$250,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
among
BELCO OIL & GAS CORP.,
as Borrower
The Several Lenders
from Time to Time Parties Hereto
BANKERS TRUST COMPANY,
as Syndication Agent
BANK OF AMERICA,
as Documentation Agent
FLEET NATIONAL BANK,
as Collateral Agent
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of September 23, 1997, as Amended and Restated as of June 30, 2000
<PAGE>
CREDIT AGREEMENT, dated as of September 3, 1997, as amended and restated as
of June 30, 2000, among BELCO OIL & GAS CORP., a Nevada corporation (the
"Borrower"), the several banks, financial institutions and other entities from
time to time parties to this Agreement (the "Lenders"), BANK OF AMERICA, N.A.,
as documentation agent (in such capacity, the "Documentation Agent"), BANKERS
TRUST COMPANY, as syndication agent (in such capacity, the "Syndication Agent"),
FLEET NATIONAL BANK, as collateral agent (in such capacity, the "Collateral
Agent") and THE CHASE MANHATTAN BANK, as administrative agent (in such capacity,
the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower entered into a Credit Agreement, dated as of
September 23, 1997 (the "Existing Credit Agreement"), with The Chase Manhattan
Bank, as administrative agent, and the financial institutions parties thereto as
lenders;
WHEREAS, the parties hereto have agreed to amend and restate the Existing
Credit Agreement as provided in this Agreement, which Agreement shall become
effective upon the satisfaction of the conditions precedent set forth in Section
6.1 hereof; and
WHEREAS, it is the intent of the parties hereto that this Agreement not
constitute a novation of the obligations and liabilities existing under the
Existing Credit Agreement or evidence repayment of any of such obligations and
liabilities and that this Agreement amend and restate in its entirety the
Existing Credit Agreement and re-evidence the obligations of the Borrower
outstanding thereunder;
NOW THEREFORE, in consideration of the above premises and the mutual
covenants hereinafter set forth, the parties hereto hereby agree that on the
Restatement Effective Date (as defined below) the Existing Credit Agreement
shall be amended and restated in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary, to the
next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on such
day, (b) the Base CD Rate in effect on such day plus 1% and (c) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean the rate of interest per annum publicly announced from
time to time by Chase as its prime rate in effect at its principal office in New
York City (the Prime Rate not being intended to be the lowest rate of interest
charged by Chase in connection with extensions of credit to debtors); "Base CD
Rate" shall mean the sum of (a) the product of (i) the Three-Month Secondary CD
Rate and (ii) a fraction, the numerator of which is one and the denominator of
which is one minus the C/D Reserve Percentage and (b) the C/D Assessment Rate;
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on such day
or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 A.M., New York City time, on
such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it; and
<PAGE>
"Federal Funds Effective 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 on the
next 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
Administrative Agent from three federal funds brokers of recognized standing
selected by it. Any change in the ABR due to a change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such change in
the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective
Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is based upon
the ABR.
"Administrative Agent": as defined in the preamble to this Agreement.
"Affiliate": as to any Person, any other Person (other than a Subsidiary)
which, directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition, "control" of
a Person means the power, directly or indirectly, either to (a) vote 10% or more
of the securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise; provided that no Person shall be deemed to be an Affiliate of a
Person solely by virtue of being a Director of such Person.
"Agents": the collective reference to the Syndication Agent, the
Documentation Agent, the Collateral Agent and the Administrative Agent.
"Aggregate Revolving Credit Exposure": as to any Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all Loans made
by such Lender then outstanding and (b) such Lender's Commitment Percentage of
the Letter of Credit Outstandings at such time.
"Agreement": this Amended and Restated Credit Agreement, as further
amended, supplemented or otherwise modified from time to time.
"Applicable Margin": for any day with respect to any Type of Loan, the
applicable per annum rate set forth below in the column for such Type of Loan
and opposite the Borrowing Base Usage in effect on such day:
<TABLE>
<CAPTION>
Eurodollar ABR
Borrowing Base Usage Margin Margin
<S> <C> <C>
Less than or equal to 25% 1.125% 0.000%
Greater than 25% and less than or equal to 50% 1.250% 0.000%
Greater than 50% and less than or equal to 75% 1.375% 0.000%
Greater than 75% and less than or equal to 90% 1.500% 0.125%
Greater than 90% 1.625% 0.250%
</TABLE>
<PAGE>
As used herein, "Borrowing Base Usage" on any day means the percentage
equivalent of the ratio of (i) the sum of the aggregate principal amount of the
Loans then outstanding and Letter of Credit Outstandings on such day to (ii) the
Borrowing Base in effect on such day.
"Assignee": as defined in subsection 11.6(c).
"Assignment and Acceptance": as defined in subsection 11.6(c).
"Available Commitment": as to any Lender at any time, an amount equal to
the excess, if any, of (a) the amount of such Lender's Revolving Credit
Commitment over (b) such Lender's Aggregate Revolving Credit Exposure.
"Board": the Board of Governors of the Federal Reserve System of the United
States.
"Borrower": as defined in the recitals to this Agreement.
"Borrower Redetermination Notice": a notice from the Borrower to the
Administrative Agent requesting that the Administrative Agent redetermine the
Borrowing Base, which notice may be sent by the Borrower at any time, provided
no more than two such notices may be delivered by the Borrower during any
consecutive 12 month period.
"Borrowing Base": at any time of determination, the amount then in effect
as determined in accordance with subsection 4.9; provided, however, that from
the date hereof until such time as the Borrowing Base is so redetermined in
accordance with subsection 4.9, the Borrowing Base shall be $200,000,000.
"Borrowing Base Availability": as to any Lender at any time, an amount
equal to the excess, if any, of (a) such Lender's Commitment Percentage of the
Borrowing Base in effect at such time over (b) such Lender's Aggregate Revolving
Credit Exposure.
"Borrowing Base Deficiency": as defined in subsection 4.10.
"Borrowing Base Period": (a) initially, the period commencing on the
Restatement Effective Date and ending on the next succeeding Re-determination
Date and (b) thereafter, each period commencing on the last day of the
immediately preceding Borrowing Base Period and ending on the next succeeding
Re-determination Date.
"Borrowing Base Usage": as defined under the definition of Applicable
Margin.
"Borrowing Date": any Business Day specified in a notice pursuant to
subsection 2.2 or 3.2 as a date on which the Borrower requests the Lenders to
make Loans or the Issuing Lender to issue a Letter of Credit hereunder.
"Business Day": any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in Dollar deposits in the London interbank market.
"Capital Lease": any lease of property, real or personal, the obligations
of the lessee in respect of which are required in accordance with GAAP to be
capitalized on a balance sheet of the lessee.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests
<PAGE>
in a Person (other than a corporation) and any and all warrants, rights or
options to purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of one year or less from
the date of acquisition issued or fully guaranteed or insured by the United
States Government or any agency thereof, (b) certificates of deposit and
eurodollar time deposits with maturities of one year or less from the date of
acquisition and overnight bank deposits of any Lender or of any commercial bank
(i) having capital and surplus in excess of $500,000,000 or (ii) which has a
short-term commercial paper rating which satisfies the requirements set forth in
clause (d) below, (c) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition, having a term
of not more than 30 days with respect to securities issued, fully guaranteed or
insured by the United States Government or any agency thereof, (d) commercial
paper of a domestic issuer rated at least A-2 by Standard and Poor's Ratings
Group ("S&P") or P-2 by Moody's Investors Service, Inc. ("Moody's"), (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or A by
Moody's, (f) securities with maturities of one year or less from the date of
acquisition backed by standby letters of credit issued by any Lender or any
commercial bank satisfying the requirements of clause (b) of this definition or
(g) shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition.
"C/D Assessment Rate": for any day as applied to any ABR Loan, the annual
assessment rate in effect on such day which is payable by a member of the Bank
Insurance Fund maintained by the Federal Deposit Insurance Corporation (the
"FDIC") classified as well-capitalized and within supervisory subgroup "B" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.4 (or any successor provision) to the FDIC (or any successor)
for the FDIC's (or such successor's) insuring time deposits at offices of such
institution in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR Loan, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement for a
Depositary Institution (as defined in Regulation D of the Board as in effect
from time to time) in respect of new non-personal time deposits in Dollars
having a maturity of 30 days or more.
"Change of Control": the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the assets of the Borrower and its Subsidiaries
taken as a whole to any "Person" or group of related Persons (a "Group") (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"));
(ii) the consummation of any transaction (including, without limitation,
any purchase, sale, acquisition, disposition, merger or consolidation) the
result of which is that any "person" (as defined above) or Group, other than one
or more Designated Persons, becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act) of (a) more than
40% of the aggregate voting power of all classes of Capital Stock of the
Borrower having the right to elect directors under ordinary circumstances at a
time when the Designated Persons in the aggregate do not beneficially own more
than 50% of the aggregate voting power of all classes of Capital Stock of the
Borrower, or (b) 50% or more of the aggregate
<PAGE>
voting power of all classes of Capital Stock of the Borrower having the right to
elect directors under ordinary circumstances, at any time;
(iii) the Designated Persons shall cease to be the beneficial owners of an
aggregate of at least 20% of the aggregate voting power of all classes of
Capital Stock of the Borrower having the right to elect directors under ordinary
circumstances;
(iv) the adoption of a plan relating to the liquidation or dissolution of
the Borrower; and
(v) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with any
new directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Borrower was approved by a vote of a
majority of the directors of the Borrower 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 then in office.
"Chase": The Chase Manhattan Bank.
"Coda": Coda Energy, Inc., a Delaware corporation.
"Coda Indenture": that certain Indenture, dated as of March 18, 1996, among
the Borrower (as successor to Coda by the Coda Merger), as issuer, its
Subsidiaries, as subsidiary guarantors, and Texas Commerce Bank National
Association, as trustee, relating to the Coda Notes, as supplemented by the
First Supplemental Coda Indenture, the Second Supplemental Coda Indenture and
the Third Supplemental Coda Indenture.
"Coda Merger": the merger of the Borrower with and into Coda, with the
Borrower as the surviving corporation.
"Coda Notes": the 10-1/2% Senior Subordinated Notes of the Borrower (as
successor to Coda by the Coda Merger) due 2006, issued pursuant to the Coda
Indenture.
"Code": the Internal Revenue Code of 1986, as amended from time to time.
"Collateral Agent": as defined in the preamble to this Agreement.
"Commitments": the collective reference to the Revolving Credit Commitments
and the L/C Commitment.
"Commitment Fee Rate": for any day, a rate per annum equal to (a) 0.25% if
the Borrowing Base Usage in effect on such day is less than or equal to 25%, (b)
0.30% if the Borrowing Base Usage in effect on such day is greater than 25% and
less than or equal to 50%, (c) 0.35% if the Borrowing Base Usage in effect on
such day is greater than 50% and less than or equal to 75%, (d) 0.40% if the
Borrowing Base Usage in effect on such day is greater than 75% and less than or
equal to 90% and (e) 0.50% if the Borrowing Base Usage in effect on such day is
greater than 90%.
"Commitment Percentage": as to any Lender at any time, the percentage which
such Lender's Revolving Credit Commitment then constitutes of the aggregate
Revolving Credit Commitments (or, at any time after the Revolving Credit
Commitments shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Credit Loans then outstanding
constitutes of the aggregate principal amount of the Revolving Credit Loans then
outstanding).
<PAGE>
"Commitment Period": the period from and including the Restatement
Effective Date to but not including the Termination Date or such earlier date on
which the Commitments shall terminate as provided herein.
"Commodity Price Risk Management Agreement": a commodity price risk
management or purchase agreement or similar arrangement entered into in the
ordinary course of business with the intent of achieving more predictable
revenues and cash flows and reducing the exposure to fluctuations in oil and gas
prices.
"Commonly Controlled Entity": an entity, whether or not incorporated, which
is under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group which includes the Borrower and which is treated as
a single employer under Section 414 of the Code.
"Consolidated Interest Expense": with respect to the Borrower and its
Restricted Subsidiaries on a consolidated basis for any period, the sum of (i)
gross interest expense (including all cash and accrued interest expense) of the
Borrower and its Restricted Subsidiaries for such period on a consolidated
basis, including to the extent included in interest expense in accordance with
GAAP (x) the amortization of debt discounts and (y) the portion of any payments
or accruals with respect to Capital Leases allocable to interest expense and
(ii) capitalized interest of the Borrower and its Restricted Subsidiaries on a
consolidated basis.
"Consolidated Net Income": for any period, net income of the Borrower and
its Restricted Subsidiaries determined on a consolidated basis in accordance
with GAAP, provided that "Consolidated Net Income" shall not include any (i)
non-cash gains, losses or charges resulting from the net change in value of the
Borrower's mark-to-market portfolio of commodity price risk management
activities for that period, (ii) any extraordinary or nonrecurring gain or loss
together with any related provision for taxes on such extraordinary or
nonrecurring gain or loss and (iii) all non-cash extraordinary expenses.
"Contractual Obligation": as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
"Control": the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Default": any of the events specified in Section 9, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Designated Persons": (1) Robert A. Belfer, Renee E. Belfer, Laurence D.
Belfer, and Jack Saltz, (2) the spouses or descendants of such individuals, (3)
the estates or legal representatives of the individuals named in clauses (1) and
(2), and (4) trusts created for the benefit of Persons named in clauses (1) and
(2).
"Disqualified Stock": means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event, matures or is mandatorily
redeemable for any consideration other than Capital Stock, pursuant to a sinking
fund obligation or otherwise, is convertible or is exchangeable for Indebtedness
or Disqualified Stock or redeemable for any consideration other than Capital
Stock at the option of the holder thereof, in whole or in part on or prior to
the date that is one year after the earlier of (x) the Termination Date or (y)
the date on which there are no Loans, Reimbursement Obligations or other
obligations hereunder outstanding and the Commitments are terminated.
<PAGE>
"Documentation Agent": as defined in the preamble to this Agreement.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Subsidiary": any Restricted Subsidiary organized under the laws
of any jurisdiction within the United States of America (including territories
thereof).
"EBITDA": with respect to the Borrower, for any period, Consolidated Net
Income for that period, plus, to the extent deducted from revenues in
determining Consolidated Net Income for that period, (a) the aggregate amount of
Consolidated Interest Expense for that period, (b) the aggregate amount of
letter of credit fees paid during that period, (c) the aggregate amount of
income tax expense for that period and (d) all amounts attributable to
depreciation, depletion and amortization for that period, and minus, to the
extent included in revenues in determining Consolidated Net Income for that
period, all non-cash extraordinary income during that period, in each case
determined in accordance with GAAP and without duplication of amounts.
"Environmental Laws": with respect to any Person, any and all laws, rules,
orders, regulations, statutes, ordinances, codes, decrees, or other legally
enforceable requirement (including, without limitation, common law) of any
foreign government, the United States, or any state, local, municipal or other
governmental authority, having jurisdiction over such Person or its Properties
and regulating, relating to or imposing liability or standards of conduct
concerning protection of the environment or of human health, as has been, is
now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses, registrations,
notifications, approvals, exemptions and any other authorization required under
any Environmental Law.
"Equity Interests": Capital Stock and all warrants, options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a Eurodollar
Loan, the aggregate (without duplication) of the maximum rates (expressed as a
decimal) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the rate per
annum for Dollar deposits with a maturity comparable to such Interest Period
which appears on the Telerate British Bankers Assoc. Interest Settlement Rates
Page at approximately 10:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period; provided that if there shall no longer
exist a Telerate British Bankers Assoc. Interest Settlement Rates Page (or such
page is not available on the relevant Business Day), the Eurodollar Base Rate
shall mean an interest rate per annum equal to the average (rounded upward, if
necessary, to the next 1/16th of 1%) of the respective rates per annum notified
to the Administrative Agent by each of the Reference Banks as the average of the
rates at which Dollar deposits (in an amount comparable to the amount of Chase's
Eurodollar Loan to be outstanding during such Interest Period and for a maturity
comparable to such Interest Period) are offered to such Reference Bank in
immediately available funds by prime banks in the London interbank market at
approximately 11:00 a.m., London time,
<PAGE>
two Business Days prior to the commencement of such Interest Period. "Telerate
British Bankers Assoc. Interest Settlement Rates Page" shall mean the display
designated as Page 3750 on Teleratesystem Incorporated (or such other
replacement page thereof used to display London interbank offered rates of major
banks).
"Eurodollar Loans": Loans the rate of interest applicable to which is based
upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
Eurodollar Base Rate
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 9, provided that
any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Existing Credit Agreement": as defined in the recitals to this Agreement.
"Extension of Credit": as to any Lender, the making of, or the issuance of,
or participation in, a Loan by such Lender or the issuance of, or participation
in, a Letter of Credit by such Lender.
"First Supplemental Coda Indenture": the First Supplemental Indenture,
dated as of April 25, 1996, to the Coda Indenture.
"Foreign Subsidiary": any Restricted Subsidiary which is organized and
existing under the laws of any jurisdiction outside of the United States of
America.
"GAAP": generally accepted accounting principles in the United States of
America in effect from time to time; provided that for purposes of determining
compliance with the covenants contained in Section 8, "GAAP" shall mean
generally accepted accounting principles in the United States of America as in
effect on the date hereof and applied on a basis consistent with the application
used in the financial statements referred to in subsection 5.1; provided further
that if changes are made to or required by GAAP which materially alter the
calculations required under subsection 8.1 hereof, the Borrower may request that
the Administrative Agent and the Required Lenders amend such subsection to
reflect such changes in GAAP and to apply such new accounting principles in the
preparation of its subsequent financial statements.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, and any securities exchange or self-regulatory
organization.
"Guarantee Obligation": as to any Person (the "guaranteeing person"), any
obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or
<PAGE>
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith. Obligations of the Borrower or any Subsidiary pursuant to indemnities
which (a) are granted in the ordinary course of business, including, without
limitation, such obligations in connection with stock purchase agreements or
asset purchase and sale agreements and (b) do not cover Indebtedness of the
types described in clauses (a) through (f) of the definition of Indebtedness,
shall not constitute "Guarantee Obligations" for purposes of this Agreement.
"Guarantors": the Restricted Subsidiaries party to the Subsidiary
Guarantee.
"Hedging Agreement": any Interest Rate Protection Agreement, Commodity
Price Risk Management Agreement, foreign currency exchange agreement, commodity
price protection agreement or other interest or currency exchange rate or
commodity price hedging arrangement.
"Hydrocarbon Interests": all rights, titles, interests and estates now
owned or hereafter acquired in and to oil and gas leases, oil, gas and mineral
leases, or other liquid or gaseous hydrocarbon leases, mineral fee or lease
interests, farm-outs overriding royalty and royalty interests, net profit
interests, oil payments, production payment interests and similar mineral
interests, including any reserved or residual interest of whatever nature.
"Hydrocarbons": oil, gas, casinghead gas, condensate, distillate, liquid
hydrocarbons, gaseous hydrocarbons, all products refined, separated, settled and
dehydrated therefrom and all products refined therefrom, including, without
limitation, kerosene, liquefied petroleum gas, refined lubricating oils, diesel
fuel, drip gasoline, natural gasoline, helium, sulfur and all other minerals.
"Increased Facility Activation Notice": a notice substantially in the form
of Exhibit F-2.
"Increased Facility Closing Date": any Business Day designated as such in
an Increased Facility Activation Notice.
"Indebtedness": of any Person at any date (a) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the ordinary course
of business and payable in accordance with customary practices and accrued
current liabilities incurred in the ordinary course of business), (b) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) all obligations of such Person under Capital Leases, (d)
all obligations of such Person in respect of letters of credit and acceptances
issued or created for the account of such Person, (e) all obligations of such
Person under Commodity Price Risk Management Agreements and Interest Rate
Protection Agreements, (f) all obligations of others of the type referred to in
clauses (a) through (e) above and which are secured by any Lien on any property
<PAGE>
owned by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof, except that the amount of any nonrecourse
obligation shall be deemed to be the lesser of the value of the property
securing such obligation and the amount of such obligation so secured and (g)
all Guarantee Obligations with respect to the items described in clauses (a)
through (e) above; provided that, for purposes of calculating the covenants set
forth in subsection 8.1, "Indebtedness" shall exclude obligations of the type
referred to in clause (e) above.
"Initial Reserve Report": the Reserve Report dated February 16, 2000 and
delivered by the Borrower and prepared by Miller & Lents, Ltd. pursuant to the
Existing Credit Agreement.
"Insolvency": with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December, commencing September 30, 2000, and the
Termination Date, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, and (c) as to any
Eurodollar Loan having an Interest Period longer than three months, each day
which is three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or conversion date,
as the case may be, with respect to such Eurodollar Loan and ending one, two,
three or six (or, to the extent available to all Lenders, nine or twelve) months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan and ending one,
two, three or six (or, to the extent available to all Lenders, nine or twelve)
months thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(1) if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such Interest
Period into another calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(2) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month; and
(3) the Borrower shall select Interest Periods so as not to require a
payment or prepayment of any Eurodollar Loan during an Interest Period for such
Loan.
<PAGE>
"Interest Rate Protection Agreement": an interest rate swap, cap or collar
agreement or similar arrangement entered into with the intent of protecting
against fluctuations in interest rates or the exchange of notional interest
obligations, either generally or under specific contingencies.
"Investments": as defined in subsection 8.8.
"Issuing Lender": Chase or any of its respective Affiliates, in its
capacity as issuer of a Letter of Credit, and any other Lender to whom Chase or
any of its respective Affiliates assigns (with the consent of such Lender) its
obligations to issue Letters of Credit hereunder.
"L/C Application": as defined in subsection 3.2.
"L/C Commitment": the Issuing Lender's obligation to issue Letters of
Credit pursuant to Section 3 of this Agreement.
"L/C Participating Interest": with respect to any Letter of Credit (a) in
the case of the Issuing Lender with respect thereto, its interest in such Letter
of Credit and any L/C Application relating thereto after giving effect to the
granting of participating interests therein, if any, pursuant hereto and (b) in
the case of each Participating Lender, its undivided participating interest in
such Letter of Credit and any L/C Application relating thereto.
"Lender Redetermination Notice": a notice from the Supermajority Lenders to
the Borrower giving notice of their election to redetermine the Borrowing Base,
which notice may be sent by the Supermajority Lenders at any time they so elect,
provided that such an election can be made by the Supermajority Lenders no more
than once during any consecutive 12 month period.
"Letters of Credit": as defined in subsection 3.1(a).
"Letter of Credit Outstandings": at any time, the sum of (a) the aggregate
amount available for drawing under Letters of Credit then outstanding and (b)
the aggregate amount of drawings under Letters of Credit which have not then
been reimbursed pursuant to subsection 3.5.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the foregoing).
"Loan": as defined in subsection 2.1(a).
"Loan Documents": this Agreement, any Notes, the Pledge Agreement, the
Subsidiary Guarantee and the L/C Applications.
"Loan Parties": the Borrower, the Guarantors and the Pledgors.
"Material Adverse Effect": a material adverse effect on (a) the business,
assets, property, condition (financial or otherwise) or prospects of the
Borrower and its Restricted Subsidiaries taken as a whole, (b) the ability of
the Loan Parties to perform their respective obligations under the Loan
Documents or (c) the validity or enforceability of this or any of the other Loan
Documents or the rights and remedies of the Administrative Agent and the Lenders
hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products or any hazardous or
toxic substances, materials, or
<PAGE>
wastes, defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos or asbestos containing material,
polychlorinated biphenyls, urea- formaldehyde insulation, and any other
substance that is regulated pursuant to or could give rise to liability under
any Environmental Law.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"New Lender": as defined in subsection 2.1(d).
"New Lender Supplement": as defined in subsection 2.1(d).
"Non-Excluded Taxes": as defined in subsection 4.13(a).
"Non-Recourse Debt": Indebtedness (i) as to which neither the Borrower nor
any of its Restricted Subsidiaries (a) provides any guarantee or credit support
of any kind (including any undertaking, guarantee, indemnity, agreement or
instrument that would constitute Indebtedness), or (b) is directly or indirectly
liable (as guarantor or otherwise); and (ii) no default with respect to which
(including any rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time, or both) any holder of any other Indebtedness of the Borrower or any of
its Restricted Subsidiaries to declare a default on such other indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and (iii) the explicit terms of which provide that there is no
recourse against any of the assets of the Borrower or its Restricted
Subsidiaries (other than the Capital Stock of an Unrestricted Subsidiary).
"Non-U.S. Lender": as defined in subsection 4.13(b).
"Notes": as defined in subsection 2.3(e).
"Oil and Gas Business": (a) the acquisition, exploration, exploitation,
development, operation and disposition of interests in Oil and Gas Properties
and Hydrocarbons, including the acquisition, ownership and disposition of
interests in Persons engaged in the Oil and Gas Business; (b) the gathering,
marketing, treating, processing, storage, selling and transporting of any
production from such interests or Properties, including, without limitation, the
marketing of Hydrocarbons obtained from unrelated Persons; (c) any business
relating to or arising from exploration for or development, production,
treatment, processing, storage, transportation or marketing of Hydrocarbons; (d)
any business relating to oilfield sales and service, and (e) any activity that
is ancillary or necessary or desirable to facilitate the activities described in
clauses (a) through (d) of this definition.
"Oil and Gas Properties": Hydrocarbon Interests; the Properties now or
hereafter pooled or unitized with Hydrocarbon Interests; all presently existing
or future unitization, pooling agreements and declarations of pooled units and
the units created thereby (including without limitation all units created under
orders, regulations and rules of any Governmental Authority having jurisdiction)
which may affect all or any portion of the Hydrocarbon Interests; all pipelines,
gathering lines, compression facilities, tanks and processing plants; all
interests held in royalty trusts whether presently existing or hereafter
created; all Hydrocarbons in and under and which may be produced, saved,
processed or attributable to the Hydrocarbon Interests, the lands covered
thereby and all Hydrocarbons in pipelines, gathering lines, tanks and processing
plants and all rents, issues, profits, proceeds, products, revenues and other
incomes from or attributable to the Hydrocarbon Interests; all tenements,
hereditaments, appurtenances and Properties in any way appertaining, belonging,
affixed or incidental to the Hydrocarbon Interests, and all rights, titles,
interests and estates described or referred to above, including any and all real
property, now owned or hereafter acquired, used or held for use in connection
with the operating, working
<PAGE>
or development of any of such Hydrocarbon Interests or Property and including
any and all surface leases, rights-of-way, easements and servitude together with
all additions, substitutions, replacements, accessions and attachments to any
and all of the foregoing; all oil, gas and mineral leasehold and fee interests,
all overriding royalty interests, mineral interests, royalty interests, net
profits interests, net revenue interests, oil payments, production payments,
carried interests and any and all other interests in Hydrocarbons; in each case
whether now owned or hereafter acquired directly or indirectly.
"Participants": as defined in subsection 11.6(b).
"Participating Lender": with respect to any Letter of Credit, any Lender
(other than the Issuing Lender with respect to such Letter of Credit) with
respect to its L/C Participating Interest in such Letter of Credit.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA.
"Permitted Business Acquisition": the formation of a new Subsidiary or any
acquisition of all or substantially all the assets of, or shares of capital
stock, partnership interests, joint venture interests, limited liability company
interests or other similar equity interests in, a Person or division or line of
business of a Person (or any subsequent investment made in a Person previously
acquired in a Permitted Business Acquisition), if immediately after giving
effect thereto: (a) no Default or Event of Default shall have occurred and be
continuing or would result therefrom, (b) all transactions related thereto shall
be consummated in accordance with applicable laws, (c) such acquired or newly
formed corporation, partnership, association or other business entity shall be a
Restricted Subsidiary and all of the Capital Stock of such acquired or newly
formed corporation, partnership, association or other business entity are owned
directly by the Borrower or a domestic Wholly-Owned Restricted Subsidiary and
all actions required to be taken, if any, with respect to such acquired or newly
formed Subsidiary under subsection 7.9 shall have been taken, (d)(i) the
Borrower shall be in compliance, on a pro forma basis after giving effect to
such acquisition or formation, with the covenants contained in subsection 8.1
recomputed as at the last day of the most recently ended fiscal quarter of the
Borrower as if such acquisition had occurred on the first day of each relevant
period for testing such compliance, and the Borrower shall have delivered to the
Administrative Agent an officers' certificate to such effect, together with all
relevant financial information for such Person or assets and (ii) any acquired
or newly formed Subsidiary shall not be liable for any Indebtedness or Guarantee
Obligations (except for Indebtedness and Guarantee Obligations permitted by
subsections 8.2 and 8.4) and (e) any acquired or newly formed Subsidiary shall
not have (except for Indebtedness and Guarantee Obligations permitted by
subsections 8.2 and 8.4) any material liabilities (contingent or otherwise),
including, without limitation, liabilities under Environmental Laws and
liabilities with respect to any Plan, and the Borrower shall have delivered to
the Administrative Agent a certificate, signed by a Responsible Officer, that to
the best of such officer's knowledge, no such material liabilities exist.
"Permitted Business Investments": investments made in the ordinary course
of, and of a nature that is or shall have become customary in, the Oil and Gas
Business as a means of actively exploiting, exploring for, acquiring,
developing, processing, gathering, marketing, storing, treating, selling or
transporting oil and gas through agreements, transactions, interests or
arrangements which permit one to share risks or costs, comply with regulatory
requirements regarding local ownership or satisfy other objectives customarily
achieved through the conduct of Oil and Gas Business jointly with third parties,
including, without limitation, the entry into operating agreements, working
interests, royalty interests, mineral leases, processing agreements, farm-out
and farm-in agreements, division orders, contracts for the sale, transportation
or exchange of oil or natural gas, unitization and pooling declarations and
agreements and area of mutual interest agreements, production sharing agreements
or other similar or customary
<PAGE>
agreements, transactions, properties, interests, and investments and
expenditures in connection therewith; provided that an investment in capital
stock, partnership interests, joint venture interests, limited liability company
interests or other similar equity interests in a Person shall not constitute a
Permitted Business Investment.
"Permitted Subordinated Refinancing Debt": Indebtedness of the Borrower
issued in exchange for, or the net proceeds of which are used to refinance,
replace, defease or refund, any Subordinated Indebtedness; provided that (a) the
principal amount of such Permitted Subordinated Refinancing Debt does not exceed
the principal amount (or accreted value, if applicable) of the Subordinated
Indebtedness so refinanced, replaced, defeased or refunded, plus the amount of
premiums, prepayments, penalties and other amounts required to be paid in
connection therewith and the reasonable and customary fees and expenses incurred
in connection therewith, (b) the subordination provisions in such Permitted
Subordinated Refinancing Debt are no less favorable to the Lenders than the
subordination provisions contained in the Subordinated Indebtedness being
refinanced, (c) the interest rate on such Permitted Subordinated Refinancing
Debt is no higher than the interest rate on the Subordinated Indebtedness being
refinanced and the interest periods are no shorter than the interest periods
with respect to the Subordinated Indebtedness being refinanced and (d) the
timing and amounts of principal repayments (including any sinking fund therefor)
on such Permitted Subordinated Refinancing Debt are no sooner and greater,
respectively, than the timing and amounts of principal repayments under the
Subordinated Indebtedness being refinanced.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is subject to
Title IV of ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement": the Pledge Agreement dated as of September 23, 1997, as
amended and restated, to be executed and delivered on the date hereof by each of
the Pledgors, substantially in the form of Exhibit B-1, as amended, modified or
supplemented from time to time.
"Pledged Securities": the Capital Stock of each direct and indirect
Restricted Subsidiary of the Borrower and each other Subsidiary of the Borrower
(whether now formed or hereafter acquired) whose Capital Stock is pledged to the
Lenders pursuant to the Pledge Agreement or subsection 7.9.
"Pledgors": the Borrower and each of its Subsidiaries which is a party to
the Pledge Agreement on the Restatement Effective Date or which becomes a party
to a pledge agreement pursuant to subsection 7.9.
"Properties": any kind of facility, fixture, property or asset, whether
real, personal or mixed, or tangible or intangible owned, leased or operated by
the Borrower or any Restricted Subsidiary.
"Proved Reserves": the estimated quantities of crude oil, condensate,
natural gas and natural gas liquids that adequate geological and engineering
data demonstrate with reasonable certainty to be recoverable in future years
from proved reservoirs under existing economic and operating conditions (i.e.,
prices and costs as of the date the estimate is made).
<PAGE>
"Re-determination Date": each date that the redetermined Borrowing Base
becomes effective subject to the notice requirements specified in subsection
4.9.
"Reference Banks": four major banks in the London interbank market selected
by the Administrative Agent.
"Register": as defined in subsection 11.6(d).
"Regulation U": Regulation U of the Board as in effect from time to time.
"Reimbursement Obligations": the obligation of the Borrower to reimburse
the Issuing Lender pursuant to subsection 3.5 for amounts drawn under Letters of
Credit issued by the Issuing Lender in accordance with the terms of this
Agreement and the related L/C Applications.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under regulations issued by the PBGC.
"Required Lenders": at any time, Lenders the Commitment Percentages of
which aggregate at least 51%.
"Requirement of Law": as to any Person, the certificate or articles of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.
"Reserve Report": a report prepared by the Borrower in form and with
attachments consistent with the Initial Reserve Report with respect to the Oil
and Gas Properties of the Borrower and its Restricted Subsidiaries and, for any
reserve report dated as of December 31, audited by Miller & Lents, Ltd. or
another independent engineering firm selected by the Borrower and reasonably
acceptable to the Administrative Agent. Each Reserve Report shall be certified
as materially accurate by a Responsible Officer of the Borrower.
"Responsible Officer": of any Loan Party, the chief executive officer, the
president or any vice president of such Loan Party or, with respect to financial
matters, the chief financial officer or treasurer of such Loan Party and, in
either case, any other officer having substantially similar authority.
"Restatement Effective Date": the date on which the conditions precedent
set forth in Section 6.1 shall have been satisfied, which date is June 30, 2000.
"Restricted Subsidiaries": the collective reference to any direct or
indirect Subsidiary of the Borrower that is not an Unrestricted Subsidiary under
this Agreement.
"Revolving Credit Commitment": as to any Lender, the obligation of such
Lender to make Loans to the Borrower hereunder in an aggregate principal amount
at any one time outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule 1.1(a) (which amount, with respect to the Lenders,
initially shall equal $250,000,000 in the aggregate), as such amount may be
changed from time to time in accordance with the provisions of this Agreement.
<PAGE>
"Revolving Credit Loans": as defined in subsection 2.1(a).
"Revolving Credit Note": as defined in subsection 2.3(e).
"Second Supplemental Coda Indenture": the Second Supplemental Indenture,
dated as of February 25, 1998, to the Coda Indenture.
"Senior Subordinated Indenture": the Indenture, dated as of September 23,
1997, between the Borrower and The Bank of New York, as trustee, pursuant to
which the Senior Subordinated Notes were issued.
"Senior Subordinated Notes": the subordinated notes of the Borrower issued
on September 23, 1997 pursuant to the Senior Subordinated Indenture.
"Single Employer Plan": any Plan which is covered by Title IV of ERISA, but
which is not a Multiemployer Plan.
"Subordinated Debt Offering Memorandum": the Offering Memorandum, dated
September 17, 1997, related to the issuance of the Senior Subordinated Notes, as
such Offering Memorandum shall be further amended, supplemented or otherwise
modified from time to time.
"Subordinated Indebtedness": the Senior Subordinated Notes, Permitted
Subordinated Refinancing Debt and any other Indebtedness of the Borrower
contractually subordinated to the prior payment in full of the Loans,
Reimbursement Obligations and any other obligations hereunder in a manner
reasonably acceptable to the Required Lenders as evidenced by their written
approval.
"Subordinated Note Documents": the collective reference to the Senior
Subordinated Notes, the Senior Subordinated Indenture, the Subordinated Debt
Offering Memorandum, the Coda Indenture and each agreement, instrument and
document delivered in connection therewith or relating thereto.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which more than 50% of the total voting
power of shares of stock or other equity ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to vote in the election
of directors, a managing general partner, or majority of general partners or
other managers or trustees thereof, is at the time owned or controlled, directly
or indirectly by such Person or one or more of the other Subsidiaries of such
Person (or a combination thereof). Unless otherwise qualified, all references to
a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to any direct
or indirect Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantee": the Guarantee Agreement dated as of February 25,
1998, as amended and restated, to be executed and delivered on the date hereof
by each of the Guarantors, substantially in the form of Exhibit B-2, as amended,
modified or supplemented from time to time
"Supermajority Lenders": at any time, Lenders the Commitment Percentages of
which aggregate at least 75%.
"Syndication Agent": as defined in the preamble to this Agreement.
"Termination Date": January 31, 2004.
<PAGE>
"Third Supplemental Coda Indenture": the Third Supplemental Indenture,
dated as of February 25, 1998, to the Coda Indenture.
"Tranche": the collective reference to Eurodollar Loans the then current
Interest Periods with respect to all of which begin on the same date and end on
the same later date (whether or not such Loans shall originally have been made
on the same day); Tranches may be identified as "Eurodollar Tranches".
"Transferee": as defined in subsection 11.6(f).
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500, as the
same may be amended from time to time.
"Unrestricted Subsidiary": (i) each Subsidiary listed on Schedule 5.15
hereof and designated an "Unrestricted Subsidiary", so long as such Subsidiary
satisfies the requirements of an Unrestricted Subsidiary set forth in the
proviso below, (ii) any Subsidiary of the Borrower which at the time of
determination shall be an Unrestricted Subsidiary (as designated by the Board of
Directors of the Borrower, as provided below) and (iii) any Subsidiary of an
Unrestricted Subsidiary; provided, that the Board of Directors of the Borrower
may designate any Subsidiary of the Borrower (including any newly acquired or
newly formed Subsidiary or a Person becoming a Subsidiary through merger or
consolidation or Investment therein) to be an Unrestricted Subsidiary or the
Borrower may designate a Subsidiary as an Unrestricted Subsidiary on Schedule
5.15 hereof only if (a) such Subsidiary does not own any Capital Stock of, or
own or hold any Lien on any Property of, any other Subsidiary of the Borrower
which is not a Subsidiary of the Subsidiary to be so designated an "Unrestricted
Subsidiary"; (b) all the Indebtedness of such Subsidiary shall, at the date of
designation, and will at all times thereafter, consist of Non-Recourse Debt; (c)
the Borrower certifies that such designation complies with the limitations of
the covenants contained in subsection 8.8 and subsection 8.17; (d) such
Subsidiary, either alone or in the aggregate with all other Unrestricted
Subsidiaries, does not operate, directly or indirectly, all or substantially all
of the business of the Borrower and its Subsidiaries; (e) such Subsidiary does
not, directly or indirectly, own any Indebtedness of or Equity Interests in, and
has no investments in, the Borrower or any Restricted Subsidiary; (f) such
Subsidiary is a Person with respect to which neither the Borrower nor any of its
Restricted Subsidiaries has any direct or indirect obligation to maintain or
preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; and (g) on the date such Subsidiary
is designated an Unrestricted Subsidiary, such Subsidiary is not a party to any
agreement, contract, arrangement or understanding with the Borrower or any
Restricted Subsidiary with terms substantially less favorable to the Borrower or
such Restricted Subsidiary than those that might have been obtained from Persons
who are not Affiliates of the Borrower. Any such designation by the Board of
Directors of the Borrower shall be evidenced to the Administrative Agent by
filing with the Administrative Agent a resolution of the Board of Directors of
the Borrower giving effect to such designation and an officers' certificate
certifying that such designation complied with the foregoing conditions. If, at
any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Agreement and any Indebtedness of
such Subsidiary shall be deemed to be incurred as of such date.
"Wholly-Owned Restricted Subsidiary": a Restricted Subsidiary of the
Borrower, all of the outstanding Capital Stock of which (other than directors'
qualifying shares) is owned, directly or indirectly, by the Borrower or one or
more other Wholly-Owned Restricted Subsidiaries of the Borrower.
<PAGE>
1.2 Other Definitional Provisions. (a) Unless otherwise specified therein,
all terms defined in this Agreement shall have the defined meanings when used in
any Loan Document or any certificate or other document made or delivered
pursuant hereto or thereto.
(b) As used herein and in any Loan Document, and any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms relating
to the Borrower or any Subsidiary of the Borrower not defined in subsection 1.1
and accounting terms partly defined in subsection 1.1, to the extent not
defined, shall have the respective meanings given to them under GAAP. References
in this Agreement or any other Loan Document to financial statements shall be
deemed to include all related schedules and notes thereto.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
(e) References in this Agreement or any other Loan Document to knowledge of
any Loan Party of events or circumstances shall be deemed to refer to events or
circumstances of which a Responsible Officer has actual knowledge or through the
use of reasonable and customary diligence should have had knowledge.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and conditions
hereof, each Lender severally agrees to make revolving credit loans ("Revolving
Credit Loans" or "Loans") to the Borrower from time to time during the
Commitment Period in an aggregate principal amount at any one time outstanding
not to exceed the amount of such Lender's Revolving Credit Commitment, provided
that no Lender shall make any Revolving Credit Loans if, after giving effect
thereto, the sum of such Lender's Revolving Credit Loans and Commitment
Percentage of Letter of Credit Outstandings (in each case, after giving effect
to the Loans requested to be made and the Letters of Credit requested to be
issued on such date) exceeds the lesser of (i) such Lender's Revolving Credit
Commitment and (ii) such Lender's Commitment Percentage of the Borrowing Base
then in effect. During the Commitment Period the Borrower may use the Revolving
Credit Commitments by borrowing, prepaying the Revolving Credit Loans in whole
or in part, and reborrowing, all in accordance with the terms and conditions
hereof.
(b) The Revolving Credit Loans may from time to time be (i) Eurodollar
Loans, (ii) ABR Loans or (iii) a combination thereof, as determined by the
Borrower and notified to the Administrative Agent in accordance with subsections
2.2 and 4.3, provided that no Revolving Credit Loan shall be made as a
Eurodollar Loan after the day that is one month prior to the Termination Date.
(c) The Borrower and any one or more Lenders (including New Lenders) may,
with the consent of the Administrative Agent, at any time after the Restatement
Effective Date agree that such Lenders shall obtain or increase the amount of
their Revolving Credit Commitments by executing and delivering to the
Administrative Agent an Increased Facility Activation Notice specifying (i) the
amount of such increase and (ii) the applicable Increased Facility Closing Date.
Notwithstanding the foregoing, (i) the aggregate Revolving Credit Commitments in
respect of all Lenders may not be increased by more than $100,000,000 and (ii)
each increase effected pursuant to this paragraph shall be in a minimum amount
of at least $25,000,000. No Lender shall have any obligation to participate in
any increase described in this paragraph unless it agrees to do so in its sole
discretion.
<PAGE>
(d) Any additional bank, financial institution or other entity which, with
the consent of the Borrower and the Administrative Agent (which consent shall
not be unreasonably withheld), elects to become a "Lender" under this Agreement
in connection with any transaction described in Section 2.1(c) shall execute a
New Lender Supplement (each, a "New Lender Supplement"), substantially in the
form of Exhibit F-1, whereupon such bank, financial institution or other entity
(a "New Lender") shall become a Lender for all purposes and to the same extent
as if originally a party hereto and shall be bound by and entitled to the
benefits of this Agreement.
(e) Unless otherwise agreed by the Administrative Agent, the Borrower shall
borrow Revolving Credit Loans under the increased Revolving Credit Commitments
from each Lender participating in the relevant increase described in Section
2.1(c) (i) if ABR Loans are outstanding on the relevant Increased Facility
Closing Date, in an amount of ABR Loans that will result in each such
participating Lender having ABR Loans outstanding in a principal amount equal to
its Commitment Percentage of the aggregate outstanding principal amount of ABR
Loans and (ii) if Eurodollar Loans are outstanding on the relevant Increased
Facility Closing Date, in an amount of Eurodollar Loans on such date (if a
borrowing of Eurodollar Loans is being continued for another Interest Period on
such date) and/or such later dates on which borrowings of Eurodollar Loans
outstanding on the Increased Facility Closing Date are continued for another
Interest Period that will result, in each case, in each such participating
Lender having Eurodollar Loans made by it included in each such extended
borrowing in a principal amount equal to its Commitment Percentage of the
aggregate outstanding principal amount of Eurodollar Loans included in such
borrowing.
2.2 Procedure for Revolving Credit Borrowing. The Borrower may borrow under
the Revolving Credit Commitments during the Commitment Period on any Business
Day, provided that the Borrower shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to 10:00
a.m., New York City time, (a) three Business Days prior to the requested
Borrowing Date, if all or any part of the requested Revolving Credit Loans
initially are to be Eurodollar Loans or (b) one Business Day prior to the
requested Borrowing Date, otherwise), specifying (i) the amount to be borrowed,
(ii) the requested Borrowing Date, (iii) whether the borrowing is to be of
Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the borrowing
is to be entirely or partly of Eurodollar Loans, the respective amounts of each
such Type of Loan and the respective lengths of the initial Interest Periods
therefor. Each borrowing under the Revolving Credit Commitments shall be in an
amount equal to (x) in the case of ABR Loans, $1,000,000 or a whole multiple of
$500,000 in excess thereof (or, if the then Available Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$1,000,000 or a whole multiple of $500,000 in excess thereof. Upon receipt of
any such notice from the Borrower, the Administrative Agent shall promptly
notify each Lender thereof. Each Lender will make the amount of its pro rata
share of each borrowing available to the Administrative Agent for the account of
the Borrower at the office of the Administrative Agent specified in subsection
11.2 prior to 11:00 a.m., New York City time, on the Borrowing Date requested by
the Borrower in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower no later than 1:00 p.m. by
the Administrative Agent crediting the account of the Borrower on the books of
such office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
2.3 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Loan of such Lender on the
Termination Date (or such earlier date on which the Loans become due and payable
pursuant to Section 9). The Borrower hereby further agrees to pay interest on
the unpaid principal amount of the Loans from time to time outstanding from the
Restatement Effective Date to but not including the date the Loans are paid in
full at the rates per annum, and on the dates, set forth in subsection 4.1.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing Indebtedness of the Borrower to such Lender
resulting from each Loan of such
<PAGE>
Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
subsection 11.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Loan made hereunder, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.3(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of the Administrative Agent or any Lender to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Administrative Agent
by any Lender, the Borrower will execute and deliver to such Lender a promissory
note of the Borrower evidencing the Revolving Credit Loans of such Lender,
substantially in the form of Exhibit A with appropriate insertions as to date
and principal amount (a "Revolving Credit Note" or "Note").
SECTION 3. LETTERS OF CREDIT
3.1 The L/C Commitment. (a) Subject to the terms and conditions hereof, the
Issuing Lender, in reliance on the agreements of the other Lenders set forth in
subsection 3.4(a), agrees to issue letters of credit ("Letters of Credit") for
the account of the Borrower on any Business Day during the Commitment Period in
such form as may be approved from time to time by the Issuing Lender; provided
that the Issuing Lender shall not issue any Letter of Credit if, after giving
effect to such issuance and after giving effect to any Loans requested to be
made or Letters of Credit requested to be issued on such date, (i) the Letter of
Credit Outstandings would exceed $40,000,000 or (ii) the sum of the Revolving
Credit Loans and Letter of Credit Outstandings would exceed the lesser of (x)
the Revolving Credit Commitments and (y) the Borrowing Base then in effect. Each
Letter of Credit shall (i) be issued to support obligations of the Borrower or
any of its Restricted Subsidiaries, contingent or otherwise, which finance the
working capital and business needs of the Borrower and its Restricted
Subsidiaries, and (ii) shall expire no later than the earlier of (x) one year
after the date of issuance and (y) five Business Days prior to the Termination
Date, provided that any Letter of Credit with a one-year tenor may provide for
the extension thereof for additional one-year periods (which shall in no event
extend beyond the date referred to in clause (y) above). Each Letter of Credit
shall be denominated in Dollars.
(b) Each Letter of Credit shall be subject to the Uniform Customs and, to
the extent not inconsistent therewith, the laws of the State of New York.
(c) The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any Participating Lender to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letters of Credit. The Borrower may from time
to time request that the Issuing Lender issue a Letter of Credit by delivering
to the Issuing Lender and the Administrative Agent at their respective addresses
for notices specified herein a letter of credit application in the Issuing
Lender's then customary form (an "L/C Application") completed to the
satisfaction of the Issuing Lender, and such other certificates, documents and
other papers and information as may be customary and as the Issuing Lender may
reasonably request. Upon receipt of any
<PAGE>
L/C Application, the Issuing Lender will process such L/C Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and, upon
receipt by the Issuing Lender of confirmation from the Administrative Agent that
issuance of such Letter of Credit will not contravene subsection 3.1, the
Issuing Lender shall promptly issue the Letter of Credit requested thereby (but
in no event shall the Issuing Lender be required to issue any Letter of Credit
earlier than three Business Days after its receipt of the L/C Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by the Issuing Lender
and the Borrower. The Issuing Lender shall furnish a copy of such Letter of
Credit to the Borrower and the Administrative Agent promptly following the
issuance thereof, and, thereafter, the Administrative Agent shall promptly
furnish a copy thereof to the Lenders.
3.3 Fees, Commissions and Other Charges. (a) The Borrower shall pay to the
Administrative Agent, for the account of (i) the Issuing Lender and the
Participating Lenders, a letter of credit commission with respect to each Letter
of Credit, computed for the period from the date such Letter of Credit is issued
to the date upon which the next payment is due under this subsection (and,
thereafter, from the date of payment under this subsection to the date upon
which the next payment is due under this subsection) at the rate per annum equal
to the Applicable Margin in effect from time to time for Eurodollar Loans of the
daily aggregate amount available to be drawn under such Letter of Credit for the
period covered by clause (i) above during such period, and (ii) the Issuing
Lender, a letter of credit commission with respect to each Letter of Credit in
an amount equal to the greater of (A) 0.125% per annum of the stated amount of
such Letter of Credit (and an additional 0.125% of the stated amount of such
Letter of Credit on each annual anniversary of its issuance date) and (B) $500
(and an additional $500 on each annual anniversary of its issuance date). The
letter of credit commissions payable pursuant to clause (i) and (ii) above shall
be payable quarterly in arrears on the last day of each March, June, September
and December, commencing September 30, 2000, and on the Termination Date.
(b) In addition to the foregoing fees and commissions, the Borrower shall
pay or reimburse the Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by the Issuing Lender in issuing, effecting
payment under, amending, negotiating or otherwise administering any Letter of
Credit.
(c) The Administrative Agent shall, promptly following its receipt thereof,
distribute to the Issuing Lender and the Participating Lenders all fees and
commissions received by the Administrative Agent for their respective accounts
pursuant to this subsection.
3.4 L/C Participations. (a) Effective on the date of issuance of each
Letter of Credit, the Issuing Lender irrevocably agrees to grant and hereby
grants to each Participating Lender, and each Participating Lender irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such Participating
Lender's own account and risk an undivided interest equal to such Participating
Lender's Commitment Percentage in the Issuing Lender's obligations and rights
under each Letter of Credit issued by the Issuing Lender and the amount of each
draft paid by the Issuing Lender thereunder. Each Participating Lender
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which such Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such Participating Lender shall pay to the Administrative Agent, for
the account of the Issuing Lender, upon demand at the Administrative Agent's
address specified in subsection 11.2, an amount equal to such Participating
Lender's Commitment Percentage of the amount of such draft, or any part thereof,
which is not so reimbursed. On the date that any Assignee becomes a Lender party
to this Agreement in accordance with subsection 11.6, participating interests in
any outstanding Letters of Credit held by the transferor Lender from which such
Assignee acquired its interest hereunder shall be proportionately reallotted
between such Assignee and such transferor Lender. Each Participating Lender
hereby agrees that its obligation to participate in each Letter of Credit, and
to pay or to reimburse the Issuing Lender for its participating share of the
drafts drawn or amounts otherwise paid thereunder, is absolute, irrevocable and
unconditional and shall not be affected by any circumstances whatsoever
<PAGE>
(including, without limitation, the occurrence or continuance of any Default or
Event of Default), and that each such payment shall be made without offset,
abatement, withholding or other reduction whatsoever.
(b) If any amount required to be paid by any Participating Lender to the
Issuing Lender pursuant to subsection 3.4(a) in respect of any unreimbursed
portion of any draft paid by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such Participating Lender shall pay to the Administrative Agent,
for the account of the Issuing Lender, on demand, an amount equal to the product
of (i) such amount, times (ii) the daily average Federal Funds Effective Rate
during the period from and including the date such draft is paid to the date on
which such payment is immediately available to the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount required to be
paid by any Participating Lender pursuant to subsection 3.4(a) is not in fact
made available to the Administrative Agent, for the account of the Issuing
Lender, by such Participating Lender within three Business Days after the date
such payment is due, the Issuing Lender shall be entitled to recover from such
Participating Lender, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to ABR Loans hereunder. A
certificate of the Issuing Lender submitted to any Participating Lender with
respect to any amounts owing under this subsection shall be conclusive in the
absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has paid a draft under
any Letter of Credit and has received from any Participating Lender its pro rata
share of such payment in accordance with subsection 3.4(a), the Issuing Lender
receives any reimbursement on account of such unreimbursed portion, or any
payment of interest on account thereof, the Issuing Lender will pay to the
Administrative Agent, for the account of such Participating Lender, its pro rata
share thereof; provided, however, that in the event that any such payment
received by the Issuing Lender shall be required to be returned by the Issuing
Lender, such Participating Lender shall return to the Administrative Agent for
the account of the Issuing Lender, the portion thereof previously distributed to
it.
3.5 Reimbursement Obligation of the Borrower. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
notify the Borrower and the Administrative Agent of the date and the amount
thereof. The Borrower agrees to reimburse the Issuing Lender (whether with its
own funds or, subject to the limitations on amounts set forth in subsection 2.2,
with proceeds of the Revolving Credit Loans) on each date on which the Issuing
Lender pays a draft so presented under any Letter of Credit for the amount of
(i) such draft so paid and (ii) any taxes, fees, charges or other costs or
expenses incurred by the Issuing Lender in connection with such payment. Each
such payment shall be made to the Issuing Lender at its address for notices
specified herein in lawful money of the United States of America and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this subsection from the date of payment
of the applicable draft until payment in full thereof, (x) for the period
commencing on the date of payment of the applicable draft to the date which is 3
days thereafter, at the rate which would be payable on ABR Loans at such time
and (y) thereafter, at the rate which would be payable on ABR Loans at such time
plus 2%.
3.6 Obligations Absolute. (a) The Borrower's obligations under this Section
3 shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which the
Borrower or any other Person may have or have had against the Issuing Lender or
any other Lender or any beneficiary of a Letter of Credit. The Borrower also
agrees with the Issuing Lender that the Issuing Lender shall not be responsible
for, and the Borrower's obligations under subsection 3.5 shall not be affected
by, among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. The Issuing
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message
<PAGE>
or advice, however transmitted, in connection with any Letter of Credit, except
for errors or omissions caused by the Issuing Lender's gross negligence or
willful misconduct. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, including, without limitation, Article
V thereof, shall be binding on the Borrower and shall not result in any
liability of such Issuing Lender to the Borrower.
(b) Without limiting the generality of the foregoing, it is expressly
agreed that the absolute and unconditional nature of the Borrower's obligations
under this Section 3 to reimburse the Issuing Lender for each drawing under a
Letter of Credit will not be excused by the gross negligence or wilful
misconduct of the Issuing Lender. However, the foregoing shall not be construed
to excuse the Issuing Lender from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Issuing Lender's gross
negligence or wilful misconduct in determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof.
3.7 Letter of Credit Payments. Without limitation of subsection 3.6, the
responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
3.8 L/C Applications. To the extent that any provision of any L/C
Application, including any reimbursement provisions contained therein, related
to any Letter of Credit is inconsistent with the provisions of this Section 3,
the provisions of this Section 3 shall prevail.
SECTION 4. GENERAL PROVISIONS
4.1 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such Interest Period plus
the Applicable Margin in effect on such day.
(b) Each ABR Loan shall bear interest for each day at a rate per annum
equal to the ABR in effect on such day plus the Applicable Margin in effect on
such day.
(c) If all or a portion of (i) any principal of any Loan, (ii) any interest
payable thereon, (iii) any commitment fee, (iv) any Borrowing Base increase fee
or (v) any other amount payable hereunder shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), the principal of the Loans
and any such overdue interest, commitment fee, Borrowing Base increase fee or
other amount shall bear interest at a rate per annum which is (x) in the case of
principal, the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this subsection plus 2% or (y) in the case of any such
overdue interest, commitment fee, Borrowing Base increase fee or other amount,
the ABR plus 2%, in each case from the date of such non-payment until such
overdue principal, interest, commitment fee, Borrowing Base increase fee or
other amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to subsection 4.1(c) shall be payable
from time to time on demand.
4.2 Computation of Interest and Fees. (a) Whenever, in the case of ABR
Loans, it is calculated on the basis of the Prime Rate, interest shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for the
actual days elapsed; and, otherwise, interest and fees shall be calculated
<PAGE>
on the basis of a 360-day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrower and the Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the ABR, the Eurocurrency Reserve Requirements, the
C/D Assessment Rate or the C/D Reserve Percentage shall become effective as of
the opening of business on the day on which such change becomes effective. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of the effective date and the amount of each such change in interest
rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations and calculations used by the
Administrative Agent in determining any interest rate pursuant to subsection
4.1(a).
4.3 Conversion and Continuation Options. (a) The Borrower may elect from
time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least one Business Day's prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans is subject
to the terms of subsection 4.14. The Borrower may elect from time to time to
convert ABR Loans to Eurodollar Loans by giving the Administrative Agent at
least three Business Days' prior irrevocable notice of such election. Any such
notice of conversion to Eurodollar Loans shall specify the length of the initial
Interest Period or Interest Periods therefor. Upon receipt of any such notice
the Administrative Agent shall promptly notify each Lender thereof. All or any
part of outstanding Eurodollar Loans and ABR Loans may be converted as provided
herein, provided that (i) no Loan may be converted into a Eurodollar Loan when
any Event of Default has occurred and is continuing and the Administrative Agent
has or the Required Lenders have determined that such a conversion is not
appropriate and (ii) no Loan may be converted into a Eurodollar Loan after the
date that is one month prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the Borrower giving
notice to the Administrative Agent, in accordance with clause (ii) of the term
"Interest Period" set forth in subsection 1.1, of the length of the next
Interest Period to be applicable to such Loans, provided that no Eurodollar Loan
may be continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Required Lenders have
determined that such a continuation is not appropriate or (ii) after the date
that is one month prior to the Termination Date and provided, further, that if
the Borrower shall fail to give such notice or if such continuation is not
permitted, such Loans shall be automatically converted to ABR Loans on the last
day of such then expiring Interest Period.
4.4 Minimum Amounts Maximum Number of Tranches. All borrowings, conversions
and continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the Loans
comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole
multiple of $500,000 in excess thereof. In no event shall there be more than
eight Eurodollar Tranches outstanding at any time.
4.5 Optional Prepayments and Commitment Reductions. (a) The Borrower may,
at any time and from time to time, prepay the Loans, in whole or in part,
without premium or penalty, upon at least one Business Day's irrevocable notice
to the Administrative Agent in the case of ABR Loans, and upon at least three
Business Day's irrevocable notice to the Administrative Agent in the case of
Eurodollar Loans, in each case specifying the date and amount of prepayment and
whether the prepayment is of Eurodollar Loans, ABR Loans or a combination
thereof, and, in each case if of a combination thereof, the amount allocable to
each; provided that any prepayment of a Eurodollar Loan is subject to the terms
of subsection 4.14 hereof. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Lender thereof. If any such notice is given,
the amount specified in such notice shall be due and payable on the date
specified therein, together with any amounts payable pursuant
<PAGE>
to subsection 4.14. Partial prepayments shall be in an aggregate principal
amount of $1,000,000 or a whole multiple of $500,000 in excess thereof; provided
that if outstanding principal amount of a Loan is less than $500,000, the
Borrower may prepay the full amount of such Loan.
(b) Subject to subsection 4.5(c), the Borrower shall have the right, upon
not less than three Business Days' notice to the Administrative Agent, to
terminate the Revolving Credit Commitments or, from time to time, to reduce the
amount of the Revolving Credit Commitments. Any such reduction shall be in an
amount equal to $1,000,000 or a whole multiple of $500,000 in excess thereof and
shall reduce permanently the Revolving Credit Commitments then in effect.
Termination of the Revolving Credit Commitments shall also terminate the
obligation of the Issuing Lender to issue Letters of Credit.
(c) In the event of any termination of the Revolving Credit Commitments,
the Borrower shall on the date of such termination repay or prepay all of its
outstanding Revolving Credit Loans (together with accrued and unpaid interest on
the Revolving Credit Loans), reduce the Letter of Credit Outstandings to zero
and cause all Letters of Credit to be canceled and returned to the Issuing
Lender (or shall cash collateralize the Letter of Credit Outstandings on terms
and pursuant to documentation reasonably satisfactory to the Issuing Lender and
the Administrative Agent). In the event of any partial reduction of the
Revolving Credit Commitments, then (i) at or prior to the effective date of such
reduction, the Administrative Agent shall notify the Borrower and the Lenders of
the Aggregate Revolving Credit Exposure of all the Lenders and (ii) if the
Aggregate Revolving Credit Exposure of all the Lenders would exceed the
aggregate Revolving Credit Commitments after giving effect to such reduction,
then, prior to giving effect to such reduction, the Borrower shall, on the date
of such reduction, first, repay or prepay Revolving Credit Loans (together with
accrued and unpaid interest on the Revolving Credit Loans) and, second, reduce
the Letter of Credit Outstandings (or cash collateralize the Letter of Credit
Outstandings on terms and pursuant to documentation reasonably satisfactory to
the Issuing Lender and the Administrative Agent), in an aggregate amount
sufficient to eliminate such excess.
(d) The Loans shall be repaid, and the Letter of Credit Outstandings shall
be reduced or cash collateralized, to the extent required by subsection 4.10.
All such repayments and cash collateralization shall be made in accordance with
subsection 4.5.
(e) (i) In the event the amount of any prepayment of the Loans required to
be made above shall exceed the aggregate principal amount of the outstanding ABR
Loans (the amount of any such excess being called the "Excess Amount"), the
Borrower shall have the right, in lieu of making such prepayment in full, to
prepay all the outstanding applicable ABR Loans and to deposit an amount equal
to the Excess Amount with, and (ii) in the event that Letter of Credit
Outstandings are required to be cash collateralized, the Borrower shall deposit
an amount equal to the aggregate amount of Letter of Credit Outstandings to be
cash collateralized with, the Administrative Agent in a cash collateral account
maintained (pursuant to documentation reasonably satisfactory to the
Administrative Agent) by and in the sole dominion and control of the
Administrative Agent. Any amounts so deposited shall be held by the
Administrative Agent as collateral for the obligations of the Borrower under
this Agreement and applied to the prepayment of the applicable Eurodollar Loans
at the end of the current Interest Periods applicable thereto or Letter of
Credit Outstandings, as the case may be, or, during an Event of Default, to
payment of any obligations under this Agreement (including obligations in
respect of the Letters of Credit). On any Business Day on which (i) collected
amounts remain on deposit in or to the credit of such cash collateral account
after giving effect to the payments made on such day pursuant to this subsection
4.5(e) and (ii) the Borrower shall have delivered to the Administrative Agent a
written request or a telephonic request (which shall be promptly confirmed in
writing) that such remaining collected amounts be invested in the Cash
Equivalent specified in such request, the Administrative Agent shall use its
reasonable efforts to invest such remaining collected amounts in such Cash
Equivalent, provided, however, that the Administrative Agent shall have
continuous dominion and full control over any such investments (and over any
interest that accrues thereon) to the same extent that it has dominion and
control over such cash collateral account and no Cash Equivalent shall mature
after the end of the
<PAGE>
Interest Period for which it is to be applied. The Borrower shall not have the
right to withdraw any amount from such cash collateral account until the
applicable Eurodollar Loans and accrued interest thereon and Letter of Credit
Outstandings are paid in full or if a Default or Event of Default then exists or
would result. Any prepayment or collateralization pursuant to this subsection
4.5(e) shall be applied in the order set forth in clause (ii) of the second
sentence of subsection 4.5(c).
4.6 Commitment Fee; Borrowing Base Increase Fee; Administrative Agent's
Fee; Other Fees. (a) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender:
(i) a commitment fee for the period from and including, for each Lender,
the Restatement Effective Date to but not including the Termination Date,
computed at the Commitment Fee Rate on the average daily amount of the lesser of
(A) the Available Commitment of such Lender and (B) the Borrowing Base
Availability with respect to such Lender, during the period for which payment is
made, payable quarterly in arrears on the last day of each March, June,
September and December (commencing on September 30, 2000) and on the Termination
Date or such earlier date as the Revolving Credit Commitments shall terminate as
provided herein; and
(ii) after the Borrowing Base Period commencing on the Restatement
Effective Date, a Borrowing Base increase fee in an amount equal to 0.15% of the
excess, if any, of (A) the Borrowing Base then in effect over (B) the Borrowing
Base in effect on the first day of the immediately preceding Borrowing Base
Period, payable on the first day of each Borrowing Base Period .
Commitment and Borrowing Base increase fees shall be nonrefundable when paid.
(b) The Borrower shall pay to the Administrative Agent the fees set forth
in the fee letter agreement, dated June 6, 2000, among the Borrower, Chase and
Chase Securities Inc., on the dates specified therein.
4.7 Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:
(a) the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from the Required
Lenders that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period, the Administrative Agent shall give
telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter. If such notice is given (x) any Eurodollar Loans
requested to be made on the first day of such Interest Period shall be made as
ABR Loans, (y) any Loans that were to have been converted on the first day of
such Interest Period to Eurodollar Loans shall be continued as ABR Loans and (z)
any outstanding Eurodollar Loans shall be converted, on the first day of such
Interest Period, to ABR Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Loans to Eurodollar
Loans.
4.8 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower
from the Lenders hereunder, each payment by the Borrower on account of any
commitment fee or Borrowing Base increase fee hereunder and any reduction of the
Revolving Credit Commitments of the Lenders shall be made pro rata according to
the respective Commitment Percentages of the Lenders. Each payment
<PAGE>
(including each prepayment) by the Borrower on account of principal of and
interest on the Loans shall be made pro rata according to the respective
outstanding principal amounts of the Loans then held by the Lenders. All
payments (including prepayments) to be made by the Borrower hereunder, whether
on account of principal, interest, fees or otherwise, shall be made without set
off or counterclaim and shall be made prior to 12:00 Noon, New York City time,
on the due date thereof to the Administrative Agent, for the account of the
Lenders, at the Administrative Agent's office specified in subsection 11.2, in
Dollars and in immediately available funds. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. Subject to the proviso in clause (1) of the definition of "Interest
Period", if any payment hereunder becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.
(b) Unless the Administrative Agent shall have been notified in writing by
any Lender prior to a borrowing that such Lender will not make the amount that
would constitute its Commitment Percentage of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this subsection shall be conclusive in the
absence of manifest error. If such Lender's Commitment Percentage of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days after such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to ABR Loans hereunder, on demand, from the Borrower.
4.9 Computation of Borrowing Base. (a) The Borrowing Base in effect from
time to time shall represent the maximum principal amount (subject to the
aggregate amount of the Revolving Credit Commitments) of Loans and Letter of
Credit Outstandings that the Lenders will allow to remain outstanding during the
Commitment Period. The Borrowing Base shall be determined in accordance with
this subsection 4.9. The Borrowing Base will be based upon the value of certain
Proved Reserves attributable to the Oil and Gas Properties of the Borrower and
its Restricted Subsidiaries and other assets of the Borrower and its Restricted
Subsidiaries acceptable to the Agents in their sole discretion, and will be
determined by the Agents in accordance with paragraph (d) of this subsection
4.9, subject to approval by the Supermajority Lenders. Until the Commitments are
no longer in effect, all Letters of Credit have terminated and all of the Loans
and all other obligations under this Agreement are paid in full, this Agreement
shall be subject to the then effective Borrowing Base. During the period from
and after the Restatement Effective Date until the first Re-determination Date,
the amount of the Borrowing Base shall be $200,000,000;
(b) Prior to March 1 and September 1 of each year (commencing September 1,
2000), the Borrower shall furnish to the Agents and to each Lender Reserve
Reports, which Reserve Reports shall be dated as of the immediately preceding
December 31 (in the case of Reserve Reports due on March 1) and June 30 (in the
case of Reserve Reports due on September 1), and shall set forth, among other
things, (i) the Oil and Gas Properties, then owned by the Borrower and its
Restricted Subsidiaries, (ii) the Proved Reserves attributable to such Oil and
Gas Properties and (iii) a projection of the rate of production and net income
of the Proved Reserves as of the date of such Reserve Report, all in accordance
with the guidelines published by the Securities and Exchange Commission and such
assumptions as the Agents shall provide. Concurrently with the delivery of the
Reserve Reports, the Borrower shall furnish to the Agents and to each Lender a
certificate of a Responsible Officer showing any additions to or deletions from
the Oil and Gas Properties listed in the Reserve Report, which additions or
deletions were made by the Borrower and its Restricted Subsidiaries since the
date of the previous Reserve Report.
<PAGE>
(c) The Borrowing Base shall be re-determined (i) after receipt by the
Agents of each scheduled Reserve Report, (ii) upon the delivery of a Lender
Redetermination Notice to the Borrower and (iii) upon the delivery of a Borrower
Redetermination Notice to the Agents, all as provided in this subsection 4.9.
Within 15 days after the delivery of a Borrower Redetermination Notice or a
Lender Redetermination Notice, the Borrower shall furnish to the Agents and to
each Lender a Reserve Report as of the most recent practicable date. If the
Borrower fails to deliver a Reserve Report within the time period provided for
in the preceding sentence, then the Agents shall have the right to rely on the
last Reserve Report previously delivered by the Borrower with any such
adjustments and taking into account any additional information as the Agents may
deem appropriate, in their sole discretion. On or before the date which is 30
days after receipt (i) of a scheduled semi-annual Reserve Report or (ii) of a
Reserve Report in connection with a Lender Redetermination Notice or a Borrower
Redetermination Notice, the Agents shall re-determine the Borrowing Base in
their sole discretion, and the Agents shall notify the Borrower and the Lenders
of their re-determination of the Borrowing Base. Within 10 days after receipt
from the Agents of the amount of their re-determination of the Borrowing Base,
each Lender shall notify the Agents stating whether or not such Lender agrees
with that re-determination. Failure of any Lender to give such notice within
such period of time shall be deemed to constitute an acceptance of such
re-determination. If the Supermajority Lenders agree with that re-determination,
then the Agents promptly shall notify the Borrower of the Borrowing Base as so
re-determined, whereupon that re-determined value shall automatically become
effective (and shall remain effective until the Borrowing Base is again
re-determined as provided in this subsection 4.9(c)). If the Supermajority
Lenders have not approved or are not deemed to have approved the Borrowing Base
within the 10 day period following their receipt of the proposed amount from the
Agents, the Borrowing Base shall be set at the amount of the then current
Borrowing Base and the Borrowing Base shall remain at such level until the
Supermajority Lenders, utilizing the procedure outlined herein, agree on a new
Borrowing Base. Each re-determination provided for by this subsection 4.9(c)
shall be made in accordance with the provisions of subsection 4.9(d). It is the
intention of the Borrower and the Lenders that the Borrowing Base be
redetermined within 45 days after the furnishing of each Reserve Report, subject
to the provisions of this paragraph (c).
(d) (i) All determinations and re-determinations by the Agents provided for
in this subsection 4.9 (and any determinations and decisions by either or both
of the Agents and the Supermajority Lenders in connection therewith, including
effecting any re-determination of the value of any component contained in a
Reserve Report) shall be made by the Agents and the Lenders in their sole
discretion and shall be made on a reasonable basis and in good faith based upon
the application by the Agents and the Lenders of their respective normal oil and
gas lending criteria as they exist at the time of determination.
(ii) All re-determinations in the Borrowing Base referred to in this
subsection 4.9 shall become effective immediately upon the delivery of notice by
the Agents to the Borrower of the re-determination.
4.10 Borrowing Base Compliance. If, upon any redetermination of the
Borrowing Base pursuant to subsection 4.9, the Aggregate Revolving Credit
Exposure of the Lenders exceeds the Borrowing Base then in effect (any such
excess, the "Borrowing Base Deficiency"), the Borrower shall prepay the
Revolving Credit Loans and then cash collateralize the Letter of Credit
Outstandings in an amount equal to 50% of the Borrowing Base Deficiency within
90 days after the effective date of the redetermination resulting in such
Borrowing Base Deficiency, and within the next 90 days prepay the Revolving
Credit Loans and then cash collateralize the Letter of Credit Outstandings in an
amount equal to the balance of such Borrowing Base Deficiency in each case
together with interest accrued to the date of such payment or prepayment and any
amounts payable under subsection 4.14. If at any other time there exists a
Borrowing Base Deficiency, the Borrower shall immediately prepay the Revolving
Credit Loans and then cash collateralize the Letter of Credit Outstandings in an
amount equal to 100% of such Borrowing Base Deficiency together with interest
accrued to the date of such payment or prepayment and any amounts payable under
subsection 4.14. Prepayments and collateralization pursuant to this subsection
4.10 shall be made as set forth in subsection 4.5(c).
<PAGE>
4.11 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof after the date hereof shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Agreement (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans shall
forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to ABR Loans on the respective
last days of the then current Interest Periods with respect to such Loans or
within such earlier period as required by law. If any such conversion of a
Eurodollar Loan occurs on a day which is not the last day of the then current
Interest Period with respect thereto, the Borrower shall pay to such Lender such
amounts, if any, as may be required pursuant to subsection 4.14.
4.12 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof after the
date hereof or compliance by any Lender with any request or directive (whether
or not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with respect
to this Agreement, any Note, any Letter of Credit, any L/C Application or any
Eurodollar Loan made by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for Non- Excluded Taxes covered by subsection
4.13, changes in the rate or computation of tax on the overall net income of
such Lender, franchise taxes imposed in lieu of net income taxes and doing
business taxes);
(ii) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Lender which
is not otherwise included in the determination of the Eurodollar Rate hereunder;
or
(iii) shall impose on such Lender any other condition; and the result of
any of the foregoing is to increase the cost to such Lender, by an amount which
such Lender deems to be material, of making, converting into, continuing or
maintaining Eurodollar Loans or issuing or participating in Letters of Credit or
to reduce any amount receivable hereunder in respect thereof, then, in any such
case, the Borrower shall promptly, following receipt of the certificate required
in subsection 4.12(c), pay such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of or any change
in any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital as a consequence of its obligations
hereunder or under any Letter of Credit to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, the Borrower shall promptly, following
receipt of the certificate required in subsection 4.12(c), pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.
(c) If any Lender becomes entitled to claim any additional amounts pursuant
to this subsection, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled,
such notice to include a description, in reasonable detail, of the event giving
rise to its claim for such additional amounts; provided that the Borrower shall
not be required to compensate a Lender pursuant to this subsection for any
additional costs incurred more than
<PAGE>
six months prior to the date on which such Lender notifies the Borrower of such
event giving rise to such additional costs and of such Lender's intention to
claim compensation therefor; and provided, further, that, if any adoption or
change of any Requirement of Law or other event giving rise to such claim for
additional compensation is retroactive, then the six-month period referred to
above shall be extended to include the period of retroactive effect thereof. A
certificate as to any additional amounts payable pursuant to this subsection
submitted by such Lender to the Borrower (with a copy to the Administrative
Agent) shall be conclusive in the absence of manifest error. The agreements in
this subsection shall survive the termination of this Agreement and the payment
of the Loans and all other amounts payable hereunder.
4.13 Taxes. (a) All payments made by the Borrower under this Agreement and
any Notes shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes, franchise taxes (imposed in lieu of net
income taxes) and doing business taxes imposed on the Administrative Agent or
any Lender as a result of a present or former connection between the
Administrative Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the
Administrative Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees
deductions or withholdings ("Non-Excluded Taxes") are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder or
under any Note, the amounts so payable to the Administrative Agent or such
Lender shall be increased to the extent necessary to yield to the Administrative
Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Non-U.S. Lender if such Non-U.S. Lender
fails to comply with the requirements of paragraph (b) of this subsection.
Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Administrative Agent for its
own account or for the account of such Lender, as the case may be, a certified
copy of an original official receipt received by the Borrower showing payment
thereof. If, when the Borrower is required by this subsection 4.14(a) to pay any
Non-Excluded Taxes, the Borrower fails to pay any Non-Excluded Taxes when due to
the appropriate taxing authority or fails to remit to the Administrative Agent
the required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The agreements in this subsection shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) Each Lender (or Transferee) that is not a "U.S. Person" as defined in
Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or,
in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit G and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other
<PAGE>
provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(c) A Lender that is entitled to an exemption from or reduction of non-U.S.
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.
(d) The agreements in this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
4.14 Indemnity. The Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur (other than through such Lender's gross negligence or willful misconduct)
as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of a Eurodollar
Loan after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of or conversion
of Eurodollar Loans on a day which is not the last day of an Interest Period
with respect thereto. To be entitled to such indemnity, such Lender shall
provide the Borrower with a certificate showing in reasonable detail
calculations utilized to ascertain the amount of such Lender's losses (which
calculations shall be conclusive, absent manifest error) and the Borrower shall,
promptly following receipt of such certificate, pay the Lender the amounts
calculated therein; provided that the Borrower shall not be required to
compensate a Lender pursuant to this subsection for any loss incurred more than
six months prior to the date on which such Lender notifies the Borrower of such
event giving rise to such additional costs and of such Lender's intention to
claim compensation therefor. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or converted, or not so borrowed, converted or continued,
for the period from the date of such prepayment or conversion or of such failure
to borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Eurodollar Loans provided for herein
(excluding, however, the percentage added to the Eurodollar Rate pursuant to
subsection 4.1(a) to the extent included therein) over (ii) the amount of
interest (as reasonably determined by such Lender) which would have accrued to
such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market. This covenant
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
4.15 Change of Lending Office. (a) Each Lender agrees that if it makes any
demand for payment under subsection 4.12 or 4.13(a), or if any adoption or
change of the type described in subsection 4.11 shall occur with respect to it,
it will use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions and so long as such efforts would not be
disadvantageous to it, as determined in its sole discretion) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under subsection 4.12 or
4.13(a), or would eliminate or reduce the effect of any adoption or change
described in subsection 4.11.
(b) If any Lender shall assert that any adoption or change of the type
described in subsection 4.11 hereof has occurred with respect to it, or if any
Lender requests compensation under subsection 4.12, or if the Borrower is
required to pay any additional amount to any Lender or any
<PAGE>
Governmental Authority for the account of any Lender pursuant to subsection
4.13, or if any Lender defaults in its obligation to fund Loans hereunder, then
the Borrower may, at its expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to, and such Lender promptly shall,
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in subsection 11.6), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) if such assignee is not a Lender or an Affiliate
thereof, the Borrower shall have received the prior written consent of the
Administrative Agent and Issuing Lender which consents shall not unreasonably be
withheld or delayed, (ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans and participations in Letters of
Credit, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (at least to the extent of such outstanding
principal) and the Borrower (in the case of all other amounts) and (iii) in the
case of any such assignment resulting from a claim for compensation under
subsection 4.12 or payments required to be made pursuant to subsection 4.13,
such assignment will result in a reduction in such compensation or payments
compared to the compensation or payments payable to the assigning Lender. A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
no longer exist or cease to apply.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower hereby represents and warrants to the Administrative Agent
and each Lender that:
5.1 Financial Condition. (a) The consolidated balance sheets of the
Borrower and its consolidated Subsidiaries at December 31, 1998 and December 31,
1999 and the related consolidated statements of operations, of stockholders'
equity and of cash flows for the respective fiscal years ended on such dates,
together with the related notes and schedules thereto, reported on by Arthur
Andersen LLP, copies of which have heretofore been furnished to each Lender,
present fairly in all material respects the consolidated financial condition of
the Borrower and its consolidated Subsidiaries as at such dates, and the
consolidated results of their operations and their consolidated cash flows for
the respective fiscal years then ended.
(b) The unaudited condensed consolidated balance sheet of the Borrower and
its consolidated Subsidiaries at March 31, 2000 and the related unaudited
condensed consolidated statements of operations, of stockholders' equity and of
cash flows for the 3-month period ended on such dates, together with the related
notes and schedules thereto, certified by a Responsible Officer, copies of which
have heretofore been furnished to each Lender, present fairly in all material
respects the consolidated financial condition of each of the Borrower and its
consolidated Subsidiaries as at such dates, and the consolidated results of
their respective operations and their consolidated cash flows for the 3-month
period then ended (subject to normal year-end audit adjustments).
(c) All such financial statements referred to in subsections 5.1(a) and
(b), including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by such accountants or Responsible Officer, as the case may
be, and as disclosed therein). On the Restatement Effective Date, except for
this Agreement, the other Loan Documents, the Subordinated Note Documents and
the matters disclosed in Schedule 5.1 and 5.20, neither the Borrower nor any of
its consolidated Subsidiaries have, at the date of the most recent balance sheet
referred to above, any material Guarantee Obligation, contingent liability or
liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including, without limitation, any Hedging Agreements, which is not
reflected in the financial statements referred to in subsection 5.1(a) or 5.1(b)
or in the notes thereto to the extent required by GAAP. During the period from
January 1, 2000 to and including the date hereof, there has been no sale,
transfer or other
<PAGE>
disposition by the Borrower or any of its consolidated Subsidiaries of any
material part of its business or Property and no purchase or other acquisition
of any business or Property (including any capital stock of any other Person)
material in relation to the consolidated financial condition of the Borrower and
its consolidated Subsidiaries at December 31, 1999, other than as set forth on
Schedule 5.1.
5.2 No Change. (a) Since December 31, 1999, there has been no development,
circumstance or event which has had or could reasonably be expected to have a
Material Adverse Effect, and (b) during the period from January 1, 2000 to and
including the date hereof no dividends or other distributions have been
declared, paid or made upon the Capital Stock of the Borrower nor has any of the
Capital Stock of the Borrower been redeemed, retired, purchased or otherwise
acquired for value by the Borrower or any of its Subsidiaries, other than, in
each case, as set forth in Schedule 5.2.
5.3 Existence; Compliance with Law. Each of the Borrower and its Restricted
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the corporate,
partnership or limited liability company (as the case may be) power and
authority, and the legal right, to own and operate its Property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of Property or the
conduct of its business requires such qualification and (d) is in compliance
with all applicable Requirements of Law except to the extent that the failure to
be so qualified or to comply with such Requirements of Law could not reasonably
be expected to have, in the aggregate, a Material Adverse Effect.
5.4 Power; Authorization; Enforceable Obligations. The Borrower and each of
the other Loan Parties has the corporate, partnership or limited liability
company (as the case may be) power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to borrow hereunder and has taken all necessary corporate,
partnership or limited liability company (as the case may be) action to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or the delivery,
performance, validity or enforceability of the Loan Documents to which each Loan
Party is a party other than those which have been obtained and are in full force
and effect. This Agreement has been, and each other Loan Document to which any
Loan Party is a party will be, duly executed and delivered on behalf of such
Loan Party. This Agreement constitutes, and each other Loan Document to which
any Loan Party is a party when executed and delivered will constitute, a legal,
valid and binding obligation of such Loan Party enforceable against such Loan
Party in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent transfer or conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
5.5 No Legal Bar. The execution, delivery and performance of the Loan
Documents, the borrowings hereunder and the use of the proceeds thereof will not
violate any applicable Requirement of Law or Contractual Obligation of the
Borrower or of any of its Restricted Subsidiaries, to the extent such violation
could reasonably be expected to have a Material Adverse Effect and will not
result in, or require, the creation or imposition of any Lien on any of its or
their respective Properties or revenues pursuant to any such Requirement of Law
or Contractual Obligation, other than the Liens created pursuant to the Pledge
Agreement.
5.6 No Material Litigation. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower, threatened by or against the Borrower or any of its
Restricted Subsidiaries or against any of its or their respective Properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
<PAGE>
5.7 No Default. Neither the Borrower nor any of its Restricted Subsidiaries
is in default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
5.8 Ownership of Property; Liens. (a) Except for the Oil and Gas
Properties, the Borrower and its Restricted Subsidiaries each have good title in
fee simple to, or a valid leasehold interest in, all its material real Property
and material interests in real Property, and good title to, or a valid leasehold
interest in, all its other material Property, and none of such Property is
subject to any Lien except as permitted by subsection 8.3.
(b) The Borrower and its Restricted Subsidiaries each have good and
defensible title to all of its Oil and Gas Properties included in the most
recent Reserve Report which are not personal property and good title to all such
Oil and Gas Properties which are personal property and material to the Borrower
and its Restricted Subsidiaries taken as a whole, except for (i) such
imperfections of title as do not in the aggregate materially detract from the
value thereof to, or the use thereof in, the business of the Borrower or any of
its Restricted Subsidiaries, (ii) Oil and Gas Properties disposed of since the
date of the most recent Reserve Report as permitted by subsection 8.6 hereof,
and (iii) Liens permitted by subsection 8.3 hereof. The quantum and nature of
the interest of the Borrower and its Restricted Subsidiaries in and to the Oil
and Gas Properties as set forth in each Reserve Report (including the Initial
Reserve Report) includes the entire interest of the Borrower and its Restricted
Subsidiaries in such Oil and Gas Properties as of the date of such Reserve
Report and are complete and accurate in all material respects as of the date of
such Reserve Report; and there are no "back-in" or "reversionary" interests held
by third parties which could materially reduce the interest of the Borrower and
its Restricted Subsidiaries in such Oil and Gas Properties except as expressly
set forth in such Reserve Report. The ownership of the Oil and Gas Properties by
the Borrower and its Restricted Subsidiaries shall not in any material respect
obligate any such Person to bear the costs and expenses relating to the
maintenance, development or operations of each such Oil and Gas Property in an
amount in excess of the working interest of such Person in each Oil and Gas
Property set forth in the most recent Reserve Report.
5.9 Intellectual Property. Each of the Borrower and its Restricted
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does the
Borrower know of any valid basis for any such claim which could reasonably be
expected to have a Material Adverse Effect. The use of such Intellectual
Property by the Borrower and its Restricted Subsidiaries does not infringe on
the rights of any Person, except for such claims and infringements that, in the
aggregate, could not be reasonably expected to have a Material Adverse Effect.
5.10 No Burdensome Restrictions. No applicable Requirement of Law or
Contractual Obligation of the Borrower or any of its Restricted Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
5.11 Taxes. Each of the Borrower and its Restricted Subsidiaries has filed
all material tax returns which, to the knowledge of such Person, are required to
be filed by it and has paid or caused to be paid all taxes shown on said returns
and all material assessments, fees and other governmental charges levied upon it
or upon any of its Property or income which are due and payable, other than such
taxes, assessments, fees and other governmental charges, if any, as are being
diligently contested in good faith and by appropriate proceedings and with
respect to which there have been established adequate reserves on the books of
the Borrower or its Restricted Subsidiaries, as the case may be, in accordance
with GAAP. No tax Lien has been filed and, to the knowledge of the Borrower, no
claim is being asserted, with respect to any such taxes or material assessments,
fees or other governmental charges, other than claims which are being contested
in good faith by appropriate proceedings, provided that
<PAGE>
adequate reserves with respect thereto are being maintained on the books of the
Borrower or the applicable Restricted Subsidiary, as the case may be, in
conformity with GAAP.
5.12 Federal Reserve Regulations. No part of the proceeds of any Loans, and
no other Extensions of Credit hereunder, will be used for "buying" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the Board. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.
5.13 ERISA. Except where the liability could not reasonably be expected to
have a Material Adverse Effect: (a) neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied with the applicable provisions of ERISA and the
Code; (b) no termination of a Single Employer Plan has occurred, and no Lien on
property of the Borrower or any Commonly Controlled Entity in favor of the PBGC
or a Plan has arisen, during such five-year period; (c) the present value of all
accrued benefits under each Single Employer Plan (based on those assumptions
used to fund such Plans) did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made, exceed the value
of the assets of such Plan allocable to such accrued benefits; (d) neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan, and neither the Borrower nor any
Commonly Controlled Entity would become subject to any liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made; and (e) no such
Multiemployer Plan is in Reorganization or Insolvent.
5.14 Investment Company Act; Other Regulations. Neither the Borrower nor
any of its Restricted Subsidiaries is (a) an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
Neither the Borrower nor any of its Restricted Subsidiaries is subject to
regulation under any Federal or State statute or regulation (other than
Regulation X of the Board) which limits its ability to incur Indebtedness under
this Agreement or the other Loan Documents.
5.15 Subsidiaries. The Persons listed on Schedule 5.15 constitute all the
Subsidiaries of the Borrower at the date hereof. Such Schedule sets forth the
status of such Subsidiaries, as of the date hereof, as Restricted Subsidiaries
or Unrestricted Subsidiaries and sets forth the net book value of the assets
owned by each of the Unrestricted Subsidiaries listed on such Schedule.
5.16 Purpose of Loans. The proceeds of the Loans and the Letters of Credit
will be used for working capital and for the general corporate purposes of the
Borrower and its Subsidiaries in the ordinary course of business.
5.17 Environmental Matters. Other than exceptions to any of the following
that could not, individually or in the aggregate, reasonably be expected to give
rise to a Material Adverse Effect:
(a) each of the Borrower and its Restricted Subsidiaries: (i) is, and
within the period of all applicable statutes of limitation has been, in
compliance with all applicable Environmental Laws; (ii) holds or is entitled to
the benefits of all Environmental Permits (each of which is in full force and
effect) required for any of its current or planned operations or for any
Property owned, leased, or otherwise operated by it; (iii) is, and within the
period of all applicable statutes of limitation has been, in compliance with all
of its Environmental Permits; and (iv) reasonably believes that (A) each of its
Environmental Permits will be timely renewed without expense, (B)
<PAGE>
any additional Environmental Permits which it has reason to believe will be
required will be timely obtained without expense, and (C) the costs of complying
with such renewed or additional Environmental Permits and any other
Environmental Laws applicable to or reasonably expected to apply to the Borrower
and its Restricted Subsidiaries will not exceed the Borrower's and its
Subsidiaries' existing costs of complying with Environmental Permits and
Environmental Laws.
(b) Materials of Environmental Concern have not been transported, disposed
of, emitted, discharged, or otherwise released or threatened to be released, to
or at any real property presently or formerly owned, leased or operated by the
Borrower or any Restricted Subsidiary or at any other location, which could
reasonably be expected to (i) give rise to liability of the Borrower or any
Restricted Subsidiary under any applicable Environmental Law, (ii) interfere
with the Borrower's continued operations, or (iii) impair the fair saleable
value of any material real property owned or leased by the Borrower or any
Restricted Subsidiary.
(c) no judicial, administrative, or arbitral proceeding (including any
notice of violation or alleged violation) under or relating to any Environmental
Law to which the Borrower or any Restricted Subsidiary is, or to the knowledge
of the Borrower will be, named as a party is pending or, to the knowledge of the
Borrower, threatened.
(d) the Borrower has not received any written request for information, or
been notified that it or any Restricted Subsidiary is a potentially responsible
party under the federal Comprehensive Environmental Response, Compensation, and
Liability Act or any similar Environmental Law, or with respect to any Materials
of Environmental Concern.
(e) neither the Borrower nor any Restricted Subsidiary has entered into or
agreed to any consent decree, order, or settlement or other agreement, nor is
subject to any judgment, decree, or order or other agreement, in any judicial,
administrative, arbitral, or other forum, relating to compliance with or
liability under any Environmental Law.
(f) neither the Borrower nor any Restricted Subsidiary has assumed or
retained, by contract or operation of law, any liabilities of any kind, fixed,
contingent or otherwise, under any Environmental Law.
5.18 No Material Misstatements. (a) All written information, reports,
financial statements, exhibits and schedules furnished to any Agent or any
Lender by or on behalf of the Borrower or any of its Subsidiaries in connection
with the negotiation of any Loan Document or included therein or delivered
pursuant thereto, when taken as a whole, did not contain, and as they may be
amended, supplemented or modified from time to time, will not contain, as of the
date such statements were made, any untrue statements of a material fact and did
not omit, and as they may be amended, supplemented or modified from time to
time, will not omit, to state as of the date such statements were made, any
material fact necessary in order to make the statements contained therein, in
the light of the circumstances under which they were, are or will be made, not
materially misleading.
(b) All projections and estimates concerning the Borrower and its
Subsidiaries that are or have been made available to any Agent or any Lender by
or on behalf of the Borrower or any of its Subsidiaries, have been or will be
prepared based on good faith estimates and based upon assumptions either
provided by one or more of the Agents and the Lenders, required by applicable
Requirements of Law or believed by the Borrower to be reasonable at the time of
such preparation.
5.19 Insurance. Each of the Borrower and its Restricted Subsidiaries
carries and maintains with respect to its insurable properties insurance
(including, to the extent consistent with past practices, self-insurance) with
financially sound and reputable insurers of the types, to such extent and
against such risks as is customary with companies in the same or similar
businesses.
<PAGE>
5.20 Future Commitments. As of the date hereof and as of the Restatement
Effective Date, except as set forth on Schedule 5.20, on a net basis there are
no material gas imbalances, take-or- pay or other prepayments with respect to
any Oil and Gas Property of the Borrower or any Restricted Subsidiary which
would require the Borrower or any Restricted Subsidiary to deliver Hydrocarbons
produced from Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor.
5.21 Pledge Agreement. (a) The provisions of the Pledge Agreement and the
initial transaction statements, where applicable, delivered to the
Administrative Agent pursuant to the forms attached to the Pledge Agreement are
effective to create in favor of the Administrative Agent, for the ratable
benefit of the Lenders, a legal, valid and enforceable security interest in the
Pledged Securities and proceeds thereof and, (i) when certificates representing
or constituting any of the Pledged Securities are delivered to the
Administrative Agent and (ii) when UCC-1 financing statements are filed in the
offices set forth in Schedule 5.21, the Pledge Agreement shall constitute a
fully perfected first priority lien on, and security interest in, all right,
title and interest of the pledgor party therein in such Pledged Securities and
the proceeds thereof, in each case prior and superior in right to any other
Person.
(b) On the Restatement Effective Date, the shares of Capital Stock listed
on Schedule I to the Pledge Agreement will constitute all the issued and
outstanding shares of Capital Stock of the issuers thereof listed on said
Schedule owned by the Loan Parties; all such shares have been duly and validly
issued and are fully paid and nonassessable; and the relevant Pledgor of said
shares is the record and beneficial owner of said shares.
5.22 Coda Indenture. The execution, delivery and performance of the Loan
Documents, the Extensions of Credit and the incurrence of Indebtedness hereunder
and the use of the proceeds of such Extensions of Credit have not violated and
will not violate any applicable provision of the Coda Indenture. The Notes and
the Indebtedness evidenced hereby and thereby are "Senior Debt" and "Designated
Senior Debt" as such terms are defined in the Coda Indenture, and the Subsidiary
Guarantee is a "Senior Guarantee" as such term is defined in the Coda Indenture.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Extensions of Credit. The agreement of each
Lender to make the initial Loan requested to be made by it and of the Issuing
Lender to issue the initial Letter of Credit to be issued by it is subject to
the satisfaction, immediately prior to or concurrently with the making of such
Loan and the issuance of such Letter of Credit on the Restatement Effective
Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (with the
number of original counterparts requested by the Administrative Agent) (i) this
Agreement, executed and delivered by a duly authorized officer of the Borrower
and each Agent, with a counterpart for each Lender, (ii) the Pledge Agreement,
executed and delivered by a duly authorized officer of each Loan Party thereto
and (iii) the Subsidiary Guarantee, executed and delivered by a duly authorized
officer of each Loan Party thereto.
(b) Existing Credit Agreement. (i) All accrued and unpaid interest, fees,
commission and other amounts (other than principal) owing under the Existing
Credit Agreement shall have been paid.
(ii) The Loans outstanding under the Existing Credit Agreement shall have
been reallocated as directed by the Administrative Agent, with the result that
the Loans will be held by the Lenders in accordance with their respective
Commitment Percentages.
(iii) Each lender party to the Existing Credit Agreement that will not
continue as a Lender hereunder and each Lender hereunder will make such payments
among themselves as
<PAGE>
directed by the Administrative Agent so that, after giving effect thereto, the
outstanding Loans will be held by the Lenders in accordance with their
respective Commitment Percentages and with Interest Periods that all begin on
the Closing Date and end on the same later date.
(c) Related Agreements. The Administrative Agent shall have received true
and correct copies, certified as to authenticity by the Borrower, of such
documents or instruments as may be reasonably requested by the Administrative
Agent, including, without limitation, a copy of any debt instrument or security
agreement to which the Borrower and its Subsidiaries will be a party after the
Restatement Effective Date.
(d) Borrowing Certificate. The Administrative Agent shall have received
(with the number of original counterparts requested by the Administrative
Agent), a certificate of the Borrower, dated the Restatement Effective Date,
substantially in the form of Exhibit D, with appropriate insertions and
attachments, satisfactory in form and substance to the Administrative Agent,
executed by a Responsible Officer of the Borrower.
(e) Proceedings of the Loan Parties. The Administrative Agent shall have
received (with the number of original counterparts requested by the
Administrative Agent), a copy of the resolutions or other equivalent
authorization, in form and substance satisfactory to the Administrative Agent,
of the Board of Directors (or partners or members, as appropriate) of each Loan
Party authorizing (i) the execution, delivery and performance of this Agreement
and the Loan Documents to which it is a party and (ii) in the case of the
Borrower, the borrowings contemplated hereunder, certified by the Secretary or
an Assistant Secretary of such Loan Party (or of its general partner or managing
member, as appropriate) as of the Restatement Effective Date, which certificate
shall be in form and substance reasonably satisfactory to the Administrative
Agent and shall state that the resolutions (or other equivalent authorization)
thereby certified have not been amended, modified, revoked or rescinded.
(f) Loan Party Incumbency Certificates. The Administrative Agent shall have
received (with the number of original counterparts requested by the
Administrative Agent), a certificate of each Loan Party, dated the Closing Date,
as to the incumbency and signature of the officers of such Loan Party (or of its
general partner or managing member, as appropriate), executing any Loan Document
reasonably satisfactory in form and substance to the Administrative Agent,
executed by the President or any Vice President and the Secretary or any
Assistant Secretary (or by its general partner or managing member, as
appropriate) of such Loan Party.
(g) Constitutional Documents. The Administrative Agent shall have received
(with the number of original counterparts requested by the Administrative
Agent), true and complete copies of the constitutional documents of each Loan
Party, certified as of the Closing Date as complete and correct copies thereof
by the Secretary or an Assistant Secretary (or by its general partner or
managing member, as appropriate) of such Loan Party.
(h) Consents, Licenses and Approvals. All governmental and third party
approvals (including consents) necessary or, in the discretion of the
Administrative Agent, advisable in connection with the continuing operations of
the Borrower and its Restricted Subsidiaries and the execution, delivery and
performance of the Loan Documents shall have been obtained and be in full force
and effect, and all applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose material and adverse conditions on this
Agreement and the other Loan Documents and the transactions contemplated hereby
and thereby. The Administrative Agent shall have received, with a counterpart
for each Lender, a certificate of the Borrower as to the foregoing.
(i) Fees. Each of the Lenders and the Agents shall have received all fees
and expenses required to be paid on or before the Restatement Effective Date for
which invoices have been presented.
<PAGE>
(j) Legal Opinions. The Administrative Agent shall have received (i) an
executed legal opinion of Vinson & Elkins L.L.P., counsel to the Borrower and
each Pledgor and Guarantor, substantially in the form of Exhibit C and (ii) such
other legal opinions as the Administrative Agent may reasonably require, each
satisfactory in form and substance to the Administrative Agent. Such legal
opinions shall cover all matters incident to the transactions contemplated by
this Agreement, as the Administrative Agent may reasonably require.
(k) Pledged Securities. The Administrative Agent shall have received the
certificates representing the certificated Pledged Securities pledged pursuant
to the Pledge Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the Pledgor
thereof, endorsed in blank by a duly authorized officer of the Pledgor thereof.
(l) Actions to Perfect Liens. The Administrative Agent shall have received
evidence in form and substance satisfactory to it that all filings, recordings,
registrations and other actions, including, without limitation, the filing of
duly executed financing statements on form UCC-1, necessary or, in the opinion
of the Administrative Agent, desirable to perfect the Liens created by the
Pledge Agreement shall have been completed.
(m) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be reasonably satisfactory in form and substance to the Administrative Agent,
and the Administrative Agent shall have received such other documents in respect
of any aspect or consequence of the transactions contemplated hereby or thereby
as it shall reasonably request.
6.2 Conditions to Each Extension of Credit. The agreement of each Lender to
make any Extension of Credit requested to be made by it on any date (including,
without limitation, its initial Extension of Credit and any renewal or extension
of a Letter of Credit) is subject to the satisfaction of the following
conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by each Loan Party in or pursuant to the Loan Documents shall be
true and correct on and as of such date as if made on and as of such date
(unless such representations and warranties are stated to relate to a specific
earlier date, in which case such representations and warranties shall be true
and correct as of such earlier date).
(b) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the Extensions of Credit
requested to be made on such date.
Each borrowing by, and Letter of Credit issued on behalf of, the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date thereof that the conditions contained in (a) and (b) of this subsection
have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Loan, Note or Letter of Credit remains outstanding and unpaid or any
amount is owing to any Lender or the Administrative Agent hereunder or under any
other Loan Document, the Borrower shall and (except in the case of delivery of
financial information, reports and notices) shall cause each of its Restricted
Subsidiaries to:
<PAGE>
7.1 Financial Statements. Furnish to the Administrative Agent and to each
of the Lenders:
(a) as soon as available, but in any event within 90 days after the end of
each fiscal year of the Borrower, (i) a copy of the consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such year and
the related consolidated statements of operations, stockholders' equity and cash
flows for such year, setting forth in each case in comparative form the figures
for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by Arthur Andersen LLP or other independent certified public accountants
of nationally recognized standing reasonably acceptable to the Required Lenders
and (ii) a copy of the consolidated balance sheet of the Borrower and its
Restricted Subsidiaries as at the end of such year and the related consolidated
statements of operations, stockholders' equity and cash flows for such year,
setting forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer as being fairly stated in all material
respects; and
(b) as soon as available, but in any event not later than 45 days after the
end of each of the first three quarterly fiscal periods of each fiscal year of
the Borrower and its consolidated Subsidiaries, (i) the unaudited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the end of
such quarter and the related unaudited consolidated statements of operations,
stockholders' equity and cash flows of the Borrower and its consolidated
Subsidiaries for such quarter and the portion of the fiscal year through the end
of such quarter and (ii) the unaudited consolidated balance sheet of the
Borrower and its Restricted Subsidiaries as at the end of such quarter and the
related unaudited consolidated statements of operations, stockholders' equity
and cash flows of the Borrower and its Restricted Subsidiaries for such quarter
and the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end and audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in accordance with GAAP applied consistently
throughout the periods reflected therein and with prior periods (except as
approved by such accountants or officer, as the case may be, and disclosed
therein).
7.2 Certificates; Other Information. Furnish to the Administrative Agent
and to each of the Lenders:
(a) concurrently with the delivery of the financial statements referred to
in subsections 7.1(a) and (b), a certificate of a Responsible Officer stating
that, to the best of such officer's knowledge, during such period (i) no
Subsidiary has been formed or acquired (or, if any Restricted Subsidiary has
been formed or acquired, the Borrower and such Restricted Subsidiary complied
with the requirements of subsection 7.9 with respect thereto) and (ii) the
Borrower has observed or performed all of its covenants (and setting forth the
calculations used to determine compliance with the covenants set forth in
subsection 8.1) and other agreements, and satisfied every condition, contained
in this Agreement and the other Loan Documents to be observed, performed or
satisfied by it, and that such officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate;
(b) within five days after the same are sent, copies of all financial
statements and reports which the Borrower sends to its stockholders, and within
five days after the same are filed, copies of all financial statements and
reports, if any, which the Borrower may make to, or file with, the Securities
and Exchange Commission or any successor or analogous Governmental Authority;
(c) promptly upon receipt thereof, copies of all reports and management
letters submitted to the Borrower or any Restricted Subsidiary by independent
public accountants in
<PAGE>
connection with any interim or special audit of the books or operations of the
Borrower or such Restricted Subsidiary made by such accountants;
(d) together with any Reserve Report delivered pursuant to subsection 4.9,
a schedule identifying the pricing and notional volumes on the open Commodity
Price Risk Management Agreements of the Borrower and its Restricted Subsidiaries
as of the fiscal quarter ending on the date of such Reserve Report;
(e) deliver to the Administrative Agent within 30 days of obtaining any
renewal or replacement insurance policies as and when required by subsection
7.5, certificates of insurance evidencing the Borrower's compliance with
subsection 7.5;
(f) promptly, such additional financial and other information concerning
the Borrower and its Subsidiaries as any Lender (acting through the
Administrative Agent) may from time to time reasonably request; and
(g) concurrently with the delivery of the financial statements referred to
in subsections 7.1(a) and (b), a certificate of a Responsible Officer stating
that, to the best of such officer's knowledge, all Extensions of Credit made
during such period were permitted to be incurred under Section 4.09 of the Coda
Indenture, and setting forth in reasonable detail any calculations necessary to
determine compliance with such covenant.
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all of its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or the applicable Restricted Subsidiary, as the case
may be.
7.4 Conduct of Business and Maintenance of Existence; Compliance with Law
and Contractual Obligations. Continue to engage in business of the same general
type as now conducted by it and preserve, renew and keep in full force and
effect its corporate existence and take all reasonable action to maintain all
rights, privileges and franchises necessary or desirable in the normal conduct
of its business, except as otherwise permitted by subsection 8.5; comply with
all Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not reasonably be expected to have, in the
aggregate, a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. Keep all material property owned or
leased by it that is useful and necessary in its business in good working order
and condition, ordinary wear and tear excepted; maintain with financially sound
and reputable insurance companies insurance of such types, in such amounts and
against such risks as is customary to be maintained by companies engaged in the
same or a similar business in the same general area; and furnish to the
Administrative Agent, upon written request, full information as to the insurance
carried.
7.6 Inspection of Property; Books and Records; Discussions. Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit, upon
reasonable prior notice, representatives of any Lender to visit, subject to
compliance with the terms of any applicable Requirements of Law or corporate
policy, and inspect any of its properties and examine and make abstracts from
any of its books and records during normal business hours and as often as may
reasonably be requested through the Administrative Agent and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.
7.7 Notices. Promptly give notice to the Administrative Agent of:
<PAGE>
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual Obligation of
the Borrower or any of its Restricted Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Borrower or
any of its Restricted Subsidiaries and any Governmental Authority, which could
reasonably be expected to have, in the opinion of a Responsible Officer, a
Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Restricted Subsidiaries which could reasonably be expected, in the opinion of a
Responsible Officer, to result in an adverse judgment of $1,000,000 or more not
covered by insurance or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event within 30
days after the Borrower knows or has reason to know thereof to the extent any
such event could reasonably be expected to have a Material Adverse Effect: (i)
the occurrence or expected occurrence of any Reportable Event with respect to
any Single Employer Plan, a failure by the Borrower or any Commonly Controlled
Entity to make any required contribution to a Plan, the creation of any Lien on
the property of the Borrower or any Commonly Controlled Entity in favor of the
PBGC or a Plan or any withdrawal by the Borrower or any Commonly Controlled
Entity from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of any
other action by the PBGC or the Borrower or any Commonly Controlled Entity or
any Multiemployer Plan with respect to the withdrawal by the Borrower or any
Commonly Controlled Entity from, or the terminating, Reorganization or
Insolvency of, any Plan; and
(e) any other event which could reasonably be expected to have or has had,
in the opinion of a Responsible Officer, a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what the Borrower and its Restricted Subsidiaries have taken
or propose to take with respect thereto.
7.8 Environmental Laws. (a) (i) Comply with all Environmental Laws, and
obtain, comply with and maintain any and all Environmental Permits necessary for
its operations as conducted and as planned; and (ii) take all reasonable efforts
to ensure that all of its tenants, subtenants, contractors, subcontractors, and
invitees comply with all Environmental Laws, and obtain, comply with and
maintain any and all Environmental Permits, applicable to any of them insofar as
any failure to so comply, obtain or maintain reasonably could be expected to
have a Material Adverse Effect. For purposes of this subsection 7.8(a),
noncompliance by the Borrower or any of its Restricted Subsidiaries with any
applicable Environmental Law or Environmental Permit shall be deemed not to
constitute a breach of this covenant provided that, upon learning of any actual
or suspected noncompliance, the Borrower and its Restricted Subsidiaries shall
promptly undertake all reasonable efforts to achieve compliance, and provided
further that, in any case, such non-compliance, and any other noncompliance with
Environmental Law, individually or in the aggregate, could not reasonably be
expected to give rise to a Material Adverse Effect or materially and adversely
affect the value of any material Property considered for calculation of the
Borrowing Base.
(b) Comply with all orders and directives of all Governmental Authorities
regarding Environmental Laws, other than such orders and directives as to which
an appeal or other appropriate action to contest such order or directive has
been timely and properly taken in good faith, or where non- compliance could not
reasonably be expected to give rise to a Material Adverse Effect.
(c) Prior to acquiring any ownership or leasehold interest in real property
or other interest in any real property that could give rise to the Borrower
being subject to potential significant
<PAGE>
liability under or violations of any Environmental Law which potential liability
or violations, if incurred, could reasonably be expected to have a Material
Adverse Effect: (i) notify the Administrative Agent; and (ii) if requested by
the Administrative Agent, provide to the Administrative Agent a written report
by an environmental consultant reasonably acceptable to the Administrative Agent
assessing the presence or potential presence of significant levels of any
Materials of Environmental Concern on, under, in, or about the property, or of
other conditions that could give rise to potentially significant liability or
violations of any Environmental Law.
7.9 Additional Collateral. (a) With respect to any Person that, subsequent
to the Restatement Effective Date, becomes a Restricted Subsidiary (other than a
Foreign Subsidiary), promptly: (i) cause the Capital Stock of such Person owned
by the Borrower and any Restricted Subsidiary to be pledged to the
Administrative Agent, for the ratable benefit of the Lenders, pursuant to
documentation reasonably satisfactory to the Administrative Agent, and take all
actions reasonably necessary or advisable to cause the Lien thereon to be duly
perfected in accordance with all applicable Requirements of Law, and deliver any
certificates representing such Capital Stock to the Administrative Agent,
together with undated stock powers executed and delivered in blank by a duly
authorized officer of the Borrower or such Restricted Subsidiary, as the case
may be, and (ii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described in clause
(i) immediately preceding, which opinions shall be in form and substance, and
from counsel, reasonably satisfactory to the Administrative Agent.
(b) With respect to any Person that, subsequent to the Restatement
Effective Date, becomes a Restricted Subsidiary and is a Foreign Subsidiary,
promptly: (i) execute and deliver to the Administrative Agent a new pledge
agreement as the Administrative Agent shall deem reasonably necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a Lien on the Capital Stock of such Subsidiary which is owned by the Borrower or
any Restricted Subsidiary (provided that in no event shall more than 65% of the
Capital Stock of any such Subsidiary be required to be so pledged), (ii) deliver
to the Administrative Agent any certificates representing such Capital Stock,
together with undated stock powers executed and delivered in blank by a duly
authorized officer of the Borrower or such Restricted Subsidiary, as the case
may be, and take or cause to be taken all such other actions under the law of
the jurisdiction of organization of such Foreign Subsidiary as may be reasonably
necessary or advisable to perfect such Lien on such Capital Stock and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described in clauses (i) and (ii) immediately
preceding, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
7.10 Maintenance and Operation of Property. To the extent that the failure
to comply could reasonably be expected to have a Material Adverse Effect and
consistent with the standards of a reasonably prudent operator:
(a) Maintain, develop, and operate Borrower's Oil and Gas Properties, and
oil and gas gathering assets in a good and workmanlike manner, and observe and
comply with all of the terms and provisions, express or implied, of all oil and
gas leases relating to the Properties so long as the oil and gas leases are
capable of producing Hydrocarbons in quantities and at prices providing for
continued efficient and profitable operation of business;
(b) Comply in all material respects with all contracts and agreements
applicable to or relating to Borrower's Oil and Gas Properties or the production
and sale of Hydrocarbons therefrom;
(c) At all times, maintain, preserve, and keep all operating equipment used
with respect to Borrower's Oil and Gas Properties, and oil and gas gathering
assets in proper repair, working order and condition, and make all necessary or
appropriate repairs, renewals, replacements, additions and improvements thereto
so that the efficiency of the operating equipment shall at all times be properly
preserved and maintained, provided that no item of
<PAGE>
operating equipment need be so repaired, renewed, replaced, added to or
improved, if Borrower or its Subsidiaries shall in good faith determine that the
action is not necessary or desirable for its continued efficient and profitable
operation of business.
(d) With respect to Borrower's Oil and Gas Properties, and oil and gas
gathering assets which are operated by operators other than Borrower or a
Restricted Subsidiary, use reasonable efforts to enforce in a manner consistent
with the industry practice the operators' contractual obligations to maintain,
develop, and operate such Properties subject to the applicable operating
agreements.
7.11 Further Assurances. Upon the request of the Administrative Agent,
promptly perform or cause to be performed any and all acts and execute or cause
to be executed any and all documents (including, without limitation, financing
statements and continuation statements) for filing under the provisions of the
Uniform Commercial Code or any other Requirement of Law which are necessary or
advisable to maintain in favor of the Administrative Agent, for the benefit of
the Lenders, Liens on the Collateral (as defined in the Pledge Agreement) that
are duly perfected in accordance with all applicable Requirements of Law.
SECTION 8. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Loan, Note or any Letter of Credit remains outstanding and unpaid or
any amount is owing to any Lender or the Administrative Agent hereunder or under
any other Loan Document, the Borrower shall not, and shall not (except with
respect to subsection 8.1) permit any Restricted Subsidiary to, directly or
indirectly:
8.1 Financial Covenant Conditions. (a) Total Debt Interest Coverage Ratio.
Permit, for any period of four consecutive fiscal quarters ending after the date
hereof, the ratio of EBITDA to Consolidated Interest Expense of the Borrower and
its Restricted Subsidiaries for such four consecutive fiscal quarters to be less
than 2.5 to 1.0.
(b) Current Ratio. Permit the ratio of current assets to current
liabilities at any time to be less than 1.0 to 1.0 (for purposes of this
calculation, (i) current assets will include an amount equal to the Borrowing
Base Availability and (ii) both current assets and current liabilities will
exclude the amount capitalized (or otherwise treated as an asset or liability,
as applicable) on the Borrower's balance sheet as a result of the Borrower's
mark-to-market portfolio of commodity price risk management activities (as
permitted or required in accordance with GAAP).
8.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness of the Borrower under the Loan Documents;
(b) Indebtedness of the Borrower issued to any Wholly-Owned Restricted
Subsidiary and Indebtedness of any Wholly-Owned Restricted Subsidiary issued to
the Borrower or any other Wholly-Owned Restricted Subsidiary;
(c) (i) Indebtedness of the Borrower evidenced by the Senior Subordinated
Notes and (ii) Permitted Subordinated Refinancing Debt related thereto, if any;
(d) Guarantee Obligations permitted by subsection 8.4;
<PAGE>
(e) Indebtedness of the Borrower and its Wholly-Owned Restricted
Subsidiaries existing on the Restatement Effective Date and listed on Schedule
8.2(e), but not any extensions, renewals or replacements of such Indebtedness;
(f) Indebtedness of the Borrower under Interest Rate Protection Agreements
entered into for the purpose of limiting interest rate risks, provided that the
obligations under such agreements are related to payment obligations on
Indebtedness otherwise permitted by the terms of this covenant;
(g) Indebtedness of the Borrower under Commodity Price Risk Management
Agreements provided that such contracts were entered into in the ordinary course
of business for the purpose of limiting risks that arise in the ordinary course
of business of the Borrower and its Restricted Subsidiaries; provided that the
aggregate amount of such Commodity Price Risk Management Agreements may not
exceed the following: (i) for oil, the total volumes to be hedged for any year
shall not exceed 80% of expected oil production of the Borrower or the
Restricted Subsidiary for such year, whichever is the party to the Commodity
Price Risk Management Agreement and (ii) for gas, the total volumes to be hedged
for any year shall not exceed 80% of expected gas production of the Borrower or
the Restricted Subsidiary for such year, whichever is the party to the Commodity
Price Risk Management Agreement;
(h) other Subordinated Indebtedness that is issued on terms reasonably
satisfactory to each Agent and the Required Lenders with respect to provisions
regarding maturity, interest rate, covenants, events of default and
subordination language (which provisions shall be consistent with those
applicable to similarly-rated issuers engaging in similar transactions) and any
Permitted Subordinated Refinancing Debt related thereto, provided that after
giving effect to the issuance of such Subordinated Indebtedness or Permitted
Subordinated Refinancing Debt related thereto, the Borrower is in compliance
with the covenants contained in subsection 8.1 and subsection 8.7 hereof;
(i) additional Indebtedness of the Borrower not to exceed $25,000,000 in
aggregate principal amount at any one time outstanding; and
(j) additional Indebtedness of Wholly-Owned Restricted Subsidiaries not to
exceed $5,000,000 in aggregate principal amount at any one time outstanding.
8.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes, assessments, fees and other governmental charges and
claims that are not yet due or which are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Borrower or the applicable Restricted
Subsidiary, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, suppliers' mechanics', materialmen's,
vendors', repairmen's, landlords' and other like Liens arising in the ordinary
course of business securing obligations which are not overdue for a period of
more than 120 days or which are being contested in good faith by appropriate
proceedings;
(c) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance or other kinds of
social security, or to secure the payment or performance of tenders, statutory
or regulatory obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of business
(including lessee or operator obligations under statutes, governmental
regulations or instruments related to the ownership, exploration and production
of oil, gas and minerals on state or federal lands or waters);
<PAGE>
(d) Liens constituting survey exceptions, encumbrances, easements and
reservations of, or rights of others for, rights-of-way, zoning and other
restrictions as to the use of real properties and other similar encumbrances
incurred in the ordinary course of business which, with respect to all of the
foregoing, do not secure the payment of Indebtedness of the type described in
clauses (a)-(d) of the definition thereof and which, in the aggregate, are not
substantial in amount and which do not in any case materially detract from the
value and use of the Property subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower or any Restricted Subsidiary;
(e) Liens existing on the date of this Agreement and listed on Schedule
8.3, provided that no such Lien is amended after the date of this Agreement to
cover any additional Property or to secure additional Indebtedness;
(f) Liens arising under operating agreements, joint venture agreements,
partnership agreements, oil and gas leases, farm-out and farm-in agreements,
division orders, contracts for the sale, transportation or exchange of oil or
natural gas, unitization and pooling declarations and agreements, area of mutual
interest agreements that are customary in the Oil and Gas Business; provided
that the amount of any obligations secured thereby that are delinquent, that are
not diligently contested in good faith and for which adequate reserves are not
maintained by the Borrower or the applicable Restricted Subsidiary, as the case
may be, do not exceed, at any time outstanding, the amount owing by the Borrower
or any Restricted Subsidiary, as applicable, for one month's billed operating
expenses or other expenditures attributable to such entity's interest in the
Property covered thereby;
(g) Liens reserved in oil and gas mineral leases for bonus or rental
payments and for compliance with the terms of such leases, provided that the
amount of any obligations secured thereby that are delinquent, that are not
diligently contested in good faith and for which adequate reserves are not
maintained by the Borrower or the applicable Restricted Subsidiary, as the case
may be, do not exceed, at any time outstanding, the amount owing by the Borrower
or any Restricted Subsidiary, as applicable, for one month's payments as due
thereunder;
(h) Liens on pipeline or pipeline facilities that arise under operation of
law;
(i) Liens on the Capital Stock of Unrestricted Subsidiaries;
(j) Liens created pursuant to any Loan Document;
(k) Liens securing Indebtedness otherwise permitted by subsection 8.2 not
to exceed $5,000,000 in aggregate amount at any time outstanding; provided that
no such Liens under this clause (k) shall encumber any Capital Stock of any
Restricted Subsidiary; and . (l) Liens created pursuant to any Hedging
Agreement, provided that:
(i) such Lien is in the form of amounts on deposit in cash-collateralized
margin accounts; and
(ii) the aggregate amount of (A) all such deposits and (B) any Letter of
Credit Outstandings under Letters of Credit issued to support obligations under
any Hedging Agreement does not exceed (1) on or after the Restatement Effective
Date and before June 30, 2001, $50,000,000, (2) on or after June 30, 2001 and
before June 30, 2002, $40,000,000 and (3) on or after June 30, 2002,
$30,000,000.
8.4 Limitation on Guarantee Obligations. Create, incur, assume or suffer to
exist any Guarantee Obligation except:
<PAGE>
(a) Guarantee Obligations of any Restricted Subsidiary with respect to the
Senior Subordinated Notes and Permitted Subordinated Refinancing Debt, (x) which
Guarantee Obligations shall contain subordination provisions which are not
materially less favorable to the Lenders than the subordination provisions with
respect to the Senior Subordinated Notes and (y) so long as, prior to or
concurrently with incurring such Guarantee Obligation, (i) such Restricted
Subsidiary guarantees the obligations of the Borrower under this Agreement
pursuant to documentation and terms reasonably satisfactory to the
Administrative Agent and (ii) if requested by the Administrative Agent, such
Restricted Subsidiary shall also deliver to the Administrative Agent an opinion
of counsel, regarding such legal matters as the Administrative Agent shall
reasonably request;
(b) Guarantee Obligations in existence on the date hereof and listed on
Schedule 8.4;
(c) other Guarantee Obligations of the Borrower or any Restricted
Subsidiary of Indebtedness of the Borrower or any Wholly-Owned Restricted
Subsidiary permitted by subsection 8.2, provided that prior to or concurrently
with any Restricted Subsidiary incurring such Guarantee Obligation, (x) such
Guarantee Obligations shall contain subordination provisions which are
reasonably satisfactory to the Required Lenders and (y) (i) such Restricted
Subsidiary guarantees the obligations of the Borrower under this Agreement
pursuant to documentation and terms reasonably satisfactory to the
Administrative Agent and (ii) if requested by the Administrative Agent, such
Restricted Subsidiary shall also deliver to the Administrative Agent an opinion
of counsel, regarding such legal matters as the Administrative Agent shall
reasonably request; and
(d) Guarantee Obligations arising under the Loan Documents.
8.5 Limitation on Fundamental Changes. Enter into any merger, consolidation
or amalgamation as a constituent party, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its Property,
business or assets, or make any material change in its present method of
conducting business except:
(a) (i) any Restricted Subsidiary of the Borrower (including a Foreign
Subsidiary) may be merged or consolidated with or into the Borrower (provided
that the Borrower shall be the continuing or surviving corporation) or with or
into any one or more Wholly-Owned Restricted Subsidiaries which are Domestic
Subsidiaries (provided that such Wholly-Owned Restricted Subsidiary or
Subsidiaries shall be the continuing or surviving Person) and (ii) any Foreign
Subsidiary of the Borrower may be merged or consolidated with or into any one or
more Wholly- Owned Restricted Subsidiaries which are Foreign Subsidiaries
(provided that such Wholly- Owned Restricted Subsidiary or Subsidiaries shall be
the continuing or surviving Person);
(b) (i) any Wholly-Owned Restricted Subsidiary (including a Wholly-Owned
Restricted Subsidiary which is a Foreign Subsidiary) of the Borrower may sell,
lease, transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any Wholly-Owned Restricted
Subsidiary which is a Domestic Subsidiary and (ii) any Wholly- Owned Restricted
Subsidiary of the Borrower which is a Foreign Subsidiary may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to any Wholly-Owned Restricted Subsidiary which is a
Foreign Subsidiary; and
(c) any Wholly-Owned Restricted Subsidiary may be merged or consolidated
with any Person acquired in connection with a Permitted Business Acquisition
made in the ordinary course of the Oil and Gas Business, provided such
Wholly-Owned Restricted Subsidiary shall be the continuing or surviving Person.
<PAGE>
8.6 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, receivables and leasehold interests), whether now owned or hereafter
acquired, or issue or sell any shares of the Borrower's Disqualified Stock or
such Restricted Subsidiary's Capital Stock to any Person other than the Borrower
or any domestic Wholly-Owned Restricted Subsidiary, except:
(a) the sale or discount without recourse of any accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection thereof;
(b) the sale of Hydrocarbons in the ordinary course of business as and when
produced or after the production thereof;
(c) as permitted by subsection 8.5(b);
(d) the abandonment, farm-out, lease or sublease of Oil and Gas Properties
not containing Proved Reserves in the ordinary course of business;
(e) the sale of Oil and Gas Properties in connection with tax credit
transactions complying with Section 29 of the Code or any other analogous
provision whether now existing or hereafter enacted, which sale does not result
in a reduction in the Borrower's or its Restricted Subsidiaries', as the case
may be, right to receive the cash flow from such Oil and Gas Properties and
which sale is on terms reasonably acceptable to the Administrative Agent;
(f) sales or other dispositions of Proved Reserves, provided that (i) the
amount of all sales or other dispositions of Proved Reserves made during any
Borrowing Base Period may not exceed $10,000,000, unless, simultaneously with
any such sale or disposition which (together with prior sales or other
dispositions made during such Borrowing Base Period) exceeds the foregoing
limit, the Borrowing Base is reduced by an amount agreed to at the time by the
Supermajority Lenders pursuant to the procedures set forth in subsection 4.9;
(ii) any conversion of a Restricted Subsidiary, which owns, directly or
indirectly, Proved Reserves, to an Unrestricted Subsidiary in conformity with
subsection 8.17 shall be deemed to be a sale of such Proved Reserves for
purposes of this subsection 8.6; and (iii) the Borrower and any Restricted
Subsidiary may at any time sell or otherwise dispose of the Electra and
Burkburnett properties located in Wichita County, Texas, and Wilbarger County,
Texas, and described in the Initial Reserve Report without regard to the dollar
limitation set forth in clause (i) of this subsection;
(g) sales or other dispositions of Property not constituting Oil and Gas
Properties (other than the Capital Stock of any Restricted Subsidiaries of the
Borrower); and
(h) dispositions occurring as the result of a casualty event, event of loss
or condemnation or expropriation.
8.7 Limitation on Restricted Payments. Declare or pay any dividend on
(other than dividends payable solely in common stock of the Borrower), or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any shares of any class of Capital Stock of the Borrower or any Restricted
Subsidiary or any warrants or options to purchase any such Capital Stock,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or Property or in
obligations of the Borrower or any Restricted Subsidiary (such declarations,
payments, setting apart, purchases, redemptions, defeasance, retirements,
acquisitions and distributions being herein called "Restricted Payments"),
except that:
(a) any Restricted Subsidiary may declare and pay dividends to or make
other distributions to the Borrower or to any other Wholly-Owned Restricted
Subsidiary; and
<PAGE>
(b) so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, the Borrower may make a Restricted Payment
if such Restricted Payment, together with the aggregate of all other Restricted
Payments made by the Borrower and its Restricted Subsidiaries after the
Restatement Effective Date, is less than the sum of (i) 50% of the Consolidated
Net Income of the Borrower for the period (taken as one accounting period) from
the beginning of the first fiscal quarter commencing after the Restatement
Effective Date to the end of the Borrower's most recently ended fiscal quarter
for which financial statements have been delivered to the Administrative Agent
and the Lenders pursuant to subsection 7.1 at or prior to the time of such
Restricted Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus (ii) 50% of the aggregate net cash
proceeds received from the issue or sale after the Restatement Effective Date of
Capital Stock of the Borrower (other than Capital Stock sold to a Subsidiary of
the Borrower and other than Disqualified Stock), minus (iii) the amount of
Subordinated Indebtedness previously redeemed or repurchased pursuant to
subsection 8.9(a)(ii) and minus (iv) the amount by which the sum of all
Investments previously made in Unrestricted Subsidiaries pursuant to subsection
8.8(g) exceeds $10,000,000; provided, however, that the foregoing provisions of
this paragraph shall not prohibit Restricted Payments, which, together with the
aggregate of all other Restricted Payments made by the Borrower and its
Restricted Subsidiaries after the Restatement Effective Date (in addition to all
amounts which are included in clauses (iii) and (iv) immediately preceding), do
not exceed $40,000,000. The amount of all Restricted Payments (other than cash)
shall be the fair market value (as determined in good faith by the Board of
Directors of the Borrower or certified to the Administrative Agent by a
Responsible Officer of the Borrower) on the date of the proposed Restricted
Payment.
8.8 Limitation on Investments, Loans and Advances. Make any advance, loan,
extension of credit or capital contribution to, or incur any Guarantee
Obligation on behalf or for the benefit of, or purchase any stock, bonds, notes,
debentures or other securities of or any assets constituting a business unit of,
or make any other investment (including by the issuance of letters of credit) in
(collectively, "Investments"), any Person except:
(a) extensions of trade credit in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) loans and advances to officers and employees of the Borrower or any
Restricted Subsidiary for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for the Borrower and its
Restricted Subsidiaries not to exceed $1,000,000 at any one time outstanding;
(d) Investments constituting Permitted Business Investments made or entered
into in the ordinary course of the Oil and Gas Business;
(e) Investments constituting Permitted Business Acquisitions made or
entered into in the ordinary course of the Oil and Gas Business;
(f) Investments by the Borrower in any Wholly-Owned Restricted Subsidiary
and Investments by any Wholly-Owned Restricted Subsidiary in the Borrower or in
other Wholly- Owned Restricted Subsidiaries, provided that the net book value of
Investments made after the Restatement Effective Date in any Restricted
Subsidiaries which are Foreign Subsidiaries shall not exceed 25% of the net book
value of the assets of the Borrower and its Restricted Subsidiaries in the
aggregate at any time outstanding after taking into account any return after the
Restatement Effective Date from dividends, distributions and repayments in
respect of such Investment;
<PAGE>
(g) Investments by the Borrower or any Restricted Subsidiary in
Unrestricted Subsidiaries; provided that the aggregate amount of such
Investments (net of any cash received as dividends or distributions on such
Investments or from the sale of such Investments) does not exceed, at any one
time outstanding, $10,000,000, unless (after deducting that excess, pursuant to
subsection 8.7(b)(iv), from the amount of Restricted Payments permitted by
subsection 8.7(b)) the Borrower would be able to make, at such time, an
additional Restricted Payment pursuant to subsection 8.7(b); provided further
that the cumulative outstanding investment in any Restricted Subsidiary on the
date that such Restricted Subsidiary is converted to an Unrestricted Subsidiary
in conformity with subsection 8.17 shall be deemed an investment made on such
conversion date in an Unrestricted Subsidiary for purposes of determining
compliance with this subsection 8.8(g); and
(h) Investments by the Borrower or any Restricted Subsidiary in securities
which trade on the New York Stock Exchange, the American Stock Exchange or the
NASDAQ Stock Market (including Investments existing on the Restatement Effective
Date and listed on Schedule 8.8 hereof, but excluding Investments in
Unrestricted Subsidiaries) in an aggregate amount (valued at cost) not to exceed
$25,000,000 at any one time outstanding.
8.9 Limitation on Optional Payments and Modifications of Debt Instruments,
Other Material Agreements. (a) Make any voluntary or optional payment or
prepayment on or redemption, defeasance or purchase of any Indebtedness (other
than Indebtedness under this Agreement) or amend, modify or change, or consent
or agree to any amendment, modification or change to any of the terms (including
the subordination provisions) of the Senior Subordinated Notes, the Subordinated
Indebtedness issued in exchange for the Coda Notes or any Permitted Subordinated
Refinancing Debt; provided that as long as no Default or Event of Default has
occurred or is continuing or would exist after giving effect thereto, the
Borrower may redeem or repurchase Subordinated Indebtedness otherwise permitted
by this Agreement (i) with the net cash proceeds from an incurrence of Permitted
Subordinated Refinancing Debt and (ii) to the extent that, after deducting the
amount of the proposed redemption or repurchase, pursuant to subsection
8.7(b)(iii), from the amount of Restricted Payments permitted by subsection
8.7(b), the Borrower would be able to make an additional Restricted Payment at
such time pursuant to subsection 8.7(b).
(b) Designate any Indebtedness as "Designated Senior Debt" under the Senior
Subordinated Indenture without the consent of the Required Lenders.
8.10 Limitation on Transactions with Affiliates. Except as described in
Schedule 8.10, enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of Property or the rendering of any service,
with any Affiliate (other than transactions between or among the Borrower and
its Wholly-Owned Restricted Subsidiaries) unless such transaction is (a)
otherwise permitted under this Agreement, (b) in the ordinary course of the
Borrower's or the applicable Restricted Subsidiary's business and (c) upon fair
and reasonable terms no less favorable to the Borrower or the applicable
Restricted Subsidiary, as the case may be, than it would obtain in a comparable
arm's length transaction with a Person which is not an Affiliate or, in the
event no comparable transaction with an unaffiliated Person is available, on
terms that are fair from a financial point of view to the Borrower or the
applicable Restricted Subsidiary. For purposes of this subsection 8.10,
"Affiliate" shall include any Unrestricted Subsidiary.
8.11 Limitation on Sales and Leasebacks. Enter into any arrangement (a
"Sale and Leaseback Transaction") with any Person providing for the leasing by
the Borrower or any Restricted Subsidiary of real or personal Property which has
been or is to be sold or transferred by the Borrower or such Restricted
Subsidiary to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of the Borrower or any Restricted Subsidiary.
<PAGE>
8.12 Limitation on Changes in Fiscal Year. Permit the fiscal year of the
Borrower and its Restricted Subsidiaries to end on a day other than December 31.
8.13 Limitation on Negative Pledge Clauses. Enter into with any Person any
agreement which prohibits or limits the ability of the Borrower or any
Restricted Subsidiary to create, incur, assume or suffer to exist any Lien in
favor of any of the Administrative Agent, the Lenders under the Loan Documents
and their respective assignees under the Loan Documents or any Person
refinancing all or a portion of the Commitments hereunder (each, a "Negative
Pledge Clause"), upon any of its Property, assets or revenues, whether now owned
or hereafter acquired; provided that the foregoing shall not apply to a Negative
Pledge Clause to the extent such Negative Pledge Clause (i) is contained in an
agreement which creates a Lien permitted by subsections 8.3(c), (f), (i) or (k)
and (ii) only applies to the Property encumbered by such Lien.
8.14 Limitation on Lines of Business. Enter into any business, either
directly or through any Restricted Subsidiary, except for the Oil and Gas
Business and those businesses in which the Borrower and its Restricted
Subsidiaries are engaged on the date of this Agreement or which are directly
related thereto.
8.15 Forward Sales. Except in accordance with usual and customary practice
in the Oil and Gas Business and except for gas imbalances not in excess of
2,500,000 mcf, enter into or permit to exist any advance payment agreement or
other arrangement pursuant to which the Borrower or any of its Subsidiaries,
having received full or substantial payment of the purchase price for a
specified quantity of Hydrocarbons upon entering such agreement or arrangement,
is required to deliver, in one or more installments subsequent to the date of
such agreement or arrangement, such quantity of Hydrocarbons pursuant to and
during the terms of such agreement or arrangement.
8.16 Hedging Agreements. Enter into any Hedging Agreement, other than
Hedging Agreements entered into in the ordinary course of business to achieve
more predictable revenues and cash flows and reduce exposure to fluctuations in
interest rates and oil and gas prices to which the Borrower or any of its
Restricted Subsidiaries is exposed in the conduct of its business or the
management of its liabilities, provided that the aggregate amount of Hedging
Agreements which are Commodity Price Risk Management Agreements may not exceed
the following: (i) for oil, the total volumes to be hedged for any year shall
not exceed 80% of expected oil production of the Borrower or the Restricted
Subsidiary for such year, whichever is the party to the Hedging Agreement and
(ii) for gas, the total volumes to be hedged for any year shall not exceed 80%
of expected gas production of the Borrower or the Restricted subsidiary for such
year, whichever is the party to the Hedging Agreement.
8.17 Unrestricted Subsidiaries. (a) Create or otherwise designate any
Subsidiary as an Unrestricted Subsidiary unless the terms set forth in the
definition of Unrestricted Subsidiary are complied with respect to such
Subsidiary and no Default would result from the designation, creation and
operation of such Unrestricted Subsidiary.
(b) Without the prior written consent of the Supermajority Lenders, change
the characterization of a Subsidiary from a Restricted Subsidiary to an
Unrestricted Subsidiary or an Unrestricted Subsidiary to a Restricted
Subsidiary; provided however, the prior written consent of the Supermajority
Lenders shall not be required to (i) change the characterization of an
Unrestricted Subsidiary to a Restricted Subsidiary if (A) no Default or Event of
Default shall have occurred and be continuing at such time or would result
therefrom, (B) after giving effect to such re-characterization, each of the
representations and warranties made by each Loan Party in or pursuant to the
Loan Documents shall be true and correct in all material respects as of the date
of such re-characterization, (C) such Subsidiary shall have complied with the
provisions of subsection 7.9 and (D) the Borrower provides the Administrative
Agent five days advance written notice of its intent to re-characterize such
Subsidiary or (ii) change the characterization of a Restricted Subsidiary to an
Unrestricted Subsidiary if (A) no Default or Event of Default shall have
occurred and be continuing or would result therefrom, and assuming that all
investments made by the Borrower or any other Subsidiary in such Restricted
Subsidiary prior to the
<PAGE>
date of such re-characterization were investments in an Unrestricted Subsidiary
and (B) the Borrower provides the Administrative Agent five days advance written
notice of its intent to re-characterize such Subsidiary. If any Restricted
Subsidiary is designated as an Unrestricted Subsidiary in accordance with the
terms of this Agreement, the Administrative Agent shall, and the Lenders hereby
instruct the Administrative Agent to, release, upon the written request of the
Borrower, such Subsidiary from any Guarantee Obligations arising under the Loan
Documents and the Capital Stock of such Subsidiary from the Liens created under
the Pledge Agreement; provided that such Subsidiary shall not have any Guarantee
Obligations with respect to, or Liens in favor of, any Subordinated Indebtedness
that are not so released. The Administrative Agent, at the Borrower's request
and expense, shall execute such releases, termination statements or agreements
as may be reasonably necessary to effect the release of Guarantee Obligations
under the Loan Documents or Liens created under the Pledge Agreement.
(c) Permit any Unrestricted Subsidiary to fail to comply with the
requirements set forth in the definition of "Unrestricted Subsidiary."
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or any
Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to pay any interest on any Loan, or any other
amount payable hereunder, within five days after any such interest or other
amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by any Loan Party
herein or in any other Loan Document or which is contained in any certificate,
document or financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall prove to
have been incorrect in any material respect on or as of the date made or deemed
made; or
(c) The Borrower or any of its Restricted Subsidiaries shall default in the
observance or performance of any agreement applicable to it contained in
subsection 4.10, subsection 7.9 or Section 8 of this Agreement; or
(d) The Borrower or any of its Restricted Subsidiaries shall default in the
observance or performance of any other agreement applicable to it contained in
this Agreement or any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Section), and such default shall continue unremedied for
a period of 30 consecutive days after the earlier of (i) the Borrower's
obtaining knowledge of such default or (ii) the receipt by the Borrower of
notice thereof from the Administrative Agent or any Lender; or
(e) The Borrower or any of its Restricted Subsidiaries shall (i) default in
any payment of principal of or interest of any Indebtedness (other than the
Loans), or in the payment of any Guarantee Obligation, in excess, in the
aggregate, of $5,000,000, beyond the period of grace (not to exceed 30 days), if
any, provided in the instrument or agreement under which such Indebtedness or
Guarantee Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Guarantee Obligation or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Guarantee Obligation (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity or such Guarantee Obligation to become
<PAGE>
payable, provided that the aggregate principal amount of all such Indebtedness
and Guarantee Obligations which would then become due and payable would equal or
exceed $5,000,000; or
(f) (i) The Borrower or any of its Restricted Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the
Borrower or any of its Restricted Subsidiaries shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against the
Borrower or any of its Restricted Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 90 days; or (iii)
there shall be commenced against the Borrower or any of its Restricted
Subsidiaries any case, proceeding or other action seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 90 days from the entry thereof; or (iv) the Borrower or
any of its Restricted Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any of its
Restricted Subsidiaries shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as defined
in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii)
any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Single Employer Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could have a Material
Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the Borrower
or any Restricted Subsidiary involving in the aggregate a liability (to the
extent not paid or covered by insurance) of $1,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 60 days after the entry thereof; or
(i) (i) Either the Pledge Agreement or the Subsidiary Guarantee shall
cease, for any reason, to be in full force and effect or any Pledgor or
Guarantor shall so assert in writing or (ii) the Lien created by the Pledge
Agreement shall cease to be enforceable and of the same effect and priority
purported to be created thereby; or
(j) The subordination provisions contained in any Subordinated Note
Document or any other Subordinated Indebtedness shall cease, for any reason, to
be in full force and effect, or any
<PAGE>
Person that is a party thereto or holders of at least 25% of the aggregate
principal amount of such Subordinated Indebtedness shall so assert in writing;
or
(k) A Change of Control shall occur;
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) of this Section, automatically
the Commitments shall immediately terminate and the Loans hereunder (with
accrued and unpaid interest thereon) and all other amounts owing under this
Agreement (including, without limitation, all Letter of Credit Outstandings,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) and the other Loan Documents
shall immediately become due and payable, and (B) if such event is any other
Event of Default, either or both of the following actions may be taken: (i) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by written
notice to the Borrower, declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the consent
of the Required Lenders, the Administrative Agent may, or upon the request of
the Required Lenders, the Administrative Agent shall, by written notice to the
Borrower, declare the Loans hereunder (with accrued and unpaid interest thereon)
and all other amounts owing under this Agreement (including, without limitation,
all amounts of Letter of Credit Outstandings, whether or not the beneficiaries
of the then outstanding Letters of Credit shall have presented the documents
required thereunder) and the other Loan Documents to be due and payable
forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, the Borrower shall at such time deposit in a cash
collateral account opened by the Administrative Agent an amount equal to the
aggregate then unexpired amount that is available to be drawn under such Letters
of Credit. The Borrower hereby grants to the Administrative Agent, for the
benefit of the Issuing Lender and the L/C Participants, a security interest in
such cash collateral to secure all obligations of the Borrower under this
Agreement and the other Loan Documents. Amounts held in such cash collateral
account shall be applied by the Administrative Agent to the payment of drafts
drawn under such Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired, been canceled or been fully drawn
upon, if any, shall be applied to repay other obligations of the Borrower
hereunder and under the Notes. After all such Letters of Credit shall have
expired, been canceled or been fully drawn upon, all Reimbursement Obligations
shall have been satisfied and all other obligations of the Borrower hereunder
and under the other Loan Documents shall have been paid in full, the
Administrative Agent is hereby authorized to, and shall, release the balance, if
any, in such cash collateral account to the Borrower. The Borrower shall execute
and deliver to the Administrative Agent, for the account of the Issuing Lender
and the L/C Participants, such further documents and instruments as the
Administrative Agent may reasonably request to evidence the creation and
perfection of the within security interest in such cash collateral account.
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived.
SECTION 10. THE AGENTS
10.1 Appointment. (a) Each Lender hereby irrevocably designates and
appoints Chase as Administrative Agent of such Lender under this Agreement and
the other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
<PAGE>
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
(b) Each Lender hereby designates and appoints Bankers Trust Company as
Syndication Agent, Bank of America as Documentation Agent and Fleet National
Bank as Collateral Agent, and each such Lender irrevocably authorizes each such
Agent, in such capacity, to take such action on its behalf under the provisions
of this Agreement and to exercise such powers and perform such duties as are
expressly delegated to such Agent by the terms of this Agreement, together with
such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement, none of the
Syndication Agent, the Documentation Agent and the Collateral Agent shall have
any duties or responsibilities, except those expressly set forth herein nor any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against such Agents.
10.2 Delegation of Duties. Any Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
10.3 Exculpatory Provisions. No Agent nor any officer, director, employee,
agent, attorney-in-fact or Affiliate of any Agent shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document (except for its or
such Person's own gross negligence or willful misconduct) or (ii) responsible in
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by any Loan Party or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by any Agent under or
in connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or for any failure of any Loan Party to
perform its obligations hereunder or thereunder. No Agent shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
10.4 Reliance by Administrative Agent. Each Agent shall be entitled to
rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by such Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. Each Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, where unanimous consent of the Lenders is expressly
required hereunder, such Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. Each Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or, where unanimous consent
of the Lenders is expressly required hereunder, such Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans.
10.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement,
<PAGE>
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
10.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that no Agent nor any officer, director, employee, agent,
attorney-in-fact or Affiliate of any Agent has made any representations or
warranties to it and that no act by any Agent hereafter taken, including any
review of the affairs of any Loan Party, shall be deemed to constitute any
representation or warranty by any such Agent to any Lender. Each Lender
represents to each Agent that it has, independently and without reliance upon
any Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of each Loan Party and made its own decision to make its
Extensions of Credit hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon any Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of each Loan Party. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by an Agent
hereunder, no Agent shall have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
any Loan Party which may come into the possession of such Agent or any officer,
director, employee, agent, attorney-in-fact or Affiliate of such Agent.
10.7 Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which indemnification
is sought, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the obligations under this Agreement) be
imposed on, incurred by or asserted against such Agent in any way relating to or
arising out of, the Commitments, this Agreement, any of the other Loan Documents
or any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
such Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from such Agent's gross negligence or
willful misconduct. The agreements in this subsection shall survive the payment
of all obligations under this Agreement and all other amounts payable hereunder.
10.8 Agents in Their Individual Capacity. Each Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with any Loan Party as though such Agent were not an Agent hereunder and under
the other Loan Documents. With respect to the Extensions of Credit made by it,
each Agent shall have the same rights and powers under this Agreement and the
other Loan Documents as any Lender and may exercise the same as though it were
not an Agent, and the terms "Lender" and "Lenders" shall include such Agent in
its individual capacity.
10.9 Successor Administrative Agent. Each Agent may resign from its
position as an Agent upon 30 days' notice to the Lenders. If the Administrative
Agent shall resign as Administrative Agent under this Agreement and the other
Loan Documents, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent, with the consent of the
Borrower (such consent not to be unreasonably withheld or delayed), shall
succeed to the rights, powers
<PAGE>
and duties of the Administrative Agent hereunder; provided that if any Default
or Event of Default shall have occurred and be continuing, the Borrower's
consent shall not be required for a successor agent to succeed to the rights,
powers and duties of the Administrative Agent hereunder. Effective upon such
appointment and approval, the term "Administrative Agent" shall mean such
successor agent, and the former Administrative Agent's rights, powers and duties
as Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. After any retiring Agent's
resignation from its position as an Agent, the provisions of this Section 10
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was an Agent under this Agreement and the other Loan Documents.
10.10 Issuing Lender. The provisions of this Section 10 applicable to the
Administrative Agent shall apply to the Issuing Lender in the performance of its
duties under the Loan Documents, mutatis mutandis.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the applicable
Loan Parties written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the applicable Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) reduce the principal amount of any Loan or
extend the Termination Date, or reduce the stated rate of any interest or fee
payable hereunder or extend the scheduled date of any payment thereof
(including, without limitation, any payment required under Section 4.10 hereof)
or increase the amount or extend the expiration date of any Lender's
Commitments, in each case without the consent of each Lender affected thereby,
or (ii) amend, modify or waive any provision of this subsection or reduce the
percentage specified in the definition of Required Lenders or Supermajority
Lenders (or modify any provision of this Agreement or any other Loan Document to
provide that an action currently requiring the approval of or consent by the
Supermajority Lenders may be taken with the consent or approval by a lower
percentage of Lenders), or consent to the assignment or transfer by any Loan
Party of any of its rights and obligations under this Agreement and the other
Loan Documents or release of all or substantially all of the Pledged Securities,
other than in accordance with the terms of the applicable Loan Documents, in
each case without the written consent of all the Lenders and the Borrower, or
(iii) change subsection 4.8(a) or subsection 11.7(a) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, or (iv) amend, modify or waive any provision of Section
10 without the written consent of the then Administrative Agent and Issuing
Lender. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Loan Parties,
the Lenders, the Administrative Agent and all future holders of the Loans. In
the case of any waiver, the Loan Parties, the Lenders and the Administrative
Agent shall be restored to their former positions and rights hereunder and under
the other Loan Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
11.2 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by facsimile
transmission) and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made (a) in the case of delivery by hand or by
courier service, when delivered, (b) in the case of delivery by mail, three
Business Days after being deposited in the mails, postage prepaid, or (c) in the
case of delivery by facsimile transmission, when sent and receipt has been
confirmed, addressed as follows in the case of the Borrower and the
<PAGE>
Administrative Agent, and as set forth in Schedule 11.2 in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto in writing:
<TABLE>
<CAPTION>
<S> <C>
The Borrower: Belco Oil & Gas Corp.
767 Fifth Avenue, 46th Floor
New York, New York 10153
Attention: Dominick J. Golio,
Chief Financial Officer
Fax: (212) 644-2230
Tel.: (212) 508-9513
The Administrative Agent: The Chase Manhattan Bank
One Chase Manhattan Plaza, 8th Floor
New York, NY 10081
Attention: Joselin Fernandes,
Loan and Agency Services
Fax: (212) 552-5777
Tel.: (212) 552-7414
With a copy to:
Chase Bank of Texas, N.A.
600 Travis Street, 20th floor
Houston, Texas 77002
Attention: June Brand
Fax: (713) 216-4117
Tel.: (713) 216-4327
</TABLE>
provided that any notice, request or demand to or upon the Administrative
Agent or any Lender pursuant to subsection 2.2, 4.3, 4.5 or 4.8 shall not be
effective until received.
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of any Agent, the Issuing Lender or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Extensions of Credit hereunder.
11.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent and its Affiliates for all their reasonable
and documented out-of-pocket costs and expenses incurred in connection with the
development, syndication, preparation and execution of, and any amendment,
supplement or modification to, this Agreement and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of (i) counsel to the
Administrative Agent and (ii) the Administrative Agent customarily charged by it
in connection with syndicated credits, (b) to pay or reimburse each Lender and
the Administrative Agent for all its reasonable and documented costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the reasonable fees and disbursements
of counsel to the
<PAGE>
Administrative Agent and to the several Lenders, (c) to pay, indemnify, and hold
each Lender and the Administrative Agent (and their respective Affiliates and
their respective directors, officers, employees and agents) harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Lender and the Administrative Agent (and their respective directors, officers,
employees, agents and affiliates) harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents or the use or the proposed use of proceeds
contemplated by this Agreement, including, without limitation, any of the
foregoing relating to the violation of, noncompliance with or liability under,
any Environmental Law applicable to any Loan Party or any of the Properties (all
the foregoing in this clause (d), collectively, the "indemnified liabilities");
provided that the Borrower shall have no obligation under this clause (d) to any
Administrative Agent or any Lender (or any of their respective directors,
officers, employers, agents or Affiliates), with respect to indemnified
liabilities to the extent such liabilities are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Person; provided further that
the Borrower shall not be liable under this clause (d) for the legal expenses of
more than one primary firm or more than one local counsel in each state or other
jurisdiction in which an indemnifiable action is brought unless the use of one
primary firm or one local counsel by the indemnified parties would present such
firm or counsel with a conflict of interest. Without limiting the foregoing, and
to the extent permitted by applicable law, the Borrower agrees not to assert,
and hereby waives, and to cause each of its Restricted Subsidiaries not to
assert and to so waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee. The agreements in this subsection shall
survive repayment of the Loans and all other amounts payable hereunder and the
termination of this Agreement.
11.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, each
Lender, each Agent, all future holders of the Loans and any Notes hereunder and
their respective successors and assigns, except that the Borrower may not assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking or
lending business and in accordance with applicable law and at no cost or expense
to the Borrower, at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to such Lender, any
Commitment of such Lender or any other interest of such Lender hereunder and
under the other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, (i) such Lender's obligations under
this Agreement to the other parties to this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible for the performance thereof,
(iii) such Lender shall remain the holder of any such Loan (and any Note
evidencing such Loan) for all purposes under this Agreement and the other Loan
Documents, (iv) the Borrower and each Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents, and (v) in any
proceeding under the Bankruptcy Code, the Lender shall be, to the extent
permitted by law, the sole representative with respect to the obligations held
in the name of such Lender, whether for its own account or for the account of
any Participant. No Lender shall be entitled to create in favor of any
Participant, in the participation agreement pursuant to which such Participant's
participating interest shall be created or otherwise, any right to vote on,
consent to or approve any matter relating to this Agreement or any other Loan
Document except for those specified in clauses (i) and (ii) of the proviso to
subsection 11.1. The Borrower agrees that each Participant shall be entitled to
the benefits of subsections 4.13 and 4.14 with respect to its
<PAGE>
participation in the Commitments and the Loans and Letters of Credit outstanding
from time to time as if it was a Lender; provided that, in the case of
subsection 4.13, such Participant shall have complied with the requirements of
said subsection and provided, further, that no Participant shall be entitled to
receive any greater amount pursuant to any such subsection than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial banking or
lending business and in accordance with applicable law, at any time and from
time to time, assign to any Lender or (with the prior written consent of each
Issuing Lender) any Affiliate thereof or (with the prior written consent of the
Administrative Agent, each Issuing Lender and, so long as no Default or Event of
Default shall have occurred and be continuing, the Borrower, which consent, in
each case, shall not be unreasonably withheld), to an additional bank or
financial institution or other entity (an "Assignee") all or any part of its
rights and obligations under this Agreement and the other Loan Documents
including, without limitation, its Revolving Credit Commitments, L/C
Commitments, Revolving Credit Loans and L/C Participating Interests, pursuant to
an Assignment and Acceptance, substantially in the form of Exhibit E, executed
by such Assignee, such assigning Lender (and, in the case of an Assignee that is
not then a Lender, by the Borrower, the Administrative Agent and each Issuing
Lender) and delivered to the Administrative Agent for its acceptance and
recording in the Register, provided that (i) (unless the Borrower and the
Administrative Agent otherwise consent in writing) no such transfer to an
Assignee (other than a Lender or any Affiliate thereof) shall be in an aggregate
principal amount less than $5,000,000 in the aggregate (or, if less, the full
amount of such assigning Lender's Revolving Credit Loans, L/C Participating
Interests and Revolving Credit Commitments) and (ii) if any Lender assigns all
or any part of its rights and obligations under this Agreement to one of its
Affiliates in connection with or in contemplation of the sale or other
disposition of its interest in such Affiliate, the Borrower's prior written
consent shall be required for such assignment. Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with a Revolving Credit Commitment
and L/C Commitment as set forth therein, and (y) the assigning Lender thereunder
shall, to the extent provided in such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such assigning Lender shall cease to be a
party hereto). Notwithstanding any provision of this paragraph (c) and paragraph
(e) of this subsection, the consent of the Borrower shall not be required, and,
unless requested by the Assignee and/or the assigning Lender, new Notes shall
not be required to be executed and delivered by the Borrower, for any assignment
which occurs at any time when any of the events described in Section 9(f) shall
have occurred and be continuing.
(d) The Administrative Agent, on behalf of the Borrower, shall maintain at
the address of the Administrative Agent referred to in subsection 11.2 a copy of
each Assignment and Acceptance delivered to it and a register (the "Register")
for the recordation of the names, addresses and banking offices of the Lenders
and the Commitments of, and principal amounts of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and the
Lenders may (and, in the case of any Loan or other obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or other
obligation hereunder not evidenced by a Note shall be effective against third
parties only upon appropriate entries with respect thereto being made in the
Register. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Notwithstanding anything in this Agreement to the contrary, no
assignment under subsection 11.6(c) of any rights or obligations under or in
respect of the Loans, the Notes or the Letters
<PAGE>
of Credit shall be effective unless and until the Administrative Agent shall
have recorded the assignment pursuant to subsection 11.6(d). Upon its receipt of
an Assignment and Acceptance executed by an assigning Lender and an Assignee
(and, in the case of an Assignee that is not then a Lender or an affiliate
thereof, by the Borrower and the Administrative Agent) together with payment to
the Administrative Agent of a registration and processing fee of $3,500 (other
than in the case of an assignment by a Lender to an affiliate of such Lender),
the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Borrower. On or prior to such effective
date, the assigning Lender shall surrender any outstanding Notes held by it all
or a portion of which are being assigned, and the Borrower, at its own expense,
shall, upon the request to the Administrative Agent by the assigning Lender or
the Assignee, as applicable, execute and deliver to the Administrative Agent (in
exchange for the outstanding Notes of the assigning Lender) a new Revolving
Credit Note to the order of such Assignee in an amount equal to the lesser of
(A) the amount of such Assignee's Revolving Credit Commitment and (B) the
aggregate principal amount of all Revolving Credit Loans made by such Assignee,
after giving effect to such Assignment and Acceptance and, if the assigning
Lender has retained a Revolving Credit Commitment hereunder, a new Revolving
Credit Note to the order of the assigning Lender in an amount equal to the
lesser of (A) the amount of such Lender's Revolving Credit Commitment and (B)
the aggregate principal amount of all Revolving Credit Loans made by such
Lender, after giving effect to such Assignment and Acceptance. Any such new
Notes shall be dated the Restatement Effective Date and shall otherwise be in
the form of the Note replaced thereby. The assigning Lender shall promptly
return its old Note to the Borrower marked "canceled".
(f) The Borrower authorizes each Lender to disclose to any Participant or
Assignee (each, a "Transferee") and any prospective Transferee, any and all
financial information in such Lender's possession concerning the Loan Parties
and their Affiliates which has been delivered to such Lender by or on behalf of
the Borrower pursuant to this Agreement or which has been delivered to such
Lender by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Loan Parties and their Affiliates prior to becoming a party to
this Agreement; provided such Person agrees to maintain the confidentiality of
such information in accordance with subsection 11.15.
(g) For avoidance of doubt, the parties to this Agreement acknowledge that
the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
11.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted Lender") shall
at any time receive any payment of all or part of its Loans or Reimbursement
Obligations, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 9(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans or Reimbursement
Obligations, or interest thereon, such Benefitted Lender shall purchase for cash
from the other Lenders a participating interest in such portion of each such
other Lender's Loans or Reimbursement Obligations, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by law,
each Lender shall have the right, during the continuation of an Event of
Default, without prior notice to the Borrower, any such notice being expressly
waived by the Borrower to the extent permitted by applicable law, upon any
amount becoming due and payable by the Borrower hereunder (whether at the stated
maturity, by
<PAGE>
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of the Borrower, as the case
may be. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by such Lender,
provided that, to the extent permitted by applicable law, the failure to give
such notice shall not affect the validity of such set-off and application.
11.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
11.9 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11.10 Integration. This Agreement and the other Loan Documents represent
the agreement of the Borrower, the other Loan Parties, the Administrative Agent
and the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
11.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAW.
11.12 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably
and unconditionally:
(a) submits for itself and its Property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in subsection 11.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and
<PAGE>
(e) waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
subsection any special, exemplary, punitive or consequential damages.
11.13 Acknowledgments; Designated Senior Debt. The Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) no Agent nor any Lender has any fiduciary relationship with or duty to
the Borrower arising out of or in connection with this Agreement or any of the
other Loan Documents, and the relationship between the Agents and the Lenders,
on one hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor;
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Agents and the Lenders or among the Borrower, the Agents and the Lenders; and
(d) the Notes and the Indebtedness evidenced hereby and thereby are
"Designated Senior Debt" as such term is defined in the Senior Subordinated
Indenture and as such term is defined in the Coda Indenture, and the Subsidiary
Guarantee is a "Senior Guarantee" as such term is used in the Coda Indenture.
11.14 WAIVERS OF JURY TRIAL. THE PARTIES HERETO HEREBY KNOWINGLY AND
INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
11.15 Confidentiality. Each of the Administrative Agent, the Issuing Bank
and the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to any assignee of
or Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the Borrower
or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
from a source other than the Borrower. For the purposes of this Section,
"Information" means all information received from the Borrower relating to the
Borrower or its business, other than any such information that is available to
the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential
basis prior to disclosure by the Borrower; provided that, in the case of
information received from the Borrower after the date hereof, such information
is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
[Remainder of page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
BELCO OIL & GAS CORP.
By:
-------------------------------------
Title:
<PAGE>
THE CHASE MANHATTAN BANK, as
Administrative Agent, Issuing Lender
and as a Lender
By:
-------------------------------------
Title:
<PAGE>
BANKERS TRUST COMPANY, as
Syndication Agent and as a Lender
By:
-------------------------------------
Title:
<PAGE>
BANK OF AMERICA, N.A., as
Documentation Agent and as a Lender
By:
-------------------------------------
Name: J. Scott Fowler
Title: Managing Director
<PAGE>
FLEET NATIONAL BANK, as
Collateral Agent and as a Lender
By:
-------------------------------------
Title:
<PAGE>
FORTIS CAPITAL CORP.
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
<PAGE>
BANK ONE TEXAS, N.A.
By:
-------------------------------------
Name:
Title:
<PAGE>
CHRISTIANIA BANK OG KREDITKASSE ASA
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
<PAGE>
BANK OF SCOTLAND
By:
-------------------------------------
Name:
Title:
<PAGE>
THE SANWA BANK LIMITED
By:
-------------------------------------
Name:
Title:
<PAGE>
Schedule 1.1(a) Commitments
<TABLE>
<CAPTION>
<S> <C>
Revolving Credit
Lender Commitment
($MM)
----------------------------------------------- ------------------------
The Chase Manhattan Bank - Administrative Agent $35
Bankers Trust Company - Syndication Agent $35
Bank of America, N.A. - Documentation Agent $35
Fleet National Bank - Collateral Agent $35
The Sanwa Bank Limited $20
Christiania Bank OG Kreditkasse ASA $25
Bank One Texas, N.A. $25
Bank of Scotland $10
Fortis Capital Corp. $30
----
TOTALS $250
</TABLE>
<PAGE>
Schedule 5.1 Sales, Transfers and Dispositions; Acquisitions
The Borrower has spent approximately $68,500,000 on oil and gas property
acquisitions since January 1, 2000.
<PAGE>
Schedule 5.15 Subsidiaries
The Persons listed on Schedule 5.15 constitute all the Subsidiaries of the
Borrower at the date hereof.
<TABLE>
<CAPTION>
<S> <C>
Restricted Subsidiaries Net Book Value
Of Assets ($Mill.)
----------------------- ------------------
Belco Energy Corp., a Nevada corporation $22.5
Belco Energy I L.P., a Delaware limited partnership $ 1.2
BOG Wyoming LLC, a Wyoming limited liability company ($0.1)
Belco Finance Co., a Wyoming corporation $32.8
Gin Lane Company, a Delaware corporation $ 1.0
Fortune Corp., a Texas corporation -0-
Electra Resources, Inc., a Texas corporation ($0.2)
Unrestricted Subsidiaries
-------------------------
Belco Energy (Cayman Islands) Corp., a Cayman Islands
corporation -0-
</TABLE>
<PAGE>
Schedule 5.2 Dividends, Distributions, Redemptions, Etc.
1. Preferred stock dividends paid since January 1, 2000:
<TABLE>
<CAPTION>
<S> <C>
Date Amount
---- ------
March 15, 2000 $1,613,341
June 15, 2000 $1,541,556
TOTALS $3,154,897
</TABLE>
2. Purchases of Capital Stock since January 1, 2000:
<TABLE>
<CAPTION>
<S> <C> <C>
Shares
Date Re-acquired Amount
---- ----------- ------
January 6, 2000 4,200* $61,950
June 15, 2000 2,500* 36,819
TOTALS 6,700 $98,769
</TABLE>
*Belco 6 1/2% Convertible Preferred Stock
<PAGE>
Schedule 5.20 Future Commitment
Joint Development Agreement effective November 1, 1996, between the
Borrower and Andex Partners and Andover Partners under which the Borrower is
obligated to expend $20,000,000 on seismic, leasing and exploratory activities
in Green River and Wind River Basins of Wyoming. As of May 31, 2000, less than
$2,000,000 remains to be expended by the Borrower pursuant to this obligation.
<PAGE>
Schedule 8.2(e) Existing Indebtedness
None.
<PAGE>
Schedule 5.21 UCC Filing Jurisdictions
Filing the UCC-1 Financing Statements for the Borrower, Belco Energy Corp.
and BOG Wyoming LLC with the following offices:
1) Secretary of State of New York
2) UCC Filing Office of New York County, New York
<PAGE>
Schedule 8.8 Existing Investments
None.
<PAGE>
Schedule 8.4 Guarantee Obligations
None.
<PAGE>
Schedule 8.3 Existing Liens
None.
<PAGE>
Schedule 8.10 Affiliate Transactions
None.
<PAGE>
Schedule 11.2 Addresses of Notices
LENDERS
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<S> <C>
BANK OF AMERICA BANKERS TRUST COMPANY
901 Main Street, 64th Floor 130 Liberty Street, MS 2303
Dallas, TX 95202 New York, New York 10006
Attention: J. Scott Fowler Attention: Tad Neafsey
Telephone: (214) 209-3747 Telephone: (212) 250-2771
Facsimile: (214) 209-1286 Facsimile: (212) 250-2923
BANK OF SCOTLAND FLEET NATIONAL BANK
1021 Main, Suite 1370 100 Federal Street, MS 010802
Houston, Texas 77002 Boston, Massachusetts 02110
Attention: Rex McSwain Attention: George Passela
Telephone: (713) 651-1870 Telephone: (617) 434-7160
Facsimile: (713) 651-9714 Facsimile: (617) 434-3652
BANK ONE TEXAS, N.A. FORTIS CAPITAL CORP.
1717 Main Street, MC TX12448 100 Crescent Court, Suite 1777
Dallas, Texas 75201 Dallas, TX 75201
Attention: Reed Thompson Attention: Darrell Holley
Telephone: (214) 290-2162 Telephone: (214) 953-9307
Facsimile: (214) 290-2332 Facsimile: (214) 754-5981
CHRISTIANIA BANK OG THE SANWA BANK LIMITED
KREDITKASSE ASA 1200 Smith Street, Suite 2670
11 West 42nd Street, 7th Floor Houston, Texas 77002
New York, New York 10036 Attention: Clyde Redford
Attention: Peter M. Dodge Telephone: (713) 652-3190
Telephone: (212) 827-4835 Facsimile: (713) 654-1462
Facsimile: (212) 827-4888
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