall be
effective (a) if given by mail, upon receipt, (b) if given by telecopier during
regular business hours, once such telecopy is transmitted to the telecopy number
provided in writing to the Collateral Agent by each Lender and by each Obligor,
respectively, or (c) if given by any other means, upon receipt; provided that
notices to the Collateral Agent are not effective until received.
SECTION 5.04 PAYMENT OF EXPENSES, INDEMNITIES, ETC. TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, THE OBLIGORS SHALL INDEMNIFY THE AGENTS AND
THE LENDERS IN ACCORDANCE WITH THE TERMS OF THE CREDIT AGREEMENTS AND THE
OBLIGORS HEREBY AGREE THAT ALL INDEMNITIES SET FORTH IN THE CREDIT AGREEMENTS
SHALL ALSO RUN IN FAVOR OF THE
12
<PAGE>
COLLATERAL AGENT. IF AND TO THE EXTENT THAT THE INDEBTEDNESS OF THE OBLIGORS
UNDER THIS SECTION 5.04 OR UNDER THE RESPECTIVE INDEMNITY PROVISIONS OF THE
CREDIT AGREEMENTS ARE UNENFORCEABLE FOR ANY REASON, THE OBLIGORS HEREBY AGREE TO
MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND SATISFACTION OF SUCH
INDEBTEDNESS WHICH IS PERMISSIBLE UNDER APPLICABLE LAW. THE OBLIGORS'
INDEBTEDNESS UNDER THIS SECTION SHALL SURVIVE ANY TERMINATION OF THIS
INTERCREDITOR AGREEMENT AND THE PAYMENT OF THE INDEBTEDNESS, BUT SHALL TERMINATE
UPON THE TERMINATION OF THE INDEMNITIES CONTAINED IN THE CREDIT AGREEMENTS.
Section 5.05 Applicable Law. THIS INTERCREDITOR AGREEMENT
(INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF AND
THEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
Section 5.06 Entire Agreement. The Notes, this Intercreditor
Agreement and the other Security Instruments embody the entire agreement and
understanding between the Lenders, the Agents and the Obligors and supersede all
prior agreements and understandings between such parties relating to the subject
matter hereof and thereof. There are no unwritten oral agreements between the
parties.
Section 5.07 Execution in Counterparts. This Intercreditor Agreement
may be executed in any number of counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Any signature page of a counterpart may
be detached therefrom without impairing the legal effect of the signatures
thereon and attached to another counterpart identical in form thereto but having
attached to it one or more additional signature pages signed by other parties.
Section 5.08 Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein, the terms defined in
this Intercreditor Agreement which refer to a particular agreement, instrument
or document also refer to and include all renewals, extensions, increases,
modifications, supplements, amendments, and restatements of such agreement,
instrument or document; provided that nothing contained in this section shall be
construed to authorize any such renewal, extension, increases, modification,
supplement, amendment or restatement.
Section 5.09 References and Titles. All references in this
Intercreditor Agreement to Schedules, articles, sections, subsections and other
subdivisions refer to the Schedules, articles, sections, subsections and other
subdivisions of this Intercreditor Agreement unless expressly provided
otherwise. Titles appearing at the beginning of any subdivisions are for
convenience only and do not constitute any part of such subdivisions and shall
be disregarded in construing the language contained in such subdivisions.
Section 5.10 Severability. If any term or provision of this
Intercreditor Agreement shall be determined to be illegal or unenforceable, all
other terms and provisions of this Intercreditor Agreement shall nevertheless
remain effective and shall be enforced to the fullest extent permitted by
applicable law.
Section 5.11 Authority. The parties hereto represent and warrant
that they have all requisite power to, and have been duly authorized to, enter
into this Agreement.
Section 5.12 Conflict with Loan Documents. If there is a conflict
between the terms and provisions contained in the Credit Agreements, the Notes,
any instrument evidencing the Indebtedness or any Security Instrument with the
terms and provisions contained herein, the terms and provisions contained in
this Intercreditor Agreement shall control.
13
<PAGE>
Section 5.13 Limitation by Law. All rights, remedies and powers
provided herein may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law; and all the provisions hereof
are intended (a) to be subject to all applicable mandatory provisions of law
which may be controlling and (b) to be limited to the extent necessary so that
they will not render this Intercreditor Agreement or any Security Instrument
invalid under the provisions of any applicable law.
Section 5.14 Benefit of Agreement; Limitation on Assignment. The
terms and provisions of this Intercreditor Agreement shall be binding upon and
inure to the benefit of the Agents and each Lender and their respective
successors and assigns. Except as stated in the last sentence of Section 2.08
hereof, the terms and provisions of this Intercreditor Agreement shall not inure
to the benefit of, nor be relied upon by, the Obligors or their successors or
assigns. No Lender shall assign, transfer or sell any part of its portion of
the Indebtedness, unless in connection with such assignment, transfer or sale,
such assignee, transferee or purchaser shall first become a party to this
Intercreditor Agreement.
14
<PAGE>
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Intercreditor Agreement as of the date first
above written.
LENDERS AND AGENTS:
THE CHASE MANHATTAN BANK, individually
and as Administrative Agent
By:
--------------------------------
Name:
Title:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, individually and as
Syndication Agent
By:
--------------------------------
Name:
Title:
NATIONSBANK OF TEXAS, N.A., individually
and as Documentation Agent
By:
--------------------------------
Name:
Title:
SOCIETE GENERALE, SOUTHWEST AGENCY,
individually and as Documentation Agent
By:
--------------------------------
Name:
Title:
15
<PAGE>
BANQUE PARIBAS, individually and as
Co-Agent
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
WELLS FARGO BANK, N.A., individually
and as Co-Agent
By:
--------------------------------
Name:
Title:
COLORADO NATIONAL BANK, individually
and as Co-Agent
By:
--------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK OF CANADA,
individually and as Canadian Agent
By:
--------------------------------
Name:
Title:
SOCIETE GENERALE (CANADA)
By:
--------------------------------
Name:
Title:
16
<PAGE>
COLLATERAL AGENT:
- ----------------
THE CHASE MANHATTAN BANK, as
Collateral Agent
By:
--------------------------------
Name:
Title:
17
<PAGE>
The Obligors hereby execute this Intercreditor Agreement to evidence their
agreement that:
1. The Obligors shall be bound by all of the terms and provisions of this
Intercreditor Agreement.
2. The Obligors acknowledge and agree that the terms of this Intercreditor
Agreement shall control over the terms of the Credit Agreements, the
Notes, the instruments evidencing the Indebtedness and the Security
Instruments to the extent of any conflict relating to the relative
rights of the Agents and the Lenders.
3. THE INDEMNITY AND REIMBURSEMENT PROVISIONS CONTAINED IN SECTION 5.04
SHALL APPLY TO ALL MATTERS UNDER THIS INTERCREDITOR AGREEMENT AND THE
OBLIGORS AGREE TO INDEMNIFY AND REIMBURSE THE COLLATERAL AGENT IN
ACCORDANCE WITH THE TERMS THEREOF.
4. Except as stated in the last sentence of Section 2.08 hereof, the terms
and provisions of this Intercreditor Agreement shall inure solely to the
benefit of the Agents, each Lender and their respective successors and
assigns and the terms and provisions of this Intercreditor Agreement
shall not inure to the benefit of nor be enforceable by the Obligors or
their successors or assigns. This Intercreditor Agreement may be amended
as provided herein without the necessity of the Obligors joining in any
such amendment, provided, that the Obligors shall not be bound by any
amendment which would have the effect of increasing their Indebtedness
and indemnities hereunder or materially affecting their rights or duties
under the Security Instruments unless they shall have consented to such
amendment.
5. Each Obligor at its expense will execute, acknowledge and deliver all
such agreements and instruments and take all such action as the
Collateral Agent or the Required Lenders from time to time may
reasonably request in order further to effectuate the purposes of this
Intercreditor Agreement and to carry out the terms hereof.
18
<PAGE>
OBLIGORS:
- --------
UMC PETROLEUM CORPORATION
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
UMC RESOURCES CANADA LTD.
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
UNITED MERIDIAN CORPORATION
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
NORFOLK HOLDINGS INC.
By:
--------------------------------
Name:
Title:
UMIC Cote d'Ivoire Corporation
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
UMC Equatorial Guinea Corporation
By:
--------------------------------
Kevin McMillan
Vice President and Treasurer
19
<PAGE>
EXHIBIT 11.1
CALCULATION OF NET INCOME PER COMMON SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
For the three
months ended
March 31,
-------------------
1997 1996
--------- --------
<S> <C> <C>
Net income......................... $ 6,199 $ 3,716
Dividends paid on preferred stock.. - (766)
------- -------
Amount available to common
shareholders.................... $ 6,199 $ 2,950
======= =======
Weighted average number of common
shares outstanding.............. 36,627 29,618
======= =======
Net income per common share........ $ 0.17 $ 0.10
======= =======
</TABLE>
CALCULATION OF WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
For the three
months ended
March 31,
-----------------
1997 1996
-------- ------
<S> <C> <C>
Shares outstanding from beginning of
period.................................. 35,217 28,150
332 stock options exercised in the
three months ended March 31, 1997....... 18 -
103 stock options exercised in the three
months ended March 31, 1996............. - 8
Common stock equivalents of
stock options and warrants/ (1)/......... 1,392 1,460
------ ------
36,627 29,618
====== ======
</TABLE>
/(1)/The calculation of common stock equivalents of stock options and warrants
is based on the "Treasury Method" as detailed in Accounting Principles Board
Opinion No. 15.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 63,774
<SECURITIES> 0
<RECEIVABLES> 77,727
<ALLOWANCES> 1,190
<INVENTORY> 11,788
<CURRENT-ASSETS> 160,672
<PP&E> 909,269
<DEPRECIATION> 363,444
<TOTAL-ASSETS> 745,554
<CURRENT-LIABILITIES> 113,644
<BONDS> 156,693
0
0
<COMMON> 355
<OTHER-SE> 443,858
<TOTAL-LIABILITY-AND-EQUITY> 745,554
<SALES> 63,480
<TOTAL-REVENUES> 65,005
<CGS> 0
<TOTAL-COSTS> 13,150
<OTHER-EXPENSES> 33,936
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,688
<INCOME-PRETAX> 11,655
<INCOME-TAX> 5,456
<INCOME-CONTINUING> 6,199
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,199
<EPS-PRIMARY> 0.17
<EPS-DILUTED> 0.17
</TABLE>
