EXHIBIT
10.1
Execution Version
Third
Amended and Restated Credit Agreement
Dated
as of
April
14, 2009
among
St. Mary Land & Exploration
Company
,
as
Borrower,
Wachovia Bank, National
Association
,
as
Administrative Agent,
Bank
of America, N.A.,
As
Syndication Agent,
Comerica
Bank,
BBVA
Compass,
and
JPMorgan
Chase
Bank,
N.A.,
As
Co-Documentation Agents
,
and
The
Lenders Party Hereto
with
Wachovia
Capital Markets, LLC
As
Joint Lead Arranger and
Sole
Bookrunner
and
Banc
of America Securities,
As
Joint Lead Arranger
$1,000,000,000
Senior Secured
Revolving
Credit Facility
TABLE
OF CONTENTS
|
Page
|
|
|
ARTICLE
I DEFINITIONS AND ACCOUNTING MATTERS
|
1
|
Section
1.01
|
Terms
Defined Above
|
1
|
Section
1.02
|
Certain
Defined Terms
|
2
|
Section
1.03
|
Types
of Loans and Borrowings
|
21
|
Section
1.04
|
Terms
Generally
|
21
|
Section
1.05
|
Accounting
Terms and Determinations; GAAP
|
22
|
ARTICLE
II THE CREDITS
|
22
|
Section
2.01
|
Commitments
|
22
|
Section
2.02
|
Loans
and Borrowings
|
22
|
Section
2.03
|
Requests
for Borrowings
|
23
|
Section
2.04
|
Interest
Elections
|
24
|
Section
2.05
|
Funding
of Borrowings
|
26
|
Section
2.06
|
Termination,
Reduction and Increase of Aggregate Commitment
|
26
|
Section
2.07
|
Borrowing
Base
|
28
|
Section
2.08
|
Letters
of Credit
|
31
|
Section
2.09
|
Swingline
Loans
|
36
|
ARTICLE
III PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS;
FEES
|
37
|
Section
3.01
|
Repayment
of Loans
|
37
|
Section
3.02
|
Interest
|
37
|
Section
3.03
|
Alternate
Rate of Interest
|
38
|
Section
3.04
|
Prepayments.
|
39
|
Section
3.05
|
Fees
|
41
|
ARTICLE
IV PAYMENTS; PRO RATA TREATMENT; SHARING OF
SET-OFFS.
|
42
|
Section
4.01
|
Payments
Generally; Pro Rata Treatment; Sharing of Set-offs
|
42
|
Section
4.02
|
Presumption
of Payment by the Borrower
|
43
|
Section
4.03
|
Certain
Deductions by the Administrative Agent
|
43
|
Section
4.04
|
Disposition
of Proceeds
|
43
|
ARTICLE
V INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES;
ILLEGALITY
|
44
|
Section
5.01
|
Increased
Costs
|
44
|
Section
5.02
|
Break
Funding Payments
|
45
|
Section
5.03
|
Taxes
|
45
|
Section
5.04
|
Designation
of Different Lending Office
|
46
|
Section
5.05
|
Illegality
|
47
|
Section
5.06
|
Replacement
of Lenders
|
47
|
|
|
|
ARTICLE
VI CONDITIONS PRECEDENT
|
48
|
Section
6.01
|
Effective
Date
|
48
|
Section
6.02
|
Each
Credit Event
|
50
|
ARTICLE
VII REPRESENTATIONS AND WARRANTIES
|
51
|
Section
7.01
|
Organization;
Powers
|
51
|
Section
7.02
|
Authority;
Enforceability
|
51
|
Section
7.03
|
Approvals;
No Conflicts
|
51
|
Section
7.04
|
Financial
Condition; No Material Adverse Change
|
52
|
Section
7.05
|
Litigation
|
52
|
Section
7.06
|
Environmental
Matters
|
52
|
Section
7.07
|
Compliance
with the Laws and Agreements; No Defaults
|
53
|
Section
7.08
|
Investment
Company Act
|
54
|
Section
7.09
|
Public
Utility Holding Company Act
|
54
|
Section
7.10
|
Taxes
|
54
|
Section
7.11
|
ERISA
|
54
|
Section
7.12
|
Disclosure;
No Material Misstatements
|
55
|
Section
7.13
|
Insurance
|
56
|
Section
7.14
|
Restriction
on Liens
|
56
|
Section
7.15
|
Subsidiaries
|
56
|
Section
7.16
|
Location
of Business and Offices
|
56
|
Section
7.17
|
Properties;
Titles, Etc
|
57
|
Section
7.18
|
Maintenance
of Properties
|
58
|
Section
7.19
|
Gas
Imbalances, Prepayments
|
58
|
Section
7.20
|
Marketing
of Production
|
58
|
Section
7.21
|
Swap
Agreements
|
58
|
Section
7.22
|
Use
of Loans and Letters of Credit
|
59
|
Section
7.23
|
Solvency
|
59
|
Section
7.24
|
Material
Agreements
|
59
|
ARTICLE
VIII AFFIRMATIVE COVENANTS
|
59
|
Section
8.01
|
Financial
Statements; Ratings Change; Other Information
|
60
|
Section
8.02
|
Notices
of Material Events
|
62
|
Section
8.03
|
Existence;
Conduct of Business
|
62
|
Section
8.04
|
Payment
of Obligations
|
63
|
Section
8.05
|
Performance
of Obligations under Loan Documents
|
63
|
Section
8.06
|
Operation
and Maintenance of Properties
|
63
|
Section
8.07
|
Insurance
|
64
|
Section
8.08
|
Books
and Records; Inspection Rights
|
64
|
Section
8.09
|
Compliance
with Laws
|
64
|
Section
8.10
|
Environmental
Matters
|
64
|
Section
8.11
|
Further
Assurances
|
65
|
Section
8.12
|
Reserve
Reports
|
66
|
Section
8.13
|
Title
Information
|
67
|
Section
8.14
|
Additional
Collateral; Additional Guarantors
|
67
|
Section
8.15
|
ERISA
Compliance
|
68
|
Section
8.16
|
Performance
of Material Agreements
|
69
|
ii
ARTICLE
IX NEGATIVE COVENANTS
|
69
|
Section
9.01
|
Financial
Covenants
|
69
|
Section
9.02
|
Debt
|
69
|
Section
9.03
|
Liens
|
71
|
Section
9.04
|
Dividends,
Distributions and Redemptions
|
71
|
Section
9.05
|
Investments,
Loans and Advances
|
72
|
Section
9.06
|
Designation
of Material Subsidiaries
|
73
|
Section
9.07
|
Nature
of Business; International Operations
|
73
|
Section
9.08
|
Proceeds
of Notes
|
73
|
Section
9.09
|
ERISA
Compliance
|
74
|
Section
9.10
|
Sale
or Discount of Receivables
|
75
|
Section
9.11
|
Mergers,
Etc
|
75
|
Section
9.12
|
Sale
of Properties
|
75
|
Section
9.13
|
Environmental
Matters
|
76
|
Section
9.14
|
Transactions
with Affiliates
|
76
|
Section
9.15
|
Subsidiaries
|
76
|
Section
9.16
|
Negative
Pledge Agreements; Dividend Restrictions
|
76
|
Section
9.17
|
Gas
Imbalances, Take-or-Pay or Other Prepayments
|
76
|
Section
9.18
|
Swap
Agreements
|
77
|
Section
9.19
|
Preservation
of Material Agreements
|
77
|
Section
9.20
|
Release
of Liens
|
77
|
ARTICLE
X EVENTS OF DEFAULT; REMEDIES
|
78
|
Section
10.01
|
Events
of Default
|
78
|
Section
10.02
|
Remedies
|
80
|
ARTICLE
XI THE ADMINISTRATIVE AGENT
|
80
|
Section
11.01
|
Appointment;
Powers
|
80
|
Section
11.02
|
Duties
and Obligations of Administrative Agent
|
81
|
Section
11.03
|
Action
by Administrative Agent
|
81
|
Section
11.04
|
Reliance
by Administrative Agent
|
82
|
Section
11.05
|
Subagents
|
82
|
Section
11.06
|
Resignation
or Removal of Administrative Agent
|
82
|
Section
11.07
|
Administrative
Agent as Lenders
|
83
|
Section
11.08
|
No
Reliance
|
83
|
Section
11.09
|
Authority
of Administrative Agent to Release Collateral and Liens
|
84
|
Section
11.10
|
Syndication
Agent and Co-Documentation Agents
|
84
|
Section
11.11
|
Administrative
Agent May File Proofs of Claim
|
84
|
ARTICLE
XII MISCELLANEOUS
|
85
|
Section
12.01
|
Notices
|
85
|
Section
12.02
|
Waivers;
Amendments
|
86
|
Section
12.03
|
Expenses,
Indemnity; Damage Waiver.
|
87
|
Section
12.04
|
Successors
and Assigns
|
90
|
Section
12.05
|
Survival;
Revival; Reinstatement
|
93
|
Section
12.06
|
Counterparts;
Integration; Effectiveness
|
93
|
Section
12.07
|
Severability
|
94
|
iii
Section
12.08
|
Right
of Setoff
|
94
|
Section
12.09
|
GOVERNING
LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS
|
94
|
Section
12.10
|
Headings
|
96
|
Section
12.11
|
Confidentiality
|
96
|
Section
12.12
|
Interest
Rate Limitation
|
97
|
Section
12.13
|
EXCULPATION
PROVISIONS
|
98
|
Section
12.14
|
Existing
Credit Agreement
|
98
|
Section
12.15
|
Collateral
Matters; Swap Agreements
|
99
|
Section
12.16
|
No
Third Party Beneficiaries
|
100
|
Section
12.17
|
USA
Patriot Act Notice
|
100
|
Annex
I
List of Commitments
Annex
II Existing
Letters of Credit
Exhibit
A Form
of Note
Exhibit
B Form
of Compliance Certificate
Exhibit
C Security
Instruments
Exhibit
D
Form of Assignment and Assumption
Exhibit
E Form
of Commitment Increase Certificate
Exhibit
F Form
of Additional Lender Certificate
Exhibit
G Reaffirmation
Agreement
Exhibit H
Form of Legal Opinion of Ballard Spahr Andrews & Ingersoll LLP, special
counsel to the Borrower and Guarantors
Schedule
7.05
Litigation
Schedule
7.15 Subsidiaries
and Partnerships; Non-Material Subsidiaries
Schedule
7.19 Gas
Imbalances
Schedule
7.20 Marketing
Contracts
Schedule
7.21 Swap
Agreements
Schedule
7.24 Material
Agreements
Schedule
9.05(a) Investments
Schedule
9.05(h) Existing
Investments (Non-Oil and Gas)
iv
THIS THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of April 14
, 2009
, is by and
among
ST. MARY LAND
& EXPLORATION COMPANY
, a
corporation duly
formed
and existing under the laws of the State of
Delaware
(the
“
Borrower
”);
each of the Lenders from time to time party hereto;
WACHOVIA BANK, NATIONAL
ASSOCIATION
(in its individual
capacity, “
Wachovia
”), as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, by operation of law or as otherwise provided
herein, the “
Administrative
Agent
”); Bank of America, N.A., as Syndication Agent;
and
Comerica Bank, BBVA
Compass and JPMorgan Chase Bank, N.A., as Co-Documentation Agents.
The parties hereto agree as
follows:
RECITALS
(A) The
Borrower, the Administrative Agent, the lenders from time to time party thereto
and the other agents and parties referred to therein entered into that certain
Credit Agreement dated as of January 27, 2003, (the “
Original Credit
Agreement
”), which was amended and restated by that certain Amended and
Restated Credit Agreement dated as of April 7, 2005, among the Borrower, the
Administrative Agent, the lenders party thereto and the other agents and parties
referred to therein, as amended by that certain First Amendment to Amended and
Restated Credit Agreement dated as of March 19, 2007, (the “
First Amendment
”, and
such Amended and Restated Credit Agreement, as amended by the First Amendment,
the “
Amended and
Restated Credit Agreement
”).
(B) The
Amended and Restated Credit Agreement was amended and restated by that certain
Second Amended and Restated Credit Agreement dated as of April 10, 2008, among
the Borrower, the Administrative Agent, the lenders party thereto and the other
agents and parties referred to therein (the “
Existing Credit
Agreement
”).
(C) The
Borrower, the Administrative Agent, the Lenders (as defined below) and the other
agents and parties hereto desire to amend and restate the Existing Credit
Agreement, such restatement to supplement and replace the Existing Credit
Agreement without affecting the requirements thereof with respect to periods
occurring, or measured by dates, prior to the effective date of such amendment
and restatement.
(D) In
consideration of the mutual covenants and agreements herein contained and of the
loans, extensions of credit and commitments hereinafter referred to, the parties
hereto agree as follows, in doing so amending and restating in its entirety the
Existing Credit Agreement effective as of the Effective Date without affecting
the requirements of the Existing Credit Agreement existing, or measured by dates
or periods, prior to the Effective Date, as more fully set forth
herein.
ARTICLE
I
Definitions
and Accounting Matters
Section
1.01
Terms Defined
Above
. As
used in this Third Amended and Restated Credit Agreement, each term defined
above has the meaning indicated above.
Section
1.02
Certain Defined
Terms
. As
used in this Third Amended and Restated Credit Agreement, the following terms
have the meanings specified below:
“
ABR
”, when used in
reference to any Loan or Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by
reference to the Alternate Base Rate.
“
Additional Lender
”
has the meaning assigned to such term in Section 2.06(c)(i).
“
Additional Lender
Certificate
” has the meaning assigned to such term in Section
2.06(c)(ii)(F).
“
Adjusted LIBO Rate
”
means, with respect to any Eurodollar Borrowing for any Interest Period, an
interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the
Statutory Reserve Rate.
“
Administrative
Questionnaire
” means an Administrative Questionnaire in a form supplied
by the Administrative Agent.
“
Affected Loans
” has
the meaning assigned such term in Section 5.05.
“
Affiliate
” means,
with respect to a specified Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.
“
Aggregate Commitment
”
at any time means the aggregate amount of the Commitments of all the Lenders, as
reduced, increased or terminated from time to time pursuant to the terms hereof;
provided
that
the Aggregate
Commitment shall not at any time exceed the Maximum Credit Amount; and
provided
further
that
, the initial
Aggregate Commitment hereunder is $678,000,000 for the period from and including
the Effective Date to but excluding the date such amount is reduced, increased
or terminated pursuant to the terms hereof.
“
Aggregate Revolving Credit
Exposures
” at any time means the aggregate amount of the Revolving Credit
Exposures of all of the Lenders.
“
Agreement
” means this
Third Amended and Restated Credit Agreement, as the same may from time to time
be amended, modified, supplemented or restated.
“
Alternate Base Rate
”
means, for any day, a rate per annum equal to the greatest of (i) the Prime Rate
in effect on such day, (ii) the Federal Funds Effective Rate in effect on such
day plus ½ of 1% and (iii) the Adjusted LIBO Rate for a one month Interest
Period on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1.5%;
provided
that, for
the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the
rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or
substitute page) at approximately 11:00 a.m. London time on such day (or the
immediately preceding Business Day
2
if such
day is not a day on which banks are open for dealings in dollar deposits in the
London interbank market). Any change in the Alternate Base Rate due
to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted
LIBO Rate shall be effective from and including the effective date of such
change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO
Rate, respectively.
“
Applicable Margin
”
means, for any day, with respect to any ABR Loan or Eurodollar Loan, or with
respect to any commitment fees payable hereunder, as the case may be, the rate
per annum set forth in the Borrowing Base Utilization Grid below based upon the
Borrowing Base Utilization Percentage then in effect:
Borrowing
Base Utilization Grid
|
Borrowing
Base Utilization Percentage
|
<25%
|
³
25%
<50%
|
³
50%
<75%
|
³
75%
|
Eurodollar
Loans
|
2.000%
|
2.250%
|
2.500%
|
2.750%
|
ABR
Loans or Swingline Loans
|
1.000%
|
1.250%
|
1.500%
|
1.750%
|
Commitment
Fee Rate
|
0.500%
|
0.500%
|
0.500%
|
0.500%
|
Each
change in the Applicable Margin shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change,
provided
,
however
,
that
if at any time
the Borrower fails to deliver a Reserve Report pursuant to Section 8.12(a), then
until such time as the Reserve Report is delivered the “
Applicable Margin
”
means the rate per annum set forth on the grid when the Borrowing Base
Utilization Percentage is at its highest level.
“
Applicable
Percentage
” means, with respect to any Lender, the percentage of the
Aggregate Commitment represented by such Lender’s Commitment as such percentage
is set forth on Annex I.
“
Approved
Counterparty
” means (a) any Lender or any Affiliate of a Lender and (b)
any other Person whose long term senior unsecured debt rating is BBB+/Baa1 by
S&P or Moody’s (or their equivalent) or higher.
“
Approved Petroleum
Engineers
” means (a) Netherland, Sewell & Associates, Inc., (b) Ryder
Scott Company Petroleum Consultants, L.P. and (c) any other independent
petroleum engineers reasonably acceptable to the Administrative
Agent.
“
Assignment and
Assumption
” means an assignment and assumption entered into by a Lender
and an assignee (with the consent of any party whose consent is required by
Section 12.04(b)), and accepted by the Administrative Agent, in the form of
Exhibit D or any other form approved by the Administrative Agent.
“
Availability Period
”
means the period from and including the Effective Date to but excluding the
Termination Date.
3
“
Board
” means the
Board of Governors of the Federal Reserve System of the United States of America
or any successor Governmental Authority.
“
Borrowing
” means (a)
Loans of the same Type, made, converted or continued on the same date and, in
the case of Eurodollar Loans, as to which a single Interest Period is in effect
or (b) a Swingline Loan.
“
Borrowing Base
” means
at any time an amount equal to the amount determined in accordance with Section
2.07, as the same may be adjusted from time to time pursuant to Section 8.13(c),
Section 9.02(k), Section 9.11(a), Section 9.12 or Section 9.20.
“
Borrowing Base Utilization
Percentage
” means, as of any day, the fraction expressed as a percentage,
the numerator of which is the Aggregate Revolving Credit Exposures of the
Lenders on such day, and the denominator of which is the Borrowing Base in
effect on such day.
“
Borrowing Request
”
means a request by the Borrower for a Borrowing in accordance with Section
2.03.
“
Business Day
” means
any day that is not a Saturday, Sunday or other day on which commercial banks in
Charlotte, North Carolina; Denver, Colorado; or Houston, Texas are authorized or
required by law to remain closed; and if such day relates to a Borrowing or
continuation of, a payment or prepayment of principal of or interest on, or a
conversion of or into, or the Interest Period for, a Eurodollar Loan or a notice
by the Borrower with respect to any such Borrowing or continuation, payment,
prepayment, conversion or Interest Period, any day which is also a day on which
dealings in dollar deposits are carried out in the London interbank
market.
“
Capital Leases
”
means, in respect of any Person, all leases which shall have been, or should
have been, in accordance with GAAP, recorded as capital leases on the balance
sheet of the Person liable (whether contingent or otherwise) for the payment of
rent thereunder.
“
Casualty Event
” means
any uninsured loss, uninsured casualty or other uninsured damage to, or any
nationalization, taking under power of eminent domain or by condemnation or
similar proceeding of, any Property of the Borrower or any of its Material
Subsidiaries having a fair market value in excess of
$
10,000,000.
“
Change in Control
”
means (a) the acquisition of ownership, directly or indirectly, beneficially or
of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the SEC thereunder as in effect on the date
hereof), of Equity Interests representing more than 35% of the aggregate
ordinary voting power represented by the issued and outstanding Equity Interests
of the Borrower, (b) occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Borrower by Persons who were neither (i)
nominated by the board of directors of the Borrower nor (ii) appointed by
directors so nominated or (c) the acquisition of direct or indirect Control of
the Borrower by any Person or group.
“
Change in Law
” means
(a) the adoption of any law, rule or regulation after the date of this
Agreement, (b) any change in any law, rule or regulation or in the
interpretation or
4
application
thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or the Issuing Bank (or, for purposes of
Section 5.01(b
)), by any lending
office of such Lender or by such Lender’s or the Issuing Bank’s holding company,
if any) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of
this Agreement.
“
CLO
” means any entity
(whether a corporation, partnership, trust or otherwise) that is engaged in
making, purchasing, holding or otherwise investing in bank loans and similar
extensions of credit in the ordinary course of its business and is administered
or managed by a Lender or an Affiliate of such Lender.
“
Code
” means the
Internal Revenue Code of 1986, as amended from time to time, and any successor
statute.
“
Commitment
” means,
with respect to each Lender, the commitment of such Lender to make Loans and to
acquire participations in Letters of Credit and Swingline Loans hereunder,
expressed as an amount representing the maximum aggregate amount of such
Lender’s Revolving Credit Exposure hereunder, as such commitment may be (a)
modified from time to time pursuant to Section 2.06 and (b) modified from time
to time pursuant to assignments by or to such Lender pursuant to Section
12.04(b). The amount representing each Lender’s Commitment shall at
any time be such Lender’s Applicable Percentage of the Aggregate
Commitment. The amount of each Lender’s initial Commitment is set
forth opposite such Lender’s name on Annex I under the caption
“Commitment.”
“
Commitment Fee Rate
”
has the meaning set forth in the definition of “
Applicable
Margin
”.
“
Commitment Increase
Certificate
” has the meaning assigned to such term in Section
2.06(c)(ii)(E).
“
Consolidated Net
Income
” means with respect to the Borrower and the Consolidated
Subsidiaries, for any period, the aggregate of the net income (or loss) of the
Borrower and the Consolidated Subsidiaries after allowances for taxes for such
period determined on a consolidated basis in accordance with GAAP;
provided
that there
shall be excluded from such net income (to the extent otherwise included
therein) the following: (a) the net income of any Person in which the Borrower
or any Consolidated Subsidiary has an interest (which interest does not cause
the net income of such other Person to be consolidated with the net income of
the Borrower and the Consolidated Subsidiaries in accordance with GAAP), except
to the extent of the amount of dividends or distributions actually paid in cash
during such period by such other Person to the Borrower or to a Consolidated
Subsidiary, as the case may be; (b) the net income (but not loss) during such
period of any Consolidated Subsidiary to the extent that the declaration or
payment of dividends or similar distributions or transfers or loans by that
Consolidated Subsidiary is not at the time permitted by operation of the terms
of its charter or any agreement, instrument or Governmental Requirement
applicable to such Consolidated Subsidiary or is otherwise restricted or
prohibited, in each case determined in accordance with GAAP; (c) any non-cash
gains or losses during such period; (d) any gains or losses attributable to
writeups or writedowns of assets, including impairments of oil and gas
properties; (e) mark-to-market
5
adjustments
related to the utilization of derivative instruments; and (f) changes in the
liability associated with the future payments of amounts under the Net Profits
Interest Bonus Plan.
“
Consolidated
Subsidiaries
” means each Subsidiary of the Borrower (whether now existing
or hereafter created or acquired) the financial statements of which shall be (or
should have been) consolidated with the financial statements of the Borrower in
accordance with GAAP.
“
Control
” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise. “
Controlling
” and
“
Controlled
”
have meanings correlative thereto.
“
Debt
” means, for any
Person, the sum of the following (without duplication): (a) all obligations of
such Person for borrowed money or evidenced by bonds, bankers’ acceptances,
debentures, notes or other similar instruments; (b) all obligations of such
Person (whether contingent or otherwise) in respect of letters of credit, surety
or other bonds and similar instruments; (c) all accounts payable, accrued
expenses, liabilities or other obligations of such Person to pay the deferred
purchase price of Property or services; (d) all obligations under Capital
Leases; (e) all obligations under Synthetic Leases; (f) all Debt (as defined in
the other clauses of this definition) of others secured by a Lien on any
Property of such Person, whether or not such Debt is assumed by such Person; (g)
all Debt (as defined in the other clauses of this definition) of others
guaranteed by such Person or in which such Person otherwise assures a creditor
against loss of the Debt (howsoever such assurance shall be made) to the extent
of the lesser of the amount of such Debt and the maximum stated amount of such
guarantee or assurance against loss; (h) all obligations or undertakings of such
Person to maintain or cause to be maintained the financial position or covenants
of others or to purchase the Debt or Property of others; (i) obligations to
deliver commodities, goods or services, including, without limitation,
Hydrocarbons, in consideration of one or more advance payments, other than gas
balancing arrangements in the ordinary course of business; (j) obligations to
pay for goods or services whether or not such goods or services are actually
received or utilized by such Person; (k) any Debt of a partnership for which
such Person is liable either by agreement, by operation of law or by a
Governmental Requirement but only to the extent of such liability; (l)
Disqualified Capital Stock; and (m) the undischarged balance of any production
payment created by such Person or for the creation of which such Person directly
or indirectly received payment. The Debt of any Person shall include
all obligations of such Person of the character described above to the extent
such Person remains legally liable in respect thereof notwithstanding that any
such obligation is not included as a liability of such Person under GAAP;
provided
,
however
, the
contingent obligations of Borrower or any Subsidiary of Borrower pursuant to any
purchase and sale agreement, stock purchase agreement, merger agreement or
similar agreement shall not constitute “Debt” within this definition so long as
none of same contains an obligation to pay money over time. It is
hereby understood and agreed that in calculating the amount of Debt in respect
of borrowed money, the effect of Financial Accounting Standards Board Statement
No. 133 shall be disregarded.
“
Debtor Relief Laws
”
means the Bankruptcy Code of the United States, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium,
6
rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.
“
Default
” means any
event or condition which constitutes an Event of Default or which upon notice,
lapse of time or both would, unless cured or waived, become an Event of
Default.
“
Disqualified Capital
Stock
” means any Equity Interest that, by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable) or
upon the happening of any event, matures or is mandatorily redeemable for any
consideration other than other Equity Interests (which would not constitute
Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise,
or is convertible or exchangeable for Debt or redeemable for any consideration
other than other Equity Interests (which would not constitute Disqualified
Capital Stock) at the option of the holder thereof, in whole or in part, on or
prior to the date that is one year after the earlier of (a) the Maturity Date
and (b) the date on which there are no Loans, LC Exposure or other obligations
hereunder outstanding and all of the Commitments are terminated.
“
dollars
” or “$”
refers to lawful money of the United States of America.
“
EBITDA
” means, for
any period, the sum of Consolidated Net Income for such period plus the
following expenses or charges to the extent deducted from Consolidated Net
Income in such period: interest, taxes, depreciation, depletion, amortization,
noncash impairment charges and other noncash charges, minus all noncash income
added to Consolidated Net Income. Noncash charges include
mark-to-market adjustments related to the utilization of derivative instruments
and changes in the liability associated with the future payments of amounts
under the Net Profits Interest Bonus Plan.
“
Effective Date
” means
the date on which the conditions specified in Section 6.01 are satisfied (or
waived in accordance with Section 12.02).
“
Engineering Reports
”
has the meaning assigned such term in Section 2.07(c)(i).
“
Environmental Laws
”
means any and all Governmental Requirements pertaining in any way to health,
safety, the environment or the preservation or reclamation of natural resources,
in effect in any and all jurisdictions in which the Borrower or any Subsidiary
is conducting or at any time has conducted business, or where any Property of
the Borrower or any Subsidiary is located, including without limitation, the Oil
Pollution Act of 1990 (“
OPA
”), as amended,
the Clean Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 (“
CERCLA
”), as amended,
the Federal Water Pollution Control Act, as amended, the Occupational Safety and
Health Act of 1970, as amended, the Resource Conservation and Recovery Act of
1976 (“
RCRA
”),
as amended, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, the Superfund Amendments and Reauthorization Act of
1986, as amended, the Hazardous Materials Transportation Act, as amended, and
other environmental conservation or protection Governmental
Requirements. The term “oil” shall have the meaning specified in OPA,
the terms “
hazardous
substance
” and “
release
” (or “
threatened release
”)
have the meanings specified in CERCLA, the terms “
solid
7
waste
” and “
disposal
” (or “
disposed
”) have the
meanings specified in RCRA and the term “
oil and gas waste
”
shall have the meaning specified in Section 91.1011 of the Texas Natural
Resources Code (“
Section 91.1011
”);
provided
,
however
, that (a) in
the event any of OPA, CERCLA, RCRA or Section 91.1011 is amended so as to
broaden the meaning of any term defined thereby, such broader meaning shall
apply subsequent to the effective date of such amendment and (b) to the extent
the laws of the state or other jurisdiction in which any Property of the
Borrower or any Subsidiary is located establish a meaning for “
oil
,” “
hazardous substance
,”
“
release
,”
“
solid waste
,”
“
disposal
” or
“
oil and gas
waste
” which is broader than that specified in either OPA, CERCLA, RCRA
or Section 91.1011, such broader meaning shall apply.
“
Equity Interests
”
means shares of capital stock, partnership interests, joint venture interest or
interests in comparable entities, membership interests in a limited liability
company, beneficial interests in a trust or other equity ownership interests in
a Person, and any warrants, options or other rights entitling the holder thereof
to purchase or acquire any such Equity Interest.
“
ERISA
” means the
Employee Retirement Income Security Act of 1974, as amended, and any successor
statute.
“
ERISA Affiliate
”
means each trade or business (whether or not incorporated) which together with
the Borrower or a Subsidiary would be deemed to be a “single employer” within
the meaning of section 4001(b)(1) of ERISA or subsections (b), (c), (m) or (o)
of section 414 of the Code.
“
ERISA Event
” means
(a) a “Reportable Event” described in section 4043 of ERISA and the regulations
issued thereunder, (b) the withdrawal of the Borrower, a Subsidiary or any ERISA
Affiliate from a Plan during a plan year in which it was a “substantial
employer” as defined in section 4001(a)(2) of ERISA, (c) the filing of a notice
of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under section 4041 of ERISA, (d) the institution of proceedings to
terminate a Plan by the PBGC 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 Plan.
“
Eurodollar
”, when
used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.
“
Event of Default
” has
the meaning assigned such term in Section 10.01.
“
Excepted Liens
”
means: (a) Liens for Taxes, assessments or other governmental charges
or levies which are not delinquent or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP; (b) Liens in connection with workers’ compensation,
unemployment insurance or other social security, old age pension or public
liability obligations which are not delinquent or which are being contested in
good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; (c) statutory landlord’s liens, operators’,
vendors’,
8
carriers’,
warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s,
construction or other like Liens arising by operation of law in the ordinary
course of business or incident to the exploration, development, operation and
maintenance of Oil and Gas Properties each of which is in respect of obligations
that are not delinquent or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP; (d) contractual Liens which arise in the ordinary course
of business under operating agreements, joint venture agreements, oil and gas
partnership agreements, oil and gas leases, farm-out agreements, division
orders, contracts for the sale, transportation or exchange of oil and natural
gas, unitization and pooling declarations and agreements, area of mutual
interest agreements, overriding royalty agreements, marketing agreements,
processing agreements, net profits agreements, development agreements, gas
balancing or deferred production agreements, injection, repressuring and
recycling agreements, salt water or other disposal agreements, seismic or other
geophysical permits or agreements, and other agreements which are usual and
customary in the oil and gas business and are for claims which are not
delinquent or which are being contested in good faith by appropriate action and
for which adequate reserves have been maintained in accordance with GAAP,
provided that any such Lien referred to in this clause does not materially
impair the use of the Property covered by such Lien for the purposes for which
such Property is held by the Borrower or any Subsidiary or materially impair the
value of such Property subject thereto; (e) Liens arising solely by virtue of
any statutory or common law provision relating to banker’s liens, rights of
set-off or similar rights and remedies and burdening only deposit accounts or
other funds maintained with a creditor depository institution, provided that no
such deposit account is a dedicated cash collateral account or is subject to
restrictions against access by the depositor in excess of those set forth by
regulations promulgated by the Board and no such deposit account is intended by
Borrower or any of its Subsidiaries to provide collateral to the depository
institution; (f) easements, restrictions, servitudes, permits, conditions,
covenants, exceptions or reservations in any Property of the Borrower or any
Subsidiary for the purpose of roads, pipelines, transmission lines,
transportation lines, distribution lines for the removal of gas, oil, coal or
other minerals or timber, and other like purposes, or for the joint or common
use of real estate, rights of way, facilities and equipment, which in the
aggregate do not materially impair the use of such Property for the purposes of
which such Property is held by the Borrower or any Subsidiary or materially
impair the value of such Property subject thereto; (g) Liens on cash or
securities pledged to secure performance of tenders, surety and appeal bonds,
government contracts, performance and return of money bonds, bids, trade
contracts, leases, statutory obligations, regulatory obligations and other
obligations of a like nature incurred in the ordinary course of business; (h)
Liens on existing and future cash, U.S. government securities, and letters of
credit securing or supporting Swap Agreements permitted pursuant to Section
9.18; and (i) judgment and attachment Liens not giving rise to an Event of
Default, provided that any appropriate legal proceedings which may have been
duly initiated for the review of such judgment shall not have been finally
terminated or the period within which such proceeding may be initiated shall not
have expired and no action to enforce such Lien has been commenced; provided,
further that Liens described in clauses (a) through (e) shall remain “Excepted
Liens” only for so long as no action to enforce such Lien has been commenced and
no intention to subordinate the first priority Lien granted in favor of the
Administrative Agent and the Lenders is to be hereby implied or expressed by the
permitted existence of such Excepted Liens.
9
“
Excluded Taxes
”
means, with respect to the Administrative Agent, any Lender, the Issuing Bank or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower or any Guarantor hereunder or under any other Loan Document, (a)
income or franchise taxes imposed on (or measured by) its net income by the
United States of America or such other jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Borrower or any Guarantor is
located and (c) in the case of a Foreign Lender, any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender’s failure to comply with Section 5.03(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts with respect to such withholding tax pursuant to
Section 5.03(a) or Section 5.03(c).
“
Federal Funds Effective
Rate
” means, for any day, the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average (rounded upwards, if necessary, to the next 1/100
of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
“
Financial Officer
”
means the chief financial officer, principal accounting officer, treasurer or
controller of the Borrower.
“
Financial Statements
”
means the financial statement or statements of the Borrower and its Consolidated
Subsidiaries referred to in Section 7.04(a).
“
Foreign Lender
” means
any Lender that is organized under the laws of a jurisdiction other than that in
which the Borrower is located. For purposes of this definition, the
United States of America, each State thereof and the District of Columbia shall
be deemed to constitute a single jurisdiction.
“
GAAP
” means generally
accepted accounting principles in the United States of America as in effect from
time to time subject to the terms and conditions set forth in Section
1.05.
“
Governmental
Authority
” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government over the
Borrower, any Material Subsidiary, any of their Properties, any Agent, the
Issuing Bank or any Lender.
“
Governmental
Requirement
” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate,
10
license,
authorization or other directive or requirement, whether now or hereinafter in
effect, including, without limitation, Environmental Laws, energy regulations
and occupational, safety and health standards or controls, of any Governmental
Authority.
“
Guarantors
” means the
Material Subsidiaries, and each other Subsidiary that guarantees the
Indebtedness pursuant to Section 8.14(b). As of the Effective Date,
there are no Guarantors.
“
Guaranty Agreement
”
means an agreement executed by the Guarantors in substantially the form of
Exhibit D-2 to the Amended and Restated Credit Agreement, as the same may be
amended, modified or supplemented from time to time.
“
Highest Lawful Rate
”
means, with respect to each Lender, the maximum nonusurious interest rate, if
any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the Notes or on other Indebtedness under laws
of the State of Texas which are presently in effect or, to the extent allowed by
law, under such applicable laws which may hereafter be in effect and which allow
a higher maximum nonusurious interest rate than applicable laws allow as of the
date hereof.
“
Hydrocarbon
Interests
” means all rights, titles, interests and estates now or
hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or
other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding
royalty and royalty interests, net profit interests and production payment
interests, including any reserved or residual interests of whatever
nature.
“
Hydrocarbons
” means
oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined
or separated therefrom.
“
Impacted Lender
”
means (a) any Lender (i) which has defaulted in its obligation to fund Loans
hereunder within three Business Days of the date required to be funded by it
hereunder, (ii) which has failed to fund any portion of its participations
in LC Disbursements or participations in Swingline Loans required to be funded
by it hereunder within three Business Days of the date required to be funded by
it hereunder, (iii) which has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within three Business Days of the date when due, unless the subject
of a good faith dispute, (iv) which has notified the Administrative Agent, or
has stated publicly, that such Lender will not comply with any of its funding
obligations under this Agreement, or (v) which has been deemed insolvent (by the
Administrative Agent or the Majority Lenders) or becomes the subject of a
proceeding under any Debtor Relief Law; or (b) any Lender as to which (i) the
Issuing Bank has a good faith belief that the Lender has defaulted in fulfilling
its obligations under one or more other syndicated facilities or (ii) an entity
that Controls such Lender has been deemed insolvent (by the Administrative Agent
or the Majority Lenders) or become subject to a proceeding under any Debtor
Relief Law.
“
Indebtedness
” means
any and all amounts owing or to be owing by the Borrower or any Guarantor: (a)
to the Administrative Agent, the Issuing Bank or any Lender under any Loan
Document; (b) to any Lender or any Affiliate of a Lender under any present or
future Swap
11
Agreements
entered into between the Borrower or any Guarantor and any Lender or any
Affiliate of a Lender, including, without limitation, the Swap Agreements
entered into with a Lender or an Affiliate of a Lender and listed on attached
Schedule 7.21, and (c) all renewals, extensions and/or rearrangements of any of
the above.
“
Indemnified Taxes
”
means Taxes other than Excluded Taxes.
“
Information
Memorandum
” means the Confidential Information Memorandum dated March
2009, relating to the Borrower and the Transactions.
“
Initial Reserve
Report
” means (a) the report of the Borrower, which includes reserve
estimates as prepared by Ryder Scott Company, L.P. and Netherland, Sewell
Associates, Inc., dated as of December 31, 2008, with respect to the value of
the Oil and Gas Properties of the Borrower and its Material Subsidiaries as of
December 31, 2008, and (b) the report of the Vice President, Engineering and
Evaluation of the Borrower dated as of December 31, 2008, with respect to the
value of the Oil and Gas Properties of the Borrower and its Material
Subsidiaries as of December 31, 2008
.
“
Interest Election
Request
” means a request by the Borrower to convert or continue a
Borrowing in accordance with Section 2.04.
“
Interest Payment
Date
” means (a) with respect to any ABR Loan (other than any Swingline
Loan), the last day of each calendar month, (b) with respect to any Eurodollar
Loan (other than any Swingline Loan), the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period
and (c) as to any Swingline Loan, the day such Swingline Loan is
paid.
“
Interest Period
”
means with respect to any Eurodollar Borrowing, the period commencing on the
date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter (subject to
market availability), as the Borrower may elect or, with the consent of each
Lender, nine or twelve months; provided, that (a) if any Interest Period would
end on a day other than a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day and (b) any Interest Period pertaining to
a Eurodollar Borrowing that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period. For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.
“
Interim
Redetermination
” has the meaning assigned such term in Section
2.07(b).
12
“
Interim Redetermination
Date
” means the date on which a Borrowing Base that has been redetermined
pursuant to an Interim Redetermination becomes effective as provided in Section
2.07(d).
“
Investment
” means,
for any Person: (a) the acquisition (whether for cash, Property, services or
securities or otherwise) of Equity Interests of any other Person or any
agreement to make any such acquisition (including, without limitation, any
“short sale” or any sale of any securities at a time when such securities are
not owned by the Person entering into such short sale); (b) the making of any
deposit with, or advance, loan or other extension of credit to, any other Person
(including the purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such Property to
such Person, but excluding any such advance, loan or extension of credit having
a term not exceeding ninety (90) days representing the purchase price of
inventory or supplies sold by such Person in the ordinary course of business) or
(c) the entering into of any guarantee (excluding performance guarantees) of, or
other contingent obligation (including the deposit of any Equity Interests to be
sold) with respect to, Debt or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person.
“
Issuing Bank
”
means
Wachovia
, in its
capacity as an issuer of Letters of Credit hereunder, and Wells Fargo Bank,
N.A., in its capacity as an issuer of Letters of Credit hereunder, and their
respective successors in such capacity as provided in Section
2.08(j). The Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which
case the term “
Issuing
Bank
” shall include any such Affiliate with respect to Letters of Credit
issued by such Affiliate.
“
Law
” means any
statute, law, regulation, ordinance, rule, treaty, judgment, order, decree,
permit, concession, franchise, license, agreement or other governmental
restriction of the United States or any state or political subdivision thereof
or of any foreign country or any department, province or other political
subdivision thereof. Any reference to a Law includes any amendment or
modification to such Law, and all regulations, rulings, and other Laws
promulgated under such Law.
“
LC Commitment
” at any
time means $50,000,000.
“
LC Disbursement
”
means a payment made by the Issuing Bank pursuant to a Letter of
Credit.
“
LC Exposure
” means,
at any time, the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit at such time plus (b) the aggregate amount of all LC
Disbursements that have not yet been reimbursed by or on behalf of the Borrower
at such time. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.
“
Lenders
” means the
Persons listed on Annex I, any Person that shall have become a party hereto
pursuant to an Assignment and Assumption, other than any such Person that ceases
to be a party hereto pursuant to an Assignment and Assumption, and any Person
that shall have
13
become a
party hereto pursuant to Section 2.06(c). Unless the context
otherwise requires, the term “Lender” includes the Swingline
Lender.
“
Letter of Credit
”
means any letter of credit issued pursuant to this Agreement, and the
outstanding letters of credit issued under the Original Credit Agreement, the
Amended and Restated Credit Agreement or the Existing Credit Agreement, more
particularly described on attached Annex II.
“
Letter of Credit
Agreements
” means all letter of credit applications and other agreements
(including any amendments, modifications or supplements thereto) submitted by
the Borrower, or entered into by the Borrower, with the Issuing Bank relating to
any Letter of Credit.
“
LIBO Rate
” means,
with respect to any Eurodollar Borrowing for any Interest Period, the rate
appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute
page providing rate quotations comparable to those currently provided on such
page, as determined by the Administrative Agent from time to time for purposes
of providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the
event that such rate is not available at such time for any reason, then the
“
LIBO Rate
”
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
“
Lien
” means any
interest in Property securing an obligation owed to, or a claim by, a Person
other than the owner of the Property, whether such interest is based on the
common law, statute or contract, and whether such obligation or claim is fixed
or contingent, and including but not limited to (a) the lien or security
interest arising from a mortgage, encumbrance, pledge, security agreement,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes or (b) production payments and the like payable out of Oil and
Gas Properties. The term “
Lien
” shall include
easements, restrictions, servitudes, permits, conditions, covenants, exceptions
or reservations. For the purposes of this Agreement, the Borrower and its
Subsidiaries shall be deemed to be the owner of any Property which it has
acquired or holds subject to a conditional sale agreement, or leases under a
financing lease or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person in a transaction intended to
create a financing.
“
Loan Documents
” means
this Agreement, the Notes, the Letter of Credit Agreements, the Letters of
Credit and the Security Instruments.
“
Loans
” means the
loans made by the Lenders to the Borrower pursuant to this
Agreement. Unless the context otherwise requires, the term “Loans”
includes the Swingline Loans.
“
Majority Lenders
”
means, at any time while no Loans or LC Exposure is outstanding, Lenders having
more than fifty percent (50%) of the Aggregate Commitments; and at any time
while any Loans or LC Exposure is outstanding, Lenders holding more than fifty
percent (50%) of the outstanding aggregate principal amount of the Loans or
participation interests in Letters of Credit (without regard to any sale by a
Lender of a participation in any Loan under Section 12.04(c)).
“
Material Adverse
Effect
” means a material adverse effect on (a) the business, assets,
operations, prospects or condition, financial or otherwise, of the Borrower and
the Subsidiaries taken as a whole, (b) the ability of the Borrower, any
Subsidiary or any Guarantor to perform any of its obligations under any Loan
Document or (c) the rights and remedies of or benefits available to the
Administrative Agent, the Issuing Bank or any Lender under any Loan
Document.
“
Material Agreements
”
means each agreement (whether one or more) described or referred to on Schedule
7.24.
“
Material
Indebtedness
” means Debt (other than the Loans and Letters of Credit), or
obligations in respect of one or more Swap Agreements, of any one or more of the
Borrower and its Subsidiaries in an aggregate principal amount exceeding
$15,000,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Borrower or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary
would be required to pay if such Swap Agreement were terminated at such
time.
“
Material Subsidiary
”
means a Subsidiary of Borrower that owns a Substantial Portion of the Property
of Borrower and its Subsidiaries.
“
Maturity Date
” means
July 31
,
2012
.
“
Maximum Credit
Amount
” means at any time an amount equal to the lesser of (a) the then
effective Borrowing Base and (b) $1,000,000,000.
“
Moody’s
” means
Moody’s Investors Service, Inc. and any successor thereto that is a nationally
recognized rating agency.
“
Mortgaged Property
”
means any Property owned by the Borrower or any Material Subsidiary which is
subject to the Liens existing and to exist under the terms of the Security
Instruments.
“
Multiemployer Plan
”
means a Plan which is a multiemployer plan as defined in section 3(37) or 4001
(a)(3) of ERISA.
“
New Borrowing Base
Notice
” has the meaning assigned such term in Section
2.07(d).
“
Notes
” means the
promissory notes of the Borrower described in Section 2.02(d) and being
substantially in the form of Exhibit A, together with all amendments,
modifications, replacements, extensions and rearrangements thereof.
15
“
Oil and Gas
Properties
” means (a) Hydrocarbon Interests; (b) the Properties now or
hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently
existing or future unitization, pooling agreements and declarations of pooled
units and the units created thereby (including without limitation all units
created under orders, regulations and rules of any Governmental Authority) which
may affect all or any portion of the Hydrocarbon Interests; (d) all
operating agreements, contracts and other agreements, including production
sharing contracts and agreements, which relate to any of the Hydrocarbon
Interests or the production, sale, purchase, exchange or processing of
Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all
Hydrocarbons in and under and which may be produced and saved or attributable to
the Hydrocarbon Interests, including all oil in tanks, and all rents, issues,
profits, proceeds, products, revenues and other incomes from or attributable to
the Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances and
Properties in any manner appertaining, belonging, affixed or incidental to the
Hydrocarbon Interests and (g) all Properties, rights, titles, interests and
estates described or referred to above, including any and all Property, real or
personal, now owned or hereinafter acquired and situated upon, used, held for
use or useful in connection with the operating, working or development of any of
such Hydrocarbon Interests or Property (excluding drilling rigs, automotive
equipment, rental equipment or other personal Property which may be on such
premises for the purpose of drilling a well or for other similar temporary uses)
and including any and all oil wells, gas wells, injection wells or other wells,
buildings, structures, fuel separators, liquid extraction plants, plant
compressors, pumps, pumping units, field gathering systems, tanks and tank
batteries, fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables, wires,
towers, casing, tubing and rods, surface leases, rights-of-way, easements and
servitudes together with all additions, substitutions, replacements, accessions
and attachments to any and all of the foregoing.
“
Other Taxes
” means
any and all present or future stamp or documentary taxes or any other excise or
Property taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement and any other Loan Document.
“
Participant
” has the
meaning set forth in Section 12.04(c)(i).
“
PBGC
” means the
Pension Benefit Guaranty Corporation, or any successor thereto.
“
Permitted Refinancing
Debt
” means Debt (for purposes of this definition, “
new Debt
”) incurred
in exchange for, or proceeds of which are used to refinance, all of any other
Debt (the “
Refinanced
Debt
”); provided that (a) such new Debt is in an aggregate principal
amount not in excess of the sum of (i) the aggregate principal amount then
outstanding of the Refinanced Debt (or, if the Refinanced Debt is exchanged or
acquired for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration thereof, such lesser amount) and
(ii) an amount necessary to pay any fees and expenses, including premiums,
related to such exchange or refinancing; (b) such new Debt has a stated
maturity no earlier than the stated maturity of the Refinanced Debt and an
average life no shorter than the average life of the Refinanced Debt;
(c) such new Debt does not contain any covenants which are more onerous to
the Borrower and its Subsidiaries than those imposed by the Refinanced Debt and
(d) such new Debt (and any guarantees thereof) is subordinated in right of
payment to the Indebtedness (or, if
16
applicable,
the Guaranty Agreement) to at least the same extent as the Refinanced Debt and
is otherwise subordinated on terms substantially reasonably satisfactory to the
Administrative Agent.
“
Person
” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other
entity.
“
Plan
” means any
employee pension benefit plan, as defined in section 3(2) of ERISA, which (a) is
currently or hereafter sponsored, maintained or contributed to by the Borrower,
a Subsidiary or an ERISA Affiliate or (b) was at any time during the six
calendar years preceding the date hereof, sponsored, maintained or contributed
to by the Borrower or a Subsidiary or an ERISA Affiliate.
“
Pledge - Borrower
”
means that certain Pledge and Security Agreement from the Borrower in favor of
the Administrative Agent, pledging to the Administrative Agent as security for
the Indebtedness all equity interests held by the Borrower in any Material
Subsidiaries, in substantially the form of Exhibit D-3 to the Amended and
Restated Credit Agreement, as the same may be amended, modified or supplemented
from time to time.
“
Prime Rate
” means the
rate of interest per annum publicly announced from time to time by
Wachovia
as
its prime rate in effect at its principal office in Charlotte, North Carolina;
each change in the Prime Rate shall be effective from and including the date
such change is publicly announced as being effective. Such rate is
set by
Wachovia
as a
general reference rate of interest, taking into account such factors as
Wachovia
may
deem appropriate; it being understood that many of
Wachovia
’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
Wachovia
may
make various commercial or other loans at rates of interest having no
relationship to such rate.
“
Property
” means any
interest in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, cash, securities,
accounts and contract rights.
“
Proposed Borrowing
Base
” has the meaning assigned to such term in Section
2.07(c)(i).
“
Proposed Borrowing Base
Notice
” has the meaning assigned to such term in Section
2.07(c)(ii).
“
Reaffirmation
Agreements
” means that certain Reaffirmation Agreement dated as of April
10, 2008, by the Borrower in favor of the Administrative Agent, in substantially
the form of Exhibit G to the Amended and Restated Credit Agreement and that
certain Reaffirmation Agreement dated as of even date herewith, by the Borrower
in favor of the Administrative Agent, in substantially the form of Exhibit G
hereto, as the same may from time to time be amended, modified, supplemented or
restated.
“
Redemption
” means the
repurchase, redemption, prepayment, repayment or defeasance (or the segregation
of funds with respect to any of the foregoing) of the Material Indebtedness;
provided, however, the term Redemption shall not include early termination of a
Swap
17
Agreement
due to an ISDA “Termination Event” to the extent the amount due at termination
does not exceed $15,000,000. “
Redeem
” has the
correlative meaning thereto.
“
Redetermination Date
”
means, with respect to any Scheduled Redetermination or any Interim
Redetermination, the date that the redetermined Borrowing Base related thereto
becomes effective pursuant to Section 2.07(d).
“
Refinanced Debt
” has
the meaning assigned such term in the definition of “Permitted Refinancing
Debt”.
“
Register
” has the
meaning assigned such term in Section 12.04(b)(iv).
“
Regulation D
” means
Regulation D of the Board, as the same may be amended, supplemented or replaced
from time to time.
“
Related Parties
”
means, with respect to any specified Person, such Person’s Affiliates and the
respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.
“
Remedial Work
” has
the meaning assigned such term in Section 8.10(a).
“
Reserve Report
” means
a report, in form and substance reasonably satisfactory to the Administrative
Agent, setting forth, as of each December 31st or June 30
th
(or
such other date in the event of an Interim Redetermination) the oil and gas
reserves attributable to the Oil and Gas Properties of the Borrower and the
Material Subsidiaries, together with a projection of the rate of production and
future net income, taxes, operating expenses and capital expenditures with
respect thereto as of such date, based upon the pricing assumptions consistent
with SEC reporting requirements at the time.
“
Responsible Officer
”
means, as to any Person, the Chief Executive Officer, the President, any
Financial Officer or any Vice President of such Person. Unless
otherwise specified, all references to a Responsible Officer herein shall mean a
Responsible Officer of the Borrower.
“
Restricted Payment
”
means any dividend or other distribution (whether in cash, securities or other
Property) with respect to any Equity Interests in the Borrower, or any payment
(whether in cash, securities or other Property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Equity Interests in the
Borrower or any option, warrant or other right to acquire any such Equity
Interests in the Borrower.
“
Revolving Credit
Exposure
” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Loans, its LC Exposure and its
Swingline Loans at such time.
“
Scheduled
Redetermination
” has the meaning assigned such term in Section
2.07(b).
“
Scheduled Redetermination
Date
” means the date on which a Borrowing Base that has been redetermined
pursuant to a Scheduled Redetermination becomes effective as provided in Section
2.07(d).
18
“
SEC
” means the
Securities and Exchange Commission or any successor Governmental
Authority.
“
Security Instruments
”
means any Guaranty Agreement, any Pledge – Borrower, the Reaffirmation
Agreements and all assignments, mortgages, deeds of trust, amendments and
supplements to mortgages and deeds of trust, and all other agreements,
instruments or certificates described or referred to in Exhibit C, and any and
all other agreements, instruments or certificates now or hereafter executed and
delivered by the Borrower or any other Person (other than Swap Agreements with
the Lenders or any Affiliate of a Lender or participation or similar agreements
between any Lender and any other lender or creditor with respect to any
Indebtedness pursuant to this Agreement) in connection with, or as security for
the payment or performance of the Indebtedness, the Notes, this Agreement, or
reimbursement obligations under the Letters of Credit, as such agreements may be
amended, modified, supplemented or restated from time to time.
“
Senior Convertible
Notes
” means those certain senior convertible notes issued and sold by
the Borrower in accordance with and pursuant to the terms and provisions of the
Senior Convertible Notes indenture, in the aggregate principal amount of
$287,500,000, due on or about April 1, 2027. For purposes of this
Agreement, the Senior Convertible Notes shall not be deemed a Swap Agreement
subject to the prohibitions of Section 9.18.
“
S&P
” means
Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies,
Inc., and any successor thereto that is a nationally recognized rating
agency.
“
Special
Redetermination
” has the meaning assigned such term in Section
2.07(b).
“
Special Redetermination
Date
” means the date on which a Borrowing Base that has been redetermined
pursuant to a Special Redetermination becomes effective as provided in Section
2.07(d).
“
Statutory Reserve
Rate
” means a fraction (expressed as a decimal), the numerator of which
is the number one and the denominator of which is the number one minus the
aggregate of the maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established by the
Board to which the Administrative Agent is subject, with respect to the Adjusted
LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages
shall include those imposed pursuant to such Regulation D. Eurodollar
Loans shall be deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
19
“
Subsidiary
” means:
(a) any Person of which at least a majority of the outstanding Equity Interests
having by the terms thereof ordinary voting power to elect a majority of the
board of directors, manager or other governing body of such Person (irrespective
of whether or not at the time Equity Interests of any other class or classes of
such Person shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
the Borrower or one or more of its Subsidiaries and (b) any partnership of which
the Borrower or any of its Subsidiaries is a general partner. Unless
otherwise indicated herein, each reference to the term “
Subsidiary
” shall
mean a Subsidiary of the Borrower.
“
Substantial Portion
”
means, with respect to the Property of the Borrower and its Subsidiaries,
Property which represents more than 10% of the consolidated assets of the
Borrower and its Subsidiaries or property which is responsible for more than 10%
of the consolidated net sales or of the consolidated net income of the Borrower
and its Subsidiaries, in each case, as would be shown in the consolidated
financial statements of the Borrower and its Subsidiaries at the beginning of
the twelve-month period ending with the month in which such determination is
made (or if financial statements have not been delivered hereunder for that
month which begins the twelve-month period, then the financial statements
delivered hereunder for the quarter ending immediately prior to that
month).
“
Supermajority
Lenders
” means, at any time while no Loans or LC Exposure is outstanding,
Lenders having at least sixty-six and two-thirds percent (66-2/3%) of the
Aggregate Commitments; and at any time while any Loans or LC Exposure is
outstanding, Lenders holding at least sixty-six and two-thirds percent (66-2/3%)
of the outstanding aggregate principal amount of the Loans or participation
interests in Letters of Credit (without regard to any sale by a Lender of a
participation in any Loan under Section 12.04(c)).
“
Swap Agreement
” means
any agreement with respect to any swap, forward, future or derivative
transaction or option or similar agreement, whether exchange traded,
“over-the-counter” or otherwise, involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities,
or economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these
transactions; provided that no phantom stock or similar plan providing for
payments only on account of services provided by current or former directors,
officers, employees or consultants of the Borrower or the Subsidiaries shall be
a Swap Agreement.
“
Swingline Lender
”
means Wachovia Bank, National Association, in its capacity as a lender of
Swingline Loans hereunder and Wells Fargo Bank, N.A., in its capacity as a
lender of Swingline Loans hereunder.
“
Swingline Loan
” means
a Loan made pursuant to Section 2.09.
“
Synthetic Leases
”
means, in respect of any Person, all leases which shall have been, or should
have been, in accordance with GAAP, treated as operating leases on the financial
statements of the Person liable (whether contingently or otherwise) for the
payment of rent thereunder and which were properly treated as indebtedness for
borrowed money for purposes of U.S. federal income taxes, if the lessee in
respect thereof is obligated to either purchase for an amount in excess of, or
pay upon early termination an amount in excess of, 80% of the residual
20
value of
the Property subject to such operating lease upon expiration or early
termination of such lease.
“
Taxes
” means any and
all present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority.
“
Termination Date
”
means the earlier of the Maturity Date and the date of termination of the
Commitments.
“
Total Debt
” means, at
any date, all Debt of the Borrower and the Consolidated Subsidiaries on a
consolidated basis, exclusive of all accounts payable, accrued expenses,
liabilities or other obligations to pay the deferred purchase price of Property
or services to the extent any of same was included in Debt of the Borrower and
the Consolidated Subsidiaries on a consolidated basis.
“
Transactions
” means,
with respect to (a) the Borrower, the execution, delivery and performance by the
Borrower of this Agreement, and each other Loan Document to which it is a party,
the borrowing of Loans, the use of the proceeds thereof and the issuance of
Letters of Credit hereunder, and the grant of Liens by the Borrower on Mortgaged
Properties and other Properties pursuant to the Security Instruments and (b)
each Material Subsidiary, the execution, delivery and performance by such
Material Subsidiary of each Loan Document to which it is a party, the
guaranteeing of the Indebtedness and the other obligations under the Guaranty
Agreement by such Material Subsidiary and such Material Subsidiary’s grant of
the security interests and provision of collateral thereunder, and the grant of
Liens by such Material Subsidiary on Mortgaged Properties and other Properties
pursuant to the Security Instruments.
“
Type
” means, when
used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined
by reference to the Alternate Base Rate or the Adjusted LIBO Rate.
“
Wholly-Owned
Subsidiary
” means any Subsidiary of which all of the outstanding Equity
Interests (other than any directors’ qualifying shares mandated by applicable
law), on a fully-diluted basis, are owned by the Borrower or one or more of the
Wholly-Owned Subsidiaries.
Section
1.03
Types of Loans and
Borrowings
. For
purposes of this Agreement, Loans and Borrowings, respectively, may be
classified and referred to by Type (e.g., a “
Eurodollar Loan
” or a
“
Eurodollar
Borrowing
”).
Section
1.04
Terms
Generally
. The
definitions of terms herein shall apply equally to the singular and plural forms
of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter
forms. The words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation.” The word
“will” shall be construed to have the same meaning and effect as the word
“shall.” Unless the context requires otherwise (a) any definition of
or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or
21
modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns (subject to the restrictions
contained herein), (c) the words “herein”, “hereof” and “hereunder”, and words
of similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof and (d) all references herein to
Articles, Sections, Annexes, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Annexes, Exhibits and Schedules to, this
Agreement.
Section
1.05
Accounting Terms and
Determinations; GAAP
. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters hereunder
shall be made, and all financial statements and certificates and reports as to
financial matters required to be furnished to the Administrative Agent or the
Lenders hereunder shall be prepared, in accordance with GAAP, applied on a basis
consistent with the Financial Statements except for changes in which Borrower’s
independent certified public accountants concur and which are disclosed to
Administrative Agent on the next date on which financial statements are required
to be delivered to the Lenders pursuant to Section 8.01(a); provided that,
unless the Borrower and the Majority Lenders shall otherwise agree in writing,
no such change shall modify or affect the manner in which compliance with the
covenants contained herein is computed such that all such computations shall be
conducted utilizing financial information presented consistently with prior
periods.
ARTICLE
II
The
Credits
Section
2.01
Commitments
. Subject
to the terms and conditions set forth herein, each Lender agrees to make Loans
to the Borrower during the Availability Period in an aggregate principal amount
that will not result in (a) such Lender’s Revolving Credit Exposure exceeding
such Lender’s Commitment or (b) the Aggregate Revolving Credit Exposures
exceeding the lesser of (i) the Borrowing Base then in effect or (ii) the
Aggregate Commitments then in effect. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
repay and reborrow the Loans.
Section
2.02
Loans and
Borrowings
.
(a)
Borrowings; Several
Obligations
. Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
respective Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments are several and no Lender shall be
responsible for any other Lender’s failure to make Loans as
required.
(b)
Types of
Loans
. Subject to Section 3.03, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement.
22
(c)
Minimum Amounts; Limitation
on Number of Borrowings
. At the commencement of each Interest
Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than
$3,000,000. At the time that each ABR Borrowing is made, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$500,000 and not less than $1,000,000; provided that an ABR Borrowing may be in
an aggregate amount that is equal to the entire unused balance of the total
Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.08(f). Borrowings of more
than one Type may be outstanding at the same time; provided that there shall not
at any time be more than a total of
six (6)
Eurodollar
Borrowings outstanding. Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request, or to elect to convert
or continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date.
(d)
Notes
. The
Loans made by each Lender shall be evidenced by a single promissory note of the
Borrower in substantially the form of Exhibit A, dated, in the case of (i) any
Lender party hereto as of the date of this Agreement, as of the date of this
Agreement, (ii) any Lender that becomes a party hereto pursuant to an Assignment
and Assumption, as of the effective date of the assignment and assumption, or
(iii) any Lender that becomes a party hereto in connection with an increase in
the Aggregate Commitment pursuant to Section 2.06(c), as of the effective date
of such increase, payable to the order of such Lender in a principal amount
equal to its Commitment as in effect on such date, and otherwise duly
completed. In the event that any Lender’s Commitment increases or
decreases for any reason (whether pursuant to Section 2.06, Section 12.04(b) or
otherwise), the Borrower shall deliver or cause to be delivered on the effective
date of such increase or decrease, a new Note payable to the order of such
Lender in a principal amount equal to its Commitment after giving effect to such
increase or decrease, and otherwise duly completed. The date, amount,
Type, interest rate and, if applicable, Interest Period of each Loan made by
each Lender, and all payments made on account of the principal thereof, shall be
recorded by such Lender on its books for its Note, and, prior to any transfer,
may be endorsed by such Lender on a schedule attached to such Note or any
continuation thereof or on any separate record maintained by such
Lender. Failure to make any such notation or to attach a schedule
shall not affect any Lender’s or the Borrower’s rights or obligations in respect
of such Loans or affect the validity of such transfer by any Lender of its
Note.
Section
2.03
Requests for
Borrowings
.
To
request a Borrowing, the Borrower shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than
1:00 p.m., Charlotte, North Carolina
time, three Business
Days before the date of the proposed Borrowing, or (b) in the case of a ABR
Borrowing, including an ABR Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.08(f), not later than 1:00 p.m.,
Charlotte, North Carolina time, on the date of the proposed Borrowing, which
date shall be a Business Day in the United States. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section
2.02:
(i)
the
aggregate amount of the requested Borrowing;
23
(ii)
the date
of such Borrowing, which shall be a Business Day in the United
States;
(iii)
whether
such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
(iv)
in the
case of a Eurodollar Borrowing, the initial Interest Period to be applicable
thereto, which shall be a period contemplated by the definition of the term
“Interest Period”;
(v)
the
amount of the then effective Borrowing Base, the current Aggregate Revolving
Credit Exposures (without regard to the requested Borrowing) and the
pro form
a Aggregate Revolving
Credit Exposures (giving effect to the requested Borrowing); and
(vi)
the
location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section
2.05.
If no
election as to the Type of Borrowing is specified, then the requested Borrowing
shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration. Each
Borrowing Request shall constitute a representation that the amount of the
requested Borrowing shall not cause the Aggregate Revolving Credit Exposures to
exceed the Aggregate Commitments then in effect.
Promptly
following receipt of a Borrowing Request in accordance with this Section 2.03,
the Administrative Agent shall advise each Lender of the details thereof and of
the amount of such Lender’s Loan to be made as part of the requested
Borrowing.
Section
2.04
Interest
Elections
.
(a)
Conversion and
Continuance
. Each Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section 2.04. The Borrower may elect different options with
respect to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing. This Section, as it refers to Types
of Loans, shall not apply to Swingline Loans, which may not be converted or
continued.
(b)
Interest Election
Requests
. To make an election pursuant to this Section 2.04,
the Borrower shall notify the Administrative Agent of such election by telephone
by the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or telecopy to the Administrative Agent of a written
24
Interest
Election Request in a form approved by the Administrative Agent and signed by
the Borrower.
(c)
Information in Interest
Election Requests
. Each telephonic and written Interest
Election Request shall specify the following information in compliance with
Section 2.02:
(i)
the
Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to Section 2.04(c)(iii) and (iv) shall be
specified for each resulting Borrowing);
(ii)
the
effective date of the election made pursuant to such Interest Election Request,
which shall be a Business Day;
(iii)
whether
the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
and
(iv)
if the
resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period”.
(d)
If any
such Interest Election Request requests a Eurodollar Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of one month’s duration.
(e)
Notice to Lenders by the
Administrative Agent
. Promptly following receipt of an
Interest Election Request, the Administrative Agent shall advise each Lender of
the details thereof and of such Lender’s portion of each resulting
Borrowing.
(f)
Effect of Failure to Deliver
Timely Interest Election Request and Events of Default and Borrowing Base
Deficiencies on Interest Election
. If the Borrower fails to
deliver a timely Interest Election Request with respect to a Eurodollar
Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event
of Default has occurred and is continuing or if the Aggregate Revolving Credit
Exposures exceed the Borrowing Base then in effect: (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing
(and any Interest Election Request that requests the conversion of any Borrowing
to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be
ineffective) and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.
Section
2.05
Funding of
Borrowings
.
(a)
Funding by
Lenders
. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 2:00 p.m. Charlotte, North Carolina time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders; provided that Swingline Loans shall be made as provided in
Section 2.09. The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an account of the Borrower maintained with the Administrative Agent in
Charlotte, North Carolina and designated by the Borrower in the applicable
Borrowing Request; provided that ABR Loans made to finance the reimbursement of
an LC Disbursement as provided in Section 2.08(f) shall be remitted by the
Administrative Agent to the Issuing Bank.
(b)
Presumption of Funding by
the Lenders
. Unless the Administrative Agent shall have
received written notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
Section 2.05(a) and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not
in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate applicable to ABR Loans;
provided
,
however
, such demands
shall be made first upon the applicable Lender and then upon the
Borrower. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender’s Loan included in such
Borrowing.
Section
2.06
Termination, Reduction and
Increase of Aggregate
Commitment
.
(a)
Scheduled Termination of
Commitments
. Unless previously terminated, the Commitments
shall terminate on the Maturity Date. If at any time the Maximum
Credit Amount or the Borrowing Base is terminated or reduced to zero, then the
Commitments shall terminate on the effective date of such termination or
reduction.
(b)
Optional Termination and
Reduction of Aggregate Commitment
.
(i)
The
Borrower may at any time terminate, or from time to time reduce, the Aggregate
Commitment; provided that (A) each reduction of the Aggregate Commitment shall
be in an amount that is an integral multiple of $
1,000,000
and not
less than $
5,000,000
and (B)
the Borrower shall not terminate or reduce the Aggregate Commitment if, after
giving effect to any concurrent prepayment of the Loans in accordance with
Section 3.04(c), the Aggregate Revolving Credit Exposures would exceed the
Aggregate Commitments.
(ii)
The
Borrower shall notify the Administrative Agent of any election to terminate or
reduce the Aggregate Commitment under Section 2.06(b)(i) at least three Business
Days prior to the effective date of such termination or reduction, specifying
such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Borrower pursuant to
this Section 2.06(b)(ii) shall be irrevocable. Any termination or
reduction of the Aggregate Commitment shall be permanent and may not be
reinstated except pursuant to Section 2.06(c). Each reduction of the
Aggregate Commitment shall be made ratably among the Lenders in accordance with
each Lender’s Applicable Percentage.
(c)
Optional Increase in
Aggregate Commitment
.
(i)
Subject
to the conditions set forth in Section 2.06(c)(ii), the Borrower may increase
the Aggregate Commitment then in effect by increasing the Commitment of a Lender
or by causing a Person acceptable to the Administrative Agent that at such time
is not a Lender to become a Lender (an “
Additional
Lender
”).
(ii)
Any
increase in the Aggregate Commitment shall be subject to the following
additional conditions:
(A)
such
increase shall not be less than $10,000,000 unless the Administrative Agent
otherwise consents;
(B)
no
Default shall have occurred and be continuing at the effective date of such
increase;
(C)
on the
effective date of such increase, no Eurodollar Borrowings shall be outstanding
(or if any Eurodollar Borrowings are outstanding, then the effective date of
such increase shall be the last day of the Interest Period in respect of such
Eurodollar Borrowings);
(D)
each
Lender shall have had the option to increase its Commitment by its Applicable
Percentage of the amount of such increase;
provided
that
, no Lender’s
Commitment may be increased without the consent of such Lender;
(E)
if the
Borrower elects to increase the Aggregate Commitment by increasing the
Commitment of a Lender, the Borrower and such Lender shall execute and deliver
to the Administrative Agent a certificate substantially in the form of Exhibit E
(a “
Commitment
Increase
Certificate
”), and further, in the event a new Note is required to
reflect the increased Commitment of such Lender, then in that case, the Borrower
shall deliver a new Note (after presentation of same to Borrower by the
Administrative Agent) payable to the order of such Lender in a principal amount
equal to its Commitment after giving effect to such increase, and otherwise duly
completed, together with a processing and recordation fee of $3,500 payable by
the Borrower to the Administrative Agent and the reimbursement by the Borrower
of the reasonable legal fees of counsel to the Administrative Agent;
and
(F)
If the
Borrower elects to increase the Aggregate Commitment by causing an Additional
Lender to become a party to this Agreement, then the
27
Borrower and such Additional Lender shall execute and deliver to the
Administrative Agent a certificate substantially in the form of Exhibit F (an
“
Additional Lender
Certificate
”), together with an Administrative Questionnaire and a
processing and recordation fee of $3,500 payable by such Additional Lender and
the reimbursement by the Borrower of the reasonable legal fees of counsel to the
Administrative Agent, and the Borrower shall deliver a Note (after presentation
of same to Borrower by the Administrative Agent) payable to the order of such
Additional Lender in a principal amount equal to its Commitment, and otherwise
duly completed.
(iii)
Subject
to acceptance and recording thereof pursuant to Section 2.06(c)(iv), from and
after the effective date specified in the Commitment Increase Certificate or the
Additional Lender Certificate (or if any Eurodollar Borrowings are outstanding,
then the last day of the Interest Period in respect of such Eurodollar
Borrowings): (A) the amount of the Aggregate Commitment shall be
increased as set forth therein, and (B) in the case of an Additional Lender
Certificate, any Additional Lender party thereto shall be a party to this
Agreement and the other Loan Documents and have the rights and obligations of a
Lender under this Agreement and the other Loan Documents. In
addition, the Lender or the Additional Lender, as applicable, shall purchase a
pro rata portion of the Aggregate Revolving Credit Exposures of each of the
other Lenders (and such Lenders hereby agree to sell and to take all such
further action to effectuate such sale) such that each Lender (including any
Additional Lender, if applicable) shall hold its Applicable Percentage of the
Aggregate Revolving Credit Exposures after giving effect to the increase in the
Aggregate Commitment.
(iv)
Upon its
receipt of a duly completed Commitment Increase Certificate or an Additional
Lender Certificate, executed by the Borrower and the Lender or the Borrower and
the Additional Lender party thereto, as applicable, the processing and recording
fee referred to in Section 2.06(c)(ii), the Administrative Questionnaire
referred to in Section 2.06(c)(ii), if applicable, and the written consent of
the Administrative Agent to such increase required by Section 2.06(c)(i), the
Administrative Agent shall accept such Commitment Increase Certificate or
Additional Lender Certificate and record the information contained therein in
the Register required to be maintained by the Administrative Agent pursuant to
Section 12.04(b)(iv). No increase in the Aggregate Commitment shall
be effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this Section 2.06(c)(iv).
(v)
After
giving effect to an increase in the Aggregate Commitment, the Aggregate
Commitment shall not exceed the Maximum Credit Amount.
Section
2.07
Borrowing
Base
.
(a)
Initial Borrowing
Base
. For the period from and including the Effective Date to
but excluding the first Redetermination Date, the amount of the Borrowing Base
shall be $9
00,000,000
. Notwithstanding
the foregoing, the Borrowing Base shall be subject to further adjustments from
time to time pursuant to this Section 2.07 and Section 8.13(c), Section 9.02(k),
Section 9.11(a), Section 9.12 and Section 9.20.
(b)
Scheduled, Interim and
Special Redeterminations
. Subject to Section 2.07(d), the
Borrowing Base shall be redetermined (a “
Scheduled
Redetermination
”) no later than April 1 and October 1 of each year,
commencing October 1, 2009. In addition, the
Borrower
may, by notifying the Administrative Agent thereof, and the Administrative Agent
may, at the direction of the Majority Lenders, by notifying the Borrower
thereof, elect to cause the Borrowing Base to be redetermined once between each
Scheduled Redetermination (an “
Interim
Redetermination
”) in accordance with this Section 2.07. In
addition to the Scheduled Redetermination and the Interim Redetermination, the
Administrative Agent, acting alone or at the direction of the Majority Lenders,
shall be permitted to make a redetermination (a “
Special
Redetermination
”) of the Borrowing Base on March 15, 2012.
(c)
Scheduled, Interim and
Special Redetermination Procedure
.
(i)
Each
Scheduled Redetermination, each Interim Redetermination and the Special
Redetermination shall be effectuated as follows: Upon receipt by the
Administrative Agent of (A) the Reserve Report and the certificate required to
be delivered by the Borrower to the Administrative Agent, in the case of a
Scheduled Redetermination and the Special Redetermination, pursuant to Section
8.12(a) and (c), and, in the case of an Interim Redetermination, pursuant to
Section 8.12(b) and (c), and (B) such other reports, data and supplemental
information, including, without limitation, the information provided pursuant to
Section 8.12(c), as may, from time to time, be reasonably requested by the
Majority Lenders (the Reserve Report, such certificate and such other reports,
data and supplemental information being the “
Engineering
Reports
”), the Administrative Agent shall evaluate the information
contained in the Engineering Reports and shall, in good faith, propose a new
Borrowing Base (the “
Proposed Borrowing
Base
”) based upon such information and such other information (including
the status of title information with respect to the Oil and Gas Properties as
described in the Engineering Reports and the existence of any other Debt) as the
Administrative Agent deems appropriate and consistent with its normal oil and
gas lending criteria as it exists at the particular time.
(ii)
The
Administrative Agent shall notify the Borrower and the Lenders of the Proposed
Borrowing Base (the “
Proposed Borrowing Base
Notice
”):
(A)
in the
case of a Scheduled Redetermination (1) if the Administrative Agent shall have
received the Engineering Reports required to be delivered by the Borrower
pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on or
before March 15
th
and
September 15
th
of such year following
the date of delivery or (2) if the Administrative Agent shall not have received
the Engineering Reports required to be delivered by the Borrower pursuant to
Section 8.12(a) and (c) in a timely and complete manner, then promptly after the
Administrative Agent has received complete Engineering Reports from the Borrower
and has had a reasonable opportunity to determine the Proposed Borrowing Base in
accordance with Section 2.07(c)(i); and
(B)
in the
case of an Interim Redetermination and the Special Redetermination, promptly,
and in any event, within fifteen (15) days after the Administrative Agent has
received the required Engineering Reports.
(iii)
Any
Proposed Borrowing Base that would increase the Borrowing Base then in effect
must be approved or deemed to have been approved by all of
the
Lenders
as provided in this Section 2.07(c)(iii); and any Proposed Borrowing Base that
would decrease or maintain the Borrowing Base then in effect must be approved or
be deemed to have been approved by the Supermajority Lenders as provided in this
Section 2.07(c)(iii). Upon receipt of the Proposed Borrowing Base
Notice, each Lender shall have fifteen (15) days to agree with the Proposed
Borrowing Base or disagree with the Proposed Borrowing Base by proposing an
alternate Borrowing Base. If at the end of such fifteen (15) days,
any Lender has not communicated its approval or disapproval in writing to the
Administrative Agent, such silence shall be deemed to be an approval of the
Proposed Borrowing Base. If, at the end of such 15-day period, all of
the Lenders, in the case of a Proposed Borrowing Base that would increase the
Borrowing Base then in effect, or the Supermajority Lenders, in the case of a
Proposed Borrowing Base that would decrease or maintain the Borrowing Base then
in effect, have approved or deemed to have approved, as aforesaid, then the
Proposed Borrowing Base shall become the new Borrowing Base, effective on the
date specified in Section 2.07(d). If, however, at the end of such
15-day period, all of the Lenders or the Supermajority Lenders, as applicable,
have not approved or deemed to have approved, as aforesaid, then for purposes of
this Section 2.07, the Administrative Agent shall poll the Lenders to ascertain
the highest Borrowing Base then acceptable (aa) to the Supermajority Lenders, if
such amount would decrease the Borrowing Base then in effect, or (bb) to all of
the Lenders, if such amount would increase the Borrowing Base then in effect,
which amount shall become the new Borrowing Base, effective on the date
specified in Section 2.07(d).
(iv)
If any
Lender refuses to approve a Proposed Borrowing Base pursuant to Section
2.07(c)(iii), the Borrower shall have the right to cause the Commitment of such
dissenting Lender to be replaced pursuant to Section 5.06.
(d)
Effectiveness of a
Redetermined Borrowing Base
. After a redetermined Borrowing
Base is approved or is deemed to have been approved by all of the Lenders or the
Supermajority Lenders, as applicable, pursuant to Section 2.07(c)(iii), the
Administrative Agent shall notify the Borrower and the Lenders of the amount of
the redetermined Borrowing Base (the “
New Borrowing Base
Notice
”), and such amount shall become the new Borrowing Base, effective
and applicable to the Borrower, the Agents, the Issuing Bank and the
Lenders:
(A)
in the
case of a Scheduled Redetermination, (1) if the Administrative Agent shall have
received the Engineering Reports required to be delivered by the Borrower
pursuant to Section 8.12(a) and (c) in a timely and complete manner, then no
later than April 1 or October 1, as applicable, following such notice, or (2) if
the Administrative Agent shall not have received the Engineering Reports
required to be delivered by the Borrower pursuant to Section 8.12(a) and (c) in
a timely and complete manner, then on the Business Day next succeeding delivery
of such notice; and
(B)
in the
case of an Interim Redetermination and a Special Redetermination, on the
Business Day next succeeding delivery of such notice.
(C)
Such
amount shall then become the Borrowing Base until the next Scheduled
Redetermination Date, the next Interim Redetermination Date, the Special
30
Redetermination
Date or the next adjustment to the Borrowing Base under Section 8.13(c), Section
9.02(k), Section 9.11(a) or Section 9.12, whichever occurs
first. Notwithstanding the foregoing, no Scheduled Redetermination,
Interim Redetermination or Special Redetermination shall become effective until
the New Borrowing Base Notice related thereto is received by the
Borrower.
Section
2.08
Letters of
Credit
.
(a)
General
. Subject
to the terms and conditions set forth herein, the Borrower may request the
issuance of Letters of Credit for its own account or for the account of any of
its Material Subsidiaries, in a form reasonably acceptable to the Administrative
Agent and the Issuing Bank, at any time and from time to time during the
Availability Period; provided that the Borrower may not request the issuance,
amendment, renewal or extension of Letters of Credit hereunder if the Aggregate
Revolving Exposures exceed the Borrowing Base then in effect at such time or the
Aggregate Revolving Exposures would exceed the Borrowing Base then in effect as
a result thereof. In the event of any inconsistency between the terms
and conditions of this Agreement and the terms and conditions of any form of
letter of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
(b)
Notice of Issuance,
Amendment, Renewal, Extension; Certain Conditions
. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent
(not less than three (3) Business Days in advance of the requested date of
issuance, amendment, renewal or extension) a notice:
(i)
requesting
the issuance of a Letter of Credit or identifying the Letter of Credit to be
amended, renewed or extended;
(ii)
specifying
the date of issuance, amendment, renewal or extension (which shall be a Business
Day);
(iii)
specifying
the date on which such Letter of Credit is to expire (which shall comply with
Section 2.08(d));
(iv)
specifying
the amount of such Letter of Credit;
(v)
specifying
the name and address of the beneficiary thereof and such other information as
shall be necessary to prepare, amend, renew or extend such Letter of Credit;
and
(vi)
specifying
the amount of the then effective Borrowing Base, the current Aggregate Revolving
Credit Exposures (without regard to the requested Letter of Credit or the
requested amendment, renewal or extension of an outstanding Letter of Credit)
and the
pro forma
Aggregate Revolving Credit Exposures (giving effect to the requested Letter of
Credit or the requested amendment, renewal or extension of an outstanding Letter
of Credit).
Each
notice shall constitute a representation that after giving effect to the
requested issuance, amendment, renewal or extension, as applicable, (i) the LC
Exposure shall not exceed the LC Commitment and (ii) the Aggregate Revolving
Credit Exposures shall not exceed the Aggregate
Commitments. Notwithstanding the foregoing, the Issuing Bank shall
not at any time be obligated to issue, amend, renew or extend any Letter of
Credit if any Lender is at such time an Impacted Lender hereunder, unless (x)
the Borrower cash collateralizes such Impacted Lender’s portion of the total LC
Exposure (calculated after giving effect to the issuance, amendment, renewal or
extension of such Letter of Credit) in accordance with the procedures set forth
in Section 2.08(k) or (y) the Issuing Bank has entered into arrangements
satisfactory to the Issuing Bank in its sole discretion with the Borrower or
such Impacted Lender to eliminate the Issuing Bank’s risk with respect to such
Impacted Lender’s portion of the total LC Exposure.
(c)
If
requested by the Issuing Bank, the Borrower also shall submit a letter of credit
application on the Issuing Bank’s standard form in connection with any request
for a Letter of Credit.
(d)
Expiration
Date
. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Maturity Date.
(e)
Participations
. By
the issuance of a Letter of Credit (or an amendment to a Letter of Credit
increasing the amount thereof) and without any further action on the part of the
Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and
each Lender hereby acquires from the Issuing Bank, a participation in such
Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate
amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement
made by the Issuing Bank and not reimbursed by the Borrower on the date due as
provided in Section 2.08(f), or of any reimbursement payment required to be
refunded to the Borrower for any reason. Each Lender acknowledges and
agrees that its obligation to acquire participations pursuant to this Section
2.08(e) in respect of Letters of Credit is absolute and unconditional and shall
not be affected by any circumstance whatsoever, including any amendment, renewal
or extension of any Letter of Credit or the occurrence and continuance of a
Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(f)
Reimbursement
. If
the Issuing Bank shall make any LC Disbursement in respect of a Letter of
Credit, the Borrower shall reimburse such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than
12:00 noon, Charlotte, North Carolina time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 12:00 noon,
Charlotte, North
Carolina
time, on
such date, or, if such notice has not been received by the Borrower prior to
such time on such date, then not later than 12:00 noon Charlotte, North
Carolina
time, on
(i) the Business Day that the Borrower receives such notice, if such notice is
received prior to 12:00 noon,
Charlotte, North
Carolina time, on the day of receipt, or (ii) the Business Day immediately
32
following
the day that the Borrower receives such notice, if such notice is not received
prior to such time on the day of receipt; provided that if such LC Disbursement
is not less than $1,000,000, the Borrower may, subject to the conditions to
Borrowing set forth herein, request in accordance with Section 2.03 (or Section
2.09 in the case of a Swingline Loan) that such payment be financed with a ABR
Borrowing or a Swingline Loan in an equivalent amount and, to the extent so
financed, the Borrower’s obligation to make such payment shall be discharged and
replaced by the resulting ABR Borrowing or Swingline Loan. If the
Borrower makes such a request (and if the Borrower fails to make such a request
and has not made the relevant reimbursement, it shall be deemed to have made
such a request), the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender’s Applicable Percentage thereof. Promptly
following receipt of such notice, each Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.05 with respect to Loans made by such
Lender (and Section 2.05 shall apply,
mutatis mutandis
, to the
payment obligations of the Lenders), and the Administrative Agent shall promptly
pay to the Issuing Bank the amounts so received by it from the
Lenders. Promptly following receipt by the Administrative Agent of
any payment from the Borrower pursuant to this Section 2.08(f), the
Administrative Agent shall distribute such payment to the Issuing Bank or, to
the extent that Lenders have made payments pursuant to this Section 2.08(f) to
reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
interests may appear.
(g)
Obligations
Absolute
. The Borrower’s obligation to reimburse LC
Disbursements as provided in Section 2.08(f) shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit, any Letter
of Credit Agreement or this Agreement, or any term or provision therein, (ii)
any draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit or any Letter of Credit
Agreement, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section 2.08(g), constitute a legal or equitable discharge of, or provide a
right of setoff against, the Borrower’s obligations
hereunder. Neither the Administrative Agent, the Lenders nor the
Issuing Bank, nor any of their Related Parties shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank; provided that the foregoing shall
not be construed to excuse the Issuing Bank from liability to the Borrower to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank’s
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The
parties hereto expressly agree that, in the absence of gross negligence or
willful misconduct on the part of the
33
Issuing
Bank (as finally determined by a court of competent jurisdiction), the Issuing
Bank shall be deemed to have exercised all requisite care in each such
determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of
Credit.
(h)
Disbursement
Procedures
. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.
(i)
Interim
Interest
. If the Issuing Bank shall make any LC Disbursement,
then, until the Borrower shall have reimbursed the Issuing Bank for such LC
Disbursement (either with its own funds or a Borrowing under Section 2.08(f)),
the unpaid amount thereof shall bear interest, for each day from and including
the date such LC Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per annum then applicable
to ABR Loans. Interest accrued pursuant to this Section 2.08(i) shall
be for the account of the Issuing Bank, except that interest accrued on and
after the date of payment by any Lender pursuant to Section 2.08(f) to reimburse
the Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(j)
Replacement of the Issuing
Bank
. The Issuing Bank may be replaced at any time by written
agreement among the Borrower, the Administrative Agent, the replaced Issuing
Bank and the successor Issuing Bank. The Administrative Agent shall
notify the Lenders of any such replacement of the Issuing Bank. At
the time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 3.05(b). From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term “Issuing
Bank” shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require. After the replacement of the Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of the Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(k)
Cash
Collateralization
. If (i) any Event of Default shall occur and
be continuing and the Borrower receives notice from the Administrative Agent or
the Majority Lenders demanding the deposit of cash collateral pursuant to this
Section 2.08(k), (ii) the Borrower is required to pay to the Administrative
Agent the excess attributable to an LC Exposure in connection with any
prepayment pursuant to Section 3.04(c), (iii) the Borrower
34
elects to
cash collateralize the LC Exposure of any Impacted Lender pursuant to Section
2.08(b) or (iv) any Letter of Credit is outstanding at the time any Lender is an
Impacted Lender and the Borrower receives written request from the Issuing Bank
demanding the deposit of cash collateral pursuant to this Section 2.08(k), then
the Borrower shall deposit, in an account with the Administrative Agent, in the
name of the Administrative Agent and for the benefit of the Lenders, an amount
in cash equal to, in the case of an Event of Default, the LC Exposure, and in
the case of a payment required by Section 3.04(c), the amount of such excess as
provided in Section 3.04(c), and in the case of an Impacted Lender, an amount in
cash equal to such Impacted Lender’s portion of the total LC Exposure at such
time as calculated pursuant to clause (x) of Section 2.08(b) (less any amounts
already on deposit in such account representing cash collateral for any portion
of such Impacted Lender’s portion of the total LC Exposure), as of such date
plus any accrued and unpaid interest thereon; provided that the obligation to
deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Borrower or any Material Subsidiary described in Section 10.01(h) or Section
10.01(i). The Borrower hereby grants to the Administrative Agent, for
the benefit of the Issuing Bank and the Lenders, an exclusive first priority and
continuing perfected security interest in and Lien on such account and all cash,
checks, drafts, certificates and instruments, if any, from time to time
deposited or held in such account, all deposits or wire transfers made thereto,
any and all investments purchased with funds deposited in such account, all
interest, dividends, cash, instruments, financial assets and other Property from
time to time received, receivable or otherwise payable in respect of, or in
exchange for, any or all of the foregoing, and all proceeds, products,
accessions, rents, profits, income and benefits therefrom, and any substitutions
and replacements therefor. The Borrower’s obligation to deposit
amounts pursuant to this Section 2.08(k) shall be absolute and unconditional,
without regard to whether any beneficiary of any such Letter of Credit has
attempted to draw down all or a portion of such amount under the terms of a
Letter of Credit, and, to the fullest extent permitted by applicable law, shall
not be subject to any defense or be affected by a right of set-off, counterclaim
or recoupment which the Borrower or any of its Subsidiaries may now or hereafter
have against any such beneficiary, the Issuing Bank, the Administrative Agent,
the Lenders or any other Person for any reason whatsoever. Such
deposit shall be held as collateral securing the payment and performance of the
Borrower’s and the Guarantor’s obligations under this Agreement and the other
Loan Documents. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. Other than any interest earned on the investment of such
deposits, which investments shall be made at the written request and instruction
of the Borrower but at the option and sole discretion of the Administrative
Agent and at the Borrower’s risk and expense, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied
by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements
for which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated, be applied to satisfy other obligations of the Borrower and the
Guarantors under this Agreement or the other Loan Documents. If the
Borrower is required to provide an amount of cash collateral pursuant to
paragraphs (i), (iii) or (iv) above, and the Borrower is not otherwise required
to pay to the Administrative Agent the excess attributable to an LC Exposure in
connection with any prepayment pursuant to Section
35
3.04(c),
then such amount (to the extent not applied as aforesaid) shall be returned to
the Borrower within three Business Days after (x) in the case of cash collateral
provided pursuant to paragraph (i) above, all Events of Default have been cured
or waived and (y) in the case of cash collateral provided pursuant to paragraphs
(iii) or (iv) above, the applicable Impacted Lender is no longer an Impacted
Lender. The Borrower may at any time request confirmation from the
Administrative Agent that an Impacted Lender is no longer an Impacted Lender,
and the Administrative Agent shall promptly confirm such request or provide
written confirmation to the Borrower that such Lender remains an Impacted Lender
and the basis for such determination.
(l)
Existing Letters of
Credit
. Anything to the contrary notwithstanding, Letter of
Credit # SM234314W outstanding on the Effective Date shall continue to be a
Letter of Credit hereunder until March 24, 2010 whether or not Wachovia
continues to be a Lender hereunder and Wachovia shall have all of the rights,
remedies, powers and privileges of an Issuing Bank hereunder (including, without
limitation, the right to be reimbursed for any drawing hereunder) with respect
to such existing Letter of Credit until such time as such Letter of Credit
expires, is drawn and fully reimbursed or is renewed by another Letter of Credit
issued hereunder, or any combination thereof.
Section
2.09
Swingline
Loans
.
(a)
Subject
to the terms and conditions set forth herein, the Swingline Lender agrees to
make Swingline Loans to the Borrower from time to time during the Availability
Period in an aggregate principal amount at any time outstanding that will not
result in (i) the aggregate principal amount of outstanding Swingline Loans
exceeding $25,000,000 or (ii) the Aggregate Revolving Credit Exposures exceeding
the lesser of (i) the Borrowing Base then in effect or (ii) the Aggregate
Commitments then in effect. Within the foregoing limits and subject
to the terms and conditions set forth herein, the Borrowers may borrow, prepay
and reborrow Swingline Loans.
(b)
To
request a Swingline Loan, the Borrower shall notify the Administrative Agent of
such request by telephone not later than 2:00 p.m., Charlotte, North Carolina
time, on the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery, telecopy or transmitted by electronic communication to the Swingline
Lender of a written Borrowing Request in a form approved by the Administrative
Agent and signed by the Borrower. Each such telephonic and written
Borrowing Request shall specify the date of such Borrowing, which shall be a
Business Day in the United States, and aggregate amount of the requested
Borrowing. The Administrative Agent will promptly advise the
Swingline Lender of any such notice received from the Borrower. The
Swingline Lender shall make each Swingline Loan available to the Borrower by
means of a credit to the general deposit account of the Borrower with the
Swingline Lender (or, in the case of a Swingline Loan made to finance the
reimbursement of an LC Disbursement as provided in Section 2.08(f), by
remittance to the Issuing Bank) by 4:00 p.m., Charlotte, North Carolina
time, on the date such Borrowing is requested.
(c)
The
Swingline Lender may by written notice given to the Administrative Agent not
later than 10:00 a.m., Charlotte, North Carolina time, on any Business Day
require the Lenders to acquire participations on such Business Day in all or a
portion of the Swingline Loans
36
outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which Lenders
will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Lender, specifying in such
notice such Lender's Applicable Percentage of such Swingline Loan or Swingline
Loans. Each Lender hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, to pay to the Administrative Agent, for the
account of the Swingline Lender, such Lender's Applicable Percentage of such
Swingline Loan or Loans. Each Lender acknowledges and agrees that its
obligation to acquire participations in Swingline Loans pursuant to this
paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or Event of Default or reduction or termination of the Commitments, and that
each such payment shall be made without any offset, abatement, withholding or
reduction whatsoever. Each Lender shall comply with its obligation
under this paragraph by wire transfer of immediately available funds, in the
same manner as provided in Section 2.05 with respect to Loans made by such
Lender (and Section 2.05 shall apply,
mutatis
mutandis
, to the
payment obligations of the Lenders), and the Administrative Agent shall promptly
pay to the Swingline Lender the amounts so received by it from the
Lenders. The Administrative Agent shall notify the Borrower of any
participations in any Swingline Loan acquired pursuant to this paragraph, and
thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf of
the Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear; provided that any such
payment so remitted shall be repaid to the Swingline Lender or to the
Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Borrower for any reason. The purchase
of participations in a Swingline Loan pursuant to this paragraph shall not
relieve the Borrower of any default in the payment thereof.
ARTICLE
III
Payments
of Principal and Interest; Prepayments; Fees
Section
3.01
Repayment of
Loans
. The
Borrower hereby unconditionally promises to pay to the (a) Administrative Agent
for the account of each Lender the then unpaid principal amount of each Loan on
the Termination Date and (b) Swingline Lender the then unpaid principal
amount of each Swingline Loan on the earlier of (i) the Termination Date and
(ii) seven (7) Business Days after such Swingline Loan is made; provided that on
each date that a Loan is made, the Borrower shall repay all Swingline Loans then
outstanding.
Section
3.02
Interest
.
(a)
ABR
Loans
. The Loans comprising each ABR Borrowing shall bear
interest on the unpaid principal amount of such Loans at the Alternate Base Rate
plus the Applicable Margin, but in no event to exceed the Highest Lawful
Rate.
(b)
Eurodollar
Loans
. The Loans comprising each Eurodollar Borrowing shall
bear interest on the unpaid principal amount of such Loans at the Adjusted LIBO
Rate for
37
the
Interest Period in effect for such Borrowing plus the Applicable Margin, but in
no event to exceed the Highest Lawful Rate.
(c)
Swingline
Loans
. Each Swingline Loan shall bear interest on the unpaid
principal amount of such Swingline Loan at the Alternate Base Rate plus the
Applicable Margin, but in no event to exceed the Highest Lawful
Rate.
(d)
Post-Default
Rate
. Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower or any
Guarantor hereunder or under any other Loan Document is not paid when due,
whether at stated maturity, upon acceleration or otherwise, such overdue amount
shall bear interest, after as well as before judgment, at a rate per annum equal
to two percent (2%) plus the rate applicable to ABR Loans as provided in Section
3.02(a), but in no event to exceed the Highest Lawful Rate.
(e)
Interest Payment
Dates
. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and on the Termination Date;
provided that (i) accrued interest on any Swingline Loan shall be payable on the
earlier of (a) the Termination Date and (b) seven (7) Business Days after such
Swingline Loan is made, (ii) interest accrued pursuant to Section 3.02(d) shall
be payable on demand, (iii) in the event of any repayment or prepayment of any
Loan (other than an optional prepayment of an ABR Loan prior to the Termination
Date), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment, and (iv) in the event of
any conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.
(f)
Interest Rate
Computations
. All interest hereunder shall be computed on the
basis of a year of 360 days, unless such computation would exceed the Highest
Lawful Rate, in which case interest shall be computed on the basis of a year of
365 days (or 366 days in a leap year), except that interest computed by
reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last
day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO
Rate shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error, and be binding upon the parties
hereto.
Section
3.03
Alternate Rate of
Interest
If
prior to the commencement of any Interest Period for a Eurodollar
Borrowing:
(a)
the
Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining
the Adjusted LIBO Rate or the LIBO Rate for such Interest Period;
or
(b)
the
Administrative Agent is advised by the Majority Lenders that the Adjusted LIBO
Rate or LIBO Rate, as applicable, for such Interest Period will not adequately
and fairly reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period; then the Administrative
Agent shall give notice thereof to the Borrower and the Lenders by telephone or
telecopy as promptly as practicable thereafter and,
38
until the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
Section
3.04
Prepayments
.
(a)
Optional
Prepayments
. The Borrower shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with Section 3.04(b).
(b)
Notice and Terms of Optional
Prepayment
. The Borrower shall notify the Administrative Agent
by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Borrowing, not later than 1:00 p.m. Charlotte,
North Carolina
time, three Business
Days before the date of prepayment, or (ii) in the case of prepayment of an ABR
Borrowing, not later than 11:00 a.m. Charlotte, North Carolina time, on the date
of prepayment, which date shall be a Business Day in the United
States. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid. Promptly following receipt of any such notice relating to
a Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of an advance of a Borrowing of the
same Type as provided in Section 2.02. Each prepayment of a Borrowing
shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to
the extent required by Section 3.02.
(c)
Mandatory
Prepayments
.
(i)
If, after
giving effect to any termination or reduction of the Aggregate Commitment
pursuant to Section 2.06(b), the Aggregate Revolving Credit Exposures exceed the
Aggregate Commitments, then the Borrower shall (A) prepay the Borrowings in an
aggregate principal amount equal to such excess, or add to the Mortgaged
Property, Oil and Gas Properties, having value, as determined by the
Administrative Agent and the Majority Lenders, equal to or greater than such
excess, or a combination thereof and (B) if any excess remains after prepaying
all of the Borrowings as a result of an LC Exposure, pay to the Administrative
Agent on behalf of the Lenders an amount equal to such excess to be held as cash
collateral as provided in Section 2.08(k). The Borrower will be
obligated to make such prepayment, provide such collateral and/or deposit of
cash collateral within ninety (90) days following such termination or reduction
of the Aggregate Commitment; provided that all payments required to be made
pursuant to this Section 3.04(c)(i) must be made on or prior to the Termination
Date.
(ii)
Upon any
redetermination of or adjustment to the amount of the Borrowing Base in
accordance with Section 2.07 or Section 8.13(c), if the Aggregate Revolving
Credit Exposures exceed the redetermined or adjusted Borrowing Base, then the
Borrower shall either (A)(1) prepay the Borrowings in an aggregate principal
amount equal to such excess, or add to the Mortgaged Property, Oil and Gas
Properties, having value, as determined by the
39
Administrative
Agent and the Majority Lenders, equal to or greater than such excess, or a
combination thereof and (2) if any excess remains after prepaying all of the
Borrowings as a result of an LC Exposure, pay to the Administrative Agent on
behalf of the Lenders an amount equal to such excess to be held as cash
collateral as provided in Section 2.08(k) or (B) prepay, subject to the payment
of any funding indemnification amounts required by Section 5.02 but without
premium or penalty, the principal amount of such excess in not more than six (6)
equal monthly installments plus accrued interest thereon with the first such
monthly payment being due within thirty (30) days following its receipt of the
New Borrowing Base Notice in accordance with Section 2.07(d) or the date the
adjustment occurs. The Borrower shall be obligated to make any
prepayment pursuant to Section 3.04(c)(ii)(A)(1) and/or provide any collateral
pursuant to Section 3.04(c)(ii)(A)(1) and/or deposit cash collateral pursuant to
Section 3.04(c)(ii)(A)(2) within ninety (90) days following its receipt of the
New Borrowing Base Notice in accordance with Section 2.07(d) or the date the
adjustment occurs. The Borrower shall be obligated to make all
payments required to be made pursuant to Section 3.04(c)(ii)(B) on or prior to
the Termination Date. Notwithstanding any of the foregoing, all
payments, additions of mortgages on Oil and Gas Properties and cash collateral
deposits required to be made pursuant to this Section 3.04(c)(ii) must be made
on or prior to the Termination Date.
(iii)
Upon any
adjustments to the Borrowing Base pursuant to Section 9.11(a), Section 9.12 or
Section 9.20, if the Aggregate Revolving Credit Exposures exceed the Borrowing
Base as adjusted, then the Borrower shall (A) prepay the Borrowings in an
aggregate principal amount equal to such excess, or add to the Mortgaged
Property, Oil and Gas Properties, having value, as determined by the
Administrative Agent and the Majority Lenders, equal to or greater than such
excess, or a combination thereof and (B) if any excess remains after prepaying
all of the Borrowings as a result of an LC Exposure, pay to the Administrative
Agent on behalf of the Lenders an amount equal to such excess to be held as cash
collateral as provided in Section 2.08(k). The Borrower shall be
obligated to make such prepayment, provide such collateral and/or deposit of
cash collateral within ninety (90) days following such adjustment to the
Borrowing Base (or, if sooner, on the date the Borrower receives cash proceeds
as a result of a disposition pursuant to Section 9.12); provided that all
payments required to be made pursuant to this Section
3.04(c)(iii) must be made on or prior to the Termination
Date.
(iv)
Each
prepayment of Borrowings pursuant to this Section 3.04(c) shall be applied,
first, ratably to any ABR Borrowings then outstanding, and, second, to any
Eurodollar Borrowings then outstanding, and if more than one Eurodollar
Borrowing is then outstanding, to each such Eurodollar Borrowing in order of
priority beginning with the Eurodollar Borrowing with the least number of days
remaining in the Interest Period applicable thereto and ending with the
Eurodollar Borrowing with the most number of days remaining in the Interest
Period applicable thereto.
(v)
Each
prepayment of Borrowings pursuant to this Section 3.04(c) shall be applied
ratably to the Loans included in the prepaid Borrowings. Prepayments
pursuant to this Section 3.04(c) shall be accompanied by accrued interest to the
extent required by Section 3.02.
(d)
No Premium or
Penalty
. Prepayments permitted or required under this Section
3.04 shall be without premium or penalty, except as required under Section
5.02.
Section
3.05
Fees
.
(a)
Commitment
Fees
. The Borrower agrees to pay to the Administrative Agent
for the account of each Lender a commitment fee, which shall accrue at the
applicable Commitment Fee Rate on the daily unused amount of the Commitment of
such Lender during the period from and including the date of this Agreement to
but excluding the Termination Date. Accrued commitment fees shall be
payable in arrears on the last day of March, June, September and December of
each year and on the Termination Date, commencing on the first such date to
occur after the date hereof. All commitment fees shall be computed on
the basis of a year of 360 days, unless such computation would exceed the
Highest Lawful Rate, in which case interest shall be computed on the basis of a
year of 365 days (or 366 days in a leap year), and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day). If a Lender is an Impacted Lender, commitment fees shall cease
to accrue pursuant to this Section 3.05(a) on the entire Commitment of such
Lender until such Lender is no longer an Impacted Lender.
(b)
Letter of Credit
Fees
. The Borrower agrees to pay (i) to the Administrative
Agent for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Margin used to determine the interest rate applicable to Eurodollar Loans on the
average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the date of this Agreement to but excluding the later of the date on
which such Lender’s Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, (ii) to the Issuing Bank a fronting fee, which
shall accrue at the rate of 0.125% per annum on the average daily amount of the
LC Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the date of this Agreement
to but excluding the later of the date of termination of the Commitments and the
date on which there ceases to be any LC Exposure, provided that in no event
shall such fee be less than $300 during any quarter, and (iii) to the Issuing
Bank, for its own account, its standard fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit or processing of
drawings thereunder. Participation fees and fronting fees accrued
through and including the last day of March, June, September and December of
each year shall be payable on the third Business Day following such last day,
commencing on the first such date to occur after the date of this Agreement;
provided that all such fees shall be payable on the Termination Date and any
such fees accruing after the Termination Date shall be payable on
demand. Any other fees payable to the Issuing Bank pursuant to this
Section 3.05(b) shall be payable within 10 days after demand. All
participation fees and fronting fees shall be computed on the basis of a year of
360 days, unless such computation would exceed the Highest Lawful Rate, in which
case interest shall be computed on the basis of a year of 365 days (or 366 days
in a leap year), and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(c)
Administrative Agent
Fees
. The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.
ARTICLE
IV
Payments;
Pro Rata Treatment; Sharing of Set-offs.
Section
4.01
Payments Generally; Pro Rata
Treatment; Sharing of Set-offs
.
(a)
Payments by the
Borrower
. The Borrower shall make each payment required to be
made by it hereunder (whether of principal, interest, fees or reimbursement of
LC Disbursements, or of amounts payable under Section 5.01, Section 5.02,
Section 5.03 or otherwise) prior to 2:00 p.m. Charlotte, North Carolina
time, on the date when
due, in immediately available funds, without defense, deduction, recoupment,
set-off or counterclaim. Fees, once paid, shall not be refundable
under any circumstances. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the
Administrative Agent at its offices specified in Section 12.01, except payments
to be made directly to the Issuing Bank as expressly provided herein and except
that payments pursuant to Section 2.09, Section 5.01, Section 5.02, Section 5.03
and Section 12.03 shall be made directly to the Persons entitled
thereto. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such
extension. All payments hereunder shall be made in
dollars.
(b)
Application of Insufficient
Payments
. If at any time insufficient funds are received by
and available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such
parties.
(c)
Sharing of Payments by
Lenders
. If any Lender shall, by exercising any right of
set-off or counterclaim or otherwise, obtain payment in respect of any principal
of or interest on any of its Loans or participations in LC Disbursements
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and accrued
interest thereon than the proportion received by any other Lender (other than,
in the case of Swingline Loans, the Swingline Lender), then the Lender receiving
such greater proportion shall purchase (for cash at face value) participations
in the Loans and participations in LC Disbursements of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in LC
Disbursements; provided that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this Section
4.01(c) shall not be construed to apply to any payment made by the
Borrower
to a particular Lender pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant. The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such
participation.
Section
4.02
Presumption of Payment by
the Borrower
. Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Administrative Agent for the account
of the Lenders or the Issuing Bank that the Borrower will not make such payment,
the Administrative Agent may assume that the Borrower has made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Bank, as the case may be, the amount
due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank
compensation.
Section
4.03
Certain Deductions by the
Administrative Agent
. If
any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.05(b), Section 2.08(e), Section 2.08(f) or Section 4.02 then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully
paid. If at any time prior to the acceleration or maturity of the
Loans, the Administrative Agent shall receive any payment in respect of
principal of a Loan or a reimbursement of an LC Disbursement while one or more
Impacted Lenders shall be party to this Agreement, the Administrative Agent
shall apply such payment first to the Borrowing(s) for which such Impacted
Lender(s) shall have failed to fund its pro rata share until such time as such
Borrowing(s) are paid in full or each Lender (including each Impacted Lender) is
owed its Applicable Percentage of all Loans then outstanding. After
acceleration or maturity of the Loans, all principal will be paid ratably as
provided in Section 10.02(c).
Section
4.04
Disposition of
Proceeds
. The
Security Instruments contain an assignment by the Borrower and/or the Material
Subsidiaries unto and in favor of the Administrative Agent for the benefit of
the Lenders of all of the Borrower’s or each Material Subsidiary’s interest in
and to production and all proceeds attributable thereto which may be produced
from or allocated to the Mortgaged Property. The Security Instruments
further provide in general for the application of such proceeds to the
satisfaction of the Indebtedness and other obligations described therein and
secured thereby. Notwithstanding the assignment contained in such
Security Instruments, until the occurrence of an Event of Default, (a) the
Administrative Agent and the Lenders agree that they will neither notify the
purchaser or purchasers of such production
nor take
any other action to cause such proceeds to be remitted to the Administrative
Agent or the Lenders, but the Lenders will instead permit such proceeds to be
paid to the Borrower and its Material Subsidiaries and (b) the Lenders hereby
authorize the Administrative Agent to take such actions as may be necessary to
cause such proceeds to be paid to the Borrower and/or such Material
Subsidiaries.
ARTICLE
V
Increased
Costs; Break Funding Payments; Taxes; Illegality
Section
5.01
Increased
Costs
.
(a)
Eurodollar Changes in
Law
. If any Change in Law shall:
(i)
impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate); or
(ii)
impose on
any Lender or the London interbank market any other condition affecting this
Agreement or Eurodollar Loans made by such Lender;
and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any Eurodollar Loan (or of maintaining its obligation to
make any such Loan) or to reduce the amount of any sum received or receivable by
such Lender (whether of principal, interest or otherwise), then the Borrower
will pay to such Lender such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction
suffered.
(b)
Capital
Requirements
. If any Lender or the Issuing Bank determines
that any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s or the Issuing Bank’s
capital or on the capital of such Lender’s or the Issuing Bank’s holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, to a level below that which such Lender or
the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could
have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the
Issuing Bank’s holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender or the Issuing Bank, as the case
may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered.
(c)
Certificates
. A
certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding company,
as the case may be, as specified in Section 5.01(a) or (b) shall be delivered to
the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender or the Issuing Bank, as the case may be, the
amount shown as due on any such certificate within 10 days after receipt
thereof.
(d)
Effect of Failure or Delay
in Requesting Compensation
. Failure or delay on the part of
any Lender or the Issuing Bank to demand compensation pursuant to this Section
5.01
shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to
demand such compensation.
Section
5.02
Break Funding
Payments
. In
the event of (a) the payment of any principal of any Eurodollar Loan other than
on the last day of an Interest Period applicable thereto (including as a result
of an Event of Default), (b) the conversion of any Eurodollar Loan into an ABR
Loan other than on the last day of the Interest Period applicable thereto, or
(c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on
the date specified in any notice delivered pursuant hereto, then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar
market.
A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 5.02 shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
Section
5.03
Taxes
.
(a)
Payments Free of
Taxes
. Any and all payments by or on account of any obligation
of the Borrower or any Material Subsidiary under any Loan Document shall be made
free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 5.03(a)),
the Administrative Agent, Lender or Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b)
Payment of Other Taxes by
the Borrower
. The Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c)
Indemnification by the
Borrower
. The Borrower shall indemnify the Administrative
Agent, each Lender and the Issuing Bank, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent, such Lender or the Issuing Bank, as the case may be,
on or with respect to any payment by or on account of any obligation of the
Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 5.03)
and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate of the Administrative Agent, a Lender or the Issuing Bank as to the
amount of such payment or liability under this Section 5.03 shall be delivered
to the Borrower and shall be conclusive absent manifest
error.
(d)
Evidence of
Payments
. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e)
Foreign
Lenders
. Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement or any other Loan Document shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower as will permit such payments to be made without withholding or at a
reduced rate.
(f)
Tax
Refunds
. If the Administrative Agent or a Lender determines,
in its reasonable discretion, that it has received a refund of any Taxes or
Other Taxes as to which it has been indemnified by the Borrower or with respect
to which the Borrower has paid additional amounts pursuant to this Section 5.03,
it shall pay over such refund to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section 5.03 with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent or such
Lender and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided, that the
Borrower, upon the request of the Administrative Agent or such Lender, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental
Authority. This Section 5.03 shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to the
Borrower or any other Person.
Section
5.04
Designation of Different
Lending Office
. If
any Lender requests compensation under Section 5.01, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 5.03, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 5.01 or Section 5.03, as the case may be, in
the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.
Section
5.05
Illegality
. Notwithstanding
any other provision of this Agreement, in the event that it becomes unlawful for
any Lender or its applicable lending office to honor its obligation to make or
maintain Eurodollar Loans either generally or having a particular Interest
Period hereunder, then (a) such Lender shall promptly notify the Borrower and
the Administrative Agent thereof and such Lender’s obligation to make such
Eurodollar Loans shall be suspended (the “
Affected Loans
”)
until such time as such Lender may again make and maintain such Eurodollar Loans
and (b) all Affected Loans which would otherwise be made by such Lender shall be
made instead as ABR Loans (and, if such Lender so requests by notice to the
Borrower and the Administrative Agent, all Affected Loans of such Lender then
outstanding shall be automatically converted into ABR Loans on the date
specified by such Lender in such notice) and, to the extent that Affected Loans
are so made as (or converted into) ABR Loans, all payments of principal which
would otherwise be applied to such Lender’s Affected Loans shall be applied
instead to its ABR Loans. Subject to Section 5.06, no Commitment
of any Lender shall be increased or otherwise affected solely as a result of the
operation of this Section 5.05 and, except as otherwise expressly provided
in this Section 5.05, performance by the Borrower of its obligations hereunder
and the other Loan Documents shall not be excused or otherwise modified solely
as a result of the operation of this Section 5.05.
Section
5.06
Replacement of
Lenders
.
(a)
If any
Lender requests compensation under Section 5.01, or if the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 5.03, or if any Lender has Affected
Loans pursuant to Section 5.05, or if any Lender becomes an Impacted Lender, or
if any Lender refuses to approve a Proposed Borrowing Base pursuant to Section
2.07(c)(iii) and as a result, the Borrower elects to replace such dissenting
Lender pursuant to Section 2.07(c)(iv), then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section 12.04(b)), all its
interests, rights and obligations under this Agreement to an assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 5.01 or payments required to be made
pursuant to Section 5.03, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
ARTICLE
VI
Conditions
Precedent
Section
6.01
Effective
Date
. The
obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with
Section 12.02):
(a)
The
Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, without limitation, to the
extent invoiced, reimbursement or payment of all of the Administrative Agent’s
out-of-pocket expenses including, without limitation, the reasonable fees,
charges and disbursements of counsel for the Administrative Agent, required to
be reimbursed or paid by the Borrower hereunder.
(b)
The
Administrative Agent shall have received a certificate of the Secretary or an
Assistant Secretary of each of the Borrower and each Guarantor setting forth (i)
resolutions of its board of directors with respect to the authorization of the
Borrower or such Guarantor to execute and deliver the Loan Documents to which it
is a party and to enter into the transactions contemplated in those documents,
(ii) the officers of the Borrower or such Guarantor (y) who are authorized to
sign the Loan Documents to which the Borrower or such Guarantor is a party and
(z) who will, until replaced by another officer or officers duly authorized for
that purpose, act as its representative for the purposes of signing documents
and giving notices and other communications in connection with this Agreement
and the transactions contemplated hereby, (iii) specimen signatures of such
authorized officers, and (iv) that no changes to the articles or certificate of
incorporation and bylaws of the Borrower and such Guarantor have occurred since
December 18, 2008. The Administrative Agent and the Lenders may
conclusively rely on such certificate until the Administrative Agent receives
notice in writing from the Borrower to the contrary.
(c)
The
Administrative Agent shall have received certificates of the appropriate State
agencies with respect to the existence, qualification and good standing of the
Borrower and each Guarantor.
(d)
The
Administrative Agent shall have received a compliance certificate which shall be
substantially in the form of Exhibit B, duly and properly executed by a
Responsible Officer and dated as of the Effective Date certifying compliance
(including compliance with Section 8.12) with the Existing Credit Agreement as
of such date.
(e)
The
Administrative Agent shall have received from each party hereto counterparts (in
such number as may be requested by the Administrative Agent) of this Agreement
signed on behalf of such party.
(f)
The
Administrative Agent shall have received duly executed Notes payable to the
order of each Lender in a principal amount equal to such Lender’s Commitment
dated as of the date hereof.
(g)
The
Administrative Agent shall have received from each party thereto duly executed
and completed counterparts (in such number as may be requested by the
Administrative Agent) of the Security Instruments, including the Reaffirmation
Agreements and
the other
Security Instruments described on Exhibit C. In connection with the
execution and delivery of the Security Instruments, the Administrative Agent
shall:
(i)
be
reasonably satisfied that the Security Instruments create first priority,
perfected Liens (subject only to Excepted Liens identified in clauses (a) to (d)
and (f) of the definition thereof, but subject to the provisos at the end of
such definition) on at least 80% of the total value of the Oil and Gas
Properties evaluated in the Initial Reserve Report sufficient in the reasonable
opinion of the Administrative Agent to justify a Borrowing Base of $900,000,000
on the Effective Date hereof; and
(ii)
have
received certificates, together with undated, blank stock powers for each such
certificate, representing all of the issued and outstanding Equity Interests of
each of the Guarantors.
(h)
The
Administrative Agent shall have received an opinion of Ballard Spahr Andrews
& Ingersoll, LLP,
special counsel to the
Borrower and the Guarantors, substantially in the form of Exhibit H hereto,
and
such other
legal opinions, including opinions of local counsel, certificates, notes,
documents and other instruments as the Administrative Agent may
request.
(i)
The
Administrative Agent shall have received a certificate of insurance coverage of
the Borrower evidencing that the Borrower is carrying insurance in accordance
with Section 7.13.
(j)
The
Administrative Agent shall have received title opinions, in form and substance
satisfactory to the Administrative Agent, or other evidence of title, in form
and substance satisfactory to the Administrative Agent, setting forth the status
of title to at least 80% of the total value of the Mortgaged Properties
evaluated in the Initial Reserve Report and the Administrative Agent shall be
reasonably satisfied with the status of title reflected therein.
(k)
The
proceeds of the initial Loans shall be used to renew, rearrange, modify and
extend the outstanding amounts under the Existing Credit Agreement and all
“Commitments” (as defined in the Existing Credit Agreement) thereunder shall
have been terminated.
(l)
The
Administrative Agent shall be reasonably satisfied with the environmental
condition of the Oil and Gas Properties of the Borrower and its Material
Subsidiaries.
(m)
The
Administrative Agent shall have received a certificate of a Responsible Officer
of the Borrower certifying that the Borrower has received all consents and
approvals required by Section 7.03.
(n)
The
Administrative Agent shall have received the financial statements referred to in
Section 7.04(a) and the Initial Reserve Report accompanied by a certificate
covering the matters described in Section 8.12(c).
(o)
The
Administrative Agent shall have received appropriate UCC search certificates
reflecting no prior Liens encumbering the Properties of the Borrower and the
Material
Subsidiaries for each of the following jurisdictions: Colorado, Delaware,
Louisiana, Montana, New Mexico, North Dakota, Oklahoma, Texas, and
Wyoming and any other jurisdiction requested by the Administrative Agent;
other than those being assigned or released on or prior to the Effective Date or
Liens permitted by Section 9.03.
(p)
The
Administrative Agent shall have received a letter from Corporation Service
Company evidencing the appointment of Corporation Service Company as authorized
agent for service of process on the Borrower under each Loan Document to which
it is a party,
(q)
The
Administrative Agent shall have received such other documents as the
Administrative Agent or special counsel to the Administrative Agent may
reasonably request.
The
Administrative Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and
binding. Notwithstanding the foregoing, the obligations of the
Lenders to make Loans and of the Issuing Bank to issue Letters of Credit
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 12.02) at or prior to 5:00 p.m.,
Charlotte, North Carolina time, on April 15, 2009 (and, in the event such
conditions are not so satisfied or waived, the Commitments shall terminate at
such time).
Section
6.02
Each Credit
Event
. The
obligation of each Lender to make a Loan on the occasion of any Borrowing
(including the initial funding), and of the Issuing Bank to issue, amend, renew
or extend any Letter of Credit, is subject to the satisfaction of the following
conditions:
(a)
At the
time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no
Default shall have occurred and be continuing.
(b)
At the
time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no
Material Adverse Effect shall have occurred.
(c)
The
representations and warranties of the Borrower and the Guarantors set forth in
this Agreement and in the other Loan Documents shall be true and correct in all
material respects on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, except to the extent any such representations and warranties are
expressly limited to an earlier date, in which case, on and as of the date of
such Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, such representations and warranties shall
continue to be true and correct as of such specified earlier date.
(d)
The
making of such Loan or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, would not conflict with, or cause any Lender or
the Issuing Bank to violate or exceed, any applicable Governmental Requirement,
and no Change in Law shall have occurred, and no litigation shall be pending or
threatened, which does or, with respect to any threatened litigation, seeks to,
enjoin, prohibit or restrain, the making or repayment of any Loan, the issuance,
amendment, renewal, extension or repayment of any Letter
of Credit
or any participations therein or the consummation of the transactions
contemplated by this Agreement or any other Loan Document.
(e)
The
receipt by the Administrative Agent of a Borrowing Request in accordance with
Section 2.03 or a request for a Letter of Credit in accordance with Section
2.08(b), as applicable.
Each
Borrowing and each issuance, amendment, renewal or extension of any Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in Section 6.02(a)
through (e).
ARTICLE
VII
Representations
and Warranties
The
Borrower represents and warrants to the Lenders that:
Section
7.01
Organization;
Powers
. Each
of the Borrower and the Material Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority, and has all material
governmental licenses, authorizations, consents and approvals necessary, to own
its assets and to carry on its business as now conducted, and is qualified to do
business in, and is in good standing in, every jurisdiction where such
qualification is required, except where failure to have such power, authority,
licenses, authorizations, consents, approvals and qualifications could not
reasonably be expected to have a Material Adverse Effect.
Section
7.02
Authority;
Enforceability
. The
Transactions are within the Borrower’s and each Guarantor’s corporate powers and
have been duly authorized by all necessary corporate and, if required,
stockholder action. Each Loan Document to which the Borrower and each
Guarantor is a party has been duly executed and delivered by the Borrower and
such Guarantor and constitutes a legal, valid and binding obligation of the
Borrower and such Guarantor, as applicable, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
Section
7.03
Approvals
; No
Conflicts
. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority or any other
third Person, nor is any such consent, approval, registration, filing or other
action necessary for the validity or enforceability of any Loan Document or the
consummation of the transactions contemplated thereby, except such as have been
obtained or made and are in full force and effect other than (i) the recording
and filing of the Security Instruments as required by this Agreement and (ii)
those third party approvals or consents which, if not made or obtained, would
not cause a Default hereunder, could not reasonably be expected to have a
Material Adverse Effect or do not have an adverse effect on the enforceability
of the Loan Documents, (b) will not violate any applicable law or regulation or
the charter, by-laws or other organizational documents of the Borrower or any
Material Subsidiary or any order of any Governmental Authority, (c) will not
violate or result in a default under any indenture, agreement or other
instrument
binding upon the Borrower or any Material Subsidiary or its Properties, or give
rise to a right thereunder to require any payment to be made by the Borrower or
such Material Subsidiary and (d) will not result in the creation or imposition
of any Lien on any Property of the Borrower or any Material Subsidiary (other
than the Liens created by the Loan Documents).
Section
7.04
Financial Condition; No
Material Adverse Change
.
(a)
The
Borrower has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, stockholders equity and cash flows as of and for the
fiscal year ended December 31, 2008, reported on by Deloitte & Touche,
independent public accountants. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its Consolidated Subsidiaries as
of such date and for such period in accordance with GAAP.
(b)
Since
December 31, 2008, (i) there has been no material adverse change in the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and its Material Subsidiaries, taken as a whole and (ii) the
business of the Borrower and its Material Subsidiaries has been conducted only
in the ordinary course consistent with past business practices.
(c)
Neither
the Borrower nor any Material Subsidiary has on the date hereof (i) any material
Debt (including Disqualified Capital Stock), except as referred to or reflected
or provided for in the Financial Statements, or (ii) any contingent liabilities,
off-balance sheet liabilities or partnerships, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments, incurred outside the ordinary course of the Borrower’s
or such Material Subsidiary’s business.
Section
7.05
Litigation
.
(a)
Except as
set forth on Schedule 7.05, there are no material actions, suits,
investigations or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any Material Subsidiary (i) not fully
covered by insurance (except for normal deductibles) as to which there is a
reasonable possibility of an adverse determination that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect, or (ii) that involve any Loan Document or
the Transactions.
(b)
Since the
date of this Agreement, there has been no change in the status of the matters
disclosed in Schedule 7.05 that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
Section
7.06
Environmental
Matters
. Except
as could not be reasonably expected to have a Material Adverse Effect (or with
respect to (c), (d) and (e) below, where the failure to take such actions could
not be reasonably expected to have a Material Adverse Effect):
(a)
neither
any Property of the Borrower or any Material Subsidiary nor the operations
conducted thereon violate any order or requirement of any court or Governmental
Authority or any Environmental Laws.
(b)
no
Property of the Borrower or any Material Subsidiary nor the operations currently
conducted thereon or, to the knowledge of the Borrower, by any prior owner or
operator of such Property or operation, are in violation of or subject to any
existing, pending or threatened action, suit, investigation, inquiry or
proceeding by or before any court or Governmental Authority or to any remedial
obligations under Environmental Laws.
(c)
all
notices, permits, licenses, exemptions, approvals or similar authorizations, if
any, required to be obtained or filed in connection with the operation or use of
any and all Property of the Borrower and each Material Subsidiary, including
past or present treatment, storage, disposal or release of a hazardous
substance, oil and gas waste or solid waste into the environment, have been duly
obtained or filed, and the Borrower and each Material Subsidiary are in
compliance with the terms and conditions of all such notices, permits, licenses
and similar authorizations.
(d)
all
hazardous substances, solid waste and oil and gas waste, if any, generated at
any and all Property of the Borrower or any Material Subsidiary have in the past
been transported, treated and disposed of in accordance with Environmental Laws
and so as not to pose an imminent and substantial endangerment to public health
or welfare or the environment, and, to the knowledge of the Borrower, all such
transport carriers and treatment and disposal facilities have been and are
operating in compliance with Environmental Laws and so as not to pose an
imminent and substantial endangerment to public health or welfare or the
environment, and are not the subject of any existing, pending or threatened
action, investigation or inquiry by any Governmental Authority in connection
with any Environmental Laws.
(e)
the
Borrower has taken all steps reasonably necessary to determine and has
determined that no oil, hazardous substances, solid waste or oil and gas waste,
have been disposed of or otherwise released and there has been no threatened
release of any oil, hazardous substances, solid waste or oil and gas waste on or
to any Property of the Borrower or any Material Subsidiary except in compliance
with Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment.
(f)
to the
extent applicable, all Property of the Borrower and each Material Subsidiary
currently satisfies all design, operation, and equipment requirements imposed by
the OPA, and the Borrower does not have any reason to believe that such
Property, to the extent subject to the OPA, will not be able to maintain
compliance with the OPA requirements during the term of this
Agreement.
(g)
neither
the Borrower nor any Material Subsidiary has any known contingent liability or
Remedial Work in connection with any release or threatened release of any oil,
hazardous substance, solid waste or oil and gas waste into the
environment.
Section
7.07
Compliance with the Laws and
Agreements; No Defaults
.
(a)
Each of
the Borrower and each Material Subsidiary is in compliance with all Governmental
Requirements applicable to it or its Property and all agreements and other
instruments binding upon it or its Property, and possesses all licenses,
permits, franchises, exemptions, approvals and other governmental authorizations
necessary for the ownership of its
Property
and the conduct of its business, except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
(b)
Neither
the Borrower nor any Material Subsidiary is in default nor has any event or
circumstance occurred which, but for the expiration of any applicable grace
period or the giving of notice, or both, would constitute a default or would
require the Borrower or a Material Subsidiary to Redeem or make any offer to do
any of the foregoing under any indenture, note, credit agreement or instrument
pursuant to which any Material Indebtedness is outstanding or by which the
Borrower or any Material Subsidiary or any of their Properties is
bound.
(c)
No
Default has occurred and is continuing.
Section
7.08
Investment Company
Act
. Neither
the Borrower nor any Subsidiary is an “investment company” or a company
“controlled” by an “investment company,” within the meaning of, or subject to
regulation under, the Investment Company Act of 1940, as amended.
Section
7.09
Public Utility Holding
Company Act
. Neither
the Borrower nor any Subsidiary 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, or subject to regulation under, the Public Utility Holding Company
Act of 1935, as amended.
Section
7.10
Taxes
. Each
of the Borrower and its Subsidiaries has timely filed or caused to be filed all
Tax returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which the Borrower or
such Subsidiary, as applicable, has set aside on its books adequate reserves in
accordance with GAAP or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect. The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of Taxes and other governmental charges are, in the reasonable
opinion of the Borrower, adequate. No Tax Lien has been filed and, to
the knowledge of the Borrower, no claim is being asserted with respect to any
such Tax or other such governmental charge.
Section
7.11
ERISA
.
(a)
The
Borrower, the Subsidiaries and each ERISA Affiliate have complied in all
material respects with ERISA and, where applicable, the Code regarding each
Plan.
(b)
Each Plan
is, and has been, maintained in substantial compliance with ERISA and,
where applicable, the Code.
(c)
No act,
omission or transaction has occurred which could result in imposition on the
Borrower, any Subsidiary or any ERISA Affiliate (whether directly or indirectly)
of (i) either a civil penalty assessed pursuant to subsections (c), (i) or (l)
of section 502 of ERISA or a tax imposed pursuant to Chapter 43 of
Subtitle D of the Code or (ii) breach of fiduciary duty liability damages
under section 409 of ERISA.
(d)
No Plan
(other than a defined contribution plan) or any trust created under any
such Plan has been terminated since September 2, 1974. No
liability to the PBGC (other than for the payment of current premiums which are
not past due) by the Borrower, any Subsidiary or any ERISA Affiliate has been or
is expected by the Borrower, any Subsidiary or any ERISA Affiliate to be
incurred with respect to any Plan. No ERISA Event with respect to any
Plan has occurred.
(e)
Full
payment when due has been made of all amounts which the Borrower, the
Subsidiaries or any ERISA Affiliate is required under the terms of each Plan or
applicable law to have paid as contributions to such Plan as of the date
hereof, and no accumulated funding deficiency (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived, exists with respect
to any Plan.
(f)
The
actuarial present value of the benefit liabilities under each Plan which is
subject to Title IV of ERISA does not, as of the end of the Borrower’s most
recently ended fiscal year, exceed the current value of the assets (computed on
a plan termination basis in accordance with Title IV of ERISA) of such Plan
allocable to such benefit liabilities. The term “actuarial present
value of the benefit liabilities” shall have the meaning specified in section
4041 of ERISA.
(g)
Neither
the Borrower, the Subsidiaries nor any ERISA Affiliate sponsors, maintains, or
contributes to an employee welfare benefit plan, as defined in section 3(1) of
ERISA, including, without limitation, any such plan maintained to provide
benefits to former employees of such entities, that may not be terminated by the
Borrower, a Subsidiary or any ERISA Affiliate in its sole discretion at any time
without any material liability.
(h)
Neither
the Borrower, the Subsidiaries nor any ERISA Affiliate sponsors, maintains or
contributes to, or has at any time in the six-year period preceding the date
hereof sponsored, maintained or contributed to, any Multiemployer
Plan.
(i)
Neither
the Borrower, the Subsidiaries nor any ERISA Affiliate is required to provide
security under section 401(a)(29) of the Code due to a Plan amendment that
results in an increase in current liability for the Plan.
Section
7.12
Disclosure; No Material
Misstatements
. The
Borrower has disclosed to the Lenders all agreements, instruments and corporate
or other restrictions to which it or any of its Material Subsidiaries is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect. Neither the Information Memorandum nor any of the other
reports, financial statements, certificates or other information furnished by or
on behalf of the Borrower or any Material Subsidiary to the Administrative Agent
or any Lender or any of their Affiliates in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or under any
other Loan Document (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the
time. There
is no fact peculiar to the Borrower or any Material Subsidiary which could
reasonably be expected to have a Material Adverse Effect or in the future is
reasonably likely to have a Material Adverse Effect and which has not been set
forth in this Agreement or the Loan Documents or the other documents,
certificates and statements furnished to the Administrative Agent or the Lenders
by or on behalf of the Borrower or any Material Subsidiary prior to, or on, the
date hereof in connection with the transactions contemplated
hereby. There are no material statements or conclusions in any
Reserve Report which are based upon or include misleading information or fail to
take into account material information regarding the matters reported
therein.
Section
7.13
Insurance
. The
Borrower has, and has caused all its Material Subsidiaries to have, (a) all
insurance policies sufficient for the compliance by each of them with all
material Governmental Requirements and all material agreements and (b) insurance
coverage in at least amounts and against such risk (including public liability)
that are usually insured against by companies similarly situated and engaged in
the same or a similar business for the assets and operations of the Borrower and
its Material Subsidiaries.
Section
7.14
Restriction on
Liens
. Neither
the Borrower nor any of the Material Subsidiaries is a party to any material
agreement or arrangement (other than Capital Leases creating Liens permitted by
Section 9.03(c), but then only on the Property subject of such Capital Lease),
or subject to any order, judgment, writ or decree, which either restricts or
purports to restrict its ability to grant Liens to the Administrative Agent and
the Lenders on or in respect of their Properties to secure the Indebtedness and
the Loan Documents.
Section
7.15
Subsidiaries
. Except
as set forth on Schedule 7.15 or as disclosed in writing to the Administrative
Agent (which shall promptly furnish a copy to the Lenders), which shall be a
supplement to Schedule 7.15, the Borrower has no
Subsidiaries. Schedule 7.15 identifies each Subsidiary that is a
Material Subsidiary, and each Material Subsidiary on such schedule is a
Wholly-Owned Subsidiary. As of the Effective Date, there are no
Material Subsidiaries.
Section
7.16
Location of Business and
Offices
. The
Borrower’s jurisdiction of organization is Delaware; the name of the Borrower as
listed in the public records of its jurisdiction of organization is St. Mary
Land & Exploration Company; and the organizational identification number of
the Borrower in its jurisdiction of organization is 44728. The
Borrower’s principal place of business and chief executive office are located at
the address specified in Section 12.01 (or as set forth in a notice delivered
pursuant to Section 8.01(m) and Section 12.01(c)). Each Material
Subsidiary’s jurisdiction of organization, name as listed in the public records
of its jurisdiction of organization, organizational identification number in its
jurisdiction of organization, and the location of its principal place of
business and chief executive office is stated on Schedule 7.15 (or as set forth
in a notice delivered pursuant to Section 8.01(m)).
Section
7.17
Properties; Titles,
Etc
. Except
for matters which could not reasonably be expected to have a Material Adverse
Effect:
(a)
Each of
the Borrower and the Material Subsidiaries has good and defensible title to the
Oil and Gas Properties evaluated in the most recently delivered Reserve Report
and good title to all its personal Properties, in each case, free and clear of
all Liens except Liens permitted by Section 9.03. After giving full
effect to the Excepted Liens, the Borrower or the Material Subsidiary specified
as the owner owns the net interests in production attributable to the
Hydrocarbon Interests as reflected in the most recently delivered Reserve
Report, and the ownership of such Properties shall not in any material respect
obligate the Borrower or such Material Subsidiary to bear the costs and expenses
relating to the maintenance, development and operations of each such Property in
an amount in excess of the working interest of each Property set forth in the
most recently delivered Reserve Report that is not offset by a corresponding
proportionate increase in the Borrower’s or such Material Subsidiary’s net
revenue interest in such Property.
(b)
All
material leases and agreements necessary for the conduct of the business of the
Borrower and the Material Subsidiaries are valid and subsisting, in full force
and effect, and there exists no default or event or circumstance which with the
giving of notice or the passage of time or both would give rise to a default
under any such lease or leases, which would affect in any material respect the
conduct of the business of the Borrower and the Material Subsidiaries, taken as
a whole.
(c)
The
rights and Properties presently owned, leased or licensed by the Borrower and
the Material Subsidiaries including all easements and rights of way, include all
rights and Properties necessary to permit the Borrower and the Material
Subsidiaries to conduct their business in all material respects in the same
manner as its business has been conducted prior to the date hereof.
(d)
All of
the Properties of the Borrower and the Material Subsidiaries which are
reasonably necessary for the operation of their businesses are in good working
condition and are maintained in accordance with prudent business
standards.
(e)
The
Borrower and each Material Subsidiary owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual Property
material to its business, and the use thereof by the Borrower and such Material
Subsidiary does not infringe upon the rights of any other Person, except for any
such infringements that, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect. The Borrower and
its Material Subsidiaries either own or have valid licenses or other rights to
use all databases, geological data, geophysical data, engineering data, seismic
data, maps, interpretations and other technical information used in their
businesses as presently conducted, subject to the limitations contained in the
agreements governing the use of the same, which limitations are customary for
companies engaged in the business of the exploration and production of
Hydrocarbons, with such exceptions as could not reasonably be expected to have a
Material Adverse Effect.
Section
7.18
Maintenance of
Properties
. Except
for such acts or failures to act as could not be reasonably expected to have a
Material Adverse Effect, the Oil and Gas Properties (and Properties unitized
therewith) have been maintained, operated and developed in a good and
workmanlike manner and in conformity with all Government Requirements and in
conformity with the provisions of all leases, subleases or other contracts
comprising a part of the Hydrocarbon Interests and other contracts and
agreements forming a part of the Oil and Gas Properties. Specifically
in connection with the foregoing, except for those as could not be reasonably
expected to have a Material Adverse Effect, (i) no Oil and Gas Property is
subject to having allowable production reduced below the full and regular
allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) and (ii)
none of the wells comprising a part of the Oil and Gas Properties (or Properties
unitized therewith) is deviated from the vertical more than the maximum
permitted by Government Requirements, and such wells are, in fact, bottomed
under and are producing from, and the well bores are wholly within, the Oil and
Gas Properties (or in the case of wells located on Properties unitized
therewith, such unitized Properties). All pipelines, wells, gas
processing plants, platforms and other material improvements, fixtures and
equipment owned in whole or in part by the Borrower or any of its Material
Subsidiaries that are necessary to conduct normal operations are being
maintained in a state adequate to conduct normal operations, and with respect to
such of the foregoing which are operated by the Borrower or any of its Material
Subsidiaries, in a manner consistent with the Borrower’s or its Material
Subsidiaries’ past practices (other than those the failure of which to maintain
in accordance with this Section 7.18 could not reasonably be expect to have a
Material Adverse Effect).
Section
7.19
Gas Imbalances
,
Prepayments
. As
of the date hereof, except as set forth on Schedule 7.19 or on the most recent
certificate delivered pursuant to Section 8.12(c), on a net basis there are no
gas imbalances, take or pay or other prepayments which would require the
Borrower or any of its Material Subsidiaries to deliver Hydrocarbons produced
from the Oil and Gas Properties at some future time without then or thereafter
receiving full payment therefor exceeding three million mcf of gas (on an mcf
equivalent basis) in the aggregate.
Section
7.20
Marketing of
Production
. Except
for contracts listed and in effect on the date hereof on Schedule 7.20, and
thereafter either disclosed in writing to the Administrative Agent or included
in the most recently delivered Reserve Report (with respect to all of which
contracts the Borrower represents that it or its Material Subsidiaries are
receiving a price for all production sold thereunder which is computed
substantially in accordance with the terms of the relevant contract and are not
having deliveries curtailed substantially below the subject Property’s delivery
capacity), no material agreements exist which are not cancelable on 60 days
notice or less without penalty or detriment for the sale of production from the
Borrower’s or its Material Subsidiaries’ Hydrocarbons (including, without
limitation, calls on or other rights to purchase, production, whether or not the
same are currently being exercised) that (a) pertain to the sale of production
at a fixed price and (b) have a maturity or expiry date of longer than six (6)
months from the date hereof.
Section
7.21
Swap
Agreements
. Schedule
7.21, as of the date hereof, and after the date hereof, each report required to
be delivered by the Borrower pursuant to Section 8.01(d), sets forth, a true and
complete list of all Swap Agreements of the Borrower and each Material
Subsidiary, the material terms thereof (including the type, term, effective
date, termination date
and
notional amounts or volumes), the net mark to market value thereof, all credit
support agreements relating thereto (including any margin required or supplied)
and the counterparty to each such agreement.
Section
7.22
Use of Loans and Letters of
Credit
. The
proceeds of the Loans and the Letters of Credit shall be used (a) to provide
working capital for exploration, development and production operations, (b) to
finance the acquisition of Oil & Gas Properties, (c) to renew, rearrange,
modify and extend the Debt under the Existing Credit Agreement, (d) for general
corporate purposes, (e) to repay Swingline Loans and (f) to purchase or
otherwise make payments in respect of the Senior Convertible Notes subject to
the limitations on such purchases and payments provided herein. The
Borrower and its Subsidiaries are not engaged principally, or as one of its or
their important activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying margin stock
(within the meaning of Regulation U or X of the Board). No part of
the proceeds of any Loan or Letter of Credit will be used for any purpose which
violates the provisions of Regulations U or X of the Board.
Section
7.23
Solvency
. After
giving effect to the transactions contemplated hereby, (a) the aggregate assets
(after giving effect to amounts that could reasonably be received by reason of
indemnity, offset, insurance or any similar arrangement), at a fair valuation,
of the Borrower and the Guarantors, taken as a whole, will exceed the aggregate
Debt of the Borrower and the Guarantors on a consolidated basis, as the Debt
becomes absolute and matures, (b) each of the Borrower and the Guarantors will
not have incurred or intended to incur, and will not believe that it will incur,
Debt beyond its ability to pay such Debt (after taking into account the timing
and amounts of cash to be received by each of the Borrower and the Guarantors
and the amounts to be payable on or in respect of its liabilities, and giving
effect to amounts that could reasonably be received by reason of indemnity,
offset, insurance or any similar arrangement) as such Debt becomes absolute and
matures and (c) each of the Borrower and the Guarantors will not have (and will
have no reason to believe that it will have thereafter) unreasonably small
capital for the conduct of its business.
Section
7.24
Material
Agreements
. The
Borrower has delivered or caused to be delivered to the Administrative Agent
true and correct copies of the Material Agreements. The Material
Agreements have not been modified, terminated, assigned or pledged by Borrower
or any Material Subsidiary, as applicable, are in full force and effect and no
party is in default in the performance of its obligations thereunder in any
material respect.
ARTICLE
VIII
Affirmative
Covenants
Until the
Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder and all other amounts payable under the
Loan Documents shall have been paid in full and all Letters of Credit shall have
expired or terminated and all LC Disbursements shall have been reimbursed, the
Borrower covenants and agrees with the Lenders that:
Section
8.01
Financial Statements;
Ratings Change; Other Information
. The
Borrower will furnish to the Administrative Agent for electronic or other
distribution to each Lender:
(a)
Annual
Financial Statements
. Within 90 days after the
end of each fiscal year of the Borrower, (i) its audited consolidated balance
sheet and related statements of operations, stockholders’ equity and cash flows
as of the end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by Deloitte &
Touche or other independent public accountants of recognized national standing
(without a “going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Borrower and its
Consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied
and
(ii) if dispositions of any Oil and Gas Properties exceeded $50,000,000 during
such fiscal year, its unaudited consolidated pro forma statements reflecting
such dispositions of Oil and Gas Properties during such fiscal year as of the
end of and for such fiscal year, setting forth in each case in comparative form
the figures for the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its Consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently
applied.
(b)
Quarterly Financial
Statements
. Within 45 days after the end of each of the first
three fiscal quarters of each fiscal year of the Borrower, its consolidated
balance sheet and related statements of operations, stockholders’ equity and
cash flows as of the end of and for such fiscal quarter (including, if
dispositions of any Oil and Gas Properties exceeded $25,000,000 during such
fiscal quarter, pro forma statements reflecting such dispositions of Oil and Gas
Properties during such fiscal quarter) and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its Consolidated Subsidiaries on a
consolidated (and pro forma, where applicable) basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes.
(c)
Certificate of Financial
Officer – Compliance
. Concurrently with any delivery of
financial statements under Section 8.01(a) or Section 8.01(b), a certificate of
a Financial Officer in substantially the form of Exhibit B hereto (i) certifying
as to whether a Default has occurred and, if a Default has occurred, specifying
the details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with Section 8.13(b) and Section 9.01 and (iii) stating whether any
change in GAAP or in the application thereof has occurred since the date of the
audited financial statements referred to in Section 7.04 and, if any such change
has occurred, specifying the effect of such change on the financial statements
accompanying such certificate.
(d)
Listing of Swap
Agreements
. Concurrently with any delivery of financial
statements under Section 8.01(a) and Section 8.01(b), a true and complete list
of all Swap Agreements of the Borrower and each Material Subsidiary as of the
last Business Day of such fiscal quarter or fiscal year, which shall depict the
material terms thereof (including the type,
term,
effective date, termination date and notional amounts or volumes), the net
mark-to-market value therefor, any new credit support agreements relating
thereto not listed on Schedule 7.20, any margin required or supplied under any
credit support document, and the counterparty to each such
agreement.
(e)
Certificate of Insurer –
Insurance Coverage
. Concurrently with any delivery of
financial statements under Section 8.01(a), a certificate of insurance coverage
from each insurer with respect to the insurance required by Section 8.07, in
form and substance satisfactory to the Administrative Agent, and, if requested
by the Administrative Agent or any Lender, all copies of the applicable
policies.
(f)
Other Accounting
Reports
. Promptly upon receipt thereof, a copy of each other
report or letter submitted to the Borrower or any of its Subsidiaries by
independent accountants in connection with any annual, interim or special audit
made by them of the books of the Borrower or any such Subsidiary, and a copy of
any response by the Borrower or any such Subsidiary, or the Board of Directors
of the Borrower or any such Subsidiary, to such letter or report.
(g)
SEC and Other Filings;
Reports to Shareholders
. Promptly after the same become
publicly available, copies of all periodic and other reports, proxy statements
and other materials filed by the Borrower or any Subsidiary with the SEC, or
with any national securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be.
(h)
Notices Under Material
Instruments
. Promptly after the furnishing thereof, copies of
any financial statement, report or notice furnished to or by any Person pursuant
to the terms of any preferred stock designation, indenture, loan or credit or
other similar agreement, other than this Agreement and not otherwise required to
be furnished to the Lenders pursuant to any other provision of this Section
8.01.
(i)
Lists of
Purchasers
. Promptly following the written request from the
Administrative Agent thereof, a list of all Persons purchasing Hydrocarbons from
the Borrower or any Material Subsidiary.
(j)
Notice of Sales of Oil and
Gas Properties
. In the event the Borrower or any Material
Subsidiary intends to sell, transfer, assign or otherwise dispose of any Oil or
Gas Properties or any Equity Interests in any Subsidiary in accordance with
Section 9.12 for consideration in excess of $15,000,000, prior written notice of
such disposition, the price thereof and the anticipated date of
closing.
(k)
Notice of Casualty
Events
. Prompt written notice, and in any event within three
Business Days, of the occurrence of any Casualty Event or the commencement of
any action or proceeding that could reasonably be expected to result in a
Casualty Event.
(l)
Issuance of Permitted
Refinancing Debt
. In the event the Borrower intends to
refinance any Debt with the proceeds of Permitted Refinancing Debt, prior
written notice of such intended offering therefor, the amount thereof and the
anticipated date of closing to Agent and the Borrower will furnish to Agent a
copy of the preliminary offering memorandum (if any) and the final offering
memorandum (if any).
(m)
Information Regarding
Borrower and Guarantors
. Prompt written notice (and in any
event within thirty (30) days upon becoming aware thereof) of any change
(i) in the Borrower or any Guarantor’s corporate name or in any trade name
used to identify such Person in the conduct of its business or in the ownership
of its Properties, (ii) in the location of the Borrower or any Guarantor’s
chief executive office or principal place of business, (iii) in the
Borrower or any Guarantor’s identity or corporate structure or in the
jurisdiction in which such Person is incorporated or formed, (iv) in the
Borrower or any Guarantor’s jurisdiction of organization or such Person’s
organizational identification number in such jurisdiction of organization, and
(v) in the Borrower or any Guarantor’s federal taxpayer identification
number.
(n)
Other Requested
Information
. Promptly following any request therefor, such
other information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary (including, without limitation, any
Plan or Multiemployer Plan and any reports or other information required to be
filed under ERISA), or compliance with the terms of this Agreement or any other
Loan Document, as the Administrative Agent or any Lender may reasonably
request.
Section
8.02
Notices of Material
Events
. The
Borrower will furnish to the Administrative Agent and each Lender prompt written
notice of the following:
(a)
the
occurrence of any Default;
(b)
the
filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Borrower or any
Affiliate thereof that, if adversely determined, could reasonably be expected to
result in a Material Adverse Effect;
(c)
the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Borrower and its Subsidiaries in an aggregate amount exceeding
$6,000,000; and
(d)
any other
development that results in, or could reasonably be expected to result in, a
Material Adverse Effect.
Each
notice delivered under this Section 8.02 shall be accompanied by a statement of
a Responsible Officer setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto.
Section
8.03
Existence; Conduct of
Business
. The
Borrower will, and will cause each Material Subsidiary to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges and franchises
material to the conduct of its business and maintain, if necessary, its
qualification to do business in each other jurisdiction in which its Oil and Gas
Properties is located or the ownership of its Properties requires such
qualification, except where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect; provided that the foregoing shall
not prohibit any merger, consolidation, liquidation or dissolution permitted
under Section 9.11.
Section
8.04
Payment of
Obligations
. The
Borrower will, and will cause each Material Subsidiary to, pay its obligations,
including Tax liabilities of the Borrower and all of its Subsidiaries before the
same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
the Borrower or such Material Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP and (c) the failure to
make payment pending such contest could not reasonably be expected to result in
a Material Adverse Effect or result in the seizure or levy of any Property of
the Borrower or any Subsidiary having a fair market value, individually or in
the aggregate, in excess of $5,000,000.
Section
8.05
Performance of Obligations
under Loan Documents
. The
Borrower will pay the Notes according to the reading, tenor and effect thereof,
and the Borrower will and will cause each Material Subsidiary to do and perform
every act and discharge all of the obligations to be performed and discharged by
them under the Loan Documents, including, without limitation, this Agreement, at
the time or times and in the manner specified.
Section
8.06
Operation and Maintenance of
Properties
. Except
for matters that could not reasonably be expected to result in a Material
Adverse Effect, the Borrower, at its own expense, will, and will cause each
Material Subsidiary to:
(a)
operate
its Oil and Gas Properties and other material Properties or cause such Oil and
Gas Properties and other material Properties to be operated in a careful and
efficient manner in accordance with the practices of the industry and in
compliance with all applicable contracts and agreements and in compliance with
all Governmental Requirements, including applicable pro ration requirements and
Environmental Laws, and all applicable laws, rules and regulations of every
other Governmental Authority from time to time constituted to regulate the
development and operation of its Oil and Gas Properties and the production and
sale of Hydrocarbons and other minerals therefrom, except, in each case, where
the failure to comply could not reasonably be expected to have a Material
Adverse Effect.
(b)
keep and
maintain all Property material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted, preserve, maintain and
keep in good repair, working order and efficiency (ordinary wear and tear
excepted) all of its material Oil and Gas Properties and other material
Properties, including all equipment, machinery and facilities.
(c)
promptly
pay and discharge, or make reasonable and customary efforts to cause to be paid
and discharged, all delay rentals, royalties, expenses and indebtedness accruing
under the leases or other agreements affecting or pertaining to its Oil and Gas
Properties and will do all other things necessary to keep unimpaired their
rights with respect thereto and prevent any forfeiture thereof or default
thereunder.
(d)
promptly
perform or make reasonable and customary efforts to cause to be performed, in
accordance with industry standards, the obligations required by each and all of
the assignments, deeds, leases, sub-leases, contracts and agreements affecting
its interests in its Oil and Gas Properties and other material
Properties.
(e)
operate
its Oil and Gas Properties and other material Properties or cause or make
reasonable and customary efforts to cause such Oil and Gas Properties and other
material Properties to be operated in accordance with the practices of the
industry and in material compliance with all applicable contracts and agreements
and in compliance in all material respects with all Governmental
Requirements.
(f)
to the
extent the Borrower or a Material Subsidiary is not the operator of any
Property, the Borrower shall use reasonable efforts to cause the operator to
comply with this Section 8.06.
Section
8.07
Insurance
. The
Borrower will, and will cause each Material Subsidiary to, maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar
locations.
Section
8.08
Books and Records;
Inspection Rights
. The
Borrower will, and will cause each Material Subsidiary to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each Material
Subsidiary to, permit any representatives designated by the Administrative Agent
or any Lender, upon reasonable prior notice, to visit and inspect its
Properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably
requested.
Section
8.09
Compliance with
Laws
. The
Borrower will, and will cause each Material Subsidiary to, comply with all laws,
rules, regulations and orders of any Governmental Authority applicable to it or
its Property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
Section
8.10
Environmental
Matters
.
(a)
The
Borrower shall at its sole expense: (i) comply, and shall cause its Properties
and operations and each Subsidiary and each Subsidiary’s Properties and
operations to comply, with all applicable Environmental Laws, the breach of
which could be reasonably expected to have a Material Adverse Effect; (ii) not
dispose of or otherwise release, and shall cause each Subsidiary not to dispose
of or otherwise release, any oil, oil and gas waste, hazardous substance, or
solid waste on, under, about or from any of the Borrower’s or its Subsidiaries’
Properties or any other Property to the extent caused by the Borrower’s or any
of its Subsidiaries’ operations except in compliance with applicable
Environmental Laws, the disposal or release of which could reasonably be
expected to have a Material Adverse Effect; (iii) timely obtain or file, and
shall cause each Subsidiary to timely obtain or file, all notices, permits,
licenses, exemptions, approvals, registrations or other authorizations, if any,
required under applicable Environmental Laws to be obtained or filed in
connection with the operation or use of the Borrower’s or its Subsidiaries’
Properties, which failure to obtain or file could reasonably be expected to have
a Material Adverse Effect; (iv) promptly commence and diligently prosecute to
completion, and shall cause each Subsidiary to promptly commence and diligently
prosecute to completion, any assessment, evaluation, investigation, monitoring,
containment,
cleanup, removal, repair, restoration, remediation or other remedial obligations
(collectively, the “
Remedial Work
”) in
the event any Remedial Work is required or reasonably necessary under applicable
Environmental Laws because of or in connection with the actual or suspected
past, present or future disposal or other release of any oil, oil and gas waste,
hazardous substance or solid waste on, under, about or from any of the
Borrower’s or its Subsidiaries’ Properties, which failure to commence and
diligently prosecute to completion could reasonably be expected to have a
Material Adverse Effect; and (v) establish and implement, and shall cause
each Subsidiary to establish and implement, such procedures as may be necessary
to continuously determine and assure that the Borrower’s and its Subsidiaries’
obligations under this Section 8.10(a) are timely and fully satisfied, which
failure to establish and implement could reasonably be expected to have a
Material Adverse Effect.
(b)
The
Borrower will promptly, but in no event later than five days of the occurrence
of a triggering event, notify the Administrative Agent and the Lenders in
writing of any threatened action, investigation or inquiry by any Governmental
Authority or any threatened demand or lawsuit by any landowner or other third
party against the Borrower or its Subsidiaries or their Properties of which the
Borrower has knowledge in connection with any Environmental Laws (excluding
routine testing and corrective action) if the Borrower reasonably anticipates
that such action will result in liability (whether individually or in the
aggregate) in excess of $10,000,000, not fully covered by insurance, subject to
normal deductibles.
(c)
In
connection with any future acquisitions of Oil and Gas Properties or other
Properties, the Borrower will and will cause each Subsidiary to provide
environmental audits and tests in accordance with American Society of Testing
Materials standards upon request by the Administrative Agent and the Lenders,
except in circumstances in which the Borrower or any Subsidiary is acquiring an
additional interest in an Oil and Gas Property or other Property.
Section
8.11
Further
Assurances
.
(a)
The
Borrower at its expense will, and will cause each Material Subsidiary to,
promptly execute and deliver to the Administrative Agent all such other
documents, agreements and instruments reasonably requested by the Administrative
Agent to comply with, cure any defects or accomplish the conditions precedent,
covenants and agreements of the Borrower or any Material Subsidiary, as the case
may be, in the Loan Documents, including the Notes, or to further evidence and
more fully describe the collateral intended as security for the Indebtedness, or
to correct any omissions in this Agreement or the Security Instruments, or to
state more fully the obligations secured therein, or to perfect, protect or
preserve any Liens created pursuant to this Agreement or any of the Security
Instruments or the priority thereof, or to make any recordings, file any notices
or obtain any consents, all as may be reasonably necessary or appropriate, in
the reasonable discretion of the Administrative Agent, in connection
therewith.
(b)
The
Borrower hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Mortgaged Property without the signature of the Borrower or any
Material Subsidiary where permitted by law. A carbon, photographic or
other reproduction of the Security Instruments
or any
financing statement covering the Mortgaged Property or any part thereof shall be
sufficient as a financing statement where permitted by law. The
Administrative Agent will promptly send the Borrower any financing or
continuation statements it files without the signature of the Borrower or any
other Guarantor and the Administrative Agent will promptly send the Borrower the
filing or recordation information with respect thereto.
Section
8.12
Reserve
Reports
.
(a)
On or
before February 28
th
(or
February 29
th
, as
applicable) and August 31
st
of each
year, commencing August 31, 2009, the Borrower shall furnish to the
Administrative Agent and the Lenders a Reserve Report. The Reserve
Report as of December 31 of each year shall have the majority of PV-10 value
prepared or audited by one or more Approved Petroleum Engineers, and the Reserve
Report as of June 30 of each year shall be prepared by or under the supervision
of the Vice President, Engineering and Evaluation of the Borrower who shall
certify such Reserve Report to be true and accurate and to have been prepared in
accordance with the procedures used in the immediately preceding December 31
Reserve Report.
(b)
In the
event of an Interim Redetermination, the Borrower shall furnish to the
Administrative Agent and the Lenders a Reserve Report prepared by or under the
supervision of the Vice President, Engineering and Evaluation of the Borrower
who shall certify such Reserve Report to be true and accurate and to have been
prepared in accordance with the procedures used in the immediately preceding
December 31 Reserve Report. For any Interim Redetermination requested
by the Administrative Agent or the Borrower pursuant to Section 2.07(b), the
Borrower shall provide such Reserve Report with an “as of” date as required by
the Administrative Agent as soon as possible, but in any event no later than
thirty (30) days following the receipt of such request.
(c)
With the
delivery of each Reserve Report, the Borrower shall provide to the
Administrative Agent and the Lenders a certificate from a Responsible Officer
certifying that in all material respects: (i) the information contained in the
Reserve Report and any other information delivered in connection therewith is
true and correct, (ii) the Borrower or its Material Subsidiaries owns good and
defensible title to the Oil and Gas Properties evaluated in such Reserve Report
and such Properties are free of all Liens except for Liens permitted by Section
9.03, (iii) except as set forth on an exhibit to the certificate, on a net basis
there are no gas imbalances, take or pay or other prepayments in excess of the
volume specified in Section 7.19 with respect to its Oil and Gas Properties
evaluated in such Reserve Report which would require the Borrower or any
Material Subsidiary to deliver Hydrocarbons either generally or produced from
such Oil and Gas Properties at some future time without then or thereafter
receiving full payment therefor, (iv) none of their Oil and Gas Properties have
been sold since the date of the last Borrowing Base determination except as set
forth on an exhibit to the certificate, which certificate shall list all of its
Oil and Gas Properties sold and in such detail as reasonably required by the
Administrative Agent, (v) attached to the certificate is a list of all marketing
agreements entered into subsequent to the later of the date hereof or the most
recently delivered Reserve Report which the Borrower could reasonably be
expected to have been obligated to list on Schedule 7.20 had such agreement been
in effect on the date hereof and (vi) attached thereto is a schedule of the Oil
and Gas Properties evaluated by such Reserve Report
that are
Mortgaged Properties and demonstrating the percentage of the Borrowing Base that
the value of such Mortgaged Properties represent.
Section
8.13
Title
Information
.
(a)
On or
before the delivery to the Administrative Agent and the Lenders of each Reserve
Report required by Section 8.12(a), the Borrower will deliver title information
in form and substance acceptable to the Administrative Agent covering enough of
the Oil and Gas Properties evaluated by such Reserve Report that were not
included in the immediately preceding Reserve Report, so that the Administrative
Agent shall have received together with title information previously delivered
to the Administrative Agent, satisfactory title information on at least 80% of
the total value of the Oil and Gas Properties evaluated by such Reserve
Report.
(b)
If the
Borrower has provided title information for additional Properties under Section
8.13(a), the Borrower shall, within 60 days of notice from the Administrative
Agent that title defects or exceptions exist with respect to such additional
Properties, either (i) cure any such title defects or exceptions (including
defects or exceptions as to priority) which are not permitted by Section 9.03
raised by such information, (ii) substitute acceptable Mortgaged Properties with
no title defects or exceptions except for Excepted Liens (other than Excepted
Liens described in clauses (e), (g) and (h) of such definition) having an
equivalent value or (iii) deliver title information in form and substance
acceptable to the Administrative Agent so that the Administrative Agent shall
have received, together with title information previously delivered to the
Administrative Agent, satisfactory title information on at least 80% of the
value of the Mortgaged Properties evaluated by such Reserve Report.
(c)
If the
Borrower is unable to cure any title defect requested by the Administrative
Agent or the Lenders to be cured within the 60-day period or the Borrower does
not comply with the requirements to provide acceptable title information
covering 80% of the value of the Mortgaged Properties evaluated in the most
recent Reserve Report, such default shall not be a Default, but instead the
Administrative Agent and/or the Majority Lenders shall have the right to
exercise the following remedy in their sole discretion from time to time, and
any failure to so exercise this remedy at any time shall not be a waiver as to
future exercise of the remedy by the Administrative Agent or the
Lenders. To the extent that the Administrative Agent or the Majority
Lenders are not satisfied with title to any Mortgaged Property after the 60-day
period has elapsed, such unacceptable Mortgaged Property shall not count towards
the 80% requirement, and the Administrative Agent may send a notice to the
Borrower and the Lenders that the then outstanding Borrowing Base shall be
reduced by an amount as determined by the Majority Lenders to cause the Borrower
to be in compliance with the requirement to provide acceptable title information
on 80% of the value of the Mortgaged Properties. This new Borrowing
Base shall become effective immediately after receipt of such
notice.
Section
8.14
Additional Collateral;
Additional Guarantors
.
(a)
In
connection with each redetermination of the Borrowing Base, the Borrower shall
review the Reserve Report and the list of current Mortgaged Properties (as
described in Section 8.12(c)(vi)) to ascertain whether the Mortgaged Properties
represent at least
80% of
the total value of the Oil and Gas Properties evaluated in the most recently
completed Reserve Report after giving effect to exploration and production
activities, acquisitions, dispositions and production. In the event
that the Mortgaged Properties do not represent at least 80% of such total value,
then the Borrower shall, and shall cause its Material Subsidiaries to, grant to
the Administrative Agent as security for the Indebtedness a first-priority Lien
interest (subject only to Excepted Liens of the type described in clauses (a) to
(d) and (f) of the definition thereof, but subject to the provisos at the end of
such definition) on additional Oil and Gas Properties not already subject to a
Lien of the Security Instruments such that after giving effect thereto, the
Mortgaged Properties will represent at least 80% of such total
value. All such Liens will be created and perfected by and in
accordance with the provisions of deeds of trust, security agreements and
financing statements or other Security Instruments, all in form and substance
reasonably satisfactory to the Administrative Agent and in sufficient executed
(and acknowledged where necessary or appropriate) counterparts for recording
purposes. In order to comply with the foregoing, if any Material
Subsidiary places a Lien on its Oil and Gas Properties and such Material
Subsidiary is not a Guarantor, then it shall become a Guarantor and comply with
Section 8.14(b).
(b)
In the
event that any Subsidiary becomes a Material Subsidiary after the Closing Date,
the Borrower shall promptly cause such Subsidiary to guarantee the Indebtedness
pursuant to the Guaranty Agreement. In connection with any such
guaranty, the Borrower shall, or shall cause such Subsidiary to, (A) execute and
deliver a supplement to the Guaranty Agreement executed by such Subsidiary, (B)
execute and deliver a Pledge – Borrower, pledging all of the Equity Interests of
such new Subsidiary (including, without limitation, delivery of original stock
certificates evidencing the Equity Interests of such Subsidiary, together with
an appropriate undated stock powers for each certificate duly executed in blank
by the registered owner thereof) and (C) execute and deliver such other
additional closing documents, certificates and legal opinions as shall
reasonably be requested by the Administrative Agent.
Section
8.15
ERISA
Compliance
. The
Borrower will promptly furnish and will cause the Subsidiaries and any ERISA
Affiliate to promptly furnish to the Administrative Agent (i) promptly after the
filing thereof with the United States Secretary of Labor, the Internal Revenue
Service or the PBGC, copies of each annual and other report with respect to each
Plan or any trust created thereunder, (ii) immediately upon becoming aware of
the occurrence of any ERISA Event or of any “prohibited transaction,” as
described in section 406 of ERISA or in section 4975 of the Code, in connection
with any Plan or any trust created thereunder, a written notice signed by the
President or the principal Financial Officer, the Subsidiary or the ERISA
Affiliate, as the case may be, specifying the nature thereof, what action the
Borrower, the Subsidiary or the ERISA Affiliate is taking or proposes to take
with respect thereto, and, when known, any action taken or proposed by the
Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto, and (iii) immediately upon receipt thereof, copies of any notice of the
PBGC’s intention to terminate or to have a trustee appointed to administer any
Plan. With respect to each Plan (other than a Multiemployer Plan),
the Borrower will, and will cause each Subsidiary and ERISA Affiliate to, (i)
satisfy in full and in a timely manner, without incurring any late payment or
underpayment charge or penalty and without giving rise to any lien, all of the
contribution and funding requirements of section 412 of the Code (determined
without regard to subsections (d), (e), (f) and (k) thereof) and of section 302
of ERISA (determined without regard to sections 303, 304 and 306 of ERISA), and
(ii) pay, or cause to be paid, to the PBGC in a timely manner,
without
incurring any late payment or underpayment charge or penalty, all premiums
required pursuant to sections 4006 and 4007 of ERISA.
Section
8.16
Performance of Material
Agreements
. The
Borrower will perform and observe, and cause each Material Subsidiary to perform
and observe, in all material respects each of the provisions of the Material
Agreements to which it is a party on its part to be performed or observed prior
to the termination thereof.
ARTICLE
IX
Negative
Covenants
Until the
Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder and all other amounts payable under the Loan
Documents have been paid in full and all Letters of Credit have expired or
terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:
Section
9.01
Financial
Covenants
.
(a)
Ratio of Total Debt to
EBITDA
. The Borrower will not, at any time, permit its ratio
of Total Debt as of such time to EBITDA for the four fiscal quarters ending on
the last day of the fiscal quarter immediately preceding the date of
determination for which financial statements are available to be greater than
3.5 to 1.0. For purposes of calculating the ratio of Total Debt to
EBITDA for any four fiscal quarter period, dispositions of Oil and Gas
Properties in excess of $50,000,000 in the aggregate during such four fiscal
quarter period shall be included on a pro forma basis, as if such dispositions
had occurred at the beginning of the four fiscal quarter period and the Borrower
may provide pro forma calculations on the same basis with respect to
acquisitions of Oil and Gas Properties during any such four fiscal quarter
period at the Borrower’s election. Unless an Event of Default has
occurred and is continuing, for purposes of determining the ratio of Total Debt
to EBITDA as of any date of determination, the calculation of Total Debt shall
be made by subtracting therefrom an aggregate amount of cash on deposit in any
cash collateral account as of such date as a result of the existence of any
Impacted Lender.
(b)
Current
Ratio
. The Borrower will not permit, as of the last day of any
fiscal quarter, its ratio of (i) consolidated current assets (including the
unused amount of the total Commitments, but excluding non-cash assets under FAS
133) to (ii) consolidated current liabilities (excluding non-cash obligations
under FAS 133 and the current portion of the Aggregate Commitment) to be less
than 1.0 to 1.0. Unless an Event of Default has occurred and is
continuing, for purposes of determining the ratio of consolidated current assets
to consolidated current liabilities the calculation of consolidated current
liabilities shall be made by subtracting therefrom the aggregate cash on deposit
in any cash collateral account as of such date as a result of the existence of
any Impacted Lender.
Section
9.02
Debt
. Neither
the Borrower nor any Material Subsidiary will incur, create, assume or suffer to
exist any Debt, except:
(a)
the Notes
or other Indebtedness arising under the Loan Documents or any guaranty of or
suretyship arrangement for the Notes or other Indebtedness arising under the
Loan Documents.
(b)
Debt of
the Borrower and its Material Subsidiaries existing on the date hereof that is
reflected in the Financial Statements, and any Permitted Refinancing Debt in
respect thereof.
(c)
accounts
payable (for the deferred purchase price of Property or services) from time to
time incurred in the ordinary course of business which are not greater than
sixty (60) days past the date of invoice or delinquent or which are being
contested in good faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP.
(d)
Debt
incurred to finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital Leases and any Debt assumed in connection with
the acquisition of any such assets or secured by a Lien on any such assets prior
to the acquisition thereof, and extensions, renewals and replacements of any
such Debt that do not increase the outstanding principal amount thereof;
provided
that
(i) in the case of any acquisition, construction or improvement of any
fixed or capital asset, such Debt (other than Capital Leases) is incurred prior
to or within 90 days after such acquisition or the completion of such
construction or improvement and (ii) the aggregate principal amount of Debt
permitted by this clause (d) shall not exceed $50,000,000 at any time
outstanding.
(e)
Debt
associated with bonds or surety obligations required by Governmental
Requirements in connection with the operation of the Oil and Gas
Properties.
(f)
intercompany
Debt between the Borrower and any Material Subsidiary or between Material
Subsidiaries to the extent permitted by Section 9.05(g); provided that such Debt
is not held, assigned, transferred, negotiated or pledged to any Person other
than the Borrower or one of its Wholly-Owned Subsidiaries, and, provided
further, that any such Debt owed by either the Borrower or a Guarantor shall be
subordinated to the Indebtedness on terms set forth in the Guaranty
Agreement.
(g)
endorsements
of negotiable instruments for collection in the ordinary course of
business.
(h)
non-recourse
Debt secured by Property other than Oil and Gas Properties evaluated by the
Lenders for purposes of establishing the Borrowing Base not to exceed
$25,000,000 in the aggregate at any one time outstanding.
(i)
other
Debt not to exceed $15,000,000 in the aggregate at any one time
outstanding.
(j)
Debt of
the Borrower
evidenced by the Senior
Convertible Notes, together with any and all refinancings thereof, so long as
all of same are either unsecured or expressly subordinated to this Agreement and
all of same are scheduled to mature after the Maturity Date under this
Agreement.
(k)
unsecured
senior Debt or subordinated Debt of the Borrower
maturing (giving effect
to mandatory prepayments) no earlier than at least six months after the Maturity
Date under this Agreement; provided that effective immediately upon the issuance
of any such unsecured senior Debt or subordinated Debt, the Borrowing Base shall
be reduced by an amount equal to twenty-five percent (25%) of the aggregate
principal amount of such Debt.
Section
9.03
Liens
. Neither
the Borrower nor any Material Subsidiary will create, incur, assume or permit to
exist any Lien on any of its Properties (now owned or hereafter acquired),
except:
(a)
Liens
securing the payment of any Indebtedness.
(b)
Excepted
Liens.
(c)
Liens
securing Capital Leases permitted by Section 9.02(d) but only on the Property
under lease.
(d)
Liens
securing any Permitted Refinancing Debt provided that any such Permitted
Refinancing Debt is not secured by any additional or different Property not
securing the Refinanced Debt.
(e)
Liens on
Property securing non-recourse Debt permitted by Section 9.02(h).
Section
9.04
Dividends, Distributions and
Redemptions
. The
Borrower will not, and will not permit any of its Subsidiaries to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
return any capital to its stockholders or make any distribution of its Property
to its Equity Interest holders, except (a) the Borrower may declare and pay
dividends with respect to its Equity Interests payable solely in additional
shares of its common stock (other than Disqualified Capital Stock), (b) so long
as no Event of Default shall have occurred which is continuing, the Borrower may
declare and pay annual cash dividends not to exceed $0.25 per common share on an
annual basis, (c) Subsidiaries may declare and pay dividends ratably with
respect to their Equity Interests, (d) the Borrower may make Restricted Payments
pursuant to and in accordance with restricted stock plans, stock option plans or
other benefit plans for management or employees of the Borrower and its
Subsidiaries and (e) the Borrower may make interest payments and principal
payments on any and all issued and sold Senior Convertible Notes and deliver
cash, stock, or any combination thereof upon payment, settlement upon conversion
(whether a general or a net share settlement), or redemption of any and all
issued and sold Senior Convertible Notes so long as (i) all such cash payments,
settlements upon conversions, and redemptions are in accordance with the terms
of the Senior Convertible Notes indenture, (ii) no Default shall exist or be
occasioned by such payments, settlements upon conversions, or redemptions, and
(iii) with respect to any such cash redemptions of such Senior Convertible Notes
on the put date occurring on April 1, 2012, after giving effect to such cash
redemptions (x) the availability under this Agreement shall be no less than the
lesser of (1) 10% of the Borrowing Base or (2) $75,000,000 and (y) both before
and after giving effect to such cash redemptions, the Borrower’s ratio of Total
Debt to EBITDA for the four fiscal quarters ending on the last day of the fiscal
quarter immediately preceding the date
of
determination for which financial statements are available is not greater than
3.25 to 1.0. The calculation of Total Debt to EBITDA under Section
9.04(e) shall be made in accordance with the provisions of Section
9.01(a).
Section
9.05
Investments, Loans and
Advances
. Neither
the Borrower nor any Material Subsidiary will make or permit to remain
outstanding any Investments in or to any Person, except that the foregoing
restriction shall not apply to:
(a)
Investments
reflected in the Financial Statements or which are disclosed to the Lenders in
Schedule 9.05(a).
(b)
accounts
receivable arising in the ordinary course of business.
(c)
direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, in each case maturing
within one year from the date of creation thereof.
(d)
commercial
paper maturing within one year from the date of creation thereof rated in the
highest grade by S&P or Moody’s.
(e)
deposits
maturing within one year from the date of creation thereof with, including
certificates of deposit issued by, any Lender or any office located in the
United States of any other bank or trust company which is organized under the
laws of the United States or any state thereof, has capital, surplus and
undivided profits aggregating at least $100,000,000 (as of the date of such bank
or trust company’s most recent financial reports) and has a short term deposit
rating of no lower than A2 or P2, as such rating is set forth from time to time,
by S&P or Moody’s, respectively or, in the case of any Foreign Subsidiary, a
bank organized in a jurisdiction in which the Foreign Subsidiary conducts
operations having assets in excess of $500,000,000 (or its equivalent in another
currency).
(f)
deposits
in money market funds investing exclusively in Investments described in Section
9.05(c), Section 9.05(d) or Section 9.05(e).
(g)
Investments
(i) made by the Borrower in or to the Guarantors, and (ii) made by a Guarantor
in or to the Borrower or any other Guarantor.
(h)
subject
to the limits in Section 9.07, Investments (including, without limitation,
capital contributions) in general or limited partnerships or other types of
entities (each a “
venture
”) entered
into by the Borrower or a Material Subsidiary with others in the ordinary course
of business; provided that (i) any such venture is engaged exclusively in oil
and gas exploration, development, production, processing and related activities,
including transportation, except for existing Investments described or referred
to on Schedule 9.05(h) and Investments permitted by Section 9.05(i), (ii) the
interest in such venture is acquired in the ordinary course of business and on
fair and reasonable terms and (iii) such venture interests acquired and capital
contributions made (valued as of the date such interest was acquired or the
contribution made) do not exceed, in the aggregate at any time outstanding an
amount equal to $75,000,000.
(i)
subject
to the limits in Section 9.07, additional Investments (including, without
limitation, capital contributions) in the ventures described or referred to on
Schedule 9.05(h) and new Investments (including, without limitation, capital
contributions) in ventures entered into by the Borrower or a Material Subsidiary
with others in the ordinary course of business; provided that (i) any such
venture is not engaged exclusively in oil and gas exploration, development,
production, processing and related activities, including transportation, (ii)
the interest in such venture is acquired in the ordinary course of business and
on fair and reasonable terms and (iii) such venture interests acquired and
capital contributions made (valued as of the date such interest was acquired or
the contribution made) do not exceed, in the aggregate at any time outstanding
an amount equal to $20,000,000.
(j)
subject
to the limits in Section 9.07, Investments in direct ownership interests in
additional Oil and Gas Properties and gas gathering systems related thereto or
related to farm-out, farm-in, joint operating, joint venture or area of mutual
interest agreements, gathering systems, pipelines or other similar arrangements
which are usual and customary in the oil and gas exploration and production
business located within the geographic boundaries of the United States of
America.
(k)
so long
as no Event of Default shall have occurred which is continuing, from and after
the date hereof, the Borrower may make repurchases of its stock; provided,
however, during any time the Borrower’s ratio of Total Debt to consolidated
tangible net worth is greater than 2.50 to 1.00, the aggregate amount paid by
the Borrower in connection with such repurchases shall not exceed
$50,000,000.
Section
9.06
Designation of Material
Subsidiaries
. Unless
designated as a Non-Material Subsidiary on Schedule 7.15 as of the date hereof
or thereafter, assuming compliance with Section 9.15, any Person that becomes a
Subsidiary of the Borrower or any of its Material Subsidiaries shall be
classified as a Material Subsidiary.
Section
9.07
Nature of Business;
International Operations
. Neither
the Borrower nor any Material Subsidiary will allow any material change to be
made in the character of its business as an independent oil and gas exploration
and production company. From and after the date hereof, the Borrower
and its Subsidiaries will not acquire or make any other expenditure (whether
such expenditure is capital, operating or otherwise) in or related to, any Oil
and Gas Properties not located within the geographical boundaries of the United
States or Canada in excess of $10,000,000 in the aggregate.
Section
9.08
Proceeds of
Notes
. The
Borrower will not permit the proceeds of the Notes to be used for any purpose
other than those permitted by Section 7.22. Neither the Borrower nor
any Person acting on behalf of the Borrower has taken or will take any action
which might cause any of the Loan Documents to violate Regulations U or X or any
other regulation of the Board or to violate Section 7 of the Securities Exchange
Act of 1934 or any rule or regulation thereunder, in each case as now in effect
or as the same may hereinafter be in effect. If requested by the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 or such other form referred to in Regulation U or
Regulation X of the Board, as the case may be.
Section
9.09
ERISA
Compliance
. The
Borrower and the Subsidiaries will not at any time:
(a)
engage
in, or permit any ERISA Affiliate to engage in, any transaction in connection
with which the Borrower, a Subsidiary or any ERISA Affiliate could be subjected
to either a civil penalty assessed pursuant to subsections (c), (i) or (l) of
section 502 of ERISA or a tax imposed by Chapter 43 of Subtitle D of
the Code.
(b)
terminate,
or permit any ERISA Affiliate to terminate, any Plan in a manner, or take any
other action with respect to any Plan, which could result in any liability of
the Borrower, a Subsidiary or any ERISA Affiliate to the PBGC.
(c)
fail to
make, or permit any ERISA Affiliate to fail to make, full payment when due of
all amounts which, under the provisions of any Plan, agreement relating thereto
or applicable law, the Borrower, a Subsidiary or any ERISA Affiliate is required
to pay as contributions thereto.
(d)
permit to
exist, or allow any ERISA Affiliate to permit to exist, any accumulated funding
deficiency within the meaning of section 302 of ERISA or section 412 of the
Code, whether or not waived, with respect to any Plan.
(e)
permit,
or allow any ERISA Affiliate to permit, the actuarial present value of the
benefit liabilities under any Plan maintained by the Borrower, a Subsidiary or
any ERISA Affiliate which is regulated under Title IV of ERISA to exceed
the current value of the assets (computed on a plan termination basis in
accordance with Title IV of ERISA) of such Plan allocable to such benefit
liabilities. The term “actuarial present value of the benefit
liabilities” shall have the meaning specified in section 4041 of
ERISA.
(f)
contribute
to or assume an obligation to contribute to, or permit any ERISA Affiliate to
contribute to or assume an obligation to contribute to, any Multiemployer
Plan.
(g)
acquire,
or permit any ERISA Affiliate to acquire, an interest in any Person that causes
such Person to become an ERISA Affiliate with respect to the Borrower or a
Subsidiary or with respect to any ERISA Affiliate of the Borrower or a
Subsidiary if such Person sponsors, maintains or contributes to, or at any time
in the six-year period preceding such acquisition has sponsored, maintained, or
contributed to, (1) any Multiemployer Plan, or (2) any other Plan that is
subject to Title IV of ERISA under which the actuarial present value of the
benefit liabilities under such Plan exceeds the current value of the assets
(computed on a plan termination basis in accordance with Title IV of ERISA)
of such Plan allocable to such benefit liabilities.
(h)
incur, or
permit any ERISA Affiliate to incur, a liability to or on account of a Plan
under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA.
(i)
contribute
to or assume an obligation to contribute to, or permit any ERISA Affiliate to
contribute to or assume an obligation to contribute to, any employee welfare
benefit plan, as defined in section 3(1) of ERISA, including, without
limitation, any such plan
maintained
to provide benefits to former employees of such entities, that may not be
terminated by such entities in their sole discretion at any time without any
material liability.
(j)
amend, or
permit any ERISA Affiliate to amend, a Plan resulting in an increase in current
liability such that the Borrower, a Subsidiary or any ERISA Affiliate is
required to provide security to such Plan under section 401(a)(29) of the
Code.
Section
9.10
Sale or Discount of
Receivables
. Except
for receivables obtained by the Borrower or any Material Subsidiary out of the
ordinary course of business or the settlement of joint interest billing accounts
in the ordinary course of business or discounts granted to settle collection of
accounts receivable or the sale of defaulted accounts arising in the ordinary
course of business in connection with the compromise or collection thereof and
not in connection with any financing transaction, neither the Borrower nor any
Material Subsidiary will discount or sell (with or without recourse) any of its
notes receivable or accounts receivable.
Section
9.11
Mergers,
Etc
. Neither
the Borrower nor any Material Subsidiary will merge into or with or consolidate
with any other Person, or sell, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
Property to any other Person (any such transaction, a “
consolidation
”);
provided that
(a)
the
Borrower or any Material Subsidiary may participate in a consolidation with any
other Person; provided that (i) no Default is continuing, (ii) any such
consolidation would not cause a Default hereunder, (iii) if the Borrower
consolidates with any Person, the Borrower shall be the surviving Person, (iv)
if any Material Subsidiary consolidates with any Person (other than the Borrower
or a Material Subsidiary) and such Material Subsidiary is not the surviving
Person, such surviving Person shall expressly assume in writing (in form and
substance satisfactory to the Administrative Agent) all obligations of such
Material Subsidiary under the Loan Documents and (v) the Borrowing Base will be
redetermined using the procedures for an Interim Redetermination in accordance
with Section 2.07; and
(b)
any
Material Subsidiary may participate in a consolidation with the Borrower
(provided that the Borrower shall be the continuing or surviving corporation) or
any other Material Subsidiary and if one of such Material Subsidiaries is a
Wholly-Owned Subsidiary, then the surviving Person shall be a Wholly-Owned
Subsidiary.
Section
9.12
Sale of
Properties
. The
Borrower will not, and will not permit any Material Subsidiary to, sell, assign,
farm-out, convey or otherwise transfer any Property except for (a) the sale of
Hydrocarbons in the ordinary course of business; (b) farmouts of undeveloped
acreage and assignments in connection with such farmouts; (c) the sale or
transfer of equipment that is no longer necessary for the business of the
Borrower or such Material Subsidiary or is replaced by equipment of at least
comparable value and use; (d) the sale, transfer or other disposition of Equity
Interests in non-Material Subsidiaries; (e) sales or other dispositions of Oil
and Gas Properties or any interest therein or Material Subsidiaries owning Oil
and Gas Properties; provided that (i) if such sales or other dispositions of Oil
and Gas Properties or Material Subsidiaries owning Oil and Gas Properties
included in the most recently delivered Reserve Report during any period between
two successive Scheduled Redetermination Dates has a fair market value in excess
of seven and a half percent (7.5%) of the Borrowing Base,
individually
or in the aggregate, the Borrowing Base shall be reduced, effective immediately
upon such sale or disposition, by an amount equal to the value, if any, assigned
such Property in the most recently delivered Reserve Report and (ii) if any such
sale or other disposition is of a Material Subsidiary owning Oil and Gas
Properties, such sale or other disposition shall include all the Equity
Interests of such Material Subsidiary; and (f) sales and other dispositions of
Properties (other than Oil and Gas Properties) not regulated by Sections 9.12(a)
to (e) having a fair market value not to exceed $30,000,000 during any 12-month
period.
Section
9.13
Environmental
Matters
. Neither
the Borrower nor any Material Subsidiary will cause or permit any of its
Property to be in violation of, or do anything or permit anything to be done
which will subject any such Property to any Remedial Work under any
Environmental Laws, assuming disclosure to the applicable Governmental Authority
of all relevant facts, conditions and circumstances, if any, pertaining to such
Property where such violations or remedial obligations could reasonably be
expected to have a Material Adverse Effect.
Section
9.14
Transactions with
Affiliates
. Neither
the Borrower nor any Material Subsidiary will enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of Property
or the rendering of any service, with any Affiliate (other than the Guarantors
and Wholly-Owned Subsidiaries of the Borrower) unless such transactions are
otherwise permitted under this Agreement and are upon fair and reasonable terms
no less favorable to it than it would obtain in a comparable arm’s length
transaction with a Person not an Affiliate.
Section
9.15
Subsidiaries
. The
Borrower shall not, and shall not permit any Material Subsidiary to, create or
acquire any additional Material Subsidiary or redesignate a Subsidiary as a
Material Subsidiary unless the Borrower gives written notice to the
Administrative Agent of such creation or acquisition and complies with Section
8.14(b). The Borrower shall not, and shall not permit any Material
Subsidiary to, sell, assign or otherwise dispose of any Equity Interests in any
Material Subsidiary except in compliance with Section 9.12(e).
Section
9.16
Negative Pledge Agreements;
Dividend Restrictions
. Neither
the Borrower nor any Material Subsidiary will create, incur, assume or suffer to
exist any contract, agreement or understanding (other than this Agreement, the
Security Instruments or Capital Leases creating Liens permitted by Section
9.03(c)) which in any way prohibits or restricts the granting, conveying,
creation or imposition of any Lien on any of its Property in favor of the
Administrative Agent and the Lenders or restricts any Material Subsidiary from
paying dividends or making distributions to the Borrower or any Guarantor, or
which requires the consent of or notice to other Persons in connection
therewith.
Section
9.17
Gas Imbalances, Take-or-Pay
or Other Prepayments
. The
Borrower will not allow (on a net basis) gas imbalances, take-or-pay or other
prepayments with respect to the Oil and Gas Properties of the Borrower or any
Material Subsidiary that would require the Borrower or such Material Subsidiary
to deliver Hydrocarbons at some future time without then or thereafter receiving
full payment therefor to exceed three million mcf of gas (on an mcfe equivalent
basis) in the aggregate.
Section
9.18
Swap
Agreements
. Neither
the Borrower nor any Material Subsidiary will enter into any Swap Agreements
with any Person other than (a) Swap Agreements in respect of commodities (i)
with an Approved Counterparty and (ii) the notional volumes for which (when
aggregated with other commodity Swap Agreements then in effect) do not exceed,
as of the date such Swap Agreement is executed, 75% of the reasonably
anticipated projected production from proved, developed, producing Oil and Gas
Properties for each month during the period during which such Swap Agreement is
in effect, (b) Swap Agreements effectively converting interest rates from
floating to fixed (i) with an Approved Counterparty and (ii) the notional
amounts of which (when aggregated with other interest rate Swap Agreements then
in effect effectively converting interest rates from floating to fixed) do not
exceed 100% of principal amount of the Borrower’s floating rate Debt in respect
of borrowed money, (c) Swap Agreements effectively converting interest rates
from fixed to floating (i) with an Approved Counterparty and (ii) the notional
amounts of which (when aggregated with other interest rate Swap Agreements then
in effect effectively converting interest rates from fixed to floating) do not
exceed 100% of principal amount of the Borrower's fixed rate Debt in respect of
borrowed money (including, without limitation, the Borrower's Senior Convertible
Notes), and (d) Swap Agreements in respect of currencies (i) with an Approved
Counterparty, (ii) such transactions are to hedge actual or expected
fluctuations in currencies and are not for speculative purposes and (iii) such
transactions do not involve termination or expiry dates longer than six (6)
months after the trade date in respect thereof. In no event shall any
Swap Agreement contain any requirement, agreement or covenant for the Borrower
or any Material Subsidiary to post collateral or margin to secure their
obligations under such Swap Agreement or to cover market exposures other than
usual and customary requirements to deliver letters of credit or post cash
collateral.
Section
9.19
Preservation of Material
Agreements
. Except
for acts which could not reasonably be expected to have a Material Adverse
Effect or which are taken in the ordinary course of business, neither the
Borrower nor any Material Subsidiary, as the case may be, will agree to any
change, modification or amendment to or waiver of any of the terms or provisions
of any of the Material Agreements. Neither the Borrower nor any
Material Subsidiary, as the case may be, will take any action or permit any
action to be taken by others which will release any Person from its obligations
or liabilities under any of the Material Agreements.
Section
9.20
Release of
Liens
. During
any period between two successive Scheduled Redetermination Dates, the Borrower
shall be entitled to cause Mortgaged Properties having an aggregate fair market
value not to exceed seven and a half percent (7.5%) of the Borrowing Base,
individually or in the aggregate, to be released from the Liens created by and
existing under the Security Instruments without the consent of the Lenders;
provided that (a) no Event of Default shall have occurred which is continuing,
(b) following any such release, the total value of the remaining Mortgaged
Property shall be sufficient to support the Aggregate Commitment in the sole
opinion of the Administrative Agent, and (c) following any such release, the
Administrative Agent shall adjust the then current Borrowing Base to take into
account the release of such Mortgaged Properties and any mandatory prepayment
required as a result thereof shall be made at the time of such
release.
ARTICLE
X
Events of
Default; Remedies
Section
10.01
Events of
Default
. One
or more of the following events shall constitute an “
Event of
Default
”:
(a)
the
Borrower shall fail to pay any principal of any Loan or any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof, by acceleration or otherwise.
(b)
the
Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in Section 10.01(a)) payable under any
Loan Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three Business
Days.
(c)
any
representation or warranty made or deemed made by or on behalf of the Borrower
or any Material Subsidiary in or in connection with any Loan Document or any
amendment or modification of any Loan Document or waiver under such Loan
Document, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with any Loan Document or any amendment
or modification thereof or waiver thereunder, shall prove to have been incorrect
in any respect material to the Borrower’s creditworthiness or to the rights or
interests of the Lenders when made or deemed made.
(d)
the
Borrower or any Material Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in Section 8.02, Section 8.03 or in
ARTICLE IX.
(e)
the
Borrower or any Material Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than those
specified in Section 10.01(a), Section 10.01(b) or Section 10.01(d)) or any
other Loan Document, and such failure shall continue unremedied for a period of
30 days after the earlier to occur of (A) notice thereof from the Administrative
Agent to the Borrower (which notice will be given at the request of any Lender)
or (B) a Responsible Officer of the Borrower or such Material Subsidiary
otherwise becoming aware of such default.
(f)
the
Borrower or any Material Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable (subject to
applicable grace periods), unless such payment is being contested in good faith
and by proper proceedings and against which adequate reserves are being
maintained.
(g)
any event
or condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the giving
of notice, the lapse of time or both) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any
Material Indebtedness to become due, or to require the Redemption thereof or any
offer to Redeem to be made in respect thereof, prior to its scheduled maturity
or require the Borrower or any Material Subsidiary to make an offer in
respect
thereof; provided, however, early termination of a Swap Agreement (that is
Material Indebtedness) due solely to an ISDA “Termination Event” is not an Event
of Default hereunder.
(h)
an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the
Borrower or any Material Subsidiary or its debts, or of a substantial part of
its assets, under any Debtor Relief Laws or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
the Borrower or any Material Subsidiary or for a substantial part of its assets,
and, in any such case, such proceeding or petition shall continue undismissed
for 30 days or an order or decree approving or ordering any of the foregoing
shall be entered.
(i)
the
Borrower or any Material Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Debtor Relief Laws, (ii) consent to the institution of, or fail
to contest in a timely and appropriate manner, any proceeding or petition
described in Section 10.01(h), (iii) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Material Subsidiary or for a substantial part of its
assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing.
(j)
the
Borrower or any Material Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due.
(k)
one or
more judgments for the payment of money in an aggregate amount in excess of
$
15,000,000
(to the extent not covered by independent third party insurance provided by
insurers of the highest claims paying rating or financial strength as to which
the insurer does not dispute coverage and is not subject to an insolvency
proceeding) shall be rendered against the Borrower, any Material Subsidiary or
any combination thereof and the same shall remain undischarged for a period of
30 consecutive days and for which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of the Borrower or any Material Subsidiary to enforce any such
judgment.
(l)
the Loan
Documents after delivery thereof shall for any reason, except to the extent
permitted by the terms thereof, cease to be in full force and effect and valid,
binding and enforceable in accordance with their terms against the Borrower or a
Guarantor party thereto or shall be repudiated by any of them, or cease to
create a valid and perfected Lien of the priority required thereby on any of the
collateral purported to be covered thereby, except to the extent permitted by
the terms of this Agreement, or the Borrower or any Guarantor or any of their
Affiliates shall so state in writing.
(m)
an
ERISA Event shall have occurred that, in the opinion of the Majority Lenders,
when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in a Material Adverse Effect.
(n)
a Change
in Control shall occur.
(o)
the
Borrower shall fail to pay any mandatory prepayment or provide additional
collateral as provided in Section 3.04(c)
Section
10.02
Remedies
.
(a)
In the
case of an Event of Default other than one described in Section 10.01(h),
Section 10.01(i) or Section 10.01(j), at any time thereafter during the
continuance of such Event of Default, the Administrative Agent may, and at the
request of the Majority Lenders, shall, by notice to the Borrower, take either
or both of the following actions, at the same or different times: (i)
terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Notes and the Loans then outstanding to be due
and payable in whole (or in part, in which case any principal not so declared to
be due and payable may thereafter be declared to be due and payable), and
thereupon the principal of the Loans so declared to be due and payable, together
with accrued interest thereon and all fees and other obligations of the Borrower
and the Guarantors accrued hereunder and under the Notes and the other Loan
Documents (including, without limitation, the payment of cash collateral to
secure the LC Exposure as provided in Section 2.08(k)), shall become due and
payable immediately, without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration or other notice of any kind, all of which are
hereby waived by the Borrower and each Guarantor; and in case of an Event of
Default described in Section 10.01(h), Section 10.01(i) or Section
10.01(j), the Commitments shall automatically terminate and the Notes and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and the other obligations of the Borrower and the Guarantors
accrued hereunder and under the Notes and the other Loan Documents (including,
without limitation, the payment of cash collateral to secure the LC Exposure as
provided in Section 2.08(k)), shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower and each Guarantor.
(b)
In the
case of the occurrence of an Event of Default, the Administrative Agent and the
Lenders will have all other rights and remedies available at law and
equity.
(c)
All
collateral, including, without limitation, proceeds realized from the
liquidation or other disposition of collateral or otherwise received after
maturity of the Notes, whether by acceleration or otherwise, shall be
applied:
first
, to reimbursement of
expenses and indemnities provided for in this Agreement and the Security
Instruments;
second
, to
accrued interest on the Notes;
third
, to fees;
fourth
, pari passu amongst
(i) Indebtedness owing to a Lender or an Affiliate of a Lender under any Swap
Agreement permitted hereby and (ii) principal outstanding on the Notes (to be
shared pro rata amongst the Lenders);
fifth
, to any other
Indebtedness;
sixth
, to
serve as cash collateral to be held by the Administrative Agent to secure the LC
Exposure; and any excess shall be paid to the Borrower or as otherwise required
by any Governmental Requirement.
ARTICLE
XI
The
Administrative Agent
Section
11.01
Appointment;
Powers
. Each
of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative
Agent as
its agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof and the other Loan Documents, together with such actions and
powers as are reasonably incidental thereto.
Section
11.02
Duties and Obligations of
Administrative Agent
. The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except as
provided in Section 11.03, and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Borrower or a Lender, and shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
under any other Loan Document or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein or in any other Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, (v) the satisfaction of
any condition set forth in ARTICLE VI or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent,
(vi) the existence, value, perfection or priority of any collateral security or
the financial or other condition of the Borrower and its Subsidiaries or any
other obligor or guarantor, or (vii) any failure by the Borrower or any other
Person (other than itself) to perform any of its obligations hereunder or under
any other Loan Document or the performance or observance of any covenants,
agreements or other terms or conditions set forth herein or
therein.
Section
11.03
Action by Administrative
Agent
. The
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby that the Administrative Agent is required to
exercise in writing as directed by the Majority Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 12.02) and in all cases the Administrative Agent shall be
fully justified in failing or refusing to act hereunder or under any other Loan
Documents unless it shall (a) receive written instructions from the Majority
Lenders or the Lenders, as applicable, (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section
12.02) specifying the action to be taken and (b) be indemnified to its
satisfaction by the Lenders against any and all liability and expenses which may
be incurred by it by reason of taking or continuing to take any such
action. The instructions as aforesaid and any action taken or failure
to act pursuant thereto by the Administrative Agent shall be binding on all of
the Lenders. If a Default has occurred and is continuing, then the
Administrative Agent shall take such action with respect to such Default as
shall be directed by the requisite Lenders in the written instructions (with
indemnities) described in this Section 11.03, provided that, unless and until
the Administrative
Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable in the best interests of the
Lenders. In no event, however, shall the Administrative Agent be
required to take any action which exposes the Administrative Agent to personal
liability or which is contrary to this Agreement, the Loan Documents or
applicable law. The Administrative Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Majority Lenders or the Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
12.02), and otherwise shall not be liable for any action taken or not taken by
it hereunder or under any other Loan Document or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith INCLUDING ITS OWN ORDINARY NEGLIGENCE, except for its own
gross negligence or willful misconduct.
Section
11.04
Reliance by Administrative
Agent
. The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon and each of the Borrower, the Lenders
and the Issuing Bank hereby waives the right to dispute the Administrative
Agent’s record of such statement, except in the case of gross negligence or
willful misconduct by the Administrative Agent. The Administrative
Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts. The Administrative Agent
may deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until a written notice of the assignment or transfer thereof
permitted hereunder shall have been filed with the Administrative
Agent.
Section
11.05
Subagents
. The
Administrative Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers through
their respective Related Parties. The exculpatory provisions of the
preceding Sections of this ARTICLE XI shall apply to any such sub-agent and to
the Related Parties of the Administrative Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as
Administrative Agent.
Section
11.06
Resignation or Removal of
Administrative Agent
. Subject
to the appointment and acceptance of a successor Administrative Agent as
provided in this Section 11.06, the Administrative Agent may resign at any time
by notifying the Lenders, the Issuing Bank and the Borrower, and the
Administrative Agent may be removed at any time with or without cause by the
Majority Lenders. Upon any such resignation or removal, the Majority
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor; provided, however, that, at Wachovia’s election and in its sole
discretion, upon the resignation of Wachovia as Administrative Agent, Wachovia
shall have the right to appoint any of its Affiliates as successor
Administrative Agent. If no successor shall have been so appointed by
the Majority
Lenders
(where applicable) and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation or removal of
the retiring Administrative Agent, then the retiring Administrative Agent may,
on behalf of the Lenders and the Issuing Bank, appoint a successor
Administrative Agent which shall be a bank with an office in New York, New York
or San Francisco, California, or an Affiliate of any such bank. Upon
the acceptance of its appointment as Administrative Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent’s resignation hereunder,
the provisions of this ARTICLE XI and Section 12.03 shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent. If
the Administrative Agent is an Impacted Lender due to the circumstances
described in clause (v) of the definition of Impacted Lender, the Majority
Lenders shall have the right to appoint a successor Administrative Agent which
shall be a commercial bank or trust company that is, if no Event of Default
exists, reasonably acceptable to the Borrower. If no successor
Administrative Agent has been so appointed and shall have accepted such
appointment by the 20th Business Day after the date the Administrative Agent
became an Impacted Lender due to the circumstances described in clause
(v) of the definition of Impacted Lender, the Administrative Agent shall be
deemed to have been replaced and the Lenders shall thereafter perform all the
duties of the Administrative Agent hereunder and under any other Loan Document
until such time, if any, as the Majority Lenders appoint a successor
Administrative Agent as provided above. After the Administrative Agent is
replaced in accordance with this Section 11.06, the provisions of this
Article XI and Section 12.03 shall continue in effect for the benefit
of such replaced Administrative Agent, its sub agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any of
them while such replaced Administrative Agent was acting as Administrative
Agent.
Section
11.07
Administrative Agent
as Lenders
. Wachovia,
serving as Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as
though it were not Administrative Agent, and such bank and its Affiliates may
accept deposits from, lend money to and generally engage in any kind of business
with the Borrower or any Subsidiary or other Affiliate thereof as if it were not
Administrative Agent hereunder.
Section
11.08
No
Reliance
. Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and each other Loan Document to which it
is a party. Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document, any related
agreement or any document furnished hereunder or thereunder. The
Administrative Agent shall not be required to keep itself informed as to the
performance or observance by the Borrower or
any of
its Subsidiaries of this Agreement, the Loan Documents or any other document
referred to or provided for herein or to inspect the Properties or books of the
Borrower or its Subsidiaries. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder or Arranger shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower (or any
of its Affiliates) which may come into the possession of the Administrative
Agent or any of its Affiliates. In this regard, each Lender
acknowledges that Vinson & Elkins L.L.P. is acting in this transaction as
special counsel to the Administrative Agent only, except to the extent otherwise
expressly stated in any legal opinion or any Loan Document. Each
other party hereto will consult with its own legal counsel to the extent that it
deems necessary in connection with the Loan Documents and the matters
contemplated therein.
Section
11.09
Authority of Administrative
Agent to Release Collateral and Liens
. Each
Lender and the Issuing Bank hereby authorizes the Administrative Agent to
release any collateral that is permitted to be sold or released pursuant to the
terms of the Loan Documents. Each Lender and the Issuing Bank hereby
authorizes the Administrative Agent to execute and deliver to the Borrower, at
the Borrower’s sole cost and expense, any and all releases of Liens, termination
statements, assignments or other documents reasonably requested by the Borrower
in connection with any sale or other disposition of Property to the extent such
sale or other disposition is permitted by the terms of Section 9.12 or is
otherwise authorized by the terms of the Loan Documents.
Section
11.10
Syndication Agent and
Co-Documentation Agents
. The
Lenders identified in this Agreement as Syndication Agent and as
Co-Documentation Agents shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, the Syndication
Agent and the Co-Documentation Agents shall not have or be deemed to have a
fiduciary relationship with any Lender.
Section
11.11
Administrative Agent May
File Proofs of Claim
. In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Borrower or any of its Subsidiaries, the
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(a)
to file
and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans and all other Indebtedness that are owing and
unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent under
Section 12.03) allowed in such judicial proceeding; and
(b)
to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall
consent to the making of such payments directly to the Lenders, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Section
12.03.
Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the
Indebtedness or the rights of any Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such
proceeding.
ARTICLE
XII
Miscellaneous
Section
12.01
Notices
.
(a)
Except in
the case of notices and other communications expressly permitted to be given by
telephone (and subject to Section 12.01(b)), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail, sent
by telecopy or, to the extent permitted in Sections 2.08(b), 2.09(b), 8.01 and
12.01(b), transmitted by electronic communication, as follows:
(i)
if
to the Borrower, to it at
1776 Lincoln Street, Suite
700, Denver, Colorado 80203
, Attention of Matthew J. Purchase (Telecopy
No. 303/861-0934) (E-mail Address: mpurchase@stmaryland.com);
(ii)
if to the
Administrative Agent, to it at 1525 W. WT Harris Blvd., Charlotte, North
Carolina 28262, Attention of Syndication Agency Services (Telecopy No.
704/590-3481), with a copy to Wachovia Securities, at 301 South College Street,
15
th
Floor NC 5562, Charlotte, North Carolina 28288, Attention of Leanne Phillips
(Telecopy No.
704/383-6647
)
(E-mail Address: leanne.phillips@wachovia.com);
(iii)
if to the
Issuing Bank, to it at 1525 W. WT Harris Blvd., Charlotte, North Carolina 28262,
Attention of Syndication Agency Services (Telecopy No.
704/590-3481);
(iv)
if to the
Swingline
Lender,
to it at the address
set forth in clause (ii) above; or
(v)
if to any
other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.
(b)
Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to
ARTICLE
II, ARTICLE III, ARTICLE IV and ARTICLE V unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative
Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
(c)
Any party
hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
Section
12.02
Waivers;
Amendments
.
(a)
No
failure on the part of the Administrative Agent, the Issuing Bank or any Lender
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege, or any abandonment or discontinuance of steps
to enforce such right, power or privilege, under any of the Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under any of the Loan Documents preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies of the Administrative Agent, the
Issuing Bank and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Borrower therefrom shall
in any event be effective unless the same shall be permitted by Section
12.02(b), and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without
limiting the generality of the foregoing, the making of a Loan or issuance of a
Letter of Credit shall not be construed as a waiver of any Default, regardless
of whether the Administrative Agent, any Lender or the Issuing Bank may have had
notice or knowledge of such Default at the time.
(b)
Neither
this Agreement nor any provision hereof nor any Security Instrument nor any
provision thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Borrower and the Majority
Lenders or by the Borrower and the Administrative Agent with the consent of the
Majority Lenders; provided that no such agreement shall (i) increase the
Commitment of any Lender without the written consent of such Lender, (ii)
increase the Borrowing Base or modify Section 2.07, without the written consent
of all of the Lenders, or decrease or maintain the Borrowing Base then in effect
under Section 2.07, without the written consent of the Supermajority Lenders
(other than any Impacted Lender), (iii) reduce the principal amount of any Loan
or LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, or reduce any other Indebtedness hereunder or under any other
Loan Document, without the written consent of each Lender affected thereby, (iv)
postpone the scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or any
other Indebtedness hereunder or under any other Loan Document, or reduce the
amount of, waive or excuse any such payment, or postpone or extend the
Termination Date without the written consent of each Lender affected thereby,
(v) change Section 4.01(b), Section 4.01(c) or Section 10.02(c) in a manner that
would alter the pro rata sharing of payments required thereby,
without
the written consent of each Lender, (vi) change the definition of the term
“Material Subsidiary”, without the written consent of each Lender (other than
any Impacted Lender), (vii) release any Guarantor (except as set forth in the
Guaranty Agreement), release all or substantially all of the collateral, or
reduce the percentage set forth in Section 8.14 to less than 80%, without the
written consent of each Lender (other than any Impacted Lender), (viii) change
any of the provisions of this Section 12.02(b) or the definition of “Majority
Lenders” or the definition of “Supermajority Lenders” or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or under any other Loan Documents or make any
determination or grant any consent hereunder or any other Loan Documents,
without the written consent of each Lender (other than any Impacted Lender) or
(ix) increase the Aggregate Commitment above the Maximum Credit Amount without
the written consent of each Lender; provided further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Swingline Lender or the Issuing Bank hereunder or
under any other Loan Document without the prior written consent of the
Administrative Agent, the Swingline Lender or the Issuing Bank, as the case may
be. Notwithstanding the foregoing, any supplement to Schedule 7.15
(Subsidiaries) shall be effective simply by delivering to the Administrative
Agent a supplemental schedule clearly marked as such and, upon receipt, the
Administrative Agent will promptly deliver a copy thereof to the
Lenders. Notwithstanding the foregoing, the Commitment and
outstanding Borrowings of any Impacted Lender shall be disregarded for all
purposes of any determination of whether the requisite Lenders have taken or may
take any action hereunder (including any consent to any amendment or waiver
pursuant to this Section 12.02);
provided
that, except
as set forth in Sections 12.02(b)(vi), (vii) and (viii), any waiver, amendment
or modification requiring the consent of all Lenders shall require the consent
of such Impacted Lender.
Section
12.03
Expenses, Indemnity; Damage
Waiver.
(a)
The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including, without limitation, the
reasonable fees, charges and disbursements of counsel and other outside
consultants for the Administrative Agent, the reasonable travel, photocopy,
mailing, courier, telephone and other similar expenses, and the cost of
environmental audits and surveys and appraisals, in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration (both before and after the
execution hereof and including advice of counsel to the Administrative Agent as
to the rights and duties of the Administrative Agent and the Lenders with
respect thereto) of this Agreement and the other Loan Documents and any
amendments, modifications or waivers of or consents related to the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all costs, expenses, Taxes, assessments and
other charges incurred by the Administrative Agent or any Lender in connection
with any filing, registration, recording or perfection of any security interest
contemplated by this Agreement or any Security Instrument or any other document
referred to therein, (iii) all reasonable out-of-pocket expenses incurred by the
Issuing Bank in connection with the issuance, amendment, renewal or extension of
any Letter of Credit or any demand for payment thereunder, (iv) all
out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank,
the Swingline Lender or any other Lender, including the reasonable fees, charges
and disbursements of any counsel for the Administrative Agent, the Issuing Bank,
the Swingline Lender or any other Lender, in connection with the enforcement or
protection of
its
rights in connection with this Agreement or any other Loan Document, including
its rights under this Section 12.03, or in connection with the Loans made or
Letters of Credit issued hereunder, including, without limitation, all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of
Credit.
(b)
THE
BORROWER SHALL INDEMNIFY THE ADMINISTRATIVE AGENT, THE ISSUING BANK, THE
SWINGLINE LENDER AND EACH OTHER LENDER, AND EACH RELATED PARTY OF ANY OF THE
FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN “
INDEMNITEE
”) AGAINST,
AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES,
LIABILITIES AND RELATED EXPENSES, INCLUDING THE REASONABLE FEES, CHARGES AND
DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST
ANY INDEMNITEE DIRECTLY ARISING OUT OF, DIRECTLY IN CONNECTION WITH, OR DIRECTLY
AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE
PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF
THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT, (ii) THE FAILURE
OF THE BORROWER OR ANY RESTRICTED SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY
LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT,
(iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR
COVENANT OF THE BORROWER OR ANY GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS
OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION
THEREWITH, (iv) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS
THEREFROM, INCLUDING, WITHOUT LIMITATION, (A) ANY REFUSAL BY THE ISSUING BANK TO
HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS PRESENTED
IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH
LETTER OF CREDIT, OR (B) THE PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT
NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER PRESENTATION
OF THE DOCUMENTS PRESENTED IN CONNECTION THEREWITH, (v) ANY OTHER ASPECT OF THE
LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS OF THE BORROWER AND ITS
SUBSIDIARIES BY THE BORROWER AND ITS SUBSIDIARIES, (vii) ANY ASSERTION THAT THE
LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE
SECURITY INSTRUMENTS, (viii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR
ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES, INCLUDING WITHOUT LIMITATION, THE
PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED RELEASE, USE, TRANSPORT,
DISPOSAL, ARRANGEMENT OF DISPOSAL OR TREATMENT OF OIL, OIL AND GAS WASTES, SOLID
WASTES OR HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (ix) THE BREACH OR
NON-COMPLIANCE BY THE BORROWER OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW
APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY, (x) THE PAST OWNERSHIP BY THE
BORROWER OR ANY SUBSIDIARY
OF ANY OF
THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH
LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY,
(xi) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL, GENERATION,
THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR
DISPOSAL OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON OR
AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER OR ANY SUBSIDIARY OR
ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY
PROPERTY OWNED OR OPERATED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES, (xii) ANY
ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OF ITS
SUBSIDIARIES, OR (xiii) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN
CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL OR PROSPECTIVE CLAIM,
LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING,
WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF WHETHER
ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY SHALL EXTEND TO EACH
INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR
CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR
AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT
IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE
INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR
MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY
INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR RELATED EXPENSES (X) ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE
OR (Y) RESULT FROM A
CLAIM BROUGHT BY THE BORROWER OR ANY GUARANTOR AGAINST AN INDEMNITEE FOR A
MATERIAL BREACH IN BAD FAITH OF SUCH INDEMNITEE'S OBLIGATIONS UNDER THIS
AGREEMENT,
ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT
CONTEMPLATED HEREBY OR THEREBY
, IF THE BORROWER OR SUCH
GUARANTOR HAS OBTAINED A FINAL AND NONAPPEALABLE JUDGMENT IN ITS FAVOR ON SUCH
CLAIM AS DETERMINED BY A COURT OF COMPETENT
JURISDICTION.
(c)
To the
extent that the Borrower fails to pay any amount required to be paid by it to
the Administrative Agent, the Swingline Lender or the Issuing Bank under Section
12.03(a) or (b), each Lender severally agrees to pay to the Administrative
Agent, the Swingline Lender or the Issuing Bank, as the case may be, such
Lender’s Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Swingline Lender or the Issuing Bank in
its capacity as such.
(d)
To the
extent permitted by applicable law, the Borrower shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of
the proceeds thereof.
(e)
All
amounts due under this Section 12.03 shall be payable promptly after written
demand therefor.
Section
12.04
Successors and
Assigns
.
(a)
The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
except that (i) the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and any attempted assignment or transfer by the Borrower without such consent
shall be null and void) and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section
12.04. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in Section 12.04(c)) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the Issuing Bank and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b)
(i) Subject
to the conditions set forth in Section 12.04(b)(ii), any Lender may assign to
one or more assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it) with the prior written consent (such consent not to be
unreasonably withheld) of:
(A)
the
Borrower, provided that no consent of the Borrower shall be required for an
assignment to a Lender, an Affiliate of a Lender or, if an Event of Default has
occurred and is continuing, any other assignee; and
(B)
the
Administrative Agent, provided that no consent of the Administrative Agent shall
be required for an assignment to an assignee that is a Lender immediately prior
to giving effect to such assignment.
(ii)
Assignments
shall be subject to the following additional conditions:
(A)
except in
the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment,
the amount of the Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000, and, after giving effect thereto, the assigning Lender shall
have commitments and Loans aggregating at
least
$5,000,000, in each case, unless each of the Borrower and the Administrative
Agent otherwise consent, provided that no such consent of the Borrower shall be
required if an Event of Default has occurred and is
continuing;
(B)
each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement;
(C)
the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of
$3,500;
(D)
the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire; and
(E)
in the
case of an assignment to a CLO, the assigning Lender shall retain the sole right
to approve any amendment, modification or waiver of any provision of this
Agreement, provided that the Assignment and Assumption between such Lender and
such CLO may provide that such Lender will not, without the consent of such CLO,
agree to any amendment, modification or waiver described in the first proviso to
Section 12.02 that affects such CLO.
(iii)
Subject
to Section 12.04(b)(iv) and the acceptance and recording thereof, from and after
the effective date specified in each Assignment and Assumption the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Section 5.01, Section 5.02, Section 5.03 and
Section 12.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 12.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section
12.04(c).
(iv)
The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Maximum Credit Amount of, and principal amount of the Loans
and LC Disbursements owing to, each Lender pursuant to the terms hereof from
time to time (the “
Register
”). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the
Borrower, the Issuing Bank and any Lender, at any reasonable time and from time
to time upon reasonable prior notice. In connection with any changes
to the Register, if necessary, the Administrative Agent will reflect the
revisions on Annex I and forward a copy of such revised Annex I to the Borrower,
the Issuing Bank and each Lender.
(v)
Upon its
receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in Section 12.04(b) and any written consent to such
assignment required by Section 12.04(b), the Administrative Agent shall accept
such Assignment and Assumption and record the information contained therein in
the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
Section 12.04(b).
(c)
(i) Any
Lender may, without the consent of the Borrower, the Administrative Agent or the
Issuing Bank, sell participations to one or more banks or other entities (a
“
Participant
”)
in all or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender’s obligations under this Agreement shall
remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the
Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement
or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement
and to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the proviso to Section 12.02 that affects
such Participant. In addition such agreement must provide that the
Participant be bound by the provisions of Section 12.03. Subject to
Section 12.04(c)(ii), the Borrower agrees that each Participant shall be
entitled to the benefits of Section 5.01, Section 5.02 and Section 5.03 to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 12.04(b). To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 12.08 as though it
were a Lender, provided such Participant agrees to be subject to Section 4.01(c)
as though it were a Lender.
(ii)
A
Participant shall not be entitled to receive any greater payment under Section
5.01 or Section 5.03 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 5.03 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
5.03(e) as though it were a Lender.
(d)
Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank, and this Section 12.04(d) shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party
hereto.
(e)
Notwithstanding
any of the foregoing, the Borrower will not and will not permit any of its
Affiliates to assume, purchase, or otherwise acquire, directly or indirectly,
all or any portion of any Lender’s rights and obligations under this Agreement
(including all or any portion of any Lender’s Commitment and
Loans). Notwithstanding any of the foregoing, no Lender shall assign,
sell, sell participations, or otherwise dispose, directly or indirectly, of all
or any portion of any its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans owing to it) to the Borrower or
to any of the Borrower’s Affiliates.
Section
12.05
Survival; Revival;
Reinstatement
.
(a)
All
covenants, agreements, representations and warranties made by the Borrower
herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent, the Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Section 5.01, Section 5.02, Section
5.03 and Section 12.03 and ARTICLE XI shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Agreement, any other Loan
Document or any provision hereof or thereof.
(b)
To the
extent that any payments on the Indebtedness or proceeds of any collateral are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver or other
Person under any bankruptcy law, common law or equitable cause, then to such
extent, the Indebtedness so satisfied shall be revived and continue as if such
payment or proceeds had not been received and the Administrative Agent’s and the
Lenders’ Liens, security interests, rights, powers and remedies under this
Agreement and each Loan Document shall continue in full force and
effect. In such event, each Loan Document shall be automatically
reinstated and the Borrower shall take such action as may be reasonably
requested by the Administrative Agent and the Lenders to effect such
reinstatement.
Section
12.06
Counterparts; Integration;
Effectiveness
.
(a)
This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single
contract. Delivery of an executed signature page to this
Agreement by facsimile transmission or other electronic transmission shall be as
effective as delivery of a manually executed counterpart of this
Agreement.
(b)
This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof and thereof. This Agreement and
the other Loan Documents represent the final agreement among the parties hereto
and thereto 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.
(c)
Except as
provided in Section 6.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.
Section
12.07
Severability
. Any
provision of this Agreement or any other Loan Document held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof or thereof; and the invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Section
12.08
Right of
Setoff
. If
an Event of Default shall have occurred and be continuing, each Lender and each
of its Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations (of whatsoever kind, including, without limitations
obligations under Swap Agreements) at any time owing by such Lender or Affiliate
to or for the credit or the account of the Borrower or any Material Subsidiary
against any of and all the obligations of the Borrower or any Material
Subsidiary owed to such Lender now or hereafter existing under this Agreement or
any other Loan Document, irrespective of whether or not such Lender shall have
made any demand under this Agreement or any other Loan Document and although
such obligations may be unmatured. The rights of each Lender under
this Section 12.08 are in addition to other rights and remedies (including other
rights of setoff) which such Lender or its Affiliates may have.
Section
12.09
GOVERNING LAW;
JURISDICTION
;
CONSENT TO SERVICE OF PROCESS
.
(a)
THIS
AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THAT UNITED STATES FEDERAL
LAW PERMITS ANY LENDER TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR TAKE
INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER IS
LOCATED. CHAPTER 346 OF THE TEXAS FINANCE CODE (WHICH REGULATES
CERTAIN
REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) SHALL NOT APPLY
TO THIS AGREEMENT OR THE NOTES.
(b)
ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS SHALL BE BROUGHT IN THE
COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY
HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND
DOES NOT PRECLUDE A PARTY FROM OBTAINING JURISDICTION OVER ANOTHER PARTY IN ANY
COURT OTHERWISE HAVING JURISDICTION.
(c)
THE
BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS AND HEREBY CONFERS
AN IRREVOCABLE SPECIAL POWER, AMPLE AND SUFFICIENT, TO CORPORATION SERVICE
COMPANY, WITH OFFICES ON THE DATE HEREOF AT DENVER, COLORADO AS ITS DESIGNEE,
APPOINTEE AND AGENT WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING IN TEXAS TO
RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS
PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS
WHICH MAY BE SERVED IN ANY SUCH PROCEEDING AND AGREES THAT THE FAILURE OF SUCH
AGENT TO GIVE ANY ADVICE OF ANY SUCH SERVICE OF PROCESS TO THE BORROWER SHALL
NOT IMPAIR OR AFFECT THE VALIDITY OF SUCH SERVICE OR OF ANY CLAIM BASED
THEREON. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL
CEASE TO BE AVAILABLE TO ACT AS SUCH, THE BORROWER AGREES TO DESIGNATE A NEW
DESIGNEE, APPOINTEE AND AGENT IN TEXAS REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT ON THE TERMS AND FOR THE PURPOSES OF THIS
PROVISION. EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
IT AT THE ADDRESS SPECIFIED IN Section 12.01 OR SUCH OTHER ADDRESS AS IS
SPECIFIED PURSUANT TO Section 12.01 (OR ITS ASSIGNMENT AND ASSUMPTION), SUCH
SERVICE TO BECOME EFFECTIVE UPON RECEIPT. NOTHING HEREIN SHALL AFFECT
THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION.
(d)
EACH
PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS
AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (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 SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES;
(iii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF 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 LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS Section 12.09.
Section
12.10
Headings
. Article
and Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.
Section
12.11
Confidentiality
. Each of
the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement
or any other Loan Document, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section 12.11, to (i) any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any Swap Agreement relating to the
Borrower and its obligations, (g) with the consent of the Borrower or (h) to the
extent such Information (i) becomes publicly available other than as a result of
a breach of this Section 12.11 or (ii) becomes available to the Administrative
Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source
other than the Borrower. For the purposes of this Section 12.11,
“
Information
”
means all information received from the Borrower or any Material Subsidiary
relating to the Borrower or any Material Subsidiary and their businesses, other
than any such information that is available to the Administrative Agent, the
Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the
Borrower or a Material Subsidiary; provided that, in the case of information
received from the Borrower or any Material Subsidiary after the date hereof,
such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section 12.11 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential
information. Notwithstanding anything herein to the contrary,
“Information” shall not include, and the Borrower, the
Borrower’s
Subsidiaries, the Administrative Agent, each Lender and the respective
Affiliates of each of the foregoing (and the respective partners, directors,
officers, employees, agents, advisors and other representatives of the
aforementioned Persons), and any other party, may disclose to any and all
Persons, without limitation of any kind (a) any information with respect to the
U.S. federal and state income tax treatment of the transactions contemplated
hereby and any facts that may be relevant to understanding the U.S. federal or
state income tax treatment of such transactions (“tax structure”), which facts
shall not include for this purpose the names of the parties or any other person
named herein, or information that would permit identification of the parties or
such other persons, or any pricing terms or other nonpublic business or
financial information that is unrelated to such tax treatment or tax structure,
and (b) all materials of any kind (including opinions or other tax analyses)
that are provided to the Borrower, the Administrative Agent or such Lender
relating to such tax treatment or tax structure.
Section
12.12
Interest
Rate
Limitation
. It
is the intention of the parties hereto that each Lender shall conform strictly
to usury laws applicable to it. Accordingly, if the transactions
contemplated hereby would be usurious as to any Lender under laws applicable to
it (including the laws of the United States of America and the State of Texas or
any other jurisdiction whose laws may be mandatorily applicable to such Lender
notwithstanding the other provisions of this Agreement), then, in that event,
notwithstanding anything to the contrary in any of the Loan Documents or any
agreement entered into in connection with or as security for the Notes, it is
agreed as follows: (i) the aggregate of all consideration which
constitutes interest under law applicable to any Lender that is contracted for,
taken, reserved, charged or received by such Lender under any of the Loan
Documents or agreements or otherwise in connection with the Notes shall under no
circumstances exceed the maximum amount allowed by such applicable law, and any
excess shall be canceled automatically and if theretofore paid shall be credited
by such Lender on the principal amount of the Indebtedness (or, to the extent
that the principal amount of the Indebtedness shall have been or would thereby
be paid in full, refunded by such Lender to the Borrower); and (ii) in the event
that the maturity of the Notes is accelerated by reason of an election of the
holder thereof resulting from any Event of Default under this Agreement or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically by such Lender as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Lender on the
principal amount of the Indebtedness (or, to the extent that the principal
amount of the Indebtedness shall have been or would thereby be paid in full,
refunded by such Lender to the Borrower). All sums paid or agreed to
be paid to any Lender for the use, forbearance or detention of sums due
hereunder shall, to the extent permitted by law applicable to such Lender, be
amortized, prorated, allocated and spread throughout the stated term of the
Loans evidenced by the Notes until payment in full so that the rate or amount of
interest on account of any Loans hereunder does not exceed the maximum amount
allowed by such applicable law. If at any time and from time to time
(i) the amount of interest payable to any Lender on any date shall be computed
at the Highest Lawful Rate applicable to such Lender pursuant to this Section
12.12 and (ii) in respect of any subsequent interest computation period the
amount of interest otherwise payable to such Lender would be less than the
amount of interest payable to such Lender computed at the Highest Lawful Rate
applicable to such Lender, then the amount of interest payable to such Lender in
respect of such subsequent interest computation period shall continue
to be
computed at the Highest Lawful Rate applicable to such Lender until the total
amount of interest payable to such Lender shall equal the total amount of
interest which would have been payable to such Lender if the total amount of
interest had been computed without giving effect to this Section
12.12. To the extent that Chapter 303 of the Texas Finance Code is
relevant for the purpose of determining the Highest Lawful Rate applicable to a
Lender, such Lender elects to determine the applicable rate ceiling under such
Chapter by the weekly ceiling from time to time in effect. Chapter
346 of the Texas Finance Code does not apply to the Borrower’s obligations
hereunder.
Section
12.13
EXCULPATION
PROVISIONS
. EACH
OF THE PARTIES HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE
AND KNOWLEDGE OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT
IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND
KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS
BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY
ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING
THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY
HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR
ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH
PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”
Section
12.14
Existing Credit
Agreement
.
(a)
On the
Effective Date, the Existing Credit Agreement shall be amended and restated in
its entirety by this Agreement, and the Existing Credit Agreement shall be
replaced hereby; provided that the Borrower, the Administrative Agent and the
Lenders agree that (i) on the date of the initial funding of Loans hereunder,
the loans and other Debt of the Borrower under the Existing Credit Agreement
shall be renewed, rearranged, modified and extended with the proceeds of the
initial funding and the “Commitments” of the lenders under the Existing Credit
Agreement shall be superseded by this Agreement and terminated (except as
otherwise expressly provided in Section 12.05(a) of the Existing Credit
Agreement with respect to the survival of certain covenants and agreements made
by the Borrower in the Existing Credit Agreement), (ii) the Existing Credit
Agreement shall continue to evidence the representations and warranties made by
the Borrower prior to the Effective Date, (iii) except as expressly stated
herein or amended, the other Loan Documents are ratified and confirmed as
remaining unmodified and in full force and effect with respect to all
Indebtedness, (iv) the Existing Credit Agreement shall continue to evidence and
govern any action or omission performed, required to be performed or approved
pursuant to the Existing Credit Agreement prior to the Effective Date
(including,
without limitation, any failure, prior to the Effective Date, to comply with the
covenants contained in the Existing Credit Agreement and any permitted releases
of collateral) and any act, omission or event to occur or measured by any date
or period of time commencing on, or including any date or period prior to, the
Effective Date and (v) the terms and provisions of the Existing Credit Agreement
shall continue in full force and effect to the extent provided in clause (d) of
this Section 12.14. The amendments and restatements set forth herein
shall not cure any breach thereof or any “Default” or “Event of Default” under
and as defined in the Existing Credit Agreement existing prior to the Effective
Date. This Agreement is not in any way intended to constitute a
novation of the obligations and liabilities existing under the Existing Credit
Agreement or evidence payment of all or any portion of such obligations and
liabilities.
(b)
The terms
and conditions of this Agreement and the Administrative Agent’s, the Lenders’
and the Issuing Banks’ rights and remedies under this Agreement and the other
Loan Documents shall apply to all of the Indebtedness incurred under the
Existing Credit Agreement and the Letters of Credit issued
thereunder.
(c)
On and
after the Effective Date, (i) all references to the Existing Credit Agreement
(or to any amendment or any amendment and restatement thereof) in the Loan
Documents (other than this Agreement) shall be deemed to refer to the Existing
Credit Agreement, as amended and restated hereby, (ii) all references to any
section (or subsection) of the Existing Credit Agreement or in any Loan Document
(but not herein) shall be amended to become,
mutatis mutandis
, references
to the corresponding provisions of this Agreement and (iii) except as the
context otherwise provides, on or after the Effective Date, all references to
this Agreement herein (including for purposes of indemnification and
reimbursement of fees) shall be deemed to be references to the Existing Credit
Agreement, as amended and restated hereby.
(d)
This
amendment and restatement is limited as written and is not a consent to any
other amendment, restatement or waiver, whether or not similar and, except as
expressly provided herein or in any other Loan Document, all terms and
conditions of the Loan Documents remain in full force and effect unless
specifically amended hereby or by any other Loan Document.
(e)
The
undersigned waive any right to receive any notice of such termination and any
right to receive any notice of prepayment of amounts owed under the Existing
Credit Agreement. Each Lender that was a party to the Existing Credit
Agreement hereby agrees to return to the Borrower, with reasonable promptness,
any promissory note delivered by the Borrower to such Lender in connection with
the Existing Credit Agreement.
Section
12.15
Collateral Matters; Swap
Agreements
. The
benefit of the Security Instruments and of the provisions of this Agreement
relating to any collateral securing the Indebtedness shall also extend to and be
available to those Lenders or their Affiliates which are counterparties to any
Swap Agreement with the Borrower or any of its Subsidiaries on a
pro rata
basis in respect of
any obligations of the Borrower or any of its Subsidiaries which arise under any
such Swap Agreement while such Person or its Affiliate is a Lender, but only
while such Person or its Affiliate is a Lender, including any Swap Agreements
between such Persons in existence prior to the date hereof. No Lender
or any Affiliate of a Lender shall have any voting
rights
under any Loan Document as a result of the existence of obligations owed to it
under any such Swap Agreements.
Section
12.16
No Third Party
Beneficiaries
. This
Agreement, the other Loan Documents, and the agreement of the Lenders to make
Loans and the Issuing Bank to issue, amend, renew or extend Letters of Credit
hereunder are solely for the benefit of the Borrower, and no other Person
(including, without limitation, any Subsidiary of the Borrower, any obligor,
contractor, subcontractor, supplier or materialsman) shall have any rights,
claims, remedies or privileges hereunder or under any other Loan Document
against the Administrative Agent, any other Agent, the Issuing Bank or any
Lender for any reason whatsoever. There are no third party
beneficiaries.
Section
12.17
USA Patriot Act
Notice
. Each
Lender hereby notifies the Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the Act.
The
parties hereto have caused this Agreement to be duly executed as of the day and
year first above written.
BORROWER:
|
ST.
MARY LAND & EXPLORATION COMPANY
|
By:
/s/ A. WADE
PURSELL
Name: A. Wade
Pursell
Title:
Executive Vice President and Chief Financial Officer
[Signature
Page to St. Mary Land & Exploration Company Third Amended & Restated
Credit Agreement]
Houston
3921802
AGENTS
AND
LENDERS: WACHOVIA
BANK, NATIONAL
ASSOCIATION, Individually and
as
Administrative Agent
By:
/s/ LEANNE
PHILLIPS
Name: Leanne
Phillips
Title:
Director
[Signature
Page to St. Mary Land & Exploration Company Third Amended & Restated
Credit Agreement]
Houston
3921802
BANK OF
AMERICA, N.A., Individually and as Syndication Agent
By:
/s/ STEPHEN J.
HOFFMAN
Name: Stephen J.
Hoffman
Title:
Managing Director
[Signature
Page to St. Mary Land & Exploration Company Third Amended & Restated
Credit Agreement]
Houston
3921802
WELLS FARGO BANK, N.A.
By:
/s/ TIM
GREEN
Name: Tim
Green
Title: Vice
President
[Signature
Page to St. Mary Land & Exploration Company Third Amended & Restated
Credit Agreement]
Houston
3921802
JPMORGAN CHASE BANK, N.A.
By:
/s/ BRIAN
ORLANDO
Name: Brian
Orlando
Title: Vice
President
[Signature
Page to St. Mary Land & Exploration Company Third Amended & Restated
Credit Agreement]
Houston
3921802
COMERICA
BANK
By:
/s/ CAROLINE
MCCLURG
Name: Caroline
McClurg
Title: Vice
President
[Signature
Page to St. Mary Land & Exploration Company Third Amended & Restated
Credit Agreement]
Houston
3921802
U.S. BANK NATIONAL
ASSOCIATION
By:
/s/ DARIA
MAHONEY
Name: Daria
Mahoney
Title: Vice
President
[Signature
Page to St. Mary Land & Exploration Company Third Amended & Restated
Credit Agreement]
Houston
3921802
BANK OF SCOTLAND
PLC
By:
/s/ JULIA R.
FRANKLIN
Name: Julia R.
Franklin
Title:
Assistant Vice President
By: NA
Name:
Title:
[Signature
Page to St. Mary Land & Exploration Company Third Amended & Restated
Credit Agreement]
Houston
3921802
ROYAL BANK OF CANADA
By:
/s/ DON J.
MCKINNERNEY
Name: Don J.
McKinnerney
Title:
Authorized Signatory
[Signature
Page to St. Mary Land & Exploration Company Third Amended & Restated
Credit Agreement]
Houston
3921802
KEYBANK NATIONAL
ASSOCIATION
By:
/s/ TODD
COKER
Name: Todd
Coker
Title:
Assistant Vice President
[Signature
Page to St. Mary Land & Exploration Company Third Amended & Restated
Credit Agreement]
Houston
3921802
BANK OF OKLAHOMA,
N.A.
By:
/s/ GUY C.
EVANGELISTA
Name: Guy C.
Evangelista
Title:
SVP
[Signature
Page to St. Mary Land & Exploration Company Third Amended & Restated
Credit Agreement]
Houston
3921802
CAPITAL ONE, NATIONAL
ASSOCIATION
By:
/s/ SCOTT L.
JOYCE
Name: Scott L.
Joyce
Title: Senior
Vice President
[Signature
Page to St. Mary Land & Exploration Company Third Amended & Restated
Credit Agreement]
Houston
3921802
BARCLAYS BANK PLC
By:
/s/ MARIA
LUND
Name: Maria
Lund
Title: Vice
President
[Signature
Page to St. Mary Land & Exploration Company Third Amended & Restated
Credit Agreement]
Houston
3921802
COMPASS BANK
By:
/s/ GREG
DETERMANN
Name: Greg
Determann
Title: Vice
President
[Signature
Page to St. Mary Land & Exploration Company Third Amended & Restated
Credit Agreement]
Houston
3921802
ANNEX
I
LIST
OF COMMITMENTS
Name
of Lender
|
Applicable
Percentage
|
Commitment
|
Bank
of America, N.A.
|
13.27434%
|
$90,000,000
|
Comerica
Bank
|
11.06195%
|
$75,000,000
|
Compass
Bank
|
11.06195%
|
$75,000,000
|
JPMorgan
Chase Bank, N.A.
|
11.06195%
|
$75,000,000
|
U.S.
Bank National Association
|
9.58702%
|
$65,000,000
|
Wachovia
Bank, National Association
|
8.14897%
|
$55,250,000
|
Wells
Fargo Bank, N.A.
|
8.14897%
|
$55,250,000
|
Bank
of Scotland plc
|
6.45280%
|
$43,750,000
|
Royal
Bank of Canada
|
6.45280%
|
$43,750,000
|
Key
Bank National Association
|
5.89971%
|
$40,000,000
|
Bank
of Oklahoma, N.A.
|
3.68732%
|
$25,000,000
|
Capital
One, National Association
|
3.68732%
|
$25,000,000
|
Barclays
Bank PLC
|
1.47493%
|
$10,000,000
|
TOTAL
|
100.00%
|
$678,000,000
|
Annex I - 1
Houston
3921802v.12
ANNEX
II
EXISTING
LETTERS OF CREDIT
1.
|
LC#
SM234314W, issued in the amount of $1,280,000, in favor of Hund, Krier,
Wilkerson & Wright, P.C., with an expiry date of
3/24/10
|
Annex II - 1
Houston
3921802v.12
EXHIBIT
A
[FORM
OF] NOTE
[$___________]
[__________]
,
200
[__]
FOR VALUE
RECEIVED,
St. Mary
Land & Exploration Company
, a Delaware corporation (the “
Borrower
”) hereby
promises to pay to the order of
[______________________________]
(the “
Lender
”),
at the principal office of Wachovia Bank, National Association (the “
Administrative
Agent
”), at
[______________________________]
,
the principal sum of
[______________________________]
Dollars ($
[_________]
) (or such lesser
amount as shall equal the aggregate unpaid principal amount of the Loans made by
the Lender to the Borrower under the Credit Agreement, as hereinafter defined),
in lawful money of the United States of America and in immediately available
funds, on the dates and in the principal amounts provided in the Credit
Agreement, and to pay interest on the unpaid principal amount of each such Loan,
at such office, in like money and funds, for the period commencing on the date
of such Loan until such Loan shall be paid in full, at the rates per annum and
on the dates provided in the Credit Agreement.
The date,
amount, Type, interest rate, Interest Period and maturity of each Loan made by
the Lender to the Borrower, and each payment made on account of the principal
thereof, shall be recorded by the Lender on its books and, prior to any transfer
of this Note, may be endorsed by the Lender on the schedules attached hereto or
any continuation thereof or on any separate record maintained by the
Lender. Failure to make any such notation or to attach a schedule
shall not affect any Lender’s or the Borrower’s rights or obligations in respect
of such Loans or affect the validity of such transfer by any Lender of this
Note.
This Note
is one of the Notes referred to in the Third Amended and Restated Credit
Agreement dated as of
[________
__]
, 2009 among the Borrower, the Administrative Agent, and the other
agents and lenders signatory thereto (including the Lender), and evidences Loans
made by the Lender thereunder (such Credit Agreement as the same may be amended,
supplemented or restated from time to time, the “
Credit
Agreement
”). Capitalized terms used in this Note have the
respective meanings assigned to them in the Credit Agreement.
This Note
is issued pursuant to the Credit Agreement and is entitled to the benefits
provided for in the Credit Agreement and the other Loan
Documents. The Credit Agreement provides for the acceleration of the
maturity of this Note upon the occurrence of certain events, for prepayments of
Loans upon the terms and conditions specified therein and other provisions
relevant to this Note.
THIS NOTE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS.
|
ST.
MARY LAND & EXPLORATION COMPANY
|
By: _________________________________
Name: _________________________________
Exhibit A -
1
Houston 3921802v.12
Title: _________________________________
Exhibit A -
2
Houston 3921802v.12
EXHIBIT
B
[FORM
OF]
COMPLIANCE
CERTIFICATE
The
undersigned hereby certifies that he/she is the
[________________________]
of
St. Mary Land &
Exploration Company
, a Delaware corporation (the “
Borrower
”), and that
as such he/she is authorized to execute this certificate in the foregoing
capacity and on behalf of the Borrower. With reference to the Third
Amended and Restated Credit Agreement dated as of
[___________ __]
, 2009
(together with all amendments, supplements or restatements thereto being the
“
Agreement
”)
among the Borrower,
Wachovia Bank, National
Association
, as Administrative Agent, and the other agents and lenders
(the “
Lenders
”)
which are or become a party thereto, and such Lenders, the undersigned
represents and warrants as follows (each capitalized term used herein having the
same meaning given to it in the Agreement unless otherwise
specified):
(a) The
representations and warranties of the Borrower contained in Article VII of the
Agreement and in the Loan Documents and otherwise made in writing by or on
behalf of the Borrower pursuant to the Agreement and the Loan Documents were
true and correct when made, and are repeated at and as of the time of delivery
hereof and are true and correct in all material respects at and as of the time
of delivery hereof, except to the extent such representations and warranties are
expressly limited to an earlier date or the Majority Lenders have expressly
consented in writing to the contrary.
(b) The
Borrower has performed and complied in all material respects with all agreements
and conditions contained in the Agreement and in the Loan Documents required to
be performed or complied with by it prior to or at the time of delivery hereof
or specify default and describe.
(c) Since
[_________ __], 200[_], no change has occurred, either in any case or in the
aggregate, in the condition, financial or otherwise, of the Borrower or any
Material Subsidiary which could reasonably be expected to have a Material
Adverse Effect [or specify event].
(d) There
exists no Default or Event of Default [or specify Default and
describe].
(e) Attached
hereto are the detailed computations necessary to determine whether the Borrower
is in compliance with Section 9.01 as of the end of the [fiscal quarter][fiscal
year] ending
[ ]
.
(f) The
representations and warranties of the Borrower contained in Section 8.14 of the
Agreement were true and correct when made, and are repeated at and as of the
time of delivery hereof and are true and correct in all material respects at and
as of the time of delivery hereof.
(g) The
representations and warranties of the Borrower contained in Section 8.12(a) of
the Agreement were true and correct when made, and are repeated at and as of the
time of delivery hereof and are true and correct in all material respects at and
as of the time of
Exhibit B - 1
Houston 3921802v.12
delivery
hereof. These representations and warranties specifically include
that the Reserve Report dated as of December 31, 2008, is and was true and
accurate, and prepared in accordance with procedures used in the immediately
preceding December 31 Reserve Report.
EXECUTED
AND DELIVERED this
[ ]
day of
[ ]
.
ST. MARY LAND &
EXPLORATION
COMPANY
By:
__________________________
Name: __________________________
Title: __________________________
Exhibit B - 2
Houston 3921802v.12
EXHIBIT
C
SECURITY
INSTRUMENTS
1.
|
Reaffirmation
Agreement dated as of April 10, 2008, by the Borrower in favor of the
Administrative Agent.
|
2.
|
Reaffirmation
Agreement dated as of even date herewith, by the Borrower in favor of the
Administrative Agent.
|
3.
|
First
Supplement and Amendment to Deed of Trust, Mortgage, Line of Credit
Mortgage, Assignment, Security Agreement, Fixture Filing and Financing
Statement dated effective as of January 27, 2003, from St. Mary Land &
Exploration Company, et al.
|
Jurisdiction
|
File
No.
|
Book/Page
|
Date
Filed
|
Cameron
Parish, LA
|
279314
|
MB275
|
01-31-03
|
Claiborne
Parish, LA
|
406861
|
445/39
|
02-03-03
|
Iberia
Parish, LA
|
03-1414
|
MB-A928
|
02-03-03
|
Lincoln
Parish, LA
|
F44323
|
MB804/490
|
02-04-03
|
Pointe
Coupee Parish, LA
|
|
MB324/No.
005
|
02-03-03
|
St.
Mary Parish, LA
|
255274
|
MB939/427
|
01-31-03
|
Union
Parish, LA
|
2003-00312605
|
548/15
|
01-31-03
|
Vermilion
Parish, LA
|
20301199
|
|
01-31-03
|
Richland
County, MT
|
516267
|
B178/584-624
|
01-31-03
|
Roosevelt
County, MT
|
361851
|
604/142
|
02-03-03
|
Sheridan
County, MT
|
459000
|
604/1307
|
01-31-03
|
Eddy
County, NM
|
0301183
|
489/1185
|
01-31-03
|
Lea
County, NM
|
33257
|
1202/609
|
02-03-03
|
Billings
County, ND
|
119317
|
093/393
|
02-04-03
|
Bottineau
County, ND
|
359181
|
295/83
|
02-04-03
|
McKenzie
County, ND
|
344188
|
|
02-04-03
|
Williams
County, ND
|
604707
|
|
02-05-03
|
Beaver
County, OK
|
1-2003-000419
|
1094/492-519
|
02-04-03
|
Beckham
County, OK
|
1-2003-000917
|
1763/414
|
02-03-03
|
Caddo
County, OK
|
030894
|
2430/161
|
2-03-03
|
Canadian
County, OK
|
2003003218
|
2680/51-79
|
2-03-03
|
Coal
County, OK
|
14750
|
616/313-356
|
01-31-03
|
Exhibit C- 1
Houston 3921802v.12
Jurisdiction
|
File
No.
|
Book/Page
|
Date
Filed
|
Comanche
County, OK
|
2003002051
|
3982/264-292
|
01-31-03
|
Custer
County, OK
|
1-2003-000660
|
1192/496-538
|
02-03-03
|
Grady
County, OK
|
1680
|
3456/472
|
02/03/03
|
Roger
Mills County, OK
|
1-2003-000430
|
1700/66
|
02-03-03
|
Washita
County, OK
|
526
|
955/504-870
|
02-03-03
|
Brazoria
County, TX
|
03
006331
|
|
01-31-03
|
Coke
County, TX
|
007140
|
161/288
|
02-03-03
|
Henderson
County, TX
|
0001833
|
2264/001
|
01-31-03
|
Jefferson
County, TX
|
2003003623
|
|
01-31-03
|
Limestone
County, TX
|
030551
|
1103/829
|
02-03-03
|
Nueces
County, TX
|
2003004978
|
24
|
01-31-03
|
Red
River County, TX
|
22402
|
530/734
|
01-31-03
|
Runnels
County, TX
|
215
|
217/174
|
02-04-03
|
Shelby
County, TX
|
2003-490
|
955/228
|
01-31-03
|
Ward
County, TX
|
196
|
735/430-453
|
1-31-03
|
Uintah
County Recorder, UT
|
2003000753
|
825/763/788
|
01-31-03
|
Carbon
County, WY
|
0902115
|
1032/0060
|
02-04-03
|
4.
|
Second
Supplement and Amendment to Deed of Trust, Mortgage, Line of Credit
Mortgage, Assignment, Security Agreement, Fixture Filing and Financing
Statement dated effective as of April 16, 2003, from St. Mary Land &
Exploration Company, et al.
|
Jurisdiction
|
File/Entry
No.
|
Book/Page
|
Date
Filed
|
Cameron
Parish, LA
|
280347
|
278
|
4/25/03
|
Claiborne
Parish, LA
|
407719
|
452/35
|
4-23-03
|
Pointe
Coupee Parish,
|
|
328/104
|
4-23-03
|
St.
Mary Parish, LA
|
256,817
|
949/140
|
4-23-03
|
Vermilion
Parish, LA
|
20305083
|
|
4-29-03
|
Eddy
County, NM
|
|
503/0917
|
5-08-03
|
Lea
County, NM
|
37323
|
1220/841
|
4-28-03
|
Bottineau
County, ND
|
359989
|
298/24
|
5-05-03
|
Exhibit C- 2
Houston 3921802v.12
Jurisdiction
|
File/Entry
No.
|
Book/Page
|
Date
Filed
|
Beckham
County, OK
|
1-2003-004011
|
1772/286
|
4-25-03
|
Caddo
County, OK
|
033653
|
2440/481-514
|
4-29-03
|
Coal
County, OK
|
15617
|
619/74-129
|
4-28-03
|
Custer
County, OK
|
1-2003-002720
|
1202/345-373
|
5-01-03
|
Grady
County, OK
|
6012
|
3483-150
|
4-23-03
|
Roger
Mills County, OK
|
2003-001893
|
1708/217-245
|
4-25-03
|
Washita
County, OK
|
2132
|
960/895-939
|
4-25-03
|
Brazoria
County, TX
|
03024211
|
|
4-24-03
|
Shelby
County, TX
|
2003-1818
|
B-960-699-726
|
4-24-03
|
Carbon
County, WY
|
0903151
|
B-1036/P-0061
|
4-25-03
|
5.
|
Deed
of Trust, Mortgage, Line of Credit Mortgage, Assignment, Security
Agreement, Fixture Filing and Financing Statement dated effective as of
January 27, 2003, from St. Mary Land & Exploration Company, et al,
covering the Burlington Properties.
|
Jurisdiction
|
File
No.
|
Book/Page
|
Date
Filed
|
Richland
County, MT
|
516268
|
B178/625-694
|
01-31-03
|
Roosevelt
County, MT
|
361852
|
604/143
|
02-03-03
|
Rosebud
County, MT
|
0093439
|
103MG/573-628
|
02-04-03
|
Sheridan
County, MT
|
459001
|
604/1351
|
01-31-03
|
Wibaux
County, MT
|
0100404
|
31/394
|
02-03-03
|
Billings
County, ND
|
119318
|
093/419
|
02-04-03
|
Bowman
County, ND
|
158041
|
|
02-03-03
|
Burke
County, ND
|
202024
|
174/41
|
02-04-03
|
Divide
County, ND
|
224437
|
218M/224
|
02-03-03
|
Dunn
County, ND
|
3007810
|
B137/1
|
02-04-03
|
Golden
Valley County, ND
|
89737
|
|
02-04-03
|
McKenzie
County, ND
|
344189
|
|
02-04-03
|
Stark
County, ND
|
3021953
|
|
02-03-03
|
Exhibit C- 3
Houston 3921802v.12
6.
|
UCC-1
Financing Statement naming NPC, Inc., as Debtor, and Wachovia Bank,
National Association, as Secured
Party.
|
Jurisdiction
|
File
No.
|
Book/Page
|
Date
Filed
|
Colorado
Secretary of State
|
20032011718
C
|
|
01-31-03
|
7.
|
First
Supplement and Amendment to Deed of Trust, Mortgage, Line of Credit
Mortgage, Assignment, Security Agreement, Fixture Filing and Financing
Statement dated effective as of April 16, 2003, from St. Mary Land &
Exploration Company, et al.
|
Jurisdiction
|
File
No.
|
Book/Page
|
Date
Filed
|
Richland
County, MT
|
518181
|
180/307-350
|
4-25-03
|
Roosevelt
County, MT
|
362400
|
604/207
|
4-25-03
|
Sheridan
County, MT
|
459308
|
605/766
|
4-24-03
|
Billings
County, ND
|
119518
|
94/115
|
4-25-03
|
Bowman
County, ND
|
158346
|
|
4-24-03
|
Divide
County, ND
|
224847
|
219M/146
|
5-27-03
|
Dunn
County, ND
|
3008107
|
138/1
of 25
|
4-29-03
|
McKenzie
County, ND
|
344998
|
|
5-02-03
|
Stark
County, ND
|
3023766
|
/1
of 23
|
4-30-03
|
8.
|
Deed
of Trust, Mortgage, Line of Credit Mortgage, Assignment, Security
Agreement, Fixture Filing and Financing Statement dated effective as of
April 16, 2003, from St. Mary Land & Exploration Company, et
al.
|
Jurisdiction
|
File
No.
|
Book/Page
|
Date
Filed
|
Bienville
Parish, LA
|
20031493
|
371/21
|
4-23-03
|
LaSalle
Parish, LA
|
188236
|
262/292,
279/452
|
4-25-03
|
Carbon
County, MT
|
306896
|
|
4-24-03
|
Glacier
County, MT
|
252494
|
69/283
|
4-24-03
|
Powder
River County, MT
|
128180
|
69/0546
|
4-24-03
|
Stillwater
County, MT
|
312063
|
|
4-24-03
|
Toole
County, MT
|
348946
|
66/741
|
4-24-03
|
Exhibit C- 4
Houston 3921802v.12
Jurisdiction
|
File
No.
|
Book/Page
|
Date
Filed
|
Ward
County, ND
|
2817213
|
Pgs
1-54
|
4-25-03
|
Williams
County, ND
|
605875
|
1-56
|
4-29-03
|
Renville
County, ND
|
178019
|
171/293
|
4-25-03
|
Dewey
County, OK
|
001261
|
1191/94
|
4-24-03
|
Stephens
County, OK
|
000272
|
2820/272
|
5-07-03
|
Schleicher
County, TX
|
080705
|
434/682
|
5-05-03
|
Galveston
County, TX
|
2003025934
|
018-38-1280
|
4-23-03
|
Campbell
County, WY
|
815203
|
1862/418-531
|
4-25-03
|
Converse
County, WY
|
892472
|
1219/800
|
5-08-03
|
Crook
County, WY
|
561879
|
405/536-591
|
4-25-03
|
Fremont
County, WY
|
2003-1242358
|
|
6-24-03
|
Hot
Spring County, WY
|
449338
|
100/703-757
|
4-30-03
|
Johnson
County, WY
|
013622
|
295/325-379
|
4-25-03
|
Lincoln
County, WY
|
889463
|
518/747
|
4-24-03
|
Natrona
County, WY
|
0715663
|
1-61
|
5-06-03
|
Niobrara
County, WY
|
380587
|
413/0354
|
4-24-03
|
Sweetwater
County, WY
|
1385265
|
0973/1730
|
5-02-03
|
Sublette
County, WY
|
296777
|
100/83
|
4-25-03
|
Uinta
County, WY
|
113005
|
795/417-468
|
4-24-03
|
Washakie
County, WY
|
499528
|
93/769-820
|
4-24-03
|
Weston
County, WY
|
659277
|
263/985
|
4-25-03
|
9.
|
Deed
of Trust, Mortgage, Line of Credit Mortgage, Assignment, Security
Agreement, Fixture Filing and Financing Statement dated effective as of
April 16, 2003, from St. Mary Land & Exploration Company, et
al.
|
Jurisdiction
|
File
No.
|
Book/Page
|
Date
Filed
|
Cheyenne
County, CO
|
2003-221982
|
1-51
|
4-25-03
|
Moffat
County, CO
|
2003L-1925
|
1
of 60
|
4-24-03
|
Harding
County, SD
|
03-327
|
103
O &G/79-129
|
4-29-03
|
Nye
County, NV
|
561302
|
|
4-24-03
|
Exhibit C- 5
Houston 3921802v.12
10.
|
Deed
of Trust, Mortgage, Line of Credit Mortgage, Assignment, Security
Agreement, Fixture Filing and Financing Statement dated effective as of
May 4, 2004, from St. Mary Land & Exploration Company, et
al.
|
Jurisdiction
|
File/Entry
No.
|
Book/Page
|
Date
Filed
|
Sheridan
County, MT
|
460961
|
608/800
|
5-17-04
|
McKenzie
County, ND
|
348516
|
|
5-14-04
|
Beckham
County, OK
|
I-2004-004556
|
1811/653
|
5-14-04
|
Shelby
County, TX
|
2004-2675
|
B-989/P-1
|
5-13-04
|
11.
|
Deed
of Trust, Mortgage, Line of Credit Mortgage Assignment, Security
Agreement, Fixture Filing and Financing Statement dated effective as of
April 7, 2005 from St. Mary Land & Exploration Company to Wachovia
Bank, National Association, as Administrative
Agent.
|
Jurisdiction
|
File/Entry
No.
|
Book/Page
|
Date
Filed
|
Bossier
Parish, LA
|
831932
|
1472
|
04-18-05
|
Caddo
Parish, LA
|
1970675
|
|
04-19-05
|
Desoto
Parish, LA
|
616921
|
319/1
|
04-14-05
|
Morehouse
Parish, LA
|
193172
|
582/183
|
04-18-05
|
Natchitoches
Parish, LA
|
M280911
228839
|
768/261
590/547
|
04-15-05
|
Webster
Parish, LA
|
477794
|
602/772
|
04-15-05
|
Richland
County, MT
|
529711
|
192/318-371
|
04-18-05
|
McKenzie
County, ND
|
356243
|
|
04-25-05
|
Mountrail
County, ND
|
315745
|
717/505
|
4-14-05
|
Alfalfa
County, OK
|
031160
|
581/734-782
|
04-15-05
|
Beckham
County, OK
|
I-2005-003117
|
1843/675-747
|
04-15-05
|
Blaine
County, OK
|
1640
|
913/470-517
|
04-14-05
|
Carter
County, OK
|
2005-004091
|
4285/68-141
|
04-14-05
|
Coal
County, OK
|
027249
|
652/494-558
|
04-22-05
|
Ellis
County, OK
|
I-A-009471
|
706/347-394
|
04-18-05
|
Exhibit C- 6
Houston 3921802v.12
Jurisdiction
|
File/Entry
No.
|
Book/Page
|
Date
Filed
|
Garfield
County, OK
|
4125
|
1752/927
|
04-15-05
|
Grady
County, OK
|
I-2005-005326
|
3720/91-141
|
04-15-05
|
Grant
County, OK
|
608
|
562/192
|
04-14-05
|
Haskell
County, OK
|
301537
|
681/101-157
|
04-14-05
|
Hughes
County, OK
|
003075
|
1027/1-49
|
04-14-05
|
Latimer
County, OK
|
I-2005-035223
|
653/178-228
|
04-14-05
|
LeFlore
County, OK
|
3842
|
1552/446-491
|
04-14-05
|
Logan
County, OK
|
3536
|
1851/45-92
|
04-14-05
|
Murray
County, OK
|
I-2005-001180
|
767/1-48
|
04-14-05
|
Pittsburg
County, OK
|
133088
|
1372/379-475
|
04-19-05
|
Roger
Mills, OK
|
I-2005-003179
|
1789/349
|
5-12-05
|
Seminole
County, OK
|
2563
|
2697/200-247
|
04-14-05
|
Washita
County, OK
|
I-2005-002861
|
1009/597-644
|
04-15-05
|
Cass
County, TX
|
37589
|
|
04-14-05
|
Gregg
County, TX
|
200507947
|
|
04-14-05
|
Houston
County, TX
|
051641
|
|
04-14-05
|
Marion
County, TX
|
1250
|
697/334-381
|
04-14-05
|
Panola
County, TX
|
100387
|
1262/467-514
|
04-14-05
|
Rusk
County, TX
|
10774
|
254B/432-480
|
04-14-05
|
Smith
County, TX
|
2005-R0017684
|
7765/818-866
|
04-14-05
|
Sutton
County, TX
|
051971
|
337/352-399
|
04-14-05
|
Wheeler
County, TX
|
15347
|
535/583-630
|
04-19-05
|
Albany
County, WY
|
2005-2399
|
|
04-14-05
|
Park
County, WY
|
2005-2693
|
|
04-18-05
|
12.
|
Supplement
and Amendment to Deed of Trust, Mortgage, Line of Credit Mortgage,
Assignment, Security Agreement, Fixture Filing and Financing Statement
dated effective as of April 7, 2005, from St. Mary Land & Exploration
Company, et al.
|
Jurisdiction
|
File/Entry
No.
|
Book/Page
|
Date
Filed
|
Bienville
Parish, LA
|
20051586
|
|
4-14-05
|
Exhibit C- 7
Houston 3921802v.12
Jurisdiction
|
File/Entry
No.
|
Book/Page
|
Date
Filed
|
Claiborne
Parish, LA
|
415336
|
502/128
|
4-14-05
|
Lincoln
Parish, LA
|
063713
|
875/179
|
4-15-05
|
Union
Parish, LA
|
2005-00326133
|
597/91
|
4-18-05
|
Billings
County, ND
|
124015
|
|
6-27-05
|
Bottineau
County, ND
|
365951
|
|
4-25-05
|
Bowman
County, ND
|
161240
|
|
4-26-05
|
Burke
County, ND
|
206034
|
178/309
|
4-25-05
|
Divide
County, ND
|
230283
|
232M/638
|
5-6-05
|
Dunn
County, ND
|
3013067
|
B-147/P-43
|
6-24-05
|
Golden
Valley County, ND
|
92123
|
|
4-25-05
|
Stark
County, ND
|
3037098
|
|
4-25-05
|
Williams
County, ND
|
623256
|
|
4-19-05
|
Canadian
County, OK
|
20058762
|
3049/641-665
|
4-18-05
|
Sweetwater
County, WY
|
1439819
|
1025/559-78
|
4-19-05
|
13.
|
Deed
of Trust, Mortgage, Line of Credit Mortgage Assignment, Security
Agreement, Fixture Filing and Financing Statement dated effective as of
February 20, 2007, from St. Mary Land & Exploration Company, et
al.
|
Jurisdiction
|
File
No.
|
Book/Page
|
Date
Filed
|
Upton
County, TX
|
00140457
|
782/61-120
|
2-26-07
|
Midland
County, TX
|
4234
|
OR/02818/71
|
2-23-07
|
14.
|
Deed
of Trust, Mortgage, Line of Credit Mortgage Assignment, Security
Agreement, Fixture Filing and Financing Statement dated effective as of
February 1, 2008, from St. Mary Land & Exploration
Company
|
Jurisdiction
|
File
No.
|
Book/Page
|
Date
Filed
|
Dimmit
County, TX
|
9830
|
345/665
|
4/23/08
|
Webb
County, TX
|
995989
|
2540/142
|
3/4/08
|
Exhibit C- 8
Houston 3921802v.12
15.
|
UCC
Financing Statement with St. Mary Land & Exploration Company as debtor
and Wachovia Bank, National Association, as Administrative Agent, as
secured party, with respect to item 15
above
|
Jurisdiction
|
File
No.
|
Book/Page
|
Date
Filed
|
Secretary
of State of Delaware
|
2008
0765394
|
|
3/3/08
|
16.
|
Supplement
and Amendment to Deed of Trust, Mortgage, Line of Credit Mortgage,
Assignment, Security Agreement, Fixture Filing and Financing Statement
dated effective as of April 14, 2009, from St. Mary Land & Exploration
Company
|
Jurisdiction
|
File
No.
|
Book/Page
|
Date
Filed
|
Cheyenne
County, CO
|
|
|
|
Moffat
County, CO
|
|
|
|
Bienville
Parish, LA
|
|
|
|
Bossier
Parish, LA
|
|
|
|
Caddo
Parish, LA
|
|
|
|
Cameron
Parish, LA
|
|
|
|
Claiborne
Parish, LA
|
|
|
|
Desoto
Parish, LA
|
|
|
|
Iberia
Parish, LA
|
|
|
|
LaSalle
Parish, LA
|
|
|
|
Lincoln
Parish, LA
|
|
|
|
Morehouse
Parish, LA
|
|
|
|
Natchitoches
Parish, LA
|
|
|
|
Pointe
Coupee Parish, LA
|
|
|
|
St.
Mary Parish, LA
|
|
|
|
Union
Parish, LA
|
|
|
|
Vermilion
Parish, LA
|
|
|
|
Webster
Parish, LA
|
|
|
|
Carbon
County, MT
|
|
|
|
Glacier
County, MT
|
|
|
|
Powder
River County, MT
|
|
|
|
Exhibit C- 9
Houston 3921802v.12
Richland
County, MT
|
|
|
|
Roosevelt
County, MT
|
|
|
|
Rosebud
County, MT
|
|
|
|
Sheridan
County, MT
|
|
|
|
Stillwater
County, MT
|
|
|
|
Toole
County, MT
|
|
|
|
Wibaux
County, MT
|
|
|
|
Eddy
County, NM
|
|
|
|
Lea
County, NM
|
|
|
|
Billings
County, ND
|
|
|
|
Bottineau
County, ND
|
|
|
|
Bowman
County, ND
|
|
|
|
Burke
County, ND
|
|
|
|
Divide
County, ND
|
|
|
|
Dunn
County, ND
|
|
|
|
Golden
Valley County, ND
|
|
|
|
McKenzie
County, ND
|
|
|
|
Mountrail
County, ND
|
|
|
|
Renville
County, ND
|
|
|
|
Stark
County, ND
|
|
|
|
Ward
County, ND
|
|
|
|
Williams
County, ND
|
|
|
|
Nye
County, NV
|
|
|
|
Alfalfa
County, OK
|
|
|
|
Beaver
County, OK
|
|
|
|
Beckham
County, OK
|
|
|
|
Blaine
County, OK
|
|
|
|
Caddo
County, OK
|
|
|
|
Canadian
County, OK
|
|
|
|
Carter
County, OK
|
|
|
|
Coal
County, OK
|
|
|
|
Exhibit C- 10
Houston 3921802v.12
Comanche
County, Ok
|
|
|
|
Custer
County, OK
|
|
|
|
Dewey
County, OK
|
|
|
|
Ellis
County, OK
|
|
|
|
Garfield
County, OK
|
|
|
|
Grady
County, OK
|
|
|
|
Grant
County, OK
|
|
|
|
Haskell
County, OK
|
|
|
|
Hughes
County, OK
|
|
|
|
Latimer
County, OK
|
|
|
|
LeFlore
County, OK
|
|
|
|
Logan
County, OK
|
|
|
|
Murray
County, OK
|
|
|
|
Pittsburg
County, OK
|
|
|
|
Roger
Mills County, OK
|
|
|
|
Seminole
County, OK
|
|
|
|
Stephens
County, OK
|
|
|
|
Washita
County, OK
|
|
|
|
Harding
County, SD
|
|
|
|
Brazoria
County, TX
|
|
|
|
Cass
County, TX
|
|
|
|
Coke
County, TX
|
|
|
|
Dimmit
County, TX
|
|
|
|
Galveston
County, TX
|
|
|
|
Gregg
County, TX
|
|
|
|
Henderson
County, TX
|
|
|
|
Houston
County, TX
|
|
|
|
Jefferson
County, TX
|
|
|
|
Limestone
County, TX
|
|
|
|
Marion
County, TX
|
|
|
|
Midland
County, TX
|
|
|
|
Exhibit C- 11
Houston 3921802v.12
Nueces
County, TX
|
|
|
|
Panola
County, TX
|
|
|
|
Red
River County, TX
|
|
|
|
Runnels
County, TX
|
|
|
|
Rusk
County, TX
|
|
|
|
Schleicher
County, TX
|
|
|
|
Shelby
County, TX
|
|
|
|
Smith
County, TX
|
|
|
|
Sutton
County, TX
|
|
|
|
Upton
County, TX
|
|
|
|
Ward
County, TX
|
|
|
|
Webb
County, TX
|
|
|
|
Wheeler
County, TX
|
|
|
|
Uintah
County, UT
|
|
|
|
Albany
County, WY
|
|
|
|
Campbell
County, WY
|
|
|
|
Carbon
County, WY
|
|
|
|
Converse
County, WY
|
|
|
|
Crook
County, WY
|
|
|
|
Fremont
County, WY
|
|
|
|
Hot
Springs County, WY
|
|
|
|
Johnson
County, WY
|
|
|
|
Lincoln
County, WY
|
|
|
|
Natrona
County, WY
|
|
|
|
Niobrara
County, WY
|
|
|
|
Park
County, WY
|
|
|
|
Sweetwater
County, WY
|
|
|
|
Sublette
County, WY
|
|
|
|
Uinta
County, WY
|
|
|
|
Washakie
County, WY
|
|
|
|
Weston
County, WY
|
|
|
|
Exhibit C- 12
Houston 3921802v.12
17.
|
UCC
Financing Statement with St. Mary Land & Exploration Company as debtor
and Wachovia Bank, National Association, as Administrative Agent, as
secured party, with respect to item 16
above
|
Jurisdiction
|
File
No.
|
Book/Page
|
Date
Filed
|
Secretary
of State of Delaware
|
|
|
|
Exhibit C- 13
Houston 3921802v.12
EXHIBIT
D
FORM
OF ASSIGNMENT AND ASSUMPTION
Reference is made to the Third Amended
and Restated Credit Agreement dated as of
[___________ __]
, 2009
(as the same
may from time to time be amended, modified, supplemented or restated, the “
Credit Agreement
”),
among
St. Mary Land
& Exploration Company
, the Lenders named therein and
Wachovia Bank, National
Association
, as Administrative Agent for the Lenders. Terms
defined in the Credit Agreement are used herein with the same
meanings.
The Assignor named on the reverse
hereof hereby sells and assigns, without recourse, to the Assignee named on the
reverse hereof, and the Assignee hereby purchases and assumes, without recourse,
from the Assignor, effective as of the Assignment Date set forth on the reverse
hereof, the interests set forth on the reverse hereof (the “
Assigned Interest
”)
in the Assignor’s rights and obligations under the Credit Agreement, including,
without limitation, the interests set forth on the reverse hereof in the
Commitment of the Assignor on the Assignment Date and Loans owing to the
Assignor which are outstanding on the Assignment Date, together with the
participations in Letters of Credit and LC Disbursements held by the Assignor on
the Assignment Date, but excluding accrued interest and fees to and excluding
the Assignment Date. The Assignee hereby acknowledges receipt of a
copy of the Credit Agreement. From and after the Assignment Date (i)
the Assignee shall be a party to and be bound by the provisions of the Credit
Agreement and, to the extent of the Assigned Interest, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of
the Assigned Interest, relinquish its rights and be released from its
obligations under the Credit Agreement.
This Assignment and Assumption is being
delivered to the Administrative Agent together with (i) if the Assignee is a
Foreign Lender, any documentation required to be delivered by the Assignee
pursuant to Section 5.03(e) of the Credit Agreement, duly completed and executed
by the Assignee, and (ii) if the Assignee is not already a Lender under the
Credit Agreement, an Administrative Questionnaire in the form supplied by the
Administrative Agent, duly completed by the Assignee. The Assignor
shall pay the fee payable to the Administrative Agent pursuant to Section
12.04(b) of the Credit Agreement.
This Assignment and Assumption shall be
governed by and construed in accordance with the laws of the State of
Texas.
Date of
Assignment:
Legal
Name of Assignor:
Legal
Name of Assignee:
Assignee’s
Address for Notices:
Effective
Date of Assignment
(“
Assignment
Date
”):
Exhibit D- 1
Houston
3921802v.12
Facility
|
Principal
Amount Assigned
|
Percentage
Assigned of Facility/Commitment (set forth, to at least 8 decimals, as a
percentage of the Facility and the aggregate Commitments of all Lenders
thereunder)
|
Commitment
Assigned:
|
$
|
%
|
Loans:
|
|
|
|
|
|
The terms
set forth above and on the reverse side hereof are hereby agreed
to:
[Name of Assignor]
,
as Assignor
By:______________________________
Name:
Title:
[Name of Assignee]
,
as Assignee
By:
______________________________
Name:
Title:
Exhibit D- 2
Houston
3921802v.12
The
undersigned hereby consent to the within assignment:
1
St.
Mary Land & Exploration Company
|
Wachovia
Bank, National Association, as Administrative
Agent,
|
By:
______________________ By:
__________________________
Name:
Name:
Title:
Title:]
_____________________________
1
Consents to be included to the
extent
required by Section 9.04(b) of the Credit
Agreement.
Exhibit D- 3
Houston
3921802v.12
EXHIBIT
E
FORM
OF COMMITMENT INCREASE CERTIFICATE
[ ]
,
200
[ ]
To: Wachovia
Bank, National Association,
as Administrative Agent
The
Borrower, the Administrative Agent and the other Agents and certain Lenders have
heretofore entered into a Third Amended and Restated Credit Agreement, dated as
of
[_________ __]
, 2009,
as amended from time to time (the “
Credit
Agreement
”). Capitalized terms not otherwise defined herein
shall have the meaning given to such terms in the Credit Agreement.
This
Commitment Increase Certificate is being delivered pursuant to Section 2.06(c)
of the Credit Agreement.
Please be
advised that the undersigned has agreed to increase its Commitment under the
Credit Agreement effective
[ ]
,
200
[ ]
from $
[ ]
to $
[ ]
and (b) that it shall continue to be a party in all respect to the Credit
Agreement and the other Loan Documents.
The
[Borrower/Lender] shall pay the fee payable to the Administrative Agent pursuant
to Section 2.06(c)(ii) of the Credit Agreement.
Very truly yours,
[ ]
By:
Name:
Title:
Exhibit E- 1
Houston 3921802v.12
Accepted
and Agreed:
Wachovia
Bank, National Association,
as
Administrative Agent
By: _______________________________
Name: ____________________________
Title: _____________________________
Accepted
and Agreed:
St. Mary
Land & Exploration Company
By: _______________________________
Name: ____________________________
Title: _____________________________
Exhibit E- 2
Houston
3921802v.12
EXHIBIT
F
FORM
OF ADDITIONAL LENDER CERTIFICATE
[ ]
,
200
[ ]
To: Wachovia
Bank, National Association
as Administrative Agent
The
Borrower, the Administrative Agent and the other Agents and certain Lenders have
heretofore entered into a Third Amended and Restated Credit Agreement, dated as
of
[_______ __]
, 2009,
as amended from time to time (the “
Credit
Agreement
”). Capitalized terms not otherwise defined herein
shall have the meaning given to such terms in the Credit Agreement.
This
Additional Lender Certificate is being delivered pursuant to Section 2.06(c) of
the Credit Agreement.
Please be
advised that the undersigned has agreed (a) to become a Lender under the Credit
Agreement effective
[ ]
,
200
[ ]
with a Commitment of $
[ ]
and (b) that it shall be a party in all respect to the Credit Agreement and the
other Loan Documents.
This
Additional Lender Certificate is being delivered to the Administrative Agent
together with (i) if the Additional Lender is a Foreign Lender, any
documentation required to be delivered by such Additional Lender pursuant to
Section 5.03(e) of the Credit Agreement, duly completed and executed by the
Additional Lender, and (ii) an Administrative Questionnaire in the form supplied
by the Administrative Agent, duly completed by the Additional
Lender. The [Borrower/Additional Lender] shall pay the fee payable to
the Administrative Agent pursuant to Section 2.06(c)(ii) of the Credit
Agreement.
Very truly yours,
[ ]
By: ______________________________
Name: ___________________________
Title: ____________________________
Exhibit F- 1
Houston 3921802v.12
Accepted
and Agreed:
Wachovia
Bank, National Association,
as
Administrative Agent
By: _____________________________
Name: __________________________
Title: ___________________________
Accepted
and Agreed:
St. Mary
Land & Exploration Company
By: _____________________________
Name: __________________________
Title: ___________________________
Exhibit F- 2
Houston
3921802v.12
EXHIBIT
G
REAFFIRMATION
AGREEMENT
1.
This
Reaffirmation Agreement (this “
Reaffirmation
”) dated
as of
[_______ __]
,
2009, is made (a) in connection with, and as a condition to, that certain Third
Amended and Restated Credit Agreement dated of even date herewith (as may be
amended, restated or otherwise modified from time to time, the “
Credit Agreement
”)
among
ST. MARY LAND
& EXPLORATION COMPANY
, a Delaware
corporation
(the
“
Borrower
”);
each of the Lenders from time to time party thereto;
WACHOVIA BANK, NATIONAL
ASSOCIATION
(in its individual
capacity, “
Wachovia
”), as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “
Administrative
Agent
”); and the other parties and agents signatory thereto and (b) for
the benefit of the respective secured parties and beneficiaries described in the
Security Instruments (as defined below). Capitalized terms used
herein but not defined herein shall have the meanings ascribed to them in the
Credit Agreement.
2.
The
Borrower has executed certain Loan Documents to secure the Indebtedness,
including, without limitation, that certain Amended and Restated Pledge and
Security Agreement dated as of April 7, 2005, by the Borrower in favor of the
Administrative Agent (as the same may be amended, supplemented, restated or
otherwise modified from time to time, the “
Pledge Agreement
”),
that certain Deed of Trust, Mortgage, Line of Credit Mortgage, Assignment,
Security Agreement, Fixture Filing and Financing Statement dated as of April 7,
2005, from the Borrower to Jay Chernosky, as Trustee (“
Trustee
”), and to the
Administrative Agent (the “
Deed of Trust
”) and
that certain Supplement and Amendment to Deed of Trust, Mortgage, Line of Credit
Mortgage, Assignment, Security Agreement, Fixture Filing and Financing Statement
dated as of April 7, 2005, by the Borrower to the Trustee, for the benefit of
the Administrative Agent (the “
Deed of Trust
Supplement
”).
3.
The
Borrower (a) has reviewed the Credit Agreement, (b) agrees that according to its
terms its obligations (and the security interests granted by it) under the
Pledge Agreement, Deed of Trust, Deed of Trust Supplement and each such other
Loan Document to which the Borrower is a party (collectively, the “
Security
Instruments
”) will continue in full force and effect to secure the
Indebtedness, and, as the same may be amended, supplemented, or otherwise
modified, and such other amounts in accordance with the terms of the Security
Instruments, (c) acknowledges, represents, warrants and agrees that the liens
and security interests created by it pursuant to the Pledge Agreement, Deed of
Trust, Deed of Trust Supplement and each other Security Instrument are valid and
subsisting and create a first priority perfected security interest to secure the
Indebtedness, (d) ratifies and affirms its obligations under, and acknowledges,
renews and extends its continued liability under, the Pledge Agreement, Deed of
Trust, Deed of Trust Supplement and each other Security Instrument to which it
is a party and agrees that the Pledge Agreement, Deed of Trust, Deed of Trust
Supplement and each other Security Instrument to which it is a party remain in
full force and effect, and (e) represents and warrants to the Lenders that as of
the date hereof: (i) all of the representations and warranties
contained in the Pledge Agreement, Deed of Trust, Deed of Trust Supplement and
each other Security Instrument to which it is a party are true and correct,
except (x) to the extent any such representations and warranties are expressly
limited to an earlier date, in which case, such representations and
Exhibit G- 1
Houston
3921802v.12
warranties
shall continue to be true and correct as of such specified earlier date and (y)
except for any changes in the facts or circumstances represented thereby not
prohibited by the Pledge Agreement, Deed of Trust, Deed of Trust Supplement,
each other Security Instrument or the Existing Credit Agreement, (ii) no Default
has occurred and is continuing (iii) since the Effective Date, there has been no
event, development or circumstance that has had or could reasonably be expected
to have a Material Adverse Effect.
4.
Each of
the Pledge Agreement, Deed of Trust, Deed of Trust Supplement and each other
Security Instrument remains in full force and effect as executed by the parties
hereto, and nothing herein shall act as a waiver of any of the Administrative
Agent’s or other Secured Parties’ rights under the Pledge Agreement, Deed of
Trust, Deed of Trust Supplement or any other Security Instrument.
5.
This
Reaffirmation is a Loan Document for the purposes of the provisions of the other
Loan Documents.
6.
This
Reaffirmation is a Security Instrument for the purposes of the provisions of the
other Security Instruments
7.
This
Reaffirmation shall be governed by and construed and enforced in accordance with
the laws of the State of Texas.
8.
This
Reaffirmation may be signed in any number of counterparts, each of which shall
be an original. Delivery of an executed signature page to this
Reaffirmation by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Reaffirmation.
9.
THIS
REAFFIRMATION AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG
THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
10.
THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[The rest
of this page has been left blank intentionally]
Exhibit G- 2
Houston
3921802v.12
The Borrower has caused this
Reaffirmation to be duly executed as of the date first above
written.
BORROWER
|
ST.
MARY LAND & EXPLORATION COMPANY
|
By:
/s/ MILAM RANDOLPH
PHARO
Name: ______________________________
Title: _______________________________
Exhibit G-
3
Houston 3921802v.12
Accepted
by:
WACHOVIA BANK, NATIONAL
ASSOCIATION
, as Administrative Agent
By:
/s/ LEANNE
PHILLIPS
Name: Leanne
Phillips
Title: Director
Exhibit G-
4
Houston 3921802v.12
EXHIBIT
H
FORM
OF LEGAL OPINION OF BALLARD SPAHR ANDREWS & INGERSOLL, LLP
Exhibit H- 1
Houston 3921802v.12
SCHEDULE
7.05
LITIGATION
None.
Schedule 7.05 - 1
Houston
3921802v.12
SCHEDULE
7.15
SUBSIDIARIES
AND PARTNERSHIPS; NON-MATERIAL SUBSIDIARIES
Material Subsidiaries
|
Jurisdiction of
Organization
|
Organizational Identification
Number
|
Principal Place of Business
and Chief Executive Office
|
Owner
|
Percentage Owned
|
None.
|
|
|
|
|
|
Non-Material Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
Belring
GP LLC
|
Delaware
|
|
|
Borrower
|
100%
|
Box
Church Gas Gathering LLC
|
Colorado
|
|
|
Borrower
|
58.6754%
|
Energy
Leasing, Inc.
|
Oklahoma
|
|
|
Borrower
|
100%
|
Four
Winds Marketing LLC
|
Colorado
|
|
|
Borrower
|
100%
|
Hilltop
Investments
|
Colorado
|
|
|
Borrower
|
50%
|
SMT
Texas LLC
|
Colorado
|
|
|
Borrower
|
100%
|
St.
Mary Land & Exploration Acquisition, LLC
|
Delaware
|
|
|
Borrower
|
100%
|
St.
Mary Energy Louisiana LLC
|
Delaware
|
|
|
Borrower
|
100%
|
St.
Mary Land East Texas L.P.
|
Texas
|
|
|
SMT
Texas LLC
Borrower
|
99%
1%
|
Sycamore
Gas System
|
Oklahoma
|
|
|
Borrower
|
3.11%
|
Trinity
River Services LTD
|
Texas
|
|
|
Borrower
|
21%
|
Parish
Ventures
|
Colorado
|
|
|
Borrower
|
50%
|
Schedule 7.15 - 1
Houston
3921802v.12
SCHEDULE
7.19
GAS
IMBALANCES
None.
Schedule 7.19 - 1
Houston
3921802v.12
SCHEDULE
7.20
MARKETING
CONTRACTS
None.
Schedule 7.20- 1
Houston
3921802v.12
SCHEDULE
7.21
SWAP
AGREEMENTS
St.
Mary Land & Exploration Company
|
|
|
|
|
|
|
|
Hedges
"In-Place"
|
|
|
|
|
|
|
|
|
|
As
of March 30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CounterParty
|
Contract
Date
|
Contract #
|
Price Index
|
Area
|
Contract
Start
|
Contract
End
|
Monthly
Volumes
|
Remaining
Yearly
Volumes
|
%
of
Hedges
|
Fixed
Price
|
Estimated
Market
Price
|
|
MtM
Value
at
3/30/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAS
SWAPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNP
Paribas
|
02/29/08
|
172761
|
IF
CIG
|
Rockies
|
01/01/09
|
12/31/09
|
50,000
|
450,000
|
|
$7.03
|
$2.87
|
|
1,873,700
|
|
|
BNP
Paribas
|
05/05/08
|
180277
|
IF
HSC
|
Arklatex
|
06/01/08
|
02/28/11
|
43,333
|
390,000
|
|
$9.96
|
$3.95
|
|
2,342,816
|
|
|
|
|
|
|
|
|
|
93,333
|
840,000
|
5.30%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comerica
|
07/30/07
|
ESWP253
|
IF
HSC
|
Gulf
Coast
|
01/01/09
|
12/31/09
|
100,000
|
900,000
|
|
$8.19
|
$3.97
|
|
3,800,902
|
|
|
|
|
|
|
|
|
|
100,000
|
900,000
|
5.67%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J
Aron & Co
|
07/30/07
|
737564622
|
IF
HSC
|
Gulf
Coast
|
01/01/09
|
12/31/09
|
110,000
|
990,000
|
|
$8.25
|
$3.97
|
|
4,235,760
|
|
|
J
Aron & Co
|
05/19/06
|
886126894
|
IF
PEPL
|
MidCon
|
01/01/09
|
06/30/09
|
140,000
|
420,000
|
|
$6.98
|
$2.67
|
|
1,809,467
|
|
|
J
Aron & Co
|
06/15/06
|
886819898
|
IF
CIG
|
Rockies
|
01/01/09
|
06/30/09
|
110,000
|
330,000
|
|
$6.28
|
$2.39
|
|
1,285,034
|
|
|
J
Aron & Co
|
12/22/06
|
892369629
|
IF
NGPL
|
MidCon
|
01/01/09
|
12/31/09
|
34,444
|
310,000
|
|
$6.85
|
$3.32
|
|
1,095,497
|
|
|
J
Aron & Co
|
03/03/08
|
904120535
|
IF
HSC
|
ArkLaTex
|
04/01/08
|
12/31/09
|
53,333
|
480,000
|
|
$8.75
|
$3.99
|
|
2,282,908
|
|
|
|
|
|
|
|
|
|
447,777
|
2,530,000
|
15.95%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JPMorgan
|
05/19/06
|
2594706
|
IF
PEPL
|
MidCon
|
01/01/09
|
06/30/09
|
180,000
|
540,000
|
|
$7.24
|
$2.68
|
|
2,464,935
|
|
|
JPMorgan
|
06/20/06
|
2715473
|
IF
CIG
|
Rockies
|
01/01/09
|
07/31/09
|
150,000
|
600,000
|
|
$7.48
|
$2.47
|
|
3,006,479
|
|
|
JPMorgan
|
11/01/06
|
4430129
|
IF
El Paso Permian
|
Permian
|
01/01/09
|
12/31/09
|
100,000
|
900,000
|
|
$6.86
|
$3.32
|
|
3,183,623
|
|
|
JPMorgan
|
01/09/07
|
4962486
|
IF
ANR OK
|
MidCon
|
01/01/09
|
12/31/09
|
34,444
|
310,000
|
|
$7.16
|
$3.34
|
|
1,183,538
|
|
|
JPMorgan
|
07/30/07
|
9673554
|
IF
HSC
|
Gulf
Coast
|
01/01/09
|
12/31/09
|
160,000
|
1,440,000
|
|
$8.27
|
$3.97
|
|
6,196,195
|
|
|
JPMorgan
|
02/26/08
|
13531195
|
IF
ANR OK
|
MidCon
|
01/01/09
|
06/30/09
|
150,000
|
450,000
|
|
$7.60
|
$2.79
|
|
2,164,591
|
|
|
Schedule
7.21- 1
Houston
3921802v.12
CounterParty
|
Contract
Date
|
Contract #
|
Price Index
|
Area
|
Contract
Start
|
Contract
End
|
Monthly
Volumes
|
Remaining
Yearly
Volumes
|
%
of
Hedges
|
Fixed
Price
|
Estimated
Market
Price
|
|
MtM
Value
at 3/30/09
|
|
|
|
|
|
|
|
|
|
774,444
|
4,240,000
|
26.73%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key
Bank
|
07/30/07
|
183268
|
IF
HSC
|
Gulf
Coast
|
01/01/08
|
07/31/09
|
72,500
|
290,000
|
|
$7.98
|
$3.66
|
|
1,252,909
|
|
|
Key
Bank
|
08/10/07
|
184037
|
IF
PEPL
|
MidCon
|
01/01/08
|
08/31/09
|
180,000
|
900,000
|
|
$7.33
|
$2.96
|
|
3,935,840
|
|
|
|
|
|
|
|
|
|
252,500
|
1,190,000
|
7.50%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wachovia
|
03/07/07
|
N151732
|
IF
HSC
|
Gulf
|
03/01/09
|
12/31/09
|
77,778
|
700,000
|
|
$7.47
|
$3.94
|
|
2,467,893
|
|
|
|
|
|
|
|
|
|
77,778
|
700,000
|
4.41%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells
Fargo
|
07/31/07
|
207849
|
IF
HSC
|
Gulf
Coast
|
08/01/09
|
12/31/09
|
100,000
|
500,000
|
|
$8.35
|
$4.22
|
|
2,065,789
|
|
|
Wells
Fargo
|
02/20/08
|
314016
|
IF
HSC
|
MidCon
|
01/01/09
|
12/31/09
|
256,667
|
2,310,000
|
|
$8.32
|
$3.93
|
|
10,135,271
|
|
|
Wells
Fargo
|
03/17/08
|
323740
|
NYMEX
HH
|
Gulf
Coast
|
01/01/09
|
12/31/09
|
110,000
|
880,000
|
|
$8.71
|
$3.81
|
|
4,308,809
|
|
|
Wells
Fargo
|
03/25/09
|
500075
|
NYMEX
HH
|
|
07/01/09
|
12/31/09
|
75,000
|
450,000
|
|
$5.28
|
$5.28
|
|
0
|
*
|
|
Wells
Fargo
|
03/25/09
|
500061
|
IF
CENTERPOINT
|
|
07/01/09
|
12/31/09
|
220,000
|
1,320,000
|
|
$4.15
|
$4.15
|
|
0
|
*
|
|
|
|
|
|
|
|
|
761,667
|
5,460,000
|
34.43%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
GAS SWAPS - 2009
|
|
|
|
|
|
1,762,222
|
15,860,000
|
100.00%
|
$7.01
|
$4.01
|
|
61,091,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNP
Paribas
|
05/05/08
|
180277
|
IF
HSC
|
Arklatex
|
06/01/08
|
02/28/11
|
30,000
|
360,000
|
|
$9.61
|
$5.51
|
|
1,474,916
|
|
|
|
|
|
|
|
|
|
30,000
|
360,000
|
2.23%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comerica
|
07/30/07
|
ESWP253
|
IF
HSC
|
Gulf
Coast
|
01/01/10
|
08/31/10
|
100,000
|
800,000
|
|
$8.16
|
$5.36
|
|
2,240,283
|
|
|
|
|
|
|
|
|
|
100,000
|
800,000
|
4.95%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J
Aron & Co
|
07/30/07
|
737564622
|
IF
HSC
|
Gulf
Coast
|
01/01/10
|
04/30/10
|
110,000
|
440,000
|
|
$8.67
|
$5.26
|
|
1,500,320
|
|
|
J
Aron & Co
|
12/22/06
|
892369629
|
IF
NGPL
|
MidCon
|
01/01/10
|
02/28/10
|
30,000
|
60,000
|
|
$7.60
|
$5.00
|
|
155,877
|
|
|
|
|
|
|
|
|
|
140,000
|
500,000
|
3.09%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JPMorgan
|
11/01/06
|
4430129
|
IF
El Paso Permian
|
Permian
|
01/01/10
|
12/31/10
|
90,833
|
1,090,000
|
|
$6.79
|
$5.10
|
|
1,839,603
|
|
|
JPMorgan
|
01/09/07
|
4962486
|
IF
ANR OK
|
MidCon
|
01/01/10
|
02/28/10
|
30,000
|
60,000
|
|
$7.98
|
$5.04
|
|
175,964
|
|
|
JPMorgan
|
07/30/07
|
9673554
|
IF
HSC
|
Gulf
Coast
|
01/01/10
|
08/31/10
|
160,000
|
1,280,000
|
|
$8.23
|
$5.36
|
|
3,675,958
|
|
|
|
|
|
|
|
|
|
280,833
|
2,430,000
|
15.03%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule
7.21- 2
Houston
3921802v.12
CounterParty
|
Contract
Date
|
Contract
#
|
Price
Index
|
Area
|
Contract
Start
|
Contract
End
|
Monthly
Volumes
|
Remaining
Yearly
Volumes
|
%
of
Hedges
|
Fixed
Price
|
Estimated
Market
Price
|
|
MtM
Value
at 3/30/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key
Bank
|
03/25/09
|
231621
|
IF
NGPL
|
MidCon
|
01/01/10
|
12/31/11
|
77,500
|
930,000
|
|
$5.37
|
$5.37
|
|
0
|
*
|
|
|
|
|
|
|
|
|
77,500
|
930,000
|
5.75%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wachovia
|
03/07/07
|
N151732
|
IF
HSC
|
Gulf
|
01/01/10
|
02/28/10
|
70,000
|
140,000
|
|
$8.37
|
$5.25
|
|
435,783
|
|
|
|
|
|
|
|
|
|
70,000
|
140,000
|
0.87%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells
Fargo
|
07/31/07
|
207849
|
IF
HSC
|
Gulf
Coast
|
01/01/10
|
08/31/10
|
100,000
|
800,000
|
|
$8.12
|
$5.36
|
|
2,208,719
|
|
|
Wells
Fargo
|
02/20/08
|
314016
|
IF
HSC
|
MidCon
|
01/01/10
|
12/31/10
|
188,333
|
2,260,000
|
|
$8.42
|
$5.48
|
|
6,658,711
|
|
|
Wells
Fargo
|
03/17/08
|
323740
|
NYMEX
HH
|
Gulf
Coast
|
01/01/10
|
12/31/10
|
120,000
|
1,440,000
|
|
$8.66
|
$5.88
|
|
4,005,819
|
|
|
Wells
Fargo
|
03/25/09
|
500075
|
NYMEX
HH
|
|
01/01/10
|
12/31/10
|
192,500
|
2,310,000
|
|
$6.18
|
$6.18
|
|
0
|
*
|
|
Wells
Fargo
|
03/25/09
|
500061
|
IF
CENTERPOINT
|
|
01/01/10
|
12/31/10
|
350,000
|
4,200,000
|
|
$5.32
|
$5.32
|
|
0
|
*
|
|
|
|
|
|
|
|
|
950,833
|
11,010,000
|
68.09%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
GAS SWAPS - 2010
|
|
|
|
|
|
1,347,500
|
16,170,000
|
100.00%
|
$4.75
|
$3.24
|
|
24,371,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNP
Paribas
|
05/05/08
|
180277
|
IF
HSC
|
Arklatex
|
06/01/08
|
02/28/11
|
20,000
|
40,000
|
|
$9.98
|
$6.49
|
|
139,634
|
|
|
|
|
|
|
|
|
|
20,000
|
40,000
|
0.70%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JPMorgan
|
11/01/06
|
4430129
|
IF
El Paso Permian
|
Permian
|
01/01/11
|
10/31/11
|
88,000
|
880,000
|
|
$6.34
|
$5.64
|
|
612,332
|
|
|
|
|
|
|
|
|
|
88,000
|
880,000
|
15.41%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key
Bank
|
03/25/09
|
231621
|
IF
NGPL
|
MidCon
|
01/01/11
|
12/31/11
|
40,000
|
480,000
|
|
$5.98
|
$5.98
|
|
0
|
*
|
|
|
|
|
|
|
|
|
40,000
|
480,000
|
8.41%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells
Fargo
|
02/20/08
|
314016
|
IF
HSC
|
MidCon
|
01/01/11
|
12/31/11
|
160,000
|
320,000
|
|
$8.89
|
$6.46
|
|
775,023
|
|
|
Wells
Fargo
|
03/25/09
|
500075
|
NYMEX
HH
|
|
01/01/11
|
12/31/11
|
177,500
|
2,130,000
|
|
$6.72
|
$6.72
|
|
0
|
*
|
|
Wells
Fargo
|
03/25/09
|
500061
|
IF
CENTERPOINT
|
|
01/01/11
|
12/31/11
|
155,000
|
1,860,000
|
|
$5.96
|
$5.96
|
|
0
|
*
|
|
|
|
|
|
|
|
|
492,500
|
4,310,000
|
75.48%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
GAS SWAPS - 2011
|
|
|
|
|
|
475,833
|
5,710,000
|
100.00%
|
$2.05
|
$1.78
|
|
1,526,989
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule
7.21- 3
Houston
3921802v.12
CounterParty
|
Contract
Date
|
Contract
#
|
Price
Index
|
Area
|
Contract
Start
|
Contract
End
|
Monthly
Volumes
|
Remaining
Yearly
Volumes
|
%
of
Hedges
|
Fixed
Price
|
Estimated
Market
Price
|
|
MtM
Value
at 3/30/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAS
COLLARS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNP
Paribas
|
10/12/05
|
93594
(FLOOR)
|
PEPL
|
MidCon
|
01/01/09
|
12/31/09
|
152,778
|
1,375,000
|
|
$5.30
|
$2.12
|
|
2,916,051
|
|
|
BNP
Paribas
|
10/12/05
|
93594
(CAP)
|
PEPL
|
MidCon
|
01/01/09
|
12/31/09
|
(152,778)
|
(1,375,000)
|
|
$9.20
|
($0.01)
|
|
(12,416)
|
|
|
|
|
|
|
|
|
|
152,778
|
1,375,000
|
20.18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comerica
|
10/13/05
|
ECAP0220
(FLOOR)
|
PEPL
|
MidCon
|
01/01/09
|
12/31/09
|
155,000
|
1,395,000
|
|
$5.300
|
$2.12
|
|
2,961,322
|
|
|
Comerica
|
10/13/05
|
ECAP0220
(CAP)
|
PEPL
|
MidCon
|
01/01/09
|
12/31/09
|
(155,000)
|
(1,395,000)
|
|
$9.390
|
($0.01)
|
|
(11,175)
|
|
|
|
|
|
|
|
|
|
155,000
|
1,395,000
|
20.47%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JP
Morgan
|
10/10/05
|
1568646
(FLOOR)
|
CIG
|
Rockies
|
01/01/09
|
12/31/09
|
200,000
|
1,800,000
|
|
$4.75
|
$1.99
|
|
3,577,286
|
|
|
JP
Morgan
|
10/10/05
|
1568646
(CAP)
|
CIG
|
Rockies
|
01/01/09
|
12/31/09
|
(200,000)
|
(1,800,000)
|
|
$8.82
|
($0.01)
|
|
(10,358)
|
|
|
JP
Morgan
|
10/12/05
|
1589334
(FLOOR)
|
NYMEX
HH
|
Gulf
Coast
|
01/01/09
|
12/31/09
|
30,000
|
240,000
|
|
$6.00
|
$2.14
|
|
513,946
|
|
|
JP
Morgan
|
10/12/05
|
1589334
(CAP)
|
NYMEX
HH
|
Gulf
Coast
|
01/01/09
|
12/31/09
|
(30,000)
|
(240,000)
|
|
$10.35
|
($0.02)
|
|
(5,092)
|
|
|
|
|
|
|
|
|
|
230,000
|
2,040,000
|
29.93%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wachovia
|
10/11/05
|
1258100
(FLOOR)
|
PEPL
|
MidCon
|
01/01/09
|
12/31/09
|
152,778
|
1,375,000
|
|
$5.300
|
$2.12
|
|
2,916,051
|
|
|
Wachovia
|
10/11/05
|
1258100
(CAP)
|
PEPL
|
MidCon
|
01/01/09
|
12/31/09
|
(152,778)
|
(1,375,000)
|
|
$9.170
|
($0.01)
|
|
(12,641)
|
|
|
|
|
|
|
|
|
|
152,778
|
1,375,000
|
20.18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells
Fargo
|
10/12/05
|
COP2506
(FLOOR)
|
HSC
|
Arklatex
|
01/01/09
|
12/31/09
|
70,000
|
630,000
|
|
$5.570
|
$1.78
|
|
1,122,403
|
|
|
Wells
Fargo
|
10/12/05
|
COP2506
(CAP)
|
HSC
|
Arklatex
|
01/01/09
|
12/31/09
|
(70,000)
|
(630,000)
|
|
$9.490
|
($0.02)
|
|
(10,939)
|
|
|
|
|
|
|
|
|
|
70,000
|
630,000
|
9.24%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
GAS COLLARS - 2009
|
|
|
|
|
|
757,222
|
6,815,000
|
100.00%
|
|
|
|
13,944,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comerica
|
10/12/05
|
ECAP0222
(FLOOR)
|
PEPL
|
MidCon
|
01/01/10
|
12/31/10
|
100,000
|
1,200,000
|
|
$5.31
|
$1.07
|
|
1,285,152
|
|
|
Comerica
|
10/12/05
|
ECAP0222
(CAP)
|
PEPL
|
MidCon
|
01/01/10
|
12/31/10
|
(100,000)
|
(1,200,000)
|
|
$7.60
|
($0.28)
|
|
(336,610)
|
|
|
Schedule
7.21- 4
Houston
3921802v.12
CounterParty
|
Contract
Date
|
Contract #
|
Price Index
|
Area
|
Contract
Start
|
Contract
End
|
Monthly
Volumes
|
Remaining
Yearly
Volumes
|
%
of
Hedges
|
Fixed
Price
|
Estimated
Market
Price
|
|
MtM
Value
at 3/30/09
|
|
|
Comerica
|
10/12/05
|
ECAP0221
(FLOOR)
|
NYMEX
HH
|
Gulf
Coast
|
01/01/10
|
12/31/10
|
20,000
|
240,000
|
|
$6.00
|
$1.11
|
|
266,363
|
|
|
Comerica
|
10/12/05
|
ECAP0221
(CAP)
|
NYMEX
HH
|
Gulf
Coast
|
01/01/10
|
12/31/10
|
(20,000)
|
(240,000)
|
|
$8.38
|
($0.39)
|
|
(93,571)
|
|
|
|
|
|
|
|
|
|
120,000
|
1,440,000
|
18.40%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JP
Morgan
|
10/10/05
|
1568647
(FLOOR)
|
CIG
|
Rockies
|
01/01/10
|
12/31/10
|
170,000
|
2,040,000
|
|
$4.85
|
$0.98
|
|
2,002,445
|
|
|
JP
Morgan
|
10/10/05
|
1568647
(CAP)
|
CIG
|
Rockies
|
01/01/10
|
12/31/10
|
(170,000)
|
(2,040,000)
|
|
$7.08
|
($0.26)
|
|
(526,554)
|
|
|
JP
Morgan
|
10/13/05
|
1591124
(FLOOR)
|
PEPL
|
MidCon
|
01/01/10
|
12/31/10
|
160,000
|
1,920,000
|
|
$5.31
|
$1.07
|
|
2,056,243
|
|
|
JP
Morgan
|
10/13/05
|
1591124
(CAP)
|
PEPL
|
MidCon
|
01/01/10
|
12/31/10
|
(160,000)
|
(1,920,000)
|
|
$7.69
|
($0.27)
|
|
(519,657)
|
|
|
|
|
|
|
|
|
|
330,000
|
3,960,000
|
50.61%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wachovia
|
10/12/05
|
1266587
(FLOOR)
|
HSC
|
Arklatex
|
01/01/10
|
12/31/10
|
50,000
|
600,000
|
|
$5.570
|
$1.02
|
|
613,125
|
|
|
Wachovia
|
10/12/05
|
1266587
(CAP)
|
HSC
|
Arklatex
|
01/01/10
|
12/31/10
|
(50,000)
|
(600,000)
|
|
$7.880
|
($0.36)
|
|
(216,546)
|
|
|
|
|
|
|
|
|
|
50,000
|
600,000
|
7.67%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells
Fargo
|
10/11/05
|
COP2507
(FLOOR)
|
PEPL
|
MidCon
|
01/01/10
|
12/31/10
|
152,083
|
1,825,000
|
|
$5.300
|
$1.06
|
|
1,942,878
|
|
|
Wells
Fargo
|
10/11/05
|
COP2507
(CAP)
|
PEPL
|
MidCon
|
01/01/10
|
12/31/10
|
(152,083)
|
(1,825,000)
|
|
$7.540
|
($0.29)
|
|
(524,993)
|
|
|
|
|
|
|
|
|
|
152,083
|
1,825,000
|
23.32%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
GAS COLLARS - 2010
|
|
|
|
|
|
652,083
|
7,825,000
|
100.00%
|
|
|
|
5,948,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNP
|
10/10/05
|
93595
(FLOOR)
|
CIG
|
Rockies
|
01/01/11
|
12/31/11
|
150,000
|
1,800,000
|
|
$5.00
|
$0.79
|
|
1,422,019
|
|
|
BNP
|
10/10/05
|
93595
(CAP)
|
CIG
|
Rockies
|
01/01/11
|
12/31/11
|
(150,000)
|
(1,800,000)
|
|
$6.32
|
($0.74)
|
|
(1,323,435)
|
|
|
|
|
|
|
|
|
|
150,000
|
1,800,000
|
27.17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comerica
|
10/12/05
|
ECAP0223
(FLOOR)
|
NYMEX
HH
|
Gulf
Coast
|
01/01/11
|
12/31/11
|
10,000
|
120,000
|
|
$6.00
|
$0.91
|
|
109,040
|
|
|
Comerica
|
10/12/05
|
ECAP0223
(CAP)
|
NYMEX
HH
|
Gulf
Coast
|
01/01/11
|
12/31/11
|
(10,000)
|
(120,000)
|
|
$7.25
|
($1.00)
|
|
(119,409)
|
|
|
|
|
|
|
|
|
|
10,000
|
120,000
|
1.81%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule
7.21- 5
Houston
3921802v.12
CounterParty
|
Contract
Date
|
Contract #
|
Price Index
|
Area
|
Contract
Start
|
Contract
End
|
Monthly
Volumes
|
Remaining
Yearly
Volumes
|
%
of
Hedges
|
Fixed
Price
|
Estimated
Market
Price
|
|
MtM
Value
at 3/30/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JP
Morgan
|
10/13/05
|
1591128
(FLOOR)
|
PEPL
|
MidCon
|
01/01/11
|
12/31/11
|
200,000
|
2,400,000
|
|
$5.31
|
$0.83
|
|
1,983,604
|
|
|
JP
Morgan
|
10/13/05
|
1591128
(CAP)
|
PEPL
|
MidCon
|
01/01/11
|
12/31/11
|
(200,000)
|
(2,400,000)
|
|
$6.58
|
($0.82)
|
|
(1,959,506)
|
|
|
JP
Morgan
|
10/12/05
|
1589331
(FLOOR)
|
HSC
|
Arklatex
|
01/01/11
|
12/31/11
|
40,000
|
480,000
|
|
$5.57
|
$0.80
|
|
385,466
|
|
|
JP
Morgan
|
10/12/05
|
1589331
(CAP)
|
HSC
|
Arklatex
|
01/01/11
|
12/31/11
|
(40,000)
|
(480,000)
|
|
$6.77
|
($0.98)
|
|
(468,773)
|
|
|
|
|
|
|
|
|
|
240,000
|
2,880,000
|
43.47%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wachovia
|
10/11/05
|
1258101
(FLOOR)
|
PEPL
|
MidCon
|
01/01/11
|
12/31/11
|
152,083
|
1,825,000
|
|
$5.30
|
$0.82
|
|
1,499,868
|
|
|
Wachovia
|
10/112005
|
1258101
(CAP)
|
PEPL
|
MidCon
|
01/01/11
|
12/31/11
|
(152,083)
|
(1,825,000)
|
|
$6.42
|
($0.86)
|
|
(1,568,252)
|
|
|
|
|
|
|
|
|
|
152,083
|
1,825,000
|
27.55%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
GAS COLLARS - 2011
|
|
|
|
|
|
552,083
|
6,625,000
|
100.00%
|
|
|
|
(39,378)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
SWAPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNP
Paribas
|
10/12/06
|
118518
|
NYMEX
|
Permian
|
01/01/09
|
09/30/09
|
1,000
|
6,045
|
|
$66.38
|
$53.24
|
|
79,449
|
|
|
BNP
Paribas
|
10/26/06
|
119702
|
NYMEX
|
Permian
|
01/01/09
|
12/31/09
|
20,000
|
180,909
|
|
$67.35
|
$55.52
|
|
2,139,505
|
|
|
BNP
Paribas
|
12/21/06
|
124753
|
NYMEX
|
Permian
|
01/01/09
|
12/31/09
|
2,000
|
18,091
|
|
$68.06
|
$55.45
|
|
228,040
|
|
|
BNP
Paribas
|
10/27/06
|
119812
|
NYMEX
|
Permian
|
01/01/09
|
12/31/09
|
10,000
|
90,455
|
|
$67.56
|
$55.48
|
|
1,093,072
|
|
|
|
|
|
|
|
|
|
33,000
|
295,500
|
25.36%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comerica
|
8/3/2006
|
ESWP237
|
NYMEX
|
Permian
|
01/01/09
|
09/30/09
|
2,000
|
12,091
|
|
$74.49
|
$51.94
|
|
272,658
|
|
|
Comerica
|
11/6/2006
|
ESWP247
|
NYMEX
|
Permian
|
01/01/09
|
12/31/09
|
18,000
|
162,818
|
|
$67.25
|
$55.53
|
|
1,908,570
|
|
|
Comerica
|
3/5/2008
|
ESWP273
|
NYMEX
|
Permian
|
04/01/08
|
12/31/09
|
17,667
|
159,727
|
|
$97.13
|
$53.13
|
|
7,028,286
|
|
|
|
|
|
|
|
|
|
37,667
|
334,636
|
28.72%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J
Aron & Co
|
09/25/06
|
889669056
|
NYMEX
|
Permian
|
01/01/09
|
09/30/09
|
2,000
|
12,091
|
|
$65.03
|
$53.42
|
|
140,400
|
|
|
|
|
|
|
|
|
|
2,000
|
12,091
|
1.04%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JPMorgan
|
10/27/2006
|
4389629
|
NYMEX
|
Permian
|
01/01/09
|
12/31/09
|
8,000
|
72,364
|
|
$67.76
|
$55.46
|
|
890,140
|
|
|
JPMorgan
|
10/27/06
|
14481873
|
NYMEX
|
Permian
|
01/01/09
|
12/31/09
|
23,000
|
208,045
|
|
$67.52
|
$55.49
|
|
2,502,366
|
|
|
|
|
|
|
|
|
|
8,000
|
280,409
|
24.07%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule
7.21- 6
Houston
3921802v.12
CounterParty
|
Contract
Date
|
Contract
#
|
Price Index
|
Area
|
Contract
Start
|
Contract
End
|
Monthly
Volumes
|
Remaining
Yearly
Volumes
|
%
of
Hedges
|
Fixed
Price
|
Estimated
Market
Price
|
|
MtM
Value
at 3/30/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key
Bank
|
10/27/2006
|
168462
|
NYMEX
|
Permian
|
01/01/09
|
12/31/09
|
10,000
|
90,455
|
|
$67.47
|
$55.49
|
|
1,083,707
|
|
|
|
|
|
|
|
|
|
10,000
|
90,455
|
7.76%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wachovia
|
10/27/2006
|
1618348
|
NYMEX
|
Permian
|
01/01/09
|
12/31/09
|
13,000
|
117,773
|
|
$67.47
|
$54.52
|
|
1,524,642
|
|
|
Wachovia
|
6/21/2007
|
N220968
|
NYMEX
|
Permian
|
01/01/09
|
07/31/09
|
4,000
|
16,182
|
|
$72.04
|
$49.42
|
|
365,958
|
|
|
|
|
|
|
|
|
|
17,000
|
133,955
|
11.50%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells
Fargo
|
10/27/06
|
137532
|
NYMEX
|
Permian
|
01/01/09
|
12/31/09
|
2,000
|
18,091
|
|
$67.64
|
$55.47
|
|
220,086
|
|
|
|
|
|
|
|
|
|
2,000
|
18,091
|
1.55%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
OIL SWAPS - 2009
|
|
|
|
|
|
97,095
|
1,165,137
|
100.00%
|
$71.64
|
$54.92
|
|
19,476,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNP
Paribas
|
10/26/06
|
119702
|
NYMEX
|
Permian
|
01/01/10
|
12/31/10
|
20,000
|
240,000
|
|
$66.57
|
$64.69
|
|
450,943
|
|
|
BNP
Paribas
|
12/21/06
|
124753
|
NYMEX
|
Permian
|
01/01/10
|
12/31/10
|
2,000
|
24,000
|
|
$67.54
|
$64.71
|
|
68,009
|
|
|
BNP
Paribas
|
10/27/06
|
119812
|
NYMEX
|
Permian
|
01/01/10
|
12/31/10
|
10,000
|
120,000
|
|
$66.85
|
$64.69
|
|
258,888
|
|
|
|
|
|
|
|
|
|
32,000
|
384,000
|
30.99%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comerica
|
11/6/2006
|
ESWP247
|
NYMEX
|
Permian
|
01/01/10
|
12/31/10
|
18,000
|
216,000
|
|
$66.24
|
$64.68
|
|
336,727
|
|
|
|
|
|
|
|
|
|
18,000
|
216,000
|
17.43%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JPMorgan
|
10/27/2006
|
4389629
|
NYMEX
|
Permian
|
01/01/10
|
12/31/10
|
5,000
|
60,000
|
|
$66.57
|
$64.69
|
|
112,909
|
|
|
JPMorgan
|
10/27/06
|
14481873
|
NYMEX
|
Permian
|
01/01/10
|
12/31/10
|
23,000
|
276,000
|
|
$66.42
|
$64.69
|
|
478,620
|
|
|
|
|
|
|
|
|
|
28,000
|
336,000
|
27.12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key
Bank
|
10/27/2006
|
168462
|
NYMEX
|
Permian
|
01/01/10
|
12/31/10
|
10,000
|
120,000
|
|
$66.35
|
$64.68
|
|
199,938
|
|
|
|
|
|
|
|
|
|
10,000
|
120,000
|
9.69%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wachovia
|
10/27/2006
|
1618348
|
NYMEX
|
Permian
|
01/01/10
|
12/31/10
|
14,250
|
171,000
|
|
$66.33
|
$64.64
|
|
288,303
|
|
|
|
|
|
|
|
|
|
14,250
|
171,000
|
13.80%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells
Fargo
|
10/27/06
|
137532
|
NYMEX
|
Permian
|
01/01/10
|
12/31/10
|
1,000
|
12,000
|
|
$66.56
|
$64.69
|
|
22,453
|
|
|
|
|
|
|
|
|
|
1,000
|
12,000
|
0.97%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule
7.21- 7
Houston
3921802v.12
CounterParty
|
Contract
Date
|
Contract
#
|
Price Index
|
Area
|
Contract
Start
|
Contract
End
|
Monthly
Volumes
|
Remaining
Yearly
Volumes
|
%
of
Hedges
|
Fixed
Price
|
Estimated
Market
Price
|
|
MtM
Value
at 3/30/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
OIL SWAPS - 2010
|
|
|
|
|
|
137,667
|
1,239,000
|
100.00%
|
$66.47
|
$64.68
|
|
2,216,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNP
Paribas
|
10/26/06
|
119702
|
NYMEX
|
Permian
|
01/01/11
|
11/30/11
|
20,000
|
220,000
|
|
$65.47
|
$69.13
|
|
(804,611)
|
|
|
BNP
Paribas
|
12/21/06
|
124753
|
NYMEX
|
Permian
|
01/01/11
|
01/31/11
|
2,000
|
2,000
|
|
$67.21
|
$67.68
|
|
(931)
|
|
|
BNP
Paribas
|
10/27/06
|
119812
|
NYMEX
|
Permian
|
01/01/11
|
11/30/11
|
10,000
|
110,000
|
|
$65.98
|
$69.14
|
|
(347,513)
|
|
|
|
|
|
|
|
|
|
32,000
|
332,000
|
32.17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comerica
|
11/6/2006
|
ESWP247
|
NYMEX
|
Permian
|
01/01/11
|
11/30/11
|
18,000
|
198,000
|
|
$65.02
|
$69.11
|
|
(809,540)
|
|
|
|
|
|
|
|
|
|
18,000
|
198,000
|
19.19%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JPMorgan
|
10/27/2006
|
4389629
|
NYMEX
|
Permian
|
01/01/11
|
11/30/11
|
4,000
|
44,000
|
|
$65.33
|
$69.12
|
|
(166,650)
|
|
|
JPMorgan
|
10/27/06
|
14481873
|
NYMEX
|
Permian
|
01/01/11
|
11/30/11
|
23,000
|
253,000
|
|
$65.28
|
$69.11
|
|
(969,874)
|
|
|
|
|
|
|
|
|
|
27,000
|
297,000
|
28.78%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key
Bank
|
10/27/2006
|
168462
|
NYMEX
|
Permian
|
01/01/11
|
11/30/11
|
10,000
|
110,000
|
|
$65.20
|
$69.11
|
|
(430,148)
|
|
|
|
|
|
|
|
|
|
10,000
|
110,000
|
10.66%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wachovia
|
10/27/2006
|
1618348
|
NYMEX
|
Permian
|
01/01/11
|
10/30/11
|
8,400
|
84,000
|
|
$65.42
|
$68.50
|
|
(259,091)
|
|
|
|
|
|
|
|
|
|
8,400
|
84,000
|
8.14%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells
Fargo
|
10/27/06
|
137532
|
NYMEX
|
Permian
|
01/01/11
|
11/30/11
|
1,000
|
11,000
|
|
$65.33
|
$69.12
|
|
(41,730)
|
|
|
|
|
|
|
|
|
|
1,000
|
11,000
|
1.07%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
OIL SWAPS - 2011
|
|
|
|
|
|
86,000
|
1,032,000
|
100.00%
|
$65.35
|
$69.07
|
|
(3,830,088)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
COLLARS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNP
Paribas
|
10/12/05
|
93578
(FLOOR)
|
NYMEX
|
Williston
|
01/01/09
|
12/31/09
|
15,300
|
138,205
|
|
$50.00
|
$3.59
|
|
496,334
|
|
|
BNP
Paribas
|
10/12/05
|
93578
(CAP)
|
NYMEX
|
Williston
|
01/01/09
|
12/31/09
|
(15,300)
|
(138,205)
|
|
$69.15
|
($3.03)
|
|
(418,926)
|
|
|
|
|
|
|
|
|
|
15,300
|
138,205
|
11.96%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comerica
|
10/11/05
|
ECAP0208
(FLOOR)
|
NYMEX
|
Williston
|
01/01/09
|
12/31/09
|
15,300
|
138,205
|
|
$50.00
|
$3.59
|
|
496,334
|
|
|
Schedule
7.21- 8
Houston
3921802v.12
CounterParty
|
Contract
Date
|
Contract
#
|
Price Index
|
Area
|
Contract
Start
|
Contract
End
|
Monthly
Volumes
|
Remaining
Yearly
Volumes
|
%
of
Hedges
|
Fixed
Price
|
Estimated
Market
Price
|
|
MtM
Value
at 3/30/09
|
|
|
Comerica
|
10/11/05
|
ECAP0208
(CAP)
|
NYMEX
|
Williston
|
01/01/09
|
12/31/09
|
(15,300)
|
(138,205)
|
|
$67.65
|
($3.37)
|
|
(465,974)
|
|
|
Comerica
|
10/13/05
|
ECAP0209
(FLOOR)
|
NYMEX
|
Williston
|
01/01/09
|
12/31/09
|
5,500
|
49,750
|
|
$50.00
|
$3.59
|
|
178,367
|
|
|
Comerica
|
10/13/05
|
ECAP0209
(CAP)
|
NYMEX
|
Williston
|
01/01/09
|
12/31/09
|
(5,500)
|
(49,750)
|
|
$67.350
|
($3.44)
|
|
(171,064)
|
|
|
|
|
|
|
|
|
|
20,800
|
187,955
|
16.27%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JP
Morgan
|
10/10/05
|
1567755/56
(FLOOR)
|
NYMEX
|
Williston
|
01/01/09
|
12/31/09
|
45,900
|
414,614
|
|
$50.00
|
$3.59
|
|
1,489,005
|
|
|
JP
Morgan
|
10/10/05
|
1567755/56
(CAP)
|
NYMEX
|
Williston
|
01/01/09
|
12/31/09
|
(45,900)
|
(414,614)
|
|
$65.75
|
($3.85)
|
|
(1,596,342)
|
|
|
|
|
|
|
|
|
|
45,900
|
414,614
|
35.89%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RBC
|
10/12/05
|
26597
(FLOOR)
|
NYMEX
|
Williston
|
01/01/09
|
12/31/09
|
15,300
|
138,205
|
|
$50.00
|
$3.59
|
|
496,334
|
|
|
RBC
|
10/12/05
|
26597
(CAP)
|
NYMEX
|
Williston
|
01/01/09
|
12/31/09
|
(15,300)
|
(138,205)
|
|
$69.10
|
($3.04)
|
|
(420,394)
|
|
|
|
|
|
|
|
|
|
15,300
|
138,205
|
11.96%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wachovia
|
10/11/05
|
1258089
(FLOOR)
|
NYMEX
|
Williston
|
01/01/09
|
12/31/09
|
15,300
|
138,205
|
|
$50.00
|
$3.59
|
|
496,334
|
|
|
Wachovia
|
10/11/05
|
1258089
(CAP)
|
NYMEX
|
Williston
|
01/01/09
|
12/31/09
|
(15,300)
|
(138,205)
|
|
$68.00
|
($3.29)
|
|
(454,551)
|
|
|
|
|
|
|
|
|
|
15,300
|
138,205
|
11.96%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells
Fargo
|
10/11/05
|
COP2497
(FLOOR)
|
NYMEX
|
Williston
|
01/01/09
|
12/31/09
|
15,300
|
138,205
|
|
$50.00
|
$3.59
|
|
496,334
|
|
|
Wells
Fargo
|
10/11/05
|
COP2497
(CAP)
|
NYMEX
|
Williston
|
01/01/09
|
12/31/09
|
(15,300)
|
(138,205)
|
|
$67.35
|
($3.44)
|
|
(475,959)
|
|
|
|
|
|
|
|
|
|
15,300
|
138,205
|
11.96%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
OIL Collars - 2009
|
|
|
|
|
|
96,282
|
1,155,389
|
100.00%
|
|
|
|
145,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNP
Paribas
|
10/12/05
|
93579
(FLOOR)
|
NYMEX
|
Williston
|
01/01/10
|
12/31/10
|
15,208
|
182,500
|
|
$50.00
|
$4.46
|
|
814,106
|
|
|
BNP
Paribas
|
10/12/05
|
93579
(CAP)
|
NYMEX
|
Williston
|
01/01/10
|
12/31/10
|
(15,208)
|
(182,500)
|
|
$67.00
|
($9.40)
|
|
(1,714,801)
|
|
|
|
|
|
|
|
|
|
15,208
|
182,500
|
13.35%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comerica
|
10/11/05
|
ECAP0210
(FLOOR)
|
NYMEX
|
Williston
|
01/01/10
|
12/31/10
|
15,208
|
182,500
|
|
$50.00
|
$4.46
|
|
814,106
|
|
|
Comerica
|
10/11/05
|
ECAP0210
(CAP)
|
NYMEX
|
Williston
|
01/01/10
|
12/31/10
|
(15,208)
|
(182,500)
|
|
$65.50
|
($10.02)
|
|
(1,829,427)
|
|
|
Schedule
7.21- 9
Houston
3921802v.12
CounterParty
|
Contract
Date
|
Contract
#
|
Price Index
|
Area
|
Contract
Start
|
Contract
End
|
Monthly
Volumes
|
Remaining
Yearly
Volumes
|
%
of
Hedges
|
Fixed
Price
|
Estimated
Market
Price
|
|
MtM
Value
at 3/30/09
|
|
|
Comerica
|
10/13/05
|
ECAP0211
(FLOOR)
|
NYMEX
|
Williston
|
01/01/10
|
12/31/10
|
7,500
|
90,000
|
|
$50.00
|
$4.46
|
|
401,446
|
|
|
Comerica
|
10/13/05
|
ECAP0211
(CAP)
|
NYMEX
|
Williston
|
01/01/10
|
12/31/10
|
(7,500)
|
(90,000)
|
|
$65.15
|
($10.17)
|
|
(914,937)
|
|
|
|
|
|
|
|
|
|
22,708
|
272,500
|
19.93%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JP
Morgan
|
10/10/05
|
1568315/16
(FLOOR)
|
NYMEX
|
Williston
|
01/01/10
|
12/31/10
|
30,417
|
365,000
|
|
$50.00
|
$4.46
|
|
1,628,213
|
|
|
JP
Morgan
|
10/10/05
|
1568315/16
(CAP)
|
NYMEX
|
Williston
|
01/01/10
|
12/31/10
|
(30,417)
|
(365,000)
|
|
$62.95
|
($11.19)
|
|
(4,084,654)
|
|
|
|
|
|
|
|
|
|
30,417
|
365,000
|
26.69%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RBC
|
10/11/05
|
26595
(FLOOR)
|
NYMEX
|
Williston
|
01/01/10
|
12/31/10
|
15,208
|
182,500
|
|
$50.00
|
$4.46
|
|
814,106
|
|
|
RBC
|
10/11/05
|
26595
(CAP)
|
NYMEX
|
Williston
|
01/01/10
|
12/31/10
|
(15,208)
|
(182,500)
|
|
$65.70
|
($9.94)
|
|
(1,813,678)
|
|
|
|
|
|
|
|
|
|
15,208
|
182,500
|
13.35%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wachovia
|
10/10/05
|
1258090
(FLOOR)
|
NYMEX
|
Williston
|
01/01/10
|
12/31/10
|
15,208
|
182,500
|
|
$50.00
|
$4.46
|
|
814,106
|
|
|
Wachovia
|
10/10/05
|
1258090
(CAP)
|
NYMEX
|
Williston
|
01/01/10
|
12/31/10
|
(15,208)
|
(182,500)
|
|
$64.00
|
($10.70)
|
|
(1,951,937)
|
|
|
|
|
|
|
|
|
|
15,208
|
182,500
|
13.35%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells
Fargo
|
10/11/05
|
COP2498
(FLOOR)
|
NYMEX
|
Williston
|
01/01/10
|
12/31/10
|
15,208
|
182,500
|
|
$50.00
|
$4.46
|
|
814,106
|
|
|
Wells
Fargo
|
10/11/05
|
COP2498
(CAP)
|
NYMEX
|
Williston
|
01/01/10
|
12/31/10
|
(15,208)
|
(182,500)
|
|
$66.15
|
($9.75)
|
|
(1,778,775)
|
|
|
|
|
|
|
|
|
|
15,208
|
182,500
|
13.35%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
OIL Collars - 2010
|
|
|
|
|
|
113,958
|
1,367,500
|
100.00%
|
|
|
|
(7,988,020)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNP
Paribas
|
10/13/05
|
93580
(FLOOR)
|
NYMEX
|
Williston
|
01/01/11
|
12/31/11
|
11,750
|
141,000
|
|
$50.00
|
$4.92
|
|
693,039
|
|
|
BNP
Paribas
|
10/13/05
|
93580
(CAP)
|
NYMEX
|
Williston
|
01/01/11
|
12/31/11
|
(11,750)
|
(141,000)
|
|
$64.25
|
($15.15)
|
|
(2,135,800)
|
|
|
|
|
|
|
|
|
|
11,750
|
141,000
|
11.41%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comerica
|
10/11/05
|
ECAP0212
(FLOOR)
|
NYMEX
|
Williston
|
01/01/11
|
12/31/11
|
15,208
|
182,500
|
|
$50.00
|
$4.92
|
|
897,224
|
|
|
Comerica
|
10/11/05
|
ECAP0212
(CAP)
|
NYMEX
|
Williston
|
01/01/11
|
12/31/11
|
(15,208)
|
(182,500)
|
|
$64.60
|
($14.97)
|
|
(2,732,773)
|
|
|
Schedule
7.21- 10
Houston
3921802v.12
CounterParty
|
Contract
Date
|
Contract
#
|
Price Index
|
Area
|
Contract
Start
|
Contract
End
|
Monthly
Volumes
|
Remaining
Yearly
Volumes
|
%
of
Hedges
|
Fixed
Price
|
Estimated
Market
Price
|
|
MtM
Value
at 3/30/09
|
|
|
|
|
|
|
|
|
|
15,208
|
182,500
|
14.77%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JP
Morgan
|
10/10/05
|
1568321/29
(FLOOR)
|
NYMEX
|
Williston
|
01/01/11
|
12/31/11
|
30,417
|
365,000
|
|
$50.00
|
$4.92
|
|
1,794,450
|
|
|
JP
Morgan
|
10/10/05
|
1568321/29
(CAP)
|
NYMEX
|
Williston
|
01/01/11
|
12/31/11
|
(30,417)
|
(365,000)
|
|
$62.05
|
($16.33)
|
|
(5,960,475)
|
|
|
|
|
|
|
|
|
|
30,417
|
365,000
|
29.53%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RBC
|
10/11/05
|
26594
(FLOOR)
|
NYMEX
|
Williston
|
01/01/11
|
12/31/11
|
15,208
|
182,500
|
|
$50.00
|
$4.92
|
|
897,224
|
|
|
RBC
|
10/11/05
|
26594
(CAP)
|
NYMEX
|
Williston
|
01/01/11
|
12/31/11
|
(15,208)
|
(182,500)
|
|
$64.75
|
($14.90)
|
|
(2,718,644)
|
|
|
|
|
|
|
|
|
|
15,208
|
182,500
|
14.77%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wachovia
|
10/10/05
|
1258091
(FLOOR)
|
NYMEX
|
Williston
|
01/01/11
|
12/31/11
|
15,208
|
182,500
|
|
$50.00
|
$4.92
|
|
897,224
|
|
|
Wachovia
|
10/10/05
|
1258091
(CAP)
|
NYMEX
|
Williston
|
01/01/11
|
12/31/11
|
(15,208)
|
(182,500)
|
|
$63.10
|
($15.76)
|
|
(2,876,698)
|
|
|
|
|
|
|
|
|
|
15,208
|
182,500
|
14.77%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wells
Fargo
|
10/11/05
|
COP2499
(FLOOR)
|
NYMEX
|
Williston
|
01/01/11
|
12/31/11
|
15,208
|
182,500
|
|
$50.00
|
$4.92
|
|
897,224
|
|
|
Wells
Fargo
|
10/11/05
|
COP2499
(CAP)
|
NYMEX
|
Williston
|
01/01/11
|
12/31/11
|
(15,208)
|
(182,500)
|
|
$65.25
|
($14.64)
|
|
(2,671,791)
|
|
|
|
|
|
|
|
|
|
15,208
|
182,500
|
14.77%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
OIL Collars - 2011
|
|
|
|
|
|
103,000
|
1,236,000
|
100.00%
|
|
|
|
(13,019,796)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural
Gas Liquid Swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J
Aron & Co
|
11/08/06
|
891043169
|
OPIS
|
Permian
|
01/01/09
|
10/31/09
|
1,166,262
|
8,201,455
|
|
$0.86
|
$0.66
|
|
1,612,103
|
|
|
J
Aron & Co
|
09/17/07
|
900695221
|
OPIS
|
Gulf
Coast
|
01/01/09
|
08/31/09
|
1,795,706
|
9,036,457
|
|
$0.97
|
$0.52
|
|
4,052,435
|
|
|
J
Aron & Co
|
02/21/08
|
903761699
|
OPIS
|
ArkLaTex
|
03/01/09
|
12/31/09
|
38,647
|
349,071
|
|
$1.13
|
$0.51
|
|
217,947
|
|
|
|
|
|
|
|
|
|
1,758,698
|
17,586,983
|
75.58%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JP
Morgan
|
05/05/08
|
15095291
|
OPIS
|
ArkLaTex
|
03/01/09
|
02/28/10
|
629,074
|
5,681,957
|
|
$1.25
|
$0.50
|
|
4,252,004
|
|
|
|
|
|
|
|
|
|
629,074
|
5,681,957
|
24.42%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NGL
Swaps - 2009
|
|
|
|
|
|
|
1,939,078
|
23,268,940
|
100.00%
|
|
$0.57
|
|
10,134,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule
7.21- 11
Houston
3921802v.12
CounterParty
|
Contract
Date
|
Contract
#
|
Price
Index
|
Area
|
Contract
Start
|
Contract
End
|
Monthly
Volumes
|
Remaining
Yearly
Volumes
|
%
of
Hedges
|
Fixed
Price
|
Estimated
Market
Price
|
|
MtM
Value
at 3/30/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J
Aron & Co
|
02/21/08
|
903761394
|
OPIS
|
ArkLaTex
|
03/01/10
|
12/31/10
|
27,400
|
274,000
|
|
$1.08
|
$0.64
|
|
120,270
|
|
|
J
Aron & Co
|
02/21/08
|
903761699
|
OPIS
|
ArkLaTex
|
01/01/10
|
02/28/10
|
31,443
|
62,885
|
|
$1.13
|
$0.61
|
|
32,830
|
|
|
|
|
|
|
|
|
|
33,689
|
336,885
|
5.74%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JP
Morgan
|
05/05/08
|
15095291
|
OPIS
|
ArkLaTex
|
03/01/09
|
02/28/10
|
512,015
|
1,024,029
|
|
$1.25
|
$0.61
|
|
651,092
|
|
|
|
|
|
|
|
|
|
512,015
|
1,024,029
|
17.45%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JP
Morgan
|
05/05/08
|
15095392
|
OPIS
|
ArkLaTex
|
03/01/10
|
02/28/11
|
450,748
|
4,507,479
|
|
$1.17
|
$0.64
|
|
2,410,365
|
|
|
|
|
|
|
|
|
|
450,748
|
4,507,479
|
76.81%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NGL
Swaps - 2010
|
|
|
|
|
|
|
489,033
|
5,868,393
|
100.00%
|
|
$0.63
|
|
3,214,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J
Aron & Co
|
02/21/08
|
903761394
|
OPIS
|
ArkLaTex
|
01/01/11
|
02/28/11
|
23,703
|
47,405
|
|
$1.080
|
$0.69
|
|
18,639
|
|
|
|
|
|
|
|
|
|
23,703
|
47,405
|
5.75%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JP
Morgan
|
05/05/08
|
15095392
|
OPIS
|
ArkLaTex
|
03/01/10
|
02/28/11
|
388,791
|
777,582
|
|
$1.17
|
$0.68
|
|
379,561
|
|
|
|
|
|
|
|
|
|
388,791
|
777,582
|
94.25%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NGL
Swaps - 2011
|
|
|
|
|
|
|
68,749
|
824,987
|
100.00%
|
|
$0.68
|
|
398,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Net Asset/(Liability) for Gas, Oil, & Natural Gas Liquid
Hedges
|
|
$117,593,076.00
|
|
|
*
|
Trade
recently entered into. MTM value estimated to be $0.00 as of
03/25/09.
|
|
|
|
|
|
|
|
|
|
|
Forward
curve was similar on 03/30/2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule
7.21- 12
Houston
3921802v.12
SCHEDULE
7.24
MATERIAL
AGREEMENTS
1.
|
Senior
Convertible Notes indenture, in the aggregate principal amount of
$287,500,000, due on or about April 1,
2027.
|
2.
|
And
the agreements set forth on the exhibit list to the Company’s Form 10-K
for the year ended December 31, 2008, as material contracts included as
exhibits 10.1 through 10.38.
|
Schedule 7.24 - 1
Houston
3921802v.12
SCHEDULE
9.05(a)
INVESTMENTS
None.
Schedule 9.05(a) - 1
Houston
3921802v.12
SCHEDULE
9.05(h)
EXISTING
INVESTMENTS (NON-OIL AND GAS)
1.
|
50%
general partnership interest in Hilltop Investments holding approximately
41 acres of undeveloped land in Jefferson County at C-470 and
Quincy.
|
2.
|
Residual
net profits interest in land located in Grand Junction, Colorado if
reclaimed by gravel operator and sold as lots in Mid-America Business
Park, a rail served industrial
park.
|
Schedule 9.05(h) - 1
Houston
3921802v.12
EXHIBIT 10.2
(CO, LA,
MT, ND, NM, OK, TX, WY)
DEED OF
TRUST, MORTGAGE, LINE OF CREDIT MORTGAGE
ASSIGNMENT,
SECURITY AGREEMENT, FIXTURE FILING
AND
FINANCING STATEMENT
FROM
ST. MARY
LAND & EXPLORATION COMPANY
TO
WACHOVIA
BANK, NATIONAL ASSOCIATION,
AS
ADMINISTRATIVE AGENT,
OR,
ALTERNATIVELY, TO
JAY
CHERNOSKY, TRUSTEE
FOR THE
BENEFIT OF
WACHOVIA
BANK, NATIONAL ASSOCIATION,
AS
ADMINISTRATIVE AGENT
Dated
Effective as of April 14, 2009
A CARBON,
PHOTOGRAPHIC, FACSIMILE, OR OTHER REPRODUCTION OF THIS INSTRUMENT IS SUFFICIENT
AS A FINANCING STATEMENT.
THIS
INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS, SECURES PAYMENT OF
FUTURE ADVANCES, AND COVERS PROCEEDS OF COLLATERAL.
THIS
INSTRUMENT COVERS, AMONG OTHER THINGS, (A) GOODS WHICH ARE OR ARE TO BECOME
FIXTURES RELATED TO THE REAL PROPERTY DESCRIBED HEREIN, AND (B) AS-EXTRACTED
COLLATERAL RELATED TO THE REAL PROPERTY DESCRIBED HEREIN (INCLUDING WITHOUT
LIMITATION, OIL, GAS, OTHER MINERALS AND OTHER SUBSTANCES OF VALUE WHICH MAY BE
EXTRACTED FROM THE EARTH AND ACCOUNTS ARISING OUT OF THE SALE AT THE WELLHEAD OR
MINEHEAD THEREOF). THIS INSTRUMENT IS TO BE FILED FOR RECORD, AMONG
OTHER PLACES, IN THE REAL ESTATE OR COMPARABLE RECORDS OF THE COUNTIES AND/OR
PARISHES REFERENCED IN
EXHIBIT A
HERETO AND
SUCH FILING SHALL SERVE, AMONG OTHER PURPOSES, AS A FIXTURE FILING AND AS A
FINANCING STATEMENT COVERING AS-EXTRACTED COLLATERAL. THE MORTGAGOR HAS AN
INTEREST OF RECORD IN THE REAL
ESTATE AND/OR IMMOVABLE PROPERTY CONCERNED, WHICH INTEREST IS
DESCRIBED IN SECTION 1.1 OF THIS INSTRUMENT.
A POWER OF
SALE HAS BEEN GRANTED IN THIS MORTGAGE. A POWER OF SALE MAY ALLOW AGENT (AS
HEREINAFTER DEFINED) OR TRUSTEE (AS HEREINAFTER DEFINED) TO TAKE THE MORTGAGED
PROPERTIES AND SELL THEM WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON
DEFAULT BY THE MORTGAGOR (AS HEREINAFTER DEFINED) UNDER THIS
MORTGAGE
.
Note
to North Dakota Recording Officer: Attached to counterparts hereto to be filed
in the State of North Dakota (as Annex II) is an adequate statement of the
interest.
EMPLOYER
IDENTIFICATION NUMBER OF MORTGAGOR: 41-05 18430
ORGANIZATIONAL
IDENTIFICATION NUMBER OF MORTGAGOR: 0044728
WHEN
RECORDED OR FILED RETURN TO:
Vinson
& Elkins L.L.P.
2500
First City Tower
1001
Fannin Street
Houston,
Texas 77002
Attention:
Linda Daugherty
Phone
Number: (713) 758-4513
DEED OF
TRUST, MORTGAGE, LINE OF CREDIT MORTGAGE
ASSIGNMENT,
SECURITY AGREEMENT, FIXTURE FILING
AND
FINANCING STATEMENT
(this
“
Mortgage
”)
ARTICLE
I.
Granting Clauses: Secured
Indebtedness
Section
1.1
Grant and
Mortgage
. St. Mary Land & Exploration Company, a Delaware corporation
(“
Company
”
and “
Mortgagor
”),
for and in consideration of the sum of Ten Dollars ($10.00) to Mortgagor in hand
paid, and in order to secure the payment of the secured indebtedness hereinafter
referred to and the performance of the obligations, covenants, agreements,
warranties and undertakings of Mortgagor hereinafter described, does hereby (a)
GRANT, BARGAIN, SELL, CONVEY, TRANSFER, ASSIGN AND SET OVER to Trustee (as
hereinafter defined), and grant to Trustee a POWER OF SALE (pursuant to this
Mortgage and applicable law) with respect to, those of the following described
properties, rights and interests which are located in (or cover properties
located in) the State of Texas or which are located within (or cover properties
located within) the offshore area over which the United States of America
asserts jurisdiction and to which the laws of any such state are applicable with
respect to this Mortgage and/or the liens or security interests created hereby
(the “
Deed of
Trust Mortgaged Properties
”), and (b) MORTGAGE, ASSIGN, WARRANT, PLEDGE
AND HYPOTHECATE to Agent (as defined in Section 1.3(a) below), and grant to
Agent a POWER OF SALE (pursuant to this Mortgage and applicable law) with
respect to, all of the following described rights, interests and properties
which were not granted to Trustee in clause (a) above (including, without
limitation, those of the following described properties, rights and interests
which are located in (or cover properties located in) the States of Colorado,
Louisiana, Montana, New Mexico, North Dakota, Oklahoma or Wyoming or which are
located within (or cover properties located within) the offshore area over which
the United States of America asserts jurisdiction and to which the laws of any
such state are applicable with respect to this Mortgage and/or the liens or
security interests created hereby) (the “
Other
Mortgaged Properties
”):
A.
The oil,
gas and/or other mineral properties, mineral servitudes, and/or mineral rights
which are described in
Exhibit A
attached
hereto and made a part hereof;
B.
Without
limitation of the foregoing, all other right, title and interest of Mortgagor of
whatever kind or character (whether now owned or hereafter acquired by operation
of law or otherwise) in and to (i) the oil, gas and/or mineral leases or other
agreements described in
Exhibit A
hereto,
(ii) the lands described or referred to in
Exhibit A
(or
described in any of the instruments described or referred to in
Exhibit A
), without
regard to any limitations as to specific lands or depths that may be set forth
in
Exhibit A
hereto or in any of the leases or other agreements described in
Exhibit A
hereto and
(iii) any other lands (including submerged lands) located anywhere in the United
States of America or located offshore the United States of America but within
the offshore area over which the United States of America or any State thereof
asserts jurisdiction;
C.
All of
Mortgagor’s interest (whether now owned or hereafter acquired by operation of
law or otherwise) in and to all presently existing and hereafter created oil,
gas and/or mineral unitization, pooling and/or communitization agreements,
declarations and/or orders, and in and to the properties, rights and interests
covered and the units created thereby (including, without limitation, units
formed under orders, rules, regulations or other official acts of any federal,
state or other authority having jurisdiction), which cover, affect or otherwise
relate to the properties, rights and interests described in clause A or B
above;
D.
All of
Mortgagor’s interest in and rights under (whether now owned or hereafter
acquired by operation of law or otherwise) all presently existing and hereafter
created operating agreements, equipment leases, production sales contracts,
processing agreements, transportation agreements, gas balancing agreements,
farmout and/or farm-in agreements, salt water disposal agreements, area of
mutual interest agreements, and other contracts and/or agreements which cover,
affect, or otherwise relate to the properties, rights and interests described in
clause A, B or C above or to the operation of such properties, rights and
interests or to the treating, handling, storing, processing, transporting or
marketing of oil, gas, other hydrocarbons, or other minerals produced from (or
allocated to) such properties, rights and interests (including, but not limited
to, those contracts listed in
Exhibit A
hereto), as
same may be amended or supplemented from time to time;
E.
All of
Mortgagor’s interest (whether now owned or hereafter acquired by operation of
law or otherwise) in and to all improvements, fixtures, movable or immovable
property and other real and/or personal property (including, without limitation,
all wells, pumping units, wellhead equipment, tanks, pipelines, flow lines,
gathering lines, compressors, dehydration units, separators, meters, buildings,
injection facilities, salt water disposal facilities, and power, telephone and
telegraph lines), and all easements, servitudes, rights-of-way, surface leases,
licenses, permits and other surface rights, which are now or hereafter used, or
held for use, in connection with the properties, rights and interests described
in clause A, B or C above, or in connection with the operation of such
properties, rights and interests, or in connection with the treating, handling,
storing, processing, transporting or marketing of oil, gas, other hydrocarbons,
or other minerals produced from (or allocated to) such properties, rights and
interests; and
F.
All
rights, estates, powers and privileges appurtenant to the foregoing rights,
interests and properties.
TO HAVE
AND TO HOLD (a) the Deed of Trust Mortgaged Properties unto the Trustee, and its
successors or substitutes in this trust, and to its or their successors and
assigns, in trust, however, upon the terms, provisions and conditions herein set
forth, and (b) the Other Mortgaged Properties unto Agent, and Agent’s successors
and assigns, upon the terms, provisions and conditions herein set forth (the
Deed of Trust Mortgaged Properties and the Other Mortgaged Properties are herein
sometimes collectively called the “
Mortgaged
Properties
”).
As used
throughout this Mortgage, the term “Trustee” shall mean with respect to all of
the Deed of Trust Mortgaged Properties which are located in (or which cover
properties located in) the State of Texas, Jay Chernosky whose address is 1001
Fannin Street, Suite 2255, Houston, Texas 77002
.
Section
1.2
Grant of Security
Interest
. In order to further secure the payment of the
secured indebtedness hereinafter referred to and the performance of the
obligations, covenants, agreements, warranties, and undertakings of Mortgagor
hereinafter described, Mortgagor hereby grants to Agent (as defined in Section
1.3(a) below) a security interest in the entire interest of Mortgagor (whether
now owned or hereafter acquired by operation of law or otherwise) in and
to:
(a)
to the
extent a security interest may be created therein, the Mortgaged
Properties;
(b)
all oil,
gas, other hydrocarbons, and other minerals produced from or allocated to the
Mortgaged Properties, and any products processed or obtained therefrom (herein
collectively called the “
Production
”),
together with all proceeds of Production (regardless of whether Production to
which such proceeds relate occurred on or before or after the date hereof), and
together with all liens and security interests securing payment of the proceeds
of the Production, including, but not limited to, those liens and security
interests provided for under (i) statutes enacted in the jurisdictions in which
the Mortgaged Properties are located, or (ii) statutes made applicable to the
Mortgaged Properties under federal law (or some combination of federal and state
law);
(c)
without
limitation of any other provisions of this Section 1.2, all payments received in
lieu of production from the Mortgaged Properties (regardless of whether such
payments accrued, and/or the events which gave rise to such payments occurred,
on or before or after the date hereof), including, without limitation, “take or
pay” payments and similar payments, payments received in settlement of or
pursuant to a judgment rendered with respect to take or pay or similar
obligations or other obligations under a production sales contract, payments
received in buyout or buydown or other settlement of a production sales
contract, and payments received under a gas balancing or similar agreement as a
result of (or received otherwise in settlement of or pursuant to judgment
rendered with respect to) rights held by Mortgagor as a result of Mortgagor
(and/or its predecessors in title) taking or having taken less gas from lands
covered by a Mortgaged Property (or lands pooled or unitized therewith) than
their ownership of such Mortgaged Property would entitle them to receive (the
payments described in this subsection (c) being herein called “
Payments
in Lieu of Production
”);
(d)
all
equipment, inventory, improvements, fixtures, accessions, goods and other
personal property or movable property of whatever nature now or hereafter
located on or used or held for use in connection with the Mortgaged Properties
(or in connection with the operation thereof or the treating, handling, storing,
processing, transporting, or marketing of Production), and all licenses and
permits of whatever nature now or hereafter used or held for use in connection
with the Mortgaged Properties (or in connection with the operation thereof or
the treating, handling, storing, processing, transporting, or marketing of
Production), and all renewals or replacements of the foregoing or substitutions
for the foregoing;
(e)
all
contract rights, choses in action (i.e., rights to enforce contracts or to bring
claims thereunder), commercial tort claims and other general intangibles
(regardless of whether the same arose, and/or the events which gave rise to the
same occurred, on or before or after the date hereof) related to the Mortgaged
Properties, the operation thereof (whether Mortgagor is operator or
non-operator), or the treating, handling, storing, processing, transporting, or
marketing
of Production (including, without limitation, any of the same relating to
payment of proceeds of Production or to payment of amounts which could
constitute Payments in Lieu of Production);
(f)
Without
limitation of the generality of the foregoing, any rights and interests of
Mortgagor under any present or future hedge or swap agreements, cap, floor,
collar, exchange, forward or other hedge or protection agreements or
transactions relating to crude oil, natural gas or other hydrocarbons, or any
option with respect to any such agreement or transaction now existing or
hereafter entered into by or on behalf of Mortgagor;
(g)
all
geological, geophysical, engineering, accounting, title, legal, and other
technical or business data concerning the Mortgaged Properties, the Production
or any other item of Property (as hereinafter defined) which are now or
hereafter in the possession of Mortgagor or in which Mortgagor can otherwise
grant a security interest, and all books, files, records, magnetic media,
software and other forms of recording or obtaining access to such
data;
(h)
all
money, documents, instruments, chattel paper (including without limitation,
electronic chattel paper and tangible chattel paper), rights to payment
evidenced by chattel paper, securities, accounts, payment intangibles, general
intangibles, letters of credit, letter-of-credit rights, supporting obligations
and rights to payment of money arising from or by virtue of any transaction
(regardless of whether such transaction occurred on or before or after the date
hereof) related to the Mortgaged Properties, the Production or any other item of
Property;
(i)
all
rights, titles and interests now owned or hereafter acquired by Mortgagor in any
and all goods, inventory, equipment, as-extracted collateral, documents, money,
instruments, intellectual property, certificated securities, uncertificated
securities, investment property, letters of credit, rights to proceeds of
written letters of credit and other letter-of-credit rights, commercial tort
claims, deposit accounts, payment intangibles, general intangibles, contract
rights, chattel paper (including, without limitation, electronic chattel paper
and tangible chattel paper), rights to payment evidenced by chattel paper,
software, supporting obligations and accounts, wherever located, and all rights
and privileges with respect thereto (all of the properties, rights and interests
described in subsections (a), (b), (c), (d), (e), (f), (g) and (h) above and
this subsection (i) being herein sometimes collectively called the “
Collateral
”);
and
(j)
all
proceeds of the Collateral, whether such proceeds or payments are goods, money,
documents, instruments, chattel paper, securities, accounts, payment
intangibles, general intangibles, fixtures, real/immovable property, personal/
movable property or other assets (the Mortgaged Properties, the Collateral and
the proceeds of the Collateral being herein sometimes collectively called the
“
Property
”).
Except as
otherwise expressly provided in this Mortgage, all terms in this Mortgage
relating to the Collateral and the grant of the foregoing security interest
which are defined in the Texas Uniform Commercial Code (the “
UCC
”)
shall have the meanings assigned to them in Article 9 (or, absent definition in
Article 9, in any other Article) of the UCC, as those meanings may be amended,
revised or replaced from time to time. Notwithstanding the foregoing, the
parties intend that the terms used herein which are defined in the UCC have, at
all times, the broadest and most inclusive meanings possible. Accordingly, if
the UCC shall in the future be amended or
held by a
court to define any term used herein more broadly or inclusively than the UCC in
effect on the date of this Mortgage, then such term, as used herein, shall be
given such broadened meaning. If the UCC shall in the future be amended or held
by a court to define any term used herein more narrowly, or less inclusively,
than the UCC in effect on the date of this Mortgage, such amendment or holding
shall be disregarded in defining terms used in this Mortgage
Section
1.3
Secured
Indebtedness
. This Mortgage is executed and delivered by the
Mortgagor to secure and enforce the payment and performance of the
following:
(a) Payment
of and performance of any and all indebtedness, obligations and liabilities,
whether now in existence or hereafter arising,
whether by acceleration or otherwise, including the principal of,
interest
on
(including, without limitation,
interest accruing after the maturity of the “Loans” (as defined in the
hereinafter defined Credit Agreement) made by each Lender and interest accruing
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Mortgagor,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) of the Mortgagor
and all other
amounts, payments and premiums due
under or in connection with that
certain Third Amended and Restated Credit Agreement dated as of the Effective
Date, by and among Mortgagor, Wachovia Bank, National Association, as
Administrative Agent (in such capacity, together with its successors in such
capacity, by operation of law or as otherwise provided in the hereinafter
defined Credit Agreement, the “
Agent
”) and the Lenders from
time to time party thereto, and as the same may from time to time be amended or
supplemented, the “
Credit
Agreement
”) or any other “Loan Document” (as defined in the Credit
Agreement), including, without limitation, the “Notes” (as defined in the Credit
Agreement) in the aggregate original principal amount of $678,000,000 with final
maturity on or before July 31, 2012, and further including any additional Loans
or any increases to the Loans which may be made pursuant to the Credit
Agreement; provided, the Lenders have no obligation to make any such additional
Loans or increase.
(b) Payment
and performance of any and all indebtedness, obligations and liabilities of any
Guarantor (as defined in the Credit Agreement) whether now existing or hereafter
arising under or in connection with the “Guaranty Agreement” (as defined in the
Credit Agreement).
(c) Any
sums which may be advanced or paid by the Agent or any Lender under the terms
hereof or of the Credit Agreement or any Loan Document on account of the failure
of the Mortgagor to comply with the covenants of the Mortgagor contained herein
or in the Credit Agreement or any other Loan Document; and all other
indebtedness of the Mortgagor arising pursuant to the provisions of this
Mortgage.
(d) Payment
of and performance of any and all present or future obligations of the Mortgagor
according to the terms of any present or future interest rate or currency swap,
rate cap, rate floor, rate collar, 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 the Mortgagor and any Lender or
any Affiliate (as defined in the Credit Agreement) of such Lender.
(e) Payment
of and performance of any and all present or future obligations of the Mortgagor
according to the terms of any present or future swap agreements, cap, floor,
collar, forward agreement or other exchange or protection agreements relating to
crude oil, natural gas or other hydrocarbons or any option with respect to any
such transaction now existing or hereafter entered into between the Mortgagor
and any Lender or any Affiliate of such Lender.
(f) Performance
of all “Letter of Credit Agreements” (as defined in the Credit Agreement)
executed from time to time by Mortgagor or any Subsidiary of the Mortgagor under
or pursuant to the Credit Agreement and all reimbursement obligations for drawn
or undrawn portions under any “Letter of Credit” (as defined in the Credit
Agreement) now outstanding or hereafter issued under or pursuant to the Credit
Agreement.
(g)
All renewals, extensions, amendments, increases and
changes of, or substitutions or replacements for, all or any part of the
obligations described under paragraphs (a) through (f) in this Section
1.3.
Section
1.4
Secured
Indebtedness
. The indebtedness referred to in Section 1.3, and
all renewals, extensions and modifications thereof, and all substitutions
therefor, in whole or in part, are herein sometimes referred to as the “secured
indebtedness” or the “indebtedness secured hereby.” It is
contemplated and acknowledged that the
secured indebtedness may
include revolving credit loans and advances from time to time, and that this
Mortgage shall have effect, as of the date hereof, to secure all secured
indebtedness, regardless of whether any amounts are advanced on the date hereof
or on a later date or, whether having been advanced, are later repaid in part or
in whole and further advances made at a later date.
Section
1.5
MAXIMUM
SECURED AMOUNT
. NOTWITHSTANDING ANY PROVISION HEREOF TO THE
CONTRARY, THE OUTSTANDING INDEBTEDNESS SECURED BY PROPERTY LOCATED IN THE STATES
OF LOUISIANA, MONTANA OR NEW MEXICO SHALL NOT, AT ANY TIME OR FROM TIME TO TIME,
EXCEED AN AGGREGATE MAXIMUM AMOUNT OF $1,500,000,000.
Section
1.6
Line of
Credit Mortgage
. THIS INSTRUMENT SECURES A LINE OF CREDIT USED
PRIMARILY FOR BUSINESS, COMMERCIAL, OR AGRICULTURAL PURPOSES. THIS MORTGAGE WILL
CONSTITUTE A LINE OF CREDIT MORTGAGE IN ACCORDANCE WITH SECTION 48-7-4.B NMSA
1978 COMP.
ARTICLE
II.
Representations, Warranties
and Covenants
Section
2.1
Mortgagor
represents, warrants, and covenants as follows to the extent that any violation
of such representations, warranties or covenants shall not individually or
collectively created a Material Adverse Effect regarding the Property
:
(a)
Title and Permitted
Encumbrances
. Mortgagor has, and Mortgagor
covenants to maintain,
good and defensible title to the Property, free and clear of all liens, security
interests, and encumbrances except for (i) the contracts, agreements, burdens,
encumbrances and other matters set forth in the descriptions of certain of the
Mortgaged Properties on
Exhibit A
hereto,
(ii) the
liens and security interests evidenced by this Mortgage, (iii) statutory liens
for taxes which are not yet delinquent, (iv) liens under operating agreements,
pooling orders and unitization agreements, and mechanics’ and materialmen’s
liens, with respect to obligations which are not yet due, and (v) other liens
and security interests (if any) in favor of Agent (the matters described in the
foregoing clauses (i), (ii), (iii), (iv), and (v) being herein called the “
Permitted
Encumbrances
”); Mortgagor will warrant and defend title to the Property,
subject as aforesaid, against the claims and demands (including claims which
would be a Permitted Encumbrance under items (iii) and (iv) above) of all
persons claiming or to claim the same or any part thereof. Without limitation of
the foregoing, the ownership by Mortgagor of the Mortgaged Properties does and
will, with respect to each well or unit identified on
Schedule I
, attached
hereto and made a part hereof, entitle Mortgagor to receive (subject to the
terms and provisions of this Mortgage) a decimal or percentage share of the oil,
gas and other hydrocarbons produced from, or allocated to, such well or unit
equal to not less than the decimal or percentage share set forth, for such well
or unit, in the column headed “Net Revenue Interest” (or words of similar
import) on
Schedule
I
, and cause Mortgagor to be obligated to bear a decimal or percentage
share of the cost of operation of such well or unit equal to not more than the
decimal or percentage share set forth, for such well or unit, in the column
headed “Working Interest” (or words of similar import) on
Schedule I
. The
above-described shares of production which Mortgagor is entitled to receive and
shares of expenses which Mortgagor is obligated to bear are not and will not be
subject to change (other than changes which arise pursuant to non-consent
provisions of operating agreements described in
Exhibit A
in
connection with operations hereafter proposed), except, and only to the extent
that, such changes are reflected in
Schedule I
. There is
not and will not be any unexpired financing statement covering any part of the
Property on file in any public office naming any party other than Agent as
secured party. Upon request by Agent, Mortgagor will deliver to Agent schedules
of all internal and third party information identifying the Mortgaged Properties
(such as, for example, lease names and numbers assigned by Mortgagor or the
operator of any Mortgaged Property, well and/or unit and/or property names and
numbers assigned by purchasers of Production, and internal identification names
and numbers used by Mortgagor in accounting for revenues, costs, and joint
interest transactions attributable to the Mortgaged Properties). The listing of
Permitted Encumbrances above is made for the purpose of limiting certain
warranties and covenants made by Mortgagor herein; such listing is not intended
to affect the description herein of the Mortgaged Properties nor to subordinate
the liens and security interests hereunder to any Permitted
Encumbrances.
(b)
Leases and Contracts;
Performance of Obligations
. The oil, gas and/or mineral leases,
contracts, servitudes and other agreements forming a part of the Property, to
the extent the same cover or otherwise relate to the Property, are in full force
and effect, and Mortgagor agrees to so maintain them in full force and effect.
All rents, royalties and other payments due and payable under such leases,
contracts, servitudes and other agreements, or under the Permitted Encumbrances,
or otherwise attendant to the ownership or operation of the Property, have been,
and will continue to be, properly and timely paid. Mortgagor is not in default
with respect to Mortgagor’s obligations (and Mortgagor is not aware of any
default by any third party with respect to such third party’s
obligations) under such
leases, contracts, servitudes and other agreements, or under the Permitted
Encumbrances, or otherwise attendant to the ownership or operation of any part
of the Property, where such default could adversely affect the ownership or
operation of the Property; Mortgagor will fulfill all such obligations coming
due in the future. There are no situations where Mortgagor is aware that a
contingent liability may exist to account
on a
basis less favorable to Mortgagor than on the basis on which Mortgagor is
currently accounting.
(c)
Sale of
Production
. No Mortgaged Property is or will become subject to
any contractual or other arrangement (i) whereby payment for production is or
can be deferred for a substantial period after the month in which such
production is delivered (i.e., for wells in pay status, in the case of oil, not
in excess of 60 days, and in the case of gas, not in excess of 90 days, and for
wells not in pay status, the time period provided by statute) or (ii) whereby
payments are made to Mortgagor other than by checks, drafts, wire transfer
advises or other similar writings, instruments or communications for the
immediate payment of money. Except for production sales contracts, processing
agreements or transportation agreements (or other agreements relating to the
marketing of Production) listed on
Exhibit A
(in
connection with the Mortgaged Properties to where they relate), and except as
otherwise disclosed to the Agent in writing, (i) no Mortgaged Property is or
will become subject to any contractual or other arrangement for the sale,
processing or transportation of Production (or otherwise related to the
marketing of Production) which cannot be cancelled on 120 days’ (or less) notice
and (ii) all contractual or other arrangements for the sale, processing or
transportation of Production (or otherwise related to the marketing of
Production) shall be bona fide transactions, and except for contractual and
other arrangements with Four Winds Marketing, LLC, will be with third parties
not affiliated with Mortgagor, and shall, with respect to all contracts and
other arrangements be at the best price (and on the best terms) then available
(such price shall, in the case of Production sales which are subject to price
controls, be determined giving consideration to such fact). Mortgagor is
presently receiving a price for all production from (or attributable to) each
Mortgaged Property covered by a production sales contract listed on
Exhibit A
as computed
in accordance with the terms of such contract, and is not having deliveries of
production from such Mortgaged Property curtailed substantially below such
property’s delivery capacity. Neither Mortgagor, nor any of its predecessors in
title, has received prepayments (including, but not limited to, payments for gas
not taken pursuant to “take or pay” or other similar arrangements) for any oil,
gas or other hydrocarbons produced or to be produced from the Mortgaged
Properties after the date hereof, and Mortgagor hereby covenants not to enter
into any such advance or prepayment arrangements whereby it accepts
consideration for oil, gas or other hydrocarbons not yet produced. No Mortgaged
Property is or will become subject to any “take or pay” or other similar
arrangement (i) which can be satisfied in whole or in part by the production or
transportation of gas from other properties or (ii) as a result of which
production from the Mortgaged Properties may be required to be delivered to one
or more third parties without payment (or without full payment) therefor as a
result of payments made, or other actions taken, with respect to other
properties. To the best of Mortgagor’s knowledge, the gas imbalances set forth
in Schedule 7.19 of the Credit Agreement reflects the net gas balancing position
of the Mortgaged Properties as of the Effective Date (as such term is defined in
the Credit Agreement). Except as otherwise disclosed to Agent in
writing, as of December 31, 2008, there is no Mortgaged Property with respect to
which Mortgagor, or its predecessors in title, has, prior to such date, taken
more (“overproduced”), or less (“underproduced”), gas from the lands covered
thereby (or pooled or unitized therewith) than its ownership interest in such
Mortgaged Property would entitle it to take which has resulted, on such date, in
Mortgagor being materially overproduced or materially underproduced with respect
to such Mortgaged Property. Mortgagor will not after the date hereof become
“overproduced” (as above defined) with respect to any well on the Mortgaged
Properties (or on any unit in which the Mortgaged Properties participate), in an
amount in excess of Mortgagor’s
share of
gas produced from such well during the preceding four calendar months. No
Mortgaged Property is or will become subject to a gas balancing arrangement
under which one or more third parties may take a portion of the production
attributable to the Mortgaged Property without payment (or without full payment)
therefor as a result of production having been taken from, or as a result of
other actions or inactions with respect to, other properties. No Mortgaged
Property is subject at the present time to any regulatory refund obligation and,
to the best of Mortgagor’s knowledge, no facts exist which might cause the same
to be imposed.
(d)
Condition of Personal or
Movable Property
. The equipment, inventory, improvements,
fixtures, goods and other tangible personal/movable property forming a part of
the Property are and will remain (and with respect to Property not operated by
Mortgagor, to the best of Mortgagor’s knowledge, such equipment, inventory,
fixtures, goods and other tangible personal/movable property are and will
remain) in good repair and condition and are and will be adequate for the normal
operation of the Property in accordance with prudent industry standards; all of
such Property is, and will remain, located on the Mortgaged Properties, except
for that portion thereof which is or shall be located elsewhere (including that
usually located on the Mortgaged Properties but temporarily located elsewhere)
in the course of the normal operation of the Property, or which is hereafter
sold or otherwise disposed of as permitted under the Credit
Agreement.
(e)
Operation of Mortgaged
Properties
. The Mortgaged Properties, and with respect to
Mortgaged Properties not operated by Mortgagor, to the best of Mortgagor’s
knowledge, such non-operated Mortgaged Properties, (and properties unitized
therewith) are being (and, to the extent the same could adversely affect the
ownership or operation of the Mortgaged Properties after the date hereof, have
in the past been), and hereafter will be, maintained, operated and developed in
a good and workmanlike manner, in accordance with prudent industry standards and
in conformity with all applicable laws and all rules, regulations and orders of
all duly constituted authorities having jurisdiction and in conformity with all
oil, gas and/or other mineral leases and other contracts and agreements forming
a part of the Property and in conformity with the Permitted Encumbrances;
specifically in this connection, (i) no Mortgaged Property is subject to having
allowable production after the date hereof reduced below the full and regular
allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) prior to
the date hereof and (ii) none of the wells located on the Mortgaged Properties
(or properties unitized therewith) are or will be deviated from the vertical
more than the maximum permitted by applicable laws, regulations, rules and
orders, and such wells are, and will remain, bottomed under and producing from,
with the well bores wholly within, the Mortgaged Properties (or, in the case of
wells located on properties unitized therewith, such unitized properties). There
are no wells listed on
Schedule I
hereto
(“
Schedule I Wells
”)
being redrilled, deepened, plugged back or reworked, and no other operations are
being conducted for which consent is required under the applicable operating
agreement (or which are other than normal operation of existing wells on the
Mortgaged Properties); except as otherwise disclosed to Agent in writing, there
are no proposals in excess of $1,500,000 net to Mortgagor’s interest currently
outstanding (whether made by Mortgagor or by any other party) to re-drill,
deepen, plug back, or rework Schedule I Wells, or to conduct any other
operations under the applicable joint operating agreement, or to abandon any
Schedule I Wells (nor are there any such proposals which have been approved
either by Mortgagor or any other party, with respect to which the operations
covered thereby have not been commenced).
Except as
otherwise disclosed to Agent in writing, there are no dry holes, or otherwise
inactive wells, located on the Mortgaged Properties or on lands pooled or
unitized therewith (including, without limitation, any wells which would, if
located in Texas, require compliance with Railroad Commission Rule 14(b)(2))
that in the aggregate will cost more than $1,500,000, net to Mortgagor’s
interest and net of salvage proceeds, to plug and abandon, except for wells that
have been properly plugged and abandoned that have not been taken into account
in Mortgagor’s financial statements as furnished to Agent. Mortgagor has, and
will have in the future, all governmental licenses and permits necessary or
appropriate to own and operate the Property; Mortgagor has not received notice
of any violations in respect of any such licenses or permits.
(f)
Sale or
Disposal
. Mortgagor will not, without the prior written
consent of Agent, sell, exchange, lease, transfer, or otherwise dispose of any
part of, or interest in, the Property other than (i) sales, transfers and other
dispositions of machinery, equipment and other personal/ movable property and
fixtures made in connection with a release, surrender or abandonment of a lease,
(ii) sales, transfers and other dispositions of machinery, equipment and other
personal/movable property and fixtures in connection with the abandonment of a
well, (iii) sales, transfers and other dispositions of machinery, equipment and
other personal/movable property and fixtures which are (A) obsolete for their
intended purpose and disposed of in the ordinary course of business or (B)
replaced by articles of at least equal suitability and value owned by Mortgagor
free and clear of all liens except this Mortgage and the Permitted Encumbrances,
(iv) sales of Production which are made in the ordinary course of business and
in compliance with Section 2.1(c) hereof; provided that nothing in clause (iv)
shall be construed as limiting Agent’s rights under Article III of this
Mortgage, and (v) sales, transfers and other dispositions of oil and gas leases,
but only to the extent such sale, transfer or other disposition is in the
ordinary course of business and does not materially and adversely affect the
value of the Property in the aggregate. In the event and during the continuation
of a default (as hereinafter defined), Mortgagor shall at all times keep the
Property and its proceeds separate and distinct from other property of Mortgagor
and shall keep accurate and complete records of the Property and its
proceeds.
(g)
Suits and
Claims
. Except as otherwise disclosed to Agent in writing,
there are no Suits, actions, claims, investigations, inquiries, proceedings or
demands pending (or, to the best of Mortgagor’s knowledge, threatened) which
affect the Properties (including, without limitation, any which challenge or
otherwise pertain to Mortgagor’s title to the Properties) and no judicial or
administrative actions, suits or proceedings pending (or, to the best of
Mortgagor’s knowledge, threatened) against Mortgagor. Notwithstanding the
foregoing, Mortgagor’s representation in this Section with respect to pending
suits, actions, claims, investigations, inquiries, proceedings or demands which
affect Properties which are not operated by Mortgagor, except those pertaining
to Mortgagor’s title to such non-operated Properties, will be limited to the
best of Mortgagor’s knowledge.
(h)
Environmental
.
(A)
Current Status
. The
Property (and with respect to Property not operated by Mortgagor, to the best of
Mortgagor’s knowledge, such non-operated Property) and Mortgagor are not in
material violation of Applicable Environmental Laws (as defined below), or
subject to any existing, pending or, to the best knowledge of Mortgagor,
threatened
investigation or inquiry by any governmental authority or any other person under
or with respect to Applicable Environmental Laws, or subject to any remedial
obligations under Applicable Environmental Laws, and are in compliance with all
permits and licenses required under Applicable Environmental Laws, and this
representation will continue to be true and correct following disclosure to the
applicable governmental authorities of all relevant facts, conditions and
circumstances, if any, pertaining to the Property and Mortgagor. “
Applicable Environmental Laws
”
shall mean any applicable laws, orders, rules, or regulations (including,
without limitation, the common law) pertaining to safety, health or the
environment, as such laws, orders, rules or regulations now exist or are
hereafter enacted and/or amended. Applicable Environmental Laws include, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 (as amended, hereinafter called “
CERCLA
”), the Resource
Conservation and Recovery Act of 1976, as amended by the Used Oil Recycling Act
of 1980, the Solid Waste Disposal Act Amendments of 1980, and the Hazardous and
Solid Waste Amendments of 1984 (as amended, hereinafter called “
RCRA
”) and applicable state
and local law). Mortgagor undertook, at the time of acquisition of the Property,
all appropriate inquiry into the previous ownership and uses of the Property
consistent with good commercial or customary practice. Mortgagor has taken all
commercial and reasonable steps necessary to determine and has determined that
no hazardous substances or solid wastes have been disposed of or otherwise
released at, into, upon or under the Property. The use which Mortgagor makes and
intends to make of the Property will not result in the use, treatment, storage
or disposal or other release of any hazardous substance or solid waste at, into,
upon or under the Property, except such usage, and temporary storage in
anticipation of usage, as is in the ordinary course of business and in
compliance with Applicable Environmental Laws. The terms “hazardous substance”
and “release” as used in this Mortgage shall have the meanings specified in
CERCLA, and the terms “solid waste” and “disposal” (or “disposed”) shall have
the meanings specified in RCRA; provided, in the event either CERCLA or RCRA is
amended so as to broaden the meaning of any term defined thereby, such broader
meaning shall apply subsequent to the effective date of such amendment and
provided further, to the extent that the laws of the states in which the
Mortgaged Properties are located establish a meaning for “hazardous substance,”
“release,” “solid waste,” or “disposal” which is broader than that specified in
either CERCLA or RCRA, such broader meaning shall apply. The “Associated
Property” (as such term is hereinafter defined) is not in violation of any
Applicable Environmental Laws for which Mortgagor or its predecessors in the
Property would be responsible. The term “
Associated Property
” as used
in this Mortgage shall mean any and all interests in and to (and or carved out
of) the lands which are described or referred to in
Exhibit A
hereto, or
which are otherwise described in any of the oil, gas and/or mineral leases or
other instruments described in or referred to in such
Exhibit A
, whether or
not such property interests are owned by Mortgagor.
(B)
Future Performance
.
Mortgagor will use its best efforts not to cause or permit the Property or the
Associated Property or Mortgagor to be in material violation of, or do anything
or permit anything to be done which will subject the Property or the Associated
Property to any material remedial obligations under, or result in material
noncompliance
with applicable permits and licenses under, any Applicable Environmental Laws,
assuming disclosure to the applicable governmental authorities of all relevant
facts, conditions and circumstances, if any, pertaining to the Property or the
Associated Property and Mortgagor will promptly notify Agent in writing of any
existing, pending or, to the best knowledge of Mortgagor, threatened
investigation, claim, suit or inquiry by any governmental authority or any
person in connection with any Applicable Environmental Laws, provided that, with
respect to Properties not operated by Mortgagor, Mortgagor shall notify Agent of
any investigations, claims, suits or inquiries, whether existing, pending, or
threatened, of which Mortgagor becomes aware. Mortgagor will take all steps
reasonably necessary to determine that no hazardous substances or solid wastes
have been disposed of or otherwise released on or to the Property or the
Associated Property. Mortgagor will use commercial and reasonable efforts not to
cause or permit the disposal or other release of any hazardous substance or
solid waste at, into, upon or under the Property or the Associated Property and
covenants and agrees to keep or cause the Property and/or the Associated
Property to be kept free of any hazardous substance or solid waste (except such
use, and temporary storage in anticipation of use, as is required in the
ordinary course of business, all while in compliance with Applicable
Environmental Laws), and to remove the same (or if removal is prohibited by law,
to take whatever action is required by law) promptly upon discovery at its sole
expense. Upon Agent’s reasonable request, at any time and from time to time
during the existence of this Mortgage, Mortgagor will provide at Mortgagor’s
sole expense an inspection or audit of the Property and the Associated Property
from an engineering or consulting firm approved by Agent, indicating the
presence or absence of hazardous substances and solid waste on the Property
and/or the Associated Property and compliance with Applicable Environmental
Laws. In the event of a violation, Mortgagor will diligently work to cure such
violation, including remediation, if necessary, and so long as Mortgagor
diligently prosecutes efforts to cure the violation, Mortgagor will not be in
breach of this provision.
(i)
Not Abandon Wells;
Participate in Operations
. Mortgagor will not, without prior written
consent of Agent, abandon, or consent to the abandonment of, any well producing
from the Mortgaged Properties (or properties unitized therewith) so long as such
well is capable (or is subject to being made capable through drilling, reworking
or other operations which it would be commercially feasible to conduct) of
producing oil, gas, or other hydrocarbons or other minerals in commercial
quantities (as determined without considering the effect of this Mortgage). In
the event and during the continuation of a default, Mortgagor will not, without
prior written consent of Agent, elect not to participate in a proposed operation
on the Mortgaged Properties where the effect of such election would be the
forfeiture either temporarily (i.e. until a certain sum of money is received out
of the forfeited interest) or permanently of any material interest in the
Mortgaged Properties.
(j)
Defense of Mortgage
.
If the validity or priority of this Mortgage or of any rights, titles, liens or
security interests created or evidenced hereby with respect to the Property or
any part thereof or the title of Mortgagor to the Property shall be endangered
or questioned or shall be attacked directly or indirectly or if any legal
proceedings are instituted against Mortgagor with respect thereto, Mortgagor
will give prompt written notice thereof to Agent and at Mortgagor’s own cost and
expense will diligently endeavor to cure any defect that may be developed or
claimed, and will take all necessary and proper steps for the defense of such
legal proceedings,
including,
but not limited to, the employment of counsel, the prosecution or defense of
litigation and the release or discharge of all adverse claims, and Trustee and
Agent, or either of them (whether or not named as parties to legal proceedings
with respect thereto), are hereby authorized and empowered to take such
additional steps as in their judgment and discretion may be necessary or proper
for the defense of any such legal proceedings or the protection of the validity
or priority of this Mortgage and the rights, titles, liens and security
interests created or evidenced hereby, including but not limited to the
employment of independent counsel, the prosecution or defense of litigation, the
compromise or discharge of any adverse claims made with respect to the Property,
the purchase of any tax title and the removal of prior liens or security
interests, and all reasonable expenditures so made of every kind and character
shall be a demand obligation (which obligation Mortgagor hereby expressly
promises to pay) owing by Mortgagor to Agent or Trustee (as the case may be) and
shall bear interest from the date expended until paid at the rate described in
Section 2.3 hereof, and the party incurring such expenses shall be subrogated to
all rights of the person receiving such payment.
(k)
Fees and Expenses;
Indemnity
. Mortgagor will pay all reasonable appraisal fees, recording
fees, taxes, brokerage fees and commissions, abstract and other records search
fees, attorneys’ fees and expenses and all other reasonable costs and expenses
of every character incurred by Mortgagor or Agent or any Lender in connection
with the closing of the loan or loans evidenced by the Loan Documents and any
and all amendments, supplements or modifications to such loan transaction or
transactions. Mortgagor will reimburse Trustee, Agent and each Lender (for
purposes of this paragraph, the terms “Trustee”, “Agent” and “Lender” shall
include the directors, officers, partners, employees and agents of Trustee,
Agent or any Lender, respectively, and any persons or entities owned or
controlled by or affiliated with Trustee, Agent or any Lender, respectively) for
all expenditures, including reasonable attorneys’ fees and expenses, incurred or
expended in connection with (i) the breach by Mortgagor of any covenant,
agreement or condition contained herein or in any other Loan Document, (ii) the
exercise of any rights and remedies hereunder or under any other Loan Document,
and (iii) the protection of the Property and/or liens and security interests
therein. Mortgagor will indemnify and hold harmless Trustee, Agent and each
Lender from and against (and will reimburse such indemnified parties for) all
claims, demands, liabilities, losses, damages (including, without limitation
consequential damages), causes of action, judgments, penalties, costs and
expenses (including, without limitation reasonable attorneys’ fees and expenses)
which may be imposed upon, asserted against or incurred or paid by the Trustee,
the Agent or any Lender on account of, in connection with, or arising out of (A)
any bodily injury or death or natural resource, human health or property damage
occurring in, at, into, under or upon (or, to the extent such injury, death or
damage is related to Mortgagor or Mortgagor’s ownership or operation of the
Property, in the vicinity of) the Property through any cause whatsoever, (B) any
act performed or omitted to be performed hereunder or the breach of any
representation or warranty herein, (C) the exercise of any rights and remedies
hereunder or under any other Loan Document, (D) any transaction, act, omission,
event or circumstance arising out of or in any way connected with the Property
or with this Mortgage or any other Loan Document, (E) any violation on or prior
to the Release Date (as hereinafter defined) of any Applicable Environmental
Law, (F) any act, omission, event or circumstance existing or occurring on or
prior to the Release Date (including without limitation the presence on or under
the Property or the Associated Property or release at, into, upon, under or from
the Property or the Associated Property of hazardous substances or solid wastes
disposed of or otherwise released) resulting from or in connection with the
ownership,
construction, occupancy, operation, use and/or maintenance of the Property or
the Associated Property, regardless of whether the act, omission, event or
circumstance constituted a violation of any Applicable Environmental Law at the
time of its existence or occurrence, and (G) any and all claims or proceedings
(whether brought by private party or governmental agencies) for human health,
bodily injury, property damage, abatement or remediation, environmental damage,
cleanup, mitigation, removal, natural resource damage or impairment or any other
injury or damage resulting from or relating to any hazardous or toxic substance,
solid waste or contaminated material located upon or migrating into, from or
through the Property or the Associated Property (whether or not the release of
such materials was caused by Mortgagor, a tenant or subtenant or a prior owner
or tenant or subtenant on the Property or the Associated Property and whether or
not the alleged liability is attributable to the use, treatment, handling,
storage, generation, transportation, removal or disposal of such substance,
waste or material or the mere presence of such substance, waste or material on
or under the Property or the Associated Property), which the Trustee and/or the
Agent and/or any Lender may have liability with respect to due to the making
of
the loan or
loans evidenced by any Notes, the granting of this Mortgage, the exercise of any
rights under the Loan Documents, or otherwise. Agent shall have the right to
compromise and adjust any such claims, actions and judgments, and in addition to
the rights to be indemnified as herein provided, all amounts paid in compromise,
satisfaction or discharge of any such claim, action or judgment, and all court
costs, reasonable attorneys’ fees and other expenses of every character expended
by Agent, Trustee or any Lender pursuant to the provisions of this section shall
be a demand obligation (which obligation Mortgagor hereby expressly promises to
pay) owing by Mortgagor to the applicable party or parties. The “
Release Date
” as used herein
shall mean the earlier of the following two dates: (i) the date on which the
indebtedness and obligations secured hereby have been paid and performed in
full, or (ii) the date on which the lien of this Mortgage is foreclosed or a
deed in lieu of such foreclosure is fully effective and
recorded.
WITHOUT
LIMITATION, IT IS THE INTENTION OF MORTGAGOR AND MORTGAGOR AGREES THAT THE
FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO
CLAIMS, DEMANDS, LIABILITIES, LOSSES, DAMAGES, CAUSES OF ACTION, JUDGMENTS,
PENALTIES, COSTS AND EXPENSES (INCLUDING WITHOUT LIMITATION REASONABLE
ATTORNEYS’ FEES) WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE
NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNIFIED
PARTY.
However, such indemnities shall not apply to any
particular indemnified party (but shall apply to the other indemnified parties)
to the extent the subject of the indemnification is caused by or arises out of
and (x) are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such indemnitee
or (y) result from a
claim brought by the Mortgagor or any Guarantor against an indemnitee for a
material breach in bad faith of such indemnitee's obligations under this
Mortgage,
any other Loan Document or any agreement or instrument
contemplated hereby or thereby
, if the Mortgagor or such
Guarantor has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction
. The foregoing
indemnities shall not terminate upon the Release Date or upon the release,
foreclosure or other termination of this Mortgage but will survive the Release
Date, foreclosure of this Mortgage or conveyance in lieu of foreclosure, and the
repayment of the secured indebtedness and the discharge and release of this
Mortgage and the other documents evidencing and/or securing the secured
indebtedness. Any amount to be paid hereunder by
Mortgagor
to Agent, Trustee and/or any Lender shall be a demand obligation owing by
Mortgagor to the applicable party or parties and shall be subject to and covered
by the provisions of Section 2.3 hereof.
(l)
Insurance
. Mortgagor
will keep (and with respect to Property not operated by Mortgagor, will use its
best efforts to keep) such part of the Property which is of an insurable nature
and of a character usually insured by persons operating similar properties,
insured with companies of recognized responsibility satisfactory to Agent and in
such amounts as are acceptable to Agent (and in the absence of specification of
such amounts by Agent, in the amount of the full value of such property, less
reasonable deductibles not to exceed deductibles customary in the industry for
similarly situated businesses and properties), against loss or damage by fire,
casualty and from other hazards customarily insured against by persons operating
similar properties. Mortgagor shall also provide such other insurance as Agent
may from time to time reasonably require; such coverage to be carried with
companies of recognized responsibility satisfactory to Agent. All policies
evidencing such insurance shall contain clauses providing that the proceeds
thereof shall be payable to Agent as its interest may appear and providing that
such policies may not be cancelled, reduced or otherwise affected without at
least thirty (30) days prior written notice to Agent. Upon request by Agent,
Mortgagor shall deliver to Agent the original policies, evidence of payment of
premiums, certificates evidencing renewals, and such other information regarding
such insurance as Agent may request. In the event of any loss under any
insurance policies so carried by Mortgagor, Agent shall have the right (but not
the obligation) to make proof of loss and collect the same, and all amounts so
received shall be applied toward costs, charges and expenses (including
reasonable attorneys’ fees), if any, incurred in the collection thereof, then to
the payment, in the order determined by Agent in its own discretion, of the
secured indebtedness, and any balance remaining shall be subject to the order of
Mortgagor. Agent is hereby authorized but not obligated to enforce in its name
or in the name of Mortgagor payment of any or all of said policies or settle or
compromise any claim in respect thereof, and to collect and make receipts for
the proceeds thereof and Agent is hereby appointed Mortgagor’s agent and
attorney-in-fact to endorse any check or draft payable to Mortgagor in order to
collect the proceeds of insurance. In the event of foreclosure of this Mortgage,
or other transfer of title to the Property in extinguishment in whole or in part
of the secured indebtedness, all right, title and interest of Mortgagor in and
to such policies then in force concerning the Property and all proceeds payable
thereunder shall thereupon vest in the purchaser at such foreclosure or other
transferee in the event of such other transfer of title. Mortgagor shall at all
times maintain adequate insurance against its liability on account of damages to
persons or property, which insurance shall be carried by companies of recognized
responsibility satisfactory to Agent, and shall be for such amounts and insure
against such risks as are customary in the industry for similarly situated
businesses and properties. Mortgagor shall at all times maintain cost of
regaining control of well insurance and similar insurance to the extent
customary in the industry in the pertinent area of operations.
(m)
Further Assurances
.
Mortgagor will, on request of Agent, (i) promptly correct any defect, error or
omission which may be discovered in the contents of this Mortgage, or in any
other Loan Document, or in the execution or acknowledgment of this Mortgage or
any other Loan Document; (ii) execute, acknowledge, deliver and record and/or
file such further instruments (including, without limitation, further deeds of
trust, mortgages, security agreements, financing statements, continuation
statements, and assignments of production, accounts, funds,
-15-
contract
rights, general intangibles, and proceeds) and do such further acts as may be
necessary, desirable or proper to carry out more effectively the purposes of
this Mortgage and the other Loan Documents and to more fully identify and
subject to the liens and security interests hereof any property intended to be
covered hereby, including specifically, but without limitation, any renewals,
additions, substitutions, replacements, or appurtenances to the Property; and
(iii) execute, acknowledge, deliver, and file and/or record any document or
instrument (including specifically any financing statement) desired by Agent to
protect the lien or the security interest hereunder against the rights or
interests of third persons. Mortgagor shall pay all costs connected with any of
the foregoing.
(n)
Name and Place of Business
and Formation
. Except as disclosed in the Credit Agreement, Mortgagor has
not, during the preceding five years, been known by or used any other corporate
or partnership, trade or fictitious name. Mortgagor will not cause or permit any
change to be made in its name, identity, state of formation or corporate or
partnership structure, or its federal employer identification number unless
Mortgagor shall have notified Agent of such change at least thirty (30) days
prior to the effective date of such change, and shall have first taken all
action required by Agent for the purpose of further perfecting or protecting the
liens and security interests in the Property created hereby. Mortgagor’s exact
name is the name set forth in this Mortgage. Mortgagor’s location is as
follows:
Mortgagor
is a registered organization which is organized under the laws of one of the
states comprising the United States (e.g. corporation, limited partnership,
registered limited liability partnership or limited liability company).
Mortgagor is located (as determined pursuant to the UCC) in the state under the
laws which it was organized, as follows:
Name of
Mortgagor
State of
Organization
Company
Delaware
Mortgagor’s
principal place of business and chief executive office, and the place where
Mortgagor keeps its books and records concerning the Property (including,
particularly, the records with respect to “Production Proceeds”, as defined in
Section 3.1 hereof, from the Mortgaged Properties) has for the preceding four
months, been, and will continue to be (unless Mortgagor notifies Agent of any
change in writing at least thirty (30) days prior to the date of such change),
the address set forth opposite the signature of Mortgagor to this
Mortgage.
(o)
Not a Foreign Person
.
Mortgagor is not a “foreign person” within the meaning of the Internal Revenue
Code of 1986, as amended, (hereinafter called the “
Code
”), Sections 1445 and 7701
(i.e. Mortgagor is not a non-resident alien, foreign corporation, foreign
partnership, foreign trust or foreign estate as those terms are defined in the
Code and any regulations promulgated thereunder).
-16-
Section
2.2
Compliance by
Operator
. As to any part of the Mortgaged Properties which is
not a working interest, Mortgagor agrees to take all such commercial and
reasonable action and to exercise all rights and remedies as are reasonably
available to Mortgagor to cause the owner or owners of the working interest in
such properties to comply with the covenants and agreements contained herein;
and as to any part of the Mortgaged Properties which is a working interest but
which is operated by a party other than Mortgagor, Mortgagor agrees to take all
such commercial and reasonable action and to exercise all rights and remedies as
are reasonably available to Mortgagor (including, but not limited to, all rights
under any operating agreement) to cause the party who is the operator of such
property to comply with the covenants and agreements contained
herein.
Section
2.3
Performance on Mortgagor’s
Behalf
. Mortgagor agrees that, if Mortgagor fails to perform
any act or to take any action which hereunder Mortgagor is required to perform
or take, or to pay any money which hereunder Mortgagor is required to pay,
Agent, in Mortgagor’s name or its own name, may, but shall not
be obligated to, perform
or cause to be performed such act or take such action or pay such money, and any
expenses so incurred by Agent and any money so paid by Agent shall be a demand
obligation owing by Mortgagor to Agent (which obligation Mortgagor hereby
expressly promises to pay) and Agent, upon making such payment, shall be
subrogated to all of the rights of the person, corporation or body politic
receiving such payment. Each amount due and owing by Mortgagor to Trustee and/or
Agent and/or any Lender pursuant to this Mortgage shall bear interest each day,
from the date of such expenditure or payment until paid, at a rate equal to the
rate as provided for past due principal under the Notes (provided that, should
applicable law provide for a maximum permissible rate of interest on such
amounts, such rate shall not be greater than such maximum permissible rate); all
such amounts, together with such interest thereon, shall be a part of the
secured indebtedness and shall be secured by this Mortgage.
ARTICLE
III.
Assignment of Production,
Accounts and Proceeds
Section
3.1
Assignment of
Production
. Mortgagor
does hereby absolutely and unconditionally assign, transfer and set over to
Agent all Production which accrues to Mortgagor’s interest in the Mortgaged
Properties, all proceeds of such Production and all Payments in Lieu of
Production (herein collectively referred to as the “
Production Proceeds
”),
together with the immediate and continuing right to collect and receive such
Production Proceeds. Mortgagor directs and instructs any and all
purchasers of any Production to pay to Agent all of the Production Proceeds
accruing to Mortgagor’s interest until such time as such purchasers have been
furnished with evidence that all secured indebtedness has been paid and that
this Mortgage has been released. Mortgagor agrees that no purchasers of the
Production shall have any responsibility for the application of any funds paid
to Agent.
Section
3.2
Effectuating Payment of
Production Proceeds to Agent
. Independent of the foregoing
provisions and authorities herein granted, Mortgagor agrees to execute and
deliver any and all transfer orders, division orders and other instruments that
may be requested by Agent or that may be required by any purchaser of any
Production for the purpose of effectuating payment of the Production Proceeds to
Agent. If under any existing sales
agreements,
other than division orders or transfer orders, any Production Proceeds are
required to be paid by the purchaser to Mortgagor so that under such existing
agreements payment cannot be made of such Production Proceeds to Agent,
Mortgagor’s interest in all Production Proceeds under such sales agreements and
in all other Production Proceeds which for any reason may be paid to Mortgagor
shall, when received by Mortgagor, constitute trust funds in Mortgagor’s hands
and shall be immediately paid over to Agent. Without limitation upon any of the
foregoing, Mortgagor hereby constitutes and appoints Agent as Mortgagor’s
special attorney in-fact (with full power of substitution, either generally or
for such periods or purposes as Agent may from time to time prescribe) in the
name, place and stead of Mortgagor to do any and every act and exercise any and
every power that Mortgagor might or could do or exercise personally with respect
to all Production and Production Proceeds (the same having been assigned by
Mortgagor to Agent pursuant to Section 3.1 hereof), expressly inclusive, but not
limited to, the right, power and authority to:
(a)
Execute
and deliver in the name of Mortgagor any and all transfer orders, division
orders, letters in lieu of transfer orders, indemnifications, certificates and
other instruments of every nature that may be requested or required by any
purchaser of Production from any of the Mortgaged Properties for the purposes of
effectuating payment of the Production Proceeds to Agent or which Agent may
otherwise deem necessary or appropriate to effect the intent and purposes of the
assignment contained in Section 3.1; and
(b)
If under
any product sales agreements other than division orders or transfer orders, any
Production Proceeds are required to be paid by the purchaser to Mortgagor so
that under such existing agreements payment cannot be made of such Production
Proceeds to Agent, to make, execute and enter into such sales agreements or
other agreements as are necessary to direct Production Proceeds to be payable to
Agent;
giving
and granting unto said attorney-in-fact full power and authority to do and
perform any and every act and thing whatsoever necessary and requisite to be
done as fully and to all intents and purposes, as Mortgagor might or could do if
personally present; and Mortgagor shall be bound thereby as fully and
effectively as if Mortgagor had personally executed, acknowledged and delivered
any of the foregoing certificates or documents. The powers and authorities
herein conferred upon Agent may be exercised by Agent through any person who, at
the time of the execution of the particular instrument, is an officer of Agent.
The power of attorney herein conferred is granted for valuable consideration and
hence is coupled with an interest and is irrevocable so long as the secured
indebtedness, or any part thereof, shall remain unpaid. All persons dealing with
Agent or any substitute shall be fully protected in treating the powers and
authorities conferred by this paragraph as continuing in full force and effect
until advised by Agent that all the secured indebtedness is fully and finally
paid. Agent may, but shall not be obligated to, take such action as it deems
appropriate in an effort to collect the Production Proceeds and any reasonable
expenses (including reasonable attorney’s fees) so incurred by Agent shall be a
demand obligation of Mortgagor and shall be part of the secured indebtedness,
and shall bear interest each day, from the date of such expenditure or payment
until paid, at the rate described in Section 2.3 hereof.
Section
3.3
Change of
Purchaser
. To the extent a default has occurred hereunder and
is continuing, should any person now or hereafter purchasing or taking
Production fail to
make
payment promptly to Agent of the Production Proceeds, Agent shall, subject to
then existing contractual prohibitions, have the right to make, or to require
Mortgagor to make, a change of purchaser, and the right to designate or approve
the new purchaser, and Agent shall have no liability or responsibility in
connection therewith so long as ordinary care is used in making such
designation.
Section
3.4
Application
of Production Proceeds
. So long as no default has occurred
hereunder, the Production Proceeds received by Agent during each calendar month
shall on the first business day of the next succeeding calendar month (or, at
the option of Agent, on any earlier date) be applied by Agent as
follows:
FIRST
,
to the payment
of
all secured indebtedness then due and payable, in such manner and order as Agent
deems advisable;
SECOND
, to the
prepayment of the remainder of the secured indebtedness in such manner and order
and to such extent as Agent deems advisable; and
THIRD
, the remainder,
if any, of the Production Proceeds shall be paid over to Mortgagor or to
Mortgagor’s order or to such other parties as may be entitled thereto by
law.
After a
default hereunder has occurred, all Production Proceeds from time to time in the
hands of Agent shall be applied by it toward the payment of all secured
indebtedness (principal, interest, attorneys’ fees and other fees and expenses)
at such times and in such manner and order and to such extent as Agent deems
advisable.
Section
3.5
Release From Liability;
Indemnification
. Agent and its successors and assigns are
hereby released and absolved from all liability for failure to enforce
collection of the Production Proceeds and from all other responsibility in
connection therewith, except the responsibility of each to account to Mortgagor
for funds actually received by each. Mortgagor agrees to indemnify and hold
harmless Agent (for purposes of this paragraph, the term “Agent” shall include
the directors, officers, partners, employees and agents of Agent and any persons
or entities owned or controlled by or affiliated with Agent) from and against
all claims, demands, liabilities, losses, damages (including, without
limitation, consequential damages), causes of action, judgments, penalties,
costs and expenses (including, without limitation, reasonable attorneys’ fees
and expenses) imposed upon, asserted against or incurred or paid by Agent by
reason of the assertion that Agent received, either before or after payment in
full of the secured indebtedness, funds from the production of oil, gas, other
hydrocarbons or other minerals claimed by third persons (and/or funds
attributable to sales of production which (i) were made at prices in excess of
the maximum price permitted by applicable law or (ii) were otherwise made in
violation of laws, rules, regulations and/or orders governing such sales), and
Agent shall have the right to defend against any such claims or actions,
employing attorneys of its own selection, and if not furnished with indemnity
satisfactory to it, Agent shall have the right to compromise and adjust any such
claims, actions and judgments, and in addition to the rights to be indemnified
as herein provided, all amounts paid by Agent in compromise, satisfaction or
discharge of any such claim, action or judgment, and all court costs, reasonable
attorneys’ fees and other expenses of every character expended by Agent pursuant
to the provisions of this section shall be a
demand
obligation (which obligation Mortgagor hereby expressly promises to pay) owing
by Mortgagor to Agent and shall bear interest, from the date expended until
paid, at the rate described in Section 2.3 hereof. The foregoing indemnities
shall not terminate upon the Release Date or upon the release, foreclosure or
other termination of this Mortgage but will survive the Release Date,
foreclosure of this Mortgage or conveyance in lieu of foreclosure, and the
repayment of the secured indebtedness and the discharge and release of this
Mortgage and the other documents evidencing and/or securing the secured
indebtedness.
WITHOUT LIMITATION, IT IS THE
INTENTION OF MORTGAGOR AND MORTGAGOR AGREES THAT THE FOREGOING RELEASES AND
INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO ALL CLAIMS,
DEMANDS, LIABILITIES, LOSSES, DAMAGES (INCLUDING, WITHOUT LIMITATION,
CONSEQUENTIAL DAMAGES), CAUSES OF ACTION, JUDGMENTS, PENALTIES, COSTS AND
EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES AND
EXPENSES) WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE
OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PARTY
.
However, such
indemnities shall not apply to any particular indemnified party (but shall apply
to the other indemnified parties) to the extent the subject of the
indemnification is caused by or arises out of the gross negligence or willful
misconduct of such particular indemnified party.
Section
3.6
Mortgagor’s Absolute
Obligation to Pay Notes
. Nothing herein contained shall
detract from or limit the obligations of Mortgagor to make prompt payment of the
Notes, and any and all other secured indebtedness, at the time and in the manner
provided herein and in the Loan Documents, regardless of whether the Production
and Production Proceeds herein assigned are sufficient to pay same, and the
rights under this Article III shall be cumulative of all other rights under the
Loan Documents.
Section
3.7
Rights Under Oklahoma Oil
and Gas Owners’ Lien Act
. Mortgagor hereby grants, sells,
assigns and sets over unto Agent during the term hereof, all of Mortgagor’s
rights and interests pursuant to the provisions of the Oil and Gas Owners’ Lien
Act (OKLA. STAT. tit. 52, §§ 548.l-548.6 (the “
Oklahoma Act
”), hereby vesting
in Agent all of Mortgagor’s rights as an interest owner to the continuing
security interest in and lien upon the oil or gas severed or the proceeds of
sale. Agent may, at its option, file the verified notice of lien in order to
perfect such lien, but shall not be obligated to make such filing and shall not
be held liable to Mortgagor for any act or omission pursuant to the Oklahoma
Act.
Section
3.8
Rights Under New Mexico
Act
. Mortgagor hereby grants, sells, assigns and sets over
unto Agent, during the term hereof, all of Mortgagor’s rights and interests
pursuant to the provisions of Sections 48-9-1,
et
seq
., N.M.S.A. 1978
Comp. (the “
New Mexico
Act
”), hereby vesting in Agent all of Mortgagor’s rights as an interest
owner to the continuing security interest in and lien upon the oil or gas
severed or the proceeds of sale. Agent may, at its option, file the verified
notice of lien in order to perfect such lien, but shall not be obligated to make
such filing and shall not be held liable to Mortgagor for any act or omission
pursuant to the New Mexico Act.
Section
3.9
Rights Under Wyoming
Statutes
. Mortgagor hereby appoints Agent as its
attorney-in-fact to pursue any and all lien rights of the Mortgagor to liens and
security
interests
in the Mortgaged Properties securing payment of Production Proceeds attributable
to the Mortgaged Properties, including, without limitation, those liens and
security interests provided for by Section 34.1-9-3 19, Wyoming Statutes
Annotated, 1988 Republished Edition (June 1991), as amended or recodified.
Mortgagor further assigns to Agent any and all such liens, security interests,
financing statements, or similar interests of Mortgagor attributable to its
interests in the Mortgaged Properties or Production Proceeds therefrom arising
under or created by statutory provision, judicial decision, or
otherwise.
ARTICLE
IV.
Remedies Upon
Default
Section
4.1
Default
. The
term “
default
” as used
in this Mortgage shall mean the occurrence of any of the following
events:
(a)
the
occurrence of an “Event of Default” as defined in the Credit Agreement;
or
(b)
the
failure of Mortgagor to pay over to Agent any Production Proceeds which are
receivable by Agent under this Mortgage but which are paid to Mortgagor rather
than Agent (either as provided for in Section 3.2 hereof or otherwise), except
Production Proceeds paid over to Mortgagor by Agent under clause THIRD of
Section 3.4; or
(c)
the
breach or failure of Mortgagor timely and properly to observe, keep or perform
any covenant, agreement, warranty or condition herein required to be observed,
kept or performed, if such breach or failure is not remedied within the
applicable grace period provided for herein or, if no grace period is provided
then within 30 days after the earlier of (i) Mortgagor becoming aware of such
breach or failure or (ii) written notice and demand by Agent for the performance
of such covenant, agreement, warranty or condition; provided, however, if in the
reasonable judgment of the Agent, the Mortgagor is diligently pursuing a cure
for any such breach or failure and such a cure is practicable within a
reasonable time, Agent may grant additional time beyond said 30 days to remedy
such breach or failure; or
(d)
any
representation contained herein (or in any certificate delivered by Mortgagor in
connection herewith), or otherwise heretofore or hereafter made by or on behalf
of Mortgagor as Mortgagor, shall prove to have been false or misleading in any
material respect on the date made (or on the date as of which made) and the
result of such misrepresentation shall be material with respect either to the
Mortgagor or the interests of the Agent or the Lenders.
Section
4.2
Acceleration of Secured
Indebtedness
. Upon the occurrence of a default described in
Section 4.1 above, all of the secured indebtedness shall thereupon be
immediately due and payable, without presentment, demand, protest, notice of
protest, declaration or notice of acceleration or intention to accelerate,
putting the Mortgagor in default, dishonor, notice of dishonor or any other
notice or declaration of any kind, all of which are hereby expressly waived by
Mortgagor, and the liens evidenced hereby shall be subject to foreclosure in any
manner provided for herein or provided for by law as Agent may elect. During the
continuance of any other default, Agent at any time and from time to time may
without notice to Mortgagor or any other person declare any or all of the
secured indebtedness immediately due
and
payable and all such secured indebtedness shall thereupon be immediately due and
payable, without presentment, demand, protest, notice of protest, declaration or
notice of acceleration or intention to accelerate, putting the Mortgagor in
default, dishonor, notice of dishonor or any other notice or declaration of any
kind, all of which are hereby expressly waived by Mortgagor, and the liens
evidenced hereby shall be subject to foreclosure in any manner provided for
herein or provided for by law as Agent may elect.
Section
4.3
Pre-Foreclosure
Remedies
. Upon the occurrence of a default, or any event or
circumstance which, with the lapse of time or the giving of notice, or both,
would constitute a default hereunder, and following any period to attempt to
cure such default, if any, provided in the Credit Agreement, Agent is
authorized, prior or subsequent to the institution of any foreclosure
proceedings, to enter upon the Property, or any part thereof, and to take
possession of the Property and all books and records relating thereto, and to
exercise without interference from Mortgagor any and all rights which Mortgagor
has with respect to the management, possession, operation, protection or
preservation of the Property. If necessary to obtain the possession provided for
above, Agent may invoke any and all remedies to dispossess Mortgagor, including,
without limitation, summary proceeding or restraining order, Mortgagor agrees to
peacefully surrender possession of the Property upon default. All costs,
expenses and liabilities of every character incurred by Agent in managing,
operating, maintaining, protecting or preserving the Property shall constitute a
demand obligation (which obligation Mortgagor hereby expressly promises to pay)
owing by Mortgagor to Agent and shall bear interest from date of expenditure
until paid at the rate described in Section 2.3 hereof, all of which shall
constitute a portion of the secured indebtedness and shall be secured by this
Mortgage and by any other instrument securing the secured indebtedness. In
connection with any action taken by Agent pursuant to this Section 4.3,
AGENT SHALL NOT BE LIABLE FOR ANY
LOSS SUSTAINED BY MORTGAGOR RESULTING FROM ANY ACT OR OMISSION OF AGENT
(INCLUDING AGENT’S OWN NEGLIGENCE) IN MANAGING THE PROPERTY UNLESS SUCH LOSS IS
CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF AGENT
,
nor
shall Agent be obligated
to perform or discharge any obligation, duty or liability of Mortgagor arising
under any agreement forming a part of the Property or arising under any
Permitted Encumbrance or otherwise arising. Mortgagor hereby assents to,
ratifies and confirms any and all actions of Agent with respect to the Property
taken under this Section 4.3.
Section
4.4
Foreclosure
.
(a)
Upon the
occurrence of a default, Trustee is authorized and empowered and it shall be
Trustee’s special duty at the request of Agent to sell the Deed of Trust
Mortgaged Properties, or any part thereof, as an entirety or in parcels as Agent
may elect, at such place or places and otherwise in the manner and upon such
notice as may be required by law or, in the absence of any such requirement, as
Trustee may deem appropriate. If Trustee shall have given notice of sale
hereunder, any successor or substitute Trustee thereafter appointed may complete
the sale and the conveyance of the property pursuant thereto as if such notice
had been given by the successor or substitute Trustee conducting the sale.
Cumulative of the foregoing and the other provisions of this Section
4.4:
(i)
As to any
portion of the Deed of Trust Mortgaged Properties located in the State of Texas
(or within the offshore area over which the United States of America asserts
jurisdiction and to which the laws of such state are applicable with respect to
this Mortgage and/or the liens or security interests created hereby), such sales
of all or any part of such Deed of Trust Mortgaged Properties shall be conducted
at the courthouse of any county (whether or not the counties in which such Deed
of Trust Mortgaged Properties are located are contiguous) in the State of Texas
in which any part of such Deed of Trust Mortgaged Properties is situated or
which lies shoreward of any Deed of Trust Mortgaged Property (i.e., to the
extent a particular Deed of Trust Mortgaged Property lies offshore within the
reasonable projected seaward extension of the relevant county boundary), at
public venue to the highest bidder for cash between the hours of ten o’clock
a.m. and four o’clock p.m. on the first Tuesday in any month or at such other
place, time and date as provided by the statutes of the State of Texas then in
force governing sales of real estate under powers conferred by deed of trust,
after having given notice of such sale in accordance with such
statutes.
A POWER OF SALE HAS BEEN
GRANTED IN THIS MORTGAGE. A POWER OF SALE MAY ALLOW TRUSTEE TO TAKE THE
MORTGAGED PROPERTIES AND SELL THEM WITHOUT GOING TO COURT IN A FORECLOSURE
ACTION UPON DEFAULT BY MORTGAGOR UNDER THIS MORTGAGE
.
(b)
Upon the
occurrence of a default, (i) this Mortgage may be foreclosed as to the Other
Mortgaged Properties, or any part thereof, in any manner permitted by applicable
law, or (ii) the Agent may, to the extent permitted by applicable law, sell the
Other Mortgaged Properties, or any part thereof, as an entirety or in parcels as
Agent may elect, at such place or places and otherwise in the manner and upon
such notice as may be required by law or, in the absence of any such
requirement, as the Agent may deem appropriate (Mortgagor expressly granting the
power of sale). Cumulative of the foregoing and the other provisions of this
Section 4.4:
(i)
As to
Other Mortgaged Properties located in the State of Louisiana (or within the
offshore area over which the United States of America asserts jurisdiction and
to which the laws of such state are applicable with respect to this Mortgage
and/or the liens or security interests created hereby), Agent may foreclose this
Mortgage by executory process, or any other process, subject to, and on the
terms and conditions required or permitted by, applicable law, and shall have
the right to appoint a keeper of such Other Mortgaged Properties.
(ii)
As to
Other Mortgaged Properties located in the State of Oklahoma, Mortgagor hereby
confers on Agent the power to sell the Mortgaged Properties in accordance with
the Oklahoma Power of Sale Mortgage Foreclosure Act (OKLA. STAT. tit. 46, §§
41-49), as the same maybe amended from time to time. Mortgagor hereby represents
and warrants that this Mortgage transaction does not involve a consumer loan as
said term is defined in Section 3-104 of Title 14A of the Oklahoma Statutes,
that this Mortgage does not secure an extension of credit made primarily for
agricultural purposes
as
defined in paragraph 4 of Section 1-301 of Title 14A of the Oklahoma Statutes,
and that this Mortgage is not a mortgage on the Mortgagor’s
homestead.
(iii)
As to
Other Mortgaged Properties located in the State of New Mexico, Lender may, at
its election, proceed by suit or suits, at law or in equity, to enforce the
payment of the secured indebtedness in accordance with the terms hereof and of
the Notes or other instruments evidencing it, to foreclose the lien and security
interest of this Mortgage against all or any portion of the Other Mortgaged
Properties, and to have said properties sold under the judgment or decree of a
court of competent jurisdiction pursuant to Section 39-5-19 NMSA 1978, as that
statutory provision may be amended or recodified.
A POWER OF SALE HAS BEEN
GRANTED IN THIS MORTGAGE. A POWER OF SALE MAY ALLOW AGENT TO TAKE THE MORTGAGED
PROPERTIES AND SELL THEM WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON
DEFAULT BY MORTGAGOR UNDER THIS MORTGAGE
.
(c)
Upon the
occurrence of a default, Agent may exercise its rights of enforcement with
respect to the Collateral under the Texas Business and Commerce Code, as
amended, the Louisiana Commercial Laws, as amended, the Uniform Commercial Code
of the State of Oklahoma, as amended, the Uniform Commercial Code of the State
of New Mexico, or under the Uniform Commercial Code or any other statute in
force in any state to the extent the same is applicable law. Cumulative of the
foregoing and the other provisions of this Section 4.4:
(i)
To the
extent permitted by law, Agent may enter upon the Mortgaged Properties or
otherwise upon Mortgagor’s premises to take possession of, assemble and collect
the Collateral or to render it unusable; and
(ii)
Agent may
require Mortgagor to assemble the Collateral and make it available at a place
Agent designates which is mutually convenient to allow Agent to take possession
or dispose of the Collateral; and
(iii)
Written
notice mailed to Mortgagor as provided herein at least five (5)
days prior to the date
of public sale of the Collateral or prior to the date after which private sale
of the Collateral will be made shall constitute reasonable notice;
and
(iv)
in the
event of a foreclosure of the liens and/or security interests evidenced hereby,
the Collateral, or any part thereof, and the Mortgaged Properties, or any part
thereof, may, at the option of Agent, be sold, as a whole or in parts, together
or separately (including, without limitation, where a portion of the Mortgaged
Properties is sold, the Collateral related thereto may be sold in connection
therewith); and
(v)
the
expenses of sale provided for in clause FIRST of Section 4.7 shall include
the
reasonable
expenses of retaking the Collateral, or any part thereof, holding the same and
preparing the same for sale or other disposition; and
(vi)
should,
under this subsection, the Collateral be disposed of other than by sale, any
proceeds of such disposition shall be treated under Section 4.7 as if the same
were sales proceeds; and
(vii)
as to the
Collateral located in or otherwise subject to the laws of the State of
Louisiana, Agent may foreclose this Mortgage as a security agreement affecting
the Collateral by executory process, or any other process, subject to, and on
the terms and conditions required or permitted by applicable law, and shall have
the right
to
appoint a keeper of such Collateral.
(d)
To the
extent permitted by applicable law, the sale hereunder of less than the whole of
the Property shall not exhaust the powers of sale herein granted or the right to
judicial foreclosure, and successive sale or sales may be made until the whole
of the Property shall be sold, and, if the proceeds of such sale of less than
the
whole of the
Property shall be less than the aggregate of the indebtedness secured hereby and
the expense of conducting such sale, this Mortgage and the liens and security
interests hereof shall remain in full force and effect as to the unsold portion
of the Property just as though no sale had been made; provided, however, that
Mortgagor shall never have any right to require the sale of less than the whole
of the Property. In the event any sale hereunder is not completed or is
defective in the opinion of Agent, such sale shall not exhaust the powers of
sale hereunder or the right to judicial foreclosure, and Agent shall have the
right to cause a subsequent sale or sales to be made. Any sale may be adjourned
by announcement at the time and place appointed for such sale without further
notice except as may be required by law. The Trustee or his successor or
substitute, and the Agent acting under power of sale, may appoint or delegate
any one or more persons as agent to perform any act or acts necessary or
incident to any sale held by it (including, without limitation, the posting of
notices and the conduct of sale), and such appointment need not be in writing or
recorded. Any and all statements of fact or other recitals made in
any deed or deeds, or other instruments of transfer, given in connection with a
sale as to nonpayment of the secured indebtedness or as to the occurrence of any
default, or as to all of the secured indebtedness having been declared to be due
and payable, or as to the request to sell, or as to notice of time, place and
terms of sale and the properties to be sold having been duly given, or, with
respect to any sale by the Trustee, or any successor or substitute trustee, as
to the refusal, failure or inability to act of Trustee or any substitute or
successor trustee or the appointment of any substitute or successor trustee, or
as to any other act or thing having been duly done, shall be taken as prima
facie evidence of the truth of the facts so stated and recited. Notwithstanding
any reference herein to the Notes or the Credit Agreement or any other Loan
Document, all persons dealing with the Mortgaged Properties shall be entitled to
rely on any document, or certificate, of the Agent as to the occurrence of an
event, such as an Event of Default, and shall not be charged with or forced to
review any provision of any other document to determine the accuracy thereof.
With respect to any sale held in foreclosure of the liens and/or security
interests covered hereby, it shall not be necessary for the Trustee, Agent, any
public officer acting under execution or order of the court or any other party
to have physically present or constructively in his/her or its possession,
either at the time of or prior to such sale, the Property or any part
thereof.
(e)
As to
Property now or hereafter located in, or otherwise subject to the laws of, the
State of Louisiana, Mortgagor acknowledges the secured indebtedness, whether now
existing or to arise hereafter, and for Mortgagor, Mortgagor’s heirs, devisees,
personal representatives,
successors
and assigns, hereby confesses judgment for the full amount of the secured
indebtedness in favor of the Lender. Mortgagor further agrees that the Agent may
cause all or any part of the Property to be seized and sold after due process of
law, the Mortgagor waiving the benefit of all laws or parts of laws relative to
the appraisement of property seized and sold under executory process or other
legal process, and consenting that all or any part of the Property may be sold
without appraisement, either in its entirety or in lots and parcels, as the
Agent may determine, to the highest bidder for cash or on such terms as the
plaintiff in such proceedings may direct. Mortgagor hereby waives (i) the
benefit of appraisement provided for in articles 2332, 2336, 2723, and 2724 of
the Louisiana Code of Civil Procedure and all other laws conferring the same;
(ii) the demand and three (3) days notice of demand as provided in articles 2639
and 2721 of the Louisiana Code of Civil Procedure; (iii) the notice of seizure
provided for in articles 2293 and 2721 of the Louisiana Code of Civil Procedure;
(iv) the three (3) days delay provided for in articles 2331 and 2722 of the
Louisiana Code of Civil Procedure; and (v) all other laws providing rights of
notice, demand, appraisement, or delay. Mortgagor expressly authorizes and
agrees that Agent shall have the right to appoint a keeper of such Property
pursuant to the terms and provisions of La. R.S. 9:5131
et
seq
.
and La. R.S. 9:5136
et
seq.
,
which keeper may be the
Agent, any agent or employee thereof, or any other person, firm, or corporation.
Compensation for the services of the keeper is hereby fixed at five percent
(5%)
of the amount
due or sued for or claimed or sought to be protected, preserved, or enforced in
the proceeding for the recognition or enforcement of this Mortgage and shall be
secured by the liens and security interests of this Mortgage.
Section
4.5
Effective as
Mortgage
. As to the Deed of Trust Mortgaged Properties, this
instrument shall be effective as a mortgage as well as a deed of trust and upon
the occurrence of a default may be foreclosed as to the Deed of Trust Mortgaged
Properties, or any portion thereof, in any manner permitted by applicable law,
and any foreclosure suit may be brought by Trustee or by Agent. To the extent,
if any, required to cause this instrument to be so effective as a mortgage as
well as a deed of trust, Mortgagor hereby mortgages the Deed of Trust Mortgaged
Properties to Agent. In the event a foreclosure hereunder as to the Deed of
Trust Mortgaged Properties, or any part thereof, shall be commenced by Trustee,
or his substitute or successor, Agent may at any time before the sale of such
properties direct Trustee to abandon the sale, and may then institute suit for
the foreclosure of this Mortgage as to such properties. It is agreed that if
Agent should institute a suit for the foreclosure of this Mortgage, Agent may at
any time before the entry of a final judgment in said suit dismiss the same, and
require Trustee, its substitute or successor, to sell the Deed of Trust
Mortgaged Properties, or any part thereof, in accordance with the provisions of
this Mortgage.
Section
4.6
Receiver
. In
addition to all other remedies herein provided for, Mortgagor agrees that, upon
the occurrence of a default or any event or circumstance which, with the lapse
of time or the giving of notice, or both, would constitute a default hereunder,
Agent shall as a matter of right be entitled to the appointment of a receiver or
receivers for all or any part of the Property, whether such receivership be
incident to a proposed sale (or sales) of such property or otherwise, and
without regard to the value of the Property or the solvency of any person or
persons liable for the payment of the indebtedness secured hereby, and Mortgagor
does hereby consent to the appointment of such receiver or receivers, waives any
and all defenses to such appointment, and agrees not to oppose any application
therefor by Agent, and agrees that such appointment shall in no manner impair,
prejudice or otherwise affect the rights
of Agent
under Article III hereof. Mortgagor expressly waives notice of a hearing for
appointment of a receiver and the necessity for bond or an accounting by the
receiver. Nothing herein is to be construed to deprive Agent or any Lender of
any other right, remedy or privilege it may now or hereafter have under the law
to have a receiver appointed. Any money advanced by Agent in connection with any
such receivership shall be a demand obligation (which obligation Mortgagor
hereby expressly promises to pay) owing by Mortgagor to Agent and shall bear
interest, from the date of making such advancement by Agent until paid, at the
rate described in Section 2.3 hereof.
Section
4.7
Proceeds of
Foreclosure
. The proceeds of any sale held in foreclosure of
the liens and/or security interests evidenced hereby shall be
applied:
FIRST
,
to the payment of all necessary costs and expenses incident to such foreclosure
sale, including but not limited to all court costs and charges of every
character in the event foreclosed by suit or any judicial proceeding and
including but not limited to a reasonable fee to the Trustee if such sale was
made by the Trustee acting under the provisions of Section 4.4(a) and including
but not limited to the compensation of the keeper, if any;
SECOND
, to the
payment of the secured indebtedness (including specifically without limitation
the principal, interest and attorneys’ fees due and unpaid on the Notes and the
amounts due and unpaid and owed under this Mortgage) in such manner and order as
Agent may elect; and
THIRD
, the remainder,
if any there shall be, shall be paid to Mortgagor, or to Mortgagor’s heirs,
devisees, representatives, successors or assigns, or such other persons as may
be entitled thereto by law.
Section
4.8
Lender as
Purchaser
. Any Lender shall have the right to become the
purchaser at any sale held in foreclosure of the liens and/or security interests
evidenced hereby, and any Lender purchasing at any such sale shall have the
right to credit upon the amount of the bid made therefor, to the
extent necessary to
satisfy such bid, the secured indebtedness owing to such Lender, or if such
Lender holds less than all of such indebtedness, the pro rata part thereof owing
to such Lender, accounting to all other Lenders not joining in such bid in cash
for the portion of such bid or bids apportionable to such non-bidding Lender or
Lenders.
Section
4.9
Foreclosure as to Matured
Debt
. Upon the occurrence of a default, Agent shall have the
right to proceed with foreclosure of the liens and/or security interests
evidenced hereby without declaring the entire secured indebtedness due, and in
such event, any such foreclosure sale may be made subject to the unmatured part
of the secured indebtedness and shall not in any manner affect the unmatured
part of the secured indebtedness, but as to such unmatured part, this Mortgage
shall remain in full force and effect just as though no sale had been made. The
proceeds of such sale shall be applied as provided in Section 4.7 except that
the amount paid under clause SECOND thereof shall be only the matured portion of
the secured indebtedness and any proceeds of such sale in excess of those
provided for in clauses FIRST and SECOND (modified as provided above) shall be
applied as provided in clause SECOND AND
THIRD of
Section 3.4 hereof. Several sales may be made hereunder without exhausting the
right of sale for any unmatured part of the secured indebtedness.
Section
4.10
Remedies
Cumulative
. All remedies herein provided for are cumulative of
each other and of all other remedies existing at law or in equity and are
cumulative of any and all other remedies provided for in any other Loan
Document, and, in addition to the remedies herein provided, there shall continue
to be available all such other remedies as may now or hereafter exist at law or
in equity for the collection of the secured indebtedness and the enforcement of
the covenants herein and the foreclosure of the liens and/or security interests
evidenced hereby, and the resort to any remedy provided for hereunder or under
any such other Loan Document or provided for by law shall not prevent the
concurrent or subsequent employment of any other appropriate remedy or
remedies.
Section
4.11
Discretion as to
Security
. Agent may resort to any security given by this
Mortgage or to any other security now existing or hereafter given to secure the
payment of the secured indebtedness, in whole or in part, and in such portions
and in such order as may seem best to Agent in its sole and uncontrolled
discretion, and any such action shall not in any way be considered as a waiver
of any of the rights, benefits, liens or security interests evidenced by this
Mortgage.
Section
4.12
Mortgagor’s Waiver of
Certain Rights
. To the full extent Mortgagor may do so, Mortgagor agrees
that Mortgagor will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, extension or redemption, and Mortgagor, for
Mortgagor, Mortgagor’s heirs, devisees, representatives, successors and assigns,
and for any and all persons ever claiming any interest in the Property, to the
extent permitted by applicable law, hereby waives and releases all rights of
appraisement, valuation, stay of execution, redemption, notice of intention to
mature or declare due the whole of the secured indebtedness, notice of election
to mature or declare due the whole of the secured indebtedness and all rights to
a marshaling of assets of Mortgagor, including the Property, or to a sale in
inverse order of alienation in the event of foreclosure of the
liens and/or security
interests hereby created. Mortgagor shall not have or assert any right under any
statute or rule of law pertaining to the marshaling of assets, sale in inverse
order of alienation, the exemption of homestead, the administration of estates
of decedents, or other matters whatever to defeat, reduce or affect the right
under the terms of this Mortgage to a sale of the Property for the collection of
the secured indebtedness without any prior or different resort for collection,
or the right under the terms of this Mortgage to the payment of the secured
indebtedness out of the proceeds of sale of the Properly in preference to every
other claimant whatever. If any law referred to in this section and
now in force, of which Mortgagor or Mortgagor’s heirs, devisees,
representatives, successors or assigns or any other persons claiming any
interest in the Mortgaged Properties or the Collateral might take advantage
despite this section, shall hereafter be repealed or cease to be in force, such
law shall not thereafter be deemed to preclude the application of this
section.
Section
4.13
Mortgagor as Tenant
Post-Foreclosure
. In the
event there is a
foreclosure sale hereunder and at the time of such sale Mortgagor or Mortgagor’s
heirs, devisees, representatives, successors or assigns or any other persons
claiming any interest in the Property by, through or under Mortgagor are
occupying or using the Property, or any part thereof, each
and all
shall immediately become the tenant of the purchaser at such sale, which tenancy
shall be a tenancy from day to day, terminable at the will of either landlord or
tenant, at a reasonable rental per day based upon the value of the property
occupied, such rental to be due daily to the purchaser. To the extent permitted
by applicable law, the purchaser at such sale shall, notwithstanding any
language herein apparently to the contrary, have the sole option to demand
immediate possession following the sale or to permit the occupants to remain as
tenants at will. In the event the tenant fails to surrender possession of said
property upon
demand, the purchaser
shall be entitled to institute and maintain a summary action for possession of
the property (such as an action for forcible entry and detainer) in any court
having jurisdiction.
Section
4.14
Waiver of
Oklahoma Appraisement
. As to Property situated in or otherwise
subject to the laws of the State of Oklahoma, appraisement of the Property is
hereby waived (or not) at the option of Agent, such option to be exercised at
the time judgment is rendered in any foreclosure hereof or at any time prior
thereto.
Section
4.15
Limitation on New Mexico
Redemption Period
. Pursuant to Section 39-5-19 of New Mexico
Statutes, 1978 Annotated, the redemption period after foreclosure sale for any
Property situated in or otherwise subject to the laws of the State of New Mexico
shall be limited to one (1) month.
ARTICLE
V.
Miscellaneous
Section
5.1
Scope of
Mortgage
. This Mortgage is a deed of trust and mortgage of
both real/immovable and personal/movable property, a security agreement, a
financing statement and an assignment, and also covers proceeds and
fixtures.
Section
5.2
Effective as a Financing
Statement
. This Mortgage, among other things, covers goods
which are or are to become fixtures related to the real property described
herein, and covers as-extracted collateral related to the real property
described herein. This Mortgage shall be effective as a financing statement (i)
filed as a fixture filing with respect to all fixtures included within the
Property, (ii) covering as-extracted collateral with respect to all as-extracted
collateral included within the Property (including, without limitation, all oil,
gas, other minerals and other substances of value which may be extracted from
the earth and all accounts arising out of the sale at the wellhead or minehead
thereof), and (iii) covering all other Property. This Mortgage is to be filed
for record in the real/immovable property records of each county or parish where
any part of the Mortgaged Properties is situated or which lies shoreward of any
Mortgaged Property (i.e., to the extent a Mortgaged Property lies offshore
within the projected seaward extension of the relevant county or parish
boundaries), and may also be filed in the offices of the Bureau of Land
Management, the Minerals Management Service, the General Land Office or any
relevant federal, state, local or tribal agency (or any successor agencies). The
mailing address of Mortgagor is the address of Mortgagor set forth at the end of
this Mortgage and the address of Agent from which information concerning the
security interests hereunder may be obtained is the address of Agent set forth
at the end of this Mortgage. Nothing contained in this paragraph shall be
construed to limit the scope of this Mortgage nor its effectiveness as a
financing statement covering any type of Property.
Section
5.3
Reproduction of Mortgage as
Financing Statement; Authorization to File
. A carbon,
photographic, facsimile or other reproduction of this Mortgage or of any
financing statement relating to this Mortgage shall be sufficient as a financing
statement for any purpose. Without limiting any other provision herein,
Mortgagor hereby authorizes Agent to file, in any filing or recording office,
one or more financing statements and any renewal or continuation statements
thereof, describing the Property, including, without limitation, a financing
statement covering “all assets of Mortgagor, all proceeds therefrom and all
rights and privileges with respect thereto.”
Section
5.4
Notice to Account
Debtors
. In addition to, but without limitation of, the rights
granted in Article III hereof, Agent may, at any time after a default has
occurred that is continuing, notify the account debtors or obligors of any
accounts, chattel paper, negotiable instruments or other evidences of
indebtedness included in the Collateral to pay Agent directly.
Section
5.5
Waivers
. Agent
may at any time and from time to time in writing waive compliance by Mortgagor
with any covenant herein made by Mortgagor to the extent and in the manner
specified in such writing, or consent to Mortgagor’s doing any act which
hereunder Mortgagor is prohibited from doing, or to Mortgagor’s failing to do
any act which hereunder Mortgagor is required to do, to the extent and in the
manner specified in such writing, or release any part of the Property or any
interest therein or any Production Proceeds from the lien and security interest
of this Mortgage, without the joinder of Trustee. Any party liable, either
directly or indirectly, for the secured indebtedness or for any covenant herein
or in any other Loan Document may be released from all or any part of such
obligations without impairing or releasing the liability of any other party. No
such act shall in any way impair any rights or powers hereunder except to the
extent specifically agreed to in such writing.
Section
5.6
No Impairment of
Security
. The lien, security interest and other security
rights hereunder shall not be impaired by any indulgence, moratorium or release
which may be granted, including, but not limited to, any renewal, extension or
modification which may be granted with respect to any secured indebtedness, or
any surrender, compromise, release, renewal, extension, exchange or substitution
which maybe granted in respect of the Property (including, without limitation,
Production Proceeds), or any part thereof or any interest therein, or any
release or indulgence granted to any endorser, guarantor or surety of any
secured indebtedness.
Section
5.7
Acts Not Constituting
Waiver
. Any default may be waived without waiving any other
prior or subsequent default. Any default may be remedied without waiving the
default remedied. Neither failure to exercise, nor delay in exercising, any
right, power or remedy upon any default shall be construed as a waiver of such
default or as a waiver of the right to exercise any such right, power or remedy
at a later date. No single or partial exercise of any right, power or remedy
hereunder shall exhaust the same or shall preclude any other or further exercise
thereof, and every such right, power or remedy hereunder may be exercised at any
time and from time to time, No modification or waiver of any provision hereof
nor consent to any departure by Mortgagor therefrom shall in any event be
effective unless the same shall be in writing and signed by Agent and then such
waiver or consent shall be effective only in the specific instances, for the
purpose for which given and to the extent therein specified. No notice to nor
demand on Mortgagor in any case shall of itself entitle Mortgagor to any other
or further
notice or
demand in similar or other circumstances. Acceptance of any payment
in an amount less than
the amount then due on
any secured indebtedness shall be deemed an acceptance on account only and shall
not in
any way
excuse the existence of a default hereunder.
Section
5.8
Mortgagor’s
Successors
. In the event the ownership of the Property or any
part thereof becomes vested in a person other than Mortgagor, then, without
notice to Mortgagor, such successor or successors in interest may be dealt with,
with reference to this Mortgage and to the indebtedness secured hereby, in the
same manner as with Mortgagor, without in any way vitiating or discharging
Mortgagor’s liability hereunder or for the payment of the indebtedness or
performance of the obligations secured hereby. No transfer of the Property, no
forbearance, and no extension of the time for the payment of the indebtedness
secured hereby shall operate to release, discharge, modify, change or affect, in
whole or in part, the liability of Mortgagor hereunder or for the payment of the
indebtedness or performance of the obligations secured hereby or the liability
of any other person hereunder or for the payment of the indebtedness secured
hereby.
Section
5.9
Place of
Payment
. All secured indebtedness which may be owing hereunder
at any time by Mortgagor shall be payable at the place designated in the Credit
Agreement (or if no such designation is made, at the address of Agent indicated
at the end of this Mortgage), or at such other place as Agent may designate in
writing.
Section
5.10
Subrogation to Existing
Liens
. To the extent that proceeds of the Notes are used to
pay indebtedness secured by any outstanding lien, security interest, charge or
prior encumbrance against the Property, such proceeds have been advanced at
Mortgagor’s request, and the party or parties advancing the same shall be
subrogated to any and all rights, security interests and liens owned by any
owner or holder of such outstanding liens, security interests, charges or
encumbrances, irrespective of whether said liens, security interests, charges or
encumbrances are released, and it is expressly understood that, in consideration
of the payment of such indebtedness, Mortgagor hereby waives and releases all
demands and causes of action for offsets and payments to, upon and in connection
with the
said
indebtedness.
Section
5.11
Application of Payments to
Certain Indebtedness
. If any part of the secured indebtedness
cannot be lawfully secured by this Mortgage or if any part of the Property
cannot be lawfully subject to the lien and security interest hereof to the full
extent of such indebtedness, then all payments made shall be applied on said
indebtedness first in discharge of that portion thereof which is not secured by
this Mortgage.
Section
5.12
Compliance With Usury
Laws
. It is the intent of Mortgagor, Lender and all other
parties to the Loan Documents to contract in strict compliance with applicable
usury law from time to time
in effect. In
furtherance thereof, it is stipulated and agreed that none of the terms and
provisions contained herein or in the other Loan Documents shall ever be
construed to create a contract to pay, for the use, forbearance or detention of
money, interest in excess of the maximum amount of interest permitted to be
charged by applicable law from time to time in effect.
Section
5.13
Substitute
Trustee
. The Trustee may resign by an instrument in writing
addressed to Agent, or Trustee may be removed at any time with or without cause
by an
instrument
in writing executed by Agent. In case of the death, resignation, removal, or
disqualification of Trustee, or if for any reason Agent shall deem it desirable
to appoint a substitute or successor trustee to act instead of the herein named
trustee or any substitute or successor trustee, then Agent shall have the right
and is hereby authorized and empowered to appoint a successor trustee, or a
substitute trustee, without other formality than appointment and designation in
writing executed by Agent and the authority hereby conferred shall extend to the
appointment of other successor and substitute trustees successively until the
indebtedness secured hereby has been paid in full, or until the Property is sold
hereunder. In the event the secured indebtedness is owned by more than one
person or entity, the holder or holders of not less than a majority in the
amount of such indebtedness shall also have the right and authority to make the
appointment of a successor or substitute trustee as provided for in the
preceding sentence or to remove Trustee as provided in the first sentence of
this section. Such appointment and designation by Agent shall be full
evidence of the right and authority to make the same and of all facts therein
recited. If Agent is a corporation or association and such
appointment is executed in its behalf by an officer of such corporation or
association, such appointment shall be conclusively presumed to be executed with
authority and shall be valid and sufficient without proof of any action by the
board of directors or any superior officer of the corporation or association.
Agent may act through an agent or attorney-in-fact in substituting trustees.
Upon the making of any such appointment and designation, all of the estate and
title of Trustee in the Deed of Trust Mortgaged Properties shall vest in the
named successor or substitute Trustee and such successor or substitute shall
thereupon succeed to, and shall hold, possess and execute, all the rights,
powers, privileges, immunities and duties herein conferred upon Trustee; but
nevertheless, upon the written request of Agent or of the successor or
substitute Trustee, the Trustee ceasing to act shall execute and deliver an
instrument transferring to such successor or substitute Trustee all of the
estate and title in the Deed of Trust Mortgaged Properties of the Trustee so
ceasing to act, together with all the rights, powers, privileges, immunities and
duties herein conferred upon the Trustee, and shall duly assign, transfer and
deliver any of the properties and moneys held by said Trustee hereunder to said
successor or substitute Trustee. All references herein to Trustee
shall be deemed to refer to Trustee (including any successor or substitute
appointed and designated as herein provided) from time to time acting
hereunder.
Section
5.14
No
Liability for Trustee
.
THE TRUSTEE SHALL NOT BE LIABLE FOR
ANY ERROR OF JUDGMENT OR ACT DONE BY TRUSTEE IN GOOD FAITH, OR BE OTHERWISE
RESPONSIBLE OR ACCOUNTABLE UNDER ANY CIRCUMSTANCES WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, THE TRUSTEE’S NEGLIGENCE), EXCEPT FOR TRUSTEE’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT
. The Trustee shall have the right to
rely on any instrument, document or signature authorizing or supporting any
action taken or proposed to be taken by the Trustee hereunder, believed by the
Trustee in good faith to be genuine. All moneys received by Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received, but need not be segregated in any manner from any other
moneys (except to the extent required by law), and Trustee shall be under no
liability for interest on any moneys received by him hereunder. Mortgagor hereby
ratifies and confirms any and all acts which the herein named Trustee or its
successor or successors, substitute or substitutes, shall do lawfully by virtue
hereof. Mortgagor will reimburse Trustee for, and indemnify and save Trustee
harmless against, any and all liability and expenses (including attorneys fees)
which may be incurred by Trustee in the performance of his duties. The foregoing
indemnities shall not terminate upon the
release,
foreclosure or other termination of this Mortgage but will survive such release,
termination and/or foreclosure of this Mortgage, or conveyance in lieu of
foreclosure, and the repayment of the secured indebtedness and the discharge and
release of this Mortgage and the other documents evidencing and/or securing the
secured indebtedness. Any amount to be paid hereunder by Mortgagor to Trustee
shall be a demand obligation owing by Mortgagor to Trustee and shall be subject
to and covered by the provisions of Section 2.3 hereof.
Section
5.15
Release of
Mortgage
. If all of the secured indebtedness be paid as the
same becomes due and payable, all other requirements of the Credit Agreement are
satisfied and all of the covenants, warranties, undertakings and agreements made
in this Mortgage are kept and performed, and if neither the Mortgagor nor any
Lender is bound to the other or to any third person to permit any obligation or
secured indebtedness to be incurred then or thereafter, then, upon sixty (60)
days prior written notice (or such lesser number of days as may be mandated by
applicable law), the Mortgagor may request that this Mortgage be
terminated. Upon such termination the Mortgagor may further request
that a written act of release of this Mortgage be provided (except this Mortgage
shall be reinstated to the extent expressly provided herein, and will continue
with respect to indemnification and other rights which are to continue following
the release hereof). Agent agrees to deliver such an act of release (subject to
the foregoing limitation), all at the cost and expense of the Mortgagor, within
thirty (30) days (or such lesser number of days as may be mandated by applicable
law) of receiving such request unless Agent in good faith, has cause to believe
that Mortgagor is not entitled to a termination of this Mortgage.
Notwithstanding the foregoing, it is understood and agreed that certain
indemnifications, and other rights, which are provided herein to continue
following the release hereof, shall continue in effect notwithstanding such
release; and provided that if any payment to Lender, or Agent, is held to
constitute a preference or a voidable transfer under applicable state or federal
laws or if for any other reason Lender, or Agent, is required to refund such
payment to the payor thereof or to pay the amount thereof to any third party,
this Mortgage shall be reinstated to the extent of such payment or
payments.
Section
5.16
Notices
. All
notices, requests, consents, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed sufficiently given
or furnished if delivered by personal delivery, by telecopy, by delivery service
with proof of delivery, or by registered or certified United States mail,
postage prepaid, at the addresses specified at the end of this Mortgage (unless
changed by similar notice in writing given by the particular party 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 and in the manner
provided herein, (b) in the case of telecopy, upon receipt, and (c) in the case
of registered or certified United States mail, three days after deposit in the
mail. Notwithstanding the foregoing, or anything else in the Loan Documents
which may appear to the contrary, any notice given in connection with a
foreclosure of the liens and/or security interests created hereunder, or
otherwise in connection with the exercise by Agent, any Lender or Trustee of
their respective rights hereunder or under any other Loan Document, which is
given in a manner permitted by applicable law shall constitute proper notice;
without limitation of the foregoing, notice given in a form required or
permitted by statute shall (as to the portion of the Property to which such
statute is applicable) constitute proper notice.
Section
5.17
Invalidity
of Certain Provisions
. A determination that any provision of
this Mortgage is unenforceable or invalid shall not affect the enforceability or
validity of any other provision and the determination that the application of
any provision of this Mortgage to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances.
Section
5.18
Gender;
Titles
. Within this Mortgage, words of any gender shall be
held and construed to include any other gender, and words in the singular number
shall be held and construed to include the plural, unless the context otherwise
requires. Titles appearing at the beginning of any
subdivisions hereof are
for convenience only, do not constitute any part of such subdivisions, and shall
be disregarded in construing the language contained in such
subdivisions.
Section
5.19
Recording
. Mortgagor
will cause this Mortgage and all amendments and supplements thereto and
substitutions therefor and all financing statements and continuation statements
relating thereto to be recorded, filed, re-recorded and refiled in such manner
and in such places as Trustee or Agent shall reasonably request and will pay all
such recording, filing, re-recording and refiling taxes, fees and other
charges.
Section
5.20
Reporting Compliance
.
Mortgagor agrees to comply with any and all reporting requirements applicable to
the transaction evidenced by the Notes and secured by this Mortgage which are
set forth in any law, statute, ordinance, rule, regulation, order or
determination of any governmental authority, and further agrees upon request of
Agent to furnish Agent with evidence of such compliance.
Section
5.21
Certain
Consents
. Except where otherwise expressly provided herein, in
any instance hereunder where the approval, consent or the exercise of judgment
of Agent or any Lender is required, the granting or denial of such approval or
consent and the exercise of such judgment shall be within the sole discretion of
such party, and such party shall not, for any reason or to any extent, be
required to grant such approval or consent or exercise such judgment in any
particular manner, regardless of the reasonableness of either the request or the
judgment of such party.
Section
5.22
Certain
Obligations of Mortgagor
. Without limiting Mortgagor’s
obligations hereunder, Mortgagor’s liability hereunder and the indebtedness
secured hereby shall extend to and include all post petition interest, expenses,
and other duties and liabilities with respect to Mortgagor’s obligations
hereunder which would be owed but for the fact that the same may be
unenforceable due to the existence of a bankruptcy, reorganization or similar
proceeding.
Section
5.23
Authority
of Agent
. The persons constituting Lender may, by agreement
among them, provide for and regulate the exercise of rights and remedies
hereunder, but, unless and until modified to the contrary in writing signed by
all such persons and recorded in the same counties and parishes as this Mortgage
is recorded, (i) all persons other than Mortgagor and its affiliates shall be
entitled to rely on the
releases, waivers,
consents, approvals, notifications and other acts (including, without
limitation, appointment of substitute or successor trustee, or trustees,
hereunder and the bidding in of all or any part of the secured indebtedness held
by any one or more Lenders, whether the same be conducted under the provisions
hereof or otherwise) of Agent, without inquiry into any such agreements or the
existence of required
consent
or approval of any persons constituting Lender and without the joinder of any
party other than Agent in such releases, waivers, consents, approvals,
notifications or other acts and (ii) all notices, requests, consents, demands
and other communications required or permitted to be given hereunder may be
given to Agent.
Section
5.24
Counterparts
. This
Mortgage may be executed in several counterparts, all of which are identical,
except that, (a) to facilitate recordation, certain counterparts hereof may
include only that portion of
Exhibit A
which
contains descriptions of the properties located in (or otherwise subject to the
recording or filing requirements and/or protections of the recording or filing
acts or regulations of) the recording jurisdiction in which the particular
counterpart is to be recorded, and other portions of
Exhibit A
shall be
included in such counterparts by reference only and (b)
Schedule I
is
attached only to the master counterparts hereof being retained by Mortgagor and
Agent, (c) only those counterparts hereof being retained by Agent and Mortgagor
or otherwise containing counterpart descriptions of Mortgaged Properties located
in (or otherwise subject to the recording or filing requirements and/or
protections of the recording or filing acts or regulations of) the State of
Louisiana will have
Annex I
attached
thereto,
Annex
I
is included in all other counterparts by reference only, (d) only those
counterparts being retained by Agent and Mortgagor otherwise containing
counterpart descriptions of Mortgaged Properties located in (or otherwise
subject to the recording or filing requirements and/or protections of the
recording or filing acts or regulations of) North Dakota will have
Annex II
attached
thereto,
Annex
II
is included in all other counterparts by reference only and (e) the
execution of this Mortgage by Mortgagor may not be witnessed on those
counterparts hereof containing descriptions of Mortgaged Properties located in
states where witnesses are not required and/or encouraged by applicable
law. All of such counterparts together shall constitute one and the
same instrument.
Section
5.25
Multiple Parties
Constituting Mortgagor
. Unless the context clearly indicates
otherwise, as used in this Mortgage, “Mortgagor” means the Mortgagors named in
Section 1.1 hereof or any of them. The obligations of Mortgagor
hereunder shall be joint and several.
Section
5.26
Successors and
Assigns
. The terms, provisions, covenants, representations,
indemnifications and conditions hereof shall be binding upon Mortgagor, and the
successors and assigns of Mortgagor, and shall inure to the benefit of Agent,
Trustee and each person constituting Lender and their respective successors and
assigns, and shall constitute covenants running with the Mortgaged Properties.
Should the agency under which Agent serves be terminated, or otherwise cease to
exist, Lenders (including the respective successors and assigns of each person
constituting Lender named herein) shall be deemed to be the successors to Agent.
All references in this Mortgage to Mortgagor, Agent, Trustee or Lenders shall be
deemed to include all such successors and assigns.
Section
5.27
FINAL
AGREEMENT OF THE PARTIES
.
THE
WRITTEN 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
.
Section
5.28
CHOICE OF
LAW
.
WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW, THIS MORTGAGE SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE AND
THE LAWS OF THE UNITED STATES OF AMERICA, EXCEPT THAT TO THE EXTENT THAT THE LAW
OF A STATE IN WHICH A PORTION OF THE PROPERTY IS LOCATED (OR WHICH IS OTHERWISE
APPLICABLE TO A PORTION OF THE PROPERTY) NECESSARILY OR, IN THE SOLE DISCRETION
OF LENDER, APPROPRIATELY GOVERNS WITH RESPECT TO PROCEDURAL AND SUBSTANTIVE
MATTERS RELATING TO THE CREATION, PERFECTION AND ENFORCEMENT OF THE LIENS,
SECURITY INTERESTS AND OTHER RIGHTS AND REMEDIES OF THE TRUSTEE OR THE LENDER
GRANTED HEREIN, THE LAW OF SUCH STATE SHALL APPLY AS TO THAT PORTION OF THE
PROPERTY LOCATED IN (OR WHICH IS OTHERWISE SUBJECT TO THE LAWS OF) SUCH
STATE
.
Section
5.29
Reliance on Certificate or
Statement of Agent
. All third parties may rely upon a
certificate or statement of the Agent as to the occurrence of any act or event,
including, but not limited to, the occurrence of a default hereunder, or the
occurrence of an Event of Default under the Credit Agreement.
Section
5.30
Appearance.
Resolutions
, For purposes of Louisiana law, including but not
limited to the availability of executory process, Mortgagor has appeared on this
date before the undersigned Notary Public and witnesses in order to execute this
Mortgage. Mortgagor attaches, as
Annex I
, to
counterparts hereof being recorded in Louisiana certified resolutions of its
Board of Directors authorizing the execution and delivery of this
Mortgage.
Section
5.31
Paraph
. Mortgagor
acknowledges that no promissory note or other instrument has been presented to
the undersigned Notary Public to be paraphed for identification
herewith.
Section
5.32
Acceptance by
Agent
. In accordance with the provisions of Louisiana Civil
Code article 3289, Agent has accepted the benefits of the Mortgage without the
necessity of execution by Agent.
[Signatures
Begin on Next Page]
-36-
THUS DONE
AND PASSED this 14th day of April, 2009, to be effective, however, as of
April 14, 2009 (the “
Effective
Date
”), in my presence and in the presence of the undersigned competent
witnesses who hereunto sign their names with Mortgagor and me, Notary, after
reading of the whole.
WITNESSES: ST.
MARY LAND & EXPLORATION
COMPANY
/s/ FARAH PALIWALA
Name:
Farah Paliwala
By:
/s/ MILAM RANDOLPH
PHARO
Milam
Randolph Pharo
/s/ SERGIL VMOYRADOV
Senior
Vice President and General Counsel
Name:
Sergil
Vmoyradov
/s/ JENNIFER Y. AARON
NOTARY PUBLIC
The
address and tax identification number of the Company is:
1776
Lincoln Street, Suite 1100
Denver,
Colorado 80203
(Denver
County)
Taxpayer
I.D. No. 41-05 18430
The address
of Agent is:
1525 W.
WT Harris Blvd.,
Charlotte,
North Carolina 28262
The
address of Trustee is:
Jay
Chernosky
1001
Fannin Street, Suite 2255
Houston,
Texas 77002
Signature Page
to
Deed of
Trust, Mortgage, Line of Credit Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement
STATE OF
TEXAS §
§
COUNTY OF
HARRIS §
BE IT
REMEMBERED THAT I, the undersigned authority, a notary public duly qualified,
commissioned, sworn and acting in and for the county and state aforesaid, and
being authorized in such county and state to take acknowledgments, hereby
certify that, on this __ day of April, 2009, THERE personally appeared before
me: Milam Randolph Pharo, Senior Vice President and General Counsel of St. Mary
Land & Exploration Company, a Delaware corporation, known to me to be such
officer, such corporation being a party to the foregoing
instrument.
COLORADO,
LOUISIANA, MONTANA, NEVADA, NEW MEXICO, NORTH DAKOTA, OKLAHOMA, SOUTH
DAKOTA, TEXAS, UTAH and
WYOMING
|
The
foregoing instrument was acknowledged before me on this day,
by
such
person, the above designated officer of the corporation
specified
following
such person’s name, on behalf of said corporation.
On
this date before me, the undersigned authority, personally came
and
appeared
such person, to me personally known and known by me to be the person whose
genuine sign ature is affixed to the foregoing document as the above
designated officer of the corporation specified following such and
person’s name, who signed said document before me, and who acknowledged,
in my presence, that he signed the above and foregoing document as his own
free act and deed on behalf of such corporation by authority of its board
of directors and as the free act and deed of such corporation and for the
uses and purposes therein set forth and apparent.
This
instrument was acknowledged before me on this day, by such person, the
above designated officer of the corporation specified following such
person’s name, on behalf of said
corporation.
|
IN
WITNESS WHEREOF, I have hereunto set my hand and official seal in the City of
Houston, Harris County, Texas on the day and year first above
written.
/s/ JENNIFER Y. AARON
NOTARY PUBLIC, in and for the State of
Texas
Jennifer Y.
Aaron
My
commission
expires: (printed
name)
05-01-2011
[SEAL]
Acknowledgment Page
to
Deed of
Trust, Mortgage, Line of Credit Mortgage Assignment, Security Agreement, Fixture
Filing and Financing Statement
ANNEX
I
ANNEX
II
EXHIBIT
A
[Description
of leases and lands, grouped with wells]
Need
actual land descriptions for the States of North Dakota, Oklahoma and Wyoming
-references to recorded instruments containing descriptions sufficient for all
other states
SCHEDULE
I
[List of
Wells with corresponding Working Interests and Net Revenue
interests]