MASTER ASSIGNMENT, AGREEMENT, AMENDMENT NO. 1 AND WAIVER TO CREDIT AGREEMENT AND RELATED DOCUMENTS

Exhibit 10.1A

Execution Version

MASTER ASSIGNMENT, AGREEMENT, AMENDMENT NO. 1 AND WAIVER

TO CREDIT AGREEMENT AND RELATED DOCUMENTS

This Master Assignment, Agreement, and Amendment No. 1 and Waiver to Credit Agreement and Related Documents (this “Agreement”) dated as of November 30, 2012 (the “Effective Date”) is among ▇▇▇▇▇▇▇▇ Corporation, a Delaware corporation (the “Borrower”), the subsidiaries of the Borrower party hereto (the “Guarantors”), ▇▇▇▇▇ Fargo Bank, National Association, as administrative agent (in such capacity, the “Administrative Agent”), issuing lender (in such capacity, the “Issuing Lender”) and swing line lender (in such capacity, the “Swing Line Lender”), Bank of America, N.A., U.S. Bank National Association, and TriState Capital Bank (each in its individual capacity, a “New Lender”), and each other party hereto that is a Lender under the Credit Agreement referred to below (each in its individual capacity, an “Existing Lender”).

INTRODUCTION

A. The Borrower, the Administrative Agent, the Issuing Lender, the Swing Line Lender and the Existing Lenders are parties to that certain Credit Agreement (the “Credit Agreement”) dated as of April 10, 2012 (the “Closing Date”).

B. The Borrower and the other Credit Parties are party to the Pledge and Security Agreement dated as of April 10, 2012, as supplemented by the Supplement No. 1 to Pledge and Security Agreement dated as of September 13, 2012 among the Credit Parties and the Administrative Agent (as supplemented, the “Pledge and Security Agreement”).

C. The Existing Lenders wish to assign certain percentages of their rights and obligations under the Credit Agreement as Lenders to the New Lenders pursuant to the terms hereof.

D. The Borrower has requested that the Lenders agree to, after the assignment and acceptance of the rights as set forth herein has been made effective, (i) increase the aggregate Commitments under the Credit Agreement to $325,000,000, (ii) amend certain provisions of the Credit Agreement as set forth below, and (iii) waive certain Existing Defaults (as defined below).

E. The Borrower has entered into the Agreement and Plan of Merger dated as of September 3, 2012 (the “Acquisition Agreement”) among the Borrower, Rough Rider Acquisition, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Borrower (the “Buyer”), Badlands Energy, LLC, a North Dakota limited liability company and subsequently reorganized as Badlands Power Fuels, LLC, a Delaware limited liability company (“Rough Rider”), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual residing in the state of North Dakota (the “Seller”), pursuant to which the Buyer will merge with and into Rough Rider, with the Buyer as the surviving entity (the “Rough Rider Acquisition”).

F. Rough Rider owns 100% of the Equity Interests in each of Badlands Power Fuels, LLC, a North Dakota limited liability company, Landtech Enterprises, L.L.C., a North Dakota limited liability company, and Badlands Leasing, LLC, a North Dakota limited liability company (each an “Acquired Subsidiary”, and together with Rough Rider, collectively, the “New Grantors”).

G. In anticipation of the Rough Rider Acquisition, Rough Rider Escrow, Inc., a Delaware corporation and wholly-owned subsidiary of the Borrower (“RRE”), issued on November 5, 2012 unsecured high-yield debt in a principal amount of $150,000,000 (“Stage I Notes”). On the Effective Date, RRE will merge with and into the Borrower, with the Borrower as the surviving company, and the Borrower will assume all obligations under RRE’s previously described debt issuance and redeem and exchange the Stage I Notes for new notes (the “Stage II Notes”), which will have the same rights and obligations under and be governed by the Indenture in connection with the April 2012 Bond Issuance.

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THEREFORE, the Borrower, the Administrative Agent, the Issuing Lender, the Swing Line Lender and the other parties hereto hereby agree as follows:

Section 1. Defined Terms; Other Definitional Provisions. As used in this Agreement, each of the terms defined in the opening paragraph and the Recitals above shall have the meanings assigned to such terms therein. Each term defined in the Credit Agreement and used herein without definition shall have the meaning assigned to such term in the Credit Agreement, unless expressly provided to the contrary. Article, Section, Schedule, and Exhibit references are to Articles and Sections of and Schedules and Exhibits to this Agreement, unless otherwise specified. The words “hereof”, “herein”, and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “including” means “including, without limitation,”. Paragraph headings have been inserted in this Agreement as a matter of convenience for reference only and it is agreed that such paragraph headings are not a part of this Agreement and shall not be used in the interpretation of any provision of this Agreement.

Section 2. Waiver.

(a) The Borrower acknowledges the Defaults or Events of Default under the Credit Documents set forth on Annex IV hereto, as existing on the Effective Date (the “Existing Defaults”).

(b) Subject to the terms and conditions of this Agreement, the Lenders hereby waive the Existing Defaults. The waiver by the Lenders described in this Section 2 is limited to the Existing Defaults and shall not be construed to be a consent to, or a permanent waiver of, or noncompliance with any terms, provisions, covenants, warranties or agreements contained in the Credit Agreement or the other Credit Documents. The Lenders expressly reserve the right to exercise any rights and remedies available to them in connection with any present or future defaults with respect to the Credit Agreement or any other provision of any Credit Document other than the Existing Defaults. The description herein of the Existing Defaults is based upon the information provided to the Lenders on or prior to the date hereof and shall not be deemed to exclude the existence of any other Defaults or Events of Default. The failure of the Lenders to give notice to any Credit Party of any such other Defaults or Events of Default is not intended to be nor shall be a waiver thereof. Each Credit Party hereby agrees and acknowledges that the Lenders require and will require strict performance by the Credit Parties of all of their respective obligations, agreements and covenants contained in the Credit Agreement and the other Credit Documents, and no inaction or action by the Administrative Agent, Issuing Lenders or any Lender regarding any Default or Event of Default (including but not limited to the Existing Defaults) is intended to be or shall be a waiver thereof other than the waiver of the Existing Defaults expressly provided for in Section 2 of this Agreement. Other than the waiver of the Existing Defaults expressly provided for in Section 2 of this Agreement, each Credit Party hereby also agrees and acknowledges that no course of dealing and no delay in exercising any right, power, or remedy conferred to any Lender in the Credit Agreement or in any other Credit Documents or now or hereafter existing at law, in equity, by statute, or otherwise shall operate as a waiver of or otherwise prejudice any such right, power, or remedy (collectively, the “Lender Rights”). For the avoidance of doubt, each Credit Party also agrees and acknowledges that neither the waiver provided in this Agreement nor any other waiver provided by the Lenders prior to the date hereof shall operate as a waiver of or otherwise prejudice any of the Lender Rights other than the waiver of the Existing Defaults expressly provided for in Section 2 of this Agreement.

 

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Section 3. Master Assignment.

(a) Assignments. For an agreed consideration, each Existing Lender hereby irrevocably and severally, sells and assigns to each New Lender, without recourse and without representation or warranty other than as expressly provided herein, and each New Lender hereby irrevocably and severally, purchases and assumes from the Existing Lenders subject to the terms hereof and the Credit Agreement, (i) such percentage in and to all of the Existing Lenders’ respective rights and obligations under the Credit Agreement as a Lender (including, without limitation, such percentage interest in the Advances owing to the applicable Existing Lender and the applicable Existing Lender’s risk participation and funded participation in Letter of Credit Obligations existing as of the date hereof (prior to the effectiveness of this Agreement)) that would result in the Existing Lenders and the New Lenders having the respective Commitments set forth in Annex I attached hereto, and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of each Existing Lender (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other Credit Document or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above. Each such sale and assignment is without recourse to any Existing Lender and, except as expressly provided in Section 3(b), without representation or warranty by any Existing Lender. After giving effect to the sales and assignments pursuant to this Section 3 and after giving effect to the increase in the Commitments effected under Section 4 below, each Lender’s (including each New Lender’s) respective Commitments will be as set forth under its name on Schedule II attached hereto.

(b) Representations and Warranties of Existing Lenders. Each Existing Lender (i) represents and warrants that (A) it is the legal and beneficial owner of the interest that it is assigning under clause (a) above, (B) such interest is free and clear of any lien, encumbrance or other adverse claim and (C) it has full power and authority, and has taken all action necessary, to execute and deliver this Agreement and to consummate the transactions contemplated hereby; and (ii) assumes no responsibility with respect to (A) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Credit Document, (B) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Documents or any collateral thereunder, (C) the financial condition of the Borrower, its Subsidiaries or any other Person obligated in respect of any Credit Document or (D) the performance or observance by the Borrower, its Subsidiaries or any other Person of any of its obligations under any Credit Document.

(c) Representations and Warranties of New Lender. Each New Lender (i) represents and warrants that (A) it has full power and authority, and has taken all action necessary, to execute and deliver this Agreement and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (B) it meets all the requirements to be an New Lender under Section 9.7 of the Credit Agreement (subject to such consents, if any, as may be required under Section 9.7 of the Credit Agreement), (C) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the interest assigned to it hereunder, shall have the obligations of a Lender thereunder, (D) it is sophisticated with respect to decisions to acquire assets of the type represented by the interest assigned to it hereunder and either it, or the person exercising discretion in making its decision to acquire the interest assigned to it hereunder, is experienced in acquiring assets of such type, (E) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 5.2 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Agreement and to purchase the interest assigned to it hereunder, and (F) it has, independently and without reliance upon the Administrative Agent or any Existing 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 to purchase the interest assigned to it

 

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hereunder; and (ii) agrees that (A) it will, independently and without reliance on the Administrative Agent or any Existing Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Documents, and (B) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Documents are required to be performed by it as a Lender.

(d) Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the interests assigned hereunder (including payments of principal, interest, fees and other amounts) to the relevant Existing Lender or New Lender whether such amounts have accrued prior to, on or after the Effective Date. The Existing Lenders and the New Lenders shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves.

(e) Breakage Costs. If, as a result of the assignments effected under this Section 3, any Lender incurs any losses, out-of-pocket costs or expenses as a result of any payment of Eurodollar Advances prior to the last day of the Interest Period applicable thereto (whether by the Borrower or by reallocation of the outstandings of the Eurodollar Advances under the Credit Agreement to effect the assignments provided herein) and such Lender makes a request for compensation, the Borrower shall, within 10 days of any written demand sent by such Lender to the Borrower through the Administrative Agent, pay to the Administrative Agent for the account of such Lender any amounts required to compensate such Lender for such losses, out-of-pocket costs or expenses incurred as a result of such payment, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender to fund or maintain such Advance.

(f) Consents. The Administrative Agent and the Borrower each hereby consents to the assignments made under this Section 3 to the New Lenders.

Section 4. Amendments to Credit Agreement and Pledge and Security Agreement.

(a) The Credit Agreement is amended to read in its entirety as set forth on Annex II.

(b) After giving effect to the assignments and acceptances set forth in Section 3 above, (i) each Existing Lender’s and each New Lender’s respective Commitments are hereby increased to the amount set forth opposite its name on Schedule II attached to this Agreement, and (ii) Schedule II to the Credit Agreement is hereby replaced in its entirety with Schedule II attached hereto.

(c) Section 1.1 of the Pledge and Security Agreement is amended to revise the definitions of “Excluded Property” and “Pledged Interests” to read in their entirety as follows:

“Excluded Property” means, with respect to each Grantor, including any Person that becomes a Grantor after the date hereof as contemplated by Section 7.10, (a) all Excluded Foreign Stock, (b) all Excluded Accounts, (c) all property which is subject to a Lien of the type described in Section 6.2(e) of the Credit Agreement pursuant to documents which prohibit such Grantor from granting any other Liens in such property, (d) all Excluded Contracts, (e) all Excluded Governmental Approvals, (f) all Excluded Trademark Collateral, and (g) all aircraft acquired by a Grantor in connection with the Rough Rider Acquisition, (h) all proceeds and products of any and all of the foregoing excluded property described in clauses (a) through (g) above only to the extent such proceeds and products would constitute property or assets of the type described in clauses (a) through (g) above.

 

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“Pledged Interests” means all Equity Interests or other ownership interests of any Person owned by any Grantor, including Equity Interests or other ownership interests of any Pledged Interests Issuer described in Item A of Schedule I hereto; all registrations, certificates, articles, by-laws, regulations, limited liability company agreements or constitutive agreements governing or representing any such interests; all options and other rights, contractual or otherwise, at any time existing with respect to such interests, as such interests are amended, modified, or supplemented from time to time, and together with any interests in any Person taken in extension or renewal thereof or substitution therefor.

(d) Section 3.2 of the Pledge and Security Agreement is amended to read in its entirety as follows:

“SECTION 3.2. Ownership, No Liens, etc. Such Grantor is the legal and beneficial owner of, and has good title to (and has full right and authority to pledge, grant and assign) the Collateral, free and clear of all Liens, except for any Lien that is a Permitted Lien. No effective UCC financing statement or other filing similar in effect covering all or any part of the Collateral is on file in any recording office, except (i) those filed in favor of the Administrative Agent relating to this Security Agreement, (ii) Permitted Liens or (iii) as of the Effective Date, those financing statements which the Administrative Agent or any Grantor has been authorized to terminate by the secured party of record with respect to such UCC financing statement on the Effective Date. This Security Agreement creates a valid security interest in the Collateral, securing the payment of the Secured Obligations, and, except for (A) the proper filing of the applicable financing statements with the filing offices located in each Grantor’s location, as listed on Item A-1 of Schedule II attached hereto and (B) such other actions which are not required pursuant to the terms hereof or the terms of the other Credit Documents or for which arrangements have been made to be completed at a later date, all filings and other actions necessary to perfect such security interest in the Collateral have been duly taken and such security interest shall be a first priority security interest (subject to Permitted Liens).”

(e) Section 3.4(f) of the Pledge and Security Agreement is amended by replacing “$250,000” with “$500,000”.

(f) Section 3.4(g) of the Pledge and Security Agreement is amended by replacing “$100,000” with “$200,000” and replacing “$250,000” with “$500,000”.

(g) Section 3.5 of the Pledge and Security Agreement is amended to read in its entirety as follows:

“SECTION 3.5. Possession of Inventory, Control; etc. Such Grantor (a) has exclusive possession and control, subject to Permitted Liens, of the Equipment and Inventory except as permitted under the Credit Agreement, (b) is the sole entitlement holder of its Security Entitlements, and (c) no Person other than the Administrative Agent has “control” or “possession” of, or any other interest in, any of its Deposit Accounts, Securities Accounts, Commodity Accounts, Commodity Contracts or Security Entitlements constituting Investment Property or any other securities or property credited thereto except as permitted pursuant to this Security Agreement.”

 

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(h) Section 3.6of the Pledge and Security Agreement is amended by replacing “$200,000” with “$400,000”.

(i) Section 4.1(d) of the Pledge and Security Agreement is amended by replacing “$200,000” with “$400,000”.

(j) Section 4.3(a) of the Pledge and Security Agreement is amended to read in its entirety as follows:

“(a) Each Grantor shall have the right to collect all Accounts so long as no Event of Default shall have occurred and be continuing. Except as provided in Section 4.3(b) and 4.3(e), no Grantor shall be obligated to enter into a Control Agreement with respect to any Deposit Accounts.”

(k) Section 4.3(b) of the Pledge and Security Agreement is amended to read in its entirety as follows:

“(b) Upon (i) the occurrence and continuance of an Event of Default and (ii) the delivery of notice by the Administrative Agent to each Grantor, all Proceeds of Collateral received by any Grantor shall be delivered in kind to the Administrative Agent for deposit in a Deposit Account of such Grantor (A) maintained with the Administrative Agent or (B) maintained at a depositary bank other than the Administrative Agent to which such Grantor, the Administrative Agent and the depositary bank have entered into a Control Agreement in form and substance acceptable to the Administrative Agent in its sole discretion providing that the depositary bank will comply with the instructions originated by the Administrative Agent directing disposition of the funds in the account without further consent by such Grantor (any such Deposit Accounts, together with any other accounts pursuant to which any portion of the Collateral is deposited with the Administrative Agent, a “Collateral Account,” and collectively, the “Collateral Accounts”), and such Grantor shall not commingle any such Proceeds, and shall hold separate and apart from all other property, all such Proceeds in express trust for the benefit of the Administrative Agent until delivery thereof is made to the Administrative Agent.”

(l) Section 4.3(d) of the Pledge and Security Agreement is amended to read in its entirety as follows:

“(d) With respect to each of the Collateral Accounts, it is hereby confirmed and agreed that (i) deposits in such Collateral Account are subject to a security interest as contemplated hereby, and (ii) after the occurrence of a Default, upon the request of the Administrative Agent, the Borrower shall, and shall cause its Restricted Subsidiaries to, subject such Collateral Accounts to a Control Agreement in form and substance satisfactory to the Administrative Agent.”

(m) Section 4.7(a) of the Pledge and Security Agreement is amended by replacing “$100,000” with “$200,000” and replacing “$250,000” with “$500,000”.

(n) Section 4.8 of the Pledge and Security Agreement is amended by replacing “$100,000” with “$200,000” and replacing “$250,000” with “$500,000”.

 

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(o) Section 4.9 of the Pledge and Security Agreement is amended by replacing “$100,000” with “$200,000”.

(p) Section 4.12 of the Pledge and Security Agreement is amended in its entirety to read “Reserved”.

(q) Schedules I, II, and III to the Pledge and Security Agreement are replaced in their entirety with the Schedule I to Pledge and Security Agreement, Schedule II to Pledge and Security Agreement, and Schedule III to Pledge and Security Agreement attached hereto.

Section 5. Borrower’s Representations and Warranties. Borrower represents and warrants that: (a) the representations and warranties contained in the Credit Agreement, as amended hereby, and after giving effect to any amendments to the schedules thereto set forth herein, and the representations and warranties contained in the other Credit Documents, as amended hereby, and after giving effect to any amendments to the schedules thereto set forth herein, are true and correct in all material respects on and as of the Effective Date as if made on as and as of such date except to the extent that any such representation or warranty expressly relates solely to an earlier date, in which case such representation or warranty is true and correct in all material respects as of such earlier date (except that such materiality qualifiers shall not be applicable to the extent any representations and warranties are already qualified or modified by materiality in the text thereof); (b) no Default has occurred and is continuing; (c) the execution, delivery and performance of this Agreement are within the corporate power and authority of the Borrower and have been duly authorized by appropriate corporate action and proceedings; (d) this Agreement constitutes the legal, valid, and binding obligation of Borrower enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and general principles of equity; (e) there are no governmental or other third party consents, licenses and approvals required in connection with the execution, delivery, performance, validity and enforceability of this Agreement, other than those which have been obtained or made; and (f) the Liens under the Security Documents are valid and subsisting and secure the Borrower’s obligations under the Credit Documents.

Section 6. Guarantors Representations and Warranties. Each Guarantor represents and warrants that: (a) after giving effect to this Agreement, the representations and warranties contained in the Guaranty and the representations and warranties contained in the other Credit Documents to which such Guarantor is a party are true and correct in all material respects on and as of the Effective Date as if made on as and as of such date except to the extent that any such representation or warranty expressly relates solely to an earlier date, in which case such representation or warranty is true and correct in all material respects as of such earlier date (except that such materiality qualifiers shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof); (b) after giving effect to this Agreement, no Default has occurred and is continuing under any Credit Document to which such Guarantor is a party; (c) the execution, delivery and performance of this Agreement are within the corporate, limited liability company, or partnership power and authority of such Guarantor and have been duly authorized by appropriate corporate, limited liability company, or partnership action and proceedings; (d) this Agreement constitutes the legal, valid, and binding obligation of such Guarantor enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and general principles of equity; (e) there are no governmental or other third party consents, licenses and approvals required in connection with the execution, delivery, performance, validity and enforceability of this Agreement, other than those which have been obtained or made; and (f) the Liens under the Security Documents to which such Guarantor is a party are valid and subsisting and secure such Guarantor’s and the Borrower’s obligations under the Credit Documents.

 

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Section 7. Conditions to Effectiveness. This Agreement shall become effective on the Effective Date and enforceable against the parties hereto upon the occurrence of the following conditions precedent:

(a) Documentation. The Administrative Agent shall have received the following, duly executed by all the parties thereto, in form and substance reasonably satisfactory to the Administrative Agent:

 

(i.)

this Agreement and new Notes reflecting the revised Commitments set forth on Schedule II attached hereto;

 

(ii.)

an engagement letter among the Borrower, ▇▇▇▇▇ Fargo, ▇▇▇▇▇ Fargo Securities, ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, Bank of America, N.A., Citizens Bank of Pennsylvania and RBS Citizens, N.A.;

 

(iii.)

a new fee letter among the Borrower, ▇▇▇▇▇ Fargo and ▇▇▇▇▇ Fargo Securities, LLC;

 

(iv.)

the Supplement No. 2 to Pledge and Security Agreement and the Supplement No. 2 to Guaranty;

 

(v.)

certificates of insurance naming the Administrative Agent as lender’s loss payee with respect to property insurance, or additional insured with respect to liability insurance, and covering the New Guarantors’ Properties with such insurance carriers, for such amounts and covering such risks that are required hereunder;

 

(vi.)

a certificate from a Responsible Officer of the Borrower dated as of the First Amendment Effective Date stating that as of such date (A) after giving effect to this Agreement, all representations and warranties of the Borrower set forth in this Agreement are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), except that any representation and warranty which by its terms is made as of a specified date shall be required to be true and correct only as of such specified date, (B) no Default has occurred and is continuing; and (C) all conditions precedent set forth in this Section 7 have been met or expressly waived in writing;

 

(vii.)

a secretary’s certificate from the Borrower and each Guarantor (other than the New Grantors) certifying (A) updated incumbencies of authorized officers, (B) authorizing resolutions for this Agreement and the increase in the Commitments and (C) either updated organizational documents or a certification that the organizational documents delivered on the Closing Date or prior to the date hereof in connection with a previous amendment or supplement to the Credit Agreement, the Security Agreement or the Guaranty have not been amended and are in full force and effect;

 

(viii.)

a secretary’s certificate from each New Grantor certifying such Person’s (A) officers’ incumbency, (B) authorizing resolutions, (C) organizational documents, and (D) governmental approvals, if any, with respect to the Credit Documents to which such Person is a party;

 

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(ix.)

copies, certified as true, accurate and complete, by a Responsible Officer of the Borrower, of all of the Rough Rider Acquisition Documents requested by the Administrative Agent and all exhibits and schedules thereto, together with all amendments, modifications or waivers thereto in effect as of the date of this Agreement;

 

(x.)

certificates of good standing and existence for each Credit Party (including the New Grantors), in each state in which each such Person is organized, which certificate shall be dated a date not earlier than 30 days prior to Effective Date;

 

(xi.)

a legal opinion in form and substance reasonably acceptable to the Administrative Agent of (A) ▇▇▇▇ ▇▇▇▇▇ LLP as outside counsel to the Credit Parties (including the New Grantors) and (B) appropriate local counsel to the Credit Parties in the state of North Dakota; and

 

(xii.)

such other documents, governmental certificates, agreements, and lien searches as the Administrative Agent or any Lender may reasonably request.

(b) Receipt of Notes Proceeds. The Borrower shall have received the cash proceeds from the November ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇.

(c) Pro Forma Compliance Certificate. The Administrative Agent shall have received a compliance certificate in form reasonably acceptable to the Administrative Agent and executed by the chief executive officer, chief financial officer, chief administrative officer or chief legal officer of the Borrower and reflecting (i) a First Amendment Leverage Ratio of no greater than 2.75 to 1.00, and (ii) the calculations for the Maximum Total Debt Leverage Ratio, the Maximum Senior Secured Debt Leverage Ratio, and the Minimum Interest Coverage Ratio as of the fiscal quarter ended September 30, 2012 after giving pro forma effect to the Rough Rider Acquisition, the November 2012 Bond Issuance and any other related financings or transactions being consummated on the Effective Date.

(d) Real Property Matters. In order to create in favor of the Administrative Agent, for the benefit of the holders of the Secured Obligations, a valid and, subject to any filing and/or recording referred to herein, enforceable Lien on, and security interest in, all Material Real Property (including the Pipeline) that is set forth on Annex III attached hereto that is prior and superior in right to any other Lien (other than Permitted Liens), the Administrative Agent (with copies sufficient for each Lender) shall have received from the Credit Parties with respect to each Material Real Property (including the Pipeline) that is set forth on Annex III attached hereto, fully executed Mortgages covering such Material Real Property (including the Pipeline), together with (i) a flood determination certificate issued by the appropriate Governmental Authority or third party indicating whether such Material Real Property is designated as a “flood hazard area”, (ii) if such Material Real Property is designated to be in a “flood hazard area”, evidence of flood insurance on such Material Real Property obtained by the applicable Credit Party in such total amount as required by Regulation H of the Federal Reserve Board, and all official rulings and interpretations thereunder or thereof, and otherwise in compliance with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973, (iii) (A) Title Policy with respect to such Material Real Property (other than the Pipeline), in amounts not less than the fair market value of such Material Real Property, together with a title report issued by a title company with respect thereto and copies of all recorded documents listed as exceptions to title or otherwise referred to therein, each in form and substance reasonably satisfactory to the Administrative Agent, Credit Party hereby agreeing to provide the applicable title companies with all necessary consents, authorizations and other information necessary for the title company to issue the applicable Title Policies in a form insuring the applicable mortgage as a first lien, encumbering the applicable portion of such Material Real Property, subject to no

 

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Liens or encumbrances other than Permitted Liens, and (B) evidence reasonably satisfactory to the Administrative Agent that such Credit Party has paid to the title company or to the appropriate Governmental Authorities all expenses and premiums of the title company and all other sums required in connection with the issuance of each Title Policy and all recording and stamp taxes (including mortgage recording and intangible taxes) payable in connection with recording the Mortgage for such Material Real Property in the appropriate real estate records; (iv) if an exception to the Title Policy with respect to a Material Real Property (other than the Pipeline) would arise without such ALTA or TLTA surveys, ALTA or TLTA surveys of such Material Real Property; (v) an opinion of counsel (which counsel shall be reasonably satisfactory to the Administrative Agent) in each state in which such Material Real Property is located with respect to the enforceability of the form(s) of Mortgages to be recorded in such state, the recording of such Mortgage, and such other matters as the Administrative Agent may reasonably request, in each case, in form and substance reasonably satisfactory to the Administrative Agent; (E) reports and other reasonable information, in form, scope and substance reasonably satisfactory to the Administrative Agent, regarding environmental matters relating to such Material Real Property; and (vi) all consents, including, but not limited to, any landlord consents all in form and substance reasonably satisfactory to the Administrative Agent, and other requirements necessary for the Credit Parties to comply with the provisions set forth in this Section. Notwithstanding the foregoing, Material Real Property acquired in the Rough Rider Acquisition shall be excluded from the foregoing condition precedent.

(e) Rough Rider Acquisition. All conditions to the consummation and effectiveness of the Rough Rider Acquisition (other than the payment of the purchase price) shall have been satisfied or waived. Furthermore, Administrative Agent shall have received (i) payoff letters, if any, in form and substance reasonably satisfactory to Administrative Agent covering all debt secured by liens (other than those which would constitute Permitted Liens hereunder) that encumber any of the properties being purchased by Borrower under the Rough Rider Acquisition and (ii) UCC financing statement terminations, deed of trust and mortgage lien releases and other evidence reasonably required by Administrative Agent shall have been delivered to the Administrative Agent such that, subject only to appropriate filing or recording thereof, all liens (other than those which would constitute Permitted Liens hereunder) encumbering the properties to be acquired by Borrower and its Restricted Subsidiaries have been terminated or released.

(f) Due Diligence. The Administrative Agent shall have completed and be satisfied in its sole discretion with the Acquisition Agreement, all documents ancillary to the Rough Rider Acquisition, and the corporate (or other organizational), environmental, tax and financial due diligence of the New Grantors.

(g) Payment of Fees. The Borrower shall have paid the fees and expenses required to be paid as of or on the Effective Date by Section 9.1 of the Credit Agreement or any other provision of a Credit Document, including the Fee Letters (as such term is amended hereby).

(h) Other Proceedings and Contractual Restrictions. No action, suit, investigation or other proceeding (including, without limitation, the enactment or promulgation of a statute or rule) by or before any arbitrator or any Governmental Authority shall be threatened or pending and no preliminary or permanent injunction or order by a state or federal court shall have been entered, and no contractual or other restriction shall exist, in connection with this Agreement.

(i) No Default. No Default shall have occurred and be continuing.

 

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Without limiting the generality of the provisions of Article 8 of the Credit Agreement, for determining compliance with the conditions specified above, each party hereto shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required in this Section 7 to be consented to or approved by or acceptable or satisfactory to such party unless an officer of the Administrative Agent responsible for the transactions contemplated by the Credit Documents shall have received written notice from such party prior to the Borrowings occurring on the First Amendment Effective Date specifying its objection thereto and, if such party is a Lender, such Lender shall not have made available to the Administrative Agent such Lender’s ratable portion of such Borrowings.

Section 8. Acknowledgments and Agreements.

(a) Borrower acknowledges that on the date hereof all outstanding Obligations are payable in accordance with their terms and Borrower waives any defense, offset, counterclaim or recoupment, in each case existing on the date hereof, with respect to such Obligations. Borrower, each Guarantor, Administrative Agent, Issuing Lender and each other party hereto does hereby adopt, ratify, and confirm the Credit Agreement, as amended hereby, and acknowledges and agrees that the Credit Agreement, as amended hereby, is and remains in full force and effect, and the Borrower and the Guarantors acknowledge and agree that their respective liabilities and obligations under the Credit Agreement, as amended hereby, and the Guaranty, are not impaired in any respect by this Agreement.

(b) The Administrative Agent, the Collateral Agent and the Lenders hereby expressly reserve all of their rights, remedies, and claims under the Credit Documents. Except as set forth in Section 2, nothing in this Agreement shall constitute a waiver or relinquishment of (i) any Default or Event of Default under any of the Credit Documents, (ii) any of the agreements, terms or conditions contained in any of the Credit Documents, (iii) any rights or remedies of the Administrative Agent or any Lender with respect to the Credit Documents, or (iv) the rights of the Administrative Agent or any Lender to collect the full amounts owing to them under the Credit Documents.

(c) From and after the Effective Date, all references to the Credit Agreement and the Credit Documents shall mean the Credit Agreement and such Credit Documents as amended by this Agreement. This Agreement is a Credit Document for the purposes of the provisions of the other Credit Documents. Without limiting the foregoing, any breach of representations, warranties, and covenants under this Agreement shall be a Default or Event of Default, as applicable, under the Credit Agreement.

Section 9. Reaffirmation of the Guaranty. Each Guarantor hereby ratifies, confirms, acknowledges and agrees that its obligations under the Guaranty are in full force and effect and that such Guarantor continues to unconditionally and irrevocably guarantee the full and punctual payment, when due, whether at stated maturity or earlier by acceleration or otherwise, all of the Guaranteed Obligations (as defined in the Guaranty), as such Guaranteed Obligations may have been amended by this Agreement, and its execution and delivery of this Agreement does not indicate or establish an approval or consent requirement by such Guarantor under the Guaranty in connection with the execution and delivery of amendments, consents or waivers to the Credit Agreement, the Notes or any of the other Credit Documents.

Section 10. Reaffirmation of the Security Documents. Each Credit Party (including the New Grantors) hereby ratifies, confirms, acknowledges and agrees that its obligations under the Security Documents to which it is a party are in full force and effect and that such Security Documents as amended hereby continue to secure the full and punctual payment, when due, whether at stated maturity or earlier by acceleration or otherwise, all of the Secured Obligations, as such Secured Obligations may have been amended by this Agreement, and its execution and delivery of this Agreement does not indicate or establish an approval or consent requirement by such Credit Party under any Security Document in connection with the execution and delivery of amendments, consents or waivers to the Credit Agreement, the Notes or any of the other Credit Documents.

 

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Section 11. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original and all of which, taken together, constitute a single instrument. This Agreement may be executed by facsimile signature and all such signatures shall be effective as originals.

Section 12. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted pursuant to the Credit Agreement.

Section 13. Invalidity. In the event that any one or more of the provisions contained in this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement.

Section 14. Governing Law. This Agreement shall be deemed to be a contract made under and shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts of laws principles (other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York).

Section 15. Entire Agreement. THIS AGREEMENT, THE CREDIT AGREEMENT AS AMENDED BY THIS AGREEMENT, THE NOTES, AND THE OTHER CREDIT DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[The remainder of this page has been left blank intentionally.]

 

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EXECUTED to be effective as of the date first above written.

 

 

Signature Page to Master Assignment, Agreement,

Amendment No. 1 and Waiver to Credit Agreement and Related Documents

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Signature Page to Master Assignment, Agreement,

Amendment No. 1 and Waiver to Credit Agreement and Related Documents

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Signature Page to Master Assignment, Agreement,

Amendment No. 1 and Waiver to Credit Agreement and Related Documents

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Signature Page to Master Assignment, Agreement,

Amendment No. 1 and Waiver to Credit Agreement and Related Documents

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Signature Page to Master Assignment, Agreement,

Amendment No. 1 and Waiver to Credit Agreement and Related Documents

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Signature Page to Master Assignment, Agreement,

Amendment No. 1 and Waiver to Credit Agreement and Related Documents

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Signature Page to Master Assignment, Agreement,

Amendment No. 1 and Waiver to Credit Agreement and Related Documents

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Signature Page to Master Assignment, Agreement,

Amendment No. 1 and Waiver to Credit Agreement and Related Documents

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Signature Page to Master Assignment, Agreement,

Amendment No. 1 and Waiver to Credit Agreement and Related Documents

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Signature Page to Master Assignment, Agreement,

Amendment No. 1 and Waiver to Credit Agreement and Related Documents

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Annex I

Commitments Prior to Increase

 

Lender		Commitment
▇▇▇▇▇ Fargo Bank, National Association		$	32,500,000
Regions Bank		$	32,500,000
Citizens Bank of Pennsylvania		$	27,500,000
First National Bank of Pennsylvania		$	27,500,000
Fifth Third Bank		$	20,000,000
First Niagara Bank, N.A.		$	10,000,000
Total:		$	150,000,000

 

Annex I

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Annex II

Conformed Credit Agreement

[See Attached.]

 

Annex II

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ANNEX II

to

MASTER ASSIGNMENT, AGREEMENT, AND AMENDMENT NO. 1

TO CREDIT AGREEMENT AND RELATED DOCUMENTS

Conformed Version

 

 

 

CREDIT AGREEMENT

dated as of April 10, 2012

Among

▇▇▇▇▇▇▇▇ CORPORATION

as Borrower,

▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION

as Administrative Agent, Issuing Lender and Swing Line Lender,

and

THE LENDERS NAMED HEREIN

as Lenders

$325,000,000

 

 

 

▇▇▇▇▇ FARGO SECURITIES, LLC

▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED

RBS CITIZENS, N.A.

FIFTH THIRD BANK, and

U.S. BANK NATIONAL ASSOCIATION,

AS JOINT LEAD ARRANGERS,

▇▇▇▇▇ FARGO SECURITIES, LLC

▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED, and

RBS CITIZENS, N.A.,

AS JOINT BOOKRUNNERS,

BANK OF AMERICA, N.A., and

CITIZENS BANK OF PENNSYLVANIA

AS CO-SYNDICATION AGENTS,

AND

FIFTH THIRD BANK, and

U.S. BANK NATIONAL ASSOCIATION,

AS CO-DOCUMENTATION AGENTS

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ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS					1
Section 1.1		Certain Defined Terms			1
Section 1.2		Computation of Time Periods			23
Section 1.3		Accounting Terms; Changes in GAAP			24
Section 1.4		Classes and Types of Advances			24
Section 1.5		Miscellaneous			24
ARTICLE 2 CREDIT FACILITIES					24
Section 2.1		Commitments			24
Section 2.2		Letters of Credit			26
Section 2.3		Advances			31
Section 2.4		Prepayments			36
Section 2.5		Repayment			37
Section 2.6		Fees			37
Section 2.7		Interest			37
Section 2.8		Illegality			38
Section 2.9		Breakage Costs			39
Section 2.10		Increased Costs			39
Section 2.11		Payments and Computations			40
Section 2.12		Taxes			42
Section 2.13		Replacement of Lenders			44
Section 2.14		Payments and Deductions to a Defaulting Lender			45
Section 2.15		Increase in Commitments			47
ARTICLE 3 CONDITIONS OF LENDING					48
Section 3.1		Conditions Precedent to Initial Borrowings and the Initial Letter of Credit			48
Section 3.2		Conditions Precedent to Each Borrowing and to Each Issuance, Extension or Renewal of a Letter of Credit			51
Section 3.3		[Reserved]			52
Section 3.4		Determinations Under Sections 3.1, 3.2 and 3.3			52
ARTICLE 4 REPRESENTATIONS AND WARRANTIES					52
Section 4.1		Organization			52
Section 4.2		Authorization			53
Section 4.3		Enforceability			53
Section 4.4		Financial Condition			53
Section 4.5		Ownership and Liens; Real Property			53

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Section 4.6		True and Complete Disclosure			54
Section 4.7		Litigation			54
Section 4.8		Compliance with Agreements			54
Section 4.9		Pension Plans			55
Section 4.10		Environmental Condition			55
Section 4.11		Subsidiaries			56
Section 4.12		Investment Company Act			56
Section 4.13		Taxes			56
Section 4.14		Permits, Licenses, etc			56
Section 4.15		Use of Proceeds			56
Section 4.16		Condition of Property; Casualties			56
Section 4.17		Insurance			57
Section 4.18		Security Interest			57
Section 4.19		OFAC; Anti-Terrorism			57
Section 4.20		Solvency			57
ARTICLE 5 AFFIRMATIVE COVENANTS					57
Section 5.1		Organization			57
Section 5.2		Reporting			57
Section 5.3		Insurance			60
Section 5.4		Compliance with Laws			61
Section 5.5		Taxes			61
Section 5.6		New Subsidiaries			62
Section 5.7		Security			62
Section 5.8		Deposit Accounts			63
Section 5.9		Records; Inspection			63
Section 5.10		Maintenance of Property			63
Section 5.11		[Reserved]			63
Section 5.12		Certificates of Title			63
Section 5.13		Appraisal Reports; Field Audits			64
Section 5.14		Material Agreements			64
Section 5.15		Acquisition Documents			64
Section 5.16		Additional Material Real Property			64
Section 5.17		Post-Closing Covenants			65
ARTICLE 6 NEGATIVE COVENANTS					66
Section 6.1		Debt			66

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Section 6.2		Liens			68
Section 6.3		Investments			69
Section 6.4		Acquisitions			70
Section 6.5		Agreements Restricting Liens			71
Section 6.6		Use of Proceeds; Use of Letters of Credit			71
Section 6.7		Corporate Actions; Accounting Changes			72
Section 6.8		Sale of Assets			72
Section 6.9		Restricted Payments			73
Section 6.10		Affiliate Transactions			73
Section 6.11		Line of Business			73
Section 6.12		Hazardous Materials			74
Section 6.13		Compliance with ERISA			74
Section 6.14		Sale and Leaseback Transactions			74
Section 6.15		Limitation on Hedging			75
Section 6.16		Maximum Total Debt Leverage Ratio			75
Section 6.17		Maximum Senior Secured Debt Leverage Ratio			75
Section 6.18		Minimum Interest Coverage Ratio			75
Section 6.19		Capital Expenditures			75
Section 6.20		Landlord Agreements			75
Section 6.21		Operating Leases			76
Section 6.22		Prepayment of Certain Debt and Other Obligations			76
ARTICLE 7 DEFAULT AND REMEDIES					76
Section 7.1		Events of Default			76
Section 7.2		Optional Acceleration of Maturity			78
Section 7.3		Automatic Acceleration of Maturity			78
Section 7.4		Set-off			79
Section 7.5		Remedies Cumulative, No Waiver			79
Section 7.6		Application of Payments			79
ARTICLE 8 THE ADMINISTRATIVE AGENT					80
Section 8.1		Appointment, Powers, and Immunities			80
Section 8.2		Reliance by Administrative Agent			81
Section 8.3		Defaults			81
Section 8.4		Rights as Lender			81
Section 8.5		Indemnification			81
Section 8.6		Non-Reliance on Administrative Agent and Other Lenders			83

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Section 8.7		Resignation of Administrative Agent and Issuing Lender			83
Section 8.8		Collateral Matters			84
ARTICLE 9 MISCELLANEOUS					85
Section 9.1		Costs and Expenses			85
Section 9.2		Indemnification; Waiver of Damages			85
Section 9.3		Waivers and Amendments			86
Section 9.4		Severability			87
Section 9.5		Survival of Representations and Obligations			87
Section 9.6		Binding Effect			87
Section 9.7		Lender Assignments and Participations			88
Section 9.8		Confidentiality			89
Section 9.9		Notices, Etc			89
Section 9.10		Usury Not Intended			90
Section 9.11		Usury Recapture			90
Section 9.12		Governing Law; Service of Process			91
Section 9.13		Submission to Jurisdiction			91
Section 9.14		Execution in Counterparts			91
Section 9.15		Waiver of Jury			91
Section 9.16		[Reserved]			92
Section 9.17		USA Patriot Act			92
Section 9.18		Integration			92

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EXHIBITS:

 

Exhibit A		– Form of Assignment and Acceptance
Exhibit B		– Form of Compliance Certificate
Exhibit C		– Form of Guaranty
Exhibit D		– Form of Mortgage
Exhibit E		– Form of Notice of Borrowing
Exhibit F		– Form of Notice of Continuation or Conversion
Exhibit G		– Form of Pledge and Security Agreement
Exhibit H-1		– Form of Revolving Note
Exhibit H-2		– Form of Swing Line Note
Exhibit I		– Form of Landlord Agreement
SCHEDULES:
Schedule I		– Pricing Schedule
Schedule II		– Commitments, Contact Information
Schedule III		– Additional Conditions and Requirements for New Restricted Subsidiaries
Schedule 1.1		– Existing Letters of Credit
Schedule 3.1		– Owned and Leased Real Properties
Schedule 4.1		– Organizational Information
Schedule 4.7		– Litigation
Schedule 4.10		– Environmental Matters
Schedule 4.11		– Subsidiaries
Schedule 6.3		– Permitted Investments

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CREDIT AGREEMENT

This CREDIT AGREEMENT dated as of April 10, 2012 (the “Agreement”) is among ▇▇▇▇▇▇▇▇ Corporation, a Delaware corporation (the “Borrower”), the Lenders (as defined below) and ▇▇▇▇▇ Fargo Bank, National Association as Administrative Agent (as defined below) for the Lenders, as Issuing Lender (as defined below) and as Swing Line Lender (as defined below).

In consideration of the mutual covenants and agreements herein contained, the parties hereto hereby agree as follows:

ARTICLE 1

DEFINITIONS AND ACCOUNTING TERMS

Section 1.1 Certain Defined Terms. The following terms shall have the following meanings (unless otherwise indicated, such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Acceptable Letter of Credit Maturity Date” has the meaning assigned to it in Section 2.2(a)(ii) of this Agreement.

“Acceptable Security Interest” means a security interest which (a) exists in favor of the Administrative Agent for its benefit and the ratable benefit of the Secured Parties, (b) is superior to all other security interests (other than the Permitted Liens), (c) secures the Secured Obligations, (d) is enforceable against the Credit Party which created such security interest and (e) is perfected (other than for Collateral the perfection of which is expressly allowed to occur at a later date, in which case such this clause (e) shall not apply with respect to such Collateral until such later date).

“Acquisition” means the purchase by any Credit Party of any business, division or enterprise, including the purchase of associated assets or operations, or at least a majority of the Equity Interests, of a Person and for the avoidance of doubt, excludes purchases of equipment only with no other tangible or intangible Property associated with such equipment purchase (other than computer software and similar intellectual property rights associated with such equipment) unless such purchase of equipment involves all or substantially all the assets of the seller thereof.

“Acquisition Agreements” means the CVR Purchase Agreement, the Sand Hill Purchase Agreement, the CPI Purchase Agreement, the Bear Creek Purchase Agreement, the Devonian Purchase Agreement, the Excalibur Purchase Agreement, the Charis Purchase Agreement, the Keystone Vacuum Purchase Agreement, the TFI Holdings Acquisition Agreement, the NEVCO Purchase Agreement, the Encore Purchase Agreement, the Southwest Petroleum Purchase Agreement, the Petroleum Energy Purchase Agreement, the AWS Purchase Agreement, the Rough Rider Acquisition Agreement, the ▇▇▇▇▇ Purchase Agreement, and any purchase agreement in connection with any Permitted Acquisition.

“Additional Lender” has the meaning set forth in Section 2.15(a).

“Adjusted Base Rate” means, for any day, the fluctuating rate per annum of interest equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus  ¹/₂ of 1.00%, and (c) a rate determined by the Administrative Agent to be the Daily One-Month LIBOR plus 1.00%. Any change in the Adjusted Base Rate due to a change in the Prime Rate, Daily One-Month LIBOR or the Federal Funds Rate shall be effective on the effective date of such change in the Prime Rate, Daily One-Month LIBOR or the Federal Funds Rate.

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“Administrative Agent” means ▇▇▇▇▇ Fargo in its capacity as agent for the Lenders pursuant to Article 8 and any successor agent pursuant to Section 8.7.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Advance” means any advance by a Lender or the Swing Line Lender to the Borrower as a part of a Borrowing.

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person or any Subsidiary of such Person. The term “control” (including the terms “controlled by” or “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership, by contract, or otherwise.

“Agreement” means this Credit Agreement among the Borrower, the Lenders, the Issuing Lenders, the Swing Line Lender and the Administrative Agent.

“Applicable Margin” means, at any time with respect to each Type of Advance, the Letters of Credit and the Commitment Fee, the percentage rate per annum which is applicable at such time with respect to such Advance, Letter of Credit or Commitment Fee as set forth in Schedule I and subject to further adjustments as set forth in Section 2.7(c).

“April 2012 Bond Issuance” means that certain unsecured high-yield debt issuance of $250,000,000 by the Borrower consummated on April 10, 2012.

“ASC 350” means the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 350, Intangibles – Goodwill and others (formerly, FASB Statement 142).

“Assignment and Acceptance” means an assignment and acceptance executed by a Lender and an Eligible Assignee and accepted by the Administrative Agent, in substantially the same form as Exhibit A.

“Availability” means, as of any date of determination, an amount equal to (a) the aggregate Commitments minus (b) the sum of (i) the outstanding principal amount of all Swing Line Advances plus (ii) the outstanding principal amount of all Revolving Advances plus (iii) the Letter of Credit Exposure.

“AutoBorrow Agreement” means any agreement providing for automatic borrowing services between the Borrower and the Swing Line Lender.

“AWS” means Appalachian Water Services, LLC, a Pennsylvania limited liability company.

“AWS Acquisition” means the purchase by HEK from ▇▇▇▇▇▇▇▇▇▇▇▇▇ Enterprises, Inc. of 51% of the equity of AWS pursuant to the AWS Purchase Agreement.

“AWS Acquisition Documents” means the AWS Purchase Agreement and all agreements, assignments, deeds, conveyances, certificates and other documents and instruments executed and delivered by HEK pursuant to the AWS Purchase Agreement or in connection with the AWS Acquisition.

“AWS Purchase Agreement” means that certain Membership Interest Purchase Agreement dated as of August 31, 2012 among HEK, ▇▇▇▇▇▇▇▇▇▇▇▇▇ Enterprises, Inc., AWS, ▇▇▇▇▇▇▇▇▇▇▇▇▇ Construction, Inc. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇.

 

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“Banking Services” means each and any of the following bank services provided to any Credit Party by any Lender (other than a Defaulting Lender) or by any Affiliate of a Lender (other than a Defaulting Lender): (a) commercial credit cards, (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

“Banking Services Obligations” means any and all obligations of the Borrower or any other Credit Party, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

“Banking Services Provider” means any Lender (other than a Defaulting Lender) or Affiliate of a Lender (other than a Defaulting Lender) that provides Banking Services to the Borrower or any Restricted Subsidiary.

“Base Rate Advance” means an Advance which bears interest based upon the Adjusted Base Rate.

“Bear Creek Purchase Agreement” means that certain Asset Purchase Agreement dated as of April 1, 2011, by and between CVR and Bear Creek Services, LLC.

“Bond Issuance” means (i) the April 2012 Bond Issuance and (ii) the November 2012 Bond Issuance.

“Bond Issuance Documents” means the Indentures, the Purchase Agreements, the notes to be issued, and guarantees to be executed, in each case in connection therewith, and all other agreements, assignments, deeds, conveyances, certificates and other documents and instruments now or hereafter executed and delivered by the Borrower pursuant to all of the foregoing or in connection with the Bond Issuance.

“Borrower” means ▇▇▇▇▇▇▇▇ Corporation, a Delaware corporation.

“Borrowing” means a Revolving Borrowing or a Swing Line Borrowing.

“Business Day” means a day (a) other than a Saturday, Sunday, or other day on which the Administrative Agent is authorized to close under the laws of, or is in fact closed in, New York, and (b) if the applicable Business Day relates to any Eurodollar Advances, on which dealings are carried on by commercial banks in the London interbank market.

“CapEx Basket Amount” means, (x) for the fiscal year ending December 31, 2012, $150,000,000, (y) for the fiscal year ending December 31, 2013, 75% of the Consolidated EBITDA for such fiscal year, and (z) for any fiscal year thereafter, an amount equal to the sum of (a) 75% of the Consolidated EBITDA for such fiscal year, plus (b) the positive amount (the “Carry-Over Amount”), if any, equal to 50% times the result of (i) 75% of the Consolidated EBITDA for the preceding fiscal year, minus (ii) the Capital Expenditures expended by the Borrower and its Restricted Subsidiaries for such preceding fiscal year (it being understood that amounts spent during any fiscal year shall be first deemed to be amounts spent pursuant to clause (a) and then deemed to be spent using any Carry-Over Amount).

 

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“Capital Expenditures” for any Person and period of its determination means, without duplication, the aggregate of all expenditures and costs (whether paid in cash or accrued as liabilities during that period and including that portion of payments under Capital Leases that are capitalized on the balance sheet of such Person) of such Person during such period that, in conformity with GAAP, are required to be included in or reflected by the Property, plant, or equipment or similar fixed asset accounts reflected in the balance sheet of such Person, but excluding (without duplication): (a) such expenditures to the extent made with the proceeds of any asset sale or trade in of any asset permitted hereunder, (b) such expenditures to the extent made with the proceeds of casualty insurance, condemnation awards or indemnity payments, provided such indemnity amounts are payments or reimbursements directly relating to the repair or replacement of fixed or capital assets; (c) leasehold improvement expenditures that are paid for or reimbursed during such period of measurement by third party landlords or lessors; (d) amounts paid as the purchase price in any Permitted Acquisition or any Acquisition consented to by the Majority Lenders (including any deferred amounts), and (e) such expenditures to the extent made with proceeds of third party reimbursements received by the Borrower or one of its Restricted Subsidiaries.

“Capital Leases” means, for any Person, any lease of any Property by such Person as lessee which would, in accordance with GAAP, be required to be classified and accounted for as a capital lease on the balance sheet of such Person.

“Cash Collateral Account” means a cash collateral account pledged to the Administrative Agent containing cash deposited pursuant to the terms hereof to be maintained with the Administrative Agent in accordance with Section 2.2(h).

“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, and analogous laws of the states, and all rules, regulations and requirements promulgated and published thereunder, in each case as now or hereafter in effect.

“Certificated Equipment” means any equipment the ownership of which is evidenced by, or under applicable Legal Requirement, is required to be evidenced by, a certificate of title.

“Change in Control” means the occurrence of any of the following events:

(a) any “person” or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) other than the Rough Rider Seller has become, directly or indirectly, the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to have “beneficial ownership” of all such shares that any such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time, by way of merger, consolidation or otherwise) of 35% or more of the common stock of Borrower on a fully-diluted basis, after giving effect to the conversion and exercise of all outstanding warrants, options and other securities of the Borrower (whether or not such securities are then currently convertible or exercisable); or

(b) during any period of twelve (12) consecutive months, individuals who at the beginning of such period were members of the Borrower’s board of directors cease for any reason to constitute a majority of the directors of the Borrower then in office unless (i) such new directors were elected by a majority of the directors of the Borrower who constituted the board of directors of the Borrower at the beginning of such period (or by directors so elected) or by the stockholders pursuant to the nomination of the existing directors, or (ii) the reason for such directors failing to constitute a majority is a result of retirement by directors due to age, death or disability.

“Change in Law” means the occurrence, after the date of this Agreement (or with respect to any Lender, if later, the date on which such Lender becomes a Lender), of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive

 

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(whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Charis Purchase Agreement” means that certain Asset Purchase Agreement dated as of June 12, 2009, by and among the Borrower, HWR, Charis Partners, LLC, ▇▇▇▇▇ Exploration Corporation, Silversword, L.P., Silversword II, L.P., Silversword III, L.P., Silversword IV, L.P., Silversword V, L.P. and Silversword VII, L.P., ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇.

“Class” has the meaning set forth in Section 1.4.

“Closing Date Leverage Ratio” means the ratio of (a) the Consolidated Total Debt on the Effective Date, after giving pro forma effect to the Transactions and any Advances made on the Effective Date, less available and unencumbered cash (other than (i) Liens in favor of the Administrative Agent pursuant to Security Documents, and (ii) Liens in favor of the depository institution holding such deposit accounts arising solely by virtue of such depository institution’s standard account documentation or any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies burdening only such deposit accounts and only to the extent of any amounts owing in respect of such standard account documentation) of the Borrower and the Restricted Subsidiaries of the Borrower, to (b) the Consolidated EBITDA for the four-fiscal quarter period ended December 31, 2011.

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereof.

“Collateral” means all Property of the Credit Parties which is “Collateral” or “Mortgaged Property” (as defined in each of the Mortgages, or the Security Agreement, as applicable) or similar terms used in the Security Documents.

“Commitment Fees” means the fees required under Section 2.6(a).

“Commitment Increase” has the meaning set forth in Section 2.15(a).

“Commitment” means, for each Lender, the obligation of each Lender to advance to the Borrower the amount set opposite such Lender’s name on Schedule II as its Commitment, or if such Lender has entered into any Assignment and Acceptance, set forth for such Lender as its Commitment in the Register, as such amount may be reduced pursuant to Section 2.1(c)(i); provided that, after the Maturity Date, the Commitment for each Lender shall be zero. The aggregate Commitment on the First Amendment Effective Date is $325,000,000.

“Compliance Certificate” means a compliance certificate executed by a Responsible Officer of the Borrower or such other Person as required by this Agreement in substantially the same form as Exhibit B.

“Consolidated EBITDA” means, for any period for the Borrower and its Restricted Subsidiaries on a consolidated basis, the sum of (a) Consolidated Net Income, plus (b) to the extent deducted in determining Consolidated Net Income, without duplication, (i) Consolidated Interest Charges, (ii) taxes,

 

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(iii) depreciation and amortization, (iv) (A) any impairment charge or asset write-off or write-down related to intangible assets, long-lived assets and other assets, and investment in debt and equity securities pursuant to GAAP, (B) stock-based awards, compensation expense, including non-cash charges arising from stock options, restricted stock or other equity incentive programs, (C) other non-cash charges, including purchase accounting adjustments in accordance with GAAP and any non-cash loss or expense resulting from bonus payments made to repay non-cash loans made to officers, directors or employees, in each case of clauses (B) and (C), excluding any such non-cash charge to the extent that it represents an accrual or reserve for potential cash charge in any future period or amortization of a prepaid cash charge that was paid in a prior period, (v) one-time relocation expenses, transaction fees and expenses, integration expense and one-time compensation charges (including stay bonuses and severance expenses) in each case incurred as result of the consummation of Permitted Acquisitions or any acquisitions consented to by the Majority Lenders, (vi) legal costs related to shareholder and securities litigation arising from the acquisition of China Water and Drinks Inc., a Delaware corporation, in an aggregate amount not to exceed $2,000,000 in any fiscal year, (vii) losses in connection with any Hedging Arrangement, (viii) all fees, costs and expenses incurred in connection with the Bond Issuance or any amendment to any document related thereto; (ix) all fees, costs and expenses incurred in connection with the issuance of any Credit Documents or any amendment to any document related thereto; (x) all reasonable fees, costs and expenses incurred in connection with any Permitted Acquisition or any acquisition consented to by the Majority Lenders, whether or not consummated, in the applicable period, (xi) non-recurring charges, expenses and losses (including losses from disposition of assets), (xii) all expenses and charges which have been reimbursed in cash by a third party, (xiii) costs (including legal costs) associated with moving any Restricted Subsidiary to discontinued operations or disposition thereof, minus (c) the sum of (i) gains in connection with any Hedging Arrangement, (ii) non-recurring gains (including gains from disposition of assets) and (iii) non-cash gains associated with any write-up of goodwill pursuant to ASC 350, in each case on a consolidated basis determined in accordance with GAAP, to the extent applicable; provided that Consolidated EBITDA shall be subject to pro forma adjustments for acquisitions and divestitures consummated during such calculation period (“Pro Forma Adjustments”) assuming that such transactions had occurred on the later of (x) October 1, 2012 and (y) first day of the applicable calculation period for the ratios set forth in Sections 6.16, 6.17 and 6.18, which adjustments shall be made in accordance with the guidelines for pro forma presentations set forth by the SEC or in a manner otherwise acceptable to the Administrative Agent. Except as otherwise expressly provided, the applicable period shall be the four (4) consecutive fiscal quarters ending as of the date of determination. Notwithstanding anything to the contrary contained herein, Consolidated EBITDA shall be deemed to be as follows for the following fiscal quarters subject to Pro Forma Adjustments (other than Pro Forma Adjustments for acquisitions and divestitures consummated on or before the First Amendment Effective Date): quarter ending December 31, 2011, $55,628,000, quarter ending March 31, 2012, $62,244,000, quarter ending June 30, 2012, $64,593,000 and quarter ending September 30, 2012, $55,097,000.

“Consolidated Interest Charges” means, at any date of determination, for the Borrower and its Restricted Subsidiaries on a consolidated basis, an amount equal to the sum of (i) all interest, premium payments and debt discount in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, plus (ii) the portion of rent expense with respect to such period under Capital Leases that is treated as interest in accordance with GAAP. Consolidated Interest Charges shall be calculated after giving effect to Hedge Arrangements (including associated costs) intended to protect against fluctuations in interest rates, but excluding unrealized gains and losses with respect to any such Hedge Arrangements.

 

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“Consolidated Net Income” means, for any period for the Borrower and its Restricted Subsidiaries, net income (or loss) determined on a consolidated basis in accordance with GAAP, but excluding for purposes of determining the Closing Date Leverage Ratio, the Maximum Total Debt Leverage Ratio, the Maximum Senior Secured Debt Leverage Ratio, and the Minimum Interest Coverage Ratio, (a) extraordinary gains and losses and (b) gains and losses from discontinued operations, and, in each case, related tax effects thereon. Except as otherwise expressly provided, the applicable period shall be the four (4) consecutive fiscal quarters ending as of the date of determination.

“Consolidated Total Debt” means Total Debt of the Borrower and its Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP.

“Controlled Group” means all members of a controlled group of corporations and all businesses (whether or not incorporated) under common control which, together with the Borrower or any Restricted Subsidiary, are treated as a single employer under Section 414 (b), (c), (m), or (o) of the Code.

“Convert,” “Conversion,” and “Converted” each refers to a conversion of Advances of one Type into Advances of another Type pursuant to Section 2.3(b).

“CPI Purchase Agreement” means that certain Asset Purchase Agreement dated as of May 31, 2011, by and among CVR, Consolidated Petroleum, Inc., ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, as amended by that certain First Amendment to Asset Purchase Agreement dated as of June 13, 2011, by and among CVR, Consolidated Petroleum, Inc., ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇.

“Credit Documents” means this Agreement, the Notes, the Letters of Credit, the Letter of Credit Applications, the Guaranties, the Notices of Borrowing, the Notices of Conversion, the Security Documents, any AutoBorrow Agreement, the Fee Letters, the IP Security Agreement and each other agreement, instrument, or document executed at any time in connection with this Agreement.

“Credit Parties” means the Borrower and the Guarantors.

“Custodial Agreement” means that certain Custodial Agreement dated as of April 10, 2012 among the Borrower, the Administrative Agent, and each employee of the Credit Parties serving as custodian thereunder, and each custodial agreement now or hereafter executed in form and substance reasonably satisfactory to the Administrative Agent.

“CVR” means ▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc., a Texas corporation.

“CVR Purchase Agreement” means that certain Stock Purchase Agreement dated as of November 8, 2010, by and among the Borrower, CVR, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇ and ▇▇▇▇ ▇. ▇▇▇▇.

“Daily One-Month LIBOR” means, for any day, the rate of interest equal to the Eurodollar Rate then in effect for delivery for a one (1) month period.

“Debt” means, for any Person, without duplication: (a) Total Debt; (b) all contingent obligations under letters of credit (including standby and commercial), bankers’ acceptances and similar instruments (including bank guaranties, surety bonds, comfort letters, keep-well agreements and capital maintenance agreements); (c) net obligations under any Hedge Arrangement; (d) support obligations in respect of Debt of another Person; and (e) Debt of any partnership or joint venture, and, as such, has personal liability for such obligations, but only to the extent there is recourse to such Person for payment thereof.

“Default” means (a) an Event of Default or (b) any event or condition which with notice or lapse of time or both would, unless cured or waived, become an Event of Default.

 

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“Default Rate” means a per annum rate equal to (a) in the case of principal of any Advance, 2.00% plus the rate otherwise applicable to such Advance as provided in Sections 2.7(a), (b), or (c), and (b) in the case of any other Obligation, 2.00% plus the non-default rate applicable to Base Rate Advances as provided in Section 2.7(a) or (c).

“Defaulting Lender” means any Lender that (a) (except, with regards to the funding of Swing Line Advances, the Swing Line Lender) has failed to fund any portion of the Revolving Advances or participations in Letter of Credit Obligations or Swing Line Advances required to be funded by it hereunder within two Business Days of the date required to be funded by it hereunder unless, with the consent of the Administrative Agent and the Borrower (which consent may be withheld at the sole discretion of the Administrative Agent and the Borrower), such failure has been cured or such Lender has notified the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding has not been satisfied, (b) has indicated to the Administrative Agent, or has stated publicly, that such Lender will not fund any portion of the Revolving Advances or participations in Letter of Credit Obligations or Swing Line Advances required to be funded by it hereunder, unless, with the consent of the Administrative Agent and the Borrower (which consent may be withheld at the sole discretion of the Administrative Agent and the Borrower), such Lender actually funds such Advances or participations or such indication or statement relates to such Lender’s obligation to fund hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding can’t be satisfied, (c) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two Business Days of the date when due, unless the subject of a good faith dispute, or unless, with the consent of the Administrative Agent (which consent may be withheld at the sole discretion of the Administrative Agent), such failure has been cured, (d) as to which a Lender Insolvency Event has occurred and is continuing with respect to such Lender, or (e) has failed to confirm in writing to the Administrative Agent, for at least three Business Days, in response to a written request of the Administrative Agent, that it will comply with its funding obligations hereunder. Any determination that a Lender is a Defaulting Lender will be made by the Administrative Agent in its sole discretion acting in good faith.

“Devonian Purchase Agreement” means that certain Asset Purchase Agreement dated as of March 25, 2011, by and among CVR, Devonian Industries, Inc. and ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇.

“Disposal ▇▇▇▇▇” means (a) those certain salt water disposal ▇▇▇▇▇ and associated Real Property rights more particularly described on Part I of Schedule 3.1, and (b) all other salt water disposal ▇▇▇▇▇ or other disposal ▇▇▇▇▇ drilled or otherwise acquired or developed after the date of this Agreement.

“Dodge Water Depot” means Dodge Water Depot, LLC, a North Dakota limited liability company.

“Dollars” and “$” means lawful money of the United States of America.

“Domestic Subsidiary” means, with respect to any Person, any of its Subsidiaries that (a) is incorporated or organized under the laws of the United States, any State thereof or the District of Columbia, (b) could provide a guarantee without any material adverse federal income tax consequence of the Borrower (by constituting an investment of earnings in United States property under Section 956 (or any successor provision) of the Code, triggering an increase in the gross income of the Borrower pursuant to Section 951 (or a successor provision) of the Code without corresponding credits or other offsets), or (c) is disregarded for tax purposes.

“Effective Date” means the date of this Agreement.

 

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“Eligible Assignee” means (a) a Lender (other than a Defaulting Lender), (b) any Affiliate of a Lender approved by the Administrative Agent, or (c) any other Person (other than a natural Person) approved by the Administrative Agent, the Issuing Lender and the Swingline Lender and, unless an Event of Default has occurred and is continuing at the time any assignment is effected in accordance with Section 9.7, the Borrower, such approval not to be unreasonably withheld or delayed by the Borrower and such approval to be deemed given by the Borrower if no objection is received by the Administrative Agent from the Borrower within ten Business Days after notice of such proposed assignment has been provided to the Borrower; provided, however, that the Borrower shall not qualify as an Eligible Assignee and, unless an Event of Default has occurred and is continuing, a Competitor shall not qualify as an Eligible Assignee.

“Encore Purchase Agreement” means the Purchase Agreement dated as of November 5, 2010 between Encore D.E.C., LLC and Thermo Fluids, Inc.

“Environment” or “Environmental” shall have the meanings set forth in 42 U.S.C. 9601(8) (1988).

“Environmental Claim” means any third party Person’s written claim, demand, notice of potential or actual responsibility or violation, action, lawsuit, regulatory action or proceeding, decree or consent agreement which seeks to impose liability under any Environmental Law.

“Environmental Law” means all federal, state, and local laws, rules, regulations, ordinances, written orders, decisions, agreements, and other requirements, including rules of common law, now or hereafter in effect and relating to, or in connection with the Environment, including without limitation CERCLA, and relating to (a) pollution, contamination, natural resource injury or protection, cleanup, reclamation or restoration of the air, surface water, groundwater, land surfaces or subsurface strata, or other natural resources; (b) generation, manufacturing, handling, treatment, processing, recycling, reclamation, cleanup, storage, disposal or transportation of Hazardous Substances or Hazardous Wastes; (c) the occupational safety or health of employees, and (d) exposure to Hazardous Substances or Hazardous Wastes.

“Environmental Permit” means any permit, license, order, approval, registration or other authorization under Environmental Law.

“Equity Interest” means with respect to any Person, any shares, interests, participation, or other equivalents (however designated) of corporate stock, membership interests or partnership interests (or any other ownership interests) of such Person.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“Escrow Account” means the account established by the Escrow Agent, pursuant to the Escrow Agreement.

“Escrow Agent” means the Bank of New York Mellon Trust Company, N.A. or its successor in interest, or any successor escrow agent appointed as provided in the Escrow Agreement.

“Escrow Agreement” means that certain Escrow Agreement, dated as of April 10, 2012, by and among Green Fuel Services, LLC, HES, the Borrower and the Escrow Agent.

 

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“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of the Federal Reserve Board as in effect from time to time.

“Eurodollar Advance” means an Advance that bears interest based upon the Eurodollar Rate (other than Advances that bear interest based upon the Daily One Month LIBOR).

“Eurodollar Base Rate” means (a) in determining Eurodollar Rate for purposes of the “Daily One Month LIBOR”, the rate per annum for Dollar deposits quoted by the Administrative Agent for the purpose of calculating effective rates of interest for loans making reference to the “Daily One-Month LIBOR”, as the inter-bank offered rate in effect from time to time for delivery of funds for one (1) month in amounts approximately equal to the principal amount of the applicable Advances; provided that, the Administrative Agent may base its quotation of the inter-bank offered rate upon such offers or other market indicators of the inter-bank market as the Administrative Agent in its discretion deems appropriate including, but not limited to, the rate determined under the following clause (b), and (b) in determining Eurodollar Rate for all other purposes, the rate per annum (rounded upward to the nearest whole multiple of 1/100 of 1%) equal to the interest rate per annum set forth on the Reuters Reference LIBOR1 page as the London Interbank Offered Rate, for deposits in Dollars at 11:00 a.m. (London, England time) two Business Days before the first day of the applicable Interest Period and for a period equal to such Interest Period; provided that, if such quotation is not available for any reason, then for purposes of this clause (b), Eurodollar Base Rate shall then be the rate determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in immediately available funds in the approximate amount of the Advances being made, continued or Converted by the Lenders and with a term equivalent to such Interest Period would be offered by the Administrative Agent’s London Branch (or other branch or Affiliate of the Administrative Agent, or in the event that the Administrative Agent does not have a London branch, the London branch of a Lender chosen by the Administrative Agent) to major banks in the London or other offshore inter-bank market for Dollars at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period).

“Eurodollar Rate” means a rate per annum determined by the Administrative Agent pursuant to the following formula:

 

Where,

“Eurodollar Reserve Percentage” means, as of any day, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to liabilities or assets consisting of or including Eurocurrency Liabilities. The Eurodollar Rate for each outstanding Advance shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.

“Event of Default” has the meaning specified in Section 7.1.

“Excalibur Purchase Agreement” means that certain Share Purchase Agreement dated as of May 3, 2011, by and among CVR, the Borrower, Excalibur Energy Services, Inc., Blackhawk Industries, L.L.C., ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, and Macmart Oil, LLC.

 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Accounts” means all accounts that are accounts used solely for the following purposes: (a) payroll accounts, so long as the cash kept in all such accounts collectively does not at any time exceed an amount equal to one pay period’s payroll for the Borrower and its Subsidiaries, (b) benefits accounts, (c) the Escrow Account, and (d) ▇▇▇▇▇ cash accounts, provided all such accounts do not in the aggregate hold more than $200,000 at any time.

“Existing Credit Agreement” means that certain Credit Agreement dated as of September 7, 2011 among the Borrower, certain other borrowers party thereto, certain other lenders party thereto, and Regions Bank as administrative agent and as collateral agent.

“Existing Debt” means Debt incurred by the Borrower in connection with the Existing Credit Agreement.

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to the Administrative Agent (in its individual capacity) on such day on such transactions as determined by the Administrative Agent.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System or any of its successors.

“Fee Letter” means each of (i) that certain Fee Letter dated as March 20, 2012 among the Borrower, ▇▇▇▇▇ Fargo, ▇▇▇▇▇ Fargo Securities, LLC, Regions Bank, and Regions Securities, LLC, and (ii) that certain Agent Fee Letter dated as October 26, 2012 among the Borrower, ▇▇▇▇▇ Fargo and ▇▇▇▇▇ Fargo Securities, LLC, and “Fee Letters” shall mean such fee letters collectively.

“Financial Statements” means, for any period, (a) the consolidated financial statements of the Borrower and its Subsidiaries, including statements of income, retained earnings, changes in equity and cash flow for such period as well as a balance sheet as of the end of such period, (b) the consolidated financial statements of the Borrower and its Restricted Subsidiaries, including statements of income, retained earnings, changes in equity and cash flow for such period as well as a balance sheet as of the end of such period, and (c) consolidating financial statements of the Unrestricted Subsidiaries on an entity basis, including statements of income, retained earnings, changes in equity and cash flow for such period as well as a balance sheet as of the end of such period, all such statements prepared in accordance with GAAP.

“First Amendment Effective Date” means November 30, 2012.

“First Amendment Leverage Ratio” means the ratio, as of the First Amendment Effective Date, of (a) the Consolidated Total Debt on such date, after giving pro forma effect to the Rough Rider Acquisition, the November ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ and any Advances made and Letters of Credit issued or increased on such date, to (b) the Consolidated EBITDA for the four-fiscal quarter period ended September 30, 2012.

 

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“First Tier Foreign Subsidiary” means any Foreign Subsidiary the Equity Interests of which are held directly by the Borrower or a Restricted Subsidiary.

“Foreign Subsidiary” means any Subsidiary of a Person that is not a Domestic Subsidiary.

“GAAP” means United States of America generally accepted accounting principles as in effect from time to time, applied on a basis consistent with the requirements of Section 1.3.

“Governmental Authority” means, with respect to any Person, any foreign governmental authority, the United States of America, any state of the United States of America, the District of Columbia, and any subdivision of any of the foregoing, and any agency, department, commission, board, authority or instrumentality, bureau or court having jurisdiction over such Person.

“Guarantors” means any Person that now or hereafter executes a Guaranty, including (a) the Restricted Subsidiaries of the Borrower listed on Schedule 4.11 and (b) each Restricted Subsidiary of the Borrower formed or acquired after the Effective Date that becomes a guarantor of all or a portion of the Obligations and which has entered into either a joinder agreement substantially in the form attached to the Guaranty or a new Guaranty.

“Guaranty” means the Guaranty Agreement executed in substantially the same form as Exhibit C.

“Hazardous Substance” means any substance or material identified as such pursuant to CERCLA or regulated under any other Environmental Law, including without limitation pollutants, contaminants, petroleum, petroleum products, radionuclides, and radioactive materials.

“Hazardous Waste” means any substance or material regulated or designated as such pursuant to any Environmental Law, including without limitation, pollutants, contaminants, flammable substances and materials, explosives, radioactive materials, oil, petroleum and petroleum products, chemical liquids and solids, polychlorinated biphenyls, asbestos, toxic substances, and similar substances and materials.

“Hedging Arrangement” means a hedge, call, swap, collar, floor, cap, option, forward sale or purchase or other contract or similar arrangement (including any obligations to purchase or sell any commodity or security at a future date for a specific price) which is entered into to reduce or eliminate or otherwise protect against the risk of fluctuations in prices or rates, including interest rates, foreign exchange rates, commodity prices and securities prices.

“HEK” means HEK Water Solutions, LLC, a Delaware limited liability company.

“HES” means ▇▇▇▇▇▇▇▇ Environmental Solutions, Inc., formerly known as ▇▇▇▇▇▇▇▇ Hydrocarbons Holdings Corporation, a Delaware corporation.

“▇▇▇▇▇ Purchase Agreement” means that certain Asset Purchase Agreement, dated May 3, 2012, by and among ▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc., ▇▇▇▇▇ Enterprises, Inc., ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇.

“HWR” means ▇▇▇▇▇▇▇▇ Water Resources Corporation, a Texas corporation.

“Increase Date” has the meaning set forth in Section 2.15(b).

“Increasing Lender” has the meaning set forth in Section 2.15(a).

 

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“Indentures” means (i) that certain indenture, dated as of April 10, 2012, between the Borrower and a trustee named therein in connection with the April 2012 Bond Issuance and (ii) that certain indenture, dated as of November 30, 2012, between RRE and a trustee named therein in connection with the November 2012 Bond Issuance, in each case as may be amended by any supplemental indenture agreements.

“Interest Period” means for each Eurodollar Advance comprising part of the same Borrowing, the period commencing on the date of such Eurodollar Advance is made or deemed made and ending on the last day of the period selected by the Borrower pursuant to the provisions below and Section 2.3, and thereafter, each subsequent period commencing on the day following the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below and Section 2.3. The duration of each such Interest Period shall be one, two, three, six or, if available to all the Lenders, nine or twelve months, in each case as the Borrower may select, provided that:

(a) Interest Periods commencing on the same date for Advances comprising part of the same Borrowing shall be of the same duration;

(b) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day;

(c) any Interest Period which begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month in which it would have ended if there were a numerically corresponding day in such calendar month; and

(d) the Borrower may not select any Interest Period for any Advance which ends after the Maturity Date.

“IP Security Agreement” means that certain Patent and Trademark Security Agreement dated as of the Effective Date, by and between the Administrative Agent, Thermo Fluids, Inc., and HWR.

“Issuing Lender” means ▇▇▇▇▇ Fargo in its capacity as a Lender that issues Letters of Credit for the account of any Credit Party pursuant to the terms of this Agreement; provided that, for any Letters of Credit outstanding prior to the Effective Date which will remain outstanding on and after the Effective Date, the Lender who issued such Letter of Credit shall serve as the “Issuing Lender” as to such Letter of Credit.

“Keystone Vacuum Purchase Agreement” means that certain Asset Purchase Agreement dated February 1, 2012, by and between CVR, Keystone Vacuum, Inc., Somerset Leasing, LLC, Gas Patch Enterprises, LLC and ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇.

“Leasehold Property” means any leasehold interest of any Credit Party as lessee under any lease of Real Property, or any Property right pursuant to a lease, easement, servitude or similar agreement, however termed, in each case now held or hereafter acquired.

“Legal Requirement” means any law, statute, ordinance, decree, requirement, order, judgment, rule, regulation (or official interpretation of any of the foregoing) of, and the terms of any license or permit issued by, any Governmental Authority, including, but not limited to, Regulations T, U and X.

 

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“Lender Insolvency Event” means that (a) a Lender or its Lender Parent Company is insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, or (b) such Lender or its Lender Parent Company is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or the like has been appointed for such Lender or its Lender Parent Company, or such Lender or its Lender Parent Company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment; provided, that a Lender Insolvency Event shall not be triggered solely as the result of the acquisition or maintenance of an ownership interest in such Lender or its Lender Parent Company by a Governmental Authority or an instrumentality thereof.

“Lender Parent Company” means, with respect to a Lender, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Lender, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender.

“Lenders” means the Persons listed on the signature pages hereto as Lenders, any other Person that shall have become a Lender hereto pursuant to Section 2.13, and any other Person that shall have become a Lender hereto pursuant to an Assignment and Acceptance, but in any event, excluding any such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance.

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.

“Letter of Credit” means (a) the existing letters of credit issued by ▇▇▇▇▇ Fargo under the Existing Credit Agreement and set forth on Schedule 1.1, and (b) any standby or commercial letter of credit issued by an Issuing Lender for the account of a Credit Party pursuant to the terms of this Agreement, in such form as may be agreed by the Borrower and the Issuing Lender.

“Letter of Credit Application” means the Issuing Lender’s standard form letter of credit application for standby or commercial letters of credit which has been executed by the Borrower and accepted by such Issuing Lender in connection with the issuance of a Letter of Credit.

“Letter of Credit Documents” means all Letters of Credit, Letter of Credit Applications and amendments thereof, and agreements, documents, and instruments entered into in connection therewith or relating thereto.

“Letter of Credit Exposure” means, at the date of its determination by the Administrative Agent, the aggregate outstanding undrawn amount of Letters of Credit plus the aggregate unpaid amount of all of the Borrower’s payment obligations under drawn Letters of Credit.

“Letter of Credit Maximum Amount” means $20,000,000; provided that, on and after the Maturity Date, the Letter of Credit Maximum Amount shall be zero.

“Letter of Credit Obligations” means any obligations of the Borrower under this Agreement in connection with the Letters of Credit.

“Lien” means any mortgage, lien, pledge, charge, deed of trust, security interest, or encumbrance to secure or provide for the payment of any obligation of any Person, whether arising by contract, operation of law, or otherwise (including the interest of a vendor or lessor under any conditional sale agreement, Capital Lease, or other title retention agreement).

 

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“Liquid Investments” means (a) readily marketable direct full faith and credit obligations of the United States of America or obligations unconditionally guaranteed by the full faith and credit of the United States of America; (b) commercial paper issued by (i) any Lender or any Affiliate of any Lender or (ii) any commercial banking institutions or corporations rated at least P-1 by Moody’s or A-1 by S&P; (c) certificates of deposit, time deposits, and bankers’ acceptances issued by (i) any of the Lenders or (ii) any other commercial banking institution which is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $250,000,000 and rated Aa by Moody’s or AA by S&P; (d) repurchase agreements which are entered into with any of the Lenders or any major money center banks included in the commercial banking institutions described in clause (c) and which are secured by readily marketable direct full faith and credit obligations of the government of the United States of America or any agency thereof; (e) investments in any money market fund which holds investments substantially of the type described in the foregoing clauses (a) through (d); (f) readily and immediately available cash held in any money market account maintained with any Lender; provided that, such money market accounts and the funds therein shall be unencumbered and free and clear of all Liens and other third party rights other than a Lien in favor of the Administrative Agent pursuant to the Security Documents; and (g) other investments made through the Administrative Agent or its Affiliates and approved by the Administrative Agent. All the Liquid Investments described in clauses (a) through (d) above shall have maturities of not more than 365 days from the date of issue.

“Liquidity” means, as of a date of determination, an amount equal to (a) Availability plus (b) readily and immediately available cash held in deposit accounts of any Credit Party (other than the Cash Collateral Accounts); provided that, such deposit accounts and the funds therein shall be unencumbered and free and clear of all Liens and other third party rights other than (i) a Lien in favor of the Administrative Agent pursuant to Security Documents, and (ii) a Lien in favor of the depository institution holding such deposit accounts arising solely by virtue of such depository institution’s standard account documentation or any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies and burdening only such deposit accounts.

“Majority Lenders” means (a) other than as provided in clauses (b) and (c) below, two or more Lenders holding greater than 50% of the aggregate Maximum Exposure Amount, (b) at any time when there is only two Lenders, both Lenders, and (c) at any time when there is only one Lender, such Lender; provided that, in any event, if there are two or more Lenders, the Commitment of, and the portion of the Advances and Letter of Credit Exposure held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Majority Lenders unless all Lenders are Defaulting Lenders.

“Material Adverse Change” means a material adverse change (a) in the business, financial condition, or results of operations of the Borrower and its Restricted Subsidiaries, taken as a whole; (b) on the validity or enforceability of this Agreement or any of the other Credit Documents; (c) on any Credit Party’s ability to perform its obligations under this Agreement, any Note, the Guaranties or any other Credit Document; or (d) in any right or remedy of any Secured Party under any Credit Document.

“Material Agreement” means each contract or instrument to which the Borrower or any of its Restricted Subsidiaries is a party or by which the Borrower, any of its Restricted Subsidiaries or any of their properties is bound (a) which is deemed to be a material contract as provided in Regulation S-K promulgated by the SEC under the Securities Act of 1933, or (b) the termination or suspension of which, or the failure of any party thereto to perform its obligations thereunder, could reasonably be expected to cause a Material Adverse Change.

 

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“Material Real Property” means (a) all Real Property comprising the entirety of the Pipeline, and (b) any real property rights in the Disposal ▇▇▇▇▇ and related real property and fixtures (whether such property right is pursuant to a lease, easement, servitude or similar agreement, however termed), and any fee-owned Real Property of the Borrower or any Restricted Subsidiary (collectively, “Subject Real Property”) that has a fair market value (i) in excess of $5,000,000, with respect to any individual Subject Real Property or (ii) in excess of $15,000,000, when added together with the fair market value of all Subject Real Property that is not subject to a Mortgage.

“Maturity Date” means the earlier of (a) November 30, 2017 and (b) the earlier termination in whole of the Commitments pursuant to Section 2.1(c)(i) or Article 7.

“Maximum Exposure Amount” means, at any time for each Lender, the sum of (a) the unfunded Commitment held by such Lender at such time; plus (b) the aggregate unpaid principal amount of the Note held by such Lender at such time, (with the aggregate amount of such Lender’s risk participation and funded participation in the Letter of Credit Exposure (including any such Letter of Credit Exposure that has been reallocated pursuant to Section 2.14) and Swing Line Advances being deemed as unpaid principal under such Lender’s Revolving Note).

“Maximum Rate” means the maximum nonusurious interest rate under applicable law.

“Maximum Senior Secured Debt Leverage Ratio” means, as of such date of determination, the ratio of (a) Consolidated Total Debt on such day minus (i) unsecured Debt, and (ii) all subordinated Debt, in each case, of the Borrower and its Restricted Subsidiaries outstanding on such day to (b) Consolidated EBITDA for the four (4) consecutive fiscal quarters ending on such day.

“Maximum Total Debt Leverage Ratio” means, as of such date of determination, the ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for the four (4) fiscal consecutive fiscal quarters ending on such day.

“Minimum Interest Coverage Ratio” means, as of such date of determination, the ratio of (a) Consolidated EBITDA for the four fiscal quarter period then ended, to (b) cash interest expense of the Borrower and its Restricted Subsidiaries for the four (4) fiscal consecutive fiscal quarters ending on such day.

“Moody’s” means ▇▇▇▇▇’▇ Investors Service, Inc. and any successor thereto which is a nationally recognized statistical rating organization.

“Mortgage” means each mortgage or deed of trust executed by any Credit Party to secure all or a portion of the Obligations in substantially the same form as Exhibit D or other form reasonably acceptable to the Administrative Agent.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Borrower or any member of the Controlled Group is making or accruing an obligation to make contributions.

“Net Income” means, for any period and with respect to any Person, the net income for such period for such Person after taxes as determined in accordance with GAAP, including any cash net gain but excluding, however, (a) extraordinary items, including (i) any net non-cash gain or loss during such period arising from the sale, exchange, retirement or other disposition of capital assets (such term to include all fixed assets and all securities) other than in the ordinary course of business, and (ii) any write-up or write-down of assets and (b) the cumulative effect of any change in GAAP.

 

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“NEVCO Purchase Agreement” means the Asset Purchase Agreement dated as of February 15, 2012 among NEVCO Services, Inc., NEVCO Oil Services, Inc., Thermo Fluids, Inc., and certain other parties thereto.

“Non-Consenting Lender” has the meaning set forth in Section 2.13.

“Non-Defaulting Lender” means any Lender that is not then a Defaulting Lender.

“Non-Material Domestic Subsidiaries” means each Domestic Subsidiary of the Borrower that both (a) generates 5% or less of the consolidated gross revenues of the Borrower and its Subsidiaries as a whole and (b) holds assets that constitute 5% or less of all assets of the Borrower and its Subsidiaries taken as a whole, provided that, in the event that all Non-Material Domestic Subsidiaries in the aggregate either (x) generate 10% or more of the consolidated gross revenues of the Borrower and its Subsidiaries as a whole or (y) hold assets that constitute 10% or more of all assets of the Borrower and its Subsidiaries taken as a whole, then one or more Non-Material Domestic Subsidiaries shall cease to be a Non-Material Domestic Subsidiary and become a Restricted Subsidiary so that the all Non-Material Domestic Subsidiaries in the aggregate generate less than 10% of the consolidated gross revenues of the Borrower and its Subsidiaries as a whole and hold assets that constitute less than 10% of all assets of the Borrower and its Subsidiaries taken as a whole.

“Notes” means the Revolving Notes and the Swing Line Note.

“Notice of Borrowing” means a Notice of Borrowing signed by the Borrower in substantially the same form as Exhibit E.

“Notice of Continuation or Conversion” means a notice of continuation or conversion signed by the Borrower in substantially the same form as Exhibit F.

“November 2012 Bond Issuance” means that certain transaction involving (a) unsecured high-yield debt issuance of $150,000,000 by ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇, (▇) the merger of RRE with and into the Borrower on the First Amendment Effective Date, with the Borrower as the surviving company, (c) the Borrower’s assumption on the First Amendment Effective Date of the obligations under RRE’s debt issuance referred to in clause (a) of this definition, (d) the Borrower’s redemption and exchange on the First Amendment Effective Date of the Stage I Notes for Stage II Notes and (e) all other transactions related to the consummation of the transaction described in clauses (a) through (d).

“Obligations” means all principal, interest (including post-petition interest), fees, reimbursements, indemnifications, and other amounts now or hereafter owed by any of the Credit Parties to the Lenders, the Swing Line Lender, the Issuing Lender, or the Administrative Agent under this Agreement and the Credit Documents, including, the Letter of Credit Obligations, and any increases, extensions, and rearrangements of those obligations under any amendments, supplements, and other modifications of the documents and agreements creating those obligations.

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the Treasury.

“Other Taxes” has the meaning set forth in Section 2.12(b).

“Patriot Act” means the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

 

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“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“Permitted Acquisition” means any Acquisition that is permitted under Section 6.4.

“Permitted Debt” has the meaning set forth in Section 6.1.

“Permitted Investments” has the meaning set forth in Section 6.3.

“Permitted Liens” has the meaning set forth in Section 6.2.

“Person” means an individual, partnership, corporation (including a business trust), joint stock company, trust, limited liability company, limited liability partnership, unincorporated association, joint venture, or other entity, or a government or any political subdivision or agency thereof, or any trustee, receiver, custodian, or similar official.

“Petroleum Energy Purchase Agreement” means the Purchase Agreement and ▇▇▇▇ of Sale dated as of May 1, 2010 between Petroleum Energy, Inc. and Thermo Fluids, Inc.

“Pipeline” means, collectively, the Property (real and personal) comprising the two pipelines owned by the Credit Parties (disposal and fresh water) located in Texas and Louisiana and depicted on Part II of Schedule 3.1, other than, prior to the Post-Closing Segment Acquisition Deadline, the Post Closing Segment.

“Plan” means an employee benefit plan (other than a Multiemployer Plan) maintained for employees of the Borrower or any member of the Controlled Group and covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code.

“Post-Closing Segment” means the Property (real and personal) comprising a segment of pipeline approximately 10 miles in length, as depicted on Part III of Schedule 3.1.

“Post-Closing Segment Acquisition Deadline” means May 30, 2013.

“Prime Rate” means the per annum rate of interest established from time to time by the Administrative Agent at its principal office in Houston as its prime rate, which rate may not be the lowest rate of interest charged by such Lender to its customers.

“Property” of any Person means any property or assets (whether real, personal, or mixed, tangible or intangible) of such Person.

“Purchase Agreement” means each of (i) that certain Purchase Agreement, dated as of April 4, 2012, among the Borrower, the guarantors named therein and the initial purchasers named therein, entered into in connection with the April 2012 Bond Issuance and (ii) that certain Purchase Agreement, dated as of October 26, 2012, among RRE, the guarantors named therein and the initial purchasers named therein, entered into in connection with the November 2012 Bond Issuance.

“Real Property” means all real property owned, leased, used or occupied by the Credit Parties, including, without limitation, all easements, licenses, servitudes, rights of way, mineral interests, water rights and saltwater disposal rights.

“Register” has the meaning set forth in Section 9.7(b).

 

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“Regulations T, U, and X” means Regulations T, U, and X of the Federal Reserve Board, as each is from time to time in effect, and all official rulings and interpretations thereunder or thereof. Each of Regulations T, U, or X may be referred to individually as Regulation T, Regulation U, or Regulation X herein.

“Release” shall have the meaning set forth in CERCLA.

“Response” shall have the meaning set forth in CERCLA.

“Reportable Event” means, with regard to a Plan, any of the events set forth in Section 4043(c) of ERISA (other than any such event for which notice is not required to be provided to the PBGC or with regard to which such notice requirement is waived under the regulations issued under such section).

“Responsible Officer” means (a) with respect to any Person that is a corporation, such Person’s Chief Executive Officer, President, Chief Financial Officer, Chief Operating Officer, or Vice President, (b) with respect to any Person that is a limited liability company, if such Person has officers, then such Person’s Chief Executive Officer, President, Chief Financial Officer, Vice President, and if such Person is managed by members, then a Responsible Officer of such Person’s managing member, and if such Person is managed by managers, then a manager (if such manager is an individual) or a Responsible Officer of such manager (if such manager is an entity), and (c) with respect to any Person that is a general partnership, limited partnership or a limited liability partnership, the Responsible Officer of such Person’s general partner or partners.

“Restricted Subsidiary” means (a) each Subsidiary of the Company on the Effective Date, and (b) each other Subsidiary of the Company, in either case, that is not an Unrestricted Subsidiary.

“Restricted Payment” means, with respect to any Person, (a) any direct or indirect dividend or distribution (whether in cash, securities or other Property) or any direct or indirect payment of any kind or character (whether in cash, securities or other Property) made in connection with the Equity Interest of such Person, including those dividends, distributions and payments made in consideration for or otherwise in connection with any retirement, purchase, redemption or other acquisition of any Equity Interest of such Person, or any options, warrants or rights to purchase or acquire any such Equity Interest of such Person or (b) principal or interest payments (in cash, Property or otherwise but excluding payments in kind) on, or redemptions of, subordinated debt of such Person; provided that the term “Restricted Payment” shall not include any dividend or distribution payable solely in Equity Interests of such Person or warrants, options or other rights to purchase such Equity Interests.

“Revolving Advance” means any advance by a Lender to the Borrower as part of a Revolving Borrowing.

“Revolving Borrowing” means a Borrowing consisting of simultaneous Revolving Advances of the same Type made by the Lenders pursuant to Section 2.1(a) or Converted by each Lender to Revolving Advances of a different Type pursuant to Section 2.3(b).

“Revolving Loan” means the aggregate principal from a Lender which represents such Revolving ratable share of a Revolving Borrowing.

“Revolving Note” means a promissory note of the Borrower payable to the order of a Lender in the amount of such Lender’s Commitment, in substantially the same form as Exhibit H-1, evidencing indebtedness of the Borrower to such Lender resulting from Revolving Advances owing to such Lender.

 

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“Revolving Pro Rata Share” means, at any time with respect to any Lender, (i) the ratio (expressed as a percentage) of such Lender’s Commitment at such time to the aggregate Commitments at such time, or (ii) if all of the Commitments have been terminated, the ratio (expressed as a percentage) of such Lender’s aggregate outstanding Revolving Advances at such time to the total aggregate outstanding Revolving Advances at such time.

“Rough Rider” means Badlands Power Fuels, LLC, a Delaware limited liability company.

“Rough Rider Acquisition” means the merger of the Rough Rider Buyer with and into Rough Rider pursuant to the Rough Rider Acquisition Agreement.

“Rough Rider Acquisition Agreement” means the Agreement and Plan of Merger dated as of September 3, 2012 among the Borrower, Rough Rider Buyer, Rough Rider, and Rough Rider Seller.

“Rough Rider Acquisition Documents” means the Rough Rider Acquisition Agreement and all agreements, assignments, deeds, conveyances, certificates and other documents and instruments now or hereafter executed and delivered by the Borrower pursuant to the Rough Rider Acquisition Agreement or in connection with the Rough Rider Acquisition.

“Rough Rider Buyer” means Rough Rider Acquisition, LLC, a Delaware limited liability company, and a wholly owned subsidiary of Borrower.

“Rough Rider Seller” means ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual residing in the state of North Dakota.

“RRE” means Rough Rider Escrow, Inc., a Delaware corporation.

“S&P” means Standard & Poor’s Rating Agency Group, a division of ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereof which is a national credit rating organization.

“Sanctioned Entity” means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.

“Sanctioned Person” means a person named on the list of Specially Designated Nationals maintained by OFAC.

“Sand Hill Purchase Agreement” means that certain Asset Purchase Agreement dated as of March 11, 2011, by and between CVR, Sand Hill Foundation, LLC, Sand Hill Panola SWD #2 LLC, Sand Hill Panola SWD #5 LLC and ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇.

“SEC” means, the Securities and Exchange Commission, or any successor to its functions.

“Secured Obligations” means (a) the Obligations, (b) the Banking Services Obligations, and (c) all obligations of any of the Credit Parties owing to Secured Swap Counterparties under any Hedging Arrangements.

“Secured Parties” means the Administrative Agent, the Issuing Lender, the Lenders, the Secured Swap Counterparties and Banking Service Providers.

 

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“Secured Swap Counterparty” means a Lender or an Affiliate of a Lender that has entered into a Hedging Arrangement with a Credit Party as permitted by the terms of this Agreement; provided that such counterparty is a Lender or an Affiliate of a Lender at the time such Hedging Arrangement is entered into.

“Security Agreement” means the Pledge and Security Agreement among the Credit Parties and the Administrative Agent in substantially the same form as Exhibit G.

“Security Documents” means, collectively, the Mortgages, the Security Agreement, the Custodial Agreements, and any and all other instruments, documents or agreements now or hereafter executed by any Credit Party or any other Person to secure the Secured Obligations.

“Solvent” means, as to any Person, on the date of any determination (a) the fair value of the Property of such Person is greater than the total amount of debts and other liabilities (including without limitation, contingent liabilities) of such Person, (b) the present fair salable value of the assets of such Person determined on a going concern basis is not less than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities (including, without limitation, contingent liabilities) as they become absolute and matured in the ordinary course of business, (c) such Person is able to realize upon its assets and pay its debts and other liabilities (including, without limitation, contingent liabilities) as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities (including, without limitation, contingent liabilities) beyond such Person’s ability to pay as such debts and liabilities mature in the ordinary course of business, (e) such Person is not engaged in, and is not about to engage in, business or a transaction for which such Person’s Property would constitute unreasonably small capital, and (f) such Person has not transferred, concealed or removed any Property with intent to hinder, delay or defraud any creditor of such Person.

“Southwest Petroleum Purchase Agreement” means the Asset Purchase Agreement dated as of August 19, 2011 among Thermo Fluids, Inc., Southwest Petroleum Waste Management, LLC, Southwest Petroleum Equipment Leasing, LLC, AFR One, LLC, and certain other parties thereto.

“Stage I Notes” means unsecured high-yield debt in a principal amount of $150,000,000 issued by RRE on November 5, 2012.

“Stage II Notes” means new unsecured high-yield debt issued by the Borrower on the First Amendment Effective Date in redemption and exchange for the Stage I Notes, which will have the same rights and obligations under and be governed by that certain indenture, dated as of April 10, 2012, between the Borrower and a trustee named therein in connection with the April 2012 Bond Issuance.

“Subject Lender” has the meaning set forth in Section 2.13.

“Subsidiary” means, with respect to any Person (the “holder”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the holder in the holder’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity, a majority of whose outstanding Voting Securities shall at any time be owned by the holder or one more Subsidiaries of the holder. Unless expressly provided otherwise, all references herein and in any other Credit Document to any “Subsidiary” or “Subsidiaries” means a Subsidiary or Subsidiaries of the Borrower.

“Swing Line Advance” means an advance by the Swing Line Lender to the Borrower as part of a Swing Line Borrowing.

 

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“Swing Line Borrowing” means the Borrowing consisting of a Swing Line Advance made by the Swing Line Lender pursuant to Section 2.3(f) or, if an AutoBorrow Agreement is in effect, any transfer of funds pursuant to such AutoBorrow Agreement.

“Swing Line Lender” means ▇▇▇▇▇ Fargo.

“Swing Line Note” means the promissory note made by the Borrower payable to the order of the Swing Line Lender evidencing the indebtedness of the Borrower to the Swing Line Lender resulting from Swing Line Advances in substantially the same form as Exhibit H-2.

“Swing Line Payment Date” means (a) if an AutoBorrow Agreement is in effect, the earliest to occur of (i) the date required by such AutoBorrow Agreement, (ii) demand is made by the Swing Line Lender and (iii) the Maturity Date, or (b) if an AutoBorrow Agreement is not in effect, the earlier to occur of (i) three (3) Business Days after demand is made by the Swing Line Lender if no Default exists, and otherwise upon demand by the Swing Line Lender and (ii) the Maturity Date.

“Swing Line Sublimit Amount” means $30,000,000; provided that, on and after the Maturity Date, the Swing Line Sublimit Amount shall be zero.

“Tax Group” has the meaning assigned to it in Section 4.13 of this Agreement.

“Taxes” has the meaning set forth in Section 2.12(a).

“Termination Event” means (a) a Reportable Event with respect to a Plan, (b) the withdrawal of the Borrower or any member of the Controlled Group from a Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a Plan or the treatment of a Plan amendment as a termination, in each case under Section 4041(c) of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, or (e) any other event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan.

“TFI Holdings” means TFI Holdings, Inc., a Delaware corporation.

“TFI Holdings Acquisition” means the purchase by Borrower from Green Fuel Services, LLC of TFI Holdings pursuant to the TFI Holdings Acquisition Agreement.

“TFI Holdings Acquisition Agreement” means that certain Stock Purchase Agreement dated as of March 7, 2012 among the Borrower, HES, TFI Holdings, and Green Fuel Services, LLC.

“TFI Holdings Acquisition Documents” means the TFI Holdings Acquisition Agreement and all agreements, assignments, deeds, conveyances, certificates and other documents and instruments now or hereafter executed and delivered by the Borrower pursuant to the TFI Holdings Acquisition Agreement or in connection with the TFI Holdings Acquisition.

“Title Policy” has the meaning set forth in Section 5.17.

“Total Debt” means, for any Person, without duplication: (a) debt for borrowed money and all obligations owing in respect of bonds, debentures, loan agreements and similar instruments, (b) all purchase money debt and debt owing in respect of the deferred purchase price of Property or services, including acquisitions (including, without limitation, any earn-out obligations only to the extent (1) payable in cash and (2) required to be recorded as a liability on the balance sheet in accordance with

 

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GAAP, contingent obligations, or other similar obligations associated with such purchase, and including obligations that are non-recourse to the credit of such person or entity but are secured by the assets of such person or entity), (c) all amounts owing in respect of letters of credit, bankers acceptances and similar instruments, (d) attributable debt owing in respect of capital leases, synthetic leases and securitizations, (e) preferred stock and comparable equity interests providing for mandatory redemption, sinking fund or other like payment or containing cash pay dividends or other debt-like features, (f) guaranty and other support obligations (contingent or otherwise) owing in respect of Total Debt, (g) Total Debt of any partnership or joint venture in which the Borrower or any of its Restricted Subsidiaries is a general partner or joint venture (to the extent of any recourse owing by the Borrower or any of its Restricted Subsidiaries), and (h) indebtedness or obligations of others of the kinds referred to in clauses (a) through (g) secured by any lien on or in respect of any Property of such person or entity, but in all cases excluding such Person’s accounts payable to trade creditors for goods or services and current operating liabilities (other than for borrowed money) which in each case is not more than 90 days past due, in each case incurred in the ordinary course of business, as presently conducted.

“Transactions” means, collectively, (a) the initial borrowings and other extensions of credit under this Agreement, (b) the payment in full of all Existing Debt (other than customary indemnification obligations which survive termination of the Existing Credit Agreement and which are not yet due and payable), (c) the TFI Holdings Acquisition, (d) the Bond Issuance, and (e) the payment of fees, commissions and expenses in connection with each of the foregoing.

“Type” has the meaning set forth in Section 1.4.

“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in the State of New York (or any other applicable jurisdiction, as the context may require).

“Unrestricted Subsidiaries” means (a) any Foreign Subsidiary of the Borrower, (b) any Non-Material Domestic Subsidiary, and (c) China Water and Drinks, Inc.

“Voting Securities” means (a) with respect to any corporation, capital stock of the corporation having general voting power under ordinary circumstances to elect directors of such corporation (irrespective of whether at the time stock of any other class or classes shall have or might have special voting power or rights by reason of the happening of any contingency), (b) with respect to any partnership, any partnership interest or other ownership interest having general voting power to elect the general partner or other management of the partnership or other Person, and (c) with respect to any limited liability company, membership certificates or interests having general voting power under ordinary circumstances to elect managers of such limited liability company.

“▇▇▇▇▇▇▇▇ Equipment” means approximately 30 pieces of Certificated Equipment, the certificates of title corresponding to which have been transmitted to the North Dakota Secretary of State for processing to add a lien in favor of ▇▇▇▇▇▇▇▇ Financial Corp.; provided that ▇▇▇▇▇▇▇▇ Financial Corp. has agreed to release their lien in such certificates of title upon receipt and to forward such certificates of title to the Borrower or a Restricted Subsidiary promptly upon ▇▇▇▇▇▇▇▇ Financial Corp.’s receipt of such certificates of title.

“▇▇▇▇▇ Fargo” means ▇▇▇▇▇ Fargo Bank, National Association.

Section 1.2 Computation of Time Periods. In this Agreement in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”.

 

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Section 1.3 Accounting Terms; Changes in GAAP.

(a) All accounting terms not specifically defined in this Agreement shall be construed in accordance with GAAP applied on a consistent basis with those applied in the preparation of the financial statements delivered to the Administrative Agent for the fiscal year ended December 31, 2011.

(b) Unless otherwise indicated, all financial statements of the Borrower, all calculations for compliance with covenants in this Agreement, all determinations of the Applicable Margin, and all calculations of any amounts to be calculated under the definitions in Section 1.1 shall be based upon the consolidated accounts of the Borrower and its Restricted Subsidiaries in accordance with GAAP and consistent with the principles of consolidation applied in preparing the Borrower’s Financial Statements referred to in Section 4.4.

(c) If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Credit Document, and either the Borrower or the Majority Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Majority Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

Section 1.4 Classes and Types of Advances. Advances are distinguished by “Class” and “Type”. The “Class” of an Advance refers to the determination of whether such Advance is a Revolving Advance or a Swing Line Advance. The “Type” of an Advance refers to the determination of whether such Advance is a Base Rate Advance or a Eurodollar Advance.

Section 1.5 Miscellaneous. Article, Section, Schedule, and Exhibit references are to this Agreement, unless otherwise specified. All references to instruments, documents, contracts, and agreements (including this Agreement) are references to such instruments, documents, contracts, and agreements as the same may be amended, supplemented, and otherwise modified from time to time, unless otherwise specified and shall include all schedules and exhibits thereto unless otherwise specified. 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. Any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to the restrictions contained herein). The words “hereof”, “herein”, and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “including” means “including, without limitation,”. Paragraph headings have been inserted in this Agreement as a matter of convenience for reference only and it is agreed that such paragraph headings are not a part of this Agreement and shall not be used in the interpretation of any provision of this Agreement.

ARTICLE 2

CREDIT FACILITIES

Section 2.1 Commitments.

(a) Commitment. Each Lender severally agrees, on the terms and conditions set forth in this Agreement, to make Revolving Advances to the Borrower from time to time on any Business Day during the period from the Effective Date until the Maturity Date; provided that after giving effect to such Revolving Advances, the sum of the aggregate outstanding amount of all Revolving Advances and all Swing Line Advances

 

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plus the Letter of Credit Exposure, shall not exceed the aggregate Commitments in effect at such time. Each Revolving Borrowing shall (A) if comprised of Base Rate Advances be in an aggregate amount not less than $500,000 and in integral multiples of $50,000 in excess thereof, (B) if comprised of Eurodollar Advances be in an aggregate amount not less than $1,000,000 and in integral multiples of $500,000 in excess thereof, and (C) consist of Revolving Advances of the same Type made on the same day by the Lenders ratably according to their respective Commitments. Within the limits of each Lender’s Commitment, the Borrower may from time to time borrow, prepay pursuant to Section 2.4, and reborrow under this Section 2.1(a).

(b) [Reserved].

(c) Reduction of the Commitments.

(i) Commitments. The Borrower shall have the right, upon at least three Business Days’ irrevocable notice to the Administrative Agent, to terminate in whole or reduce in part the unused portion of the Commitments; provided that each partial reduction shall be in a minimum amount of $500,000 and in integral multiples of $50,000 in excess thereof. Any reduction or termination of the Commitments pursuant to this Section 2.1(c)(i) shall be applied ratably to each Lender’s Commitment and shall be permanent, with no obligation of the Lenders to reinstate such Commitments, and the applicable Commitment Fees shall thereafter be computed on the basis of the Commitments, as so reduced.

(ii) Defaulting Lender. At any time when a Lender is then a Defaulting Lender, the Borrower, at the Borrower’s election, may elect to terminate such Defaulting Lender’s Commitment hereunder; provided that (A) such termination must be of the Defaulting Lender’s entire Commitment, (B) the Non-Defaulting Lenders shall each have the option to accept an assignment of the Defaulting Lender’s Commitment pursuant to Section 2.13 in lieu of a termination of Commitments pursuant to this Section 2.1(c)(ii), (C) to the extent that the Non-Defaulting Lenders do not take an assignment as provided in the immediately preceding clause (B), the Borrower shall pay all amounts owed by the Borrower to such Defaulting Lender in such Defaulting Lender’s capacity as a Lender under this Agreement and under the other Credit Documents (including principal of and interest on the Revolving Advances owed to such Defaulting Lender, accrued Commitment Fees (subject to Section 2.6(a)), and letter of credit fees but specifically excluding any amounts owing under Section 2.9 as result of such payment of such Advances) and shall deposit with the Administrative Agent into the Cash Collateral Account cash collateral in the amount equal to such Defaulting Lender’s ratable share of the Letter of Credit Exposure (but only to the extent such Letter of Credit Exposure that has not been reallocated pursuant to Section 2.14), and (C) a Defaulting Lender’s Commitment may be terminated by the Borrower under this Section 2.1(c)(ii) if and only if at such time, the Borrower has elected, or is then electing, to terminate the Commitments of all then existing Defaulting Lenders. Upon written notice to the Defaulting Lender and Administrative Agent of the Borrower’s election to terminate a Defaulting Lender’s Commitment pursuant to this clause (iii) and the payment and deposit of amounts required to be made by the Borrower under clause (B) and (C) above, (1) such Defaulting Lender shall cease to be a “Lender” hereunder for all purposes except that such Lender’s rights and obligations as a Lender under Sections 2.10, 2.12, 8.5 and 9.2 shall continue with respect to events and occurrences occurring before or concurrently with its ceasing to be a “Lender”, as applicable, hereunder, (2) such Defaulting Lender’s Commitment shall be deemed terminated, and (3) such Defaulting Lender shall be relieved of its obligations hereunder as a “Lender” except as to its obligations under Section 8.5 shall continue with respect to events and occurrences occurring before or concurrently with its ceasing to be a “Lender”, as applicable, hereunder, provided that, any such termination will not be deemed to be a waiver or release of any claim that Borrower, the Administrative Agent, the Swing Line Lender, any Issuing Lender

 

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or any Lender may have against such Defaulting Lender. Notwithstanding anything herein to the contrary, the Non-Defaulting Lenders’ option to take an assignment as provided in Section 2.1(c)(ii)(B) may be exercised by a Non-Defaulting Lender in its sole and absolute discretion and nothing contained herein shall obligate any Non-Defaulting Lender to take any such assignment.

(d) Notes. The indebtedness of the Borrower to each Lender resulting (i) from Revolving Advances owing to such Lender shall be evidenced by a Revolving Note and (ii) from Swing Line Advances owing to the Swing Line Lender, as set forth in Section 2.3(f) below, shall be evidenced by a Swing Line Note.

Section 2.2 Letters of Credit

(a) Commitment for Letters of Credit. Subject to the terms and conditions set forth in this Agreement, the Issuing Lender agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.2, from time to time on any Business Day during the period from the Effective Date until the Maturity Date, to issue, increase or extend the expiration date of, Letters of Credit for the account of any Credit Party, provided that no Letter of Credit will be issued, increased, or extended:

(i) if such issuance, increase, or extension would cause the Letter of Credit Exposure to exceed the lesser of (A) the Letter of Credit Maximum Amount and (B) an amount equal to (1) the aggregate Commitments in effect at such time minus (2) the sum of the aggregate outstanding amount of all Revolving Advances and all Swing Line Advances;

(ii) unless such Letter of Credit has an expiration date not later than the earlier of (A) one year after its issuance or extension and (B) five Business Days prior to the Maturity Date (an “Acceptable Letter of Credit Maturity Date”); provided that, (1) if the Commitments are terminated in whole pursuant to Section 2.1(c)(i), the Borrower shall either (A) deposit into the Cash Collateral Account cash in an amount equal to 102% of the Letter of Credit Exposure for the Letters of Credit which have an expiry date beyond the date the Commitments are terminated or (B) provide a replacement letter of credit (or other security) reasonably acceptable to the Administrative Agent and the Issuing Lender in an amount equal to 102% of the Letter of Credit Exposure, and (2) any such Letter of Credit with a one-year tenor may expressly provide for automatic annual extensions so long as such Letter of Credit expressly allows the Issuing Lender, at its sole discretion, to elect not to provide any such extension; provided that, in any event, any such automatic extension may not result in an expiration date that occurs after the fifth Business Day prior to the Maturity Date;

(iii) unless such Letter of Credit is (A) a standby letter of credit not supporting the repayment of indebtedness for borrowed money of any Person, or (B) with the consent of the Issuing Lender and so long as the Borrower has agreed to such additional fees which may apply, a commercial letter of credit;

(iv) unless such Letter of Credit is in form and substance acceptable to the Issuing Lender in its sole discretion;

(v) unless the Borrower has delivered to the Issuing Lender a completed and executed Letter of Credit Application; provided that, if the terms of any Letter of Credit Application conflicts with the terms of this Agreement, the terms of this Agreement shall control;

(vi) unless such Letter of Credit is governed by (A) the Uniform Customs and Practice for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600, or (B) the International Standby Practices (ISP98), International Chamber of Commerce Publication No. 590, in either case, including any subsequent revisions thereof approved by a Congress of the International Chamber of Commerce and adhered to by the Issuing Lender;

 

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(vii) if any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Lender from issuing, increasing or extending such Letter of Credit, or any Legal Requirement applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain from, the issuance, increase or extension of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Lender with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Lender is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon the Issuing Lender any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which the Issuing Lender in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;

(viii) if the issuance, increase or extension of such Letter of Credit would violate one or more policies of the Issuing Lender applicable to letters of credit generally;

(ix) if Letter of Credit is to be denominated in a currency other than Dollars;

(x) if any Lender is at such time a Defaulting Lender hereunder, unless the Issuing Lender has entered into satisfactory arrangements with the Borrower or such Lender to eliminate the Issuing Lender’s risk with respect to such Lender; or

(xi) if such Letter of Credit supports the obligations of any Person in respect of (x) a lease of Real Property, or (y) an employment contract if the Issuing Lender reasonably determines that the Borrower’s obligation to reimburse any draws under such Letter of Credit may be limited.

(b) Requesting Letters of Credit. Each Letter of Credit shall be issued pursuant to a Letter of Credit Application given by the Borrower to the Administrative Agent and the Issuing Lender by facsimile or other writing not later than 12:00 p.m. (Charlotte, North Carolina, time) on the third Business Day before the proposed date of issuance for the Letter of Credit. Each Letter of Credit Application shall be fully completed and shall specify the information required therein. Each Letter of Credit Application shall be irrevocable and binding on the Borrower. Subject to the terms and conditions hereof, the Issuing Lender shall before 3:00 p.m. (Charlotte, North Carolina, time) on the date such Letter of Credit is requested issue such Letter of Credit to the beneficiary of such Letter of Credit.

(c) Reimbursements for Letters of Credit; Funding of Participations.

(i) With respect to any Letter of Credit, in accordance with the related Letter of Credit Application, the Borrower agrees to pay on demand to the Administrative Agent on behalf of the Issuing Lender an amount equal to any amount paid by the Issuing Lender under such Letter of Credit. Upon the Issuing Lender’s demand for payment under the terms of a Letter of Credit Application, the Borrower may, with a written notice (which may be by email), request that the Borrower’s obligations to the Issuing Lender thereunder be satisfied with the proceeds of a Revolving Borrowing consisting of Base Rate Advances, in the same amount (notwithstanding any minimum size or increment limitations on individual Revolving Borrowings). If the Borrower does not make such request and does not otherwise make the payments demanded by the Issuing Lender as required under this Agreement or the Letter of Credit Application, then the

 

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Borrower shall be deemed for all purposes of this Agreement to have requested such a Revolving Advance in the same amount and the transfer of the proceeds thereof to satisfy the Borrower’s obligations to the Issuing Lender, and the Borrower hereby unconditionally and irrevocably authorizes, empowers, and directs the Lenders to make such Revolving Advance, to transfer the proceeds thereof to the Issuing Lender in satisfaction of such obligations, and to record and otherwise treat such payments as a Revolving Advance to the Borrower. The Administrative Agent and each Lender may record and otherwise treat the making of such Revolving Borrowings as the making of a Revolving Borrowing to the Borrower under this Agreement as if requested by the Borrower. Nothing herein is intended to release any of the Borrower’s obligations under any Letter of Credit Application, but only to provide an additional method of payment therefor. The making of any Revolving Borrowing under this Section 2.2(c) shall not constitute a cure or waiver of any Default, other than the payment Default which is satisfied by the application of the amounts deemed advanced hereunder, caused by the Borrower’s failure to comply with the provisions of this Agreement or the Letter of Credit Application.

(ii) Each Lender (including the Lender acting as Issuing Lender) shall, upon notice from the Administrative Agent that the Borrower has requested or is deemed to have requested a Revolving Advance pursuant to Section 2.3 and regardless of whether (A) the conditions in Section 3.2 have been met, (B) such notice complies with Section 2.3, or (C) a Default exists, make funds available to the Administrative Agent for the account of the Issuing Lender in an amount equal to such Lender’s Revolving Pro Rata Share of the amount of such Revolving Advance not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon each Lender that so makes funds available shall be deemed to have made a Revolving Advance to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the Issuing Lender.

(iii) If any such Lender shall not have so made its Revolving Advance available to the Administrative Agent pursuant to this Section 2.2, such Lender agrees to pay interest thereon for each day from such date until the date such amount is paid at the lesser of (A) the Federal Funds Rate for such day for the first three days and thereafter the interest rate applicable to the Revolving Advance and (B) the Maximum Rate. Whenever, at any time after the Administrative Agent has received from any Lender such Lender’s Revolving Advance, the Administrative Agent receives any payment on account thereof, the Administrative Agent will pay to such Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s Revolving Advance was outstanding and funded), which payment shall be subject to repayment by such Lender if such payment received by the Administrative Agent is required to be returned. Each Lender’s obligation to make the Revolving Advance pursuant to this Section 2.2 shall be absolute and unconditional and shall not be affected by any circumstance, including (1) any set-off, counterclaim, recoupment, defense or other right which such Lender or any other Person may have against the Issuing Lender, the Administrative Agent or any other Person for any reason whatsoever; (2) the occurrence or continuance of a Default or the termination of the Commitments; (3) any breach of this Agreement by any Credit Party or any other Lender; or (4) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

(d) Participations. Upon the date of the issuance or increase of a Letter of Credit, the Issuing Lender shall be deemed to have sold to each other Lender and each other Lender shall have been deemed to have purchased from the Issuing Lender a participation in the related Letter of Credit Obligations equal to such Lender’s Revolving Pro Rata Share at such date and such sale and purchase shall otherwise be in accordance with the terms of this Agreement. The Issuing Lender shall promptly notify each such participant Lender by facsimile, telephone, or electronic mail (PDF) of each Letter of Credit issued or increased and the actual dollar amount of such Lender’s participation in such Letter of Credit.

 

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(e) Obligations Unconditional. The obligations of the Borrower under this Agreement in respect of each Letter of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, notwithstanding the following circumstances:

(i) any lack of validity or enforceability of any Letter of Credit Documents;

(ii) any amendment or waiver of or any consent to departure from any Letter of Credit Documents;

(iii) the existence of any claim, set-off, defense or other right which any Credit Party may have at any time against any beneficiary or transferee of such Letter of Credit (or any Persons for whom any such beneficiary or any such transferee may be acting), the Issuing Lender, any Lender or any other person or entity, whether in connection with this Agreement, the transactions contemplated in this Agreement or in any Letter of Credit Documents or any unrelated transaction;

(iv) any statement or any other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect to the extent the Issuing Lender would not be liable therefor pursuant to the following paragraph (g);

(v) payment by the Issuing Lender under such Letter of Credit against presentation of a draft or certificate which does not comply with the terms of such Letter of Credit; or

(vi) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing (other than payment in full in cash of the obligations hereunder in respect of such Letters of Credit);

provided, however, that nothing contained in this paragraph (e) shall be deemed to constitute a waiver of any remedies of the Borrower in connection with the Letters of Credit.

(f) Prepayments of Letters of Credit. In the event that any Letter of Credit shall be outstanding on or prior to the Acceptable Letter of Credit Maturity Date, the Borrower shall pay to the Administrative Agent an amount equal to 102% of the Letter of Credit Exposure allocable to such Letter of Credit, such amount to be due and payable on the Acceptable Letter of Credit Maturity Date, and to be held in the Cash Collateral Account and applied in accordance with paragraph (h) below (it being understood that any amounts owing in respect of Letters of Credit that have been drawn and unreimbursed shall constitute Revolving Advances in accordance with clause (c) above).

(g) Liability of Issuing Lender. The Borrower assumes all risks of the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such Letter of Credit. Neither the Issuing Lender nor any of its officers or directors shall be liable or responsible for:

(i) the use which may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith;

 

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(ii) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged;

(iii) payment by the Issuing Lender against presentation of documents which do not comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to the relevant Letter of Credit; or

(iv) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit (INCLUDING THE ISSUING LENDER’S OWN NEGLIGENCE),

except that the Borrower shall have a claim against the Issuing Lender, and the Issuing Lender shall be liable to, and shall promptly pay to, the Borrower, to the extent of any direct, as opposed to consequential, damages suffered by the Borrower which the Borrower proves were caused by (A) the Issuing Lender’s willful misconduct, gross negligence or breach of contract in bad faith in determining whether documents presented under a Letter of Credit comply with the terms of such Letter of Credit or (B) the Issuing Lender’s willful failure to make lawful payment under any Letter of Credit after the presentation to it of a draft and certificate strictly complying with the terms and conditions of such Letter of Credit. In furtherance and not in limitation of the foregoing, the Issuing Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.

(h) Cash Collateral Account.

(i) If the Borrower is required to deposit funds in the Cash Collateral Account pursuant to Sections 2.2(a)(ii), 2.2(i), 2.14(c), 7.2(b) or 7.3(b) or any other provision under this Agreement, then the Borrower and the Administrative Agent shall establish the Cash Collateral Account and the Borrower shall execute any documents and agreements, including the Administrative Agent’s standard form assignment of deposit accounts, that the Administrative Agent requests in connection therewith to establish the Cash Collateral Account and grant the Administrative Agent an Acceptable Security Interest in such account and the funds therein. The Borrower hereby pledges to the Administrative Agent and grants the Administrative Agent a security interest in the Cash Collateral Account, whenever established, all funds held in the Cash Collateral Account from time to time, and all proceeds thereof as security for the payment of the Secured Obligations.

(ii) Funds held in the Cash Collateral Account shall be held as cash collateral for obligations with respect to Letters of Credit and promptly applied by the Administrative Agent at the request of the Issuing Lender to any reimbursement or other obligations under Letters of Credit that exist or occur. To the extent that any surplus funds are held in the Cash Collateral Account above the Letter of Credit Exposure during the existence of an Event of Default the Administrative Agent may (A) hold such surplus funds in the Cash Collateral Account as cash collateral for the Secured Obligations or (B) apply such surplus funds to any Secured Obligations in any manner directed by the Majority Lenders. If no Default exists, the Administrative Agent shall release any surplus funds held in the Cash Collateral Account above the Letter of Credit Exposure to the Borrower at the Borrower’s request.

(iii) Funds held in the Cash Collateral Account may be invested in Liquid Investments maintained with, and under the sole dominion and control of, the Administrative Agent or in another investment if mutually agreed upon by the Borrower and the Administrative Agent, but the Administrative Agent shall have no obligation to make any investment of the funds

 

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therein. The Administrative Agent shall exercise reasonable care in the custody and preservation of any funds held in the Cash Collateral Account and shall be deemed to have exercised such care if such funds are accorded treatment substantially equivalent to that which the Administrative Agent accords its own Property, it being understood that the Administrative Agent shall not have any responsibility for taking any necessary steps to preserve rights against any parties with respect to any such funds.

(i) Defaulting Lender. If, at any time, a Defaulting Lender exists hereunder, then, at the request of the Issuing Lender subject to Section 2.14(c), the Borrower shall deposit funds with Administrative Agent into the Cash Collateral Account an amount equal to such Defaulting Lender’s pro rata share of the Letter of Credit Exposure.

(j) Letters of Credit Issued for Guarantors. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, any Guarantor, the Borrower shall be obligated to reimburse the Issuing Lender hereunder for any and all drawings under such Letter of Credit issued hereunder by the Issuing Lender. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of any Guarantor or the inures to the benefit of the Borrower, and that the Borrower’s business (indirectly or directly) derives substantial benefits from the businesses of such other Persons.

Section 2.3 Advances.

(a) Notice. Each Borrowing (other than the Borrowings to be made on the Effective Date), shall be made pursuant to the applicable Notice of Borrowing given by Borrower to Administrative Agent not later than (i) 2:00 p.m. (Charlotte, North Carolina time) on the third Business Day before the date of the proposed Borrowing, in the case of a Eurodollar Advance or (ii) 2:00 p.m. (Charlotte, North Carolina time) on the Business Day before the date of the proposed Borrowing, in the case of a Base Rate Advance, by the Borrower to the Administrative Agent, which shall give to each Lender prompt notice of such proposed Borrowing, by facsimile or telex. The Borrowings to be made on the Effective Date shall be made pursuant to the applicable Notices of Borrowing given not later than 2:00 p.m. (Charlotte, North Carolina time) on the Effective Date by the Borrower to the Administrative Agent, which shall give to each Lender prompt notice of such proposed Borrowing, by facsimile, email or telex. Each Notice of Borrowing shall be by facsimile, email or telex, confirmed promptly by the Borrower with a hard copy (other than with respect to notice sent by facsimile), specifying (i) the requested date of such Borrowing, (ii) the requested Type and Class of Advances comprising such Borrowing, (iii) the aggregate amount of such Borrowing, and (iv) if such Borrowing is to be comprised of Eurodollar Advances, the requested Interest Period for each such Advance; provided that all Borrowings to be made on the Effective Date shall consist only of Base Rate Advance which may, subject to the terms of this Agreement, be thereafter Converted into Eurodollar Advance. In the case of a proposed Borrowing comprised of Eurodollar Advances, the Administrative Agent shall promptly notify each Lender of the applicable interest rate under Section 2.7(b). Each Lender shall, before 1:00 p.m. (Charlotte, North Carolina time) on the date of such Borrowing, make available for the account of its applicable Lending Office to the Administrative Agent at its address referred to in Section 9.9, or such other location as the Administrative Agent may specify by notice to the Lenders, in same day funds, such Lender’s pro rata share of such Borrowing. After the Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article 3, the Administrative Agent will make such funds available to the Borrower at its account with the Administrative Agent or as otherwise directed by the Borrower with written notice to the Administrative Agent.

(b) Conversions and Continuations. In order to elect to Convert or continue a Revolving Advance under this paragraph, the Borrower shall deliver an irrevocable Notice of Continuation or Conversion to the Administrative Agent at the Administrative Agent’s office no later than 2:00 p.m. (Charlotte, North Carolina time) (i) on the Business Day before the date of the proposed conversion date in the case of a Conversion to a Base Rate Advance and (ii) at least three Business Days in advance of the proposed Conversion or continuation

 

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date in the case of a Conversion to, or a continuation of, a Eurodollar Advance. Each such Notice of Conversion or Continuation shall be in writing or by telex, email or facsimile confirmed promptly by the Borrower with a hard copy (other than with respect to notice sent by facsimile), specifying (i) the requested Conversion or continuation date (which shall be a Business Day), (ii) the amount, Type, and Class of the Advance to be Converted or continued, (iii) whether a Conversion or continuation is requested and, if a Conversion, into what Type of Advance, and (iv) in the case of a Conversion to, or a continuation of, a Eurodollar Advance, the requested Interest Period. Promptly after receipt of a Notice of Continuation or Conversion under this paragraph, the Administrative Agent shall provide each Lender with a copy thereof and, in the case of a Conversion to or a Continuation of a Eurodollar Advance, notify each Lender of the applicable interest rate under Section 2.7(b). The portion of Advances comprising part of the same Borrowing that are Converted to Advances of another Type shall constitute a new Borrowing.

(c) Certain Limitations. Notwithstanding anything in paragraphs (a) and (b) above:

(i) at no time shall there be more than ten Interest Periods applicable to outstanding Eurodollar Advances;

(ii) the Borrower may not select Eurodollar Advances for any Borrowing at any time when a Default has occurred and is continuing;

(iii) if any Lender shall, at least one Business Day before the date of any requested Borrowing, notify the Administrative Agent that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful, for such Lender or its applicable Lending Office to perform its obligations under this Agreement to make Eurodollar Advances or to fund or maintain Eurodollar Advances, (A) the obligation of such Lender to make such Eurodollar Advance as part of the requested Borrowing or for any subsequent Borrowing shall be suspended until such Lender shall notify the Borrower that the circumstances causing such suspension no longer exist and such Lender’s portion of such requested Borrowing or any subsequent Borrowing of Eurodollar Advances shall be made in the form of a Base Rate Advance, and (B) such Lender agrees to use commercially reasonable efforts (consistent with its internal policies and legal and regulatory restrictions) to designate a different Lending Office if the making of such designation would avoid the effect of this paragraph and would not, in the reasonable judgment of such Lender, be otherwise materially disadvantageous to such Lender;

(iv) if the Administrative Agent is unable to determine the Eurodollar Rate for Eurodollar Advances comprising any requested Borrowing, the right of the Borrower to select Eurodollar Advances for such Borrowing or for any subsequent Borrowing shall be suspended until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist, and each Advance comprising such Borrowing shall be a Base Rate Advance;

(v) if the Majority Lenders shall, at least one Business Day before the date of any requested Borrowing, notify the Administrative Agent that the Eurodollar Rate for Eurodollar Advances comprising such Borrowing will not adequately reflect the cost to such Lenders of making or funding their respective Eurodollar Advances, as the case may be, for such Borrowing, the right of the Borrower to select Eurodollar Advances for such Borrowing or for any subsequent Borrowing shall be suspended until the Administrative Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist, and each Advance comprising such Borrowing shall be a Base Rate Advance; and

 

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(vi) if the Borrower shall fail to select the duration or continuation of any Interest Period for any Eurodollar Advances in accordance with the provisions contained in the definition of Interest Period in Section 1.1 and paragraph (b) above, the Administrative Agent will forthwith so notify the Borrower and the Lenders and such Advances will be made available to the Borrower on the date of such Borrowing as Eurodollar Rate Advances having an Interest Period of one-month, or, if an existing Advance, Convert into Base Rate Advances.

(d) Notices Irrevocable. Each Notice of Borrowing and Notice of Continuation or Conversion delivered by the Borrower hereunder, including its deemed request for borrowing made under Section 2.2(c), shall be irrevocable and binding on the Borrower.

(e) Administrative Agent Reliance. Unless the Administrative Agent shall have received notice from a Lender before the date of any Revolving Borrowing that such Lender will not make available to the Administrative Agent such Lender’s applicable pro rata share of any Borrowing, the Administrative Agent may assume that such Lender has made its applicable pro rata share of such Borrowing available to the Administrative Agent on the date of such Borrowing in accordance with Section 2.3(a), and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made its applicable pro rata share of such Borrowing available to the Administrative Agent, such Lender and the Borrower severally agree to immediately repay to the Administrative Agent on demand such corresponding amount, together with interest on such amount, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Borrower, the interest rate applicable on such day to Advances comprising such Borrowing and (ii) in the case of such Lender, the lesser of (A) the Federal Funds Rate for such day and (B) the Maximum Rate. If such Lender shall repay to the Administrative Agent such corresponding amount and interest as provided above, such corresponding amount so repaid shall constitute such Lender’s Advance as part of such Borrowing for purposes of this Agreement even though not made on the same day as the other Advances comprising such Borrowing. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make its applicable pro rata share of such Borrowing to the Administrative Agent.

(f) Swing Line Advances.

(i) Facility. On the terms and conditions set forth in this Agreement, and if an AutoBorrow Agreement is in effect, subject to the terms and conditions of such AutoBorrow Agreement, the Swing Line Lender may, in its sole discretion, from time-to-time on any Business Day during the period from the date of this Agreement until the last Business Day occurring before the Maturity Date, make Swing Line Advances under the Swing Line Note to the Borrower which shall be due and payable on the Swing Line Payment Date (except that no Swing Line Advance may mature after the Maturity Date), and in an aggregate outstanding principal amount not to exceed the Swing Line Sublimit Amount at any time; provided that (A) after giving effect to such Swing Line Advance, the sum of the aggregate amount of all Revolving Advances plus the Letter of Credit Exposure plus the aggregate outstanding amount of all Swing Line Advances, shall not exceed the aggregate Commitments in effect at such time; (B) no Swing Line Advance shall be made by the Swing Line Lender if the conditions set forth in Section 3.2 have not been met as of the date of such Swing Line Advance, it being agreed by the Borrower that the giving of the applicable Notice of Revolving Borrowing and the acceptance by the Borrower of the proceeds of such Swing Line Advance shall constitute a representation and warranty by the Borrower that on the date of such Swing Line Advance such conditions have been met; (C) only if an AutoBorrow Agreement is not in effect, each Swing Line Advance shall be in an aggregate

 

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amount not less than $100,000 and in integral multiples of $50,000 in excess thereof; and (D) if an AutoBorrow Agreement is in effect, such additional terms and conditions of such AutoBorrow Agreement shall have been satisfied, and in the event that any of the terms of this Section 2.3(f)(i) conflict with such AutoBorrow Agreement, the terms of the AutoBorrow Agreement shall govern and control. The indebtedness of the Borrower to the Swing Line Lender resulting from Swing Line Advances shall be evidenced by the Swing Line Note. No Lender shall have any rights or obligations under any AutoBorrow Agreement, but each Lender shall have the obligation to purchase and fund risk participations in the Swing Line Advances and to refinance Swing Line Advances as provided below.

(ii) Prepayment. Within the limits expressed in this Agreement, amounts advanced pursuant to Section 2.3(f)(i) may from time to time be borrowed, prepaid without penalty, and reborrowed. If the aggregate outstanding principal amount of the Swing Line Advances ever exceeds the Swing Line Sublimit Amount, the Borrower shall prepay to the Swing Line Lender outstanding principal of the Swing Line Advances such that such excess is eliminated. If an AutoBorrow Agreement is in effect, each prepayment of a Swing Line Borrowing shall be made as provided in such AutoBorrow Agreement.

(iii) Reimbursements for Swing Line Obligations.

(A) With respect to the Swing Line Advances and the interest, premium, fees, and other amounts owed by the Borrower to the Swing Line Lender in connection with the Swing Line Advances, the Borrower agrees to pay to the Swing Line Lender such amounts when due and payable to the Swing Line Lender under the terms of this Agreement and, if an AutoBorrow Agreement is in effect, in accordance with the terms of such AutoBorrow Agreement. If the Borrower does not pay to the Swing Line Lender any such amounts when due and payable to the Swing Line Lender, the Swing Line Lender may upon notice to the Administrative Agent request the satisfaction of such obligation by the making of a Revolving Borrowing in the amount of any such amounts not paid when due and payable. Upon such request, the Borrower shall be deemed to have requested the making of a Revolving Borrowing in the amount of such obligation and the transfer of the proceeds thereof to the Swing Line Lender. The Administrative Agent shall promptly forward notice of such Revolving Borrowing to the Borrower and the Lenders, and each Lender shall, regardless of whether (A) the conditions in Section 3.2 have been met, (B) such notice complies with Section 2.3(a), or (C) a Default exists, make available such Lender’s ratable share of such Revolving Borrowing to the Administrative Agent, and the Administrative Agent shall promptly deliver the proceeds thereof to the Swing Line Lender for application to such amounts owed to the Swing Line Lender. The Borrower hereby unconditionally and irrevocably authorizes, empowers, and directs the Swing Line Lender to make such requests for Revolving Borrowings on behalf of the Borrower, and for the Lenders to make Revolving Advances to the Administrative Agent for the benefit of the Swing Line Lender in satisfaction of such obligations. The Administrative Agent and each Lender may record and otherwise treat the making of such Revolving Borrowings as the making of a Revolving Borrowing to the Borrower under this Agreement as if requested by the Borrower. Nothing herein is intended to release the Borrower’s obligations under the Swing Line Note, but only to provide an additional method of payment therefor. The making of any Revolving Borrowing under this Section 2.3(f)(iii)(A) shall not constitute a cure or waiver of any Default or Event of Default, other than the payment Default or Event of Default which is satisfied by the application of the amounts deemed advanced hereunder, caused by the Borrower’s failure to comply with the provisions of this Agreement or the Swing Line Note.

 

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(B) If at any time, the Commitments shall have expired or be terminated while any Swing Line Advance is outstanding, each Lender, at the sole option of the Swing Line Lender, shall either (A) notwithstanding the expiration or termination of the Commitments, make a Revolving Advance as a Base Rate Advance, or (B) be deemed, without further action by any Person, to have purchased from the Swing Line Lender a participation in such Swing Line Advance, in either case in an amount equal to the product of such Lender’s Revolving Pro Rata Share times the outstanding aggregate principal balance of the Swing Line Advances. The Administrative Agent shall notify each such Lender of the amount of such Revolving Advance or participation, and such Lender will transfer to the Administrative Agent for the account of the Swing Line Lender on the next Business Day following such notice, in immediately available funds, the amount of such Revolving Advance or participation.

(C) If any such Lender shall not have so made its Revolving Advance or its percentage participation available to the Administrative Agent pursuant to this Section 2.3(f), such Lender agrees to pay interest thereon for each day from the date Administrative Agent delivers notice to such Lender pursuant to Section 2.3(f)(iii)(A) or (B) until the date such amount is paid at a per annum rate equal to the lesser of (A) the Federal Funds Rate for such day and for the first three days after such date and thereafter the interest rate applicable to the Revolving Advance and (B) the Maximum Rate. Whenever, at any time after the Administrative Agent has received from any Lender such Lender’s Revolving Advance or participating interest in a Swing Line Advance, the Administrative Agent receives any payment on account thereof, the Administrative Agent will pay to such Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s Revolving Advance or participating interest was outstanding and funded), which payment shall be subject to repayment by such Lender if such payment received by the Administrative Agent is required to be returned. Each Lender’s obligation to make the Revolving Advance or to purchase such participating interests pursuant to this Section 2.3(f) shall be absolute and unconditional and shall not be affected by any circumstance, including (1) any set-off, counterclaim, recoupment, defense or other right which such Lender or any other Person may have against the Swing Line Lender, the Administrative Agent or any other Person for any reason whatsoever; (2) the occurrence or continuance of a Default or the termination of any Commitments; (3) any breach of this Agreement by the Borrower or any other Lender; or (4) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. Each Swing Line Advance, once so participated by any Lender, shall cease to be a Swing Line Advance with respect to that amount for purposes of this Agreement, but shall continue to be a Revolving Loan.

(iv) Method of Borrowing. If an AutoBorrow Agreement is in effect, each Swing Line Borrowing shall be made as provided in such AutoBorrow Agreement. Otherwise, and except as provided in the clause (c) above, each request for a Swing Line Advance shall be made pursuant to telephone notice to the Swing Line Lender given no later than 2:00 p.m. (Charlotte, North Carolina time) on the date of the proposed Swing Line Advance, promptly confirmed by a completed and executed Notice of Revolving Borrowing sent via facsimile, telex or, unless otherwise required by the Administrative Agent or Swing Line Lender prior to such delivery, electronic mail (PDF), to the Administrative Agent and the Swing Line Lender. The Swing Line Lender will promptly make the Swing Line Advance available to the Borrower at the Borrower’s account with the Swing Line Lender.

 

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(v) Interest for Account of Swing Line Lender. Swing Line Lender shall be responsible for invoicing the Borrower for interest on the Swing Line Advances (provided that any failure of the Swing Line Lender to provide such invoice shall not release the Borrower from its obligation to pay such interest). Until each Lender funds its Revolving Advance or risk participation pursuant to clause (iii) above, interest in respect of Lender’s Revolving Pro Rata Share of the Swing Line Advances shall be solely for the account of the Swing Line Lender.

(vi) Payments Directly to Swing Line Lender. The Borrower shall make all payments of principal and interest in respect of the Swing Line Advances directly to the Swing Line Lender.

(vii) Discretionary Nature of the Swing Line Facility. Notwithstanding any terms to the contrary contained herein or in any AutoBorrow Agreement, the swing line facility provided herein or in any AutoBorrow Agreement (i) is an uncommitted facility and the Swing Line Lender may, but shall not be obligated to, make Swing Line Advances, and (ii) may be terminated at any time by the Swing Line Lender upon written notice to the Borrower.

Section 2.4 Prepayments.

(a) Right to Prepay; Ratable Prepayment. The Borrower shall have no right to prepay any principal amount of any Advance except as provided in this Section 2.4 and all notices given pursuant to this Section 2.4 shall be irrevocable and binding upon the Borrower. Each payment of any Advance pursuant to this Section 2.4 shall be made in a manner such that all Advances comprising part of the same Borrowing are paid in whole or ratably in part other than Advances owing to a Defaulting Lender as provided in Section 2.14.

(b) Optional. The Borrower may elect to prepay any of the Advances without penalty or premium except as set forth in Section 2.9 and after giving by 12:00 p.m. (Charlotte, North Carolina time) (i) in the case of Eurodollar Advances, at least three Business Days’ or (ii) in case of Base Rate Advances, one Business Day’s prior written notice to the Administrative Agent stating the proposed date and aggregate principal amount of such prepayment. If any such notice is given, the Borrower shall prepay Advances comprising part of the same Borrowing in whole or ratably in part in an aggregate principal amount equal to the amount specified in such notice, together with accrued interest to the date of such prepayment on the principal amount prepaid and amounts, if any, required to be paid pursuant to Section 2.9 as a result of such prepayment being made on such date; provided that (A) each optional prepayment of Eurodollar Advances shall be in a minimum amount not less than $500,000 and in multiple integrals of $100,000 in excess thereof (B) each optional prepayment of Base Rate Advances shall be in a minimum amount not less than $500,000 and in multiple integrals of $50,000 in excess thereof, and (C) only if an AutoBorrow Agreement is not in effect, each optional prepayment of Swing Line Advances shall be in a minimum amount not less than $250,000 and in multiple integrals of $50,000 in excess thereof. If an AutoBorrow Agreement is in effect, each prepayment of Swing Line Advances shall be made as provided in such AutoBorrow Agreement.

(c) [Reserved].

(d) Interest; Costs. Each prepayment pursuant to this Section 2.4 shall be accompanied by accrued interest on the amount prepaid to the date of such prepayment and amounts, if any, required to be paid pursuant to Section 2.9 as a result of such prepayment being made on such date.

 

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Section 2.5 Repayment.

(a) Revolving Advances. The Borrower shall pay to the Administrative Agent for the ratable benefit of each Lender the aggregate outstanding principal amount of the Revolving Advances on the Maturity Date.

(b) Swing Line Advances. Each Swing Line Advance shall be paid in full on each Swing Line Payment Date.

Section 2.6 Fees.

(a) Commitment Fees. The Borrower agrees to pay to the Administrative Agent for the account of each Lender a Commitment Fee equal to the Applicable Margin on the average daily amount by which (i) such Lender’s Commitment exceeds (ii) the sum of such Lender’s outstanding Revolving Advances plus such Lender’s Revolving Pro Rata Share of the Letter of Credit Exposure, at the rate equal to the Applicable Margin for Commitment Fees for such period; provided that, no such Commitment Fee shall accrue on the Commitment of a Defaulting Lender or be payable to a Defaulting Lender during the period such Lender remains a Defaulting Lender. Such Commitment Fee is due and payable quarterly in arrears on March 31, June 30, September 30, and December 31 of each year commencing on June 30, 2012 and on the Maturity Date. For the avoidance of doubt and for purposes of this Section 2.6(a) only, outstanding Swing Line Advances shall not reduce the amount of unused Commitment.

(b) Fees for Letters of Credit. The Borrower agrees to pay the following:

(i) Subject to Section 2.14, to the Administrative Agent for the pro rata benefit of the Lenders a per annum letter of credit fee for each Letter of Credit issued hereunder, for the period such Letter of Credit is to be outstanding, in an amount equal to 2.50% per annum on the face amount of such Letter of Credit. Such fee shall be due and payable quarterly in arrears on March 31, June 30, September 30, and December 31 of each year, and on the Maturity Date.

(ii) To the Issuing Lender, a fronting fee for each Letter of Credit equal to the greater of (A) 0.125% per annum on the face amount of such Letter of Credit and (B) $750. Such fee shall be due and payable quarterly in arrears on March 31, June 30, September 30, and December 31 of each year, and on the Maturity Date.

(iii) To the Issuing Lender such other usual and customary fees associated with any transfers, amendments, drawings, negotiations or reissuances of any Letters of Credit. Such fees shall be due and payable as requested by the Issuing Lender in accordance with the Issuing Lender’s then current fee policy.

The Borrower shall have no right to any refund of letter of credit fees previously paid by the Borrower, including any refund claimed because any Letter of Credit is canceled prior to its expiration date.

(c) Other Fee. The Borrower agrees to pay the fees as set forth in the Fee Letters.

Section 2.7 Interest.

(a) Base Rate Advances. Each Base Rate Advance shall bear interest at the Adjusted Base Rate in effect from time to time plus the Applicable Margin for Base Rate Advances for such period. The Borrower shall pay to Administrative Agent for the ratable account of each Lender all accrued but unpaid interest on such Lender’s Base Rate Advances on each March 31, June 30, September 30, and December 31 commencing on June 30, 2012, and on the Maturity Date. The Swing Line Advances shall bear interest at the Adjusted Base Rate plus the Applicable Margin for Base Rate Advances or such other per annum rate to be agreed to between the Borrower and the Swing Line Lender.

 

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(b) Eurodollar Advances. Each Eurodollar Advance shall bear interest during its Interest Period equal to at all times the Eurodollar Rate for such Interest Period plus the Applicable Margin for Eurodollar Advances for such period. The Borrower shall pay to the Administrative Agent for the ratable account of each Lender all accrued but unpaid interest on each of such Lender’s Eurodollar Advances on the last day of the Interest Period therefor (provided that for Eurodollar Advances with six, nine and twelve month Interest Periods, accrued but unpaid interest shall also be due on the day three months, six months, and nine months (as applicable) from the first day of such Interest Period), on the date any Eurodollar Advance is repaid, and on the Maturity Date, as applicable.

(c) Retroactive Adjustments of Applicable Margin. In the event that any financial statement or Compliance Certificate delivered pursuant to Section 5.2 is shown to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin applied for such Applicable Period, then (i) the Borrower shall immediately deliver to the Administrative Agent a corrected Compliance Certificate for such Applicable Period, (ii) the Applicable Margin shall be determined as if the higher Applicable Margin that would have applied were applicable for such Applicable Period (and in any event at Level VI, as set forth in Schedule I, if the inaccuracy was the result of dishonesty, fraud or willful misconduct), and (iii) the Borrower shall immediately, without further action by the Administrative Agent, any Lender or any Issuing Lender, pay to the Administrative Agent for the account of the applicable Lenders, the accrued additional interest owing as a result of such increased Applicable Margin for such Applicable Period. This Section 2.7(c) shall not limit the rights of the Administrative Agent and Lenders with respect to the Default Rate as set forth in Section 2.7(d) and Article 7. The Borrower’s obligations under this Section 2.7(c) shall survive the termination of the Commitments and the repayment of all other Obligations hereunder.

(d) Default Rate. Notwithstanding the foregoing, (i) upon the occurrence and during the continuance of an Event of Default under Section 7.1(a) or Section 7.1(g), all overdue amounts shall bear interest, after as well as before judgment, at the Default Rate and (ii) upon the occurrence and during the continuance of any Event of Default, upon the request of the Majority Lenders, all Obligations shall bear interest, after as well as before judgment, at the Default Rate from the date of the occurrence of such Event of Default under Section 7.1(a) or Section 7.1(g), or the date of such request, as applicable. Interest accrued pursuant to this Section 2.7(d) and all interest accrued but unpaid on or after the Maturity Date shall be due and payable on demand.

Section 2.8 Illegality. If any Lender shall notify the Borrower that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful, for such Lender or its applicable Lending Office to perform its obligations under this Agreement to make, maintain, or fund any Eurodollar Advances of such Lender then outstanding hereunder, (a) the Borrower shall, no later than 2:00 p.m. (Charlotte, North Carolina, time) (i) if not prohibited by law, on the last day of the Interest Period for each outstanding Eurodollar Advance or (ii) if required by such notice, on the second Business Day following its receipt of such notice, prepay all of the Eurodollar Advances of such Lender then outstanding, together with accrued interest on the principal amount prepaid to the date of such prepayment and amounts, if any, required to be paid pursuant to Section 2.9 as a result of such prepayment being made on such date, (b) such Lender shall simultaneously make a Base Rate Advance to the Borrower on such date in an amount equal to the aggregate principal amount of the Eurodollar Advances prepaid to such Lender without regard to Section 3.2 hereof, and (c) the right of the Borrower to select Eurodollar Advances from such Lender for any subsequent Borrowing shall be suspended until such Lender shall notify the Borrower that the circumstances causing such suspension no longer exist or

 

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such Lender has been replaced in accordance with Section 2.13hereof. Each Lender agrees to use commercially reasonable efforts (consistent with its internal policies and legal and regulatory restrictions) to designate a different Lending Office if the making of such designation would avoid the effect of this paragraph and would not, in the reasonable judgment of such Lender, be otherwise materially disadvantageous to such Lender.

Section 2.9 Breakage Costs.

(a) Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(i) any continuation, conversion, payment or prepayment (including any deemed payment or repayment and any reallocated repayment to Non-Defaulting Lenders provided for in Section 2.11(a) or Section 2.14) of any Advance other than a Base Rate Advance on a day other than the last day of the Interest Period for such Advance (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

(ii) any failure by the Borrower (for a reason other than the failure of such Lender to make an Advance) to prepay, borrow, continue or Convert any Advance other than a Base Rate Advance on the date or in the amount notified by the Borrower; or

(iii) any assignment of an Eurodollar Advance on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 2.13;

including any loss of anticipated profits any foreign exchange losses and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Advance, from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing. For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 2.9, the requesting Lender shall be deemed to have funded the Eurodollar Advances made by it at the Eurodollar Base Rate used in determining the Eurodollar Rate for such Advance by a matching deposit or other borrowing in the offshore interbank market for Dollars for a comparable amount and for a comparable period, whether or not such Eurodollar Advance was in fact so funded.

(b) A Certificate of a Lender setting forth in reasonable detail the amount or amounts necessary to compensate such Lender, as specified in paragraph (a) of this Section 2.9 and the circumstances giving rise thereto shall be delivered to the Borrower, which certificate shall be conclusive evidence of the amounts owed hereunder, absent manifest error. The Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10) Business Days after receipt thereof.

Section 2.10 Increased Costs.

(a) Eurodollar Advances. If any Change in Law shall:

(i) impose, modify, or deem applicable any reserve, special deposit, assessment, or similar requirement (other than by way of imposition or increase of reserve requirements included in the Eurodollar Rate Reserve Percentage) relating to any extensions of credit or other assets of, or any deposits with or other liabilities or commitments of, financial institutions generally, including any Lender (or its applicable Lending Office), including the Commitments of such Lender hereunder; or

 

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(ii) impose on financial institutions generally, including such Lender (or its applicable Lending Office), or on the London interbank market any other condition affecting this Agreement or its Notes or any of such extensions of credit or liabilities or commitments;

and the result of any of the foregoing is to increase the cost to such Lender (or its applicable Lending Office) of making, Converting into, continuing, or maintaining any Eurodollar Advances or to reduce any sum received or receivable by such Lender (or its applicable Lending Office) under this Agreement or its Notes with respect to any Eurodollar Advances, then the Borrower shall pay to such Lender such amount or amounts as such Lender determines in good faith to be necessary to compensate such Lender for such increased cost or reduction.

(b) Capital Adequacy. If, after the Effective Date, any Lender or the Issuing Lender shall have determined that any Change in Law affecting such Lender or Issuing Lender or any Lending Office of such Lender or such Lender’s or Issuing Lender’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on the capital of financial institutions generally, including such Lender or the Issuing Lender or any corporation controlling such Lender or the Issuing Lender, as a consequence of such Lender’s or the Issuing Lender’s obligations hereunder, to a level below that which such Lender or the Issuing Lender or such corporation could have achieved but for such Change in Law (taking into consideration its policies with respect to capital adequacy), then from time to time, the Borrower shall pay to such Lender or the Issuing Lender such additional amount or amounts as such Lender determines in good faith to be necessary to compensate such Lender or the Issuing Lender for such reduction.

(c) Mitigation. Each Lender shall promptly notify the Borrower and the Administrative Agent of any event of which it has knowledge, occurring after the Effective Date, which will entitle such Lender to compensation pursuant to this Section 2.10 and will designate a different Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the reasonable judgment of such Lender, be otherwise materially disadvantageous to it. Any Lender claiming compensation under this Section 2.10 shall furnish to the Borrower and the Administrative Agent a certficate setting forth the additional amount or amounts to be paid to it hereunder which shall be determined by such Lender in good faith and which shall be conclusive in the absence of manifest error. In determining such amount, such Lender may use any reasonable averaging and attribution methods. All amounts owing in respect of this Section 2.10 shall be due and payable within ten (10) Business Days of the Borrower’s receipt of such certificate.

(d) Delay in Requests. Failure or delay on the part of any Lender or any Issuing Bank to demand compensation pursuant to this Section 2.10 shall not constitute a waiver of such Lender’s or such 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 2.10 for any increased costs incurred or reductions suffered more than 180 days prior to the date that such Lender or such Issuing Bank, as the case may be, delivers to the Company the certificate referenced in Section 2.10(c) and notifies the Borrower of such Lender’s or such Issuing Bank’s intention to claim compensation therefor (except that, if increases costs or reductions are suffered by a Lender or Issuing Lender because of a retroactive application of the change in law or other circumstance causing such increased costs or reductions, then such 180-day period shall be extended to include the period of retroactive effect thereof).

Section 2.11 Payments and Computations.

(a) Payments. All payments of principal, interest, and other amounts to be made by the Borrower under this Agreement and other Credit Documents shall be made to the Administrative Agent in Dollars and in immediately available funds, without setoff, deduction, or counterclaim; provided that, the Borrower may setoff amounts owing to any Lender that is at such time a Defaulting Lender against Advances that such Defaulting Lender failed to fund to the Borrower under this Agreement (the “Unfunded Advances”) so long as (i) the

 

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Borrower shall have delivered prior written notice of such setoff to the Administrative Agent and such Defaulting Lender, (ii) the Advances made by the non-defaulting Lenders as part of the original Borrowing to which the Unfunded Advances applied shall still be outstanding, (iii) if such Defaulting Lender failed to fund Advances under more than one Borrowing, such setoff shall be applied in a manner satisfactory to the Administrative Agent, and (iv) upon the application of such setoff, the Unfunded Advances shall be deemed to have been made by such Defaulting Lender on the effective date of such setoff.

(b) Payment Procedures. The Borrower shall make each payment under this Agreement and under the Notes not later than 2:00 p.m. (Charlotte, North Carolina time) on the day when due in Dollars to the Administrative Agent at the location referred to in the Notes (or such other location as the Administrative Agent shall designate in writing to the Borrower) in same day funds. The Administrative Agent will promptly thereafter, and in any event prior to the close of business on the day any timely payment is made, cause to be distributed like funds relating to the payment of principal, interest or fees ratably (other than amounts payable solely to the Administrative Agent or a specific Lender pursuant to Sections 2.8, 2.9, 2.10, 2.12, 2.13, and 9.2 and such other provisions herein which expressly provide for payments to a specific Lender, but after taking into account payments effected pursuant to Section 9.1) in accordance with each Lender’s applicable pro rata share to the Lenders for the account of their respective applicable Lending Offices, and like funds relating to the payment of any other amount payable to any Lender to such Lender for the account of its applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement. Upon receipt of other amounts due solely to the Administrative Agent, the Issuing Lender, the Swing Line Lender or a specific Lender, the Administrative Agent shall distribute such amounts to the appropriate party to be applied in accordance with the terms of this Agreement.

(c) Non-Business Day Payments. Whenever any payment shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or fees, as the case may be; provided that if such extension would cause payment of interest on or principal of Eurodollar Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.

(d) Computations. All computations of interest for Base Rate Advances shall be made by the Administrative Agent on the basis of a year of 365/366 days and all computations of all other interest and fees shall be made by the Administrative Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day, but excluding the last day) occurring in the period for which such interest or fees are payable. Each determination by the Administrative Agent of an amount of interest or fees shall be conclusive and binding for all purposes, absent manifest error.

(e) Sharing of Payments, Etc. If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Advances made by it in excess of its ratable share of payments on account of the Advances or Letter of Credit Obligations obtained by the Lenders (other than as a result of a termination of a Defaulting Lender’s Commitment under Section 2.1(c)(ii), the setoff right of the Borrower under clause (a) above, or the non-pro rata application of payments provided in the last sentence of this clause (e)), such Lender shall notify the other Lenders and forthwith purchase from the other Lenders participations in the Advances made by it or the Letter of Credit Obligations held by it as shall be necessary to cause such purchasing Lender to share the excess payment ratably with the other Lenders; provided that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from the other Lenders shall be rescinded and each such Lender shall repay to the purchasing Lender the purchase price to the extent of such Lender’s ratable share, but without interest. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.11(e) may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. If a Lender fails to fund a Revolving Advance with respect to a Borrowing as and when required

 

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hereunder and the Borrower subsequently makes a repayment of any Revolving Advances, then, after taking into account any setoffs made pursuant to Section 2.11(a) above, such payment shall be applied among the Non-Defaulting Lenders ratably in accordance with their respective Commitment percentages until each Lender (including any Lender that is at such time a Defaulting Lender) has its percentage of all of the outstanding Revolving Advances and the balance of such repayment shall be applied among the Lenders in accordance with their Revolving Pro Rata Share. The provisions of this Section 2.11(e) 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 Advances or participations in Letter of Credit Exposure to any assignee or participant, other than to the Borrower or any Restricted Subsidiary or Affiliate thereof (as to which the provisions of this Section 2.11(e) shall apply).

Section 2.12 Taxes.

(a) No Deduction for Certain Taxes. Any and all payments by any Credit Party under any of the Credit Documents to the Administrative Agent, the Issuing Lender, or a Lender shall be made, in accordance with Section 2.11, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges, or withholdings, and all liabilities with respect thereto, excluding, in the case of the Administrative Agent, the Issuing Lender, or a Lender, (i) taxes imposed on its income and franchise (or margin) taxes imposed on it by the jurisdiction (or any political subdivision thereof) under (A) the laws of which (or under the laws of a political subdivision of which) the Administrative Agent, the Issuing Lender, or such Lender is organized or in which its principal executive office is located, (B) in the case of each Lender, the laws of which (or under the laws of a political subdivision of which) such Lender’s applicable Lending Office is located, and (C) the laws of which, taxes are imposed as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document, (ii) any taxes imposed by the United States of America by means of withholding at the source, if and to the extent such United States withholding taxes are in effect on the date a Lender becomes a Lender hereunder or such Lender changes it lending office; and (iii) any U.S. federal withholding Taxes imposed under Code Sections 1471 through 1474 (“FATCA”) (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings, and liabilities being hereinafter referred to as “Taxes”). Except as provided in Section 2.12(f), if the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable to the Administrative Agent, the Issuing Lender, or any Lender, (i) the sum payable shall be increased as may be necessary so that, after making all required deductions (including deductions applicable to additional sums payable under this Section 2.12), such Lender 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 or other authority in accordance with applicable law.

(b) Other Taxes. In addition, except as provided in Section 2.12(f), the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges, or similar levies which arise from any payment made under any Credit Document or from the execution, delivery, or registration of, or otherwise with respect to, this Agreement, the Notes, or the other Credit Documents, except any such Taxes that are imposed with respect to an assignment (other than an assignment made pursuant to Section 2.13(a)) (hereinafter referred to as “Other Taxes”).

(c) Indemnification. EXCEPT AS PROVIDED IN SECTION 2.12(F), THE BORROWER INDEMNIFIES EACH LENDER, THE ISSUING LENDER, AND THE ADMINISTRATIVE AGENT FOR THE FULL AMOUNT OF TAXES OR OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY TAXES OR OTHER TAXES IMPOSED ON AMOUNTS PAYABLE UNDER THIS SECTION 2.12) PAID BY SUCH LENDER, THE ISSUING LENDER, OR THE ADMINISTRATIVE AGENT (AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING INTEREST AND EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY ASSERTED.

 

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(d) Evidence of Tax Payments. As soon as practicable after any payment of Taxes or Other Taxes by any Credit Party to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of any 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 Lender Withholding Exemption. Each Lender that is entitled to an exemption from United States withholding tax with respect to payments under this Agreement under applicable law or any treaty to which the United States is a party 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 (including Internal Revenue Service Forms W-9, W-8IMY, W-8BEN or W-8ECI, together with associated certification) prescribed by applicable law or reasonably requested by the Borrower as will permit such payments to be made without withholding. In addition, any Lender if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in this Section 2.12(e), the completion, execution, and submission of such documentation shall not be required if in any Lender’s reasonable judgment, such completion, execution or submission would subject such Lender to any Material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) or the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause paragraph, “FATCA” shall include any amendment made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

(f) Failure to Provide Forms. For any period with respect to which a Lender has failed to provide the Borrower or the Administrative Agent with the appropriate forms referred to in this Section 2.12 (unless such failure is due to a change in treaty, law or regulation occurring after the date on which such Lender becomes a Lender hereunder), such Lender shall not be entitled to indemnification or payment under Section 2.12(a), (b), or (c) with respect to Taxes imposed by the United States; provided that if a Lender, that is otherwise exempt from or subject to a reduced rate of withholding tax, becomes subject to Taxes because of its failure to deliver a form required hereunder, the Borrower shall take such steps as such Lender shall reasonably request, and at the expense of such Lender, to assist such Lender to recover such Taxes.

 

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(g) Mitigation. Each Lender shall use reasonable efforts (consistent with its internal policies and legal and regulatory restrictions) to select a jurisdiction for its applicable Lending Office or change the jurisdiction of its applicable Lending Office, as the case may be, so as to avoid the imposition of any Taxes or Other Taxes or to eliminate or reduce the payment of any additional sums under this Section 2.12; provided, that no such selection or change of jurisdiction for its applicable Lending Office shall be made if, in the reasonable judgment of such Lender, such selection or change would be disadvantageous to such Lender.

(h) Tax Credits and Refunds. If the Administrative Agent, any Lender or the Issuing Lender determines, in its sole discretion exercised in good faith, 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, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or the Issuing Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent, such Lender or the Issuing 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, such Lender or the Issuing Lender in the event the Administrative Agent, such Lender or the Issuing Lender is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent, any Lender or the Issuing Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Borrower or any other Person.

(i) Payment. If the Administrative Agent or any Lender becomes entitled to receive payment of Taxes, Other Taxes or additional sums pursuant to this Section 2.12, it shall give written notice (in the form of a certificate prepared by a Lender or the Administrative Agent specify what, in the Lender or Administrative Agent’s reasonable determination, is the calculations hereof and circumstances giving rise to such a claim) and demand thereof to the Borrower, and the Borrower (unless the Administrative Agent or Lender shall withdraw such notice and demand or the Borrower is not obligated to pay such amounts) shall pay such Taxes, Other Taxes or additional sums within 30 days after the Borrower’s receipt of such notice and demand.

Section 2.13 Replacement of Lenders. If (a) the Borrower is required pursuant to Section 2.10 or 2.12 to make any additional payment to any Lender, (b) any Lender’s obligation to make or continue, or to Convert Base Rate Advances into, Eurodollar Advances shall be suspended pursuant to Section 2.3(c)(iii) or 2.8, (c) any Lender is a Defaulting Lender, or (d) any Lender (a “Non-Consenting Lender”) does not consent (including by way of a failure to respond in writing to a proposed amendment, consent or waiver by the date and time specified by the Administrative Agent) to a proposed amendment, consent, change, waiver, discharge or termination hereunder or with respect to any Credit Document that has been approved by the Majority Lenders (any such Lender described in any of the preceding clauses (a) – (d), being a “Subject Lender”), then (i) in the case of a Defaulting Lender, the Administrative Agent may, upon notice to the Subject Lender and the Borrower, require such Defaulting Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 9.7), all of its interests, rights and obligations under this Agreement and the related Credit Documents as a Lender to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment) and (ii) in the case of any Subject Lender, the Borrower may, upon notice to the Subject Lender and the Administrative Agent and at the Borrower’s sole cost and expense, require such Subject Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 9.7), all of its interests, rights and obligations under this Agreement and the related Credit Documents to an Eligible Assignee that shall assume such obligations (which Eligible Assignee may be another Lender, if a Lender accepts such assignment), provided that, in any event

 

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(A) as to assignments required by the Borrower, the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 9.7;

(B) such Subject Lender shall have received payment of an amount equal to the outstanding principal of its applicable Advances and participations in outstanding Letter of Credit Obligations, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Credit Documents (including any amounts under Section 2.9) 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);

(C) in the case of any such assignment resulting from a claim for compensation under Section 2.12, such assignment will result in a reduction in such compensation or payments thereafter;

(D) such assignment does not conflict with applicable Legal Requirements; and

(E) if such Subject Lender is being replaced solely as a result of it being a Defaulting Lender, then such Lender may only be replaced in its capacity as a Lender.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower or the Administrative Agent to require such assignment and delegation cease to apply. Solely for purposes of effecting any assignment involving a Defaulting Lender under this Section 2.13 and to the extent permitted under applicable Legal Requirements, each Lender hereby designates and appoints the Administrative Agent as true and lawful agent and attorney-in-fact, with full power and authority, for and on behalf of and in the name of such Lender to execute, acknowledge and deliver the Assignment and Acceptance required hereunder if such Lender is a Defaulting Lender and such Lender shall be bound thereby as fully and effectively as if such Lender had personally executed, acknowledged and delivered the same. In lieu of the Borrower or the Administrative Agent replacing a Defaulting Lender as provided in this Section 2.13, the Borrower may terminate such Defaulting Lender’s applicable Commitment as provided in Section 2.1(c)(ii).

Section 2.14 Payments and Deductions to a Defaulting Lender.

(a) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.1(a), Section 2.2, or Section 2.11 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 in cash.

(b) If a Defaulting Lender as a result of the exercise of a set-off shall have received a payment in respect of its outstanding applicable Advances or Revolving Pro Rata Share of Letter of Credit Exposure which results in its outstanding applicable Advances and Revolving Pro Rata Share of Letter of Credit Exposure being less than its pro rata share of the aggregate outstanding applicable Advances and Letter of Credit Exposure, then no payments will be made to such Defaulting Lender until such time as all amounts due and owing to the Lenders have been equalized in accordance with each Lender’s respective pro rata share of the aggregate outstanding applicable Advances and Letter of Credit Exposure. Further, if at any time prior to the acceleration or maturity of the Advances, the Administrative Agent shall receive any payment in respect of principal attributable to an applicable Advance or Letter of Credit Obligations while one or more Defaulting Lenders shall be party to this Agreement, the Administrative Agent shall apply such payment first to the Borrowings for which such Defaulting Lender(s) shall have failed to fund its pro rata share until such time as such Borrowing(s) are paid in full or each Lender (including each Defaulting Lender) is owed its pro rata share of all Advances then outstanding. After acceleration or maturity of the Advances, subject to the first sentence of this Section 2.14(b), all principal will be paid ratably as provided in Section 2.11(e).

 

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(c) If any Letter of Credit Exposure exists at the time a Lender becomes a Defaulting Lender then:

(i) such Letter of Credit Exposure shall be automatically reallocated among the Non-Defaulting Lenders in accordance with their respective Revolving Pro Rata Share of such Defaulting Lender’s Revolving Pro Rata Share of the Letter of Credit Exposure (and each Lender is deemed to have purchased and assigned such participation interest in such reallocated portion of the Letter of Credit Exposure) but only to the extent that (A) the sum of each Non-Defaulting Lender’s outstanding Revolving Advances plus its share of the Letter of Credit Exposure, after giving effect to the reallocation provided herein, does not exceed the lesser of such Non-Defaulting Lender’s Revolving Pro Rata Share of such Non-Defaulting Lender’s Commitment, and (B) the conditions set forth in Section 3.2 are satisfied at such time; provided that, such reallocation shall not constitute a waiver or release of any claim the Borrower, the Administrative Agent, the Issuing Lender or any other Lender may have against such Defaulting Lender or cause such Defaulting Lender to be a Non-Defaulting Lender;

(ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, then the Borrower shall, within one Business Day following notice by the Administrative Agent, cash collateralize such Defaulting Lender’s share of the Letter of Credit Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.2(h) for so long as such Letter of Credit Exposure is outstanding;

(iii) if the Borrower cash collateralizes any portion of such Defaulting Lender’s Letter of Credit Exposure pursuant to this Section 2.14 then the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.6(b)(i) or (iii) with respect to such Defaulting Lender’s Letter of Credit Exposure during the period such Defaulting Lender’s Letter of Credit Exposure is cash collateralized;

(iv) if the Letter of Credit Exposure of the Non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 2.6(b)(i) and (iii) shall be adjusted in accordance with such Non-Defaulting Lenders’ Revolving Pro Rata Share;

(v) if any Defaulting Lender’s share of the Letter of Credit Exposure is neither cash collateralized nor reallocated pursuant to the preceding provisions, then, without prejudice to any rights or remedies of the Issuing Lender or any Lender hereunder, all letter of credit fees payable under Section 2.6(b)(i) and (iii) with respect to such Defaulting Lender’s share of the Letter of Credit Exposure shall be payable to the Issuing Lender until such Letter of Credit Exposure is cash collateralized and/or reallocated.

In the event that the Administrative Agent, the Borrower and the Issuing Lender each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then (i) the Letter of Credit Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall be deemed to have purchased at par such of the Revolving Advances or participations in Letters of Credit of the other Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Revolving Advances and Letter of Credit Exposure in accordance with its Revolving Pro Rata Share, and (ii) if no Default exists, then any cash collateral posted by the Borrower pursuant to clause (c)(ii) above with respect to such Lender shall be returned to the Borrower.

 

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Section 2.15 Increase in Commitments.

(a) At any time prior to the Business Day immediately preceding the Maturity Date, the Borrower may effectuate one or more increases (not to exceed five such increases in the aggregate) in the aggregate Commitments (each such increase being a “Commitment Increase”), by designating either one or more of the existing Lenders (each of which, in its sole discretion, may determine whether and to what degree to participate in such Commitment Increase) or one or more other Eligible Assignees that at the time agree, in the case of any such Eligible Assignee that is an existing Lender to increase its Commitment as such Lender shall so select (an “Increasing Lender”) and, in the case of any other Eligible Assignee that is not an existing Lender (an “Additional Lender”), to become a party to this Agreement as a Lender; provided, however, that (i) each such Commitment Increase to the Commitments shall be equal to at least $10,000,000, (ii) all Commitments and Revolving Advances provided pursuant to a Commitment Increase shall be available on the same terms as those applicable to any other Commitments and Revolving Advances described in this Agreement except as to upfront fees which may be as agreed to between the Borrowers and such Increasing Lender or Additional Lender, as the case may be, and (iii) the aggregate of all such Commitment Increases shall not exceed $100,000,000. The Borrower shall provide prompt notice of such proposed Commitment Increase pursuant to this Section 2.15 to the Administrative Agent and the Lenders. This Section 2.15 shall not be construed to create any obligation on either Administrative Agent or any Lender to advance or to commit to advance any credit to the Borrower or to arrange for any other Person to advance or to commit to advance any credit to the Borrower.

(b) The Commitment Increase shall become effective on the date (the “Increase Date”) on or prior to which each of following conditions shall have been satisfied: (i) the receipt by the Administrative Agent of (A) an agreement in form and substance reasonably satisfactory to the Administrative Agent signed by the Borrower, each Increasing Lender and/or each Additional Lender, setting forth the Commitments, if any, of each such Increasing Lender and/or Additional Lender and, if applicable, setting forth the agreement of each Additional Lender to become a party to this Agreement and to be bound by all the terms and provisions hereof binding upon each Lender, and (B) such evidence of appropriate authorization on the part of the Borrower with respect to such Commitment Increase and such legal opinions as the Administrative Agent may reasonably request, (ii) the funding by each Increasing Lender and Additional Lender of the Revolving Advances to be made by each such Lender to effect the reallocation of the pro rata shares of the Lenders in each Revolving Borrowing, (iii) receipt by the Administrative Agent of a certificate of a Responsible Officer of the Borrower certifying (A) both before and after giving effect to such Commitment Increase, no Default has occurred and is continuing, and (B) all representations and warranties made by the Borrowers in this Agreement are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), unless such representation or warranty relates to an earlier date which remains true and correct in all material respects as of such earlier date (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), and (iv) receipt by the Increasing Lender or Additional Lender, as applicable, of all such fees as agreed to between such Increasing Lender and /or Additional Lender and the Borrower.

(c) Notwithstanding any provision contained herein to the contrary, from and after the date of such Commitment Increase, all calculations and payments of interest on the Revolving Advances shall take into account the actual Commitments of each Lender and the principal amount outstanding of each Revolving Advance made by such Lender during the relevant period of time.

(d) On such Increase Date, each Lender’s share of the Letter of Credit Exposure on such date shall automatically be deemed to equal such Lender’s Pro Rata Share of such Letter of Credit Obligations (such Pro Rata Share for such Lender to be determined as of the Increase Date after giving effect to such Commitment Increase) without further action by any party.

 

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ARTICLE 3

CONDITIONS OF LENDING

Section 3.1 Conditions Precedent to Initial Borrowings and the Initial Letter of Credit. The obligations of each Lender to make the initial Advance and to issue any initial Letters of Credit, shall be subject to the conditions precedent that:

(a) Documentation. The Administrative Agent shall have received the following, duly executed by all the parties thereto, in form and substance reasonably satisfactory to the Administrative Agent and the Lenders:

(i) this Agreement and all attached Exhibits and Schedules and the Notes, if requested by the applicable Lenders, payable to the order of each applicable Lender;

(ii) the Guaranty executed by all Restricted Subsidiaries of the Borrower existing on the Effective Date;

(iii) the Security Agreement executed by each Credit Party, together with appropriate UCC-1 financing statements and intellectual property security agreements, if any, necessary or desirable for filing with the appropriate authorities and any other documents, agreements, or instruments necessary to create, perfect or maintain an Acceptable Security Interest in the Collateral described in the Security Agreement (other than Collateral the perfection of which is not required as per the express terms of the Security Agreement);

(iv) a Custodial Agreement executed by the Borrower, the Administrative Agent, and each employee of the Credit Parties serving as custodian thereunder;

(v) certificates of insurance naming the Administrative Agent as loss payee with respect to property insurance, or additional insured with respect to liability insurance, and covering the Borrower’s or its Restricted Subsidiaries Properties with such insurance carriers, for such amounts and covering such risks that are required hereunder;

(vi) a certificate from a Responsible Officer of the Borrower dated as of the Effective Date stating that as of such date (A) all representations and warranties of the Borrower set forth in this Agreement are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), except that any representation and warranty which by its terms is made as of a specified date shall be required to be true and correct only as of such specified date, (B) no Default has occurred and is continuing; and (C) all conditions precedent set forth in this Section 3.1 have been met or expressly waived in writing;

(vii) a secretary’s or assistant secretary’s certificate from each Credit Party certifying such Person’s (A) officers’ incumbency, (B) authorizing resolutions, (C) organizational documents, and (D) governmental approvals, if any, with respect to the Credit Documents to which such Person is a party;

(viii) certificates of good standing for each Credit Party in each state in which each such Person is organized, which certificate shall be (A) dated a date not earlier than 30 days prior to Effective Date or (B) otherwise effective on the Effective Date;

 

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(ix) a legal opinion in form and substance reasonably acceptable to the Administrative Agent of (A) ▇▇▇▇ ▇▇▇▇▇ as outside counsel to the Credit Parties and (B) appropriate local counsel to the Credit Parties in the states of Texas and Oklahoma; and

(x) copies, certified by a Responsible Officer of the Borrower, of all of the TFI Holdings Acquisition Documents requested by the Administrative Agent, the Escrow Agreement, and all exhibits and schedules thereto, together with all amendments, modifications or waivers thereto in effect as of the date of this Agreement; and

(xi) such other documents, governmental certificates, agreements, and lien searches as the Administrative Agent or any Lender may reasonably request.

(b) Consents; Authorization; Conflicts. The Borrower shall have received any consents, licenses and approvals required in accordance with applicable law, or in accordance with any document, agreement, instrument or arrangement to which the Borrower or any Restricted Subsidiary is a party, in connection with the execution, delivery, performance, validity and enforceability of this Agreement and the other Credit Documents. In addition, the Borrower and the Restricted Subsidiaries shall have all such material consents, licenses and approvals required in connection with the continued operation of the Borrower and the Restricted Subsidiaries, and such approvals shall be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority which would restrain, prevent or otherwise impose adverse conditions on this Agreement and the actions contemplated hereby.

(c) Representations and Warranties. The representations and warranties contained in Article 4 and in each other Credit Document shall be true and correct on and as of the Effective Date before and after giving effect to the initial Borrowings or issuance (or deemed issuance) of Letters of Credit and to the application of the proceeds from such Borrowing, as though made on and as of such date.

(d) Payment of Fees. The Borrower shall have paid the fees and expenses required to be paid as of the Effective Date by Sections 2.6(c) and 9.1 or any other provision of a Credit Document.

(e) Other Proceedings. No action, suit, investigation or other proceeding (including without limitation, the enactment or promulgation of a statute or rule) by or before any arbitrator or any Governmental Authority shall be pending or, to Borrower’s knowledge, threatened, and no preliminary or permanent injunction or order by a state or federal court shall have been entered (i) in connection with this Agreement, any other Credit Agreement, or any transaction contemplated hereby or thereby or (ii) which in the judgment of the Administrative Agent could reasonably be expected to result in a Material Adverse Change.

(f) Other Reports. The Administrative Agent shall have received, in form and substance reasonably satisfactory to it, all environmental reports (including all available (i) Phase I Environmental Site Assessment Reports and (ii) Phase II Environmental Site Assessment Reports), and such other reports, audits or certifications as it may reasonably request.

(g) Material Adverse Change. Since December 31, 2011, there shall not have occurred any event, development or circumstance that has or could reasonably be expected to result in a Material Adverse Change.

(h) No Default. No Default shall have occurred and be continuing.

(i) Solvency. The Administrative Agent shall have received a certificate in form and substance reasonably satisfactory to the Administrative Agent from a senior financial officer or such other officer acceptable to the Administrative Agent of the Borrower and each Guarantor certifying that, before and after giving effect to the initial Borrowings made hereunder on the Effective Date, the Borrower and each such other Guarantor taken as a whole are Solvent.

 

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(j) Delivery of Financial Statements. The Administrative Agent shall have received true and correct copies of (i) satisfactory consolidated financial statements for the Borrower and its Restricted Subsidiaries for the fiscal year 2011, (ii) satisfactory consolidated financial statements for TFI Holdings for the fiscal years 2009, 2010 and 2011, and interim unaudited financial statements for TFI Holdings for each fiscal quarter ended since the last audited financial statements, and (iii) projections prepared by management of balance sheets, income statements and cashflow statements of the Borrower and its Restricted Subsidiaries, through the fiscal year 2015, giving pro forma effect to the Transactions which will be quarterly during the fiscal year ending December 31, 2012 and annually thereafter.

(k) Notices of Borrowing. The Administrative Agent shall have received Notices of Borrowing from the Borrower, with appropriate insertions and executed by a duly appointed Responsible Officer of the Borrower.

(l) Collateral Lists. The Administrative Agent shall have received, and be reasonably satisfied with the result of, a completed Schedule 3.1 which shall list all Real Property (including all owned and Leasehold Property) of the Credit Parties after giving effect to the Transactions, including (i) the term of each lease agreement executed in connection with any Leasehold Property, (ii) the fair market value or book value of such Real Property (including all owned and Leasehold Property), and (iii) a notation as to all locations where any equipment or inventory of any Credit Party is kept that are either owned or leased by the Credit Parties (and specifically excluding customer locations that are not leased by any Credit Party).

(m) Payment in Full of Existing Debt. Prior to, or concurrently with, the making of the initial Advances hereunder, all outstanding Existing Debt (other than customary indemnification obligations which survive termination of the Existing Credit Agreement and which are not yet due and payable) and the credit documents related thereto shall have been paid in full and the Administrative Agent shall have received (i) a “pay-off” letter (or such other evidence) in form and substance reasonably satisfactory to the Administrative Agent with respect to the Existing Debt and the credit documents related thereto, and (ii) all releases, filings, and other documents necessary to release all liens securing such Existing Debt.

(n) USA Patriot Act. The Administrative Agent shall have received all documentation and other information that is required by regulatory authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the Patriot Act.

(o) Pro Forma Compliance Certificate. The Administrative Agent shall have received a compliance certificate in form acceptable to the Administrative Agent and executed by the chief executive officer or chief financial officer of the Borrower and reflecting (i) a Closing Date Leverage Ratio of no greater than 4.10 to 1.00, and (ii) the calculations for the Maximum Total Debt Leverage Ratio, the Maximum Senior Secured Debt Leverage Ratio, and the Minimum Interest Coverage Ratio as of the fiscal quarter ended December 31, 2011 after giving pro forma effect to the Transactions and any other related financings or transactions being consummated on the Effective Date.

(p) Capital Structure. The capital and ownership structure and the equityholder arrangements of the Borrower and its Subsidiaries (and all agreements relating thereto) will be reasonably satisfactory to the Administrative Agent.

(q) Due Diligence. The Administrative Agent shall have completed and be satisfied in its sole discretion with the corporate (or other organizational), environmental, tax and financial due diligence of the Credit Parties and its Affiliates.

 

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(r) Certificates of Title. Subject to Section 5.17, for each piece of Certificated Equipment owned by the Borrower or any Restricted Subsidiary, the Administrative Agent shall have received the original certificate of title to such equipment and such other documents, agreements or instruments required in order to evidence the Administrative Agent’s first priority lien on the certificate of title for such Certificated Equipment or shall have entered into other arrangements satisfactory to the Administration Agent with respect thereto.

(s) Liens. The Administrative Agent shall have received evidence satisfactory to it that there are no Liens encumbering any of the Credit Parties’ respective Property other than Permitted Liens and that there are no Liens encumbering the Equity Interests of the Subsidiaries held by the Borrower other than the Liens granted under the Credit Documents.

(t) Material Agreements. The Administrative Agent shall have received true and complete copies of the Material Agreements (and certified as such by the Borrower) and the Administrative Agent shall be satisfied with the terms thereof.

(u) TFI Holdings Acquisition. All conditions to the consummation and effectiveness of the TFI Holdings Acquisition (other than the payment of the purchase price) shall have been satisfied or waived. Furthermore, Administrative Agent shall have received (i) payoff letters, if any, in form and substance reasonably satisfactory to Administrative Agent covering all debt secured by liens (other than those which would constitute Permitted Liens hereunder) that encumber any of the properties being purchased by Borrower under the TFI Holdings Acquisition and (ii) UCC financing statement terminations, deed of trust and mortgage lien releases and other evidence reasonably required by Administrative Agent shall have been delivered to the Administrative Agent such that, subject only to appropriate filing or recording thereof, all liens (other than those which would constitute Permitted Liens hereunder) encumbering the TFI Holdings Properties to be acquired by Borrower and its Restricted Subsidiaries have been terminated or released.

(v) Bond Issuance. On or prior to the Effective Date, the Borrower shall have received cash proceeds from the Bond Issurance of at least $250,000,000 gross and at least $240,000,000 net of fees, expenses and other transaction costs. On the Effective Date, (i) the Bond Issuance shall have been consumated in accordance with the terms and conditions of the Bond Issuance Documents and all applicable law, (ii) the Administrative Agent shall have received true and correct copies of all Bond Issuance Documents, in each case certified by a Responsible Officer of the Borrower, (iii) all Bond Issuance Documents and all terms and conditions thereof (including, without limitation, amortization, maturities, interest rates, covenants, defaults, remedies, guaranties and guarantors) shall be in form and substance reasonably satisfactory to the Administrative Agent and (iv) all such Bond Issuance Documents shall be in full force and effect. All conditions precedent to the consummation of the Bond Issuance and as set forth in the Bond Issuance Documents therefor, shall have been satisfied, and not waived unless consented to by the Administrative Agent and the Majority Lenders, to the reasonable satisfaction of the Administrative Agent.

The funding of the initial Borrowing hereunder shall evidence the satisfaction of the foregoing conditions except to the extent that the Borrower and the other Credit Parties have agreed to fulfill conditions to the initial Borrowing following the date of this Agreement pursuant to Section 5.17.

Section 3.2 Conditions Precedent to Each Borrowing and to Each Issuance, Extension or Renewal of a Letter of Credit. The obligation of each Lender to make an Advance on the occasion of each Borrowing (including the initial Borrowing), the obligation of each Issuing Lender to issue, increase, renew or extend a Letter of Credit (including the deemed issuance of Letters of Credit) and of any reallocation of Letter of Credit Exposure provided in Section 2.14, shall be subject to the further conditions precedent that on the date of such Borrowing or such issuance, increase, renewal or extension:

 

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(a) Representations and Warranties. As of the date of the making of any Advance or issuance, increase, renewal or extension of any Letter of Credit or the reallocation of the Letter of Credit Exposure, the representations and warranties made by any Credit Party or any officer or employee of any Credit Party contained in the Credit Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on such date, except that any representation and warranty which by its terms is made as of a specified date shall be required to be true and correct only as of such specified date and each request for the making of any Advance or issuance, increase, renewal or extension of any Letter of Credit and the making of such Advance or the issuance, increase, renewal or extension of such Letter of Credit shall be deemed to be a reaffirmation of such representations and warranties. Each of: (i) the giving of the applicable Notice of Borrowing or Letter of Credit Application, (ii) the acceptance by the Borrower of the proceeds of such Borrowing, (iii) the issuance, increase, or extension of such Letter of Credit, and (iv) the reallocation of the Letter of Credit Exposure, shall constitute a representation and warranty by the Borrower that on the date of such Borrowing, such issuance, increase, or extension of such Letter of Credit or such reallocation, as applicable, that the foregoing condition precedent has been met.

(b) Event of Default. As of the date of the making of any Advance, the issuance, increase, renewal or extension of any Letter of Credit, or the reallocation of the Letter of Credit Exposure, as applicable, no Default or Event of Default shall exist, and the making of such Advance or issuance, increase, renewal or extension of such Letter of Credit, or the relocation of the Letter of Credit Exposure would not cause a Default or Event of Default. Each of: (i) the giving of the applicable Notice of Borrowing or Letter of Credit Application, (ii) the acceptance by the Borrower of the proceeds of such Borrowing, (iii) the issuance, increase, or extension of such Letter of Credit, and (iv) the reallocation of the Letter of Credit Exposure, shall constitute a representation and warranty by the Borrower that on the date of such Borrowing, such issuance, increase, or extension of such Letter of Credit or such reallocation, as applicable, that the foregoing condition precedent has been met.

Section 3.3 [Reserved].

Section 3.4 Determinations Under Sections 3.1 and 3.2. For purposes of determining compliance with the conditions specified in Sections 3.1 and 3.2 each Lender shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lenders unless an officer of the Administrative Agent responsible for the transactions contemplated by the Credit Documents shall have received written notice from such Lender prior to the Borrowings hereunder specifying its objection thereto and such Lender shall not have made available to the Administrative Agent such Lender’s ratable portion of such Borrowings.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

Each Credit Party hereto represents and warrants as follows:

Section 4.1 Organization. Each Credit Party is duly and validly organized and existing and in good standing under the laws of its jurisdiction of incorporation or formation. Each Credit Party is authorized to do business and is in good standing in all jurisdictions in which such qualifications or authorizations are necessary except where the failure to be so qualified or authorized could not reasonably be expected to result in a Material Adverse Change. As of the Effective Date, each Credit Party’s type of organization and jurisdiction of incorporation or formation are set forth on Schedule 4.1.

 

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Section 4.2 Authorization. The execution, delivery, and performance by each Credit Party of each Credit Document to which such Credit Party is a party and the consummation of the transactions contemplated thereby (a) are within such Credit Party’s powers, (b) have been duly authorized by all necessary corporate, limited liability company or partnership action, (c) do not contravene any articles or certificate of incorporation or bylaws, partnership or limited liability company agreement binding on or affecting such Credit Party, (d) do not contravene any law or any contractual restriction binding on or affecting such Credit Party, except as such contravention could not reasonably be expected to result in a Material Adverse Change, (e) do not result in or require the creation or imposition of any Lien prohibited by this Agreement, and (f) do not require any authorization or approval or other action by, or any notice or filing with, any Governmental Authority other than those that have been obtained. At the time of each Advance or the issuance, renewal, extension or increase of each Letter of Credit, such Advance and the use of the proceeds of such Advance or the issuance, renewal, extension or increase of such Letter of Credit are within the Borrower’s corporate powers, have been duly authorized by all necessary action and do not contravene (i) the Borrower’s certificate of incorporation or by-laws, or (ii) except as such contravention could not reasonably be expected to result in a Material Adverse Change, any Legal Requirement or any contractual restriction binding on or affecting the Borrower. At the time of each Advance or the issuance, renewal, extension or increase of each Letter of Credit, such Advance and the use of the proceeds of such Advance or the issuance, renewal, extension or increase of such Letter of Credit will not result in or require the creation or imposition of any Lien prohibited by this Agreement, and do not require any authorization or approval or other action by, or any notice or filing with, any Governmental Authority other than those that have been obtained or provided.

Section 4.3 Enforceability. The Credit Documents have each been duly executed and delivered by each Credit Party that is a party thereto and each Credit Document constitutes the legal, valid, and binding obligation of each Credit Party that is a party thereto enforceable against such Credit Party in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws at the time in effect affecting the rights of creditors generally and by general principles of equity whether applied by a court of law or equity.

Section 4.4 Financial Condition.

(a) The Borrower has delivered to the Administrative Agent audited consolidated financial statements for the Borrower and its Subsidiaries dated as of December 31, 2011 for the fiscal year ended thereon. The financial statements referred to in the preceding sentence fairly present, in all material respects, the financial condition of the Borrower and its Subsidiaries on the date thereof and the results of their operations and cash flows for the periods then ended, have been prepared in accordance with GAAP and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading. As of the date of the aforementioned financial statements, there were no material contingent obligations, liabilities for taxes, unusual forward or long-term commitments, or unrealized or anticipated losses of the applicable Persons, except as disclosed therein and adequate reserves for such items have been made in accordance with GAAP.

(b) Since the Effective Date, after giving pro forma effect to the payment in full of the outstanding Existing Debt and all Advances made hereunder on the Effective Date, no event or condition has occurred that could reasonably be expected to result in Material Adverse Change.

Section 4.5 Ownership and Liens; Real Property. Each applicable Credit Party (a) has (i) good and insurable title to all Real Property (excluding Leasehold Property and the Pipeline), (ii) good and defensible title to the Pipeline, (iii) to such Credit Party’s knowledge, a valid and subsisting leasehold interest in all Leasehold Property (except to the extent such Leasehold Property constitutes Material Real Property), (iv) a valid and subsisting leasehold interest (or other applicable interest) in all Leasehold Property that constitutes Material Real Property, and (v) good title to all personal Property, used in its business, and (b) none of the Property owned by the Borrower or a Restricted Subsidiary of

 

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the Borrower is subject to any Lien except Permitted Liens. As of the Effective Date, the Borrower and its Restricted Subsidiaries own no Real Property other than that listed on Schedule 3.1 and all equipment (other than office equipment and equipment located on jobsites, in transit or off location for servicing, repairs or modifications) owned by the Borrower and its Restricted Subsidiaries are located at the fee owned or leased Real Property listed on Schedule 3.1 and other than equipment in transit, out for repair, or at customers’ locations.

Section 4.6 True and Complete Disclosure. All written factual information (whether delivered before or after the date of this Agreement) prepared by or on behalf of the Borrower and its Restricted Subsidiaries and furnished to the Administrative Agent or the Lenders for purposes of or in connection with this Agreement, any other Credit Document or any transaction contemplated hereby or thereby does not contain any material misstatement of fact or omits to state any material fact necessary to make the statements therein not materially misleading. There is no fact known to any officer of any Credit Party on the date of this Agreement that has not been disclosed to the Administrative Agent that could reasonably be expected to result in a Material Adverse Change. All projections, estimates, budgets, and pro forma financial information furnished by the Borrower or any of its Restricted Subsidiaries (or on behalf of the Borrower or any such Restricted Subsidiary), were prepared on the basis of assumptions, data, information, tests, or conditions (including current and reasonably foreseeable business conditions) believed to be reasonable at the time such projections, estimates, and pro forma financial information were furnished, provided that no assurances are made that such projections will be attained, actual results may differ and such differences may be material.

Section 4.7 Litigation. Except as otherwise provided in Schedule 4.7, there are no actions, suits, or proceedings pending or, to any Credit Party’s knowledge, threatened against the Borrower or any Restricted Subsidiary, at law, in equity, or in admiralty, or by or before any Governmental Authority, which could reasonably be expected to result in a Material Adverse Change. Additionally, except as disclosed in writing to the Administrative Agent and the Lenders, there is no pending or, to the knowledge of any Credit Party, threatened action or proceeding instituted against the Borrower or any Restricted Subsidiary which seeks to adjudicate the Borrower or any Subsidiary as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, Restricted adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its Property.

Section 4.8 Compliance with Agreements. Neither the Borrower nor any of its Restricted Subsidiaries is a party to any indenture, loan or credit agreement or any lease or any other types of agreement or instrument or subject to any charter or corporate restriction or provision of applicable law or governmental regulation the performance of or compliance with which could reasonably be expected to cause a Material Adverse Change. Neither the Borrower nor any of its Restricted Subsidiaries is in default under or with respect to any contract, agreement, lease or any other types of agreement or instrument to which the Borrower or such Restricted Subsidiary is a party and which could reasonably be expected to cause a Material Adverse Change. To the knowledge of the Credit Parties, neither the Borrower nor any of its Restricted Subsidiaries is in default under, or has received a notice of default under, any contract, agreement, lease or any other document or instrument to which the Borrower or its Restricted Subsidiaries is a party which is continuing and which, if not cured, could reasonably be expected to cause a Material Adverse Change.

(a) No Default has occurred and is continuing.

 

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Section 4.9 Pension Plans. (a) Except for matters that could not reasonably be expected to result in a Material Adverse Change, all Plans are in compliance with all applicable provisions of ERISA, (b) no Termination Event has occurred with respect to any Plan that would result in an Event of Default under Section 7.1(i), (c) except as could not reasonably be expected to result in a Material Adverse Change, no “accumulated funding deficiency” (as defined in Section 302 of ERISA) has occurred, and for plan years after December 31, 2007, no unpaid minimum required contribution exists, and there has been no excise tax imposed under Section 4971 of the Code, (d) to the knowledge of Credit Parties, no Reportable Event has occurred with respect to any Multiemployer Plan that could reasonably be expected to result in liability to any Credit Party of $5,000,000 or more, (e) neither the Borrower nor any member of the Controlled Group has had a complete or partial withdrawal from any Multiemployer Plan for which there is any unsatisfied withdrawal liability that could reasonably be expected to result in a Material Adverse Change or an Event of Default under Section 7.1(j), and (f) except for matters that could not reasonably be expected to result in a Material Adverse Change, as of the most recent valuation date applicable thereto, neither the Borrower nor any member of the Controlled Group would become subject to any liability under ERISA if the Borrower or any Restricted Subsidiary has received notice that any Multiemployer Plan is insolvent or in reorganization. Based upon GAAP existing as of the date of this Agreement and current factual circumstances, no Credit Party has any reason to believe that the annual cost during the term of this Agreement to the Borrower or any Restricted Subsidiary for post-retirement benefits to be provided to the current and former employees of the Borrower or any Restricted Subsidiary under Plans that are welfare benefit plans (as defined in Section 3(1) of ERISA) could, in the aggregate, reasonably be expected to cause a Material Adverse Change.

Section 4.10 Environmental Condition.

(a) Permits, Etc. Each Credit Party (i) has obtained all material Environmental Permits necessary for the ownership and operation of its Properties and the conduct of its businesses; (ii) except where such non-compliance could not reasonably be expected to cause a Material Adverse Change, has at all times been and is in compliance with all terms and conditions of such Environmental Permits and with all other requirements of applicable Environmental Laws; (iii) except as set forth in Schedule 4.10 has not received written notice of any material violation or alleged material violation of any Environmental Law or Environmental Permit; and (iv) is not subject to any actual or contingent Environmental Claim which could reasonably be expected to cause a Material Adverse Change.

(b) Certain Liabilities. To the Credit Parties’ knowledge, none of the presently or previously owned or operated Property of any Credit Party or of any Restricted Subsidiary thereof, wherever located, (i) has been placed on or proposed to be placed on the National Priorities List, the Comprehensive Environmental Response Compensation Liability Information System list, or their state analogs, or have been otherwise investigated, designated, listed, or identified as a potential site for removal, remediation, cleanup, closure, restoration, reclamation, or other response activity under any Environmental Laws; (ii) is subject to a Lien, arising under or in connection with any Environmental Laws, that attaches to any revenues or to any Property owned or operated by any Credit Party, wherever located, which could reasonably be expected to cause a Material Adverse Change; or (iii) has been the site of any Release of Hazardous Substances or Hazardous Wastes from present or past operations which has caused at the site or at any third-party site any condition that has resulted in or could reasonably be expected to result in the need for Response that could cause a Material Adverse Change.

(c) Certain Actions. Without limiting the foregoing, (i) all necessary material notices have been properly filed, and no further action is required under current applicable Environmental Law as to each Response or other restoration or remedial project undertaken by the Borrower, any of its Restricted Subsidiaries or any of the Borrower’s or such Restricted Subsidiary’s former Restricted Subsidiaries on any of their presently or formerly owned or operated Property and (ii) the present and, to the Credit Parties’ knowledge, future liability, if any, of the Borrower or of any Restricted Subsidiary which could reasonably be expected to arise in connection with requirements under Environmental Laws will not result in a Material Adverse Change.

 

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Section 4.11 Subsidiaries. As of the Effective Date, the Borrower has no Subsidiaries other than those listed on Schedule 4.11. Each Subsidiary of the Borrower (including any such Subsidiary formed or acquired subsequent to the Effective Date) has complied with the requirements of Section 5.6.

Section 4.12 Investment Company Act. Neither the Borrower nor any Restricted Subsidiary is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended. Neither the Borrower nor any Restricted Subsidiary is subject to regulation under any Federal or state statute, regulation or other Legal Requirement which limits its ability to incur Debt.

Section 4.13 Taxes. Proper and accurate (in all material respects), federal or material state, local and foreign tax returns, reports and statements required to be filed (after giving effect to any extension granted in the time for filing) by the Borrower and each Restricted Subsidiary or any member of the Affiliated Group as defined under Section 1504 of the Code (hereafter collectively called the “Tax Group”) have been filed with the appropriate Governmental Authorities, and all taxes (which are material in amount) and other impositions due and payable have been timely paid prior to the date on which any fine, penalty, interest, late charge or loss may be added thereto for non-payment thereof except where contested in good faith by appropriate proceeding and for which adequate reserves have been established in compliance with GAAP. Neither the Borrower nor any member of the Tax Group has given, or been requested to give, a waiver of the statute of limitations relating to the payment of any federal, state, local or foreign taxes or other impositions. None of the Property owned by the Borrower or any other member of the Tax Group is Property which the Borrower or any member of the Tax Group is required to treat as being owned by any other Person pursuant to the provisions of Section 168(f)(8) of the Code. Proper and accurate amounts have been withheld by the Borrower and all other members of the Tax Group from their employees for all periods to comply in all material respects with the tax, social security and unemployment withholding provisions of applicable federal, state, local and foreign law.

Section 4.14 Permits, Licenses, etc. Each of the Borrower and its Restricted Subsidiaries possesses all permits, licenses, patents, patent rights or licenses, trademarks, trademark rights, trade names rights, and copyrights which are material to the conduct of its business. Each of the Borrower and its Restricted Subsidiaries manages and operates its business in accordance with all applicable Legal Requirements except where the failure to so manage or operate could not reasonably be expected to result in a Material Adverse Change; provided that this Section 4.14 does not apply with respect to Environmental Permits.

Section 4.15 Use of Proceeds. The proceeds of the Advances will be used by the Borrower for the purposes described in Section 6.6. No Credit Party is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U). No proceeds of any Advance will be used to purchase or carry any margin stock in violation of Regulation T, U or X.

Section 4.16 Condition of Property; Casualties. The material Properties used or to be used in the continuing operations of the Borrower and each Restricted Subsidiary, are in good working order and condition, normal wear and tear excepted. Neither the business nor the material Properties of the Borrower or any Restricted Subsidiary has been affected as a result of any fire, explosion, earthquake, flood, drought, windstorm, accident, strike or other labor disturbance, embargo, requisition or taking of such Property or cancellation of contracts, permits or concessions by a Governmental Authority, riot, activities of armed forces or acts of God or of any public enemy, which effect could reasonably be expected to cause a Material Adverse Change.

 

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Section 4.17 Insurance. Each of the Borrower and its Restricted Subsidiaries carry insurance (which may be carried by the Borrower on a consolidated basis) with reputable insurers in respect of such of their respective Properties, in such amounts and against such risks as is customarily maintained by other Persons of similar size engaged in similar businesses.

Section 4.18 Security Interest. Each Credit Party has authorized the filing of financing statements sufficient when filed to perfect the Lien created by the Security Documents. When such financing statements are filed in the offices noted therein, the Administrative Agent will have a valid and perfected security interest in all Collateral that is capable of being perfected by filing financing statements.

Section 4.19 OFAC; Anti-Terrorism. Neither the Borrower nor any Restricted Subsidiary of the Borrower is in violation of any of the country or list based economic and trade sanctions administered and enforced by OFAC. Neither the Borrower nor any Restricted Subsidiary of the Borrower (a) is a Sanctioned Person or a Sanctioned Entity, (b) has its assets located in Sanctioned Entities, or (c) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities. No proceeds of any Advance will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.

Section 4.20 Solvency. Before and after giving effect to the making of each Advance and the issuance, increase, or amendment of each Letter of Credit, the Credit Parties are, when taken as a whole, Solvent.

ARTICLE 5

AFFIRMATIVE COVENANTS

So long as any Obligation shall remain unpaid (other than indemnification obligations which survive termination of this Agreement and which are not yet due and payable), any Lender shall have any Commitment hereunder, or there shall exist any Letter of Credit Exposure, each Credit Party agrees to comply with the following covenants.

Section 5.1 Organization. The Borrower shall, and shall cause each of its respective Restricted Subsidiaries to, preserve and maintain its partnership, limited liability company or corporate existence, rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified as a foreign business entity in each jurisdiction in which qualification is necessary in view of its business and operations or the ownership of its Properties and where failure to qualify could reasonably be expected to cause a Material Adverse Change; provided, however, that nothing herein contained shall prevent any transaction permitted by Section 6.7 or Section 6.8.

Section 5.2 Reporting.

(a) Annual Financial Reports. The Borrower shall provide, or shall cause to be provided, to the Administrative Agent, within the earlier of (x) 90 days after the end of each fiscal year of the Borrower (commencing with the fiscal year ended December 31, 2012) and (y) the date such information is filed with the SEC, (i) a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, such consolidated statements to be audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit; (ii) a

 

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consolidated balance sheet of the Borrower and its Restricted Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, such consolidated statements to be unaudited; and (iii) consolidating balance sheets of the Unrestricted Subsidiaries on an entity basis as at the end of such fiscal year, and the related consolidating statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, such consolidating statements to be unaudited. All such statements described in clauses (i)-(iii) of this Section 5.2(a) shall be certified by the chief executive officer or chief financial officer of the Borrower, to the effect that (1) such statements fairly present, in all material respects, the financial condition, results of operations, shareholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, and (2) there were no material contingent obligations, liabilities for taxes, unusual forward or long-term commitments, or unrealized or anticipated losses of the Borrower and its Subsidiaries, except as disclosed therein and adequate reserves for such items have been made in accordance with GAAP; provided however, that the Borrower shall be deemed to have furnished the information required by clause (i) of this Section 5.2(a) if it shall have timely filed such information for public availability with the SEC and/or on its internet home page;

(b) Quarterly Financials. The Borrower shall provide, or shall cause to be provided, to the Administrative Agent within 45 days after the end of each fiscal quarter of each fiscal year (other than the fourth fiscal quarter of each such fiscal year) of the Borrower (commencing with the fiscal quarter ending March 31, 2012), (i) a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations, shareholder’s equity and cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, as filed with the SEC, (ii) a consolidated balance sheet of the Borrower and its Restricted Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations, shareholder’s equity and cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, and (iii) consolidating balance sheets of the Unrestricted Subsidiaries on an entity basis as at the end of such fiscal quarter, and the related consolidating statements of income or operations, shareholder’s equity and cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, such statements described in clauses (i)-(iii) of this Section 5.2(b) to be certified by the chief executive officer or the chief financial officer of the Borrower as (A) fairly presenting, in all material respects the financial condition, results of operations, shareholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments, and (B) showing that there were no material contingent obligations, liabilities for taxes, unusual forward or long-term commitments, or unrealized or anticipated losses of the Borrower, its Restricted Subsidiaries, and its Unrestricted Subsidiaries, as applicable, except as disclosed therein and adequate reserves for such items have been made in accordance with GAAP, and (ii) a copy of the management discussion and analysis with respect to such financial statements; provided however, that the Borrower shall be deemed to have furnished the information required by this Section 5.2(b) if it shall have timely filed such information for public availability with the SEC and/or on its internet home page;

(c) Compliance Certificate. Concurrently with the delivery of the financial statements referred to in Section 5.2(a) and (b) above, the Borrower shall provide to the Administrative Agent a duly completed Compliance Certificate signed by the chief executive officer or chief financial officer of the Borrower.

(d) [Reserved].

 

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(e) Annual Budget. Within 30 days after the end of each fiscal year of the Borrower, the Borrower shall provide to the Administrative Agent an annual operating, capital and cash flow budget for the Borrower and its Restricted Subsidiaries for the immediately following fiscal year and detailed on a monthly basis;

(f) Defaults. The Borrower shall provide to the Administrative Agent promptly, but in any event within five Business Days after the occurrence thereof, a notice of each Default or Event of Default known to the Responsible Officer of the Borrower or to any of its Restricted Subsidiaries, together with a statement of a Responsible Officer of the Borrower setting forth the details of such Default or Event of Default and the actions which the Credit Parties have taken and proposes to take with respect thereto;

(g) Other Creditors. The Borrower shall provide to the Administrative Agent promptly after the giving or receipt thereof, copies of any default notices given or received by the Borrower or by any of its Restricted Subsidiaries pursuant to the terms of any indenture, loan agreement, credit agreement, or similar agreement evidencing Debt or other obligations in an aggregate principal amount in excess of $5,000,000;

(h) Litigation. The Borrower shall provide to the Administrative Agent promptly after the commencement thereof, notice of all actions, suits, and proceedings before any Governmental Authority, affecting the Borrower or any of its Restricted Subsidiaries or any of their respective assets that has a claim for damages in excess of $10,000,000 or that could otherwise reasonably be expected to result in a cost, expense or loss to the Borrower or any of its Restricted Subsidiaries in excess of $10,000,000;

(i) Environmental Notices. Promptly upon, and in any event no later than 15 days after, the receipt thereof, or the acquisition of knowledge of a Responsible Officer thereof, by any Credit Party, the Borrower shall provide the Administrative Agent with a copy of any form of request, claim, complaint, order, notice, summons or citation received from any Governmental Authority or any other Person, including without limitation any information request related to, or notice of potential responsibility under CERCLA, (i) concerning violations or alleged violations of Environmental Laws, which seeks to impose liability therefore in excess of $10,000,000, (ii) concerning any action or omission on the part of any of the Credit Parties or any of their former Restricted Subsidiaries in connection with Hazardous Waste or Hazardous Substances which could reasonably result in the imposition of liability or costs in excess of $10,000,000 or requiring that action be taken to respond to or clean up a Release of Hazardous Substances or Hazardous Waste into the environment and such action or clean-up could reasonably be expected to exceed $10,000,000, or (iii) concerning the filing of a Lien with respect to environmental matters upon, against or in connection with the Borrower, any Restricted Subsidiary, or any of their respective former Restricted Subsidiaries, or any of their material leased or owned Property, wherever located;

(j) Material Changes. The Borrower shall provide to the Administrative Agent prompt written notice of any event, development of circumstance that has had or would reasonably be expected to give rise to a Material Adverse Change;

(k) Termination Events. As soon as possible and in any event (i) within 30 days after the Borrower or any member of the Controlled Group knows or has reason to know that any Termination Event described in clause (a) of the definition of Termination Event with respect to any Plan has occurred which is reasonably likely to result in material liability to Borrower, and (ii) within 10 days after the Borrower or any member of the Controlled Group knows or has reason to know that any other Termination Event with respect to any Plan has occurred which is reasonably likely to result in a material liability to Borrower, the Borrower shall provide to the Administrative Agent a statement of a Responsible Officer of the Borrower describing such Termination Event and the action, if any, which the Borrower or any Affiliate of the Borrower proposes to take with respect thereto;

(l) Termination of Plans. Promptly and in any event within five Business Days after receipt thereof by the Borrower or any member of the Controlled Group from the PBGC, the Borrower shall provide to the Administrative Agent copies of each notice received by the Borrower or any such member of the Controlled Group of the PBGC’s intention to terminate any Plan or to have a trustee appointed to administer any Plan;

 

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(m) Other ERISA Notices. Promptly and in any event within five Business Days after receipt thereof by the Borrower or any member of the Controlled Group from a Multiemployer Plan sponsor, the Borrower shall provide to the Administrative Agent a copy of each notice received by the Borrower or any member of the Controlled Group concerning the imposition or amount of withdrawal liability imposed on the Borrower or any member of the Controlled Group pursuant to Section 4202 of ERISA;

(n) Other Governmental Notices. Promptly and in any event within five Business Days after receipt thereof by the Borrower or any Restricted Subsidiary, the Borrower shall provide to the Administrative Agent a copy of any notice, summons, citation, or proceeding seeking to modify in any material respect, revoke, or suspend any material contract, license, permit, or agreement with any Governmental Authority;

(o) Disputes; etc. The Borrower shall provide to the Administrative Agent prompt written notice of (i) any claims, legal or arbitration proceedings, proceedings before any Governmental Authority, or disputes, or to the knowledge of any Credit Party, any such actions threatened, or affecting the Borrower or any Restricted Subsidiary, which could reasonably be expected to cause a Material Adverse Change, or any material labor controversy of which the Borrower or any of its Restricted Subsidiaries has knowledge resulting in or reasonably expected to result in a strike against the Borrower or any Restricted Subsidiary, and (ii) any claim, judgment, Lien or other encumbrance (other than a Permitted Lien) affecting any Property of the Borrower or any Restricted Subsidiary, if the value of the claim, judgment, Lien, or other encumbrance affecting such Property shall exceed $5,000,000 and is not otherwise covered by Section 5.2(i) above;

(p) Management Letters; Other Accounting Reports. Promptly upon receipt thereof, a copy of each other report or letter submitted to the Borrower or any Restricted Subsidiary by independent accountants in connection with any annual, interim or special audit made by them of the books of the Borrower and its Restricted Subsidiaries, and a copy of any response by the Borrower or any Restricted Subsidiary of the Borrower, or the board of directors or managers (or other applicable governing body) of the Borrower or any Restricted Subsidiary of the Borrower, to such letter;

(q) Securities Law Filings. Promptly and in any event within five Business Days after the sending or filing thereof, the Borrower shall provide to the Administrative Agent copies of all proxy material, reports and other information which the Borrower or any of its Restricted Subsidiaries files with the SEC or which the Borrower sends to all of its shareholders; provided however, that the Borrower shall be deemed to have furnished the information required by this Section 5.2(q) if it shall have timely filed such information for public availability with the SEC and/or on its internet home page; and

(r) Other Information. Subject to the confidentiality provisions of Section 9.8, the Borrower shall provide to the Administrative Agent such other information respecting the business, operations, or Property of the Borrower or any Restricted Subsidiary, financial or otherwise, as any Lender through the Administrative Agent may reasonably request.

Section 5.3 Insurance.

(a) The Borrower shall, and shall cause each of its Restricted Subsidiaries to, carry and maintain, with financially sound and reputable insurers, property insurance, such public liability insurance, third party property damage insurance with respect to liabilities, losses or damage in respect of the assets, properties and businesses of the Borrower and its Restricted Subsidiaries as may customarily be carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses, in each case in such amounts, with such deductibles, covering such risks and otherwise on such terms and conditions as shall be

 

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customary for such Persons; provided that the Borrower and each Restricted Subsidiary shall maintain at all times pollution legal liability insurance with coverage amounts equal to or greater than, deductibles no greater than, and otherwise on terms and conditions no less favorable to the Lenders than, the pollution legal liability insurance in effect on the date of this Agreement.

(b) Copies of all policies of insurance or certificates thereof covering the Property or business of the Credit Parties, and endorsements and renewals thereof, certified as true and correct copies of such documents by a Responsible Officer of the Borrower shall be delivered by Borrower to and retained by the Administrative Agent. All policies of property insurance with respect to the Collateral either shall have attached thereto a lender’s loss payable endorsement in favor of the Administrative Agent for its benefit and the ratable benefit of the Secured Parties or name the Administrative Agent as loss payee for its benefit and the ratable benefit of the Secured Parties, in either case, in form reasonably satisfactory to the Administrative Agent, and all policies of liability insurance shall name the Administrative Agent for its benefit and the ratable benefit of the Secured Parties as an additional insured. All policies or certificates of insurance shall set forth the coverage, the limits of liability, the name of the carrier, the policy number, and the period of coverage. All such policies shall contain a provision that notwithstanding any contrary agreements between the Borrower, its Restricted Subsidiaries, and the applicable insurance company, such policies will not be canceled or allowed to lapse without renewal without at least 30 days’ (or such shorter period as may be accepted by the Administrative Agent) prior written notice to the Administrative Agent.

(c) If at any time the area in which any Real Property constituting Collateral is located is designated a “flood hazard area” in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency), the Borrower shall, and shall cause each of its Restricted Subsidiaries to, obtain flood insurance in such total amount as required by Regulation H of the Federal Reserve Board, as from time to time in effect and all official rulings and interpretations thereunder or thereof, and otherwise comply with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as it may be amended from time to time.

(d) After the occurrence and during the continuance of an Event of Default, all proceeds of insurance, including any casualty insurance proceeds, property insurance proceeds, proceeds from actions, and any other proceeds, shall be paid directly to the Administrative Agent and if necessary, assigned to the Administrative Agent, to be applied in accordance with Section 7.6 of this Agreement, whether or not the Secured Obligations are then due and payable.

(e) In the event that any insurance proceeds are paid to any Credit Party in violation of clause (d), such Credit Party shall hold the proceeds in trust for the Administrative Agent, segregate the proceeds from the other funds of such Credit Party, and promptly pay the proceeds to the Administrative Agent with any necessary endorsement. Upon the request of the Administrative Agent, each of the Borrower and its Restricted Subsidiaries shall execute and deliver to the Administrative Agent any additional assignments and other documents as may be necessary or desirable to enable the Administrative Agent to directly collect the proceeds as set forth herein.

Section 5.4 Compliance with Laws. The Borrower shall, and shall cause each of its Restricted Subsidiaries to, comply with all federal, state, and local laws and regulations (including Environmental Laws) which are applicable to the operations and Property of any Credit Party and maintain all related permits necessary for the ownership and operation of each Credit Party’s Property and business, except in any case where the failure to so comply or maintain could not reasonably be expected to result in a Material Adverse Change.

Section 5.5 Taxes. The Borrower shall, and shall cause each of its Restricted Subsidiaries to pay and discharge all material taxes, assessments, and other charges and claims related thereto imposed on the Borrower or any of its Restricted Subsidiaries prior to the date on which penalties attach other than any tax, assessment, charge, or claims which is being contested in good faith and for which adequate reserves have been established in compliance with GAAP.

 

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Section 5.6 New Subsidiaries.

(a) Any Domestic Subsidiary formed or acquired after the Effective Date shall be deemed a Restricted Subsidiary unless such Domestic Subsidiary is a Non-Material Domestic Subsidiarity. No Borrower may acquire or form any new Restricted Subsidiary unless each of the following conditions are satisfied in connection with such acquisition, formation or designation:

(i) immediately before and after giving effect to such acquisition, formation, or designation, no Default or Event of Default shall exist and be continuing; and

(ii) the Borrower shall deliver to the Administrative Agent each of the items set forth in Schedule III attached hereto with respect to each Restricted Subsidiary created after the Effective to the extent required in Schedule III.

(b) Any Foreign Subsidiary or Non-Material Domestic Subsidiary formed or acquired after the Effective Date shall be deemed an Unrestricted Subsidiary. The Borrower shall not acquire or form any new Unrestricted Subsidiary unless each of the following conditions are satisfied in connection with such acquisition, formation or designation:

(i) immediately before and after giving effect to such acquisition, formation, or designation, no Default or Event of Default shall exist and be continuing; and

(ii) to the extent that the equity holder of such Unrestricted Subsidiary is the Borrower or a Restricted Subsidiary of the Borrower, such equity holder shall pledge 100% (or 65% in the case of any Foreign Subsidiary) of the Equity Interest owned by such equity holder of such Unrestricted Subsidiary and such evidence of corporate, limited liability company or partnership authority to enter into such pledge agreement as the Administrative Agent may reasonably request, along with share certificates pledged thereby and appropriately executed stock powers in blank, if applicable.

Section 5.7 Security. Each Borrower agrees that at all times before the termination of this Agreement, payment in full of the Obligations (other than customary indemnification obligations which survive termination of this Agreement and which are not yet due and payable), the termination and return of all Letters of Credit (other than Letters of Credit that have either been cash collateralized in accordance with Section 2.2 or as to which arrangements satisfactory to the Issuing Lender in its sole discretion have been made) and termination in full of the Commitments, the Administrative Agent shall have an Acceptable Security Interest in the Collateral (other than Collateral the perfection of which is not required as per the express terms of the applicable Security Document). The Borrower shall, and shall cause each of its Restricted Subsidiaries to, promptly grant to the Administrative Agent a Lien in any Property of such Credit Party or such Restricted Subsidiary now owned or hereafter acquired (other than (i) owned or leased Real Property which is not Material Real Property, (ii) any Excluded Account, (iii) the aircraft acquired in connection with the Rough Rider Acquisition and, (iv) any property which is or would be excluded from the description of Collateral in the Security Agreement), and shall promptly take such actions as may be required under the Security Documents to ensure that the Administrative Agent has an Acceptable Security Interest in such Property (other than Collateral the perfection of which is not required as per the express terms of the applicable Security Document). Notwithstanding the foregoing, the Borrower shall, and shall cause each Restricted Subsidiary to take such actions, including execution and delivery of any Security Documents necessary to create, perfect and maintain an

 

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Acceptable Security Interest in favor of the Administrative Agent in the following Properties, whether now owned or hereafter acquired: (i) all Equity Interests issued by any Domestic Subsidiary (other than any Domestic Subsidiary of a Foreign Subsidiary) and held by a Restricted Subsidiary or the Borrower; and (ii) 100% of Equity Interests issued by First Tier Foreign Subsidiaries which are owned by the Borrower or any Restricted Subsidiary but, in any event, no more than 65% of the outstanding Voting Securities issued by any First Tier Foreign Subsidiary. Notwithstanding the generality of the foregoing, the Borrower shall, and shall cause each of its Restricted Subsidiaries to; (a) appoint certain employees of the Borrower and its Restricted Subsidiaries to serve as the custodians under a Custodial Agreement, pursuant to which such employees shall act as agents for and on behalf of the Administrative Agent as the secured party in connection with Collateral comprising of certificates of title, (b) within 60 days (or such longer period as may be agreed by the Administrative Agent) after the date of purchase for all Certificated Equipment purchased by a Credit Party on or after the Effective Date (other than such equipment that is encumbered by a purchase money Lien or subject to a capital leases permitted under Section 6.1(e)), cause the certificates of title covering such Certificated Equipment to note the Administrative Agent as the holder of the first Lien thereon, (c) cause the certificates of title that name the Administrative Agent as the holder of the first Lien thereon to continue to so name the Administrative Agent (unless the applicable Certificated Equipment is sold or otherwise disposed of as permitted under this Agreement), and (d) at the request of the Administrative Agent, which request may be made at the sole discretion of the Administrative Agent, cause the certificates of title covering all other Certificated Equipment (other than such equipment that is encumbered by a purchase money Lien or subject to a capital leases permitted under Section 6.1(e)) to note the Administrative Agent as the holder of the first Lien thereon.

Section 5.8 Reserved.

Section 5.9 Records; Inspection. The Borrower shall, and shall cause each of its Restricted Subsidiaries to maintain proper, complete and consistent books of record with respect to such Person’s operations, affairs, and financial condition. From time to time upon reasonable prior notice, the Borrower shall permit any Lender and shall cause each of its Restricted Subsidiaries to permit any Lender, at such reasonable times and intervals and to a reasonable extent and under the reasonable guidance of officers of or employees delegated by officers of the Borrower or such Restricted Subsidiary, to, subject to any applicable confidentiality considerations, examine and copy the books and records of the Borrower or such Restricted Subsidiary, to visit and inspect the Property of the Borrower or such Restricted Subsidiary, and to discuss the business operations and Property of the Borrower or such Restricted Subsidiary with the officers and directors thereof.

Section 5.10 Maintenance of Property. Each Borrower shall, and shall cause each of its Restricted Subsidiaries to, maintain their owned, leased, or operated Property in good condition and repair, normal wear and tear excepted; and shall abstain from, and cause each of its Restricted Subsidiaries to abstain from, knowingly or willfully permitting the commission of waste or other injury, destruction, or loss of natural resources, or the occurrence of pollution, contamination, or any other condition in, on or about the owned or operated Property involving the Environment that could reasonably be expected to result in Response activities and that could reasonably be expected to cause a Material Adverse Change.

Section 5.11 [Reserved].

Section 5.12 Certificates of Title. The Administrative Agent shall have received, at least 60 Business Days (or such longer period as may be agreed by the Administrative Agent) after the purchase of Certificated Equipment, a certificate executed by a Responsible Officer of the Borrower effective as of date of delivery and certifying and attaching thereto for each such equipment either (a) certificate of

 

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title for such equipment naming a Credit Party as the owner and naming the Administrative Agent (or one of its subagents) as the holder of the first lien thereon or (b) executed and completed proper documentation evidencing the applicable Credit Party’s application with the appropriate Governmental Authority requesting certificates of title naming such Credit Party as the owner and the Administrative Agent as the holder of the first lien thereon.

Section 5.13 Appraisal Reports; Field Audits. The Borrower will, and will cause each of its Restricted Subsidiaries to, permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to conduct field audits, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with directors, officers, and independent public accountants, all at the expense of the Borrower and at such reasonable advance notice to the Borrower; provided, however, that so long as no Event of Default exists, the Borrower shall not be obligated to pay for more than one (1) such inspection per year and that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.

Section 5.14 Material Agreements. The Borrower shall, and shall cause each of its Restricted Subsidiaries to maintain in full force and effect the Material Agreements and the Borrower shall provide notice to the Administrative Agent promptly, but in any event within five Business Days prior to the occurrence thereof, of any proposed material amendments, supplements or other modifications to any Material Agreement.

Section 5.15 Acquisition Documents. As of the Effective Date, Borrower has provided Administrative Agent with a true and correct copy of each of the TFI Holdings Acquisition Documents, including all amendments and modifications thereto. Except to the extent disclosed in writing to the Administrative Agent on or before the Effective Date, no material rights or obligations of any party to any of such TFI Holdings Acquisition Documents have been waived, and no Credit Party, nor to the actual knowledge of a Responsible Officer of Borrower, any other party to any such TFI Holdings Acquisition Documents, is in default of its obligations thereunder. Each of such TFI Holdings Acquisition Documents is a valid, binding and enforceable obligation of the parties thereto in accordance with its terms and is in full force and effect. As of the Effective Date, each representation and warranty made by each Credit Party, and to the actual knowledge of a Responsible Officer of Borrower, by each other party to such TFI Holdings Acquisition Documents, in such TFI Holdings Acquisition Documents (a) was true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) when made, and (b) will be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on the Effective Date.

Section 5.16 Additional Material Real Property.

(a) In the event that any Credit Party acquires any Material Real Property, then such Credit Party shall, no later than forty-five (45) days (or such longer period as may be agreed by the Administrative Agent as provided below) after (A) acquiring such Material Real Property or (B) any owned Real Property becomes Material Real Property, take all such actions and execute and deliver, or cause to be executed and delivered, all such Mortgages, documents, instruments, agreements, consents, opinions and certificates as described in Section 5.17(a) below that the Administrative Agent shall reasonably request in order to create in favor of the Administrative Agent, for the benefit of the holders of the Secured Obligations, a valid and, subject to any filing and/or recording referred to herein, enforceable Lien on and in the Material Real Property that is prior and

 

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superior in right to any other Lien (other than Permitted Liens). The Administrative Agent may, in its sole discretion, grant extensions of time for compliance or exceptions with the provisions of this Section 5.16 by any Credit Party. In addition to the foregoing, the Borrower shall, at the request of the Required Lenders, deliver, from time to time, to the Administrative Agent such appraisals as are required by law or regulation of Material Real Properties with respect to which the Administrative Agent has been granted a Lien.

(b) With respect to any Leasehold Property of any Credit Party leased pursuant to an agreement entered into after the Effective Date that constitutes Material Real Property and is not subject to a Mortgage, the applicable lessee with respect to such Leasehold Property shall obtain and deliver to the Administrative Agent lien waivers or subordination agreements in substantially the same form as Exhibit I or otherwise in form and substance reasonably satisfactory to the Administrative Agent, in each case duly executed by the applicable lessee and lessor, within forty-five (45) days after entry into the applicable agreement.

Section 5.17 Post-Closing Covenants.

(a) In order to create in favor of the Administrative Agent, for the benefit of the holders of the Secured Obligations, a valid and, subject to any filing and/or recording referred to herein, enforceable Lien on, and security interest in, Material Real Property that is prior and superior in right to any other Lien (other than Permitted Liens), the Administrative Agent (with copies sufficient for each Lender) shall have received from the Credit Parties with respect to (x) Material Real Property that is listed on Schedule IV attached hereto, within thirty (30) days following the First Amendment Effective Date (or such longer period as the Administrative Agent may determine in its sole discretion), and (y) each other Material Real Property, within ninety (90) days following the First Amendment Effective Date (or such longer period as the Administrative Agent may determine in its sole discretion), fully executed Mortgages covering all Material Real Property of any Credit Party, together with

(i) a flood determination certificate issued by the appropriate Governmental Authority or third party indicating whether such Material Real Property is designated as a “flood hazard area”,

(ii) if such Material Real Property is designated to be in a “flood hazard area”, evidence of flood insurance on such Material Real Property obtained by the applicable Credit Party in such total amount as required by Regulation H of the Federal Reserve Board, and all official rulings and interpretations thereunder or thereof, and otherwise in compliance with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973,

(iii) (A) ALTA or TLTA mortgagee title insurance policies issued by one or more title companies designated by Administrative Agent (each, a “Title Policy”) with respect to such Material Real Property (other than the Pipeline), in amounts not less than the fair market value of such Material Real Property, together with a title report issued by a title company with respect thereto and copies of all recorded documents listed as exceptions to title or otherwise referred to therein, each in form and substance reasonably satisfactory to the Administrative Agent, Credit Party hereby agreeing to provide the applicable title companies with all necessary consents, authorizations and other information necessary for the title company to issue the applicable Title Policies in a form insuring the applicable mortgage as a first lien, encumbering the applicable portion of such Material Real Property, subject to no Liens or encumbrances other than Permitted Liens, and (B) evidence reasonably satisfactory to the Administrative Agent that such Credit Party has paid to the title company or to the appropriate Governmental Authorities all expenses and premiums of the title company and all other sums required in connection with the issuance of each Title Policy and all recording and stamp taxes (including mortgage recording and intangible taxes) payable in connection with recording the Mortgage for such Material Real Property in the appropriate real estate records;

 

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(iv) if an exception to the Title Policy with respect to a Material Real Property (other than the Pipeline) would arise without such ALTA or TLTA surveys, ALTA or TLTA surveys of such Material Real Property;

(v) an opinion of counsel (which counsel shall be reasonably satisfactory to the Administrative Agent) in each state in which such Material Real Property is located with respect to the enforceability of the form(s) of Mortgages to be recorded in such state, the recording of such Mortgage, and such other matters as the Administrative Agent may reasonably request, in each case, in form and substance reasonably satisfactory to the Administrative Agent; (E) reports and other reasonable information, in form, scope and substance reasonably satisfactory to the Administrative Agent, regarding environmental matters relating to such Material Real Property; and

(vi) all consents, including, but not limited to, any landlord consents all in form and substance reasonably satisfactory to the Administrative Agent, and other requirements necessary for the Credit Parties to comply with the provisions set forth in this Section 5.17.

(b) On or prior to the Post-Closing Segment Acquisition Deadline, the Borrower shall, or shall cause a Restricted Subsidiary to acquire good and defensible title to the Post-Closing Segment and, simultaneously with such acquisition, take all actions described in subsection (a) hereof with respect to the Post-Closing Segment.

(c) The Borrower and the Restricted Subsidiaries shall use commercially reasonable efforts to deliver to the Administrative Agent within 60 days of the First Amendment Effective Date lien waivers or subordination agreements in the form of Exhibit I, or otherwise in form and substance reasonably satisfactory to the Administrative Agent, and executed by the applicable landlords or lessors, covering each of the Leasehold Properties leased by the Borrower or any of its Restricted Subsidiaries.

(d) (i) Within 90 days following the First Amendment Effective Date (or such longer period as the Administrative Agent may determine in its sole discretion), for each piece of the Certificated Equipment (other than the ▇▇▇▇▇▇▇▇ Equipment) owned by the Borrower or any Restricted Subsidiary, the Administrative Agent shall have either (A) received evidence of the Administrative Agent’s first priority lien on the certificate of title for such Certificated Equipment or (B) shall have entered into other arrangements satisfactory to the Administration Agent with respect thereto, and (ii) within 180 days following the First Amendment Effective Date (or such longer period as the Administrative Agent may determine in its sole discretion), for each piece of the ▇▇▇▇▇▇▇▇ Equipment owned by the Borrower or any Restricted Subsidiary, the Administrative Agent shall have either (A) received evidence of the Administrative Agent’s first priority lien on the certificate of title for such Certificated Equipment or (B) shall have entered into other arrangements satisfactory to the Administration Agent with respect thereto.

ARTICLE 6

NEGATIVE COVENANTS

So long as any Obligation shall remain unpaid (other than indemnification obligations which survive termination of the Existing Credit Agreement and which are not yet due and payable), any Lender shall have any Commitment hereunder, or there shall exist any Letter of Credit Exposure, the Borrower agrees to, and, as applicable, agrees to cause its Restricted Subsidiaries to, comply with the following covenants.

Section 6.1 Debt. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, create, assume, incur, suffer to exist, or in any manner become liable, directly, indirectly, or contingently in respect of, any Debt other than the following (collectively, the “Permitted Debt”):

 

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(a) the Obligations;

(b) intercompany subordinated Debt incurred in the ordinary course of business owed by any Credit Party to any other Credit Party;

(c) Debt in the form of accounts payable to trade creditors for goods or services and current operating liabilities (other than for borrowed money) which in each case is not more than 90 days past due, in each case incurred in the ordinary course of business, as presently conducted, unless contested in good faith by appropriate proceedings and adequate reserves for such items have been made in accordance with GAAP;

(d) Debt existing on the Closing Date and described in Schedule 6.1, together with any refinancing thereof (but in no event may such Debt increase in aggregate principal amount);

(e) Debt constituting purchase money indebtedness and Debt owing in respect of Capital Leases; provided that all such Debt under this clause (e) may not exceed $60,000,000 in aggregate principal amount at any time;

(f) Hedging Arrangements permitted under Section 6.15;

(g) Debt arising from the endorsement of instruments for collection in the ordinary course of business;

(h) unsecured Debt not otherwise permitted under the preceding provisions of this Section 6.1; provided that, (i) the aggregate principal amount thereof shall not exceed $250,000,000 at any time, exclusive of Debt under the Bond Issuances (ii) no principal amount of such Debt matures earlier than six (6) months after the Maturity Date, (iii) the weighted average life to maturity of such Debt is longer than the number of years until the Maturity Date, (iv) at the time of the issuance of such Debt and after giving effect thereto, no Default or Event of Default shall exist or would occur, (v) the agreement or indenture governing such Debt shall have covenants and restrictions that are no more restrictive in any material respect than those set forth in this Agreement and the other Credit Documents; provided that the inclusion of any covenant that is customary with respect to such type of Debt and that is not found in this Agreement shall not be deemed to be more restrictive for purposes of this clause, and (vi) the agreement or indenture governing such Debt shall not have any restriction on the ability of the Borrower or any of its Restricted Subsidiaries to guarantee the Obligations or pledge assets as collateral security for the Obligations;

(i) Debt under the Indentures in an aggregate principal amount not to exceed $400,000,000 provided that, (i) such Debt is not secured by any Lien, (ii) no principal amount of such Debt matures earlier than six (6) months after the Maturity Date, (iii) at the time of the issuance of such Debt and after giving effect thereto, no Default or Event of Default shall exist or would occur, (iv) the agreement or indenture governing such Debt shall have covenants and restrictions that are no more restrictive in any material respects than those set forth in this Agreement and the other Credit Documents; provided that the inclusion of any covenant that is customary with respect to such type of Debt and that is not found in this Agreement shall not be deemed to be more restrictive for purposes of this clause, and (v) the agreement or indenture governing such Debt shall not have any restriction on the ability of the Borrower or any of its Restricted Subsidiaries to guarantee the Obligations or pledge assets as collateral security for the Obligations;

(j) Debt assumed in connection with any Permitted Acquisition; provided, that (i) such assumed Debt was previously existing prior to the consummation of such Permitted Acquisition and was not incurred by the seller or target, as applicable, in contemplation of the making of such Permitted Acquisition, (ii) all Debt described in this clause (j) shall be nonrecourse Debt with respect to any Credit Party or any of its assets (other than the assets financed by the Debt described in this clause (j)), and (iii) all such Debt under this clause (j) may not exceed $10,000,000 in aggregate principal amount at any time;

 

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(k) unsecured subordinated Debt incurred in connection with any Permitted Acquisition; provided that, (i) the aggregate principal amount thereof shall not exceed $20,000,000 at any time, (ii) no principal amount of such Debt matures earlier than six (6) months after the Maturity Date, (iii) the weighted average life to maturity of such Debt is longer than the number of years until the Maturity Date, and (iv) such Debt is subject to a subordination agreement in form and substance satisfactory to the Administrative Agent;

(l) Debt arising in connection with the financing of insurance premiums in the ordinary course of business;

(m) Debt representing deferred compensation to officers, directors, and employees of the Borrower and its Restricted Subsidiaries;

(n) Debt consisting of earn out obligations or other contingent obligations of the Borrower and its Restricted Subsidiaries owing in respect of Permitted Acquisitions or any other Acquisition consented to in accordance with Section 9.3; and

(o) Other unsecured Debt of the Borrower and its Restricted Subsidiaries in an aggregate amount not to exceed $10,000,000 at any time.

Section 6.2 Liens. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, create, assume, incur, or suffer to exist any Lien on the Property of any Credit Party or any Restricted Subsidiary, whether now owned or hereafter acquired, or assign any right to receive any income, other than the following (collectively, the “Permitted Liens”):

(a) Liens securing the Secured Obligations pursuant to the Security Documents;

(b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s liens, and other similar liens arising in the ordinary course of business securing obligations which are not overdue for a period of more than 30 days or are being contested in good faith by appropriate procedures or proceedings and for which adequate reserves have been established;

(c) Liens arising in the ordinary course of business out of pledges or deposits under workers compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation to secure public or statutory obligations;

(d) Liens for taxes, assessment, or other governmental charges which are not yet due and payable or which are being actively contested in good faith by appropriate proceedings and adequate reserves for such items have been made in accordance with GAAP;

(e) Liens securing purchase money debt or Capital Lease obligations permitted under Section 6.1(e); provided that each such Lien encumbers only the Property purchased in connection with the creation of any such purchase money debt or the subject of any such Capital Lease, and all proceeds thereof (including insurance proceeds), and the amount secured thereby is not increased;

(f) Liens securing Debt permitted under Section 6.1(j);

 

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(g) encumbrances consisting of easements, rights-of way, encroachments, zoning restrictions, or other minor defects that do not (individually or in the aggregate) materially and adversely affect the value of the assets encumbered thereby or materially impair the ability of any Credit Party to use such assets in its business, and none of which is violated in any material aspect by existing or proposed structures or land use, including without limitation all minor encumbrances shown on any policy of title insurance delivered to the Administrative Agent with respect to any Material Real Property, so long as such encumbrances do not secure Debt;

(h) Liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies and burdening only deposit accounts or other funds maintained with a depository institution;

(i) 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;

(j) judgment and attachment Liens not giving rise to an Event of Default, provided that (i) 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 (ii) no action to enforce such Lien has been commenced; and

(k) Liens in favor of a banking institution arising by operation of law encumbering deposits in accounts held by such banking institution incurred in the ordinary course of business and which are within the general parameters customary in the banking industry;

(l) Liens of a seller solely on any ▇▇▇▇ ▇▇▇▇▇▇▇ money deposits made by any Borrower or any of its Restricted Subsidiaries in connection with any letter of intent, purchase agreement permitted hereunder or any Acquisition Agreement permitted hereunder;

(m) Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases of personal property entered into in the ordinary course of business;

(n) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(o) Licenses of patents, trademarks and other intellectual property rights granted by the Borrower or any of its Restricted Subsidiaries in the ordinary course of business and not interfering in any respect with the ordinary conduct of the business of the Borrower or such Restricted Subsidiary;

(p) Liens existing as of the Closing Date and described in Schedule 6.2; provided that the Debt secured by such Liens may not be increased;

(q) Liens in favor of collecting banks under Section 4-210 of the UCC; and

(r) Liens not otherwise permitted hereunder securing Debt not in excess of $10,000,000 in the aggregate at any one time outstanding.

Section 6.3 Investments. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, make or hold any direct or indirect investment in any Person, including capital contributions to the Person, investments in or the acquisition of the debt or equity securities of the Person, or any loans, guaranties, trade credit, or other extensions of credit to any Person, other than the following (collectively, the “Permitted Investments”):

 

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(a) investments in the form of trade credit to customers of a Credit Party arising in the ordinary course of business and represented by accounts from such customers;

(b) Liquid Investments;

(c) loans, advances, or capital contributions to, or investments in, or purchases or commitments to purchase any stock or other securities or evidences of indebtedness of, or interests in, any Person existing on the Effective Date, in each case as specified in the attached Schedule 6.3 and made on or prior to the Effective Date; provided that, the respective amounts of such loans, advances, capital contributions, investments, purchases and commitments shall not be increased (other than appreciation), except as may be permitted by any other clause of this Section 6.3;

(d) loans, advances and equity contributions by a Credit Party to any other Credit Party; provided that the aggregate amount of equity contributions to non-wholly owned Restricted Subsidiaries shall not exceed $50,000,000;

(e) creation of any additional Subsidiaries in compliance with Section 5.6 and Schedule III;

(f) Capital Expenditures permitted under Section 6.19;

(g) Permitted Acquisitions and any acquisition of equity securities in connection with the Rough Rider Acquisition (other than the Equity Interests in Dodge Water Depot) or the AWS Acquisition;

(h) (i) investments in any Equity Interest received in satisfaction or partial satisfaction thereof from financially troubled account debtors, and (ii) deposits, prepayments and other credits to suppliers and vendors made in the ordinary course of business of the Borrower and its Restricted Subsidiaries;

(i) Investments in Unrestricted Subsidiaries, Foreign Subsidiaries and joint ventures in an aggregate amount outstanding at any time (on a cost basis) which, when combined with (without duplication) the aggregate amount of consideration paid for any Equity Interests in Unrestricted Subsidiaries under Section 6.4(b)(ii), would not exceed $40,000,000;

(j) Investments received as the non-cash portion of consideration received in connection with the sale of disposition of any Property permitted by Section 6.8;

(k) to the extent permitted under applicable laws, investments consisting of loans and advances to officers, directors and other employees of the Borrower and its Restricted Subsidiaries for travel, entertainment, relocation and analogous ordinary business purposes in an aggregate amount outstanding at any time (on a cost basis) not to exceed $500,000;

(l) Investments in Dodge Water Depot existing on the First Amendment Effective Date, provided that the amount of such Investments shall not increase after the First Amendment Effective Date (other than appreciation), except as may be permitted by any other clause of this Section 6.3; and

(m) other Investments not listed above and not otherwise prohibited by this Agreement in an aggregate amount outstanding at any time (on a cost basis) not to exceed $10,000,000.

Section 6.4 Acquisitions. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, make any Acquisition without the consent of the Majority Lenders, other than (x) the Rough Rider Acquisition and the AWS Acquisition, and (y) an Acquisition that satisfies the following conditions (a “Permitted Acquisition”):

 

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(a) the Property acquired (or the Property of the Person acquired) in such Acquisition is a business or is used or useful in a business permitted under Section 6.11;

(b) in the case of an Acquisition of Equity Interests, (i) the board of directors (or other comparable governing body) of such other Person shall have approved the Acquisition and (ii) if the Acquisition is of Equity Interests in an Unrestricted Subsidiary, the amount of aggregate consideration paid for all such Equity Interests in Unrestricted Subsidiaries, when combined with (without duplication) the aggregate amount of Investments in Unrestricted Subsidiaries, Foreign Subsidiaries and joint ventures (on a cost basis) under Section 6.3(i), would not exceed $40,000,000;

(c) any earn outs or other similar deferred or contingent obligations of any Borrower in connection with such Acquisition, to the extent payable in cash or Property (other than stock of the Borrower) shall be subordinated to the Obligations in a manner and to an extent reasonably satisfactory to the Administrative Agent;

(d) (i) no Default or Event of Default shall exist and be continuing immediately before or immediately after giving effect thereto and (ii) the representations and warranties made by the Borrower in each Credit Document shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), unless such representation or warranty relates to an earlier date which remains true and correct in all material respects as of such earlier date (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof); and

(e) for Acquisitions in which the Borrower or its Restricted Subsidiaries are paying cash consideration, immediately after giving effect to such Acquisition, the available and unencumbered cash of the Borrower and its Restricted Subsidiaries plus Availability shall not be less than $50,000,000 in the aggregate.

Section 6.5 Agreements Restricting Liens. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, create, incur, assume or permit to exist any contract, agreement or understanding (other than (i) this Agreement and the Security Documents, (ii) agreements governing Debt permitted by Sections 6.1(d), (e) and (j) to the extent such restrictions govern only the asset financed pursuant to such Debt, (iii) the Bond Issuance Documents, (iv) any prohibition or limitation that exists pursuant to applicable requirements of a Governmental Authority, (v) any prohibition or limitation that restricts subletting or assignment of leasehold interests contained in any lease governing a leasehold interest of Borrower or its Restricted Subsidiaries and customary provisions in other contracts restricting assignment thereof and (v) any prohibition or limitation that exists in any contract to which a Credit Party is a party on the date hereof so long as (x) such prohibition or limitation is generally applicable and does not specifically address any of the Debt or the Liens granted under the Credit Documents, and (y) the noncompliance of such prohibition or limitation would not reasonably be expected to be adverse to the Administrative Agent or the Lenders.) which in any way prohibits or restricts the granting, conveying, creation or imposition of any Lien on any of its Property, whether now owned or hereafter acquired, to secure the Secured Obligations or restricts any Restricted Subsidiary from paying Restricted Payments to the Borrower, or which requires the consent of or notice to other Persons in connection therewith.

Section 6.6 Use of Proceeds; Use of Letters of Credit. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to use the proceeds of the Revolving Advances, the Swing Line Advances or the Letters of Credit for any purposes other than (i) for working capital purposes of any Credit Party (including Permitted Acquisitions), (ii) to finance Capital Expenditures, (iii) for other general corporate purposes of any Credit Party; (iv) to refinance the Existing Debt; (v) to finance the TFI Holdings Acquisition and repay indebtedness in connection therewith; (vi) to finance the Rough Rider Acquisition and repay indebtedness in connection therewith; (vii) to finance the AWS Acquisition and

 

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repay indebtedness in connection therewith; or (viii) to pay fees, commissions and expenses in connection with the closing of the TFI Holdings Acquisition, the AWS Acquisition, the Rough Rider Acquisition, the Bond Issuances and the refinancing of the Existing Debt. No Credit Party shall, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly, use any part of the proceeds of Advances or Letters of Credit for any purpose which violates, or is inconsistent with, Regulations T, U, or X.

Section 6.7 Corporate Actions; Accounting Changes.

(a) The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, merge or consolidate with or into any other Person, except that (x) the Borrower may merge with any of its wholly-owned Restricted Subsidiaries and any Credit Party may merge or be consolidated with or into any other Credit Party; provided that (i) immediately after giving effect to any such proposed transaction no Default would exist, (ii) in the case of any such merger to which the Borrower is a party, the Borrower is the surviving entity, and (iii) in the case of any such merger to which a wholly-owned Restricted Subsidiary is a party, a wholly-owned Restricted Subsidiary is the surviving entity, and (y) RRE may merge with and into the Borrower, with the Borrower as the surviving company, on the First Amendment Effective Date.

(b) The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, (i) without written notice to the Administrative Agent, change its name, change its state of incorporation, formation or organization, change its organizational identification number or reorganize in another jurisdiction, (ii) create or suffer to exist any Subsidiary not existing on the date of this Agreement, provided that, the Borrower may create or acquire a new Subsidiary if the Credit Parties and such new Subsidiary complies with Section 5.6 and Schedule III, and such transactions otherwise comply with the terms of this Agreement, (iii) without prior written notice to, and prior consent of, the Administrative Agent, amend, supplement, modify or restate their articles or certificate of incorporation or formation, limited partnership agreement, bylaws, limited liability company agreements, or other equivalent organizational documents in a manner that could reasonably be expected to be materially adverse to the interests of the Administrative Agent and the Lenders, (v) allow any Restricted Subsidiary to issue Equity Interests to any Person other than the Borrower or another Restricted Subsidiary, or (vi) change its method of accounting employed in the preparation of the financial statements referred to in Section 4.4 or change the fiscal year end of the Borrower in each case unless such change is required to conform to GAAP or is approved in writing by the Administrative Agent.

Section 6.8 Sale of Assets. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, sell, convey, dispose or otherwise transfer any of its assets except that (a) any Credit Party may sell inventory, and license intellectual property in the ordinary course of business, (b) any Credit Party may sell, convey, dispose or otherwise transfer any of its assets to any other Credit Party so long as no Default or Event of Default has occurred and is continuing or would be caused thereby; provided that the receiving Credit Party shall ratify, grant and confirm the Liens on such assets (and any other related Collateral) pursuant to documentation satisfactory to the Administrative Agent, (c) any Credit Party may sell, convey, dispose or otherwise transfer equipment that is in need of replacement (as determined by such Credit Party in the exercise of its business judgment) to third parties if (i) such Credit Party receives fair market value for such equipment, and (ii) 75% of the consideration received for such equipment is cash, (d) any Credit Party may sell, convey, dispose or otherwise transfer any of its assets no longer used or useful in its business, (e) any Credit Party may sell, convey, dispose or otherwise transfer accounts or payment intangibles (each as defined in the UCC) resulting from the compromise or settlement thereof in the ordinary course of business for less than the full amount thereof, (f) any Credit Party may sell, convey, dispose or otherwise transfer Liquid Investments in the ordinary course of business, (g) any Credit Party may sell, convey, dispose or otherwise transfer licenses, sublicenses, leases or subleases (other than leases or subleases of Material Real Property) granted to any third parties in arm’s-length commercial transactions in the ordinary course of business that do not

 

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interfere in any material respect with the business of the Borrower or any of its Restricted Subsidiaries, (h) any Credit Party may abandon intellectual property in the ordinary course of business to the extent the same does not individually or in the aggregate materially affect the ability of the Borrower or its Restricted Subsidiaries to operate its businesses, (i) any Credit Party may sell or exchange specific items of equipment solely to replace equipment with replacement equipment in the ordinary course of business; and (j) the Borrower and its Restricted Subsidiaries may sell, convey, dispose or otherwise transfer any Properties not otherwise permitted under the preceding clauses (a) – (j); provided that, (x) the aggregate amount of all such sales, conveyance, dispositions and transfers shall not exceed $10,000,000 in any fiscal year, and (y) the Borrower shall not cease to directly or indirectly own 100% of a wholly-owned Restricted Subsidiary as a result of a transaction otherwise permitted hereunder.

Section 6.9 Restricted Payments. The Borrower shall not make, nor shall it permit any of its Restricted Subsidiaries to make any Restricted Payments except that, so long as no Default exists or would result from the making of such Restricted Payment, the Restricted Subsidiaries of the Borrower may make:

(a) Restricted Payments to the Borrower or any other Credit Party that is a Restricted Subsidiary of the Borrower;

(b) Restricted Payments in the form of cash distributions made by AWS; provided that, if a Default or Event of Default shall exist before or immediately after giving effect thereto on a pro forma basis, Restricted Payments in the form of cash distributions made by AWS shall be limited to $2,000,000 on an aggregate basis; and

(c) So long as no Default or Event of Default shall exist before and immediately after giving effect thereto on a pro forma basis, the Borrower may purchase, redeem, retire of otherwise acquire its common stock Equity Interest in accordance with warrant and equity buy-back programs in existence as of the Effective Date in an aggregate amount not to exceed $3,000,000 in any fiscal year.

Section 6.10 Affiliate Transactions. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction or series of transactions (including, but not limited to, the purchase, sale, lease or exchange of Property, the making of any investment, the giving of any guaranty, the assumption of any obligation or the rendering of any service) with any of their Affiliates which are not Credit Parties unless such transaction or series of transactions is on terms no less favorable to the Borrower or any Restricted Subsidiary, as applicable, than those that could be obtained in a comparable arm’s length transaction with a Person that is not such an affiliate except the restrictions in this Section 6.10 shall not apply to: (a) the Restricted Payments permitted under Section 6.9, (b) Investments by a Credit Party in the form of Equity Interests of another Credit Party, (c) Permitted Investments described in Section 6.3 (j); and (d) reasonable and customary director, officer and employee compensation (including bonuses), indemnification and other benefits (including retirement, health, stock option and other benefit plans).

Section 6.11 Line of Business. The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, engage in any business other than the businesses engaged in by the Credit Parties on the First Amendment Effective Date (after giving effect to the consummation of the TFI Holdings Acquisition, the AWS Acquisition and the Rough Rider Acquisition) and businesses that are substantially similar, related or incidental thereto, including without limitation the provision of products and water solutions for energy development and any business in the water industry.

 

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Section 6.12 Hazardous Materials. No Credit Party (a) shall, nor shall it permit any of its Restricted Subsidiaries to, create, handle, transport, use, or dispose of any Hazardous Substance or Hazardous Waste, except in the ordinary course of its business and except in compliance with Environmental Laws other than to the extent that such non-compliance could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change or in any liability to the Lenders or the Administrative Agent, and (b) shall, nor shall it permit any of its Restricted Subsidiaries to, release any Hazardous Substance or Hazardous Waste into the environment and shall not permit any Credit Party’s or any Restricted Subsidiary’s Property to be subjected to any release of Hazardous Substance or Hazardous Waste, except in compliance with Environmental Laws other than to the extent that such non-compliance could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change or in any liability on the Lenders or the Administrative Agent.

Section 6.13 Compliance with ERISA. Except for matters that individually or in the aggregate could not reasonably be expected to cause a Material Adverse Change, no Credit Party shall, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly: (a) engage in any transaction in connection with which the Borrower or any Restricted Subsidiary could be subjected to either a civil penalty assessed pursuant to section 502(c), (i) or (l) of ERISA or a tax imposed by Chapter 43 of Subtitle D of the Code; (b) terminate, or permit any member of the Controlled Group to terminate, any Plan in a manner, or take any other action with respect to any Plan, which could result in any liability to the Borrower, any Restricted Subsidiary or any member of the Controlled Group to the PBGC; (c) fail to make, or permit any member of the Controlled Group to fail to make, full payment when due of all amounts which, under the provisions of any Plan, agreement relating thereto or applicable law, the Borrower, a Restricted Subsidiary or member of the Controlled Group is required to pay as contributions thereto; (d) permit to exist, or allow any Restricted Subsidiary or any member of the Controlled Group to permit to exist, any accumulated funding deficiency (or unpaid minimum required contribution for plan years after December 31, 2007) within the meaning of Section 302 of ERISA or section 412 of the Code, whether or not waived, with respect to any Plan; (e) permit, or allow any member of the Controlled Group to permit, the actuarial present value of the benefit liabilities (as “actuarial present value of the benefit liabilities” shall have the meaning specified in section 4041 of ERISA) under any Plan that is regulated under Title IV of ERISA to exceed the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities; (f) contribute to or assume an obligation to contribute to, or permit any member of the Controlled Group to contribute to or assume an obligation to contribute to, any Multiemployer Plan; (g) acquire, or permit any member of the Controlled Group to acquire, an interest in any Person that causes such Person to become a member of the Controlled Group if such Person sponsors, maintains or contributes to, or at any time in the six-year period preceding such acquisition has sponsored, maintained, or contributed to, (1) any Multiemployer Plan, or (2) any other Plan that is subject to Title IV of ERISA under which the actuarial present value of the benefit liabilities under such Plan exceeds the current value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities; (h) incur, or permit any member of the Controlled Group to incur, a liability to or on account of a Plan under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA; or (i) contribute to or assume an obligation to contribute to any employee welfare benefit plan, as defined in section 3(1) of ERISA, including, without limitation, any such plan maintained to provide benefits to former employees of such entities, that may not be terminated by such entities in their sole discretion at any time without any liability.

Section 6.14 Sale and Leaseback Transactions. No Credit Party shall, nor shall it permit any of its Restricted Subsidiaries to, sell or transfer to a Person any Property, whether now owned or hereafter acquired, if at the time or thereafter the Borrower or a Restricted Subsidiary shall lease as lessee such Property or any part thereof or other Property which the Borrower or a Restricted Subsidiary intends to use for substantially the same purpose as the Property sold or transferred, other than sale and leaseback transactions involving Property having an aggregate asset value for all such sale and leaseback transactions permitted hereunder of not more than $20,000,000.

 

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Section 6.15 Limitation on Hedging. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, (a) purchase, assume, or hold a speculative position in any commodities market or futures market or enter into any Hedging Arrangement for speculative purposes; or (b) be party to or otherwise enter into any Hedging Arrangement which (i) is entered into for reasons other than as a part of its normal business operations as a risk management strategy and/or hedge against changes resulting from market conditions related to the Borrower’s or its Restricted Subsidiaries’ operations, or (ii) obligates the Borrower or any of its Restricted Subsidiaries to any margin call requirements or otherwise requires the Borrower or any of its Restricted Subsidiaries to put up money, assets or other security. Furthermore, no Credit Party shall, nor shall it permit any of its Restricted Subsidiaries be party to or otherwise enter into any Hedging Arrangement which relate to interest rates if (A) such Hedging Arrangement relate to payment obligations on Debt which is not permitted to be incurred under Section 6.1 above, (B) the aggregate notional amount of all such Hedging Arrangements exceeds 50% of the anticipated outstanding principal balance of the Debt to be hedged by such Hedging Arrangements or an average of such principal balances calculated using a generally accepted method of matching interest swap contracts to declining principal balances, the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding indebtedness to be hedged by such contract, (C) such Hedging Arrangement is with a counterparty or has a guarantor of the obligation of the counterparty who (unless such counterparty is a Lender or one of its Affiliates) at the time the Hedging Arrangement is made is rated lower than A by S & P or A2 by Moody’s, or (D) as to any such Hedging Arrangement covering the Debt incurred under this Agreement, such Hedging Arrangement is with a counterparty that is not a Lender or an Affiliate of a Lender.

Section 6.16 Maximum Total Debt Leverage Ratio. Borrower shall not permit the Maximum Total Debt Leverage Ratio to be more than (a) as of the fiscal quarter ending September 30, 2012, 4.50 to 1.00, (b) as of each fiscal quarter ending during the period from and including December 31, 2012 through and including March 31, 2014, 4.00 to 1.00, and (c) for each fiscal quarter ending thereafter, 3.75 to 1.00.

Section 6.17 Maximum Senior Secured Debt Leverage Ratio. Borrower shall not permit the Maximum Senior Secured Debt Leverage Ratio as of each fiscal quarter end, beginning with the fiscal quarter ending, June 30, 2012, to be greater than 2.50 to 1.00.

Section 6.18 Minimum Interest Coverage Ratio. Borrower shall not permit the Minimum Interest Coverage Ratio as of each fiscal quarter end of the Borrower, beginning with the fiscal quarter ending, June 30, 2012, to be less than 2.75 to 1.00.

Section 6.19 Capital Expenditures. For any fiscal year during which the Maximum Total Debt Leverage Ratio for any quarter was greater than or equal to 2.50 to 1.00, the Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, allow the aggregate Capital Expenditures expended by the Borrower and its Restricted Subsidiaries in such fiscal year to exceed the CapEx Basket Amount for such fiscal year.

Section 6.20 Landlord Agreements. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to (a) hold, store or otherwise maintain any equipment or inventory that is intended to constitute Collateral pursuant to the Security Documents at premises within the U.S. which are not owned by a Credit Party unless (i) such equipment is located at the job site under which such equipment is then currently under contract, (ii) such equipment or inventory is located at premises within the U.S. that are leased by a Credit Party and which are covered by a lien waiver or subordination agreement substantially the same form as Exhibit I or otherwise in form and substance reasonably satisfactory to the Administrative Agent, (iii) such equipment is office equipment, (iv) such equipment or inventory is in transit, (v) such equipment is off location for servicing, repairs or modification, or is

 

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otherwise in transit, (vi) such equipment is in the possession of employees or (vii) the aggregate value of all equipment and inventory located at premises which are not owned by a Credit Party and which are not covered by a lien waiver or subordination agreement in substantially the same form as Exhibit I or otherwise in form and substance reasonably satisfactory to the Administrative Agent does not exceed $5,000,000, or (b) after the Effective Date, enter into any new verbal or written leases for premises with any Person who has not executed a lien waiver or subordination agreement in substantially the same form as Exhibit I or otherwise in form and substance reasonably satisfactory to the Administrative Agent unless the equipment or inventory located on such premises would fall under any of the provisions in the foregoing clause (a).

Section 6.21 Operating Leases. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, enter into any lease that constitutes an operating lease under GAAP if the obligations of a Credit Party or such Restricted Subsidiary as lessee under such lease would cause its lease payments (excluding payments for taxes, insurance, and other non-rental expenses to the extent not included within the stated amount of the rental payments under such lease) in respect of all such leases entered into by the Borrower and its Restricted Subsidiaries to exceed $20,000,000 during any fiscal year of the Borrower.

Section 6.22 Prepayment of Certain Debt and Other Obligations. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, or make any payment in violation of any subordination terms of, any Debt, except (a) the prepayment of the Obligations in accordance with the terms of this Agreement, (b) regularly scheduled or required repayments or redemptions of Permitted Debt (other than Debt issued in accordance with the Bond Issuance) and refinancings and refundings of such Permitted Debt so long as such refinancings and refundings would otherwise comply with Section 6.1, (c) so long as no Event of Default exists or would result therefrom, other prepayments of Permitted Debt not described in the immediately preceding clauses (a) and (b), but specifically excluding any prepayments, redemptions, purchases, defeasance, or other satisfaction of Debt issued in accordance with the Bond Issuance.

ARTICLE 7

DEFAULT AND REMEDIES

Section 7.1 Events of Default. The occurrence of any of the following events shall constitute an “Event of Default” under this Agreement and any other Credit Document:

(a) Payment Failure. Any Credit Party (i) fails to pay any principal or interest when due under this Agreement (including reimbursements for Letters of Credit) or (ii) fails to pay, within three Business Days of when due, any other amount due under this Agreement or any other Credit Document, including payments of fees, reimbursements, and indemnifications;

(b) False Representation or Warranties. Any representation or warranty made or deemed to be made by any Credit Party or any officer thereof in this Agreement, in any other Credit Document or in any certificate delivered in connection with this Agreement or any other Credit Document is incorrect, false or otherwise misleading in any material respect (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) at the time it was made or deemed made;

(c) Breach of Covenant. (i) Any breach by any Credit Party of any of the covenants in Section 5.3(a) or Article 6 of this Agreement or the corresponding covenants in any Guaranty or (ii) any breach by any Credit Party of any other covenant contained in this Agreement or any other Credit Document and such breach shall

 

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remain unremedied for a period of thirty days following the earlier of (A) the date on which Administrative Agent gave notice of such failure to Borrower and (B) the date any officer of the Borrower or any Restricted Subsidiary acquires knowledge of such failure;

(d) Guaranties. Any provisions in the Guaranties shall at any time (before its expiration according to its terms) and for any reason cease to be in full force and effect and valid and binding on the Guarantors party thereto or shall be contested by any party thereto; any Guarantor shall deny it has any liability or obligation under such Guaranties; or any Guarantor shall cease to exist other than as expressly permitted by the terms of this Agreement;

(e) Security Documents. Any Security Document shall at any time and for any reason cease to create an Acceptable Security Interest in the Property purported to be subject to such agreement (other than Collateral the perfection of which is not required as per the express terms of the Security Document) in accordance with the terms of such agreement or any material provisions thereof shall cease to be in full force and effect and valid and binding on the Credit Party that is a party thereto or any such Person shall so state in writing (unless released or terminated pursuant to the terms of such Security Document);

(f) Cross-Default. (i) The Borrower or any Guarantor shall fail to pay any principal of or premium or interest on its Debt which is outstanding in a principal amount of at least $10,000,000 individually or when aggregated with all such Debt of the Borrower and the Restricted Subsidiaries so in default (but excluding Debt evidenced by the Notes) when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; (ii) any other event shall occur or condition shall exist under any agreement or instrument relating to Debt (including, without limitation, any event of default or termination event under any Hedging Arrangement) which is outstanding in a principal amount of at least $10,000,000 individually or when aggregated with all such Debt of the Borrower and the Restricted Subsidiaries so in default (other than Debt evidenced by the Notes), and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt prior to the stated maturity thereof; or (iii) any such Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment or mandatory prepayment in connection with the disposition or casualty with respect to any Property securing such Debt); provided that, for purposes of this paragraph (f), the “principal amount” of the obligations in respect of Hedging Arrangements at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that would be required to be paid if such Hedging Arrangements were terminated at such time;

(g) Bankruptcy and Insolvency. (i) Except as permitted under Section 6.7 above, any Credit Party or any Restricted Subsidiary of the Borrower shall terminate its existence or dissolve or (ii) any Credit Party or any Restricted Subsidiary of the Borrower (A) admits in writing its inability to pay its debts generally as they become due; makes an assignment for the benefit of its creditors; consents to or acquiesces in the appointment of a receiver, liquidator, fiscal agent, or trustee of itself or any of its Property; files a petition under bankruptcy or other laws for the relief of debtors; or consents to any reorganization, arrangement, workout, liquidation, dissolution, or similar relief or (B) shall have had, without its consent: any court enter an order appointing a receiver, liquidator, fiscal agent, or trustee of itself or any of its Property; any petition filed against it seeking reorganization, arrangement, workout, liquidation, dissolution or similar relief under bankruptcy or other laws for the relief of debtors and such petition shall not be dismissed, stayed, or set aside for an aggregate of 60 days, whether or not consecutive;

(h) Settlements; Adverse Judgment. The Borrower or any of its Restricted Subsidiaries enters into a settlement of any claim against any of them when a suit has been filed or suffers final judgments against any of them since the date of this Agreement in an aggregate amount (less (i) any insurance proceeds covering such

 

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settlements or judgments which are received or as to which the insurance carriers (which carriers must be solvent and unaffiliated with any of the Credit Parties) admit liability, and (ii) any escrowed proceeds attributable to indemnities granted by an indemnifying party in favor of the Credit Parties, but only to the extent such indemnifying party has acknowledged that the applicable Credit Party is entitled to such escrowed proceeds) greater than $10,000,000 and, in the case of final judgments, either (A) enforcement proceedings shall have been commenced by any creditor upon such judgments or (B) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgments, by reason of a pending appeal or otherwise, shall not be in effect;

(i) Termination Events. Any Termination Event with respect to a Plan shall have occurred, and, 30 days after notice thereof shall have been given to the Borrower by the Administrative Agent, such Termination Event shall not have been corrected and shall have created and caused to be continuing a material risk of Plan termination or liability for withdrawal from the Plan as a “substantial employer” (as defined in Section 4001(a)(2) of ERISA), which termination could reasonably be expect to result in a liability of, or liability for withdrawal could reasonably be expected to be, greater than $10,000,000 to be assessed against the Borrower or any of its Restricted Subsidiaries;

(j) Plan Withdrawals. The Borrower or any member of the Controlled Group as employer under a Multiemployer Plan shall have made a complete or partial withdrawal from such Multiemployer Plan and such withdrawing employer shall have incurred a withdrawal liability in an annual amount exceeding $10,000,000; or

(k) Change in Control. The occurrence of a Change in Control.

Section 7.2 Optional Acceleration of Maturity. If any Event of Default (other than an Event of Default under Section 7.1(g)) shall have occurred and be continuing, then, and in any such event,

(a) the Administrative Agent (i) shall at the request, or may with the consent, of the Majority Lenders, by notice to the Borrower, declare that the obligation of each Lender to make Advances and the obligation of the Issuing Lender to issue Letters of Credit shall be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Majority Lenders, by notice to the Borrower, declare the Notes, all interest thereon, and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Notes, all such interest, and all such amounts shall become and be forthwith due and payable in full, without presentment, demand, protest or further notice of any kind (including, without limitation, any notice of intent to accelerate or notice of acceleration), all of which are hereby expressly waived by each of the Credit Parties,

(b) the Borrower shall, on demand of the Administrative Agent at the request or with the consent of the Majority Lenders, deposit with the Administrative Agent into the Cash Collateral Account an amount of cash equal to the outstanding Letter of Credit Exposure as security for the Secured Obligations to the extent the Letter of Credit Obligations are not otherwise paid or cash collateralized at such time, and

(c) the Administrative Agent shall at the request of, or may with the consent of, the Majority Lenders proceed to enforce its rights and remedies under the Security Documents, the Guaranties, or any other Credit Document for the ratable benefit of the Secured Parties by appropriate proceedings.

Section 7.3 Automatic Acceleration of Maturity. If any Event of Default pursuant to Section 7.1(g) shall occur,

(a) the obligation of each Lender to make Advances and the obligation of the Issuing Lender to issue Letters of Credit shall immediately and automatically be terminated and the Notes, all interest on the Notes, and all other amounts payable under this Agreement shall immediately and automatically become and be due and payable in full, without presentment, demand, protest or any notice of any kind (including, without limitation, any notice of intent to accelerate or notice of acceleration), all of which are hereby expressly waived by each of the Credit Parties.

 

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(b) the Borrower shall, on demand of the Administrative Agent at the request or with the consent of the Majority Lenders, deposit with the Administrative Agent into the Cash Collateral Account an amount of cash equal to the outstanding Letter of Credit Exposure as security for the Secured Obligations to the extent the Letter of Credit Obligations are not otherwise paid or cash collateralized at such time, and

(c) the Administrative Agent shall at the request of, or may with the consent of, the Majority Lenders proceed to enforce its rights and remedies under the Security Documents, the Guaranties, or any other Credit Document for the ratable benefit of the Secured Parties by appropriate proceedings.

Section 7.4 Set-off. Upon (a) the occurrence and during the continuance of any Event of Default and (b) the making of the request or the granting of the consent, if any, specified by Section 7.2 to authorize the Administrative Agent to declare the Notes and any other amount payable hereunder due and payable pursuant to the provisions of Section 7.2 or the automatic acceleration of the Notes and all amounts payable under this Agreement pursuant to Section 7.3, the Administrative Agent and each Lender 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 indebtedness at any time owing by the Administrative Agent or such Lender to or for the credit or the account of any Credit Party against any and all of the obligations of the Borrower now or hereafter existing under this Agreement, the Notes held by the Administrative Agent or such Lender, and the other Credit Documents, irrespective of whether or not the Administrative Agent or such Lender shall have made any demand under this Agreement, such Note, or such other Credit Documents, and although such obligations may be unmatured. Each Lender agrees to promptly notify the Borrower after any such set-off and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Administrative Agent and each Lender under this Section 7.4 are in addition to any other rights and remedies (including, without limitation, other rights of set-off) which the Administrative Agent or such Lender may have.

Section 7.5 Remedies Cumulative, No Waiver. No right, power, or remedy conferred to any Lender in this Agreement or the Credit Documents, or now or hereafter existing at law, in equity, by statute, or otherwise shall be exclusive, and each such right, power, or remedy shall to the full extent permitted by law be cumulative and in addition to every other such right, power or remedy. No course of dealing and no delay in exercising any right, power, or remedy conferred to any Lender in this Agreement and the Credit Documents or now or hereafter existing at law, in equity, by statute, or otherwise shall operate as a waiver of or otherwise prejudice any such right, power, or remedy. Any Lender may cure any Event of Default without waiving the Event of Default. No notice to or demand upon the Borrower or any other Credit Party shall entitle the Borrower or any other Credit Party to similar notices or demands in the future.

Section 7.6 Application of Payments. Prior to an Event of Default, all payments made hereunder shall be applied by the Administrative Agent as directed by the Borrower, but subject to the terms of this Agreement, including the application of prepayments according to Section 2.4 and Section 2.11. During the existence of an Event of Default, all payments and collections received by the Administrative Agent (other than as a result of the exercise of remedies against Collateral or against the Borrower or any Restricted Subsidiary) shall be applied to the Secured Obligations in accordance with Section 2.11 and otherwise in the following order:

 

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FIRST, to the payment of all costs and expenses incurred by the Administrative Agent (in its capacity as such hereunder or under any other Credit Document) in connection with this Agreement or any of the Secured Obligations, including all court costs and the fees and expenses of its agents and legal counsel, the repayment of all advances made by the Administrative Agent as secured party hereunder or under any other Credit Document on behalf of any Credit Party and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Credit Document;

SECOND, to the payment of all accrued interest constituting part of the Secured Obligations (the amounts so applied to be distributed ratably among the Secured Parties in accordance with the amounts of the Secured Obligations owed to them on the date of any such distribution);

THIRD, to the payment of any then due and owing principal constituting part of the Secured Obligations (the amounts so applied to be distributed ratably among the Secured Parties in accordance with the principal amounts of the Secured Obligations owed to them on the date of any such distribution);

FOURTH, to the payment of any then due and owing other amounts (including fees and expenses) constituting part of the Secured Obligations, the amounts so applied to be distributed ratably among the Secured Parties in accordance with such amounts owed to them on the date of any such distribution; and

FIFTH, to the Credit Parties, their successors or assigns, or as a court of competent jurisdiction may otherwise direct.

ARTICLE 8

THE ADMINISTRATIVE AGENT

Section 8.1 Appointment, Powers, and Immunities. Each Lender hereby irrevocably appoints and authorizes the Administrative Agent to act as its agent under this Agreement and the other Credit Documents with such powers and discretion as are specifically delegated to the Administrative Agent by the terms of this Agreement and the other Credit Documents, together with such other powers as are reasonably incidental thereto. The Administrative Agent (which term as used in this sentence and in Section 8.5 and the first sentence of Section 8.6 shall include its Affiliates and its own and its Affiliates’ officers, directors, employees, and agents): (a) shall not have any duties or responsibilities except those expressly set forth in this Agreement and shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible to the Lenders for any recital, statement, representation, or warranty (whether written or oral) made in or in connection with any Credit Document or any certificate or other document referred to or provided for in, or received by any of them under, any Credit Document, or for the value, validity, effectiveness, genuineness, enforceability, or sufficiency of any Credit Document, or any other document referred to or provided for therein or for any failure by any Credit Party or any other Person to perform any of its obligations thereunder; (c) shall not be responsible for or have any duty to ascertain, inquire into, or verify the performance or observance of any covenants or agreements by any Credit Party or the satisfaction of any condition or to inspect the Property (including the books and records) of any Credit Party or any of its Restricted Subsidiaries or Affiliates; (d) shall not be required to initiate or conduct any litigation or collection proceedings under any Credit Document unless requested by the Majority Lenders in writing and it receives indemnification satisfactory to it from the Lenders; and (e) shall not be responsible for any action taken or omitted to be taken by it under or in connection with any Credit Document, except for its own gross negligence or willful misconduct. The Administrative Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by the Administrative Agent with reasonable care.

 

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Section 8.2 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon any certification, notice, instrument, writing, or other communication (including, without limitation, any thereof by telephone or telecopy) believed by it to be genuine and correct and to have been signed, sent or made by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel (including counsel for any Credit Party), independent accountants, and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of any Notes as the holder thereof for all purposes hereof unless and until the Administrative Agent receives and accepts an Assignment and Acceptance executed in accordance with Section 9.7. As to any matters not expressly provided for by this Agreement, the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Lenders, and such instructions shall be binding on all of the Lenders; provided, however, that the Administrative Agent shall not be required to take any action that exposes the Administrative Agent to personal liability or that is contrary to any Credit Document or applicable law or unless it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking any such action.

Section 8.3 Defaults. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of a Default or Event of Default unless the Administrative Agent has received written notice from a Lender or the Borrower specifying such Default or Event of Default and stating that such notice is a “Notice of Default”. In the event that the Administrative Agent receives such a notice of the occurrence of a Default or Event of Default, the Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall (subject to Section 8.2) take such action with respect to such Default or Event of Default as shall reasonably be directed by the Majority Lenders, 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 or Event of Default as it shall deem advisable in the best interest of the Lenders.

Section 8.4 Rights as Lender. With respect to its Commitments and the Advances made by it, ▇▇▇▇▇ Fargo (and any successor acting as Administrative Agent) in its capacity as a Lender hereunder shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not acting as the Administrative Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity. ▇▇▇▇▇ Fargo (and any successor acting as Administrative Agent) and its Affiliates may (without having to account therefor to any Lender) accept deposits from, lend money to, make investments in, provide services to, and generally engage in any kind of lending, trust, or other business with any Credit Party or any of its Restricted Subsidiaries or Affiliates as if it were not acting as Administrative Agent, and ▇▇▇▇▇ Fargo (and any successor acting as Administrative Agent) and its Affiliates may accept fees and other consideration from any Credit Party or any of its Restricted Subsidiaries or Affiliates for services in connection with this Agreement or otherwise without having to account for the same to the Lenders.

Section 8.5 Indemnification.

(a) THE LENDERS SEVERALLY AGREE TO INDEMNIFY THE ADMINISTRATIVE AGENT AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS (TO THE EXTENT NOT REIMBURSED BY THE BORROWER), RATABLY ACCORDING TO THE RESPECTIVE PRINCIPAL AMOUNTS OF THE ADVANCES THEN HELD BY EACH OF THEM (OR IF NO PRINCIPAL OF THE ADVANCES IS AT THE TIME OUTSTANDING, RATABLY ACCORDING TO THE RESPECTIVE COMMITMENTS HELD BY EACH OF THEM IMMEDIATELY PRIOR TO THE TERMINATION, EXPIRATION OR FULL REDUCTION OF EACH SUCH

 

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COMMITMENT), FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE ADMINISTRATIVE AGENT IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT (IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OR ARISING FROM ANY STRICT LIABILITY OF THE ADMINISTRATIVE AGENT), AND INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES, PROVIDED THAT NO LENDER SHALL BE LIABLE FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS RESULTING FROM THE ADMINISTRATIVE AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO REIMBURSE THE ADMINISTRATIVE AGENT PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE (DETERMINED AS SET FORTH ABOVE IN THIS PARAGRAPH) OF ANY OUT-OF-POCKET EXPENSES (INCLUDING COUNSEL FEES) INCURRED BY THE ADMINISTRATIVE AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT, OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, TO THE EXTENT THAT THE ADMINISTRATIVE AGENT IS NOT REIMBURSED FOR SUCH BY THE BORROWER.

(b) THE LENDERS SEVERALLY AGREE TO INDEMNIFY THE ISSUING LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS (TO THE EXTENT NOT REIMBURSED BY THE BORROWER), RATABLY ACCORDING TO THE RESPECTIVE PRINCIPAL AMOUNTS OF THE REVOLVING ADVANCES THEN HELD BY EACH OF THEM (OR IF NO PRINCIPAL OF THE REVOLVING ADVANCES IS AT THE TIME OUTSTANDING, RATABLY ACCORDING TO THE RESPECTIVE AMOUNTS OF THE COMMITMENTS THEN HELD BY EACH OF THEM, OR, IF NO SUCH PRINCIPAL AMOUNTS ARE THEN OUTSTANDING AND NO COMMITMENTS ARE THEN EXISTING, RATABLY ACCORDING TO THE COMMITMENTS HELD BY EACH OF THEM IMMEDIATELY PRIOR TO THE TERMINATION OR EXPIRATION THEREOF), FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE ISSUING LENDER IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY THE ISSUING LENDER UNDER THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT (IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OR ARISING FROM ANY STRICT LIABILITY OF THE ISSUING LENDER), AND INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES, PROVIDED THAT NO LENDER SHALL BE LIABLE FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS RESULTING FROM THE ISSUING LENDER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO REIMBURSE THE ISSUING LENDER PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE (DETERMINED AS SET FORTH ABOVE IN THIS PARAGRAPH) OF ANY OUT-OF-POCKET EXPENSES (INCLUDING COUNSEL FEES) INCURRED BY THE ISSUING LENDER IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT, OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, TO THE EXTENT THAT THE ISSUING LENDER IS NOT REIMBURSED FOR SUCH BY THE BORROWER.

 

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Section 8.6 Non-Reliance on Administrative Agent and Other Lenders. Each Lender agrees that it has, independently and without reliance on the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Borrower and the other Credit Parties and decision to enter into this Agreement and 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 deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under the Credit Documents. Except for notices, reports, and other documents and information expressly required to be furnished to the Lenders by the Administrative Agent hereunder and for other information in the Administrative Agent’s possession which has been requested by a Lender and for which such Lender pays the Administrative Agent’s expenses in connection therewith, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition, or business of any Credit Party or any of its Restricted Subsidiaries or Affiliates that may come into the possession of the Administrative Agent or any of its Affiliates.

Section 8.7 Resignation of Administrative Agent and Issuing Lender. The Administrative Agent or the Issuing Lender may resign at any time by giving written notice thereof to the Lenders and the Borrower. Upon receipt of notice of any such resignation, the Majority Lenders shall have the right to appoint a successor Administrative Agent or Issuing Lender with, so long as no Event of Default has occurred and is continuing, the consent of the Borrower, which consent shall not be unreasonably withheld. If no successor Administrative Agent or Issuing Lender shall have been so appointed by the Majority Lenders with the consent of the Borrower, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent’s or Issuing Lender’s giving of notice of resignation, then the retiring Administrative Agent or Issuing Lender may, on behalf of the Lenders and the Borrower, appoint a successor Administrative Agent or Issuing Lender, which shall be, in the case of a successor agent, a commercial bank organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $250,000,000 and, in the case of the Issuing Lender, a Lender; provided that, if the Administrative Agent or Issuing Lender shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent or Issuing Lender shall be discharged from its duties and obligations hereunder and under the other Credit Documents (except that (A) in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the Issuing Lender under any of the Credit Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed and (B) the retiring Issuing Lender shall remain the Issuing Lender with respect to any Letters of Credit outstanding on the effective date of its resignation or removal and the provisions affecting the Issuing Lender with respect to such Letters of Credit shall inure to the benefit of the retiring Issuing Lender until the termination of all such Letters of Credit) and (2) all payments, communications and determinations provided to be made by, to or through the retiring Administrative Agent shall instead be made by or to each Lender and the Issuing Lender directly, until such time as the Majority Lenders appoint a successor Administrative Agent or Issuing Lender, as applicable, as provided for above in this paragraph. Upon the acceptance of any appointment as Administrative Agent or Issuing Lender by a successor Administrative Agent or Issuing Lender, such successor Administrative Agent or Issuing Lender shall thereupon succeed to and become vested with all the rights, powers, privileges, and duties of the retiring Administrative Agent or Issuing Lender, and the retiring Administrative Agent or Issuing Lender shall be discharged from its duties and obligations under this Agreement and the other Credit Documents, except that the retiring Issuing Lender shall remain the Issuing Lender with respect to any Letters of Credit outstanding on the effective date of its resignation or

 

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removal and the provisions affecting the Issuing Lender with respect to such Letters of Credit shall inure to the benefit of the retiring Issuing Lender until the termination of all such Letters of Credit. After any retiring Administrative Agent’s or Issuing Lender’s resignation as Administrative Agent or Issuing Lender, the provisions of this Article 8 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent or Issuing Lender under this Agreement and the other Credit Documents.

Section 8.8 Collateral Matters.

(a) The Administrative Agent is authorized on behalf of the Secured Parties, without the necessity of any notice to or further consent from such Secured Parties, from time to time, to take any actions with respect to any Collateral or Security Documents which may be necessary to perfect and maintain the Liens upon the Collateral granted pursuant to the Security Documents. The Administrative Agent is further authorized (but not obligated) on behalf of the Secured Parties, without the necessity of any notice to or further consent from the Secured Parties, from time to time, to take any action in exigent circumstances as may be reasonably necessary to preserve any rights or privileges of the Secured Parties under the Credit Documents or applicable Legal Requirements. By accepting the benefit of the Liens granted pursuant to the Security Documents, each Secured Party hereby agrees to the terms of this paragraph (a).

(b) The Lenders hereby, and any other Secured Party by accepting the benefit of the Liens granted pursuant to the Security Documents, irrevocably authorize the Administrative Agent to (i) release any Lien granted to or held by the Administrative Agent upon any Collateral (a) upon termination of this Agreement, termination of all Hedging Agreements with such Persons (other than Hedging Agreements as to which arrangements satisfactory to the applicable counterparty in its sole discretion have been made), termination of all Letters of Credit (other than Letters of Credit as to which arrangements satisfactory to the Issuing Lender in its sole discretion have been made), and the payment in full of all outstanding Advances, Letter of Credit Obligations and all other Secured Obligations (other than indemnification obligations which survive termination of the Existing Credit Agreement and which are not yet due and payable) payable under this Agreement and under any other Credit Document; (b) constituting Property sold or to be sold or disposed of as part of or in connection with any disposition permitted under this Agreement or any other Credit Document; (c) constituting Property in which no Credit Party owned an interest at the time the Lien was granted or at any time thereafter; or (d) constituting Property leased to any Credit Party under a lease which has expired or has been terminated in a transaction permitted under this Agreement or is about to expire and which has not been, and is not intended by such Credit Party to be, renewed or extended; and (ii) release a Guarantor from its obligations under a Guaranty and any other applicable Credit Document if such Person ceases to be a Restricted Subsidiary as a result of a transaction permitted under this Agreement. Upon the request of the Administrative Agent at any time, the Secured Parties will confirm in writing the Administrative Agent’s authority to release particular types or items of Collateral pursuant to this Section 8.8.

(c) Notwithstanding anything contained in any of the Credit Documents to the contrary, the Credit Parties, the Administrative Agent, and each Secured Party hereby agree that no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce the Guaranties, it being understood and agreed that all powers, rights and remedies hereunder and under the Security Documents may be exercised solely by Administrative Agent on behalf of the Secured Parties in accordance with the terms hereof and the other Credit Documents. By accepting the benefit of the Liens granted pursuant to the Security Documents, each Secured Party not party hereto hereby agrees to the terms of this paragraph (c).

Section 8.9 No Other Duties, etc. Anything herein to the contrary notwithstanding, none of the Joint Bookrunners, Joint Lead Arrangers, Co-Syndication Agents or Co-Documentation Agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Credit Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or an Issuing Lender hereunder.

 

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ARTICLE 9

MISCELLANEOUS

Section 9.1 Costs and Expenses. The Borrower agrees to pay on demand:

(a) all reasonable and documented out-of-pocket costs and expenses of Administrative Agent (but not of other Lenders) in connection with the preparation, execution, delivery, administration, modification, and amendment of this Agreement, the Notes, and the other Credit Documents including costs associated with field audits, appraisals subject to Section 5.13, and the reasonable and documented fees and out-of-pocket expenses of outside counsel for Administrative Agent (but not of other Lenders), with respect to advising the Administrative Agent as to its rights and responsibilities under this Agreement, and

(b) all documented out-of-pocket costs and expenses, if any, of the Administrative Agent and each Lender (including outside counsel fees and expenses of each Lender) in connection with the enforcement (whether through negotiations, legal proceedings, or otherwise) of this Agreement, the Notes, and the other Credit Documents.

Section 9.2 Indemnification; Waiver of Damages.

(A) INDEMNIFICATION. EACH CREDIT PARTY HERETO AGREES TO, JOINTLY AND SEVERALLY, INDEMNIFY AND HOLD HARMLESS THE ADMINISTRATIVE AGENT, THE ISSUING LENDER AND EACH LENDER AND EACH OF THEIR AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, AND ADVISORS (EACH, AN “INDEMNITEE”) FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES, LIABILITIES, COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE AND DOCUMENTED ATTORNEYS’ FEES) THAT MAY BE INCURRED BY OR ASSERTED OR AWARDED AGAINST ANY INDEMNITEE, IN EACH CASE ARISING OUT OF OR IN CONNECTION WITH OR BY REASON OF (INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH ANY INVESTIGATION, LITIGATION, OR PROCEEDING OR PREPARATION OF DEFENSE IN CONNECTION THEREWITH) THE CREDIT DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE ADVANCES, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OR ARISING FROM ANY STRICT LIABILITY OF THE APPLICABLE INDEMNITEE, EXCEPT TO THE EXTENT SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE IS (I) FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH INDEMNITEE’S GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR MATERIAL BREACH OF THE OBLIGATIONS OF SUCH INDEMNITEE UNDER THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AS DETERMINED BY A COURT OF COMPETENT JURISDICTION IN A FINAL NON-APPEALABLE JUDGMENT OR (II) ARISES OUT OF OR IS IN CONNECTION WITH ANY CLAIM, LITIGATION, LOSS OR PROCEEDING NOT INVOLVING AN ACT OR OMISSION OF A CREDIT PARTY OR AN AFFILIATE OF A CREDIT PARTY AND THAT IS BROUGHT BY ANY INDEMNITEE AGAINST ANOTHER INDEMNITEE (OTHER THAN AGAINST THE ADMINISTRATIVE AGENT IN ITS CAPACITY AS SUCH). IN THE CASE OF AN

 

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INVESTIGATION, LITIGATION OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 9.2 APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY ANY CREDIT PARTY, ITS DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNITEE OR ANY OTHER PERSON OR ANY INDEMNITEE IS OTHERWISE A PARTY THERETO. THE FOREGOING INDEMNITY AND HOLD HARMLESS PROVISIONS SHALL NOT APPLY TO ANY CLAIMS, DAMAGES, LOSSES, LIABILITIES, COSTS OR EXPENSES THAT IS INCURRED BY OR ASSERTED OR AWARDED AGAINST ANY INDEMNITEE DIRECTLY FOR, OR AS A DIRECT CONSEQUENCE OF, SUCH INDEMNITEE BEING A DEFAULTING LENDER UNDER CLAUSE (A) OR (B) OF THE DEFINITION OF “DEFAULTING LENDER”, WHETHER ASSERTED BY ANY CREDIT PARTY, THE ADMINISTRATIVE AGENT, THE SWING LINE LENDER OR THE ISSUING LENDER. No Credit Party shall, without the prior written consent of each Indemnitee affected thereby (which consent will not be unreasonably withheld), settle any threatened or pending claim or action that would give rise to the right of any Indemnitee to claim indemnification hereunder unless such settlement (x) includes a full and unconditional release of all liabilities arising out of such claim or action against such Indemnitee and (y) does not include any statement as to or an admission of fault, culpability or failure to act by or on behalf of any Indemnitee.

(b) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, no Credit Party shall assert, agrees not to assert, and hereby waives, any claim against any Indemnitee on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Credit Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Advance or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in subsection (a) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

(c) Payments. All payments required to be made under this Section 9.2 shall be made within 10 days of demand therefor.

(d) Survival. Without prejudice to the survival of any other agreement of the Credit Parties hereunder, the agreements and obligations of the Credit Parties contained in this Section 9.2 shall survive the termination of this Agreement, the termination of all Commitments, and the payment in full of the Advances and all other amounts payable under this Agreement.

Section 9.3 Waivers and Amendments. No amendment or waiver of any provision of this Agreement, the Notes, or any other Credit Document (other than the Fee Letters), nor consent to any departure by the Borrower or any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Majority Lenders and the Borrower, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that:

(a) no amendment, waiver, or consent shall, unless in writing and signed by all the Lenders and the Borrower, do any of the following: (i) waive any of the conditions specified in Section 3.1 or Section 3.2, (ii) reduce the principal or interest amounts payable hereunder or under any other Credit Document, (iii) reduce any fees or other amounts payable hereunder or under any other Credit Document; (iv) postpone or extend any

 

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date fixed for any payment of any fees or other amounts payable hereunder, (v) increase the aggregate Commitments (except pursuant to Section 2.15), (vi) amend Section 2.11(e), Section 7.6, this Section 9.3 or any other provision in any Credit Document which expressly requires the consent of, or action or waiver by, all of the Lenders, (vii) release all or substantially all of the Guarantors from their respective obligations under any Guaranty except as specifically provided in the Credit Documents, (viii) release all or substantially all of the Collateral except as permitted under Section 8.8, or (ix) amend the definition of “Maximum Exposure Amount”;

(b) no amendment, waiver, or consent shall, unless in writing and signed by each Lender directly and adversely affected thereby, reduce such Lender’s voting percentage;

(c) no Commitment of a Lender or any obligations of a Lender may be increased without such Lender’s written consent;

(d) no amendment, waiver, or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Administrative Agent under this Agreement or any other Credit Document;

(e) no amendment, waiver or consent shall, unless in writing and signed by an Issuing Lender in addition to the Lenders required above to take such action, affect the rights or duties of such Issuing Lender under this Agreement or any other Credit Document; and

(f) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above to take such action, affect the rights or duties of the Swing Line Lender under this Agreement or any other Credit Document.

Section 9.4 Severability. In case one or more provisions of this Agreement or the other Credit Documents shall be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality, and enforceability of the remaining provisions contained herein or therein shall not be affected or impaired thereby.

Section 9.5 Survival of Representations and Obligations. All representations and warranties contained in this Agreement or made in writing by or on behalf of the Credit Parties in connection herewith shall survive the execution and delivery of this Agreement and the other Credit Documents, the making of the Advances or the issuance of any Letters of Credit and any investigation made by or on behalf of the Lenders, none of which investigations shall diminish any Lender’s right to rely on such representations and warranties. All obligations of the Borrower or any other Credit Party provided for in Sections 2.9, 2.10, 2.12(c), 9.1 and 9.2 and all of the obligations of the Lenders in Section 8.5 shall survive any termination of this Agreement and repayment in full of the Obligations.

Section 9.6 Binding Effect. This Agreement shall become effective when it shall have been executed by the Borrower and the Administrative Agent, and when the Administrative Agent shall have, as to each Lender, either received a counterpart hereof executed by such Lender or been notified by such Lender that such Lender has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the Administrative Agent, and each Lender and their respective successors and assigns, except that neither the Borrower nor any other Credit Party shall have the right to assign its rights or delegate its duties under this Agreement or any interest in this Agreement without the prior written consent of each Lender.

 

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Section 9.7 Lender Assignments and Participations.

(a) Each Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Advances, its Notes, and its Commitments); provided, however, that (i) each such assignment shall be to an Eligible Assignee; (ii) except in the case of an assignment to another Lender or an assignment of all of a Lender’s rights and obligations under this Agreement, any such partial assignment shall be in an amount at least equal to $5,000,000 unless the Administrative Agent and, so long as no Default or Event of Default has occurred and is continuing, the Borrower otherwise consents to a lower amount (each such consent not to be unreasonably withheld or delayed); provided that the Borrower shall be deemed to have consented to such lower amount unless it shall have objected thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof; (iii) each assignment of a Lender’s rights and obligations with respect to Advances and its Commitments shall be of a constant, and not varying, percentage of all of its rights and obligations under this Agreement as a Lender and the Notes (other than rights of reimbursement and indemnity arising before the effective date of such assignment) and shall be of an equal pro rata share of the Assignor’s interest in the Revolving Advances and its Commitment; and (iv) the parties to such assignment shall execute and deliver to the Administrative Agent for its acceptance an Assignment and Acceptance, together with any Notes subject to such assignment and the assignor or assignee Lender shall pay a processing fee of $3,500; provided that such processing fee shall not be required for the initial assignments made by ▇▇▇▇▇ Fargo as a Lender in connection with the initial syndication of its Commitments hereunder and such processing fee may be waived at the sole discretion of the Administrative Agent. Upon execution, delivery, and acceptance of such Assignment and Acceptance and payment of the processing fee, the assignee thereunder shall be a party hereto and, to the extent of such assignment, have the obligations, rights, and benefits of a Lender hereunder and the assigning Lender shall, to the extent of such assignment, relinquish its rights and be released from its obligations under this Agreement. Upon the consummation of any assignment pursuant to this Section 9.7, the assignor, the Administrative Agent and the Borrower shall make appropriate arrangements so that, if required, new Notes are issued to the assignor and the assignee. If the assignee is not incorporated under the laws of the United States of America or a state thereof, it shall deliver to the Borrower and the Administrative Agent certification as to exemption from deduction or withholding of Taxes in accordance with Section 2.12(e).

(b) The Administrative Agent shall maintain at its address referred to in Section 9.9 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitments of, and principal amount of the Advances owing to, each Lender from time to time (the “Register”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Credit Parties, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.

(c) Upon its receipt of an Assignment and Acceptance executed by the parties thereto, together with any Notes subject to such assignment and payment of the processing fee, the Administrative Agent shall, if such Assignment and Acceptance has been completed, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register, and (iii) give prompt notice thereof to the parties thereto.

(d) Each Lender may sell participations to one or more Persons in all or a portion of its rights, obligations or rights and obligations under this Agreement (including all or a portion of its Commitments or its Advances) provided, however, that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the participant shall be entitled to the benefit of the yield protection provisions contained in Sections 2.9 and 2.10 and the right of set-off contained in Section 7.4, provided, that (A) such participant shall not be entitled to receive any greater payment under Sections 2.9, 2.10 or 7.4 than such Lender would have been entitled to receive with respect to the participation sold to such participant, and (B) a participant that would be a foreign lender as specified in Section 2.12(e) if it were a Lender shall not be entitled to the benefits of Section 2.10 unless such

 

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participant provided the selling Lender with the tax forms required to be provided in Section 2.12(e) as though it were a Lender and (iv) the Borrower shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and such Lender shall retain the sole right to enforce the obligations of the Borrower relating to its Advances and its Notes and to approve any amendment, modification, or waiver of any provision of this Agreement (other than amendments, modifications, or waivers decreasing the amount of principal of or the rate at which interest is payable on such Advances or Notes, extending any scheduled principal payment date or date fixed for the payment of interest on such Advances or Notes, or extending its Commitment).

(e) Notwithstanding any other provision set forth in this Agreement, any Lender may at any time assign and pledge all or any portion of its Advances and its Notes to any Federal Reserve Bank as collateral security pursuant to Regulation A and any Operating Circular issued by such Federal Reserve Bank. No such assignment shall release the assigning Lender from its obligations hereunder.

(f) Any Lender may furnish any information concerning the Borrower or any of its Restricted Subsidiaries in the possession of such Lender from time to time to assignees and participants (including prospective assignees and participants), subject, however, to the provisions of the following paragraph Section 9.8.

Section 9.8 Confidentiality. The Administrative Agent, the Swing Line Lender, each Issuing Lender, and each Lender (each a “Lending Party”) agree to keep confidential any information furnished or made available to it by any Credit Party pursuant to this Agreement unless such information (a) has been identified by such Credit Party as non-confidential, or (b) such information is available to the Administrative Agent, Swingline Lender, Issuing Lender or Lender on a nonconfidential basis prior to disclosure by the applicable Credit Party ; provided that nothing herein shall prevent any Lending Party from disclosing such information (i) to any other Lending Party or any Affiliate of any Lending Party, or any officer, director, employee, agent, or advisor of any Lending Party or Affiliate of any Lending Party for purposes of administering, negotiating, considering, processing, implementing, syndicating, assigning, or evaluating the credit facilities provided herein and the transactions contemplated hereby (and any other Person if directly incidental to the administration of the credit facilities provided herein), in each which has been advised of the confidential nature thereof, (ii) as required by any Legal Requirement, (iii) upon the order of any court or administrative agency, (iv) upon the request or demand of any regulatory agency or authority, (v) that is or becomes available to the public or that is or becomes available to any Lending Party other than as a result of a disclosure by any other Lending Party prohibited by this Agreement, (vi) in connection with any litigation relating to this Agreement or any other Credit Document to which such Lending Party or any of its Affiliates may be a party, (vii) to the extent necessary in connection with the exercise of any right or remedy under this Agreement or any other Credit Document, and (viii) to any actual or proposed participant or assignee, in each case, subject to provisions similar to those contained in this Section 9.8. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, nothing in this Agreement shall (A) restrict any Lending Party from providing information to any bank or other regulatory or governmental authorities, including the Federal Reserve Board and its supervisory staff; (B) require or permit any Lending Party to disclose to any Credit Party that any information will be or was provided to the Federal Reserve Board or any of its supervisory staff; or (C) require or permit any Lending Party to inform any Credit Party of a current or upcoming Federal Reserve Board examination or any nonpublic Federal Reserve Board supervisory initiative or action.

Section 9.9 Notices, Etc. All notices and other communications (other than Notices of Borrowing and Notices of Continuation or Conversion, which are governed by Article 2 of this Agreement) shall be in writing and hand delivered with written receipt, telecopied, sent by facsimile (with a hard copy sent as otherwise permitted in this Section 9.9), sent by a nationally recognized

 

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overnight courier, or sent by certified mail, return receipt requested as follows: if to a Credit Party, as specified on Schedule II, if to the Swing Line Lender, the Administrative Agent or the Issuing Lender, at its credit contact specified under its name on Schedule II, and if to any Lender at its credit contact specified in its Administrative Questionnaire. Each party may change its notice address by written notification to the other parties. All such notices and communications shall be effective when delivered, except that notices and communications to any Lender, the Swing Line Lender or the Issuing Lender pursuant to Article 2 shall not be effective until received and, in the case of telecopy, such receipt is confirmed by the Swing Line Lender, such Lender or Issuing Lender, as applicable, verbally or in writing.

Section 9.10 Usury Not Intended. It is the intent of each Credit Party and each Lender in the execution and performance of this Agreement and the other Credit Documents to contract in strict compliance with applicable usury laws, including conflicts of law concepts, governing the Advances of each Lender including such applicable laws of the State of New York, if any, and the United States of America from time to time in effect. In furtherance thereof, the Lenders and the Credit Parties stipulate and agree that none of the terms and provisions contained in this Agreement or the other Credit Documents shall ever be construed to create a contract to pay, as consideration for the use, forbearance or detention of money, interest at a rate in excess of the Maximum Rate and that for purposes of this Agreement “interest” shall include the aggregate of all charges which constitute interest under such laws that are contracted for, charged or received under this Agreement; and in the event that, notwithstanding the foregoing, under any circumstances the aggregate amounts taken, reserved, charged, received or paid on the Advances, include amounts which by applicable law are deemed interest which would exceed the Maximum 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 Notes (or if such Notes shall have been paid in full, refund said excess to the Borrower). In the event that the maturity of the Notes 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 Maximum 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 applicable Notes (or, if the applicable Notes shall have been paid in full, refunded to the Borrower of such interest). In determining whether or not the interest paid or payable under any specific contingencies exceeds the Maximum Rate, the Credit Parties and the Lenders shall to the maximum extent permitted under applicable law amortize, prorate, allocate and spread in equal parts during the period of the full stated term of the Notes all amounts considered to be interest under applicable law at any time contracted for, charged, received or reserved in connection with the Obligations. The provisions of this Section shall control over all other provisions of this Agreement or the other Credit Documents which may be in apparent conflict herewith.

Section 9.11 Usury Recapture. In the event the rate of interest chargeable under this Agreement at any time is greater than the Maximum Rate, the unpaid principal amount of the Advances shall bear interest at the Maximum Rate until the total amount of interest paid or accrued on the Advances equals the amount of interest which would have been paid or accrued on the Advances if the stated rates of interest set forth in this Agreement had at all times been in effect. In the event, upon payment in full of the Advances, the total amount of interest paid or accrued under the terms of this Agreement and the Advances is less than the total amount of interest which would have been paid or accrued if the rates of interest set forth in this Agreement had, at all times, been in effect, then the Borrower shall, to the extent permitted by applicable law, pay the Administrative Agent for the account of the Lenders an amount equal to the difference between (i) the lesser of (A) the amount of interest which would have been charged on its Advances if the Maximum Rate had, at all times, been in effect and (B) the amount of interest which would have accrued on its Advances if the rates of interest set forth in this Agreement had at all times been in effect and (ii) the amount of interest actually paid under this

 

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Agreement on its Advances. In the event the Lenders ever receive, collect or apply as interest any sum in excess of the Maximum Rate, such excess amount shall, to the extent permitted by law, be applied to the reduction of the principal balance of the Advances, and if no such principal is then outstanding, such excess or part thereof remaining shall be paid to the Borrower.

Section 9.12 Governing Law; Service of Process. This Agreement, the Notes and the other Credit Documents (unless otherwise expressly provided therein) shall be deemed a contract under, and shall be governed by, and construed and enforced in accordance with, the laws of the State of New York without regard to conflicts of laws principles (other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York). Each Letter of Credit shall be governed by either (i) the Uniform Customs and Practice for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600, or (ii) the International Standby Practices (ISP98), International Chamber of Commerce Publication No. 590, in either case, including any subsequent revisions thereof approved by a Congress of the International Chamber of Commerce and adhered to by the Issuing Lender. The Borrower hereby agrees that service of copies of the summons and complaint and any other process which may be served in any such action or proceeding may be made by mailing or delivering a copy of such process to the Borrower at the address set forth for the Borrower in this Agreement. Nothing in this Section shall affect the rights of any Lender to serve legal process in any other manner permitted by the law or affect the right of any Lender to bring any action or proceeding against the Borrower or its Property in the courts of any other jurisdiction.

Section 9.13 Submission to Jurisdiction. The parties hereto hereby agree that any suit or proceeding arising in respect of this Agreement or any other Credit Document, or any of the matters contemplated hereby or thereby will be tried exclusively in the U.S. District Court for the Southern District of New York or, if such court does not have subject matter jurisdiction, in any state court located in the City and County of New York, and the parties hereto hereby agree to submit to the exclusive jurisdiction of, and venue in, such court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law. The parties hereto hereby agree that service of any process, summons, notice or document by registered mail addressed to the applicable parties will be effective service of process against such party for any action or proceeding relating to any such dispute. Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable Legal Requirement, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement in any court referred to in this Section 9.13. Each of the parties hereto hereby agrees that Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York shall apply to this Agreement and irrevocably waives, to the fullest extent permitted by applicable Legal Requirement, the defense of any inconvenient forum to the maintenance of such action or proceeding in any such court.

Section 9.14 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

Section 9.15 Waiver of Jury. THE BORROWER, THE LENDERS, THE ISSUING LENDER, AND THE ADMINISTRATIVE AGENT HEREBY ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED BY AND HAVE CONSULTED WITH COUNSEL OF THEIR CHOICE, AND HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

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Section 9.16 [Reserved].

Section 9.17 USA Patriot Act. Each Lender that is subject to the Patriot Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies each Credit Party that pursuant to the requirements of the Patriot Act it is required to obtain, verify and record information that identifies such Credit Party, which information includes the name and address of such Credit Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify such Credit Party in accordance with the Patriot Act.

Section 9.18 Integration. THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS, AS DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND SUPERSEDE ALL PRIOR UNDERSTANDINGS AND AGREEMENTS, WHETHER WRITTEN OR ORAL, RELATING TO THE TRANSACTIONS PROVIDED FOR HEREIN AND THEREIN. ADDITIONALLY, THIS AGREEMENT AND THE CREDIT DOCUMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

IN EXECUTING THIS AGREEMENT, EACH CREDIT PARTY HERETO HEREBY WARRANTS AND REPRESENTS IT IS NOT RELYING ON ANY STATEMENT OR REPRESENTATION OTHER THAN THOSE IN THIS AGREEMENT AND IS RELYING UPON ITS OWN JUDGMENT AND ADVICE OF ITS ATTORNEYS.

[Remainder of this page intentionally left blank. Signature pages follow.]

 

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EXECUTED as of the date first above written.

 

 

Signature page to Credit Agreement

(▇▇▇▇▇▇▇▇ Corporation)

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Signature page to Credit Agreement

(▇▇▇▇▇▇▇▇ Corporation)

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Signature page to Credit Agreement

(▇▇▇▇▇▇▇▇ Corporation)

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Signature page to Credit Agreement

(▇▇▇▇▇▇▇▇ Corporation)

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Signature page to Credit Agreement

(▇▇▇▇▇▇▇▇ Corporation)

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Signature page to Credit Agreement

(▇▇▇▇▇▇▇▇ Corporation)

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SCHEDULE I

Pricing Schedule

The Applicable Margin with respect to Commitment Fee, Revolving Advances, and Swing Line Advances (if applicable), shall be determined in accordance with the following Table based on the Borrower’s Total Debt Leverage Ratio as reflected in the Compliance Certificate delivered in connection with the Financial Statements most recently delivered pursuant to Section 5.2. Adjustments, if any, to such Applicable Margin shall be effective on the date the Administrative Agent receives the applicable Financial Statements and corresponding Compliance Certificate as required by the terms of this Agreement. If the Borrower fails to deliver the Financial Statements and corresponding Compliance Certificate to the Administrative Agent at the time required pursuant to Section 5.2, then effective as of the date such Financial Statements and Compliance Certificate were required to the delivered pursuant to Section 5.2, the Applicable Margin with respect to Commitment Fee, Revolving Advances, and Swing Line Advances (if applicable) shall be determined at Level VI and shall remain at such level until the date such Financial Statements and corresponding Compliance Certificate are so delivered by the Borrower. Notwithstanding the foregoing, the Borrower shall be deemed to be at Level IV from the First Amendment Effective Date until delivery of its unaudited Financial Statements and corresponding Compliance Certificate for the fiscal quarter ending September 30, 2012. Notwithstanding anything to the contrary contained herein, the determination of the Applicable Margin for any period shall be subject to the provisions of Section 2.7(c). For the avoidance of doubt, the levels on the pricing grid set forth below are set forth from lowest (Level I) to the highest (Level VI).

 

Applicable Margin		Total Debt Leverage Ratio		Eurodollar Advances				Base Rate Advances				Commitment Fee
I		Less than or equal to 1.50			2.50	%			1.50	%			0.375	%
II		Greater than 1.50 but less than or equal to 2.00			2.75	%			1.75	%			0.375	%
III		Greater than 2.00 but less than or equal to 2.50			3.00	%			2.00	%			0.500	%
IV		Greater than 2.50 but less than or equal to 3.00			3.25	%			2.25	%			0.500	%
V		Greater than 3.00 but less than or equal to 3.50			3.50	%			2.50	%			0.500	%
VI		Greater than 3.50			3.75	%			2.75	%			0.500	%

 

Schedule I

Page 1 of 1

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SCHEDULE II

Commitments, Contact Information

ADMINISTRATIVE AGENT/ISSUING LENDER/SWING LINE LENDER

 

▇▇▇▇▇ Fargo Bank, National Association		Address:		▇▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
				Mail Code NC0680
				▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
		Attn:		Syndication/Agency Services
		Telephone:		(▇▇▇) ▇▇▇-▇▇▇▇
		Facsimile:		(▇▇▇) ▇▇▇-▇▇▇▇
		with a copy to:
		Address:		1000 Louisiana, ▇▇▇ ▇▇▇▇▇
				▇▇▇ ▇▇▇▇▇-▇▇▇
				▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
		Attn:		▇▇▇▇▇▇▇ ▇▇▇▇▇, Director
		Telephone:		(▇▇▇) ▇▇▇-▇▇▇▇
		Facsimile:		(▇▇▇) ▇▇▇-▇▇▇▇

CREDIT PARTIES

 

Borrower/Guarantors		Address:		▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
				▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
		Attn:		▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Executive Vice President
		Telephone:		(▇▇▇)▇▇▇-▇▇▇▇ ▇▇▇.▇▇▇
		Facsimile:		(▇▇▇)▇▇▇-▇▇▇▇
		Email:		▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
		with a copy to:
		Address:		▇▇▇▇ ▇▇▇▇▇ LLP
				▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
				▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
		Attn:		▇▇▇▇ ▇▇▇▇▇▇▇▇▇
		Telephone:		(▇▇▇)▇▇▇-▇▇▇▇
		Facsimile:		(▇▇▇)▇▇▇-▇▇▇▇
		Email:		▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
		and
		Attn:		▇▇▇ ▇▇▇▇▇▇▇▇
		Telephone:		(▇▇▇)▇▇▇-▇▇▇▇
		Facsimile:		(▇▇▇)▇▇▇-▇▇▇▇
		Email:		▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇

 

Schedule II

Page 1 of 1

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Lender		Commitment
▇▇▇▇▇ Fargo Bank, National Association		$	64,000,000
Bank of America, N.A.		$	52,000,000
Citizens Bank of Pennsylvania		$	52,000,000
Fifth Third Bank		$	52,000,000
U.S. Bank National Association		$	45,000,000
First National Bank of Pennsylvania		$	35,000,000
First Niagara Bank, N.A.		$	15,000,000
TriState Capital Bank		$	10,000,000
Total:		$	325,000,000

 

Schedule II

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Schedule III

Additional Conditions and Requirements for New Restricted Subsidiaries

Within 15 days of creating a new Restricted Subsidiary or acquiring a new Restricted Subsidiary (or such later date as approved by the Administrative Agent, which in no event may exceed 30 days after the creation or acquisition of such new Restricted Subsidiary), the Administrative Agent shall have received each of the following:

(a) Guaranty. A joinder and supplement to the Guaranty executed by such Restricted Subsidiary;

(b) Security Agreement. A joinder and supplement to the Security Agreement executed by such Restricted Subsidiary and, if such Restricted Subsidiary owns any Certificated Equipment, a Custodial Agreement executed by such new Restricted Subsidiary and the employees thereof that are serving as custodians thereunder,, in any event, together with stock certificates, stock powers executed in blank, UCC-1 financing statements, and any other documents, agreements, or instruments necessary to create and perfect an Acceptable Security Interest in the Collateral described in the Security Agreement, as so supplemented (other than Collateral the perfection of which is not required as per the express terms of the Security Agreement);

(c) Mortgages. If such Restricted Subsidiary owns any Real Property or Leasehold Property which constitutes Material Real Property, and if and as requested by the Administrative Agent, all documents required by Section 5.16 of the Credit Agreement;

(d) Pledges. A pledge agreement executed by the equity holders of such Restricted Subsidiary pledging 100% of the Equity Interest owned by such equity holder of such Restricted Subsidiary and such evidence of corporate, limited liability company or partnership authority to enter into such pledge agreement as the Administrative Agent may reasonably request, along with share certificates pledged thereby and appropriately executed stock powers in blank, if applicable;

(e) Real Estate. (i) If and as requested by the Administrative Agent, an Responsible Officer’s certificate from such new Restricted Subsidiary certifying a complete listing of all Real Property owned or leased by such new Restricted Subsidiary and including a notation as to all locations where any equipment of such new Restricted Subsidiary is kept, and (ii) if and as requested by the Administrative Agent, lien waivers or subordination agreements in the form of Exhibit I or otherwise in form and substance reasonably satisfactory to the Administrative Agent and executed by the landlords or lessors identified in, and covering each of Leasehold Properties listed on such officer’s certificate (but only to the extent such lien waivers or subordination agreements can be obtained using commercially reasonable efforts);

(f) Corporate Documents. A secretary’s certificate from such new Restricted Subsidiary certifying such Restricted Subsidiary’s (i) Responsible Officer’s incumbency, (ii) authorizing resolutions, (iii) organizational documents, (iv) necessary governmental approvals, and (v) certificate of good standing in such Restricted Subsidiary’s state of organization dated a date not earlier than 30 days prior to date of delivery or otherwise in effect on the date of delivery;

(g) Patriot Act. All documentation and other information that is required by regulatory authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the Patriot Act; and

 

Schedule III

Page 1 of 2

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(h) Opinion of Counsel. If requested by the Administrative Agent, an opinion of counsel in form and substance reasonably acceptable to the Administrative Agent related to such new Restricted Subsidiary and substantially similar to the legal opinion delivered at the Effective Date with respect to the other Restricted Subsidiaries in existence on the Effective Date.

 

Schedule III

Page 2 of 2

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Schedule IV

Post-Closing Material Real Property

(30-Day Mortgage Requirement)

I. Salt Water Disposal Well Sites

 

Credit Party

Address/Description

Owned/ Leased

Term of Lease

Estimated Fair Market  or Book Value

Equipment or Inventory at the Location (Yes/No)

▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.

“▇▇▇▇▇▇ #1 SWD”   ▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇   ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇

Leased

August 17, 2018

$

5,399,000

Y

▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.

“Grace #1 SWD”   ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇

Leased

April 30, 2018

$

4,649,000

Y

▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.

“Grace #2 SWD”   ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇

Leased

April 30, 2018

$

5,176,000

Y

▇▇▇▇▇▇▇▇ Water Resources Corporation

“▇▇▇▇ SWD”   ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇

Leased

No end date

$

4,461,000

Y

▇▇▇▇▇▇▇▇ Water Resources Corporation

“Strong SWD”   ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇

Leased

Year to year

$

3,712,000

Y

 

Schedule IV

Page 1 of 4

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Credit Party

Address/Description

Owned/ Leased

Term of Lease

Estimated Fair Market  or Book Value

Equipment or Inventory at the Location (Yes/No)

▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.

“▇▇▇▇▇▇▇ ‘A’ SWD”   15’ by 80’ Collection pit in Shelby County, Texas   ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇

Leased

March 29, 2016 (with a 10 year option to extend)

$

4,670,000

Y

▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.

“▇▇▇▇▇▇ #1 “ (inactive, going to be plugged and abandoned)   “Waste Disposal 2” (plugged and abandoned)   “Cypress Bend SWD #1” (being permitted)   5.489 Acre Tract in Parish of Assumption, Louisiana   ▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Owned

N/A

$

3,351,000

Y

▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.

“Alpha 1 & 2”   9.41 Acres in ▇▇▇▇▇▇▇▇ County, Texas   ▇▇▇▇ ▇▇ ▇▇▇. ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇

Leased

No end date

$

5,000,000

Y

▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.

“▇▇▇▇▇▇▇▇ SWD #1” (not yet constructed)   5 Acres in Bee County, Texas   ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇

Leased

February 14, 2026

$

100,000

N

 

Schedule IV

Page 2 of 4

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Credit Party

Address/Description

Owned/ Leased

Term of Lease

Estimated Fair Market  or Book Value

Equipment or Inventory at the Location (Yes/No)

▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.

“MissLou SWD #1 and MissLou SWD #2” (under construction)   12.95 acres in Amite County, Mississippi   ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Owned

N/A

$

51,600

N

II. Pipeline

N/A

III. Office Space

 

Credit Party

Address/Description

Owned/ Leased

Term of Lease

Estimated Fair Market  or Book Value

Equipment or Inventory at the Location (Y/N)

▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.

“Frierson”   9.182 Acre Tract in Parish of Desoto, Louisiana   ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Office, Yard and Shop)

Owned

N/A

$

2,000,000

Y

 

Schedule IV

Page 3 of 4

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IV. Other Locations

 

Credit Party

Address/Description

Owned/ Leased

Term of Lease

Estimated Fair Market or Book Value

Equipment or Inventory at the Location (Y/N)

▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.

“Bethlehem Transfer Station”   ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Transfer Station)

Owned

N/A

$

2,000,000

Y

V. Thermo Fluid Locations

 

Credit Party

Address/Description

Owned/ Leased

Term of Lease

Estimated Fair Market or Book Value

Equipment or Inventory at the Location (Y/N)

Thermo Fluids Inc.

▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇

Owned

N/A

$

2,241,327

Y

 

Schedule IV

Page 4 of 4

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Schedule 1.1

Letters of Credit

 

Letter of Credit Number

Beneficiary

Amount

Issue Date

Expiration Date

IS0010586

ComData Network, Inc.

$

350,000.00

03/27/2012

12/31/2012

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Schedule 3.1

Real Property

I. Salt Water Disposal Well Sites

 

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Catarina SWD #1 and Catarina SWD #2   Parcel of real estate located in Dimmit County, Texas (Lease dated January 7, 2011)   ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇   and   ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		2021 (with an option to extend for an additional 10 years)		$7,209,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Deadwood SWD”   13.116 Acre Tract in Panola County/▇▇▇▇▇▇▇ City, Texas   ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$3,773,000		Y

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Appleby SWD No. 1S”   3.729 Acre and 13.236 Acre Tracts in Nacogdoches County/▇▇▇▇▇▇▇ City, Texas   ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$4,679,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇▇▇▇▇▇ SWD” (awaiting final approval from court)   5.594 Acre Tract in Sabine County, Texas   ▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$675,000		N
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Panola #2 SWD”   5.00 Acre Tract in Panola County/Deadwood, Texas   ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$5,023,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Longbranch #5 SWD”   4.00 Acre Tract in Panola County/Deadwood, Texas   ▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$4,838,000		Y

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇▇▇ #1 SWD”   ▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇   ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		August 17, 2018		$5,399,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇▇ #1 SWD”   ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		June 12, 2017		$5,038,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇▇ #2 SWD” (plugged and abandoned)   ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		June 12, 2017		$0.00		N
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇▇ ▇▇▇▇▇ SWD”   2.85 Acre Tract in ▇▇▇▇ County, Texas   ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		August 13, 2021 (with an option to extend for 5 years)		$3,627,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Grace #1 SWD”   ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		April 30, 2018		$4,649,000		Y

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Grace #2 SWD”   ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		April 30, 2018		$5,176,000		Y
▇▇▇▇▇▇▇▇ Water Resources Corporation		“▇▇▇▇ SWD”   ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$4,461,000		Y
▇▇▇▇▇▇▇▇ Water Resources Corporation		“Strong SWD”   ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		Year to year		$3,712,000		Y
▇▇▇▇▇▇▇▇ Water Resources Corporation		“▇▇▇▇▇▇ SWD”   ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		Year to year		$3,394,000		Y
▇▇▇▇▇▇▇▇ Water Resources Corporation		“Hill SWD”   ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$3,577,000		Y
▇▇▇▇▇▇▇▇ Water Resources Corporation		“Harvco SWD #1”   ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$4,835,000		Y

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
▇▇▇▇▇▇▇▇ Water Resources Corporation		“Harvco SWD #2” (inactive well)   ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$3,260,000		N
▇▇▇▇▇▇▇▇ Water Resources Corporation		“Childress SWD #1 and Childress SWD #2” (Childress SWD #1 has been plugged and abandoned)   ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$3,493,000		Y
▇▇▇▇▇▇▇▇ Water Resources Corporation		“▇▇▇▇▇▇▇▇▇ SWD #3”   ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$4,440,000		Y
▇▇▇▇▇▇▇▇ Water Resources Corporation		“▇▇▇▇▇▇▇▇▇ SWD #2”   ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$4,555,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇▇▇▇ ‘A’ SWD”   15’ by 80’ Collection pit in Shelby County, Texas   ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		March 29, 2016 (with a 10 year option to extend)		$4,670,000		Y

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇ ▇▇▇ ▇▇▇▇▇ SWD” (not in service)   2.93 Acre Tract in Angelina County, Texas   ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		June 26, 2017		$5,613,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇▇▇ #1 “ (inactive, going to be plugged and abandoned)   “Waste Disposal 2” (plugged and abandoned)   “Cypress Bend SWD #1” (being permitted)   5.489 Acre Tract in Parish of Assumption, Louisiana   ▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$3,351,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Alpha 1 & 2”   9.41 Acres in ▇▇▇▇▇▇▇▇ County, Texas   ▇▇▇▇ ▇▇ ▇▇▇. ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$5,000,000		Y

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇▇▇▇▇ SWD #1” (not yet constructed)   5 Acres in Bee County, Texas   ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		February 14, 2026		$100,000		N
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Lamza SWD #1”   5 Acres in ▇▇▇▇▇▇ County, Texas   ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇. ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		April 14, 2026		$2,500,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“MissLou SWD #1 and MissLou SWD #2” (under construction)   12.95 acres in Amite County, Mississippi   ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$51,600		N
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Atascosa County SWD #1 (being permitted)   30 Acres in Atascosa County, Texas   ▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$0.00; value of land is listed elsewhere in this Schedule		N

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇ SWD” (due diligence phase)   5 Acres in Muskingum County, Ohio   ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇		Leased		99 years after the first month after the first day of injection of salt water into the SWD well		$0.00		N
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Complete Vacuum & Rental” (permitted, but no well)   173.92 Acre Tract in ▇▇▇▇ County, Texas   ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇		Owned		N/A		$0.00; value of land is elsewhere in this Schedule		N
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Harvco SWD #3” (not pursuing a permit at this time)   ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$0.00		N
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Harvco SWD #4” (not pursuing a permit at this time)   45.269 Acres in Shelby County, Texas		Leased		No end date		$0.00		N
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇▇▇▇” (plugged and abandoned)   ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased				$0.00		N

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇▇▇▇”   ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$850,000		N
Landtech Enterprises, LLC		“Landtech SWD #101” and the “▇▇▇▇ SWD #2”   Roosevelt County, State of Montana		Leased		April 1, 2031		$2,200,000		N
Landtech Enterprises, LLC		Dore Property   Township 24 North, Range 58 East, M.P.M. Section 9 being all of that portion of the E1/2 NW  1/4 lying east of the ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ of Montana.		Leased		August 31, 2017		$2,200,000		N
Landtech Enterprises, LLC		“Bloom SWD #1”   Mountrail County, North Dakota, to-wit: Township 155 North, Range 89W Section 5, SW 1/4 SE  1/4.		Leased		July 1, 2028		$2,200,000		N
Landtech Enterprises, LLC		“Rink # 1 and Rink #2”   Township 150 North, Range 96W ▇▇▇▇▇▇▇ ▇▇, ▇▇ ▇/▇ ▇▇  ▇/▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇.		Leased		99 year lease commencing on November 30, 2012		$4,400,000		N
Landtech Enterprises, LLC		“▇▇▇▇▇▇ #1 Well”   Township 142 North, Range 99W ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇.		Leased		November 1, 2027		$2,200,000		N

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
Landtech Enterprises, LLC		“▇▇▇▇▇ #23-A-2”   Township 157 North, Range 95W, ▇▇▇▇▇▇▇ ▇▇, ▇▇ ▇/▇ ▇▇  ▇/▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇.		Leased		July 1, 2027		$2,200,000		N
Landtech Enterprises, LLC		“▇▇▇▇▇ #1 SWD Well”   NW ▇/▇ ▇▇ ▇/▇, ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇.		Leased		July 1, 2027		$2,200,000		N
Landtech Enterprises, LLC		“Elk Disposal-▇▇▇▇▇▇▇▇▇ #10-2”   and “▇▇▇▇▇▇▇▇▇ #1 ▇▇▇▇▇” (the preceding well has been plugged and abandoned) East  1/2 of Section 10,Township ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇.		Leased		July 1, 2027		$2,200,000		N
Landtech Enterprises, LLC		“▇▇▇▇▇▇ #1”   Township 153 North, Range 91W, Section ▇▇, ▇▇ ▇/▇ ▇▇  ▇/▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇. Lessor Quit claimed title to property to “D&P ▇▇▇▇▇▇, LLP” on August 2, 2010.		Leased		July 1, 2029		$2,200,000		N

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
Landtech Enterprises, LLC		“▇▇▇▇▇▇ 11-2 Well” a/k/a Rosebud SWD   S 1/2 of the NW  1/4, and the NE 1/4, of the SW 1/4, Section 2, Township 153N, Range ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇.		Leased		August         , 2013		$2,200,000		N
Landtech Enterprises, LLC		“TFF #1 Well”   NE4 of ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 106 West, Golden Valley, North Dakota.   * this site may not be salt water disposal well and may instead be an oil or gas well.		Leased		July 1, 2022		$2,200,000		N
Landtech Enterprises, LLC		“#1 Beagle Well”   SW  1/4 of ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇, ▇. P. M., Richland County, Montana.		Leased		September 30, 2025		$2,200,000		N
Landtech Enterprises, LLC		“▇▇▇▇▇▇ #2”   Township 153 North, Range 91W, Section ▇▇, ▇▇ ▇/▇ ▇▇  ▇/▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇.		Leased		Oral arrangement, written agreement to be requested and entered into as soon as possible after the First Amendment Effective Date in the same form as ▇▇▇▇▇▇ #1 lease		$2,200,000		N

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
Landtech Enterprises, LLC		“▇▇▇▇ #1”   This property relates to permit UIC No. W0311S0783D		Leased		99 year lease commencing on November 30, 2012		$2,200,000		N
Landtech Enterprises, LLC		“▇▇▇▇ #1”   This property relates to permit UIC No. W0323S0796D		Leased		99 year lease commencing on November 30, 2012		$2,200,000		N
Landtech Enterprises, LLC		“Bowbells”   Township 162 North, Range 89 West, 5th P.M., Section 21, in ▇▇▇▇▇ County, North Dakota		Leased		July 2028/2026 plus 2 possible renewal terms of 10 years		$2,200,000		N
Landtech Enterprises, LLC		“Bull Moose”   BN 27x14, SW/SW 14 of Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ 101W		Leased		Lease already terminated and will expire December 2012		$0.00		N
Landtech Enterprises, LLC		Note: there are potentially six (6) new ▇▇▇▇▇ under construction which are known as “Stanley”, “Arnegard”, “Williston”, “▇▇▇▇”, “▇▇▇▇▇▇▇”, and a to be named later well in North Dakota around the other Landtech ▇▇▇▇▇. The Rough Rider Seller is to advise the Borrower of the status of the preceding items as soon as possible.

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II. Pipeline

See attached.

 

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III. Post-Closing Segment

See attached.

 

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IV. Office Space

 

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
Badlands Power Fuels, LLC		Premises described as the West building (32’ x 100’ pole barn) and office (14’ x 32’), also land west of building to creek, in Baker, Montana.		Leased				N/▇		▇
▇▇▇▇▇▇▇▇ Corporation		▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Corporate Office)		Leased		February 4, 2017		N/▇		▇
▇▇▇▇▇▇▇▇ Corporation		▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (Administrative Office)		Leased		June 30, 2014		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		The Woodlands Atrium ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (Administrative Office)		Leased		October 14, 2017		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (Excalibur), Inc.		“Rainbow” ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (Office, Yard and Shop)		Leased		May 6, 2014		N/A		N

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Coushatta”   ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Office, Yard and Shop)		Leased		October 1, 2012 (with an option to extend for an additional year)		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Weatherford”   ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (Administrative Office)		Leased		March 31, 2013		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Morgantown” / “Devonian”   ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Office, Shop and Yard)		Leased		Month to Month		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Weatherford”   ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (Administrative Office)		Leased		July 31, 2013		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ (Offices)		Leased		February 18, 2013		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Office, Yard and Shop)		Leased		October 21, 2014		N/A		Y

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Carthage”   7.400 Acre Tract in City of Carthage, Panola County, Texas   ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (Office, Shop and Yard)		Owned		N/A		$1,600,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Frierson”   9.182 Acre Tract in Parish of Desoto, Louisiana   ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Office, Yard and Shop)		Owned		N/A		$2,000,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Eagleford”   102256 IH37 ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (Office, Yard and Shop and Disposal Well)		Owned		N/A		$2,500,0000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Baton Rouge”   ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Administrative Office)		Leased		June 30, 2014		N/A		N

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V. Other Locations

 

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
Appalachian Water Services, LLC		▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇   (Water treatment plant)		Owned		N/A		$200,000		N
Appalachian Water Services LLC		▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇   (Vacant land)		Leased		October ▇, ▇▇▇▇		▇/▇		▇
▇▇▇▇▇▇▇▇ Power Fuels, LLC		335 foot communications tower on land near McGregor, North Dakota.		Leased		July 25, 2017		N/A		N
Badlands Power Fuels, LLC		Communications tower owned by Tower Owner commonly referred to as the ▇▇▇▇▇ Tower Site (▇▇/▇, ▇▇/▇, ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇) in North Dakota		Leased		October 31, 2013, with 1 year renewal year		N/A		N
Badlands Powers Fuels, LLC		Communications tower and building located in ▇▇▇▇ County, North Dakota		Leased		October 31, 2013		N/A		N
Badlands Power Fuels, LLC		Radio tower located approximately 4 miles north of Culbertson, Montana.		Leased		Year to year		N/A		N
Badlands Power Fuels, LLC		Communications tower and building located in ▇▇▇▇▇ County, North Dakota		Leased		June 30, 2015		N/A		N
Badlands Power Fuels, LLC		172 foot communications tower on SRT Communications Inc.’s property located at ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇		Leased				N/A		N
Badlands Power Fuels, LLC		340 foot communications tower on SRT Communications Inc.’s property located at ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇		Leased		November 4, 2013		N/A		N

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
Badlands Power Fuels, LLC		Tower located 4 miles south of Sentinel butte, Sentinel Butte, North Dakota		Leased		August 30, 2016		N/A		N
Badlands Power Fuels, LLC		Watford   ▇▇▇▇▇▇▇▇ County, North Dakota – Township 150 North, Range 98 West, Section 21: NE  1/4, excepting IT No. 986, 1050, 1150, 1168, 1913 and 1914 deeded of record		Owned		N/A		$8,559,320		Y
Badlands Power Fuels, LLC		Beach Land   County of Golden Valley County, North Dakota – Part of the SW  1/4 of Section 13, Township 140 North of Range 106, West of the 5th P.M.		Owned		N/A		$8,423		Y
Badlands Power Fuels, LLC		Part of the NW  1/4 SE  1/4 of Section 27, in Township 157 North of Range 95 West of the Fifth Principal Meridian, ▇▇▇▇▇▇▇▇ County, North Dakota		Owned		N/A
Badlands Power Fuels, LLC		Dickinson Land Part of the NE  1/4 of Section 16, Township 140 North, Range 96 West of the 5th Principal Meridian, ▇▇▇▇▇ County, North Dakota		Owned		N/A		$5,516.770		Y

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
Badlands Power Fuels, LLC		Sublot #8 in the SE  1/4 NE  1/4 Section 34, T.157N. R.95W. 5th P.M. City of Tioga, ▇▇▇▇▇▇▇▇ County, North Dakota Note: the Rough Rider Seller and Borrower will determine on or promptly after the First Amendment Effective Date if this property is to being transferred at closing.		Owned		N/A				Y
Badlands Power Fuels, LLC		Stanley   Mountrail County, North Dakota – Township 156 North, Range 90 West Section 19: W  1/2 NE  1/4, less Highway right-of-way and Outlot 2		Owned		N/A		$4,213,711		Y
Badlands Power Fuels, LLC		Minot Admin   (a) Lots 1 and 2, less the East 200 feet thereof, Block 2, Plat of Blocks I and 2, Roosevelt Heights Addition to the City of Minot, ▇▇▇▇ County, North Dakota; and (b) the North 200 feet of ▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇’s Rearrangement of Block 2, 4, 6, 7,9 and 13, Amended Plat of Roosevelt Heights, Blocks 3 to 13, inclusive, Minot, ▇▇▇▇ County, North Dakota		Owned		N/A		$1,657,162		Y
Badlands Power Fuels, LLC		Minot Op   Lot 7, the Company Park West to the City of Minot, ▇▇▇▇ County, North Dakota		Owned		N/A		$2,533,754		Y

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
Badlands Power Fuels, LLC		Williston   (a) a parcel of land located in the NE  1/4 SE  1/4 of Section 2, Township 154 North, Range 101 West of the ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇; and (b) a parcel of land located In the SE  1/4 SE  1/4 of Section 2, Township 154 North, Range 101W of the Fifth Principal Meridian, ▇▇▇▇▇▇▇▇ County, North Dakota.   *may also contain salt water disposal well.		Owned		N/A		$1,575,768		Y
Badlands Power Fuels, LLC		New Williston   SW  1/4 of Section 17 in Township 155 North of Range 101 West of the 5th Principal Meridian in ▇▇▇▇▇▇▇▇ County, North Dakota.   *may also contain salt water disposal well.		Owned		N/A		$1,600,000		N
Badlands Power Fuels, LLC		Tioga   Sublot 6 located in the SW  1/4 NW  1/4 of Section 5 in Township 156 North of Range 95 West of the 5th P.M. in ▇▇▇▇▇▇▇▇ County, North Dakota		Owned		N/A		$260,598		Y

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
Badlands Power Fuels, LLC		Beach Land   (a) Blocks Six (6) and Seven (7), Block Four (4), ▇▇▇. ▇▇▇▇▇▇▇’▇ First Addition to the City of Beach, Golden Valley County, North Dakota; (b) the North One Hundred Seventy-five Feet and Eight Inches (175 2/3’) of Lot Two (2), Block Eleven (11), Hunter’s First Addition to the City of Beach, Golden Valley County, North Dakota (also known as Auditor’s Tract A-31); and (c) part of a tract of land in Lot Three (3), Block Eleven (11), Hunter’s First Addition to the City of Beach, Golden Valley County, North Dakota		Owned		N/A		$144,904		Y
Badlands Power Fuels, LLC		Palermo   Property located in the County of Mountrail, North Dakota- Township ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇: a tract of land lying S of US Highway #2		Owned		N/A		$240,000		N
Badlands Power Fuels, LLC		Watford   Parcel of land located in the NE  1/4 NE  1/4 of Section 21, Township 150 North, Range 98 West of the Fifth Principal Meridian, ▇▇▇▇▇▇▇▇ County, North Dakota, containing approximately 1.12 acres		Owned		N/A		$10,000		Y

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		2.11 acre tract of land being out of Tract 14 of Dixondale, Carrizo Springs, Texas, a subdivision of land, according to the plat recorded in Volume 1, Page 9 of the Plat Records of Dimmit County, Texas, and being out of a 5.721 acre tract conveyed from Crystal City Railroad, Inc. to the City of Carrizo Springs by deed dated April 14, 1997 and recorded in Volume 253, Page 585 of the deed Records of Dimmit County, Texas   (Equipment Storage)		Owned		N/A		$2,200		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		9.99 acre tract in Dimmit County, Texas. ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇.   (Equipment Storage Yard and Shop)		Owned		N/A		$209,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		9.21 acres of an 18.42 acre tract of land being out of the 155.90 acre Tract 3 described in a conveyance by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, et al to Live Oak Partners, LP by deed dated May 30, 2006, recorded in Volume 66, Page 12 of the Official Public Records of Live Oak County, Texas, and also being out of the ▇▇▇▇ ▇▇▇▇▇▇ Grant, Abstract No. 5, Live Oak County, Texas (Vacant Land)		Owned		N/A		$62,500		N

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		173.92 Acre Tract in ▇▇▇▇ County, Texas   ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (▇▇▇▇ and Rental Property)		Owned		N/A		$198,000		N
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc		▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ (Beersheba Transfer Station)		Owned		N/A		$0.00		N
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc		▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (Rental Property)		Owned		N/A		$70,000		N
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Water Storage Facility)		Leased		August 18, 2012 (with option to extend for three 1 year extensions)		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ (Employee Housing)		Leased		October 22, 2013		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ (Employee Housing)		Leased		October 14, 2013		N/A		N

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Morgantown Frac Yard”   ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Truck and Frac Tank Storage Yard)		Owned		N/A		$460,000		Y
▇▇▇▇▇▇▇▇ Water Resources Corporation		“Bethlehem Transfer Station”   ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Transfer Station)		Own		N/A		$2,000,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Longstreet Booster Station”   ▇▇▇▇ ▇▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Booster Station)		Lease		March 2036		$2,000,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Office, Shop and Yard)		Owned		N/A		$472,207		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇▇ ▇. ▇-▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (Yard)		Leased		May 31, 2013		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇▇ ▇▇ ▇▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Office and Yard)		Leased		August 1, 2012		N/A		Y

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Office, Shop and Yard)		Owned		N/A		$2,500,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (Office, Shop and Yard)		Leased		January 10, 2015		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Rental Home)		Leased		Month to month		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Rental Home)		Leased		Month to month		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Rental Home)		Leased		Month to month		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Rental Home)		Leased		Month to month		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Rental Home)		Leased		Month to month		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Rental Home)		Leased		Month to month		N/A		N

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Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Office and Yard)		Leased		June 9, 2012		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ (Yard)		Leased		October 14, 2017		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Office, Shop and Yard)		Owned		N/A		$700,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Office, Yard and Shop)		Leased		August 1, 2012		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Yard)		Leased		June 7, 2015		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Yard and Staging Area for Temporary Pipeline)		Leased		Month to Month		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Office, Yard and Shop)		Leased		May 1, 2015		N/▇		▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Truck Yard and Office Trailer)		Leased		May 1, 2012		N/A		Y

---

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
Landtech Enterprises, LLC		Contract for Deed dated January 1, 2008, by and between Beagle Land Company, as Seller, and Landtech, as Purchaser, pertaining to property located in Sidney, Richland County, Montana with a final payment due January 15, 2013.		Owned		N/A		$78,942.29		Y
Landtech Enterprises, LLC		Green Property   SW  1/4, SW  1/4 of Section 5, Township 151 North, Range 101 West of the ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇.		Leased		No end date.		$0.00		Y
Landtech Enterprises, LLC		Beagle Land Property   Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ 59 E. MPM, Richland County, Montana.		Leased		September 30, 2025		$0.00		Y

V. Thermo Fluid Locations

 

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$4,335,539		Y
Thermo Fluids Inc.		▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$354,230		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$1,153,757		Y

---

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$588,026		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$998,958		Y
Thermo Fluids Inc.		▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$2,477,774		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$2,241,327		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$243,312		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$109,320		Y
Thermo Fluids Inc.		▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇		Leased		4/30/2021		N/A		Y
Thermo Fluids Inc.		▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇		Leased		11/1/2012		N/A		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇		Leased		7/31/13		N/A		Y
Thermo Fluids Inc.		▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇		Leased		Month to month		N/A		Y
Thermo Fluids Inc.		▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇		Leased		6/30/14 and then holdover becomes month to month		N/A		Y
Thermo Fluids Inc.		4000 & ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇		Leased		2/28/15 plus 1 60 month renewal option		N/A		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇		Leased		11/1/13		N/A		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇		Leased		6/30/14		N/A		Y
Thermo Fluids Inc.		▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇		Leased		5/31/14		N/A		Y

---

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
Thermo Fluids Inc.		▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇		Leased		3/30/16		N/A		Y
Thermo Fluids Inc.		▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇		Leased		11/30/14		N/A		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇		Leased		6/30/12		N/A		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇		Leased		6/30/14 plus 1 60 month renewal term		N/A		Y
Thermo Fluids Inc.		▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇		Leased		Month to month		N/A		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇		Leased		11/30/22		N/A		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇		Leased		3/31/14 plus 1 60 month renewal term		N/A		Y
Thermo Fluids Inc.		▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇		Leased		Month to month		N/A		Y
Thermo Fluids Inc.		Facility ▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇. 306 Beowawe, Nevada		Leased		Term not specified in oral arrangement		N/A		Y
Thermo Fluids Inc.		▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇		Leased		5/31/15 and then auto month to month		N/A		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (Rail Spur Easement Only)		Leased		Month to month		N/A		Y
Thermo Fluids Inc.		▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇		Leased		10/31/12, plus 1 36 month renewal term		N/A		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ & 115 Scottsdale, Arizona		Leased		11/30/2016, plus one 36 month renewal option		N/A		Y

---

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
Thermo Fluids Inc.		▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇		Leased		7/1/2013, plus 2 36 month renewal terms		N/A		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇		Leased		7/31/12, plus auto renewals of 12 months		N/A		Y
Thermo Fluids Inc.		▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇		Leased		Month to month		N/A		Y
Thermo Fluids Inc.		▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇		Leased		Month to month		N/A		N
Thermo Fluids Inc.		▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇		Leased		Month to month		N/A		Y
Thermo Fluids Inc.		▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇		Leased		12/31/13		N/A		Y
Thermo Fluids Inc.		▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇		Leased		Terminable with 30 days notice		N/A		Y
Thermo Fluids Inc.		▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇		Leased		1/31/17 plus 2 36 month renewal terms		N/A		Y
Thermo Fluids Inc.		▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇		Leased		10/31/13, plus 2 36 month renewal options.		N/A		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇		Leased		3/28/2020, plus two 60 month renewal term options		N/A		Y
Thermo Fluids Inc.		Track 6116 Salina, Kansas (Rail Spur Site)		Leased		5/18/12		N/A		Y
Thermo Fluids Inc.		Track 769 (Circ7: ▇▇▇▇▇, ▇▇▇▇ ▇, ▇▇▇▇ Post: ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇) ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (Rail Spur Site)		Leased		30 day termination right		N/A		Y

---

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
Thermo Fluids Inc.		▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (Parking/Storage)		Leased		Month to month		N/A		Y
Thermo Fluids Inc.		East ▇▇▇▇▇ Rail Port San Antonio, Texas (Rail Spur Site)		Leased		Term not specified in oral arrangement		N/A		Y
Thermo Fluids Inc.		▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ (Rail Spur Site)		Leased		Term not specified in oral arrangement		N/A		Y
Thermo Fluids Inc.		4910, 4922 & ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ (Rail Spur Site)		Leased		2/28/15		N/A		Y
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ (Rail Spur Site)		Leased		Term not specified in oral arrangement		N/A		Y
Thermo Fluids Inc.		▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ TP861-Track ZTS-Spt ▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇ (Rail Spur Site)		Leased		Terminable by other party only		N/A		Y

---

Schedule 4.1

Organizational Information

 

Borrower		Type of Organization		Jurisdiction of Organization
▇▇▇▇▇▇▇▇ Corporation		Corporation		Delaware
▇▇▇▇▇▇▇▇ Water Resources Corporation		Corporation		Texas
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		Corporation		Texas
HEK Water Solutions, LLC		Limited Liability Company		Delaware
1960 Well Services, LLC		Limited Liability Company		Ohio
▇▇▇▇▇▇▇▇ Environmental Services, Inc.		Corporation		Delaware
Thermo Fluids Inc.		Corporation		Delaware
Appalachian Water Services, LLC		Limited Liability Company		Pennsylvania
Badlands Power Fuels, LLC		Limited Liability Company		Delaware
Badlands Power Fuels, LLC		Limited Liability Company		North Dakota
Landtech Enterprises, LLC		Limited Liability Company		North Dakota
Badlands Leasing, LLC		Limited Liability Company		North Dakota
Badlands Development, LLC		Limited Liability Company		North Dakota

---

Schedule 4.7

Litigation

None.

---

Section 4.10

Environmental Matters

None.

---

Schedule 4.11

Subsidiaries

 

Subsidiary		Owner and Ownership Interest
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇▇▇▇▇ Corporation (100%)
▇▇▇▇▇▇▇▇ Water Resources Corporation		▇▇▇▇▇▇▇ Corporation (100%)
HEK Water Solutions, LLC		▇▇▇▇▇▇▇ Corporation (100%)
1960 Well Services, LLC		▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc. (100%)
▇▇▇▇▇▇▇▇ Environmental Services, Inc.		▇▇▇▇▇▇▇▇ Corporation (100%)
Thermo Fluids Inc.		TFI Holdings, Inc. (100%)
Appalachian Water Services, LLC		HEK Water Solutions, LLC (51%)
Badlands Power Fuels, LLC [Delaware entity]		▇▇▇▇▇▇▇▇ Corporation (100%)
Badlands Power Fuels, LLC [North Dakota entity]		Badlands Power Fuels, LLC [Delaware entity]
Landtech Enterprises, L.L.C.		Badlands Power Fuels, LLC [Delaware entity]
Badlands Leasing, LLC		Badlands Power Fuels, LLC [Delaware entity]
Badlands Development, LLC		Badlands Power Fuels, LLC [Delaware entity]

---

Schedule 6.1

Existing Debt

 

1.	Debt in a maximum aggregate amount not to exceed $500,000 (with any excess over $500,000 counted against the basket set forth in Section 6.1(e)) in respect of the following:

 

a.

all present and future goods leased or financed by Deere & Company, Deere Credit, Inc. and/or ▇▇▇▇ Deere Construction & Forestry Company to ▇▇▇▇▇▇▇▇ Corporation, secured by UCC-1 Financing Statement No. 2011-0352669 filed January 31, 2011 with the Delaware Department of State, listing ▇▇▇▇▇▇▇▇ Corporation as debtor and Deere & Company, Deere Credit, Inc. and/or ▇▇▇▇ Deere Construction & Forestry Company, as secured party.

 

b.

that certain ▇▇▇▇ Deere 850J Crawler Dozer, Serial No. 188516, leased pursuant to a capital lease, secured by UCC-1 Financing Statement No. 2011-0353832 filed January 31, 2011 with the Delaware Department of State, listing ▇▇▇▇▇▇▇▇ Corporation as debtor and ▇▇▇▇ Deere Construction & Forestry Company, as secured party.

 

c.

that certain ▇▇▇▇ Deere 240 Excavator, Serial No. 606187, leased pursuant to a capital lease, secured by UCC-1 Financing Statement No. 2011-0353857 filed January 31, 2011 with the Delaware Department of State, listing ▇▇▇▇▇▇▇▇ Corporation as debtor and ▇▇▇▇ Deere Construction & Forestry Company, as secured party.

 

d.

all present and future goods leased or financed by Deere & Company, Deere Credit, Inc. and/or ▇▇▇▇ Deere Construction & Forestry Company to ▇▇▇▇▇▇▇▇ Corporation, secured by UCC-1 Financing Statement No. 07-0003739504 filed February 1, 2007 with the Secretary of State of the State of Texas, listing ▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc. as debtor and Deere & Company, Deere Credit, Inc. and/or ▇▇▇▇ Deere Construction & Forestry Company, as secured party.

 

e.

that certain ▇▇▇▇ Deere 850J Crawler Dozer, Serial No. 188516, leased pursuant to a capital lease,, secured by UCC-1 Financing Statement No. 11-0003085745 filed January 31, 2011 with the Secretary of State of the State of Texas, listing ▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc. as debtor and ▇▇▇▇ Deere Construction & Forestry Company, as secured party.

 

f.

that certain ▇▇▇▇ Deere 240 Excavator, Serial No. 606187, leased pursuant to a capital lease, secured by UCC-1 Financing Statement No. 11-0003086251 filed January 31, 2011 with the Secretary of State of the State of Texas, listing ▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc. as debtor and ▇▇▇▇ Deere Construction & Forestry Company, as secured party.

 

2.	$15,000 Surety Bond dated July 11, 2011, made by Well Services, as principal, and Lexon Insurance Company, as surety, in favor of the Ohio Department of Natural Resources, Division of Mineral Resources Management.

 

3.	$20,342.92 Surety Bond dated August 16, 2011, made by CVR, as principal, and Lexon Insurance Company, as surety, in favor of the Louisiana Department of Natural Resources, Officer of Conservation.

---

4.	Letter of credit number A31230T in the face amount of $150,000.00 unsecured and issued by Compass Bank for the account of ▇▇▇▇▇▇▇▇ Corporation.

 

5.	Letter of credit number S30896T in the face amount of $50,000.00 unsecured and issued by Compass Bank for the account of ▇▇▇▇▇▇▇▇ Corporation.

 

6.	Letter of credit number 242 in the face amount of $56,098 issued by Bank and Trust of Pointe Coupe for the account of ▇▇▇▇▇▇▇▇ Corporation.

 

7.	Letter of credit number 243 in the face amount of $77,800 issued by Bank and Trust of Pointe Coupe for the account of ▇▇▇▇▇▇▇▇ Corporation.

 

8.	Letter of credit number 244 in the face amount of $60,078 issued by Bank and Trust of Pointe Coupe for the account of ▇▇▇▇▇▇▇▇ Corporation.

 

9.	Letter of credit number 245 in the face amount of $59,882 issued by Bank and Trust of Pointe Coupe for the account of ▇▇▇▇▇▇▇▇ Corporation.

 

10.	Any earn-outs, obligations to make purchase price adjustments or indemnities under each Acquisition Agreement that constitute Debt.

---

Schedule 6.2

Existing Liens

None.

---

Schedule 6.3

Existing Investments

 

1.

On May 6, 2009, the Company purchased approximately 7% of the equity of Underground Solutions, Inc. (“UGSI”), a water infrastructure and pipeline supplier located in Poway, California for approximately $6.8 million in cash. On December 10, 2009, the Company purchased 1 million preferred shares of UGSI for approximately $400,000 in cash.

---

Annex III

Material Real Property to be Mortgaged on Effective Date

 

I.	Salt Water Disposal Well Sites

 

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Catarina SWD #1 and Catarina SWD #2   Parcel of real estate located in Dimmit County, Texas (Lease dated January 7, 2011)   ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇   and   ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		2021 (with an option to extend for an additional 10 years)		$7,209,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Deadwood SWD”   13.116 Acre Tract in Panola County/▇▇▇▇▇▇▇ City, Texas   ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$3,773,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Appleby SWD No. 1S”   3.729 Acre and 13.236 Acre Tracts in Nacogdoches County/▇▇▇▇▇▇▇ City, Texas   ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$4,679,000		Y

 

Annex III

---

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇▇▇▇▇▇ SWD” (awaiting final approval from court)   5.594 Acre Tract in Sabine County, Texas   ▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$675,000		N
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Panola #2 SWD”   5.00 Acre Tract in Panola County/Deadwood, Texas   ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$5,023,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Longbranch #5 SWD”   4.00 Acre Tract in Panola County/Deadwood, Texas   ▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$4,838,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇▇ #1 SWD”   ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		June 12, 2017		$5,038,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇▇ ▇▇▇▇▇ SWD”   2.85 Acre Tract in ▇▇▇▇ County, Texas   ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		August 13, 2021 (with an option to extend for 5 years)		$3,627,000		Y
▇▇▇▇▇▇▇▇ Water Resources Corporation		“▇▇▇▇▇▇ SWD”   ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		Year to year		$3,394,000		Y

 

Annex III

---

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
▇▇▇▇▇▇▇▇ Water Resources Corporation		“Hill SWD”   ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$3,577,000		Y
▇▇▇▇▇▇▇▇ Water Resources Corporation		“Harvco SWD #1”   ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$4,835,000		Y
▇▇▇▇▇▇▇▇ Water Resources Corporation		“Harvco SWD #2” (inactive well)   ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$3,260,000		N
▇▇▇▇▇▇▇▇ Water Resources Corporation		“Childress SWD #1 and Childress SWD #2” (Childress SWD #1 has been plugged and abandoned)   ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$3,493,000		Y
▇▇▇▇▇▇▇▇ Water Resources Corporation		“▇▇▇▇▇▇▇▇▇ SWD #3”   ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$4,440,000		Y
▇▇▇▇▇▇▇▇ Water Resources Corporation		“▇▇▇▇▇▇▇▇▇ SWD #2”   ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		No end date		$4,555,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇ ▇▇▇ ▇▇▇▇▇ SWD” (not in service)   2.93 Acre Tract in Angelina County, Texas   ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		June 26, 2017		$5,613,000		Y

 

Annex III

---

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Yes/No)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Lamza SWD #1”   5 Acres in ▇▇▇▇▇▇ County, Texas   ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇. ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Leased		April 14, 2026		$2,500,000		Y
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“▇▇▇▇▇▇▇”   ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$850,000		N
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Atascosa County SWD #1 (being permitted)   30 Acres in Atascosa County, Texas   ▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$0.00; value of land is listed under the “Eagleford” property in this Schedule		N

 

II.

Pipeline

The Pipeline (excluding the Post-Closing Segment).

 

III.	Office Space

 

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		“Eagleford”   102256 IH37 ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (Office, Yard and Shop and Disposal Well)		Owned		N/A		$2,500,0000		Y

 

Annex III

---

IV.	Other Locations

 

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Office, Shop and Yard)		Owned		N/A		$2,500,000		Y

 

V.	Thermo Fluid Locations

 

Credit Party		Address/Description		Owned/ Leased		Term of Lease		Estimated Fair Market or Book Value		Equipment or Inventory at the Location (Y/N)
Thermo Fluids Inc.		▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$4,335,539		Y
Thermo Fluids Inc.		▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇		Owned		N/A		$2,477,774		Y

 

Annex III

---

Annex IV

Existing Defaults

AWS RELATED DEFAULTS

 

1.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of the Borrower’s failure to comply with the requirements of Section 5.6 of the Credit Agreement due to the existence of the various Events of Default referenced on this schedule at the time of Borrower’s acquisition of AWS;

 

2.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of Borrower’s failure to comply with Section 6.4 of the Credit Agreement relating to the acquisition of AWS due to the existence of the various Events of Default referenced on this schedule at the time of Borrower’s acquisition of AWS;

 

3.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of Borrower’s failure to comply with Section 6.3 of the Credit Agreement due to the failure of Borrower’s acquisition of AWS to constitute a Permitted Acquisition under Section 6.4;

 

4.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(k) of the Credit Agreement as a result of Borrower’s failure to own, directly or indirectly, 100% of the outstanding Equity Interests in AWS;

 

5.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(b) of the Credit Agreement as a result of the inaccuracy of Borrower’s representation in Section 4.11 of the Credit Agreement, on each date deemed made under the Credit Agreement on and after Borrower’s acquisition of AWS until the First Amendment Effective Date, that each Subsidiary of the Borrower has complied with the requirements of Section 5.6 of the Credit Agreement due to Borrower’s failure to own, directly or indirectly 100% of the outstanding Equity Interests in AWS;

DEFAULTS RELATING TO POST-CLOSING COVENANTS AND SECURITY INTEREST REQUIREMENTS

 

6.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of Borrower’s failure to comply with the requirements related to Material Real Property within the time periods set forth in Section 5.17(a) of the Credit Agreement;

 

7.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of Borrower’s failure to comply with the requirements of Section 5.17(b) of the Credit Agreement with respect to Account Control Agreements within the time periods set forth therein;

 

Annex IV

---

8.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of Borrower’s failure to comply with the requirements of Section 5.17(c) of the Credit Agreement with respect to lien waivers within the time periods set forth therein;

 

9.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of Borrower’s failure to comply with the requirements of Section 5.17(d) of the Credit Agreement with respect to Certificated Equipment within the time periods set forth therein;

 

10.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of the Borrower’s failure to comply with the requirements of Section 5.7 of the Credit Agreement that the Administrative Agent have an Acceptable Security Interest in the Collateral and that the Administrative Agent’s first priority Lien be noted on all certificates of title covering Certificated Equipment;

 

11.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of the Borrower’s failure to comply with Section 5.8 of the Credit Agreement with respect to Account Control Agreements within the time period set forth therein;

 

12.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of the Borrower’s failure to comply with the requirements of Section 5.12 of the Credit Agreement relating to Certificated Equipment within the time periods set forth therein;

 

13.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of Borrower’s failure to comply with the requirements set forth in Section 5.16 of the Credit Agreement with respect to additional Material Real Property within the time periods set forth therein;

 

14.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of Borrower’s failure to comply with Section 6.20 of the Credit Agreement with respect to the value of Collateral that is stored at premises that are not owned by a Credit Party and not covered by a lien waiver or subordination agreement;

 

15.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of Borrower’s failure to comply with the requirements of Section 4.3(d) of the Security Agreement with respect to Account Control Agreements;

 

16.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of Borrower’s failure to endorse certificates of title to the Administrative Agent as required by Section 4.5 of the Security Agreement;

 

17.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of Borrower’s failure to have the Administrative Agent’s Lien on all Certificated Equipment property noted on the certificate of title as required by Section 4.10 of the Security Agreement;

 

Annex IV

---

18.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of Borrower’s failure to comply with Section 4.12 of the Security Agreement regarding Account Control Agreements;

 

19.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(e) of the Credit Agreement as a result of the failure of the Security Documents to create an Acceptable Security Interest in the Collateral;

 

20.

Events of Defaults occurring prior to the First Amendment Effective Date under Section 7.1(b) of the Credit Agreement as a result of the inaccuracy of Borrower’s representation in Section 3.2 of the Security Agreement, on each date deemed made under the Credit Agreement prior to the First Amendment Effective Date, that all actions necessary to perfect the Administrative Agent’s security interest have been taken;

 

21.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(b) of the Credit Agreement as a result of the inaccuracy of Borrower’s representation in Section 3.5 of the Security Agreement, on each date deemed made under the Credit Agreement prior to the First Amendment Effective Date, that no other person has “control” or “possession” of any deposit accounts;

DEFAULTS RELATING TO RRE

 

22.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of Borrower’s failure to comply with Section 5.6 of the Credit Agreement with respect to the formation of RRE;

GENERAL DEFAULTS

 

23.

Events of Default occurring prior to the First Amendment Effective Date on the date of each Advance or issuance, increase, renewal or extension of any Letter of Credit or the reallocation of the Letter of Credit Exposure prior to the First Amendment Effective Date under Section 7.1(b) of the Credit Agreement as a result of the inaccuracy of Borrower’s representation in Section 3.2(a) of the Credit Agreement that all representations and warranties are true and correct in all material respects as of such date;

 

24.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(b) of the Credit Agreement as a result of the inaccuracy of Borrower’s representation in Section 4.8(a) of the Credit Agreement, on each date deemed made under the Credit Agreement prior to the First Amendment Effective Date, that no Default or Event of Default has occurred and is continuing;

 

25.

Events of Default under Section 7.1(c) of the Credit Agreement as a result of the inaccuracy of the representation included in each Compliance Certificate delivered prior to the First Amendment Effective Date pursuant to Section 5.2(c) of the Credit Agreement that no Default or Event of Default has occurred or is continuing; and

 

Annex IV

---

26.

Events of Default occurring prior to the First Amendment Effective Date under Section 7.1(c) of the Credit Agreement as a result of the Borrower’s failure to comply with the requirement of Section 5.2(f) of the Credit Agreement to provide the Administrative Agent notice of any Default or Event of Default within five (5) Business Days after the occurrence thereof.

 

Annex IV

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SCHEDULE II

Commitments, Contact Information

 

ADMINISTRATIVE AGENT/ISSUING LENDER/SWING LINE LENDER
▇▇▇▇▇ Fargo Bank, National Association		Address:		▇▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇. Mail Code NC0680 ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
		Attn:		Syndication/Agency Services
		Telephone:		(▇▇▇) ▇▇▇-▇▇▇▇
		Facsimile:		(▇▇▇) ▇▇▇-▇▇▇▇
		with a copy to:
		Address:		1000 Louisiana, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
		Attn:		▇▇▇▇▇▇▇ ▇▇▇▇▇, Director
		Telephone:		(▇▇▇) ▇▇▇-▇▇▇▇
		Facsimile:		(▇▇▇) ▇▇▇-▇▇▇▇
		CREDIT PARTIES
Borrower/Guarantors		Address:		▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
		Attn:		▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Executive Vice President
		Telephone:		(▇▇▇)▇▇▇-▇▇▇▇ ▇▇▇.▇▇▇
		Facsimile:		(▇▇▇)▇▇▇-▇▇▇▇
		Email:		▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
		with a copy to:
		Address:		▇▇▇▇ ▇▇▇▇▇ LLP ▇▇▇▇ ▇▇▇▇▇ Centre   ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
		Attn:		▇▇▇▇ ▇▇▇▇▇▇▇▇▇
		Telephone:		(▇▇▇) ▇▇▇-▇▇▇▇
		Facsimile:		(▇▇▇) ▇▇▇-▇▇▇▇
		Email:		▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
		and
		Attn:		▇▇▇ ▇▇▇▇▇▇▇▇
		Telephone:		(▇▇▇)▇▇▇-▇▇▇▇
		Facsimile:		(▇▇▇)▇▇▇-▇▇▇▇
		Email:		▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇

 

Schedule II

---

Lender		Commitment
▇▇▇▇▇ Fargo Bank, National Association		$	64,000,000
Bank of America, N.A.		$	52,000,000
Citizens Bank of Pennsylvania		$	52,000,000
Fifth Third Bank		$	52,000,000
U.S. Bank National Association		$	45,000,000
First National Bank of Pennsylvania		$	35,000,000
First Niagara Bank, N.A.		$	15,000,000
TriState Capital Bank		$	10,000,000
Total:		$	325,000,000

 

Schedule II

---

SCHEDULE I

to Pledge and Security

Agreement

ITEM A – PLEDGED INTERESTS

Common Stock

 

Pledgor		Pledged Interests Issuer (corporate)		Cert. #				# of Shares				Authorized Shares				% of Shares Pledged
▇▇▇▇▇▇▇▇ Corporation		▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.			100				1,000				3,000				100	%
▇▇▇▇▇▇▇▇ Corporation		▇▇▇▇▇▇▇▇ Water Resources Corporation			100				1,000				1,000				100	%
▇▇▇▇▇▇▇▇ Corporation		▇▇▇▇▇▇▇▇ Environmental Services, Inc.			2				100				1,000				100	%
▇▇▇▇▇▇▇▇ Environmental Services, Inc.		Thermo Fluids, Inc.			4				100				1,000				100	%

Limited Liability Company Interests

 

Pledgor

Pledged Interests Issuer (limited liability company)

Cert. #

Art. 8 Opt-In

% of  Limited Liability Company Interests Owned

% of Limited Liability Company Interests Pledged

Type of Limited Liability Company Interests Pledged

▇▇▇▇▇▇▇▇ Corporation

HEK Water Solutions, LLC

N/A

No

100

%

100

%

Membership Interests

▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.

1960 Well Services, LLC

N/A

No

100

%

100

%

Membership Interests

HEK Water Solutions, LLC

Appalachian Water Services, LLC

N/A

No

51

%

100

%

Membership Interests

▇▇▇▇▇▇▇▇ Corporation

Badlands Power Fuels, LLC (DE)

N/A

No

100

%

100

%

Membership Interests

Badlands Power Fuels, LLC (DE)

Badlands Power Fuels, LLC (ND)

N/A

No

100

%

100

%

Membership Interests

 

Schedule I to Pledge and Security Agreement

---

Badlands Power Fuels, LLC (DE)

Landtech Enterprises, L.L.C.

N/A

No

100%

100%

Membership Interests

Badlands Power Fuels, LLC (DE)

Badlands Leasing, LLC

N/A

No

100%

100%

Membership Interests

Badlands Power Fuels, LLC (ND)

Dodge Water Depot, LLC

N/A

No

50%

100%

Membership Interests

 

Schedule I to Pledge and Security Agreement

---

Partnership Interests

 

Pledgor

Pledged Interests Issuer (partnership)

% of Partnership Interests Owned

% of  Partner- ship Interests Pledged

Type of Partnership Interests Pledged

None.

None.

None.

None.

None.

ITEM B – PLEDGED NOTES

None.

 

Schedule I to Pledge and Security Agreement

---

SCHEDULE II

to Pledge and Security

Agreement

Item A-1. Location of Grantor for purposes of UCC.

 

▇▇▇▇▇▇▇▇ Corporation		Delaware
▇▇▇▇▇▇▇▇ Water Resources Corporation		Texas
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		Texas
HEK Water Solutions, LLC		Delaware
1960 Well Services, LLC		Ohio
▇▇▇▇▇▇▇▇ Environmental Services, Inc.		Delaware
Thermo Fluids Inc.		Delaware
Appalachian Water Services, LLC		Pennsylvania
Badlands Power Fuels, LLC		Delaware
Badlands Power Fuels, LLC		North Dakota
Landtech Enterprises, L.L.C.		North Dakota
Badlands Leasing, LLC		North Dakota

Item A-2. Grantor’s place of business or principal office.

 

▇▇▇▇▇▇▇▇ Corporation		▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Water Resources Corporation		c/o Heckmann Corporation ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		c/o Heckmann Corporation ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
HEK Water Solutions, LLC		c/o Heckmann Corporation ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
1960 Well Services, LLC		c/o Heckmann Corporation ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Environmental Services, Inc.		c/o Heckmann Corporation ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇

 

Schedule II to Pledge and Security Agreement

---

Thermo Fluids Inc.		c/o Heckmann Corporation ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Appalachian Water Services, LLC		c/o Heckmann Corporation ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Badlands Power Fuels, LLC [Delaware entity]		c/o Heckmann Corporation ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Badlands Power Fuels, LLC [North Dakota entity]		c/o Heckmann Corporation ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Landtech Enterprises, L.L.C.		c/o Heckmann Corporation ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Badlands Leasing, LLC		c/o Heckmann Corporation ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇

Item A-3. Taxpayer ID number.

 

▇▇▇▇▇▇▇▇ Corporation		▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Water Resources Corporation		▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Water Resources (CVR), Inc.		▇▇-▇▇▇▇▇▇▇
HEK Water Solutions, LLC		▇▇-▇▇▇▇▇▇▇
1960 Well Services, LLC		▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Environmental Services, Inc.		▇▇-▇▇▇▇▇▇▇
Thermo Fluids Inc.		▇▇-▇▇▇▇▇▇▇
Appalachian Water Services, LLC		▇▇-▇▇▇▇▇▇▇
Badlands Power Fuels, LLC [Delaware entity]		▇▇-▇▇▇▇▇▇▇
Badlands Power Fuels, LLC [North Dakota entity]		▇▇-▇▇▇▇▇▇▇
Landtech Enterprises, L.L.C.		▇▇-▇▇▇▇▇▇▇
Badlands Leasing, LLC		▇▇-▇▇▇▇▇▇▇

Item B. Merger or other corporate reorganization.

 

1.	Complete Vacuum and Rental, L.P. converted from a limited partnership into a Texas corporation, Complete Vacuum and Rental, Inc., on September 15, 2008.

 

2.

▇▇▇▇▇▇▇▇ Water Resources Corporation (“HWR”) acquired substantially all of the assets of Charis Partners, LLC (“Charis”) pursuant to that certain Asset Purchase Agreement dated as of June 12, 2009, by and among the Borrower, HWR, Charis, ▇▇▇▇▇ Exploration Corporation, Silversword, L.P., Silversword II, L.P., Silversword III, L.P., Silversword IV, L.P., Silversword V, L.P. and Silversword VII, L.P., ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇.

 

Schedule II to Pledge and Security Agreement

---

3.	Thermo Fluids Inc. (“Thermo Fluids”) acquired substantially all of the assets of Proleum Energy, Inc. (“Proleum”) pursuant to that certain Purchase Agreement and ▇▇▇▇ of Sale, dated as of May 1, 2010, between Proleum and Thermo Fluids.

 

4.	Thermo Fluids acquired substantially all of the assets of Encore D.E.C., LLC (“DEC”) pursuant to that certain Purchase Agreement dated as of November 5, 2010, between DEC and Thermo Fluids.

 

5.	▇▇▇▇▇▇▇▇ Corporation (“▇▇▇▇▇▇▇▇”) purchased all of the outstanding stock of Complete Vacuum and Rental, Inc., a Texas corporation (“CVR”), pursuant to that certain Stock Purchase Agreement dated as of November 8, 2010 by and between ▇▇▇▇▇▇▇▇, CVR, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇ and Jana S. Kent.

 

6.	On March 9, 2011, CVR filed a Certificate of Amendment with the Texas Secretary of State changing its name to Heckmann Water Resources (CVR), Inc. (“HCVR”).

 

7.

HCVR purchased substantially all of the assets relating to the saltwater disposal business in Joaquin City, Panola County, Texas and near Appleby City, Nacogdoches County, Texas of Bear Creek Services, LLC, a Louisiana limited liability company (“Bear Creek”), pursuant to that certain Asset Purchase Agreement dated as of April 1, 2011 between HCVR and Bear Creek.

 

8.

HCVR purchased substantially all of the assets of Devonian Industries Leasing Company, Inc., a Texas corporation (“Devonian Leasing”), Devonian Industries, Inc., a West Virginia corporation (“Devonian Industries”), and Devonian Industries Management Services, Inc., a West Virginia corporation (together with Devonian Leasing and Devonian Industries, “Devonian”), pursuant to that certain Asset Purchase Agreement dated as of March 25, 2011 by and among HCVR, Devonian and Lawrence W. Giles, Jr.

 

9.

HCVR purchased substantially all of the assets of Sand Hill Foundation, LLC, a Texas limited liability company (“SHF”), Sand Hill Panola SWD #2 LLC, a Texas limited liability company (“SHP2”) and Sand Hill Panola SWD #5 LLC, a Texas limited liability company (together with SHF and SHP2, “Sand Hill”), pursuant to that certain Asset Purchase Agreement dated as of March 11, 2011 by and among HCVR, Sand Hill and Larry Joe Eaves.

 

10.

HCVR purchased all of the outstanding stock of Excalibur Energy Services, Inc., an Oklahoma corporation (“Excalibur”), and all of the outstanding membership interests of Blackhawk Industries, L.L.C., a Texas limited liability company (“Blackhawk”), pursuant to that certain Share Purchase Agreement dated as of May 3, 2011, by and among HCVR, Heckmann, Excalibur, Blackhawk, James Lewis, Stacy Lewis, Bonney Martin, Jim Waters and MacMart Oil, LLC.

 

11.	On May 23, 2011, Excalibur filed a Certificate of Amended Registration with the Texas Secretary of State changing its name to Heckmann Water Resources (Excalibur), Inc. (“HWR Excalibur”).

 

12.	Blackhawk merged with and into HWR Excalibur with HWR Excalibur as the surviving entity on June 17, 2011.

 

13.

HCVR purchased substantially all of the assets of Consolidated Petroleum, Inc. (“CP”) pursuant to that certain Asset Purchase Agreement dated as of May 31, 2011, by and among HCVR, CP, Don Wilson and Steve Braley, as amended by that certain First Amendment to Asset Purchase Agreement dated as of June 13, 2011, by and among HCVR, CP, Don Wilson and Steve Braley.

 

Schedule II to Pledge and Security Agreement

---

14.

Thermo Fluids acquired substantially all of the assets of Southwest Petroleum Waste Management, LLC (“SPWM”), Southwest Petroleum Equipment Leasing, LLC (“SPEL”) and AFR One, LLC (“AFR”) pursuant to that certain Purchase Agreement dated as of August 19, 2011, between SPWM, SPEL, AFR and Thermo Fluids.

 

15.	On September 2, 2011, HWR filed a Certificate of Merger with the Texas Secretary of States merging Charis into HWR.

 

16.

HVCR purchased substantially all of the assets of Keystone Vacuum, Inc. (“Keystone”), Somerset Leasing, LLC (“Somerset”) and Gas Patch Enterprises, LLC (“Gas Patch”) pursuant to that certain certain Asset Purchase Agreement dated as of February 1, 2012, by and amount HCVR, Keystone, Somerset, Gas Patch and Scott Darr, Mark Darr and Allan Darr.

 

17.	Thermo Fluids acquired substantially all of the assets of NEVCO Services, Inc. (“NSI”) and NEVCO Oil Services, Inc. (“NOS”) pursuant to that certain Asset Purchase Agreement, dated as of February 15, 2012, among NSI, NOS, Thermo Fluids and other parties thereto.

 

18.	Heckmann Hydrocarbons Holdings Corporation (“HHH”) purchased all of the outstanding stock of TFI Holdings, Inc., a Delaware corporation (“TFI”), pursuant to that certain Stock Purchase Agreement dated as of March 7, 2012, by and among TFI, Green Fuel Services, LLC and HHH.

 

19.	On April 10, 2012, HHH filed a Certificate of Amended Registration with the Delaware Secretary of State changing its name to Heckmann Environmental Solutions, Inc. (“HES”).

 

20.	CVR purchased substantially all of the assets of Homer Enterprises, Inc. (“Homer”) pursuant to that certain Asset Purchase Agreement dated May 3, 2012, by and among CVR, Homer, Scott Homer and Heather Homer.

 

21.	HWR Excalibur merged with and into CVR with CVR as the surviving entity on June 26, 2012.

 

22.

HEK Water Solutions, LLC (“HEK”) purchased 51% of the membership interests of Appalachian Water Services, LLC, a Pennsylvania limited liability company (“AWS”), pursuant to that certain Membership Interest Purchase Agreement dated as of August 31, 2012, by and among HEK, Shallenberger Enterprises, Inc., AWS, Shallenberger Construction, Inc. and Terrance C. Shallenberger, Jr.

 

23.

Heckmann acquired substantially all of the assets of Badlands Power Fuels, LLC, a Delaware limited liability company (“Badlands Delaware”), Badlands Power Fuels, LLC, a North Dakota Limited Liability Company, Landtech Enterprises, LLC, a North Dakota Limited Liability Company and Badlands Leasing, LLC, a North Dakota limited liability company, pursuant to that certain Agreement and Plan of Merger dated as of September 3, 2012, by and among Badlands Energy, LLC, Rough Rider Acquisition, LLC (“Rough Rider Acquisition”) and Heckmann.

 

24.	TFI Holdings, Inc. merged with and into HES with HES as the surviving entity on September 24, 2012.

 

25.	Rough Rider Acquisition was merged with and into Badlands Delaware with Badlands Delaware as the surviving entity on November         , 2012.

 

Schedule II to Pledge and Security Agreement

---

26.	Rough Rider Escrow, Inc., a Delaware corporation (“RRE”) merged with and into Heckmann with Heckmann as the surviving entity on November         , 2012.

 

Schedule II to Pledge and Security Agreement

---

Item C. Deposit Accounts and Securities Accounts.

 

Credit Party		Financial Institution		Account Number				Account Type
Appalachian Water Services, LLC		Somerset Trust Company PO Box 777 151 West Main Street Somerset, PA 15501			2002479712				Checking
Appalachian Water Services, LLC		Somerset Trust Company PO Box 777 151 West Main Street Somerset, PA 15501			2002479762				Payroll Checking
Appalachian Water Services, LLC		Somerset Trust Company PO Box 777 151 West Main Street Somerset, PA 15501			2002563078				Savings
Badlands Power Fuels, LLC (Delaware)		US Bank 800 Nicollet Mall, 3rd Floor Minneapolis, MN 55402			1-047-9049-2672				[Confirm]
Badlands Power Fuels, LLC (North Dakota)		First Western Bank 900 South Broadway PO Box 1090 Minot, ND 58702			936749				[Confirm]
Badlands Power Fuels, LLC (North Dakota)		US Bank 800 Nicollet Mall, 3rd Floor Minneapolis, MN 55402			1-047-9049-2698				[Confirm]
Badlands Leasing, LLC		US Bank 800 Nicollet Mall, 3rd Floor Minneapolis, MN 55402			1-047-9049-2680				[Confirm]
Heckmann Water Resources (CVR), Inc.		First National Bank Cranberry Office 20100 Rte 19 Cranberry Twp., PA 16066   Attn: Sabrina R. Renfrew			95038225				Checking
Heckmann Water Resources (CVR), Inc.		Citizens Bank 100 Sockanosset Cross Roads RDC-580 Cranston, RI 02920   Attn: Ellie Teixiera			6232740681				Operating
Heckmann Corporation		Bank of America 73820 El Paseo Palm Desert CA 92260			11141-60055				Checking

 

Schedule II to Pledge and Security Agreement

---

Credit Party		Financial Institution		Account Number				Account Type
Heckmann Corporation		Morgan Stanley Smith Barney One El Paseo Plaza 74199 El Paseo, Suite 201 Palm Desert, CA 92260			6479221613330				Investment
Heckmann Corporation		Morgan Stanley Smith Barney AIM/Invesco Account			49646				Money Market
Landtech Enterprises, LLC		1st Bank of Sydney 120 2nd Street NW Sidney, MT 59270			116548				[Confirm]
Landtech Enterprises, LLC		BNC National Bank 322 East Main Bismarck, ND 58501			8212023				Checking
Landtech Enterprises, LLC		BNC National Bank 322 East Main Bismarck, ND 58501			8212090				Savings
Landtech Enterprises, LLC		US Bank 800 Nicollet Mall, 3rd Floor Minneapolis, MN 55402			1-047-9049-2706				[Confirm]
TFI Holdings, Inc.		BBVA Compass 2850 E. Camelback Rd., Suite 140 Phoenix, AZ 85016			2503941182				Disbursement Account
TFI Holdings, Inc.		BBVA Compass 2850 E. Camelback Rd., Suite 140 Phoenix, AZ 85016			2503941441				Collection Account
TFI Holdings, Inc.		BBVA Compass 2850 E. Camelback Rd., Suite 140 Phoenix, AZ 85016			2503941468				Payroll Account

Item D. Letter of Credit Rights.

 

1.	Letter of credit number A31230T in the face amount of $150,000.00 unsecured and issued by Compass Bank for the account of Heckmann Corporation.

 

2.	Letter of credit number S30896T in the face amount of $50,000.00 unsecured and issued by Compass Bank for the account of Heckmann Corporation.

 

3.	Letter of credit number 242 in the face amount of $56,098 issued by Bank and Trust of Pointe Coupe for the account of Heckmann Corporation.

 

4.	Letter of credit number 243 in the face amount of $77,800 issued by Bank and Trust of Pointe Coupe for the account of Heckmann Corporation

 

5.	Letter of credit number 244 in the face amount of $60,078 issued by Bank and Trust of Pointe Coupe for the account of Heckmann Corporation

 

6.	Letter of credit number 245 in the face amount of $59,882 issued by Bank and Trust of Pointe Coupe for the account of Heckmann Corporation

Item E. Commercial Tort Claims.

None.

 

Schedule II to Pledge and Security Agreement

---

SCHEDULE III – A

to Pledge and Security

Agreement

INTELLECTUAL PROPERTY COLLATERAL

Item A. Patent Collateral.

Issued Patents

 

Country		Serial No.		Issued Date		Inventor(s)		Title
None.		None.		None.		None.		None.

Pending Patent Applications

 

Country		Serial No.		Filing Date		Inventor(s)		Title
None.		None.		None.		None.		None.

Patent Applications in Preparation

None.

 

Schedule III to Pledge and Security Agreement

---

SCHEDULE III – B

to Pledge and Security

Agreement

Item B. Trademark Collateral

 

Trademarks, Service Marks, Trademark Licenses
Trademark		Registration Number		Date		Jurisdiction		Owner
HWR HECKMANN WATER RESOURCES CORPORATION		N/A		April 14, 2011		United States		Heckmann Water Resources Corporation
READY FILL		2210793		December 15, 1998		United States		Thermo Fluids Inc.
FEEL ECO-CONFIDENT		3642705		June 23, 2009		United States		Thermo Fluids Inc.
THERMO FLUIDS		3590451		March 17, 2009		United States		Thermo Fluids Inc.
GREEN SHIELD PARTNERS		3750421		February 16, 2010		United States		Thermo Fluids Inc.
GREEN SHIELD SERVICES		85307778		April 28, 2011		United States		Thermo Fluids Inc.
ECO SHIELD		85307747		Filing Date: April 8, 2011		United States		Thermo Fluids Inc.
THERMO SHIELD		58307753		Filing Date: April 8, 2011		United States		Thermo Fluids Inc.
PERFORM		77505823		Filing Date: June 23, 2008		United States		Thermo Fluids Inc.

 

Schedule III to Pledge and Security Agreement

---

SCHEDULE III – C

to Pledge and Security

Agreement

Item C. Copyright Collateral.

None.

 

Schedule III to Pledge and Security Agreement