EXHIBIT 10.2
CREDIT AND GUARANTY AGREEMENT
DATED AS OF JULY 7, 2004, AND AMENDED AS OF JULY 22, 2004
AMONG
BELDEN & BLAKE CORPORATION,
CERTAIN SUBSIDIARIES OF BELDEN & BLAKE CORPORATION,
AS GUARANTORS,
VARIOUS LENDERS,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
AS SOLE LEAD ARRANGER, SOLE BOOKRUNNER,
SYNDICATION AGENT AND ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION,
AS CO-DOCUMENTATION AGENT
AND
NATIONAL CITY BANK,
AS CO-DOCUMENTATION AGENT
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$170,000,000 SENIOR SECURED CREDIT FACILITIES
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TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS AND INTERPRETATION............................................................. 2
1.1. DEFINITIONS...................................................................................... 2
1.2. ACCOUNTING TERMS................................................................................. 40
1.3. INTERPRETATION, ETC.............................................................................. 41
SECTION 2. LOANS AND LETTERS OF CREDIT................................................................ 41
2.1. TERM LOANS....................................................................................... 41
2.2. REVOLVING LOANS.................................................................................. 42
2.3. RESERVED......................................................................................... 43
2.4. ISSUANCE OF LETTERS OF CREDIT AND HEDGE LETTERS OF CREDIT AND PURCHASE OF PARTICIPATIONS THEREIN. 43
2.5. PRO RATA SHARES; AVAILABILITY OF FUNDS........................................................... 50
2.6. USE OF PROCEEDS.................................................................................. 51
2.7. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES.................................... 51
2.8. INTEREST ON LOANS................................................................................ 52
2.9. CONVERSION/CONTINUATION.......................................................................... 55
2.10. DEFAULT INTEREST................................................................................ 55
2.11. FEES ....................................................................................... 56
2.12. SCHEDULED PAYMENTS/COMMITMENT REDUCTIONS........................................................ 57
2.13. VOLUNTARY PREPAYMENTS/COMMITMENT REDUCTIONS..................................................... 58
2.14. MANDATORY PREPAYMENTS/COMMITMENT REDUCTIONS..................................................... 59
2.15. APPLICATION OF PREPAYMENTS/REDUCTIONS........................................................... 61
2.16. GENERAL PROVISIONS REGARDING PAYMENTS........................................................... 62
2.17. RATABLE SHARING................................................................................. 64
2.18. MAKING OR MAINTAINING EURODOLLAR RATE LOANS..................................................... 64
2.19. INCREASED COSTS; CAPITAL ADEQUACY............................................................... 66
2.20. TAXES; WITHHOLDING, ETC......................................................................... 68
2.21. OBLIGATION TO MITIGATE.......................................................................... 71
2.22. DEFAULTING LENDERS.............................................................................. 72
2.23. REMOVAL OR REPLACEMENT OF A LENDER.............................................................. 73
SECTION 3. CONDITIONS PRECEDENT....................................................................... 74
3.1. CLOSING DATE..................................................................................... 74
3.2. CONDITIONS TO EACH CREDIT EXTENSION.............................................................. 80
SECTION 4. REPRESENTATIONS AND WARRANTIES............................................................. 82
4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION....................................... 82
4.2. CAPITAL STOCK AND OWNERSHIP...................................................................... 82
4.3. DUE AUTHORIZATION................................................................................ 83
4.4. NO CONFLICT...................................................................................... 83
4.5. GOVERNMENTAL CONSENTS............................................................................ 83
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4.6. BINDING OBLIGATION............................................................................... 83
4.7. HISTORICAL FINANCIAL STATEMENTS.................................................................. 84
4.8. PROJECTIONS...................................................................................... 84
4.9. NO MATERIAL ADVERSE CHANGE....................................................................... 84
4.10. NO RESTRICTED JUNIOR PAYMENTS................................................................... 84
4.11. NO RESERVE WRITE-DOWNS.......................................................................... 84
4.12. ADVERSE PROCEEDINGS, ETC........................................................................ 85
4.13. PAYMENT OF TAXES................................................................................ 85
4.14. PROPERTIES...................................................................................... 85
4.15. ENVIRONMENTAL MATTERS........................................................................... 86
4.16. NO DEFAULTS..................................................................................... 87
4.17. MATERIAL CONTRACTS.............................................................................. 87
4.18. GOVERNMENTAL REGULATION......................................................................... 87
4.19. MARGIN STOCK.................................................................................... 87
4.20. EMPLOYEE MATTERS................................................................................ 87
4.21. EMPLOYEE BENEFIT PLANS.......................................................................... 88
4.22. CERTAIN FEES.................................................................................... 89
4.23. SOLVENCY........................................................................................ 89
4.24. RELATED AGREEMENTS.............................................................................. 89
4.25. COMPLIANCE WITH STATUTES, ETC................................................................... 90
4.26. FUTURE COMMITMENTS.............................................................................. 90
4.27. DISCLOSURE...................................................................................... 90
SECTION 5. AFFIRMATIVE COVENANTS...................................................................... 91
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS........................................................... 91
5.2. EXISTENCE........................................................................................ 96
5.3. PAYMENT OF TAXES AND CLAIMS...................................................................... 96
5.4. MAINTENANCE OF PROPERTIES........................................................................ 96
5.5. INSURANCE........................................................................................ 96
5.6. BOOKS AND RECORDS; INSPECTIONS................................................................... 97
5.7. LENDERS MEETINGS................................................................................. 97
5.8. COMPLIANCE WITH LAWS............................................................................. 97
5.9. ENVIRONMENTAL.................................................................................... 98
5.10. SUBSIDIARIES.................................................................................... 99
5.11. ADDITIONAL MATERIAL REAL ESTATE ASSETS.......................................................... 100
5.12. INTEREST RATE PROTECTION........................................................................ 101
5.13. SWAP AGREEMENT.................................................................................. 101
5.14. FURTHER ASSURANCES.............................................................................. 101
5.15. NON-CONSOLIDATION............................................................................... 101
5.16. POST-CLOSING REFINANCING........................................................................ 101
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SECTION 6. NEGATIVE COVENANTS......................................................................... 102
6.1. INDEBTEDNESS..................................................................................... 102
6.2. LIENS ....................................................................................... 104
6.3. EQUITABLE LIEN................................................................................... 107
6.4. NO FURTHER NEGATIVE PLEDGES...................................................................... 107
6.5. RESTRICTED JUNIOR PAYMENTS....................................................................... 107
6.6. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS......................................................... 108
6.7. INVESTMENTS...................................................................................... 108
6.8. FINANCIAL COVENANTS.............................................................................. 109
6.9. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS......................................... 114
6.10. DISPOSAL OF SUBSIDIARY INTERESTS................................................................ 116
6.11. SALES AND LEASE-BACKS........................................................................... 116
6.12. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES................................................... 116
6.13. CONDUCT OF BUSINESS............................................................................. 116
6.14. FORWARD SALES................................................................................... 117
6.15. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS............................................. 117
6.16. AMENDMENTS OR WAIVERS OF WITH RESPECT TO SENIOR SECURED INDEBTEDNESS............................ 117
6.17. FISCAL YEAR..................................................................................... 117
SECTION 7. GUARANTY................................................................................... 117
7.1. GUARANTY OF THE OBLIGATIONS...................................................................... 117
7.2. CONTRIBUTION BY GUARANTORS....................................................................... 118
7.3. PAYMENT BY GUARANTORS............................................................................ 119
7.4. LIABILITY OF GUARANTORS ABSOLUTE................................................................. 119
7.5. WAIVERS BY GUARANTORS............................................................................ 121
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC............................................. 122
7.7. SUBORDINATION OF OTHER OBLIGATIONS............................................................... 123
7.8. CONTINUING GUARANTY.............................................................................. 123
7.9. AUTHORITY OF GUARANTORS OR COMPANY............................................................... 123
7.10. FINANCIAL CONDITION OF COMPANY.................................................................. 123
7.11. BANKRUPTCY, ETC................................................................................. 124
7.12. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR.................................................... 125
SECTION 8. EVENTS OF DEFAULT.......................................................................... 125
8.1. EVENTS OF DEFAULT................................................................................ 125
SECTION 9. AGENTS..................................................................................... 129
9.1. APPOINTMENT OF AGENTS............................................................................ 129
9.2. POWERS AND DUTIES................................................................................ 129
9.3. GENERAL IMMUNITY................................................................................. 129
9.4. AGENTS ENTITLED TO ACT AS LENDER................................................................. 131
9.5. LENDERS' REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT.......................................... 132
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9.6. RIGHT TO INDEMNITY............................................................................... 132
9.7. SUCCESSOR ADMINISTRATIVE AGENT................................................................... 133
9.8. COLLATERAL DOCUMENTS AND GUARANTY................................................................ 133
SECTION 10. MISCELLANEOUS............................................................................. 134
10.1. NOTICES......................................................................................... 134
10.2. EXPENSES........................................................................................ 135
10.3. INDEMNITY....................................................................................... 135
10.4. SET-OFF......................................................................................... 136
10.5. AMENDMENTS AND WAIVERS.......................................................................... 137
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.......................................................... 139
10.7. INDEPENDENCE OF COVENANTS....................................................................... 143
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.......................................... 143
10.9. NO WAIVER; REMEDIES CUMULATIVE.................................................................. 144
10.10. MARSHALLING; PAYMENTS SET ASIDE................................................................ 144
10.11. SEVERABILITY................................................................................... 144
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS..................................... 144
10.13. HEADINGS....................................................................................... 145
10.14. APPLICABLE LAW................................................................................. 145
10.15. CONSENT TO JURISDICTION........................................................................ 145
10.16. WAIVER OF JURY TRIAL........................................................................... 146
10.17. CONFIDENTIALITY................................................................................ 146
10.18. USURY SAVINGS CLAUSE........................................................................... 147
10.19. COUNTERPARTS................................................................................... 147
10.20. EFFECTIVENESS.................................................................................. 148
10.21. USA PATRIOT ACT................................................................................ 148
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APPENDICES: A-1 Term Loan Commitments
A-2 Revolving Commitments
A-3 Hedge L/C Commitments
B Notice Addresses
SCHEDULES: 3.1(i) Closing Date Mortgaged Properties
4.1 Jurisdictions of Organization and Qualification
4.2 Capital Stock and Ownership
4.13 Taxes
4.14 Real Estate Assets; Hydrocarbon Interests
4.17 Material Contracts
6.1 Certain Indebtedness
6.2 Certain Liens
6.7 Certain Investments
6.12 Certain Affiliate Transactions
EXHIBITS: A-1 Funding Notice
A-2 Conversion/Continuation Notice
A-3 Issuance Notice
B-1 Term Loan Note
B-2 Revolving Loan Note
B-3 Hedge L/C Loan Note
C Compliance Certificate
D Opinions of Counsel
E Assignment Agreement
F Certificate Re Non-bank Status
G-1 Closing Date Certificate
G-2 Solvency Certificate
H Counterpart Agreement
I Pledge and Security Agreement
J Sponsor Pledge Agreement
K Mortgage
L Landlord Waiver and Consent Agreement
M Collateral Trust Agreement
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CREDIT AND GUARANTY AGREEMENT
This CREDIT AND GUARANTY AGREEMENT, dated as of July 7, 2004 and
amended as of July 21, 2004, is entered into by and among BELDEN & BLAKE
CORPORATION, an Ohio corporation ("COMPANY"), CERTAIN SUBSIDIARIES OF COMPANY,
as Guarantors, the Lenders party hereto from time to time, GOLDMAN SACHS CREDIT
PARTNERS L.P. ("GSCP"), as Sole Lead Arranger, Sole Book Runner, Syndication
Agent (in such capacities, "SYNDICATION AGENT"), and Administrative Agent
(together with its permitted successors in such capacity, "ADMINISTRATIVE
AGENT"), GENERAL ELECTRIC CAPITAL CORPORATION ("GECC"), as Co-Documentation
Agent, and NATIONAL CITY BANK ("NATIONAL CITY"), as Co-Documentation Agent
(together with GECC, the "DOCUMENTATION AGENTS").
RECITALS:
WHEREAS, capitalized terms used in these Recitals shall have the
respective meanings set forth for such terms in Section 1.1 hereof;
WHEREAS, concurrently with transactions contemplated hereunder, Capital C
Ohio, Inc., an Ohio corporation and wholly-owned Subsidiary of Capital C Energy
Operations, LP (the "SPONSOR") shall, pursuant to the Merger Agreement, merge
with and into Company and Company shall be the surviving corporation (the
"ACQUISITION");
WHEREAS, Lenders have agreed to extend certain credit facilities to
Company, in an aggregate amount not to exceed $170,000,000, consisting of (i)
$100,000,000 aggregate principal amount of Term Loans, (ii) up to $30,000,000
aggregate principal amount of Revolving Commitments and (iii) up to $40,000,000
aggregate principal amount of Hedge L/C Commitments. The proceeds of the Term
Loans will be used to finance a portion of the Acquisition, including the
refinancing of Existing Indebtedness and the payment of Transaction Costs.
Amounts available under the Revolving Commitments shall be used for working
capital requirements and other general corporate purposes of Company; provided
that (i) up to $15,000,000 of the Revolving Commitments shall be available for
the issuance of Letters of Credit to provide credit support to Company's
obligations under the Swap Agreement in excess of the Hedge L/C Commitments from
the Closing Date through the Revolving Commitment Termination Date and (ii) an
additional $5,000,000 of the Revolving Commitments shall be available for the
issuance of Letters of Credit for general corporate purposes through the
Revolving Commitment Termination Date. Amounts available under the Hedge L/C
Commitments shall be used solely to provide credit support to Company's
obligations under the Swap Agreement;
WHEREAS, Company has agreed to secure all of its Obligations by granting
to Collateral Trustee, for the benefit of Secured Parties, a First Priority Lien
on its assets, including a pledge of all of the Capital Stock of each of its
Domestic Subsidiaries and 65% of all the Capital Stock of each of its Foreign
Subsidiaries and Sponsor has agreed to pledge to Collateral Trustee all of the
Capital Stock of Company; and
WHEREAS, Guarantors have agreed to guarantee the obligations of Company
hereunder and to secure their respective Obligations by granting to Collateral
Trustee, for the benefit of Secured Parties, a First Priority Lien on their
respective assets, including a pledge of all of the Capital Stock of each of
their respective Domestic Subsidiaries and 65% of all the Capital Stock of each
of their respective Foreign Subsidiaries.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1. DEFINITIONS.
The following terms used herein, including in the preamble, recitals,
exhibits and schedules hereto, shall have the following meanings:
"ACCOUNTING CHANGE" as defined in Section 1.2(b).
"ACQUISITION" as defined in the preamble hereto.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by dividing (and rounding upward to the next
whole multiple of 1/16 of 1%) (i) (a) the rate per annum (rounded to the nearest
1/100 of 1%) equal to the rate determined by Administrative Agent to be the
offered rate which appears on the page of the Telerate Screen which displays an
average British Bankers Association Interest Settlement Rate (such page
currently being page number 3740 or 3750, as applicable) for deposits (for
delivery on the first day of such period) with a term equivalent to such period
in Dollars, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (b) in the event the rate referenced
in the preceding clause (a) does not appear on such page or service or if such
page or service shall cease to be available, the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be
the offered rate on such other page or other service which displays an average
British Bankers Association Interest Settlement Rate for deposits (for delivery
on the first day of such period) with a term equivalent to such period in
Dollars, determined as of approximately 11:00 a.m. (London, England time) on
such Interest
2
Rate Determination Date, or (c) in the event the rates referenced in the
preceding clauses (a) and (b) are not available, the rate per annum (rounded to
the nearest 1/100 of 1%) equal to the offered quotation rate to first class
banks in the London interbank market by GSCP for deposits (for delivery on the
first day of the relevant period) in Dollars of amounts in same day funds
comparable to the principal amount of the applicable Loan of Administrative
Agent, in its capacity as a Lender, for which the Adjusted Eurodollar Rate is
then being determined with maturities comparable to such period as of
approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, by (ii) an amount equal to (a) one minus (b) the Applicable
Reserve Requirement.
"ADMINISTRATIVE AGENT" as defined in the preamble hereto.
"ADVERSE PROCEEDING" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims), whether pending or, to
the knowledge of Company or any of its Subsidiaries, threatened against or
affecting Company or any of its Subsidiaries or any property of Company or any
of its Subsidiaries.
"AFFECTED LENDER" as defined in Section 2.18(b).
"AFFECTED LOANS" as defined in Section 2.18(b).
"AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power (i) to vote 5% or more of the Securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise.
"AGENT" means each of Syndication Agent, Administrative Agent and
Documentation Agents.
"AGGREGATE AMOUNTS DUE" as defined in Section 2.17.
"AGGREGATE PAYMENTS" as defined in Section 7.2.
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"AGREEMENT" means this Credit and Guaranty Agreement, dated as of
July 7, 2004, as it may be amended, supplemented or otherwise modified from time
to time.
"APPLICABLE MARGIN" means (i) with respect to Loans that are
Eurodollar Rate Loans, (a) from the Closing Date until the six month anniversary
of the Closing Date, a percentage, per annum, determined by reference for the
respective Loan to the following table as if the Senior Leverage Ratio then in
effect were 1.50:1.00; and (b) thereafter, a percentage, per annum, determined
by reference for the respective Loan to the Senior Leverage Ratio in effect from
time to time as set forth below:
APPLICABLE MARGIN
SENIOR LEVERAGE FOR REVOLVING LOANS AND HEDGE APPLICABLE MARGIN
RATIO L/C LOANS FOR TERM LOANS
- ----------------- ----------------------------- -----------------
> or = 1.50:1.00 2.75% 2.75%
< 1.50:1.00 2.50% 2.50%
> or = 0.75:1.00
< 0.75:1.00 2.25% 2.50%
and (ii) with respect to Loans that are Base Rate Loans, an amount
equal to (a) the Applicable Margin for Eurodollar Rate Loans as set forth in
clause (i)(a) or (i)(b) above, as applicable, minus (b) 1.00% per annum. No
change in the Applicable Margin shall be effective until three Business Days
after the date on which Administrative Agent shall have received the applicable
financial statements and a Compliance Certificate pursuant to Section 5.1(d)
calculating the Senior Leverage Ratio. At any time Company has not submitted to
Administrative Agent the applicable information as and when required under
Section 5.1(d), the Applicable Margin shall be determined as if the Senior
Leverage Ratio were in excess of 1.50:1.00. Within one Business Day of receipt
of the applicable information under Section 5.1(d), Administrative Agent shall
give each Lender telefacsimile or telephonic notice (confirmed in writing) of
the Applicable Margin in effect from such date.
"APPLICABLE RESERVE REQUIREMENT" means, at any time, for any
Eurodollar Rate Loan, the maximum rate, expressed as a decimal, at which
reserves (including, without limitation, any basic marginal, special,
supplemental, emergency or other reserves) are required to be maintained with
respect thereto against "Eurocurrency liabilities" (as such term is defined in
Regulation D) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System or other applicable banking regulator.
Without limiting the effect of the foregoing, the Applicable Reserve Requirement
shall reflect any other reserves required to be
4
maintained by such member banks with respect to (i) any category of liabilities
which includes deposits by reference to which the applicable Adjusted Eurodollar
Rate or any other interest rate of a Loan is to be determined, or (ii) any
category of extensions of credit or other assets which include Eurodollar Rate
Loans. A Eurodollar Rate Loan shall be deemed to constitute Eurocurrency
liabilities and as such shall be deemed subject to reserve requirements without
benefits of credit for proration, exceptions or offsets that may be available
from time to time to the applicable Lender. The rate of interest on Eurodollar
Rate Loans shall be adjusted automatically on and as of the effective date of
any change in the Applicable Reserve Requirement.
"APPLICATIONS" as defined in Section 2.4(l).
"ASSET SALE" means a sale, lease or sub-lease (as lessor or
sublessor), sale and leaseback, assignment, conveyance, transfer or other
disposition to, or any exchange of property with, any Person (other than Company
or any Guarantor Subsidiary), in one transaction or a series of transactions, of
all or any part of Company's or any of its Subsidiaries' businesses, assets or
properties of any kind, including Production Payments, whether real, personal,
or mixed and whether tangible or intangible, whether now owned or hereafter
acquired, including, without limitation, the Capital Stock of any of Company's
Subsidiaries, other than (i) Hydrocarbons (or other assets) sold or leased in
the ordinary course of business (excluding any such sales by operations or
divisions discontinued or to be discontinued), and (ii) sales of other assets
for aggregate consideration of less than $1,000,000 with respect to any
transaction or series of related transactions and less than $5,000,000 in the
aggregate during any Fiscal Year.
"ASSIGNMENT AGREEMENT" means an Assignment and Assumption Agreement
substantially in the form of Exhibit E, with such amendments or modifications as
may be approved by Administrative Agent.
"ASSIGNMENT EFFECTIVE DATE" as defined in Section 10.6(b).
"AUTHORIZED OFFICER" means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer), chief executive
officer, president or one of its vice presidents (or the equivalent thereof),
and such Person's chief financial officer or treasurer.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
"BASE RATE" means, for any day, a rate per annum equal to the
greater of (i) the Prime Rate in effect on such day and (ii) the Federal Funds
Effective Rate in effect on such day plus -1/2 of 1%. Any change in the Base
Rate due to a change in the Prime Rate or the Federal
5
Funds Effective Rate shall be effective on the effective day of such change in
the Prime Rate or the Federal Funds Effective Rate, respectively.
"BASE RATE LOAN" means a Loan bearing interest at a rate determined
by reference to the Base Rate.
"BASIS DIFFERENTIAL" means, in the case of any Oil and Gas Property,
the difference between the NYMEX futures contract prices and the sales prices at
the delivery point where the gas or oil, as the case may be, produced by such
Oil and Gas Property is sold.
"BENEFICIARY" means each Agent, Issuing Bank, Lender and Lender
Counterparty.
"BUSINESS DAY" means (i) any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New York or is a day
on which banking institutions located in such state are authorized or required
by law or other governmental action to close and (ii) with respect to all
notices, determinations, fundings and payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate Loans, the term "BUSINESS DAY" shall mean
any day which is a Business Day described in clause (i) and which is also a day
for trading by and between banks in Dollar deposits in the London interbank
market.
"CAPITAL LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"CAPITAL STOCK" means any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.
"CASH" means money, currency or a credit balance in any Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing no more than one
year after such date; (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof, in each case maturing no more than one year
after such date and having, at the time of the acquisition thereof, a rating of
at least A-1 from S&P or at least P-1 from Moody's; (iii)
6
commercial paper maturing no more than one year from the date of creation
thereof and having, at the time of the acquisition thereof, a rating of at least
A-1 from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing no more than one year after such date and issued
or accepted by any Lender or by any commercial bank organized under the laws of
the United States of America or any state thereof or the District of Columbia
that (a) is at least "adequately capitalized" (as defined in the regulations of
its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in
such regulations) of not less than $100,000,000; and (v) shares of any money
market mutual fund that (a) has substantially all of its assets invested
continuously in the types of investments referred to in clauses (i) and (ii)
above, (b) has net assets of not less than $500,000,000, and (c) has the highest
rating obtainable from either S&P or Moody's.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially
in the form of Exhibit F.
"CHANGE OF CONTROL" means, at any time, (i) Sponsor shall cease to
beneficially own and control at least 60% on a fully diluted basis of the
economic and voting interests in the Capital Stock of Company; (ii) any Person
or "group" (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act)
other than Sponsor (a) shall have acquired beneficial ownership of 25% or more
on a fully diluted basis of the voting and/or economic interest in the Capital
Stock of Company or (b) shall have obtained the power (whether or not exercised)
to elect a majority of the members of the board of directors (or similar
governing body) of Company; (iii) the majority of the seats (other than vacant
seats) on the board of directors (or similar governing body) of Company cease to
be occupied by Persons who either (a) were members of the board of directors of
Company on the Closing Date or (b) were nominated for election by the board of
directors of Company, a majority of whom were directors on the Closing Date or
whose election or nomination for election was previously approved by a majority
of such directors; or (iv) any "change of control" or similar event under the
Senior Secured Notes shall occur.
"CLASS" means (i) with respect to Lenders, each of the following
classes of Lenders: (a) Lenders having Term Loan Exposure, (b) Lenders having
Revolving Exposure and (c) Lenders having Hedge L/C Exposure, and (ii) with
respect to Loans, each of the following classes of Loans: (a) Term Loans, (b)
Revolving Loans and (c) Hedge L/C Loans.
"CLOSING DATE" means the date on which the conditions precedent set
forth in Section 3.1 shall have been satisfied or waived.
"CLOSING DATE CERTIFICATE" means a Closing Date Certificate
substantially in the form of Exhibit G-1.
"CLOSING DATE MORTGAGED PROPERTY" as defined in Section 3.1(i).
7
"COLLATERAL" means, collectively, all of the real, personal and
mixed property (including Capital Stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations;
provided, the term "Collateral" shall not include any TBR Delayed Transfer
Assets.
"COLLATERAL DOCUMENTS" means the Pledge and Security Agreement, the
Sponsor Pledge Agreement, the Mortgages, the Landlord Personal Property
Collateral Access Agreements, if any, the Collateral Trust Agreement and all
other instruments, documents and agreements delivered by any Credit Party
pursuant to this Agreement or any of the other Credit Documents in order to
grant to Collateral Trustee, for the benefit of the Secured Parties, a Lien on
any real, personal or mixed property of that Credit Party as security for the
Obligations.
"COLLATERAL QUESTIONNAIRE" means a certificate in form satisfactory
to Administrative Agent that provides information with respect to the personal
or mixed property of each Credit Party.
"COLLATERAL TRUST AGREEMENT" means a Collateral Trust Agreement
substantially in the form of Exhibit M, as it may be amended, supplemented or
otherwise modified from time to time.
"COLLATERAL TRUSTEE" means Wells Fargo Bank, N.A.
"COMBINED CAPITAL EXPENDITURES" means, for any period, the sum of
the aggregate of Consolidated Capital Expenditures and Consolidated Other
Capital Expenditures for such period.
"COMMITMENT" means any Revolving Commitment, Term Loan Commitment,
or Hedge L/C Commitment.
"COMPANY" as defined in the preamble hereto.
"COMPLIANCE CERTIFICATE" means a Compliance Certificate
substantially in the form of Exhibit C.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, an amount
determined for Company and its Subsidiaries on a consolidated basis equal to (i)
Consolidated Net Income plus the sum, without duplication and to the extent
deducted in determining Consolidated Net Income, of the amounts for such period
of (a) Consolidated Interest Expense, (b) provisions for taxes based on income,
(c) total depreciation, depletion and impairment expense, (d) total amortization
expense, (e) other non-Cash items reducing Consolidated Net Income (excluding
any such non-Cash item to the extent that it represents an accrual or reserve
8
for potential Cash items in any future period or amortization of a prepaid Cash
item that was paid in a prior period), (f) the aggregate amount of seismic and
delay rentals expenses relating to undeveloped acreage and exploratory dry-hole
costs for that period and (g) costs and expenses related to the Merger not in
excess of $36,000,000, minus (ii) other non-Cash items increasing Consolidated
Net Income for such period (excluding any such non-Cash item to the extent it
represents the reversal of an accrual or reserve for potential Cash item in any
prior period); provided, however, prior to the first anniversary of the Closing
Date, Consolidated Adjusted EBITDA shall be adjusted as if the TBR Assets and
Arrow Oilfield Services division were sold as at the beginning of the period
tested. Notwithstanding anything to the contrary contained herein, Consolidated
Adjusted EBITDA shall be deemed to be $15,486,000 for the Fiscal Quarter ended
March 31, 2004.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures of Company and its Subsidiaries during such period
determined on a consolidated basis that, in accordance with GAAP, are or should
be included in "purchase of property and equipment" or similar items (including,
without limitation, (i) field enhancement, infrastructure and plug and
abandonment, and (ii) general and administrative) reflected in the consolidated
statement of cash flows of Company and its Subsidiaries. Consolidated Capital
Expenditures shall not include Consolidated Other Capital Expenditures or
Discretionary Capital Expenditures, expenditures of insurance proceeds to
rebuild or replace assets of Company and its Subsidiaries that have been damaged
or destroyed, and assets acquired pursuant to the reinvestment provisions of
Section 2.14(a).
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period, excluding any amount not payable
in Cash.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Company and its Subsidiaries on a
consolidated basis that may properly be classified as current assets in
conformity with GAAP, excluding Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis that may properly be classified as current liabilities in
conformity with GAAP, excluding the current portion of long term debt.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount (if
positive) equal to: (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated Adjusted EBITDA, plus (b) the Consolidated Working
Capital Adjustment, minus (ii) the sum, without duplication, of the amounts for
such period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding repayments of Revolving Loans except to the extent the Revolving
Commitments are permanently reduced in connection with such
9
repayments), (b) Consolidated Capital Expenditures and Consolidated Other
Capital Expenditures (net of any proceeds of (y) any related financings with
respect to such expenditures and (z) any sales of assets used to finance such
expenditures), (c) Consolidated Cash Interest Expense, (d) provisions for
current taxes based on income of Company and its Subsidiaries and payable in
cash with respect to such period, and (e) proceeds of Asset Sales to the extent
such proceeds are held pending reinvestment in productive assets as permitted by
Section 2.14(a). Consolidated Excess Cash Flow for the Fiscal Year ending
December 31, 2004 shall be deemed to be the Consolidated Excess Cash Flow for
the period beginning on the Closing Date and ending December 31, 2004.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest net of payments received under
Interest Rate Agreements) of Company and its Subsidiaries on a consolidated
basis with respect to all outstanding Indebtedness of Company and its
Subsidiaries, including all commissions, discounts and other fees and charges
owed with respect to letters of credit and net costs under Interest Rate
Agreements, but excluding, however, any amounts referred to in Section 2.11(e)
payable on or before the Closing Date. Notwithstanding anything to the contrary
contained herein, for purposes of determining Consolidated Interest Expense for
any period ending prior to the first anniversary of the Closing Date,
Consolidated Interest Expense shall be an amount equal to actual Consolidated
Interest Expense from the Closing Date through the date of determination
multiplied by a fraction the numerator of which is 365 and the denominator of
which is the number of days from the Closing Date through the date of
determination.
"CONSOLIDATED NET INCOME" means, for any period, (i) the net income
(or loss) of Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
minus (ii) (a) the income (or loss) of any Person (other than a Subsidiary of
Company) in which any other Person (other than Company or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (b) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged
into or consolidated with Company or any of its Subsidiaries or that Person's
assets are acquired by Company or any of its Subsidiaries, (c) the income of any
Subsidiary of Company to the extent that the declaration or payment of dividends
or similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary, (d) any after-tax gains or losses attributable to Asset Sales
or returned surplus assets of any Pension Plan, (e) any unrealized non-cash
gains or losses attributable to mark-to-market treatment of derivatives
(including those
10
resulting from the application of FAS 133), and (f) (to the extent not included
in clauses (a) through (e) above) any net extraordinary gains or net
extraordinary losses.
"CONSOLIDATED OTHER CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures of Company and its Subsidiaries with respect to
drilling and exploration of oil and gas during such period determined on a
consolidated basis that, in accordance with GAAP, are or should be included in
capital expenditures or similar items reflected in the consolidated statement of
cash flows of Company and its Subsidiaries. Consolidated Other Capital
Expenditures shall not include Consolidated Capital Expenditures or
Discretionary Capital Expenditures, expenditures of insurance proceeds to
rebuild or replace assets of Company and its Subsidiaries that have been damaged
or destroyed, and assets acquired pursuant to the reinvestment provisions of
Section 2.14(a).
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the excess of Consolidated Current Assets over Consolidated
Current Liabilities, in each case calculated without taking into account (i) any
unrealized non-cash gains or losses attributable to mark-to-market treatment of
derivatives (including those resulting from the application of FAS 133) and (ii)
deferred tax assets or deferred tax liabilities relating to derivatives that
arise as a result of the application of hedge accounting to such hedge
derivatives.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"CONTRIBUTING GUARANTORS" as defined in Section 7.2.
"CONVERSION/CONTINUATION DATE" means the effective date of a
continuation or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
"CONVERSION/CONTINUATION NOTICE" means a Conversion/Continuation
Notice substantially in the form of Exhibit A-2.
11
"COUNTERPART AGREEMENT" means a Counterpart Agreement substantially
in the form of Exhibit H delivered by a Credit Party pursuant to Section 5.10.
"CREDIT DATE" means the date of a Credit Extension.
"CREDIT DOCUMENT" means any of this Agreement, the Notes, if any,
the Collateral Documents, any documents or certificates executed by Company in
favor of Issuing Bank relating to Letters of Credit or Hedge Letters of Credit,
and all other documents, instruments or agreements executed and delivered by a
Credit Party for the benefit of any Agent, Issuing Bank or any Lender in
connection herewith.
"CREDIT EXTENSION" means the making of a Loan or the issuing of a
Letter of Credit or Hedge Letter of Credit.
"CREDIT PARTY" means each Person (other than any Agent, Issuing Bank
or any Lender or any other representative thereof) from time to time party to a
Credit Document.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement, each of which is for the purpose of hedging
the foreign currency risk associated with Company's and its Subsidiaries'
operations and not for speculative purposes.
"CURRENT ISSUING BANK" as defined in Section 2.4(j).
"DEFAULT" means a condition or event that, after notice or lapse of
time or both, would constitute an Event of Default.
"DEFAULT EXCESS" means, with respect to any Defaulting Lender, the
excess, if any, of such Defaulting Lender's Pro Rata Share of the aggregate
outstanding principal amount of Loans or participations in Letters of Credit or
Hedge Letters of Credit of all Lenders (calculated as if all Defaulting Lenders
(other than such Defaulting Lender) had funded all of their respective Defaulted
Loans) over the aggregate outstanding principal amount of all Loans and
participations in Letters of Credit or Hedge Letters of Credit of such
Defaulting Lender.
"DEFAULT PERIOD" means, with respect to any Defaulting Lender, the
period commencing on the date of the applicable Funding Default and ending on
the earliest of the following dates: (i) the date on which all Commitments are
cancelled or terminated and/or the Obligations are declared or become
immediately due and payable, (ii) the date on which (a) the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero (whether by
the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting
Lender or by the non-pro rata application of any voluntary or mandatory
prepayments of the Loans in
12
accordance with the terms of Section 2.13 or Section 2.14 or by a combination
thereof) and (b) such Defaulting Lender shall have delivered to Company and
Administrative Agent a written reaffirmation of its intention to honor its
obligations hereunder with respect to its Commitments, and (iii) the date on
which Company, Administrative Agent, each Issuing Bank and Requisite Lenders
waive all Funding Defaults of such Defaulting Lender in writing.
"DEFAULTED LOAN" as defined in Section 2.22.
"DEFAULTING LENDER" as defined in Section 2.22.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DISCRETIONARY CAPITAL EXPENDITURES" means, for any period,
expenditures of Company and its Subsidiaries with respect to drilling and
exploration of oil and gas during such period determined on a consolidated basis
that, in accordance with GAAP, are or should be included in capital expenditures
or similar items reflected in the consolidated statement of cash flows of
Company and its Subsidiaries. Discretionary Capital Expenditures shall not
include Consolidated Capital Expenditures or Consolidated Other Capital
Expenditures, expenditures of insurance proceeds to rebuild or replace assets of
Company and its Subsidiaries that have been damaged or destroyed, and assets
acquired pursuant to the reinvestment provisions of Section 2.14(a).
"DOCUMENTATION AGENTS" as defined in the preamble hereto.
"DOLLAR-DENOMINATED PRODUCTION PAYMENTS" means production payment
obligations of Company or any Guarantor Subsidiary which are payable from a
specified share of proceeds received from production from specific Properties,
together with all undertakings and obligations in connection therewith.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the laws
of the United States of America, any State thereof or the District of Columbia.
"ELIGIBLE ASSIGNEE" means (i) any Lender, any Affiliate of any
Lender and any Related Fund (any two or more Related Funds being treated as a
single Eligible Assignee for all purposes hereof), and (ii) any commercial bank,
insurance company, investment or mutual fund or other entity that is an
"accredited investor" (as defined in Regulation D under the Securities
13
Act) and which extends credit or buys loans as one of its businesses; provided,
no Affiliate of Company or Sponsor shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to
by, or required to be contributed by, Company, any of its Subsidiaries or any of
their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive, by any Governmental Authority or any other Person, arising
(i) pursuant to or in connection with any actual or alleged violation of any
Environmental Law; (ii) in connection with any Hazardous Material or any actual
or alleged Hazardous Materials Activity; or (iii) in connection with any actual
or alleged damage, injury, threat or harm to health, safety, natural resources
or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future foreign or
domestic, federal or state (or any subdivision of either of them), statutes,
ordinances, orders, rules, regulations, judicial or administrative judgments,
Governmental Authorizations, or any other requirements of Governmental
Authorities relating to (i) environmental matters, including those relating to
any Hazardous Materials Activity; (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials; or (iii) occupational safety
and health, industrial hygiene or land use, in any manner applicable to Company
or any of its Subsidiaries or any Facility.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member. Any former ERISA Affiliate of Company or any of
its Subsidiaries shall continue to be considered an ERISA Affiliate of Company
or any such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
14
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability to Company, any of
its Subsidiaries or any of their respective Affiliates pursuant to Section 4063
or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate
any Pension Plan, or the occurrence of any event or condition which might
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; (vi) the imposition of liability on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefore, or the
receipt by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
material fines, penalties, taxes or related charges under Chapter 43 of the
Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or
Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,
or against Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in connection with any Employee Benefit Plan; (x) receipt from the
Internal Revenue Service of notice of the failure of any Pension Plan (or any
other Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
15
"EURODOLLAR RATE LOAN" means a Loan bearing interest at a rate
determined by reference to the Adjusted Eurodollar Rate.
"EVENT OF DEFAULT" means each of the conditions or events set forth
in Section 8.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXISTING INDEBTEDNESS" means (i) Indebtedness and other obligations
outstanding under that certain Credit Agreement dated as of August 23, 2000
between Company and Ableco Finance LLC, as collateral agent and administrative
agent, as amended prior to the Closing Date and (ii) the Existing Subordinated
Notes.
"EXISTING SUBORDINATED NOTES" means Company's existing 9-7/8% senior
subordinated notes due 2007 issued pursuant to that certain indenture dated June
27, 1997 between Company and LaSalle National Bank as Trustee.
"FACILITY" means any real property (including all buildings,
fixtures or other improvements located thereon but excluding any Hydrocarbon
Interests) now, hereafter or heretofore owned, leased, operated or used by
Company or any of its Subsidiaries or any of their respective Affiliates.
"FAIR SHARE CONTRIBUTION AMOUNT" as defined in Section 7.2.
"FAIR SHARE" as defined in Section 7.2.
"FEDERAL FUNDS EFFECTIVE RATE" means for any day, the rate per annum
(expressed, as a decimal, rounded upwards, if necessary, to the next higher
1/100 of 1%) equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided, (i) if such day
is not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to Administrative Agent, in its capacity as a Lender, on
such day on such transactions as determined by Administrative Agent.
"FINANCIAL OFFICER" means the chief financial officer, treasurer,
assistant treasurer or controller of Company.
16
"FINANCIAL OFFICER CERTIFICATION" means, with respect to the
financial statements for which such certification is required, the certification
of a Financial Officer of Company (in his or her capacity as an officer of
Company and not in his or her individual capacity) that such financial
statements fairly present, in all material respects, the financial condition of
Company and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments.
"FINANCIAL PLAN" as defined in Section 5.1(i).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that such Lien is
the only Lien to which such Collateral is subject, other than any Permitted
Lien.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its Subsidiaries
ending on December 31 of each calendar year.
"FLOOD HAZARD PROPERTY" means any Real Estate Asset subject to a
mortgage in favor of Collateral Trustee, for the benefit of the Secured Parties,
and located in an area designated by the Federal Emergency Management Agency as
having special flood or mud slide hazards.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a Domestic
Subsidiary.
"FUNDING DEFAULT" as defined in Section 2.22.
"FUNDING GUARANTORS" as defined in Section 7.2.
"FUNDING NOTICE" means a notice substantially in the form of Exhibit
A-1.
"GAAP" means, subject to the limitations on the application thereof
set forth in Section 1.2, United States generally accepted accounting principles
in effect as of the date of determination thereof.
"GAIATECH REPORT" means the report entitled Environmental Due
Diligence Review of Belden & Blake Corporation conducted by GaiaTech
Incorporated and dated June 21, 2004.
"GOVERNMENTAL ACTS" means any act or omission, whether rightful or
wrongful, of any Governmental Authority.
17
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal,
national or other government, governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision thereof or any
entity or officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, directive, consent order or consent decree of or from any
Governmental Authority.
"GRANTOR" as defined in the Pledge and Security Agreement.
"GSCP" as defined in the preamble hereto
"GUARANTEED OBLIGATIONS" as defined in Section 7.1.
"GUARANTOR" means each Domestic Subsidiary of Company other than
Engine Power Systems, Inc. and Great West Operating Company, L.C.
"GUARANTOR SUBSIDIARY" means each Guarantor.
"GUARANTY" means the guaranty of each Guarantor set forth in Section
7.
"HAZARDOUS MATERIALS" means any chemical, material or substance,
exposure to which is prohibited, limited or regulated under any Environmental
Law by any Governmental Authority or which is otherwise defined, listed or
regulated as a pollutant, contaminant, or a hazardous, extremely hazardous or
toxic substance, material or waste under any Environmental Law, a radioactive
material, or Hydrocarbon, petroleum or petroleum waste, petroleum breakdown
material or petroleum product or byproduct.
"HAZARDOUS MATERIALS ACTIVITY" means any activity, event or
occurrence involving any Hazardous Materials, including the use, manufacture,
possession, storage, holding, presence, location, Release, threatened Release,
discharge, placement, generation, transportation, processing, treatment,
abatement, removal, remediation, disposal or handling of any Hazardous Materials
and any corrective action or response action with respect to any of the
foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement entered into with a Lender Counterparty or the Lead Arranger in order
to satisfy the requirements of this Agreement or otherwise in the ordinary
course of Company's or any of its Subsidiaries' businesses but not for
speculative purposes.
18
"HEDGE L/C COMMITMENT" means the commitment of a Lender to acquire
participations in Hedge Letters of Credit "HEDGE L/C COMMITMENTS" means such
commitments of all Lenders in the aggregate. The amount of each Lender's Hedge
L/C Commitment, if any, is set forth on Appendix A-4 or in the applicable
Assignment Agreement, subject to any adjustment or reduction pursuant to the
terms and conditions hereof. The aggregate amount of the Hedge L/C Commitments
as of the Closing Date is $40,000,000.
"HEDGE L/C COMMITMENT PERIOD" means the period from the Closing Date
to but excluding the Hedge L/C Commitment Termination Date.
"HEDGE L/C COMMITMENT TERMINATION DATE" means the earliest to occur
of (i) the 6th anniversary of the Closing Date, (ii) the date the Hedge L/C
Commitments are permanently reduced to zero pursuant to Section 2.13(b) or 2.14,
and (iii) the date of the termination of the Hedge L/C Commitments pursuant to
Section 8.1.
"HEDGE L/C EXPOSURE" means, with respect to any Lender as of any
date of determination, (i) prior to the termination of the Hedge L/C
Commitments, that Lender's Hedge L/C Commitment; and (ii) after the termination
of the Hedge L/C Commitments, the sum of (a) the aggregate outstanding principal
amount of the Hedge L/C Loans of that Lender, (b) in the case of Issuing Bank,
the aggregate Hedge Letter of Credit Usage in respect of all Hedge Letters of
Credit issued by that Lender (net of any participations by Lenders in such Hedge
Letters of Credit) and (c) the aggregate amount of all participations by that
Lender in any outstanding Hedge Letters of Credit or any unreimbursed drawing
under any Hedge Letter of Credit.
"HEDGE L/C LOAN" " means a Loan made by a Lender to Company pursuant
to Section 2.4(i).
"HEDGE L/C LOAN NOTE" means a promissory note in the form of Exhibit
B-3, as it may be amended, supplemented or otherwise modified from time to time.
"HEDGE L/C REIMBURSEMENT DATE" as defined in Section 2.4(i).
"HEDGE LETTER OF CREDIT" means a letter of credit issued or to be
issued by Issuing Bank pursuant to Section 2.4(h) of this Agreement.
"HEDGE LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is, or at any
time thereafter may become, available for drawing under all Hedge Letters of
Credit then outstanding, and (ii) the aggregate amount of all drawings under
Hedge Letters of Credit honored by Issuing Bank and not theretofore reimbursed
by or on behalf of Company.
19
"HEDGE SUPPORT LETTER OF CREDIT" as defined in Section 2.4(a).
"HEDGE SUPPORT LETTER OF CREDIT SUBLIMIT" means the lesser of (i)
$15,000,000 and (ii) the aggregate unused amount of the Revolving Commitments
then in effect.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate, if
any, that at any time or from time to time may be contracted for, charged, or
received under the laws applicable to any Lender 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 now allow.
"HISTORICAL FINANCIAL STATEMENTS" means as of the Closing Date, (i)
the audited financial statements of Company and its Subsidiaries, for the
immediately preceding three Fiscal Years, consisting of consolidated balance
sheets and the related consolidated statements of income, stockholders' equity
and cash flows for such Fiscal Years, and (ii) the unaudited financial
statements of Company and its Subsidiaries for the three-month period ending
March 31, 2004, consisting of a consolidated balance sheet and the related
consolidated statements of income, stockholders' equity and cash flows for the
three-, six-or nine-month period, as applicable, ending on such date, and, in
the case of clauses (i) and (ii), certified by the chief financial officer of
Company that they fairly present, in all material respects, the financial
condition of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments.
"HYDROCARBON INTERESTS" means all rights, titles, interests and
estates now owned or hereafter acquired in and to oil and gas leases, oil, gas
and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee
or lease interests, farm-outs, overriding royalty and royalty interests, net
profit interests, oil payments, production payment interests and similar mineral
interests, including any reserved or residual interest of whatever nature.
"HYDROCARBONS" means oil, gas, casinghead gas, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons, all products refined,
separated, settled and dehydrated therefrom, including, without limitation,
kerosene, liquefied petroleum gas, refined lubricating oils, diesel fuel, drip
gasoline, natural gasoline, helium, sulfur and all other minerals.
"INCREASED-COST LENDERS" as defined in Section 2.23.
"INDEBTEDNESS", as applied to any Person, means, without
duplication, (i) all indebtedness for borrowed money; (ii) that portion of
obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP; (iii) notes payable and
drafts accepted representing extensions of credit whether or not representing
20
obligations for borrowed money; (iv) any obligation owed for all or any part of
the deferred purchase price of property or services (excluding any such
obligations incurred under ERISA), which purchase price is (a) due more than six
months from the date of incurrence of the obligation in respect thereof or (b)
evidenced by a note or similar written instrument; (v) all indebtedness secured
by any Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person; (vi) the face amount of any
letter of credit issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings; (vii) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another; (viii) any obligation of
such Person the primary purpose or intent of which is to provide assurance to an
obligee that the obligation of the obligor thereof will be paid or discharged,
or any agreement relating thereto will be complied with, or the holders thereof
will be protected (in whole or in part) against loss in respect thereof; (ix)
any liability of such Person for an obligation of another through any agreement
(contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (b) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (a) or (b) of this
clause (ix), the primary purpose or intent thereof is as described in clause
(viii) above; (x) all obligations of such Person in respect of any exchange
traded or over the counter derivative transaction, including, without
limitation, the Swap Agreement and any Interest Rate Agreement and Currency
Agreement, whether entered into for hedging or speculative purposes; provided,
in no event shall obligations under any Interest Rate Agreement, any Currency
Agreement or the Swap Agreement be deemed "Indebtedness" for any purpose under
Section 6.8; and (xi) all Production Payments granted by any Person but solely
to the extent of any warranties or guaranties of production or payment by such
Person with respect to such Production Payment.
"INDEMNIFIED LIABILITIES" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, claims (including Environmental Claims), costs (including the costs
of any investigation, study, sampling, testing, abatement, cleanup, removal,
remediation or other response action necessary to remove, remediate, clean up or
abate any Hazardous Materials Activity), expenses and disbursements of any kind
or nature whatsoever (including the reasonable fees and disbursements of counsel
for Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto, and any
fees or expenses incurred by Indemnitees in enforcing this indemnity), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including securities and
commercial
21
laws, statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Credit Documents or the
transactions contemplated hereby or thereby (including the Lenders' agreement to
make Credit Extensions or the use or intended use of the proceeds thereof, or
any enforcement of any of the Credit Documents (including any sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranty)); (ii) the statements contained in the commitment
letter delivered by any Lender to Company or Sponsor with respect to the
transactions contemplated by this Agreement; or (iii) any Environmental Claim or
any Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Company or any of its Subsidiaries.
"INDEMNIFIED TAXES" as defined in Section 2.20(a).
"INDEMNITEE" as defined in Section 10.3.
"INSTALLMENT" as defined in Section 2.12(a).
"INSTALLMENT DATE" as defined in Section 2.12(a).
"INTEREST COVERAGE RATIO" means the ratio as of the last day of any
Fiscal Quarter of (i) Consolidated Adjusted EBITDA for the four-Fiscal Quarter
period then ended, to (ii) Consolidated Cash Interest Expense for such
four-Fiscal Quarter period.
"INTEREST PAYMENT DATE" means with respect to (i) any Revolving Loan
or Hedge L/C Loan that is a Base Rate Loan, each March 31, June 30, September 30
and December 31 of each year, commencing on the first such date to occur after
the Closing Date and the final maturity date of such Loan; (ii) any Revolving
Loan or Hedge L/C Loan that is a Eurodollar Rate Loan, the last day of each
Interest Period applicable to such Loan; provided, in the case of each Interest
Period of longer than three months "Interest Payment Date" shall also include
each date that is three months, or an integral multiple thereof, after the
commencement of such Interest Period and (iii) Term Loans, each April 1, July 1,
October 1 and January 1 of each year, commencing on October 1, 2004 through the
final maturity date of such Loan.
"INTEREST PERIOD" means, in connection with a Eurodollar Rate Loan,
an interest period of one-, two-, three- or six-months, as selected by Company
in the applicable Funding Notice or Conversion/Continuation Notice, (i)
initially, commencing on the Credit Date or Conversion/Continuation Date
thereof, as the case may be; and (ii) thereafter, commencing on the day on which
the immediately preceding Interest Period expires; provided, (a) if an Interest
Period would otherwise expire on a day that is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day unless no further
Business Day occurs in such
22
month, in which case such Interest Period shall expire on the immediately
preceding Business Day; (b) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clauses (c) and (d), of this definition, end on the last
Business Day of a calendar month; (c) no Interest Period with respect to any
Term Loans shall extend beyond the Term Loan Maturity Date; and (d) no Interest
Period with respect to any portion of the Revolving Loans shall extend beyond
the Revolving Commitment Termination Date.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
hedging agreement or other similar agreement or arrangement, each of which is
for the purpose of hedging the interest rate exposure associated with Company's
and its Subsidiaries' operations and not for speculative purposes.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the date that is two Business Days prior to the first day of
such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any of the Securities of any other Person (other than a Guarantor
Subsidiary); (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of Company from any Person (other
than Company or any Guarantor Subsidiary), of any Capital Stock of such Person;
and (iii) any direct or indirect loan, advance (other than advances to employees
for moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Company or any of its Subsidiaries to any other Person (other than Company or
any Guarantor Subsidiary), including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise from sales
to that other Person in the ordinary course of business. The amount of any
Investment shall be the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investment.
"ISSUANCE NOTICE" means an Issuance Notice substantially in the form
of Exhibit A-3.
"ISSUING BANK" means (i) GSCP or a bank or other legally authorized
Person selected by or acceptable to Administrative Agent in such Person's
capacity as an issuer of a Letter of Credit or Hedge Letter of Credit; provided
GSCP may appoint a bank or other legally
23
authorized Person meeting the Letter of Credit Issuer Rating to issue a Letter
of Credit or Hedge Letter of Credit for the account of GSCP and (ii) any
Replacement Issuing Bank.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided, in
no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, pursuant to which, among other things, the landlord
consents to the granting of a Mortgage on such Leasehold Property by the Credit
Party tenant, such Landlord Consent and Estoppel to be in form and substance
acceptable to Administrative Agent in its reasonable discretion, but in any
event sufficient for Collateral Trustee to obtain a Title Policy with respect to
such Mortgage.
"LANDLORD PERSONAL PROPERTY COLLATERAL ACCESS AGREEMENT" means a
Landlord Waiver and Consent Agreement substantially in the form of Exhibit L
with such amendments or modifications as may be approved by Administrative
Agent.
"LEAD ARRANGER" as defined in the preamble hereto.
"LEASEHOLD PROPERTY" means any leasehold interest of any Credit
Party as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Administrative Agent in its sole
discretion as not being required to be included in the Collateral; provided that
Leasehold Property shall exclude Hydrocarbon Interests.
"LENDER" means each financial institution listed on the signature
pages hereto as a Lender, and any other Person that becomes a party hereto
pursuant to an Assignment Agreement.
"LENDER COUNTERPARTY" means each Lender or any Affiliate of a Lender
counterparty to a Hedge Agreement (including any Person who is a Lender (and any
Affiliate thereof) as of the Closing Date but subsequently, whether before or
after entering into a Hedge Agreement, ceases to be a Lender) including, without
limitation, each such Affiliate that enters into a joinder agreement with
Collateral Trustee.
"LETTER OF CREDIT" means a commercial or standby letter of credit
(other than a Hedge Letter of Credit) issued or to be issued by Issuing Bank
pursuant to this Agreement.
"LETTER OF CREDIT COMMITMENT PERIOD" means the period from the
Closing Date to but excluding the Revolving Commitment Termination Date.
24
"LETTER OF CREDIT ISSUER RATING" has the meaning provided that term
in the ISDA Master Agreement (and related Schedules) referred to in clause (i)
of the definition of Swap Agreement.
"LETTER OF CREDIT SUBLIMIT" means the lesser of (i) $5,000,000 and
(ii) the aggregate unused amount of the Revolving Commitments then in effect.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is, or at any time thereafter may
become, available for drawing under all Letters of Credit then outstanding, and
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Bank and not theretofore reimbursed by or on behalf of Company.
"LEVERAGE RATIO" means the ratio as of the last day of any Fiscal
Quarter or other date of determination of (i) Consolidated Total Debt as of such
day to (ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period
ending on such date (or if such date of determination is not the last day of a
Fiscal Quarter, for the four-Fiscal Quarters period ending as of the most
recently concluded Fiscal Quarter).
"LIEN" means (i) any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, and
any lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing and (ii) in the
case of Securities, any purchase option, call or similar right of a third party
with respect to such Securities.
"LOAN" means a Term Loan, a Revolving Loan and a Hedge L/C Loan.
"MANAGEMENT AGREEMENT" means the Management Services Agreement,
dated July 7, 2004 between Company and the Sponsor, as amended through the date
hereof and as may be further amended if permitted pursuant to Section 6.15.
"MARGIN STOCK" as defined in Regulation U of the Board of Governors
of the Federal Reserve System as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on and/or
material adverse developments with respect to (i) the business operations,
properties, assets, condition (financial or otherwise) or prospects of Company
and its Subsidiaries taken as a whole; (ii) the ability of any Credit Party to
fully and timely perform its Obligations; (iii) the legality, validity, binding
effect or enforceability against a Credit Party of a Credit Document to which it
is a
25
party; or (v) the rights, remedies and benefits available to, or conferred upon,
any Agent and any Lender or any Secured Party under any Credit Document.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Credit Documents)
for which breach, nonperformance, cancellation or failure to renew could
reasonably be expected to have a Material Adverse Effect, including, without
limitation, the Swap Agreement.
"MATERIAL REAL ESTATE ASSET" means (i) (a) any fee-owned Real Estate
Asset having a fair market value in excess of $2,500,000 as of the date of the
acquisition thereof and (b) all Leasehold Properties other than those with
respect to which the aggregate payments under the term of the lease are less
than $250,000 per annum or (ii) any Real Estate Asset that the Requisite Lenders
have determined is material to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Company or any Subsidiary
thereof, including Company.
"MAXIMUM DELIVERY AMOUNT" shall mean, as of any date, the maximum
amount that could be required to be delivered on such date as specified in
paragraph 13(b)(i)(A) of the Credit Support Annex, dated as of June 30, 2004,
and entered into in connection with the Swap Agreement described in clause (i)
of the definition of Swap Agreement.
"MERGER AGREEMENT" means that certain Agreement and Plan of Merger,
dated as of June 15, 2004, by and between Sponsor, Capital C Ohio Inc. and
Company, as such agreement may be amended pursuant to Section 6.15.
"MOODY'S" means Moody's Investor Services, Inc.
"MORTGAGE" means a Mortgage substantially in the form of Exhibit K,
as it may be amended, supplemented or otherwise modified from time to time.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means The National Association of Insurance Commissioners,
and any successor thereto.
"NARRATIVE REPORT" means, with respect to the financial statements
for which such narrative report is required, a narrative report describing the
operations of Company and its Subsidiaries in the form prepared for presentation
to senior management thereof for the applicable Fiscal Year.
26
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, an
amount equal to: (i) Cash payments (including any Cash received by way of
deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received by Company or any of its
Subsidiaries from such Asset Sale, minus (ii) any bona fide direct costs
(including the fees and expenses of attorneys, investment banking, accounting
and other advisors) incurred in connection with such Asset Sale, including (a)
income or gains taxes payable by the seller as a result of any gain recognized
in connection with such Asset Sale, (b) payment of the outstanding principal
amount of, premium or penalty, if any, and interest on any Indebtedness (other
than the Loans) that is secured by a Lien on the stock or assets in question and
that is required to be repaid under the terms thereof as a result of such Asset
Sale and (c) a reasonable reserve for any indemnification payments (fixed or
contingent) attributable to seller's indemnities and representations and
warranties to purchaser in respect of such Asset Sale undertaken by Company or
any of its Subsidiaries in connection with such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means an amount equal to: (i)
any Cash payments or proceeds received by Company or any of its Subsidiaries (a)
under any casualty insurance policy in respect of a covered loss thereunder or
(b) as a result of the taking of any assets of Company or any of its
Subsidiaries by any Person pursuant to the power of eminent domain, condemnation
or otherwise, or pursuant to a sale of any such assets to a purchaser with such
power under threat of such a taking, minus (ii) (a) any actual and reasonable
costs incurred by Company or any of its Subsidiaries in connection with the
adjustment or settlement of any claims of Company or such Subsidiary in respect
thereof, and (b) any bona fide direct costs incurred in connection with any sale
of such assets as referred to in clause (i)(b) of this definition, including
income taxes payable as a result of any gain recognized in connection therewith.
"NON-CONSENTING LENDER" as defined in Section 2.23(c).
"NON-US LENDER" as defined in Section 2.20(c).
"NOTE" means a Term Note, a Revolving Loan Note or a Hedge L/C Loan
Note.
"NOTICE" means a Funding Notice, an Issuance Notice, or a
Conversion/Continuation Notice.
"NYMEX" means the New York Mercantile Exchange or its successor
entity.
"NYMEX STRIP PRICE" means as of any date of determination, (i) for
the 36 month period commencing with the month in which the date of determination
occurs, the average of the 36 succeeding monthly futures contract prices,
commencing with the month during which the determination date occurs, for each
of the appropriate crude oil and natural gas
27
categories included in the most recent Reserve Report provided by Company to the
Administrative Agent pursuant to subsection 5.1(p), as quoted on the NYMEX, and
(ii) for periods after such 36 month period, the average of the quoted prices
for the period from and including the 25th month in such 36 month period through
the 36th month in such period; provided, that if the NYMEX no longer provides
futures contract price quotes or has ceased to operate, the comparable futures
contract prices quoted on such other nationally recognized commodities exchange
as the Administrative Agent shall designate.
"OBLIGATIONS" means all obligations of every nature of each Credit
Party from time to time owed to the Agents (including former Agents), the
Collateral Trustee, the Lenders or any of them, each Issuing Bank and Lender
Counterparties, under any Credit Document or Hedge Agreement (including, without
limitation, with respect to a Hedge Agreement, obligations owed thereunder to
any person who was a Lender or an Affiliate of a Lender at the time such Hedge
Agreement was entered into), whether for principal, interest (including interest
which, but for the filing of a petition in bankruptcy with respect to such
Credit Party, would have accrued on any Obligation, whether or not a claim is
allowed against such Credit Party for such interest in the related bankruptcy
proceeding), reimbursement of amounts drawn under Letters of Credit or Hedge
Letters of Credit, payments for early termination of Hedge Agreements, and all
other fees, expenses, indemnification obligations and other amounts or
obligations.
"OBLIGEE GUARANTOR" as defined in Section 7.7.
"OIL AND GAS BUSINESS" means (a) the acquisition, exploration,
exploitation, development, operation and disposition of interests in oil and gas
properties and Hydrocarbons, (b) the gathering, marketing, treating, processing,
storage, selling and transporting of any production from such interests or
properties, including, without limitation, the marketing of Hydrocarbons
obtained from unrelated Persons; (c) any business relating to or arising from
exploration for or development, production, treatment, processing, storage,
transportation or marketing of oil, gas and other minerals and products produced
in association therewith; (d) any business relating to oilfield sales and
service; and (e) any activity that is ancillary or necessary or desirable to
facilitate the activities described in clauses (a) through (d) of this
definition, excluding, for the avoidance of doubt, refining of hydrocarbons.
"OIL AND GAS PROPERTIES" means Hydrocarbon Interests; the Properties
now or hereafter pooled or unitized with Hydrocarbon Interests; all presently
existing or future unitization, pooling agreements and declarations of pooled
units and the units created thereby (including without limitation all units
created under orders, regulations and rules of any Governmental Authority having
jurisdiction) which may affect all or any portion of the Hydrocarbon Interests;
all pipelines, gathering lines, compression facilities, tanks and processing
plants; all interests held in royalty trusts whether presently existing or
hereafter created; all Hydrocarbons in and under and which may be produced,
saved, processed or attributable to the
28
Hydrocarbon Interests, the lands covered thereby and all hydrocarbons in
pipelines, gathering lines, tanks and processing plants and all rents, issues,
profits, proceeds, products, revenues and other incomes from or attributable to
the Hydrocarbon Interests; all tenements, hereditaments, appurtenances and
Properties in any way appertaining, belonging, affixed or incidental to the
Hydrocarbon Interests, and all rights, titles, interests and estates described
or referred to above, including any and all real property, now owned or
hereafter acquired, used or held for use in connection with the operating,
working or development of any of such Hydrocarbon Interests or Property and
including any and all surface leases, rights-of-way, easements and servitude
together with all additions, substitutions, replacements, accessions and
attachments to any and all of the foregoing; all oil, gas and mineral leasehold
and fee interests, all overriding royalty interests, mineral interests, royalty
interests, net profits interests, net revenue interests, oil payments,
production payments, carried interests and any and all other interests in
Hydrocarbons. For the avoidance of doubt, this definition applies to Oil and Gas
Properties and Hydrocarbon Interests now owned or hereafter acquired directly or
indirectly by the Company or its Subsidiaries.
"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any
corporation, its certificate or articles of incorporation or organization, as
amended, and its by-laws, as amended, (ii) with respect to any limited
partnership, its certificate of limited partnership, as amended, and its
partnership agreement, as amended, (iii) with respect to any general
partnership, its partnership agreement, as amended, and (iv) with respect to any
limited liability company, its articles of organization, as amended, and its
operating agreement, as amended. In the event any term or condition of this
Agreement or any other Credit Document requires any Organizational Document to
be certified by a secretary of state or similar governmental official, the
reference to any such "Organizational Document" shall only be to a document of a
type customarily certified by such governmental official.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ACQUISITION" means any acquisition by Company or any of
its wholly-owned Subsidiaries, whether by purchase, merger or otherwise, of all
or substantially all of the assets of, all of the Capital Stock of, or a
business line or unit or a division of, any Person or any Hydrocarbon Interest
of any Person; provided, except with respect to Permitted Acquisitions of
Hydrocarbon Interests having a value of less than $2,000,000,
(i) immediately prior to, and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing or would
result therefrom;
29
(ii) all transactions in connection therewith shall be
consummated, in all material respects, in accordance with all applicable
laws and in conformity with all applicable Governmental Authorizations;
(iii) in the case of the acquisition of Capital Stock, all of
the Capital Stock (except for any such Securities in the nature of
directors' qualifying shares required pursuant to applicable law) acquired
or otherwise issued by such Person or any newly formed Subsidiary of
Company in connection with such acquisition shall be owned 100% by Company
or a Guarantor Subsidiary thereof, and Company shall have taken, or caused
to be taken, as of the date such Person becomes a Subsidiary of Company,
each of the actions set forth in Sections 5.10 and/or 5.11, as applicable;
(iv) Company and its Subsidiaries shall be in compliance with
the financial covenants set forth in Section 6.8 on a pro forma basis
after giving effect to such acquisition as of the last day of the Fiscal
Quarter most recently ended, (as determined in accordance with Section
6.8(h);
(v) Company shall have delivered to Administrative Agent (A)
at least 5 Business Days prior to such proposed acquisition, a Compliance
Certificate evidencing compliance with Section 6.8 as required under
clause (iv) above, together with all relevant financial information with
respect to such acquired assets, including, without limitation, the
aggregate consideration for such acquisition and any other information
required to demonstrate compliance with Section 6.8; and
(vi) any Person or assets or division as acquired in
accordance herewith (y) shall be in same business or lines of business in
which Company and/or its Subsidiaries are engaged as of the Closing Date
and (z) shall have generated positive cash flow for the four quarter
period most recently ended prior to the date of such acquisition.
"PERMITTED BUSINESS INVESTMENTS" means investments made in the
ordinary course of, and of a nature that is or shall have become customary in,
the Oil and Gas Business as a means of actively exploiting, exploring for,
acquiring, developing, processing, gathering, marketing or transporting oil and
gas through agreements, transactions, interests or arrangements which permit one
to share risks of costs, comply with regulatory requirements regarding local
ownership or satisfy other objectives customarily achieved through the conduct
of Oil and Gas Business jointly or with third parties, including, without
limitation, the entry into operating agreements, working interests, royalty
interests, mineral leases, processing agreements, farm-out and farm-in
agreements, division orders, contracts for the sale, transportation or exchange
of oil or natural gas, unitization and pooling declarations and agreements and
area of mutual interest agreements, production sharing agreements or other
similar or customary agreements, transactions, properties, interests, and
investments and expenditures in connection therewith;
30
provided that (i) an investment in capital stock, partnership interests, joint
venture interests, limited liability company interests or other similar equity
interests in a Person shall not constitute a Permitted Business Investment and
(ii) Volumetric Production Payments shall not constitute a Permitted Business
Investment.
"PERMITTED LIENS" means each of the Liens permitted pursuant to
Section 6.2.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.
"PLEDGE AND SECURITY AGREEMENT" means the Priority Lien Pledge and
Security Agreement to be executed by Company and each Guarantor substantially in
the form of Exhibit I, as it may be amended, supplemented or otherwise modified
from time to time.
"PRIME RATE" means the rate of interest quoted in The Wall Street
Journal, Money Rates Section as the Prime Rate (currently defined as the base
rate on corporate loans posted by at least 75% of the nation's thirty (30)
largest banks), as in effect from time to time. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. Agent or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
"PRINCIPAL OFFICE" means, for each of Administrative Agent and
Issuing Bank, such Person's "Principal Office" as set forth on Appendix B, or
such other office or office of a third party or sub-agent, as appropriate, as
such Person may from time to time designate in writing to Company,
Administrative Agent and each Lender.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Term Loan of any Lender, the
percentage obtained by dividing (a) the Term Loan Exposure of that Lender by (b)
the aggregate Term Loan Exposure of all Lenders; (ii) with respect to all
payments, computations and other matters relating to the Revolving Commitment or
Revolving Loans of any Lender or any Letters of Credit issued or participations
purchased therein by any Lender, the percentage obtained by dividing (a) the
Revolving Exposure of that Lender by (b) the aggregate Revolving Exposure of all
Lenders; and (iii) with respect to all payments, computations and other matters
relating to the Hedge L/C Commitment or Hedge L/C Loans of any Lender or any
Hedge Letters of Credit issued or participations purchased therein by any
Lender, the percentage obtained by dividing (a) the Hedge L/C Exposure of that
Lender by (b) the aggregate Hedge L/C Exposure of all Lenders. For all other
purposes with respect to each Lender, "Pro Rata Share" means the percentage
31
obtained by dividing (A) an amount equal to the sum of the Term Loan Exposure,
the Revolving Exposure and the Hedge L/C Exposure of that Lender, by (B) an
amount equal to the sum of the aggregate Term Loan Exposure, the aggregate
Revolving Exposure and the aggregate Hedge L/C Exposure of all Lenders.
"PRODUCTION PAYMENTS" means, collectively, Dollar-Denominated
Production Payments and Volumetric Production Payments.
"PROJECTIONS" as defined in Section 4.8.
"PROPERTIES" means any kind of facility, fixture, property or asset,
whether real, personal or mixed, or tangible or intangible owned, leased or
operated by the Borrower or any Subsidiary.
"PROVED DEVELOPED PRODUCING RESERVES" means those Oil and Gas
Properties designated as "proved developed producing" (applying the reporting
standards prescribed by the SEC) in the Reserve Report.
"PROVED RESERVES" means those Oil and Gas Properties designated as
"proved" (applying the reporting standards prescribed by the SEC) in the Reserve
Report.
"PV-10 VALUE" means as of any date of determination, the sum of the
present values of the amounts of net revenues before income taxes expected to be
received in each of the months following the date of determination on the basis
of estimated production from Proved Reserves during such months determined as
follows:
(i) each such monthly net revenue amount shall be calculated (x) on
the basis of the applicable NYMEX Strip Price for the appropriate category
of oil or gas as of such date of determination, adjusting such price to
reflect (A) the appropriate Basis Differential with respect to
Hydrocarbons produced from specific Oil and Gas Properties of Company, (B)
the prices for fixed price contracts for such month, (C) the prices for
hedged volumes for such month and (D) Btu content, (y) assuming that
production costs remain constant throughout the periods of the calculation
of such monthly net revenues, and (z) otherwise applying the financial
accounting and reporting standards prescribed by the SEC for application
of the successful efforts method of accounting for such revenues under
Rule 4-10 of Regulation S-X as promulgated by the SEC from time to time;
and
(ii) the present value of each such monthly net revenue amount shall
be determined by discounting each such monthly net revenue amount from the
month in which it is expected to be received, on a monthly basis, to such
date of determination at a rate of 10% per annum.
32
"REAL ESTATE ASSET" means, at any time of determination, any
interest (fee, leasehold or otherwise) then owned by any Credit Party in any
real property, other than Hydrocarbon Interests.
"RECORD DOCUMENT" means, with respect to any Leasehold Property, (i)
the lease evidencing such Leasehold Property or a memorandum thereof, executed
and acknowledged by the owner of the affected real property, as lessor, or (ii)
if such Leasehold Property was acquired or subleased from the holder of a
Recorded Leasehold Interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient to
give such constructive notice upon recordation and otherwise in form reasonably
satisfactory to Administrative Agent.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document has been recorded in all places necessary or
desirable, in Administrative Agent's reasonable judgment, to give constructive
notice of such Leasehold Property to third-party purchasers and encumbrancers of
the affected real property.
"REGISTER" as defined in Section 2.7(b).
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" as defined in Section 2.4(d).
"RELATED AGREEMENTS" means, collectively, the Merger Agreement, the
Senior Secured Debt Documents, the Swap Agreement and the Management Agreement.
"RELATED FUND" means, with respect to any Lender that is an
investment fund, any other investment fund that invests in commercial loans and
that is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of any Hazardous Material into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Material), including the
movement of any Hazardous Material through the air, soil, surface water or
groundwater.
"REPLACEMENT ISSUING BANK" as defined in Section 2.4(j).
"REPLACEMENT LENDER" as defined in Section 2.23.
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"REQUISITE CLASS LENDERS" means, at any time of determination, (i)
for the Class of Lenders having Term Loan Exposure, Lenders holding more than
50% of the aggregate Term Loan Exposure of all Lenders; (ii) for the Class of
Lenders having Revolving Exposure, Lenders holding more than 50% of the
aggregate Revolving Exposure of all Lenders; and (iii) for each Class of Lenders
having Hedge L/C Exposure, Lenders holding more than 50% of the aggregate Hedge
L/C Exposure of that Class.
"REQUISITE LENDERS" means one or more Lenders having or holding Term
Loan Exposure, Hedge L/C Exposure and/or Revolving Exposure and representing
more than 50% of the sum of (i) the aggregate Term Loan Exposure of all Lenders,
(ii) the aggregate Revolving Exposure of all Lenders, and (iii) the aggregate
Hedge L/C Exposure of all Lenders.
"RESERVE LEVERAGE RATIO" means the ratio as of the last day of any
Fiscal Quarter or other date of determination of (i) Senior Debt as of such day
to (ii) the PV-10 Value of Proved Reserves as of such date (or if such date of
determination is not the last day of a Fiscal Quarter, as of the last day of the
most recently concluded Fiscal Quarter).
"RESERVE REPORT" means a report setting forth, as of June 30 or
December 31 (i) the volumetric quantity and both the PV-10 Value and the SEC
Value, of the oil and gas reserves attributable to the Oil and Gas Properties of
Company and Guarantor 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, and (ii) such other
information as the Administrative Agent may reasonably request.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class; (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding; (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding; (iv)
management or similar fees payable to Sponsor or any of its Affiliates; and (v)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any subordinated
Indebtedness.
"REVOLVING COMMITMENT" means the commitment of a Lender to make or
otherwise fund any Revolving Loan and to acquire participations in Letters of
Credit hereunder and "REVOLVING COMMITMENTS" means such commitments of all
Lenders in the aggregate. The amount of each Lender's Revolving Commitment, if
any, is set forth on Appendix A-3 or in the applicable Assignment Agreement,
subject to any adjustment or reduction pursuant to the terms
34
and conditions hereof. The aggregate amount of the Revolving Commitments as of
the Closing Date is $30,000,000.
"REVOLVING COMMITMENT PERIOD" means the period from the Closing Date
to but excluding the Revolving Commitment Termination Date.
"REVOLVING COMMITMENT TERMINATION DATE" means the earliest to occur
of (i) the 6th anniversary of the Closing Date, (ii) the date the Revolving
Commitments are permanently reduced to zero pursuant to Section 2.13(b) or 2.14,
and (iii) the date of the termination of the Revolving Commitments pursuant to
Section 8.1.
"REVOLVING EXPOSURE" means, with respect to any Lender as of any
date of determination, (i) prior to the termination of the Revolving
Commitments, that Lender's Revolving Commitment; and (ii) after the termination
of the Revolving Commitments, the sum of (a) the aggregate outstanding principal
amount of the Revolving Loans of that Lender, (b) in the case of Issuing Bank,
the aggregate Letter of Credit Usage in respect of all Letters of Credit issued
by that Lender (net of any participations by Lenders in such Letters of Credit)
and (c) the aggregate amount of all participations by that Lender in any
outstanding Letters of Credit or any unreimbursed drawing under any Letter of
Credit.
"REVOLVING LOAN" means a Loan made by a Lender to Company pursuant
to Section 2.2(a) and/or 2.22.
"REVOLVING LOAN NOTE" means a promissory note in the form of Exhibit
B-2, as it may be amended, supplemented or otherwise modified from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Corporation.
"SEC" means the Securities and Exchange Commission.
"SEC VALUE" means the future net revenues before income taxes from
Proved Reserves, estimated utilizing the price for the appropriate category of
oil or gas as of the date of determination and assuming that oil and natural gas
prices and production costs thereafter remain constant, then discounted at the
rate of 10% per year to obtain the present value, and otherwise applying the
financial accounting and reporting standards prescribed by the SEC for
application of the successful efforts method of accounting under Rule 4-10 of
Regulation S-X as promulgated by the SEC from time to time.
"SECTION 29 PROPERTIES" as defined in subsection 6.9(h).
35
"SECURED PARTIES" has the meaning assigned to that term in the
Pledge and Security Agreement.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SENIOR DEBT" means, as at any date of determination, the aggregate
principal amount of Loans outstanding as of such date.
"SENIOR LEVERAGE RATIO" means the ratio as of the last day of any
Fiscal Quarter or other date of determination of (i) Senior Debt as of such day
to (ii) Consolidated Adjusted EBITDA for the four-Fiscal Quarter period ending
on such date (or if such date of determination is not the last day of a Fiscal
Quarter, for the four-Fiscal Quarters period ending as of the most recently
concluded Fiscal Quarter).
"SENIOR SECURED DEBT DOCUMENTS" means the Senior Secured Note
Indenture, the Senior Secured Notes and each other document executed in
connection with the Senior Secured Notes, and any documents executed in
connection with any refinancings or replacements thereof to the extent permitted
under Section 6.16, as each such document may be amended, restated, supplemented
or otherwise modified from time to time to the extent permitted under Section
6.16.
"SENIOR SECURED INDEBTEDNESS" means the obligations of Company
pursuant to the Senior Secured Debt Documents.
"SENIOR SECURED NOTE INDENTURE" means the indenture dated July 7,
2004, pursuant to which the Senior Secured Notes are issued, and any indenture
pursuant to which the Senior Secured Notes are refinanced or replaced pursuant
to a transaction permitted under Section 6.1, in each case as such indenture may
thereafter be amended, restated, supplemented or otherwise modified from time to
time to the extent permitted under Section 6.16.
"SENIOR SECURED NOTES" means the Senior Secured Notes of Company in
the aggregate principal amount of not less than $192,500,000 and issued pursuant
to the Senior
36
Secured Note Indenture, and any subordinated promissory notes issued in respect
of any refinancing or replacement of such Senior Secured Notes in a transaction
permitted under Section 6.1, in each case as such notes may thereafter be
amended, restated, supplemented or otherwise modified from time to time to the
extent permitted under Section 6.16.
"SETTLEMENT CONFIRMATION" as defined in Section 10.6(b).
"SETTLEMENT SERVICE" as defined in Section 10.6(d).
"SOLVENCY CERTIFICATE" means a Solvency Certificate of the chief
financial officer of Company substantially in the form of Exhibit G-2.
"SOLVENT" means, with respect to any Credit Party, that as of the
date of determination, both (i) (a) the sum of such Credit Party's debt
(including contingent liabilities) does not exceed the present fair saleable
value of such Credit Party's present assets; (b) such Credit Party's capital is
not unreasonably small in relation to its business as contemplated on the
Closing Date and reflected in the Projections or with respect to any transaction
contemplated or undertaken after the Closing Date; and (c) such Person has not
incurred and does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to pay such debts as they
become due (whether at maturity or otherwise); and (ii) such Person is "solvent"
within the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability (irrespective of whether such contingent liabilities
meet the criteria for accrual under Statement of Financial Accounting Standard
No.5).
"SPONSOR" as defined in the recitals hereto.
"SPONSOR PLEDGE AGREEMENT" means the First Priority Lien Pledge and
Security Agreement to be executed by Sponsor substantially in the form of
Exhibit J, as it may be amended, supplemented or otherwise modified from time to
time.
"SUBJECT TRANSACTION" as defined in Section 6.8(h).
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time
37
owned or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person or a combination thereof; provided, in
determining the percentage of ownership interests of any Person controlled by
another Person, no ownership interest in the nature of a "qualifying share" of
the former Person shall be deemed to be outstanding.
"SWAP AGREEMENT" means (i) the ISDA Master Agreement dated as of
June 30, 2004 by and between J. Aron & Company and Capital C Ohio, Inc. (and
assumed by Company in the Acquisition) (including the Schedule thereto and the
confirmations thereunder), pursuant to which the parties thereto have entered
into certain gas and oil price swaps and (ii) any ISDA Master Agreement entered
into after the Closing Date by the Company and/or its Subsidiaries (including
the Schedule thereto and the confirmations thereunder), pursuant to which the
parties thereto enter into certain gas and oil price swaps, as each such
document referred to in clauses (i) or (ii) may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
under Section 6.15.
"SWAP AGREEMENT DOCUMENTS" means the Swap Agreement and each other
document executed in connection with the Swap Agreement, and any documents
executed in connection with any refinancings or replacements thereof to the
extent permitted under Section 6.15, as each such document may be amended,
restated, supplemented or otherwise modified from time to time to the extent
permitted under Section 6.15.
"SYNDICATION AGENT" as defined in the preamble hereto.
"TAX" means any present or future tax, levy, impost, duty,
assessment, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; provided, "Tax on the overall net income" of a Person
shall be construed as a reference to a tax imposed by the jurisdiction in which
that Person is organized or in which that Person's applicable principal office
(and/or, in the case of a Lender, its lending office) is located or in which
that Person (and/or, in the case of a Lender, its lending office) is deemed to
be doing business on all or part of the net income, profits or gains (whether
worldwide, or only insofar as such income, profits or gains are considered to
arise in or to relate to a particular jurisdiction, or otherwise) of that Person
(and/or, in the case of a Lender, its applicable lending office).
"TBR ASSETS" means those assets of Company sold to Fortuna Energy,
Inc. pursuant to the Letter Agreement, dated June 14, 2004, by and between
Company and Fortuna Energy, Inc.
"TBR DELAYED TRANSFER ASSETS" means those assets of Company sold to
Fortuna Energy, Inc. prior to the Closing Date pursuant to the Letter Agreement,
dated June 14, 2004, by and between Company and Fortuna Energy, Inc. title to
which has not been conveyed by
38
Company to Fortuna Energy, Inc. as of the Closing Date; provided, such assets
shall cease to be TBR Delayed Transfer Assets if such title has not been
subsequently conveyed to Fortuna Energy, Inc. within 180 days of the Closing
Date.
"TERM LOAN" means a Term Loan made by a Lender to Company pursuant
to Section 2.1(a).
"TERM LOAN COMMITMENT" means the commitment of a Lender to make or
otherwise fund a Term Loan and "TERM LOAN COMMITMENTS" means such commitments of
all Lenders in the aggregate. The amount of each Lender's Term Loan Commitment,
if any, is set forth on Appendix A-1 or in the applicable Assignment Agreement,
subject to any adjustment or reduction pursuant to the terms and conditions
hereof. The aggregate amount of the Term Loan Commitments as of the Closing Date
is $100,000,000.
"TERM LOAN EXPOSURE" means, with respect to any Lender, as of any
date of determination, the outstanding principal amount of the Term Loans of
such Lender; provided, at any time prior to the making of the Term Loans, the
Term Loan Exposure of any Lender shall be equal to such Lender's Term Loan
Commitment.
"TERM LOAN MATURITY DATE" means the earlier of (i) the 7th
anniversary of the Closing Date, and (ii) the date that all Term Loans shall
become due and payable in full hereunder, whether by acceleration or otherwise.
"TERM LOAN NOTE" means a promissory note in the form of Exhibit B-1,
as it may be amended, supplemented or otherwise modified from time to time.
"TERMINATED LENDER" as defined in Section 2.23.
"TITLE POLICY" as defined in Section 3.1(i).
"TOTAL UTILIZATION OF REVOLVING COMMITMENTS" means, as at any date
of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
reimbursing Issuing Bank for any amount drawn under any Letter of Credit, but
not yet so applied) and (ii) the Letter of Credit Usage.
"TOTAL UTILIZATION OF HEDGE L/C COMMITMENTS" means, as at any date
of determination, the sum of (i) the aggregate principal amount of all
outstanding Hedge L/C Loans (other than Hedge L/C Loans made for the purpose of
reimbursing Issuing Bank for any amount drawn under any Letter of Credit, but
not yet so applied) and (ii) the Hedge Letter of Credit Usage.
39
"TRANSACTION COSTS" means the fees, costs and expenses payable by
Company or any of Company's Subsidiaries on or before the Closing Date in
connection with the transactions contemplated by the Credit Documents and the
Related Agreements.
"TYPE OF LOAN" means a Base Rate Loan or a Eurodollar Rate Loan.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"UNADJUSTED EURODOLLAR RATE COMPONENT" means that component of the
interest costs to Company in respect of a Eurodollar Rate Loan that is based
upon the rate obtained pursuant to clause (i) of the definition of Adjusted
Eurodollar Rate.
"UNPAID REFINANCING AMOUNT" as defined in Section 3.1(f).
"VOLUMETRIC PRODUCTION PAYMENTS" means production payment
obligations, royalties or overriding royalties of Company or any of its
Subsidiaries which are payable from a specified share of production from
specific properties together with all undertakings and obligations in connection
therewith.
1.2. ACCOUNTING TERMS.
(a) Except as otherwise expressly provided herein, all accounting terms
not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Lenders pursuant to Section 5.1(a) and 5.1(b) shall be
prepared in accordance with GAAP as in effect at the time of such preparation
(and delivered together with the reconciliation statements provided for in
Section 5.1(e), if applicable). Subject to the foregoing, calculations in
connection with the definitions, covenants and other provisions hereof shall
utilize accounting principles and policies in conformity with those used to
prepare the Historical Financial Statements.
(b) In the event that any "Accounting Change" (as defined below) shall
occur and such change results in a change in the method of calculation of
financial covenants, standards or terms in this Agreement, then Company and the
Administrative Agent agree to enter into negotiations in order to amend such
provisions of this Agreement so as equitably to reflect such Accounting Change
with the desired result that the criteria for evaluating Company's and its
Subsidiaries' financial condition shall be the same after such Accounting Change
as if such Accounting Change had not been made. Until such time as such an
amendment shall have been executed and delivered by Company, the Administrative
Agent and the Requisite Lenders, all financial covenants, standards and terms in
this Agreement shall continue to be calculated or construed as if such
Accounting Change had not occurred. "ACCOUNTING CHANGE" refers to any change in
accounting principles required by the promulgation of any rule, regulation,
40
pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants or, if applicable, the
Securities and Exchange Commission.
1.3. INTERPRETATION, ETC.
Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
References herein to any Section, Appendix, Schedule or Exhibit shall be to a
Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof
unless otherwise specifically provided. The use herein of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not no limiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
SECTION 2. LOANS AND LETTERS OF CREDIT
2.1. TERM LOANS
(a) Loan Commitments. Subject to the terms and conditions hereof,
each Lender severally agrees to make, on the Closing Date, a Term Loan to
Company in an amount equal to such Lender's Term Loan Commitment.
Company may make only one borrowing under the Term Loan Commitment which shall
be on the Closing Date. Any amount borrowed under this Section 2.1(a) and
subsequently repaid or prepaid may not be reborrowed. Subject to Sections
2.13(a) and 2.14, all amounts owed hereunder with respect to the Term Loans
shall be paid in full no later than the Term Loan Maturity Date. Each Lender's
Term Loan Commitment shall terminate immediately and without further action on
the Closing Date after giving effect to the funding of such Lender's Term Loan
Commitment on such date.
(b) Borrowing Mechanics for Term Loans.
(i) Company shall deliver to Administrative Agent a fully
executed Funding Notice no later than three Business Days prior to the
Closing Date (in the case of Eurodollar Rate Loans) and one Business Day
prior to the Closing Date (in the case of Base Rate Loans). Promptly upon
receipt by Administrative Agent of such Certificate, Administrative Agent
shall notify each Lender of the proposed borrowing.
41
(ii) Each Lender shall make its Term Loan available to
Administrative Agent not later than 12:00 p.m. (New York City time) on the
Closing Date, by wire transfer of same day funds in Dollars, at the
Principal Office designated by Administrative Agent. Upon satisfaction or
waiver of the conditions precedent specified herein, Administrative Agent
shall make the proceeds of the Term Loans available to Company on the
Closing Date by causing an amount of same day funds in Dollars equal to
the proceeds of all such Loans received by Administrative Agent from
Lenders to be credited to the account of Company at the Principal Office
designated by Administrative Agent or to such other account as may be
designated in writing to Administrative Agent by Company.
2.2. REVOLVING LOANS.
(a) Revolving Commitments. During the Revolving Commitment Period,
subject to the terms and conditions hereof, each Lender severally agrees to make
Revolving Loans to Company in an aggregate amount up to but not exceeding such
Lender's Revolving Commitment; provided, that after giving effect to the making
of any Revolving Loans in no event shall the Total Utilization of Revolving
Commitments exceed the Revolving Commitments then in effect. Amounts borrowed
pursuant to this Section 2.2(a) may be repaid and reborrowed during the
Revolving Commitment Period. Each Lender's Revolving Commitment shall expire on
the Revolving Commitment Termination Date and all Revolving Loans and all other
amounts owed hereunder with respect to the Revolving Loans and the Revolving
Commitments shall be paid in full no later than such date.
(b) Borrowing Mechanics for Revolving Loans.
(i) Except pursuant to 2.4(d), Revolving Loans shall be made
in an aggregate minimum amount of $1,000,000 and integral multiples of
$1,000,000 in excess of that amount.
(ii) Whenever Company desires that Lenders make Revolving
Loans, Company shall deliver to Administrative Agent a fully executed and
delivered Funding Notice no later than 10:00 a.m. (New York City time) at
least three Business Days in advance of the proposed Credit Date in the
case of a Eurodollar Rate Loan, and at least one Business Day in advance
of the proposed Credit Date in the case of a Revolving Loan that is a Base
Rate Loan. Except as otherwise provided herein, a Funding Notice for a
Revolving Loan that is a Eurodollar Rate Loan shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be
bound to make a borrowing in accordance therewith.
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(iii) Notice of receipt of each Funding Notice in respect of
Revolving Loans, together with the amount of each Lender's Pro Rata Share
thereof, if any, together with the applicable interest rate, shall be
provided by Administrative Agent to each applicable Lender by
telefacsimile with reasonable promptness, but (provided Administrative
Agent shall have received such notice by 10:00 a.m. (New York City time))
not later than 2:00 p.m. (New York City time) on the same day as
Administrative Agent's receipt of such Notice from Company.
(iv) Each Lender shall make the amount of its Revolving Loan
available to Administrative Agent not later than 12:00 p.m. (New York City
time) on the applicable Credit Date by wire transfer of same day funds in
Dollars, at the Principal Office designated by Administrative Agent.
Except as provided herein, upon satisfaction or waiver of the conditions
precedent specified herein, Administrative Agent shall make the proceeds
of such Revolving Loans available to Company on the applicable Credit Date
by causing an amount of same day funds in Dollars equal to the proceeds of
all such Revolving Loans received by Administrative Agent from Lenders to
be credited to the account of Company at the Principal Office designated
by Administrative Agent or such other account as may be designated in
writing to Administrative Agent by Company.
2.3. RESERVED
2.4. ISSUANCE OF LETTERS OF CREDIT AND HEDGE LETTERS OF CREDIT AND
PURCHASE OF PARTICIPATIONS THEREIN.
(a) Letters of Credit. During the Revolving Commitment Period,
subject to the terms and conditions hereof, Issuing Bank agrees to issue Letters
of Credit for the account of Company in the aggregate amount up to but not
exceeding (i) the Hedge Support Letter of Credit Sublimit; provided that (1)
each such Letter of Credit shall be used by Company solely to secure Company's
obligations under the Swap Agreement only to the extent there is no availability
under the Hedge L/C Commitments and (2) each such Letter of Credit shall only be
for the benefit of J. Aron & Company prior to January 1, 2006 (such Letter of
Credit being a "HEDGE SUPPORT LETTER OF CREDIT") and (ii) the Letter of Credit
Sublimit with respect to Letters of Credit to be used for general corporate
purposes and not pursuant to clause (i) of this Section 2.4(a); provided,
further, (i) each Letter of Credit shall be denominated in Dollars; (ii) the
stated amount of each Letter of Credit shall be such amount as is acceptable to
Issuing Bank; (iii) after giving effect to such issuance, in no event shall the
Total Utilization of Revolving Commitments exceed the Revolving Commitments then
in effect; (iv) after giving effect to such issuance, in no event shall the
Letter of Credit Usage exceed (1) with respect to Hedge Support Letters of
Credit, the Hedge Support Letter of Credit Sublimit then in effect and (2) with
respect to other Letters of
43
Credit excluding the Hedge Support Letters of Credit, the Letter of Credit
Sublimit then in effect; (v) in no event shall any standby Letter of Credit have
an expiration date later than the earlier of (1) the Revolving Commitment
Termination Date and (2) the date which is one year from the date of issuance of
such standby Letter of Credit; and (vi) in no event shall any commercial Letter
of Credit have an expiration date later than the earlier of (1) the Revolving
Loan Commitment Termination Date and (2) the date which is 180 days from the
date of issuance of such commercial Letter of Credit. Subject to the foregoing,
Issuing Bank may agree that a standby Letter of Credit will automatically be
extended for one or more successive periods not to exceed one year each, unless
Issuing Bank elects not to extend for any such additional period; provided,
Issuing Bank shall not extend any such Letter of Credit if it has received
written notice that an Event of Default has occurred and is continuing at the
time Issuing Bank must elect to allow such extension.
(b) Notice of Issuance. Whenever Company desires the issuance (or
amendment) of a Letter of Credit or a Hedge Letter of Credit, it shall deliver
to Issuing Bank and Administrative Agent an Issuance Notice no later than 12:00
p.m. (New York City time) at least two Business Days in the case of standby
letters of credit and Hedge Letters of Credit or five Business Days in the case
of commercial letters of credit, or in each case such shorter period as may be
agreed to by Issuing Bank in any particular instance, in advance of the proposed
date of issuance or amendment that increases or decreases the stated amount.
Upon satisfaction or waiver of the conditions set forth in Section 3.2, Issuing
Bank shall issue the requested Letter of Credit or Hedge Letter of Credit only
in accordance with Issuing Bank's standard operating procedures. Upon the
issuance of any Letter of Credit or Hedge Letter of Credit or amendment or
modification to a Letter of Credit or Hedge Letter of Credit, Issuing Bank shall
promptly notify each Lender of such issuance, which notice shall be accompanied
by a copy of such Letter of Credit or Hedge Letter of Credit or amendment or
modification to a Letter of Credit or Hedge Letter of Credit and the amount of
such Lender's respective participation in such Letter of Credit or Hedge Letter
of Credit pursuant to Section 2.4(e).
(c) Responsibility of Issuing Bank With Respect to Requests for
Drawings and Payments. In determining whether to honor any drawing under any
Letter of Credit or Hedge Letter of Credit by the beneficiary thereof, Issuing
Bank shall be responsible only to examine the documents delivered under such
Letter of Credit or Hedge Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit or Hedge Letter of Credit. Subject to
the last sentence of this Section 2.4(c), as between Company and Issuing Bank,
Company assumes all risks of the acts and omissions of, or misuse of the Letters
of Credit or Hedge Letters of Credit issued by Issuing Bank, by the respective
beneficiaries of such Letters of Credit or Hedge Letters of Credit. In
furtherance and not in limitation of the foregoing, Issuing Bank shall not be
responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document
44
submitted by any party in connection with the application for and issuance of
any such Letter of Credit or Hedge Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (ii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any such Letter of Credit or Hedge
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason;
(iii) failure of the beneficiary of any such Letter of Credit or Hedge Letter of
Credit to comply fully with any conditions required in order to draw upon such
Letter of Credit or Hedge Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or Hedge Letter of Credit or of the proceeds
thereof; (vii) the misapplication by the beneficiary of any such Letter of
Credit or Hedge Letter of Credit of the proceeds of any drawing under such
Letter of Credit or Hedge Letter of Credit; or (viii) any consequences arising
from causes beyond the control of Issuing Bank, including any Governmental Acts;
none of the above shall affect or impair, or prevent the vesting of, any of
Issuing Bank's rights or powers hereunder. Without limiting the foregoing and in
furtherance thereof, any action taken or omitted by Issuing Bank under or in
connection with the Letters of Credit or Hedge Letters of Credit or any
documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not give rise to any liability on the part of Issuing Bank to
Company. Notwithstanding anything to the contrary contained in this Section
2.4(c), Company shall retain any and all rights it may have against Issuing Bank
for any liability arising solely out of the gross negligence or willful
misconduct of Issuing Bank.
(d) Reimbursement by Company of Amounts Drawn or Paid Under Letters
of Credit. In the event Issuing Bank has determined to honor a drawing under a
Letter of Credit, it shall immediately notify Company and Administrative Agent,
and Company shall reimburse Issuing Bank on or before the Business Day
immediately following the date on which such drawing is honored (the
"REIMBURSEMENT DATE") in an amount in Dollars and in same day funds equal to the
amount of such honored drawing; provided, anything contained herein to the
contrary notwithstanding, (i) unless Company shall have notified Administrative
Agent and Issuing Bank prior to 10:00 a.m. (New York City time) on the date such
drawing is honored that Company intends to reimburse Issuing Bank for the amount
of such honored drawing with funds other than the proceeds of Revolving Loans,
Company shall be deemed to have given a timely Funding Notice to Administrative
Agent requesting Lenders to make Revolving Loans that are Base Rate Loans on the
Reimbursement Date in an amount in Dollars equal to the amount of such honored
drawing, and (ii) subject to satisfaction or waiver of the conditions specified
in Section 3.2, Lenders shall, on the Reimbursement Date, make Revolving Loans
that are Base Rate Loans in the amount of such honored drawing, the proceeds of
which shall be applied directly by Administrative Agent to reimburse Issuing
Bank for the amount of such honored
45
drawing; and provided further, if for any reason proceeds of Revolving Loans are
not received by Issuing Bank on the Reimbursement Date in an amount equal to the
amount of such honored drawing, Company shall reimburse Issuing Bank, on demand,
in an amount in same day funds equal to the excess of the amount of such honored
drawing over the aggregate amount of such Revolving Loans, if any, which are so
received. Nothing in this Section 2.4(d) shall be deemed to relieve any Lender
from its obligation to make Revolving Loans on the terms and conditions set
forth herein, and Company shall retain any and all rights it may have against
any Lender resulting from the failure of such Lender to make such Revolving
Loans under this Section 2.4(d).
(e) Lenders' Purchase of Participations in Letters of Credit and
Hedge Letters of Credit. Immediately upon the issuance of each Letter of Credit
or Hedge Letter of Credit, each Lender having a Revolving Commitment or Hedge
L/C Commitment, as applicable, shall be deemed to have purchased, and hereby
agrees to irrevocably purchase, from Issuing Bank a participation in such Letter
of Credit or Hedge Letter of Credit, as the case may be, and any drawings
honored thereunder in an amount equal to such Lender's Pro Rata Share (with
respect to the Revolving Commitments or Hedge L/C Commitments, as applicable) of
the maximum amount which is or at any time may become available to be drawn
thereunder. In the event that Company shall fail for any reason to reimburse
Issuing Bank as provided in Section 2.4(d) (with respect to Letters of Credit)
or Section 2.4(i) (with respect to Hedge Letters of Credit), and in each case as
the same has not been repaid from the proceeds of Revolving Loans in accordance
with Section 2.4(d) or a Hedge L/C Loan in accordance with Section 2.4(i),
Issuing Bank shall promptly notify each Lender of the unreimbursed amount of
such honored drawing and of such Lender's respective participation therein based
on such Lender's Pro Rata Share of the Revolving Commitments or the Hedge L/C
Commitments, as applicable. Each Lender shall make available to Issuing Bank an
amount equal to its respective participation, in Dollars and in same day funds,
at the office of Issuing Bank specified in such notice, not later than 12:00
p.m. (New York City time) on the first business day (under the laws of the
jurisdiction in which such office of Issuing Bank is located) after the date
notified by Issuing Bank. In the event that any Lender fails to make available
to Issuing Bank on such business day the amount of such Lender's participation
in such Letter of Credit or Hedge Letter of Credit, as applicable, as provided
in this Section 2.4(e), Issuing Bank shall be entitled to recover such amount on
demand from such Lender together with interest thereon for three Business Days
at the rate customarily used by Issuing Bank for the correction of errors among
banks and thereafter at the Base Rate. Nothing in this Section 2.4(e) shall be
deemed to prejudice the right of any Lender to recover from Issuing Bank any
amounts made available by such Lender to Issuing Bank pursuant to this Section
in the event that it is determined that the payment with respect to a Letter of
Credit or Hedge Letter of Credit in respect of which payment was made by such
Lender constituted gross negligence or willful misconduct on the part of Issuing
Bank. In the event Issuing Bank shall have been reimbursed by other Lenders
pursuant to this Section 2.4(e) for all or any portion of any drawing honored by
46
Issuing Bank under a Letter of Credit or Hedge Letter of Credit, such Issuing
Bank shall distribute to each Lender which has paid all amounts payable by it
under this Section 2.4(e) with respect to such honored drawing such Lender's Pro
Rata Share of all payments subsequently received by Issuing Bank from Company in
reimbursement of such honored drawing when such payments are received. Any such
distribution shall be made to a Lender at its primary address set forth below
its name on Appendix B or at such other address as such Lender may request.
(f) Obligations Absolute. The obligation of Company to reimburse
Issuing Bank for drawings honored under the Letters of Credit or Hedge Letters
of Credit issued by it and to repay any Revolving Loans made by Lenders pursuant
to Section 2.4(d) and the obligations of Lenders under Section 2.4(e) shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms hereof under all circumstances including any of the following
circumstances: (i) any lack of validity or enforceability of any Letter of
Credit or Hedge Letter of Credit; (ii) the existence of any claim, set-off,
defense or other right which Company or any Lender may have at any time against
a beneficiary or any transferee of any Letter of Credit or Hedge Letter of
Credit (or any Persons for whom any such transferee may be acting), Issuing
Bank, Lender or any other Person or, in the case of a Lender, against Company,
whether in connection herewith, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between Company or
one of its Subsidiaries and the beneficiary for which any Letter of Credit or
Hedge Letter of Credit was procured); (iii) any draft or other document
presented under any Letter of Credit or Hedge Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; (iv) payment by Issuing Bank
under any Letter of Credit or Hedge Letter of Credit against presentation of a
draft or other document which does not substantially comply with the terms of
such Letter of Credit or Hedge Letter of Credit; (v) any adverse change in the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company or any of its Subsidiaries; (vi) any breach hereof or any
other Credit Document by any party thereto; (vii) any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing; or (viii)
the fact that an Event of Default or a Default shall have occurred and be
continuing; provided, in each case, that payment by Issuing Bank under the
applicable Letter of Credit or Hedge Letter of Credit shall not have constituted
gross negligence or willful misconduct of Issuing Bank under the circumstances
in question.
(g) Indemnification. Without duplication of any obligation of
Company under Section 10.2 or 10.3, in addition to amounts payable as provided
herein, Company hereby agrees to protect, indemnify, pay and save harmless
Issuing Bank from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel and allocated costs of internal counsel) which Issuing
Bank may incur or be subject to as a consequence, direct or indirect, of (i) the
issuance of any Letter of Credit or Hedge Letter of Credit by Issuing Bank,
other than as a result of (1) the gross
47
negligence or willful misconduct of Issuing Bank or (2) the wrongful dishonor by
Issuing Bank of a proper demand for payment made under any Letter of Credit or
Hedge Letter of Credit issued by it, or (ii) the failure of Issuing Bank to
honor a drawing under any such Letter of Credit or Hedge Letter of Credit as a
result of any Governmental Act.
(h) Hedge Letters of Credit. During the Hedge L/C Commitment Period,
subject to the terms and conditions hereof, Issuing Bank hereby agrees to issue
Hedge Letters of Credit for the account of Company in an amount not to exceed
the aggregate Hedge L/C Commitments; provided that each such Hedge Letter of
Credit shall be used by Company solely to secure Company's obligations under the
Swap Agreement. The aggregate outstanding amount of Hedge Letters of Credit
shall not exceed the aggregate Hedge L/C Commitment at any time. Each of the
Lenders, the Agents, the Issuing Bank and Company agrees that (A) the
obligations related to each such Hedge Letter of Credit shall constitute
Obligations for all purposes of this Agreement and the other Credit Documents,
unless otherwise specifically excluded therefrom and (B) each such Hedge Letter
of Credit shall be entitled and subject to all other rights, remedies, benefits,
duties and obligations contained in the Credit Documents, including, without
limitation, the benefits of the Liens of the Collateral Trustee on the
Collateral. In no event shall any Hedge Letter of Credit have an expiration date
later than the earlier of (1) the Hedge L/C Commitment Termination Date and (2)
the date which is one year from the date of issuance of such Hedge Letter of
Credit. Subject to the foregoing, Issuing Bank may agree that a Hedge Letter of
Credit will automatically be extended for one or more successive periods not to
exceed one year each, unless Issuing Bank elects not to extend for any such
additional period; provided, Issuing Bank shall not extend any such Hedge Letter
of Credit if it has received written notice that an Event of Default has
occurred and is continuing at the time Issuing Bank must elect to allow such
extension; provided, further, in the event a Funding Default exists, Issuing
Bank shall not be required to issue any Hedge Letter of Credit unless Issuing
Bank has entered into arrangements satisfactory to it and Company to eliminate
Issuing Bank's risk with respect to the participation in Hedge Letters of Credit
of the Defaulting Lender, including by cash collateralizing such Defaulting
Lender's Pro Rata Share of the Hedge Letter of Credit Usage.
(i) Drawing and Reimbursement re Hedge Letters of Credit. The
payment by the Issuing Bank of a drawing under a Hedge Letter of Credit shall
constitute the making by the Issuing Bank of a loan in the amount of such
payment. In the event Issuing Bank has determined to honor a drawing under a
Hedge Letter of Credit, it shall immediately notify Company and Administrative
Agent, and Company shall reimburse Issuing Bank on or before the Business Day
immediately following the date on which such drawing is honored (the "HEDGE L/C
REIMBURSEMENT DATE") in an amount in Dollars and in same day funds equal to the
amount of such honored drawing; provided, anything contained herein to the
contrary notwithstanding, (i) unless Company shall have notified Administrative
Agent and Issuing Bank prior to 10:00 a.m. (New York City time) on the date such
drawing is honored that Company intends to reimburse
48
Issuing Bank for the amount of such honored drawing with funds other than the
proceeds of Hedge L/C Loans, Company shall be deemed to have given a timely
Funding Notice to Administrative Agent requesting Lenders to make Hedge L/C
Loans that are Base Rate Loans on the Hedge L/C Reimbursement Date in an amount
in Dollars equal to the amount of such honored drawing, and (ii) subject to
satisfaction or waiver of the conditions specified in Section 3.2, Lenders
shall, on the Hedge L/C Reimbursement Date, make Hedge L/C Loans that are Base
Rate Loans in the amount of such honored drawing, the proceeds of which shall be
applied directly by Administrative Agent to reimburse Issuing Bank for the
amount of such honored drawing; and provided further, if for any reason proceeds
of Hedge L/C Loans are not received by Issuing Bank on the Hedge L/C
Reimbursement Date in an amount equal to the amount of such honored drawing,
Company shall reimburse Issuing Bank, on demand, in an amount in same day funds
equal to the excess of the amount of such honored drawing over the aggregate
amount of such Hedge L/C Loans, if any, which are so received. Nothing in this
Section 2.4(i) shall be deemed to relieve any Lender from its obligation to make
Hedge L/C Loans on the terms and conditions set forth herein, and Company shall
retain any and all rights it may have against any Lender resulting from the
failure of such Lender to make such Hedge L/C Loans under this Section 2.4(i).
(j) Replacement of Issuing Bank. If the Issuing Bank (the "CURRENT
ISSUING BANK") fails to meet the Letter of Credit Issuer Rating or defaults in
making any required payment pursuant to a Letter of Credit or Hedge Letter of
Credit, it shall promptly notify the Administrative Agent and the Company. If
the Issuing Bank fails to meet the Letter of Credit Issuer Rating or defaults in
making any required payment pursuant to a Letter of Credit or Hedge Letter of
Credit, and regardless of whether Company or Administrative Agent shall have
received the notice referred to in the immediately preceding sentence, (i)
Company shall be permitted to locate a banking institution (including any
Lender) to act as the new Issuing Bank (the "REPLACEMENT ISSUING BANK") and (ii)
the Administrative Agent shall use commercially reasonable efforts to assist the
Company in locating a Replacement Issuing Bank. Any Replacement Issuing Bank
must meet the Letter of Credit Issuer Rating. In connection with such
replacement, Company shall have caused each outstanding Letter of Credit or
Hedge Letter of Credit, as applicable, issued thereby to be cancelled or
returned to the Current Issuing Bank. Current Issuing Bank agrees to cooperate
and provide all needed documentation reasonably required to effect the foregoing
replacement.
(k) Swap Agreement Support. Notwithstanding anything herein to the
contrary, the Company shall (i) from the Closing Date through such time as the
Senior Leverage Ratio (determined for such period by reference to the most
recent Compliance Certificate delivered pursuant to Section 5.1(d) calculating
the Senior Leverage Ratio) shall be first determined to be 0.75:1.00 or less,
have requested issuance of, and maintained, Hedge Letters of Credit and, if
required, Hedge Support Letters of Credit in an aggregate amount of not less
than the Maximum
49
Delivery Amount and (ii) thereafter, have requested issuance of, and maintained,
Hedge Letters of Credit and, if required, Hedge Support Letters of Credit in an
aggregate amount as may be required pursuant to the credit support requirements
under any applicable Swap Agreements.
(l) Letter of Credit Applications. If required by its standard
operating procedures, the Issuing Bank may require Company to execute and
deliver one or more letter of credit applications or similar documents
("APPLICATIONS") in connection with the issuance by the Issuing Bank of any
Letter of Credit or Hedge Letter of Credit. Notwithstanding the terms and
provisions of any such Application and the fact that Company executes and
delivers such Application after the date this Agreement is executed and
delivered, any provision of any Application that purports to add additional
interest, charges or rights to indemnification not found in this Agreement, that
provides for additional or different defaults, events of default, or grace
periods not found in this Agreement, that purports to create additional security
interests not provided for in this Agreement or any Credit Document, that
purports to require the posting of additional cash collateral or other security,
or that is otherwise inconsistent with, or in conflict with, any provision of
this Agreement or any Credit Document, shall not have any force or effect and
the provisions of this Agreement and the Credit Documents shall apply.
2.5. PRO RATA SHARES; AVAILABILITY OF FUNDS.
(a) Pro Rata Shares. All Loans shall be made, and all participations
purchased, by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in such other Lender's obligation to make a Loan
requested hereunder or purchase a participation required hereby nor shall any
Term Loan Commitment, any Revolving Commitment or Hedge L/C Commitment of any
Lender be increased or decreased as a result of a default by any other Lender in
such other Lender's obligation to make a Loan requested hereunder or purchase a
participation required hereby.
(b) Availability of Funds. Unless Administrative Agent shall have
been notified by any Lender prior to the applicable Credit Date that such Lender
does not intend to make available to Administrative Agent the amount of such
Lender's Loan requested on such Credit Date, Administrative Agent may assume
that such Lender has made such amount available to Administrative Agent on such
Credit Date and Administrative Agent may, in its sole discretion, but shall not
be obligated to, make available to Company a corresponding amount on such Credit
Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Credit Date until the date such amount
is paid to Administrative Agent, at the customary rate set by Administrative
Agent for the correction of errors among banks for three Business Days and
50
thereafter at the Base Rate. If such Lender does not pay such corresponding
amount forthwith upon Administrative Agent's demand therefor, Administrative
Agent shall promptly notify Company and Company shall immediately pay such
corresponding amount to Administrative Agent together with interest thereon, for
each day from such Credit Date until the date such amount is paid to
Administrative Agent, at the rate payable hereunder for Base Rate Loans for such
Class of Loans. Nothing in this Section 2.5(b) shall be deemed to relieve any
Lender from its obligation to fulfill its Term Loan Commitments and Revolving
Commitments hereunder or to prejudice any rights that Company may have against
any Lender as a result of any default by such Lender hereunder.
2.6. USE OF PROCEEDS.
The proceeds of the Term Loans will be used to finance a portion of the
Acquisition, including the refinancing of Existing Indebtedness and the payment
of Transaction Costs. Amounts available under the Revolving Commitments shall be
used for working capital requirements and other general corporate purposes of
Company, including Permitted Acquisitions; provided that (i) up to $15,000,000
of the Revolving Commitments shall be available for the issuance of Hedge
Support Letters of Credit from the Closing Date through the Revolving Commitment
Termination Date and (ii) up to an additional $5,000,000 of the Revolving
Commitments shall be available for the issuance of Letters of Credit for general
corporate purposes from the Closing Date through the Revolving Commitment
Termination Date. Amounts available under the Hedge L/C Commitments shall be
used solely to provide credit support to Company's obligations under the Swap
Agreement. No portion of the proceeds of any Credit Extension shall be used in
any manner that causes or might cause such Credit Extension or the application
of such proceeds to violate Regulation T, Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System or any other regulation thereof
or to violate the Exchange Act.
2.7. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES.
(a) Lenders' Evidence of Debt. Each Lender shall maintain on its
internal records an account or accounts evidencing the Obligations of Company to
such Lender, including the amounts of the Loans made by it and each repayment
and prepayment in respect thereof. Any such recordation shall be conclusive and
binding on Company, absent manifest error; provided, that the failure to make
any such recordation, or any error in such recordation, shall not affect any
Lender's Revolving Commitments or Company's Obligations in respect of any
applicable Loans; and provided further, in the event of any inconsistency
between the Register and any Lender's records, the recordations in the Register
shall govern.
(b) Register. Administrative Agent (or its agent or sub-agent
appointed by it) shall maintain at the Principal Office a register for the
recordation of the names and addresses of
51
Lenders and the Revolving Commitments, the Hedge L/C Commitments and Loans of
each Lender from time to time (the "REGISTER"). The Register, as in effect at
the close of business on the preceding Business Day, shall be available for
inspection by Company or any Lender at any reasonable time and from time to time
upon reasonable prior notice. Administrative Agent shall record, or shall cause
to be recorded, in the Register the Revolving Commitments, Hedge L/C Commitments
and the Loans in accordance with the provisions of Section 10.6, and each
repayment or prepayment in respect of the principal amount of the Loans, and any
such recordation shall be conclusive and binding on Company and each Lender,
absent manifest error; provided, failure to make any such recordation, or any
error in such recordation, shall not affect any Lender's Revolving Commitments,
Hedge L/C Commitments or Company's Obligations in respect of any Loan. Company
hereby designates GSCP to serve as Company's agent solely for purposes of
maintaining the Register as provided in this Section 2.7, and Company hereby
agrees that, GSCP and its officers, directors, employees, agents, sub-agents and
affiliates shall constitute "Indemnitees."
(c) Notes. If so requested by any Lender by written notice to
Company (with a copy to Administrative Agent) at least two Business Days prior
to the Closing Date, or at any time thereafter, Company shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to Section
10.6) on the Closing Date (or, if such notice is delivered after the Closing
Date, promptly after Company's receipt of such notice) a Note or Notes to
evidence such Lender's Term Loan, Revolving Loan or Hedge L/C Loan, as the case
may be.
2.8. INTEREST ON LOANS.
(a) Except as otherwise set forth herein, each Class of Loan shall
bear interest on the unpaid principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof as follows:
(i) in the case of Revolving Loans and Hedge L/C Loans:
(1) if a Base Rate Loan, at the Base Rate plus the
Applicable Margin; or
(2) if a Eurodollar Rate Loan, at the Adjusted
Eurodollar Rate plus the Applicable Margin; and
(ii) in the case of Term Loans:
52
(1) if a Base Rate Loan, at the Base Rate plus the
Applicable Margin; or
(2) if a Eurodollar Rate Loan, at the Adjusted
Eurodollar Rate plus the Applicable Margin.
(b) The basis for determining the rate of interest with respect to
any Loan, and the Interest Period with respect to any Eurodollar Rate Loan,
shall be selected by Company and notified to Administrative Agent and Lenders
pursuant to the applicable Funding Notice or Conversion/Continuation Notice, as
the case may be; provided, the Term Loans initially shall be made as Base Rate
Loans until the date which is thirty (30) days following the Closing Date. If on
any day a Loan is outstanding with respect to which a Funding Notice or
Conversion/Continuation Notice has not been delivered to Administrative Agent in
accordance with the terms hereof specifying the applicable basis for determining
the rate of interest, then for that day such Loan shall be a Base Rate Loan.
(c) In connection with Eurodollar Rate Loans there shall be no more
than five (5) Interest Periods outstanding at any time. In the event Company
fails to specify between a Base Rate Loan or a Eurodollar Rate Loan in the
applicable Funding Notice or Conversion/Continuation Notice, such Loan (if
outstanding as a Eurodollar Rate Loan) will be automatically converted into a
Base Rate Loan on the last day of the then-current Interest Period for such Loan
(or if outstanding as a Base Rate Loan will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan). In the event Company fails to
specify an Interest Period for any Eurodollar Rate Loan in the applicable
Funding Notice or Conversion/Continuation Notice, Company shall be deemed to
have selected an Interest Period of one month. As soon as practicable after
10:00 a.m. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
(d) Interest payable pursuant to Section 2.8(a) shall be computed
(i) in the case of Base Rate Loans on the basis of a 365-day or 366-day year, as
the case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of
a 360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Term Loan, the last Interest Payment Date with
respect to such Term Loan or, with respect to a Base Rate Loan being converted
from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan
to such Base Rate Loan, as the case may be, shall be included, and the date of
payment of such Loan or the expiration date of an Interest Period
53
applicable to such Loan or, with respect to a Base Rate Loan being converted to
a Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such
Eurodollar Rate Loan, as the case may be, shall be excluded; provided, if a Loan
is repaid on the same day on which it is made, one day's interest shall be paid
on that Loan.
(e) Except as otherwise set forth herein, interest on each Loan (i)
with respect to Revolving Loans and Hedge L/C Loans, shall accrue on a daily
basis and shall be payable in arrears on each Interest Payment Date with respect
to interest accrued on and to each such payment date; (ii) with respect to Term
Loans, shall accrue on a daily basis on and to the most recent March 31st, June
30th, September 30th and December 31st prior to such Interest Payment Date and
shall be payable in arrears on each Interest Payment Date; (iii) shall accrue on
a daily basis and shall be payable in arrears upon any prepayment of that Loan,
whether voluntary or mandatory, to the extent accrued on the amount being
prepaid; and (iv) shall accrue on a daily basis and shall be payable in arrears
at maturity of the Loans, including final maturity of the Loans; provided,
however, with respect to any voluntary prepayment of a Base Rate Loan, accrued
interest shall instead be payable on the applicable Interest Payment Date.
(f) Company agrees to pay to Issuing Bank, with respect to drawings
honored under any Letter of Credit or Hedge Letter of Credit, interest on the
amount paid by Issuing Bank in respect of each such honored drawing from the
date such drawing is honored to but excluding the date such amount is reimbursed
by or on behalf of Company at a rate equal to (i) for the period from the date
such drawing is honored to but excluding the applicable Reimbursement Date, the
rate of interest otherwise payable hereunder with respect to Revolving Loans
that are Base Rate Loans, and (ii) thereafter, a rate which is 2% per annum in
excess of the rate of interest otherwise payable hereunder with respect to
Revolving Loans that are Base Rate Loans.
(g) Interest payable pursuant to Section 2.8(f) shall be computed on
the basis of a 365/366-day year for the actual number of days elapsed in the
period during which it accrues, and shall be payable on demand or, if no demand
is made, on the date on which the related drawing under a Letter of Credit or
Hedge Letter of Credit, as the case may be, is reimbursed in full. Promptly upon
receipt by Issuing Bank of any payment of interest pursuant to Section 2.8(f),
Issuing Bank shall distribute to each Lender, out of the interest received by
Issuing Bank in respect of the period from the date such drawing is honored to
but excluding the date on which Issuing Bank is reimbursed for the amount of
such drawing (including any such reimbursement out of the proceeds of any
Revolving Loans or Hedge L/C Loan), the amount that such Lender would have been
entitled to receive in respect of the letter of credit fee that would have been
payable in respect of such Letter of Credit or Hedge Letter of Credit, as the
case may be, for such period if no drawing had been honored under such Letter of
Credit or Hedge Letter of Credit. In the event Issuing Bank shall have been
reimbursed by Lenders for all or any portion of such honored drawing, Issuing
Bank shall distribute to each Lender which has paid all amounts payable by it
under Section 2.4(e) with respect to such honored drawing such Lender's Pro Rata
54
Share of any interest received by Issuing Bank in respect of that portion of
such honored drawing so reimbursed by Lenders for the period from the date on
which Issuing Bank was so reimbursed by Lenders to but excluding the date on
which such portion of such honored drawing is reimbursed by Company.
2.9. CONVERSION/CONTINUATION.
(a) Subject to Section 2.18 and so long as no Default or Event of
Default shall have occurred and then be continuing, Company shall have the
option:
(i) to convert at any time all or any part of any Term Loan,
Revolving Loan or Hedge L/C Loan equal to $1,000,000 and integral
multiples of $1,000,000 in excess of that amount from one Type of Loan to
another Type of Loan; provided, a Eurodollar Rate Loan may only be
converted on the expiration of the Interest Period applicable to such
Eurodollar Rate Loan unless Company shall pay all amounts due under
Section 2.18 in connection with any such conversion; or
(ii) upon the expiration of any Interest Period applicable to
any Eurodollar Rate Loan, to continue all or any portion of such Loan
equal to $5,000,000 and integral multiples of $1,000,000 in excess of that
amount as a Eurodollar Rate Loan.
(b) Company shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00 a.m. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any
Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.
2.10. DEFAULT INTEREST.
Upon the occurrence and during the continuance of an Event of Default
under Section 8.1(a), the overdue principal amount of all Loans outstanding and,
to the extent permitted by applicable law, any overdue interest payments on the
Loans or any overdue fees or other amounts owed hereunder, shall thereafter bear
interest (including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate
that is 2% per annum in excess of the interest rate otherwise payable hereunder
with respect to the applicable Loans (or, in the case of any such fees and other
amounts, at a rate which is 2% per annum in excess of the interest rate
otherwise payable hereunder for Base Rate
55
Loans); provided, in the case of Eurodollar Rate Loans, upon the expiration of
the Interest Period in effect at the time any such increase in interest rate is
effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans and
any overdue principal amount thereof shall thereafter bear interest payable upon
demand at a rate which is 2% per annum in excess of the interest rate otherwise
payable hereunder for Base Rate Loans. Payment or acceptance of the increased
rates of interest provided for in this Section 2.10 is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of Administrative
Agent or any Lender.
2.11. FEES.
(a) Company agrees to pay to Lenders having Revolving Exposure:
(i) commitment fees equal to (1) the average of the daily
difference between (a) the Revolving Commitments, and (b) the Total
Utilization of Revolving Commitments, times (2) 0.50% per annum; and
(ii) during the Letter of Credit Commitment Period, letter of
credit fees equal to (1) the Applicable Margin for Revolving Loans that
are Eurodollar Rate Loans, times (2) the average aggregate daily maximum
amount available to be drawn under all such Letters of Credit (regardless
of whether any conditions for drawing could then be met and determined as
of the close of business on any date of determination).
All fees referred to in this Section 2.11(a) shall be paid to Administrative
Agent at its Principal Office and upon receipt, Administrative Agent shall
promptly distribute to each Lender its Pro Rata Share thereof.
(b) Company agrees to pay to Lenders having Hedge L/C Exposure:
(i) commitment fees equal to (1) the average of the daily
difference between (a) the Hedge L/C Commitments, and (b) the sum of (x)
the aggregate principal amount of outstanding Hedge L/C Loans plus (y) the
Hedge Letter of Credit Usage, times (2) 0.50% per annum; and
(ii) letter of credit fees equal to (1) the Applicable Margin
for Revolving Loans that are Eurodollar Rate Loans, times (2) the average
aggregate daily maximum amount available to be drawn under all such Hedge
Letters of Credit (regardless of whether any conditions for drawing could
then be met and determined as of the close of business on any date of
determination).
56
(c) Company agrees to pay directly to Issuing Bank, for its own
account, the following fees:
(i) a fronting fee with respect to Letters of Credit and Hedge
Letters of Credit to be agreed between Issuing Bank and Company; and
(ii) such documentary and processing charges for any issuance,
amendment, transfer or payment of a Letter of Credit or Hedge Letter of
Credit, as the case may be, as are in accordance with Issuing Bank's
standard schedule for such charges and as in effect at the time of such
issuance, amendment, transfer or payment, as the case may be.
(d) All fees referred to in Sections 2.11(a), (b) and (c)(i) shall
be calculated on the basis of a 360-day year and the actual number of days
elapsed and shall be payable quarterly in arrears on April 1, July 1, October 1
and January 1 of each year during the Revolving Commitment Period or Hedge L/C
Commitment Period, as applicable, commencing on the first such date to occur
after the Closing Date, and on the Revolving Commitment Termination Date with
respect to the fees referred to in Sections 2.11(a)(i) and (c)(i) (with respect
to Letters of Credit) and (iii) on the Hedge L/C Commitment Termination Date
with respect to the fees referred to in Section 2.11(b) and (c)(i) (with respect
to Hedge Letters of Credit).
(e) In addition to any of the foregoing fees, Company agrees to pay
to Agents such other fees in the amounts and at the times separately agreed
upon.
2.12. SCHEDULED PAYMENTS/COMMITMENT REDUCTIONS.
(a) Scheduled Installments. The principal amounts of the Term Loans
shall be repaid in consecutive quarterly installments (each, an "INSTALLMENT")
in the aggregate amounts set forth below on the four quarterly scheduled
Interest Payment Dates applicable to Term Loans (each, an "INSTALLMENT DATE"),
commencing September 30, 2004:
FISCAL QUARTER TERM LOAN INSTALLMENTS
- ---------------------------------- -----------------------
Each Installment Date prior to July $250,000.00
7, 2010
Each Installment Date during the $23,500,000.00
period commencing July 7, 2010
through the Term
57
FISCAL QUARTER TERM LOAN INSTALLMENTS
- ---------------------------------- -----------------------
Loan Maturity Date
Notwithstanding the foregoing, (x) such Installments shall be reduced in
connection with any voluntary or mandatory prepayments of the Term Loans in
accordance with Sections 2.13, 2.14 and 2.15, as applicable; and (y) the Term
Loans, together with all other amounts owed hereunder with respect thereto,
shall, in any event, be paid in full no later than the Term Loan Maturity Date,
respectively.
(b) Commitment Reductions. The Revolving Commitments and Hedge L/C
Commitments, as the case may be, shall be permanently reduced in connection with
any voluntary or mandatory reductions of the Revolving Commitments or Hedge L/C
Commitments, as the case may be, in accordance with Sections 2.13, 2.14, and
2.15, as applicable, and all other amounts owed hereunder with respect thereto
shall, in any event, be paid in full on the Revolving Commitment Termination
Date and Hedge L/C Commitment Termination Date, respectively.
2.13. VOLUNTARY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Voluntary Prepayments.
(i) Any time and from time to time, Company may prepay any
Loans on any Business Day in whole or in part, in an aggregate minimum
amount of $1,000,000 and integral multiples of $1,000,000 in excess of
that amount.
(ii) All such prepayments shall be made:
(1) upon not less than one Business Day's prior
written or telephonic notice in the case of Base Rate Loans; and
(2) upon not less than three Business Days' prior
written or telephonic notice in the case of Eurodollar Rate Loans.
in each case given to Administrative Agent, by 12:00 p.m. (New York City time)
on the date required and, if given by telephone, promptly confirmed in writing
to Administrative Agent (and Administrative Agent will promptly transmit such
telephonic or original notice for Term Loans or Revolving Loans, as the case may
be, by telefacsimile or telephone to each Lender). Upon the giving of any such
notice, the principal amount of the Loans specified in such notice shall
58
become due and payable on the prepayment date specified therein. Any such
voluntary prepayment shall be applied as specified in Section 2.15(a).
(b) Voluntary Commitment Reductions.
(i) Company may, upon not less than three Business Days' prior
written or telephonic notice confirmed in writing to Administrative Agent
(which original written or telephonic notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each applicable
Lender), at any time and from time to time terminate in whole or
permanently reduce in part, without premium or penalty, the Revolving
Commitments in an amount up to the amount by which the Revolving
Commitments exceed the Total Utilization of Revolving Commitments at the
time of such proposed termination or reduction; provided, any such partial
reduction of the Revolving Commitments shall be in an aggregate minimum
amount of $1,000,000 and integral multiples of $1,000,000 in excess of
that amount.
(ii) Company's notice to Administrative Agent shall designate
the date (which shall be a Business Day) of such termination or reduction
and the amount of any partial reduction, and such termination or reduction
of the Revolving Commitments shall be effective on the date specified in
Company's notice and shall reduce the Revolving Commitment of each Lender
proportionately to its Pro Rata Share thereof.
2.14. MANDATORY PREPAYMENTS/COMMITMENT REDUCTIONS.
(a) Asset Sales. No later than the first Business Day following the
date of receipt by Company or any of its Subsidiaries of any Net Asset Sale
Proceeds, Company shall prepay the Loans and/or the Revolving Commitments shall
be permanently reduced as set forth in Section 2.15(b) in an aggregate amount
equal to such Net Asset Sale Proceeds; provided, (i) so long as no Default or
Event of Default shall have occurred and be continuing, and (ii) to the extent
that aggregate Net Asset Sale Proceeds from the Closing Date through the
applicable date of determination do not exceed $60,000,000, Company shall have
the option, directly or through one or more of its Subsidiaries, to invest Net
Asset Sale Proceeds within three hundred sixty days of receipt thereof in
productive assets of the general type used in the business of Company and its
Subsidiaries; provided further, pending any such investment all such Net Asset
Sale Proceeds shall be applied to prepay Revolving Loans to the extent
outstanding (without a reduction in Revolving Commitments).
(b) Insurance/Condemnation Proceeds. No later than the first
Business Day following the date of receipt by Company or any of its
Subsidiaries, or Administrative Agent as loss payee, of any Net
Insurance/Condemnation Proceeds, Company shall prepay the Loans
59
and/or the Revolving Commitments shall be permanently reduced as set forth in
Section 2.15(b) in an aggregate amount equal to such Net Insurance/Condemnation
Proceeds; provided, (i) so long as no Default or Event of Default shall have
occurred and be continuing, and (ii) to the extent that aggregate Net
Insurance/Condemnation Proceeds from the Closing Date through the applicable
date of determination do not exceed $25,000,000, Company shall have the option,
directly or through one or more of its Subsidiaries to invest such Net
Insurance/Condemnation Proceeds within three hundred sixty days of receipt
thereof in productive assets of the general type used in the business of Company
and its Subsidiaries, which investment may include the repair, restoration or
replacement of the applicable assets thereof; provided further, pending any such
investment all such Net Insurance/Condemnation Proceeds, as the case may be,
shall be applied to prepay Revolving Loans to the extent outstanding (without a
reduction in Revolving Commitments).
(c) Issuance of Equity Securities. On the date of receipt by Company
of any Cash proceeds from a capital contribution to, or the issuance of any
Capital Stock of, Company or any of its Subsidiaries (other than pursuant to any
employee stock or stock option compensation plan or capital contribution made by
Company to any Subsidiary), Company shall prepay the Loans and/or the Revolving
Commitments shall be permanently reduced as set forth in Section 2.15(b) in an
aggregate amount equal to 50% of such Cash proceeds, net of underwriting
discounts and commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses.
(d) Issuance of Debt. On the date of receipt by Company or any of
its Subsidiaries of any Cash proceeds from the incurrence of any Indebtedness of
Company or any of its Subsidiaries (other than Cash proceeds of any Indebtedness
permitted to be incurred pursuant to Section 6.1), Company shall prepay the
Loans and/or the Revolving Commitments shall be permanently reduced as set forth
in Section 2.15(b) in an aggregate amount equal to 100% of such Cash proceeds,
net of underwriting discounts and commissions and other reasonable costs and
expenses associated therewith, including reasonable legal fees and expenses.
(e) Consolidated Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Year (commencing with Fiscal Year
2004), Company shall, no later than one hundred and five (105) days after the
end of such Fiscal Year, prepay the Loans and/or the Revolving Commitments shall
be permanently reduced as set forth in Section 2.15(b) in an aggregate amount
equal to 100% of such Consolidated Excess Cash Flow; provided, during any period
in which the Senior Leverage Ratio (determined for any such period by reference
to the most recent Compliance Certificate delivered pursuant to Section 5.1(d)
calculating the Senior Leverage Ratio) shall be 0.75:1.00 or less, Company shall
only be required to make the prepayments and/or reductions otherwise required
hereby in an amount equal to 75% of such Consolidated Excess Cash Flow.
60
(f) Revolving Loans; Hedge L/C Loans. (i) Company shall from time to
time prepay the Revolving Loans to the extent necessary so that the Total
Utilization of Revolving Commitments shall not at any time exceed the Revolving
Commitments then in effect and (ii) Company shall from time to time prepay the
Hedge L/C Loans to the extent necessary so that the Total Utilization of Hedge
L/C Commitments shall not at any time exceed the Hedge L/C Commitments then in
effect.
(g) Prepayment Certificate. Concurrently with any prepayment of the
Loans and/or reduction of the Revolving Commitments pursuant to Sections 2.14(a)
through 2.14(e), Company shall deliver to Administrative Agent a certificate of
an Authorized Officer demonstrating the calculation of the amount of the
applicable net proceeds or Consolidated Excess Cash Flow, as the case may be. In
the event that Company shall subsequently determine that the actual amount
received exceeded the amount set forth in such certificate, Company shall
promptly make an additional prepayment of the Loans and/or the Revolving
Commitments shall be permanently reduced in an amount equal to such excess, and
Company shall concurrently therewith deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the derivation of such
excess.
2.15. APPLICATION OF PREPAYMENTS/REDUCTIONS.
(a) Application of Voluntary Prepayments by Type of Loans. Any
prepayment of any Loan pursuant to Section 2.13(a) shall be applied as specified
by Company in the applicable notice of prepayment; provided, in the event
Company fails to specify the Loans to which any such prepayment shall be
applied, such prepayment shall be applied as follows:
first, to repay outstanding Revolving Loans to the full extent
thereof;
second, to repay outstanding Hedge L/C Loans to the full
extent thereof; and
third, to prepay the Term Loans.
Any prepayment of any Term Loan pursuant to Section 2.13(a)
shall be further applied on a pro rata basis to reduce the scheduled
remaining Installments of principal on such Term Loan.
(b) Application of Mandatory Prepayments by Type of Loans. Any
amount required to be paid pursuant to Sections 2.14(a) through 2.14(e) shall be
applied as follows:
61
first, to prepay Term Loans on a pro rata basis to reduce the
scheduled remaining Installments of principal of the Term Loans;
second, to prepay the Revolving Loans to the full extent
thereof and, except as provided in Sections 2.14(a) and (b), to
permanently reduce the Revolving Commitments by the amount of such
prepayment;
third, to prepay the Hedge L/C Loans to the full extent
thereof;
fourth, to prepay outstanding reimbursement obligations with
respect to Letters of Credit and to further permanently reduce the
Revolving Loan Commitments by the amount of such prepayment;
fifth, to prepay outstanding reimbursement obligations with
respect to Hedge Letters of Credit;
sixth, to cash collateralize Letters of Credit and to further
permanently reduce the Revolving Loan Commitments by the amount of such
cash collateralization;
seventh, to cash collateralize Hedge Letters of Credit;
eighth, to further permanently reduce the Revolving
Commitments to the full extent thereof; and
ninth, to permanently reduce the Hedge L/C Commitments to the
full extent thereof.
(c) Application of Prepayments of Loans to Base Rate Loans and
Eurodollar Rate Loans. Considering each Class of Loans being prepaid separately,
any prepayment thereof shall be applied first to Base Rate Loans to the full
extent thereof before application to Eurodollar Rate Loans, in each case in a
manner which minimizes the amount of any payments required to be made by Company
pursuant to Section 2.18(c).
2.16. GENERAL PROVISIONS REGARDING PAYMENTS.
(a) All payments by Company of principal, interest, fees and other
Obligations shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 p.m. (New York City time) on the date
due at the Principal Office designated by Administrative Agent for the account
of Lenders; for purposes of computing interest and fees, funds received by
62
Administrative Agent after that time on such due date shall be deemed to have
been paid by Company on the next succeeding Business Day.
(b) All payments in respect of the principal amount of any Loan
(other than voluntary prepayments of Revolving Loans) shall be accompanied by
payment of accrued interest on the principal amount being repaid or prepaid.
(c) Administrative Agent (or its agent or sub-agent appointed by it)
shall promptly distribute to each Lender at such address as such Lender shall
indicate in writing, such Lender's applicable Pro Rata Share of all payments and
prepayments of principal and interest due hereunder, together with all other
amounts due thereto, including, without limitation, all fees payable with
respect thereto, to the extent received by Administrative Agent.
(d) Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(e) Subject to the provisos set forth in the definition of "Interest
Period" as they may apply to Revolving Loans or Hedge L/C Loans, whenever any
payment to be made hereunder with respect to any Loan shall be stated to be due
on a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and, with respect to Revolving Loans and Hedge L/C Loans
only, such extension of time shall be included in the computation of the payment
of interest hereunder or of the Revolving Commitment fees hereunder.
(f) Company hereby authorizes Administrative Agent to charge
Company's accounts with Administrative Agent in order to cause timely payment to
be made to Administrative Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in its accounts for
that purpose).
(g) Administrative Agent shall deem any payment by or on behalf of
Company hereunder that is not made in same day funds prior to 12:00 p.m. (New
York City time) to be a non-conforming payment. Any such payment shall not be
deemed to have been received by Administrative Agent until the later of (i) the
time such funds become available funds, and (ii) the applicable next Business
Day. Administrative Agent shall give prompt telephonic notice to Company and
each applicable Lender (confirmed in writing) if any payment is non-conforming.
Any non-conforming payment may constitute or become a Default or Event of
Default in accordance with the terms of Section 8.1(a). Interest shall continue
to accrue on any principal as to which a non-conforming payment is made until
such funds become available funds (but in no event less than the period from the
date of such payment to the next succeeding applicable
63
Business Day) at the rate determined pursuant to Section 2.10 from the date such
amount was due and payable until the date such amount is paid in full.
(h) If an Event of Default shall have occurred and not otherwise
been waived, and the maturity of the Obligations shall have been accelerated
pursuant to Section 8.1, all payments or proceeds received by Agents hereunder
in respect of any of the Obligations, shall be applied in accordance with the
application arrangements described in Section 7.2 of the Pledge and Security
Agreement.
2.17. RATABLE SHARING.
Lenders hereby agree among themselves that, except as otherwise provided
in the Collateral Documents with respect to amounts realized from the exercise
of rights with respect to Liens on the Collateral, if any of them shall, whether
by voluntary payment (other than a voluntary prepayment of Loans made and
applied in accordance with the terms hereof), through the exercise of any right
of set-off or banker's lien, by counterclaim or cross action or by the
enforcement of any right under the Credit Documents or otherwise, or as adequate
protection of a deposit treated as cash collateral under the Bankruptcy Code,
receive payment or reduction of a proportion of the aggregate amount of
principal, interest, amounts payable in respect of Letters of Credit, amounts
payable in respect of Hedge Letters of Credit, fees and other amounts then due
and owing to such Lender hereunder or under the other Credit Documents
(collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) which is greater than
the proportion received by any other Lender in respect of the Aggregate Amounts
Due to such other Lender, then the Lender receiving such proportionately greater
payment shall (a) notify Administrative Agent and each other Lender of the
receipt of such payment and (b) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them; provided, if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
2.18. MAKING OR MAINTAINING EURODOLLAR RATE LOANS.
64
(a) Inability to Determine Applicable Interest Rate. In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist, and (ii) any Funding Notice or
Conversion/Continuation Notice given by Company with respect to the Loans in
respect of which such determination was made shall be deemed to be rescinded by
Company.
(b) Illegality or Impracticability of Eurodollar Rate Loans. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful), or (ii) has become impracticable, as a result of contingencies
occurring after the date hereof which materially and adversely affect the London
interbank market or the position of such Lender in that market, then, and in any
such event, such Lender shall be an "AFFECTED LENDER" and it shall on that day
give notice (by telefacsimile or by telephone confirmed in writing) to Company
and Administrative Agent of such determination (which notice Administrative
Agent shall promptly transmit to each other Lender). Thereafter (1) the
obligation of the Affected Lender to make Loans as, or to convert Loans to,
Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by
the Affected Lender, (2) to the extent such determination by the Affected Lender
relates to a Eurodollar Rate Loan then being requested by Company pursuant to a
Funding Notice or a Conversion/Continuation Notice, the Affected Lender shall
make such Loan as (or continue such Loan as or convert such Loan to, as the case
may be) a Base Rate Loan, (3) the Affected Lender's obligation to maintain its
outstanding Eurodollar Rate Loans (the "AFFECTED LOANS") shall be terminated at
the earlier to occur of the expiration of the Interest Period then in effect
with respect to the Affected Loans or when required by law, and (4) the Affected
Loans shall automatically convert into Base Rate Loans on the date of such
termination. Notwithstanding the foregoing, to the extent a determination by an
Affected Lender as described above relates to a Eurodollar Rate Loan then being
requested by Company pursuant to a Funding Notice or a Conversion/Continuation
Notice, Company shall have the option, subject to the provisions of Section
2.18(c), to rescind such Funding Notice or Conversion/Continuation Notice as to
all
65
Lenders by giving notice (by telefacsimile or by telephone confirmed in writing)
to Administrative Agent of such rescission on the date on which the Affected
Lender gives notice of its determination as described above (which notice of
rescission Administrative Agent shall promptly transmit to each other Lender).
Except as provided in the immediately preceding sentence, nothing in this
Section 2.18(b) shall affect the obligation of any Lender other than an Affected
Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Rate
Loans in accordance with the terms hereof.
(c) Compensation for Breakage or Non-Commencement of Interest
Periods. Company shall compensate each Lender, upon written request by such
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by such Lender to Lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by such
Lender in connection with the liquidation or re-employment of such funds but
excluding loss of anticipated profits) which such Lender may sustain: (i) if for
any reason (other than a default by such Lender) a borrowing of any Eurodollar
Rate Loan does not occur on a date specified therefor in a Funding Notice or a
telephonic request for borrowing, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified therefor in a
Conversion/Continuation Notice or a telephonic request for conversion or
continuation; (ii) if any prepayment or other principal payment of, or any
conversion of, any of its Eurodollar Rate Loans occurs on a date prior to the
last day of an Interest Period applicable to that Loan; or (iii) if any
prepayment of any of its Eurodollar Rate Loans is not made on any date specified
in a notice of prepayment given by Company.
(d) Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of such Lender.
(e) Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this Section 2.18 and under
Section 2.19 shall be made as though such Lender had actually funded each of its
relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of such
Lender to a domestic office of such Lender in the United States of America;
provided, however, each Lender may fund each of its Eurodollar Rate Loans in any
manner it sees fit and the foregoing assumptions shall be utilized only for the
purposes of calculating amounts payable under this Section 2.18 and under
Section 2.19.
2.19. INCREASED COSTS; CAPITAL ADEQUACY.
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(a) Compensation For Increased Costs and Taxes. Subject to the
provisions of Section 2.20 (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender (which term shall include
Issuing Bank for purposes of this Section 2.19(a)) shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law): (i)
subjects such Lender (or its applicable lending office) to any additional Tax
(other than any Tax on the overall net income of such Lender) with respect to
this Agreement or any of the other Credit Documents or any of its obligations
hereunder or thereunder or any payments to such Lender (or its applicable
lending office) of principal, interest, fees or any other amount payable
hereunder; (ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, or advances or loans
by, or other credit extended by, or any other acquisition of funds by, any
office of such Lender (other than any such reserve or other requirements with
respect to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate or with respect to Base Rate Loans that are included in
the determination of the Prime Rate); or (iii) imposes any other condition
(other than with respect to a Tax matter) on or affecting such Lender (or its
applicable lending office) or its obligations hereunder or the London interbank
market; and the result of any of the foregoing is to increase the cost to such
Lender of agreeing to make, making or maintaining Loans hereunder or to reduce
any amount received or receivable by such Lender (or its applicable lending
office) with respect thereto; then, in any such case, Company shall promptly pay
to such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder; provided that Company shall not be required to compensate a Lender
pursuant to this Section for any increased costs incurred or reductions suffered
more than nine months prior to the date that such Lender notifies Company of the
change in law giving rise to such increased costs or reductions and of such
Lender's intention to claim compensation therefor (except that, if the change in
law giving rise to such increased costs or reductions is retroactive, then the
nine-month period referred to above shall be extended to include the period of
retroactive effect thereof). Such Lender shall deliver to Company (with a copy
to Administrative
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Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this Section
2.19(a), which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
(b) Capital Adequacy Adjustment. In the event that any Lender (which
term shall include Issuing Bank for purposes of this Section 2.19(b)) shall have
determined that the adoption, effectiveness, phase-in or applicability after the
Closing Date of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Revolving Commitments or Letters of Credit or Hedge
Letters of Credit, or participations therein or other obligations hereunder with
respect to the Loans or the Letters of Credit or Hedge Letters of Credit to a
level below that which such Lender or such controlling corporation could have
achieved but for such adoption, effectiveness, phase-in, applicability, change
or compliance (taking into consideration the policies of such Lender or such
controlling corporation with regard to capital adequacy), then from time to
time, within five Business Days after receipt by Company from such Lender of the
statement referred to in the next sentence, Company shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to Lender under this Section 2.19(b), which statement
shall be conclusive and binding upon all parties hereto absent manifest error.
2.20 TAXES; WITHHOLDING, ETC.
(a) Payments to Be Free and Clear. All sums payable by any Credit
Party hereunder and under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of any Credit Party or by any federation or organization of which the
United States of America or any jurisdiction is a member at the time of payment
("INDEMNIFIED TAXES").
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(b) Withholding of Taxes. If any Credit Party or any other Person is
required by law to make any deduction or withholding on account of any
Indemnified Taxes from any sum paid or payable by any Credit Party to
Administrative Agent or any Lender (which term shall include Issuing Bank for
purposes of this Section 2.20(b)) under any of the Credit Documents: (i) Company
shall notify Administrative Agent of any such requirement or any change in any
such requirement as soon as Company becomes aware of it; (ii) Company shall pay
any Indemnified Taxes before the date on which penalties attach thereto, such
payment to be made (if the liability to pay is imposed on any Credit Party) for
its own account or (if that liability is imposed on Administrative Agent or such
Lender, as the case may be) on behalf of and in the name of Administrative Agent
or such Lender; (iii) the sum payable by such Credit Party in respect of which
the relevant deduction, withholding or payment of Indemnified Taxes is required
shall be increased to the extent necessary to ensure that, after the making of
that deduction, withholding or payment, Administrative Agent or such Lender, as
the case may be, receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been required or made;
and (iv) within thirty days after paying any sum from which it is required by
law to make any deduction or withholding of Indemnified Taxes, and within thirty
days after the due date of payment of any Indemnified Taxes which it is required
by clause (ii) above to pay, Company shall deliver to Administrative Agent
evidence satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant taxing or
other authority; provided, no such additional amount shall be required to be
paid to any Lender under clause (iii) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature pages
hereof on the Closing Date) or after the effective date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or payment as
is mentioned therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect at the date hereof or at the date of
such Assignment Agreement, as the case may be, in respect of payments to such
Lender.
(c) Treatment of Certain Refunds. If the Administrative Agent, a
Lender or the Issuing Bank determines, in its sole judgment, that it has
received a refund of any Taxes as to which it has been indemnified by Company or
with respect to which Company has paid additional amounts pursuant to this
Section 2.20, it shall pay to Company an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by Company
under this Section 2.20 with respect to the Taxes giving rise to such refund),
net of all out-of-pocket expenses of the Administrative Agent, such Lender or
the Issuing Bank, as the case may be, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund), provided that Company, upon the request of the Administrative Agent,
such Lender or the Issuing Bank, agrees to repay the amount paid over to Company
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent, such Lender or the Issuing
Bank in the event the
69
Administrative Agent, such Lender or the Issuing Bank is required to repay such
refund to such Governmental Authority. This paragraph shall not be construed to
require the Administrative Agent, any Lender or the Issuing Bank to make
available its tax returns (or any other information relating to its taxes that
it deems confidential) to Company or any other Person.
(d) Evidence of Exemption From Withholding Tax. Any Lender that is
entitled to an exemption from or reduction of withholding tax under the law of
the jurisdiction in which the relevant Credit Party is resident for tax
purposes, or any treaty to which such jurisdiction is a party, with respect to
payments hereunder or under any Loan Document shall deliver to such Credit Party
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law and reasonably requested by such Credit Party or the
Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender, if
requested by Company or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law and reasonably requested by Company
or the Administrative Agent to determine whether or not such Lender is subject
to backup withholding or information reporting requirements. Without limiting
any of the foregoing, each Lender that is not a United States Person (as such
term is defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S.
federal income tax purposes (a "NON-US LENDER") shall deliver to Administrative
Agent for transmission to Company, on or prior to the Closing Date (in the case
of each Lender listed on the signature pages hereof on the Closing Date) or on
or prior to the date of the Assignment Agreement pursuant to which it becomes a
Lender (in the case of each other Lender), and at such other times as may be
necessary in the determination of Company or Administrative Agent (each in the
reasonable exercise of its discretion), (i) two original copies of Internal
Revenue Service Form W-8BEN (claiming benefits under an applicable treaty) or
W-8ECI (or any successor forms), properly completed and duly executed by such
Lender, and such other documentation required under the Internal Revenue Code
and reasonably requested by Company to establish that such Lender is not subject
to deduction or withholding of United States federal income tax with respect to
any payments to such Lender of principal, interest, fees or other amounts
payable under any of the Credit Documents, or (ii) if such Lender is not a
"bank" or other Person described in Section 881(c)(3) of the Internal Revenue
Code and cannot deliver Internal Revenue Service Forms W-8BEN or W-8ECI pursuant
to clause (i) above, a Certificate re Non-Bank Status together with two original
copies of Internal Revenue Service Form W-8BEN (or any successor form), properly
completed and duly executed by such Lender, and such other documentation
required under the Internal Revenue Code and reasonably requested by Company to
establish that such Lender is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such Lender of
interest payable under any of the Credit Documents. Each Lender required to
deliver any forms, certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to this Section 2.20(d) hereby
agrees, from time to time after the initial delivery by such Lender of
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such forms, certificates or other evidence, whenever a lapse in time or change
in circumstances renders such forms, certificates or other evidence obsolete or
inaccurate in any material respect, that such Lender shall promptly deliver to
Administrative Agent for transmission to Company two new original copies of
Internal Revenue Service Form W-8BEN or W-8ECI, or a Certificate re Non-Bank
Status and two original copies of Internal Revenue Service Form W-8BEN (or any
successor form), as the case may be, properly completed and duly executed by
such Lender, and such other documentation required under the Internal Revenue
Code and reasonably requested by Company to confirm or establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to payments to such Lender under the Credit Documents,
or notify Administrative Agent and Company of its inability to deliver any such
forms, certificates or other evidence. Company shall not be required to pay any
additional amount to any Non-US Lender in respect of Indemnified Taxes under
Section 2.20(b) if such Lender shall have failed (1) to deliver the forms,
certificates or other evidence referred to in the second sentence of this
Section 2.20(d), or (2) to notify Administrative Agent and Company of its
inability to deliver any such forms, certificates or other evidence, as the case
may be; provided, if such Lender shall have satisfied the requirements of the
first sentence of this Section 2.20(d) on the Closing Date or on the date of the
Assignment Agreement pursuant to which it became a Lender, as applicable,
nothing in this last sentence of Section 2.20(d) shall relieve Company of its
obligation to pay any additional amounts in respect of Indemnified Taxes
pursuant this Section 2.20 in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or any change
in the interpretation, administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender is not subject to
withholding as described herein.
(e) To the extent required by any applicable law, the Administrative
Agent may withhold from any interest payment to any Lender an amount equivalent
to any applicable withholding tax. If any governmental authority asserts a claim
that the Administrative Agent did not properly withhold Tax from amounts paid to
or for the account of any Lender because the appropriate form was not delivered
or was not properly executed or because such Lender failed to notify the
Administrative Agent of a change in circumstance which rendered the exemption
from, or reduction of, withholding tax ineffective or for any other reason, such
Lender shall indemnify the Administrative Agent fully for all amounts paid,
directly or indirectly, by the Administrative Agent as Tax or otherwise,
including any penalties or interest and together with all expenses (including
legal expenses, allocated internal costs and out-of-pocket expenses) incurred.
2.21. OBLIGATION TO MITIGATE.
Each Lender (which term shall include Issuing Bank for purposes of this
Section 2.21) agrees that, as promptly as practicable after the officer of such
Lender responsible for
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administering its Loans or Letters of Credit or Hedge Letters of Credit, as the
case may be, becomes aware of the occurrence of an event or the existence of a
condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender to receive payments under Section 2.18, 2.19 or 2.20,
it will, to the extent not inconsistent with the internal policies of such
Lender and any applicable legal or regulatory restrictions, use reasonable
efforts to (a) make, issue, fund or maintain its Credit Extensions, including
any Affected Loans, through another office of such Lender, or (b) take such
other measures as such Lender may deem reasonable, if as a result thereof the
circumstances which would cause such Lender to be an Affected Lender would cease
to exist or the additional amounts which would otherwise be required to be paid
to such Lender pursuant to Section 2.18, 2.19 or 2.20 would be materially
reduced and if, as determined by such Lender in its sole discretion, the making,
issuing, funding or maintaining of such Revolving Commitments, Loans or Letters
of Credit or Hedge Letters of Credit through such other office or in accordance
with such other measures, as the case may be, would not otherwise adversely
affect such Revolving Commitments, Loans or Letters of Credit or Hedge Letters
of Credit or the interests of such Lender; provided, such Lender will not be
obligated to utilize such other office pursuant to this Section 2.21 unless
Company agrees to pay all incremental expenses incurred by such Lender as a
result of utilizing such other office as described in clause (i) above. A
certificate as to the amount of any such expenses payable by Company pursuant to
this Section 2.21 (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender to Company (with a copy to Administrative
Agent) shall be conclusive absent manifest error.
2.22. DEFAULTING LENDERS.
Anything contained herein to the contrary notwithstanding, in the event
that any Lender, other than at the direction or request of any regulatory agency
or authority, defaults (a "DEFAULTING LENDER") in its obligation to fund (a
"FUNDING DEFAULT") any Revolving Loan or Hedge L/C Loan or its portion of any
unreimbursed payment or participation obligations under Section 2.2(b)(iv),
2.4(d), 2.4(e) or 2.4(i) (in each case, a "DEFAULTED LOAN"), then (a) during any
Default Period with respect to such Defaulting Lender, such Defaulting Lender
shall be deemed not to be a "Lender" for purposes of voting on any matters
(including the granting of any consents or waivers) with respect to any of the
Credit Documents; (b) to the extent permitted by applicable law, until such time
as the Default Excess with respect to such Defaulting Lender shall have been
reduced to zero, (i) any voluntary prepayment of the Revolving Loans shall, if
Company so directs at the time of making such voluntary prepayment, be applied
to the Revolving Loans of other Lenders as if such Defaulting Lender had no
Revolving Loans outstanding and the Revolving Exposure of such Defaulting Lender
were zero, and (ii) any mandatory prepayment of the Revolving Loans shall, if
Company so directs at the time of making such mandatory prepayment, be applied
to the Revolving Loans of other Lenders (but not to the Revolving Loans of such
Defaulting Lender) as if such Defaulting Lender had funded all Defaulted Loans
of such Defaulting Lender, it being understood and agreed that Company
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shall be entitled to retain any portion of any mandatory prepayment of the
Revolving Loans that is not paid to such Defaulting Lender solely as a result of
the operation of the provisions of this clause (b); (c) such Defaulting Lender's
Revolving Commitment and outstanding Revolving Loans and such Defaulting
Lender's Pro Rata Share of the Letter of Credit Usage shall be excluded for
purposes of calculating the Revolving Commitment fee payable to Lenders in
respect of any day during any Default Period with respect to such Defaulting
Lender, and such Defaulting Lender shall not be entitled to receive any
Revolving Commitment fee pursuant to Section 2.11 with respect to such
Defaulting Lender's Revolving Commitment in respect of any Default Period with
respect to such Defaulting Lender; and (d) the Total Utilization of Revolving
Commitments as at any date of determination shall be calculated as if such
Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender. No
Revolving Commitment of any Lender shall be increased or otherwise affected,
and, except as otherwise expressly provided in this Section 2.22, performance by
Company of its obligations hereunder and the other Credit Documents shall not be
excused or otherwise modified as a result of any Funding Default or the
operation of this Section 2.22. The rights and remedies against a Defaulting
Lender under this Section 2.22 are in addition to other rights and remedies
which Company may have against such Defaulting Lender with respect to any
Funding Default and which Administrative Agent or any Lender may have against
such Defaulting Lender with respect to any Funding Default.
2.23. REMOVAL OR REPLACEMENT OF A LENDER.
Anything contained herein to the contrary notwithstanding, in the event
that: (a) (i) any Lender (an "INCREASED-COST LENDER") shall give notice to
Company that such Lender is an Affected Lender or that such Lender is entitled
to receive payments under Section 2.18, 2.19 or 2.20, (ii) the circumstances
which have caused such Lender to be an Affected Lender or which entitle such
Lender to receive such payments shall remain in effect, and (iii) such Lender
shall fail to withdraw such notice within five Business Days after Company's
request for such withdrawal; or (b) (i) any Lender shall become a Defaulting
Lender, (ii) the Default Period for such Defaulting Lender shall remain in
effect, and (iii) such Defaulting Lender shall fail to cure the default as a
result of which it has become a Defaulting Lender within five Business Days
after Company's request that it cure such default; or (c) in connection with any
proposed amendment, modification, termination, waiver or consent with respect to
any of the provisions hereof as contemplated by Section 10.5(b), the consent of
Requisite Lenders shall have been obtained but the consent of one or more of
such other Lenders (each a "NON-CONSENTING LENDER") whose consent is required
shall not have been obtained; then, with respect to each such Increased-Cost
Lender, Defaulting Lender or Non-Consenting Lender (the "TERMINATED LENDER"),
Company may, by giving written notice to Administrative Agent and any Terminated
Lender of its election to do so, elect to cause such Terminated Lender (and such
Terminated Lender hereby irrevocably agrees) to assign its outstanding Loans,
its Revolving Commitments, and its Hedge L/C Commitment, if any, in full to one
or more Eligible Assignees (each a "REPLACEMENT LENDER") in accordance with the
provisions of Section 10.6 and Terminated
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Lender shall pay any fees payable thereunder in connection with such assignment;
provided, (1) on the date of such assignment, the Replacement Lender shall pay
to Terminated Lender an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the
Terminated Lender, (B) an amount equal to all unreimbursed drawings that have
been funded by such Terminated Lender, together with all then unpaid interest
with respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid fees owing to such Terminated Lender pursuant to Section
2.11; (2) on the date of such assignment, Company shall pay any amounts payable
to such Terminated Lender pursuant to Section 2.18(c), 2.19 or 2.20; or
otherwise as if it were a prepayment and (3) in the event such Terminated Lender
is a Non-Consenting Lender, each Replacement Lender shall consent, at the time
of such assignment, to each matter in respect of which such Terminated Lender
was a Non-Consenting Lender; provided, Company may not make such election with
respect to any Terminated Lender that is also an Issuing Bank unless, prior to
the effectiveness of such election, Company shall have caused each outstanding
Letter of Credit or Hedge Letter of Credit, as applicable, issued thereby to be
cancelled. Upon the prepayment of all amounts owing to any Terminated Lender and
the termination of such Terminated Lender's Revolving Commitments, if any, such
Terminated Lender shall no longer constitute a "Lender" for purposes hereof;
provided, any rights of such Terminated Lender to indemnification hereunder
shall survive as to such Terminated Lender.
SECTION 3. CONDITIONS PRECEDENT
3.1. CLOSING DATE.
The obligation of any Lender to make a Credit Extension on the Closing
Date is subject to the satisfaction, or waiver in accordance with Section 10.5,
of the following conditions on or before the Closing Date:
(a) Credit Documents. Administrative Agent shall have received
sufficient copies of each Credit Document originally executed and delivered by
each applicable Credit Party for each Lender.
(b) Organizational Documents; Incumbency. Administrative Agent shall
have received (i) sufficient copies of each Organizational Document executed and
delivered by each Credit Party, as applicable, and, to the extent applicable,
certified as of a recent date by the appropriate governmental official, for each
Lender, each dated the Closing Date or a recent date prior thereto; (ii)
signature and incumbency certificates of the officers of such Person executing
the Credit Documents to which it is a party; (iii) resolutions of the Board of
Directors or similar governing body of each Credit Party approving and
authorizing the execution, delivery and performance of this Agreement and the
other Credit Documents and the Related Agreements to which it is a party or by
which it or its assets may be bound as of the Closing Date, certified as of
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the Closing Date by its secretary or an assistant secretary as being in full
force and effect without modification or amendment; (iv) a good standing
certificate from the applicable Governmental Authority of each Credit Party's
jurisdiction of incorporation, organization or formation and in each
jurisdiction in which it is qualified as a foreign corporation or other entity
to do business, each dated a recent date prior to the Closing Date; and (v) such
other documents as Administrative Agent may reasonably request.
(c) Organizational and Capital Structure. The organizational
structure and capital structure of Company and its Subsidiaries, both before and
after giving effect to the Merger, shall be as set forth on Schedules 4.1 and
4.2.
(d) Capitalization of Company. On or before the Closing Date:
(i) Company shall have received the gross proceeds from the
issuance of the Senior Secured Notes in an aggregate amount in cash of not
less than $192,500,000; and
(ii) Company shall have received the gross proceeds from the
Sponsor of equity contributions in an aggregate amount not less than
$77,500,000.
(e) Consummation of Transactions Contemplated by Related Agreements.
(i) (1) All conditions to the transactions contemplated by
each of the Related Agreements shall have been satisfied or the
fulfillment of any such conditions shall have been waived with the consent
of Syndication Agent and Administrative Agent, (2) the Acquisition shall
have become effective in accordance with the terms of the Merger Agreement
and (3) the aggregate cash consideration paid to the selling shareholders
in connection with the Acquisition shall not exceed $115,000,000.
(ii) Syndication Agent and Administrative Agent shall each
have received a fully executed or conformed copy of each Related Agreement
and any documents executed in connection therewith, together with copies
of each of the opinions of counsel delivered to the parties under the
Related Agreements, accompanied by a letter from each such counsel (to the
extent not inconsistent with such counsel's established internal policies)
authorizing Lenders to rely upon such opinion to the same extent as though
it were addressed to Lenders. Each Related Agreement shall be in full
force and effect, shall include terms and provisions reasonably
satisfactory to Administrative Agent and Syndication Agent and no
provision thereof shall have been modified or waived in any respect
determined by Syndication Agent or Administrative Agent to be material, in
each case without the consent of Syndication Agent and Administrative
Agent.
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(f) Existing Indebtedness. On the Closing Date, Company and its
Subsidiaries shall have (i) repaid in full all Existing Indebtedness, except for
any amounts of the Existing Subordinated Notes not tendered as of the Closing
Date (the "UNPAID REFINANCING AMOUNT"), (ii) terminated any commitments to lend
or make other extensions of credit thereunder, (iii) delivered to Syndication
Agent and Administrative Agent a payoff letter with respect to the Indebtedness
described in clause (i) of the definition of Existing Indebtedness releasing all
Liens securing such Indebtedness and made arrangements satisfactory to the
Administrative Agent for the delivery of all documents or instruments necessary
to terminate of record all Liens securing such Existing Indebtedness, and (iv)
made arrangements satisfactory to Syndication Agent and Administrative Agent
with respect to the cancellation of any letters of credit outstanding thereunder
or the issuance of Letters of Credit to support the obligations of Company and
its Subsidiaries with respect thereto.
(g) Transaction Costs. On or prior to the Closing Date, Company
shall have delivered to Administrative Agent Company's reasonable best estimate
of the Transactions Costs (other than fees payable to any Agent).
(h) Governmental Authorizations and Consents. Each Credit Party
shall have obtained all Governmental Authorizations (other than the filing of
UCC financing statements and the Mortgages) and all consents of other Persons,
in each case that are necessary in connection with the transactions contemplated
by the Credit Documents and the Related Agreements and each of the foregoing
shall be in full force and effect and in form and substance reasonably
satisfactory to Syndication Agent and Administrative Agent. All applicable
waiting periods shall have expired without any action being taken or threatened
by any competent authority which would restrain, prevent or otherwise impose
adverse conditions on the transactions contemplated by the Credit Documents or
the Related Agreements or the financing thereof and no action, request for stay,
petition for review or rehearing, reconsideration, or appeal with respect to any
of the foregoing shall be pending, and the time for any applicable agency to
take action to set aside its consent on its own motion shall have expired.
(i) Real Estate Assets; Hydrocarbon Interests. In order to create in
favor of Collateral Trustee, for the benefit of Secured Parties, a valid and,
subject to any filing and/or recording referred to herein, perfected First
Priority security interest in certain Real Estate Assets and certain Hydrocarbon
Interests, Collateral Trustee shall have received from Company and each
applicable Guarantor:
(i) fully executed and notarized Mortgages, in proper form for
recording in all appropriate places in all applicable jurisdictions,
encumbering each Real Estate Asset listed in Schedule 3.1(i) (each, a
"CLOSING DATE MORTGAGED PROPERTY") and each Hydrocarbon Interest listed on
Schedule 3.1(i), which Hydrocarbon Interests shall represent no less than
87.5% of the Proved Developed Producing Reserves of the
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Company and the Guarantor Subsidiaries as of the Closing Date, including
no less than 66% of the Proved Reserves of Company and the Guarantor
Subsidiaries as of the Closing Date (as valued based on the reserve report
(Job #:04.780) effective as of January 1, 2004 using a 10% present value
discount rate and excluding the TBR Assets);
(ii) (a) an opinion of counsel (which counsel shall be
reasonably satisfactory to Administrative Agent) in each state in which a
Closing Date Mortgaged Property is located with respect to the
enforceability of the form(s) of Mortgages to be recorded in such state
and such other matters as Administrative Agent may reasonably request, in
each case in form and substance reasonably satisfactory to Administrative
Agent and (b) bring-downs of title opinions previously delivered to
Company or its predecessors with respect to fifty (50) (or such lesser
number as the Administrative Agent may approve) of Company's and
Guarantors' wells previously identified by the Administrative Agent in
writing to Company in form and substance reasonably satisfactory to
Administrative Agent;
(iii) [Reserved];
(iv) (a) ALTA mortgagee title insurance policies or
unconditional commitments therefor issued by one or more title companies
reasonably satisfactory to Administrative Agent with respect to each
Closing Date Mortgaged Property (each, a "TITLE POLICY"), in amounts not
less than the fair market value of each Closing Date Mortgaged Property,
together with a title report issued by a title company with respect
thereto, dated not more than thirty days prior to the Closing Date and
copies of all recorded documents listed as exceptions to title or
otherwise referred to therein, each in form and substance reasonably
satisfactory to Administrative Agent and (B) evidence satisfactory to
Administrative Agent that such Credit Party has paid to the title company
or to the appropriate governmental authorities all expenses and premiums
of the title company and all other sums required in connection with the
issuance of each Title Policy, with respect to each Closing Date Mortgaged
Property, and all recording and stamp taxes (including mortgage recording
and intangible taxes) payable in connection with recording the Mortgages
for each Closing Date Mortgaged Property in the appropriate real estate
records;
(v) evidence of flood insurance with respect to each Flood
Hazard Property that is located in a community that participates in the
National Flood Insurance Program, in each case in compliance with any
applicable regulations of the Board of Governors of the Federal Reserve
System, in form and substance reasonably satisfactory to Administrative
Agent; and
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(vi) ALTA surveys of all Closing Date Mortgaged Properties
which are not Leasehold Properties, certified to Collateral Trustee and
dated not more than thirty days prior to the Closing Date.
(j) Personal Property Collateral. In order to create in favor of
Collateral Trustee, for the benefit of Secured Parties, a valid, perfected First
Priority security interest in the personal property Collateral, Collateral
Trustee shall have received:
(i) evidence satisfactory to Collateral Trustee of the
compliance by each Credit Party with its obligations under the Pledge and
Security Agreement and the other Collateral Documents (including, without
limitation, their obligations to execute and deliver UCC financing
statements, deliver originals of certificated securities, instruments and
chattel paper, and execute and deliver control agreements with respect to
deposit and/or securities accounts as provided therein);
(ii) a completed Collateral Questionnaire dated the Closing
Date and executed by an Authorized Officer of each Credit Party, together
with all attachments contemplated thereby, including (A) the results of a
recent search, by a Person satisfactory to Administrative Agent, of all
effective UCC financing statements (or equivalent filings) made with
respect to any personal or mixed property of any Credit Party in the
jurisdictions specified in the Collateral Questionnaire, together with
copies of all such filings disclosed by such search, and (B) UCC
termination statements (or similar documents) duly authorized by all
applicable Persons for filing in all applicable jurisdictions as may be
necessary to terminate any effective UCC financing statements (or
equivalent filings) disclosed in such search (other than any such
financing statements in respect of Permitted Liens);
(iii) opinions of counsel (which counsel shall be reasonably
satisfactory to Administrative Agent) with respect to the creation and
perfection of the security interests in favor of Collateral Trustee in
such Collateral and such other matters governed by the laws of each
jurisdiction in which any Credit Party or any personal property Collateral
is located as Administrative Agent may reasonably request, in each case in
form and substance reasonably satisfactory to Administrative Agent; and
(iv) evidence that each Credit Party shall have taken or
caused to be taken any other action, executed and delivered or caused to
be executed and delivered any other agreement, document and instrument and
made or caused to be made any other filing and recording (other than as
set forth herein) reasonably required by Administrative Agent.
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(k) Environmental Reports. Syndication Agent and Administrative
Agent shall have received the GaiaTech Report and a reliance letter authorizing
reliance by Administrative Agent on the GaiaTech Report.
(l) Financial Statements; Projections; Loan to Value. Lenders shall
have received from Company (i) the Historical Financial Statements, (ii) pro
forma consolidated balance sheets of Company and its Subsidiaries as at the
Closing Date, and reflecting the consummation of the Acquisition, the
transactions contemplated by the Swap Agreement, the related financings and the
other transactions contemplated by the Credit Documents to occur on or prior to
the Closing Date, which pro forma financial statements shall be in form and
substance satisfactory to Administrative Agent and Syndication Agent, (iii) the
Projections and (iv) a certificate from the chief financial officer of Company
certifying that the proceeds of the Term Loans shall account for no more than
25% of the value of the total Proved Reserves of Company and its Subsidiaries
(based on the Wright & Company reserve report effective as of April 1, 2004
which excludes the TBR Assets).
(m) Evidence of Insurance. Administrative Agent shall have received
a certificate from Company's insurance broker or other evidence satisfactory to
it that all insurance required to be maintained pursuant to Section 5.5 is in
full force and effect, together with endorsements naming the Collateral Trustee,
for the benefit of the Secured Parties, as additional insured and loss payee
thereunder to the extent required under Section 5.5.
(n) Opinions of Counsel to Credit Parties. Lenders and their
respective counsel shall have received originally executed copies of the
favorable written opinions of each of (i) Vinson & Elkins LLP, New York counsel,
(ii) Andrews Kurth LLP, Texas counsel, (iii) Bricker & Eckler LLP, Ohio counsel,
(iv) Dickinson Wright PLLC, Michigan counsel, and (v) Culbertson, Weiss,
Schetroma and Schug, P.C., Pennsylvania counsel, each respectively in the form
of Exhibit D, covering, among other things and as applicable, the matters
referred to in Section 3.1(i)(ii) and 3.1(j(iii), and such other matters as
Administrative Agent or Syndication Agent may reasonably request, dated as of
the Closing Date and otherwise in form and substance reasonably satisfactory to
Administrative Agent and Syndication Agent (and each Credit Party hereby
instructs such counsel to deliver such opinions to Agents and Lenders).
(o) Fees. Company shall have paid to Syndication Agent and
Administrative Agent the fees payable on the Closing Date referred to in Section
2.11(d).
(p) Solvency Certificate. On the Closing Date, Syndication Agent and
Administrative Agent shall have received a Solvency Certificate from the chief
financial officer of Company dated the Closing Date, with appropriate
attachments and demonstrating that after giving effect to the consummation of
the Acquisition, Company and its Subsidiaries are and will be Solvent.
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(q) Closing Date Certificate. Company shall have delivered to
Syndication Agent and Administrative Agent an originally executed Closing Date
Certificate, together with all attachments thereto.
(r) Credit Rating. The credit facilities provided for under this
Agreement shall have been assigned a credit rating by either S&P and/or Moody's.
(s) Closing Date. Lenders shall have made the Term Loans to Company
on or before July 31, 2004.
(t) No Litigation. There shall not exist any action, suit,
investigation, litigation or proceeding, pending or threatened in any court or
before any arbitrator or Governmental Authority that, in the reasonable opinion
of Administrative Agent and Syndication Agent, singly or in the aggregate,
materially impairs the Acquisition, the financing thereof or any of the other
transactions contemplated by the Credit Documents or the Related Agreements, or
that could reasonably be expected to have a Material Adverse Effect.
(u) Completion of Proceedings. All partnership, corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent or Syndication Agent and its counsel shall be
satisfactory in form and substance to Administrative Agent and Syndication Agent
and such counsel, and Administrative Agent, Syndication Agent and such counsel
shall have received all such counterpart originals or certified copies of such
documents as Administrative Agent or Syndication Agent may reasonably request.
Each Lender, by delivering its signature page to this Agreement and funding a
Loan on the Closing Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document and each other document required
to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date.
3.2. CONDITIONS TO EACH CREDIT EXTENSION.
(a) Conditions Precedent. The obligation of each Lender to make any
Loan, or Issuing Bank to issue any Letter of Credit or Hedge Letter of Credit,
on any Credit Date, including the Closing Date, are subject to the satisfaction,
or waiver in accordance with Section 10.5, of the following conditions
precedent:
(i) Administrative Agent shall have received a fully executed
and delivered Funding Notice or Issuance Notice, as the case may be;
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(ii) after making the Credit Extensions requested on such
Credit Date, (A) the Total Utilization of Revolving Commitments shall not
exceed the aggregate Revolving Commitments then in effect and (B) the
Total Utilization of Hedge L/C Commitments shall not exceed the aggregate
Hedge L/C Commitments then in effect;
(iii) as of such Credit Date, the representations and
warranties of the Credit Parties contained herein and in the other Credit
Documents shall be true and correct in all material respects on and as of
that Credit Date to the same extent as though made on and as of that date,
except to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects on
and as of such earlier date;
(iv) as of such Credit Date, no event shall have occurred and
be continuing or would result from the consummation of the applicable
Credit Extension that would constitute an Event of Default or a Default;
(v) on or before the date of issuance of any Letter of Credit
or Hedge Letter of Credit, Administrative Agent shall have received all
other information required by the applicable Issuance Notice, and such
other documents or information as Issuing Bank may reasonably require in
connection with the issuance of such Letter of Credit or Hedge Letter of
Credit; and
(vi) as of such Credit Date, the Leverage Ratio determined as
of such date after giving effect to the contemplated Credit Extension
shall not exceed the maximum Leverage Ratio permitted as of the last day
of the immediately succeeding Fiscal Quarter pursuant to Section 6.8; and
(viii) after giving effect to such Credit Extension, the
aggregate Cash and Cash Equivalents of Company and its subsidiaries will
not exceed $5,000,000; provided, however, this clause (viii) shall not be
applicable (i) to any Credit Extension constituting the Term Loan, any
Hedge Letter of Credit or any Letter of Credit and (ii) with respect to
Revolving Loans, if the Administrative Agent shall have received,
concurrently with the Funding Notice, a certificate from a Financial
Officer of the Company certifying that the proceeds of such Credit
Extension shall be used in accordance with Section 2.6 within thirty (30)
days of the proposed Credit Date.
Any Agent or Requisite Lenders shall be entitled, but not obligated to, request
and receive, prior to the making of any Credit Extension, additional information
reasonably satisfactory to the requesting party confirming the satisfaction of
any of the foregoing if, in the good faith judgment of such Agent or Requisite
Lender such request is warranted under the circumstances.
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(b) Notices. Any Notice shall be executed by an Authorized Officer
in a writing delivered to Administrative Agent. In lieu of delivering a Notice,
Company may give Administrative Agent telephonic notice by the required time of
any proposed borrowing, conversion/continuation or issuance of a Letter of
Credit or the Hedge Letter of Credit, as the case may be; provided each such
notice shall be promptly confirmed in writing by delivery of the applicable
Notice to Administrative Agent on or before the applicable date of borrowing,
continuation/conversion or issuance. Neither Administrative Agent nor any Lender
shall incur any liability to Company in acting upon any telephonic notice
referred to above that Administrative Agent believes in good faith to have been
given by a duly authorized officer or other person authorized on behalf of
Company or for otherwise acting in good faith.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and Issuing Bank to enter into this Agreement
and to make each Credit Extension to be made thereby, each Credit Party
represents and warrants to each Lender and Issuing Bank, on the Closing Date and
on each Credit Date, that the following statements are true and correct (it
being understood and agreed that the representations and warranties made on the
Closing Date are deemed to be made concurrently with the consummation of the
Acquisition and other transactions contemplated by Related Agreements):
4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION.
Each of Company and its Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
as identified in Schedule 4.1, (b) has all requisite power and authority to own
and operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Credit Documents to which it is a
party and to carry out the transactions contemplated thereby, and (c) is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing has not had, and could not be reasonably expected to have, a
Material Adverse Effect.
4.2. CAPITAL STOCK AND OWNERSHIP.
The Capital Stock of each of Company and its Subsidiaries has been duly
authorized and validly issued and is fully paid and non-assessable. As of the
Closing Date, except as set forth on Schedule 4.2, there is no existing option,
warrant, call, right, commitment or other agreement to which Company or any of
its Subsidiaries is a party requiring, and there is no membership interest or
other Capital Stock of Company or any of its Subsidiaries outstanding which upon
conversion or exchange would require, the issuance by Company or any of its
Subsidiaries of any additional membership interests or other Capital Stock of
Company or any of its Subsidiaries or other Securities convertible into,
exchangeable for or evidencing the right to
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subscribe for or purchase, a membership interest or other Capital Stock of
Company or any of its Subsidiaries. Schedule 4.2 correctly sets forth the
ownership interest of Company and each of its Subsidiaries in their respective
Subsidiaries as of the Closing Date both before and after giving effect to the
Acquisition.
4.3. DUE AUTHORIZATION.
The execution, delivery and performance of the Credit Documents have been
duly authorized by all necessary action on the part of each Credit Party that is
a party thereto.
4.4. NO CONFLICT.
The execution, delivery and performance by Credit Parties of the Credit
Documents to which they are parties and the consummation of the transactions
contemplated by the Credit Documents do not and will not (a) violate any
provision of any law or any governmental rule or regulation applicable to
Company or any of its Subsidiaries, any of the Organizational Documents of
Company or any of its Subsidiaries, or any order, judgment or decree of any
court or other agency of government binding on Company or any of its
Subsidiaries; (b) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
Company or any of its Subsidiaries, except to the extent such conflict or breach
could not reasonably be expected to have a Material Adverse Effect; (c) result
in or require the creation or imposition of any Lien upon any of the properties
or assets of Company or any of its Subsidiaries (other than any Liens created
under any of the Credit Documents in favor of Collateral Agent, on behalf of
Secured Parties); or (d) require any approval of stockholders, members or
partners or any approval or consent of any Person under any Contractual
Obligation of Company or any of its Subsidiaries, except for such approvals or
consents which will be obtained on or before the Closing Date and disclosed in
writing to Lenders and except for any approval, the failure to obtain of which
could not reasonably be expected to have a Material Adverse Effect.
4.5. GOVERNMENTAL CONSENTS.
The execution, delivery and performance by Credit Parties of the Credit
Documents to which they are parties and the consummation of the transactions
contemplated by the Credit Documents do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any Governmental Authority except as otherwise set forth in the
Merger Agreement, and except for filings and recordings with respect to the
Collateral to be made, or otherwise delivered to Collateral Trustee for filing
and/or recordation, as of and after the Closing Date, and routine filings
required to be made in the ordinary course of business pursuant to the
requirements of applicable law.
4.6. BINDING OBLIGATION.
Each Credit Document has been duly executed and delivered by each Credit
Party that is a party thereto and is the legally valid and binding obligation of
such Credit Party, enforceable
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against such Credit Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
4.7. HISTORICAL FINANCIAL STATEMENTS.
The Historical Financial Statements were prepared in conformity with GAAP
and fairly present, in all material respects, the financial position, on a
consolidated basis, of Company and its Subsidiaries as at the respective dates
thereof and the results of operations and cash flows, on a consolidated basis,
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments. As of the Closing Date, neither
Company nor any of its Subsidiaries has any contingent liability or liability
for taxes, long-term lease or unusual forward or long-term commitment that is
not reflected in the Historical Financial Statements or the notes thereto and
which in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
and any of its Subsidiaries taken as a whole.
4.8. PROJECTIONS.
On and as of the Closing Date, the Projections of Company and its
Subsidiaries for the period Fiscal Year 2004 through and including Fiscal Year
2011 (the "PROJECTIONS") are based on good faith estimates and assumptions made
by the management of Company; provided, the Projections are not to be viewed as
facts and that actual results during the period or periods covered by the
Projections may differ from such Projections and that the differences may be
material; provided further, as of the Closing Date, management of Company
believed that the Projections were reasonable.
4.9. NO MATERIAL ADVERSE CHANGE.
Since December 31, 2003, no event, circumstance or change has occurred
that has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect.
4.10. NO RESTRICTED JUNIOR PAYMENTS.
Other than the purchase of the Existing Subordinated Notes that have been
tendered to Company on or prior to the Closing Date, since December 31, 2003,
neither Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted pursuant to Section 6.5.
4.11. NO RESERVE WRITE-DOWNS.
As of the Closing Date and since December 31, 2003, Company has not
reduced the volume of its reserves by more than 5% excluding reserves sold
pursuant to sales previously disclosed to the Administrative Agent prior to the
Closing Date.
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4.12. ADVERSE PROCEEDINGS, ETC.
There are no Adverse Proceedings, individually or in the aggregate, that
could reasonably be expected to have a Material Adverse Effect. Neither Company
nor any of its Subsidiaries (a) is in violation of any applicable laws
(including Environmental Laws) that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, or (b) is subject to
or in default with respect to any final judgments, writs, injunctions, decrees,
rules or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
4.13. PAYMENT OF TAXES.
Except as described on Schedule 4.13, and except as otherwise permitted
under Section 5.3, all tax returns and reports of Company and its Subsidiaries
required to be filed by any of them have been timely filed (taking into account
any extensions), and all taxes shown on such tax returns to be due and payable
and all material assessments, fees and other governmental charges upon Company
and its Subsidiaries and upon their respective properties, assets, income,
businesses and franchises which are due and payable have been paid when due and
payable. Company knows of no proposed tax assessment against Company or any of
its Subsidiaries which is not being actively contested by Company or such
Subsidiary in good faith and by appropriate proceedings; provided, such reserves
or other appropriate provisions, if any, as shall be required in conformity with
GAAP shall have been made or provided therefor.
4.14. PROPERTIES.
(a) Title. Each of Company and its Subsidiaries has (i) good, sufficient
and legal title to (in the case of fee interests in real property), (ii) valid
leasehold interests in (in the case of leasehold interests in real or personal
property), and (iii) good title to (in the case of all other personal property),
all of their respective properties and assets reflected in their respective
Historical Financial Statements referred to in Section 4.5 and in the most
recent financial statements delivered pursuant to Section 5.1, in each case
except for (a) assets disposed of since the date of such financial statements
pursuant to (x) the Letter Agreement, dated June 14, 2004, by and between
Company and Fortuna Energy, Inc. or (y) the Asset Purchase Agreement dated as of
May 12, 2004, between Arrow Energy Services and Canton Oil & Gas Company, (b)
assets disposed of since the date of such financial statements in the ordinary
course of business or as otherwise permitted under Section 6.9, (c) Permitted
Liens and (d) with respect to Oil and Gas Properties, such imperfections of
title which do not in the aggregate materially detract from the value thereof
to, or the use thereof in, the business of Company or any of its Subsidiaries.
All such properties and assets are free and clear of Liens except Permitted
Liens.
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(b) Real Estate. As of the Closing Date, Schedule 4.14 contains a
true, accurate and complete list of (i) all Material Real Estate Assets, (ii)
all leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
each Material Real Estate Asset of any Credit Party, regardless of whether such
Credit Party is the landlord or tenant (whether directly or as an assignee or
successor in interest) under such lease, sublease or assignment and (iii) the
working interest and net revenue interest in each Hydrocarbon Interest of each
Credit Party. Each agreement listed in clause (ii) of the immediately preceding
sentence is in full force and effect and Company does not have knowledge of any
default that has occurred and is continuing thereunder, and each such agreement
constitutes the legally valid and binding obligation of each applicable Credit
Party, enforceable against such Credit Party in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles. As of the Closing Date, with respect to each
Hydrocarbon Interest set forth on Schedule 4.14, each Credit Party has a net
revenue interest no less than the net revenue interest set forth on such
Schedule.
4.15. ENVIRONMENTAL MATTERS.
Neither Company nor any of its Subsidiaries nor any of their respective
Facilities or operations are subject to any outstanding written order, consent
decree or settlement agreement with any Person relating to any Environmental
Law, any Environmental Claim, or any Hazardous Materials Activity that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Neither Company nor any of its Subsidiaries has
received any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
Section 9604) or any comparable state law that relates to an actual or potential
Environmental Claim or other liability that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. There are and,
to each of Company's and its Subsidiaries' knowledge, have been, no conditions,
occurrences, or Hazardous Materials Activities on, under or adjacent to,
Facilities or Oil and Gas Properties, which could reasonably be expected to form
the basis of an Environmental Claim against Company or any of its Subsidiaries
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Neither Company nor any of its Subsidiaries nor, to any
of Company and its Subsidiaries' knowledge, any predecessor of Company or any of
its Subsidiaries has filed any notice under any Environmental Law indicating
past or present treatment of Hazardous Materials at any Facility, and none of
Company's or any of its Subsidiaries' operations involves the generation,
transportation, treatment or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state equivalent, except where doing so could not
reasonably be expected to have a Material Adverse Effect. Compliance with all
current or reasonably foreseeable future requirements pursuant to or under
Environmental Laws could not be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect and no event or condition has occurred
or is occurring with
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respect to Company or any of its Subsidiaries relating to any Environmental Law,
any Release of Hazardous Materials, or any Hazardous Materials Activity which
individually or in the aggregate has had, or could reasonably be expected to
have, a Material Adverse Effect.
4.16. NO DEFAULTS.
Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists which, with the giving of notice or the lapse of time or both, could
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, could not reasonably be expected to have a
Material Adverse Effect.
4.17. MATERIAL CONTRACTS.
Schedule 4.17 contains a true, correct and complete list of all the
Material Contracts in effect on the Closing Date, and except as described
thereon, all such Material Contracts are in full force and effect and no
defaults currently exist thereunder, except where the consequences, direct or
indirect, of such default or defaults, if any, could not reasonably be expected
to have a Material Adverse Effect.
4.18. GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable. Neither
Company nor any of its Subsidiaries is a "registered investment company" or a
company "controlled" by a "registered investment company" or a "principal
underwriter" of a "registered investment company" as such terms are defined in
the Investment Company Act of 1940.
4.19. MARGIN STOCK.
Neither Company nor any of its Subsidiaries is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock. No part of the proceeds of
the Loans made to such Credit Party will be used to purchase or carry any such
margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock or for any purpose that violates, or is
inconsistent with, the provisions of Regulation T, U or X of said Board of
Governors.
4.20. EMPLOYEE MATTERS.
Neither Company nor any of its Subsidiaries is engaged in any unfair labor
practice that could reasonably be expected to have a Material Adverse Effect.
There is (a) no unfair labor practice complaint pending against Company or any
of its Subsidiaries, or to the best knowledge of Company, threatened against any
of them before the National Labor Relations Board and no
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grievance or arbitration proceeding arising out of or under any collective
bargaining agreement that is so pending against Company or any of its
Subsidiaries or to the best knowledge of Company, threatened against any of
them, (b) no strike or work stoppage in existence or threatened involving
Company or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect, and (c) to the best knowledge of Company, no union
representation question existing with respect to the employees of Company or any
of its Subsidiaries and, to the best knowledge of Company, no union organization
activity that is taking place, except (with respect to any matter specified in
clause (a), (b) or (c) above, either individually or in the aggregate) such as
is not reasonably likely to have a Material Adverse Effect.
4.21. EMPLOYEE BENEFIT PLANS.
Company, each of its Subsidiaries and each of their respective ERISA
Affiliates are in compliance in all material respects with all applicable
provisions and requirements of ERISA and the Internal Revenue Code and the
regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed in all material respects their
obligations under each Employee Benefit Plan. Each Employee Benefit Plan which
is intended to qualify under Section 401(a) of the Internal Revenue Code has
received a favorable determination letter from the Internal Revenue Service
indicating that such Employee Benefit Plan is so qualified and nothing has
occurred subsequent to the issuance of such determination letter which would
cause such Employee Benefit Plan to lose its qualified status. No material
liability to the PBGC (other than required premium payments), the Internal
Revenue Service, any Employee Benefit Plan or any trust established under Title
IV of ERISA has been or is expected to be incurred by Company, any of its
Subsidiaries or any of their ERISA Affiliates. No ERISA Event has occurred or is
reasonably expected to occur. Except to the extent required under Section 4980B
of the Internal Revenue Code or similar state laws, no Employee Benefit Plan
provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates. The present value of
the aggregate benefit liabilities under each Pension Plan sponsored, maintained
or contributed to by Company, any of its Subsidiaries or any of their ERISA
Affiliates (determined as of the end of the most recent plan year on the basis
of the actuarial assumptions specified for funding purposes in the most recent
actuarial valuation for such Pension Plan), did not exceed the aggregate current
value of the assets of such Pension Plan. As of the most recent valuation date
for each Multiemployer Plan for which the actuarial report is available, the
potential liability of Company, its Subsidiaries and their respective ERISA
Affiliates for a complete withdrawal from such Multiemployer Plan (within the
meaning of Section 4203 of ERISA), when aggregated with such potential liability
for a complete withdrawal from all Multiemployer Plans, based on information
available pursuant to Section 4221(e) of ERISA is zero. Company, each of its
Subsidiaries and each of their ERISA Affiliates have complied with the
requirements of Section 515 of ERISA with respect to each
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Multiemployer Plan and are not in material "default" (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan.
4.22. CERTAIN FEES.
No broker's or finder's fee or commission will be payable with respect
hereto or any of the transactions contemplated hereby, other than (i) the
transaction fees payable pursuant to the Transaction Advisory Agreement, dated
June 27, 1997 between certain of the sellers under the Merger Agreement and
Company, (ii) a fee to the Sponsor on the Closing Date equal to $1,415,105 and
(iii) the fees to Randall & Dewey.
4.23. SOLVENCY.
Each Credit Party is and, upon the incurrence of any Obligation by such
Credit Party on any date on which this representation and warranty is made, will
be, Solvent.
4.24. RELATED AGREEMENTS.
(a) Delivery. Company has delivered to Syndication Agent and
Administrative Agent complete and correct copies of (i) each Related Agreement
and of all exhibits and schedules thereto as of the date hereof and (ii) copies
of any material amendment, restatement, supplement or other modification to or
waiver of each Related Agreement entered into after the date hereof.
(b) Representations and Warranties. Except to the extent otherwise
expressly set forth herein or in the schedules hereto, and subject to the
qualifications set forth therein, each of the representations and warranties
given by any Credit Party in any Related Agreement is true and correct in all
material respects as of the Closing Date (or as of any earlier date to which
such representation and warranty specifically relates). Notwithstanding anything
in the Related Agreement to the contrary, the representations and warranties of
each Credit Party set forth in this Section 4.24 shall, solely for purposes
hereof, survive the Closing Date for the benefit of Lenders.
(c) Governmental Approvals. All Governmental Authorizations and all
other authorizations, approvals and consents of any other Person required by the
Related Agreements or to consummate the Acquisition and other transactions
contemplated by the Related Agreements have been obtained and are in full force
and effect, except for (i) filings and recordings with respect to the Collateral
to be made on or after the Closing Date, (ii) routine filings required to be
made in the ordinary course of business pursuant to the requirements of
applicable law, and (iii) consents, the failure to obtain of which would not
reasonably be expected to have a Material Adverse Effect.
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(d) Conditions Precedent. On the Closing Date, (i) all of the
conditions to effecting or consummating the Acquisition and other transactions
contemplated by the Related Agreements have been duly satisfied or, with the
consent of Administrative Agent and Syndication Agent, waived, and (ii) the
Acquisition and other transactions contemplated by the Related Agreements has
been consummated in accordance with the Related Agreements and all applicable
laws.
4.25. COMPLIANCE WITH STATUTES, ETC.
Each of Company and its Subsidiaries is in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all Governmental Authorities, in respect of the conduct of its business and the
ownership of its property (including compliance with all applicable
Environmental Laws), except such non-compliance that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
4.26. FUTURE COMMITMENTS.
Except with respect to gas imbalances, take-or-pay or other prepayments
with respect to any Oil and Gas Property of Company or any of its Subsidiaries
which would require Company or any of its Subsidiaries either (a) to deliver
Hydrocarbons produced from Oil and Gas Properties or (b) to make cash
settlements for such products with a value not in excess of $1,000,000, on a net
basis there are no gas imbalances, take-or-pay or other prepayments with respect
to any Oil and Gas Property of Company or any of its Subsidiaries or any cash
settlement for such products at some future time without then or thereafter
receiving full payment therefor.
4.27. DISCLOSURE.
No representation or warranty of any Credit Party contained in any Credit
Document or in any other documents, certificates or written statements furnished
to Lenders by or on behalf of Company or any of its Subsidiaries for use in
connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact (known to
Company, in the case of any document not furnished by either of them) necessary
in order to make the statements contained herein or therein, taken as a whole,
not misleading in light of the circumstances in which the same were made. Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Company to be
reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results. There are no facts known to Company (other than
matters of a general economic nature) that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect and that
have not been disclosed herein or in such other documents, certificates, reports
and statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
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Notwithstanding the foregoing, no representation or warranty is made in this
Section 4 (or any subsequently delivered agreement or certificate referencing
this Section 4) with respect to any TBR Delayed Transfer Assets.
SECTION 5. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that so long as any Commitment is
in effect and until payment in full of all Obligations and cancellation or
expiration of all Letters of Credit, each Credit Party shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this Section 5.
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will deliver to Administrative Agent and Lenders:
(a) Quarterly Financial Statements. As soon as available, and in any
event within forty-five (45) days after the end of each of the first three
Fiscal Quarters of each Fiscal Year, the consolidated balance sheets of Company
and its Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal Quarter,
setting forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding figures
from the Financial Plan for the current Fiscal Year, all in reasonable detail,
together with a Financial Officer Certification;
(b) Annual Financial Statements. As soon as available, and in any
event no later than the earlier of (x) one hundred five (105) days after the end
of each Fiscal Year and (y) five days after Company is required, under the
Exchange Act, to file its Annual Report on Form 10-K, (i) the consolidated
balance sheets of Company and its Subsidiaries as at the end of such Fiscal Year
and the related consolidated statements of income, stockholders' equity and cash
flows of Company and its Subsidiaries for such Fiscal Year, setting forth in
each case in comparative form the corresponding figures for the previous Fiscal
Year and the corresponding figures from the Financial Plan for the Fiscal Year
covered by such financial statements, in reasonable detail, together with a
Financial Officer Certification and a Narrative Report with respect thereto; and
(ii) with respect to such consolidated financial statements a report thereon of
Ernst & Young LLP or other independent certified public accountants of
recognized national standing selected by Company (which report shall be
unqualified as to going concern and scope of audit, and shall state that such
consolidated financial statements fairly present, in all material respects, the
consolidated financial position of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except as otherwise
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disclosed in such financial statements) and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards) together with a
written statement by such independent certified public accountants stating (1)
that their audit examination has included a review of the terms of the Credit
Documents, (2) whether, in connection therewith, any condition or event that
constitutes a Default or an Event of Default has come to their attention and, if
such a condition or event has come to their attention, specifying the nature and
period of existence thereof (it being understood that such examination and
statement shall be limited to the items that independent certified public
accountants are permitted to cover in such statements pursuant to their
professional standards and customs of the profession), and (3) that nothing has
come to their attention that causes them to believe that the information
contained in any Compliance Certificate is not correct or that the matters set
forth in such Compliance Certificate are not stated in accordance with the terms
hereof;
(c) [Reserved];
(d) Compliance Certificate. Together with each delivery of financial
statements of Company and its Subsidiaries pursuant to Sections 5.1(a) and
5.1(b), a duly executed and completed Compliance Certificate and Financial
Officer certificate pursuant to Section 6.8(g);
(e) Statements of Reconciliation after Change in Accounting
Principles. If, as a result of any change in accounting principles and policies
from those used in the preparation of the Historical Financial Statements, the
consolidated financial statements of Company and its Subsidiaries delivered
pursuant to Section 5.1(a) or 5.1(b) will differ in any material respect from
the consolidated financial statements that would have been delivered pursuant to
such subdivisions had no such change in accounting principles and policies been
made, then, together with the first delivery of such financial statements after
such change, one or more statements of reconciliation for the Fiscal Year
immediately prior to the then current Fiscal Year in form and substance
satisfactory to Administrative Agent;
(f) Notice of Default. Promptly upon any officer of Company
obtaining knowledge (i) of any condition or event that constitutes a Default or
an Event of Default or that notice has been given to Company with respect
thereto; (ii) that any Person has given any notice to Company or any of its
Subsidiaries or taken any other action with respect to any event or condition
set forth in Section 8.1(b); or (iii) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, a certificate of its Authorized Officers specifying the nature
and period of existence of such condition, event or change, or specifying the
notice given and action taken by any such Person and the nature of such claimed
Event of Default, Default, default, event or condition, and what action Company
has taken, is taking and proposes to take with respect thereto;
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(g) Notice of Litigation. Promptly upon any officer of Company
obtaining knowledge of (i) the institution of, or non-frivolous threat of, any
Adverse Proceeding not previously disclosed in writing by Company to Lenders, or
(ii) any material development in any Adverse Proceeding that, in the case of
either (i) or (ii) could be reasonably expected to have a Material Adverse
Effect, or seeks to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated hereby, written notice thereof together with such other information
as may be reasonably available to Company to enable Lenders and their counsel to
evaluate such matters;
(h) ERISA. (i) Promptly upon any officer of Company obtaining
knowledge of the occurrence of or forthcoming occurrence of any ERISA Event, a
written notice specifying the nature thereof, what action Company, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or
proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor or the PBGC
with respect thereto; and (ii) with reasonable promptness, copies of (1) each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed
by Company, any of its Subsidiaries or any of their respective ERISA Affiliates
with the Internal Revenue Service with respect to each Pension Plan; (2) all
notices received by Company, any of its Subsidiaries or any of their respective
ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event;
and (3) copies of such other documents or governmental reports or filings
relating to any Employee Benefit Plan as Administrative Agent shall reasonably
request;
(i) Financial Plan. As soon as practicable and in any event no later
than thirty days after the beginning of each Fiscal Year, a consolidated plan
and financial forecast for such Fiscal Year and each Fiscal Year (or portion
thereof) through the final maturity date of the Loans (a "FINANCIAL PLAN"),
including (i) a forecasted consolidated balance sheet and forecasted
consolidated statements of income and cash flows of Company and its Subsidiaries
for each such Fiscal Year, together with pro forma Compliance Certificates for
each such Fiscal Year and an explanation of the assumptions on which such
forecasts are based, (ii) forecasted consolidated statements of income and cash
flows of Company and its Subsidiaries for each quarter of the first two Fiscal
Years following the Closing Date, and annually for each subsequent Fiscal Year,
(iii) forecasts addressing Company's projected compliance with the requirements
of Section 6.8 through the final maturity date of the Loans and (iv) forecasts
addressing Company's liquidity through the final maturity date of the Loans
without giving effect to any additional debt or equity offerings not reflected
in the Projections, together, in each case, with an explanation of the
assumptions on which such forecasts are based all in form and substance
reasonably satisfactory to Agents;
(j) Insurance Report. As soon as practicable and in any event by the
last day of each Fiscal Year, a report in form and substance satisfactory to
Administrative Agent outlining all material insurance coverage maintained as of
the date of such report by Company and its
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Subsidiaries and all material insurance coverage planned to be maintained by
Company and its Subsidiaries in the immediately succeeding Fiscal Year;
(k) Notice of Change in Board of Directors. With reasonable
promptness, written notice of any change in the board of directors (or similar
governing body) of Company;
(l) Notice Regarding Material Contracts. Promptly, and in any event
within ten Business Days (i) after any Material Contract of Company or any of
its Subsidiaries is terminated or amended in a manner that is materially adverse
to Company or such Subsidiary, as the case may be, or (ii) any new Material
Contract is entered into, a written statement describing such event, with copies
of such material amendments or new contracts, delivered to Administrative Agent
(to the extent such delivery is permitted by the terms of any such Material
Contract, provided, no such prohibition on delivery shall be effective if it
were bargained for by Company or its applicable Subsidiary with the intent of
avoiding compliance with this Section 5.1(l)), and an explanation of any actions
being taken with respect thereto;
(m) Asset Sales. Company will furnish to Collateral Trustee prompt
written notice, with a copy to Administrative Agent, of any Asset Sales entered
into pursuant to Section 6.9(c);
(n) Information Regarding Collateral. Company will furnish to
Collateral Trustee prompt written notice, with a copy to Administrative Agent,
of any change (i) in any Credit Party's corporate name, (ii) in any Credit
Party's identity or corporate structure or (iii) in any Credit Party's Federal
Taxpayer Identification Number. Company agrees not to effect or permit any
change referred to in the preceding sentence unless all filings have been made
under the Uniform Commercial Code or otherwise that are required in order for
Collateral Trustee to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral and for the
Collateral at all times following such change to have a valid, legal and
perfected security interest as contemplated in the Collateral Documents. Company
also agrees promptly to notify Collateral Trustee if any material portion of the
Collateral is damaged or destroyed;
(o) Annual Collateral Verification. Each year, at the time of
delivery of annual financial statements with respect to the preceding Fiscal
Year pursuant to Section 5.1(b), Company shall deliver to Collateral Trustee,
with a copy to Administrative Agent, an Officer's Certificate (i) either
confirming that there has been no change in such information since the date of
the Collateral Questionnaire delivered on the Closing Date or the date of the
most recent certificate delivered pursuant to this Section and/or identifying
such changes (ii) certifying that all Uniform Commercial Code financing
statements (including fixtures filings, as applicable) or other appropriate
filings, recordings or registrations, have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to
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clause (i) above to the extent necessary to protect and perfect the security
interests under the Collateral Documents for a period of not less than 18 months
after the date of such certificate (except as noted therein with respect to any
continuation statements to be filed within such period);
(p) Reserve Report. Not later than 60 days after June 30th and Dec
ember 31st of each year, a Reserve Report, prepared (i) with respect to the June
30th Reserve Report, under the supervision of the chief engineer of Company and
(ii) with respect to the December 31st Reserve Report, prepared by Wright &
Company, Inc. or another independent petroleum engineer of recognized national
standing as may be selected by Company with the consent of the Administrative
Agent, in each case who shall certify such Reserve Report to be true and
accurate and to have been prepared in accordance with the standard procedures
used in the Oil and Gas Business, and together with each such Reserve Report, a
certificate of a Responsible Officer (in his or her capacity as an officer of
Company and not in his or her individual capacity) certifying that, to the best
of his knowledge (1) the information contained in the Reserve Report and any
other information delivered in connection therewith is true and correct in all
material respects, (2) Company and its Subsidiaries own good and defensible
title to its Oil and Gas Properties evaluated in such Reserve Report and such
Properties are free and clear of all Liens except for Permitted Liens, (3)
except as set forth on an exhibit to the certificate, on a net basis there are
no gas imbalances, take-or-pay, Production Payments or other prepayments with
respect to its Oil and Gas Properties evaluated in such Reserve Report which
would require Company or its Subsidiaries to deliver Hydrocarbons produced from
such Oil and Gas Properties or make cash payments at some future time without
then or thereafter receiving full payment therefor, and (4) except as set forth
on an exhibit to the certificate, none of its Oil and Gas Properties have been
sold since the date of the Reserve Report, most recently delivered pursuant to
this subsection 5.1(p), which exhibit shall list all of its Oil and Gas
Properties sold and in such detail as is reasonably required by the
Administrative Agent;
(q) Reserve Notification. Within sixty-five (65) days of the last
day of each Fiscal Quarter, a certificate from a Financial Officer (in his or
her capacity as an officer of Company and not his or her individual capacity) of
the Company notifying the Administrative Agent of any changes of more than 10%
of the aggregate volume of Proved Reserves during such Fiscal Quarter or
confirming that there has been no such change during such Fiscal Quarter; and
(r) Other Information. (A) Promptly upon their becoming available,
copies of (i) all financial statements, reports, notices and proxy statements
sent or made available generally by Company to its security holders (other than
the Sponsor and other non-public shareholders of Company) acting in such
capacity or by any Subsidiary of Company to its security holders other than
Company or another Subsidiary of Company, (ii) all regular and periodic reports
and all registration statements and prospectuses, if any, filed by Company or
any of its Subsidiaries with
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any securities exchange or with the Securities and Exchange Commission and (iii)
all press releases and other statements made available generally by Company or
any of its Subsidiaries to the public concerning material developments in the
business of Company or any of its Subsidiaries, and (B) such other information
and data with respect to Company or any of its Subsidiaries as from time to time
may be reasonably requested by Administrative Agent or any Lender.
5.2. EXISTENCE.
Except as otherwise permitted under Section 6.9, each Credit Party will,
and will cause each of its Subsidiaries to, at all times preserve and keep in
full force and effect its existence and all rights and franchises, licenses and
permits material to its business except where failure to maintain such rights,
franchises, licenses and permits either is no longer required by applicable law
or could not reasonably be expected to have a Material Adverse Effect or that
the loss thereof is not disadvantageous in any material respect to such Person
or to Lenders.
5.3. PAYMENT OF TAXES AND CLAIMS.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
all Taxes imposed upon it or any of its properties or assets or in respect of
any of its income, businesses or franchises before any penalty or fine accrues
thereon, and all claims (including claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; provided, no such Tax or
claim need be paid if it is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, so long as (a)
adequate reserve or other appropriate provision, as shall be required in
conformity with GAAP shall have been made therefor, and (b) in the case of a Tax
or claim which has or may become a Lien against any of the Collateral, such
contest proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such Tax or claim. No Credit Party will, nor will it
permit any of its Subsidiaries to, file or consent to the filing of any
consolidated income tax return with any Person (other than Company or any of its
Subsidiaries).
5.4. MAINTENANCE OF PROPERTIES.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain or cause to be maintained in good repair, working order and condition,
ordinary wear and tear excepted, all material properties used or useful in the
business of Company and its Subsidiaries and from time to time will make or
cause to be made all appropriate repairs, renewals and replacements thereof.
5.5. INSURANCE.
Company will maintain or cause to be maintained, with financially sound
and reputable insurers, such public liability insurance, third party property
damage insurance, business interruption insurance and casualty insurance with
respect to liabilities, losses or damage in
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respect of the assets, properties and businesses of Company and its Subsidiaries
as may customarily be carried or maintained under similar circumstances by
Persons of established reputation engaged in similar businesses, in each case in
such amounts (giving effect to self-insurance), with such deductibles, covering
such risks and otherwise on such terms and conditions as shall be customary for
such Persons. Without limiting the generality of the foregoing, Company will
maintain or cause to be maintained (a) flood insurance with respect to each
Flood Hazard Property that is located in a community that participates in the
National Flood Insurance Program, in each case in compliance with any applicable
regulations of the Board of Governors of the Federal Reserve System, and (b)
casualty insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are at all times carried or maintained under similar circumstances by
Persons of established reputation engaged in similar businesses. Each such
policy of insurance shall (i) name Collateral Trustee, on behalf of Secured
Parties as an additional insured thereunder as its interests may appear and (ii)
in the case of each casualty insurance policy, contain a standard loss payable
clause or endorsement that names Collateral Trustee, on behalf of Secured
Parties as the loss payee thereunder and provides for at least thirty days'
prior written notice to Collateral Trustee of any modification or cancellation
of such policy.
5.6. BOOKS AND RECORDS; INSPECTIONS.
Each Credit Party will, and will cause each of its Subsidiaries to (i)
keep proper books of record and account, in which full and correct entries shall
be made of all financial transactions and the assets and business of Company and
each of its Subsidiaries in accordance with GAAP and (ii) permit, upon notice to
Administrative Agent by a Lender, any authorized representatives designated by
any such Lender to visit and inspect any of the properties of any Credit Party
and any of its respective Subsidiaries, to inspect, copy and take extracts from
its and their financial and accounting records, and to discuss its and their
affairs, finances and accounts with its and their officers and independent
public accountants, all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.
5.7. LENDERS MEETINGS.
Company will, upon the request of Administrative Agent or Requisite
Lenders, participate in a meeting of Administrative Agent and Lenders once
during each Fiscal Year to be held at Company's corporate offices (or at such
other location as may be agreed to by Company and Administrative Agent) at such
time as may be agreed to by Company and Administrative Agent.
5.8. COMPLIANCE WITH LAWS.
Each Credit Party will comply, and shall use reasonable efforts to cause
each of its Subsidiaries and all other Persons, if any, on or occupying any
Facilities to comply, with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority
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(including all Environmental Laws), noncompliance with which could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
5.9. ENVIRONMENTAL.
(a) Environmental Disclosure. Company will deliver to Administrative
Agent and Lenders:
(i) as soon as practicable following receipt thereof,
notification of, and, upon request, copies of all material environmental
audits, investigations, analyses and reports (except where doing so would,
upon advice of Company counsel, jeopardize an applicable privilege),
whether prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility or with
respect to any Environmental Claims;
(ii) promptly upon the occurrence thereof, written notice
describing in reasonable detail (1) any Release required to be reported to
any federal, state or local governmental or regulatory agency under any
applicable Environmental Laws that could reasonably result in a Material
Adverse Effect, (2) any remedial action taken by Company or any other
Person in response to any Hazardous Materials Activities, or any
Environmental Claims that, individually or in the aggregate, have a
reasonable possibility of resulting in a Material Adverse Effect, and (3)
Company's discovery of any occurrence or condition on any real property
adjoining or in the vicinity of any Facility that could cause such
Facility or any part thereof to be subject to any material restrictions on
the ownership, occupancy, transferability or use thereof under any
Environmental Laws;
(iii) as soon as practicable following the sending or receipt
thereof by Company or any of its Subsidiaries, a copy of any material
written communications (except where doing so would, upon advice of
Company counsel, jeopardize an applicable privilege) with respect to (1)
any Environmental Claims that, individually or in the aggregate, have a
reasonable possibility of giving rise to a Material Adverse Effect, (2)
any Release required to be reported to any federal, state or local
governmental or regulatory agency that could reasonably result in a
material Environmental Claim, and (3) any written request for information
from any governmental agency that suggests such agency is investigating
whether Company or any of its Subsidiaries may be potentially responsible
for any Hazardous Materials Activity;
(iv) prompt written notice describing in reasonable detail (1)
any proposed acquisition of stock, assets, or property by Company or any
of its Subsidiaries
98
that could reasonably be expected to expose Company or any of its
Subsidiaries to, or result in, Environmental Claims that could reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect and (2) any proposed action to be taken by Company or any of its
Subsidiaries to modify current operations in a manner that could
reasonably be expected to subject Company or any of its Subsidiaries to
any additional material obligations or requirements under any
Environmental Laws that could reasonably result in a Material Adverse
Effect; and
(v) with reasonable promptness, such other documents and
information as from time to time may be reasonably requested by
Administrative Agent in relation to any matters disclosed pursuant to this
Section 5.9(a).
(b) Hazardous Materials Activities, Etc. Each Credit Party shall
promptly take, and shall use reasonable efforts to cause each of its
Subsidiaries promptly to take, any and all actions necessary to (i) cure any
violation of applicable Environmental Laws by Company or its Subsidiaries that
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, and (ii) promptly discharge any Environmental Claim
against Company or any of its Subsidiaries and discharge any obligations it may
have to any Person thereunder where failure to do so could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
5.10. SUBSIDIARIES.
In the event that (i) any Person becomes a Domestic Subsidiary of Company
or (ii) any Domestic Subsidiary of Company in existence as of the Closing Date
which is not a Guarantor (x) generates total revenue for any twelve-month period
of $100,000 or greater or (y) at any time after owns total assets with an
aggregate fair market value of $100,000 or greater, then in each case of clauses
(i) and (ii) Company shall (a) promptly cause such Domestic Subsidiary to become
a Guarantor hereunder and a Grantor under the Pledge and Security Agreement by
executing and delivering to Administrative Agent and Collateral Trustee a
Counterpart Agreement, and (b) take all such actions and execute and deliver, or
cause to be executed and delivered, all such documents, instruments, agreements,
and certificates as are similar to those described in Sections 3.1(b), 3.1(i)
(provided that Mortgages on Hydrocarbon Interests shall be required only to the
extent provided in Section 5.11), 3.1(j) and 3.1(n), and in the case of each
Leasehold Property that is a Closing Date Mortgaged Property, (1) a Landlord
Consent and Estoppel and (2) Evidence that such Leasehold Property is a Recorded
Leasehold Interest. In the event that any Person becomes a Foreign Subsidiary of
Company, and the ownership interests of such Foreign Subsidiary are owned by
Company or by any Domestic Subsidiary thereof, Company shall, or shall cause
such Domestic Subsidiary to, deliver, all such documents, instruments,
agreements, and certificates as are similar to those described in Sections
3.1(b), and Company shall take, or shall cause such Domestic Subsidiary to take,
all of the actions referred to in Section 3.1(j)(i) necessary to grant and to
perfect a First Priority Lien in favor of Collateral
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Trustee, for the benefit of Secured Parties, under the Pledge and Security
Agreement in 65% of such ownership interests. With respect to each such
Subsidiary, Company shall promptly send to Administrative Agent written notice
setting forth with respect to such Person (i) the date on which such Person
became a Subsidiary of Company, and (ii) all of the data required to be set
forth in Schedules 4.1 and 4.2 with respect to all Subsidiaries of Company;
provided, such written notice shall be deemed to supplement Schedule 4.1 and 4.2
for all purposes hereof.
5.11. ADDITIONAL MATERIAL REAL ESTATE ASSETS.
(a) In the event that any Credit Party (i) acquires a Material Real Estate
Asset, (ii) acquires any Hydrocarbon Interests which Hydrocarbon Interest
produces in commercially reasonable quantities, or (iii) develops a previously
undeveloped Hydrocarbon Interest, such Hydrocarbon Interest produces in
commercially reasonable quantities and such Hydrocarbon Interest has not
otherwise been made subject to the Lien of the Collateral Documents in favor of
Collateral Trustee, for the benefit of Secured Parties, or (iv) a Real Estate
Asset owned or leased on the Closing Date becomes a Material Real Estate Asset
and such interest has not otherwise been made subject to the Lien of the
Collateral Documents in favor of Collateral Trustee, for the benefit of Secured
Parties, then in each case such Credit Party, contemporaneously with the
occurrence of any of the events described in clauses (i) or (iv) of this Section
5.11 and semi-annually with respect to the events described in clauses (ii) and
(iii) of this Section 5.11, shall take all such actions and execute and deliver,
or cause to be executed and delivered, all such mortgages, documents,
instruments, agreements, opinions and certificates similar to those described in
Sections 3.1(i), 3.1(j) and 3.1(k) with respect to each such Material Real
Estate Asset or Hydrocarbon Interests that Administrative Agent shall reasonably
request to create in favor of Collateral Trustee, for the benefit of Secured
Parties, a valid and, subject to any filing and/or recording referred to herein,
perfected First Priority security interest in such Material Real Estate Assets
or Hydrocarbon Interests. In addition to the foregoing, Company shall, at the
request of Requisite Lenders, deliver, from time to time, to Administrative
Agent such appraisals as are required by law or regulation of Real Estate Assets
with respect to which Collateral Trustee has been granted a Lien, but, other
than after the occurrence and during the continuance of an Event of Default, not
more than one such appraisal in any twelve month period.
(b) No later than ninety (90) days after June 30th and December 31st of
each year, Company and the Guarantors shall, if required, take all such actions
and execute and deliver, or cause to be executed and delivered, all such
mortgages, documents, instruments, agreements, opinions and certificates similar
to those described in Section 3.1(i) with respect to additional Hydrocarbon
Interests which have not otherwise been made subject to the Lien of the
Collateral Documents in favor of Collateral Trustee, for the benefit of Secured
Parties, such that the aggregate of Hydrocarbon Interests subject to the Lien of
the Collateral Documents in favor of Collateral Trustee, for the benefit of
Secured Parties, shall represent no less than 90% of the PV-10 Value of Proved
Developed Producing Reserves of the Company and the Guarantor
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Subsidiaries, including no less than 70% of the PV-10 Value of Proved Reserves
of Company and the Guarantor Subsidiaries.
5.12. INTEREST RATE PROTECTION.
No later than one hundred twenty (120) days following the Closing Date,
Company shall maintain, or caused to be maintained, in effect one or more
Interest Rate Agreements for a term of not less than three years (or for the
remaining term of this Agreement) and otherwise in form and substance reasonably
satisfactory to Administrative Agent and Syndication Agent, which Interest Rate
Agreements shall effectively limit the Unadjusted Eurodollar Rate Component of
the interest costs to Company such that not less than 50% of the aggregate
principal amount of the Term Loans and Senior Secured Notes as of the Closing
Date is either (i) subject to such Interest Rate Agreements or (ii) fixed rate
indebtedness.
5.13. SWAP AGREEMENT.
Company shall cause the Swap Agreement to remain in place during the term
of this Agreement on terms and conditions satisfactory to the Administrative
Agent.
5.14. FURTHER ASSURANCES.
At any time or from time to time upon the request of Administrative Agent,
each Credit Party will, at its expense, promptly execute, acknowledge and
deliver such further documents and do such other acts and things as
Administrative Agent or Collateral Trustee may reasonably request in order to
effect fully the purposes of the Credit Documents, including providing Lenders
with any information requested pursuant to Section 10.21. In furtherance and not
in limitation of the foregoing, each Credit Party shall take such actions as
Administrative Agent or Collateral Trustee may reasonably request from time to
time to ensure that the Obligations are guarantied by the Guarantors and,
subject to the limitations set forth in Section 5.11(b) above and the
limitations on security provided in the Collateral Documents, are secured by
substantially all of the assets of Company, and its Subsidiaries and all of the
outstanding Capital Stock of Company and its Subsidiaries (subject to
limitations contained in the Credit Documents with respect to Foreign
Subsidiaries).
5.15. NON-CONSOLIDATION.
Unless otherwise consented to by Agents or Requisite Lenders, Company will
and will cause each of its Subsidiaries to: (i) maintain entity records and
books of account separate from those of any other entity which is an Affiliate
of such entity; (ii) not commingle its funds or assets with those of any other
entity which is an Affiliate of such entity; and (iii) provide that its board of
directors or other analogous governing body will hold all appropriate meetings
to authorize and approve such entity's actions, which meetings will be separate
from those of other entities.
5.16. POST-CLOSING REFINANCING.
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Within forty-five (45) Business Days after the Closing Date, Company shall
repay in full the Unpaid Refinancing Amount.
SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, so long as any Commitment is
in effect and until payment in full of all Obligations and cancellation or
expiration of all Letters of Credit, such Credit Party shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this Section 6.
6.1. INDEBTEDNESS.
No Credit Party shall, nor shall it permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to any Indebtedness,
except:
(a) the Obligations;
(b) unsecured Indebtedness of any Guarantor Subsidiary to Company or
to any other Guarantor Subsidiary, or of Company to any Guarantor Subsidiary;
(c) Senior Secured Indebtedness;
(d) Indebtedness incurred by Company or any of its Subsidiaries
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from guaranties or letters of credit, surety
bonds or performance bonds securing the performance of Company or any such
Subsidiary pursuant to such agreements, in connection with Permitted
Acquisitions or permitted dispositions of any business, assets or Subsidiary of
Company or any of its Subsidiaries;
(e) Indebtedness which may be deemed to exist pursuant to any
guaranties, performance, surety, statutory, appeal or similar obligations
incurred in the ordinary course of business;
(f) Indebtedness in respect of netting services, overdraft
protections and otherwise in connection with deposit accounts;
(g) guaranties in the ordinary course of business of the obligations
of suppliers, customers, franchisees and licensees of Company and its
Subsidiaries;
(h) guaranties by Company of Indebtedness of a Guarantor Subsidiary
or guaranties by a Subsidiary of Company of Indebtedness of Company or a
Guarantor Subsidiary
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with respect, in each case, to Indebtedness otherwise permitted to be incurred
pursuant to this Section 6.1;
(i) Indebtedness described in Schedule 6.1, but not any extensions,
renewals or replacements of such Indebtedness except (i) renewals and extensions
expressly provided for in the agreements evidencing any such Indebtedness as the
same are in effect on the date of this Agreement and (ii) refinancings and
extensions of any such Indebtedness if the terms and conditions thereof are not
less favorable to the obligor thereon or to the Lenders than the Indebtedness
being refinanced or extended, and the average life to maturity thereof is
greater than or equal to that of the Indebtedness being refinanced or extended;
provided, such Indebtedness permitted under the immediately preceding clause (i)
or (ii) above shall not (A) include Indebtedness of an obligor that was not an
obligor with respect to the Indebtedness being extended, renewed or refinanced,
(B) exceed in a principal amount the Indebtedness being renewed, extended or
refinanced or (C) be incurred, created or assumed if any Default or Event of
Default has occurred and is continuing or would result therefrom;
(j) Indebtedness incurred under the Swap Agreement as of the Closing
Date;
(k) additional Indebtedness incurred under the Swap Agreement after
the Closing Date or any replacement thereof with respect to up to 60% of the
Proved Reserves as set forth in the most recent Reserve Report delivered
pursuant to Section 5.1(p) but in no event exceeding 100% of proved developed
producing reserves;
(l) Indebtedness incurred under any Interest Rate Agreement to
satisfy the requirements of Section 5.12 and any Interest Rate Agreement
otherwise entered into in the ordinary course of Company's or any of its
Subsidiaries' businesses and not for speculative purposes;
(m) [Reserved];
(n) in-kind obligations relating to net oil and natural gas
balancing positions arising in the ordinary course of business;
(o) any obligation arising from agreements of Company or a
Subsidiary of Company providing for indemnification, guarantee, contingency
payment obligation based on the performance of the acquired or disposed asset or
similar obligations, in each case, incurred or assumed in connection with the
acquisition or disposition of any business, asset or Capital Stock of a
Guarantor Subsidiary, to the extent permitted hereunder;
(p) Indebtedness with respect to Capital Leases and purchase money
Indebtedness secured by Liens permitted by Section 6.2 (including any
Indebtedness acquired in
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connection with a Permitted Acquisition) in an aggregate amount not to exceed at
any time $5,000,000; provided, that such purchase money Indebtedness (other than
Indebtedness acquired in connection with a Permitted Acquisition) (i) shall be
secured only by the asset acquired in connection with the incurrence of such
Indebtedness, and (ii) shall constitute not less than 80% and not more than 100%
of the aggregate consideration paid with respect to such asset;
(q) other unsecured Indebtedness of Company and its Subsidiaries, in
an aggregate amount not to exceed at any time $5,000,000; and
(r) up to $20,000,000 aggregate principal amount of subordinated
debt outstanding at any one time; provided any such Indebtedness incurred
pursuant to this Section 6.1(r) in an aggregate principal amount of $10,000,000
or more in any one transaction or series of related transactions shall be on
subordination terms and conditions reasonably acceptable to the Administrative
Agent.
6.2. LIENS.
No Credit Party shall, nor shall it permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or permit to exist any Lien on or
with respect to any property or asset of any kind (including any document or
instrument in respect of goods or accounts receivable) of Company or any of its
Subsidiaries, whether now owned or hereafter acquired, or any income or profits
therefrom, or file or permit the filing of, or permit to remain in effect, any
financing statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the UCC of any State or under any
similar recording or notice statute, except:
(a) Liens in favor of Collateral Trustee for the benefit of Secured
Parties granted pursuant to any Credit Document;
(b) Liens for Taxes (i) not yet due and payable or (ii) if
obligations with respect to such Taxes are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long as
adequate reserves or other appropriate provision, as shall be required in
conformity with GAAP, shall have been made with respect to such Taxes;
(c) statutory Liens of landlords, banks (and rights of set-off), of
carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other
Liens imposed by law (other than any such Lien imposed pursuant to Section 401
(a)(29) or 412(n) of the Internal Revenue Code or by ERISA), in each case
incurred in the ordinary course of business (i) for amounts not yet overdue or
(ii) for amounts that are overdue and that (in the case of any such amounts
overdue for a period in excess of five days) are being contested in good faith
by appropriate proceedings, so long as such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made for any
such contested amounts;
104
(d) Liens incurred in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;
(e) easements, rights-of-way, restrictions, encroachments, and other
minor defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries;
(f) any interest or title of a lessor or sublessor under any lease
of real estate permitted hereunder;
(g) Liens solely on any cash earnest money deposits made by Company
or any of its Subsidiaries in connection with any letter of intent or purchase
agreement permitted hereunder;
(h) purported Liens evidenced by the filing of precautionary UCC
financing statements relating solely to operating leases of personal property
entered into in the ordinary course of business;
(i) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(j) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
(k) licenses of patents, trademarks and other intellectual property
rights granted by Company or any of its Subsidiaries in the ordinary course of
business and not interfering in any respect with the ordinary conduct of the
business of Company or such Subsidiary;
(l) Liens described in Schedule 6.2 or on a title report delivered
pursuant to Section 3.1(i)(iv);
(m) Liens reserved in oil and gas mineral leases for bonus or rental
payments payable to the lessor thereunder and for compliance with the terms of
such leases; provided that the amount of any obligations secured thereby that
are delinquent, that are not diligently contested in good faith and for which
adequate reserves are not maintained by Company or the applicable Subsidiary, as
the case may be, do not exceed, at any time outstanding, the amount
105
owing by Company or any Subsidiary, as applicable, for one month's payments as
due thereunder;
(n) Liens arising under operating agreements, joint venture
agreements, partnership agreements, oil and gas leases, farm-out and farm-in
agreements, division orders, contracts for the sale, transportation or exchange
of oil or natural gas, unitization and pooling declarations and agreements, area
of mutual interest agreements that are customary in the Oil and Gas Business;
provided that the amount of any obligations secured thereby that are delinquent,
that are not diligently contested in good faith and for which adequate reserves
are not maintained by Company or the applicable Subsidiary, as the case may be,
do not exceed, at any time outstanding, the amount owing by Company or any
Subsidiary, as applicable, for one month's billed operating expenses or other
expenditures attributable to such entity's interest in the Property covered
thereby;
(o) Liens on, or related to, properties or assets to secure all or
part of the costs incurred in the ordinary course, and consistent with past
practice, of the Oil and Gas Business for the exploration, drilling,
development, production, processing, transportation, marketing, storage or
operation thereof;
(p) Liens securing Indebtedness under the Senior Secured Debt
Documents, the Swap Agreement or Indebtedness permitted under Section 6.1(k);
provided such Liens are (i) subordinate to the Liens incurred hereunder and
pursuant to the Collateral Documents and (ii) subject to the Collateral Trust
Agreement;
(q) Liens on cash or cash equivalents securing the Swap Agreement or
Indebtedness permitted under Section 6.1(k) to the extent that the sum of such
cash or cash equivalents constitutes the proceeds of any draw on any letter of
credit issued to secure the Swap Agreement or Indebtedness permitted under
Section 6.1(k);
(r) Liens on property (including Capital Stock) existing at the time
of acquisition of the property by Company or any Subsidiary; provided that such
Liens were in existence prior to, such acquisition, and not incurred in
contemplation of, such acquisition;
(s) Liens on property of a Person existing at the time such Person
is merged with or into or consolidated with Company or any Subsidiary; provided
that such Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with Company or the Subsidiary;
(t) Liens securing Indebtedness incurred pursuant to Section 6.1(p);
and
106
(u) Liens on the TBR Delayed Transfer Assets in favor of Fortuna
Energy, Inc.
6.3. EQUITABLE LIEN.
If any Credit Party or any of its Subsidiaries shall create or assume any
Lien upon any of its properties or assets, whether now owned or hereafter
acquired, other than Permitted Liens, it shall make or cause to be made
effective provisions whereby the Obligations will be secured by such Lien
equally and ratably with any and all other Indebtedness secured thereby as long
as any such Indebtedness shall be so secured; provided, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not otherwise permitted
hereby.
6.4. NO FURTHER NEGATIVE PLEDGES.
Except with respect to (a) specific property encumbered to secure payment
of particular Indebtedness or to be sold pursuant to an executed agreement with
respect to a permitted asset sale (including the TBR Delayed Transfer Assets),
(b) restrictions by reason of customary provisions restricting assignments,
subletting or other transfers contained in leases, licenses and similar
agreements entered into in the ordinary course of business (provided that such
restrictions are limited to the property or assets secured by such Liens or the
property or assets subject to such leases, licenses or similar agreements, as
the case may be) and (c) restrictions pursuant to the Credit Documents, the
Senior Secured Debt Documents or the Swap Agreement Documents, no Credit Party
nor any of its Subsidiaries shall enter into any agreement prohibiting the
creation or assumption of any Lien upon any of its properties or assets, whether
now owned or hereafter acquired.
6.5. RESTRICTED JUNIOR PAYMENTS.
Except for any Restricted Junior Payment made in connection with the
consummation of transactions contemplated by Section 3.1 (including the Merger),
no Credit Party shall, nor shall it permit any of its Subsidiaries or Affiliates
through any manner or means or through any other Person to, directly or
indirectly, declare, order, pay, make or set apart, or agree to declare, order,
pay, make or set apart, any sum for any Restricted Junior Payment except that
(a) Company may make regularly scheduled payments of interest in respect of any
subordinated Indebtedness in accordance with the terms of, and only to the
extent required by, and subject to the subordination provisions contained in,
the indenture or other agreement pursuant to which such subordinated
Indebtedness was issued; (b) so long as no Default or Event of Default shall
have occurred and be continuing or shall be caused thereby, Company may make
Restricted Junior Payments to Sponsor pursuant to the terms of the Management
Agreement as in effect on the date hereof and (c) Company may make Restricted
Junior Payments to the extent necessary to pay the Unpaid Refinancing Amount, if
any, provided such Restricted Junior Payment is made, or funds are set aside for
such payment, within forty-five (45) Business Days of the Closing Date.
107
6.6. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS.
Except as provided herein, no Credit Party shall, nor shall it permit any
of its Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary of Company to (a) pay dividends or make any other
distributions on any of such Subsidiary's Capital Stock owned by Company or any
other Subsidiary of Company, (b) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (c) make loans or
advances to Company or any other Subsidiary of Company, or (d) transfer any of
its property or assets to Company or any other Subsidiary of Company other than
restrictions by reason of customary provisions restricting assignments,
subletting or other transfers contained in leases, licenses, joint venture
agreements and similar agreements entered into in the ordinary course of
business or that are or were created by virtue of any transfer of, agreement to
transfer or option or right with respect to any property, assets or Capital
Stock not otherwise prohibited under this Agreement, provided that the foregoing
shall not apply to customary restrictions or conditions imposed by (i) law or
(ii) any of the Credit Documents, Senior Secured Debt Documents or the Swap
Agreement Documents.
6.7. INVESTMENTS.
No Credit Party shall, nor shall it permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including
without limitation any Joint Venture, except:
(a) Investments in Cash and Cash Equivalents;
(b) equity Investments owned as of the Closing Date in any
Subsidiary and Investments made after the Closing Date in any wholly-owned
Guarantor Subsidiaries of Company;
(c) Investments (i) consisting of trade receivables arising in the
ordinary course of business and consistent with past practices, (ii) in any
Securities received in satisfaction or partial satisfaction thereof from
financially troubled account debtors and (ii) deposits, prepayments and other
credits to suppliers made in the ordinary course of business consistent with the
past practices of Company and its Subsidiaries;
(d) intercompany loans to the extent permitted under Section 6.1(b);
(e) Consolidated Capital Expenditures, Consolidated Other Capital
Expenditures and Discretionary Capital Expenditures permitted by Sections
6.8(d), (e) and (g) respectively;
108
(f) loans and advances to employees of Company and its Subsidiaries
made in the ordinary course of business in an aggregate principal amount not to
exceed $2,000,000 in the aggregate outstanding at any time;
(g) Investments made in connection with Permitted Acquisitions
permitted pursuant to Section 6.9;
(h) Investments described in Schedule 6.7;
(i) Investments in any Interest Rate Agreement, Currency Agreement,
or the Swap Agreement; and
(j) Permitted Business Investments in an aggregate amount not to
exceed at any time $10,000,000.
Notwithstanding the foregoing, in no event shall any Credit Party make any
Investment which results in or facilitates in any manner any Restricted Junior
Payment not otherwise permitted under the terms of Section 6.5.
6.8. FINANCIAL COVENANTS.
(a) Interest Coverage Ratio. Company shall not permit the Interest
Coverage Ratio as of the last day of any Fiscal Quarter, beginning with the
Fiscal Quarter ending December 31, 2004, to be less than the correlative ratio
indicated:
109
INTEREST
FISCAL QUARTER COVERAGE RATIO
- ----------------------- --------------
Q4 2004 through Q4 2005 2.00:1.00
Q1 2006 through Q2 2006 2.25:1.00
Q3 2006 2.50:1.00
Q4 2006 through Q4 2008 2.75:1.00
Q1 2009 and thereafter 3.00:1.00
(b) Leverage Ratio. Company shall not permit the Leverage Ratio as
of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending
December 31, 2004, to exceed the correlative ratio indicated:
FISCAL LEVERAGE
QUARTER RATIO
- ----------------------- ----------
Q4 2004 through Q4 2005 5.75:1.00
Q1 2006 5.50:1.00
Q2 2006 5.00:1.00
Q3 2006 4.50:1.00
Q4 2006 4.25:1.00
110
FISCAL LEVERAGE
QUARTER RATIO
- ----------------------- ----------
Q1 2007 through Q4 2007 4.00:1.00
Q1 2008 and thereafter 3.75:1.00
(c) Maximum Reserve Leverage Ratio. Company shall not permit the
Reserve Leverage Ratio as of the last day of any Fiscal Quarter, beginning with
the Fiscal Quarter ending December 31, 2004, to exceed the correlative ratio
indicated:
FISCAL RESERVE LEVERAGE
QUARTER RATIO
- ----------------------- ----------------
Q4 2004 through Q3 2005 0.275:1.00
Q4 2005 through Q1 2006 0.25:1.00
Q2 2006 through Q3 2006 0.225:1.00
Q4 2006 through Q2 2007 0.20:1.00
Q3 2007 and thereafter 0.175:1.00
(d) Maximum Consolidated Capital Expenditures. Company shall not,
and shall not permit its Subsidiaries to, make or incur Consolidated Capital
Expenditures (which shall not
111
include Permitted Acquisitions for purposes of this Section 6.8(d)), in any
Fiscal Year indicated below, in an aggregate amount for Company and its
Subsidiaries in excess of the corresponding amount set forth below opposite such
Fiscal Year; provided, such amount for any Fiscal Year shall be increased by an
amount equal to the excess, if any, (but in no event more than $500,000) of such
amount for the previous Fiscal Year (as adjusted in accordance with this
proviso) over the actual amount of Consolidated Capital Expenditures for such
previous Fiscal Year; provided such amount with respect to Fiscal Year 2004
shall be from the Closing Date through December 31, 2004:
CONSOLIDATED
CAPITAL
FISCAL YEAR EXPENDITURES
- ----------------- ------------
2004 $1,500,000
2005 through 2011 $3,000,000
At the request of Company, and upon demonstration by Company to the
Administrative Agent of Company's compelling need to make Consolidated Capital
Expenditures in excess of the limitations referred to in the first sentence of
this subsection (d), the Administrative Agent in its sole discretion shall be
entitled to approve an increase in the Consolidated Capital Expenditures
limitations for any Fiscal Year set forth above of up to 5% of the aggregate
amount set forth above with respect to such Fiscal Year.
(e) Maximum Consolidated Other Capital Expenditures. Company shall
not, and shall not permit its Subsidiaries to, make or incur Consolidated Other
Capital Expenditures (which shall not include Permitted Acquisitions for
purposes of this Section 6.8(e)) in any Fiscal Year in excess of 115% of the
amount of capital expenditures for Proved Reserves as set forth in the most
recent Reserve Report delivered pursuant to Section 5.1(p)(ii); provided (i) the
first 100% of such amount shall only be utilized on expenditures in any of those
locations indicated in such Reserve Report to contain such Proved Reserves and
(ii) the balance in excess of such 100% may be utilized on expenditures in
locations which Company in good faith believes contain reserves and are low to
moderate risk locations for the Oil and Gas Business; provided, further,
notwithstanding the foregoing, with respect to the period commencing on the
Closing Date through December 31, 2004, such Consolidated Other Capital
Expenditures shall not exceed $11,000,000.
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(f) Maximum Combined Capital Expenditures. Company shall not, and
shall not permit its Subsidiaries to, make or incur Combined Capital
Expenditures (which shall not include Permitted Acquisitions for purposes of
this Section 6.8(f)), in any Fiscal Year indicated below, in an aggregate amount
for Company and its Subsidiaries in excess of the corresponding amount set forth
below opposite such Fiscal Year; provided such amounts for any Fiscal Year shall
be increased by an amount equal to the excess, if any (but in no event more than
$5,000,000) of such amount for the previous Fiscal Year (as adjusted in
accordance with this proviso) over the actual amount of Combined Capital
Expenditures for such previous Fiscal Year. Such amount with respect to Fiscal
Year 2004 shall be from the Closing Date through December 31, 2004.
MAXIMUM COMBINED
FISCAL YEAR CAPITAL EXPENDITURES
- --------------------- --------------------
2004 $12,500,000
2005 $36,000,000
2006 $44,000,000
2007 and thereafter $52,000,000
(g) Maximum Discretionary Capital Expenditures. Company shall not,
and shall not permit its Subsidiaries to, make or incur Discretionary Capital
Expenditures (which shall not include Permitted Acquisitions for purposes of
this Section 6.8(g)), in any Fiscal Year, in an aggregate amount for Company and
its Subsidiaries (i) in excess of $10,000,000 for such Fiscal Year and (ii) in
excess of the lesser of (x) the cash-on-hand at the Company as of the Closing
Date and (y) $20,000,000, in each case in the aggregate from the Closing Date
through the date of determination; provided, such amount in clause (ii) shall be
reduced by any use for any purposes (including, without limitation, working
capital purposes or for Permitted Acquisitions) of the cash-on-hand as of the
Closing Date as shall be set forth in a certificate from a Financial Officer of
the Company (in his or her capacity as an officer of the Company and not in his
or her individual capacity) to be delivered with each Compliance Certificate
delivered pursuant to Section 5.1(d) which certificate shall set forth the
amount and use, if any, of such cash during the previous Fiscal Quarter;
provided further such Discretionary Capital Expenditures may be utilized only
with respect to locations which Company in good faith believes contain reserves
and are low to moderate risk locations for the Oil and Gas Business.
(h) Certain Calculations. With respect to any period during which a
Permitted Acquisition or an Asset Sale has occurred (each, a "SUBJECT
TRANSACTION"), for purposes of
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determining compliance with the financial covenants set forth in this Section
6.8 (but not for purposes of determining the Applicable Margin), Consolidated
Adjusted EBITDA shall be calculated with respect to such period on a pro forma
basis (including pro forma adjustments arising out of events which are directly
attributable to a specific transaction, are factually supportable and are
expected to have a continuing impact, in each case determined on a basis
consistent with Article 11 of Regulation S-X promulgated under the Securities
Act and as interpreted by the staff of the Securities and Exchange Commission,
which would include cost savings resulting from head count reduction, closure of
facilities and similar restructuring charges, which pro forma adjustments shall
be certified by the chief financial officer of Company) using the historical
audited financial statements of any business so acquired or to be acquired or
sold or to be sold and the consolidated financial statements of Company and its
Subsidiaries which shall be reformulated as if such Subject Transaction, and any
Indebtedness incurred or repaid in connection therewith, had been consummated or
incurred or repaid at the beginning of such period (and assuming that such
Indebtedness bears interest during any portion of the applicable measurement
period prior to the relevant acquisition at the weighted average of the interest
rates applicable to outstanding Loans incurred during such period).
6.9. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS.
No Credit Party shall, nor shall it permit any of its Subsidiaries to,
enter into any transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor or sublessor), exchange, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or any part of
its business, assets or property of any kind whatsoever, whether real, personal
or mixed and whether tangible or intangible, whether now owned or hereafter
acquired, or acquire by purchase or otherwise (other than purchases or other
acquisitions of inventory, materials and equipment and Consolidated Capital
Expenditures and Consolidated Other Capital Expenditures in the ordinary course
of business) the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business or other business unit of any Person, except:
(a) any Subsidiary of Company may be merged with or into Company or
any Guarantor Subsidiary, or be liquidated, wound up or dissolved, or all or any
part of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to Company or any Guarantor Subsidiary; provided, in the case of
such a merger, Company or such Guarantor Subsidiary, as applicable shall be the
continuing or surviving Person;
(b) sales or other dispositions of assets that do not constitute
Asset Sales;
(c) Asset Sales, the proceeds of which (valued at the principal
amount thereof in the case of non-Cash proceeds consisting of notes or other
debt Securities and valued at fair
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market value in the case of other non-Cash proceeds) (i) are less than
$5,000,000 with respect to any single Asset Sale or series of related Asset
Sales and (ii) when aggregated with the proceeds of all other Asset Sales made
within the same Fiscal Year, are less than $10,000,000; provided (1) the
consideration received for such assets shall be in an amount at least equal to
the fair market value thereof (determined in good faith by a Financial Officer
of Company), (2) no less than 75% thereof shall be paid in Cash, and (3) the Net
Asset Sale Proceeds thereof shall be applied as required by Section 2.14(a);
(d) disposals of obsolete, worn out or surplus property;
(e) Permitted Acquisitions, the consideration for which constitutes
less than $10,000,000, in the aggregate in any Fiscal Year regardless of the
source of funds for such consideration; provided, that in connection with any
Permitted Acquisition any Subsidiary of Company may be merged with or into any
company acquired in such Permitted Acquisition so long as such Guarantor
Subsidiary shall be the continuing or surviving Person;
(f) the sale of Oil and Gas Properties not containing Proved
Reserves in the ordinary course of business; provided, that, the aggregate value
of Oil and Gas Properties so abandoned, farmed-out or subleased during any
six-month period commencing January 1 and ending June 30 or commencing July 1
and ending December 31 shall not exceed $2,500,000;
(g) the trade or exchange by Company or any Subsidiary of any Oil
and Gas Property or interest therein owned or held by Company or such Subsidiary
for any Oil and Gas Property or interest therein owned or held by another
Person, including any cash or Cash Equivalents necessary in order to achieve an
exchange of equivalent value; provided, that, the aggregate value of trades or
exchanges permitted by this paragraph (g) shall not exceed $5,000,000 during any
six-month period commencing January 1 and ending June 30 or commencing July 1
and ending December 31;
(h) the sale of Oil and Gas Properties in connection with tax credit
transactions complying with Section 29 of the Internal Revenue of 1986, as
amended from time to time ("SECTION 29 PROPERTIES"), which sale does not result
in a reduction in Company's or its Subsidiaries', as the case may be, right to
receive the cash flow from such Oil and Gas Properties through the Term Loan
Maturity Date and which sale is on terms reasonably acceptable to the
Administrative Agent;
(i) Investments made in accordance with Section 6.7; and
(j) the transfer of the TBR Delayed Transfer Assets to Fortuna
Energy, Inc. (or as Fortuna Energy, Inc. may otherwise direct).
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6.10. DISPOSAL OF SUBSIDIARY INTERESTS.
Except for (i) any sale of all of its interests in the Capital Stock of
any of its Subsidiaries in compliance with the provisions of Section 6.9 and
(ii) any pledge of the Capital Stock of Company or its Subsidiaries to secure
the Obligations hereunder or the Obligations under the Senior Secured Notes or
any Swap Agreement, no Credit Party shall, nor shall it permit any of its
Subsidiaries to, (a) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
qualify directors if required by applicable law; or (b) permit any of its
Subsidiaries directly or indirectly to sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
another Credit Party (subject to the restrictions on such disposition otherwise
imposed hereunder), or to qualify directors if required by applicable law.
6.11. SALES AND LEASE-BACKS.
No Credit Party shall, nor shall it permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease of any property (whether real, personal
or mixed), whether now owned or hereafter acquired, which such Credit Party (a)
has sold or transferred or is to sell or to transfer to any other Person (other
than Company or any of its Subsidiaries), or (b) intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by such Credit Party to any Person (other than Company or
any of its Subsidiaries) in connection with such lease.
6.12. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
No Credit Party shall, nor shall it permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of Capital Stock of Company
or any of its Subsidiaries or with any Affiliate of Company or of any such
holder, on terms that are less favorable to Company or that Subsidiary, as the
case may be, than those that might be obtained at the time from a Person who is
not such a holder or Affiliate; provided, the foregoing restriction shall not
apply to (a) any transaction between Company and any Guarantor Subsidiary; (b)
reasonable and customary fees paid to members of the board of directors (or
similar governing body) of Company and its Subsidiaries; (c) compensation
arrangements for officers and other employees of Company and its Subsidiaries
entered into in the ordinary course of business; (d) Company may pay management
fees to Sponsor pursuant to the terms of the Management Agreement as in effect
on the date hereof; and (e) transactions described in Schedule 6.12.
6.13. CONDUCT OF BUSINESS.
From and after the Closing Date, no Credit Party shall, nor shall it
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by such Credit Party on the Closing Date and similar or
related businesses and (ii) such other lines of business as may be consented to
by Requisite Lenders.
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6.14. FORWARD SALES.
Except in accordance with ordinary practice in the Oil and Gas Business,
enter into or permit to exist any advance payment agreement or other arrangement
pursuant to which Company or any of its Subsidiaries, having received full or
substantial payment of the purchase price for a specified quantity of
Hydrocarbons upon entering such agreement or arrangement, is required to
deliver, in one or more installments subsequent to the date of such agreement or
arrangement, such quantity of Hydrocarbons pursuant to and during the terms of
such agreement or arrangement; provided that any Production Payment is
prohibited without the consent of the Requisite Lenders.
6.15. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS.
No Credit Party shall nor shall it permit any of its Subsidiaries to,
agree to any material amendment, restatement, supplement or other modification
to, or waiver of, any of its material rights under any Related Agreement (other
than the Senior Secured Indebtedness and future transactions otherwise permitted
by the terms of this Agreement) after the Closing Date without in each case
obtaining the prior written consent of Requisite Lenders to such amendment,
restatement, supplement or other modification or waiver.
6.16. AMENDMENTS OR WAIVERS OF WITH RESPECT TO SENIOR SECURED
INDEBTEDNESS.
No Credit Party shall, nor shall it permit any of its Subsidiaries to,
amend or otherwise change the terms of any Senior Secured Indebtedness, or make
any payment consistent with an amendment thereof or change thereto, if the
effect of such amendment or change is to increase the interest rate on such
Senior Secured Indebtedness, change (to earlier dates) any dates upon which
payments of principal or interest are due thereon, change any event of default
or condition to an event of default with respect thereto (other than to
eliminate any such event of default or increase any grace period related
thereto), change the redemption, prepayment or defeasance provisions thereof,
change the lien subordination provisions of such Senior Secured Indebtedness (or
of any guaranty thereof), or if the effect of such amendment or change, together
with all other amendments or changes made, is to increase materially the
obligations of the obligor thereunder or to confer any additional rights on the
holders of such Senior Secured Indebtedness (or a trustee or other
representative on their behalf) which would be adverse in any material respect
to any Credit Party or Lenders.
6.17. FISCAL YEAR.
No Credit Party shall, nor shall it permit any of its Subsidiaries to
change its Fiscal Year-end from December 31.
SECTION 7. GUARANTY
7.1. GUARANTY OF THE OBLIGATIONS.
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Subject to the provisions of Section 7.2, Guarantors jointly and severally
hereby irrevocably and unconditionally guaranty to Administrative Agent for the
ratable benefit of the Beneficiaries the due and punctual payment in full of all
Obligations when the same shall become due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)) (collectively,
the "GUARANTEED OBLIGATIONS").
7.2. CONTRIBUTION BY GUARANTORS.
All Guarantors desire to allocate among themselves (collectively, the
"CONTRIBUTING GUARANTORS"), in a fair and equitable manner, their obligations
arising under this Guaranty. Accordingly, in the event any payment or
distribution is made on any date by a Guarantor (a "FUNDING GUARANTOR") under
this Guaranty such that its Aggregate Payments exceeds its Fair Share as of such
date, such Funding Guarantor shall be entitled to a contribution from each of
the other Contributing Guarantors in an amount sufficient to cause each
Contributing Guarantor's Aggregate Payments to equal its Fair Share as of such
date. "FAIR SHARE" means, with respect to a Contributing Guarantor as of any
date of determination, an amount equal to (a) the ratio of (i) the Fair Share
Contribution Amount with respect to such Contributing Guarantor to (ii) the
aggregate of the Fair Share Contribution Amounts with respect to all
Contributing Guarantors multiplied by (b) the aggregate amount paid or
distributed on or before such date by all Funding Guarantors under this Guaranty
in respect of the obligations Guaranteed. "FAIR SHARE CONTRIBUTION AMOUNT"
means, with respect to a Contributing Guarantor as of any date of determination,
the maximum aggregate amount of the obligations of such Contributing Guarantor
under this Guaranty that would not render its obligations hereunder or
thereunder subject to avoidance as a fraudulent transfer or conveyance under
Section 548 of Title 11 of the United States Code or any comparable applicable
provisions of state law; provided, solely for purposes of calculating the "FAIR
SHARE CONTRIBUTION AMOUNT" with respect to any Contributing Guarantor for
purposes of this Section 7.2, any assets or liabilities of such Contributing
Guarantor arising by virtue of any rights to subrogation, reimbursement or
indemnification or any rights to or obligations of contribution hereunder shall
not be considered as assets or liabilities of such Contributing Guarantor.
"AGGREGATE PAYMENTS" means, with respect to a Contributing Guarantor as of any
date of determination, an amount equal to (1) the aggregate amount of all
payments and distributions made on or before such date by such Contributing
Guarantor in respect of this Guaranty (including, without limitation, in respect
of this Section 7.2), minus (2) the aggregate amount of all payments received on
or before such date by such Contributing Guarantor from the other Contributing
Guarantors as contributions under this Section 7.2. The amounts payable as
contributions hereunder shall be determined as of the date on which the related
payment or distribution is made by the applicable Funding Guarantor. The
allocation among Contributing Guarantors of their obligations as set forth in
this Section 7.2 shall not be construed in any way to limit the liability of any
Contributing Guarantor hereunder.
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Each Guarantor is a third party beneficiary to the contribution agreement set
forth in this Section 7.2.
7.3. PAYMENT BY GUARANTORS.
Subject to Section 7.2, Guarantors hereby jointly and severally agree, in
furtherance of the foregoing and not in limitation of any other right which any
Beneficiary may have at law or in equity against any Guarantor by virtue hereof,
that upon the failure of Company to pay any of the Guaranteed Obligations when
and as the same shall become due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)), Guarantors will upon
demand pay, or cause to be paid, in Cash, to Administrative Agent for the
ratable benefit of Beneficiaries, an amount equal to the sum of the unpaid
principal amount of all Guaranteed Obligations then due as aforesaid, accrued
and unpaid interest on such Guaranteed Obligations (including interest which,
but for Company's becoming the subject of a case under the Bankruptcy Code,
would have accrued on such Guaranteed Obligations, whether or not a claim is
allowed against Company for such interest in the related bankruptcy case) and
all other Guaranteed Obligations then owed to Beneficiaries as aforesaid.
7.4. LIABILITY OF GUARANTORS ABSOLUTE.
Each Guarantor agrees that its obligations hereunder are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or
surety other than payment in full of the Guaranteed Obligations. In furtherance
of the foregoing and without limiting the generality thereof, each Guarantor
agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectability. This Guaranty is a primary obligation of each Guarantor and not
merely a contract of surety;
(b) Administrative Agent may enforce this Guaranty upon the
occurrence of an Event of Default notwithstanding the existence of any dispute
between Company and any Beneficiary with respect to the existence of such Event
of Default;
(c) the obligations of each Guarantor hereunder are independent of
the obligations of Company and the obligations of any other guarantor (including
any other Guarantor) of the obligations of Company, and a separate action or
actions may be brought and prosecuted against such Guarantor whether or not any
action is brought against Company or any of such other guarantors and whether or
not Company is joined in any such action or actions;
(d) payment by any Guarantor of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge any
Guarantor's liability for any
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portion of the Guaranteed Obligations which has not been paid. Without limiting
the generality of the foregoing, if Administrative Agent is awarded a judgment
in any suit brought to enforce any Guarantor's covenant to pay a portion of the
Guaranteed Obligations, such judgment shall not be deemed to release such
Guarantor from its covenant to pay the portion of the Guaranteed Obligations
that is not the subject of such suit, and such judgment shall not, except to the
extent satisfied by such Guarantor, limit, affect, modify or abridge any other
Guarantor's liability hereunder in respect of the Guaranteed Obligations;
(e) any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or enforceability
hereof or giving rise to any reduction, limitation, impairment, discharge or
termination of any Guarantor's liability hereunder, from time to time may (i)
renew, extend, accelerate, increase the rate of interest on, or otherwise change
the time, place, manner or terms of payment of the Guaranteed Obligations; (ii)
settle, compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Guaranteed Obligations or
any agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other guaranties of
the Guaranteed Obligations and take and hold security for the payment hereof or
the Guaranteed Obligations; (iv) release, surrender, exchange, substitute,
compromise, settle, rescind, waive, alter, subordinate or modify, with or
without consideration, any security for payment of the Guaranteed Obligations,
any other guaranties of the Guaranteed Obligations, or any other obligation of
any Person (including any other Guarantor) with respect to the Guaranteed
Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of such Beneficiary in respect hereof or the Guaranteed Obligations
and direct the order or manner of sale thereof, or exercise any other right or
remedy that such Beneficiary may have against any such security, in each case as
such Beneficiary in its discretion may determine consistent herewith or the
applicable Hedge Agreement and any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable,
and even though such action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any Guarantor against
Company or any security for the Guaranteed Obligations; and (vi) exercise any
other rights available to it under the Credit Documents or the Hedge Agreements;
and
(f) this Guaranty and the obligations of Guarantors hereunder shall
be valid and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in full
of the Guaranteed Obligations), including the occurrence of any of the
following, whether or not any Guarantor shall have had notice or knowledge of
any of them: (i) any failure or omission to assert or enforce or agreement or
election not to assert or enforce, or the stay or enjoining, by order of court,
by operation of law or otherwise, of the exercise or enforcement of, any claim
or demand or any right, power or remedy
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(whether arising under the Credit Documents or the Hedge Agreements, at law, in
equity or otherwise) with respect to the Guaranteed Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security for the
payment of the Guaranteed Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including provisions relating to events of default) hereof, any of
the other Credit Documents, any of the Hedge Agreements or any agreement or
instrument executed pursuant thereto, or of any other guaranty or security for
the Guaranteed Obligations, in each case whether or not in accordance with the
terms hereof or such Credit Document, such Hedge Agreement or any agreement
relating to such other guaranty or security; (iii) the Guaranteed Obligations,
or any agreement relating thereto, at any time being found to be illegal,
invalid or unenforceable in any respect; (iv) the application of payments
received from any source (other than payments received pursuant to the other
Credit Documents or any of the Hedge Agreements or from the proceeds of any
security for the Guaranteed Obligations, except to the extent such security also
serves as collateral for indebtedness other than the Guaranteed Obligations) to
the payment of indebtedness other than the Guaranteed Obligations, even though
any Beneficiary might have elected to apply such payment to any part or all of
the Guaranteed Obligations; (v) any Beneficiary's consent to the change,
reorganization or termination of the corporate structure or existence of Company
or any of its Subsidiaries and to any corresponding restructuring of the
Guaranteed Obligations; (vi) any failure to perfect or continue perfection of a
security interest in any collateral which secures any of the Guaranteed
Obligations; (vii) any defenses, set-offs or counterclaims which Company may
allege or assert against any Beneficiary in respect of the Guaranteed
Obligations, including failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction and usury;
and (viii) any other act or thing or omission, or delay to do any other act or
thing, which may or might in any manner or to any extent vary the risk of any
Guarantor as an obligor in respect of the Guaranteed Obligations.
7.5. WAIVERS BY GUARANTORS.
Each Guarantor hereby waives, for the benefit of Beneficiaries: (a) any
right to require any Beneficiary, as a condition of payment or performance by
such Guarantor, to (i) proceed against Company, any other guarantor (including
any other Guarantor) of the Guaranteed Obligations or any other Person, (ii)
proceed against or exhaust any security held from Company, any such other
guarantor or any other Person, (iii) proceed against or have resort to any
balance of any Deposit Account or credit on the books of any Beneficiary in
favor of Company or any other Person, or (iv) pursue any other remedy in the
power of any Beneficiary whatsoever; (b) any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of Company or
any other Guarantor including any defense based on or arising out of the lack of
validity or the unenforceability of the Guaranteed Obligations or any agreement
or instrument relating thereto or by reason of the cessation of the liability of
Company or any other Guarantor from any cause other than payment in full of the
Guaranteed Obligations; (c) any
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defense based upon any statute or rule of law which provides that the obligation
of a surety must be neither larger in amount nor in other respects more
burdensome than that of the principal; (d) any defense based upon any
Beneficiary's errors or omissions in the administration of the Guaranteed
Obligations, except behavior which amounts to bad faith; (e) (i) any principles
or provisions of law, statutory or otherwise, which are or might be in conflict
with the terms hereof and any legal or equitable discharge of such Guarantor's
obligations hereunder, (ii) to the extent permitted by law, the benefit of any
statute of limitations affecting such Guarantor's liability hereunder or the
enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims,
and (iv) promptness, diligence and any requirement that any Beneficiary protect,
secure, perfect or insure any security interest or lien or any property subject
thereto; (f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
hereof, notices of default hereunder, the Hedge Agreements or any agreement or
instrument related thereto, notices of any renewal, extension or modification of
the Guaranteed Obligations or any agreement related thereto, notices of any
extension of credit to Company and notices of any of the matters referred to in
Section 7.4 and any right to consent to any thereof; and (g) any defenses or
benefits that may be derived from or afforded by law which limit the liability
of or exonerate guarantors or sureties, or which may conflict with the terms
hereof.
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC.
Until the Guaranteed Obligations shall have been indefeasibly paid in full
and the Revolving Commitments shall have terminated and all Letters of Credit
and Hedge Letters of Credit shall have expired or been cancelled, each Guarantor
hereby waives any claim, right or remedy, direct or indirect, that such
Guarantor now has or may hereafter have against Company or any other Guarantor
or any of its assets in connection with this Guaranty or the performance by such
Guarantor of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise and including without limitation (a) any right of subrogation,
reimbursement or indemnification that such Guarantor now has or may hereafter
have against Company with respect to the Guaranteed Obligations, (b) any right
to enforce, or to participate in, any claim, right or remedy that any
Beneficiary now has or may hereafter have against Company, and (c) any benefit
of, and any right to participate in, any collateral or security now or hereafter
held by any Beneficiary. In addition, until the Guaranteed Obligations shall
have been indefeasibly paid in full and the Revolving Commitments shall have
terminated and all Letters of Credit and Hedge Letters of Credit shall have
expired or been cancelled, each Guarantor shall withhold exercise of any right
of contribution such Guarantor may have against any other guarantor (including
any other Guarantor) of the Guaranteed Obligations, including, without
limitation, any such right of contribution as contemplated by Section 7.2. Each
Guarantor further agrees that, to the extent the waiver or agreement to withhold
the exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction
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to be void or voidable for any reason, any rights of subrogation, reimbursement
or indemnification such Guarantor may have against Company or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
any Beneficiary may have against Company, to all right, title and interest any
Beneficiary may have in any such collateral or security, and to any right any
Beneficiary may have against such other guarantor. If any amount shall be paid
to any Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guaranteed
Obligations shall not have been finally and indefeasibly paid in full, such
amount shall be held in trust for Administrative Agent on behalf of
Beneficiaries and shall forthwith be paid over to Administrative Agent for the
benefit of Beneficiaries to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms hereof.
7.7. SUBORDINATION OF OTHER OBLIGATIONS.
Any Indebtedness of Company or any Guarantor now or hereafter held by any
Guarantor (the "OBLIGEE GUARANTOR") is hereby subordinated in right of payment
to the Guaranteed Obligations, and any such indebtedness collected or received
by the Obligee Guarantor after an Event of Default has occurred and is
continuing shall be held in trust for Administrative Agent on behalf of
Beneficiaries and shall forthwith be paid over to Administrative Agent for the
benefit of Beneficiaries to be credited and applied against the Guaranteed
Obligations but without affecting, impairing or limiting in any manner the
liability of the Obligee Guarantor under any other provision hereof.
7.8. CONTINUING GUARANTY.
This Guaranty is a continuing guaranty and shall remain in effect until
all of the Guaranteed Obligations shall have been paid in full and the Revolving
Commitments shall have terminated and all Letters of Credit and Hedge Letters of
Credit shall have expired or been cancelled. Each Guarantor hereby irrevocably
waives any right to revoke this Guaranty as to future transactions giving rise
to any Guaranteed Obligations.
7.9. AUTHORITY OF GUARANTORS OR COMPANY.
It is not necessary for any Beneficiary to inquire into the capacity or
powers of any Guarantor or Company or the officers, directors or any agents
acting or purporting to act on behalf of any of them.
7.10. FINANCIAL CONDITION OF COMPANY.
Any Credit Extension may be made to Company or continued from time to
time, and any Hedge Agreements may be entered into from time to time, in each
case without notice to or authorization from any Guarantor regardless of the
financial or other condition of Company at the time of any such grant or
continuation or at the time such Hedge Agreement is entered into, as the case
may be. No Beneficiary shall have any obligation to disclose or discuss with any
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Guarantor its assessment, or any Guarantor's assessment, of the financial
condition of Company. Each Guarantor has adequate means to obtain information
from Company on a continuing basis concerning the financial condition of Company
and its ability to perform its obligations under the Credit Documents and the
Hedge Agreements, and each Guarantor assumes the responsibility for being and
keeping informed of the financial condition of Company and of all circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations. Each
Guarantor hereby waives and relinquishes any duty on the part of any Beneficiary
to disclose any matter, fact or thing relating to the business, operations or
conditions of Company now known or hereafter known by any Beneficiary.
7.11. BANKRUPTCY, ETC.
(a) So long as any Guaranteed Obligations remain outstanding, no
Guarantor shall, without the prior written consent of Administrative Agent
acting pursuant to the instructions of Requisite Lenders, commence or join with
any other Person in commencing any bankruptcy, reorganization or insolvency case
or proceeding of or against Company or any other Guarantor. The obligations of
Guarantors hereunder shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any case or proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of Company or any other Guarantor or by any defense
which Company or any other Guarantor may have by reason of the order, decree or
decision of any court or administrative body resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Guaranteed Obligations which accrues after the commencement of
any case or proceeding referred to in clause (a) above (or, if interest on any
portion of the Guaranteed Obligations ceases to accrue by operation of law by
reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Beneficiaries that the
Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto should
be determined without regard to any rule of law or order which may relieve
Company of any portion of such Guaranteed Obligations. Guarantors will permit
any trustee in bankruptcy, receiver, debtor in possession, assignee for the
benefit of creditors or similar person to pay Administrative Agent, or allow the
claim of Administrative Agent in respect of, any such interest accruing after
the date on which such case or proceeding is commenced.
(c) In the event that all or any portion of the Guaranteed
Obligations are paid by Company, the obligations of Guarantors hereunder shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Beneficiary as a preference,
fraudulent
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transfer or otherwise, and any such payments which are so rescinded or recovered
shall constitute Guaranteed Obligations for all purposes hereunder.
7.12. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR.
If all of the Capital Stock of any Guarantor or any of its successors in
interest hereunder shall be sold or otherwise disposed of (including by merger
or consolidation) in accordance with the terms and conditions hereof, the
Guaranty of such Guarantor or such successor in interest, as the case may be,
hereunder shall automatically be discharged and released without any further
action by any Beneficiary or any other Person effective as of the time of such
Asset Sale.
Notwithstanding anything herein to the contrary, each Guarantor confirms that it
is its intention that the guaranty by such Guarantor pursuant to this Guaranty
not constitute a fraudulent transfer or conveyance for purposes of any federal,
state or foreign law. To effectuate the foregoing intention, each Guarantor
hereby irrevocably agrees that the obligations of each Guarantor under this
Guaranty shall be limited to the maximum amount as will, after giving effect to
all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under its
Guaranty, result in the obligations of such Guarantor under this Guaranty not
constituting a fraudulent conveyance or fraudulent transfer under federal, state
or foreign law.
SECTION 8. EVENTS OF DEFAULT
8.1. EVENTS OF DEFAULT.
If any one or more of the following conditions or events shall occur:
(a) Failure to Make Payments When Due. Failure by Company to pay (i)
when due any installment of principal of any Loan, whether at stated maturity,
by acceleration, by notice of voluntary prepayment, by mandatory prepayment or
otherwise; (ii) when due any amount payable to Issuing Bank in reimbursement of
any drawing under a Letter of Credit or Hedge Letter of Credit; or (iii) any
interest on any Loan or any fee or any other amount due hereunder within five
days after the date due; or
(b) Default in Other Agreements. (i) Failure of any Credit Party or
any of their respective Subsidiaries to pay when due any principal of or
interest on or any other amount payable in respect of one or more items of
Indebtedness (other than Indebtedness referred to in Section 8.1(a)) in a
principal amount of $10,000,000 or more beyond the grace period, if any,
provided therefor; or (ii) breach or default by any Credit Party with respect to
any other material term of (1) one or more items of Indebtedness in the
individual or principal amounts referred to in clause (i) above or (2) any loan
agreement, mortgage, indenture or other agreement relating to such item(s) of
Indebtedness, in each case beyond the grace period, if any, provided therefor,
if
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the effect of such breach or default is to cause, or to permit the holder or
holders of that Indebtedness (or a trustee on behalf of such holder or holders),
to cause, that Indebtedness to become or be declared due and payable (or
redeemable) prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be; or (iii) breach or default by Company
under the Swap Agreement, if the effect of such breach or default is to permit
the holder or holders of that Indebtedness to terminate the Swap Agreement and
all or substantially all of the outstanding transactions thereunder; or
(c) Breach of Certain Covenants. Failure of any Credit Party to
perform or comply with any term or condition contained in Section 2.6, Section
5.2 (as to the existence of any Credit Party) or Section 6; or
(d) Breach of Representations, etc. Any representation, warranty,
certification or other statement made or deemed made by any Credit Party in any
Credit Document or in any statement or certificate at any time given by any
Credit Party or any of its Subsidiaries in writing pursuant hereto or thereto or
in connection herewith or therewith shall be false in any material respect as of
the date made or deemed made; or
(e) Other Defaults Under Credit Documents. Any Credit Party shall
default in the performance of or compliance with any term contained herein or
any of the other Credit Documents, other than any such term referred to in any
other Section of this Section 8.1, and such default shall not have been remedied
or waived within thirty days after the earlier of (i) an officer of such Credit
Party becoming aware of such default or (ii) receipt by Company of notice from
Administrative Agent or any Lender of such default; or
(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A
court of competent jurisdiction shall enter a decree or order for relief in
respect of Company or any of its Subsidiaries in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, which decree or order is not stayed; or any
other similar relief shall be granted under any applicable federal or state law;
or (ii) an involuntary case shall be commenced against Company or any of its
Subsidiaries under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over Company or any of its Subsidiaries, or over all or a substantial
part of its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian of
Company or any of its Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of Company or any of
its Subsidiaries, and any such event described in this clause (ii) shall
continue for sixty days without having been dismissed, bonded or discharged; or
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(g) Voluntary Bankruptcy; Appointment of Receiver, etc.. (i) Company
or any of its Subsidiaries shall have an order for relief entered with respect
to it or shall commence a voluntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; or Company or any of its Subsidiaries shall make any assignment for
the benefit of creditors; or (ii) Company or any of its Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing its inability, to pay
its debts as such debts become due; or the board of directors (or similar
governing body) of Company or any of its Subsidiaries (or any committee thereof)
shall adopt any resolution or otherwise authorize any action to approve any of
the actions referred to herein or in Section 8.1(f); or
(h) Judgments and Attachments. Any money judgment, writ or warrant
of attachment or similar process involving (i) in any individual case an amount
in excess of $3,000,000 or (ii) in the aggregate at any time an amount in excess
of $10,000,000 (in either case to the extent not adequately covered by insurance
as to which a solvent and unaffiliated insurance company has acknowledged
coverage) shall be entered or filed against Company or any of its Subsidiaries
or any of their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of sixty days (or in any event later than five
days prior to the date of any proposed sale thereunder); or
(i) Dissolution. Any order, judgment or decree shall be entered
against any Credit Party decreeing the dissolution or split up of such Credit
Party and such order shall remain undischarged or unstayed for a period in
excess of thirty days; or
(j) Employee Benefit Plans. (i) There shall occur one or more ERISA
Events which individually or in the aggregate results in or might reasonably be
expected to result in liability of Company, any of its Subsidiaries or any of
their respective ERISA Affiliates in excess of $10,000,000 during the term
hereof; or (ii) there exists any fact or circumstance that reasonably could be
expected to result in the imposition of a Lien or security interest under
Section 412(n) of the Internal Revenue Code or under ERISA; or
(k) Change of Control. A Change of Control shall occur; or
(l) Guaranties, Collateral Documents and other Credit Documents. At
any time after the execution and delivery thereof, (i) the Guaranty for any
reason, other than the satisfaction in full of all Obligations, shall cease to
be in full force and effect (other than in accordance with its terms) or shall
be declared to be null and void or any Guarantor shall repudiate its obligations
thereunder, (ii) this Agreement or any Collateral Document ceases to be in full
force and effect (other than by reason of a release of Collateral in accordance
with the
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terms hereof or thereof or the satisfaction in full of the Obligations in
accordance with the terms hereof) or shall be declared null and void, or
Collateral Trustee shall not have or shall cease to have a valid and perfected
Lien in any Collateral purported to be covered by the Collateral Documents with
the priority required by the relevant Collateral Document, in each case for any
reason other than the failure of Collateral Trustee or any Secured Party to take
any action within its control, or (iii) any Credit Party shall contest the
validity or enforceability of any Credit Document in writing or deny in writing
that it has any further liability, including with respect to future advances by
Lenders, under any Credit Document to which it is a party; or
(m) Subordination. The lien subordination provisions contained in
the Collateral Trust Agreement shall cease, for any reason, to be in full force
and effect, or any Person that is a party thereto or holders of at least 25% the
aggregate principal amount of the Senior Secured Notes shall so assert;
THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g), automatically, and (2) upon the occurrence of any other Event
of Default, at the request of (or with the consent of) Requisite Lenders, upon
notice to Company by Administrative Agent, (A) the Revolving Commitments, if
any, of each Lender having such Revolving Commitments and the obligation of
Issuing Bank to issue any Letter of Credit shall immediately terminate; (B) the
Hedge L/C Commitments, if any, of each Lender having such Hedge L/C Commitments
and the obligation of Issuing Bank to issue any Hedge Letter of Credit shall
immediately terminate, (C) each of the following shall immediately become due
and payable, in each case without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by each
Credit Party: (I) the unpaid principal amount of and accrued interest on the
Loans, (II) an amount, to be held as cash collateral, equal to the maximum
amount that may at any time be drawn under all Letters of Credit then
outstanding (regardless of whether any beneficiary under any such Letter of
Credit shall have presented, or shall be entitled at such time to present, the
drafts or other documents or certificates required to draw under such Letters of
Credit), (III) an amount, to be held as cash collateral, equal to the maximum
amount that may at any time be drawn under all Hedge Letters of Credit then
outstanding (regardless of whether any beneficiary under any such Hedge Letter
of Credit shall have presented, or shall be entitled at such time to present,
the drafts or other documents or certificates required to draw under the Hedge
Letters of Credit) and (IV) all other Obligations; provided, the foregoing shall
not affect in any way the obligations of Lenders under Section 2.4(e); (D)
Administrative Agent may cause Collateral Trustee to enforce any and all Liens
and security interests created pursuant to Collateral Documents; and (E)
Administrative Agent shall direct Company to pay (and Company hereby agrees upon
receipt of such notice, or upon the occurrence of any Event of Default specified
in Section 8.1(f) and (g) to pay) to Administrative Agent such additional
amounts of cash, to be held as security for Company's reimbursement Obligations
in respect of (i) Letters of
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Credit then outstanding, equal to the Letter of Credit Usage at such time and
(ii) Hedge Letters of Credit then outstanding, equal to the Hedge Letter of
Credit Usage at such time.
SECTION 9. AGENTS
9.1. APPOINTMENT OF AGENTS.
GSCP is hereby appointed Syndication Agent hereunder, and each Lender
hereby authorizes Syndication Agent to act as its agent in accordance with the
terms hereof and the other Credit Documents. GSCP is hereby appointed
Administrative Agent hereunder and under the other Credit Documents and each
Lender hereby authorizes Administrative Agent to act as its agent in accordance
with the terms hereof and the other Credit Documents. GECC is hereby appointed
Co-Documentation Agent hereunder and National City is hereby appointed
Co-Documentation Agent hereunder, and each Lender hereby authorizes the
Documentation Agents to act as their agent in accordance with the terms hereof
and the other Credit Documents. Each Agent hereby agrees to act upon the express
conditions contained herein and the other Credit Documents, as applicable. The
provisions of this Section 9 are solely for the benefit of Agents and Lenders
and no Credit Party shall have any rights as a third party beneficiary of any of
the provisions thereof. In performing its functions and duties hereunder, each
Agent shall act solely as an agent of Lenders and does not assume and shall not
be deemed to have assumed any obligation towards or relationship of agency or
trust with or for Company or any of its Subsidiaries. Each of Syndication Agent
and Documentation Agents, without consent of or notice to any party hereto, may
assign any and all of its rights or obligations hereunder to any of its
Affiliates. As of the Closing Date, neither GSCP, in its capacity as Syndication
Agent, nor GECC and National City, in their capacity as Documentation Agents,
shall have any obligations but shall be entitled to all benefits of this Section
9.
9.2. POWERS AND DUTIES.
Each Lender irrevocably authorizes each Agent to take such action on such
Lender's behalf and to exercise such powers, rights and remedies hereunder and
under the other Credit Documents as are specifically delegated or granted to
such Agent by the terms hereof and thereof, together with such powers, rights
and remedies as are reasonably incidental thereto. Each Agent shall have only
those duties and responsibilities that are expressly specified herein and the
other Credit Documents. Each Agent may exercise such powers, rights and remedies
and perform such duties by or through its agents or employees. No Agent shall
have, by reason hereof or any of the other Credit Documents, a fiduciary
relationship in respect of any Lender; and nothing herein or any of the other
Credit Documents, expressed or implied, is intended to or shall be so construed
as to impose upon any Agent any obligations in respect hereof or any of the
other Credit Documents except as expressly set forth herein or therein.
9.3. GENERAL IMMUNITY.
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(a) No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectability or sufficiency hereof or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any Agent to Lenders or by or on behalf of any
Credit Party, any Lender or any person providing the Settlement Service to any
Agent or any Lender in connection with the Credit Documents and the transactions
contemplated thereby or for the financial condition or business affairs of any
Credit Party or any other Person liable for the payment of any Obligations, nor
shall any Agent be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Credit Documents or as to the use of the proceeds of the
Loans or as to the existence or possible existence of any Event of Default or
Default or to make any disclosures with respect to the foregoing. Anything
contained herein to the contrary notwithstanding, Administrative Agent shall not
have any liability arising from confirmations of the amount of outstanding Loans
or the Letter of Credit Usage or Hedge Letter of Credit Usage or the component
amounts thereof.
(b) Exculpatory Provisions. No Agent nor any of its officers,
partners, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by any Agent under or in connection with any of the
Credit Documents except to the extent caused by such Agent's gross negligence or
willful misconduct. Each Agent shall be entitled to refrain from any act or the
taking of any action (including the failure to take an action) in connection
herewith or any of the other Credit Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under Section 10.5) and, upon receipt of such instructions from Requisite
Lenders (or such other Lenders, as the case may be), such Agent shall be
entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, including any
Settlement Confirmation or other communication issues by any Settlement Service,
and shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Company and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against any Agent as a result
of such Agent acting or (where so instructed) refraining from acting hereunder
or any of the other Credit Documents in accordance
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with the instructions of Requisite Lenders (or such other Lenders as may be
required to give such instructions under Section 10.5).
(c) Delegation of Duties. Administrative Agent may perform any and
all of its duties and exercise its rights and powers under this Agreement or
under any other Credit Document by or through any one or more sub-agents
appointed by Administrative Agent. Administrative Agent and any such sub-agent
may perform any and all of its duties and exercise its rights and powers by or
through their respective Affiliates. The exculpatory, indemnification and other
provisions of this Section 9.3 and of Section 9.6 shall apply to any the
Affiliates of Administrative 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. All of the rights,
benefits, and privileges (including the exculpatory and indemnification
provisions) of this Section 9.3 and of Section 9.6 shall apply to any such
sub-agent and to the Affiliates of any such sub-agent, and shall apply to their
respective activities as sub-agent as if such sub-agent and Affiliates were
named herein. Notwithstanding anything herein to the contrary, with respect to
each sub-agent appointed by the Administrative Agent, (i) such sub-agent shall
be a third party beneficiary under this Agreement with respect to all such
rights, benefits and privileges (including exculpatory rights and rights to
indemnification) and shall have all of the rights and benefits of a third party
beneficiary, including an independent right of action to enforce such rights,
benefits and privileges (including exculpatory rights and rights to
indemnification) directly, without the consent or joinder of any other Person,
against any or all of the Credit Parties and the Lenders, (ii) such rights,
benefits and privileges (including exculpatory rights and rights to
indemnification) shall not be modified or amended without the consent of such
sub-agent, and (iii) such sub-agent shall only have obligations to
Administrative Agent and not to any Credit Party, Lender or any other Person and
no Credit Party, Lender or any other Person shall have any rights, directly or
indirectly, as a third party beneficiary or otherwise, against such sub-agent.
9.4. AGENTS ENTITLED TO ACT AS LENDER.
The agency hereby created shall in no way impair or affect any of the
rights and powers of, or impose any duties or obligations upon, any Agent in its
individual capacity as a Lender hereunder. With respect to its participation in
the Loans and the Letters of Credit and Hedge Letters of Credit, each Agent
shall have the same rights and powers hereunder as any other Lender and may
exercise the same as if it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" shall, unless the context
clearly otherwise indicates, include each Agent in its individual capacity. Any
Agent and its Affiliates may accept deposits from, lend money to, own securities
of, and generally engage in any kind of banking, trust, financial advisory or
other business with Company or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from
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Company for services in connection herewith and otherwise without having to
account for the same to Lenders.
9.5. LENDERS' REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT.
(a) Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with Credit Extensions hereunder and that it has
made and shall continue to make its own appraisal of the creditworthiness of
Company and its Subsidiaries. No Agent shall have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Loans or at any time or times thereafter, and no Agent
shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
(b) Each Lender, by delivering its signature page to this Agreement
and funding its Term Loan and/or Revolving Loans on the Closing Date, shall be
deemed to have acknowledged receipt of, and consented to and approved, each
Credit Document and each other document required to be approved by any Agent,
Requisite Lenders or Lenders, as applicable on the Closing Date and posted to
IntraLinks.
9.6. RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent and each Issuing Bank, to the extent that such Agent or
Issuing Bank shall not have been reimbursed by any Credit Party, for and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including reasonable counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against such Agent or Issuing Bank in
exercising its powers, rights and remedies or performing its duties hereunder or
under the other Credit Documents or otherwise in its capacity as such Agent or
Issuing Bank in any way relating to or arising out of this Agreement or the
other Credit Documents; provided, no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such Agent's or Issuing
Bank's gross negligence or willful misconduct. If any indemnity furnished to any
Agent or Issuing Bank for any purpose shall, in the opinion of such Agent or
Issuing Bank, be insufficient or become impaired, such Agent or Issuing Bank may
call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished; provided, in
no event shall this sentence require any Lender to indemnify any Agent against
any liability, obligation, loss, damage, penalty, action, judgment, suit, cost,
expense or disbursement in excess of such Lender's Pro Rata Share thereof; and
provided further, this sentence shall not be deemed to require any
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Lender to indemnify any Agent or Issuing Bank against any liability, obligation,
loss, damage, penalty, action, judgment, suit, cost, expense or disbursement
described in the proviso in the immediately preceding sentence.
9.7. SUCCESSOR ADMINISTRATIVE AGENT.
Administrative Agent may resign at any time by giving thirty days' prior
written notice thereof to Lenders and Company, and Administrative Agent may be
removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to Company and Administrative Agent and signed
by Requisite Lenders. Upon any such notice of resignation or any such removal,
Requisite Lenders shall have the right, upon five Business Days' notice to
Company, and in consultation with Company, to appoint a successor Administrative
Agent. Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent and the retiring or
removed Administrative Agent shall promptly (i) transfer to such successor
Administrative Agent all sums, Securities and other items of Collateral held
under the Collateral Documents, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Administrative Agent under the Credit Documents, and (ii) execute and
deliver to such successor Administrative Agent such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Administrative Agent of the
security interests created under the Collateral Documents, whereupon such
retiring or removed Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring or removed Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent hereunder.
9.8. COLLATERAL DOCUMENTS AND GUARANTY.
(a) Agents under Collateral Documents and Guaranty. Each Lender
hereby further authorizes Administrative Agent or any other Person appointed by
Administrative Agent, on behalf of and for the benefit of Lenders, to (i) be the
agent for and representative of Lenders with respect to the Guaranty, the
Collateral and the Collateral Documents and (ii) enter into the Collateral Trust
Agreement and appoint the Collateral Trustee to act on behalf of the Agents and
the Lenders with respect to the Collateral, and each Lender agrees to be bound
by the terms of the Collateral Trust Agreement. Subject to Section 10.5, without
further written consent or authorization from Lenders, Administrative Agent or
any other Person appointed by Administrative Agent may execute any documents or
instruments necessary to (i) in accordance with the terms of the Collateral
Trust Agreement and the Collateral Documents, release, or authorize the release
of, any Lien encumbering any item of Collateral that is the subject of a sale
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or other disposition of assets permitted hereby or to which Requisite Lenders
(or such other Lenders as may be required to give such consent under Section
10.5) have otherwise consented or (ii) release any Guarantor from the Guaranty
pursuant to Section 7.12 or with respect to which Requisite Lenders (or such
other Lenders as may be required to give such consent under Section 10.5) have
otherwise consented; provided that Administrative Agent shall not enter into or
consent to any material amendment, modification, termination or waiver of the
Collateral Trust Agreement without the prior consent of Requisite Lenders (or
such other Lenders as may be required to give such instructions under subsection
10.5).
(b) Right to Realize on Collateral and Enforce Guaranty. Anything
contained in any of the Credit Documents to the contrary notwithstanding,
Company, Administrative Agent and each Lender hereby agree that (i) no Lender
shall have any right individually to realize upon any of the Collateral or to
enforce the Guaranty, it being understood and agreed that all powers, rights and
remedies hereunder may be exercised solely by Administrative Agent, on behalf of
Lenders in accordance with the terms hereof and all powers, rights and remedies
under the Collateral Documents may be exercised solely by Administrative Agent
or Collateral Trustee, as applicable, and (ii) in the event of a foreclosure by
Collateral Trustee on any of the Collateral pursuant to a public or private
sale, Administrative Agent or any Lender may be the purchaser of any or all of
such Collateral at any such sale and Administrative Agent, as agent for and
representative of Secured Parties (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing) shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Obligations as a credit on
account of the purchase price for any collateral payable by Administrative Agent
at such sale.
SECTION 10. MISCELLANEOUS
10.1. NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given to a Credit Party,
Syndication Agent, Administrative Agent, Issuing Bank or Documentation Agent,
shall be sent to such Person's address as set forth on Appendix B or in the
other relevant Credit Document, and in the case of any Lender, the address as
indicated on Appendix B or otherwise indicated to Administrative Agent in
writing. Each notice hereunder shall be in writing and may be personally served,
telexed or sent by telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or by courier
service and signed for against receipt thereof, upon receipt of telefacsimile or
telex, or three Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided, no notice to any Agent shall
be effective until received by such Agent; provided further, any such notice or
other communication
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shall at the request of the Administrative Agent be provided to any sub-agent
appointed pursuant to Section 9.3(c) hereto as designated by the Administrative
Agent from time to time.
10.2. EXPENSES.
Whether or not the transactions contemplated hereby shall be consummated,
Company agrees to pay promptly (a) all the actual and reasonable costs and
expenses of preparation of the Credit Documents and any consents, amendments,
waivers or other modifications thereto; (b) all the costs of furnishing all
opinions by counsel for Company and the other Credit Parties; (c) the reasonable
fees, expenses and disbursements of counsel to Agents in connection with the
negotiation, preparation, execution and administration of the Credit Documents
and any consents, amendments, waivers or other modifications thereto and any
other documents or matters requested by Company; (d) all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Collateral
Trustee, for the benefit of Administrative Agent and Lenders pursuant hereto,
including filing and recording fees, expenses and taxes, stamp or documentary
taxes, search fees, title insurance premiums and reasonable fees, expenses and
disbursements of counsel to each Agent and Collateral Trustee and of counsel
providing any opinions that any Agent, Collateral Trustee or Requisite Lenders
may request in respect of the Collateral or the Liens created pursuant to the
Collateral Documents; (e) all the actual costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any appraisers,
consultants, advisors and agents employed or retained by Collateral Trustee and
Administrative Agent and their respective counsel) in connection with the
custody or preservation of any of the Collateral; (g) all other actual and
reasonable costs and expenses incurred by each Agent in connection with the
syndication of the Loans and Commitments and the negotiation, preparation and
execution of the Credit Documents and any consents, amendments, waivers or other
modifications thereto and the transactions contemplated thereby; and (h) after
the occurrence of a Default or an Event of Default, all costs and expenses,
including reasonable attorneys' fees and costs of settlement, incurred by any
Agent, Collateral Trustee and Lenders in enforcing any Obligations of or in
collecting any payments due from any Credit Party hereunder or under the other
Credit Documents by reason of such Default or Event of Default (including in
connection with the sale of, collection from, or other realization upon any of
the Collateral or the enforcement of the Guaranty) or in connection with any
refinancing or restructuring of the credit arrangements provided hereunder in
the nature of a "work-out" or pursuant to any insolvency or bankruptcy cases or
proceedings.
10.3. INDEMNITY.
(a) In addition to the payment of expenses pursuant to Section 10.2,
whether or not the transactions contemplated hereby shall be consummated, each
Credit Party agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless, each Agent, each Issuing Bank and Lender and
the officers, partners, directors, trustees, advisors,
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employees, agents, sub-agents and Affiliates of each Agent, the Collateral
Trustee and each Lender (each, an "INDEMNITEE"), from and against any and all
Indemnified Liabilities; provided, no Credit Party shall have any obligation to
any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise from the gross negligence or willful
misconduct of that Indemnitee. To the extent that the undertakings to defend,
indemnify, pay and hold harmless set forth in this Section 10.3 may be
unenforceable in whole or in part because they are violative of any law or
public policy, the applicable Credit Party shall contribute the maximum portion
that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.
(b) To the extent permitted by applicable law, no Credit Party shall
assert, and each Credit Party hereby waives, any claim against Lenders, Agents,
each Issuing Bank and their respective Affiliates, directors, employees,
attorneys, agents or sub-agents, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) (whether or not the claim therefor is based on contract, tort or duty
imposed by any applicable legal requirement) arising out of, in connection with,
arising out of, as a result of, or in any way related to, this Agreement or any
Credit Document or any agreement or instrument contemplated hereby or thereby or
referred to herein or therein, the transactions contemplated hereby or thereby,
any Loan or the use of the proceeds thereof or any act or omission or event
occurring in connection therewith, and Company hereby waives, releases and
agrees not to sue upon any such claim or any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
10.4. SET-OFF.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Issuing Bank and Lender is hereby
authorized by each Credit Party at any time or from time to time subject to the
consent of Administrative Agent (such consent not to be unreasonably withheld or
delayed), without notice to any Credit Party or to any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by such Issuing Bank or Lender to or for the credit or the
account of any Credit Party against and on account of the obligations and
liabilities of any Credit Party to such Issuing Bank or Lender hereunder, the
Letters of Credit and Hedge Letters of Credit and participations therein and
under the other Credit Documents, including all claims of any nature or
description arising out of or connected hereto, the Letters of Credit and Hedge
Letters of Credit and participations therein or with any other Credit Document,
irrespective of whether or not (a) such Issuing Bank or Lender shall have made
any demand hereunder or (b) the principal of or the interest on the Loans or any
amounts in respect of the Letters of Credit or Hedge Letters of
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Credit or any other amounts due hereunder shall have become due and payable
pursuant to Section 2 and although such obligations and liabilities, or any of
them, may be contingent or unmatured.
10.5. AMENDMENTS AND WAIVERS.
(a) Requisite Lenders' Consent. Subject to Section 10.5(b) and
10.5(c), no amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party therefrom,
shall in any event be effective without the written concurrence of the Requisite
Lenders.
(b) Affected Lenders' Consent. Without the written consent of each
Lender (other than a Defaulting Lender) that would be affected thereby, no
amendment, modification, termination, or consent shall be effective if the
effect thereof would:
(i) extend the scheduled final maturity of any Loan or Note;
(ii) waive, reduce or postpone any scheduled repayment (but
not prepayment);
(iii) (x) extend the stated expiration date of any Letter of
Credit beyond the Revolving Commitment Termination Date or (y) extend the
stated expiration date of any Hedge Letter of Credit beyond the Hedge L/C
Commitment Termination Date;
(iv) reduce the rate of interest on any Loan (other than any
waiver of any increase in the interest rate applicable to any Loan
pursuant to Section 2.10) or any fee payable hereunder;
(v) extend the time for payment of any such interest or fees;
(vi) reduce or forgive the principal amount of any Loan or any
reimbursement obligation in respect of any Letter of Credit or Hedge
Letter of Credit;
(vii) amend, modify, terminate or waive any provision of this
Section 10.5(b) or Section 10.5(c);
(viii) amend the definition of "REQUISITE LENDERS" or "PRO
RATA SHARE"; provided, with the consent of Requisite Lenders, additional
extensions of credit pursuant hereto may be included in the determination
of "REQUISITE LENDERS" or "PRO RATA SHARE" on substantially the same basis
as the Term Loan Commitments, the Term
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Loans, the Revolving Commitments, the Revolving Loans, the Hedge L/C
Commitments and the Hedge L/C Loans are included on the Closing Date;
(ix) release all or substantially all of the Collateral or all
Guarantors or any material Guarantor from the Guaranty except as expressly
provided in the Credit Documents;
(x) consent to the assignment or transfer by any Credit Party
of any of its rights and obligations under any Credit Document; or
(xi) amend any provision in Section 10.6 which has the effect
of further restricting Lenders' ability to assign or transfer all or a
portion of their rights and obligations under this Agreement, other than
any amendments with respect to the settlement of assignments through a
Settlement Service.
(c) Other Consents. No amendment, modification, termination or
waiver of any provision of the Credit Documents, or consent to any departure by
any Credit Party therefrom, shall:
(i) increase any Revolving Commitment of any Lender over the
amount thereof then in effect without the consent of such Lender;
provided, no amendment, modification or waiver of any condition precedent,
covenant, Default or Event of Default shall constitute an increase in any
Revolving Commitment of any Lender;
(ii) amend the definition of "REQUISITE CLASS LENDERS" without
the consent of Requisite Class Lenders of each Class; provided, with the
consent of the Requisite Lenders, additional extensions of credit pursuant
hereto may be included in the determination of such "REQUISITE CLASS
LENDERS" on substantially the same basis as the Term Loan Commitments, the
Term Loans, the Revolving Commitments and the Revolving Loans are included
on the Closing Date;
(iii) alter the requirement to make, or the required
application of any repayments or prepayments as between Classes pursuant
to Sections 2.14 or 2.15 hereof or Section 7.2 of the Pledge and Security
Agreement without the consent of Requisite Class Lenders of each Class
which would receive a lesser repayment or prepayment as a result thereof;
[provided, Requisite Lenders may waive, in whole or in part, any
prepayment so long as the application, as between Classes, of any portion
of such prepayment which is still required to be made is not altered];
(iv) amend, modify, terminate or waive (A) any obligation of
Lenders relating to the purchase of participations in Letters of Credit or
Hedge Letter of Credit as
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provided in Section 2.4(e) or any other provision set forth in Section 2.4
without the written consent of Administrative Agent and of Issuing Bank or
(B) the last paragraph of Section 8.1 as it relates to the cash
collateralization of letter of credit obligations without the prior
written consent of each Issuing Bank; or
(v) amend, modify, terminate or waive any provision of Section
9 as the same applies to any Agent, or any other provision hereof as the
same applies to the rights or obligations of any Agent, in each case
without the consent of such Agent.
(d) Execution of Amendments, etc. Administrative Agent may, but
shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of such Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice
or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 10.5
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by a Credit Party, on such Credit Party.
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) Generally. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of the parties hereto and the successors and assigns of Lenders. No
Credit Party's rights or obligations hereunder nor any interest therein may be
assigned or delegated by any Credit Party without the prior written consent of
all Lenders. 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 and, to the extent expressly
contemplated hereby, Affiliates of each of the Agents and Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Register. Company, Administrative Agent and Lenders shall deem
and treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Commitment or Loan
shall be effective, in each case, unless and until recorded in the Register
following receipt of (x) a written or electronic confirmation of an assignment
issued by a Settlement Service pursuant to Section 10.6(d) (a "SETTLEMENT
CONFIRMATION") or (y) an Assignment Agreement effecting the assignment or
transfer thereof, in each case, as provided in Section 10.6(d). Each assignment
shall be recorded in the Register on the Business Day the Settlement
Confirmation or Assignment Agreement is received by the Administrative Agent, if
received by 12:00 noon New York City time, and on the following Business Day if
received after
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such time, prompt notice thereof shall be provided to Company and a copy of such
Assignment Agreement or Settlement Confirmation shall be maintained, as
applicable. The date of such recordation of a transfer shall be referred to
herein as the "ASSIGNMENT EFFECTIVE DATE." Any request, authority or consent of
any Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding
on any subsequent holder, assignee or transferee of the corresponding
Commitments or Loans.
(c) Right to Assign. Each Lender shall have the right at any time to
sell, assign or transfer all or a portion of its rights and obligations under
this Agreement, including, without limitation, all or a portion of its
Commitment or Loans owing to it or other Obligation (provided, however, that
each such assignment shall be of a uniform, and not varying, percentage of all
rights and obligations under and in respect of any Loan and any related
Commitments):
(i) to any Person meeting the criteria of clause (i) of the
definition of the term of "Eligible Assignee" upon the giving of notice to
Company and Administrative Agent; and
(ii) to any Person meeting the criteria of clause (ii) of the
definition of the term of "Eligible Assignee" and, in the case of
assignments of Revolving Loans, Revolving Commitments, Hedge L/C Loans or
Hedge L/C Commitments to any such Person (except in the case of
assignments made by or to GSCP) consented to by each of Company, each
Issuing Bank and Administrative Agent (such consent not to be (x)
unreasonably withheld or delayed or, (y) in the case of Company, required
at any time an Event of Default shall have occurred and then be
continuing); provided, further each such assignment pursuant to this
Section 10.6(c)(ii) shall be in an aggregate amount of not less than (A)
$1,000,000 (or such lesser amount as may be agreed to by Company and
Administrative Agent or as shall constitute the aggregate amount of the
Revolving Commitments and Revolving Loans or Hedge L/C Loans or Hedge L/C
Commitments of the assigning Lender) with respect to the assignment of the
Revolving Commitments and Revolving Loans or Hedge L/C Loans or Hedge L/C
Commitments and (B) $1,000,000 (or such lesser amount as may be agreed to
by Company and Administrative Agent or as shall constitute the aggregate
amount of the Term Loan of the assigning Lender) with respect to the
assignment of Term Loans; provided such minimum assignment amount for Term
Loans shall be $500,000 until the date which is thirty (30) days following
the Closing Date.
(d) Mechanics. Assignments of Term Loans by Lenders may be made via
an electronic settlement system acceptable to Administrative Agent as designated
in writing from time to time to the Lenders by Administrative Agent (the
"SETTLEMENT SERVICE"). Each such assignment shall be effected by the assigning
Lender and proposed assignee pursuant to the procedures then in effect under the
Settlement Service, which procedures shall be consistent with
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the other provisions of this Section 10.6. Each assignor Lender and proposed
assignee shall comply with the requirements of the Settlement Service in
connection with effecting any transfer of Loans pursuant to the Settlement
Service. Administrative Agent's and Company's consent shall be deemed to have
been granted pursuant to Section 10.6(c)(ii) with respect to any transfer
effected through the Settlement Service. Subject to the other requirements of
this Section 10.6, assignments and assumptions of Term Loans may also be
effected by manual execution delivery to the Administrative Agent of an
Assignment Agreement with, in the case of assignments to Persons meeting the
requirements of clause (ii) of the definition of "Eligible Assignee", the prior
written consent (except in the case of assignments made by or to GSCP) of each
of Company and Administrative Agent (such consent not to be (x) unreasonably
withheld or delayed or (y) in the case of Company, required at any time an Event
of Default shall have occurred and then be continuing). Initially, assignments
and assumptions of Term Loans shall be effected by such manual execution until
Administrative Agent notifies Lenders to the contrary. Assignments and
assumptions of Revolving Loans, Revolving Commitments, Hedge L/C Loans and Hedge
L/C Commitments shall only be effected by manual execution and delivery to the
Administrative Agent of an Assignment Agreement. Assignments made pursuant to
the foregoing provision shall be effective as of the Assignment Effective Date.
In connection with all assignments there shall be delivered to Administrative
Agent such forms, certificates or other evidence, if any, with respect to United
States federal income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver pursuant to Section 2.20(c).
Notwithstanding anything herein or in any Assignment Agreement to the contrary
and (i) unless notice to the contrary is delivered to the Lenders from the
Administrative Agent or (ii) so long as no Default or Event of Default has
occurred and is continuing, payment to the assignor by the assignee in respect
of the settlement of an assignment of any Term Loan (but not any Revolving Loan
or Revolving Commitment) shall include such compensation to the assignor as may
be agreed upon by the assignor and the assignee with respect to all unpaid
interest which has accrued on such Term Loan to but excluding the Assignment
Effective Date. On and after the applicable Assignment Effective Date, the
applicable assignee shall be entitled to receive all interest paid or payable
with respect to the assigned Term Loan, whether such interest accrued before or
after the applicable Assignment Effective Date.
(e) Representations and Warranties of Assignee. Each Lender, upon
execution and delivery hereof or upon succeeding to an interest in the
Commitments and Loans, as the case may be, represents and warrants as of the
Closing Date or as of the Assignment Effective Date that (i) it is an Eligible
Assignee; (ii) it has experience and expertise in the making of or investing in
commitments or loans such as the applicable Commitments or Loans, as the case
may be; and (iii) it will make or invest in, as the case may be, its Commitments
or Loans for its own account in the ordinary course of its business and without
a view to distribution of such Commitments or Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this Section 10.6, the
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disposition of such Revolving Commitments or Loans or any interests therein
shall at all times remain within its exclusive control).
(f) Effect of Assignment. Subject to the terms and conditions of
this Section 10.6, as of the Assignment Effective Date: (i) the assignee
thereunder shall have the rights and obligations of a "Lender" hereunder to the
extent of its interest in the Loans and Commitments as reflected in the Register
and shall thereafter be a party hereto and a "Lender" for all purposes hereof;
(ii) the assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned to the assignee, relinquish its rights
(other than any rights which survive the termination hereof under Section 10.8)
and be released from its obligations hereunder (and, in the case of an
assignment covering all or the remaining portion of an assigning Lender's rights
and obligations hereunder, such Lender shall cease to be a party hereto on the
Assignment Effective Date; provided, anything contained in any of the Credit
Documents to the contrary notwithstanding, (y) Issuing Bank shall continue to
have all rights and obligations thereof with respect to such Letters of Credit
or Hedge Letters of Credit, as the case may be, until the cancellation or
expiration of such Letters of Credit or Hedge Letters of Credit, as applicable,
and the reimbursement of any amounts drawn thereunder and (z) such assigning
Lender shall continue to be entitled to the benefit of all indemnities hereunder
as specified herein with respect to matters arising out of the prior involvement
of such assigning Lender as a Lender hereunder); (iii) the Commitments shall be
modified to reflect the Commitment of such assignee and any Revolving Commitment
of such assigning Lender, if any; and (iv) if any such assignment occurs after
the issuance of any Note hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as practicable,
surrender its applicable Notes to Administrative Agent for cancellation, and
thereupon Company shall issue and deliver new Notes, if so requested by the
assignee and/or assigning Lender, to such assignee and/or to such assigning
Lender, with appropriate insertions, to reflect the new Revolving Commitments
and/or outstanding Loans of the assignee and/or the assigning Lender.
(g) Participations. Each Lender shall have the right at any time to
sell one or more participations to any Person (other than Company, any of its
Subsidiaries or any of its Affiliates) in all or any part of its Commitments,
Loans or in any other Obligation. The holder of any such participation, other
than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder
except with respect to any amendment, modification or waiver that would (i)
extend the final scheduled maturity of any Loan, Note, Letter of Credit or Hedge
Letter of Credit (unless such Letter of Credit or Hedge Letter of Credit is not
extended beyond the Revolving Commitment Termination Date or Hedge L/C
Commitment Termination Date, as applicable) in which such participant is
participating, or reduce the rate or extend the time of payment of interest or
fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the amount of the participant's
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participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Commitment shall not constitute a change in the terms of such participation, and
that an increase in any Commitment or Loan shall be permitted without the
consent of any participant if the participant's participation is not increased
as a result thereof), (ii) consent to the assignment or transfer by any Credit
Party of any of its rights and obligations under this Agreement or (iii) release
all or substantially all of the Collateral under the Collateral Documents
(except as expressly provided in the Credit Documents) supporting the Loans
hereunder in which such participant is participating. Company agrees that each
participant shall be entitled to the benefits of Sections 2.18(c), 2.19 and 2.20
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (c) of this Section; provided, (i) a
participant shall not be entitled to receive any greater payment under Section
2.19 or 2.20 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 Company's prior written consent
and (ii) a participant that would be a Non-US Lender if it were a Lender shall
not be entitled to the benefits of Section 2.20 unless Company is notified of
the participation sold to such participant and such participant agrees, for the
benefit of Company, to comply with Section 2.20 as though it were a Lender. To
the extent permitted by law, each participant also shall be entitled to the
benefits of Section 10.4 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.17 as though it were a Lender.
(i) Certain Other Assignments. In addition to any other assignment
permitted pursuant to this Section 10.6, (i) any Lender may assign and/or pledge
all or any portion of its Loans, the other Obligations owed by or to such
Lender, and its Notes, if any, to secure obligations of such Lender including,
without limitation, any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
operating circular issued by such Federal Reserve Bank; provided, no Lender, as
between Company and such Lender, shall be relieved of any of its obligations
hereunder as a result of any such assignment and pledge, and provided further,
in no event shall the applicable Federal Reserve Bank, pledgee or trustee be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
10.7. INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or condition exists.
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
All representations, warranties and agreements made herein shall survive
the execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or
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implied by law to the contrary, the agreements of each Credit Party set forth in
Sections 2.18(c), 2.19, 2.20, 10.2, 10.3 and 10.4 and the agreements of Lenders
set forth in Sections 2.17, 9.3(b) and 9.6 shall survive the payment of the
Loans, the cancellation or expiration of the Letters of Credit and the Hedge
Letters of Credit and the reimbursement of any amounts drawn thereunder, and the
termination hereof.
10.9. NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of any Agent or any Lender in the exercise
of any power, right or privilege hereunder or under any other Credit Document
shall impair such power, right or privilege or be construed to be a waiver of
any default or acquiescence therein, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other power, right or privilege. The rights, powers and remedies given to
each Agent and each Lender hereby are cumulative and shall be in addition to and
independent of all rights, powers and remedies existing by virtue of any statute
or rule of law or in any of the other Credit Documents or any of the Hedge
Agreements. Any forbearance or failure to exercise, and any delay in exercising,
any right, power or remedy hereunder shall not impair any such right, power or
remedy or be construed to be a waiver thereof, nor shall it preclude the further
exercise of any such right, power or remedy.
10.10. MARSHALLING; PAYMENTS SET ASIDE.
Neither any Agent nor any Lender shall be under any obligation to marshal
any assets in favor of any Credit Party or any other Person or against or in
payment of any or all of the Obligations. To the extent that any Credit Party
makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent, on behalf of Lenders), or Administrative Agent or Lenders
enforce any security interests or exercise their rights of setoff, and such
payment or payments or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, any other state or federal law, common law or any
equitable cause, then, to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied, and all Liens, rights and remedies
therefor or related thereto, shall be revived and continued in full force and
effect as if such payment or payments had not been made or such enforcement or
setoff had not occurred.
10.11. SEVERABILITY.
In case any provision in or obligation hereunder or any Note shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
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The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitment of any other Lender hereunder.
Nothing contained herein or in any other Credit Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.
10.13. HEADINGS.
Section headings herein are included herein for convenience of reference
only and shall not constitute a part hereof for any other purpose or be given
any substantive effect.
10.14. APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
10.15. CONSENT TO JURISDICTION.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY CREDIT PARTY ARISING OUT OF
OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY
BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH
CREDIT PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (a)
ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF
SUCH COURTS; (b) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (c) AGREES THAT
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE CREDIT
PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1; (d) AGREES THAT
SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER THE APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH
COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
AND (e) AGREES AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
145
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY
IN THE COURTS OF ANY OTHER JURISDICTION.
10.16. WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR
UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP
THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT
TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON
THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS
AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT
IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SECTION 10.16 AND EXECUTED BY EACH OF THE PARTIES
HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO
ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.
10.17. CONFIDENTIALITY.
Each Lender shall hold all non-public information regarding Company and
its Subsidiaries and their businesses identified as such by Company and obtained
by such Lender pursuant to the requirements hereof in accordance with such
Lender's customary procedures for handling confidential information of such
nature, it being understood and agreed by Company that, in any event, a Lender
may make (i) disclosures of such information to Affiliates of such Lender and to
their agents, trustees and advisors (and to other persons authorized by a Lender
or Agent to organize, present or disseminate such information in connection with
disclosures otherwise made
146
in accordance with this Section 10.17), (ii) disclosures of such information
reasonably required by any bona fide or potential assignee, transferee or
participant in connection with the contemplated assignment, transfer or
participation by such Lender of any Loans or any participations therein or by
any direct or indirect contractual counterparties (or the professional advisors
thereto) in Hedge Agreements (provided, such counterparties and advisors are
advised of and agree to be bound by the provisions of this Section 10.17), (iii)
disclosure to any rating agency when required by it, provided that, prior to any
disclosure, such rating agency shall undertake in writing to preserve the
confidentiality of any confidential information relating to the Credit Parties
received by it from any of the Agents or any Lender, and (iv) disclosures
required or requested by any governmental agency or representative thereof or by
the NAIC or pursuant to legal or judicial process; provided, unless specifically
prohibited by applicable law or court order, each Lender shall make reasonable
efforts to notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition or other routine examination of such
Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information.
10.18. USURY SAVINGS CLAUSE.
Notwithstanding any other provision herein, the aggregate interest rate
charged with respect to any of the Obligations, including all charges or fees in
connection therewith deemed in the nature of interest under applicable law shall
not exceed the Highest Lawful Rate. If the rate of interest (determined without
regard to the preceding sentence) under this Agreement at any time exceeds the
Highest Lawful Rate, the outstanding amount of the Loans made hereunder shall
bear interest at the Highest Lawful Rate until the total amount of interest due
hereunder equals the amount of interest which would have been due hereunder if
the stated rates of interest set forth in this Agreement had at all times been
in effect. In addition, if when the Loans made hereunder are repaid in full the
total interest due hereunder (taking into account the increase provided for
above) is less than the total amount of interest which would have been due
hereunder if the stated rates of interest set forth in this Agreement had at all
times been in effect, then to the extent permitted by law, Company shall pay to
Administrative Agent an amount equal to the difference between the amount of
interest paid and the amount of interest which would have been paid if the
Highest Lawful Rate had at all times been in effect. Notwithstanding the
foregoing, it is the intention of Lenders and Company to conform strictly to any
applicable usury laws. Accordingly, if any Lender contracts for, charges, or
receives any consideration which constitutes interest in excess of the Highest
Lawful Rate, then any such excess shall be cancelled automatically and, if
previously paid, shall at such Lender's option be applied to the outstanding
amount of the Loans made hereunder or be refunded to Company.
10.19. COUNTERPARTS.
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This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
10.20. EFFECTIVENESS.
This Agreement shall become effective upon the execution of a counterpart
hereof by each of the parties hereto and receipt by Company and Administrative
Agent of written or telephonic notification of such execution and authorization
of delivery thereof. Upon the effectiveness of this Agreement and the occurrence
of the Closing Date, the Commitment Letter, dated as of June 15, 2004, by GSCP
in favor of Company shall have no further force or effect, except with respect
to such provisions which explicitly survive the termination of the Commitment
Letter by reason of the occurrence of the Closing Date. Each of the parties
hereto agrees that this Agreement as amended as of the date hereof supersedes
the Agreement as executed on July 7, 2004. In addition, unless specifically
amended hereby, each of the Credit Documents, the Exhibits and Schedules to this
Agreement shall continue in full force and effect.
10.21. USA PATRIOT ACT.
Each Lender hereby notifies Company that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the "Patriot Act"), it is required to obtain, verify and record
information that identifies Company, which information includes the name and
address of Company and other information that will allow such Lender to identify
Company in accordance with the Patriot Act.
10.22. ELECTRONIC EXECUTION OF ASSIGNMENTS.
The words "execution," "signed," "signature," and words of like import in
any Assignment Agreement shall be deemed to include electronic signatures or the
keeping of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature or the use
of a paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BELDEN & BLAKE CORPORATION
By: /s/ Robert W. Peshek
--------------------------------------------
Name: Robert W. Peshek
Title: Senior Vice President
THE CANTON OIL & GAS COMPANY
By: /s/ Robert W. Peshek
--------------------------------------------
Name: Robert W. Peshek
Title: Senior Vice President
WARD LAKE DRILLING, INC.
By: /s/ Robert W. Peshek
--------------------------------------------
Name: Robert W. Peshek
Title: Senior Vice President
S-1
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Lead Arranger, Syndication Agent,
Administrative Agent and a Lender
By: /s/ William W. Archer
----------------------------------
Authorized Signatory
S-2
NATIONAL CITY BANK,
as Issuing Bank, Co-Documentation Agent and a
Lender
By: /s/ Tom Gurbach
---------------------------------------
Authorized Signatory
S-3
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Co-Documentation Agent and a Lender
By: /s/ John A. Urauhort
----------------------------------
Authorized Signatory
S-4
APPENDIX A-1
TO CREDIT AND GUARANTY AGREEMENT
TERM LOAN COMMITMENTS
LENDER TERM LOAN COMMITMENT PRO RATA SHARE
------ -------------------- --------------
Goldman Sachs Credit Partners L.P. $100,000,000.00 100.0%
TOTAL $100,000,000.00 100%
APPENDIX A-1-1
APPENDIX A-2
TO CREDIT AND GUARANTY AGREEMENT
REVOLVING COMMITMENTS
LENDER REVOLVING COMMITMENT PRO RATA SHARE
------ -------------------- --------------
Goldman Sachs Credit Partners L.P. $30,000,000.00 100.0%
TOTAL $30,000,000.00 100%
APPENDIX A-2-1
APPENDIX A-3
TO CREDIT AND GUARANTY AGREEMENT
HEDGE L/C COMMITMENTS
LENDER HEDGE L/C COMMITMENT PRO RATA SHARE
------ -------------------- --------------
Goldman Sachs Credit Partners L.P. $40,000,000.00 100.0%
TOTAL $40,000,000.00 100%
APPENDIX A-3-1
APPENDIX B
TO CREDIT AND GUARANTY AGREEMENT
NOTICE ADDRESSES
BELDEN & BLAKE CORPORATION
THE CANTON OIL & GAS COMPANY
WARD LAKE DRILLING, INC.
5200 Stoneham Road, Suite 2500
North Canton, OH 44720-0500
Attention: Robert W. Peshek, Senior Vice President and Chief Financial Officer
Telephone: (330) 499-1660
Telecopier: (330) 497-5470
in each case, with copies to:
Bricker & Eckler LLP
100 South Third Street
Columbus, OH 43215
Facsimile No.: (614) 227-2390
Attention: John Cook, Esq.
and
Vinson & Elkins L.L.P.
666 Fifth Avenue, 26th Floor
New York, NY 10103-0040
Facsimile No.: (212) 237-0100
Attention: Allan Reiss, Esq.
APPENDIX B-2
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Lead Arranger, Syndication Agent, Administrative
Agent and a Lender
Goldman Sachs Credit Partners L.P.
85 Broad Street
New York, New York 10004
Attention: Stephen King
Telecopier: (212) 357-0932
with a copy to:
Goldman Sachs Credit Partners L.P.
85 Broad Street
New York, New York 10004
Attention: John Makrinos
Telecopier: (212) 357-4597
APPENDIX B-3
NATIONAL CITY BANK,
as Issuing Bank and Co-Documentation Agent
National City Bank
____________________________
____________________________
Attention:
Telecopier:
APPENDIX B-4
GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Documentation Agent
General Electric Capital Corporation
120 Long Ridge Road
Stamford, Connecticut 06927
Attention: Chris Matteson, Senior Vice President
Telecopier: 203-357-4890
Telephone: 203-961-2220
APPENDIX B-5