UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 1-7667
------------------------
SANTA FE SNYDER CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-2722169
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
840 GESSNER, SUITE 1400
HOUSTON, TEXAS 77024
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) (713) 507-5000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares of each of the issuer's classes of common
stock, as of the latest practicable date:
CLASS OUTSTANDING AS OF JULY 30, 1999
Common stock, $.01 par value 171,387,554
================================================================================
<PAGE>
SANTA FE SNYDER CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Statement of Operations
(unaudited) --
Three Months Ended June 30, 1999
and 1998 and
Six Months Ended June 30, 1999 and
1998............................... 3
Consolidated Balance Sheet --
June 30, 1999 (unaudited) and
December 31, 1998.................. 4
Consolidated Statement of Cash Flows
(unaudited) --
Three Months Ended June 30, 1999
and 1998 and
Six Months Ended June 30, 1999 and
1998............................... 5
Notes to Consolidated Financial
Statements......................... 6
ITEM 2. Management's Discussion and Analysis
of Financial
Condition and Results of
Operations......................... 13
ITEM 3. Quantitative and Qualitative
Disclosures about Market Risks..... 19
<CAPTION>
PART II. OTHER INFORMATION
<S> <C> <C>
ITEM 4. Submission of Matters to a Vote of
Security Holders................... 20
ITEM 6. Exhibits and Reports on Form 8-K..... 20
</TABLE>
2
<PAGE>
SANTA FE SNYDER CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- --------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Sales of crude oil and liquids..... $ 63.4 $ 45.7 $ 106.5 $ 85.5
Sales of natural gas............... 48.5 31.9 73.3 60.7
Other.............................. 0.5 0.2 0.8 0.4
--------- --------- --------- ---------
Total Revenues................ 112.4 77.8 180.6 146.6
--------- --------- --------- ---------
Costs and expenses:
Production and operating........... 30.9 26.2 59.2 51.5
Exploration, including dry hole
costs............................ 9.4 7.3 20.6 19.5
Depletion, depreciation and
amortization..................... 44.1 33.4 76.0 61.5
Impairment of oil and gas
properties....................... 196.4 -- 196.4 --
General and administrative......... 7.6 4.6 13.0 9.0
Taxes other than income............ 6.1 4.3 9.6 8.4
Merger related costs............... 16.8 -- 16.8 --
Loss (gain) on disposition of
assets........................... 0.1 1.2 0.2 1.2
--------- --------- --------- ---------
Total costs and expenses...... 311.4 77.0 391.8 151.1
--------- --------- --------- ---------
Income (loss) from operations........... (199.0) 0.8 (211.2) (4.5)
Interest income.................... 0.3 1.0 0.7 3.2
Interest expense................... (10.7) (5.3) (17.5) (9.1)
Interest capitalized............... 1.3 1.9 2.6 3.6
Other income (expense)............. (0.1) (0.1) (0.1) (0.1)
--------- --------- --------- ---------
Income (loss) before income taxes and
extraordinary item.................... (208.2) (1.7) (225.5) (6.9)
Current income tax (expense)
benefit.......................... 0.6 2.8 (0.1) 5.4
Deferred income tax (expense)
benefit.......................... 63.8 (0.7) 69.7 1.6
--------- --------- --------- ---------
Income (loss) before extraordinary
item.................................. (143.8) 0.4 (155.9) 0.1
Extraordinary item -- debt
extinguishment................... (4.2) -- (4.2) --
--------- --------- --------- ---------
Net income (loss)....................... $ (148.0) $ 0.4 $ (160.1) $ 0.1
========= ========= ========= =========
Net income (loss) per common share,
basic and diluted
Before extraordinary item.......... $ (0.99) $ -- $ (1.26) $ --
Extraordinary item -- debt
extinguishment................... (0.03) -- (0.03) --
--------- --------- --------- ---------
Per common share................... $ (1.02) $ -- $ (1.29) $ --
========= ========= ========= =========
Weighted average number of shares
outstanding........................... 145.3 102.9 123.9 102.8
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
SANTA FE SNYDER CORPORATION
BALANCE SHEET
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
--------- -------------
<S> <C> <C>
ASSETS (UNAUDITED)
Current Assets:
Cash and cash equivalents.......... $ 21.7 $ 12.1
Accounts receivable, net........... 73.1 53.2
Inventories........................ 22.8 19.0
Other current assets............... 27.4 31.7
--------- -------------
Total Current Assets....... 145.0 116.0
--------- -------------
Investments........................ 29.2 --
Properties and equipment, at cost:
Oil and gas (successful efforts
method of accounting).......... 2,833.9 1,956.5
Other........................... 24.5 20.5
--------- -------------
2,858.4 1,977.0
Accumulated depletion,
depreciation, amortization and
impairment...................... (1,537.2) (1,258.7)
--------- -------------
Net property and equipment.... 1,321.2 718.3
--------- -------------
Other Assets:
Deferred income taxes.............. -- 13.5
Other.............................. 22.7 11.2
--------- -------------
Total Other Assets......... 22.7 24.7
--------- -------------
Total Assets......................... $ 1,518.1 $ 859.0
========= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable................... $ 105.8 $ 123.3
Other current liabilities.......... 49.4 15.9
--------- -------------
Total Current
Liabilities.................. 155.2 139.2
--------- -------------
Long-term debt....................... 640.9 330.6
Deferred revenues.................... 6.7 3.6
Other long-term obligations.......... 41.4 37.2
Deferred income taxes................ 75.9 --
Commitments and Contingencies (See
Note 8)
Shareholders' Equity:
Preferred stock, $0.01 par value,
50.1 and 38.1 shares authorized,
respectively, none issued and
outstanding..................... -- --
Common stock, $0.01 par value,
300.0 and 200.0 shares
authorized,
171.8 and 103.0 shares issued
and outstanding, respectively... 1.7 1.0
Paid-in capital.................... 1,139.6 728.2
Accumulated deficit................ (532.9) (372.5)
Treasury stock, at cost, 0.8 shares
and 0.8 shares, respectively.... (6.5) (6.8)
Unamortized restricted stock
awards.......................... -- (1.5)
Accumulated other comprehensive
loss............................ (3.9) --
--------- -------------
Total Shareholders' Equity........... 598.0 348.4
--------- -------------
Total Liabilities and Shareholders'
Equity............................... $ 1,518.1 $ 859.0
========= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
SANTA FE SNYDER CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- --------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Operating activities:
Net income (loss).................. $ (148.0) $ 0.4 $ (160.1) $ 0.1
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depletion, depreciation and
amortization.................. 44.1 33.4 76.0 61.5
Impairment of oil and gas
properties.................... 196.4 -- 196.4 --
Deferred income taxes........... (66.1) 0.7 (72.0) (1.6)
Loss (gain) on disposition of
assets........................ 0.1 1.2 0.2 1.2
Exploratory dry hole costs...... 0.8 3.6 6.3 7.2
Other........................... 2.8 1.0 4.0 1.9
Changes in operating assets and
liabilities:
Decrease (increase) in accounts
receivable...................... (0.9) 6.6 (4.5) 4.6
Decrease (increase) in
inventories..................... (2.9) (0.8) (2.0) (3.8)
Increase (decrease) in accounts
payable......................... 0.3 2.1 1.2 (10.2)
Net change in other assets and
liabilities..................... (7.8) 0.4 3.7 2.2
--------- --------- --------- ---------
Net cash provided by operating
activities......................... 18.8 48.6 49.2 63.1
--------- --------- --------- ---------
Investing activities:
Capital expenditures, including
exploratory dry hole costs...... (67.2) (59.4) (128.9) (118.1)
Acquisition of producing
properties...................... 0.1 (88.2) (0.4) (100.0)
Acquisition of Snyder Oil
Corporation..................... (1.5) -- (1.5) --
Net proceeds from disposition of
assets.......................... 0.3 0.3 0.4 1.8
--------- --------- --------- ---------
Net cash used in investing
activities......................... (68.3) (147.3) (130.4) (216.3)
--------- --------- --------- ---------
Financing activities:
Net change in long-term lines of
credit.......................... 36.2 108.8 67.5 165.9
Issuance of Senior Notes........... 123.4 -- 123.4 --
Retirement of 11% Subordinated
Debentures...................... (100.0) -- (100.0) --
Treasury stock reissued............ 0.4 1.1 0.4 1.5
Treasury stock purchased........... (0.3) (1.1) (0.5) (6.0)
--------- --------- --------- ---------
Net cash provided by financing
activities......................... 59.7 108.8 90.8 161.4
--------- --------- --------- ---------
Net increase in cash and cash
equivalents........................ 10.2 10.1 9.6 8.2
Cash and cash equivalents at
beginning of period................ 11.5 3.7 12.1 5.6
--------- --------- --------- ---------
Cash and cash equivalents at end of
period............................. $ 21.7 $ 13.8 $ 21.7 $ 13.8
========= ========= ========= =========
Supplemental disclosure of cash flow
information:
Interest paid...................... $ 18.8 $ 7.1 $ 22.8 $ 7.8
Income taxes paid.................. $ 0.6 $ 1.5 $ 2.3 $ 3.3
</TABLE>
The accompanying notes an are integral part of these consolidated financial
statements.
5
<PAGE>
SANTA FE SNYDER CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements at June 30, 1999 and for the three
and six months then ended are unaudited and reflect all adjustments (consisting
of only normal and recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of the financial position and
operating results of Santa Fe Snyder Corporation ("Santa Fe Snyder" or the
"Company") for the interim periods. Santa Fe Snyder was formed by the merger
of Snyder Oil Corporation ("Snyder") into Santa Fe Energy Resources, Inc.
("Santa Fe") on May 5, 1999.
The consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto, together with
management's discussion and analysis of financial condition and results of
operations contained in the Annual Reports on Form 10-K/A for the year ended
December 31, 1998 for Santa Fe and Snyder. The results for the three and six
months ended June 30, 1999 are not necessarily indicative of the results which
may be expected for any other interim period or for the year ending December 31,
1999.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"). SFAS 133 was amended by Statement of
Financial Accounting Standards No. 137 resulting in the deferral of the
effective date to all fiscal quarters of all fiscal years beginning after June
15, 2000. The Company intends to implement the provisions of the Statement
beginning with the first quarter of 2001. SFAS 133 requires all derivatives to
be recognized in the balance sheet as either assets or liabilities and measured
at fair value. In addition, all hedging relationships must be designated,
reassessed and documented pursuant to the provisions of SFAS 133. The Company
has not yet determined the impact that the adoption of SFAS 133 will have on its
earnings, statement of financial position, or cash flows.
NOTE 2. MERGER WITH SNYDER OIL CORPORATION
Effective May 5, 1999, Snyder, a Delaware corporation, merged with and into
Santa Fe, also a Delaware corporation, pursuant to an Agreement and Plan of
Merger dated January 13, 1999. In connection with the merger, Santa Fe amended
its Articles of Incorporation to change its name to "Santa Fe Snyder
Corporation". In the merger, each issued and outstanding share of common stock
of Snyder, par value $.01 per share ("Snyder Common Stock") was converted into
2.05 shares of common stock, par value $.01 per share, of Santa Fe Snyder
("Santa Fe Snyder Common Stock"). The exchange ratio was determined through
arm's length negotiations between the parties. Santa Fe Snyder issued
approximately 68.8 million shares of Santa Fe Snyder Common Stock.
The merger was accounted for using the purchase method of accounting. The
purchase price totalling approximately $674.2 million (subject to purchase price
adjustments) involved a combination of the issuance of approximately $412.1
million of Santa Fe Snyder common stock (68.8 million shares) to Snyder
shareholders, the value of certain liabilities incurred totalling $43.1 million
and the fair value of the net liabilities assumed of approximately $219.0
million. The total value allocated between the net assets of Snyder was
determined based on the fair value of the Santa Fe Snyder Common Stock offered
to the Snyder stockholders as increased to reflect the incremental cash expenses
incurred to effect the merger.
Other accrued merger costs of $19.4 million include those capitalizable
costs incurred to consummate the transaction, consisting primarily of severance
costs related to Snyder employees ($9.6 million), professional fees ($5.7
million) and the provision for certain lease obligations for duplicate or unused
facilities ($2.5 million). The allocation of the purchase price to specific
assets and liabilities is based on certain estimates of fair values and costs
which will be adjusted to actual amounts as determined. The allocation of the
purchase price resulted in approximately $639.0 million being allocated to
property, plant and
6
<PAGE>
SANTA FE SNYDER CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)
equipment and $35.2 million allocated to investments. The results of Snyder's
operations have been included in the consolidated financial statements effective
May 1, 1999.
In connection with the merger, the Company evaluated the recovery of its
long-lived assets pursuant to Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of " ("SFAS 121"). The Company determined that the
estimated future undiscounted cash flows were below the carrying value of
certain oil and gas properties in the United States which were written up in
accordance with purchase accounting rules, resulting in an impairment of
approximately $196.4 million. The estimated fair value was based on anticipated
future cash flows discounted at a rate commensurate with the risk involved with
the properties and the Company's long-term outlook for future commodity prices.
The following unaudited pro forma condensed income statement information
has been prepared to give effect to the merger as if such transaction had
occurred at the beginning of the periods presented. The historical results of
operations have been adjusted to reflect the difference between Snyder's
historical depletion, depreciation and amortization and such expense calculated
based on the value allocated to the assets acquired in the Merger. The
information presented is not necessarily indicative of the results of future
operations of the merged companies.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------
1999 1998
--------- ---------
<S> <C> <C>
(IN MILLIONS)
Revenues............................. $ 220.4 $ 215.6
Loss before extraordinary item....... (179.4) (7.0)
Net loss available to common
shareholders......................... (183.6) (7.0)
Basic and diluted loss per share..... (0.95) (0.04)
</TABLE>
NOTE 3. CASH FLOWS
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
The Merger included certain non-cash investing and financing activities not
reflected in the Statement of Cash Flows as follows (in millions of dollars):
Common stock issued.................. $ 412.1
Deferred tax liability............... 163.4
Long-term debt assumed............... 219.0
Assets acquired, other than cash, net
of liabilities assumed............. 796.0
NOTE 4. FINANCING AND DEBT
In connection with the merger, the Company assumed $175.0 million of
Snyder's 8.75% Senior Subordinated Notes (the "Subordinated Notes") due June
15, 2007. Concurrently with the closing of the merger on May 5, 1999, the
Company entered into a new $500 million credit facility (the "Credit
Facility"). The Credit Facility consists of a $350 million five-year tranche
and a renewable $150 million 364 day tranche. The Credit Facility bears
interest, at the Company's option, at LIBOR or prime rates plus applicable
margins dependent upon the Company's credit rating and ratio of total debt to
earnings before interest, taxes, depreciation, depletion, amortization,
exploration charges and non-cash impairments ("EBITDAX"). Borrowings under the
Credit Facility are unsecured but are subject to compliance with
7
<PAGE>
SANTA FE SNYDER CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)
certain covenants including limitations on the incurrence of additional debt,
payment of dividends and other restricted payments and limitations on liens.
Financing fees of approximately $2.1 million were incurred related to the Credit
Facility.
In June 1999, the Company issued $125 million of 8.05% Senior Notes due
2004 (the "Notes"). The Notes were issued for 98.758% of face value and the
Company received total proceeds of $121.6 million after deducting related costs
and expenses of $1.9 million. The Notes, which mature June 15, 2004, are
redeemable, upon not less than thirty nor more than sixty days' notice, as a
whole or in part, at the option of the Company at a redemption price equal to
the sum of (i) 100% of the principal amount thereof, (ii) the applicable
make-whole premium as determined by an independent investment banker and (iii)
accrued and unpaid interest. The Notes are general unsecured obligations of the
Company. In connection with the Notes offering, the Company executed two forward
treasury lock agreements (the "Treasury Locks") to mitigate interest rate risk
during the issuance of the Notes. Upon the issuance of the Notes, the Treasury
Locks were terminated resulting in proceeds to the Company totalling $3.1
million which amount has been deferred and will be recognized as a reduction of
interest expense over the life of the Notes.
The net proceeds of the notes offering were used to retire the existing
$100 million 11% Senior Subordinated Debentures and to pay $5.5 million in
accrued interest and prepayment penalties upon retirement of such debt and the
remaining $16.1 million was used for a partial repayment on credit facility
borrowings.
In connection with these financing activities, the Company recorded an
extraordinary loss of $4.2 million, net of taxes. The extraordinary loss
represents the write-off of certain debt issue costs of the Senior Subordinated
Debentures and Credit Facility and prepayment penalties pertaining to the
retirement of the Senior Subordinated Debentures, net of related tax benefits.
8
<PAGE>
SANTA FE SNYDER CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)
NOTE 5. EARNINGS PER SHARE
The following table sets forth the components of the Company's basic and
diluted earnings per share calculations:
<TABLE>
<CAPTION>
EARNINGS (LOSS) WEIGHTED
ATTRIBUTABLE AVERAGE OF
TO COMMON COMMON SHARES PER SHARE
SHARES OUTSTANDING AMOUNT
---------------- -------------- ----------
<S> <C> <C> <C>
Three months ended June 30, 1999
Basic........................... $ (143.8) 145.3
Effect of dilutive stock
options......................... -- 1.8
---------------- --------------
Basic and diluted before
extraordinary item.............. $ (143.8) 147.1 $(0.99)
Basic and
diluted -- extraordinary item... $ (4.2) 147.1 $(0.03)
---------------- -------------- ----------
Basic and diluted after
extraordinary item.............. $ (148.0) 147.1 $(1.02)
================ ============== ==========
Three months ended June 30, 1998
Basic........................... $ 0.4 102.9
Effect of dilutive stock
options......................... -- 2.3
Effect of dilutive performance
awards.......................... -- 0.4
---------------- --------------
Basic and diluted............... $ 0.4 105.6 $--
================ ============== ==========
Six months ended June 30, 1999
Basic........................... $ (155.9) 123.9
Effect of dilutive stock
options......................... -- 1.1
Effect of dilutive performance
awards.......................... -- 0.3
---------------- --------------
Basic and diluted before
extraordinary item.............. $ (155.9) 125.3 $(1.26)
Basic and
diluted -- extraordinary item... $ (4.2) 125.3 $(0.03)
---------------- -------------- ----------
Basic and diluted after
extraordinary item.............. $ (160.1) 125.3 $(1.29)
================ ============== ==========
Six months ended June 30, 1998
Basic........................... $ 0.1 102.8
Effect of dilutive stock
options......................... -- 2.4
Effect of dilutive performance
awards.......................... -- 0.4
---------------- --------------
Basic and diluted............... $ 0.1 105.6 $--
================ ============== ==========
</TABLE>
The Company had 2.4 million stock options outstanding at June 30, 1998,
which were not included in the computation of diluted earnings per share because
the exercise price of these options was greater than the average market price of
the common shares. The Company reported a loss for the three and six months
ended June 30, 1999; therefore the potential effects of dilutive stock options
and performance awards were not included in the computation of diluted earnings
per share.
9
<PAGE>
SANTA FE SNYDER CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)
NOTE 6. INVESTMENTS
The Company holds marketable securities of two foreign energy companies,
listed on the London Stock Exchange, accounted for using the cost method. The
Company follows Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" ("SFAS
115"), which requires that such investments be adjusted to their fair values
with a corresponding increase or decrease to stockholders' equity. In accordance
with SFAS 115, investments were reduced by $6.0 million and deferred taxes were
increased by $2.1 million in the second quarter to reflect the change in fair
value from May 5, 1999 to June 30, 1999. The following table sets forth the fair
value and cost basis (in millions):
<TABLE>
<CAPTION>
JUNE 30, 1999
-----------------------
FAIR COST
VALUE BASIS
---------- ---------
<S> <C> <C>
Cairn Energy plc (11.7 million
shares).............................. $ 24.0 $27.6
SOCO International plc (7.8 million
shares).............................. 5.2 7.6
---------- ---------
Total...................... $ 29.2 $35.2
========== =========
</TABLE>
NOTE 7. SEGMENT INFORMATION
The principal business of the Company consists of the exploration,
development and acquisition of oil and gas properties and the production and
sale of crude oil and liquids and natural gas. The Company has determined that
its reportable segments are those that are based on the Company's method of
internal reporting, which disaggregates its business by geographic area. The
Company's reportable segments are the United States, Argentina, Indonesia, and
Other International. Other International represents various exploration and
development projects in China, Gabon, Brazil and other international arenas. The
prior quarter's segment information has been restated to present the Company's
four reportable segments.
The accounting policies of the segments are the same as those described in
the "Summary of Significant Accounting Policies." The Company evaluates the
performance of its segments and allocates resources based principally on
operating income or loss.
The table below presents information about the reported segments for the
three and six months ended June 30, 1999 and 1998. Other reconciling items
include other corporate income and expenses, hedging activities and overhead
costs not allocated to specific geographic areas. Asset information by
reportable segment is not presented because such information is not a factor
used by management to evaluate the performance of the segments.
<TABLE>
<CAPTION>
DEPLETION,
DEPRECIATION,
AMORTIZATION (LOSS) GAIN EARNINGS (LOSS)
TOTAL AND ON SALE OF OPERATING BEFORE
REVENUES IMPAIRMENT ASSETS INCOME (LOSS) INCOME TAXES
-------- -------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
THREE MONTHS ENDED
JUNE 30, 1999:
United States........................ $ 78.5 $228.9 $ 0.1 $(177.5) $(177.5)
Argentina............................ 9.8 4.4 -- 1.4 1.4
Indonesia............................ 22.3 4.2 -- 9.9 9.9
Other International.................. 3.5 1.7 -- (3.2) (3.2)
Other reconciling items.............. (1.7) 1.3 -- (29.6) (38.8)
-------- -------------- ----------- ------------- ---------------
Total Consolidated.............. $112.4 $240.5 $ 0.1 $(199.0) $(208.2)
======== ============== =========== ============= ===============
</TABLE>
10
<PAGE>
SANTA FE SNYDER CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)
<TABLE>
<CAPTION>
DEPLETION,
DEPRECIATION,
AMORTIZATION (LOSS) GAIN EARNINGS (LOSS)
THREE MONTHS ENDED TOTAL AND ON SALE OF OPERATING BEFORE
JUNE 30, 1998: REVENUES IMPAIRMENT ASSETS INCOME (LOSS) INCOME TAXES
-------- -------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
United States........................ $ 51.4 $ 22.7 $(1.2) $ 5.4 $ 5.4
Argentina............................ 8.8 3.4 -- 1.5 1.5
Indonesia............................ 14.9 5.3 -- 3.4 3.4
Other International.................. 2.0 0.7 -- (2.9) (2.9)
Other reconciling items.............. 0.7 1.3 -- (6.6) (9.1)
-------- -------------- ----------- ------------- ---------------
Total Consolidated.............. $ 77.8 $ 33.4 $(1.2) $ 0.8 $ (1.7)
======== ============== =========== ============= ===============
SIX MONTHS ENDED
JUNE 30, 1999:
United States........................ $119.5 $249.3 $(0.2) $(177.0) $(177.0)
Argentina............................ 17.2 8.6 -- 0.5 0.5
Indonesia............................ 39.1 8.5 -- 13.2 13.2
Other International.................. 6.6 3.2 -- (9.4) (9.4)
Other reconciling items.............. (1.8) 2.8 -- (38.5) (52.8)
-------- -------------- ----------- ------------- ---------------
Total Consolidated.............. $180.6 $272.4 $(0.2) $(211.2) $(225.5)
======== ============== =========== ============= ===============
SIX MONTHS ENDED
JUNE 30, 1998:
United States........................ $102.4 $ 43.4 $(1.2) $ 14.7 $ 14.7
Argentina............................ 17.9 6.6 -- 2.9 2.9
Indonesia............................ 22.3 7.7 -- 3.2 3.2
Other International.................. 3.2 1.3 -- (12.2) (12.2)
Other reconciling items.............. 0.8 2.5 -- (13.1) (15.5)
-------- -------------- ----------- ------------- ---------------
Total Consolidated.............. $146.6 $ 61.5 $(1.2) $ (4.5) $ (6.9)
======== ============== =========== ============= ===============
</TABLE>
NOTE 8. COMMITMENTS AND CONTINGENCIES
OIL AND GAS HEDGING. From time to time the Company hedges a portion of its
oil and gas sales to provide a certain minimum level of cash flow from its sales
of oil and gas. While the hedges are generally intended to reduce the Company's
exposure to declines in market price, the Company's gain from increases in
market price may be limited. The Company uses various financial instruments
whereby monthly settlements are based on differences between the prices
specified in the instruments and the settlement prices of certain futures
contracts quoted on the New York Mercantile Exchange ("NYMEX") or certain
other indices. Generally, in instances where the applicable settlement price is
less than the price specified in the contract, the Company receives a settlement
based on the difference; in instances where the applicable settlement price is
higher than the specified price, the Company pays an amount based on the
difference. The instruments utilized by the Company differ from futures
contracts in that there is no contractual obligation which requires or allows
for the future delivery of a product. Gains or losses on hedging activities are
recognized in oil and gas revenues in the period in which the hedged production
is sold.
Crude oil sales hedges resulted in a decrease in revenues of $0.2 million
for the three and six months ended June 30, 1999, compared with an increase of
$0.9 million and $1.1 million for the three and six months ended June 30, 1998.
At June 30, 1999, the Company had open crude oil sales hedges on 6,000
barrels per day through July 1999. The instruments used have an average floor of
$16.50 per barrel and an average ceiling of $18.81 per barrel. The Company
recognized a $0.2 million loss with respect to such hedges in July, 1999.
11
<PAGE>
SANTA FE SNYDER CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)
The Company has a long-term gas swap agreement that was entered into by
Snyder in 1994 to lock in the price differential between the Rocky Mountain and
Henry Hub prices on a portion of its Rocky Mountain gas production. The contract
covers 20,000 MMBtu's per day through 2004. In addition to the long-term gas
swap, the Company had open natural gas sales hedges at June 30, 1999 on an
average of approximately 50,000 MMbtu per day of its natural gas production for
the period July through September 1999 at an approximate price of $2.12 per
MMBtu. The long-term gas swap agreement and natural gas sales hedges resulted in
a decrease in revenues of $1.1 million in the second quarter of 1999. The
Company had no natural gas hedges in 1998. The Company recognized a $0.2 million
loss with respect to the swap agreement and hedges in July, 1999.
ENVIRONMENTAL MATTERS. The Company's oil and gas operations are subject to
stringent environmental regulation by government authorities. Such regulation
has increased the costs of planning, designing, drilling, installing, operating
and abandoning oil and gas wells and associated facilities. The Company has
expended significant financial and managerial resources to comply with such
regulations. Although the Company believes its operations and facilities are in
general compliance with applicable environmental regulations, the risk of
substantial costs and liabilities are inherent in oil and gas operations. It is
possible that other developments, such as increasingly strict environmental
laws, regulations and enforcement policies or claims for damages to property,
employees, other persons and the environment resulting from the Company's
operations, could result in significant costs and liabilities in the future. As
it has in the past, the Company intends to fund the future costs of
environmental compliance from operating cash flows.
There are other claims and actions pending against the Company. In the
opinion of management, the amounts, if any, which may be awarded in connection
with any of these claims and actions could be significant to the results of
operations of any period but would not be material to the Company's consolidated
financial position.
NOTE 9. SUBSEQUENT EVENTS
On August 10, 1999, the Company acquired working interests in four Shell
Deepwater Development, Inc. ("Shell") Gulf of Mexico discoveries, as well as
unexplored acreage on some adjacent blocks for $210 million. Under terms of the
purchase, Santa Fe Snyder acquired portions of Shell's working interests in the
Macaroni Field located in the Auger Basin in Garden Banks and the Angus complex
located near the Bullwinkle, Troika and Brutus fields in Green Canyon. Shell
will retain a majority working interest and continue as operator. Both the
Macaroni and Angus areas are currently in development, and production is
expected to begin from both later in 1999. Santa Fe Snyder's interests will
range from 15 percent to 49 percent.
In August 1999, the Company completed a $114.6 million equity offering of
Santa Fe Snyder common stock (12.65 million shares) receiving $108.3 million
after deducting the underwriting discount. In addition, the Company entered into
a forward sale of crude oil and received a prepayment of approximately $100
million. The net proceeds of these transactions were utilized to fund the Shell
acquisition.
On July 22, 1999 the Company acquired an additional interest in the Anton
Irish Unit in West Texas from Phillips Petroleum for $11.0 million. The
transaction increases the Company's interest to 29.5 percent in the unit and
adds approximately 5 million barrels of proved reserves.
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MERGER
Santa Fe Snyder is an independent oil and gas company engaged in the
production, development, acquisition and exploration of oil and gas properties
in the United States, Southeast Asia, South America and West Africa. Santa Fe
Snyder was formed by the merger on May 5, 1999 of Snyder Oil Corporation into
Santa Fe Energy Resources, Inc. The merger was accounted for as a purchase
business combination, and the results of operations of the properties acquired
(the "Snyder properties") are included in Santa Fe Snyder's results of
operations effective May 1, 1999. See Note 2 to the Consolidated Financial
Statements. The Snyder properties are located primarily in the Rocky Mountains,
Gulf of Mexico and northern Louisiana. The estimated proved reserves at year-end
1998 associated with these properties was 100.3 million barrels of oil
equivalent of which 83% was natural gas.
FINANCIAL PERFORMANCE
The Company reported net income of $2.8 million, or $0.02 per share, for
the three months ended June 30, 1999 before recognition of $150.8 million of
non-recurring charges, net of tax, related to the merger. The non-recurring
charges were property impairments, merger related costs and debt extinguishment
costs in the amount of $135.0, $11.6 and $4.2 million, respectively, net of tax.
Including these charges, the Company reported a net loss of $148.0 million, or
$1.02 per share, compared with earnings of $0.4 million, or break even earnings
per share, in the second quarter of 1998.
For the six months ended June 30, 1999, the Company reported a net loss of
$160.1 million or $1.29 per share, compared with net income of $0.1 million or
break even earnings per share for the comparable period of 1998, primarily due
to the non-recurring charges.
13
<PAGE>
RESULTS OF OPERATIONS
The following tables set forth certain financial and operating data for the
periods presented:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- --------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
REVENUES (IN MILLIONS)
Crude oil and liquids.............. $ 63.4 $ 45.7 $ 106.5 $ 85.5
Natural gas........................ 48.5 31.9 73.3 60.7
Other.............................. 0.5 0.2 0.8 0.4
--------- --------- --------- ---------
$ 112.4 $ 77.8 $ 180.6 $ 146.6
========= ========= ========= =========
CRUDE OIL AND LIQUIDS VOLUMES
(MBBLS/DAY)
Domestic........................... 23.8 21.5 22.7 21.5
Argentina.......................... 5.0 5.5 5.0 5.5
Indonesia.......................... 15.5 13.0 15.7 10.0
Gabon.............................. 2.7 1.9 2.7 1.4
--------- --------- --------- ---------
47.0 41.9 46.1 38.4
========= ========= ========= =========
AVERAGE CRUDE OIL AND LIQUIDS PRICE
($/BBL)
Unhedged
Domestic........................ $ 14.73 $ 11.70 $ 12.59 $ 12.46
Argentina....................... 14.90 11.03 12.52 11.74
Indonesia....................... 15.87 12.56 13.71 12.33
Gabon........................... 14.41 12.12 13.78 12.42
Total...................... 15.11 11.90 13.03 12.32
Hedged............................. 15.06 12.12 13.01 12.48
NATURAL GAS VOLUMES (MMCF/DAY)
Domestic........................... 255.1 156.8 205.3 154.1
Argentina.......................... 25.7 26.0 25.8 25.7
Indonesia.......................... 0.2 0.4 0.2 0.3
--------- --------- --------- ---------
281.0 183.2 231.3 180.1
========= ========= ========= =========
AVERAGE NATURAL GAS PRICE ($/MCF)
Unhedged
Domestic........................ $ 2.03 $ 2.10 $ 1.89 $ 2.07
Argentina....................... 1.27 1.34 1.24 1.29
Indonesia....................... 0.97 1.04 0.97 1.03
Total...................... 1.96 1.99 1.82 1.96
Hedged............................. 1.92 1.99 1.79 1.96
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- --------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Costs and Expenses per BOE
Production and operating (a)......... $ 3.62 $ 3.97 $ 3.87 $ 4.15
Exploration, including dry hole
costs................................ 1.09 1.11 1.34 1.58
Depletion, depreciation and
amortization......................... 5.17 5.06 4.96 4.96
General and administrative........... 0.89 0.70 0.85 0.73
Taxes other than income (b).......... 0.72 0.65 0.63 0.68
Interest expense, net (c)............ 1.07 0.47(d) 0.93 0.39(d)
--------- --------- --------- ---------
Total costs and expenses... $ 12.56 $ 11.96 $ 12.58 $ 12.49
========= ========= ========= =========
</TABLE>
- ------------
a) Excludes related production, severance and ad valorem taxes.
b) Includes related production, severance and ad valorem taxes.
c) Reflects interest expense less amounts capitalized and interest income.
d) Excludes effect of $0.7 million ($0.04 per BOE) for the three months ended
June 30, 1998 and $2.6 million ($0.05 per BOE) for the six months ended June
30, 1998, of interest income on an income tax refund.
GENERAL
As an independent oil and gas producer, the Company's results of operations
are dependent upon the difference between the prices received for oil and gas
and the costs of finding and producing such resources. Crude oil prices are
subject to significant changes primarily in response to fluctuations in the
domestic and world supply and demand. For the twelve months ended June 30, 1999
the actual average crude oil and liquids sales price received by the Company
ranged from a high of $15.06 per barrel in the second quarter of 1999 to a low
of $10.32 per barrel in the fourth quarter of 1998. Based on operating results
for the first six months of 1999, the Company estimates that on an annualized
basis a $1.00 per barrel increase or decrease in its average crude oil sales
price would result in a corresponding $11.6 million change in net income and a
$14.4 million change in cash flow from operating activities. The price of
domestic natural gas fluctuates due to weather conditions, the level of natural
gas in storage, the relative balance between supply and demand and other
economic factors. The actual average sales price received by the Company for the
twelve months ended June 30, 1999 for its domestic natural gas ranged from a
high of $1.92 per Mcf in the second quarter of 1999 to a low of $1.59 per Mcf in
the first quarter of 1999. Based on operating results for two months of combined
Santa Fe and Snyder operations since the merger, the Company estimates that on
an annualized basis a $0.10 per Mcf increase or decrease in its average natural
gas sales price would result in a corresponding $7.4 million change in net
income and a $11.0 million change in cash flow from operating activities. The
foregoing estimates do not give effect to change in any other factors, such as
the effect of the Company's hedging program, its debt levels and related
interest expense or the level of capital expenditures, that might result from a
change in crude oil and natural gas prices.
THREE MONTHS ENDED JUNE 30, 1999 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1998
OIL AND GAS REVENUES. Revenues from crude oil and natural gas operations
increased 44% to $111.9 million for the three months ended June 30, 1999 from
$77.6 million for the same period in 1998. The increase in revenue was due to
gas production from the Snyder properties, international oil production growth
and increased oil prices. The Company's crude oil and liquids production
increased 12% in the second quarter of 1999 to 47.0 MBbls per day from 41.9
MBbls per day for the same period in 1998. The increase in oil production was
driven by new wells at the Mudi field in Indonesia, the ramp up of production at
the Tchatamba field in Gabon and production from the Snyder properties. Natural
gas production of 281.0 MMcf per day in the second quarter of 1999 increased
97.8 MMcf per day from the same period in 1998 principally due to production
from the Snyder properties. The Company's realized
15
<PAGE>
crude oil price for the three months ended June 30, 1999 increased 24% to $15.06
per barrel from the average realized oil price of $12.12 per barrel for the same
period in 1998. Realized natural gas prices for the three months ended June 30,
1999 averaged $1.92 per Mcf, compared with an average of $1.99 per Mcf for the
same period in 1998.
COSTS AND EXPENSES. Production and operating expense and depletion,
depreciation and amortization increased $4.7 million and $10.7 million,
respectively, for the three months ended June 30, 1999 from the same period in
1998, primarily due to increased crude oil and natural gas production from the
Snyder properties. Exploration expense for the three months ended June 30, 1999
increased to $9.4 million from $7.3 million for the same period in 1998, due
primarily to costs associated with seismic programs in the Gulf of Mexico and
Brazil. General and administrative expense for the second quarter of 1999 was
$3.0 million higher compared to the same period in 1998 due to incremental labor
and other overhead costs associated with the merger. Taxes other than income
increased to $6.1 million in the second quarter of 1999 primarily due to
increased severance taxes resulting from increased production and higher
realized prices. Merger related expenses of $16.8 million in the second quarter
of 1999 included $1.9 million of severance and relocation costs related to Santa
Fe employees and $9.6 million of costs related to the acceleration of certain
compensation plans and other benefits. In the second quarter of 1999, the
Company recorded a pre-tax impairment charge of $196.4 million pursuant to the
provisions of SFAS 121. See Note 2 to the Consolidated Financial Statements.
Interest expense for the second quarter of 1999 increased by $5.4 million
compared to the same period in 1998, reflecting debt assumed as a result of the
merger with Snyder and the Company's increased borrowings. Income taxes for the
three months ended June 30, 1998 included a $1.7 million benefit due to the
resolution of prior year tax matters.
The Company recorded an extraordinary loss of $4.2 million, net of taxes in
the three months ended June 30, 1999. The extraordinary loss included the
write-off of certain debt issue costs of the 11% Senior Subordinated Debentures
and Credit Facility and prepayment penalties pertaining to the retirement of the
11% Senior Subordinated Debentures, net of related tax benefits.
SIX MONTHS ENDED JUNE 30, 1999 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1998
OIL AND GAS REVENUES. Revenues from crude oil and natural gas operations
increased to $179.8 million for the six months ended June 30, 1999 from $146.2
million for the same period in 1998, due to increased gas production from the
Snyder properties and international oil production growth. The Company's crude
oil and liquids production increased by approximately 20% in the first six
months of 1999 to 46.1 MBbls per day from 38.4 MBbls per day for the same period
in 1998, primarily due to increased production in Indonesia and Gabon combined
with production from the Snyder properties. Natural gas production increased in
the first six months of 1999 to 231.3 MMcf per day compared with 180.1 MMcf per
day for the same period in 1998 primarily due to production from the Snyder
properties and from new wells in the Gulf of Mexico. The Company's realized
crude oil prices for the six months ended June 30, 1999 averaged $13.01 per
barrel, compared with an average realized oil price of $12.48 per barrel, for
the same period in 1998. Realized natural gas prices for the six months ended
June 30, 1999 averaged $1.79 per Mcf, compared with an average of $1.96 per Mcf
for the same period in 1998.
COSTS AND EXPENSES. Production and operating expense and depletion,
depreciation and amortization expense increased $7.7 million and $14.5 million,
respectively, for the six months ended June 30, 1999 compared with the same
period in 1998, due to increased crude oil and natural gas production, as noted
above. General and administrative expense for the six months ended June 30, 1999
was $4.0 million higher compared to the same period in 1998 due to incremental
labor and other overhead costs associated with the merger. Taxes other than
income increased to $9.6 million in the second quarter of 1999 primarily due to
higher severance taxes resulting from increased production and prices.
Interest income for the six months ended June 30, 1998 included a $2.6
million benefit related to an income tax refund. Interest expense for the first
six months of 1999 increased by $8.4 million compared with the same period in
1998, reflecting an increase in borrowings between the comparative periods and
the
16
<PAGE>
assumption of debt as a result of the merger with Snyder. Income taxes for the
six months ended June 30, 1998 included a $2.4 million benefit related to the
previously discussed income tax refund and a $1.7 million benefit due to the
resolution of prior year tax matters.
LIQUIDITY AND CAPITAL RESOURCES
CAPITAL EXPENDITURES. The Company's primary needs for cash are for
exploration, development and acquisitions of oil and gas properties. The Company
spent $130.8 million for capital expenditures in the six months ended June 30,
1999, including $1.9 million for acquisitions, and expects to spend
approximately $350.0 million in the second half of 1999 which includes $210
million related to the acquisition of certain Gulf of Mexico deepwater
properties from Shell Deepwater Development, Inc. in the third quarter of 1999.
This acquisition was funded with proceeds from the issuance of common stock and
a forward sale of crude oil as described below. Because the actual amounts
expended in the future for capital expenditures will be influenced by numerous
factors, some of which are beyond the Company's control, no assurances can be
given as to the amount that will actually be expended during the year.
CAPITAL RESOURCES. The Company's principal capital resources for the six
months ended June 30, 1999 consisted of cash flow from operating activities of
$50.7 million, $67.5 million in borrowings under the Credit Facility and
approximately $20.0 million of proceeds from the issuance of the Senior Notes in
excess of the amount used to retire the 11% Senior Subordinated Debentures. At
June 30, 1999, the Company had $640.9 million in borrowings outstanding, which
were classified as long-term debt on the balance sheet since the Company has the
ability and intends to refinance such amount on a long-term basis. The Company
had two letters of credit outstanding under the Credit Facility at June 30, 1999
for $21.4 million and one letter of credit outside the Credit Facility for $1.8
million.
Concurrently with the closing of the merger on May 5, 1999, the Company
entered into a new $500 million credit facility (the "Credit Facility"). The
Credit Facility consists of a $350 million five-year tranche and a renewable
$150 million 364 day tranche. The Credit Facility bears interest, at the
Company's option, at LIBOR or prime rates plus applicable margins dependent upon
the Company's credit rating and ratio of total debt to earnings before interest,
taxes, depreciation, depletion, amortization, exploration charges and non-cash
impairments ("EBITDAX"). Borrowings under the Credit Facility are unsecured but
are subject to compliance with certain covenants including limitations on the
incurrence of additional debt, payment of dividends and other restricted
payments and limitations on liens. Financing fees of approximately $2.1 million
were incurred related to the Credit Facility.
In June 1999, the Company issued $125 million of 8.05% Senior Notes due
2004 (the "Notes") for 98.758% of face value and received $121.6 million after
deducting related costs and expenses of $1.9 million. In connection with the
Notes offering, the Company executed two forward treasury lock agreements (the
"Treasury Locks") to mitigate interest rate risk during the issuance of the
Notes. Upon the issuance of the Notes, the Treasury Locks were terminated
resulting in proceeds to the Company of $3.1 million. The net proceeds of the
Notes offering were used to retire the existing $100 million 11% Senior
Subordinated Debentures and to pay $5.5 million in accrued interest and
prepayment penalties upon retirement of such debt.
In August 1999, the Company acquired working interests in four Shell
Deepwater Development, Inc. Gulf of Mexico discoveries, as well as unexplored
acreage on some adjacent blocks for $210 million. The acquisition was funded
with proceeds from the completion of a $114.6 million equity offering of Santa
Fe Snyder common stock ($108.3 million after deducting underwriting discounts)
and the receipt of a prepayment of approximately $100 million related to the
forward sale of crude oil.
The Credit Facility and the Indenture for the Subordinated Notes include
covenants that restrict the Company's ability to take certain actions, including
the ability to incur additional indebtedness and to pay dividends or repurchase
capital stock. Under the most restrictive of these covenants, at June 30, 1999
the Company could incur approximately $141.0 million of additional indebtedness.
In addition to the Credit Facility, the Company also has short-term
uncommitted lines of credit totalling $36.7 million which are used to meet
short-term cash needs. Interest rates on borrowings under these lines of credit
are typically lower than rates paid under the Credit Facility when compared to
the prime rate, which would be required for short-term (less than 30 days)
borrowings. At June 30, 1999, the
17
<PAGE>
Company had $12.4 million in borrowings outstanding under these facilities,
which were classified as long-term debt on the balance sheet since the Company
has the ability and intends to refinance such amount on a long-term basis.
The Company has historically funded its operations and exploration and
development capital spending programs with cash flow from operations and
borrowings under bank credit facilities and funded acquisitions with cash flow
from operations, bank debt, public debt, equity offerings and forward sales of
production. The Company believes that cash flow from operations and the
borrowing availability under the Credit Facility and from other capital markets
will be sufficient to meet its anticipated capital requirements for 1999.
YEAR 2000
Many computer systems have been built using software that processes
transactions using two digits to represent the year. This type of software will
generally require modifications to function properly with dates after December
31, 1999 (or, to become "Y2K Compliant"). The same issue may apply to
microprocessors embedded in machinery and equipment, such as gas compressors and
pipeline meters. The impact of failing to identify those computer systems
(operated by the Company or its business partners) that are not Y2K compliant
and correct the problem could be significant to the Company's ability to operate
and report results, as well as potentially expose the Company to third-party
liability.
The Company has formed a Year 2000 Task Force with representation from
major business units to inventory and assess the risk associated with hardware,
software, telecommunications systems, office equipment, embedded chip controls
and systems, process control systems, facility control systems and dependencies
on third party trading partners. The project phases, expected completion dates
and percentage complete are as follows:
<TABLE>
<CAPTION>
PHASE COMPLETION DATE PERCENT COMPLETE
- ---------------------------------------- ----------------- ----------------
<S> <C> <C>
Organization............................ complete 100%
Assessment.............................. complete 100%
Implementation/Replacement.............. October 31, 1999 85%
Contingency Planning.................... August 31, 1999 95%
</TABLE>
The Company has contacted all significant customers, transporters, partners
and suppliers and is in the process of evaluating responses received to
determine if further action is necessary.
The Year 2000 Task Force is on schedule and the Company believes the total
related costs will be approximately $2.0 million, funded by cash from operations
or borrowings on the Credit Facility, when completed in 1999. Through June 30,
1999 the Company has spent $0.8 million for identifying, remediating and testing
systems for Year 2000 related problems. The project costs and timetable for Y2K
compliance are based on management's best estimates. In developing these
estimates, assumptions were made regarding future events including, among other
things, the availability of certain resources and the continued cooperation of
the Company's customers and suppliers. Actual costs and timing may differ from
management's estimate due to unexpected difficulties in locating and correcting
relevant computer code and other factors.
To date, the Company is not aware of any significant Year 2000 issues that
would cause problems in the area of safety, environmental or business
interruption. The Company recognizes that, notwithstanding the efforts described
above, the Company could experience disruptions to its operations or
administrative functions, including from non-compliant systems utilized by
governmental and business entities.
The Company has reviewed and evaluated its most reasonably likely worst
case scenario with regard to the Year 2000. Management believes that it is
taking every reasonable precaution to detect, remediate and test all critical
computer systems and equipment. Management believes that the most reasonably
likely worst case scenario would involve failure of production equipment in the
field, which would result in disruption of those operations affected until the
problem is solved and possibly expose the Company to contractual penalties and
other liabilities.
18
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
MARKET RISKS
The Company is exposed to market risk, which includes adverse changes in
commodity prices, interest rates and foreign currency as discussed below.
COMMODITY PRICE RISK. The Company produces and sells crude oil, liquids
and natural gas. As a result, the Company's financial results can be
significantly affected as these commodity prices fluctuate widely in response to
changing market factors. The Company makes a limited use of hedging agreements
at times to reduce its exposure to declines in market prices. The Company uses
the hedge method of accounting for these instruments and, as a result, gains and
losses on commodity futures contracts are generally offset by similar changes in
the realized prices of the commodities. At June 30, 1999, the Company had open
crude oil and natural gas sales hedges. See Note 8 to the Consolidated Financial
Statements for further discussion on hedging activities.
INTEREST RATE RISK. The Company's exposure to changes in interest rates
primarily results from its debt with both fixed and floating interest rates.
Currently, the Company has no outstanding interest rate swaps.
EQUITY PRICE RISK AND FOREIGN CURRENCY RISK. The Company has investments
in two international exploration and production companies, Cairn Energy plc
("Cairn") and SOCO International plc ("SOCI plc"), which are both listed on
the London Stock Exchange. The value of these investments is subject to the risk
of fluctuations in their stock prices as well as fluctuations in the British
pound, the currency in which they trade. The Company owns 11.7 million shares of
Cairn and 7.8 million shares of SOCI plc and the book and fair market value of
the investments was $29.2 million at June 30, 1999.
FORWARD-LOOKING STATEMENTS
Company has included certain statements (other than statements of
historical fact) that constitute forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. When used herein, the words "budget," "budgeted,"
"anticipates," "expects," "believes," "seeks," "goals," "intends" or
"projects" and similar expressions are intended to identify forward-looking
statements. It is important to note that the Company's actual results could
differ materially from those projected by such forward-looking statements.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable and such forward-looking statements
are based upon the best data available at the time this report is filed with the
Securities and Exchange Commission, no assurance can be given that such
expectations will prove correct. Factors that could cause the Company's results
to differ materially from the results discussed in such forward-looking
statements include, but are not limited to, the following: production variances
from expectations, volatility of oil and gas prices, hedging results, the need
to develop and replace its reserves, the substantial capital expenditures
required to fund its operations, exploration and development risks,
environmental risks, uncertainties about estimates of reserves, competition,
government regulation and political and litigation risks, uncertainties
associated with the Year 2000 issue, and the ability of the Company to implement
its business strategy. All such forward-looking statements in this document are
expressly qualified in their entirety by the cautionary statements in this
paragraph.
19
<PAGE>
PART II. OTHER INFORMATION
ITEMS 1, 2, 3 & 5 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At a special meeting of Stockholders held on May 5, 1999, the following
proposals were approved:
<TABLE>
<CAPTION>
AFFIRMATIVE NEGATIVE VOTES
VOTES VOTES WITHHELD
------------ --------- ---------
<S> <C> <C> <C>
1. Approve and adopt the Agreement
and Plan of Merger, dated as of
January 13, 1999, between Snyder
Oil Corporation and the Company,
with the Company surviving the
merger, including the issuance of
shares of the Company's common
stock in the merger.............. 80,011,500 553,884 175,045
2. Approve, contingent upon the
passing of Proposal 1, the change
in the Company's name to "Santa
Fe Snyder Corporation".......... 79,646,065 870,106 224,258
3. Approve, contingent upon the
passing of Proposal 1, the
increase in the authorized shares
of capital stock to 350,000,000
shares........................... 77,546,849 2,905,882 287,698
4. Subject to the completion of the
merger, election to the Board of
Directors of the Company the
following individuals:
James E. McCormick................ 79,735,375 -- 1,005,054
(Term expires at annual meeting
of stockholders in 1999)
Harold R. Logan, Jr............... 79,744,935 -- 995,494
(Term expires at annual meeting
of stockholders in 2000)
Edward T. Story................... 79,722,944 -- 1,017,485
(Term expires at annual meeting
of stockholders in 2000)
John A. Hill...................... 79,745,446 -- 994,983
(Term expires at annual meeting
of stockholders in 2001)
John C. Snyder.................... 79,732,901 -- 1,007,528
(Term expires at annual meeting
of stockholders in 2001)
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------------------------------------------------
<S> <C>
*3(a)* -- Bylaws, as amended May 5, 1999.
*3(b) -- Bylaws, as amended June 30, 1999.
*10(a) -- Credit Agreement dated as of May 5,
1999 among Santa Fe Snyder Corp., the
banks signatory thereto, and Chase
Bank of Texas, N.A. as Administrative
Agent; Bank of America National Trust
and Savings Association as
Syndication Agent; Wells Fargo Bank
(Texas), N.A. as Documentation Agent;
Bank One, Texas, N.A. as Managing
Agent; ABN AMRO Bank N.V., Credit
Lyonnais New York Branch and Salomon
Brothers Holding Company Inc. as
Co-Agents.
*10(b) -- 364-Day Credit Agreement dated as of
May 5, 1999 among Santa Fe Snyder
Corp., the banks signatory thereto,
and Chase Bank of Texas, N.A. as
Administrative Agent; Bank of America
National Trust and Savings
Association as Syndication Agent;
Wells Fargo Bank (Texas), N.A. as
Documentation Agent; Bank One, Texas,
N.A. as Managing Agent; ABN AMRO Bank
N.V., Credit Lyonnais New York Branch
and Salomon Brothers Holding Company
Inc. as Co-Agents.
*27 -- Financial Data Schedule.
</TABLE>
- ------------
* Filed herewith
20
<PAGE>
(b) Reports on Form 8-K
On May 6, 1999, the Company filed a Current Report on Form 8-K with respect
to the merger. The item reported in such Current Report was Item 5 (Other
Events). On May 25, 1999, the Company filed an amendment to Form 8-K on
Form 8-K/A with respect to the merger. The items reported in such Current
Report were Item 2 (Acquisition or Disposition of Assets) and Item 7
(Financial Statements and Exhibits). On June 15, 1999, the Company filed a
Current Report with respect to the issuance of $125 million 8.05% Senior
Notes. The items reported in Current Report were Item 5 (Other Events) and
Item 7 (Financial Statements and Exhibits). On July 8, 1999, the Company
filed a Current Report with respect to Snyder Oil Corporation's first
quarter financial statements. The item reported in such Current Report was
Item 7 (Financial Statements and Exhibits). On July 23, 1999, the Company
filed a Current Report with respect to the announcement of the Shell
acquisition. The item reported in such Current Report was Item 7 (Financial
Statements and Exhibits). On August 9, 1999, the Company filed a Current
Report on Form 8-K with respect to the issuance of common stock. The item
reported in such Current Report was Item 5 (Other Events).
21
<PAGE>
SIGNATURE
Pursuant to the requirements Section 13 or 15 (d) of the Securities
Exchange Act 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 16th day of
August, 1999.
SANTA FE SNYDER CORPORATION
(REGISTRANT)
/s/ MARK A. JACKSON
MARK A. JACKSON
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL OFFICER AND
DULY AUTHORIZED OFFICER)
Date: August 16, 1998
22
EXHIBIT 3(A)
As amended by the Board of Directors on
April 20,1990, February 26, 1993, February 23, September 1, 1998 and May 5, 1999
SANTA FE SNYDER CORPORATION
BYLAWS
ARTICLE I OFFICES SECTION 1.1 PRINCIPAL OFFICE. The principal office
of the Corporation shall be in the City of Houston, Texas.
SECTION 1.2 REGISTERED OFFICE. The registered office and registered
agent of the Corporation required to be maintained in the State of Delaware by
the General Corporation Law of the State of Delaware shall be as designated from
time to time by the appropriate filing by the Corporation in the office of the
Secretary of State of the State of Delaware.
SECTION 1.3 OTHER OFFICES. The Corporation may also have offices at
such other places, both within and without the State of Delaware, as the Board
of Directors may from time to time determine or as the business of the
Corporation may require.
ARTICLE II
STOCKHOLDERS' MEETINGS
SECTION 2.1 ANNUAL MEETING. The annual meeting of the holders of
shares of each class or series of stock as are entitled to notice thereof and to
vote thereat pursuant to applicable law and the Certificate of Incorporation for
the purpose of electing directors and transacting such other proper business as
may come before it shall be held in each year, at such time, on such day and at
such place, within or without the State of Delaware, as may be designated by the
Board of Directors.
SECTION 2.2 SPECIAL MEETINGS. In addition to such special meetings
as are
<PAGE>
provided by law or the Certificate of Incorporation, special meetings of
the holders of any class or series or of all classes or series of the
Corporation's stock for any purpose or purposes, may be called at any time by
the Board of Directors and may he held on such day, at such time and at such
place, within or without the State of Delaware, as shall be designated by the
Board of Directors. Stockholders of the Corporation may not call a special
meeting.
SECTION 2.3 NOTICE OF MEETINGS AND ADJOURNED MEETINGS. Except as
otherwise provided by law, written notice of any meeting of Stockholders shall
be given either by personal delivery or by mail to each Stockholder of record
entitled to vote thereat. Notice of each meeting shall be in such form as is
approved by the Board of Directors and shall state the date, place and hour of
the meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Unless otherwise provided by law, such written
notice shall be given not less than 10 nor more than 60 days before the date of
the meeting. Except when a Stockholder attends a meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction of any
business on the ground that the meeting is not lawfully called or convened,
presence in person or by proxy of a Stockholder shall constitute a waiver of
notice of such meeting. Further, a written waiver of any notice required by law
or by these Bylaws, signed by the person entitled to notice, whether before or
after the time stated therein, shall be deemed equivalent to notice. Except as
otherwise provided by law, the business that may be transacted at any such
meeting shall be limited to and consist of the purpose or purposes stated in
such notice. If a meeting is adjourned to another time or place, notice need not
be given of the adjourned meeting if the time and place thereof are announced at
the meeting at which the adjournment is taken; provided, however, that if the
adjournment is for more than 30 days, or if after the adjournment a new record
date is fixed for the adjourned meeting, a notice of the adjourned meeting shall
be given to each Stockholder of record entitled to vote at the meeting.
SECTION 2.4 VOTING LISTS. The officer or agent having charge of the
stock transfer books for shares of the Corporation shall make, at least 10 days
before each meeting of the Stockholders, a complete list of Stockholders
entitled to vote at such meeting or any adjournment thereof, arranged in
alphabetical order, with the address of each and the number of shares held by
each, which list, for a period of 10 days prior to such meeting, shall be kept
on file at a place within the city where the meeting is to he held, which place
shall be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to he held, and such list shall be
2
<PAGE>
subject to inspection by any Stockholders at any time during usual business
hours. Such list shall also be produced and kept open at the time and place of
the meeting and shall be subject to the inspection of any Stockholder for the
duration of the meeting. The original stock transfer books shall he prima facie
evidence as to who are the Stockholders entitled to examine such list or
transfer books or to vote at any meeting of Stockholders.
SECTION 2.5 QUORUM. The holders of at least a majority of the shares
issued and outstanding and entitled to vote thereat, present at a meeting, shall
constitute a quorum at all meetings of stockholders for the transaction of
business, except as otherwise provided by law or by the Certificate of
Incorporation. If, however, such quorum shall not be present at any meeting of
the stockholders, the Chairman or the stockholders entitled to vote thereat and
present at the meeting, shall have the power to adjourn the meeting from time to
time, without notice other than announcement at the meeting unless the
adjournment is for more than 30 days or if after the adjournment a new record
date is fixed for the adjourned meeting, until a quorum shall be present. A
holder of a share shall be treated as being present at a meeting if the holder
of such share is (i) present in person at the meeting or (ii) represented at the
meeting by a valid proxy, whether the instrument granting such proxy is marked
as casting a vote or abstaining, is left blank or does not empower such proxy to
vote with respect to some or all matters to he voted upon at the meeting.
SECTION 2.6 ORGANIZATION. Meetings of the Stockholders shall be
presided over by the Chairman of the Board of Directors, if one shall be
elected, or in his absence, by the Chief Executive Officer, the President or by
any Vice President, or in the absence of any of such officers, by a chairman to
be chosen by a majority of the Stockholders entitled to vote at the meeting who
are present in person or by proxy. The Secretary, or, in his absence, any
Assistant Secretary or any person appointed by the individual presiding over the
meeting, shall act as secretary at meetings of the Stockholders.
SECTION 2.7 VOTING. Each Stockholder of record, as determined
pursuant to Section 2.8, who is entitled to vote in accordance with the terms of
the Certificate of Incorporation and in accordance with the provisions of these
Bylaws, shall he entitled to one vote, in person or by proxy, for each share of
stock registered in his name on the books of the Corporation. Every Stockholder
entitled to vote at any Stockholders' meeting may authorize another person or
persons to act for him by proxy duly appointed by instrument in writing
3
<PAGE>
subscribed by such Stockholder and executed not more than three years prior to
the meeting, unless the proxy provides for a longer period. A duly executed
proxy shall be irrevocable if it states that it is irrevocable and if, and only
so long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A Stockholder's attendance at any meeting, when such
Stockholder who may have theretofore given a proxy, shall not have the effect of
revoking such proxy unless such Stockholder shall in writing so notify the
Secretary of the meeting prior to the voting of the proxy. Unless otherwise
provided by law, no vote on the election of directors or any question brought
before the meeting need be by ballot unless the chairman of the meeting shall
determine that it shall be by ballot or the holders of a majority of the shares
of stock present in person or by proxy and entitled to participate in such vote
shall so demand. In a vote by ballot, each ballot shall state the number of
shares voted and the name of the Stockholder or proxy voting. Action on a matter
(other than the election of directors) shall be approved if the votes cast in
favor of the matter exceed the vote's cast opposing the matter. Directors shall
be elected by a plurality of the votes cast by the shares entitled to vote in
the election at a meeting at which a quorum is present. In the election of
directors, votes may not be cumulated. In determining the number of votes cast,
shares abstaining from voting or not voted on a matter (including elections)
will not he treated as votes cast. The provisions of this paragraph will govern
with respect to all votes of stockholders except as otherwise provided for in
these Bylaws or in the Certificate of Incorporation or by some specific
statutory provision superseding the provisions contained in these Bylaws or the
Certificate of Incorporation.
SECTION 2.8 STOCKHOLDERS ENTITLED TO VOTE. The Board of Directors
may fix a date not more than 60 days nor less than 10 days prior to the date of
any meeting of Stockholders as a record date for the determination of the
Stockholders entitled to notice of and to vote at such meeting and any
adjournment thereof, and in such case such Stockholders and only such
Stockholders as shall be Stockholders of record on the date so fixed shall be
entitled to notice of and to vote at, such meeting and any adjournment thereof
notwithstanding any transfer of any stock on the books of the Corporation after
such record date fixed as aforesaid.
SECTION 2.9 ORDER OF BUSINESS. The order of business at all meetings
of Stockholders shall be as determined by the chairman of the meeting or as is
otherwise determined by the vote of the holders of a majority of the shares of
stock present in person or by proxy and entitled to vote without regard to class
or series at the meeting.
4
<PAGE>
SECTION 2.10 ACTION BY WRITTEN CONSENT. No action required or
permitted to be taken by the Stockholders shall be taken except at an annual or
special meeting with prior notice and a vote. No action may be taken by the
Stockholders by written consent.
SECTION 2.11 NOTICE OF STOCKHOLDER NOMINEES. Only persons who are
nominated in accordance with the procedures set forth in this Section 2.11 shall
be eligible for election as directors of the Corporation. Nominations of persons
for election to the Board of Directors of the Corporation may be made at a
meeting of the Corporation's stockholders (a) by or at the direction of the
Board of Directors or (b) by any stockholder of the Corporation entitled to vote
for the election of directors at such meeting who complies with the procedures
set forth in this Section 2.11. All nominations by stockholders shall be made
pursuant to timely notice in proper written form to the Secretary of the
Corporation. To be timely, a stockholder's notice shall be delivered to or
mailed and received at the principal executive offices of the Corporation not
less than 90 days nor more than 120 days prior to the meeting; provided,
however, that if less than 100 days' notice or prior public disclosure of the
date of the meeting is given or made to stockholders, notice by the stockholder
to be timely must be so received not later than the close of business on the
l0th day following the day on which such notice of the date of the meeting was
mailed or such public disclosure was made. To be in proper written form, such
stockholder's notice to the Secretary shall set forth in writing (a) as to each
person whom such stockholder proposes to nominate for election or reelection as
a director, all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is otherwise
required, in each case pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended; including, without limitation, such person's written
consent to being named in the proxy statement as a nominee and to serving as a
director if elected; and (b) as to such stockholder (i) the name and address, as
they appear on the Corporation's books, of such stockholder and (ii) the class
and number of shares of the Corporation's capital stock that are beneficially
owned by such stockholder. At the request of the Board of Directors, any person
nominated by the Board of Directors for election as a director shall furnish to
the Secretary of the Corporation that information required to be set forth in a
stockholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a director unless nominated in accordance with
the procedures set forth in these Bylaws of the Corporation. The chairman of the
stockholders' meeting shall, if the facts warrant, determine and declare to the
5
<PAGE>
meeting that a nomination was not made in accordance with the procedures
prescribed by these Bylaws of the Corporation, and if he shall so determine, he
shall announce such determination to the meeting and the defective nomination
shall be disregarded.
SECTION 2.12 STOCKHOLDER PROPOSALS. At any special meeting of the
Corporation's stockholders, only such business shall be conducted as shall have
been brought before the meeting by or at the direction of the Board of
Directors. At any annual meeting of the stockholders, only such business shall
be conducted as shall have been brought before the meeting (a) by or at the
direction of the Board of Directors or (b) by any stockholder who complies with
the procedures set forth in this Section 2.12. For business properly to be
brought before an annual meeting by a stockholder, the stockholder must have
given timely notice thereof in proper written form to the Secretary of the
Corporation. To be timely, a stockholder's notice must be delivered to or mailed
and received at the principal executive offices of the Corporation not less than
120 days from the date of the release of the Corporation's proxy statement
relating to the prior year's annual meeting of stockholders; provided, however,
in the event no annual meeting was held in the prior year or if the current
year's annual meeting shall be held more than 30 days prior to or after the date
of the previous year's annual meeting a stockholder's notice shall be timely if
received by the Corporation not later than the close of business on the 10th day
following the day on which such notice of the date of the Corporation's annual
meeting was mailed or public disclosure was made. To be in proper written form,
such stockholder's notice to the Secretary shall set forth in writing as to each
matter such stockholder proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (b) the name and
address, as they appear on the Corporation's books, of such stockholder, (c) the
class and number of shares of the Corporation's stock which are beneficially
owned by such stockholder and (d) any material interest of such stockholder in
such business. Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at an annual meeting except in accordance with the
procedures set forth in this Section 2.12. The chairman of an annual
stockholder's meeting shall, if the facts warrant, determine and declare to the
meeting that business was not properly brought before the meeting in accordance
with the provisions of this Section 2.12, and, if he should so determine, he
shall so announce such determination to the meeting and any such business not
properly brought before the meeting
6
<PAGE>
shall not be transacted.
SECTION 2.13. DISCRETIONARY VOTING AUTHORITY ON PROXIES. To the
extent permitted in accordance with the Delaware General Corporation Law and
applicable securities laws proxies solicited by the Corporation in connection
with any annual or special meeting of stockholders may confer discretionary
authority to vote on any matters not timely known by the Corporation prior to
such meeting or, if so timely known, provided that the Corporation otherwise
complies with the requirements of securities laws applicable to discretionary
voting on such matter. The Corporation shall be deemed to have received timely
notice of a stockholder proposal to be presented at a stockholders' meeting if
the stockholder shall have furnished notice to the Corporation in accordance
with the requirements of Section 2.12 of these Bylaws and such stockholder
complies with the other applicable requirements of the securities laws.
ARTICLE III
DIRECTORS
SECTION 3.1 MANAGEMENT. The property, affairs and business of the
Corporation shall be managed by or under the direction of the Board of Directors
which may exercise all powers of the Corporation and do all lawful acts and
things as are not by law, by the Certificate of Incorporation or by these Bylaws
directed or required to be exercised or done by the Stockholders.
SECTION 3.2 NUMBER AND TERM. The number of directors may be fixed
from time to time by resolution of the Board of Directors adopted by the
affirmative vote of a majority of the members of the entire Board of Directors,
but shall consist of not less than three nor more than 15 members, one-third of
whom shall be elected each year by the Stockholders except as provided in
Section 3.4. Directors need not be Stockholders. No decrease in the number of
directors shall have the effect of shortening the term of office of any
incumbent director.
SECTION 3.3 QUORUM AND MANNER OF ACTION. At all meetings of the
Board of Directors a majority of the total number of directors holding office
shall constitute a quorum for the transaction of business and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by law, by the Certificate of Incorporation or these
Bylaws. When the Board of Directors consists of one director, the one director
shall constitute a majority and a
7
<PAGE>
quorum. If at any meeting of the Board of Directors there shall be less than a
quorum present, a majority of those present may adjourn the meeting from time to
time until a quorum is obtained, and no further notice thereof need be given
other than by announcement at such adjourned meeting. Attendance by a director
at a meeting shall constitute a waiver of notice of such meeting except where a
director attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business on the ground that
the meeting is not lawfully called or convened
SECTION 3.4 VACANCIES. Except as otherwise provided by law and the
Certificate of Incorporation, in the case of any increase in the authorized
number of directors or of any vacancy in the Board of Directors, however
created, the additional director or directors may be elected, or, as the case
may be, the vacancy or vacancies may he filled by majority vote of the directors
remaining on the whole Board of Directors although less than a quorum, or by a
sole remaining director. In the event one or more directors shall resign,
effective at a future date, such vacancy or vacancies shall be filled by a
majority of the directors who will remain on the whole Board of Directors,
although less than a quorum, or by a sole remaining director. Any director
elected or chosen as provided herein shall serve until the sooner of (i) the
unexpired term of the directorship to which be is appointed or (ii) until his
successor is elected and qualified; or (iii) until his earlier resignation or
removal.
SECTION 3.5 RESIGNATIONS. A director may resign at any time upon
written notice of resignation to the Corporation. Any resignation shall be
effective immediately unless a certain effective date is specified therein, in
which event it will be effective upon such date and acceptance of any
resignation shall not be necessary to make it effective.
SECTION 3.6 REMOVALS. Any director or the entire Board of Directors
may be removed only for cause, and another person or persons may be elected to
serve for the remainder of his or their term, by the holders of a majority of
the shares of the Corporation entitled to vote in the election of directors.
Stockholders may not remove any director without cause. In case any vacancy so
created shall not be filled by the Stockholders at such meeting, such vacancy
may be filled by the directors as provided in Section 3.4
SECTION 3.7 ANNUAL MEETINGS. The annual meeting of the Board of
Directors shall be held, if a quorum be present, immediately following each
annual meeting of the Stockholders at the place such meeting of Stockholders
took place, for the purpose of
8
<PAGE>
organization and transaction of any other business that might be transacted at a
regular meeting thereof, and no notice of such meeting shall be necessary. If a
quorum is not present, such annual meeting may be held at any other time or
place that may be specified in a notice given in the manner provided in Section
3.9 for special meetings of the Board of Directors or in a waiver of notice
thereof.
SECTION 3.8 REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held without notice at such places and times as shall be
determined from time to time by resolution of the Board of Directors. Except as
otherwise provided by law, any business may be transacted at any regular meeting
of the Board of Directors.
SECTION 3.9 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chief Executive Officer, the President or by the
Secretary on the written request of one-third of the members of the whole Board
of Directors stating the purpose or purposes of such meeting. Notices of special
meetings, if mailed, shall be mailed to each director not later than two days
before the day the meeting is to be held or if otherwise given in the manner
permitted by the Bylaws, not later than the day before such meeting. Neither the
business to be transacted at, nor the purpose of, any special meeting need be
specified in any notice or written waiver of notice unless so required by the
Certificate of Incorporation or by the Bylaws and, unless limited by law, the
Certificate of Incorporation or by these Bylaws, any and all business may be
transacted at a special meeting.
SECTION 3.10 ORGANIZATION OF MEETINGS. At any meeting of the Board
or Directors business shall be transacted in such order and manner as such Board
of Directors may from time to time determine, and all matters shall he
determined by the vote of a majority of the directors present at any meeting at
which there is a quorum, except as otherwise provided by these Bylaws or
required by law
SECTION 3.11 PLACE OF MEETINGS. The Board of Directors may hold
their meetings and have one or more offices, and keep the books of the
Corporation, outside the State of Delaware, at any office or offices of the
Corporation, or at any other place as they may from time to time by resolution
determine.
SECTION 3.12 COMPENSATION OF DIRECTORS. Directors shall not receive
any stated salary for their services as directors, but by resolution of the
Board of Directors a fixed honorarium as well as fees and expenses, if any, of
attendance may be allowed for attendance at
9
<PAGE>
each meeting. Nothing herein contained shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be allowed
like compensation for attending committee meetings.
SECTION 3.13 ACTION BY UNANIMOUS WRITTEN CONSENT. Unless otherwise
restricted by law, the Certificate of Incorporation or these Bylaws, any action
required or permitted to be taken at any meeting of the Board of Directors or of
any committee thereof may be taken without a meeting if prior to such action all
members of the Board of Directors or of such committee, as the case may be,
consent thereto in writing and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or the committee.
SECTION 3.14 PARTICIPATION IN MEETINGS BY TELEPHONE. Unless
otherwise restricted by the Certificate of Incorporation or these Bylaws,
members of the Board of Directors or of any committee thereof may participate in
a meeting of such Board of Directors or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and participation in a meeting
in such manner shall constitute presence in person at such meeting.
ARTICLE IV
COMMITTEES OF THE BOARD
SECTION 4.1 MEMBERSHIP AND AUTHORITIES. The Board of Directors may,
by resolution or resolutions passed by a majority of the whole Board of
Directors, designate one or more Directors to constitute an Executive Committee
and such other committees as the Board of Directors may determine, each of which
committees to the extent provided in said resolution or resolutions or in these
Bylaws, shall have and may exercise all the powers of the Board of Directors in
the management of the business and affairs of the Corporation, except in those
cases where the authority of the Board of Directors is specifically denied to
the Executive Committee or such other committee or committees by law, the
Certificate of Incorporation or these Bylaws, and may authorize the seal of the
Corporation to be affixed to all papers that may require it. The designation of
an Executive Committee or other committee and the delegation thereto of
authority shall not operate to relieve the Board of Directors, or any members
thereof, of any responsibility imposed upon it or him by law.
10
<PAGE>
SECTION 4.2 MINUTES. Each committee designated by the Board of
Directors shall keep regular minutes of its proceedings and report the same to
the Board of Directors when required.
SECTION 4.3 VACANCIES. The Board of Directors may designate one or
more of its members as alternate members of any committee who may replace any
absent or disqualified member at any meeting of such committee. If no alternate
members have been appointed, the committee member or members thereof present at
any meeting and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any absent or disqualified
member. The Board of Directors shall have the power at any time to fill
vacancies in, to change the membership of, and to dissolve, any committee.
SECTION 4.4 TELEPHONE MEETINGS. Members of any committee designated
by the Board of Directors may participate in or hold a meeting by use of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other. Participation in a
meeting pursuant to this Section 4.4 shall constitute presence in person at such
meeting, except where a person participates in the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
SECTION 4.5 ACTION WITHOUT MEETING. Any action required or permitted
to be taken at a meeting of any committee designated by the Board of Directors
may be taken without a meeting if a consent in writing, setting forth the action
so taken, is signed by all the members of the committee and filed with the
minutes of the committee proceedings. Such consent shall have the same force and
effect as a unanimous vote at a meeting.
ARTICLE V
OFFICERS
SECTION 5.1 NUMBER AND TITLE. The elected officers of the
Corporation shall be chosen by the Board of Directors and shall be a Chief
Executive Officer, one or more Presidents, one or more Vice Presidents, a
Secretary and a Treasurer. The Board of Directors may also choose a Chairman of
the Board, who must be a Board member of the Board of Directors, and additional
Vice Presidents, Assistant Secretaries and/or Assistant Treasurers. One person
may
11
<PAGE>
hold any two or more of these offices.
SECTION 5.2 TERM OF OFFICE: VACANCIES. So far as is practicable, all
elected officers shall be elected by the Board of Directors at the annual
meeting of the Board of Directors in each year, and except as otherwise provided
in this Article V, shall hold office until the next such meeting of the Board of
Directors in the subsequent year and until their respective successors are
elected and qualified or until their earlier resignation or removal. All
appointed officers shall hold office at the pleasure of the Board of Directors.
If any vacancy shall occur in any office, the Board of Directors may elect or
appoint a successor to fill such vacancy for the remainder of the term.
SECTION 5.3 REMOVAL OF ELECTED OFFICERS. Any elected officer may be
removed at any time, with or without cause, by affirmative vote of a majority of
the whole Board of Directors, at any regular meeting or at any special meeting
called for such purpose.
SECTION 5.4 RESIGNATIONS. Any officer may resign at any time upon
written notice of resignation to the Chief Executive Officer, the President,
Secretary or Board of Directors of the Corporation. Any resignation shall be
effective immediately unless a date certain is specified for it to take effect,
in which event it shall be effective upon such date, and acceptance of any
resignation shall not be necessary to make it effective, irrespective of whether
the resignation is tendered subject to such acceptance.
SECTION 5.5 THE CHAIRMAN OF THE BOARD. The Chairman of the Board, if
one shall be elected, shall preside at all meetings of the Stockholders and
Board of Directors. In addition, the Chairman of the Board shall perform
whatever duties and shall exercise all powers that are given to him by the Board
of Directors.
SECTION 5.6 CHIEF EXECUTIVE OFFICER. The Chief Executive Officer of
the Corporation, shall (in the absence of the Chairman of the Board, if one be
elected) preside at meetings of the Stockholders and Board of Directors; shall
be EX OFFICIO a member of all standing committees, shall have general and active
management of business of the corporation; shall implement the general
directives, plans and policies formulated by the Board of Directors; and shall
further have such duties, responsibilities and authorities as may be assigned to
him by the Board of Directors. He may sign, with any other proper officer, any
deeds, bonds, mortgages, contracts and other documents which the Board of
Directors has authorized to be executed, except where required by law to be
otherwise signed and executed and except where the signing
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and execution thereof shall be expressly delegated by the Board of Directors or
these Bylaws, to some other officer or agent of the Corporation. In the absence
of the Chief Executive Officer, his duties shall be performed and his authority
may be exercised by the President or a Vice President of the Corporation as may
have been designated by the Chief Executive Officer with the right reserved to
the Board of Directors to designate or supersede any designation so made.
SECTION 5.7 PRESIDENT(S) AND VICE PRESIDENTS. The President(s) and
the several Vice Presidents shall have such powers and duties as may be assigned
to them by these Bylaws and as may from time to time be assigned to them by the
Board of Directors or the Chief Executive Officer and may sign, with any other
proper officer, certificates for shares of the Corporation.
SECTION 5.8 SECRETARY. The Secretary, if available, shall attend all
meetings of the Board of Directors and all meetings of the Stockholders and
record the proceedings of the meetings in a book to be kept for that purpose and
shall perform like duties for any committee of the Board of Directors as shall
designate him to serve. He shall give, or cause to be given, notice of all
meetings of the Stockholders and meetings of the Board of Directors and
committees thereof and shall perform such other duties incident to the office of
secretary or as may be prescribed by the Board of Directors or the Chief
Executive Officer, under whose supervision he shall be. He shall have custody of
the corporate seal of the Corporation and he, or any Assistant Secretary, or any
other person whom the Board of Directors may designate, shall have authority to
affix the same to any instrument requiring it, and when so affixed it may be
attested by his signature or by the signature of any Assistant Secretary or by
the signature of such other person so affixing such seal.
SECTION 5.9 ASSISTANT SECRETARIES. Each Assistant Secretary shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as may be assigned to him by the Board of Directors, the
Chief Executive Officer or the Secretary. The Assistant Secretary or such other
person as may be designated by the Chief Executive Officer shall exercise the
powers of the Secretary during that officer's absence or inability to act.
SECTION 5.10 TREASURER. The Treasurer shall have the custody of and
be responsible for the corporate funds and securities, shall keep full and
accurate accounts of receipts and disbursements in the books belonging to the
Corporation and shall deposit all moneys and other valuable effects in the name
and to the credit of the Corporation in such
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depositories as may be designated by the Board of Directors. He shall disburse
the funds of the Corporation as may be ordered by the Board of Directors, taking
proper vouchers for such disbursements, and shall render to the Chief Executive
Officer and the Board of Directors, at its regular meetings, or when the Board
of Directors so requires, an account of all his transactions as Treasurer and of
the financial condition of the Corporation and he shall perform all other duties
incident to the position of Treasurer or as may be prescribed by the Board of
Directors or the Chief Executive Officer. If required by the Board of.
Directors, he shall give the Corporation a bond in such sum and with such surety
or sureties as shall be satisfactory to the Board of Directors for the faithful
performance of the duties of his office and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.
SECTION 5.11 ASSISTANT TREASURERS. Each Assistant Treasurer shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as may be assigned to him by the Board of Directors, the
Chief Executive Officer or the Treasurer. The Assistant Treasurer or such other
person designated by the Chief Executive Officer shall exercise the power of the
Treasurer during that officer's absence or inability to act.
SECTION 5.12 SUBORDINATE OFFICERS. The Board of Directors may (a)
appoint such other subordinate officers and agents as it shall deem necessary
who shall hold their offices for such terms, have such authority and perform
such duties as the Board of Directors may from time to time determine, or (b)
delegate to any committee or officer the power to appoint any such subordinate
officers or agents.
SECTION 5.13 SALARIES AND COMPENSATION. The salary or other
compensation of officers shall be fixed from time to time by the Board of
Directors. The Board of Directors may delegate to any committee or officer the
power to fix from time to time the salary or other compensation of subordinate
officers and agents appointed in accordance with the provisions of Section 5.12.
ARTICLE VI
INDEMNIFICATION
SECTION 6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS. (a) The
Corporation
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shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation) by reason of the fact that such person is
or was, at any time, prior to or during which this Article VI is in effect, a
director, officer, employee or agent of the Corporation, or is or was, at any
time prior to or during which this Article VI is in effect, serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, other enterprise or employee
benefit plan against reasonable expenses (including attorneys' fees), judgments,
fines, penalties, amounts paid in settlement and other liabilities actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe that his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
such person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(b) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that such person is or was, at any
time prior to or during which this Article VI is in effect, a director, officer,
employee or agent of the Corporation, or is or was, at any time prior to or
during which this Article VI is in effect, serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees), actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation; provided, that no
indemnification shall be made under this sub-section (b) in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Delaware Court
of Chancery, or other court of appropriate
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jurisdiction, shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity of such expenses which the Delaware
Court of Chancery, or other court of appropriate jurisdiction, shall deem
proper.
(c) Any indemnification under sub-sections (a) or (b) (unless
ordered by the Delaware Court of Chancery or other court of appropriate
jurisdiction) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of such person is proper
in the circumstances because he has met the applicable standard of conduct set
forth in sub-sections (a) and (b). Such determination shall be made (1) by the
Board of Directors by a majority vote of a quorum consisting of directors not
parties such action, suit or proceeding; or (2) if such a quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel, in written opinion, selected by the Board
of Directors; or (3) by the Stockholders. In the event a determination is made
under this sub-section (c) that the director, officer, employee or agent has met
the applicable standard of conduct as to some matters but not as to others,
amounts to be indemnified may be reasonably prorated.
(d) Expenses incurred by a person who is or was a director or
officer of the Corporation in appearing at, participating in or defending any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, shall be paid by the Corporation at
reasonable intervals in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized by this Article VI.
(e) It is the intention of the Corporation to indemnify the persons
referred to in this Article VI to the fullest extent permitted by law and with
respect to any action, suit or proceeding arising from events which occur at any
time prior to or during which this Article VI is in effect. The indemnification
and advancement of expenses provided by this Article VI shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be or become entitled under any law, the Certificate
of Incorporation, these Bylaws, agreement, the vote of Stockholders or
disinterested directors or otherwise, or under any policy or policies of
insurance purchased and maintained by the
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Corporation on behalf of any such person, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of such person.
(f) The indemnification provided by this Article VI shall be
subject to all valid and applicable laws, and in the event this Article VI or
any of the provisions hereof or the indemnification contemplated hereby are
found to be inconsistent with or contrary to any such valid laws, the latter
shall be deemed to control and this Article VI shall be regarded as modified
accordingly, and, as so modified, to continue in full force and effect.
ARTICLE VII
CAPITAL STOCK
SECTION 7.1 CERTIFICATES OF STOCK. Certificates of stock shall be
issued to each Stockholder certifying the number of shares owned by him in the
Corporation and shall be in a form not inconsistent with the Certificate of
Incorporation and as approved by the Board of Directors. The certificates shall
be signed by the Chairman of the Board, the President or a Vice President and by
the Secretary or an Assistant Secretary, or the Treasurer or an Assistant
Treasurer and may be sealed with the seal of the Corporation or a facsimile
thereof. Any or all of the signatures on the certificate may be a facsimile. In
case any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
If the Corporation shall be authorized to issue more than one (1)
class of stock or more than one (1) series of any class, the powers,
designations, preferences and relative, participating, optional or other special
rights of each class or stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights shall be set forth
in full or summarized on the face or back of the certificate which the
Corporation shall issue to represent such class or series of stock, provided
that, except as otherwise provided by statute, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificate
which the Corporation shall issue to represent such class or series of stock, a
statement that the
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Corporation will furnish without charge to each Stockholder who so requests the
powers, designations, preferences and relative, participating, optional or other
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
SECTION 7.2 LOST CERTIFICATES. The Board of Directors may direct a
new certificate to be issued in place of any certificate theretofore issued by
the Corporation alleged to have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the owner of such certificate, or his legal
representative. When authorizing the issuance of a new certificate, the Board of
Directors may in its discretion, as a condition precedent to the issuance
thereof, require the owner, or his legal representative, to give a bond in such
form and substance with such surety as it may direct, to indemnify the
Corporation against any claim that may be made on account of the alleged loss,
theft or destruction of such certificate or the issuance of such new
certificate.
SECTION 7.3 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD
FOR CERTAIN PURPOSES. (a) In order that the Corporation may determine the
Stockholders entitled to receive payment of any dividend or other distribution
or allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of capital stock or for the purpose of any other
lawful action, the Board of Directors may fix, in advance, a record date, which
shall not be more than sixty (60) days prior to the date of payment of such
dividend or other distribution or allotment of such rights or the date when any
such rights in respect of any change, conversion or exchange of stock may be
exercised or the date of such other action. In such a case, only Stockholders of
record on the date so fixed shall be entitled to receive any such dividend or
other distribution or allotment of rights or to exercise such rights or for any
other purpose, as the case may be, notwithstanding any transfer of any stock on
the books of the Corporation after any such record date fixed as aforesaid.
(b) If no record date is fixed, the record date for determining
Stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.
SECTION 7.4 DIVIDENDS. Subject to the provisions of the Certificate
of Incorporation, if any, and except as otherwise provided by law, the directors
may declare dividends upon the capital stock of the Corporation as and when they
deem it to be expedient.
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Such dividends may be paid in cash, in property or in shares of the
Corporation's capital stock. Before declaring any dividend there may be set
apart out of the funds of the Corporation available for dividends, such sum or
sums as the directors from time to time in their discretion think proper for
working capital or as a reserve fund to meet contingencies or for equalizing
dividends, or for such other purposes as the directors shall think conducive to
the interests of the Corporation and the directors may modify or abolish any
such reserve in the manner in which it was created.
SECTION 7.5 REGISTERED STOCKHOLDERS. Except as expressly provided by
law, the Certificate of Incorporation and these Bylaws, the Corporation shall be
entitled to treat registered Stockholders as the only holders and owners in fact
of the shares standing in their respective names and the Corporation shall not
be bound to recognize any equitable or other claim to or interest in such shares
on the part of any other person, regardless of whether it shall have express or
other notice thereof.
SECTION 7.6 TRANSFER OF STOCK. Transfers of shares of the capital
stock of the Corporation shall be made only on the books of the Corporation by
the registered owners thereof, or by their legal representatives or their duly
authorized attorneys. Upon any such transfers the old certificates shall be
surrendered to the Corporation by the delivery thereof to the person in charge
of the stock transfer books and ledgers, by whom they shall be cancelled and new
certificates shall be issued.
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ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 8.1 CORPORATE SEAL. If one be adopted, the corporate seal
shall have inscribed thereon the name of the Corporation and shall be in such
form as may be approved by the Board of Directors. Said seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any manner
reproduced.
SECTION 8.2 FISCAL YEAR. The fiscal year of the Corporation shall
be fixed by resolution of the Board of Directors.
SECTION 8.3 CHECKS, DRAFTS, NOTES. All checks, drafts or other
orders for the payment of money, notes or other evidences of indebtedness issued
in the name of the Corporation shall be signed by such officer or officers,
agent or agents of the Corporation, and in such manner as shall from time to
time be determined by resolution (whether general or special) of the Board of
Directors or may be prescribed by any officer or officers, or any officer and
agent jointly, thereunto duly authorized by the Board of Directors.
SECTION 8.4 NOTICE AND WAIVER OF NOTICE. Whenever notice is required
to be given to any director or Stockholder under the provisions of applicable
law, the Certificate of Incorporation or of these Bylaws it shall not be
construed to only mean personal notice, rather, such notice may also be given in
writing, by mail, addressed to such director or Stockholder at his address as it
appears on the records of the Corporation, with postage thereon prepaid (unless
prior to the mailing of such notice he shall have filed with the Secretary of
the Corporation a written request that notices intended for him be mailed to
some other address in which case, such notice shall be mailed to the address
designated in the request), and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail. Notice to
directors may also be given by telegram, cable or other form of recorded
communication, by personal delivery or by telephone. Whenever notice is required
to be given under any provision of law, the Certificate of Incorporation or
these Bylaws, a waiver thereof in writing, by telegraph, cable or other form of
recorded communication, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends a meeting for the express
purpose of objecting at the beginning
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of the meeting, to the transaction of any business on the ground that the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
Stockholders, directors, or members of a committee of directors need be
specified in any written waiver of notice unless so required by the Certificate
of Incorporation or these Bylaws.
SECTION 8.5 EXAMINATION OF BOOKS AND RECORDS. The Board of Directors
shall determine from time to time whether, and if allowed, when and under what
conditions and regulations the accounts and books of the Corporation (except
such as may by statute be specifically opened to inspection) or any of them
shall be open to inspection by the Stockholders, and the Stockholders rights in
this respect are and shall be restricted and limited accordingly.
SECTION 8.6 VOTING UPON SHARES HELD BY THE CORPORATION. Unless
otherwise provided by law or by the Board of Directors, the Chairman of the
Board of Directors, if one shall be elected, or the President, if a Chairman of
the Board of Directors shall not be elected, acting on behalf of the
Corporation, shall have full power and authority to attend and to act and to
vote at any meeting of Stockholders of any corporation in which the Corporation
may hold stock and, at any such meeting, shall possess and may exercise any and
all of the rights and powers incident to the ownership of such stock which, as
the owner thereof, the Corporation might have possessed and exercised, if
present. The Board of Directors by resolution from time to time may confer like
powers upon any person or persons.
ARTICLE IX
AMENDMENTS
SECTION 9.1 AMENDMENT. Except as otherwise expressly provided in the
Certificate of Incorporation, the directors, by the affirmative vote of a
majority of the entire Board of Directors and without the assent or vote of the
Stockholders, may at any meeting, provided the substance of the proposed
amendment shall have been stated in the notice of the meeting, make, repeal,
alter, amend or rescind any of these Bylaws. The Stockholders shall not make,
repeal, alter, amend or rescind any of the provisions of these Bylaws except by
the holders of not less than 80% of the total voting power of all shares of
stock of the Corporation entitled to vote in the election of directors,
considered for purposes of this Article IX as one class.
21
EXHIBIT 3(B)
As amended by the Board of Directors on
April 20,1990, February 26, 1993, February 23, September 1, 1998 and
May 5, 1999 and June 30, 1999
SANTA FE SNYDER CORPORATION
BYLAWS
ARTICLE I OFFICES SECTION 1.1 PRINCIPAL OFFICE. The principal office
of the Corporation shall be in the City of Houston, Texas.
SECTION 1.2 REGISTERED OFFICE. The registered office and registered
agent of the Corporation required to be maintained in the State of Delaware by
the General Corporation Law of the State of Delaware shall be as designated from
time to time by the appropriate filing by the Corporation in the office of the
Secretary of State of the State of Delaware.
SECTION 1.3 OTHER OFFICES. The Corporation may also have offices at
such other places, both within and without the State of Delaware, as the Board
of Directors may from time to time determine or as the business of the
Corporation may require.
ARTICLE II
STOCKHOLDERS' MEETINGS
SECTION 2.1 ANNUAL MEETING. The annual meeting of the holders of
shares of each class or series of stock as are entitled to notice thereof and to
vote thereat pursuant to applicable law and the Certificate of Incorporation for
the purpose of electing directors and transacting such other proper business as
may come before it shall be held in each year, at such time, on such day and at
such place, within or without the State of Delaware, as may be designated by the
Board of Directors.
<PAGE>
SECTION 2.2 SPECIAL MEETINGS. In addition to such special meetings
as are provided by law or the Certificate of Incorporation, special meetings of
the holders of any class or series or of all classes or series of the
Corporation's stock for any purpose or purposes, may be called at any time by
the Board of Directors and may he held on such day, at such time and at such
place, within or without the State of Delaware, as shall be designated by the
Board of Directors. Stockholders of the Corporation may not call a special
meeting.
SECTION 2.3 NOTICE OF MEETINGS AND ADJOURNED MEETINGS. Except as
otherwise provided by law, written notice of any meeting of Stockholders shall
be given either by personal delivery or by mail to each Stockholder of record
entitled to vote thereat. Notice of each meeting shall be in such form as is
approved by the Board of Directors and shall state the date, place and hour of
the meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Unless otherwise provided by law, such written
notice shall be given not less than 10 nor more than 60 days before the date of
the meeting. Except when a Stockholder attends a meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction of any
business on the ground that the meeting is not lawfully called or convened,
presence in person or by proxy of a Stockholder shall constitute a waiver of
notice of such meeting. Further, a written waiver of any notice required by law
or by these Bylaws, signed by the person entitled to notice, whether before or
after the time stated therein, shall be deemed equivalent to notice. Except as
otherwise provided by law, the business that may be transacted at any such
meeting shall be limited to and consist of the purpose or purposes stated in
such notice. If a meeting is adjourned to another time or place, notice need not
be given of the adjourned meeting if the time and place thereof are announced at
the meeting at which the adjournment is taken; provided, however, that if the
adjournment is for more than 30 days, or if after the adjournment a new record
date is fixed for the adjourned meeting, a notice of the adjourned meeting shall
be given to each Stockholder of record entitled to vote at the meeting.
SECTION 2.4 VOTING LISTS. The officer or agent having charge of the
stock transfer books for shares of the Corporation shall make, at least 10 days
before each meeting of the Stockholders, a complete list of Stockholders
entitled to vote at such meeting or any adjournment thereof, arranged in
alphabetical order, with the address of each and the number of shares held by
each, which list, for a period of 10 days prior to such meeting, shall be kept
on file at a place within the city where the meeting is to he held, which place
shall be specified in the notice of the
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meeting, or, if not so specified, at the place where the meeting is to he held,
and such list shall be subject to inspection by any Stockholders at any time
during usual business hours. Such list shall also be produced and kept open at
the time and place of the meeting and shall be subject to the inspection of any
Stockholder for the duration of the meeting. The original stock transfer books
shall he prima facie evidence as to who are the Stockholders entitled to examine
such list or transfer books or to vote at any meeting of Stockholders.
SECTION 2.5 QUORUM. The holders of at least a majority of the shares
issued and outstanding and entitled to vote thereat, present at a meeting, shall
constitute a quorum at all meetings of stockholders for the transaction of
business, except as otherwise provided by law or by the Certificate of
Incorporation. If, however, such quorum shall not be present at any meeting of
the stockholders, the Chairman or the stockholders entitled to vote thereat and
present at the meeting, shall have the power to adjourn the meeting from time to
time, without notice other than announcement at the meeting unless the
adjournment is for more than 30 days or if after the adjournment a new record
date is fixed for the adjourned meeting, until a quorum shall be present. A
holder of a share shall be treated as being present at a meeting if the holder
of such share is (i) present in person at the meeting or (ii) represented at the
meeting by a valid proxy, whether the instrument granting such proxy is marked
as casting a vote or abstaining, is left blank or does not empower such proxy to
vote with respect to some or all matters to he voted upon at the meeting.
SECTION 2.6 ORGANIZATION. Meetings of the Stockholders shall be
presided over by the Chairman of the Board of Directors, if one shall be
elected, or in his absence, by the Chief Executive Officer, the President or by
any Vice President, or in the absence of any of such officers, by a chairman to
be chosen by a majority of the Stockholders entitled to vote at the meeting who
are present in person or by proxy. The Secretary, or, in his absence, any
Assistant Secretary or any person appointed by the individual presiding over the
meeting, shall act as secretary at meetings of the Stockholders.
SECTION 2.7 VOTING. Each Stockholder of record, as determined
pursuant to Section 2.8, who is entitled to vote in accordance with the terms of
the Certificate of Incorporation and in accordance with the provisions of these
Bylaws, shall he entitled to one vote, in person or by proxy, for each share of
stock registered in his name on the books of the Corporation. Every Stockholder
entitled to vote at any Stockholders' meeting may authorize
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another person or persons to act for him by proxy duly appointed by instrument
in writing subscribed by such Stockholder and executed not more than three years
prior to the meeting, unless the proxy provides for a longer period. A duly
executed proxy shall be irrevocable if it states that it is irrevocable and if,
and only so long as, it is coupled with an interest sufficient in law to support
an irrevocable power. A Stockholder's attendance at any meeting, when such
Stockholder who may have theretofore given a proxy, shall not have the effect of
revoking such proxy unless such Stockholder shall in writing so notify the
Secretary of the meeting prior to the voting of the proxy. Unless otherwise
provided by law, no vote on the election of directors or any question brought
before the meeting need be by ballot unless the chairman of the meeting shall
determine that it shall be by ballot or the holders of a majority of the shares
of stock present in person or by proxy and entitled to participate in such vote
shall so demand. In a vote by ballot, each ballot shall state the number of
shares voted and the name of the Stockholder or proxy voting. Action on a matter
(other than the election of directors) shall be approved if the votes cast in
favor of the matter exceed the vote's cast opposing the matter. Directors shall
be elected by a plurality of the votes cast by the shares entitled to vote in
the election at a meeting at which a quorum is present. In the election of
directors, votes may not be cumulated. In determining the number of votes cast,
shares abstaining from voting or not voted on a matter (including elections)
will not he treated as votes cast. The provisions of this paragraph will govern
with respect to all votes of stockholders except as otherwise provided for in
these Bylaws or in the Certificate of Incorporation or by some specific
statutory provision superseding the provisions contained in these Bylaws or the
Certificate of Incorporation.
SECTION 2.8 STOCKHOLDERS ENTITLED TO VOTE. The Board of Directors
may fix a date not more than 60 days nor less than 10 days prior to the date of
any meeting of Stockholders as a record date for the determination of the
Stockholders entitled to notice of and to vote at such meeting and any
adjournment thereof, and in such case such Stockholders and only such
Stockholders as shall be Stockholders of record on the date so fixed shall be
entitled to notice of and to vote at, such meeting and any adjournment thereof
notwithstanding any transfer of any stock on the books of the Corporation after
such record date fixed as aforesaid.
SECTION 2.9 ORDER OF BUSINESS. The order of business at all meetings
of Stockholders shall be as determined by the chairman of the meeting or as is
otherwise determined by the vote of the holders of a majority of the shares of
stock present in person or by
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proxy and entitled to vote without regard to class or series at the meeting.
SECTION 2.10 ACTION BY WRITTEN CONSENT. No action required or
permitted to be taken by the Stockholders shall be taken except at an annual or
special meeting with prior notice and a vote. No action may be taken by the
Stockholders by written consent.
SECTION 2.11 NOTICE OF STOCKHOLDER NOMINEES. Only persons who are
nominated in accordance with the procedures set forth in this Section 2.11 shall
be eligible for election as directors of the Corporation. Nominations of persons
for election to the Board of Directors of the Corporation may be made at a
meeting of the Corporation's stockholders (a) by or at the direction of the
Board of Directors or (b) by any stockholder of the Corporation entitled to vote
for the election of directors at such meeting who complies with the procedures
set forth in this Section 2.11. All nominations by stockholders shall be made
pursuant to timely notice in proper written form to the Secretary of the
Corporation. To be timely, a stockholder's notice shall be delivered to or
mailed and received at the principal executive offices of the Corporation not
less than 90 days nor more than 120 days prior to the meeting; provided,
however, that if less than 100 days' notice or prior public disclosure of the
date of the meeting is given or made to stockholders, notice by the stockholder
to be timely must be so received not later than the close of business on the
l0th day following the day on which such notice of the date of the meeting was
mailed or such public disclosure was made. To be in proper written form, such
stockholder's notice to the Secretary shall set forth in writing (a) as to each
person whom such stockholder proposes to nominate for election or reelection as
a director, all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is otherwise
required, in each case pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended; including, without limitation, such person's written
consent to being named in the proxy statement as a nominee and to serving as a
director if elected; and (b) as to such stockholder (i) the name and address, as
they appear on the Corporation's books, of such stockholder and (ii) the class
and number of shares of the Corporation's capital stock that are beneficially
owned by such stockholder. At the request of the Board of Directors, any person
nominated by the Board of Directors for election as a director shall furnish to
the Secretary of the Corporation that information required to be set forth in a
stockholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a director unless nominated in accordance with
the procedures set forth in these Bylaws of the Corporation. The
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chairman of the stockholders' meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
procedures prescribed by these Bylaws of the Corporation, and if he shall so
determine, he shall announce such determination to the meeting and the defective
nomination shall be disregarded.
SECTION 2.12 STOCKHOLDER PROPOSALS. At any special meeting of the
Corporation's stockholders, only such business shall be conducted as shall have
been brought before the meeting by or at the direction of the Board of
Directors. At any annual meeting of the stockholders, only such business shall
be conducted as shall have been brought before the meeting (a) by or at the
direction of the Board of Directors or (b) by any stockholder who complies with
the procedures set forth in this Section 2.12. For business properly to be
brought before an annual meeting by a stockholder, the stockholder must have
given timely notice thereof in proper written form to the Secretary of the
Corporation. To be timely, a stockholder's notice must be delivered to or mailed
and received at the principal executive offices of the Corporation not less than
120 days from the date of the release of the Corporation's proxy statement
relating to the prior year's annual meeting of stockholders; provided, however,
in the event no annual meeting was held in the prior year or if the current
year's annual meeting shall be held more than 30 days prior to or after the date
of the previous year's annual meeting a stockholder's notice shall be timely if
received by the Corporation not later than the close of business on the 10th day
following the day on which such notice of the date of the Corporation's annual
meeting was mailed or public disclosure was made. To be in proper written form,
such stockholder's notice to the Secretary shall set forth in writing as to each
matter such stockholder proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (b) the name and
address, as they appear on the Corporation's books, of such stockholder, (c) the
class and number of shares of the Corporation's stock which are beneficially
owned by such stockholder and (d) any material interest of such stockholder in
such business. Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at an annual meeting except in accordance with the
procedures set forth in this Section 2.12. The chairman of an annual
stockholder's meeting shall, if the facts warrant, determine and declare to the
meeting that business was not properly brought before the meeting in accordance
with the provisions of this Section 2.12, and, if he should so determine, he
shall so announce such
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determination to the meeting and any such business not properly brought before
the meeting shall not be transacted.
SECTION 2.13. DISCRETIONARY VOTING AUTHORITY ON PROXIES. To the
extent permitted in accordance with the Delaware General Corporation Law and
applicable securities laws proxies solicited by the Corporation in connection
with any annual or special meeting of stockholders may confer discretionary
authority to vote on any matters not timely known by the Corporation prior to
such meeting or, if so timely known, provided that the Corporation otherwise
complies with the requirements of securities laws applicable to discretionary
voting on such matter. The Corporation shall be deemed to have received timely
notice of a stockholder proposal to be presented at a stockholders' meeting if
the stockholder shall have furnished notice to the Corporation in accordance
with the requirements of Section 2.12 of these Bylaws and such stockholder
complies with the other applicable requirements of the securities laws.
ARTICLE III
DIRECTORS
SECTION 3.1 MANAGEMENT. The property, affairs and business of the
Corporation shall be managed by or under the direction of the Board of Directors
which may exercise all powers of the Corporation and do all lawful acts and
things as are not by law, by the Certificate of Incorporation or by these Bylaws
directed or required to be exercised or done by the Stockholders.
SECTION 3.2 NUMBER AND TERM. The number of directors may be fixed
from time to time by resolution of the Board of Directors adopted by the
affirmative vote of a majority of the members of the entire Board of Directors,
but shall consist of not less than three nor more than 15 members, one-third of
whom shall be elected each year by the Stockholders except as provided in
Section 3.4. Directors need not be Stockholders. No decrease in the number of
directors shall have the effect of shortening the term of office of any
incumbent director.
SECTION 3.3 QUORUM AND MANNER OF ACTION. At all meetings of the
Board of Directors a majority of the total number of directors holding office
shall constitute a quorum for the transaction of business and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by law, by the Certificate of Incorporation or these
Bylaws. When the
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Board of Directors consists of one director, the one director shall constitute a
majority and a quorum. If at any meeting of the Board of Directors there shall
be less than a quorum present, a majority of those present may adjourn the
meeting from time to time until a quorum is obtained, and no further notice
thereof need be given other than by announcement at such adjourned meeting.
Attendance by a director at a meeting shall constitute a waiver of notice of
such meeting except where a director attends a meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction of any
business on the ground that the meeting is not lawfully called or convened
SECTION 3.4 VACANCIES. Except as otherwise provided by law and the
Certificate of Incorporation, in the case of any increase in the authorized
number of directors or of any vacancy in the Board of Directors, however
created, the additional director or directors may be elected, or, as the case
may be, the vacancy or vacancies may he filled by majority vote of the directors
remaining on the whole Board of Directors although less than a quorum, or by a
sole remaining director. In the event one or more directors shall resign,
effective at a future date, such vacancy or vacancies shall be filled by a
majority of the directors who will remain on the whole Board of Directors,
although less than a quorum, or by a sole remaining director. Any director
elected or chosen as provided herein shall serve until the sooner of (i) the
unexpired term of the directorship to which be is appointed or (ii) until his
successor is elected and qualified; or (iii) until his earlier resignation or
removal.
SECTION 3.5 RESIGNATIONS. A director may resign at any time upon
written notice of resignation to the Corporation. Any resignation shall be
effective immediately unless a certain effective date is specified therein, in
which event it will be effective upon such date and acceptance of any
resignation shall not be necessary to make it effective.
SECTION 3.6 REMOVALS. Any director or the entire Board of Directors
may be removed only for cause, and another person or persons may be elected to
serve for the remainder of his or their term, by the holders of a majority of
the shares of the Corporation entitled to vote in the election of directors.
Stockholders may not remove any director without cause. In case any vacancy so
created shall not be filled by the Stockholders at such meeting, such vacancy
may be filled by the directors as provided in Section 3.4
SECTION 3.7 ANNUAL MEETINGS. The annual meeting of the Board of
Directors shall be held, if a quorum be present, immediately following each
annual meeting of the
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Stockholders at the place such meeting of Stockholders took place, for the
purpose of organization and transaction of any other business that might be
transacted at a regular meeting thereof, and no notice of such meeting shall be
necessary. If a quorum is not present, such annual meeting may be held at any
other time or place that may be specified in a notice given in the manner
provided in Section 3.9 for special meetings of the Board of Directors or in a
waiver of notice thereof.
SECTION 3.8 REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held without notice at such places and times as shall be
determined from time to time by resolution of the Board of Directors. Except as
otherwise provided by law, any business may be transacted at any regular meeting
of the Board of Directors.
SECTION 3.9 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chief Executive Officer, the President or by the
Secretary on the written request of one-third of the members of the whole Board
of Directors stating the purpose or purposes of such meeting. Notices of special
meetings, if mailed, shall be mailed to each director not later than two days
before the day the meeting is to be held or if otherwise given in the manner
permitted by the Bylaws, not later than the day before such meeting. Neither the
business to be transacted at, nor the purpose of, any special meeting need be
specified in any notice or written waiver of notice unless so required by the
Certificate of Incorporation or by the Bylaws and, unless limited by law, the
Certificate of Incorporation or by these Bylaws, any and all business may be
transacted at a special meeting.
SECTION 3.10 ORGANIZATION OF MEETINGS. At any meeting of the Board
or Directors business shall be transacted in such order and manner as such Board
of Directors may from time to time determine, and all matters shall he
determined by the vote of a majority of the directors present at any meeting at
which there is a quorum, except as otherwise provided by these Bylaws or
required by law
SECTION 3.11 PLACE OF MEETINGS. The Board of Directors may hold
their meetings and have one or more offices, and keep the books of the
Corporation, outside the State of Delaware, at any office or offices of the
Corporation, or at any other place as they may from time to time by resolution
determine.
SECTION 3.12 COMPENSATION OF DIRECTORS. Directors shall not receive
any stated salary for their services as directors, but by resolution of the
Board of Directors a fixed
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honorarium as well as fees and expenses, if any, of attendance may be allowed
for attendance at each meeting. Nothing herein contained shall be construed to
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
SECTION 3.13 ACTION BY UNANIMOUS WRITTEN CONSENT. Unless otherwise
restricted by law, the Certificate of Incorporation or these Bylaws, any action
required or permitted to be taken at any meeting of the Board of Directors or of
any committee thereof may be taken without a meeting if prior to such action all
members of the Board of Directors or of such committee, as the case may be,
consent thereto in writing and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or the committee.
SECTION 3.14 PARTICIPATION IN MEETINGS BY TELEPHONE. Unless
otherwise restricted by the Certificate of Incorporation or these Bylaws,
members of the Board of Directors or of any committee thereof may participate in
a meeting of such Board of Directors or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and participation in a meeting
in such manner shall constitute presence in person at such meeting.
SECTION 3.15 THE CHAIRMAN OF THE BOARD. The Chairman of the Board,
if one shall be elected, shall preside at all meetings of the Stockholders and
Board of Directors. In addition, the Chairman of the Board shall perform
whatever duties and shall exercise all powers that are given to him by the Board
of Directors.
ARTICLE IV
COMMITTEES OF THE BOARD
SECTION 4.1 MEMBERSHIP AND AUTHORITIES. The Board of Directors may,
by resolution or resolutions passed by a majority of the whole Board of
Directors, designate one or more Directors to constitute an Executive Committee
and such other committees as the Board of Directors may determine, each of which
committees to the extent provided in said resolution or resolutions or in these
Bylaws, shall have and may exercise all the powers of the Board of Directors in
the management of the business and affairs of the Corporation, except in those
cases
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where the authority of the Board of Directors is specifically denied to the
Executive Committee or such other committee or committees by law, the
Certificate of Incorporation or these Bylaws, and may authorize the seal of the
Corporation to be affixed to all papers that may require it. The designation of
an Executive Committee or other committee and the delegation thereto of
authority shall not operate to relieve the Board of Directors, or any members
thereof, of any responsibility imposed upon it or him by law.
SECTION 4.2 MINUTES. Each committee designated by the Board of
Directors shall keep regular minutes of its proceedings and report the same to
the Board of Directors when required.
SECTION 4.3 VACANCIES. The Board of Directors may designate one or
more of its members as alternate members of any committee who may replace any
absent or disqualified member at any meeting of such committee. If no alternate
members have been appointed, the committee member or members thereof present at
any meeting and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any absent or disqualified
member. The Board of Directors shall have the power at any time to fill
vacancies in, to change the membership of, and to dissolve, any committee.
SECTION 4.4 TELEPHONE MEETINGS. Members of any committee designated
by the Board of Directors may participate in or hold a meeting by use of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other. Participation in a
meeting pursuant to this Section 4.4 shall constitute presence in person at such
meeting, except where a person participates in the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
SECTION 4.5 ACTION WITHOUT MEETING. Any action required or permitted
to be taken at a meeting of any committee designated by the Board of Directors
may be taken without a meeting if a consent in writing, setting forth the action
so taken, is signed by all the members of the committee and filed with the
minutes of the committee proceedings. Such consent shall have the same force and
effect as a unanimous vote at a meeting.
ARTICLE V
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OFFICERS
SECTION 5.1 NUMBER AND TITLE. The elected officers of the
Corporation shall be chosen by the Board of Directors and shall be a Chief
Executive Officer, one or more Presidents, one or more Vice Presidents, a
Secretary and a Treasurer. The Board of Directors may also choose a Chairman of
the Board, who must be a Board member of the Board of Directors, and additional
Vice Presidents, Assistant Secretaries and/or Assistant Treasurers. One person
may hold any two or more of these offices.
SECTION 5.2 TERM OF OFFICE: VACANCIES. So far as is practicable, all
elected officers shall be elected by the Board of Directors at the annual
meeting of the Board of Directors in each year, and except as otherwise provided
in this Article V, shall hold office until the next such meeting of the Board of
Directors in the subsequent year and until their respective successors are
elected and qualified or until their earlier resignation or removal. All
appointed officers shall hold office at the pleasure of the Board of Directors.
If any vacancy shall occur in any office, the Board of Directors may elect or
appoint a successor to fill such vacancy for the remainder of the term.
SECTION 5.3 REMOVAL OF ELECTED OFFICERS. Any elected officer may be
removed at any time, with or without cause, by affirmative vote of a majority of
the whole Board of Directors, at any regular meeting or at any special meeting
called for such purpose.
SECTION 5.4 RESIGNATIONS. Any officer may resign at any time upon
written notice of resignation to the Chief Executive Officer, the President,
Secretary or Board of Directors of the Corporation. Any resignation shall be
effective immediately unless a date certain is specified for it to take effect,
in which event it shall be effective upon such date, and acceptance of any
resignation shall not be necessary to make it effective, irrespective of whether
the resignation is tendered subject to such acceptance.
SECTION 5.5 CHIEF EXECUTIVE OFFICER. The Chief Executive Officer of
the Corporation, shall (in the absence of the Chairman of the Board, if one be
elected) preside at meetings of the Stockholders and Board of Directors; shall
be EX OFFICIO a member of all standing committees, shall have general and active
management of business of the corporation; shall implement the general
directives, plans and policies formulated by the Board of Directors; and shall
further have such duties, responsibilities and authorities as may be assigned to
him by the Board of Directors. He may sign, with any other proper officer, any
deeds, bonds, mortgages,
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contracts and other documents which the Board of Directors has authorized to be
executed, except where required by law to be otherwise signed and executed and
except where the signing and execution thereof shall be expressly delegated by
the Board of Directors or these Bylaws, to some other officer or agent of the
Corporation. In the absence of the Chief Executive Officer, his duties shall be
performed and his authority may be exercised by the President or a Vice
President of the Corporation as may have been designated by the Chief Executive
Officer with the right reserved to the Board of Directors to designate or
supersede any designation so made.
SECTION 5.6 PRESIDENT(S) AND VICE PRESIDENTS. The President(s) and
the several Vice Presidents shall have such powers and duties as may be assigned
to them by these Bylaws and as may from time to time be assigned to them by the
Board of Directors or the Chief Executive Officer and may sign, with any other
proper officer, certificates for shares of the Corporation.
SECTION 5.7 SECRETARY. The Secretary, if available, shall attend all
meetings of the Board of Directors and all meetings of the Stockholders and
record the proceedings of the meetings in a book to be kept for that purpose and
shall perform like duties for any committee of the Board of Directors as shall
designate him to serve. He shall give, or cause to be given, notice of all
meetings of the Stockholders and meetings of the Board of Directors and
committees thereof and shall perform such other duties incident to the office of
secretary or as may be prescribed by the Board of Directors or the Chief
Executive Officer, under whose supervision he shall be. He shall have custody of
the corporate seal of the Corporation and he, or any Assistant Secretary, or any
other person whom the Board of Directors may designate, shall have authority to
affix the same to any instrument requiring it, and when so affixed it may be
attested by his signature or by the signature of any Assistant Secretary or by
the signature of such other person so affixing such seal.
SECTION 5.8 ASSISTANT SECRETARIES. Each Assistant Secretary shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as may be assigned to him by the Board of Directors, the
Chief Executive Officer or the Secretary. The Assistant Secretary or such other
person as may be designated by the Chief Executive Officer shall exercise the
powers of the Secretary during that officer's absence or inability to act.
SECTION 5.9 TREASURER. The Treasurer shall have the custody of and
be responsible for the corporate funds and securities, shall keep full and
accurate accounts of
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receipts and disbursements in the books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and shall
render to the Chief Executive Officer and the Board of Directors, at its regular
meetings, or when the Board of Directors so requires, an account of all his
transactions as Treasurer and of the financial condition of the Corporation and
he shall perform all other duties incident to the position of Treasurer or as
may be prescribed by the Board of Directors or the Chief Executive Officer. If
required by the Board of. Directors, he shall give the Corporation a bond in
such sum and with such surety or sureties as shall be satisfactory to the Board
of Directors for the faithful performance of the duties of his office and for
the restoration to the Corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the Corporation.
SECTION 5.10 ASSISTANT TREASURERS. Each Assistant Treasurer shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as may be assigned to him by the Board of Directors, the
Chief Executive Officer or the Treasurer. The Assistant Treasurer or such other
person designated by the Chief Executive Officer shall exercise the power of the
Treasurer during that officer's absence or inability to act.
SECTION 5.11 SUBORDINATE OFFICERS. The Board of Directors may (a)
appoint such other subordinate officers and agents as it shall deem necessary
who shall hold their offices for such terms, have such authority and perform
such duties as the Board of Directors may from time to time determine, or (b)
delegate to any committee or officer the power to appoint any such subordinate
officers or agents.
SECTION 5.12 SALARIES AND COMPENSATION. The salary or other
compensation of officers shall be fixed from time to time by the Board of
Directors. The Board of Directors may delegate to any committee or officer the
power to fix from time to time the salary or other compensation of subordinate
officers and agents appointed in accordance with the provisions of Section 5.12.
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ARTICLE VI
INDEMNIFICATION
SECTION 6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS. (a) The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Corporation) by reason of the fact that such
person is or was, at any time, prior to or during which this Article VI is in
effect, a director, officer, employee or agent of the Corporation, or is or was,
at any time prior to or during which this Article VI is in effect, serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, other enterprise or
employee benefit plan against reasonable expenses (including attorneys' fees),
judgments, fines, penalties, amounts paid in settlement and other liabilities
actually and reasonably incurred by such person in connection with such action,
suit or proceeding if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that such person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(b) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that such person is or was, at any
time prior to or during which this Article VI is in effect, a director, officer,
employee or agent of the Corporation, or is or was, at any time prior to or
during which this Article VI is in effect, serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees), actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation; provided,
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that no indemnification shall be made under this sub-section (b) in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the Corporation unless and only to the extent that the Delaware
Court of Chancery, or other court of appropriate jurisdiction, shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity of such expenses which the Delaware Court of Chancery, or other court
of appropriate jurisdiction, shall deem proper.
(c) Any indemnification under sub-sections (a) or (b) (unless
ordered by the Delaware Court of Chancery or other court of appropriate
jurisdiction) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of such person is proper
in the circumstances because he has met the applicable standard of conduct set
forth in sub-sections (a) and (b). Such determination shall be made (1) by the
Board of Directors by a majority vote of a quorum consisting of directors not
parties such action, suit or proceeding; or (2) if such a quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel, in written opinion, selected by the Board
of Directors; or (3) by the Stockholders. In the event a determination is made
under this sub-section (c) that the director, officer, employee or agent has met
the applicable standard of conduct as to some matters but not as to others,
amounts to be indemnified may be reasonably prorated.
(d) Expenses incurred by a person who is or was a director or
officer of the Corporation in appearing at, participating in or defending any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, shall be paid by the Corporation at
reasonable intervals in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized by this Article VI.
(e) It is the intention of the Corporation to indemnify the persons
referred to in this Article VI to the fullest extent permitted by law and with
respect to any action, suit or proceeding arising from events which occur at any
time prior to or during which this Article VI is in effect. The indemnification
and advancement of expenses provided by this Article VI shall not be deemed
exclusive of any other rights to which those seeking indemnification or
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advancement of expenses may be or become entitled under any law, the Certificate
of Incorporation, these Bylaws, agreement, the vote of Stockholders or
disinterested directors or otherwise, or under any policy or policies of
insurance purchased and maintained by the Corporation on behalf of any such
person, both as to action in his official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such person.
(f) The indemnification provided by this Article VI shall be
subject to all valid and applicable laws, and in the event this Article VI or
any of the provisions hereof or the indemnification contemplated hereby are
found to be inconsistent with or contrary to any such valid laws, the latter
shall be deemed to control and this Article VI shall be regarded as modified
accordingly, and, as so modified, to continue in full force and effect.
ARTICLE VII
CAPITAL STOCK
SECTION 7.1 CERTIFICATES OF STOCK. Certificates of stock shall be
issued to each Stockholder certifying the number of shares owned by him in the
Corporation and shall be in a form not inconsistent with the Certificate of
Incorporation and as approved by the Board of Directors. The certificates shall
be signed by the Chairman of the Board, the President or a Vice President and by
the Secretary or an Assistant Secretary, or the Treasurer or an Assistant
Treasurer and may be sealed with the seal of the Corporation or a facsimile
thereof. Any or all of the signatures on the certificate may be a facsimile. In
case any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
If the Corporation shall be authorized to issue more than one (1)
class of stock or more than one (1) series of any class, the powers,
designations, preferences and relative, participating, optional or other special
rights of each class or stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights shall be set forth
in full or summarized on the face or back of the certificate which the
Corporation shall issue to
17
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represent such class or series of stock, provided that, except as otherwise
provided by statute, in lieu of the foregoing requirements, there may be set
forth on the face or back of the certificate which the Corporation shall issue
to represent such class or series of stock, a statement that the Corporation
will furnish without charge to each Stockholder who so requests the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
SECTION 7.2 LOST CERTIFICATES. The Board of Directors may direct a
new certificate to be issued in place of any certificate theretofore issued by
the Corporation alleged to have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the owner of such certificate, or his legal
representative. When authorizing the issuance of a new certificate, the Board of
Directors may in its discretion, as a condition precedent to the issuance
thereof, require the owner, or his legal representative, to give a bond in such
form and substance with such surety as it may direct, to indemnify the
Corporation against any claim that may be made on account of the alleged loss,
theft or destruction of such certificate or the issuance of such new
certificate.
SECTION 7.3 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD
FOR CERTAIN PURPOSES. (a) In order that the Corporation may determine the
Stockholders entitled to receive payment of any dividend or other distribution
or allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of capital stock or for the purpose of any other
lawful action, the Board of Directors may fix, in advance, a record date, which
shall not be more than sixty (60) days prior to the date of payment of such
dividend or other distribution or allotment of such rights or the date when any
such rights in respect of any change, conversion or exchange of stock may be
exercised or the date of such other action. In such a case, only Stockholders of
record on the date so fixed shall be entitled to receive any such dividend or
other distribution or allotment of rights or to exercise such rights or for any
other purpose, as the case may be, notwithstanding any transfer of any stock on
the books of the Corporation after any such record date fixed as aforesaid.
(b) If no record date is fixed, the record date for determining
Stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.
18
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SECTION 7.4 DIVIDENDS. Subject to the provisions of the Certificate
of Incorporation, if any, and except as otherwise provided by law, the directors
may declare dividends upon the capital stock of the Corporation as and when they
deem it to be expedient. Such dividends may be paid in cash, in property or in
shares of the Corporation's capital stock. Before declaring any dividend there
may be set apart out of the funds of the Corporation available for dividends,
such sum or sums as the directors from time to time in their discretion think
proper for working capital or as a reserve fund to meet contingencies or for
equalizing dividends, or for such other purposes as the directors shall think
conducive to the interests of the Corporation and the directors may modify or
abolish any such reserve in the manner in which it was created.
SECTION 7.5 REGISTERED STOCKHOLDERS. Except as expressly provided by
law, the Certificate of Incorporation and these Bylaws, the Corporation shall be
entitled to treat registered Stockholders as the only holders and owners in fact
of the shares standing in their respective names and the Corporation shall not
be bound to recognize any equitable or other claim to or interest in such shares
on the part of any other person, regardless of whether it shall have express or
other notice thereof.
SECTION 7.6 TRANSFER OF STOCK. Transfers of shares of the capital
stock of the Corporation shall be made only on the books of the Corporation by
the registered owners thereof, or by their legal representatives or their duly
authorized attorneys. Upon any such transfers the old certificates shall be
surrendered to the Corporation by the delivery thereof to the person in charge
of the stock transfer books and ledgers, by whom they shall be cancelled and new
certificates shall be issued.
19
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ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 8.1 CORPORATE SEAL. If one be adopted, the corporate seal
shall have inscribed thereon the name of the Corporation and shall be in such
form as may be approved by the Board of Directors. Said seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any manner
reproduced.
SECTION 8.2 FISCAL YEAR. The fiscal year of the Corporation shall
be fixed by resolution of the Board of Directors.
SECTION 8.3 CHECKS, DRAFTS, NOTES. All checks, drafts or other
orders for the payment of money, notes or other evidences of indebtedness issued
in the name of the Corporation shall be signed by such officer or officers,
agent or agents of the Corporation, and in such manner as shall from time to
time be determined by resolution (whether general or special) of the Board of
Directors or may be prescribed by any officer or officers, or any officer and
agent jointly, thereunto duly authorized by the Board of Directors.
SECTION 8.4 NOTICE AND WAIVER OF NOTICE. Whenever notice is required
to be given to any director or Stockholder under the provisions of applicable
law, the Certificate of Incorporation or of these Bylaws it shall not be
construed to only mean personal notice, rather, such notice may also be given in
writing, by mail, addressed to such director or Stockholder at his address as it
appears on the records of the Corporation, with postage thereon prepaid (unless
prior to the mailing of such notice he shall have filed with the Secretary of
the Corporation a written request that notices intended for him be mailed to
some other address in which case, such notice shall be mailed to the address
designated in the request), and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail. Notice to
directors may also be given by telegram, cable or other form of recorded
communication, by personal delivery or by telephone. Whenever notice is required
to be given under any provision of law, the Certificate of Incorporation or
these Bylaws, a waiver thereof in writing, by telegraph, cable or other form of
recorded communication, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends a meeting for the express
purpose of objecting at the beginning
20
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of the meeting, to the transaction of any business on the ground that the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
Stockholders, directors, or members of a committee of directors need be
specified in any written waiver of notice unless so required by the Certificate
of Incorporation or these Bylaws.
SECTION 8.5 EXAMINATION OF BOOKS AND RECORDS. The Board of Directors
shall determine from time to time whether, and if allowed, when and under what
conditions and regulations the accounts and books of the Corporation (except
such as may by statute be specifically opened to inspection) or any of them
shall be open to inspection by the Stockholders, and the Stockholders rights in
this respect are and shall be restricted and limited accordingly.
SECTION 8.6 VOTING UPON SHARES HELD BY THE CORPORATION. Unless
otherwise provided by law or by the Board of Directors, the Chairman of the
Board of Directors, if one shall be elected, or the President, if a Chairman of
the Board of Directors shall not be elected, acting on behalf of the
Corporation, shall have full power and authority to attend and to act and to
vote at any meeting of Stockholders of any corporation in which the Corporation
may hold stock and, at any such meeting, shall possess and may exercise any and
all of the rights and powers incident to the ownership of such stock which, as
the owner thereof, the Corporation might have possessed and exercised, if
present. The Board of Directors by resolution from time to time may confer like
powers upon any person or persons.
ARTICLE IX
AMENDMENTS
SECTION 9.1 AMENDMENT. Except as otherwise expressly provided in the
Certificate of Incorporation, the directors, by the affirmative vote of a
majority of the entire Board of Directors and without the assent or vote of the
Stockholders, may at any meeting, provided the substance of the proposed
amendment shall have been stated in the notice of the meeting, make, repeal,
alter, amend or rescind any of these Bylaws. The Stockholders shall not make,
repeal, alter, amend or rescind any of the provisions of these Bylaws except by
the holders of not less than 80% of the total voting power of all shares of
stock of the Corporation entitled to vote in the election of directors,
considered for purposes of this Article IX as one class.
21
EXHIBIT 10(A)
CREDIT AGREEMENT
DATED AS OF MAY 5, 1999
AMONG
SANTA FE SNYDER CORPORATION,
THE BANKS SIGNATORY HERETO
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
AS ADMINISTRATIVE AGENT
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, AS SYNDICATION AGENT
WELLS FARGO BANK (TEXAS), N.A., AS DOCUMENTATION AGENT
BANK ONE, TEXAS, N.A., AS MANAGING AGENT
ABN AMRO BANK N.V.
CREDIT LYONNAIS NEW YORK BRANCH
SALOMON BROTHERS HOLDING COMPANY INC.
AS CO-AGENTS
<PAGE>
TABLE OF CONTENTS
Section 1. DEFINITIONS AND ACCOUNTING MATTERS...............................1
1.1. CERTAIN DEFINED TERMS............................................1
1.2. ACCOUNTING TERMS AND DETERMINATIONS.............................21
1.3. TYPES OF LOANS..................................................22
Section 2. COMMITMENTS.....................................................22
2.1. LOANS...........................................................22
2.2. LETTERS OF CREDIT...............................................23
2.3. TERMINATIONS, REDUCTIONS AND CHANGES OF COMMITMENTS.............26
2.4. FEES............................................................26
2.5. AFFILIATES; LENDING OFFICES.....................................26
2.6. SEVERAL OBLIGATIONS.............................................27
2.7. NOTES...........................................................27
2.8. USE OF PROCEEDS.................................................27
2.9. INCREASE OF COMMITMENTS.........................................28
2.10 CHAPTER 346 DOES NOT APPLY......................................28
Section 3. BORROWINGS AND PREPAYMENTS......................................29
3.1. BORROWINGS......................................................29
3.2. PREPAYMENTS.....................................................29
Section 4. PAYMENTS OF PRINCIPAL AND INTEREST..............................29
4.1. REPAYMENT OF LOANS AND REIMBURSEMENT OBLIGATIONS................29
4.2. INTEREST........................................................30
4.3. SELECTION OF INTEREST RATES.....................................30
Section 5. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS, ETC.................31
5.1. PAYMENTS........................................................31
5.2. PRO RATA TREATMENT..............................................31
5.3. COMPUTATIONS....................................................32
5.4. MINIMUM AND MAXIMUM AMOUNTS.....................................32
5.5. CERTAIN ACTIONS, NOTICES, ETC...................................32
5.6. NON-RECEIPT OF FUNDS BY THE AGENT...............................33
5.7. SHARING OF PAYMENTS, ETC........................................34
Section 6. YIELD PROTECTION AND ILLEGALITY.................................35
6.1. ADDITIONAL COSTS................................................35
6.2. LIMITATION ON TYPES OF LOANS....................................37
6.3. ILLEGALITY......................................................37
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6.4. SUBSTITUTE ALTERNATE BASE RATE LOANS............................38
6.5. COMPENSATION....................................................38
6.6. ADDITIONAL COSTS IN RESPECT OF LETTERS OF CREDIT................39
6.7. CAPITAL ADEQUACY................................................40
Section 7. CONDITIONS PRECEDENT............................................42
7.1. INITIAL CONDITIONS PRECEDENT....................................42
7.2. ALL LOANS AND LETTERS OF CREDIT.................................44
7.3. CONVERSIONS AND CONTINUATIONS OF EURODOLLAR LOANS...............45
Section 8. REPRESENTATIONS AND WARRANTIES..................................45
8.1. CORPORATE EXISTENCE.............................................45
8.2. INFORMATION.....................................................45
8.3. LITIGATION; COMPLIANCE..........................................46
8.4. NO BREACH.......................................................47
8.5. NECESSARY ACTION................................................47
8.6. APPROVALS.......................................................47
8.7. REGULATION U....................................................47
8.8. ERISA...........................................................48
8.9. TAXES...........................................................48
8.10. SUBSIDIARIES....................................................48
8.11. INVESTMENT COMPANY ACT..........................................48
8.12. PUBLIC UTILITY HOLDING COMPANY ACT; FEDERAL POWER ACT...........48
8.13. ENVIRONMENTAL MATTERS...........................................48
8.14. TITLE...........................................................49
8.15. YEAR 2000 COMPLIANCE............................................50
Section 9. COVENANTS.......................................................50
9.1. FINANCIAL STATEMENTS AND CERTIFICATES...........................50
9.2. INSPECTION OF PROPERTY..........................................53
9.3. COMPLIANCE WITH ENVIRONMENTAL LAWS..............................53
9.4. PAYMENT OF TAXES................................................54
9.5. MAINTENANCE OF INSURANCE........................................54
9.6. NET WORTH.......................................................54
9.7. TOTAL DEBT TO EBITDAX...........................................54
9.8 RESTRICTED PAYMENTS.............................................54
9.9. LIENS...........................................................54
9.10. FUNDAMENTAL CHANGES.............................................55
9.11 ASSET SALES.....................................................56
9.12 INVESTMENTS.....................................................57
9.13. INDEBTEDNESS AND GUARANTEES OF INDEBTEDNESS BY RESTRICTED
SUBSIDIARIES....................................................57
9.14 SALES AND LEASEBACKS............................................58
9.15. TRANSACTIONS WITH AFFILIATES....................................58
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9.16 RESTRICTIVE AGREEMENTS..........................................58
9.17. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES........59
9.18. YEAR 2000 COMPLIANCE............................................59
Section 10. DEFAULTS........................................................60
10.1. EVENTS OF DEFAULT...............................................60
Section 11. THE AGENT.......................................................63
11.1. APPOINTMENT, POWERS AND IMMUNITIES..............................63
11.2. RELIANCE BY AGENT...............................................63
11.3. DEFAULTS........................................................63
11.4. RIGHTS AS A BANK................................................64
11.5. INDEMNIFICATION.................................................64
11.6. NON-RELIANCE ON THE AGENT AND OTHER BANKS.......................65
11.7. FAILURE TO ACT..................................................65
11.8. RESIGNATION OR REMOVAL OF THE AGENT.............................65
Section 12. MISCELLANEOUS...................................................66
12.1. WAIVER..........................................................66
12.2. NOTICES.........................................................66
12.3. EXPENSES........................................................66
12.4. INDEMNIFICATION.................................................67
12.5. AMENDMENTS, ETC.................................................68
12.6. SUCCESSORS AND ASSIGNS..........................................69
12.7. SURVIVAL; TERMINATION; REINSTATEMENT............................71
12.8. LIMITATION OF INTEREST..........................................72
12.9. CAPTIONS........................................................73
12.10. COUNTERPARTS..................................................73
12.11. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL.........................................................73
12.12. CONFIDENTIALITY...............................................74
12.13. ENTIRE AGREEMENT..............................................74
12.14. CONSTRUCTION..................................................74
12.15. SEVERABILITY..................................................74
<PAGE>
PRICING SCHEDULE
EXHIBITS:
A - Form of Note
B - Form of Subsidiary Guarantee
C - Request for Extension of Credit
D - Form of Assignment Agreement
E - Form of Application
F - Form of Rate Designation Notice
SCHEDULES:
I - Restricted and Unrestricted Subsidiaries
II - Opinion of Andrews & Kurth L.L.P.
III - Opinion of David L. Hicks
IV - Subordination Provisions
<PAGE>
CREDIT AGREEMENT
This Credit Agreement (as amended, modified, supplemented or restated from
time to time, this "AGREEMENT") dated as of May 5, 1999, is by and among SANTA
FE SNYDER CORPORATION (the "COMPANY"), a Delaware corporation; each of the
financial institutions which is or may from time to time become a party hereto
(individually a "BANK" and collectively the "BANKS"); BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as Syndication Agent; WELLS FARGO BANK (TEXAS),
N.A., as Documentation Agent; BANK ONE, TEXAS, N.A., as Managing Agent; ABN AMRO
BANK N.V., CREDIT LYONNAIS NEW YORK BRANCH and SALOMON BROTHERS HOLDING COMPANY
INC. as Co-Agents; and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a national
banking association, as Administrative Agent for the Banks (in such capacity,
together with any other Person who becomes the Agent pursuant to SECTION 11.8,
the "AGENT").
The parties agree as follows:
Section 1. DEFINITIONS AND ACCOUNTING MATTERS.
1.1. CERTAIN DEFINED TERMS. As used in this Agreement or the other Credit
Documents, the following terms shall have the following meanings:
"ADDITIONAL COSTS" shall have the meaning ascribed to such term in
SECTION 6.1.
"AFFILIATE" shall mean, as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person; and with respect to an individual, "AFFILIATE" shall also mean any
individual related to such individual by blood or marriage. As used in this
definition, "CONTROLS", "CONTROLLED BY" and "UNDER COMMON CONTROL WITH" shall
mean the possession, directly or indirectly, of power to direct or cause the
direction of the management or policies (whether through ownership of securities
or partnership or other ownership interests, by contract or otherwise).
"AGENT" shall have the meaning ascribed to such term in the introduction.
"AGGREGATE COMMITMENT" shall mean, at any time, the total of all
Commitments at such time.
"AGREEMENT" shall have the meaning ascribed to such term in the
introduction.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next higher 1/100%) equal to the greater of (a)
the Prime Rate in effect on such day or (b) the Fed Funds Rate in effect for
such day plus 1/2%. Any change in the Alternate Base Rate due to a change in the
Fed Funds Rate or the Prime Rate shall be effective on the effective date of
such change in the Fed Funds Rate or the Prime Rate. If for any reason the Agent
shall have
<PAGE>
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Fed Funds Rate for any reason, including the
inability or failure of the Agent to obtain sufficient bids or publications in
accordance with the terms hereof, the Alternate Base Rate shall be the Prime
Rate until the circumstances giving rise to such inability no longer exist.
"ALTERNATE BASE RATE LOANS" shall mean Loans which bear interest at a rate
based upon the Alternate Base Rate.
"APPLICABLE ENVIRONMENTAL LAWS" shall mean all applicable environmental or
pollution-control Legal Requirements governing, without limitation, wastewater
effluent, solid and hazardous waste or substances, and air emissions, together
with any applicable requirements for conducting, on a timely basis, reporting,
record-keeping, periodic tests and monitoring for contamination of ground water,
surface water, air and land and for biological toxicity of the aforesaid,
including, without limitation, the Resource Conservation and Recovery Act of
1976, The Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (as amended by the Superfund Amendments and Reauthorization Act), the
Emergency Planning and Community Right-to-Know Act, the Toxic Substances Control
Act, the Solid Waste Disposal Act, the Safe Drinking Water Act, the Hazardous
Materials Transportation Act, the Clean Air Act, the Clean Water Act, the Oil
Pollution Act, and the Federal Insecticide, Fungicide and Rodenticide Act, in
each case as amended from time to time.
"APPLICABLE LENDING OFFICE" shall mean, for each Bank and for each Type of
Loan, the lending office of such Bank (or of an Affiliate of such Bank)
designated for such Type of Loan below its name on the signature pages hereof or
such other office of such Bank (or of an Affiliate of such Bank) as such Bank
may from time to time specify to the Agent and the Company as the office by
which its Loans of such Type are to be made and/or issued and maintained.
"APPLICABLE MARGIN" shall mean (a) on any day during any Margin Period,
with respect to any Eurodollar Loan or any Alternate Base Rate Loan, the percent
per annum determined for each day during such Margin Period according to the
Pricing Schedule; (b) on any day during any Margin Period, with respect to any
Letter of Credit, the percent per annum determined for each day during such
Margin Period according to the Pricing Schedule; (c) if no Margin Period is in
effect, the rate determined from time to time according to SECTION 4.3(B); and
(d) on each day when the Company's senior or corporate (including implied)
unsecured and unenhanced long-term debt for borrowed money ("INDEX DEBT") is
rated by neither S&P nor Moody's, the percent per annum determined for such day
as if such debt were rated BB-/Ba3. For purposes of the foregoing, (x) if only
one of Moody's or S&P shall have in effect a rating for Index Debt, the Company
and the Banks will negotiate in good faith to agree upon another rating agency
to be substituted by an amendment to this Agreement for the rating agency which
shall not have a rating in effect, and in the absence of such amendment the
Applicable Margin will be determined by reference to the available rating; (y)
if the ratings established by Moody's and S&P shall fall within different
categories, the Applicable Margin shall be determined by reference to the higher
rating (for example, if the rating from S&P is BBB and the rating from Moody's
is Baa3, the Applicable Margin shall be determined by
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reference to the rating issued by S&P); and (z) if any rating established by
Moody's or S&P shall be changed (other than as a result of a change in the
rating system of either Moody's or S&P), such change shall be effective as of
the date on which change is first announced by the rating agency making such
change. Each change in Applicable Margin shall apply during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If the rating
system of either Moody's or S&P shall change, the Company and the Banks shall
negotiate in good faith to amend the references to specific ratings in this
definition to reflect such changed rating system. If both Moody's and S&P shall
cease to be in the business of rating corporate debt obligations, the Company
and the Banks shall negotiate in good faith to agree upon a substitute rating
agency and to amend the references to specific ratings in this definition to
reflect the ratings used by such substitute rating agency.
"APPLICATION" shall mean an application for a letter of credit
substantially in the form of EXHIBIT E.
"ASSET SALE" shall mean any sale, issuance, conveyance, transfer, lease or
other disposition to any Person other than the Company or any Wholly-Owned
Restricted Subsidiary (including any by way of merger or consolidation)
(collectively, a "TRANSFER"), directly or indirectly, in one or a series of
related transactions, of (a) any Capital Stock of any Restricted Subsidiary held
by the Company or any Restricted Subsidiary (including the issuance by a
Restricted Subsidiary of additional Capital Stock), or (b) any Properties of the
Company or any Restricted Subsidiary (including Production Payments), OTHER THAN
(i) a disposition or exchange of Hydrocarbons or other mineral products (other
than Production Payments), inventory, accounts receivable, cash, Cash
Equivalents or other Property in the ordinary course of business, (ii) an
exchange of Hydrocarbon Properties outside the ordinary course of business,
PROVIDED that the aggregate fair market value of the Hydrocarbon Properties so
Transferred in any one transaction or series of related transactions shall not
exceed $150,000,000; (iii) any lease, abandonment, disposition, relinquishment
or farm-out of any oil and gas Property in the ordinary course of business; or
(iv) the liquidation of Property received in settlement of debts owing to the
Company or any Restricted Subsidiary as a result of foreclosure, perfection or
enforcement of any Lien or debt, which debts were owing to the Company or any
Restricted Subsidiary in the ordinary course of business of the Company or such
Restricted Subsidiary. For the purposes of this definition, the term "Asset
Sale" shall not include (i) any Transfer of Properties which is governed by, and
made in accordance with, the provisions of SECTION 9.10 or (ii) any Transfer of
the securities, the Property or assets of any Unrestricted Subsidiary.
"ASSIGNMENT AGREEMENT" shall mean an Assignment and Acceptance Agreement
substantially in the form of EXHIBIT D.
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback transaction shall
mean, at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
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"BANKS" shall have the meaning ascribed to such term in the introduction.
"BOARD" shall mean the Board of Governors of the Federal Reserve System of
the United States or any entity succeeding to all or part of its functions.
"BUSINESS DAY" shall mean (i) any day other than a day on which commercial
banks are authorized or required to close in Houston, Texas, in New York, New
York, or both, and (ii) where such term is used in the definition of "QUARTERLY
DATE" or, if such day relates to a borrowing of, a payment or prepayment of
principal of or interest on, or an Interest Period for, a Eurodollar Loan or a
notice by the Company with respect to any such borrowing, payment, prepayment or
Interest Period, a day which is also a day on which dealings in Dollar deposits
are carried out in the relevant Eurodollar interbank market.
"BUSINESS ENTITY" shall mean a corporation, partnership, limited
partnership, limited liability company, joint stock association, business trust
or other separate business entity.
"CAPITAL STOCK" shall mean, with respect to any Person, any and all
shares, interests, participations, rights in or other equivalents in the equity
interests (however designated) in such Person, and any option or warrant for or
any right to purchase or subscribe for any equity security of such Person or any
security convertible into or exchangeable for any equity security of such Person
or convertible into or exchangeable for any right to purchase or subscribe for
any equity security of such Person.
"CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which,
under GAAP, is or will be required to be capitalized on the books of the Company
or any Restricted Subsidiary, taken at the amount thereof accounted for as
indebtedness (net of interest expense) in accordance with GAAP.
"CASH EQUIVALENTS" shall mean (a) any evidence of indebtedness with a
maturity of 365 days or less issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(PROVIDED that the full faith and credit of the United States of America is
pledged in support thereof); (b) demand and time deposits and certificates of
deposit or acceptances with a maturity of 365 days or less of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $500,000,000; (c)
commercial paper with a maturity of 365 days or less issued by a corporation
that is not an Affiliate of the Company and is organized under the laws of any
state of the United States or the District of Columbia and rated at least A-1 by
S&P or at least P-1 by Moody's; (d) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in CLAUSE
(A) above entered into with any commercial bank meeting the specifications of
CLAUSE (B) above; (e) overnight bank deposits and bankers' acceptances at any
commercial bank meeting the qualifications specified in CLAUSE (B) above; (f)
deposits available for withdrawal on demand with any commercial bank not meeting
the qualifications specified in CLAUSE (B) above but which is
4
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organized under the laws of any country in which the Company or any Restricted
Subsidiary maintains an office or is engaged in the Oil and Gas Business,
PROVIDED that (i) all such deposits are required to be made in such accounts in
the ordinary course of business, (ii) such deposits do not at any one time
exceed $5,000,000 in the aggregate and (iii) no funds so deposited remain on
deposit in such bank for more than 30 days; (g) deposits available for
withdrawal on demand with any commercial bank not meeting the qualifications
specified in CLAUSE (B) above but which is a lending bank under any of the
Company's or any Restricted Subsidiary's credit facilities, PROVIDED all such
deposits do not exceed $5,000,000 in the aggregate at any one time; and (h)
investments in money market funds substantially all of whose assets comprise
securities of the types described in CLAUSES (A) THROUGH (E).
"CHANGE OF CONTROL" shall mean the occurrence of any of the following
events: (a) 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, herein called the
"EXCHANGE ACT") is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of more than 50% of the total
voting power of the outstanding Voting Stock of the Company; (b) the Company is
merged with or into or consolidated with another Person and, immediately after
giving effect to the merger or consolidation, (i) less than 50% of the total
voting power of the outstanding Voting Stock of the surviving or resulting
Person is then "beneficially owned" (within the meaning of Rule 13d-3 under the
Exchange Act) in the aggregate by the stockholders of the Company immediately
prior to such merger or consolidation, and (ii) any "person" or "group" (as
defined in Section 13(d)(3) or 14(d)(2) of the Exchange Act) has become the
direct or indirect "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of more than 50% of the total voting power of the Voting Stock of
the surviving or resulting Person; (c) during any consecutive two-year period,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by such
Board of Directors or whose nomination for election by the stockholders of the
Company 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 the Company then in
office; or (d) the liquidation or dissolution of the Company.
"CHASE TEXAS" shall mean Chase Bank of Texas, National Association, in its
individual capacity.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, or any
successor statute, together with all publicly available written regulations,
rulings and interpretations thereof or thereunder by the Internal Revenue
Service or any entity succeeding to all or part of its functions.
"COMBINED GROUP" shall mean the Company and the Restricted Subsidiaries.
"COMMITMENT" shall mean, as to any Bank, the obligation, if any, of such
Bank to extend credit to the Company in the form of Loans and Letters of Credit
in an aggregate principal amount at any one time outstanding up to but not
exceeding the amount set forth opposite such Bank's name
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on the signature pages of this Agreement under the caption "Commitment" or in
its Assignment Agreement (as the same may be reduced from time to time or
terminated pursuant to SECTION 2.3, modified pursuant to SECTION 12.6 or
increased from time to time pursuant to this Agreement).
"COMMITMENT PERCENTAGE" shall mean, as to any Bank at any time, the
percentage equivalent of a fraction, the numerator of which is such Bank's
Commitment at such time and the denominator of which is the Aggregate Commitment
at such time.
"COMPANY" shall have the meaning ascribed to such term in the
introduction; PROVIDED, HOWEVER, that as used in SECTION 8 and the definitions
used therein, for periods before the Merger, "Company" shall mean each of Santa
Fe and Snyder.
"CONSOLIDATED NET EARNINGS" shall mean consolidated gross revenues
(including capital gains) of the Company and the Restricted Subsidiaries less
all operating and non-operating expenses of the Company and the Restricted
Subsidiaries including all charges of a proper character (including current and
deferred taxes on income, provision for taxes on unremitted foreign earnings
which are included in gross revenues, and current additions to reserves), but
not including in gross revenues any gains resulting from write-up of assets, any
equity of the Company or any Restricted Subsidiary in the unremitted earnings of
any Person which is not a Restricted Subsidiary, or any deferred credit
representing the excess of equity in any Restricted Subsidiary at the date of
acquisition over the cost of the investment in such Restricted Subsidiary; all
determined in accordance with GAAP; PROVIDED, that in computing Consolidated Net
Earnings there shall be excluded write-downs resulting from impairments of the
value of oil and gas assets.
"CONSOLIDATED NET WORTH" shall mean, at any date, the consolidated
stockholders' equity of the Company and the Restricted Subsidiaries MINUS (to
the extent included in the calculation of consolidated stockholders' equity) the
aggregate amount of Investments in Unrestricted Subsidiaries, all determined in
accordance with the last sentence of the definition of "Investment" and GAAP.
"CONSOLIDATED NET WORTH FLOOR ADJUSTMENT" shall mean an amount equal to,
on any day, the sum on such day of
(a) fifty percent (50%) of the Consolidated Net Earnings of the
Company and the Restricted Subsidiaries, to the extent positive, (i) for all
periods ending within a fiscal year, on a cumulative year-to-date basis for the
period beginning (x) for periods in 1999, May 1, 1999 and (y) for periods in
each succeeding fiscal year, January 1 of such fiscal year, and ending, in each
case, on the Quarterly Date then most recently ended, and (ii) for the year 1999
and for each of the Company's succeeding fiscal years, for such fiscal year,
with all fiscal years beginning with 1999 through the fiscal year ending
immediately prior to the fiscal year in which such day occurs being cumulated,
PLUS
(b) seventy-five percent (75%) of the net proceeds to the Company or
any
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Restricted Subsidiary of any issuance (after the date of this Agreement and
before such day) by the Company or any Restricted Subsidiary of any equity
security or any option or warrant for or any right to purchase or subscribe for
any equity security or any security convertible into or exchangeable for any
equity security or convertible into or exchangeable for any option or warrant
for or any right to purchase or subscribe for any equity security, MINUS
(c) aggregate write-downs resulting from impairments of the value of
oil and gas assets taken since May 1, 1999.
"CONTINUATION" shall have the meaning ascribed to such term in SECTION
4.3.
"CONVERSION" shall have the meaning ascribed to such term in SECTION 4.3.
"COVER" for Letter of Credit Liabilities shall be effected by paying to
the Agent immediately available funds in the amount of such Letter of Credit
Liabilities, such amount to be held by the Agent to secure such Letter of Credit
Liabilities until such time as such Letter of Credit Liabilities expire
according to their terms or become Letter of Credit Advances, whereupon the
Agent may use such funds to repay such Letter of Credit Advances.
"CREDIT DOCUMENTS" shall mean this Agreement, the Notes, all Subsidiary
Guarantees, all Applications, all Letters of Credit, the Notice of Entire
Agreement, and all instruments, certificates and agreements now or hereafter
executed or delivered to the Agent or any Bank pursuant to any of the foregoing.
"DEFAULT" shall mean an Event of Default or an event, circumstance or
condition which with notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"DOLLAR-DENOMINATED PRODUCTION PAYMENTS" shall mean production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"EBITDAX" shall mean, for any period, Consolidated Net Earnings for such
period (calculated, for purposes of this definition only, without taking into
account extraordinary items under GAAP or capital gains or capital losses), plus
the aggregate amounts deducted in determining Consolidated Net Earnings in
respect of (a) all provisions for any federal, state or other income taxes made
by the Company and the Restricted Subsidiaries during such period; (b) Fixed
Charges of the Company and the Restricted Subsidiaries during such period; (c)
depreciation, depletion and amortization charges of the Company and the
Restricted Subsidiaries for such period; (d) exploration expenses of the Company
and the Restricted Subsidiaries for such period; (e) dividends on preferred
stock of the Company; and (f) all other non-cash charges and non-recurring
charges with respect to the Company and the Restricted Subsidiaries for such
period, all determined in accordance with GAAP; PROVIDED, HOWEVER, that EBITDAX
shall mean, for any calculation, $67,600,000, $56,700,000, $48,600,000 and
$47,900,000 for the fiscal quarters ended June 30, 1998, September
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30, 1998, December 31, 1998 and March 31, 1999, respectively; PROVIDED FURTHER,
that on and after the Financial Statement Delivery Date for the fiscal quarter
ended June 30, 1999, EBITDAX for the fiscal quarter ended June 30, 1999, shall
be $23,300,000 plus EBITDAX (determined in accordance with the first clause of
this sentence) for the two months ended June 30, 1999; and PROVIDED FURTHER,
that, if since the beginning of any period for which EBITDAX is being
determined, the Company or any of its Restricted Subsidiaries has acquired or
disposed of assets in any transaction or series of related transactions in the
aggregate involving cash or other consideration in an amount equal to or greater
than $20,000,000, EBITDAX shall be calculated on a pro forma basis as if such
acquisition or disposition had occurred on the first day of such period.
"ELIGIBLE ASSIGNEE" shall mean (a) a commercial bank (or an affiliate of a
commercial bank) organized or licensed under the laws of the United States of
America, or a state thereof, and having total assets in excess of
$1,000,000,000, (b) a commercial bank organized under the laws of any other
country which is a member of the OECD, or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, PROVIDED that such
bank is acting through a branch or agency located in the country in which it is
organized or another country that also is a member of the OECD, and (c) a
finance company, insurance company, other financial institution or fund,
acceptable to the Agent and the Company, which is regularly engaged in making,
purchasing or investing in commercial loans and having total assets in excess of
$1,000,000,000.
"ENVIRONMENTAL CLAIM" shall mean any claim, demand, action, cause of
action, suit, judgment, governmental or private investigation or proceeding
relating to remediation or compliance with Applicable Environmental Laws, or any
proceeding or lien, whether threatened, sought, brought or imposed, that seeks
to recover costs, damages, punitive damages, expenses, fines, criminal
liability, judgments, response costs, investigative and monitoring costs,
abatement costs, attorney's fees, expert's fees or consultant's fees, or seeks
to impose liability regarding the Company or any of its Subsidiaries, or any of
their sites or Properties for violations of Applicable Environmental Laws or for
pollution, contamination, investigation, preservation, protection, remediation
or clean up of the air, surface water, ground water, soil or wetlands, or
otherwise in relation to the use, storage, generation, release, handling or
disposal of materials and substances that are regulated by or subject to
Applicable Environmental Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor statute, and all rules, regulations
and interpretations by the Internal Revenue Service or the Department of Labor,
or any entity succeeding to all or part of their respective functions.
"ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated) which is a member of a group of which the Company is a member and
which is under common control with the Company within the meaning of the
regulations under Section 414 of the Code.
"EURODOLLAR LOANS" shall mean Loans which bear interest at a rate based on
a rate referred to in the definition of "EURODOLLAR RATE".
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"EURODOLLAR RATE" shall mean, for any Interest Period for any Eurodollar
Loan, the rate per annum (rounded upwards, if necessary, to the nearest 1/100%)
determined by the Agent based upon rates quoted at approximately 10:00 a.m.
(local time in the relevant Eurodollar interbank market) (or as soon thereafter
as practicable) on the day two Business Days prior to the first day of such
Interest Period for the offering by Chase Texas to leading dealers in such
Eurodollar interbank market of Dollar deposits for delivery on the first day of
such Interest Period, in immediately available funds and having a term
comparable to such Interest Period and in an amount comparable to the principal
amount of the respective Eurodollar Loan to which such Interest Period relates.
Each determination of the Eurodollar Rate shall be conclusive and binding,
absent manifest error, and may be computed using any reasonable averaging and
attribution method.
"EVENT OF DEFAULT" shall have the meaning ascribed to such term in SECTION
10.
"EXISTING LETTER OF CREDIT" shall mean Chase Texas' Standby L/C No.
I-281274 for the account of Santa Fe Energy Resources of Malaysia, Ltd. in favor
of Bank of America NT&SA in an original face amount not to exceed $22,100,000,
as amended.
"EXISTING SANTA FE CREDIT FACILITY" shall mean the Credit Agreement dated
as of November 13, 1996, by and among Santa Fe; Chase Texas (formerly known as
Texas Commerce Bank National Association) as the Agent; and the financial
institutions from time to time party thereto, as amended to the date of this
Agreement.
"EXISTING SNYDER CREDIT FACILITY" shall mean the Fifth Restated Credit
Agreement dated as of June 30, 1994, by and among Snyder; NationsBank, N.A. as
the Agent; and the financial institutions from time to time party thereto, as
amended to the date of this Agreement.
"FACILITY FEES" shall have the meaning ascribed to such term in SECTION
2.4.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any entity
succeeding to any or all of its functions.
"FED FUNDS RATE" shall mean, for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) on the
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Agent from three
federal funds brokers of recognized standing selected by it.
"FINANCIAL STATEMENT DELIVERY DATE" shall mean the date on which the
quarterly or annual financial statements of the Company are
delivered pursuant to SECTION 9.1(A) or SECTION 9.1(B), as the
case may be.
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"FIXED CHARGES" shall mean (without duplication) for any period the sum of
interest expense in respect of all Total Debt of the Person for which the
determination is made, including imputed interest expense in respect of
Capitalized Lease Obligations.
"GAAP" shall mean, as to a particular Person, such accounting practice as,
in the opinion of the independent accountants of recognized national standing
regularly retained by such Person and acceptable to the Agent, conforms at the
time to United States generally accepted accounting principles, consistent with
those applied in the preparation of the financial statements referred to in
SECTION 8.2(A), together with changes with which the Company's independent
auditors concur and which are noted in the financial statements provided
pursuant to SECTION 9.1(B).
"GOVERNMENTAL AUTHORITY" shall mean any sovereign governmental authority,
the United States of America, any State of the United States and any political
subdivision of any of the foregoing, and any agency, instrumentality,
department, commission, board, bureau, central bank, authority, court or other
tribunal, in each case whether executive, legislative, judicial, regulatory or
administrative, having jurisdiction over the Company, any of the Company's
Subsidiaries, any of their respective Property, the Agent or any Bank.
"GUARANTEE" shall mean any act by which a Person assumes, guarantees,
endorses or otherwise incurs direct or contingent liability in connection with,
or agrees to purchase or otherwise acquire or otherwise assures a creditor
against loss in respect of, any indebtedness of any Person other than the
Company or any of its consolidated Subsidiaries.
"HIGHEST LAWFUL RATE" shall mean, on any day, the maximum nonusurious rate
of interest permitted for that day by whichever of applicable federal or Texas
law permits the higher interest rate, stated as a rate per annum. On each day,
if any, that applicable Texas law establishes the Highest Lawful Rate, the
Highest Lawful Rate shall be the "weekly ceiling" (as defined in ss.303 of the
Texas Finance Code and Chapter 1D of Title 79, Texas Rev. Civ. Stats. 1925, as
amended, respectively) for that day.
"HYDROCARBONS" shall mean crude oil, condensate, natural gas, natural gas
liquids and associated substances.
"INDEMNIFIED PERSON" shall mean the Agent (including the Agent in its
capacity as the Issuer), Chase Texas, each of the Banks, each Affiliate of any
such Person, and their respective directors, officers, employees, agents and
advisors.
"INTEREST PAYMENT DATE" shall mean with respect to any Eurodollar Loan or
Alternate Base Rate Loan, the last day of each Interest Period applicable
thereto; PROVIDED that in the case of a Eurodollar Loan with an Interest Period
of six, nine or 12 months, the Interest Payment Dates shall be the days that
would have been the Interest Payment Dates for such Loan had successive Interest
Periods of three months each been applicable to such Loan.
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"INTEREST PERIOD" shall mean:
(a) with respect to any Eurodollar Loan, the period commencing on (i) the
date such Loan is made or designated as, or the effective date of any Conversion
into, a Eurodollar Loan or (ii) in the case of a Continuation to a successive
Interest Period, the last day of the immediately preceding Interest Period, and
in each case ending on the numerically corresponding day in the first, second,
third or sixth (or, if and to the extent available to all Banks, the ninth or
twelfth) calendar month thereafter, as the Company may select as provided in
SECTION 4.3, except that each such Interest Period which commences 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 Alternate Base Rate Loan, the period commencing on
the date such Loan is made as, or converted into, an Alternate Base Rate Loan
and on each Quarterly Date thereafter and ending on each next succeeding
Quarterly Date or, if earlier, the date such Loan is converted into a Eurodollar
Loan;
PROVIDED that (x) 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, with
respect to Eurodollar Loans only, such next succeeding Business Day falls in the
next calendar month, in which case such Interest Period shall end on the next
preceding Business Day; and (y) no Interest Period may be selected for any Loan
that ends later than the Maturity Date. Interest shall accrue from and including
the first day of an Interest Period to but excluding the last day of such
Interest Period.
"INTEREST RATE PROTECTION OBLIGATIONS" shall mean the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements or arrangements designed to protect
against or manage such Person's and any of its Subsidiaries' exposure to
fluctuations in interest rates.
"INVESTMENT" shall mean, with respect to any Person, any direct or
indirect advance, loan, Guarantee of indebtedness or other extension of credit
or capital contribution to (by means of any transfer of cash or other Property
to others or any payment for Property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities (including derivatives and
including, without limitation, any interests in any partnership or joint
venture) or evidences of indebtedness issued by, any other Person, but in any
event shall include as an investment in any Person the amount of all Total Debt
owed to any member of the Combined Group by such Person, and all accounts
receivable from such Person which are not current assets or did not arise from
sales to such Person in the ordinary course of
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business.
"Investments" shall EXCLUDE, among other things, (i) extensions of trade credit
under a joint operating agreement or otherwise in the ordinary course of
business, workers' compensation, utility, lease and similar deposits and prepaid
expenses in the ordinary course of business, (ii) Interest Rate Protection
Obligations entered into in the ordinary course of business or as required by
any Total Debt incurred in compliance with SECTION 9.7 but only to the extent
that the stated aggregate notional amounts of such Interest Rate Protection
Obligations do not exceed 105% of the aggregate principal amount of such
indebtedness to which such Interest Rate Protection Obligations relate, (iii)
bonds, notes, debentures or other securities received as a result of Asset Sales
permitted under SECTION 9.11 and (iv) endorsements of negotiable instruments and
documents in the ordinary course of business. For purposes of this definition,
any capital contribution of assets by the Company or any Restricted Subsidiary
shall be valued at the fair market value of such assets at the time of such
contribution.
"ISSUER" shall mean the Agent in its capacity as the issuer of Letters of
Credit.
"LEGAL REQUIREMENT" shall mean any applicable law, statute, ordinance,
decree, requirement, order, judgment, rule, regulation (or official
interpretation by any Governmental Authority of any of the foregoing) of, and
the terms of any license or permit issued by, any Governmental Authority, in
each case as now or hereafter in effect.
"LETTER OF CREDIT" shall mean a letter of credit issued pursuant to
SECTION 2.2 and shall include the Existing Letter of Credit.
"LETTER OF CREDIT ADVANCES" shall mean all sums which are from time to
time paid by the Agent pursuant to Letters of Credit, or any of them, together
with all other sums, fees, reimbursements or other obligations which are due to
the Agent pursuant to the Letters of Credit, or any of them.
"LETTER OF CREDIT FEE" shall mean, with respect to any Letter of Credit, a
fee equal to, for each day during the term thereof, the product of (a) the
Applicable Margin for Letters of Credit in effect on such day multiplied by (b)
the amount available on such day for drawings under such Letter of Credit.
"LETTER OF CREDIT LIABILITIES" shall mean, at any time, the sum of (a) the
aggregate undrawn amount of all Letters of Credit outstanding at such time PLUS
(b) the aggregate unpaid amount of all Letter of Credit Advances for which the
Agent shall not have been reimbursed and which remain unpaid at such time.
"LIEN" shall mean any mortgage, pledge, security interest, collateral
assignment, hypothecation, encumbrance, lien or charge of any kind (including
any agreement to give any of the foregoing) and shall include conditional sale
and other title retention agreements, leases intended as security, and the
filing of, or agreement to give, any financing statement under the Uniform
Commercial Code of any jurisdiction or any other type of preferential
arrangement.
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"LOAN" shall mean a loan made pursuant to SECTION 2.1.
"MARGIN PERIOD" shall mean (a) the period commencing on the date of this
Agreement and ending on the earlier of (i) the first Financial Statement
Delivery Date and (ii) August 14, 1999, and (b) thereafter, each period
beginning on a Financial Statement Delivery Date and ending on the earlier of
(x) the next Financial Statement Delivery Date and (y) the date on which
financial statements are next required to be delivered pursuant to SECTION
9.1(A) OR (B).
"MATERIAL ADVERSE CHANGE" shall mean an occurrence of whatever nature
(including any adverse determination in any litigation, arbitration or
governmental investigation or proceeding), which after taking into account
actual insurance coverage and effective indemnification with respect to such
occurrence, (a) has a material adverse effect on the financial condition,
business, operations or Properties of the Company and its Restricted
Subsidiaries taken as a whole and (b) impairs in any material respect either (1)
the ability of the Company or any Subsidiary Guarantor to perform any of its
obligations under the Credit Documents or (2) the ability of the Agent and the
Banks to enforce any of such obligations or any of their rights and remedies
under or in connection with the Credit Documents.
"MATURITY DATE" shall mean the earlier of (a) the date the principal
amount then outstanding of and accrued and unpaid interest on the Loans, all
Letter of Credit Liabilities, all fees and all other amounts payable hereunder
and under the Notes become due and payable pursuant to SECTION 10.1 or (b) May
5, 2004.
"MERGER" shall mean the merger of Santa Fe and Snyder described in the
Merger Agreement.
"MERGER AGREEMENT" shall mean the Agreement and Plan of Merger dated as of
January 13, 1999, by and between Santa Fe and Snyder.
"MOODY'S" shall mean Moody's Investors Service, Inc.
"NOTES" shall have the meaning ascribed to such term in SECTION 2.7
"NOTICE OF ENTIRE AGREEMENT" shall mean that certain Notice of Entire
Agreement and Release of Claims of even date herewith among the Company, the
Subsidiary Guarantors, and the Agent.
"OBLIGATIONS" shall mean, as at any date of determination thereof, the sum
of (a) the aggregate principal amount of Loans outstanding on such date PLUS (b)
the aggregate outstanding amount of all Letter of Credit Liabilities on such
date, PLUS (c) all accrued and unpaid interest on the amounts described in
CLAUSES (A) OR (B) on such date, PLUS (d) all fees and other indebtedness of the
Company to the Banks or the Agent in connection with the Credit Documents on
such date.
"OECD" shall mean the Organization for Economic Cooperation and
Development (or any
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successor).
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of the
Company by its Chief Executive Officer, President, Chief Financial Officer or
Treasurer.
"OIL AND GAS BUSINESS" shall mean (a) the acquisition, exploration,
development, operation and disposition of interests in oil, gas and other
Hydrocarbon Properties, (b) the gathering, marketing, treating, processing,
storage, selling and transporting of any production from such interests or
Properties, (c) any business relating to or arising from exploration for or
development, production, treatment, processing, storage, transportation or
marketing of oil, gas, Hydrocarbons and other minerals and products produced in
association therewith, and (d) any activity necessary, appropriate or incidental
to the activities described in the foregoing CLAUSES (A) THROUGH (C).
"ORGANIZATIONAL DOCUMENTS" shall mean, with respect to a corporation, the
certificate of incorporation or articles of incorporation and bylaws of such
corporation; with respect to a partnership or a limited partnership, the
partnership agreement establishing such partnership; with respect to a limited
liability company, the regulations or limited liability company agreement of
such company; with respect to a joint venture, the joint venture agreement
establishing such joint venture; and with respect to a trust, the instrument
establishing such trust; in each case including any and all modifications
thereof as of the date of the Credit Document referring to such Organizational
Document.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED ENCUMBRANCES" shall mean:
(a) liens for taxes, assessments, levies or other governmental
charges not yet due and delinquent, and for taxes, assessments, levies or
other governmental charges already due, but the validity of which is being
contested by the Company in good faith by appropriate proceedings
diligently conducted for which reserves have been established in
accordance with GAAP;
(b) materialmen's, mechanics', repairmen's, employees', operators',
landlords' and other similar liens and charges incidental to the conduct
of the Company's business or the ownership of its Property which are not
incurred in connection with the borrowing of money or the obtaining of
advances or credit (other than advances or credit on open account,
includable in current liabilities, for goods and services in the ordinary
course of business and on terms and conditions which are customary in the
oil, gas and mineral exploration and development business) or the
Guaranteeing of the obligations of another Person, and which do not in the
aggregate materially detract from the value of the Property covered
thereby or materially impair the use thereof in the operation of the
Company's business;
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(c) royalties, overriding royalties, net profits interests,
production sharing interests, production payment interests, carried
interests and other burdens on production of a scope and nature customary
in the conduct of the Company's business;
(d) defects, imperfections and irregularities in title;
(e) liens, security interests, charges, claims and encumbrances that
arise under operating agreements or pooling and unitization designations,
declarations, orders and agreements and other similar agreements of a
scope and nature customary in the oil and gas industry;
(f) the terms of concessions, production sharing agreements,
operating agreements, assignments, farmout agreements, Hydrocarbon sales,
purchase, exchange and processing agreements, area-of-mutual-interest
agreements, gas balancing and deferred production agreements, plant
agreements, pipeline gathering and transportation agreements, injection,
repressuring and recycling agreements, salt water or other disposal
agreements, seismic or geophysical permits and agreements, and other
contracts, division orders and agreements of a scope and nature customary
in the oil and gas industry;
(g) the right of third parties under oil and gas leases to take
production in kind;
(h) all liens, charges, claims, encumbrances, contracts and other
matters consented to in writing from time to time by the Agent (with the
consent of the Required Banks);
(i) all rights to consent by, required notices to, and filings with
or other actions by governmental or tribal entities, if any, in connection
with the change of ownership or control of an interest in federal, state,
tribal or other foreign or domestic governmental oil and gas leases or
Properties, if the same are customarily obtained after such change of
ownership or control, but only insofar as such consents, notices, filings
and other actions are obtained within the time required under applicable
Legal Requirements;
(j) required third-party consents to assignments, to the extent they
could not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Change;
(k) liabilities for royalty suspense accounts, to the extent they
could not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Change; and
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(l) easements, rights-of-way and the like, incidental to the conduct
of the Company's business or the ownership of its Property which are not
incurred in connection with the borrowing of money or the obtaining of
advances or credit (other than advances or credit on open account,
includable in current liabilities, for goods and services in the ordinary
course of business and on terms and conditions which are customary in the
oil, gas and mineral exploration and development business) or the
Guaranteeing of the obligations of another Person, and which do not in the
aggregate materially detract from the value of the Property covered
thereby or materially impair the use thereof in the operation of the
Company's business;
PROVIDED that all Permitted Encumbrances shall not in the aggregate have a
material adverse effect on the financial condition, business, operations or
Properties of the Company and its Restricted Subsidiaries taken as a whole and
impair in any material respect either (1) the ability of the Company or any
Subsidiary Guarantor to perform any of its obligations under the Credit
Documents or (2) the ability of the Agent and the Banks to enforce any of such
obligations or any of their rights and remedies under or in connection with the
Credit Documents.
"PERMITTED INVESTMENTS" shall mean any of the following:
(a) Investments in Cash Equivalents;
(b) Investments in the Company or any of its Restricted
Subsidiaries;
(c) Investments by the Company or any of its Restricted Subsidiaries
in another Person, if as a result of such Investment (i) such other Person
becomes a Restricted Subsidiary or (ii) such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially
all of its Properties to, the Company or a Restricted Subsidiary;
(d) Investments and expenditures made in the ordinary course of, and
of a nature that is or shall have become customary in, the Oil and Gas
Business, including such Investments and expenditures in another Person,
in an Unrestricted Subsidiary or in a joint venture;
(e) entry into any hedging arrangements in the ordinary course of
business for the purpose of protecting the Company's or any Restricted
Subsidiary's production against fluctuations in oil or natural gas prices;
(f) entry into any currency exchange contract in the ordinary course
of business; and
(g) Investments in stock, obligations or securities received in
settlement of debts owing to the Company or a Restricted Subsidiary as a
result of bankruptcy or insolvency proceedings or upon the foreclosure,
perfection or enforcement of any Lien in favor of the
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Company or a Restricted Subsidiary, in each case as to debt owing to the
Company or a Restricted Subsidiary that arose in the ordinary course of
business of the Company or any such Restricted Subsidiary.
"PERSON" shall mean any individual, Business Entity, voluntary
association, trust, unincorporated organization, Governmental Authority or other
form of entity. The term "Person" shall not, however, mean or include an
arrangement that is not a separate legal entity, such as the legal arrangement
between two or more parties owning interests in the same Property or unit.
"PLAN" shall mean an employee benefit plan which is covered by ERISA which
is either (a) maintained by the Company or any ERISA Affiliate for employees of
the Company or such ERISA Affiliate or (b) a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which (i) the Company, (ii) any ERISA Affiliate
or (iii) any trade or business which was previously under common control with
the Company within the meaning of Section 414 of the Code (but only with respect
to such period of common control with the Company), has an obligation to make
contributions (or with respect to (iii) above, had an obligation to make
contributions during any portion of time that the limitations period under
Section 4301(f) of ERISA with respect to such obligation has not expired).
"POST-DEFAULT RATE" shall mean a rate per annum on each day equal to the
lesser of (a) the sum of (i) 2% per annum PLUS (ii) the Alternate Base Rate as
in effect for that day or (b) the Highest Lawful Rate for that day.
"PRICING SCHEDULE" shall mean the schedule of that name attached to this
Agreement. As used in the Pricing Schedule, "TOTAL DEBT" shall mean, on any day,
the Total Debt of the Company and the Restricted Subsidiaries at (a) for each
day during the Margin Period when the Margin Period is determined by CLAUSE (A)
of the definition of "Margin Period", May 1, 1999, and (b) for all subsequent
times, the end of the fiscal quarter of the Company then most recently ended,
and "EBITDAX" shall mean EBITDAX of the Company and the Restricted Subsidiaries
for the four fiscal quarters ending with the fiscal quarter of the Company then
most recently ended.
"PRIME RATE" shall mean, as of a particular date, the generally applicable
prime rate most recently determined by Chase Texas. Without notice to the
Company or any other Person, the Prime Rate shall change automatically from time
to time as and in the amount by which said prime rate shall fluctuate. The prime
rate is a reference rate and may not necessarily represent the lowest or best
rate actually charged to any customer. Chase Texas may make commercial loans or
other loans at rates of interest at, above or below the prime rate.
"PRINCIPAL OFFICE" shall mean the principal banking office of the Agent,
presently located at 712 Main Street, Houston, Texas 77002.
"PRODUCTION PAYMENTS" shall mean, collectively, Dollar-Denominated
Production Payments and Volumetric Production Payments.
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"PROPER FORM" shall mean in form and substance satisfactory to the Agent
in its discretion.
"PROPERTY" shall mean, with respect to any Person, any interest of such
person in any kind of property or asset, whether real, personal or mixed,
tangible or intangible, including Capital Stock in any other Person.
"QUARTERLY DATES" shall mean the last day of each March, June, September
and December; PROVIDED that if any such date is not a Business Day, the relevant
Quarterly Date shall be the next succeeding Business Day.
"RATE DESIGNATION NOTICE" shall mean (a) in the case of a new Loan, the
Request for Extension of Credit with respect to such Loan and (b) in the case of
Conversions and Continuations, a notice in the form of EXHIBIT F, in each case
appropriately completed and executed by an authorized officer of the Company.
"REGULATION D" shall mean Regulation D of the Board as the same may be
amended or supplemented from time to time and any successor or other regulation
relating to reserve requirements.
"REGULATORY CHANGE" shall mean, with respect to any Bank, any change on or
after the date of this Agreement in any Legal Requirement (including Regulation
D) or the adoption or making on or after such date of any official
interpretation, directive or request applying to a class of banks including such
Bank under any Legal Requirement (whether or not having the force of law) by any
Governmental Authority charged with the interpretation or administration
thereof.
"REIMBURSEMENT OBLIGATIONS" shall mean, as at any date, the obligations of
the Company then outstanding to reimburse the Agent for Letter of Credit
Advances.
"REQUEST FOR EXTENSION OF CREDIT" shall mean a request for extension of
credit duly executed by the Chief Executive Officer, President, Chief Financial
Officer or Treasurer of the Company, or such other officer of the Company as its
Chief Financial Officer may from time to time designate in a writing delivered
to the Agent, appropriately completed and substantially in the form of EXHIBIT
C.
"REQUIRED BANKS" shall mean, at any time that no Obligations are
outstanding, Banks having 51% or more of the total of all Commitments, and at
any time that Obligations are outstanding, Banks holding 51% or more of the
aggregate amount of such Obligations.
"RESTRICTED PAYMENT" shall mean (a) any declaration or payment of any
dividend on, or the making of any distribution on or in respect of, any Capital
Stock of the Company or any Restricted Subsidiary, except dividends or
distributions payable solely in such Capital Stock or in options, warrants or
other rights to purchase such Capital Stock; and (b) any purchase, redemption or
other
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acquisition for value by the Company or any Restricted Subsidiary of any Capital
Stock of the Company or any Restricted Subsidiary held by Persons other than the
Company or a Wholly-Owned Restricted Subsidiary.
"RESTRICTED SUBSIDIARY" shall mean, at any time, (a) each Subsidiary of
the Company which is at such time designated as a Restricted Subsidiary in
accordance with SECTION 9.17, and (b) any Subsidiary of the Company hereafter
created or acquired and, at or at any time after the time of creation or
acquisition, not designated by the Board of Directors of the Company as an
Unrestricted Subsidiary in accordance with SECTION 9.17.
"SALE AND LEASEBACK TRANSACTION" shall have the meaning ascribed to such
term in SECTION 9.14.
"SANTA FE" shall mean Santa Fe Energy Resources, Inc., a Delaware
corporation and a predecessor to the Company.
"SANTA FE INDENTURE" shall mean the Indenture between Santa Fe and The
First National Bank of Boston, as Trustee, dated as of May 25, 1994, providing
for issuance by Santa Fe of its 11% Senior Subordinated Notes Due 2004 in the
aggregate principal amount of up to $100,000,000 (the "SANTA FE SENIOR
SUBORDINATED NOTES"), as amended and supplemented.
"SANTA FE SENIOR SUBORDINATED NOTES" shall have the meaning ascribed to
such term in the definition of "Santa Fe Indenture".
"S&P" shall mean Standard & Poor's Ratings Group.
"SNYDER" shall mean Snyder Oil Corporation, a Delaware corporation and a
predecessor to the Company.
"SNYDER INDENTURE" shall mean the Indenture between Snyder and Texas
Commerce Bank National Association (as Chase Texas was formerly known), as
Trustee, dated as of June 10, 1997, providing for issuance by Snyder of its
8-3/4% Senior Subordinated Notes Due 2007 in the aggregate principal amount of
up to $175,000,000 (the "SNYDER SENIOR SUBORDINATED NOTES") , as amended and
supplemented.
"SNYDER SENIOR SUBORDINATED NOTES" shall have the meaning ascribed to such
term in the definition of "Snyder Indenture".
"SOCO INTERNATIONAL" shall mean SOCO International, Inc., a Delaware
corporation.
"STATUTORY RESERVES" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the weighted average of the reserve percentages (including any
marginal, special, emergency, or supplemental reserves), expressed as a decimal,
actually required to be maintained by any Bank by the Board or any other
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Governmental Authority to which any of the Banks is subject as required by
Regulation D during the applicable Interest Period for "eurocurrency
liabilities" (as such term is used in Regulation D) and any other reserves
actually required to be maintained by any Bank by reason of any Regulatory
Change against (a) any category of liabilities which includes deposits by
reference to which the Eurodollar Rate is to be determined as provided in the
definition of "Eurodollar Rate" or (b) any category of extensions of credit or
other assets which include Eurodollar Loans. Such reserve percentages shall
include, without limitation, those imposed under Regulation D. Statutory
Reserves shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage. Each determination of the Statutory Reserves
by the Agent shall be conclusive and binding, absent manifest error, and may be
made using any reasonable averaging and attribution method.
"SUBSIDIARY" shall mean, with respect to any Person at any time, any
Person of which 50% or more of the Capital Stock is at such time directly or
indirectly legally or beneficially owned or controlled by such Person or by one
or more of its Affiliates.
"SUBSIDIARY GUARANTEE" shall mean a Guaranty, in the form of EXHIBIT B,
having the blanks therein duly completed, duly executed and delivered by an
authorized officer of the Subsidiary Guarantor.
"SUBSIDIARY GUARANTOR" shall mean each of (a) Mexican Flats Services
Company, Inc., a Delaware corporation, (b) Snyder Fluid Technologies, Inc., a
Delaware corporation, (c) Snyder Gas Marketing, Inc., a Delaware corporation,
(d) SOCO Gas Systems, Inc., a Delaware corporation, (e) SOCO Louisiana Leasing,
Inc., a Delaware corporation, (f) Wyoming Gathering and Production Company, a
Delaware corporation, and (g) each Restricted Subsidiary, if any, at any time
required by SECTION 9.13 to execute and deliver a Subsidiary Guarantee.
"TOTAL DEBT" shall mean, as of any date and for any Person, without
duplication, (a) all obligations for borrowed money; (b) all obligations
evidenced by bonds, debentures, notes or other similar instruments; (c) all
obligations to pay the deferred purchase price of Property or services, except
trade accounts payable arising in the ordinary course of business; (d) all
Capitalized Lease Obligations; (e) to the extent treated as debt under GAAP, all
obligations in respect of Dollar-Denominated Production Payments and other
similar financing arrangements; (f) all reimbursement obligations with respect
to letters of credit issued for the account of such Person, including the Letter
of Credit Liabilities, but EXCLUDING 50% of the amount of such obligations which
(i) are in respect of Letters of Credit, other letters of credit or other
similar instruments and (ii) do not support indebtedness of the types described
in CLAUSES (A), (B), (C), (D) OR (E) of this definition; (g) all instruments and
agreements relating to surety obligations to foreign Governmental Authorities or
state-owned Persons pursuant to which such Person must pay (or reimburse another
Person who pays) regardless of any available defense on the underlying contract
(but excluding such instruments and agreements in connection with which such
Person may avail itself of available defenses on the underlying contract before
having to pay); (h) Unfunded Liabilities if such Unfunded Liabilities in the
aggregate exceed (on an ABO basis) $25,000,000; (i) Attributable Debt; (j) all
obligations of the
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types described in CLAUSES (A) THROUGH (I) of this definition (collectively,
"ORDINARY DEBT") of another Person secured by a Lien on any Property of the
Person as to which Total Debt is being determined, regardless of whether such
Ordinary Debt is assumed by such Person, and (j) all Ordinary Debt of another
Person Guaranteed by such Person; PROVIDED, HOWEVER, that Total Debt of the
Combined Group shall not include (x) any obligation of the Company owing to a
Wholly-Owned Restricted Subsidiary which is subordinated to the Obligations upon
the terms set forth on SCHEDULE IV, or (y) any obligation of a Restricted
Subsidiary owing to the Company or one or more other Restricted Subsidiaries.
"TRANSFER shall have the meaning ascribed to such term in the definition
of "Asset Sale".
"TYPE" shall have the meaning ascribed to such term in SECTION 1.3.
"UNFUNDED LIABILITIES" shall mean, with respect to any Plan, at any time,
the amount (if any) by which (a) the present value of all benefits under such
Plan exceeds (b) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such Plan
(in accordance with GAAP), but only to the extent that such excess represents a
potential liability of the Company or any ERISA Affiliate to the PBGC or a Plan
under Title IV of ERISA.
"UNRESTRICTED SUBSIDIARY" shall mean, at any time, each Subsidiary of the
Company which is at such time designated as an Unrestricted Subsidiary in
accordance with SECTION 9.17.
"VOLUMETRIC PRODUCTION PAYMENTS" shall mean production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"VOTING STOCK" shall mean 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).
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" shall mean any Restricted Subsidiary
(a) all of the Capital Stock or other ownership interests in which, other than
any directors' qualifying shares mandated by applicable law, is owned directly
or indirectly by the Company or (b) such Restricted Subsidiary is organized in a
foreign jurisdiction and is required by the applicable laws and regulations of
such foreign jurisdiction to be partially owned by the government of such
foreign jurisdiction or individual or corporate citizens of such foreign
jurisdiction in order for such Restricted Subsidiary to transact business in
such foreign jurisdiction; PROVIDED, in each case, that the Company, directly or
indirectly, owns the remaining Capital Stock or ownership interest in such
Restricted Subsidiary and, by contract or otherwise, controls the management and
business of such Restricted Subsidiary and derives the economic benefits of
ownership of such Restricted Subsidiary to substantially the same extent as if
such Restricted Subsidiary were a wholly owned Subsidiary.
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1.2. ACCOUNTING TERMS AND DETERMINATIONS. Except where specifically
otherwise provided:
(a) The symbol "$" and the word "dollars" shall mean lawful money of the
United States of America.
(b) Any accounting term not otherwise defined shall have the meaning
ascribed to it under GAAP.
(c) Unless otherwise expressly provided, any accounting concept and all
financial covenants shall be determined on a consolidated basis, and financial
measurements shall be computed without duplication.
(d) Wherever the term "including" or any of its correlatives appears in
the Credit Documents, it shall be read as if it were written "including (by way
of example and without limiting the generality of the subject or concept
referred to)".
(e) Wherever the word "herein" or "hereof" is used in any Credit Document,
it is a reference to that entire Credit Document and not just to the subdivision
of it in which the word is used.
(f) References in any Credit Document to Section numbers are references to
the Sections of such Credit Document.
(g) References in any Credit Document to Exhibits, Schedules, Annexes and
Appendices are to the Exhibits, Schedules, Annexes and Appendices to such Credit
Document, and they shall be deemed incorporated into such Credit Document by
reference.
(h) Except as otherwise provided herein, any term defined in the Credit
Documents which refers to a particular agreement, instrument or document shall
also mean, refer to and include all modifications, amendments, supplements,
restatements, renewals, extensions and substitutions of the same; PROVIDED that
nothing in this subsection shall be construed to authorize any such
modification, amendment, supplement, restatement, renewal, extension or
substitution except as may be permitted by other provisions of the Credit
Documents.
(i) All times of day used in the Credit Documents mean local time in
Houston, Texas.
(j) Defined terms may be used in the singular or plural, as the context
requires.
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1.3. TYPES OF LOANS. Loans hereunder are distinguished by "Type". The
"Type" of a Loan refers to the determination whether such Loan is a Eurodollar
Loan or an Alternate Base Rate Loan.
Section 2. COMMITMENTS.
2.1. LOANS.
(a) Each Bank severally agrees, subject to the terms and conditions of
this Agreement, from time to time on or after the date hereof and prior to the
Maturity Date, to make Loans to the Company in an aggregate principal amount at
any one time outstanding up to but not exceeding such Bank's Commitment at such
time MINUS such Bank's Commitment Percentage of all Letter of Credit Liabilities
at such time; PROVIDED, HOWEVER, that the aggregate amount of all Loans and all
Letter of Credit Liabilities outstanding at any time shall never exceed the
Aggregate Commitment at such time. Subject to the conditions precedent in this
Agreement, any Loan repaid prior to the Maturity Date may be reborrowed prior to
the Maturity Date pursuant to the terms of this Agreement; PROVIDED, that any
and all Loans then outstanding shall be due and payable in full on the Maturity
Date.
(b) Notwithstanding anything in this Agreement to the contrary, (i) no
Bank shall be required to have Loans at any one time outstanding in an amount
which, together with such Bank's Commitment Percentage of outstanding Letter of
Credit Liabilities, shall exceed such Bank's Commitment, and (ii) if a Bank
fails to make a Loan as and when required hereunder and the Company subsequently
makes a repayment on the Notes or reimburses Letter of Credit Liabilities, such
repayment shall be split among the non-defaulting Banks ratably in accordance
with their respective Commitment Percentages (computed without regard to the
Commitment Percentage of the defaulting Bank) until each Bank has its Commitment
Percentage of all outstanding Loans and Letter of Credit Liabilities. Any
balance of such repayment shall be divided among all Banks in accordance with
their respective Commitment Percentages.
2.2. LETTERS OF CREDIT.
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(a) Subject to the terms and conditions of this Agreement, the Company
shall have the right to utilize the Commitments from time to time prior to the
Maturity Date by obtaining the issuance by the Issuer of letters of credit for
the account of the Company in such amounts and in favor of such beneficiaries as
the Company from time to time shall request; PROVIDED, that in no event shall
the Issuer have any obligation to issue any Letter of Credit if (1) the face
amount of such Letter of Credit PLUS any additional Letter of Credit Liabilities
at such time would exceed $100,000,000 (as adjusted downward from time to time
to the extent the Aggregate Commitment is reduced below $100,000,000), (2) the
aggregate amount of all Loans and all Letter of Credit Liabilities outstanding
at such time would exceed the Aggregate Commitment at such time, (3) such Letter
of Credit would have an expiry date later than the earlier of (x) one year from
the date thereof or (y) the Maturity Date, (4) such Letter of Credit would not
be in Proper Form, (5) the Company has not executed and delivered to the Issuer
an Application and such other customary instruments and agreements relating to
such Letter of Credit as the Issuer shall have reasonably requested, or (6) a
Default has occurred and is continuing. The Company promises to pay to the Agent
for the account of each Bank in accordance with such Bank's Commitment
Percentage, on demand, each Letter of Credit Advance, together with interest
thereon at (i) prior to the third Business Day following each such Letter of
Credit Advance, the Alternate Base Rate, and (ii) on and after such third
Business Day, the Post-Default Rate. All rights, powers, benefits and privileges
of this Agreement with respect to the Notes, and all restrictions, provisions
for repayment or acceleration and all other covenants, warranties,
representations and agreements contained in the Credit Documents with respect to
the Notes, shall apply to each Letter of Credit Advance.
Upon the date of the issuance of a Letter of Credit, the Issuer shall be
deemed, without further action by any party to this Agreement, to have sold to
each Bank, and each Bank shall be deemed, without further action by any party to
this Agreement, to have purchased from the Issuer, a participation, to the
extent of such Bank's Commitment Percentage, in such Letter of Credit and the
related Letter of Credit Liabilities. Should the Banks in their sole and
absolute discretion choose to issue a Letter of Credit with an expiry date after
the Maturity Date (which no Bank shall be obligated to do), such Letter of
Credit shall be fully Covered or shall be backed by a letter of credit in Proper
Form issued by an issuer acceptable to the Issuer in its sole and absolute
discretion.
(b) The following additional provisions shall apply to each Letter of
Credit:
(1) The Company shall give the Agent at least three Business Days'
irrevocable prior notice (effective upon receipt) specifying the date such
Letter of Credit is to be issued, describing the proposed terms of such Letter
of Credit and the nature of the transaction proposed to be supported thereby,
and shall furnish such additional information regarding such transaction as the
Agent may request. Upon receipt of such notice the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's Commitment Percentage of
the amount of such proposed Letter of Credit.
(2) On each day during the period commencing with the issuance of
any Letter of Credit and until such Letter of Credit shall have expired or been
terminated, the Commitment of
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each Bank shall be deemed to be utilized for all purposes of this Agreement in
an amount equal to such Bank's Commitment Percentage of the sum of (i) the
undrawn amount of such Letter of Credit PLUS (ii) the unpaid amount of all
Letter of Credit Advances with respect to such Letter of Credit.
(3) Upon receipt from the beneficiary of any Letter of Credit of any
demand for payment thereunder, the Issuer shall promptly notify the Company and
each Bank as to the amount to be paid as a result of such demand and the payment
date. If at any time the Issuer shall have made a payment to a beneficiary of a
Letter of Credit in respect of a drawing or in respect of an acceptance created
in connection with a drawing under such Letter of Credit, each Bank will pay to
the Agent immediately upon demand by the Agent at any time during the period
commencing after such payment until reimbursement thereof in full by the
Company, an amount equal to such Bank's Commitment Percentage of such payment,
together with interest on such amount for each day from the date of demand for
such payment (or, if such demand is made after 12:00 noon on such date, from the
next succeeding Business Day) to the date of payment by such Bank of such amount
at a rate of interest per annum equal to the Fed Funds Rate for such day.
(4) The Company shall be irrevocably and unconditionally obligated
forthwith to reimburse the Issuer for the account of each Bank for any amount
paid by it upon any drawing under any Letter of Credit, without presentment,
demand, protest or other formalities of any kind, all of which are hereby
expressly WAIVED by the Company to the extent not prohibited by law. Such
reimbursement may, subject to satisfaction of the conditions in SECTION 7 and to
the existence of sufficient Commitments (after adjustment in the same to reflect
the elimination of the corresponding Letter of Credit Liability) be made by
borrowing of Loans. The Issuer will pay to each Bank such Bank's Commitment
Percentage of all amounts received from the Company for application in payment,
in whole or in part, of the Reimbursement Obligation in respect of any Letter of
Credit, but only to the extent such Bank has made payment to the Issuer in
respect of such Letter of Credit pursuant to CLAUSE (3) above.
(5) The Company will pay to the Agent at the Principal Office for
the account of each Bank the Letter of Credit Fee on such Bank's Commitment
Percentage of the amount available for drawings under each Letter of Credit, in
each case for the period from and including the date of issuance of each such
Letter of Credit to and including the date of expiration or termination thereof,
such Letter of Credit Fees to be paid in arrears on the Quarterly Dates and on
the Maturity Date. The Agent will pay to each Bank, promptly after receiving any
payment in respect of Letter of Credit Fees referred to in this CLAUSE (5), an
amount equal to such Bank's Commitment Percentage of such Letter of Credit Fee.
The aggregate Letter of Credit Fee for any Letter of Credit is subject to a
minimum of $600 per annum.
(6) The Company shall pay to the Agent for the account of the
Issuer, in arrears on each Quarterly Date and on the Maturity Date, a fronting
fee for each Letter of Credit equal to 1/8 of 1% per annum times the face amount
of such Letter of Credit, in each case for the period from and including the
date of issuance of such Letter of Credit to and including the date of
expiration or termination thereof.
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(7) The Company has caused the Existing Letter of Credit to be
issued by Chase Texas. The Existing Letter of Credit shall be deemed a
utilization of the Commitments and shall constitute a Letter of Credit for all
purposes of this Agreement and the other Credit Documents, and on May 5, 1999,
Chase Texas shall be deemed, without any further action by any party to this
Agreement, to have sold to each Bank, and each Bank shall be deemed, without any
further action by any party to this Agreement, to have purchased from Chase
Texas, a participation, to the extent of such Bank's Commitment Percentage, in
the Existing Letter of Credit and the related Letter of Credit Liabilities; in
connection therewith, Chase Texas shall pay to each Bank such Bank's Commitment
Percentage of any unearned fees received by Chase Texas in connection with the
Existing Letter of Credit (at the rate of such fees prior to the date hereof,
less the issuance fee and fronting fee provided for in the Existing Santa Fe
Credit Agreement) and the Company shall pay the Letter of Credit Fee with
respect to the Existing Letter of Credit from such date to the expiry of the
Existing Letter of Credit at the rate from time to time in effect under this
Agreement.
(c) Each Letter of Credit shall be subject to either the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 (and any subsequent revision thereof approved by a
Congress of the International Chamber of Commerce) or the International Standby
Practices 1998, as appropriate.
(d) To the extent that any provision of any Application is contrary to or
inconsistent with the provisions of this Agreement, the provisions of this
Agreement shall control.
2.3. TERMINATIONS, REDUCTIONS AND CHANGES OF COMMITMENTS.
(a) On the Maturity Date, all Commitments shall terminate in their
entirety.
(b) The Company shall have the right to terminate or reduce the unused
portion of the Aggregate Commitment at any time or from time to time; PROVIDED
that (i) the Company shall give notice of each such termination or reduction to
the Agent as provided in SECTION 5.5; (ii) each such partial reduction shall be
in the amount of $20,000,000 or an integral multiple of $1,000,000 above
$20,000,000, and (iii) the Company may not cause the Aggregate Commitment to be
less than the aggregate principal amount of the Loans (including Letter of
Credit Liabilities, if any) then outstanding (after giving effect to any
concurrent repayment of the Loans and reduction of Letter of Credit
Liabilities).
(c) No reduction in or termination of any Commitment pursuant to SECTION
2.3(B) may be reinstated without the written approval of the Agent and all
Banks.
2.4. FEES. In consideration of the Commitments, the Company shall pay to
the Agent for the account of each Bank, PRO RATA in accordance with its
Commitment Percentage, fees (the "FACILITY FEES") (a) for each Margin Period
from the date of this Agreement to and including the date such Bank's Commitment
is terminated at a rate per annum for such Margin Period determined
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in accordance with the Pricing Schedule, and (b) if no Margin Period is in
effect, the highest rate set forth for Facility Fees in the Pricing Schedule.
The Facility Fees shall be computed for each day and shall be based on such
Bank's Commitment for such day. Accrued and unpaid Facility Fees shall be due in
arrears on the date of the initial Loans, within three days after demand
therefor on or about the Quarterly Dates, and within three days after demand
therefor on or about the Maturity Date. Upon receipt, the Agent shall disburse
the Facility Fees to the Banks in accordance with their respective Commitment
Percentages. All past due Facility Fees shall bear interest at the Post-Default
Rate.
2.5. AFFILIATES; LENDING OFFICES.
(a) Any Bank may, if it so elects, fulfill its Commitment as to any
Eurodollar Loan by causing a branch, foreign or otherwise, or Affiliate of such
Bank to make such Loan and may transfer and carry such Loan at, to or for the
account of any branch office or Affiliate of such Bank; PROVIDED that in such
event, for the purposes of this Agreement, such Loan shall be deemed to have
been made by such Bank and the obligation of the Company to repay such Loan
shall nevertheless be to such Bank and shall be deemed to be held by such Bank,
to the extent of such Loan, for the account of such branch or Affiliate.
(b) Notwithstanding any provision of this Agreement to the contrary, each
Bank shall be entitled to fund and maintain its funding of all or any part of
its Loans in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations shall be made as if such Bank had
actually funded and maintained each Eurodollar Loan during each Interest Period
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the applicable Eurodollar
Rate for such Interest Period.
2.6. SEVERAL OBLIGATIONS. The failure of any Bank to make any Loan to be
made by it on the date specified therefor shall not relieve any other Bank of
its obligation to make its Loan on such date, but neither the Agent nor any Bank
shall be responsible for the failure of any other Bank to make a Loan to be made
by such other Bank.
2.7. NOTES. The Loans made by each Bank shall be evidenced by a single
promissory note of the Company substantially in the form of EXHIBIT A
(collectively, together with all renewals, extensions, modifications and
replacements thereof and substitutions therefor, the "NOTES" and individually a
"NOTE") payable to the order of such Bank in a principal amount equal to the
Commitment of such Bank as originally in effect and otherwise duly completed.
Each Bank is hereby authorized by the Company to endorse on the schedule (or a
continuation thereof) attached to the Note of such Bank, to the extent
applicable, the date, amount and Type of each Loan made by such Bank to the
Company hereunder, and each Continuation thereof, each Conversion of all or a
portion thereof to another Type, the date and amount of each payment or
prepayment of principal thereof received by such Bank and, in the case of
Eurodollar Loans, the length of each Interest Period; PROVIDED that any failure
by such Bank to make any such endorsement shall not affect the obligations of
the Company under any Note or this Agreement in respect of such Loan.
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2.8. USE OF PROCEEDS. The proceeds of the Loans shall be used and the
Letters of Credit shall be issued for working capital and for general corporate
purposes of the Company and may not be utilized (a) to pay dividends other than
usual dividends in the ordinary course of business or (b) for the buyout or
acquisition of any Person unless the board of directors of such Person has first
approved such buyout or acquisition. None of the proceeds of the Loans will be
used and no Letter of Credit will be issued for the purpose of, and neither the
Company nor any Subsidiary of the Company is engaged in the business of
extending credit for the purpose of, (a) purchasing or carrying any "margin
stock" as defined in Regulation U of the Board (12 C.F.R. Part 221) or (b)
reducing or retiring any indebtedness which was originally incurred to purchase
or carry margin stock, if such purpose under either (a) or (b) above would
constitute this transaction a "purpose credit" within the meaning of said
Regulation U, or for any other purpose which would constitute this transaction a
"purpose credit". The Company represents and warrants that neither the Company
nor any Subsidiary of the Company is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stocks. Neither the Company nor any Subsidiary of
the Company nor any Person acting on behalf of the Company or any Subsidiary of
the Company has taken or will take any action which might cause any of the
Credit Documents, including this Agreement, to violate Regulation U or any other
regulation of the Board, or to violate any similar provision of the Securities
Exchange Act of 1934, as amended, or any rule or regulation under any such
provision thereof.
2.9. INCREASE OF COMMITMENTS. PROVIDED that no Default or Event of Default
shall have occurred and be continuing, the Company shall have the right, without
the consent of the Banks but subject to the consent of the Agent (which consent
shall not be unreasonably withheld), to effectuate from time to time an increase
in the Aggregate Commitment by adding to this Agreement one or more commercial
banks or other financial institutions (who shall meet all criteria for Eligible
Assignees and who shall, upon completion of the requirements stated in this
SECTION 2.9, constitute Banks hereunder), or by allowing one or more Banks to
increase its Commitment hereunder, so that such added and increased Commitments
shall equal the increase in Aggregate Commitment effectuated pursuant to this
SECTION 2.9; PROVIDED that (a) no increase in Commitments pursuant to this
SECTION 2.9 shall result in the Aggregate Commitment exceeding $450,000,000
(reduced by the amount, if any, by which the "Commitments" (as defined therein)
under the 364-Day Credit Agreement of even date herewith by and among the
Company, the Banks and the Agent, as amended from time to time, have been or are
concurrently being increased), (b) no Bank's Commitment shall be increased
without the consent of such Bank, and (c) on the effective date of any such
increase in Aggregate Commitment, there are no outstanding Eurodollar Loans. The
Company shall give the Agent three Business Days' notice of the Company's
intention to increase the Aggregate Commitment pursuant to this SECTION 2.9.
Such notice shall specify each new commercial bank or other financial
institution, if any, the changes in amounts of Commitments that will result, and
such other information as is reasonably requested by the Agent. Each new
commercial bank or other financial institution, and each Bank agreeing to
increase its Commitment, shall execute and deliver to the Agent a document
satisfactory to the Agent pursuant to which it becomes a party hereto or
increases such Commitment, as the case may be, which document, in the case of a
new commercial
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bank or other financial institution, shall (among other matters) specify the
domestic lending office and Eurodollar lending office of such new commercial
bank or other financial institution. In addition, the Company shall execute and
deliver a Note in the principal amount of the Commitment of each new commercial
bank or other financial institution, or, against delivery to it of such Bank's
existing Note, a replacement Note in the principal amount of the increased
Commitment of each Bank agreeing to increase its Commitment, as the case may be.
Such Notes and other documents of the nature referred to in this SECTION 2.9
shall be furnished to the Agent in form and substance as may be reasonably
required by it. Upon the execution and delivery of such documents, such new
commercial bank or financial institution shall constitute a "Bank" under this
Agreement with a Commitment as specified therein, or such Bank's Commitment
shall increase as specified therein, as the case may be.
2.10 CHAPTER 346 DOES NOT APPLY. The Company and the Banks expressly
agree, pursuant to Chapter 346 ("CHAPTER 346") of the Texas Finance Code, that
Chapter 346 (which relates to open-end line of credit revolving loan accounts)
shall not apply to any extension of credit under this Agreement and that neither
this Agreement nor any such extension of credit shall be governed by Chapter 346
or subject to its provisions.
Section 3. BORROWINGS AND PREPAYMENTS.
3.1. BORROWINGS. The Company shall give the Agent notice of each borrowing
to be made under this Agreement as provided in SECTION 5.5. Each borrowing of
Alternate Base Rate Loans shall be in an amount of $1,000,000 or an integral
multiple of $1,000,000 in excess thereof. Each borrowing of Eurodollar Loans
shall be in an amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof. Not later than 2:00 p.m. on the date specified for each such
borrowing, each Bank shall make available the amount of the Loan, if any, to be
made by it on such date to the Agent, at its Principal Office, in immediately
available funds, for the account of the Company. The amounts so received by the
Agent shall, subject to the terms and conditions of this Agreement, be made
available to the Company by depositing the same, in immediately available funds,
in an account designated by the Company and maintained with the Agent at its
Principal Office.
3.2. PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. Except as provided in this SECTION 3.2 or in
SECTION 5 or 6, the Company shall have the right to prepay, on any Business Day,
in whole or in part, without the payment of any penalty or fee, Loans at any
time or from time to time; PROVIDED that the Company shall give the Agent notice
of each such prepayment as provided in SECTION 5.5. Eurodollar Loans may be
prepaid on the last day of an Interest Period applicable thereto and may not be
otherwise prepaid unless prepayment is accompanied by payment of all
compensation required by SECTION 6.5.
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(b) MANDATORY PREPAYMENTS. The Company shall from time to time on demand
by the Agent prepay the Loans or reduce Letter of Credit Liabilities in such
amounts as shall be necessary so that at all times the aggregate outstanding
principal amount of Loans PLUS the aggregate Letter of Credit Liabilities, if
any, shall not exceed the Aggregate Commitment. Any such payment shall be
allocated between Loans and Letter of Credit Liabilities and, if to Letter of
Credit Liabilities, first to Reimbursement Obligations, and then to other
obligations as the Company may elect.
Section 4. PAYMENTS OF PRINCIPAL AND INTEREST.
4.1. REPAYMENT OF LOANS AND REIMBURSEMENT OBLIGATIONS. The Company will
pay to the Agent for the account of each Bank PRO RATA according to their
respective Commitment Percentages the unpaid principal of each Loan made by such
Bank on the Maturity Date and the amount of each Reimbursement Obligation
forthwith upon its incurrence. The amount of any Reimbursement Obligation may,
if the applicable conditions precedent specified in SECTION 7 (other than any
Default resulting solely from the nonpayment of such Reimbursement Obligation)
have been satisfied, be paid with the proceeds of Loans.
4.2. INTEREST. Subject to SECTIONS 12.8 AND 4.3(B), the Company will pay
to the Agent for the account of each Bank interest on the unpaid principal
amount of each Loan made by such Bank for the period commencing on the date of
such Loan to but excluding the date such Loan shall be paid in full, at the
lesser of (a) the following rates per annum:
(1) if such Loan is an Alternate Base Rate Loan, the Alternate
Base Rate PLUS the Applicable Margin for Alternate Base Rate Loans; or
(2) if such Loan is a Eurodollar Loan, the applicable Eurodollar
Rate PLUS the Applicable Margin for Eurodollar Loans;
or (b) the Highest Lawful Rate.
4.3. SELECTION OF INTEREST RATES.
(a) Subject to SECTION 6 and SECTION 12.8, the Company shall have the
right, by giving a Rate Designation Notice to the Agent as provided in SECTION
5.5, to designate any Loan as a Loan of a particular Type, to convert (a
"CONVERSION") any Loan (in whole or in part) into a Loan of another Type or to
continue (a "CONTINUATION") any Loan (in whole or in part) as a Loan of the same
Type. The records of the Agent with respect to interest rate designations,
Interest Periods and the amount of Loans to which they are applicable shall be
binding and conclusive, absent manifest error. Loans shall be Alternate Base
Rate Loans except where the Company has complied with all requirements of this
Agreement for the designation, Conversion or Continuation of such Loan as a
Eurodollar Loan. Interest on the amount of each Loan shall accrue on the amount
of that Loan and from the date it is made. Any such notice of designation,
Conversion or Continuation shall specify the Loan and the new Interest Period.
In the event the Company fails to so give such notice prior
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to the end of any Interest Period for any Eurodollar Loan, such Loan shall
become an Alternate Base Rate Loan on the last day of such Interest Period. No
more than 10 Eurodollar Interest Periods shall be in effect at any time. Except
as otherwise provided in this Agreement, each such designation, Conversion or
Continuation shall apply to all Notes ratably in accordance with their
respective principal balances. If any Bank assigns an interest in its Note when
any Eurodollar Loan is outstanding with respect thereto, the assignee shall have
its ratable interest in such Eurodollar Loan.
(b) Notwithstanding the foregoing but subject to SECTION 12.8, the Company
will pay to the Agent for the account of each Bank interest (i) except as
otherwise provided in CLAUSE (II) or CLAUSE (III) of this SECTION 4.3(B), at a
rate per annum 2% above the otherwise applicable rate on any principal of any
Loan made by such Bank, for the period commencing on the first day on which any
Event of Default exists and continuing through and including the date no Event
of Default exists and is continuing; (ii) at the rate provided in SECTION 2.2(A)
for unpaid Letter of Credit Advances, and (iii) at the Post-Default Rate for any
other amount due under the Credit Documents which is not paid in full when due
(whether at stated maturity, by acceleration, or otherwise) (but, if such amount
is interest, only to the extent legally enforceable).
(c) Accrued and unpaid interest shall be due and payable on the applicable
Interest Payment Dates, except that (1) accrued and unpaid interest pursuant to
SECTION 4.3(B) shall be due and payable from time to time on demand of the Agent
or the Required Banks (through the Agent), (2) accrued and unpaid interest on
any amount converted from one Type of Loan to another Type of Loan shall be paid
on the amount so converted at the time of such Conversion, and (3) accrued and
unpaid interest on the amount of any Eurodollar Loan paid or prepaid shall be
due at the time of such payment or prepayment.
Section 5. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS, ETC.
5.1. PAYMENTS.
(a) Except to the extent otherwise provided in this Agreement, all
payments of principal of or interest on the Loans, of Reimbursement Obligations
and of other amounts to be made by the Company under the Credit Documents shall
be made in dollars, in immediately available funds, to the Agent at its
Principal Office (or in the case of a successor Agent, at the principal office
of such successor Agent in the United States), not later than 12:00 noon on the
date on which such payment shall become due, and each such payment made after
such time on such due date shall be deemed to have been made on the next
succeeding Business Day. The Agent or any Bank for whose account any such
payment is made may (but shall not be obligated to) debit the amount of any such
payment which is not made by such time to any ordinary deposit account of the
Company with the Agent or such Bank, as the case may be.
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(b) The Company shall, at the time it makes each payment under this
Agreement or any other Credit Document, specify to the Agent the Loans or other
amounts payable by the Company to which such payment is to be applied (and in
the event that it fails so to specify, such payment shall be applied as the
Agent may in its sole and absolute discretion designate to the Loans or other
amounts then due and payable); PROVIDED that if no Loans or other amounts are
then due and payable or an Event of Default has occurred and is continuing, the
Agent may apply any payment to the Obligations in such order as it may elect in
its sole and absolute discretion, but subject to the other terms and conditions
of this Agreement, including SECTION 5.2. Each payment received by the Agent
under this Agreement or any other Credit Document for the account of a Bank
shall be paid promptly to such Bank in immediately available funds for the
account of such Bank's Applicable Lending Office.
(c) If the due date of any payment under this Agreement or any other
Credit Document falls on a day which is not a Business Day, the due date for
such payment (except as otherwise provided in the definition of "Interest
Period") shall be extended to the next succeeding Business Day and interest
shall be payable for any principal so extended for the period of such extension
at the rate in effect on such due date.
5.2. PRO RATA TREATMENT. Except to the extent otherwise provided herein,
(a) each borrowing from the Banks, each payment of Facility Fees and other fees
and each termination or reduction of the Commitments under SECTION 2.4 shall be
made PRO RATA according to the Banks' respective Commitment Percentages; (b)
except as otherwise provided in this Agreement, each payment by the Company of
principal of or interest on Loans of a particular Type shall be made to the
Agent for the account of the Banks PRO RATA according to the Banks' respective
Commitment Percentages; and (c) the Banks (other than the Issuer) shall purchase
from the Issuer participations in each Letter of Credit and its related Letter
of Credit Liabilities PRO RATA according to the Banks' respective Commitment
Percentages.
5.3. COMPUTATIONS. Subject to SECTION 12.8, interest based on the
Alternate Base Rate (to the extent determined by reference to the Prime Rate)
will be computed on the basis of 365 (or 366) days and actual days elapsed
(including the first day but excluding the last day) occurring in the period for
which payable. All other interest and fees shall be computed on the basis of a
year of 360 days and actual days elapsed (including the first day but excluding
the last day) occurring in the period for which payable, unless the effect of so
computing shall be to cause the rate of interest to exceed the Highest Lawful
Rate (in which event interest and fees shall be calculated on the basis of the
actual number of days elapsed in a year composed of 365 or 366 days, as the case
may be).
5.4. MINIMUM AND MAXIMUM AMOUNTS. Except for prepayments made pursuant to
SECTION 3.2(B), each borrowing and repayment of principal of Loans, each
optional partial prepayment and each designation, Continuation or Conversion of
Type shall be in an aggregate principal amount equal to $1,000,000 or an
integral multiple of $1,000,000 in excess thereof (borrowings or prepayments of
Loans of different Types or, in the case of Eurodollar Loans, having different
Interest Periods at the same time hereunder, to be deemed separate borrowings
and
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prepayments for purposes of the foregoing, one for each Type or Interest
Period), and each termination or reduction of the Aggregate Commitment shall be
in an aggregate principal amount equal to $20,000,000 or an integral multiple of
$1,000,000 in excess thereof. Upon any prepayment that would reduce Eurodollar
Loans having the same Interest Period to less than $1,000,000, such Eurodollar
Loans shall automatically be converted into Alternate Base Rate Loans. Each
issuance of a Letter of Credit shall be in a face amount of at least $25,000.
5.5. CERTAIN ACTIONS, NOTICES, ETC. Notices to the Agent of any
termination or reduction of the Aggregate Commitment, of prepayments of Loans
and of the duration of Interest Periods, each Request for Extension of Credit
and each Rate Designation Notice shall be irrevocable and shall be effective
only if received by the Agent not later than 12:00 noon (1:00 p.m. in the case
of a Request for Extension of Credit or Rate Designation Notice related to a
Eurodollar Loan) on the day that is the applicable number of Business Days prior
to the date of the relevant termination, reduction, issuance, borrowing and/or
prepayment specified below:
NUMBER OF BUSINESS
DAYS PRIOR
NOTICE
------------------
Termination or reduction
of Aggregate Commitment 3
Borrowing or prepayment
of or Conversion into
Alternate Base Rate Loans same day
Borrowing or prepayment
of or Conversion into or
Continuation of Eurodollar
Loans 3
Issuance of Letter of Credit 3
Each such notice of reduction shall specify the amount to which the Aggregate
Commitment is to be reduced and the resulting Commitment of each Bank. Each such
notice of prepayment or Request for Extension of Credit shall specify the amount
and Type of such Loans to be borrowed or prepaid (subject to SECTIONS 3.2 and
5.4), the date of borrowing or prepayment (which shall be a Business Day) and,
in the case of Eurodollar Loans, the duration of the Interest Period therefor
(subject to the definition of "Interest Period"). Each Rate Designation Notice
with respect to a Conversion of a Loan (or portion thereof) shall specify the
amount and Type of the Loan (or portion thereof) being converted, the amount and
Type of Loan into which such Loan is being converted (subject to SECTION 5.4),
the date for Conversion (which shall be a Business Day) and, unless such Loan is
being converted into an Alternate Base Rate Loan, the duration (subject to the
definition of "Interest
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Period") of the Interest Period therefor which is to commence as of the last day
of the then current Interest Period therefor (or the date of Conversion, if such
Loan is being converted from an Alternate Base Rate Loan). Each Rate Designation
Notice with respect to a Continuation of a Loan (or portion thereof) as the same
Type of Loan shall specify the amount and Type of such Loan (or portion thereof)
being continued (subject to SECTION 5.4) and the duration (subject to the
definition of "Interest Period") of the Interest Period therefor which is to
commence as of the last day of the then current Interest Period therefor. The
Agent shall promptly notify the Banks of the contents of each such notice,
Request for Extension of Credit, or Rate Designation Notice. Notice of any
prepayment having been given, the principal amount specified in such notice,
together with interest thereon to the date of prepayment, shall be due and
payable on such prepayment date.
5.6. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent shall have been
notified by a Bank prior to 2 p.m. on the date on which such Bank is to make
payment to the Agent of the proceeds of a Loan (or the payment of any amount by
such Bank to reimburse the Issuer for a drawing under any Letter of Credit) to
be made by it hereunder or by the Company prior to the date on which the Company
is to make a payment to the Agent for the account of the Agent, the Issuer or
one or more of the Banks, as the case may be (such Bank or the Company being
herein called the "PAYOR" and such payment being herein called the "REQUIRED
PAYMENT"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient on the date that such Required Payment is to be made. If the Payor is
the Company and the Company has not in fact made the Required Payment to the
Agent on or before such date, the Banks, ratably in proportion to their
respective Commitment Percentages, shall, on demand, repay to the Agent the
amount made available by the Agent, together with interest thereon from the date
such amount was so made available by the Agent until the date the Agent recovers
such amount at a rate per annum equal to the Fed Funds Rate for the first three
days after demand and thereafter at the Fed Funds Rate plus 2%. (If the Payor is
the Company, the provisions of SECTION 2.1(A) AND SECTION 4.3(B) shall also
apply.) If the Payor is a Bank and such Bank has not in fact made the Required
Payment to the Agent on or before such date, such Bank shall, on demand, pay to
the Agent the amount made available by the Agent on behalf of such Bank,
together with interest thereon from the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to the Fed Funds Rate for each of the first three days after demand and
for each day thereafter at the Fed Funds Rate plus 2%.
5.7. SHARING OF PAYMENTS, ETC. If a Bank or any participant of a Bank
shall obtain payment of any principal of or interest on any Loan made by it
under this Agreement or of any Reimbursement Obligation or other obligation to
it under this Agreement, through the exercise of any right of set-off, banker's
lien, counterclaim or similar right, or otherwise, such Bank or participant
shall promptly purchase from the other Banks participations in the Loans made or
Reimbursement Obligations or other obligations held by the other Banks in such
amounts, and make such other adjustments from time to time as shall be equitable
to the end that all the Banks and participants shall share the benefit of such
payment (net of any expenses which may be incurred by
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such Bank or its participant in obtaining or preserving such benefit) PRO RATA
in accordance with the respective amounts then due to each of them. To such end
all the Banks and their participants 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, to the fullest
extent it may effectively do so under applicable law, that any Person so
purchasing a participation in the Obligations may exercise all rights of
set-off, bankers' lien, counterclaim or similar rights with respect to such
participation as fully as if such Bank were a direct holder of Loans,
Reimbursement Obligations or other obligations in the amount of such
participation. Nothing in this Agreement shall require any Bank to exercise any
such right or shall affect the right of any Bank to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Company.
Section 6. YIELD PROTECTION AND ILLEGALITY.
6.1. ADDITIONAL COSTS.
(a) Subject to SECTION 12.8, the Company shall pay to the Agent, on
demand, for the account of such Bank, from time to time such amounts as any Bank
may reasonably determine to be necessary to compensate it for any costs incurred
by such Bank which such Bank reasonably determines are attributable to its
making or maintaining any Eurodollar Loan hereunder or its obligation to make or
maintain any such Loan hereunder, or any reduction in any amount receivable by
such Bank 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"), in each case resulting from any Regulatory Change which:
(1) subjects such Bank (or makes it apparent that such Bank is
subject) to any tax (including any United States interest equalization tax),
levy, impost, duty, charge or fee (collectively, "TAXES"), or any deduction or
withholding for any Taxes on or from the payment due under any Eurodollar Loan
or other amounts due hereunder, other than income and franchise taxes of the
jurisdiction (or any subdivision thereof) in which such Bank has an office or
its Applicable Lending Office; or
(2) changes the basis of taxation of any amounts payable to such
Bank under this Agreement or its Note in respect of any of such Loans, other
than changes which affect taxes measured by or imposed on the overall net income
or franchise taxes of such Bank or of its Applicable Lending Office for any of
such Loans by the jurisdiction (or any subdivision thereof) in which such Bank
has an office or such Applicable Lending Office; or
(3) imposes or modifies or increases or deems applicable any
Statutory Reserves or any other reserve, special deposit or similar requirement
(including any such requirement imposed by the Board) relating to any extensions
of credit or other assets of, or any deposits with or other liabilities of, such
Bank or loans made by such Bank, or against any other funds, obligations or
other Property owned or held by such Bank; or
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(4) imposes any other condition affecting this Agreement (or any of
such extensions of credit or liabilities).
Each Bank will notify the Company through the Agent of any event occurring after
the date of this Agreement which will entitle such Bank to compensation pursuant
to this SECTION 6.1 as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation, and (if so requested by the
Company through the Agent) will designate a different available Applicable
Lending Office for the Eurodollar Loans of such Bank or take such other action
as the Company may reasonably request if such designation or action is
consistent with the internal policy of such Bank and legal and regulatory
restrictions, can be undertaken at no additional cost, will avoid the need for,
or reduce the amount of, such compensation and will not, in the sole opinion of
such Bank, be disadvantageous to such Bank (PROVIDED that such Bank shall have
no obligation so to designate an Applicable Lending Office located in the United
States of America). Each Bank will furnish the Company with a statement setting
forth the basis and amount of each request by such Bank for compensation under
this SECTION 6.1, with each such statement to cover amounts accruing under this
SECTION 6.1 with respect to a period beginning not earlier than 120 days from
the date thereof and using any reasonable averaging and attribution method.
(b) Without limiting the effect of the foregoing provisions of this
SECTION 6.1, in the event that, by reason of any Regulatory Change, any Bank
either (1) 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 Bank 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 Bank which includes Eurodollar
Loans or (2) becomes subject to restrictions on the amount of such a category of
liabilities or assets which it may hold, then, if such Bank so elects by notice
to the Company (with a copy to the Agent), the obligation of such Bank to make
Eurodollar Loans hereunder shall be suspended until the date such Regulatory
Change ceases to be in effect (in which case the provisions of SECTION 6.4 shall
be applicable).
(c) Determinations and allocations by any Bank for purposes of this
SECTION 6.1 of the effect of any Regulatory Change on its costs of maintaining
its obligations to make Loans or of making or maintaining Eurodollar Loans or on
amounts receivable by it in respect of Eurodollar Loans, and of the additional
amounts required to compensate such Bank in respect of any Additional Costs,
shall be conclusive, absent manifest error, and may be made using any reasonable
averaging and attribution method.
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(d) In the event any Bank shall seek compensation pursuant to this SECTION
6.1, the Company may give notice to such Bank (with copies to the Agent) that it
wishes to seek one or more Eligible Assignees (which may be one or more of the
Banks) to purchase and assume the Commitment, Loans, Note, Letter of Credit
Liabilities and interests in this Agreement of such Bank. Each Bank requesting
compensation pursuant to this SECTION 6.1 agrees to sell its Commitment, Loans,
Note, Letter of Credit Liabilities and interests in this Agreement pursuant to
SECTION 12.6 (without recourse, representation or warranty except as provided in
SECTION 12.6) to any such Eligible Assignee for an amount equal to (x) the sum
of the outstanding unpaid principal of and accrued and unpaid interest on such
Loans, Note and Letter of Credit Advances, plus (y) in the case of the Issuer,
Cover for the face amount of all undrawn Letter of Credit Liabilities, plus (z)
all other fees and amounts (including any compensation claimed by such Bank
under this SECTION 6.1 and including a breakage charge as if such Bank had been
prepaid the amount of all of its outstanding Eurodollar Loans) owing to such
Bank under the Credit Documents, calculated, in each case, to the date on which
such Commitment, Loans, Note, Letter of Credit Liabilities and interests are
purchased, whereupon such Bank shall have no further Commitment or other
obligation to the Company under this Agreement or any other Credit Document in
respect of matters arising after the consummation of such purchase, but shall
continue to be entitled to the benefit of, and subject to any obligations
incurred by it under, this Agreement and the other Credit Documents in respect
of matters occurring during the time it was a Bank under this Agreement.
6.2. LIMITATION ON TYPES OF LOANS. Anything in this Agreement to the
contrary notwithstanding, if, with respect to any Eurodollar Loans:
(a) the Agent determines (which determination shall be conclusive absent
manifest error) that quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Rate" in SECTION 1.1 are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining the rate of interest for such Loans for Interest Periods therefor as
provided in this Agreement; or
(b) the Required Banks determine (which determination shall be conclusive
absent manifest error) and notify the Agent that the relevant rates of interest
referred to in the definition of "Eurodollar Rate" in SECTION 1.1 upon the basis
of which the rates of interest for such Loans are to be determined do not
accurately reflect the cost to such Banks of making or maintaining such Loans
for any proposed Interest Periods therefor; or
(c) the Agent determines (which determination shall be conclusive absent
manifest error) that by reason of circumstances affecting the Eurodollar
interbank market generally, deposits in dollars in the relevant Eurodollar
interbank market are not being offered for the applicable Interest Period and in
an amount equal to the amount of the Eurodollar Loan requested by the Company;
the Agent shall promptly notify the Company and each Bank thereof, and, so long
as such condition remains in effect, the Banks shall be under no obligation to
make Eurodollar Loans (but shall maintain until the end of the Interest Period
then in effect the Eurodollar Loans then outstanding).
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6.3. ILLEGALITY. Notwithstanding any other provision of this Agreement to
the contrary, if by reason of (x) the adoption or effectiveness of any
applicable Legal Requirement, or any change in any applicable Legal Requirement
or in the interpretation or administration thereof by any Governmental
Authority, or compliance by any Bank with any request or directive (whether or
not having the force of law) of any central bank or other Governmental Authority
or (y) circumstances affecting the relevant Eurodollar interbank market or the
position of a Bank therein, it shall at any time be unlawful or impracticable in
the sole discretion of a Bank for such Bank or its Applicable Lending Office to
(a) honor its obligation to permit the establishment of Eurodollar Loans
hereunder or (b) maintain Eurodollar Loans hereunder, then such Bank through the
Agent shall promptly notify the Company thereof, and the obligation of such Bank
to establish or maintain Eurodollar Loans hereunder shall be suspended until
such time as such Bank may again establish and maintain Eurodollar Loans, in
which case the provisions of SECTION 6.4 shall be applicable. Before giving such
notice pursuant to this SECTION 6.3, such Bank will designate a different
available Applicable Lending Office for the Eurodollar Loans of such Bank or
take such other action as the Company may reasonably request if such designation
or action is consistent with the internal policy of such Bank and legal and
regulatory restrictions, can be undertaken at no additional cost, will avoid the
need to suspend such Bank's obligation to make Eurodollar Loans hereunder and
will not, in the sole opinion of such Bank, be disadvantageous to such Bank
(PROVIDED that such Bank shall have no obligation so to designate an Applicable
Lending Office located in the United States of America).
In the event any Bank shall seek to invoke the benefits of this SECTION
6.3, the Company may give notice to such Bank (with copies to the Agent) that it
wishes to seek one or more Eligible Assignees (which may be one or more of the
Banks) to purchase and assume the Commitment, Loans, Note, Letter of Credit
Liabilities and interests in this Agreement of such Bank. Each Bank requesting
to invoke the benefits of this SECTION 6.3 agrees to sell its Commitment, Loans,
Note, Letter of Credit Liabilities and interests in this Agreement pursuant to
SECTION 12.6 (without recourse, representation or warranty except as provided in
SECTION 12.6) to any such Eligible Assignee for an amount equal to (x) the sum
of the outstanding unpaid principal of and accrued and unpaid interest on such
Loans, Note and Letter of Credit Advances, plus (y) in the case of the Issuer,
Cover for the face amount of all undrawn Letter of Credit Liabilities, plus (z)
all other fees and amounts (including a breakage charge as if such Bank had been
prepaid the amount of all of its outstanding Eurodollar Loans) owing to such
Bank under the Credit Documents, calculated, in each case, to the date on which
such Commitment, Loans, Note, Letter of Credit Liabilities and interests are
purchased, whereupon such Bank shall have no further Commitment or other
obligation to the Company hereunder or any other Credit Document in respect of
matters arising after the consummation of the purchase, but shall continue to be
entitled to the benefit of, and subject to any obligation incurred by it under,
this Agreement and the other Credit Documents in respect of matters occurring
during the time it was a Bank under this Agreement.
6.4. SUBSTITUTE ALTERNATE BASE RATE LOANS. If the obligation of any Bank
to make or maintain Eurodollar Loans shall be suspended pursuant to SECTION 6.1,
6.2 or 6.3, all Loans which would otherwise be made by such Bank as Eurodollar
Loans shall be made instead as Alternate Base
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Rate Loans (and, if an event referred to in SECTION 6.1(B) or 6.3 has occurred
and such Bank so requests by notice to the Company with a copy to the Agent,
each Eurodollar Loan of such Bank then outstanding shall be automatically
converted into an Alternate Base Rate Loan on the date specified by such Bank in
such notice which shall be the last day of the current Interest Period with
respect to such Eurodollar Loan or on such earlier date as required by law) and,
to the extent that such Eurodollar Loans are so made as (or converted into)
Alternate Base Rate Loans, all payments of principal which would otherwise be
applied to such Eurodollar Loans shall be applied instead to such Alternate Base
Rate Loans.
6.5. COMPENSATION. Subject to SECTION 12.8, the Company shall pay to the
Agent for the account of each Bank, within two Business Days after demand
therefor by such Bank through the Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Bank) to compensate it for any
loss, cost or expense incurred by it as a result of:
(a) any payment, prepayment or Conversion of a Eurodollar Loan made by
such Bank on a date other than the last day of an Interest Period for such Loan;
or
(b) any failure by the Company to borrow a Eurodollar Loan to be made by
such Bank on the date for such borrowing specified in the relevant notice of
borrowing under SECTION 5.5 or to convert an Alternate Base Rate Loan into a
Eurodollar Loan on such date after giving notice of such Conversion or to
continue a Eurodollar Loan after giving notice of such Continuation; or
(c) any payment, prepayment or Conversion of a Eurodollar Loan required by
any provision of this Agreement or otherwise made or deemed made on a date other
than the last day of an Interest Period for such Eurodollar Loan; or
(d) any cessation of the Eurodollar Rate to apply to any Loan or any part
thereof;
including, in each case, any actual loss or expense sustained or incurred or to
be sustained or incurred in liquidating or employing deposits acquired to effect
or maintain such Eurodollar Loan or any part thereof. Such compensation shall
include an amount equal to the excess, if any, as reasonably determined by each
Bank, of (1) its cost of obtaining the funds for the Loan being paid, prepaid or
converted or not borrowed, converted or continued (assumed to be the applicable
Eurodollar Rate) for the period from the date of such payment, prepayment or
Conversion or failure to borrow, convert or continue to the last day of the
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 of such failure to borrow, convert or continue) over (2) the amount of
interest (as reasonably determined by such Bank) that would be realized by such
Bank in reemploying the funds so paid, prepaid or converted or not borrowed,
converted or continued for such period or Interest Period, as the case may be.
Each determination of the amount of such compensation by a Bank shall be
conclusive and binding, absent manifest error, and may be computed using any
reasonable averaging and attribution method.
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6.6. ADDITIONAL COSTS IN RESPECT OF LETTERS OF CREDIT. If as a result of
any Regulatory Change there shall be imposed, modified or deemed applicable any
tax, reserve, special deposit or similar requirement against or with respect to
or measured by reference to Letters of Credit issued or to be issued under this
Agreement or participations in such Letters of Credit, and the result shall be
to increase the cost to the Issuer or any Bank of issuing or maintaining any
Letter of Credit or any participation therein, or reduce any amount receivable
by the Issuer or any Bank in respect of any Letter of Credit or any
participation therein (which increase in cost, or reduction in amount
receivable, shall be the result of such Issuer's or such Bank's reasonable
allocation of the aggregate of such increases or reductions resulting from such
event), such Issuer or such Bank shall notify the Company through the Agent, and
upon demand therefor by such Issuer or such Bank through the Agent, the Company
(subject to SECTION 12.8) shall pay to the Issuer or such Bank, from time to
time as specified by the Issuer or such Bank, such additional amounts as shall
be sufficient to compensate the Issuer or such Bank for such increased costs or
reductions in amount. Before making such demand pursuant to this SECTION 6.6,
the Issuer or such Bank will designate a different available Applicable Lending
Office for the Letter of Credit or participation or take such other action as
the Company may request, if such designation or action will avoid the need for,
or reduce the amount of, such compensation and will not, in the sole opinion of
the Issuer or such Bank, be disadvantageous to the Issuer or such Bank. A
statement as to such increased costs or reductions in amount incurred by the
Issuer or such Bank, submitted by the Issuer or such Bank to the Company, shall
cover amounts accruing under this SECTION 6.6 with respect to a period beginning
not earlier than 120 days from the date thereof, shall be conclusive as to the
amount thereof, absent manifest error, and may be prepared using any reasonable
averaging and attribution method.
In the event any Bank shall seek compensation pursuant to this SECTION
6.6, the Company may give notice to such Bank (with copies to the Agent) that it
wishes to seek one or more Eligible Assignees (which may be one or more of the
Banks) to purchase and assume the Commitment, Loans, Note, Letter of Credit
Liabilities and interests in this Agreement of such Bank. Each Bank requesting
compensation pursuant to this SECTION 6.6 each agrees to sell its Commitment,
Loans, Note, Letter of Credit Liabilities and interests in this Agreement
pursuant to SECTION 12.6 (without recourse, representation or warranty except as
provided in SECTION 12.6) to any such Eligible Assignee for an amount equal to
(x) the sum of the outstanding unpaid principal of and accrued and unpaid
interest on such Loans, Note and Letter of Credit Advances, plus (y) all other
fees and amounts (including any compensation claimed by such Bank under this
SECTION 6.6 and including a breakage charge as if such Bank had been prepaid the
amount of all of its outstanding Eurodollar Loans) owing to such Bank under the
Credit Documents, calculated, in each case, to the date on which such
Commitment, Loans, Note, Letter of Credit Liabilities and interests in this
Agreement are purchased, whereupon such Bank shall have no further Commitment or
other obligation to the Company under this Agreement or any other Credit
Document in respect of matters arising after the consummation of such purchase,
but shall continue to be entitled to the benefit of, and subject to any
obligation incurred by it under, this Agreement and the other Credit Documents
in respect of matters occurring during the time it was a Bank under this
Agreement.
In the event any Issuer shall seek compensation pursuant to this SECTION
6.6, the Company
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may give notice to such Issuer (with copies to the Agent) that it wishes another
of the Banks to become the Issuer for future Letters of Credit (including any
Letters of Credit which the Company may arrange to substitute for any Letter of
Credit issued by the retiring Issuer), whereupon such retiring Issuer shall have
no further obligation to issue Letters of Credit, but shall continue to be
entitled to the benefit of, and subject to any obligation incurred by it under,
this Agreement and the other Credit Documents in respect of matters occurring
and Letters of Credit issued during the time it was the Issuer under this
Agreement. Notwithstanding its retirement, the retiring Issuer shall continue to
be entitled to reimbursement of any and all Letter of Credit Advances made by it
under each Letter of Credit issued by it. All fees and other amounts (including
any compensation claimed by the retiring Issuer under this SECTION 6.6) owing to
the retiring Issuer under the Credit Documents shall be paid to the retiring
Issuer at the time of its retirement as Issuer, and the retiring Issuer shall
continue to be the Issuer for all purposes of this Agreement with respect to any
outstanding Letters of Credit theretofore issued by it.
6.7. CAPITAL ADEQUACY. If any Bank shall have determined that
(a) the adoption after the date of this Agreement or the effectiveness
after the date of this Agreement (regardless of whether previously announced) of
any applicable Legal Requirement or treaty regarding capital adequacy, or
(b) any change after the date of this Agreement in any existing or future
Legal Requirement or treaty regarding capital adequacy, or
(c) any change after the date of this Agreement in the interpretation or
administration of any existing or future Legal Requirement or treaty regarding
capital adequacy by any Governmental Authority or comparable agency charged with
the interpretation or administration thereof, or
(d) compliance by any Bank (or its Applicable Lending Office) with any
request or directive after the date of this Agreement regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority or
comparable agency
has or would have the effect of reducing the rate of return on the capital of
such Bank (or any holding company of which such Bank is a part) as a consequence
of its obligations under this Agreement and the other Credit Documents to a
level below that which such Bank or holding company could have achieved but for
such adoption, change or compliance by an amount deemed by such Bank or holding
company to be material, then, from time to time, on demand by such Bank (with a
copy to the Agent), the Company (subject to SECTION 12.8) shall pay to such Bank
such additional amount or amounts as will compensate such Bank or holding
company for such reduction. The certificate of any Bank setting forth such
amount or amounts as shall be necessary to compensate it and the basis therefor
shall cover amounts accruing under this SECTION 6.7 with respect to a period
beginning not earlier than 120 days from the date thereof and shall be
conclusive and binding, absent manifest error. The Company shall pay the amount
shown as due on any such certificate upon delivery of such certificate. In
preparing such certificate, a Bank may take into
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consideration such Bank's and such holding company's policies with respect to
capital adequacy, employ such assumptions and allocations of costs and expenses
as it shall in good faith deem reasonable, and use any reasonable averaging and
attribution method.
In the event any Bank shall seek compensation pursuant to this SECTION
6.7, the Company may give notice to such Bank (with copies to the Agent) that it
wishes to seek one or more Eligible Assignees (which may be one or more of the
Banks) to purchase and assume the Commitment, Loans, Note, Letter of Credit
Liabilities and interests in this Agreement of such Bank. Each Bank requesting
compensation pursuant to this SECTION 6.7 agrees to sell its Commitment, Loans,
Note, Letter of Credit Liabilities and interests in this Agreement pursuant to
SECTION 12.6 (without recourse, representation or warranty except as provided in
SECTION 12.6) to any such Eligible Assignee for an amount equal to (x) the sum
of the outstanding unpaid principal of and accrued and unpaid interest on such
Loans, Note and Letter of Credit Advances, plus (y) in the case of the Issuer,
Cover for the face amount of all undrawn Letter of Credit Liabilities, plus (z)
all other fees and amounts (including any compensation claimed by such Bank
under this SECTION 6.7 and including a breakage charge as if such Bank had been
prepaid the amount of all of its outstanding Eurodollar Loans) owing to such
Bank under the Credit Documents, calculated, in each case, to the date on which
such Commitment, Loans, Note, Letter of Credit Liabilities and interests are
purchased, whereupon such Bank shall have no further Commitment or other
obligation to the Company under this Agreement or any other Credit Document in
respect of matters arising after the consummation of such purchase, but shall
continue to be entitled to the benefit of, and subject to any obligation
incurred by it under, this Agreement and the other Credit Documents in respect
of matters occurring during the time it was a Bank under this Agreement.
Section 7. CONDITIONS PRECEDENT.
7.1. INITIAL CONDITIONS PRECEDENT. The effectiveness of this Agreement,
the obligation of each Bank to make its initial Loan to the Company pursuant to
this Agreement and the obligation of the Issuer to issue the first Letter of
Credit pursuant to this Agreement are each subject to the following conditions
precedent, each of which shall have been fulfilled in the sole discretion of the
Agent:
(a) CORPORATE ACTION AND STATUS. The Agent shall have received
copies of the Organizational Documents of the Company certified by the
Secretary of the Company, and resolutions of the Board of Directors of the
Company, certified by the Secretary of the Company, for all corporate
action taken by the Company authorizing the execution, delivery and
performance of the Credit Documents to which the Company is a party,
together with such certificates as may be appropriate to demonstrate the
existence, qualification and good standing of and payment of taxes by each
member of the Combined Group in each jurisdiction in which such
qualification is required to make true the representations contained in
SECTION 8.1.
(b) INCUMBENCY. The Company shall have delivered to the Agent a
certificate in
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respect of the name and signature of each officer who (i) is authorized to
sign on its behalf the applicable Credit Documents to which the Company is
a party and (ii) will, until replaced by another officer or officers duly
authorized for that purpose, act as its representative for the purposes of
signing documents and giving notices and other communications in
connection with this Agreement and the other Credit Documents. The Agent
and each Bank may conclusively rely on such certificates until they
receive notice in writing from the Company to the contrary.
(c) NOTES. The Agent shall have received the appropriate Note of the
Company for each Bank, each duly completed and executed.
(d) SUBSIDIARY GUARANTEES. Each Subsidiary Guarantor shall have duly
executed and delivered to the Agent a Subsidiary Guarantee. The Agent
shall have received copies of the Organizational Documents of each
Subsidiary Guarantor certified by the Secretary of such Subsidiary
Guarantor, and resolutions of the Board of Directors of each Subsidiary
Guarantor, certified by the Secretary of such Subsidiary Guarantor, for
all corporate action taken by such Subsidiary Guarantor authorizing the
execution, delivery and performance of the Subsidiary Guarantee to which
such Subsidiary Guarantor is a party, together with such certificates as
may be appropriate to demonstrate the existence, qualification and good
standing of and payment of taxes by such Subsidiary Guarantor in the
jurisdiction of its incorporation or organization. The Company shall have
delivered to the Agent a certificate in respect of the name and signature
of each officer of each Subsidiary Guarantor who is authorized to sign on
its behalf the Subsidiary Guarantee to which such Subsidiary Guarantor is
a party.
(e) CREDIT DOCUMENTS. The Company and each Subsidiary Guarantor
shall have duly executed and delivered the other Credit Documents to which
it is a party, and each such Credit Document shall be in Proper Form. Each
such Credit Document shall be in substantially the form furnished to the
Banks prior to their execution of this Agreement, together with such
non-material changes therein as the Agent may approve in its discretion.
The Company shall have paid to the Agent all fees and expenses in the
amounts previously agreed upon in writing among the Company and the Agent
and all amounts due under SECTION 12.3.
(f) OPINION OF COUNSEL TO THE COMPANY. The Agent shall have received
the opinions of Andrews & Kurth L.L.P. and of David L. Hicks, counsel to
the Company, substantially in the forms of SCHEDULES II and III,
respectively.
(g) COUNTERPARTS. The Agent shall have received counterparts of each
of the Credit Documents duly executed and delivered by or on behalf of
each of the parties thereto (or, in the case of any Bank as to which the
Agent shall not have received such a counterpart, the Agent shall have
received evidence satisfactory to it of the execution and delivery by such
Bank of a counterpart hereof).
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(h) MERGER. The Agent shall have received evidence satisfactory to
it in its discretion that the Merger has occurred.
(i) CONSENTS. The Agent shall have received evidence satisfactory to
it in its discretion that all authorizations, approvals and consents of,
and all filings and registrations with, all Governmental Authorities, the
holders of the Santa Fe Senior Subordinated Notes, the holders of the
Snyder Senior Subordinated Notes, and each other Person, if any, required
in connection with the Loans and Letters of Credit or the execution,
delivery and performance of the Credit Documents have been received and
remain in full force and effect.
(j) OTHER DOCUMENTS. The Agent shall have received such other
documents consistent with the terms of this Agreement and relating to the
transactions contemplated hereby as the Agent may reasonably request.
(k) TERMINATION OF EXISTING CREDIT FACILITIES. The Agent shall have
received evidence satisfactory to it in its sole discretion that the
Existing Santa Fe Credit Facility and the Existing Snyder Credit Facility
shall have been terminated; that all borrowings under each such facility
have been repaid, and that all commitments under each such facility have
terminated.
(l) SENIOR SUBORDINATED DEBT. The Agent shall have received evidence
satisfactory to it in its discretion that the aggregate principal amount
of Total Debt outstanding pursuant to the Santa Fe Indenture does not
exceed $100,000,000 and that the aggregate principal amount of Total Debt
outstanding pursuant to the Snyder Indenture does not exceed $175,000,000.
All provisions and payments required by this SECTION 7.1 are subject to
the provisions of SECTION 12.8.
7.2. ALL LOANS AND LETTERS OF CREDIT. The obligation of each Bank to make
any Loan (including its initial Loan) to be made by it hereunder and the
obligation of the Issuer to issue any Letter of Credit (including the first
Letter of Credit) are each subject to the additional conditions precedent that,
as of the date of such Loan or such issuance, and after giving effect thereto:
(a) for each Loan which is not a Conversion or a Continuation, no
Default shall have occurred and be continuing;
(b) for each Loan which is not a Conversion or a Continuation, and
for each Letter of Credit, there shall have been no Material Adverse
Change since the date of this Agreement;
(c) for each Loan which is not a Conversion or a Continuation, and
for each Letter of Credit, all representations and warranties made in each
Credit Document shall be
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true and correct in all material respects on and as of the date of the
making of such Loan or the issuance of such Letter of Credit, with the
same force and effect as if made on and as of such date (except as the
same are expressly stated in the Credit Documents to be made only as of a
specific earlier date, in which case the same shall have been true and
correct in all material respects as of such earlier date);
(d) except for Loans and Letters of Credit made or issued on the
date of this Agreement, the Company shall have delivered to the Agent a
completed Request for Extension of Credit (and, in the case of a Letter of
Credit, a completed Application) within the time specified in SECTION 5.5;
and
(e) the making of such Loan or the issuance of such Letter of Credit
shall not be prohibited by, or subject the Agent or such Bank to any
penalty under, any Legal Requirement applicable to the Agent or such Bank.
The borrowing of the initial Loans and the issuance of the initial Letter
of Credit under this Agreement and each Request for Extension of Credit in
respect of each Loan and each Letter of Credit by the Company hereunder shall
constitute and include a representation and warranty by the Company to the
effect set forth in SUBSECTIONS (A) through (C) (if applicable) of this SECTION
7.2 (both as of the date of such notice and, unless the Company otherwise
notifies the Agent prior to the date of such borrowing or issuance, as of the
date of such borrowing or issuance).
7.3. CONVERSIONS AND CONTINUATIONS OF EURODOLLAR LOANS. The obligation of
each of the Banks to convert any Alternate Base Rate Loan into a Eurodollar Loan
or to continue any Eurodollar Loan for a new Interest Period is subject to the
conditions precedent that on the date of such Conversion or Continuation and
after giving effect thereto (a) no Default shall have occurred and be
continuing, (b) the Company shall have delivered to the Agent a completed Rate
Designation Notice within the time specified in SECTION 5.5, and (c) such
Conversion or Continuation shall not be prohibited by, or subject such Bank to
any penalty under, any Legal Requirement applicable to such Bank. The acceptance
of the benefits of such Conversion or Continuation shall constitute a
representation and warranty by the Company to each of the Banks to the effect
set forth in CLAUSE (A).
Section 8. REPRESENTATIONS AND WARRANTIES. To induce the Agent and the
Banks to enter into this Agreement and to extend credit under it, the Company
represents and warrants (such representations and warranties to survive any
investigation, the making of the Loans and the issuance of the Letters of
Credit) to the Banks and the Agent as follows:
8.1. CORPORATE EXISTENCE. Each member of the Combined Group (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) has all requisite power and authority, and
has all licenses, permits, authorizations, consents and approvals necessary, to
own its Property and carry on its business as now being conducted, and (c) is
qualified to do business, and is in good standing, in all jurisdictions in which
any of the Properties which it owns are located or the nature of the business
conducted by it makes such qualification necessary or advisable, unless the
failure to be so qualified or in good standing would not
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individually or in the aggregate have a material adverse effect on the business,
financial condition or results of operations of the Combined Group taken as a
whole.
8.2. INFORMATION.
(a) (i) The unaudited pro forma condensed combined balance sheet of Santa
Fe and its Subsidiaries as at December 31, 1998, and the related unaudited pro
forma condensed combined statements of operations for the year then ended,
together with the respective notes thereto, (ii) the unaudited consolidated
balance sheet of Santa Fe and its Subsidiaries as at March 31, 1999, and the
related unaudited consolidated statements of operations, changes in financial
position and cash flows for the quarter then ended, and (iii) the unaudited
consolidated balance sheet of Snyder and its Subsidiaries as at March 31, 1999,
and the related unaudited consolidated statements of operations, changes in
financial position and cash flows for the period then ended or the quarter then
ended, together with the respective notes thereto, each as delivered to each of
the Banks prior to the date of this Agreement, utilized assumptions which
provide a reasonable basis for presenting the significant effects of the Merger,
and the pro forma adjustments therein give appropriate effect to those
assumptions and are properly applied in the pro forma financial information.
(b) The consolidated balance sheet of Santa Fe and its Subsidiaries as at
December 31, 1998, and the related consolidated statements of operations,
changes in financial position and cash flows for the year then ended, together
with the respective notes thereto, delivered to each of the Banks prior to the
date of this Agreement fairly present in all material respects the consolidated
financial position of Santa Fe and its Subsidiaries at December 31, 1998 and
their consolidated results of operations for the year then ended in conformity
with GAAP.
(c) The consolidated balance sheet of Snyder and its Subsidiaries as at
December 31, 1998, and the related consolidated statements of operations,
changes in financial position and cash flows for the period then ended, together
with the respective notes thereto, delivered to each of the Banks prior to the
date of this Agreement fairly present in all material respects the consolidated
financial position of Snyder and its Subsidiaries at December 31, 1998 and their
consolidated results of operations for the year then ended in conformity with
GAAP.
(d) The most recent consolidated balance sheet of the Company and its
Subsidiaries and the related consolidated statements of operations, changes in
financial position and cash flows for the period then ended, together with the
respective notes thereto, delivered to each of the Banks in accordance with the
provisions of SECTION 9.1(A) or (B), as the case may be, fairly present in all
material respects the consolidated financial position of the Company and its
Subsidiaries as of such date and their consolidated results of operations for
the period then ended in conformity with GAAP.
(e) Since the date of this Agreement, there has been no Material Adverse
Change.
(f) On the date of this Agreement, there has been no Material Adverse
Change since December 31, 1998.
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(g) The Obligations are senior to all indebtedness at any time outstanding
under the Santa Fe Indenture (except as otherwise provided in connection with
the pending defeasance of the Santa Fe Indenture) and senior to all indebtedness
at any time outstanding under the Snyder Indenture (except as otherwise provided
in connection with any redemption of the Snyder Senior Subordinated Notes).
8.3. LITIGATION; COMPLIANCE. Except as disclosed in writing to the Banks
prior to the date hereof, 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, threatened, against or affecting the Company or any of
its Subsidiaries which, if adversely determined, would result in a Material
Adverse Change. The Company and its Subsidiaries comply in all material respects
with all applicable material (based on the Company and its Subsidiaries taken as
a whole) Legal Requirements (other than the Applicable Environmental Laws,
representations and warranties regarding which are found in SECTION 8.13).
Neither the Company nor any of its Subsidiaries is in default in any material
respect under, or in violation of, any material (based on the Company and its
Subsidiaries taken as a whole) judgment, order or decree of any Governmental
Authority.
8.4. NO BREACH. None of the execution and delivery of the Credit
Documents, the consummation of the transactions therein contemplated or
compliance with the terms and provisions thereof will conflict with or result in
a breach of, or require any consent that has not been obtained under, the
Organizational Documents of the Company or any of its Subsidiaries or any
material Legal Requirement (including any securities law, rule or regulation)
applicable to the Company or any of its Subsidiaries or (except for the Liens
permitted by this Agreement) result in the creation or imposition of any Lien
upon any of the revenues or Property of the Company or any of its Subsidiaries.
Such execution, delivery, consummation and compliance do not and will not
conflict with or result in a breach of any material agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound or to which any of them is subject, or
constitute a default under any such agreement or instrument.
8.5. NECESSARY ACTION. The Company and each Subsidiary Guarantor has all
necessary power and authority to execute, deliver and perform its obligations
under the Credit Documents to which it is a party and to consummate the
transactions contemplated therein. The execution, delivery and performance of
the Credit Documents by the Company and each Subsidiary Guarantor, to the extent
each is a party thereto, and the consummation by the Company and such Subsidiary
Guarantor of the transactions contemplated therein have been duly authorized by
all necessary action on the part of the Company and such Subsidiary Guarantor.
The Credit Documents have been duly and validly executed and delivered by the
Company and each Subsidiary Guarantor, to the extent each is a party thereto,
and constitute the legal, valid and binding obligations of the Company and each
Subsidiary Guarantor party thereto, enforceable in accordance with their
respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to the enforcement of creditors' rights generally
and by general equitable principles.
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8.6. APPROVALS. All authorizations, approvals and consents of, and all
filings and registrations with, all Governmental Authorities, the holders of the
Santa Fe Senior Subordinated Notes, the holders of the Snyder Senior
Subordinated Notes, and each other Person necessary for the execution, delivery
or performance of any Credit Document or the consummation by the Company or any
Subsidiary Guarantor of the transactions contemplated therein or for the
validity or enforceability thereof have been obtained and are in full force and
effect.
8.7. REGULATION U. None of the proceeds of the Loans will be used and no
Letter of Credit will be issued for the purpose of, and neither the Company nor
any Subsidiary of the Company is engaged in the business of extending credit for
the purpose of, (a) purchasing or carrying any "margin stock" as defined in
Regulation U of the Board (12 C.F.R. Part 221) or (b) reducing or retiring any
indebtedness which was originally incurred to purchase or carry margin stock, if
such purpose under either (a) or (b) above would constitute this transaction a
"purpose credit" within the meaning of said Regulation U, or for any other
purpose which would constitute this transaction a "purpose credit". Neither the
Company nor any Subsidiary of the Company is engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stocks. Neither the Company nor any Subsidiary of
the Company nor any Person acting on behalf of the Company or any Subsidiary of
the Company has taken or will take any action which might cause any of the
Credit Documents, including this Agreement, to violate Regulation U or any other
regulation of the Board, or to violate any similar provision of the Securities
Exchange Act of 1934, as amended, or any rule or regulation under any such
provision thereof.
8.8. ERISA. The Company and each ERISA Affiliate have fulfilled their
contribution obligations under each Plan subject to Title IV of ERISA and have
fulfilled their obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan subject to Title IV of ERISA, and in all other
regards with respect to each Plan are in material compliance with the applicable
provisions of ERISA, the Code, and all other applicable laws, regulations and
rules, to the extent that noncompliance with such provisions would result in a
Material Adverse Change. The Company has no knowledge of any event with respect
to each Plan which could result in a Material Adverse Change.
8.9. TAXES. The Company and its Subsidiaries have filed all income tax
returns and all other material tax returns which are required to be filed by
them and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by any of them, except to the extent the same may be
contested in good faith by appropriate proceedings diligently conducted for
which adequate reserves have been established in accordance with GAAP. The
charges, accruals and reserves on the books of the Company and its Subsidiaries
in respect of taxes and other governmental charges, as made on a periodic basis,
are adequate.
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8.10. SUBSIDIARIES. SCHEDULE I as supplemented from time to time by notice
from the Company to the Agent is a complete and correct list of all Subsidiaries
of the Company on the date hereof. All Capital Stock of the Restricted
Subsidiaries directly or indirectly owned by the Company is free and clear of
Liens (except Permitted Encumbrances), and all such Capital Stock is validly
issued, fully paid and non-assessable.
8.11. INVESTMENT COMPANY ACT. No member of the Combined Group is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or directly or indirectly controlled by or acting on behalf of any
Person which is an "investment company", within the meaning of said Act.
8.12. PUBLIC UTILITY HOLDING COMPANY ACT; FEDERAL POWER ACT. No member of
the Combined Group is a "public-utility company", or an "affiliate" or a
"subsidiary company" of a "public-utility company", or a "holding company", or
an "affiliate" or a "subsidiary company" of a "holding company" or of a
"subsidiary company" of a "holding company," as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended, or a "public utility" as
such term is defined in the Federal Power Act, as amended.
8.13. ENVIRONMENTAL MATTERS. Except as disclosed in writing to the Agent
prior to the date hereof, the Company and its Subsidiaries, and the plants and
sites of each, have complied with all Applicable Environmental Laws, except, in
any such case, where such failure to so comply would not result in a Material
Adverse Change. Without limiting the generality of the preceding sentence,
neither the Company nor any of its Subsidiaries has received notice of or has
actual knowledge of any actual or claimed or asserted failure so to comply with
Applicable Environmental Laws or of any other Environmental Claim which alone or
together with all other such failures or Environmental Claims is material and
would result in a Material Adverse Change. Except as disclosed in writing to the
Agent prior to the date hereof, neither the Company nor any of its Subsidiaries
nor their plants or other sites manage, generate or dispose of, or during their
respective period of use, ownership, occupancy or operation by the Company or
its Subsidiaries have managed, generated, released or disposed of, any hazardous
wastes, solid wastes, petroleum substances, hazardous substances, hazardous
materials, toxic substances or toxic pollutants, as those terms are used or
defined in the Applicable Environmental Laws, in material violation of or in a
manner which would result in liability under the Applicable Environmental Laws
or any other applicable Legal Requirement, or in a manner which would result in
an Environmental Claim except where such noncompliance or liability or
Environmental Claim would not result in a Material Adverse Change. The
representation and warranty contained in this SECTION 8.13 is based in its
entirety upon (a) current interpretations and enforcement policies that have
been publicly disseminated and are used by Governmental Authorities charged with
the enforcement of the Applicable Environmental Laws or which apply to the
Company or any of its Subsidiaries with respect to any Property or sites in a
particular jurisdiction and (b) current levels of publicly disseminated
scientific knowledge concerning the detection of, and the health and
environmental risks associated with the discharge of, substances and pollutants
regulated pursuant to the Applicable Environmental Laws.
8.14. TITLE.
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(a) Each member of the Combined Group has good and defensible title to the
oil, gas and mineral Properties and related facilities most recently identified
to the Bank as owned by it.
(b) Such Properties and facilities are free and clear of all Liens, except
Liens permitted hereby.
(c) All oil, gas and mineral leases and leasehold estates, gas purchase
and sales contracts and other agreements comprising or relating to any of such
Properties are valid and subsisting and in full force and effect, except for
those leases, estates, contracts, easements, rights-of-way and agreements which
are in the aggregate not material to such oil, gas and mineral Properties, taken
as a whole.
(d) All rights, permits, easements, servitudes and rights-of-way, failure
to have or maintain which would materially interfere with the development,
maintenance and operation of such Properties so as to result in a Material
Adverse Change, have been obtained and are in full force and effect.
8.15. YEAR 2000 COMPLIANCE. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i) the computer systems
of the Company and its Subsidiaries and (ii) equipment containing embedded
microchips (including systems and equipment supplied by others or with which the
systems of the Company and its Subsidiaries interface) and the testing of all
such systems and equipment, as so reprogrammed, will be completed by September
30, 1999. The cost to the Company and its Subsidiaries of such reprogramming and
testing and of the reasonably foreseeable consequences of year 2000 to the
Company and its Subsidiaries (including, without limitation, reprogramming
errors and the failure of others' systems or equipment) will not result in a
Default or result in a Material Adverse Change. Except for such of the
reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information systems of the Company and its Subsidiaries
are and, with ordinary course upgrading and maintenance, will continue for the
term of this Agreement to be, sufficient to permit the Company to conduct its
business without resulting in a Material Adverse Change.
Section 9. COVENANTS. The Company covenants to and agrees with the Banks
and the Agent that until the termination of this Agreement pursuant to SECTION
12.7:
9.1. FINANCIAL STATEMENTS AND CERTIFICATES. The Company will deliver:
(a) to each Bank, as soon as practicable and in any event within 45 days
after the end of each quarterly period (other than the last quarterly period) in
each fiscal year, consolidated and consolidating statements of operations,
stockholders' equity and cash flows of the Company and its Subsidiaries for the
period from the beginning of the then-current fiscal year to the end of such
quarterly period, and a consolidated and consolidating balance sheet of the
Company and its Subsidiaries as of the end of such quarterly period, setting
forth (1) as to each account affected thereby, all eliminating entries for the
Unrestricted Subsidiaries as a group and (2) the resulting
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consolidated and consolidating figures for the Company and the Restricted
Subsidiaries, and setting forth in each case in comparative form figures as of
the end of and for the corresponding period in the preceding fiscal year, all in
reasonable detail and unaudited but certified by an authorized financial officer
of the Company as fairly presenting the financial position and results of
operations of the Company and its Subsidiaries as of the date thereof and the
period then ended, subject to changes resulting from year-end adjustments;
(b) to each Bank, as soon as practicable and in any event within 90 days
after the end of each fiscal year, consolidated and consolidating statements of
operations, stockholders' equity and cash flows of the Company and its
Subsidiaries for such year, and a consolidated and consolidating balance sheet
of the Company and its Subsidiaries as of the end of such fiscal year, setting
forth (1) as to each account affected thereby, all eliminating entries for the
Unrestricted Subsidiaries as a group and (2) the resulting consolidating figures
for the Company and the Restricted Subsidiaries, and setting forth in each case
in comparative form corresponding consolidating figures from the preceding
annual audit, all in reasonable detail and which shall be reported on by
PricewaterhouseCoopers LLP or other independent public accountants of recognized
national standing selected by the Company whose report shall (A) contain an
opinion that shall be unqualified as to the scope or limitations imposed by the
Company and shall not be subject to any other material qualification and (B)
state that such financial statements present fairly, in all material respects,
the financial position of the Company and its Subsidiaries at the dates
indicated and their cash flows and the results of their operations and the
changes in their financial position for the periods indicated in conformity with
GAAP, and shall be accompanied by a report of such independent public
accountants stating that (W) such audit was made for the purpose of forming an
opinion on the consolidated financial statements taken as a whole; (X) the
consolidating information set forth therein is presented for purposes of
additional analysis rather than to present the financial position, results of
operations and cash flows of the individual companies; (Y) such consolidating
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements, and (Z) in such independent public
accountants' opinion, such consolidating information is fairly stated in all
material respects in relation to the consolidated financial statements taken as
a whole, with such changes thereto as such accountants reasonably determine to
be appropriate under the circumstances;
(c) to each Bank, promptly upon transmission thereof, copies of all
financial statements, proxy statements, notices and reports as it shall send to
its public stockholders and copies of all registration statements (without
exhibits, and other than registration statements and reports relating to
employee benefit or compensation plans) and all reports which it files with the
Securities and Exchange Commission (or any body or agency succeeding to any or
all of the functions of the Securities and Exchange Commission);
(d) to each Bank, promptly upon receipt thereof, a copy of each other
report submitted to the Company or any of its Subsidiaries by independent
accountants in connection with any annual, interim or special audit made by them
of the books of the Company or any such Subsidiary;
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(e) to each Bank, as soon as practicable and in any event within three
days after any executive officer of the Company obtains knowledge (1) of any
Default or any condition or event which, in the opinion of management of the
Company, would result in a Material Adverse Change (to the extent affecting the
Company and its Subsidiaries in a materially different manner or extent than the
oil and gas industry generally); (2) that any Person has given any notice to the
Company or any of its Subsidiaries or taken any other action with respect to a
claimed default or event or condition of the type referred to in SECTION 10.1(B)
or (N); (3) of any write-down equal to or greater than $10,000,000 resulting
from an impairment of the value of oil and gas assets; (4) of the institution of
any litigation involving claims against the Company or any of its Subsidiaries
equal to or greater than $10,000,000 with respect to any single cause of action
or of any adverse determination in any court proceeding in any litigation
involving a potential liability to the Company or any of its Subsidiaries equal
to or greater than $10,000,000 with respect to any single cause of action which
makes the likelihood of an adverse determination in such litigation against the
Company or such Subsidiary substantially more probable; and (5) of any
regulatory proceeding which, if determined adversely to the Company, would
(alone or with other factors) result in a Material Adverse Change (to the extent
affecting the Company and its Subsidiaries in a materially different manner or
extent than the oil and gas industry generally), an Officer's Certificate
specifying the nature and period of existence of any such Default, condition or
event, or specifying the notice given or action taken by such Person and the
nature of any such claimed Default, event or condition, or specifying the
details of such proceeding, litigation or dispute and, in each case, what action
the Company and any affected Subsidiary has taken, is taking or proposes to take
with respect thereto;
(f) to each Bank, (1) promptly after the filing or receiving thereof,
copies of all annual reports and such other material reports and notices which
the Company or any ERISA Affiliate files under ERISA with the Internal Revenue
Service, the PBGC, the U.S. Department of Labor or any entity succeeding to any
or all of their respective functions with respect to a Plan that is subject to
Title IV of ERISA; (2) promptly upon acquiring knowledge of any "reportable
event" (as defined in Section 4043 of ERISA) or of any "prohibited transaction,"
as such term is defined in the Code or ERISA, in connection with any Plan which
may result in a Material Adverse Change, a statement executed by the President
or Chief Financial Officer of the Company or the applicable ERISA Affiliate,
setting forth the details thereof and the action which the Company or the ERISA
Affiliate proposes to take with respect thereto and, when known, any action
taken by the PBGC, the Internal Revenue Service, the U.S. Department of Labor
(or any entity succeeding to any or all of the functions of any such entity)
with respect thereto; (3) promptly after the filing or receiving thereof by the
Company or any ERISA Affiliate, any notice of the institution of any proceedings
or other actions which may result in the termination of any Plan or notice of
complete or partial withdrawal liability under Title IV of ERISA, and (4) each
request for waiver of the funding standards or extension of the amortization
periods required by Sections 303 and 304 of ERISA or Section 412 of the Code
promptly after the request is submitted by the Company or any ERISA Affiliate,
to the Secretary of the Treasury, the U.S. Department of Labor or the Internal
Revenue Service (or any entity succeeding to any or all of the functions of any
such entity), as the case may be;
(g) to the Agent, (i) no later than the first Quarterly Date after the
formation or
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acquisition of any Subsidiary of the Company, notice of such formation or
acquisition stating the name, jurisdiction of organization, percentage owned by
the Company, whether such Subsidiary is a Restricted Subsidiary or an
Unrestricted Subsidiary, and other relevant information, and (ii) promptly upon
the designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted
Subsidiary pursuant to SECTION 9.17, notice of such designation; and
(h) with reasonable promptness, such other information respecting the
business, financial condition or results of operations of the Company or any of
its Subsidiaries as the Agent or any Bank (through the Agent) may reasonably
request.
Additionally, the Company will deliver to each Bank:
(x) Together with each delivery of financial statements required by
SUBSECTION (A) above, an Officer's Certificate demonstrating (with applicable
computations in reasonable detail) compliance by the Company and the Restricted
Subsidiaries with the provisions of SECTIONS 9.6, 9.7, 9.8, 9.9, 9.10, 9.11,
9.12, 9.14, OR 9.15 as at the date of the balance sheet included in such
financial statements and stating that at the date of such Officer's Certificate
there exists no Default, or, if any Default exists, specifying the nature and
period of existence thereof and what action the Company proposes to take with
respect thereto; and
(y) Together with each delivery of financial statements required by
SUBSECTION (B) above, a certificate of such accountants stating that, in
conducting the audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards they have obtained no
knowledge of any Default arising under SECTION 10.1(A), (B) or (I) or any
Default arising under SECTION 10.1(D) that occurs as result of the breach or
violation by the Company or the Restricted Subsidiaries of SECTIONS 9.6, 9.7,
9.8, 9.9, 9.10, 9.11, 9.12, 9.14 OR 9.15 or, if they have obtained knowledge of
any such Default, specifying the nature and period of existence thereof. Such
accountants, however, shall not be liable to the Agent or any Bank by reason of
their failure to obtain knowledge of any such Default which would not be
disclosed in the course of an audit conducted in accordance with generally
accepted auditing standards.
9.2. INSPECTION OF PROPERTY. The Company will permit, and cause each of
its Subsidiaries to permit, any Person designated in writing by any Bank, at
such Bank's expense and risk, to visit and inspect any of the Properties of the
Company and its Subsidiaries; and also to examine the corporate books and
financial records of the Company and its Subsidiaries and to make copies thereof
or extracts therefrom and to discuss the affairs, finances and accounts of such
Persons with the executive officers of the Company and its Subsidiaries, the
petroleum reserve engineers employed by the Company and its Subsidiaries and the
Company's independent public accountants, all at such reasonable times, with a
representative of the Company present and as often as such Bank may reasonably
request, and will assist such Person or Persons in all such activities.
9.3. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company will, and will cause
each of its Subsidiaries and each of its Affiliates that are controlled by the
Company or its Subsidiaries to,
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comply in a timely fashion with, or operate pursuant to valid waivers of the
provisions of, all Applicable Environmental Laws, except where non-compliance
would neither (a) result in a Material Adverse Change nor (b) subject the Agent
or any Bank to any liability for such non-compliance (PROVIDED that the Company
shall not be in default of this CLAUSE (B) if the Company indemnifies each of
the Agent, Banks or any of them subjected to such liability and provides
collateral to secure such indemnification, all to the extent required by the
Person subjected to such liability in its sole and unfettered discretion). THE
COMPANY AGREES TO INDEMNIFY AND HOLD THE AGENT AND EACH BANK, AND THEIR
RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES HARMLESS FROM ANY LOSS, LIABILITY,
CLAIM OR EXPENSE WHICH ANY SUCH PERSON MAY INCUR OR SUFFER AS A RESULT OF A
BREACH BY THE COMPANY OR ITS SUBSIDIARIES OR AFFILIATES, AS THE CASE MAY BE, OF
THIS COVENANT. The Company shall not be deemed to have breached or violated this
SECTION 9.3 if the Company or the applicable Subsidiary or Affiliate, as the
case may be, is challenging in good faith by appropriate proceedings diligently
pursued, and subject to the indemnification obligations of this SECTION 9.3, the
application or enforcement of any such Applicable Environmental Laws for which
adequate reserves have been established in accordance with GAAP.
9.4. PAYMENT OF TAXES. The Company will, and will cause each of its
Subsidiaries to, pay, or have paid on its behalf, before the same become
delinquent all taxes, assessments and governmental charges imposed upon it or
upon its Property, except to the extent contested in good faith by appropriate
proceedings diligently conducted for which adequate reserves have been
established in accordance with GAAP.
9.5. MAINTENANCE OF INSURANCE. The Company and each of its Subsidiaries
will carry and maintain insurance in accordance with industry standards by
financially sound and reputable insurers, insurance of the kinds, covering the
risks and in the relative proportionate amounts customarily carried by companies
engaged in the same or similar businesses and similarly situated.
9.6. NET WORTH. The Company will not permit the Consolidated Net Worth at
any time to be less than the total of (a) $565,000,000 PLUS or MINUS, as the
case may be, (b) the Consolidated Net Worth Floor Adjustment as of such time.
9.7. TOTAL DEBT TO EBITDAX. The Company will not at any time create,
incur, assume or suffer to exist any Total Debt of the Combined Group which
exceeds in the aggregate the product of (a) 3.50 multiplied by (b) EBITDAX for
the four consecutive fiscal quarters then most recently ended.
9.8 RESTRICTED PAYMENTS. The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, make any Restricted Payment,
if immediately thereafter and after giving effect thereto, any Default or Event
of Default would exist; PROVIDED, that any Restricted Subsidiary may declare and
pay dividends and make distributions to the Company and may declare and pay
dividends and make distributions to any other Restricted Subsidiary of which it
is a Subsidiary.
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9.9. LIENS. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any Lien of any kind upon any of its or their respective Properties (including
the Capital Stock of any Restricted Subsidiary), whether now owned or hereafter
acquired, or any revenue or profits therefrom, other than and except for:
(a) Permitted Encumbrances;
(b) Liens securing indebtedness of a Restricted Subsidiary owing to
the Company or to a Wholly-Owned Restricted Subsidiary;
(c) Liens on the Capital Stock of Unrestricted Subsidiaries;
(d) Liens existing on any Property of a Person at the time such
Person becomes a Restricted Subsidiary, or Liens existing prior to the
time of acquisition upon any Property acquired by the Company or any
Restricted Subsidiary through purchase, merger or consolidation, or
otherwise; PROVIDED, that except as otherwise permitted by this SECTION
9.9, any such Lien (i) shall not encumber any other Property of the
Company or any Restricted Subsidiary and (ii) shall not have been created
or modified in any respect in anticipation of such Person's becoming a
Restricted Subsidiary or in anticipation of the acquisition by the Company
or any Restricted Subsidiary of the real property subject thereto (other
than to reflect the assumption of such Lien or other ministerial acts
relating thereto); PROVIDED, HOWEVER, that the aggregate amount of
indebtedness secured by all Liens permitted pursuant to this CLAUSE (D)
shall not exceed $25,000,000 in the aggregate for all Persons;
(e) Liens placed on Property at the time of acquisition thereof to
secure all or a portion of (or to secure Total Debt incurred to pay all or
a portion of) the purchase price of such acquisition; PROVIDED that (i)
such Property is not and shall not become encumbered in an amount in
excess of the lesser of the cost or the fair market value thereof; and
(ii) any such Lien shall not encumber any other Property of the Company or
a Restricted Subsidiary; PROVIDED, HOWEVER, that the aggregate amount of
indebtedness secured by all Liens permitted pursuant to this CLAUSE (E)
shall not exceed $25,000,000 in the aggregate for all Persons; and
(f) Liens (other than Liens on the Capital Stock of a Restricted
Subsidiary) securing indebtedness in an aggregate amount for all such
Persons not to exceed $50,000,000 at any one time outstanding.
9.10. FUNDAMENTAL CHANGES.
(a) The Company will not, directly or indirectly, enter into any
transaction of merger or consolidation, or convey, transfer, or lease its
Properties and assets substantially as an entirety to any Person, unless:
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(i) either (A) the Company (in any merger or consolidation) is the
surviving entity, or (B) the entity formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the Properties and assets of the Company
substantially as an entirety (the "SUCCESSOR ENTITY") shall either (x)
immediately after giving effect of such merger, consolidation, conveyance,
transfer or lease, have then-effective ratings (or implied ratings)
published by Moody's and S&P applicable to such Successor Entity's senior,
unsecured, non-credit-enhanced, long term indebtedness for borrowed money,
which ratings shall be Ba1 or higher (if assigned by Moody's) or BB+ or
higher (if assigned by S&P), or (y) be acceptable to the Required Banks in
their sole and absolute determination;
(ii) any Successor Entity shall be a Person organized and existing
under the laws of the United States of America, any state thereof or the
District of Columbia, and shall expressly assume, by amendment to this
Agreement executed by the Company and such Successor Entity and delivered
to the Agent, the due and punctual payment of the Obligations and the
performance or observance of every covenant hereof on the part of the
Company to be performed or observed;
(iii) immediately after giving effect to such transaction, no
Default and no Event of Default shall have occurred and be continuing; and
(iv) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, Properties or assets of the Company or any
Restricted Subsidiary would become subject to a Lien which would not be
permitted by SECTION 9.9, the Company or the Successor Entity, as the case
may be, shall take such steps as shall be necessary effectively to secure
the Obligations equally and ratably with (or prior to) all indebtedness
secured thereby.
(b) The Company shall not permit any Restricted Subsidiary, directly
or indirectly, to enter into any transaction of merger or consolidation, or
convey, transfer or lease its Properties and assets substantially as an entirety
to any Person, unless, immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing.
Upon the occurrence of any merger, consolidation, conveyance, transfer or
lease, the Company shall promptly deliver to the Agent an Officer's Certificate
demonstrating (with applicable computations in reasonable detail) compliance by
the Company and the Restricted Subsidiaries with the provisions of SECTIONS 9.6
AND 9.7 after giving effect to such transaction and stating that immediately
after and after giving effect to such transaction there existed and exists no
Default or Event of Default.
9.11 ASSET SALES. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, engage in any Asset Sale, unless
(a) immediately after and after giving effect to such Asset Sale, no
Default or Event of Default shall have occurred and be continuing, and
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(b) after giving effect to such Asset Sale, the aggregate fair
market value of
(i) all assets of the Company and all Restricted Subsidiaries
Transferred in an Asset Sale (on a consolidated basis) during the period
of 12 consecutive months immediately preceding such Asset Sale, PLUS
(ii) with respect to each Restricted Subsidiary the Capital
Stock of which has been Transferred in an Asset Sale during such 12-month
period, that portion of the assets of such Restricted Subsidiary obtained
by multiplying the total assets of such Restricted Subsidiary at the time
of such Transfer times a fraction, the numerator of which is the aggregate
amount of Capital Stock of such Restricted Subsidiary so Transferred and
the denominator of which is the aggregate amount of all Capital Stock of
such Restricted Subsidiary at the time of such Transfer
shall not exceed the greater of (x) 10% of the consolidated net tangible assets
of the Company and the Restricted Subsidiaries as of the end of the fiscal
quarter immediately preceding or coinciding with such Asset Sale, or (y)
$150,000,000. Concurrently with each Asset Sale, the Company will deliver to the
Agent an Officer's Certificate stating that, immediately after and after giving
effect to such Asset Sale, there existed and exists no Default or Event of
Default.
9.12 INVESTMENTS. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, make or have any Investment in, any
Person, or make any commitment to make any such Investment, except (a) Permitted
Investments, and (b) other Investments in an aggregate amount for all such
Persons not to exceed $25,000,000 at any one time outstanding.
9.13. INDEBTEDNESS AND GUARANTEES OF INDEBTEDNESS BY RESTRICTED
SUBSIDIARIES.
(a) The Company will not permit any Restricted Subsidiary to create,
incur, suffer or permit to exist, or assume or enter into, any Total Debt,
whether direct, indirect, absolute, contingent or otherwise, except Total Debt
which does not exceed in the aggregate for all Restricted Subsidiaries
$50,000,000 at any one time outstanding.
(b) The Company will not permit any Restricted Subsidiary that is not a
Subsidiary Guarantor to Guarantee the payment of any indebtedness of the Company
unless (i) such Restricted Subsidiary simultaneously executes and delivers a
Subsidiary Guarantee of the Obligations by such Restricted Subsidiary; and (ii)
such Restricted Subsidiary waives and agrees not in any manner whatsoever to
claim or take the benefit or advantage of, any rights of reimbursement,
indemnity or subrogation or any other rights against the Company or any other
Restricted Subsidiary as a result of any payment by such Restricted Subsidiary
under its Subsidiary Guarantee until such time as the obligations Guaranteed
thereby are paid in full; PROVIDED that this SUBSECTION (B) shall not be
applicable to any Guarantee of any Restricted Subsidiary that (x) existed at the
time such Person
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became a Restricted Subsidiary and (y) was not incurred in connection with, or
in contemplation of, such Person becoming a Restricted Subsidiary.
(c) Notwithstanding the foregoing and the other provisions of this
Agreement, any Subsidiary Guarantee incurred by a Restricted Subsidiary pursuant
to this SECTION 9.13 shall provide by its terms that it shall be automatically
and unconditionally released and discharged upon the sale or disposition (by
merger or otherwise) of such Subsidiary Guarantor (or all or substantially all
of its Properties) to a Person other than the Company or another Subsidiary
Guarantor and pursuant to a transaction that is otherwise in compliance with the
terms of this Agreement; PROVIDED, HOWEVER, that any such termination shall
occur only to the extent that all obligations of such Subsidiary Guarantor under
all of its Guarantees of, and under all of its pledges of assets or other
security interests which secure, other indebtedness of the Company or any other
Restricted Subsidiary shall also terminate upon any such sale or other
disposition. The Company shall deliver to the Agent an Officer's Certificate as
to the occurrence of the terms and conditions set forth in this SECTION 9.13(C).
Each Subsidiary Guarantor that is designated as an Unrestricted Subsidiary in
accordance with SECTION 9.17 shall be released from its Subsidiary Guarantee and
all related obligations under this Agreement for so long (but only so long) as
it remains an Unrestricted Subsidiary. Notwithstanding any other provision of
this SECTION 9.13(C), all of the Subsidiary Guarantors shall be released from
their respective Subsidiary Guarantees and all related obligations under this
Agreement in the event that all obligations of the Subsidiary Guarantors under
all of their Guarantees of, and under all of their pledges of assets and other
security interests which secure, other indebtedness of the Company shall also
terminate.
9.14 SALES AND LEASEBACKS. The Company will not, and will not permit any
Restricted Subsidiary to, enter into any arrangement with any bank, insurance
company or other lender or investor (not including the Company or any
Wholly-Owned Restricted Subsidiary) or to which any such bank, insurance
company, lender or investor is a party, providing for the leasing by the Company
or a Restricted Subsidiary for a period, including renewals, of three years or
more, of any Property or asset which has been or is to be sold or transferred
more than 180 days after the completion of construction and commencement of full
operation thereof, by the Company or any Restricted Subsidiary to such bank,
insurance company, lender or investor or to any Person to whom funds have been
or are to be advanced by such bank, insurance company, lender or investor on the
security of such Property (a "SALE AND LEASEBACK TRANSACTION") unless the
Company or such Restricted Subsidiary could create Total Debt in an amount equal
to the Attributable Debt with respect to the lease resulting from such sale and
leaseback transaction without violating SECTION 9.7 and unless after giving
effect thereto the Company shall be in compliance with SECTION 9.9.
Upon any sale and leaseback transaction, the Company shall deliver to the
Agent an Officer's Certificate demonstrating (with applicable computations in
reasonable detail) compliance by the Company and the Restricted Subsidiaries
with the provisions of SECTIONS 9.6, 9.7 AND 9.9 after giving effect to such
sale and leaseback transaction and stating that, immediately after and after
giving effect to such sale and leaseback transaction, there existed and exists
no Default or Event of Default.
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9.15. TRANSACTIONS WITH AFFILIATES. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, enter into or
suffer to exist any transaction or series of related transactions (including,
without limitation, the sale, purchase, exchange or lease of Property or
services) with any Affiliate of the Company (other than the Company or a
Restricted Subsidiary) unless such transaction or series of related transactions
is on terms that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than would be available in a comparable
transaction in arm's-length dealings with an unrelated third party; PROVIDED,
HOWEVER, that the foregoing restriction shall not apply to (1) loans to
directors and employees of the Company or any Subsidiary made in the ordinary
course of business in an aggregate amount not to exceed $3,000,000 outstanding
at any one time, (2) the Company's director and employee expense, compensation
and other benefit arrangements, or (3) indemnities of officers and directors of
the Company or any Subsidiary consistent with such Person's charter and bylaws
and applicable statutory provisions.
9.16 RESTRICTIVE AGREEMENTS. The Company will not, and will not permit any
of its Subsidiaries to, enter into any agreement (excluding this Agreement or
any other Credit Document) with any creditor which limits the ability of the
Company to amend or otherwise modify this Agreement or any other Credit
Document. The Company will not, and will not permit any Restricted Subsidiary
to, enter into any agreement which restricts or prohibits the ability of any
Restricted Subsidiary to make any payments, directly or indirectly, to the
Company by way of dividends, a repayment of loans, or other returns on
investments, or any other agreement or arrangement which restricts the ability
of any Restricted Subsidiary to make any payment, directly or indirectly, to the
Company excluding, however, customary transactions with Affiliates of the
Company; PROVIDED, HOWEVER that this SECTION 9.16 shall not apply to customary
restrictions contained in agreements with third parties requiring transactions
among affiliated companies to be fair and reasonable, or at fair market value,
or at arm's length, or other similar standards.
9.17. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES. The Board
of Directors of the Company may designate any Subsidiary of the Company,
including any Subsidiary previously designated as an Unrestricted Subsidiary, as
a Restricted Subsidiary; PROVIDED, that a Restricted Subsidiary which has been
designated as an Unrestricted Subsidiary may not be designated as a Restricted
Subsidiary before the date which is one year after the date such Restricted
Subsidiary most recently became an Unrestricted Subsidiary. PROVIDED that the
Consolidated Net Worth of the Company and the Restricted Subsidiaries at the
time of such designation is not less than $400,000,000 and shall not be reduced
below $400,000,000 by such designation, the Board of Directors of the Company
may designate any Subsidiary of the Company, including any Subsidiary previously
designated as a Restricted Subsidiary, as an Unrestricted Subsidiary if (a) the
Subsidiary to be so designated does not own any Capital Stock or indebtedness
of, or own or hold any Lien on any Property of, the Company or any Restricted
Subsidiary, (b) the Subsidiary to be so designated is not obligated by any
indebtedness or Lien that, if in default, would result (with the passage of time
or notice or otherwise) in a default on any indebtedness of the Company or any
Restricted Subsidiary, and (c) immediately after and after giving effect to such
designation, no Default or Event
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of Default shall have occurred and be continuing. Unless so designated as an
Unrestricted Subsidiary, any Subsidiary of the Company will be classified as a
Restricted Subsidiary. Upon any such designation by the Board of Directors of
the Company, the Company shall promptly deliver to the Agent a copy of the
resolution of such Board giving effect to such designation and an Officer's
Certificate demonstrating (with applicable computations in reasonable detail)
compliance by the Company and the Restricted Subsidiaries with the provisions of
SECTIONS 9.6 AND 9.7 and this SECTION 9.17 after giving effect to such
designation and stating that, immediately after and after giving effect to such
designation, there existed and exists no Default or Event of Default.
9.18. YEAR 2000 COMPLIANCE. On or prior to December 31, 1999, the Company
and its Subsidiaries shall have taken all actions reasonably necessary to ensure
that all automated systems used by the Company and its Subsidiaries that are
material to their respective operations shall operate properly and process data
accurately, including dates before, as of and after December 31, 1999
(collectively, "YEAR 2000 COMPLIANCE"). The Company agrees that, upon the
reasonable request of the Bank, the Company and its Subsidiaries will make
available to the Bank their respective employees, consultants, premises, records
and documentation with respect to the Year 2000 Compliance efforts of the
Company and its Subsidiaries.
Section 10. DEFAULTS.
10.1. EVENTS OF DEFAULT. If one or more of the following events (herein
called "EVENTS OF DEFAULT") shall occur and be continuing:
(a) the Company or any Subsidiary Guarantor shall fail to pay any
principal of any Loan, Reimbursement Obligation, fee or other principal amount
payable hereunder or under any other Credit Document, as and when due, or shall
fail to pay any accrued and unpaid interest on any amount hereunder or under any
other Credit Document within three days after the date due; or
(b) any member of the Combined Group shall default in any payment of
principal of or interest on any other obligation for money borrowed (or any
Capitalized Lease Obligation, any obligation under a conditional sale or other
title retention agreement, any obligation issued or assumed as full or partial
payment for Property whether or not secured by a purchase money mortgage or any
obligation under notes payable or drafts accepted representing extensions of
credit) beyond any period of grace provided with respect thereto; or any member
of the Combined Group shall fail to perform or observe any other agreement, term
or condition contained in any agreement under which any such obligation is
created (or if any other event thereunder or under any such agreement shall
occur and be continuing) and the effect of such failure or other event is to
cause, or to permit the holder or holders of such obligation (or a trustee on
behalf of such holder or holders) to cause, such obligation to become due prior
to any stated maturity; or any member of the Combined Group shall fail to pay
any Guarantee relating to Total Debt for borrowed money in accordance with its
terms; PROVIDED, in each case, that the aggregate amount of all obligations as
to which such a payment default shall occur and be continuing or such a failure
or other event causing or permitting acceleration shall occur and be continuing
shall exceed $25,000,000; or
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(c) any representation or warranty made by the Company or any Subsidiary
Guarantor or by any officer of the Company or any Subsidiary Guarantor in any
Credit Document or in any other writing furnished to the Agent or any Bank in
connection with any Credit Document shall prove to have been false or misleading
in any material respect on the date as of which it was made; or
(d) the Company shall default in the performance of any of its obligations
under SECTION 2.9 or SECTIONS 9.6 THROUGH 9.17, INCLUSIVE; or
(e) the Company or any Subsidiary Guarantor shall default in the
performance of any of its obligations in any Credit Document other than those
specified elsewhere in this SECTION 10.1 and such default shall not be remedied
within 30 days after any executive officer of the Company obtains actual
knowledge thereof; or
(f) any member of the Combined Group shall make an assignment for the
benefit of creditors; generally fail to pay its debts as such debts become due;
or admit in writing its inability to generally pay its debts as such debts
become due; or
(g) a Governmental Authority shall enter any decree or order for relief in
respect of any member of the Combined Group under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, whether now or
hereafter in effect (herein called a "BANKRUPTCY LAW"); or
(h) any member of the Combined Group shall petition or apply for or
consent to the appointment of, or taking possession by, a trustee, receiver,
custodian, sequestrator, liquidator or other similar official of or for itself
or any substantial part of its assets, or shall commence a voluntary case under
any Bankruptcy Law or any proceedings (other than proceedings for the voluntary
liquidation and dissolution of a Restricted Subsidiary) relating to any member
of the Combined Group under any Bankruptcy Law; or
(i) any such petition or application referred to in SECTION 10.1(H) shall
be filed, or any such proceeding referred to in SECTION 10.1(H) shall be
commenced, against any member of the Combined Group and such member of the
Combined Group by any act shall indicate its approval thereof, consent thereto
or acquiescence therein; or an order, judgment or decree shall be entered
appointing any such trustee, receiver, custodian, liquidator or similar
official, or approving the petition in any such proceedings, and such order,
judgment or decree shall remain unstayed and in effect for more than 60
consecutive days; or
(j) any order, judgment or decree shall be entered in any proceedings
against any member of the Combined Group decreeing the dissolution or
liquidation of any member of the Combined Group and such order, judgment or
decree shall remain unstayed and in effect for more than the appeal time
provided by law; or
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(k) any order, judgment or decree shall be entered in any proceedings
against any member of the Combined Group decreeing a split-up of such member of
the Combined Group which requires (1) the divestiture of assets which exceed, or
the divestiture of the Capital Stock of a Restricted Subsidiary whose assets
exceed, 10% of the consolidated total assets of the Company and the Restricted
Subsidiaries as of the end of the fiscal quarter immediately preceding or
coinciding with such divestiture or (2) the divestiture of assets or Capital
Stock of a Restricted Subsidiary which shall have contributed more than 10% of
EBITDAX for the four most recently completed fiscal quarters, and such order,
judgment or decree shall remain unstayed and in effect for more than 60
consecutive days; or
(l) any judgment or order, or series of judgments or orders, for the
payment of money in an amount in excess of $10,000,000 shall be rendered against
any member of the Combined Group and 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, within the appeal time provided by law from the date of
entry thereof, or such member of the Combined Group shall not, within said
appeal time, 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
(m) the Company or any ERISA Affiliate shall fail to pay when due any
amount or amounts aggregating in excess of $25,000,000 which it shall have
become liable to pay with respect to any Plan; or notice of intent to terminate
a Plan or Plans (other than a multiemployer plan under Section 4001(a)(3) of
ERISA) having aggregate Unfunded Liabilities in excess of $25,000,000 shall be
filed under Title IV of ERISA by the Company or any ERISA Affiliate, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to be
appointed to administer any Plan or Plans (other than a multiemployer plan under
Section 4001(a)(3) of ERISA) having aggregate Unfunded Liabilities in excess of
$25,000,000 or a proceeding shall be instituted by a fiduciary of any such Plan
or Plans against the Company or any ERISA Affiliate to enforce Section 515 or
4219(c)(5) of ERISA; or the Company or any ERISA Affiliate shall incur a
complete or partial withdrawal liability under Title IV of ERISA in an annual
amount in excess of $5,000,000 (and in the aggregate $25,000,000) in connection
with any Plan; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Plan or Plans having aggregate
Unfunded Liabilities in excess of $25,000,000 must be terminated; or there shall
occur any event or condition that might reasonably constitute grounds for the
termination of any Plan or Plans having aggregate Unfunded Liabilities in excess
of $25,000,000 or with respect to such Plan or Plans either the imposition of
any liability in excess of $25,000,000 (other than contributions in the ordinary
course) or any Lien provided under Section 4068 of ERISA securing an amount in
excess of $25,000,000 on any Property of the Company or any ERISA Affiliate; or
(n) the Company or any Subsidiary Guarantor shall claim in writing that
this Agreement or any other Credit Document is invalid or unenforceable in any
material respect; or
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(o) any Change of Control shall occur;
THEREUPON: (I) the Agent may (and, if directed by the Required Banks, shall) do
any or all of the following: (a) declare all Commitments terminated (whereupon
all such Commitments shall be terminated); (b) terminate any Letter of Credit
pursuant to which such termination is permitted; (c) declare the unpaid amount
of the Notes (principal and accrued and unpaid interest) and all Reimbursement
Obligations, fees and other accrued and unpaid amounts payable under the Credit
Documents to be forthwith due and payable, whereupon such amounts shall be and
become immediately due and payable, without notice (including notice of
acceleration and notice of intent to accelerate), presentment, demand, protest
or other formalities of any kind, all of which are hereby expressly WAIVED by
the Company to the extent permitted by law; PROVIDED that in the case of the
occurrence of an Event of Default with respect to the Company referred to in
SECTION 10.1(G) through (I), the Commitments shall be automatically terminated
and the unpaid amount of the Notes (principal and accrued and unpaid interest)
and all Reimbursement Obligations, fees and all other accrued and unpaid amounts
payable under the Credit Documents shall be and become automatically and
immediately due and payable, without notice (including notice of intent to
accelerate and to the extent permitted by the law, notice of acceleration) and
without presentment, demand, protest or other formalities of any kind, all of
which are hereby expressly WAIVED by the Company; and (d) require Cover for all
Letter of Credit Liabilities; (II) each Bank may exercise its rights of offset
against each account and all other Property of the Company in the possession of
such Bank, which right is hereby granted by the Company to each Bank; and (III)
the Agent and each Bank may exercise any and all other rights available to them
pursuant to the Credit Documents, at law and in equity.
Section 11. THE AGENT.
11.1. APPOINTMENT, POWERS AND IMMUNITIES. Each Bank irrevocably appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement, the Notes and the other Credit
Documents as are delegated to the Agent by the terms of this Agreement, the
Notes or any other Credit Document, together with all such powers as are
reasonably incidental thereto. The Agent (which term as used in this SECTION 11
shall include reference to its Affiliates and its own and its Affiliates'
officers, directors, employees, agents and advisors) (a) shall have no duties or
responsibilities except those expressly set forth in the Credit Documents and
shall not by reason of any Credit Document be a trustee or fiduciary for any
Bank; (b) shall not be responsible to any Bank for any recitals, statements,
representations or warranties contained in any Credit Document, or in any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of any Credit Document or any other
document referred to or provided for therein or any Property covered thereby or
for any failure by the Company or any other Person to perform any of its
obligations hereunder or thereunder; (c) shall not be required to initiate or
conduct any enforcement, litigation or collection proceedings hereunder or under
any Credit Document except to the extent requested by the Required Banks (and
SECTION 11.7 shall apply), and (d) shall not be responsible to any Bank for any
action taken or
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omitted to be taken by it under any Credit Document or any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, including any such action pursuant to its own negligence,
except for its own gross negligence or willful misconduct. The Agent may employ
agents and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. Without in any way limiting any of the foregoing, each Bank
acknowledges that the Issuer shall have no greater responsibility in the
operation of the Letters of Credit than is specified in the Uniform Customs and
Practice of Documentary Credits (1993 Revision, International Chamber of
Commerce Publication No. 500).
11.2. RELIANCE BY AGENT. The Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, facsimile, 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 upon advice and statements of legal counsel (which may be counsel
for the Company), independent accountants and other experts selected by the
Agent. As to any matters not expressly provided for by any Credit Document, the
Agent shall in all cases be fully protected in acting, or in refraining from
acting, in accordance with instructions of the Required Banks, and any action
taken or failure to act pursuant thereto shall be binding on all of the Banks.
11.3. DEFAULTS. The Agent shall not be deemed to have knowledge of the
occurrence of a Default (other than the nonpayment of Loans, Reimbursement
Obligations, Facility Fees or Letter of Credit Fee) unless it has received
notice from a Bank or the Company specifying such Default and stating that such
notice is a "Notice of Default". In the event that the Agent receives such a
notice of the occurrence of a Default, the Agent shall give prompt notice
thereof to the Banks (and shall give each Bank prompt notice of each such
nonpayment). The Agent shall (subject to SECTIONS 11.7 and 12.5) take such
action with respect to such Default as shall be directed by all Banks or the
Required Banks, as appropriate, and within its rights under the Credit Documents
and at law or in equity; PROVIDED that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, permitted hereby with respect
to such Default as it shall deem advisable in the best interests of the Banks
and within its rights under the Credit Documents, at law or in equity, and shall
be fully protected in doing so.
11.4. RIGHTS AS A BANK. With respect to its Commitments, Loans and Letter
of Credit Liabilities, Chase Texas in its capacity as a Bank hereunder shall
have the same rights and powers under the Credit Documents as any other Bank and
may exercise the same as though it were not acting as the Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include the
Agent in its individual capacity. Chase Texas may (without having to account
therefor to any Bank) accept deposits from, act as trustee for, lend money to
and generally engage in any kind of banking, trust, letter of credit, agency or
other business with the Company (and any of its Affiliates) as if it were not
acting as the Agent, and Chase Texas and the Agent may accept fees and other
consideration from the Company and its Affiliates (in addition to the fees
heretofore agreed to between the Company and the Agent) for services in
connection with this Agreement or otherwise without having to account for the
same to the Banks. Without limiting the rights and remedies of the Banks
specifically set forth herein, no other Bank by virtue of being a Bank hereunder
shall have any interest in any such activities, any present or future guaranty
in favor of Chase Texas by or for the account of the Company, any present or
future offset exercised by Chase Texas in respect of any
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such other activities, or any present or future Property at any time taken as
security for any such other activities; PROVIDED, HOWEVER, that if any payment
in respect of such guaranties or such Property or the proceeds thereof shall be
applied to the Obligations, each Bank shall be entitled to share in such
application PRO RATA according to its portion of the Obligations.
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11.5. INDEMNIFICATION. THE BANKS SHALL INDEMNIFY THE AGENT (INCLUDING THE
AGENT WHEN ACTING AS ISSUER OF ANY LETTER OF CREDIT) AND EACH OTHER INDEMNIFIED
PERSON (TO THE EXTENT NOT REIMBURSED UNDER SECTION 12.3 OR 12.4, BUT WITHOUT
LIMITING THE OBLIGATIONS OF THE COMPANY UNDER SAID SECTIONS 12.3 AND 12.4),
RATABLY IN ACCORDANCE WITH THEIR RESPECTIVE COMMITMENT PERCENTAGES, FOR ANY AND
ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES AND DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER
(INCLUDING THE CONSEQUENCES OF THE SOLE, ORDINARY OR CONTRIBUTORY NEGLIGENCE OF
THE AGENT OR ANY OTHER INDEMNIFIED PERSON) WHICH MAY BE IMPOSED ON, INCURRED BY
OR ASSERTED AGAINST THE AGENT OR ANY OTHER INDEMNIFIED PERSON IN ANY WAY
RELATING TO OR ARISING OUT OF ANY CREDIT DOCUMENT (AS DEFINED HEREIN) OR ANY
OTHER DOCUMENTS CONTEMPLATED BY OR REFERRED TO HEREIN OR THEREIN OR THE
TRANSACTIONS CONTEMPLATED BY ANY CREDIT DOCUMENT (INCLUDING THE COSTS AND
EXPENSES WHICH THE COMPANY IS OBLIGATED TO PAY UNDER SECTIONS 12.3 AND 12.4 BUT
EXCLUDING, UNLESS A DEFAULT HAS OCCURRED AND IS CONTINUING, NORMAL
ADMINISTRATIVE COSTS AND EXPENSES INCIDENT TO THE PERFORMANCE OF ITS DUTIES
UNDER THE CREDIT DOCUMENTS) OR THE ENFORCEMENT OF ANY OF THE TERMS OF ANY CREDIT
DOCUMENT OR OF ANY SUCH OTHER DOCUMENTS; PROVIDED THAT NO BANK SHALL BE LIABLE
FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE PARTY TO BE INDEMNIFIED. The obligations of the Banks
under this SECTION 11.5 shall survive the termination of this Agreement.
11.6. NON-RELIANCE ON THE AGENT AND OTHER BANKS. Each Bank agrees that it
has received current financial information with respect to the Company and its
Subsidiaries and that it has, independently and without reliance on the Agent or
any other Bank and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under the Credit Documents. The Agent
shall not be required to keep itself informed as to the performance or
observance by the Company of any Credit Document or any other document referred
to or provided for therein or to inspect the Property or books of the Company or
any other Person. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the Agent under
the Credit Documents, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the affairs,
financial condition or business of the Company (or any of its Affiliates) which
may come into the possession of the Agent.
11.7. FAILURE TO ACT. Except for action expressly required of the Agent
under the Credit Documents, the Agent shall in all cases be fully justified in
failing or refusing to act under the Credit Documents unless it shall have
received further assurances to its satisfaction by the Banks of their
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indemnification obligations under SECTION 11.5 against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.
11.8. RESIGNATION OR REMOVAL OF THE AGENT. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Banks and the Company, and the Agent may be
removed at any time with or without cause by the Required Banks. Upon any such
resignation or removal, the Required Banks shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Banks and shall have accepted such appointment within 30 days after the
retiring Agent's giving of notice of resignation or the Required Banks' removal
of the retiring Agent, the retiring Agent may, on behalf of the Banks, appoint a
successor Agent. Any successor Agent shall be a bank which has an office in the
United States and a combined capital and surplus of at least $1,000,000,000 and
with its deposits insured by the FDIC. Upon the acceptance of any such
appointment, the successor Agent shall 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 under the Credit
Documents. Such successor Agent shall promptly specify its Principal Office
referred to in SECTIONS 3.1 and 5.1 by notice to the Company and the Banks.
After any retiring Agent's resignation or removal hereunder as the Agent, the
provisions of this SECTION 11 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent.
11.9 NO DUTY OR OBLIGATIONS. In their capacities as such, neither the
Syndication Agent, the Documentation Agent, the Managing Agent, nor any of the
Co-Agents shall have any duty or obligations under this Agreement or any other
Credit Document.
Section 12. MISCELLANEOUS.
12.1. WAIVER. No waiver of any Default shall be a waiver of any other
Default. No failure on the part of the Agent or any Bank to exercise and no
delay in exercising, and no course of dealing with respect to, any right, power
or privilege under any Credit Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege thereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided in the Credit Documents are
cumulative and not exclusive of any remedies provided by law or in equity.
12.2. NOTICES. All notices and other communications provided for in the
Credit Documents (including any modifications of, or waivers or consents under,
this Agreement) shall (except as otherwise expressly provided with respect to
financial information to be delivered pursuant to SECTIONS 9.1(A), (B) OR (C))
be in writing and (a) delivered against receipt therefor, (b) sent by overnight
courier (such as Federal Express), charges prepaid, (c) mailed by registered or
certified mail, return receipt requested, postage prepaid, or (d) given or made
by telegraph, telecopy (confirmed by mail), cable or other writing, in each case
addressed 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 the Company and the
Agent given in accordance with this SECTION 12.2. Financial information to be
delivered pursuant to
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SECTIONS 9.1(A), (B) OR (C) shall be directed to the intended recipient at its
"E-Mail Address" specified below its name on the signature pages hereof, or at
such other E-Mail Address as shall be designated by such party in a notice to
the Company and the Agent given in accordance with this SECTION 12.2. Except as
otherwise provided in this Agreement, all such communications shall be deemed to
have been duly given when delivered; on the Business Day following delivery to
an overnight courier; when transmitted before 5 p.m. on a Business Day by
telecopier or delivered to the telegraph or cable office (when transmitted after
5 p.m. on a Business Day, at 9 a.m. on the next Business Day); or on the second
Business Day after its deposit in the mails; PROVIDED, HOWEVER, that notices
required or permitted by SECTION 5.5 shall be effective only when actually
received by the Agent. Actual notice shall always be effective.
12.3. EXPENSES. Whether or not any Loan is ever made or any Letter of
Credit ever issued, the Company shall pay or reimburse on demand each of the
Banks and the Agent for paying: (a) the reasonable fees and expenses of Locke
Liddell & Sapp LLP, special counsel to the Agent, in connection with (1) the
preparation, execution and delivery of the Credit Documents (including exhibits
and schedules) and the making of the Loans and the issuance of Letters of Credit
hereunder and (2) any modification, supplement or waiver of any of the terms of
any Credit Document; (b) all reasonable out-of-pocket costs and expenses of the
Banks or the Agent (including reasonable counsels' fees) in connection with any
Event of Default or the enforcement of any Credit Document; (c) all transfer,
stamp, documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of any Credit Document or any other
document referred to therein; (d) all costs, expenses, taxes, assessments and
other charges incurred in connection with any filing or registration
contemplated by any Credit Document or any document referred to therein; and (e)
reasonable expenses of due diligence and syndication, and mutually agreed
advertising and marketing costs.
12.4. INDEMNIFICATION.
(I) TO THE FULLEST EXTENT PERMITTED BY LAW, THE COMPANY SHALL INDEMNIFY
THE AGENT (INCLUDING THE AGENT WHEN ACTING AS ISSUER OF LETTERS OF CREDIT), EACH
BANK AND EACH OTHER INDEMNIFIED PERSON FROM, AND HOLD EACH OF THEM HARMLESS
AGAINST, ANY AND ALL LOSSES, LIABILITIES, COSTS, EXPENSES, CLAIMS OR DAMAGES TO
WHICH ANY OF THEM MAY BECOME SUBJECT, REGARDLESS OF AND INCLUDING LOSSES,
LIABILITIES, COSTS, EXPENSES, CLAIMS AND DAMAGES ARISING FROM THE SOLE, ORDINARY
OR CONTRIBUTORY NEGLIGENCE OF THE AGENT OR THE BANKS OR ANY OTHER INDEMNIFIED
PERSON, INSOFAR AS SUCH LOSSES, LIABILITIES, COSTS, EXPENSES, CLAIMS OR DAMAGES
ARISE OUT OF OR IN CONNECTION WITH (A) ANY ACTUAL OR PROPOSED USE BY THE COMPANY
OF THE PROCEEDS OF ANY EXTENSION OF CREDIT UNDER THIS AGREEMENT; (B) ANY BREACH
BY THE COMPANY OF ANY CREDIT DOCUMENT (AS DEFINED HEREIN); (C) ANY VIOLATION BY
THE COMPANY OR ANY OF ITS SUBSIDIARIES OF ANY LEGAL REQUIREMENT, INCLUDING,
WITHOUT LIMITATION, APPLICABLE ENVIRONMENTAL LAWS; (D) ANY ENVIRONMENTAL CLAIMS
OR (E) ANY INVESTIGATION, LITIGATION OR OTHER PROCEEDING (INCLUDING ANY
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THREATENED INVESTIGATION OR PROCEEDING) RELATING TO ANY OF THE FOREGOING, AND
THE COMPANY SHALL REIMBURSE EACH INDEMNIFIED PERSON, UPON DEMAND, FOR ANY
EXPENSES (INCLUDING REASONABLE LEGAL FEES) INCURRED IN CONNECTION WITH ANY SUCH
INVESTIGATION OR PROCEEDING; BUT EXCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS,
DAMAGES, COSTS OR EXPENSES INCURRED BY SUCH INDEMNIFIED PERSON BY REASON OF THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY TO BE INDEMNIFIED.
(II) TO THE FULLEST EXTENT PERMITTED BY LAW, THE COMPANY SHALL INDEMNIFY
THE AGENT (INCLUDING THE AGENT WHEN ACTING AS ISSUER OF LETTERS OF CREDIT), EACH
BANK AND EACH OTHER INDEMNIFIED PERSON FROM, AND HOLD EACH OF THEM HARMLESS
AGAINST, ANY AND ALL LOSSES, LIABILITIES, COSTS, EXPENSES, CLAIMS OR DAMAGES TO
WHICH ANY OF THEM MAY BECOME SUBJECT, REGARDLESS OF AND INCLUDING LOSSES,
LIABILITIES, COSTS, EXPENSES, CLAIMS AND DAMAGES ARISING FROM THE SOLE, ORDINARY
OR CONTRIBUTORY NEGLIGENCE OF THE AGENT OR THE BANKS OR ANY OTHER INDEMNIFIED
PERSON, IN CONNECTION WITH THE EXECUTION AND DELIVERY OR TRANSFER OF OR PAYMENT
OR FAILURE TO PAY UNDER ANY LETTER OF CREDIT, INCLUDING, WITHOUT LIMITATION, ANY
CLAIMS, DAMAGES, LOSSES, LIABILITIES, COSTS OR EXPENSES WHICH THE AGENT, OR SUCH
OTHER INDEMNIFIED PERSON, AS THE CASE MAY BE, MAY INCUR (WHETHER INCURRED AS A
RESULT OF ITS OWN NEGLIGENCE OR OTHERWISE) BY REASON OF OR IN CONNECTION WITH
THE FAILURE OF ANY OTHER BANK (WHETHER AS A RESULT OF ITS OWN NEGLIGENCE OR
OTHERWISE) TO FULFILL OR COMPLY WITH ITS OBLIGATIONS TO THE AGENT OR ANY BANK,
AS THE CASE MAY BE, WITH RESPECT TO SUCH LETTER OF CREDIT HEREUNDER (BUT NOTHING
HEREIN CONTAINED SHALL AFFECT THE RIGHTS THE COMPANY MAY HAVE AGAINST SUCH
DEFAULTING BANK); BUT EXCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES,
COSTS OR EXPENSES INCURRED BY SUCH INDEMNIFIED PERSON BY REASON OF THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY TO BE INDEMNIFIED.
(III) The obligation of the Company to provide indemnification under this
SECTION 12.4 for fees and expenses of counsel shall be limited to the reasonable
fees and expenses of one counsel in each jurisdiction representing all of the
Persons entitled to such indemnification, except to the extent that, in the
reasonable judgment of any such Indemnified Person, the existence of actual or
potential conflicts of interest make representation of all of such indemnified
Persons by the same counsel inappropriate; in such a case, the Person exercising
such judgment shall be indemnified for the reasonable fees and expenses of its
separate counsel to the extent provided in this SECTION 12.4 without giving
effect to the first clause of this sentence. Nothing in this SECTION 12.4 is
intended to limit the obligations of the Company under any other provision of
this Agreement.
12.5. AMENDMENTS, ETC. No amendment or waiver of any provision of any
Credit
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Document, nor any consent to any departure by the Company therefrom, shall in
any event be effective unless the same shall be agreed or consented to by the
Required Banks and the Company, as appropriate, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; PROVIDED that no amendment, waiver or consent shall, unless in
writing and signed by each Bank affected thereby, do any of the following: (a)
increase any Commitment of any of the Banks; (b) reduce the principal of, or
interest on, any Loan, Reimbursement Obligation, fee or other sum to be paid
under any Credit Document; (c) postpone any scheduled date fixed for any payment
of principal of, or interest on, any Loan, Reimbursement Obligation, fee or
other sum to be paid under any Credit Document; (d) change the percentage of
Commitments, or of the aggregate unpaid principal amount of any of the Loans, or
the number of Banks, which shall be required for the Banks or any of them to
take any action under this Agreement or any other Credit Document; or (e) change
any provision contained in SECTIONS 2,1, 2.2, 2.4, 2.8 5.2, 5.7, 6, 12.3 or 12.4
or this SECTION 12.5. Anything in this SECTION 12.5 to the contrary, no
amendment, waiver or consent shall be made with respect to SECTION 11 without
the consent of the Agent.
12.6. SUCCESSORS AND ASSIGNS.
(a) This Agreement and the other Credit Documents shall be binding
upon and inure to the benefit of the Company, the Agent and the Banks and their
respective successors and assigns. The Company may not assign or transfer any of
its rights or obligations under any of the Credit Documents without the prior
written consent of all of the Banks.
(b) Each Bank may sell participations to any Person in all or part
of its Loans, Reimbursement Obligations, Note and Commitment, in which event,
without limiting the foregoing, the provisions of SECTION 6 shall inure to the
benefit of each purchaser of a participation and the PRO RATA treatment of
payments, as described in SECTION 5.2, shall be determined as if such Bank had
not sold such participation. In the event any Bank shall sell any participation,
(1) the Company, the Agent and the other Banks shall continue to deal solely and
directly with such selling Bank in connection with such selling Bank's rights
and obligations under the Credit Documents (including the Note held by such
selling Bank); (2) such Bank shall retain the sole right and responsibility to
enforce the obligations of the Company under the Credit Documents, including the
right to approve any amendment, modification or waiver of any provision of this
Agreement or any other Credit Document other than amendments, modifications or
waivers with respect to (A) any fees payable hereunder to the Banks and (B) the
amount of principal or the rate of interest payable on, or the dates fixed for
the scheduled repayment of principal of, the Loans, Reimbursement Obligations
and other sums to be paid to the Banks under the Credit Documents, and (3) the
Company agrees, to the fullest extent it may effectively do so under applicable
law, that, notwithstanding the first sentence of this SECTION 12.6(B), if such
Bank has previously given notice of the sale of such participation to the
Company, any participant of a Bank may exercise all rights of set-off, bankers'
lien, counterclaim or similar rights with respect to such participation as fully
as if such participant were a direct holder of Loans and Reimbursement
Obligations.
(c) Each Bank may assign to one or more Banks or Eligible Assignees
all or a portion of its interests, rights and obligations under this Agreement
and the other Credit Documents
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(including all or a portion of its Commitment and the same portion of the Loans
and Letter of Credit Advances at the time owing to it and of its outstanding
Letter of Credit Liabilities at the time and the Note held by it); PROVIDED THAT
(1) other than in the case of an assignment to a Person at least 50% owned by
the assignor Bank, or by a common parent of both, or to another Bank, the Agent
and the Company must give their respective prior written consent, which consent
will not be unreasonably withheld; (2) the aggregate amount of the Commitment,
Loans and outstanding Letter of Credit Liabilities of the assigning Bank subject
to each such assignment (determined as of the date the Assignment Agreement with
respect to such assignment is delivered to the Agent) shall in no event be less
than $10,000,000 (or $1,000,000 in the case of an assignment between Banks)
(except for certain exceptions approved by the Company and the Agent or where
all of a Bank's Commitment, Loans and outstanding Letter of Credit Liabilities
are being assigned) and shall be in an amount that is an integral multiple of
$1,000,000 (except for certain exceptions approved by the Company and the Agent
or where all of a Bank's Commitment, Loans and outstanding Letter of Credit
Liabilities are being assigned); and (3) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance and recording in its
records, an Assignment Agreement with blanks appropriately completed, together
with the Note subject to such assignment and a processing and recordation fee of
$2,500 (for which the Company shall have no liability except in the case of
assignments required by the Company pursuant to SECTION 6.1, 6.3, 6.6 or 6.7, in
which case such fee shall be paid by the Company). Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment Agreement, which shall be at least five Business Days after
the date of execution thereof (unless otherwise agreed by the parties thereto
and the Agent), (A) the assignee thereunder shall be a party to this Agreement
and, to the extent provided in such Assignment Agreement, have the rights and
obligations of a Bank under the Credit Documents, and (B) the Bank making such
assignment shall, to the extent provided in such Assignment Agreement, be
released from its obligations under this Agreement and the other Credit
Documents (and, in the case of an Assignment Agreement covering all or the
remaining portion of an assigning Bank's rights and obligations under this
Agreement, such Bank shall cease to be a party hereto) but shall be entitled to
the benefit of this Agreement and the other Credit Documents for matters
occurring during the time it was a Bank under this Agreement.
(d) By executing and delivering an Assignment Agreement, the
assigning Bank and the assignee thereunder confirm to and agree with each other
and the other parties to this Agreement as follows: (1) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such
assigning Bank makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with any Credit Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Credit Document; (2)
such assigning Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company or the
performance or observance by the Company of any of its obligations under any
Credit Document; (3) such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements of the Company
previously delivered by the Company in accordance herewith and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment Agreement; (4) such assignee
will, independently and without reliance upon the Agent, such assigning Bank or
any other Bank and based on such
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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
Documents; (5) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Documents as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto, and (6) such assignee agrees that
it will perform in accordance with their terms all obligations that by the terms
of the Credit Documents are required to be performed by it as a Bank.
(e) The Agent shall maintain at its office a copy of each Assignment
Agreement delivered to it and a record of the names and addresses of the Banks
and the Commitment of, and the principal amount of the Loans and Letter of
Credit Advances owing to, and the outstanding Letter of Credit Liabilities of,
each Bank from time to time. The entries in such record shall be conclusive, in
the absence of manifest error, and the Company, the Agent and the Banks may
treat each Person the name of which is recorded therein as a Bank hereunder for
all purposes of the Credit Documents. Such records shall be available for
inspection by the Company or any Bank at any reasonable time and from time to
time upon reasonable prior notice.
(f) Upon its receipt of an Assignment Agreement executed by an
assigning Bank and the assignee thereunder together with the Note subject to
such assignment, any required consent to such assignment and the fee payable in
respect thereto, the Agent shall, if such Assignment Agreement has been
completed with blanks appropriately filled, (1) accept such Assignment
Agreement; (2) record the information contained therein in its records, and (3)
give prompt notice thereof to the Company. Contemporaneously with the receipt by
the Agent of an Assignment Agreement, the Company, at its own expense, shall
execute and deliver to the Agent in exchange for the surrendered Note a new Note
payable to the order of such assignee in an amount equal to the Commitment
and/or Loans assumed by it pursuant to such Assignment Agreement and, if the
assigning Bank has retained any Commitment and/or Loans hereunder, a new Note
payable to the order of the assignor Bank in an amount equal to the Commitment
and/or Loans retained by it. Such new Notes shall be in an aggregate face amount
equal to the face amount of each surrendered Note, shall be dated the effective
date of such Assignment Agreement and shall otherwise be in substantially the
form of the surrendered Note. Thereafter, the surrendered Note shall be marked
canceled and returned to the Company.
(g) Any Bank may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this SECTION 12.6, disclose
to the assignee or participant or proposed assignee or participant any
information relating to the Company furnished to such Bank by or on behalf of
the Company.
(h) Notwithstanding anything herein to the contrary, each Bank may
pledge and assign all or any portion of its rights and interests under the
Credit Documents to any Federal Reserve Bank. No such assignment shall release
the assigning Bank from its obligations hereunder.
(i) All transfers of any interest in any Note hereunder shall be in
compliance with all federal and state securities laws, if applicable.
Notwithstanding the foregoing sentence, however, the parties to this Agreement
do not intend that any transfer under this SECTION 12.6 be
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construed as a "purchase" or "sale" of a "security" within the meaning of any
applicable federal or state securities laws.
12.7. SURVIVAL; TERMINATION; REINSTATEMENT.
(a) In addition to the other provisions of the Credit Documents
expressly stated to survive the termination of this Agreement, the obligations
of the Company under SECTIONS 6, 12.3 and 12.4 and the last sentence of this
SECTION 12.7 and the obligations of the Banks under SECTIONS 11.5, 12.8 and
12.12 shall survive the termination of this Agreement.
(b) This Agreement shall terminate upon the last to occur of (i) the
full and final payment of all Notes and Reimbursement Obligations, (ii) the
expiry of all Letters of Credit, (iii) the termination of all Commitments and
(iv) the payment of all non-contingent amounts due under the Credit Documents.
Notwithstanding the foregoing, if all conditions to the termination of this
Agreement set forth in this SECTION 12.7(B) shall have been satisfied other than
the expiry of all Letters of Credit, and all outstanding Letters of Credit shall
have been fully Covered or shall be backed by a letter of credit in Proper Form
issued by an issuer acceptable to the Issuer in its sole discretion, the Company
shall in such event no longer be required to comply with SECTION 9.
(c) If at any time all or any part of any payment previously applied
by the Agent or any Bank to any Loan, Reimbursement Obligation or other sum
hereunder is or must be returned by or recovered from the Agent or such Bank for
any reason (including the order of any bankruptcy court), to the extent
permitted by law, the Credit Documents shall automatically be reinstated to the
same effect as if such prior application had not been made, and the Company
shall indemnify the Agent or such Bank against, and save and hold the Agent and
such Bank harmless from, any required return by or recovery from the Agent or
such Bank of any such payment because of its being deemed preferential under any
applicable Legal Requirement or for any other reason.
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12.8. LIMITATION OF INTEREST. The parties to the Credit Documents intend
to strictly comply with all applicable laws, including applicable usury laws.
Accordingly, the provisions of this SECTION 12.8 shall govern and control over
every other provision of any Credit Document which conflicts or is inconsistent
with this SECTION 12.8, even if such provision declares that it controls. As
used in this SECTION 12.8, the term "interest" includes the aggregate of all
charges, fees, benefits or other compensation which constitute interest under
applicable law; PROVIDED that, to the maximum extent permitted by applicable
law, (a) any non-principal payment shall be characterized as an expense or as
compensation for something other than the use, forbearance or detention of money
and not as interest and (b) all interest at any time contracted for, taken,
reserved, retained, charged or received shall be amortized, prorated, allocated
and spread, in equal parts, during the full term of the Loans and the
Commitments. In no event shall the Company or any other Person be obligated to
pay, or the Agent or any Bank have any right or privilege to reserve, take,
receive or retain, any interest in excess of the maximum amount of nonusurious
interest permitted under applicable law. None of the terms and provisions
contained in any Credit Document which directly or indirectly relate to interest
shall ever be construed without reference to this SECTION 12.8, or be construed
to create a contract to pay for the use, forbearance or detention of money at an
interest rate in excess of the Highest Lawful Rate. On each day, if any, that
the interest rate (the "STATED RATE") called for under any Credit Document
exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall
automatically be fixed by operation of this sentence at the Highest Lawful Rate
for that day, and shall remain fixed at the Highest Lawful Rate for each day
thereafter until the total amount of interest accrued equals the total amount of
interest which would have accrued if there were no such ceiling rate as imposed
by this sentence. Thereafter, interest shall accrue at the Stated Rate unless
and until the Stated Rate again exceeds the Highest Lawful Rate, whereupon the
provisions of the immediately preceding sentence shall again automatically
operate to limit the interest accrual rate. The daily interest rates to be used
in calculating interest at the Highest Lawful Rate shall be determined by
dividing the applicable Highest Lawful Rate per annum by the number of days in
the calendar year for which such calculation is being made. If the term of any
of the Notes is shortened by reason of acceleration of maturity as a result of
any Default or by any other cause, or by reason of any required or permitted
prepayment, and if for that (or any other) reason the Agent or any Bank at any
time, including the stated maturity, is owed or receives, reserves or takes
(and/or has received, reserved or taken) interest in excess of interest
calculated at the Highest Lawful Rate, then and in any such event all of any
such excess interest shall be canceled automatically as of the date of such
acceleration, prepayment or other event which produces the excess, and, if such
excess interest has been paid to the Agent or such Bank, it shall be credited
PRO TANTO against the then-outstanding principal balance of the Company's
obligations to the Agent or such Bank, effective as of the date or dates when
the event occurs which causes it to be excess interest, until such excess is
exhausted or all of such principal has been fully paid and satisfied, whichever
occurs first, and any remaining balance of such excess shall be promptly
refunded to its payor.
12.9. CAPTIONS. Captions and section headings appearing in the Credit
Documents are included solely for convenience and shall not be considered in
construing the Credit Documents.
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12.10. COUNTERPARTS. Each Credit Document may be executed in any number of
identical counterparts, and by the parties on separate counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts together shall constitute but one
and the same agreement.
12.11. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(A) EXCEPT TO THE EXTENT OTHERWISE SPECIFIED IN THE CREDIT DOCUMENTS, EACH
CREDIT DOCUMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF TEXAS (TO THE EXTENT PERMITTED BY LAW, OTHER THAN ITS CONFLICT
OF LAW RULES) AND THE FEDERAL LAWS OF THE UNITED STATES OF AMERICA. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF TEXAS, HOUSTON DIVISION (COLLECTIVELY, THE "DESIGNATED
COURTS"), AND THE COMPANY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION
OF THE DESIGNATED COURTS. THE COMPANY HEREBY IRREVOCABLY DESIGNATES, APPOINTS
AND EMPOWERS DAVID L. HICKS, WITH OFFICES ON THE DATE HEREOF AT 1616 SOUTH VOSS
ROAD, HOUSTON, TEXAS 77057, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE,
ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY,
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONSES, NOTICES AND DOCUMENTS WHICH MAY
BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE,
APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH OR THE COMPANY
DESIRES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT, THE COMPANY AGREES TO
DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN HOUSTON, TEXAS ON THE TERMS AND
FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT UNDER THIS
AGREEMENT. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE DESIGNATED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE COMPANY AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE
TO BECOME EFFECTIVE TEN DAYS AFTER SUCH MAILING. NOTHING IN THIS AGREEMENT SHALL
AFFECT THE RIGHT OF THE AGENT, ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO THE EXTENT PERMITTED BY LAW
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE TO PROCEED AGAINST THE COMPANY IN ANY
OTHER JURISDICTION.
(B) TO THE EXTENT PERMITTED BY LAW, EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE IN ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT
OF OR IN CONNECTION WITH THIS
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AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE DESIGNATED COURTS AND
HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH
COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
(C) EACH OF THE COMPANY, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THE CREDIT AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.
12.12. CONFIDENTIALITY. Each Bank agrees to exercise its best efforts to
keep any information delivered or made available by the Company to it (including
any information obtained pursuant to SECTION 9.1) which is clearly indicated to
be confidential information, confidential from anyone other than Persons
employed or retained by such Bank who are or are expected to become engaged in
evaluating, approving, structuring or administering the Loans or the Letters of
Credit; PROVIDED that nothing herein shall prevent any Bank from disclosing such
information (a) to any other Bank, (b) pursuant to subpoena or upon the order of
any court or administrative agency, (c) upon the request or demand of any
regulatory agency or authority having jurisdiction over such Bank, (d) which has
been publicly disclosed, (e) to the extent reasonably required in connection
with any litigation to which the Agent, any Bank, or their respective Affiliates
may be a party, (f) to the extent reasonably required in connection with the
exercise of any remedy hereunder or under any other Credit Document, (g) to such
Bank's legal counsel and independent auditors and (h) to any actual or proposed
participant or assignee of all or part of its rights hereunder which has agreed
in writing to be bound by the provisions of this SECTION 12.12. Each Bank will
promptly notify the Company of any information that it is required or requested
to deliver pursuant to CLAUSE (B) OR (C) of this SECTION 12.12 and, if the
Company is not a party to any such litigation, CLAUSE (E) of this SECTION 12.12.
12.13. ENTIRE AGREEMENT. This Agreement and the other Credit Documents
embody the entire agreement among the parties with respect to their subject
matter and supersede all prior proposals, agreements and understandings related
to the subject matter of this Agreement and the other Credit Documents.
12.14. CONSTRUCTION. The parties agree that this Agreement and the other
Credit Documents were negotiated agreements and accordingly no presumption shall
attach based on the identity of the drafting party.
12.15. SEVERABILITY. Whenever possible, each provision of the Credit
Documents shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of any Credit Document shall be invalid,
illegal or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions of such Credit Document
shall not be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed and delivered.
SANTA FE SNYDER CORPORATION,
a Delaware corporation
By: _____________________________________
Mark A. Jackson, Executive Vice
President and Chief Financial Officer
Address for Notices:
Santa Fe Snyder Corporation
1616 South Voss Road, Suite 1000
Houston, Texas 77057
Telephone: (713) 507-5000
Telecopy: (713) 507-5341
Attention: Treasurer
<PAGE>
COMMITMENT: CHASE BANK OF TEXAS, NATIONAL
$39,375,000.00 ASSOCIATION, Individually and as
Administrative Agent
By: _____________________________________
Russell A. Johnson
Vice President
Address for Notices:
Domestic and Eurodollar
Lending Offices: Chase Bank of Texas, National Association
1 Chase Manhattan Plaza
Chase Bank of Texas, National New York, NY 10081
Association Telephone: (212) 552-7446
600 Travis Street, 20th Floor Telecopy: (212) 552-5777
Houston, Texas 77002-8086 E-Mail Address: [email protected]
Attention: Peter Licalzi Attn.: Debbie Rockower
Telephone: (713) 216-8869
Telecopy: (713) 216-4117
E-Mail Address: [email protected]
WITH A COPY TO:
Chase Bank of Texas, National Association
600 Travis, 20th Floor
Houston, Texas 77002-8086
Attn.: Peter Licalzi
Telephone: (713) 216-8869
Telecopy: (713) 216-4117
E-Mail Address: ____________________
Attn.: Peter Licalzi
<PAGE>
COMMITMENT: ABN AMRO BANK N.V., INDIVIDUALLY AND AS A
$31,500,000.00 CO-AGENT
By: _____________________________________
Robert J. Cunningham
Group Vice President
By: _____________________________________
Jamie A. Conn
Vice President
ADDRESS FOR ALL REQUIRED
FINANCIAL INFORMATION:
ABN AMRO Bank N.V.
208 South LaSalle Street, Suite 1500
Chicago, Illinois 60604
Attention: Credit Administration
Telephone: (312) 992-5123
Fax: (312) 992-5111
E-Mail Address: _____________________
WITH A COPY TO:
ABN AMRO Bank N.V.
Three Riverway, Suite 1700
Houston, Texas 77056
Attention: Robert J. Cunningham
Telephone: (713) 964-3351
Fax: (713) 961-1699
E-Mail Address:[email protected]
LOAN ADMINISTRATION CONTACTS:
ABN AMRO Bank N.V.
208 South LaSalle Street, Suite 1500
Chicago, Illinois 60604
Attention: Loan Administration
Telephone: (312) 992-5152
Fax: (312) 992-5157
E-Mail Address: _____________________
<PAGE>
LETTER OF CREDIT CONTACTS:
ABN AMRO Bank N.V.
200 West Monroe Street, Suite 1100
Chicago, Illinois 60606-5002
Attention: Trade Services Department
Telephone: (888) 226-5113
Fax: (888) 226-5119
E-Mail Address: _____________________
<PAGE>
COMMITMENT: BANK ONE, TEXAS, N.A., Individually and as
$39,375,000.00 Managing Agent
By: _____________________________________
Charles Kingswell-Smith
Senior Vice President
CREDIT CONTACT:
Domestic and Eurodollar 910 Travis Street
Lending Offices: Houston, Texas 77002-4330
Attn.: Mr. Charles Kingswell-Smith
Bank One, Texas, N.A. Telephone: (713) 751-7803
910 Travis Street Telecopy: (713) 751-3544
Houston, Texas 77002 E-Mail Address: _____________________
ADMINISTRATIVE CONTACTS -
BORROWINGS, PAYMENTS, INTEREST, ETC.:
Tax Withholding Information: 910 Travis Street
Houston, Texas 77002-4225
Tax ID No.: Attn.: Ms. Karen Smith
Telephone: (713) 751-3872
Telecopy: (713) 751-3590
REMITTANCE INSTRUCTIONS:
Bank One, Texas, N.A.
ABA Transmit No.: 111000614
Name of Account: Loan Services
Account No.: 1065151010
Attn.: ___________________
Re: Santa Fe Snyder Corporation
<PAGE>
COMMITMENT: BANK OF AMERICA NATIONAL TRUST AND
$39,375,000.00 SAVINGS ASSOCIATION, Individually and as
Syndication Agent
By: _____________________________________
Ronald E. McKaig
Vice President
Domestic and Eurodollar CREDIT CONTACT:
Lending Offices: Bank of America National Trust and
Savings Association
Bank of America National Trust and 333 Clay Street, Suite 4550
Savings Association Houston, Texas 77002
231 South LaSalle Street Attn.: Ronald E. McKaig
Chicago, IL 60697 Telephone: (713) 651-4881
Telecopy: (713) 651-4888
E-Mail Address: ______________________
ADMINISTRATIVE CONTACTS -
BORROWINGS, PAYMENTS, INTEREST, ETC.:
1850 Gateway Boulevard
Concord, CA 94520
Attn.: Claudette Strickland
Telephone: (925) 675-7483
Telecopy: (925) 675-7531
COMPETITIVE BID CONTACT:
1455 Market Street
San Francisco, CA 94103
Attn.: Carolyn Alberts
Telephone: (415) 622-2020
Telecopy: (415) 622-2237
PAYMENT INSTRUCTIONS:
Bank of America National Trust and
Savings Association
ABA Routing No.: 121000358
Acct. No.: 1233-0-14364
<PAGE>
COMMITMENT: WELLS FARGO BANK (TEXAS), N.A.,
$39,375,000.00 Individually and as Documentation Agent
By: _____________________________________
Ann M. Rhoads
Vice President
ADDRESS FOR BUSINESS MATTERS:
Domestic and Eurodollar 1000 Louisiana, 3rd Floor
Lending Offices: Houston, Texas 77002
Attention: Ann Rhoads
Wells Fargo Bank Telephone: (713) 319-1367
1000 Louisiana, 3rd Floor Telecopy: (713) 739-1087
Houston, Texas 77002 E-Mail Address: [email protected]
ADDRESS FOR ADMINISTRATIVE MATTERS:
1000 Louisiana, 3rd Floor
Houston, Texas 77002
Attention: Maria Valdivia
Telephone: (713) 319-1378
Telecopy: (713) 739-1087
E-Mail Address:
201 Third Street, 8th Floor
San Francisco, CA 94103
Attn.: Oscar Enriquez
Telephone: (415) 477-5425
Teleocopy: (415) 979-0675
REMITTANCE INSTRUCTIONS:
Wells Fargo Bank
ABA #: 121000248
Name of Account: Santa Fe Snyder
Additional Info.: Loan Accounting
Dept.- Syndication
<PAGE>
COMMITMENT: BANK OF MONTREAL
$17,500,000.00
By: _____________________________________
J. B. Whitmore
Director
Address for Notices:
Domestic and Eurodollar 700 Louisiana, Suite 4400
Lending Offices: Houston, Texas 77002
Attention: Mr. James Whitmore
115 S. LaSalle Street, 11th Floor Telephone: 713/223-4400
Chicago, Illinois 60603 Telecopy: 713/223-4007
E-Mail Address: _____________________
ADMINISTRATIVE MATTERS:
115 S. LaSalle Street, 11th Floor
Chicago, Illinois 60603
Attn.: Mr. C. Reynolds
Telephone: (312) 750-3771
Telecopy: (312) 750-6061
PAYMENT INSTRUCTIONS:
Harris Trust & Savings Bank
ABA #071000288
For Credit To: Bank of Montreal, Chicago
Branch
Attn.: C. Reynolds
Reference: Santa Fe Snyder Corporation
<PAGE>
COMMITMENT: THE INDUSTRIAL BANK OF JAPAN, LIMITED,
$10,500,000.00 NEW YORK BRANCH
By: _____________________________________
Kazutoshi Kuwahara
Executive Vice President, HOUSTON
OFFICE
Address for Notices:
Domestic and Eurodollar Three Allen Center, Suite 4850
Lending Offices: 333 Clay Street
Houston, Texas 77002
The Industrial Bank of Japan, Attn.: Mr. Dan Davis, Vice President
Limited, New York Branch Telephone: (713) 651-9444 ext. 103
1251 Avenue of the Americas Telecopy: (713) 651-9209
New York, NY 10020-1104
WITH A COPY TO:
The Industrial Bank of Japan, Limited,
New York Branch
1251 Avenue of the Americas
New York, NY 10020-1104
Attn.: Mr. Robert Cumming, Credit
Administration
Telephone: (212) 282-4067
Telecopy: (212) 282-4480/(212) 282-4250
PAYMENT INSTRUCTIONS:
(VIA FED)
The Industrial Bank of Japan, Limited,
New York Branch
ABA#: 026008345
Reference: SANTA FE SYNDER CORPORATION
<PAGE>
COMMITMENT: DEUTSCHE BANK AG, NEW YORK BRANCH
$17,500,000.00 A/O CAYMAN ISLANDS BRANCH
By: _____________________________________
Stephan A. Wiedemann
Director
By: _____________________________________
Alexander Karow
Associate
Address for Notices:
DOMESTIC LENDING OFFICE:
31 W. 52nd Street
Deutsche Bank AG New York, NY 10019
New York Branch Attn.: Stephen Wiedemann, Director
31 W. 52nd Street Telephone: (212) 469-8663
New York, NY 10019 Telecopy: (212) 469-8212
Telecopy: (212) 469-4138/4139
WITH A COPY TO:
EURODOLLAR LENDING OFFICE:
Deutsche Bank AG
Deutsche Bank AG New York Branch
Cayman Island Branch 31 W. 52nd Street
c/o New York Branch New York, NY 10019
31 W. 52nd Street Attn.: Ms. Donna Quilty
New York, NY 10019 Telephone: (212) 469-8196
Telecopy: (212) 469-4138/4139 Telecopy: (212) 469-8173
OPERATION CONTACT:
Deutsche Bank AG
New York Branch
31 W. 52nd Street
New York, NY 10019
Attn.: Joe Gyurindak
Telephone: (212) 469-4107
Telecopy: (212) 469-4138/4139
PAYMENT INSTRUCTIONS:
Deutsche Bank AG
New York Branch
ABA#: 026003780
<PAGE>
Reference: Santa Fe Snyder
<PAGE>
COMMITMENT: CREDIT LYONNAIS NEW YORK BRANCH,
$31,500,000.00 Individually and as a Co-Agent
By: _____________________________________
Philippe Soustra
Senior Vice President
CREDIT CONTACT:
Domestic and Eurodollar 1000 Louisiana, Suite 5360
Lending Offices: Houston, Texas 77002
Attn.: Jeffrey Baker
Credit Lyonnais New York Branch Telephone: (713) 753-8711
1301 Avenue of the Americas Telecopy: (713) 751-0307 or (713) 751-0421
New York, NY 10019 E-Mail Address: _____________________
BACKUP CONTACT:
1000 Louisiana, Suite 5360
Houston, Texas 77002
Attn.: John Falbo
Telephone: (713) 753-8704
Telecopy: (713) 751-0307 or (713) 751-0421
ADMINISTRATIVE CONTACTS -
BORROWINGS, PAYMENTS, INTEREST, ETC.:
1000 Louisiana, Suite 5360
Houston, Texas 77002
Attn.: Bernadette Archie
Telephone: (713) 753-8723
Telecopy: (713) 759-9766 or (713) 751-0421
PAYMENT INSTRUCTIONS:
Credit Lyonnais New York
ABA No.: 026008073
Account No.: 01-88179-3701-00-179
Ref.: Santa Fe Snyder
<PAGE>
COMMITMENT: THE BANK OF NEW YORK
$17,500,000.00
By: _____________________________________
Peter W. Keller
Vice President
CREDIT CONTACT:
Domestic and Eurodollar One Wall Street, 19th Floor
Lending Offices: New York, NY 10286
Attn.: Peter W. Keller, Vice President
The Bank of New York Telephone: (212) 635-7834
One Wall Street, 19th Floor Telecopy: (713) 635-7552
Energy Division E-Mail Address: _____________________
New York, NY 10286
ADMINISTRATIVE CONTACTS -
BORROWINGS, PAYMENTS, INTEREST, ETC.:
Tax Withholding Information: One Wall Street, 19th Floor
New York, NY 10286
Tax ID No.: 13-5160382 Attn.: Lisa Williams
Telephone: (212) 635-7535
Telecopy: (212) 635-7552
REMITTANCE INSTRUCTIONS:
The Bank of New York
ABA Transmit No.: 021000018
Name of Account: Commercial Loan Dept.
GLA No.: 111556
Ref.: Account Name
<PAGE>
COMMITMENT: THE FUJI BANK, LIMITED
$17,500,000.00
By: _____________________________________
Yoshiaki Inoue
Vice President & Manager
CREDIT CONTACT:
Domestic and Eurodollar The Fuji Bank, Limited
Lending Offices: Two World Trade Center, 79th Floor
New York, NY 10048
The Fuji Bank, Limited- Attn.: Andrew Chen, Assistant Treasurer
New York Branch Telephone: (212) 898-2629
Two World Trade Center, 79th Floor Telecopy: (212) 488-2172
New York, NY 10048 E-Mail Address:
Attn.: Project Finance Division
for the Americas
BACKUP CONTACT:
The Fuji Bank, Limited
Two World Trade Center, 79th Floor
New York, NY 10048
Attn.: Zahid Qureshi, Assistant Vice
President
Telephone: (212) 898-2633
Telecopy: (212) 488-2172
ADMINISTRATIVE CONTACTS -
BORROWINGS, PAYMENTS, INTEREST, ETC.:
The Fuji Bank, Limited
Two World Trade Center, 79th Floor
New York, NY 10048
Attn.: Sally Yaung
Telephone: (212) 898-2096
Telecopy: (212) 488-8216 or (212) 321-9407
BACKUP CONTACT:
The Fuji Bank, Limited
Two World Trade Center, 79th Floor
New York, NY 10048
Attn.: Tina Catapano
Telephone: (212) 898-2099
Telecopy: (212) 488-8216 or (212) 321-9407
<PAGE>
PAYMENT INSTRUCTIONS:
The Fuji Bank, Limited - New York Branch
ABA Transmit No.: 026009700
Account No.: 515011
Ref.: Santa Fe Snyder
Attn.: LAD
<PAGE>
COMMITMENT: SALOMON BROTHERS HOLDING
$31,500,000.00 COMPANY INC., Individually and as a Co-Agent
By: _____________________________________
Timothy L. Freeman
Attorney-in-Fact
Domestic and Eurodollar CREDIT CONTACT:
Lending Offices: 787 W. 5th Street, 29th Floor
Los Angeles, CA 90071
__________________________ Attn.: Sara Ahmed, Assistant Vice President
__________________________ Telephone: (213) 239-1758
__________________________ Telecopy: (213) 624-3743
E-Mail Address: _____________________
BACK-UP CREDIT CONTACT:
787 W. 5th Street, 29th Floor
Los Angeles, CA 90071
Telephone: (213) 239-1982
Telecopy: (213) 624-3743
Attn.: Michael Leyland
ADMINISTRATIVE CONTACTS -
BORROWINGS, PAYMENTS, INTEREST, ETC.:
333 West 34th Street, 4th Floor
New York, NY 10001
Attn.: Michael Braithwaite
Telephone: (212) 615-7714
Telecopy: (212) 615-7715
PAYMENT INSTRUCTIONS:
Chase Manhattan Bank
New York, NY
ABA Transmit No.: 021-000-021
Account Name: Salomon Brothers Holding Co.,
Inc.
Account No.: 066 296 722
Attn.: Mike Braithwaite
Re: Santa Fe Snyder, Bank Loan Dept.
<PAGE>
COMMITMENT: THE BANK OF NOVA SCOTIA, as a Bank and
$17,500,000.00 as Co-Agent
By: _____________________________________
F.C.H. Ashby
Senior Manager Loan Operations
ADDRESS FOR NOTICES:
Domestic and Eurodollar 600 Peachtree Street N.E., Suite 2700
Lending Offices: Atlanta, Georgia 30308
Attn.: Phyllis Walker
__________________________ Telephone: (404) 877-1552
__________________________ Telecopy: (404) 888-8998
__________________________ E-Mail Address: _____________________
WITH FURTHER NOTICES TO:
1100 Louisiana, Suite 3000
Houston, Texas 77002
Attn.: Mark Ammerman
Telephone: (713) 759-3442
Telecopy: (713) 759-2425
E-Mail Address: _______________________
<PAGE>
PRICING SCHEDULE
EXHIBITS:
A - Form of Note
B - Form of Subsidiary Guarantee
C - Request for Extension of Credit
D - Form of Assignment Agreement
E - Form of Application
F - Form of Rate
Designation Notice
SCHEDULES:
I - Restricted and Unrestricted Subsidiaries
II - Opinion of Andrews & Kurth L.L.P.
III - Opinion of David L. Hicks
IV - Subordination Provisions
EXHIBIT 10(B)
364-DAY CREDIT AGREEMENT
DATED AS OF MAY 5, 1999
AMONG
SANTA FE SNYDER CORPORATION,
THE BANKS SIGNATORY HERETO
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS SYNDICATION AGENT
WELLS FARGO BANK (TEXAS), N.A., AS DOCUMENTATION AGENT
BANK ONE, TEXAS, N.A., AS MANAGING AGENT
ABN AMRO BANK N.V.
CREDIT LYONNAIS NEW YORK BRANCH
SALOMON BROTHERS HOLDING COMPANY INC.
AS CO-AGENTS
<PAGE>
TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS................................1
1.1. CERTAIN DEFINED TERMS.............................................1
1.2. ACCOUNTING TERMS AND DETERMINATIONS..............................21
1.3. TYPES OF LOANS...................................................22
SECTION 2. COMMITMENTS......................................................22
2.1. LOANS............................................................22
2.2. TERMINATIONS, REDUCTIONS AND CHANGES OF COMMITMENTS..............24
2.3. FEES.............................................................25
2.4. AFFILIATES; LENDING OFFICES......................................25
2.5. SEVERAL OBLIGATIONS..............................................25
2.6. NOTES............................................................25
2.7. USE OF PROCEEDS..................................................26
2.8. INCREASE OF COMMITMENTS..........................................26
2.9 CHAPTER 346 DOES NOT APPLY.......................................27
SECTION 3. BORROWINGS AND PREPAYMENTS.......................................27
3.1. BORROWINGS.......................................................27
3.2. PREPAYMENTS......................................................27
SECTION 4. PAYMENTS OF PRINCIPAL AND INTEREST...............................28
4.1. REPAYMENT OF LOANS...............................................28
4.2. INTEREST.........................................................28
4.3. SELECTION OF INTEREST RATES......................................28
SECTION 5. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS, ETC..................29
5.1. PAYMENTS.........................................................29
5.2. PRO RATA TREATMENT...............................................30
5.3. COMPUTATIONS.....................................................30
5.4. MINIMUM AND MAXIMUM AMOUNTS......................................30
5.5. CERTAIN ACTIONS, NOTICES, ETC....................................30
5.6. NON-RECEIPT OF FUNDS BY THE AGENT................................31
5.7. SHARING OF PAYMENTS, ETC.........................................32
SECTION 6. YIELD PROTECTION AND ILLEGALITY..................................32
6.1. ADDITIONAL COSTS.................................................32
6.2. LIMITATION ON TYPES OF LOANS.....................................34
6.3. ILLEGALITY.......................................................35
6.4. SUBSTITUTE ALTERNATE BASE RATE LOANS.............................36
<PAGE>
6.5. COMPENSATION.....................................................36
6.6. CAPITAL ADEQUACY.................................................37
SECTION 7. CONDITIONS PRECEDENT.............................................38
7.1. INITIAL CONDITIONS PRECEDENT.....................................38
7.2. ALL LOANS........................................................40
7.3. CONVERSIONS AND CONTINUATIONS OF EURODOLLAR LOANS................41
SECTION 8. REPRESENTATIONS AND WARRANTIES...................................41
8.1. CORPORATE EXISTENCE..............................................41
8.2. INFORMATION......................................................42
8.3. LITIGATION; COMPLIANCE...........................................43
8.4. NO BREACH........................................................43
8.5. NECESSARY ACTION.................................................43
8.6. APPROVALS........................................................43
8.7. REGULATION U.....................................................44
8.8. ERISA............................................................44
8.9. TAXES............................................................44
8.10. SUBSIDIARIES.....................................................44
8.11. INVESTMENT COMPANY ACT...........................................45
8.12. PUBLIC UTILITY HOLDING COMPANY ACT; FEDERAL POWER ACT............45
8.13. ENVIRONMENTAL MATTERS............................................45
8.14. TITLE............................................................45
8.15. YEAR 2000 COMPLIANCE.............................................46
SECTION 9. COVENANTS........................................................46
9.1. FINANCIAL STATEMENTS AND CERTIFICATES............................46
9.2. INSPECTION OF PROPERTY...........................................49
9.3. COMPLIANCE WITH ENVIRONMENTAL LAWS...............................50
9.4. PAYMENT OF TAXES.................................................50
9.5. MAINTENANCE OF INSURANCE.........................................50
9.6. NET WORTH........................................................50
9.7. TOTAL DEBT TO EBITDAX............................................50
9.8 RESTRICTED PAYMENTS..............................................50
9.9. LIENS............................................................51
9.10. FUNDAMENTAL CHANGES..............................................51
9.11 ASSET SALES......................................................53
9.12 INVESTMENTS......................................................53
9.13. INDEBTEDNESS AND GUARANTEES OF INDEBTEDNESS BY RESTRICTED
SUBSIDIARIES.....................................................53
9.14 SALES AND LEASEBACKS.............................................54
9.15. TRANSACTIONS WITH AFFILIATES.....................................55
9.16 RESTRICTIVE AGREEMENTS...........................................55
9.17. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.........55
<PAGE>
9.18. YEAR 2000 COMPLIANCE............................................56
SECTION 10. DEFAULTS........................................................56
10.1. EVENTS OF DEFAULT...............................................56
SECTION 11. THE AGENT.......................................................59
11.1. APPOINTMENT, POWERS AND IMMUNITIES..............................59
11.2. RELIANCE BY AGENT...............................................60
11.3. DEFAULTS........................................................60
11.4. RIGHTS AS A BANK................................................60
11.5. INDEMNIFICATION.................................................61
11.6. NON-RELIANCE ON THE AGENT AND OTHER BANKS.......................61
11.7. FAILURE TO ACT..................................................61
11.8. RESIGNATION OR REMOVAL OF THE AGENT.............................62
11.9. NO DUTY OR OBLIGATIONS..........................................62
SECTION 12. MISCELLANEOUS....................................................62
12.1. WAIVER..........................................................62
12.2. NOTICES.........................................................62
12.3. EXPENSES........................................................63
12.4. INDEMNIFICATION.................................................63
12.5. AMENDMENTS, ETC.................................................64
12.6. SUCCESSORS AND ASSIGNS..........................................64
12.7. SURVIVAL; TERMINATION; REINSTATEMENT............................67
12.8. LIMITATION OF INTEREST..........................................67
12.9. CAPTIONS........................................................68
12.10. COUNTERPARTS....................................................68
12.11. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.68
12.12. CONFIDENTIALITY.................................................69
12.13. ENTIRE AGREEMENT................................................70
12.14. CONSTRUCTION....................................................70
12.15. SEVERABILITY....................................................70
<PAGE>
PRICING SCHEDULE
EXHIBITS:
A - Form of Note
B - Form of Subsidiary Guarantee
C - Request for Extension of Credit
D - Form of Assignment Agreement
E - Form of Rate Designation Notice
SCHEDULES:
I - Restricted and Unrestricted Subsidiaries
II - Opinion of Andrews & Kurth L.L.P.
III - Opinion of David L. Hicks
IV - Subordination Provisions
<PAGE>
364-DAY CREDIT AGREEMENT
This 364-Day Credit Agreement (as amended, modified, supplemented or
restated from time to time, this "AGREEMENT") dated as of May 5, 1999, is by and
among SANTA FE SNYDER CORPORATION (the "COMPANY"), a Delaware corporation; each
of the financial institutions which is or may from time to time become a party
hereto (individually a "BANK" and collectively the "BANKS"); BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, as Syndication Agent; WELLS FARGO BANK
(TEXAS), N.A., as Documentation Agent; BANK ONE, TEXAS, N.A., as Managing Agent;
ABN AMRO BANK N.V., CREDIT LYONNAIS NEW YORK BRANCH and SALOMON BROTHERS HOLDING
COMPANY INC., as Co-Agents; and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a
national banking association, as Administrative Agent for the Banks (in such
capacity, together with any other Person who becomes the Agent pursuant to
SECTION 11.8, the "AGENT").
The parties agree as follows:
Section 1. DEFINITIONS AND ACCOUNTING MATTERS.
1.1. CERTAIN DEFINED TERMS. As used in this Agreement or the other Credit
Documents, the following terms shall have the following meanings:
"ADDITIONAL COSTS" shall have the meaning ascribed to such term in SECTION
6.1.
"AFFILIATE" shall mean, as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person; and with respect to an individual, "AFFILIATE" shall also mean any
individual related to such individual by blood or marriage. As used in this
definition, "CONTROLS", "CONTROLLED BY" and "UNDER COMMON CONTROL WITH" shall
mean the possession, directly or indirectly, of power to direct or cause the
direction of the management or policies (whether through ownership of securities
or partnership or other ownership interests, by contract or otherwise).
"AGENT" shall have the meaning ascribed to such term in the introduction.
"AGGREGATE COMMITMENT" shall mean, at any time, the total of all
Commitments at such time.
"AGREEMENT" shall have the meaning ascribed to such term in the
introduction.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next higher 1/100%) equal to the greater of (a)
the Prime Rate in effect on such day or (b) the Fed Funds Rate in effect for
such day plus 1/2%. Any change in the Alternate Base Rate due to a change in the
Fed Funds Rate or the Prime Rate shall be effective on the effective date of
<PAGE>
such change in the Fed Funds Rate or the Prime Rate. If for any reason the Agent
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Fed Funds Rate for any reason,
including the inability or failure of the Agent to obtain sufficient bids or
publications in accordance with the terms hereof, the Alternate Base Rate shall
be the Prime Rate until the circumstances giving rise to such inability no
longer exist.
"ALTERNATE BASE RATE LOANS" shall mean Loans which bear interest at a rate
based upon the Alternate Base Rate.
"APPLICABLE ENVIRONMENTAL LAWS" shall mean all applicable environmental or
pollution-control Legal Requirements governing, without limitation, wastewater
effluent, solid and hazardous waste or substances, and air emissions, together
with any applicable requirements for conducting, on a timely basis, reporting,
record-keeping, periodic tests and monitoring for contamination of ground water,
surface water, air and land and for biological toxicity of the aforesaid,
including, without limitation, the Resource Conservation and Recovery Act of
1976, The Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (as amended by the Superfund Amendments and Reauthorization Act), the
Emergency Planning and Community Right-to-Know Act, the Toxic Substances Control
Act, the Solid Waste Disposal Act, the Safe Drinking Water Act, the Hazardous
Materials Transportation Act, the Clean Air Act, the Clean Water Act, the Oil
Pollution Act, and the Federal Insecticide, Fungicide and Rodenticide Act, in
each case as amended from time to time.
"APPLICABLE LENDING OFFICE" shall mean, for each Bank and for each Type of
Loan, the lending office of such Bank (or of an Affiliate of such Bank)
designated for such Type of Loan below its name on the signature pages hereof or
such other office of such Bank (or of an Affiliate of such Bank) as such Bank
may from time to time specify to the Agent and the Company as the office by
which its Loans of such Type are to be made and/or issued and maintained.
"APPLICABLE MARGIN" shall mean (a) on any day during any Margin Period,
with respect to any Eurodollar Loan or any Alternate Base Rate Loan, the percent
per annum determined for each day during such Margin Period according to the
Pricing Schedule; (b) if no Margin Period is in effect, the rate determined from
time to time according to SECTION 4.3(B); and (c) on each day when the Company's
senior or corporate (including implied) unsecured and unenhanced long-term debt
for borrowed money ("INDEX DEBT") is rated by neither S&P nor Moody's, the
percent per annum determined for such day as if such debt were rated BB-/Ba3.
For purposes of the foregoing, (x) if only one of Moody's or S&P shall have in
effect a rating for Index Debt, the Company and the Banks will negotiate in good
faith to agree upon another rating agency to be substituted by an amendment to
this Agreement for the rating agency which shall not have a rating in effect,
and in the absence of such amendment the Applicable Margin will be determined by
reference to the available rating; (y) if the ratings established by Moody's and
S&P shall fall within different categories, the Applicable Margin shall be
determined by reference to the higher rating (for example, if the rating from
S&P is BBB and the rating from Moody's is Baa3, the Applicable Margin shall be
determined by reference to the rating issued by S&P); and (z) if any rating
established by
2
<PAGE>
Moody's or S&P shall be changed (other than as a result of a change in the
rating system of either Moody's or S&P), such change shall be effective as of
the date on which change is first announced by the rating agency making such
change. Each change in Applicable Margin shall apply during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If the rating
system of either Moody's or S&P shall change, the Company and the Banks shall
negotiate in good faith to amend the references to specific ratings in this
definition to reflect such changed rating system. If both Moody's and S&P shall
cease to be in the business of rating corporate debt obligations, the Company
and the Banks shall negotiate in good faith to agree upon a substitute rating
agency and to amend the references to specific ratings in this definition to
reflect the ratings used by such substitute rating agency.
"ASSET SALE" shall mean any sale, issuance, conveyance, transfer, lease or
other disposition to any Person other than the Company or any Wholly-Owned
Restricted Subsidiary (including any by way of merger or consolidation)
(collectively, a "TRANSFER"), directly or indirectly, in one or a series of
related transactions, of (a) any Capital Stock of any Restricted Subsidiary held
by the Company or any Restricted Subsidiary (including the issuance by a
Restricted Subsidiary of additional Capital Stock), or (b) any Properties of the
Company or any Restricted Subsidiary (including Production Payments), OTHER THAN
(i) a disposition or exchange of Hydrocarbons or other mineral products (other
than Production Payments), inventory, accounts receivable, cash, Cash
Equivalents or other Property in the ordinary course of business, (ii) an
exchange of Hydrocarbon Properties outside the ordinary course of business,
PROVIDED that the aggregate fair market value of the Hydrocarbon Properties so
Transferred in any one transaction or series of related transactions shall not
exceed $150,000,000; (iii) any lease, abandonment, disposition, relinquishment
or farm-out of any oil and gas Property in the ordinary course of business; or
(iv) the liquidation of Property received in settlement of debts owing to the
Company or any Restricted Subsidiary as a result of foreclosure, perfection or
enforcement of any Lien or debt, which debts were owing to the Company or any
Restricted Subsidiary in the ordinary course of business of the Company or such
Restricted Subsidiary. For the purposes of this definition, the term "Asset
Sale" shall not include (i) any Transfer of Properties which is governed by, and
made in accordance with, the provisions of SECTION 9.10 or (ii) any Transfer of
the securities, the Property or assets of any Unrestricted Subsidiary.
"ASSIGNMENT AGREEMENT" shall mean an Assignment and Acceptance Agreement
substantially in the form of EXHIBIT D.
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback transaction shall
mean, at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"BANKS" shall have the meaning ascribed to such term in the introduction.
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"BOARD" shall mean the Board of Governors of the Federal Reserve System of
the United States or any entity succeeding to all or part of its functions.
"BUSINESS DAY" shall mean (i) any day other than a day on which commercial
banks are authorized or required to close in Houston, Texas, in New York, New
York, or both, and (ii) where such term is used in the definition of "QUARTERLY
DATE" or, if such day relates to a borrowing of, a payment or prepayment of
principal of or interest on, or an Interest Period for, a Eurodollar Loan or a
notice by the Company with respect to any such borrowing, payment, prepayment or
Interest Period, a day which is also a day on which dealings in Dollar deposits
are carried out in the relevant Eurodollar interbank market.
"BUSINESS ENTITY" shall mean a corporation, partnership, limited
partnership, limited liability company, joint stock association, business trust
or other separate business entity.
"CAPITAL STOCK" shall mean, with respect to any Person, any and all
shares, interests, participations, rights in or other equivalents in the equity
interests (however designated) in such Person, and any option or warrant for or
any right to purchase or subscribe for any equity security of such Person or any
security convertible into or exchangeable for any equity security of such Person
or convertible into or exchangeable for any right to purchase or subscribe for
any equity security of such Person.
"CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which,
under GAAP, is or will be required to be capitalized on the books of the Company
or any Restricted Subsidiary, taken at the amount thereof accounted for as
indebtedness (net of interest expense) in accordance with GAAP.
"CASH EQUIVALENTS" shall mean (a) any evidence of indebtedness with a
maturity of 365 days or less issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(PROVIDED that the full faith and credit of the United States of America is
pledged in support thereof); (b) demand and time deposits and certificates of
deposit or acceptances with a maturity of 365 days or less of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $500,000,000; (c)
commercial paper with a maturity of 365 days or less issued by a corporation
that is not an Affiliate of the Company and is organized under the laws of any
state of the United States or the District of Columbia and rated at least A-1 by
S&P or at least P-1 by Moody's; (d) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in CLAUSE
(A) above entered into with any commercial bank meeting the specifications of
CLAUSE (B) above; (e) overnight bank deposits and bankers' acceptances at any
commercial bank meeting the qualifications specified in CLAUSE (B) above; (f)
deposits available for withdrawal on demand with any commercial bank not meeting
the qualifications specified in CLAUSE (B) above but which is organized under
the laws of any country in which the Company or any Restricted Subsidiary
maintains an office or is engaged in the Oil and Gas Business, PROVIDED that (i)
all such deposits are required to be made in such accounts in the ordinary
course of business, (ii) such deposits do not at any one time exceed $5,000,000
in the aggregate and (iii) no funds so deposited remain on deposit
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in such bank for more than 30 days; (g) deposits available for withdrawal on
demand with any commercial bank not meeting the qualifications specified in
CLAUSE (B) above but which is a lending bank under any of the Company's or any
Restricted Subsidiary's credit facilities, PROVIDED all such deposits do not
exceed $5,000,000 in the aggregate at any one time; and (h) investments in money
market funds substantially all of whose assets comprise securities of the types
described in CLAUSES (A) THROUGH (E).
"CHANGE OF CONTROL" shall mean the occurrence of any of the following
events: (a) 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, herein called the
"EXCHANGE ACT") is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of more than 50% of the total
voting power of the outstanding Voting Stock of the Company; (b) the Company is
merged with or into or consolidated with another Person and, immediately after
giving effect to the merger or consolidation, (i) less than 50% of the total
voting power of the outstanding Voting Stock of the surviving or resulting
Person is then "beneficially owned" (within the meaning of Rule 13d-3 under the
Exchange Act) in the aggregate by the stockholders of the Company immediately
prior to such merger or consolidation, and (ii) any "person" or "group" (as
defined in Section 13(d)(3) or 14(d)(2) of the Exchange Act) has become the
direct or indirect "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of more than 50% of the total voting power of the Voting Stock of
the surviving or resulting Person; (c) during any consecutive two-year period,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by such
Board of Directors or whose nomination for election by the stockholders of the
Company 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 the Company then in
office; or (d) the liquidation or dissolution of the Company.
"CHASE TEXAS" shall mean Chase Bank of Texas, National Association, in its
individual capacity.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, or any
successor statute, together with all publicly available written regulations,
rulings and interpretations thereof or thereunder by the Internal Revenue
Service or any entity succeeding to all or part of its functions.
"COMBINED GROUP" shall mean the Company and the Restricted Subsidiaries.
"COMMITMENT" shall mean, as to any Bank, the obligation, if any, of such
Bank to extend credit to the Company in the form of Loans in an aggregate
principal amount at any one time outstanding up to but not exceeding the amount
set forth opposite such Bank's name on the signature pages of this Agreement
under the caption "Commitment" or in its Assignment Agreement (as the same may
be reduced from time to time or terminated pursuant to SECTION 2.2, modified
pursuant to SECTION 12.6 or increased from time to time pursuant to this
Agreement).
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"COMMITMENT PERCENTAGE" shall mean, as to any Bank at any time, the
percentage equivalent of a fraction, the numerator of which is such Bank's
Commitment at such time and the denominator of which is the Aggregate Commitment
at such time.
"COMPANY" shall have the meaning ascribed to such term in the
introduction; PROVIDED, HOWEVER, that as used in SECTION 8 and the definitions
used therein, for periods before the Merger, "Company" shall mean each of Santa
Fe and Snyder.
"CONSOLIDATED NET EARNINGS" shall mean consolidated gross revenues
(including capital gains) of the Company and the Restricted Subsidiaries less
all operating and non-operating expenses of the Company and the Restricted
Subsidiaries including all charges of a proper character (including current and
deferred taxes on income, provision for taxes on unremitted foreign earnings
which are included in gross revenues, and current additions to reserves), but
not including in gross revenues any gains resulting from write-up of assets, any
equity of the Company or any Restricted Subsidiary in the unremitted earnings of
any Person which is not a Restricted Subsidiary, or any deferred credit
representing the excess of equity in any Restricted Subsidiary at the date of
acquisition over the cost of the investment in such Restricted Subsidiary; all
determined in accordance with GAAP; PROVIDED, that in computing Consolidated Net
Earnings there shall be excluded write-downs resulting from impairments of the
value of oil and gas assets.
"CONSOLIDATED NET WORTH" shall mean, at any date, the consolidated
stockholders' equity of the Company and the Restricted Subsidiaries MINUS (to
the extent included in the calculation of consolidated stockholders' equity) the
aggregate amount of Investments in Unrestricted Subsidiaries, all determined in
accordance with the last sentence of the definition of "Investment" and GAAP.
"CONSOLIDATED NET WORTH FLOOR ADJUSTMENT" shall mean an amount equal to,
on any day, the sum on such day of
(a) fifty percent (50%) of the Consolidated Net Earnings of the
Company and the Restricted Subsidiaries, to the extent positive, (i) for all
periods ending within a fiscal year, on a cumulative year-to-date basis for the
period beginning (x) for periods in 1999, May 1, 1999 and (y) for periods in
each succeeding fiscal year, January 1 of such fiscal year and ending, in each
case, on the Quarterly Date then most recently ended, and (ii) for the year 1999
and for each of the Company's succeeding fiscal years, for such fiscal year,
with all fiscal years beginning with 1999 through the fiscal year ending
immediately prior to the fiscal year in which such day occurs being cumulated,
PLUS
(b) seventy-five percent (75%) of the net proceeds to the Company or
any Restricted Subsidiary of any issuance (after the date of this Agreement and
before such day) by the Company or any Restricted Subsidiary of any equity
security or any option or warrant for or any right to purchase or subscribe for
any equity security or any security convertible into or
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exchangeable for any equity security or convertible into or exchangeable for any
option or warrant for or any right to purchase or subscribe for any equity
security, MINUS
(c) aggregate write-downs resulting from impairments of the value of
oil and gas assets taken since May 1, 1999.
"CONTINUATION" shall have the meaning ascribed to such term in SECTION
4.3.
"CONVERSION" shall have the meaning ascribed to such term in SECTION 4.3.
"CREDIT DOCUMENTS" shall mean this Agreement, the Notes, all Subsidiary
Guarantees, the Notice of Entire Agreement, and all instruments, certificates
and agreements now or hereafter executed or delivered to the Agent or any Bank
pursuant to any of the foregoing.
"DEFAULT" shall mean an Event of Default or an event, circumstance or
condition which with notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"DOLLAR-DENOMINATED PRODUCTION PAYMENTS" shall mean production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"EBITDAX" shall mean, for any period, Consolidated Net Earnings for such
period (calculated, for purposes of this definition only, without taking into
account extraordinary items under GAAP or capital gains or capital losses), plus
the aggregate amounts deducted in determining Consolidated Net Earnings in
respect of (a) all provisions for any federal, state or other income taxes made
by the Company and the Restricted Subsidiaries during such period; (b) Fixed
Charges of the Company and the Restricted Subsidiaries during such period; (c)
depreciation, depletion and amortization charges of the Company and the
Restricted Subsidiaries for such period; (d) exploration expenses of the Company
and the Restricted Subsidiaries for such period; (e) dividends on preferred
stock of the Company; and (f) all other non-cash charges and non-recurring
charges with respect to the Company and the Restricted Subsidiaries for such
period, all determined in accordance with GAAP; PROVIDED, HOWEVER, that EBITDAX
shall mean, for any calculation, $67,600,000, $56,700,000, $48,600,000 and
$47,900,000 for the fiscal quarters ended June 30, 1998, September 30, 1998,
December 31, 1998 and March 31, 1999, respectively; PROVIDED FURTHER, that on
and after the Financial Statement Delivery Date for the fiscal quarter ended
June 30, 1999, EBITDAX for the fiscal quarter ended June 30, 1999, shall be
$23,300,000 plus EBITDAX (determined in accordance with the first clause of this
sentence) for the two months ended June 30, 1999; and PROVIDED FURTHER, that, if
since the beginning of any period for which EBITDAX is being determined, the
Company or any of its Restricted Subsidiaries has acquired or disposed of assets
in any transaction or series of related transactions in the aggregate involving
cash or other consideration in an amount equal to or greater than $20,000,000,
EBITDAX shall be calculated on a pro forma basis as if such acquisition or
disposition had occurred on the first day of such period.
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"ELIGIBLE ASSIGNEE" shall mean (a) a commercial bank (or an affiliate of a
commercial bank) organized or licensed under the laws of the United States of
America, or a state thereof, and having total assets in excess of
$1,000,000,000, (b) a commercial bank organized under the laws of any other
country which is a member of the OECD, or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, PROVIDED that such
bank is acting through a branch or agency located in the country in which it is
organized or another country that also is a member of the OECD, and (c) a
finance company, insurance company, other financial institution or fund,
acceptable to the Agent and the Company, which is regularly engaged in making,
purchasing or investing in commercial loans and having total assets in excess of
$1,000,000,000.
"ENVIRONMENTAL CLAIM" shall mean any claim, demand, action, cause of
action, suit, judgment, governmental or private investigation or proceeding
relating to remediation or compliance with Applicable Environmental Laws, or any
proceeding or lien, whether threatened, sought, brought or imposed, that seeks
to recover costs, damages, punitive damages, expenses, fines, criminal
liability, judgments, response costs, investigative and monitoring costs,
abatement costs, attorney's fees, expert's fees or consultant's fees, or seeks
to impose liability regarding the Company or any of its Subsidiaries, or any of
their sites or Properties for violations of Applicable Environmental Laws or for
pollution, contamination, investigation, preservation, protection, remediation
or clean up of the air, surface water, ground water, soil or wetlands, or
otherwise in relation to the use, storage, generation, release, handling or
disposal of materials and substances that are regulated by or subject to
Applicable Environmental Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor statute, and all rules, regulations
and interpretations by the Internal Revenue Service or the Department of Labor,
or any entity succeeding to all or part of their respective functions.
"ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated) which is a member of a group of which the Company is a member and
which is under common control with the Company within the meaning of the
regulations under Section 414 of the Code.
"EURODOLLAR LOANS" shall mean Loans which bear interest at a rate based on
a rate referred to in the definition of "EURODOLLAR RATE".
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"EURODOLLAR RATE" shall mean, for any Interest Period for any Eurodollar
Loan, the rate per annum (rounded upwards, if necessary, to the nearest 1/100%)
determined by the Agent based upon rates quoted at approximately 10:00 a.m.
(local time in the relevant Eurodollar interbank market) (or as soon thereafter
as practicable) on the day two Business Days prior to the first day of such
Interest Period for the offering by Chase Texas to leading dealers in such
Eurodollar interbank market of Dollar deposits for delivery on the first day of
such Interest Period, in immediately available funds and having a term
comparable to such Interest Period and in an amount comparable to the principal
amount of the respective Eurodollar Loan to which such Interest Period relates.
Each determination of the Eurodollar Rate shall be conclusive and binding,
absent manifest error, and may be computed using any reasonable averaging and
attribution method.
"EVENT OF DEFAULT" shall have the meaning ascribed to such term in
SECTION 10.
"EXISTING SANTA FE CREDIT FACILITY" shall mean the Credit Agreement dated
as of November 13, 1996, by and among Santa Fe; Chase Texas (formerly known as
Texas Commerce Bank National Association) as the Agent; and the financial
institutions from time to time party thereto, as amended to the date of this
Agreement.
"EXISTING SNYDER CREDIT FACILITY" shall mean the Fifth Restated Credit
Agreement dated as of June 30, 1994, by and among Snyder; NationsBank, N.A. as
the Agent; and the financial institutions from time to time party thereto, as
amended to the date of this Agreement.
"FACILITY FEES" shall have the meaning ascribed to such term in SECTION
2.3.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any entity
succeeding to any or all of its functions.
"FED FUNDS RATE" shall mean, for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) on the
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Agent from three
federal funds brokers of recognized standing selected by it.
"FINANCIAL STATEMENT DELIVERY DATE" shall mean the date on which the
quarterly or annual financial statements of the Company are delivered pursuant
to SECTION 9.1(A) or SECTION 9.1(B), as the case may be.
"FIXED CHARGES" shall mean (without duplication) for any period the sum of
interest expense in respect of all Total Debt of the Person for which the
determination is made, including imputed interest expense in respect of
Capitalized Lease Obligations.
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"GAAP" shall mean, as to a particular Person, such accounting practice as,
in the opinion of the independent accountants of recognized national standing
regularly retained by such Person and acceptable to the Agent, conforms at the
time to United States generally accepted accounting principles, consistent with
those applied in the preparation of the financial statements referred to in
SECTION 8.2(A), together with changes with which the Company's independent
auditors concur and which are noted in the financial statements provided
pursuant to SECTION 9.1(B).
"GOVERNMENTAL AUTHORITY" shall mean any sovereign governmental authority,
the United States of America, any State of the United States and any political
subdivision of any of the foregoing, and any agency, instrumentality,
department, commission, board, bureau, central bank, authority, court or other
tribunal, in each case whether executive, legislative, judicial, regulatory or
administrative, having jurisdiction over the Company, any of the Company's
Subsidiaries, any of their respective Property, the Agent or any Bank.
"GUARANTEE" shall mean any act by which a Person assumes, guarantees,
endorses or otherwise incurs direct or contingent liability in connection with,
or agrees to purchase or otherwise acquire or otherwise assures a creditor
against loss in respect of, any indebtedness of any Person other than the
Company or any of its consolidated Subsidiaries.
"HIGHEST LAWFUL RATE" shall mean, on any day, the maximum nonusurious rate
of interest permitted for that day by whichever of applicable federal or Texas
law permits the higher interest rate, stated as a rate per annum. On each day,
if any, that applicable Texas law establishes the Highest Lawful Rate, the
Highest Lawful Rate shall be the "weekly ceiling" (as defined in ss.303 of the
Texas Finance Code and Chapter 1D of Title 79, Texas Rev. Civ. Stats. 1925, as
amended, respectively) for that day.
"HYDROCARBONS" shall mean crude oil, condensate, natural gas, natural gas
liquids and associated substances.
"INDEMNIFIED PERSON" shall mean the Agent, Chase Texas, each of the Banks,
each Affiliate of any such Person, and their respective directors, officers,
employees, agents and advisors.
"INTEREST PAYMENT DATE" shall mean with respect to any Eurodollar Loan or
Alternate Base Rate Loan, the last day of each Interest Period applicable
thereto; PROVIDED that in the case of a Eurodollar Loan with an Interest Period
of six or nine months, the Interest Payment Dates shall be the days that would
have been the Interest Payment Dates for such Loan had successive Interest
Periods of three months each been applicable to such Loan.
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"INTEREST PERIOD" shall mean:
(a) with respect to any Eurodollar Loan, the period commencing on (i) the
date such Loan is made or designated as, or the effective date of any Conversion
into, a Eurodollar Loan or (ii) in the case of a Continuation to a successive
Interest Period, the last day of the immediately preceding Interest Period, and
in each case ending on the numerically corresponding day in the first, second,
third or sixth (or, if and to the extent available to all Banks, the ninth)
calendar month thereafter, as the Company may select as provided in SECTION 4.3,
except that each such Interest Period which commences 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 Alternate Base Rate Loan, the period commencing on
the date such Loan is made as, or converted into, an Alternate Base Rate Loan
and on each Quarterly Date thereafter and ending on each next succeeding
Quarterly Date or, if earlier, the date such Loan is converted into a Eurodollar
Loan;
PROVIDED that (x) 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, with
respect to Eurodollar Loans only, such next succeeding Business Day falls in the
next calendar month, in which case such Interest Period shall end on the next
preceding Business Day; and (y) no Interest Period may be selected for any Loan
that ends later than the Maturity Date. Interest shall accrue from and including
the first day of an Interest Period to but excluding the last day of such
Interest Period.
"INTEREST RATE PROTECTION OBLIGATIONS" shall mean the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements or arrangements designed to protect
against or manage such Person's and any of its Subsidiaries' exposure to
fluctuations in interest rates.
"INVESTMENT" shall mean, with respect to any Person, any direct or
indirect advance, loan, Guarantee of indebtedness or other extension of credit
or capital contribution to (by means of any transfer of cash or other Property
to others or any payment for Property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities (including derivatives and
including, without limitation, any interests in any partnership or joint
venture) or evidences of indebtedness issued by, any other Person, but in any
event shall include as an investment in any Person the amount of all Total Debt
owed to any member of the Combined Group by such Person, and all accounts
receivable from such Person which are not current assets or did not arise from
sales to such Person in the ordinary course of business.
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"Investments" shall EXCLUDE, among other things, (i) extensions of trade credit
under a joint operating agreement or otherwise in the ordinary course of
business, workers' compensation, utility, lease and similar deposits and prepaid
expenses in the ordinary course of business, (ii) Interest Rate Protection
Obligations entered into in the ordinary course of business or as required by
any Total Debt incurred in compliance with SECTION 9.7 but only to the extent
that the stated aggregate notional amounts of such Interest Rate Protection
Obligations do not exceed 105% of the aggregate principal amount of such
indebtedness to which such Interest Rate Protection Obligations relate, (iii)
bonds, notes, debentures or other securities received as a result of Asset Sales
permitted under SECTION 9.11 and (iv) endorsements of negotiable instruments and
documents in the ordinary course of business. For purposes of this definition,
any capital contribution of assets by the Company or any Restricted Subsidiary
shall be valued at the fair market value of such assets at the time of such
contribution.
"LEGAL REQUIREMENT" shall mean any applicable law, statute, ordinance,
decree, requirement, order, judgment, rule, regulation (or official
interpretation by any Governmental Authority of any of the foregoing) of, and
the terms of any license or permit issued by, any Governmental Authority, in
each case as now or hereafter in effect.
"LIEN" shall mean any mortgage, pledge, security interest, collateral
assignment, hypothecation, encumbrance, lien or charge of any kind (including
any agreement to give any of the foregoing) and shall include conditional sale
and other title retention agreements, leases intended as security, and the
filing of, or agreement to give, any financing statement under the Uniform
Commercial Code of any jurisdiction or any other type of preferential
arrangement.
"LOAN" shall mean a loan made pursuant to SECTION 2.1.
"MARGIN PERIOD" shall mean (a) the period commencing on the date of this
Agreement and ending on the earlier of (i) the first Financial Statement
Delivery Date and (ii) August 14, 1999, and (b) thereafter, each period
beginning on a Financial Statement Delivery Date and ending on the earlier of
(x) the next Financial Statement Delivery Date and (y) the date on which
financial statements are next required to be delivered pursuant to SECTION
9.1(A) OR (B).
"MATERIAL ADVERSE CHANGE" shall mean an occurrence of whatever nature
(including any adverse determination in any litigation, arbitration or
governmental investigation or proceeding), which after taking into account
actual insurance coverage and effective indemnification with respect to such
occurrence, (a) has a material adverse effect on the financial condition,
business, operations or Properties of the Company and its Restricted
Subsidiaries taken as a whole and (b) impairs in any material respect either (1)
the ability of the Company or any Subsidiary Guarantor to perform any of its
obligations under the Credit Documents or (2) the ability of the Agent and the
Banks to enforce any of such obligations or any of their rights and remedies
under or in connection with the Credit Documents.
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"MATURITY DATE" shall mean the earlier of (a) the date the principal
amount then outstanding of and accrued and unpaid interest on the Loans, all
fees and all other amounts payable hereunder and under the Notes become due and
payable pursuant to SECTION 10.1 or (b) May 3, 2000.
"MERGER" shall mean the merger of Santa Fe and Snyder described in the
Merger Agreement.
"MERGER AGREEMENT" shall mean the Agreement and Plan of Merger dated as of
January 13, 1999, by and between Santa Fe and Snyder.
"MOODY'S" shall mean Moody's Investors Service, Inc.
"NOTES" shall have the meaning ascribed to such term in SECTION 2.6.
"NOTICE OF ENTIRE AGREEMENT" shall mean that certain Notice of Entire
Agreement and Release of Claims of even date herewith among the Company, the
Subsidiary Guarantors, and the Agent.
"OBLIGATIONS" shall mean, as at any date of determination thereof, the sum
of (a) the aggregate principal amount of Loans outstanding on such date PLUS (b)
all accrued and unpaid interest on the amounts described in CLAUSE (A) on such
date, PLUS (c) all fees and other indebtedness of the Company to the Banks or
the Agent in connection with the Credit Documents on such date.
"OECD" shall mean the Organization for Economic Cooperation and
Development (or any successor).
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of the
Company by its Chief Executive Officer, President, Chief Financial Officer or
Treasurer.
"OIL AND GAS BUSINESS" shall mean (a) the acquisition, exploration,
development, operation and disposition of interests in oil, gas and other
Hydrocarbon Properties, (b) the gathering, marketing, treating, processing,
storage, selling and transporting of any production from such interests or
Properties, (c) any business relating to or arising from exploration for or
development, production, treatment, processing, storage, transportation or
marketing of oil, gas, Hydrocarbons and other minerals and products produced in
association therewith, and (d) any activity necessary, appropriate or incidental
to the activities described in the foregoing CLAUSES (A) THROUGH (C).
"ORGANIZATIONAL DOCUMENTS" shall mean, with respect to a corporation, the
certificate of incorporation or articles of incorporation and bylaws of such
corporation; with respect to a partnership or a limited partnership, the
partnership agreement establishing such partnership; with respect to a limited
liability company, the regulations or limited liability company agreement of
such company; with respect to a joint venture, the joint venture agreement
establishing such joint venture; and with respect to a trust, the instrument
establishing such trust; in each case including any and all
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modifications thereof as of the date of the Credit Document referring to such
Organizational Document.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED ENCUMBRANCES" shall mean:
(a) liens for taxes, assessments, levies or other governmental
charges not yet due and delinquent, and for taxes, assessments, levies or
other governmental charges already due, but the validity of which is being
contested by the Company in good faith by appropriate proceedings
diligently conducted for which reserves have been established in
accordance with GAAP;
(b) materialmen's, mechanics', repairmen's, employees', operators',
landlords' and other similar liens and charges incidental to the conduct
of the Company's business or the ownership of its Property which are not
incurred in connection with the borrowing of money or the obtaining of
advances or credit (other than advances or credit on open account,
includable in current liabilities, for goods and services in the ordinary
course of business and on terms and conditions which are customary in the
oil, gas and mineral exploration and development business) or the
Guaranteeing of the obligations of another Person, and which do not in the
aggregate materially detract from the value of the Property covered
thereby or materially impair the use thereof in the operation of the
Company's business;
(c) royalties, overriding royalties, net profits interests,
production sharing interests, production payment interests, carried
interests and other burdens on production of a scope and nature customary
in the conduct of the Company's business;
(d) defects, imperfections and irregularities in title;
(e) liens, security interests, charges, claims and encumbrances that
arise under operating agreements or pooling and unitization designations,
declarations, orders and agreements and other similar agreements of a
scope and nature customary in the oil and gas industry;
(f) the terms of concessions, production sharing agreements,
operating agreements, assignments, farmout agreements, Hydrocarbon sales,
purchase, exchange and processing agreements, area-of-mutual-interest
agreements, gas balancing and deferred production agreements, plant
agreements, pipeline gathering and transportation agreements, injection,
repressuring and recycling agreements, salt water or other disposal
agreements, seismic or geophysical permits and agreements, and other
contracts, division orders and agreements of a scope and nature customary
in the oil and gas industry;
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(g) the right of third parties under oil and gas leases to take
production in kind;
(h) all liens, charges, claims, encumbrances, contracts and other
matters consented to in writing from time to time by the Agent (with the
consent of the Required Banks);
(i) all rights to consent by, required notices to, and filings with
or other actions by governmental or tribal entities, if any, in connection
with the change of ownership or control of an interest in federal, state,
tribal or other foreign or domestic governmental oil and gas leases or
Properties, if the same are customarily obtained after such change of
ownership or control, but only insofar as such consents, notices, filings
and other actions are obtained within the time required under applicable
Legal Requirements;
(j) required third-party consents to assignments, to the extent they
could not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Change;
(k) liabilities for royalty suspense accounts, to the extent they
could not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Change; and
(l) easements, rights-of-way and the like, incidental to the conduct
of the Company's business or the ownership of its Property which are not
incurred in connection with the borrowing of money or the obtaining of
advances or credit (other than advances or credit on open account,
includable in current liabilities, for goods and services in the ordinary
course of business and on terms and conditions which are customary in the
oil, gas and mineral exploration and development business) or the
Guaranteeing of the obligations of another Person, and which do not in the
aggregate materially detract from the value of the Property covered
thereby or materially impair the use thereof in the operation of the
Company's business;
PROVIDED that all Permitted Encumbrances shall not in the aggregate have a
material adverse effect on the financial condition, business, operations or
Properties of the Company and its Restricted Subsidiaries taken as a whole and
impair in any material respect either (1) the ability of the Company or any
Subsidiary Guarantor to perform any of its obligations under the Credit
Documents or (2) the ability of the Agent and the Banks to enforce any of such
obligations or any of their rights and remedies under or in connection with the
Credit Documents.
"PERMITTED INVESTMENTS" shall mean any of the following:
(a) Investments in Cash Equivalents;
(b) Investments in the Company or any of its Restricted
Subsidiaries;
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(c) Investments by the Company or any of its Restricted Subsidiaries
in another Person, if as a result of such Investment (i) such other Person
becomes a Restricted Subsidiary or (ii) such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially
all of its Properties to, the Company or a Restricted Subsidiary;
(d) Investments and expenditures made in the ordinary course of, and
of a nature that is or shall have become customary in, the Oil and Gas
Business, including such Investments and expenditures in another Person,
in an Unrestricted Subsidiary or in a joint venture;
(e) entry into any hedging arrangements in the ordinary course of
business for the purpose of protecting the Company's or any Restricted
Subsidiary's production against fluctuations in oil or natural gas prices;
(f) entry into any currency exchange contract in the ordinary course
of business; and
(g) Investments in stock, obligations or securities received in
settlement of debts owing to the Company or a Restricted Subsidiary as a
result of bankruptcy or insolvency proceedings or upon the foreclosure,
perfection or enforcement of any Lien in favor of the Company or a
Restricted Subsidiary, in each case as to debt owing to the Company or a
Restricted Subsidiary that arose in the ordinary course of business of the
Company or any such Restricted Subsidiary.
"PERSON" shall mean any individual, Business Entity, voluntary
association, trust, unincorporated organization, Governmental Authority or other
form of entity. The term "Person" shall not, however, mean or include an
arrangement that is not a separate legal entity, such as the legal arrangement
between two or more parties owning interests in the same Property or unit.
"PLAN" shall mean an employee benefit plan which is covered by ERISA which
is either (a) maintained by the Company or any ERISA Affiliate for employees of
the Company or such ERISA Affiliate or (b) a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which (i) the Company, (ii) any ERISA Affiliate
or (iii) any trade or business which was previously under common control with
the Company within the meaning of Section 414 of the Code (but only with respect
to such period of common control with the Company), has an obligation to make
contributions (or with respect to (iii) above, had an obligation to make
contributions during any portion of time that the limitations period under
Section 4301(f) of ERISA with respect to such obligation has not expired).
"POST-DEFAULT RATE" shall mean a rate per annum on each day equal to the
lesser of (a) the sum of (i) 2% per annum PLUS (ii) the Alternate Base Rate as
in effect for that day or (b) the Highest Lawful Rate for that day.
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"PRICING SCHEDULE" shall mean the schedule of that name attached to this
Agreement. As used in the Pricing Schedule, "TOTAL DEBT" shall mean, on any day,
the Total Debt of the Company and the Restricted Subsidiaries at (a) for each
day during the Margin Period when the Margin Period is determined by CLAUSE (A)
of the definition of "Margin Period", May 1, 1999, and (b) for all subsequent
times, the end of the fiscal quarter of the Company then most recently ended,
and "EBITDAX" shall mean EBITDAX of the Company and the Restricted Subsidiaries
for the four fiscal quarters ending with the fiscal quarter of the Company then
most recently ended.
"PRIME RATE" shall mean, as of a particular date, the generally applicable
prime rate most recently determined by Chase Texas. Without notice to the
Company or any other Person, the Prime Rate shall change automatically from time
to time as and in the amount by which said prime rate shall fluctuate. The prime
rate is a reference rate and may not necessarily represent the lowest or best
rate actually charged to any customer. Chase Texas may make commercial loans or
other loans at rates of interest at, above or below the prime rate.
"PRINCIPAL OFFICE" shall mean the principal banking office of the Agent,
presently located at 712 Main Street, Houston, Texas 77002.
"PRODUCTION PAYMENTS" shall mean, collectively, Dollar-Denominated
Production Payments and Volumetric Production Payments.
"PROPER FORM" shall mean in form and substance satisfactory to the Agent
in its discretion.
"PROPERTY" shall mean, with respect to any Person, any interest of such
person in any kind of property or asset, whether real, personal or mixed,
tangible or intangible, including Capital Stock in any other Person.
"QUARTERLY DATES" shall mean the last day of each March, June, September
and December; PROVIDED that if any such date is not a Business Day, the relevant
Quarterly Date shall be the next succeeding Business Day.
"RATE DESIGNATION NOTICE" shall mean (a) in the case of a new Loan, the
Request for Extension of Credit with respect to such Loan and (b) in the case of
Conversions and Continuations, a notice in the form of EXHIBIT E, in each case
appropriately completed and executed by an authorized officer of the Company.
"REGULATION D" shall mean Regulation D of the Board as the same may be
amended or supplemented from time to time and any successor or other regulation
relating to reserve requirements.
"REGULATORY CHANGE" shall mean, with respect to any Bank, any change on or
after the date of this Agreement in any Legal Requirement (including Regulation
D) or the adoption or making
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on or after such date of any official interpretation, directive or request
applying to a class of banks including such Bank under any Legal Requirement
(whether or not having the force of law) by any Governmental Authority charged
with the interpretation or administration thereof.
"REQUEST FOR EXTENSION OF CREDIT" shall mean a request for extension of
credit duly executed by the Chief Executive Officer, President, Chief Financial
Officer or Treasurer of the Company, or such other officer of the Company as its
Chief Financial Officer may from time to time designate in a writing delivered
to the Agent, appropriately completed and substantially in the form of EXHIBIT
C.
"REQUIRED BANKS" shall mean, at any time that no Obligations are
outstanding, Banks having 51% or more of the total of all Commitments, and at
any time that Obligations are outstanding, Banks holding 51% or more of the
aggregate amount of such Obligations.
"RESTRICTED PAYMENT" shall mean (a) any declaration or payment of any
dividend on, or the making of any distribution on or in respect of, any Capital
Stock of the Company or any Restricted Subsidiary, except dividends or
distributions payable solely in such Capital Stock or in options, warrants or
other rights to purchase such Capital Stock; and (b) any purchase, redemption or
other acquisition for value by the Company or any Restricted Subsidiary of any
Capital Stock of the Company or any Restricted Subsidiary held by Persons other
than the Company or a Wholly-Owned Restricted Subsidiary.
"RESTRICTED SUBSIDIARY" shall mean, at any time, (a) each Subsidiary of
the Company which is at such time designated as a Restricted Subsidiary in
accordance with SECTION 9.17, and (b) any Subsidiary of the Company hereafter
created or acquired and, at or at any time after the time of creation or
acquisition, not designated by the Board of Directors of the Company as an
Unrestricted Subsidiary in accordance with SECTION 9.17.
"SALE AND LEASEBACK TRANSACTION" shall have the meaning ascribed to such
term in SECTION 9.14.
"SANTA FE" shall mean Santa Fe Energy Resources, Inc., a Delaware
corporation and a predecessor to the Company.
"SANTA FE INDENTURE" shall mean the Indenture between Santa Fe and The
First National Bank of Boston, as Trustee, dated as of May 25, 1994, providing
for issuance by Santa Fe of its 11% Senior Subordinated Notes Due 2004 in the
aggregate principal amount of up to $100,000,000 (the "SANTA FE SENIOR
SUBORDINATED NOTES"), as amended and supplemented.
"SANTA FE SENIOR SUBORDINATED NOTES" shall have the meaning ascribed to
such term in the definition of "Santa Fe Indenture".
"S&P" shall mean Standard & Poor's Ratings Group.
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"SNYDER" shall mean Snyder Oil Corporation, a Delaware corporation and a
predecessor to the Company.
"SNYDER INDENTURE" shall mean the Indenture between Snyder and Texas
Commerce Bank National Association (as Chase Texas was formerly known), as
Trustee, dated as of June 10, 1997, providing for issuance by Snyder of its
8-3/4% Senior Subordinated Notes Due 2007 in the aggregate principal amount of
up to $175,000,000 (the "SNYDER SENIOR SUBORDINATED NOTES") , as amended and
supplemented.
"SNYDER SENIOR SUBORDINATED NOTES" shall have the meaning ascribed to such
term in the definition of "Snyder Indenture".
"SOCO INTERNATIONAL" shall mean SOCO International, Inc., a Delaware
corporation.
"STATUTORY RESERVES" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the weighted average of the reserve percentages (including any
marginal, special, emergency, or supplemental reserves), expressed as a decimal,
actually required to be maintained by any Bank by the Board or any other
Governmental Authority to which any of the Banks is subject as required by
Regulation D during the applicable Interest Period for "eurocurrency
liabilities" (as such term is used in Regulation D) and any other reserves
actually required to be maintained by any Bank by reason of any Regulatory
Change against (a) any category of liabilities which includes deposits by
reference to which the Eurodollar Rate is to be determined as provided in the
definition of "Eurodollar Rate" or (b) any category of extensions of credit or
other assets which include Eurodollar Loans. Such reserve percentages shall
include, without limitation, those imposed under Regulation D. Statutory
Reserves shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage. Each determination of the Statutory Reserves
by the Agent shall be conclusive and binding, absent manifest error, and may be
made using any reasonable averaging and attribution method.
"SUBSIDIARY" shall mean, with respect to any Person at any time, any
Person of which 50% or more of the Capital Stock is at such time directly or
indirectly legally or beneficially owned or controlled by such Person or by one
or more of its Affiliates.
"SUBSIDIARY GUARANTEE" shall mean a Guarantee, in the form of EXHIBIT B,
having the blanks therein duly completed, duly executed and delivered by an
authorized officer of the Subsidiary Guarantor.
"SUBSIDIARY GUARANTOR" shall mean each of (a) Mexican Flats Services
Company, Inc., a Delaware corporation, (b) Snyder Fluid Technologies, Inc., a
Delaware corporation, (c) Snyder Gas Marketing, Inc., a Delaware corporation,
(d) SOCO Gas Systems, Inc., a Delaware corporation, (e) SOCO Louisiana Leasing,
Inc., a Delaware corporation, (f) Wyoming Gathering and Production
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Company, a Delaware corporation, and (g) each Restricted Subsidiary, if any, at
any time required by SECTION 9.13 to execute and deliver a Subsidiary Guarantee.
"TOTAL DEBT" shall mean, as of any date and for any Person, without
duplication, (a) all obligations for borrowed money; (b) all obligations
evidenced by bonds, debentures, notes or other similar instruments; (c) all
obligations to pay the deferred purchase price of Property or services, except
trade accounts payable arising in the ordinary course of business; (d) all
Capitalized Lease Obligations; (e) to the extent treated as debt under GAAP, all
obligations in respect of Dollar-Denominated Production Payments and other
similar financing arrangements; (f) all reimbursement obligations with respect
to letters of credit issued for the account of such Person, EXCLUDING 50% of the
amount of such obligations which (i) are in respect of letters of credit or
other similar instruments and (ii) do not support indebtedness of the types
described in CLAUSES (A), (B), (C), (D) OR (E) of this definition; (g) all
instruments and agreements relating to surety obligations to foreign
Governmental Authorities or state-owned Persons pursuant to which such Person
must pay (or reimburse another Person who pays) regardless of any available
defense on the underlying contract (but excluding such instruments and
agreements in connection with which such Person may avail itself of available
defenses on the underlying contract before having to pay); (h) Unfunded
Liabilities if such Unfunded Liabilities in the aggregate exceed (on an ABO
basis) $25,000,000; (i) Attributable Debt; (j) all obligations of the types
described in CLAUSES (A) THROUGH (I) of this definition (collectively, "ORDINARY
DEBT") of another Person secured by a Lien on any Property of the Person as to
which Total Debt is being determined, regardless of whether such Ordinary Debt
is assumed by such Person, and (j) all Ordinary Debt of another Person
Guaranteed by such Person; PROVIDED, HOWEVER, that Total Debt of the Combined
Group shall not include (x) any obligation of the Company owing to a
Wholly-Owned Restricted Subsidiary which is subordinated to the Obligations upon
the terms set forth on SCHEDULE IV, or (y) any obligation of a Restricted
Subsidiary owing to the Company or one or more other Restricted Subsidiaries.
"TRANSFER shall have the meaning ascribed to such term in the definition
of "Asset Sale".
"TYPE" shall have the meaning ascribed to such term in SECTION 1.3.
"UNFUNDED LIABILITIES" shall mean, with respect to any Plan, at any time,
the amount (if any) by which (a) the present value of all benefits under such
Plan exceeds (b) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such Plan
(in accordance with GAAP), but only to the extent that such excess represents a
potential liability of the Company or any ERISA Affiliate to the PBGC or a Plan
under Title IV of ERISA.
"UNRESTRICTED SUBSIDIARY" shall mean, at any time, each Subsidiary of the
Company which is at such time designated as an Unrestricted Subsidiary in
accordance with SECTION 9.17.
"VOLUMETRIC PRODUCTION PAYMENTS" shall mean production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
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"VOTING STOCK" shall mean 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).
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" shall mean any Restricted Subsidiary
(a) all of the Capital Stock or other ownership interests in which, other than
any directors' qualifying shares mandated by applicable law, is owned directly
or indirectly by the Company or (b) such Restricted Subsidiary is organized in a
foreign jurisdiction and is required by the applicable laws and regulations of
such foreign jurisdiction to be partially owned by the government of such
foreign jurisdiction or individual or corporate citizens of such foreign
jurisdiction in order for such Restricted Subsidiary to transact business in
such foreign jurisdiction; PROVIDED, in each case, that the Company, directly or
indirectly, owns the remaining Capital Stock or ownership interest in such
Restricted Subsidiary and, by contract or otherwise, controls the management and
business of such Restricted Subsidiary and derives the economic benefits of
ownership of such Restricted Subsidiary to substantially the same extent as if
such Restricted Subsidiary were a wholly owned Subsidiary.
1.2. ACCOUNTING TERMS AND DETERMINATIONS. Except where specifically
otherwise provided:
(a) The symbol "$" and the word "dollars" shall mean lawful money of the
United States of America.
(b) Any accounting term not otherwise defined shall have the meaning
ascribed to it under GAAP.
(c) Unless otherwise expressly provided, any accounting concept and all
financial covenants shall be determined on a consolidated basis, and financial
measurements shall be computed without duplication.
(d) Wherever the term "including" or any of its correlatives appears in
the Credit Documents, it shall be read as if it were written "including (by way
of example and without limiting the generality of the subject or concept
referred to)".
(e) Wherever the word "herein" or "hereof" is used in any Credit Document,
it is a reference to that entire Credit Document and not just to the subdivision
of it in which the word is used.
(f) References in any Credit Document to Section numbers are references to
the Sections of such Credit Document.
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(g) References in any Credit Document to Exhibits, Schedules, Annexes and
Appendices are to the Exhibits, Schedules, Annexes and Appendices to such Credit
Document, and they shall be deemed incorporated into such Credit Document by
reference.
(h) Except as otherwise provided herein, any term defined in the Credit
Documents which refers to a particular agreement, instrument or document shall
also mean, refer to and include all modifications, amendments, supplements,
restatements, renewals, extensions and substitutions of the same; PROVIDED that
nothing in this subsection shall be construed to authorize any such
modification, amendment, supplement, restatement, renewal, extension or
substitution except as may be permitted by other provisions of the Credit
Documents.
(i) All times of day used in the Credit Documents mean local time in
Houston, Texas.
(j) Defined terms may be used in the singular or plural, as the context
requires.
1.3. TYPES OF LOANS. Loans hereunder are distinguished by "Type". The
"Type" of a Loan refers to the determination whether such Loan is a Eurodollar
Loan or an Alternate Base Rate Loan.
Section 2. COMMITMENTS.
2.1. LOANS.
(a) Each Bank severally agrees, subject to the terms and conditions of
this Agreement, from time to time on or after the date hereof and prior to the
Maturity Date, to make Loans to the Company in an aggregate principal amount at
any one time outstanding up to but not exceeding such Bank's Commitment at such
time. Subject to the conditions precedent in this Agreement, any Loan repaid
prior to the Maturity Date may be reborrowed prior to the Maturity Date pursuant
to the terms of this Agreement. All outstanding principal of, accrued and unpaid
interest on, and accrued and unpaid fees with respect to, the Loans shall be due
and payable on May 3, 2000; PROVIDED, HOWEVER, that (PROVIDED that no Default
shall have occurred and be continuing) the Maturity Date may be extended for one
or more successive periods of 364 days each pursuant to SECTION 2.1(C); and
PROVIDED FURTHER, that the Company may elect, by written notice to the Agent
delivered no later than 30 days prior to the then-effective Maturity Date, to
repay the principal of all Loans outstanding as of such Maturity Date in one
installment, which shall be due and payable 364 days after such Maturity Date.
In the event the Company elects in accordance with this Agreement to repay the
Loans in one installment, the outstanding principal balance of such Loans shall
bear interest at a rate per annum equal to the Eurodollar Rate from time to time
in effect plus the Eurodollar Margin from time to time in effect pursuant to the
Pricing Schedule. Facility Fees shall continue to accrue and be payable during
the period of any such extension.
(b) Notwithstanding anything in this Agreement to the contrary, (i) no
Bank shall be required to have Loans at any one time outstanding in an amount
which shall exceed in the aggregate such Bank's Commitment, and (ii) if a Bank
fails to make a Loan as and when required hereunder
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and the Company subsequently makes a repayment on the Notes, such repayment
shall be split among the non-defaulting Banks ratably in accordance with their
respective Commitment Percentages (computed without regard to the Commitment
Percentage of the defaulting Bank) until each Bank has its Commitment Percentage
of all outstanding Loans. Any balance of such repayment shall be divided among
all Banks in accordance with their respective Commitment Percentages.
(c) The Company may request that Banks extend the Maturity Date for
additional successive 364-day periods. Should the Company desire that the Banks
so agree, it shall make such request in writing (an "EXTENSION REQUEST") not
earlier than 75 days and not later than 55 days before the then-current Maturity
Date and shall provide the Banks with all such information in connection with
such request that any Bank (through the Agent) may require.
(i) The Banks may, at their option, accept or reject such Extension
Request by giving written notice to the Agent delivered no earlier than 40
days prior to (but no later than 30 days prior to) the then-current
Maturity Date (the "RESPONSE DATE"). If any Bank shall fail to give such
notice to the Agent by the Response Date, such Bank shall be deemed to
have rejected the requested extension. If the Extension Request is not
consented to by Banks holding at least 51% of the Commitments by the
Response Date, the Extension Request will be rejected, and the Maturity
Date will not be extended. If the Banks holding at least 51% of the
Commitments consent to the Extension Request by the Response Date, the
Maturity Date for those Banks consenting to the extension (for purposes of
this SECTION 2.1(C), the "ACCEPTING BANKS") shall be automatically
extended to the date which is the 364th day after the then-current
Maturity Date.
(ii) If the Extension Request is consented to by Banks holding not
less than 51% of the Commitments, but fewer than all Banks (any Bank not
consenting to the Extension Request being referred to as a "REJECTING
Bank"), the Agent shall, within 48 hours of making such determination,
notify the Accepting Banks and the Company of the aggregate Commitments
held by the Rejecting Banks (the "REJECTED AMOUNT"). Each Accepting Bank
shall have the right, but not the obligation, to elect to increase its
respective Commitment by an amount not to exceed the Rejected Amount,
which election shall be made by notice from each Accepting Bank to the
Agent given not later than five days after the date notified by the Agent,
specifying the amount of such proposed increase in such Accepting Bank's
Commitment. If the aggregate amount of the proposed increases in the
Commitments of all Accepting Banks making such an election does not equal
or exceed the Rejected Amount, the Company shall have the right to add one
or more financial institutions (which are not Rejecting Banks and which
are Eligible Assignees) as Banks (each a "PURCHASING BANK") to replace
such Rejecting Banks, which Purchasing Banks shall have aggregate
Commitments not greater than those of the Rejecting Banks (less any
increases in the Commitments of Accepting Banks, as described in the
following CLAUSE (III)). The transfer of Commitments and outstanding
Borrowings from Rejecting Banks to Purchasing Banks or Accepting Banks
shall take place (on or prior to the then-current Maturity Date) on the
effective date of, and pursuant to the execution, delivery and acceptance
of, an Assignment and Acceptance in accordance with the procedures set
forth in SECTION 12.6.
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(iii) (A) If less than 100% of the Commitments are extended (whether
by virtue of the Company's failure to request an extension of the
Aggregate Commitment or by virtue of any Bank's not consenting to any
Extension Request), the Commitments shall automatically be reduced on the
Maturity Date by an amount equal to (as the case may be) (i) the portion
of the Commitments not requested to be extended by the Company in its
Extension Request or (ii) the amount of the Rejected Amount (to the extent
not replaced by Accepting Banks or Purchasing Banks pursuant to the
procedures set forth in SECTION 2.1(C)(II)). Notwithstanding the
foregoing, each Rejecting Bank's outstanding Loans (after giving effect to
the replacement of the Rejected Amount by Accepting Banks or Purchasing
Banks pursuant to SECTION 2.1(C)(II)) may, at the Company's option, be
repaid in a single installment due 364 days after the then-current
Maturity Date as provided in SECTION 2.1(A).
(B) If the aggregate amount of the proposed increases in the
Commitments of all Accepting Banks making an election to increase their
respective Commitments is in excess of the Rejected Amount,
(i) the Rejected Amount shall be allocated PRO RATA among such
Accepting Banks based on the respective amounts of the proposed
increases to Commitments elected by such Accepting Banks; and
(ii) the respective Commitments of each such Accepting Bank
shall be increased by the respective amount allocated pursuant to
CLAUSE (I) of this SECTION 2.1(C)(III)(B), such that, after giving
effect to the approved extensions and all such terminations and
increases, no reduction will occur in the aggregate amount of the
Commitments.
(C) If the aggregate amount of the proposed increases to the
Commitments of all Accepting Banks making such an election to so increase
their respective Commitments equals the Rejected Amount, the respective
Commitments of such Accepting Banks shall be increased by the respective
amounts of their proposed increases, such that, after giving effect to the
approved extensions and all such terminations and increases, no reduction
will occur in the aggregate amount of the Commitments.
(d) Should such Maturity Date be extended, this Agreement shall apply
during any extension period, and from and after the date of such extension the
term "Maturity Date" as used in this Agreement shall mean the Maturity Date as
so extended (or as sooner determined in accordance with this Agreement).
2.2. TERMINATIONS, REDUCTIONS AND CHANGES OF COMMITMENTS.
(a) On the Maturity Date, all Commitments shall terminate in their
entirety.
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(b) The Company shall have the right to terminate or reduce the unused
portion of the Aggregate Commitment at any time or from time to time; PROVIDED
that (i) the Company shall give notice of each such termination or reduction to
the Agent as provided in SECTION 5.5; (ii) each such partial reduction shall be
in the amount of $20,000,000 or an integral multiple of $1,000,000 above
$20,000,000, and (iii) the Company may not cause the Aggregate Commitment to be
less than the aggregate principal amount of the Loans then outstanding.
(c) No reduction in or termination of any Commitment pursuant to SECTION
2.2(B) may be reinstated without the written approval of the Agent and all
Banks.
2.3. FEES. In consideration of the Commitments, the Company shall pay to
the Agent for the account of each Bank, PRO RATA in accordance with its
Commitment Percentage, fees (the "FACILITY FEES") (a) for each Margin Period
from the date of this Agreement to and including the date such Bank's Commitment
is terminated at a rate per annum for such Margin Period determined in
accordance with the Pricing Schedule, and (b) if no Margin Period is in effect,
the highest rate set forth for Facility Fees in the Pricing Schedule. The
Facility Fees shall be computed for each day and shall be based on such Bank's
Commitment for such day. Accrued and unpaid Facility Fees shall be due in
arrears on the date of the initial Loans, within three days after demand
therefor on or about the Quarterly Dates, and within three days after demand
therefor on or about the Maturity Date. Upon receipt, the Agent shall disburse
the Facility Fees to the Banks in accordance with their respective Commitment
Percentages. All past due Facility Fees shall bear interest at the Post-Default
Rate.
2.4. AFFILIATES; LENDING OFFICES.
(a) Any Bank may, if it so elects, fulfill its Commitment as to any
Eurodollar Loan by causing a branch, foreign or otherwise, or Affiliate of such
Bank to make such Loan and may transfer and carry such Loan at, to or for the
account of any branch office or Affiliate of such Bank; PROVIDED that in such
event, for the purposes of this Agreement, such Loan shall be deemed to have
been made by such Bank and the obligation of the Company to repay such Loan
shall nevertheless be to such Bank and shall be deemed to be held by such Bank,
to the extent of such Loan, for the account of such branch or Affiliate.
(b) Notwithstanding any provision of this Agreement to the contrary, each
Bank shall be entitled to fund and maintain its funding of all or any part of
its Loans in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations shall be made as if such Bank had
actually funded and maintained each Eurodollar Loan during each Interest Period
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the applicable Eurodollar
Rate for such Interest Period.
2.5. SEVERAL OBLIGATIONS. The failure of any Bank to make any Loan to be
made by it on the date specified therefor shall not relieve any other Bank of
its obligation to make its Loan on such
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date, but neither the Agent nor any Bank shall be responsible for the failure of
any other Bank to make a Loan to be made by such other Bank.
2.6. NOTES. The Loans made by each Bank shall be evidenced by a single
promissory note of the Company substantially in the form of EXHIBIT A
(collectively, together with all renewals, extensions, modifications and
replacements thereof and substitutions therefor, the "NOTES" and individually a
"NOTE") payable to the order of such Bank in a principal amount equal to the
Commitment of such Bank as originally in effect and otherwise duly completed.
Each Bank is hereby authorized by the Company to endorse on the schedule (or a
continuation thereof) attached to the Note of such Bank, to the extent
applicable, the date, amount and Type of each Loan made by such Bank to the
Company hereunder, and each Continuation thereof, each Conversion of all or a
portion thereof to another Type, the date and amount of each payment or
prepayment of principal thereof received by such Bank and, in the case of
Eurodollar Loans, the length of each Interest Period; PROVIDED that any failure
by such Bank to make any such endorsement shall not affect the obligations of
the Company under any Note or this Agreement in respect of such Loan.
2.7. USE OF PROCEEDS. The proceeds of the Loans shall be used for working
capital and for general corporate purposes of the Company and may not be
utilized (a) to pay dividends other than usual dividends in the ordinary course
of business or (b) for the buyout or acquisition of any Person unless the board
of directors of such Person has first approved such buyout or acquisition. None
of the proceeds of the Loans will be used for the purpose of, and neither the
Company nor any Subsidiary of the Company is engaged in the business of
extending credit for the purpose of, (a) purchasing or carrying any "margin
stock" as defined in Regulation U of the Board (12 C.F.R. Part 221) or (b)
reducing or retiring any indebtedness which was originally incurred to purchase
or carry margin stock, if such purpose under either (a) or (b) above would
constitute this transaction a "purpose credit" within the meaning of said
Regulation U, or for any other purpose which would constitute this transaction a
"purpose credit". The Company represents and warrants that neither the Company
nor any Subsidiary of the Company is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stocks. Neither the Company nor any Subsidiary of
the Company nor any Person acting on behalf of the Company or any Subsidiary of
the Company has taken or will take any action which might cause any of the
Credit Documents, including this Agreement, to violate Regulation U or any other
regulation of the Board, or to violate any similar provision of the Securities
Exchange Act of 1934, as amended, or any rule or regulation under any such
provision thereof.
2.8. INCREASE OF COMMITMENTS. PROVIDED that no Default or Event of Default
shall have occurred and be continuing, the Company shall have the right, without
the consent of the Banks but subject to the consent of the Agent (which consent
shall not be unreasonably withheld), to effectuate from time to time an increase
in the Aggregate Commitment by adding to this Agreement one or more commercial
banks or other financial institutions (who shall meet all criteria for Eligible
Assignees and who shall, upon completion of the requirements stated in this
SECTION 2.8 constitute Banks hereunder), or by allowing one or more Banks to
increase its Commitment hereunder, so that such added and increased Commitments
shall equal the increase in Aggregate Commitment
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effectuated pursuant to this SECTION 2.8; PROVIDED that (a) no increase in
Commitments pursuant to this SECTION 2.8 shall result in the Aggregate
Commitment exceeding $250,000,000 (reduced by the amount, if any, by which the
"Commitments" (as defined therein) under the Credit Agreement of even date
herewith by and among the Company, the Banks and the Agent, as amended from time
to time, have been or are concurrently being increased), (b) no Bank's
Commitment shall be increased without the consent of such Bank, and (c) on the
effective date of any such increase in Aggregate Commitment, there are no
outstanding Eurodollar Loans. The Company shall give the Agent three Business
Days' notice of the Company's intention to increase the Aggregate Commitment
pursuant to this SECTION 2.8. Such notice shall specify each new commercial bank
or other financial institution, if any, the changes in amounts of Commitments
that will result, and such other information as is reasonably requested by the
Agent. Each new commercial bank or other financial institution, and each Bank
agreeing to increase its Commitment, shall execute and deliver to the Agent a
document satisfactory to the Agent pursuant to which it becomes a party hereto
or increases such Commitment, as the case may be, which document, in the case of
a new commercial bank or other financial institution, shall (among other
matters) specify the domestic lending office and Eurodollar lending office of
such new commercial bank or other financial institution. In addition, the
Company shall execute and deliver a Note in the principal amount of the
Commitment of each new commercial bank or other financial institution, or,
against delivery to it of such Bank's existing Note, a replacement Note in the
principal amount of the increased Commitment of each Bank agreeing to increase
its Commitment, as the case may be. Such Notes and other documents of the nature
referred to in this SECTION 2.8 shall be furnished to the Agent in form and
substance as may be reasonably required by it. Upon the execution and delivery
of such documents, such new commercial bank or financial institution shall
constitute a "Bank" under this Agreement with a Commitment as specified therein,
or such Bank's Commitment shall increase as specified therein, as the case may
be.
2.9 CHAPTER 346 DOES NOT APPLY. The Company and the Banks expressly agree,
pursuant to Chapter 346 ("CHAPTER 346") of the Texas Finance Code, that Chapter
346 (which relates to open-end line of credit revolving loan accounts) shall not
apply to any extension of credit under this Agreement and that neither this
Agreement nor any such extension of credit shall be governed by Chapter 346 or
subject to its provisions.
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Section 3. BORROWINGS AND PREPAYMENTS.
3.1. BORROWINGS. The Company shall give the Agent notice of each borrowing
to be made under this Agreement as provided in SECTION 5.5. Each borrowing of
Alternate Base Rate Loans shall be in an amount of $1,000,000 or an integral
multiple of $1,000,000 in excess thereof. Each borrowing of Eurodollar Loans
shall be in an amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof. Not later than 2:00 p.m. on the date specified for each such
borrowing, each Bank shall make available the amount of the Loan, if any, to be
made by it on such date to the Agent, at its Principal Office, in immediately
available funds, for the account of the Company. The amounts so received by the
Agent shall, subject to the terms and conditions of this Agreement, be made
available to the Company by depositing the same, in immediately available funds,
in an account designated by the Company and maintained with the Agent at its
Principal Office.
3.2. PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. Except as provided in this SECTION 3.2 or in
SECTION 5 or 6, the Company shall have the right to prepay, on any Business Day,
in whole or in part, without the payment of any penalty or fee, Loans at any
time or from time to time; PROVIDED that the Company shall give the Agent notice
of each such prepayment as provided in SECTION 5.5. Eurodollar Loans may be
prepaid on the last day of an Interest Period applicable thereto and may not be
otherwise prepaid unless prepayment is accompanied by payment of all
compensation required by SECTION 6.5.
(b) MANDATORY PREPAYMENTS. The Company shall from time to time on demand
by the Agent prepay the Loans in such amounts as shall be necessary so that at
all times the aggregate outstanding principal amount of Loans shall not exceed
the Aggregate Commitment. Any such payment shall be allocated between Loans as
the Company may elect.
Section 4. PAYMENTS OF PRINCIPAL AND INTEREST.
4.1. REPAYMENT OF LOANS. The Company will pay to the Agent for the account
of each Bank PRO RATA according to their respective Commitment Percentages the
unpaid principal of each Loan made by such Bank on the Maturity Date.
4.2. INTEREST. Subject to SECTIONS 12.8 AND 4.3(B), the Company will pay
to the Agent for the account of each Bank interest on the unpaid principal
amount of each Loan made by such Bank for the period commencing on the date of
such Loan to but excluding the date such Loan shall be paid in full, at the
lesser of (a) the following rates per annum:
(1) if such Loan is an Alternate Base Rate Loan, the Alternate
Base Rate PLUS the Applicable Margin for Alternate Base Rate Loans; or
(2) if such Loan is a Eurodollar Loan, the applicable Eurodollar
Rate PLUS the Applicable Margin for Eurodollar Loans;
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or (b) the Highest Lawful Rate.
4.3. SELECTION OF INTEREST RATES.
(a) Subject to SECTION 6 and SECTION 12.8, the Company shall have the
right, by giving a Rate Designation Notice to the Agent as provided in SECTION
5.5, to designate any Loan as a Loan of a particular Type, to convert (a
"CONVERSION") any Loan (in whole or in part) into a Loan of another Type or to
continue (a "CONTINUATION") any Loan (in whole or in part) as a Loan of the same
Type. The records of the Agent with respect to interest rate designations,
Interest Periods and the amount of Loans to which they are applicable shall be
binding and conclusive, absent manifest error. Loans shall be Alternate Base
Rate Loans except where the Company has complied with all requirements of this
Agreement for the designation, Conversion or Continuation of such Loan as a
Eurodollar Loan. Interest on the amount of each Loan shall accrue on the amount
of that Loan and from the date it is made. Any such notice of designation,
Conversion or Continuation shall specify the Loan and the new Interest Period.
In the event the Company fails to so give such notice prior to the end of any
Interest Period for any Eurodollar Loan, such Loan shall become an Alternate
Base Rate Loan on the last day of such Interest Period. No more than 10
Eurodollar Interest Periods shall be in effect at any time. Except as otherwise
provided in this Agreement, each such designation, Conversion or Continuation
shall apply to all Notes ratably in accordance with their respective principal
balances. If any Bank assigns an interest in its Note when any Eurodollar Loan
is outstanding with respect thereto, the assignee shall have its ratable
interest in such Eurodollar Loan.
(b) Notwithstanding the foregoing but subject to SECTION 12.8, the Company
will pay to the Agent for the account of each Bank interest (i) except as
otherwise provided in CLAUSE (II) of this SECTION 4.3(B), at a rate per annum 2%
above the otherwise applicable rate on any principal of any Loan made by such
Bank, for the period commencing on the first day on which any Event of Default
exists and continuing through and including the date no Event of Default exists
and is continuing; and (ii) at the Post-Default Rate for any other amount due
under the Credit Documents which is not paid in full when due (whether at stated
maturity, by acceleration, or otherwise) (but, if such amount is interest, only
to the extent legally enforceable).
(c) Accrued and unpaid interest shall be due and payable on the applicable
Interest Payment Dates, except that (1) accrued and unpaid interest pursuant to
SECTION 4.3(B) shall be due and payable from time to time on demand of the Agent
or the Required Banks (through the Agent), (2) accrued and unpaid interest on
any amount converted from one Type of Loan to another Type of Loan shall be paid
on the amount so converted at the time of such Conversion, and (3) accrued and
unpaid interest on the amount of any Eurodollar Loan paid or prepaid shall be
due at the time of such payment or prepayment.
Section 5. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS, ETC.
5.1. PAYMENTS.
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(a) Except to the extent otherwise provided in this Agreement, all
payments of principal of or interest on the Loans and of other amounts to be
made by the Company under the Credit Documents shall be made in dollars, in
immediately available funds, to the Agent at its Principal Office (or in the
case of a successor Agent, at the principal office of such successor Agent in
the United States), not later than 12:00 noon on the date on which such payment
shall become due, and each such payment made after such time on such due date
shall be deemed to have been made on the next succeeding Business Day. The Agent
or any Bank for whose account any such payment is made may (but shall not be
obligated to) debit the amount of any such payment which is not made by such
time to any ordinary deposit account of the Company with the Agent or such Bank,
as the case may be.
(b) The Company shall, at the time it makes each payment under this
Agreement or any other Credit Document, specify to the Agent the Loans or other
amounts payable by the Company to which such payment is to be applied (and in
the event that it fails so to specify, such payment shall be applied as the
Agent may in its sole and absolute discretion designate to the Loans or other
amounts then due and payable); PROVIDED that if no Loans or other amounts are
then due and payable or an Event of Default has occurred and is continuing, the
Agent may apply any payment to the Obligations in such order as it may elect in
its sole and absolute discretion, but subject to the other terms and conditions
of this Agreement, including SECTION 5.2. Each payment received by the Agent
under this Agreement or any other Credit Document for the account of a Bank
shall be paid promptly to such Bank in immediately available funds for the
account of such Bank's Applicable Lending Office.
(c) If the due date of any payment under this Agreement or any other
Credit Document falls on a day which is not a Business Day, the due date for
such payment (except as otherwise provided in the definition of "Interest
Period") shall be extended to the next succeeding Business Day and interest
shall be payable for any principal so extended for the period of such extension
at the rate in effect on such due date.
5.2. PRO RATA TREATMENT. Except to the extent otherwise provided herein,
(a) each borrowing from the Banks, each payment of Facility Fees and other fees
and each termination or reduction of the Commitments under SECTION 2.2 shall be
made PRO RATA according to the Banks' respective Commitment Percentages, and (b)
except as otherwise provided in this Agreement, each payment by the Company of
principal of or interest on Loans of a particular Type shall be made to the
Agent for the account of the Banks PRO RATA according to the Banks' respective
Commitment Percentages.
5.3. COMPUTATIONS. Subject to SECTION 12.8, interest based on the
Alternate Base Rate (to the extent determined by reference to the Prime Rate)
will be computed on the basis of 365 (or 366) days and actual days elapsed
(including the first day but excluding the last day) occurring in the period for
which payable. All other interest and fees shall be computed on the basis of a
year of 360 days and actual days elapsed (including the first day but excluding
the last day) occurring in the period for which payable, unless the effect of so
computing shall be to cause the rate of interest to
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exceed the Highest Lawful Rate (in which event interest and fees shall be
calculated on the basis of the actual number of days elapsed in a year composed
of 365 or 366 days, as the case may be).
5.4. MINIMUM AND MAXIMUM AMOUNTS. Except for prepayments made pursuant to
SECTION 3.2(B), each borrowing and repayment of principal of Loans, each
optional partial prepayment and each designation, Continuation or Conversion of
Type shall be in an aggregate principal amount equal to $1,000,000 or an
integral multiple of $1,000,000 in excess thereof (borrowings or prepayments of
Loans of different Types or, in the case of Eurodollar Loans, having different
Interest Periods at the same time hereunder, to be deemed separate borrowings
and prepayments for purposes of the foregoing, one for each Type or Interest
Period), and each termination or reduction of the Aggregate Commitment shall be
in an aggregate principal amount equal to $20,000,000 or an integral multiple of
$1,000,000 in excess thereof. Upon any prepayment that would reduce Eurodollar
Loans having the same Interest Period to less than $1,000,000, such Eurodollar
Loans shall automatically be converted into Alternate Base Rate Loans.
5.5. CERTAIN ACTIONS, NOTICES, ETC. Notices to the Agent of any
termination or reduction of the Aggregate Commitment, of prepayments of Loans
and of the duration of Interest Periods, each Request for Extension of Credit
and each Rate Designation Notice shall be irrevocable and shall be effective
only if received by the Agent not later than 12:00 noon (1:00 p.m. in the case
of a Request for Extension of Credit or Rate Designation Notice related to a
Eurodollar Loan) on the day that is the applicable number of Business Days prior
to the date of the relevant termination, reduction, issuance, borrowing and/or
prepayment specified below:
NUMBER OF BUSINESS
DAYS PRIOR
NOTICE
------------------
Termination or reduction
of Aggregate Commitment 3
Borrowing or prepayment
of or Conversion into
Alternate Base Rate Loans same day
Borrowing or prepayment
of or Conversion into or
Continuation of Eurodollar
Loans 3
Each such notice of reduction shall specify the amount to which the Aggregate
Commitment is to be reduced and the resulting Commitment of each Bank. Each such
notice of prepayment or Request for Extension of Credit shall specify the amount
and Type of such Loans to be borrowed or prepaid (subject to SECTIONS 3.2 and
5.4), the date of borrowing or prepayment (which shall be a Business
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Day) and, in the case of Eurodollar Loans, the duration of the Interest Period
therefor (subject to the definition of "Interest Period"). Each Rate Designation
Notice with respect to a Conversion of a Loan (or portion thereof) shall specify
the amount and Type of the Loan (or portion thereof) being converted, the amount
and Type of Loan into which such Loan is being converted (subject to SECTION
5.4), the date for Conversion (which shall be a Business Day) and, unless such
Loan is being converted into an Alternate Base Rate Loan, the duration (subject
to the definition of "Interest Period") of the Interest Period therefor which is
to commence as of the last day of the then current Interest Period therefor (or
the date of Conversion, if such Loan is being converted from an Alternate Base
Rate Loan). Each Rate Designation Notice with respect to a Continuation of a
Loan (or portion thereof) as the same Type of Loan shall specify the amount and
Type of such Loan (or portion thereof) being continued (subject to SECTION 5.4)
and the duration (subject to the definition of "Interest Period") of the
Interest Period therefor which is to commence as of the last day of the then
current Interest Period therefor. The Agent shall promptly notify the Banks of
the contents of each such notice, Request for Extension of Credit, or Rate
Designation Notice. Notice of any prepayment having been given, the principal
amount specified in such notice, together with interest thereon to the date of
prepayment, shall be due and payable on such prepayment date.
5.6. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent shall have been
notified by a Bank prior to 2 p.m. on the date on which such Bank is to make
payment to the Agent of the proceeds of a Loan to be made by it hereunder or by
the Company prior to the date on which the Company is to make a payment to the
Agent for the account of the Agent or one or more of the Banks, as the case may
be (such Bank or the Company being herein called the "PAYOR" and such payment
being herein called the "REQUIRED PAYMENT"), which notice shall be effective
upon receipt, that the Payor does not intend to make the Required Payment to the
Agent, the Agent may assume that the Required Payment has been made and may, in
reliance upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient on the date that such Required
Payment is to be made. If the Payor is the Company and the Company has not in
fact made the Required Payment to the Agent on or before such date, the Banks,
ratably in proportion to their respective Commitment Percentages, shall, on
demand, repay to the Agent the amount made available by the Agent, together with
interest thereon from the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to the
Fed Funds Rate for the first three days after demand and thereafter at the Fed
Funds Rate plus 2%. (If the Payor is the Company, the provisions of SECTION
2.1(A) AND SECTION 4.3(B) shall also apply.) If the Payor is a Bank and such
Bank has not in fact made the Required Payment to the Agent on or before such
date, such Bank shall, on demand, pay to the Agent the amount made available by
the Agent on behalf of such Bank, together with interest thereon from the date
such amount was so made available by the Agent until the date the Agent recovers
such amount at a rate per annum equal to the Fed Funds Rate for each of the
first three days after demand and for each day thereafter at the Fed Funds Rate
plus 2%.
5.7. SHARING OF PAYMENTS, ETC. If a Bank or any participant of a Bank
shall obtain payment of any principal of or interest on any Loan made by it
under this Agreement or of any other obligation to it under this Agreement,
through the exercise of any right of set-off, banker's lien,
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counterclaim or similar right, or otherwise, such Bank or participant shall
promptly purchase from the other Banks participations in the Loans made or other
obligations held by the other Banks in such amounts, and make such other
adjustments from time to time as shall be equitable to the end that all the
Banks and participants shall share the benefit of such payment (net of any
expenses which may be incurred by such Bank or its participant in obtaining or
preserving such benefit) PRO RATA in accordance with the respective amounts then
due to each of them. To such end all the Banks and their participants 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, to the fullest extent it may effectively do so under applicable
law, that any Person so purchasing a participation in the Obligations may
exercise all rights of set-off, bankers' lien, counterclaim or similar rights
with respect to such participation as fully as if such Bank were a direct holder
of Loans or other Obligations in the amount of such participation. Nothing in
this Agreement shall require any Bank to exercise any such right or shall affect
the right of any Bank to exercise, and retain the benefits of exercising, any
such right with respect to any other indebtedness or obligation of the Company.
Section 6. YIELD PROTECTION AND ILLEGALITY.
6.1. ADDITIONAL COSTS.
(a) Subject to SECTION 12.8, the Company shall pay to the Agent, on
demand, for the account of such Bank, from time to time such amounts as any Bank
may reasonably determine to be necessary to compensate it for any costs incurred
by such Bank which such Bank reasonably determines are attributable to its
making or maintaining any Eurodollar Loan hereunder or its obligation to make or
maintain any such Loan hereunder, or any reduction in any amount receivable by
such Bank 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"), in each case resulting from any Regulatory Change which:
(1) subjects such Bank (or makes it apparent that such Bank is
subject) to any tax (including any United States interest equalization tax),
levy, impost, duty, charge or fee (collectively, "TAXES"), or any deduction or
withholding for any Taxes on or from the payment due under any Eurodollar Loan
or other amounts due hereunder, other than income and franchise taxes of the
jurisdiction (or any subdivision thereof) in which such Bank has an office or
its Applicable Lending Office; or
(2) changes the basis of taxation of any amounts payable to such
Bank under this Agreement or its Note in respect of any of such Loans, other
than changes which affect taxes measured by or imposed on the overall net income
or franchise taxes of such Bank or of its Applicable Lending Office for any of
such Loans by the jurisdiction (or any subdivision thereof) in which such Bank
has an office or such Applicable Lending Office; or
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(3) imposes or modifies or increases or deems applicable any
Statutory Reserves or any other reserve, special deposit or similar requirement
(including any such requirement imposed by the Board) relating to any extensions
of credit or other assets of, or any deposits with or other liabilities of, such
Bank or loans made by such Bank, or against any other funds, obligations or
other Property owned or held by such Bank; or
(4) imposes any other condition affecting this Agreement (or any of
such extensions of credit or liabilities).
Each Bank will notify the Company through the Agent of any event occurring after
the date of this Agreement which will entitle such Bank to compensation pursuant
to this SECTION 6.1 as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation, and (if so requested by the
Company through the Agent) will designate a different available Applicable
Lending Office for the Eurodollar Loans of such Bank or take such other action
as the Company may reasonably request if such designation or action is
consistent with the internal policy of such Bank and legal and regulatory
restrictions, can be undertaken at no additional cost, will avoid the need for,
or reduce the amount of, such compensation and will not, in the sole opinion of
such Bank, be disadvantageous to such Bank (PROVIDED that such Bank shall have
no obligation so to designate an Applicable Lending Office located in the United
States of America). Each Bank will furnish the Company with a statement setting
forth the basis and amount of each request by such Bank for compensation under
this SECTION 6.1, with each such statement to cover amounts accruing under this
SECTION 6.1 with respect to a period beginning not earlier than 120 days from
the date thereof and using any reasonable averaging and attribution method.
(b) Without limiting the effect of the foregoing provisions of this
SECTION 6.1, in the event that, by reason of any Regulatory Change, any Bank
either (1) 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 Bank 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 Bank which includes Eurodollar
Loans or (2) becomes subject to restrictions on the amount of such a category of
liabilities or assets which it may hold, then, if such Bank so elects by notice
to the Company (with a copy to the Agent), the obligation of such Bank to make
Eurodollar Loans hereunder shall be suspended until the date such Regulatory
Change ceases to be in effect (in which case the provisions of SECTION 6.4 shall
be applicable).
(c) Determinations and allocations by any Bank for purposes of this
SECTION 6.1 of the effect of any Regulatory Change on its costs of maintaining
its obligations to make Loans or of making or maintaining Eurodollar Loans or on
amounts receivable by it in respect of Eurodollar Loans, and of the additional
amounts required to compensate such Bank in respect of any Additional Costs,
shall be conclusive, absent manifest error, and may be made using any reasonable
averaging and attribution method.
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(d) In the event any Bank shall seek compensation pursuant to this SECTION
6.1, the Company may give notice to such Bank (with copies to the Agent) that it
wishes to seek one or more Eligible Assignees (which may be one or more of the
Banks) to purchase and assume the Commitment, Loans, Note and interests in this
Agreement of such Bank. Each Bank requesting compensation pursuant to this
SECTION 6.1 agrees to sell its Commitment, Loans, Note, and interests in this
Agreement pursuant to SECTION 12.6 (without recourse, representation or warranty
except as provided in SECTION 12.6) to any such Eligible Assignee for an amount
equal to (x) the sum of the outstanding unpaid principal of and accrued and
unpaid interest on such Loans and Note, plus (y) all other fees and amounts
(including any compensation claimed by such Bank under this SECTION 6.1 and
including a breakage charge as if such Bank had been prepaid the amount of all
of its outstanding Eurodollar Loans) owing to such Bank under the Credit
Documents, calculated, in each case, to the date on which such Commitment,
Loans, Note and interests are purchased, whereupon such Bank shall have no
further Commitment or other obligation to the Company under this Agreement or
any other Credit Document in respect of matters arising after the consummation
of such purchase, but shall continue to be entitled to the benefit of, and
subject to any obligations incurred by it under, this Agreement and the other
Credit Documents in respect of matters occurring during the time it was a Bank
under this Agreement.
6.2. LIMITATION ON TYPES OF LOANS. Anything in this Agreement to the
contrary notwithstanding, if, with respect to any Eurodollar Loans:
(a) the Agent determines (which determination shall be conclusive absent
manifest error) that quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Rate" in SECTION 1.1 are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining the rate of interest for such Loans for Interest Periods therefor as
provided in this Agreement; or
(b) the Required Banks determine (which determination shall be conclusive
absent manifest error) and notify the Agent that the relevant rates of interest
referred to in the definition of "Eurodollar Rate" in SECTION 1.1 upon the basis
of which the rates of interest for such Loans are to be determined do not
accurately reflect the cost to such Banks of making or maintaining such Loans
for any proposed Interest Periods therefor; or
(c) the Agent determines (which determination shall be conclusive absent
manifest error) that by reason of circumstances affecting the Eurodollar
interbank market generally, deposits in dollars in the relevant Eurodollar
interbank market are not being offered for the applicable Interest Period and in
an amount equal to the amount of the Eurodollar Loan requested by the Company;
the Agent shall promptly notify the Company and each Bank thereof, and, so long
as such condition remains in effect, the Banks shall be under no obligation to
make Eurodollar Loans (but shall maintain until the end of the Interest Period
then in effect the Eurodollar Loans then outstanding).
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6.3. ILLEGALITY. Notwithstanding any other provision of this Agreement to
the contrary, if by reason of (x) the adoption or effectiveness of any
applicable Legal Requirement, or any change in any applicable Legal Requirement
or in the interpretation or administration thereof by any Governmental
Authority, or compliance by any Bank with any request or directive (whether or
not having the force of law) of any central bank or other Governmental Authority
or (y) circumstances affecting the relevant Eurodollar interbank market or the
position of a Bank therein, it shall at any time be unlawful or impracticable in
the sole discretion of a Bank for such Bank or its Applicable Lending Office to
(a) honor its obligation to permit the establishment of Eurodollar Loans
hereunder or (b) maintain Eurodollar Loans hereunder, then such Bank through the
Agent shall promptly notify the Company thereof, and the obligation of such Bank
to establish or maintain Eurodollar Loans hereunder shall be suspended until
such time as such Bank may again establish and maintain Eurodollar Loans, in
which case the provisions of SECTION 6.4 shall be applicable. Before giving such
notice pursuant to this SECTION 6.3, such Bank will designate a different
available Applicable Lending Office for the Eurodollar Loans of such Bank or
take such other action as the Company may reasonably request if such designation
or action is consistent with the internal policy of such Bank and legal and
regulatory restrictions, can be undertaken at no additional cost, will avoid the
need to suspend such Bank's obligation to make Eurodollar Loans hereunder and
will not, in the sole opinion of such Bank, be disadvantageous to such Bank
(PROVIDED that such Bank shall have no obligation so to designate an Applicable
Lending Office located in the United States of America).
In the event any Bank shall seek to invoke the benefits of this SECTION
6.3, the Company may give notice to such Bank (with copies to the Agent) that it
wishes to seek one or more Eligible Assignees (which may be one or more of the
Banks) to purchase and assume the Commitment, Loans, Note and interests in this
Agreement of such Bank. Each Bank requesting to invoke the benefits of this
SECTION 6.3 agrees to sell its Commitment, Loans, Note and interests in this
Agreement pursuant to SECTION 12.6 (without recourse, representation or warranty
except as provided in SECTION 12.6) to any such Eligible Assignee for an amount
equal to (x) the sum of the outstanding unpaid principal of and accrued and
unpaid interest on such Loans and Note, plus (y) all other fees and amounts
(including a breakage charge as if such Bank had been prepaid the amount of all
of its outstanding Eurodollar Loans) owing to such Bank under the Credit
Documents, calculated, in each case, to the date on which such Commitment,
Loans, Note and interests are purchased, whereupon such Bank shall have no
further Commitment or other obligation to the Company hereunder or any other
Credit Document in respect of matters arising after the consummation of the
purchase, but shall continue to be entitled to the benefit of, and subject to
any obligation incurred by it under, this Agreement and the other Credit
Documents in respect of matters occurring during the time it was a Bank under
this Agreement.
6.4. SUBSTITUTE ALTERNATE BASE RATE LOANS. If the obligation of any Bank
to make or maintain Eurodollar Loans shall be suspended pursuant to SECTION 6.1,
6.2 or 6.3, all Loans which would otherwise be made by such Bank as Eurodollar
Loans shall be made instead as Alternate Base Rate Loans (and, if an event
referred to in SECTION 6.1(B) or 6.3 has occurred and such Bank so requests by
notice to the Company with a copy to the Agent, each Eurodollar Loan of such
Bank then outstanding shall be automatically converted into an Alternate Base
Rate Loan on the date
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specified by such Bank in such notice which shall be the last day of the current
Interest Period with respect to such Eurodollar Loan or on such earlier date as
required by law) and, to the extent that such Eurodollar Loans are so made as
(or converted into) Alternate Base Rate Loans, all payments of principal which
would otherwise be applied to such Eurodollar Loans shall be applied instead to
such Alternate Base Rate Loans.
6.5. COMPENSATION. Subject to SECTION 12.8, the Company shall pay to the
Agent for the account of each Bank, within two Business Days after demand
therefor by such Bank through the Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Bank) to compensate it for any
loss, cost or expense incurred by it as a result of:
(a) any payment, prepayment or Conversion of a Eurodollar Loan made by
such Bank on a date other than the last day of an Interest Period for such Loan;
or
(b) any failure by the Company to borrow a Eurodollar Loan to be made by
such Bank on the date for such borrowing specified in the relevant notice of
borrowing under SECTION 5.5 or to convert an Alternate Base Rate Loan into a
Eurodollar Loan on such date after giving notice of such Conversion or to
continue a Eurodollar Loan after giving notice of such Continuation; or
(c) any payment, prepayment or Conversion of a Eurodollar Loan required by
any provision of this Agreement or otherwise made or deemed made on a date other
than the last day of an Interest Period for such Eurodollar Loan; or
(d) any cessation of the Eurodollar Rate to apply to any Loan or any part
thereof;
including, in each case, any actual loss or expense sustained or incurred or to
be sustained or incurred in liquidating or employing deposits acquired to effect
or maintain such Eurodollar Loan or any part thereof. Such compensation shall
include an amount equal to the excess, if any, as reasonably determined by each
Bank, of (1) its cost of obtaining the funds for the Loan being paid, prepaid or
converted or not borrowed, converted or continued (assumed to be the applicable
Eurodollar Rate) for the period from the date of such payment, prepayment or
Conversion or failure to borrow, convert or continue to the last day of the
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 of such failure to borrow, convert or continue) over (2) the amount of
interest (as reasonably determined by such Bank) that would be realized by such
Bank in reemploying the funds so paid, prepaid or converted or not borrowed,
converted or continued for such period or Interest Period, as the case may be.
Each determination of the amount of such compensation by a Bank shall be
conclusive and binding, absent manifest error, and may be computed using any
reasonable averaging and attribution method.
6.6. CAPITAL ADEQUACY. If any Bank shall have determined that
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(a) the adoption after the date of this Agreement or the effectiveness
after the date of this Agreement (regardless of whether previously announced) of
any applicable Legal Requirement or treaty regarding capital adequacy, or
(b) any change after the date of this Agreement in any existing or future
Legal Requirement or treaty regarding capital adequacy, or
(c) any change after the date of this Agreement in the interpretation or
administration of any existing or future Legal Requirement or treaty regarding
capital adequacy by any Governmental Authority or comparable agency charged with
the interpretation or administration thereof, or
(d) compliance by any Bank (or its Applicable Lending Office) with any
request or directive after the date of this Agreement regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority or
comparable agency
has or would have the effect of reducing the rate of return on the capital of
such Bank (or any holding company of which such Bank is a part) as a consequence
of its obligations under this Agreement and the other Credit Documents to a
level below that which such Bank or holding company could have achieved but for
such adoption, change or compliance by an amount deemed by such Bank or holding
company to be material, then, from time to time, on demand by such Bank (with a
copy to the Agent), the Company (subject to SECTION 12.8) shall pay to such Bank
such additional amount or amounts as will compensate such Bank or holding
company for such reduction. The certificate of any Bank setting forth such
amount or amounts as shall be necessary to compensate it and the basis therefor
shall cover amounts accruing under this SECTION 6.6 with respect to a period
beginning not earlier than 120 days from the date thereof and shall be
conclusive and binding, absent manifest error. The Company shall pay the amount
shown as due on any such certificate upon delivery of such certificate. In
preparing such certificate, a Bank may take into consideration such Bank's and
such holding company's policies with respect to capital adequacy, employ such
assumptions and allocations of costs and expenses as it shall in good faith deem
reasonable, and use any reasonable averaging and attribution method.
In the event any Bank shall seek compensation pursuant to this SECTION
6.6, the Company may give notice to such Bank (with copies to the Agent) that it
wishes to seek one or more Eligible Assignees (which may be one or more of the
Banks) to purchase and assume the Commitment, Loans, Note and interests in this
Agreement of such Bank. Each Bank requesting compensation pursuant to this
SECTION 6.6 agrees to sell its Commitment, Loans, Note and interests in this
Agreement pursuant to SECTION 12.6 (without recourse, representation or warranty
except as provided in SECTION 12.6) to any such Eligible Assignee for an amount
equal to (x) the sum of the outstanding unpaid principal of and accrued and
unpaid interest on such Loans and Note, plus (y) all other fees and amounts
(including any compensation claimed by such Bank under this SECTION 6.6 and
including a breakage charge as if such Bank had been prepaid the amount of all
of its outstanding Eurodollar Loans) owing to such Bank under the Credit
Documents, calculated, in each case, to the date on which such Commitment,
Loans, Note and interests are purchased, whereupon such Bank
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shall have no further Commitment or other obligation to the Company under this
Agreement or any other Credit Document in respect of matters arising after the
consummation of such purchase, but shall continue to be entitled to the benefit
of, and subject to any obligation incurred by it under, this Agreement and the
other Credit Documents in respect of matters occurring during the time it was a
Bank under this Agreement.
Section 7. CONDITIONS PRECEDENT.
7.1. INITIAL CONDITIONS PRECEDENT. The effectiveness of this Agreement and
the obligation of each Bank to make its initial Loan to the Company pursuant to
this Agreement are each subject to the following conditions precedent, each of
which shall have been fulfilled in the sole discretion of the Agent:
(a) CORPORATE ACTION AND STATUS. The Agent shall have received
copies of the Organizational Documents of the Company certified by the
Secretary of the Company, and resolutions of the Board of Directors of the
Company, certified by the Secretary of the Company, for all corporate
action taken by the Company authorizing the execution, delivery and
performance of the Credit Documents to which the Company is a party,
together with such certificates as may be appropriate to demonstrate the
existence, qualification and good standing of and payment of taxes by each
member of the Combined Group in each jurisdiction in which such
qualification is required to make true the representations contained in
SECTION 8.1.
(b) INCUMBENCY. The Company shall have delivered to the Agent a
certificate in respect of the name and signature of each officer who (i)
is authorized to sign on its behalf the applicable Credit Documents to
which the Company is a party and (ii) will, until replaced by another
officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices
and other communications in connection with this Agreement and the other
Credit Documents. The Agent and each Bank may conclusively rely on such
certificates until they receive notice in writing from the Company to the
contrary.
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(c) NOTES. The Agent shall have received the appropriate Note of the
Company for each Bank, each duly completed and executed.
(d) SUBSIDIARY GUARANTEES. Each Subsidiary Guarantor shall have duly
executed and delivered to the Agent a Subsidiary Guarantee. The Agent
shall have received copies of the Organizational Documents of each
Subsidiary Guarantor certified by the Secretary of such Subsidiary
Guarantor, and resolutions of the Board of Directors of each Subsidiary
Guarantor, certified by the Secretary of such Subsidiary Guarantor, for
all corporate action taken by such Subsidiary Guarantor authorizing the
execution, delivery and performance of the Subsidiary Guarantee to which
such Subsidiary Guarantor is a party, together with such certificates as
may be appropriate to demonstrate the existence, qualification and good
standing of and payment of taxes by such Subsidiary Guarantor in the
jurisdiction of its incorporation or organization. The Company shall have
delivered to the Agent a certificate in respect of the name and signature
of each officer of each Subsidiary Guarantor who is authorized to sign on
its behalf the Subsidiary Guarantee to which such Subsidiary Guarantor is
a party.
(e) CREDIT DOCUMENTS. The Company and each Subsidiary Guarantor
shall have duly executed and delivered the other Credit Documents to which
it is a party, and each such Credit Document shall be in Proper Form. Each
such Credit Document shall be in substantially the form furnished to the
Banks prior to their execution of this Agreement, together with such
non-material changes therein as the Agent may approve in its discretion.
The Company shall have paid to the Agent all fees and expenses in the
amounts previously agreed upon in writing among the Company and the Agent
and all amounts due under SECTION 12.3.
(f) OPINION OF COUNSEL TO THE COMPANY. The Agent shall have received
the opinions of Andrews & Kurth L.L.P. and of David L. Hicks, counsel to
the Company, substantially in the forms of SCHEDULES II and III,
respectively.
(g) COUNTERPARTS. The Agent shall have received counterparts of each
of the Credit Documents duly executed and delivered by or on behalf of
each of the parties thereto (or, in the case of any Bank as to which the
Agent shall not have received such a counterpart, the Agent shall have
received evidence satisfactory to it of the execution and delivery by such
Bank of a counterpart hereof).
(h) MERGER. The Agent shall have received evidence satisfactory to
it in its discretion that the Merger has occurred.
(i) CONSENTS. The Agent shall have received evidence satisfactory to
it in its discretion that all authorizations, approvals and consents of,
and all filings and registrations with, all Governmental Authorities, the
holders of the Santa Fe Senior Subordinated Notes, the holders of the
Snyder Senior Subordinated Notes, and each other Person, if any, required
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in connection with the Loans or the execution, delivery and performance of
the Credit Documents have been received and remain in full force and
effect.
(j) OTHER DOCUMENTS. The Agent shall have received such other
documents consistent with the terms of this Agreement and relating to the
transactions contemplated hereby as the Agent may reasonably request.
(k) TERMINATION OF EXISTING CREDIT FACILITIES. The Agent shall have
received evidence satisfactory to it in its sole discretion that the
Existing Santa Fe Credit Facility and the Existing Snyder Credit Facility
shall have been terminated; that all borrowings under each such facility
have been repaid, and that all commitments under each such facility have
terminated.
(l) SENIOR SUBORDINATED DEBT. The Agent shall have received evidence
satisfactory to it in its discretion that the aggregate principal amount
of Total Debt outstanding pursuant to the Santa Fe Indenture does not
exceed $100,000,000 and that the aggregate principal amount of Total Debt
outstanding pursuant to the Snyder Indenture does not exceed $175,000,000.
All provisions and payments required by this SECTION 7.1 are subject to
the provisions of SECTION 12.8.
7.2. ALL LOANS. The obligation of each Bank to make any Loan (including
its initial Loan) to be made by it hereunder is subject to the additional
conditions precedent that, as of the date of such Loan, and after giving effect
thereto:
(a) for each Loan which is not a Conversion or a Continuation, no
Default shall have occurred and be continuing;
(b) for each Loan which is not a Conversion or a Continuation, there
shall have been no Material Adverse Change since the date of this
Agreement;
(c) for each Loan which is not a Conversion or a Continuation, all
representations and warranties made in each Credit Document shall be true
and correct in all material respects on and as of the date of the making
of such Loan with the same force and effect as if made on and as of such
date (except as the same are expressly stated in the Credit Documents to
be made only as of a specific earlier date, in which case the same shall
have been true and correct in all material respects as of such earlier
date);
(d) except for Loans made on the date of this Agreement, the Company
shall have delivered to the Agent a completed Request for Extension of
Credit within the time specified in SECTION 5.5; and
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(e) the making of such Loan shall not be prohibited by, or subject
the Agent or such Bank to any penalty under, any Legal Requirement
applicable to the Agent or such Bank.
The borrowing of the initial Loans under this Agreement and each Request
for Extension of Credit in respect of each Loan by the Company hereunder shall
constitute and include a representation and warranty by the Company to the
effect set forth in SUBSECTIONS (A) through (C) (if applicable) of this SECTION
7.2 (both as of the date of such notice and, unless the Company otherwise
notifies the Agent prior to the date of such borrowing, as of the date of such
borrowing).
7.3. CONVERSIONS AND CONTINUATIONS OF EURODOLLAR LOANS. The obligation of
each of the Banks to convert any Alternate Base Rate Loan into a Eurodollar Loan
or to continue any Eurodollar Loan for a new Interest Period is subject to the
conditions precedent that on the date of such Conversion or Continuation and
after giving effect thereto (a) no Default shall have occurred and be
continuing, (b) the Company shall have delivered to the Agent a completed Rate
Designation Notice within the time specified in SECTION 5.5, and (c) such
Conversion or Continuation shall not be prohibited by, or subject such Bank to
any penalty under, any Legal Requirement applicable to such Bank. The acceptance
of the benefits of such Conversion or Continuation shall constitute a
representation and warranty by the Company to each of the Banks to the effect
set forth in CLAUSE (A).
Section 8. REPRESENTATIONS AND WARRANTIES. To induce the Agent and the
Banks to enter into this Agreement and to extend credit under it, the Company
represents and warrants (such representations and warranties to survive any
investigation and the making of the Loans) to the Banks and the Agent as
follows:
8.1. CORPORATE EXISTENCE. Each member of the Combined Group (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) has all requisite power and authority, and
has all licenses, permits, authorizations, consents and approvals necessary, to
own its Property and carry on its business as now being conducted, and (c) is
qualified to do business, and is in good standing, in all jurisdictions in which
any of the Properties which it owns are located or the nature of the business
conducted by it makes such qualification necessary or advisable, unless the
failure to be so qualified or in good standing would not individually or in the
aggregate have a material adverse effect on the business, financial condition or
results of operations of the Combined Group taken as a whole.
8.2. INFORMATION.
(a) (i) The unaudited pro forma condensed combined balance sheet of Santa
Fe and its Subsidiaries as at December 31, 1998, and the related unaudited pro
forma condensed combined statements of operations for the year then ended,
together with the respective notes thereto, (ii) the unaudited consolidated
balance sheet of Santa Fe and its Subsidiaries as at March 31, 1999, and the
related unaudited consolidated statements of operations, changes in financial
position and cash flows for the quarter then ended, and (iii) the unaudited
consolidated balance sheet of Snyder and its
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Subsidiaries as at March 31, 1999, and the related unaudited consolidated
statements of operations, changes in financial position and cash flows for the
period then ended or the quarter then ended, together with the respective notes
thereto, each as delivered to each of the Banks prior to the date of this
Agreement, utilized assumptions which provide a reasonable basis for presenting
the significant effects of the Merger, and the pro forma adjustments therein
give appropriate effect to those assumptions and are properly applied in the pro
forma financial information.
(b) The consolidated balance sheet of Santa Fe and its Subsidiaries as at
December 31, 1998, and the related consolidated statements of operations,
changes in financial position and cash flows for the year then ended, together
with the respective notes thereto, delivered to each of the Banks prior to the
date of this Agreement fairly present in all material respects the consolidated
financial position of Santa Fe and its Subsidiaries at December 31, 1998 and
their consolidated results of operations for the year then ended in conformity
with GAAP.
(c) The consolidated balance sheet of Snyder and its Subsidiaries as at
December 31, 1998, and the related consolidated statements of operations,
changes in financial position and cash flows for the period then ended, together
with the respective notes thereto, delivered to each of the Banks prior to the
date of this Agreement fairly present in all material respects the consolidated
financial position of Snyder and its Subsidiaries at December 31, 1998 and their
consolidated results of operations for the year then ended in conformity with
GAAP.
(d) The most recent consolidated balance sheet of the Company and its
Subsidiaries and the related consolidated statements of operations, changes in
financial position and cash flows for the period then ended, together with the
respective notes thereto, delivered to each of the Banks in accordance with the
provisions of SECTION 9.1(A) or (B), as the case may be, fairly present in all
material respects the consolidated financial position of the Company and its
Subsidiaries as of such date and their consolidated results of operations for
the period then ended in conformity with GAAP.
(e) Since the date of this Agreement, there has been no Material Adverse
Change.
(f) On the date of this Agreement, there has been no Material Adverse
Change since December 31, 1998.
(g) The Obligations are senior to all indebtedness at any time outstanding
under the Santa Fe Indenture (except as otherwise provided in connection with
the pending defeasance of the Santa Fe Indenture) and senior to all indebtedness
at any time outstanding under the Snyder Indenture (except as otherwise provided
in connection with any redemption of the Snyder Senior Subordinated Notes).
8.3. LITIGATION; COMPLIANCE. Except as disclosed in writing to the Banks
prior to the date hereof, 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, threatened, against or affecting the Company or any of
its Subsidiaries which, if adversely determined, would result in a Material
Adverse Change. The Company and its Subsidiaries comply in all material respects
with all
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applicable material (based on the Company and its Subsidiaries taken as a whole)
Legal Requirements (other than the Applicable Environmental Laws,
representations and warranties regarding which are found in SECTION 8.13).
Neither the Company nor any of its Subsidiaries is in default in any material
respect under, or in violation of, any material (based on the Company and its
Subsidiaries taken as a whole) judgment, order or decree of any Governmental
Authority.
8.4. NO BREACH. None of the execution and delivery of the Credit
Documents, the consummation of the transactions therein contemplated or
compliance with the terms and provisions thereof will conflict with or result in
a breach of, or require any consent that has not been obtained under, the
Organizational Documents of the Company or any of its Subsidiaries or any
material Legal Requirement (including any securities law, rule or regulation)
applicable to the Company or any of its Subsidiaries or (except for the Liens
permitted by this Agreement) result in the creation or imposition of any Lien
upon any of the revenues or Property of the Company or any of its Subsidiaries.
Such execution, delivery, consummation and compliance do not and will not
conflict with or result in a breach of any material agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound or to which any of them is subject, or
constitute a default under any such agreement or instrument.
8.5. NECESSARY ACTION. The Company and each Subsidiary Guarantor has all
necessary power and authority to execute, deliver and perform its obligations
under the Credit Documents to which it is a party and to consummate the
transactions contemplated therein. The execution, delivery and performance of
the Credit Documents by the Company and each Subsidiary Guarantor, to the extent
each is a party thereto, and the consummation by the Company and such Subsidiary
Guarantor of the transactions contemplated therein have been duly authorized by
all necessary action on the part of the Company and such Subsidiary Guarantor.
The Credit Documents have been duly and validly executed and delivered by the
Company and each Subsidiary Guarantor, to the extent each is a party thereto,
and constitute the legal, valid and binding obligations of the Company and each
Subsidiary Guarantor party thereto, enforceable in accordance with their
respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to the enforcement of creditors' rights generally
and by general equitable principles.
8.6. APPROVALS. All authorizations, approvals and consents of, and all
filings and registrations with, all Governmental Authorities, the holders of the
Santa Fe Senior Subordinated Notes, the holders of the Snyder Senior
Subordinated Notes, and each other Person necessary for the execution, delivery
or performance of any Credit Document or the consummation by the Company or any
Subsidiary Guarantor of the transactions contemplated therein or for the
validity or enforceability thereof have been obtained and are in full force and
effect.
8.7. REGULATION U. None of the proceeds of the Loans will be used for the
purpose of, and neither the Company nor any Subsidiary of the Company is engaged
in the business of extending credit for the purpose of, (a) purchasing or
carrying any "margin stock" as defined in Regulation U of the Board (12 C.F.R.
Part 221) or (b) reducing or retiring any indebtedness which was originally
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incurred to purchase or carry margin stock, if such purpose under either (a) or
(b) above would constitute this transaction a "purpose credit" within the
meaning of said Regulation U, or for any other purpose which would constitute
this transaction a "purpose credit". Neither the Company nor any Subsidiary of
the Company is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
margin stocks. Neither the Company nor any Subsidiary of the Company nor any
Person acting on behalf of the Company or any Subsidiary of the Company has
taken or will take any action which might cause any of the Credit Documents,
including this Agreement, to violate Regulation U or any other regulation of the
Board, or to violate any similar provision of the Securities Exchange Act of
1934, as amended, or any rule or regulation under any such provision thereof.
8.8. ERISA. The Company and each ERISA Affiliate have fulfilled their
contribution obligations under each Plan subject to Title IV of ERISA and have
fulfilled their obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan subject to Title IV of ERISA, and in all other
regards with respect to each Plan are in material compliance with the applicable
provisions of ERISA, the Code, and all other applicable laws, regulations and
rules, to the extent that noncompliance with such provisions would result in a
Material Adverse Change. The Company has no knowledge of any event with respect
to each Plan which could result in a Material Adverse Change.
8.9. TAXES. The Company and its Subsidiaries have filed all income tax
returns and all other material tax returns which are required to be filed by
them and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by any of them, except to the extent the same may be
contested in good faith by appropriate proceedings diligently conducted for
which adequate reserves have been established in accordance with GAAP. The
charges, accruals and reserves on the books of the Company and its Subsidiaries
in respect of taxes and other governmental charges, as made on a periodic basis,
are adequate.
8.10. SUBSIDIARIES. SCHEDULE I as supplemented from time to time by notice
from the Company to the Agent is a complete and correct list of all Subsidiaries
of the Company on the date hereof. All Capital Stock of the Restricted
Subsidiaries directly or indirectly owned by the Company is free and clear of
Liens (except Permitted Encumbrances), and all such Capital Stock is validly
issued, fully paid and non-assessable.
8.11. INVESTMENT COMPANY ACT. No member of the Combined Group is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or directly or indirectly controlled by or acting on behalf of any
Person which is an "investment company", within the meaning of said Act.
8.12. PUBLIC UTILITY HOLDING COMPANY ACT; FEDERAL POWER ACT. No member of
the Combined Group is a "public-utility company", or an "affiliate" or a
"subsidiary company" of a "public-utility company", or a "holding company", or
an "affiliate" or a "subsidiary company" of a "holding company" or of a
"subsidiary company" of a "holding company," as such terms are
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defined in the Public Utility Holding Company Act of 1935, as amended, or a
"public utility" as such term is defined in the Federal Power Act, as amended.
8.13. ENVIRONMENTAL MATTERS. Except as disclosed in writing to the Agent
prior to the date hereof, the Company and its Subsidiaries, and the plants and
sites of each, have complied with all Applicable Environmental Laws, except, in
any such case, where such failure to so comply would not result in a Material
Adverse Change. Without limiting the generality of the preceding sentence,
neither the Company nor any of its Subsidiaries has received notice of or has
actual knowledge of any actual or claimed or asserted failure so to comply with
Applicable Environmental Laws or of any other Environmental Claim which alone or
together with all other such failures or Environmental Claims is material and
would result in a Material Adverse Change. Except as disclosed in writing to the
Agent prior to the date hereof, neither the Company nor any of its Subsidiaries
nor their plants or other sites manage, generate or dispose of, or during their
respective period of use, ownership, occupancy or operation by the Company or
its Subsidiaries have managed, generated, released or disposed of, any hazardous
wastes, solid wastes, petroleum substances, hazardous substances, hazardous
materials, toxic substances or toxic pollutants, as those terms are used or
defined in the Applicable Environmental Laws, in material violation of or in a
manner which would result in liability under the Applicable Environmental Laws
or any other applicable Legal Requirement, or in a manner which would result in
an Environmental Claim except where such noncompliance or liability or
Environmental Claim would not result in a Material Adverse Change. The
representation and warranty contained in this SECTION 8.13 is based in its
entirety upon (a) current interpretations and enforcement policies that have
been publicly disseminated and are used by Governmental Authorities charged with
the enforcement of the Applicable Environmental Laws or which apply to the
Company or any of its Subsidiaries with respect to any Property or sites in a
particular jurisdiction and (b) current levels of publicly disseminated
scientific knowledge concerning the detection of, and the health and
environmental risks associated with the discharge of, substances and pollutants
regulated pursuant to the Applicable Environmental Laws.
8.14. TITLE.
(a) Each member of the Combined Group has good and defensible title to the
oil, gas and mineral Properties and related facilities most recently identified
to the Bank as owned by it.
(b) Such Properties and facilities are free and clear of all Liens, except
Liens permitted hereby.
(c) All oil, gas and mineral leases and leasehold estates, gas purchase
and sales contracts and other agreements comprising or relating to any of such
Properties are valid and subsisting and in full force and effect, except for
those leases, estates, contracts, easements, rights-of-way and agreements which
are in the aggregate not material to such oil, gas and mineral Properties, taken
as a whole.
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(d) All rights, permits, easements, servitudes and rights-of-way, failure
to have or maintain which would materially interfere with the development,
maintenance and operation of such Properties so as to result in a Material
Adverse Change, have been obtained and are in full force and effect.
8.15. YEAR 2000 COMPLIANCE. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i) the computer systems
of the Company and its Subsidiaries and (ii) equipment containing embedded
microchips (including systems and equipment supplied by others or with which the
systems of the Company and its Subsidiaries interface) and the testing of all
such systems and equipment, as so reprogrammed, will be completed by September
30, 1999. The cost to the Company and its Subsidiaries of such reprogramming and
testing and of the reasonably foreseeable consequences of year 2000 to the
Company and its Subsidiaries (including, without limitation, reprogramming
errors and the failure of others' systems or equipment) will not result in a
Default or result in a Material Adverse Change. Except for such of the
reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information systems of the Company and its Subsidiaries
are and, with ordinary course upgrading and maintenance, will continue for the
term of this Agreement to be, sufficient to permit the Company to conduct its
business without resulting in a Material Adverse Change.
Section 9. COVENANTS. The Company covenants to and agrees with the Banks
and the Agent that until the termination of this Agreement pursuant to SECTION
12.7:
9.1. FINANCIAL STATEMENTS AND CERTIFICATES. The Company will deliver:
(a) to each Bank, as soon as practicable and in any event within 45 days
after the end of each quarterly period (other than the last quarterly period) in
each fiscal year, consolidated and consolidating statements of operations,
stockholders' equity and cash flows of the Company and its Subsidiaries for the
period from the beginning of the then-current fiscal year to the end of such
quarterly period, and a consolidated and consolidating balance sheet of the
Company and its Subsidiaries as of the end of such quarterly period, setting
forth (1) as to each account affected thereby, all eliminating entries for the
Unrestricted Subsidiaries as a group and (2) the resulting consolidated and
consolidating figures for the Company and the Restricted Subsidiaries, and
setting forth in each case in comparative form figures as of the end of and for
the corresponding period in the preceding fiscal year, all in reasonable detail
and unaudited but certified by an authorized financial officer of the Company as
fairly presenting the financial position and results of operations of the
Company and its Subsidiaries as of the date thereof and the period then ended,
subject to changes resulting from year-end adjustments;
(b) to each Bank, as soon as practicable and in any event within 90 days
after the end of each fiscal year, consolidated and consolidating statements of
operations, stockholders' equity and cash flows of the Company and its
Subsidiaries for such year, and a consolidated and consolidating balance sheet
of the Company and its Subsidiaries as of the end of such fiscal year, setting
forth (1) as to each account affected thereby, all eliminating entries for the
Unrestricted Subsidiaries as a
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group and (2) the resulting consolidating figures for the Company and the
Restricted Subsidiaries, and setting forth in each case in comparative form
corresponding consolidating figures from the preceding annual audit, all in
reasonable detail and which shall be reported on by PricewaterhouseCoopers LLP
or other independent public accountants of recognized national standing selected
by the Company whose report shall (A) contain an opinion that shall be
unqualified as to the scope or limitations imposed by the Company and shall not
be subject to any other material qualification and (B) state that such financial
statements present fairly, in all material respects, the financial position of
the Company and its Subsidiaries at the dates indicated and their cash flows and
the results of their operations and the changes in their financial position for
the periods indicated in conformity with GAAP, and shall be accompanied by a
report of such independent public accountants stating that (W) such audit was
made for the purpose of forming an opinion on the consolidated financial
statements taken as a whole; (X) the consolidating information set forth therein
is presented for purposes of additional analysis rather than to present the
financial position, results of operations and cash flows of the individual
companies; (Y) such consolidating information has been subjected to the auditing
procedures applied in the audit of the basic financial statements, and (Z) in
such independent public accountants' opinion, such consolidating information is
fairly stated in all material respects in relation to the consolidated financial
statements taken as a whole, with such changes thereto as such accountants
reasonably determine to be appropriate under the circumstances;
(c) to each Bank, promptly upon transmission thereof, copies of all
financial statements, proxy statements, notices and reports as it shall send to
its public stockholders and copies of all registration statements (without
exhibits, and other than registration statements and reports relating to
employee benefit or compensation plans) and all reports which it files with the
Securities and Exchange Commission (or any body or agency succeeding to any or
all of the functions of the Securities and Exchange Commission);
(d) to each Bank, promptly upon receipt thereof, a copy of each other
report submitted to the Company or any of its Subsidiaries by independent
accountants in connection with any annual, interim or special audit made by them
of the books of the Company or any such Subsidiary;
(e) to each Bank, as soon as practicable and in any event within three
days after any executive officer of the Company obtains knowledge (1) of any
Default or any condition or event which, in the opinion of management of the
Company, would result in a Material Adverse Change (to the extent affecting the
Company and its Subsidiaries in a materially different manner or extent than the
oil and gas industry generally); (2) that any Person has given any notice to the
Company or any of its Subsidiaries or taken any other action with respect to a
claimed default or event or condition of the type referred to in SECTION 10.1(B)
or (N); (3) of any write-down equal to or greater than $10,000,000 resulting
from an impairment of the value of oil and gas assets; (4) of the institution of
any litigation involving claims against the Company or any of its Subsidiaries
equal to or greater than $10,000,000 with respect to any single cause of action
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or of any adverse determination in any court proceeding in any litigation
involving a potential liability to the Company or any of its Subsidiaries equal
to or greater than $10,000,000 with respect to any single cause of action which
makes the likelihood of an adverse determination in such litigation against the
Company or such Subsidiary substantially more probable; and (5) of any
regulatory proceeding which, if determined adversely to the Company, would
(alone or with other factors) result in a Material Adverse Change (to the extent
affecting the Company and its Subsidiaries in a materially different manner or
extent than the oil and gas industry generally), an Officer's Certificate
specifying the nature and period of existence of any such Default, condition or
event, or specifying the notice given or action taken by such Person and the
nature of any such claimed Default, event or condition, or specifying the
details of such proceeding, litigation or dispute and, in each case, what action
the Company and any affected Subsidiary has taken, is taking or proposes to take
with respect thereto;
(f) to each Bank, (1) promptly after the filing or receiving thereof,
copies of all annual reports and such other material reports and notices which
the Company or any ERISA Affiliate files under ERISA with the Internal Revenue
Service, the PBGC, the U.S. Department of Labor or any entity succeeding to any
or all of their respective functions with respect to a Plan that is subject to
Title IV of ERISA; (2) promptly upon acquiring knowledge of any "reportable
event" (as defined in Section 4043 of ERISA) or of any "prohibited transaction,"
as such term is defined in the Code or ERISA, in connection with any Plan which
may result in a Material Adverse Change, a statement executed by the President
or Chief Financial Officer of the Company or the applicable ERISA Affiliate,
setting forth the details thereof and the action which the Company or the ERISA
Affiliate proposes to take with respect thereto and, when known, any action
taken by the PBGC, the Internal Revenue Service, the U.S. Department of Labor
(or any entity succeeding to any or all of the functions of any such entity)
with respect thereto; (3) promptly after the filing or receiving thereof by the
Company or any ERISA Affiliate, any notice of the institution of any proceedings
or other actions which may result in the termination of any Plan or notice of
complete or partial withdrawal liability under Title IV of ERISA, and (4) each
request for waiver of the funding standards or extension of the amortization
periods required by Sections 303 and 304 of ERISA or Section 412 of the Code
promptly after the request is submitted by the Company or any ERISA Affiliate,
to the Secretary of the Treasury, the U.S. Department of Labor or the Internal
Revenue Service (or any entity succeeding to any or all of the functions of any
such entity), as the case may be;
(g) to the Agent, (i) no later than the first Quarterly Date after the
formation or acquisition of any Subsidiary of the Company, notice of such
formation or acquisition stating the name, jurisdiction of organization,
percentage owned by the Company, whether such Subsidiary is a Restricted
Subsidiary or an Unrestricted Subsidiary, and other relevant information, and
(ii) promptly upon the designation of a Subsidiary as a Restricted Subsidiary or
an Unrestricted Subsidiary pursuant to SECTION 9.17, notice of such designation;
and
(h) with reasonable promptness, such other information respecting the
business, financial condition or results of operations of the Company or any of
its Subsidiaries as the Agent or any Bank (through the Agent) may reasonably
request.
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Additionally, the Company will deliver to each Bank:
(x) Together with each delivery of financial statements required by
SUBSECTION (A) above, an Officer's Certificate demonstrating (with applicable
computations in reasonable detail) compliance by the Company and the Restricted
Subsidiaries with the provisions of SECTIONS 9.6, 9.7, 9.8, 9.9, 9.10, 9.11,
9.12, 9.14, OR 9.15 as at the date of the balance sheet included in such
financial statements and stating that at the date of such Officer's Certificate
there exists no Default, or, if any Default exists, specifying the nature and
period of existence thereof and what action the Company proposes to take with
respect thereto; and
(y) Together with each delivery of financial statements required by
SUBSECTION (B) above, a certificate of such accountants stating that, in
conducting the audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards they have obtained no
knowledge of any Default arising under SECTION 10.1(A), (B) or (I) or any
Default arising under SECTION 10.1(D) that occurs as result of the breach or
violation by the Company or the Restricted Subsidiaries of SECTIONS 9.6, 9.7,
9.8, 9.9, 9.10, 9.11, 9.12, 9.14 OR 9.15 or, if they have obtained knowledge of
any such Default, specifying the nature and period of existence thereof. Such
accountants, however, shall not be liable to the Agent or any Bank by reason of
their failure to obtain knowledge of any such Default which would not be
disclosed in the course of an audit conducted in accordance with generally
accepted auditing standards.
9.2. INSPECTION OF PROPERTY. The Company will permit, and cause each of
its Subsidiaries to permit, any Person designated in writing by any Bank, at
such Bank's expense and risk, to visit and inspect any of the Properties of the
Company and its Subsidiaries; and also to examine the corporate books and
financial records of the Company and its Subsidiaries and to make copies thereof
or extracts therefrom and to discuss the affairs, finances and accounts of such
Persons with the executive officers of the Company and its Subsidiaries, the
petroleum reserve engineers employed by the Company and its Subsidiaries and the
Company's independent public accountants, all at such reasonable times, with a
representative of the Company present and as often as such Bank may reasonably
request, and will assist such Person or Persons in all such activities.
9.3. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company will, and will cause
each of its Subsidiaries and each of its Affiliates that are controlled by the
Company or its Subsidiaries to, comply in a timely fashion with, or operate
pursuant to valid waivers of the provisions of, all Applicable Environmental
Laws, except where non-compliance would neither (a) result in a Material Adverse
Change nor (b) subject the Agent or any Bank to any liability for such
non-compliance (PROVIDED that the Company shall not be in default of this CLAUSE
(B) if the Company indemnifies each of the Agent, Banks or any of them subjected
to such liability and provides collateral to secure such indemnification, all to
the extent required by the Person subjected to such liability in its sole and
unfettered discretion). THE COMPANY AGREES TO INDEMNIFY AND HOLD THE AGENT AND
EACH BANK, AND THEIR RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES HARMLESS FROM ANY
LOSS, LIABILITY, CLAIM OR EXPENSE WHICH ANY SUCH PERSON MAY INCUR OR SUFFER AS A
RESULT OF A BREACH
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BY THE COMPANY OR ITS SUBSIDIARIES OR AFFILIATES, AS THE CASE MAY BE, OF THIS
COVENANT. The Company shall not be deemed to have breached or violated this
SECTION 9.3 if the Company or the applicable Subsidiary or Affiliate, as the
case may be, is challenging in good faith by appropriate proceedings diligently
pursued, and subject to the indemnification obligations of this SECTION 9.3, the
application or enforcement of any such Applicable Environmental Laws for which
adequate reserves have been established in accordance with GAAP.
9.4. PAYMENT OF TAXES. The Company will, and will cause each of its
Subsidiaries to, pay, or have paid on its behalf, before the same become
delinquent all taxes, assessments and governmental charges imposed upon it or
upon its Property, except to the extent contested in good faith by appropriate
proceedings diligently conducted for which adequate reserves have been
established in accordance with GAAP.
9.5. MAINTENANCE OF INSURANCE. The Company and each of its Subsidiaries
will carry and maintain insurance in accordance with industry standards by
financially sound and reputable insurers, insurance of the kinds, covering the
risks and in the relative proportionate amounts customarily carried by companies
engaged in the same or similar businesses and similarly situated.
9.6. NET WORTH. The Company will not permit the Consolidated Net Worth at
any time to be less than the total of (a) $565,000,000 PLUS or MINUS, as the
case may be, (b) the Consolidated Net Worth Floor Adjustment as of such time.
9.7. TOTAL DEBT TO EBITDAX. The Company will not at any time create,
incur, assume or suffer to exist any Total Debt of the Combined Group which
exceeds in the aggregate the product of (a) 3.50 multiplied by (b) EBITDAX for
the four consecutive fiscal quarters then most recently ended.
9.8 RESTRICTED PAYMENTS. The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, make any Restricted Payment,
if immediately thereafter and after giving effect thereto, any Default or Event
of Default would exist; PROVIDED, that any Restricted Subsidiary may declare and
pay dividends and make distributions to the Company and may declare and pay
dividends and make distributions to any other Restricted Subsidiary of which it
is a Subsidiary.
9.9. LIENS. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any Lien of any kind upon any of its or their respective Properties (including
the Capital Stock of any Restricted Subsidiary), whether now owned or hereafter
acquired, or any revenue or profits therefrom, other than and except for:
(a) Permitted Encumbrances;
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(b) Liens securing indebtedness of a Restricted Subsidiary owing to
the Company or to a Wholly-Owned Restricted Subsidiary;
(c) Liens on the Capital Stock of Unrestricted Subsidiaries;
(d) Liens existing on any Property of a Person at the time such
Person becomes a Restricted Subsidiary, or Liens existing prior to the
time of acquisition upon any Property acquired by the Company or any
Restricted Subsidiary through purchase, merger or consolidation, or
otherwise; PROVIDED, that except as otherwise permitted by this SECTION
9.9, any such Lien (i) shall not encumber any other Property of the
Company or any Restricted Subsidiary and (ii) shall not have been created
or modified in any respect in anticipation of such Person's becoming a
Restricted Subsidiary or in anticipation of the acquisition by the Company
or any Restricted Subsidiary of the real property subject thereto (other
than to reflect the assumption of such Lien or other ministerial acts
relating thereto); PROVIDED, HOWEVER, that the aggregate amount of
indebtedness secured by all Liens permitted pursuant to this CLAUSE (D)
shall not exceed $25,000,000 in the aggregate for all Persons;
(e) Liens placed on Property at the time of acquisition thereof to
secure all or a portion of (or to secure Total Debt incurred to pay all or
a portion of) the purchase price of such acquisition; PROVIDED that (i)
such Property is not and shall not become encumbered in an amount in
excess of the lesser of the cost or the fair market value thereof; and
(ii) any such Lien shall not encumber any other Property of the Company or
a Restricted Subsidiary; PROVIDED, HOWEVER, that the aggregate amount of
indebtedness secured by all Liens permitted pursuant to this CLAUSE (E)
shall not exceed $25,000,000 in the aggregate for all Persons; and
(f) Liens (other than Liens on the Capital Stock of a Restricted
Subsidiary) securing indebtedness in an aggregate amount for all such
Persons not to exceed $50,000,000 at any one time outstanding.
9.10. FUNDAMENTAL CHANGES.
(a) The Company will not, directly or indirectly, enter into any
transaction of merger or consolidation, or convey, transfer, or lease its
Properties and assets substantially as an entirety to any Person, unless:
(i) either (A) the Company (in any merger or consolidation) is the
surviving entity, or (B) the entity formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the Properties and assets of the Company
substantially as an entirety (the "SUCCESSOR ENTITY") shall either (x)
immediately after giving effect of such merger, consolidation, conveyance,
transfer or lease, have then-effective ratings (or implied ratings)
published by Moody's and S&P applicable to such Successor Entity's senior,
unsecured, non-credit-enhanced, long term indebtedness for borrowed money,
which ratings shall be Ba1 or higher (if assigned by Moody's) or BB+
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or higher (if assigned by S&P), or (y) be acceptable to the Required Banks
in their sole and absolute determination;
(ii) any Successor Entity shall be a Person organized and existing
under the laws of the United States of America, any state thereof or the
District of Columbia, and shall expressly assume, by amendment to this
Agreement executed by the Company and such Successor Entity and delivered
to the Agent, the due and punctual payment of the Obligations and the
performance or observance of every covenant hereof on the part of the
Company to be performed or observed;
(iii) immediately after giving effect to such transaction, no
Default and no Event of Default shall have occurred and be continuing; and
(iv) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, Properties or assets of the Company or any
Restricted Subsidiary would become subject to a Lien which would not be
permitted by SECTION 9.9, the Company or the Successor Entity, as the case
may be, shall take such steps as shall be necessary effectively to secure
the Obligations equally and ratably with (or prior to) all indebtedness
secured thereby.
(b) The Company shall not permit any Restricted Subsidiary, directly
or indirectly, to enter into any transaction of merger or consolidation, or
convey, transfer or lease its Properties and assets substantially as an entirety
to any Person, unless, immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing.
Upon the occurrence of any merger, consolidation, conveyance, transfer or lease,
the Company shall promptly deliver to the Agent an Officer's Certificate
demonstrating (with applicable computations in reasonable detail) compliance by
the Company and the Restricted Subsidiaries with the provisions of SECTIONS 9.6
AND 9.7 after giving effect to such transaction and stating that immediately
after and after giving effect to such transaction there existed and exists no
Default or Event of Default.
9.11 ASSET SALES. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, engage in any Asset Sale, unless
(a) immediately after and after giving effect to such Asset Sale, no
Default or Event of Default shall have occurred and be continuing, and
(b) after giving effect to such Asset Sale, the aggregate fair
market value of
(i) all assets of the Company and all Restricted Subsidiaries
Transferred in an Asset Sale (on a consolidated basis) during the period
of 12 consecutive months immediately preceding such Asset Sale, PLUS
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(ii) with respect to each Restricted Subsidiary the Capital
Stock of which has been Transferred in an Asset Sale during such 12-month
period, that portion of the assets of such Restricted Subsidiary obtained
by multiplying the total assets of such Restricted Subsidiary at the time
of such Transfer times a fraction, the numerator of which is the aggregate
amount of Capital Stock of such Restricted Subsidiary so Transferred and
the denominator of which is the aggregate amount of all Capital Stock of
such Restricted Subsidiary at the time of such Transfer
shall not exceed the greater of (x) 10% of the consolidated net tangible assets
of the Company and the Restricted Subsidiaries as of the end of the fiscal
quarter immediately preceding or coinciding with such Asset Sale, or (y)
$150,000,000. Concurrently with each Asset Sale, the Company will deliver to the
Agent an Officer's Certificate stating that, immediately after and after giving
effect to such Asset Sale, there existed and exists no Default or Event of
Default.
9.12 INVESTMENTS. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, make or have any Investment in, any
Person, or make any commitment to make any such Investment, except (a) Permitted
Investments, and (b) other Investments in an aggregate amount for all such
Persons not to exceed $25,000,000 at any one time outstanding.
9.13. INDEBTEDNESS AND GUARANTEES OF INDEBTEDNESS BY RESTRICTED
SUBSIDIARIES.
(a) The Company will not permit any Restricted Subsidiary to create,
incur, suffer or permit to exist, or assume or enter into, any Total Debt,
whether direct, indirect, absolute, contingent or otherwise, except Total Debt
which does not exceed in the aggregate for all Restricted Subsidiaries
$50,000,000 at any one time outstanding.
(b) The Company will not permit any Restricted Subsidiary that is not a
Subsidiary Guarantor to Guarantee the payment of any indebtedness of the Company
unless (i) such Restricted Subsidiary simultaneously executes and delivers a
Subsidiary Guarantee of the Obligations by such Restricted Subsidiary; and (ii)
such Restricted Subsidiary waives and agrees not in any manner whatsoever to
claim or take the benefit or advantage of, any rights of reimbursement,
indemnity or subrogation or any other rights against the Company or any other
Restricted Subsidiary as a result of any payment by such Restricted Subsidiary
under its Subsidiary Guarantee until such time as the obligations Guaranteed
thereby are paid in full; PROVIDED that this SUBSECTION (B) shall not be
applicable to any Guarantee of any Restricted Subsidiary that (x) existed at the
time such Person became a Restricted Subsidiary and (y) was not incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary.
(c) Notwithstanding the foregoing and the other provisions of this
Agreement, any Subsidiary Guarantee incurred by a Restricted Subsidiary pursuant
to this SECTION 9.13 shall provide by its terms that it shall be automatically
and unconditionally released and discharged upon the sale or disposition (by
merger or otherwise) of such Subsidiary Guarantor (or all or substantially all
of its Properties) to a Person other than the Company or another Subsidiary
Guarantor and pursuant to a transaction that is otherwise in compliance with the
terms of this Agreement; PROVIDED, HOWEVER,
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that any such termination shall occur only to the extent that all obligations of
such Subsidiary Guarantor under all of its Guarantees of, and under all of its
pledges of assets or other security interests which secure, other indebtedness
of the Company or any other Restricted Subsidiary shall also terminate upon any
such sale or other disposition. The Company shall deliver to the Agent an
Officer's Certificate as to the occurrence of the terms and conditions set forth
in this SECTION 9.13(C). Each Subsidiary Guarantor that is designated as an
Unrestricted Subsidiary in accordance with SECTION 9.17 shall be released from
its Subsidiary Guarantee and all related obligations under this Agreement for so
long (but only so long) as it remains an Unrestricted Subsidiary.
Notwithstanding any other provision of this SECTION 9.13(C), all of the
Subsidiary Guarantors shall be released from their respective Subsidiary
Guarantees and all related obligations under this Agreement in the event that
all obligations of the Subsidiary Guarantors under all of their Guarantees of,
and under all of their pledges of assets and other security interests which
secure, other indebtedness of the Company shall also terminate.
9.14 SALES AND LEASEBACKS. The Company will not, and will not permit any
Restricted Subsidiary to, enter into any arrangement with any bank, insurance
company or other lender or investor (not including the Company or any
Wholly-Owned Restricted Subsidiary) or to which any such bank, insurance
company, lender or investor is a party, providing for the leasing by the Company
or a Restricted Subsidiary for a period, including renewals, of three years or
more, of any Property or asset which has been or is to be sold or transferred
more than 180 days after the completion of construction and commencement of full
operation thereof, by the Company or any Restricted Subsidiary to such bank,
insurance company, lender or investor or to any Person to whom funds have been
or are to be advanced by such bank, insurance company, lender or investor on the
security of such Property (a "SALE AND LEASEBACK TRANSACTION") unless the
Company or such Restricted Subsidiary could create Total Debt in an amount equal
to the Attributable Debt with respect to the lease resulting from such sale and
leaseback transaction without violating SECTION 9.7 and unless after giving
effect thereto the Company shall be in compliance with SECTION 9.9.
Upon any sale and leaseback transaction, the Company shall deliver to the
Agent an Officer's Certificate demonstrating (with applicable computations in
reasonable detail) compliance by the Company and the Restricted Subsidiaries
with the provisions of SECTIONS 9.6, 9.7 AND 9.9 after giving effect to such
sale and leaseback transaction and stating that, immediately after and after
giving effect to such sale and leaseback transaction, there existed and exists
no Default or Event of Default.
9.15. TRANSACTIONS WITH AFFILIATES. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, enter into or
suffer to exist any transaction or series of related transactions (including,
without limitation, the sale, purchase, exchange or lease of Property or
services) with any Affiliate of the Company (other than the Company or a
Restricted Subsidiary) unless such transaction or series of related transactions
is on terms that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than would be available in a comparable
transaction in arm's-length dealings with an unrelated third party; PROVIDED,
HOWEVER, that the foregoing restriction shall not apply to (1) loans to
directors and employees of the
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Company or any Subsidiary made in the ordinary course of business in an
aggregate amount not to exceed $3,000,000 outstanding at any one time, (2) the
Company's director and employee expense, compensation and other benefit
arrangements, or (3) indemnities of officers and directors of the Company or any
Subsidiary consistent with such Person's charter and bylaws and applicable
statutory provisions.
9.16 RESTRICTIVE AGREEMENTS. The Company will not, and will not permit any
of its Subsidiaries to, enter into any agreement (excluding this Agreement or
any other Credit Document) with any creditor which limits the ability of the
Company to amend or otherwise modify this Agreement or any other Credit
Document. The Company will not, and will not permit any Restricted Subsidiary
to, enter into any agreement which restricts or prohibits the ability of any
Restricted Subsidiary to make any payments, directly or indirectly, to the
Company by way of dividends, a repayment of loans or other returns on
investments, or any other agreement or arrangement which restricts the ability
of any Restricted Subsidiary to make any payment, directly or indirectly, to the
Company, excluding, however, customary transactions with Affiliates of the
Company; PROVIDED, HOWEVER, that this SECTION 9.16 shall not apply to customary
restrictions contained in agreements with third parties requiring transactions
among affiliated companies to be fair and reasonable, or at fair market value,
or at arm's length, or other similar standards.
9.17. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES. The Board
of Directors of the Company may designate any Subsidiary of the Company,
including any Subsidiary previously designated as an Unrestricted Subsidiary, as
a Restricted Subsidiary; PROVIDED, that a Restricted Subsidiary which has been
designated as an Unrestricted Subsidiary may not be designated as a Restricted
Subsidiary before the date which is one year after the date such Restricted
Subsidiary most recently became an Unrestricted Subsidiary. PROVIDED that the
Consolidated Net Worth of the Company and the Restricted Subsidiaries at the
time of such designation is not less than $400,000,000 and shall not be reduced
below $400,000,000 by such designation, the Board of Directors of the Company
may designate any Subsidiary of the Company, including any Subsidiary previously
designated as a Restricted Subsidiary, as an Unrestricted Subsidiary if (a) the
Subsidiary to be so designated does not own any Capital Stock or indebtedness
of, or own or hold any Lien on any Property of, the Company or any Restricted
Subsidiary, (b) the Subsidiary to be so designated is not obligated by any
indebtedness or Lien that, if in default, would result (with the passage of time
or notice or otherwise) in a default on any indebtedness of the Company or any
Restricted Subsidiary, and (c) immediately after and after giving effect to such
designation, no Default or Event of Default shall have occurred and be
continuing. Unless so designated as an Unrestricted Subsidiary, any Subsidiary
of the Company will be classified as a Restricted Subsidiary. Upon any such
designation by the Board of Directors of the Company, the Company shall promptly
deliver to the Agent a copy of the resolution of such Board giving effect to
such designation and an Officer's Certificate demonstrating (with applicable
computations in reasonable detail) compliance by the Company and the Restricted
Subsidiaries with the provisions of SECTIONS 9.6 AND 9.7 and this SECTION 9.17
after giving effect to such designation and stating that, immediately after and
after giving effect to such designation, there existed and exists no Default or
Event of Default.
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9.18. YEAR 2000 COMPLIANCE. On or prior to December 31, 1999, the Company
and its Subsidiaries shall have taken all actions reasonably necessary to ensure
that all automated systems used by the Company and its Subsidiaries that are
material to their respective operations shall operate properly and process data
accurately, including dates before, as of and after December 31, 1999
(collectively, "YEAR 2000 COMPLIANCE"). The Company agrees that, upon the
reasonable request of the Bank, the Company and its Subsidiaries will make
available to the Bank their respective employees, consultants, premises, records
and documentation with respect to the Year 2000 Compliance efforts of the
Company and its Subsidiaries.
Section 10. DEFAULTS.
10.1. EVENTS OF DEFAULT. If one or more of the following events (herein
called "EVENTS OF DEFAULT") shall occur and be continuing:
(a) the Company or any Subsidiary Guarantor shall fail to pay any
principal of any Loan, fee or other principal amount payable hereunder or under
any other Credit Document, as and when due, or shall fail to pay any accrued and
unpaid interest on any amount hereunder or under any other Credit Document
within three days after the date due; or
(b) any member of the Combined Group shall default in any payment of
principal of or interest on any other obligation for money borrowed (or any
Capitalized Lease Obligation, any obligation under a conditional sale or other
title retention agreement, any obligation issued or assumed as full or partial
payment for Property whether or not secured by a purchase money mortgage or any
obligation under notes payable or drafts accepted representing extensions of
credit) beyond any period of grace provided with respect thereto; or any member
of the Combined Group shall fail to perform or observe any other agreement, term
or condition contained in any agreement under which any such obligation is
created (or if any other event thereunder or under any such agreement shall
occur and be continuing) and the effect of such failure or other event is to
cause, or to permit the holder or holders of such obligation (or a trustee on
behalf of such holder or holders) to cause, such obligation to become due prior
to any stated maturity; or any member of the Combined Group shall fail to pay
any Guarantee relating to Total Debt for borrowed money in accordance with its
terms; PROVIDED, in each case, that the aggregate amount of all obligations as
to which such a payment default shall occur and be continuing or such a failure
or other event causing or permitting acceleration shall occur and be continuing
shall exceed $25,000,000; or
(c) any representation or warranty made by the Company or any Subsidiary
Guarantor or by any officer of the Company or any Subsidiary Guarantor in any
Credit Document or in any other writing furnished to the Agent or any Bank in
connection with any Credit Document shall prove to have been false or misleading
in any material respect on the date as of which it was made; or
(d) the Company shall default in the performance of any of its obligations
under SECTION 2.9 or SECTIONS 9.6 THROUGH 9.17, INCLUSIVE; or
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(e) the Company or any Subsidiary Guarantor shall default in the
performance of any of its obligations in any Credit Document other than those
specified elsewhere in this SECTION 10.1 and such default shall not be remedied
within 30 days after any executive officer of the Company obtains actual
knowledge thereof; or
(f) any member of the Combined Group shall make an assignment for the
benefit of creditors; generally fail to pay its debts as such debts become due;
or admit in writing its inability to generally pay its debts as such debts
become due; or
(g) a Governmental Authority shall enter any decree or order for relief in
respect of any member of the Combined Group under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, whether now or
hereafter in effect (herein called a "BANKRUPTCY LAW"); or
(h) any member of the Combined Group shall petition or apply for or
consent to the appointment of, or taking possession by, a trustee, receiver,
custodian, sequestrator, liquidator or other similar official of or for itself
or any substantial part of its assets, or shall commence a voluntary case under
any Bankruptcy Law or any proceedings (other than proceedings for the voluntary
liquidation and dissolution of a Restricted Subsidiary) relating to any member
of the Combined Group under any Bankruptcy Law; or
(i) any such petition or application referred to in SECTION 10.1(H) shall
be filed, or any such proceeding referred to in SECTION 10.1(H) shall be
commenced, against any member of the Combined Group and such member of the
Combined Group by any act shall indicate its approval thereof, consent thereto
or acquiescence therein; or an order, judgment or decree shall be entered
appointing any such trustee, receiver, custodian, liquidator or similar
official, or approving the petition in any such proceedings, and such order,
judgment or decree shall remain unstayed and in effect for more than 60
consecutive days; or
(j) any order, judgment or decree shall be entered in any proceedings
against any member of the Combined Group decreeing the dissolution or
liquidation of any member of the Combined Group and such order, judgment or
decree shall remain unstayed and in effect for more than the appeal time
provided by law; or
(k) any order, judgment or decree shall be entered in any proceedings
against any member of the Combined Group decreeing a split-up of such member of
the Combined Group which requires (1) the divestiture of assets which exceed, or
the divestiture of the Capital Stock of a Restricted Subsidiary whose assets
exceed, 10% of the consolidated total assets of the Company and the Restricted
Subsidiaries as of the end of the fiscal quarter immediately preceding or
coinciding with such divestiture or (2) the divestiture of assets or Capital
Stock of a Restricted Subsidiary which shall have contributed more than 10% of
EBITDAX for the four most recently completed fiscal
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quarters, and such order, judgment or decree shall remain unstayed and in effect
for more than 60 consecutive days; or
(l) any judgment or order, or series of judgments or orders, for the
payment of money in an amount in excess of $10,000,000 shall be rendered against
any member of the Combined Group and 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, within the appeal time provided by law from the date of
entry thereof, or such member of the Combined Group shall not, within said
appeal time, 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
(m) the Company or any ERISA Affiliate shall fail to pay when due any
amount or amounts aggregating in excess of $25,000,000 which it shall have
become liable to pay with respect to any Plan; or notice of intent to terminate
a Plan or Plans (other than a multiemployer plan under Section 4001(a)(3) of
ERISA) having aggregate Unfunded Liabilities in excess of $25,000,000 shall be
filed under Title IV of ERISA by the Company or any ERISA Affiliate, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to be
appointed to administer any Plan or Plans (other than a multiemployer plan under
Section 4001(a)(3) of ERISA) having aggregate Unfunded Liabilities in excess of
$25,000,000 or a proceeding shall be instituted by a fiduciary of any such Plan
or Plans against the Company or any ERISA Affiliate to enforce Section 515 or
4219(c)(5) of ERISA; or the Company or any ERISA Affiliate shall incur a
complete or partial withdrawal liability under Title IV of ERISA in an annual
amount in excess of $5,000,000 (and in the aggregate $25,000,000) in connection
with any Plan; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Plan or Plans having aggregate
Unfunded Liabilities in excess of $25,000,000 must be terminated; or there shall
occur any event or condition that might reasonably constitute grounds for the
termination of any Plan or Plans having aggregate Unfunded Liabilities in excess
of $25,000,000 or with respect to such Plan or Plans either the imposition of
any liability in excess of $25,000,000 (other than contributions in the ordinary
course) or any Lien provided under Section 4068 of ERISA securing an amount in
excess of $25,000,000 on any Property of the Company or any ERISA Affiliate; or
(n) the Company or any Subsidiary Guarantor shall claim in writing that
this Agreement or any other Credit Document is invalid or unenforceable in any
material respect; or
(o) any Change of Control shall occur;
THEREUPON: (I) the Agent may (and, if directed by the Required Banks, shall) do
any or all of the following: (a) declare all Commitments terminated (whereupon
all such Commitments shall be terminated); and (b) declare the unpaid amount of
the Notes (principal and accrued and unpaid interest) and all fees and other
accrued and unpaid amounts payable under the Credit Documents to be forthwith
due and payable, whereupon such amounts shall be and become immediately due and
payable, without notice (including notice of acceleration and notice of intent
to accelerate),
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presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly WAIVED by the Company to the extent permitted by law; PROVIDED
that in the case of the occurrence of an Event of Default with respect to the
Company referred to in SECTION 10.1(G) through (I), the Commitments shall be
automatically terminated and the unpaid amount of the Notes (principal and
accrued and unpaid interest) and all fees and all other accrued and unpaid
amounts payable under the Credit Documents shall be and become automatically and
immediately due and payable, without notice (including notice of intent to
accelerate and to the extent permitted by the law, notice of acceleration) and
without presentment, demand, protest or other formalities of any kind, all of
which are hereby expressly WAIVED by the Company; (II) each Bank may exercise
its rights of offset against each account and all other Property of the Company
in the possession of such Bank, which right is hereby granted by the Company to
each Bank; and (III) the Agent and each Bank may exercise any and all other
rights available to them pursuant to the Credit Documents, at law and in equity.
Section 11. THE AGENT.
11.1. APPOINTMENT, POWERS AND IMMUNITIES. Each Bank irrevocably appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement, the Notes and the other Credit
Documents as are delegated to the Agent by the terms of this Agreement, the
Notes or any other Credit Document, together with all such powers as are
reasonably incidental thereto. The Agent (which term as used in this SECTION 11
shall include reference to its Affiliates and its own and its Affiliates'
officers, directors, employees, agents and advisors) (a) shall have no duties or
responsibilities except those expressly set forth in the Credit Documents and
shall not by reason of any Credit Document be a trustee or fiduciary for any
Bank; (b) shall not be responsible to any Bank for any recitals, statements,
representations or warranties contained in any Credit Document, or in any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of any Credit Document or any other
document referred to or provided for therein or any Property covered thereby or
for any failure by the Company or any other Person to perform any of its
obligations hereunder or thereunder; (c) shall not be required to initiate or
conduct any enforcement, litigation or collection proceedings hereunder or under
any Credit Document except to the extent requested by the Required Banks (and
SECTION 11.7 shall apply), and (d) shall not be responsible to any Bank for any
action taken or omitted to be taken by it under any Credit Document or any other
document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, including any such action pursuant to its own
negligence, except for its own gross negligence or willful misconduct. The Agent
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.
11.2. RELIANCE BY AGENT. The Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, facsimile, 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 upon advice and statements of legal counsel (which may be counsel
for the Company), independent accountants and other experts selected by the
Agent. As to any matters not expressly provided for by any Credit Document, the
Agent shall in all cases be fully protected in
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acting, or in refraining from acting, in accordance with instructions of the
Required Banks, and any action taken or failure to act pursuant thereto shall be
binding on all of the Banks.
11.3. DEFAULTS. The Agent shall not be deemed to have knowledge of the
occurrence of a Default (other than the nonpayment of Loans or Facility Fees)
unless it has received notice from a Bank or the Company specifying such Default
and stating that such notice is a "Notice of Default". In the event that the
Agent receives such a notice of the occurrence of a Default, the Agent shall
give prompt notice thereof to the Banks (and shall give each Bank prompt notice
of each such nonpayment). The Agent shall (subject to SECTIONS 11.7 and 12.5)
take such action with respect to such Default as shall be directed by all Banks
or the Required Banks, as appropriate, and within its rights under the Credit
Documents and at law or in equity; PROVIDED that, unless and until the Agent
shall have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, permitted hereby with
respect to such Default as it shall deem advisable in the best interests of the
Banks and within its rights under the Credit Documents, at law or in equity, and
shall be fully protected in doing so.
11.4. RIGHTS AS A BANK. With respect to its Commitments and Loans, Chase
Texas in its capacity as a Bank hereunder shall have the same rights and powers
under the Credit Documents as any other Bank and may exercise the same as though
it were not acting as the Agent, and the term "Bank" or "Banks" shall, unless
the context otherwise indicates, include the Agent in its individual capacity.
Chase Texas may (without having to account therefor to any Bank) accept deposits
from, act as trustee for, lend money to and generally engage in any kind of
banking, trust, letter of credit, agency or other business with the Company (and
any of its Affiliates) as if it were not acting as the Agent, and Chase Texas
and the Agent may accept fees and other consideration from the Company and its
Affiliates (in addition to the fees heretofore agreed to between the Company and
the Agent) for services in connection with this Agreement or otherwise without
having to account for the same to the Banks. Without limiting the rights and
remedies of the Banks specifically set forth herein, no other Bank by virtue of
being a Bank hereunder shall have any interest in any such activities, any
present or future guaranty in favor of Chase Texas by or for the account of the
Company, any present or future offset exercised by Chase Texas in respect of any
such other activities, or any present or future Property at any time taken as
security for any such other activities; PROVIDED, HOWEVER, that if any payment
in respect of such guaranties or such Property or the proceeds thereof shall be
applied to the Obligations, each Bank shall be entitled to share in such
application PRO RATA according to its portion of the Obligations.
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11.5. INDEMNIFICATION. THE BANKS SHALL INDEMNIFY THE AGENT AND EACH OTHER
INDEMNIFIED PERSON (TO THE EXTENT NOT REIMBURSED UNDER SECTION 12.3 OR 12.4, BUT
WITHOUT LIMITING THE OBLIGATIONS OF THE COMPANY UNDER SAID SECTIONS 12.3 AND
12.4), RATABLY IN ACCORDANCE WITH THEIR RESPECTIVE COMMITMENT PERCENTAGES, FOR
ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES AND DISBURSEMENTS OF ANY KIND AND NATURE
WHATSOEVER (INCLUDING THE CONSEQUENCES OF THE SOLE, ORDINARY OR CONTRIBUTORY
NEGLIGENCE OF THE AGENT OR ANY OTHER INDEMNIFIED PERSON) WHICH MAY BE IMPOSED
ON, INCURRED BY OR ASSERTED AGAINST THE AGENT OR ANY OTHER INDEMNIFIED PERSON IN
ANY WAY RELATING TO OR ARISING OUT OF ANY CREDIT DOCUMENT (AS DEFINED HEREIN) OR
ANY OTHER DOCUMENTS CONTEMPLATED BY OR REFERRED TO HEREIN OR THEREIN OR THE
TRANSACTIONS CONTEMPLATED BY ANY CREDIT DOCUMENT (INCLUDING THE COSTS AND
EXPENSES WHICH THE COMPANY IS OBLIGATED TO PAY UNDER SECTIONS 12.3 AND 12.4 BUT
EXCLUDING, UNLESS A DEFAULT HAS OCCURRED AND IS CONTINUING, NORMAL
ADMINISTRATIVE COSTS AND EXPENSES INCIDENT TO THE PERFORMANCE OF ITS DUTIES
UNDER THE CREDIT DOCUMENTS) OR THE ENFORCEMENT OF ANY OF THE TERMS OF ANY CREDIT
DOCUMENT OR OF ANY SUCH OTHER DOCUMENTS; PROVIDED THAT NO BANK SHALL BE LIABLE
FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE PARTY TO BE INDEMNIFIED. The obligations of the Banks
under this SECTION 11.5 shall survive the termination of this Agreement.
11.6. NON-RELIANCE ON THE AGENT AND OTHER BANKS. Each Bank agrees that it
has received current financial information with respect to the Company and its
Subsidiaries and that it has, independently and without reliance on the Agent or
any other Bank and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under the Credit Documents. The Agent
shall not be required to keep itself informed as to the performance or
observance by the Company of any Credit Document or any other document referred
to or provided for therein or to inspect the Property or books of the Company or
any other Person. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the Agent under
the Credit Documents, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the affairs,
financial condition or business of the Company (or any of its Affiliates) which
may come into the possession of the Agent.
11.7. FAILURE TO ACT. Except for action expressly required of the Agent
under the Credit Documents, the Agent shall in all cases be fully justified in
failing or refusing to act under the Credit Documents unless it shall have
received further assurances to its satisfaction by the Banks of their
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indemnification obligations under SECTION 11.5 against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.
11.8. RESIGNATION OR REMOVAL OF THE AGENT. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Banks and the Company, and the Agent may be
removed at any time with or without cause by the Required Banks. Upon any such
resignation or removal, the Required Banks shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Banks and shall have accepted such appointment within 30 days after the
retiring Agent's giving of notice of resignation or the Required Banks' removal
of the retiring Agent, the retiring Agent may, on behalf of the Banks, appoint a
successor Agent. Any successor Agent shall be a bank which has an office in the
United States and a combined capital and surplus of at least $1,000,000,000 and
with its deposits insured by the FDIC. Upon the acceptance of any such
appointment, the successor Agent shall 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 under the Credit
Documents. Such successor Agent shall promptly specify its Principal Office
referred to in SECTIONS 3.1 and 5.1 by notice to the Company and the Banks.
After any retiring Agent's resignation or removal hereunder as the Agent, the
provisions of this SECTION 11 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent.
11.9. NO DUTY OR OBLIGATIONS. In their capacities as such, neither the
Syndication Agent, the Documentation Agent, the Managing Agent, nor any of the
Co-Agents shall have any duty or obligations under this Agreement or any other
Credit Document.
Section 12. MISCELLANEOUS.
12.1. WAIVER. No waiver of any Default shall be a waiver of any other
Default. No failure on the part of the Agent or any Bank to exercise and no
delay in exercising, and no course of dealing with respect to, any right, power
or privilege under any Credit Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege thereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided in the Credit Documents are
cumulative and not exclusive of any remedies provided by law or in equity.
12.2. NOTICES. All notices and other communications provided for in the
Credit Documents (including any modifications of, or waivers or consents under,
this Agreement) shall (except as otherwise expressly provided with respect to
financial information to be delivered pursuant to SECTIONS 9.1(A), (B) OR (C))
be in writing and (a) delivered against receipt therefor, (b) sent by overnight
courier (such as Federal Express), charges prepaid, (c) mailed by registered or
certified mail, return receipt requested, postage prepaid, or (d) given or made
by telegraph, telecopy (confirmed by mail), cable or other writing, in each case
addressed 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 the Company and the
Agent given in accordance with this SECTION 12.2. Financial information to be
delivered pursuant to
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SECTIONS 9.1(A), (B) OR (C) shall be directed to the intended recipient at its
"E-Mail Address" specified below its name on the signature pages hereof, or at
such other E-Mail Address as shall be designated by such party in a notice to
the Company and the Agent given in accordance with this SECTION 12.2. Except as
otherwise provided in this Agreement, all such communications shall be deemed to
have been duly given when delivered; on the Business Day following delivery to
an overnight courier; when transmitted before 5 p.m. on a Business Day by
telecopier or delivered to the telegraph or cable office (when transmitted after
5 p.m. on a Business Day, at 9 a.m. on the next Business Day); or on the second
Business Day after its deposit in the mails; PROVIDED, HOWEVER, that notices
required or permitted by SECTION 5.5 shall be effective only when actually
received by the Agent. Actual notice shall always be effective.
12.3. EXPENSES. Whether or not any Loan is ever made, the Company shall
pay or reimburse on demand each of the Banks and the Agent for paying: (a) the
reasonable fees and expenses of Locke Liddell & Sapp LLP, special counsel to the
Agent, in connection with (1) the preparation, execution and delivery of the
Credit Documents (including exhibits and schedules) and the making of the Loans
hereunder and (2) any modification, supplement or waiver of any of the terms of
any Credit Document; (b) all reasonable out-of-pocket costs and expenses of the
Banks or the Agent (including reasonable counsels' fees) in connection with any
Event of Default or the enforcement of any Credit Document; (c) all transfer,
stamp, documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of any Credit Document or any other
document referred to therein; (d) all costs, expenses, taxes, assessments and
other charges incurred in connection with any filing or registration
contemplated by any Credit Document or any document referred to therein; and (e)
reasonable expenses of due diligence and syndication, and mutually agreed
advertising and marketing costs.
12.4. INDEMNIFICATION.
(A) TO THE FULLEST EXTENT PERMITTED BY LAW, THE COMPANY SHALL INDEMNIFY
THE AGENT, EACH BANK AND EACH OTHER INDEMNIFIED PERSON FROM, AND HOLD EACH OF
THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, COSTS, EXPENSES, CLAIMS
OR DAMAGES TO WHICH ANY OF THEM MAY BECOME SUBJECT, REGARDLESS OF AND INCLUDING
LOSSES, LIABILITIES, COSTS, EXPENSES, CLAIMS AND DAMAGES ARISING FROM THE SOLE,
ORDINARY OR CONTRIBUTORY NEGLIGENCE OF THE AGENT OR THE BANKS OR ANY OTHER
INDEMNIFIED PERSON, INSOFAR AS SUCH LOSSES, LIABILITIES, COSTS, EXPENSES, CLAIMS
OR DAMAGES ARISE OUT OF OR IN CONNECTION WITH (A) ANY ACTUAL OR PROPOSED USE BY
THE COMPANY OF THE PROCEEDS OF ANY EXTENSION OF CREDIT UNDER THIS AGREEMENT; (B)
ANY BREACH BY THE COMPANY OF ANY CREDIT DOCUMENT (AS DEFINED HEREIN); (C) ANY
VIOLATION BY THE COMPANY OR ANY OF ITS SUBSIDIARIES OF ANY LEGAL REQUIREMENT,
INCLUDING, WITHOUT LIMITATION, APPLICABLE ENVIRONMENTAL LAWS; (D) ANY
ENVIRONMENTAL CLAIMS OR (E) ANY INVESTIGATION, LITIGATION OR OTHER PROCEEDING
(INCLUDING ANY THREATENED INVESTIGATION OR PROCEEDING) RELATING TO ANY OF THE
FOREGOING, AND THE COMPANY SHALL REIMBURSE EACH INDEMNIFIED
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PERSON, UPON DEMAND, FOR ANY EXPENSES (INCLUDING REASONABLE LEGAL FEES) INCURRED
IN CONNECTION WITH ANY SUCH INVESTIGATION OR PROCEEDING; BUT EXCLUDING ANY SUCH
LOSSES, LIABILITIES, CLAIMS, DAMAGES, COSTS OR EXPENSES INCURRED BY SUCH
INDEMNIFIED PERSON BY REASON OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
THE PARTY TO BE INDEMNIFIED.
(b) The obligation of the Company to provide indemnification under this
SECTION 12.4 for fees and expenses of counsel shall be limited to the reasonable
fees and expenses of one counsel in each jurisdiction representing all of the
Persons entitled to such indemnification, except to the extent that, in the
reasonable judgment of any such Indemnified Person, the existence of actual or
potential conflicts of interest make representation of all of such indemnified
Persons by the same counsel inappropriate; in such a case, the Person exercising
such judgment shall be indemnified for the reasonable fees and expenses of its
separate counsel to the extent provided in this SECTION 12.4 without giving
effect to the first clause of this sentence. Nothing in this SECTION 12.4 is
intended to limit the obligations of the Company under any other provision of
this Agreement.
12.5. AMENDMENTS, ETC. No amendment or waiver of any provision of any
Credit Document, nor any consent to any departure by the Company therefrom,
shall in any event be effective unless the same shall be agreed or consented to
by the Required Banks and the Company, as appropriate, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; PROVIDED that no amendment, waiver or consent shall,
unless in writing and signed by each Bank affected thereby, do any of the
following: (a) increase any Commitment of any of the Banks; (b) reduce the
principal of, or interest on, any Loan, fee or other sum to be paid under any
Credit Document; (c) postpone any scheduled date fixed for any payment of
principal of, or interest on, any Loan, fee or other sum to be paid under any
Credit Document; (d) change the percentage of Commitments, or of the aggregate
unpaid principal amount of any of the Loans, or the number of Banks, which shall
be required for the Banks or any of them to take any action under this Agreement
or any other Credit Document; or (e) change any provision contained in SECTIONS
2.1, 2.3, 2.7, 2.8, 5.2, 5.7, 6, 12.3 or 12.4 or this SECTION 12.5. Anything in
this SECTION 12.5 to the contrary, no amendment, waiver or consent shall be made
with respect to SECTION 11 without the consent of the Agent.
12.6. SUCCESSORS AND ASSIGNS.
(a) This Agreement and the other Credit Documents shall be binding
upon and inure to the benefit of the Company, the Agent and the Banks and their
respective successors and assigns. The Company may not assign or transfer any of
its rights or obligations under any of the Credit Documents without the prior
written consent of all of the Banks.
(b) Each Bank may sell participations to any Person in all or part
of its Loans, Note and Commitment, in which event, without limiting the
foregoing, the provisions of SECTION 6 shall inure to the benefit of each
purchaser of a participation and the PRO RATA treatment of payments, as
described in SECTION 5.2, shall be determined as if such Bank had not sold such
participation. In the event any Bank shall sell any participation, (1) the
Company, the Agent and the other Banks shall
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continue to deal solely and directly with such selling Bank in connection with
such selling Bank's rights and obligations under the Credit Documents (including
the Note held by such selling Bank); (2) such Bank shall retain the sole right
and responsibility to enforce the obligations of the Company under the Credit
Documents, including the right to approve any amendment, modification or waiver
of any provision of this Agreement or any other Credit Document other than
amendments, modifications or waivers with respect to (A) any fees payable
hereunder to the Banks and (B) the amount of principal or the rate of interest
payable on, or the dates fixed for the scheduled repayment of principal of, the
Loans and other sums to be paid to the Banks under the Credit Documents, and (3)
the Company agrees, to the fullest extent it may effectively do so under
applicable law, that, notwithstanding the first sentence of this SECTION
12.6(B), if such Bank has previously given notice of the sale of such
participation to the Company, any participant of a Bank may exercise all rights
of set-off, bankers' lien, counterclaim or similar rights with respect to such
participation as fully as if such participant were a direct holder of Loans.
(c) Each Bank may assign to one or more Banks or Eligible Assignees
all or a portion of its interests, rights and obligations under this Agreement
and the other Credit Documents (including all or a portion of its Commitment and
the same portion of the Loans at the time owing to it and of the Note held by
it); PROVIDED THAT (1) other than in the case of an assignment to a Person at
least 50% owned by the assignor Bank, or by a common parent of both, or to
another Bank, the Agent and the Company must give their respective prior written
consent, which consent will not be unreasonably withheld; (2) the aggregate
amount of the Commitment and Loans of the assigning Bank subject to each such
assignment (determined as of the date the Assignment Agreement with respect to
such assignment is delivered to the Agent) shall in no event be less than
$10,000,000 (or $1,000,000 in the case of an assignment between Banks) (except
for certain exceptions approved by the Company and the Agent or where all of a
Bank's Commitment and Loans are being assigned) and shall be in an amount that
is an integral multiple of $1,000,000 (except for certain exceptions approved by
the Company and the Agent or where all of a Bank's Commitment and Loans are
being assigned); and (3) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in its records, an
Assignment Agreement with blanks appropriately completed, together with the Note
subject to such assignment and a processing and recordation fee of $2,500 (for
which the Company shall have no liability except in the case of assignments
required by the Company pursuant to SECTION 6.1, 6.3 OR 6.6, in which case such
fee shall be paid by the Company). Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment
Agreement, which shall be at least five Business Days after the date of
execution thereof (unless otherwise agreed by the parties thereto and the
Agent), (A) the assignee thereunder shall be a party to this Agreement and, to
the extent provided in such Assignment Agreement, have the rights and
obligations of a Bank under the Credit Documents, and (B) the Bank making such
assignment shall, to the extent provided in such Assignment Agreement, be
released from its obligations under this Agreement and the other Credit
Documents (and, in the case of an Assignment Agreement covering all or the
remaining portion of an assigning Bank's rights and obligations under this
Agreement, such Bank shall cease to be a party hereto) but shall be entitled to
the benefit of this Agreement and the other Credit Documents for matters
occurring during the time it was a Bank under this Agreement.
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(d) By executing and delivering an Assignment Agreement, the
assigning Bank and the assignee thereunder confirm to and agree with each other
and the other parties to this Agreement as follows: (1) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such
assigning Bank makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with any Credit Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Credit Document; (2)
such assigning Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company or the
performance or observance by the Company of any of its obligations under any
Credit Document; (3) such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements of the Company
previously delivered by the Company in accordance herewith and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment Agreement; (4) such assignee
will, independently and without reliance upon the Agent, such assigning Bank or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Documents; (5) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Documents as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably incidental thereto,
and (6) such assignee agrees that it will perform in accordance with their terms
all obligations that by the terms of the Credit Documents are required to be
performed by it as a Bank.
(e) The Agent shall maintain at its office a copy of each Assignment
Agreement delivered to it and a record of the names and addresses of the Banks
and the Commitment of, and the principal amount of the Loans owing to, each Bank
from time to time. The entries in such record shall be conclusive, in the
absence of manifest error, and the Company, the Agent and the Banks may treat
each Person the name of which is recorded therein as a Bank hereunder for all
purposes of the Credit Documents. Such records shall be available for inspection
by the Company or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(f) Upon its receipt of an Assignment Agreement executed by an
assigning Bank and the assignee thereunder together with the Note subject to
such assignment, any required consent to such assignment and the fee payable in
respect thereto, the Agent shall, if such Assignment Agreement has been
completed with blanks appropriately filled, (1) accept such Assignment
Agreement; (2) record the information contained therein in its records, and (3)
give prompt notice thereof to the Company. Contemporaneously with the receipt by
the Agent of an Assignment Agreement, the Company, at its own expense, shall
execute and deliver to the Agent in exchange for the surrendered Note a new Note
payable to the order of such assignee in an amount equal to the Commitment
and/or Loans assumed by it pursuant to such Assignment Agreement and, if the
assigning Bank has retained any Commitment and/or Loans hereunder, a new Note
payable to the order of the assignor Bank in an amount equal to the Commitment
and/or Loans retained by it. Such new Notes shall be in an aggregate face amount
equal to the face amount of each surrendered Note, shall be dated the effective
date of such Assignment Agreement and shall otherwise be in
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substantially the form of the surrendered Note. Thereafter, the surrendered Note
shall be marked canceled and returned to the Company.
(g) Any Bank may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this SECTION 12.6, disclose
to the assignee or participant or proposed assignee or participant any
information relating to the Company furnished to such Bank by or on behalf of
the Company.
(h) Notwithstanding anything herein to the contrary, each Bank may
pledge and assign all or any portion of its rights and interests under the
Credit Documents to any Federal Reserve Bank. No such assignment shall release
the assigning Bank from its obligations hereunder.
(i) All transfers of any interest in any Note hereunder shall be in
compliance with all federal and state securities laws, if applicable.
Notwithstanding the foregoing sentence, however, the parties to this Agreement
do not intend that any transfer under this SECTION 12.6 be construed as a
"purchase" or "sale" of a "security" within the meaning of any applicable
federal or state securities laws.
12.7. SURVIVAL; TERMINATION; REINSTATEMENT.
(a) In addition to the other provisions of the Credit Documents
expressly stated to survive the termination of this Agreement, the obligations
of the Company under SECTIONS 6, 12.3 and 12.4 and the last sentence of this
SECTION 12.7 and the obligations of the Banks under SECTIONS 11.5, 12.8 and
12.12 shall survive the termination of this Agreement.
(b) This Agreement shall terminate upon the last to occur of (i) the
full and final payment of all Notes, (ii) the termination of all Commitments and
(iii) the payment of all non-contingent amounts due under the Credit Documents.
(c) If at any time all or any part of any payment previously applied
by the Agent or any Bank to any Loan or other sum hereunder is or must be
returned by or recovered from the Agent or such Bank for any reason (including
the order of any bankruptcy court), to the extent permitted by law, the Credit
Documents shall automatically be reinstated to the same effect as if such prior
application had not been made, and the Company shall indemnify the Agent or such
Bank against, and save and hold the Agent and such Bank harmless from, any
required return by or recovery from the Agent or such Bank of any such payment
because of its being deemed preferential under any applicable Legal Requirement
or for any other reason.
12.8. LIMITATION OF INTEREST. The parties to the Credit Documents intend
to strictly comply with all applicable laws, including applicable usury laws.
Accordingly, the provisions of this SECTION 12.8 shall govern and control over
every other provision of any Credit Document which conflicts or is inconsistent
with this SECTION 12.8, even if such provision declares that it controls. As
used in this SECTION 12.8, the term "interest" includes the aggregate of all
charges, fees, benefits or other compensation which constitute interest under
applicable law; PROVIDED that, to the maximum extent permitted by applicable
law, (a) any non-principal payment shall be characterized as an expense or as
compensation for something other than the use, forbearance or detention of money
and
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not as interest and (b) all interest at any time contracted for, taken,
reserved, retained, charged or received shall be amortized, prorated, allocated
and spread, in equal parts, during the full term of the Loans and the
Commitments. In no event shall the Company or any other Person be obligated to
pay, or the Agent or any Bank have any right or privilege to reserve, take,
receive or retain, any interest in excess of the maximum amount of nonusurious
interest permitted under applicable law. None of the terms and provisions
contained in any Credit Document which directly or indirectly relate to interest
shall ever be construed without reference to this SECTION 12.8, or be construed
to create a contract to pay for the use, forbearance or detention of money at an
interest rate in excess of the Highest Lawful Rate. On each day, if any, that
the interest rate (the "STATED RATE") called for under any Credit Document
exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall
automatically be fixed by operation of this sentence at the Highest Lawful Rate
for that day, and shall remain fixed at the Highest Lawful Rate for each day
thereafter until the total amount of interest accrued equals the total amount of
interest which would have accrued if there were no such ceiling rate as imposed
by this sentence. Thereafter, interest shall accrue at the Stated Rate unless
and until the Stated Rate again exceeds the Highest Lawful Rate, whereupon the
provisions of the immediately preceding sentence shall again automatically
operate to limit the interest accrual rate. The daily interest rates to be used
in calculating interest at the Highest Lawful Rate shall be determined by
dividing the applicable Highest Lawful Rate per annum by the number of days in
the calendar year for which such calculation is being made. If the term of any
of the Notes is shortened by reason of acceleration of maturity as a result of
any Default or by any other cause, or by reason of any required or permitted
prepayment, and if for that (or any other) reason the Agent or any Bank at any
time, including the stated maturity, is owed or receives, reserves or takes
(and/or has received, reserved or taken) interest in excess of interest
calculated at the Highest Lawful Rate, then and in any such event all of any
such excess interest shall be canceled automatically as of the date of such
acceleration, prepayment or other event which produces the excess, and, if such
excess interest has been paid to the Agent or such Bank, it shall be credited
PRO TANTO against the then-outstanding principal balance of the Company's
obligations to the Agent or such Bank, effective as of the date or dates when
the event occurs which causes it to be excess interest, until such excess is
exhausted or all of such principal has been fully paid and satisfied, whichever
occurs first, and any remaining balance of such excess shall be promptly
refunded to its payor.
12.9. CAPTIONS. Captions and section headings appearing in the Credit
Documents are included solely for convenience and shall not be considered in
construing the Credit Documents.
12.10. COUNTERPARTS. Each Credit Document may be executed in any number of
identical counterparts, and by the parties on separate counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts together shall constitute but one
and the same agreement.
12.11. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(A) EXCEPT TO THE EXTENT OTHERWISE SPECIFIED IN THE CREDIT DOCUMENTS, EACH
CREDIT DOCUMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF TEXAS (TO THE EXTENT PERMITTED BY LAW, OTHER THAN ITS CONFLICT
OF LAW RULES) AND
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<PAGE>
THE FEDERAL LAWS OF THE UNITED STATES OF AMERICA. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF TEXAS, HOUSTON DIVISION (COLLECTIVELY, THE "DESIGNATED COURTS"), AND
THE COMPANY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
DESIGNATED COURTS. THE COMPANY HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND
EMPOWERS DAVID L. HICKS, WITH OFFICES ON THE DATE HEREOF AT 1616 SOUTH VOSS
ROAD, HOUSTON, TEXAS 77057, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE,
ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY,
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONSES, NOTICES AND DOCUMENTS WHICH MAY
BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE,
APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH OR THE COMPANY
DESIRES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT, THE COMPANY AGREES TO
DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN HOUSTON, TEXAS ON THE TERMS AND
FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT UNDER THIS
AGREEMENT. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE DESIGNATED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE COMPANY AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE
TO BECOME EFFECTIVE TEN DAYS AFTER SUCH MAILING. NOTHING IN THIS AGREEMENT SHALL
AFFECT THE RIGHT OF THE AGENT, ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO THE EXTENT PERMITTED BY LAW
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE TO PROCEED AGAINST THE COMPANY IN ANY
OTHER JURISDICTION.
(B) TO THE EXTENT PERMITTED BY LAW, EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE IN ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN
THE DESIGNATED COURTS AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO
PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(C) EACH OF THE COMPANY, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THE CREDIT AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.
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12.12. CONFIDENTIALITY. Each Bank agrees to exercise its best efforts to
keep any information delivered or made available by the Company to it (including
any information obtained pursuant to SECTION 9.1) which is clearly indicated to
be confidential information, confidential from anyone other than Persons
employed or retained by such Bank who are or are expected to become engaged in
evaluating, approving, structuring or administering the Loans; PROVIDED that
nothing herein shall prevent any Bank from disclosing such information (a) to
any other Bank, (b) pursuant to subpoena or upon the order of any court or
administrative agency, (c) upon the request or demand of any regulatory agency
or authority having jurisdiction over such Bank, (d) which has been publicly
disclosed, (e) to the extent reasonably required in connection with any
litigation to which the Agent, any Bank, or their respective Affiliates may be a
party, (f) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Credit Document, (g) to such Bank's
legal counsel and independent auditors and (h) to any actual or proposed
participant or assignee of all or part of its rights hereunder which has agreed
in writing to be bound by the provisions of this SECTION 12.12. Each Bank will
promptly notify the Company of any information that it is required or requested
to deliver pursuant to CLAUSE (B) OR (C) of this SECTION 12.12 and, if the
Company is not a party to any such litigation, CLAUSE (E) of this SECTION 12.12.
12.13. ENTIRE AGREEMENT. This Agreement and the other Credit Documents
embody the entire agreement among the parties with respect to their subject
matter and supersede all prior proposals, agreements and understandings related
to the subject matter of this Agreement and the other Credit Documents.
12.14. CONSTRUCTION. The parties agree that this Agreement and the other
Credit Documents were negotiated agreements and accordingly no presumption shall
attach based on the identity of the drafting party.
12.15. SEVERABILITY. Whenever possible, each provision of the Credit
Documents shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of any Credit Document shall be invalid,
illegal or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions of such Credit Document
shall not be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed and delivered.
SANTA FE SNYDER CORPORATION,
a Delaware corporation
By: _____________________________________
Mark A. Jackson, Executive Vice
President and Chief Financial Officer
Address for Notices:
Santa Fe Snyder Corporation
1616 South Voss Road, Suite 1000
Houston, Texas 77057
Telephone: (713) 507-5000
Telecopy: (713) 507-5341
Attention: Treasurer
<PAGE>
COMMITMENT: CHASE BANK OF TEXAS, NATIONAL
$16,875,000.00 ASSOCIATION, Individually and as
Administrative Agent
By: _____________________________________
Russell A. Johnson
Vice President
Address for Notices:
Domestic and Eurodollar
Lending Offices: Chase Bank of Texas, National Association
1 Chase Manhattan Plaza
Chase Bank of Texas, National New York, NY 10081
Association Telephone: (212) 552-7446
600 Travis Street, 20th Floor Telecopy: (212) 552-5777
Houston, Texas 77002-8086 E-Mail Address: [email protected]
Attention: Peter Licalzi Attn.: Debbie Rockower
Telephone: (713) 216-8869
Telecopy: (713) 216-4117
E-Mail Address: [email protected]
WITH A COPY TO:
Chase Bank of Texas, National Association
600 Travis, 20th Floor
Houston, Texas 77002-8086
Attn.: Peter Licalzi
Telephone: (713) 216-8869
Telecopy: (713) 216-4117
E-Mail Address: ____________________
Attn.: Peter Licalzi
<PAGE>
COMMITMENT: ABN AMRO BANK N.V., INDIVIDUALLY AND AS A
$13,500,000.00 CO-AGENT
By: _____________________________________
Robert J. Cunningham
Group Vice President
By: _____________________________________
Jamie A. Conn
Vice President
ADDRESS FOR ALL REQUIRED
FINANCIAL INFORMATION:
ABN AMRO Bank N.V.
208 South LaSalle Street, Suite 1500
Chicago, Illinois 60604
Attention: Credit Administration
Telephone: (312) 992-5123
Fax: (312) 992-5111
E-Mail Address: _____________________
WITH A COPY TO:
ABN AMRO Bank N.V.
Three Riverway, Suite 1700
Houston, Texas 77056
Attention: Robert J. Cunningham
Telephone: (713) 964-3351
Fax: (713) 961-1699
E-Mail Address:[email protected]
LOAN ADMINISTRATION CONTACTS:
ABN AMRO Bank N.V.
208 South LaSalle Street, Suite 1500
Chicago, Illinois 60604
Attention: Loan Administration
Telephone: (312) 992-5152
Fax: (312) 992-5157
E-Mail Address: _____________________
<PAGE>
LETTER OF CREDIT CONTACTS:
ABN AMRO Bank N.V.
200 West Monroe Street, Suite 1100
Chicago, Illinois 60606-5002
Attention: Trade Services Department
Telephone: (888) 226-5113
Fax: (888) 226-5119
E-Mail Address:
<PAGE>
COMMITMENT: BANK ONE, TEXAS, N.A., Individually and as
$16,875,000.00 Managing Agent
By: _____________________________________
Charles Kingswell-Smith
Senior Vice President
CREDIT CONTACT:
Domestic and Eurodollar 910 Travis Street
Lending Offices: Houston, Texas 77002-4330
Attn.: Mr. Charles Kingswell-Smith
Bank One, Texas, N.A. Telephone: (713) 751-7803
910 Travis Street Telecopy: (713) 751-3544
Houston, Texas 77002 E-Mail Address: _____________________
ADMINISTRATIVE CONTACTS -
BORROWINGS, PAYMENTS, INTEREST, ETC.:
Tax Withholding Information: 910 Travis Street
Houston, Texas 77002-4225
Tax ID No.: Attn.: Ms. Karen Smith
Telephone: (713) 751-3872
Telecopy: (713) 751-3590
REMITTANCE INSTRUCTIONS:
Bank One, Texas, N.A.
ABA Transmit No.: 111000614
Name of Account: Loan Services
Account No.: 1065151010
Attn.: ___________________
Re: Santa Fe Snyder Corporation
<PAGE>
COMMITMENT: BANK OF AMERICA NATIONAL TRUST AND
$16,875,000.00 SAVINGS ASSOCIATION, Individually and as
Syndication Agent
By: _____________________________________
Ronald E. McKaig
Vice President
Domestic and Eurodollar CREDIT CONTACT:
Lending Offices: Bank of America National Trust and
Savings Association
Bank of America National Trust and 333 Clay Street, Suite 4550
Savings Association Houston, Texas 77002
231 South LaSalle Street Attn.: Ronald E. McKaig
Chicago, IL 60697 Telephone: (713) 651-4881
Telecopy: (713) 651-4888
E-Mail Address: ______________________
ADMINISTRATIVE CONTACTS -
BORROWINGS, PAYMENTS, INTEREST, ETC.:
1850 Gateway Boulevard
Concord, CA 94520
Attn.: Claudette Strickland
Telephone: (925) 675-7483
Telecopy: (925) 675-7531
COMPETITIVE BID CONTACT:
1455 Market Street
San Francisco, CA 94103
Attn.: Carolyn Alberts
Telephone: (415) 622-2020
Telecopy: (415) 622-2237
PAYMENT INSTRUCTIONS:
Bank of America National Trust and
Savings Association
ABA Routing No.: 121000358
Acct. No.: 1233-0-14364
<PAGE>
COMMITMENT: WELLS FARGO BANK (TEXAS), N.A.,
$16,875,000.00 Individually and as Documentation Agent
By: _____________________________________
Ann M. Rhoads
Vice President
ADDRESS FOR BUSINESS MATTERS:
Domestic and Eurodollar 1000 Louisiana, 3rd Floor
Lending Offices: Houston, Texas 77002
Attention: Ann Rhoads
Wells Fargo Bank Telephone: (713) 319-1367
1000 Louisiana, 3rd Floor Telecopy: (713) 739-1087
Houston, Texas 77002 E-Mail Address: [email protected]
ADDRESS FOR ADMINISTRATIVE MATTERS:
1000 Louisiana, 3rd Floor
Houston, Texas 77002
Attention: Maria Valdivia
Telephone: (713) 319-1378
Telecopy: (713) 739-1087
E-Mail Address:
201 Third Street, 8th Floor
San Francisco, CA 94103
Attn.: Oscar Enriquez
Telephone: (415) 477-5425
Telecopy: (415) 979-0675
REMITTANCE INSTRUCTIONS:
Wells Fargo Bank
ABA #: 121000248
Name of Account: Santa Fe Snyder
Additional Info.: Loan Accounting Dept.-
Syndication
<PAGE>
COMMITMENT: BANK OF MONTREAL
$7,500,000.00
By: _____________________________________
J. B. Whitmore
Director
Address for Notices:
Domestic and Eurodollar 700 Louisiana, Suite 4400
Lending Offices: Houston, Texas 77002
Attention: Mr. James Whitmore
115 S. LaSalle Street, 11th Floor Telephone: 713/223-4400
Chicago, Illinois 60603 Telecopy: 713/223-4007
E-Mail Address: _____________________
ADMINISTRATIVE MATTERS:
115 S. LaSalle Street, 11th Floor
Chicago, Illinois 60603
Attn.: Mr. C. Reynolds
Telephone: (312) 750-3771
Telecopy: (312) 750-6061
PAYMENT INSTRUCTIONS:
Harris Trust & Savings Bank
ABA #071000288
For Credit To: Bank of Montreal, Chicago
Branch
Attn.: C. Reynolds
Reference: Santa Fe Snyder Corporation
<PAGE>
COMMITMENT: THE INDUSTRIAL BANK OF JAPAN, LIMITED,
$4,500,000.00 NEW YORK BRANCH
By: _____________________________________
Kazutoshi Kuwahara
Executive Vice President, HOUSTON
OFFICE
Address for Notices:
Domestic and Eurodollar Three Allen Center, Suite 4850
Lending Offices: 333 Clay Street
Houston, Texas 77002
The Industrial Bank of Japan, Attn.: Mr. Dan Davis, Vice President
Limited, New York Branch Telephone: (713) 651-9444 ext. 103
1251 Avenue of the Americas Telecopy: (713) 651-9209
New York, NY 10020-1104
WITH A COPY TO:
The Industrial Bank of Japan, Limited,
New York Branch
1251 Avenue of the Americas
New York, NY 10020-1104
Attn.: Mr. Robert Cumming, Credit
Administration
Telephone: (212) 282-4067
Telecopy: (212) 282-4480/(212) 282-4250
PAYMENT INSTRUCTIONS:
(VIA FED)
The Industrial Bank of Japan, Limited,
New York Branch
ABA#: 026008345
Reference: SANTA FE SYNDER CORPORATION
<PAGE>
COMMITMENT: DEUTSCHE BANK AG, NEW YORK BRANCH
$7,500,000.00 A/O CAYMAN ISLANDS BRANCH
By: _____________________________________
Stephan A. Wiedemann
Director
By: _____________________________________
Alexander Karow
Associate
Address for Notices:
DOMESTIC LENDING OFFICE:
31 W. 52nd Street
Deutsche Bank AG New York, NY 10019
New York Branch Attn.: Stephen Wiedemann, Director
31 W. 52nd Street Telephone: (212) 469-8663
New York, NY 10019 Telecopy: (212) 469-8212
Telecopy: (212) 469-4138/4139
WITH A COPY TO:
EURODOLLAR LENDING OFFICE:
Deutsche Bank AG
Deutsche Bank AG New York Branch
Cayman Island Branch 31 W. 52nd Street
c/o New York Branch New York, NY 10019
31 W. 52nd Street Attn.: Ms. Donna Quilty
New York, NY 10019 Telephone: (212) 469-8196
Telecopy: (212) 469-4138/4139 Telecopy: (212) 469-8173
OPERATION CONTACT:
Deutsche Bank AG
New York Branch
31 W. 52nd Street
New York, NY 10019
Attn.: Joe Gyurindak
Telephone: (212) 469-4107
Telecopy: (212) 469-4138/4139
PAYMENT INSTRUCTIONS:
Deutsche Bank AG
New York Branch
ABA#: 026003780
<PAGE>
Reference: Santa Fe Snyder
<PAGE>
COMMITMENT: CREDIT LYONNAIS NEW YORK BRANCH,
$13,500,000.00 Individually and as a Co-Agent
By: _____________________________________
Philippe Soustra
Senior Vice President
CREDIT CONTACT:
Domestic and Eurodollar 1000 Louisiana, Suite 5360
Lending Offices: Houston, Texas 77002
Attn.: Jeffrey Baker
Credit Lyonnais New York Branch Telephone: (713) 753-8711
1301 Avenue of the Americas Telecopy: (713) 751-0307 or (713) 751-0421
New York, NY 10019 E-Mail Address: _____________________
BACKUP CONTACT:
1000 Louisiana, Suite 5360
Houston, Texas 77002
Attn.: John Falbo
Telephone: (713) 753-8704
Telecopy: (713) 751-0307 or (713) 751-0421
ADMINISTRATIVE CONTACTS -
BORROWINGS, PAYMENTS, INTEREST, ETC.:
1000 Louisiana, Suite 5360
Houston, Texas 77002
Attn.: Bernadette Archie
Telephone: (713) 753-8723
Telecopy: (713) 759-9766 or (713) 751-0421
PAYMENT INSTRUCTIONS:
Credit Lyonnais New York
ABA No.: 026008073
Account No.: 01-88179-3701-00-179
Ref.: Santa Fe Snyder
<PAGE>
COMMITMENT: THE BANK OF NEW YORK
$7,500,000.00
By: _____________________________________
Peter W. Keller
Vice President
CREDIT CONTACT:
Domestic and Eurodollar One Wall Street, 19th Floor
Lending Offices: New York, NY 10286
Attn.: Peter W. Keller, Vice President
The Bank of New York Telephone: (212) 635-7834
One Wall Street, 19th Floor Telecopy: (713) 635-7552
Energy Division E-Mail Address: _____________________
New York, NY 10286
ADMINISTRATIVE CONTACTS -
BORROWINGS, PAYMENTS, INTEREST, ETC.:
Tax Withholding Information: One Wall Street, 19th Floor
New York, NY 10286
Tax ID No.: 13-5160382 Attn.: Lisa Williams
Telephone: (212) 635-7535
Telecopy: (212) 635-7552
REMITTANCE INSTRUCTIONS:
The Bank of New York
ABA Transmit No.: 021000018
Name of Account: Commercial Loan Dept.
GLA No.: 111556
Ref.: Account Name
<PAGE>
COMMITMENT: THE FUJI BANK, LIMITED
$7,500,000.00
By: _____________________________________
Yoshiaki Inoue
Vice President & Manager
CREDIT CONTACT:
Domestic and Eurodollar The Fuji Bank, Limited
Lending Offices: Two World Trade Center, 79th Floor
New York, NY 10048
The Fuji Bank, Limited Attn.: Andrew Chen, Assistant Treasurer
- -New York Branch Telephone: (212) 898-2629
Two World Trade Center, 79th Floor Telecopy: (212) 488-2172
New York, NY 10048 E-Mail Address:
Attn.: Project Finance Division
for the Americas
BACKUP CONTACT:
The Fuji Bank, Limited
Two World Trade Center, 79th Floor
New York, NY 10048
Attn.: Zahid Qureshi, Assistant Vice
President
Telephone: (212) 898-2633
Telecopy: (212) 488-2172
ADMINISTRATIVE CONTACTS -
BORROWINGS, PAYMENTS, INTEREST, ETC.:
The Fuji Bank, Limited
Two World Trade Center, 79th Floor
New York, NY 10048
Attn.: Sally Yaung
Telephone: (212) 898-2096
Telecopy: (212) 488-8216 or (212) 321-9407
BACKUP CONTACT:
The Fuji Bank, Limited
Two World Trade Center, 79th Floor
New York, NY 10048
Attn.: Tina Catapano
Telephone: (212) 898-2099
Telecopy: (212) 488-8216 or (212) 321-9407
<PAGE>
PAYMENT INSTRUCTIONS:
The Fuji Bank, Limited - New York Branch
ABA Transmit No.: 026009700
Account No.: 515011
Ref.: Santa Fe Snyder
Attn.: LAD
<PAGE>
COMMITMENT: SALOMON BROTHERS HOLDING
$13,500,000.00 COMPANY INC., Individually and as a Co-Agent
By: _____________________________________
Timothy L. Freeman
Attorney-in-Fact
Domestic and Eurodollar CREDIT CONTACT:
Lending Offices: 787 W. 5th Street, 29th Floor
Los Angeles, CA 90071
__________________________ Attn.: Sara Ahmed, Assistant Vice President
__________________________ Telephone: (213) 239-1758
__________________________ Telecopy: (213) 624-3743
E-Mail Address: _____________________
BACK-UP CREDIT CONTACT:
787 W. 5th Street, 29th Floor
Los Angeles, CA 90071
Telephone: (213) 239-1982
Telecopy: (213) 624-3743
Attn.: Michael Leyland
ADMINISTRATIVE CONTACTS -
BORROWINGS, PAYMENTS, INTEREST, ETC.:
333 West 34th Street, 4th Floor
New York, NY 10001
Attn.: Michael Braithwaite
Telephone: (212) 615-7714
Telecopy: (212) 615-7715
PAYMENT INSTRUCTIONS:
Chase Manhattan Bank
New York, NY
ABA Transmit No.: 021-000-021
Account Name: Salomon Brothers Holding Co.,
Inc.
Account No.: 066 296 722
Attn.: Mike Braithwaite
Re: Santa Fe Snyder, Bank Loan Dept.
<PAGE>
COMMITMENT: THE BANK OF NOVA SCOTIA, as a Bank and
$7,500,000.00 as Co-Agent
By: _____________________________________
F.C.H. Ashby
Senior Manager Loan Operations
ADDRESS FOR NOTICES:
Domestic and Eurodollar 600 Peachtree Street N.E., Suite 2700
Lending Offices: Atlanta, Georgia 30308
Attn.: Phyllis Walker
__________________________ Telephone: (404) 877-1552
__________________________ Telecopy: (404) 888-8998
__________________________ E-Mail Address: _____________________
WITH FURTHER NOTICES TO:
1100 Louisiana, Suite 3000
Houston, Texas 77002
Attn.: Mark Ammerman
Telephone: (713) 759-3442
Telecopy: (713) 759-2425
E-Mail Address: _______________________
<PAGE>
PRICING SCHEDULE
EXHIBITS:
A - Form of Note
B - Form of Subsidiary Guarantee
C - Request for Extension of Credit
D - Form of Assignment Agreement
E - Form of Rate Designation Notice
SCHEDULES:
I - Restricted and Unrestricted Subsidiaries
II - Opinion of Andrews & Kurth L.L.P.
III - Opinion of David L. Hicks
IV - Subordination Provisions
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 21,700
<SECURITIES> 29,200
<RECEIVABLES> 75,200
<ALLOWANCES> 2,100
<INVENTORY> 22,800
<CURRENT-ASSETS> 145,000
<PP&E> 2,858,000
<DEPRECIATION> 1,537,000
<TOTAL-ASSETS> 1,518,100
<CURRENT-LIABILITIES> 155,200
<BONDS> 0
0
0
<COMMON> 1,700
<OTHER-SE> 596,300
<TOTAL-LIABILITY-AND-EQUITY> 1,518,100
<SALES> 179,000
<TOTAL-REVENUES> 180,600
<CGS> 391,800
<TOTAL-COSTS> 391,800
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,900
<INCOME-PRETAX> (225,500)
<INCOME-TAX> 69,600
<INCOME-CONTINUING> (155,900)
<DISCONTINUED> 0
<EXTRAORDINARY> (4,200)
<CHANGES> 0
<NET-INCOME> (160,100)
<EPS-BASIC> (1.29)
<EPS-DILUTED> (1.29)
</TABLE>
