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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): DECEMBER 18, 1997
PIONEER NATURAL RESOURCES COMPANY
-----------------------------------------------------(Exact name of Registrant as specified in its charter)
DELAWARE
1-13245
- -----------------------------------(State or other jurisdiction of
incorporation or organization)
75-2702753
--------------- -----------------------Commission
(I.R.S. Employer
File Number
Identification Number)
1400 WILLIAMS SQUARE WEST, 5205 N. O'CONNOR BLVD., IRVING, TEXAS
- ---------------------------------------------------------------(Address of principal executive offices)
(Zip code)
Registrant's Telephone Number, including area code:
Not applicable
---------------------------------------------------(Former name, former address and former fiscal year,
if changed since last report)
(972) 444-9001
75039
-----------
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PIONEER NATURAL RESOURCES COMPANY
TABLE OF CONTENTS
Page
----
Item 2.
Acquisition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Item 5.
Other Events
3
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Financial Statements and Exhibits:
Preliminary Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Unaudited Pro Forma Combined Financial Statements of Pioneer Natural Resources Company:
Unaudited Pro Forma Combined Balance Sheet of Pioneer Natural Resources
Company as of September 30, 1997 . . . . . . . . . . . . . . . . . . . . . . .
Unaudited Pro Forma Combined Statement of Operations of Pioneer Natural
Resources Company for the nine months ended September 30, 1997 . . . . . . . .
Unaudited Pro Forma Combined Statement of Operations of Pioneer Natural
Resources Company for the year ended December 31, 1996 . . . . . . . . . . . .
6
7
8
Unaudited Pro Forma Financial Statements of Pioneer Natural Resources Company:
Unaudited Pro Forma Statement of Operations of Pioneer Natural Resources
Company for the nine months ended September 30, 1997 . . . . . . . . . . .
Unaudited Pro Forma Statement of Operations of Pioneer Natural Resources
Company for the year ended December 31, 1996 . . . . . . . . . . . . . . .
Unaudited Pro Forma Adjusted Statement of Operations of Pioneer Natural
Resources Company for the year ended December 31, 1996 . . . . . . . . . .
Unaudited Pro Forma Statement of Operations of Mesa Inc. for the year ended
December 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. .
9
. .
10
. .
11
. .
12
Unaudited Pro Forma Financial Statements of Chauvco Resources, Ltd.:
Unaudited Pro Forma Balance Sheet of Chauvco Resources Ltd. as of
September 30, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unaudited Pro Forma Statement of Operations of Chauvco Resources Ltd.
for the nine months ended September 30, 1997 . . . . . . . . . . . . . . . . .
13
14
Notes to Unaudited Pro Forma Combined Financial Statements . . . . . . . . . . . . .
Exhibits
2
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
26
3
ITEM 2.
ACQUISITION OF ASSETS
On September 3, 1997, Pioneer Natural Resources Company ("Pioneer")
entered into an agreement (the "Combination Agreement") to acquire the Canadian
and Argentine oil and gas businesses of Chauvco Resources Ltd. ("Chauvco"), a
publicly traded independent oil and gas company based in Calgary, Canada (the
"Transaction"), and to spin-off to Chauvco shareholders Chauvco's Gabonese oil
and gas operations and other international interests through Chauvco's existing
subsidiary, Chauvco Resources International Ltd. ("CRI"). The Transaction
was completed on December 18, 1997.
In accordance with the Combination Agreement, each holder of Chauvco
common shares ("Chauvco Shareholder") received for each Chauvco common share
held (i) one share of CRI and (ii) in certain cases, at the election of the
Chauvco Shareholder, either the number of Pioneer common shares or shares
exchangeable into Pioneer shares ("Exchangeable Shares") or a combination of
both determined by multiplying each Chauvco common share held by an exchange
ratio of 0.493827. In total, the acquisition consideration paid to the
shareholders of Chauvco was approximately $946 million, consisting of the
issuance of 14,015,010 shares of Pioneer common stock and 10,901,924
Exchangeable Shares and the assumption of $228 million of long-term debt. Cash
payments were made in lieu of issuing fractional shares.
For a detailed description of the assets acquired and liabilities assumed
from Chauvco, see the Joint Management Information Circular and Proxy Statement
dated November 14, 1997 incorporated herein by reference. In accordance with
the provisions of Accounting Principles Board No. 16, "Business Combinations,"
("APB 16"), the Transaction was treated as an acquisition of Chauvco by
Pioneer. See "Item 7. Financial Statements and Exhibits" for the preliminary
allocation of the total purchase price of Chauvco to the acquired assets and
liabilities based upon the estimated fair values assigned to each of the
significant assets acquired and liabilities assumed. Any future adjustments to
the allocation of the purchase price are not anticipated to be material to
Pioneer's financial statements.
ITEM 5.
OTHER EVENTS
Tender Offer for Senior Subordinated Notes. On November 14, 1997, Pioneer
Natural Resources USA, Inc. ("Pioneer USA"), a wholly-owned subsidiary of
Pioneer, announced an offer to purchase for cash any and all of its $264
million 11 5/8% Senior Subordinated Discount Notes Due 2006 ("11 5/8% Notes")
and its $325 million 10 5/8% Senior Subordinated Notes Due 2006 ("10 5/8%
Notes") (collectively the "Mesa Notes") for a purchase price of $1,171.40 and
$829.90, respectively, per $1,000 tendered plus any interest accrued on the 10
5/8% Notes (the "Tender Offer"). As of December 15, 1997, the offer expiration
date, the respective Mesa Note holders had tendered approximately $319.1
million, or 98%, of the 10 5/8% Notes and approximately $241.5 million, or 91%,
of the 11 5/8% Notes. On December 18, 1997, Pioneer USA paid holders an
aggregate of approximately $574.3 million for the principal amount tendered on
the Mesa Notes, and Pioneer USA paid to the holders of the 10 5/8% Notes
accrued interest through the payment date of the Tender Offer of approximately
$15.7 million. As a result of the Tender Offer, Pioneer will recognize
after-tax extraordinary loss on early extinguishment of debt of $11.9 million
during the fourth quarter of 1997. Pioneer USA financed the purchase price of
the Mesa Notes tendered in the offer with borrowings under its bank credit
facility.
In connection with the Tender Offer, the holders of the requisite
percentage of each outstanding issue of Mesa Notes approved amendments to the
respective indentures governing the Mesa Notes which eliminated or modified
most of the restrictive covenants contained in the indentures. Such amendments
became effective on December 18, 1997, upon completion of the Tender Offer.
American Cometra Acquisition. On December 19, 1997, Pioneer completed the
acquisition of assets in the East Texas Basin from affiliates of American
Cometra, Inc. ("ACI") and Rockland Pipeline Co. ("Rockland"), both
subsidiaries of Electrafina S.A. of Belgium ("American Cometra Acquisition").
The total consideration paid was approximately $126 million, consisting of $80
million in cash and 1.7 million shares of Pioneer's common stock. Pioneer
acquired ACI's producing wells, acreage, seismic data, royalties and mineral
interests, and Rockland's gathering system, pipeline and gas processing plant
in the East Texas Basin. This acquisition establishes a critical mass and core
area in the East Texas Basin for Pioneer and provides it with a major presence
in the Cotton Valley Reef trend.
1997 Asset Divestitures. During December 1997, Pioneer completed the sale
of certain non-strategic properties for cash proceeds of approximately $103
million (the "1997 Asset Divestitures"). These divestitures involve
approximately 800 properties and represent less than 3% of Pioneer's total
reserve base and about 1% of Pioneer's daily production. Proceeds from these
divestitures were primarily used to fund the American Cometra Acquisition
described above.
Credit Facility Agreements. On December 18, 1997, Pioneer amended and
restated its domestic credit facilities ("United States Credit Facility") in
order to substitute Pioneer as the borrower in place of Pioneer USA. The United
States Credit Facility consists of two credit facility agreements. The primary
facility provides for a $1.075 billion revolving line of credit with a maturity
date of August 7, 2002. The additional facility provides for a $300 million
line of credit with a maturity date of August 5, 1998. Advances on the United
States Credit Facility bear interest, at the borrower's option, based on (a)
the prime rate of NationsBank of Texas, N.A., (b) a Eurodollar rate
(substantially equal to LIBOR), adjusted for the reserve requirement as
determined by the Board of Governors of the Federal Reserve System with respect
to transactions in Eurocurrency liabilities ("LIBOR Rate"), or (c) a
competitive bid rate as quoted by the lenders electing to participate following
the borrower's request. Advances that bear a LIBOR Rate have periodic
maturities, at the borrower's option, of one, two, three, six, nine or twelve
months. Advances that bear competitive bid rates have periodic maturities, at
the borrower's option, of not less than 15 days nor more than 360 days. The
interest rates on LIBOR Rate advances vary with interest rate margins ranging
from 18 basis points to 45 basis points. The interest rate margin is determined
by a grid based upon the long-term public debt rating of Pioneer's senior
unsecured indebtedness. Pioneer's obligations are guaranteed by Pioneer USA and
certain other U.S. subsidiaries, and are secured by a pledge of 65% of the
capital stock of certain non-U.S. subsidiaries. The United States Credit
Facility has been used to refinance the debt of Parker & Parsley Petroleum
Company and MESA Inc. in their merger on August 7, 1997, to fund the offer to
purchase the Mesa Notes, to fund the acquisition of assets from ACI and
Rockland, and for other general corporate purposes. Pioneer also executed a
$100 million note (the "Term Note"), dated as of December 22, 1997, payable to
NationsBank of Texas, N.A. for use for working capital. The Term Note has a
maturity date of April 1, 1999, and bears interest at the borrower's option, at
the rates set forth in clauses (a) and (b) of this paragraph. Also on December
18, 1997, Pioneer refinanced all of Chauvco's outstanding debt by establishing
a $290 million Canadian credit facility under which the borrower is Chauvco,
and Pioneer and certain of its subsidiaries (not including Pioneer USA) provide
guarantees.
Restructuring. On December 30, 1997, Pioneer and Pioneer USA completed a
restructuring that resulted in Pioneer becoming the primary obligor on the
$28.4 million of Mesa Notes that were not tendered and on the $300 million of
Parker & Parsley Petroleum Company's 8 7/8% Senior Notes Due 2005 and 8 1/4%
Senior Notes Due 2007 ("Parker & Parsley Notes"). Pioneer USA has guaranteed
the payment of principal and interest on the Parker & Parsley Notes, but has
not guaranteed the Mesa Notes. The guarantee of the Parker & Parsley Notes will
terminate if Pioneer USA is released from its guarantees of Pioneer's United
States Credit Facility.
Fourth Quarter Charges. During the fourth quarter of 1997, Pioneer will
recognize certain charges which adversely affect Pioneer's financial results.
In addition to the $11.9 million after-tax extraordinary loss related to the
Tender Offer noted above, Pioneer estimates that it will recognize after-tax
charges of between $7 - $10 million for the purchase of 3-D seismic data and
approximately $3 million resulting from the write-off of an unsuccessful well
in Guatemala. The decline of oil and gas prices during the fourth quarter of
1997 will also have an adverse effect on Pioneer's financial results.
3
4
ITEM 7.
FINANCIAL STATEMENTS AND EXHIBITS
In accordance with the Combination Agreement, each holder of Chauvco common
shares received for each Chauvco common share held (i) one CRI Share and (ii) in
certain cases, at the election of the Chauvco Shareholder, either the number of
shares of Pioneer common stock or Exchangeable Shares, or a combination of both,
determined by multiplying each Chauvco Common Share held by an exchange ratio of
.493827. In total, 14,015,010 shares of Pioneer common stock and 10,901,924
Exchangeable Shares were issued upon completion of the Transaction. Cash
payments were made in lieu of issuing approximately 89 fractional shares of
Pioneer common stock and 18 fractional shares of Exchangeable Shares.
In accordance with APB 16, the Transaction was treated as an acquisition of
Chauvco by Pioneer. The value of Pioneer common stock for use in determining
the aggregate purchase consideration allocated to the acquired assets and
liabilities of Chauvco ("Consideration") is $27.625, which represents the market
price of Pioneer common stock on December 18, 1997, the date of the shareholder
vote for the Transaction (the "Chauvco Meeting").
In August 1997, the stockholders of Pioneer's predecessor entities, Parker &
Parsley Petroleum Company ("Parker & Parsley") and MESA Inc. ("Mesa"), approved
an Amended and Restated Agreement and Plan of Merger ("Merger Agreement") that
resulted in the formation of Pioneer ("Parker/Mesa Merger"). In accordance with
the provisions of APB 16, the merger was treated as an acquisition of Mesa by
Parker & Parsley. As a result, the historical financial statements of Pioneer
are those of Parker & Parsley and present the addition of Mesa's assets and
liabilities as an acquisition by Pioneer in August 1997, and all references to
Pioneer contained herein are references to Parker & Parsley for dates prior to
the Parker/Mesa Merger.
The unaudited pro forma combined balance sheet and statements of operations
have been prepared to give effect to certain transactions as described below.
The unaudited pro forma combined balance sheet of Pioneer as of September
30, 1997 has been prepared to give effect to the Transaction as if such
transaction had occurred on September 30, 1997. In accordance with the
provisions of APB 16, the Transaction has been accounted for as a purchase
of Chauvco by Pioneer.
The unaudited pro forma combined statements of operations of Pioneer for
the nine months ended September 30, 1997 and for the year ended December
31, 1996 have been prepared to give effect to the Transaction, Parker/Mesa
Merger and certain events described below for Pioneer, Chauvco and Mesa as
if the Transaction, Parker/Mesa Merger and such events had occurred on
January 1, 1996.
Pro Forma Pioneer has been prepared to give effect to the acquisition of
Pro Forma Mesa by Adjusted Pioneer, both as defined below.
Pro Forma Chauvco has been prepared to give effect to the distribution of
CRI Shares and the rights to the Alliance Pipeline to the Chauvco
Shareholders.
Adjusted Pioneer has been prepared to give effect to (i) the sale of certain
wholly-owned Australian subsidiaries in March 1996 and the sale of Bridge
Oil Timor Sea, Inc. in June 1996 (collectively, the "Australasian Assets
Sold"), (ii) the aggregate effect of the sale of certain nonstrategic
domestic oil and gas properties, gas plants, contract rights and related
assets sold during the period from January 2, 1996 to December 31, 1996
(collectively, the "1996 Assets Sold") and (iii) the exchange of Pioneer's
6 1/4% Cumulative Monthly Income Convertible Preferred Shares ("Preferred
Shares") to Pioneer common stock in August 1997.
Pro Forma Mesa has been prepared to give effect to the Recapitalization (as
described in Note 1. of Notes to Unaudited Pro Forma Combined Financial
Statements), which entailed issuing $265 million in new preferred equity
and repaying and refinancing substantially all of Mesa's $1.2 billion of
then existing long-term debt, and the Greenhill acquisition, including
additional borrowings to finance such acquisition.
4
5
The historical consolidated financial statements for Chauvco and CRI were
prepared under Canadian GAAP and in Canadian dollars. For these unaudited pro
forma combined financial statements, the historical financial information of
Chauvco, CRI and the Alliance Pipeline project have been converted to U.S.
dollars using the period end exchange rate for the balance sheet and the
average exchange rate for the statements of operations for the respective
periods. These unaudited pro forma combined financial statements also contain
certain adjustments to conform the historical Chauvco financial statements to
U.S. GAAP and successful efforts method of accounting as used by Pioneer after
eliminating the balances or activity associated with CRI and the Alliance
Pipeline. In addition, certain reclassifications have been made to Chauvco's
historical consolidated financial statements to conform to Pioneer's financial
statement presentation.
The unaudited pro forma combined financial statements included herein are
not necessarily indicative of the results that might have occurred had the
transactions taken place at the beginning of the period specified and are not
intended to be a projection of future results. In addition, future results may
vary significantly from the results reflected in the accompanying unaudited pro
forma combined financial statements because of normal production declines,
changes in product prices, future acquisitions and divestitures, future
development and exploration activities, and other factors.
The following unaudited pro forma combined financial statements should be
read in conjunction with (i) the Consolidated Financial Statements (and the
related notes) of Pioneer included in its Quarterly Report on Form 10-Q for the
nine months ended September 30, 1997, (ii) the Consolidated Financial
Statements (and the related notes) of both Parker & Parsley and Mesa included
in their respective Annual Reports on Form 10-K and Form 10-K/A for the year
ended December 31, 1996 and their respective Quarterly Reports on Form 10-Q for
the three months ended March 31, 1997 and the six months ended June 30, 1997
and (iii) the Consolidated Financial Statements (and the related notes) of
Chauvco for the nine months ended September 30, 1997 and for the three-year
period ended December 31, 1996.
5
6
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(in thousands)
ASSETS
Pro Forma
Pro Forma
Pioneer
------------
Combined
Pro Forma
Chauvco
Adjustments
---------------------
Combined
-----------
Current assets:
Cash and cash equivalents
Restricted cash
Accounts receivable
Inventories
Deferred income taxes
Other current assets
---------------------
-----------
Total current assets
---------------------
185,952
-----------
$
40,631
1,716
128,093
6,839
3,600
5,073
514,828
-----------
-----------
$ 3,796,743
===========
$ 4,930,221
===========
-----------
Total current liabilities
---------------------
136,577
-----------
$
Long-term debt, less current maturities
Other noncurrent liabilities
Deferred income taxes
792,653
33,129
(164,554)(a)
401,462 (a)
(310,954)
41,059
1,716
166,349
8,714
3,600
6,517
4,622,806
517,993
310,954 (a)
(554,132)
11,116
1,716
76,698
52
46,995
6,085
22,700
$
19,545
33,423
161
-
----------1,718,107
-----------
$
53,129
1,601,145
127,614
213,300
745
1,626,487
(17,316)
108,191
41,821
73,778
208,653
7,808
52,290
108,836
154,903
30,661
1,716
110,121
213
46,995
189,706
30,000 (a)
93,268 (a)
(108,587)(a)
688,081 (a)
(154,903)(a)
263,739
----------$ 4,930,221
===========
See accompanying notes to unaudited pro forma combined financial statements.
6
$
227,955
35,736
51,078
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt
Undistributed unit purchases
Accounts payable
Domestic and foreign income taxes
Other current liabilities
---------------------
Stockholders' equity:
Common stock
Additional paid-in capital
Unearned compensation
Retained earnings
--------------------Total stockholders' equity
--------------------Commitments and contingencies
--------------------$ 3,796,743
$
585,619
===========
===========
(3)(a)
4,586,667
-----------
Other property and equipment, net
Other assets, net
--------------------$
585,619
===========
431
38,256
1,875
1,444
42,006
Property, plant and equipment, at cost:
Oil and gas properties, using the successful
efforts method of accounting:
Proved properties
3,994,707
Unproved properties
83,402
Accumulated depletion, depreciation and
amortization
(554,132)
------------------------------3,523,977
-----------
$
1,839,798
135,422
358,858
994
2,314,568
(17,316)
108,191
2,406,437
7
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(in thousands, except per share data)
Pro Forma
Pro Forma
Pioneer
------------
Pro Forma
Chauvco
-----------
Combined
Adjustments
-----------
Revenues:
Oil and gas
Interest and other
Gain on disposition of assets, net
--------------------
Pro Forma
Combined
-----------
$
558,600
5,671
2,763
-----------
567,034
113,455
-------------------Cost and expenses:
Oil and gas production
Depletion, depreciation and amortization
Impairment of long-lived assets
Exploration and abandonments
General and administrative
Interest
Other
--------------------
680,489
-----------
612,491
84,606
-------------------Income (loss) from continuing operations
before income taxes
Income tax benefit (provision)
--------------------
708,114
-----------
111,272
2,183
-
151,400
245,414
2,907
46,304
62,765
98,016
5,685
-----------
30,396
41,771
5,246
7,193
-
(45,457)
17,700
-----------
Income (loss) from continuing operations
(.38)
74,010
$
181,796
283,588
2,907
52,718
75,014
106,406
5,685
6,414(c)
7,003(d)
1,197(e)
(27,625)
12,400
367(f)
23,182
$
(15,225)
.48
48,428
===========
See accompanying notes to unaudited pro forma combined financial statements.
7
669,872
7,854
2,763
(3,597)(b)
28,849
(5,667)
(27,757)
Income (loss) from continuing operations per share
$
===========
==========
===========
Weighted average shares outstanding
===========
==========
$
$
(23,511)(g)
(.15)
98,927
8
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(in thousands, except per share data)
Pro Forma
Pro Forma
Combined
Pioneer
Chauvco
Adjustments
-------------- --------------------Revenues:
Oil and gas
Natural gas processing
Interest and other
Gain on disposition of assets, net
----------------------
Pro Forma
Combined
---------$
751,806
23,184
42,038
11,966
-----------
828,994
130,214
---------------------Cost and expenses:
Oil and gas production
Natural gas processing
Depletion, depreciation and
amortization
Exploration and abandonments
General and administrative
Interest
Other
----------------------
959,208
-----------
762,229
------------
872,488
-----------
98,584
-----------
$
129,833
381
-
196,014
11,949
34,145
-
320,468
32,128
68,478
128,401
4,791
-----------
48,657
7,469
8,313
-
$
881,639
23,184
42,419
11,966
230,159
11,949
(3,626)(b)
5,427 (c)
8,008 (d)
1,866 (e)
365,499
37,555
83,955
138,580
4,791
Income from continuing operations
before income taxes
Income tax provision
----------------------
66,765
(24,700)
-----------
Income from continuing operations
============
===========
$
42,065
===========
$
25,018
$
56,020
Income per share
============
===========
$
.57
===========
$
.52
$
.56
Weighted average shares
outstanding
============
===========
74,261
===========
31,630
(6,612)
48,300
See accompanying notes to unaudited pro forma combined financial statements.
8
86,720
(30,700)
612 (f)
(23,383)(g)
99,178
9
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(in thousands, except per share data)
Pro Forma
Pioneer
------------
Pro Forma
Mesa
Greenhill
-------------- ----------
Adjustments
------------
Revenues:
Oil and gas
$
348,980
Interest and other
3,649
Gain (loss) on disposition of
assets, net
2,745
-----------------------------A
355,374
194,103
17,557
-----------------------------Cost and expenses:
Oil and gas production
91,674
Depletion, depreciation and
amortization
126,897
Impairment of long-lived assets
Exploration and abandonments
34,310
General and administrative
31,769
Interest
44,264
5,429 (j)
(6,028)(k)
Other
2,982
-----------------------------331,896
207,055
31,743
-----------------------------Income (loss) from continuing
operations before income taxes
Income tax benefit (provision)
------------------------------
---------
Income (loss) from continuing
operations attributable to
common stock
===========
============
$
=========
Income (loss) per common share
===========
============
Weighted average shares
outstanding
===========
============
192,251
1,875
$
17,369
147
$
(23)
41
-----------
2,763
567,034
----------53,085
6,641
65,359
2,907
8,410
17,203
57,388
7,725
4,059
13,318
-
2,703
-----------
151,400
45,433 (b)
245,414
2,907
46,304
62,765
98,016
(475)(h)
475 (h)
(3,037)(i)
-
5,685
23,478
(8,500)
(12,952)
(14,186)
-----------
14,978
(12,952)
-
14,978
$
.34
43,453
(14,186)
(11,105)
-----------
$
$
(45,457)
17,700
26,200 (f)
(27,757)
-
11,105 (l)
-
(24,057)
$ (14,186)
===========
$
(27,757)
(.37)
===========
65,670
===========
$
(35,113)(m)
See accompanying notes to unaudited pro forma combined financial statements.
9
558,600
5,671
612,491
-----------
Income (loss) from continuing
operations
Dividends on preferred stock
----------------------
$
Pioneer
-------------
(.38)
74,010
10
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(in thousands, except per share data)
Adjusted
Pioneer
-------------
Pro Forma
Mesa
------------
Pro Forma
Adjustments
-----------
Revenues:
Oil and gas
Natural gas processing
Interest and other
Gain on disposition of assets, net
----------------------
$
374,560
23,184
17,328
-
415,072
413,922
---------------------Cost and expenses:
Oil and gas production
Natural gas processing
Depletion, depreciation and
amortization
Exploration and abandonments
General and administrative
Interest
Other
---------------------296,092
------------
101,545
11,949
94,469
-
104,629
20,187
26,631
28,700
2,451
135,289
12,772
41,016
105,266
2,340
-----------
118,980
22,770
(41,600)
-----------
Income from continuing operations
77,380
Dividends on preferred stock
----------------------
Weighted average shares
outstanding
============
===========
377,246
24,710
11,966
-----------
751,806
23,184
42,038
11,966
196,014
11,949
80,550 (b)
(831)(h)
831 (h)
(5,565)(j)
320,468
32,128
68,478
128,401
4,791
-
$
77,380
$
(21,880)
----------$
===========
1.82
$
===========
42,448
66,765
(24,700)
16,900 (f)
22,770
42,065
21,880 (l)
890
64,164
===========
-
$
.01
See accompanying notes to unaudited pro forma combined financial statements.
10
$
762,229
-----------
Income from continuing operations
before income taxes
Income tax provision
----------------------
Income per common share
============
===========
$
828,994
-----------
391,152
-----------
Income from continuing operations
attributable to common stock
============
===========
Pro Forma
Pioneer
------------
42,065
$
(32,351)(m)
.57
74,261
11
PIONEER NATURAL RESOURCES COMPANY
UNAUDITED PRO FORMA ADJUSTED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(in thousands, except per share data)
Australasian
Assets
Pioneer
------------
1996
Assets
Pro Forma
Adjusted
Sold
Sold
Adjustments
----------------------------------
Revenues:
Oil and gas
$
396,931
Natural gas processing
23,814
Interest and other
17,458
Gain on disposition of assets,
net
97,140
------------------------------535,343
(93,981)
---------------------Cost and expenses:
Oil and gas production
Natural gas processing
Depletion, depreciation and
amortization
Exploration and abandonments
General and administrative
Interest
(4,335)(n)
Other
----------------------
(26,290)
----------
334,995
-----------
(10,764)
----------
(11,784)
------------
$
(10,591)
(130)
(83,260)
(11,780)
(630)
-
374,560
23,184
17,328
(13,880)
----------
-
(3,300)
-
(5,489)
(579)
101,545
11,949
112,134
23,030
28,363
46,155
(4,217)
(1,435)
(1,732)
(1,100)
(3,288)
(1,408)
-
104,629
20,187
26,631
28,700
2,451
----------
-
$
(12,020)(i)
-
2,451
---------296,092
---------(82,197)
(15,526)
16,000
5,400
---------$
(2,900)(f)
(66,197)
$ (10,126)
==========
3.92
118,980
(41,600)
$
77,380
$
1.82
==========
35,734
6,714 (i)
==========
See accompanying notes to unaudited pro forma combined financial statements.
11
$
110,334
12,528
Income from continuing operations
$
140,248
===========
============
==========
Weighted average shares
outstanding
===========
$
415,072
----------
Income from continuing operations
before income taxes
200,348
Income tax provision
(60,100)
-------------------------------
Income per share
===========
Pioneer
----------
42,448
12
MESA INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(in thousands, except per share data)
Pro Forma
Pro Forma
Mesa
Recapitalization
Greenhill
Adjustments
------------- ---------------- --------------------Revenues:
Oil and gas
$
306,302
Natural gas processing
Interest and other
24,710
Gain on disposition of assets, net
11,966
-----------------------------342,978
-------------------Cost and expenses:
Oil and gas production
Natural gas processing
Depletion, depreciation and
amortization
Exploration and abandonments
General and administrative
Interest
Other
--------------------
70,944
-----------
334,639
(34,530)
--------------------
69,020
-----------
103,301
5,431
31,473
121,135
1,929
-----------
70,944
-
$
Dividends on preferred stock
--------------------
-----------
Income (loss) from continuing
operations attributable to
common stock
=============
========
$
(1,183)
===========
-
23,099
-
(34,530)(o)
----------
29,355
7,341
9,543
(729)
411
94,469
2,633 (b)
(9,522)
34,530
-
135,289
12,772
41,016
105,266
2,340
19,390 (k)
1,924
-
22,770
-
---------34,530
(12,358)(p)
----------
$ 22,172
$
==========
1,924
22,770
-
(21,880)
1,924
(.02)
$
890
$
.01
==========
64,164
64,164
==========
See accompanying notes to unaudited pro forma combined financial statements.
12
377,246
24,710
11,966
391,152
----------
8,339
$
$
----------
71,370
-
Income from continuing operations
Weighted average shares
outstanding
=============
-
413,922
----------
Income from continuing operations
before income taxes
8,339
Income tax provision
------------------------------
Income (loss) per common share
=============
$
Mesa
-----------
13
CHAUVCO RESOURCES LTD.
UNAUDITED PRO FORMA BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(in thousands)
ASSETS
Pro Forma
Chauvco
-----------
CRI
Alliance
-------------- ------------
Chauvco
------------
Current assets:
Cash and cash equivalents
Accounts receivable
Inventories
Other current assets
-------------------
----------
985
30,343
4,032
3,093
-----------
Total current assets
-------------------
----------
38,453
-----------
$
Oil and gas properties, using the full
cost method of accounting
Accumulated depletion, depreciation and
amortization
----------------------------
(311,874)
-----------
558,650
-----------
514,828
-----------
(43,822)
---------
----------
10,572
35,033
-----------
$
642,708
===========
$
585,619
===========
$
==========
(554)
(4,420)
(2,157)
(1,649)
(8,780)
870,524
Other property and equipment, net
Other assets, net
---------------------------$ (57,089)
=========
$
$
12,333
-
$
12,333
(44,742)
920
(4,487)
-
431
38,256
1,875
1,444
42,006
-
825,782
-
(310,954)
(12,333)
6,085
22,700
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt
Accounts payable
Domestic and foreign income taxes
----------------------------
19,545
42,073
161
-----------
Total current liabilities
-------------------
61,779
-----------
----------
Long-term debt, less current maturities
Other noncurrent liabilities
Deferred income taxes
$
(8,650)
-
(8,650)
208,653
8,061
52,290
Stockholders' equity:
Common stock
Retained earnings
-------------------
----------
158,603
153,322
-----------
Total stockholders' equity
-------------------
----------
311,925
-----------
Commitments and contingencies
-------------------
----------
-----------
$
642,708
===========
$
==========
$
585,619
===========
$ (57,089)
=========
$
$
-
-
-
(49,767)
1,581
-
-
See accompanying notes to unaudited pro forma combined financial statements.
13
19,545
33,423
161
53,129
(253)
-
(48,186)
$
208,653
7,808
52,290
108,836
154,903
263,739
14
CHAUVCO RESOURCES LTD.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(in thousands, except per share data)
Pro Forma
Chauvco
-----------
CRI
------------
Chauvco
------------
Revenues:
Oil and gas
Interest and other
--------------------
-----------
114,996
-----------
113,455
-----------
(1,541)
----------
$
113,182
1,814
Cost and expenses:
Oil and gas production
Depletion, depreciation and amortization
General and administrative
Interest
Other
-----------------------------87,658
-----------
(3,052)
----------
$
(1,910)
369
31,617
42,693
5,670
7,656
22
111,272
2,183
(1,221)
(922)
(424)
(463)
(22)
30,396
41,771
5,246
7,193
-
84,606
-----------
Income from continuing operations before income taxes
Income tax provision
-----------------------------Income from continuing operations
===========
==========
===========
Income per common share
===========
===========
Weighted average shares outstanding
===========
===========
27,338
(5,667)
$
21,671
$
.45
1,511
-
$
48,428
See accompanying notes to unaudited pro forma combined financial statements.
14
$
1,511
28,849
(5,667)
$
23,182
$
.48
48,428
15
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
NOTE 1.
BASIS OF PRESENTATION
ACQUISITION OF CHAUVCO. In accordance with the Combination Agreement, each
holder of Chauvco common shares received for each Chauvco common share held (i)
one CRI Share and (ii) in certain cases, at the election of the Chauvco
Shareholder, either the number of shares of Pioneer common stock or Exchangeable
Shares, or a combination of both, determined by multiplying each Chauvco Common
Share held by an exchange ratio of .493827. In total, 14,015,010 shares of
Pioneer common stock and 10,901,924 Exchangeable Shares were issued upon
completion of the Transaction. Cash payments were made in lieu of issuing
approximately 89 fractional shares of Pioneer common stock and 18 fractional
shares of Exchangeable Shares.
In accordance with APB 16, the Transaction was treated as an acquisition of
Chauvco by Pioneer. The value of Pioneer common stock for use in determining
the aggregate purchase consideration allocated to the acquired assets and
liabilities of Chauvco ("Consideration") is $27.625, which represents the market
price of Pioneer common stock on the date of the Chauvco Meeting.
The historical consolidated financial statements for Chauvco and CRI were
prepared under Canadian GAAP and in Canadian dollars. For these unaudited pro
forma financial statements, the historical financial information of Chauvco,
CRI and the Alliance Pipeline project have been converted to U.S. dollars using
the period end exchange rate for the balance sheet and the average exchange
rate for the statement of operations. These unaudited pro forma financial
statements also contain certain adjustments to conform the historical Chauvco
financial statements to U.S. GAAP after eliminating the balances or activity
associated with CRI and the Alliance Pipeline. In addition, certain
reclassifications have been made to Chauvco's historical consolidated financial
statements to conform to Pioneer's financial statement presentation.
ACQUISITION OF MESA. In accordance with the Merger Agreement, (i) holders
of Parker & Parsley common stock received one share of Pioneer common stock for
each share held; (ii) holders of Mesa common stock received one share of
Pioneer common stock for every seven shares held; and (iii) holders of Mesa
Series A Preferred Stock and Mesa Series B Preferred Stock received 1.25 shares
of Pioneer common stock for every seven shares held. No fractional shares were
issued and all treasury shares were canceled.
DESCRIPTION OF PRO FORMA FINANCIAL STATEMENTS. The unaudited pro forma
combined balance sheet of Pioneer as of September 30, 1997 has been prepared to
give effect to the Transaction as if such transactions had occurred on September
30, 1997. In accordance with the provisions of APB No. 16, "Business
Combinations", the Transaction has been accounted for as a purchase of Chauvco
by Pioneer.
The unaudited pro forma combined statements of operations of Pioneer for
the nine months ended September 30, 1997 and for the year ended December 31,
1996 have been prepared to give effect to the Transaction and the Parker/Mesa
Merger and certain events described below for Pioneer, Chauvco and Mesa as if
the Transaction, the Parker/Mesa Merger and such events had occurred on January
1, 1996.
Pro Forma Pioneer has been prepared to give effect to the acquisition of
Pro Forma Mesa by Adjusted Pioneer, both as defined below.
Pro Forma Chauvco has been prepared to give effect to the distribution of
CRI shares and the rights to the Alliance Pipeline to Chauvco Shareholders.
15
16
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
Adjusted Pioneer has been prepared to give effect to the sale of the
Australasian Assets Sold, the 1996 Assets Sold and the exchange of Pioneer's
Preferred Shares to Pioneer common stock.
Pro Forma Mesa has been prepared to give effect to the Recapitalization
and the Greenhill Acquisition, including additional borrowings to finance such
acquisition.
The following is a description of the individual columns included in these
unaudited pro forma combined financial statements:
PIONEER - Represents the consolidated balance sheet of Pioneer as of
September 30, 1997 and the consolidated statements of operations of
Pioneer for the nine months ended September 30, 1997 and for the year
ended December 31, 1996.
AUSTRALASIAN ASSETS SOLD - Reflects the results of operations for the
year ended December 31, 1996 from certain wholly-owned subsidiaries
prior to their sale in 1996. On March 28, 1996, Pioneer completed
the sale of certain wholly-owned subsidiaries to Santos Ltd., and on
June 20, 1996, Pioneer completed the sale of another wholly-owned
subsidiary, Bridge Oil Timor Sea, Inc., to Phillips Petroleum
International Investment Company. During the year ended December 31,
1996, Pioneer received aggregate consideration of $237.5 million for
these combined sales. The assets sold to Santos Ltd. consisted
primarily of properties located in the Cooper Basin in Central
Australia, the Surat Basin in Northeast Australia, the Carnarvon
Basin on the Northwest Shelf off the coast of Western Australia, the
Otway Basin off the coast of Southeast Australia and the Central
Sumatra Basin in Indonesia. At December 31, 1995, Pioneer's
interests in these properties contained 32.1 million BOE of proved
reserves (consisting of 12.4 million Bbls of oil and 118.3 Bcf of
gas), representing $133.8 million of SEC PV 10 value. Prior to their
sale in 1996, these properties produced 249,500 Bbls of oil and
1,927,000 Mcf of gas. Pioneer received an average price of $19.55
per Bbl of oil and $1.95 per Mcf of gas from such production and
incurred production costs per BOE of $4.92 and depletion expense per
BOE of $5.84 related to these properties. The wholly-owned
subsidiary sold to Phillips Petroleum International Investment
Company, Bridge Oil Timor Sea, Inc., has a wholly-owned subsidiary,
Bridge Oil Timor Sea Pty Ltd., which owns a 22.5% interest in the
ZOCA 91-13 permit in the offshore Bonapart Basin in the Zone of
Cooperation between Australia and Indonesia.
1996 ASSETS SOLD - Reflects the results of operations for the year
ended December 31, 1996 from certain oil and gas properties, gas
plants, contract rights and related assets prior to their sale in
1996. During the year ended December 31, 1996, Pioneer sold certain
domestic nonstrategic oil and gas properties, gas plants and other
related assets for aggregate proceeds of approximately $58.4 million.
Prior to their sale in 1996, these oil and gas properties produced
274,314 Bbls of oil and 3,196,093 Mcf of gas. Pioneer received an
average price of $19.30 per Bbl of oil and $2.03 per Mcf of gas from
such production and incurred production costs per BOE of $6.80 and
depletion expense per BOE of $4.04 related to these properties.
MESA - Represents the unaudited consolidated statements of
operations of Mesa for the seven months ended July 31, 1997(the
period prior to its acquisition by Pioneer) and for the year ended
December 31, 1996.
RECAPITALIZATION - Represents the effects on Mesa's unaudited pro
forma combined statement of operations from the Recapitalization as
if it had occurred on January 1, 1996. In August 1996, Mesa
completed a recapitalization of its balance sheet by issuing new
equity and repaying and refinancing substantially all of its then
existing long-term debt. The Recapitalization was undertaken by Mesa
in an effort to deleverage and recapitalize Mesa through the issuance
of additional equity and through the refinancing of substantially all
of Mesa's $1.2 billion debt existing prior to the Recapitalization.
The Recapitalization provided Mesa with an
16
17
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
improved financial condition due to (i) a significant reduction in
total debt outstanding, (ii) a reduction in annual cash interest
expense of approximately $75 million, (iii) cost savings programs
which reduced general and administrative and other overhead expenses
by approximately $10 million annually, and (iv) the extension of
maturities on Mesa's long-term debt, which eliminated Mesa's then
existing liquidity concerns. The Recapitalization included (i) the
private placement of shares of a new class of Mesa Series B Preferred
Stock for $133 million to DNR - Mesa Holdings, Inc. ("DNR"), whose
sole general partner is Rainwater Inc., a Texas corporation owned by
Richard E. Rainwater, (ii) the sale of $132 million of a new class of
Mesa Series A Preferred Stock to Mesa's then existing stockholders
through a rights offering, (iii) the establishment of a new bank
credit facility and (iv) the issuance of two new series of senior
subordinated notes.
GREENHILL - Represents the unaudited statements of operations of
Greenhill prior to its acquisition by Mesa on April 15, 1997 and for
the year ended December 31, 1996.
CHAUVCO - Represents the consolidated balance sheet of Chauvco as of
September 30, 1997 and the consolidated statements of operations of
Chauvco for the nine months ended September 30, 1997 and for the year
ended December 31, 1996. The historical consolidated financial
statements for Chauvco were prepared under Canadian GAAP and converted
to U.S. dollars utilizing the exchange rates of Canadian dollars to
U.S. dollars as listed below, which are based upon the noon buying
rate in New York City for cable transfers in Canadian dollars, as
certified for customer purposes by the Federal Reserve Bank of New
York (the "Noon Buying Rate"):
September 30,
1997
-------------
December 31,
1996
--------------
Balance Sheets
Statements of Operations
.7234
.7253
N/A
.7330
CRI - Represents the consolidated balance sheet of CRI as of September
30, 1997 and the statement of operations of CRI for the nine months
ended September 30, 1997, which were prepared under Canadian GAAP and
in U.S. dollars. CRI was incorporated on July 29, 1997 as a
wholly-owned subsidiary of Chauvco.
ALLIANCE - Reflects the investment in the Alliance Projects as of
September 30, 1997 which were prepared under Canadian GAAP and
converted to U.S. dollars utilizing the Noon Buying Rate of .7234.
The unaudited pro forma combined statement of operations for the year ended
December 31, 1996 presented herein does not reflect the results of operations
from Mesa's acquisition from MAPCO Inc. of approximately 11 MMBOE in February
1997 for approximately $66 million. The purchase was funded by additional
borrowings under Mesa's credit facility. In addition, the unaudited pro forma
combined statement of operations for the year ended December 31, 1996 presented
herein does not reflect the results of operations from Chauvco's acquisition of
Tidal Resources Inc. on January 3, 1997 for approximately $55 million. The
purchase was funded by additional borrowings under Chauvco's credit facility.
The unaudited pro forma combined financial statements of Pioneer presented
herein do not reflect the results of the Tender Offer, American Cometra
Acquisition, 1997 Asset Divestitures, or the Restructuring, as more fully
described in "Item 5. Other Events"; all of which were completed in the fourth
quarter of 1997. These acquisitions and other transactions are not presented
since they are not considered significant under Rule 3-05 of Regulation S-X.
17
18
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
NOTE 2. ACQUISITION OF CHAUVCO
The aggregate Pioneer common stock purchase consideration, including
nonrecurring transaction costs, is computed below in accordance with an
exchange ratio of .493827 shares of Pioneer common stock for each Chauvco share
held and a Pioneer common stock price of $27.625.
Chauvco
Common
Chauvco
Shares
Options
Total
------------------------------ -------------Shares/options outstanding
Exchange ratio
------------------------
48,916,983
.493827
24,156,527
1,193,876
Less: Option Exercise shares (a)
-----------------------24,156,527
760,407
24,916,934
Pioneer shares/Exchangeable Shares to be issued
Value of Pioneer common stock (b)
-----------------------------------Pioneer common stock consideration
=============
============
Transaction costs
Cash paid in lieu of fractional shares
-------------
2,417,600
.493827
-
$
27.625
$ 667,324,058
(433,469)
$
27.625
$ 21,006,243
Aggregate purchase consideration
=============
- --------------(a) Certain Chauvco Optionholders have elected to reduce the number of shares
of Pioneer common stock they would otherwise be eligible to receive by the
number of shares of Pioneer common stock equal to the exercise strike price
of their options rather than pay, in cash, their exercise price.
(b) Pioneer common stock is valued at $27.625 per share which represents the
market price of Pioneer common stock on December 18, 1997, the date of the
shareholder vote for the Transaction.
The following table represents the preliminary allocation of the total
purchase price of Chauvco to the acquired assets and liabilities of Chauvco.
The allocation represents the fair values assigned to each of the significant
assets acquired and liabilities assumed. Any future adjustments to the
allocation of the purchase price are not anticipated to be material to the
unaudited pro forma financial statements.
18
$
27.625
$ 688,330,301
30,000,000
2,956
$ 718,333,257
19
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
Allocation of Aggregate
Purchase Consideration
September 30, 1997
----------------------(in thousands)
Net working capital
Property, plant and equipment
Other assets
Long-term debt
Other non-current liabilities, including deferred taxes
-----------$
718,333
============
$
Pioneer common stock consideration
Transaction costs
Cash paid in lieu of fractional shares
-----------Aggregate purchase consideration
============
$
688,330
30,000
3
$
718,333
The following table illustrates the number of shares of Pioneer common
stock that are issued and outstanding upon the consummation of the Transaction:
Shares/options
outstanding
at December 18, 1997
--------------------
Exchange
Ratio
-----------
Pioneer common stock
Chauvco Common Shares
Chauvco Options
------------
Pioneer Shares/
Exchangeable Shares
------------------74,463,064
48,916,983
2,417,600
N/A
.493827
(a)
74,463,064
24,156,527
760,407
99,379,998
============
- -----------------(a) Certain Chauvco Optionholders
of Pioneer common stock they would
number of shares of Pioneer common
price of their options rather than
19
have elected to reduce the number of shares
otherwise be eligible to receive by the
stock equal to the exercise strike
pay, in cash, their exercise price.
(11,123)
1,062,690
28,785
(208,653)
(153,366)
20
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
NOTE 3.
ACQUISITION OF MESA
The aggregate Pioneer common stock purchase consideration, including
nonrecurring transaction costs, is computed in accordance with the Exchange
Ratios agreed to in the Merger Agreement as follows:
Mesa
Mesa Series
Mesa Series
common
A Preferred
B Preferred
Stock
Stock
Stock
------------------------------------Shares outstanding
Exchange ratio for Mesa shares
-------------------------
Total
------------64,279,568
1.00
62,884,094
1.25
63,672,925
1.25
-------------
64,279,568
78,605,118
79,591,156
Exchange ratio to Pioneer common stock
------------------------------------Pioneer shares
Value of Pioneer common stock (a)
$
-------------------------------------
222,475,842
7.00
-------------
7.00
9,182,795
11,229,303
30.82
$
30.82
-------------
Pioneer common stock consideration
$ 283,013,742
=============
=============
=============
Transaction costs
Mesa options
-------------
$ 346,087,118
7.00
$
11,370,165
30.82
$ 350,428,485
7.00
$
31,782,263
30.82
979,529,345
7,916,762
3,036,712
Aggregate purchase consideration
=============
$ 990,482,819
- ------------------------(a)
Pioneer common stock is valued at $30.82 per share which represents
Pioneer's seven-day average trading price surrounding the announcement of
the Parker/Mesa Merger on April 7, 1997.
The following table represents the preliminary allocation of the total
purchase price of Mesa, including its Greenhill Acquisition, to the acquired
assets and liabilities of Mesa. The allocation represents the fair values
assigned to each of the significant assets acquired and liabilities assumed.
Any future adjustments to the allocation of the purchase price are not
anticipated to be material to the unaudited pro forma combined financial
statements.
Allocation of Aggregate
Purchase Consideration
September 30, 1997
-----------------------(in thousands)
Net working capital
Property, plant and equipment
Other assets
Long-term debt
Other noncurrent liabilities, including deferred taxes
------------
$
47
2,382,205
49,219
(1,191,038)
(249,950)
$
990,483
============
Pioneer common stock consideration
Transaction costs
Mesa options
------------
$
979,529
7,917
3,037
Aggregate purchase consideration
============
$
990,483
20
21
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
The following table illustrates the number of shares of Pioneer common
stock that were issued in accordance with the exchange ratios agreed to in
the Merger Agreement.
Shares
Outstanding
Pioneer
Existing Security Type
- ------------------------------------
at August 7, 1997
Common Stock
------------------------------
Parker & Parsley Common Stock
Mesa Common Stock
Mesa Series A Preferred Stock
Mesa Series B Preferred Stock
-----------73,555,501
============
NOTE 4.
41,773,238
64,279,568
62,884,094
63,672,925
PRO FORMA ENTRIES
(a) To record the acquisition of Chauvco using the purchase method of
accounting. The allocation of the purchase price to the acquired assets
and liabilities is preliminary and, therefore, subject to change. Any
future adjustments to the allocation of the purchase price are not
anticipated to be material to Pioneer's financial statements. (See Note 2
above).
(b) To adjust depreciation, depletion and amortization expense for the
additional basis allocated to the oil and gas properties acquired and
accounted for using the successful efforts method of accounting.
(c) To reclassify amounts which were capitalized by Chauvco as oil and gas
properties in accordance with the full cost method of accounting but that
are treated as exploratory dry hole, geological and geophysical and delay
rental expenses in accordance with the successful efforts method of
accounting.
(d) To reclassify amounts which were capitalized by Chauvco as oil and gas
properties in accordance with the full cost method of accounting but that
are treated as general and administrative expenses in accordance with the
successful efforts method of accounting.
(e) To record interest expense on the borrowings of $30 million which will be
utilized to pay for nonrecurring transaction costs. The interest rate
used to determine such interest expense of 5.32% and 6.22% represents
Pioneer's average borrowing rate on outstanding bank indebtedness for the
nine months ended September 30, 1997 and the year ended December 31, 1996,
respectively.
(f)
To adjust income tax expense for each tax jurisdiction.
(g) To adjust the weighted average shares outstanding for the acquisition of
Chauvco. This adjustment also assumes the conversion of the Chauvco
options into Pioneer common stock for purposes of computing weighted
average shares outstanding.
(h) To reclassify certain amounts to conform with the financial statement
presentation of Pioneer.
(i) To (i) reclassify the Preferred Shares to common stock as a result of
Pioneer's mandatory exchange of such Preferred Shares for shares of Pioneer
common stock on July 28, 1997 and (ii) eliminate the interest expense
associated with such Preferred Shares and amortization of capitalized
issuance fees. On July 28, 1997, Pioneer exercised its right to require
each holder of the 3,776,400 Preferred Shares to mandatorily exchange all
Preferred Shares for shares of common stock of Pioneer at a rate of 1.7778
shares of Pioneer common stock for each Preferred Share. As a result of the
exchange, Pioneer will no longer incur interest expense of approximately
$12 million per year associated with the Preferred Shares.
21
41,773,238
9,182,795
11,229,303
11,370,165
22
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(j) To reduce interest expense for (i) the amortization of the premiums
(utilizing the effective interest rate method) recorded as part of
purchase accounting for Mesa's 10-5/8% senior subordinated notes and
11-5/8% senior subordinated discount notes and (ii) the application of
Pioneer's excess cash in 1996 to the reduction of Mesa's outstanding bank
indebtedness at Mesa's 1996 pro forma incremental borrowing interest rate
of 7% (see pro forma entry (k) below).
(k) To adjust interest expense resulting from the borrowing of the funds
necessary for Mesa's acquisition of Greenhill. Mesa's 1997 and 1996 pro
forma incremental borrowing interest rate of 7% was utilized to determine
the additional pro forma interest expense.
(l) To eliminate the preferred stock dividends associated with Mesa's Series A
and Series B Preferred Stock.
(m) To adjust the weighted average shares outstanding for the acquisition of
Mesa. This adjustment also assumes the conversion of Mesa's outstanding
employee stock options into Pioneer employee stock options for purposes of
computing weighted average shares outstanding.
(n) To adjust interest expense resulting from the application of that portion
of the sales proceeds from the Australasian Assets Sold and the 1996
Assets Sold necessary to retire Pioneer's outstanding bank indebtedness.
The proceeds applied to retire Pioneer's outstanding bank indebtedness of
$225 million resulted in a reduction in interest expense of $4.3 million.
The reduction in interest expense was calculated utilizing Pioneer's
weighted average rate on its bank indebtedness of 6.22% for the period
during 1996 in which Pioneer had outstanding bank indebtedness.
(o) To reduce interest expense as a result of the Recapitalization. Interest
expense adjustments include the following for the year ended December 31,
1996:
Pro Forma
Historical
---------
Pro Forma
----------
Adjustment
-----------
Interest expense on former debt repaid in the
Recapitalization:
Secured notes
Former credit agreement
12-3/4% secured discount notes
13-1/2% subordinated notes
$
Interest expense on former debt repaid prior to the
Recapitalization:
12-3/4% unsecured discount notes
Interest expense on new debt issued in the
Recapitalization:
10-5/8% senior subordinated notes
11-5/8% senior discount notes
New Credit Facility
Other interest expense
---------------------------$ 121,135
$
86,605
$
(34,530)
=========
==========
===========
22
26,231
2,472
43,979
654
2,595
17,613
8,893
15,094
3,604
$
-
2,595
35,418
18,661
26,327
3,604
$
(26,231)
(2,472)
(43,979)
(654)
-
17,805
9,768
11,233
-
23
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
Other interest expense is primarily the interest portion of the
administrative fee charged by Colorado Interstate Gas Company in
connection with Mesa's West Panhandle field operations. The interest rate
on the New Credit Facility is approximately 7.75% on the first $250
million due to an interest rate swap with the balance at a floating rate
that during the period outstanding was approximately 7%.
(p) To record the pro forma adjustment for an 8% annual dividend on the Mesa
Series A and Series B Preferred Stock payable quarterly in additional
shares of Mesa Series A and Series B Preferred Stock for at least the
first four years after issuance as if the Mesa Series A and Series B
Preferred Stock had been issued on January 1, 1996.
NOTE 5.
INCOME TAXES
Pioneer will account for income taxes in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes." In accordance with SFAS 109, Pioneer will prepare separate tax
calculations for each tax jurisdiction in which Pioneer will be subject to
income taxes.
NOTE 6.
INCOME FROM CONTINUING OPERATIONS PER SHARE
Income from continuing operations per share is computed based on the
weighted average number of shares of common stock and common stock equivalents,
if more than 3% dilutive, outstanding during the period. Fully diluted income
from continuing operations per share is not presented since dilution is less
than 3% on a pro forma combined basis. Income from continuing operations per
share reflects the exchange of Chauvco Common Shares for Pioneer common stock
or Exchangeable Shares, the exchange of Pioneer's Preferred Shares and the
conversion of Mesa's Series A Preferred Stock and Mesa's Series B Preferred
Stock to Pioneer common stock.
NOTE 7.
GENERAL AND ADMINISTRATIVE EXPENSE REDUCTIONS
Mesa's general and administrative expenses for the year ended December 31,
1996 includes $9.4 million associated with the elimination of 86 positions from
the total of 385 at December 31, 1995, and a significant downsizing of Mesa's
natural gas vehicle equipment business in conjunction with the
Recapitalization. Given the first quarter 1997 general and administrative
expenses of $3.8 million, Mesa's continuing costs are estimated at
approximately $15 million per year ($3.8 million multiplied by four quarters).
In addition, Greenhill's general and administrative expenses prior to its sale
to Mesa on April 15, 1997 of $13.3 million included severance costs paid to
Greenhill employees of approximately $11 million as few of Greenhill's
administrative personnel were retained. The accompanying Pro Forma Combined
Statements of Operations for Pioneer do not include any adjustments related to
the expected level of ongoing general and administrative expense.
23
24
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
NOTE 8.
OIL AND GAS RESERVE DATA
The following unaudited pro forma supplemental information regarding the
oil and gas activities of Pioneer is presented pursuant to the disclosure
requirements promulgated by the SEC and Statement of Financial Accounting
Standards No. 69, "Disclosures About Oil and Gas Producing Activities." The
pro forma reserve information is presented as if the sale of the Australasian
Assets and 1996 Assets Sold and the acquisition of Chauvco, Mesa and Greenhill
had occurred on January 1, 1996.
Management emphasizes that reserve estimates are inherently imprecise and
subject to revision and that estimates of new discoveries are more imprecise
than those of producing oil and gas properties. Accordingly, the estimates are
expected to change as future information becomes available; such changes could
be significant.
Quantities of oil and gas reserves
Set forth below is a pro forma summary of the changes in the net
quantities of oil and natural gas reserves for the year ended December 31,
1996.
Oil, NGL's and Condensate (MBbls)
----------------------------------------USA
Argentina Canada
Total
---------------- --------------
Gas (MMcf)
------------------------------------------------USA
Argentina
Canada
Total
-----------------------------------
Balance, January 1, 1996
267,108
15,933
21,895
304,936
1,984,726
322,000
Revisions of previous
estimates
31,475
(722)
249
31,002
42,246
(10,860)
Purchase of mineralsin-place
300
300
11,494
New discoveries and
extensions
2,794
1,608
650
5,052
30,151
4,588
Production
(20,497)
(1,183)
(4,330)
(26,010)
(160,729)
(16,820)
--------------------------- --------------------------------Balance, December 31,
1996
281,180
15,636
18,464
315,280
1,907,888
298,908
========
=======
=======
======== ==========
=======
========
===========
Standardized measure of discounted future net cash flows
The pro forma combined standardized measure of discounted future net cash
flow is computed by applying year-end prices of oil and gas (with consideration
of price changes only to the extent provided by contractual arrangements) to
the estimated future production of oil and gas reserves less estimated future
expenditures (based on year-end costs) to be incurred in developing and
producing the proved reserves, discounted using a rate of 10% per year to
reflect the estimated timing of the future cash flows. Future income taxes are
calculated by comparing discounted future cash flows to the tax basis of oil
and gas properties, plus available carryforwards and credits, and applying the
current tax rate to the difference.
24
136,264
2,442,990
(5,180)
26,206
-
11,494
3,320
(12,500)
121,904
38,059
(190,049)
2,328,700
25
PIONEER NATURAL RESOURCES COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
December 31, 1996
------------------------------------------------------------USA
Argentina
Canada
Total
--------------- ----------------------------------(in thousands)
Oil and gas producing activities:
Future cash inflows
Future production costs
Future development costs
Future income tax expense
-----------------------------6,948,109
429,724
339,841
10% annual discount factor
-----------------------------Standardized measure of discounted future
net cash flows
============
==========
==========
$ 13,987,546
(3,970,522)
(389,701)
(2,679,214)
-----------7,717,674
(3,240,886)
------------
$
3,707,223
============
$
599,243
(144,714)
(24,084)
(721)
(214,813)
$
214,911
$
$
680,112
(173,033)
(10,632)
(156,606)
$ 15,266,901
(4,288,269)
(424,417)
(2,836,541)
(114,840)
(3,570,539)
225,001
$
4,147,135
Changes relating to the standardized measure of discounted future net cash
flows
The principal sources of the change in the pro forma combined standardized
measure of discounted future net cash flows for the year ended December 31,
1996 are as follows (in thousands):
Oil and gas sales, net of production costs
Net changes in prices and production costs
Extensions and discoveries
Purchases of minerals-in-place
Revisions of estimated future development costs
Revisions of previous quantity estimates
Accretion of discount
Changes in production rates, timing and other
----------Change in present value of future net revenues
Net change in present value of future income taxes
----------1,487,867
Balance, beginning of year
----------Balance, end of year
===========
25
$
(651,480)
2,220,041
131,526
20,606
(71,763)
327,004
290,618
(150,096)
2,116,456
(628,589)
2,659,268
$ 4,147,134
26
PIONEER NATURAL RESOURCES COMPANY
EXHIBIT
2.1
Combination Agreement, dated as of September 3, 1997, between
Pioneer and Chauvco Resources Ltd. ("Chauvco") (incorporated by
reference to Exhibit 2.2 to Pioneer's Registration Statement on
Form S-3, Registration No. 333-20483, filed with the SEC on
December 15, 1997).
2.2*
Plan of Arrangement, as amended, under Section 186 of the
Business Corporations Act (Alberta).
2.3*
Support Agreement, dated as of December 18, 1997, between
Pioneer and Pioneer Natural Resources (Canada) Ltd. ("Pioneer
Canada").
2.4*
Voting and Exchange Trust Agreement, dated as of December 18,
1997, among Pioneer, Pioneer Canada and Montreal Trust
Company of Canada, as Trustee.
2.5
Amended and Restated Shareholders Agreement, dated as of
September 3, 1997, by and among Pioneer and Guy J. Turcotte
(incorporated by reference to Exhibit 2.6 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-20483
filed with the SEC on December 15, 1997).
2.6
Shareholders Agreement, dated as of September 3, 1997, by and
among Pioneer, Chauvco, DNR-MESA Holdings, L.P. ("DNR"),
Scott D. Sheffield and I. Jon Brumley (incorporated by reference
to Exhibit 2.3 to Pioneer's Current Report on Form 8-K, File
No. 001-13245, filed with the SEC on October 2, 1997).
2.7
Shareholders Agreement, dated as of September 3, 1997, by and
among Pioneer, Trimac Corporation and Gendis Inc.
(incorporated by reference to Exhibit 2.4 to Pioneer's
Current report on Form 8-K, File No.001-13245, filed with the SEC
on October 2, 1997).
2.8
Amended and Restated Shareholders Agreement, dated as of
September 3, 1997, by and among the Company and Guy J. Turcotte
(incorporated by reference to Exhibit 2.6 to the Company's
Registration Statement on Form S-3, Registration No. 333-42315),
filed with the SEC on December 15, 1997).
3.1
Certificate of Designations of Special Preferred Voting Stock
(incorporated by reference to Exhibit 3.3 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-20483,
filed with the SEC on December 15, 1997).
3.2
Terms and Conditions of Exchangeable Shares (incorporated by
reference to Annex F to the Definitive Joint Management
Information Circular and Proxy
27
Statement of Pioneer and Chauvco, File No. 001-13245, filed
with the SEC on November 17, 1997).
4.1*
Form of Certificate of Special Preferred Voting Stock.
4.2*
Form of Certificate of Exchangeable Shares.
10.1*
Amended and Restated Credit Facility Agreement (Primary Facility),
dated as of December 18, 1997, between Pioneer, as Borrower,
and NationsBank of Texas, N.A. as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York,
as Documentation Agent, and The Chase Manhattan Bank, as
Syndication Agent and the other Co-Agents and Lenders named
therein.
10.2*
Amended and Restated Credit Facility Agreement (364 Day Facility),
dated as of December 18, 1997, between Pioneer, as Borrower,
and NationsBank of Texas, N.A. as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York,
as Documentation Agent, and The Chase Manhattan Bank, as
Syndication Agent; and the other Co-Agents and Lenders named
therein.
10.3*
Credit Agreement, dated as of December 18, 1997, among Chauvco,
Canadian Imperial Bank of Commerce, as Agent, and the other
Lenders named therein.
10.4
First Supplemental Indenture, dated as of April 15, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 10 5/8% Senior
Subordinated Notes Due 2006 (incorporated by reference to Exhibit
10.5 to Pioneer's Registration Statement on Form S-3, Registration
No. 333-39381, filed with the SEC on November 3, 1997).
10.5
Second Supplemental Indenture, dated as of August 7, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 10 5/8% Senior
Subordinated Notes Due 2006 (incorporated by reference to
Exhibit 10.6 to Pioneer's Registration Statement on Form S-3,
Registration No. 333-39381, filed with the SEC on November 3,
1997).
10.6*
Third Supplemental Indenture, dated as of December 18, 1997,
among Pioneer USA, the Subsidiary Guarantors named therein,
Pioneer, and Harris Trust and Savings Bank, as Trustee, with
respect to the Indenture, dated as of July 2, 1996, as amended,
relating to Pioneer USA's 10 5/8% Senior Subordinated Notes due
2006.
10.7*
Fourth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer USA, a Delaware corporation, Pioneer, a
Delaware corporation, Pioneer NewSubl, Inc., a Texas corporation,
and Harris Trust and Savings Bank, an Illinois corporation, as
trustee, with respect to the Indenture, dated as of July 2, 1996,
as amended, relating to Pioneer USA's 10 5/8% Senior Subordinated
Notes due 2006.
10.8*
Fifth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer NewSubl, Inc. (as successor to Pioneer USA), a
Texas corporation, Pioneer, a Delaware corporation, Pioneer
DebtCo, Inc., a Texas corporation, and Harris Trust and Savings
Bank, an Illinois corporation, as trustee, with respect to the
Indenture, dated as of July 2, 1996, as amended, relating to
Pioneer USA's 10 5/8% Senior Subordinated Notes due 2006.
10.9*
Sixth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer DebtCo, Inc. (as successor to Pioneer NewSubl,
Inc.), a Texas corporation, Pioneer, a Delaware corporation,
and Harris Trust and Savings Bank, an Illinois corporation, as
trustee, with respect to the Indenture, dated as of July 2, 1996,
as amended, relating to Pioneer USA's 10 5/8% Senior Subordinated
Notes due 2006.
10.10
First Supplemental Indenture, dated as of April 15, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 11 5/8%
Senior Subordinated Discount Notes Due 2006 (incorporated by
reference to Exhibit 10.2 to Pioneer's Registration Statement on
Form S-3, Registration No. 333-39381, filed with the SEC on
November 3, 1997).
10.11
Second Supplemental Indenture, dated as of August 7, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 11 5/8%
Senior Subordinated Discount Notes Due 2006 (incorporated by
reference to Exhibit 10.3 to Pioneer's Registration Statement on
Form S-3, Registration No. 333-39381, filed with the SEC on
November 3, 1997).
10.12*
Third Supplemental Indenture, dated as of December 18, 1997,
among Pioneer USA, the Subsidiary Guarantors named therein,
Pioneer, and Harris Trust and Savings Bank, as Trustee, with
respect to the Indenture, dated as of July 2, 1996, as amended,
relating to Pioneer USA's 11 5/8% Senior Subordinated Notes due
2006.
28
10.13*
Fourth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer USA (formerly known as Mesa Operating Co.), a
Delaware corporation, Pioneer, a Delaware corporation,
Pioneer NewSub1, Inc., a Texas corporation, and Harris Trust and
Savings Bank, an Illinois corporation, as Trustee, with respect
to the Indenture dated as of July 2, 1996, as amended, relating
to Pioneer USA's 11 5/8% Senior Subordinated Discount Notes Due.
10.14*
Fifth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer NewSub1, Inc. (as successor to Pioneer USA), a
Texas corporation, Pioneer, a Delaware corporation, Pioneer
DebtCo, Inc., a Texas corporation, and Harris Trust and Savings
Bank, an Illinois corporation, as trustee, with respect to the
Indenture dated as of July 2, 1996, as amended, relating to
Pioneer USA's 11 5/8% Senior Subordinated Discount Notes Due
2006.
10.15*
Sixth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer DebtCo, Inc.(as successor to Pioneer NewSub1,
Inc.), a Texas corporation, Pioneer, a Delaware corporation,
and Harris Trust and Savings Bank, an Illinois corporation, as
trustee, with respect to the Indenture dated as of July 2, 1996,
as amended, relating to Pioneer USA's 11 5/8% Senior Subordinated
Discount Notes Due 2006.
10.16
First Supplemental Indenture, dated as of August 7, 1997, among
Parker & Parsley, The Chase Manhattan Bank, as Trustee, and
Pioneer USA, with respect to the Indenture, dated April 12,
1995, between Pioneer USA (successor to Parker & Parsley
Petroleum Company), and The Chase Manhattan Bank (National
Association), as Trustee (incorporated by reference to Exhibit
10.9 to Pioneer's Registration Statement on Form S-3,
Registration No. 333-39381, filed with the SEC on November 3,
1997).
10.17*
Second Supplemental Indenture, dated as of December 30, 1997,
among Pioneer USA, a Delaware corporation, Pioneer NewSubl, Inc., a
Texas corporation, and The Chase Manhattan Bank, a New York
banking association, as trustee, with respect to the Indenture,
dated as of April 12, 1995, as amended, relating to Pioneer USA's
8 7/8% Senior Notes Due 2005 and 8 1/4% Senior Notes Due 2007.
10.18*
Third Supplemental Indenture, dated as of December 30, 1997,
among Pioneer NewSubl, Inc. (as successor to Pioneer USA), a
Texas corporation, Pioneer DebtCo, Inc., a Texas corporation, and
The Chase Manhattan Bank, a New York banking association, as
trustee, with respect to the Indenture, dated as of April 12,
1995, as amended, relating to Pioneer USA's 8 7/8% Senior Notes
Due 2005 and 8 1/4% Senior Notes Due 2007.
10.19*
Fourth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer DebtCo, Inc. (as successor to Pioneer NewSubl,
Inc., as successor to Pioneer USA), a Texas corporation,
Pioneer, a Delaware corporation, Pioneer USA, a Delaware
corporation, and The Chase Manhattan Bank, a New York banking
association, as trustee, with respect to the Indenture, dated as
of April 12, 1995, as amended, relating to Pioneer USA's 8 7/8%
Senior Notes Due 2005 and 8 1/4% Senior Notes Due 2007.
29
10.20*
Guarantee, dated as of December 30, 1997, by Pioneer USA relating
to the $150,000,000 in aggregate principal amount of 8 7/8%
Senior Notes Due 2005 and $150,000,000 in aggregate principal
amount of 8 1/4% Senior Notes Due 2007 issued under the
Indenture, dated as of April 12, 1995, between Pioneer USA and
The Chase Manhattan Bank, a New York banking association, as
Trustee.
10.21*
Note, dated December 22, 1997, between Pioneer, as Borrower,
and NationsBank of Texas, N.A., as Lender.
10.22*
Purchase and Sale Agreement, dated as of October 22, 1997, between
Cometra Energy, L.P., and Pioneer USA.
10.23*
Indemnification Agreement, dated as of August 8, 1997, between
Pioneer and Scott D. Sheffield, together with a schedule
identifying substantially identical agreements between Pioneer's
other directors and named executive officers identified on
Schedule I.
10.24
Gathering Agreement, dated May 29, 1987, between Mesa Operating
Limited Partnership and Colorado Interstate Gas Company
(incorporated by reference to Exhibit 10.26 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-39381,
filed with the SEC on November 3, 1997).
10.25
Amendment to 1990 Gathering Agreement Amendment, dated September
1, 1997, between Colorado Interstate Gas Company and Pioneer USA
(incorporated by reference to Exhibit 10.28 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-39381,
filed with the SEC on November 3, 1997).
10.26
Stock Acquisition Loan Agreement entered into as of June 15,
1995, between Parker & Parsley Petroleum Company and Scott D.
Sheffield, together with Schedule I identifying executive
officers with substantially identical agreements providing for
Parker & Parsley Petroleum Company's loans to such officers in
order to acquire shares of Parker & Parsley Petroleum Company's
Common Stock, par value $0.01 per share (incorporated by
reference to Exhibit 10.48 to Pioneer's Amendment No. 1 to
Registration Statement on Form S-3, Registration No. 333-39381,
filed with the SEC on November 3, 1997).
- ---------------------* Filed herewith.
30
PIONEER NATURAL RESOURCES COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PIONEER NATURAL RESOURCES COMPANY
Date: December 31, 1997
By: /s/ GARRETT SMITH
----------------------------------Executive Vice President - Chief
Financial Officer
31
INDEX TO EXHIBITS
EXHIBIT
NUMBER
- ------
DESCRIPTION
-----------
2.1
Combination Agreement, dated as of September 3, 1997, between
Pioneer and Chauvco Resources Ltd. ("Chauvco") (incorporated by
reference to Exhibit 2.2 to Pioneer's Registration Statement on
Form S-3, Registration No. 333-20483, filed with the SEC on
December 15, 1997).
2.2*
Plan of Arrangement, as amended, under Section 186 of the
Business Corporations Act (Alberta).
2.3*
Support Agreement, dated as of December 18, 1997, between
Pioneer and Pioneer Natural Resources (Canada) Ltd. ("Pioneer
Canada").
2.4*
Voting and Exchange Trust Agreement, dated as of December 18,
1997, among Pioneer, Pioneer Canada and Montreal Trust
Company of Canada, as Trustee.
2.5
Amended and Restated Shareholders Agreement, dated as of
September 3, 1997, by and among Pioneer and Guy J. Turcotte
(incorporated by reference to Exhibit 2.6 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-20483
filed with the SEC on December 15, 1997).
2.6
Shareholders Agreement, dated as of September 3, 1997, by and
among Pioneer, Chauvco, DNR-MESA Holdings, L.P. ("DNR"),
Scott D. Sheffield and I. Jon Brumley (incorporated by reference
to Exhibit 2.3 to Pioneer's Current Report on Form 8-K, File
No. 001-13245, filed with the SEC on October 2, 1997).
2.7
Shareholders Agreement, dated as of September 3, 1997, by and
among Pioneer, Trimac Corporation and Gendis Inc.
(incorporated by reference to Exhibit 2.4 to Pioneer's
Current report on Form 8-K, File No.001-13245, filed with the SEC
on October 2, 1997).
2.8
Amended and Restated Shareholders Agreement, dated as of
September 3, 1997, by and among the Company and Guy J. Turcotte
(incorporated by reference to Exhibit 2.6 to the Company's
Registration Statement on Form S-3, Registration No. 333-42315),
filed with the SEC on December 15, 1997).
3.1
Certificate of Designations of Special Preferred Voting Stock
(incorporated by reference to Exhibit 3.3 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-20483,
filed with the SEC on December 15, 1997).
3.2
Terms and Conditions of Exchangeable Shares (incorporated by
reference to Annex F to the Definitive Joint Management
Information Circular and Proxy
PAGE
----
32
Statement of Pioneer and Chauvco, File No. 001-13245, filed
with the SEC on November 17, 1997).
4.1*
Form of Certificate of Special Preferred Voting Stock.
4.2*
Form of Certificate of Exchangeable Shares.
10.1*
Amended and Restated Credit Facility Agreement (Primary Facility),
dated as of December 18, 1997, between Pioneer, as Borrower,
and NationsBank of Texas, N.A. as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York,
as Documentation Agent, and The Chase Manhattan Bank, as
Syndication Agent and the other Co-Agents and Lenders named
therein.
10.2*
Amended and Restated Credit Facility Agreement (364 Day Facility),
dated as of December 18, 1997, between Pioneer, as Borrower,
and NationsBank of Texas, N.A. as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York,
as Documentation Agent, and The Chase Manhattan Bank, as
Syndication Agent; and the other Co-Agents and Lenders named
therein.
10.3*
Credit Agreement, dated as of December 18, 1997, among Chauvco,
Canadian Imperial Bank of Commerce, as Agent, and the other
Lenders named therein.
10.4
First Supplemental Indenture, dated as of April 15, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 10 5/8% Senior
Subordinated Notes Due 2006 (incorporated by reference to Exhibit
10.5 to Pioneer's Registration Statement on Form S-3, Registration
No. 333-39381, filed with the SEC on November 3, 1997).
10.5
Second Supplemental Indenture, dated as of August 7, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 10 5/8% Senior
Subordinated Notes Due 2006 (incorporated by reference to
Exhibit 10.6 to Pioneer's Registration Statement on Form S-3,
Registration No. 333-39381, filed with the SEC on November 3,
1997).
10.6*
Third Supplemental Indenture, dated as of December 18, 1997,
among Pioneer USA, the Subsidiary Guarantors named therein,
Pioneer, and Harris Trust and Savings Bank, as Trustee, with
respect to the Indenture, dated as of July 2, 1996, as amended,
relating to Pioneer USA's 10 5/8% Senior Subordinated Notes due
2006.
10.7*
Fourth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer USA, a Delaware corporation, Pioneer, a
Delaware corporation, Pioneer NewSubl, Inc., a Texas corporation,
and Harris Trust and Savings Bank, an Illinois corporation, as
trustee, with respect to the Indenture, dated as of July 2, 1996,
as amended, relating to Pioneer USA's 10 5/8% Senior Subordinated
Notes due 2006.
10.8*
Fifth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer NewSubl, Inc. (as successor to Pioneer USA), a
Texas corporation, Pioneer, a Delaware corporation, Pioneer
DebtCo, Inc., a Texas corporation, and Harris Trust and Savings
Bank, an Illinois corporation, as trustee, with respect to the
Indenture, dated as of July 2, 1996, as amended, relating to
Pioneer USA's 10 5/8% Senior Subordinated Notes due 2006.
10.9*
Sixth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer DebtCo, Inc. (as successor to Pioneer NewSubl,
Inc.), a Texas corporation, Pioneer, a Delaware corporation,
and Harris Trust and Savings Bank, an Illinois corporation, as
trustee, with respect to the Indenture, dated as of July 2, 1996,
as amended, relating to Pioneer USA's 10 5/8% Senior Subordinated
Notes due 2006.
10.10
First Supplemental Indenture, dated as of April 15, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 11 5/8%
Senior Subordinated Discount Notes Due 2006 (incorporated by
reference to Exhibit 10.2 to Pioneer's Registration Statement on
Form S-3, Registration No. 333-39381, filed with the SEC on
November 3, 1997).
10.11
Second Supplemental Indenture, dated as of August 7, 1997, among
Pioneer USA (formerly Mesa Operating Co.), as Issuer, MESA Inc.,
the subsidiary guarantors named therein, Pioneer, and Harris Trust
and Savings Bank, as Trustee, with respect to the 11 5/8%
Senior Subordinated Discount Notes Due 2006 (incorporated by
reference to Exhibit 10.3 to Pioneer's Registration Statement on
Form S-3, Registration No. 333-39381, filed with the SEC on
November 3, 1997).
10.12*
Third Supplemental Indenture, dated as of December 18, 1997,
among Pioneer USA, the Subsidiary Guarantors named therein,
Pioneer, and Harris Trust and Savings Bank, as Trustee, with
respect to the Indenture, dated as of July 2, 1996, as amended,
relating to Pioneer USA's 11 5/8% Senior Subordinated Notes due
2006.
33
10.13*
Fourth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer USA (formerly known as Mesa Operating Co.), a
Delaware corporation, Pioneer, a Delaware corporation,
Pioneer NewSub1, Inc., a Texas corporation, and Harris Trust and
Savings Bank, an Illinois corporation, as Trustee, with respect
to the Indenture dated as of July 2, 1996, as amended, relating
to Pioneer USA's 11 5/8% Senior Subordinated Discount Notes Due.
10.14*
Fifth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer NewSub1, Inc. (as successor to Pioneer USA), a
Texas corporation, Pioneer, a Delaware corporation, Pioneer
DebtCo, Inc., a Texas corporation, and Harris Trust and Savings
Bank, an Illinois corporation, as trustee, with respect to the
Indenture dated as of July 2, 1996, as amended, relating to
Pioneer USA's 11 5/8% Senior Subordinated Discount Notes Due
2006.
10.15*
Sixth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer DebtCo, Inc.(as successor to Pioneer NewSub1,
Inc.), a Texas corporation, Pioneer, a Delaware corporation,
and Harris Trust and Savings Bank, an Illinois corporation, as
trustee, with respect to the Indenture dated as of July 2, 1996,
as amended, relating to Pioneer USA's 11 5/8% Senior Subordinated
Discount Notes Due 2006.
10.16
First Supplemental Indenture, dated as of August 7, 1997, among
Parker & Parsley, The Chase Manhattan Bank, as Trustee, and
Pioneer USA, with respect to the Indenture, dated April 12,
1995, between Pioneer USA (successor to Parker & Parsley
Petroleum Company), and The Chase Manhattan Bank (National
Association), as Trustee (incorporated by reference to Exhibit
10.9 to Pioneer's Registration Statement on Form S-3,
Registration No. 333-39381, filed with the SEC on November 3,
1997).
10.17*
Second Supplemental Indenture, dated as of December 30, 1997,
among Pioneer USA, a Delaware corporation, Pioneer NewSubl, Inc., a
Texas corporation, and The Chase Manhattan Bank, a New York
banking association, as trustee, with respect to the Indenture,
dated as of April 12, 1995, as amended, relating to Pioneer USA's
8 7/8% Senior Notes Due 2005 and 8 1/4% Senior Notes Due 2007.
10.18*
Third Supplemental Indenture, dated as of December 30, 1997,
among Pioneer NewSubl, Inc. (as successor to Pioneer USA), a
Texas corporation, Pioneer DebtCo, Inc., a Texas corporation, and
The Chase Manhattan Bank, a New York banking association, as
trustee, with respect to the Indenture, dated as of April 12,
1995, as amended, relating to Pioneer USA's 8 7/8% Senior Notes
Due 2005 and 8 1/4% Senior Notes Due 2007.
10.19*
Fourth Supplemental Indenture, dated as of December 30, 1997,
among Pioneer DebtCo, Inc. (as successor to Pioneer NewSubl,
Inc., as successor to Pioneer USA), a Texas corporation,
Pioneer, a Delaware corporation, Pioneer USA, a Delaware
corporation, and The Chase Manhattan Bank, a New York banking
association, as trustee, with respect to the Indenture, dated as
of April 12, 1995, as amended, relating to Pioneer USA's 8 7/8%
Senior Notes Due 2005 and 8 1/4% Senior Notes Due 2007.
34
10.20*
Guarantee, dated as of December 30, 1997, by Pioneer USA relating
to the $150,000,000 in aggregate principal amount of 8 7/8%
Senior Notes Due 2005 and $150,000,000 in aggregate principal
amount of 8 1/4% Senior Notes Due 2007 issued under the
Indenture, dated as of April 12, 1995, between Pioneer USA and
The Chase Manhattan Bank, a New York banking association, as
Trustee.
10.21*
Note, dated December 22, 1997, between Pioneer, as Borrower,
and NationsBank of Texas, N.A., as Lender.
10.22*
Purchase and Sale Agreement, dated as of October 22, 1997, between
Cometra Energy, L.P., and Pioneer USA.
10.23*
Indemnification Agreement, dated as of August 8, 1997, between
Pioneer and Scott D. Sheffield, together with a schedule
identifying substantially identical agreements between Pioneer's
other directors and named executive officers identified on
Schedule I.
10.24
Gathering Agreement, dated May 29, 1987, between Mesa Operating
Limited Partnership and Colorado Interstate Gas Company
(incorporated by reference to Exhibit 10.26 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-39381,
filed with the SEC on November 3, 1997).
10.25
Amendment to 1990 Gathering Agreement Amendment, dated September
1, 1997, between Colorado Interstate Gas Company and Pioneer USA
(incorporated by reference to Exhibit 10.28 to Pioneer's
Registration Statement on Form S-3, Registration No. 333-39381,
filed with the SEC on November 3, 1997).
10.26
Stock Acquisition Loan Agreement entered into as of June 15,
1995, between Parker & Parsley Petroleum Company and Scott D.
Sheffield, together with Schedule I identifying executive
officers with substantially identical agreements providing for
Parker & Parsley Petroleum Company's loans to such officers in
order to acquire shares of Parker & Parsley Petroleum Company's
Common Stock, par value $0.01 per share (incorporated by
reference to Exhibit 10.48 to Pioneer's Amendment No. 1 to
Registration Statement on Form S-3, Registration No. 333-39381,
filed with the SEC on November 3, 1997).
- ---------------------* Filed herewith.
1
EXHIBIT 2.2
PLAN OF ARRANGEMENT
UNDER SECTION 186
OF THE BUSINESS CORPORATIONS ACT (ALBERTA)
ARTICLE 1
INTERPRETATION
1.1
Definitions. In this Plan of Arrangement unless there is something in
the subject matter or context inconsistent therewith, the following terms shall
have the respective meanings set out below and grammatical variations of such
terms shall have corresponding meanings:
"ABCA" means the Business Corporations Act (Alberta), as amended;
"Arrangement" means the arrangement under section 186 of the ABCA on the terms
and subject to the conditions set out in this Plan of Arrangement, subject to
any amendments thereto made in accordance with Section 6.1 hereof or made at
the direction of the Court in the Final Order;
"Arrangement Resolution" means the special resolution passed by the holders of
the Chauvco Common Shares and Chauvco Options at the Meeting;
"Automatic Redemption Date" has the meaning attributed thereto in the
Exchangeable Share Provisions;
"Average Closing Price" means the average closing sales price, regular way, per
share of the US Co Common Stock on the NYSE in United States dollars as
reported in the Wall Street Journal over the ten (10) consecutive trading days
ending on the third trading day next preceding the date of the Meeting
converted to Canadian dollars using the Currency Exchange Rate;
"Business Day" has the meaning attributed thereto in the Exchangeable Share
Provisions;
"Cash Payment " means the cash payment, if any, which a holder of Chauvco
Common Shares or Chauvco Options is entitled to receive in accordance with
Section 2.2;
"Certificates" means, collectively, the certificates representing the
Exchangeable Shares and shares of US Co Common Stock (in each case rounded down
to the nearest whole number) and the CRI Shares which a holder of Chauvco
Common Shares or Chauvco Options is entitled to receive pursuant to the
Arrangement;
"Chauvco" means Chauvco Resources Ltd., a corporation organized and existing
under the ABCA and any successor corporation;
"Chauvco Common Shares" means the common shares in the capital of Chauvco;
2
-2"Chauvco Options" means each of the outstanding options to purchase Chauvco
Common Shares, including all outstanding options granted under Chauvco's Stock
Option Plan as amended and restated on November 10, 1995;
"Combination Agreement" means the agreement by and among US Co and Chauvco,
dated as of September 3, 1997, as the same may be amended and restated,
providing for, among other things, the Arrangement;
"Court" means the Court of Queen's Bench of Alberta;
"CR" means CR International Limited, a corporation organized and existing under
the laws of Bermuda;
"CRI" means Chauvco Resources International Ltd., a corporation organized and
existing under the laws of Bermuda;
"CRI Shares" means the common shares in the capital of CRI;
"Currency Exchange Rate" means the noon spot rate of exchange of US dollars to
Canadian dollars announced by the Bank of Canada on the day preceding the date
of calculation;
"Depositary" means Montreal Trust Company of Canada at its principal office in
Calgary, Alberta;
"Dissent Procedures" has the meaning attributed thereto in Section 3.1;
"Effective Date" means the date the articles of arrangement giving effect to
this Plan of Arrangement are filed by the Registrar of Corporations pursuant to
subsection 186(10) of the ABCA;
"Effective Time" means 12:01 a.m. on the Effective Date;
"Election Deadline" means that date which is two (2) days prior to the date of
the Meeting;
"Exchange Ratio" has the meaning attributed thereto in Section 2.2;
"Exchangeable Share Consideration" has the meaning attributed thereto in the
Exchangeable Share Provisions;
"Exchangeable Share Price" has the meaning attributed thereto in the
Exchangeable Share Provisions;
"Exchangeable Share Provisions" means the rights, privileges, restrictions and
conditions attaching to the Exchangeable Shares;
"Exchangeable Shares" means the exchangeable shares in the capital of US Co
Sub;
"Final Order" means the final order of the Court approving the Arrangement as
such order may be amended by the Court at any time prior to the Effective Time;
3
-3"Gabon Securities" has the meaning attributed thereto in Section 2.1(b);
"Gabon Subsidiaries" has the meaning attributed thereto in Section 2.1(b);
"ITA" means the Income Tax Act (Canada), as amended;
"Joint Proxy Statement" means the Joint Management Information Circular
Proxy Statement of Chauvco and US Co dated November 14, 1997;
and
"Letter of Transmittal and Election Form" has the meaning attributed thereto in
Section 2.1(h);
"Liquidation Call Purchase Price" has the meaning attributed thereto in Section
5.1;
"Liquidation Call Right" has the meaning attributed thereto in Section 5.1;
"Liquidation Date" has the meaning attributed thereto in the Exchangeable Share
Provisions;
"Meeting" means the special meeting of Shareholders and Optionholders to be
held to consider the Arrangement;
"NYSE" means the New York Stock Exchange;
"Optionholders" means holders of Chauvco Options;
"Option Letter of Transmittal and Election Form" has the meaning attributed
thereto in Section 2.1(f);
"Option Payment" has the meaning attributed thereto in Section 2.1(e);
"Record Date" means that date which is three trading days prior to the
Effective Date;
"Redemption Call Purchase Price" has the meaning attributed thereto
5.2;
in Section
"Redemption Call Right" has the meaning attributed thereto in Section
5.2;
"Shareholders" means holders of Chauvco Common Shares;
"Shareholders Rights Plan Agreement" means the Shareholders Rights Plan
Agreement between Chauvco and Montreal Trust Company of Canada made as of April
24, 1997;
"Subsidiary" has the meaning attributed thereto in the Exchangeable Share
Provisions;
"US Co" means Pioneer Natural Resources Company, a corporation organized and
existing under the laws of the State of Delaware and any successor corporation;
"US Co Common Stock" has the meaning attributed thereto in the Exchangeable
Share Provisions;
"US Co Stock Price" has the meaning attributed thereto in Section 2.2;
4
-4"US Co Sub" means Pioneer Natural Resources (Canada) Ltd., a corporation
organized and existing under the laws of British Columbia and any successor
corporation;
"US Co Sub Common Shares" means the common shares in the capital of US Co Sub;
"Voting Share" has the meaning ascribed to such term in the Voting and Exchange
Trust Agreement;
"Voting and Exchange Trust Agreement" has the meaning attributed thereto in the
Exchangeable Share Provisions; and
"Westoil" means Westoil Marine & Transport Co Ltd., a corporation organized and
existing under the laws of Bermuda.
1.2
Sections and Headings. The division of this Plan of Arrangement into
sections and the insertion of headings are for reference purposes only and
shall not affect the interpretation of this Plan of Arrangement. Unless
otherwise indicated, any reference in this Plan of Arrangement to a section or
an Appendix refers to the specified section of or Appendix to this Plan of
Arrangement.
1.3
Number, Gender and Persons. In this Plan of Arrangement, unless the
context otherwise requires, words importing the singular number include the
plural and vice versa, words importing any gender include all genders and words
importing persons include individuals, corporations, partnerships,
associations, trusts, unincorporated organizations, governmental bodies and
other legal or business entities of any kind.
1.4
Currency. Unless otherwise specified, all references herein to
"dollars" or "$" shall mean Canadian dollars.
ARTICLE 2
ARRANGEMENT
2.1
Arrangement. At the Effective Time, the following transactions shall
occur and shall be deemed to occur in the following order without any further
act or formality:
(a)
Chauvco shall subscribe for that number of CRI Shares as is
equal to (i) the number of Chauvco Common Shares which are issued and
outstanding on the Record Date, (ii) plus that number of Chauvco Common Shares
which all Optionholders would otherwise be entitled to acquire on the exercise
of their Chauvco Options on a fully vested basis on the Record Date (other than
Chauvco Common Shares that could be acquired by Optionholders who exercise
their right of dissent in accordance with Article 3 hereof and who are
ultimately entitled to be paid the fair value of their Chauvco Options), (iii)
less that number of CRI Shares then held by Chauvco, and (iv) less that number
of Chauvco Common Shares held by Shareholders who have exercised their rights
of dissent in accordance with Article 3 hereof and who are ultimately entitled
to be paid the fair value for such shares. The subscription price for the CRI
Shares shall be paid for in cash in the aggregate amount equal to US$5,000,000
plus the fair market value on the Effective Date (as determined and adjusted in
accordance with Section 2.3) of the Gabon Securities;
5
-5(b)
CRI shall purchase from CR for cash in an aggregate amount
equal to the fair market value thereof on the Effective Date (as determined
and adjusted in accordance with Section 2.3), (i) all of the issued and
outstanding securities of Chauvco Resources (Gabon) S.A., Chauvco Resources
(Gabon-Ngalo) S.A., Chauvco Resources (Gabon-Maga) S.A., Chauvco Resources
(Gabon-Avomo) S.A. and CR Trading Co. Ltd. (collectively, the "Gabon
Subsidiaries"), (ii) 75% of the issued and outstanding securities of Westoil,
and (iii) all of its rights under a loan in the amount of U.S. $909,421.60 made
by CR to Olympic Marine Services International, Inc. (which owns the remaining
25% of the issued and outstanding securities of Westoil), any and all advances
made by CR to Westoil, and any and all advances made by Chauvco (all of which
shall have first been assigned by Chauvco to CR) to the Gabon Subsidiaries and
Westoil (such securities in Section 2.1(b)(i), (ii) and (iii) collectively, the
"Gabon Securities");
(c)
Chauvco shall transfer, assign and convey to CRI, in
consideration for $1.00, all of Chauvco's right, title, benefit and interest in
and to any and all trademarks (including registrations and applications
therefor), trade names and the internet domain name "chauvco.com" owned by
Chauvco as at the Effective Time, and the other assets and property which are
set out in Exhibit I;
(d)
US Co Sub shall purchase from Chauvco all of the issued and
outstanding CRI Shares in consideration of the payment by way of promissory
note of US Co Sub to Chauvco in an amount equal to the subscription price paid
for such CRI Shares by Chauvco under Section 2.1(a);
(e)
each of the outstanding Chauvco Options (other than Chauvco
Options held by an Optionholder who has exercised its right of dissent in
accordance with Article 3 hereof and is ultimately entitled to be paid the fair
value of its Chauvco Options) will vest, if not already vested, and be
transferred to US Co Sub in consideration for one (1) CRI Share and, in
accordance with the election of each Optionholder and the remainder of this
Section 2.1(e) and Section 2.1(f), a number of shares of US Co Common Stock
determined in accordance with the Exchange Ratio in which event, in addition to
transferring the Chauvco Options to US Co Sub, the Optionholder will be
required to make a payment to US Co Sub (the "Option Payment") in an amount
equal to the aggregate exercise price which the Optionholder would otherwise be
required to pay on the exercise of such options. As an alternative to making
the Option Payment, Optionholders will be entitled to elect to reduce the
number of shares of US Co Common Stock to be received by the number obtained by
dividing the Option Payment by the US Co Stock Price (converted into Canadian
dollars using the Currency Exchange Rate). Each Optionholder will receive only
a whole number of shares of US Co Common Stock resulting from the transfer of
his Chauvco Options. In lieu of fractional shares of US Co Common Stock, each
Optionholder who would otherwise be entitled to receive such fractional shares
shall be paid by US Co Sub an amount determined in accordance herewith in full
satisfaction of such fractional entitlement;
(f)
an Optionholder electing to make the Option Payment and
receive the applicable number of shares of US Co Common Stock under Section
2.1(e) above must have given effect to the election by depositing with the
Depositary, prior to the Election Deadline, a duly completed letter of
transmittal and election form (the "Option Letter of Transmittal and Election
Form") in the form provided by Chauvco along with the Joint Proxy Statement
indicating such holder's election and by agreeing to pay the Option Payment to
the Depositary as agent for US Co Sub. Coincident with the receipt of the CRI
Shares and shares of US Co Common Stock, such Optionholder shall pay the Option
Payment to the Depositary as agent for US Co Sub less any amounts receivable by
such Optionholder in connection with fractional entitlements hereunder. In the
event that an Optionholder
6
-6who has elected to make the Option Payment fails to make the Option Payment on
or before the day that is 60 days after the Effective Date, such Optionholder
shall be deemed to have elected the option to receive the reduced number of
shares of US Co Common Stock by not making the Option Payment. In the event
that an Optionholder has failed to validly make an election in the Option
Letter of Transmittal and Election Form pursuant to this paragraph, such
Optionholder shall be deemed to have elected the option to receive the reduced
number of shares of US Co Common Stock by not making the Option Payment;
(g)
held by
Article
Chauvco
(1) CRI
each of the outstanding Chauvco Common Shares that are not
a Shareholder who has exercised its right of dissent in accordance with
3 hereof and is ultimately entitled to be paid the fair value of its
Common Shares will be transferred to US Co Sub in consideration for one
Share and, at the election of the holders of the Chauvco Common Shares:
(i)
a number of shares of US Co Common Stock determined
in accordance with the Exchange Ratio. Each such
holder of Chauvco Common Shares will receive only a
whole number of shares of US Co Common Stock
resulting from the transfer of such holder's Chauvco
Common Shares to US Co Sub. In lieu of fractional
shares of US Co Common Stock, each holder of a
Chauvco Common Share who otherwise would be entitled
to receive such fractional share shall be paid by US
Co Sub an amount determined in accordance herewith in
full satisfaction of such fractional entitlement; or
(ii)
a number of shares of Exchangeable Shares determined
in accordance with the Exchange Ratio. Each such
holder of Chauvco Common Shares will receive only a
whole number of Exchangeable Shares resulting from
the transfer of such holder's Chauvco Common Shares
to US Co Sub. In lieu of fractional Exchangeable
Shares, each holder of a Chauvco Common Share who
otherwise would be entitled to receive such
fractional share shall be paid by US Co Sub an amount
determined in accordance herewith in full
satisfaction of such fractional entitlement,
provided that such holders shall be entitled to elect to
receive a combination of shares of US Co Common Stock and
Exchangeable Shares on the transfer of their Chauvco Common
Shares; and
contemporaneously with such transfer, the Shareholders Rights Plan Agreement
and all outstanding Rights (as defined in the Shareholders Rights Plan
Agreement) will be terminated, void and of no further force or effect;
(h)
a holder of Chauvco Common Shares must have given effect to
the election in Section 2.1(g) above by depositing with the Depositary, prior
to the Election Deadline, a duly completed letter of transmittal and election
form (the "Letter of Transmittal and Election Form") in the form provided by
Chauvco along with the Joint Proxy Statement indicating such holder's election.
In the event that a holder of Chauvco Common Shares has failed to validly make
an election under Section 2.1(g) in the Letter of Transmittal and Election Form
pursuant to this paragraph, such holder shall
7
-7be deemed to have elected the option under Section 2.1(g)(i). Notwithstanding
any provision to the contrary, holders of Chauvco Common Shares who are not
residents of Canada for the purposes of the ITA will not be entitled to receive
Exchangeable Shares under Section 2.1(g)(ii).
Each holder of Chauvco Common
Shares who, prior to the Election Deadline, returned to Chauvco a duly
completed Letter of Transmittal and Election Form (containing a declaration of
residency status) shall be treated as a resident shareholder or non-resident
shareholder, as applicable, in accordance with his declaration. Any holder of
Chauvco Common Shares who did not complete such declaration by the Election
Deadline and who has an address on the register of holders of Chauvco Common
Shares which is outside of Canada shall be deemed to be a non-resident
shareholder;
(i)
upon the transfer of shares referred to in Section 2.1(g)
above: (i) each holder of a Chauvco Common Share shall cease to be such a
holder, shall have his name removed from the register of holders of Chauvco
Common Shares and shall become a holder of the number of fully paid CRI Shares
and Exchangeable Shares and/or shares of US Co Common Stock to which he is
entitled as a result of the transfer of shares referred to in Section 2.1(g)
and such holder's name shall be added to the register of holders of such
securities accordingly; and (ii) US Co Sub shall become the legal and
beneficial owner of all of the Chauvco Common Shares so transferred;
(j)
holders of Chauvco Common Shares who are residents of Canada
for the purposes of the ITA and who have elected to receive Exchangeable Shares
under Section 2.1(g)(ii) shall be entitled to make an income tax election
pursuant to subsection 85(1) of the ITA with respect to the transfer of their
Chauvco Common Shares to US Co Sub by providing two signed copies of the
necessary election forms to US Co Sub within 90 days following the Effective
Date, duly completed with the details of the number of shares transferred and
the applicable agreed amounts for the purposes of such elections. Thereafter,
subject to the election forms complying with the provisions of the ITA, the
forms will be signed by US Co Sub and returned to such holders of Chauvco
Common Shares for filing with Revenue Canada, Customs, Excise and Taxation;
(k)
US Co shall issue to and deposit with the Depositary the
Voting Share, in consideration of the payment to US Co of US$1, to be hereafter
held of record by the Depositary as trustee for and on behalf of, and for the
use and benefit of, the holders of the Exchangeable Shares, in accordance with
the Voting and Exchange Trust Agreement; and
(l)
US Co Sub shall be continued as a corporation under the ABCA.
2.2
Exchange Ratio. As used herein, the term "Exchange Ratio" means in
respect of Exchangeable Shares or US Co Common Stock to be delivered upon the
transfer of Chauvco Common Shares or Chauvco Options to US Co Sub, a ratio of
the number of Exchangeable Shares or shares of US Co Common Stock per Chauvco
Common Share or Chauvco Option equal to:
(a)
if the US Co Stock Price is less than US$33.50, (.493827);
(b)
if the US Co Stock Price is at least US$33.50 but less than
US$39.01,
.493827 - ((US Co Stock Price - 33.50) X .042360)
------------------------5.51
8
-8and
(c)
if the US Co Stock Price is equal to or greater than $39.01,
(.451467).
The Exchange Ratio as so determined in each case shall be rounded to six
decimal places. The "US Co Stock Price" shall mean the average closing sales
price, regular way, per share of the US Co Common Stock on the NYSE in United
States dollars as reported in the Wall Street Journal over the ten (10)
consecutive trading days ending on the third trading day next preceding the
date of the Meeting. Notwithstanding the foregoing, if the Exchange Ratio is
above .465116, US Co may elect to cause US Co Sub to deliver, in lieu of
Exchangeable Shares and shares of US Co Common Stock, a number of Exchangeable
Shares or shares of US Co Common Stock for each Chauvco Common Share or Chauvco
Option based on the Exchange Ratio as set forth above equal to (.465116) and an
amount in cash (in Canadian dollars) per Chauvco Common Share or Chauvco Option
equal to the product of (x) the US Co Stock Price multiplied by the Currency
Exchange Rate and (y)
Exchange Ratio -- .465116.
2.3
Fair Market Value. (a) Chauvco determined that the fair market value
of the Gabon Securities on September 3, 1997 was approximately US$60,000,000
relying on (i) the bidding process in connection with the sale of Chauvco, (ii)
the reserve and evaluation reports prepared by Chauvco's independent engineers,
(iii) the review and recommendation of Chauvco's senior management which
established a range of values at various discount factors and an assessment of
the exploration and development potential of the applicable properties, and
(iv) an independent review conducted to confirm and support the allocation to
the CRI Shares by Chauvco of a portion of the consideration received by the
Chauvco Shareholders. The fair market value of the Gabon Securities on the
Effective Date shall be revalued and determined by Chauvco using consistent
principles.
(b)
Notwithstanding the determination of the fair market value of
the Gabon Securities on the Effective Date under Section 2.3(a), unless Chauvco
and US Co otherwise agree, the amount which will be payable with respect to
such value may not exceed US$100,000,000.
ARTICLE 3
RIGHTS OF DISSENT
3.1
Rights of Dissent. Shareholders and Optionholders may exercise rights
of dissent with respect to their Chauvco Common Shares and Chauvco Options
pursuant to and in the manner set forth in section 184 of the ABCA (as modified
by the Interim Order) and this Section 3.1 (the "Dissent Procedures") in
connection with the Arrangement and holders who duly exercise such rights of
dissent and who:
(a)
are ultimately entitled to be paid the fair value for their
Chauvco Common Shares or Chauvco Options shall be deemed to have transferred
such Chauvco Common Shares or Chauvco Options to Chauvco for cancellation on
the Effective Date; or
9
-9(b)
are ultimately not entitled, for any reason, to be paid the
fair value for their Chauvco Common Shares or Chauvco Options shall be deemed
to have participated in the Arrangement on the same basis as any
non-dissenting Shareholder or Optionholder,
but in no case shall Chauvco be required to recognize such holders as
Shareholders or Optionholders on and after the Effective Date, and the names of
such Shareholders shall be deleted from the register of holders of Chauvco
Common Shares on the Effective Date.
3.2
Dissent Payments. The obligations to make payments in respect of
dissenting Shareholders and Optionholders (the "Dissent Obligations") shall be
apportioned between Chauvco and CRI as follows:
(a)
CRI shall pay that portion of the Dissent Obligations equal to
the result determined by applying the following formula:
Fair market value of the Gabon Securities
determined in accordance with
Section 2.3 X the Currency Exchange Rate
- ---------------------------------------------(US Co Stock Price
X
(the total number of
X the Currency
Chauvco Common Shares
Exchange Rate)
outstanding on the
Effective Date X the
Exchange Ratio)
X
Total Dissent Obligations
(b)
Chauvco shall pay the remaining portion of the Dissent
Obligations.
ARTICLE 4
CERTIFICATES, CASH PAYMENT AND
FRACTIONAL SHARES
4.1
Delivery of Certificates and Cash Payment. At or promptly after the
Effective Time, US Co Sub shall deposit with the Depositary, for the benefit
of the holders of Chauvco Common Shares and Chauvco Options transferred
pursuant to the Arrangement, the Certificates and Cash Payment, if any, to
which each such holder is entitled pursuant to the Arrangement. Upon surrender
to the Depositary:
(a)
in the case of holders of Chauvco Common Shares, for
cancellation of a certificate which immediately prior to the Effective Time
represented outstanding Chauvco Common Shares, together with a duly completed
Letter of Transmittal and Election Form; and
(b)
in the case of Optionholders of a duly completed Option Letter
of Transmittal and Election Form and, if applicable, the Option Payment;
and, in either case, of such additional documents and instruments as the
Depositary may reasonably require, each such holder shall be entitled to
receive, and the Depositary shall forthwith deliver to each such holder, the
Certificates and the Cash Payment to which such holder has the right to receive
pursuant to the Arrangement (together with any dividends or distributions with
respect to the Exchangeable Shares, US Co Common Stock or CRI Shares, as
applicable, pursuant to Section 4.2 and any cash in lieu of fractional shares
pursuant to Section 4.3), and any certificates so surrendered shall forthwith
be cancelled. In the event of a transfer of ownership of Chauvco Common Shares
10
-10which is not registered in the transfer records of Chauvco, the Certificates
may be issued and the Cash Payment, if any, may be paid and delivered to a
transferee if the certificate representing such Chauvco Common Shares is
presented to the Depositary, accompanied by all documents required to evidence
and effect such transfer. Until surrendered as contemplated by this Section
4.1, each certificate which immediately prior to the Effective Time represented
outstanding Chauvco Common Shares and the Chauvco Options that were transferred
pursuant to the Arrangement shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender (a) the
Certificates and the Cash Payment, if any, to which the holder of Chauvco
Common Shares or Chauvco Options has the right to receive pursuant to the
Arrangement, (b) a cash payment in lieu of any fractional shares as
contemplated by Section 4.3 and (c) any dividends or distributions with a
record date after the Effective Time theretofore paid or payable with respect
to the Exchangeable Shares, US Co Common Stock and CRI Shares, as applicable,
as contemplated by Section 4.2. No interest will be paid from or after the
Effective Date in respect of the Cash Payment.
4.2
Distributions Limited. No dividends or other distributions declared
or made after the Effective Time with respect to the Exchangeable Shares, US Co
Common Stock and CRI Shares, as applicable, with a record date after the
Effective Time shall be paid to the holder of any unsurrendered certificate and
who has not returned a Letter of Transmittal and Election Form which,
immediately prior to the Effective Time, represented outstanding Chauvco Common
Shares or to any Optionholder who has not returned an Option Letter of
Transmittal and Election Form, duly completed and, if applicable, paid the
Option Payment pursuant to Section 2.1(e), and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 4.3,
(and no interest will be earned or payable on these proceeds) unless and until
such certificate and Letter of Transmittal and Election Form or Option Letter
of Transmittal and Election Form and Option Payment, if applicable, shall be
received by the Depositary in accordance with Section 4.1. Subject to
applicable law and to Section 4.5, at the time of such surrender of any such
certificate and Letter of Transmittal and Election Form or Option Letter of
Transmittal and Election Form and Option Payment, if applicable, (or, in the
case of clause (c) below, at the appropriate payment date), there shall be paid
to the record holder of such certificate or to the applicable Optionholder
without interest, (a) the amount of any cash payable in lieu of fractional
shares to which such holder is entitled pursuant to Section 4.3, (b) the amount
of dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to the Exchangeable Shares, US Co Common Stock
and CRI Shares, as applicable, and (c) the amount of dividends or other
distributions with a record date after the Effective Time but prior to
surrender and a payment date subsequent to surrender payable with respect to
the Exchangeable Shares, US Co Common Stock and CRI Shares, as applicable.
4.3
No Fractional Shares. No fractional Exchangeable Shares or shares of
US Co Common Stock shall be issued upon the surrender for transfer of
certificates and Letter of Transmittal and Election Form or upon delivery of an
Option Letter of Transmittal and Election Form and Option Payment, if
applicable, pursuant to Section 4.1 and such fractional interests shall not
entitle the owner thereof to vote or to exercise any rights as a security
holder of Chauvco, US Co or US Co Sub. In lieu of any such fractional
securities, each person entitled to a fractional interest in an Exchangeable
Share or share of US Co Common Stock will receive an amount of cash (rounded to
the nearest whole cent), without interest, equal to the product of (a) such
fraction multiplied by (b) the Average Closing Price of the US Co Common Stock,
such amount to be provided to the Depositary by US Co Sub upon request.
11
-114.4
Lost Certificates. If any certificate which immediately prior to the
Effective Time represented outstanding Chauvco Common Shares that were
transferred pursuant to Section 2.1 has been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming such certificate
to be lost, stolen or destroyed, the Depositary will issue and deliver in
exchange for such lost, stolen or destroyed certificate, the Certificates and
Cash Payment, if any, to which the holder of such certificate is entitled
pursuant to the Arrangement (and any dividends or distributions with respect
thereto and any cash pursuant to Section 4.3) deliverable in respect thereof as
determined in accordance with Section 2.1. The person who is entitled to
receive such Certificates and Cash Payment, if any, and other payments shall,
as a condition precedent to the receipt thereof, give a bond satisfactory to US
Co Sub and US Co Sub's transfer agent (the "Transfer Agent"), as the case may
be, in such form as US Co Sub may direct or otherwise indemnify US Co Sub in a
manner satisfactory to US Co Sub and the Transfer Agent against any claim that
may be made against US Co Sub or the Transfer Agent with respect to the
certificate alleged to have been lost, stolen or destroyed.
4.5
Extinguishment of Rights. Any certificate which immediately prior to
the Effective Time represented outstanding Chauvco Common Shares that were
transferred pursuant to Section 2.1 and has not been deposited, and any Chauvco
Options with respect to which an Option Letter of Transmittal and Election Form
and the Option Payment, if applicable, has not been deposited or paid, in each
case with all other instruments required by Section 4.1, on or prior to the
tenth anniversary of the Effective Date shall cease to represent a claim or
interest of any kind or nature as a shareholder of Chauvco or an Optionholder.
On such date, the consideration and other payments to which the former
registered holder of the certificate or Optionholder referred to in the
preceding sentence was ultimately entitled shall be deemed to have been
surrendered to US Co together with all entitlements to dividends, distributions
and interest thereon held for such former registered holder for no
consideration.
ARTICLE 5
CERTAIN RIGHTS OF US CO TO ACQUIRE EXCHANGEABLE SHARES
5.1
US Co Liquidation Call Right.
(a)
US Co shall have the overriding right (the "Liquidation Call
Right"), in the event of and notwithstanding the proposed liquidation,
dissolution or winding-up of US Co Sub pursuant to Article 5 of the
Exchangeable Share Provisions, to purchase from all but not less than all of
the holders (other than US Co and any Subsidiary thereof) of Exchangeable
Shares on the Liquidation Date all but not less than all of the Exchangeable
Shares held by each such holder on payment by US Co to the holder of the
Exchangeable Share Price applicable on the last Business Day prior to the
Liquidation Date (the "Liquidation Call Purchase Price"). In the event of the
exercise of the Liquidation Call Right by US Co, each holder shall be obligated
to sell all the Exchangeable Shares held by the holder to US Co on the
Liquidation Date on payment by US Co to the holder of the Liquidation Call
Purchase Price for each such share.
(b)
To exercise the Liquidation Call Right, US Co must notify US
Co Sub's Transfer Agent in writing, as agent for the holders of Exchangeable
Shares, and US Co Sub of US Co's intention to exercise such right at least 55
days before the Liquidation Date in the case of a voluntary liquidation,
dissolution or winding-up of US Co Sub and at least five Business Days before
the
12
-12Liquidation Date in the case of an involuntary liquidation, dissolution or
winding-up of US Co Sub. The Transfer Agent will notify the holders of
Exchangeable Shares as to whether or not US Co has exercised the Liquidation
Call Right forthwith after the expiry of the date by which the same may be
exercised by US Co. If US Co exercises the Liquidation Call Right, on the
Liquidation Date US Co will purchase and the holders will sell all of the
Exchangeable Shares then outstanding for a price per share equal to the
Liquidation Call Purchase Price.
(c)
For the purposes of completing the purchase of the
Exchangeable Shares pursuant to the Liquidation Call Right, US Co shall deposit
with the Transfer Agent, on or before the Liquidation Date, the Exchangeable
Share Consideration representing the total Liquidation Call Purchase Price.
Provided that such Exchangeable Share Consideration has been so deposited with
the Transfer Agent, on and after the Liquidation Date the rights of each holder
of Exchangeable Shares will be limited to receiving such holder's proportionate
part of the total Liquidation Call Purchase Price payable by US Co without
interest upon presentation and surrender by the holder of certificates
representing the Exchangeable Shares held by such holder and the holder shall
on and after the Liquidation Date be considered and deemed for all purposes to
be the holder of the US Co Common Stock delivered to such holder. Upon
surrender to the Transfer Agent of a certificate or certificates representing
Exchangeable Shares, together with such other documents and instruments as may
be required to effect a transfer of Exchangeable Shares under applicable law
and such additional documents and instruments as the Transfer Agent may
reasonably require, the holder of such surrendered certificate or certificates
shall be entitled to receive in exchange therefor, and the Transfer Agent on
behalf of US Co shall deliver to such holder, the Exchangeable Share
Consideration to which the holder is entitled. If US Co does not exercise the
Liquidation Call Right in the manner described above, on the Liquidation Date
the holders of the Exchangeable Shares will be entitled to receive in exchange
therefor the liquidation price otherwise payable by US Co Sub in connection
with the liquidation, dissolution or winding-up of US Co Sub pursuant to
Article 5 of the Exchangeable Share Provisions. Notwithstanding the foregoing,
until such Exchangeable Share Consideration is delivered to the holder, the
holder shall be deemed to still be a holder of Exchangeable Shares for purposes
of all voting rights with respect thereto under the Voting and Exchange Trust
Agreement.
5.2
US Co Redemption Call Right.
(a)
US Co shall have the overriding right (the "Redemption Call
Right"), notwithstanding the proposed redemption of the Exchangeable Shares by
US Co Sub pursuant to Article 7 of the Exchangeable Share Provisions, to
purchase from all but not less than all of the holders (other than US Co or any
Subsidiary thereof) of Exchangeable Shares on the Automatic Redemption Date all
but not less than all of the Exchangeable Shares held by each such holder on
payment by US Co to the holder of the Exchangeable Share Price applicable on
the last Business Day prior to the Automatic Redemption Date (the "Redemption
Call Purchase Price"). In the event of the exercise of the Redemption Call
Right by US Co, each holder shall be obligated to sell all the Exchangeable
Shares held by the holder to US Co on the Automatic Redemption Date on payment
by US Co to the holder of the Redemption Call Purchase Price for each such
share.
(b)
To exercise the Redemption Call Right, US Co must notify the
Transfer Agent in writing, as agent for the holders of Exchangeable Shares, and
US Co Sub of US Co's intention to exercise such right at least 125 days before
the Automatic Redemption Date. The Transfer Agent will notify the holders of
the Exchangeable Shares as to whether or not US Co has exercised the
13
-13Redemption Call Right forthwith after the date by which the same may be
exercised by US Co. If US Co exercises the Redemption Call Right, on the
Automatic Redemption Date US Co will purchase and the holders will sell all of
the Exchangeable Shares then outstanding for a price per share equal to the
Redemption Call Purchase Price.
(c)
For the purposes of completing the purchase of the
Exchangeable Shares pursuant to the Redemption Call Right, US Co shall deposit
with the Transfer Agent, on or before the Automatic Redemption Date, the
Exchangeable Share Consideration representing the total Redemption Call
Purchase Price. Provided that such Exchangeable Share Consideration has been
so deposited with the Transfer Agent, on and after the Automatic Redemption
Date the rights of each holder of Exchangeable Shares will be limited to
receiving such holder's proportionate part of the total Redemption Call
Purchase Price payable by US Co without interest upon presentation and
surrender by the holder of certificates representing the Exchangeable Shares
held by such holder and the holder shall on and after the Automatic Redemption
Date be considered and deemed for all purposes to be the holder of the US Co
Common Stock delivered to such holder. Upon surrender to the Transfer Agent of
a certificate or certificates representing Exchangeable Shares, together with
such other documents and instruments as may be required to effect a transfer of
Exchangeable Shares under applicable law and such additional documents and
instruments as the Transfer Agent may reasonably require, the holder of such
surrendered certificate or certificates shall be entitled to receive in
exchange therefor, and the Transfer Agent on behalf of US Co shall deliver to
such holder, the Exchangeable Share Consideration to which the holder is
entitled. If US Co does not exercise the Redemption Call Right in the manner
described above, on the Automatic Redemption Date the holders of the
Exchangeable Shares will be entitled to receive in exchange therefor the
redemption price otherwise payable by US Co Sub in connection with the
redemption of the Exchangeable Shares pursuant to Article 7 of the Exchangeable
Share Provisions. Notwithstanding the foregoing, until such Exchangeable Share
Consideration is delivered to the holder, the holder shall be deemed to still
be a holder of Exchangeable Shares for purposes of all voting rights with
respect thereto under the Voting and Exchange Trust Agreement.
ARTICLE 6
AMENDMENT
6.1
Plan of Arrangement Amendment. Chauvco reserves the right to amend,
modify and/or supplement this Plan of Arrangement at any time and from time to
time provided that any such amendment, modification, or supplement must be
contained in a written document that is (a) agreed to by US Co, (b) filed with
the Court and, if made following the Meeting, approved by the Court and (c)
communicated to holders of Chauvco Common Shares in the manner required by the
Court (if so required).
Any amendment, modification or supplement to this Plan of Arrangement
may be proposed by Chauvco at any time prior to or at the Meeting (provided
that US Co shall have consented thereto) with or without any other prior notice
or communication, and if so proposed and accepted by the persons voting at the
Meeting (other than as may be required under the Court's interim order), shall
become part of this Plan of Arrangement for all purposes.
Any amendment, modification or supplement to this Plan of Arrangement
that is approved by the Court following the Meeting shall be effective only (a)
if it is consented to by Chauvco (b) if it is consented to by US Co and (c) if
required by the Court or applicable law, it is consented to by the holders of
the Exchangeable Shares.
1
EXHIBIT 2.3
SUPPORT AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 18th day of December, 1997,
BETWEEN:
PIONEER NATURAL RESOURCES COMPANY, a corporation incorporated
under the laws of the State of Delaware and having its head
and principal office at Irving, Texas (hereinafter referred to
as "US Co")
OF THE FIRST PART,
- and PIONEER NATURAL RESOURCES (CANADA) LTD., a corporation
continued under the laws of the Province of Alberta and having
its head and principal office at Calgary, Alberta (hereinafter
referred to as "US Co Sub")
OF THE SECOND PART.
WHEREAS pursuant to a combination agreement dated as of September 3,
1997, by and between US Co and Chauvco Resources Ltd. ("Chauvco") (such
agreement as it may be amended or restated is hereinafter referred to as the
"Combination Agreement"), the parties agreed that on the Effective Date (as
defined in the Combination Agreement), US Co and US Co Sub would execute and
deliver a Support Agreement containing the terms and conditions set forth in
Exhibit B to the Combination Agreement together with such other terms and
conditions as may be agreed to by the parties to the Combination Agreement
acting reasonably;
AND WHEREAS pursuant to an arrangement (the "Arrangement") effected by
Articles of Arrangement dated December 18, 1997 filed pursuant to the Business
Corporations Act (Alberta) certain of the issued and outstanding common shares
of Chauvco ("Chauvco Common Shares") were exchanged for, among other things,
issued and outstanding Exchangeable Shares of US Co Sub (the "Exchangeable
Shares");
AND WHEREAS the Articles of US Co Sub set forth the rights,
privileges, restrictions and conditions (collectively, the "Exchangeable Share
Provisions") attaching to the Exchangeable Shares;
AND WHEREAS the parties hereto desire to make appropriate provision
and to establish a procedure whereby US Co will take certain actions and make
certain payments and deliveries necessary to ensure that US Co Sub will be able
to make certain payments and to deliver or cause
2
- 2 to be delivered shares of US Co Common Stock in satisfaction of the obligations
of US Co Sub under the Exchangeable Share Provisions with respect to the
payment and satisfaction of dividends, Liquidation Amounts, Retraction Prices
and Redemption Prices, all in accordance with the Exchangeable Share
Provisions;
NOW THEREFORE in consideration of the respective covenants and
agreements provided in this Agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
1.
DEFINITIONS AND INTERPRETATION
(a)
Defined Terms. Each term denoted herein by initial capital
letters and not otherwise defined herein shall have the
meaning attributed thereto in the Exchangeable Share
Provisions, unless the context requires otherwise.
(b)
Interpretation Not Affected by Headings, etc. The division of
this Agreement into articles, sections and paragraphs and the
insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation of
this Agreement.
(c)
Number, Gender, etc. Words importing the singular number only
shall include the plural and vice versa. Words importing the
use of any gender shall include all genders.
(d)
Date for any Action. If any date on which any action is
required to be taken under this Agreement is not a Business
Day, such action shall be required to be taken on the next
succeeding Business Day.
2.
COVENANTS OF US CO AND US CO SUB
(a)
Covenants of US Co Regarding Exchangeable Shares.
any Exchangeable Shares are outstanding, US Co will:
So long as
(i)
not declare or pay any dividend on US Co Common Stock
unless (A) US Co Sub will have sufficient assets,
funds and other property available to enable the due
declaration and the due and punctual payment in
accordance with applicable law of an equivalent
dividend on the Exchangeable Shares and (B) US Co Sub
shall simultaneously declare or pay, as the case may
be, an equivalent dividend on the Exchangeable
Shares, in each case in accordance with the
Exchangeable Share Provisions;
(ii)
advise US Co Sub sufficiently in advance of the
declaration by US Co of any dividend on US Co Common
Stock and take all such other actions as are
necessary, in cooperation with US Co Sub, to ensure
that the respective declaration date, record date and
payment date for a dividend on the Exchangeable
Shares shall be the same as the record date,
declaration date and payment date for the
corresponding dividend on US Co Common Stock and such
dividend on the Exchangeable Shares shall correspond
with any
3
- 3 requirement of the principal stock exchange on which
the Exchangeable Shares are listed;
(iii)
ensure that the record date for any dividend declared
on US Co Common Stock is not less than 10 calendar
days after the declaration date for such dividend;
(iv)
take all such actions and do all such things as are
necessary or desirable to enable and permit US Co
Sub, in accordance with applicable law, to pay and
otherwise perform its obligations with respect to the
satisfaction of the Liquidation Amount in respect of
each issued and outstanding Exchangeable Share upon
the liquidation, dissolution or winding-up of US Co
Sub, including without limitation all such actions
and all such things as are necessary or desirable to
enable and permit US Co Sub to cause to be delivered
shares of US Co Common Stock to the holders of
Exchangeable Shares in accordance with the provisions
of Article 5 of the Exchangeable Share Provisions;
(v)
take all such actions and do all such things as are
necessary or desirable to enable and permit US Co
Sub, in accordance with applicable law, to pay and
otherwise perform its obligations with respect to the
satisfaction of the Retraction Price and the
Redemption Price, including without limitation all
such actions and all such things as are necessary or
desirable to enable and permit US Co Sub to cause to
be delivered shares of US Co Common Stock to the
holders of Exchangeable Shares, upon the retraction
or redemption of the Exchangeable Shares in
accordance with the provisions of Article 6 or
Article 7 of the Exchangeable Share Provisions, as
the case may be; and
(vi)
not exercise its vote as a direct or indirect
shareholder to initiate the voluntary liquidation,
dissolution or winding-up of US Co Sub nor take any
action or omit to take any action that is designed to
result in the liquidation, dissolution or winding-up
of US Co Sub.
(b)
Segregation of Funds. US Co will cause US Co Sub to deposit a
sufficient amount of funds in a separate account and segregate
a sufficient amount of such assets and other property as is
necessary to enable US Co Sub to pay or otherwise satisfy the
applicable dividends, Liquidation Amount, Retraction Price or
Redemption Price, in each case for the benefit of holders from
time to time of the Exchangeable Shares, and to use such
funds, assets and other property so segregated exclusively for
the payment of dividends and the payment or other satisfaction
of the Liquidation Amount, the Retraction Price or the
Redemption Price, as applicable, net of any corresponding
withholding tax obligations and for the remittance of such
withholding tax obligations.
(c)
Reservation of Shares of US Co Common Stock. US Co hereby
represents, warrants and covenants that it has irrevocably
reserved for issuance and will at all times keep available,
free from pre-emptive and other rights, out of its authorized
and unissued capital stock such number of shares of US Co
Common Stock (or other shares or
4
- 4 securities into which US Co Common Stock may be reclassified
or changed as contemplated by section 2(g) hereof) (i) as is
equal to the sum of (A) the number of Exchangeable Shares
issued and outstanding from time to time and (B) the number of
Exchangeable Shares issuable upon the exercise of all rights
to acquire Exchangeable Shares outstanding from time to time
and (ii) as are now and may hereafter be required to enable
and permit US Co Sub to meet its obligations hereunder, under
the Voting and Exchange Trust Agreement, under the
Exchangeable Share Provisions and under any other security or
commitment pursuant to the Arrangement with respect to which
US Co may now or hereafter be required to issue shares of US
Co Common Stock.
(d)
Notification of Certain Events. In order to assist US Co to
comply with its obligations hereunder, US Co Sub will give US
Co notice of each of the following events at the time set
forth below:
(i)
in the event of any determination by the Board of
Directors of US Co Sub to institute voluntary
liquidation, dissolution or winding-up proceedings
with respect to US Co Sub or to effect any other
distribution of the assets of US Co Sub among its
shareholders for the purpose of winding-up its
affairs, at least 60 days prior to the proposed
effective date of such liquidation, dissolution,
winding-up or other distribution;
(ii)
immediately, upon the earlier of (A) receipt by US Co
Sub of notice of, and (B) US Co Sub otherwise
becoming aware of, any threatened or instituted
claim, suit, petition or other proceedings with
respect to the involuntary liquidation, dissolution
or winding-up of US Co Sub or to effect any other
distribution of the assets of US Co Sub among its
shareholders for the purpose of winding-up its
affairs;
(iii)
immediately, upon receipt by US Co Sub of a
Retraction Request (as defined in the Exchangeable
Share Provisions);
(iv)
at least 130 days prior to any accelerated Automatic
Redemption Date determined by the Board of Directors
of US Co Sub in accordance with the Exchangeable
Share Provisions; and
(v)
as soon as practicable upon the issuance by US Co Sub
of any Exchangeable Shares or rights to acquire
Exchangeable Shares.
(e)
Delivery of Shares of US Co Common Stock. In furtherance of
its obligations hereunder, upon notice of any event which
requires US Co Sub to cause to be delivered shares of US Co
Common Stock to any holder of Exchangeable Shares, US Co shall
forthwith issue and deliver the requisite shares of US Co
Common Stock to or to the order of the former holder of the
surrendered Exchangeable Shares, as US Co Sub shall direct.
All such shares of US Co Common Stock shall be duly issued as
fully paid and non- assessable and shall be free and clear of
any lien, claim, encumbrance, security interest or adverse
claim.
5
- 5 (f)
Qualification of Shares of US Co Common Stock. US Co
covenants that if any shares of US Co Common Stock (or other
shares or securities into which US Co Common Stock may be
reclassified or changed as contemplated by section 2(g)
hereof) to be issued and delivered hereunder, including for
greater certainty, pursuant to the Exchangeable Share
Provisions, or pursuant to the Exchange Right or the Automatic
Exchange Rights (both as defined in the Voting and Exchange
Trust Agreement) require registration or qualification with or
approval of or the filing of any document including any
prospectus or similar document or the taking of any proceeding
with or the obtaining of any order, ruling or consent from any
governmental or regulatory authority under any Canadian or
United States federal, provincial or state law or regulation
or pursuant to the rules and regulations of any regulatory
authority or the fulfillment of any other legal requirement
(collectively, the "Applicable Laws") before such shares (or
other shares or securities into which US Co Common Stock may
be reclassified or changed as contemplated by section 2(g)
hereof) may be issued and delivered by US Co to the initial
holder thereof (other than US Co Sub) or in order that such
shares may be freely traded thereafter (other than any
restrictions on transfer by reason of a holder being a
"control person" of US Co for purposes of Canadian federal or
provincial securities law or an "affiliate" of US Co or, prior
to the Effective Date, of Chauvco for purposes of United
States federal or state securities law), US Co will in good
faith expeditiously take all such actions and do all such
things as are necessary to cause such shares of US Co Common
Stock (or other shares or securities into which US Co Common
Stock may be reclassified or changed as contemplated by
section 2(g) hereof) to be and remain duly registered,
qualified or approved. US Co represents and warrants that it
has in good faith taken all actions and done all things as are
necessary under Applicable Laws as they exist on the date
hereof to cause the shares of US Co Common Stock (or other
shares or securities into which US Co Common Stock may be
reclassified or changed as contemplated by section 2(g)
hereof) to be issued and delivered hereunder, including for
greater certainty, pursuant to the Exchangeable Share
Provisions, or pursuant to the Exchange Right and the
Automatic Exchange Right to be freely tradeable thereafter
(other than restrictions on transfer by reason of a holder
being a "control person" of US Co for the purposes of Canadian
federal and provincial securities law or an "affiliate" of US
Co or, prior to the Effective Date, of Chauvco for the
purposes of United States federal or state securities law).
US Co will in good faith expeditiously take all such actions
and do all such things as are necessary to cause all shares of
US Co Common Stock (or other shares or other securities into
which US Co Common Stock may be reclassified or changed as
contemplated by section 2(g) hereof) to be delivered
hereunder, including for greater certainty, pursuant to the
Exchangeable Share Provisions, or pursuant to the Exchange
Right or the Automatic Exchange Rights to be listed, quoted or
posted for trading on all stock exchanges and quotation
systems on which such shares are listed, quoted or posted for
trading at such time. US Co will in good faith expeditiously
take all such action and do all such things as are necessary
to cause all Exchangeable Shares to be and to continue to be
listed and posted for trading on The Toronto Stock Exchange.
6
- 6 (g)
Equivalence.
(i)
US Co will not without the prior approval of US Co
Sub and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section
9.2 of the Exchangeable Share Provisions:
(A)
issue or distribute shares of US Co Common
Stock (or securities exchangeable for or
convertible into or carrying rights to
acquire shares of US Co Common Stock) to the
holders of all or substantially all of the
then outstanding US Co Common Stock by way of
stock dividend or other distribution; or
(B)
issue or distribute rights, options or
warrants to the holders of all or
substantially all of the then outstanding
shares of US Co Common Stock entitling them
to subscribe for or to purchase shares of US
Co Common Stock (or securities exchangeable
for or convertible into or carrying rights to
acquire shares of US Co Common Stock); or
(C)
issue or distribute to the holders of all or
substantially all of the then outstanding
shares of US Co Common Stock (I) shares or
securities of US Co of any class other than
US Co Common Stock (other than shares
convertible into or exchangeable for or
carrying rights to acquire shares of US Co
Common Stock), (II) rights, options or
warrants other than those referred to in
subsection 2(g)(i)(B) above, (III) evidences
of indebtedness of US Co or (IV) assets of US
Co;
unless
(D)
US Co Sub is permitted under applicable law
to issue or distribute the economic
equivalent on a per share basis of such
rights, options, securities, shares,
evidences of indebtedness or other assets to
holders of the Exchangeable Shares; and
(E)
US Co Sub shall issue or distribute the
economic equivalent on a per share basis of
such rights, options, securities, shares,
evidences of indebtedness or other assets
simultaneously to holders of the Exchangeable
Shares.
(ii)
US Co will not without the prior approval of US Co
Sub and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section
9.2 of the Exchangeable Share Provisions:
(A)
subdivide, divide or change the then
outstanding shares of US Co Common Stock into
a greater number of shares of US Co Common
Stock; or
(B)
reduce, combine or consolidate or change the
then outstanding shares of US Co Common Stock
into a lesser number of shares of US Co
Common Stock; or
7
- 7 (C)
reclassify or otherwise change the shares of
US Co Common Stock or effect an amalgamation,
merger, reorganization or other transaction
affecting the shares of US Co Common Stock;
unless (I) US Co Sub is permitted under applicable
law to simultaneously make the same or an equivalent
change to, or in the rights of holders of, the
Exchangeable Shares and (II) the same or an
equivalent change is made to, or in the rights of the
holders of, the Exchangeable Shares.
(iii)
US Co will ensure that the record date for any event
referred to in section 2(g)(i) or 2(g)(ii) above, or
(if no record date is applicable for such event) the
effective date for any such event, is not less than
10 calendar days after the date on which such event
is declared or announced by US Co (with simultaneous
notice thereof to be given by US Co to US Co Sub).
(h)
Tender Offers, etc. In the event that a tender offer, share
exchange offer, issuer bid, take-over bid or similar
transaction with respect to US Co Common Stock (an "Offer") is
proposed by US Co or is proposed to US Co or its shareholders
and is recommended by the Board of Directors of US Co, or is
otherwise effected or to be effected with the consent or
approval of the Board of Directors of US Co, US Co shall take
all such actions and do all such things as are necessary or
desirable to enable and permit holders of Exchangeable Shares
to participate in such Offer to the same extent and on an
equivalent basis as the holders of shares of US Co Common
Stock, without discrimination, including, without limiting the
generality of the foregoing, US Co will use its good faith
efforts expeditiously to (and shall, in the case of a
transaction proposed by US Co or where US Co is a participant
in the negotiation thereof) ensure that holders of
Exchangeable Shares may participate in all such Offers without
being required to retract Exchangeable Shares as against US Co
Sub (or, if so required, to ensure that any such retraction
shall be effective only upon, and shall be conditional upon,
the closing of the Offer and only to the extent necessary to
tender or deposit to the Offer).
(i)
Ownership of Outstanding Shares. Without the prior approval
of US Co Sub and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section 9.2 of
the Exchangeable Share Provisions, US Co covenants and agrees
in favour of US Co Sub that, as long as any outstanding
Exchangeable Shares are owned by any person or entity other
than US Co or any of its Subsidiaries, US Co will be and
remain the direct or indirect beneficial owner of all issued
and outstanding shares in the capital of US Co Sub and all
outstanding securities of US Co Sub carrying or otherwise
entitled to voting rights in any circumstances, in each case
other than the Exchangeable Shares.
(j)
US Co Not to Vote Exchangeable Shares. US Co covenants and
agrees that it will appoint and cause to be appointed
proxyholders with respect to all Exchangeable Shares held by
US Co and its Subsidiaries for the sole purpose of attending
each meeting of holders of Exchangeable Shares in order to be
counted as part of the quorum for each such meeting. US Co
further covenants and agrees that it will not, and will cause
its Subsidiaries not to, exercise any voting rights which may
be
8
- 8 exercisable by holders of Exchangeable Shares from time to
time pursuant to the Exchangeable Share Provisions or pursuant
to the provisions of any corporate statute by which US Co Sub
may be governed with respect to any Exchangeable Shares held
by it or by its Subsidiaries in respect of any matter
considered at any meeting of holders of Exchangeable Shares.
(k)
Due Performance. On and after the Effective Date, US Co shall
duly and timely perform all of its obligations provided for in
connection with the Plan of Arrangement including any
obligations that may arise upon the exercise of US Co's rights
under the Exchangeable Share Provisions.
(l)
Appointment to US Co Board. US Co shall cause James R.
Baroffio to be appointed as a director of US Co on or prior to
the date hereof as a Class II Director to serve until US Co's
1999 annual stockholders' meeting; Guy J. Turcotte to be
nominated as a director of US Co for election at US Co's 1998
annual stockholders' meeting and Mr. Baroffio to be nominated
for re-election at US Co's 1999 annual stockholders' meeting.
US Co shall put forth Messrs. Turcotte and Baroffio for
election to its board of directors as aforesaid and will cause
to be solicited proxies for its stockholder's meetings in
favour of the election of such individual.
(m)
Notwithstanding the general restriction in section 4.1(d) of
the share provisions of the Exchangeable Shares, US Co Sub
shall be entitled, for a period of 60 days following the
initial issuance of Exchangeable Shares, to issue Exchangeable
Shares, provided that concurrent with any such issuance it
acquires directly or indirectly an equivalent number of
Exchangeable Shares.
3.
GENERAL
(a)
Term. This Agreement shall come into force and be effective
as of the date hereof and shall terminate and be of no further
force and effect at such time as no Exchangeable Shares (or
securities or rights convertible into or exchangeable for or
carrying rights to acquire securities Exchangeable Shares) are
held by any party other than US Co and any of its
Subsidiaries.
(b)
Changes in Capital of US Co and US Co Sub. Notwithstanding
the provisions of section 3(d) hereof, at all times after the
occurrence of any event effected pursuant to section 2(g) or
2(h) hereof, as a result of which either US Co Common Stock or
the Exchangeable Shares or both are in any way changed, this
Agreement shall forthwith be amended and modified as necessary
in order that it shall apply with full force and effect,
mutatis mutandis, to all new securities into which US Co
Common Stock or the Exchangeable Shares or both are so changed
and the parties hereto shall execute and deliver an agreement
in writing giving effect to and evidencing such necessary
amendments and modifications.
(c)
Severability. If any provision of this Agreement is held to
be invalid, illegal or unenforceable, the validity, legality
or enforceability of the remainder of this Agreement shall not
in any way be affected or impaired thereby and this Agreement
9
- 9 shall be carried out as nearly as possible in accordance with
its original terms and conditions.
(d)
Amendments, Modifications, etc. This Agreement may not be
amended or modified except by an agreement in writing executed
by US Co Sub and US Co and approved by the holders of the
Exchangeable Shares in accordance with Section 9.2 of the
Exchangeable Share Provisions.
(e)
Ministerial Amendments. Notwithstanding the provisions of
section 3(d), the parties to this Agreement may in writing, at
any time and from time to time, without the approval of the
holders of the Exchangeable Shares, amend or modify this
Agreement for the purposes of:
(i)
adding to the covenants of either or both parties for
the protection of the holders of the Exchangeable
Shares;
(ii)
making such amendments or modifications not
inconsistent with this Agreement as may be necessary
or desirable with respect to matters or questions
which, in the opinion of the board of directors of
each of US Co Sub and US Co, it may be expedient to
make, provided that each such boards of directors
shall be of the opinion that such amendments or
modifications will not be prejudicial to the
interests of the holders of the Exchangeable Shares;
or
(iii)
making such changes or corrections which, on the
advice of counsel to US Co Sub and US Co, are
required for the purpose of curing or correcting any
ambiguity or defect or inconsistent provision or
clerical omission or mistake or manifest error,
provided that the boards of directors of each of US
Co Sub and US Co shall be of the opinion that such
changes or corrections will not be prejudicial to the
interests of the holders of the Exchangeable Shares.
(f)
Meeting to Consider Amendments. US Co Sub, at the request of
US Co, shall call a meeting or meetings of the holders of the
Exchangeable Shares for the purpose of considering any
proposed amendment or modification requiring approval of such
shareholders. Any such meeting or meetings shall be called
and held in accordance with the by-laws of US Co Sub, the
Exchangeable Share Provisions and all applicable laws.
(g)
Amendments Only in Writing. No amendment to or modification
or waiver of any of the provisions of this Agreement otherwise
permitted hereunder shall be effective unless made in writing
and signed by both of the parties hereto.
(h)
Inurement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and the holders, from time
to time, of Exchangeable Shares and each of their respective
heirs, successors and assigns.
(i)
Notices to Parties. All notices and other communications
between the parties shall be in writing and shall be deemed to
have been given if delivered personally or by
10
- 10 confirmed telecopy to the parties at the following addresses
(or at such other address for either such party as shall be
specified in like notice):
(i)
if to US Co at:
Pioneer Natural Resources Company
1400 Williams Square West
5205 N. O'Connor Blvd.
Irving, Texas 75039-3746
Attention:
President
Telecopy:
(972) 402-7057
(ii)
if to US Co Sub at:
Pioneer Natural Resources (Canada) Ltd.
2900, 255 - 5th Avenue S.W.
Calgary, Alberta
T2P 3G6
Attention:
President
Telecopy:
(403) 231-3247
Any notice or other communication given personally shall be
deemed to have been given and received upon delivery thereof
and if given by telecopy shall be deemed to have been given
and received on the date of confirmed receipt thereof unless
such day is not a Business Day in which case it shall be
deemed to have been given and received upon the immediately
following Business Day.
(j)
Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, and all of which
taken together shall constitute one and the same instrument.
(k)
Jurisdiction. This Agreement shall be construed and enforced
in accordance with the laws of the Province of Alberta and the
laws of Canada applicable therein.
(l)
Attornment. US Co agrees that any action or proceeding
arising out of or relating to this Agreement may be instituted
in the courts of Alberta, waives any objection which it may
have now or hereafter to the venue of any such action or
proceeding, irrevocably submits to the jurisdiction of the
said courts in any such action or proceeding, agrees to be
bound by any judgment of the said courts and not to seek, and
hereby waives, any review of the merits of any such judgment
by the courts of any other jurisdiction and hereby appoints US
Co Sub at its registered office in the Province of Alberta as
US Co's attorney for service of process.
11
- 11 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
PIONEER NATURAL
RESOURCES COMPANY
Per:
--------------------------Per:
--------------------------PIONEER NATURAL RESOURCES
(CANADA) LTD.
Per:
--------------------------Per:
---------------------------
1
EXHIBIT 2.4
VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 18th day of December, 1997,
AMONG:
PIONEER NATURAL RESOURCES COMPANY, a corporation incorporated
under the laws of the State of Delaware and having its head
and principal office at Irving, Texas (hereinafter referred to
as "US Co")
OF THE FIRST PART,
- and PIONEER NATURAL RESOURCES (CANADA) LTD., a corporation
continued under the laws of the Province of Alberta and having
its head and principal office at Calgary, Alberta (hereinafter
referred to as "US Co Sub")
OF THE SECOND PART,
- and MONTREAL TRUST COMPANY OF CANADA, a trust company existing
under the laws of Canada (hereinafter referred to as the
"Trustee")
OF THE THIRD PART.
WHEREAS pursuant to a combination agreement dated as of September 3,
1997, by and between US Co and Chauvco Resources Ltd. ("Chauvco") (such
agreement as it may be amended or restated is hereinafter referred to as the
"Combination Agreement"), the parties agreed that on the Effective Date (as
defined in the Combination Agreement), US Co and US Co Sub would execute and
deliver a Voting and Exchange Trust Agreement containing the terms and
conditions set forth in Exhibit C to the Combination Agreement together with
such other terms and conditions as may be agreed to by the parties to the
Combination Agreement acting reasonably;
AND WHEREAS pursuant to an arrangement (the "Arrangement") effected by
Articles of Arrangement dated December 18, 1997 filed pursuant to the Business
Corporations Act (Alberta), certain of the issued and outstanding common shares
of Chauvco ("Chauvco Common Shares") were
2
- 2 exchanged for, among other things, issued and outstanding Exchangeable Shares
of US Co Sub (the "Exchangeable Shares");
AND WHEREAS the Articles of US Co Sub set forth the rights,
privileges, restrictions and conditions (collectively, the "Exchangeable Share
Provisions") attaching to the Exchangeable Shares;
AND WHEREAS US Co is to provide voting rights in US Co to each holder
(other than US Co and its Subsidiaries) from time to time of Exchangeable
Shares, such voting rights per Exchangeable Share to be equivalent to the
voting rights per share of US Co Common Stock (the "US Co Common Stock");
AND WHEREAS US Co is to grant to and in favour of the holders (other
than US Co and its Subsidiaries) from time to time of Exchangeable Shares the
right, in the circumstances set forth herein, to require US Co to purchase from
each such holder all or any part of the Exchangeable Shares held by the holder;
AND WHEREAS the parties desire to make appropriate provision and to
establish a procedure whereby voting rights in US Co shall be exercisable by
holders (other than US Co and its Subsidiaries) from time to time of
Exchangeable Shares by and through the Trustee, which will hold legal title to
one (1) share of US Co Special Preferred Voting Stock (the "US Co Special
Voting Stock") to which voting rights attach for the benefit of such holders
and whereby the rights to require US Co to purchase Exchangeable Shares from
the holders thereof (other than US Co and its Subsidiaries) shall be
exercisable by such holders from time to time of Exchangeable Shares by and
through the Trustee, which will hold legal title to such rights for the benefit
of such holders;
AND WHEREAS these recitals and any statements of fact in this
Agreement are made by US Co and US Co Sub and not by the Trustee;
NOW THEREFORE in consideration of the respective covenants and
agreements provided in this Agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
1.
DEFINITIONS AND INTERPRETATION
(a)
Definitions. In this Agreement, the following terms
shall have the following meanings:
"Aggregate Equivalent Vote Amount" means, with respect to any matter,
proposition or question on which holders of US Co Common Stock are
entitled to vote, consent or otherwise act, the product of (i) the
number of shares of Exchangeable Shares issued and outstanding and
held by Holders multiplied by (ii) the Equivalent Vote Amount.
"Arrangement" has the meaning attributed thereto in the recitals
hereto.
3
- 3 "Automatic Exchange Rights" means the benefit of the obligation of US
Co to effect the automatic exchange of shares of US Co Common Stock
for Exchangeable Shares pursuant to Section 5(1) hereof.
"Board of Directors" means the Board of Directors of US Co Sub.
"Business Day" has the meaning attributed thereto in the Exchangeable
Share Provisions.
"Equivalent Vote Amount" means, with respect to any matter,
proposition or question on which holders of US Co Common Stock are
entitled to vote, consent or otherwise act, the number of votes to
which a holder of one share of US Co Common Stock is entitled with
respect to such matter, proposition or question.
"Exchange Right" has the meaning attributed thereto in Article 5
hereof.
"Exchangeable Share Consideration" has the meaning attributed thereto
in the Exchangeable Share Provisions.
"Exchangeable Share Price" has the meaning attributed thereto in the
Exchangeable Share Provisions.
"Exchangeable Share Provisions" has the meaning attributed thereto in
the recitals hereto.
"Exchangeable Shares" has the meaning attributed thereto in the
recitals hereto.
"Holder Votes" has the meaning attributed thereto in Section 4(b)
hereof.
"Holders" means the registered holders from time to time of
Exchangeable Shares, other than US Co and its Subsidiaries.
"Insolvency Event" means the institution by US Co Sub of any
proceeding to be adjudicated a bankrupt or insolvent or to be
dissolved or wound-up, or the consent of US Co Sub to the institution
of bankruptcy, insolvency, dissolution or winding-up proceedings
against it, or the filing of a petition, answer or consent seeking
dissolution or winding-up under any bankruptcy, insolvency or
analogous laws, including without limitation the Companies' Creditors'
Arrangement Act (Canada) and the Bankruptcy and Insolvency Act
(Canada), and the failure by US Co Sub to contest in good faith any
such proceedings commenced in respect of US Co Sub within 15 days of
becoming aware thereof, or the consent by US Co Sub to the filing of
any such petition or to the appointment of a receiver, or the making
by US Co Sub of a general assignment for the benefit of creditors, or
the admission in writing by US Co Sub of its inability to pay its
debts generally as they become due, or US Co Sub not being permitted,
pursuant to liquidity or solvency requirements of applicable law, to
redeem any Retracted Shares pursuant to Section 6.6 of the
Exchangeable Share Provisions.
"Liquidation Call Right" has the meaning attributed thereto in the
Exchangeable Share Provisions.
4
- 4 -
"Liquidation Event" has the meaning attributed thereto in subsection
5(l)(ii) hereof.
"Liquidation Event Effective Date" has the meaning attributed thereto
in subsection 5(l)(iii) hereof.
"List" has the meaning attributed thereto in Section 4(f) hereof.
"Officers' Certificate" means, with respect to US Co or US Co Sub, as
the case may be, a certificate signed by any two of the Chairman of
the Board, the Vice-Chairman of the Board, the President, any
Vice-President or any other senior officer of US Co or US Co Sub, as
the case may be.
"Person" includes an individual, partnership, corporation, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative.
"Plan of Arrangement" has the meaning attributed thereto in the
Exchangeable Share Provisions.
"Redemption Call Right" has the meaning attributed thereto in the
Exchangeable Share Provisions.
"Retracted Shares" has the meaning attributed thereto in Section 5(g)
hereof.
"Retraction Call Right" has the meaning attributed thereto in the
Exchangeable Share Provisions.
"Subsidiary" has the meaning attributed thereto in the Exchangeable
Share Provisions.
"Support Agreement" means that certain support agreement made as of
even date hereof between US Co Sub and US Co.
"Trust" means the trust created by this Agreement.
"Trust Estate" means the Voting Share, any other securities, the
Exchange Right, the Automatic Exchange Rights and any money or other
property which may be held by the Trustee from time to time pursuant
to this Agreement.
"Trustee" means Montreal Trust Company of Canada and, subject to the
provisions of Article 10 hereof, includes any successor trustee or
permitted assigns.
"US Co Common Stock" has the meaning attributed thereto in the
recitals hereto.
"US Co Consent" has the meaning attributed thereto in Section 4(b)
hereof.
"US Co Meeting" has the meaning attributed thereto in Section 4(b)
hereof.
5
- 5 "US Co Special Voting Stock" has the meaning attributed thereto in the
recitals hereto.
"US Co Successor" has the meaning attributed thereto in subsection
11(a)(ii) hereof.
"Voting Rights" means the voting rights attached to the Voting Shares.
"Voting Share" means the one (1) share of US Co Special Voting Stock,
U.S. $0.01 par value, issued by US Co to and deposited with the
Trustee, which entitles the holder of record to a number of votes at
meetings of holders of US Co Common Stock equal to the Aggregate
Equivalent Vote Amount.
(b)
Interpretation Not Affected by Headings, etc. The division of
this Agreement into articles, sections and paragraphs and the
insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation of
this Agreement.
(c)
Number, Gender, etc. Words importing the singular number only
shall include the plural and vice versa. Words importing the
use of any gender shall include all genders.
(d)
Date for any Action. If any date on which any action is
required to be taken under this Agreement is not a Business
Day, such action shall be required to be taken on the next
succeeding Business Day.
2.
PURPOSE OF AGREEMENT
The purpose of this Agreement is to create the Trust for the benefit
of the Holders, as herein provided. The Trustee will hold the Voting
Share in order to enable the Trustee to exercise the Voting Rights and
will hold the Exchange Right and the Automatic Exchange Rights in
order to enable the Trustee to exercise such rights, in each case as
Trustee for and on behalf of the Holders as provided in this
Agreement.
3.
VOTING SHARE
(a)
Issuance and Ownership of the Voting Share. US Co hereby
issues to and deposits with the Trustee the Voting Share to be
hereafter held of record by the Trustee as trustee for and on
behalf of, and for the use and benefit of, the Holders and in
accordance with the provisions of this Agreement. US Co hereby
acknowledges receipt from the Trustee as the trustee for and
on behalf of the Holders of good and valuable consideration
(and the adequacy thereof) and $1 in hand paid for the
issuance of the Voting Share by US Co to the Trustee. During
the term of the Trust and subject to the terms and conditions
of this Agreement, the Trustee shall possess and be vested
with full legal ownership of the Voting Share and shall be
entitled to exercise all of the rights and powers of an owner
with respect to the Voting Share, provided that the Trustee
shall:
6
- 6 (i)
hold the Voting Share and the legal title thereto as
trustee solely for the use and benefit of the Holders
in accordance with the provisions of this Agreement;
and
(ii)
except as specifically authorized by this Agreement,
have no power or authority to sell, transfer, vote or
otherwise deal in or with the Voting Share and the
Voting Share shall not be used or disposed of by the
Trustee for any purpose other than the purposes for
which this Trust is created pursuant to this
Agreement.
(b)
Legended Share Certificates. US Co Sub will cause each
certificate representing Exchangeable Shares to bear an
appropriate legend notifying the Holders of their right to
instruct the Trustee with respect to the exercise of the
Voting Rights with respect to the Exchangeable Shares held by
a Holder.
(c)
Safe Keeping of Certificate. The certificate representing the
Voting Share shall at all times be held in safe keeping by the
Trustee or its agent.
4.
EXERCISE OF VOTING RIGHTS
(a)
Voting Rights. The Trustee, as the holder of record of the
Voting Share, shall be entitled to all of the Voting Rights,
including the right to consent to or to vote in person or by
proxy the Voting Share, on any matter, question or proposition
whatsoever that may properly come before the stockholders of
US Co at a US Co Meeting or in connection with a US Co Consent
(in each case, as hereinafter defined). The Voting Rights
shall be and remain vested in and exercised by the Trustee.
Subject to Section 7(o) hereof, the Trustee shall exercise the
Voting Rights only on the basis of instructions received
pursuant to this Article 4 from Holders entitled to instruct
the Trustee as to the voting thereof at the time at which a US
Co Consent is sought or a US Co Meeting is held. To the extent
that no instructions are received from a Holder with respect
to the Voting Rights to which such Holder is entitled, the
Trustee shall not exercise or permit the exercise of such
Holder's Vote.
(b)
Number of Votes. With respect to all meetings of stockholders
of US Co at which holders of shares of US Co Common Stock are
entitled to vote (a "US Co Meeting") and with respect to all
written consents sought by US Co from its stockholders
including the holders of shares of US Co Common Stock (a "US
Co Consent"), each Holder shall be entitled to instruct the
Trustee to cast and exercise, in the manner instructed, a
number of votes equal to the Equivalent Vote Amount for each
Exchangeable Share owned of record by such Holder on the
record date established by US Co or by applicable law for such
US Co Meeting or US Co Consent, as the case may be (the
"Holder Votes") in respect of each matter, question or
proposition to be voted on at such US Co Meeting or to be
consented to in connection with such US Co Consent.
7
- 7 (c)
Mailings to Shareholders. With respect to each US Co Meeting
and US Co Consent, the Trustee will mail or cause to be mailed
(or otherwise communicate in the same manner as US Co utilizes
in communications to holders of US Co Common Stock, subject to
the Trustee's ability to provide this method of communication
and upon being advised in writing of such method) to each of
the Holders named in the List on the same day as the initial
mailing or notice (or other communication) with respect
thereto is given by US Co to its stockholders:
(i)
a copy of such notice, together with any proxy or
information statement and related materials to be
provided to stockholders of US Co;
(ii)
a statement that such Holder is entitled to instruct
the Trustee as to the exercise of the Holder Votes
with respect to such US Co Meeting or US Co Consent,
as the case may be, or, pursuant to Section 4(g)
hereof, to attend such US Co Meeting and to exercise
personally the Holder Votes thereat;
(iii)
a statement as to the manner in which such
instructions may be given to the Trustee, including
an express indication that instructions may be given
to the Trustee to give:
(A)
a proxy to such Holder or his designee to
exercise personally the Holder Votes; or
(B)
a proxy to a designated agent or other
representative of the management of US Co to
exercise such Holder Votes;
(iv)
a statement that if no such instructions are received
from the Holder, the Holder Votes to which such
Holder is entitled will not be exercised;
(v)
a form of direction whereby the Holder may so direct
and instruct the Trustee as contemplated herein; and
(vi)
a statement of (A) the time and date by which such
instructions must be received by the Trustee in order
to be binding upon it, which in the case of a US Co
Meeting shall not be later than the close of business
on the Business Day prior to such meeting, and (B)
the method for revoking or amending such
instructions.
The materials referred to above are to be provided by US Co to
the Trustee, but shall be subject to review and comment by the
Trustee.
For the purpose of determining Holder Votes to which a Holder
is entitled in respect of any such US Co Meeting or US Co
Consent, the number of Exchangeable Shares owned of record by
the Holder shall be determined at the close of business on the
record date established by US Co or by applicable law for
purposes of determining stockholders entitled to vote at such
US Co Meeting or to give written consent in connection with
such US Co Consent. US Co will notify the Trustee in writing
of
8
- 8 any decision of the board of directors of US Co with respect
to the calling of any such US Co Meeting or the seeking of any
such US Co Consent and shall provide all necessary information
and materials to the Trustee in each case promptly and in any
event in sufficient time to enable the Trustee to perform its
obligations contemplated by this Section 4(c).
(d)
Copies of Stockholder Information. US Co will deliver to the
Trustee copies of all proxy materials (including notices of US
Co Meetings but excluding proxies to vote shares of US Co
Common Stock), information statements, reports (including
without limitation all interim and annual financial
statements) and other written communications that are to be
distributed from time to time to holders of US Co Common Stock
in sufficient quantities and in sufficient time so as to
enable the Trustee to send those materials to each Holder at
the same time as such materials are first sent to holders of
US Co Common Stock. The Trustee will mail or otherwise send to
each Holder, at the expense of US Co, copies of all such
materials (and all materials specifically directed to the
Holders or to the Trustee for the benefit of the Holders by US
Co) received by the Trustee from US Co at the same time as
such materials are first sent to holders of US Co Common
Stock. The Trustee will make copies of all such materials
available for inspection by any Holder at the Trustee's
principal office in the cities of Calgary and Toronto.
(e)
Other Materials. Immediately after receipt by US Co or any
stockholder of US Co of any material sent or given generally
to the holders of US Co Common Stock by or on behalf of a
third party, including without limitation dissident proxy and
information circulars (and related information and material)
and tender and exchange offer circulars (and related
information and material), US Co shall use its best efforts to
obtain and deliver to the Trustee copies thereof in sufficient
quantities so as to enable the Trustee to forward such
material (unless the same has been provided directly to
Holders by such third party) to each Holder as soon as
possible thereafter. As soon as practicable after receipt
thereof, the Trustee will mail or otherwise send to each
Holder, at the expense of US Co, copies of all such materials
received by the Trustee from US Co. The Trustee will also make
copies of all such materials available for inspection by any
Holder at the Trustee's principal office in the cities of
Toronto and Calgary.
(f)
List of Persons Entitled to Vote. US Co Sub shall, (i) prior
to each annual, general and special US Co Meeting or the
seeking of any US Co Consent and (ii) forthwith upon each
request made at any time by the Trustee in writing, prepare or
cause to be prepared a list (a "List") of the names and
addresses of the Holders arranged in alphabetical order and
showing the number of Exchangeable Shares held of record by
each such Holder, in each case at the close of business on the
date specified by the Trustee in such request or, in the case
of a List prepared in connection with a US Co Meeting or a US
Co Consent, at the close of business on the record date
established by US Co or pursuant to applicable law for
determining the holders of US Co Common Stock entitled to
receive notice of and/or to vote at such US Co Meeting or to
give consent in connection with such US Co Consent. Each such
List shall be delivered to the Trustee promptly after receipt
by US Co Sub of such request or the
9
- 9 record date for such meeting or seeking of consent, as the
case may be, and in any event within sufficient time as to
enable the Trustee to perform its obligations under this
Agreement. US Co agrees to give US Co Sub written notice (with
a copy to the Trustee) of the calling of any US Co Meeting or
the seeking of any US Co Consent together with the record
dates therefor, sufficiently prior to the date of the calling
of such meeting or seeking of such consent so as to enable US
Co Sub to perform its obligations under this Section 4(f).
(g)
Entitlement to Direct Votes. Any Holder named in a List
prepared in connection with any US Co Meeting or any US Co
Consent will be entitled (i) to instruct the Trustee in the
manner described in Section 4(c) hereof with respect to the
exercise of the Holder Votes to which such Holder is entitled
or (ii) to attend such meeting and personally to exercise
thereat (or to exercise with respect to any written consent),
as the proxy of the Trustee, the Holder Votes to which such
Holder is entitled.
(h)
Stockholder Proposals. The Trustee shall forthwith submit to
US Co any stockholder proposal (within the meaning of the
United States Securities Exchange Act of 1934) received by the
Trustee from a Holder. Such stockholder proposal may be
considered at any meeting of US Co at which the holders of US
Co Common Stock are entitled to submit stockholder proposals.
US Co agrees to accept all stockholder proposals submitted by
the Trustee that are received by US Co within the applicable
time limitation under the United States Securities Exchange
Act of 1934, provided that not more than one proposal is
submitted on behalf of any one Holder.
(i)
Voting by Trustee, and Attendance of Trustee Representative,
at Meeting.
(i)
In connection with each US Co Meeting and US Co
Consent, the Trustee shall exercise, either in person
or by proxy, in accordance with the instructions
received from a Holder pursuant to Section 4(c)
hereof, the Holder Votes as to which such Holder is
entitled to direct the vote (or any lesser number
thereof as may be set forth in the instructions);
provided, however, that such written instructions are
received by the Trustee from the Holder prior to the
time and date fixed by it for receipt of such
instructions in the notice given by the Trustee to
the Holder pursuant to Section 4(c) hereof.
(ii)
The Trustee shall cause such representatives as are
empowered by it to sign and deliver, on behalf of the
Trustee, proxies for Voting Rights to attend each US
Co Meeting. Upon submission by a Holder (or its
designee) of identification satisfactory to the
Trustee's representatives, and at the Holder's
request, such representatives shall sign and deliver
to such Holder (or its designee) a proxy to exercise
personally the Holder Votes as to which such Holder
is otherwise entitled hereunder to direct the vote,
if such Holder either (A) has not previously given
the Trustee instructions pursuant to Section 4(c)
hereof in respect of such meeting, or (B) submits to
the Trustee's representatives written revocation of
any such previous instructions. At such meeting, the
Holder exercising such Holder Votes shall have the
same rights
10
- 10 as the Trustee to speak at the meeting in respect of
any matter, question or proposition, to vote by way
of ballot at the meeting in respect of any matter,
question or proposition and to vote at such meeting
by way of a show of hands in respect of any matter,
question or proposition.
(j)
Distribution of Written Materials. Any written materials to be
distributed by the Trustee to the Holders pursuant to this
Agreement shall be delivered or sent by mail (or otherwise
communicated in the same manner as US Co utilizes in
communications to holders of US Co Common Stock) to each
Holder at its address as shown on the books of US Co Sub. US
Co Sub shall provide or cause to be provided to the Trustee
for this purpose, on a timely basis and without charge or
other expense:
(A)
current lists of the Holders; and
(B)
upon the request of the Trustee, mailing
labels to enable the Trustee to carry out
its duties under this Agreement.
The materials referred to above are to be provided by US Co to
the Trustee, but shall be subject to review and comment by the
Trustee.
(k)
Termination of Voting Right. Except as otherwise provided
herein or in the Exchangeable Share Provisions, all of the
rights of a Holder with respect to the Holder Votes
exercisable in respect of the Exchangeable Shares held by such
Holder, including the right to instruct the Trustee as to the
voting of or to vote personally such Holder Votes and
including the right to submit a stockholder proposal to the
Trustee in accordance with Section 4(h) hereof, shall be
deemed to be surrendered by the Holder to US Co and such
Holder Votes and the Voting Rights represented thereby shall
cease immediately upon the delivery by such Holder to the
Trustee of the certificates representing such Exchangeable
Shares in connection with the exercise by the Holder of the
Exchange Right or the occurrence of the automatic exchange of
Exchangeable Shares for shares of US Co Common Stock, as
specified in Article 5 hereof (unless in either case US Co
shall not have delivered the Exchangeable Share Consideration
deliverable in exchange therefor to the Trustee for delivery
to the Holders), or upon the redemption of Exchangeable Shares
pursuant to Article 6 or Article 7 of the Exchangeable Share
Provisions, or upon the effective date of the liquidation,
dissolution or winding-up of US Co Sub pursuant to Article 5
of the Exchangeable Share Provisions, or upon the purchase of
Exchangeable Shares from the holder thereof by US Co pursuant
to the exercise by US Co of the Retraction Call Right, the
Redemption Call Right or the Liquidation Call Right.
5.
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
(a)
Grant and Ownership of the Exchange Right. US Co hereby grants
to the Trustee as trustee for and on behalf of, and for the
use and benefit of, the Holders (i) the right (the "Exchange
Right"), upon the occurrence and during the continuance of an
Insolvency Event, to require US Co to purchase from each or
any Holder all or any
11
- 11 part of the Exchangeable Shares held by such Holders, and (ii)
the Automatic Exchange Rights, all in accordance with the
provisions of this Agreement.
US Co hereby acknowledges receipt from the Trustee as trustee
for and on behalf of the Holders of good and valuable
consideration (and the adequacy thereof) for the grant of the
Exchange Right and the Automatic Exchange Rights by US Co to
the Trustee. During the term of the Trust and subject to the
terms and conditions of this Agreement, the Trustee shall
possess and be vested with full legal ownership of the
Exchange Right and the Automatic Exchange Rights and shall be
entitled to exercise all of the rights and powers of an owner
with respect to the Exchange Right and the Automatic Exchange
Rights, provided that the Trustee shall:
(i)
hold the Exchange Right and the Automatic Exchange
Rights and the legal title thereto as trustee solely
for the use and benefit of the Holders in accordance
with the provisions of this Agreement; and
(ii)
except as specifically authorized by this Agreement,
have no power or authority to exercise or otherwise
deal in or with the Exchange Right or the Automatic
Exchange Rights, and the Trustee shall not exercise
any such rights for any purpose other than the
purposes for which this Trust is created pursuant to
this Agreement.
(b)
Legended Share Certificates. US Co Sub will cause each
certificate representing Exchangeable Shares to bear an
appropriate legend notifying the Holders of:
(i)
their right to instruct the Trustee with respect to
the exercise of the Exchange Right in respect of the
Exchangeable Shares held by a Holder; and
(ii)
the Automatic Exchange Rights.
(c)
General Exercise of Exchange Right. The Exchange Right shall
be and remain vested in and exercised by the Trustee. Subject
to Section 7(o) hereof, the Trustee shall exercise the
Exchange Right only on the basis of instructions received
pursuant to this Article 5 from Holders entitled to instruct
the Trustee as to the exercise thereof To the extent that no
instructions are received from a Holder with respect to the
Exchange Right, the Trustee shall not exercise or permit the
exercise of the Exchange Right.
(d)
Purchase Price. The purchase price payable by US Co for each
Exchangeable Share to be purchased by US Co under the Exchange
Right shall be an amount equal to the Exchangeable Share Price
on the last Business Day prior to the day of closing of the
purchase and sale of such Exchangeable Share under the
Exchange Right. In connection with each exercise of the
Exchange Right, US Co will provide to the Trustee an Officer's
Certificate setting forth the calculation of the Exchangeable
Share Price for each Exchangeable Share. The Exchangeable
Share Price for each such Exchangeable Share so purchased may
be satisfied only by US Co issuing and delivering or causing
to be delivered to the Trustee, on behalf of the relevant
Holder,
12
- 12 the Exchangeable Share Consideration representing the total
Exchangeable Share Price.
(e)
Exercise Instructions. Subject to the terms and conditions
herein set forth, a Holder shall be entitled, upon the
occurrence and during the continuance of an Insolvency Event,
to instruct the Trustee to exercise the Exchange Right with
respect to all or any part of the Exchangeable Shares
registered in the name of such Holder on the books of US Co
Sub. To cause the exercise of the Exchange Right by the
Trustee, the Holder shall deliver to the Trustee, in person or
by certified or registered mail, at its principal offices in
Calgary, Alberta or Toronto, Ontario or at such other places
in Canada as the Trustee may from time to time designate by
written notice to the Holders, the certificates representing
the Exchangeable Shares which such Holder desires US Co to
purchase, duly endorsed in blank, and accompanied by such
other documents and instruments as may be required to effect a
transfer of Exchangeable Shares under applicable law and the
by-laws of US Co Sub and such additional documents and
instruments as the Trustee may reasonably require together
with (i) a duly completed form of notice of exercise of the
Exchange Right, contained on the reverse of or attached to the
Exchangeable Share certificates, stating (A) that the Holder
thereby instructs the Trustee to exercise the Exchange Right
so as to require US Co to purchase from the Holder the number
of Exchangeable Shares specified therein, (B) that such Holder
has good title to and owns all such Exchangeable Shares to be
acquired by US Co free and clear of all liens, claims and
encumbrances, (C) the names in which the certificates
representing US Co Common Stock issuable in connection with
the exercise of the Exchange Right are to be issued and (D)
the names and addresses of the persons to whom the
Exchangeable Share Consideration should be delivered and (ii)
payment (or evidence satisfactory to the Trustee, US Co Sub
and US Co of payment) of the taxes (if any) payable as
contemplated by Section 5(h) of this Agreement. If only a part
of the Exchangeable Shares represented by any certificate or
certificates delivered to the Trustee are to be purchased by
US Co under the Exchange Right, a new certificate for the
balance of such Exchangeable Shares shall be issued to the
Holder at the expense of US Co Sub.
(f)
Delivery of Exchangeable Share Consideration; Effect of
Exercise. Promptly after receipt of the certificates
representing the Exchangeable Shares which the Holder desires
US Co to purchase under the Exchange Right (together with such
documents and instruments of transfer and a duly completed
form of notice of exercise of the Exchange Right), duly
endorsed for transfer to US Co the Trustee shall notify US Co
and US Co Sub of its receipt of the same, which notice to US
Co and US Co Sub shall constitute exercise of the Exchange
Right by the Trustee on behalf of the Holder of such
Exchangeable Shares, and US Co shall immediately thereafter
deliver or cause to be delivered to the Trustee, for delivery
to the Holder of such Exchangeable Shares (or to such other
persons, if any, properly designated by such Holder), the
Exchangeable Share Consideration deliverable in connection
with the exercise of the Exchange Right; provided, however,
that no such delivery shall be made unless and until the
Holder requesting the same shall have paid (or provided
evidence satisfactory to the Trustee, US Co Sub and US Co of
the payment of) the taxes (if any) payable as contemplated by
Section 5(h) of this Agreement. Immediately upon
13
- 13 the giving of notice by the Trustee to US Co and US Co Sub of
the exercise of the Exchange Right, as provided in this
Section 5(f), the closing of the transaction of purchase and
sale contemplated by the Exchange Right shall be deemed to
have occurred, and the Holder of such Exchangeable Shares
shall be deemed to have transferred to US Co all of its right,
title and interest in and to such Exchangeable Shares and in
the related interest in the Trust Estate and shall cease to be
a holder of such Exchangeable Shares and shall not be entitled
to exercise any of the rights of a holder in respect thereof,
other than the right to receive his proportionate part of the
total purchase price therefor, unless such Exchangeable Share
Consideration is not delivered by US Co to the Trustee, for
delivery to such Holder (or to such other persons, if any,
properly designated by such Holder), within three Business
Days of the date of the giving of such notice by the Trustee,
in which case the rights of the Holder shall remain unaffected
until such Exchangeable Share Consideration is delivered by US
Co and any cheque included therein is paid. Concurrently with
such Holder ceasing to be a holder of Exchangeable Shares, the
Holder shall be considered and deemed for all purposes to be
the holder of the shares of US Co Common Stock delivered to it
pursuant to the Exchange Right.
(g)
Exercise of Exchange Right Subsequent to Retraction. In the
event that a Holder has exercised its right under Article 6 of
the Exchangeable Share Provisions to require US Co Sub to
redeem any or all of the Exchangeable Shares held by the
Holder (the "Retracted Shares") and is notified by US Co Sub
pursuant to Section 6.6 of the Exchangeable Share Provisions
that US Co Sub will not be permitted as a result of liquidity
or solvency requirements of applicable law to redeem all such
Retracted Shares, subject to receipt by the Trustee of written
notice to that effect from US Co Sub and provided that US Co
shall not have exercised the Retraction Call Right with
respect to the Retracted Shares and that the Holder has not
revoked the retraction request delivered by the Holder to US
Co Sub pursuant to Section 6.1 of the Exchangeable Share
Provisions, the retraction request will constitute and will be
deemed to constitute notice from the Holder to the Trustee
instructing the Trustee to exercise the Exchange Right with
respect to those Retracted Shares which US Co Sub is unable to
redeem. In any such event, US Co Sub hereby agrees with the
Trustee and in favour of the Holder immediately to notify the
Trustee of such prohibition against US Co Sub redeeming all of
the Retracted Shares and immediately to forward or cause to be
forwarded to the Trustee all relevant materials delivered by
the Holder to US Co Sub or to the transfer agent of the
Exchangeable Shares (including without limitation a copy of
the retraction request delivered pursuant to Section 6.1 of
the Exchangeable Share Provisions) in connection with such
proposed redemption of the Retracted Shares and the Trustee
will thereupon exercise the Exchange Right with respect to the
Retracted Shares that US Co Sub is not permitted to redeem and
will require US Co to purchase such shares in accordance with
the provisions of this Article 5.
(h)
Stamp or Other Transfer Taxes. Upon any sale of Exchangeable
Shares to US Co pursuant to the Exchange Right or the
Automatic Exchange Rights, the share certificate or
certificates representing US Co Common Stock to be delivered
in connection with the payment of the total purchase price
therefor shall be issued in the
14
- 14 name of the Holder of the Exchangeable Shares so sold or in
such names as such Holder may otherwise direct in writing
without charge to the holder of the Exchangeable Shares so
sold, provided, however, that such Holder (i) shall pay (and
neither US Co, US Co Sub nor the Trustee shall be required to
pay) any documentary, stamp, transfer or other similar taxes
that may be payable in respect of any transfer involved in the
issuance or delivery of such shares to a person other than
such Holder or (ii) shall have established to the satisfaction
of the Trustee, US Co and US Co Sub that such taxes, if any,
have been paid.
(i)
Notice of Insolvency Event. Immediately upon the occurrence of
an Insolvency Event or any event which with the giving of
notice or the passage of time or both would be an Insolvency
Event US Co Sub and US Co shall give written notice thereof to
the Trustee. As soon as practicable after receiving notice
from US Co Sub and US Co or from any other Person of the
occurrence of an Insolvency Event, the Trustee will mail to
each Holder, at the expense of US Co, a notice of such
Insolvency Event in the form provided by US Co, which notice
shall contain a brief statement of the right of the Holders
with respect to the Exchange Right.
(j)
Qualification of US Co Common Stock. US Co covenants that if
any shares of US Co Common Stock to be issued and delivered
pursuant to the Exchange Right or the Automatic Exchange
Rights require registration or qualification with or approval
of or the filing of document including any prospectus or
similar document or the taking of any proceeding with or the
obtaining of any order, ruling or consent from any
governmental or regulatory authority under any Canadian or
United States federal, provincial or state law or regulation
or pursuant to the rules and regulations of any regulatory
authority or the fulfillment of any other legal requirement
(collectively, the "Applicable Laws") before such shares may
be issued and delivered by US Co to the initial holder thereof
(other than US Co Sub) or in order that such shares may be
freely traded thereafter (other than any restrictions on
transfer by reason of a holder being a "control person" of US
Co for purposes of Canadian federal or provincial securities
law or an "affiliate" of US Co or, prior to the date hereof,
of Chauvco for purposes of United States federal or state
securities law), US Co will in good faith expeditiously take
all such actions and do all such things as are necessary to
cause such shares of US Co Common Stock to be and remain duly
registered, qualified or approved. US Co represents and
warrants that it has in good faith taken all actions and done
all things as are necessary under Applicable Laws as they
exist on the date hereof to cause the shares of US Co Common
Stock to be issued and delivered pursuant to the Exchange
Right and the Automatic Exchange Rights and to be freely
tradeable thereafter (other than restrictions on transfer by
reason of a holder being a "control person" of US Co for the
purposes of Canadian federal and provincial securities law or
an "affiliate" of US Co or, prior to the date hereof, of
Chauvco for the purposes of United States federal or state
securities law). US Co will in good faith expeditiously take
all such actions and do all such things as are necessary to
cause all shares of US Co Common Stock to be delivered
pursuant to the Exchange Right or the Automatic Exchange
Rights to be listed, quoted or posted for trading on all stock
exchanges and quotation systems on which such shares are
listed, quoted or posted for trading at such time.
15
- 15 -
(k)
Reservation of Shares of US Co Common Stock. US Co hereby
represents, warrants and covenants that it has irrevocably
reserved for issuance and will at all times keep available,
free from pre-emptive and other rights, out of its authorized
and unissued capital stock such number of shares of US Co
Common Stock (i) as is equal to the sum of (A) the number of
Exchangeable Shares issued and outstanding from time to time
and (B) the number of Exchangeable Shares issuable upon the
exercise of all rights to acquire Exchangeable Shares
outstanding from time to time and (ii) as are now and may
hereafter be required to enable and permit US Co Sub and US Co
to meet their respective obligations hereunder, under the
Support Agreement, under the Exchangeable Share Provisions and
under any other security or commitment pursuant to the
Arrangement with respect to which US Co may now or hereafter
be required to issue shares of US Co Common Stock.
(l)
Automatic Exchange on Liquidation of US Co.
(i)
US Co will give the Trustee written notice of each of
the following events at the time set forth below:
(A)
in the event of any determination by the
board of directors of US Co to institute
voluntary liquidation, dissolution or
winding-up proceedings with respect to US Co
or to effect any other distribution of
assets of US Co among its stockholders for
the purpose of winding-up its affairs, at
least 60 days prior to the proposed
effective date of such liquidation,
dissolution, winding-up or other
distribution; and
(B)
immediately, upon the earlier of (I) receipt
by US Co of notice of and (II) US Co
otherwise becoming aware of any threatened
or instituted claim, suit, petition or other
proceedings with respect to the involuntary
liquidation, dissolution or winding-up of US
Co or to effect any other distribution of
assets of US Co among its stockholders for
the purpose of winding-up its affairs.
(ii)
Immediately following receipt by the Trustee from US
Co of notice of any event (a "Liquidation Event")
contemplated by Section 5(l)(i) above, the Trustee
will give notice thereof to the Holders. Such notice
will be provided by US Co to the Trustee and shall
include a brief description of the automatic exchange
of Exchangeable Shares for shares of US Co Common
Stock provided for in Section 5(l)(iii) below.
(iii)
In order that the Holders will be able to participate
on a PRO RATA basis with the holders of US Co Common
Stock in the distribution of assets of US Co in
connection with a Liquidation Event, immediately
prior to the effective time (the "Liquidation Event
Effective Time") of a Liquidation Event all of the
then outstanding Exchangeable Shares shall be
automatically exchanged for shares of US Co Common
Stock. To effect such automatic exchange, US
16
- 16 Co shall be deemed to have purchased each
Exchangeable Share outstanding immediately prior to
the Liquidation Event Effective Time and held by
Holders, and each Holder shall be deemed to have sold
the Exchangeable Shares held by it at such time, for
a purchase price per share equal to the Exchangeable
Share Price applicable at such time. In connection
with such automatic exchange, US Co will provide to
the Trustee an Officers' Certificate setting forth
the calculation of the purchase price for each
Exchangeable Share.
(iv)
The closing of the transaction of purchase and sale
contemplated by Section 5(l)(iii) above shall be
deemed to have occurred immediately prior to the
Liquidation Event Effective Time, and each Holder of
Exchangeable Shares shall be deemed to have
transferred to US Co all of the Holder's right, title
and interest in and to such Exchangeable Shares and
the related interest in the Trust Estate and shall
cease to be a holder of such Exchangeable Shares and
US Co shall deliver to the Holder the Exchangeable
Share Consideration deliverable upon the automatic
exchange of Exchangeable Shares. Concurrently with
such Holder ceasing to be a holder of Exchangeable
Shares, the Holder shall be considered and deemed for
all purposes to be the holder of the shares of US Co
Common Stock issued to it pursuant to the automatic
exchange of Exchangeable Shares for US Co Common
Stock and the certificates held by the Holder
previously representing the Exchangeable Shares
exchanged by the Holder with US Co pursuant to such
automatic exchange shall thereafter be deemed to
represent the shares of US Co Common Stock issued to
the Holder by US Co pursuant to such automatic
exchange. Upon the request of a Holder and the
surrender by the Holder of Exchangeable Share
certificates deemed to represent shares of US Co
Common Stock, duly endorsed in blank and accompanied
by such instruments of transfer as US Co may
reasonably require, US Co shall deliver or cause to
be delivered to the Holder certificates representing
the shares of US Co Common Stock of which the Holder
is the holder.
6.
RESTRICTIONS ON ISSUANCE OF US CO SPECIAL VOTING STOCK
During the term of this Agreement, US Co will not issue any shares of
US Co Special Voting Stock in addition to the Voting Share.
7.
CONCERNING THE TRUSTEE
(a)
Powers and Duties of the Trustee. The rights, powers and
authorities of the Trustee under this Agreement, in its
capacity as trustee of the Trust, shall include:
(i)
receipt and deposit of the Voting Share from US Co as
trustee for and on behalf of the Holders in
accordance with the provisions of this Agreement;
(ii)
granting proxies and distributing materials to
Holders as provided in this Agreement;
17
- 17 -
(iii)
voting the Holder Votes in accordance with the
provisions of this Agreement;
(iv)
receiving the grant of the Exchange Right and the
Automatic Exchange Rights from US Co as trustee for
and on behalf of the Holders in accordance with the
provisions of this Agreement;
(v)
exercising the Exchange Right and enforcing the
benefit of the Automatic Exchange Rights, in each
case in accordance with the provisions of this
Agreement, and in connection therewith receiving from
Holders Exchangeable Shares and other requisite
documents and distributing to such Holders the shares
of US Co Common Stock and cheques, if any, to which
such Holders are entitled upon the exercise of the
Exchange Right or pursuant to the Automatic Exchange
Rights, as the case may be;
(vi)
holding title to the Trust Estate;
(vii)
investing any monies forming, from time to time, a
part of the Trust Estate as provided in this
Agreement;
(viii)
taking action at the direction of a Holder or Holders
to enforce the obligations of US Co under this
Agreement; and
(ix)
taking such other actions and doing such other things
as are specifically provided in this Agreement.
In the exercise of such rights, powers and authorities the
Trustee shall have (and is granted) such incidental and
additional rights, powers and authority not in conflict with
any of the provisions of this Agreement as the Trustee, acting
in good faith and in the reasonable exercise of its
discretion, may deem necessary, appropriate or desirable to
effect the purpose of the Trust. Any exercise of such
discretionary rights, powers and authorities by the Trustee
shall be final, conclusive and binding upon all persons. For
greater certainty, the Trustee shall have only those duties as
are set out specifically in this Agreement.
The Trustee in exercising its rights, powers, duties and
authorities hereunder shall act honestly and in good faith
with a view to the best interests of the Holders and shall
exercise the care, diligence and skill that a reasonably
prudent trustee would exercise in comparable circumstances.
The Trustee shall not be bound to give any notice or do or
take any act, action or proceeding by virtue of the powers
conferred on it hereby unless and until it shall be
specifically required to do so under the terms hereof; nor
shall the Trustee be required to take any notice of, or to do
or to take any act, action or proceeding as a result of any
default or breach of any provision hereunder, unless and until
notified in writing of such default or breach, which notices
shall distinctly specify the default or breach desired to be
brought to the attention of the Trustee and in the absence of
such notice
18
- 18 the Trustee may for all purposes of this Agreement
conclusively assume that no default or breach has been made in
the observance or performance of any of the representations,
warranties, covenants, agreements or conditions contained
herein.
(b)
No Conflict of Interest. The Trustee represents to US Co Sub
and US Co that at the date of execution and delivery of this
Agreement there exists no material conflict of interest in the
role of the Trustee as a fiduciary hereunder and the role of
the Trustee in any other capacity. The Trustee shall, within
90 days after it becomes aware that such a material conflict
of interest exists, either eliminate such material conflict of
interest or resign in the manner and with the effect specified
in Article 10 hereof. If, notwithstanding the foregoing
provisions of this Section 7(b), the Trustee has such a
material conflict of interest, the validity and enforceability
of this Agreement shall not be affected in any manner
whatsoever by reason only of the existence of such material
conflict of interest. If the Trustee contravenes the foregoing
provisions of this Section 7(b), any interested party may
apply to the Alberta Court of Queen's Bench for an order that
the Trustee be replaced as trustee hereunder.
(c)
Dealings with Transfer Agents, Registrars, etc. US Co Sub and
US Co irrevocably authorize the Trustee, from time to time,
to:
(i)
consult, communicate and otherwise deal with the
respective registrars and transfer agents, and with
any such subsequent registrar or transfer agent, of
the Exchangeable Shares and US Co Common Stock; and
(ii)
requisition, from time to time, (A) from any such
registrar or transfer agent any information readily
available from the records maintained by it which the
Trustee may reasonably require for the discharge of
its duties and responsibilities under this Agreement
and (B) from the transfer agent of US Co Common
Stock, and any subsequent transfer agent of such
shares, the share certificates issuable upon the
exercise from time to time of the Exchange Right and
pursuant to the Automatic Exchange Rights in the
manner specified in Article 5 hereof.
US Co Sub and US Co irrevocably authorize their respective
registrars and transfer agents to comply with all such
requests. US Co covenants that it will supply its transfer
agent with duly executed share certificates for the purpose of
completing the exercise from time to time of the Exchange
Right and the Automatic Exchange Rights, in each case pursuant
to Article 5 hereof.
(d)
Books and Records. The Trustee shall keep available for
inspection by US Co and US Co Sub, at the Trustee's principal
office in Calgary, Alberta, correct and complete books and
records of account relating to the Trustee's actions under
this Agreement, including without limitation all information
relating to mailings and instructions to and from Holders and
all transactions pursuant to the Voting Rights, the Exchange
Right and the Automatic Exchange Rights for the term of this
Agreement. On or before March 31, 1998, and on or before March
31 in every year thereafter, so long as the Voting Share is on
deposit with the Trustee, the Trustee shall transmit to US
19
- 19 Co and US Co Sub a brief report, dated as of the preceding
December 31, with respect to:
(i)
the property and funds comprising the Trust Estate as
of that date;
(ii)
the number of exercises of the Exchange Right, if
any, and the aggregate number of Exchangeable Shares
received by the Trustee on behalf of Holders in
consideration of the issue and delivery by US Co of
shares of US Co Common Stock in connection with the
Exchange Right, during the calendar year ended on
such date; and
(iii)
all other actions taken by the Trustee in the
performance of its duties under this Agreement which
it had not previously reported.
(e)
Income Tax Returns and Reports. The Trustee shall, to the
extent necessary, prepare and file on behalf of the Trust
appropriate United States and Canadian income tax returns and
any other returns or reports as may be required by applicable
law or pursuant to the rules and regulations of any securities
exchange or other trading system through which the
Exchangeable Shares are traded and, in connection therewith,
may obtain the advice and assistance of such experts as the
Trustee may consider necessary or advisable. If requested by
the Trustee, US Co shall retain such experts for purposes of
providing such advice and assistance.
(f)
Indemnification Prior to Certain Actions by Trustee. The
Trustee shall exercise any or all of the rights, duties,
powers or authorities vested in it by this Agreement at the
request, order or direction of any Holder upon such Holder
furnishing to the Trustee reasonable funding, security and
indemnity against the costs, expenses and liabilities which
may be incurred by the Trustee therein or thereby, provided
that no Holder shall be obligated to furnish to the Trustee
any such funding, security or indemnity in connection with the
exercise by the Trustee of any of its rights, duties, powers
and authorities with respect to the Voting Share pursuant to
Article 4 hereof, subject to Section 7(o) hereof, and with
respect to the Exchange Right pursuant to Article 5 hereof,
subject to Section 7(o) hereof, and with respect to the
Automatic Exchange Rights pursuant to Article 5 hereof.
None of the provisions contained in this Agreement shall
require the Trustee to expend or risk its own funds or
otherwise incur financial liability in the exercise of any of
its rights, powers, duties or authorities unless funded, given
funds, security and indemnified as aforesaid.
(g)
Actions by Holders. No Holder shall have the right to
institute any action, suit or proceeding or to exercise any
other remedy authorized by this Agreement for the purpose of
enforcing any of its rights or for the execution of any trust
or power hereunder unless the Holder has requested the Trustee
to take or institute such action, suit or proceeding and
furnished the Trustee with the funding, security and indemnity
referred to in Section 7(f) hereof and the Trustee shall have
failed to act within a reasonable time thereafter. In such
case, but not otherwise, the Holder shall be
20
- 20 entitled to take proceedings in any court of competent
jurisdiction such as the Trustee might have taken; it being
understood and intended that no one or more Holders shall have
any right in any manner whatsoever to affect, disturb or
prejudice the rights hereby created by any such action, or to
enforce any right hereunder or under the Voting Rights, the
Exchange Right or the Automatic Exchange Rights, except
subject to the conditions and in the manner herein provided,
and that all powers and trusts hereunder shall be exercised
and all proceedings at law shall be instituted, had and
maintained by the Trustee, except only as herein provided, and
in any event for the equal benefit of all Holders.
(h)
Reliance upon Declarations. The Trustee shall not be
considered to be in contravention of any of its rights,
powers, duties and authorities hereunder if, when required, it
acts and relies in good faith upon lists, mailing labels,
notices, statutory declarations, certificates, opinions,
reports or other papers or documents furnished pursuant to the
provisions hereof or required by the Trustee to be furnished
to it in the exercise of its rights, powers, duties and
authorities hereunder and such lists, mailing labels, notices,
statutory declarations, certificates, opinions, reports or
other papers or documents comply with the provisions of
Section 7(i) hereof, if applicable, and with any other
applicable provisions of this Agreement.
(i)
Evidence and Authority to Trustee. US Co Sub and/or US Co
shall furnish to the Trustee evidence of compliance with the
conditions provided for in this Agreement relating to any
action or step required or permitted to be taken by US Co Sub
and/or US Co or the Trustee under this Agreement or as a
result of any obligation imposed under this Agreement,
including, without limitation, in respect of the Voting Rights
or the Exchange Right or the Automatic Exchange Rights and the
taking of any other action to be taken by the Trustee at the
request of or on the application of US Co Sub and/or US Co
forthwith if and when:
(i)
such evidence is required by any other section of
this Agreement to be furnished to the Trustee in
accordance with the terms of this Section 7(i); or
(ii)
the Trustee, in the exercise of its rights, powers,
duties and authorities under this Agreement, gives US
Co Sub and/or US Co written notice requiring it to
furnish such evidence in relation to any particular
action or obligation specified in such notice.
Such evidence shall consist of an Officers' Certificate of US
Co Sub and/or US Co or a statutory declaration or a
certificate made by persons entitled to sign an Officer's
Certificate stating that any such condition has been complied
with in accordance with the terms of this Agreement.
Whenever such evidence relates to a matter other than the
Voting Rights or the Exchange Right or the Automatic Exchange
Rights, and except as otherwise specifically provided herein,
such evidence may consist of a report or opinion of any
solicitor, auditor, accountant, appraiser, valuer, engineer or
other expert or any other person whose qualifications give
authority to a statement made by him provided that
21
- 21 if such report or opinion is furnished by a director, officer
or employee of US Co Sub and/or US Co it shall be in the form
of an Officers' Certificate or a statutory declaration.
Each statutory declaration, certificate, opinion or report
furnished to the Trustee as evidence of compliance with a
condition provided for in this Agreement shall include a
statement by the person giving the evidence:
(iii)
declaring that he has read and understands the
provisions of this Agreement relating to the
condition in question;
(iv)
describing the nature and scope of the examination or
investigation upon which he based the statutory
declaration, certificate, statement or opinion; and
(v)
declaring that he has made such examination or
investigation as he believes is necessary to enable
him to make the statements or give the opinions
contained or expressed therein.
(j)
Experts, Advisors and Agents. The Trustee may:
(i)
in relation to these presents act and rely on the
opinion or advice of or information obtained from or
prepared by any solicitor, auditor, accountant,
appraiser, valuer, engineer or other expert, whether
retained by the Trustee or by US Co Sub and/or US Co
or otherwise, and may employ such assistants as may
be necessary to the proper determination and
discharge of its powers and duties and determination
of its rights hereunder and may pay proper and
reasonable compensation for all such legal and other
advice or assistance as aforesaid; and
(ii)
employ such agents and other assistants as it may
reasonably require for the proper determination and
discharge of its powers and duties hereunder, and may
pay reasonable remuneration for all services
performed for it (and shall be entitled to receive
reasonable remuneration for all services performed by
it) in the discharge of the trusts hereof and
compensation for all disbursements, costs and
expenses made or incurred by it in the determination
and discharge of its duties hereunder and in the
management of the Trust.
(k)
Investment of Monies Held by Trustee. Unless otherwise
provided in this Agreement, any monies held by or on behalf of
the Truste which under the terms of this Agreement may or
ought to be invested or which may be on deposit with the
Trustee or which may be in the hands of the Trustee may be
invested and reinvested in the name or under the control of
the Trustee in securities in which, under the laws of the
Province of Alberta trustees are authorized to invest trust
unit monies, provided that such securities are stated to
mature within two years after their purchase by the Trustee,
and the Trustee shall so invest such monies on the written
direction of US Co Sub. Pending the investment of any monies
as hereinbefore provided, such
22
- 22 monies may be deposited in the name of the Trustee in any
chartered bank in Canada or, with the consent of US Co Sub, in
the deposit department of the Trustee or any other loan or
company authorized to accept deposits under the laws of Canada
or any province thereof at the rate of interest then current
on similar deposits.
(l)
Trustee Not Required to Give Security. The Trustee shall not
be required to give any bond or security in respect of the
execution of the trusts, rights, duties, powers and
authorities of this Agreement or otherwise in respect of the
premises.
(m)
Trustee Not Bound to Act on Request. Except as in this
Agreement otherwise specifically provided, the Trustee shall
not be bound to act in accordance with any direction or
request of US Co Sub and/or US Co or of the directors thereof
until a duly authenticated copy of the instrument or
resolution containing such direction or request shall have
been delivered to the Trustee, and the Trustee shall be
empowered to act and rely upon any such copy purporting to be
authenticated and believed by the Trustee to be genuine.
(n)
Authority to Carry on Business. The Trustee represents to US
Co Sub and US Co that at the date of execution and delivery by
it of this Agreement it is authorized to carry on the business
of a trust company in the Province of Alberta but if,
notwithstanding the provisions of this Section 7(n), it ceases
to be so authorized to carry on business, the validity and
enforceability of this Agreement and the Voting Rights, the
Exchange Right and the Automatic Exchange Rights shall not be
affected in any manner whatsoever by reason only of such event
but the Trustee shall, within 90 days after ceasing to be
authorized to carry on the business of a trust company in the
Province of Alberta, either become so authorized or resign in
the manner and with the effect specified in Article 10 hereof.
(o)
Conflicting Claims. If conflicting claims or demands are made
or asserted with respect to any interest of any Holder in any
Exchangeable Shares, including any disagreement between the
heirs, representatives, successors or assigns succeeding to
all or any part of the interest of any Holder in any
Exchangeable Shares resulting in conflicting claims or demands
being made in connection with such interest, then the Trustee
shall be entitled, at its sole discretion, to refuse to
recognize or to comply with any such claim or demand. In so
refusing, the Trustee may elect not to exercise any Voting
Rights, Exchange Right or Automatic Exchange Rights subject to
such conflicting claims or demands and, in so doing, the
Trustee shall not be or become liable to any person on account
of such election or its failure or refusal to comply with any
such conflicting claims or demands. The Trustee shall be
entitled to continue to refrain from acting and to refuse to
act until:
(i)
the rights of all adverse claimants with respect to
the Voting Rights, Exchange Right or Automatic
Exchange Rights subject to such conflicting claims or
demands have been adjudicated by a final judgment of
a court of competent jurisdiction; or
23
- 23 -
(ii)
all differences with respect to the Voting Rights,
Exchange Right or Automatic Exchange Right subject to
such conflicting claims or demands have been
conclusively settled by a valid written agreement
binding on all such adverse claimants, and the
Trustee shall have been furnished with an executed
copy of such agreement.
If the Trustee elects to recognize any claim or comply with
any demand made by any such adverse claimant, it may in its
discretion require such claimant to furnish such surety bond
or other security satisfactory to the Trustee as it shall deem
appropriate fully to indemnify it as between all conflicting
claims or demands.
(p)
Acceptance of Trust. The Trustee hereby accepts the Trust
created and provided for by and in this Agreement and agrees
to perform the same upon the terms and conditions herein set
forth and to hold all rights, privileges and benefits
conferred hereby and by law in trust for the various persons
who shall from time to time be Holders, subject to all the
terms and conditions herein set forth.
8.
COMPENSATION
US Co and US Co Sub jointly and severally agree to pay to the Trustee
reasonable compensation for all of the services rendered by it under this
Agreement and will reimburse the Trustee for all reasonable expenses (including
but not limited to taxes, compensation paid to experts, agents and advisors and
travel expenses) and disbursements, including the cost and expense of any suit
or litigation of any character and any proceedings before any governmental
agency reasonably incurred by the Trustee in connection with its rights and
duties under this Agreement; provided that US Co and US Co Sub shall have no
obligation to reimburse the Trustee for any expenses or disbursements paid,
incurred or suffered by the Trustee in any suit or litigation in which the
Trustee is determined to have acted in bad faith or with negligence or willful
misconduct.
9.
INDEMNIFICATION AND LIMITATION OF LIABILITY
(a)
Indemnification of the Trustee. US Co and US Co Sub jointly
and severally agree to indemnify and hold harmless the Trustee
and each of its directors, officers, employees and agents
appointed and acting in accordance with this Agreement
(collectively, the "Indemnified Parties") against all claims,
losses, damages, costs, penalties, fines and reasonable
expenses (including reasonable expenses of the Trustee's legal
counsel on a solicitor and his own client basis) which,
without fraud, negligence, willful misconduct or bad faith on
the part of such Indemnified Party, may be paid, incurred or
suffered by the Indemnified Party by reason of or as a result
of the Trustee's acceptance or administration of the Trust,
its compliance with its duties set forth in this Agreement, or
any written or oral instructions delivered to the Trustee by
US Co or US Co Sub pursuant hereto. In no case shall US Co or
US Co Sub be liable under this indemnity for any claim against
any of the Indemnified Parties unless US Co and US Co Sub
shall be notified by the Trustee of the written assertion of a
claim or of any action commenced against the Indemnified
Parties, promptly after any of the Indemnified Parties shall
have received any such written assertion of a claim or shall
have been served with a summons or other first legal
24
- 24 process giving information as to the nature and basis of the
claim. Subject to (ii), below, US Co and US Co Sub shall be
entitled to participate at their own expense in the defense
and, if US Co or US Co Sub so elect at any time after receipt
of such notice, either of them may assume the defense of any
suit brought to enforce any such claim. The Trustee shall have
the right to employ separate counsel in any such suit and
participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of the Trustee unless:
(i) the employment of such counsel has been authorized by US
Co or US Co Sub, such authorization not to be unreasonably
withheld; or (ii) the named parties to any such suit include
both the Trustee and US Co or US Co Sub and the Trustee shall
have been advised by counsel acceptable to US Co or US Co Sub
that there may be one or more legal defenses available to the
Trustee that are different from or in addition to those
available to US Co or US Co Sub and that an actual or
potential conflict exists (in which case US Co and US Co Sub
shall not have the right to assume the defense of such suit on
behalf of the Trustee but shall be liable to pay the
reasonable fees and expenses of counsel for the Trustee).
(b)
Limitation of Liability. The Trustee shall not be held liable
for any loss which may occur by reason of depreciation of the
value of any part of the Trust Estate or any loss incurred on
any investment of funds pursuant to this Agreement except to
the extent that such loss is attributable to the fraud,
negligence, willful misconduct or bad faith on the part of the
Trustee.
10.
CHANGE OF TRUSTEE
(a)
Resignation. The Trustee, or any trustee hereafter appointed,
may at any time resign by giving written notice of such
resignation to US Co and US Co Sub specifying the date on
which it desires to resign, provided that such notice shall
never be given less than 60 days before such desired
resignation date unless US Co and US Co Sub otherwise agree
and provided further that such resignation shall not take
effect until the date of the appointment of a successor
trustee and the acceptance of such appointment by the
successor trustee. Upon receiving such notice of resignation,
US Co and US Co Sub shall promptly appoint a successor trustee
by written instrument in duplicate, one copy of which shall be
delivered to the resigning trustee and one copy to the
successor trustee. Failing acceptance by a successor trustee,
a successor trustee may be appointed by an order of the
Alberta Court of Queen's Bench upon application of one or more
of the parties hereto.
(b)
Removal. The Trustee, or any Trustee hereafter appointed, may
be removed with or without cause, at any time on 60 days'
prior notice by written instrument executed by US Co and US Co
Sub, in duplicate, one copy of which shall be delivered to the
trustee so removed and one copy to the successor trustee,
provided that, in connection with such removal, provision is
made for a replacement trustee similar to that contemplated in
Section 10(a).
25
- 25 -
(c)
Successor Trustee. Any successor trustee appointed as provided
under this Agreement shall execute, acknowledge and deliver to
US Co and US Co Sub and to its predecessor trustee an
instrument accepting such appointment. Thereupon the
resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act,
deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor under this
Agreement, with like effect as if originally named as trustee
in this Agreement. However, on the written request of US Co
and US Co Sub or of the successor trustee, the trustee ceasing
to act shall, upon payment of any amounts then due it pursuant
to the provisions of this Agreement, execute and deliver an
instrument transferring to such successor Trustee all the
rights and powers of the trustee so ceasing to act. Upon the
request of any such successor trustee, US Co, US Co Sub and
such predecessor trustee shall execute any and all instruments
in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights and
powers.
(d)
Notice of Successor Trustee. Upon acceptance of appointment by
a successor trustee as provided herein, US Co and US Co Sub
shall cause to be mailed notice of the succession of such
trustee hereunder to each Holder specified in a List. If US Co
or US Co Sub shall fail to cause such notice to be mailed
within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of US Co and US Co Sub.
11.
US CO SUCCESSORS
(a)
Certain Requirements in Respect of Combination, etc. US Co
shall not enter into any transaction (whether by way of
reconstruction, reorganization, consolidation, merger,
transfer, sale, lease or otherwise) whereby all or
substantially all of its undertaking, property and assets
would become the property of any other Person or, in the case
of a merger, of the continuing corporation resulting therefrom
unless:
(i)
such other Person or continuing corporation (the "US
Co Successor"), by operation of law, becomes, without
further action, bound by the terms and provisions of
this Agreement or, if not so bound, executes, prior
to or contemporaneously with the consummation of such
transaction an agreement supplemental hereto and such
other instruments (if any) as are satisfactory to the
Trustee and in the opinion of legal counsel to the
Trustee are necessary or advisable to evidence the
assumption by the US Co Successor of liability for
all monies payable and property deliverable hereunder
and the covenant of such US Co Successor to pay and
deliver or cause to be delivered the same and its
agreement to observe and perform all the covenants
and obligations of US Co under this Agreement; and
(ii)
such transaction shall, to the satisfaction of the
Trustee and in the opinion of legal counsel to the
Trustee, be upon such terms as substantially to
preserve and not to impair in any material respect
any of the rights, duties, powers and authorities of
the Trustee or of the Holders hereunder.
26
- 26 -
(b)
Vesting of Powers in Successor. Whenever the conditions of
Section 11(a) hereof have been duly observed and performed,
the Trustee, if required, by Section 11(a) hereof, the US Co
Successor and US Co Sub shall execute and deliver the
supplemental agreement provided for in Article 12 hereof and
thereupon the US Co Successor shall possess and from time to
time may exercise each and every right and power of US Co
under this Agreement in the name of US Co or otherwise and any
act or proceeding by any provision of this Agreement required
to be done or performed by the board of directors of US Co or
any officers of US Co may be done and performed with like
force and effect by the directors or officers of such US Co
Successor.
(c)
Wholly-Owned Subsidiaries. Nothing herein shall be construed
as preventing the amalgamation or merger of any wholly-owned
subsidiary of US Co with or into US Co or the winding-up,
liquidation or dissolution of any wholly-owned subsidiary of
US Co provided that all of the assets of such subsidiary are
transferred to US Co or another wholly-owned subsidiary of US
Co, and any such transactions are expressly permitted by this
Article 11.
12.
AMENDMENTS AND SUPPLEMENTAL AGREEMENTS
(a)
Amendments, Modifications, etc. This Agreement may not be
amended or modified except by an agreement in writing executed
by US Co Sub, US Co and the Trustee and approved by the
Holders in accordance with Section 9.2 of the Exchangeable
Share Provisions.
(b)
Ministerial Amendments. Notwithstanding the provisions of
Section 12(a) hereof, the parties to that agreement may in
writing, at any time and from time to time, without the
approval of the Holders, amend or modify this Agreement for
the purposes of;
(i)
adding to the covenants of any or all of the parties
hereto for the protection of the Holders hereunder;
(ii)
making such amendments or modifications not
inconsistent with this Agreement as may be necessary
or desirable with respect to matters or questions
which, in the opinion of the board of directors of
each of US Co and US Co Sub and in the opinion of the
Trustee and its counsel having in mind the best
interests of the Holders as a whole, it may be
expedient to make, provided that such boards of
directors and the Trustee and its counsel shall be of
the opinion that such amendments and modifications
will not be prejudicial to the interests of the
Holders as a whole; or
(iii)
making such changes or corrections which, on the
advice of counsel to US Co Sub, US Co and the Truste,
are required for the purpose of curing or correcting
any ambiguity or defect or inconsistent provision or
clerical omission or mistake or manifest error,
provided that the Trustee and its counsel and the
board of directors of each of US Co Sub and US Co
shall be
27
- 27 of the opinion that such changes or corrections will
not be prejudicial to the interests of the Holders as
a whole.
(c)
Meeting to Consider Amendments. US Co Sub, at the request of
US Co, shall call a meeting or meetings of the Holders for the
purpose of considering any proposed amendment or modification
requiring approval pursuant hereto. Any such meeting or
meetings shall be called and held in accordance with the
by-laws of US Co Sub, the Exchangeable Share Provisions and
all applicable laws.
(d)
Changes in Capital of US Co and US Co Sub. At all times after
the occurrence of any event effected pursuant to Section 2(g)
or Section 2(h) of the Support Agreement, as a result of which
either US Co Common Stock or the Exchangeable Shares or both
are in any way changed, this Agreement shall forthwith be
amended and modified as necessary in order that it shall apply
with full force and effect, mutatis mutandis, to all new
securities into which US Co Common Stock or the Exchangeable
Shares or both are so changed and the parties hereto shall
execute and deliver a supplemental agreement giving effect to
and evidencing such necessary amendments and modifications.
(e)
Execution of Supplemental Agreements. No amendment to or
modification or waiver of any of the provisions of this
Agreement otherwise permitted hereunder shall be effective
unless made in writing and signed by all of the parties
hereto. From time to time US Co Sub (when authorized by a
resolution of its Board of Directors), US Co (when authorized
by a resolution of its board of directors) and the Trustee
may, subject to the provisions of these presents, and they
shall, when so directed by these presents, execute and deliver
by their proper officers, agreements or other instruments
supplemental hereto, which thereafter shall form part hereof,
for any one or more of the following purposes:
(i)
evidencing the succession of any US Co Successors to
US Co and the covenants of and obligations assumed by
each such US Co Successors in accordance with the
provisions of Article 11, and the successor of any
successor trustee in accordance with the provisions
of Article 10;
(ii)
making any additions to, deletions from or
alterations of the provisions of this Agreement or
the Voting Rights, the Exchange Right or the
Automatic Exchange Rights which, in the opinion of
the Trustee and its counsel, will not be prejudicial
to the interests of the Holders as a whole or are in
the opinion of counsel to the Trustee necessary or
advisable in order to incorporate, reflect or comply
with any legislation the provisions of which apply to
US Co, US Co Sub, the Trustee or this Agreement; and
(iii)
for any other purposes not inconsistent with the
provisions of this Agreement, including without
limitation to make or evidence any amendment or
modification to this Agreement as contemplated
hereby, provided that, in the opinion of the Trustee
and its counsel, the rights of the Trustee and the
Holders as a whole will not be prejudiced thereby.
28
- 28 -
13.
TERMINATION
(a)
Term. The Trust created by this Agreement shall continue until
the earliest to occur of the following events:
(i)
Holder;
no outstanding Exchangeable Shares are held by a
(ii)
each of US Co Sub and US Co elects in writing to
terminate the Trust and such termination is approved
by the Holders of the Exchangeable Shares in
accordance with Section 9.2 of the Exchangeable Share
Provisions; and
(iii)
twenty-one (21) years after the death of the last
survivor of the descendants of His Majesty King
George VI of the United Kingdom of Great Britain and
Northern Ireland living on the date of the creation
of the Trust.
(b)
Survival of Agreement. This Agreement shall survive any
termination of the Trust and shall continue until there are no
Exchangeable Shares outstanding held by a Holder; provided,
however, that the provisions of Articles 8 and 9 hereof shall
survive any such termination of this Agreement.
14.
GENERAL
(a)
Severability. If any provision of this Agreement is held to be
invalid, illegal or unenforceable, the validity, legality or
enforceability of the remainder of this Agreement shall not in
any way be affected or impaired thereby and the agreement
shall be carried out as nearly as possible in accordance with
its original terms and conditions.
(b)
Inurement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective
successors and permitted assigns and to the benefit of the
Holders.
(c)
Notices to Parties. All notices and other communications
between the parties hereunder shall be in writing and shall be
deemed to have been given if delivered personally or by
confirmed telecopy to the parties at the following addresses
(or at such other address for such party as shall be specified
in like notice):
(i)
if to US Co at:
Pioneer Natural Resources Company
1400 Williams Square West
5205 N. O'Connor Blvd.
Irving, Texas 75039-3746
Attention:
President
Telecopy:
(972) 402-7057
29
- 29 -
(ii)
if to US Co Sub at:
Pioneer Natural Resources (Canada) Ltd.
2900, 255 - 5th Avenue S.W.
Calgary, Alberta
T2P 3G6
Attention:
President
Telecopy:
(403) 231-3247
(iii)
if to the Trustee at:
if by mail or delivery:
Montreal Trust Company of Canada
710, 530 - 8th Avenue S.W.
Calgary, Alberta
T2P 3S8
Attention:
Marilyne Paynter
Telecopy:
(403) 267-6598
Any notice or other communication given personally shall be
deemed to have been given and received upon delivery thereof
and if given by telecopy shall be deemed to have been given
and received on the date of receipt thereof unless such day is
not a Business Day in which case it shall be deemed to have
been given and received upon the immediately following
Business Day.
(d)
Notice of Holders. Any and all notices to be given and any
documents to be sent to any Holders may be given or sent to
the address of such Holder shown on the register of Holders of
Exchangeable Shares in any manner permitted by the
Exchangeable Share Provisions and shall be deemed to be
received (if given or sent in such manner) at the time
specified in such Exchangeable Share Provisions, the
provisions of which the Exchangeable Share Provisions shall
apply mutatis mutandis to notices or documents as aforesaid
sent to such Holders.
(e)
Risk of Payments by Post. Whenever payments are to be made or
documents are to be sent to any Holder by the Trustee, by US
Co Sub or by US Co or by such Holder to the Trustee or to US
Co or US Co Sub, the making of such payment or sending of such
document sent through the post shall be at the risk of US Co
Sub or US Co, in the case of payments made or documents sent
by the Trustee or US Co Sub or US Co, and the Holder, in the
case of payments made or documents sent by the Holder.
(f)
Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
30
- 30 -
(g)
Jurisdiction. This Agreement shall be construed and enforced
in accordance with the laws of the Province of Alberta and the
laws of Canada applicable therein.
(h)
Attornment. US Co agrees that any action or proceeding arising
out of or relating to this Agreement may be instituted in the
courts of Alberta, waives any objection which it may have now
or hereafter to the venue of any such action or proceeding,
irrevocably submits to the jurisdiction of the said courts in
any such action or proceeding, agrees to be bound by any
judgment of the said courts and agrees not to seek, and hereby
waives, any review of the merits of any such judgment by the
courts of any other jurisdiction and hereby appoints US Co Sub
at its registered office in the Province of Alberta as US Co's
attorney for service of process.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to
be duly executed as of the date first above written.
PIONEER NATURAL
RESOURCES COMPANY
Per:
-----------------------------------Per:
------------------------------------
PIONEER NATURAL RESOURCES (CANADA) LTD.
Per:
-----------------------------------Per:
------------------------------------
MONTREAL TRUST COMPANY
OF CANADA
Per:
-----------------------------------Per:
------------------------------------
1
EXHIBIT 4.1
Organized Under the Laws of the State of Delaware
NUMBER
000
SHARES
PIONEER NATURAL RESOURCES COMPANY
Special Preferred Voting Stock
Par Value $.01
This Certifies that
[SPECIMEN]
---------------------------------------------------registered holder of
---------------------------------------------------
is the
Shares
of the fully paid and non-assessable Capital Stock of
Pioneer Natural Resources Company
transferable only on the books of the Corporation by the holder hereof in
person or by Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed
this
day
of
A.D. 19
--------------
- -------------------------------President
-------------------------------Secretary
2
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the
entireties
JT TEN - as joint tenants with
right of survivorship
and not as tenants
in common
(State)
UNIF GIFT MIN ACT Custodian
------------(Cust)
(Minor)
under Uniform Gifts to
Minors
Act
------------------
Additional abbreviations may also be used though not in the above list.
For value received,
--------
hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[
]
------------------------------------------------------------------------------------------------------------------------------------------------------(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
------------------------------------------------------------------------------------------------------------------------------------------------------Shares
---------------------------------------------------------------------represented by the within Certificate, and do hereby irrevocably constitute
and appoint
-------------------------------------------------------------------------------------------------------------------------------------------Attorney to transfer the said shares on the books of the within-named
Corporation with full power of substitution in the premises.
Dated,
-------------------------------------------------------------------NOTICE: THE SIGNATURE TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT,
OR ANY CHANGE WHATEVER.
In presence of
--------------------------------
1
EXHIBIT 4.2
PIONEER NATURAL RESOURCES (CANADA) LTD.
CONTINUED UNDER THE BUSINESS CORPORATIONS ACT (ALBERTA)
PROROGEE SELON LA LOI INTITULEE BUSINESS CORPORATIONS ACT (ALBERTA)
NUMBER - NUMERO
EX
SHARES - ACTIONS
CUSIP 723918 10 8
THIS CERTIFIES THAT
LES PRESENTES ATTESTENT QUE
IS THE REGISTERED HOLDER OF
EST LE PORTEUR INSCRIT DE
FULLY PAID AND NON-ASSESSABLE
EXCHANGEABLE SHARES WITHOUT PAR
VALUE IN THE CAPITAL OF
ACTIONS ECHANGEABLES ENTIEREMENT
LIBEREES, SANS VALEUR NOMINALE,
DU CAPITAL DE
PIONEER NATURAL RESOURCES (CANADA) LTD.
transferable on the books of the
Corporation by the registered holder
in person or by attorney duly authorized in writing upon surrender of
this certificate properly endorsed.
lesquelles peuvent etre transferees
dans les livres de la societe soit en
personne soit par fonde de pouvoir
dument autorise par ecrit sur remise
du present certificat dument endosse.
This certificate is not valid
until countersigned and registered
by the Registrar and Transfer Agent
of the Corporation.
la societe.
In Witness Whereof
Le present certificat ne
que s'il est contresigne
par l'agent charge de la
registres et l'agent des
the Corporation
has caused this certificate to be
signed by the facsimile signatures of
its duly authorized officers.
dirigeants dument autorises.
Dated/Date du
sera valide
et enregistre
tenue des
transferts de
En foi de quoi, la societe a fait
signer le present certificat par les
signatures autographiees de ses
COUNTERSIGNED AND REGISTERED - CONTRESIGNE ET ENREGISTRE
MONTREAL TRUST COMPANY OF CANADA
CALGARY
COMPAGNIE MONTREAL TRUST DU CANADA TORONTO
REGISTRAR AND TRANSFER AGENT
AGENT CHARGE DE LA TENUE DES REGISTRES ET AGENT DES TRANSFERTS
BY - PAR
SPECIMEN
-----------------------------AUTHORIZED OFFICER - DIRIGEANT
AUTORISE
/s/ GLEN SCHMIDT
PRESIDENT
PRESIDENT
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE TRANSFERABLE AT THE
OFFICES OF MONTREAL TRUST COMPANY OF
CANADA IN CALGARY, ALBERTA AND TORONTO,
ONTARIO.
/s/ MARK L. WITHROW
VICE PRESIDENT
VICE-PRESIDENT
LES ACTIONS REPRESENTEES PAR LE PRESENT
CERTIFICAT SONT CESSIBLES AUX PRINCIPAUX
BUREAUX DE LA COMPAGNIE MONTREAL TRUST
DU CANADA DANS LES VILLES DE CALGARY
(ALBERTA) ET TORONTO (ONTARIO).
2
The class of shares represented by this certificate has rights, privileges,
restrictions or conditions attached thereto and the Corporation will furnish to
a shareholder, on demand and without charge, a full copy of the text of the
rights, privileges, restrictions and conditions attached to the class of shares
represented by this certificate. The holder hereof also has certain rights and
is entitled to certain benefits pursuant to the Voting and Exchange Trust
Agreement (the "Agreement") among Pioneer Natural Resources Company ("Pioneer"),
the Corporation and Montreal Trust Company of Canada (the "Trustee"), including
(a) the right to instruct the Trustee with respect to the exercise of (i) voting
rights in respect of a special voting share of Pioneer and (ii) the right to
exchange the share(s) represented hereby for shares of common stock of Pioneer
and (b) the benefits of the obligation of Pioneer to effect the automatic
exchange of shares of common stock of Pioneer for the share(s) represented
hereby, pursuant to the terms and conditions of the Agreement. The Corporation
and Pioneer have entered into an agreement (the "Support Agreement") pursuant to
which Pioneer has agreed to take certain actions to ensure that the Corporation
will be able to make certain payments and cause to be delivered shares of common
stock of Pioneer in satisfaction of the obligations of the Corporation under the
rights, privileges, restrictions and conditions attaching to the shares
represented hereby. Copies of the Agreement and the Support Agreement are
available for inspection at the registered office of the Corporation. The
share(s) represented hereby are subject to certain overriding purchase rights of
Pioneer pursuant to the articles of the Corporation and the Plan of Arrangement
effected December 18, 1997 under the Business Corporations Act (Alberta) in
respect of Chauvco Resources Ltd. upon the proposed liquidation, dissolution or
winding-up of the Corporation and upon the proposed redemption by the
Corporation of the share(s) represented hereby, and notice of the terms and
conditions of such articles is hereby given.
La categone des actions representees par le present certificat comporte les
droits, privileges, restrictions ou conditions qui y sont rattaches et la
societe fournira a l'actionnaire, sur demande et sans frais, un exemplaire du
texte integral de tels droits, privileges, restrictions et conditions. Le
porteur des presentes a egalement certains droits et beneficie de certains
avantages suivant la convention de vote et d'echange en fideicommis (la
"convention") entre Pioneer Natural Resources (Canada) Ltd. ("Pioneer"), la
societe et la Compagnie Montreal Trust du Canada (le "fiduciaire"), y compris a)
le droit de donnor au fiduciaire des instructions a l'egard de l'exercice i) des
droits de vote rattaches a une action avec droit de vote special de Pioneer et
ii) du droit d'echanger les actions representees par les presentes contre des
actions ordinaires de Pioneer et b) le benefice de l'obligation de Pioneer
d'effectuer l'echange automatique d'actions ordinaires de Pioneer contre les
actions representees par les presentes, suivant les modalites de la convention.
La societe et Pioneer ont conclu une covnention (la "convention du soutien")
suivant laquelle Pioneer a convenu de prendre certaines mesures pour s'assurer
que la societe soit capable d'effectuer certains paiements et de faire en sorte
que soient livrees les actions ordinaires de Pioneer en reglement des
obligations de la societe decoulant des droits, privileges, restrictions et
conditions rattaches aux actions representees par les presentes. Des
exemplaires de la convention et de la convention de soutien pouvent etre
examines au siege social de la societe. Les actions representees par les
presentes sont assorties de certains droits d'achat derogatoires de Pioneer
suivant les statuts de la societe et le plan d'arrangement concernant Chauvco
Resources Ltd. conclu le 18 decembre 1997, en vertu de la Business Corporations
Act (Alberta) advenant la liquidation ou la dissolution proposees de la societe
ou advenant le rachat propose par la societe des actions representees par les
presentes, et avis des modalites de tels statuts est par les presentes donne.
- -------------------------------------------------------------------------------SHARE TRANSFER POWER
PROCURATION POUR LE TRANSFERT D'ACTIONS
Please insert social insurance number of transferee, if applicable
Priere d'inscrire le numero d'assurance sociale du cessionnaire, s'il y a lieu
------------------------------------------------------------------For Value Received, the undersigned hereby sells, assigns
Pour valeur recue, le soussigne vend, cede et transfere
and transfers unto
shares
actions
- -------------------------------------------------------------------------------------------------------------------------represented by this certificate, and does hereby irrevocably
representees par le present certificat et designe
constitute and appoint
irrevocablement
- ---------------------------------------------------------------------------------------------------------------------------------attorney to transfer the said shares on the registers of the
son fonde de pouvoir pour transferer lesdites actions au
within named Corporation with full power of substitution in
registre de la societe designee aux presentes avec plein
the premises.
pouvoir de substitution aux presentes.
- -------------------------------------------------------------------------------------------------------------------------(Date)
(Signature of Shareholder - Signature de l'actionnaire)
(Guarantee of Signature - Aval de la signature)
- -------------------------------------------------------------------------------NOTICE OF RETRACTION
To the Corporation and Pioneer
This notice is given pursuant to Article 6 of the provisions (the "Share
Provisions") attaching to the share(s) represented by this certificate and all
capitalized words and expressions used in this notice which are defined in the
Share Provisions have the meanings ascribed to such words and expressions in
such Share Provisions.
The undersigned hereby notifies the Corporation that, subject to the
Retraction Call Right referred to below, the undersigned desires to have the
Corporation redeem in accordance with Article 6 of the Share Provisions:
[ ]
all share(s) represented by this certificate; or
[ ]
--------------------------------------------- share(s) only.
The undersigned hereby notifies the Corporation that the Retraction Date
shall be
.
---NOTE: The Retraction Date must be a Business Day and must be not less than
three Business Days nor more than 10 Business Days after the date upon
which this notice is received by the Corporation. In the event that no
such Business Day is specified above, the Retraction Date shall be
deemed to be the tenth Business Day after the date on which this notice
is received by the Corporation.
The undersigned acknowledges the Retraction Call Right of Pioneer to
purchase all but not less than all the Retracted Shares from the undersigned and
that this notice shall be deemed to be a revocable offer by the undersigned to
sell the Retracted Shares to Pioneer in accordance with the Retraction Call
Right on the Retraction Date for the Retraction Price and on the other terms and
conditions set out in Section 6.3 of the Share Provisions. If Pioneer
determines not to exercise the Retraction Call Right, the Corporation will
notify the undersigned of such fact as soon as possible. This Notice of
Retraction, and offer to sell the Retracted Shares to Pioneer, may be revoked
and withdrawn by the undersigned by notice in writing given to the Corporation
at any time before the close of business on the Business Day immediately
preceding the Retraction Date.
The undersigned acknowledges that if, as a result of solvency provisions of
applicable law, the Corporation is unable to redeem all Retracted Shares, the
undersigned will be deemed to have exercised the Exchange Right (as defined in
the Agreement) so as to require Pioneer to purchase the unredeemed Retracted
Shares.
The undersigned hereby represents and
Pioneer that the undersigned has good
represented by this certificate to be
as the case may be, free and clear of
warrants to the Corporation and
title to, and owns, the share(s)
acquired by the Corporation or Pioneer,
all liens, claims and encumbrances.
[ ] Toronto
Please check applicable box if the securities and any cheque(s)
resulting from the retraction or purchase of the Retracted Shares
are to be held for pick-up by the shareholder at the principal
transfer office of the Transfer Agent in Toronto or Calgary,
failing which the securities and any cheque(s) will be mailed to
[ ] Calgary
the last address of the shareholder as it appears on the
register.
NOTE: This panel must be completed and this certificate, together with such
additional documents as the Transfer Agent may require, must be deposited
with the Transfer Agent at its principal transfer office in Toronto or
Calgary. The securities and any cheque(s) resulting from the retraction or
purchase of the Retracted Shares will be issued and registered in, and
made payable to, respectively, the name of the shareholder as it appears
on the register of the Corporation and the securities and cheque(s)
resulting from such retraction or purchase will be delivered to such
shareholder as indicated above, unless the form appearing immediately
below is duly completed.
AVIS DE RACHAT AU GRE DU PORTEUR
A la societe et a Pioneer
Le present avis est donne suivant l'article 6 des dispositions (les
"dispositions afferentes aux actions") rattachees aux actions representees par
le present certificat et certains mots utilises dans le present avis qui sont
definis dans les dispositions afferentes aux actions ont le sens qui leur est
attribue dans lesdites dispositions.
Par les presentes, le soussigne avise la societe que, sous reserve du
droit d'achat mentionne ci-apres, il desire que la societe rachete conformement
a l'article 6 des dispositions afferentes aux actions:
[ ]
[ ]
la totalite des actions representees par le present certificat; ou
____________________________________ action(s) seulement.
Le soussigne avise la societe que la date de rachat au gre du porteur est
le ___________________________.
NOTE: La date de rachat au gre du porteur doit etre un jour ouvrable et ne peut
pas etre de moins de trois jours ouvrables ni plus de 10 jours ouvrables
apres la date a laquelle la societe recoit le present avis. Si aucun
jour ouvrable n'est indique precedemment, la date de rachat au gre du
porteur est reputee etre le dixieme jour ouvrable apres la date a
laquelle la societe recoit le present avis.
Le soussigne reconnait que le droit d'achat de Pioneer permettant a
celle-ci de lui acheter la totalite mais non moins de la totalite des actions
ayant fait l'objet du privilege de rachat au gre du porteur et que le present
avis est repute etre une offre revocable par le soussigne de vendre a Pioneer
les actions a racheter a la demande du porteur conformement au droit d'achat a
la date de rachat au gre du porteur, au prix de rachat et suivant les autres
modalites etablies a l'article 6.3 des dispositions afferentes aux actions. Si
Pioneer decide de ne pas exercer le droit d'achat, la societe en avisera le
soussigne aussitot que possible. Le soussigne peut revoquer et retirer le
present avis de rachat au gre du porteur et ladite offre de vente a Pioneer en
donnant un avis ecrit a la societe en tout temps avant la fermeture des bureaux
le jour ouvrable precedant immediatement la date de rachat au gre du porteur.
Le soussigne reconnait que si, en raison de dispositions legislatives sur
l'insolvabilite applicables, la societe est incapable de racheter la totalite
des actions a racheter a la demande du porteur, il est repute avoir actions a
racheter a la demande du porteur qui n'auront pas ete rachetees.
Par les presentes, le soussigne declare et garantit a la societe et a
Pioneer qu'il a un titre de propriete bon et valable dans les actions
representees par le present certificat qui seront acquises par la societe ou
Pioneer, selon le cas, libres de toute priorite, reclamation et charge.
______________ ________________________________ ______________________________
(Date)
Signature of Shareholder (Guarantee of Signature Signature de l'actionnaire)
Aval de la signature
[ ] Toronto
Veuillez cocher la case applicable si les titres et les cheques
resultant du rachat ou de l'achat des actions a racheter a la
demande du porteur doivent etre gardes pour que l'actionnaire les
[ ] Calgary
recupere au bureau principal des transferts de l'agent des
transfert a Toronto ou a Calgary, sinon les titres et les cheques
seront postes a la derniere adresse de l'actionnaire qui parait
au registre.
NOTE: Cette partie doit etre remplie et le present certificat, avec les
document supplementaires que l'agent des transferts peut demander, doit
etre depose aupres de l'agent des transferts a son bureau principal des
transferts a Toronto ou Calgary. Les titres et les cheques resultant du
rachat au gre du porteur ou de l'achat des actions a racheter a la
demande du porteur seront emis, immatricules et payables au nom de
l'actionnaire comme il parait au registre de la societe et de tels titres
et cheques seront livres a l'actionnaire comme il est indique
precedemment, a moins que le formulaire qui suit soit dument rempli.
- --------------------------------------------------------------------------------------------Name of Person in Whose Name Securities or Cheque(s) Are To Be
Date
Registered, Issued or Delivered (please print)
Nom de la personne au nom de qui les titres ou les cheques doivent
etre immatricules, emis ou livres (en caracteres d'imprimerie)
- ---------------------------------------------------------------------------------------------Street Address or P.O. Box - Adresse ou boite postale
Signature of Shareholder Signature de l'actionnaire
- ---------------------------------------------------------------------------------------------City - Ville/Province
Signature Guaranteed by Signature avalisee par
- ---------------------------------------------------------------------
--------------------------
NOTE: If the notice of retraction is for less than all of the share(s)
represented by this certificate, a certificate representing the remaining
shares of the Corporation will be issued and registered in the name of
the shareholder as it appears on the register of the Corporation, unless
the Share Transfer Power hereon is duly completed in respect of such
shares.
NOTE: Si l'avis de rachat au gre du porteur vise moins de la totalite des
actions representees par le present certificat, un certificat
representant le reste des actions de la societe sera delivre et
immatricule au nom de l'actionnaire comme il parait au registre de la
societe, a moins que la procuration pour le transfert d'actions ait ete
dument remplie a l'egard de telles actions.
NOTICE OF EXERCISE OF EXCHANGE RIGHT UPON INSOLVENCY EVENT
To the Corporation, the Trustee and Pioneer
In accordance with, and subject to, the rights, privileges, restrictions
and conditions attaching to the share(s) represented by this certificate, the
undersigned hereby instructs the Trustee to exercise the Exchange Right (as
defined in the Agreement) upon the occurrence and during continuance of an
Insolvency Event (as defined in the Agreement) so as to require Pioneer to
purchase from the undersigned:
[ ]
all share(s) represented by this certificate; or
[ ]
________________________________________________ share(s) only.
The undersigned hereby represents and warrants to the Corporation and
Pioneer that the undersigned has good title to, and owns, the share(s)
represented by this certificate to be acquired by Pioneer free and clear of all
liens, claims and encumbrances.
[ ] Toronto
Please check applicable box if the securities and any cheque(s)
resulting from the exercise of the Exchange Right are to be held
for pick-up by the shareholder at the principal transfer office
of the Transfer Agent in Toronto or Calgary, failing which the
[ ] Calgary
securities and any cheque(s) will be mailed to the last address
of the shareholder as it appears on the register.
NOTE: This panel must be completed and this certificate, together with such
additional documents as the Transfer Agent may require, must be deposited
with the Transfer Agent at its principal transfer office in Toronto or
Calgary. The securities and any cheque(s) resulting from the exercise of
the Exchange Right will be issued and registered in, and made payable to,
respectively, the name of the shareholder as it appears on the register
of the Corporation and the securities and cheque(s) resulting from such
exchange will be delivered to such shareholder as indicated above, unless
the form appearing immediately below is duly completed.
AVIS D'EXERCICE DU DROIT D'ECHANGE LORS DE L'INSOLVABILITE
A la societe, au fiduciaire et a Pioneer
Sous reserve des droits, privileges, restrictions et conditions rattaches
aux actions representees par le present certificat et conformement a ceux-ci,
le soussigne demande au fiduciaire d'exercer le droit d'echange (selon la
definition dans la convention) a la survenance d'un cas d'insolvabilite (selon
la definition dans la convention) et tant qu'il durera de facon a obliger
Pioneer a lui acheter:
[ ]
la totalite des actions representees par le present certificat; ou
[ ]
________________________________________________ action(s) seulement.
Par les presentes, le soussigne declare et garantit a la societe et a
Pioneer qu'il a un titre de propriete bon et valable dans les actions
representees par le present certificat qui seront acquises par Pioneer, libres
de toute priorite, reclamation et charge.
______________ ________________________________ ______________________________
(Date)
Signature of Shareholder (Guarantee of Signature Signature de l'actionnaire)
Aval de la signature)
[ ] Toronto
Veuillez cocher la case applicable si les titres et les cheques
resultant de l'exercice du droit d'echange doivent etre gardes
pour que l'actionnaire les recupere au bureau principal des
[ ] Calgary
transferts de l'agent des transferts a Toronto ou a Calgary,
sinon les titres et les cheques seront postes a la derniere
adresse de l'actionnaire qui parait au registre.
NOTE: Cette partie doit etre remplie et le present certificat, avec les
document supplementaires que l'agent des transferts peut demander, doit
etre depose aupres de l'agent des transferts a son bureau principal des
transferts a Toronto ou Calgary. Les titres et les cheques resultant de
l'exercice du droit d'echange seront emis, immatricules et payables au
nom de l'actionnaire comme il parait au registre de la societe et de tels
titres et cheques seront livres a l'actionnaire comme il est indique
precedemment, a moins que le formulaire qui suit soit dument rempli.
- --------------------------------------------------------------------------------------------Name of Person in Whose Name Securities or Cheque(s) Are To Be
Date
Registered, Issued or Delivered (please print)
Nom de la personne au nom de qui les titres ou les cheques doivent
etre immatricules, emis ou livres (en caracteres d'imprimerie)
- ---------------------------------------------------------------------------------------------Street Address or P.O. Box - Adresse ou boite postale
Signature of Shareholder Signature de l'actionnaire
- ---------------------------------------------------------------------------------------------City - Ville/Province
Signature Guaranteed by Signature avalisee par
- ---------------------------------------------------------------------
--------------------------
NOTE: If the election to exchange is for less than all of the share(s)
represented by this certificate, the remaining shares will be registered
in the name of the shareholder as it appears on the register of the
Corporation, unless the Share Transfer Power hereon is duly completed in
respect of such shares.
NOTE: Si l'echange
present certificat,
l'actionnaire comme
procuration pour le
de telles actions.
vise moins de la totalite des actions representees par le
le reste des actions sera immatricule au nom de
il parait au registre de la societe, a moins que la
transfert d'actions ait ete dument remplie a l'egard
NOTICE:The signature to the Share Transfer Power, Notice of Retraction or
Notice of Exercise of Exchange Right must correspond with the name as
written upon the face of this certificate in every particular without
alteration or enlargement or any change whatsoever, and must be
guaranteed by a bank, trust company or member of a recognized stock
exchange whose signature is acceptable to the Transfer Agent and
Registrar.
AVIS: La signature apposee sur la procuration pour le transfert d'actions,
l'avis de rachat au gre du porteur ou l'avis d'exercice du droit
d'echange doit correspondre en tous points au nom ecrit au recto du
present certificat sans modification ni ajout d'aucune sorte et doit etre
avalisee par une banque, une societe de fiducie ou un membre d'une bourse
reconnue dont la signature est acceptable pour l'agent des transferts et
l'agent charge de la tenue des registres.
1
EXHIBIT 10.1
[PRIMARY CREDIT FACILITY]
================================================================================
AMENDED AND RESTATED CREDIT FACILITY AGREEMENT
PIONEER NATURAL RESOURCES COMPANY,
as BORROWER,
and
NATIONSBANK OF TEXAS, N.A.,
as ADMINISTRATIVE AGENT,
and
CIBC INC.,
as DOCUMENTATION AGENT,
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as DOCUMENTATION AGENT,
and
THE CHASE MANHATTAN BANK,
as SYNDICATION AGENT,
THE CO-AGENTS SIGNATORY HERETO,
and
THE OTHER LENDERS SIGNATORY HERETO
as of December 18, 1997
$1,075,000,000
================================================================================
2
TABLE OF CONTENTS
Page
ARTICLE
Section
Section
Section
Section
Section
1
1.1
1.2
1.3
1.4
1.5
DEFINITIONS AND REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Amendment of Defined Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
References and Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Calculations and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Making the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Requests for Revolving Loan Advances . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Procedure for Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Provisions for Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . .
Facility Fee; Amendment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Managing Agents' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Termination and Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . .
Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.11
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Payments to Lenders . . . . . . . . . . . . .
2.12
Letters of Credit . . . . . . . . . .
2.13
Requesting Letters of Credit . . . .
2.14
Reimbursement of Letters of Credit .
2.15
Letter of Credit Fees . . . . . . . .
2.16
Capital Reimbursement . . . . . . . .
2.17
Increased Cost of Eurodollar Portions
2.18
Availability . . . . . . . . . . . .
2.19
Funding Losses . . . . . . . . . . .
2.20
Taxes. . . . . . . . . . . . . . . .
2.21
Make-Whole Qualifications . . . . . .
2.22
Competitive Bid Advances . . . . . .
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19
20
21
22
22
24
25
25
26
26
19
27
28
28
31
31
32
33
33
34
36
38
ARTICLE 3
Section 3.1
Section 3.2
CONDITIONS PRECEDENT TO LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Initial Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Additional Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
41
ARTICLE 4
Section 4.1
Section 4.2
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrower's Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 45
Representation by Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
45
i
3
TABLE OF CONTENTS
(CONTINUED)
PAGE
---ARTICLE
Section
Section
Section
5
5.1
5.2
5.3
COVENANTS OF BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . .
49
53
56
49
ARTICLE
Section
Section
Section
Section
6
6.1
6.2
6.3
6.4
EVENTS OF
Events of
Remedies
Annulment
Indemnity
DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . .
57
62
62
63
57
ARTICLE
Section
Section
Section
Section
Section
Section
Section
Section
Section
7
7.1
7.2
7.3
7.4
7.5
7.6
7.7
7.8
7.9
AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appointment and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Agent's Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lenders' Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rights as Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sharing of Set-Offs and Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefit of Article 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Resignation and Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . .
65
65
66
66
67
67
68
68
68
64
ARTICLE
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
8
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9
8.10
8.11
8.12
8.13
8.14
8.15
8.16
8.17
8.18
8.19
8.20
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Waivers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Survival of Agreements; Cumulative Nature . . . . . . . . . . . . . . . . . . . . . . . . .
Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Limitation on Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Termination; Limited Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assignments; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Waiver of Jury Trial, Punitive Damages . . . . . . . . . . . . . . . . . . . . . . . . . .
Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nonliability of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Release of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forum Selection and Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . .
Assumption of Prior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Renewal, Extension or Rearrangement . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . .
69
70
71
71
71
72
73
74
76
76
77
77
77
77
77
78
78
79
79
79
69
ii
4
EXHIBITS AND SCHEDULES
Exhibits:
Exhibit A-1
Exhibit A-2
Exhibit A-3
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Subsidiaries' Counsel
Exhibit I
Exhibit J
Exhibit K-1
Exhibit K-2
Exhibit L
Exhibit M
Exhibit N
Exhibit O
Exhibit P
-
Form of Loan Note
Form of Swing Line Note
Form of Competitive Bid Note
Form of Guaranty
Form of Request for Advance
Form of Rate Election
Form of Request for Swing Line Advance
Form of Swing Line Participation Certificate
[Intentionally omitted]
Forms of Opinion of Borrower's and Restricted
Organization Chart of Borrower and its Subsidiaries
Form of Designated Officer's Certificate
Form of Election to Convert
Form of Release
Form of Agreement to be Bound
Form of Pledge Agreement
Form of Request for Competitive Bid Offer
Form of Competitive Bid Offer
Form of Bid Acceptance
Schedules:
Schedule
Schedule
Schedule
Schedule
Schedule
Schedule
iii
1
2
3
4
5
6
-
Schedule of Lenders' Commitments and Percentage Share
Disclosure Schedule
Schedule of Restricted Subsidiaries
Schedule of Insurance
Schedule of Security Instruments
Continuing Letters of Credit
5
AMENDED AND RESTATED CREDIT FACILITY AGREEMENT
THIS AMENDED AND RESTATED CREDIT FACILITY AGREEMENT is made as of
December 18, 1997 (together with all amendments, renewals, extensions and other
modifications, if any, from time to time hereafter made hereto, the "Agreement"
or "Credit Facility Agreement"), by and among PIONEER NATURAL RESOURCES
COMPANY, a Delaware corporation (the "Borrower"), and NATIONSBANK OF TEXAS,
N.A., CIBC INC., MORGAN GUARANTY TRUST COMPANY OF NEW YORK, THE CHASE MANHATTAN
BANK, in the capacities herein identified, the Co-Agents party hereto, and the
other Lenders from time to time parties hereto.
RECITALS:
A.
Reference is here made to that certain Credit Facility
Agreement - Primary Credit Facility, dated as of August 7, 1997, by and among
Pioneer USA, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Existing Credit Agreement") and the notes issued thereunder.
B.
Borrower has assumed effective as of the Effective Date (as
hereinafter defined) and hereby assumes, and Pioneer USA has assigned and
hereby assigns to Borrower, all of the indebtedness, obligations and
liabilities of Pioneer USA, evidenced by and outstanding under the Existing
Credit Agreement and all related instruments and documents (all such
indebtedness, obligations and liabilities under the Existing Credit Agreement
and/or such instruments and documents collectively, the "Prior Indebtedness").
C.
Borrower has determined that it is in its best interests to
assume the Prior Indebtedness and has voluntarily requested that Lenders, and
Lenders have agreed to, restructure, rearrange and renew the Prior Indebtedness
and the respective commitments of the Lenders and Agents party to the Existing
Credit Agreement into obligations and commitments hereunder.
D.
As a part of the restructuring and rearranging of the Prior
Indebtedness, Lenders shall modify their respective commitments under the
Credit Agreement such that on the Effective Date each Lender shall be obligated
hereunder, subject to the terms hereof, to the Loan Commitment stated on
Schedule 1 for such Lender.
E.
Any Loans outstanding under the Existing Credit Agreement on
the Effective Date bearing interest at a Eurodollar Rate shall be deemed
continued as a Loan under this Agreement at such Eurodollar Rate and for the
Eurodollar Interest Period with respect thereto under the Existing Credit
Agreement.
6
F.
Any Competitive Bid Advances outstanding under the Existing
Credit Agreement on the Effective Date shall be deemed continued as a
Competitive Bid Advance under this Agreement at the rate and for the term with
respect thereto under the Existing Credit Agreement.
G.
The Letters of Credit (hereinafter defined) outstanding under
the Existing Credit Agreement on the Effective Date described in Schedule 6
hereto shall be deemed continued as Letters of Credit under this Agreement with
the Lenders having on the Effective Date a participation therein equal to their
Percentage Share (hereinafter defined).
H.
Lenders and Borrower intend and have agreed to amend and
restate the Existing Credit Agreement in its entirety as and pursuant to this
Agreement.
NOW, THEREFORE, in consideration of the Recitals hereof and the mutual
covenants contained herein, the parties hereby agree to amend and restate the
Existing Credit Agreement in its entirety as follows:
ARTICLE 1
DEFINITIONS AND REFERENCES
Section 1.1
Defined Terms. As used in this Agreement, each of
the following terms has the meaning given it in this Section or in the sections
and subsections referred to below:
"Acquisition Agreement" has the meaning given it in Section 3.1(e).
"Acquisition" has the meaning given it in Section 3.1(e).
"Adjusted Eurodollar Rate" means, with respect to each particular
Eurodollar Portion and the associated Eurodollar Rate and Reserve Percentage,
the rate per annum determined hereunder by Administrative Agent on a daily
basis pursuant to the following formula:
AER
=
--------1.00 - RP
AER
ER
RP
EM
=
=
=
=
ER
+ EM
Adjusted Eurodollar Rate
Eurodollar Rate
Reserve Percentage
Eurodollar Margin
The Adjusted Eurodollar Rate shall change as and when the associated Reserve
Percentage and Eurodollar Margin change.
"Administrative Agent" means NationsBank of Texas, N.A., as
Administrative Agent hereunder and its successors and assigns in such capacity.
2
7
"Advance" means any Revolving Loan Advance, Competitive Bid Advance or
Swing Line Advance.
"Affiliate" means, as to any Person, each other Person that directly
or indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person.
"Agent" means any of the Managing Agents or the Collateral Agent
hereunder, solely in such capacities and not in their respective capacities as
Lenders.
"Agreement" means this Amended and Restated Credit Facility Agreement,
as this Amended and Restated Credit Facility Agreement may be amended, modified
or restated from time to time hereafter.
"Amendment Fee Rate" means 2.5 basis points.
"Applicable Rating Level" means the level set forth below that
corresponds to the highest of ratings issued from time to time by Moody's and
S&P, as applicable to Borrower's senior unsecured long-term debt:
Moody's
------Level
Level
Level
Level
Level
I
II
III
IV
V
S&P
--greater than Baa1
Baa1
Baa2
Baa3
less than Baa3
greater than BBB+
BBB+
BBB
BBBless than BBB-
For example, if the Moody's rating is Baa1 and the S&P rating is BBB, Level II
shall apply.
For purposes of the foregoing, (i) ")" means a rating more favorable
than; "(" means a rating less favorable than; (ii) if ratings for Borrower's
senior unsecured long-term debt shall not be available from S&P or Moody's,
Level V shall be deemed applicable; (iii) if any of the Rating Agencies shall
change its ratings nomenclature prior to the date all Obligations have been
paid and the Commitments canceled, Borrower and the Lenders shall negotiate in
good faith to amend the references to specific ratings in this definition to
reflect such change, and pending such amendment, if an appropriate Applicable
Rating Level is otherwise not determinable based upon the foregoing grid, the
last Applicable Rating Level in effect at the time of such change shall
continue to apply.
"Base Rate" means the fluctuating per annum rate of interest from time
to time in effect equal to the higher of (a) the rate of interest as publicly
announced by Administrative Agent as its "Prime Rate" or (b) the Federal Funds
Rate plus one-half of one percent (1/2 of 1%), whether or
3
8
not Borrower has notice thereof. Such rate is set by Administrative Agent as a
general rate of interest, taking into account such factors as Administrative
Agent may deem appropriate, it being understood that many of 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 Administrative Agent may make various commercial or other loans at rates
of interest having no relationship to such rate. If Administrative Agent's
Prime Rate or the Federal Funds Rate changes after the date hereof, the Base
Rate shall be automatically increased or decreased, as the case may be, without
prior notice to Borrower from time to time as of the effective time of each
change in Administrative Agent's Prime Rate or the Federal Funds Rate. The
Administrative Agent shall promptly thereafter notify Borrower of such change
in the Base Rate.
"Base Rate Portion" means that portion of the unpaid principal balance
of a Loan which is not made up of Eurodollar Portions, Swing Line Advances or
Competitive Bid Advances.
"Bid Acceptance" means a Bid Acceptance substantially in the form of
Exhibit P hereto with appropriate insertions.
"Borrower" is defined in the Preamble hereto.
"Business Day" means a day on which commercial banks are open for
business with the public in the State of Texas. Any Business Day in any way
relating to Eurodollar Portions (such as the day on which a Eurodollar Interest
Period begins or ends) must also be a day on which, in the reasonable, good
faith judgment of Administrative Agent, significant transactions in dollars are
carried out in the interbank eurocurrency market.
"Canadian Credit Facility" means that certain Credit Facility
Agreement, dated as of December 18, 1997, among Chauvco, as Borrower, Canadian
Imperial Bank of Commerce, as Arranger and Administrative Agent, Bank of Nova
Scotia, as Co-Syndication Agent, Royal Bank of Canada, as Co-Syndication Agent,
The Chase Manhattan Bank of Canada, as Co-Agent, Morgan Guaranty Trust Company
of New York, as Co-Agent, NationsBank of Texas, N.A., as Co-Agent, The
Toronto-Dominion Bank, as Co-Agent, and the Lenders party thereto, as such
agreement may be amended, modified or restated from time to time.
"Cash Collateral" has the meaning given it in Section 2.14(d).
"Chauvco" means Chauvco Resources Ltd., a corporation organized under
the laws of the Province of Alberta, Canada.
"Co-Agent" means each of Bank of America National Trust and Savings
Association, The Bank of New York, The Bank of Nova Scotia, Royal Bank of
Canada, Union Bank of California, N.A., The Fuji Bank, Limited - Houston
Agency, and Wells Fargo Bank, N.A., as Co-Agents, and their respective
successors and assigns in such capacity.
"Collateral Agent" means NationsBank of Texas, N.A., as collateral
agent under the Security Instruments and its successors and assigns in such
capacity.
4
9
"Commitment" means, with respect to each Lender, such Lender's Loan
Commitment.
"Competitive Bid Advances" has the meaning given it in Section 2.22.
"Competitive Bid Note" has the meaning given it in Section 2.22.
"Competitive Bid Obligations" means, at the particular time in
question, the sum of all outstanding Competitive Bid Advances.
"Competitive Bid Offer" has the meaning given it in Section 2.22.
"Competitive Bid Rate" has the meaning given it in Section 2.22.
"Consolidated" refers to the consolidation of any Person, in
accordance with GAAP, with its properly consolidated Subsidiaries. References
herein to a Person's Consolidated financial statements, financial position,
financial condition, or liabilities refer to the consolidated financial
statements, financial position, financial condition or liabilities, as the case
may be, of such Person and its properly consolidated Subsidiaries.
"Consolidated Interest Expense" is defined in Section 5.3(a).
"Credit Facility Agreement" means this Amended and Restated Credit
Facility Agreement, as this Amended and Restated Credit Facility Agreement may
be amended, modified or restated from time to time hereafter.
"Debt" of any Person means, without duplication:
(a)
indebtedness of such Person for borrowed money;
(b)
indebtedness of such Person constituting an obligation to pay
the deferred purchase price of property or services (other
than customary payment terms taken in the ordinary course of
such Person's business);
(c)
indebtedness of such Person evidenced by a bond, debenture,
note or similar instrument;
(d)
principal obligations under leases capitalized in accordance
with GAAP under which such Person is the lessee;
(e)
indebtedness, contingent or otherwise, of such Person with
respect to bankers' acceptances or the face amount of letters
of credit or applications or reimbursement agreements
therefor;
(f)
guaranties of such Person of indebtedness or obligations of
the type described in clauses (a), (b), (c), (d) or (e) above
of any other Person or obligations to purchase
5
10
or acquire or to otherwise protect or insure a creditor
against loss in respect of indebtedness or obligations of the
type described in clauses (a), (b), (c), (d) or (e) above of
any other Person, but excluding endorsements in the ordinary
course of business of negotiable instruments in the course of
collection;
(g)
indebtedness or obligations of the type described in clauses
(a), (b), (c), (d) or (e) above, which are secured by a Lien
on any property owned by such Person, whether or not such
indebtedness or obligations have been assumed by such Person
(limited however to the lesser of (1) the amount of its
liability or (2) the value of such property); and
(h)
the undischarged balance of any production payment created by
such Person or for the creation of which such Person directly
or indirectly received payment;
provided, however, Debt shall not include (1) accounts payable incurred in the
ordinary course of such Person's business, or (2) any obligations in respect of
(i) exchange, forward, future, swap, hedging or similar agreements and (ii)
prepayments for gas or oil production or gas or oil imbalances.
"Default" means any Event of Default and any default, event or
condition which would, with the giving of any requisite notices and the passage
of any requisite periods of time, constitute an Event of Default.
"Default Rate" means, at the particular time in question, two percent
(2%) per annum plus the Base Rate then in effect; provided, that, with respect
to any Eurodollar Portion with an Eurodollar Interest Period extending beyond
the date such Eurodollar Portion becomes due and payable, "Default Rate" shall
mean, during such Eurodollar Interest Period, two percent (2%) per annum plus
the related Eurodollar Rate and plus the applicable Eurodollar Margin.
"Designated Entity" means Borrower and each of the Restricted
Subsidiaries.
"Designated Officer" means any Executive Officer or any other
individual duly elected to and holding one or more of the offices of vice
president, managing director, executive director, secretary or assistant
secretary of a Designated Entity, or any other Person authorized in writing by
any Designated Entity to execute any Loan Document, in each case designated by
a Designated Entity and acceptable to Required Lenders.
"Disclosure Schedule" means (a) Schedule 2 hereto and (b) any
documents listed on such schedule and expressly incorporated therein by
reference, true and correct copies of which shall have been delivered to
Managing Agents and each other Lender prior to the date hereof. Insofar as any
representations and warranties made herein are incorporated by reference or
otherwise remade in Loan Documents delivered as of a date after the date
hereof, the term "Disclosure Schedule" shall in such representations and
warranties be deemed to refer as well to all other documents indicated by
Borrower to be part of the Disclosure Schedule and which Borrower has at the
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11
particular time in question delivered to the Managing Agents, the Co-Agents and
each other Lender and which have not been promptly objected to in writing by or
on behalf of the Required Lenders.
"Documentation Agent" means each of CIBC Inc. and Morgan Guaranty
Trust Company of New York, as Documentation Agents, and their respective
successors and assigns in such capacity.
"EBITDAX" is defined in Section 5.3(a).
"Effective Date" means the date the parties hereto shall have executed
and delivered counterparts hereof to Administrative Agent and Administrative
Agent shall have notified the parties hereto that the Effective Date shall have
occurred.
"Environmental Law" means any federal, state, or local statute, or
rule or regulation promulgated thereunder, any judicial or administrative order
or judgment to which Borrower, or any of its Subsidiaries is a party or which
are applicable to Borrower or any of its Subsidiaries or its or their
respective properties (whether or not by consent), and any provision or
condition of any permit, license or other governmental operating authorization,
relating to protection of the environment, persons or the public welfare from
actual or potential exposure or the effects of exposure to any actual or
potential release, discharge, spill or emission (whether past or present) of,
or regarding the manufacture, processing, production, gathering,
transportation, importation, use, treatment, storage or disposal of, any
chemical, raw material, pollutant, contaminant or toxic or hazardous substance
or waste.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.
"ERISA Plan" means any pension benefit plan subject to Title IV of
ERISA maintained by any Designated Entity or any Affiliate thereof with respect
to which any Designated Entity has a fixed or contingent liability.
"Eurodollar Interest Period" means, with respect to each particular
Eurodollar Portion, a period of one (1), two (2), three (3) or six (6) months,
or, subject to Section 2.3, a period of nine (9) or twelve (12) months, as
specified in the Rate Election applicable thereto, beginning on and including
the date specified in such Rate Election (which must be a Business Day), and
ending on but not including the same day of the relevant month as the day on
which it began (e.g., a period beginning on the third day of one month shall
end on but not include the third day of another month), or if such month has no
numerically corresponding day, on the last Business Day of such month, and
provided that each Eurodollar Interest Period which would otherwise end on a
day which is not a Business Day shall end on the next succeeding Business Day
(unless such next succeeding Business Day is the first Business Day of a
calendar month, in which case such Eurodollar Interest Period shall end on the
immediately preceding Business Day). No Eurodollar Interest Period may be
elected for any Eurodollar Portion which would extend past the Maturity Date of
the Loan of which the Eurodollar Portion is a part.
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12
"Eurodollar Margin" means, on any date, with respect to each
Eurodollar Portion of a Revolving Loan, the number of basis points per annum
set forth below based on the Applicable Rating Level on such date:
Applicable
Rating Level
-----------Level
Level
Level
Level
Level
I
II
III
IV
V
Eurodollar
Margin
---------18.0
20.0
23.0
28.0
45.0
b.p.
b.p.
b.p.
b.p.
b.p.
Changes in the Eurodollar Margin will occur automatically without prior notice.
Administrative Agent will give notice promptly to Borrower and the Lenders of
changes in the Eurodollar Margin.
"Eurodollar Portion" means the unpaid principal balance of a Loan
which Borrower designates as such in a Rate Election.
"Eurodollar Rate" means, with respect to each particular Eurodollar
Portion within a Tranche and with respect to the related Eurodollar Interest
Period, the rate of interest per annum (stated to the nearest 10,000ths of 1%)
determined by Administrative Agent in accordance with its customary general
practices to be representative of the rates (stated to the nearest 10,000ths of
1%) at which deposits of dollars are offered to Administrative Agent at
approximately 10:00 a.m., Dallas, Texas time, two Business Days prior to the
first day of such Eurodollar Interest Period by prime banks in the interbank
eurocurrency market which have been selected by Administrative Agent in
accordance with its customary general practices for delivery on the first day
of such Eurodollar Interest Period in an amount equal or comparable to the
amount of Administrative Agent's Eurodollar Portion within such Tranche and for
a period of time equal or comparable to the length of such Eurodollar Interest
Period. The Eurodollar Rate determined by Administrative Agent with respect to
a particular Eurodollar Portion shall be fixed at such rate for the duration of
the associated Eurodollar Interest Period. If Administrative Agent is unable
so to determine the Eurodollar Rate for any Eurodollar Portion, Borrower shall
be deemed not to have elected such Eurodollar Portion.
"Eurodollars" is defined in Section 2.18.
"Event of Default" has the meaning given it in Section 6.1.
"Exchangeable Shares" has the meaning set forth in the Proxy.
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13
"Executive Officer" means any individual duly elected to and holding
one or more of the following offices of Borrower: President, Chief Executive
Officer, Chief Financial Officer, Executive Vice President or Senior Vice
President.
"Existing Credit Agreement" has the meaning given it in Recital A.
"Facility Amount" means the aggregate amount of the Commitments (which
amount shall initially be $1,075,000,000), as such amount may be reduced from
time to time pursuant to the terms of this Agreement.
"Facility Fee Rate" means, on any date that a facility fee is due
pursuant to Section 2.7, the number of basis points per annum set forth below
based on the Applicable Rating Level on such date:
Applicable
Rating Level
-----------Level
Level
Level
Level
Level
I
II
III
IV
V
Facility Fee Rate
Margin
-----9.0 b.p.
10.0 b.p.
12.0 b.p.
14.0 b.p.
20.0 b.p.
Changes in the Facility Fee Rate will occur automatically without prior notice.
Administrative Agent will give notice promptly to Borrower and the Lenders of
changes in the Facility Fee Rate.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day, as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to
Administrative Agent on such day on such transactions as determined by
Administrative Agent.
"Fiscal Quarter" means a three-month period ending on March 31, June
30, September 30 or December 31 of each year.
"Fiscal Year" means a twelve-month period ending on December 31 of
each year.
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"Foreign Restricted Subsidiary" means any Restricted Subsidiary of the
Borrower organized under the laws of any jurisdiction other than the United
States or any state thereof.
"GAAP" means those generally accepted accounting principles and
practices which are recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor) and which, in the case of
Borrower and its Consolidated Subsidiaries, are applied for all periods after
the date hereof in a manner consistent with the manner in which such principles
and practices were applied to the Updated Financial Statements (except for
changes concurred with by Borrower's independent public accountants). If any
change in any accounting principle or practice is required by the Financial
Accounting Standards Board (or any such successor) in order for such principle
or practice to continue as a generally accepted accounting principle or
practice, all reports and financial statements required hereunder with respect
to Borrower or with respect to Borrower and its Consolidated Subsidiaries must
be prepared in accordance with such change. In the event any changes in GAAP
materially affect the calculation of Borrower's EBITDAX to Consolidated
Interest Expense Ratio or Consolidated Total Funded Debt to Total
Capitalization as defined and described in Sections 5.3 (a) and (b),
respectively, Borrower and Lenders agree to enter into good faith negotiations
for an agreement to revise such tests to take into account such changes in
GAAP; until Borrower and Majority Lenders have entered into such an agreement,
such financial calculation shall continue to be made in accordance with GAAP as
in effect immediately preceding the date of such change.
"Governmental Authority" means any national, state, county or
municipal government, domestic or foreign, any agency, board, bureau,
commission, court, department or other instrumentality of any such government,
or any arbitrator in any case which has jurisdiction over any of the Lenders,
Borrower, its Subsidiaries or any properties of Borrower or its Subsidiaries.
"Guaranty" means (i) any guaranty substantially in the form of Exhibit
B, with appropriate insertions and deletions, executed or to be executed by any
Restricted Subsidiary, as from time to time amended, modified, or supplemented,
or (ii) any Guaranty delivered pursuant to Section 3.1(a)(1) of the Agreement
as from time to time amended, modified, or supplemented, as the case may be.
"Incumbent Directors" has the meaning given in Section 6.1(i).
"Issuing Bank" means any Lender which in its sole discretion agrees to
be and is designated by Borrower and accepted by the Administrative Agent to
issue one or more Letters of Credit in its capacity as an issuer of Letters of
Credit hereunder, and its successors and assigns in such capacity.
"LC Application" means any application for a Letter of Credit
hereafter made by Borrower to an Issuing Bank.
"LC Conditions" has the meaning given it in Section 2.12.
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15
"LC Obligations" means, at the particular time in question, the sum of
the Matured LC Obligations plus the aggregate amounts which any Issuing Bank or
Lender might be called upon to advance under all then outstanding Letters of
Credit.
"Letter of Credit" means (i) any letter of credit issued by an Issuing
Bank upon the application of Borrower and (ii) each letter of credit
outstanding on the Effective Date listed on Schedule 6 hereto which letters of
credit will be deemed to be issued and outstanding under this Agreement as of
the Effective Date. Each Letter of Credit shall be classified by Issuing Bank
as a "Commercial" Letter of Credit or a "Standby" Letter of Credit, in
accordance with the laws and regulations applicable to Issuing Bank from time
to time and in accordance with Issuing Bank's customary practices at such times
for reporting to regulatory authorities.
"Lenders" means each party hereto (other than Borrower), including,
without limitation, NationsBank of Texas, N.A. in its capacity as a Lender
hereunder rather than as Administrative Agent or Collateral Agent, CIBC Inc. in
its capacity as a Lender hereunder rather than as Documentation Agent, Morgan
Guaranty Trust Company of New York in its capacity as a Lender hereunder rather
than as Documentation Agent, The Chase Manhattan Bank in its capacity as a
Lender hereunder rather than as Syndication Agent, the Co-Agents in their
capacity as Lenders hereunder rather than as Co- Agents, and the successors and
assigns of each as holder of a Note.
"Lien" means, any lien, mortgage, security interest, pledge, deposit,
production payment, encumbrance, rights of a vendor under any title retention
or conditional sale agreement or lease or other arrangement substantially
equivalent thereto.
"Loan" means any of a Revolving Loan, Competitive Bid Advance or Swing
Line Advance, as the context requires.
"Loan Commitment" means, with respect to each Lender, the amount set
forth as such Lender's Loan Commitment opposite the name of such Lender in the
column headed "New Commitment" or otherwise indicated on Schedule 1 attached
hereto (or, if such Lender is an assignee, the amount of its Loan Commitment
set forth in the assignment pursuant to which it became a Lender) as such
amount may be reduced or increased from time to time pursuant to any assignment
to which it is a party or otherwise pursuant to the terms of this Agreement.
"Loan Commitment Period" means the period from and including the date
hereof until and including the Maturity Date (or, if earlier, the day on which
the Loan Notes first become due and payable in full or the Loan Commitments are
terminated upon notice by Administrative Agent to Borrower pursuant to Section
6.1).
"Loan Documents" means this Credit Facility Agreement, as the same may
have been or may be amended from time to time hereafter, the Notes, the LC
Applications, the Letters of Credit, the Swing Line Participation Certificate,
the Guaranties, the Disclosure Schedule, the
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16
Security Instruments, the agreements with the Managing Agents referred to in
Section 2.8, any amendments to any of the foregoing, and all other agreements,
certificates, notices and disclosures at any time executed or certified by a
Designated Officer of and on behalf of a Designated Entity and delivered by
such Designated Entity or such Designated Officer in connection herewith or
therewith (exclusive of term sheets, commitment letters, correspondence and
similar documents used in the negotiation hereof or thereof).
"Loan Note" has the meaning given it in Section 2.1(c).
"Majority Lenders" means Lenders whose aggregate Percentage Shares
exceed 50%.
"Managing Agents" means Administrative Agent, each Documentation Agent
and the Syndication Agent hereunder and their successors and assigns in such
capacities.
"Margin Regulations" means, as applicable, Regulations G, U and X of
the Board of Governors of the Federal Reserve System, as from time to time in
effect.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the financial condition of Borrower and its Subsidiaries taken as a whole, (b)
the ability of Borrower and its Subsidiaries taken as a whole to operate their
respective businesses, (c) the ability of Borrower to meet its obligations
under the Loan Documents on a timely basis or (d) the ability of Designated
Entities taken as a whole to meet their obligations under the Loan Documents on
a timely basis; provided, however, that a material adverse effect that is
limited to an Unrestricted Subsidiary shall not (i) be a Material Adverse
Effect or (ii) be included in the determination of whether a Material Adverse
Effect shall have occurred or shall be expected to occur.
"Matured LC Obligations" means all amounts paid by Issuing Bank or any
Lender on drafts or demands for payment drawn or made under any Letter of
Credit (or under or in connection with any LC Application) which have not been
repaid to the Issuing Bank or Lender (with the proceeds of a Revolving Loan
Advance or otherwise).
"Maturity Date" means the earlier of (a) August 7, 2002 and (b) the
date on which the Loan Commitment of each Lender is reduced to zero or
terminated.
"Maximum Lawful Rate" has the meaning given it in Section 8.6.
"Mesa" means Mesa, Inc., a Delaware corporation.
"Moody's" means Moody's Investors Service, Inc. and any successor
thereto that is a nationally-recognized rating agency.
"Section 956" has the meaning given it in Section 6.1(k).
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17
"Note" means any Loan Note, Swing Line Note or Competitive Bid Note.
"Notice Period" has the meaning given it in Section 6.4.
"Obligations" means all Debt from time to time owing by any of
Designated Entities to any Agent or any Lender under or pursuant to any of the
Loan Documents, including, without limitation, all LC Obligations, Swing Line
Obligations and Competitive Bid Obligations. "Obligation" means any part of
the Obligations.
"Outside Debt" means (i) Pioneer USA's $150,000,000 8 7/8% Senior
Notes due 2005 which obligations thereunder will be transferred to Borrower
pursuant to the Restructuring, (ii) Pioneer USA's $150,000,000 8 1/4% Senior
Notes due 2007 which obligations thereunder will be transferred to Borrower
pursuant to the Restructuring, (iii) Mesa's 10 5/8% Senior Subordinated Notes
due 2006 which obligations thereunder will be transferred to Borrower pursuant
to the Restructuring, and (iv) Mesa's 11 5/8% Senior Subordinated Discount
Notes due 2006 which obligations thereunder will be transferred to Borrower
pursuant to the Restructuring..
"P&P Petroleum" means Parker & Parsley Petroleum Company, a Delaware
corporation.
"Percentage Share" means, with respect to any Lender (a) when used in
Section 2.1 or 2.3, in any Request for Advance or when no Loans (other than
Swing Line Advances or Competitive Bid Advances, if applicable) are outstanding
hereunder, the percentage set forth opposite such Lender's name on Schedule 1
to this Agreement, or in documents of assignment delivered pursuant to Section
8.8, as such percentage may be adjusted from time to time by such assignment
documents, and (b) when used otherwise, the percentage equal to the unpaid
principal balance of such Lender's Loans, other than Swing Line Advances and
Competitive Bid Advances, at the particular time in question divided by the
aggregate unpaid principal balance of all Loans of all Lenders, other than
Swing Line Advances and Competitive Bid Advances, at such time.
"Permitted Liens" means (a) Liens for taxes, assessments or other
governmental charges or levies if the same shall not at the particular time in
question be due and delinquent or (if foreclosure, distraint, sale or other
similar proceedings shall not have been commenced or, if commenced, shall have
been stayed) are being contested in good faith and by appropriate proceedings,
and if the subject Borrower shall have set aside on its books such reserves
(segregated to the extent required by sound accounting practices) as may be
required by GAAP or otherwise determined by the Board of Directors of Borrower
to be adequate with respect thereto; (b) Liens of carriers, warehousemen,
mechanics, laborers, materialmen, landlords, vendors, workmen, and operators
arising in the ordinary course of business or incident to the exploration,
development, operations and maintenance of oil, gas and other hydrocarbon
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properties and related facilities and assets, for sums not yet due or being
contested in good faith and by appropriate proceedings, if Borrower shall have
set aside on its books such reserves (segregated to the extent required by
sound accounting practices) as may be required by GAAP or otherwise determined
by the Board of Directors of Borrower to be adequate with respect thereto; (c)
Liens incurred in the ordinary course of Designated Entities' respective
businesses in connection with worker's compensation, unemployment insurance and
other social security legislation (other than ERISA); (d) Liens incurred in the
ordinary course of Designated Entities' businesses to secure the performance of
bids, tenders, trade contracts, leases (statutory only), statutory obligations,
surety and appeal bonds, performance and return-of-money bonds and other
obligations of a like nature; (e) Liens, easements, rights-of-way restrictions,
servitudes, permits, conditions, covenants, exceptions, reservations and other
similar encumbrances incurred in the ordinary course of Designated Entities'
businesses or existing on property and not in the aggregate materially
interfering with the ordinary conduct of Designated Entities' businesses; (f)
legal or equitable encumbrances deemed to exist by reason of negative pledges
such as in Section 5.2 of this Agreement or the existence of any litigation or
other legal proceeding and any related lis pendens filing (excluding any
attachment prior to judgment, judgment lien or attachment lien in aid of
execution on a judgment); (g) rights of a common owner of any interest in
property held by any Designated Entity as such common owner; (h) farmout,
carried working interest, joint operating, unitization, royalty, overriding
royalty, sales and similar agreements relating to the exploration or
development of, or production from, oil and gas properties incurred in the
ordinary course of business, (i) Liens arising pursuant to Section 9.319 of the
Texas Uniform Commercial Code or other similar statutory provisions of other
states with respect to production purchased from others; (j) Liens represented
by capital leases permitted under this Agreement; (k) any defects,
irregularities, or deficiencies in title to easements, rights-of-way or other
properties which do not in the aggregate have a Material Adverse Effect; (l)
Liens existing pursuant to the Security Instruments; (m) Liens existing in
favor of Agents and Lenders under the Loan Documents; (n) Liens on assets of a
Subsidiary of Borrower in favor of Borrower or another Restricted Subsidiary;
(o) Liens on any property or assets owned or leased by Borrower or any
Subsidiary existing at the time such property or asset was acquired (or at the
time such Person became a Subsidiary); provided that (1) in the case of the
acquisition of a Subsidiary, such lien only encumbers property or assets of
such Subsidiary immediately prior to or at the time of acquisition by Borrower
of such Subsidiary and (2) Borrower will use its best efforts to eliminate such
Liens in a timely manner; (p) purchase money Liens, so long as such Liens only
encumber property or assets (including any improvements thereon, accessions
thereto or proceeds thereof) acquired with the proceeds of purchase money
indebtedness incurred in connection with such Lien; (q) Liens on the stock or
other ownership interest of or in any Unrestricted Subsidiary; (r) Liens in
renewal or extension of any of the foregoing permitted Liens, so long as
limited to the property or assets encumbered and the amount of indebtedness
secured immediately prior to such renewal or extension; and (s) Liens approved
in writing by or on behalf of the Required Lenders.
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19
"Person" means an individual, corporation, company, partnership,
association, joint stock company, trust or trustee thereof, estate or executor
thereof, unincorporated organization or joint venture, court or governmental
unit or any agency or subdivision thereof, or any other legally recognizable
entity.
"Pioneer Canada" means Pioneer Natural Resources (Canada) Ltd., a
corporation organized under the laws of the Province of Alberta, Canada.
"Pioneer USA" means Pioneer Natural Resources USA, Inc., a Delaware
corporation.
"Pledge Agreement" means a Pledge Agreement substantially in the form
of Exhibit M hereto, or other form of pledge agreement or deed of mortgage, in
form and substance satisfactory to the Managing Agents and the subject
Designated Entity, pledging an interest in the capital shares or stock of,
partnership interests in, or other ownership interest in, a Restricted
Subsidiary as from time to time amended, modified and supplemented.
"Primary Credit Facility" means the facility for loans and the
issuance of Letters of Credit established pursuant to this Agreement.
"Prior Indebtedness" has the meaning given it in Recital B.
"Proxy" has the meaning given it in Section 4.1(f)(ii).
"Rate Election" has the meaning given it in Section 2.3.
"Rating Agencies" means any or all of S&P or Moody's.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as from time to time in effect.
"Request for Advance" means a written or telephonic request, or a
written confirmation, made by a Borrower which meets the requirements of
Section 2.2.
"Request for Competitive Bid Offer" has the meaning given it in
Section 2.22.
"Request for Swing Line Bid" has the meaning given it in Section
2.5(a).
"Required Lenders" means Lenders whose aggregate Percentage Shares
exceed 66 2/3%.
"Reserve Percentage" means, on any day with respect to each particular
Eurodollar Portion in a Tranche, the maximum reserve requirement, as determined
by Administrative
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20
Agent (including without limitation any basic, supplemental, marginal,
emergency or similar reserves), expressed as a percentage and rounded to the
nearest 1/100th of 1%, which would then apply to Administrative Agent under
Regulation D or successor regulations issued from time to time by the Board of
Governors of the Federal Reserve System with respect to "Eurocurrency
liabilities" (as such term is defined in Regulation D) equal in amount to
Administrative Agent's Eurodollar Portion in such Tranche, were Administrative
Agent to have any such Eurocurrency liabilities. If such reserve requirement
shall change after the date hereof, the Reserve Percentage shall be
automatically increased or decreased, as the case may be, from time to time as
of the effective time of each such change in such reserve requirement.
"Restricted Payment" means any investment, contribution, loan or
advance of cash to a Person (other than (i) Borrower or (ii) a Subsidiary that
is not an Unrestricted Subsidiary), other than:
(a)
prudent short-term investments;
(b)
investments, contributions, loans or advances disclosed in the
Updated Financial Statements or in the Disclosure Schedule or
in disclosures made subsequent to the date hereof and
consented to in writing by or on behalf of the Majority
Lenders or otherwise made to effect the Acquisition and the
subsequent restructuring of certain of the Restricted
Subsidiaries, as described in the Acquisition Agreement;
(c)
investments, contributions, loans or advances made by any
Designated Entity in the ordinary course of its business; or
(d)
contributions made by Borrower to any of its Subsidiaries
arising out of or in respect of Letters of Credit issued
hereunder and used for the general corporate purposes of such
Subsidiary (i) so long as no amounts have been drawn under any
such Letter of Credit or (ii) to the extent that Borrower has
been reimbursed by such Subsidiary for amounts drawn under any
such Letter of Credit.
"Restricted Subsidiary" means each Subsidiary of Borrower that, at the
particular time in question, (i) owns directly or indirectly any material
assets or any interest in any other Restricted Subsidiary and (ii) either (a)
has not been designated as an Unrestricted Subsidiary or (b) has been
redesignated as a Restricted Subsidiary. The Restricted Subsidiaries on the
Effective Date are listed on Schedule 3 attached hereto and each other
Subsidiary of Borrower as of the Effective Date shall be an Unrestricted
Subsidiary. A Restricted Subsidiary shall remain such (even if it no longer
owns directly or indirectly any interest in any of the material assets) until
designated as an Unrestricted Subsidiary pursuant to Section 5.2(i). An
Unrestricted Subsidiary shall remain an Unrestricted Subsidiary unless
redesignated as a Restricted Subsidiary pursuant to the provisions of Section
5.2(i).
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"Restructuring" has the meaning given it in Section 5.2(l).
"Revolving Loan" has the meaning given it in Section 2.1(c).
"Revolving Loan Advance" has the meaning given it in Section 2.1(a).
"S&P" means Standard & Poor's Ratings Group and any successor thereto
that is a nationally-recognized rating agency.
"Security Instruments" shall mean the agreements or instruments
described or referred to in Schedule 5, the Guaranties, the Pledge Agreement,
and any and all other agreements or instruments now or hereafter executed and
delivered by any Designated Entity or any other Person in connection with, or
as security for the payment or performance of, the Notes, LC Obligations, this
Agreement or the Guaranties, as any such instrument or agreement may be
supplemented, amended, renewed, extended or restated from time to time.
"Stock Pledge Release Date" has the meaning given to it in Section
8.16.
"Subsidiary" means, with respect to any Person, any corporation, which
is directly or indirectly (through one or more intermediaries) controlled by or
with respect to which fifty percent (50%) or more of the stock having ordinary
voting power to elect the board of directors is owned by such Person, or any
association, partnership, joint venture, or other non-corporate business
entity, enterprise or organization which is directly or indirectly (through one
or more intermediaries) controlled by, or owned one hundred percent (100%) by,
such Person, provided that associations, joint ventures or other relationships
(a) which are established pursuant to an operating agreement or similar
agreement or which are partnerships for purposes of federal income taxation
only, (b) which are not partnerships (or subject to the Uniform Partnership
Act) under applicable state law, and (c) whose businesses are limited to the
exploration, development and operation of oil, gas or mineral properties and
interests owned directly by the parties in such associations, joint ventures or
relationships, shall not be deemed to be "Subsidiaries" of such Person.
"Swing Line Advances" has the meaning given it in Section 2.4.
"Swing Line Lender" means NationsBank of Texas, N.A., its successors
and assigns.
"Swing Line Note" has the meaning given it in Section 2.5(e).
"Swing Line Obligations" means, at the particular time in question,
the sum of all outstanding Swing Line Advances.
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"Swing Line Participation Certificate" means a Swing Line
Participation Certificate substantially in the form of Exhibit "F".
"Swing Line Rate" has the meaning given it in Section 2.5(a).
"Syndication Agent" means The Chase Manhattan Bank, as Syndication
Agent hereunder and its successors and assigns in such capacity.
"Taxes" has the meaning given it in Section 2.20.
"Termination Event" means (a) the occurrence with respect to any ERISA
Plan of (1) a reportable event described in Sections 4043(b)(5) or (6) of ERISA
or (2) any other reportable event described in Section 4043(b) of ERISA other
than a reportable event not subject to the provision for 30-day notice to the
Pension Benefit Guaranty Corporation pursuant to a waiver by such corporation
under Section 4043(a) of ERISA, or (b) the withdrawal of any Designated Entity
or of any Affiliate of any Designated Entity from an ERISA Plan during a plan
year in which it was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA, or (c) the filing of a notice of intent to terminate any ERISA Plan
or the treatment of any ERISA Plan amendment as a termination under Section
4041 of ERISA, or (d) the institution of proceedings to terminate any ERISA
Plan by the Pension Benefit Guaranty Corporation under Section 4042 of ERISA,
or (e) 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 ERISA Plan.
"364 Day Credit Facility" means that certain Amended and Restated
Credit Facility Agreement, dated as of December 18, 1997, among Pioneer Natural
Resources Company, as Borrower, NationsBank of Texas, N.A., as Administrative
Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New
York, as Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders party thereto, as such agreement
may be amended, modified or restated from time to time.
"Total Capitalization" means the sum (without duplication) of (i)
Consolidated Total Funded Debt of Borrower and its Subsidiaries, plus (ii)
Consolidated shareholder's equity of Borrower and its Subsidiaries.
"Total Funded Debt" means all Debt of the type referred to in clauses
(a), (b), (c), (d), (g) (excluding Debt of the type referred to in clause (e)
of the definition of "Debt") and (h) of the definition of "Debt".
"Tranche" has the meaning given it in Section 2.3.
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"Unrestricted Subsidiary" means each Subsidiary of Borrower which is
not designated as a Restricted Subsidiary on Schedule 3 attached hereto or is
designated by Borrower as an Unrestricted Subsidiary pursuant to Section
5.2(i).
"Updated Financial Statements" means (a) the audited annual
Consolidated financial statements of P&P Petroleum and its Consolidated
Subsidiaries dated as of December 31, 1996, (b) the audited annual Consolidated
financial statements of Mesa and its Consolidated Subsidiaries dated as of
December 31, 1996, and (c) the unaudited Consolidated financial statements and
unaudited consolidating balance sheets and statements of operations of Borrower
and its Consolidated Subsidiaries prepared in reasonable detail in accordance
with GAAP and dated as of September 30, 1997.
Section 1.2
Exhibits and Schedules. All Exhibits and Schedules
attached to this Agreement are a part hereof for all purposes.
Section 1.3
Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein, the terms defined in
this Agreement which refer to a particular agreement, instrument or document
also refer to and include all renewals, extensions, modifications, amendments
and restatements of such agreement, instrument or document, provided that
nothing contained in this Section shall be construed to authorize or require
any such renewal, extension, modification, amendment or restatement.
Section 1.4
References and Titles. All references in this
Agreement to Exhibits, Schedules, articles, sections, subsections and other
subdivisions refer to the Exhibits, Schedules, articles, sections, subsections
and other subdivisions of this Agreement unless expressly provided otherwise.
Titles appearing at the beginning of any subdivisions are for convenience only
and do not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this
Agreement", "this Primary Credit Facility", "Primary Credit Facility", "this
instrument", "herein", "hereof", "hereby", "hereunder" and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited. The phrases "this section" and "this subsection"
and similar phrases refer only to the sections or subsections hereof in which
such phrases occur. The word "or" is not exclusive, and the word "including"
(in its various forms) means "including without limitation". Pronouns in
masculine, feminine and neuter genders shall be construed to include any other
gender, and words in the singular form shall be construed to include the plural
and vice versa, unless the context otherwise requires.
Section 1.5
Calculations and Determinations. All calculations
under the Loan Documents of interest chargeable with respect to Eurodollar
Portions and Competitive Bid Advances shall be made on the basis of actual days
elapsed (including the first day but excluding the last) and a year of 360
days, subject, however, to the limitations set forth in Section 8.6 hereof.
All other calculations of interest and fees made under the Loan Documents
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shall be made on the basis of actual days elapsed (including the first day but
excluding the last) and a year of 365 or 366 days, as appropriate. Unless
otherwise expressly provided herein or unless Required Lenders otherwise
consent, all financial statements and reports furnished to Administrative Agent
or any other Lender hereunder shall be prepared and all financial computations
and determinations pursuant hereto shall be made in accordance with GAAP.
ARTICLE 2
LOANS AND LETTERS OF CREDIT
Section 2.1
Making the Loans.
(a)
Subject to the terms and conditions hereof, each Lender agrees
to make advances on a revolving basis (herein a "Revolving
Loan Advance") to Borrower from time to time on any Business
Day during the Loan Commitment Period, equal to such Lender's
Percentage Share of the aggregate amount of Revolving Loan
Advances requested by Borrower to be made on such day, so long
as the aggregate amount of (i) all Lenders' Revolving Loan
Advances (including any Revolving Loan Advances to be made but
not yet made pursuant to a Request for Advance) outstanding at
any time plus (ii) the LC Obligations of all Lenders at such
time plus (iii) all Swing Line Advances to Borrower plus (iv)
all Lenders' Competitive Bid Advances outstanding at such
time, does not exceed the Facility Amount. Subject to the
terms and conditions hereof, Borrower may borrow, repay and
reborrow Revolving Loan Advances.
(b)
No Lender shall be permitted or required to make any Revolving
Loan Advance under this Agreement unless the aggregate of (1)
such Lender's Revolving Loan Advances under this Agreement
(including any Revolving Loan Advances to be made but not yet
made pursuant to a Request for Advance) outstanding at any
time plus (2) such Lender's share of LC Obligations at such
time is less than or equal to the least of (i) such Lender's
Loan Commitment or (ii) such Lender's Percentage Share of the
Facility Amount plus (3) such Lender's participation pursuant
to a Swing Line Participation Certificate in any Swing Line
Advances, if any.
(c)
The aggregate amount of all Revolving Loan Advances requested
of all Lenders in any Request for Advance must be an integral
multiple of $1,000,000 which equals or exceeds $10,000,000 or
must equal the least of the unadvanced portion of the
aggregate Loan Commitments of all Lenders or the unadvanced
portion of the Facility Amount. The obligation of Borrower to
repay to each Lender the aggregate amount of all Revolving
Loan Advances made by such Lender to
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Borrower (herein called such Lender's "Revolving Loan"),
together with interest accruing in connection therewith, shall
be evidenced by a single promissory note (herein called such
Lender's "Loan Note") made by Borrower payable to the order of
such Lender in the form of Exhibit A-1 with appropriate
insertions. The amount of principal owing on any Lender's
Loan Note at any given time shall be the aggregate amount of
all Revolving Loan Advances theretofore made by such Lender
minus all payments of principal theretofore received by such
Lender on such Loan Note. Interest on each Loan Note shall
accrue and be due and payable as provided herein and therein.
Section 2.2
Requests for Revolving Loan Advances. Borrower must
give to Administrative Agent not later than 11:00 a.m., Dallas, Texas time, for
same day funding, and not later than 1:00 p.m., Dallas, Texas time, for next
Business Day funding, written notice, or telephonic notice promptly confirmed
in writing, of any requested Revolving Loan Advances, after which
Administrative Agent shall give each other Lender prompt notice thereof. Each
such written request or confirmation must be made in the form and substance of
Exhibit C attached hereto, duly completed (herein called a "Request for
Advance"). Each such telephonic request shall be deemed a representation,
warranty, acknowledgment and agreement by Borrower as to the matters which are
required to be set out in such written confirmation. If all conditions
precedent to a Revolving Loan Advance have been met, each Lender will on the
date requested remit, not later than 1:00 p.m., Dallas, Texas time, for same
day funding, and not later than 11:00 a.m., Dallas, Texas time, the following
Business Day for next Business Day funding, to Administrative Agent at
Administrative Agent's office in Dallas, Texas, or to such other office as
Administrative Agent may specify from time to time by notice to Lenders, the
amount of such Lender's Revolving Loan Advance in immediately available funds,
and upon receipt of such funds, unless to its actual knowledge any conditions
precedent to such Revolving Loan Advances have been neither met nor waived as
provided herein, Administrative Agent shall promptly make the Revolving Loan
Advances available to Borrower. Each Request for Advance shall be irrevocable
and binding on Borrower. Unless Administrative Agent shall have received
prompt notice from a Lender that such Lender will not make available to
Administrative Agent such Lender's Revolving Loan Advance, Administrative Agent
may in its discretion assume that such Lender has made such Revolving Loan
Advance available to Administrative Agent in accordance with this Section and
Administrative Agent may if it chooses, in reliance upon such assumption, make
such Revolving Loan Advance available to Borrower. If and to the extent such
Lender shall not so make its Revolving Loan Advance available to Administrative
Agent, such Lender and Borrower severally agree to pay or repay to
Administrative Agent on demand the amount of such Revolving Loan Advance
together with interest thereon, for each day from the date such amount is made
available to Borrower until the date such amount is paid or repaid to
Administrative Agent, (i) if paid or repaid by Borrower at the interest rate
applicable at the time to the other Revolving Loan Advances made on such date
of such Revolving Loan Advance and (ii) if paid or repaid by such Lender, at
the Federal Funds Rate. The failure of
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any Lender to make any Revolving Loan Advance to be made by it hereunder shall
not relieve any other Lender of its obligation hereunder, if any, to make its
Revolving Loan Advance, but no Lender shall be responsible for the failure of
any other Lender to make any Revolving Loan Advance to be made by such other
Lender.
Section 2.3
Rate Elections. Borrower may from time to time
designate all or any portions of the Loans (including any yet to be made
Revolving Loan Advances which are to be made prior to or at the beginning of
the designated Eurodollar Interest Period but excluding any portions of the
Loans which are required to be repaid prior to the end of the designated
Eurodollar Interest Period and excluding any Competitive Bid Advance and any
Swing Line Advance) as a "Tranche", which term refers to a set of Eurodollar
Portions of the same type with identical Eurodollar Interest Periods and with
each Lender participating in such Tranche in accordance with its Percentage
Share. Without the consent of Required Lenders, Borrower may not make such
election, and Administrative Agent and Lenders shall not be required to give
effect to such election, during the continuance of a Default and Borrower may
make such an election with respect to already existing Eurodollar Portions only
if such election will take effect at or after the termination of the Eurodollar
Interest Period applicable thereto. Each election by Borrower of a Tranche
shall:
(a)
Be made in writing in the form and substance of Exhibit D
attached hereto, duly completed, herein called a "Rate
Election";
(b)
Specify the aggregate amount of the Loans which Borrower
desires to designate as such Tranche, the first day of the
Eurodollar Interest Period which is to apply thereto, and the
length of such Eurodollar Interest Period; and
(c)
Be received by Administrative Agent not later than 10:00 a.m.,
Dallas, Texas time, on the third Business Day preceding the
first day of the specified Eurodollar Interest Period.
Promptly after receiving any such Rate Election which meets the
requirements of this Section, Administrative Agent shall notify each Lender
thereof. Each Rate Election shall be irrevocable. Borrower may not make any
Rate Election which does not specify an Eurodollar Interest Period complying
with the definition of "Eurodollar Interest Period" in Section 1.1, and the
aggregate amount of the Tranche elected in any Rate Election must be
$10,000,000 or a higher integral multiple of $1,000,000. Upon the termination
of each Eurodollar Interest Period the portion of each Loan within the related
Tranche shall, unless the subject of a new Rate Election then taking effect,
automatically become a part of the Base Rate Portion of such Loan and become
subject to all provisions of the Loan Documents governing such Base Rate
Portion. Borrower shall have no more than fifteen (15) Tranches in effect at
any time.
If requested to do so by Borrower through Administrative Agent at
least two (2)
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Business Days before the delivery date of any proposed Rate Election, each
Lender will advise Administrative Agent before 10:00 a.m., Dallas, Texas time,
on the Business Day following receipt of such request as to whether, if
Borrower selects a specified duration of nine (9) or twelve (12) months for the
Eurodollar Interest Period applicable to such proposed Rate Election, such
Lender expects that deposits in dollars with a corresponding term will be
available to it in the relevant market on the first day of such Eurodollar
Interest Period in the amount required to fund the Eurodollar Portion of its
Loan to which such Eurodollar Interest Period would apply. Unless a Lender
responds by such time to the effect that it expects such deposits will be
available to it, Borrower shall not be entitled to select such proposed
duration for such Eurodollar Interest Period.
Each Lender may, if it so elects, fulfill its obligation to fund any
Eurodollar Portion by causing one of its foreign branches or Affiliates (or an
international banking facility created by such Lender) to fund or continue such
Eurodollar Portion; provided, however, that such Eurodollar Portion shall be
deemed to have been made and held by such Lender, and the obligations of the
subject Borrower to repay such Eurodollar Portion shall nevertheless be to such
Lender for the account of such branch, or Affiliate (or international banking
facility). In addition, Borrower hereby consents and agrees that, for purposes
of any determination to be made for purposes of Sections 2.17, 2.18, 2.19 and
2.20, it shall be conclusively assumed that such Lender elected to fund all
Eurodollar Portions by purchasing Dollar deposits in the interbank eurodollar
market of its designated office.
Section 2.4
Swing Line Advances. In addition to borrowings
pursuant to Section 2.1(a) or Section 2.22, Borrower may request Swing Line
Lender to make advances to Borrower on any Business Day (unless Borrower and
Swing Line Lender agree otherwise) during the Loan Commitment Period as
provided in Sections 2.5 and 2.6 (herein called "Swing Line Advances");
provided, however, that (a) at no time shall the outstanding aggregate
principal amount of all Swing Line Advances under this Agreement plus all
"Swing Line Advances" (as defined in the 364 Day Credit Facility), if any,
outstanding under the 364 Day Credit Facility exceed $50,000,000, and (b) at no
time shall the sum of (1) the outstanding aggregate principal amount of all
Swing Line Advances to Borrower, (2) the outstanding aggregate principal amount
of the Revolving Loans, (3) the outstanding aggregate principal amount of LC
Obligations and (4) the outstanding aggregate principal amount of all
Competitive Bid Advances, exceed the Facility Amount.
Section 2.5
Procedure for Swing Line Advances.
(a)
No later than 11:00 a.m., Dallas, Texas time, on a Business
Day on which Borrower desires a Swing Line Advance, Borrower
shall transmit to Swing Line Lender and to Administrative
Agent by telecopy a notice in substantially the form of
Exhibit E attached hereto (herein called a "Request for Swing
Line Loan"). Swing Line Lender will specify the rate of
interest per annum which
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will be the fixed rate of interest to be charged for such
Swing Line Advance until maturity (herein called the "Swing
Line Rate").
(b)
Swing Line Lender shall wire the Swing Line Advance in
immediately available funds by no later than 1:00 p.m.,
Dallas, Texas time on the date of request for Swing Line
Advance, on such day to Administrative Agent, which shall
deposit such funds to an account designated by Borrower by no
later than 1:15 p.m. on the same day.
(c)
Borrower shall repay each such Swing Line Advance on or before
1:00 p.m., Dallas, Texas time, on the following Business Day
or at such other maturity (such date of maturity being no more
than fourteen (14) days after the date of the Swing Line
Advance and no later than the Maturity Date) as is agreed to
by Borrower, Administrative Agent and the Swing Line Lender.
The repayment shall be paid on such date by Borrower (which
payment may be in the form of a Swing Line Advance advanced to
Borrower on that day) to Administrative Agent in immediately
available funds with instructions to Administrative Agent to
forward such proceeds to the Swing Line Lender. Any accrued
and unpaid interest pursuant to Swing Line Advances shall be
paid by Borrower (which payment may be in the form of a Swing
Line Advance advanced to Borrower on that day) to
Administrative Agent in immediately available funds on the
first Business Day of each calendar month with instructions to
Administrative Agent to forward such proceeds to the Swing
Line Lender.
(d)
Interest on the Swing Line Advances shall be computed on the
basis of a year of 365 or 366 days and actual days elapsed
(including the first day, but excluding the last day)
occurring in the period for which payable and shall not exceed
Maximum Lawful Rate. Past due principal and interest (to the
extent allowed by law) shall bear interest at the lesser of
the Default Rate or the Maximum Lawful Rate and shall be
payable on demand.
(e)
The Swing Line Advances made by the Swing Line Lender shall be
evidenced by a single promissory note of Borrower payable to
the order of the Swing Line Lender in the amount of
$50,000,000 and in substantially the form of Exhibit A-2
attached hereto, with appropriate insertions (herein called a
"Swing Line Note"). The date, amount, Swing Line Rate and
maturity of each Swing Line Advance made by a Lender to
Borrower, and each payment made on account of the principal
thereof, shall be recorded by such Lender on its books.
(f)
The Swing Line Advances will be used by Borrower to provide
working capital for the operations of Borrower and its
Subsidiaries and for general business purposes. No Swing Line
Advances shall be used for the purpose of purchasing
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or carrying any Margin Stock in violation of the Margin
Regulations.
(g)
The obligation of the Swing Line Lender to make each Swing
Line Advance after timely acceptance by Borrower is further
subject to the conditions contained in Article 3.
Section 2.6
(a)
Special Provisions for Swing Line Advances.
Lenders to Make Revolving Loan Advances.
(i)
Swing Line Lender, at any time in its discretion,
upon written request to Lenders through Administrative Agent (with a
copy to Borrower), may require each Lender (including the Swing Line
Lender) to make a Revolving Loan Advance, subject to the provisions of
Section 2.1 hereof, in an amount equal to such Lender's Percentage
Share of the outstanding Swing Line Advances. Swing Line Lender shall
deliver such request to Administrative Agent prior to 11:00 a.m.,
Dallas, Texas time, on the Business Day next preceding the date (which
shall be a Business Day) on which such Revolving Loan Advances are to
be made. Promptly upon receipt of any such request, Administrative
Agent shall give notice thereof to Lenders. Each Lender shall make
available its Percentage Share of such Revolving Loans to
Administrative Agent by 11:00 a.m., Dallas, Texas time, on the
requested date for such Revolving Loan Advances. Administrative Agent
shall apply the proceeds of such Revolving Loan Advances to prepay the
Swing Line Advances of the Swing Line Lender; provided, however, that
Administrative Agent shall be obligated to make the proceeds of such
Revolving Loans available only to the extent received by it from
Lenders. All Revolving Loans made pursuant to this subsection shall be
Base Rate Loans.
(ii)
In the event Administrative Agent advances proceeds
of any Revolving Loan to Swing Line Lender and one or more of the
Lenders (other than Swing Line Lender) fail to fund all or any portion
of such Revolving Loan Advance immediately upon receipt of notice from
Administrative Agent, then (I) such Lender shall pay directly to
Administrative Agent the amount thereof together with interest thereon
at the Federal Funds Rate, and (II) if not paid by such Bank, the
Swing Line Lender will repay directly to Administrative Agent such
amount as will equal the amount such other Lender(s) failed to fund,
together with interest at the Federal Funds Rate.
(b)
Participations in Swing Line Advances.
(i)
If, at any time prior to the making of Revolving
Loans pursuant to subsection 2.6(a)(i) hereof, any Event of Default
described in Sections 6.1(h) hereof shall have occurred, each Lender,
on the date such Revolving Loan Advance was to have been made or, if
no request for Revolving Loan Advances had been made
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pursuant to Section 2.6(a)(i) hereof, promptly upon request by the
Swing Line Lender delivered to Administrative Agent, shall purchase an
undivided participation interest in all outstanding Swing Line
Advances in an amount equal to its Percentage Share times the
outstanding amount of such Swing Line Advances. Each Lender (other
than the Swing Line Lender) will transfer immediately to
Administrative Agent for credit to Swing Line Lender, in immediately
available funds, the amount of its participation. Upon receipt
thereof, the Swing Line Lender will deliver to such other Lender a
Swing Line Advance Participation Certificate, dated the date of
receipt of such funds and in the amount of such Lender's
participation.
(ii)
Whenever, at any time after the Swing Line Lender has
received from any other Lender such other Lender's participating
interest in a Swing Line Advance, the Swing Line Lender receives any
payment on account thereof, Administrative Agent will distribute to
such other Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender's participating interest
was outstanding and funded); provided, however, that in the event that
any payment received by Swing Line Lender is required to be returned,
such other Lender will return to Swing Line Lender any portion thereof
previously distributed to it.
(c)
Acknowledged Privity. Borrower expressly agrees that, in
respect of each Lender's funded participation interest in any Swing Line
Advance, such Lender shall be deemed to be in privity of contract with Borrower
and have the same rights and remedies against Borrower under the Loan Documents
as if such funded participation interest in such Swing Line Advance were a
Revolving Loan.
(d)
Unconditional Obligation. Each Lender's obligation to make
Revolving Loan Advances or to purchase participation interests in Swing Line
Advances as provided in this Section shall be absolute and unconditional and
shall not be affected by any circumstance, including, without limitation, (A)
any set-off, counterclaim, recoupment, defense or other right which such Lender
may have against Swing Line Lender, Borrower or any other Person for any reason
whatsoever, (B) the existence of any Default or Event of Default at any time,
(C) the occurrence of any event or existence of any condition that might have a
Material Adverse Effect, or (D) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
Section 2.7
Facility Fee; Amendment Fee. In consideration of
each Lender's commitment to make Revolving Loan Advances and Competitive Bid
Advances, Borrower will pay, or cause the payment, to Administrative Agent for
the account of each Lender an annual facility fee payable to each Lender
determined by applying the Facility Fee Rate to such Lender's Percentage Share
of the Facility Amount as of the date of such payment, payable in arrears
quarterly until the Maturity Date, with the first payment thereof to be January
1, 1998,
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subsequent payments on the first day following each successive calendar quarter
ending on each March, June, September and December, and the final payment
thereof on the Maturity Date. Borrower will pay, or cause the payment, to
Administrative Agent for the account of each Lender a non-refundable amendment
fee payable to each Lender determined by applying the Amendment Fee Rate to
such Lender's Percentage Share of the Facility Amount as of the Effective Date.
Section 2.8
Managing Agents' Fees. In addition to all other
amounts due to the Managing Agents under the Loan Documents, Borrower will pay
the non-refundable annual fees set forth in those certain Fee Letters dated
June 25, 1997.
Section 2.9
Termination and Reduction of Commitments.
(a)
Unless previously terminated, the Commitments shall terminate
on the Maturity Date.
(b)
Borrower may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $1,000,000 and not less
than $5,000,000 and (ii) Borrower shall not terminate or reduce the Commitments
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.10, the sum of (i) all Lenders' Revolving Loan Advances
(including any Revolving Loan Advances to be made but not yet made pursuant to
a Request for Advance) outstanding at any time plus (ii) the LC Obligations of
all Lenders at such time plus (iii) all Swing Line Advances to Borrower plus
(iv) all Lenders' Competitive Bid Advances outstanding at such time, would
exceed the total Commitments.
(c)
Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section at
least two 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 Borrower pursuant to
this Section shall be irrevocable; provided that a notice of termination of the
Commitments delivered by Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice
may be revoked by Borrower (by notice to the Administrative Agent on or prior
to the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments shall be permanent. Each reduction
of the Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments.
Section 2.10
Optional Prepayments. Borrower may, upon notice to
each Lender identical to that required for related borrowings under this
Agreement, from time to time and without premium or penalty, prepay its Notes,
in whole or in part, so long as the aggregate
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amounts of all partial prepayments of principal concurrently paid on such Notes
equals $5,000,000 or any higher integral multiple of $1,000,000 or the
aggregate outstanding balance of the Loans, and so long as Borrower does not
prepay any Revolving Loan Advance, Competitive Bid Advance or Swing Line
Advance except in accordance herewith. Any amounts prepaid pursuant to this
Section shall be in addition to, and not in lieu of, all payments otherwise
required to be paid under the Loan Documents at the time of such prepayment.
Section 2.11
Payments to Lenders. Except as expressly set forth
in Section 2.5(c) with respect to repayment of Swing Line Advances and Section
2.22(b) with respect to repayment of Competitive Bid Advances, Borrower will
make each payment which it owes under the Loan Documents to Administrative
Agent at its principal banking office in Dallas, Texas, or to such other office
as Administrative Agent may specify from time to time by notice to Borrower for
the account of each Lender to whom such payment is owed, without the
application of any setoff, deduction or counterclaim. Each such payment must
be received by Administrative Agent not later than 1:00 p.m., Dallas, Texas
time, on the date such payment becomes due and payable, in lawful money of the
United States of America and in immediately available funds. Any payment
received by Administrative Agent after such time will be deemed to have been
made on the next Business Day. Should any such payment become due and payable
on a day other than a Business Day, the maturity of such payment shall be
extended to the next succeeding Business Day (except, with respect to any
Eurodollar Portion, as may be otherwise required by the definition of
Eurodollar Interest Period), and, in the case of a payment of principal or past
due interest, interest shall accrue and be payable thereon for the period of
such extension as provided in the Loan Document under which such payment is
due.
All payments applied to principal or interest on any Note shall be
applied first to any interest then due and payable, then to principal then due
and payable, and last to any prepayment of principal and interest in compliance
with Section 2.10. Unless otherwise expressly provided, all payments by any
Designated Entity pursuant to this Agreement or any other Loan Document shall
be made by such Designated Entity to Administrative Agent for account of Agents
and Lenders pro rata among Obligations of the same type and, if applicable,
having the same Eurodollar Interest Period or, in the case of Swing Line
Advances or Competitive Bid Advances, the same maturity date.
Section 2.12
Letters of Credit. Subject to the terms and
conditions hereof, Borrower may request Issuing Bank to issue one or more
Letters of Credit, provided that, after taking such Letter of Credit into
account:
(a)
the sum of (1) the aggregate principal amount of Revolving
Loans outstanding at such time, (2) the aggregate principal
amount of LC Obligations outstanding at such time, (3) the
aggregate principal amount of outstanding Swing Line Advances
to Borrower and (4) the aggregate principal amount of
outstanding
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Competitive Bid Advances to Borrower, does not exceed the
least of (i) the aggregate of all Lenders' Loan Commitments at
such time or (ii) the Facility Amount;
(b)
the aggregate amount of LC Obligations outstanding at such
time after giving effect to such request does not exceed
$50,000,000;
(c)
the expiration date of such Letter of Credit is prior to the
Maturity Date, unless otherwise agreed to by all of the
Lenders and the Issuing Bank;
(d)
such Letter of Credit is to be used for general corporate
purposes of Borrower or any of its Subsidiaries, subject to
paragraph (e) of this Section;
(e)
the terms of such Letter of Credit are acceptable to Issuing
Bank in the reasonable exercise of its discretion; and
(f)
all other conditions in this Agreement to the issuance of such
Letter of Credit have been satisfied.
Issuing Bank will honor any such request if the foregoing conditions (a)
through (g) (herein called the "LC Conditions") have been met as of the date of
issuance of such Letter of Credit. Nothing herein shall be interpreted or
deemed to obligate any Agent, other than Administrative Agent, or any Lender to
issue any Letter of Credit hereunder, and the obligation of Administrative
Agent to act as Issuing Bank is subject to paragraphs (a) through (g) of this
Section and to satisfaction of the conditions set forth in Article 3.
Section 2.13
Requesting Letters of Credit. Borrower must make
written application pursuant to an LC Application for any Letter of Credit at
least three (3) Business Days before the date on which Issuing Bank is
requested to issue such Letter of Credit. By making any such written
application Borrower shall be deemed to have represented and warranted that the
LC Conditions and the conditions precedent set forth in Section 3.2 will be met
as of the date of issuance of such Letter of Credit. Each such LC Application
must be made in such form as may mutually be agreed upon by Issuing Bank and
Borrower. No more than two (2) Business Days after the LC Conditions for a
Letter of Credit have been met as described in Section 2.12, Issuing Bank will
issue such Letter of Credit at Issuing Bank's office in Dallas, Texas or at
such other office of which Issuing Bank shall give Borrower written notice. In
the event of a conflict between any provision contained in this Agreement and
any provision contained in any LC Application, the provision contained in this
Agreement shall control.
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34
Section 2.14
Reimbursement of Letters of Credit.
(a)
Reimbursement by Borrower. Each payment of a draft or demand
for payment honored by Issuing Bank under a Letter of Credit
shall constitute a loan to and obligation of Borrower.
Promptly upon receipt of written notice of Issuing Bank's
honoring of a Letter of Credit, Borrower promises to pay to
Issuing Bank, or to Issuing Bank's order at such Issuing
Bank's office or at such other office of which Issuing Bank
shall give Borrower written notice, on demand, in legal tender
of the United States of America, any and all amounts paid by
Issuing Bank under any Letter of Credit, together with
interest on any such amounts from the date payment is made by
Issuing Bank under such Letter of Credit until but not
including the date of the repayment of such amounts to Issuing
Bank, at the Base Rate; provided that if any such payment or
reimbursement shall be reimbursed to Issuing Bank on the date
Issuing Bank makes such payment or disbursement, interest
shall be payable on the reimbursable amount at such rate for
one (1) day. In the event that Borrower fails to pay when due
any Matured LC Obligation owed by it to Issuing Bank,
Administrative Agent may, at its option, and without any
notice or further authorization from Borrower, make, pro rata
on behalf of the Lenders, a Revolving Loan Advance under this
Agreement to Borrower in the amount of such unpaid Matured LC
Obligation (whether or not such amount is less than the
minimum Revolving Loan Advance or would result in the
outstanding Obligations being greater than or equal to the
Facility Amount), and apply the proceeds of such Revolving
Loan Advance to the payment of such Matured LC Obligation.
Borrower hereby expressly requests and irrevocably authorizes
Administrative Agent to do all of the foregoing. Revolving
Loan Advances used to refinance Matured LC Obligations shall
bear interest as provided in this Agreement and in the Loan
Notes. Borrower hereby promises to pay, when and as due, all
present and future levies, costs and charges whatsoever
imposed, assessed, levied or collected on, under or in respect
of this Agreement with respect to any Letter of Credit and any
payments of principal, interest or other amounts made on or in
respect of any thereof (excluding, however, any such levies,
costs and charges imposed on or measured by the net income or
receipts of Issuing Bank). Borrower promises to indemnify
Issuing Bank against, and to reimburse Issuing Bank on demand
for, any of the foregoing levies, costs or charges paid by
Issuing Bank and any loss, liability, claim or expense,
including interest, penalties and legal fees, that Issuing
Bank may incur because of or in connection with the failure of
Borrower to make any such payment of levies, costs or charges
when and as due or any payment of Matured LC Obligations when
and as due.
Borrower's obligation to reimburse Issuing Bank under this
paragraph (a) of this
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Section for payments and disbursements made by Issuing Bank
under any Letter of Credit issued pursuant to this Section
shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or
defense to payment which Borrower may have or have had against
Issuing Bank or any Lender, including, without limitation, any
defense based on the failure of the demand for payment under
such Letter of Credit to conform to the terms of such Letter
of Credit or the legality, validity, regularity or
enforceability of such Letter of Credit; provided, however,
that Borrower shall not be obligated to reimburse Issuing Bank
for any wrongful payment or disbursement made by Issuing Bank
under any Letter of Credit as a result of acts or omissions
constituting gross negligence or willful misconduct on the
part of Issuing Bank or any of its officers, employees or
agents.
(b)
Reimbursement by Lenders. Issuing Bank irrevocably agrees to
grant and hereby grants to each Lender, and, each Lender
irrevocably agrees to accept and purchase and hereby accepts
and purchases from Issuing Bank, on the terms and conditions
hereinafter stated, for such Lender's own account and risk an
undivided interest equal to such Lender's Percentage Share of
Issuing Bank's obligations and rights under each Letter of
Credit issued hereunder and the amount of each draft paid by
Issuing Bank thereunder. In the event that Borrower should
fail to pay Issuing Bank on demand the amount of any draft or
other request for payment drawn under a Letter of Credit as
provided in paragraph (a) of this Section, each Lender shall,
before 2:00 p.m., Dallas, Texas time, on the Business Day
Issuing Bank shall have given notice to Lenders of Borrower's
failure to so pay Issuing Bank, if such notice is given by
10:00 a.m., Dallas, Texas time (or on the Business Day
immediately succeeding the day such notice is given after
10:00 a.m., Dallas, Texas time), pay to Issuing Bank at
Issuing Bank's offices, or at such other office of which
Issuing Bank shall have given Lenders written notice, in legal
tender of the United States of America, in same day funds,
such Lender's Percentage Share of the amount of such draft or
other request for payment from Borrower plus interest on such
amount from the date Issuing Bank shall have paid such draft
or request for payment to the date of such payment by such
Lender at the Federal Funds Rate. Each Lender's obligation to
reimburse Issuing Bank pursuant to the terms of this Section
is irrevocable and unconditional; provided, however, that
Lenders shall not be obligated to reimburse Issuing Bank for
any wrongful payment or disbursement made by Issuing Bank
under any Letter of Credit as a result of acts or omissions
constituting gross negligence or willful misconduct on the
part of Issuing Bank or any of its officers, employees,
Affiliates or agents. Whenever, at any time after Issuing
Bank has made payment under any Letter of Credit, and has
received from any Lender its Percentage Share of such payment
in accordance with this subsection, Issuing Bank receives any
payment
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related to such Letter of Credit (whether directly from
Borrower or otherwise, including proceeds of collateral
applied thereto by Issuing Bank), or any payment of interest
on account thereof, Issuing Bank will distribute to such
Lender its Percentage Share thereof; provided, however, that
in the event that any such payment received by Issuing Bank
shall be required to be returned by Issuing Bank, such Lender
shall return to Issuing Bank the portion thereof previously
distributed by Issuing Bank to it. Each Lender shall
indemnify and hold Issuing Bank harmless from and against any
and all losses, liabilities (including, without limitation,
liabilities for penalties), actions, suits, judgments,
demands, damages, costs and expenses (including, without
limitation, attorneys' fees and expenses) resulting from any
failure on the part of such Lender to provide, or from any
delay in providing, in accordance with this paragraph to
Issuing Bank such Lender's Percentage Share of the amount of
any payment or disbursement made by Issuing Bank to settle its
obligations under any draft drawn under any Letter of Credit.
(c)
Cash Collateral Upon Event of Default. Upon the occurrence of
any Default or Event of Default and the acceleration of the
maturity of the Loans, an amount equal to the amount of the
aggregate contingent liability of Issuing Bank and Lenders in
connection with each Letter of Credit then in effect shall be
deemed (as between Lenders and Borrower) to have been paid or
disbursed by Issuing Bank and Lenders under such Letter of
Credit (notwithstanding that such amount may not in fact have
been so paid or disbursed), and Borrower shall be immediately
obligated to pay to Administrative Agent for the pro rata
benefit of Lenders in accordance with their respective
Percentage Shares, the amount so deemed to have been so paid
or disbursed, which payment shall be made by depositing Cash
Collateral with Administrative Agent in accordance with the
provisions of paragraph (d) of this Section.
(d)
Procedures for Depositing and Returning of Cash Collateral.
Any cash collateral amounts received by Administrative Agent
pursuant to the provisions of paragraph (c) of this Section
(the "Cash Collateral") shall be deposited in a separate
interest bearing cash collateral account maintained at the
offices of Administrative Agent or another Lender designated
by Administrative Agent under the sole dominion and control of
Administrative Agent and shall be retained by Administrative
Agent for the pro rata benefit of Lenders in accordance with
their respective Loans and LC Obligations as collateral
security for, and Borrower hereby grants to Administrative
Agent for the benefit of the Lenders a security interest in
such Cash Collateral including all interest accruing thereon
and the proceeds thereof to secure, first the payment of the
Obligations of Borrower under or in connection with its
Letters of Credit, and then the other Obligations of Borrower
under and in connection with this Agreement and the
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other Loan Documents, including all Obligations of Borrower
under its Notes pro rata to each Lender in accordance with its
Loans and Percentage Share of all LC Obligations. All Cash
Collateral delivered to Administrative Agent may be applied by
Administrative Agent from time to time against any of
Borrower's reimbursement Obligations with respect to any
Letter of Credit as to which a draw is made. If and to the
extent that the Default or Event of Default giving rise to the
Required Lenders' demand for Cash Collateral has been cured to
the reasonable satisfaction of Required Lenders and the
acceleration of the Loans has been rescinded and annulled
pursuant to Section 6.3 or (a) all Obligations of Borrower
have been fully paid and satisfied, (b) no Letters of Credit
remain outstanding and (c) Lenders' Commitments have
terminated, Administrative Agent shall promptly return to
Borrower, upon Borrower's request therefor, all amounts
previously paid to Administrative Agent pursuant to paragraph
(c) of this Section and not theretofore returned by
Administrative Agent to Borrower or applied by Administrative
Agent to reduce amounts payable by Borrower to Lenders under
or with respect to the Letters of Credit or other amounts due
to Lenders or Agents hereunder or under the other Loan
Documents.
Section 2.15
Letter of Credit Fees. In consideration of Issuing
Bank's issuance of any Letter of Credit and each other Lender's agreement to
purchase a risk participation therein, Borrower agrees to pay to Administrative
Agent:
(a)
a letter of credit fronting fee for the account of the Issuing
Bank with respect to such Letter of Credit upon issuance of
each Letter of Credit in an amount equal to the greater of (x)
$500 or (y) one- eighth of one percent (1/8 of 1%) per annum
calculated on the face amount thereof; and
(b)
a letter of credit fee for the account of Lenders, to be
distributed to Lenders ratably in accordance with their
Percentage Shares, calculated on the face amount of each
Letter of Credit in the amount of the applicable Eurodollar
Margin, payable quarterly in arrears and at the expiration or
termination of each Letter of Credit.
Section 2.16
Capital Reimbursement. If either (a) the
introduction or implementation of, or the compliance with, or any change in, or
in the interpretation of, any law, rule or regulation, or (b) the introduction
or implementation of or the compliance with any request, directive or guideline
from any central bank or Governmental Authority (whether or not having the
force of law) affects or would affect the amount of capital required to be
maintained by any Lender or any corporation controlling any Lender, then, upon
demand by such Lender, Borrower will immediately pay to Administrative Agent
for the benefit of such Lender, from time to time as specified by such Lender,
such additional amount which such Lender shall determine to be appropriate to
compensate such Lender or any corporation controlling such
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38
Lender in light of such circumstances, to the extent that such Lender
reasonably determines that, because of the existence of such circumstances, the
amount of any such capital would be increased or the rate of return on any such
capital would be reduced, in whole or in part, by or as a consequence of the
existence of such Lender's Commitments, its Loans, its Percentage Share of LC
Obligations, and its other commitments under this Agreement to Borrower,
subject to the provisions of Section 2.21.
Section 2.17
Increased Cost of Eurodollar Portions. If any
applicable domestic or foreign law, treaty, rule, directive or regulation
(whether now in effect or hereinafter enacted or promulgated, including
Regulation D) or any interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof (whether or not having the force of law):
(a)
shall change the basis of taxation of payments to any Lender
of any principal, interest, or other amounts attributable to
any Eurodollar Portion of its Loans, its Percentage Share of
LC Obligations or its participation in any Swing Line Advances
or its Competitive Bid Advances or otherwise due under this
Agreement in respect of any Eurodollar Portion of its Loans or
its participation in any Swing Line Advances or Competitive
Bid Advances (other than taxes imposed on the overall net
income of such Lender or any lending office of such Lender by
any jurisdiction in which such Lender or any such lending
office is located);
(b)
shall change, impose, modify, apply or deem applicable any
reserve, special deposit or similar requirements in respect of
any Eurodollar Portion of any Lender (excluding those for
which such Lender is fully compensated pursuant to adjustments
made in the definition of Adjusted Eurodollar Rate) or against
assets of, deposits with or for the account of, or credit
extended by, such Lender; or
(c)
shall impose on any Lender, the certificate of deposit market
or the interbank eurocurrency deposit market any other
condition affecting any Eurodollar Portion;
and the result of any of the foregoing (a) through (c) is to (1) increase the
cost to any Lender of funding or maintaining any Eurodollar Portion, any
participation in any Swing Line Advance or any Competitive Bid Advance, as the
case may be, or (2) to reduce the amount of any sum receivable by any Lender in
respect of any Eurodollar Portion, Swing Line Advance or Competitive Bid
Advance, as the case may be, by an amount reasonably deemed by such Lender to
be material; then (i) such Lender shall promptly notify Administrative Agent
and Borrower in writing of the happening of such event, (ii) Borrower shall
thereafter upon demand pay to Administrative Agent for the account of such
Lender such additional amount or amounts as will compensate such Lender for
such additional cost or reduction, subject to the
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provisions of Sections 2.21 and 2.19, and (iii) Borrower may elect, by giving
to Administrative Agent and Lender not less than three (3) Business Days'
notice, to convert all (but not less than all) of any such Eurodollar Portion
into a part of the Base Rate Portion.
Section 2.18
Availability. If (a) any change in applicable laws,
treaties, rules or regulations or in the interpretation or administration
thereof in any jurisdiction whatsoever, domestic or foreign, shall make it
unlawful or impracticable for any Lender to fund or maintain Eurodollar
Portions, or shall materially restrict the authority of any Lender to purchase
or take offshore deposits of dollars ("Eurodollars"), or to issue Letters of
Credit or fund its Percentage Share of LC Obligations, or (b) any Lender
determines that matching deposits appropriate to fund or maintain any
Eurodollar Portion are not available to it, or (c) any Lender determines that
the formula for calculating the Adjusted Eurodollar Rate does not fairly
reflect the cost to such Lender of making or maintaining loans based on such
rates, then, upon notice by such Lender to Administrative Agent and to
Borrower, Borrower's right to elect Eurodollar Portions or to apply for Letters
of Credit shall be suspended to the extent and for the duration of such
illegality, impracticability, restriction or condition, and all Eurodollar
Portions (or portions thereof) which are then outstanding or are then the
subject of any Rate Election and which cannot lawfully or practicably be
maintained or funded shall immediately become or remain part of the Base Rate
Portions of such Lender's Loan, subject to the provisions of Sections 2.21 and
2.19. Borrower agrees to indemnify Administrative Agent and each Lender and
hold Administrative Agent and each Lender harmless against all costs, expenses,
claims, penalties, liabilities and damages which may result from any such
change in law, treaty, rule, regulation, interpretation or administration,
subject to the provisions of Section 2.21.
Section 2.19
Funding Losses. In addition to its other obligations
hereunder, subject to the provisions of Section 2.21, Borrower shall indemnify
each Lender against, and reimburse each Lender on demand for, any loss or
expense incurred or sustained by such Lender, determined as provided in this
Section, as a result of (a) any payment or prepayment (whether authorized or
required hereunder or otherwise) of all or a portion of a Eurodollar Portion of
Borrower on a day other than the day on which the applicable Eurodollar
Interest Period ends, (b) any payment or prepayment, whether required hereunder
or otherwise, of a Loan of Borrower made after the delivery, but before the
effective date, of a Rate Election, if such payment or prepayment prevents such
Rate Election from becoming fully effective, (c) the failure of any Revolving
Loan Advance or Swing Line Advance or Competitive Bid Advance to be made to
Borrower or of any Rate Election of Borrower to become effective due to any
condition precedent to a Revolving Loan Advance or Swing Line Advance or
Competitive Bid Advance not being satisfied, due to the inability of
Administrative Agent (acting reasonably and in accordance with Section 2.18) to
determine a Eurodollar Rate for a Eurodollar Portion of Borrower or due to any
other action or inaction of any Designated Entity, (d) any conversion (whether
authorized or required hereunder or otherwise) of all or any portion of any
Eurodollar Portion of Borrower into a Base Rate Portion or into a different
Eurodollar
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Portion on a day other than the day on which the applicable Eurodollar Interest
Period ends, (e) any payment or prepayment of all or a portion of a Swing Line
Advance to Borrower on a day other than the maturity date for such Swing Line
Advance or (f) any payment or prepayment of all or a portion of a Competitive
Bid Advance on a day other than the maturity date for such Competitive Bid
Advance.
Upon the occurrence of an event as described in subsections (a)
through (f) of this Section, the method to be used by each Lender to calculate
the loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund or maintain Eurodollar
Portions of Revolving Loan Advances, Swing Line Advances or Competitive Bid
Advances, as the case may be, is as follows:
Funding Loss = P x (F-R) x D/360
P
=
principal amount of payment, prepayment,
conversion, non-borrowing or non-effective
Rate Election
F
=
Eurodollar Rate or Swing Line Rate or
Competitive Bid Rate, as the case may be
(adjusted for Reserve Percentage), utilized
in the calculations of the Eurodollar Rate or
Swing Line Rate or Competitive Bid Rate, as
the case may be, on the Eurodollar Portion or
Swing Line Advance or Competitive Bid Advance
which is being paid, prepaid, converted, not
borrowed or not subject to effective Rate
Election
R
=
reinvestment rate (as hereinafter defined)
D
=
number of days from the date of the payment,
prepayment, conversion, non-borrowing or
non-effectiveness until the day on which the
Eurodollar Interest Period of the Eurodollar
Portion ends or the Swing Line Advance or
Competitive Bid Advance matures
Reinvestment rate as it is used herein will be equal to the Eurodollar Rate,
adjusted for the Reserve Percentage quoted to such Lender, or the Swing Line
Rate or Competitive Bid Rate that would be quoted by such Lender, as the case
may be, effective for the date on which the payment, prepayment, conversion,
non-borrowing or non-effectiveness occurs. For purposes of determining the
reinvestment rate for purposes of this Section, the Eurodollar Rate will be the
quote for either one (1) month, two (2) months, three (3) months, six (6)
months, nine (9) months or twelve (12) months, the Competitive Bid Rate will be
the quote for a number of days between seven (7) and 360, and the Swing Line
Rate will be the quote for a number of days between one (1) and fourteen (14),
whichever most closely approximates (but which may contain more or fewer days
than) the number of days from the date of the payment, prepayment, conversion,
non-borrowing or non-effectiveness until the last day of the relevant
Eurodollar Interest Period or the scheduled maturity, as the case may be, of
the Eurodollar
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Portion, Competitive Bid Advance or Swing Line Advance, as the case may be, in
respect of which the payment, prepayment, conversion, non-borrowing or
non-effectiveness occurs; provided that if such number of days in respect of a
Eurodollar Rate is the midpoint between two such periods, such rate will be the
lower of the two rates for such periods.
Section 2.20
Taxes.
All payments by Borrower of principal of,
and interest on, the Loans, the LC Obligations and all other amounts payable
hereunder shall be made free and clear of and without deduction for any present
or future income, excise, stamp, or franchise taxes and other taxes, fees,
duties, withholdings or other charges of any nature whatsoever imposed by any
taxing authority, but excluding franchise taxes and taxes imposed on or
measured by any Lender's net income or receipts (such non-excluded items being
called "Taxes"). In the event that any withholding or deduction from any
payment to be made by Borrower hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then, subject to the
provisions of Section 2.21, Borrower will:
(a)
pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b)
promptly forward to Administrative Agent an official receipt
or other documentation satisfactory to Administrative Agent
evidencing such payment to such authority; and
(c)
pay to Administrative Agent for the account of the applicable
Lender(s) such additional amount(s) as is necessary to ensure
that the net amount actually received by each Lender will
equal the full amount such Lender would have received had no
such withholding or deduction been required and Borrower
hereby acknowledges that it is not entitled to and will not
seek recovery or restitution of any amount due to any of the
Lenders or Agents and paid by Borrower pursuant to this clause
(c) or pursuant to the next sentence.
If any Taxes are directly asserted against any Agent or any Lender with respect
to any payment received by such Agent or such Lender hereunder, such Agent or
such Lender may pay such Taxes and, if paid in good faith, Borrower will
promptly pay such additional amounts to Administrative Agent for the account of
such Lender or Agent (including any penalties, interest or expenses) as is
necessary in order that the net amount received by such person after the
payment of such Taxes (including any taxes on such additional amount) shall
equal the amount such person would have received had no such Taxes been
asserted, subject to the provisions of Section 2.21.
Borrower shall pay all stamp, transaction, registration and similar
taxes (including financial institutions' duties, debit taxes or other taxes
payable by return and taxes passed on to any Lender or Agent by a bank or
financial institution (collectively "Stamp Taxes") and, if
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Borrower fails to pay any such charges or taxes after reasonable notice from
any such Lender or Agent, fines and penalties) which may be payable or
determined to be payable in relation to the execution, delivery, performance or
enforcement of this Agreement or any Loan Document or any other transaction
contemplated by any Loan Document to which Borrower is a party. Borrower
hereby indemnifies each Lender and Agent against any liability resulting from
delay or omission to pay such charges or taxes except to the extent the
liability results from failure by the relevant Lender or Agent to pay any such
tax after having been delivered funds to do so by Borrower or to the extent
such liability is for fines and penalties resulting from such Lender's or
Agent's failure to provide reasonable notice to Borrower as provided herein.
If Borrower fails to pay any Taxes or Stamp Taxes when due to the
appropriate taxing authority or fails to remit to Administrative Agent, for the
account of the respective Lenders, the required receipts or other required
documentary evidence, Borrower shall indemnify Lenders for any Taxes, interest
or penalties that may become payable by any Lender as a result of any such
failure, subject to the provisions of Section 2.21. For purposes of this
Section, a distribution hereunder by Administrative Agent or any Lender to or
for the account of any Lender or Agent shall be deemed a payment by the subject
Borrower.
Borrower waives any statutory right to recover from any Agent or any
Lender any amount due to any such Agent or Lender and paid by Borrower under
this Section.
On or prior to the first date on which interest or fees are payable
hereunder for the account of any Lender, each Lender that is organized under
the laws of a jurisdiction other than the United States shall execute and
deliver to Administrative Agent, three (3) or more (as Administrative Agent may
reasonably request) United States Internal Revenue Service Forms 1001 or 4224
or such other forms or documents (or successor forms or documents),
appropriately completed, as may be applicable to establish the extent, if any,
to which a payment to such Lender is exempt from withholding or deduction of
Taxes. Each Lender which so delivers a Form 1001 or 4224 further undertakes to
deliver to Administrative Agent three (3) additional copies of such form (or a
successor form) on or before the date that such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by Administrative Agent, in
each case certifying that such Lender is entitled to receive payments from
Borrower under this Agreement and the Notes without deduction or withholding of
any United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms of the type previously delivered inapplicable or which would prevent
such Lender from duly completing and delivering such form with respect to it
and such Lender advises Administrative Agent that it is not capable of
receiving such payments on the basis reflected in such previously delivered
form without any deduction or withholding of United States federal income tax.
Administrative Agent shall provide one (1) copy of each
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of such forms or documents so provided to Borrower and Documentation Agent.
Section 2.21
Make-Whole Qualifications. Each Lender's claims for
reimbursements, payments, indemnities or otherwise under Sections 2.16, 2.17,
2.18, 2.19 and 2.20 and Borrower's obligation with respect thereto, shall be
limited and qualified by and subject to the following:
(a)
Borrower's obligation to pay, satisfy or recognize such claim
shall be limited to costs or losses incurred within one (1)
year immediately prior to any demand or request therefor upon
Borrower;
(b)
each Lender's demand for reimbursement, payment or indemnity
from Borrower must be limited to that which is being generally
applied at the time by such Lender for comparable borrowers
and credits subject to credit agreements similar to this
Agreement, but without regard to provisions similar to this
Section;
(c)
each Lender which asserts its rights with respect thereto or
which is seeking or imposing such reimbursement, payment or
indemnity shall provide evidence regarding the basis of such
claim and the calculation and application thereof in
reasonable detail and, in determining such amount, each Lender
may use reasonable methods of attribution and averaging;
(d)
each Lender which is seeking payment or reimbursement pursuant
to Section 2.20 shall, if so requested by Borrower, use
reasonable efforts (subject to the overall policy
considerations of such Lender) to designate a different
lending office hereunder if to do so will avoid the need for,
or reduce the amount of, any such payment or reimbursement;
provided that, Lender would, in its sole but reasonable
determination, suffer no material economic, legal or
regulatory disadvantage or burden;
(e)
Borrower may, in its sole discretion, elect, unless and until
the applicable Lender notifies Borrower that the circumstances
giving rise thereto no longer apply to such Lender, that, to
the extent that a Lender's claims for such reimbursements,
payments or indemnities would be reduced thereby, that subject
to Section 2.19, (1) all Loans to Borrower which would
otherwise be made by such Lender as Eurodollar Portions shall
be made instead as Base Rate Portions (all of which interest
and principal shall be payable as provided herein with respect
to the related Eurodollar Portions of the Lenders), and (2)
after each Eurodollar Portion has been repaid, all payments of
principal which would otherwise would be applied to repay such
Eurodollar Portion shall be applied to repay Base Rate
Portions instead; and
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(f)
Borrower may designate a replacement Lender (which may be one
(1) or more of the then existing Lenders hereunder and which
shall be reasonably satisfactory to Administrative Agent) to
purchase the Notes and Percentage Share of LC Obligations, in
each case without recourse, and assume the Commitments and all
other obligations hereunder of any Lender that has suspended
the availability of Eurodollar Portions pursuant to Section
2.18 or that has demanded reimbursement, payment or indemnity
under Sections 2.16, 2.17, 2.18, 2.19 or 2.20, and such Lender
shall be obligated to sell, transfer and deliver all of its
Notes, and Percentage Share of LC Obligations to such
replacement Lender for the outstanding principal amount of
such Notes, plus Lender's Percentage Share of LC Obligations,
plus in each case, accrued interest thereon and such Lender's
portion of accrued but unpaid fees through the date of such
purchase, and permit such replacement lender to assume its
Commitments. Borrower shall be obligated to pay all
additional amounts due to the Lender being replaced pursuant
to Sections 2.16, 2.17, 2.18, 2.19 and 2.20 through the date
of such purchase and assumption; provided, that if the
replacement Lender fails to purchase all such rights and
interests and assume all such Commitments on the specified
date in accordance herewith, Borrower shall continue to be
obligated to pay such amounts to such Lender which was to have
been replaced and provided further that Borrower shall pay any
Taxes or Stamp Taxes, if any, as a result of such transfer.
Section 2.22
Competitive Bid Advances.
(a)
In addition to borrowings pursuant to Section 2.1(a) or
Section 2.4, Borrower may request each Lender severally to submit offers
(herein called a "Competitive Bid Offer") to make advances to Borrower on any
Business Day during the Loan Commitment Period as provided in this Section
(herein called "Competitive Bid Advances"); provided, however, that each Lender
may in its sole discretion, but shall have no obligation whatsoever to submit
such offers, and Borrower may, but shall have no obligation to, accept any such
offers.
(b)
Procedure for Competitive Bid Advances.
(i)
Borrower may request Competitive Bid Advances by
delivering a request for a Competitive Bid Advance to
each Lender (which has indicated to Borrower its
interest in making a Competitive Bid Advance) and
Administrative Agent not later than 9:00 a.m.,
Dallas, Texas time, one (1) Business Day prior to the
proposed borrowing date. Each request for a
Competitive Bid Advance shall be in substantially the
form of Exhibit N hereto (herein called a "Request
for Competitive Bid Offer") and may solicit bids for
Competitive Bid Advances having not more than three
(3) alternative maturity dates and for Competitive
Bid Advances in any
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respective principal amount equal to $10,000,000 or
an integral multiple of $1,000,000 in excess thereof
for each maturity date requested. The maturity date
for each Competitive Bid Advance shall be not less
than fifteen (15) days nor more than 360 days after
the borrowing date therefor (and in any event not
after the Maturity Date).
(ii)
Upon receipt of a Request for Competitive Bid Offer,
any Lender that elects, in its sole discretion, to do
so, shall irrevocably offer to make one (1) or more
Competitive Bid Advances at a fixed rate of interest
determined by such Lender in its sole discretion for
each such Competitive Bid Advance. Any such
irrevocable offer shall be made by delivering a
Competitive Bid Offer to Administrative Agent and to
Borrower, before 9:00 a.m., Dallas, Texas time (or,
in the case of a Competitive Bid Offer by
Administrative Agent, before 8:45 a.m., Dallas, Texas
time), on the proposed borrowing date, setting forth
the maximum amount of Competitive Bid Advances for
each maturity date, and the aggregate maximum amount
for all maturity dates, which such Lender would be
willing to make (which amounts may exceed such
Lender's Percentage Share of the Commitments) and the
fixed rate of interest at which such Lender is
willing to make each such Competitive Bid Advance,
which fixed rate of interest may or may not be, in
such Lender's discretion, different for each
Competitive Bid Advance (respectively herein a
"Competitive Bid Rate"). Borrower shall pay to
Administrative Agent a fee of $500 on each day that
Borrower accepts a Competitive Bid Offer.
(iii)
The Competitive Bid Offer delivered by each Lender in
response to a Request for Competitive Bid Offer shall
set forth an amount proposed to be loaned by such
Lender for each maturity date requested by Borrower
that is equal to $10,000,000 or an integral multiple
of $1,000,000 in excess thereof. Any Competitive Bid
Offer by any Lender that: (A) does not substantially
conform to the form of Exhibit O hereto, (B) contains
qualifying, conditional or similar language, (C)
proposes terms other than or in addition to those set
forth in the applicable Request for Competitive Bid
Offer or (D) is received by Borrower after the
applicable time specified in this subsection, shall
be rejected by Borrower and Administrative Agent (and
Administrative Agent shall notify the relevant Lender
of such rejection for one or more of the matters
described in the foregoing (A) through (D) by
telephone and telecopy as soon as practicable
thereafter).
(iv)
Borrower shall before 10:00 a.m., Dallas, Texas time,
on the proposed
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borrowing date either, in its absolute discretion:
(A)
withdraw such Request for Competitive Bid
Offer by giving telephonic notice to that
effect;
(B)
accept one (1) or more of the Competitive Bid
Offers by giving telephonic notice to
Administrative Agent (immediately confirmed
by delivery to Administrative Agent by
facsimile transmission of a Bid Acceptance)
of the amount of Competitive Bid Advance(s)
for each relevant maturity date to be made by
the relevant Lender(s) (which amount for each
such maturity date shall be equal to or less
than the maximum amount for such maturity
date specified in the Competitive Bid Offer
of such Lender(s), and for all maturity dates
included in such Competitive Bid Offer shall
be equal to or less than the aggregate
maximum amount specified in such Request for
Competitive Bid Offer for all such maturity
dates) and reject any Competitive Bid Offers
not accepted by Borrower by giving telephonic
notice to Administrative Agent of such
rejection; provided, however, that (1)
Borrower may not accept Competitive Bid
Offers for any maturity date in an aggregate
principal amount in excess of the maximum
principal amount requested in the related
Request for Competitive Bid Offer (and
Competitive Bid Advances allocated to a
Lender on a borrowing date for each relevant
maturity date shall be in a principal amount
equal to $10,000,000 or an integral multiple
of $1,000,000 in excess thereof); and (2)
Administrative Agent shall notify the Lender
that submitted a Competitive Bid Offer for
such Business Day of Borrower's decision by
telecopying to each such Lender a copy of the
Bid Acceptance by no later than 12:00 noon,
Dallas, Texas time, on the borrowing date
specified in the Request for Competitive Bid
Offer; or
(C)
Borrower may accept or reject any Competitive
Bid Offer(s) in whole or in part; provided
that after giving effect to any such accepted
Competitive Bid Offer(s), the sum of (i) the
aggregate principal amount of the Revolving
Loans and Swing Line Advances outstanding at
such time, (ii) the aggregate principal
amount of LC Obligations outstanding at such
time, and (iii) the aggregate principal
amount of Competitive Bid Advances
outstanding at such time, does not exceed the
Facility Amount.
(v)
If Borrower notifies Administrative Agent that a
Request for Competitive
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Bid Offer is withdrawn pursuant to clause (iv) above,
the Competitive Bid Advance requested thereby shall
not be made.
(vi)
Each Lender which is to make a Competitive Bid
Advance shall, before 1:00 p.m., Dallas, Texas time,
on the borrowing date specified in the Request for
Competitive Bid Offer applicable thereto, make
available to Administrative Agent in immediately
available funds the amount of each Competitive Bid
Advance to be made by such Lender. Administrative
Agent shall deposit such funds to an account
designated by Borrower by no later than 1:15 p.m.,
Dallas, Texas time, on such date.
(vii)
Borrower shall repay to Administrative Agent, for the
account of each Lender which has made a Competitive
Bid Advance, on the maturity date of each Competitive
Bid Advance (such maturity date being that specified
by Borrower for repayment of such Competitive Bid
Advance in the related Request for Competitive Bid
Offer) the then unpaid principal amount of such
Competitive Bid Advance. Borrower shall not have the
right to prepay any principal amount of any
Competitive Bid Advance. If any Lender makes a
Competitive Bid Advance on a day on which Borrower is
to repay all or any part of an outstanding
Competitive Bid Advance from such Lender, if
requested by Borrower, such Lender shall apply the
proceeds of its new Competitive Bid Advance to make
such repayment and, in such instance, only an amount
equal to the difference (if any) between the amount
being borrowed and the amount being repaid shall be
made available by such Lender to Administrative Agent
as provided in Section 2.22(b)(vi), or remitted by
Borrower to Administrative Agent as provided in this
Section 2.22(b)(vii), as the case may be.
(viii)
Borrower shall pay interest on the unpaid principal
amount of each Competitive Bid Advance from the
borrowing date to the stated maturity date thereof,
at the rate of interest determined pursuant to clause
(b) (ii) above (calculated on the basis of a 360 day
year for actual days elapsed including the first but
excluding the last), but not in excess of the Maximum
Lawful Rate, payable on the maturity date with
respect to such Competitive Bid Advance and, if such
maturity date is more than 90 days after the date of
making such Competitive Bid Advance, on such
ninetieth day and each ninetieth day occurring after
such ninetieth day until the maturity date. If all
or a portion of the principal of or interest on any
Competitive Bid Advance shall not be paid when due
(whether at the stated maturity, by acceleration or
otherwise), without limiting any rights of any Lender
under this Agreement, (i) such overdue principal
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amount shall bear interest from the date on which
such payment was due (other than on the scheduled
maturity date with respect thereto) at the Default
Rate, but not in excess of the Maximum Lawful Rate,
until paid in full (as well as after as before
judgment) and (ii) such overdue interest shall bear
interest from the date on which payment was due at
the Default Rate, but not in excess of the Maximum
Lawful Rate, until paid in full (as well as after as
before judgment).
(c)
The Competitive Bid Advances made by each Lender shall be
evidenced by a single promissory note of Borrower payable to
the order of such Lender substantially in the form of Exhibit
A-3 attached hereto, with appropriate insertions (herein
called a "Competitive Bid Note"). The date, amount,
Competitive Bid Rate and maturity date of each Competitive Bid
Advance made by a Lender to Borrower, and each payment made on
account of the principal thereof, shall be recorded by such
Lender on its books.
(d)
The Competitive Bid Advances will be used by Borrower to
provide working capital and for the general business purposes
of Borrower and its Subsidiaries. No Competitive Bid Advances
shall be used for the purpose of purchasing or carrying any
Margin Stock in violation of the Margin Regulations.
(e)
The obligation of Lenders to make each Competitive Bid Advance
after timely acceptance by Borrower is further subject to the
conditions contained in Article 3.
(f)
Borrower shall not be required to accept Competitive Bid
Offers on the basis of the lowest Competitive Bid Rate
offered, but may in its sole discretion accept any Competitive
Bid Offer regardless of the Competitive Bid Rate(s) offered.
ARTICLE 3
CONDITIONS PRECEDENT TO LENDING
Section 3.1
Initial Conditions Precedent. No Lender has any
obligation to make its first Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance and Issuing Bank has no obligation to issue the first
Letter of Credit (whether or not otherwise agreed to by Issuing Bank) unless:
(a)
Administrative Agent shall have received all of the following
with copies for each Lender, at Administrative Agent's office
in Midland, Texas:
(1)
This Agreement, the Notes, those Security Instruments
and Guaranties
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listed on Schedule 5 hereto, any other documents
required in connection herewith, each duly executed
and delivered and in form, substance and date
satisfactory to Managing Agents.
(2)
The following certificates:
(i)
an "Omnibus Certificate" of the Secretary or
an Assistant Secretary and of a Designated
Officer, which shall contain the names and
signatures of the officers of Borrower
authorized to execute Loan Documents and
which shall certify to the truth, correctness
and completeness of the following exhibits
attached thereto: (A) a copy of resolutions
duly adopted by the Board of Directors of
Borrower and in full force and effect at the
time this Agreement is entered into,
authorizing the execution of this Agreement
and the other Loan Documents delivered or to
be delivered in connection herewith and the
consummation of the transactions contemplated
herein and therein, (B) a copy of the charter
documents of Borrower and all amendments
thereto, certified by the appropriate
official of Borrower's jurisdiction of
organization, and (C) a copy of the bylaws or
similar governing documents of Borrower
(provided that, to the extent Borrower has
previously provided Administrative Agent
certified copies of the documents described
in (B) and (C) above, such Omnibus
Certificate may omit such documents, but
shall include a statement that such documents
have not been modified in any respect since
the date last so provided to Administrative
Agent, except as may be specifically noted in
such Omnibus Certificate with appropriate
attachments); and
(ii)
a "Compliance Certificate" of a Designated
Officer of Borrower, of even date with such
Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance or issuance of a
Letter of Credit, in which such officer
certifies to the satisfaction of the
conditions set out in Section 3.2(a) and (b)
and that all conditions hereunder have been
satisfied.
(3)
A certificate (or certificates) of the due formation,
valid existence and good standing of Borrower in its
jurisdiction of organization, issued by the
appropriate authorities of such jurisdiction.
(4)
The favorable opinions of the counsel for Borrower
and the Restricted Subsidiaries, given upon their
express instructions substantially in the
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form set forth as Exhibit H attached hereto.
(5)
Documents similar to those specified in Section
3.1(a)(2)(i) and 3.1(a)(3) with respect to each
Restricted Subsidiary which is or will be party to a
Security Instrument on the date hereof.
(6)
A certificate of a Designated Officer of Borrower as
to insurance concerning the material assets of
Designated Entities. Lenders agree that Designated
Entities' insurance coverage disclosed on Schedule 4
is acceptable at the date hereof.
(b)
Except as disclosed to the Lenders in the Disclosure Schedule
or otherwise in writing prior to the execution hereof and not
objected to by Required Lenders, there shall be no pending or
threatened litigation, action or proceeding against Borrower
or any of its Subsidiaries which, if adversely determined,
could reasonably be expected to have a Material Adverse
Effect.
(c)
No event or condition shall have occurred (i) with respect to
Borrower and its Restricted Subsidiaries (other than Chauvco
and its Subsidiaries) since August 8, 1997 and (ii) with
respect to Chauvco and its Subsidiaries since September 30,
1997, which is reasonably expected to result in a Material
Adverse Effect.
(d)
After giving effect to such Revolving Loan Advances,
Competitive Bid Advances and Swing Line Advances and Letters
of Credit, Borrower and Lenders shall be in compliance with
the Margin Regulations.
(e)
The acquisition by Borrower or any of its Affiliates of
Chauvco (the "Acquisition") shall have been consummated as
contemplated by and pursuant to that certain Combination
Agreement, dated as of September 3, 1997, as amended (the
"Acquisition Agreement"), between Borrower and Chauvco, and
Administrative Agent shall have received (i) satisfactory
evidence of the consummation of such Acquisition and (ii) a
certificate from a Designated Officer of Borrower certifying
that the Acquisition has been consummated.
(f)
A certificate of a Designated Officer of Borrower certifying
that (i) all representations and warranties made by any
Designated Entity in this Agreement or any other Loan Document
are true and correct as of the Effective Date and (ii) that
all conditions precedent to the initial Advance contained in
this Agreement or any other Loan Document have been satisfied
as of the Effective Date.
(g)
All requisite Governmental Authorities and third parties shall
have approved or
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consented to the Acquisition and all related transactions,
including, without limitation, the issuance, closing and
funding of this Agreement and the facilities thereunder, to
the extent required. All applicable appeal periods shall have
expired and there shall be, in the judgment of the Managing
Agents, in their sole discretion, no governmental or judicial
action, actual or threatened, restraining, preventing or
imposing burdensome conditions on the Acquisition and all
related transactions, including, without limitation, the
issuance, closing and funding of this Agreement and the
facilities thereunder.
(h)
Managing Agents shall have received copies of all financial
statements, reports, notices and proxy statements sent by
Borrower to its stockholders and all SEC filings concerning
the Acquisition.
(i)
No litigation or administrative proceeding or other legal or
regulatory developments prohibiting or enjoining the
consummation of the Acquisition shall exist.
(j)
Exclusive of the Acquisition, no "Event of Default" (as
defined in the Existing Credit Agreement) shall have occurred
and be continuing.
(k)
Administrative Agent shall have received copies of (i) the
executed documentation for the 364 Day Credit Facility and
(ii) the executed documentation for the Canadian Credit
Facility.
Section 3.2
Additional Conditions Precedent. No Lender has any
obligation to make any Revolving Loan Advance, Competitive Bid Advance or Swing
Line Advance (including its initial Advance) and Issuing Bank has no obligation
to issue any Letter of Credit (including the first) unless the following
conditions precedent have been satisfied:
(a)
All representations and warranties made by any Designated
Entity in any Loan Document shall be true on and as of the
date of such Revolving Loan Advance, Swing Line Advance,
Competitive Bid Advance or issuance of Letter of Credit as if
such representations and warranties had been made as of the
date of such Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance or issuance of such Letter of Credit
(unless stated to relate solely to an earlier date, in which
case such representations and warranties shall be true and
correct as of such earlier date).
(b)
In the case of the first Revolving Loan Advance, Swing Line
Advance or Competitive Bid Advance or issuance of the first
Letter of Credit, no Event of Default, and in the case of any
other Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance or issuance of a Letter of Credit, no
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Default shall exist at the date of such Revolving Loan
Advance, Swing Line Advance or Competitive Bid Advance or
issuance of Letter of Credit or will occur as a result of the
making of the requested Revolving Loan Advance, Swing Line
Advance or Competitive Bid Advance or the issuance of the
requested Letter of Credit.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1
Borrower's Representations and Warranties. To
confirm each Lender's understanding concerning Borrower and its businesses,
properties and obligations, and to induce Managing Agents, Co-Agents and each
Lender to enter into this Agreement and to make the Loans to Borrower, except
as to matters disclosed herein or in the Disclosure Schedule, Borrower
represents and warrants to Managing Agents, Co-Agents and each Lender that:
(a)
No Default. No Designated Entity is in default in the
performance of any of the covenants and agreements contained
herein or under any other Loan Document. No event or
circumstance has occurred and is continuing which constitutes
a Default.
(b)
Organization, Existence and Good Standing. Each Designated
Entity is duly organized or incorporated, validly existing and
in good standing under the laws of its jurisdiction of
organization or incorporation, having all corporate or
partnership powers required to enter into and carry out the
transactions contemplated hereby. Each Designated Entity is
duly qualified, in good standing, and authorized to do
business in all other jurisdictions wherein the character of
the properties owned or held by it or the nature of the
business transacted by it makes such qualification necessary,
except for any lack of qualification, good standing or
authorization that could not reasonably be expected to have a
Material Adverse Effect. Each Designated Entity has taken all
actions customarily taken in order to enter, for the purpose
of conducting business or owning property, each jurisdiction
outside the United States wherein the character of the
properties owned or held by it or the nature of the business
transacted by it makes such actions desirable, except for any
failure or other matter that could not reasonably be expected
to have a Material Adverse Effect.
(c)
Authorization. Each Designated Entity has duly taken all
corporate or partnership action necessary to authorize the
execution and delivery by it of the Loan Documents to which it
is a party and to authorize the consummation of the
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53
transactions contemplated thereby and the performance of its
obligations thereunder. Borrower is duly authorized to borrow
funds hereunder.
(d)
No Conflicts or Consents. The execution and delivery by each
Designated Entity of the Loan Documents to which it is a
party, the performance by each Designated Entity of its
obligations under such Loan Documents, and the consummation of
the transactions contemplated by the various Loan Documents,
including, without limitation, the consummation of the
Acquisition, do not and will not (1) conflict with any
provision of the articles or certificate of incorporation,
bylaws, charter, partnership agreement or certificate or other
governing document of such Designated Entity, or (2) except as
to matters that could not reasonably be expected to have a
Material Adverse Effect, result in the acceleration of any
Debt owed by such Designated Entity, or conflict with any law,
statute, rule, regulation, or material agreement, judgment,
license, order or permit applicable to or binding upon such
Designated Entity, or require the consent, approval,
authorization or order of, or notice to or filing with, any
Governmental Authority or third party, or result in or require
the creation of any Lien upon any material assets or
properties of such Designated Entity, except (i) as permitted
in the Loan Documents and (ii) for filings and recordings of
the Security Instruments.
(e)
Enforceable Obligations. This Agreement is, and the other
Loan Documents when duly executed and delivered will be,
legal, valid and binding obligations of each Designated Entity
which is a party hereto or thereto, enforceable in accordance
with their terms except as such enforcement may be limited by
bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights generally and
by general principles of equity.
(f)
Financial Statements. (i) The Updated Financial Statements
fairly present Borrower's, Mesa's and P&P Petroleum's and each
of their Consolidated subsidiaries' financial position at the
respective dates thereof and the results of Borrower's, Mesa's
and P&P Petroleum's and each of their Consolidated
subsidiaries' operations and cash flows for the respective
periods thereof. From the date of the audited Updated
Financial Statements to the Effective Date, no change has
occurred in Borrower's, Mesa's or P&P Petroleum's Consolidated
financial condition which could reasonably be expected to
result in a Material Adverse Effect, except as reflected in
the Disclosure Schedule. From September 30, 1997 to the
Effective Date, no change has occurred in Chauvco's
Consolidated financial condition which could reasonably be
expected to result in a Material Adverse Effect, except as
reflected in the Disclosure Schedule. All Updated Financial
Statements were prepared in accordance with GAAP as in effect
on the date thereof.
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(ii)
The Unaudited Pro Forma Financial Statements
of Borrower for the periods ending December 31, 1996 and
September 30, 1997 contained in the Joint Management
Information Circular and Proxy Statement, dated November 17,
1997 (the "Proxy"), and the Unaudited Pro Forma Financial
Statements of Borrower for the period ending September 30,
1997, fairly present Borrower's pro forma financial position
at the respective dates thereof and the results of Borrower's
pro forma operations and cash flows for the respective periods
thereof. From the date of such financial statements to the
Effective Date no change has occurred in Borrower's
Consolidated financial condition which could reasonably be
expected to result in a Material Adverse Effect on Borrower's
Pro Forma Consolidated Financial Condition, except as
reflected in the Disclosure Schedule. All such financial
statements were prepared in accordance with GAAP as in effect
on the date thereof.
(g)
Other Obligations. Except as disclosed in the Disclosure
Schedule, as of the Effective Date, neither Borrower nor any
of its Consolidated Subsidiaries has any outstanding Debt
which is, in the aggregate, material to Borrower and its
Consolidated Subsidiaries and not shown in the Updated
Financial Statements.
(h)
Full Disclosure. No certificate, statement or other
information delivered herewith or heretofore by any Designated
Officer of any Designated Entity to either of Managing Agents,
Co-Agents or any Lender in connection with the negotiation of
this Agreement or in connection with any transaction
contemplated hereby contains any untrue statement of a fact or
omits to state any fact known to Borrower, P&P Petroleum, Mesa
or any Designated Entity (other than industry-wide risks
normally associated with the types of businesses conducted by
Borrower, P&P Petroleum, Mesa or any Designated Entity)
necessary to make the statements contained herein or therein
not misleading as of the date made or deemed made, except to
the extent that any untrue statement or omission could not
reasonably be expected to have a Material Adverse Effect.
(i)
Litigation. Except as disclosed in the Updated Financial
Statements or in the Disclosure Schedule: (1) there are no
actions, suits or legal, equitable, arbitrative or
administrative proceedings pending, or, to the knowledge of
Borrower, threatened, against any Designated Entity before any
Governmental Authority that could reasonably be expected to
have a Material Adverse Effect, and (2) there are no
outstanding judgments, injunctions, writs, rulings or orders
by any such Governmental Authority against Borrower, P&P
Petroleum, Mesa or any of their respective Consolidated
Subsidiaries which could reasonably be expected to have a
Material Adverse Effect.
(j)
Environmental Matters. The liabilities and costs of Borrower
and its
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Consolidated Subsidiaries related to compliance with
applicable Environmental Laws (as in effect on the date on
which this representation is made or deemed made) could not
reasonably be expected to have a Material Adverse Effect.
(k)
Title to Properties. Each Designated Entity has good and
defensible title to all of its material properties and assets,
except any failure, defect or other matter that could not, in
the aggregate, reasonably be expected to have a Material
Adverse Effect.
(l)
Investment Company Act. Neither Borrower nor any of its
Subsidiaries is an "investment company" or a "company
controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.
(m)
Public Utility Holding Company Act. Neither Borrower nor any
of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding
company", or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(n)
Principal Business Offices. As of the Effective Date, each
Designated Entity's principal place of business and chief
executive office is located at the place described in the
Disclosure Schedule.
(o)
Solvency. Each Designated Entity is solvent and will continue
to be solvent after the making and guarantying of the Loans
and the issuance of the Letters of Credit.
(p)
Organization. As of the Effective Date, the organization
chart of Borrower and its Subsidiaries with material assets
set forth on Exhibit I is true and correct in all material
respects. Except for the Exchangeable Shares, as of the
Effective Date, Borrower or a Restricted Subsidiary owns all
of the issued and outstanding capital stock of each Restricted
Subsidiary. As of the Effective Date, no Restricted
Subsidiary has issued any securities convertible into shares
of its stock or any options (except as set forth in the
Disclosure Schedule), warrants or other rights to acquire such
shares or securities convertible into such shares and the
outstanding capital stock and securities of each Restricted
Subsidiary is owned by Borrower or another Restricted
Subsidiary free and clear of all Liens, warrants, options or
rights of others of any kind whatsoever, except for Permitted
Liens.
(q)
Use of Proceeds; Margin Stock.
shall use (i) the
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Borrower and its Subsidiaries
56
initial Revolving Loan Advance to discharge all outstanding
obligations under the Existing Credit Agreement, and (ii) all
Revolving Loan Advances, Letters of Credit, Competitive Bid
Advances and Swing Line Advances for its and their respective
general corporate purposes. In no event shall the funds from
any Revolving Loan Advance, Swing Line Advance, Competitive
Bid Advance or Letter of Credit be used directly or indirectly
by any Persons for personal, family, household or agricultural
purposes or for the purpose, whether immediate, incidental or
ultimate, of purchasing, acquiring or carrying any "margin
stock" or any "margin securities" (as such terms are defined
in the Margin Regulations) in violation of the Margin
Regulations, or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or
carry "margin stock" or "margin securities" in violation of
the Margin Regulations, or to extend credit to others directly
or indirectly for the purpose of purchasing or carrying any
such margin stock or margin securities in violation of the
Margin Regulations. Borrower is not engaged principally, or as
one of Borrower's important activities, in the business of
extending credit to others for the purpose of purchasing or
carrying such margin stock or margin securities. Neither any
Designated Entity nor any Person acting on behalf of any
Designated Entity has taken or will take any action which
might cause this Agreement, the Notes, or any Guaranty, any
Loan Document or any Loan or Letter of Credit to violate the
Margin Regulations or to violate Section 7 of the Securities
Exchange Act of 1934, or any rule or regulation thereunder, in
each case as now or hereafter in effect.
(r)
Liens Under the Security Instruments. Upon the execution and
delivery of the Security Instruments in accordance herewith,
and where appropriate the filing and recordation thereof with
the appropriate filing or recording officers in each of the
necessary jurisdictions, the Liens granted and to be granted
by any Designated Entity to Lenders or the Trustee (as defined
in any of the Security Instruments) on behalf of Lenders in
such Designated Entity's assets pursuant to the Security
Instruments will be validly created, perfected and first
priority Liens, subject only to Permitted Liens.
Section 4.2
Representation by Lenders. Each Lender hereby
represents that it will acquire its Notes for its own account in the ordinary
course of its commercial lending business; however, such Lender may sell or
otherwise transfer its Notes, any participation interest or other interest in
its Notes, or any of its other rights and obligations under the Loan Documents
as permitted by Section 8.8.
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ARTICLE 5
COVENANTS OF BORROWER
Section 5.1
Affirmative Covenants. To conform with the terms and
conditions under which each Lender is willing to have credit outstanding to
Borrower, and to induce Managing Agents, Co-Agents and each Lender to enter
into this Agreement and make the Loans to Borrower and to issue Letters of
Credit, unless Required Lenders shall have previously agreed otherwise in
writing, Borrower, severally for itself and its Subsidiaries, covenants and
agrees that:
(a)
Payment and Performance. Borrower will pay all amounts due
from it under the Loan Documents in accordance with the terms
thereof and will observe, perform and comply with every
covenant, term and condition expressed in the Loan Documents,
and will cause each Designated Entity which is a Subsidiary of
Borrower to perform and comply with every covenant, term and
condition expressed in the Loan Documents and applicable to
such Designated Entity.
(b)
Books, Financial Statements and Reports. Borrower will at all
times maintain full and materially accurate books of account
and records. Borrower will maintain and will cause its
Subsidiaries to maintain a standard system of accounting and
will cause the following statements and reports to be
delivered to Managing Agents and each Lender at Borrower's
expense:
(1)
As soon as available, and in any event within 120
days after the end of each Fiscal Year, complete
audited Consolidated financial statements of Borrower
and its Subsidiaries and unaudited consolidating
balance sheets and statements of operations of
Borrower and its Subsidiaries, prepared in reasonable
detail in accordance with GAAP; such audited
statements to be accompanied by an opinion, by KPMG
Peat Marwick, or such other independent certified
public accountants of nationally recognized standing
selected by Borrower, stating that such Consolidated
financial statements have been so prepared. Borrower
will, together with each set of such financial
statements delivered pursuant to this Section,
furnish a certificate in the form of Exhibit J signed
by a Designated Officer of Borrower stating that, to
the best of his knowledge, (i) such financial
statements are accurate and complete, and (ii) no
Default or Event of Default exists at the end of such
Fiscal Quarter or at the time of such certificate or
specifying the nature and period of existence of any
such Default or Event of Default. Such certificate
shall contain calculations showing compliance (or
noncompliance) at the end of such Fiscal Quarter with
the requirements of Sections 5.3(a) and (b).
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(2)
As soon as available, and in any event within 60 days
after the end of the first three Fiscal Quarters in
each Fiscal Year, unaudited Consolidated financial
statements of Borrower and its Subsidiaries and
unaudited consolidating balance sheet and statements
of operations of Borrower and its Subsidiaries as of
the end of such Fiscal Quarter, all in reasonable
detail and prepared in accordance with GAAP, subject
to changes resulting from year-end adjustments.
Borrower will, together with each set of such
financial statements delivered pursuant to this
Section, furnish a certificate in the form of Exhibit
J signed by a Designated Officer of Borrower stating
that, to the best of his knowledge, (i) such
financial statements are accurate and complete, and
(ii) no Default or Event of Default exists at the end
of such Fiscal Quarter or at the time of such
certificate or specifying the nature and period of
existence of any such Default or Event of Default.
Such certificate shall contain calculations showing
compliance (or noncompliance) at the end of such
Fiscal Quarter with the requirements of Sections
5.3(a) and (b).
(3)
Promptly after transmittal or filing, copies of all
financial statements, reports, notices and proxy
statements sent by Borrower to its stockholders and
all registration statements, periodic reports and
other statements and schedules filed by Borrower or
any of its Subsidiaries with any securities exchange,
the Securities and Exchange Commission or any similar
Governmental Authority.
(c)
Other Information and Inspections. Borrower will furnish to
Managing Agents and each Lender any information which
Administrative Agent, on behalf of any Lender, may from time
to time reasonably request in writing concerning any covenant,
provision or condition of the Loan Documents or any matter in
connection with Borrower's and its Subsidiaries' businesses
and operations. Borrower will permit and will cause each of
its Subsidiaries to permit representatives of Agents and
Lenders (including independent accountants, agents and
attorneys), at the expense and risk of the applicable Lender,
to visit and inspect, during normal business hours and upon
reasonable notice any of Borrower's or such Subsidiaries'
property, including its books of account, other books and
records, and any facilities or other business assets, and to
make extra copies therefrom and photocopies and photographs
thereof, and to write down and record any information such
representatives obtain, and Borrower shall permit and will
cause each of its Subsidiaries to permit Agents and the
Lenders or their representatives, to investigate and verify
the accuracy of the information furnished to Administrative
Agent or any Lender in connection with the Loan Documents and
to discuss all such matters with its officers, employees and
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representatives; provided, however, that any such visit,
inspection, investigation or verification or discussion with
respect to Borrower taking place at a time when Borrower has
been notified in writing by Administrative Agent of the
existence of a Default or an Event of Default applicable to
Borrower which has occurred and is continuing shall be at the
cost and expense of Borrower, and that neither Managing
Agents, Co-Agents nor Lenders shall have any obligation to pay
any costs or expenses of Borrower or any other Designated
Entity or any of their officers, employees or representatives
in respect thereof irrespective of the existence of any
Default or Event of Default.
(d)
Notice of Material Events. Borrower will promptly upon its
awareness thereof notify Administrative Agent and each Lender
(1) of the occurrence of any Default or any other event, which
has or may reasonably be expected to have, a Material Adverse
Effect, (2) of the acceleration of the maturity of any Debt
owed by any Designated Entity or any default by any Designated
Entity under any instrument evidencing or governing Debt, if
such acceleration or default has a Material Adverse Effect,
(3) of the occurrence of any Termination Event which may
reasonably be expected to have a Material Adverse Effect, and
(4) of the filing of any litigation or proceeding in which any
Designated Entity is a party or of any material developments
in existing litigation in which any Designated Entity is a
party in which an adverse decision may reasonably be expected
to have a Material Adverse Effect.
(e)
Maintenance of Existence and Qualifications. Borrower will,
and will cause each Restricted Subsidiary to, maintain and
preserve its existence as a corporation or partnership, as the
case may be. Borrower will, and will cause each Restricted
Subsidiary to, maintain and preserve its good standing and its
rights and franchises in full force and effect and qualify to
do business as a foreign corporation in all states or
jurisdictions where required by applicable law, except for any
failure to maintain, preserve and qualify that could not
reasonably be expected to have a Material Adverse Effect.
Nothing in this Section shall prohibit (i) a merger or
consolidation permitted by Section 5.2(c) or (ii) a
termination of such existence, good standing, rights or
franchises of any Restricted Subsidiary if Borrower determines
in good faith that such termination is in the best interest of
Borrower and could not reasonably be expected to have a
Material Adverse Effect.
(f)
Payment of Taxes and Trade Debt.
Borrower will, and will
cause each of its Subsidiaries to, except for any failure or
other matter that could not reasonably be expected to have a
Material Adverse Effect, (1) timely file all required tax
returns, (2) timely pay all taxes, assessments, and other
governmental charges or levies imposed upon it or upon its
income, profits or property, and (3) timely
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pay all trade debt. Borrower and its respective Subsidiaries
may, however, delay paying or discharging any such taxes,
assessments, charges, debts or levies so long as the validity
thereof is contested in good faith by appropriate proceedings
and adequate reserves therefor in accordance with GAAP have
been set aside and reflected among the books and records of
Borrower and its Subsidiaries.
(g)
Insurance. Borrower will, and will cause each of its
Subsidiaries to, at all times maintain insurance in such
amounts and covering such risks as are in accordance with
normal industry practice for companies engaged in similar
businesses and owning similar properties in the same general
area in which Borrower and its Subsidiaries conduct business,
which insurance (other than prudent self-insurance programs)
shall be by financially sound and reputable insurers.
(h)
Payment of Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, Borrower will
promptly pay all reasonable costs and expenses (including
reasonable attorneys' fees) incurred by or on behalf of (1)
the Documentation Agents in connection with the negotiation,
preparation, execution and delivery of the Loan Documents and
any amendment, modification or restatement thereof, and any
and all consents, waivers or other documents or instruments,
including commitment letters, term sheets and any memorandum
relating thereto (provided that Borrower shall be obligated to
pay only the attorneys' fees of a common counsel for the
Documentation Agents, Mayer, Brown & Platt), (2) Agents in
connection with due diligence, syndication, travel and
advertising related to this Agreement and the transactions
contemplated thereby, and (3) Administrative Agent or any
Lender in connection with enforcement of the Loan Documents or
the defense of Administrative Agent's or any Lender's exercise
of its rights thereunder. The selection of Managing Agents'
counsel and consultants in connection with the matters
described in the preceding sentence shall be subject to the
approval of Borrower, which approval shall not be unreasonably
withheld. Attorneys' fees reimbursed by Borrower for any
amendment, modification or restatement of any Loan Document
shall be estimated and approved by Borrower prior to
incurrence, such approval not to be unreasonably withheld.
Attorneys' fees reimbursed by Borrower in connection with the
enforcement of the Loan Documents or the defense of
Administrative Agent's or any Lenders' exercise of its rights
hereunder shall be for a single law firm per country (unless
conflicts (including conflicts between Managing Agents and the
other Lenders as determined in the reasonable discretion of
the Required Lenders) otherwise prohibit the engagement of a
single law firm).
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(i)
Compliance with Agreements and Law. Borrower will, and will
cause each of its Subsidiaries to (1) perform all material
obligations it is required to perform under the terms of each
material agreement, contract or other instrument or obligation
to which it is a party or by which it or any of its material
properties is bound, except for any non-performance that will
not have or reasonably be expected to have a Material Adverse
Effect; and (2) conduct its business and affairs in material
compliance with all laws, regulations, and orders applicable
thereto (including without limitation Environmental Laws)
except for any non-compliance that could not reasonably be
expected to have a Material Adverse Effect.
(j)
Maintenance of Business. Borrower will, and will cause each
Restricted Subsidiary to, maintain as its primary business the
exploration, production and development of oil, natural gas
and other liquid and gaseous hydrocarbons and the gathering,
processing, transmission and marketing of hydrocarbons and
activities related or ancillary thereto.
(k)
Operations. Borrower will, and will cause each Restricted
Subsidiary to, cause all material properties to be regularly
operated, maintained and developed in a good and workmanlike
manner, as would a prudent operator and in accordance with all
applicable federal, state and local laws, rules and
regulations, except for any failure to so operate, maintain
and develop that could not reasonably be expected to have a
Material Adverse Effect.
(l)
Restructuring. No later than 30 days after the Effective
Date, Borrower shall cause the Outside Debt to be assumed by
Borrower through a Restructuring. In connection with such
Restructuring, Pioneer USA shall guarantee the repayment of
the Outside Debt being assumed by Borrower. Contemporaneously
with such Restructuring, Borrower shall cause the Subsidiary
or Subsidiaries who are the surviving entities of such
Restructuring to execute new Guaranties. As used herein,
"Restructuring" shall mean the formation of one or more
wholly-owned Subsidiaries of Borrower and/or Pioneer USA and
the occurrence of one or more mergers, to take place on a
single day, among Borrower, Pioneer USA and any such
Subsidiaries, in each case as determined by Borrower to be
appropriate to bring about the assumption, by merger, of the
Outside Debt from Pioneer USA to Borrower as contemplated by
this Section.
Section 5.2
Negative Covenants. To conform with the terms and
conditions under which each Lender is willing to have credit outstanding to
Borrower, and to induce Managing Agents and each Lender to enter into this
Agreement and make the Loans to Borrower and to issue Letters of Credit, unless
Required Lenders shall have previously agreed otherwise in writing, Borrower,
severally for itself and its Subsidiaries, covenants and agrees that:
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(a)
Limitation on Debt. Borrower will not, and will not permit any
Restricted Subsidiary to, in any manner owe or be liable for
Debt except:
(1)
the Obligations;
(2)
Debt pursuant to the 364 Day Credit Facility and Debt
pursuant to the Canadian Credit Facility in a maximum
aggregate amount of $300,000,000;
(3)
unsecured Debt among Designated Entities;
(4)
Debt arising under capital leases which does not in
the aggregate for Borrower and all Restricted
Subsidiaries exceed $20,000,000 at any one time
outstanding;
(5)
Debt, other than Debt otherwise permitted by another
subparagraph of this Section 5.2(a), which, at the
time incurred, is at prevailing market rates of
interest and contains covenants and conditions and
events of default no more onerous to Designated
Entities than the terms of this Agreement; provided,
that no Default or Event of Default will result from
the incurrence of such Debt and be continuing;
(6)
guaranties of Debt which is the primary obligation of
a Designated Entity and permitted under this Section
5.2(a);
(7)
Debt arising (whether by contract or as a result of
statutory liability of a general partner) by virtue
of any Designated Entity being a general partner of a
general or limited partnership pursuant to agreements
in effect on the Effective Date not in excess of the
aggregate amounts permitted to be incurred pursuant
to such agreements on the Effective Date for all such
Debt and other such Debt otherwise permitted pursuant
to the other subparagraphs of this Section 5.2(a);
and
(8)
Debt existing on the Effective Date which is
disclosed (i) in the Updated Financial Statements or
(ii) in the Disclosure Schedule and any extensions,
renewals or replacements thereof upon terms no more
onerous to Borrower than the terms of this Agreement
or the terms of the instruments evidencing such Debt
as of the date of this Agreement.
(b)
Negative Pledge. Borrower will not, and will not permit any
of its Restricted Subsidiaries to, create, assume or permit to
exist any Lien upon any of their respective material property,
except Permitted Liens.
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(c)
Limitation on Mergers. Except as expressly provided in this
paragraph, Borrower will not, and will not permit any of its
Restricted Subsidiaries to, merge or consolidate with or into
any other business entity, except (1) Borrower may be party to
a merger or consolidation so long as the surviving entity is
Borrower and no Default will exist and the Obligations do not
exceed the Facility Amount after giving effect thereto and (2)
any Restricted Subsidiary may be a party to any merger or
consolidation so long as the surviving entity is a Restricted
Subsidiary and any Guaranty of, or Pledge Agreement by, such
Restricted Subsidiary continues as to such surviving entity,
no Default will exist, and the Obligations do not exceed the
Facility Amount after giving effect thereto.
(d)
Limitation on Disposition of Capital Stock of Restricted
Subsidiaries. Borrower will not, and will not permit any
Restricted Subsidiary to, sell, transfer or otherwise dispose
of capital stock of any Restricted Subsidiary, except that
Borrower and any Restricted Subsidiary may sell, issue,
transfer or otherwise dispose of the capital stock of any
Restricted Subsidiary to Borrower or to another Restricted
Subsidiary.
(e)
Limitation on Restricted Payments. Borrower will not, and
will not permit any Restricted Subsidiary to, make Restricted
Payments in excess of $150,000,000 in the aggregate for the
duration of this Agreement for all such Restricted Payments;
provided, however, that in the event that any Unrestricted
Subsidiary of Borrower is redesignated to be a Restricted
Subsidiary of Borrower for purposes of this Agreement, then
for purposes of determining compliance with this Section, all
Restricted Payments made to such Unrestricted Subsidiary shall
be deducted from the aggregate total of all Restricted
Payments made for the duration of this Agreement. No
Restricted Payment may be made (1) if the Obligations shall
exceed the Facility Amount, (2) if any Default or Event of
Default shall have occurred and be continuing, or (3) if as a
result thereof, any Default or Event of Default shall have
occurred and be continuing.
(f)
Transactions with Affiliates. Borrower will not, and will not
permit any of its Restricted Subsidiaries to, engage in any
material transaction with any of Borrower's Affiliates on
terms which are less favorable than those which would have
been obtainable at the time in arm's-length dealing with
Persons other than such Affiliates, provided, however that
such restriction shall not apply to transactions (i) among
Borrower and its Restricted Subsidiaries and (ii) among
Restricted Subsidiaries.
(g)
Limitations on Restricted Subsidiaries. Borrower will not
permit any Restricted Subsidiary to become subject to
covenants which:
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(1)
restrict dividends or dividend capacity;
(2)
restrict loans and advances to Borrower;
(3)
restrict the ability to make tax payments or
management payments to Borrower; or
(4)
restrict the capitalization structure of any
Restricted Subsidiary.
(h)
Limitation on Sale/Leasebacks. Designated Entities will not
enter into any arrangement, directly or indirectly, with any
Person whereby any Designated Entity shall sell or transfer
any material asset, and whereby any Designated Entity shall
then or immediately thereafter rent or lease as lessee such
asset or any part thereof.
(i)
Conversion between Restricted Subsidiary and Unrestricted
Subsidiary. Borrower may convert any Restricted Subsidiary to
an Unrestricted Subsidiary by giving Administrative Agent at
least five (5) Business Days' notice of such conversion in the
form of Exhibit K-1 attached hereto; provided that (1) no
Restricted Subsidiary shall be so converted so long as it owns
or will thereafter own, directly or indirectly, any interest
in any material asset or in another Restricted Subsidiary
unless the value of such material assets, together with the
aggregate of all Restricted Payments made and the value of any
other material assets determined as aforesaid of any
Restricted Subsidiaries converted to Unrestricted Subsidiaries
do not exceed in the aggregate the limitation on Restricted
Payments contained in Section 5.2(e) hereof, and (2) no such
conversion shall be made if after giving effect to such
conversion, any Default would exist. Upon any such conversion
of a Restricted Subsidiary to an Unrestricted Subsidiary, such
Subsidiary shall be released from its obligations under its
Guaranty, and Managing Agents and Lenders shall execute and
deliver a release substantially in the form of Exhibit K-2
hereto. Borrower may convert any Unrestricted Subsidiary to a
Restricted Subsidiary by giving Administrative Agent at least
five (5) Business Days' notice of such conversion in the form
of Exhibit K-1 attached hereto; provided that no such
conversion may be made if after giving effect to such
conversion, any Default would exist.
(j)
Margin Securities. Proceeds of the Loans will not be used to
purchase or carry Margin Stock except in compliance with the
Margin Regulations.
(k)
Modification to Canadian Credit Facility. Borrower shall not
make, permit or otherwise consent to any amendment or
modification to, or seek a waiver of, any representation,
warranty or covenant contained in the Canadian Credit
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Facility without the prior consent of the Required Lenders,
such consent not to be unreasonably withheld.
Section 5.3
Financial Covenants. To conform with the terms and
conditions under which each Lender is willing to have credit outstanding to
Borrower, and to induce Managing Agents and each Lender to enter into this
Agreement and make the Loans to Borrower and to issue Letters of Credit, unless
Required Lenders shall have previously agreed otherwise in writing, Borrower,
severally for itself and its Subsidiaries, covenants and agrees that:
(a)
EBITDAX to Consolidated Interest Expense Ratio. The ratio of
Borrower's "EBITDAX" to "Consolidated Interest Expense" for
the last four rolling Fiscal Quarters will not be less than
3.75 to 1.0; provided, however, that the EBITDAX to
Consolidated Interest Expense Ratio shall first be calculated
on December 31, 1997; provided further that for the periods
for calculation ending on or before September 30, 1998, each
reference to "for the last four rolling Fiscal Quarters" shall
be deemed to be a reference to the period from October 1, 1997
through the date of such calculation. As used in this
paragraph, the term "Consolidated Interest Expense" means for
any period, total interest expense, whether paid or accrued,
of Borrower and its Subsidiaries on a Consolidated basis,
including, without limitation, all commissions, discounts and
other fees and charges owed with respect to Letters of Credit.
As used in this paragraph, the term "EBITDAX" means for any
period the sum of the amounts for such period of Consolidated
net income, Consolidated Interest Expense, depreciation
expense, depletion expense, amortization expense, federal and
state income taxes, exploration and abandonment expense and
other non-cash charges and expenses, all as determined on a
Consolidated basis for Borrower and its Subsidiaries.
(b)
Consolidated Total Funded Debt to Total Capitalization.
Borrower's Consolidated Total Funded Debt to Total
Capitalization will not, as of the last day of any Fiscal
Quarter, be greater than 60%.
ARTICLE 6
EVENTS OF DEFAULT AND REMEDIES
Section 6.1
Events of Default. Each of the following events
constitutes an "Event of Default" under this Agreement:
(a)
Borrower shall default on the payment when due of any
principal on any of its Loans or any of its Notes or any
amount in respect of any LC Obligation;
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(b)
Borrower fails to pay any of its Obligations (other than
principal or any amount in respect of its LC Obligations) when
due and payable, whether interest in respect of any Loan or
any fee or any other amounts payable under any of the Loan
Documents and such failure shall continue unremedied for a
period of five (5) Business Days; provided, however, that any
such Default shall not constitute an Event of Default if
subsequently available information indicates that a payment
made when due was insufficient because of a good faith error
in calculation so long as Borrower shall cure such deficiency
within five (5) Business Days after Borrower becomes aware of
such deficiency;
(c)
any Designated Entity fails to duly observe, perform or comply
with any covenant, agreement, condition or provision set forth
in Section 5.1(d) or 5.2 of this Agreement;
(d)
any Designated Entity fails (other than as referred to in
subsections (a), (b) and (c) above) to duly observe, perform
or comply with any covenant, agreement, condition or provision
of any Loan Document applicable to it (even if all or part of
such agreement or covenant is void or unenforceable), and such
failure is not remedied within thirty (30) Business Days after
written notice thereof shall have been sent to Borrower by
Administrative Agent or any Lender;
(e)
any representation or warranty previously, presently or
hereafter made in writing or deemed made by or on behalf of
any Designated Entity in connection with any Loan Document
shall have been false or incorrect in any material respect on
any date on or as of which made and either (1) an Executive
Officer of Borrower had actual knowledge that such
representation or warranty was false or incorrect in a
material respect when made or (2) if no Executive Officer had
such knowledge, such representation or warranty shall continue
to be false or incorrect in any material respect thirty (30)
Business Days after the earlier of an Executive Officer of
Borrower obtaining actual knowledge thereof or written notice
thereof shall have been sent to Borrower by Administrative
Agent;
(f)
any Designated Entity (1) fails to pay when due Debt in excess
of $20,000,000 or (2) breaches or defaults in the performance
of any agreement or instrument by which any such Debt in
excess of $20,000,000 is issued, evidenced, governed, or
secured, and any such failure, breach or default continues
beyond any applicable period of grace provided therefor;
(g)
either (1) any "accumulated funding deficiency" (as defined in
Section 412(a) of the Internal Revenue Code of 1986, as
amended) in excess of $10,000,000 exists with respect to any
ERISA Plan, whether or not waived by the Secretary of the
Treasury or his delegate, or (2) any Termination Event which
has a Material
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Adverse Effect occurs with respect to any ERISA Plan and the
then current value of such ERISA Plan's benefit liabilities
exceeds the then current value of such ERISA Plan's assets
available for the payment of such benefit liabilities by more
than $10,000,000 (or in the case of a Termination Event
involving the withdrawal of a substantial employer, the
withdrawing employer's proportionate share of such excess
exceeds such amount);
(h)
any Designated Entity:
(1)
suffers the commencement of any involuntary
bankruptcy, reorganization, debt arrangement, winding
up, dissolution, official management or
administration, or other case or proceeding under any
bankruptcy or insolvency law or the entry against it
of a judgment, decree or order for relief by a court
of competent jurisdiction in such a case or
proceeding, which in either case remains undismissed
for a period of sixty (60) days; provided that each
Designated Entity hereby expressly authorizes each
Agent and each Lender to appear in any court
proceeding during such sixty (60) day period to
preserve, protect and defend their rights under the
Loan Documents;
(2)
commences a voluntary case under any applicable
bankruptcy, insolvency or similar law now or
hereafter in effect, including, without limitation,
the United States Bankruptcy Code or the Corporations
Law of Australia, as from time to time amended; or
applies for or consents or acquiesces to the entry of
an order for relief in an involuntary case under any
such law, or becomes insolvent or makes a general
assignment for the benefit of creditors, or fails
generally to pay (or admits in writing its inability
to pay) its debts as such debts become due, or takes
corporate or other action to authorize any of the
foregoing;
(3)
suffers the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee,
sequestrator, administrator or similar official of
all or a substantial part of its assets in a
proceeding brought against or initiated by it, and
such appointment is neither made ineffective nor
discharged within sixty (60) days after such event or
such appointment or taking possession is at any time
consented to, requested by, or acquiesced to by such
Designated Entity;
(4)
suffers the entry against it of a final judgment for
the payment of money in excess of $20,000,000 (not
covered by insurance satisfactory to Administrative
Agent in its discretion), unless the same is
discharged within thirty (30) days after the date of
entry thereof or an appeal or
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appropriate proceeding for review thereof is taken
within such period and a stay of execution pending
such appeal is obtained and continues; or
(5)
suffers a writ or warrant of attachment or any
similar process to be issued by any court against all
or any substantial part of its property, and such
writ or warrant of attachment or any similar process
is not stayed or released within thirty (30) days
after the entry or levy thereof or after any stay is
vacated or set aside;
(i)
(a) any person (other than Borrower, a Restricted Subsidiary
of Borrower or any employee benefit plan of Borrower or any of
its Subsidiaries) or group (as such term is used in Section
13(d) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended) shall acquire, directly or indirectly, beneficial
ownership of an aggregate of 35% or more of the issued and
outstanding voting stock of Borrower or (b) during any period
of two consecutive years ending on or after the Effective
Date, as determined as of the last day of each calendar
quarter after the Effective Date, the individuals (the
"Incumbent Directors") who at the beginning of such period
constituted the Board of Directors of Borrower (other than
additions thereto or removals therefrom from time to time
thereafter approved by a vote of at least two-thirds of such
Incumbent Directors) shall cease for any reason to constitute
50% or more of the Board of Directors of Borrower; provided,
however, that for each determination period ending on or
before September 30, 1999, each determination period shall be
deemed to be a period from the Effective Date through the date
of such calculation;
(j)
any of the Loan Documents are determined to be invalid or
unenforceable in any material respect;
(k)
(1)
any Restricted Subsidiary other than any Foreign
Restricted Subsidiary, and any of their respective
Restricted Subsidiaries fails to execute and deliver
to Collateral Agent a Guaranty of the type referred
to in clause (i) of the definition of "Guaranty",
within 30 days of becoming a Restricted Subsidiary;
(2)
unless and to the extent that any Foreign Restricted
Subsidiary or any other Restricted Subsidiary is
prohibited from, or subject to adverse tax
consequences as a result of, guaranteeing the
Obligations under this Agreement (a) under Section
956 of the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time
("Section 956") (b) pursuant to contractual
restrictions in existence prior to the Effective Date
or (c) as a matter of corporate law, any Foreign
Restricted
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Subsidiary or any other Restricted Subsidiary fails
to execute and deliver to Collateral Agent, a
Guaranty of the type referred to in clause (i) of the
definition of "Guaranty" together with in the case of
any Foreign Restricted Subsidiary, a notice in
relation to such Guaranty or, in the case of any
Restricted Subsidiary subject to the Corporation Laws
of Australia, a certificate under Section 206(6) of
the Corporations Laws of Australia in relation to
such Guaranty, in each case (1) as soon as
practicable following the termination or
inapplicability of the contractual restrictions,
corporate law prohibitions and adverse tax
consequences referred to in this paragraph or (2) if
no such contractual restrictions, corporate law
prohibitions and adverse tax consequences apply, as
soon as practicable following a determination that
such contractual restrictions, corporate law
prohibitions and adverse tax consequences do not
apply;
(l)
unless and to the extent that (a) any such pledge or mortgage
would result in (i) substantial stamp or similar taxes or (ii)
adverse tax consequences pursuant to Section 956, (b) any such
pledge or mortgage is prohibited either (i) pursuant to
contractual restrictions in existence prior to the Effective
Date or (ii) as a matter of corporate law, or (c) a Guaranty
of the type referred to in clause (i) of the definition of
"Guaranty" has been executed and delivered by the Restricted
Subsidiary the capital stock or shares of which would
otherwise be subject to pledge or mortgage under this
paragraph, Borrower, or any Subsidiary of Borrower, owning
capital stock or shares of any Restricted Subsidiary of any
Foreign Restricted Subsidiary, fails (x) to execute and
deliver to Collateral Agent the Pledge Agreements, together
with sixty-five percent (65%) of all issued and outstanding
stock or shares of such Restricted Subsidiary or such Foreign
Restricted Subsidiary and stock powers or share transfers
executed in blank, together with a either a certificate under
Section 206 (6) of the Corporations Law of Australia or a
notice of the type described in Section 6.1(k)(2) hereof, in
each case in relation to such Pledge Agreement, as the case
may be and if applicable, as soon as practicable after the
termination or inapplicability of such contractual
restrictions and corporate law prohibitions and adverse tax
consequences referred to in this paragraph and (y) to repay
all Obligations and other amounts and to cause all outstanding
Letters of Credit to be terminated and the originals thereof
to be returned to the Issuing Bank as soon as practical after
the termination or inapplicability of such contractual
restrictions and corporate law prohibitions and adverse tax
consequences referred to in this paragraph; or
(m)
any Designated Entity, to the extent applicable, fails, (x)
promptly upon the reasonable request of the Managing Agents at
any time or from time to time
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prior to the applicable Stock Pledge Release Date, as the case
may be, (1) to execute, acknowledge or deliver, or to cause to
be executed, acknowledged or delivered, or to register, record
or file, or to cause to be registered, recorded or filed, any
document or instrument necessary or advisable or as Required
Lenders may from time to time reasonably deem to be necessary
or advisable in connection with the grant, creation,
preservation, perfection or maintenance, as first, prior and
perfected Liens, the Liens created, or intended to be created,
by the applicable Security Instruments, subject only to
Permitted Liens or (2) to perform or to continue to perform at
all times and from time to time all actions necessary or
advisable or reasonably deemed to be necessary or advisable by
the Required Lenders in connection with such creation,
preservation, perfection and maintenance; and (y) to repay all
Obligations and other amounts and to cause all outstanding
Letters of Credit to be terminated and the originals thereof
to be returned to the Issuing Bank as soon as practical after
receipt of the reasonable request of Managing Agents pursuant
to the foregoing clause (x);
provided, however, that the foregoing events which affect only
Restricted Subsidiaries that (a) are not guarantors of the
Obligations, and (b) are immaterial (as determined by the
Managing Agents), shall not constitute "Events of Default"
under this Agreement. It is agreed by the parties hereto that
so long as Borrower or any Restricted Subsidiary has made
reasonable efforts under the circumstances to obtain the
approvals required by Section 205(10) of the Corporations Law
of Australia (if applicable), the foregoing paragraphs (k)(2),
(l) and (m) shall not require any Restricted Subsidiaries to
provide any pledge or guaranty prohibited by corporate law
unless the requirements of such Section 205(10) of the
Corporations Law of Australia, to the extent applicable, have
been satisfied; and
(k)
Any "Event of Default" as defined in the Canadian Credit
Facility or the 364 Day Credit Facility shall occur; provided
that the occurrence of a "Default" as defined in the Canadian
Credit Facility or the 364 Day Credit Facility shall
constitute a Default under this Agreement; provided further
that if such "Default" is cured or waived under the Canadian
Credit Facility or the 364 Day Credit Facility, as applicable,
then such "Default" shall no longer constitute a Default under
this Agreement.
Upon the occurrence of an Event of Default described in Section 6.1(h)(1), (2)
or (3) with respect to Borrower, the Commitments shall automatically terminate
and all of the Obligations shall thereupon be immediately due and payable,
without demand, presentment, notice of demand or of dishonor and nonpayment,
protest, notice of protest, notice of intention to accelerate, declaration or
notice of acceleration, or any other notice or declaration of any kind, all of
which are hereby expressly waived by Borrower and each Designated Entity who at
any
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time ratifies or approves this Agreement. During the continuance of any other
Event of Default, Administrative Agent at any time and from time to time upon
written instructions from Required Lenders (which, for purposes of this
sentence only, shall be determined giving effect to each Lender's outstanding
Swing Line Advances and Competitive Bid Advances) shall, by notice to Borrower
(but otherwise without notice to any other Designated Entity), declare the
Commitments to be terminated, and/or declare any or all of the Obligations
immediately due and payable, and all such Obligations shall thereupon be
immediately due and payable, without demand, presentment, notice of demand or
of dishonor and nonpayment, protest, notice of protest, notice of intention to
accelerate, declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly waived by Borrower
and each Designated Entity who at any time ratifies, approves or guaranties
this Agreement and/or require Borrower to deposit Cash Collateral with
Administrative Agent in an amount determined in accordance with paragraph (c)
of Section 2.14.
Section 6.2
Remedies. If any Default shall occur and be
continuing, each Lender or Administrative Agent on behalf of Lenders may
protect and enforce its rights under the Loan Documents by any appropriate
proceedings, including, without limitation, proceedings for specific
performance of any covenant or agreement contained in any Loan Document, and
each Lender may enforce the payment of any Obligations due it or enforce any
other legal or equitable rights which it may have. Additionally, under such
circumstances, the Required Lenders or, at the direction of Required Lenders,
the Trustee (or Collateral Agent) may proceed to protect the Lenders' rights
under the Security Instruments. All rights, remedies and powers conferred upon
Administrative Agent and Lenders under the Loan Documents are cumulative and
not exclusive of any other rights, remedies or powers available under the Loan
Documents or at law or in equity.
Section 6.3
Annulment of Acceleration. If a declaration of
acceleration is made pursuant to this Article 6, then Required Lenders, by
written notice to Borrower and Administrative Agent, may collectively rescind
and annul such declaration in its entirety; provided, that at the time such
declaration is annulled and rescinded: (a) no judgment or decree has been
entered for the payment of any moneys due pursuant to any Note or this
Agreement; (b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and this Agreement (other than principal amounts which
may have become due as a result of acceleration), including interest upon
overdue interest, to the extent payment thereof is lawful, shall have been duly
paid; and (c) each and every other Event of Default which has theretofore
occurred shall have been waived pursuant to Section 8.1 or otherwise made good
or cured.
Section 6.4
Indemnity. Borrower hereby indemnifies each Agent and
each Lender, from and against any and all liabilities, obligations, claims,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements (including reasonable fees of attorneys, accountants, experts and
advisors) of any kind or nature whatsoever (in this Section collectively called
"liabilities and costs") which to any extent (in whole or in part) may be
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imposed on, incurred by, or asserted against such Agent or such Lender
result of, arising out of, relating to or in connection with:
as a
(a)
the Loan Documents to which Borrower or one or more of its
Subsidiaries is a party or the rights provided therein
(including the enforcement or defense thereof);
(b)
the direct or indirect application or proposed application of
the proceeds of any Loan or Letter of Credit to or for
Borrower or any of its Subsidiaries;
(c)
any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan or
Letter of Credit to or for Borrower or any of its
Subsidiaries;
(d)
any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter
(including enforcement) relating to any Environmental Law or
the condition of any facility or property owned, leased or
operated by Borrower or any of its Subsidiaries; or
(e)
the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from,
any facility owned or operated by Borrower or any of its
Subsidiaries of any hazardous or toxic substance (including
any liabilities and costs under any Environmental Law),
regardless of whether caused by, or within the control of,
Borrower or any of its Subsidiaries; or any misrepresentation,
inaccuracy or any breach in or of Section 4.1(j) or Section
5.1(i) by or with respect to Borrower or any of its
Subsidiaries.
The foregoing indemnification shall not apply to the extent such liabilities
and costs are determined to have resulted or been caused, in whole or in part,
by the gross negligence or willful misconduct on the part of such Agent or
Lender. THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH
LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN
PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND EXCEPT AS PROVIDED BY THE
IMMEDIATELY PRECEDING SENTENCE. In the event that any claim or demand for
which Borrower would be liable to any Agent or any Lender under this Section is
asserted against or sought to be collected from any Agent or any Lender by a
third party, Agent or such Lender shall promptly notify Borrower of such claim
or demand. Borrower shall have the lesser of: (i) thirty (30) Business Days
from receipt of the above notice; or (ii) three (3) Business Days prior to the
expiration of any period after which a default judgment may be entered against
such Agent or Lender (the "Notice Period") to notify such Agent and/or Lender
whether or not Borrower desires, at the sole cost and expense of Borrower, to
defend such Agent and/or Lender against such claim or demand. In the event
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that Borrower notifies such Agent and/or Lender within the Notice Period, that
it desires to defend such Agent and/or Lender against such claim or demand,
Borrower shall have the right to settle or otherwise dispose of such claim or
demand (other than claims alleging criminal violations) on such terms as
Borrower, with the consent of the indemnified party (which consent shall not be
unreasonably withheld) shall deem appropriate; provided that:
(w)
counsel designated by Borrower is reasonably
acceptable to the Managing Agents and the affected
Lender;
(x)
Borrower will have acknowledged in writing that this
Section will cover any liabilities and costs in any
such claim or demand;
(y)
in the sole determination of the Managing Agents and
the affected Lender, Borrower will have the financial
ability to pay such liabilities and costs; and
(z)
Borrower shall thereafter consult with the Managing
Agents and the affected Lender with respect to such
claim or demand; and
provided further, that each of Agents and the affected Lender shall have the
right at all times to participate in any proceeding, at their sole cost and
expense, subject, however, to Borrower's right to control the defense of all
proceedings concerning such claim or demand.
In the event that Borrower fails to give such Agent and/or Lender such notice,
such Agent and/or Lender may defend against such claim or demand; provided,
however, that Borrower's obligation to reimburse such Agent and/or Lender shall
be limited to a single law firm of such Agent and/or Lender (unless Borrower
otherwise consents, which consent shall not be unreasonably withheld); provided
further, that Borrower shall have the right at all times to participate in any
such proceeding, at its sole cost and expense, subject, however, to the right
of such Agent and/or Lender to control the defense of all proceedings
concerning such claim or demand. As used in this Section, the terms "Agent"
and "Lender" shall refer not only to the Persons designated as such in Section
1.1 but also to each director, officer, agent, attorney, employee and
representative of such Person.
ARTICLE 7
AGENTS
Section 7.1
Appointment and Authority. NationsBank of Texas,
N.A. is hereby appointed Administrative Agent hereunder and under each other
Loan Document, CIBC Inc. is hereby appointed Documentation Agent hereunder and
under each other Loan Document,
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Morgan Guaranty Trust Company of New York is hereby appointed Documentation
Agent hereunder and under each other Loan Document and The Chase Manhattan Bank
is hereby appointed Syndication Agent hereunder and under each other Loan
Document, each Co-Agent is hereby appointed Co-Agent hereunder and under each
other Loan Document, and each of the Lenders hereby authorizes each such Agent
to act as the agent of such Lender hereunder and each other Loan Document to
the extent provided herein or therein. In addition, each Lender hereby
irrevocably authorizes Administrative Agent, and Administrative Agent hereby
undertakes, to receive payments of principal, interest due hereunder as
specified herein and to act as Collateral Agent under the Security Instruments.
In addition, each Lender hereby authorizes each Agent, and each Agent hereby
undertakes to take all other actions and to exercise such powers under the Loan
Documents as are specifically delegated to such Agent by the terms hereof or
thereof, together with all other powers reasonably incidental thereto. No
Co-Agent has any duties or responsibilities whatsoever as Co-Agent (as opposed
to its capacity as Lender) under or in connection with this Agreement or any of
the Loan Documents. The relationship of each Agent to Lender is only that of
one commercial bank acting as administrative agent for others, and nothing in
the Loan Documents shall be construed to constitute any Agent a trustee or
other fiduciary for any holder of any of the Notes or of any participation
therein or in the LC Obligations, nor to impose on any Agent duties and
obligations other than those expressly provided for in the Loan Documents.
None of the Agents shall have implied duties to Lenders, or any obligations to
Lenders to take any action under the Loan Documents, except any action by an
Agent specifically provided by the Loan Documents to be taken by such Agent.
With respect to any matters not expressly provided for in the Loan Documents
and any matters which the Loan Documents place within the discretion of any
Agent, such Agent shall not be required to exercise any discretion or take any
action, and each such Agent may request instructions from Lenders with respect
to any such matter, in which case such Agent shall be required to act or to
refrain from acting (and shall be fully protected and free from liability to
any and all Lenders and Agents in so acting or refraining from acting) upon the
instructions of Required Lenders (including itself); provided, however, that no
Agent shall be required to take any action which exposes it to a risk of
personal liability that it considers unreasonable or which is contrary to the
Loan Documents or to applicable law unless indemnified to its satisfaction by
Lenders or Borrower. Upon receipt by Administrative Agent from Borrower of any
communication calling for action on the part of Lenders or upon notice from any
Lender to Administrative Agent of any Default or Event of Default,
Administrative Agent shall promptly notify each Lender thereof.
Section 7.2
Agent's Reliance. No Agent or any of their
respective directors, officers, agents, attorneys, or employees shall be liable
for any action taken or omitted to be taken by any of them under or in
connection with the Loan Documents, including their negligence of any kind,
except that each shall be liable for its own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, each Agent:
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(a)
may treat the payee of any Note as the holder thereof until
Administrative Agent receives written notice of the assignment
or transfer thereof in accordance with this Agreement, signed
by such payee and in form satisfactory to Administrative
Agent;
(b)
may consult with legal counsel (including counsel for
Borrower), independent public accountants and other experts
selected by such Agent and shall not be liable for any action
taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts;
(c)
makes no warranty or representation to any Lender or to any
other Agent and shall not be responsible to any Lender or
Agent for any statements, warranties or representations made
in or in connection with the Loan Documents by any other
Person;
(d)
shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or
conditions of the Loan Documents on the part of any Designated
Entity or to inspect the property (including the books and
records) of any Designated Entity;
(e)
shall not be responsible to any Lender or to any other Agent
for the due execution (other than its own due execution and
delivery), legality, validity, enforceability, genuineness,
existence, sufficiency or value of any Loan Document, the
Credit Facility Agreement or any instrument or document
furnished in connection herewith, or any collateral;
(f)
may rely upon the representations and warranties of any
Designated Entity and the Lenders in exercising its powers
hereunder;
(g)
shall not be responsible for the satisfaction of any condition
specified in Article 3, except receipt by an Agent of items
required to be delivered to such Agent; and
(h)
shall incur no liability under or in respect of the Loan
Documents by acting upon any notice, consent, certificate or
other instrument or writing (including any telecopy, telegram,
cable or telex) believed by it to be genuine and signed or
sent by the proper Person or Persons.
Section 7.3
Lenders' Credit Decisions. Each Lender acknowledges
that it has, independently and without reliance upon any Agent or any other
Lender, made its own analysis of Designated Entities and the transactions
contemplated hereby and its own independent decision to enter into this
Agreement and the other Loan Documents. Each Lender also
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acknowledges that it will, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents.
Section 7.4
Indemnification. Each Lender agrees to indemnify
each Agent (to the extent not reimbursed by Borrower within ten (10) days after
demand) from and against such Lender's Percentage Share of any and all
liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (including reasonable fees
of attorneys, accountants, experts, and advisors) of any kind or nature
whatsoever (in this Section collectively called "liabilities and costs") which
to any extent (in whole or in part) may be imposed on, incurred by, or asserted
against such Agent growing out of, resulting from or in any other way
associated with any of the Loan Documents and the transactions and events
(including, without limitation, the enforcement thereof) at any time associated
therewith or contemplated therein. THE FOREGOING INDEMNIFICATION SHALL APPLY
WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT
CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY
ANY AGENT, PROVIDED ONLY THAT NO LENDER SHALL BE OBLIGATED UNDER THIS SECTION
TO INDEMNIFY AN AGENT FOR THAT PORTION, IF ANY, OF ANY LIABILITIES AND COSTS
WHICH IS THE SOLE RESULT OF SUCH AGENT'S OWN INDIVIDUAL GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT, AS DETERMINED IN A FINAL JUDGMENT OF A COURT OF COMPETENT
JURISDICTION. Cumulative of the foregoing, each Lender agrees to reimburse
Administrative Agent, each Documentation Agent and Syndication Agent promptly
upon demand for such Lender's Percentage Share of any costs and expenses to be
paid to Administrative Agent, the Documentation Agent or the Syndication Agent
by Borrower under Section 5.1(h) to the extent that Administrative Agent, the
Documentation Agent or the Syndication Agent is not timely reimbursed for such
expenses by Borrower as provided in such section. As used in this Section the
term "Agents" shall refer not only to the Person(s) designated as such in
Section 1.1 but also to each director, officer, agent, attorney, employee and
representative of such Person(s).
Section 7.5
Rights as Lender. In their respective capacity as a
Lender, each Agent shall have the same rights and obligations as any Lender and
may exercise such rights as though it were not an Agent. Each Agent may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with any of Designated Entities or their
Affiliates, all as if it were not an Agent hereunder and without any duty to
account therefor to any other Lender.
Section 7.6
Sharing of Set-Offs and Other Payments. Each Agent
and Lender agrees that if it shall, whether through the exercise of rights
under security documents or rights of banker's lien, setoff, or counterclaim
against any Designated Entity or otherwise, obtain
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payment of a portion of the aggregate Obligations owed to it (other than in
respect of its Swing Line Advances and its Competitive Bid Advances) which,
taking into account all distributions made by Administrative Agent under
Section 2.11, causes such Agent or such Lender to have received more than it
would have received had such payment been received by Administrative Agent and
distributed pursuant to Section 2.11 (or, in the case of Swing Line Advances
paid as provided in Section 2.5(c) or in the case of Competitive Bid Advances
paid as provided in Section 2.22(b)), then it shall be deemed to have
simultaneously purchased and shall be obligated to purchase interests in the
Obligations as necessary to cause Administrative Agent and all Lenders to share
all payments (other than in respect of Swing Line Advances and Competitive Bid
Advances) as provided for in Section 2.11, and such other adjustments shall be
made from time to time as shall be equitable to ensure that all Agents and all
Lenders share all payments of Obligations (other than in respect of its Swing
Line Advances and Competitive Bid Advances) as provided in Section 2.11. If
any Agent or any Lender, whether in connection with setoff of amounts which
might be subject to setoff or otherwise, receives collateral or other
protection for its Obligations or such amounts which might be subject to
setoff, such Agent or Lender agrees, promptly upon demand, to take such action
necessary so that all Agents and all Lenders share in the benefits of such
collateral ratably in proportion to the Obligations owing to each of them.
Nothing herein contained shall in any way affect the right of any Agent or any
Lender to obtain payment (whether by exercise of rights of banker's lien,
set-off or counterclaim or otherwise) of indebtedness other than the
Obligations. Borrower expressly consents to the foregoing arrangements and
agrees that any holder of any such interest or other participation in the
Obligations, whether or not acquired pursuant to the foregoing arrangements,
may to the fullest extent permitted by law exercise any and all rights of
banker's lien, set-off, or counterclaim as fully as if such holder were a
holder of the Obligations in the amount of such interest or other
participation. If all or any part of any funds transferred pursuant to this
Section is thereafter recovered from the seller under this Section which
received the same, the purchase provided for in this Section shall be deemed to
have been rescinded to the extent of such recovery, together with interest, if
any, if interest is required pursuant to court order to be paid on account of
the possession of such funds prior to such recovery.
Section 7.7
Investments. Whenever Administrative Agent in good
faith determines that it is uncertain about how to distribute to Lenders any
funds which it has received, or whenever Administrative Agent in good faith
determines that there is any dispute among Lenders about how such funds should
be distributed, Administrative Agent may choose to defer distribution of the
funds which are the subject of such uncertainty or dispute. If Administrative
Agent in good faith believes that the uncertainty or dispute will not be
promptly resolved, or if Administrative Agent is otherwise required to invest
funds pending distribution to Lenders, Administrative Agent may invest such
funds pending distribution (at the risk of the subject Borrower); all interest
on any such investment shall be distributed upon the distribution of such
investment and in the same proportion and to the same Persons as such
investment. All moneys received by Administrative Agent for distribution to
Lenders (other than to the
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Person who is Administrative Agent in its separate capacity as a Lender) shall
be held by Administrative Agent pending such distribution solely as
Administrative Agent for such Lenders, and Administrative Agent shall have no
equitable title to any portion thereof.
Section 7.8
Benefit of Article 7. The provisions of this Article
(other than the following Section 7.9) are intended solely for the benefit of
Agent and Lenders, and no Designated Entity shall be entitled to rely on any
such provision or assert any such provision in a claim or defense against Agent
or any Lender. Agent and Lenders may waive or amend such provisions as they
desire without any notice to or consent of any Designated Entity.
Section 7.9
Resignation and Removal. Any Agent may resign at any
time by giving written notice thereof to Lenders and Borrower. Each such
notice shall set forth the date of such resignation. Majority Lenders or
Borrower, with the consent (which shall not be unreasonably withheld) of
Majority Lenders (other than Agent to be removed) shall be entitled to remove
any Agent. Upon any such resignation or removal, Borrower may, with the
written concurrence (which shall not be unreasonably withheld) of Majority
Lenders (exclusive of any such resigned or removed Agent), designate a
successor Agent. If, within fifteen (15) days after the date of such
resignation or removal, Borrower makes no such designation or such written
concurrence is not given, Majority Lenders (exclusive of any such resigned or
removed Agent) shall, with the consent of Borrower (which consent shall not be
unreasonably withheld or delayed), have the right to appoint a successor Agent.
A successor must be appointed for any retiring Managing Agent, and such
Managing Agent's resignation shall become effective when such successor accepts
such appointment. Upon the acceptance of any appointment as a Managing Agent
hereunder by a successor Managing Agent and the satisfaction of all obligations
on the part of such retiring or removed Managing Agent necessary to facilitate
succession, the retiring or removed Managing Agent, as the case may be, shall
be discharged from its duties and obligations under this Agreement and the
other Loan Documents. After any Agent's resignation or removal hereunder, the
provisions of this Article 7 shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under the Loan
Documents. Any out-going Agent shall promptly execute all assignments and
other documents necessary to effectuate the transfer of the agency in
connection with this Agreement and shall promptly deliver all original
documents and any collateral in its possession to the successor Agents.
ARTICLE 8
MISCELLANEOUS
Section 8.1
Waivers and Amendments. No failure or delay (whether
by course of conduct or otherwise) by any Agent or any Lender in exercising any
right, power or remedy which any Agent or Lender may have under any of the Loan
Documents shall operate as a waiver thereof or of any other right, power or
remedy, nor shall any single or partial exercise
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by any Agent or Lender of any such right, power or remedy preclude any other or
further exercise thereof or of any other right, power or remedy. No waiver of
any provision of any Loan Document and no consent to any departure therefrom
shall ever be effective unless it is in writing and signed as provided below in
this Section, and then such waiver or consent shall be effective only in the
specific instances and for the purposes for which given and to the extent
specified in such writing. No notice to or demand on any Designated Entity
shall in any case of itself entitle any Designated Entity to any other or
further notice or demand in similar or other circumstances. This Agreement and
the other Loan Documents set forth the entire understanding between the parties
hereto with respect to the transactions contemplated herein and therein and
supersede all prior discussions and understandings with respect to the subject
matter hereof and thereof, and no waiver, consent, release, modification or
amendment of or supplement to this Agreement or the other Loan Documents shall
be valid or effective against any party hereto unless the same is in writing
and signed by (a) if such party is a Designated Entity, by such Designated
Entity, (b) if such party is an Agent, by such Agent and (c) if such party is a
Lender, by such Lender or by Administrative Agent on behalf of Lenders with the
written consent of Required Lenders (or without further consent than that
already provided herein in the circumstances provided in Section 8.7).
Notwithstanding the foregoing or anything to the contrary herein or in any
other Loan Document, no Agent shall, without the prior consent of each Lender,
execute and deliver on behalf of any Lender any waiver or amendment which
would:
(i)
increase the Commitment of such Lender or subject such Lender
to any additional obligations;
(ii)
reduce or forgive any fees hereunder, or the principal of, or
interest on, such Lender's Notes or LC Obligations;
(iii)
postpone any date fixed for any payment of any fees hereunder,
or principal of, or interest on, such Lender's Notes or LC
Obligations;
(iv)
amend the definitions herein of "Required Lenders" or
"Majority Lenders" or otherwise change the aggregate amount of
Percentage Shares which is required for Administrative Agent,
any other Agent, Lenders or any of them to take any particular
action under the Loan Documents;
(v)
release collateral (except as expressly contemplated by this
Agreement) or any Borrower from its obligation to pay such
Lender's Notes or LC Obligations or any Restricted Subsidiary
from its Guaranty (except upon the Restricted Subsidiary
becoming an Unrestricted Subsidiary as specified in this
Agreement);
(vi)
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amend this Section 8.1;
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(vii)
extend the Loan Commitment Period;
(ix)
amend, modify or waive any provision applicable to the
indemnification of any Lender;
(x)
consent to the assignment or transfer by any Designated Entity
of any of its rights or obligations under this Agreement or
the other Loan Documents; or
(xi)
amend, modify or waive the rights and obligations of the
Issuing Bank or the Agents; provided, that no obligation to
any Designated Entity of any Lender or Issuing Bank or any
Agent may be amended, modified or waived without the written
approval of Borrower, which approval shall not be unreasonably
withheld.
Notwithstanding the foregoing or anything to the contrary herein or in
any other Loan Document, no provision of Article 7 may be amended in any way
which impacts or affects any Agent in its capacity as an Agent (as opposed to
its capacity as a Lender) without the prior written consent of such Agent.
Except as provided in the preceding three sentences or as expressly provided in
any Loan Document, the Required Lenders may waive, modify, amend or supplement
this Agreement and each of the other Loan Documents.
Section 8.2
Survival of Agreements; Cumulative Nature. Each
Designated Entity's various representations, warranties, covenants, indemnities
and agreements in the Loan Documents shall survive the execution and delivery
of this Agreement and the other Loan Documents and the performance hereof and
thereof, including the making or granting of the Loans, the issuance of the
Letters of Credit and the delivery of the Notes, and the other Loan Documents,
and shall further survive until all of the Obligations are paid in full to
Agents and Lenders, all Letters of Credit have expired or been canceled and all
of Agents' and Lenders' obligations to Borrower are terminated, provided that,
notwithstanding the foregoing, certain Obligations of certain Designated
Entities under their respective Guaranties shall survive or be reinstated as
provided in such Guaranties. The representations, warranties, indemnities, and
covenants made by any Designated Entity in any Loan Documents, and the rights,
powers, and privileges granted to Agents and Lenders in the Loan Documents, are
cumulative.
Section 8.3
Notices. All notices, requests, consents, demands
and other communications required or permitted under any Loan Document shall be
in writing, unless otherwise specifically provided in such Loan Document
(provided that Administrative Agent may give telephonic notices to the other
Agents and Lenders), and shall be deemed sufficiently given or furnished if
delivered by personal delivery, by telecopy (with telephonic confirmation of
transmission), by delivery service with proof of delivery, or by registered or
certified United States mail, postage prepaid, to Borrower at the address of
Borrower specified on the signature pages hereto and to each Agent and each
Lender at their addresses specified on the
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signature pages hereto (unless changed by similar notice in writing given by
the particular Person whose address is to be changed). Any such notice or
communication shall be deemed to have been given:
(a)
in the case of personal delivery or delivery service, as of
the date of first attempted delivery during normal business
hours at the address provided herein;
(b)
in the case of telecopy, upon receipt; or
(c)
in the case of registered or certified United States mail,
three (3) days after deposit in the mail, postage prepaid;
provided, however, that no Request for Advance or Rate
Election shall become effective until actually received by
Administrative Agent and no request for the issuance of a
Letter of Credit or Letter of Credit Application shall become
effective until actually received by the Issuing Bank.
Section 8.4
Parties in Interest. All grants, covenants and
agreements contained in the Loan Documents shall bind and inure to the benefit
of the parties thereto and their respective successors and assigns; provided,
however, that no Designated Entity may assign or transfer any of its rights or
delegate any of its duties or obligations under any Loan Document without the
prior written consent of all Lenders.
Section 8.5
Governing Law. THE LOAN DOCUMENTS SHALL BE DEEMED
CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS OF THE STATE OF TEXAS AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. CHAPTER 15 OF TEXAS REVISED CIVIL STATUTES
ANNOTATED ARTICLE 5069 (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS
AND REVOLVING TRI-PARTY ACCOUNTS) DOES NOT APPLY TO THIS AGREEMENT OR TO THE
NOTES.
Section 8.6
Limitation on Interest. It is the intention of the
parties hereto to conform strictly to applicable usury laws and, anything
herein or any other Loan Document to the contrary notwithstanding, the
obligations of Designated Entities to a Lender or an Agent under this Agreement
and the Loan Documents shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt thereof would be
contrary to provisions of law applicable to such Lender or Agent limiting rates
of interest which may be charged or collected by such Lender or Agent.
Accordingly, if the transactions contemplated hereby would be usurious under
laws applicable to a Lender or Agent (including the federal and state laws of
the United States of America or of any other jurisdiction whose laws may be
mandatorily applicable to such Lender or Agent notwithstanding anything to the
contrary in
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this Agreement or any other Loan Document) then, in that event, notwithstanding
anything to the contrary in this Agreement or any other Loan Document, it is
agreed as follows:
(a)
the provisions of this Section shall govern and control;
(b)
the aggregate of all consideration which constitutes interest
under applicable law that is contracted for, taken, reserved,
charged or received under this Agreement, or under any of the
aforesaid agreements or otherwise in connection with this
Agreement or any other Loan Document by such Lender or Agent
shall under no circumstances exceed the maximum amount of
interest allowed by applicable law (such maximum lawful
interest rate, if any, with respect to each Lender and each
Agent herein called the "Maximum Lawful Rate"), and any excess
shall be canceled automatically and if theretofore paid shall
be credited to the relevant Designated Entity by such Lender
or Agent (or, if such consideration shall have been paid in
full, such excess refunded to the relevant Designated Entity);
(c)
all sums paid, or agreed to be paid, to such Lender or Agent
for the use, forbearance and detention of the indebtedness of
the relevant Designated Entity to such Lender or Agent
hereunder or under any other Loan Document shall, to the
extent permitted by laws applicable to such Lender or Agent,
as the case may be, be amortized, prorated, allocated and
spread throughout the full term of such indebtedness until
payment in full so that the actual rate of interest is uniform
throughout the full term thereof;
(d)
if at any time the interest provided pursuant to any provision
of this Agreement or any other Loan Document, together with
any other fees payable pursuant to this Agreement or any other
Loan Document and deemed interest under laws applicable to
such Lender or Agent, exceeds the amount which would have
accrued at the Maximum Lawful Rate, the amount of interest and
any such fees to accrue to such Lender or Agent pursuant to
this Agreement or any other Loan Document shall be limited,
notwithstanding anything to the contrary in this Agreement or
any other Loan Document, to that amount which would have
accrued at the Maximum Lawful Rate, but any subsequent
reductions, as applicable, shall not reduce the interest to
accrue to such Lender or Agent pursuant to this Agreement or
any other Loan Document below the Maximum Lawful Rate until
the total amount of interest accrued pursuant to this
Agreement or such other Loan Document, as the case may be, and
such fees deemed to be interest equals the amount of interest
which would have accrued to such Lender or Agent if a varying
rate of interest per annum equal to the interest provided
pursuant to Section 2.3 or any other relevant Section hereof
(other than this Section) and the Notes, as applicable, had at
all times been in
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effect, plus the amount of fees which would have been received
but for the effect of this Section; and
(e)
if the total amount of interest paid by or accrued with
respect to the Obligations of Borrower, together with any
other fees payable pursuant to this Agreement and the other
Loan Documents and deemed interest under laws applicable to
such Lender or Agent pursuant to this Agreement or any other
Loan Document under the foregoing provisions of this Section
is less than the total amount of interest which would have
accrued if a varying rate per annum equal to the interest
provided pursuant to Section 2.3 or any other relevant section
hereof (other than this Section), as applicable, had at all
times been in effect and all fees provided for in this
Agreement and the other Loan Documents had been paid, then
Borrower severally agrees to pay to such Lender or Agent an
amount equal to the difference between, (i) the lesser of, (x)
the amount of interest and fees which would have accrued if
the Maximum Lawful Rate had at all times been in effect, and
(y) the amount of interest and fees which would have accrued
if a varying rate per annum equal to the interest provided
pursuant to Section 2.3 or such other relevant section of this
Agreement (other than this Section) and the Notes, as
applicable, had at all times been in effect and all fees had
been paid, and (ii) the amount of interest and fees accrued in
accordance with the other provisions of this Agreement and
other Loan Documents.
For purposes of Chapter 1D of Article 5069 of the Texas Credit Title,
Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article
5069-1.04, Vernon's Texas Civil Statutes, as amended), to the extent, if any,
applicable to any Lender or Agent, Borrower and each other Designated Entity
agrees that the Maximum Lawful Rate shall be the "applicable interest rate
ceiling" as defined in said Chapter, provided that such Lender or Agent, as
applicable, may also rely, to the extent permitted by applicable laws of the
State of Texas and the United States of America, on alternative maximum rates
of interest under other laws applicable to such Lender or Agent from time to
time if greater.
Section 8.7
Termination; Limited Survival. In its sole and
absolute discretion, Borrower may, at any time that no Obligations or other
amounts are owing and no Letters of Credit are outstanding, elect to terminate
this Agreement in a written notice delivered to Administrative Agent. Upon
receipt by Administrative Agent of such a notice, if no Obligations or other
amounts are then owing and no Letters of Credit are outstanding, this Agreement
and all other Loan Documents shall thereupon be terminated and the parties
thereto released from all prospective obligations hereunder or thereunder.
Notwithstanding the foregoing or anything herein to the contrary, any waivers
or admissions made by any Designated Entity in any Loan Document, any
Obligations under Sections 2.16 through 2.20, any obligations which any
Designated Entity may have to indemnify or compensate any Agent, any Issuing
Bank, or any Lender in connection with matters arising upon or prior to the
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termination of this Agreement and any obligations which any Lender may have to
indemnify or compensate any Agent or Issuing Bank in connection with matters
arising upon or prior to the termination of this Agreement shall survive any
termination of this Agreement or any other Loan Document and the release of
Designated Entities. At the request and expense of Borrower, Managing Agents
shall prepare and execute all necessary instruments to reflect and effect such
termination of the Loan Documents including, without limitation, the Security
Instruments. Managing Agents are hereby authorized, jointly and severally, to
execute all such instruments on behalf of all Lenders, without the joinder of
or further action or consent by any Lender.
Section 8.8
Assignments; Participations.
(a)
Each Lender shall have the right to sell, assign or transfer
all or any part of such Lender's Notes, Loans, Commitments and
LC Obligations hereunder to one or more Affiliates, Lenders,
financial institutions, pension plans, investment funds, or
similar Persons or to a Federal Reserve Bank; provided, that
in connection with each sale, assignment or transfer (other
than to an Affiliate, a Lender or a Federal Reserve Bank), the
applicable Lender will consider the opinion and recommendation
of Borrower, which opinion and recommendation shall in no way
be binding upon such Lender, and each such sale, assignment,
or transfer (other than to an Affiliate, a Lender or a Federal
Reserve Bank) shall be with the consent of Borrower (unless an
Event of Default has occurred and is continuing), which
consent will not be unreasonably withheld, and with the
consent of Administrative Agent, which consent will not be
unreasonably withheld, and the assignee, transferee or
recipient shall have, to the extent of such sale, assignment,
or transfer, the same rights, benefits and obligations as it
would if it were such Lender and a holder of such Notes,
Commitments and LC Obligations, including, without limitation,
the right to vote on decisions requiring consent or approval
of all Lenders, Majority Lenders or Required Lenders and the
obligation to fund its Loans; provided further, that (1) each
Lender in making each such sale, assignment, or transfer must
sell, assign or transfer a pro rata portion of its Commitments
and each Loan (other than a Swing Line Advance or a
Competitive Bid Advance) and LC Obligation made or held by
such Lender, (2) each such sale, assignment, or transfer
(other than to an Affiliate, a Lender or a Federal Reserve
Bank) shall be in an aggregate principal amount not less than
$10,000,000, (3) each remaining Lender shall at all times
maintain Commitments then outstanding in an aggregate
principal amount at least equal to $10,000,000; (4) no Lender
may offer to sell its Notes, Commitments, LC Obligations or
Loans or interests therein in violation of any securities
laws; and (5) no such assignments (other than to a Federal
Reserve Bank) shall become effective until the assigning
Lender delivers to Administrative Agent and Borrower copies of
all written assignments and other
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documents evidencing any such assignment and an Agreement to
be Bound in the form of Exhibit L, providing for the
assignee's ratification and agreement to be bound by the terms
of this Agreement and the other Loan Documents. An assignment
fee in the amount of $3,500 for each such assignment (other
than to an Affiliate, a Lender or a Federal Reserve Bank) will
be payable to Administrative Agent by assignor or assignee.
Within five (5) Business Days after its receipt of copies of
any assignment and the other documents relating thereto and
the following described Notes, Borrower shall execute and
deliver to Administrative Agent (for delivery to the relevant
assignee) new Notes evidencing such assignee's assigned Loans
and Commitments and if the assignor Lender has retained a
portion of its Loans, replacement Notes in the principal
amount of the Loans and Commitments retained by the assignor
Lender (except as provided in the last sentence of this
paragraph (a) such Notes to be in exchange for, but not in
payment of, the Notes held by such Lender). On and after the
effective date of an assignment hereunder, the assignee shall
for all purposes be a Lender, party to this Agreement and any
other Loan Document executed by the Lenders and shall have all
the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party
thereto, and no further consent or action by Borrower, Lenders
or any Agent shall be required to release the transferor
Lender, with respect to the Commitments, the LC Obligations
and the Loans assigned to such assignee and the transferor
Lender shall henceforth be so released.
(b)
Each Lender shall have the right to grant participations in
all or any part of such Lender's Notes, Commitments, LC
Obligations, and Loans hereunder to one or more pension plans,
investment funds, financial institutions or other Persons;
provided, that:
(1)
each Lender granting a participation shall retain the
right to vote hereunder, and no participant shall be
entitled to vote hereunder on decisions requiring
consent or approval of Lenders, Majority Lenders or
Required Lenders (except as set forth in (3) below);
(2)
in the event any Lender grants a participation
hereunder, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto
for the performance of such obligations, such Lender
shall remain the holder of any such Notes for all
purposes under the Loan Documents, and each Agent,
each Lender and Borrower shall be entitled to deal
with the Lender granting a participation in the same
manner as if no participation had been granted; and
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(3)
no participant shall ever have any right by reason of
its participation to exercise any of the rights of
Lenders hereunder, except that any Lender may agree
with any participant that such Lender will not,
without the consent of such participant (which
consent may not be unreasonably withheld), consent to
any amendment or waiver described in Section 8.1
requiring approval of 100% of the Lenders.
(c)
It is understood and agreed that any Lender may provide to
assignees and participants and prospective assignees and
participants financial information and reports and data
concerning Borrower's properties and operations which was
provided to such Lender pursuant to this Agreement, subject to
Section 8.9.
(d)
Upon the reasonable request of either of the Managing Agents
or Borrower, each Lender will identify those to whom it has
assigned or participated any part of its Notes, LC Obligations
or Loans, and provide the amounts so assigned or participated.
Section 8.9
Confidentiality. Each Agent and each Lender agrees
that it (a) will maintain the confidentiality of all non-public information
from any Designated Entity or any Subsidiary of Borrower obtained pursuant to
the terms of this Agreement or any other Loan Document in accordance with safe
and sound banking practices, and (b) will not use such confidential information
for any purpose other than in connection with this Agreement; provided,
however, that this restriction shall not apply to information which (w) has at
the particular time in question entered the public domain, or been
independently developed without the use or incorporation of any non-public
information provided to such Agent or Lender by any Designated Entity or any
Subsidiary of Borrower by such Agent or such Lender other than through
disclosure by such Agent or such Lender in violation of this Section, (x) is
required to be disclosed by law or by any order, rule, regulation or legal
process (whether valid or invalid) of any court or Governmental Authority, (y)
is furnished to any other Lender or to any purchaser or prospective purchaser
of participations, assignments or other interests in any Loan, Note, LC
Obligation or Commitment that has executed and delivered to Borrower an
agreement containing terms substantially similar to this Section and reasonably
acceptable to Borrower, to keep such information confidential or (z) is
disclosed to such Lender's or Agent's examiners, Affiliates, outside auditors,
counsel and other professional advisors who have a need for such information in
connection with this Agreement and who are advised of the confidential nature
of such information. As used in this Section, the terms "Agent" and "Lender"
shall refer not only to the Persons designated as such in Section 1.1, but also
to each director, Affiliate, officer, agent, attorney, employee and
representative of such Person. Notwithstanding any other provisions of this
Agreement, the terms of this Section shall survive the termination of this
Agreement for a period of three (3) years.
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Section 8.10
Severability. If any term or provision of any Loan
Document shall be determined to be illegal or unenforceable in any
jurisdiction, such term or provision shall, as to such jurisdiction, be illegal
or unenforceable, without affecting the remaining provisions in that
jurisdiction or the legality or enforceability of such terms or conditions in
any other jurisdiction.
Section 8.11
Counterparts. This Agreement may be separately
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to
constitute one and the same Agreement.
Section 8.12
WAIVER OF JURY TRIAL, PUNITIVE DAMAGES. EACH OF THE
BORROWER, AGENTS AND LENDERS HEREBY (I) IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF,
UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED
THEREBY OR ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY; (II) IRREVOCABLY
WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES; (III) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (IV) ACKNOWLEDGES THAT
IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
Section 8.13
Several Obligations. The respective obligations of
Lenders hereunder are several and not joint and no Lender shall be the partner
or agent of any other (except to the extent to which an Agent is authorized to
act as such). The failure of any Lender to perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder. This Agreement is not intended to, and shall not be construed so as
to, confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
Section 8.14
Nonliability of Lenders. The relationship between
Borrower on the one hand and Lenders and Agents on the other hand shall be
solely that of borrower and lender. None of the Agents nor any Lender shall
have any fiduciary responsibilities to Borrower or any of its respective
Subsidiaries. None of the Agents nor any Lender undertakes
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any responsibility to Borrower or any of their respective Subsidiaries to
review or inform Borrower of any matter in connection with any phase of
Borrower's or such Subsidiary's business or operations.
Section 8.15
Setoff. In addition to, and without any limitation
of, any rights of the Lenders under applicable law, if Borrower becomes
insolvent, however evidenced, or any Event of Default or Default occurs and the
maturity of the Obligations has been accelerated, any indebtedness from any
Lender to Borrower (including all account balances, whether provisional or
final and whether or not collected or available) may be offset and applied
toward the payment of the Obligations owing to such Lender, whether or not the
Obligations, or any part thereof, shall then be due and payable.
Section 8.16
Release of Liens. Upon the date of execution and
delivery of a Guaranty of the type referred to in clause (i) of the definition
of "Guaranty" by a Restricted Subsidiary the capital stock of which has been
pledged (each such date, a "Stock Pledge Release Date"), the Collateral Agent
shall release and discharge, at the cost or expense of Borrower, the Pledge
Agreement covering such Subsidiary's capital stock, all of Lenders' and
Collateral Agent's rights and interests in such Pledge Agreement and all liens,
security interests, pledges and encumbrances created or existing under or
pursuant to such Pledge Agreement.
SECTION 8.17
FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE
LENDERS OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF TEXAS OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF TEXAS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
COLLATERAL AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND
THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
TEXAS. FOR THE PURPOSE OF ANY ACTION OR PROCEEDING INSTITUTED IN THE FEDERAL
OR STATE COURTS OF TEXAS, HOLDINGS HEREBY IRREVOCABLY DESIGNATES BORROWER WITH
OFFICES
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ON THE DATE HEREOF AT 303 WEST WALL STREET, SUITE 101, MIDLAND, TEXAS 79701 TO
RECEIVE FOR AND ON BEHALF OF HOLDINGS, SERVICES OF PROCESS IN TEXAS. BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
TO THE EXTENT THAT BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, BORROWER HEREBY IRREVOCABLY
WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
Section 8.18
Assumption of Prior Indebtedness. Borrower hereby
assumes effective on the Effective Date, and Pioneer USA has assigned and
hereby assigns to Borrower, all of the Prior Indebtedness under the Existing
Credit Agreement (including any and all outstanding LC Obligations).
Section 8.19
Renewal, Extension or Rearrangement. All provisions
of this Agreement and any other Loan Document relating to the Notes or the
other Obligations (including LC Obligations) shall apply with equal force and
effect to each and all promissory notes or other agreements or instruments
hereafter executed which in whole or in part represent a renewal, extension,
increase or rearrangement of any part of the original Notes or Obligations.
Section 8.20
Entire Agreement. THIS WRITTEN AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
BORROWER:
PIONEER NATURAL RESOURCES COMPANY
By:
-------------------------------------Name:
M. Garrett Smith
Title: Executive Vice President and
Chief Financial Officer
Address:
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
Attention:
M. Garrett Smith
Telephone:
Telecopy:
(972) 402-7013
(972) 402-7028
with a copy to:
303 West Wall, Suite 101
P.O. Box 3178
Midland, Texas 79701
Attention:
Curt Kamradt
Telephone:
Telecopy:
(915) 571-3171
(915) 571-5696
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 1
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LENDERS:
NATIONSBANK OF TEXAS, N.A., individually
and as Administrative Agent and as
Collateral Agent
By:
-------------------------------------Name:
Frank K. Stowers
Title:
Vice President
Address:
303 W. Wall
P. O. Box 1599
Midland, Texas 79701
Attention:
Mr. Frank K. Stowers
Telephone:
Telecopy:
(915) 685-2179
(915) 685-2009
with further notice to:
901 Main Street, 64th Floor
Dallas, Texas 75202
Attention:
Mr. E. Murphy Markham IV
Telephone:
Telecopy:
(214) 508-1251
(214) 508-1285
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 2
92
CIBC INC., individually and as Documentation
Agent
By:
-----------------------------------------Name:
Title:
Address:
Suite 1200
Atlanta, GA
2727 Paces Ferry Road
30339
Attention:
---------------------------Telephone:
Telecopy:
(770) 319-4824
(770) 319-4950
with further notice to:
2 Houston Center
909 Fannin Street, Suite 1200
Houston, Texas 77010
Attention:
Mr. Paul Jordan
Telephone:
Telecopy:
(713) 655-5245
(713) 650-3727
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 3
93
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
individually and as Documentation Agent
By:
-------------------------------------Name:
Title:
Address:
60 Wall Street, 22nd Floor
New York, New York 10260
Attention:
Mr. Philip McNeal
Telephone:
Telecopy:
(212) 648-7181
(212) 648-5023
with further notice to:
Sandra H. Doherty
500 Christiana Stanton Road
Newark, DE 19713-2107
Telephone:
Telecopy:
(302) 634-8122
(302) 634-1092
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 4
94
THE CHASE MANHATTAN BANK, individually
and as Syndication Agent
By:
-----------------------------------Name:
Title:
Address:
P. O. Box 2558
Houston, Texas
712 Main Street, 5th Floor
77252-8086
Attention:
Mr. Robert Mertensotto
Telephone:
Telecopy:
(713) 216-4147
(713) 216-4117
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 5
95
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, individually and as
Co-Agent
By:
------------------------------------Name:
Title:
Address:
3 Allen Center
333 Clay Street, Suite 4550
Houston, TX 77002
Attention:
Mr. Ron McKaig
Telephone:
Telecopy:
(713) 651-4881
(713) 651-4841
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 6
96
THE BANK OF NEW YORK, individually and
as Co-Agent
By:
------------------------------------Name:
Title:
Address:
One Wall Street, 19th Floor
New York, New York 10286
Attention:
Mr. Ray Palmer
Telephone:
Telecopy:
(212) 635-7834
(212) 635-7923
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 7
97
THE BANK OF NOVA SCOTIA, individually
and as Co-Agent
By:
-----------------------------------Name:
Title:
Address:
600 Peachtree Street N.E.
Suite 2700
Atlanta, Georgia 30308
Attention:
Mr. Cleve Bushey
Telephone:
Telecopy:
(404) 877-1500
(404) 888-8998
with further notice to:
Mr. Jamie Conn
1100 Louisiana, Suite 3000
Houston, TX 77002
Telephone:
Telecopy:
(713) 759-3426
(713) 752-2425
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 8
98
ROYAL BANK OF CANADA, individually and as
Co-Agent
By:
---------------------------------------Name:
Title:
Address:
Financial Square
32 Old Slip St.
New York, New York
10005-3531
Attention:
Loan Administrator
Telephone:
Telecopy:
(212) 428-6321
(212) 428-2372
W/copy to:
Address:
12450 Greens Point Drive
Suite 1450
Houston, Texas 77060
Attention:
Ms. Linda Stephens
Telephone:
Telecopy:
(281) 874-5669
(281) 874-0081
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 9
99
UNION BANK OF CALIFORNIA, N.A.,
individually and as Co-Agent
By:
----------------------------------Name:
Title:
Address:
500 North Akard, Suite 4200
Dallas, Texas 75201
Attention:
Telephone:
Telecopy:
Mr. Randy Osterberg
(214) 922-4200
(214) 922-4209
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 10
100
WELLS FARGO BANK, N.A.,
individually and as Co-Agent
By:
---------------------------------Name:
Title:
Address:
1445 Ross Avenue, Suite 400
LB 224
Dallas, Texas 75202
Attention:
Mr. Lester Keliher
Telephone:
Telecopy:
(214) 777-4025
(214) 777-4044
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 11
101
THE FUJI BANK, LIMITED-HOUSTON AGENCY,
individually and as Co-Agent
By:
----------------------------------Name:
Title:
Address:
1221 McKinney Street
Suite 4100
Houston, Texas 77002
Attention:
Mr. Tommy Watts
Telephone:
Telecopy:
(713) 650-7868
(713) 759-0717
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 12
102
DEN NORSKE BANK ASA, individually and
as Lead Manager
By:
-----------------------------------Name:
Title:
By:
-----------------------------------Name:
Title:
Address:
333 Clay Street, Suite 4890
Houston, Texas 77002
Attention:
Mr. J. Morten Kreutz
Telephone:
Telecopy:
(713) 844-9255
(713) 757-1167
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 13
103
BANQUE PARIBAS, individually and as
Lead Manager
By:
-----------------------------------Name:
Title:
By:
-----------------------------------Name:
Title:
Address:
1200 Smith Street
Two Allen Center
Suite 3100
Houston, Texas 77002
Attention:
Mr. David Dodd
Telephone:
Telecopy:
(713) 659-4811
(713) 659-6915
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 14
104
FIRST UNION NATIONAL BANK, individually
and as Lead Manager
By:
-------------------------------------Name:
Title:
Address:
1001 Fannin Street
Suite 2255
Houston, Texas 77002
Attention:
Mr. Paul N. Riddle
Telephone:
Telecopy:
(713) 650-3716
(713) 650-6354
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 15
105
BANKERS TRUST COMPANY, as a Lender
By:
--------------------------------------Name:
Title:
Address:
130 Liberty Plaza, 30th Floor
M.S. 2344
New York, New York 10006
Attention:
Marcus M. Tarkington
Telephone:
Telecopy:
(212) 250-7684
(212) 250-8693
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 16
106
CREDIT AGRICOLE INDOSUEZ, as a Lender
By:
------------------------------------Name:
Title:
By:
------------------------------------Name:
Title:
Address:
55 East Monroe
Chicago, Illinois 60603
Attention:
Ms. Rosemary Brown
Telephone:
Telecopy:
(312) 917-7420
(312) 372-4421
with further notice to:
Mr. Brian Knezeak
600 Travis, Suite 2340
Houston, Texas 77002
Telephone:
Telecopy:
(713) 223-7001
(713) 223-7029
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 17
107
NATEXIS BANQUE, as a Lender BFCE
By:
----------------------------------Name:
Title:
By:
----------------------------------Name:
Title:
Address:
333 Clay Street, Suite 4340
Houston, Texas 77002
Attention:
Mr. Eric Ditges
Telephone:
Telecopy:
(713) 759-9401
(713) 759-9908
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 18
108
TORONTO DOMINION (TEXAS), INC., as
a Lender
By:
---------------------------------Name:
Title:
Address:
909 Fannin Street, Suite 1700
Houston, Texas 77010
Attention:
Ms. Darlene Riedel
Telephone:
Telecopy:
(713) 653-8250
(713) 951-9921
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 19
109
THE TOYO TRUST & BANKING CO., LTD.,
as a Lender
By:
------------------------------Name:
Title:
Address:
666 5th Avenue, 33rd Floor
New York, New York 10103
Attention: Ms. Sharon Bonelli
Telephone: (212) 307-3410
Telecopy: (212) 307-3498
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 20
110
WACHOVIA BANK, N.A., as a Lender
By:
----------------------------------Name:
Title:
Address:
191 Peachtree Street
Atlanta, Georgia 30303
Attention:
Ms. Paige Mesaros
Telephone:
Telecopy:
(404) 332-1322
(404) 332-6898
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 21
111
THE DAI-ICHI KANGYO BANK, LTD.,
NEW YORK BRANCH, as a Lender
By:
--------------------------------Name:
Title:
Address:
One World Trade Center
48th Floor
New York, New York 10048
Attention:
Mr. Masayoshi Komaki
Telephone:
Telecopy:
(212) 432-6627
(212) 912-1879
Further notice to:
DKB-Houston LPO
1100 Louisiana, Suite 4940
Houston, Texas 77002
Attention:
Mr. Warren Ross
Telephone:
Telecopy:
(713) 654-5055
(713) 654-1667
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 22
112
THE SANWA BANK, LIMITED, as a Lender
By:
------------------------------------Name:
Title:
Address:
4100W Texas Commerce
Tower
2200 Ross Avenue
Dallas, Texas 75201
Attention:
Mr. Matthew Patrick
Telephone:
Telecopy:
(214) 665-0242
(214) 953-3963
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 23
113
KREDIETBANK N.V., as a Lender
By:
----------------------------------Name:
Title:
Address:
125 West 55th Street
New York, NY 10019
Attention:
Vice President
Robert E. Snauffer
Telephone:
Telecopy:
(212) 541-0700
(212) 956-5580
with a copy to:
Kredietbank N.V., Atlanta
Representative Office
Two Midtown Plaza, Suite 1750
1349 W. Peachtree Street
Atlanta, Georgia 30309
Attention:
Mr. Felip Ferrante
Telephone:
Telecopy:
(404) 876-2556
(404) 876-3212
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 24
114
For purposes of selling, assigning, transferring and conveying its
respective indebtedness, obligations and liabilities under the Existing Credit
Agreement to Borrower, the undersigned has caused this Agreement to be executed
by its officer thereunto duly authorized as of the date and year first above
written.
PIONEER NATURAL RESOURCES USA, INC.
By:
-------------------------------------Name:
M. Garrett Smith
Title:
Executive Vice President and
Chief Financial Officer
[SIGNATURE PAGE TO PRIMARY CREDIT FACILITY]
S - 25
115
Exhibit A-1
[Form of]
Loan Note - Primary Credit Facility
$________________
___________, 199___
FOR VALUE RECEIVED, the undersigned, PIONEER NATURAL RESOURCES
COMPANY, a Delaware corporation, with offices at 303 W. Wall, Suite 101,
Midland, Texas (herein called "Borrower"), hereby promises to pay to the order
of ________________________________ (herein called "Lender"), the principal sum
of _______________________________ and No/100 Dollars ($___________________),
or, if greater or less, the aggregate unpaid principal amount of each Loan made
under this Note by Lender to Borrower pursuant to the terms of the Credit
Agreement (as defined herein), together with interest on the unpaid principal
balance thereof as hereinafter set forth, both principal and interest payable
as herein provided in lawful money of the United States of America at the
principal banking offices of the Administrative Agent under the Credit
Agreement, 901 Main Street, Dallas, Texas 75202, or at such other place as
from time to time may be designated by the holder of this Note, with the
concurrence of Borrower and Administrative Agent. Subject to the terms and
conditions of the Credit Agreement and hereof, Borrower may borrow, repay and
reborrow hereunder.
This Note (a) is issued and delivered under that certain Amended and
Restated Credit Facility Agreement dated as of December 18, 1997 by and among
Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), and is a "Loan Note" as defined therein, and (b) is
subject to the terms and provisions of the Credit Agreement, which contains
provisions for payment and prepayment hereunder and acceleration of the
maturity hereof upon the happening of certain events. Payments on this Note
shall be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto and
for the meanings assigned to terms used and not otherwise defined herein.
Exhibit A-1 - 1
116
Interest accrued on each Loan evidenced by this Note shall be payable,
without duplication: (a) on the Maturity Date; (b) with respect to any Base
Rate Portion of the Loans evidenced by this Note, on the third Business Day of
each Fiscal Quarter occurring after the date of the initial borrowing of a Base
Rate Portion hereunder; (c) with respect to any Eurodollar Portion of the Loans
evidenced by this Note, on the last day of each applicable Interest Period
(and, if such Interest Period shall exceed 90 days, on the 90th day of such
Interest Period and every 90 days thereafter until the end of such Interest
Period); (d) with respect to any Base Rate Portion converted into a Eurodollar
Portion of the Loans evidenced by this Note pursuant to a Rate Election on a
day when interest would not otherwise have been payable pursuant to clause (b),
on the third Business Day of each Fiscal Quarter occurring after the date of
such conversion; and (e) on any portion of the Loans evidenced by this Note,
the Maturity Date of which is accelerated pursuant to Section 6.1 of the Credit
Agreement, on the date to which the Maturity Date of such portion has been
accelerated. Interest accrued on the Loans evidenced by this Note or other
monetary Obligations arising under this Note, the Credit Agreement or any other
Loan Document after the date such amount is due and payable (whether on the
Maturity Date, upon acceleration or otherwise) shall be payable upon demand.
The principal amount of this Note, together with all interest accrued
hereon and unpaid, shall be due and payable in full on the Maturity Date.
The Base Rate Portion of the Loans evidenced by this Note (exclusive
of any past due principal or interest) from time to time outstanding shall bear
interest on each day outstanding at the Base Rate, plus the applicable Base
Rate Margin. Each Eurodollar Portion of the Loans evidenced by this Note
(exclusive of any past due principal or interest) shall bear interest on each
day during the related Interest Period at the applicable Eurodollar Rate, plus
the applicable Eurodollar Margin. All past due principal of the Loans
evidenced by this Note or other Obligations arising under the Credit Agreement
or any other Loan Document (whether payable on the Maturity Date or otherwise)
shall bear interest on each day outstanding after its due date at the
applicable Default Rate in effect on such day.
Notwithstanding the other provisions of this Note or the Credit
Agreement, in no event shall the interest payable hereon, whether before or
after maturity, exceed the Maximum Lawful Rate and this Note is expressly made
subject to the provisions of the Credit Agreement which more fully set out the
limitations on how interest accrues hereon. In the event applicable law
provides for a ceiling under Chapter 1D of Article 5069 of the Texas Credit
Title, Title 79, Vernon's Texas Civil Statutes, as amended
Exhibit A-1 - 2
117
(formerly Article 5069-1.04, Vernon's Texas Civil Statutes, as amended), that
ceiling shall be the "applicable interest rate ceiling" as defined in said
Chapter. The term "applicable law" as used in this Note shall mean the laws of
the State of Texas or the laws of the United States, whichever laws allow the
greater interest as such laws now exist or may be enacted, changed or amended
or come into effect in the future.
If this Note is placed in the hands of an attorney for collection
after a Default, or if all or any part of the indebtedness represented hereby
is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, the
undersigned Borrower and all endorsers, sureties and guarantors of this Note
jointly and severally agree to pay reasonable attorneys' fees and collection
costs to the holder hereof in addition to the principal and interest payable
hereunder.
The undersigned Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the
bringing of any suit against any party and any notice of or defense on account
of any extensions, renewals, partial payments or changes in any manner of or in
this Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
It is contemplated that by reason of prepayment hereon there may be
times when no indebtedness is owing hereunder; notwithstanding such
occurrences, this Note shall remain valid and shall be in full force and effect
as to Loans made pursuant to the Credit Agreement subsequent to each
occurrence.
Except as permitted by Section 8.8 of the Credit Agreement, this Note
may not be assigned by Lender to any other Person.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE UNDERSIGNED BORROWER AND LENDER WITH
RESPECT HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS (WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE SAME ARE
GOVERNED BY APPLICABLE FEDERAL LAW.
PIONEER NATURAL RESOURCES COMPANY
By:
--------------------------------------Name:
M. Garrett Smith
Title:
Executive Vice President and
Chief Financial Officer
Exhibit A-1 - 3
118
Exhibit A-2
[Form of]
Swing Line Note - Primary Credit Facility
$50,000,000
_________, 199___
FOR VALUE RECEIVED, the undersigned, PIONEER NATURAL RESOURCES
COMPANY, a Delaware corporation with offices at 303 W. Wall, Suite 101,
Midland, Texas (herein called "Borrower"), hereby promises to pay to the order
of NATIONSBANK OF TEXAS, N.A. (herein called "Lender"), the principal sum of
FIFTY MILLION AND NO/100 Dollars ($50,000,000), or, if less, the aggregate
unpaid principal amount of the Swing Line Advances made under this Note by
Lender to Borrower pursuant to the terms of the Credit Agreement (as defined
herein), together with interest on the unpaid principal balance thereof as
hereinafter set forth, both principal and interest payable as herein provided
in lawful money of the United States of America at the principal banking
offices of Administrative Agent under the Credit Agreement, 901 Main Street,
Dallas, Texas 75202, or at such other place as from time to time may be
designated by the holder of this Note, with the concurrence of Borrower and
Administrative Agent.
This Note (a) is issued and delivered under that certain Amended and
Restated Credit Facility Agreement dated as of December 18, 1997 by and among
Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), and is a "Swing Line Note" as defined therein, and (b) is
subject to the terms and provisions of the Credit Agreement, which contains
provisions for payment and prepayment hereunder and acceleration of the
maturity hereof upon the happening of certain events. Payments on this Note
shall be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto and
for the meanings assigned to terms used and not otherwise defined herein.
The unpaid principal amount of this Note, together with all interest
accrued hereon and unpaid, shall be due and payable in full as provided in the
Credit Agreement and not later than the Maturity Date. Interest accrued on the
Swing Line Advances evidenced by this Note shall be payable as provided in the
Credit Agreement.
Exhibit A-2 - 1
119
Notwithstanding other provisions of this Note or the Credit Agreement,
in no event shall the interest payable hereon, whether before or after
maturity, exceed the Maximum Lawful Rate and this Note is expressly made
subject to the provisions of the Credit Agreement which more fully set out the
limitations on how interest accrues hereon. In the event applicable law
provides for a ceiling under Chapter 1D of Article 5069 of the Texas Credit
Title, Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article
5069-1.04, Vernon's Texas Civil Statutes, as amended), that ceiling shall be
the "applicable interest rate ceiling" as defined in said Chapter. The term
"applicable law" as used in this Note shall mean the laws of the State of Texas
or the laws of the United States, whichever laws allow the greater interest as
such laws now exist or may be enacted, changed or amended or come into effect
in the future.
If this Note is placed in the hands of an attorney for collection
after a Default, or if all or any part of the indebtedness represented hereby
is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, the
undersigned Borrower and all endorsers, sureties and guarantors of this Note
jointly and severally agree to pay reasonable attorneys' fees and collection
costs to the holder hereof in addition to the principal and interest payable
hereunder.
The undersigned Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the
bringing of any suit against any party and any notice of or defense on account
of any extensions, renewals, partial payments or changes in any manner of or in
this Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
It is contemplated that by reason of prepayment hereon there may be
times when no indebtedness is owing hereunder; notwithstanding such
occurrences, this Note shall remain valid and shall be in full force and effect
as to Loans made pursuant to the Credit Agreement subsequent to each
occurrence.
Except as permitted by Section 8.8 of the Credit Agreement, this Note
may not be assigned by Lender to any other Person.
Exhibit A-2 - 2
120
THIS NOTE AND THE RIGHTS AND DUTIES OF THE UNDERSIGNED BORROWER AND
LENDER WITH RESPECT HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE
SAME ARE GOVERNED BY APPLICABLE FEDERAL LAW.
PIONEER NATURAL RESOURCES COMPANY
By:
--------------------------------------Name:
M. Garrett Smith
Title:
Executive Vice President and
Chief Financial Officer
Exhibit A-2 - 3
121
Exhibit A-3
[Form of]
Competitive Bid Note - Primary Credit Facility
$1,075,000,000
__________, 199___
FOR VALUE RECEIVED, the undersigned, PIONEER NATURAL RESOURCES
COMPANY, a Delaware corporation, with offices at 303 W. Wall, Suite 101,
Midland, Texas (herein called "Borrower"), hereby promises to pay to the order
of __________________________________ (herein called "Lender"), the principal
sum of ONE BILLION SEVENTY-FIVE MILLION AND NO/100 DOLLARS ($1,075,000,000),
or, if less, the aggregate unpaid principal amount of all Competitive Bid
Advances shown on the schedule attached hereto (and any continuation thereof),
if so shown, made by the Lender to Borrower, together with interest on the
unpaid principal balance thereof as hereinafter set forth, both principal and
interest payable as herein provided in lawful money of the United States of
America at the principal banking offices of Administrative Agent under the
Credit Agreement (as defined herein), 901 Main Street, Dallas, Texas 75202, or
at such other place as from time to time may be designated by the holder of
this Note, with the concurrence of Borrower and Administrative Agent.
This Note (a) is issued and delivered under that certain Amended and
Restated Credit Facility Agreement dated as of December 18, 1997 by and among
Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), and is a "Competitive Bid Note" as defined therein, and
(b) is subject to the terms and provisions of the Credit Agreement, which
contains provisions for payment and prepayment hereunder and acceleration of
the maturity hereof upon the happening of certain events. Payments on this
Note shall be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto and
for the meanings assigned to terms used and not otherwise defined herein.
The unpaid principal amount of this Note, together with all interest
accrued hereon and unpaid, shall be due and payable in full as provided in the
Credit Agreement and not later than the Maturity Date.
Exhibit A-3 - 1
122
Interest accrued on the Competitive Bid Advances evidenced by this
Note shall be payable as provided in the Credit Agreement.
Notwithstanding other provisions of this Note or the Credit Agreement,
in no event shall the interest payable hereon, whether before or after
maturity, exceed the Maximum Lawful Rate and this Note is expressly made
subject to the provisions of the Credit Agreement which more fully set out the
limitations on how interest accrues hereon. In the event applicable law
provides for a ceiling under Chapter 1D of Article 5069 of the Texas Credit
Title, Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article
5069-1.04, Vernon's Texas Civil Statutes, as amended), that ceiling shall be
the "applicable interest rate ceiling" as defined in said Chapter. The term
"applicable law" as used in this Note shall mean the laws of the State of Texas
or the laws of the United States, whichever laws allow the greater interest as
such laws now exist or may be enacted, changed or amended or come into effect
in the future.
If this Note is placed in the hands of an attorney for collection
after a Default, or if all or any part of the indebtedness represented hereby
is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, the
undersigned Borrower and all endorsers, sureties and guarantors of this Note
jointly and severally agree to pay reasonable attorneys' fees and collection
costs to the holder hereof in addition to the principal and interest payable
hereunder.
The undersigned Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the
bringing of any suit against any party and any notice of or defense on account
of any extensions, renewals, partial payments or changes in any manner of or in
this Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
It is contemplated that by reason of prepayment hereon there may be
times when no indebtedness is owing hereunder; notwithstanding such
occurrences, this Note shall remain valid and shall be in full force and effect
as to Competitive Bid Advances made pursuant to the Credit Agreement subsequent
to each occurrence.
Exhibit A-3 - 2
123
Except as permitted by Section 8.8 of the Credit Agreement, this Note
may not be assigned by Lender to any other Person.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE UNDERSIGNED BORROWER AND
LENDER WITH RESPECT HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE
SAME ARE GOVERNED BY APPLICABLE FEDERAL LAW.
PIONEER NATURAL RESOURCES COMPANY
By:
--------------------------------------Name:
M. Garrett Smith
Title:
Executive Vice President and
Chief Financial Officer
Exhibit A-3 - 3
124
Exhibit B
[Note: Language in brackets will not be included in every Guaranty to the
extent that, at the time of execution and delivery of the Guaranty, such
execution and delivery would result in adverse tax consequences under Section
956 or substantial stamp tax or similar taxes, are prohibited pursuant to
contractual restrictions or are prohibited as a matter of corporate law.]
[Form of]
GUARANTY
THIS GUARANTY (this "Guaranty"), dated as of _______________, 199___,
made by _________________________ [(A.C.N. _____________)], a ________________
("Guarantor"), in favor of each of the Lender Parties (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Pioneer Natural Resources
Company, a Delaware corporation ("Borrower"), NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, the Co-Agents party thereto, and the Lenders from time to
time parties thereto (together with all amendments, supplements, restatements
and other modifications, if any, thereafter made thereto, the "Primary Credit
Agreement"), the Lenders have extended Commitments (as defined in the Primary
Credit Agreement) to make Loans to Borrower and to issue or participate in
Letters of Credit on behalf of Borrower; and
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co- Agents party thereto, and the Lenders from
time to time parties thereto (together with all amendments, supplements,
restatements and other modifications, if any, thereafter made thereto, the "364
Day Credit Agreement", and together with the Primary Credit Agreement, the
"Credit Agreements"), the Lenders have extended Commitments (as defined in the
364 Day Credit Agreement) to make Loans to Borrower; and
WHEREAS, as a condition precedent to the making of the initial Loans
or issuing of the initial Letters of Credit under
Exhibit B - 1
125
the Credit Agreements, Guarantor is required to execute and deliver this
Guaranty; and
WHEREAS, Guarantor has duly authorized the execution, delivery and
performance of this Guaranty; and
WHEREAS, it is in the best interests of Guarantor to execute this
Guaranty inasmuch as Guarantor will derive substantial direct and indirect
benefits from the Loans made from time to time to Borrower and Letters of
Credit issued on behalf of Borrower pursuant to the Credit Agreements;
NOW THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, and in order to induce the Lenders to make Loans
(including the initial Loans) to Borrower pursuant to the Credit Agreements and
for the Issuing Bank to issue Letters of Credit on behalf of Borrower and for
the Lenders to acquire participations in such Letters of Credit pursuant to the
Primary Credit Agreement, Guarantor agrees, for the benefit of each Lender
Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1.
Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"Administrative Agent" is defined in the first recital.
"Borrower" is defined in the first recital.
"Commitments" means "Commitments" as defined in the Primary Credit
Agreement and "Commitments" as defined in the 364 Day Credit Agreement.
"Credit Agreements" is defined in the second recital.
"Debtor" is defined in Section 2.1(a)(i).
"Guarantor" is defined in the preamble.
"Guaranty" is defined in the preamble.
"Lender Party" means, as the context may require, any Lender, any
Issuing Bank or any Agent and each of its respective successors, transferees
and assigns under the Credit Agreements.
Exhibit B - 2
126
"Lenders" means "Lenders" as defined in the Primary Credit Agreement
and "Lenders" as defined in the 364 Day Credit Agreement.
"Loan Documents" means "Loan Documents" as defined in the Primary
Credit Agreement and "Loan Documents" as defined in the 364 Day Credit
Agreement.
"Notes" means "Notes" as defined in the Primary Credit Agreement and
"Notes" as defined in the 364 Day Credit Agreement.
"Obligations" means "Obligations" as defined in the Primary Credit
Agreement and "Obligations" as defined in the 364 Day Credit Agreement.
"Primary Credit Agreement" is defined in the first recital.
"364 Day Credit Agreement" is defined in the second recital.
SECTION 1.2.
Primary Credit Agreement Definitions. Unless
otherwise defined herein or the context otherwise requires, terms used in this
Guaranty, including its preamble and recitals, have the meanings provided in
the Primary Credit Agreement.
ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1.
Guaranty. Guarantor hereby absolutely,
unconditionally and irrevocably
(a)
guarantees
(i) the full and punctual payment when due, whether
at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, of all Obligations of
Borrower now or hereafter existing under the Credit
Agreements, the Notes, the LC Applications and each other Loan
Document to which Borrower is or may become a party, whether
for principal, interest, fees, expenses or otherwise;
(ii)
the payment and performance of any and all
present or future obligations of Borrower according to the
terms of any present or future rate swap, rate cap, rate
floor, rate collar, currency exchange transaction, forward
rate agreement, or other exchange or rate protection
agreements or any option with respect to any such transaction
now existing or hereafter entered into between Borrower or any
of its Subsidiaries and one or more of the Lenders or their
Affiliates ("interest rate swap agreement");
Exhibit B - 3
127
(iii)
the payment and performance of any and all
present or future obligations of Borrower according to the
terms of any present or future crude oil, natural gas or other
hydrocarbons swap agreements, crude oil, natural gas or other
hydrocarbons cap, crude oil, natural gas or other hydrocarbons
floor, crude oil, natural gas or other hydrocarbons collar,
crude oil, natural gas or other hydrocarbons exchange
transaction, forward crude oil, natural gas or other
hydrocarbons agreement, or other exchange or crude oil,
natural gas or other hydrocarbons protection agreements or any
option with respect to any such transaction now existing or
hereafter entered into between Borrower or any of its
Subsidiaries and one or more of the Lenders or their
Affiliates; and
(iv)
all renewals, rearrangements, increases,
extensions for any period, substitutions, modification,
amendments or supplements in whole or in part of any of the
above loan documents or obligations,
(including all such amounts which would become due but for the
operation of the automatic stay under Section 362(a) of the United
States Bankruptcy Code, 11 U.S.C. Section 362(a), and the operation of
Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11
U.S.C. Section 502(b) and Section 506(b)), and (b) indemnifies and
holds harmless strictly in accordance with the terms of the Credit
Agreements each Lender Party and each holder of a Note from Borrower,
an LC Application or any interest in an LC Obligation for any and all
costs and expenses (including reasonable attorney's fees and expenses)
incurred by such Lender Party or such holder, as the case may be, in
enforcing any rights under this Guaranty; provided, however, that
Guarantor shall only be liable under this Guaranty for the maximum
amount of such liability that can be hereby incurred without rendering
this Guaranty, as it relates to Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer, and not
for any greater amount. This Guaranty constitutes a guaranty of
payment when due and not of collection, and Guarantor specifically
agrees that it shall not be necessary or required that any Lender
Party or any holder of any Note exercise any right, assert any claim
or demand or enforce any remedy whatsoever against Borrower or any
other Designated Entity (or any other Person) before or as a condition
to the obligations of Guarantor hereunder. All payments hereunder are
to be made in the currency in which they are due under the Credit
Agreements.
SECTION 2.2.
Acceleration of Guaranty. Guarantor agrees that, in
the event of the dissolution or insolvency of Borrower
Exhibit B - 4
128
or Guarantor, or the inability or failure of Borrower or Guarantor to pay debts
as they become due, or an assignment by Borrower or Guarantor for the benefit
of creditors, or the commencement of any case or proceeding in respect of
Borrower or Guarantor under any bankruptcy, insolvency or similar laws, and if
such event shall occur at a time when any of the Obligations of Borrower may
not then be due and payable, Guarantor will pay to the Lenders forthwith the
full amount which would be payable hereunder by Guarantor if all such
Obligations were then due and payable.
SECTION 2.3.
Guaranty Absolute, etc. This Guaranty shall in all
respects be a continuing, absolute, unconditional and irrevocable guaranty of
payment, and shall remain in full force and effect until all Obligations of
Borrower have been paid in full, all obligations of Guarantor hereunder shall
have been paid in full and all Commitments shall have terminated. Guarantor
guarantees that the Obligations of Borrower will be paid strictly in accordance
with the terms of the Credit Agreements and each other Loan Document under
which they arise, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of any
Lender Party or any holder of any Note with respect thereto. The liability of
Guarantor under this Guaranty shall be absolute, unconditional and irrevocable
irrespective of:
(a)
(i) any lack of validity, legality or enforceability
of the Credit Agreements, any Note, any LC Application or any other
Loan Document or any portion of any thereof or (ii) the Credit
Agreements, any Note, any LC Application or any other Loan Document or
any portion of any thereof being void or voidable;
(b)
the failure of any Lender Party or any holder of any
Note, any LC Application, Letter of Credit or any interest therein
(i) to assert any claim or demand or to enforce any
right or remedy against Borrower, any other Designated Entity
or any other Person (including any other guarantor) under the
provisions of the Credit Agreements, any Note, any LC
Application, any other Loan Document or otherwise, or
(ii)
to exercise any right or remedy against any
other guarantor of, or collateral securing, any Obligations of
Borrower or any other Designated Entity;
(c)
any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations of Borrower
or any other Designated Entity, or any other
Exhibit B - 5
129
extension, compromise or renewal of any Obligation of Borrower or any
other Designated Entity;
(d)
any reduction, limitation, impairment or termination
of any Obligations of Borrower or any other Designated Entity for any
reason, including any claim of waiver, release, surrender, alteration
or compromise, and shall not be subject to (and Guarantor hereby
waives any right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability
of, or any other event or occurrence affecting, any Obligations of
Borrower, any other Designated Entity or otherwise;
(e)
any amendment to, extensions of, rescission, waiver,
or other modification of, or any consent to departure from, any of the
terms of the Credit Agreements, any Note, any LC Application, any
Letter of Credit or any other Loan Document;
(f)
any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver or
release or addition of, or consent to departure from, any other
guaranty, held by any Lender Party or any holder of any Note, any LC
Application, any Letter of Credit or interest therein securing any of
the Obligations of Borrower or any other Designated Entity; or
(g)
any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable discharge
of, Borrower, any other Designated Entity, any surety or any
guarantor.
SECTION 2.4.
Reinstatement. Guarantor agrees that this Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Obligations guaranteed
hereby is rescinded or must otherwise be restored by any Lender Party or any
holder of any Note, any LC Application or any interest in an LC Obligation,
upon the insolvency, bankruptcy or reorganization of Borrower, or any other
Designated Entity or otherwise, all as though such payment had not been made.
SECTION 2.5.
Waiver. Guarantor hereby waives promptness,
diligence, presentment, notice of acceptance and any other notice with respect
to any of the Obligations of Borrower or any other Designated Entity and this
Guaranty and any requirement that any Agent, any other Lender Party or any
holder of any Note, any LC Application, any Letter of Credit or any interest
therein protect, secure, perfect or insure any security interest or Lien,
Exhibit B - 6
130
or any property subject thereto, or exhaust any right or take any action
against Borrower, any other Designated Entity or any other Person (including
any other guarantor) or entity or any collateral securing the Obligations of
Borrower or any other Designated Entity, as the case may be.
SECTION 2.6.
Waiver of Subrogation. Guarantor hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
Borrower or any other Designated Entity that arise from the existence, payment,
performance or enforcement of Guarantor's obligations under this Guaranty or
any other Loan Document, including any right of subrogation, reimbursement,
contribution, exoneration, or indemnification, any right to participate in any
claim or remedy of the Lender Parties against Borrower or any other Designated
Entity or any collateral which the Collateral Agent now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including the right to take or receive from
Borrower or any other Designated Entity, directly or indirectly, in cash or
other property or by set-off or in any manner, payment or security on account
of such claim or other rights. If any amount shall be paid to Guarantor in
violation of the preceding sentence and the Obligations shall not have been
paid in cash in full and the Commitments have not been terminated, such amount
shall be deemed to have been paid to Guarantor for the benefit of, and held in
trust for, the Lender Parties, and shall forthwith be paid to the Lender
Parties to be credited and applied upon the Obligations, whether matured or
unmatured; otherwise it shall be returned to remitter. Guarantor acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated by the Credit Agreements and that the waiver set
forth in this Section is knowingly made in contemplation of such benefits.
SECTION 2.7.
Successors, Transferees and Assigns; Transfers of
Notes. This Guaranty shall:
(a)
be binding upon Guarantor, and its successors,
transferees and assigns (provided, however, that Guarantor may not
assign any of its obligations hereunder without the prior written
consent of all Lenders); and
(b)
inure to the benefit of and be enforceable by each
Agent and each other Lender Party.
Without limiting the generality of the foregoing clause (b), any Lender may
assign or otherwise transfer (in whole or in part) any Note, Loan, LC
Application, Letter of Credit or interest therein held by it to any other
Person or entity, and such other Person or entity shall thereupon become vested
with all rights and benefits in respect thereof granted to such Lender under
any Loan
Exhibit B - 7
131
Document (including this Guaranty) or otherwise, subject, however, to any
contrary provisions in such assignment or transfer, and to the provisions of
Section 8.8 of the Credit Agreements.
SECTION 2.8.
Taxes.
All payments by the undersigned hereunder
shall be made free and clear of and without deduction for any present or future
income, excise, stamp, or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any taxing
authority, but excluding franchise taxes and taxes imposed on or measured by
any Lender's net income or receipts (such non-excluded items being called
"Taxes"). In the event that any withholding or deduction from any payment to
be made hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then, subject to the provisions of Section
2.9, the undersigned will:
(a)
pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b)
promptly forward to Administrative Agent an official
receipt or other documentation satisfactory to Administrative Agent
evidencing such payment to such authority; and
(c)
pay to Administrative Agent for the account of the
applicable Lender(s) such additional amount(s) as is necessary to
ensure that the net amount actually received by each Lender will equal
the full amount such Lender would have received had no such
withholding or deduction been required and the undersigned hereby
acknowledges that it is not entitled to and will not seek recovery or
restitution of any amount due to any of the Lenders or Agents and paid
by it pursuant to this clause (c) or pursuant to the next sentence.
If any Taxes are directly asserted against any Agent or any Lender with respect
to any payment received by such Agent or such Lender hereunder, such Agent or
such Lender may pay such Taxes and, if paid in good faith, the undersigned will
promptly pay such additional amounts to the Administrative Agent for the
account of such Lender or Agent (including any penalties, interest or expenses)
as is necessary in order that the net amount received by such person after the
payment of such Taxes (including any taxes on such additional amount) shall
equal the amount such person would have received had no such Taxes been
asserted, subject to the provisions of Section 2.9.
The undersigned shall pay all stamp, transaction, registration and
similar taxes (including financial institutions
Exhibit B - 8
132
duties, debit taxes or other taxes payable by return and taxes passed on to any
Lender or Agent by a bank or financial institution (collectively "Stamp Taxes")
and, if the undersigned fails to pay any such charges or taxes after reasonable
notice from any such Lender or Agent, fines and penalties) which may be payable
or determined to be payable in relation to the execution, delivery, performance
or enforcement of this Guaranty or any Loan Document or any other transaction
contemplated by any Loan Document to which the undersigned is a party. The
undersigned hereby indemnifies each Lender and Agent against any liability
resulting from delay or omission to pay such charges or taxes except to the
extent the liability results from failure by the relevant Lender or Agent to
pay any such tax after having been delivered funds to do so by the undersigned
or to the extent such liability is for fines and penalties resulting from such
Lender's or Agent's failure to provide reasonable notice to the undersigned as
provided herein.
If the undersigned fails to pay any Taxes or Stamp Taxes when due to
the appropriate taxing authority or fails to remit to Administrative Agent, for
the account of the respective Lenders, the required receipts or other required
documentary evidence, the undersigned shall indemnify Lenders for any Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure, subject to the provisions of Section 2.9.
The undersigned waives any statutory right to recover from any Agent
or any Lender any amount due to any such Agent or Lender and paid by the
undersigned under this Section.
SECTION 2.9.
Make-Whole Qualifications. Each Lender's claims for
reimbursements, payments, indemnities or otherwise under Section 2.8 and the
undersigned's obligations with respect thereto, shall be limited and qualified
by and subject to the following:
(a)
the undersigned's obligation to pay, satisfy or
recognize such claim shall be limited to costs or losses incurred
within one (1) year immediately prior to any demand or request
therefor upon the undersigned;
(b)
each Lender's demand for reimbursement, payment or
indemnity must be limited to that which is being generally applied at
the time by such Lender for comparable guarantors and guaranties
subject to similar provisions;
(c)
each Lender which asserts its rights with respect
thereto or which is seeking or imposing such reimbursement, payment or
indemnity shall provide evidence regarding the basis of such claim and
the calculation and application thereof in reasonable detail and, in
determining such
Exhibit B - 9
133
amount, each Lender may use reasonable methods of attribution and
averaging; and
(d)
each Lender which is seeking payment, indemnity or
reimbursement pursuant to Section 2.8 shall, if so requested by the
undersigned use reasonable efforts (subject to the overall policy
considerations of such Lender) to designate a different lending office
hereunder if to do so will avoid the need for, or reduce the amount
of, any such payment, indemnity or reimbursement; provided that,
Lender would, in its sole but reasonable determination, suffer no
material economic, legal or regulatory disadvantage or burden.
[SECTION 2.10.
Judgment.
Guarantor hereby agrees that:
(a)
If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder in United States
Dollars into another currency, Guarantor agrees, to the fullest extent
permitted by law, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative
Agent could purchase United States Dollars with such other currency on
the Business Day preceding that on which final judgment is given.
(b)
The obligation of Guarantor in respect of any sum due
from it to any Lender Party or any holder of a Note hereunder shall,
notwithstanding any judgment in a currency other than United States
Dollars, be discharged only to the extent that on the Business Day
following receipt by such Lender Party or such holder, as the case may
be, of any sum adjudged to be so due in such other currency such
Lender Party or such holder, as the case may be, may, in accordance
with normal banking procedures, purchase United States Dollars with
such other currency; in the event that the United States Dollars so
purchased are less than the sum originally due to such Lender Party in
United States Dollars, Guarantor, as a separate obligation and
notwithstanding any such judgment, hereby indemnifies and holds
harmless such Lender Party and such holder against such loss, and if
the United States Dollars so purchased exceed the sum originally due
to such Lender Party or such holder in United States Dollars, such
Lender Party or such holder, as the case may be, shall remit to
Guarantor such excess.]
Exhibit B - 10
134
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1.
Representations and Warranties. Guarantor hereby
represents and warrants unto each Lender Party as set forth in this Article.
SECTION 3.1.1.
Organization, Existence and Good Standing. Guarantor
is duly organized or incorporated, validly existing and in good standing under
the laws of its jurisdiction of organization or incorporation, having all
corporate or partnership powers required to enter into and carry out the
transactions contemplated hereby. Guarantor is duly qualified, in good
standing, and authorized to do business in all other jurisdictions within the
United States wherein the character of the properties owned or held by it or
the nature of the business transacted by it makes such qualification necessary,
except for any lack of qualification, good standing or authorization that is
not reasonably expected to result in a Material Adverse Effect. Guarantor has
taken all actions customarily taken in order to enter, for the purpose of
conducting business or owning property, each jurisdiction outside the United
States wherein the character of the properties owned or held by it or the
nature of the business transacted by it makes such actions desirable, except
any failure to take such action that is not reasonably expected to result in a
Material Adverse Effect.
SECTION 3.1.2.
Authorization. Guarantor has duly taken all
corporate, partnership or shareholder action necessary to authorize the
execution and delivery by it of this Guaranty and to authorize the consummation
of the transactions contemplated hereby and the performance of its obligations
hereunder.
SECTION 3.1.3.
No Conflicts or Consents. The execution and delivery
by Guarantor of this Guaranty, the performance by it of its obligations
hereunder, and the consummation of the transactions contemplated by the various
Loan Documents, do not and will not (i) conflict with any provision of the
articles or certificate of incorporation, bylaws, charter, or partnership
agreement or certificate of such Guarantor, or (ii) except as to matters that
could not reasonably be expected to result in a Material Adverse Effect, result
in the acceleration of any Debt owed by such Guarantor, or conflict with any
law, statute, rule, regulation, or agreement, judgment, license, order or
permit applicable to or binding upon such Guarantor, or require the consent,
approval, authorization or order of, or notice to or filing with, any court or
Governmental Authority or third party, or result in or require the creation of
any Lien upon any material assets or properties of such Guarantor, except as
permitted in the Loan Documents.
SECTION 3.1.4.
Enforceable Obligations. This Guaranty is the legal,
valid and binding obligation of Guarantor, enforceable in accordance with its
terms, except as such enforcement may be
Exhibit B - 11
135
limited by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights and by general principles of
equity.
ARTICLE IV
COVENANTS
SECTION 4.1.
Covenants. Guarantor covenants and agrees that, so
long as any portion of the Obligations of Borrower shall remain unpaid or any
Lender shall have any outstanding Commitment, Guarantor will, unless the
Required Lenders shall otherwise consent in writing, perform or comply with the
obligations of a Restricted Subsidiary of Borrower set forth in Sections 5.1
and 5.2 of the Credit Agreements, subject to any limitations on performance or
compliance contained in such sections, including, without limitation, the
limitation, when applicable, that the failure to perform or comply could not
reasonably be expected to have a Material Adverse Effect.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1.
Loan Document. This Guaranty is a Loan Document
executed pursuant to the Credit Agreements and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
SECTION 5.2.
Binding on Successors, Transferees and Assigns;
Assignment. In addition to, and not in limitation of, Section 2.7, this
Guaranty shall be binding upon Guarantor and its successors, transferees and
assigns and shall inure to the benefit of and be enforceable by each Lender
Party and each holder of a Note, an LC Application, or an interest in an LC
Obligation and their respective successors, transferees and assigns (to the
full extent provided pursuant to Section 2.7); provided, however, that
Guarantor may not assign any of its obligations hereunder without the prior
written consent of all Lenders.
SECTION 5.3.
Amendments. No amendment to or waiver of any
provision of this Guaranty, nor consent to any departure by Guarantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Administrative Agent, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION 5.4.
Notices. All notices, requests, consents, demands
and other communications required or permitted hereunder shall be in writing,
unless otherwise specifically provided herein and shall be deemed sufficiently
given or furnished if
Exhibit B - 12
136
delivered by personal delivery, by telecopy (with telephonic confirmation of
transmission, by delivery service with proof of delivery, or by registered or
certified United States mail, postage prepaid, to Guarantor at the address of
Guarantor specified on the signature pages hereto and to each Agent and each
Lender at their addresses specified on the signature pages to the Credit
Agreements (unless changed by similar notice in writing given by the particular
Person whose address is to be changed). Any such notice or communication shall
be deemed to have been given:
(a)
in the case of personal delivery or delivery service,
as of the date of first attempted delivery at the address provided
herein;
(b)
in the case of telecopy, upon receipt; or
(c)
in the case of registered or certified United States
mail, three days after deposit in the mail, postage prepaid.
SECTION 5.5.
No Waiver; Remedies. In addition to, and not in
limitation of, Section 2.3 and Section 2.5, no failure on the part of any
Lender Party or any holder of a Note, an LC Application, or an interest in an
LC Obligation to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
SECTION 5.6.
Section Captions. Section captions used in this
Guaranty are for convenience of reference only, and shall not affect the
construction of this Guaranty.
SECTION 5.7.
Severability. Wherever possible each provision of
this Guaranty shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Guaranty shall be prohibited
by or invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION 5.8.
Governing Law, Entire Agreement. THIS GUARANTY SHALL
BE DEEMED A CONTRACT AND INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF TEXAS
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THIS GUARANTY AND THE OTHER LOAN
DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
Exhibit B - 13
137
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 5.9.
Waiver of Jury Trial. EACH OF GUARANTOR, AGENTS AND
LENDERS HEREBY (a) IRREVOCABLY WAIVES, THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS GUARANTY OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH,
BEFORE OR AFTER MATURITY; (b) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES; (c) CERTIFIES THAT
NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (d)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO AND ACCEPT THIS GUARANTY,
THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS
SECTION.
SECTION 5.10.
Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER
PARTIES OR GUARANTOR SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF TEXAS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST
ANY PROPERTY MAY BE BROUGHT, AT THE COLLATERAL AGENT'S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH PROPERTY MAY BE FOUND. GUARANTOR HEREBY EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS
AND THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
TEXAS. FOR PURPOSES OF ANY ACTION OR PROCEEDING INSTITUTED IN THE FEDERAL OR
STATE COURTS OF TEXAS, THE UNDERSIGNED HEREBY IRREVOCABLY DESIGNATES BORROWER
WITH OFFICES ON THE DATE HEREOF AT 303 WEST WALL STREET, SUITE 101, MIDLAND,
TEXAS 79701 TO RECEIVE FOR AND ON BEHALF OF THE UNDERSIGNED SERVICE OF PROCESS
IN TEXAS. GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT
Exhibit B - 14
138
GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
Exhibit B - 15
139
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written but effective as of the Effective Date.
[Name of Guarantor]
By
-----------------------------------Name:
Title:
Address:
Suite 101
P. O. Box 3178
Midland, Texas
303 West Wall
79701
Attention:
Curt Kamradt
Telephone:
Telecopy:
(915) 571-3171
(915) 571-5696
with a copy to:
Garrett Smith
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
Telephone:
Telecopy:
Exhibit B - 16
(972) 402-7013
(972) 402-7028
140
Exhibit C
Form of Request for Advance
_____________, ________
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn: Mickey McLean
Re:
Request for Advance - Primary Credit Facility
Gentlemen:
Reference is made to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co- Agents party thereto, and the Lenders from
time to time parties thereto (the "Credit Agreement"). Terms which are defined
in the Credit Agreement and which are used but not defined herein are used
herein with the meanings ascribed to them in the Credit Agreement. Pursuant to
the terms of the Credit Agreement, the undersigned Borrower hereby requests
that Lenders make Advances to the undersigned Borrower in the aggregate
principal amount of $__________________, specifies _______________, _______, as
the date the undersigned Borrower desires for Lenders to make such Advances and
requests that Administrative Agent deliver to the undersigned Borrower the
proceeds thereof on such date.
To induce Lenders to make such Advances, the undersigned Borrower
hereby represents, warrants, acknowledges, and agrees to and with each Agent
and each Lender that:
(a)
The Designated Officer of Borrower signing this instrument is
a duly elected, qualified and acting officer of the undersigned Borrower,
holding the office indicated below such officer's signature hereto and having
all necessary authority to act for the undersigned Borrower in making and
delivering this Request for Advance.
(b)
The representations and warranties of the undersigned Borrower
and each other Designated Entity set forth in the Credit Agreement and the
other Loan Documents are true and correct on and as of the date hereof, with
the same effect as though such
Exhibit C - 1
141
representations and warranties had been made on and as of the date hereof.
(c)
There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as provided in
Section 6.1 of the Credit Agreement; nor will any such Default exist upon the
undersigned Borrower's receipt and application of the Advances requested
hereby. The undersigned Borrower will use the Advances hereby requested in
compliance with the Credit Agreement.
(d)
Except to the extent waived in writing as provided in Section
6.1 of the Credit Agreement, the undersigned Borrower has performed and
complied with all agreements and conditions in the Credit Agreement required to
be performed or complied with by the undersigned Borrower on or prior to the
date hereof, and each of the conditions precedent to Advances contained in the
Credit Agreement remains satisfied.
(e)
The aggregate unpaid principal balance of the Advances under
the Facility after the making of such Advance requested hereby, plus the
aggregate outstanding amount of LC Obligations and Swing Line Advances and
Competitive Bid Advances at the date hereof will not be in excess of the
Facility Amount on the date requested for the making of such Advances.
(g)
The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any course of
dealing, or by any other means not provided for in Section 8.1 of the Credit
Agreement. The Credit Agreement and the other Loan Documents are hereby
ratified, approved, and confirmed in all respects.
The undersigned Borrower agrees that if, prior to the time of the
Advances requested hereby, any matter certified to herein by it will not be
true and correct at such time as if then made, it will immediately so notify
Administrative Agent. Except to the extent, if any, that, prior to the time of
the Advances requested hereby, Administrative Agent shall have received written
notice from the undersigned Borrower to the contrary, each matter certified
herein shall be deemed once again to be certified as true and correct as of the
date of such Advances as if then made.
The Designated Officer of the undersigned Borrower signing this
instrument hereby certifies that, to the best of his
Exhibit C - 2
142
knowledge, the above representations, warranties, acknowledgments and
agreements of the undersigned Borrower are true, correct and complete.
PIONEER NATURAL RESOURCES COMPANY
By:
--------------------------------Name:
Title:
Exhibit C - 3
143
Exhibit D
Form of Rate Election
____________________, ________
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn:
Re:
Mickey McLean
Rate Election - Primary Credit Facility
Gentlemen:
Reference is made to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co- Agents party thereto, and the Lenders from
time to time parties thereto (the "Credit Agreement"). Terms which are defined
in the Credit Agreement and which are used but not defined herein are used
herein with the meanings ascribed to them in the Credit Agreement. Pursuant to
the terms of the Credit Agreement, the undersigned Borrower hereby elects a
Tranche of Eurodollar Portions in the aggregate amount of $___________ with an
Interest Period beginning on __________ and continuing for a period of
___________________.
To satisfy the conditions set out in the Credit Agreement for the
making of such election, the undersigned Borrower hereby represents, warrants,
acknowledges and agrees that:
(a)
The Designated Officer of the undersigned Borrower signing
this instrument is a duly elected, qualified and acting officer of such
Borrower, holding the office indicated below such officer's signature hereto
and having all necessary authority to act for such Borrower in making and
delivering this Rate Election.
(b)
There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as provided in
Section 6.1 of the Credit Agreement.
(c)
The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any course of
dealing, or by any other means not provided for in
Exhibit D - 1
144
Section 8.1 of the Credit Agreement. The Credit Agreement and the other Loan
Documents are hereby ratified, approved, and confirmed in all respects.
(d)
The undersigned Borrower further agrees that if, on or prior
to the date of the commencement of the Interest Period designated herein, any
matter certified herein by it will not be true and correct at such time as if
such certification were then made, it will immediately so notify Administrative
Agent. Except to the extent, if any, that prior to the commencement of the
Interest Period designated herein Administrative Agent shall receive written
notice to the contrary from the undersigned Borrower, each matter certified
herein shall be deemed to be certified as of the date of the commencement of
such Interest Period as if then made.
The Designated Officer of the undersigned Borrower signing this
instrument hereby certifies that, to the best of his knowledge, the above
representations, warranties, acknowledgments and agreements of the undersigned
Borrower are true, correct and complete.
PIONEER NATURAL RESOURCES COMPANY
By:
---------------------------------Name:
Title:
Exhibit D - 2
145
Exhibit E
Form of Request for Swing Line Advance
VIA FACSIMILE # (214)508-2515
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn:
Mickey McLean
Reference is made to the Primary Credit Facility pursuant to that
certain Amended and Restated Credit Facility Agreement dated as of December 18,
1997 by and among Borrower, NationsBank of Texas, N.A., as Administrative
Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New
York, as Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders from time to time parties thereto
(the "Credit Agreement"),. Capitalized terms used herein and not otherwise
defined herein shall have the meaning assigned in the Credit Agreement.
In accordance with Section 2.5, the undersigned hereby requests a
Swing Line Advance in an amount of $__________________ to be advanced today,
__________________________. We request this advance be for a period of
________ day(s), maturing on ___________________.
If you have any questions regarding this request, please contact the
undersigned at (915) _____________.
PIONEER NATURAL RESOURCES COMPANY
By:
---------------------------------Name:
Title:
Exhibit E - 1
146
Exhibit F
Form of Swing Line Participation Certificate
__________________ ,199__
[Name of Bank]
__________________________
__________________________
__________________________
Gentlemen:
Reference is made to the Primary Credit Facility pursuant to that
certain Amended and Restated Credit Facility Agreement dated as of December 18,
1997 by and among Borrower, NationsBank of Texas, N.A., as Administrative
Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New
York, as Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders from time to time parties thereto
(the "Credit Agreement"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned in the Credit Agreement.
Pursuant to subsection 2.6(b)(i) of the Credit Agreement, the
undersigned hereby acknowledges receipt from you on the date hereof of
_______________________ DOLLARS ($______________) as payment for a
participating interest in the following Swing Line Advance(s):
Date(s) of Swing Line Advance(s):
______________, 199__
Principal Amount of Swing Line Advance(s):
$____________________
Very truly yours,
NATIONSBANK OF TEXAS, N.A., as Swing
Line Lender
By:
---------------------------------Name:
Title:
Exhibit F - 1
147
Exhibit G
[INTENTIONALLY OMITTED]
Exhibit G - 1
148
Exhibit H
Forms of Opinion of Borrower's and Restricted Subsidiaries' Counsel
Exhibit H - 1
149
Exhibit I
Organization Chart of Borrower and its Subsidiaries
Exhibit I has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Exhibit I - 1
150
Exhibit J
Form of Designated Officer's Certificate
Reference is made to (i) the Primary Credit Facility pursuant to that
certain Amended and Restated Credit Facility Agreement dated as of December 18,
1997 by and among Borrower, NationsBank of Texas, N.A., as Administrative
Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New
York, as Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders from time to time parties thereto
(the "Primary Credit Agreement") and (ii) the 364 Day Credit Facility pursuant
to that certain Amended and Restated Credit Facility Agreement dated as of
December 18, 1997 by and among Borrower, NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, the Co-Agents party thereto, and the Lenders from time to
time parties thereto (the "364 Day Credit Agreement" and, together with the
Primary Credit Facility, the "Credit Agreements"). Terms which are defined in
the Credit Agreements and which are used but not defined herein are used herein
with the meanings given them in the Credit Agreements.
This Certificate is furnished pursuant to Section 5.1(b)(2) of the
Credit Agreements. Together herewith the Borrower is furnishing to Managing
Agents, the Co-Agents and each Lender the Borrower's [FINANCIAL STATEMENTS]
(the "Financial Statements") as of ______________(the "Reporting Date"). The
Borrower hereby represents, warrants, and acknowledges to Agents and each
Lender that:
(a)
the Designated Officer of the Borrower signing this instrument
is a duly elected, qualified and acting officer of the
Borrower;
(b)
the Financial Statements are accurate and complete and satisfy
the requirements of the Credit Agreements;
(c)
attached as Schedule I hereto is a schedule of calculations
showing compliance (or noncompliance, as the case may be) as
of the Reporting Date with the requirements of Section 5.3 of
the Credit Agreements; and
(d)
on the Reporting Date, each Borrower was, and on the date
hereof the Borrower is, in full compliance with the disclosure
requirements of Section 5.1(d) of the Credit Agreements, and
no Default otherwise existed on the Reporting Date or
otherwise exists on the date of
Exhibit J - 1
151
this Certificate [except for Default(s) under Section(s)
________________ of the Credit Agreements, which [is/are] more
fully described on a schedule attached hereto].
The Designated Officer of the Borrower signing this instrument hereby
certifies that he has reviewed the Loan Documents and the Financial Statements
and has otherwise undertaken such inquiry as is in his opinion necessary to
enable him to express an informed opinion with respect to the above
representations, warranties and acknowledgments of the Borrower and, to the
best of his knowledge, such representations, warranties, and acknowledgments
are true, correct and complete.
PIONEER NATURAL RESOURCES COMPANY
By:
---------------------------------Name:
Title:
Date:
--------------------------------Exhibit J - 2
152
Schedule I
================================================================================
COMPLIANCE WITH FINANCIAL COVENANTS AS OF _____________.
($ in 000's)
================================================================================
A.
EBITDAX TO CONSOLIDATED INTEREST EXPENSE RATIO
Minimum ratio allowed
============
B.
CONSOLIDATED TOTAL FUNDED DEBT TO TOTAL
CAPITALIZATION
3.75
Maximum ratio allowed
============
60%
================================================================================
COMPUTATION OF FINANCIAL REQUIREMENTS AND RATIOS AS OF _____________
================================================================================
A.
EBITDAX TO CONSOLIDATED INTEREST EXPENSE RATIO
(Section 5.3(a)) ($ in 000's)
(i)
EBITDAX (as defined in Section 5.3(a))
For the period ended __________, the sums
of the amounts for such period of
Consolidated net income, Consolidated
Interest Expense, depreciation expense,
depletion expense, amortization expense,
federal and state income taxes,
exploration and abandonment expense and
other non-cash charges and expenses, all
as determined on a Consolidated basis for
Borrower and its Consolidated
Subsidiaries;
(ii)
CONSOLIDATED INTEREST EXPENSE
(as defined in Section 5.3(a))
For the period ended ___________________,
total interest expense,
Exhibit J - 3
$______________
153
whether paid or accrued, of Borrower and
its Consolidated Subsidiaries on a
Consolidated basis, including, without
limitation, all commissions, discounts
and other fees and charges owed with
respect to Letters of Credit.
$______________
CONSOLIDATED INTEREST EXPENSE
$
==============
EBITDAX TO CONSOLIDATED INTEREST EXPENSE RATIO ((i)(ii))
$
==============
Minimum ratio allowed
$
3.75:1
==============
B.
CONSOLIDATED TOTAL FUNDED DEBT TO TOTAL
CAPITALIZATION (Section 5.3(b)) ($ in 000's)
(i)
CONSOLIDATED TOTAL FUNDED DEBT
(as defined in Section 1.1)
(a)
All indebtedness of Borrower and
its Consolidated Subsidiaries for
borrowed money
$_____________
(b)
Plus indebtedness of Borrower and
its Consolidated Subsidiaries
constituting an obligation to pay
the deferred purchase price of
property or services (other than
customary payment terms taken in
the ordinary course of the
business)
$_____________
(c)
Plus indebtedness of Borrower and
its Consolidated Subsidiaries
evidenced by a bond, debenture,
note or similar instrument
$_____________
(d)
Plus principal obligations under
leases capitalized in accordance
with GAAP under which either
Borrower or any of its
Consolidated Subsidiaries is the
lessee
$_____________
(e)
Plus indebtedness or obligations
of the type described in clauses
(a), (b), (c) or (d) of the
definition of Debt, which are
secured by a Lien on any property
owned by Borrower or any of its
Consolidated Subsidiaries, whether
or not such indebtedness or
obligations have been assumed by
Borrower or any of its
Consolidated Subsidiaries (limited
however to the lesser of (1) the
amount of its liability or (2) the
value
Exhibit J - 4
154
of such property) (excluding Debt
of the type referred to in clause
(e) of the definition of "Debt")
$_____________
(f)
Plus the undischarged balance of
any production payment created by
Borrower or any of its
Consolidated Subsidiaries or for
the creation of which Borrower or
its Consolidated Subsidiaries
directly or indirectly received
payment.
$_____________
CONSOLIDATED TOTAL FUNDED DEBT
=============
(ii)
$
TOTAL CAPITALIZATION (as defined in Section 1.1)
(a)
Consolidated Total Funded Debt of
the Borrower and its Consolidated
Subsidiaries (See B(i) above)
$_____________
(b)
Plus Consolidated shareholders'
equity of the Borrower and its
Consolidated Subsidiaries
$_____________
TOTAL CAPITALIZATION
$
=============
CONSOLIDATED TOTAL FUNDED DEBT TO TOTAL
CAPITALIZATION((i)/(ii))
=============
Maximum ratio
=============
Exhibit J - 5
%
60%
155
Exhibit K-1
Form of Election to Convert
___________________, _______
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn:
Re:
Mickey McLean
Conversion of Restricted Subsidiary
Gentlemen:
Reference is made to (i) that certain Amended and Restated Credit
Facility Agreement dated as of December 18, 1997 by and among Borrower,
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Primary Credit Agreement") and (ii) that certain Amended and Restated Credit
Facility Agreement dated as of December 18, 1997 by and among Borrower,
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"364 Day Credit Agreement" and, together with the Primary Credit Agreement, the
"Credit Agreements"). Terms not defined herein which are defined in the Credit
Agreement shall have for the purposes hereof the meanings provided therein.
The Borrower hereby elects, pursuant and subject to Section 5.2(i) of
the Credit Agreements, to convert, effective as of ________________, ________,
[NAME OF RESTRICTED SUBSIDIARY], a [JURISDICTION] [CORPORATION] [PARTNERSHIP],
("Subject Subsidiary"), from a Restricted Subsidiary to an Unrestricted
Subsidiary. The Borrower hereby certifies that all requirements for the
conversion of the Subject Subsidiary to an Unrestricted Subsidiary, as
specified in the Credit Agreements, have been and will be met, both as of the
date hereof and after giving effect to such conversion. After giving effect to
such conversion, no Default will exist. The Borrower hereby agrees that the
election to convert contained herein shall not be effective if the foregoing
certifications are not true and correct in all respects as of the date hereof
or are not true and correct in all respects as of the date of such conversion.
This election to convert
Exhibit K-1 - 1
156
shall not affect any obligation of the Borrower under the Credit Agreements or
under any Note under any Credit Agreement.
This instrument shall be construed in accordance with and governed by
the laws of the State of Texas.
PIONEER NATURAL RESOURCES COMPANY
By:
-----------------------------Name:
Title:
Receipt of the above Election to Convert is hereby acknowledged on
______________, ________.
NATIONSBANK OF TEXAS, N.A., as
Administrative Agent
By:
-----------------------------Name:
Title:
Exhibit K-1 - 2
157
Exhibit K-2
Form of Release
This Release is delivered to [NAME OF SUBSIDIARY] in connection with
(i) the Primary Credit Facility pursuant to Section 5.2(i) of that certain
Amended and Restated Credit Facility Agreement dated as of December 18, 1997 by
and among Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC
Inc., as Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Primary Credit Agreement"), and (ii) the 364 Day Credit Facility pursuant to
Section 5.2(i) of that certain Amended and Restated Credit Facility Agreement
dated as of December 18, 1997 by and among Borrower, NationsBank of Texas,
N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (the "364 Day Credit Agreement" and, together with
the Primary Credit Agreement, the "Credit Agreements"). Defined terms used in
this Release shall be used with the same meanings set forth in the Credit
Agreements.
Pursuant to the election to convert in the form of Exhibit K-1 to the
Credit Agreements delivered to Administrative Agent on ______________________,
19 _____, the Borrower has notified the Lenders that it has converted ___
______________ [NAME OF SUBSIDIARY] from a Restricted Subsidiary to an
Unrestricted Subsidiary. Subject to the accuracy of the information contained
in such notice of conversion, the undersigned Managing Agents and Lenders
hereby release __ _______________________________ [NAME OF FORMER RESTRICTED
SUBSIDIARY] from its obligations as Guarantor under its Guaranty dated as of
________, 199__, as from time to time amended, modified and supplemented, other
than obligations if any, pursuant to Section _____ thereof.
This Release may be separately executed in any number of counterparts
and by different parties hereto on separate counterparts, each of which when so
executed shall be deemed to constitute one and the same release.
[Add signature lines for Lenders
and Managing Agents]
Agreed and Accepted
this ___ day of __________, 199__ :
- ------------------------------------[Name of Restricted Subsidiary]
By:
--------------------------------Name:
Title:
Exhibit K-2 - 1
158
Exhibit L
Form of Agreement to be Bound
_____________, 199____
PIONEER NATURAL RESOURCES COMPANY
303 West Wall, Suite 101
Midland, Texas 79701
Attention: Curt F. Kamradt
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attention: Mickey McLean
NationsBank of Texas, N.A.
303 West Wall Street
Midland, Texas 79701
Attn: Frank K. Stowers
CIBC Inc.
2 Houston Center
909 Fannin Street, Suite 1200
Houston, Texas 77010
Attention: Paul Jordan
Re:
Assignment to ______________________________of
________________________________ the Loans of
_____________________ - Primary Credit Facility
Gentlemen:
We refer to Section 8.8(a) of that certain Amended and Restated Credit
Facility Agreement dated as of December 18, 1997 by and among Borrower,
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"). Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the Credit Agreement.
This Credit Agreement to be Bound constitutes notice to each of you,
pursuant to Section 8.8(a) of the Credit Agreement, of the assignment to
_______________________ ("Assignee") of (i) an undivided _____ (the "Designated
Percentage"), ($____________________________), of the Loans, LC Obligations and
Commitments of [NAME OF LENDER] ("Assignor") in effect on the date hereof.
Exhibit L - 1
159
After giving effect to the foregoing assignment, the Loan Commitment
and Percentage Share of each of the Assignor and Assignee is as set forth
beneath the signatures of each such Person below.
Assignee hereby acknowledges and confirms that it has received a copy
of the Credit Agreement and the exhibits related thereto, together with a copy
of all documents which were required to be delivered under the Credit Agreement
as a condition to the making of the Loans and issuing Letters of Credit
thereunder. Assignee further confirms and agrees that in becoming a Lender and
in making its Loans and participating in Letters of Credit under the Credit
Agreement, such actions have and will be made without recourse to, or
representation or warranty by, Assignor, except as expressly set forth in the
Assignment and Assumption of even date herewith between Assignor and Assignee.
Assignor and Assignee hereby agree that [ASSIGNOR/ASSIGNEE] will pay
the processing fee referred to in Section 8.8(a) of the Credit Agreement to
Administrative Agent upon the delivery thereof. It is understood and agreed
that all fees accrued under the Credit Agreement to the date hereof are for
Assignor's account and those accruing from and after the date hereof are for
Assignee's account to the extent specified in the second paragraph hereof.
Each of Assignor and Assignee hereby agree that if it receives any amount under
the Credit Agreement which is for the account of the other, it shall receive
and hold the same for the account of the other and shall promptly pay the same
to the other.
The assignment shall become effective upon (i) the receipt by the
Borrower and Administrative Agent of this document, (ii) the receipt by
Administrative Agent of the processing fee referred to in the preceding
paragraph, and (iii) in accordance with Section 8.8(a) of the Credit Agreement,
the consent of the Borrower and Administrative Agent.
Upon the effective date of this Credit Agreement the Assignee:
(a)
shall have all rights and benefits of a "Lender" under the
Credit Agreement as if it were an original signatory thereto to the extent
specified in the second paragraph hereof; and
(b)
agrees to be bound by the terms and conditions of each of the
Credit Agreement, and be obligated thereunder, and hereby makes each of the
representations and warranties and acknowledgments contained in such documents
as if it were an original signatory thereto.
Exhibit L - 2
160
Upon the effective date of this Agreement, the Assignor shall be
released from its obligations under the Credit Agreement and the other Loan
Documents to the extent specified in the second paragraph.
Assignee hereby advises each of you of the following matters with
respect to the assigned Loans:
(A)
Addresses for Notice:______________________
Telephone:_________________________________
Telecopy:__________________________________
Institution Name:__________________________
Attention:_________________________________
(B)
Payment Instructions:_______________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
This Credit Agreement may be executed by Assignor and Assignee in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
The execution below by the Borrower and Administrative Agent shall
evidence their consent to this Agreement in accordance with Section 8.8(a) of
the Credit Agreement.
Exhibit L - 3
161
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be executed by its official, officer or agent thereunto duly authorized,
effective as of ______________, ________.
- ---------------------------------As Assignor
-------------------------------As Assignee
By:
------------------------------Name:
Title:
By:
----------------------------Name:
Title:
Percentage Share:
---------------Loan Commitment:
----------------
%
Percentage Share:
------------Loan Commitment:
--------------
APPROVED:
PIONEER NATURAL RESOURCES
COMPANY
NATIONSBANK OF TEXAS, N.A.
By:
------------------------------Name:
Title:
By:
----------------------------Name:
Title:
Exhibit L - 4
%
162
Exhibit M
[Form of]
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of ______,
199___, made by ______________________, a __________________ corporation
("Pledgor"), in favor of NATIONSBANK OF TEXAS, N.A., as collateral agent
(together with any successor(s) thereto in such capacity, the "Collateral
Agent") for each of Lender Parties (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Pioneer Natural Resources
Company, a Delaware corporation ("Borrower"), NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, the Co-Agents party thereto, and the Lenders from time to
time parties thereto (together with all amendments, supplements, restatements
and other modifications, if any, thereafter made thereto, the "Primary Credit
Agreement"), the Lenders have extended Commitments (as defined in the Primary
Credit Agreement) to make Loans to Borrower and to issue or participate in
Letters of Credit on behalf of Borrower; and
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co- Agents party thereto, and the Lenders from
time to time parties thereto (together with all amendments, supplements,
restatements and other modifications, if any, thereafter made thereto, the "364
Day Credit Agreement", and together with the Primary Credit Agreement, the
"Credit Agreements"), the Lenders have extended Commitments (as defined in the
364 Day Credit Agreement) to make Loans to Borrower; and
WHEREAS, pursuant to the Credit Agreements, Pledgor is required to
execute and deliver this Pledge Agreement; and
WHEREAS, Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
WHEREAS, it is in the best interests of Pledgor to execute this Pledge
Agreement inasmuch as Pledgor will derive substantial direct and indirect
benefits from the Loans made from time to
Exhibit M - 1
163
time to Borrower and Letters of Credit issued on behalf of Borrower pursuant to
the Credit Agreements;
NOW THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, and in order to induce the Lenders to make Loans
(including the initial Loans) to Borrower pursuant to the Credit Agreements and
for the Issuing Bank to issue Letters of Credit on behalf of Borrower and for
the Lenders to acquire participations in such Letters of Credit pursuant to the
Primary Credit Agreement, Pledgor agrees, for the benefit of each Lender Party,
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1.
Certain Terms. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the first recital.
"Borrower" is defined in the first recital.
"Collateral" is defined in Section 2.1.
"Collateral Agent" is defined in the preamble.
"Commitments" means "Commitments" as defined in the Primary Credit
Agreement and "Commitments" as defined in the 364 Day Credit Agreement.
"Credit Agreements" is defined in the second recital.
"Debtor" is defined in Section 2.1(a)(i).
"Distributions" means all stock dividends, liquidating dividends,
shares of stock resulting from (or in connection with the exercise of) stock
splits, reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock or security entitlements constituting Collateral, but shall not
include Dividends.
"Dividends" means cash dividends and cash distributions with respect
to any Pledged Shares made in the ordinary course of business and not a
liquidating dividend.
Exhibit M - 2
164
"Lender Party" means, as the context may require, any Lender, any
Issuing Bank or any Agent and each of its respective successors, transferees
and assigns under the Credit Agreements.
"Lenders" means "Lenders" as defined in the Primary Credit Agreement
and "Lenders" as defined in the 364 Day Credit Agreement.
"Loan Documents" means "Loan Documents" as defined in the Primary
Credit Agreement and "Loan Documents" as defined in the 364 Day Credit
Agreement.
"1994 Amendments" means the 1994 Amendments to Articles 8 and 9 of the
Uniform Commercial Code promulgated by the American Law Institute and the
National Conference of Commissions for Uniform State Laws.
"Notes" means "Notes" as defined in the Primary Credit Agreement and
"Notes" as defined in the 364 Day Credit Agreement.
"Obligations" means "Obligations" as defined in the Primary Credit
Agreement and "Obligations" as defined in the 364 Day Credit Agreement.
"Pledge Agreement" is defined in the preamble.
"Pledged Share Issuer" means each Person identified in Attachment 1
hereto as the issuer of the Pledged Shares identified opposite the name of such
Person.
"Pledged Shares" means all shares of capital stock of any Pledged
Share Issuer which are delivered by Pledgor to Collateral Agent hereunder and
all other pledged shares of capital stock from time to time hereafter delivered
by Pledgor to Collateral Agent for the purpose of pledge under this Pledge
Agreement or any other Loan Document, and all proceeds of any of the foregoing.
"Pledgor" is defined in the preamble.
"Primary Credit Agreement" is defined in the first recital.
"Secured Obligations" is defined in Section 2.2.
"Securities Act" is defined in Section 6.2.
"364 Day Credit Agreement" is defined in the second recital.
"U.C.C." means the Uniform Commercial Code as in effect in the State
of Texas.
Exhibit M - 3
165
SECTION 1.2.
Primary Credit Agreement Definitions. Unless
otherwise defined herein or the context otherwise requires, terms used in this
Pledge Agreement, including its preamble and recitals, have the meanings
provided in the Primary Credit Agreement.
SECTION 1.3.
U.C.C. Definitions. Unless otherwise defined herein
or the context otherwise requires, terms for which meanings are provided in the
U.C.C. are used in this Pledge Agreement, including its preamble and recitals,
with such meanings.
ARTICLE II
PLEDGE
SECTION 2.1.
Grant of Security Interest. Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to
Collateral Agent, for its benefit and the ratable benefit of each of Lender
Parties, and hereby grants to Collateral Agent, for its benefit and the ratable
benefit of Lender Parties, a continuing security interest in, all of the
following property (the "Collateral"):
(a)
65% of the issued and outstanding shares of capital
stock of each Pledged Share Issuer identified in Item B of Attachment
1 hereto;
(b)
time;
65% of all other Pledged Shares issued from time to
(c)
all Dividends, Distributions, interest, and other
payments and rights with respect to any Pledged Shares; and
(d)
all proceeds of any of the foregoing.
SECTION 2.2.
secures:
Security for Obligations.
This Pledge Agreement
(a)
the payment in full of all Obligations of Borrower
now or hereafter existing under the Credit Agreements, the Notes, the
LC Applications and each other Loan Document to which Borrower is or
may become a party, whether for principal, interest, costs, fees,
expenses, or otherwise, and all obligations of Pledgor and each other
Designated Entity now or hereafter existing under this Pledge
Agreement and each other Loan Document to which it is or may become a
party
(b)
the payment and performance of any and all present or
future obligations of Borrower according to the terms of any present
or future rate swap, rate cap, rate floor, rate
Exhibit M - 4
166
collar, currency exchange transaction, forward rate agreement, or
other exchange or rate protection agreements or any option with
respect to any such transaction now existing or hereafter entered into
between Borrower or any of its Subsidiaries and one or more of the
Lenders or their Affiliates ("interest rate swap agreement");
(c)
the payment and performance of any and all present or
future obligations of Borrower according to the terms of any present
or future crude oil, natural gas or other hydrocarbons swap
agreements, crude oil, natural gas or other hydrocarbons cap, crude
oil, natural gas or other hydrocarbons floor, crude oil, natural gas
or other hydrocarbons collar, crude oil, natural gas or other
hydrocarbons exchange transaction, forward crude oil, natural gas or
other hydrocarbons agreement, or other exchange or crude oil, natural
gas or other hydrocarbons protection agreements or any option with
respect to any such transaction now existing or hereafter entered into
between Borrower or any of its Subsidiaries and one or more of the
Lenders or their Affiliates; and
(d)
all renewals, rearrangements, increases, extensions
for any period, substitutions, modification, amendments or supplements
in whole or in part of any of the above loan documents or obligations
(all such obligations of Borrower and Pledgor being the "Secured Obligations").
SECTION 2.3.
Delivery of Pledged Shares. (a) All certificates or
instruments representing or evidencing any Collateral, including all Pledged
Shares shall be delivered to and held by or on behalf of Collateral Agent
pursuant hereto, shall be in suitable form for transfer by delivery, and shall
be accompanied by all necessary indorsements or instruments of transfer or
assignment, duly executed in blank.
(b)
(i)
To the extent any of the Collateral constitutes
"uncertificated securities" (as defined in Section 8-102(a)(18) of the
U.C.C. or Section 8-102 of the Uniform Commercial Code as in effect in
any jurisdiction that has not adopted the 1994 Amendments) and the
issuer of which is organized in a jurisdiction, or has selected a
jurisdiction (in circumstances permitted by Section 8-110(d) of the
U.C.C.), that has not enacted the 1994 Amendments, Pledgor shall cause
the issuer thereof to acknowledge to Collateral Agent the registration
on the books of such issuer of the pledge and security interest hereby
created in the manner required by Section 8-408(d) of the Uniform
Commercial Code of its jurisdiction of organization.
Exhibit M - 5
167
(ii) To the extent any of the Collateral constitutes
"uncertificated securities" (as defined in Section 8-102(a)(18) of the
U.C.C.) and the issuer of which is organized in a jurisdiction, or has
selected a jurisdiction (in circumstances permitted by Section
8-110(d) of the U.C.C.), that has enacted the 1994 Amendments, Pledgor
shall cause the issuer thereof to acknowledge to Collateral Agent the
registration on the books of such issuer of the pledge and security
interest hereby created in the manner required by Section 8- 301(1)(b)
of the U.C.C.
(c)
(i) To the extent any of the Collateral constitutes a
"security entitlement" or a "securities account" (as such terms are
defined in Sections 8-102(a)(17) and 8-501, respectively, of the
U.C.C.) and the jurisdiction of the securities intermediary (as
described in Section 8-110(e) of the U.C.C.) against which such
securities entitlement is established or at which such securities
account is maintained is not a jurisdiction that has adopted the 1994
Amendments, Pledgor shall cause such Collateral to be transferred to
Collateral Agent pursuant to Section 8-313(1) of the Uniform
Commercial Code as in effect in such jurisdiction in a manner
satisfactory to Collateral Agent.
(ii) To the extent any of the Collateral constitutes a
"security entitlement" or a "securities account" (as such terms are
defined in Sections 8-102(a)(17) and 8-501, respectively, of the
U.C.C.) and the jurisdiction of the securities intermediary (as
described in Section 8-110(e) of the U.C.C.) against which such
securities entitlement is established or at which such securities
account is maintained is a jurisdiction that has adopted the 1994
Amendments, Pledgor shall cause to be delivered to Collateral Agent an
agreement, in form and substance satisfactory to Collateral Agent,
executed by such securities intermediary whereby such securities
intermediary agrees (i) that it will comply with entitlement orders
originated by Collateral Agent without further consent by Pledgor with
respect to all such Collateral (it being understood that such
agreement may provide that at all times when such securities
intermediary has not been notified that a Default is in existence, the
securities intermediary may comply with entitlement orders of
Pledgor), (ii) to subordinate any security interest it may have in and
to all such Collateral to the security interest of Collateral Agent
therein and (iii) that it will not agree with any Person other than
Collateral Agent in any manner that would grant such Person "control"
over any such Collateral.
SECTION 2.4.
Dividends on Pledged Shares. In the event that any
Dividend is to be paid on any Pledged Share or securities
Exhibit M - 6
168
entitlement at a time when (x) no Default has occurred and is continuing, and
no (y) Event of Default has occurred and is continuing, such Dividend or
payment may be paid directly to Pledgor. If any such Default or Event of
Default has occurred and is continuing, then any such Dividend or payment shall
be paid directly to Collateral Agent.
SECTION 2.5.
Continuing Security Interest; Transfer of Note. This
Pledge Agreement shall create a continuing security interest in the Collateral
and shall
(a)
remain in full force and effect until payment in full
of all Secured Obligations and the termination of all Commitments,
(b)
be binding upon Pledgor and its successors,
transferees and assigns, and
(c)
inure, together with the rights and remedies of
Collateral Agent hereunder, to the benefit of Collateral Agent and
each other Lender Party.
Without limiting the foregoing clause (c), any Lender may assign or otherwise
transfer (in whole or in part) any Note or Loan held by it to any other Person
or entity, and such other Person or entity shall thereupon become vested with
all the rights and benefits in respect thereof granted to such Lender under any
Loan Document (including this Pledge Agreement) or otherwise, subject, however,
to any contrary provisions in such assignment or transfer, and to the
provisions of Section 8.8 of the Credit Agreements and Article VII of the
Credit Agreements. Upon the payment in full of all Secured Obligations and the
termination of all Commitments, the security interest granted herein shall
terminate and all rights to the Collateral shall revert to Pledgor. Upon any
such termination, Collateral Agent will, at Pledgor's sole expense, deliver to
Pledgor, without any representations, warranties or recourse of any kind
whatsoever, all certificates and instruments representing or evidencing all
Pledged Shares, together with all other Collateral held by Collateral Agent
hereunder, and execute and deliver to Pledgor such documents as Pledgor shall
reasonably request to evidence such termination.
SECTION 2.6.
Security Interest Absolute. All rights of Collateral
Agent and the security interests granted to Collateral Agent hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional,
irrespective of (a) any lack of validity or enforceability of the Credit
Agreements, any Note or any other Loan Document, (b) the failure of any Lender
Party or any holder of any Note, (i) to assert any claim or demand or to
enforce any right or remedy against Borrower, any other
Exhibit M - 7
169
Designated Entity or any other Person under the provisions of the Credit
Agreements, any Note, any other Loan Document or otherwise, or (ii) to exercise
any right or remedy against any other guarantor of, or collateral securing, any
Obligations of Borrower or any other Designated Entity, (c) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations or any other extension, compromise or renewal of any Obligation of
Borrower or any other Designated Entity, (d) any reduction, limitation,
impairment or termination of any Obligations of Borrower or any other
Designated Entity for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and Pledgor
hereby waives any right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligations of Borrower, any other
Designated Entity or otherwise, (e) any amendment to, rescission, waiver, or
other modification of, or any consent to departure from, any of the terms of
the Credit Agreements, any Note or any other Loan Document, (f) any addition,
exchange, release, surrender or non-perfection of any collateral (including the
Collateral), or any amendment to or waiver or release of or addition to or
consent to departure from any guaranty, for any of the Obligations, or (g) any
other circumstances which might otherwise constitute a defense available to, or
a legal or equitable discharge of, Borrower, any other Designated Entity, any
surety or any guarantor.
SECTION 2.7.
Waiver of Subrogation. Pledgor hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
Borrower or any other Designated Entity that arise from the existence, payment,
performance or enforcement of Pledgor's obligations under this Pledge Agreement
or any other Loan Document, including any right of subrogation, reimbursement,
exoneration, or indemnification, any right to participate in any claim or
remedy of Lender Parties against Borrower or any other Designated Entity or any
collateral which Collateral Agent now has or hereafter acquires, whether or not
such claim, remedy or right arises in equity, or under contract, statute or
common law, including the right to take or receive from Borrower or any other
Designated Entity, directly or indirectly, in cash or other property or by
set-off or in any manner, payment or security on account of such claim or other
rights. If any amount shall be paid to Pledgor in violation of the preceding
sentence and the Obligations shall not have been paid in cash in full and the
Commitments have not been terminated, such amount shall be deemed to have been
paid to Pledgor for the benefit of, and held in trust for, Lender Parties, and
shall forthwith be paid to Lender Parties to be credited and applied upon the
Obligations, whether matured or
Exhibit M - 8
170
unmatured. Pledgor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by the Credit Agreements
and that the waiver set forth in this Section is knowingly made in
contemplation of such benefits.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1.
Warranties, etc. Pledgor represents and warrants
unto each Lender Party, as at the date of each pledge and delivery hereunder
(including each pledge and delivery of Pledged Shares) by Pledgor to Collateral
Agent of any Collateral, as set forth in this Article.
SECTION 3.1.1.
Representations in Credit Agreement. Pledgor hereby
incorporates by reference, mutatis mutandi, each of the representations and
warranties made in Sections 4.1(a), (b), (c), (d) and (e) of the Credit
Agreement.
SECTION 3.1.2.
Ownership, No Liens, etc. Pledgor is the legal and
beneficial owner of, and has good title to (and has full right and authority to
pledge and assign) such Collateral, free and clear of all liens, security
interests, options, or other charges or encumbrances, except any lien or
security interest granted pursuant hereto in favor of Collateral Agent.
SECTION 3.1.3.
Valid Security Interest. The delivery of such
Collateral to Collateral Agent is effective to create a valid, perfected, first
priority security interest in such Collateral and all proceeds thereof,
securing the Secured Obligations. No filing or other action will be necessary
to perfect or protect such security interest.
SECTION 3.1.4.
As to Pledged Shares. In the case of any Pledged
Shares constituting such Collateral, all of such Pledged Shares are duly
authorized and validly issued, fully paid, and non-assessable, and constitute
65% of the issued and outstanding shares of capital stock of each Pledged Share
Issuer owned by Pledgor set forth across from the name of such Pledged Share
Issuer on Attachment 1 hereto. Pledgor has no Restricted Subsidiary other than
the Pledged Share Issuers.
SECTION 3.1.5.
Authorization, Approval, etc. Except as contemplated
by Section 2.3(b) and (c), no authorization, approval, or other action by, and
no notice to or filing with, any governmental authority, regulatory body or any
other Person is required either (a) for the pledge by Pledgor of any Collateral
pursuant to this Pledge Agreement or for the execution, delivery, and
performance of this Pledge Agreement by Pledgor, or (b) for the exercise by
Collateral Agent of the rights provided for in this Pledge Agreement, or,
except with
Exhibit M - 9
171
respect to any Pledged Shares, as may be required in connection with a
disposition of such Pledged Shares by laws affecting the offering and sale of
securities generally, the remedies in respect of the Collateral pursuant to
this Pledge Agreement.
ARTICLE IV
COVENANTS
SECTION 4.1.
Protect Collateral; Further Assurances, etc. Pledgor
will not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral (except in favor of Collateral Agent hereunder). Pledgor will
warrant and defend the right and title herein granted unto Collateral Agent in
and to the Collateral (and all right, title and interest represented by the
Collateral) against the claims and demands of all Persons whomsoever. Pledgor
agrees that at any time, and from time to time, at the expense of Pledgor,
Pledgor will promptly execute and deliver all further instruments, and take all
further action, that may be necessary or desirable, or that Collateral Agent
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Pledgor shall provide Collateral Agent with copies of all written
information received from any securities intermediary of Pledgor with respect
to any Collateral.
SECTION 4.2.
Stock Powers, etc. Pledgor agrees that all Pledged
Shares (and all other shares of capital stock constituting Collateral)
delivered by Pledgor pursuant to this Pledge Agreement will be accompanied by
duly indorsed undated blank stock powers, in substantially the form of
Attachment 2 hereto, or other equivalent instruments of transfer acceptable to
Collateral Agent. Pledgor will, from time to time upon the request of
Collateral Agent, promptly deliver to Collateral Agent such stock powers, in
substantially the form of Attachment 2, instruments and similar documents,
satisfactory in form and substance to Collateral Agent, with respect to the
Collateral as Collateral Agent may reasonably request and will, from time to
time upon the request of Collateral Agent after the occurrence of any Event of
Default, promptly transfer any Pledged Shares or other shares of common stock
constituting Collateral into the name of any nominee designated by Collateral
Agent.
SECTION 4.3.
Continuous Pledge. Subject to Section 2.4, the
Pledgor will, at all times, keep pledged to Collateral Agent pursuant hereto
all Pledged Shares, all other shares of capital stock constituting Collateral,
and all securities, security entitlements and securities accounts constituting
Collateral and all other Collateral and other securities, instruments, security
entitlements, financial assets, investment property, proceeds,
Exhibit M - 10
172
and rights from time to time received by or distributable to Pledgor in respect
of any Collateral.
SECTION 4.4.
Dividends, etc. Pledgor agrees after any
acceleration under the Credit Agreements or Default occurring on the Maturity
Date, promptly upon receipt thereof by Pledgor and without any request therefor
by Collateral Agent, to deliver (properly endorsed where required hereby or
requested by Collateral Agent) to Collateral Agent all Dividends,
Distributions, all interest, all principal, all other cash payments, and all
proceeds of the Collateral, all of which shall be held by Collateral Agent as
additional Collateral for use in accordance with Section 6.3. All Dividends,
Distributions, interest, principal, cash payments, and proceeds which may at
any time and from time to time be held by Pledgor but which Pledgor is then
obligated to deliver to Collateral Agent, shall, until delivery to Collateral
Agent, be held by Pledgor separate and apart from its other property in trust
for Collateral Agent.
SECTION 4.5.
Additional Undertakings. Pledgor will not, without
the prior written consent of Collateral Agent, take or omit to take any action
the taking or the omission of which would result in any impairment or
alteration of the security interest in the Pledged Shares.
ARTICLE V
COLLATERAL AGENT
SECTION 5.1.
Agent Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints Collateral Agent Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor or
otherwise, from time to time in Collateral Agent's discretion, to take any
action and to execute any writing or paper which Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Pledge Agreement,
including without limitation: (a) after the occurrence and continuance of an
Event of Default, to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral; (b) to receive, endorse, and
collect any drafts or other instruments, documents and chattel paper, in
connection with clause (a) above; and (c) to file any claims or take any action
or institute any proceedings which Collateral Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to enforce
the rights of Collateral Agent with respect to any of the Collateral. Pledgor
hereby acknowledges, consents and agrees that the power of attorney granted
pursuant to this Section is irrevocable and coupled with an interest.
Exhibit M - 11
173
SECTION 5.2.
Agent May Perform. If Pledgor fails to perform any
agreement contained herein, Collateral Agent may itself perform, or cause
performance of, such agreement, and the expenses of Collateral Agent incurred
in connection therewith shall be payable by Pledgor pursuant to Section 6.4.
SECTION 5.3.
Agent Has No Duty. The powers conferred on
Collateral Agent hereunder are solely to protect its interest (on behalf of
Lender Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
Collateral Agent shall have no duty as to any Collateral or responsibility for
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged Shares,
whether or not Collateral Agent has or is deemed to have knowledge of such
matters or (b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
SECTION 5.4.
Reasonable Care. Collateral Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
of the Collateral, if it takes such action for that purpose as Pledgor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure of Collateral Agent
to comply with any such request at any time shall not in itself be deemed a
failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1.
Certain Remedies. On or after any acceleration under
the Credit Agreements or Default occurring on the Maturity Date:
(a)
Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the U.C.C. (whether or not the U.C.C.
applies to the affected Collateral) and also may, without notice
except as specified below, sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any of Collateral
Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as Collateral Agent may deem
commercially reasonable. Pledgor agrees that, to the extent notice of
sale shall be required by law,
Exhibit M - 12
174
at least ten days' prior notice to Pledgor of the time and place of
any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. Collateral Agent shall not
be obligated to make any sale of Collateral regardless of notice of
sale having been given. Collateral Agent may adjourn any public or
private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(b)
Collateral Agent may (i) transfer all or any part of
the Collateral into the name of Collateral Agent or its nominee, with
or without disclosing that such Collateral is subject to the lien and
security interest hereunder, (ii) notify the parties obligated on any
of the Collateral to make payment to Collateral Agent of any amount
due or to become due thereunder, (iii) enforce collection of any of
the Collateral by suit or otherwise, and surrender, release or
exchange all or any part thereof, or compromise or extend or renew for
any period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto, (iv)
endorse any checks, drafts, or other writings in Pledgor's name to
allow collection of the Collateral, (v) take control of any proceeds
of the Collateral, and (vi) execute (in the name, place and stead of
Pledgor) endorsements, assignments, stock powers and other instruments
of conveyance or transfer with respect to all or any of the
Collateral.
SECTION 6.2.
Compliance with Restrictions. Pledgor agrees that in
any sale of any of the Collateral whenever an Event of Default shall have
occurred and be continuing, Collateral Agent is hereby authorized to comply
with any limitation or restriction in connection with such sale as it may be
advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and Pledgor further agrees that such compliance shall not result in such sale
being considered or deemed not to have been made in a commercially reasonable
manner, nor shall Collateral Agent be liable nor accountable to Pledgor for any
discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
Exhibit M - 13
175
SECTION 6.3.
Application of Proceeds. All cash proceeds received
by Collateral Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral may, in the discretion of
Collateral Agent, be held by Collateral Agent as additional collateral security
for, or then or at any time thereafter be applied (after payment of any amounts
payable to Collateral Agent pursuant to Sections 6.4 of the Credit Agreements)
in whole or in part by Collateral Agent against, all or any part of the Secured
Obligations in such order as Collateral Agent shall elect.
Any surplus of such cash or cash proceeds held by Collateral Agent and
remaining after payment in full of all the Secured Obligations, and the
termination of all Commitments, shall be paid over to Pledgor or to whomsoever
may be lawfully entitled to receive such surplus.
SECTION 6.4.
Indemnity and Expenses. Pledgor hereby indemnifies
and holds harmless Collateral Agent in accordance with Sections 6.4 of the
Credit Agreements.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1.
Loan Document. This Pledge Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
SECTION 7.2.
Amendments. No amendment to or waiver of any
provision of this Pledge Agreement, nor consent to any departure by Pledgor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
SECTION 7.3.
Protection of Collateral. Collateral Agent may from
time to time, at its option, perform any act which Pledgor agrees hereunder to
perform and which Pledgor shall fail to perform after being requested in
writing so to perform after the occurrence and continuance of an Event of
Default and Collateral Agent may from time to time take any other action which
Collateral Agent reasonably deems necessary for the maintenance, preservation
or protection of any of the Collateral or of its security interest therein.
SECTION 7.4.
Obligations Not Affected. The obligations of Pledgor
under this Pledge Agreement shall remain in full force and effect without
regard to, and shall not be impaired or affected by:
Exhibit M - 14
176
(a)
any amendment or modification or addition or
supplement to the Credit Agreements, any Note, any other Loan
Documents, any instrument delivered in connection therewith, or any
assignment or transfer thereof;
(b)
any exercise, non-exercise, or waiver by Collateral
Agent or any Lender of any right, remedy, power, or privilege under or
in respect of, or any release of any guaranty or collateral provided
pursuant to, this Pledge Agreement, the Credit Agreements, Pledgor's
Guaranty or any other Loan Document;
(c)
any waiver, consent, extension, indulgence, or other
action or inaction in respect of this Pledge Agreement, the Credit
Agreements, Pledgor's Guaranty or any other Loan Document or any
assignment or transfer of any thereof; or
(d)
any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation, or the like, of
Pledgor or any other Person, whether or not Pledgor shall have notice
or knowledge of any of the foregoing.
SECTION 7.5.
Notices. All notices, requests, consents, demands
and other communications required or permitted hereunder shall be in writing,
unless otherwise specifically provided herein and shall be deemed sufficiently
given or furnished if delivered by personal delivery, by telecopy (with
telephonic confirmation of transmission, by delivery service with proof of
delivery, or by registered or certified United States mail, postage prepaid, to
Pledgor at the address of Pledgor specified on the signature pages hereto and
to each Agent and each Lender at their addresses specified on the signature
pages to the Credit Agreements (unless changed by similar notice in writing
given by the particular Person whose address is to be changed). Any such
notice or communication shall be deemed to have been given: (a) in the case of
personal delivery service, as of the date of first attempted delivery at the
address provided herein; (b) in the case of telecopy, upon receipt; or (c) in
the case of registered or certified United States mail, three days after
deposit in the mail, postage prepaid.
SECTION 7.6.
No Waiver; Remedies. No failure on the part of any
Lender Party or any holder of a Note, an LC Application, or an interest in an
LC Obligation to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
Exhibit M - 15
177
SECTION 7.7.
Section Captions. Section captions used in this
Pledge Agreement are for convenience of reference only, and shall not affect
the construction of this Pledge Agreement.
SECTION 7.8.
Severability. Wherever possible each provision of
this Pledge Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Pledge Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Pledge Agreement.
SECTION 7.9.
Governing Law, Entire Agreement. THIS PLEDGE
AGREEMENT SHALL BE DEEMED A CONTRACT AND INSTRUMENT MADE UNDER THE LAWS OF THE
STATE OF TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF
AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THIS PLEDGE
AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING
AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.10.
Waiver of Jury Trial. EACH OF PLEDGOR, AGENTS AND
LENDERS HEREBY (a) IRREVOCABLY WAIVES, THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS PLEDGE AGREEMENT OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED
THEREWITH, BEFORE OR AFTER MATURITY; (b) IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
SUCH LITIGATION ANY EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES; (c) CERTIFIES
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY
HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS;
AND (d) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO AND ACCEPT THIS
PLEDGE AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION.
SECTION 7.11.
Forum Selection and Consent to Jurisdiction.
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
Exhibit M - 16
ANY
178
CONNECTION WITH, THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF LENDER PARTIES OR PLEDGOR SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF TEXAS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS; PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY BE BROUGHT, AT COLLATERAL
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH PROPERTY MAY BE
FOUND. PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF TEXAS AND THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF TEXAS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH
ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF TEXAS. FOR PURPOSES OF ANY ACTION OR PROCEEDING
INSTITUTED IN THE FEDERAL OR STATE COURTS OF TEXAS, THE UNDERSIGNED HEREBY
IRREVOCABLY DESIGNATES BORROWER WITH OFFICES ON THE DATE HEREOF AT 303 WEST
WALL STREET, SUITE 101, MIDLAND, TEXAS 79701 TO RECEIVE FOR AND ON BEHALF OF
THE UNDERSIGNED SERVICE OF PROCESS IN TEXAS. PLEDGOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, PLEDGOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS PLEDGE AGREEMENT.
THIS WRITTEN PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
Exhibit M - 17
179
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.
[Pledgor]
--------------------------------------By:
-----------------------------------Name:
Title:
Address:
303 West Wall
Suite 101
P. O. Box 3178
Midland, Texas 79701
Attention:
Telephone:
Telecopy:
Curt Kamradt
(915) 571-3171
(915) 571-5696
with a copy to:
Garrett Smith
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
Telephone:
Telecopy:
(972) 402-7013
(972) 402-7028
Exhibit M - 18
180
NATIONSBANK OF TEXAS, N.A.
By
-----------------------------Name:
Frank K. Stowers
Title:
Vice President
Address:
303 W. Wall
P. O. Box 1599
Midland, Texas 79701
Attention:
Frank K. Stowers
Exhibit M - 19
181
ACKNOWLEDGMENT
The undersigned hereby agrees and consents to the terms and provisions
of the foregoing Pledge Agreement, including, without limitation, Section 2.3
and Article IV of the Pledge Agreement. The undersigned hereby acknowledges
the registration on its books of the pledge and security interest created by
the Pledge Agreement in the manner required by Section 8-301(1)(b) of the
U.C.C. and that undersigned will not permit any sale, transfer, pledge or other
encumbrance of the Pledged Interests without the prior written consent of the
Agent.
-----------------------------By:
--------------------------Name:
Title:
Exhibit M - 20
182
ATTACHMENT 1
to
Pledge Agreement
Pledged Shares
Pledged Share Issuer
Outstanding
Shares
-------------
Shares
Delivered
-------------
-------------
-------------
Exhibit M - 21
183
ATTACHMENT 2
to
Pledge Agreement
STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________________________________________
(_______________________) shares of common stock in __________________________,
a _______________ corporation, represented by the attached Certificate No._____
herewith and do hereby irrevocably constitute and appoint _____________________
attorney to transfer the said stock on the books of ___________________________
with full power of substitution in the premises.
DATED ___________________________
[PLEDGOR]
-----------------------------By:
--------------------------Name:
Title:
IN PRESENCE OF
- ------------------------Exhibit M - 22
184
Exhibit N
Request for Competitive Bid Offer
_____________, ________
To:
The Lenders party to the Credit Agreement, NationsBank of Texas, N.A.,
as agent (the "Administrative Agent")
From:
_________________________ (the "Borrower")
Re:
Primary Credit Facility - Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower,
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders from time to time
parties thereto (the "Credit Agreement")
Pursuant to Section 2.22 of the Credit Agreement, we hereby request
Competitive Bid Offers for the following proposed Competitive Bid Advance(s):
Borrowing Date: _________________, ______
Principal Amount(1)
- -------------------
Requested Maturity Date(2)
--------------------------
$
Upon acceptance by the undersigned of any or all of the Competitive
Bid Offers tendered by Lenders in response to this request, the undersigned
shall be deemed to affirm as of the borrowing date thereof the representations
and warranties made by the Designated Entities in the Credit Agreement and the
other Loan Documents to the extent specified in Section 3.2 thereof (except to
the extent such representations and warranties relate solely to an earlier
date).
- -----------------------------(1) Amount must be at least $10,000,000 and an integral multiple of
$1,000,000.
(2) At least 15 and up to 360 days.
Exhibit N - 1
185
Capitalized terms used herein have the meanings assigned to
them in the Credit Agreement.
PIONEER NATURAL RESOURCES COMPANY
By:
--------------------------Name:
Title:
Exhibit N - 2
186
Exhibit O
Competitive Bid Offer
______________, ____
To:
____________________________
Attn: ___________________
Re:
Primary Credit Facility - Competitive Bid Offer to Pioneer Natural
Resources Company (the "Borrower")
In response to the Borrower's Request for Competitive Bid Offer dated
________, 199_, we hereby make the following Competitive Bid Offer pursuant to
Section 2.22 of the Credit Agreement hereinafter referred to and on the
following terms:
1.
Quoting Lender: _________________________________________
2.
Person to contact at Lender: ____________________________
3.
Borrowing Date: ____________, ______(1)
4.
We hereby offer to make Competitive Bid Advance(s) in the following
principal amounts, for the following periods and at the following
rates:
Principal
Amount(2)
- ---------
Maturity
Date(3)
-------
Competitive
Bid Rate(4)
-----------
$
- -----------------------------(1)
As specified in the related Request for Competitive Bid Offer.
(2)
Principal amount bid for each maturity date may not exceed the
principal amount requested. Bids must be made for at least
$10,000,000 or an integral multiple of $1,000,000 in excess thereof.
(3)
At least 15 and up to 360 days, as specified in the related Request
for Competitive Bid Offer.
(4)
Specify rate of interest per annum (rounded to the nearest 1/10,000
of 1%).
Exhibit O - 1
187
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in that certain Amended
and Restated Credit Facility Agreement dated as of December 18, 1997 by and
among Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), irrevocably obligates us to make the Competitive Bid
Advance(s) for which any offer(s) are accepted, in whole or in part.
Capitalized terms used herein and not otherwise defined herein shall have their
meanings as defined in the Credit Agreement.
Very truly yours,
[NAME OF BANK]
Dated:
,
-------------- ----Authorized Officer
Exhibit O - 2
By:
----------------------------
188
Exhibit P
Bid Acceptance
___________________, _____
To:
[Name of Lender]
Re:
Primary Credit Facility - Request for Competitive Bid Offer from
Pioneer Natural Resources Company (the "Borrower")
Pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (the "Credit Agreement"), we accept your
Competitive Bid Offer for the following proposed Competitive Bid Advance(s) and
reject any Competitive Bid Offer to the Competitive Bid Borrower not described
below:
Borrowing Date:
______________, ______
Principal Amount
- ----------------
Maturity Date
-------------
Competitive Bid Rate
--------------------
$
Capitalized terms used herein have the meanings assigned to them in the
Credit Agreement.
PIONEER NATURAL RESOURCES COMPANY
By:
-----------------------------Authorized Officer
Exhibit P - 1
189
Schedule 1
Schedule of Lenders' Commitments and Percentage Share
Schedule 1 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 1 - 1
190
Schedule 2
Disclosure Schedule
Schedule 2 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 2 - 1
191
Schedule 3
Schedule of Restricted Subsidiaries
Schedule 3 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 3 - 1
192
Schedule 4
Schedule of Insurance
Schedule 4 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 4 - 1
193
Schedule 5
Schedule of Security Instruments
Schedule 5 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 5 - 1
194
Schedule 6
Continuing Letters of Credit
Schedule 6 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 6 - 1
1
EXHIBIT 10.2
[364 DAY CREDIT FACILITY]
================================================================================
AMENDED AND RESTATED CREDIT FACILITY AGREEMENT
PIONEER NATURAL RESOURCES COMPANY,
as BORROWER,
and
NATIONSBANK OF TEXAS, N.A.,
as ADMINISTRATIVE AGENT,
and
CIBC INC.,
as DOCUMENTATION AGENT,
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as DOCUMENTATION AGENT,
and
THE CHASE MANHATTAN BANK,
as SYNDICATION AGENT,
THE CO-AGENTS SIGNATORY HERETO,
and
THE OTHER LENDERS SIGNATORY HERETO
as of December 18, 1997
$300,000,000
================================================================================
2
TABLE OF CONTENTS
Page
ARTICLE
Section
Section
Section
Section
Section
1
1.1
1.2
1.3
1.4
1.5
DEFINITIONS AND REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Amendment of Defined Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
References and Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Calculations and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Making the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Requests for Revolving Loan Advances . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Procedure for Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Provisions for Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . . .
Facility Fee; Amendment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Managing Agents' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Termination and Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . .
Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments to Lenders
. . . .
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.12
Extension of Maturity Date and of Commitments . . . . .
2.13
[Intentionally Omitted . . . . . . . . . . . . . . . .
2.14
[Intentionally Omitted . . . . . . . . . . . . . . . .
2.15
[Intentionally Omitted . . . . . . . . . . . . . . . .
2.16
Capital Reimbursement . . . . . . . . . . . . . . . . .
2.17
Increased Cost of Eurodollar Portions . . . . . . . . .
2.18
Availability . . . . . . . . . . . . . . . . . . . . .
2.19
Funding Losses . . . . . . . . . . . . . . . . . . . .
2.20
Taxes. . . . . . . . . . . . . . . . . . . . . . . . .
2.21
Make-Whole Qualifications . . . . . . . . . . . . . . .
2.22
Competitive Bid Advances . . . . . . . . . . . . . . .
27
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19
20
21
22
22
24
25
26
26
26
19
27
29
29
29
29
30
30
31
32
34
36
ARTICLE 3
Section 3.1
Section 3.2
CONDITIONS PRECEDENT TO LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Initial Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Additional Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
40
ARTICLE 4
Section 4.1
Section 4.2
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrower's Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 43
Representation by Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
43
i
3
TABLE OF CONTENTS
(Continued)
ARTICLE
Section
Section
Section
5
5.1
5.2
5.3
COVENANTS OF BORROWER
Affirmative Covenants
Negative Covenants .
Financial Covenants .
ARTICLE
Section
Section
Section
Section
6
6.1
6.2
6.3
6.4
EVENTS OF
Events of
Remedies
Annulment
Indemnity
DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . .
56
61
61
61
56
ARTICLE
Section
Section
Section
Section
Section
Section
Section
Section
Section
7
7.1
7.2
7.3
7.4
7.5
7.6
7.7
7.8
7.9
AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appointment and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Agent's Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lenders' Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rights as Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sharing of Set-Offs and Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefit of Article 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Resignation and Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . .
63
64
65
65
66
66
67
67
67
63
ARTICLE
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
8
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9
8.10
8.11
8.12
8.13
8.14
8.15
8.16
8.17
8.18
8.19
8.20
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Waivers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Survival of Agreements; Cumulative Nature . . . . . . . . . . . . . . . . . . . . . . . . .
Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Limitation on Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Termination; Limited Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assignments; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Waiver of Jury Trial, Punitive Damages . . . . . . . . . . . . . . . . . . . . . . . . . .
Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nonliability of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Release of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forum Selection and Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . .
Assumption of Prior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Renewal, Extension or Rearrangement . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . .
68
69
69
70
70
70
72
73
75
75
75
75
76
76
76
76
77
77
78
78
68
ii
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47
47
52
55
4
EXHIBITS AND SCHEDULES
Exhibits:
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
A-1
A-2
A-3
B
C
D
E
F
G
H
I
J
K-1
K-2
L
M
N
O
P
Q
-
Form of Loan Note
Form of Swing Line Note
Form of Competitive Bid Note
Form of Guaranty
Form of Request for Advance
Form of Rate Election
Form of Request for Swing Line Advance
Form of Swing Line Participation Certificate
[Intentionally omitted]
Forms of Opinion of Borrower's and Restricted Subsidiaries' Counsel
Organization Chart of Borrower and its Subsidiaries
Form of Designated Officer's Certificate
Form of Election to Convert
Form of Release
Form of Agreement to be Bound
Form of Pledge Agreement
Form of Request for Competitive Bid Offer
Form of Competitive Bid Offer
Form of Bid Acceptance
Form of Certificate of Extension
-
Schedule of Lenders' Commitments and Percentage Share
Disclosure Schedule
Schedule of Restricted Subsidiaries
Schedule of Insurance
Schedule of Security Instruments
Schedules:
Schedule
Schedule
Schedule
Schedule
Schedule
iii
1
2
3
4
5
5
AMENDED AND RESTATED CREDIT FACILITY AGREEMENT
THIS AMENDED AND RESTATED CREDIT FACILITY AGREEMENT is made as of
December 18, 1997 (together with all amendments, renewals, extensions and other
modifications, if any, from time to time hereafter made hereto, the "Agreement"
or "Credit Facility Agreement"), by and among PIONEER NATURAL RESOURCES
COMPANY, a Delaware corporation (the "Borrower"), and NATIONSBANK OF TEXAS,
N.A., CIBC INC., MORGAN GUARANTY TRUST COMPANY OF NEW YORK, THE CHASE MANHATTAN
BANK, in the capacities herein identified, the Co-Agents party hereto, and the
other Lenders from time to time parties hereto.
RECITALS:
A.
Reference is here made to that certain Credit Facility
Agreement - 364 Day Credit Facility, dated as of August 7, 1997, by and among
Pioneer USA, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Existing Credit Agreement") and the notes issued thereunder.
B.
Borrower has assumed effective as of the Effective Date (as
hereinafter defined) and hereby assumes, and Pioneer USA has assigned and
hereby assigns to Borrower, all of the indebtedness, obligations and
liabilities of Pioneer USA, evidenced by and outstanding under the Existing
Credit Agreement and all related instruments and documents (all such
indebtedness, obligations and liabilities under the Existing Credit Agreement
and/or such instruments and documents collectively, the "Prior Indebtedness").
C.
Borrower has determined that it is in its best interests to
assume the Prior Indebtedness and has voluntarily requested that Lenders, and
Lenders have agreed to, restructure, rearrange and renew the Prior Indebtedness
and the respective commitments of the Lenders and Agents party to the Existing
Credit Agreement into obligations and commitments hereunder.
D.
As a part of the restructuring and rearranging of the Prior
Indebtedness, Lenders shall modify their respective commitments under the
Credit Agreement such that on the Effective Date each Lender shall be obligated
hereunder, subject to the terms hereof, to the Loan Commitment stated on
Schedule 1 for such Lender.
E.
Any Loans outstanding under the Existing Credit Agreement on
the Effective Date bearing interest at a Eurodollar Rate shall be deemed
continued as a Loan under this Agreement at such Eurodollar Rate and for the
Eurodollar Interest Period with respect thereto under the Existing Credit
Agreement.
6
F.
Any Competitive Bid Advances outstanding under the Existing
Credit Agreement on the Effective Date shall be deemed continued as a
Competitive Bid Advance under this Agreement at the rate and for the term with
respect thereto under the Existing Credit Agreement.
G.
Lenders and Borrower intend and have agreed to amend and
restate the Existing Credit Agreement in its entirety as and pursuant to this
Agreement.
NOW, THEREFORE, in consideration of the Recitals hereof and the mutual
covenants contained herein, the parties hereby agree to amend and restate the
Existing Credit Agreement in its entirety as follows:
ARTICLE 1
DEFINITIONS AND REFERENCES
Section 1.1
Defined Terms. As used in this Agreement, each of
the following terms has the meaning given it in this Section or in the sections
and subsections referred to below:
"Accepting Lenders" is defined in Section 2.12(c).
"Acquisition Agreement" has the meaning given it in Section 3.1(e).
"Acquisition" has the meaning given it in Section 3.1(e).
"Adjusted Eurodollar Rate" means, with respect to each particular
Eurodollar Portion and the associated Eurodollar Rate and Reserve Percentage,
the rate per annum determined hereunder by Administrative Agent on a daily
basis pursuant to the following formula:
AER
=
---------1.00 - RP
AER
ER
RP
EM
=
=
=
=
ER
+ EM
Adjusted Eurodollar Rate
Eurodollar Rate
Reserve Percentage
Eurodollar Margin
The Adjusted Eurodollar Rate shall change as and when the associated Reserve
Percentage and Eurodollar Margin change.
"Administrative Agent" means NationsBank of Texas, N.A., as
Administrative Agent hereunder and its successors and assigns in such capacity.
"Advance" means any Revolving Loan Advance, Competitive Bid Advance or Swing
Line Advance.
2
7
"Affiliate" means, as to any Person, each other Person that directly
or indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person.
"Agent" means any of the Managing Agents or the Collateral Agent
hereunder, solely in such capacities and not in their respective capacities as
Lenders.
"Agreement" means this Amended and Restated Credit Facility Agreement,
as this Amended and Restated Credit Facility Agreement may be amended, modified
or restated from time to time hereafter.
"Agreement to be Bound" means an agreement to be bound entered into by
a Lender and an assignee (with the consent of any party whose consent is
required by Section 8.8), and accepted by the Administrative Agent, in
substantially the form of Exhibit L or any other form approved by the
Administrative Agent.
"Amendment Fee Rate" means 2.5 basis points.
"Applicable Rating Level" means the level set forth below that
corresponds to the highest of ratings issued from time to time by Moody's and
S&P, as applicable to Borrower's senior unsecured long-term debt:
Moody's
------Level I
S&P
-->Baa1
>BBB+
Level II
Baa1
BBB+
Level III
Level IV
Baa2
Baa3
BBB
BBB-
<Baa3
<BBB-
Level V
For example, if the Moody's rating is Baa1 and the S&P rating is BBB, Level II
shall apply.
For purposes of the foregoing, (i) ">" means a rating more favorable
than; "<" means a rating less favorable than; (ii) if ratings for Borrower's
senior unsecured long-term debt shall not be available from S&P or Moody's,
Level V shall be deemed applicable; (iii) if any of the Rating Agencies shall
change its ratings nomenclature prior to the date all Obligations have been
paid and the Commitments canceled, Borrower and the Lenders shall negotiate in
good faith to amend the references to specific ratings in this definition to
reflect such change, and pending such amendment, if an appropriate Applicable
Rating Level is otherwise not determinable based upon the foregoing grid, the
last Applicable Rating Level in effect at the time of such change shall
continue to apply.
3
8
"Base Rate" means the fluctuating per annum rate of interest from time
to time in effect equal to the higher of (a) the rate of interest as publicly
announced by Administrative Agent as its "Prime Rate" or (b) the Federal Funds
Rate plus one-half of one percent ( 1/2 of 1%), whether or not Borrower has
notice thereof. Such rate is set by Administrative Agent as a general rate of
interest, taking into account such factors as Administrative Agent may deem
appropriate, it being understood that many of 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
Administrative Agent may make various commercial or other loans at rates of
interest having no relationship to such rate. If Administrative Agent's Prime
Rate or the Federal Funds Rate changes after the date hereof, the Base Rate
shall be automatically increased or decreased, as the case may be, without
prior notice to Borrower from time to time as of the effective time of each
change in Administrative Agent's Prime Rate or the Federal Funds Rate. The
Administrative Agent shall promptly thereafter notify Borrower of such change
in the Base Rate.
"Base Rate Portion" means that portion of the unpaid principal balance
of a Loan which is not made up of Eurodollar Portions, Swing Line Advances or
Competitive Bid Advances.
"Bid Acceptance" means a Bid Acceptance substantially in the form of
Exhibit P hereto with appropriate insertions.
"Borrower" is defined in the Preamble hereto.
"Business Day" means a day on which commercial banks are open for
business with the public in the State of Texas. Any Business Day in any way
relating to Eurodollar Portions (such as the day on which a Eurodollar Interest
Period begins or ends) must also be a day on which, in the reasonable, good
faith judgment of Administrative Agent, significant transactions in dollars are
carried out in the interbank eurocurrency market.
"Canadian Credit Facility" means that certain Credit Facility
Agreement, dated as of December 18, 1997, among Chauvco, as Borrower, Canadian
Imperial Bank of Commerce, as Arranger and Administrative Agent, Bank of Nova
Scotia, as Co-Syndication Agent, Royal Bank of Canada, as Co-Syndication Agent,
The Chase Manhattan Bank of Canada, as Co-Agent, Morgan Guaranty Trust Company
of New York, as Co-Agent, NationsBank of Texas, N.A., as Co-Agent, The
Toronto-Dominion Bank, as Co-Agent, and the Lenders party thereto, as such
agreement may be amended, modified or restated from time to time.
"Certificate of Extension" means a certificate of Borrower, executed
by a Designated Officer and delivered to the Administrative Agent, in
substantially the form of Exhibit Q, which requests an extension of the then
scheduled Maturity Date pursuant to Section 2.12.
"Chauvco" means Chauvco Resources Ltd., a corporation organized under
the laws of the Province of Alberta, Canada.
"Co-Agent" means each of Bank of America National Trust and Savings
Association, The Bank of New York, The Bank of Nova Scotia, Royal Bank of
Canada, Union Bank of California,
4
9
N.A., The Fuji Bank, Limited - Houston Agency, and Wells Fargo Bank, N.A., as
Co-Agents, and their respective successors and assigns in such capacity.
"Collateral Agent" means NationsBank of Texas, N.A., as collateral
agent under the Security Instruments and its successors and assigns in such
capacity.
"Commitment" means, with respect to each Lender, such Lender's Loan
Commitment.
"Competitive Bid Advances" has the meaning given it in Section 2.22.
"Competitive Bid Note" has the meaning given it in Section 2.22.
"Competitive Bid Obligations" means, at the particular time in
question, the sum of all outstanding Competitive Bid Advances.
"Competitive Bid Offer" has the meaning given it in Section 2.22.
"Competitive Bid Rate" has the meaning given it in Section 2.22.
"Consolidated" refers to the consolidation of any Person, in
accordance with GAAP, with its properly consolidated Subsidiaries. References
herein to a Person's Consolidated financial statements, financial position,
financial condition, or liabilities refer to the consolidated financial
statements, financial position, financial condition or liabilities, as the case
may be, of such Person and its properly consolidated Subsidiaries.
"Consolidated Interest Expense" is defined in Section 5.3(a).
"Credit Facility Agreement" means this Amended and Restated Credit
Facility Agreement, as this Amended and Restated Credit Facility Agreement may
be amended, modified or restated from time to time hereafter.
"Debt" of any Person means, without duplication:
(a)
indebtedness of such Person for borrowed money;
(b)
indebtedness of such Person constituting an obligation to pay
the deferred purchase price of property or services (other
than customary payment terms taken in the ordinary course of
such Person's business);
(c)
indebtedness of such Person evidenced by a bond, debenture,
note or similar instrument;
(d)
principal obligations under leases capitalized in accordance
with GAAP under which such Person is the lessee;
5
10
(e)
indebtedness, contingent or otherwise, of such Person with
respect to bankers' acceptances or the face amount of letters
of credit or applications or reimbursement agreements
therefor;
(f)
guaranties of such Person of indebtedness or obligations of
the type described in clauses (a), (b), (c), (d) or (e) above
of any other Person or obligations to purchase or acquire or
to otherwise protect or insure a creditor against loss in
respect of indebtedness or obligations of the type described
in clauses (a), (b), (c), (d) or (e) above of any other
Person, but excluding endorsements in the ordinary course of
business of negotiable instruments in the course of
collection;
(g)
indebtedness or obligations of the type described in clauses
(a), (b), (c), (d) or (e) above, which are secured by a Lien
on any property owned by such Person, whether or not such
indebtedness or obligations have been assumed by such Person
(limited however to the lesser of (1) the amount of its
liability or (2) the value of such property); and
(h)
the undischarged balance of any production payment created by
such Person or for the creation of which such Person directly
or indirectly received payment;
provided, however, Debt shall not include (1) accounts payable incurred in the
ordinary course of such Person's business, or (2) any obligations in respect of
(i) exchange, forward, future, swap, hedging or similar agreements and (ii)
prepayments for gas or oil production or gas or oil imbalances.
"Declining Lenders" is defined in Section 2.12(c).
"Default" means any Event of Default and any default, event or
condition which would, with the giving of any requisite notices and the passage
of any requisite periods of time, constitute an Event of Default.
"Default Rate" means, at the particular time in question, two percent
(2%) per annum plus the Base Rate then in effect; provided, that, with respect
to any Eurodollar Portion with an Eurodollar Interest Period extending beyond
the date such Eurodollar Portion becomes due and payable, "Default Rate" shall
mean, during such Eurodollar Interest Period, two percent (2%) per annum plus
the related Eurodollar Rate and plus the applicable Eurodollar Margin.
"Designated Entity" means Borrower and each of the Restricted
Subsidiaries.
"Designated Officer" means any Executive Officer or any other
individual duly elected to and holding one or more of the offices of vice
president, managing director, executive director, secretary or assistant
secretary of a Designated Entity, or any other Person authorized in writing by
any Designated Entity to execute any Loan Document, in each case designated by
a Designated Entity and acceptable to Required Lenders.
6
11
"Disclosure Schedule" means (a) Schedule 2 hereto and (b) any
documents listed on such schedule and expressly incorporated therein by
reference, true and correct copies of which shall have been delivered to
Managing Agents and each other Lender prior to the date hereof. Insofar as any
representations and warranties made herein are incorporated by reference or
otherwise remade in Loan Documents delivered as of a date after the date
hereof, the term "Disclosure Schedule" shall in such representations and
warranties be deemed to refer as well to all other documents indicated by
Borrower to be part of the Disclosure Schedule and which Borrower has at the
particular time in question delivered to the Managing Agents, the Co-Agents and
each other Lender and which have not been promptly objected to in writing by or
on behalf of the Required Lenders.
"Documentation Agent" means each of CIBC Inc. and Morgan Guaranty
Trust Company of New York, as Documentation Agents, and their respective
successors and assigns in such capacity.
"EBITDAX" is defined in Section 5.3(a).
"Effective Date" means the date the parties hereto shall have executed
and delivered counterparts hereof to Administrative Agent and Administrative
Agent shall have notified the parties hereto that the Effective Date shall have
occurred.
"Environmental Law" means any federal, state, or local statute, or
rule or regulation promulgated thereunder, any judicial or administrative order
or judgment to which Borrower, or any of its Subsidiaries is a party or which
are applicable to Borrower or any of its Subsidiaries or its or their
respective properties (whether or not by consent), and any provision or
condition of any permit, license or other governmental operating authorization,
relating to protection of the environment, persons or the public welfare from
actual or potential exposure or the effects of exposure to any actual or
potential release, discharge, spill or emission (whether past or present) of,
or regarding the manufacture, processing, production, gathering,
transportation, importation, use, treatment, storage or disposal of, any
chemical, raw material, pollutant, contaminant or toxic or hazardous substance
or waste.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.
"ERISA Plan" means any pension benefit plan subject to Title IV of
ERISA maintained by any Designated Entity or any Affiliate thereof with respect
to which any Designated Entity has a fixed or contingent liability.
"Eurodollar Interest Period" means, with respect to each particular
Eurodollar Portion, a period of one (1), two (2), three (3) or six (6) months,
or, subject to Section 2.3, a period of nine (9) or twelve (12) months, as
specified in the Rate Election applicable thereto, beginning on and including
the date specified in such Rate Election (which must be a Business Day), and
ending on but not including the same day of the relevant month as the day on
which it began (e.g., a period beginning on the third day of one month shall
end on but not include the third day of another month), or if such month has no
numerically corresponding day, on the last Business Day of such month, and
provided that each Eurodollar Interest Period which would otherwise end on a
day
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which is not a Business Day shall end on the next succeeding Business Day
(unless such next succeeding Business Day is the first Business Day of a
calendar month, in which case such Eurodollar Interest Period shall end on the
immediately preceding Business Day). No Eurodollar Interest Period may be
elected for any Eurodollar Portion which would extend past the Maturity Date of
the Loan of which the Eurodollar Portion is a part.
"Eurodollar Margin" means, on any date, with respect to each
Eurodollar Portion of a Revolving Loan, the number of basis points per annum
set forth below based on the Applicable Rating Level on such date:
Applicable
Rating Level
-----------Level I
Eurodollar
Margin
-----20.0 b.p.
Level II
22.0 b.p.
Level III
25.0 b.p.
Level IV
30.0 b.p.
Level V
47.0 b.p.
Changes in the Eurodollar Margin will occur automatically without prior notice.
Administrative Agent will give notice promptly to Borrower and the Lenders of
changes in the Eurodollar Margin.
"Eurodollar Portion" means the unpaid principal balance of a Loan
which Borrower designates as such in a Rate Election.
"Eurodollar Rate" means, with respect to each particular Eurodollar
Portion within a Tranche and with respect to the related Eurodollar Interest
Period, the rate of interest per annum (stated to the nearest 10,000ths of 1%)
determined by Administrative Agent in accordance with its customary general
practices to be representative of the rates (stated to the nearest 10,000ths of
1%) at which deposits of dollars are offered to Administrative Agent at
approximately 10:00 a.m., Dallas, Texas time, two Business Days prior to the
first day of such Eurodollar Interest Period by prime banks in the interbank
eurocurrency market which have been selected by Administrative Agent in
accordance with its customary general practices for delivery on the first day
of such Eurodollar Interest Period in an amount equal or comparable to the
amount of Administrative Agent's Eurodollar Portion within such Tranche and for
a period of time equal or comparable to the length of such Eurodollar Interest
Period. The Eurodollar Rate determined by Administrative Agent with respect to
a particular Eurodollar Portion shall be fixed at such rate for the duration of
the associated Eurodollar Interest Period. If Administrative Agent is unable
so to determine the Eurodollar Rate for any Eurodollar Portion, Borrower shall
be deemed not to have elected such Eurodollar Portion.
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"Eurodollars" is defined in Section 2.18.
"Event of Default" has the meaning given it in Section 6.1.
"Exchangeable Shares" has the meaning set forth in the Proxy.
"Executive Officer" means any individual duly elected to and holding
one or more of the following offices of Borrower: President, Chief Executive
Officer, Chief Financial Officer, Executive Vice President or Senior Vice
President.
"Existing Credit Agreement" has the meaning given it in Recital A.
"Facility Amount" means the aggregate amount of the Commitments (which
amount shall initially be $300,000,000), as such amount may be reduced from
time to time pursuant to the terms of this Agreement.
"Facility Fee Rate" means, on any date that a facility fee is due
pursuant to Section 2.7, the number of basis points per annum set forth below
based on the Applicable Rating Level on such date:
Applicable
Rating Level
-----------Level I
Facility Fee Rate
Margin
-----7.0 b.p.
Level II
8.0 b.p.
Level III
10.0 b.p.
Level IV
12.0 b.p.
Level V
18.0 b.p.
Changes in the Facility Fee Rate will occur automatically without prior notice.
Administrative Agent will give notice promptly to Borrower and the Lenders of
changes in the Facility Fee Rate.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day, as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to
Administrative Agent on such day on such transactions as determined by
Administrative Agent.
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"Fiscal Quarter" means a three-month period ending on March 31, June
30, September 30 or December 31 of each year.
"Fiscal Year" means a twelve-month period ending on December 31 of
each year.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary of the
Borrower organized under the laws of any jurisdiction other than the United
States or any state thereof.
"GAAP" means those generally accepted accounting principles and
practices which are recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor) and which, in the case of
Borrower and its Consolidated Subsidiaries, are applied for all periods after
the date hereof in a manner consistent with the manner in which such principles
and practices were applied to the Updated Financial Statements (except for
changes concurred with by Borrower's independent public accountants). If any
change in any accounting principle or practice is required by the Financial
Accounting Standards Board (or any such successor) in order for such principle
or practice to continue as a generally accepted accounting principle or
practice, all reports and financial statements required hereunder with respect
to Borrower or with respect to Borrower and its Consolidated Subsidiaries must
be prepared in accordance with such change. In the event any changes in GAAP
materially affect the calculation of Borrower's EBITDAX to Consolidated
Interest Expense Ratio or Consolidated Total Funded Debt to Total
Capitalization as defined and described in Sections 5.3 (a) and (b),
respectively, Borrower and Lenders agree to enter into good faith negotiations
for an agreement to revise such tests to take into account such changes in
GAAP; until Borrower and Majority Lenders have entered into such an agreement,
such financial calculation shall continue to be made in accordance with GAAP as
in effect immediately preceding the date of such change.
"Governmental Authority" means any national, state, county or
municipal government, domestic or foreign, any agency, board, bureau,
commission, court, department or other instrumentality of any such government,
or any arbitrator in any case which has jurisdiction over any of the Lenders,
Borrower, its Subsidiaries or any properties of Borrower or its Subsidiaries.
"Guaranty" means (i) any guaranty substantially in the form of Exhibit
B, with appropriate insertions and deletions, executed or to be executed by any
Restricted Subsidiary, as from time to time amended, modified, or supplemented,
or (ii) any Guaranty delivered pursuant to Section 3.1(a)(1) of the Agreement
as from time to time amended, modified, or supplemented, as the case may be.
"Incumbent Directors" has the meaning given in Section 6.1(i).
"Lenders" means each party hereto (other than Borrower), including,
without limitation, NationsBank of Texas, N.A. in its capacity as a Lender
hereunder rather than as Administrative Agent or Collateral Agent, CIBC Inc. in
its capacity as a Lender hereunder rather than as Documentation Agent, Morgan
Guaranty Trust Company of New York in its capacity as a Lender hereunder rather
than as Documentation Agent, The Chase Manhattan Bank in its capacity as a
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15
Lender hereunder rather than as Syndication Agent, the Co-Agents in their
capacity as Lenders hereunder rather than as Co-Agents, and the successors and
assigns of each as holder of a Note.
"Lien" means, any lien, mortgage, security interest, pledge, deposit,
production payment, encumbrance, rights of a vendor under any title retention
or conditional sale agreement or lease or other arrangement substantially
equivalent thereto.
"Loan" means any of a Revolving Loan, Competitive Bid Advance or Swing
Line Advance, as the context requires.
"Loan Commitment" means, with respect to each Lender, the amount set
forth as such Lender's Loan Commitment opposite the name of such Lender in the
column headed "New Commitment" or otherwise indicated on Schedule 1 attached
hereto (or, if such Lender is an assignee, the amount of its Loan Commitment
set forth in the assignment pursuant to which it became a Lender) as such
amount may be reduced or increased from time to time pursuant to any assignment
to which it is a party or otherwise pursuant to the terms of this Agreement.
"Loan Commitment Period" means the period from and including the date
hereof until and including the Maturity Date (or, if earlier, the day on which
the Loan Notes first become due and payable in full or the Loan Commitments are
terminated upon notice by Administrative Agent to Borrower pursuant to Section
6.1).
"Loan Documents" means this Credit Facility Agreement, as the same may
have been or may be amended from time to time hereafter, the Notes, the Swing
Line Participation Certificate, the Guaranties, the Disclosure Schedule, the
Security Instruments, the agreements with the Managing Agents referred to in
Section 2.8, any amendments to any of the foregoing, and all other agreements,
certificates, notices and disclosures at any time executed or certified by a
Designated Officer of and on behalf of a Designated Entity and delivered by
such Designated Entity or such Designated Officer in connection herewith or
therewith (exclusive of term sheets, commitment letters, correspondence and
similar documents used in the negotiation hereof or thereof).
"Loan Note" has the meaning given it in Section 2.1(c).
"Majority Lenders" means Lenders whose aggregate Percentage Shares
exceed 50%.
"Managing Agents" means Administrative Agent, each Documentation Agent
and the Syndication Agent hereunder and their successors and assigns in such
capacities.
"Margin Regulations" means, as applicable, Regulations G, U and X of
the Board of Governors of the Federal Reserve System, as from time to time in
effect.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the financial condition of Borrower and its Subsidiaries taken as a whole, (b)
the ability of Borrower and its Subsidiaries taken as a whole to operate their
respective businesses, (c) the ability of Borrower to meet its obligations
under the Loan Documents on a timely basis or (d) the ability of Designated
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16
Entities taken as a whole to meet their obligations under the Loan Documents on
a timely basis; provided, however, that a material adverse effect that is
limited to an Unrestricted Subsidiary shall not (i) be a Material Adverse
Effect or (ii) be included in the determination of whether a Material Adverse
Effect shall have occurred or shall be expected to occur.
"Maturity Date" means the Original Maturity Date, or such other later
date as may result from any extension requested by Borrower and consented to by
the Lenders pursuant to Section 2.12.
"Maximum Lawful Rate" has the meaning given it in Section 8.6.
"Mesa" means Mesa, Inc., a Delaware corporation.
"Moody's" means Moody's Investors Service, Inc. and any successor
thereto that is a nationally-recognized rating agency.
"Section 956" has the meaning given it in Section 6.1(k).
"Note" means any Loan Note, Swing Line Note or Competitive Bid Note.
"Notice Period" has the meaning given it in Section 6.4.
"Obligations" means all Debt from time to time owing by any of
Designated Entities to any Agent or any Lender under or pursuant to any of the
Loan Documents, including, without limitation, all Swing Line Obligations and
Competitive Bid Obligations. "Obligation" means any part of the Obligations.
"Original Maturity Date" means the earlier of (a) August 5, 1998 and
(b) the date on which the Loan Commitment of each Lender is reduced to zero or
terminated.
"Outside Debt" means (i) Pioneer USA's $150,000,000 8 7/8% Senior
Notes due 2005 which obligations thereunder will be transferred to Borrower
pursuant to the Restructuring, (ii) Pioneer USA's $150,000,000 8 1/4% Senior
Notes due 2007 which obligations thereunder will be transferred to Borrower
pursuant to the Restructuring, (iii) Mesa's 10 5/8% Senior Subordinated Notes
due 2006 which obligations thereunder will be transferred to Borrower pursuant
to the Restructuring, and (iv) Mesa's 11 5/8% Senior Subordinated Discount
Notes due 2006 which obligations thereunder will be transferred to Borrower
pursuant to the Restructuring.
"P&P Petroleum" means Parker & Parsley Petroleum Company, a Delaware
corporation.
"Percentage Share" means, with respect to any Lender (a) when used in
Section 2.1 or 2.3, in any Request for Advance or when no Loans (other than
Swing Line Advances or Competitive Bid Advances, if applicable) are outstanding
hereunder, the percentage set forth opposite such Lender's name on Schedule 1
to this Agreement, or in documents of assignment delivered pursuant to Section
8.8, as such percentage may be adjusted from time to time by such assignment
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17
documents and (b) when used otherwise, the percentage equal to the unpaid
principal balance of such Lender's Loans, other than Swing Line Advances and
Competitive Bid Advances, at the particular time in question divided by the
aggregate unpaid principal balance of all Loans of all Lenders, other than
Swing Line Advances and Competitive Bid Advances, at such time.
"Permitted Liens" means (a) Liens for taxes, assessments or other
governmental charges or levies if the same shall not at the particular time in
question be due and delinquent or (if foreclosure, distraint, sale or other
similar proceedings shall not have been commenced or, if commenced, shall have
been stayed) are being contested in good faith and by appropriate proceedings,
and if the subject Borrower shall have set aside on its books such reserves
(segregated to the extent required by sound accounting practices) as may be
required by GAAP or otherwise determined by the Board of Directors of Borrower
to be adequate with respect thereto; (b) Liens of carriers, warehousemen,
mechanics, laborers, materialmen, landlords, vendors, workmen, and operators
arising in the ordinary course of business or incident to the exploration,
development, operations and maintenance of oil, gas and other hydrocarbon
properties and related facilities and assets, for sums not yet due or being
contested in good faith and by appropriate proceedings, if Borrower shall have
set aside on its books such reserves (segregated to the extent required by
sound accounting practices) as may be required by GAAP or otherwise determined
by the Board of Directors of Borrower to be adequate with respect thereto; (c)
Liens incurred in the ordinary course of Designated Entities' respective
businesses in connection with worker's compensation, unemployment insurance and
other social security legislation (other than ERISA); (d) Liens incurred in the
ordinary course of Designated Entities' businesses to secure the performance of
bids, tenders, trade contracts, leases (statutory only), statutory obligations,
surety and appeal bonds, performance and return-of-money bonds and other
obligations of a like nature; (e) Liens, easements, rights-of-way restrictions,
servitudes, permits, conditions, covenants, exceptions, reservations and other
similar encumbrances incurred in the ordinary course of Designated Entities'
businesses or existing on property and not in the aggregate materially
interfering with the ordinary conduct of Designated Entities' businesses; (f)
legal or equitable encumbrances deemed to exist by reason of negative pledges
such as in Section 5.2 of this Agreement or the existence of any litigation or
other legal proceeding and any related lis pendens filing (excluding any
attachment prior to judgment, judgment lien or attachment lien in aid of
execution on a judgment); (g) rights of a common owner of any interest in
property held by any Designated Entity as such common owner; (h) farmout,
carried working interest, joint operating, unitization, royalty, overriding
royalty, sales and similar agreements relating to the exploration or
development of, or production from, oil and gas properties incurred in the
ordinary course of business, (i) Liens arising pursuant to Section 9.319 of the
Texas Uniform Commercial Code or other similar statutory provisions of other
states with respect to production purchased from others; (j) Liens represented
by capital leases permitted under this Agreement; (k) any defects,
irregularities, or deficiencies in title to easements, rights-of-way or other
properties which do not in the aggregate have a Material Adverse Effect; (l)
Liens existing pursuant to the Security Instruments; (m) Liens existing in
favor of Agents and Lenders under the Loan Documents; (n) Liens on assets of a
Subsidiary of Borrower in favor of Borrower or another Restricted Subsidiary;
(o) Liens on any property or assets owned or leased by Borrower or any
Subsidiary existing at the time such property or asset was acquired (or at the
time such Person became a Subsidiary); provided that (1) in the case of the
acquisition of a Subsidiary, such lien only encumbers property or assets of
such Subsidiary immediately prior to or at the time of
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acquisition by Borrower of such Subsidiary and (2) Borrower will use its best
efforts to eliminate such Liens in a timely manner; (p) purchase money Liens,
so long as such Liens only encumber property or assets (including any
improvements thereon, accessions thereto or proceeds thereof) acquired with the
proceeds of purchase money indebtedness incurred in connection with such Lien;
(q) Liens on the stock or other ownership interest of or in any Unrestricted
Subsidiary; (r) Liens in renewal or extension of any of the foregoing permitted
Liens, so long as limited to the property or assets encumbered and the amount
of indebtedness secured immediately prior to such renewal or extension; and (s)
Liens approved in writing by or on behalf of the Required Lenders.
"Person" means an individual, corporation, company, partnership,
association, joint stock company, trust or trustee thereof, estate or executor
thereof, unincorporated organization or joint venture, court or governmental
unit or any agency or subdivision thereof, or any other legally recognizable
entity.
"Pioneer Canada" means Pioneer Natural Resources (Canada) Ltd., a
corporation organized under the laws of the Province of Alberta, Canada.
"Pioneer USA" means Pioneer Natural Resources USA, Inc., a Delaware
corporation.
"Pledge Agreement" means a Pledge Agreement substantially in the form
of Exhibit M hereto, or other form of pledge agreement or deed of mortgage, in
form and substance satisfactory to the Managing Agents and the subject
Designated Entity, pledging an interest in the capital shares or stock of,
partnership interests in, or other ownership interest in, a Restricted
Subsidiary as from time to time amended, modified and supplemented.
"Primary Credit Facility" means that certain Amended and Restated
Credit Facility Agreement, dated as of December 18, 1997, among Pioneer Natural
Resources Company, as Borrower, NationsBank of Texas, N.A., as Administrative
Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New
York, as Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders party thereto, as such agreement
may be amended, modified or restated from time to time.
"Prior Indebtedness" has the meaning given it in Recital B.
"Proxy" has the meaning given it in Section 4.1(f)(ii).
"Rate Election" has the meaning given it in Section 2.3.
"Rating Agencies" means any or all of S&P or Moody's.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as from time to time in effect.
"Replacement Lenders" is defined in Section 2.12(c)(ii).
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19
"Request for Advance" means a written or telephonic request, or a
written confirmation, made by a Borrower which meets the requirements of
Section 2.2.
"Request for Competitive Bid Offer" has the meaning given it in
Section 2.22.
"Request for Swing Line Bid" has the meaning given it in Section
2.5(a).
"Required Lenders" means Lenders whose aggregate Percentage Shares exceed
66 2/3%.
"Reserve Percentage" means, on any day with respect to each particular
Eurodollar Portion in a Tranche, the maximum reserve requirement, as determined
by Administrative Agent (including without limitation any basic, supplemental,
marginal, emergency or similar reserves), expressed as a percentage and rounded
to the nearest 1/100th of 1%, which would then apply to Administrative Agent
under Regulation D or successor regulations issued from time to time by the
Board of Governors of the Federal Reserve System with respect to "Eurocurrency
liabilities" (as such term is defined in Regulation D) equal in amount to
Administrative Agent's Eurodollar Portion in such Tranche, were Administrative
Agent to have any such Eurocurrency liabilities. If such reserve requirement
shall change after the date hereof, the Reserve Percentage shall be
automatically increased or decreased, as the case may be, from time to time as
of the effective time of each such change in such reserve requirement.
"Restricted Payment" means any investment, contribution, loan or
advance of cash to a Person (other than (i) Borrower or (ii) a Subsidiary that
is not an Unrestricted Subsidiary), other than:
(a)
prudent short-term investments;
(b)
investments, contributions, loans or advances disclosed in the
Updated Financial Statements or in the Disclosure Schedule or
in disclosures made subsequent to the date hereof and
consented to in writing by or on behalf of the Majority
Lenders or otherwise made to effect the Acquisition and the
subsequent restructuring of certain of the Restricted
Subsidiaries, as described in the Acquisition Agreement;
(c)
investments, contributions, loans or advances made by any
Designated Entity in the ordinary course of its business; or
(d)
contributions made by Borrower to any of its Subsidiaries
arising out of or in respect of Letters of Credit (as defined
in the Primary Credit Facility) issued under the Primary
Credit Facility and used for the general corporate purposes of
such Subsidiary (i) so long as no amounts have been drawn
under any such Letter of Credit or (ii) to the extent that
Borrower has been reimbursed by such Subsidiary for amounts
drawn under any such Letter of Credit.
"Restricted Subsidiary" means each Subsidiary of Borrower that, at the
particular time in question, (i) owns directly or indirectly any material
assets or any interest in any other Restricted
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20
Subsidiary and (ii) either (a) has not been designated as an Unrestricted
Subsidiary or (b) has been redesignated as a Restricted Subsidiary. The
Restricted Subsidiaries on the Effective Date are listed on Schedule 3 attached
hereto and each other Subsidiary of Borrower as of the Effective Date shall be
an Unrestricted Subsidiary. A Restricted Subsidiary shall remain such (even if
it no longer owns directly or indirectly any interest in any of the material
assets) until designated as an Unrestricted Subsidiary pursuant to Section
5.2(i). An Unrestricted Subsidiary shall remain an Unrestricted Subsidiary
unless redesignated as a Restricted Subsidiary pursuant to the provisions of
Section 5.2(i).
"Restructuring" has the meaning given it in Section 5.2(l).
"Revolving Loan" has the meaning given it in Section 2.1(c).
"Revolving Loan Advance" has the meaning given it in Section 2.1(a).
"S&P" means Standard & Poor's Ratings Group and any successor thereto
that is a nationally-recognized rating agency.
"Security Instruments" shall mean the agreements or instruments
described or referred to in Schedule 5, the Guaranties, the Pledge Agreement,
and any and all other agreements or instruments now or hereafter executed and
delivered by any Designated Entity or any other Person in connection with, or
as security for the payment or performance of, the Notes, this Agreement or the
Guaranties, as any such instrument or agreement may be supplemented, amended,
renewed, extended or restated from time to time.
"Stock Pledge Release Date" has the meaning given to it in Section
8.16.
"Subsidiary" means, with respect to any Person, any corporation, which
is directly or indirectly (through one or more intermediaries) controlled by or
with respect to which fifty percent (50%) or more of the stock having ordinary
voting power to elect the board of directors is owned by such Person, or any
association, partnership, joint venture, or other non-corporate business
entity, enterprise or organization which is directly or indirectly (through one
or more intermediaries) controlled by, or owned one hundred percent (100%) by,
such Person, provided that associations, joint ventures or other relationships
(a) which are established pursuant to an operating agreement or similar
agreement or which are partnerships for purposes of federal income taxation
only, (b) which are not partnerships (or subject to the Uniform Partnership
Act) under applicable state law, and (c) whose businesses are limited to the
exploration, development and operation of oil, gas or mineral properties and
interests owned directly by the parties in such associations, joint ventures or
relationships, shall not be deemed to be "Subsidiaries" of such Person.
"Swing Line Advances" has the meaning given it in Section 2.4.
"Swing Line Lender" means NationsBank of Texas, N.A., its successors
and assigns.
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21
"Swing Line Note" has the meaning given it in Section 2.5(e).
"Swing Line Obligations" means, at the particular time in question,
the sum of all outstanding Swing Line Advances.
"Swing Line Participation Certificate" means a Swing Line
Participation Certificate substantially in the form of Exhibit "F".
"Swing Line Rate" has the meaning given it in Section 2.5(a).
"Syndication Agent" means The Chase Manhattan Bank, as Syndication
Agent hereunder and its successors and assigns in such capacity.
"Taxes" has the meaning given it in Section 2.20.
"Termination Event" means (a) the occurrence with respect to any ERISA
Plan of (1) a reportable event described in Sections 4043(b)(5) or (6) of ERISA
or (2) any other reportable event described in Section 4043(b) of ERISA other
than a reportable event not subject to the provision for 30-day notice to the
Pension Benefit Guaranty Corporation pursuant to a waiver by such corporation
under Section 4043(a) of ERISA, or (b) the withdrawal of any Designated Entity
or of any Affiliate of any Designated Entity from an ERISA Plan during a plan
year in which it was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA, or (c) the filing of a notice of intent to terminate any ERISA Plan
or the treatment of any ERISA Plan amendment as a termination under Section
4041 of ERISA, or (d) the institution of proceedings to terminate any ERISA
Plan by the Pension Benefit Guaranty Corporation under Section 4042 of ERISA,
or (e) 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 ERISA Plan.
"364 Day Credit Facility" means the facility for loans established
pursuant to this Agreement.
"Total Capitalization" means the sum (without duplication) of (i)
Consolidated Total Funded Debt of Borrower and its Subsidiaries, plus (ii)
Consolidated shareholder's equity of Borrower and its Subsidiaries.
"Total Funded Debt" means all Debt of the type referred to in clauses
(a), (b), (c), (d), (g) (excluding Debt of the type referred to in clause (e)
of the definition of "Debt") and (h) of the definition of "Debt".
"Tranche" has the meaning given it in Section 2.3.
"Unrestricted Subsidiary" means each Subsidiary of Borrower which is
not designated as a Restricted Subsidiary on Schedule 3 attached hereto or is
designated by Borrower as an Unrestricted Subsidiary pursuant to Section
5.2(i).
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"Updated Financial Statements" means (a) the audited annual
Consolidated financial statements of P&P Petroleum and its Consolidated
Subsidiaries dated as of December 31, 1996, (b) the audited annual Consolidated
financial statements of Mesa and its Consolidated Subsidiaries dated as of
December 31, 1996, and (c) the unaudited Consolidated financial statements and
unaudited consolidating balance sheets and statements of operations of Borrower
and its Consolidated Subsidiaries prepared in reasonable detail in accordance
with GAAP and dated as of September 30, 1997.
Section 1.2
Exhibits and Schedules. All Exhibits and Schedules
attached to this Agreement are a part hereof for all purposes.
Section 1.3
Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein, the terms defined in
this Agreement which refer to a particular agreement, instrument or document
also refer to and include all renewals, extensions, modifications, amendments
and restatements of such agreement, instrument or document, provided that
nothing contained in this Section shall be construed to authorize or require
any such renewal, extension, modification, amendment or restatement.
Section 1.4
References and Titles. All references in this
Agreement to Exhibits, Schedules, articles, sections, subsections and other
subdivisions refer to the Exhibits, Schedules, articles, sections, subsections
and other subdivisions of this Agreement unless expressly provided otherwise.
Titles appearing at the beginning of any subdivisions are for convenience only
and do not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this
Agreement", "this 364 Day Credit Facility", "364 Day Credit Facility", "this
instrument", "herein", "hereof", "hereby", "hereunder" and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited. The phrases "this section" and "this subsection"
and similar phrases refer only to the sections or subsections hereof in which
such phrases occur. The word "or" is not exclusive, and the word "including"
(in its various forms) means "including without limitation". Pronouns in
masculine, feminine and neuter genders shall be construed to include any other
gender, and words in the singular form shall be construed to include the plural
and vice versa, unless the context otherwise requires.
Section 1.5
Calculations and Determinations. All calculations
under the Loan Documents of interest chargeable with respect to Eurodollar
Portions and Competitive Bid Advances shall be made on the basis of actual days
elapsed (including the first day but excluding the last) and a year of 360
days, subject, however, to the limitations set forth in Section 8.6 hereof.
All other calculations of interest and fees made under the Loan Documents shall
be made on the basis of actual days elapsed (including the first day but
excluding the last) and a year of 365 or 366 days, as appropriate. Unless
otherwise expressly provided herein or unless Required Lenders otherwise
consent, all financial statements and reports furnished to Administrative Agent
or any other Lender hereunder shall be prepared and all financial computations
and determinations pursuant hereto shall be made in accordance with GAAP.
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ARTICLE 2
LOANS
Section 2.1
Making the Loans.
(a)
Subject to the terms and conditions hereof, each Lender agrees
to make advances on a revolving basis (herein a "Revolving
Loan Advance") to Borrower from time to time on any Business
Day during the Loan Commitment Period, equal to such Lender's
Percentage Share of the aggregate amount of Revolving Loan
Advances requested by Borrower to be made on such day, so long
as the aggregate amount of (i) all Lenders' Revolving Loan
Advances (including any Revolving Loan Advances to be made but
not yet made pursuant to a Request for Advance) outstanding at
any time plus (ii) all Swing Line Advances to Borrower plus
(iii) all Lenders' Competitive Bid Advances outstanding at
such time, does not exceed the Facility Amount. Subject to
the terms and conditions hereof, Borrower may borrow, repay
and reborrow Revolving Loan Advances.
(b)
No Lender shall be permitted or required to make any Revolving
Loan Advance under this Agreement unless the aggregate of (1)
such Lender's Revolving Loan Advances under this Agreement
(including any Revolving Loan Advances to be made but not yet
made pursuant to a Request for Advance) outstanding at any
time is less than or equal to the least of (i) such Lender's
Loan Commitment or (ii) such Lender's Percentage Share of the
Facility Amount plus (2) such Lender's participation pursuant
to a Swing Line Participation Certificate in any Swing Line
Advances, if any.
(c)
The aggregate amount of all Revolving Loan Advances requested
of all Lenders in any Request for Advance must be an integral
multiple of $1,000,000 which equals or exceeds $10,000,000 or
must equal the least of the unadvanced portion of the
aggregate Loan Commitments of all Lenders or the unadvanced
portion of the Facility Amount. The obligation of Borrower to
repay to each Lender the aggregate amount of all Revolving
Loan Advances made by such Lender to Borrower (herein called
such Lender's "Revolving Loan"), together with interest
accruing in connection therewith, shall be evidenced by a
single promissory note (herein called such Lender's "Loan
Note") made by Borrower payable to the order of such Lender in
the form of Exhibit A-1 with appropriate insertions. The
amount of principal owing on any Lender's Loan Note at any
given time shall be the aggregate amount of all Revolving Loan
Advances theretofore made by such Lender minus all payments of
principal theretofore received by such Lender on such Loan
Note. Interest on each Loan Note shall accrue and be due and
payable as provided herein and therein.
Section 2.2
Requests for Revolving Loan Advances. Borrower must
give to Administrative Agent not later than 11:00 a.m., Dallas, Texas time, for
same day funding, and not
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later than 1:00 p.m., Dallas, Texas time, for next Business Day funding,
written notice, or telephonic notice promptly confirmed in writing, of any
requested Revolving Loan Advances, after which Administrative Agent shall give
each other Lender prompt notice thereof. Each such written request or
confirmation must be made in the form and substance of Exhibit C attached
hereto, duly completed (herein called a "Request for Advance"). Each such
telephonic request shall be deemed a representation, warranty, acknowledgment
and agreement by Borrower as to the matters which are required to be set out in
such written confirmation. If all conditions precedent to a Revolving Loan
Advance have been met, each Lender will on the date requested remit, not later
than 1:00 p.m., Dallas, Texas time, for same day funding, and not later than
11:00 a.m., Dallas, Texas time, the following Business Day for next Business
Day funding, to Administrative Agent at Administrative Agent's office in
Dallas, Texas, or to such other office as Administrative Agent may specify from
time to time by notice to Lenders, the amount of such Lender's Revolving Loan
Advance in immediately available funds, and upon receipt of such funds, unless
to its actual knowledge any conditions precedent to such Revolving Loan
Advances have been neither met nor waived as provided herein, Administrative
Agent shall promptly make the Revolving Loan Advances available to Borrower.
Each Request for Advance shall be irrevocable and binding on Borrower. Unless
Administrative Agent shall have received prompt notice from a Lender that such
Lender will not make available to Administrative Agent such Lender's Revolving
Loan Advance, Administrative Agent may in its discretion assume that such
Lender has made such Revolving Loan Advance available to Administrative Agent
in accordance with this Section and Administrative Agent may if it chooses, in
reliance upon such assumption, make such Revolving Loan Advance available to
Borrower. If and to the extent such Lender shall not so make its Revolving
Loan Advance available to Administrative Agent, such Lender and Borrower
severally agree to pay or repay to Administrative Agent on demand the amount of
such Revolving Loan Advance together with interest thereon, for each day from
the date such amount is made available to Borrower until the date such amount
is paid or repaid to Administrative Agent, (i) if paid or repaid by Borrower at
the interest rate applicable at the time to the other Revolving Loan Advances
made on such date of such Revolving Loan Advance and (ii) if paid or repaid by
such Lender, at the Federal Funds Rate. The failure of any Lender to make any
Revolving Loan Advance to be made by it hereunder shall not relieve any other
Lender of its obligation hereunder, if any, to make its Revolving Loan Advance,
but no Lender shall be responsible for the failure of any other Lender to make
any Revolving Loan Advance to be made by such other Lender.
Section 2.3
Rate Elections. Borrower may from time to time
designate all or any portions of the Loans (including any yet to be made
Revolving Loan Advances which are to be made prior to or at the beginning of
the designated Eurodollar Interest Period but excluding any portions of the
Loans which are required to be repaid prior to the end of the designated
Eurodollar Interest Period and excluding any Competitive Bid Advance and any
Swing Line Advance) as a "Tranche", which term refers to a set of Eurodollar
Portions of the same type with identical Eurodollar Interest Periods and with
each Lender participating in such Tranche in accordance with its Percentage
Share. Without the consent of Required Lenders, Borrower may not make such
election, and Administrative Agent and Lenders shall not be required to give
effect to such election, during the continuance of a Default and Borrower may
make such an election with respect to already existing Eurodollar Portions only
if such election will take effect at or after the termination of the Eurodollar
Interest Period applicable thereto. Each election by Borrower of a Tranche
shall:
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(a)
Be made in writing in the form and substance of Exhibit D
attached hereto, duly completed, herein called a "Rate
Election";
(b)
Specify the aggregate amount of the Loans which Borrower
desires to designate as such Tranche, the first day of the
Eurodollar Interest Period which is to apply thereto, and the
length of such Eurodollar Interest Period; and
(c)
Be received by Administrative Agent not later than 10:00 a.m.,
Dallas, Texas time, on the third Business Day preceding the
first day of the specified Eurodollar Interest Period.
Promptly after receiving any such Rate Election which meets the
requirements of this Section, Administrative Agent shall notify each Lender
thereof. Each Rate Election shall be irrevocable. Borrower may not make any
Rate Election which does not specify an Eurodollar Interest Period complying
with the definition of "Eurodollar Interest Period" in Section 1.1, and the
aggregate amount of the Tranche elected in any Rate Election must be
$10,000,000 or a higher integral multiple of $1,000,000. Upon the termination
of each Eurodollar Interest Period the portion of each Loan within the related
Tranche shall, unless the subject of a new Rate Election then taking effect,
automatically become a part of the Base Rate Portion of such Loan and become
subject to all provisions of the Loan Documents governing such Base Rate
Portion. Borrower shall have no more than fifteen (15) Tranches in effect at
any time.
If requested to do so by Borrower through Administrative Agent at
least two (2) Business Days before the delivery date of any proposed Rate
Election, each Lender will advise Administrative Agent before 10:00 a.m.,
Dallas, Texas time, on the Business Day following receipt of such request as to
whether, if Borrower selects a specified duration of nine (9) or twelve (12)
months for the Eurodollar Interest Period applicable to such proposed Rate
Election, such Lender expects that deposits in dollars with a corresponding
term will be available to it in the relevant market on the first day of such
Eurodollar Interest Period in the amount required to fund the Eurodollar
Portion of its Loan to which such Eurodollar Interest Period would apply.
Unless a Lender responds by such time to the effect that it expects such
deposits will be available to it, Borrower shall not be entitled to select such
proposed duration for such Eurodollar Interest Period.
Each Lender may, if it so elects, fulfill its obligation to fund any
Eurodollar Portion by causing one of its foreign branches or Affiliates (or an
international banking facility created by such Lender) to fund or continue such
Eurodollar Portion; provided, however, that such Eurodollar Portion shall be
deemed to have been made and held by such Lender, and the obligations of the
subject Borrower to repay such Eurodollar Portion shall nevertheless be to such
Lender for the account of such branch, or Affiliate (or international banking
facility). In addition, Borrower hereby consents and agrees that, for purposes
of any determination to be made for purposes of Sections 2.17, 2.18, 2.19 and
2.20, it shall be conclusively assumed that such Lender elected to fund all
Eurodollar Portions by purchasing Dollar deposits in the interbank eurodollar
market of its designated office.
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Section 2.4
Swing Line Advances. In addition to borrowings
pursuant to Section 2.1(a) or Section 2.22, Borrower may request Swing Line
Lender to make advances to Borrower on any Business Day (unless Borrower and
Swing Line Lender agree otherwise) during the Loan Commitment Period as
provided in Sections 2.5 and 2.6 (herein called "Swing Line Advances");
provided, however, that (a) at no time shall the outstanding aggregate
principal amount of all Swing Line Advances under this Agreement plus all
"Swing Line Advances" (as defined in the Primary Credit Facility), if any,
outstanding under the Primary Credit Facility exceed $50,000,000, and (b) at no
time shall the sum of (1) the outstanding aggregate principal amount of all
Swing Line Advances to Borrower, (2) the outstanding aggregate principal amount
of the Revolving Loans, and (3) the outstanding aggregate principal amount of
all Competitive Bid Advances, exceed the Facility Amount.
Section 2.5
Procedure for Swing Line Advances.
(a)
No later than 11:00 a.m., Dallas, Texas time, on a Business
Day on which Borrower desires a Swing Line Advance, Borrower
shall transmit to Swing Line Lender) and to Administrative
Agent by telecopy a notice in substantially the form of
Exhibit E attached hereto (herein called a "Request for Swing
Line Loan"). Swing Line Lender will specify the rate of
interest per annum which will be the fixed rate of interest to
be charged for such Swing Line Advance until maturity (herein
called the "Swing Line Rate").
(b)
Swing Line Lender shall wire the Swing Line Advance in
immediately available funds by no later than 1:00 p.m.,
Dallas, Texas time on the date of request for Swing Line
Advance, on such day to Administrative Agent, which shall
deposit such funds to an account designated by Borrower by no
later than 1:15 p.m. on the same day.
(c)
Borrower shall repay each such Swing Line Advance on or before
1:00 p.m., Dallas, Texas time, on the following Business Day
or at such other maturity (such date of maturity being no more
than fourteen (14) days after the date of the Swing Line
Advance and no later than the Maturity Date) as is agreed to
by Borrower, Administrative Agent and the Swing Line Lender.
The repayment shall be paid on such date by Borrower (which
payment may be in the form of a Swing Line Advance advanced to
Borrower on that day) to Administrative Agent in immediately
available funds with instructions to Administrative Agent to
forward such proceeds to the Swing Line Lender. Any accrued
and unpaid interest pursuant to Swing Line Advances shall be
paid by Borrower (which payment may be in the form of a Swing
Line Advance advanced to Borrower on that day) to
Administrative Agent in immediately available funds on the
first Business Day of each calendar month with instructions to
Administrative Agent to forward such proceeds to the Swing
Line Lender.
(d)
Interest on the Swing Line Advances shall be computed on the
basis of a year of 365 or 366 days and actual days elapsed
(including the first day, but excluding the
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last day) occurring in the period for which payable and shall
not exceed Maximum Lawful Rate. Past due principal and
interest (to the extent allowed by law) shall bear interest at
the lesser of the Default Rate or the Maximum Lawful Rate and
shall be payable on demand.
(e)
The Swing Line Advances made by the Swing Line Lender shall be
evidenced by a single promissory note of Borrower payable to
the order of the Swing Line Lender in the amount of
$50,000,000 and in substantially the form of Exhibit A-2
attached hereto, with appropriate insertions (herein called a
"Swing Line Note"). The date, amount, Swing Line Rate and
maturity of each Swing Line Advance made by a Lender to
Borrower, and each payment made on account of the principal
thereof, shall be recorded by such Lender on its books.
(f)
The Swing Line Advances will be used by Borrower to provide
working capital for the operations of Borrower and its
Subsidiaries and for general business purposes. No Swing Line
Advances shall be used for the purpose of purchasing or
carrying any Margin Stock in violation of the Margin
Regulations.
(g)
The obligation of the Swing Line Lender to make each Swing
Line Advance after timely acceptance by Borrower is further
subject to the conditions contained in Article 3.
Section 2.6
(a)
Special Provisions for Swing Line Advances.
Lenders to Make Revolving Loan Advances.
(i)
Swing Line Lender, at any time in its discretion,
upon written request to Lenders through Administrative Agent (with a
copy to Borrower), may require each Lender (including the Swing Line
Lender) to make a Revolving Loan Advance, subject to the provisions of
Section 2.1 hereof, in an amount equal to such Lender's Percentage
Share of the outstanding Swing Line Advances. Swing Line Lender shall
deliver such request to Administrative Agent prior to 11:00 a.m.,
Dallas, Texas time, on the Business Day next preceding the date (which
shall be a Business Day) on which such Revolving Loan Advances are to
be made. Promptly upon receipt of any such request, Administrative
Agent shall give notice thereof to Lenders. Each Lender shall make
available its Percentage Share of such Revolving Loans to
Administrative Agent by 11:00 a.m., Dallas, Texas time, on the
requested date for such Revolving Loan Advances. Administrative Agent
shall apply the proceeds of such Revolving Loan Advances to prepay the
Swing Line Advances of the Swing Line Lender; provided, however, that
Administrative Agent shall be obligated to make the proceeds of such
Revolving Loans available only to the extent received by it from
Lenders. All Revolving Loans made pursuant to this subsection shall be
Base Rate Loans.
(ii)
In the event Administrative Agent advances proceeds
of any Revolving Loan to Swing Line Lender and one or more of the
Lenders (other than Swing Line Lender) fail to fund all or any portion
of such Revolving Loan Advance immediately upon receipt of
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notice from Administrative Agent, then (I) such Lender shall pay
directly to Administrative Agent the amount thereof together with
interest thereon at the Federal Funds Rate, and (II) if not paid by
such Bank, the Swing Line Lender will repay directly to Administrative
Agent such amount as will equal the amount such other Lender(s) failed
to fund, together with interest at the Federal Funds Rate.
(b)
Participations in Swing Line Advances.
(i)
If, at any time prior to the making of Revolving
Loans pursuant to subsection 2.6(a)(i) hereof, any Event of Default
described in Sections 6.1(h) hereof shall have occurred, each Lender,
on the date such Revolving Loan Advance was to have been made or, if
no request for Revolving Loan Advances had been made pursuant to
Section 2.6(a)(i) hereof, promptly upon request by the Swing Line
Lender delivered to Administrative Agent, shall purchase an undivided
participation interest in all outstanding Swing Line Advances in an
amount equal to its Percentage Share times the outstanding amount of
such Swing Line Advances. Each Lender (other than the Swing Line
Lender) will transfer immediately to Administrative Agent for credit
to Swing Line Lender, in immediately available funds, the amount of
its participation. Upon receipt thereof, the Swing Line Lender will
deliver to such other Lender a Swing Line Advance Participation
Certificate, dated the date of receipt of such funds and in the amount
of such Lender's participation.
(ii)
Whenever, at any time after the Swing Line Lender has
received from any other Lender such other Lender's participating
interest in a Swing Line Advance, the Swing Line Lender receives any
payment on account thereof, Administrative Agent will distribute to
such other Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender's participating interest
was outstanding and funded); provided, however, that in the event that
any payment received by Swing Line Lender is required to be returned,
such other Lender will return to Swing Line Lender any portion thereof
previously distributed to it.
(c)
Acknowledged Privity. Borrower expressly agrees that, in
respect of each Lender's funded participation interest in any Swing Line
Advance, such Lender shall be deemed to be in privity of contract with Borrower
and have the same rights and remedies against Borrower under the Loan Documents
as if such funded participation interest in such Swing Line Advance were a
Revolving Loan.
(d)
Unconditional Obligation. Each Lender's obligation to make
Revolving Loan Advances or to purchase participation interests in Swing Line
Advances as provided in this Section shall be absolute and unconditional and
shall not be affected by any circumstance, including without limitation, (A)
any set-off, counterclaim, recoupment, defense or other right which such Lender
may have against Swing Line Lender, Borrower or any other Person for any reason
whatsoever, (B) the existence of any Default or Event of Default at any time,
(C) the occurrence of any event or existence of any condition that might have a
Material Adverse Effect, or (D) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
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Section 2.7
Facility Fee; Amendment Fee. In consideration of
each Lender's commitment to make Revolving Loan Advances and Competitive Bid
Advances, Borrower will pay, or cause the payment, to Administrative Agent for
the account of each Lender an annual facility fee payable to each Lender
determined by applying the Facility Fee Rate to such Lender's Percentage Share
of the Facility Amount as of the date of such payment, payable in arrears
quarterly until the Maturity Date, with the first payment thereof to be January
1, 1998, subsequent payments on the first day following each successive
calendar quarter ending on each March, June, September and December, and the
final payment thereof on the Maturity Date. Borrower will pay, or cause the
payment, to Administrative Agent for the account of each Lender a
non-refundable amendment fee payable to each Lender determined by applying the
Amendment Fee Rate to such Lender's Percentage Share of the Facility Amount as
of the Effective Date.
Section 2.8
Managing Agents' Fees. In addition to all other
amounts due to the Managing Agents under the Loan Documents, Borrower will pay
the non-refundable annual fees set forth in those certain Fee Letters dated
June 25, 1997.
Section 2.9
Termination and Reduction of Commitments.
(a)
Unless previously terminated, the Commitments shall terminate
on the Maturity Date.
(b)
Borrower may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $1,000,000 and not less
than $5,000,000 and (ii) Borrower shall not terminate or reduce the Commitments
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.10, the sum of (i) all Lenders' Revolving Loan Advances
(including any Revolving Loan Advances to be made but not yet made pursuant to
a Request for Advance) outstanding at any time plus (ii) all Swing Line
Advances to Borrower plus (iii) all Lenders' Competitive Bid Advances
outstanding at such time, would exceed the total Commitments.
(c)
Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section at
least two 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 Borrower pursuant to
this Section shall be irrevocable; provided that a notice of termination of the
Commitments delivered by Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice
may be revoked by Borrower (by notice to the Administrative Agent on or prior
to the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments shall be permanent. Each reduction
of the Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments.
Section 2.10
Optional Prepayments. Borrower may, upon notice to
each Lender identical to that required for related borrowings under this
Agreement, from time to time and without premium or penalty, prepay its Notes,
in whole or in part, so long as the aggregate amounts of all
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partial prepayments of principal concurrently paid on such Notes equals
$5,000,000 or any higher integral multiple of $1,000,000 or the aggregate
outstanding balance of the Loans, and so long as Borrower does not prepay any
Revolving Loan Advance, Competitive Bid Advance or Swing Line Advance except in
accordance herewith. Any amounts prepaid pursuant to this Section shall be in
addition to, and not in lieu of, all payments otherwise required to be paid
under the Loan Documents at the time of such prepayment.
Section 2.11
Payments to Lenders. Except as expressly set forth
in Section 2.5(c) with respect to repayment of Swing Line Advances and Section
2.22(b) with respect to repayment of Competitive Bid Advances, Borrower will
make each payment which it owes under the Loan Documents to Administrative
Agent at its principal banking office in Dallas, Texas, or to such other office
as Administrative Agent may specify from time to time by notice to Borrower for
the account of each Lender to whom such payment is owed, without the
application of any setoff, deduction or counterclaim. Each such payment must
be received by Administrative Agent not later than 1:00 p.m., Dallas, Texas
time, on the date such payment becomes due and payable, in lawful money of the
United States of America and in immediately available funds. Any payment
received by Administrative Agent after such time will be deemed to have been
made on the next Business Day. Should any such payment become due and payable
on a day other than a Business Day, the maturity of such payment shall be
extended to the next succeeding Business Day (except, with respect to any
Eurodollar Portion, as may be otherwise required by the definition of
Eurodollar Interest Period), and, in the case of a payment of principal or past
due interest, interest shall accrue and be payable thereon for the period of
such extension as provided in the Loan Document under which such payment is
due.
All payments applied to principal or interest on any Note shall be
applied first to any interest then due and payable, then to principal then due
and payable, and last to any prepayment of principal and interest in compliance
with Section 2.10. Unless otherwise expressly provided, all payments by any
Designated Entity pursuant to this Agreement or any other Loan Document shall
be made by such Designated Entity to Administrative Agent for account of Agents
and Lenders pro rata among Obligations of the same type and, if applicable,
having the same Eurodollar Interest Period or, in the case of Swing Line
Advances or Competitive Bid Advances, the same maturity date.
Section 2.12
Extension of Maturity Date and of Commitments.
(a)
Subject to the other provisions of this Agreement and provided
that no Event of Default has occurred and is continuing, the total Commitments
shall be effective for an initial period from the Effective Date to the
Original Maturity Date; provided that the Maturity Date, and concomitantly the
total Commitments, may be extended for successive 364 day periods expiring on
the date which is 364 days from the then scheduled Maturity Date. If Borrower
shall request in a Certificate of Extension delivered to the Administrative
Agent not more than 60 days and not less than 45 days prior to the Maturity
Date that the Maturity Date be extended for 364 days from the then scheduled
Maturity Date, then the Administrative Agent shall promptly notify each Lender
of such request and each Lender shall notify the Administrative Agent, no later
than 30 days prior to the Maturity Date, whether such Lender, in the exercise
of its sole discretion, will extend the
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Maturity Date for such 364 day period. Any Lender which shall not timely
notify the Administrative Agent whether it will extend the Maturity Date shall
be deemed to not have agreed to extend the Maturity Date. No Lender shall have
any obligation whatsoever to agree to extend the Maturity Date. Any agreement
to extend the Maturity Date by any Lender shall be irrevocable, except as
provided in clause (c) of this Section.
(b)
If all Lenders notify the Administrative Agent pursuant to
clause (a) of this Section of their agreement to extend the Maturity Date, then
the Administrative Agent shall so notify each Lender and Borrower, and such
extension shall be effective without other or further action by any party
hereto for such additional 364 day period.
(c)
If Lenders constituting at least the Majority Lenders approve
the extension of the then scheduled Maturity Date (such Lenders agreeing to
extend the Maturity Date herein called the "Accepting Lenders") and if one or
more Lenders shall notify, or be deemed to notify, the Administrative Agent
pursuant to clause (a) of this Section that they will not extend the then
scheduled Maturity Date (such Lenders herein called the "Declining Lenders"),
then (A) the Administrative Agent shall promptly so notify Borrower and the
Accepting Lenders, (B) the Accepting Lenders shall, upon Borrower's election to
extend the then scheduled Maturity Date in accordance with clause (i) or (ii)
below, extend the then scheduled Maturity Date and (C) Borrower shall, pursuant
to a notice delivered to the Administrative Agent, the Accepting Lenders and
the Declining Lenders, no later than the tenth (10th) day following the date by
which each Lender is required, pursuant to clause (a) of this Section, to
approve or disapprove the requested extension of the total Commitments, either:
(i)
elect to extend the Maturity Date with respect to the
Accepting Lenders and direct the Declining Lenders to terminate their
Commitments, which termination shall become effective on the date
which would have been the Maturity Date except for the operation of
this Section. On such date, (x) Borrower shall deliver a notice of
the effectiveness of such termination to the Declining Lenders with a
copy to the Administrative Agent and (y) Borrower shall pay in full in
immediately available funds all Obligations of Borrower owing to the
Declining Lenders, including any amounts required pursuant to Section
2.19, and (z) upon the occurrence of the events set forth in clauses
(x) and (y), the Declining Lenders shall each cease to be a Lender
hereunder for all purposes, other than for purposes of Sections 2.16
through 2.20 and Section 6.4, and shall cease to have any obligations
or any Commitment hereunder, other than to the Agents pursuant to
Article 7, and the Administrative Agent shall promptly notify the
Accepting Lenders and Borrower of the new Commitments; or
(ii)
elect to extend the Maturity Date with respect to the
Accepting Lenders and, prior to or no later than the then scheduled
Maturity Date, (A) to replace one or more of the Declining Lender or
Declining Lenders with another lender or lenders reasonably acceptable
to the Administrative Agent or any Accepting Lender (such lenders
herein called the "Replacement Lenders") and (B) Borrower shall pay in
full in immediately available funds all Obligations of Borrower owing
to any Declining Lenders which are not being replaced, as provided in
clause (i) above; provided that (x) the Replacement Lender or
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Replacement Lenders shall purchase, and the Declining Lender or
Declining Lenders shall sell, the Declining Lender's or Declining
Lenders' rights and obligations hereunder without recourse or expense
to, or warranty by, such Declining Lender or Declining Lenders being
replaced for a purchase price equal to the aggregate outstanding
principal amount of the Obligations payable to such Declining Lender
or Declining Lenders plus any accrued but unpaid interest on such
Obligations and accrued but unpaid fees or other amounts owing in
respect of such Declining Lender's or Declining Lenders' Loans and
Commitments hereunder, and (y) upon the payment of such amounts
referred to in clause (x) and the execution of an Agreement to be
Bound by the Replacement Lender or Replacement Lenders and the
Declining Lender or Declining Lenders (which each such Declining
Lender agrees to execute promptly), the Replacement Lender or
Replacement Lenders shall each constitute a Lender hereunder and the
Declining Lender or Declining Lenders being so replaced shall no
longer constitute a Lender (other than for purposes of Sections 2.16
through 2.20 and Section 6.4), and shall no longer have any
obligations hereunder, other than to the Agents pursuant to Article 7;
or
(iii)
elect to revoke and cancel the extension request in
such Certificate of Extension by giving notice of such revocation and
cancellation to the Administrative Agent (which shall promptly notify
the Lenders thereof) no later than the tenth (10th) day following the
date by which each Lender is required, pursuant to clause (a) of this
Section, to approve or disapprove the requested extension of the
Maturity Date, and concomitantly the total Commitments.
If Borrower fails to timely provide the election notice referred to in
this clause (c), Borrower shall be deemed to have revoked and canceled the
extension request in the Certificate of Extension and to have elected not to
extend the Maturity Date, and, on the then scheduled Maturity Date, Borrower
shall repay in full all Obligations under the Loan Documents.
Section 2.13
[Intentionally Omitted].
Section 2.14
[Intentionally Omitted].
Section 2.15
[Intentionally Omitted].
Section 2.16
Capital Reimbursement. If either (a) the
introduction or implementation of, or the compliance with, or any change in, or
in the interpretation of, any law, rule or regulation, or (b) the introduction
or implementation of or the compliance with any request, directive or guideline
from any central bank or Governmental Authority (whether or not having the
force of law) affects or would affect the amount of capital required to be
maintained by any Lender or any corporation controlling any Lender, then, upon
demand by such Lender, Borrower will immediately pay to Administrative Agent
for the benefit of such Lender, from time to time as specified by such Lender,
such additional amount which such Lender shall determine to be appropriate to
compensate such Lender or any corporation controlling such Lender in light of
such circumstances, to the extent that such Lender reasonably determines that,
because of the existence of such circumstances, the amount of any such capital
would be increased or the rate of return on any such capital would
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33
be reduced, in whole or in part, by or as a consequence of the existence of
such Lender's Commitments, its Loans, and its other commitments under this
Agreement to Borrower, subject to the provisions of Section 2.21.
Section 2.17
Increased Cost of Eurodollar Portions. If any
applicable domestic or foreign law, treaty, rule, directive or regulation
(whether now in effect or hereinafter enacted or promulgated, including
Regulation D) or any interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof (whether or not having the force of law):
(a)
shall change the basis of taxation of payments to any Lender
of any principal, interest, or other amounts attributable to
any Eurodollar Portion of its Loans or its participation in
any Swing Line Advances or its Competitive Bid Advances or
otherwise due under this Agreement in respect of any
Eurodollar Portion of its Loans or its participation in any
Swing Line Advances or Competitive Bid Advances (other than
taxes imposed on the overall net income of such Lender or any
lending office of such Lender by any jurisdiction in which
such Lender or any such lending office is located);
(b)
shall change, impose, modify, apply or deem applicable any
reserve, special deposit or similar requirements in respect of
any Eurodollar Portion of any Lender (excluding those for
which such Lender is fully compensated pursuant to adjustments
made in the definition of Adjusted Eurodollar Rate) or against
assets of, deposits with or for the account of, or credit
extended by, such Lender; or
(c)
shall impose on any Lender, the certificate of deposit market
or the interbank eurocurrency deposit market any other
condition affecting any Eurodollar Portion;
and the result of any of the foregoing (a) through (c) is to (1) increase the
cost to any Lender of funding or maintaining any Eurodollar Portion, any
participation in any Swing Line Advance or any Competitive Bid Advance, as the
case may be, or (2) to reduce the amount of any sum receivable by any Lender in
respect of any Eurodollar Portion, Swing Line Advance or Competitive Bid
Advance, as the case may be, by an amount reasonably deemed by such Lender to
be material; then (i) such Lender shall promptly notify Administrative Agent
and Borrower in writing of the happening of such event, (ii) Borrower shall
thereafter upon demand pay to Administrative Agent for the account of such
Lender such additional amount or amounts as will compensate such Lender for
such additional cost or reduction, subject to the provisions of Sections 2.21
and 2.19, and (iii) Borrower may elect, by giving to Administrative Agent and
Lender not less than three (3) Business Days' notice, to convert all (but not
less than all) of any such Eurodollar Portion into a part of the Base Rate
Portion.
Section 2.18
Availability. If (a) any change in applicable laws,
treaties, rules or regulations or in the interpretation or administration
thereof in any jurisdiction whatsoever, domestic or foreign, shall make it
unlawful or impracticable for any Lender to fund or maintain Eurodollar
Portions, or shall materially restrict the authority of any Lender to purchase
or take
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offshore deposits of dollars ("Eurodollars"), or (b) any Lender determines that
matching deposits appropriate to fund or maintain any Eurodollar Portion are
not available to it, or (c) any Lender determines that the formula for
calculating the Adjusted Eurodollar Rate does not fairly reflect the cost to
such Lender of making or maintaining loans based on such rates, then, upon
notice by such Lender to Administrative Agent and to Borrower, Borrower's right
to elect Eurodollar Portions shall be suspended to the extent and for the
duration of such illegality, impracticability, restriction or condition, and
all Eurodollar Portions (or portions thereof) which are then outstanding or are
then the subject of any Rate Election and which cannot lawfully or practicably
be maintained or funded shall immediately become or remain part of the Base
Rate Portions of such Lender's Loan, subject to the provisions of Sections 2.21
and 2.19. Borrower agrees to indemnify Administrative Agent and each Lender
and hold Administrative Agent and each Lender harmless against all costs,
expenses, claims, penalties, liabilities and damages which may result from any
such change in law, treaty, rule, regulation, interpretation or administration,
subject to the provisions of Section 2.21.
Section 2.19
Funding Losses. In addition to its other obligations
hereunder, subject to the provisions of Section 2.21, Borrower shall indemnify
each Lender against, and reimburse each Lender on demand for, any loss or
expense incurred or sustained by such Lender, determined as provided in this
Section, as a result of (a) any payment or prepayment (whether authorized or
required hereunder or otherwise) of all or a portion of a Eurodollar Portion of
Borrower on a day other than the day on which the applicable Eurodollar
Interest Period ends, (b) any payment or prepayment, whether required hereunder
or otherwise, of a Loan of Borrower made after the delivery, but before the
effective date, of a Rate Election, if such payment or prepayment prevents such
Rate Election from becoming fully effective, (c) the failure of any Revolving
Loan Advance or Swing Line Advance or Competitive Bid Advance to be made to
Borrower or of any Rate Election of Borrower to become effective due to any
condition precedent to a Revolving Loan Advance or Swing Line Advance or
Competitive Bid Advance not being satisfied, due to the inability of
Administrative Agent (acting reasonably and in accordance with Section 2.18) to
determine a Eurodollar Rate for a Eurodollar Portion of Borrower or due to any
other action or inaction of any Designated Entity, (d) any conversion (whether
authorized or required hereunder or otherwise) of all or any portion of any
Eurodollar Portion of Borrower into a Base Rate Portion or into a different
Eurodollar Portion on a day other than the day on which the applicable
Eurodollar Interest Period ends, (e) any payment or prepayment of all or a
portion of a Swing Line Advance to Borrower on a day other than the maturity
date for such Swing Line Advance or (f) any payment or prepayment of all or a
portion of a Competitive Bid Advance on a day other than the maturity date for
such Competitive Bid Advance.
Upon the occurrence of an event as described in subsections (a)
through (f) of this Section, the method to be used by each Lender to calculate
the loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund or maintain Eurodollar
Portions of Revolving Loan Advances, Swing Line Advances or Competitive Bid
Advances, as the case may be, is as follows:
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Funding Loss = P x (F-R) x D/360
P
=
principal amount of payment, prepayment, conversion, non-borrowing or non-effective
Rate Election
F
=
Eurodollar Rate or Swing Line Rate or Competitive Bid Rate, as the case may be
(adjusted for Reserve Percentage), utilized in the calculations of the Eurodollar Rate
or Swing Line Rate or Competitive Bid Rate, as the case may be, on the Eurodollar
Portion or Swing Line Advance or Competitive Bid Advance which is being paid, prepaid,
converted, not borrowed or not subject to effective Rate Election
R
=
reinvestment rate (as hereinafter defined)
D
=
number of days from the date of the payment, prepayment, conversion, non-borrowing or
non-effectiveness until the day on which the Eurodollar Interest Period of the
Eurodollar Portion ends or the Swing Line Advance or Competitive Bid Advance matures
Reinvestment rate as it is used herein will be equal to the Eurodollar Rate,
adjusted for the Reserve Percentage quoted to such Lender, or the Swing Line
Rate or Competitive Bid Rate that would be quoted by such Lender, as the case
may be, effective for the date on which the payment, prepayment, conversion,
non-borrowing or non-effectiveness occurs. For purposes of determining the
reinvestment rate for purposes of this Section, the Eurodollar Rate will be the
quote for either one (1) month, two (2) months, three (3) months, six (6)
months, nine (9) months or twelve (12) months, the Competitive Bid Rate will be
the quote for a number of days between seven (7) and 360, and the Swing Line
Rate will be the quote for a number of days between one (1) and fourteen (14),
whichever most closely approximates (but which may contain more or fewer days
than) the number of days from the date of the payment, prepayment, conversion,
non-borrowing or non-effectiveness until the last day of the relevant
Eurodollar Interest Period or the scheduled maturity, as the case may be, of
the Eurodollar Portion, Competitive Bid Advance or Swing Line Advance, as the
case may be, in respect of which the payment, prepayment, conversion,
non-borrowing or non-effectiveness occurs; provided that if such number of days
in respect of a Eurodollar Rate is the midpoint between two such periods, such
rate will be the lower of the two rates for such periods.
Section 2.20
Taxes.
All payments by Borrower of principal of,
and interest on, the Loans and all other amounts payable hereunder shall be
made free and clear of and without deduction for any present or future income,
excise, stamp, or franchise taxes and other taxes, fees, duties, withholdings
or other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender's net
income or receipts (such non-excluded items being called "Taxes"). In the
event that any withholding or deduction from any payment to be made by Borrower
hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then, subject to the provisions of Section 2.21, Borrower
will:
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(a)
pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b)
promptly forward to Administrative Agent an official receipt
or other documentation satisfactory to Administrative Agent
evidencing such payment to such authority; and
(c)
pay to Administrative Agent for the account of the applicable
Lender(s) such additional amount(s) as is necessary to ensure
that the net amount actually received by each Lender will
equal the full amount such Lender would have received had no
such withholding or deduction been required and Borrower
hereby acknowledges that it is not entitled to and will not
seek recovery or restitution of any amount due to any of the
Lenders or Agents and paid by Borrower pursuant to this clause
(c) or pursuant to the next sentence.
If any Taxes are directly asserted against any Agent or any Lender with respect
to any payment received by such Agent or such Lender hereunder, such Agent or
such Lender may pay such Taxes and, if paid in good faith, Borrower will
promptly pay such additional amounts to Administrative Agent for the account of
such Lender or Agent (including any penalties, interest or expenses) as is
necessary in order that the net amount received by such person after the
payment of such Taxes (including any taxes on such additional amount) shall
equal the amount such person would have received had no such Taxes been
asserted, subject to the provisions of Section 2.21.
Borrower shall pay all stamp, transaction, registration and similar
taxes (including financial institutions' duties, debit taxes or other taxes
payable by return and taxes passed on to any Lender or Agent by a bank or
financial institution (collectively "Stamp Taxes") and, if Borrower fails to
pay any such charges or taxes after reasonable notice from any such Lender or
Agent, fines and penalties) which may be payable or determined to be payable in
relation to the execution, delivery, performance or enforcement of this
Agreement or any Loan Document or any other transaction contemplated by any
Loan Document to which Borrower is a party. Borrower hereby indemnifies each
Lender and Agent against any liability resulting from delay or omission to pay
such charges or taxes except to the extent the liability results from failure
by the relevant Lender or Agent to pay any such tax after having been delivered
funds to do so by Borrower or to the extent such liability is for fines and
penalties resulting from such Lender's or Agent's failure to provide reasonable
notice to Borrower as provided herein.
If Borrower fails to pay any Taxes or Stamp Taxes when due to the
appropriate taxing authority or fails to remit to Administrative Agent, for the
account of the respective Lenders, the required receipts or other required
documentary evidence, Borrower shall indemnify Lenders for any Taxes, interest
or penalties that may become payable by any Lender as a result of any such
failure, subject to the provisions of Section 2.21. For purposes of this
Section, a distribution hereunder by Administrative Agent or any Lender to or
for the account of any Lender or Agent shall be deemed a payment by the subject
Borrower.
Borrower waives any statutory right to recover from any Agent or any
Lender any amount due to any such Agent or Lender and paid by Borrower under
this Section.
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On or prior to the first date on which interest or fees are payable
hereunder for the account of any Lender, each Lender that is organized under
the laws of a jurisdiction other than the United States shall execute and
deliver to Administrative Agent, three (3) or more (as Administrative Agent may
reasonably request) United States Internal Revenue Service Forms 1001 or 4224
or such other forms or documents (or successor forms or documents),
appropriately completed, as may be applicable to establish the extent, if any,
to which a payment to such Lender is exempt from withholding or deduction of
Taxes. Each Lender which so delivers a Form 1001 or 4224 further undertakes to
deliver to Administrative Agent three (3) additional copies of such form (or a
successor form) on or before the date that such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by Administrative Agent, in
each case certifying that such Lender is entitled to receive payments from
Borrower under this Agreement and the Notes without deduction or withholding of
any United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms of the type previously delivered inapplicable or which would prevent
such Lender from duly completing and delivering such form with respect to it
and such Lender advises Administrative Agent that it is not capable of
receiving such payments on the basis reflected in such previously delivered
form without any deduction or withholding of United States federal income tax.
Administrative Agent shall provide one (1) copy of each of such forms or
documents so provided to Borrower and Documentation Agent.
Section 2.21
Make-Whole Qualifications. Each Lender's claims for
reimbursements, payments, indemnities or otherwise under Sections 2.16, 2.17,
2.18, 2.19 and 2.20 and Borrower's obligation with respect thereto, shall be
limited and qualified by and subject to the following:
(a)
Borrower's obligation to pay, satisfy or recognize such claim
shall be limited to costs or losses incurred within one (1)
year immediately prior to any demand or request therefor upon
Borrower;
(b)
each Lender's demand for reimbursement, payment or indemnity
from Borrower must be limited to that which is being generally
applied at the time by such Lender for comparable borrowers
and credits subject to credit agreements similar to this
Agreement, but without regard to provisions similar to this
Section;
(c)
each Lender which asserts its rights with respect thereto or
which is seeking or imposing such reimbursement, payment or
indemnity shall provide evidence regarding the basis of such
claim and the calculation and application thereof in
reasonable detail and, in determining such amount, each Lender
may use reasonable methods of attribution and averaging;
(d)
each Lender which is seeking payment or reimbursement pursuant
to Section 2.20 shall, if so requested by Borrower, use
reasonable efforts (subject to the overall policy
considerations of such Lender) to designate a different
lending office hereunder if to do so will avoid the need for,
or reduce the amount of, any such
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38
payment or reimbursement; provided that, Lender would, in its
sole but reasonable determination, suffer no material
economic, legal or regulatory disadvantage or burden;
(e)
Borrower may, in its sole discretion, elect, unless and until
the applicable Lender notifies Borrower that the circumstances
giving rise thereto no longer apply to such Lender, that, to
the extent that a Lender's claims for such reimbursements,
payments or indemnities would be reduced thereby, that subject
to Section 2.19, (1) all Loans to Borrower which would
otherwise be made by such Lender as Eurodollar Portions shall
be made instead as Base Rate Portions (all of which interest
and principal shall be payable as provided herein with respect
to the related Eurodollar Portions of the Lenders), and (2)
after each Eurodollar Portion has been repaid, all payments of
principal which would otherwise would be applied to repay such
Eurodollar Portion shall be applied to repay Base Rate
Portions instead; and
(f)
Borrower may designate a replacement Lender (which may be one
(1) or more of the then existing Lenders hereunder and which
shall be reasonably satisfactory to Administrative Agent) to
purchase the Notes, in each case without recourse, and assume
the Commitments and all other obligations hereunder of any
Lender that has suspended the availability of Eurodollar
Portions pursuant to Section 2.18 or that has demanded
reimbursement, payment or indemnity under Sections 2.16, 2.17,
2.18, 2.19 or 2.20, and such Lender shall be obligated to
sell, transfer and deliver all of its Notes to such
replacement Lender for the outstanding principal amount of
such Notes, plus in each case, accrued interest thereon and
such Lender's portion of accrued but unpaid fees through the
date of such purchase, and permit such replacement lender to
assume its Commitments. Borrower shall be obligated to pay
all additional amounts due to the Lender being replaced
pursuant to Sections 2.16, 2.17, 2.18, 2.19 and 2.20 through
the date of such purchase and assumption; provided, that if
the replacement Lender fails to purchase all such rights and
interests and assume all such Commitments on the specified
date in accordance herewith, Borrower shall continue to be
obligated to pay such amounts to such Lender which was to have
been replaced and provided further that Borrower shall pay any
Taxes or Stamp Taxes, if any, as a result of such transfer.
Section 2.22
Competitive Bid Advances.
(a)
In addition to borrowings pursuant to Section 2.1(a) or
Section 2.4, Borrower may request each Lender severally to submit offers
(herein called a "Competitive Bid Offer") to make advances to Borrower on any
Business Day during the Loan Commitment Period as provided in this Section
(herein called "Competitive Bid Advances"); provided, however, that each Lender
may in its sole discretion, but shall have no obligation whatsoever to submit
such offers, and Borrower may, but shall have no obligation to, accept any such
offers.
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39
(b)
Procedure for Competitive Bid Advances.
(i)
Borrower may request Competitive Bid Advances by
delivering a request for a Competitive Bid Advance to
each Lender (which has indicated to Borrower its
interest in making a Competitive Bid Advance) and
Administrative Agent not later than 9:00 a.m.,
Dallas, Texas time, one (1) Business Day prior to the
proposed borrowing date. Each request for a
Competitive Bid Advance shall be in substantially the
form of Exhibit N hereto (herein called a "Request
for Competitive Bid Offer") and may solicit bids for
Competitive Bid Advances having not more than three
(3) alternative maturity dates and for Competitive
Bid Advances in any respective principal amount equal
to $10,000,000 or an integral multiple of $1,000,000
in excess thereof for each maturity date requested.
The maturity date for each Competitive Bid Advance
shall be not less than fifteen (15) days nor more
than 360 days after the borrowing date therefor (and
in any event not after the Maturity Date).
(ii)
Upon receipt of a Request for Competitive Bid Offer,
any Lender that elects, in its sole discretion, to do
so, shall irrevocably offer to make one (1) or more
Competitive Bid Advances at a fixed rate of interest
determined by such Lender in its sole discretion for
each such Competitive Bid Advance. Any such
irrevocable offer shall be made by delivering a
Competitive Bid Offer to Administrative Agent and to
Borrower, before 9:00 a.m., Dallas, Texas time (or,
in the case of a Competitive Bid Offer by
Administrative Agent, before 8:45 a.m., Dallas, Texas
time), on the proposed borrowing date, setting forth
the maximum amount of Competitive Bid Advances for
each maturity date, and the aggregate maximum amount
for all maturity dates, which such Lender would be
willing to make (which amounts may exceed such
Lender's Percentage Share of the Commitments) and the
fixed rate of interest at which such Lender is
willing to make each such Competitive Bid Advance,
which fixed rate of interest may or may not be, in
such Lender's discretion, different for each
Competitive Bid Advance (respectively herein a
"Competitive Bid Rate"). Borrower shall pay to
Administrative Agent a fee of $500 on each day that
Borrower accepts a Competitive Bid Offer.
(iii)
The Competitive Bid Offer delivered by each Lender in
response to a Request for Competitive Bid Offer shall
set forth an amount proposed to be loaned by such
Lender for each maturity date requested by Borrower
that is equal to $10,000,000 or an integral multiple
of $1,000,000 in excess thereof. Any Competitive Bid
Offer by any Lender that: (A) does not substantially
conform to the form of Exhibit O hereto, (B) contains
qualifying, conditional or similar language, (C)
proposes terms other than or in addition to those set
forth in the applicable Request for Competitive Bid
Offer or (D) is received by Borrower after the
applicable time specified in
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this subsection, shall be rejected by Borrower and
Administrative Agent (and Administrative Agent shall
notify the relevant Lender of such rejection for one
or more of the matters described in the foregoing (A)
through (D) by telephone and telecopy as soon as
practicable thereafter).
(iv)
Borrower shall before 10:00 a.m., Dallas, Texas time,
on the proposed borrowing date either, in its
absolute discretion:
(A)
withdraw such Request for Competitive Bid
Offer by giving telephonic notice to that
effect;
(B)
accept one (1) or more of the Competitive Bid
Offers by giving telephonic notice to
Administrative Agent (immediately confirmed
by delivery to Administrative Agent by
facsimile transmission of a Bid Acceptance)
of the amount of Competitive Bid Advance(s)
for each relevant maturity date to be made by
the relevant Lender(s) (which amount for each
such maturity date shall be equal to or less
than the maximum amount for such maturity
date specified in the Competitive Bid Offer
of such Lender(s), and for all maturity dates
included in such Competitive Bid Offer shall
be equal to or less than the aggregate
maximum amount specified in such Request for
Competitive Bid Offer for all such maturity
dates) and reject any Competitive Bid Offers
not accepted by Borrower by giving telephonic
notice to Administrative Agent of such
rejection; provided, however, that (1)
Borrower may not accept Competitive Bid
Offers for any maturity date in an aggregate
principal amount in excess of the maximum
principal amount requested in the related
Request for Competitive Bid Offer (and
Competitive Bid Advances allocated to a
Lender on a borrowing date for each relevant
maturity date shall be in a principal amount
equal to $10,000,000 or an integral multiple
of $1,000,000 in excess thereof); and (2)
Administrative Agent shall notify the Lender
that submitted a Competitive Bid Offer for
such Business Day of Borrower's decision by
telecopying to each such Lender a copy of the
Bid Acceptance by no later than 12:00 noon,
Dallas, Texas time, on the borrowing date
specified in the Request for Competitive Bid
Offer; or
(C)
Borrower may accept or reject any Competitive
Bid Offer(s) in whole or in part; provided
that after giving effect to any such accepted
Competitive Bid Offer(s), the sum of (i) the
aggregate principal amount of the Revolving
Loans and Swing Line Advances outstanding at
such time, and (ii) the aggregate principal
amount of Competitive Bid Advances
outstanding at such time, does not exceed the
Facility Amount.
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41
(v)
If Borrower notifies Administrative Agent that a
Request for Competitive Bid Offer is withdrawn
pursuant to clause (iv) above, the Competitive Bid
Advance requested thereby shall not be made.
(vi)
Each Lender which is to make a Competitive Bid
Advance shall, before 1:00 p.m., Dallas, Texas time,
on the borrowing date specified in the Request for
Competitive Bid Offer applicable thereto, make
available to Administrative Agent in immediately
available funds the amount of each Competitive Bid
Advance to be made by such Lender. Administrative
Agent shall deposit such funds to an account
designated by Borrower by no later than 1:15 p.m.,
Dallas, Texas time, on such date.
(vii)
Borrower shall repay to Administrative Agent, for the
account of each Lender which has made a Competitive
Bid Advance, on the maturity date of each Competitive
Bid Advance (such maturity date being that specified
by Borrower for repayment of such Competitive Bid
Advance in the related Request for Competitive Bid
Offer) the then unpaid principal amount of such
Competitive Bid Advance. Borrower shall not have the
right to prepay any principal amount of any
Competitive Bid Advance. If any Lender makes a
Competitive Bid Advance on a day on which Borrower is
to repay all or any part of an outstanding
Competitive Bid Advance from such Lender, if
requested by Borrower, such Lender shall apply the
proceeds of its new Competitive Bid Advance to make
such repayment and, in such instance, only an amount
equal to the difference (if any) between the amount
being borrowed and the amount being repaid shall be
made available by such Lender to Administrative Agent
as provided in Section 2.22(b)(vi), or remitted by
Borrower to Administrative Agent as provided in this
Section 2.22(b)(vii), as the case may be.
(viii)
Borrower shall pay interest on the unpaid principal
amount of each Competitive Bid Advance from the
borrowing date to the stated maturity date thereof,
at the rate of interest determined pursuant to clause
(b) (ii) above (calculated on the basis of a 360 day
year for actual days elapsed including the first but
excluding the last), but not in excess of the Maximum
Lawful Rate, payable on the maturity date with
respect to such Competitive Bid Advance and, if such
maturity date is more than 90 days after the date of
making such Competitive Bid Advance, on such
ninetieth day and each ninetieth day occurring after
such ninetieth day until the maturity date. If all
or a portion of the principal of or interest on any
Competitive Bid Advance shall not be paid when due
(whether at the stated maturity, by acceleration or
otherwise), without limiting any rights of any Lender
under this Agreement, (i) such overdue principal
amount shall bear interest from the date on which
such payment was due (other than on the scheduled
maturity date with respect thereto) at the Default
Rate, but not in excess of the Maximum Lawful Rate,
until paid in full (as well as after as before
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42
judgment) and (ii) such overdue interest shall bear
interest from the date on which payment was due at
the Default Rate, but not in excess of the Maximum
Lawful Rate, until paid in full (as well as after as
before judgment).
(c)
The Competitive Bid Advances made by each Lender shall be
evidenced by a single promissory note of Borrower payable to
the order of such Lender substantially in the form of Exhibit
A-3 attached hereto, with appropriate insertions (herein
called a "Competitive Bid Note"). The date, amount,
Competitive Bid Rate and maturity date of each Competitive Bid
Advance made by a Lender to Borrower, and each payment made on
account of the principal thereof, shall be recorded by such
Lender on its books.
(d)
The Competitive Bid Advances will be used by Borrower to
provide working capital and for the general business purposes
of Borrower and its Subsidiaries. No Competitive Bid Advances
shall be used for the purpose of purchasing or carrying any
Margin Stock in violation of the Margin Regulations.
(e)
The obligation of Lenders to make each Competitive Bid Advance
after timely acceptance by Borrower is further subject to the
conditions contained in Article 3.
(f)
Borrower shall not be required to accept Competitive Bid
Offers on the basis of the lowest Competitive Bid Rate
offered, but may in its sole discretion accept any Competitive
Bid Offer regardless of the Competitive Bid Rate(s) offered.
ARTICLE 3
CONDITIONS PRECEDENT TO LENDING
Section 3.1
Initial Conditions Precedent. No Lender has any
obligation to make its first Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance unless:
(a)
Administrative Agent shall have received all of the following
with copies for each Lender, at Administrative Agent's office
in Midland, Texas:
(1)
This Agreement, the Notes, those Security Instruments
and Guaranties listed on Schedule 5 hereto, any other
documents required in connection herewith, each duly
executed and delivered and in form, substance and
date satisfactory to Managing Agents.
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(2)
The following certificates:
(i)
an "Omnibus Certificate" of the Secretary or
an Assistant Secretary and of a Designated
Officer, which shall contain the names and
signatures of the officers of Borrower
authorized to execute Loan Documents and
which shall certify to the truth, correctness
and completeness of the following exhibits
attached thereto: (A) a copy of resolutions
duly adopted by the Board of Directors of
Borrower and in full force and effect at the
time this Agreement is entered into,
authorizing the execution of this Agreement
and the other Loan Documents delivered or to
be delivered in connection herewith and the
consummation of the transactions contemplated
herein and therein, (B) a copy of the charter
documents of Borrower and all amendments
thereto, certified by the appropriate
official of Borrower's jurisdiction of
organization, and (C) a copy of the bylaws or
similar governing documents of Borrower
(provided that, to the extent Borrower has
previously provided Administrative Agent
certified copies of the documents described
in (B) and (C) above, such Omnibus
Certificate may omit such documents, but
shall include a statement that such documents
have not been modified in any respect since
the date last so provided to Administrative
Agent, except as may be specifically noted in
such Omnibus Certificate with appropriate
attachments); and
(ii)
a "Compliance Certificate" of a Designated
Officer of Borrower, of even date with such
Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance, in which such
officer certifies to the satisfaction of the
conditions set out in Section 3.2(a) and (b)
and that all conditions hereunder have been
satisfied.
(3)
A certificate (or certificates) of the due formation,
valid existence and good standing of Borrower in its
jurisdiction of organization, issued by the
appropriate authorities of such jurisdiction.
(4)
The favorable opinions of the counsel for Borrower
and the Restricted Subsidiaries, given upon their
express instructions substantially in the form set
forth as Exhibit H attached hereto.
(5)
Documents similar to those specified in Section
3.1(a)(2)(i) and 3.1(a)(3) with respect to each
Restricted Subsidiary which is or will be party to a
Security Instrument on the date hereof.
(6)
A certificate of a Designated Officer of Borrower as
to insurance concerning the material assets of
Designated Entities. Lenders agree that Designated
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Entities' insurance coverage disclosed on Schedule 4 is
acceptable at the date hereof.
(b)
Except as disclosed to the Lenders in the Disclosure Schedule
or otherwise in writing prior to the execution hereof and not
objected to by Required Lenders, there shall be no pending or
threatened litigation, action or proceeding against Borrower
or any of its Subsidiaries which, if adversely determined,
could reasonably be expected to have a Material Adverse
Effect.
(c)
No event or condition shall have occurred (i) with respect to
Borrower and its Restricted Subsidiaries (other than Chauvco
and its Subsidiaries) since August 8, 1997 and (ii) with
respect to Chauvco and its Subsidiaries since September 30,
1997, which is reasonably expected to result in a Material
Adverse Effect.
(d)
After giving effect to such Revolving Loan Advances,
Competitive Bid Advances and Swing Line Advances, Borrower and
Lenders shall be in compliance with the Margin Regulations.
(e)
The acquisition by Borrower or any of its Affiliates of
Chauvco (the "Acquisition") shall have been consummated as
contemplated by and pursuant to that certain Combination
Agreement, dated as of September 3, 1997, as amended (the
"Acquisition Agreement"), between Borrower and Chauvco, and
Administrative Agent shall have received (i) satisfactory
evidence of the consummation of such Acquisition and (ii) a
certificate from a Designated Officer of Borrower certifying
that the Acquisition has been consummated.
(f)
A certificate of a Designated Officer of Borrower certifying
that (i) all representations and warranties made by any
Designated Entity in this Agreement or any other Loan Document
are true and correct as of the Effective Date and (ii) that
all conditions precedent to the initial Advance contained in
this Agreement or any other Loan Document have been satisfied
as of the Effective Date.
(g)
All requisite Governmental Authorities and third parties shall
have approved or consented to the Acquisition and all related
transactions, including, without limitation, the issuance,
closing and funding of this Agreement and the facilities
thereunder, to the extent required. All applicable appeal
periods shall have expired and there shall be, in the judgment
of the Managing Agents, in their sole discretion, no
governmental or judicial action, actual or threatened,
restraining, preventing or imposing burdensome conditions on
the Acquisition and all related transactions, including,
without limitation, the issuance, closing and funding of this
Agreement and the facilities thereunder.
(h)
Managing Agents shall have received copies of all financial
statements, reports, notices and proxy statements sent by
Borrower to its stockholders and all SEC filings concerning
the Acquisition.
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(i)
No litigation or administrative proceeding or other legal or
regulatory developments prohibiting or enjoining the
consummation of the Acquisition shall exist.
(j)
Exclusive of the Acquisition, no "Event of Default" (as
defined in the Existing Credit Agreement shall have occurred
and be continuing.
(k)
Administrative Agent shall have received copies of (i) the
executed documentation for the Primary Credit Facility and
(ii) the executed documentation for the Canadian Credit
Facility.
Section 3.2
Additional Conditions Precedent. No Lender has any
obligation to make any Revolving Loan Advance, Competitive Bid Advance or Swing
Line Advance (including its initial Advance) unless the following conditions
precedent have been satisfied:
(a)
All representations and warranties made by any Designated
Entity in any Loan Document shall be true on and as of the
date of such Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance as if such representations and
warranties had been made as of the date of such Revolving Loan
Advance, Swing Line Advance or Competitive Bid Advance (unless
stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct as of
such earlier date).
(b)
In the case of the first Revolving Loan Advance, Swing Line
Advance or Competitive Bid Advance, no Event of Default, and
in the case of any other Revolving Loan Advance, Swing Line
Advance or Competitive Bid Advance, no Default shall exist at
the date of such Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance or will occur as a result of the
making of the requested Revolving Loan Advance, Swing Line
Advance or Competitive Bid Advance.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1
Borrower's Representations and Warranties. To
confirm each Lender's understanding concerning Borrower and its businesses,
properties and obligations, and to induce Managing Agents, Co-Agents and each
Lender to enter into this Agreement and to make the Loans to Borrower, except
as to matters disclosed herein or in the Disclosure Schedule, Borrower
represents and warrants to Managing Agents, Co-Agents and each Lender that:
(a)
No Default. No Designated Entity is in default in the
performance of any of the covenants and agreements contained
herein or under any other Loan Document. No event or
circumstance has occurred and is continuing which constitutes
a Default.
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(b)
Organization, Existence and Good Standing. Each Designated
Entity is duly organized or incorporated, validly existing and
in good standing under the laws of its jurisdiction of
organization or incorporation, having all corporate or
partnership powers required to enter into and carry out the
transactions contemplated hereby. Each Designated Entity is
duly qualified, in good standing, and authorized to do
business in all other jurisdictions wherein the character of
the properties owned or held by it or the nature of the
business transacted by it makes such qualification necessary,
except for any lack of qualification, good standing or
authorization that could not reasonably be expected to have a
Material Adverse Effect. Each Designated Entity has taken all
actions customarily taken in order to enter, for the purpose
of conducting business or owning property, each jurisdiction
outside the United States wherein the character of the
properties owned or held by it or the nature of the business
transacted by it makes such actions desirable, except for any
failure or other matter that could not reasonably be expected
to have a Material Adverse Effect.
(c)
Authorization. Each Designated Entity has duly taken all
corporate or partnership action necessary to authorize the
execution and delivery by it of the Loan Documents to which it
is a party and to authorize the consummation of the
transactions contemplated thereby and the performance of its
obligations thereunder. Borrower is duly authorized to borrow
funds hereunder.
(d)
No Conflicts or Consents. The execution and delivery by each
Designated Entity of the Loan Documents to which it is a
party, the performance by each Designated Entity of its
obligations under such Loan Documents, and the consummation of
the transactions contemplated by the various Loan Documents,
including, without limitation, the consummation of the
Acquisition, do not and will not (1) conflict with any
provision of the articles or certificate of incorporation,
bylaws, charter, partnership agreement or certificate or other
governing document of such Designated Entity, or (2) except as
to matters that could not reasonably be expected to have a
Material Adverse Effect, result in the acceleration of any
Debt owed by such Designated Entity, or conflict with any law,
statute, rule, regulation, or material agreement, judgment,
license, order or permit applicable to or binding upon such
Designated Entity, or require the consent, approval,
authorization or order of, or notice to or filing with, any
Governmental Authority or third party, or result in or require
the creation of any Lien upon any material assets or
properties of such Designated Entity, except (i) as permitted
in the Loan Documents and (ii) for filings and recordings of
the Security Instruments.
(e)
Enforceable Obligations. This Agreement is, and the other
Loan Documents when duly executed and delivered will be,
legal, valid and binding obligations of each Designated Entity
which is a party hereto or thereto, enforceable in accordance
with their terms except as such enforcement may be limited by
bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights generally and
by general principles of equity.
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(f)
Financial Statements. (i) The Updated Financial Statements
fairly present Borrower's, Mesa's and P&P Petroleum's and each
of their Consolidated subsidiaries' financial position at the
respective dates thereof and the results of Borrower's, Mesa's
and P&P Petroleum's and each of their Consolidated
subsidiaries' operations and cash flows for the respective
periods thereof. From the date of the audited Updated
Financial Statements to the Effective Date no change has
occurred in Borrower's, Mesa's or P&P Petroleum's Consolidated
financial condition which could reasonably be expected to
result in a Material Adverse Effect, except as reflected in
the Disclosure Schedule. From September 30, 1997 to the
Effective Date, no change has occurred in Chauvco's
Consolidated financial condition which could reasonably be
expected to result in a Material Adverse Effect, except as
reflected in the Disclosure Schedule. All Updated Financial
Statements were prepared in accordance with GAAP as in effect
on the date thereof.
(ii)
The Unaudited Pro Forma Financial Statements
of Borrower for the periods ending December 31, 1996 and
September 30, 1997 contained in the Joint Management
Information Circular and Proxy Statement, dated November 17,
1997 (the "Proxy"), and the Unaudited Pro Forma Financial
Statements of Borrower for the period ending September 30,
1997, fairly present Borrower's pro forma financial position
at the respective dates thereof and the results of Borrower's
pro forma operations and cash flows for the respective periods
thereof. From the date of such financial statements to the
Effective Date no change has occurred in Borrower's
Consolidated financial condition which could reasonably be
expected to result in a Material Adverse Effect on Borrower's
Pro Forma Consolidated Financial Condition, except as
reflected in the Disclosure Schedule. All such financial
statements were prepared in accordance with GAAP as in effect
on the date thereof.
(g)
Other Obligations. Except as disclosed in the Disclosure
Schedule, as of the Effective Date, neither Borrower nor any
of its Consolidated Subsidiaries has any outstanding Debt
which is, in the aggregate, material to Borrower and its
Consolidated Subsidiaries and not shown in the Updated
Financial Statements.
(h)
Full Disclosure. No certificate, statement or other
information delivered herewith or heretofore by any Designated
Officer of any Designated Entity to either of Managing Agents,
Co-Agents or any Lender in connection with the negotiation of
this Agreement or in connection with any transaction
contemplated hereby contains any untrue statement of a fact or
omits to state any fact known to Borrower, P&P Petroleum, Mesa
or any Designated Entity (other than industry-wide risks
normally associated with the types of businesses conducted by
Borrower, P&P Petroleum, Mesa or any Designated Entity)
necessary to make the statements contained herein or therein
not misleading as of the date made or deemed made, except to
the extent that any untrue statement or omission could not
reasonably be expected to have a Material Adverse Effect.
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(i)
Litigation. Except as disclosed in the Updated Financial
Statements or in the Disclosure Schedule: (1) there are no
actions, suits or legal, equitable, arbitrative or
administrative proceedings pending, or, to the knowledge of
Borrower, threatened, against any Designated Entity before any
Governmental Authority that could reasonably be expected to
have a Material Adverse Effect, and (2) there are no
outstanding judgments, injunctions, writs, rulings or orders
by any such Governmental Authority against Borrower, P&P
Petroleum, Mesa or any of their respective Consolidated
Subsidiaries which could reasonably be expected to have a
Material Adverse Effect.
(j)
Environmental Matters. The liabilities and costs of Borrower
and its Consolidated Subsidiaries related to compliance with
applicable Environmental Laws (as in effect on the date on
which this representation is made or deemed made) could not
reasonably be expected to have a Material Adverse Effect.
(k)
Title to Properties. Each Designated Entity has good and
defensible title to all of its material properties and assets,
except any failure, defect or other matter that could not, in
the aggregate, reasonably be expected to have a Material
Adverse Effect.
(l)
Investment Company Act. Neither Borrower nor any of its
Subsidiaries is an "investment company" or a "company
controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.
(m)
Public Utility Holding Company Act. Neither Borrower nor any
of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding
company", or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(n)
Principal Business Offices. As of the Effective Date, each
Designated Entity's principal place of business and chief
executive office is located at the place described in the
Disclosure Schedule.
(o)
Solvency. Each Designated Entity is solvent and will continue
to be solvent after the making and guarantying of the Loans.
(p)
Organization. As of the Effective Date, the organization
chart of Borrower and its Subsidiaries with material assets
set forth on Exhibit I is true and correct in all material
respects. Except for the Exchangeable Shares, as of the
Effective Date, Borrower or a Restricted Subsidiary owns all
of the issued and outstanding capital stock of each Restricted
Subsidiary. As of the Effective Date, no Restricted
Subsidiary has issued any securities convertible into shares
of its stock or any options (except as set forth in the
Disclosure Schedule), warrants or other rights to acquire such
shares or securities convertible into such shares and the
outstanding capital stock and securities of each Restricted
Subsidiary is owned by Borrower or
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another Restricted Subsidiary free and clear of all Liens,
warrants, options or rights of others of any kind whatsoever,
except for Permitted Liens.
(q)
Use of Proceeds; Margin Stock. Borrower and its Subsidiaries
shall use (i) the initial Revolving Loan Advance to discharge
all outstanding obligations under the Existing Credit
Agreement, and (ii) all Revolving Loan Advances, Competitive
Bid Advances and Swing Line Advances for its and their
respective general corporate purposes. In no event shall the
funds from any Revolving Loan Advance, Swing Line Advance or
Competitive Bid Advance be used directly or indirectly by any
Persons for personal, family, household or agricultural
purposes or for the purpose, whether immediate, incidental or
ultimate, of purchasing, acquiring or carrying any "margin
stock" or any "margin securities" (as such terms are defined
in the Margin Regulations) in violation of the Margin
Regulations, or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or
carry "margin stock" or "margin securities" in violation of
the Margin Regulations, or to extend credit to others
directly or indirectly for the purpose of purchasing or
carrying any such margin stock or margin securities in
violation of the Margin Regulations. Borrower is not engaged
principally, or as one of Borrower's important activities, in
the business of extending credit to others for the purpose of
purchasing or carrying such margin stock or margin securities.
Neither any Designated Entity nor any Person acting on behalf
of any Designated Entity has taken or will take any action
which might cause this Agreement, the Notes, or any Guaranty,
any Loan Document or any Loan to violate the Margin
Regulations or to violate Section 7 of the Securities Exchange
Act of 1934, or any rule or regulation thereunder, in each
case as now or hereafter in effect.
(r)
Liens Under the Security Instruments. Upon the execution and
delivery of the Security Instruments in accordance herewith,
and where appropriate the filing and recordation thereof with
the appropriate filing or recording officers in each of the
necessary jurisdictions, the Liens granted and to be granted
by any Designated Entity to Lenders or the Trustee (as defined
in any of the Security Instruments) on behalf of Lenders in
such Designated Entity's assets pursuant to the Security
Instruments will be validly created, perfected and first
priority Liens, subject only to Permitted Liens.
Section 4.2
Representation by Lenders. Each Lender hereby
represents that it will acquire its Notes for its own account in the ordinary
course of its commercial lending business; however, such Lender may sell or
otherwise transfer its Notes, any participation interest or other interest in
its Notes, or any of its other rights and obligations under the Loan Documents
as permitted by Section 8.8.
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ARTICLE 5
COVENANTS OF BORROWER
Section 5.1
Affirmative Covenants. To conform with the terms and
conditions under which each Lender is willing to have credit outstanding to
Borrower, and to induce Managing Agents, Co-Agents and each Lender to enter
into this Agreement and make the Loans to Borrower, unless Required Lenders
shall have previously agreed otherwise in writing, Borrower severally for
itself and its Subsidiaries, covenants and agrees that:
(a)
Payment and Performance. Borrower will pay all amounts due
from it under the Loan Documents in accordance with the terms
thereof and will observe, perform and comply with every
covenant, term and condition expressed in the Loan Documents,
and will cause each Designated Entity which is a Subsidiary of
Borrower to perform and comply with every covenant, term and
condition expressed in the Loan Documents and applicable to
such Designated Entity.
(b)
Books, Financial Statements and Reports. Borrower will at all
times maintain full and materially accurate books of account
and records. Borrower will maintain and will cause its
Subsidiaries to maintain a standard system of accounting and
will cause the following statements and reports to be
delivered to Managing Agents and each Lender at Borrower's
expense:
(1)
As soon as available, and in any event within 120
days after the end of each Fiscal Year, complete
audited Consolidated financial statements of Borrower
and its Subsidiaries and unaudited consolidating
balance sheets and statements of operations of
Borrower and its Subsidiaries, prepared in reasonable
detail in accordance with GAAP; such audited
statements to be accompanied by an opinion, by KPMG
Peat Marwick, or such other independent certified
public accountants of nationally recognized standing
selected by Borrower, stating that such Consolidated
financial statements have been so prepared. Borrower
will, together with each set of such financial
statements delivered pursuant to this Section,
furnish a certificate in the form of Exhibit J signed
by a Designated Officer of Borrower stating that, to
the best of his knowledge, (i) such financial
statements are accurate and complete, and (ii) no
Default or Event of Default exists at the end of such
Fiscal Quarter or at the time of such certificate or
specifying the nature and period of existence of any
such Default or Event of Default. Such certificate
shall contain calculations showing compliance (or
noncompliance) at the end of such Fiscal Quarter with
the requirements of Sections 5.3(a) and (b).
(2)
As soon as available, and in any event within 60 days
after the end of the first three Fiscal Quarters in
each Fiscal Year, unaudited Consolidated financial
statements of Borrower and its Subsidiaries and
unaudited
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consolidating balance sheet and statements of
operations of Borrower and its Subsidiaries as of the
end of such Fiscal Quarter, all in reasonable detail
and prepared in accordance with GAAP, subject to
changes resulting from year-end adjustments.
Borrower will, together with each set of such
financial statements delivered pursuant to this
Section, furnish a certificate in the form of Exhibit
J signed by a Designated Officer of Borrower stating
that, to the best of his knowledge, (i) such
financial statements are accurate and complete, and
(ii) no Default or Event of Default exists at the end
of such Fiscal Quarter or at the time of such
certificate or specifying the nature and period of
existence of any such Default or Event of Default.
Such certificate shall contain calculations showing
compliance (or noncompliance) at the end of such
Fiscal Quarter with the requirements of Sections
5.3(a) and (b).
(3)
Promptly after transmittal or filing, copies of all
financial statements, reports, notices and proxy
statements sent by Borrower to its stockholders and
all registration statements, periodic reports and
other statements and schedules filed by Borrower or
any of its Subsidiaries with any securities exchange,
the Securities and Exchange Commission or any similar
Governmental Authority.
(c)
Other Information and Inspections. Borrower will furnish to
Managing Agents and each Lender any information which
Administrative Agent, on behalf of any Lender, may from time
to time reasonably request in writing concerning any covenant,
provision or condition of the Loan Documents or any matter in
connection with Borrower's and its Subsidiaries' businesses
and operations. Borrower will permit and will cause each of
its Subsidiaries to permit representatives of Agents and
Lenders (including independent accountants, agents and
attorneys), at the expense and risk of the applicable Lender,
to visit and inspect, during normal business hours and upon
reasonable notice any of Borrower's or such Subsidiaries'
property, including its books of account, other books and
records, and any facilities or other business assets, and to
make extra copies therefrom and photocopies and photographs
thereof, and to write down and record any information such
representatives obtain, and Borrower shall permit and will
cause each of its Subsidiaries to permit Agents and the
Lenders or their representatives, to investigate and verify
the accuracy of the information furnished to Administrative
Agent or any Lender in connection with the Loan Documents and
to discuss all such matters with its officers, employees and
representatives; provided, however, that any such visit,
inspection, investigation or verification or discussion with
respect to Borrower taking place at a time when Borrower has
been notified in writing by Administrative Agent of the
existence of a Default or an Event of Default applicable to
Borrower which has occurred and is continuing shall be at the
cost and expense of Borrower, and that neither Managing
Agents, Co-Agents nor Lenders shall have any obligation to pay
any costs or expenses of Borrower or any other Designated
Entity or any of
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their officers, employees or representatives in respect
thereof irrespective of the existence of any Default or Event
of Default.
(d)
Notice of Material Events. Borrower will promptly upon its
awareness thereof notify Administrative Agent and each Lender
(1) of the occurrence of any Default or any other event, which
has or may reasonably be expected to have, a Material Adverse
Effect, (2) of the acceleration of the maturity of any Debt
owed by any Designated Entity or any default by any Designated
Entity under any instrument evidencing or governing Debt, if
such acceleration or default has a Material Adverse Effect,
(3) of the occurrence of any Termination Event which may
reasonably be expected to have a Material Adverse Effect, and
(4) of the filing of any litigation or proceeding in which any
Designated Entity is a party or of any material developments
in existing litigation in which any Designated Entity is a
party in which an adverse decision may reasonably be expected
to have a Material Adverse Effect.
(e)
Maintenance of Existence and Qualifications. Borrower will,
and will cause each Restricted Subsidiary to, maintain and
preserve its existence as a corporation or partnership, as the
case may be. Borrower will, and will cause each Restricted
Subsidiary to, maintain and preserve its good standing and its
rights and franchises in full force and effect and qualify to
do business as a foreign corporation in all states or
jurisdictions where required by applicable law, except for any
failure to maintain, preserve and qualify that could not
reasonably be expected to have a Material Adverse Effect.
Nothing in this Section shall prohibit (i) a merger or
consolidation permitted by Section 5.2(c) or (ii) a
termination of such existence, good standing, rights or
franchises of any Restricted Subsidiary if Borrower determines
in good faith that such termination is in the best interest of
Borrower and could not reasonably be expected to have a
Material Adverse Effect.
(f)
Payment of Taxes and Trade Debt.
Borrower will, and will
cause each of its Subsidiaries to, except for any failure or
other matter that could not reasonably be expected to have a
Material Adverse Effect, (1) timely file all required tax
returns, (2) timely pay all taxes, assessments, and other
governmental charges or levies imposed upon it or upon its
income, profits or property, and (3) timely pay all trade
debt. Borrower and its respective Subsidiaries may, however,
delay paying or discharging any such taxes, assessments,
charges, debts or levies so long as the validity thereof is
contested in good faith by appropriate proceedings and
adequate reserves therefor in accordance with GAAP have been
set aside and reflected among the books and records of
Borrower and its Subsidiaries.
(g)
Insurance. Borrower will, and
Subsidiaries to, at all times maintain
amounts and covering such risks as are
normal industry practice for companies
businesses and
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will cause each of its
insurance in such
in accordance with
engaged in similar
53
owning similar properties in the same general area in which
Borrower and its Subsidiaries conduct business, which
insurance (other than prudent self-insurance programs) shall
be by financially sound and reputable insurers.
(h)
Payment of Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, Borrower will
promptly pay all reasonable costs and expenses (including
reasonable attorneys' fees) incurred by or on behalf of (1)
the Documentation Agents in connection with the negotiation,
preparation, execution and delivery of the Loan Documents and
any amendment, modification or restatement thereof, and any
and all consents, waivers or other documents or instruments,
including commitment letters, term sheets and any memorandum
relating thereto (provided that Borrower shall be obligated to
pay only the attorneys' fees of a common counsel for the
Documentation Agents, Mayer, Brown & Platt), (2) Agents in
connection with due diligence, syndication, travel and
advertising related to this Agreement and the transactions
contemplated thereby, and (3) Administrative Agent or any
Lender in connection with enforcement of the Loan Documents or
the defense of Administrative Agent's or any Lender's exercise
of its rights thereunder. The selection of Managing Agents'
counsel and consultants in connection with the matters
described in the preceding sentence shall be subject to the
approval of Borrower, which approval shall not be unreasonably
withheld. Attorneys' fees reimbursed by Borrower for any
amendment, modification or restatement of any Loan Document
shall be estimated and approved by Borrower prior to
incurrence, such approval not to be unreasonably withheld.
Attorneys' fees reimbursed by Borrower in connection with the
enforcement of the Loan Documents or the defense of
Administrative Agent's or any Lenders' exercise of its rights
hereunder shall be for a single law firm per country (unless
conflicts (including conflicts between Managing Agents and the
other Lenders as determined in the reasonable discretion of
the Required Lenders) otherwise prohibit the engagement of a
single law firm).
(i)
Compliance with Agreements and Law. Borrower will, and will
cause each of its Subsidiaries to (1) perform all material
obligations it is required to perform under the terms of each
material agreement, contract or other instrument or obligation
to which it is a party or by which it or any of its material
properties is bound, except for any non-performance that will
not have or reasonably be expected to have a Material Adverse
Effect; and (2) conduct its business and affairs in material
compliance with all laws, regulations, and orders applicable
thereto (including without limitation Environmental Laws)
except for any non-compliance that could not reasonably be
expected to have a Material Adverse Effect.
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(j)
Maintenance of Business. Borrower will, and will cause each
Restricted Subsidiary to, maintain as its primary business the
exploration, production and development of oil, natural gas
and other liquid and gaseous hydrocarbons and the gathering,
processing, transmission and marketing of hydrocarbons and
activities related or ancillary thereto.
(k)
Operations. Borrower will, and will cause each Restricted
Subsidiary to, cause all material properties to be regularly
operated, maintained and developed in a good and workmanlike
manner, as would a prudent operator and in accordance with all
applicable federal, state and local laws, rules and
regulations, except for any failure to so operate, maintain
and develop that could not reasonably be expected to have a
Material Adverse Effect.
(l)
Restructuring. No later than 30 days after the Effective Date,
Borrower shall cause the Outside Debt to be assumed by
Borrower through a Restructuring. In connection with such
Restructuring, Pioneer USA shall guarantee the repayment of
the Outside Debt being assumed by Borrower. Contemporaneously
with such Restructuring, Borrower shall cause the Subsidiary
or Subsidiaries who are the surviving entities of such
Restructuring to execute new Guaranties. As used herein,
"Restructuring" shall mean the formation of one or more
wholly-owned Subsidiaries of Borrower and/or Pioneer USA and
the occurrence of one or more mergers, to take place on a
single day, among Borrower, Pioneer USA and any such
Subsidiaries, in each case as determined by Borrower to be
appropriate to bring about the assumption, by merger, of the
Outside Debt from Pioneer USA to Borrower as contemplated by
this Section.
Section 5.2
Negative Covenants. To conform
conditions under which each Lender is willing to
Borrower, and to induce Managing Agents and each
Agreement and make the Loans to Borrower, unless
previously agreed otherwise in writing, Borrower
Subsidiaries, covenants and agrees that:
with the terms and
have credit outstanding to
Lender to enter into this
Required Lenders shall have
severally for itself and its
(a)
Limitation on Debt. Borrower will not, and will not permit
any Restricted Subsidiary to, in any manner owe or be liable
for Debt except:
(1)
the Obligations;
(2)
Debt pursuant to the Primary Credit Facility and Debt
pursuant to the Canadian Credit Facility in a maximum
aggregate amount of $300,000,000;
(3)
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unsecured Debt among Designated Entities;
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(4)
Debt arising under capital leases which does not in
the aggregate for Borrower and all Restricted
Subsidiaries exceed $20,000,000 at any one time
outstanding;
(5)
Debt, other than Debt otherwise permitted by another
subparagraph of this Section 5.2(a), which, at the
time incurred, is at prevailing market rates of
interest and contains covenants and conditions and
events of default no more onerous to Designated
Entities than the terms of this Agreement; provided,
that no Default or Event of Default will result from
the incurrence of such Debt and be continuing;
(6)
guaranties of Debt which is the primary obligation of
a Designated Entity and permitted under this Section
5.2(a);
(7)
Debt arising (whether by contract or as a result of
statutory liability of a general partner) by virtue
of any Designated Entity being a general partner of a
general or limited partnership pursuant to agreements
in effect on the Effective Date not in excess of the
aggregate amounts permitted to be incurred pursuant
to such agreements on the Effective Date for all such
Debt and other such Debt otherwise permitted pursuant
to the other subparagraphs of this Section 5.2(a);
and
(8)
Debt existing on the Effective Date which is
disclosed (i) in the Updated Financial Statements or
(ii) in the Disclosure Schedule and any extensions,
renewals or replacements thereof upon terms no more
onerous to Borrower than the terms of this Agreement
or the terms of the instruments evidencing such Debt
as of the date of this Agreement.
(b)
Negative Pledge. Borrower will not, and will not permit any
of its Restricted Subsidiaries to, create, assume or permit to
exist any Lien upon any of their respective material property,
except Permitted Liens.
(c)
Limitation on Mergers. Except as expressly provided in this
paragraph, Borrower will not, and will not permit any of its
Restricted Subsidiaries to, merge or consolidate with or into
any other business entity, except (1) Borrower may be party to
a merger or consolidation so long as the surviving entity is
Borrower and no Default will exist and the Obligations do not
exceed the Facility Amount after giving effect thereto and (2)
any Restricted Subsidiary may be a party to any merger or
consolidation so long as the surviving entity is a Restricted
Subsidiary and any Guaranty of, or Pledge Agreement by, such
Restricted Subsidiary continues as to such surviving entity,
no Default will
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exist, and the Obligations do not exceed the Facility Amount
after giving effect thereto.
(d)
Limitation on Disposition of Capital Stock of Restricted
Subsidiaries. Borrower will not, and will not permit any
Restricted Subsidiary to, sell, transfer or otherwise dispose
of capital stock of any Restricted Subsidiary, except that
Borrower and any Restricted Subsidiary may sell, issue,
transfer or otherwise dispose of the capital stock of any
Restricted Subsidiary to Borrower or to another Restricted
Subsidiary.
(e)
Limitation on Restricted Payments. Borrower will not, and
will not permit any Restricted Subsidiary to, make Restricted
Payments in excess of $150,000,000 in the aggregate for the
duration of this Agreement for all such Restricted Payments;
provided, however, that in the event that any Unrestricted
Subsidiary of Borrower is redesignated to be a Restricted
Subsidiary of Borrower for purposes of this Agreement, then
for purposes of determining compliance with this Section, all
Restricted Payments made to such Unrestricted Subsidiary shall
be deducted from the aggregate total of all Restricted
Payments made for the duration of this Agreement. No
Restricted Payment may be made (1) if the Obligations shall
exceed the Facility Amount, (2) if any Default or Event of
Default shall have occurred and be continuing, or (3) if as a
result thereof, any Default or Event of Default shall have
occurred and be continuing.
(f)
Transactions with Affiliates. Borrower will not, and will not
permit any of its Restricted Subsidiaries to, engage in any
material transaction with any of Borrower's Affiliates on
terms which are less favorable than those which would have
been obtainable at the time in arm's-length dealing with
Persons other than such Affiliates, provided, however that
such restriction shall not apply to transactions among
Borrower and its Restricted Subsidiaries and (ii) among
Restricted Subsidiaries.
(g)
Limitations on Restricted Subsidiaries. Borrower will not
permit any Restricted Subsidiary to become subject to
covenants which:
(1)
restrict dividends or dividend capacity;
(2)
restrict loans and advances to Borrower;
(3)
restrict the ability to make tax payments or
management payments to Borrower; or
(4)
restrict the capitalization structure of any
Restricted Subsidiary.
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(h)
Limitation on Sale/Leasebacks. Designated Entities will not
enter into any arrangement, directly or indirectly, with any
Person whereby any Designated Entity shall sell or transfer
any material asset, and whereby any Designated Entity shall
then or immediately thereafter rent or lease as lessee such
asset or any part thereof.
(i)
Conversion between Restricted Subsidiary and Unrestricted
Subsidiary. Borrower may convert any Restricted Subsidiary to
an Unrestricted Subsidiary by giving Administrative Agent at
least five (5) Business Days' notice of such conversion in the
form of Exhibit K-1 attached hereto; provided that (1) no
Restricted Subsidiary shall be so converted so long as it owns
or will thereafter own, directly or indirectly, any interest
in any material asset or in another Restricted Subsidiary
unless the value of such material assets, together with the
aggregate of all Restricted Payments made and the value of any
other material assets determined as aforesaid of any
Restricted Subsidiaries converted to Unrestricted Subsidiaries
do not exceed in the aggregate the limitation on Restricted
Payments contained in Section 5.2(e) hereof, and (2) no such
conversion shall be made if after giving effect to such
conversion, any Default would exist. Upon any such conversion
of a Restricted Subsidiary to an Unrestricted Subsidiary, such
Subsidiary shall be released from its obligations under its
Guaranty, and Managing Agents and Lenders shall execute and
deliver a release substantially in the form of Exhibit K-2
hereto. Borrower may convert any Unrestricted Subsidiary to a
Restricted Subsidiary by giving Administrative Agent at least
five (5) Business Days' notice of such conversion in the form
of Exhibit K-1 attached hereto; provided that no such
conversion may be made if after giving effect to such
conversion, any Default would exist.
(j)
Margin Securities. Proceeds of the Loans will not be used to
purchase or carry Margin Stock except in compliance with the
Margin Regulations.
(k)
Modification to Canadian Credit Facility. Borrower shall not
make, permit or otherwise consent to any amendment or
modification to, or seek a waiver of, any representation,
warranty or covenant contained in the Canadian Credit Facility
without the prior consent of the Required Lenders, such
consent not to be unreasonably withheld.
Section 5.3
Financial Covenants. To conform with the terms and
conditions under which each Lender is willing to have credit outstanding to
Borrower, and to induce Managing Agents and each Lender to enter into this
Agreement and make the Loans to Borrower, unless Required Lenders shall have
previously agreed otherwise in writing, Borrower severally for itself and its
Subsidiaries, covenants and agrees that:
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(a)
EBITDAX to Consolidated Interest Expense Ratio. The ratio of
Borrower's "EBITDAX" to "Consolidated Interest Expense" for
the last four rolling Fiscal Quarters will not be less than
3.75 to 1.0; provided, however, that the EBITDAX to
Consolidated Interest Expense Ratio shall first be calculated
on December 31, 1997; provided further that for the periods
for calculation ending on or before September 30, 1998, each
reference to "for the last four rolling Fiscal Quarters" shall
be deemed to be a reference to the period from October 1, 1997
through the date of such calculation. As used in this
paragraph, the term "Consolidated Interest Expense" means for
any period, total interest expense, whether paid or accrued,
of Borrower and its Subsidiaries on a Consolidated basis,
including, without limitation, all commissions, discounts and
other fees and charges owed with respect to Letters of Credit
(as defined in the Primary Credit Facility). As used in this
paragraph, the term "EBITDAX" means for any period the sum of
the amounts for such period of Consolidated net income,
Consolidated Interest Expense, depreciation expense, depletion
expense, amortization expense, federal and state income taxes,
exploration and abandonment expense and other non-cash charges
and expenses, all as determined on a Consolidated basis for
Borrower and its Subsidiaries.
(b)
Consolidated Total Funded Debt to Total Capitalization.
Borrower's Consolidated Total Funded Debt to Total
Capitalization will not, as of the last day of any Fiscal
Quarter, be greater than 60%.
ARTICLE 6
EVENTS OF DEFAULT AND REMEDIES
Section 6.1
Events of Default. Each of the following events
constitutes an "Event of Default" under this Agreement:
(a)
Borrower shall default on the payment when due of any
principal on any of its Loans or any of its Notes;
(b)
Borrower fails to pay any of its Obligations (other than
principal) when due and payable, whether interest in respect
of any Loan or any fee or any other amounts payable under any
of the Loan Documents and such failure shall continue
unremedied for a period of five (5) Business Days; provided,
however, that any such Default shall not constitute an Event
of Default if subsequently available information indicates
that a payment made when due was insufficient because of a
good faith error in calculation so long as Borrower shall cure
such deficiency within five (5) Business Days after Borrower
becomes aware of such deficiency;
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(c)
any Designated Entity fails to duly observe, perform or comply
with any covenant, agreement, condition or provision set forth
in Section 5.1(d) or 5.2 of this Agreement;
(d)
any Designated Entity fails (other than as referred to in
subsections (a), (b) and (c) above) to duly observe, perform
or comply with any covenant, agreement, condition or provision
of any Loan Document applicable to it (even if all or part of
such agreement or covenant is void or unenforceable), and such
failure is not remedied within thirty (30) Business Days after
written notice thereof shall have been sent to Borrower by
Administrative Agent or any Lender;
(e)
any representation or warranty previously, presently or
hereafter made in writing or deemed made by or on behalf of
any Designated Entity in connection with any Loan Document
shall have been false or incorrect in any material respect on
any date on or as of which made and either (1) an Executive
Officer of Borrower had actual knowledge that such
representation or warranty was false or incorrect in a
material respect when made or (2) if no Executive Officer had
such knowledge, such representation or warranty shall continue
to be false or incorrect in any material respect thirty (30)
Business Days after the earlier of an Executive Officer of
Borrower obtaining actual knowledge thereof or written notice
thereof shall have been sent to Borrower by Administrative
Agent;
(f)
any Designated Entity (1) fails to pay when due Debt in excess
of $20,000,000 or (2) breaches or defaults in the performance
of any agreement or instrument by which any such Debt in
excess of $20,000,000 is issued, evidenced, governed, or
secured, and any such failure, breach or default continues
beyond any applicable period of grace provided therefor;
(g)
either (1) any "accumulated funding deficiency" (as defined in
Section 412(a) of the Internal Revenue Code of 1986, as
amended) in excess of $10,000,000 exists with respect to any
ERISA Plan, whether or not waived by the Secretary of the
Treasury or his delegate, or (2) any Termination Event which
has a Material Adverse Effect occurs with respect to any ERISA
Plan and the then current value of such ERISA Plan's benefit
liabilities exceeds the then current value of such ERISA
Plan's assets available for the payment of such benefit
liabilities by more than $10,000,000 (or in the case of a
Termination Event involving the withdrawal of a substantial
employer, the withdrawing employer's proportionate share of
such excess exceeds such amount);
(h)
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any Designated Entity:
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(1)
suffers the commencement of any involuntary
bankruptcy, reorganization, debt arrangement, winding
up, dissolution, official management or
administration, or other case or proceeding under any
bankruptcy or insolvency law or the entry against it
of a judgment, decree or order for relief by a court
of competent jurisdiction in such a case or
proceeding, which in either case remains undismissed
for a period of sixty (60) days; provided that each
Designated Entity hereby expressly authorizes each
Agent and each Lender to appear in any court
proceeding during such sixty (60) day period to
preserve, protect and defend their rights under the
Loan Documents;
(2)
commences a voluntary case under any applicable
bankruptcy, insolvency or similar law now or
hereafter in effect, including, without limitation,
the United States Bankruptcy Code or the Corporations
Law of Australia, as from time to time amended; or
applies for or consents or acquiesces to the entry of
an order for relief in an involuntary case under any
such law, or becomes insolvent or makes a general
assignment for the benefit of creditors, or fails
generally to pay (or admits in writing its inability
to pay) its debts as such debts become due, or takes
corporate or other action to authorize any of the
foregoing;
(3)
suffers the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee,
sequestrator, administrator or similar official of
all or a substantial part of its assets in a
proceeding brought against or initiated by it, and
such appointment is neither made ineffective nor
discharged within sixty (60) days after such event or
such appointment or taking possession is at any time
consented to, requested by, or acquiesced to by such
Designated Entity;
(4)
suffers the entry against it of a final judgment for
the payment of money in excess of $20,000,000 (not
covered by insurance satisfactory to Administrative
Agent in its discretion), unless the same is
discharged within thirty (30) days after the date of
entry thereof or an appeal or appropriate proceeding
for review thereof is taken within such period and a
stay of execution pending such appeal is obtained and
continues; or
(5)
suffers a writ or warrant of attachment or any
similar process to be issued by any court against all
or any substantial part of its property, and such
writ or warrant of attachment or any similar process
is not stayed or released within thirty (30) days
after the entry or levy thereof or after any stay is
vacated or set aside;
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(i)
(a) any person (other than Borrower, a Restricted Subsidiary
of Borrower or any employee benefit plan of Borrower or any of
its Subsidiaries) or group (as such term is used in Section
13(d) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended) shall acquire, directly or indirectly, beneficial
ownership of an aggregate of 35% or more of the issued and
outstanding voting stock of Borrower or (b) during any period
of two consecutive years ending on or after the Effective
Date, as determined as of the last day of each calendar
quarter after the Effective Date, the individuals (the
"Incumbent Directors") who at the beginning of such period
constituted the Board of Directors of Borrower (other than
additions thereto or removals therefrom from time to time
thereafter approved by a vote of at least two-thirds of such
Incumbent Directors) shall cease for any reason to constitute
50% or more of the Board of Directors of Borrower; provided,
however, that for each determination period ending on or
before September 30, 1999, each determination period shall be
deemed to be a period from the Effective Date through the date
of such calculation;
(j)
any of the Loan Documents are determined to be invalid or
unenforceable in any material respect;
(k)
(1)
any Restricted Subsidiary other than any Foreign
Restricted Subsidiary, and any of their respective
Restricted Subsidiaries fails to execute and deliver
to Collateral Agent a Guaranty of the type referred
to in clause (i) of the definition of "Guaranty",
within 30 days of becoming a Restricted Subsidiary;
(2)
unless and to the extent that any Foreign Restricted
Subsidiary or any other Restricted Subsidiary is
prohibited from, or subject to adverse tax
consequences as a result of, guaranteeing the
Obligations under this Agreement (a) under Section
956 of the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time
("Section 956") (b) pursuant to contractual
restrictions in existence prior to the Effective Date
or (c) as a matter of corporate law, any Foreign
Restricted Subsidiary or any other Restricted
Subsidiary fails to execute and deliver to Collateral
Agent, a Guaranty of the type referred to in clause
(i) of the definition of "Guaranty" together with in
the case of any Foreign Restricted Subsidiary, a
notice in relation to such Guaranty or, in the case
of any Restricted Subsidiary subject to the
Corporation Laws of Australia, a certificate under
Section 206(6) of the Corporations Laws of Australia
in relation to such Guaranty, in each case (1) as
soon as practicable following the termination or
inapplicability of the contractual restrictions,
corporate law prohibitions and adverse tax
consequences referred to in this paragraph or (2) if
no such contractual restrictions,
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corporate law prohibitions and adverse tax
consequences apply, as soon as practicable following
a determination that such contractual restrictions,
corporate law prohibitions and adverse tax
consequences do not apply;
(l)
unless and to the extent that (a) any such pledge or mortgage
would result in (i) substantial stamp or similar taxes or (ii)
adverse tax consequences pursuant to Section 956, (b) any such
pledge or mortgage is prohibited either (i) pursuant to
contractual restrictions in existence prior to the Effective
Date or (ii) as a matter of corporate law, or (c) a Guaranty
of the type referred to in clause (i) of the definition of
"Guaranty" has been executed and delivered by the Restricted
Subsidiary the capital stock or shares of which would
otherwise be subject to pledge or mortgage under this
paragraph, Borrower, or any Subsidiary of Borrower, owning
capital stock or shares of any Restricted Subsidiary of any
Foreign Restricted Subsidiary, fails (x) to execute and
deliver to Collateral Agent the Pledge Agreements, together
with sixty-five percent (65%) of all issued and outstanding
stock or shares of such Restricted Subsidiary or such Foreign
Restricted Subsidiary and stock powers or share transfers
executed in blank, together with a either a certificate under
Section 206 (6) of the Corporations Law of Australia or a
notice of the type described in Section 6.1(k)(2) hereof, in
each case in relation to such Pledge Agreement, as the case
may be and if applicable, as soon as practicable after the
termination or inapplicability of such contractual
restrictions and corporate law prohibitions and adverse tax
consequences referred to in this paragraph and (y) to repay
all Obligations and other amounts as soon as practical after
the termination or inapplicability of such contractual
restrictions and corporate law prohibitions and adverse tax
consequences referred to in this paragraph; or
(m)
any Designated Entity, to the extent applicable, fails, (x)
promptly upon the reasonable request of the Managing Agents at
any time or from time to time prior to the applicable Stock
Pledge Release Date, as the case may be, (1) to execute,
acknowledge or deliver, or to cause to be executed,
acknowledged or delivered, or to register, record or file, or
to cause to be registered, recorded or filed, any document or
instrument necessary or advisable or as Required Lenders may
from time to time reasonably deem to be necessary or advisable
in connection with the grant, creation, preservation,
perfection or maintenance, as first, prior and perfected
Liens, the Liens created, or intended to be created, by the
applicable Security Instruments, subject only to Permitted
Liens or (2) to perform or to continue to perform at all times
and from time to time all actions necessary or advisable or
reasonably deemed to be necessary or advisable by the Required
Lenders in connection with such creation, preservation,
perfection and maintenance; and (y) to repay all Obligations
and other amounts as soon as
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practical after receipt of the reasonable request of Managing
Agents pursuant to the foregoing clause (x);
provided, however, that the foregoing events which affect only Restricted
Subsidiaries that (a) are not guarantors of the Obligations, and (b) are
immaterial (as determined by the Managing Agents), shall not constitute "Events
of Default" under this Agreement. It is agreed by the parties hereto that so
long as Borrower or any Restricted Subsidiary has made reasonable efforts under
the circumstances to obtain the approvals required by Section 205(10) of the
Corporations Law of Australia (if applicable), the foregoing paragraphs (k)(2),
(l) and (m) shall not require any Restricted Subsidiaries to provide any pledge
or guaranty prohibited by corporate law unless the requirements of such Section
205(10) of the Corporations Law of Australia, to the extent applicable, have
been satisfied; and
(k)
Any "Event of Default" as defined in the Canadian Credit
Facility or the Primary Credit Facility shall occur; provided
that the occurrence of a "Default" as defined in the Canadian
Credit Facility or the Primary Credit Facility shall
constitute a Default under this Agreement; provided further
that if such "Default" is cured or waived under the Canadian
Credit Facility or the Primary Credit Facility, as applicable,
then such "Default" shall no longer constitute a Default under
this Agreement.
Upon the occurrence of an Event of Default described in Section 6.1(h)(1), (2)
or (3) with respect to Borrower, the Commitments shall automatically terminate
and all of the Obligations shall thereupon be immediately due and payable,
without demand, presentment, notice of demand or of dishonor and nonpayment,
protest, notice of protest, notice of intention to accelerate, declaration or
notice of acceleration, or any other notice or declaration of any kind, all of
which are hereby expressly waived by Borrower and each Designated Entity who at
any time ratifies or approves this Agreement. During the continuance of any
other Event of Default, Administrative Agent at any time and from time to time
upon written instructions from Required Lenders (which, for purposes of this
sentence only, shall be determined giving effect to each Lender's outstanding
Swing Line Advances and Competitive Bid Advances) shall, by notice to Borrower
(but otherwise without notice to any other Designated Entity), declare the
Commitments to be terminated, and/or declare any or all of the Obligations
immediately due and payable, and all such Obligations shall thereupon be
immediately due and payable, without demand, presentment, notice of demand or
of dishonor and nonpayment, protest, notice of protest, notice of intention to
accelerate, declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly waived by Borrower
and each Designated Entity who at any time ratifies, approves or guaranties
this Agreement.
Section 6.2
Remedies. If any Default shall occur and be
continuing, each Lender or Administrative Agent on behalf of Lenders may
protect and enforce its rights under the Loan
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Documents by any appropriate proceedings, including, without limitation,
proceedings for specific performance of any covenant or agreement contained in
any Loan Document, and each Lender may enforce the payment of any Obligations
due it or enforce any other legal or equitable rights which it may have.
Additionally, under such circumstances, the Required Lenders or, at the
direction of Required Lenders, the Trustee (or Collateral Agent) may proceed to
protect the Lenders' rights under the Security Instruments. All rights,
remedies and powers conferred upon Administrative Agent and Lenders under the
Loan Documents are cumulative and not exclusive of any other rights, remedies
or powers available under the Loan Documents or at law or in equity.
Section 6.3
Annulment of Acceleration. If a declaration of
acceleration is made pursuant to this Article 6, then Required Lenders, by
written notice to Borrower and Administrative Agent, may collectively rescind
and annul such declaration in its entirety; provided, that at the time such
declaration is annulled and rescinded: (a) no judgment or decree has been
entered for the payment of any moneys due pursuant to any Note or this
Agreement; (b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and this Agreement (other than principal amounts which
may have become due as a result of acceleration), including interest upon
overdue interest, to the extent payment thereof is lawful, shall have been duly
paid; and (c) each and every other Event of Default which has theretofore
occurred shall have been waived pursuant to Section 8.1 or otherwise made good
or cured.
Section 6.4
Indemnity. Borrower hereby indemnifies each Agent and
each Lender, from and against any and all liabilities, obligations, claims,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements (including reasonable fees of attorneys, accountants, experts and
advisors) of any kind or nature whatsoever (in this Section collectively called
"liabilities and costs") which to any extent (in whole or in part) may be
imposed on, incurred by, or asserted against such Agent or such Lender as a
result of, arising out of, relating to or in connection with:
(a)
the Loan Documents to which Borrower or one or more of its
Subsidiaries is a party or the rights provided therein
(including the enforcement or defense thereof);
(b)
the direct or indirect application or proposed application of
the proceeds of any Loan to or for Borrower or any of its
Subsidiaries;
(c)
any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan to
or for Borrower or any of its Subsidiaries;
(d)
any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter
(including enforcement) relating to any
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Environmental Law or the condition of any facility or property
owned, leased or operated by Borrower or any of its
Subsidiaries; or
(e)
the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from,
any facility owned or operated by Borrower or any of its
Subsidiaries of any hazardous or toxic substance (including
any liabilities and costs under any Environmental Law),
regardless of whether caused by, or within the control of,
Borrower or any of its Subsidiaries; or any misrepresentation,
inaccuracy or any breach in or of Section 4.1(j) or Section
5.1(i) by or with respect to Borrower or any of its
Subsidiaries.
The foregoing indemnification shall not apply to the extent such liabilities
and costs are determined to have resulted or been caused, in whole or in part,
by the gross negligence or willful misconduct on the part of such Agent or
Lender. THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH
LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN
PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND EXCEPT AS PROVIDED BY THE
IMMEDIATELY PRECEDING SENTENCE. In the event that any claim or demand for
which Borrower would be liable to any Agent or any Lender under this Section is
asserted against or sought to be collected from any Agent or any Lender by a
third party, Agent or such Lender shall promptly notify Borrower of such claim
or demand. Borrower shall have the lesser of: (i) thirty (30) Business Days
from receipt of the above notice; or (ii) three (3) Business Days prior to the
expiration of any period after which a default judgment may be entered against
such Agent or Lender (the "Notice Period") to notify such Agent and/or Lender
whether or not Borrower desires, at the sole cost and expense of Borrower, to
defend such Agent and/or Lender against such claim or demand. In the event
that Borrower notifies such Agent and/or Lender within the Notice Period, that
it desires to defend such Agent and/or Lender against such claim or demand,
Borrower shall have the right to settle or otherwise dispose of such claim or
demand (other than claims alleging criminal violations) on such terms as
Borrower, with the consent of the indemnified party (which consent shall not be
unreasonably withheld) shall deem appropriate; provided that:
(w)
counsel designated by Borrower is reasonably
acceptable to the Managing Agents and the affected
Lender;
(x)
Borrower will have acknowledged in writing that this
Section will cover any liabilities and costs in any
such claim or demand;
(y)
in the sole determination of the Managing Agents and
the affected Lender, Borrower will have the financial
ability to pay such liabilities and costs; and
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(z)
Borrower shall thereafter consult with the Managing
Agents and the affected Lender with respect to such
claim or demand; and
provided further, that each of Agents and the affected Lender shall have the
right at all times to participate in any proceeding, at their sole cost and
expense, subject, however, to Borrower's right to control the defense of all
proceedings concerning such claim or demand.
In the event that Borrower fails to give such Agent and/or Lender such notice,
such Agent and/or Lender may defend against such claim or demand; provided,
however, that Borrower's obligation to reimburse such Agent and/or Lender shall
be limited to a single law firm of such Agent and/or Lender (unless Borrower
otherwise consents, which consent shall not be unreasonably withheld); provided
further, that Borrower shall have the right at all times to participate in any
such proceeding, at its sole cost and expense, subject, however, to the right
of such Agent and/or Lender to control the defense of all proceedings
concerning such claim or demand. As used in this Section, the terms "Agent"
and "Lender" shall refer not only to the Persons designated as such in Section
1.1 but also to each director, officer, agent, attorney, employee and
representative of such Person.
ARTICLE 7
AGENTS
Section 7.1
Appointment and Authority. NationsBank of Texas,
N.A. is hereby appointed Administrative Agent hereunder and under each other
Loan Document, CIBC Inc. is hereby appointed Documentation Agent hereunder and
under each other Loan Document, Morgan Guaranty Trust Company of New York is
hereby appointed Documentation Agent hereunder and under each other Loan
Document and The Chase Manhattan Bank is hereby appointed Syndication Agent
hereunder and under each other Loan Document, each Co-Agent is hereby appointed
Co-Agent hereunder and under each other Loan Document, and each of the Lenders
hereby authorizes each such Agent to act as the agent of such Lender hereunder
and each other Loan Document to the extent provided herein or therein. In
addition, each Lender hereby irrevocably authorizes Administrative Agent, and
Administrative Agent hereby undertakes, to receive payments of principal,
interest due hereunder as specified herein and to act as Collateral Agent under
the Security Instruments. In addition, each Lender hereby authorizes each
Agent, and each Agent hereby undertakes to take all other actions and to
exercise such powers under the Loan Documents as are specifically delegated to
such Agent by the terms hereof or thereof, together with all other powers
reasonably incidental thereto. No Co-Agent has any duties or responsibilities
whatsoever as Co-Agent (as opposed to its capacity as Lender) under or in
connection with this Agreement or any of the Loan Documents. The relationship
of each Agent to Lender is only that of one commercial bank acting as
administrative agent for others, and nothing in the Loan Documents shall be
construed to
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constitute any Agent a trustee or other fiduciary for any holder of any of the
Notes or of any participation therein, nor to impose on any Agent duties and
obligations other than those expressly provided for in the Loan Documents.
None of the Agents shall have implied duties to Lenders, or any obligations to
Lenders to take any action under the Loan Documents, except any action by an
Agent specifically provided by the Loan Documents to be taken by such Agent.
With respect to any matters not expressly provided for in the Loan Documents
and any matters which the Loan Documents place within the discretion of any
Agent, such Agent shall not be required to exercise any discretion or take any
action, and each such Agent may request instructions from Lenders with respect
to any such matter, in which case such Agent shall be required to act or to
refrain from acting (and shall be fully protected and free from liability to
any and all Lenders and Agents in so acting or refraining from acting) upon the
instructions of Required Lenders (including itself); provided, however, that no
Agent shall be required to take any action which exposes it to a risk of
personal liability that it considers unreasonable or which is contrary to the
Loan Documents or to applicable law unless indemnified to its satisfaction by
Lenders or Borrower. Upon receipt by Administrative Agent from Borrower of any
communication calling for action on the part of Lenders or upon notice from any
Lender to Administrative Agent of any Default or Event of Default,
Administrative Agent shall promptly notify each Lender thereof.
Section 7.2
Agent's Reliance. No Agent or any of their
respective directors, officers, agents, attorneys, or employees shall be liable
for any action taken or omitted to be taken by any of them under or in
connection with the Loan Documents, including their negligence of any kind,
except that each shall be liable for its own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, each Agent:
(a)
may treat the payee of any Note as the holder thereof until
Administrative Agent receives written notice of the assignment
or transfer thereof in accordance with this Agreement, signed
by such payee and in form satisfactory to Administrative
Agent;
(b)
may consult with legal counsel (including counsel for
Borrower), independent public accountants and other experts
selected by such Agent and shall not be liable for any action
taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts;
(c)
makes no warranty or representation to any Lender or to any
other Agent and shall not be responsible to any Lender or
Agent for any statements, warranties or representations made
in or in connection with the Loan Documents by any other
Person;
(d)
shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or
conditions of the Loan Documents
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on the part of any Designated Entity or to inspect the
property (including the books and records) of any Designated
Entity;
(e)
shall not be responsible to any Lender or to any other Agent
for the due execution (other than its own due execution and
delivery), legality, validity, enforceability, genuineness,
existence, sufficiency or value of any Loan Document, the
Credit Facility Agreement or any instrument or document
furnished in connection herewith, or any collateral;
(f)
may rely upon the representations and warranties of any
Designated Entity and the Lenders in exercising its powers
hereunder;
(g)
shall not be responsible for the satisfaction of any condition
specified in Article 3, except receipt by an Agent of items
required to be delivered to such Agent; and
(h)
shall incur no liability under or in respect of the Loan
Documents by acting upon any notice, consent, certificate or
other instrument or writing (including any telecopy, telegram,
cable or telex) believed by it to be genuine and signed or
sent by the proper Person or Persons.
Section 7.3
Lenders' Credit Decisions. Each Lender acknowledges
that it has, independently and without reliance upon any Agent or any other
Lender, made its own analysis of Designated Entities and the transactions
contemplated hereby and its own independent decision to enter into this
Agreement and the other Loan Documents. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents.
Section 7.4
Indemnification. Each Lender agrees to indemnify
each Agent (to the extent not reimbursed by Borrower within ten (10) days after
demand) from and against such Lender's Percentage Share of any and all
liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (including reasonable fees
of attorneys, accountants, experts, and advisors) of any kind or nature
whatsoever (in this Section collectively called "liabilities and costs") which
to any extent (in whole or in part) may be imposed on, incurred by, or asserted
against such Agent growing out of, resulting from or in any other way
associated with any of the Loan Documents and the transactions and events
(including, without limitation, the enforcement thereof) at any time associated
therewith or contemplated therein. THE FOREGOING INDEMNIFICATION SHALL APPLY
WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT
CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR
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OMISSION OF ANY KIND BY ANY AGENT, PROVIDED ONLY THAT NO LENDER SHALL BE
OBLIGATED UNDER THIS SECTION TO INDEMNIFY AN AGENT FOR THAT PORTION, IF ANY, OF
ANY LIABILITIES AND COSTS WHICH IS THE SOLE RESULT OF SUCH AGENT'S OWN
INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS DETERMINED IN A FINAL
JUDGMENT OF A COURT OF COMPETENT JURISDICTION. Cumulative of the foregoing,
each Lender agrees to reimburse Administrative Agent, each Documentation Agent
and Syndication Agent promptly upon demand for such Lender's Percentage Share
of any costs and expenses to be paid to Administrative Agent, the Documentation
Agent or the Syndication Agent by Borrower under Section 5.1(h) to the extent
that Administrative Agent, the Documentation Agent or the Syndication Agent is
not timely reimbursed for such expenses by Borrower as provided in such
section. As used in this Section the term "Agents" shall refer not only to the
Person(s) designated as such in Section 1.1 but also to each director, officer,
agent, attorney, employee and representative of such Person(s).
Section 7.5
Rights as Lender. In their respective capacity as a
Lender, each Agent shall have the same rights and obligations as any Lender and
may exercise such rights as though it were not an Agent. Each Agent may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with any of Designated Entities or their
Affiliates, all as if it were not an Agent hereunder and without any duty to
account therefor to any other Lender.
Section 7.6
Sharing of Set-Offs and Other Payments. Each Agent
and Lender agrees that if it shall, whether through the exercise of rights
under security documents or rights of banker's lien, setoff, or counterclaim
against any Designated Entity or otherwise, obtain payment of a portion of the
aggregate Obligations owed to it (other than in respect of its Swing Line
Advances and its Competitive Bid Advances) which, taking into account all
distributions made by Administrative Agent under Section 2.11, causes such
Agent or such Lender to have received more than it would have received had such
payment been received by Administrative Agent and distributed pursuant to
Section 2.11 (or, in the case of Swing Line Advances paid as provided in
Section 2.5(c) or in the case of Competitive Bid Advances paid as provided in
Section 2.22(b)), then it shall be deemed to have simultaneously purchased and
shall be obligated to purchase interests in the Obligations as necessary to
cause Administrative Agent and all Lenders to share all payments (other than in
respect of Swing Line Advances and Competitive Bid Advances) as provided for in
Section 2.11, and such other adjustments shall be made from time to time as
shall be equitable to ensure that all Agents and all Lenders share all payments
of Obligations (other than in respect of its Swing Line Advances and
Competitive Bid Advances) as provided in Section 2.11. If any Agent or any
Lender, whether in connection with setoff of amounts which might be subject to
setoff or otherwise, receives collateral or other protection for its
Obligations or such amounts which might be subject to setoff, such Agent or
Lender agrees, promptly upon demand, to take such action necessary so that all
Agents and all Lenders share in the benefits of such collateral ratably in
proportion to
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the Obligations owing to each of them. Nothing herein contained shall in any
way affect the right of any Agent or any Lender to obtain payment (whether by
exercise of rights of banker's lien, set-off or counterclaim or otherwise) of
indebtedness other than the Obligations. Borrower expressly consents to the
foregoing arrangements and agrees that any holder of any such interest or other
participation in the Obligations, whether or not acquired pursuant to the
foregoing arrangements, may to the fullest extent permitted by law exercise any
and all rights of banker's lien, set-off, or counterclaim as fully as if such
holder were a holder of the Obligations in the amount of such interest or other
participation. If all or any part of any funds transferred pursuant to this
Section is thereafter recovered from the seller under this Section which
received the same, the purchase provided for in this Section shall be deemed to
have been rescinded to the extent of such recovery, together with interest, if
any, if interest is required pursuant to court order to be paid on account of
the possession of such funds prior to such recovery.
Section 7.7
Investments. Whenever Administrative Agent in good
faith determines that it is uncertain about how to distribute to Lenders any
funds which it has received, or whenever Administrative Agent in good faith
determines that there is any dispute among Lenders about how such funds should
be distributed, Administrative Agent may choose to defer distribution of the
funds which are the subject of such uncertainty or dispute. If Administrative
Agent in good faith believes that the uncertainty or dispute will not be
promptly resolved, or if Administrative Agent is otherwise required to invest
funds pending distribution to Lenders, Administrative Agent may invest such
funds pending distribution (at the risk of the subject Borrower); all interest
on any such investment shall be distributed upon the distribution of such
investment and in the same proportion and to the same Persons as such
investment. All moneys received by Administrative Agent for distribution to
Lenders (other than to the Person who is Administrative Agent in its separate
capacity as a Lender) shall be held by Administrative Agent pending such
distribution solely as Administrative Agent for such Lenders, and
Administrative Agent shall have no equitable title to any portion thereof.
Section 7.8
Benefit of Article 7. The provisions of this Article
(other than the following Section 7.9) are intended solely for the benefit of
Agent and Lenders, and no Designated Entity shall be entitled to rely on any
such provision or assert any such provision in a claim or defense against Agent
or any Lender. Agent and Lenders may waive or amend such provisions as they
desire without any notice to or consent of any Designated Entity.
Section 7.9
Resignation and Removal. Any Agent may resign at any
time by giving written notice thereof to Lenders and Borrower. Each such
notice shall set forth the date of such resignation. Majority Lenders or
Borrower, with the consent (which shall not be unreasonably withheld) of
Majority Lenders (other than Agent to be removed) shall be entitled to remove
any Agent. Upon any such resignation or removal, Borrower may, with the
written concurrence (which shall not be unreasonably withheld) of Majority
Lenders (exclusive of any such resigned or removed Agent), designate a
successor Agent. If, within fifteen (15) days
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after the date of such resignation or removal, Borrower makes no such
designation or such written concurrence is not given, Majority Lenders
(exclusive of any such resigned or removed Agent) shall, with the consent of
Borrower (which consent shall not be unreasonably withheld or delayed), have
the right to appoint a successor Agent. A successor must be appointed for any
retiring Managing Agent, and such Managing Agent's resignation shall become
effective when such successor accepts such appointment. Upon the acceptance of
any appointment as a Managing Agent hereunder by a successor Managing Agent and
the satisfaction of all obligations on the part of such retiring or removed
Managing Agent necessary to facilitate succession, the retiring or removed
Managing Agent, as the case may be, shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. After any
Agent's resignation or removal hereunder, the provisions of this Article 7
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under the Loan Documents. Any out-going Agent
shall promptly execute all assignments and other documents necessary to
effectuate the transfer of the agency in connection with this Agreement and
shall promptly deliver all original documents and any collateral in its
possession to the successor Agents.
ARTICLE 8
MISCELLANEOUS
Section 8.1
Waivers and Amendments. No failure or delay (whether
by course of conduct or otherwise) by any Agent or any Lender in exercising any
right, power or remedy which any Agent or Lender may have under any of the Loan
Documents shall operate as a waiver thereof or of any other right, power or
remedy, nor shall any single or partial exercise by any Agent or Lender of any
such right, power or remedy preclude any other or further exercise thereof or
of any other right, power or remedy. No waiver of any provision of any Loan
Document and no consent to any departure therefrom shall ever be effective
unless it is in writing and signed as provided below in this Section, and then
such waiver or consent shall be effective only in the specific instances and
for the purposes for which given and to the extent specified in such writing.
No notice to or demand on any Designated Entity shall in any case of itself
entitle any Designated Entity to any other or further notice or demand in
similar or other circumstances. This Agreement and the other Loan Documents
set forth the entire understanding between the parties hereto with respect to
the transactions contemplated herein and therein and supersede all prior
discussions and understandings with respect to the subject matter hereof and
thereof, and no waiver, consent, release, modification or amendment of or
supplement to this Agreement or the other Loan Documents shall be valid or
effective against any party hereto unless the same is in writing and signed by
(a) if such party is a Designated Entity, by such Designated Entity, (b) if
such party is an Agent, by such Agent and (c) if such party is a Lender, by
such Lender or by Administrative Agent on behalf of Lenders with the written
consent of Required Lenders (or without further consent than that already
provided herein in the circumstances provided in Section 8.7). Notwithstanding
the foregoing or
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anything to the contrary herein or in any other Loan Document, no Agent shall,
without the prior consent of each Lender, execute and deliver on behalf of any
Lender any waiver or amendment which would:
(i)
increase the Commitment of such Lender or subject such Lender
to any additional obligations;
(ii)
reduce or forgive any fees hereunder, or the principal of, or
interest on, such Lender's Notes;
(iii)
postpone any date fixed for any payment of any fees hereunder,
or principal of, or interest on, such Lender's Notes;
(iv)
amend the definitions herein of "Required Lenders" or
"Majority Lenders" or otherwise change the aggregate amount of
Percentage Shares which is required for Administrative Agent,
any other Agent, Lenders or any of them to take any particular
action under the Loan Documents;
(v)
release collateral (except as expressly contemplated by this
Agreement) or any Borrower from its obligation to pay such
Lender's Notes or any Restricted Subsidiary from its Guaranty
(except upon the Restricted Subsidiary becoming an
Unrestricted Subsidiary as specified in this Agreement);
(vi)
amend this Section 8.1;
(vii)
extend the Loan Commitment Period;
(ix)
amend, modify or waive any provision applicable to the
indemnification of any Lender;
(x)
consent to the assignment or transfer by any Designated Entity
of any of its rights or obligations under this Agreement or
the other Loan Documents; or
(xi)
amend, modify or waive the rights and obligations of the
Agents; provided, that no obligation to any Designated Entity
of any Lender or any Agent may be amended, modified or waived
without the written approval of Borrower, which approval shall
not be unreasonably withheld.
Notwithstanding the foregoing or anything to the contrary herein or in
any other Loan Document, no provision of Article 7 may be amended in any way
which impacts or affects any Agent in its capacity as an Agent (as opposed to
its capacity as a Lender) without the prior written consent of such Agent.
Except as provided in the preceding three sentences or as
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expressly provided in any Loan Document, the Required Lenders may waive,
modify, amend or supplement this Agreement and each of the other Loan
Documents.
Section 8.2
Survival of Agreements; Cumulative Nature. Each
Designated Entity's various representations, warranties, covenants, indemnities
and agreements in the Loan Documents shall survive the execution and delivery
of this Agreement and the other Loan Documents and the performance hereof and
thereof, including the making or granting of the Loans and the delivery of the
Notes, and the other Loan Documents, and shall further survive until all of the
Obligations are paid in full to Agents and Lenders and all of Agents' and
Lenders' obligations to Borrower are terminated, provided that, notwithstanding
the foregoing, certain Obligations of certain Designated Entities under their
respective Guaranties shall survive or be reinstated as provided in such
Guaranties. The representations, warranties, indemnities, and covenants made
by any Designated Entity in any Loan Documents, and the rights, powers, and
privileges granted to Agents and Lenders in the Loan Documents, are cumulative.
Section 8.3
Notices. All notices, requests, consents, demands
and other communications required or permitted under any Loan Document shall be
in writing, unless otherwise specifically provided in such Loan Document
(provided that Administrative Agent may give telephonic notices to the other
Agents and Lenders), and shall be deemed sufficiently given or furnished if
delivered by personal delivery, by telecopy (with telephonic confirmation of
transmission), by delivery service with proof of delivery, or by registered or
certified United States mail, postage prepaid, to Borrower at the address of
Borrower specified on the signature pages hereto and to each Agent and each
Lender at their addresses specified on the signature pages hereto (unless
changed by similar notice in writing given by the particular Person whose
address is to be changed). Any such notice or communication shall be deemed to
have been given:
(a)
in the case of personal delivery or delivery service, as of
the date of first attempted delivery during normal business
hours at the address provided herein;
(b)
in the case of telecopy, upon receipt; or
(c)
in the case of registered or certified United States mail,
three (3) days after deposit in the mail, postage prepaid;
provided, however, that no Request for Advance or Rate
Election shall become effective until actually received by
Administrative Agent.
Section 8.4
Parties in Interest. All grants, covenants and
agreements contained in the Loan Documents shall bind and inure to the benefit
of the parties thereto and their respective successors and assigns; provided,
however, that no Designated Entity may assign or
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transfer any of its rights or delegate any of its duties or obligations under
any Loan Document without the prior written consent of all Lenders.
Section 8.5
Governing Law. THE LOAN DOCUMENTS SHALL BE DEEMED
CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS OF THE STATE OF TEXAS AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. CHAPTER 15 OF TEXAS REVISED CIVIL STATUTES
ANNOTATED ARTICLE 5069 (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS
AND REVOLVING TRI-PARTY ACCOUNTS) DOES NOT APPLY TO THIS AGREEMENT OR TO THE
NOTES.
Section 8.6
Limitation on Interest. It is the intention of the
parties hereto to conform strictly to applicable usury laws and, anything
herein or any other Loan Document to the contrary notwithstanding, the
obligations of Designated Entities to a Lender or an Agent under this Agreement
and the Loan Documents shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt thereof would be
contrary to provisions of law applicable to such Lender or Agent limiting rates
of interest which may be charged or collected by such Lender or Agent.
Accordingly, if the transactions contemplated hereby would be usurious under
laws applicable to a Lender or Agent (including the federal and state laws of
the United States of America or of any other jurisdiction whose laws may be
mandatorily applicable to such Lender or Agent notwithstanding anything to the
contrary in this Agreement or any other Loan Document) then, in that event,
notwithstanding anything to the contrary in this Agreement or any other Loan
Document, it is agreed as follows:
(a)
the provisions of this Section shall govern and control;
(b)
the aggregate of all consideration which constitutes interest
under applicable law that is contracted for, taken, reserved,
charged or received under this Agreement, or under any of the
aforesaid agreements or otherwise in connection with this
Agreement or any other Loan Document by such Lender or Agent
shall under no circumstances exceed the maximum amount of
interest allowed by applicable law (such maximum lawful
interest rate, if any, with respect to each Lender and each
Agent herein called the "Maximum Lawful Rate"), and any excess
shall be canceled automatically and if theretofore paid shall
be credited to the relevant Designated Entity by such Lender
or Agent (or, if such consideration shall have been paid in
full, such excess refunded to the relevant Designated Entity);
(c)
all sums paid, or agreed to be paid, to such Lender or Agent
for the use, forbearance and detention of the indebtedness of
the relevant Designated Entity
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to such Lender or Agent hereunder or under any other Loan
Document shall, to the extent permitted by laws applicable to
such Lender or Agent, as the case may be, be amortized,
prorated, allocated and spread throughout the full term of
such indebtedness until payment in full so that the actual
rate of interest is uniform throughout the full term thereof;
(d)
if at any time the interest provided pursuant to any provision
of this Agreement or any other Loan Document, together with
any other fees payable pursuant to this Agreement or any other
Loan Document and deemed interest under laws applicable to
such Lender or Agent, exceeds the amount which would have
accrued at the Maximum Lawful Rate, the amount of interest and
any such fees to accrue to such Lender or Agent pursuant to
this Agreement or any other Loan Document shall be limited,
notwithstanding anything to the contrary in this Agreement or
any other Loan Document, to that amount which would have
accrued at the Maximum Lawful Rate, but any subsequent
reductions, as applicable, shall not reduce the interest to
accrue to such Lender or Agent pursuant to this Agreement or
any other Loan Document below the Maximum Lawful Rate until
the total amount of interest accrued pursuant to this
Agreement or such other Loan Document, as the case may be, and
such fees deemed to be interest equals the amount of interest
which would have accrued to such Lender or Agent if a varying
rate of interest per annum equal to the interest provided
pursuant to Section 2.3 or any other relevant Section hereof
(other than this Section) and the Notes, as applicable, had at
all times been in effect, plus the amount of fees which would
have been received but for the effect of this Section; and
(e)
if the total amount of interest paid by or accrued with
respect to the Obligations of Borrower, together with any
other fees payable pursuant to this Agreement and the other
Loan Documents and deemed interest under laws applicable to
such Lender or Agent pursuant to this Agreement or any other
Loan Document under the foregoing provisions of this Section
is less than the total amount of interest which would have
accrued if a varying rate per annum equal to the interest
provided pursuant to Section 2.3 or any other relevant section
hereof (other than this Section), as applicable, had at all
times been in effect and all fees provided for in this
Agreement and the other Loan Documents had been paid, then
Borrower severally agrees to pay to such Lender or Agent an
amount equal to the difference between, (i) the lesser of, (x)
the amount of interest and fees which would have accrued if
the Maximum Lawful Rate had at all times been in effect, and
(y) the amount of interest and fees which would have accrued
if a varying rate per annum equal to the interest provided
pursuant to Section 2.3 or such other relevant section of this
Agreement (other than this Section) and the Notes, as
applicable, had at all times been in effect and all fees had
been
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paid, and (ii) the amount of interest and fees accrued in
accordance with the other provisions of this Agreement and
other Loan Documents.
For purposes of Chapter 1D of Article 5069 of the Texas Credit Title,
Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article
5069-1.04, Vernon's Texas Civil Statutes, as amended), to the extent, if any,
applicable to any Lender or Agent, Borrower and each other Designated Entity
agrees that the Maximum Lawful Rate shall be the "applicable interest rate
ceiling" as defined in said Chapter, provided that such Lender or Agent, as
applicable, may also rely, to the extent permitted by applicable laws of the
State of Texas and the United States of America, on alternative maximum rates
of interest under other laws applicable to such Lender or Agent from time to
time if greater.
Section 8.7
Termination; Limited Survival. In its sole and
absolute discretion, Borrower may, at any time that no Obligations or other
amounts are owing, elect to terminate this Agreement in a written notice
delivered to Administrative Agent. Upon receipt by Administrative Agent of
such a notice, if no Obligations or other amounts are then owing, this
Agreement and all other Loan Documents shall thereupon be terminated and the
parties thereto released from all prospective obligations hereunder or
thereunder. Notwithstanding the foregoing or anything herein to the contrary,
any waivers or admissions made by any Designated Entity in any Loan Document,
any Obligations under Sections 2.16 through 2.20, any obligations which any
Designated Entity may have to indemnify or compensate any Agent, or any Lender
in connection with matters arising upon or prior to the termination of this
Agreement and any obligations which any Lender may have to indemnify or
compensate any Agent in connection with matters arising upon or prior to the
termination of this Agreement shall survive any termination of this Agreement
or any other Loan Document and the release of Designated Entities. At the
request and expense of Borrower, Managing Agents shall prepare and execute all
necessary instruments to reflect and effect such termination of the Loan
Documents including, without limitation, the Security Instruments. Managing
Agents are hereby authorized, jointly and severally, to execute all such
instruments on behalf of all Lenders, without the joinder of or further action
or consent by any Lender.
Section 8.8
Assignments; Participations.
(a)
Each Lender shall have the right to sell, assign or transfer
all or any part of such Lender's Notes, Loans and Commitments
hereunder to one or more Affiliates, Lenders, financial
institutions, pension plans, investment funds, or similar
Persons or to a Federal Reserve Bank; provided, that in
connection with each sale, assignment or transfer (other than
to an Affiliate, a Lender or a Federal Reserve Bank), the
applicable Lender will consider the opinion and recommendation
of Borrower, which opinion and recommendation shall in no way
be binding upon such Lender, and each such sale, assignment,
or transfer (other than to an Affiliate, a Lender or a Federal
Reserve Bank) shall be with
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the consent of Borrower (unless an Event of Default has
occurred and is continuing), which consent will not be
unreasonably withheld, and with the consent of Administrative
Agent, which consent will not be unreasonably withheld, and
the assignee, transferee or recipient shall have, to the
extent of such sale, assignment, or transfer, the same rights,
benefits and obligations as it would if it were such Lender
and a holder of such Notes and Commitments, including, without
limitation, the right to vote on decisions requiring consent
or approval of all Lenders, Majority Lenders or Required
Lenders and the obligation to fund its Loans; provided
further, that (1) each Lender in making each such sale,
assignment, or transfer must sell, assign or transfer a pro
rata portion of its Commitments and each Loan (other than a
Swing Line Advance or a Competitive Bid Advance) made or held
by such Lender, (2) each such sale, assignment, or transfer
(other than to an Affiliate, a Lender or a Federal Reserve
Bank) shall be in an aggregate principal amount not less than
$10,000,000, (3) each remaining Lender shall at all times
maintain Commitments then outstanding in an aggregate
principal amount at least equal to $10,000,000; (4) no Lender
may offer to sell its Notes, Commitments or Loans or interests
therein in violation of any securities laws; and (5) no such
assignments (other than to a Federal Reserve Bank) shall
become effective until the assigning Lender delivers to
Administrative Agent and Borrower copies of all written
assignments and other documents evidencing any such assignment
and an Agreement to be Bound in the form of Exhibit L,
providing for the assignee's ratification and agreement to be
bound by the terms of this Agreement and the other Loan
Documents. An assignment fee in the amount of $3,500 for each
such assignment (other than to an Affiliate, a Lender or a
Federal Reserve Bank) will be payable to Administrative Agent
by assignor or assignee. Within five (5) Business Days after
its receipt of copies of any assignment and the other
documents relating thereto and the following described Notes,
Borrower shall execute and deliver to Administrative Agent
(for delivery to the relevant assignee) new Notes evidencing
such assignee's assigned Loans and Commitments and if the
assignor Lender has retained a portion of its Loans,
replacement Notes in the principal amount of the Loans and
Commitments retained by the assignor Lender (except as
provided in the last sentence of this paragraph (a) such Notes
to be in exchange for, but not in payment of, the Notes held
by such Lender). On and after the effective date of an
assignment hereunder, the assignee shall for all purposes be a
Lender, party to this Agreement and any other Loan Document
executed by the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same
extent as if it were an original party thereto, and no further
consent or action by Borrower, Lenders or any Agent shall be
required to release the transferor Lender, with respect to the
Commitments and the Loans assigned to such assignee and the
transferor Lender shall henceforth be so released.
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(b)
Each Lender shall have the right to grant participations in
all or any part of such Lender's Notes, Commitments, and Loans
hereunder to one or more pension plans, investment funds,
financial institutions or other Persons; provided, that:
(1)
each Lender granting a participation shall retain the
right to vote hereunder, and no participant shall be
entitled to vote hereunder on decisions requiring
consent or approval of Lenders, Majority Lenders or
Required Lenders (except as set forth in (3) below);
(2)
in the event any Lender grants a participation
hereunder, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto
for the performance of such obligations, such Lender
shall remain the holder of any such Notes for all
purposes under the Loan Documents, and each Agent,
each Lender and Borrower shall be entitled to deal
with the Lender granting a participation in the same
manner as if no participation had been granted; and
(3)
no participant shall ever have any right by reason of
its participation to exercise any of the rights of
Lenders hereunder, except that any Lender may agree
with any participant that such Lender will not,
without the consent of such participant (which
consent may not be unreasonably withheld), consent to
any amendment or waiver described in Section 8.1
requiring approval of 100% of the Lenders.
(c)
It is understood and agreed that any Lender may provide to
assignees and participants and prospective assignees and
participants financial information and reports and data
concerning Borrower's properties and operations which was
provided to such Lender pursuant to this Agreement, subject to
Section 8.9.
(d)
Upon the reasonable request of either of the Managing Agents
or Borrower, each Lender will identify those to whom it has
assigned or participated any part of its Notes or Loans, and
provide the amounts so assigned or participated.
Section 8.9
Confidentiality. Each Agent and each Lender agrees
that it (a) will maintain the confidentiality of all non-public information
from any Designated Entity or any Subsidiary of Borrower obtained pursuant to
the terms of this Agreement or any other Loan Document in accordance with safe
and sound banking practices, and (b) will not use such confidential information
for any purpose other than in connection with this Agreement; provided,
however, that this restriction shall not apply to information which (w) has at
the particular time in question entered the public domain, or been
independently developed without the use or incorporation of any non-public
information provided to such Agent or Lender by
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any Designated Entity or any Subsidiary of Borrower by such Agent or such
Lender other than through disclosure by such Agent or such Lender in violation
of this Section, (x) is required to be disclosed by law or by any order, rule,
regulation or legal process (whether valid or invalid) of any court or
Governmental Authority, (y) is furnished to any other Lender or to any
purchaser or prospective purchaser of participations, assignments or other
interests in any Loan, Note or Commitment that has executed and delivered to
Borrower an agreement containing terms substantially similar to this Section
and reasonably acceptable to Borrower, to keep such information confidential or
(z) is disclosed to such Lender's or Agent's examiners, Affiliates, outside
auditors, counsel and other professional advisors who have a need for such
information in connection with this Agreement and who are advised of the
confidential nature of such information. As used in this Section, the terms
"Agent" and "Lender" shall refer not only to the Persons designated as such in
Section 1.1, but also to each director, Affiliate, officer, agent, attorney,
employee and representative of such Person. Notwithstanding any other
provisions of this Agreement, the terms of this Section shall survive the
termination of this Agreement for a period of three (3) years.
Section 8.10
Severability. If any term or provision of any Loan
Document shall be determined to be illegal or unenforceable in any
jurisdiction, such term or provision shall, as to such jurisdiction, be illegal
or unenforceable, without affecting the remaining provisions in that
jurisdiction or the legality or enforceability of such terms or conditions in
any other jurisdiction.
Section 8.11
Counterparts. This Agreement may be separately
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to
constitute one and the same Agreement.
Section 8.12
WAIVER OF JURY TRIAL, PUNITIVE DAMAGES. EACH OF THE
BORROWER, AGENTS AND LENDERS HEREBY (I) IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF,
UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED
THEREBY OR ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY; (II) IRREVOCABLY
WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES; (III) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (IV) ACKNOWLEDGES THAT
IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND
THE
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TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
Section 8.13
Several Obligations. The respective obligations of
Lenders hereunder are several and not joint and no Lender shall be the partner
or agent of any other (except to the extent to which an Agent is authorized to
act as such). The failure of any Lender to perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder. This Agreement is not intended to, and shall not be construed so as
to, confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
Section 8.14
Nonliability of Lenders. The relationship between
Borrower on the one hand and Lenders and Agents on the other hand shall be
solely that of borrower and lender. None of the Agents nor any Lender shall
have any fiduciary responsibilities to Borrower or any of its respective
Subsidiaries. None of the Agents nor any Lender undertakes any responsibility
to Borrower or any of their respective Subsidiaries to review or inform
Borrower of any matter in connection with any phase of Borrower's or such
Subsidiary's business or operations.
Section 8.15
Setoff. In addition to, and without any limitation
of, any rights of the Lenders under applicable law, if Borrower becomes
insolvent, however evidenced, or any Event of Default or Default occurs and the
maturity of the Obligations has been accelerated, any indebtedness from any
Lender to Borrower (including all account balances, whether provisional or
final and whether or not collected or available) may be offset and applied
toward the payment of the Obligations owing to such Lender, whether or not the
Obligations, or any part thereof, shall then be due and payable.
Section 8.16
Release of Liens. Upon the date of execution and
delivery of a Guaranty of the type referred to in clause (i) of the definition
of "Guaranty" by a Restricted Subsidiary the capital stock of which has been
pledged (each such date, a "Stock Pledge Release Date"), the Collateral Agent
shall release and discharge, at the cost or expense of Borrower, the Pledge
Agreement covering such Subsidiary's capital stock, all of Lenders' and
Collateral Agent's rights and interests in such Pledge Agreement and all liens,
security interests, pledges and encumbrances created or existing under or
pursuant to such Pledge Agreement.
SECTION 8.17
FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE
LENDERS OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF
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THE STATE OF TEXAS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST
ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE COLLATERAL AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF TEXAS. FOR THE
PURPOSE OF ANY ACTION OR PROCEEDING INSTITUTED IN THE FEDERAL OR STATE COURTS
OF TEXAS, HOLDINGS HEREBY IRREVOCABLY DESIGNATES BORROWER WITH OFFICES ON THE
DATE HEREOF AT 303 WEST WALL STREET, SUITE 101, MIDLAND, TEXAS 79701 TO
RECEIVE FOR AND ON BEHALF OF HOLDINGS, SERVICES OF PROCESS IN TEXAS. BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
TO THE EXTENT THAT BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE
OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, BORROWER HEREBY IRREVOCABLY
WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS.
Section 8.18
Assumption of Prior Indebtedness. Borrower hereby
assumes effective on the Effective Date, and Pioneer USA has assigned and
hereby assigns to Borrower, all of the Prior Indebtedness under the Existing
Credit Agreement (including any and all outstanding LC Obligations).
Section 8.19
Renewal, Extension or Rearrangement. All provisions
Agreement and any other Loan Document relating to the Notes or the other
Obligations shall apply with equal force and effect to each and all
promissory notes or other agreements or instruments hereafter executed which in
whole or in part represent a renewal, extension, increase or rearrangement of
any part of the original Notes or Obligations.
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Section 8.20
Entire Agreement. THIS WRITTEN AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, this Agreement is executed as of the date first written
above.
BORROWER:
PIONEER NATURAL RESOURCES COMPANY
By:
------------------------------------Name:
M. Garrett Smith
Title: Executive Vice President and
Chief Financial Officer
Address: 1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
Attention: M. Garrett Smith
Telephone: (972) 402-7013
Telecopy: (972) 402-7028
with a copy to:
303 West Wall, Suite 101
P.O. Box 3178
Midland, Texas 79701
Attention: Curt Kamradt
Telephone: (915) 571-3171
Telecopy: (915) 571-5696
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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LENDERS:
NATIONSBANK OF TEXAS, N.A.,
individually and as Administrative Agent
and as Collateral Agent
By:
------------------------------------Name:
Frank K. Stowers
Title:
Vice President
Address: 303 W. Wall
P. O. Box 1599
Midland, Texas 79701
Attention: Mr. Frank K. Stowers
Telephone: (915) 685-2179
Telecopy: (915) 685-2009
with further notice to:
901 Main Street, 64th Floor
Dallas, Texas 75202
Attention: Mr. E. Murphy Markham IV
Telephone: (214) 508-1251
Telecopy: (214) 508-1285
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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CIBC INC., individually and as
Documentation Agent
By:
------------------------------Name:
Title:
Address: 2727 Paces Ferry Road
Suite 1200
Atlanta, GA 30339
Attention:
-----------------------Telephone: (770) 319-4824
Telecopy: (770) 319-4950
with further notice to:
2 Houston Center
909 Fannin Street, Suite 1200
Houston, Texas 77010
Attention: Mr. Paul Jordan
Telephone: (713) 655-5245
Telecopy: (713) 650-3727
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
individually and as Documentation Agent
By:
-----------------------------Name:
Title:
Address: 60 Wall Street, 22nd Floor
New York, New York 10260
Attention:
Mr. Philip McNeal
Telephone:
Telecopy:
(212) 648-7181
(212) 648-5023
with further notice to:
Sandra H. Doherty
500 Christiana Stanton Road
Newark, DE 19713-2107
Telephone:
Telecopy:
(302) 634-8122
(302) 634-1092
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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THE CHASE MANHATTAN BANK,
individually and as
Syndication Agent
By:
----------------------Name:
Title:
Address: 712 Main Street,
5th Floor
P. O. Box 2558
Houston, Texas 77252-8086
Attention: Mr. Robert Mertensotto
Telephone:
Telecopy:
(713) 216-4147
(713) 216-4117
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
individually and as Co-Agent
By:
----------------------------Name:
Title:
Address: 3 Allen Center
333 Clay Street, Suite 4550
Houston, TX 77002
Attention: Mr. Ron McKaig
Telephone: (713) 651-4881
Telecopy: (713) 651-4841
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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THE BANK OF NEW YORK,
individually and as Co-Agent
By:
-------------------------Name:
Title:
Address: One Wall Street,
19th Floor
New York, New York 10286
Attention: Mr. Ray Palmer
Telephone: (212) 635- 7834
Telecopy: (212) 635-7923
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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THE BANK OF NOVA SCOTIA,
individually and as Co-Agent
By:
--------------------------Name:
Title:
Address: 600 Peachtree Street N.E.
Suite 2700
Atlanta, Georgia 30308
Attention: Mr. Cleve Bushey
Telephone: (404) 877-1500
Telecopy: (404) 888-8998
with further notice to:
Mr. Jamie Conn
1100 Louisiana, Suite 3000
Houston, TX 77002
Telephone: (713) 759-3426
Telecopy: (713) 752-2425
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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ROYAL BANK OF CANADA,
individually and as Co-Agent
By:
-------------------------Name:
Title:
Address: Financial Square
32 Old Slip St.
New York, New York
10005-3531
Attention: Loan Administrator
Telephone: (212) 428-6321
Telecopy: (212) 428-2372
W/copy to:
Address: 12450 Greens Point Drive
Suite 1450
Houston, Texas 77060
Attention: Ms. Linda Stephens
Telephone: (281) 874-5669
Telecopy: (281) 874-0081
[SIGNATURE PAGE TO 364 PAGE CREDIT FACILITY]
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UNION BANK OF CALIFORNIA, N.A.,
individually and as Co-Agent
By:
----------------------------Name:
Title:
Address: 500 North Akard,
Suite 4200
Dallas, Texas 75201
Attention: Mr. Randy Osterberg
Telephone: (214) 922-4200
Telecopy: (214) 922-4209
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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WELLS FARGO BANK, N.A.,
individually and as Co-Agent
By:
--------------------------Name:
Title:
Address: 1445 Ross Avenue,
Suite 400
LB 224
Dallas, Texas 75202
Attention: Mr. Lester Keliher
Telephone: (214) 777-4025
Telecopy: (214) 777-4044
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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THE FUJI BANK, LIMITED-HOUSTON
AGENCY, individually and as
Co-Agent
By:
---------------------------Name:
Title:
Address: 1221 McKinney Street
Suite 4100
Houston, Texas 77002
Attention: Mr. Tommy Watts
Telephone: (713) 650-7868
Telecopy: (713) 759-0717
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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DEN NORSKE BANK ASA,
individually and as Lead
Manager
By:
--------------------------Name:
Title:
By:
--------------------------Name:
Title:
Address: 333 Clay Street,
Suite 4890
Houston, Texas 77002
Attention:
Mr. J. Morten Kreutz
Telephone: (713) 844-9255
Telecopy: (713) 757-1167
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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BANQUE PARIBAS, individually
and as Lead Manager
By:
-------------------------Name:
Title:
By:
-------------------------Name:
Title:
Address: 1200 Smith Street
Two Allen Center
Suite 3100
Houston, Texas 77002
Attention: Mr. David Dodd
Telephone: (713) 659-4811
Telecopy: (713) 659-6915
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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FIRST UNION NATIONAL BANK,
individually and as Lead
Manager
By:
------------------------Name:
Title:
Address: 1001 Fannin Street
Suite 2255
Houston, Texas 77002
Attention: Mr. Paul N. Riddle
Telephone: (713) 650-3716
Telecopy: (713) 650-6354
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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BANKERS TRUST COMPANY, as a
Lender
By:
-------------------------Name:
Title:
Address: 130 Liberty Plaza,
30th Floor
M.S. 2344 New York, New York
10006
Attention: Marcus M. Tarkington
Telephone: (212) 250-7684
Telecopy: (212) 250-8693
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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CREDIT AGRICOLE INDOSUEZ, as a
Lender
By:
----------------------------Name:
Title:
By:
----------------------------Name:
Title
:
Address: 55 East Monroe
Chicago, Illinois 60603
Attention: Ms. Rosemary Brown
Telephone: (312) 917-7420
Telecopy: (312) 372-4421
with further notice to:
Mr. Brian Knezeak
600 Travis, Suite 2340
Houston, Texas 77002
Telephone: (713) 223-7001
Telecopy: (713) 223-7029
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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NATEXIS BANQUE, as a Lender
BFCE
By:
-------------------------Name:
Title:
By:
-------------------------Name:
Title:
Address: 333 Clay Street,
Suite 4340
Houston, Texas 77002
Attention: Mr. Eric Ditges
Telephone: (713) 759-9401
Telecopy: (713) 759-9908
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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TORONTO DOMINION (TEXAS),
INC., as a Lender
By:
---------------------------Name:
Title:
Address: 909 Fannin Street,
Suite 1700
Houston, Texas 77010
Attention: Ms. Darlene Riedel
Telephone: (713) 653-8250
Telecopy: (713) 951-9921
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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THE TOYO TRUST & BANKING CO.,
LTD., as a Lender
By:
--------------------------Name:
Title:
Address: 666 5th Avenue,
33rd Floor
New York, New York 10103
Attention: Ms. Sharon Bonelli
Telephone: (212) 307-3410
Telecopy: (212) 307-3498
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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WACHOVIA BANK, N.A., as a
Lender
By:
-----------------------Name:
Title:
Address: 191 Peachtree Street
Atlanta, Georgia 30303
Attention: Ms. Paige Mesaros
Telephone: (404) 332-1322
Telecopy: (404) 332-6898
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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THE DAI-ICHI KANGYO BANK,
LTD., NEW YORK BRANCH, as a
Lender
By:
------------------------Name:
Title:
Address: One World Trade Center
48th Floor
New York, New York
10048
Attention: Mr. Masayoshi Komaki
Telephone: (212) 432-6627
Telecopy: (212) 912-1879
Further notice to:
DKB-Houston LPO
1100 Louisiana, Suite 4940
Houston, Texas 77002
Attention: Mr. Warren Ross
Telephone: (713) 654-5055
Telecopy: (713) 654-1667
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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THE SANWA BANK, LIMITED, as a
Lender
By:
--------------------------Name:
Title:
Address: 4100W Texas Commerce Tower
2200 Ross Avenue
Dallas, Texas 75201
Attention: Mr. Matthew Patrick
Telephone: (214) 665-0242
Telecopy: (214) 953-3963
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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KREDIETBANK N.V., as a Lender
By:
--------------------------Name:
Title:
Address: 125 West 55th Street
New York, NY 10019
Attention: Robert E. Snauffer
Vice President
Telephone: (212) 541-0700
Telecopy: (212) 956-5580
with a copy to:
Kredietbank N.V., Atlanta
Representative Office Two
Midtown Plaza, Suite 1750
1349 W. Peachtree Street
Atlanta, Georgia 30309
Attention: Mr. Felip Ferrante
Telephone: (404) 876-2556
Telecopy: (404) 876-3212
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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For purposes of selling, assigning, transferring and conveying its
respective indebtedness, obligations and liabilities under the Existing Credit
Agreement to Borrower, the undersigned has caused this Agreement to be executed
by its officer thereunto duly authorized as of the date and year first above
written.
PIONEER NATURAL RESOURCES USA, INC.
By:
---------------------------------Name:
M. Garrett Smith
Title:
Executive Vice President and
Chief Financial Officer
[SIGNATURE PAGE TO 364 DAY CREDIT FACILITY]
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108
Exhibit A-1
[Form of]
Loan Note - 364 Day Credit Facility
$___________
_____________, 199___
FOR VALUE RECEIVED, the undersigned, PIONEER NATURAL RESOURCES
COMPANY, a Delaware corporation, with offices at 303 W. Wall, Suite 101,
Midland, Texas (herein called "Borrower"), hereby promises to pay to the order
of _______________ ________________ (herein called "Lender"), the principal sum
of _______________________________ and No/100 Dollars ($____ ______________),
or, if greater or less, the aggregate unpaid principal amount of each Loan made
under this Note by Lender to Borrower pursuant to the terms of the Credit
Agreement (as defined herein), together with interest on the unpaid principal
balance thereof as hereinafter set forth, both principal and interest payable
as herein provided in lawful money of the United States of America at the
principal banking offices of the Administrative Agent under the Credit
Agreement, 901 Main Street, Dallas, Texas 75202, or at such other place as
from time to time may be designated by the holder of this Note, with the
concurrence of Borrower and Administrative Agent. Subject to the terms and
conditions of the Credit Agreement and hereof, Borrower may borrow, repay and
reborrow hereunder.
This Note (a) is issued and delivered under that certain Amended and
Restated Credit Facility Agreement dated as of December 18, 1997 by and among
Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), and is a "Loan Note" as defined therein, and (b) is
subject to the terms and provisions of the Credit Agreement, which contains
provisions for payment and prepayment hereunder and acceleration of the
maturity hereof upon the happening of certain events. Payments on this Note
shall be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto and
for the meanings assigned to terms used and not otherwise defined herein.
Exhibit A-1 - 1
109
Interest accrued on each Loan evidenced by this Note shall be payable,
without duplication: (a) on the Maturity Date; (b) with respect to any Base
Rate Portion of the Loans evidenced by this Note, on the third Business Day of
each Fiscal Quarter occurring after the date of the initial borrowing of a Base
Rate Portion hereunder; (c) with respect to any Eurodollar Portion of the Loans
evidenced by this Note, on the last day of each applicable Interest Period
(and, if such Interest Period shall exceed 90 days, on the 90th day of such
Interest Period and every 90 days thereafter until the end of such Interest
Period); (d) with respect to any Base Rate Portion converted into a Eurodollar
Portion of the Loans evidenced by this Note pursuant to a Rate Election on a
day when interest would not otherwise have been payable pursuant to clause (b),
on the third Business Day of each Fiscal Quarter occurring after the date of
such conversion; and (e) on any portion of the Loans evidenced by this Note,
the Maturity Date of which is accelerated pursuant to Section 6.1 of the Credit
Agreement, on the date to which the Maturity Date of such portion has been
accelerated. Interest accrued on the Loans evidenced by this Note or other
monetary Obligations arising under this Note, the Credit Agreement or any other
Loan Document after the date such amount is due and payable (whether on the
Maturity Date, upon acceleration or otherwise) shall be payable upon demand.
The principal amount of this Note, together with all interest accrued
hereon and unpaid, shall be due and payable in full on the Maturity Date.
The Base Rate Portion of the Loans evidenced by this Note (exclusive
of any past due principal or interest) from time to time outstanding shall bear
interest on each day outstanding at the Base Rate, plus the applicable Base
Rate Margin. Each Eurodollar Portion of the Loans evidenced by this Note
(exclusive of any past due principal or interest) shall bear interest on each
day during the related Interest Period at the applicable Eurodollar Rate, plus
the applicable Eurodollar Margin. All past due principal of the Loans
evidenced by this Note or other Obligations arising under the Credit Agreement
or any other Loan Document (whether payable on the Maturity Date or otherwise)
shall bear interest on each day outstanding after its due date at the
applicable Default Rate in effect on such day.
Notwithstanding the other provisions of this Note or the Credit
Agreement, in no event shall the interest payable hereon, whether before or
after maturity, exceed the Maximum Lawful Rate and this Note is expressly made
subject to the provisions of the Credit Agreement which more fully set out the
limitations on how interest accrues hereon. In the event applicable law
provides for a ceiling under Chapter 1D of Article 5069 of the Texas Credit
Title, Title 79, Vernon's Texas Civil Statutes, as amended
Exhibit A-1 - 2
110
(formerly Article 5069-1.04, Vernon's Texas Civil Statutes, as amended), that
ceiling shall be the "applicable interest rate ceiling" as defined in said
Chapter. The term "applicable law" as used in this Note shall mean the laws of
the State of Texas or the laws of the United States, whichever laws allow the
greater interest as such laws now exist or may be enacted, changed or amended
or come into effect in the future.
If this Note is placed in the hands of an attorney for collection
after a Default, or if all or any part of the indebtedness represented hereby
is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, the
undersigned Borrower and all endorsers, sureties and guarantors of this Note
jointly and severally agree to pay reasonable attorneys' fees and collection
costs to the holder hereof in addition to the principal and interest payable
hereunder.
The undersigned Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the
bringing of any suit against any party and any notice of or defense on account
of any extensions, renewals, partial payments or changes in any manner of or in
this Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
It is contemplated that by reason of prepayment hereon there may be
times when no indebtedness is owing hereunder; notwithstanding such
occurrences, this Note shall remain valid and shall be in full force and effect
as to Loans made pursuant to the Credit Agreement subsequent to each
occurrence.
Except as permitted by Section 8.8 of the Credit Agreement, this Note
may not be assigned by Lender to any other Person.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE UNDERSIGNED BORROWER AND LENDER WITH
RESPECT HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS (WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE SAME ARE
GOVERNED BY APPLICABLE FEDERAL LAW.
PIONEER NATURAL RESOURCES COMPANY
By:
------------------------------Name:
M. Garrett Smith
Title:
Executive Vice President and
Chief Financial Officer
Exhibit A-1 - 3
111
Exhibit A-1 - 4
112
Exhibit A-2
[Form of]
Swing Line Note - 364 Day Credit Facility
$50,000,000
__________, 199___
FOR VALUE RECEIVED, the undersigned, PIONEER NATURAL RESOURCES
COMPANY, a Delaware corporation with offices at 303 W. Wall, Suite 101,
Midland, Texas (herein called "Borrower"), hereby promises to pay to the order
of NATIONSBANK OF TEXAS, N.A. (herein called "Lender"), the principal sum of
FIFTY MILLION AND NO/100 Dollars ($50,000,000), or, if less, the aggregate
unpaid principal amount of the Swing Line Advances made under this Note by
Lender to Borrower pursuant to the terms of the Credit Agreement (as defined
herein), together with interest on the unpaid principal balance thereof as
hereinafter set forth, both principal and interest payable as herein provided
in lawful money of the United States of America at the principal banking
offices of Administrative Agent under the Credit Agreement, 901 Main Street,
Dallas, Texas 75202, or at such other place as from time to time may be
designated by the holder of this Note, with the concurrence of Borrower and
Administrative Agent.
This Note (a) is issued and delivered under that certain Amended and
Restated Credit Facility Agreement dated as of December 18, 1997 by and among
Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the
Co-Agents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), and is a "Swing Line Note" as defined therein, and (b) is
subject to the terms and provisions of the Credit Agreement, which contains
provisions for payment and prepayment hereunder and acceleration of the
maturity hereof upon the happening of certain events. Payments on this Note
shall be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto and
for the meanings assigned to terms used and not otherwise defined herein.
The unpaid principal amount of this Note, together with all interest
accrued hereon and unpaid, shall be due and payable in full as provided in the
Credit Agreement and not later than the Maturity Date. Interest accrued on the
Swing Line Advances evidenced by this Note shall be payable as provided in the
Credit Agreement.
Exhibit A-2 - 1
113
Notwithstanding other provisions of this Note or the Credit Agreement,
in no event shall the interest payable hereon, whether before or after
maturity, exceed the Maximum Lawful Rate and this Note is expressly made
subject to the provisions of the Credit Agreement which more fully set out the
limitations on how interest accrues hereon. In the event applicable law
provides for a ceiling under Chapter 1D of Article 5069 of the Texas Credit
Title, Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article
5069-1.04, Vernon's Texas Civil Statutes, as amended), that ceiling shall be
the "applicable interest rate ceiling" as defined in said Chapter. The term
"applicable law" as used in this Note shall mean the laws of the State of Texas
or the laws of the United States, whichever laws allow the greater interest as
such laws now exist or may be enacted, changed or amended or come into effect
in the future.
If this Note is placed in the hands of an attorney for collection
after a Default, or if all or any part of the indebtedness represented hereby
is proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, the
undersigned Borrower and all endorsers, sureties and guarantors of this Note
jointly and severally agree to pay reasonable attorneys' fees and collection
costs to the holder hereof in addition to the principal and interest payable
hereunder.
The undersigned Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the
bringing of any suit against any party and any notice of or defense on account
of any extensions, renewals, partial payments or changes in any manner of or in
this Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
It is contemplated that by reason of prepayment hereon there may be
times when no indebtedness is owing hereunder; notwithstanding such
occurrences, this Note shall remain valid and shall be in full force and effect
as to Loans made pursuant to the Credit Agreement subsequent to each
occurrence.
Except as permitted by Section 8.8 of the Credit Agreement, this Note
may not be assigned by Lender to any other Person.
Exhibit A-2 - 2
114
THIS NOTE AND THE RIGHTS AND DUTIES OF THE UNDERSIGNED BORROWER AND
LENDER WITH RESPECT HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE
SAME ARE GOVERNED BY APPLICABLE FEDERAL LAW.
PIONEER NATURAL RESOURCES
COMPANY
By:
--------------------------Name: M. Garrett Smith
Title: Executive Vice
President and Chief
Financial Officer
Exhibit A-2 - 3
115
Exhibit A-3
[Form of]
Competitive Bid Note - 364 Day Credit Facility
$300,000,000
----------
, 199
---
FOR VALUE RECEIVED, the undersigned, PIONEER NATURAL RESOURCES COMPANY,
a Delaware corporation, with offices at 303 W. Wall, Suite 101, Midland, Texas
(herein called "Borrower"), hereby promises to pay to the order of
_____________ _____________________ (herein called "Lender"), the principal sum
of THREE HUNDRED MILLION AND No/100 DOLLARS ($300,000,000), or, if less, the
aggregate unpaid principal amount of all Competitive Bid Advances shown on the
schedule attached hereto (and any continuation thereof), if so shown, made by
the Lender to Borrower, together with interest on the unpaid principal balance
thereof as hereinafter set forth, both principal and interest payable as herein
provided in lawful money of the United States of America at the principal
banking offices of Administrative Agent under the Credit Agreement (as defined
herein), 901 Main Street, Dallas, Texas 75202, or at such other place as from
time to time may be designated by the holder of this Note, with the concurrence
of Borrower and Administrative Agent.
This Note (a) is issued and delivered under that certain Amended and
Restated Credit Facility Agreement dated as of December 18, 1997 by and among
Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the CoAgents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), and is a "Competitive Bid Note" as defined therein, and
(b) is subject to the terms and provisions of the Credit Agreement, which
contains provisions for payment and prepayment hereunder and acceleration of
the maturity hereof upon the happening of certain events. Payments on this
Note shall be made and applied as provided herein and in the Credit Agreement.
Reference is hereby made to the Credit Agreement for a description of certain
rights, limitations of rights, obligations and duties of the parties hereto and
for the meanings assigned to terms used and not otherwise defined herein.
The unpaid principal amount of this Note, together with all interest
accrued hereon and unpaid, shall be due and payable in full as provided in the
Credit Agreement and not later than the Maturity Date.
Exhibit A-3 - 1
116
Interest accrued on the Competitive Bid Advances evidenced by this Note
shall be payable as provided in the Credit Agreement.
Notwithstanding other provisions of this Note or the Credit Agreement,
in no event shall the interest payable hereon, whether before or after
maturity, exceed the Maximum Lawful Rate and this Note is expressly made
subject to the provisions of the Credit Agreement which more fully set out the
limitations on how interest accrues hereon. In the event applicable law
provides for a ceiling under Chapter 1D of Article 5069 of the Texas Credit
Title, Title 79, Vernon's Texas Civil Statutes, as amended (formerly Article
5069-1.04, Vernon's Texas Civil Statutes, as amended), that ceiling shall be
the "applicable interest rate ceiling" as defined in said Chapter. The term
"applicable law" as used in this Note shall mean the laws of the State of Texas
or the laws of the United States, whichever laws allow the greater interest as
such laws now exist or may be enacted, changed or amended or come into effect
in the future.
If this Note is placed in the hands of an attorney for collection after
a Default, or if all or any part of the indebtedness represented hereby is
proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, the
undersigned Borrower and all endorsers, sureties and guarantors of this Note
jointly and severally agree to pay reasonable attorneys' fees and collection
costs to the holder hereof in addition to the principal and interest payable
hereunder.
The undersigned Borrower and all endorsers, sureties and guarantors of
this Note hereby severally waive demand, presentment, notice of demand and of
dishonor and nonpayment of this Note, protest, notice of protest, notice of
intention to accelerate the maturity of this Note, declaration or notice of
acceleration of the maturity of this Note, diligence in collecting, the
bringing of any suit against any party and any notice of or defense on account
of any extensions, renewals, partial payments or changes in any manner of or in
this Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
It is contemplated that by reason of prepayment hereon there may be
times when no indebtedness is owing hereunder; notwithstanding such
occurrences, this Note shall remain valid and shall be in full force and effect
as to Competitive Bid Advances made pursuant to the Credit Agreement subsequent
to each occurrence.
Exhibit A-3 - 2
117
Except as permitted by Section 8.8 of the Credit Agreement, this Note
may not be assigned by Lender to any other Person.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE UNDERSIGNED BORROWER AND
LENDER WITH RESPECT HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE
SAME ARE GOVERNED BY APPLICABLE FEDERAL LAW.
PIONEER NATURAL RESOURCES COMPANY
By:
------------------------------------------------Name: M. Garrett Smith
Title: Executive Vice President
and Chief Financial Officer
Exhibit A-3 - 3
118
Exhibit B
[Note: Language in brackets will not be included in every Guaranty to the
extent that, at the time of execution and delivery of the Guaranty, such
execution and delivery would result in adverse tax consequences under Section
956 or substantial stamp tax or similar taxes, are prohibited pursuant to
contractual restrictions or are prohibited as a matter of corporate law.]
[Form of]
GUARANTY
THIS GUARANTY (this "Guaranty"), dated as of ________________, 199___,
made by _________________________ [(A.C.N. _____________)], a ________________
("Guarantor"), in favor of each of the Lender Parties (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Pioneer Natural Resources
Company, a Delaware corporation ("Borrower"), NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, the Co-Agents party thereto, and the Lenders from time to
time parties thereto (together with all amendments, supplements, restatements
and other modifications, if any, thereafter made thereto, the "Primary Credit
Agreement"), the Lenders have extended Commitments (as defined in the Primary
Credit Agreement) to make Loans to Borrower and to issue or participate in
Letters of Credit on behalf of Borrower; and
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (together with all amendments, supplements,
restatements and other modifications, if any, thereafter made thereto, the "364
Day Credit Agreement", and together with the Primary Credit Agreement, the
"Credit Agreements"), the Lenders have extended Commitments (as defined in the
364 Day Credit Agreement) to make Loans to Borrower; and
WHEREAS, as a condition precedent to the making of the initial Loans or
issuing of the initial Letters of Credit under
Exhibit B - 1
119
the Credit Agreements, Guarantor is required to execute and deliver this
Guaranty; and
WHEREAS, Guarantor has duly authorized the execution, delivery and
performance of this Guaranty; and
WHEREAS, it is in the best interests of Guarantor to execute this
Guaranty inasmuch as Guarantor will derive substantial direct and indirect
benefits from the Loans made from time to time to Borrower and Letters of
Credit issued on behalf of Borrower pursuant to the Credit Agreements;
NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce the Lenders to make Loans
(including the initial Loans) to Borrower pursuant to the Credit Agreements and
for the Issuing Bank to issue Letters of Credit on behalf of Borrower and for
the Lenders to acquire participations in such Letters of Credit pursuant to the
Primary Credit Agreement, Guarantor agrees, for the benefit of each Lender
Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"Administrative Agent" is defined in the first recital.
"Borrower" is defined in the first recital.
"Commitments" means "Commitments" as defined in the Primary Credit
Agreement and "Commitments" as defined in the 364 Day Credit Agreement.
"Credit Agreements" is defined in the second recital.
"Debtor" is defined in Section 2.1(a)(i).
"Guarantor" is defined in the preamble.
"Guaranty" is defined in the preamble.
"Lender Party" means, as the context may require, any Lender, any
Issuing Bank or any Agent and each of its respective successors, transferees
and assigns under the Credit Agreements.
Exhibit B - 2
120
"Lenders" means "Lenders" as defined in the Primary Credit Agreement and
"Lenders" as defined in the 364 Day Credit Agreement.
"Loan Documents" means "Loan Documents" as defined in the Primary Credit
Agreement and "Loan Documents" as defined in the 364 Day Credit Agreement.
"Notes" means "Notes" as defined in the Primary Credit Agreement and
"Notes" as defined in the 364 Day Credit Agreement.
"Obligations" means "Obligations" as defined in the Primary Credit
Agreement and "Obligations" as defined in the 364 Day Credit Agreement.
"Primary Credit Agreement" is defined in the first recital.
"364 Day Credit Agreement" is defined in the second recital.
SECTION 1.2. Primary Credit Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Guaranty,
including its preamble and recitals, have the meanings provided in the Primary
Credit Agreement.
ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1. Guaranty.
and irrevocably
(a)
Guarantor hereby absolutely, unconditionally
guarantees
(i)
the full and punctual payment when due, whether at
stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, of all Obligations of Borrower
now or hereafter existing under the Credit Agreements, the Notes,
the LC Applications and each other Loan Document to which
Borrower is or may become a party, whether for principal,
interest, fees, expenses or otherwise;
(ii)
the payment and performance of any and all present
or future obligations of Borrower according to the terms of any
present or future rate swap, rate cap, rate floor, rate collar,
currency exchange transaction, forward rate agreement, or other
exchange or rate protection agreements or any option with respect
to any such transaction now existing or hereafter entered into
between Borrower or any of its Subsidiaries and one or more of
the Lenders or their Affiliates ("interest rate swap agreement");
Exhibit B - 3
121
(iii) the payment and performance of any and all present
or future obligations of Borrower according to the terms of any
present or future crude oil, natural gas or other hydrocarbons
swap agreements, crude oil, natural gas or other hydrocarbons
cap, crude oil, natural gas or other hydrocarbons floor, crude
oil, natural gas or other hydrocarbons collar, crude oil, natural
gas or other hydrocarbons exchange transaction, forward crude
oil, natural gas or other hydrocarbons agreement, or other
exchange or crude oil, natural gas or other hydrocarbons
protection agreements or any option with respect to any such
transaction now existing or hereafter entered into between
Borrower or any of its Subsidiaries and one or more of the
Lenders or their Affiliates; and
(iv)
all renewals, rearrangements, increases, extensions
for any period, substitutions, modification, amendments or
supplements in whole or in part of any of the above loan
documents or obligations,
(including all such amounts which would become due but for the operation
of the automatic stay under Section 362(a) of the United States
Bankruptcy Code, 11 U.S.C. Section 362(a), and the operation of Sections
502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C.
Section 502(b) and Section 506(b)), and (b) indemnifies and holds
harmless strictly in accordance with the terms of the Credit Agreements
each Lender Party and each holder of a Note from Borrower, an LC
Application or any interest in an LC Obligation for any and all costs
and expenses (including reasonable attorney's fees and expenses)
incurred by such Lender Party or such holder, as the case may be, in
enforcing any rights under this Guaranty; provided, however, that
Guarantor shall only be liable under this Guaranty for the maximum
amount of such liability that can be hereby incurred without rendering
this Guaranty, as it relates to Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for
any greater amount. This Guaranty constitutes a guaranty of payment
when due and not of collection, and Guarantor specifically agrees that
it shall not be necessary or required that any Lender Party or any
holder of any Note exercise any right, assert any claim or demand or
enforce any remedy whatsoever against Borrower or any other Designated
Entity (or any other Person) before or as a condition to the obligations
of Guarantor hereunder. All payments hereunder are to be made in the
currency in which they are due under the Credit Agreements.
SECTION 2.2. Acceleration of Guaranty. Guarantor agrees that, in the
event of the dissolution or insolvency of Borrower
Exhibit B - 4
122
or Guarantor, or the inability or failure of Borrower or Guarantor to pay debts
as they become due, or an assignment by Borrower or Guarantor for the benefit
of creditors, or the commencement of any case or proceeding in respect of
Borrower or Guarantor under any bankruptcy, insolvency or similar laws, and if
such event shall occur at a time when any of the Obligations of Borrower may
not then be due and payable, Guarantor will pay to the Lenders forthwith the
full amount which would be payable hereunder by Guarantor if all such
Obligations were then due and payable.
SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in all
respects be a continuing, absolute, unconditional and irrevocable guaranty of
payment, and shall remain in full force and effect until all Obligations of
Borrower have been paid in full, all obligations of Guarantor hereunder shall
have been paid in full and all Commitments shall have terminated. Guarantor
guarantees that the Obligations of Borrower will be paid strictly in accordance
with the terms of the Credit Agreements and each other Loan Document under
which they arise, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of any
Lender Party or any holder of any Note with respect thereto. The liability of
Guarantor under this Guaranty shall be absolute, unconditional and irrevocable
irrespective of:
(a)
(i) any lack of validity, legality or enforceability of
the Credit Agreements, any Note, any LC Application or any other Loan
Document or any portion of any thereof or (ii) the Credit Agreements,
any Note, any LC Application or any other Loan Document or any portion
of any thereof being void or voidable;
(b)
the failure of any Lender Party or any holder of any Note,
any LC Application, Letter of Credit or any interest therein
(i)
to assert any claim or demand or to enforce any
right or remedy against Borrower, any other Designated Entity or
any other Person (including any other guarantor) under the
provisions of the Credit Agreements, any Note, any LC
Application, any other Loan Document or otherwise, or
(ii)
to exercise any right or remedy against any other
guarantor of, or collateral securing, any Obligations of Borrower
or any other Designated Entity;
(c)
any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of Borrower or any
other Designated Entity, or any other
Exhibit B - 5
123
extension, compromise or renewal of any Obligation of Borrower or any
other Designated Entity;
(d)
any reduction, limitation, impairment or termination of
any Obligations of Borrower or any other Designated Entity for any
reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to (and Guarantor hereby waives any
right to or claim of) any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any
other event or occurrence affecting, any Obligations of Borrower, any
other Designated Entity or otherwise;
(e)
any amendment to, extensions of, rescission, waiver, or
other modification of, or any consent to departure from, any of the
terms of the Credit Agreements, any Note, any LC Application, any Letter
of Credit or any other Loan Document;
(f)
any addition, exchange, release, surrender or nonperfection of any collateral, or any amendment to or waiver or release
or addition of, or consent to departure from, any other guaranty, held
by any Lender Party or any holder of any Note, any LC Application, any
Letter of Credit or interest therein securing any of the Obligations of
Borrower or any other Designated Entity; or
(g)
any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, Borrower,
any other Designated Entity, any surety or any guarantor.
SECTION 2.4. Reinstatement. Guarantor agrees that this Guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment (in whole or in part) of any of the Obligations guaranteed hereby
is rescinded or must otherwise be restored by any Lender Party or any holder of
any Note, any LC Application or any interest in an LC Obligation, upon the
insolvency, bankruptcy or reorganization of Borrower, or any other Designated
Entity or otherwise, all as though such payment had not been made.
SECTION 2.5. Waiver. Guarantor hereby waives promptness, diligence,
presentment, notice of acceptance and any other notice with respect to any of
the Obligations of Borrower or any other Designated Entity and this Guaranty
and any requirement that any Agent, any other Lender Party or any holder of any
Note, any LC Application, any Letter of Credit or any interest therein protect,
secure, perfect or insure any security interest or Lien,
Exhibit B - 6
124
or any property subject thereto, or exhaust any right or take any action
against Borrower, any other Designated Entity or any other Person (including
any other guarantor) or entity or any collateral securing the Obligations of
Borrower or any other Designated Entity, as the case may be.
SECTION 2.6. Waiver of Subrogation. Guarantor hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
Borrower or any other Designated Entity that arise from the existence, payment,
performance or enforcement of Guarantor's obligations under this Guaranty or
any other Loan Document, including any right of subrogation, reimbursement,
contribution, exoneration, or indemnification, any right to participate in any
claim or remedy of the Lender Parties against Borrower or any other Designated
Entity or any collateral which the Collateral Agent now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including the right to take or receive from
Borrower or any other Designated Entity, directly or indirectly, in cash or
other property or by set-off or in any manner, payment or security on account
of such claim or other rights. If any amount shall be paid to Guarantor in
violation of the preceding sentence and the Obligations shall not have been
paid in cash in full and the Commitments have not been terminated, such amount
shall be deemed to have been paid to Guarantor for the benefit of, and held in
trust for, the Lender Parties, and shall forthwith be paid to the Lender
Parties to be credited and applied upon the Obligations, whether matured or
unmatured; otherwise it shall be returned to remitter. Guarantor acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated by the Credit Agreements and that the waiver set
forth in this Section is knowingly made in contemplation of such benefits.
SECTION 2.7. Successors, Transferees and Assigns; Transfers of Notes.
This Guaranty shall:
(a)
be binding upon Guarantor, and its successors, transferees
and assigns (provided, however, that Guarantor may not assign any of its
obligations hereunder without the prior written consent of all Lenders);
and
(b)
inure to the benefit of and be enforceable by each Agent
and each other Lender Party.
Without limiting the generality of the foregoing clause (b), any Lender may
assign or otherwise transfer (in whole or in part) any Note, Loan, LC
Application, Letter of Credit or interest therein held by it to any other
Person or entity, and such other Person or entity shall thereupon become vested
with all rights and benefits in respect thereof granted to such Lender under
any Loan
Exhibit B - 7
125
Document (including this Guaranty) or otherwise, subject, however, to any
contrary provisions in such assignment or transfer, and to the provisions of
Section 8.8 of the Credit Agreements.
SECTION 2.8. Taxes. All payments by the undersigned hereunder shall be
made free and clear of and without deduction for any present or future income,
excise, stamp, or franchise taxes and other taxes, fees, duties, withholdings
or other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender's net
income or receipts (such non-excluded items being called "Taxes"). In the
event that any withholding or deduction from any payment to be made hereunder
is required in respect of any Taxes pursuant to any applicable law, rule or
regulation, then, subject to the provisions of Section 2.9, the undersigned
will:
(a)
pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b)
promptly forward to Administrative Agent an official
receipt or other documentation satisfactory to Administrative Agent
evidencing such payment to such authority; and
(c)
pay to Administrative Agent for the account of the
applicable Lender(s) such additional amount(s) as is necessary to ensure
that the net amount actually received by each Lender will equal the full
amount such Lender would have received had no such withholding or
deduction been required and the undersigned hereby acknowledges that it
is not entitled to and will not seek recovery or restitution of any
amount due to any of the Lenders or Agents and paid by it pursuant to
this clause (c) or pursuant to the next sentence.
If any Taxes are directly asserted against any Agent or any Lender with respect
to any payment received by such Agent or such Lender hereunder, such Agent or
such Lender may pay such Taxes and, if paid in good faith, the undersigned will
promptly pay such additional amounts to the Administrative Agent for the
account of such Lender or Agent (including any penalties, interest or expenses)
as is necessary in order that the net amount received by such person after the
payment of such Taxes (including any taxes on such additional amount) shall
equal the amount such person would have received had no such Taxes been
asserted, subject to the provisions of Section 2.9.
The undersigned shall pay all stamp, transaction, registration and
similar taxes (including financial institutions
Exhibit B - 8
126
duties, debit taxes or other taxes payable by return and taxes passed on to any
Lender or Agent by a bank or financial institution (collectively "Stamp Taxes")
and, if the undersigned fails to pay any such charges or taxes after reasonable
notice from any such Lender or Agent, fines and penalties) which may be payable
or determined to be payable in relation to the execution, delivery, performance
or enforcement of this Guaranty or any Loan Document or any other transaction
contemplated by any Loan Document to which the undersigned is a party. The
undersigned hereby indemnifies each Lender and Agent against any liability
resulting from delay or omission to pay such charges or taxes except to the
extent the liability results from failure by the relevant Lender or Agent to
pay any such tax after having been delivered funds to do so by the undersigned
or to the extent such liability is for fines and penalties resulting from such
Lender's or Agent's failure to provide reasonable notice to the undersigned as
provided herein.
If the undersigned fails to pay any Taxes or Stamp Taxes when due to the
appropriate taxing authority or fails to remit to Administrative Agent, for the
account of the respective Lenders, the required receipts or other required
documentary evidence, the undersigned shall indemnify Lenders for any Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure, subject to the provisions of Section 2.9.
The undersigned waives any statutory right to recover from any Agent or
any Lender any amount due to any such Agent or Lender and paid by the
undersigned under this Section.
SECTION 2.9. Make-Whole Qualifications. Each Lender's claims for
reimbursements, payments, indemnities or otherwise under Section 2.8 and the
undersigned's obligations with respect thereto, shall be limited and qualified
by and subject to the following:
(a)
the undersigned's obligation to pay, satisfy or recognize
such claim shall be limited to costs or losses incurred within one (1)
year immediately prior to any demand or request therefor upon the
undersigned;
(b)
each Lender's demand for reimbursement, payment or
indemnity must be limited to that which is being generally applied at
the time by such Lender for comparable guarantors and guaranties subject
to similar provisions;
(c)
each Lender which asserts its rights with respect thereto
or which is seeking or imposing such reimbursement, payment or indemnity
shall provide evidence regarding the basis of such claim and the
calculation and application thereof in reasonable detail and, in
determining such
Exhibit B - 9
127
amount, each Lender may use reasonable methods of attribution and
averaging; and
(d)
each Lender which is seeking payment, indemnity or
reimbursement pursuant to Section 2.8 shall, if so requested by the
undersigned use reasonable efforts (subject to the overall policy
considerations of such Lender) to designate a different lending office
hereunder if to do so will avoid the need for, or reduce the amount of,
any such payment, indemnity or reimbursement; provided that, Lender
would, in its sole but reasonable determination, suffer no material
economic, legal or regulatory disadvantage or burden.
[SECTION 2.10.
Judgment.
Guarantor hereby agrees that:
(a)
If, for the purposes of obtaining judgment in any court,
it is necessary to convert a sum due hereunder in United States Dollars
into another currency, Guarantor agrees, to the fullest extent permitted
by law, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase United States Dollars with such other currency on the Business
Day preceding that on which final judgment is given.
(b)
The obligation of Guarantor in respect of any sum due from
it to any Lender Party or any holder of a Note hereunder shall,
notwithstanding any judgment in a currency other than United States
Dollars, be discharged only to the extent that on the Business Day
following receipt by such Lender Party or such holder, as the case may
be, of any sum adjudged to be so due in such other currency such Lender
Party or such holder, as the case may be, may, in accordance with normal
banking procedures, purchase United States Dollars with such other
currency; in the event that the United States Dollars so purchased are
less than the sum originally due to such Lender Party in United States
Dollars, Guarantor, as a separate obligation and notwithstanding any
such judgment, hereby indemnifies and holds harmless such Lender Party
and such holder against such loss, and if the United States Dollars so
purchased exceed the sum originally due to such Lender Party or such
holder in United States Dollars, such Lender Party or such holder, as
the case may be, shall remit to Guarantor such excess.]
Exhibit B - 10
128
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1.
Representations and Warranties. Guarantor hereby
represents and warrants unto each Lender Party as set forth in this Article.
SECTION 3.1.1. Organization, Existence and Good Standing. Guarantor is
duly organized or incorporated, validly existing and in good standing under the
laws of its jurisdiction of organization or incorporation, having all corporate
or partnership powers required to enter into and carry out the transactions
contemplated hereby. Guarantor is duly qualified, in good standing, and
authorized to do business in all other jurisdictions within the United States
wherein the character of the properties owned or held by it or the nature of
the business transacted by it makes such qualification necessary, except for
any lack of qualification, good standing or authorization that is not
reasonably expected to result in a Material Adverse Effect. Guarantor has
taken all actions customarily taken in order to enter, for the purpose of
conducting business or owning property, each jurisdiction outside the United
States wherein the character of the properties owned or held by it or the
nature of the business transacted by it makes such actions desirable, except
any failure to take such action that is not reasonably expected to result in a
Material Adverse Effect.
SECTION 3.1.2. Authorization. Guarantor has duly taken all corporate,
partnership or shareholder action necessary to authorize the execution and
delivery by it of this Guaranty and to authorize the consummation of the
transactions contemplated hereby and the performance of its obligations
hereunder.
SECTION 3.1.3. No Conflicts or Consents. The execution and delivery by
Guarantor of this Guaranty, the performance by it of its obligations hereunder,
and the consummation of the transactions contemplated by the various Loan
Documents, do not and will not (i) conflict with any provision of the articles
or certificate of incorporation, bylaws, charter, or partnership agreement or
certificate of such Guarantor, or (ii) except as to matters that could not
reasonably be expected to result in a Material Adverse Effect, result in the
acceleration of any Debt owed by such Guarantor, or conflict with any law,
statute, rule, regulation, or agreement, judgment, license, order or permit
applicable to or binding upon such Guarantor, or require the consent, approval,
authorization or order of, or notice to or filing with, any court or
Governmental Authority or third party, or result in or require the creation of
any Lien upon any material assets or properties of such Guarantor, except as
permitted in the Loan Documents.
SECTION 3.1.4. Enforceable Obligations. This Guaranty is the legal,
valid and binding obligation of Guarantor, enforceable in accordance with its
terms, except as such enforcement may be
Exhibit B - 11
129
limited by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights and by general principles of
equity.
ARTICLE IV
COVENANTS
SECTION 4.1. Covenants. Guarantor covenants and agrees that, so long
as any portion of the Obligations of Borrower shall remain unpaid or any Lender
shall have any outstanding Commitment, Guarantor will, unless the Required
Lenders shall otherwise consent in writing, perform or comply with the
obligations of a Restricted Subsidiary of Borrower set forth in Sections 5.1
and 5.2 of the Credit Agreements, subject to any limitations on performance or
compliance contained in such sections, including, without limitation, the
limitation, when applicable, that the failure to perform or comply could not
reasonably be expected to have a Material Adverse Effect.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Loan Document. This Guaranty is a Loan Document executed
pursuant to the Credit Agreements and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION 5.2. Binding on Successors, Transferees and Assigns;
Assignment. In addition to, and not in limitation of, Section 2.7, this
Guaranty shall be binding upon Guarantor and its successors, transferees and
assigns and shall inure to the benefit of and be enforceable by each Lender
Party and each holder of a Note, an LC Application, or an interest in an LC
Obligation and their respective successors, transferees and assigns (to the
full extent provided pursuant to Section 2.7); provided, however, that
Guarantor may not assign any of its obligations hereunder without the prior
written consent of all Lenders.
SECTION 5.3. Amendments. No amendment to or waiver of any provision of
this Guaranty, nor consent to any departure by Guarantor herefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Administrative Agent, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
SECTION 5.4. Notices. All notices, requests, consents, demands and
other communications required or permitted hereunder shall be in writing,
unless otherwise specifically provided herein and shall be deemed sufficiently
given or furnished if
Exhibit B - 12
130
delivered by personal delivery, by telecopy (with telephonic confirmation of
transmission, by delivery service with proof of delivery, or by registered or
certified United States mail, postage prepaid, to Guarantor at the address of
Guarantor specified on the signature pages hereto and to each Agent and each
Lender at their addresses specified on the signature pages to the Credit
Agreements (unless changed by similar notice in writing given by the particular
Person whose address is to be changed). Any such notice or communication shall
be deemed to have been given:
(a)
in the case of personal delivery or delivery service, as
of the date of first attempted delivery at the address provided herein;
(b)
in the case of telecopy, upon receipt; or
(c)
in the case of registered or certified United States mail,
three days after deposit in the mail, postage prepaid.
SECTION 5.5. No Waiver; Remedies. In addition to, and not in
limitation of, Section 2.3 and Section 2.5, no failure on the part of any
Lender Party or any holder of a Note, an LC Application, or an interest in an
LC Obligation to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
SECTION 5.6. Section Captions. Section captions used in this Guaranty
are for convenience of reference only, and shall not affect the construction of
this Guaranty.
SECTION 5.7. Severability. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION 5.8. Governing Law, Entire Agreement. THIS GUARANTY SHALL BE
DEEMED A CONTRACT AND INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF TEXAS AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. THIS GUARANTY AND THE OTHER LOAN
Exhibit B - 13
131
DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS,
WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 5.9. Waiver of Jury Trial. EACH OF GUARANTOR, AGENTS AND
LENDERS HEREBY (a) IRREVOCABLY WAIVES, THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS GUARANTY OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH,
BEFORE OR AFTER MATURITY; (b) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES; (c) CERTIFIES THAT
NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (d)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO AND ACCEPT THIS GUARANTY,
THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS
SECTION.
SECTION 5.10. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER
PARTIES OR GUARANTOR SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF TEXAS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST
ANY PROPERTY MAY BE BROUGHT, AT THE COLLATERAL AGENT'S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH PROPERTY MAY BE FOUND. GUARANTOR HEREBY EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS
AND THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
TEXAS. FOR PURPOSES OF ANY ACTION OR PROCEEDING INSTITUTED IN THE FEDERAL OR
STATE COURTS OF TEXAS,
Exhibit B - 14
132
THE UNDERSIGNED HEREBY IRREVOCABLY DESIGNATES BORROWER WITH OFFICES ON THE DATE
HEREOF AT 303 WEST WALL STREET, SUITE 101, MIDLAND, TEXAS 79701 TO RECEIVE FOR
AND ON BEHALF OF THE UNDERSIGNED SERVICE OF PROCESS IN TEXAS. GUARANTOR HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT
THAT GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF
ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
Exhibit B - 15
133
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written but effective as of the Effective Date.
[Name of Guarantor]
By
---------------------------------Name:
Title:
Address:
303 West Wall
Suite 101
P. O. Box 3178
Midland, Texas 79701
Attention:
Curt Kamradt
Telephone:
Telecopy:
(915) 571-3171
(915) 571-5696
with a copy to:
Garrett Smith
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
Telephone:
Telecopy:
(972) 402-7013
(972) 402-7028
Exhibit B - 16
134
Exhibit C
Form of Request for Advance
_____________, ________
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn:
Mickey McLean
Re:
Request for Advance - 364 Day Credit Facility
Gentlemen:
Reference is made to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (the "Credit Agreement"). Terms which are defined
in the Credit Agreement and which are used but not defined herein are used
herein with the meanings ascribed to them in the Credit Agreement. Pursuant to
the terms of the Credit Agreement, the undersigned Borrower hereby requests
that Lenders make Advances to the undersigned Borrower in the aggregate
principal amount of $__________________, specifies _______________, _______, as
the date the undersigned Borrower desires for Lenders to make such Advances and
requests that Administrative Agent deliver to the undersigned Borrower the
proceeds thereof on such date.
To induce Lenders to make such Advances, the undersigned Borrower hereby
represents, warrants, acknowledges, and agrees to and with each Agent and each
Lender that:
(a)
The Designated Officer of Borrower signing this instrument is a
duly elected, qualified and acting officer of the undersigned Borrower, holding
the office indicated below such officer's signature hereto and having all
necessary authority to act for the undersigned Borrower in making and
delivering this Request for Advance.
(b)
The representations and warranties of the undersigned Borrower
and each other Designated Entity set forth in the Credit Agreement and the
other Loan Documents are true and correct on and as of the date hereof, with
the same effect as though such
Exhibit C - 1
135
representations and warranties had been made on and as of the date hereof.
(c)
There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as provided in
Section 6.1 of the Credit Agreement; nor will any such Default exist upon the
undersigned Borrower's receipt and application of the Advances requested
hereby. The undersigned Borrower will use the Advances hereby requested in
compliance with the Credit Agreement.
(d)
Except to the extent waived in writing as provided in Section 6.1
of the Credit Agreement, the undersigned Borrower has performed and complied
with all agreements and conditions in the Credit Agreement required to be
performed or complied with by the undersigned Borrower on or prior to the date
hereof, and each of the conditions precedent to Advances contained in the
Credit Agreement remains satisfied.
(e)
The aggregate unpaid principal balance of the Advances under the
Facility after the making of such Advance requested hereby, plus the aggregate
outstanding amount of Swing Line Advances and Competitive Bid Advances at the
date hereof will not be in excess of the Facility Amount on the date requested
for the making of such Advances.
(g)
The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any course of
dealing, or by any other means not provided for in Section 8.1 of the Credit
Agreement. The Credit Agreement and the other Loan Documents are hereby
ratified, approved, and confirmed in all respects.
The undersigned Borrower agrees that if, prior to the time of the
Advances requested hereby, any matter certified to herein by it will not be
true and correct at such time as if then made, it will immediately so notify
Administrative Agent. Except to the extent, if any, that, prior to the time of
the Advances requested hereby, Administrative Agent shall have received written
notice from the undersigned Borrower to the contrary, each matter certified
herein shall be deemed once again to be certified as true and correct as of the
date of such Advances as if then made.
The Designated Officer of the undersigned Borrower signing this
instrument hereby certifies that, to the best of his
Exhibit C - 2
136
knowledge, the above representations, warranties, acknowledgments and
agreements of the undersigned Borrower are true, correct and complete.
PIONEER NATURAL RESOURCES
COMPANY
By:
--------------------------Name:
Title:
Exhibit C - 3
137
Exhibit D
Form of Rate Election
____________________, ________
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn:
Mickey McLean
Re:
Rate Election - 364 Day Credit Facility
Gentlemen:
Reference is made to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (the "Credit Agreement"). Terms which are defined
in the Credit Agreement and which are used but not defined herein are used
herein with the meanings ascribed to them in the Credit Agreement. Pursuant to
the terms of the Credit Agreement, the undersigned Borrower hereby elects a
Tranche of Eurodollar Portions in the aggregate amount of $___________ with an
Interest Period beginning on __________ and continuing for a period of
___________________.
To satisfy the conditions set out in the Credit Agreement for the making
of such election, the undersigned Borrower hereby represents, warrants,
acknowledges and agrees that:
(a)
The Designated Officer of the undersigned Borrower signing this
instrument is a duly elected, qualified and acting officer of such Borrower,
holding the office indicated below such officer's signature hereto and having
all necessary authority to act for such Borrower in making and delivering this
Rate Election.
(b)
There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as provided in
Section 6.1 of the Credit Agreement.
(c)
The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any course of
dealing, or by any other means not provided for in
Exhibit D - 1
138
Section 8.1 of the Credit Agreement. The Credit Agreement and the other Loan
Documents are hereby ratified, approved, and confirmed in all respects.
(d)
The undersigned Borrower further agrees that if, on or prior to
the date of the commencement of the Interest Period designated herein, any
matter certified herein by it will not be true and correct at such time as if
such certification were then made, it will immediately so notify Administrative
Agent. Except to the extent, if any, that prior to the commencement of the
Interest Period designated herein Administrative Agent shall receive written
notice to the contrary from the undersigned Borrower, each matter certified
herein shall be deemed to be certified as of the date of the commencement of
such Interest Period as if then made.
The Designated Officer of the undersigned Borrower signing this
instrument hereby certifies that, to the best of his knowledge, the above
representations, warranties, acknowledgments and agreements of the undersigned
Borrower are true, correct and complete.
PIONEER NATURAL RESOURCES
COMPANY
By:
-------------------------Name:
Title:
Exhibit D - 2
139
Exhibit E
Form of Request for Swing Line Advance
VIA FACSIMILE # (214) 508-2515
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn:
Mickey McLean
Reference is made to the 364 Day Credit Facility pursuant to that certain
Amended and Restated Credit Facility Agreement dated as of December 18, 1997 by
and among Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC
Inc., as Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the CoAgents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"),. Capitalized terms used herein and not otherwise defined
herein shall have the meaning assigned in the Credit Agreement.
In accordance with Section 2.5, the undersigned hereby requests a Swing
Line Advance in an amount of $___________________ to be advanced today,
________ _________________. We request this advance be for a period of
________ day(s), maturing on ___________________.
If you have any questions regarding this request, please contact the
undersigned at (915) _____________.
PIONEER NATURAL RESOURCES
COMPANY
By:
--------------------------Name:
Title:
Exhibit E - 1
140
Exhibit F
Form of Swing Line Participation Certificate
__________________ ,199__
[Name of Bank]
__________________________
__________________________
__________________________
Gentlemen:
Reference is made to the Primary Credit Facility pursuant to that
certain Amended and Restated Credit Facility Agreement dated as of December 18,
1997 by and among Borrower, NationsBank of Texas, N.A., as Administrative
Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New
York, as Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders from time to time parties thereto
(the "Credit Agreement"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned in the Credit Agreement.
Pursuant to subsection 2.6(b)(i) of the Credit Agreement, the
undersigned hereby acknowledges receipt from you on the date hereof of
_______________________ DOLLARS ($______________) as payment for a
participating interest in the following Swing Line Advance(s):
Date(s) of Swing Line Advance(s):
______________, 199__
Principal Amount of Swing Line Advance(s):
$____________________
Very truly yours,
NATIONSBANK OF TEXAS, N.A., as
Swing Line Lender
By
---------------------------Name:
Title:
Exhibit F - 1
141
Exhibit G
[INTENTIONALLY OMITTED]
Exhibit G - 1
142
Exhibit H
Forms of Opinion of Borrower's and Restricted Subsidiaries' Counsel
Exhibit G - 2
143
Exhibit I
Organization Chart of Borrower and its Subsidiaries
Exhibit I has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Exhibit I - 1
144
Exhibit J
Form of Designated Officer's Certificate
Reference is made to (i) the Primary Credit Facility pursuant to that
certain Amended and Restated Credit Facility Agreement dated as of December 18,
1997 by and among Borrower, NationsBank of Texas, N.A., as Administrative
Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust Company of New
York, as Documentation Agent, The Chase Manhattan Bank, as Syndication Agent,
the Co-Agents party thereto, and the Lenders from time to time parties thereto
(the "Primary Credit Agreement") and (ii) the 364 Day Credit Facility pursuant
to that certain Amended and Restated Credit Facility Agreement dated as of
December 18, 1997 by and among Borrower, NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, the Co-Agents party thereto, and the Lenders from time to
time parties thereto (the "364 Day Credit Agreement" and, together with the
Primary Credit Facility, the "Credit Agreements") Terms which are defined in
the Credit Agreements and which are used but not defined herein are used herein
with the meanings given them in the Credit Agreements.
This Certificate is furnished pursuant to Section 5.1(b)(2) of the
Credit Agreements. Together herewith the Borrower is furnishing to Managing
Agents, the Co-Agents and each Lender the Borrower's [FINANCIAL STATEMENTS]
(the "Financial Statements") as of ______________(the "Reporting Date"). The
Borrower hereby represents, warrants, and acknowledges to Agents and each
Lender that:
(a)
the Designated Officer of the Borrower signing this instrument is
a duly elected, qualified and acting officer of the Borrower;
(b)
the Financial Statements are accurate and complete and satisfy
the requirements of the Credit Agreements;
(c)
attached as
showing compliance
the Reporting Date
Credit Agreements;
Schedule I hereto is a schedule of calculations
(or noncompliance, as the case may be) as of
with the requirements of Section 5.3 of the
and
(d)
on the Reporting Date, each Borrower was, and on the date hereof
the Borrower is, in full compliance with the disclosure
requirements of Section 5.1(d) of the Credit Agreements, and no
Default otherwise existed on the Reporting Date or otherwise
exists on the date of
Exhibit J - 1
145
this Certificate [except for Default(s) under Section(s)
_________ ______ of the Credit Agreements, which [is/are] more
fully described on a schedule attached hereto].
The Designated Officer of the Borrower signing this instrument hereby
certifies that he has reviewed the Loan Documents and the Financial Statements
and has otherwise undertaken such inquiry as is in his opinion necessary to
enable him to express an informed opinion with respect to the above
representations, warranties and acknowledgments of the Borrower and, to the
best of his knowledge, such representations, warranties, and acknowledgments
are true, correct and complete.
PIONEER NATURAL RESOURCES
COMPANY
By:
--------------------------Name:
Title:
Date:
-------------------------
Exhibit J - 2
146
Schedule I
================================================================================
COMPLIANCE WITH FINANCIAL COVENANTS AS OF _____________.
($ in 000's)
================================================================================
A.
EBITDAX TO CONSOLIDATED INTEREST EXPENSE RATIO
Minimum ratio allowed
============
B.
CONSOLIDATED TOTAL FUNDED DEBT TO TOTAL
CAPITALIZATION
3.75
Maximum ratio allowed
============
60%
================================================================================
COMPUTATION OF FINANCIAL REQUIREMENTS AND RATIOS AS OF _____________
================================================================================
A.
EBITDAX TO CONSOLIDATED INTEREST EXPENSE RATIO
(Section 5.3(a)) ($ in 000's)
(i)
EBITDAX (as defined in Section 5.3(a))
For the period ended __________, the sums
of the amounts for such period of
Consolidated net income, Consolidated
Interest Expense, depreciation expense,
depletion expense, amortization expense,
federal and state income taxes,
exploration and abandonment expense and
other non-cash charges and expenses, all
as determined on a Consolidated basis for
Borrower and its Consolidated
Subsidiaries;
(ii)
CONSOLIDATED INTEREST EXPENSE
(as defined in Section 5.3(a))
For the period ended ___________________,
total interest expense,
Exhibit J - 3
$______________
147
whether paid or accrued, of Borrower and
its Consolidated Subsidiaries on a
Consolidated basis, including, without
limitation, all commissions, discounts
and other fees and charges owed with
respect to Letters of Credit.
$______________
CONSOLIDATED INTEREST EXPENSE
$
==============
EBITDAX TO CONSOLIDATED INTEREST EXPENSE RATIO ((i)(ii))
$
==============
Minimum ratio allowed
$
3.75:1
==============
B.
CONSOLIDATED TOTAL FUNDED DEBT TO TOTAL
CAPITALIZATION (Section 5.3(b)) ($ in 000's)
(i)
CONSOLIDATED TOTAL FUNDED DEBT
(as defined in Section 1.1)
(a)
All indebtedness of Borrower and
its Consolidated Subsidiaries for
borrowed money
$_____________
(b)
Plus indebtedness of Borrower and
its Consolidated Subsidiaries
constituting an obligation to pay
the deferred purchase price of
property or services (other than
customary payment terms taken in
the ordinary course of the
business)
$_____________
(c)
Plus indebtedness of Borrower and
its Consolidated Subsidiaries
evidenced by a bond, debenture,
note or similar instrument
$_____________
(d)
Plus principal obligations under
leases capitalized in accordance
with GAAP under which either
Borrower or any of its
Consolidated Subsidiaries is the
lessee
$_____________
(e)
Plus indebtedness or obligations
of the type described in clauses
(a), (b), (c) or (d) of the
definition of Debt, which are
secured by a Lien on any property
owned by Borrower or any of its
Consolidated Subsidiaries, whether
or not such indebtedness or
obligations have been assumed by
Borrower or any of its
Consolidated Subsidiaries (limited
however to the lesser of (1) the
amount of its liability or (2) the
value
Exhibit J - 4
148
of such property) (excluding Debt
of the type referred to in clause
(e) of the definition of "Debt")
$_____________
(f)
Plus the undischarged balance of
any production payment created by
Borrower or any of its
Consolidated Subsidiaries or for
the creation of which Borrower or
its Consolidated Subsidiaries
directly or indirectly received
payment.
$_____________
CONSOLIDATED TOTAL FUNDED DEBT
=============
(ii)
$
TOTAL CAPITALIZATION (as defined in Section 1.1)
(a)
Consolidated Total Funded Debt of
the Borrower and its Consolidated
Subsidiaries (See B(i) above)
$_____________
(b)
Plus Consolidated shareholders'
equity of the Borrower and its
Consolidated Subsidiaries
$_____________
TOTAL CAPITALIZATION
$
=============
CONSOLIDATED TOTAL FUNDED DEBT TO TOTAL
CAPITALIZATION((i)/(ii))
=============
Maximum ratio
=============
Exhibit J - 5
%
60%
149
Exhibit K-1
Form of Election to Convert
___________________, _______
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn:
Mickey McLean
Re:
Conversion of Restricted Subsidiary
Gentlemen:
Reference is made to (i) that certain Amended and Restated Credit
Facility Agreement dated as of December 18, 1997 by and among Borrower,
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the CoAgents party thereto, and the Lenders from time to time parties thereto (the
"Primary Credit Agreement") and (ii) that certain Amended and Restated Credit
Facility Agreement dated as of December 18, 1997 by and among Borrower,
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the CoAgents party thereto, and the Lenders from time to time parties thereto (the
"364 Day Credit Agreement" and, together with the Primary Credit Agreement, the
"Credit Agreements"). Terms not defined herein which are defined in the Credit
Agreement shall have for the purposes hereof the meanings provided therein.
The Borrower hereby elects, pursuant and subject to Section 5.2(i) of
the Credit Agreements, to convert, effective as of ________________, ________,
[NAME OF RESTRICTED SUBSIDIARY], a [JURISDICTION] [CORPORATION] [PARTNERSHIP],
("Subject Subsidiary"), from a Restricted Subsidiary to an Unrestricted
Subsidiary. The Borrower hereby certifies that all requirements for the
conversion of the Subject Subsidiary to an Unrestricted Subsidiary, as
specified in the Credit Agreements, have been and will be met, both as of the
date hereof and after giving effect to such conversion. After giving effect to
such conversion, no Default will exist. The Borrower hereby agrees that the
election to convert contained herein shall not be effective if the foregoing
certifications are not true and correct in all respects as of the date hereof
or are not true and correct in all respects as of the date of such conversion.
This election to convert
Exhibit K-1 - 1
150
shall not affect any obligation of the Borrower under the Credit Agreements or
under any Note under any Credit Agreement.
This instrument shall be construed in accordance with and governed by
the laws of the State of Texas.
PIONEER NATURAL RESOURCES
COMPANY
By:
--------------------------Name:
Title:
Receipt of the above Election to Convert is hereby acknowledged on
______ ________, ________.
NATIONSBANK OF TEXAS, N.A., as
Administrative Agent
By:
--------------------------Name:
Title:
Exhibit K-1 - 2
151
Exhibit K-2
Form of Release
This Release is delivered to [NAME OF SUBSIDIARY] in connection with (i)
the Primary Credit Facility pursuant to Section 5.2(i) of that certain Amended
and Restated Credit Facility Agreement dated as of December 18, 1997 by and
among Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the CoAgents party thereto, and the Lenders from time to time parties thereto (the
"Primary Credit Agreement"), and (ii) the 364 Day Credit Facility pursuant to
Section 5.2(i) of that certain Amended and Restated Credit Facility Agreement
dated as of December 18, 1997 by and among Borrower, NationsBank of Texas,
N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (the "364 Day Credit Agreement" and, together with
the Primary Credit Agreement, the "Credit Agreements"). Defined terms used in
this Release shall be used with the same meanings set forth in the Credit
Agreements.
Pursuant to the election to convert in the form of Exhibit K-1 to the
Credit Agreements delivered to Administrative Agent on ______________________,
19 _____, the Borrower has notified the Lenders that it has converted
__________ _______ [NAME OF SUBSIDIARY] from a Restricted Subsidiary to an
Unrestricted Subsidiary. Subject to the accuracy of the information contained
in such notice of conversion, the undersigned Managing Agents and Lenders
hereby release __________________________________ [NAME OF FORMER RESTRICTED
SUBSIDIARY] from its obligations as Guarantor under its Guaranty dated as of
___ ________, 199__, as from time to time amended, modified and supplemented,
other than obligations if any, pursuant to Section _____ thereof.
This Release may be separately executed in any number of counterparts
and by different parties hereto on separate counterparts, each of which when so
executed shall be deemed to constitute one and the same release.
[Add signature lines for Lenders and
Managing Agents]
Agreed and Accepted
this
day of
------------
, 199
--
:
- --------------------------------------[Name of Restricted Subsidiary]
By:
--------------------------Name:
Title:
Exhibit K-2 - 1
152
Exhibit L
Form of Agreement to be Bound
_____________, 199____
PIONEER NATURAL RESOURCES COMPANY
303 West Wall, Suite 101
Midland, Texas 79701
Attention: Curt F. Kamradt
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attention: Mickey McLean
NationsBank of Texas, N.A.
303 West Wall Street
Midland, Texas 79701
Attn: Frank K. Stowers
CIBC Inc.
2 Houston Center
909 Fannin Street, Suite 1200
Houston, Texas 77010
Attention:
Paul Jordan
Re:
Assignment to ______________________________of
___________________________________the Loans of
_____________________ - 364 Day Credit Facility
Gentlemen:
We refer to Section 8.8(a) of that certain Amended and Restated Credit
Facility Agreement dated as of December 18, 1997 by and among Borrower,
NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc., as
Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the CoAgents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"). Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the Credit Agreement.
This Credit Agreement to be Bound constitutes notice to each of you,
pursuant to Section 8.8(a) of the Credit Agreement, of the assignment to
_______________________ ("Assignee") of (i) an undivided _____ (the "Designated
Percentage"), ($____________________________), of the Loans and Commitments of
[NAME OF LENDER] ("Assignor") in effect on the date hereof.
Exhibit L - 1
153
After giving effect to the foregoing assignment, the Loan Commitment and
Percentage Share of each of the Assignor and Assignee is as set forth beneath
the signatures of each such Person below.
Assignee hereby acknowledges and confirms that it has received a copy of
the Credit Agreement and the exhibits related thereto, together with a copy of
all documents which were required to be delivered under the Credit Agreement as
a condition to the making of the Loans thereunder. Assignee further confirms
and agrees that in becoming a Lender and in making its Loans under the Credit
Agreement, such actions have and will be made without recourse to, or
representation or warranty by, Assignor, except as expressly set forth in the
Assignment and Assumption of even date herewith between Assignor and Assignee.
Assignor and Assignee hereby agree that [ASSIGNOR/ASSIGNEE] will pay the
processing fee referred to in Section 8.8(a) of the Credit Agreement to
Administrative Agent upon the delivery thereof. It is understood and agreed
that all fees accrued under the Credit Agreement to the date hereof are for
Assignor's account and those accruing from and after the date hereof are for
Assignee's account to the extent specified in the second paragraph hereof.
Each of Assignor and Assignee hereby agree that if it receives any amount under
the Credit Agreement which is for the account of the other, it shall receive
and hold the same for the account of the other and shall promptly pay the same
to the other.
The assignment shall become effective upon (i) the receipt by the
Borrower and Administrative Agent of this document, (ii) the receipt by
Administrative Agent of the processing fee referred to in the preceding
paragraph, and (iii) in accordance with Section 8.8(a) of the Credit Agreement,
the consent of the Borrower and Administrative Agent.
Upon the effective date of this Credit Agreement the Assignee:
(a)
shall have all rights and benefits of a "Lender" under the Credit
Agreement as if it were an original signatory thereto to the extent specified
in the second paragraph hereof; and
(b)
agrees to be bound by the terms and conditions of each of the
Credit Agreement, and be obligated thereunder, and hereby makes each of the
representations and warranties and acknowledgments contained in such documents
as if it were an original signatory thereto.
Exhibit L - 2
154
Upon the effective date of this Agreement, the Assignor shall be
released from its obligations under the Credit Agreement and the other Loan
Documents to the extent specified in the second paragraph.
Assignee hereby advises each of you of the following matters with
respect to the assigned Loans:
(A)
Addresses for Notice:
----------------------------Telephone:
---------------------------------------Telecopy:
----------------------------------------Institution Name:
--------------------------------Attention:
---------------------------------------(B)
Payment Instructions:
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------This Credit Agreement may be executed by Assignor and Assignee in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
The execution below by the Borrower and Administrative Agent shall
evidence their consent to this Agreement in accordance with Section 8.8(a) of
the Credit Agreement.
Exhibit L - 3
155
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to
be executed by its official, officer or agent thereunto duly authorized,
effective as of ______________, ________.
- ---------------------------As Assignor
------------------------------------As Assignee
By:
------------------------Name:
Title:
By:
---------------------------------Name:
Title:
Percentage Share:
---------Loan Commitment:
----------
%
Percentage Share:
----------------Loan Commitment:
------------------
APPROVED:
PIONEER NATURAL RESOURCES
COMPANY
NATIONSBANK OF TEXAS, N.A.
By:
------------------------Name:
Title:
By:
---------------------------------Name:
Title:
Exhibit L - 4
%
156
Exhibit M
[Form of]
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of ___________
, 199__, made by ______________________, a __________________ corporation
("Pledgor"), in favor of NATIONSBANK OF TEXAS, N.A., as collateral agent
(together with any successor(s) thereto in such capacity, the "Collateral
Agent") for each of Lender Parties (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Pioneer Natural Resources
Company, a Delaware corporation ("Borrower"), NationsBank of Texas, N.A., as
Administrative Agent, CIBC Inc., as Documentation Agent, Morgan Guaranty Trust
Company of New York, as Documentation Agent, The Chase Manhattan Bank, as
Syndication Agent, the Co-Agents party thereto, and the Lenders from time to
time parties thereto (together with all amendments, supplements, restatements
and other modifications, if any, thereafter made thereto, the "Primary Credit
Agreement"), the Lenders have extended Commitments (as defined in the Primary
Credit Agreement) to make Loans to Borrower and to issue or participate in
Letters of Credit on behalf of Borrower; and
WHEREAS, pursuant to that certain Amended and Restated Credit Facility
Agreement dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (together with all amendments, supplements,
restatements and other modifications, if any, thereafter made thereto, the "364
Day Credit Agreement", and together with the Primary Credit Agreement, the
"Credit Agreements"), the Lenders have extended Commitments (as defined in the
364 Day Credit Agreement) to make Loans to Borrower; and
WHEREAS, pursuant to the Credit Agreements, Pledgor is required to
execute and deliver this Pledge Agreement; and
WHEREAS, Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
WHEREAS, it is in the best interests of Pledgor to execute this Pledge
Agreement inasmuch as Pledgor will derive substantial direct and indirect
benefits from the Loans made from time to
Exhibit M - 1
157
time to Borrower and Letters of Credit issued on behalf of Borrower pursuant to
the Credit Agreements;
NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce the Lenders to make Loans
(including the initial Loans) to Borrower pursuant to the Credit Agreements and
for the Issuing Bank to issue Letters of Credit on behalf of Borrower and for
the Lenders to acquire participations in such Letters of Credit pursuant to the
Primary Credit Agreement, Pledgor agrees, for the benefit of each Lender Party,
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the first recital.
"Borrower" is defined in the first recital.
"Collateral" is defined in Section 2.1.
"Collateral Agent" is defined in the preamble.
"Commitments" means "Commitments" as defined in the Primary Credit
Agreement and "Commitments" as defined in the 364 Day Credit Agreement.
"Credit Agreements" is defined in the second recital.
"Debtor" is defined in Section 2.1(a)(i).
"Distributions" means all stock dividends, liquidating dividends, shares
of stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock or security entitlements constituting Collateral, but shall not
include Dividends.
"Dividends" means cash dividends and cash distributions with respect to
any Pledged Shares made in the ordinary course of business and not a
liquidating dividend.
Exhibit M - 2
158
"Lender Party" means, as the context may require, any Lender, any
Issuing Bank or any Agent and each of its respective successors, transferees
and assigns under the Credit Agreements.
"Lenders" means "Lenders" as defined in the Primary Credit Agreement and
"Lenders" as defined in the 364 Day Credit Agreement.
"Loan Documents" means "Loan Documents" as defined in the Primary Credit
Agreement and "Loan Documents" as defined in the 364 Day Credit Agreement.
"1994 Amendments" means the 1994 Amendments to Articles 8 and 9 of the
Uniform Commercial Code promulgated by the American Law Institute and the
National Conference of Commissions for Uniform State Laws.
"Notes" means "Notes" as defined in the Primary Credit Agreement and
"Notes" as defined in the 364 Day Credit Agreement.
"Obligations" means "Obligations" as defined in the Primary Credit
Agreement and "Obligations" as defined in the 364 Day Credit Agreement.
"Pledge Agreement" is defined in the preamble.
"Pledged Share Issuer" means each Person identified in Attachment 1
hereto as the issuer of the Pledged Shares identified opposite the name of such
Person.
"Pledged Shares" means all shares of capital stock of any Pledged Share
Issuer which are delivered by Pledgor to Collateral Agent hereunder and all
other pledged shares of capital stock from time to time hereafter delivered by
Pledgor to Collateral Agent for the purpose of pledge under this Pledge
Agreement or any other Loan Document, and all proceeds of any of the foregoing.
"Pledgor" is defined in the preamble.
"Primary Credit Agreement" is defined in the first recital.
"Secured Obligations" is defined in Section 2.2.
"Securities Act" is defined in Section 6.2.
"364 Day Credit Agreement" is defined in the second recital.
"U.C.C." means the Uniform Commercial Code as in effect in the State of
Texas.
Exhibit M - 3
159
SECTION 1.2. Primary Credit Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Pledge
Agreement, including its preamble and recitals, have the meanings provided in
the Primary Credit Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or
the context otherwise requires, terms for which meanings are provided in the
U.C.C. are used in this Pledge Agreement, including its preamble and recitals,
with such meanings.
ARTICLE II
PLEDGE
SECTION 2.1. Grant of Security Interest. Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to
Collateral Agent, for its benefit and the ratable benefit of each of Lender
Parties, and hereby grants to Collateral Agent, for its benefit and the ratable
benefit of Lender Parties, a continuing security interest in, all of the
following property (the "Collateral"):
(a)
65% of the issued and outstanding shares of capital stock
of each Pledged Share Issuer identified in Item B of Attachment 1
hereto;
(b)
65% of all other Pledged Shares issued from time to time;
(c)
all Dividends, Distributions, interest, and other payments
and rights with respect to any Pledged Shares; and
(d)
all proceeds of any of the foregoing.
SECTION 2.2.
Security for Obligations.
This Pledge Agreement secures:
(a)
the payment in full of all Obligations of Borrower now or
hereafter existing under the Credit Agreements, the Notes, the LC
Applications and each other Loan Document to which Borrower is or may
become a party, whether for principal, interest, costs, fees, expenses,
or otherwise, and all obligations of Pledgor and each other Designated
Entity now or hereafter existing under this Pledge Agreement and each
other Loan Document to which it is or may become a party
(b)
the payment and performance of any and all present or
future obligations of Borrower according to the terms of any present or
future rate swap, rate cap, rate floor, rate
Exhibit M - 4
160
collar, currency exchange transaction, forward rate agreement, or other
exchange or rate protection agreements or any option with respect to any
such transaction now existing or hereafter entered into between Borrower
or any of its Subsidiaries and one or more of the Lenders or their
Affiliates ("interest rate swap agreement");
(c)
the payment and performance of any and all present or
future obligations of Borrower according to the terms of any present or
future crude oil, natural gas or other hydrocarbons swap agreements,
crude oil, natural gas or other hydrocarbons cap, crude oil, natural gas
or other hydrocarbons floor, crude oil, natural gas or other
hydrocarbons collar, crude oil, natural gas or other hydrocarbons
exchange transaction, forward crude oil, natural gas or other
hydrocarbons agreement, or other exchange or crude oil, natural gas or
other hydrocarbons protection agreements or any option with respect to
any such transaction now existing or hereafter entered into between
Borrower or any of its Subsidiaries and one or more of the Lenders or
their Affiliates; and
(d)
all renewals, rearrangements, increases, extensions for
any period, substitutions, modification, amendments or supplements in
whole or in part of any of the above loan documents or obligations
(all such obligations of Borrower and Pledgor being the "Secured
Obligations").
SECTION 2.3. Delivery of Pledged Shares. (a) All certificates or
instruments representing or evidencing any Collateral, including all Pledged
Shares shall be delivered to and held by or on behalf of Collateral Agent
pursuant hereto, shall be in suitable form for transfer by delivery, and shall
be accompanied by all necessary indorsements or instruments of transfer or
assignment, duly executed in blank.
(b)
(i)
To the extent any of the Collateral constitutes
"uncertificated securities" (as defined in Section 8-102(a)(18) of the
U.C.C. or Section 8-102 of the Uniform Commercial Code as in effect in
any jurisdiction that has not adopted the 1994 Amendments) and the
issuer of which is organized in a jurisdiction, or has selected a
jurisdiction (in circumstances permitted by Section 8-110(d) of the
U.C.C.), that has not enacted the 1994 Amendments, Pledgor shall cause
the issuer thereof to acknowledge to Collateral Agent the registration
on the books of such issuer of the pledge and security interest hereby
created in the manner required by Section 8-408(d) of the Uniform
Commercial Code of its jurisdiction of organization.
Exhibit M - 5
161
(ii) To the extent any of the Collateral constitutes
"uncertificated securities" (as defined in Section 8-102(a)(18) of the
U.C.C.) and the issuer of which is organized in a jurisdiction, or has
selected a jurisdiction (in circumstances permitted by Section 8-110(d)
of the U.C.C.), that has enacted the 1994 Amendments, Pledgor shall
cause the issuer thereof to acknowledge to Collateral Agent the
registration on the books of such issuer of the pledge and security
interest hereby created in the manner required by Section 8-301(1)(b) of
the U.C.C.
(c)
(i) To the extent any of the Collateral constitutes a "security
entitlement" or a "securities account" (as such terms are defined in
Sections 8-102(a)(17) and 8-501, respectively, of the U.C.C.) and the
jurisdiction of the securities intermediary (as described in Section 8110(e) of the U.C.C.) against which such securities entitlement is
established or at which such securities account is maintained is not a
jurisdiction that has adopted the 1994 Amendments, Pledgor shall cause
such Collateral to be transferred to Collateral Agent pursuant to
Section 8-313(1) of the Uniform Commercial Code as in effect in such
jurisdiction in a manner satisfactory to Collateral Agent.
(ii) To the extent any of the Collateral constitutes a "security
entitlement" or a "securities account" (as such terms are defined in
Sections 8-102(a)(17) and 8-501, respectively, of the U.C.C.) and the
jurisdiction of the securities intermediary (as described in Section 8110(e) of the U.C.C.) against which such securities entitlement is
established or at which such securities account is maintained is a
jurisdiction that has adopted the 1994 Amendments, Pledgor shall cause
to be delivered to Collateral Agent an agreement, in form and substance
satisfactory to Collateral Agent, executed by such securities
intermediary whereby such securities intermediary agrees (i) that it
will comply with entitlement orders originated by Collateral Agent
without further consent by Pledgor with respect to all such Collateral
(it being understood that such agreement may provide that at all times
when such securities intermediary has not been notified that a Default
is in existence, the securities intermediary may comply with entitlement
orders of Pledgor), (ii) to subordinate any security interest it may
have in and to all such Collateral to the security interest of
Collateral Agent therein and (iii) that it will not agree with any
Person other than Collateral Agent in any manner that would grant such
Person "control" over any such Collateral.
SECTION 2.4. Dividends on Pledged Shares. In the event that any
Dividend is to be paid on any Pledged Share or securities
Exhibit M - 6
162
entitlement at a time when (x) no Default has occurred and is continuing, and
no (y) Event of Default has occurred and is continuing, such Dividend or
payment may be paid directly to Pledgor. If any such Default or Event of
Default has occurred and is continuing, then any such Dividend or payment shall
be paid directly to Collateral Agent.
SECTION 2.5. Continuing Security Interest; Transfer of Note. This
Pledge Agreement shall create a continuing security interest in the Collateral
and shall
(a)
remain in full force and effect until payment in full of
all Secured Obligations and the termination of all Commitments,
(b)
be binding upon Pledgor and its successors, transferees
and assigns, and
(c)
inure, together with the rights and remedies of Collateral
Agent hereunder, to the benefit of Collateral Agent and each other
Lender Party.
Without limiting the foregoing clause (c), any Lender may assign or otherwise
transfer (in whole or in part) any Note or Loan held by it to any other Person
or entity, and such other Person or entity shall thereupon become vested with
all the rights and benefits in respect thereof granted to such Lender under any
Loan Document (including this Pledge Agreement) or otherwise, subject, however,
to any contrary provisions in such assignment or transfer, and to the
provisions of Section 8.8 of the Credit Agreements and Article VII of the
Credit Agreements. Upon the payment in full of all Secured Obligations and the
termination of all Commitments, the security interest granted herein shall
terminate and all rights to the Collateral shall revert to Pledgor. Upon any
such termination, Collateral Agent will, at Pledgor's sole expense, deliver to
Pledgor, without any representations, warranties or recourse of any kind
whatsoever, all certificates and instruments representing or evidencing all
Pledged Shares, together with all other Collateral held by Collateral Agent
hereunder, and execute and deliver to Pledgor such documents as Pledgor shall
reasonably request to evidence such termination.
SECTION 2.6. Security Interest Absolute. All rights of Collateral
Agent and the security interests granted to Collateral Agent hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional,
irrespective of (a) any lack of validity or enforceability of the Credit
Agreements, any Note or any other Loan Document, (b) the failure of any Lender
Party or any holder of any Note, (i) to assert any claim or demand or to
enforce any right or remedy against Borrower, any other
Exhibit M - 7
163
Designated Entity or any other Person under the provisions of the Credit
Agreements, any Note, any other Loan Document or otherwise, or (ii) to exercise
any right or remedy against any other guarantor of, or collateral securing, any
Obligations of Borrower or any other Designated Entity, (c) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations or any other extension, compromise or renewal of any Obligation of
Borrower or any other Designated Entity, (d) any reduction, limitation,
impairment or termination of any Obligations of Borrower or any other
Designated Entity for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and Pledgor
hereby waives any right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligations of Borrower, any other
Designated Entity or otherwise, (e) any amendment to, rescission, waiver, or
other modification of, or any consent to departure from, any of the terms of
the Credit Agreements, any Note or any other Loan Document, (f) any addition,
exchange, release, surrender or non-perfection of any collateral (including the
Collateral), or any amendment to or waiver or release of or addition to or
consent to departure from any guaranty, for any of the Obligations, or (g) any
other circumstances which might otherwise constitute a defense available to, or
a legal or equitable discharge of, Borrower, any other Designated Entity, any
surety or any guarantor.
SECTION 2.7. Waiver of Subrogation. Pledgor hereby irrevocably waives
any claim or other rights which it may now or hereafter acquire against
Borrower or any other Designated Entity that arise from the existence, payment,
performance or enforcement of Pledgor's obligations under this Pledge Agreement
or any other Loan Document, including any right of subrogation, reimbursement,
exoneration, or indemnification, any right to participate in any claim or
remedy of Lender Parties against Borrower or any other Designated Entity or any
collateral which Collateral Agent now has or hereafter acquires, whether or not
such claim, remedy or right arises in equity, or under contract, statute or
common law, including the right to take or receive from Borrower or any other
Designated Entity, directly or indirectly, in cash or other property or by setoff or in any manner, payment or security on account of such claim or other
rights. If any amount shall be paid to Pledgor in violation of the preceding
sentence and the Obligations shall not have been paid in cash in full and the
Commitments have not been terminated, such amount shall be deemed to have been
paid to Pledgor for the benefit of, and held in trust for, Lender Parties, and
shall forthwith be paid to Lender Parties to be credited and applied upon the
Obligations, whether matured or
Exhibit M - 8
164
unmatured. Pledgor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by the Credit Agreements
and that the waiver set forth in this Section is knowingly made in
contemplation of such benefits.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Warranties, etc. Pledgor represents and warrants unto
each Lender Party, as at the date of each pledge and delivery hereunder
(including each pledge and delivery of Pledged Shares) by Pledgor to Collateral
Agent of any Collateral, as set forth in this Article.
SECTION 3.1.1.
Representations in Credit Agreement. Pledgor
hereby incorporates by reference, mutatis mutandi, each of the representations
and warranties made in Sections 4.1(a), (b), (c), (d) and (e) of the Credit
Agreement.
SECTION 3.1.2.
Ownership, No Liens, etc. Pledgor is the legal and
beneficial owner of, and has good title to (and has full right and authority to
pledge and assign) such Collateral, free and clear of all liens, security
interests, options, or other charges or encumbrances, except any lien or
security interest granted pursuant hereto in favor of Collateral Agent.
SECTION 3.1.3.
Valid Security Interest. The delivery of such
Collateral to Collateral Agent is effective to create a valid, perfected, first
priority security interest in such Collateral and all proceeds thereof,
securing the Secured Obligations. No filing or other action will be necessary
to perfect or protect such security interest.
SECTION 3.1.4.
As to Pledged Shares. In the case of any Pledged
Shares constituting such Collateral, all of such Pledged Shares are duly
authorized and validly issued, fully paid, and non-assessable, and constitute
65% of the issued and outstanding shares of capital stock of each Pledged Share
Issuer owned by Pledgor set forth across from the name of such Pledged Share
Issuer on Attachment 1 hereto. Pledgor has no Restricted Subsidiary other than
the Pledged Share Issuers.
SECTION 3.1.5.
Authorization, Approval, etc. Except as
contemplated by Section 2.3(b) and (c), no authorization, approval, or other
action by, and no notice to or filing with, any governmental authority,
regulatory body or any other Person is required either (a) for the pledge by
Pledgor of any Collateral pursuant to this Pledge Agreement or for the
execution, delivery, and performance of this Pledge Agreement by Pledgor, or
(b) for the exercise by Collateral Agent of the rights provided for in this
Pledge Agreement, or, except with
Exhibit M - 9
165
respect to any Pledged Shares, as may be required in connection with a
disposition of such Pledged Shares by laws affecting the offering and sale of
securities generally, the remedies in respect of the Collateral pursuant to
this Pledge Agreement.
ARTICLE IV
COVENANTS
SECTION 4.1. Protect Collateral; Further Assurances, etc. Pledgor will
not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral (except in favor of Collateral Agent hereunder). Pledgor will
warrant and defend the right and title herein granted unto Collateral Agent in
and to the Collateral (and all right, title and interest represented by the
Collateral) against the claims and demands of all Persons whomsoever. Pledgor
agrees that at any time, and from time to time, at the expense of Pledgor,
Pledgor will promptly execute and deliver all further instruments, and take all
further action, that may be necessary or desirable, or that Collateral Agent
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Pledgor shall provide Collateral Agent with copies of all written
information received from any securities intermediary of Pledgor with respect
to any Collateral.
SECTION 4.2. Stock Powers, etc. Pledgor agrees that all Pledged Shares
(and all other shares of capital stock constituting Collateral) delivered by
Pledgor pursuant to this Pledge Agreement will be accompanied by duly indorsed
undated blank stock powers, in substantially the form of Attachment 2 hereto,
or other equivalent instruments of transfer acceptable to Collateral Agent.
Pledgor will, from time to time upon the request of Collateral Agent, promptly
deliver to Collateral Agent such stock powers, in substantially the form of
Attachment 2, instruments and similar documents, satisfactory in form and
substance to Collateral Agent, with respect to the Collateral as Collateral
Agent may reasonably request and will, from time to time upon the request of
Collateral Agent after the occurrence of any Event of Default, promptly
transfer any Pledged Shares or other shares of common stock constituting
Collateral into the name of any nominee designated by Collateral Agent.
SECTION 4.3. Continuous Pledge. Subject to Section 2.4, the Pledgor
will, at all times, keep pledged to Collateral Agent pursuant hereto all
Pledged Shares, all other shares of capital stock constituting Collateral, and
all securities, security entitlements and securities accounts constituting
Collateral and all other Collateral and other securities, instruments, security
entitlements, financial assets, investment property, proceeds,
Exhibit M - 10
166
and rights from time to time received by or distributable to Pledgor in respect
of any Collateral.
SECTION 4.4. Dividends, etc. Pledgor agrees after any acceleration
under the Credit Agreements or Default occurring on the Maturity Date, promptly
upon receipt thereof by Pledgor and without any request therefor by Collateral
Agent, to deliver (properly endorsed where required hereby or requested by
Collateral Agent) to Collateral Agent all Dividends, Distributions, all
interest, all principal, all other cash payments, and all proceeds of the
Collateral, all of which shall be held by Collateral Agent as additional
Collateral for use in accordance with Section 6.3. All Dividends,
Distributions, interest, principal, cash payments, and proceeds which may at
any time and from time to time be held by Pledgor but which Pledgor is then
obligated to deliver to Collateral Agent, shall, until delivery to Collateral
Agent, be held by Pledgor separate and apart from its other property in trust
for Collateral Agent.
SECTION 4.5. Additional Undertakings. Pledgor will not, without the
prior written consent of Collateral Agent, take or omit to take any action the
taking or the omission of which would result in any impairment or alteration of
the security interest in the Pledged Shares.
ARTICLE V
COLLATERAL AGENT
SECTION 5.1. Agent Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints Collateral Agent Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor or
otherwise, from time to time in Collateral Agent's discretion, to take any
action and to execute any writing or paper which Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Pledge Agreement,
including without limitation: (a) after the occurrence and continuance of an
Event of Default, to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral; (b) to receive, endorse, and
collect any drafts or other instruments, documents and chattel paper, in
connection with clause (a) above; and (c) to file any claims or take any action
or institute any proceedings which Collateral Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to enforce
the rights of Collateral Agent with respect to any of the Collateral. Pledgor
hereby acknowledges, consents and agrees that the power of attorney granted
pursuant to this Section is irrevocable and coupled with an interest.
Exhibit M - 11
167
SECTION 5.2. Agent May Perform. If Pledgor fails to perform any
agreement contained herein, Collateral Agent may itself perform, or cause
performance of, such agreement, and the expenses of Collateral Agent incurred
in connection therewith shall be payable by Pledgor pursuant to Section 6.4.
SECTION 5.3. Agent Has No Duty. The powers conferred on Collateral
Agent hereunder are solely to protect its interest (on behalf of Lender
Parties) in the Collateral and shall not impose any duty on it to exercise any
such powers. Except for reasonable care of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, Collateral
Agent shall have no duty as to any Collateral or responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Shares, whether or
not Collateral Agent has or is deemed to have knowledge of such matters or (b)
taking any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. Collateral Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as Pledgor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default, but failure of Collateral Agent to comply
with any such request at any time shall not in itself be deemed a failure to
exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. On or after any acceleration under the
Credit Agreements or Default occurring on the Maturity Date:
(a)
Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a secured
party on default under the U.C.C. (whether or not the U.C.C. applies to
the affected Collateral) and also may, without notice except as
specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of Collateral Agent's offices
or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as Collateral Agent may deem commercially reasonable.
Pledgor agrees that, to the extent notice of sale shall be required by
law,
Exhibit M - 12
168
at least ten days' prior notice to Pledgor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. Collateral Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale
having been given. Collateral Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(b)
Collateral Agent may (i) transfer all or any part of the
Collateral into the name of Collateral Agent or its nominee, with or
without disclosing that such Collateral is subject to the lien and
security interest hereunder, (ii) notify the parties obligated on any of
the Collateral to make payment to Collateral Agent of any amount due or
to become due thereunder, (iii) enforce collection of any of the
Collateral by suit or otherwise, and surrender, release or exchange all
or any part thereof, or compromise or extend or renew for any period
(whether or not longer than the original period) any obligations of any
nature of any party with respect thereto, (iv) endorse any checks,
drafts, or other writings in Pledgor's name to allow collection of the
Collateral, (v) take control of any proceeds of the Collateral, and (vi)
execute (in the name, place and stead of Pledgor) endorsements,
assignments, stock powers and other instruments of conveyance or
transfer with respect to all or any of the Collateral.
SECTION 6.2. Compliance with Restrictions. Pledgor agrees that in any
sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, Collateral Agent is hereby authorized to comply with any
limitation or restriction in connection with such sale as it may be advised by
counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and Pledgor further agrees that such compliance shall not result in such sale
being considered or deemed not to have been made in a commercially reasonable
manner, nor shall Collateral Agent be liable nor accountable to Pledgor for any
discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
Exhibit M - 13
169
SECTION 6.3. Application of Proceeds. All cash proceeds received by
Collateral Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral may, in the discretion of
Collateral Agent, be held by Collateral Agent as additional collateral security
for, or then or at any time thereafter be applied (after payment of any amounts
payable to Collateral Agent pursuant to Sections 6.4 of the Credit Agreements)
in whole or in part by Collateral Agent against, all or any part of the Secured
Obligations in such order as Collateral Agent shall elect.
Any surplus of such cash or cash proceeds held by Collateral Agent and
remaining after payment in full of all the Secured Obligations, and the
termination of all Commitments, shall be paid over to Pledgor or to whomsoever
may be lawfully entitled to receive such surplus.
SECTION 6.4. Indemnity and Expenses. Pledgor hereby indemnifies and
holds harmless Collateral Agent in accordance with Sections 6.4 of the Credit
Agreements.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION 7.2. Amendments. No amendment to or waiver of any provision of
this Pledge Agreement, nor consent to any departure by Pledgor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Administrative Agent, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
SECTION 7.3. Protection of Collateral. Collateral Agent may from time
to time, at its option, perform any act which Pledgor agrees hereunder to
perform and which Pledgor shall fail to perform after being requested in
writing so to perform after the occurrence and continuance of an Event of
Default and Collateral Agent may from time to time take any other action which
Collateral Agent reasonably deems necessary for the maintenance, preservation
or protection of any of the Collateral or of its security interest therein.
SECTION 7.4. Obligations Not Affected. The obligations of Pledgor
under this Pledge Agreement shall remain in full force and effect without
regard to, and shall not be impaired or affected by:
Exhibit M - 14
170
(a)
any amendment or modification or addition or supplement to
the Credit Agreements, any Note, any other Loan Documents, any
instrument delivered in connection therewith, or any assignment or
transfer thereof;
(b)
any exercise, non-exercise, or waiver by Collateral Agent
or any Lender of any right, remedy, power, or privilege under or in
respect of, or any release of any guaranty or collateral provided
pursuant to, this Pledge Agreement, the Credit Agreements, Pledgor's
Guaranty or any other Loan Document;
(c)
any waiver, consent, extension, indulgence, or other
action or inaction in respect of this Pledge Agreement, the Credit
Agreements, Pledgor's Guaranty or any other Loan Document or any
assignment or transfer of any thereof; or
(d)
any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation, or the like, of Pledgor or any
other Person, whether or not Pledgor shall have notice or knowledge of
any of the foregoing.
SECTION 7.5. Notices. All notices, requests, consents, demands and
other communications required or permitted hereunder shall be in writing,
unless otherwise specifically provided herein and shall be deemed sufficiently
given or furnished if delivered by personal delivery, by telecopy (with
telephonic confirmation of transmission, by delivery service with proof of
delivery, or by registered or certified United States mail, postage prepaid, to
Pledgor at the address of Pledgor specified on the signature pages hereto and
to each Agent and each Lender at their addresses specified on the signature
pages to the Credit Agreements (unless changed by similar notice in writing
given by the particular Person whose address is to be changed). Any such
notice or communication shall be deemed to have been given: (a) in the case of
personal delivery service, as of the date of first attempted delivery at the
address provided herein; (b) in the case of telecopy, upon receipt; or (c) in
the case of registered or certified United States mail, three days after
deposit in the mail, postage prepaid.
SECTION 7.6. No Waiver; Remedies. No failure on the part of any Lender
Party or any holder of a Note, an LC Application, or an interest in an LC
Obligation to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Exhibit M - 15
171
SECTION 7.7. Section Captions. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION 7.8. Severability. Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.
SECTION 7.9. Governing Law, Entire Agreement. THIS PLEDGE AGREEMENT
SHALL BE DEEMED A CONTRACT AND INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF
TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THIS PLEDGE AGREEMENT AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.10. Waiver of Jury Trial. EACH OF PLEDGOR, AGENTS AND LENDERS
HEREBY (a) IRREVOCABLY WAIVES, THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS PLEDGE
AGREEMENT OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH,
BEFORE OR AFTER MATURITY; (b) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES; (c) CERTIFIES THAT
NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (d)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO AND ACCEPT THIS PLEDGE
AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY
AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION.
SECTION 7.11. Forum Selection and Consent to Jurisdiction.
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
Exhibit M - 16
ANY
172
CONNECTION WITH, THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF LENDER PARTIES OR PLEDGOR SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF TEXAS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS; PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY BE BROUGHT, AT COLLATERAL
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH PROPERTY MAY BE
FOUND. PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF TEXAS AND THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF TEXAS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH
ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF TEXAS. FOR PURPOSES OF ANY ACTION OR PROCEEDING
INSTITUTED IN THE FEDERAL OR STATE COURTS OF TEXAS, THE UNDERSIGNED HEREBY
IRREVOCABLY DESIGNATES BORROWER WITH OFFICES ON THE DATE HEREOF AT 303 WEST
WALL STREET, SUITE 101, MIDLAND, TEXAS 79701 TO RECEIVE FOR AND ON BEHALF OF
THE UNDERSIGNED SERVICE OF PROCESS IN TEXAS. PLEDGOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, PLEDGOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS PLEDGE AGREEMENT.
THIS WRITTEN PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
Exhibit M - 17
173
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[Pledgor]
------------------------------------------------By:
---------------------------------------------Name:
Title:
Address:
303 West Wall
Suite 101
P. O. Box 3178
Midland, Texas 79701
Attention:
Telephone:
Telecopy:
Curt Kamradt
(915) 571-3171
(915) 571-5696
with a copy to:
Garrett Smith
1400 Williams Square West
5205 North O'Connor Blvd.
Irving, Texas 75039
Telephone:
Telecopy:
Exhibit M - 18
(972) 402-7013
(972) 402-7028
174
NATIONSBANK OF TEXAS, N.A.
By
------------------------------------------------Name: Frank K. Stowers
Title: Vice President
Address:
303 W. Wall
P. O. Box 1599
Midland, Texas 79701
Attention:
Exhibit M - 19
Frank K. Stowers
175
ACKNOWLEDGMENT
The undersigned hereby agrees and consents to the terms and provisions
of the foregoing Pledge Agreement, including, without limitation, Section 2.3
and Article IV of the Pledge Agreement. The undersigned hereby acknowledges
the registration on its books of the pledge and security interest created by
the Pledge Agreement in the manner required by Section 8-301(1)(b) of the
U.C.C. and that undersigned will not permit any sale, transfer, pledge or other
encumbrance of the Pledged Interests without the prior written consent of the
Agent.
----------------------By:
-------------------Name:
Title:
Exhibit M - 20
176
ATTACHMENT 1
to
Pledge Agreement
Pledged Shares
Pledged Share Issuer
Outstanding
Shares
Shares
Delivered
- ----------------
-----------
------------
- ----------------
-----------
------------
Exhibit M - 21
177
ATTACHMENT 2
to
Pledge Agreement
STOCK POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
___________________________________________________________________________
(_______________________) shares of common stock in ___________________________
_, a _______________ corporation, represented by the attached Certificate
No.___ _________ herewith and do hereby irrevocably constitute and appoint
____________ ___________________________________________ attorney to transfer
the said stock on the books of ______________________________ with full power
of substitution in the premises.
DATED
-------------------[PLEDGOR]
----------------------------------------By:
-------------------------------------Name:
Title:
IN PRESENCE OF
- -----------------------
Exhibit M - 22
178
Exhibit N
Request for Competitive Bid Offer
_____________, ________
To:
The Lenders party to the Credit Agreement, NationsBank of Texas, N.A.,
as agent (the "Administrative Agent")
From:
_________________________ (the "Borrower")
Re:
364 Day Credit Facility - Amended and Restated Credit Facility Agreement
dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent,
Morgan Guaranty Trust Company of New York, as Documentation Agent, The
Chase Manhattan Bank, as Syndication Agent, the Co-Agents party thereto,
and the Lenders from time to time parties thereto (the "Credit
Agreement")
Pursuant to Section 2.22 of the Credit Agreement, we hereby request
Competitive Bid Offers for the following proposed Competitive Bid Advance(s):
Borrowing Date: _________________, ______
Exhibit N - 1
179
Principal Amount(1)
Requested Maturity Date(2)
$
Upon acceptance by the undersigned of any or all of the Competitive Bid
Offers tendered by Lenders in response to this request, the undersigned shall
be deemed to affirm as of the borrowing date thereof the representations and
warranties made by the Designated Entities in the Credit Agreement and the
other Loan Documents to the extent specified in Section 3.2 thereof (except to
the extent such representations and warranties relate solely to an earlier
date).
Capitalized terms used herein have the meanings assigned to them in the
Credit Agreement.
PIONEER NATURAL RESOURCES
COMPANY
By:
--------------------------Name:
Title:
- ------------------------(1) Amount must be at least $10,000,000 and an integral multiple of
$1,000,000.
(2) At least 15 and up to 360 days.
Exhibit N - 2
180
Exhibit O
Competitive Bid Offer
______________, ____
To:
_________________________
Attn: ___________________
Re:
364 Day Credit Facility - Competitive Bid Offer to Pioneer Natural
Resources Company (the "Borrower")
In response to the Borrower's Request for Competitive Bid Offer dated
___ _____, 199_, we hereby make the following Competitive Bid Offer pursuant to
Section 2.22 of the Credit Agreement hereinafter referred to and on the
following terms:
1.
Quoting Lender: _________________________________________
2.
Person to contact at Lender: ____________________________
3.
Borrowing Date: ____________, ______(1)
4.
We hereby offer to make Competitive Bid Advance(s) in the following
principal amounts, for the following periods and at the following rates:
Principal
Amount(2)
- --------
Maturity
Date(3)
--------
Competitive
Bid Rate(4)
------------
$
- ------------------------(1)
As specified in the related Request for Competitive Bid Offer.
(2)
Principal amount bid for each maturity date may not exceed the principal
amount requested. Bids must be made for at least $10,000,000 or an
integral multiple of $1,000,000 in excess thereof.
(3)
At least 15 and up to 360 days, as specified in the related Request for
Competitive Bid Offer.
(4)
Specify rate of interest per annum (rounded to the nearest 1/10,000 of
1%).
Exhibit O - 1
181
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in that certain Amended
and Restated Credit Facility Agreement dated as of December 18, 1997 by and
among Borrower, NationsBank of Texas, N.A., as Administrative Agent, CIBC Inc.,
as Documentation Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, The Chase Manhattan Bank, as Syndication Agent, the CoAgents party thereto, and the Lenders from time to time parties thereto (the
"Credit Agreement"), irrevocably obligates us to make the Competitive Bid
Advance(s) for which any offer(s) are accepted, in whole or in part.
Capitalized terms used herein and not otherwise defined herein shall have their
meanings as defined in the Credit Agreement.
Very truly yours,
[NAME OF BANK]
Dated:
,
-------------- ----Authorized Officer
Exhibit O - 2
By:
----------------------------------
182
Exhibit P
Bid Acceptance
___________________, _____
To:
[Name of Lender]
Re:
364 Day Credit Facility - Request for Competitive Bid Offer from Pioneer
Natural Resources Company (the "Borrower")
Pursuant to that certain Amended and Restated Credit Facility Agreement
dated as of December 18, 1997 by and among Borrower, NationsBank of Texas,
N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (the "Credit Agreement"), we accept your
Competitive Bid Offer for the following proposed Competitive Bid Advance(s) and
reject any Competitive Bid Offer to the Competitive Bid Borrower not described
below:
Borrowing Date:
______________, ______
Principal Amount
- ----------------
Maturity Date
-------------
Competitive Bid Rate
--------------------
$
Capitalized terms used herein have the meanings assigned to them in the
Credit Agreement.
PIONEER NATURAL RESOURCES
COMPANY
By:
--------------------------Authorized Officer
Exhibit P - 1
183
Exhibit Q
[Form of]
Certificate of Extension
_____________, ________
NationsBank of Texas, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attn: Ruth De la Garza
NationsBank of Texas, N.A.
303 West Wall Street
Midland, Texas 79701
Attn: Frank K. Stowers
Re:
Extension of Maturity Date - 364 Day Credit Facility
Gentlemen:
Reference is made to that certain Amended and Restated Credit Facility
Agreement, dated as of December 18, 1997 by and among Borrower, NationsBank of
Texas, N.A., as Administrative Agent, CIBC Inc., as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Documentation Agent, The Chase Manhattan
Bank, as Syndication Agent, the Co-Agents party thereto, and the Lenders from
time to time parties thereto (the "Credit Agreement"). Terms which are defined
in the Credit Agreement and which are used but not defined herein are used
herein with the meanings ascribed to them in the Credit Agreement.
Pursuant to the terms of Section 2.12 of the Credit Agreement, Borrower
hereby requests an extension of the Maturity Date under the Credit Agreement
for a period of 364 days from the current Maturity Date.
To induce Lenders to make such an extension of the current Maturity
Date, Borrower hereby represents, warrants, acknowledges, and agrees to and
with each Agent and each Lender that:
(a)
The Designated Officer of Borrower signing this instrument is a
duly elected, qualified and acting officer of Borrower, holding the office
indicated below such officer's signature hereto and having all necessary
authority to act for Borrower in making and delivering this Certificate of
Extension.
Exhibit Q - 1
184
(b)
The representations and warranties of Borrower and each other
Obligor set forth in the Credit Agreement and the other Loan Documents are true
and correct on and as of the date hereof, with the same effect as though such
representations and warranties had been made on and as of the date hereof.
(c)
There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as provided in
Section 6.1 of the Credit Agreement.
(d)
Except to the extent waived in writing as provided in Section 6.1
of the Credit Agreement, Borrower has performed and complied with all
agreements and conditions in the Credit Agreement required to be performed or
complied with by Borrower on or prior to the date hereof.
(g)
The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any course of
dealing, or by any other means not provided for in Section 8.1 of the Credit
Agreement. The Credit Agreement and the other Loan Documents are hereby
ratified, approved, and confirmed in all respects.
Borrower agrees that if, prior to the time of the extension of the
current Maturity Date requested hereby, any matter certified to herein by it
will not be true and correct at such time as if then made, it will immediately
so notify Administrative Agent. Except to the extent, if any, that, prior to
the time of the extension of the current Maturity Date requested hereby,
Administrative Agent shall have received written notice from Borrower to the
contrary, each matter certified herein shall be deemed once again to be
certified as true and correct as of the date of such extension as if then made.
The Designated Officer of Borrower signing this instrument hereby
certifies that, to the best of his knowledge, the above representations,
warranties, acknowledgments and agreements of Borrower are true, correct and
complete.
PIONEER NATURAL RESOURCES
USA, INC.
By:
--------------------------Name:
Title:
Exhibit Q - 2
185
Schedule 1
Schedule of Lenders' Commitments and Percentage Share
Schedule 1 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 1 - 1
186
Schedule 2
Disclosure Schedule
Schedule 2 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 2 - 1
187
Schedule 3
Schedule of Restricted Subsidiaries
Schedule 3 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 3 - 1
188
Schedule 4
Schedule of Insurance
Schedule 4 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 4 - 1
189
Schedule 5
Schedule of Security Instruments
Schedule 5 has been omitted from this filing as (i) it is not material to an
investment decision and (ii) the information that it contains has been
disclosed elsewhere if disclosure of such information is required. Pioneer
Natural Resources Company agrees to furnish supplementally a copy of any
omitted schedule to the Securities and Exchange Commission upon request.
Schedule 5 - 1
1
EXHIBIT 10.3
CHAUVCO RESOURCES LTD.
As Borrower
- and CANADIAN IMPERIAL BANK OF COMMERCE
As Arranger, Administrative Agent, and Canadian Resident Lender
- and BANK OF NOVA SCOTIA
As Co-Syndication Agent and Canadian Resident Lender
- and ROYAL BANK OF CANADA
As Co-Syndication Agent and Canadian Resident Lender
- and THE CHASE MANHATTAN BANK OF CANADA
As Co-Agent and Canadian Resident Lender
- and MORGAN GUARANTY TRUST COMPANY OF NEW YORK
As Co-Agent and Non-resident Lender
- and NATIONSBANK OF TEXAS, N.A.
As Co-Agent and Non-resident Lender
- and THE TORONTO-DOMINION BANK
As Co-Agent and Canadian Resident Lender
- and FIRST UNION NATIONAL BANK
As Non-resident Lender
- and WACHOVIA BANK, N.A.
As Non-resident Lender
- and THOSE FINANCIAL INSTITUTIONS WHICH
HEREAFTER BECOME LENDERS
- -------------------------------------------------------------------------------CREDIT AGREEMENT
- -------------------------------------------------------------------------------Effective December 18, 1997
2
TABLE OF CONTENTS
ARTICLE 1
INTERPRETATION
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
1.14
1.15
Definitions . . . . . . . . . .
Headings . . . . . . . . . . .
Subdivisions . . . . . . . . .
Number . . . . . . . . . . . .
Statutes, Regulations and Rules
Monetary References . . . . . .
Time . . . . . . . . . . . . .
Governing Law . . . . . . . . .
Enurement . . . . . . . . . . .
Amendments . . . . . . . . . .
No Waiver . . . . . . . . . . .
Severability . . . . . . . . .
Inconsistency . . . . . . . . .
Accounting Terms and Principles
Schedules . . . . . . . . . . .
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