AMENDED AND RESTATED CREDIT AGREEMENT dated as of February 12, 2010 among MAGNUM HUNTER RESOURCES CORPORATION, as Borrower, BANK OF MONTREAL, as Administrative Agent, THE LENDERS PARTY HERETO and CAPITAL ONE, N.A., as Syndication Agent BMO CAPITAL...
Exhibit 10.1
__________________________________________________________________________
AMENDED
AND RESTATED
dated
as of
February
12, 2010
among
MAGNUM
HUNTER RESOURCES CORPORATION,
as
Borrower,
BANK
OF MONTREAL,
as
Administrative Agent,
THE
LENDERS PARTY HERETO
and
CAPITAL
ONE, N.A.,
as
Syndication Agent
*****
BMO
CAPITAL MARKETS
and
CAPITAL
ONE, N.A.,
Co-Arrangers
and Joint Bookrunners
__________________________________________________________________________
TABLE
OF CONTENTS
| ARTICLE I Definitions and Accounting Matters | 1 | |
| Section 1.01 | Terms Defined Above | 1 |
| Section 1.02 | Certain Defined Terms | 1 |
| Section 1.03 | Types of Loans and Borrowings | 21 |
| Section 1.04 | Terms Generally; Rules of Construction | 22 |
| Section 1.05 | Accounting Terms and Determinations; GAAP | 22 |
| ARTICLE II The Credits | 22 | |
| Section 2.01 | Commitments | 22 |
| Section 2.02 | Loans and Borrowings | 22 |
| Section 2.03 | Requests for Borrowings | 24 |
| Section 2.04 | Interest Elections | 25 |
| Section 2.05 | Funding of Borrowings | 26 |
| Section 2.06 | Changes in the Aggregate Maximum Credit Amounts | 27 |
| Section 2.07 | Borrowing Base | 27 |
| Section 2.08 | Letters of Credit | 31 |
| ARTICLE III Payments of Principal and Interest; Prepayments; Fees | 36 | |
| Section 3.01 | Repayment of Loans | 36 |
| Section 3.02 | Interest | 36 |
| Section 3.03 | Alternate Rate of Interest | 37 |
| Section 3.04 | Prepayments | 37 |
| Section 3.05 | Fees | 39 |
| ARTICLE IV Payments; Pro Rata Treatment; Sharing of Set-offs | 40 | |
| Section 4.01 | Payments Generally; Pro Rata Treatment; Sharing of Set-offs | 40 |
| Section 4.02 | Presumption of Payment by the Borrower | 41 |
| Section 4.03 | Certain Deductions by the Administrative Agent | 42 |
| Section 4.04 | Disposition of Proceeds | 42 |
| ARTICLE V Increased Costs; Break Funding Payments; Taxes; Illegality; Defaulting Lenders | 42 | |
| Section 5.01 | Increased Costs | 42 |
| Section 5.02 | Break Funding Payments | 44 |
| Section 5.03 | Taxes | 44 |
| Section 5.04 | Mitigation Obligations | 45 |
| Section 5.05 | Illegality | 46 |
| Section 5.06 | Defaulting Lenders | 46 |
| ARTICLE VI Conditions Precedent | 48 | |
| Section 6.01 | Conditions to Effectiveness | 48 |
| Section 6.02 | Each Credit Event | 50 |
| ARTICLE VII Representations and Warranties | 52 | |
| Section 7.01 | Organization; Powers | 00 |
-x-
| Xxxxxxx 0.00 | Xxxxxxxxx; Enforceability | 52 |
| Section 7.03 | Approvals; No Conflicts | 52 |
| Section 7.04 | Financial Condition; No Material Adverse Change | 52 |
| Section 7.05 | Litigation | 53 |
| Section 7.06 | Environmental Matters | 53 |
| Section 7.07 | Compliance with the Laws and Agreements; No Defaults | 54 |
| Section 7.08 | Investment Company Act | 55 |
| Section 7.09 | Taxes | 55 |
| Section 7.10 | ERISA | 55 |
| Section 7.11 | Disclosure; No Material Misstatements | 55 |
| Section 7.12 | Insurance | 56 |
| Section 7.13 | Restriction on Liens | 56 |
| Section 7.14 | Subsidiaries | 56 |
| Section 7.15 | Location of Business and Offices | 56 |
| Section 7.16 | Properties; Titles, Etc | 57 |
| Section 7.17 | Maintenance of Properties | 58 |
| Section 7.18 | Gas Imbalances, Prepayments | 58 |
| Section 7.19 | Marketing of Production | 58 |
| Section 7.20 | Swap Agreements | 58 |
| Section 7.21 | Use of Loans and Letters of Credit | 59 |
| Section 7.22 | Solvency | 59 |
| ARTICLE VIII Affirmative Covenants | 59 | |
| Section 8.01 | Financial Statements; Ratings Change; Other Information | 59 |
| Section 8.02 | Notices of Material Events | 62 |
| Section 8.03 | Existence; Conduct of Business | 63 |
| Section 8.04 | Payment of Obligations | 63 |
| Section 8.05 | Performance of Obligations under Loan Documents | 63 |
| Section 8.06 | Operation and Maintenance of Properties | 63 |
| Section 8.07 | Insurance | 64 |
| Section 8.08 | Books and Records; Inspection Rights | 64 |
| Section 8.09 | Compliance with Laws | 64 |
| Section 8.10 | Environmental Matters | 65 |
| Section 8.11 | Further Assurances | 65 |
| Section 8.12 | Reserve Reports | 66 |
| Section 8.13 | Title Information | 67 |
| Section 8.14 | Additional Collateral | 68 |
| Section 8.15 | ERISA Compliance | 68 |
| Section 8.16 | New Subsidiaries | 68 |
| Section 8.17 | New Subsidiary Requirements | 69 |
| Section 8.18 | Triad Acquisition Funds | 69 |
| Section 8.19 | Compliance with Orders | 69 |
| Section 8.20 | Phase I Requirement | 69 |
| ARTICLE IX Negative Covenants | 69 | |
| Section 9.01 | Financial Covenants | 70 |
| Section 9.02 | Debt | 70 |
-ii-
| Section 9.03 | Liens | 72 |
| Section 9.04 | Restricted Payments | 72 |
| Section 9.05 | Investments, Loans and Advances | 72 |
| Section 9.06 | Nature of Business; International Operations | 75 |
| Section 9.07 | Limitation on Leases | 75 |
| Section 9.08 | Proceeds of Notes/Loans | 75 |
| Section 9.09 | Sale or Discount of Receivables | 75 |
| Section 9.10 | Mergers, Etc | 75 |
| Section 9.11 | Sale of Assets | 76 |
| Section 9.12 | Environmental Matters | 77 |
| Section 9.13 | Transactions with Affiliates | 77 |
| Section 9.14 | Subsidiaries | 77 |
| Section 9.15 | Subsidiary Obligations and Preferred Stock | 77 |
| Section 9.16 | Negative Pledge Agreements; Dividend Restrictions | 77 |
| Section 9.17 | Gas Imbalances, Take-or-Pay or Other Prepayments | 77 |
| Section 9.18 | Swap Agreements | 78 |
| Section 9.19 | Sale and Leaseback Transactions | 78 |
| ARTICLE X Events of Default; Remedies | 78 | |
| Section 10.01 | Events of Default | 78 |
| Section 10.02 | Remedies | 81 |
| ARTICLE XI The Administrative Agent | 81 | |
| Section 11.01 | Appointment; Powers | 81 |
| Section 11.02 | Duties and Obligations of Administrative Agent | 82 |
| Section 11.03 | Action by Administrative Agent | 82 |
| Section 11.04 | Reliance by Administrative Agent | 83 |
| Section 11.05 | Subagents | 83 |
| Section 11.06 | Resignation or Removal of Administrative Agent | 83 |
| Section 11.07 | Administrative Agent as Lender | 84 |
| Section 11.08 | No Reliance | 84 |
| Section 11.09 | Authority to Release Collateral and Liens | 84 |
| Section 11.10 | The Co-Arrangers | 84 |
| Section 11.11 | Filing of Proofs of Claim | 84 |
| ARTICLE XII Miscellaneous | 85 | |
| Section 12.01 | Notices | 85 |
| Section 12.02 | Waivers; Amendments | 86 |
| Section 12.03 | Expenses, Indemnity; Damage Waiver | 87 |
| Section 12.04 | Successors and Assigns | 89 |
| Section 12.05 | Survival; Revival; Reinstatement | 92 |
| Section 12.06 | Counterparts; Integration; Effectiveness | 93 |
| Section 12.07 | Severability | 94 |
| Section 12.08 | Right of Setoff | 94 |
| Section 12.09 | Governing Law; Jurisdiction; Consent to Service of Process | 94 |
| Section 12.10 | Headings | 95 |
| Section 12.11 | Confidentiality | 95 |
-iii-
| Section 12.12 | Exculpation Provisions | 96 |
| Section 12.13 | No Third Party Beneficiaries | 96 |
| Section 12.14 | Collateral Matters; Swap Agreements | 96 |
| Section 12.15 | US Patriot Act Notice | 96 |
| Section 12.16 | Interest Rate Limitation | 97 |
| Annex 1 | Approved Counterparties | |
| Exhibit A | Form of Note | |
| Exhibit B | Form of Borrowing Request | |
| Exhibit C | Form of Interest Election Request | |
| Exhibit D | Form of Compliance Certificate | |
| Exhibit F-1 | Form of Security Agreement | |
| Exhibit F-2 | Form of Guaranty | |
| Exhibit G | Form of Assignment and Assumption | |
| Schedule 7.01 | Corporate Organizational Chart | |
| Schedule 7.05 | Litigation | |
| Schedule 7.14 | Subsidiaries | |
| Schedule 7.16 | Properties | |
| Schedule 7.18 | Gas Imbalances | |
| Schedule 7.19 | Marketing Contracts | |
| Schedule 7.20 | Swap Agreements | |
| Schedule 9.02 | Debt | |
| Schedule 9.03 | Liens | |
| Schedule 9.05 | Investments |
-iv-
This
Amended and Restated Credit Agreement, dated as of February 12, 2010 (the “Effective Date”), is
among MAGNUM HUNTER RESOURCES CORPORATION, a Delaware corporation (the “Borrower”), each of
the Lenders from time to time party hereto, BANK OF MONTREAL (in its individual
capacity, “BOM”), as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative
Agent”) and CAPITAL ONE, N.A., as Syndication Agent.
R E C I T
A L S
A. The
Borrower is a party to that certain Credit Agreement dated November 23, 2009
(the “Prior
Agreement”) among the Borrower, the lenders party thereto and Bank of
Montreal, as administrative agent.
B. The
Borrower, the Administrative Agent and the Lenders mutually desire to amend and
restate the Prior Agreement in its entirety.
C. In
consideration of the mutual covenants and agreements herein contained and of the
loans, extensions of credit and commitments hereinafter referred to, the parties
hereto agree that the Prior Agreement is amended and restated in its entirety as
follows:
ARTICLE
I
Definitions and Accounting
Matters
Section
1.01 Terms Defined
Above.
As used
in this Agreement, each term defined above has the meaning indicated
above.
Section
1.02 Certain Defined
Terms.
As used
in this Agreement, the following terms have the meanings specified
below:
“ABR”, when used in
reference to any Loan or Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by
reference to the Alternate Base Rate.
“Adjusted LIBO Rate”
means, with respect to any Eurodollar Borrowing for any Interest Period, an
interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%)
equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the
Statutory Reserve Rate.
“Administrative Agent”
has the meaning given in the introductory paragraph.
“Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied
by the Administrative Agent.
“Affected Loans” has
the meaning assigned to such term in Section
5.05.
“Affiliate” means,
with respect to a specified Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.
“Aggregate Maximum Credit
Amounts” at any time shall equal the sum of the Maximum Credit Amounts,
as the same may be increased, reduced or terminated pursuant to Section
2.06. The initial Aggregate Maximum Credit Amount of the
Lenders is $150,000,000.
“Agreement” means this
Amended and Restated Credit Agreement, as the same may from time to time be
amended, modified, supplemented or restated.
“Alternate Base Rate”
means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate
in effect on such day, (b) the Federal Funds Effective Rate in effect on such
day plus ½ of 1% and (c) the LIBO Rate for a one month interest period in effect
on such day plus 1%. Any change in the Alternate Base Rate due to a
change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate
shall be effective from and including the effective day of such change in the
Prime Rate, the Federal Funds Effective Rate and the LIBO Rate,
respectively.
“Applicable Margin”
means, for any day,
(a) from and
after the Effective Date but prior to the three month anniversary of the
Effective Date, a rate per annum equal to (i) 3.50% with respect to ABR Loans
and 4.50% with respect to Eurodollar Loans and (ii) 0.75% with respect to the
Commitment Fee Rate;
(b) from and
after the three month anniversary of the Effective Date but prior to the six
month anniversary of the Effective Date, a rate per annum equal to (i) 4.50%
with respect to ABR Loans and 5.50% with respect to Eurodollar Loans and (ii)
0.75% with respect to the Commitment Fee Rate;
(c) from and
after the six month anniversary of the Effective Date but prior to the nine
month anniversary of the Effective Date, a rate per annum equal to (i) 5.50%
with respect to ABR Loans and 6.50% with respect to Eurodollar Loans and (ii)
0.75% with respect to the Commitment Fee Rate;
(d) from and
after the nine month anniversary of the Effective Date but prior to the Tranche
B Termination Date, a rate per annum equal to (i) 6.50% with respect to ABR
Loans and 7.50% with respect to Eurodollar Loans and (ii) 0.75% with respect to
the Commitment Fee Rate; and
(e) from and
after the Tranche B Termination Date, with respect to any ABR Loan or Eurodollar
Loan, or with respect to the Commitment Fee Rate, as the case may be, the rate
per annum set forth in the Borrowing Base Utilization Grid below based upon the
Borrowing Base Utilization Percentage then in effect:
|
Borrowing
Base Utilization Grid
|
|||
|
Borrowing
Base Utilization Percentage
|
<33%
|
>33%, but
<66%
|
>66%
|
|
ABR
Loans
|
1.500%
|
2.000%
|
2.500%
|
|
Eurodollar
Loans
|
2.500%
|
3.000%
|
3.500%
|
|
Commitment
Fee Rate
|
0.500%
|
0.500%
|
0.750%
|
-2-
Each
change in the Applicable Margin shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change; provided, however, from and
after the Tranche B Termination Date, if at any time the Borrower fails to
deliver a Reserve Report pursuant to Section 8.12(a), then
the “Applicable
Margin” means the rate per annum set forth on the grid when the Borrowing
Base Utilization Percentage is at its highest level; provided further that the
Applicable Margin shall revert to the previous Applicable Margin upon the
Borrower’s delivery of such Reserve Report.
“Applicable
Percentage” means, with respect to any Lender, the percentage of the
Aggregate Maximum Credit Amounts represented by such Lender’s Maximum Credit
Amount as such percentage is set forth on Annex I or in an
Assignment and Assumption Agreement, as the case may be.
“Approved
Counterparty” means (a) any Lender or any Affiliate of a Lender or (b)
any other Person whose long term senior unsecured debt rating at the time of
entry into the applicable Swap Agreement is A-/A3 by S&P or Xxxxx’x (or
their equivalent) or higher.
“Approved Fund” means
(a) a CLO or (b) with respect to any Lender that is a fund which invests in bank
loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment
advisor.
“Approved Petroleum
Engineers” means an independent petroleum engineer proposed by the
Borrower and approved by the Administrative Agent.
“Assignment and
Assumption” means an assignment and assumption entered into by a Lender
and an assignee (with the consent of any party whose consent is required by
Section 12.04(b)),
and accepted by the Administrative Agent, in the form of Exhibit G or any
other form approved by the Administrative Agent.
“Availability Period”
means the period from and including the Effective Date to but excluding the
Termination Date.
“Board” means the
Board of Governors of the Federal Reserve System of the United States of America
or any successor Governmental Authority.
“BOM” has the meaning
given in the introductory paragraph.
“Borrower” has the
meaning given in the introductory paragraph.
“Borrowing” means
Loans of the same Type, made, converted or continued on the same date and, in
the case of Eurodollar Loans, as to which a single Interest Period is in
effect.
-3-
“Borrowing Base” means
at any time an amount equal to the amount determined in accordance with Section 2.07, as the
same may be adjusted from time to time pursuant to Section 8.13(c) or
Section 9.11 plus, if
applicable, the Tranche B Portion then in effect.
“Borrowing Base Utilization
Percentage” means, as of any day, the fraction expressed as a percentage,
the numerator of which is the sum of the Credit Exposures of the Lenders on such
day, and the denominator of which is the Borrowing Base in effect on such
day.
“Borrowing Request”
means a request by the Borrower for a Borrowing in accordance with Section
2.03.
“Business Day” means
any day that is not a Saturday, Sunday or other day on which commercial banks in
Houston, Texas, are authorized or required by law to remain closed; and if such
day relates to a Borrowing or continuation of, a payment or prepayment of
principal of or interest on, or a conversion of or into, or the Interest Period
for, a Eurodollar Loan or a notice by the Borrower with respect to any such
Borrowing or continuation, payment, prepayment, conversion or Interest Period,
any day which is also a day on which dealings in dollar deposits are carried out
in the London interbank market.
“Capital Leases”
means, in respect of any Person, all leases that shall have been, or should have
been, in accordance with GAAP, recorded as capital leases on the balance sheet
of the Person liable (whether contingent or otherwise) for the payment of rent
thereunder.
“Casualty Event” means
any loss, casualty or other insured damage to, or any nationalization, taking
under power of eminent domain or by condemnation or similar proceeding of, any
Property of the Borrower or any of its Subsidiaries having a fair market value
in excess of $1,000,000.
“Change in Control”
means the acquisition of ownership, directly or indirectly, beneficially or of
record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof)
of Equity Interests representing more than twenty-five percent (25%) of the
aggregate ordinary voting power represented by the issued and outstanding Equity
Interests of the Borrower.
“Change in Law” means
(a) the adoption of any law, rule or regulation after the date of this
Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank
(or, for purposes of Section 5.01(b)), by
any lending office of such Lender or by such Lender’s or the Issuing Bank’s
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the date of this Agreement.
“CLO” means any Person
(other than a natural Person) that is engaged in making, purchasing, holding or
otherwise investing in bank loans and similar extensions of credit in the
ordinary course of its business and is administered or managed by a Lender or an
Affiliate of such Lender.
-4-
“Co-Arrangers” means,
collectively, BMO Capital Markets and Capital One, N.A., in their capacities as
co-arrangers and joint bookrunners hereunder.
“Code” means the
Internal Revenue Code of 1986, as amended from time to time, and any successor
statute.
“Commitment” means,
with respect to each Lender, the commitment of such Lender to make Loans and to
acquire participations in Letters of Credit hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender’s Credit Exposure
hereunder, as such commitment may be (a) modified from time to time pursuant to
Section 2.06 and
(b) modified from time to time pursuant to assignments by or to such Lender
pursuant to Section 12.04(b),
and “Commitments” means
the aggregate amount of the Commitments of all the Lenders. The
amount representing each Lender’s Commitment shall at any time be the lesser of
(i) such Lender’s Maximum Credit Amount and (ii) such Lender’s Applicable
Percentage of the then effective Borrowing Base. The aggregate of the
Commitments on the Effective Date is $150,000,000.
“Commitment Fee Rate”
has the meaning set forth in the definition of “Applicable
Margin”.
“Consolidated Net
Income” means with respect to the Borrower and the Restricted
Subsidiaries, for any period, the aggregate of the net income (or loss) of the
Borrower and the Restricted Subsidiaries after allowances for Taxes payable by
the Borrower and the Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP; provided that there
shall be excluded from such net income (to the extent otherwise included
therein) the following: (a) the net income of any Person in which the Borrower
or any Restricted Subsidiary has an interest (which interest does not cause the
net income of such other Person to be consolidated with the net income of the
Borrower and the Restricted Subsidiaries in accordance with GAAP), except to the
extent of the amount of dividends or distributions actually paid in cash during
such period by such other Person to the Borrower or to a Restricted Subsidiary,
as the case may be; (b) any extraordinary gains or losses (excluding any
unrealized gains and losses under FAS 133) during such period; and (c) any gains
or losses (excluding any unrealized gains and losses under FAS 133) attributable
to writeups or writedowns of assets; and provided further that if the
Borrower or any Restricted Subsidiary shall acquire or dispose of any Property
during such period in an aggregate amount that equals or exceeds ten percent
(10%) of the Borrowing Base then in effect, then Consolidated Net Income shall
be calculated after giving pro
forma effect to such acquisition or disposition, as if such acquisition
or disposition had occurred on the first day of such period.
“Consolidated
Subsidiaries” means each Subsidiary of the Borrower (whether now existing
or hereafter created or acquired) the financial statements of which shall be (or
should have been) consolidated with the financial statements of the Borrower in
accordance with GAAP.
“Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise. For the purposes
of this definition, and without limiting the generality of the foregoing, any
Person that owns directly or indirectly 40% or more of the Equity Interests
having ordinary voting power for the election of the directors or other
governing body of a Person (other than as a limited partner of such other
Person) will be deemed to “control” such other
Person. “Controlling” and
“Controlled”
have meanings correlative thereto.
-5-
“Credit Exposure”
means, with respect to any Lender at any time, the sum of the outstanding
principal amount of such Lender’s Tranche A Credit Exposure plus the outstanding
principal amount of its Tranche B Loans at such time.
“Debt” means, for any
Person, the sum of the following (without duplication): (a) all
obligations of such Person for borrowed money or evidenced by bonds, bankers’
acceptances, debentures, notes or other similar instruments; (b) all obligations
of such Person (whether contingent or otherwise) in respect of letters of
credit, surety or other bonds and similar instruments; (c) all accounts payable
and all accrued expenses, liabilities or other obligations of such Person to pay
the deferred purchase price of Property or services; (d) all obligations under
Capital Leases; (e) all obligations under Synthetic Leases; (f) all Debt (as
defined in the other clauses of this definition) of others secured by a Lien on
any Property of such Person, whether or not such Debt is assumed by such Person;
(g) all Debt (as defined in the other clauses of this definition) of others
guaranteed by such Person or in which such Person otherwise assures a creditor
against loss of the Debt (howsoever such assurance shall be made) to the extent
of the lesser of the amount of such Debt and the maximum stated amount of such
guarantee or assurance against loss; (h) all obligations or undertakings of such
Person to maintain or cause to be maintained the financial position or covenants
of others or to purchase the Debt or Property of others; (i) obligations to
deliver commodities, goods or services, including, without limitation,
Hydrocarbons, in consideration of one or more advance payments, other than gas
balancing arrangements in the ordinary course of business; (j) any Debt of a
partnership for which such Person is liable either by agreement, by operation of
law or by a Governmental Requirement but only to the extent of such liability;
(k) Disqualified Capital Stock; and (l) the undischarged balance of any
production payment created by such Person or for the creation of which such
Person directly or indirectly received payment. The Debt of any
Person shall include all obligations of such Person of the character described
above to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is not included as a liability of such
Person under GAAP.
“Default” means any
event or condition which constitutes an Event of Default or which upon notice,
lapse of time or both would, unless cured or waived, become an Event of
Default.
“Defaulting Lender”
means any Lender, as determined by the Administrative Agent, that has (a) failed
to fund any portion of its Loans or participations in Letters of Credit within
three Business Days of the date required to be funded by it hereunder, (b)
notified the Borrower, the Administrative Agent, or the Issuing Bank in writing
that it does not intend to comply with any of its funding obligations under this
Agreement or has made a public statement to the effect that it does not intend
to comply with its funding obligations under this Agreement or under other
agreements in which it commits to extend credit, (c) failed, within three
Business Days after request by the Administrative Agent, to confirm that it will
comply with the terms of this Agreement relating to its obligations to fund
prospective Loans and participations in then outstanding Letters of Credit, (d)
otherwise failed to pay over to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within three Business Days of
the date when due, unless the subject of a good faith dispute, or (e) (i) become
or is insolvent or has a parent company that has become or is insolvent or (ii)
become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or custodian, appointed for it, or has taken any action in furtherance
of, or indicating its consent to, approval of or acquiescence in any such
proceeding or appointment or has a parent company that has become the subject of
a bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee, administrator, assignee for the benefit of creditors or similar Person
charged with reorganization or liquidation of its business or custodian
appointed for it, or has taken any action in furtherance of, or indicating its
consent to, approval of or acquiescence in any such proceeding or
appointment.
-6-
“Disqualified Capital
Stock” means any Equity Interest that, by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable) or
upon the happening of any event, matures or is mandatorily redeemable for any
consideration other than other Equity Interests (which would not constitute
Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise,
or is convertible or exchangeable for Debt or redeemable for any consideration
other than other Equity Interests (which would not constitute Disqualified
Capital Stock) at the option of the holder thereof, in whole or in part, on or
prior to the date that is one year after the earlier of (a) the Maturity Date
and (b) the date on which there are no Loans, LC Exposure or other obligations
hereunder outstanding and all of the Commitments are terminated; provided, however,
Disqualified Capital Stock shall not include Series B, Series C or Series D
preferred stock permitted under Section 9.02, so long
as any dividends paid with respect thereto comply with the provisions of Section
9.04.
“dollars” or “$” refers to lawful
money of the United States of America.
“Domestic Subsidiary”
means any Subsidiary that is organized under the laws of the United States of
America or any state thereof or the District of Columbia.
“EBITDAX” means, for
any period, the sum of Consolidated Net Income for such period calculated on a
trailing four quarter basis plus the following expenses or charges to the extent
deducted from Consolidated Net Income in such period: interest, income Taxes,
depreciation, depletion, amortization, expenses associated with the exploration
of Oil and Gas Properties, all non-cash charges and adjustments (including
stock-based compensation, impairment of asset values, non-cash adjustments to
derivative carrying values, non-cash adjustments to asset retirement obligations
and other similar items as from time to time required under GAAP) and all
non-recurring expenses, minus all non-cash income added to Consolidated Net
Income. Notwithstanding the foregoing, EBITDAX shall be Consolidated
Net Income plus the aforementioned expenses or charges (i) for the most recently
ended quarter multiplied by four (4) with respect to the quarter ended Xxxxx 00,
0000, (xx) for the most recently ended two (2) quarters multiplied by two (2)
with respect to the quarter ended June 30, 2010, and (iii) for the most recently
ended three (3) quarters multiplied by four thirds (4/3) with respect to the
quarter ended September 30, 2010. In the event the Triad Acquisition
is consummated on any day other than the last day of the quarter, EBITDAX shall
be calculated on a pro
forma basis as if the Triad Acquisition had taken place on the first day
of such quarter.
“Effective Date” means
the date first written above.
“Engineering Reports”
has the meaning assigned such term in Section
2.07(c)(i).
-7-
“Environmental Laws”
means any and all Governmental Requirements pertaining in any way to health,
safety, the environment or the preservation or reclamation of natural resources,
in effect in any and all jurisdictions in which the Borrower or any Subsidiary
is conducting or at any time has conducted business, or where any Property of
the Borrower or any Restricted Subsidiary is located, including without
limitation, the Oil Pollution Act of 1990 (“OPA”), as amended,
the Clean Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 (“CERCLA”), as amended,
the Federal Water Pollution Control Act, as amended, the Occupational Safety and
Health Act of 1970, as amended, the Resource Conservation and Recovery Act of
1976 (“RCRA”),
as amended, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, the Superfund Amendments and Reauthorization Act of
1986, as amended, the Hazardous Materials Transportation Act, as amended, and
other environmental conservation or protection Governmental
Requirements. The term “oil” shall have the meaning specified in OPA,
the terms “hazardous substance” and “release” (or “threatened release”) have the
meanings specified in CERCLA, the terms “solid waste” and “disposal” (or
“disposed”) have the meanings specified in RCRA and the term “oil and gas waste”
shall have the meaning specified in Section 91.1011 of the Texas Natural
Resources Code (“Section 91.1011”);
provided, however, that (a) in
the event either OPA, CERCLA, RCRA or Section 91.1011 is amended so as to
broaden the meaning of any term defined thereby, such broader meaning shall
apply subsequent to the effective date of such amendment and (b) to the extent
the laws of the state or other jurisdiction in which any Property of the
Borrower or any Subsidiary is located establish a meaning for “oil,” “hazardous
substance,” “release,” “solid waste,” “disposal” or “oil and gas waste” which is
broader than that specified in either OPA, CERCLA, RCRA or Section 91.1011, such
broader meaning shall apply.
“Equity Interests”
means shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such Equity
Interest.
“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to
time.
“ERISA Affiliate”
means each trade or business (whether or not incorporated) that, together with
the Borrower or a Subsidiary is treated as a “single employer”
under Section 414(b) or (c) of the Code, or solely for the proposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
“ERISA Event” means
(a) any “reportable
event”, as defined in Section 4043 of ERISA or the regulations issued
thereunder with respect to a Plan (other than an event for which the 30 day
notice period is waived); (b) the existence with respect to any Plan of an
“accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the
Code or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by the Borrower or
any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by the Borrower or any
ERISA Affiliate from the PBGC or a plan administrator of any notice relating to
an intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
-8-
“Eurodollar”, when
used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.
“Event of Default” has
the meaning assigned such term in Section
10.01.
“Excepted Liens” means
(a) Liens for Taxes, assessments or other governmental charges or levies which
are not delinquent or which are being contested in good faith by appropriate
action and for which adequate reserves have been maintained in accordance with
GAAP; (b) Liens in connection with workers’ compensation, unemployment insurance
or other social security, old age pension or public liability obligations which
are not delinquent or which are being contested in good faith by appropriate
action and for which adequate reserves have been maintained in accordance with
GAAP; (c) statutory landlord’s liens, operators’, vendors’, carriers’,
warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s,
construction or other like Liens arising by operation of law in the ordinary
course of business or incident to the exploration, development, operation and
maintenance of Oil and Gas Properties each of which is in respect of obligations
that are not delinquent or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP; (d) contractual Liens that arise in the ordinary course of
business under operating agreements, joint venture agreements, oil and gas
partnership agreements, oil and gas leases, farm-out agreements, division
orders, contracts for the sale, transportation or exchange of oil and natural
gas, unitization and pooling declarations and agreements, area of mutual
interest agreements, overriding royalty agreements, marketing agreements,
processing agreements, net profits agreements, development agreements, gas
balancing or deferred production agreements, injection, repressuring and
recycling agreements, salt water or other disposal agreements, seismic or other
geophysical permits or agreements, and other agreements which are usual and
customary in the oil and gas business and are for claims which are not
delinquent or which are being contested in good faith by appropriate action and
for which adequate reserves have been maintained in accordance with GAAP (or,
with respect to royalty interests, such liens will not reasonably be expected to
result in a Material Adverse Effect), provided that any such Lien referred to in
this clause does not materially impair the use of the Property covered by such
Lien for the purposes for which such Property is held by the Borrower or any
Subsidiary or materially impair the value of such Property subject thereto; (e)
Liens arising solely by virtue of any statutory or common law provision relating
to banker’s liens, rights of set-off or similar rights and remedies and
burdening only deposit accounts or other funds maintained with
-9-
a
creditor depository institution, provided that no such deposit account is a
dedicated cash collateral account or is subject to restrictions against access
by the depositor in excess of those set forth by regulations promulgated by the
Board and no such deposit account is intended by Borrower or any of its
Subsidiaries to provide collateral to the depository institution; (f) easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations in any Property of the Borrower or any Subsidiary for the purpose
of roads, pipelines, transmission lines, transportation lines, distribution
lines for the removal of gas, oil, coal or other minerals or timber, and other
like purposes, or for the joint or common use of real estate, rights of way,
facilities and equipment, which in the aggregate do not materially impair the
use of such Property for the purposes of which such Property is held by the
Borrower or any Subsidiary or materially impair the value of such Property
subject thereto; (g) Liens on cash or securities pledged to secure
performance of tenders, surety and appeal bonds, government contracts,
performance and return of money bonds, bids, trade contracts, leases, statutory
obligations, regulatory obligations and other obligations of a like nature
incurred in the ordinary course of business; (h) judgment and attachment Liens
not giving rise to an Event of Default, provided that any
appropriate legal proceedings which may have been duly initiated for the review
of such judgment shall not have been finally terminated or the period within
which such proceeding may be initiated shall not have expired and no action to
enforce such Lien has been commenced; and (i) Liens arising from UCC financing
statement filings regarding operating leases entered into by the Borrower and
the Subsidiaries in the ordinary course of business covering only the Property
under lease; provided, further that Liens described in clauses (a) through (e)
shall remain Excepted Liens only for so long as no action to enforce such Lien
has been commenced and no intention to subordinate the first priority Lien
granted in favor of the Administrative Agent and the Lenders is to be hereby
implied or expressed by the permitted existence of such Excepted
Liens.
“Excluded Taxes”
means, with respect to the Administrative Agent, any Lender, the Issuing Bank or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder or under any other Loan Document, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America or such other jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 5.04(b)),
any withholding tax that is imposed on amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party to this Agreement (or designates a
new lending office) or is attributable to such Foreign Lender’s failure to
comply with Section 5.03(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts with respect to such withholding tax pursuant to
Section 5.03(a) or
Section
5.03(c).
“Federal Funds Effective
Rate” means, for any day, the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, New York or, if such rate is not so published for any
day that is a Business Day, the average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
-10-
“Fee Letter” means the
letter agreement dated January 25, 2010, among the Borrower, the Administrative
Agent and the Co-Arrangers pertaining to certain fees payable to the
Administrative Agent and the Co-Arrangers.
“Financial Officer”
means, for any Person, the chief financial officer, principal accounting
officer, treasurer or controller of such Person. Unless otherwise
specified, all references herein to a Financial Officer means a Financial
Officer of the Borrower.
“Financial Statements”
means the financial statement or statements of the Borrower and its Consolidated
Subsidiaries referred to in Section
7.04(a).
“Foreign Lender” means
any Lender that is organized under the laws of a jurisdiction other than that in
which the Borrower is located. For purposes of this definition, the
United States of America, each State thereof and the District of Columbia shall
be deemed to constitute a single jurisdiction.
“Foreign Subsidiary”
means any Subsidiary that is not a Domestic Subsidiary.
“GAAP” means generally
accepted accounting principles in the United States of America as in effect from
time to time subject to the terms and conditions set forth in Section
1.05.
“Governmental
Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government over the
Borrower, any Subsidiary, any of their Properties, the Administrative Agent, the
Issuing Bank or any Lender.
“Governmental
Requirement” means any applicable law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement,
whether now or hereinafter in effect, including, without limitation,
Environmental Laws, energy regulations and occupational, safety and health
standards or controls, of any Governmental Authority.
“Guaranty” means the
Amended and Restated Guaranty executed by the Guarantors of even date herewith,
as amended, in the form of Exhibit F-2 attached
hereto.
“Guarantor” means all
Restricted Subsidiaries of Borrower.
“Highest Lawful Rate”
means, as to any Lender, the maximum non-usurious interest rate, if any (or, if
the context so requires, an amount calculated at such rate), that at any time or
from time to time may be contracted for, taken, reserved, charged, or received
by such Lender under applicable laws with respect to an obligation, as such laws
are presently in effect or, to the extent allowed by applicable law, as such
laws may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than such laws now allow. The determination of the
Highest Lawful Rate shall, to the extent required by applicable law, take into
account as interest paid, taken, received, charged, reserved or contracted for
any and all relevant payments or charges under the Loan Documents.
-11-
“Hydrocarbon
Interests” means all rights, titles, interests and estates now or
hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or
other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding
royalty and royalty interests, net profit interests and production payment
interests, including any reserved or residual interests of whatever
nature.
“Hydrocarbons” means
oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined
or separated therefrom.
“Indemnified Taxes”
means Taxes other than Excluded Taxes.
“Interest Election
Request” means a request by the Borrower to convert or continue a
Borrowing in accordance with Section
2.04.
“Interest Expense”
means, for any applicable period, the aggregate cash interest expense (both
accrued and paid and net of interest income paid during such period to the
Borrower and its Restricted Subsidiaries) of the Borrower and its Restricted
Subsidiaries for such applicable period, including the portion of any payments
made in respect of Capital Leases allocable to interest expense.
“Interest Payment
Date” means (a) with respect to any ABR Loan, the last day of each March,
June, September and December and (b) with respect to any Eurodollar Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar Borrowing with an Interest Period of
more than three months’ duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months’ duration after the
first day of such Interest Period.
“Interest Period”
means with respect to any Eurodollar Borrowing, the period commencing on the
date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three, six or twelve months thereafter, as the
Borrower may elect; provided, that (a) if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (b) any
Interest Period pertaining to a Eurodollar Borrowing that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest
Period. For purposes hereof, the date of a Borrowing initially shall
be the date on which such Borrowing is made and thereafter shall be the
effective date of the most recent conversion or continuation of such
Borrowing.
-12-
“Interim
Redetermination” means any redetermination of the Borrowing Base under
Section 2.07(b)(ii)
or Section
2.07(b)(iii).
“Interim Redetermination
Date” means the date on which a Borrowing Base that has been redetermined
pursuant to an Interim Redetermination becomes effective as provided in Section 2.07(d).
“Investment” means,
for any Person: (a) the acquisition (whether for cash, Property, services or
securities or otherwise) of Equity Interests of any other Person or any
agreement to make any such acquisition (including, without limitation, any
“short sale” or
any sale of any securities at a time when such securities are not owned by the
Person entering into such short sale) or any capital contribution to any other
Person; (b) the making of any deposit with, or advance, loan or capital
contribution to, assumption of Debt of, purchase or other acquisition of any
other Debt or equity participation or interest in, or other extension of credit
to, any other Person (including the purchase of Property from another Person
subject to an understanding or agreement, contingent or otherwise, to resell
such Property to such Person); or (c) the entering into of any guarantee of, or
other contingent obligation (including the deposit of any Equity Interests to be
sold) with respect to, Debt or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person.
“Issuing Bank” means
Bank of Montreal, in its capacity as the issuer of Letters of Credit hereunder,
and its successors in such capacity as provided herein. The Issuing
Bank may, in its discretion, arrange for one or more Letters of Credit to be
issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.
“LC Commitment” at any
time means Five Million Dollars ($5,000,000).
“LC Disbursement”
means a payment made by the Issuing Bank pursuant to a Letter of Credit issued
by the Issuing Bank.
“LC Exposure” means,
at any time, the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit at such time plus (b) the aggregate amount of all LC
Disbursements that have not yet been reimbursed by or on behalf of the Borrower
at such time. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.
“Lenders” means the
Persons listed on Annex I, any Person
that shall have become a party hereto pursuant to an Assignment and Assumption,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Assumption.
“Letter of Credit”
means any letter of credit issued pursuant to this Agreement.
“Letter of Credit
Agreements” means all letter of credit applications and other agreements
(including any amendments, modifications or supplements thereto) submitted by
the Borrower, or entered into by the Borrower, with the Issuing Bank relating to
any Letter of Credit issued by the Issuing Bank.
-13-
“LIBO Rate” means,
with respect to any Eurodollar Borrowing for any Interest Period, the rate
appearing on Reuters BBA Libor Rates LIBOR01 (or on any successor or substitute
page of such service, or any successor to or substitute for such service,
providing rate quotations comparable to those currently provided on such page of
such service, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate for
dollar deposits with a maturity comparable to such Interest Period; provided, in no event
shall the LIBO Rate be less than 1%. In the event that such rate is
not available at such time for any reason, then the LIBO Rate with respect to
such Eurodollar Borrowing for such Interest Period shall be the rate at which
dollar deposits of $5,000,000 and, in each case, for a maturity comparable to
such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
“Lien” means any
interest in Property securing an obligation owed to, or a claim by, a Person
other than the owner of the Property, whether such interest is based on the
common law, statute or contract, and whether such obligation or claim is fixed
or contingent, and including but not limited to (a) the lien or security
interest arising from a mortgage, encumbrance, pledge, security agreement,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes or (b) royalties, production payments and the like payable out
of Oil and Gas Properties. The term “Lien” shall include
easements, restrictions, servitudes, permits, conditions, covenants,
encroachments, exceptions or reservations. For the purposes of this
Agreement, the Borrower and its Subsidiaries shall be deemed to be the owner of
any Property which it has acquired or holds subject to a conditional sale
agreement, or leases under a financing lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some other Person
in a transaction intended to create a financing.
“Loan Documents” means
this Agreement, the Notes, the Letter of Credit Agreements, the Letters of
Credit, the Security Instruments and the Guaranties.
“Loan Parties” means
the Borrower and each Subsidiary that is a party to any Loan
Document.
“Loans” means the
loans made by the Lenders to the Borrower pursuant to this
Agreement.
“Material Adverse
Effect” means a material adverse effect on (a) the business, operations,
Property or condition (financial or otherwise) of the Borrower and the
Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform any
of its obligations under any Loan Document, (c) the validity or enforceability
of any Loan Document or (d) the rights and remedies of or benefits available to
the Administrative Agent, the Issuing Bank or any Lender under any Loan
Document.
-14-
“Material
Indebtedness” means Debt (other than the Loans and Letters of Credit), or
obligations in respect of one or more Swap Agreements, of any one or more of the
Borrower and its Subsidiaries in an aggregate principal amount exceeding
$1,500,000. For purposes of determining Material Indebtedness, the
“principal
amount” of the obligations of the Borrower or any Subsidiary in respect
of any Swap Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Swap Agreement were terminated at such
time.
“Maturity Date” means
November 23, 2012.
“Maximum Credit
Amount” means, as to each Lender, the amount set forth opposite such
Lender’s name on Annex
I under the caption “Maximum Credit
Amounts,” as the same may be (a) reduced or terminated from time to time
in connection with a reduction or termination of the Aggregate Maximum Credit
Amounts pursuant to Section 2.06(b), or
(b) modified from time to time pursuant to any assignment permitted by Section
12.04(b).
“Moody’s” means
Xxxxx’x Investors Service, Inc. and any successor thereto that is a nationally
recognized rating agency.
“Mortgaged Property”
means any Property owned by the Borrower or any Restricted Subsidiary that is
subject to the Liens existing and to exist under the terms of the Security
Instruments.
“Mortgages” means all
mortgages and deeds of trust executed in connection herewith.
“Multiemployer Plan”
means a Plan which is a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
“New Borrowing Base
Notice” has the meaning assigned such term in Section
2.07(d).
“Notes” means the
promissory notes of the Borrower described in Section 2.02(d) and
being substantially in the form of Exhibit A, together
with all amendments, modifications, replacements, extensions and rearrangements
thereof.
“Obligations” means,
without duplication, (i) all Debt evidenced hereunder, (ii) the obligation of
the Loan Parties for the payment of the fees payable hereunder or under the
other Loan Documents, (iii) all other obligations and liabilities of the
Borrower to any then current Lender or Affiliate of a then current Lender
relating to Swap Agreements between the Borrower or any Subsidiary and such
Lender or Affiliate of a Lender initially entered into while such person (or in
the case of its Affiliate, the Person affiliated therewith) is a Lender
hereunder, and (iv) all other obligations and liabilities (monetary or
otherwise, whether absolute or contingent, matured or unmatured) of the Loan
Parties to the Administrative Agent, the Issuer and the Lenders, including
reimbursement obligations with respect to LC Disbursements, in each case now
existing or hereafter incurred under, arising out of or in connection with any
Loan Document, and to the extent that any of the foregoing includes or refers to
the payment of amounts deemed or constituting interest, only so much thereof as
shall have accrued, been earned and which remains unpaid at each relevant time
of determination.
-15-
“Oil and Gas
Properties” means (a) Hydrocarbon Interests; (b) Properties now or
hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently
existing or future unitization, pooling agreements and declarations of pooled
units and the units created thereby (including without limitation all units
created under orders, regulations and rules of any Governmental Authority) which
may affect all or any portion of Hydrocarbon Interests; (d) all operating
agreements, contracts and other agreements, including production sharing
contracts and agreements, which relate to any of Hydrocarbon Interests or the
production, sale, purchase, exchange or processing of Hydrocarbons from or
attributable to such Hydrocarbon Interests; (e) all Hydrocarbons in and under
and which may be produced and saved or attributable to the Hydrocarbon
Interests, including all oil in tanks, and all rents, issues, profits, proceeds,
products, revenues and other incomes from or attributable to Hydrocarbon
Interests; (f) all tenements, hereditaments, appurtenances and Properties in any
manner appertaining, belonging, affixed or incidental to Hydrocarbon Interests
and (g) all Properties, rights, titles, interests and estates described or
referred to above, including any and all Property, real or personal, now owned
or hereinafter acquired and situated upon, used, held for use or useful in
connection with the operating, working or development of any of such Hydrocarbon
Interests or Property (excluding drilling rigs, automotive equipment, rental
equipment or other personal Property which may be on such premises for the
purpose of drilling a well or for other similar temporary uses) and including
any and all oil xxxxx, gas xxxxx, injection xxxxx or other xxxxx, buildings,
structures, fuel separators, liquid extraction plants, plant compressors, pumps,
pumping units, field gathering systems, tanks and tank batteries, fixtures,
valves, fittings, machinery and parts, engines, boilers, meters, apparatus,
equipment, appliances, tools, implements, cables, wires, towers, casing, tubing
and rods, surface leases, rights-of-way, easements and servitudes together with
all additions, substitutions, replacements, accessions and attachments to any
and all of the foregoing.
“Other Taxes” means
any and all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement and any other Loan Document.
“Participant” has the
meaning set forth in Section
12.04(c)(i).
“Patriot Act” has the
meaning set forth in Section
12.15.
“PBGC” means the
Pension Benefit Guaranty Corporation referred to and defined in ERISA, and any
successor entity performing similar functions.
“PDP” means, with
respect to the Oil and Gas Properties, properties that are categorized as
“Proved Reserves” that are both “Developed” and “Producing” as such terms are
defined in the Definitions for Oil and Gas Reserves as promulgated by the
Society of Petroleum Engineers (or any generally recognized successor) as in
effect as the time in question.
“Person” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other
entity.
“Plan” means any
employee pension benefit plan (other than a Multiemployer Plan), subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed to be) an
“employer” as
defined in Section 3(5) of ERISA.
-16-
“Prime Rate” means the
rate of interest per annum publicly announced from time to time by BOM as its
prime rate in effect at its principal office in New York, New York; each change
in the Prime Rate shall be effective from and including the date such change is
publicly announced as being effective. Such rate is set by the
Administrative Agent as a general reference rate of interest, taking into
account such factors as the Administrative Agent may deem appropriate; it being
understood that many of the Administrative Agent’s commercial or other loans are
priced in relation to such rate, that it is not necessarily the lowest or best
rate actually charged to any customer and that the Administrative Agent may make
various commercial or other loans at rates of interest having no relationship to
such rate.
“Property” means any
interest in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, cash, securities,
accounts and contract rights.
“Proposed Borrowing
Base” has the meaning assigned to such term in Section
2.07(c)(i).
“Proposed Borrowing Base
Notice” has the meaning assigned to such term in Section 2.07(c)(ii).
“Redemption” means
with respect to any Debt, the repurchase, redemption, prepayment, repayment or
defeasance (or the segregation of funds with respect to any of the foregoing) of
such Debt. “Redeem” has the
correlative meaning thereto.
“Redetermination Date”
means, with respect to any Scheduled Redetermination or any Interim
Redetermination, the date that the redetermined Borrowing Base related thereto
becomes effective pursuant to Section
2.07(d).
“Register” has the
meaning assigned such term in Section
12.04(b)(iv).
“Regulation D” means
Regulation D of the Board, as the same may be amended, supplemented or replaced
from time to time.
“Related Parties”
means, with respect to any specified Person, such Person’s Affiliates and the
respective directors, officers, employees, agents and advisors (including
attorneys, accountants and experts) of such Person and such Person’s
Affiliates.
“Remedial Work” has
the meaning assigned such term in Section
8.10(a).
“Required Lenders”
means, at any time while no Loans or LC Exposure is outstanding, Lenders having
at least sixty-six and two thirds percent (66 2/3%) of the Aggregate Maximum
Credit Amounts; and at any time while any Loans or LC Exposure is outstanding,
Lenders holding at least sixty-six and two thirds percent (66 2/3%) of the
outstanding aggregate principal amount of the Loans or participation interests
in Letters of Credit (without regard to any sale by a Lender of a participation
in any Loan under Section
12.04(c)).
-17-
“Reserve Report” means
a report, in form and substance reasonably satisfactory to the Administrative
Agent, setting forth, as of each January 1st or July 1st (or such other date in
the event of an Interim Redetermination) the oil and gas reserves attributable
to the proved Oil and Gas Properties of the Borrower and the Restricted
Subsidiaries, together with a projection of the rate of production and future
net income, taxes, operating expenses and capital expenditures with respect
thereto as of such date, based upon the pricing assumptions consistent with SEC
reporting requirements at the time, and reflecting Swap Agreements in place with
respect to such production.
“Responsible Officer”
means, as to any Person, the Chief Executive Officer, the Chief Operating
Officer, the President, any Financial Officer or any Vice President of such
Person. Unless otherwise specified, all references to a Responsible
Officer herein shall mean a Responsible Officer of the Borrower.
“Restricted Payment”
means any dividend or other distribution (whether in cash, securities or other
Property) with respect to any Equity Interests in the Borrower or any Restricted
Subsidiary, or any payment (whether in cash, securities or other Property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
Equity Interests in the Borrower or any Restricted Subsidiary or any option,
warrant or other right to acquire any such Equity Interests in the Borrower or
any Restricted Subsidiary.
“Restricted
Subsidiary” means any Subsidiary that is not an Unrestricted
Subsidiary.
“Scheduled
Redetermination” has the meaning assigned such term in Section
2.07(b)(i).
“Scheduled Redetermination
Date” means the date on which a Borrowing Base that has been redetermined
pursuant to a Scheduled Redetermination becomes effective as provided in Section
2.07(d).
“SEC” means the U.S.
Securities and Exchange Commission or any successor Governmental
Authority.
“Security Agreement”
means the Amended and Restated Security and Pledge Agreement executed by
Borrower and the Guarantors of even date herewith, as amended, in the form of
Exhibit F-1
attached hereto.
“Security Instruments”
means the mortgages, deeds of trust and other agreements, instruments or
certificates, and any and all other agreements, instruments, certificates or
certificates now or hereafter executed and delivered by the Borrower or any
other Person (other than Swap Agreements with the Lenders or any Affiliate of a
Lender or participation or similar agreements between any Lender and any other
lender or creditor with respect to any Obligations pursuant to this Agreement)
in connection with, or as security for the payment or performance of the
Obligations, the Notes, this Agreement, or reimbursement obligations under the
Letters of Credit, as such agreements may be amended, modified, supplemented or
restated from time to time, including, without limitation, the Security
Agreement and Mortgages.
-18-
“S&P” means
Standard & Poor’s Ratings Group, a division of The XxXxxx-Xxxx Companies,
Inc., and any successor thereto that is a nationally recognized rating
agency.
“Statutory Reserve
Rate” means a fraction (expressed as a decimal), the numerator of which
is the number one and the denominator of which is the number one minus the
aggregate of the maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established by the
Board to which the Administrative Agent is subject for Eurocurrency funding
(currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation
D. Eurodollar Loans shall be deemed to constitute Eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
“Subsidiary” means (a)
any Person of which at least a majority of the outstanding Equity Interests
having by the terms thereof ordinary voting power to elect a majority of the
board of directors, manager or other governing body of such Person (irrespective
of whether or not at the time Equity Interests of any other class or classes of
such Person shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or Controlled by
the Borrower or one or more of its Subsidiaries or by the Borrower and one or
more of its Subsidiaries and (b) any partnership of which the Borrower or any of
its Subsidiaries is a general partner. Unless otherwise indicated
herein, each reference to the term “Subsidiary” shall
mean a Subsidiary of the Borrower.
“Swap Agreement” means
any agreement with respect to any swap, forward, future or derivative
transaction or option or similar agreement, whether exchange traded, “over-the-counter” or
otherwise, involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap
Agreement.
“Synthetic Leases”
means, in respect of any Person, all leases which shall have been, or should
have been, in accordance with GAAP, treated as operating leases on the financial
statements of the Person liable (whether contingently or otherwise) for the
payment of rent thereunder and which were properly treated as Obligations for
borrowed money for purposes of U.S. federal income taxes, if the lessee in
respect thereof is obligated to either purchase for an amount in excess of, or
pay upon early termination an amount in excess of, 80% of the residual value of
the Property subject to such operating lease upon expiration or early
termination of such lease.
“Taxes” means any and
all present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority.
-19-
“Termination Date”
means the earlier of the Maturity Date and the date of termination of the
Commitments.
“Tranche A Credit
Exposure” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Tranche A Loans and its LC
Exposure at such time.
“Tranche A Loans”
means, at any time, all Loans outstanding at such time to the extent the
aggregate principal amount of such Loans is equal to or less than an amount
equal to the Tranche A Portion then in effect minus the LC Exposure at such
time.
“Tranche A Portion”
means that portion of the Borrowing Base designated as such pursuant to Section
2.07.
“Tranche B Loans”
means, at any time, all Loans outstanding at such time to the extent the
aggregate principal amount of such Loans is greater than an amount equal to the
Tranche A Portion then in effect.
“Tranche B Portion”
means that portion of the Borrowing Base equal to:
(a) from and
after the Effective Date but prior to the three month anniversary of the
Effective Date, $10,000,000, less any reductions to such
amount under Sections
2.07(e) or 2.07(g) made during
such period;
(b) from and
after the three month anniversary of the Effective Date but prior to the six
month anniversary of the Effective Date, the lesser of (i) $9,000,000 and (ii)
the Tranche B Portion in effect on the last day of the immediately preceding
three month period, less any reductions to such
amount under Sections
2.07(e) or 2.07(g) made during
such period;
(c) from and
after the six month anniversary of the Effective Date but prior to the nine
month anniversary of the Effective Date, the lesser of (i) $7,000,000 and (ii)
the Tranche B Portion in effect on the last day of the immediately preceding
three month period, less any reductions to such
amount under Sections
2.07(e) or 2.07(g) made during
such period;
(d) from and
after the nine month anniversary of the Effective Date but prior to the Tranche
B Termination Date, the lesser of (i) $4,000,000 and (ii) the Tranche B Portion
in effect on the last day of the immediately preceding three month period, less any reductions to such
amount under Sections
2.07(e) or 2.07(g) made during
such period; and
(e) from and
after the Tranche B Termination Date, $0.
“Tranche B Termination
Date” means the earlier to occur of (a) the date on which the Borrower
permanently terminates all of the Tranche B Portion pursuant to Section 2.07(e) and
pays in full all outstanding Tranche B Loans and (b) the first year anniversary
of the Effective Date.
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“Transactions” means
the execution, delivery and performance by the Borrower of this Agreement, each
other Loan Document to which it is a party, the borrowing of Loans, the use of
the proceeds thereof and the issuance of Letters of Credit hereunder, and the
grant of Liens by the Borrower on Mortgaged Properties and other Properties
pursuant to the Security Instruments.
“Triad” means Triad
Energy Corporation.
“Triad Acquisition”
means the acquisition by the Borrower of the assets of Triad and certain of its
Affiliates free and clear of any liens of the credit facility between Triad and
its senior lenders and pursuant to and in accordance with that certain Asset
Purchase Agreement dated October 28, 2009, by and among the Borrower, Triad
Hunter, LLC, as purchaser, and Triad and certain other sellers, as
sellers.
“Type”, when used in
reference to any Loan or Borrowing, refers to whether the rate of interest on
such Loan, or on the Loans comprising such Borrowing, is determined by reference
to the Alternate Base Rate or the Adjusted LIBO Rate.
“UCC” means the
Uniform Commercial Code in effect from time to time in the State of New York,
or, where applicable as to specific Property, any other relevant
state.
“Unrestricted
Subsidiary” means (i) any Subsidiary that at the time of determination
shall have been designated as an Unrestricted Subsidiary by the Borrower in the
manner provided below (and shall not been subsequently designated as a
Restricted Subsidiary), (ii) any Subsidiary of an Unrestricted Subsidiary and
(iii) Alpha Hunter Drilling, LLC, Hunter Disposal, LLC and Hunter Real Estate,
LLC. The Borrower may from time to time designate any Subsidiary
(other than a Subsidiary that, immediately after such designation, shall hold
any Debt or Equity Interest in the Borrower or any Restricted Subsidiary) as an
Unrestricted Subsidiary, and may designate any Unrestricted Subsidiary as a
Restricted Subsidiary so long as, immediately after giving effect to such
designation, no Default shall have occurred and be continuing. Any
designation by the Borrower pursuant to this definition shall be made in an
officer’s certificate delivered to the Administrative Agent and containing a
certification that such designation is in compliance with the terms of this
definition.
“Wholly-Owned
Subsidiary” means any Subsidiary of which all of the outstanding Equity
Interests (other than any directors’ qualifying shares mandated by applicable
law), on a fully-diluted basis, are owned by the Borrower or one or more of the
Wholly-Owned Subsidiaries or by the Borrower and one or more of the Wholly-Owned
Subsidiaries.
Section
1.03 Types of Loans and
Borrowings. For
purposes of this Agreement, Loans and Borrowings, respectively, may be
classified and referred to by Type (e.g., a “Eurodollar Loan” or a
“Eurodollar
Borrowing”). Loans and Borrowings also may be classified and
referred to by reference to that portion of the Borrowing Base against which
they have been allocated (e.g., a “Tranche A Loan” or a
“Tranche B
Borrowing”).
-21-
Section
1.04 Terms Generally; Rules of
Construction. The
definitions of terms herein shall apply equally to the singular and plural forms
of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter
forms. The words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”. The word
“will” shall be construed to have the same meaning and effect as the word
“shall”. Unless the context requires otherwise (a) any definition of
or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any law shall be construed as referring to such law
as amended, modified, codified or reenacted, in whole or in part, and in effect
from time to time, (c) any reference herein to any Person shall be construed to
include such Person’s successors and assigns (subject to the restrictions
contained herein), (d) the words “herein”, “hereof” and “hereunder”, and words
of similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (e) with respect to the
determination of any time period, the word “from” means “from and including” and
the word “to” means “to and including” and (f) any reference herein to Articles,
Sections, Annexes, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Annexes, Exhibits and Schedules to, this
Agreement. No provision of this Agreement or any other Loan Document
shall be interpreted or construed against any Person solely because such Person
or its legal representative drafted such provision.
Section
1.05 Accounting Terms and
Determinations; GAAP. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters hereunder
shall be made, and all financial statements and certificates and reports as to
financial matters required to be furnished to the Administrative Agent or the
Lenders hereunder shall be prepared, in accordance with GAAP, applied on a basis
consistent with the Financial Statements except for changes in which Borrower’s
independent certified public accountants concur and which are disclosed to
Administrative Agent on the next date on which financial statements are required
to be delivered to the Lenders pursuant to Section 8.01(a);
provided that,
unless the Borrower and the Required Lenders shall otherwise agree in writing,
no such change shall modify or affect the manner in which compliance with the
covenants contained herein is computed such that all such computations shall be
conducted utilizing financial information presented consistently with prior
periods.
ARTICLE
II
The
Credits
Section
2.01 Commitments. Subject
to the terms and conditions set forth herein, each Lender agrees to make Loans
to the Borrower during the Availability Period in an aggregate principal amount
that will not result in (a) such Lender’s Credit Exposure exceeding such
Lender’s Commitment, (b) the total Credit Exposures exceeding the total
Commitments or (c) either the aggregate Tranche A Credit Exposures exceeding the
Tranche A Portion or the Tranche B Loans exceeding the Tranche B
Portion. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, repay and reborrow the
Loans.
Section
2.02 Loans and
Borrowings.
(a) Borrowings; Several
Obligations. Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
respective Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the
Commitments are several and no Lender shall be responsible for any other
Lender’s failure to make Loans as required.
-22-
(b) Types of
Loans. Subject to Section 3.03, each
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith; provided that Loans
first shall be allocated to the Tranche A Portion until it is fully utilized,
and thereafter Loans shall be allocated to the Tranche B
Portion. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided
that any exercise of such option shall not affect the obligation of the Borrower
to repay such Loan in accordance with the terms of this Agreement.
(c) Minimum Amounts; Limitation
on Number of Borrowings. At the commencement of each Interest
Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate
amount that is an integral multiple of $100,000 and not less than
$500,000. At the time that each ABR Borrowing is made, such Borrowing
shall be in an aggregate amount that is an integral multiple of $100,000 and not
less than $500,000; provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.08(e). Borrowings
of more than one Type may be outstanding at the same time; provided that (i)
while the Borrowing Base is less than $25,000,000, there shall not at any time
be more than a total of ten (10) Eurodollar Borrowings outstanding and (ii)
while the Borrowing Base is equal to or greater than $25,000,000, there shall
not at any time be more than a total of fifteen (15) Eurodollar Borrowings
outstanding. Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date or, with respect to any Tranche B Eurodollar
Loan, the Tranche B Termination Date.
(d) Notes. Any
Lender may request that Loans made by it be evidenced by a single promissory
note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender in
substantially the form of Exhibit A, dated, in
the case of (i) any Lender party hereto as of the date of this Agreement, as of
the date of this Agreement, (ii) any Lender that becomes a party hereto pursuant
to an Assignment and Assumption, as of the effective date of the Assignment and
Assumption, payable to the order of such Lender in a principal amount equal to
its Maximum Credit Amount as in effect on such date, and otherwise duly
completed. If any Lender’s Maximum Credit Amount increases or
decreases for any reason (whether pursuant to Section 2.06, Section 12.04(b) or
otherwise), the Borrower shall deliver or cause to be delivered on the effective
date of such increase or decrease, a new Note payable to the order of any Lender
who requested a Note hereunder in a principal amount equal to its Maximum Credit
Amount after giving effect to such increase or decrease, and otherwise duly
completed, and such Lender agrees to promptly thereafter return the previously
issued Note held by such Lender marked canceled or otherwise similarly
defaced. The date, amount, Type, interest rate and, if applicable,
Interest Period of each Loan made by each Lender that receives a Note, and all
payments made on account of the principal thereof, shall be recorded by such
Lender on its books for its Note, and, prior to any transfer, may be endorsed by
such Lender on a schedule attached to such Note or any continuation thereof or
on any separate record maintained by such Lender. Failure to make any
such notation or to attach a schedule shall not affect any Lender’s or the
Borrower’s rights or obligations in respect of such Loans or affect the validity
of such transfer by any Lender of its Note.
-23-
Section
2.03 Requests for
Borrowings. To
request a Borrowing, the Borrower shall notify the Administrative Agent of such
request by telephone or by written Borrowing Request in substantially the form
of Exhibit B
and signed by the Borrower (a “written Borrowing
Request”): (a) in the case of a Eurodollar Borrowing, not
later than 12:00 noon, New York, New York time, three Business Days before the
date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later
than 12:00 noon, New York, New York time, on the Business Day of the proposed
Borrowing; provided that no such
notice shall be required for any deemed request of an ABR Borrowing to finance
the reimbursement of an LC Disbursement as provided in Section 2.08(e). Each
telephonic and written Borrowing Request shall be irrevocable and each
telephonic Borrowing Request shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing
Request. Each such telephonic and written Borrowing Request shall
specify the following information in compliance with Section
2.02:
(i) the
aggregate amount of the requested Borrowing and whether it is under the Tranche
A Portion or the Tranche B Portion;
(ii) the date
of such Borrowing, which shall be a Business Day;
(iii) whether
such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
(iv) in the
case of a Eurodollar Borrowing, the initial Interest Period to be applicable
thereto, which shall be a period contemplated by the definition of the term
“Interest
Period”;
(v) the
amount of the then effective Borrowing Base, Tranche A Portion and Tranche B
Portion, the current total Tranche A Credit Exposures and outstanding principal
balance of Tranche B Loans (without regard to the requested Borrowing) and the
pro forma total Tranche
A Credit Exposures and Tranche B Loans (giving effect to the requested
Borrowing); and
(vi) the
location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section
2.05.
After the
Tranche B Termination Date, information regarding the Tranche B Portion and the
principal balance of the Tranche B Loans may be omitted from subsequent
Borrowing Requests.
If no
election as to the Type of Borrowing is specified, then the requested Borrowing
shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration. Each
Borrowing Request shall constitute a representation that the amount of the
requested Borrowing shall not cause (a) the total Credit Exposures to exceed the
total Commitments (i.e., the lesser of the Aggregate Maximum Credit Amounts and
the then effective Borrowing Base), (b) the total Tranche A Credit Exposures to
exceed the Tranche A Portion and (c) the total Tranche B Loans to exceed the
Tranche B Portion. Promptly following receipt of a Borrowing Request
in accordance with this Section 2.03, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested
Borrowing.
-24-
Section
2.04 Interest
Elections.
(a) Conversion and
Continuance. Each Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section
2.04. The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.
(b) Interest Election
Requests. To make an election pursuant to this Section 2.04, the
Borrower shall notify the Administrative Agent of such election by telephone or
by a written Interest Election Request in substantially the form of Exhibit C and signed
by the Borrower (a “written Interest Election
Request”) by the time that a Borrowing Request would be required under
Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each telephonic and
written Interest Election Request shall be irrevocable and each telephonic
Interest Election Request shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent.
(c) Information in Interest
Election Requests. Each telephonic and written Interest
Election Request shall specify the following information in compliance with
Section
2.02:
(i) the
Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to Section 2.04(c)(iii)
and (iv) shall
be specified for each resulting Borrowing);
(ii) the
effective date of the election made pursuant to such Interest Election Request,
which shall be a Business Day;
(iii) whether
the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
and
(iv) if the
resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest
Period”.
If any
such Interest Election Request requests a Eurodollar Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of one month’s duration.
-25-
(d) Notice to Lenders by the
Administrative Agent. Promptly following receipt of an
Interest Election Request, the Administrative Agent shall advise each Lender of
the details thereof and of such Lender’s portion of each resulting
Borrowing.
(e) Effect of Failure to Deliver
Timely Interest Election Request and Events of Default on Interest
Election. If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing: (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing
(and any Interest Election Request that requests the conversion of any Borrowing
to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be
ineffective) and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.
Section
2.05 Funding of
Borrowings.
(a) Funding by
Lenders. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 1:00 p.m., New York, New York time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower maintained with the Administrative Agent in
New York, New York and designated by the Borrower in the applicable Borrowing
Request; provided that ABR
Loans made to finance the reimbursement of an LC Disbursement as provided in
Section 2.08(e)
shall be remitted by the Administrative Agent to the Issuing Bank that made such
LC Disbursement.
(b) Presumption of Funding by
the Lenders. Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed date of any Borrowing that
such Lender will not make available to the Administrative Agent such Lender’s
share of such Borrowing, the Administrative Agent may assume that such Lender
has made such share available on such date in accordance with paragraph (a)
above and may, in reliance upon such assumption, make available to the Borrower
a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender’s Loan included in such Borrowing.
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Section
2.06 Changes in the Aggregate
Maximum Credit Amounts.
(a) Scheduled Termination of
Commitments. Unless previously terminated, the Commitments
shall terminate on the Maturity Date; provided, the
Commitments to make Tranche B Loans shall terminate on the Tranche B Termination
Date. If at any time the Aggregate Maximum Credit Amounts or the
Borrowing Base is terminated or reduced to zero, then the Commitments shall
terminate on the effective date of such termination or reduction.
(b) Optional Termination and
Reduction of Aggregate Maximum Credit Amounts.
(i) The
Borrower may at any time terminate, or from time to time reduce, the Aggregate
Maximum Credit Amounts; provided that (1)
each reduction of the Aggregate Maximum Credit Amounts shall be in an amount
that is an integral multiple of $1,000,000 and not less than $5,000,000 and (2)
the Borrower shall not terminate or reduce the Aggregate Maximum Credit Amounts
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section
3.04(c), the total Credit
Exposures would exceed the total Commitments.
(ii) The
Borrower shall notify the Administrative Agent of any election to terminate or
reduce the Aggregate Maximum Credit Amounts under Section 2.06(b)(i) at
least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative
Agent shall advise the Lenders of the contents thereof. Each notice
delivered by the Borrower pursuant to this Section 2.06(b)(ii)
shall be irrevocable. Any termination or reduction of the Aggregate
Maximum Credit Amounts shall be permanent and may not be
reinstated. Each reduction of the Aggregate Maximum Credit Amounts
shall be made ratably among the Lenders in accordance with each Lender’s
Applicable Percentage.
Section
2.07 Borrowing
Base.
(a) Initial Borrowing
Base. For the period from and including the Effective Date to
but excluding the first Redetermination Date, the amount of the Borrowing Base
shall be $70,000,0000. At each Redetermination Date prior to the
Tranche B Termination Date, the Borrowing Base shall consist of two portions:
the Tranche A Portion and the Tranche B Portion, which Tranche A Portion shall
be determined in accordance with this Section 2.07 and
which Tranche B Portion shall be reduced as provided in Sections 2.07(e),
(f) and (g). The
initial amount of the Tranche A Portion shall be $60,000,000 and the initial
amount of the Tranche B Portion shall be $10,000,000. Notwithstanding
the foregoing, the Borrowing Base may be subject to further adjustments from
time to time pursuant to Section 8.13(c) or
Section
9.11.
(b) Scheduled and Interim
Redeterminations.
(i) Commencing
with the first Redetermination Date, the Tranche A Portion of the Borrowing Base
shall be redetermined semi-annually in accordance with this Section 2.07 (a
“Scheduled
Redetermination”), and, subject to Section 2.07(d), such
redetermined Borrowing Base shall become effective and applicable to the
Borrower, the Administrative Agent, the Issuing Bank and the Lenders on or
around April 1st and October 1st of each year, commencing with the April 1st or
October 1st immediately following the first Redetermination Date.
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(ii) The
Administrative Agent may or shall, at the direction of the Required Lenders, by
notifying the Borrower thereof, one time during any six-month period, elect to
cause the Tranche A Portion of the Borrowing Base to be redetermined between
Scheduled Redeterminations in accordance with this Section
2.07.
(iii) The
Borrower may elect to redetermine the Tranche A Portion of the Borrowing Base,
by notifying the Administrative Agent thereof, one time during any six-month
period, that it elects to cause the Tranche A Portion of the Borrowing Base to
be redetermined between Scheduled Redeterminations in accordance with this Section
2.07.
(c) Scheduled and Interim
Redetermination Procedure.
(i) Each
Scheduled Redetermination and each Interim Redetermination shall be effectuated
as follows: upon receipt by the Administrative Agent of (1) the
Reserve Report and the certificate required to be delivered by the Borrower, in
the case of a Scheduled Redetermination, pursuant to Section 8.12(a) and
(c), and, in the case
of an Interim Redetermination, pursuant to Section 8.12(b)
and (c), and (2) such
other reports, data and supplemental information, including, without limitation,
the information provided pursuant to Section 8.12(c), as
may, from time to time, be reasonably requested by the Required Lenders (the
Reserve Report, such certificate and such other reports, data and supplemental
information being the “Engineering
Reports”), the Administrative Agent shall evaluate the information
contained in the Engineering Reports and shall, in good faith, propose a new
Borrowing Base which, prior to the Tranche B Termination Date, shall specify a
new Tranche A Portion (all such amounts being the “Proposed Borrowing
Base”) based upon such information and such other information (including,
without limitation, the status of title information with respect to the Oil and
Gas Properties as described in the Engineering Reports and the existence of any
other Debt) as the Administrative Agent deems appropriate in its sole discretion
and consistent with its normal oil and gas lending criteria as it exists at the
particular time. In no event shall the Proposed Borrowing Base exceed
the Aggregate Maximum Credit Amounts.
(ii) The
Administrative Agent shall notify the Borrower and the Lenders of the Proposed
Borrowing Base (the “Proposed Borrowing Base
Notice”):
(1) in the
case of a Scheduled Redetermination (A) if the Administrative Agent shall have
received the Engineering Reports and other information required to be delivered
by the Borrower pursuant to Section 8.12(a) and
(c) in a timely and
complete manner, then on or before the March 15th and September 15th of such
year following the date of delivery or (B) if the Administrative Agent shall not
have received the Engineering Reports required to be delivered by the Borrower
pursuant to Section 8.12(a) and
(c) in a timely and
complete manner, then promptly after the Administrative Agent has received
complete Engineering Reports and other information from the Borrower and has had
a reasonable opportunity to determine the Proposed Borrowing Base in accordance
with Section
2.07(c)(i), and in any event, within fifteen (15) days after the
Administrative Agent has received the required Engineering Reports;
and
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(2) in the
case of an Interim Redetermination, promptly, and in any event, within fifteen
(15) days after the Administrative Agent has received the required Engineering
Reports.
(iii) Any
Proposed Borrowing Base that would increase the Borrowing Base (or prior to the
Tranche B Termination Date, the Tranche A Portion) then in effect must be
approved or deemed to have been approved by all of the Lenders as provided in
this Section 2.07(c)(iii)
and any Proposed Borrowing Base that would decrease or maintain the Borrowing
Base (or prior to the Tranche B Termination Date, the Tranche A Portion) then in
effect must be approved or be deemed to have been approved by the Required
Lenders as provided in this Section
2.07(c)(iii). Upon receipt of the Proposed Borrowing Base
Notice, each Lender shall have fifteen (15) days to agree with the Proposed
Borrowing Base or disagree with the Proposed Borrowing Base by proposing an
alternate Borrowing Base (which proposal must, prior to the Tranche B
Termination Date, also propose an alternate Tranche A Portion). If at
the end of such fifteen (15) days, any Lender has not communicated its approval
or disapproval in writing to the Administrative Agent, such silence shall be
deemed to be an approval of the Proposed Borrowing Base. If, at the
end of such 15-day period, all of the Lenders, in the case of a Proposed
Borrowing Base that would increase the Borrowing Base (or prior to the Tranche B
Termination Date, the Tranche A Portion) then in effect, or the Required
Lenders, in the case of a Proposed Borrowing Base that would decrease or
maintain the Borrowing Base (or prior to the Tranche B Termination Date, the
Tranche A Portion) then in effect, have approved or been deemed to have
approved, as aforesaid, then the Proposed Borrowing Base (or prior to the
Tranche B Termination Date, the Tranche A Portion specified therein) shall
become the new Borrowing Base (or prior to the Tranche B Termination Date, the
new Tranche A Portion), effective on the date specified in Section
2.07(d). If, however, at the end of such 15-day period, all of
the Lenders or the Required Lenders, as applicable, have not approved or been
deemed to have approved, as aforesaid, then the Administrative Agent shall (i)
notify the Borrower of the Proposed Borrowing Base and which Lenders have not
approved or been deemed to have approved the Proposed Borrowing Base and (ii)
poll the Lenders to ascertain the highest Borrowing Base (or prior to the
Tranche B Termination Date, the highest Tranche A Portion) then acceptable to a
number of Lenders sufficient to constitute the Required Lenders for purposes of
this Section 2.07 and, so
long as such amount does not increase the Borrowing Base (or prior to the
Tranche B Termination Date, the Tranche A Portion) then in effect, such amount
shall become the new Borrowing Base (or prior to the Tranche A Termination Date,
the new Tranche A Portion), effective on the date specified in Section 2.07(d).
(d) Effectiveness of a
Redetermined Borrowing Base. After a redetermined Borrowing
Base (or prior to the Tranche B Termination Date, a redetermined Tranche A
Portion) is approved or is deemed to have been approved by all of the Lenders or
the Required Lenders, as applicable, pursuant to Section 2.07(c)(iii),
the Administrative Agent shall notify the Borrower and the Lenders of the amount
of the redetermined Borrowing Base (and prior to the Tranche B Termination Date,
the redetermined Tranche A Portion) (the “New Borrowing Base
Notice”), and such amount (or amounts, as applicable) shall become the
new Borrowing Base (or prior to the Tranche B Termination Date, the new Tranche
A Portion), effective and applicable to the Borrower, the Administrative Agent,
the Issuing Bank and the Lenders:
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(i) in the
case of a Scheduled Redetermination, (1) if the Administrative Agent shall have
received the Engineering Reports required to be delivered by the Borrower
pursuant to Section 8.12(a)
and (c) in a timely and
complete manner, then on the April 1st or October 1st, as applicable, following
such notice, or (2) if the Administrative Agent shall not have received the
Engineering Reports required to be delivered by the Borrower pursuant to Section 8.12(a)
and (c) in a timely and
complete manner, then on the Business Day next succeeding delivery of such
notice; and
(ii) in the
case of an Interim Redetermination, on the Business Day next succeeding delivery
of such notice.
Such
amount shall then become the Borrowing Base (or prior to the Tranche B
Termination Date, the Tranche A Portion) until the next Scheduled
Redetermination Date, the next Interim Redetermination Date or the next
adjustment to the Borrowing Base under Section 8.13(c) or
Section 9.11,
whichever occurs first. Notwithstanding the foregoing, no Scheduled
Redetermination or Interim Redetermination shall become effective until the New
Borrowing Base Notice related thereto is received by the Borrower.
(e) Mandatory Reductions of the
Tranche B Portion.
(i) Prior to
the Tranche B Termination Date, any increase in the Tranche A Portion as a
result of a Scheduled Redetermination or Interim Redetermination of the
Borrowing Base shall automatically and permanently reduce the amount of the
Tranche B Portion by the amount of such increase in the Tranche A Portion on a
dollar for dollar basis and on the same date as any such increase in the Tranche
A Portion becomes effective.
(ii) Prior to
the Tranche B Termination Date, the Tranche B Portion shall be automatically and
permanently reduced by an amount equal to 100% of any net cash proceeds from the
public offering of equity securities by the Borrower. Notwithstanding
the foregoing, in the event of the issuance of either Class C preferred stock or
common stock under the Borrower’s ATM facility (collectively, the “ATM Financing”), 100%
of the proceeds shall be utilized to permanently reduce the Tranche B Portion to
an amount equal to or lesser than the next scheduled reduction of the Tranche B
Portion set forth in Section 2.07(f)
below; provided
that each reduction of the Tranche B Portion shall be applied in minimum
increments of $500,000 which increments shall be measured on a cumulative
basis. After such a reduction, the Borrower shall be permitted to
retain 100% of the net cash proceeds from the ATM Financing until the Borrower
has at least $10,000,000 of liquidity at which time the Borrower shall utilize
50% of such net cash proceeds to permanently reduce the Tranche B
Portion.
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(f) Scheduled Reduction of the
Tranche B Portion. Unless previously terminated, the Tranche B
Portion shall be automatically and permanently reduced to the following amounts
on the dates set forth below:
(i) on the
three month anniversary of the Effective Date, the lesser of (A) $9,000,000 and
(B) the Tranche B Portion in effect on the last day of the immediately preceding
three month period;
(ii) on the
six month anniversary of the Effective Date, the lesser of (A) $7,000,000 and
(B) the Tranche B Portion in effect on the last day of the immediately preceding
three month period;
(iii) on the
nine month anniversary of the Effective Date, the lesser of (A) $4,000,000 and
(B) the Tranche B Portion in effect on the last day of the immediately preceding
three month period;
(iv) on and
after the Tranche B Termination Date, $0.
(g) Optional Termination or
Reduction of the Tranche A Portion and the Tranche B
Portion. The Borrower may at any time terminate, or from time
to time reduce, the Tranche A Portion or the Tranche B Portion; provided that the
Borrower shall not reduce the Tranche A Portion unless the Tranche B Portion is
$0. Any optional reduction of the Tranche A Portion or the Tranche B
Portion shall be permanent. Any reduction in the Tranche A Portion or
the Tranche B Portion shall be effected using the procedures set forth in Section 2.06(b)(ii)
for reductions in the Aggregate Maximum Credit Amounts.
Section
2.08 Letters of
Credit.
(a) General. Subject
to the terms and conditions set forth herein, the Borrower may request the
Issuing Bank to issue Letters of Credit in dollars for its own account or for
the account of any of its Restricted Subsidiaries, in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time during the Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any Letter of Credit Agreement, the terms and conditions of
this Agreement shall control.
(b) Notice of Issuance,
Amendment, Renewal, Extension; Certain Conditions. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent
(not less than three (3) Business Days in advance of the requested date of
issuance, amendment, renewal or extension) a notice: (i) requesting the
issuance of a Letter of Credit or identifying the outstanding Letter of Credit
issued by the Issuing Bank to be amended, renewed or extended; (ii) specifying
the date of issuance, amendment, renewal or extension (which shall be a Business
Day); (iii) specifying the date on which such Letter of Credit is to expire
(which shall comply with Section 2.08(c));
(iv) specifying the amount of such Letter of Credit; (v) specifying the
name and address of the beneficiary thereof and such other information as shall
be necessary to prepare, amend, renew or extend such Letter of Credit; and (vi)
specifying the amount of the then effective Borrowing Base and if prior to the
Tranche B Termination Date the then effective Tranche A Portion, the current
total Tranche A Credit Exposures (without regard to the requested Letter of
Credit or the requested amendment, renewal or extension of an outstanding
Letter of
Credit) and the pro
forma total Credit Exposures and if prior to the Tranche B Termination
Date the total Tranche A Credit Exposures (giving effect to the requested Letter
of Credit or the requested amendment, renewal or extension of an outstanding
Letter of Credit). If requested by the Issuing Bank, the Borrower
shall submit a letter of credit application on the Issuing Bank’s standard form
in connection with any request for a Letter of Credit. A Letter of
Credit shall be issued, amended, renewed or extended only if (and with respect
to each notice provided by the Borrower above and any issuance, amendment,
renewal or extension of each Letter of Credit, the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (1) the LC Exposure shall not exceed the LC Commitment and
(2) the total Credit Exposures shall not exceed the total Commitments (i.e. the
lesser of the Aggregate Maximum Credit Amounts and the then effective Borrowing
Base).
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(c) Expiration
Date. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal, which renewal
may be provided for in the initial Letter of Credit, or extension thereof, one
year after such renewal or extension) and (ii) the date that is five Business
Days prior to the Maturity Date.
(d) Participations. By
the issuance of a Letter of Credit (or an amendment to an existing Letter of
Credit increasing the amount thereof) and without any further action on the part
of the Issuing Bank that issues such Letter of Credit or the Lenders, the
Issuing Bank that issues a Letter of Credit hereunder hereby grants to each
Lender, and each Lender hereby acquires from the Issuing Bank, a participation
in such Letter of Credit equal to such Lender’s Applicable Percentage of the
aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Issuing Bank that issues a Letter of Credit
hereunder, such Lender’s Applicable Percentage of each LC Disbursement made by
the Issuing Bank and not reimbursed by the Borrower on the date due as provided
in Section 2.08(e), or
of any reimbursement payment required to be refunded to the Borrower for any
reason. Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this Section 2.08(d) in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If
the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit
issued by the Issuing Bank, the Borrower shall reimburse such LC Disbursement by
paying to the Administrative Agent an amount equal to such LC Disbursement not
later than 12:00 noon, New York, New York time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York, New York time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 12:00 noon, New York, New York time, on (i) the
Business Day that the Borrower receives such notice, if such notice is received
prior to 10:00 a.m., New York, New York time, on the day of receipt, or (ii) the
Business Day immediately following the day that the Borrower receives such
notice, if such notice is not received prior to such time on the day of receipt;
provided that
if such LC Disbursement is not less than $1,000,000, the Borrower shall, subject
to the conditions to Borrowing set forth herein, be deemed to have requested,
and the Borrower does hereby request under such circumstances, that such payment
be financed with an ABR Borrowing in an equivalent amount and, to the extent so
financed, the Borrower’s obligation to make such payment shall be discharged and
replaced by the resulting ABR Borrowing. If the Borrower fails to
make such payment when due, the Administrative Agent shall notify each Lender of
the applicable LC Disbursement, the payment then due from the Borrower in
respect thereof
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and such
Lender’s Applicable Percentage thereof. Promptly following receipt of
such notice, each Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.05 with
respect to Loans made by such Lender (and Section 2.05 shall
apply, mutatis
mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank that issued such
Letter of Credit the amounts so received by it from the
Lenders. Promptly following receipt by the Administrative Agent of
any payment from the Borrower pursuant to this Section 2.08(e), the
Administrative Agent shall distribute such payment to the Issuing Bank that
issued such Letter of Credit or, to the extent that Lenders have made payments
pursuant to this Section 2.08(e) to
reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
interests may appear. Any payment made by a Lender pursuant to this
Section 2.08(e) to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Loans as contemplated above) shall not constitute a Loan and shall not
relieve the Borrower of its obligation to reimburse such LC
Disbursement.
(f) Obligations
Absolute. The Borrower’s obligation to reimburse LC
Disbursements as provided in Section 2.08(e) shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit, any Letter of Credit Agreement or this Agreement, or any term
or provision therein, (ii) any draft or other document presented under a Letter
of Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment by
the Issuing Bank under a Letter of Credit issued by the Issuing Bank against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit or any Letter of Credit Agreement, or (iv) any other event
or circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 2.08(f),
constitute a legal or equitable discharge of, or provide a right of setoff
against, the Borrower’s obligations hereunder. Neither the
Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related
Parties shall have any liability or responsibility by reason of or in connection
with the issuance or transfer of any Letter of Credit or any payment or failure
to make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), or any error, omission, interruption,
loss or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit (including any document
required to make a drawing thereunder), any error in interpretation of technical
terms or any consequence arising from causes beyond the control of the Issuing
Bank; provided that the foregoing shall not be construed to excuse the Issuing
Bank from liability to the Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by the Borrower to the extent permitted by applicable law) suffered by the
Borrower that are caused by the Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly
agree that, in the absence of gross negligence or willful misconduct on the part
of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised all requisite
care in each such determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the Issuing Bank that issued such Letter
of Credit may, in its sole reasonable discretion, either accept and make payment
upon such documents without responsibility for further investigation, regardless
of any notice or information to the contrary, or refuse to accept and make
payment upon such documents if such documents are not in strict compliance with
the terms of such Letter of Credit.
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(g) Disbursement
Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit issued by the Issuing Bank. The
Issuing Bank shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether the
Issuing Bank has made or will make an LC Disbursement thereunder; provided that any
failure to give or delay in giving such notice shall not relieve the Borrower of
its obligation to reimburse the Issuing Bank and the Lenders with respect to any
such LC Disbursement.
(h) Interim
Interest. If the Issuing Bank shall make any LC Disbursement,
then, until the Borrower shall have reimbursed the Issuing Bank for such LC
Disbursement (either with its own funds or a Borrowing under Section 2.08(e)), the
unpaid amount thereof shall bear interest, for each day from and including the
date such LC Disbursement is made to but excluding the date that the Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Loans. Interest accrued pursuant to this Section 2.08(h)
shall be for the account of the Issuing Bank, except that interest accrued on
and after the date of payment by any Lender pursuant to Section 2.08(e) to
reimburse the Issuing Bank shall be for the account of such Lender to the extent
of such payment.
(i) Replacement of an Issuing
Bank. The Issuing Bank may be replaced or resign at any time
by written agreement among the Borrower, the Administrative Agent, such
resigning or replaced Issuing Bank and, in the case of a replacement, the
successor Issuing Bank. The Administrative Agent shall notify the
Lenders of any such resignation or replacement of the Issuing
Bank. At the time any such resignation or replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the account of the
resigning or replaced Issuing Bank pursuant to Section
3.05(b). In the case of the replacement of an Issuing Bank,
from and after the effective date of such replacement, (i) the successor Issuing
Bank shall have all the rights and obligations of the replaced Issuing Bank
under this Agreement with respect to Letters of Credit to be issued thereafter
and (ii) references herein to the term “Issuing Bank” shall
be deemed to refer to such successor or to any previous Issuing Bank, or to such
successor and all previous Issuing Banks, as the context shall
require. After the resignation or replacement of an Issuing Bank
hereunder, the resigning or replaced Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit issued by it prior to
such resignation or replacement, but shall not be required to issue additional
Letters of Credit.
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(j) Cash
Collateralization. If (i) any Event of Default shall occur and
be continuing and the Borrower receives notice from the Administrative Agent or
the Required Lenders demanding the deposit of cash collateral pursuant to this
Section 2.08(j), or
(ii) the Borrower is required to pay to the Administrative Agent the excess
attributable to an LC Exposure in connection with any prepayment pursuant to
Section
3.04(c), then the
Borrower shall deposit, in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Lenders, an amount in
cash equal to, in the case of an Event of Default, the LC Exposure, and in the
case of a payment required by Section 3.04(c),
the amount of such excess as provided in Section 3.04(c), as of such date
plus any accrued and unpaid interest thereon; provided that the obligation to
deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Borrower or any Restricted Subsidiary described in Section 10.01(h)
or Section
10.01(i). The Borrower hereby grants to the Administrative
Agent, for the benefit of the Issuing Bank and the Lenders, an exclusive first
priority and continuing perfected security interest in and Lien on such account
and all cash, checks, drafts, certificates and instruments, if any, from time to
time deposited or held in such account, all deposits or wire transfers made
thereto, any and all investments purchased with funds deposited in such account,
all interest, dividends, cash, instruments, financial assets and other Property
from time to time received, receivable or otherwise payable in respect of, or in
exchange for, any or all of the foregoing, and all proceeds, products,
accessions, rents, profits, income and benefits therefrom, and any substitutions
and replacements therefor. The Borrower’s obligation to deposit
amounts pursuant to this Section 2.08(j) shall be absolute
and unconditional, without regard to whether any beneficiary of any such Letter
of Credit has attempted to draw down all or a portion of such amount under the
terms of a Letter of Credit, and, to the fullest extent permitted by applicable
law, shall not be subject to any defense or be affected by a right of set-off,
counterclaim or recoupment which the Borrower or any of its Subsidiaries may now
or hereafter have against any such beneficiary, the Issuing Bank, the
Administrative Agent, the Lenders or any other Person for any reason
whatsoever. Such deposit shall be held as collateral securing the
payment and performance of the Borrower’s obligations under this Agreement and
the other Loan Documents in a “securities account” (within the meaning of Article 8 of the UCC)
over which the Administrative Agent shall have “control” (within the meaning of
the UCC). Notwithstanding the foregoing, the Borrower may direct the
Administrative Agent and the “securities intermediary” (within the meaning of
the UCC) to invest amounts credited to the securities account, at the Borrower’s
risk and expense, in Investments described in Section 9.05(c) through (f). Interest
or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the
Administrative Agent to reimburse, on a pro rata basis, the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the LC Exposure at such time or, if the maturity
of the Loans has been accelerated, be applied to satisfy other obligations of
the Borrower under this Agreement or the other Loan Documents. If the
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, and the Borrower is not
otherwise required to pay to the Administrative Agent the excess attributable to
an LC Exposure in connection with any prepayment pursuant to Section 3.04(c),
then such amount (to the extent not applied as aforesaid) shall be returned to
the Borrower within three Business Days after all Events of Default have been
cured or waived.
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ARTICLE
III
Payments of Principal and
Interest; Prepayments; Fees
Section
3.01 Repayment of
Loans.
The
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of each Lender the then unpaid principal amount of each Loan on the
Termination Date; provided that the
Borrower shall pay all outstanding Tranche B Loans, if any, on the Tranche B
Termination Date.
Section
3.02 Interest.
(a) ABR
Loans. The Loans comprising each ABR Borrowing shall bear
interest at the Alternate Base Rate plus the Applicable Margin, but in no event
to exceed the Highest Lawful Rate.
(b) Eurodollar
Loans. The Loans comprising each Eurodollar Borrowing shall
bear interest at the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus the Applicable Margin, but in no event to exceed the Highest
Lawful Rate.
(c) Post-Default
Rate. Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder or under any other Loan Document is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to two
percent (2%) plus the rate applicable to ABR Loans as provided in Section 3.02(a), but
in no event to exceed the Highest Lawful Rate.
(d) Interest Payment
Dates. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and on the Termination Date;
provided that
(i) interest accrued pursuant to Section 3.02(c) shall
be payable on demand, (ii) in the event of any repayment or prepayment of any
Loan (other than an optional prepayment of an ABR Loan prior to the Termination
Date), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment, and (iii) in the event of
any conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.
(e) Interest Rate
Computations. All interest hereunder shall be computed on the
basis of a year of 360 days, unless such computation would exceed the Highest
Lawful Rate, in which case interest shall be computed on the basis of a year of
365 days (or 366 days in a leap year), except that interest computed by
reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last
day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO
Rate shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error, and be binding upon the parties
hereto.
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Section
3.03 Alternate Rate of
Interest. If
prior to the commencement of any Interest Period for a Eurodollar
Borrowing:
(a) the
Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining
the Adjusted LIBO Rate or the LIBO Rate for such Interest Period;
or
(b) the
Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
Rate or LIBO Rate, as applicable, for such Interest Period will not adequately
and fairly reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period;
then the
Administrative Agent shall give notice thereof to the Borrower and the Lenders
by telephone or telecopy as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
Section 3.04 Prepayments.
(a) Optional
Prepayments. The Borrower shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with Section 3.04(b).
(b) Notice and Terms of Optional
Prepayment. The Borrower shall notify the Administrative Agent
by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Borrowing, not later than 12:00 noon, New York,
New York time, three Business Days before the date of prepayment, or (ii) in the
case of prepayment of an ABR Borrowing, not later than 12:00 noon, New York, New
York time, on the Business Day of prepayment. Each such notice shall
be irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid. Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial
prepayment of any Borrowing shall be in an amount that would be permitted in the
case of an advance of a Borrowing of the same Type as provided in Section 2.02. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section
3.02.
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(c) Mandatory
Prepayments.
(i) If (A)
after giving effect to any termination or reduction of the Aggregate Maximum
Credit Amounts pursuant to Section 2.06(b),
the total Credit Exposures exceed the total Commitments, (B) after giving effect
to any reduction of the Tranche B Portion pursuant to Section 2.07(e) or
2.07(f), the
total Tranche B Loans exceed the Tranche B Portion or (C) after giving effect to
any termination or reduction of the Tranche A Portion or the Tranche B Portion
pursuant to Section
2.07(g), the total Tranche A Credit Exposures exceed the Tranche A
Portion or the total Tranche B Loans exceed the Tranche B Portion, then the
Borrower shall (1) prepay the applicable Borrowings on the date of such
termination or reduction in an aggregate principal amount equal to such excess,
and (2) if any excess remains after prepaying all of the Borrowings as a result
of an LC Exposure, pay to the Administrative Agent on behalf of the Lenders an
amount equal to such excess to be held as cash collateral as provided in Section 2.08(j).
(ii) Upon any
redetermination of or adjustment to the amount of the Borrowing Base or the
Tranche A Portion in accordance with Section 2.07 or Section 8.13(c), if the total
Tranche A Credit Exposures exceed the redetermined or adjusted Tranche A
Portion, then the Borrower shall (A) prepay the Tranche A Borrowings in an
aggregate principal amount equal to such excess, and (B) if any excess remains
after prepaying all of the Tranche A Borrowings as a result of an LC Exposure,
pay to the Administrative Agent on behalf of the Lenders an amount equal to such
excess to be held as cash collateral as provided in Section
2.08(j). The Borrower shall be obligated to pay all of such
prepayment and/or deposit of cash collateral amount within forty-five (45) days
following its receipt of the New Borrowing Base Notice in accordance with Section 2.07(d) or the date the
adjustment occurs; provided that all
payments required to be made pursuant to this Section 3.04(c)(ii)
must be made on or prior to the Termination Date.
(iii) Upon any
adjustments to the Borrowing Base or the Tranche A Portion pursuant to Section 9.11, if the
total Tranche A Credit Exposures exceed the Tranche A Portion as adjusted, then
the Borrower shall (A) prepay the Tranche A Borrowings in an aggregate principal
amount equal to such excess, and (B) if any excess remains after prepaying all
of the Tranche A Borrowings as a result of an LC Exposure, pay to the
Administrative Agent on behalf of the Lenders an amount equal to such excess to
be held as cash collateral as provided in Section
2.08(j). The Borrower shall be obligated to make such
prepayment and/or deposit of cash collateral on the date it receives cash
proceeds as a result of such disposition or such incurrence of Debt; provided that all
payments required to be made pursuant to this Section 3.04(c)(iii)
must be made on or prior to the Termination Date.
(iv) Each
prepayment of Borrowings pursuant to this Section 3.04(c) shall
be applied to outstanding Borrowings as directed by the Borrower or, if no such
direction is given, first, ratably to any ABR Borrowings then outstanding, and,
second, to any Eurodollar Borrowings then outstanding, and if more than one
Eurodollar Borrowing is then outstanding, to each such Eurodollar Borrowing in
order of priority beginning with the Eurodollar Borrowing with the least number
of days remaining in the Interest Period applicable thereto and ending with the
Eurodollar Borrowing with the most number of days remaining in the Interest
Period applicable thereto.
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(v) Each
prepayment of Borrowings pursuant to this Section 3.04(c) shall
be applied ratably to the Loans included in the prepaid Borrowings. Prepayments
pursuant to this Section 3.04(c) shall
be accompanied by accrued interest to the extent required by Section
3.02.
(d) No Premium or
Penalty. Prepayments permitted or required under this Section 3.04
shall be without premium or penalty, except as required under Section
5.02.
Section
3.05 Fees.
(a) Commitment
Fees. The Borrower agrees to pay to the Administrative Agent
for the account of each Lender a commitment fee, which shall accrue at the
applicable Commitment Fee Rate on the average daily amount of the unused amount
of the Commitment of such Lender during the period from and including the date
of this Agreement to but excluding the Termination Date. Accrued
commitment fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the Termination Date, commencing on
the first such date to occur after the date hereof. All commitment
fees shall be computed on the basis of a year of 360 days, unless such
computation would exceed the Highest Lawful Rate, in which case interest shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).
(b) Letter of Credit
Fees. The Borrower agrees to pay (i) to the Administrative
Agent for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Margin used to determine the interest rate applicable to Eurodollar Loans on the
average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the date of this Agreement to but excluding the later of the date on
which such Lender’s Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, (ii) to the Issuing Bank, for its own account, a
fronting fee, of 0.375% face amount of each Letter of Credit upon its issuance,
provided that in no event shall such fee be less than $500, and (iii) to the
Issuing Bank, for its own account, its standard and customary fees with respect
to the issuance, amendment, renewal or extension of any Letter of Credit issued
by the Issuing Bank or processing of drawings
thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third Business Day following such last day, commencing on the
first such date to occur after the date of this Agreement and fronting fees with
respect to any Letter of Credit shall be payable at the time of issuance of such
Letter of Credit; provided that all
such fees shall be payable on the Termination Date and any such fees accruing
after the Termination Date shall be payable on demand. Any other fees
payable to an Issuing Bank pursuant to this Section 3.05(b)
shall be payable within 10 days after demand. All participation fees
and fronting fees shall be computed on the basis of a year of 360 days, unless
such computation would exceed the Highest Lawful Rate, in which case interest
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day).
(c) Administrative Agent
Fees. The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times specified in
the Fee Letter, or otherwise separately agreed upon between the Borrower and the
Administrative Agent.
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(d) Borrowing Base
Fees. The Borrower agrees to pay to the Administrative Agent,
for the account of each Lender then party to this Agreement, ratably in
accordance with its Applicable Percentage, (i) a Borrowing Base fee equal to the
amount described in the Fee Letter, payable on the Effective Date and (ii) a
Borrowing Base increase fee equal to an amount to be agreed upon by the
Administrative Agent and the Borrower at the time of any increase of the
Borrowing Base on the amount of such increase over the highest Borrowing Base
previously in effect, payable on the effective date of any such increase to the
Borrowing Base.
ARTICLE
IV
Payments; Pro Rata
Treatment; Sharing of Set-offs.
Section
4.01 Payments Generally; Pro Rata
Treatment; Sharing of Set-offs.
(a) Payments by the
Borrower. The Borrower shall make each payment required to be
made by it hereunder (whether of principal, interest, fees or reimbursement of
LC Disbursements, or of amounts payable under Section 5.01, Section 5.02, Section 5.03 or
otherwise) prior to 12:00 noon, New York, New York time, on the date when due,
in dollars that constitute immediately available funds, without defense,
deduction, recoupment, set-off or counterclaim. Fees, once paid,
shall not be refundable under any circumstances absent manifest error (e.g., as
a result of a clerical mistake). Any amounts received after such time
on any date may, in the discretion of the Administrative Agent, be deemed to
have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices located at 0 Xxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, except payments to be made directly to an
Issuing Bank as expressly provided herein and except that payments pursuant to
Section 5.01, Section 5.02,
Section 5.03
and Section 12.03 shall
be made directly to the Persons entitled thereto. The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt
thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All
payments hereunder shall be made in dollars.
(b) Application of Insufficient
Payments. If at any time insufficient funds are received by
and available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such
parties.
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(c) Sharing of Payments by
Lenders. If any Lender shall, by exercising any right of
set-off or counterclaim or otherwise, obtain payment in respect of any principal
of or interest on any of its Loans or participations in LC Disbursements
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans and participations in LC Disbursements of other
Lenders to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Loans and participations
in LC Disbursements; provided that (i) if any such participations are purchased
and all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this Section 4.01(c) shall
not be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this Section 4.01(c)
shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
(d) If any
Lender shall fail to make any payment required to be made by it pursuant to
Section 2.05(a),
2.08(d) or
(e), 4.02 or 12.03(c), then the
Administrative Agent may, in its discretion and notwithstanding any contrary
provision hereof, (i) apply any amounts thereafter received by the
Administrative Agent for the account of such Lender and for the benefit of the
Administrative Agent or the Issuing Bank to satisfy such Lender’s obligations
under such Sections until all such unsatisfied obligations are fully paid,
and/or (ii) hold any such amounts in a segregated account as cash collateral
for, and application to, any future funding obligations of such Lender under
such Sections; in the case of each of (i) and (ii) above, in any order as
determined by the Administrative Agent in its discretion.
Section
4.02 Presumption of Payment by
the Borrower. Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Administrative Agent for the account
of the Lenders or the Issuing Bank that the Borrower will not make such payment,
the Administrative Agent may assume that the Borrower has made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Bank, as the case may be, the amount
due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or the Issuing Bank with interest thereon,
for each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank
compensation.
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Section
4.03 Certain Deductions by the
Administrative Agent. If
any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.05(b),
Section
2.08(d), Section 2.08(e) or
Section 4.02
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are fully
paid.
Section
4.04 Disposition of
Proceeds. The
Security Instruments contain an assignment by the Borrower unto and in favor of
the Administrative Agent for the benefit of the Lenders of all of the Borrower’s
interest in and to production and all proceeds attributable thereto that may be
produced from or allocated to the Mortgaged Property. The Security
Instruments further provide in general for the application of such proceeds to
the satisfaction of the Obligations and other obligations described therein and
secured thereby. Notwithstanding the assignment contained in such
Security Instruments, until the occurrence of an Event of Default, (a) the
Administrative Agent and the Lenders agree that they will neither notify the
purchaser or purchasers of such production nor take any other action to cause
such proceeds to be remitted to the Administrative Agent or the Lenders, but the
Lenders will instead permit such proceeds to be paid to the Borrower and its
Restricted Subsidiaries and (b) the Lenders hereby authorize the Administrative
Agent to take such actions as may be necessary to cause such proceeds to be paid
to the Borrower and/or such Restricted Subsidiaries.
ARTICLE
V
Increased Costs; Break
Funding Payments; Taxes; Illegality; Defaulting Lenders
Section
5.01 Increased
Costs.
(a) Eurodollar Changes in
Law. If any Change in Law shall:
(i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in the Adjusted LIBO
Rate); or
(ii) impose on
any Lender or the London interbank market any other condition affecting this
Agreement or Eurodollar Loans made by such Lender;
and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any Eurodollar Loan (or of maintaining its obligation to
make any such Loan) or to reduce the amount of any sum received or receivable by
such Lender (whether of principal, interest or otherwise), then the Borrower
will pay to such Lender such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction
suffered.
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(b) Capital
Requirements. If any Lender or the Issuing Bank determines
that any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s or the Issuing Bank’s
capital or on the capital of such Lender’s or the Issuing Bank’s holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, to a level below that which such Lender or
the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could
have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the
Issuing Bank’s holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender or the Issuing Bank, as the case
may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered.
(c) Certificates. A
certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding company,
as the case may be, as specified in Section 5.01(a) or
(b) and
reasonably detailed calculations therefor shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay
such Lender or the Issuing Bank, as the case may be, the amount shown as due on
any such certificate within 10 days after receipt thereof.
(d) Effect of Failure or Delay
in Requesting Compensation. Failure or delay on the part of
any Lender or the Issuing Bank to demand compensation pursuant to this Section 5.01 shall
not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand
such compensation; provided that the
Borrower shall not be required to compensate a Lender or an Issuing Bank
pursuant to this Section 5.01 for any
increased costs or reductions incurred more than 90 days prior to the date that
such Lender or the Issuing Bank, as the case may be, notifies the Borrower of
the Change in Law giving rise to such increased costs or reductions and of such
Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 90-day period referred to above shall be extended to include the period
of retroactive effect thereof.
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Section
5.02 Break Funding
Payments. In
the event of (a) the payment of any principal of any Eurodollar Loan other than
on the last day of an Interest Period applicable thereto (including as a result
of an Event of Default), (b) the conversion of any Eurodollar Loan into an ABR
Loan other than on the last day of the Interest Period applicable thereto, (c)
the failure to borrow, convert, continue or prepay any Eurodollar Loan on the
date specified in any notice delivered pursuant hereto, or (d) the assignment of
any Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 5.04(b),
then, in any such event, the Borrower shall compensate each Lender for the loss,
cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth any amount or
amounts that such Lender is entitled to receive pursuant to this Section 5.02 and
reasonably detailed calculations therefor shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
Section
5.03 Taxes.
(a) Payments Free of
Taxes. Any and all payments by or on account of any obligation
of the Borrower under any Loan Document shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 5.03(a)),
the Administrative Agent, Lender or Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) Payment of Other Taxes by
the Borrower. The Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Indemnification by the
Borrower. The Borrower shall indemnify the Administrative
Agent, each Lender and the Issuing Bank, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent, such Lender or the Issuing Bank, as the case may be,
on or with respect to any payment by or on account of any obligation of the
Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 5.03) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate of the Administrative Agent, a Lender or an Issuing Bank as to the
amount of such payment or liability under this Section 5.03
shall be delivered to the Borrower and shall be conclusive absent manifest
error.
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(d) Evidence of
Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Foreign
Lenders. Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement or any other Loan Document shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower as will permit such payments to be made without withholding or at a
reduced rate.
(f) Tax
Refunds. If the Administrative Agent or a Lender determines,
in its reasonable discretion, that it has received a refund of any Taxes or
Other Taxes as to which it has been indemnified by the Borrower or with respect
to which the Borrower has paid additional amounts pursuant to this Section 5.03, it
shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section 5.03
with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section 5.03 shall
not be construed to require the Administrative Agent or any Lender to make
available its tax returns (or any other information relating to its taxes which
it deems confidential) to the Borrower or any other Person.
Section
5.04 Mitigation
Obligations.
(a) Designation of Different
Lending Office. If any Lender requests compensation under
Section 5.01, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 5.03, then
such Lender shall use reasonable efforts to designate a different lending office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 5.01 or Section 5.03, as the
case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.
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(b) Replacement of
Lenders. If (i) any Lender requests compensation under Section 5.01,
(ii) the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 5.03, (iii)
any Lender becomes a Defaulting Lender, or (iv) any Lender has not approved (or
is not deemed to have approved) an increase in the Borrowing Base proposed by
the Administrative Agent pursuant to Section 2.07(c)(iii),
then the Borrower may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, (A) require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 12.04(b)),
all its interests, rights and obligations under this Agreement to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment) or (B) require such Lender to be removed as
a Lender under this Agreement and the other Loan Documents with a corresponding
reduction in the Aggregate Maximum Credit Amount equal to the Maximum Credit
Amount of such Lender; provided that, (1) in
the case of a required assignment of interest, the Borrower shall have received
the prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (2) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (3) in the case of any such assignment resulting from a claim
for compensation under Section 5.01 or
payments required to be made pursuant to Section 5.03, such
assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment
and delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
Section
5.05 Illegality. Notwithstanding
any other provision of this Agreement, in the event that it becomes unlawful for
any Lender or its applicable lending office to honor its obligation to make or
maintain Eurodollar Loans either generally or having a particular Interest
Period hereunder, then (a) such Lender shall promptly notify the Borrower and
the Administrative Agent thereof and such Lender’s obligation to make such
Eurodollar Loans shall be suspended (the “Affected Loans”)
until such time as such Lender may again make and maintain such Eurodollar Loans
and (b) all Affected Loans which would otherwise be made by such Lender shall be
made instead as ABR Loans (and, if such Lender so requests by notice to the
Borrower and the Administrative Agent, all Affected Loans of such Lender then
outstanding shall be automatically converted into ABR Loans on the date
specified by such Lender in such notice) and, to the extent that Affected Loans
are so made as (or converted into) ABR Loans, all payments of principal which
would otherwise be applied to such Lender’s Affected Loans shall be applied
instead to its ABR Loans.
Section
5.06 Defaulting
Lenders. Notwithstanding
any provision of this Agreement to the contrary, if any Lender becomes a
Defaulting Lender, the following provisions shall apply for so long as such
Lender is a Defaulting Lender:
(a) fees
shall cease to accrue on the unfunded portion of the Commitment of such
Defaulting Lender pursuant to Section
3.05;
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(b) the
Maximum Credit Amount and Credit Exposure of such Defaulting Lender shall not be
included in determining whether all Lenders or the Required Lenders have taken
or may take any action hereunder (including any consent to any amendment or
waiver pursuant to Section 12.02),
provided that any waiver, amendment or modification requiring the consent of all
Lenders or each affected Lender which affects such Defaulting Lender differently
than other affected Lenders shall require the consent of such Defaulting
Lender;
(c) if any LC
Exposure exists at the time a Lender becomes a Defaulting Lender
then:
(i) all or
any part of such LC Exposure shall be reallocated among the non-Defaulting
Lenders in accordance with their respective Applicable Percentages but only to
the extent (x) the sum of all non-Defaulting Lenders’ Credit Exposures does not
exceed the total of all non-Defaulting Lenders’ Maximum Credit Amounts and (y)
the conditions set forth in Section 6.03 are
satisfied at such time; and
(ii) if the
reallocation described in clause (i) above cannot, or can only partially, be
effected, the Borrower shall within one Business Day following notice by the
Administrative Agent cash collateralize such Defaulting Lender’s LC Exposure
(after giving effect to any partial reallocation pursuant to clause (i) above)
in accordance with the procedures set forth in Section 2.08(j)
for so long as such LC Exposure is outstanding;
(iii) if the
Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure
pursuant to clause (ii) above, the Borrower shall not be required to pay any
fees to such Defaulting Lender pursuant to Section 3.05(b) with
respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized;
(iv) if the LC
Exposure of the non-Defaulting Lenders is reallocated pursuant to
clause (i) above, then the fees payable to the Lenders pursuant to Section 3.05 shall be
adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages;
or
(v) if any
Defaulting Lender’s LC Exposure is neither cash collateralized nor reallocated
pursuant to this Section 5.06(c),
then, without prejudice to any rights or remedies of the Issuing Bank or any
Lender hereunder, all commitment fees that otherwise would have been payable to
such Defaulting Lender (solely with respect to the portion of such Defaulting
Lender’s Commitment that was utilized by such LC Exposure) and letter of credit
fees payable under Section 3.05(b)
with respect to such Defaulting Lender’s LC Exposure shall be payable to the
Issuing Bank until such LC Exposure is cash collateralized and/or reallocated;
and
(d) so long
as any Lender is a Defaulting Lender, the Issuing Bank shall not be required to
issue, amend or increase any Letter of Credit, unless it is satisfied that the
related LC Exposure will be 100% covered by the Commitments of the
non-Defaulting Lenders and/or cash collateral will be provided by the Borrower
in accordance with Section 5.06(c), and
participating interests in any such newly issued or increased Letter of Credit
shall be allocated among non-Defaulting Lenders in a manner consistent with
Section 5.06(c)(i)
(and Defaulting Lenders shall not participate therein).
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(e) In the
event that the Administrative Agent, the Borrower and the Issuing Bank each
agrees that a Defaulting Lender has adequately remedied all matters that caused
such Lender to be a Defaulting Lender, then the LC Exposure of the Lenders shall
be readjusted to reflect the inclusion of such Lender’s Commitment and on such
date such Lender shall purchase at par such of the Loans of the other Lenders as
the Administrative shall determine may be necessary in order for such Lender to
hold such Loans in accordance with its Applicable Percentage.
ARTICLE
VI
Conditions
Precedent
Section
6.01 Conditions to
Effectiveness. This
Agreement shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section
12.02):
(a) The
Administrative Agent, the Co-Arrangers and the Lenders shall have received all
fees and other amounts due and payable, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required to be reimbursed
or paid by the Borrower hereunder.
(b) The
Administrative Agent shall have received a certificate of the Secretary, an
Assistant Secretary or other authorized officer of each Loan Party setting forth
(i) resolutions of its board of directors with respect to the authorization of
such Loan Party to execute and deliver the Loan Documents to which it is a party
and to enter into the transactions contemplated in those documents, (ii) the
officers of such Loan Party (y) who are authorized to sign the Loan Documents to
which such Loan Party is a party and (z) who will, until replaced by another
officer or officers duly authorized for that purpose, act as its representative
for the purposes of signing documents and giving notices and other
communications in connection with this Agreement and the Transactions, (iii)
specimen signatures of such authorized officers, and (iv) the articles or
certificate of incorporation and bylaws of such Loan Party, certified as being
true and complete. To the extent a Loan Party previously delivered a
certificate complying with the foregoing sentence, the Administrative Agent
shall have received from such Loan Party a certificate of the Secretary, an
Assistant Secretary or other authorized officer of such Loan Party certifying
that the documents and certificates attached to such previously delivered
certificate and relating to such Loan Party’s formation and organization remain
in full force and effect. The Administrative Agent and the Lenders
may conclusively rely on such certificate until the Administrative Agent
receives notice in writing from the Borrower to the contrary.
(c) The
Administrative Agent shall have received certificates of the appropriate State
agencies with respect to the existence, qualification and good standing of each
Loan Party.
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(d) The
Administrative Agent shall have received a compliance certificate which shall be
substantially in the form of Exhibit D, duly and
properly executed by a Responsible Officer and dated as of the date of Effective
Date.
(e) The
Administrative Agent shall have received from each party hereto counterparts (in
such number as may be requested by the Administrative Agent) of this Agreement
signed on behalf of such party.
(f) The
Administrative Agent shall have received duly executed Notes payable to the
order of each Lender that has requested a Note in a principal amount equal to
its Maximum Credit Amount dated as of the date hereof.
(g) The
Administrative Agent shall have received from each party thereto duly executed
counterparts (in such number as may be requested by the Administrative Agent) of
the Security Instruments.
(h) The
Administrative Agent shall have received the opinions of Xxxxx Xxxxx LLP,
special counsel to the Borrower, Xxxxxxx Xxxxx PLLP, special North Dakota
counsel to the Borrower, Kegler, Brown, Hill & Xxxxxx Co., L.P.A., special
Ohio counsel to the Borrower, Xxxxxxxx Xxxxxx, LLC, special Louisiana counsel to
the Borrower, Xxxxxxx & Xxxxxxx, LLP, special West Virginia counsel to the
Borrower and McBrayer, McGinnis, Xxxxxx & Xxxxxxxx, PLLC, special Kentucky
counsel to the Borrower, each in form and substance satisfactory to
Administrative Agent.
(i) The
Administrative Agent shall have received a certificate of insurance coverage of
the Borrower evidencing that the Borrower is carrying insurance in accordance
with Section 7.12.
(j) The
Administrative Agent shall have received a certificate of a Responsible Officer
of the Borrower certifying that the Borrower has (i) received all consents and
approvals required by Section 7.03 and
(ii) has no other Debt in respect of borrowed money.
(k) The
Administrative Agent shall have received the financial statements referred to in
Section 7.04(a).
(l) The
Administrative Agent shall have received title information as it may reasonably
require setting forth the status of title to at least 80% of the total value of
the proved Oil and Gas Properties evaluated in the initial Reserve Report,
including 90% of the total value of the PDP Oil and Gas Properties evaluated in
such Reserve Report.
(m) The
Administrative Agent shall be reasonably satisfied with the environmental
condition of the Oil and Gas Properties of the Borrower and its Subsidiaries,
including the Oil and Gas Properties to be acquired in the Triad
Acquisition.
(n) The
Administrative Agent shall have received the initial Reserve Report for the Oil
and Gas Properties, including the Oil and Gas Properties to be acquired in the
Triad Acquisition, accompanied by a certificate covering the matters described
in Section
8.12(c).
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(o) The
Administrative Agent shall have received appropriate UCC search certificates
reflecting no prior Liens encumbering the Properties of the Borrower for each of
the following jurisdictions: Delaware, Louisiana, North Dakota, Ohio, Texas,
West Virginia, Kentucky and any other jurisdiction requested by the
Administrative Agent; other than those being assigned or released on or prior to
the Effective Date or Liens permitted by Section
9.03.
(p) The
Borrower and the Restricted Subsidiaries shall have minimum liquidity of not
less than $10,000,000; “liquidity” shall mean
the sum of all cash, cash equivalents and availability under the Borrowing
Base.
(q) The
Administrative Agent shall have received satisfactory evidence of the approval
of the Triad Acquisition by the United States Bankruptcy Court, Southern
District of Ohio, Eastern Division in the matter of In re Triad Resources, Inc., et
al., Case No. 08-62733.
(r) The
Administrative Agent shall have received copies of all documents relating to the
Triad Acquisition as it may reasonably request.
(s) The
Administrative Agent shall have received such other documents as the
Administrative Agent or its special counsel may reasonably request.
Section
6.02 Each Credit
Event. The
obligation of each Lender to make a Loan on the occasion of any Borrowing
(including the initial funding), and of the Issuing Bank to issue, amend, renew
or extend any Letter of Credit, is subject to the satisfaction of the following
conditions:
(a) At the
time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no
Default shall have occurred and be continuing.
(b) At the
time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no
event, development or condition that has or could reasonably be expected to have
a Material Adverse Effect shall have occurred.
(c) The
representations and warranties of the Borrower set forth in this Agreement and
in the other Loan Documents shall be true and correct on and as of the date of
such Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, except to the extent any such representations
and warranties are expressly limited to an earlier date, in which case, on and
as of the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, such representations and
warranties shall continue to be true and correct as of such specified earlier
date.
(d) The
making of such Loan or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, would not conflict with, or cause any Lender or
the Issuing Bank to violate or exceed, any applicable Governmental Requirement,
and no Change in Law shall have occurred, and no litigation shall be pending or
threatened, which does or, with respect to any threatened litigation, seeks to,
enjoin, prohibit or restrain, the making or repayment of any Loan, the issuance,
amendment, renewal, extension or repayment of any Letter of Credit or any
participations therein or the consummation of the transactions contemplated by
this Agreement or any other Loan Document.
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(e) The
receipt by the Administrative Agent of a Borrowing Request in accordance with
Section 2.03 or
a request for a Letter of Credit in accordance with Section 2.08(b), as
applicable.
(f) In
connection with the execution and delivery of the Security Instruments, the
Administrative Agent shall be reasonably satisfied that the Security Instruments
create first priority, perfected Liens (subject only to Excepted Liens
identified in clauses (a) to (d) and (f) of the definition thereof, but subject
to the provisos at the end of such definition) on at least 80% of the total
value of the proved Oil and Gas Properties evaluated in the initial Reserve
Report, including 90% of the total value of the PDP Oil and Gas Properties
evaluated in such Reserve Report.
Each
request for a Borrowing and each issuance, amendment, renewal or extension of
any Letter of Credit shall be deemed to constitute a representation and warranty
by the Borrower on the date thereof as to the matters specified in Sections 6.01(l) and
6.02(a) through
(d).
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ARTICLE
VII
Representations and
Warranties
The
Borrower represents and warrants to the Lenders that:
Section
7.01 Organization;
Powers. Each
of the Borrower and the Subsidiaries is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, has all
requisite power and authority, and has all material governmental licenses,
authorizations, consents and approvals necessary, to own its assets and to carry
on its business as now conducted, and is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required,
except where failure to have such power, authority, licenses, authorizations,
consents, approvals and qualifications could not reasonably be expected to have
a Material Adverse Effect. Schedule 7.01 is an
accurate corporate organizational chart of Borrower and its Subsidiaries sharing
the ownership of all Equity Interests in such Persons.
Section
7.02 Authority;
Enforceability. The
Transactions to be entered into by each Loan Party are within such Loan Party’s
corporate powers and have been duly authorized by all necessary corporate and,
if required, stockholder action (including, without limitation, any action
required to be taken by any class of directors of such Loan Party or any other
Person, whether interested or disinterested, in order to ensure the due
authorization of the Transactions). Each Loan Document to which any
Loan Party is a party has been duly executed and delivered by such Loan Party
and constitutes a legal, valid and binding obligation of such Loan Party
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
Section
7.03 Approvals; No
Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority or any other
third Person (including shareholders or any class of directors, whether
interested or disinterested, of any Loan Party or any other Person), nor is any
such consent, approval, registration, filing or other action necessary for the
validity or enforceability of any Loan Document or the consummation of the
transactions contemplated thereby, except such as have been obtained or made and
are in full force and effect other than (i) the recording and filing of the
Security Instruments as required by this Agreement and (ii) those third party
approvals or consents which, if not made or obtained, would not cause a Default
hereunder, could not reasonably be expected to have a Material Adverse Effect or
do not have an adverse effect on the enforceability of the Loan Documents, (b)
will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of the Borrower or any Subsidiary or any order of
any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument binding upon the Borrower or any
Subsidiary or its Properties, or give rise to a right thereunder to require any
payment to be made by the Borrower or such Subsidiary and (d) will not result in
the creation or imposition of any Lien on any Property of the Borrower or any
Subsidiary (other than the Liens created by the Loan Documents).
Section
7.04 Financial Condition; No
Material Adverse Change.
(a) The
Borrower has heretofore furnished to the Lenders its (i) audited consolidated
balance sheet and statement of income, stockholders equity and cash flows as of
and for the fiscal year ended December 31, 2008, all reported on by a firm of
independent public accountants acceptable to the Administrative Agent and (ii)
unaudited consolidated balance sheet and statements of income, stockholders
equity and cash flows as of and for the fiscal quarter and the portion of the
fiscal year ended September 30, 2009, certified by a Financial
Officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Borrower and its Consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the unaudited quarterly financial
statements.
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(b) Since
September 30, 2009, (i) there has been no event, development or circumstance
that has had or could reasonably be expected to have a Material Adverse Effect
and (ii) the business of the Borrower and its Subsidiaries has been conducted
only in the ordinary course consistent with past business
practices.
(c) Except as
set forth on Schedule
9.02 or in a certificate delivered pursuant to Section 8.01(d),
neither the Borrower nor any Subsidiary has on the date hereof any material Debt
(including Disqualified Capital Stock) or any contingent liabilities,
off-balance sheet liabilities or partnerships, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments.
Section
7.05 Litigation.
(a) Except as
set forth on Schedule
7.05, there are no actions, suits, investigations or proceedings by or
before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened in writing against or affecting the
Borrower or any Subsidiary (i) as to which there is a reasonable possibility of
an adverse determination that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect or (ii) that involve any Loan Document or the Transactions.
(b) Since the
date of this Agreement, there has been no change in the status of the matters
disclosed in Schedule
7.05 that, individually or in the aggregate, has resulted in, or
materially increased the likelihood of, a Material Adverse Effect.
Section
7.06 Environmental
Matters. Except
as could not reasonably be expected to have a Material Adverse Effect (or with
respect to (c), (d) and (e) below, where the failure to take such actions could
not be reasonably expected to have a Material Adverse Effect), to the knowledge
of Borrower:
(a) neither
any Property of the Borrower or any Subsidiary nor the operations conducted
thereon violate any order or requirement of any court or Governmental Authority
or any Environmental Laws.
(b) no
Property of the Borrower or any Subsidiary nor the operations currently
conducted thereon or by any prior owner or operator of such Property or
operation, are in violation of or subject to any existing, pending or threatened
action, suit, investigation, inquiry or proceeding by or before any court or
Governmental Authority or to any remedial obligations under Environmental
Laws.
(c) all
notices, permits, licenses, exemptions, approvals or similar authorizations, if
any, required to be obtained or filed in connection with the operation or use of
any and all Property of the Borrower and each Subsidiary, including, without
limitation, past or present treatment, storage, disposal or release of a
hazardous substance, oil and gas waste or solid waste into the environment, have
been duly obtained or filed, and the Borrower and each Subsidiary are in
compliance with the terms and conditions of all such notices, permits, licenses
and similar authorizations.
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(d) all
hazardous substances, solid waste and oil and gas waste, if any, generated at
any and all Property of the Borrower or any Subsidiary have in the past been
transported, treated and disposed of in accordance with Environmental Laws and
so as not to pose an imminent and substantial endangerment to public health or
welfare or the environment, and all such transport carriers and treatment and
disposal facilities have been and are operating in compliance with Environmental
Laws and so as not to pose an imminent and substantial endangerment to public
health or welfare or the environment, and are not the subject of any existing,
pending or threatened action, investigation or inquiry by any Governmental
Authority in connection with any Environmental Laws.
(e) the
Borrower has taken all steps reasonably necessary to determine and has
determined that no oil, hazardous substances, solid waste or oil and gas waste,
have been disposed of or otherwise released and there has been no threatened
release of any oil, hazardous substances, solid waste or oil and gas waste on or
to any Property of the Borrower or any Subsidiary except in compliance with
Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment.
(f) to the
extent applicable, all Property of the Borrower and each Subsidiary currently
satisfies all design, operation, and equipment requirements imposed by the OPA,
and the Borrower does not have any reason to believe that such Property, to the
extent subject to the OPA, will not be able to maintain compliance with the OPA
requirements during the term of this Agreement.
(g) neither
the Borrower nor any Subsidiary has any known contingent liability or Remedial
Work in connection with any release or threatened release of any oil, hazardous
substance, solid waste or oil and gas waste into the environment.
Section
7.07 Compliance with the Laws and
Agreements; No Defaults. Except
as could not be reasonably be expected to have a Material Adverse
Effect:
(a) Each of
the Borrower and each Subsidiary is in compliance with all Governmental
Requirements applicable to it or its Property and all agreements and other
instruments binding upon it or its Property, and possesses all licenses,
permits, franchises, exemptions, approvals and other governmental authorizations
necessary for the ownership of its Property and the conduct of its business,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(b) Neither
the Borrower nor any Subsidiary is in default nor has any event or circumstance
occurred which, but for the expiration of any applicable grace period or the
giving of notice, or both, would constitute a default or would require the
Borrower or a Subsidiary to Redeem or make any offer to Redeem under any
indenture, note, credit agreement or instrument pursuant to which any Material
Indebtedness is outstanding or by which the Borrower or any Subsidiary or any of
their Properties is bound.
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(c) No
Default has occurred and is continuing.
Section
7.08 Investment Company
Act. Neither
the Borrower nor any Subsidiary is an “investment company” or a company
“controlled” by an “investment company,” within the meaning of, or subject to
regulation under, the Investment Company Act of 1940, as amended.
Section
7.09 Taxes. Each
of the Borrower and its Subsidiaries has timely filed or caused to be filed all
Tax returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which the Borrower or
such Subsidiary, as applicable, has set aside on its books adequate reserves in
accordance with GAAP or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect. The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of Taxes and other governmental charges are, in the reasonable
opinion of the Borrower, adequate. No Tax Lien relating to Taxes
described in the first sentence of this Section 7.09 has been
filed and, to the knowledge of the Borrower, no claim is being asserted with
respect to any such Tax or other such governmental charge.
Section
7.10 ERISA. No
ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse
Effect. The present value of all accumulated benefit obligations
under each Plan (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$250,000 the fair market value of the assets of such Plan, and the present value
of all accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed by more than $250,000 the fair market value of the assets
of all such underfunded Plans.
Section
7.11 Disclosure; No Material
Misstatements. The
Borrower has disclosed to the Administrative Agent and the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. To the knowledge of Borrower, taken as a
whole, none of the other reports, financial statements, certificates or other
information furnished by or on behalf of the Borrower or any Subsidiary to the
Administrative Agent or any Lender or any of their Affiliates in connection with
the negotiation of this Agreement or any other Loan Document or delivered
hereunder or under any other Loan Document (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, prospect information,
geological and geophysical data and engineering projections, the Borrower
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time. To the knowledge
of Borrower there is no fact peculiar to the Borrower or any Subsidiary which
could reasonably be
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expected
to have a Material Adverse Effect or in the future is reasonably likely to have
a Material Adverse Effect and which has not been set forth in this Agreement or
the Loan Documents or the other documents, certificates and statements furnished
to the Administrative Agent or the Lenders by or on behalf of the Borrower or
any Subsidiary prior to, or on, the date hereof in connection with the
transactions contemplated hereby. There are no statements or
conclusions known to the Borrower in any Reserve Report which are based upon or
include misleading information or fail to take into account material information
regarding the matters reported therein, it being understood that projections
concerning volumes attributable to the Oil and Gas Properties and production and
cost estimates contained in each Reserve Report are necessarily based upon
professional opinions, estimates and projections and that the Borrower and the
Subsidiaries do not warrant that such opinions, estimates and projections will
ultimately prove to have been accurate.
Section
7.12 Insurance. The
Borrower has, and has caused all its Subsidiaries to have, (a) all insurance
policies sufficient for the compliance by each of them with all material
Governmental Requirements and all material agreements and (b) insurance coverage
in at least amounts and against such risk (including, without limitation, public
liability) that are usually insured against by companies similarly situated and
engaged in the same or a similar business for the assets and operations of the
Borrower and its Subsidiaries. The Administrative Agent and the
Lenders have been named as additional insureds in respect of such liability
insurance policies and the Administrative Agent has been named as loss payee
with respect to Property loss insurance.
Section
7.13 Restriction on
Liens. Neither
the Borrower nor any of the Restricted Subsidiaries is a party to any material
agreement or arrangement (other than Capital Leases creating Liens permitted by
Section
9.03(c), but then only on the Property subject of such Capital Lease), or
subject to any order, judgment, writ or decree, which either restricts or
purports to restrict its ability to grant Liens to the Administrative Agent and
the Lenders on or in respect of their Properties to secure the Obligations and
the Loan Documents.
Section
7.14 Subsidiaries. Schedule 7.14 sets
forth the name of, and the ownership interest of the Borrower in, each
Subsidiary of the Borrower. As of the Effective Date there are no
Unrestricted Subsidiaries other than Alpha Hunter Drilling, LLC, Hunter
Disposal, LLC and Hunter Real Estate, LLC.
Section
7.15 Location of Business and
Offices. The
Borrower’s jurisdiction of organization is Delaware; the name of the Borrower as
listed in the public records of Delaware is Magnum Hunter Resources Corporation;
and the organizational identification number of the Borrower in Delaware is
2758331 (or, in each case, as set forth in a notice delivered to the
Administrative Agent pursuant to Section 8.01(l) in
accordance with Section
12.01). Each Subsidiary’s jurisdiction of organization, name
as listed in the public records of its jurisdiction of organization and
organizational identification number in its jurisdiction of organization is
stated on Schedule
7.14 (or as set forth in a notice delivered pursuant to Section
8.01(l)).
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Section
7.16 Properties; Titles,
Etc.
(a) Except as
disclosed in Schedule
7.16, each of the Borrower and the Restricted Subsidiaries has good and
defensible title to the proved Oil and Gas Properties evaluated in the most
recently delivered Reserve Report (excluding, to the extent this representation
and warranty is deemed to be made after the Effective Date, any such Oil and Gas
Properties sold or transferred in compliance with Section 9.11) and
good title to all its personal Properties, in each case, free and clear of all
Liens except Liens permitted by Section
9.03. After giving full effect to the Excepted Liens, the
Borrower or the Restricted Subsidiary specified as the owner owns the net
interests in production attributable to the Hydrocarbon Interests as reflected
in the most recently delivered Reserve Report, and the ownership of such
Properties shall not in any material respect obligate the Borrower or such
Restricted Subsidiary to bear the costs and expenses relating to the
maintenance, development and operations of each such Property in an amount in
excess of the working interest of each Property set forth in the most recently
delivered Reserve Report that is not offset by a corresponding proportionate
increase in the Borrower’s or such Restricted Subsidiary’s net revenue interest
in such Property.
(b) All
material leases and agreements necessary for the conduct of the business of the
Borrower and the Subsidiaries are valid and subsisting, in full force and
effect, and there exists no default or event or circumstance which with the
giving of notice or the passage of time or both would give rise to a default
under any such lease or leases, which could reasonably be expected to result in
a Material Adverse Effect.
(c) The
rights and Properties presently owned, leased or licensed by the Borrower and
the Subsidiaries including, without limitation, all easements and rights of way,
include all rights and Properties necessary to permit the Borrower and the
Subsidiaries to conduct their business in all material respects in the same
manner as its business has been conducted prior to the date hereof.
(d) All of
the material Properties of the Borrower and the Subsidiaries which are
reasonably necessary for the operation of their businesses are in good working
condition and are maintained in accordance with prudent business
standards.
(e) The
Borrower and each Subsidiary owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual Property material to its
business, and the use thereof by the Borrower and such Subsidiary does not
infringe upon the rights of any other Person, except for any such infringements
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect. The Borrower and its
Subsidiaries either own or have valid licenses or other rights to use all
databases, geological data, geophysical data, engineering data, seismic data,
maps, interpretations and other technical information used in their businesses
as presently conducted, subject to the limitations contained in the agreements
governing the use of the same, which limitations are customary for companies
engaged in the business of the exploration and production of Hydrocarbons, with
such exceptions as could not reasonably be expected to have a Material Adverse
Effect.
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Section
7.17 Maintenance of
Properties. Except
for such acts or failures to act as could not be reasonably expected to have a
Material Adverse Effect, the Oil and Gas Properties (and Properties unitized
therewith) have been maintained, operated and developed in a good and
workmanlike manner and in conformity with all Government Requirements and in
conformity with the provisions of all leases, subleases or other contracts
comprising a part of the Hydrocarbon Interests and other contracts and
agreements forming a part of the Oil and Gas Properties. Specifically
in connection with the foregoing, except for those as could not be reasonably
expected to have a Material Adverse Effect, (i) no Oil and Gas Property is
subject to having allowable production reduced below the full and regular
allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) and (ii) to
the knowledge of Borrower, none of the xxxxx comprising a part of the
Oil and Gas Properties (or Properties unitized therewith) is deviated from the
vertical more than the maximum permitted by Government Requirements, and such
xxxxx are, in fact, bottomed under and are producing from, and the well bores
are wholly within, the Oil and Gas Properties (or in the case of xxxxx located
on Properties unitized therewith, such unitized Properties). All
pipelines, xxxxx, gas processing plants, platforms and other material
improvements, fixtures and equipment owned in whole or in part by the Borrower
or any of its Subsidiaries that are necessary to conduct normal operations are
being maintained in a state adequate to conduct normal operations, and with
respect to such of the foregoing that are operated by the Borrower or any of its
Subsidiaries, in a manner consistent with the Borrower’s or its Subsidiaries’
past practices (other than those the failure of which to maintain in accordance
with this Section 7.17 could
not reasonably be expect to have a Material Adverse Effect).
Section
7.18 Gas Imbalances,
Prepayments. As
of the date hereof, except as set forth on Schedule 7.18 or
on the most recent certificate delivered pursuant to Section 8.12(c), on a
net basis there are no gas imbalances, take or pay or other prepayments which
would require the Borrower or any of the Restricted Subsidiaries to deliver
Hydrocarbons produced from the Oil and Gas Properties at some future time
without then or thereafter receiving full payment therefor exceeding 500 mmcf
equivalent in the aggregate.
Section
7.19 Marketing of
Production. Except
for contracts listed and in effect on the date hereof on Schedule 7.19, and
thereafter either disclosed in writing to the Administrative Agent or included
in the most recently delivered Reserve Report (with respect to all of which
contracts the Borrower represents that it or its Subsidiaries are receiving a
price for all production sold thereunder which is computed substantially in
accordance with the terms of the relevant contract and are not having deliveries
curtailed substantially below the subject Property’s delivery capacity), no
material agreements exist which are not cancelable on 60 days notice or less
without penalty or detriment for the sale of production from the Borrower’s or
the Restricted Subsidiaries’ Hydrocarbons (including, without limitation, calls
on or other rights to purchase, production, whether or not the same are
currently being exercised) that (a) pertain to the sale of production at a fixed
price and (b) have a maturity or expiry date of longer than six (6) months from
the date hereof.
Section
7.20 Swap
Agreements. Schedule 7.20, as of
the date hereof, and after the date hereof, each report required to be delivered
by the Borrower pursuant to Section 8.01(d), sets
forth, a true and complete list of all Swap Agreements of the Borrower and each
Subsidiary, the material terms thereof (including the type, term, effective
date, termination date and notional amounts or volumes), the net xxxx to market
value thereof, all credit support agreements relating thereto (including any
margin required or supplied) and the counterparty to each such
agreement.
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Section
7.21 Use of Loans and Letters of
Credit. The
proceeds of the Loans and the Letters of Credit shall be used to provide working
capital for exploration and production, midstream trading and marketing
operations, and for general corporate purposes of the Borrower and its
Subsidiaries, including the acquisition of exploration and production and
midstream properties. The Borrower and its Subsidiaries are not
engaged principally, or as one of its or their important activities, in the
business of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock (within the meaning of Regulation
T, U or X of the Board). No part of the proceeds of any Loan or
Letter of Credit will be used for any purpose which violates the provisions of
Regulations T, U or X of the Board.
Section
7.22 Solvency. Before
and after giving effect to the Transactions, (a) the aggregate assets, at a fair
valuation, of the Borrower and its Subsidiaries, taken as a whole, will exceed
the aggregate Debt of the Borrower on a consolidated basis, as the Debt becomes
absolute and matures, (b) none of the Borrower nor any Subsidiary will have
incurred or intended to incur, and will not believe that it will incur, Debt
beyond its ability to pay such Debt as such Debt becomes absolute and matures
and (c) none of the Borrower nor any Subsidiary will have (nor will have any
reason to believe that it will have thereafter) unreasonably small capital for
the conduct of its business.
ARTICLE
VIII
Affirmative
Covenants
Until the
Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder and all other amounts payable under the
Loan Documents shall have been paid in full and all Letters of Credit shall have
expired or terminated and all LC Disbursements shall have been reimbursed, the
Borrower covenants and agrees with the Lenders that:
Section
8.01 Financial Statements;
Ratings Change; Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) Annual Financial
Statements. As soon as available, but in any event in
accordance with then applicable law and not later than 90 days after the end of
each fiscal year of the Borrower, its audited consolidated (and, if there are
any Unrestricted Subsidiaries, consolidating) balance sheet and related
statements of operations, stockholders’ equity and cash flows as of the end of
and for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by a firm of independent public
accountants proposed by Borrower and approved by the Administrative Agent
(without a “going
concern” or like qualification or exception and without any qualification
or exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its Consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied.
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(b) Quarterly Financial
Statements. As soon as available, but in any event in
accordance with then applicable law and not later than 45 days after the end of
each of the first three fiscal quarters of each fiscal year of the Borrower, its
consolidated (and, if there are any Unrestricted Subsidiaries, consolidating)
balance sheet and related statements of operations, stockholders’ equity and
cash flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified by one
of its Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of the Borrower and its
Consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes.
(c) Certificate of Financial
Officer – Compliance. Concurrently with any delivery of
financial statements under Section 8.01(a) or
Section
8.01(b), a certificate of a Financial Officer in substantially the form
of Exhibit D
hereto (i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Section 8.13(b) and
Section 9.01
and (iii) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in Section 7.04 and, if
any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate.
(d) Certificate of Financial
Officer – Swap Agreements. Concurrently with the delivery of
each Reserve Report hereunder, a certificate of a Financial Officer, in form and
substance reasonably satisfactory to the Administrative Agent, setting forth as
of a recent date, a true and complete list of all Swap Agreements of the
Borrower and each Subsidiary, the material terms thereof (including the type,
term, effective date, termination date and notional amounts or volumes), the net
xxxx-to-market value therefor, any new credit support agreements relating
thereto not listed on Schedule 7.21, any
margin required or supplied under any credit support document, and the
counterparty to each such agreement.
(e) Certificate of Insurer –
Insurance Coverage. Concurrently with any delivery of
financial statements under Section 8.01(a), a
certificate of insurance coverage from each insurer with respect to the
insurance required by Section 8.07, in form
and substance satisfactory to the Administrative Agent, and, if requested by the
Administrative Agent or any Lender, all copies of the applicable
policies.
(f) Other Accounting
Reports. Promptly upon receipt thereof, a copy of each other
report or letter (except standard and customary correspondence) submitted to the
Borrower or any of its Subsidiaries by independent accountants in connection
with any annual, interim or special audit made by them of the books of the
Borrower or any such Subsidiary, and a copy of any response by the Borrower or
any such Subsidiary, or the board of directors of the Borrower or any such
Subsidiary, to such letter or report.
(g) SEC and Other Filings;
Reports to Shareholders. Promptly after the same become
publicly available, copies of all periodic and other reports, proxy statements
and other materials filed by the Borrower or any Subsidiary with the SEC, or
with any national securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be.
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(h) Notices Under Material
Instruments. Promptly after the furnishing thereof, copies of
any financial statement, report or notice furnished to or by any Person pursuant
to the terms of any preferred stock designation, indenture, loan or credit or
other similar agreement, other than this Agreement and not otherwise required to
be furnished to the Lenders pursuant to any other provision of this Section
8.01.
(i) Lists of
Purchasers. Concurrently with the delivery of any Reserve
Report to the Administrative Agent pursuant to Section 8.12, a list
of Persons purchasing Hydrocarbons from the Borrower or any Subsidiary
accounting for at least 80% of the revenues resulting from the sale of all
Hydrocarbons in the one year period prior to the “as of” date of such Reserve
Report.
(j) Notice of Sales of Oil and
Gas Properties. In the event the Borrower or any Restricted
Subsidiary intends to sell, transfer, assign or otherwise dispose of any Oil or
Gas Properties or any Equity Interests in any Restricted Subsidiary owning Oil
and Gas Properties, in either case, having a fair market value in excess of 5%
of the Borrowing Base then in effect in accordance with Section 9.11, prior written
notice of such disposition, the anticipated price thereof and the anticipated
date of closing.
(k) Notice of Casualty
Events. Prompt written notice, and in any event within five
(5) Business Days, of the occurrence of any Casualty Event or the commencement
of any action or proceeding that could reasonably be expected to result in a
Casualty Event.
(l) Information Regarding the
Loan Parties. Prompt written notice (and in any event within
ten (10) Business Days prior thereto) of any change (i) in any Loan Party’s
corporate name or in any trade name used to identify the Borrower in the conduct
of its business or in the ownership of its Properties, (ii) in any Loan Party’s
identity or corporate structure or in the jurisdiction in which such Loan Party
is incorporated or formed, (iii) in any Loan Party’s jurisdiction of
organization or any Loan Party’s organizational identification number in such
jurisdiction of organization, and (iv) in any Loan Party’s federal taxpayer
identification number.
(m) Production Report and Lease
Operating Statements. Within 90 days after the end of each
fiscal quarter, a report setting forth, for each calendar month during the then
current fiscal year to date, the volume of production and sales attributable to
production (and the prices at which such sales were made and the revenues
derived from such sales) for each such calendar month from the Oil and Gas
Properties, and setting forth the related ad valorem, severance and production
taxes and lease operating expenses attributable thereto and incurred for each
such calendar month.
(n) Hedging
Agreements. Within ten (10) Business Days of the Effective
Date, the Borrower shall enter into Swap Agreements in respect of commodities
with one or more Approved Counterparties so that the notional volumes of all
commodity hedging agreements of the Borrower and its Restricted Subsidiaries, in
the aggregate, equal or exceed, for the calendar year ended December 31, 2010,
December 31, 2011 and December 31, 2012, 60% of anticipated production from
proved developed producing properties with such Swap Agreements being in form
and substance reasonably acceptable to the Administrative Agent. To
the extent that the Administrative Agent is not reasonably satisfied with the
form and substance of such Swap Agreements (including the prices, volumes and
duration thereof), the Administrate Agent may upon notice to the Borrower
require an Interim Redetermination in accordance with Section 2.07(b)(ii),
but such redetermination shall not reduce the number of elective
redeterminations available to the Administrative Agent under said
Section.
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(o) Notices of Certain
Changes. Promptly, but in any event within five (5) Business
Days after the execution thereof, copies of any amendment, modification or
supplement to the certificate or articles of incorporation, by-laws, any
preferred stock designation or any other organic document of the Borrower or any
Subsidiary.
(p) Other Requested
Information. Promptly following any request therefor, such
other information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary (including, without limitation, any
Plan or Multiemployer Plan and any reports or other information required to be
filed under ERISA), or compliance with the terms of this Agreement or any other
Loan Document, as the Administrative Agent or any Lender may reasonably
request.
Section
8.02 Notices of Material
Events. The
Borrower will furnish to the Administrative Agent prompt written notice of the
following:
(a) the
occurrence of any Default;
(b) the
filing or commencement of, or the threat in writing of, any action, suit,
proceeding, investigation or arbitration by or before any arbitrator or
Governmental Authority against the Borrower or any Affiliate thereof not
previously disclosed in writing to the Lenders or any material adverse
development in any action, suit, proceeding, investigation or arbitration
previously disclosed to the Lenders that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in a Material
Adverse Effect; and
(d) any other
development that results in, or could reasonably be expected to result in, a
Material Adverse Effect.
Each
notice delivered under this Section 8.02 shall be
accompanied by a statement of a Responsible Officer setting forth the details of
the event or development requiring such notice and any action taken or proposed
to be taken with respect thereto.
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Section
8.03 Existence; Conduct of
Business. The
Borrower will, and will cause each Subsidiary to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business and maintain, if necessary, its qualification to
do business in each other jurisdiction in which its Oil and Gas Properties are
located or the ownership of its Properties requires such qualification, except
where the failure to so qualify could not reasonably be expected to have a
Material Adverse Effect; provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section
9.10.
Section
8.04 Payment of
Obligations. The
Borrower will, and will cause each Subsidiary to, pay its obligations, including
Tax liabilities of the Borrower and all of its Subsidiaries before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings and the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP or (b) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect or result in the seizure or levy of any material Property of the
Borrower or any Subsidiary.
Section
8.05 Performance of Obligations
under Loan Documents. The
Borrower will pay the Loans and the Notes according to the reading, tenor and
effect thereof, and the Borrower will, and will cause each Subsidiary to, do and
perform every act and discharge all of the obligations to be performed and
discharged by them under the Loan Documents, including, without limitation, this
Agreement, at the time or times and in the manner specified.
Section
8.06 Operation and Maintenance of
Properties. Except,
in each case, where the failure to comply could not reasonably be expected to
have a Material Adverse Effect, the Borrower, at its own expense, will, and will
cause each Subsidiary to:
(a) operate
its Oil and Gas Properties and other material Properties or cause such Oil and
Gas Properties and other material Properties to be operated in accordance with
the practices of the industry and in compliance with all applicable contracts
and agreements and in compliance with all Governmental Requirements, including,
without limitation, applicable pro ration requirements and Environmental Laws,
and all applicable laws, rules and regulations of every other Governmental
Authority from time to time constituted to regulate the development and
operation of its Oil and Gas Properties and the production and sale of
Hydrocarbons and other minerals therefrom.
(b) keep and
maintain all Property material to the conduct of its business in good working
order and condition (ordinary wear and tear excepted), preserve, maintain and
keep in good repair, working order and efficiency (ordinary wear and tear
excepted) all of its material producing Oil and Gas Properties and other
material Properties, including, without limitation, all equipment, machinery and
facilities.
(c) promptly
pay and discharge, or make reasonable and customary efforts to cause to be paid
and discharged, all delay rentals, royalties, expenses and obligations accruing
under the leases or other agreements affecting or pertaining to its proved
producing Oil and Gas Properties and will do all other things necessary to keep
unimpaired their rights with respect thereto and prevent any forfeiture thereof
or default thereunder.
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(d) promptly
perform or make reasonable and customary efforts to cause to be performed, in
accordance with industry standards, the obligations required by each and all of
the assignments, deeds, leases, sub-leases, contracts and agreements affecting
its interests in its proved producing Oil and Gas Properties and other material
Properties.
(e) operate
its Oil and Gas Properties and other material Properties or cause or make
reasonable and customary efforts to cause such Oil and Gas Properties and other
material Properties to be operated in accordance with the practices of the
industry and in material compliance with all applicable contracts and agreements
and in compliance in all material respects with all Governmental
Requirements.
(f) to the
extent the Borrower is not the operator of any Property, the Borrower shall use
reasonable efforts to cause the operator to comply with this Section
8.06.
Section
8.07 Insurance. The
Borrower will, and will cause each Subsidiary to, maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations. The
loss payable clauses or provisions in said insurance policy or policies insuring
any of the collateral for the Loans shall be endorsed in favor of and made
payable to the Administrative Agent as its interests may appear and such
policies shall name the Administrative Agent and the Lenders as “additional insureds”
and provide that the insurer will endeavor to give at least 30 days prior notice
of any cancellation to the Administrative Agent.
Section
8.08 Books and Records;
Inspection Rights. The
Borrower will, and will cause each Subsidiary to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower
will, and will cause each Subsidiary to, permit any representatives designated
by the Administrative Agent or any Lender, upon reasonable prior notice, to
visit and inspect its Properties, to examine and make extracts from its books
and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times during normal
business hours and as often as reasonably requested on an individual and
aggregate basis.
Section
8.09 Compliance with
Laws. The
Borrower will, and will cause each Subsidiary to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
Property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse
Effect.
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Section
8.10 Environmental
Matters.
(a) The
Borrower shall at its sole expense: (i) comply, and shall cause its Properties
and operations and each Subsidiary and each Subsidiary’s Properties and
operations to comply, with all applicable Environmental Laws, the breach of
which could be reasonably expected to have a Material Adverse Effect; (ii) not
dispose of or otherwise release, and shall cause each Subsidiary not to dispose
of or otherwise release, any oil, oil and gas waste, hazardous substance, or
solid waste on, under, about or from any of the Borrower’s or its Subsidiaries’
Properties or any other Property to the extent caused by the Borrower’s or any
of its Subsidiaries’ operations except in compliance with applicable
Environmental Laws, the disposal or release of which could reasonably be
expected to have a Material Adverse Effect; (iii) timely obtain or file, and
shall cause each Subsidiary to timely obtain or file, all notices, permits,
licenses, exemptions, approvals, registrations or other authorizations, if any,
required under applicable Environmental Laws to be obtained or filed in
connection with the operation or use of the Borrower’s or its Subsidiaries’
Properties, which failure to obtain or file could reasonably be expected to have
a Material Adverse Effect; promptly commence and diligently prosecute to
completion, and shall cause each Subsidiary to promptly commence and diligently
prosecute to completion, any assessment, evaluation, investigation, monitoring,
containment, cleanup, removal, repair, restoration, remediation or other
remedial obligations (collectively, the “Remedial Work”) in
the event any Remedial Work is required or reasonably necessary under applicable
Environmental Laws because of or in connection with the actual or suspected
past, present or future disposal or other release of any oil, oil and gas waste,
hazardous substance or solid waste on, under, about or from any of the
Borrower’s or its Subsidiaries’ Properties, which failure to commence and
diligently prosecute to completion could reasonably be expected to have a
Material Adverse Effect; and (iv) establish and implement, and shall cause each
Subsidiary to establish and implement, such reasonable procedures as may be
necessary to assure that the Borrower’s and its Subsidiaries’ obligations under
this Section 8.10(a) are
timely and fully satisfied, which failure to establish and implement could
reasonably be expected to have a Material Adverse Effect.
(b) The
Borrower will promptly, but in no event later than five Business Days of the
occurrence of a triggering event, notify the Administrative Agent in writing of
any threatened action, investigation or inquiry by any Governmental Authority or
any threatened demand or lawsuit by any landowner or other third party against
the Borrower or its Subsidiaries or their Properties of which the Borrower has
knowledge in connection with any applicable Environmental Laws (excluding
routine testing and corrective action) if the Borrower reasonably anticipates
that such action could reasonably result in a Material Adverse
Effect.
(c) The
Borrower will, and will cause each Subsidiary to, undertake reasonable
environmental audits in connection with any future acquisitions of producing Oil
and Gas Properties.
Section
8.11 Further
Assurances.
(a) The
Borrower at its expense will, and will cause each Subsidiary to, promptly
execute and deliver to the Administrative Agent all such other documents,
agreements and instruments reasonably requested by the Administrative Agent to
comply with, cure any defects or accomplish the conditions precedent, covenants
and agreements of the Borrower or any Subsidiary, as the case may be, in the
Loan Documents, including the Notes, or to further evidence and more fully
describe the collateral intended as security for the Obligations, or to correct
any omissions in this Agreement or the Security Instruments, or to state more
fully the obligations secured therein, or to perfect, protect or preserve any
Liens created pursuant to this Agreement or any of the Security Instruments or
the priority thereof, or to make any recordings, file any notices or obtain any
consents, all as may be reasonably necessary or appropriate, in the sole
discretion of the Administrative Agent, in connection therewith.
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(b) The
Borrower hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Mortgaged Property. A carbon, photographic or other
reproduction of the Security Instruments or any financing statement covering the
Mortgaged Property or any part thereof shall be sufficient as a financing
statement where permitted by law.
Section
8.12 Reserve
Reports.
(a) Promptly
after January 1st of each calendar year, commencing on the Effective Date and in
any event before March 1st and promptly after July 1st of each calendar year,
commencing July 1, 2010 and in any event before September 1st of each year, the
Borrower shall furnish to the Administrative Agent and the Lenders a Reserve
Report. The Reserve Report as of January 1st of each year and the
Reserve Report delivered in connection with the first redetermination shall be
prepared by Borrower or an Approved Petroleum Engineer and audited by one or
more Approved Petroleum Engineers, and the July 1st Reserve Report of each year
shall be prepared by or under the supervision of the chief engineer of the
Borrower. In each case, the chief engineer of Borrower shall certify
such Reserve Report is based on information that was prepared in good faith
based upon assumptions believed to be reasonable at the time and to have been
prepared in accordance with the procedures used in the immediately
preceding Reserve Report.
(b) In the
event of an Interim Redetermination, except in connection with the first
redetermination, the Borrower shall furnish to the Administrative Agent and the
Lenders a Reserve Report prepared by or under the supervision of the chief
engineer of the Borrower who shall certify such Reserve Report to be based on
information that was prepared in good faith based upon assumptions believed to
be reasonable at the time and to have been prepared in accordance with the
procedures used in the immediately preceding Reserve Report. For any
Interim Redetermination requested by the Administrative Agent or the Borrower
pursuant to Section 2.07(b)(ii)
or Section
2.07(b)(iii), the Borrower shall provide such Reserve Report with an
“as of” date as
required by the Administrative Agent as soon as possible, but in any event no
later than forty-five (45) days following the receipt of such
request.
(c) With the
delivery of each Reserve Report, the Borrower shall provide to the
Administrative Agent and the Lenders a certificate from a Responsible Officer
certifying that to his knowledge, after reasonable investigation, in all
material respects: (i) the information contained in the Reserve Report and any
other information delivered in connection therewith is based on information that
was prepared in good faith based upon assumptions believed to be reasonable at
the time, (ii) the Borrower or its Subsidiaries owns good and defensible title
to the proved Oil and Gas Properties evaluated in such Reserve Report and such
Properties are free of all Liens except for Liens permitted by Section 9.03, (iii)
except as set forth on an exhibit to the certificate, on a net basis there are
no gas imbalances, take or pay or other prepayments in excess of the volume
specified in Section 7.18 with
respect to its Oil and Gas Properties evaluated in such Reserve Report which
would require the Borrower or any Subsidiary to deliver Hydrocarbons either
generally or produced from such Oil and Gas Properties at some future time
without then or thereafter receiving full payment therefor, (iv) none of the
Borrower’s and its Subsidiaries’ proved Oil and Gas Properties have been sold
since the date of the last Borrowing Base determination except as set forth on
an exhibit to the certificate, which certificate shall list all of its proved
Oil and Gas Properties sold and in such detail as reasonably required by the
Administrative Agent, (v) attached to the certificate is a list of all marketing
agreements entered into subsequent to the later of the date hereof or the most
recently delivered Reserve Report which the Borrower could reasonably be
expected to have been obligated to list on Schedule 7.19
had such agreement been in effect on the date hereof and (vi) attached thereto
is a schedule of the proved Oil and Gas Properties evaluated by such Reserve
Report that are Mortgaged Properties and demonstrating the percentage of the
Borrowing Base that the value of such Mortgaged Properties
represent.
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Section
8.13 Title
Information.
(a) On or
before the delivery to the Administrative Agent and the Lenders of each Reserve
Report required by Section 8.12(a), the Borrower
will deliver title information in form and substance acceptable to the
Administrative Agent covering enough of the proved Oil and Gas Properties
evaluated by such Reserve Report that were not included in the immediately
preceding Reserve Report, so that the Administrative Agent shall have received
together with title information previously delivered, satisfactory title
information on at least 80% of the total value of the proved Oil and Gas
Properties evaluated by such Reserve Report, including 90% of the total value of
the PDP Oil and Gas Properties evaluated by such Reserve Report.
(b) If the
Borrower has provided title information for additional Properties under Section 8.13(a),
the Borrower shall, within 60 days of notice from the Administrative Agent that
title defects or exceptions exist with respect to such additional Properties,
either (i) cure any such title defects or exceptions (including defects or
exceptions as to priority) which are not permitted by Section 9.03 raised
by such information, (ii) substitute acceptable Mortgaged Properties with no
title defects or exceptions except for Excepted Liens (other than Excepted Liens
described in clauses (e), (g) and (h) of such definition) having an equivalent
value or (iii) deliver title information in form and substance acceptable to the
Administrative Agent so that they shall have received, together with title
information previously delivered, satisfactory title information on at least 80%
of the value of the Oil and Gas Properties evaluated by such Reserve Report,
including 90% of the total value of the PDP Oil and Gas Properties evaluated by
such Reserve Report.
(c) If the
Borrower is unable to cure any title defect requested to be cured within the
60-day period or the Borrower does not comply with the requirement to provide
acceptable title information covering 80% of the value of the Oil and Gas
Properties evaluated in the most recent Reserve Report, including 90% of the
total value of the PDP Oil and Gas Properties evaluated in such Reserve Report,
such default shall not be a Default, but instead the Administrative Agent and/or
the Required Lenders shall have the right to exercise the following remedy in
their sole discretion from time to time, and any failure to so exercise this
remedy at any time shall not be a waiver as to future exercise of the remedy by
the Administrative Agent or the Lenders. To the extent that the
Administrative Agent or the Required Lenders are not satisfied with title to any
Mortgaged Property after the 60-day period has elapsed, such unacceptable
Mortgaged Property shall not count towards the 80% or 90% requirement, as
applicable, and the Administrative Agent may send a notice to the Borrower and
the Lenders that the then outstanding Borrowing Base shall be reduced by an
amount as determined by the Required Lenders to cause the Borrower to be in
compliance with the requirement to provide acceptable title information on 80%
of the total value of the Oil and Gas Properties, including 90% of the total
value of the PDP Oil and Gas Properties. This new Borrowing Base
shall become effective immediately after receipt of such notice.
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Section
8.14 Additional
Collateral. In
connection with each redetermination of the Borrowing Base, the Borrower shall
review the Reserve Report and the list of current Mortgaged Properties (as
described in Section 8.12(c)) to
ascertain whether the Mortgaged Properties represent at least 80% of the total
value of the proved Oil and Gas Properties, including 90% of the total value of
the PDP Oil and Gas Properties, owned by Borrower and the Restricted
Subsidiaries and evaluated in the most recently completed Reserve Report after
giving effect to exploration and production activities, acquisitions,
dispositions and production. In the event that the Mortgaged
Properties do not represent at least 80% of such total value, including 90% of
the total value of the PDP Oil and Gas Properties evaluated in the most recently
completed Reserve Report, then the Borrower shall, and shall cause its
Restricted Subsidiaries to, grant to the Administrative Agent as security for
the Obligations a first-priority Lien interest (subject only to Excepted Liens
of the type described in clauses (a) to (d) and (f) of the definition thereof,
but subject to the provisos at the end of such definition) on additional Oil and
Gas Properties not already subject to a Lien of the Security Instruments such
that after giving effect thereto, the Mortgaged Properties will represent at
least 80% of the total value of the Oil and Gas Properties, including 90% of the
total value of the PDP Oil and Gas Properties. All such Liens will be
created and perfected by and in accordance with the provisions of mortgages,
deeds of trust, security agreements and financing statements or other Security
Instruments, all in form and substance satisfactory to the Administrative Agent
and in sufficient executed (and acknowledged where necessary or appropriate)
counterparts for recording purposes.
Section
8.15 ERISA
Compliance. In
addition to and without limiting the generality of Section 8.09, the
Borrower shall and shall cause each of its Subsidiaries to (a) comply in all
material respects with all applicable provisions of ERISA and the regulations
and published interpretations thereunder with respect to all employee benefit
plans (as defined in ERISA), (b) not take any action or fail to take action
the result of which could be (i) a liability to the PBGC (other than liability
for PBGC premiums) or (ii) a past due liability to any Multiemployer Plan, (c)
not participate in any prohibited transaction that could result in any material
civil penalty under ERISA or any tax under the Code, (d) operate each employee
benefit plan in such a manner that will not incur any material tax liability
under Section 4980B of the Code or any liability to any qualified beneficiary as
defined in Section 4980B of the Code except to the extent such failure to comply
could not reasonably be expected to have Material Adverse Effect and
(e) furnish to the Administrative Agent upon the Administrative Agent’s
request such additional information about any employee benefit plan as may be
reasonably requested by the Administrative Agent.
Section
8.16 New
Subsidiaries. Neither
the Borrower nor any Subsidiary shall form or acquire any Subsidiaries without
the prior written consent of the Administrative Agent and the Required Lenders,
other than the formation or acquisition by the Borrower of Subsidiaries in
compliance with Section
8.17.
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Section
8.17 New Subsidiary
Requirements. Concurrently
with the acquisition or formation of any subsidiary which is to be a Restricted
Subsidiary and prior to the Borrower’s advancing or contributing any amounts to
or into such Restricted Subsidiary (other than de minimum organizational costs
such as filing fees), the Borrower shall cause to be delivered to the
Administrative Agent for the benefit of the Lenders, (i) the Guaranty and a
Security Agreement executed by such Restricted Subsidiary, (ii) a Security
Agreement covering the Equity Interests of such Restricted Subsidiary, (iii)
stock certificates or other instruments representing all the Equity Interests of
such Restricted Subsidiary and stock powers and instruments of transfer,
endorsed in blank, with respect to such stock certificates or other instruments,
or, if any Equity Interests pledged pursuant to such Security Agreement are
uncertificated securities, confirmation and evidence satisfactory to the
Administrative Agent that the security interest in such uncertificated
securities has been transferred
to and perfected by the Administrative Agent in accordance with the UCC, (iv)
all documents and instruments, including UCC Financing Statements (Form UCC-1),
required by law or reasonably requested by the Administrative Agent to be filed,
registered or recorded to create or perfect the Liens intended to be created
under each Security Agreement, (v) UCC searches, all dated reasonably close to
the date of the Security Agreements and in form and substance satisfactory to
the Administrative Agent, and evidence reasonably satisfactory to the
Administrative Agent that any Liens indicated in such UCC searches are Excepted
Liens or have been released, (vi) the corporate resolutions or similar approval
documents of such Restricted Subsidiary approving the execution and delivery of
the Guaranty and the Security Agreement by such Restricted Subsidiary, (vii) the
corporate resolutions or similar approval documents of the Borrower or other
Loan Party approving the execution and delivery of the Security Agreement by the
Borrower or other Loan Party, and (viii) the legal opinion acceptable to the
Administrative Agent, opining favorably on the execution, delivery and
enforceability of the Guaranty and the Security Agreements and otherwise being
in form and substance reasonably satisfactory to the Administrative Agent and
its counsel.
Section
8.18 Triad Acquisition
Funds. On
the Effective Date, the Borrower shall cause to be deposited with either the
Agent or Amegy Bank National Association all funds received in connection with
the Triad Acquisition.
Section
8.19 Compliance with
Orders. No
later than one hundred twenty (120) days after the Effective Date, the Borrower
shall provide evidence satisfactory to the Administrative Agent that it has
complied, or has caused its Subsidiaries to comply, with (i) that certain Agreed
Order No. 2003-1 entered into on March 3, 2003, by and between the Office of Oil
and Gas, a chartered office of the West Virginia Division of Environmental
Protection, and Triad Resources, Inc. and (ii) that certain letter dated May 29,
2009, by the Office of Oil and Gas, a chartered office of the West Virginia
Division of Environmental Protection, to Triad Resources,
Inc., approving the Underground Injection Control mechanical integrity test
compliance schedule submitted by Triad Resources, Inc. (“UIC Compliance
Schedule”) and the UIC Compliance Schedule approved by such
letter.
Section
8.20 Phase I
Requirement. No
later than one hundred fifty (150) days after the Effective Date, the Borrower
shall provide a Phase I environmental assessment report to the Administrative
Agent, in form and substance satisfactory to the Administrative Agent, with
respect to the pipeline assets owned by Eureka Hunter Pipeline,
LLC.
ARTICLE
IX
Negative
Covenants
Until the
Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder and all other amounts payable under the Loan
Documents have been paid in full and all Letters of Credit have expired or
terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:
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Section
9.01 Financial
Covenants.
(a) Current
Ratio. Commencing with the fiscal quarter ending March 31,
2010, the Borrower will not permit, as of the last day of any fiscal quarter,
its ratio of (i) consolidated current assets of the Borrower and the Restricted
Subsidiaries (including the unused amount of the total Commitments, but
excluding non-cash assets under FAS 133) to (ii) consolidated current
liabilities of the Borrower and the Restricted Subsidiaries (excluding non-cash
obligations under FAS 133) to be less than 1.0 to 1.0.
(b) Interest Coverage
Ratio. The Borrower will not permit, as of the last day of any
fiscal quarter commencing with the fiscal quarter ending March 31, 2010, its
ratio of (i) EBITDAX of the Borrower and the Restricted Subsidiaries for the
trailing four quarter period then ended to (ii) actual cash interest paid by the
Borrower and the Restricted Subsidiaries during such period to be less than 2.5
to 1.0.
(c) Total Debt to
EBITDAX. Commencing with the fiscal quarter ending March 31,
2010, the Borrower will not permit, as of the last day of any fiscal quarter,
its ratio of (i) total Debt of the Borrower and the Restricted Subsidiaries as
of such date to (ii) EBITDAX of the Borrower and the Restricted Subsidiaries for
the trailing four quarter period then ended to exceed 4.5 to 1.0 commencing with
the fiscal quarter ending March 31, 2010 through the quarter ended September 30,
2010, and 4.0 x 1.0 commencing with the quarter ended December 31, 2010 and
thereafter.
Section
9.02 Debt. The
Borrower will not, and will not permit any Subsidiary to, incur, create, assume
or suffer to exist any Debt, except:
(a) the Notes
or other Obligations arising under the Loan Documents or any guaranty of or
suretyship arrangement for the Notes or other Obligations arising under the Loan
Documents.
(b) Debt of
the Borrower and its Subsidiaries existing on the date hereof that is reflected
in the Financial Statements and described on Schedule
9.02.
(c) accounts
payable and accrued expenses, liabilities or other obligations to pay the
deferred purchase price of Property or services, from time to time incurred in
the ordinary course of business which are not greater than ninety (90) days past
the date of invoice or which are being contested in good faith by appropriate
action and for which adequate reserves have been maintained in accordance with
GAAP.
(d) Debt
under Capital Leases or nonrecourse purchase money Debt not to exceed $1,000,000
at any time.
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(e) Debt
associated with worker’s compensation claims, performance, bid, surety or
similar bonds or surety obligations required by Governmental Requirements or
third parties in connection with the operation of the Oil and Gas
Properties.
(f) intercompany
Debt between the Borrower and any Restricted Subsidiary or between Restricted
Subsidiaries to the extent permitted by Section 9.05(g) or
between Unrestricted Subsidiaries or Debt owing to the Borrower and/or any
Restricted Subsidiaries by Unrestricted Subsidiaries, when combined with
Investments permitted by Section 9.05(p) in
Unrestricted Subsidiaries, not to exceed $1,000,000 in the aggregate at any time
outstanding; provided that such
Debt is not held, assigned, transferred, negotiated or pledged to any Person
other than the Borrower or one of its Wholly-Owned Subsidiaries.
(g) endorsements
of negotiable instruments for collection in the ordinary course of
business.
(h) Debt
arising under take-or-pay agreements or gas balancing agreements which do not
give rise to liability in the aggregate on a consolidated basis for the Borrower
in excess of $1,000,000 at any one time outstanding.
(i) Debt
incurred in the ordinary course of Borrower’s business in connection with Swap
Agreements provided they are permitted under Section 9.18 of this
Agreement.
(j) Debt of
Unrestricted Subsidiaries for which neither the Borrower nor any Restricted
Subsidiary shall be liable as an obligor, under any guarantee or
otherwise.
(k) obligations
with respect to Series B and Series C preferred stock issued by the Borrower in
form and substance substantially similar to the terms set forth in Schedule
2.1(b) to the Asset Purchase Agreement dated October 28, 2009 related to the
Triad Acquisition and reasonably satisfactory to the Administrative Agent with
respect to Series B, and under substantially similar terms as specified in the
preliminary prospectus of the Borrower dated November 30, 2009 with respect to
Series C, so long as, in either case, any dividends with respect thereto comply
with the provisions of Section
9.04.
(l) obligations
with respect to Series D preferred stock issued by the Borrower in form and
substance substantially similar to the terms set forth in that certain Summary
of Terms of Proposed Private Placement by Magnum Hunter Resources Corporation
provided to the Administrative Agent and reasonably satisfactory to the
Administrative Agent so long as any dividends with respect thereto comply with
the provisions of Section
9.04.
(m) Debt of
Alpha Hunter Drilling, LLC and Hunter Real Estate, LLC owing to Wesbanco Bank,
Inc. and guaranteed by the Borrower in an amount not to exceed $4,124,618 in the
aggregate which Debt shall be on terms and conditions reasonably satisfactory to
the Administrative Agent and have terms and conditions no more restrictive that
the terms and conditions set forth in this Agreement.
(n) other
Debt not to exceed $1,500,000 in the aggregate at any one time
outstanding.
-71-
Section
9.03 Liens. The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Lien on any of its Properties (now owned or hereafter
acquired), except:
(a) Liens
securing the payment of any Obligations.
(b) Excepted
Liens.
(c) Liens
securing Capital Leases or purchase money Debt permitted by Section 9.02(d) but
only on the Property under lease.
(d) Liens
described on Schedule
9.03.
(e) Liens on
Property not constituting collateral for the Obligations and not otherwise
permitted by the foregoing clauses of this Section 9.03; provided that the
aggregate principal or face amount of all Debt secured under this clause (d) shall not
exceed $250,000 at any time.
(f) Liens in
favor of Lenders securing Debt permitted by Section
9.02(i).
(g) Liens in
favor of any Lender to secure Swap Agreements.
(h) Liens on
the assets of Unrestricted Subsidiaries securing Debt permitted under Sections 9.02(j)
and (m).
Section
9.04 Restricted
Payments. The
Borrower will not, and will not permit any Restricted Subsidiary to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
return any capital to its stockholders or make any distribution of its Property
to its Equity Interest holders, except Restricted Subsidiaries may declare and
pay dividends ratably with respect to their Equity Interests and the Borrower
may declare and pay dividends on its preferred stock and may redeem its
Series D preferred stock permitted hereunder, so long as (i) no Event of
Default exists at the time of, or is caused by, such payment, (ii) after giving
effect to such payment, availability under the Borrowing Base is equal to or
greater than the greater of (x) ten percent (10%) of (1) the Tranche A Portion
then in effect at all times prior to the Tranche B Termination Date and (2) the
Borrowing Base then in effect at all times from and after the Tranche B
Termination Date and (y) $5,000,000, and (iii) such dividends do not exceed
$2,500,000 in any twelve (12) month period; provided that in the
event of a redemption of the Class D preferred stock, it shall be an additional
requirement that the Borrower make such redemption solely with proceeds of an
equity issuance by the Borrower, subject to any mandatory prepayments required
under Section
3.04(c)(i).
Section
9.05 Investments, Loans and
Advances. The
Borrower will not, and will not permit any Subsidiary to, make or permit to
remain outstanding any Investments in or to any Person, except that the
foregoing restriction shall not apply to:
(a) Investments
reflected in the Financial Statements or which are disclosed to the Lenders in
Schedule
9.05.
(b) accounts
receivable arising in the ordinary course of business.
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(c) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, in each case maturing
within one year from the date of creation thereof.
(d) commercial
paper maturing within one year from the date of creation thereof rated in the
highest grade by S&P or Moody’s.
(e) deposits
maturing within one year from the date of creation thereof with, including
certificates of deposit issued by, any Lender or any office located in the
United States of any other bank or trust company which is organized under the
laws of the United States or any state thereof, has capital, surplus and
undivided profits aggregating at least $100,000,000 (as of the date of such bank
or trust company’s most recent financial reports) and has a short term deposit
rating of no lower than A2 or P2, as such rating is set forth from time to time,
by S&P or Moody’s, respectively or, in the case of any Foreign Subsidiary, a
bank organized in a jurisdiction in which the Foreign Subsidiary conducts
operations having assets in excess of $500,000,000 (or its equivalent in another
currency).
(f) deposits
in money market funds investing exclusively in Investments described in Section 9.05(c),
Section 9.05(d) or
Section
9.05(e).
(g) Investments
made by the Borrower in or to any Restricted Subsidiary in an aggregate amount
at any one time outstanding not to exceed $500,000.
(h) subject
to the limits in Section 9.06,
Investments in direct ownership interests in additional Oil and Gas Properties,
gas gathering, processing and transportation systems and all other assets
contemplated by the permitted business of Borrower located within the geographic
boundaries of the United States of America.
(i) entry
into operating agreements, working interests, royalty interests, mineral leases,
processing agreements, farm-out agreements, contracts for the sale,
transportation or exchange of oil and natural gas, unitization agreements,
pooling arrangements, area of mutual interest agreements, production sharing
agreements or other similar or customary agreements, transactions, properties,
interests or arrangements, and Investments and expenditures in connection
therewith or pursuant thereto, in each case made or entered into in the ordinary
course of the oil and gas business, excluding, however, Investments in other
Persons; provided, however, that none of
the foregoing shall involve the incurrence of any Debt not permitted by Section 9.02.
(j) loans and
advances to directors, officers and employees in connection with the acquisition
of Equity Interests in the Borrower or any Restricted Subsidiary and loans and
advances to directors, officers and employees permitted by applicable law not to
exceed $250,000 in the aggregate at any time.
(k) Travel
advances in the ordinary course of business.
(l) Repurchase
agreements of a commercial bank in the United States and Canada if the
commercial paper of such bank or of the bank holding company of which such bank
is a wholly owned subsidiary is rated in the highest rating categories of
Standard & Poors Corporation, Xxxxx’x Investors Service, Inc., or any other
rating agency satisfactory to the Required Lenders, that are fully secured by
securities described in Section
9.04.
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(m) Investments
in stock of publicly traded companies not to exceed $100,000 in the aggregate
outstanding at any time.
(n) Investments
arising from the endorsement of financial instruments in the ordinary course of
business.
(o) Investments
by Unrestricted Subsidiaries in other Unrestricted Subsidiaries.
(p) Investments
by the Borrower or any Restricted Subsidiaries in Unrestricted Subsidiaries,
when combined with Debt owing by Unrestricted Subsidiaries to the Borrower
and/or any Restricted Subsidiaries under Section 9.02(f), not
to exceed $1,000,000 in the aggregate at any time outstanding.
(q) other
Investments not to exceed $500,000 in the aggregate at any time.
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Section
9.06 Nature of Business;
International Operations. The
Borrower will not, and will not permit any Subsidiary to, allow any material
change to be made in the character of its business as an independent oil and gas
exploration and production company with midstream, marketing and trading
components. From and after the date hereof, the Borrower and its
Subsidiaries will not acquire or make any other expenditure (whether such
expenditure is capital, operating or otherwise) in or related to, any Oil and
Gas Properties not located within the geographical boundaries or territorial
waters of the United States and will not acquire or form any Foreign
Subsidiaries.
Section
9.07 Limitation on
Leases. The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume
or suffer to exist any obligation for the payment of rent or hire of Property of
any kind whatsoever (real or personal but excluding Capital Leases and leases of
Hydrocarbon Interests), under leases or lease agreements which would cause the
aggregate amount of all payments made by the Borrower and the Subsidiaries
pursuant to all such leases or lease agreements, including, without limitation,
any residual payments at the end of any lease, to exceed $500,000 in any period
of twelve (12) consecutive calendar months during the life of such
leases.
Section
9.08 Proceeds of
Notes/Loans. The
Borrower will not permit the Loans or the proceeds of the Notes to be used for
any purpose other than those permitted by Section
7.21. Neither the Borrower nor any Person acting on behalf of
the Borrower has taken or will take any action which might cause any of the Loan
Documents to violate Regulations T, U or X or any other regulation of the Board
or to violate Section
7 of the Securities Exchange Act of 1934 or any rule or regulation
thereunder, in each case as now in effect or as the same may hereinafter be in
effect. If requested by the Administrative Agent, the Borrower will
furnish to the Administrative Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form U-1 or such other form
referred to in Regulation U, Regulation T or Regulation X of the Board, as the
case may be.
Section
9.09 Sale or Discount of
Receivables. Except
for receivables obtained by the Borrower or any Subsidiary out of the ordinary
course of business or the settlement of joint interest billing accounts in the
ordinary course of business or discounts granted to settle collection of
accounts receivable or the sale of defaulted accounts arising in the ordinary
course of business in connection with the compromise or collection thereof and
not in connection with any financing transaction, neither the Borrower nor any
Subsidiary will discount or sell (with or without recourse) to any other Person
that is not the Borrower any of its notes receivable or accounts
receivable.
Section
9.10 Mergers,
Etc. Neither
the Borrower nor any Subsidiary will merge into or with or consolidate with any
other Person, or sell, lease or otherwise dispose of (whether in one transaction
or in a series of transactions) all or substantially all of its Property to any
other Person (any such transaction, a “consolidation”);
provided that
(a) any Subsidiary may participate in a consolidation with the Borrower (provided that the
Borrower shall be the continuing or surviving corporation) or any Restricted
Subsidiary (provided that such
Restricted Subsidiary shall be the continuing or surviving Person) and any
Unrestricted Subsidiary may merge with another Unrestricted Subsidiary and (b)
in the case of an Unrestricted Subsidiary merging into Borrower, no Default or
Event of Default shall result.
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Section
9.11 Sale of
Assets. The
Borrower will not, and will not permit any Subsidiary to, sell, assign,
farm-out, convey or otherwise transfer any asset, including, without limitation,
Property containing proved reserves constituting a portion of the Borrowing Base
except for:
(a) the sale
of Hydrocarbons in the ordinary course of business;
(b) farmouts,
sales or other dispositions of undeveloped acreage and assignments in connection
with such transactions;
(c) the sale
or transfer of equipment in the ordinary course of business or that is no longer
necessary for the business of the Borrower or such Subsidiary or is replaced by
equipment of at least comparable value and use;
(d) the sale
or other disposition (including Casualty Events) of any Oil and Gas Property or
any interest therein or any Restricted Subsidiary owning Oil and Gas Properties;
provided
that
(1) 100% of
the consideration received in respect of such sale or other disposition shall be
cash,
(2) the
consideration received in respect of such sale or other disposition shall be
equal to or greater than the fair market value of the Oil and Gas Property,
interest therein or the Restricted Subsidiary subject of such sale or other
disposition (as reasonably determined by the board of directors of the Borrower
and, if requested by the Administrative Agent, the Borrower shall deliver a
certificate of a Responsible Officer of the Borrower certifying to that
effect),
(3) if such
sale or other disposition of Oil and Gas Property or Restricted Subsidiary
owning Oil and Gas Properties included in the most recently delivered Reserve
Report during any period between two successive Scheduled Redetermination Dates
has a fair market value in excess of 5% of (A) the Tranche A Portion then in
effect at all times prior to the Tranche B Termination Date and (B) the
Borrowing Base then in effect at all times from and after the Tranche B
Termination Date, as determined by the Required Lenders, individually or in the
aggregate, the Borrowing Base shall be reduced, effective immediately upon such
sale or disposition, by an amount equal to the value, if any, assigned such
Property in the most recently delivered Reserve Report and
(4) if any
such sale or other disposition is of a Restricted Subsidiary owning Oil and Gas
Properties, such sale or other disposition shall include all the Equity
Interests of such Restricted Subsidiary.
(e) sales and
other dispositions of Properties not regulated by the foregoing provisions of
this Section 9.11 having a fair
market value not to exceed $500,000 during any 6-month period, and the sale,
trade or other disposition of seismic, geologic or other data, licenses and
similar rights or assets; and
(f) sales,
transfers and dispositions to the Borrower or a Restricted
Subsidiary.
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Section
9.12 Environmental
Matters. The
Borrower will not, and will not permit any Subsidiary to, cause or permit any of
its Property to be in violation of, or do anything or permit anything to be done
which will subject any such Property to any Remedial Work under any applicable
Environmental Laws, assuming disclosure to the applicable Governmental Authority
of all relevant facts, conditions and circumstances, if any, pertaining to such
Property where such violations or remedial obligations could reasonably be
expected to have a Material Adverse Effect.
Section
9.13 Transactions with
Affiliates. The
Borrower will not, and will not permit any Subsidiary to, enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property or the rendering of any service, with any Affiliate (other
than the Loan Parties) unless such transactions are otherwise permitted under
this Agreement and are upon fair and reasonable terms no less favorable to it
than it would obtain in a comparable arm’s length transaction with a Person not
an Affiliate.
Section
9.14 Subsidiaries. The
Borrower shall not, and shall not permit any Subsidiary to, create or acquire
any additional Subsidiary unless the Borrower gives prior written notice to the
Administrative Agent of such creation or acquisition. The Borrower
shall not, and shall not permit any Subsidiary to, sell, assign or otherwise
dispose of any Equity Interests in any Subsidiary except in compliance with
Section
9.11. Neither the Borrower nor any Subsidiary shall have any
Foreign Subsidiaries.
Section
9.15 Subsidiary Obligations and
Preferred Stock. The
Borrower will not and will not permit any of Subsidiary to issue preferred stock
or create, incur or assume any Debt, except for preferred stock and Debt, in
each case permitted under Section
9.02.
Section
9.16 Negative Pledge Agreements;
Dividend Restrictions. The
Borrower will not, and will not permit any Restricted Subsidiary to, create,
incur, assume or suffer to exist any contract, agreement or understanding which
in any way prohibits or restricts the granting, conveying, creation or
imposition of any Lien on any of its Property in favor of the Administrative
Agent and the Lenders or restricts any Loan Party from paying dividends or
making distributions to any other Loan Party, or which requires the consent of
or notice to other Persons in connection therewith; provided, however, that the
preceding restrictions will not apply to encumbrances or restrictions arising
under or by reason of (a) this Agreement or the Security Instruments, (b) any
leases or licenses or similar contracts as they affect any Property or Lien
subject to a lease or license, (c) any contract, agreement
or understanding creating Liens on Capital Leases permitted by Section 9.03(c) (but
only to the extent related to the Property on which such Liens were created),
(d) any restriction with respect to a Subsidiary imposed pursuant to an
agreement entered into for the direct or indirect sale or disposition of all or
substantially all the equity or Property of such Subsidiary (or the Property
that is subject to such restriction) pending the closing of such sale or
disposition, or (e) customary provisions with respect to the distribution of
Property in joint venture agreements.
Section
9.17 Gas Imbalances, Take-or-Pay
or Other Prepayments. The
Borrower will not allow gas imbalances, take-or-pay or other prepayments with
respect to the Oil and Gas Properties of the Borrower or any Restricted
Subsidiary that would require the Borrower or such Restricted Subsidiary to
deliver Hydrocarbons at some future time without then or thereafter receiving
full payment therefor to exceed 500 mmcf equivalent in the aggregate at all
times except for such amounts that are covered by adequate reserves, which
reserves (or the future cash flow therefrom) are excluded from the most recent
Reserve Report.
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Section
9.18 Swap
Agreements. The
Borrower will not, and will not permit any Subsidiary to, enter into any Swap
Agreements with any Person other than (a) Swap Agreements in respect of
commodities (i) with an Approved Counterparty and (ii) the notional volumes for
which (when aggregated with other commodity Swap Agreements then in effect other
than basis differential swaps on volumes already hedged pursuant to other Swap
Agreements) do not exceed, as of the date such Swap Agreement is executed, 80%
of the reasonably anticipated projected production from PDP Oil and Gas
Properties, for each month during the period during which such Swap Agreement is
in effect for each of crude oil and natural gas, calculated separately, (b) Swap
Agreements in respect of interest rates with an Approved Counterparty, as
follows: (i) Swap Agreements effectively converting interest rates
from fixed to floating, the notional amounts of which (when aggregated with all
other Swap Agreements of the Borrower and its Subsidiaries then in effect
effectively converting interest rates from fixed to floating) do not exceed 75%
of the then outstanding principal amount of the Borrower’s Debt for borrowed
money which bears interest at a fixed rate and (ii) Swap Agreements effectively
converting interest rates from floating to fixed, the notional amounts of which
(when aggregated with all other Swap Agreements of the Borrower and its
Subsidiaries then in effect effectively converting interest rates from floating
to fixed) do not exceed 75% of the then outstanding principal amount of the
Borrower’s Debt for borrowed money which bears interest at a floating rate, and
(c) Swap Agreements with respect to which Debt is allowed pursuant to Section
9.01. In no event shall any Swap Agreement to which the
Borrower or any Subsidiary is a party contain any requirement, agreement or
covenant for the Borrower or any Subsidiary to post cash or other collateral or
margin to secure their obligations under such Swap Agreement or to cover market
exposures.
Section
9.19 Sale and Leaseback
Transactions. The
Borrower will not, and will not permit any of its Restricted Subsidiaries to,
enter into any arrangement, directly or indirectly, whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereinafter acquired, and thereafter rent or lease such property or
other property that it intends to use for substantially the same purpose or
purposes as the property sold or transferred.
ARTICLE
X
Events of Default;
Remedies
Section
10.01 Events of
Default. One
or more of the following events shall constitute an “Event of
Default”:
(a) the
Borrower shall fail to pay any principal of any Loan or any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof, by acceleration or otherwise.
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(b) the
Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in Section 10.01(a))
payable under any Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of three (3)
Business Days.
(c) any
representation or warranty made or deemed made by or on behalf of the Borrower
or any Subsidiary in or in connection with any Loan Document or any amendment or
modification of any Loan Document or waiver under such Loan Document, or in any
report, certificate, financial statement or other document furnished pursuant to
or in connection with any Loan Document or any amendment or modification thereof
or waiver thereunder, shall prove to have been incorrect when made or deemed
made in any material respect.
(d) the
Borrower or any Subsidiary shall fail to observe or perform any covenant,
condition or agreement contained in Section 8.01(h),
Section 8.01(l),
Section 8.02, Section 8.03, Section 8.12,
Section 8.15 or in
ARTICLE IX (other
than Section
9.02, Section
9.03 and Section 9.18).
(e) any Loan
Party shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those specified in Section 10.01(a),
Section 10.01(b)
or Section
10.01(d)) or any other Loan Document, and such failure shall continue
unremedied for a period of 30 days after the earlier to occur of (i) notice
thereof from the Administrative Agent to the Borrower (which notice will be
given at the request of any Lender) or (ii) a Responsible Officer of the
Borrower or such Subsidiary otherwise becoming aware of such
default.
(f) the
Borrower or any Subsidiary shall fail to make any payment (whether of principal
or interest and regardless of amount) in respect of any Material Indebtedness,
when and as the same shall become due and payable if the effect of such event is
to cause, or (with the giving of any notice or the lapse of time or both) to
permit the holder or holders of such Debt (or a trustee or agent on behalf of
such holder or holders) to cause, such Debt to become due prior to its stated
maturity.
(g) any event
or condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the giving
of notice, the lapse of time or both) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any
Material Indebtedness to become due, or to require the Redemption thereof or any
offer to Redeem to be made in respect thereof, prior to its scheduled maturity
or require the Borrower or any Subsidiary to make an offer in respect
thereof.
(h) an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the
Borrower or any Subsidiary or its debts, or of a substantial part of its assets,
under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered.
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(i) the
Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file
any petition seeking liquidation, reorganization or other relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in Section
10.01(h), (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the
foregoing.
(j) the
Borrower or any Subsidiary shall become unable, admit in writing its inability,
or fail generally to pay its debts as they become due.
(k) one or
more judgments for the payment of money in an aggregate amount in excess of
$1,500,000 (to the extent not covered by independent third party insurance
provided by insurers of the highest claims paying rating or financial strength
as to which the insurer does not dispute coverage and is not subject to an
insolvency proceeding) shall be rendered against the Borrower, any Subsidiary or
any combination thereof and the same shall remain undischarged for a period of
60 consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of the Borrower or any Subsidiary to enforce any such
judgment.
(l) the Loan
Documents after delivery thereof shall for any reason, except to the extent
permitted by the terms thereof, cease to be in full force and effect and valid,
binding and enforceable in accordance with their terms against the Borrower or
shall be repudiated, or cease to create a valid and perfected Lien of the
priority required thereby on any of the collateral purported to be covered
thereby, except to the extent permitted by the terms of this Agreement, or the
Borrower or any Subsidiary or any of their Affiliates shall so state in
writing.
(m) an ERISA
Event shall have occurred that, in the opinion of the Required Lenders, when
taken together with all other ERISA Events that have occurred, could reasonably
be expected to result in a Material Adverse Effect.
(n) a Change
in Control shall occur.
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Section
10.02 Remedies.
(a) In the
case of an Event of Default other than one described in Section 10.01(h),
Section 10.01(i)
or Section 10.01(j), at
any time thereafter during the continuance of such Event of Default, the
Administrative Agent may, and at the request of the Required Lenders shall, by
notice to the Borrower, take either or both of the following actions, at the
same or different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Notes and the
Loans then outstanding to be due and payable in whole (or in part, in which case
any principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder and under the Notes and the
other Loan Documents (including, without limitation, the payment of cash
collateral to secure the LC Exposure as provided in Section 2.08(j)),
shall become due and payable immediately, without presentment, demand, protest,
notice of intent to accelerate, notice of acceleration or other notice of any
kind, all of which are hereby waived by the Borrower and each Guarantor; and in
case of an Event of Default described in Section 10.01(h),
Section 10.01(i) or
Section 10.01(j), the
Commitments shall automatically terminate and the Notes and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
the other obligations of the Borrower accrued hereunder and under the Notes and
the other Loan Documents (including, without limitation, the payment of cash
collateral to secure the LC Exposure as provided in Section 2.08(j)),
shall automatically become due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the
Borrower.
(b) In the
case of the occurrence of an Event of Default, the Administrative Agent and the
Lenders will have all other rights and remedies available at law and
equity.
(c) All
proceeds realized from the liquidation or other disposition of collateral or
otherwise received after maturity of the Loans or the Notes, whether by
acceleration or otherwise, shall be applied: first, to reimbursement of
expenses and indemnities provided for in this Agreement and the Security
Instruments; second, to
accrued interest on the Loans; third, to fees; fourth, pro rata to principal
outstanding on the Loans and Obligations referred to in Clause (b) of the
definition of Obligations owing to a Lender or an Affiliate of a Lender; fifth, to any other
Obligations; sixth, to
serve as cash collateral to be held by the Administrative Agent to secure the LC
Exposure; and any excess shall be paid to the Borrower or as otherwise required
by any Governmental Requirement.
ARTICLE
XI
The Administrative
Agent
Section
11.01 Appointment;
Powers.
Each of
the Lenders and the Issuing Bank hereby irrevocably (subject to Section 11.06)
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof and the other Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.
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Section
11.02 Duties and Obligations of
Administrative Agent. The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, the Administrative Agent (a) shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) shall not have any duty to take any
discretionary action or exercise any discretionary powers, except as provided in
Section 11.03, and
(c) except as expressly set forth herein, shall not have any duty to disclose,
and shall not be liable for the failure to disclose, any information relating to
the Borrower or any of its Subsidiaries that is communicated to or obtained by
the bank serving as the Administrative Agent or any of its Affiliates in any
capacity. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to it
by the Borrower or a Lender, and shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
under any other Loan Document or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein or in any other Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, (v) the satisfaction of
any condition set forth in ARTICLE VI or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to it or as to those conditions precedent specifically required to
be to its satisfaction, (vi) the existence, value, perfection or priority of any
collateral security or the financial or other condition of the Borrower and its
Subsidiaries or any other obligor or guarantor, or (vii) any failure by the
Borrower or any other Person (other than itself) to perform any of its
obligations hereunder or under any other Loan Document or the performance or
observance of any covenants, agreements or other terms or conditions set forth
herein or therein.
Section
11.03 Action by Administrative
Agent. The
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby that it is required to exercise in writing as
directed by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section 12.02) and in
all cases it shall be fully justified in failing or refusing to act hereunder or
under any other Loan Documents unless it shall (a) receive written instructions
from the Required Lenders or the Lenders, as applicable, (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 12.02)
specifying the action to be taken and (b) be indemnified to its satisfaction by
the Lenders against any and all liability and expenses which may be incurred by
it by reason of taking or continuing to take any such action. The
instructions as aforesaid and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders. If a Default has
occurred and is continuing, then the Administrative Agent shall take such action
with respect to such Default as shall be directed by the requisite Lenders in
the written instructions (with indemnities) described in this Section 11.03,
provided that,
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default as it shall
deem advisable in the best interests of the Lenders. In no event,
however, shall the Administrative Agent be required to take any action which
exposes the Administrative Agent to personal liability or which is contrary to
this Agreement, the Loan Documents or applicable law. If a Default
has occurred and is continuing, no Co-Arranger shall have any obligation to
perform any act in respect thereof. The Administrative Agent shall
not be liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders or the Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 12.02),
and otherwise the Administrative Agent shall not be liable for any action taken
or not taken by it hereunder or under any other Loan Document or under any other
document or instrument referred to or provided for herein or therein or in
connection herewith or therewith including its own ordinary negligence, except
for its own gross negligence or willful misconduct.
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Section
11.04 Reliance by Administrative
Agent. The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon and each of the Borrower, the Lenders
and the Issuing Bank hereby waives the right to dispute the Administrative
Agent’s record of such statement, except in the case of gross negligence or
willful misconduct by the Administrative Agent. The Administrative
Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts. The Administrative Agent
may deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until a written notice of the assignment or transfer thereof
permitted hereunder shall have been filed with the Administrative
Agent.
Section
11.05 Subagents. The
Administrative Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by
it. The Administrative Agent and any such sub-agent may perform any
and all its duties and exercise its rights and powers through their respective
Related Parties. The exculpatory provisions of the preceding Sections
of this ARTICLE XI shall
apply to any such sub-agent and to the Related Parties of the Administrative
Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Administrative Agent.
Section
11.06 Resignation or Removal of
Administrative Agent. Subject
to the appointment and acceptance of a successor Administrative Agent as
provided in this Section 11.06,
the Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Bank and the Borrower, and the Administrative Agent may be removed at
any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right, in
consultation with and upon the approval of the Borrower (so long as no Event of
Default has occurred and is continuing), which approval shall not be
unreasonably withheld, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation or removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon
the acceptance of its appointment as Administrative Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent’s resignation hereunder,
the provisions of this ARTICLE XI and Section 12.03
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as
Administrative Agent.
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Section
11.07 Administrative Agent as
Lender. Each
bank serving as the Administrative Agent hereunder shall have the same rights
and powers in its capacity as a Lender as any other Lender and may exercise the
same as though it were not the Administrative Agent, and such bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any Subsidiary or other Affiliate thereof
as if it were not the Administrative Agent hereunder.
Section
11.08 No
Reliance. Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and each other Loan Document to which it
is a party. Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document, any related
agreement or any document furnished hereunder or thereunder. The
Administrative Agent shall not be required to keep itself informed as to the
performance or observance by the Borrower or any of its Subsidiaries of this
Agreement, the Loan Documents or any other document referred to or provided for
herein or to inspect the Properties or books of the Borrower or its
Subsidiaries. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, neither the Administrative Agent nor any
Co-Arranger shall have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial condition or
business of the Borrower (or any of its Affiliates) which may come into the
possession of the Administrative Agent or any of its Affiliates. In
this regard, each Lender acknowledges that Xxxxxxx Xxxxx LLP is acting in this
transaction as special counsel to the Administrative Agent only, except to the
extent otherwise expressly stated in any legal opinion or any Loan
Document. Each other party hereto will consult with its own legal
counsel to the extent that it deems necessary in connection with the Loan
Documents and the matters contemplated therein.
Section
11.09 Authority to Release
Collateral and Liens. Each
Lender and the Issuing Bank hereby authorizes the Administrative Agent to
release any collateral that is permitted to be sold or released pursuant to the
terms of the Loan Documents. Each Lender and the Issuing Bank hereby
authorizes the Administrative Agent to execute and deliver to the Borrower, at
the Borrower’s sole cost and expense, any and all releases of Liens, termination
statements, assignments or other documents reasonably requested by the Borrower
in connection with any sale or other disposition of Property to the extent such
sale or other disposition is permitted by the terms of Section 9.11 or is
otherwise authorized by the terms of the Loan Documents.
Section
11.10 The
Co-Arrangers. No
Co-Arranger shall have any duties, responsibilities or liabilities under this
Agreement and the other Loan Documents other than their respective duties,
responsibilities and liabilities in their respective capacity as a Lender
hereunder.
Section
11.11 Filing of Proofs of
Claim. In
case of any Default or Event of Default under Section 10.01(g),
Section
10.01(h) or Section 10.01(i), the
Administrative Agent (regardless of whether the principal of any Loan or LC
Exposure shall then be due and payable and regardless of whether the
Administrative Agent has made any demand on the Borrower) shall be entitled and
empowered, by intervention in such proceeding or otherwise:
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(a) to (i)
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, LC Exposure and all other Obligations that
is owing and unpaid and (ii) file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders, the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders, the
Administrative Agent under Section 3.03 and
Section 12.03)
allowed in such judicial proceeding; and
(b) to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same.
Each
Lender hereby authorizes any custodian, receiver, assignee, trustee,
conservator, sequestrator or other similar official in any such judicial
proceeding: (i) to make such payments to the Administrative Agent; and (ii) if
the Administrative Agent shall consent to the making of such payments directly
to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Section 3.03 and
Section
12.03. Nothing contained herein shall be deemed to authorize
the Administrative Agent to authorize or consent to or accept or adopt on behalf
of any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding. Each Lender retains its right to file and prove a claim
separately.
ARTICLE
XII
Miscellaneous
Section
12.01 Notices.
(a) Except in
the case of notices and other communications expressly permitted to be given by
telephone (and subject to Section 12.01(b)),
all notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(i) if to the
Borrower, to it at Magnum Hunter Resources Corporation, 000 Xxxx Xxx Xxxx.,
Xxxxx 000, Xxxxxxx, Xxxxx 00000, Attention Xxx Xxxxxx (Telecopy No.
000-000-0000;
(ii) if to the
Administrative Agent, to it at Bank of Montreal, 000 Xxxxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxx 00000, Attention Xxxxxx Xxxxxxxx (Telecopy No.
000-000-0000, with a copy to 000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000,
Attention Xxxxx XxXxxx (Telecopy No. (000) 000-0000;
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(iii) if to any
other Lender, in its capacity as such, or any other Lender in its capacity as an
Issuing Bank, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.
(b) Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to ARTICLE II,
ARTICLE III,
ARTICLE IV and
ARTICLE V unless
otherwise agreed by the Administrative Agent and the applicable
Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.
(c) Any party
hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
Section
12.02 Waivers;
Amendments.
(a) No
failure on the part of the Administrative Agent, the Issuing Bank or any Lender
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege, or any abandonment or discontinuance of steps
to enforce such right, power or privilege, under any of the Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under any of the Loan Documents preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies of the Administrative Agent, the
Issuing Bank and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Borrower therefrom shall
in any event be effective unless the same shall be permitted by Section 12.02(b), and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.
(b) Neither
this Agreement nor any provision hereof nor any Security Instrument nor any
provision thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Borrower and the Required
Lenders or by the Borrower and the Administrative Agent with the consent of the
Required Lenders; provided that no such agreement shall (i) increase the
Commitment or the Maximum Credit Amount of any Lender without the written
consent of such Lender, (ii) increase the Borrowing Base without the written
consent of each Lender, decrease or maintain the Borrowing Base without the
consent of the Required Lenders, or modify Section 2.07 without
the consent of each Lender, (iii) reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any fees payable
hereunder, or reduce any other Obligations hereunder or under any other Loan
Document, without the written consent of each Lender affected thereby, (iv)
postpone the scheduled date of payment of the principal
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amount of
any Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder, or any other Obligations hereunder or under any other Loan Document,
or reduce the amount of, waive or excuse any such payment, or postpone or extend
the Termination Date without the written consent of each Lender affected
thereby, (v) change Section 4.01(b) or
Section 4.01(c)
in a manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (vi) waive or amend Section 8.14,
without the written consent of each Lender, (vii) release any of the collateral
(other than as provided in Section 11.09), or
reduce the percentage set forth in Section 8.14 to less
than 85%, without the written consent of each Lender, or (viii) change any of
the provisions of this Section 12.02(b)
or the definition of “Required Lenders” or
any other provision hereof specifying the number or percentage of Lenders
required to waive, amend or modify any rights hereunder or under any other Loan
Documents or make any determination or grant any consent hereunder or any other
Loan Documents, without the written consent of each Lender; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent or the Issuing Bank hereunder or under any other Loan
Document without the prior written consent of the Administrative Agent or the
Issuing Bank, as the case may be. Notwithstanding the foregoing, any
supplement to Schedule
7.14 (Subsidiaries) shall be effective simply by delivering to the
Administrative Agent a supplemental schedule clearly marked as such and, upon
receipt, the Administrative Agent will promptly deliver a copy thereof to the
Lenders.
Section
12.03 Expenses, Indemnity; Damage
Waiver.
(a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and their Affiliates, including, without limitation, the
reasonable fees, charges and disbursements of counsel and other outside
consultants for the Administrative Agent, the reasonable travel, photocopy,
mailing, courier, telephone and other similar expenses, and the cost of
environmental audits and surveys and appraisals, in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration (both before and after the
execution hereof and including advice of counsel to the Administrative Agent as
to the rights and duties of the Administrative Agent and the Lenders with
respect thereto) of this Agreement and the other Loan Documents and any
amendments, modifications or waivers of or consents related to the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all costs, expenses, Taxes, assessments and
other charges incurred by the Administrative Agent or any Lender in connection
with any filing, registration, recording or perfection of any security interest
contemplated by this Agreement or any Security Instrument or any other document
referred to therein, (iii) all reasonable out-of-pocket expenses incurred by the
Issuing Bank in connection with the issuance, amendment, renewal or extension of
any Letter of Credit issued by the Issuing Bank or any demand for payment
thereunder, (iv) all out-of-pocket expenses incurred by the Administrative
Agent, the Issuing Bank or any Lender, including the reasonable fees, charges
and disbursements of any counsel for the Administrative Agent, the Issuing Bank
or any Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement or any other Loan Document, including its rights
under this Section 12.03, or in
connection with the Loans made or Letters of Credit issued hereunder, including,
without limitation, all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.
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(b) The
Borrower shall indemnify the Co-Arrangers, the Administrative Agent, the Issuing
Bank and each Lender, and each Related Party of any of the foregoing persons
(each such person being called an “Indemnitee”) against,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto or the parties to any other Loan Document of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or by any other Loan Document, (ii) the failure of the
Borrower or any Subsidiary to comply with the terms of any Loan Document,
including this Agreement, or with any Governmental Requirement, (iii) any
inaccuracy of any representation or any breach of any warranty or covenant of
the Borrower set forth in any of the Loan Documents or any instruments,
documents or certifications delivered in connection therewith, (iv) any loan or
Letter of Credit or the use of the proceeds therefrom, including, without
limitation, (A) any refusal by the Issuing Bank to honor a demand for payment
under a Letter of Credit issued by the Issuing Bank if the documents presented
in connection with such demand do not strictly comply with the terms of such
Letter of Credit, or (B) the payment of a drawing under any Letter of Credit
notwithstanding the non-compliance, non-delivery or other improper presentation
of the documents presented in connection therewith, (v) the operations of the
business of the Borrower and its Subsidiaries by the Borrower and its
Subsidiaries, (vi) any assertion that the Lenders were not entitled to receive
the proceeds received pursuant to the Security Instruments, (vii) any
Environmental Law applicable to the Borrower or any Subsidiary or any of their
properties, including without limitation, the presence, generation, storage,
release, threatened release, use, transport, disposal, arrangement of disposal
or treatment of oil, oil and gas wastes, solid wastes or hazardous substances on
any of their properties, (viii) the breach or non-compliance by the Borrower or
any Subsidiary with any Environmental Law applicable to the Borrower or any
Subsidiary, (ix) the past ownership by the Borrower or any Subsidiary of any of
their properties or past activity on any of their properties which, though
lawful and fully permissible at the time, could result in present liability, (x)
the presence, use, release, storage, treatment, disposal, generation, threatened
release, transport, arrangement for transport or arrangement for disposal of
oil, oil and gas wastes, solid wastes or hazardous substances on or at any of
the properties owned or operated by the Borrower or any Subsidiary or any actual
or alleged presence or release of hazardous materials on or from any property
owned or operated by the Borrower or any of its Subsidiaries, (xi) any
environmental liability related in any way to the Borrower or any of its
Subsidiaries, or (xii) any other environmental, health or safety condition in
connection with the Loan Documents, or (xiii) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any indemnitee is a party thereto, and such Indemnity shall extend to each
Indemnitee notwithstanding the sole or concurrent negligence of every kind or
character whatsoever, whether active or passive, whether an affirmative act or
an omission, including without limitation, all types of negligent conduct
identified in the restatement (second) of torts of one or more of the
Indemnitees or by reason of strict liability imposed without fault on any one or
more of the Indemnitees; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (a) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee, (b) relate to agreements,
or obligations to which Borrower and its subsidiaries are not parties,
(c) relate to claims between or among any of the lenders, the agent, the
co-arrangers or any of their shareholders, partners or members, or (d) relate to
laws, rules or regulations affecting the lenders, the agent or the co-arrangers
and not the borrower or the subsidiaries, or (e) in respect of any property for
any occurrence arising from the acts or omissions of the agent or any lender
during the period after which such person, its successors or assigns shall have
obtained possession of such property (whether by foreclosure or deed in lieu of
foreclosure, as mortgagee-in-possession or otherwise).
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(c) To the
extent that the Borrower fails to pay any amount required to be paid by it to
the Administrative Agent or the Issuing Bank under Section 12.03(a) or
(b), each Lender
severally agrees to pay to the Administrative Agent or the Issuing Bank, as the
case may be, such Lender’s Applicable Percentage (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent or the Issuing Bank in its capacity
as such.
(d) To the
extent permitted by applicable law, the Borrower and the Indemnified Parties
shall not assert, and hereby waive, any claim against each other, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the Transactions, any Loan or Letter
of Credit or the use of the proceeds thereof.
(e) All
amounts due under this Section 12.03 shall
be payable promptly after written demand therefor.
Section
12.04 Successors and
Assigns.
(a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
except that (i) the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and any attempted assignment or transfer by the Borrower without such consent
shall be null and void) and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section
12.04. Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in Section 12.04(c))
and, to the extent expressly contemplated hereby, the Related Parties of each of
the Administrative Agent, the Issuing Bank and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this
Agreement.
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(b) (i) Subject to the conditions
set forth in Section 12.04(b)(ii),
any Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld or delayed) of: (1) the
Borrower, provided that no consent of the Borrower shall be required for an
assignment to a Lender that is not a Defaulting Lender, an Affiliate of a Lender
that is not a Defaulting Lender, an Approved Fund or, if an Event of Default has
occurred and is continuing, any other assignee; and (2) the Administrative
Agent, provided
that no such consent shall be required for an assignment to an assignee that is
a Lender that is not a Defaulting Lender immediately prior to giving effect to
such assignment.
(ii) Assignments
shall be subject to the following additional conditions: (1) any
assignment of Loans and Commitments while any Tranche B Loans are outstanding
must be of the same percentage of Tranche A Loans and Tranche B Loans and the
Tranche A Portion and the Tranche B Portion; (2) except in the case of an
assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender’s Commitment, the amount of the
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $10,000,000, and
the Commitments of any assigning Lender remaining a party hereto after giving
effect to the assignment shall be at least $10,000,000, unless, in each case,
each of the Borrower, the Administrative Agent otherwise consents, provided that no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing; (3) each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement; (4) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500; (5) the assignee, if
it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire and shall deliver notice of the Assignment and
Assumption to the Borrower; and (6) in the case of an assignment to a CLO, the
assigning Lender shall retain the sole right to approve any amendment,
modification or waiver of any provision of this Agreement, provided that the
Assignment and Assumption between such Lender and such CLO may provide that such
Lender will not, without the consent of such CLO, agree to any amendment,
modification or waiver described in the first proviso to Section 12.02 that
affects such CLO.
(iii) Subject
to Section 12.04(b)(iv)
and the acceptance and recording thereof, from and after the effective date
specified in each Assignment and Assumption the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Section 5.01,
Section 5.02, Section 5.03 and
Section
12.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 12.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section
12.04(c).
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(iv) The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Maximum Credit Amount of, and principal amount of the Loans
and LC Disbursements owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the
Borrower, the Issuing Bank and any Lender, at any reasonable time and from time
to time upon reasonable prior notice. In connection with any changes
to the Register, if necessary, the Administrative Agent will reflect the
revisions on Annex
I and forward a copy of such revised Annex I to the
Borrower, the Issuing Bank and each Lender.
(v) Upon its
receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in Section 12.04(b) and
any written consent to such assignment required by Section 12.04(b),
the Administrative Agent shall accept such Assignment and Assumption and record
the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this Section 12.04(b).
(c) (i) Any Lender may, without
the consent of the Borrower, the Administrative Agent or the Issuing Bank, sell
participations to one or more banks or other entities (a “Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it); provided that (1)
such Lender’s obligations under this Agreement shall remain unchanged, (2) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (3) the Borrower, the Administrative Agent,
the Issuing Bank and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the proviso to Section 12.02
that affects such Participant. In addition such agreement must
provide that the Participant be bound by the provisions of Section
12.03. Subject to Section 12.04(c)(ii),
the Borrower agrees that each Participant shall be entitled to the benefits of
Section 5.01,
Section 5.02 and
Section 5.03 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section
12.04(b). To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 12.08 as
though it were a Lender, provided such Participant agrees to be subject to Section 4.01(c) as
though it were a Lender.
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(ii) A
Participant shall not be entitled to receive any greater payment under Section 5.01 or
Section 5.03
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the participation
to such Participant is made with the Borrower’s prior written
consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 5.03 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section 5.03(e) as
though it were a Lender.
(d) Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank, and this Section 12.04(d)
shall not apply to any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
(e) Notwithstanding
any other provisions of this Section 12.04, no
transfer or assignment of the interests or obligations of any Lender or any
grant of participations therein shall be permitted if such transfer, assignment
or grant would require the Borrower to file a registration statement with the
SEC or to qualify the Loans under the “Blue Sky” laws of any
state.
Section
12.05 Survival; Revival;
Reinstatement.
(a) All
covenants, agreements, representations and warranties made by the Borrower
herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent, the Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Section 5.01,
Section 5.02,
Section 5.03 and
Section 12.03 and
ARTICLE XI shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Letters of Credit and the Commitments or the termination
of this Agreement, any other Loan Document or any provision hereof or
thereof.
(b) To the
extent that any payments on the Obligations or proceeds of any collateral are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver or other
Person under any bankruptcy law, common law or equitable cause, then to such
extent, the Obligations so satisfied shall be revived and continue as if such
payment or proceeds had not been received and the Administrative Agent’s, and
the Lenders’ Liens, security interests, rights, powers and remedies under this
Agreement and each Loan Document shall continue in full force and
effect. In such event, each Loan Document shall be automatically
reinstated and the Borrower shall take such action as may be reasonably
requested by the Administrative Agent or the Lenders to effect such
reinstatement.
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Section
12.06 Counterparts; Integration;
Effectiveness.
(a) This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.
(b) This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Co-Arrangers and the Administrative Agent
constitute the entire contract among the parties relating to the subject matter
hereof and thereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof and
thereof. This Agreement and the other Loan Documents represent the
final agreement among the parties hereto and thereto and may not be contradicted
by evidence of prior, contemporaneous or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the
parties.
(c) Except as
provided in Section 6.01(a), this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns. Delivery of an executed counterpart of a signature page of
this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
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Section
12.07 Severability. Any
provision of this Agreement or any other Loan Document held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof or thereof; and the invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Section
12.08 Right of
Setoff. If
an Event of Default shall have occurred and be continuing, each Lender and each
of its Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations (of whatsoever kind, including, without limitations
obligations under Swap Agreements) at any time owing by such Lender or Affiliate
to or for the credit or the account of the Borrower or any Subsidiary against
any of and all the obligations of the Borrower or any Subsidiary owed to such
Lender now or hereafter existing under this Agreement or any other Loan
Document, irrespective of whether or not such Lender shall have made any demand
under this Agreement or any other Loan Document and although such obligations
may be unmatured. The rights of each Lender under this Section 12.08
are in addition to other rights and remedies (including other rights of setoff)
which such Lender or its Affiliates may have.
Section
12.09 Governing Law; Jurisdiction;
Consent to Service of Process.
(a) This
Agreement and the Loan Documents shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to any
choice-of-law provisions that would require the application of the law of
another jurisdiction; provided, to the extent any of the Security Instruments
recite that they are governed by the law of another jurisdiction, or any action
or event taken thereunder (such as foreclosure of the Mortgaged Property)
requires application of or compliance with the law of another jurisdiction, such
provisions and concepts shall apply.
(b) Any legal
action or proceeding with respect to the Loan Documents shall be brought in the
courts of the Supreme Court of the State of New York sitting in New York County
and of the United States District Court of the Southern District of New York,
and, by execution and delivery of this Agreement, each party hereby accepts for
itself and (to the extent permitted by law) in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid
courts. Each party hereby irrevocably waives any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any such action or proceeding in such respective
jurisdictions. This submission to jurisdiction is non-exclusive and
does not preclude a party from obtaining jurisdiction over another party in any
court otherwise having jurisdiction.
(c) Each
party irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at the address
specified in Section 12.01 or such
other address as is specified pursuant to Section 12.01 (or its
assignment and assumption), such service to become effective thirty (30) days
after such mailing. Nothing herein shall affect the right of a party
or any holder of a note to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against another party in any
other jurisdiction.
-94-
(d) Each
party hereby (i) irrevocably and unconditionally waives, to the fullest extent
permitted by law, trial by jury in any legal action or proceeding relating to
this Agreement or any other Loan Document and for any counterclaim therein; (ii)
irrevocably waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any such litigation any special, exemplary,
punitive or consequential damages, or damages other than, or in addition to,
actual damages; (iii) certifies that no party hereto nor any representative or
agent of counsel for any party hereto has represented, expressly or otherwise,
or implied that such party would not, in the event of litigation, seek to
enforce the foregoing waivers, and (iv) acknowledges that it has been induced to
enter into this Agreement, the Loan Documents and the transactions contemplated
hereby and thereby by, among other things, the mutual waivers and certifications
contained in this Section
12.09.
Section
12.10 Headings. Article
and Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.
Section
12.11 Confidentiality. Each
of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority or self-regulatory body; provided Borrower has been given reasonable
advance notice thereof and been afforded an opportunity to limit or protest the
disclosure, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; provided Borrower has been given
reasonable advance notice thereof and been afforded an opportunity to limit or
protest the disclosure, (d) to any other party to this Agreement or any other
Loan Document, (e) in connection with the exercise of any remedies hereunder or
under any other Loan Document or any suit, action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section 12.11, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any Swap Agreement relating to the
Borrower and its obligations, (g) with the consent of the Borrower or (h) to the
extent such Information (i) becomes publicly available other than as a
result of a breach of this Section 12.11 or
(ii) becomes available to the Administrative Agent, the Issuing Bank or any
Lender on a nonconfidential basis from a source other than the
Borrower. For the purposes of this Section 12.11,
“Information”
means all information received from the Borrower or any Subsidiary relating to
the Borrower or any Subsidiary and their businesses, other than any such
information that is available to the Administrative Agent, the Issuing Bank or
any Lender on a nonconfidential basis prior to disclosure by the Borrower or a
Subsidiary;. Any Person required to maintain the confidentiality of
Information as provided in this Section 12.11
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential
information. Notwithstanding anything herein to the contrary, any
party hereto (and each employee, representative or other agent of such party)
may disclose without limitation of any kind, any information with respect to the
“tax treatment”
and “tax
structure” (in each case, within the meaning of Treasury Regulation
Section 1.6011-4) of the transactions contemplated hereby and all materials of
any kind (including opinions or other tax analyses) that are provided to that
party relating to such tax treatment or tax structure; provided that with
respect to any document or similar item that in either case contains information
concerning the tax treatment or tax structure of the transactions, as well as
other information, this sentence shall only apply to such portions of the
document or similar item that relate to the tax treatment or tax structure of
the transactions contemplated hereby.
-95-
Section
12.12 Exculpation
Provisions. Each
of the parties hereto specifically agrees that it has a duty to read this
Agreement and the other Loan Documents and agrees that it is charged with notice
and knowledge of the terms of this Agreement and the other Loan Documents; that
it has in fact read this Agreement and is fully informed and has full notice and
knowledge of the terms and conditions of this Agreement; that it has been
represented by independent legal counsel of its choice throughout the
negotiations preceding its execution of this Agreement and the other Loan
Documents; and has received the advice of its attorney in entering into this
Agreement and the other Loan Documents; and that it recognizes that certain of
the terms of this Agreement and the other Loan Documents may result, subject to
the terms hereof and thereof and applicable law, in one party assuming the
liability inherent in some aspects of the transaction and relieving the other
party of its responsibility for such liability. Each party hereto
agrees and covenants that it will not contest the validity or enforceability of
any exculpatory provision of this Agreement and the other loan documents on the
basis that the party had no notice or knowledge of such provision or that the
provision is not “conspicuous.”
Section
12.13 No Third Party
Beneficiaries. This
Agreement, the other Loan Documents, and the agreement of the Lenders to make
Loans and the Issuing Bank to issue, amend, renew or extend Letters of Credit
hereunder are solely for the benefit of the Borrower, and no other Person
(including, without limitation, any Subsidiary of the Borrower, any obligor,
contractor, subcontractor, supplier or materialmen) shall have any rights,
claims, remedies or privileges hereunder or under any other Loan Document
against the Administrative Agent, the Issuing Bank or any Lender for any reason
whatsoever. There are no third party beneficiaries.
Section
12.14 Collateral Matters; Swap
Agreements. The
benefit of the Security Instruments and of the provisions of this Agreement
relating to any collateral securing the Obligations shall also extend to and be
available to those Lenders or their Affiliates which are counterparties to any
Swap Agreement with the Borrower or any of its Subsidiaries on a pro rata basis
in respect of any obligations of the Borrower or any of its Subsidiaries which
arise under any such Swap Agreement while such Person or its Affiliate is a
Lender, but only while such Person or its Affiliate is a Lender, including any
Swap Agreements between such Persons in existence prior to the date
hereof. No Lender or any Affiliate of a Lender shall have any voting
rights under any Loan Document as a result of the existence of obligations owed
to it under any such Swap Agreements.
Section
12.15 US Patriot Act
Notice. Each
Lender hereby notifies the Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Patriot
Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the Patriot Act.
-96-
Section
12.16 Interest Rate
Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan or reimbursement obligation, together with all fees, charges and other
amounts that are treated as interest on such Loan or reimbursement obligation
under applicable law (collectively the “Charges”), shall
exceed the Highest Lawful Rate that may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan or reimbursement obligation
in accordance with applicable law, the rate of interest payable in respect of
such Loan or reimbursement obligation hereunder, together with all Charges
payable in respect thereof, shall be limited to the Highest Lawful Rate and, to
the extent lawful, the interest and Charges that would have been payable in
respect of such Loan or reimbursement obligation but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans, reimbursement
obligations or periods shall be increased (but not above the Highest Lawful Rate
therefor) until such cumulated amount shall have been received by such Lender
and in the event that, notwithstanding the foregoing, under any circumstances
the aggregate amounts taken, reserved, charged, received or paid on the Loans
include amounts which by applicable law are deemed interest which would exceed
the Highest Lawful Rate, then such excess shall be deemed to be a mistake and
each Lender receiving same shall credit the same on the principal of its Loans
(or if such Loans shall have been paid in full, refund said excess to the
Borrower). In the event that the maturity of the Obligations are
accelerated by reason of any election of the holder thereof resulting from any
Event of Default under this Agreement or otherwise, or in the event of any
required or permitted prepayment, then such consideration that constitutes
interest may never include more than the Highest Lawful Rate, and excess
interest, if any, provided for in this Agreement or otherwise shall be canceled
automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited on the Obligations (or, if the applicable
Loans shall have been paid in full, refunded to the Borrower of such
interest). The provisions of this Section shall control over all
other provisions of this Agreement or the other Loan Documents which may be in
apparent conflict herewith.
[Signatures
Begin Next Page]
-97-
The
parties hereto have caused this Agreement to be duly executed as of the day and
year first above written.
| BORROWER: | |
|
MAGNUM
HUNTER RESOURCES CORPORATION,
a
Delaware corporation
|
|
| By: /s/ Xxxxxx X. Xxxxxx | |
| Name: Xxxxxx X. Xxxxxx | |
| Title: Chief Financial Officer |
Signature
Page to Credit Agreement
| ADMINISTRATIVE AGENT, ISSUING BANK AND LENDER: | |
|
BANK
OF MONTREAL
|
|
| By: /s/ Xxxxxx Xxxxxxxx | |
| Name: Xxxxxx Xxxxxxxx | |
| Title: Director |
Signature Page to Credit Agreement
| SYNDICATION AGENT AND LENDER: | |
|
CAPITAL
ONE, N.A.
|
|
| By: /s/ Xxxx X. Xxxx | |
| Name: Xxxx X. Xxxx | |
| Title: Vice President |
Signature Page to Credit Agreement
ANNEX
I
LIST
OF MAXIMUM CREDIT AMOUNTS
|
Name
of Lender
|
Applicable
Percentage
|
Maximum
Credit Amount
|
|
Bank
of Montreal
|
50%
|
$75,000,000.00
|
|
Capital
One, N.A.
|
50%
|
$75,000,000.00
|
|
TOTAL
|
__________________
|
__________________
|
|
100.00%
|
$150,000,000.00
|
Annex
I-1
EXHIBIT
A
FORM
OF NOTE
| $[_________] | _______________, 2010 |
FOR VALUE
RECEIVED, MAGNUM HUNTER RESOURCES CORPORATION, a Delaware corporation (the
“Borrower”)
hereby promises to pay to the order of [_________________] (the “Lender”), the lesser
of (i) [_______________] DOLLARS ($[____________]) and (ii) the aggregate unpaid
Loans made by the Lender pursuant to the Credit Agreement, as hereinafter
defined), in lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts provided in the
Credit Agreement referred to below, on the dates and in the amounts set forth in
the Credit Agreement. All capitalized terms used herein and not
otherwise defined that are defined in the Credit Agreement have the meanings as
defined in the Credit Agreement.
The
Borrower promises to pay interest on the unpaid principal amount of this Note
outstanding from time to time from the date hereof until such principal amount
is paid in full, at the place and at such interest rates as are specified in the
Credit Agreement.
This Note
is one of the Notes referred to in, and the Note and all provisions herein are
entitled to the benefits and are subject to the terms of, the Amended and
Restated Credit Agreement, dated as of _____________, 2010, among the Borrower,
Bank of Montreal, as Administrative Agent, the lenders signatory thereto
(including the Lender) and Capital One, N.A., as Syndication Agent (as the same
may be amended or otherwise modified from time to time, the “Credit
Agreement”).
The
obligations of the Borrower hereunder are secured by the Security Documents
(subject to the limitations contained in the Security Documents and the Credit
Agreement). The Credit Agreement, among other things, (a) provides
for the making of advances by the Lender and other Lenders to the Borrower from
time to time, and (b) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events, for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and conditions
therein specified, and for limitations on the amount of interest paid such that
no provision of the Credit Agreement or this Note shall require the payment or
permit the collection of interest in excess of the Maximum Rate.
The
Borrower waives grace, demand, presentment for payment, notice of dishonor or
default, notice of intent to accelerate or acceleration, protest and notice of
protest and diligence in collecting and bringing of suit against any party
hereto.
Exhibit
A-1
This Note
shall be governed by and construed under the laws of the State of New York and
the applicable laws of the United States of America.
|
MAGNUM
HUNTER RESOURCES CORPORATION,
a
Delaware corporation
|
|
| By: ____________________________________ | |
| Name: ____________________________________ | |
| Title: ____________________________________ |
Exhibit
A-2
EXHIBIT
B
FORM
OF BORROWING REQUEST
[______________],
200[__]
Magnum
Hunter Resources Corporation, a Delaware corporation (the “Borrower”), pursuant
to Section 2.03
of the Amended and Restated Credit Agreement dated as of February 12, 2010
(together with all amendments, restatements, supplements or other modifications
thereto, the “Credit
Agreement”), among the Borrower, Bank of Montreal, as Administrative
Agent, the lenders (the “Lenders”) which are
or become parties thereto and Capital One, N.A., as Syndication Agent (unless
otherwise defined herein, each capitalized term used herein is defined in the
Credit Agreement), hereby requests a Borrowing as follows:
(i) Aggregate
amount of the requested Borrowing is $[____________];
(ii) Requested
Borrowing is to be under Tranche [__];
(iii) Date
of such Borrowing is [____________], 200[___];
(iv) Requested
Borrowing is to be [an ABR Borrowing] [a Eurodollar Borrowing];
(v) In
the case of a Eurodollar Borrowing, the initial Interest Period applicable
thereto is [____________];
(vi) Amount
of Borrowing Base in effect on the date hereof is $[____________], amount of
Tranche A Portion in effect on the date hereof is $[____________] and amount of
Tranche B Portion in effect on the date hereof is $[____________];
(vii) Total
Tranche A Credit Exposures on the date hereof (i.e., outstanding principal
amount of Loans and total LC Exposure) is $[____________] and the outstanding
principal balance of Tranche B Loans on the date hereof is
$[____________];
(viii) Pro forma total Tranche A
Credit Exposures (giving effect to the requested Borrowing) is $[____________]
and pro forma Tranche B
Loans (giving effect to the requested Borrowing) is $[____________] (1); and
(viii) Location
and number of the Borrower’s account to which funds are to be disbursed, which
shall comply with the requirements of Section 2.05 of the
Credit Agreement, is as follows:
[______________]
[______________]
______________________
|
(1)
|
After
the Tranche B Termination Date, information regarding the Tranche B
Portion and the principal balance of the Tranche B Loans may be omitted
from Borrowing Requests.
|
Exhibit
B-1
The
undersigned certifies that he/she is the [____________] of the Borrower, and
that as such he/she is authorized to execute this certificate on behalf of the
Borrower. The undersigned further certifies, represents and warrants
on behalf of the Borrower that the Borrower is entitled to receive the requested
Borrowing under the terms and conditions of the Credit Agreement.
|
MAGNUM
HUNTER RESOURCES CORPORATION,
a
Delaware corporation
|
|
| By: ____________________________________ | |
| Name: ____________________________________ | |
| Title: ____________________________________ |
Exhibit
B-2
EXHIBIT
C
FORM
OF INTEREST ELECTION REQUEST
[____________],
200[___]
Magnum
Hunter Resources Corporation, a Delaware corporation (the “Borrower”), pursuant
to Section 2.04
of the Amended and Restated Credit Agreement dated as of February 12, 2010
(together with all amendments, restatements, supplements or other modifications
thereto, the “Credit
Agreement”), among the Borrower, Bank of Montreal, as Administrative
Agent, the lenders (the “Lenders”) which are
or become parties thereto and Capital One, N.A., as Syndication Agent (unless
otherwise defined herein, each capitalized term used herein is defined in the
Credit Agreement), hereby makes an Interest Election Request as
follows:
(i) The
Borrowing to which this Interest Election Request applies, and if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information specified pursuant to (iii) and (iv) below shall be specified for
each resulting Borrowing) is [____________];
(ii) The
effective date of the election made pursuant to this Interest Election Request
is [____________], 200[___];[and]
(iii) The
resulting Borrowing is to be [an ABR Borrowing] [a Eurodollar Borrowing][;
and]
[(xiii) [If the resulting Borrowing is a
Eurodollar Borrowing] The Interest Period applicable to the resulting Borrowing
after giving effect to such election is [____________]].
The
undersigned certifies that he/she is the [____________] of the Borrower, and
that as such he/she is authorized to execute this certificate on behalf of the
Borrower. The undersigned further certifies, represents and warrants
on behalf of the Borrower that the Borrower is entitled to receive the requested
continuation or conversion under the terms and conditions of the Credit
Agreement.
|
MAGNUM
HUNTER RESOURCES CORPORATION,
a
Delaware corporation
|
|
| By: ____________________________________ | |
| Name: ____________________________________ | |
| Title: ____________________________________ |
Exhibit
C-1
EXHIBIT
D
FORM
OF
COMPLIANCE
CERTIFICATE
The
undersigned hereby certifies that he/she is the [____________] of Magnum Hunter
Resources Corporation, a Delaware corporation (the “Borrower”), and that
as such he/she is authorized to execute this certificate on behalf of the
Borrower. With reference to the Amended and Restated Credit Agreement
dated as of February 12, 2010 (together with all amendments, restatements,
supplements or other modifications thereto being the “Agreement”), among
the Borrower, Bank of Montreal, as Administrative Agent, the lenders (the “Lenders”) which are
or become a party thereto and Capital One, N.A., as Syndication Agent, the
undersigned represents and warrants as follows (each capitalized term used
herein having the same meaning given to it in the Agreement unless otherwise
specified), to my knowledge after reasonable investigation:
(a) The
representations and warranties of the Borrower contained in ARTICLE VII of the
Agreement and in the Loan Documents and otherwise made in writing by or on
behalf of the Borrower pursuant to the Agreement and the Loan Documents were
true and correct when made, and are repeated at and as of the time of delivery
hereof and are true and correct in all material respects at and as of the time
of delivery hereof, except to the extent such representations and warranties are
expressly limited to an earlier date or the Required Lenders have expressly
consented in writing to the contrary.
(b) The
Borrower has performed and complied with all agreements and conditions contained
in the Agreement and in the Loan Documents required to be performed or complied
with by it prior to or at the time of delivery hereof [or specify default and
describe].
(c) Since
[____________], 200[__], no change has occurred, either in any case or in the
aggregate, in the condition, financial or otherwise, of the Borrower or any
Subsidiary which could reasonably be expected to have a Material Adverse Effect
[or specify event].
(d) There
exists no Default or Event of Default [or specify Default and
describe].
(e) Attached
hereto as Exhibit A are
the detailed computations necessary to determine whether the Borrower is in
compliance with Section 8.14 and
Section 9.01 as
of the end of the [fiscal quarter][fiscal year] ending
[____________].
EXECUTED
AND DELIVERED this [______] day of [____________], 200[__].
|
MAGNUM
HUNTER RESOURCES CORPORATION,
a
Delaware corporation
|
|
| By: ____________________________________ | |
| Name: ____________________________________ | |
| Title: ____________________________________ |
Exhibit
D-1
FINANCIAL
COVENANT CALCULATION WORKSHEET
($ in
000’s)
|
Pro
forma
|
Covenant
|
|
|
Calculation
|
Requirement
|
|
|
Current
Ratio
|
x
|
>1.0
to 1.0
|
|
Interest
Coverage Ratio
|
x
|
>2.5
to 1.0
|
|
Leverage
Ratio
|
x
|
<4.5
to 1.0 (2)
|
|
Current
Ratio: calculated as of the fiscal quarter ended
______________, 20__
|
||
|
(i) consolidated
current assets (including the unused amount of the total Commitments, but
excluding non-cash assets under FAS 133)
|
||
|
To
|
||
|
(ii) consolidated
current liabilities (excluding non-cash obligations under FAS
133).
|
||
|
Interest Coverage
Ratio: calculated as of the fiscal quarter ended
______________, 20__
|
||
|
(i) EBITDAX
for the four quarter period then ended
|
||
|
To
|
||
|
(ii) actual
cash interest paid during such period.
|
||
|
Leverage
Ratio:
|
||
|
(i) total
Debt as of such date
|
||
|
To
|
||
|
(ii) EBITDAX
for the four quarter period then ended.
|
[Analysis
of Section 8.14
requirements if applicable]
______________________
|
(2)
|
Covenant
Requirement is <4.0 to 1.0 commencing with the quarter ended December
31, 2010 and thereafter.
|
Exhibit
D-2
EXHIBIT
F-1
FORM
OF SECURITY AGREEMENT
Exhibit
F-1-1
EXHIBIT
F-2
FORM
OF GUARANTY
Exhibit
F-2-1
EXHIBIT
G
FORM
OF ASSIGNMENT AND ASSUMPTION
Reference
is made to the Amended and Restated Credit Agreement, dated as of February 12,
2010 (as amended, restated, supplemented or otherwise modified from time to time
and in effect on the date hereof, the “Credit Agreement”),
among Magnum Hunter Resources Corporation, the Lenders named therein, Bank of
Montreal, as Administrative Agent for the Lenders and Capital One, N.A., as
Syndication Agent. Capitalized terms defined in the Credit Agreement
are used herein with the same meanings.
The
Assignor named below hereby sells and assigns, without recourse, to the Assignee
named below, and the Assignee hereby purchases and assumes, without recourse,
from the Assignor, effective as of the Assignment Date set forth on the reverse
hereof, the interests set forth on the reverse hereof (the “Assigned Interest”)
in the Assignor’s rights and obligations under the Credit Agreement, including,
without limitation, the interests set forth on the reverse hereof in the
Commitment of the Assignor on the Assignment Date and Loans owing to the
Assignor which are outstanding on the Assignment Date, together with the
participations in Letters of Credit and LC Disbursements held by the Assignor on
the Assignment Date, but excluding accrued interest and fees to and excluding
the Assignment Date. The Assignee hereby acknowledges receipt of a
copy of the Credit Agreement. From and after the Assignment Date (i)
the Assignee shall be a party to and be bound by the provisions of the Credit
Agreement and, to the extent of the Assigned Interest, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of
the Assigned Interest, relinquish its rights and be released from its
obligations under the Credit Agreement.
This
Assignment and Assumption is being delivered to the Administrative Agent (with a
copy to the Borrower) together with (i) if the Assignee is a Foreign Lender, any
documentation required to be delivered by the Assignee pursuant to Section 5.03 of the
Credit Agreement, duly completed and executed by the Assignee, and (ii) if the
Assignee is not already a Lender under the Credit Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent, duly completed
by the Assignee. The [Assignee/Assignor] shall pay the fee payable to
the Administrative Agent pursuant to Section 12.04(b) of
the Credit Agreement.
This
Assignment and Assumption shall be governed by and construed in accordance with
the laws of the State of New York.
Date of
Assignment:
Legal
Name of Assignor:
Legal
Name of Assignee:
Assignee’s
Address for Notices:
Effective
Date of Assignment (“Assignment
Date”):
Exhibit
G-1
|
Facility
|
Principal
Amount Assigned
|
Percentage
Assigned of
Facility/Commitment
(set
forth,
to at least 8 decimals, as
a
percentage of the Facility
and
the aggregate
Commitments
of all Lenders
thereunder)
|
|
Commitment
Assigned:
|
$
|
%
|
|
Loans:
|
The terms
set forth above and on the reverse side hereof are hereby agreed
to:
| [Name of Assignor], as Assignor | |
| By: _______________________________ | |
| Name: _______________________________ | |
| Title: _______________________________ | |
| [Name of Assignee], as Assignee | |
| By: _______________________________ | |
| Name: _______________________________ | |
| Title: _______________________________ |
Exhibit
G-2
The
undersigned hereby consent to the within assignment: (3)
|
MAGNUM
HUNTER RESOURCES CORPORATION,
a
Delaware corporation
|
BANK
OF MONTREAL
|
|
By:
_____________________________
Name: _____________________________
Title:
_____________________________
|
By:
_____________________________
Name: _____________________________
Title:
_____________________________
|
______________________
|
(3)
|
Consents
to be included to the extent required by Section 12.04(b) of the Credit
Agreement.
|
Exhibit
G-3
