DEBTOR IN POSSESSION FINANCING AMENDMENT AND FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DEBTOR
IN POSSESSION FINANCING AMENDMENT AND FOURTH AMENDMENT TO SECOND
AMENDED
AND RESTATED CREDIT AGREEMENT
THIS
DEBTOR IN POSSESSION FINANCING AMENDMENT AND FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT (this “Fourth
Amendment”) is dated as of December 14, 2009, and entered into among
Teton Energy Corporation, a Delaware corporation (the “Borrower”), the
financial institutions listed on the signature pages hereof each of whom are
Lenders under and as defined in the hereinafter described Credit Agreement (the
“Lenders”),
and JPMorgan Chase Bank, N.A., a national banking association, as administrative
agent (in such capacity, the “Administrative
Agent”) for the Lenders.
WITNESSETH:
WHEREAS,
the Borrower, the Lenders and the Administrative Agent are parties to that
certain Second Amended and Restated Credit Agreement dated as of April 2,
2008 (as modified to date, the “Credit
Agreement”);
WHEREAS,
pursuant to the terms of the Credit Agreement, the Lenders made loans to the
Borrower, which loans are secured by a lien upon substantially all of the
personal and real property of the Borrower and its Subsidiaries;
WHEREAS,
the Borrower and each of its Subsidiaries filed a voluntary petition for relief
under Chapter ▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, on November 8, 2009, in the
United States Bankruptcy Court for the District of Delaware (the “Case”);
WHEREAS,
the Borrower and its Subsidiaries have insufficient unencumbered cash or liquid
assets with which to operate their business;
WHEREAS,
the Borrower is unable to obtain credit on an unsecured basis or as an
administrative expense pursuant to 11 U.S.C §§ 364(a) and (b), and
503(b)(1);
WHEREAS,
an immediate need exists for the Borrower to obtain funds to continue operation
of its business;
WHEREAS,
the Lenders have agreed to extend additional credit to the Borrower up to an
amount not to exceed $750,000 (the “DIP
Facility”) for Budgeted Expenses (as defined below) from the Fourth
Amendment Effective Date (as defined below) until the earlier of (a) the
occurrence of a Postpetition Default (as defined below) or (b) January 31,
2010;
WHEREAS,
the Lenders have agreed to grant the request of the Borrower to extend such
additional credit, but only upon the terms and conditions set forth in this
Fourth Amendment and the Financing Order (as defined below); and
WHEREAS,
the Borrower has agreed to secure its obligations to the Administrative Agent
and the Lenders in connection with such additional credit with, among other
things, a first priority perfected security interest in all of its and its
Subsidiaries’ existing and future personal and real property, as set forth in
the Financing Order.
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NOW,
THEREFORE, for valuable consideration hereby acknowledged, the parties hereto
agree as follows:
Section 1Definitions. Unless
specifically defined or redefined below, capitalized terms used herein shall
have the meanings ascribed thereto in the Credit Agreement.
Section 2Amendments
to Credit Agreement. Subject to the terms and conditions
hereof, the provisions of the Credit Agreement enumerated below are amended as
follows:
(a) Effective
as of the date hereof, the following definitions set forth in Section 1.02 of
the Credit Agreement are hereby amended to read in full as follows:
“Loan
Documents” means this Agreement, the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment, the Notes, the Letter of
Credit Agreements, the Letters of Credit, the Intercreditor Agreement and the
Security Instruments.
“Material
Adverse Effect” means any event, development or circumstance arising
after the date hereof that has had or could reasonably be expected to have a
material adverse effect on (a) the business, operations, Property, prospects or
condition (financial or otherwise) of the Borrower or any of its Subsidiaries,
(b) the ability of the Borrower, any Subsidiary or any Guarantor to perform any
of its obligations under any Loan Document, (c) the validity or enforceability
of any Loan Document, (d) the DIP Collateral, or the Administrative Agent’s
liens (on behalf of itself and the Lenders) on the DIP Collateral or the
priority of such liens, or (e) the rights and remedies of or benefits available
to the Administrative Agent, the Issuing Bank or any Lender under any Loan
Document
(b) Effective
as of the date hereof, the following definitions are hereby added to Section
1.02 of the Credit Agreement:
“Bankruptcy
Code” means 11 U.S.C. § 101 et seq.
“Bankruptcy
Court” means the United States Bankruptcy Court for the District of
Delaware or any other court with competent jurisdiction over the
Case.
“Budget”
means the 13-week cash budget detailing the Borrower’s anticipated cash receipts
and expenditures from the week ending November 6, 2009, until
January 29, 2010, as amended or supplemented from time to time, which
budget (and any amendments thereto) shall be in form and substance acceptable to
the Lenders and shall be incorporated into the Financing Order and attached
hereto as Exhibit
D. Changes to the Budget are subject to the prior written
approval of the Administrative Agent in its sole and absolute
discretion.
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“Budgeted
Expenses” means expenses permitted to be paid by the Debtors for the
purposes set forth in the Budget.
“Case”
means the Chapter 11 bankruptcy case of the Debtors pending before the
Bankruptcy Court entitled “In re Teton Energy
Corporation”, Case No. 09-13946, including adversary proceedings or other
ancillary proceedings.
“Cash
Collateral” means cash collateral, as such term is defined in Section
363(a) of the Bankruptcy Code and as defined in the Financing Order, arising
from or relating to Collateral granted to the Administrative Agent for the
benefit of the Lenders.
“Cash
Collateral Order” has the meaning specified in Section 3(i) of the Fourth
Amendment.
“Debtors”
means the Borrower and each of its Subsidiaries.
“DIP
Collateral”
means any and all of the properties and assets of the Debtors and the
Debtors’ bankruptcy estate, both
real and personal, including, without limitation, all cash, accounts, inventory,
equipment, general intangibles, intellectual property of all kinds including
patents, trademarks, trade names, service marks and copyrights, securities,
instruments, investment property, deposit accounts, chattel paper, warehouse
receipts, bills of lading, tax refunds of any nature, insurance proceeds,
insurance premium refunds, deposits of any kind, security deposits, utility
deposits, bonds and proceeds of same, causes of action (whether by contract or
tort, common law or statutory, equitable or otherwise), oil and gas interests,
leasehold interests in real estate or personal property and customer lists,
whether acquired before or after the Petition Date, whether now owned and
existing or hereafter acquired, created, or arising, and all products, proceeds,
rents, revenues, and profits thereof (including, without limitation, claims of
the Debtors against third parties for loss or damage to such property), and all
accessions thereto, substitutions and replacements therefor, and wherever
located, in which the Administrative Agent, for the benefit of the Lenders, is
granted a first priority lien or security interest to secure the Postpetition
Obligations as set forth in the Financing Order.
“Final
Order” has the meaning specified in Section 3(h) of the Fourth
Amendment.
“Financing
Order” means the one or more orders of the Bankruptcy Court authorizing
and approving, on either an interim or final basis, the financing contemplated
by the Fourth Amendment and use of Cash Collateral, each in form and substance
satisfactory to the Lenders.
“Fourth
Amendment” means that Fourth Amendment to Second Amended and Restated
Credit Agreement dated as of December 14, 2009 among the Borrower, the
Administrative Agent and the Lenders.
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“Fourth
Amendment Effective Date” means December 14, 2009.
“Lender
Plan Support Agreement” means the Plan Support Agreement in form and
substance satisfactory to the Administrative Agent and the Lenders pursuant to
which the Lenders agree to support the Plan of Reorganization.
“Petition
Date” means November 8, 2009.
“Plan of
Reorganization” means the Plan of Reorganization in form and substance
satisfactory to the Administrative Agent and the Lenders pursuant to which the
Debtors shall emerge from bankruptcy and shall sell substantially all of their
assets to Reorganized Teton as defined therein.
“Plan
Sponsorship Agreement”
means the Plan Sponsorship Agreement in form and substance satisfactory
to the Administrative Agent and the Lenders pursuant to which Rise Energy
Partners II, LLC sponsors the Plan of Reorganization.
“Plan
Support Agreement”
means the Plan Support Agreement in form and substance satisfactory to
the Administrative Agent and the Lenders pursuant to which the holders of the
Permitted Debt agree to support the Plan of Reorganization.
“Postpetition
Aggregate Commitments” means $750,000, being the aggregate amount of the
Postpetition Commitments of all Lenders, as the same may be reduced from time to
time.
“Postpetition
Commitment”
means the commitment of any Lender to make Postpetition Loans as set
forth in Section 2.09(a) hereof up to the amount for such Lender set forth on
Exhibit B to
the Fourth Amendment.
“Postpetition
Default” means the occurrence and continuance of any of the following
events:
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(a)
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The
Borrower shall fail to pay any principal of the Postpetition Loans when
the same becomes due and payable;
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(b)
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The
Borrower shall fail to pay any interest on the Postpetition Loans or any
fee or other amount due with respect to the Postpetition Obligations after
such interest, fee, or other amount becomes due and
payable;
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(c)
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Any
representation or warranty made by the Borrower in the Fourth Amendment or
in any statement or certificate given after the Fourth Amendment Effective
Date by the Borrower in writing pursuant to any Loan Document or in
connection with any Loan Document shall be false in any material respect
on the date as of which made;
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(d)
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The
Borrower shall breach or violate any term, covenant or agreement contained
in the Fourth Amendment, Articles 7, 8, or 9 of this Agreement (other than
as set forth on Exhibit C
attached hereto), or any of the other Loan
Documents;
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(e)
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An
Event of Default shall occur under and as defined in the Financing
Order;
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(f)
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The
Case shall be dismissed or converted to a case under Chapter 7 of the
Bankruptcy Code; or a Chapter 11 trustee or an examiner with expanded
power shall be appointed in the Case without the express written consent
of the Administrative Agent;
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(g)
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Any
security interest, lien, claim or encumbrance, excluding the Liens
permitted pursuant to Section 9.03 hereof, shall be granted in any of the
DIP Collateral which is pari passu with or senior to the claims of the
Lenders therein, including any surcharge of the DIP Collateral pursuant to
Bankruptcy Code § 506(c) or otherwise without the express written consent
of the Administrative Agent;
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(h)
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Any
Debtor shall make any payment (whether by way of adequate protection or
otherwise) of principal or interest or otherwise on account of any
prepetition Indebtedness, except to the Lenders, unless approved by the
Administrative Agent in writing or as authorized by the Bankruptcy Court
after notice and hearing;
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(i)
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The
Bankruptcy Court shall enter an order granting relief from the automatic
stay to the holder or holders of any other security interest or lien
(other than the Lenders) in any DIP Collateral to permit the pursuit of
any judicial or non-judicial transfer or other remedy against any assets
of the Borrower without the express written consent of the Administrative
Agent;
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(j)
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Any
provision of the documents relating to the Postpetition Loans shall cease
to be valid and binding on the Debtors, or the Debtors shall so assert in
any pleading filed in any court;
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(k)
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The
Debtors shall for any reason fail to remit to the Administrative Agent all
net proceeds from the sale, disposition, collection, or other realization
upon the Collateral or the DIP Collateral for application in accordance
with Section 2.09(h);
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(l)
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The
Debtors shall attempt to vacate or modify either the Financing Order or
the Cash Collateral Order over the objection of the Administrative
Agent;
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(m)
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The
entry of an order pursuant to Bankruptcy Code § 363 approving the sale of
a material portion of the Debtors’ assets without the prior written
consent of the Administrative Agent and the Lenders to such
sale;
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(n)
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Actual
performance shall at any time adversely deviate from the Budget by 15% or
more calculated on a line item by line item basis and measured weekly on a
rolling 4 week basis from the Petition Date; provided that a weekly
variance which does not exceed $25,000 in the aggregate shall not create a
Forbearance Default as long as the variance for any 4 consecutive weeks
does not exceed $100,000 in the
aggregate;
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(o)
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The
failure to confirm a Plan of Reorganization in the Case acceptable to the
Administrative Agent on or prior to January 31,
2010;
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(p)
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The
Plan of Reorganization shall be amended or modified without the prior
written consent of the Administrative Agent;
or
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(q)
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A
breach of the Plan Sponsorship Agreement or the Plan Support Agreement
shall occur, or either such agreement shall terminate, or any party
thereto shall assert that it is no longer subject to and bound by the
terms thereof, or the consummation of the transactions contemplated by the
Plan Sponsorship Agreement shall be rendered impracticable to occur
timely, or the transactions contemplated thereby shall fail to close and
fund on or prior to January 31,
2010.
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“Postpetition
Loans” means advances by the Lenders to the Borrower pursuant to the
Postpetition Commitments in an aggregate amount not to exceed at any time the
Postpetition Aggregate Commitments then in effect.
“Postpetition
Obligations” means all present and future obligations, indebtedness and
other liabilities of the Debtors or any of them arising with respect to the
Financing Order or the Postpetition Loans, including without limitation the
principal amount thereof, and any interest, fees, and charges related thereto or
in connection therewith, and any and all renewals, extensions, rearrangements,
and refundings of the foregoing.
“Postpetition
Termination Date” means the earliest of (a) January 31, 2010 at 5:00
p.m. Central Time, (b) the date the Borrower terminates the commitment of the
Lenders to make the Postpetition Loans, (c) the date the Administrative Agent
terminates the commitment of the Lenders to make the Postpetition Loans upon the
occurrence of a Postpetition Default, (d) the effective date of a confirmed plan
of reorganization for the Debtors, (e) the date on which any agreement for the
sale of substantially all of the Debtors’ assets closes, or (f) the date on
which the Bankruptcy Court approves the extension of any other credit facilities
to the Debtors.
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“Prepetition
Obligations” means all Indebtedness other than the Postpetition
Obligations.
“Rise
Transaction” has the meaning specified in Section 3(j) of the Fourth
Amendment.
“Superpriority
Claim” means a claim against the Debtors in the Case which is an
administrative expense claim having priority over any and all administrative
expenses of the kind specified in Sections 503(b) and 507(b) of the Bankruptcy
Code.
“Third
Amendment” means that certain Third Amendment to Second Amended and
Restated Credit Agreement and Forbearance Agreement dated as of August 26, 2009,
among the Borrower, the Lenders, and the Administrative Agent, as
amended.
(c) Effective
as of the date hereof, Article 2 of the Credit Agreement is amended to add
thereto the following Section 2.09:
SECTION
2.09. Postpetition
Loans.
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(a)
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Commitment for
Postpetition Loans. From and after the Petition Date,
the Lenders shall have no obligation to make any new Loans or issue any
Letters of Credit to the Borrower. Notwithstanding the
foregoing, subject to the terms and conditions contained in this Section
2.09, the Lenders agree to make Postpetition Loans to the Borrower from
time to time, but not more frequently than once per day, from the Fourth
Amendment Effective Date until the Postpetition Termination Date, in
accordance with their Postpetition Commitments and in an aggregate amount
not to exceed at any time outstanding the Postpetition Aggregate
Commitments. Each Postpetition Loan may be prepaid at any time without
premium or penalty and may be borrowed, repaid, and reborrowed subject to
the terms and conditions of this
Agreement.
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(b)
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Borrowing
Mechanics. Each Postpetition Loan shall be made on
notice given by the Borrower to the Administrative Agent not later than
11:00 a.m. Central Time on the Business Day prior to the date of the
proposed Postpetition Loan. Each such notice (a “Postpetition
Notice of Borrowing”) shall be in substantially the form of Exhibit A to
the Fourth Amendment specifying therein (i) the proposed funding date,
(ii) the aggregate amount of such proposed Postpetition Loan, and (iii)
that the proposed use of the proceeds thereof is for Budgeted Expenses in
compliance with the Budget and no other cash is available to the Borrower
to pay such Budgeted Expenses. Administrative Agent may
condition the disbursement of Postpetition Loans on receipt of such
documentation as it shall require to evidence that the proceeds of such
Postpetition Loans shall be used in accordance with the Budget both as to
amount of such Postpetition Loans and as to the timing of such
Postpetition Loans.
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(c)
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Conditions Precedent
to Each Postpetition Loan. The obligation of the Lenders
to make any Postpetition Loan (including the initial Postpetition Loan)
shall be subject to the following conditions precedent: (i) the Borrower
shall deliver to the Administrative Agent an executed Postpetition Notice
of Borrowing pursuant to Section 2.09(b) hereto, (ii) no event has
occurred and is continuing which constitutes a Postpetition Default or
which would constitute a Postpetition Default but for the requirement that
notice be given or time elapsed or both; (iii) the Borrower shall deliver
to the Administrative Agent a certificate of the chief financial officer
of the Borrower certifying that (A) all representations and warranties
made by the Borrower in the Fourth Amendment or in any statement or
certificate after the Fourth Amendment Effective Date by the Borrower in
writing pursuant to any Loan Document or in connection with any Loan
Document shall be true and correct (including, without limitation, the
representations and warranties made in Sections 7.04 and 7.05) and (B) the
Borrower shall apply the proceeds of the Postpetition Loan only to
Budgeted Expenses; (iv) with respect to the initial Postpetition Loan, the
Administrative Agent shall have received such other approvals or documents
as the Lenders may reasonably request; (v) no Bankruptcy Court order has
been entered authorizing the Debtors to obtain financing or credit
pursuant to Section 364 of the Bankruptcy Code from any Person other than
the Lenders secured by a security interest or having the priority of an
administrative claim unless otherwise consented to by the Administrative
Agent in writing; (vi) the Financing Order shall not have been vacated,
reversed, modified, or amended and, in the event that such order is the
subject of any pending appeal, no performance of any obligation of any
party hereto shall have been stayed pending appeal; (vii) the
Administrative Agent shall have received payment for all reasonable
professional fees incurred by the Administrative Agent and the Lenders
with respect to the Postpetition Loans; and (viii) after giving effect to
the Postpetition Loan requested, the total Postpetition Loans shall not
exceed the Postpetition Aggregate Commitment. In no event shall
the Lenders be requested to advance any funds or extend any credit other
than for Budgeted Expenses actually incurred and payable either at the
time of such advance or within one week
thereafter.
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(d)
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Repayment. The
Borrower shall repay the entire unpaid principal amount of the
Postpetition Loans, together with all accrued and unpaid interest thereon,
on the earlier of the Postpetition Termination Date or the date on which
the Bankruptcy Court approves the extension of any other credit facilities
to the Debtors.
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(e)
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Interest. The
Borrower shall pay interest on the unpaid principal amount of each
Postpetition Loan from the date made until the principal amount thereof
shall have been paid in full at a rate per annum equal at all times to the
Alternate Base Rate in effect from time to time plus 5.25%, payable,
monthly in arrears on the first Business Day of each month, and on the
Postpetition Termination Date; provided however that all principal
outstanding after the occurrence of a Postpetition Default shall bear
interest, from the date of such Postpetition Default until the date on
which such amount is due until such amount is paid in full or such
Postpetition Default is waived or cured, payable on demand, at the
Alternate Base Rate in effect from time to time plus 7.25% per
annum.
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(f)
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Fees. The
Borrower agrees to pay to the Administrative Agent for the account of each
Lender a commitment fee of 1.00% on the average daily amount of the unused
amount of the Postpetition Commitment of such Lender during the period
from and including the date of the Petition Date to but excluding the
Postpetition Termination Date. Accrued commitment fees shall be
payable in arrears on the last day of each month and on the Postpetition
Termination Date, commencing on the first such date to occur after the
Petition Date. All commitment fees shall be computed on the
basis of a year of 360 days, unless such computation would exceed the
Highest Lawful Rate, in which case interest shall be computed on the basis
of a year of 365 days (or 366 days in a leap year), and shall be payable
for the actual number of days elapsed (including the first day but
excluding the last day).
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(g)
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Grant of Security
Interest. As security for the prompt payment and
performance when due (whether at stated maturity, by acceleration or
otherwise) of all the Postpetition Obligations and to induce the Lenders
to make the Postpetition Loans in accordance with the terms hereof, each
Debtor shall, pursuant to the Financing Order, and does hereby, assign,
convey, mortgage, pledge, hypothecate and grant to the Administrative
Agent, for the benefit of the Lenders, a first priority perfected security
interest in the DIP Collateral, in each case subject to Prior Liens (as
defined in the Financing Order) and to agreed upon carve-outs for the
Debtors’ professionals and the creditor committee’s professionals and
certain fees and expenses payable to the United States Trustee and the
Clerk of the Bankruptcy Court as more fully set forth in the Financing
Order. Furthermore, in the event any unapplied remaining
retainer funds paid to any of the Debtors’ Bankruptcy Court approved
professionals are returned to the Borrower, such returned unapplied
remaining retainer funds shall be considered Cash
Collateral. No cost or surcharge shall be imposed against the
DIP Collateral or the Collateral under Section 506(c) of the
Code.
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(h)
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Application of Sale
Proceeds and Collections. Notwithstanding anything to
the contrary contained in this Agreement, from and after the Fourth
Amendment Effective Date and so long as no Postpetition Default has
occurred and is continuing, all net proceeds received from the sale,
disposition, collection or other realization upon the Collateral or the
DIP Collateral shall be applied (a) first, to payment of all fees,
including attorneys fees, and expenses incurred by the Administrative
Agent and the Lenders under the Credit Agreement or the Fourth Amendment,
(b) second, to payment of the Postpetition Obligations plus any fees and
accrued interest thereon, and (c) third, to payment of the Prepetition
Obligations plus any accrued interest thereon, each as determined by the
Administrative Agent in its sole and absolute discretion, until such time
as all Indebtedness of the Borrower to the Administrative Agent and the
Lenders is satisfied in full, and then to the
Borrower. Notwithstanding the foregoing, the Administrative
Agent and the Lenders agree that, so long as the Lender Plan Support
Agreement remains effective and has not been terminated, proceeds from the
sale of the Collateral to Rise Energy Partners II, LP shall be applied as
set forth in the Plan Sponsorship
Agreement.
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(i)
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Postpetition
Default. Upon the occurrence and during the continuance
of any Postpetition Default, the Administrative Agent (at the request of
the Lenders) may, by written notice to the Borrower, declare all or any
portion of the Postpetition Obligations to be, and the same shall
forthwith become, due and payable, together with accrued interest thereon,
and the obligation of the Lenders to make any further Postpetition Loans
shall thereupon terminate. After the occurrence and during the
continuance of any Postpetition Default, all net proceeds received from
the sale, disposition, collection or other realization upon the Collateral
or the DIP Collateral shall be applied to such Prepetition Obligations and
Postpetition Obligations as may be determined by the Administrative Agent
in its sole and absolute
discretion.
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(d) Effective
as of the date hereof, clause (d) of Section 3.02 is hereby amended to read in
full as follows:
(d) Interest Payment
Dates. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and on the Termination Date;
provided that (1) interest accrued pursuant to Section 3.02(c) shall be payable
on demand, (2) in the event of any repayment or prepayment of any Loan (other
than an optional prepayment of an ABR Loan prior to the Termination Date),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment, (3) in the event of any conversion of
any Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion, and (D) from and after the Petition Date, accrued interest on each
Loan (other than a Postpetition Loan) shall be payable on each Interest Payment
Date for such Loan commencing on the earliest of (1) a termination of the Rise
Transaction or the Plan Sponsorship Agreement, (2) the closing of the sale of
all or a material part of the assets of the Debtors, or (3) January 31,
2010.
(e) Effective
as of the date hereof, Article 8 of the Credit Agreement is hereby amended to
add thereto the following sections:
SECTION
8.18. Budget. The
Debtors shall operate strictly in accordance with the Budget attached hereto as
Exhibit D,
shall have cash receipts equaling at least 85% of the cash receipts reflected on
the Budget from time to time as measured weekly on a rolling 4-week basis, and
shall pay only those actual, ordinary and necessary operating expenses of the
Debtors’ business in compliance with and not to exceed by more than 15% those
expenses on a line item basis listed on the Budget as measured weekly on a
rolling 4-week basis, as the Budget may be modified in writing with the prior
written consent of the Administrative Agent; provided that a weekly variance
which does not exceed $25,000 in the aggregate shall not constitute a breach of
this Section 8.18 as long as the variance for any 4 consecutive weeks does not
exceed $100,000 in the aggregate.
SECTION
8.19. Reports. The
Borrower shall furnish the following:
(a) Not
later than the close of business on Wednesday of each week, the Borrower will
provide the Administrative Agent with a variance report showing (A) actual
receipts and expenses for the preceding week as compared to those contemplated
by the Budget, and (B) aggregate actual receipts and expenses for period from
the Petition Date through the end of the preceding week as compared to the
Budget for the same period.
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(b) Such
other reports that the Administrative Agent or any Lender may request from time
to time.
(c) The
Borrower will provide or cause to be provided to the Administrative Agent and
the Lenders telephonic and/or written weekly reports by the Borrower as may be
requested by the Administrative Agent.
(f) Effective
as of the date hereof, Article 9 of the Credit Agreement is hereby amended to
add thereto the following section:
SECTION
9.19. Chapter 11
Claims. The Debtors shall not incur, create, assume, suffer to
exist, or permit any claim in the Case (including without limitation any claim
under Section 506(c) of the Bankruptcy Code and any deficiency claim remaining
after the satisfaction of a Lien that secures a claim) to be on a parity with or
senior to the claims of the Administrative Agent for the benefit of the Lenders
against the Debtors hereunder, or apply to the Bankruptcy Court for authority to
do so. The Debtors shall not pay fees and expenses to any Bankruptcy
Court-approved professional until such Bankruptcy Court-approved professional is
authorized to be paid pursuant to any fee procedure approved by the Bankruptcy
Court.
Section 3Conditions
Precedent. This Fourth Amendment shall not be effective until
all corporate actions of the Borrower taken in connection herewith and the
transactions contemplated hereby shall be satisfactory in form and substance to
Administrative Agent and the Lenders, and each of the following conditions
precedent shall have been satisfied:
(a) The
Administrative Agent and each Lender shall have received each of the following,
in form and substance satisfactory to the Administrative Agent, the Lenders and
the Administrative Agent’s counsel, in their sole and absolute
discretion:
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(i)
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a
certificate of a chief executive officer of Borrower certifying that ii)
all representations and warranties in this Fourth Amendment are true and
correct in all material respects and iii) there exists no Postpetition
Default after giving effect to this Fourth Amendment and the borrowings
contemplated hereby; and
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(ii)
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such
other documents, instruments, and certificates as the Lenders shall deem
necessary or appropriate in connection with this Fourth Amendment and the
transactions contemplated hereby.
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(b) The
Administrative Agent shall have received a counterpart of this Fourth Amendment
duly executed and delivered by a duly authorized officer of each Debtor and each
Lender.
(c) All
governmental and third party approvals necessary in connection with the
financing contemplated hereby and the continuing operations of the Borrower
(including shareholder approvals, if any) shall have been obtained on
satisfactory terms and shall be in full force and effect.
12
(d) All
legal (including tax implications) and regulatory matters incident to the
transactions contemplated by this Fourth Amendment and the Rise Transaction
shall be satisfactory to the Administrative Agent and Lenders.
(e) The
Borrower and all of its Subsidiaries shall have filed the Case.
(f) The
Bankruptcy Court’s entry of an order approving the DIP Facility and other
arrangements described herein, in form and substance acceptable to the
Administrative Agent and the Lenders, which order shall approve the DIP Facility
on a final basis, in form and substance acceptable to the Administrative Agent
and the Lenders (such final order being referred to herein as the “Final
Order”).
(g) The
Bankruptcy Court’s entry of a cash collateral order (the “Cash
Collateral Order”) in form and substance satisfactory to the
Administrative Agent and the Lenders, which order may be included and part of
the Final Order.
(h) The
Lenders shall have received the Budget which shall be in a form and substance
acceptable to the Administrative Agent.
(i) The
Administrative Agent and the Lenders shall have been reimbursed for all
reasonable fees and expenses incurred by the Administrative Agent and the
Lenders, and each Lender shall have received an upfront fee of 2.00% of the
amount of its Postpetition Commitment.
(j) The
Plan of Reorganization shall be in form and substance satisfactory to the
Administrative Agent and the Lenders shall have been agreed to by the Debtors,
Rise Energy Partners II, LLC, and the holders of the Borrower’s Permitted Debt
providing for a sale of substantially all of the assets of Borrower and its
subsidiaries to Reorganized Teton (as defined in the Plan of Reorganization) and
funded by Rise Energy Partners II, LLC, any deposit required thereby shall have
been paid, and the Borrower shall have proposed and filed with the Bankruptcy
Court a sale and bidding procedure acceptable to the Administrative Agent and
the Lenders, the Plan of Reorganization, and as such other documents as may be
necessary to consummate the sale transaction with Rise Energy Partners II, LLC
(collectively, the “Rise
Transaction”), and the Plan Sponsorship Agreement and Plan Support
Agreement shall have been executed by the Borrower and its Subsidiaries, Rise
Energy Partners II, LLC, and the holders of the Borrower’s Permitted
Debt.
Section 4Representations and
Warranties; Ratifications. The Borrower represents and
warrants to the Administrative Agent and the Lenders that 2) this Fourth
Amendment constitutes its legal, valid, and binding obligations, enforceable in
accordance with the terms hereof (subject as to enforcement of remedies to any
applicable bankruptcy, reorganization, moratorium, or other laws or principles
of equity affecting the enforcement of creditors’ rights generally), 3) the
Credit Agreement, as amended hereby, and the other Loan Documents remain in full
force and effect, 4) other than as disclosed on Exhibit C, there
exists no Event of Default under the Credit Agreement after giving effect to
this Fourth Amendment, and (d) Teton ORRI LLC has immaterial assets, whose value
is in the aggregate less than $100,000. Except as expressly modified
by this Fourth Amendment, the terms and provisions of the Credit Agreement and
the other Loan Documents are ratified and confirmed and shall continue in full
force and effect. Except as provided herein, this Fourth Amendment
shall not constitute an amendment or waiver of any terms and provisions of the
Credit Agreement and other Loan Documents nor a waiver of the rights of the
Administrative Agent and the Lenders to insist upon compliance with each term,
covenant, condition, or provision of the Credit Agreement and other Loan
Documents.
13
Section 5Further
Assurances. The Borrower and the Guarantors shall execute and
deliver such further agreements, documents, instruments, and certificates in
form and substance satisfactory to the Administrative Agent, as the
Administrative Agent or any Lender may deem necessary or appropriate in
connection with this Fourth Amendment.
Section 6Counterparts. This
Fourth Amendment and the other Loan Documents may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument; in making proof of any such agreement, it shall not be necessary to
produce or account for any counterpart other than one signed by the party
against which enforcement is sought. Signatures delivered by fax and
pdf (email) shall be binding and effective as originals.
Section 7Expenses. The
Borrower agrees to pay all costs and expenses of the Administrative Agent
including, without limitation, those contemplated under Section 12.03 of the
Credit Agreement and any other Loan Document, and expressly including fees,
charges and expenses of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. or any other consultant for
or advisor to the Administrative Agent in connection with the preparation,
negotiation, execution, delivery and administration of this Fourth Amendment and
all other instruments or documents provided for herein or delivered or to be
delivered hereunder or in connection herewith (all such costs and expenses, the
“Agent’s
Expenses”). In addition, the Borrower agrees to save and hold
harmless the Administrative Agent and the Lenders from all liability for the
Agent’s Expenses. All of the Agent’s Expenses constitute Postpetition
Obligations under the Loan Documents. Borrower acknowledges that it
will receive a summary invoice reflecting only the total amount due and that
such summary invoice will not contain any narrative description of the services
provided by ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. or any other consultant or
advisor. Borrower agrees that delivery of such summary invoices shall
not, in any way constitute a waiver of any right or privilege of the
Administrative Agent and Lenders associated with such invoices. The
Administrative Agent is authorized by the Borrower to charge the Borrower's
deposit accounts with JPMorgan for any and all of the Agent’s Expenses from time
to time as determined by the Administrative Agent. All obligations
provided in this shall survive any termination of this Fourth Amendment and the
other Loan Documents. Borrower agrees and intends that each transfer
to or for the benefit of the Administrative Agent and the Lenders made or to be
made under this 5) are made according to ordinary business terms between
Borrower, the Administrative Agent and the Lenders taking into account the
Borrower’s business and financial affairs and 6) are intended by the
Borrower, the Administrative Agent and Lenders to be a contemporaneous exchange
for new value given to the Borrower by the Administrative Agent and the Lenders
as set forth herein.
14
Section 8Indemnification. The
Borrower and each Subsidiary hereby agrees to indemnify the Administrative Agent
and the Lenders from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against the Administrative Agent or any Lender in any way relating to
or arising out of or any action taken or omitted by the Administrative Agent or
any Lender under this Fourth Amendment or in any way relating to the
Postpetition Loans; provided that neither the Borrower nor any Subsidiary shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, or disbursements
resulting from the Administrative Agent’s or any Lender’s gross negligence or
willful misconduct.
Section 9WAIVER OF
JURY TRIAL. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, THE BORROWER AND EACH SUBSIDIARY HEREBY WAIVES ANY RIGHT THAT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE (WHETHER A CLAIM IN TORT,
CONTRACT, EQUITY, OR OTHERWISE) ARISING UNDER OR RELATING TO THIS FOURTH
AMENDMENT, THE OTHER LOAN DOCUMENTS, OR ANY RELATED MATTERS, AND AGREES THAT ANY
SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A
JURY.
Section 10GOVERNING
LAW. THIS
FOURTH AMENDMENT AND ALL LOAN DOCUMENTS SHALL BE DEEMED CONTRACTS MADE UNDER THE
LAWS OF THE STATE OF TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS, EXCEPT TO THE EXTENT (1)
FEDERAL LAWS GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION
OF ALL OR ANY PART OF THIS AGREEMENT AND ALL DOMESTIC LOAN DOCUMENTS OR (2)
STATE LAW GOVERNS UCC COLLATERAL INTERESTS FOR PROPERTIES OUTSIDE THE STATE OF
TEXAS. WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE BORROWER AGREES
THAT BOTH THE BANKRUPTCY COURT AND THE COURTS OF TEXAS WILL HAVE JURISDICTION
OVER PROCEEDINGS IN CONNECTION HEREWITH.
Section 11RATIFICATION. THE BORROWER AND EACH
SUBSIDIARY HEREBY RATIFIES AND CONFIRMS EACH OF THE RELEASES AND COVENANTS NOT
TO ▇▇▇ CONTAINED IN SECTION 6.6 AND SECTION 8.2 OF THE THIRD
AMENDMENT.
Section 12ENTIRE
AGREEMENT. THIS FOURTH AMENDMENT
AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES. THIS FOURTH AMENDMENT SHALL
CONSTITUTE A LOAN DOCUMENT.
[Remainder
of page left intentionally blank. Signature pages
follow.]
15
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BORROWER:
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TETON
ENERGY CORPORATION
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By:
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/s/ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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||
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Title:
Executive Vice President and Chief Financial
Officer
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||
Each of
the undersigned (i) consent and agree to this Fourth Amendment and each of the
terms and provisions contained herein, and (ii) ratify and confirm the Guaranty
Agreement and agree that the Loan Documents to which it is a party shall remain
in full force and effect and shall continue to be the legal, valid and binding
obligation of such Person, enforceable against it in accordance with its
terms.
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SUBSIDIARIES/GUARANTORS:
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TETON
NORTH AMERICA LLC
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By:
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/s/ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Title:
Executive Vice President and Chief Financial Officer
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TETON
PICEANCE LLC
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By:
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/s/ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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||
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Title:
Executive Vice President and Chief Financial
Officer
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||
Signature
Page
Fourth
Amendment to Second Amended and Restated Credit Agreement
Teton
Energy Corporation
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TETON
DJ LLC
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By:
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/s/ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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||
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Title:
Executive Vice President and Chief Financial Officer
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TETON
WILLISTON LLC
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By:
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/s/ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Title:
Executive Vice President and Chief Financial Officer
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TETON
BIG HORN LLC
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By:
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/s/ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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||
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Title:
Executive Vice President and Chief Financial Officer
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TETON
DJCO LLC
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By:
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/s/ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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||
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Title:
Executive Vice President and Chief Financial
Officer
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||
Signature
Page
Fourth
Amendment to Second Amended and Restated Credit Agreement
Teton
Energy Corporation
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TETON
ORRI LLC
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By:
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/s/ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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||
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Title:
Executive Vice President and Chief
Financial
Officer
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||
Signature
Page
Fourth
Amendment to Second Amended and Restated Credit Agreement
Teton
Energy Corporation
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ADMINISTRATIVE
AGENT/LENDER:
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JPMORGAN CHASE BANK,
N.A.,
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as
Administrative Agent and a Lender
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By:
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/s/ ▇▇▇▇
▇▇▇▇▇▇
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Name:
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▇▇▇▇
▇▇▇▇▇▇
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Title:
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Managing
Director
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Signature
Page
Fourth
Amendment to Second Amended and Restated Credit Agreement
Teton
Energy Corporation
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LENDER:
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ROYAL BANK OF
CANADA,
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as
a Lender
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By:
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/s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
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Name:
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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Title:
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Attorney
in Fact
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Signature
Page
Fourth
Amendment to Second Amended and Restated Credit Agreement
Teton
Energy Corporation
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LENDER:
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GUARANTY BANK AND TRUST
COMPANY,
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as
a Lender
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By:
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/s/ ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
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Name:
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▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
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Title:
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Senior
Vice President
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Signature
Page
Fourth
Amendment to Second Amended and Restated Credit Agreement
Teton
Energy Corporation
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LENDER:
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U.S. BANK NATIONAL
ASSOCIATION,
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as
a Lender
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||
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By:
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/s/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
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Name:
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
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Title:
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Vice
President
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Signature
Page
Fourth
Amendment to Second Amended and Restated Credit Agreement
Teton
Energy Corporation