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EXECUTION
VERSION
Amended and Restated Credit Agreement
Dated as of
August 6, 2007
among
McMoRan Exploration Co.,
As Parent,
McMoRan Oil & Gas LLC,
as Borrower,
JPMorgan Chase Bank, N.A.,
as Administrative Agent,
Merrill Lynch Capital,
a division of Merrill Lynch Business Financial Services,
Inc.
as SyndicationAgent,
BNP Paribas,
As Documentation Agent,
and
The Lenders Party Hereto
Joint Lead Arrangers and Joint Book Runners
J.P. Morgan Securities
Inc.
Merrill Lynch Capital,
a
division of Merrill Lynch Business Financial Services,
Inc.
TABLE OF CONTENTS
Page
i
ii
iii
iv
ANNEXES, EXHIBITS AND SCHEDULES
Annex
I List
of Maximum Credit Amounts
Exhibit
A Form
of Note
Exhibit
B
Form of Borrowing Request
Exhibit
C
Form of Interest Election Request
Exhibit
D Form
of Compliance Certificate
Exhibit
E
Form of Legal Opinion of Jones Walker, special counsel to
theBorrower
Exhibit
F-1 Security
Instruments
Exhibit
F-2 Form
of Guaranty and Collateral Agreement
Exhibit
G
Form of Assignment and Assumption
Exhibit
H Form
of Exemption Certificate
Exhibit
I
Form of Intercreditor Agreement
Schedule
1.02 Approved
Counterparties
Schedule
1.02(b) Preferential
Purchase Right Properties
Schedule
7.05 Litigation
Schedule
7.10(d) ERISA
Plan
Schedule
7.10(f) Under-funded
ERISA Plan
Schedule
7.12 Insurance
Schedule
7.14 Subsidiaries
Schedule
7.16 Title
Exceptions
Schedule
7.18 Gas
Imbalances
Schedule
7.19 Marketing
Contracts
Schedule
7.20 Swap
Agreements
Schedule
9.02 Existing
Debt
Schedule
9.03 Existing
Liens
Schedule
9.05 Investments
v
THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of
August 6, 2007, is among: McMoRan Exploration Co., a Delaware
corporation (the “ Parent ”), McMoRan Oil &
Gas LLC, a Delaware limited liability company (the “
Borrower ”); each of the Lenders from time to time
party hereto; JPMorgan Chase Bank, N.A. (in
its individual capacity, “ JPMorgan ”), as
administrative agent for the Lenders (in such capacity, together
with its successors in such capacity, the “ Administrative
Agent ”); Merrill Lynch Capital, a division of Merrill
Lynch Business Financial Services, Inc., as syndication agent for
the Lenders (in such capacity, together with its successors in such
capacity, the “ Syndication Agent ”); and BNP
Paribas, as documentation agent for the Lenders (in such capacity,
together with its successors in such capacity, a “
Documentation Agent ”)
R E C I T A L S
A. The
Borrower, the Administrative Agent, the lenders and others
party thereto entered into that certain Credit Agreement dated
as of April 19, 2006 (as amended prior to the Effective Date,
the “ Existing Credit Agreement ”) pursuant
to which the lenders party thereto made certain loans to and
extensions of credit available on behalf of the
Borrower.
B. The
Parent and the Borrower have requested that the Administrative
Agent, the Syndication Agent, the Documentation Agents and the
Lenders, and each has agreed to, amend, restate, and increase
the Existing Credit Agreement to make certain loans and
extensions of credit to the Borrower subject to the terms and
conditions of this Agreement.
C. In
consideration of the mutual covenants and agreements herein
contained and of the loans, extensions of credit and
commitments hereinafter referred to, the parties hereto agree
as follows:
ARTICLE I
Definitions and Accounting Matters
Section
1.01
Terms Defined Above . As
used in this Agreement, each term defined above has the meaning
indicated above.
Section
1.02
Certain Defined Terms . As
used in this Agreement, the following terms have the meanings
specified below:
“
ABR ”, when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base
Rate.
“
Acquisition ” means the acquisition of certain
oil, gas and mineral Properties pursuant to the terms and
conditions of the Acquisition Documents.
“
Acquisition Agreement ” means the Purchase and
Sale Agreement between Seller and Borrower, as Buyer, dated
June 20, 2007, to be effective July 1, 2007.
“
Acquisition Documents ” means (a) the Acquisition
Agreement, (b) the P&A Escrow Agreement, (c) the
Transition Services Agreement, (d) the Title Indemnity
Agreement and (e) all bills of sale, assignments, agreements,
instruments and documents executed and delivered in connection
therewith, in each case, as amended from time to time in
accordance with Section 9.18.
1
“
Acquisition Properties ” means the Oil and Gas
Properties and other properties acquired by the Borrower
pursuant to the Acquisition Documents.
“
Adjusted LIBO Rate ” means, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate
per annum (rounded upwards, if necessary, to the next 1/16 of
1%) equal to (a) the LIBO Rate
for such Interest Period multiplied by (b) the Statutory
Reserve Rate.
“
Administrative Questionnaire ” means an
Administrative Questionnaire in a form supplied by the
Administrative Agent.
“
Affiliate ” means, with respect to a specified
Person, another Person that directly, or indirectly through
one or more intermediaries, Controls or is Controlled by or is
under common Control with the Person specified.
“
Agents ” means, collectively, the Administrative
Agent, the Syndication Agent and the Documentation Agent; and
“Agent” shall mean any of the Administrative
Agent, the Syndication Agent or any Documentation Agent, as
the context requires.
“
Aggregate Maximum Credit Amounts ” at any time
shall equal the sum of the Maximum Credit Amounts, as the same
may be reduced or terminated pursuant to Section 2.06 .
“
Aggregated Subsidiaries ” means any group of
Subsidiaries which in the aggregate would constitute a
Significant Subsidiary.
“
Agreement ” means this Amended and Restated
Credit Agreement, dated as of August 6, 2007, as the same may
from time to time be amended, modified, supplemented or
restated.
“
Alternate Base Rate ” means, for any day, a rate
per annum equal to the greater of (a) the Prime Rate in effect
on such day and (b) the Federal Funds Effective Rate in effect
on such day plus ½ of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime Rate
or the Federal Funds Effective Rate,
respectively.
“
Applicable Margin ” means, for any day, with
respect to any Loan or the Commitment Fee Rate, the applicable
rate per annum set forth below based upon the Borrowing Base
Utilization Percentage then in effect:
2
Each
change in the Applicable Margin and the Commitment Fee Rate
shall apply during the period commencing on the effective date
of a change in the Borrowing Base Utilization Percentage and
ending on the date immediately preceding the effective date of
the next such change, provided, however, that if at any time
the Borrower fails to deliver a Reserve Report pursuant to
Section 8.12(a) , then the “
Applicable Margin ” means the rate per annum set
forth on the grid when the Borrowing Base Utilization
Percentage is at its highest level. Notwithstanding
anything to the contrary herein contained, for the period from
the Effective Date until November 1, 2007, the Applicable
Margin shall be based upon the Borrowing Base Utilization
Percentage grid and in no event shall the Applicable Margin be
less than 250 b.p. for Eurodollar Loans, 100 b.p. for ABR
Loans and 50 b.p. for the Commitment Fee Rate.
“
Applicable Percentage ” means, with respect to
any Lender, the percentage of the Aggregate Maximum Credit
Amounts represented by such Lender’s Maximum Credit
Amount as such percentage is set forth on Annex
I.
“
Approved Counterparty ” means (a) any Lender or
any Affiliate of a Lender, (b) any other Person whose long
term senior unsecured debt rating at the time a particular
Swap Agreement transaction is entered into is A/A2 by S&P
or Moody’s (or their equivalent) or higher, or (c) with
regard to Swap Agreements in respect of commodities, and
subject to the conditions set forth therein, any other Person
listed on Schedule 1.02.
“
Approved Petroleum Engineers ” means (a)
Netherland, Sewell & Associates, Inc., (b) Ryder Scott
Company Petroleum Consultants, L.P. and (c) any other
independent petroleum engineers reasonably acceptable to the
Administrative Agent.
“
Arrangers ” means J.P. Morgan Securities Inc. and
Merrill Lynch Capital, a division of Merrill Lynch Business
Financial Services, Inc., in their capacities as the joint
lead arrangers and joint book runners hereunder.
“
Assignee ” has the meaning set forth in Section
12.04(b).
“
Assignment and Assumption ” means an assignment
and assumption entered into by a Lender and an assignee (with
the consent of any party whose consent is required by Section 12.04(b) ), and accepted by the
Administrative Agent, in the form of Exhibit G or any other
form approved by the Administrative Agent.
“
Availability Period ” means the period from and
including the Effective Date to but excluding the Termination
Date.
“
Board ” means the Board of Governors of the
Federal Reserve System of the United States of America or any
successor Governmental Authority.
“
Borrowing ” means Loans of the same Type, made,
converted or continued on the same date and, in the case of
Eurodollar Loans, as to which a single Interest Period is in
effect.
“
Borrowing Base ” means at any time an amount
equal to the amount determined in accordance with Section
2.07, as the same may be adjusted from time to time pursuant
to Section 2.08(k), Section 8.13(c), Section 8.13(d) or
Section 9.11(d). Prior to April 1, 2009, the Borrowing Base
and Conforming Borrowing Base (defined below) shall be two
separate and distinct determinations under Section 2.07;
provided, that, on and after April 1, 2009, there shall only
be a single determination under Section 2.07 of the Borrowing
Base.
3
“
Borrowing Base Deficiency ” occurs if at any time
the total Revolving Credit Exposures exceeds the Borrowing
Base then in effect.
“
Borrowing Base Utilization Percentage ” means, as
of any day, the fraction expressed as a percentage, the
numerator of which is the sum of the Revolving Credit
Exposures of the Lenders on such day, and the denominator of
which is (i) prior to April 1, 2009, the Conforming Borrowing
Base in effect on such day and (ii) on and after April 1,
2009, the Borrowing Base in effect on such day.
“
Borrowing Request ” means a request by the
Borrower for a Borrowing in accordance with Section 2.03 .
“
Bridge Credit Agreement ” means the Credit
Agreement, dated as of Effective Date, among the Parent, as
borrower, the lenders party thereto from time to time,
JPMorgan Chase Bank, N.A., as administrative agent, and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
syndication agent, as the same may be amended from time to
time in accordance with Section 9.04(b).
“
Bridge Loans ” means the senior term loans in
favor of the Parent under the Bridge Credit Agreement in an
aggregate principal amount not to exceed
$800,000,000.
“
Business Day ” means any day that is not a
Saturday, Sunday or other day on which commercial banks in New
York City or Houston, Texas are authorized or required by law
to remain closed; and if such day relates to a Borrowing or
continuation of, a payment or prepayment of principal of or
interest on, or a conversion of or into, or the Interest
Period for, a Eurodollar Loan or a notice by the Borrower with
respect to any such Borrowing or continuation, payment,
prepayment, conversion or Interest Period, any day which is
also a day on which dealings in dollar deposits are carried
out in the London interbank market.
“
Capital Leases ” means, in respect of any Person,
all leases which shall have been, or should have been, in
accordance with GAAP, recorded as capital leases on the
balance sheet of the Person liable (whether contingent or
otherwise) for the payment of rent thereunder.
“
Casualty Event ” means any loss, casualty or
other insured damage to, or any nationalization, taking under
power of eminent domain or by condemnation or similar
proceeding of, any Property of any Loan Party having a fair
market value in excess of $1,000,000.
“
Change in Control ” means (a) the acquisition of
ownership, directly or indirectly, beneficially or of record,
by any Person or group (within the meaning of the Securities
Exchange Act of 1934 and the rules of the SEC thereunder as in
effect on the date hereof), of Equity Interests representing
more than 35% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of
the Parent, (b) occupation of a majority of the seats (other
than vacant seats) on the board of directors of the Parent by
Persons who were neither (i) nominated by the board of
directors of the Parent nor (ii) appointed by directors so
nominated, or (c) the failure of the Parent to at any time
own, directly or indirectly, beneficially or of record, 100%
of all of the issued and outstanding Equity Interests of the
Borrower.
“
Change in Law ” means (a) the adoption of any
law, rule or regulation after the date of this Agreement, (b)
any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance
by any Lender or the Issuing Bank (or, for purposes of Section 5.01(b) ), by any lending office of
such Lender or by such Lender’s or the Issuing
Bank’s holding company, if any) with any request,
guideline or directive (whether
4
or
not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement.
“
Code ” means the Internal Revenue Code of 1986,
as amended from time to time, and any successor
statute.
“
Commitment ” means, with respect to each Lender,
the commitment of such Lender to make Loans and to acquire
participations in Letters of Credit hereunder, expressed as an
amount representing the maximum aggregate amount of such
Lender’s Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced or terminated from time to time
pursuant to Section 2.06 and (b)
modified from time to time pursuant to assignments by or to
such Lender pursuant to Section
12.04(b) ; and “ Commitments ” means
the aggregate amount of the Commitments of all the
Lenders. The amount representing each
Lender’s Commitment shall at any time be the lesser of
such Lender’s Maximum Credit Amount and such
Lender’s Applicable Percentage of the then effective
Borrowing Base. As of the Effective Date, the
aggregate Commitments of the Lenders are
$700,000,000.
“
Commitment Fee Rate ” is set forth in the
definition of Applicable Margin.
“
Conduit Lender ” means any special purpose
corporation organized and administered by any Lender for the
purpose of making Loans otherwise required to be made by such
Lender and designated by such Lender in a written instrument
delivered to the Administrative Agent and the Borrower;
provided , that the designation by any Lender of a
Conduit Lender shall not relieve the designating Lender of any
of its obligations under this Agreement if, for any reason,
its Conduit Lender fails to meet any such obligations, and the
designating Lender (and not the Conduit Lender) shall have the
sole right and responsibility to deliver all consents and
waivers required or requested under this Agreement with
respect to its Conduit Lender, and provided ,
further , that no Conduit Lender shall (a) be entitled
to receive any greater amount pursuant to Section 5.01, 5.02,
5.03 or 12.03 than the designating Lender would have been
entitled to receive in respect of the extensions of credit
made by such Conduit Lender or (b) be deemed to have any
Commitment.
“
Conforming Borrowing Base ” means at any time an
amount equal to the amount determined in accordance with
Section 2.07, as the same may be adjusted from time to time
pursuant to Section 2.08(k), Section 8.13(c), Section 8.13(d)
or Section 9.11(d).
“
Consolidated Net Income ” means with respect to
the Parent and the Consolidated Subsidiaries, for any period,
the aggregate of the net income (or loss) of the Parent and
the Consolidated Subsidiaries after allowances for taxes for
such period determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded from such net
income (to the extent otherwise included therein) the
following: (a) the net income of any Person in which the
Parent or any Consolidated Subsidiary has an interest (which
interest does not cause the net income of such other Person to
be consolidated with the net income of the Parent and the
Consolidated Subsidiaries in accordance with GAAP), except to
the extent of the amount of dividends or distributions
actually paid in cash during such period by such other Person
to the Parent or to a Consolidated Subsidiary, as the case may
be; (b) the net income (but not loss) during such period of
any Consolidated Subsidiary to the extent that the declaration
or payment of dividends or similar distributions or transfers
or loans by that Consolidated Subsidiary is not at the time
permitted by operation of the terms of its charter or any
agreement, instrument or Governmental Requirement applicable
to such Consolidated Subsidiary or is otherwise restricted or
prohibited, in each case determined in accordance with GAAP;
(c) any extraordinary non-cash gains or losses during such
period; (d) non-cash gains or losses under FAS 133 resulting
from the net change in Parent’s mark to market portfolio
of commodity price risk management activities during that
period; (e) any gains or losses attributable to writeups or
writedowns of assets, including ceiling test writedowns; (f)
any non-cash gains or losses attributable to any non-cash
impairment charges resulting from the application of Statement
of
5
Financial
Accounting Standards No. 142 and No. 144 and any amortization
of intangibles pursuant to Statement of Financial Accounting
Standards No. 141; (g) any net after-tax income or loss from
discontinued operations and any net after-tax gain or loss on
disposal of discontinued operations; (h) the cumulative effect
of a change in accounting principles; (i) fees, premiums
and expenses incurred in connection with the Transactions,
this Agreement, the Loan Documents, the Bridge Loans, the
Senior Notes, the Acquisition and the repayment of Debt under
the Second Lien Term Loan Agreement up to $25,000,000 in the
aggregate and (j) any non-cash
compensation expense under FAS 142R recognized from grants of
stock appreciation or similar rights, stock options,
restricted stock, restricted stock units or other rights to
officers, directors and employees of such Person or any of its
Restricted Subsidiaries, provided that if such non-cash
expense subsequently becomes a cash expense, it will be
included in the period during which it became a cash
expense; provided that for the purposes of calculating
Consolidated Net Income for any period of four consecutive
fiscal quarters (each, a “ Reference
Period” "), if during such Reference Period (or, in
the case of pro forma calculations, during the period from the
last day of such Reference Period to and including the date as
of which such calculation is made) the Borrower or any
Restricted Subsidiary shall have made a Material Disposition
or Material Acquisition, Consolidated Net Income for such
Reference Period shall be calculated after giving pro forma
effect thereto as if such Material Disposition or Material
Acquisition occurred on the first day of such Reference Period
(with the Reference Period for the purposes of pro forma
calculations being the most recent period of four
consecutive fiscal quarters for which the relevant financial
information is available). As used in this definition,
“Material Acquisition” means any acquisition of
property or series of related acquisitions of property that
involves consideration in excess of $10,000,000; and
“Material Disposition” means any sale, transfer or
other disposition of property or series of related sales,
transfers or other dispositions of property that yields gross
proceeds to the Borrower or any Restricted Subsidiary in
excess of $10,000,000.
“
Consolidated Subsidiaries ” means each Restricted
Subsidiary of the Parent (whether now existing or hereafter
created or acquired) the financial statements of which shall
be (or should have been) consolidated with the financial
statements of the Parent in accordance with GAAP.
“
Control ” means the possession, directly or
indirectly, of the power to direct or cause the direction of
the management or policies of a Person, whether through the
ability to exercise voting power, by contract or
otherwise. “ Controlling ” and
“ Controlled ” have meanings correlative
thereto.
“
Debt ” means, for any Person, the sum of the
following (without duplication): (a) all obligations of such
Person for borrowed money or evidenced by bonds,
bankers’ acceptances, debentures, notes or other similar
instruments; (b) all obligations of such Person (whether
contingent or otherwise) in respect of letters of credit,
surety or other bonds and similar instruments; (c) all
accounts payable and all accrued expenses, liabilities or
other obligations of such Person to pay the deferred purchase
price of Property or services; (d) all obligations under
Capital Leases; (e) all obligations under Synthetic Leases;
(f) all Debt (as defined in the other clauses of this
definition) of others secured by (or for which the holder of
such Debt has an existing right, contingent or otherwise, to
be secured by) a Lien on any Property of such Person, whether
or not such Debt is assumed by such Person; (g) all Debt (as
defined in the other clauses of this definition) of others
guaranteed by such Person or in which such Person otherwise
assures a creditor against loss of the Debt (howsoever such
assurance shall be made) but only to the extent of the lesser
of the amount of such Debt and the maximum stated amount of
such guarantee or assurance against loss; (h) all obligations
or undertakings of such Person to maintain or cause to be
maintained the financial position or covenants of others or to
purchase the Debt or Property of others; (i) obligations
to deliver commodities, goods or services, including, without
limitation, Hydrocarbons, in consideration of one or more
advance payments, other than gas balancing arrangements in the
ordinary course of business; (j) obligations to pay for goods
or services even if such goods or services are not actually
received or utilized by such Person; (k) any Debt of a
partnership for which such Person is liable either by
agreement, by
6
operation
of law or by a Governmental Requirement but only to the extent
of such liability; (l) Disqualified Capital Stock; and (m) the
undischarged balance of any production payment created by such
Person or for the creation of which such Person directly or
indirectly received payment. The Debt of any Person
shall include all obligations of such Person of the character
described above to the extent such Person remains legally
liable in respect thereof notwithstanding that any such
obligation is not included as a liability of such Person under
GAAP.
“
Default ” means any event or condition which
constitutes an Event of Default or which upon notice, lapse of
time or both would, unless cured or waived, become an Event of
Default.
“
Disqualified Capital Stock ” means any Equity
Interest 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, requires the payment of
dividends (other than dividends payable solely in Equity
Interests which do not otherwise constitute Disqualified
Capital Stock) or matures or is mandatorily redeemable for any
consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock), pursuant to a
sinking fund obligation or otherwise, or is convertible or
exchangeable for Debt or redeemable for any consideration
other than other Equity Interests (which would not constitute
Disqualified 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 (a) the Maturity Date and (b)
the date on which there are no Loans, LC Exposure or other
obligations hereunder outstanding and all of the Commitments
are terminated; provided, however, preferred Equity Interests
which would be Disqualified Capital Stock solely by virtue of
a requirement to pay dividends in cash shall not be
Disqualified Capital Stock to the extent the cash proceeds
thereof are used to repay or redeem Bridge Loans or Exchange
Notes; and provided further, however, preferred Equity
Interests which would be Disqualified Capital Stock solely by
virtue of a requirement to pay dividends in cash shall not be
Disqualified Capital Stock to the extent the cash proceeds
thereof are used to make an Investment in an Unrestricted
Subsidiary under Section 9.05(l). Notwithstanding
the preceding sentence, any Equity Interest that would
constitute Disqualified Capital Stock solely because the
holders thereof have the right to require the Person to
repurchase such Equity Interests upon the occurrence of a
change of control or an asset sale, shall not constitute
Disqualified Capital Stock.
“
dollars ” or “$” refers to lawful
money of the United States of America.
“
Domestic Subsidiary ” means any Restricted
Subsidiary of the Parent that is organized under the laws of
the United States of America or any state thereof or the
District of Columbia.
“
EBITDAX ” means, for any period, the sum of
Consolidated Net Income for such period plus the following
expenses or charges to the extent deducted from Consolidated
Net Income in such period: interest, income taxes,
depreciation, depletion, amortization, exploration expenses
and other similar noncash charges, minus all noncash income
added to Consolidated Net Income.
“
Effective Date ” means the date on which the
conditions specified in Section
6.01 are satisfied (or waived in accordance with Section 12.02 ).
“
Engineering Reports ” has the meaning assigned
such term in Section 2.07(c)(i).
“
Environmental Laws ” means any and all
Governmental Requirements pertaining in any way to health,
safety the environment or the preservation or reclamation of
natural resources, in effect in any and all jurisdictions in
which the Borrower or any Restricted Subsidiary is conducting
or at any time has conducted business, or where any Property
of the Borrower or any Restricted Subsidiary is located,
including without limitation, the Oil Pollution Act of 1990
(“ OPA ”), as amended, the Clean Air Act,
as
7
amended,
the Comprehensive Environmental, Response, Compensation, and
Liability Act of 1980 (“ CERCLA ”), as
amended, the Federal Water Pollution Control Act, as amended,
the Occupational Safety and Health Act of 1970, as amended,
the Resource Conservation and Recovery Act of 1976 (“
RCRA ”), as amended, the Safe Drinking Water Act,
as amended, the Toxic Substances Control Act, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as
amended, and other environmental conservation or protection
Governmental Requirements. The term
“oil” shall have the meaning specified in OPA, the
terms “ hazardous substance ” and “
release ” (or “ threatened release
”) have the meanings specified in CERCLA, the terms
“ solid waste ” and “ disposal
” (or “ disposed ”) have the meanings
specified in RCRA and the term “ oil and gas
waste ” shall have the meaning specified in Section
91.1011 of the Texas Natural Resources Code (“
Section 91.1011 ”); provided, however, that (a)
in the event either OPA, CERCLA, RCRA or Section 91.1011 is
amended so as to broaden the meaning of any term defined
thereby, such broader meaning shall apply subsequent to the
effective date of such amendment and (b) to the extent the
laws of the state or other jurisdiction in which any Property
of the Borrower or any Restricted Subsidiary is located
establish a meaning for “ oil ,” “
hazardous substance ,” “ release
,” “ solid waste ,” “
disposal ” or “ oil and gas waste
” which is broader than that specified in either OPA,
CERCLA, RCRA or Section 91.1011, such broader meaning shall
apply.
“
Equity Interests ” means shares of capital stock,
partnership interests, membership interests in a limited
liability company, beneficial interests in a trust or other
equity ownership interests in a Person, and any warrants,
options or other rights entitling the holder thereof to
purchase or acquire any such Equity Interest.
“
Equity Issuance ” means the issuance, sale or
other disposition after the Effective Date by the Parent of
its Equity Interests.
“
ERISA ” means the Employee Retirement Income
Security Act of 1974, as amended, and any successor
statute.
“
ERISA Affiliate ” means each trade or business
(whether or not incorporated) which together with the Parent
or any Subsidiary of the Parent would be deemed to be a
“single employer” within the meaning of section
4001(b)(1) of ERISA or subsections (b), (c), (m) or (o) of
section 414 of the Code.
“
ERISA Event ” means (a) a “Reportable
Event” described in section 4043 of ERISA and the
regulations issued thereunder, (b) the withdrawal of the
Parent, any Loan Party or any ERISA Affiliate from a Plan
during a plan year in which it was a “substantial
employer” as defined in section 4001(a)(2) of ERISA, (c)
the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under section
4041 of ERISA, (d) the institution of proceedings to terminate
a Plan by the PBGC, (e) receipt of a notice of withdrawal
liability pursuant to Section 4202 of ERISA, (f) any other
event or condition which might constitute grounds under
section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan or (g) on and
after the effectiveness of the Pension Act, a determination
that a Plan is, or is expected to be, in “at risk”
status (as defined n 303(i)(4) of ERISA or 430(i)(4) of the
Code).
“
Eurodollar ”, when used in reference to any Loan
or Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate
determined by reference to the Adjusted LIBO
Rate.
“
Event of Default ” has the meaning assigned such
term in Section 10.01.
8
“
Excepted Liens ” means: (a) Liens for
taxes, assessments or other governmental charges or levies
which are not delinquent or which are being contested in good
faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP; (b) Liens in
connection with workers’ compensation, unemployment
insurance or other social security, old age pension or public
liability obligations which are not delinquent or which are
being contested in good faith by appropriate action and for
which adequate reserves have been maintained in accordance
with GAAP; (c) statutory landlord’s liens,
operators’, vendors’, carriers’,
warehousemen’s, repairmen’s, mechanics’,
suppliers’, workers’, materialmen’s,
construction or other like Liens arising by operation of law
in the ordinary course of business or incident to the
exploration, development, operation and maintenance of Oil and
Gas Properties each of which is in respect of obligations that
are not delinquent or which are being contested in good faith
by appropriate action and for which adequate reserves have
been maintained in accordance with GAAP; (d) contractual Liens
which arise in the ordinary course of business under operating
agreements, joint venture agreements, oil and gas partnership
agreements, oil and gas leases, farm-out agreements, division
orders, contracts for the sale, transportation or exchange of
oil and natural gas, unitization and pooling declarations and
agreements, area of mutual interest agreements, overriding
royalty agreements, marketing agreements, processing
agreements, net profits agreements, development agreements,
gas balancing or deferred production agreements, injection,
repressuring and recycling agreements, salt water or other
disposal agreements, seismic or other geophysical permits or
agreements, and other agreements which are usual and customary
in the oil and gas business and are for claims which are not
delinquent or which are being contested in good faith by
appropriate action and for which adequate reserves have been
maintained in accordance with GAAP, provided that any such
Lien referred to in this clause does not materially impair the
use of the Property covered by such Lien for the purposes for
which such Property is held by the Borrower or any Restricted
Subsidiary or materially impair the value of such Property
subject thereto; (e) Liens arising solely by virtue of any
statutory or common law provision relating to banker’s
liens, rights of set-off or similar rights and remedies and
burdening only deposit accounts or other funds maintained with
a depository or financial institution; (f) easements,
restrictions, servitudes, permits, conditions, covenants,
exceptions or reservations in any Property of the Borrower or
any Restricted Subsidiary for the purpose of roads, pipelines,
transmission lines, transportation lines, distribution lines
for the removal of gas, oil, coal or other minerals or timber,
and other like purposes, or for the joint or common use of
real estate, rights of way, facilities and equipment, that do
not secure any monetary obligations and which in the aggregate
do not materially impair the use of such Property for the
purposes of which such Property is held by the Borrower or any
or materially impair the value of such Property subject
thereto; (g) Liens on cash or securities pledged or subject to
an escrow agreement to secure plugging and abandoning
obligations under the P&A Escrow Agreement, performance of
tenders, surety and appeal bonds, government contracts,
performance and return of money bonds, bids, trade contracts,
leases, statutory obligations, regulatory obligations and
other obligations of a like nature incurred in the ordinary
course of business and (h) judgment and attachment Liens not
giving rise to an Event of Default, provided that any
appropriate legal proceedings which may have been duly
initiated for the review of such judgment shall not have been
finally terminated or the period within which such proceeding
may be initiated shall not have expired and no action to
enforce such Lien has been commenced; provided, further that
Liens described in clause (e) shall remain “Excepted
Liens” only for so long as no action to enforce such
Lien has been commenced, and no intention to subordinate the
first priority Lien granted in favor of the Administrative
Agent and the Lenders is to be hereby implied or expressed by
the permitted existence of such Excepted Liens.
“
Exchange Notes ” means any securities issued in
exchange for the Bridge Loans having terms and conditions
substantially as set forth in Exhibit H to the Bridge Credit
Agreement.
“
Existing Convertible Notes ” means approximately
$215,870,000 of outstanding convertible notes of the Parent
consisting of (i) its $100,870,000 6% senior convertible notes
due 2008 and (ii) its $115,000,000 5 ½ % senior
convertible notes due 2011.
9
“
Federal Funds Effective Rate ” means, for any
day, the weighted average (rounded upwards, if necessary, to
the next 1/100 of 1%) 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 that is
a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by
it.
“
Financial Officer ” means, for any Person, any
vice president, the chief financial officer, principal
accounting officer, treasurer or controller of such
Person. Unless otherwise specified, all references
herein to a Financial Officer means a Financial Officer of the
Parent.
“
Financial Statements ” means the financial
statement or statements of the Parent and its Consolidated
Subsidiaries referred to in Section 7.04, including all
footnotes attached thereto.
“
First Lien Debt ” means the aggregate Revolving
Credit Exposures of the Lenders under this
Agreement.
“
Foreign Subsidiary ” means any Restricted
Subsidiary that is not a Domestic Subsidiary.
“
GAAP ” means generally accepted accounting
principles in the United States of America as in effect from
time to time subject to the terms and conditions set forth in
Section 1.05 .
“
Governmental Authority ” means the government of
the United States of America, any other nation or any
political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative
powers or functions of or pertaining to government over any
Loan Party, any of their Properties, any Agent, the Issuing
Bank or any Lender.
“
Governmental Requirement ” means any law,
statute, code, ordinance, order, determination, rule,
regulation, judgment, decree, injunction, franchise, permit,
certificate, license, authorization or other directive or
requirement, whether now or hereinafter in effect, including,
without limitation, Environmental Laws, energy regulations and
occupational, safety and health standards or controls, of any
Governmental Authority.
“
Guarantors ” means:
“
Guaranty Agreement ” means an agreement executed
by the Guarantors in substantially the form of Exhibit F-2
unconditionally guarantying on a joint and several basis,
payment of the Indebtedness, as the same may be amended,
modified or supplemented from time to time.
10
“
Hydrocarbon Interests ” means all rights, titles,
interests and estates now or hereafter acquired in and to oil
and gas leases, oil, gas and mineral leases, or other liquid
or gaseous hydrocarbon leases, mineral fee interests,
overriding royalty and royalty interests, net profit interests
and production payment interests, including any reserved or
residual interests of whatever nature.
“
Hydrocarbons ” means oil, gas, casinghead gas,
drip gasoline, natural gasoline, condensate, distillate,
liquid hydrocarbons, gaseous hydrocarbons and all products
refined or separated therefrom.
“
Indebtedness ” means any and all amounts owing or
to be owing by any Loan Party (whether direct or indirect
(including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter
arising): (a) to the Administrative Agent, the Issuing Bank or
any Lender under any Loan Document; (b) to any Lender or any
Affiliate of a Lender under any Swap Agreement between any
Loan Party and such Lender or Affiliate of a Lender while such
Person (or in the case of its Affiliate, the Person affiliated
therewith) is a Lender hereunder and (c) all renewals,
extensions and/or rearrangements of any of the
above.
“
Information Memorandum ” means the Confidential
Information Memorandum dated June 2007 relating to the Parent,
the Borrower and the Transactions.
“
Initial Reserve Report ” means the engineering
information provided by the Borrower and delivered to the
Administrative Agent, with respect to the value of the Oil and
Gas Properties of the Borrower and its Restricted Subsidiaries
as of December 31, 2006 and with respect to the Acquisition
Properties the merged report of Ryder Scott Petroleum Company,
L.P. and the Seller dated as of June 30, 2007.
“
Intercreditor Agreement ” means that certain
Intercreditor Agreement in substantially the form of Exhibit I
among the Administrative Agent, the Borrower and Guarantors
and the agent on behalf of the lenders under the Bridge Loans
and/or the holders of the Exchange Notes, as the same may from
time to time be amended, modified, supplemented or restated in
accordance with the provisions thereof.
“
Interest Election Request ” means a request by
the Borrower to convert or continue a Borrowing in accordance
with Section 2.04 .
“
Interest Payment Date ” means (a) with respect to
any ABR Loan, the last day of each March, June, September and
December and (b) with respect to any Eurodollar Loan, the last
day of the Interest Period applicable to the Borrowing of
which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three
months’ duration, each day prior to the last day of such
Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest
Period.
“
Interest Period ” means with respect to any
Eurodollar Borrowing, the period commencing on the date of
such Borrowing and ending on the numerically corresponding day
in the calendar month that is one, two, three or six months
(or, if available to each Lender, periods of less than one
month and periods of nine or twelve months) thereafter, as the
Borrower may elect; provided, that (a) if any Interest Period
would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall
end on the next preceding Business Day, (b) no Interest Period
may have a term which would extend beyond the Maturity Date,
(c) no Interest Period shall extend beyond the date of
scheduled Aggregate Maximum Credit Amount reductions if
repayments of any Loans are required on such dates, and (d)
any Interest Period pertaining to a Eurodollar Borrowing that
commences on the last Business Day of a calendar month (or on
a day for which there is no numerically
11
corresponding
day in the last calendar month of such Interest Period) shall
end on the last Business Day of the last calendar month of
such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date
of the most recent conversion or continuation of such
Borrowing.
“
Interim Assignment Properties ” means those
certain Acquisition Properties listed on Schedule 7.16 for
which the Seller has beneficial title but not obtained all
conveyance documents necessary to vest record legal title in
itself and as a result which the Borrower will not have record
legal title vested in it as of the Effective
Date.
“
Interim Redetermination ” has the meaning
assigned such term in Section
2.07(b) .
“
Interim Redetermination Date ” means the date on
which a Borrowing Base that has been redetermined pursuant to
an Interim Redetermination becomes effective as provided in
Section 2.07(d) .
“
Investment ” means, for any Person: (a) the
acquisition (whether for cash, Property, services or
securities or otherwise) of Equity Interests of any other
Person or any agreement to make any such acquisition
(including, without limitation, any “short sale”
or any sale of any securities at a time when such securities
are not owned by the Person entering into such short sale);
(b) the making of any advance, loan or capital contribution
to, the assumption of Debt of, the purchase or other
acquisition of any other Debt of or equity participation or
interest in, or other extension of credit to, any other Person
(including the purchase of Property from another Person
subject to an understanding or agreement, contingent or
otherwise, to resell such Property to such Person for any
value other than the then fair market value of such Property,
but excluding any such advance, loan or extension of credit
having a term not exceeding ninety (90) days representing the
purchase price of inventory, material, equipment or supplies
sold by such Person in the ordinary course of business); (c)
the purchase or acquisition (in one or a series of
transactions) of Property of another Person that constitutes a
business unit or (d) the entering into of any guarantee of, or
other contingent obligation (including the deposit of any
Equity Interests to be sold) with respect to, Debt or other
liability of any other Person and (without duplication) any
amount committed to be advanced, lent or extended to such
Person.
“
Issuing Bank ” means JPMorgan, in its
capacity as the issuer of Letters of Credit hereunder, and its
successors in such capacity as provided in Section 2.08(i) . The Issuing
Bank may, in its discretion, arrange for one or more Letters
of Credit to be issued by Affiliates of the Issuing Bank, in
which case the term “ Issuing Bank ” shall
include any such Affiliate with respect to Letters of Credit
issued by such Affiliate.
“
LC Commitment ” at any time means Two Hundred
Million Dollars ($200,000,000.00).
“
LC Disbursement ” means a payment made by the
Issuing Bank pursuant to a Letter of Credit.
“
LC Exposure ” means, at any time, the sum of (a)
the aggregate undrawn amount of all outstanding Letters of
Credit at such time plus (b) the aggregate amount of all LC
Disbursements that have not yet been reimbursed by or on
behalf of the Borrower at such time. The LC
Exposure of any Lender at any time shall be its Applicable
Percentage of the total LC Exposure at such time.
“
Lenders ” means the Persons listed on Annex I and
any Person that shall have become a party hereto pursuant to
an Assignment and Assumption, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and
Assumption; provided , that unless the context
otherwise requires, each reference herein to the Lenders shall
be deemed to include any Conduit Lender.
12
“
Letter of Credit ” means any letter of credit
issued pursuant to this Agreement, including without
limitation the PPR Letter of Credit.
“
Letter of Credit Agreements ” means all letter of
credit applications and other agreements (including any
amendments, modifications or supplements thereto) submitted by
the Borrower, or entered into by the Borrower, with the
Issuing Bank relating to any Letter of Credit.
“
LIBO Rate ” means, with respect to each day
during each Interest Period pertaining to a Eurodollar Loan,
the rate per annum determined on the basis of the rate for
deposits in dollars for a period equal to such Interest Period
commencing on the first day of such Interest Period appearing
on the Reuters Screen LIBOR01 Page as of 11:00 A.M., London
time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does
not appear on such page (or otherwise on such screen), the
“ LIBO Rate ” shall be determined by
reference to such other comparable publicly available service
for displaying eurodollar rates as may be selected by the
Administrative Agent or, in the absence of such availability,
by reference to the rate at which the Administrative Agent is
offered dollar deposits at or about 11:00 A.M., London time,
two Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where its eurodollar
and foreign currency and exchange operations are then being
conducted for delivery on the first day of such Interest
Period for the number of days comprised therein.
“
Lien ” means any interest in Property
securing an obligation owed to, or a claim by, a Person other
than the owner of the Property, whether such interest is based
on the common law, statute or contract, and whether such
obligation or claim is fixed or contingent, and including but
not limited to (a) the lien or security interest arising from
a mortgage, encumbrance, pledge, security agreement,
conditional sale or trust receipt or a lease, consignment or
bailment for security purposes or (b) production payments and
the like payable out of Oil and Gas Properties. The
term “ Lien ” shall include easements,
restrictions, servitudes, permits, conditions, covenants,
exceptions or reservations. For the purposes of this
Agreement, the Parent and its Restricted Subsidiaries shall be
deemed to be the owner of any Property which it has acquired
or holds subject to a conditional sale agreement, or leases
under a financing lease or other arrangement pursuant to which
title to the Property has been retained by or vested in some
other Person in a transaction intended to create a
financing.
“
Loan Documents ” means this Agreement, the Notes,
the Letter of Credit Agreements, the Letters of Credit and the
Security Instruments.
“
Loan Party ” means the Parent, the Borrower and
any other Guarantor.
“
Loans ” means the loans made by the Lenders to
the Borrower pursuant to this Agreement.
“
Majority Lenders ” means, at any time while no
Loans or LC Exposure is outstanding, Lenders having greater
than fifty percent (50%) of the Aggregate Maximum Credit
Amounts; and at any time while any Loans or LC Exposure is
outstanding, Lenders holding greater than fifty percent (50%)
of the outstanding aggregate principal amount of the Loans or
participation interests in Letters of Credit (without regard
to any sale by a Lender of a participation in any Loan under
Section 12.04(c) ).
“
Material Adverse Effect ” means a material
adverse change in, or material adverse effect on (a) the
business, operations or financial condition of the Parent and
the Loan Parties taken as a whole, (b) the ability of any Loan
Party to perform any of its obligations under any Loan
Document to which it is a party, (c) the validity or
enforceability of any Loan Document or (d) the rights and
remedies of or benefits available to the Administrative Agent,
any other Agent, the Issuing Bank or any Lender under the Loan
Documents.
13
“
Material Indebtedness ” means Debt (other than
the Loans and Letters of Credit), or obligations in respect of
one or more Swap Agreements, of any one or more of any Loan
Party in an aggregate principal amount exceeding
$25,000,000. For purposes of determining Material
Indebtedness, the “principal amount” of the
obligations of any Loan Party in respect of any Swap Agreement
at any time shall be the Swap Termination Value.
“
Maturity Date ” means August 6,
2012.
“
Maximum Credit Amount ” means, as to each Lender,
the amount set forth opposite such Lender’s name on
Annex I under the caption “Maximum Credit
Amounts”, as the same may be (a) reduced or terminated
from time to time in connection with a reduction or
termination of the Aggregate Maximum Credit Amounts pursuant
to Section 2.06, or (b) modified from time to time pursuant to
any assignment permitted by Section
12.04(b) . As of the Effective Date, the aggregate Maximum
Credit Amounts of the Lenders are $700,000,000.
“
Moody’s ” means Moody’s Investors
Service, Inc. and any successor thereto that is a nationally
recognized rating agency.
“
Mortgaged Property ” means any Property owned by
the Borrower or any Guarantor which is subject to the Liens
existing and to exist under the terms of the Security
Instruments.
“
Multiemployer Plan ” means a Plan which is a
multiemployer plan as defined in section 3(37) or 4001 (a)(3)
of ERISA.
“
New Borrowing Base Notice ” has the meaning
assigned such term in Section
2.07(d) .
“
Non-Recourse Debt ” means any Debt of any
Unrestricted Subsidiary, in each case in respect of which: (a)
the holder or holders thereof (i) shall have recourse only to,
and shall have the right to require the obligations of such
Unrestricted Subsidiary to be performed, satisfied, and paid
only out of, the Property of such Unrestricted Subsidiary
and/or one or more of its Subsidiaries (but only to the extent
that such Subsidiaries are Unrestricted Subsidiaries) and/or
any other Person (other than the Parent, the Borrower and/or
any Restricted Subsidiary) and (ii) shall have no direct or
indirect recourse (including by way of guaranty, support or
indemnity) to the Parent, the Borrower or any Restricted
Subsidiary or to any of the Property of the Parent, the
Borrower or any Restricted Subsidiary, whether for principal,
interest, fees, expenses or otherwise; and (b) the terms and
conditions relating to the non-recourse nature of such Debt
are in form and substance reasonably acceptable to the
Administrative Agent.
“
Non-US Lender ” has the meaning set forth in
Section 1.01(d) .
“
Notes ” means the promissory notes, if any, of
the Borrower described in Section
2.02(d) and being substantially in the form of Exhibit A,
together with all amendments, modifications, replacements,
extensions and rearrangements thereof.
“
Oil and Gas Properties ” means (a) Hydrocarbon
Interests; (b) the Properties now or hereafter pooled or
unitized with Hydrocarbon Interests; (c) 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) which may
affect all or any portion of the Hydrocarbon Interests;
(d) all operating agreements, contracts and other
agreements, including production sharing contracts and
agreements, which relate to any of the Hydrocarbon Interests
or the production, sale, purchase, exchange or processing of
Hydrocarbons from or attributable to such Hydrocarbon
Interests; (e) all Hydrocarbons in and under and which may be
produced and saved or attributable to the Hydrocarbon
Interests, including all oil in tanks, and all rents, issues,
profits, proceeds,
14
products,
revenues and other incomes from or attributable to the
Hydrocarbon Interests; (f) all tenements, hereditaments,
appurtenances and Properties in any manner appertaining,
belonging, affixed or incidental to the Hydrocarbon Interests
and (g) all Properties, rights, titles, interests and estates
described or referred to above, including any and all
Property, real or personal, now owned or hereinafter acquired
and situated upon, used, held for use or useful in connection
with the operating, working or development of any of such
Hydrocarbon Interests or Property (excluding drilling rigs,
automotive equipment, rental equipment or other personal
Property which may be on such premises for the purpose of
drilling a well or for other similar temporary uses) and
including any and all oil wells, gas wells, injection wells or
other wells, buildings, structures, fuel separators, liquid
extraction plants, plant compressors, pumps, pumping units,
field gathering systems, tanks and tank batteries, fixtures,
valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements,
cables, wires, towers, casing, tubing and rods, surface
leases, rights-of-way, easements and servitudes together with
all additions, substitutions, replacements, accessions and
attachments to any and all of the foregoing.
“
P&A Escrow Agreement ” means that certain
P&A Escrow Agreement dated as of August 6, 2007 among the
Borrower and the Seller.
“
Parent Loan ” means the intercompany loan
agreement by and between the Borrower, as borrower, and the
Parent, as lender, dated as of April 17, 2006.
“
Participant ” has the meaning set forth in
Section 12.04(c) (i).
“
PBGC ” means the Pension Benefit Guaranty
Corporation, or any successor thereto.
“
Pension Act ”: means the Pension Protection Act
of 2006, as it presently exists or as it may be amended from
time to time.
“
Permitted Refinancing Debt ” means Debt (for
purposes of this definition, “ new Debt ”)
incurred in exchange for, or proceeds of which are used to
refinance, all of any other Debt (the “ Refinanced
Debt ”); provided that (a) such new Debt is in
an aggregate principal amount not in excess of the sum of
(i) the aggregate principal amount then outstanding of
the Refinanced Debt (or, if the Refinanced Debt is exchanged
or acquired for an amount less than the principal amount
thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount) and (ii) an
amount necessary to pay any fees and expenses, including
premiums, related to such exchange or refinancing;
(b) such new Debt has a stated maturity no earlier than
the stated maturity of the Refinanced Debt and an average life
no shorter than the average life of the Refinanced Debt;
(c) such new Debt (and any guarantees thereof) is secured
by no more collateral than the collateral which secured, or is
permitted by the terms of this Agreement to secure, the
Refinanced Debt; (d) the obligor(s) in respect of such new
Debt shall be the same as the obligor(s) in respect of such
Refinanced Debt and if such Refinanced Debt is not guarantied
by any Loan Party, then such new Debt shall also not be
guarantied by any Loan Party; and (e) the Liens, if any,
securing such new Debt are subordinated to the Liens securing
the Indebtedness (or, if applicable, the Guaranty Agreement)
to at least the same extent as the Liens securing the
Refinanced Debt.
“
Person ” means any natural person, corporation,
limited liability company, trust, joint venture, association,
company, partnership, Governmental Authority or other
entity.
“
Plan ” means any employee pension benefit plan,
as defined in section 3(2) of ERISA, which (a) is currently or
hereafter sponsored, maintained or contributed to by a Loan
Party or an ERISA Affiliate or (b) was at any time during the
six calendar years preceding the date hereof, sponsored,
maintained or contributed to by a Loan Party or an ERISA
Affiliate.
15
“
PPR Letter of Credit ” means the Letter of Credit
issued pursuant to Section 2.08(k).
“
Preferential Purchase Right Properties ” means
each of the Oil and Gas Properties listed in Schedule
1.02(b).
“
Prime Rate ” means the rate of interest per annum
publicly announced from time to time by JPMorgan as its
prime rate in effect at its principal office in New York City;
each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being
effective. Such rate is set by the Administrative
Agent as a general reference rate of interest, taking into
account such factors as the Administrative Agent may deem
appropriate; it being understood that many of the
Administrative Agent’s commercial or other loans are
priced in relation to such rate, that it is not necessarily
the lowest or best rate actually charged to any customer and
that the Administrative Agent may make various commercial or
other loans at rates of interest having no relationship to
such rate.
“
Property ” means any interest in any kind of
property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, cash,
securities, accounts and contract rights.
“
Proposed Borrowing Base ” has the meaning
assigned to such term in Section
2.07(c)(i) .
“
Proposed Borrowing Base Notice ” has the meaning
assigned to such term in Section
2.07(c)(ii) .
“
Redemption ” means with respect to any Debt, the
repurchase, redemption, prepayment, repayment, defeasance or
any other acquisition or retirement for value (or the
segregation of funds with respect to any of the foregoing) of
such Debt. “ Redeem ” has the
correlative meaning thereto.
“
Redetermination Date ” means, with respect to any
Scheduled Redetermination or any Interim Redetermination, the
date that the redetermined Borrowing Base related thereto
becomes effective pursuant to Section
2.07(d) .
“
Register ” has the meaning assigned such term in
Section 12.04(b)(iv) .
“
Regulation D ” means Regulation D of the Board,
as the same may be amended, supplemented or replaced from time
to time.
“
Related Parties ” means, with respect to any
specified Person, such Person’s Affiliates and the
respective directors, officers, employees, agents and advisors
(including attorneys, accountants and experts) of such Person
and such Person’s Affiliates.
“
Remedial Work ” has the meaning assigned such
term in Section 8.10(a)
.
“
Required Lenders ” means, at any time while no
Loans or LC Exposure is outstanding, Lenders having at least
sixty-six and two thirds percent (66-2/3%) of the Aggregate
Maximum Credit Amounts; and at any time while any Loans or LC
Exposure is outstanding, Lenders holding at least sixty-six
and two thirds percent (66-2/3%) of the outstanding aggregate
principal amount of the Loans or participation interests in
Letters of Credit (without regard to any sale by a Lender of a
participation in any Loan under Section
12.04(c)).
“
Reserve Report ” means the Initial Reserve Report
and each other report setting forth, as of each January 1
st or
July 1 st (or
such other date in the event of an Interim Redetermination),
the oil and gas reserves attributable to the Oil and Gas
Properties of the Borrower and the Restricted Subsidiaries,
together with a projection of the rate of production and
future net income, taxes, operating expenses and
16
capital
expenditures with respect thereto as of such date based upon
the economic assumptions consistent with the Administrative
Agent’s lending requirements at the time.
“
Responsible Officer ” means, as to any Person,
the Chief Executive Officer, the President, any Financial
Officer or any Vice President of such
Person. Unless otherwise specified, all references
to a Responsible Officer herein shall mean a Responsible
Officer of the Parent.
“
Restricted Payment ” means any dividend or other
distribution (whether in cash, securities or other Property)
with respect to any Equity Interests in any Person, or any
payment (whether in cash, securities or other Property),
including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition,
cancellation or termination of any such Equity Interests or
any option, warrant or other right to acquire any such Equity
Interests.
“
Restricted Subsidiary ” means any direct or
indirect Subsidiary of the Parent that is not an Unrestricted
Subsidiary.
“
Revolving Credit Exposure ” means, with respect
to any Lender at any time, the sum of the outstanding
principal amount of such Lender’s Loans and its LC
Exposure at such time.
“
Scheduled Redetermination ” has the meaning
assigned such term in Section
2.07(b) .
“
Scheduled Redetermination Date ” means the date
on which a Borrowing Base that has been redetermined pursuant
to a Scheduled Redetermination becomes effective as provided
in Section 2.07(d) .
“
SEC ” means the Securities and Exchange
Commission or any successor Governmental
Authority.
“
Second Lien Notes ” means the $100,000,000 Second
Lien Term Notes issued pursuant to the Second Lien Term Loan
Agreement.
“
Second Lien Term Loan Agreement ” means that
certain Second Lien Term Loan Agreement dated as of January
19, 2007 among the Borrower, JPMorgan Chase Bank, N.A., as
administrative agent and the lenders party
thereto.
“
Securities Act ” means the Securities Act of
1933, as amended from time to time.
“
Security Instruments ” means the Guaranty
Agreement, the Intercreditor Agreement (if and when executed),
mortgages, deeds of trust and other agreements, instruments or
certificates described or referred to in Exhibit F-1, and any
and all other agreements, instruments, consents or
certificates now or hereafter executed and delivered by the
Parent, the Borrower or any other Person (other than Swap
Agreements with the Lenders or any Affiliate of a Lender or
participation or similar agreements between any Lender and any
other lender or creditor with respect to any Indebtedness
pursuant to this Agreement) in connection with, or as security
for the payment or performance of the Indebtedness, the Notes,
this Agreement, or reimbursement obligations under the Letters
of Credit, as such agreements may be amended, modified,
supplemented or restated from time to time.
“
Seller ” means Newfield Exploration Company, a
Delaware corporation.
“
Senior Notes ” means (a) any senior, senior
subordinated or subordinated Debt issued by the Parent or the
Borrower (and any guarantees thereof by any Loan Party) on or
after the Effective Date under Section 9.02(j) which is
unsecured and any Permitted Refinancing Debt in respect
thereof, and (b)
17
any
convertible Debt issued by the Parent (and any guarantees
thereof by any Loan Party) on or after the Effective Date
under Section 9.02(j) which is unsecured and any Permitted
Refinancing Debt in respect thereof.
“
Significant Subsidiary ” has the meaning set
forth in the indentures relating to the Existing Convertible
Notes.
“
S&P ” means Standard & Poor’s
Ratings Group, a division of The McGraw-Hill Companies, Inc.,
and any successor thereto that is a nationally recognized
rating agency.
“
Statutory Reserve Rate ” means a fraction
(expressed as a decimal), the numerator of which is the number
one and the denominator of which is the number one minus the
aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the
Administrative Agent is subject, with respect to the Adjusted
LIBO Rate, for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the
Board). Such reserve percentages shall include
those imposed pursuant to such Regulation
D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time
to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any
change in any reserve percentage.
“
Subsidiary ” means: (a) any Person of which at
least a majority of the outstanding Equity Interests having by
the terms thereof ordinary voting power to elect a majority of
the board of directors, manager or other governing body of
such Person (irrespective of whether or not at the time Equity
Interests of any other class or classes of such Person shall
have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned
or controlled by the Parent and/or one or more of its
Subsidiaries and (b) any partnership of which the Parent or
any Loan Party is a general partner. Unless
otherwise indicated herein, each reference to the term “
Subsidiary ” shall mean a direct or indirect
Subsidiary of the Parent.
“
Swap Agreement ” means any agreement with respect
to any swap, forward, future or derivative transaction or
option or similar agreement, whether exchange traded,
“over-the-counter” or otherwise, involving, or
settled by reference to, one or more interest rates,
currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these
transactions; provided that no phantom stock or similar plan
providing for payments only on account of services provided by
current or former directors, officers, employees or
consultants of any Loan Party shall be a Swap
Agreement.
“
Swap Termination Value ” means, in respect of any
one or more Swap Agreements, after taking into account the
effect of any legally enforceable netting agreement relating
to such Swap Agreements, (a) for any date on or after the date
such Swap Agreements have been closed out and termination
value(s) determined in accordance therewith, such termination
value(s) and (b) for any date prior to the date referenced in
clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Agreements, as determined by the
counterparties to such Swap Agreements.
“
Synthetic Leases ” means, in respect of any
Person, all leases which shall have been, or should have been,
in accordance with GAAP, treated as operating leases on the
financial statements of the Person liable (whether
contingently or otherwise) for the payment of rent thereunder
and which were properly treated as indebtedness for borrowed
money for purposes of U.S. federal income taxes, if the lessee
in respect thereof is obligated to either purchase for an
amount in excess of, or pay upon early
termination
18
an
amount in excess of, 80% of the residual value of the Property
subject to such operating lease upon expiration or early
termination of such lease.
“
Termination Date ” means the earlier of the
Maturity Date and the date of termination of the
Commitments.
“
Title Indemnity Agreement ” means that certain
Title Indemnity Agreement dated as of August 6, 2007 among the
Borrower and the Seller.
“
Total Debt ” means, at any date, all Debt for
borrowed money of the Parent and the Consolidated Subsidiaries
on a consolidated basis.
“
Transactions ” means, with respect to (a) the
Borrower, the execution, delivery and performance by the
Borrower of this Agreement and each other Loan Document and
Acquisition Document to which it is a party, the Acquisition,
the borrowing of Loans, the use of the proceeds thereof and
the issuance of Letters of Credit hereunder, and the grant of
Liens by the Borrower on Mortgaged Properties and other
Properties pursuant to the Security Instruments and (b) each
Guarantor, the execution, delivery and performance by such
Guarantor of each Loan Document and Acquisition Document to
which it is a party, the Acquisition, the guaranteeing of the
Indebtedness and the other obligations under the Guaranty
Agreement by such Guarantor and such Guarantor’s grant
of the security interests and provision of collateral under
the Security Instruments, and the grant of Liens by such
Guarantor on Mortgaged Properties and other Properties
pursuant to the Security Instruments.
“
Transferee ” means any Assignee or
Participant.
“
Transition Services Agreement ” means that
certain Transition Services Agreement dated as of August 6,
2007 among the Borrower and the Seller.
“
Type ”, when used in reference to any Loan or
Borrowing, refers to whether the rate of interest on such
Loan, or on the Loans comprising such Borrowing, is determined
by reference to the Alternate Base Rate or the Adjusted LIBO
Rate.
“
Unrestricted Subsidiary ” means Freeport-McMoRan
Energy, LLC, a Delaware limited liability company, any other
Subsidiary of the Parent designated as such on Schedule 7.14
and each other Subsidiary of any of the
foregoing.
“
Wholly-Owned Subsidiary ” means any Restricted
Subsidiary of which all of the outstanding Equity Interests
(other than any directors’ qualifying shares mandated by
applicable law), on a fully-diluted basis, are owned by the
Parent and/or one or more of the Wholly-Owned
Subsidiaries.
Section
1.03
Types of Loans and Borrowings . For
purposes of this Agreement, Loans and Borrowings, respectively, may
be classified and referred to by Type (e.g., a “
Eurodollar Loan ” or a “ Eurodollar
Borrowing ”).
Section
1.04
Terms Generally ; Rules of Construction
. The
definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words
“include”, “includes” and
“including” shall be deemed to be followed by the
phrase “without limitation”. The word
“will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to
any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise
modified (subject to any restrictions on such amendments,
supplements or modifications set forth in the Loan Documents), (b)
any reference herein to any law shall
19
be
construed as referring to such law as amended, modified,
codified or reenacted, in whole or in part, and in effect from
time to time, (c) any reference herein to any Person shall be
construed to include such Person’s successors and
assigns (subject to the restrictions contained in the Loan
Documents), (d) the words “herein”,
“hereof” and “hereunder”, and words of
similar import, shall be construed to refer to this Agreement
in its entirety and not to any particular provision hereof,
(e) with respect to the determination of any time period, the
word “from” means “from and including”
and the word “to” means “to and
including” and (f) any reference herein to Articles,
Sections, Annexes, Exhibits and Schedules shall be construed
to refer to Articles and Sections of, and Annexes, Exhibits
and Schedules to, this Agreement. No provision of
this Agreement or any other Loan Document shall be interpreted
or construed against any Person solely because such Person or
its legal representative drafted such provision.
Section
1.05
Accounting Terms and Determinations; GAAP . Unless
otherwise specified herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect
from time to time; provided that, if the Borrower or the
Parent notifies the Administrative Agent that the Borrower or the
Parent requests an amendment to any provision hereof to eliminate
the effect of any change occurring after the date hereof in GAAP or
in the application thereof on the operation of such provision (or
if the Administrative Agent notifies the Borrower or the Parent
that the Required Lenders request an amendment to any provision
hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been
withdrawn or such provision amended in accordance
herewith.
ARTICLE II
The Credits
Section
2.01
Commitments . Subject
to the terms and conditions set forth herein, each Lender agrees to
make Loans to the Borrower during the Availability Period in an
aggregate principal amount that will not result in (a) such
Lender’s Revolving Credit Exposure exceeding such
Lender’s Commitment or (b) the total Revolving Credit
Exposures exceeding the total Commitments. Within the
foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, repay and reborrow the
Loans. On the Effective Date (or as soon as practicable
with respect to (iii)):
(i)
the
Borrower shall pay all accrued and unpaid commitment fees, break
funding fees under Section 5.02 and all other fees that are
outstanding under the Existing Credit Agreement for the account of
each “Lender” under the Existing Credit
Agreement;
(ii)
each
“ABR Loan” and “Eurodollar Loan”
outstanding under the Existing Credit Agreement shall be deemed to
be repaid with the proceeds of a new ABR Loan or Eurodollar Loan,
as applicable, under this Agreement;
(iii)
the
Administrative Agent shall use reasonable efforts to cause such
“Lender” under the Existing Credit Agreement to deliver
to the Borrower as soon as practicable after the Effective Date the
Note issued by the Borrower to it under the Existing Credit
Agreement, marked “canceled” or otherwise similarly
defaced;
(iv)
each
Letter of Credit issued and outstanding under the Existing Credit
Agreement (if any) shall be deemed issued under this Agreement
without the payment of additional fees; and
20
(v)
the
Existing Credit Agreement and the commitments thereunder shall be
superceded by this Agreement and such commitments shall
terminate.
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 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.
Section
2.02
Loans and Borrowings .
(a)
Borrowings; Several Obligations . Each Loan shall be
made as part of a Borrowing consisting of Loans made by the Lenders
ratably in accordance with their respective
Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments are several
and no Lender shall be responsible for any other Lender’s
failure to make Loans as required.
(b)
Types of Loans . Subject to Section 3.03 , each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may
request in accordance herewith. Each Lender at its
option may make any Eurodollar Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with
the terms of this Agreement.
(c)
Minimum Amounts; Limitation on Number of Borrowings
. At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than
$1,000,000. At the time that each ABR Borrowing is made,
such Borrowing shall be in an aggregate amount that is an integral
multiple of $250,000 and not less than
$1,000,000. Borrowings of more than one Type may be
outstanding at the same time, provided that there shall not at any
time be more than a total of ten (10) Eurodollar Borrowings
outstanding. Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request, or to
elect to convert or continue, any Borrowing if the Interest Period
requested with respect thereto would end after the Maturity
Date.
(d)
Notes . If a Lender shall make a written request to
the Administrative Agent and the Borrower to have its Loans
evidenced by a promissory note, then the Borrower shall execute and
deliver a single promissory note of the Borrower in substantially
the form of Exhibit A, payable to the order of such Lender in a
principal amount equal to its Maximum Credit Amount as then in
effect, and otherwise duly completed. The date, amount,
Type, interest rate and, if applicable, Interest Period of each
Loan made by each Lender, and all payments made on account of the
principal thereof, may be recorded by such Lender on its books for
its Note, and, prior to any transfer, may be endorsed by such
Lender on a schedule attached to such Note or any continuation
thereof or on any separate record maintained by such Lender;
provided that the failure to make any such notation or to attach a
schedule shall not affect any Lender’s or the
Borrower’s rights or obligations in respect of such Loans or
affect the validity of such transfer by any Lender of its
Note.
Section
2.03
Requests for Borrowings To
request a Borrowing, the Borrower shall notify the Administrative
Agent of such request by telephone (a) in the case of a Eurodollar
Borrowing, not later than 12:00 noon, New York City time, three
Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 12:00 noon, New York
City time, on the date of the proposed Borrowing; provided that no
such notice shall be required for any deemed request of an ABR
Borrowing to finance the reimbursement of an LC Disbursement as
provided in Section 2.08(e). Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand
21
delivery
or telecopy to the Administrative Agent of a written Borrowing
Request in substantially the form of Exhibit B and signed by the
Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with
Section 2.02 :
(i)
the
aggregate amount of the requested Borrowing;
(ii)
the
date of such Borrowing, which shall be a Business Day;
(iii)
whether
such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(iv)
in
the case of a Eurodollar Borrowing, the initial Interest Period to
be applicable thereto, which shall be a period contemplated by the
definition of the term “Interest Period”;
(v)
the
amount of the then effective Borrowing Base and the then effective
Conforming Borrowing Base (if then applicable), the current total
Revolving Credit Exposures (without regard to the requested
Borrowing) and the pro form a total Revolving Credit
Exposures (giving effect to the requested Borrowing);
and
(vi)
the
location and number of the Borrower’s account to which funds
are to be disbursed, which shall comply with the requirements of
Section 2.05 .
After
April 1, 2009 (unless the Conforming Borrowing Base remains in
effect), information regarding the Conforming Borrowing Base
may be omitted from subsequent Borrowing
Requests.
If
no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be an ABR Borrowing. If
no Interest Period is specified with respect to any requested
Eurodollar Borrowing, then the Borrower shall be deemed to
have selected an Interest Period of one month’s
duration. Each Borrowing Request shall constitute a
representation that the amount of the requested Borrowing
shall not cause the total Revolving Credit Exposures to exceed
the total Commitments (i.e., the lesser of the Aggregate
Maximum Credit Amounts and the then effective Borrowing
Base).
Promptly
following receipt of a Borrowing Request in accordance with
this Section 2.03 , the
Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be
made as part of the requested Borrowing.
Section
2.04
Interest Elections .
(a)
Conversion and Continuance . Each Borrowing
initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing
Request. Thereafter, the Borrower may elect to convert
such Borrowing to a different Type or to continue such Borrowing
and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section 2.04 . The Borrower may elect
different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising
such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.
(b)
Interest Election Requests . To make an election
pursuant to this Section 2.04 , the
Borrower shall notify the Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required
under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each
such telephonic
22
Interest
Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent
of a written Interest Election Request in substantially the form of
Exhibit C and signed by the Borrower.
(c)
Information in Interest Election Requests . Each
telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02 :
(i)
the
Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to Section 2.04(c)(iii) and
(iv) shall be specified for each
resulting Borrowing);
(ii)
the
effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii)
whether
the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and
(iv)
if
the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of
the term “Interest Period”.
If
any such Interest Election Request requests a Eurodollar
Borrowing but does not specify an Interest Period, then the
Borrower shall be deemed to have selected an Interest Period
of one month’s duration.
(d)
Notice to Lenders by the Administrative Agent
. Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the
details thereof and of such Lender’s portion of each
resulting Borrowing.
(e)
Effect of Failure to Deliver Timely Interest Election Request and
Events of Default and Borrowing Base Deficiencies on Interest
Election . If the Borrower fails to deliver a timely
Interest Election Request with respect to a Eurodollar Borrowing
prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of
such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default or a Borrowing Base Deficiency has
occurred and is continuing: (i) no outstanding Borrowing
may be converted to or continued as a Eurodollar Borrowing (and any
Interest Election Request that requests the conversion of any
Borrowing to, or continuation of any Borrowing as, a Eurodollar
Borrowing shall be ineffective) and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the
end of the Interest Period applicable thereto.
Section
2.05
Funding of Borrowings .
(a)
Funding by Lenders . Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by
wire transfer of immediately available funds by 1:00 p.m., New York
City time, to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the
Lenders. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so
received, in like funds, to an account of the Borrower maintained
with the Administrative Agent in New York, New York and designated
by the Borrower in the applicable Borrowing Request; provided that
ABR Loans made to finance the reimbursement of an LC Disbursement
as provided in Section 2.08(e) shall be remitted by the
Administrative Agent to the Issuing Bank. Nothing herein
shall be deemed to obligate any Lender to obtain the funds for its
Loan in any particular place or
23
manner
or to constitute a representation by any Lender that it has
obtained or will obtain the funds for its Loan in any particular
place or manner.
(b)
Presumption of Funding by the Lenders . Unless the
Administrative Agent shall have received notice from a Lender prior
to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s
share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in
accordance with Section 2.05(a) and
may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a
Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender
and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is
made available to the Borrower to but excluding the date of payment
to the Administrative Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry
rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If
such Lender pays such amount to the Administrative Agent, then such
amount shall constitute such Lender’s Loan included in such
Borrowing.
Section
2.06
Termination and Reduction of Aggregate Maximum Credit
Amounts .
(a)
Scheduled Termination of Commitments . Unless
previously terminated, the Commitments shall terminate on the
Maturity Date. If at any time the Aggregate Maximum
Credit Amounts or the Borrowing Base is terminated or reduced to
zero, then the Commitments shall terminate on the effective date of
such termination or reduction.
(b)
Optional Termination and Reduction of Aggregate Maximum Credit
Amounts .
(i)
The
Borrower may at any time terminate, or from time to time reduce,
the Aggregate Maximum Credit Amounts; provided that (A) each reduction of
the Aggregate Maximum Credit Amounts shall be in an amount that is
an integral multiple of $1,000,000 and not less than $10,000,000
and (B) the
Borrower shall not terminate or reduce the Aggregate Maximum Credit
Amounts if, after giving effect to any concurrent prepayment of the
Loans in accordance with Section 3.04(c)
, the total Revolving Credit Exposures would exceed the total
Commitments.
(ii)
The
Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Aggregate Maximum Credit Amounts under
Section 2.06(b)(i) at least three
Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant
to this Section 2.06(b)(ii) shall be
irrevocable. Any termination or reduction of the
Aggregate Maximum Credit Amounts shall be permanent and may not be
reinstated. Each reduction of the Aggregate
Maximum Credit Amounts pursuant to this Section 2.06(b)(ii) shall
be made ratably among the Lenders in accordance with each
Lender’s Applicable Percentage.
(c)
Scheduled and Mandatory Reductions of Aggregate Maximum Commitment
Amounts .
(i)
The
Aggregate Maximum Credit Amounts shall reduce by $300,000,000 in
five (5) consecutive and equal quarterly installments of
$60,000,000, the initial reduction of which shall occur on December
31, 2007 and the last such reduction shall occur on December 31,
2008. Each
24
reduction
of the Aggregate Maximum Credit Amounts pursuant to this Section
2.06(c)(i) shall be made ratably among the Lenders in accordance
with each Lender’s Applicable Percentage.
(ii)
The
Aggregate Maximum Credit Amounts shall automatically reduce by an
amount equal to the prepayment amounts accepted by the Lenders from
time to time pursuant to Section 3.04(c)(iv). Each
reduction of the Aggregate Maximum Credit Amounts pursuant to this
Section 2.06(c)(ii) shall be made ratably among the Lenders in
accordance with each Lender’s Applicable
Percentage.
Section
2.07
Borrowing Base .
(a)
Initial Borrowing Base and Initial Conforming Borrowing Base
. For the period from and including the Effective Date
to but excluding the first Redetermination Date, the amount of the
Borrowing Base shall be $700,000,000 and the amount of the
Conforming Borrowing Base shall be
$500,000,000. Notwithstanding the foregoing, the
Borrowing Base may be subject to further adjustments from time to
time pursuant to Section 2.08(k) [preferential purchase rights],
Section 8.13(c) [title defects], Section
8.13(d) [MMS approvals] or Section 9.11(d) [asset
sales]. As of April 1, 2009, the Conforming Borrowing
Base shall equal the Borrowing Base and all references to
“Conforming Borrowing Base” in this Agreement shall
mean the Borrowing Base. The Borrowing Base shall, under
no circumstances, exceed the Aggregate Maximum Credit
Amounts.
(b)
Scheduled and Interim Redeterminations . The
Borrowing Base and the Conforming Borrowing Base shall be
redetermined semi-annually in accordance with this Section 2.07 (a “ Scheduled
Redetermination ”), and, subject to Section 2.07(d) , such redetermined Borrowing
Base and Conforming Borrowing Base shall become effective and
applicable to the Borrower, the Agents, the Issuing Bank and the
Lenders on April 1st and October 1st of each year; provided that
the initial Scheduled Redetermination shall be November 1,
2007. In addition, the Borrower may, by notifying the
Administrative Agent thereof, and the Administrative Agent may, at
the direction of the Required Lenders, by notifying the Borrower
thereof, one time during any 12 month period, each elect to cause
the Borrowing Base and the Conforming Borrowing Base to be
redetermined between Scheduled Redeterminations (an “
Interim Redetermination ”) in accordance with this
Section 2.07 ; provided that the
Required Lenders shall not have the right to make such a request
for an Interim Redetermination during calendar year 2007 for the
thirty (30) days following the Effective Date.
(c)
Scheduled and Interim Redetermination Procedure .
(i)
Each
Scheduled Redetermination and each Interim Redetermination shall be
effectuated as follows: Upon receipt by the
Administrative Agent of (A) the Reserve Report
and the certificate required to be delivered by the Borrower to the
Administrative Agent, in the case of a Scheduled Redetermination,
pursuant to Section 8.12(a) and (c) , and, in the case of an Interim
Redetermination, pursuant to Section
8.12(b) and (c) , and (B) such other reports,
data and supplemental information, including, without limitation,
the information provided pursuant to Section
8.12(c) , as may, from time to time, be reasonably requested by
the Majority Lenders (the Reserve Report, such certificate and such
other reports, data and supplemental information being the “
Engineering Reports ”), the Administrative Agent shall
evaluate the information contained in the Engineering Reports and
shall, in its sole discretion, propose a new Borrowing Base and
which shall prior to October 1, 2008 further specify a new
Conforming Borrowing Base (collectively, the “ Proposed
Borrowing Base ”) based upon such information and such
other information (including, without limitation, the status of
title information with respect to the Oil and Gas Properties as
described in the Engineering Reports and the existence of any other
Debt)
25
as
the Administrative Agent deems appropriate in its sole discretion
and consistent with its customary oil and gas lending criteria as
it exists at the particular time.
(ii)
The
Administrative Agent shall notify the Borrower and the Lenders of
the Proposed Borrowing Base (the “ Proposed Borrowing Base
Notice ”):
(A)
in
the case of a Scheduled Redetermination (1) if the
Administrative Agent shall have received the Engineering Reports
required to be delivered by the Borrower pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on or
before March 15th and September 15th of such year following the
date of delivery or (2) if the
Administrative Agent shall not have received the Engineering
Reports required to be delivered by the Borrower pursuant to
Section 8.12(a) and (c) in a timely and complete manner, then
promptly after the Administrative Agent has received complete
Engineering Reports from the Borrower and has had a reasonable
opportunity to determine the Proposed Borrowing Base in accordance
with Section 2.07(c)(i) ;
and
(B)
in
the case of an Interim Redetermination, promptly, and in any event,
within fifteen (15) days after the Administrative Agent has
received the required Engineering Reports.
(iii)
Any
Proposed Borrowing Base that would increase the Borrowing Base (or
the Conforming Borrowing Base) then in effect must be approved or
deemed to have been approved by all of the Lenders as provided in
this Section 2.07(c)(iii) ; and any
Proposed Borrowing Base that would decrease or maintain the
Borrowing Base (or the Conforming Borrowing Base) then in effect
must be approved or be deemed to have been approved by the Required
Lenders as provided in this Section
2.07(c)(iii) . Such decisions will be made by each
Lender based upon such criteria as such Lender deems appropriate in
its sole discretion and consistent with its customary oil and gas
lending criteria as it exists at the particular
time. Upon receipt of the Proposed Borrowing Base
Notice, each Lender shall have fifteen (15) days to agree with the
Proposed Borrowing Base or disagree with the Proposed Borrowing
Base by proposing an alternate Borrowing Base (which proposal must
also propose a Conforming Borrowing Base, if
appropriate). If at the end of such fifteen (15) days,
any Lender has not communicated its approval or disapproval in
writing to the Administrative Agent, such silence shall be deemed
to be an approval of the Proposed Borrowing Base. If, at
the end of such 15-day period, all of the Lenders, in the case of a
Proposed Borrowing Base that would increase the Borrowing Base (or
the Conforming Borrowing Base) then in effect, or the Required
Lenders, in the case of a Proposed Borrowing Base that would
decrease or maintain the Borrowing Base (or the Conforming
Borrowing Base) then in effect, have approved or deemed to have
approved, as aforesaid, then the Proposed Borrowing Base shall
become the new Borrowing Base (and the new Conforming Borrowing
Base), effective on the date specified in Section 2.07(d) . If, however, at the
end of such 15-day period, all of the Lenders or the Required
Lenders, as applicable, have not approved or deemed to have
approved, as aforesaid, then the Administrative Agent shall poll
the Lenders to ascertain the highest Borrowing Base (or the highest
Conforming Borrowing Base) then acceptable to a number of Lenders
sufficient to constitute the Required Lenders and, so long as such
amount does not increase the Borrowing Base (or the Conforming
Borrowing Base) then in effect, such amount shall become the new
Borrowing Base (and the new Conforming Borrowing Base), effective
on the date specified in Section 2.07(d)
. While the Conforming Borrowing Base is in effect, the
foregoing procedures shall apply to each proposed Borrowing Base
and each proposed Conforming Borrowing Base
separately.
(d)
Effectiveness of a Redetermined Borrowing Base
. After a redetermined Borrowing Base (and Conforming
Borrowing Base) is approved or is deemed to have been approved by
all
26
of
the Lenders or the Required Lenders, as applicable, pursuant to
Section 2.07(c)(iii) , the
Administrative Agent shall notify the Borrower and the Lenders (the
“ New Borrowing Base Notice ”) of the amount of
the redetermined Borrowing Base (and Conforming Borrowing Base),
and such amount shall become the new Borrowing Base (and new
Conforming Borrowing Base), effective and applicable to the
Borrower, the Agents, the Issuing Bank and the
Lenders:
(i)
in
the case of a Scheduled Redetermination, (A) if the Administrative
Agent shall have received the Engineering Reports required to be
delivered by the Borrower pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on
the April 1st or October 1st, as applicable, following such notice,
or (B) if the Administrative Agent shall not have received the
Engineering Reports required to be delivered by the Borrower
pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on
the Business Day next succeeding delivery of such notice;
and
(ii)
in
the case of an Interim Redetermination, on the Business Day next
succeeding delivery of such notice.
Such
amount shall then become the Borrowing Base (and the
Conforming Borrowing Base) until the next Scheduled
Redetermination Date, the next Interim Redetermination Date or
the next adjustment to the Borrowing Base (and the Conforming
Borrowing Base) under Section
8.13(c) , Section 8.13(d) or Section 9.11(d), whichever
occurs first. Notwithstanding the foregoing, no
Scheduled Redetermination or Interim Redetermination shall
become effective until the New Borrowing Base Notice related
thereto is received by the Borrower.
Section
2.08
Letters of Credit .
(a)
General . Subject to the terms and conditions set
forth herein, the Borrower may request the issuance of dollar
denominated Letters of Credit for its own account or for the
account of the Parent or any of its Restricted Subsidiaries, in a
form reasonably acceptable to the Administrative Agent and the
Issuing Bank, at any time and from time to time during the period
from the Effective Date until the day which is five (5) Business
Days prior to the end of the Availability Period; provided that the
Borrower may not request the issuance, amendment, renewal or
extension of Letters of Credit hereunder if a Borrowing Base
Deficiency exists at such time or would exist as a result
thereof. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with,
the Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control.
(b)
Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions . To request the issuance of a Letter of
Credit (or the amendment, renewal or extension of an outstanding
Letter of Credit), the Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so
have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (not less than five (5) Business Days in
advance of the requested date of issuance, amendment, renewal or
extension) a notice:
(i)
requesting
the issuance of a Letter of Credit or identifying the Letter of
Credit to be amended, renewed or extended;
(ii)
specifying
the date of issuance, amendment, renewal or extension (which shall
be a Business Day);
27
(iii)
specifying
the date on which such Letter of Credit is to expire (which shall
comply with Section 2.08(c)
);
(iv)
specifying
the amount of such Letter of Credit;
(v)
specifying
the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit; and
(vi)
specifying
the amount of the then effective Borrowing Base and whether a
Borrowing Base Deficiency exists at such time, the current total
Revolving Credit Exposures (without regard to the requested Letter
of Credit or the requested amendment, renewal or extension of an
outstanding Letter of Credit) and the pro forma total
Revolving Credit Exposures (giving effect to the requested Letter
of Credit or the requested amendment, renewal or extension of an
outstanding Letter of Credit).
Each
notice shall constitute a representation that after giving
effect to the requested issuance, amendment, renewal or
extension, as applicable, (i) the LC Exposure shall not exceed
the LC Commitment, provided clause (i) shall not be applicable
to the PPR Letter of Credit and (ii) the total Revolving
Credit Exposures shall not exceed the total Commitments (i.e.
the lesser of the Aggregate Maximum Credit Amounts and the
then effective Borrowing Base).
If
requested by the Issuing Bank, the Borrower also shall submit
a letter of credit application on the Issuing Bank’s
standard form in connection with any request for a Letter of
Credit and shall guarantee the reimbursement of any Letter of
Credit issued for the account of the Parent or a Restricted
Subsidiary.
(c)
Expiration Date . Each Letter of Credit shall expire
at or prior to the close of business on the earlier of (i) the date one year
after the date of the issuance of such Letter of Credit (or, in the
case of any renewal or extension thereof, one year after such
renewal or extension) and (ii) the date that is
five Business Days prior to the Maturity Date.
(d)
Participations . By the issuance of a Letter of
Credit (or an amendment to a Letter of Credit increasing the amount
thereof) and without any further action on the part of the Issuing
Bank or the Lenders, the Issuing Bank hereby grants to each Lender,
and each Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender’s
Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the
account of the Issuing Bank, such Lender’s Applicable
Percentage of each LC Disbursement made by the Issuing Bank or of
any reimbursement payment required to be refunded to the Borrower
for any reason. Each Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this Section 2.08(d) in respect of Letters of Credit
is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance
of a Default, the existence of a Borrowing Base Deficiency or
reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or
reduction whatsoever.
(e)
Reimbursement . If the Issuing Bank shall make any
LC Disbursement in respect of a Letter of Credit, the Borrower
shall reimburse such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not
later than 2:00 p.m., New York City time, on the date that is one
(1) Business Day after such LC Disbursement is made, if the
Borrower shall have received notice of such LC Disbursement prior
to 12:00 noon, New York City time, on the payment date, or, if such
notice has not been received by the Borrower prior to such time on
the payment date, then not later than
28
2:00
p.m., New York City time, on the second Business Day after the
Borrower receives such notice; provided that if such LC
Disbursement is not less than $1,000,000, the Borrower shall,
subject to the conditions to Borrowing set forth herein, be deemed
to have requested, and the Borrower does hereby request under such
circumstances, that such payment be financed with an ABR Borrowing
in an equivalent amount and, to the extent so financed, the
Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting ABR
Borrowing. If the Borrower fails to make such payment
when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the Borrower
in respect thereof and such Lender’s Applicable Percentage
thereof. Promptly following receipt of such notice, each
Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Borrower, in the same
manner as provided in Section 2.05 with
respect to Loans made by such Lender (and Section 2.05 shall apply, mutatis
mutandis , to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank the
amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from
the Borrower pursuant to this Section
2.08(e) , the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Lenders have
made payments pursuant to this Section
2.08(e) to reimburse the Issuing Bank, then to such Lenders and
the Issuing Bank as their interests may appear. Any
payment made by a Lender pursuant to this Section 2.08(e) to reimburse the Issuing Bank
for any LC Disbursement shall not constitute a Loan and shall not
relieve the Borrower of its obligation to reimburse such LC
Disbursement.
(f)
Obligations Absolute . The Borrower’s
obligation to reimburse LC Disbursements as provided in Section 2.08(e) shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with
the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity
or enforceability of any Letter of Credit, any Letter of Credit
Agreement or this Agreement, or any term or provision therein,
(ii) any
draft or other document presented under a Letter of Credit proving
to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect, (iii) payment by the
Issuing Bank under a Letter of Credit against presentation of a
draft or other document that does not comply with the terms of such
Letter of Credit or any Letter of Credit Agreement, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section 2.08(f) , constitute a legal or
equitable discharge of, or provide a right of setoff against, the
Borrower’s obligations hereunder. Neither the
Administrative Agent, the Lenders nor the Issuing Bank, nor any of
their Related Parties shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any
Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in
the preceding sentence), or any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit (including
any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank; provided that the
foregoing shall not be construed to excuse the Issuing Bank 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
Bank’s failure to exercise care when determining whether
drafts and other documents presented under a Letter of Credit
comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or willful
misconduct on the part of the Issuing Bank (as finally determined
by a court of competent jurisdiction), the Issuing Bank shall be
deemed to have exercised all requisite care in each such
determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to
be in substantial compliance with the terms of a Letter of Credit,
the Issuing Bank may, in its sole discretion, either accept and
make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the
contrary, or refuse to
29
accept
and make payment upon such documents if such documents are not in
strict compliance with the terms of such Letter of
Credit.
(g)
Disbursement Procedures . The Issuing Bank shall,
promptly following its receipt thereof, examine all documents
purporting to represent a demand for payment under a Letter of
Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank
has made or will make an LC Disbursement thereunder; provided that
any failure to give or delay in giving such notice shall not
relieve the Borrower of its obligation to reimburse the Issuing
Bank and the Lenders with respect to any such LC
Disbursement.
(h)
Interim Interest . If the Issuing Bank shall make
any LC Disbursement, then, until the Borrower shall have reimbursed
the Issuing Bank for such LC Disbursement, the unpaid amount
thereof shall bear interest, for each day from and including the
date such LC Disbursement is made to but excluding the date that
the Borrower reimburses such LC Disbursement, at the rate per annum
then applicable to ABR Loans. Interest accrued pursuant
to this Section 2.08(h) shall be for the
account of the Issuing Bank, except that interest accrued on and
after the date of payment by any Lender pursuant to Section 2.08(e) to reimburse the Issuing Bank
shall be for the account of such Lender to the extent of such
payment.
(i)
Replacement of the Issuing Bank . The Issuing Bank
may be replaced at any time by written agreement among the
Borrower, the Administrative Agent, the replaced Issuing Bank and
the successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of the Issuing
Bank. At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the
account of the replaced Issuing Bank pursuant to Section 3.05(b) . From and after the
effective date of any such replacement, (i) the successor
Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit
to be issued thereafter and (ii) references herein
to the term “Issuing Bank” shall be deemed to refer to
such successor or to any previous Issuing Bank, or to such
successor and all previous Issuing Banks, as the context shall
require. After the replacement of the Issuing Bank
hereunder, the replaced Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit
issued by it prior to such replacement, but shall not be required
to issue additional Letters of Credit.
(j)
Cash Collateralization . If (i) any Event of Default
shall occur and be continuing and the Borrower receives notice from
the Administrative Agent or the Majority Lenders demanding the
deposit of cash collateral pursuant to this Section 2.08(j) , or (ii) the Borrower is
required to pay to the Administrative Agent the excess attributable
to an LC Exposure in connection with any prepayment pursuant to
Section 3.04(c) , then the Borrower
shall deposit, in an account with the Administrative Agent, in the
name of the Administrative Agent and for the benefit of the
Lenders, an amount in cash equal to, in the case of an Event of
Default, the LC Exposure, and in the case of a payment required by
Section 3.04(c) , the amount of such
excess as provided in Section 3.04(c) ,
as of such date plus any accrued and unpaid interest thereon;
provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any
kind, upon the occurrence of any Event of Default with respect to
the Borrower or any Restricted Subsidiary described in Section 10.01(h) or Section 10.01(i) . The Borrower
hereby grants to the Administrative Agent, for the benefit of the
Issuing Bank and the Lenders, an exclusive first priority and
continuing perfected security interest in and Lien on such account
and all cash, checks, drafts, certificates and instruments, if any,
from time to time deposited or held in such account, all deposits
or wire transfers made thereto, any and all investments purchased
with funds deposited in such account, all interest, dividends,
cash, instruments, financial assets and other Property from time to
time received, receivable or
30
otherwise
payable in respect of, or in exchange for, any or all of the
foregoing, and all proceeds, products, accessions, rents, profits,
income and benefits therefrom, and any substitutions and
replacements therefor. The Borrower’s obligation
to deposit amounts pursuant to this Section
2.08(j) shall be absolute and unconditional, without regard to
whether any beneficiary of any such Letter of Credit has attempted
to draw down all or a portion of such amount under the terms of a
Letter of Credit, and, to the fullest extent permitted by
applicable law, shall not be subject to any defense or be affected
by a right of set-off, counterclaim or recoupment which the
Borrower or any of its Restricted Subsidiaries may now or hereafter
have against any such beneficiary, the Issuing Bank, the
Administrative Agent, the Lenders or any other Person for any
reason whatsoever. Such deposit shall be held as
collateral securing the payment and performance of the
Borrower’s and the Guarantor’s obligations under this
Agreement and the other Loan Documents. The
Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such
account. Other than any interest earned on the
investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the
Borrower’s risk and expense, such deposits shall not bear
interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in
such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has
not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the
Borrower for the LC Exposure at such time or, if the maturity of
the Loans has been accelerated, be applied to satisfy other
obligations of the Borrower and the Guarantors under this Agreement
or the other Loan Documents. If the Borrower is required
to provide an amount of cash collateral hereunder as a result of
the occurrence of an Event of Default, and the Borrower is not
otherwise required to pay to the Administrative Agent the excess
attributable to an LC Exposure in connection with any prepayment
pursuant to Section 3.04(c) , then such
amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within three Business Days after all Events of
Default have been cured or waived.
(k)
Preferential Purchase Right Letter of Credit
. Without limitation of the foregoing, on the Effective
Date, the Issuing Bank will issue a Letter of Credit (the “
PPR Letter of Credit ”) for the benefit of the Seller,
in an amount not to exceed $110,000,000 (provided that the amount
of the PPR Letter of Credit shall not be deducted from the LC
Commitment) to fund the purchase of the Preferential Purchase Right
Properties subject of preferential purchase rights which rights
have not expired, have not been waived or have not been exercised
by the holders thereof on or before the Effective
Date. The PPR Letter of Credit shall expire on the 45
th day after
the Effective Date, and to the extent such preferential purchase
rights in respect of a Preferential Purchase Right Property are
waived or expire without being exercised after the Effective Date,
the PPR Letter of Credit will be drawn in an amount equal to the
allocated purchase price for such Preferential Purchase Right
Property and such Preferential Purchase Right Properties subject
thereof will be conveyed to the Borrower. In connection
with such conveyance, the Borrower shall grant to the
Administrative Agent a first priority perfected Lien in such
conveyed Preferential Purchase Right
Properties. Otherwise, if such preferential purchase
rights in respect of a Preferential Purchase Right Property are
exercised, the PPR Letter of Credit will reduce by an amount equal
to the purchase price allocated to Preferential Purchase Right
Property in the Acquisition Documents. In addition, the
Borrowing Base and Conforming Borrowing Base will be permanently
reduced by an amount equal to the value, if any, attributed to such
Property in the Borrowing Base based on Initial Reserve
Report.
ARTICLE III
Payments of Principal and Interest; Prepayments;
Fees
Section
3.01
Repayment of Loans . 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 on the Termination Date.
31
Section
3.02
Interest .
(a)
ABR Loans . The Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate plus the Applicable
Margin.
(b)
Eurodollar Loans . The Loans comprising each
Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate
for the Interest Period in effect for such Borrowing plus the
Applicable Margin.
(c)
Post-Default Rate Rate . Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing,
or if any principal of or interest on any Loan or any fee or other
amount payable by the Borrower or any Guarantor hereunder or under
any other Loan Document is not paid when due, whether at stated
maturity, upon acceleration or otherwise, and including any
payments in respect of a Borrowing Base Deficiency under Section 3.04(c) , then all Loans outstanding, in
the case of an Event of Default, and such overdue amount, in the
case of a failure to pay amounts when due, shall on or after the
date the Required Lenders so request bear interest, after as well
as before judgment, at a rate per annum equal to two percent (2%)
plus the rate applicable to ABR Loans as provided in Section 3.02(a) .
(d)
Interest Payment Dates . Accrued interest on each
Loan shall be payable in arrears on each Interest Payment Date for
such Loan and on the Termination Date; provided that (i) interest
accrued pursuant to Section 3.02(c)
shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than an optional prepayment of an ABR
Loan prior to the Termination Date), accrued interest on the
principal amount repaid or prepaid shall be payable on the date of
such repayment or prepayment, and (iii) in the event of any
conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
(e)
Interest Rate Computations . All interest hereunder
shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the Alternate Base Rate at times
when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of
days elapsed (including the first day but excluding the last
day). The applicable Alternate Base Rate, Adjusted LIBO
Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error,
and be binding upon the parties hereto.
Section
3.03
Alternate Rate of Interest . If
prior to the commencement of any Interest Period for a Eurodollar
Borrowing:
(a)
the
Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate or the
LIBO Rate for such Interest Period; or
(b)
the
Administrative Agent is advised by the Majority Lenders that the
Adjusted LIBO Rate or LIBO Rate, as applicable, for such Interest
Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Loans included in such
Borrowing for such Interest Period;
then
the Administrative Agent shall give notice thereof to the
Borrower and the Lenders by telephone or telecopy as promptly
as practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances
giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing
to, or continuation of any Borrowing as, a
32
Eurodollar
Borrowing shall be ineffective, and (ii) if any Borrowing
Request requests a Eurodollar Borrowing, such Borrowing shall
be made as an ABR Borrowing.
Section
3.04
Prepayments .
(a)
Optional Prepayments . The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in
whole or in part, subject to prior notice in accordance with
Section 3.04(b) .
(b)
Notice and Terms of Optional Prepayment . The
Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Borrowing, not later than 12:00 noon,
New York City time, three Business Days before the date of
prepayment, or (ii) in the case of prepayment of an ABR Borrowing,
not later than 12:00 noon, New York City time, one Business Day
before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be
prepaid. Promptly following receipt of any such notice
relating to a Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment
of any Borrowing shall be in an amount that would be permitted in
the case of an advance of a Borrowing of the same Type as provided
in Section 2.02 . Each
prepayment of a Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 3.02 and any amounts due under Section
5.02.
(c)
Mandatory Prepayments .
(i)
If,
after giving effect to any termination or reduction of the
Aggregate Maximum Credit Amounts pursuant to Section 2.06(b) or Section 2.06(c), the total
Revolving Credit Exposures exceeds the total Commitments, then the
Borrower shall (A) prepay the
Borrowings on the date of such termination or reduction in an
aggregate principal amount equal to such excess, and (B) if any excess
remains after prepaying all of the Borrowings as a result of an LC
Exposure, pay to the Administrative Agent on behalf of the Lenders
an amount equal to such excess to be held as cash collateral as
provided in Section 2.08(j)
.
(ii)
Upon
any redetermination of or adjustment to the amount of the Borrowing
Base in accordance with Section 2.07 ,
Section 8.13(c) or Section 8.13(d), if
the total Revolving Credit Exposures exceeds the redetermined or
adjusted Borrowing Base, then the Borrower shall (A) prepay the
Borrowings in an aggregate principal amount equal to such excess,
and (B) if
any excess remains after prepaying all of the Borrowings as a
result of an LC Exposure, pay to the Administrative Agent on behalf
of the Lenders an amount equal to such excess to be held as cash
collateral as provided in Section
2.08(j) . The Borrower shall be obligated to make
such prepayment and/or deposit of cash collateral within forty-five
(45) days following its receipt of the New Borrowing Base Notice in
accordance with Section 2.07(d) or the
date the adjustment occurs; provided that all payments required to
be made pursuant to this Section
3.04(c)(ii) must be made on or prior to the Termination
Date.
(iii)
Upon
any adjustments to the Borrowing Base pursuant to Section 9.11(d),
if the total Revolving Credit Exposures exceeds the Borrowing Base
as adjusted, then the Borrower shall (A) prepay the
Borrowings in an aggregate principal amount equal to such excess,
and (B) if
any excess remains after prepaying all of the Borrowings as a
result of an LC Exposure, pay to the Administrative Agent on behalf
of the Lenders an amount equal to such excess to be held as cash
collateral as provided in Section
2.08(j) . The Borrower shall be obligated to make
such prepayment and/or deposit of cash collateral within two (2)
Business Days following the date it or any Restricted
33
Subsidiary
receives cash proceeds as a result of such disposition; provided
that all payments required to be made pursuant to this Section 3.04(c)(iii) must be made on
or prior to the Termination Date.
(iv)
If
at any time, the Borrower or the Parent shall be required to prepay
or redeem (or make any offer to prepay or redeem) all or any
portion of the Bridge Loans or any Exchange Notes (other than (i) a
prepayment or redemption with the proceeds of an Equity Issuance
(other than an Equity Issuance of Disqualified Capital Stock), (ii)
with the proceeds of Permitted Refinancing Debt or (iii) a change
of control offer as defined in the Bridge Credit Agreement or the
Exchange Notes), then not later than the fifth (5 th ) Business
Day prior to the day on which such prepayment or redemption (or
earlier offer to prepay or redeem) of any Bridge Loans or Exchange
Notes shall be made, the Borrower shall make an offer to the
Lenders by notice to the Administrative Agent to prepay outstanding
Loans under this Agreement and cash collateralize Letters of Credit
in an amount equal to such amount required to be prepaid or
redeemed (or offered to prepay or redeem) under the Bridge Credit
Agreement or any agreement evidencing the Exchange Notes, provided
that if such prepayment or redemption is the result of an asset
sale, then (A) if the aggregate Revolving Credit Exposures of the
Lenders exceeds or is equal to the Conforming Borrowing
Base (or if no Conforming Borrowing Base is then in effect, the
Borrowing Base), the amount offered to the Lenders shall be the
amount required to be prepaid or redeemed (or offered to prepay or
redeem) under the Bridge Credit Agreement or any agreement
evidencing the Exchange Notes and (B) if the aggregate Revolving
Credit Exposures of the Lenders is less than the Conforming
Borrowing Base (or if no Conforming Borrowing Base is then in
effect, the Borrowing Base), the amount offered to the Lenders
shall be the lesser of (x) the amount allocated the Properties
subject of such asset sale in the most recent Conforming Borrowing
Base and (y) the Net Available Cash (as defined in the Bridge
Credit Agreement) from such asset sale received by a Loan
Party. Within three Business Days after the
Administrative Agent receives notice of an offer from the Borrower
under this Section 3.04(c)(iv), each Lender shall decide to accept
or decline such prepayment of Loans. If a Lender shall
fail to respond within three Business Days, its failure shall be
deemed a rejection of the offer. If the Majority Lenders
have agreed to accept such prepayment, then each of the Lenders
shall accept its pro rata share of the entire prepayment
amount. If the prepayment is accepted by the Majority
Lenders then such prepayment amounts shall be paid by the Borrower
to the Lenders within one Business Day following
acceptance. If the Majority Lenders fail to accept such
prepayment, then the entire prepayment amount shall be applied as
required pursuant to the mandatory prepayment provisions of the
Bridge Loans or Exchange Notes. Any amounts not required
to be offered to the Lenders under clause (B) shall be applied as
required pursuant to the mandatory prepayment provisions of the
Bridge Loans or Exchange Notes.
(v)
Each
prepayment of Borrowings pursuant to this Section 3.04(c) shall be applied, first, ratably
to any ABR Borrowings then outstanding, and, second, to any
Eurodollar Borrowings then outstanding as the Borrower may
direct.
(vi)
Prepayments
pursuant to this Section 3.04(c) shall
be accompanied by accrued interest to the extent required by
Section 3.02 .
(d)
No Premium or Penalty . Prepayments permitted or
required under this Section 3.04 shall
be without premium or penalty, except as required under Section 5.02 .
Section
3.05
Fees .
(a)
Commitment Fees . The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment
fee, which shall accrue at the applicable Commitment Fee Rate on
the average daily amount of the unused amount of the Commitment of
such Lender during the period from and including the date of this
Agreement to but excluding the Termination
Date. Accrued
34
commitment
fees shall be payable in arrears on the third Business Day after
the last day of March, June, September and December of each year
and on the Termination Date, commencing on the first such date to
occur after the date hereof. All commitment fees shall
be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but
excluding the last day).
(b)
Letter of Credit Fees . The Borrower agrees to pay
(i) to the Administrative Agent for the account of each Lender a
participation fee with respect to its participations in Letters of
Credit, which shall accrue at the same Applicable Margin used to
determine the interest rate applicable to Eurodollar Loans on the
average daily amount of such Lender’s LC Exposure (excluding
any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the date of this Agreement to
but excluding the later of the date on which such Lender’s
Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, (ii) to the Issuing Bank a fronting fee,
which shall accrue at the rate of 0.125% per annum on the average
daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period
from and including the date of this Agreement to but excluding the
later of the date of termination of the Commitments and the date on
which there ceases to be any LC Exposure, provided that in no event
shall such fee be less than $500 during any quarter, and (iii) to
the Issuing Bank, for its own account, its standard fees with
respect to the issuance, amendment, renewal or extension of any
Letter of Credit or processing of drawings
thereunder. Participation fees and fronting fees accrued
through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur
after the date of this Agreement; provided that all such fees shall
be payable on the Termination Date and any such fees accruing after
the Termination Date shall be payable on demand. Any
other fees payable to the Issuing Bank pursuant to this Section 3.05(b) shall be payable within 10 days
after demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first
day but excluding the last day).
(c)
Administrative Agent Fees . The Borrower agrees to
pay to the Administrative Agent, for its own account, fees payable
in the amounts and at the times separately agreed upon between the
Borrower and the Administrative Agent.
ARTICLE IV
Payments; Pro Rata Treatment; Sharing of
Set-offs
Section
4.01
Payments Generally; Pro Rata Treatment; Sharing of
Set-offs .
(a)
Payments by the Borrower . The Borrower shall make
each payment required to be made by it hereunder (whether of
principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 5.01 ,
Section 5.02 , Section 5.03 or otherwise) prior to noon, New
York, New York time, on the date when due, in immediately available
funds, without defense, deduction, recoupment, set-off or
counterclaim. Fees, once paid, shall be fully earned and
shall not be refundable under any circumstances. Any
amounts received after such time on any date may, in the
dis
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